Mad Money

VMware executive: As the cloud grows, so does the 'new hardware economy'

Key Points
  • "Mad Money" host Jim Cramer spoke with VMware executive Sanjay Poonen to hear the latest on his company's landmark deal with Amazon Web Services.
  • Poonen said companies are embracing a hybrid approach to the cloud and waking up to the "new hardware economy."
VMware exec on the 'new hardware economy'

Twenty years ago, the hardware economy was responsible for massive hard drives and clunky PCs. But one VMware executive told CNBC that there's a new iteration at work.

As more and more companies turn to cloud-based solutions in order to cut costs and connect with an increasingly digital world, Sanjay Poonen, VMware's chief operating officer of customer operations, said many are embracing a hybrid approach to the new technology.

"As you think about companies and their future, they have to decide how much data center capacity they want to use now," Poonen told "Mad Money" host Jim Cramer on Tuesday. "Some people feel they run a data center very well. We can help them modernize it with software, and that's what we do very well. Some of the companies say, 'Listen, I don't want to expand a lot of my data centers. I want to use the new hardware economy.' If you talked about the hardware economy 20 years ago it was Dell, HP, IBM, Fujitsu, Cisco. The new hardware economy is not just those players, but [Amazon Web Services], [Microsoft] Azure, Google, IBM."

VMware, a cloud infrastructure, data center and virtualization company, recently partnered with Amazon Web Services, the online giant's cloud computing arm, to provide customers with a more integrated solution.

"If you could get the benefit of both worlds, the same tools that you've known at VMware for managing and automating that, but get the data center capacity on the fly, that's what we've brilliantly innovated here," Poonen said.

VMware's central aim is to help high-profile customers like Coca-Cola and Nike manage on-premise and private cloud operations, pair those functions with the public cloud and develop technology across the data center, the cloud and the mobile landscape.

The company's 500,000 customers include an assortment of retailers, almost all of whom use the cloud giant's AirWatch technology in their stores to help secure devices they sell, the COO said.

Poonen added that Nike plans to build out data centers and many of its "next generation, consumer-facing apps" with VMware.

"The key thing ... is to become a trusted advisor to your customer, and that's what we're doing," he said.

And when it comes to concern about a slowdown in cloud growth or companies' hesitation to make the move to "new hardware," Poonen said it's overblown, especially considering VMware's position.

"We think there's going to be a good amount of spending in the private cloud on-premise and into the public cloud. And we feel we're one of those quintessential companies that can bridge both sides of that chasm. And, you know, we'll have to see [what] the future holds in terms of public spending and also private spending, but we feel optimistic and that's what we've seen in both our results the last several quarters and how we look into the future," Poonen told Cramer. "I think there's innovation to be had in tech."

Watch Sanjay Poonen's full interview:

VMware executive: As the cloud grows, so does the 'new hardware economy'

Disclosure: Cramer's charitable trust owns shares in Alphabet, Google's parent company.

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