conversation with michael dell. first to our lead, the world's most valuable startup may be going public sooner than we think. the incoming uber c.e.o. met uber employees wednesday and thinks the company should go public within the next few months. he also outlined some of his top priorities at the job, including coming up with a new set of core principles and bringing in a new chairman to help implement the agenda. uber tweeted out some of his remarks, saying, "the company has to change. what got us here is not going to take us to the next level." in addition to taking the ceo chair, he will likely get a seat on the board, opposite chairman travis kalanick. meanwhile, travis kalanick has already expressed interest in returning to a more active role in the company which could create a potentially awkward dynamic that khosrowshahi will have to manage. in the meantime, it was all smiles at the new board meeting as arianna huffington shared this selfish on the changing of the guard at the ride-hailing company. we spoke with our bloomberg tech reporter, eric newcomer, and our global head of technology to find out what else happened at that meeting. >> there were sort of some jokes celebrating travis' role at the company. saying what got them to this point is not what will get them ahead. obviously, this conversation about the ipo. i don't know. 18 to 36 months seems very far to me. it is a distant thing with lots of hurdles in the interim. but this is a guy, khosrowshahi, who ran a public company for a long time, so he understands the importance of going public at some point. emily: what do you make of the show of camaraderie? the all smiles, the hugs? >> exactly. i think it was not just what was said but how it was said. this is a showing of unity. ryan graves, one of the cofounders, introduced the proceedings. travis was there, shedding tears introducing dara. other board members were there. perhaps not everyone on that very contentious board, but it was a message sent to employees, drivers, and the media and their customers that they are trying to send, that these dark days are over. they want to hit the reset button and get out of these headlines a little bit while repairing damage to the brand. emily: he says he is looking for a chairman. travis says he wants a more active role. travis is obviously very emotional about how this has unfolded. do you think that person could be travis? >> for now, i would say no. the board approved an independent chairperson, which would be someone outside the company. they would have to reverse themselves there. emily: what role could travis take on? >> i think advisor could be the role for now. it is not clear if he will get more than that. >> remember, this is all tied up in litigation. the other news today is the lawsuit filed in is moving to march arbitration. it is somewhat of a victory for travis. he wanted this to be resolved, but his status on the board and the two board seats he controls is very much still in question. pending the outcome of that, i think we will see what type of influence he will retain on the board and operationally. emily: let's talk about that lawsuit moving into private arbitration. he was asking for it to be dismissed, which it was not. shervin pishevar, another early uber investor, released a letter today. and he was in delaware to speak with the court. bear with me -- i just want to read a couple of snippets. he is coming in on the side of travis saying, "we are swimming in the crucible of one of the grandest business and moral battles of our generation, and we writes with the souls indelible, eternal and permanent -- we write with the souls of thousands of lives saved, the lives of millions of jobs created liberating multitudes of drivers from the shackles of servitude to iniquitous taxi cartels of corrupt cabals that choked cities with their pollution of air and morals." i am glad i got all of that out. what is going on here? eric: i think, shervin -- he is a good friend of travis. he wants to show his absolute support. he is a man of passion. he is communicating in his own way that travis has done good by creating uber, which he sees as a public utility that has broken up the taxicab coalitions. so i think he is trying to frame it in perhaps an overdramatic way. >> the problem is not only that the writing is overinflated, but it comes at a terrible time. this was a day about unity, and he is drawing more attention to the divisions that still are there. it feels a little tone deaf. emily: what is the strategy? is there a strategy here? brad: i think he's trying to muster public support for what he sees as still a divided board, but it does not really make the argument all that persuasively. emily: what do you make of that 18 month to 36 month time frame for an ipo? 18 months is a bit sooner than we would have thought, right? eric: it is near enough to say that it is possible but who , knows? it is so far away that it is hard for people to get their heads around and take too seriously. nothingink it is almost statement that sounds sort of serious and professional. brad: this is a company that is still going very quickly but is losing per quarter. $600 million he has got a lot of strategic decisions about where he wants to grow and where he wants to pull back with ancillary businesses. with this statement, i think he is buying some time to put off the pressure of liquidity. i think right now, this is just the proverbial heisman stiff arm to give himself some time while he figures out what is going on. emily: bloomberg's eric newcomer and brad stone. a little later in this show, we will hear from the man who replaced dara khosrowshahi at expedia. he joins us to discuss his plans for leading the online travel company. next, we bring you our exclusive conversation with dell chair and c.e.o. michael dell. , his thoughts on the future of the cloud, next. this is bloomberg. ♪ ♪ emily: google agreed to comply with europe's demands for the way it operates its shopping search service. a rare instance of the internet giant down to pressure to avoid more fines. the tech giant faced a deadline on tuesday to disclose how they plan to stop discriminating against rival search services. google said it is sharing the plan with regulators but declined to comment further. if google did not submit a plan to the e.u. by the deadline, it would have faced daily fines on top of its $2.7 billion penalty. oracle is hiring another 5000 employees for its cloud software business. if i for market share any fast-growing industry. the move is the latest in a back-and-forth between oracle and its main rival, salesforce. c.e.o.ek, the salesforce bragged he was on track to hit record revenue for this year, a goal oracle was trying to hit first. las vegas played host to vm world. the annual event one of the tech , industry's top cloud infrastructure and digital workspace events. i caught up with dell technologies chair and c.e.o. michael dell for an exclusive interview. i started by asking what he was most excited about. take a listen. michael: what we are seeing is the emergence of this sort of multi-cloud world. customers are figuring out that cloud is not really a place but a way of doing i.t. they are modernizing, automating their existing infrastructure, and they are also leveraging the public cloud and other services and software. vmware is incredibly well positioned, with their innovation they are creating to enable the new connected future, and do it in a secure manner. emily: when you say multi-cloud, you mean public and private? you think hybrid cloud is the way the future? michael: i think customers are adopting i.t. in a hybrid fashion. all the customers we talked to are already using many different modes of i.t. and when you imagine forward to the future of an enormous number of connected devices as the cost of sensors comes down, you are actually going to have a distributed computing world that is far more vast than what we have today. emily: talk to me about some of the partnerships. vmware partnered with amazon a year ago. they made it official. vmware also partnering with google. what is the impetus to partner with what could be considered your enemies? michael: the partnership to us was about bringing together the number one private cloud with the number one public cloud. that gives customers great flexibility to leverage their vmware software and capability on a public cloud environment. that is great. with google, we are bringing together pivotal and very developer-friendly capabilities that pivotal has brought to half of the fortune 500 with kubernetes, a cloud operating system, put in the open source community. and bringing that to the 500,000 plus customers that vmware has in a secure manner. that is creating a developer-friendly infrastructure that allows companies to develop these next generation apps, put them in containers, and deploy them on premise or in the public cloud. this is exactly what customers are asking us to do. emily: do you have any concern that these public cloud owners could steal your private cloud business? michael: what i see is that when new things happen in the industry, if they are good for customers, if you stand in the way of those, you do so at your own peril. just like when vmware just came out as a tiny company, when it was just starting, dell was the first server vendor to embrace vmware. and yes, we sold fewer servers at the beginning, because you could virtualize the server. but we ended up selling a whole lot more servers than we ever imagined and now we are number one in the world in servers. we have been growing in double digits and the business is doing very well. when customers want different modes of i.t., when they want the public cloud in addition to the private cloud, it is important for us to listen and bring those capabilities to our customers. emily: so when it comes to the amazon deal or the google deal, how can dell, in particular, more broadly, use that deal? michael: vmware and pivel are both parts of dell technologies. certainly combining all of our sales force across the company, all of our channels, we will be bringing those capabilities to all of our customers. one of the things that we have seen in the combination is this idea that customers actually do not want to have more partners. they want fewer partners. and by bringing number one in everything all in one place to our customers, we have seen really a fabulous response. revenue synergies is greater than we thought, faster than we thought. it is because we brought this broad set of capabilities. as i said, dell emc, vmware, go together like peanut butter and chocolate. emily: our exclusive interview with dell technologies chairman and c.e.o. michael dell. on monday, amazon spent its first day as the owner of whole foods cutting prices by as much as 43%. markdown items were seen with orange signs, reading "whole foods and amazon" with the old and new prices listed. in a sign of how the retailer is changing, the amazon echo was also on sale for a company that visit --9.99, a sharp pivot for a company that is traditionally known for kale. we spoke about this with olivia zaleski and james cakmak. olivia: lots of price cuts, we can see them on bananas, we saw them on lean beef, peanut butter was a big one. emily: avocados, that is all i want to know. olivia: you care about the avocados? they were down a dollar. my favorite, rotisserie chicken, was down five dollars. which is a huge price cut. emily: was it crowded? olivia: it was. it was really crowded. i spoke to people who held off on their big weekend shop because they wanted to go to the -- wanted to go monday to get to big savings. emily: interesting, james, that you would see amazon echo's in the store. do you think people will be buying these at whole foods while they are grocery shopping? james: buying the echo's? emily: yeah. james: possibly. i do think the echo was actually the first successful entry into the living room. we are seeing it trying to be copied by apple and google, obviously not as successful as the echo. but when you think about the whole whole foods transaction for amazon, this is just another point to underscore the deflationary impact you are seeing from amazon across all of retail. as you increase the touch points with the customer, especially as it relates to grocery, i think the opportunity is not just limited to the grocery here, but think bigger picture into restaurants and prepared foods, and all the way down the supply chain, i think you will feel the effects. a big win for amazon to get this deal to be approved by the sec. emily: within the grocery business, how do you see grocery competitors responding? whether it is cosco or walmart or kroger? james: i don't think you can. the problem is the business models are so different. what amazon has the opportunity to do is operate at a target 0% margin. they are able to do that because of the fact that their business is subsidized through the cash flow proceeds from aws. there is no grocery that has that luxury, and no retailer that has that luxury. that is why you continue to see a deflationary impact from amazon. i think as you look long-term, this grocery is a massive step toward capturing an even greater part of the broader economy. emily: coming up, another bloomberg scoop on the next iphone. we will tell you what new tricks c.e.o. tim cook might have up his sleeve when he gets up on stage later this month. this is bloomberg. ♪ ♪ emily: one of the world's largest drone manufacturers is making a security push. dji will pay around $30,000 to anyone who finds flaws in the software. the program dubbed the dji threat identification reward program comes after the u.s. army ordered personnel to stop using drones made by dji due to security holes. dji says the program was used to -- created to identify threats to users private information. apple has set september 12 for its most significant new product announcement in years. last week, bloomberg was a first to report on several new features of the iphone including , a facial recognition software to unlock the phone with your face. this week, another scoop. apple is also planning to eliminate the concept of a home button on the flagship device according to people familiar with the gadget. the move would mark the biggest interface change in the iphone's 10-year history. our bloomberg tech reporter mark gurman brought us his scoop. mark: i think iphone users will be very excited about this new phone. obviously, they have been working on this phone for a long time. trying out a bunch of new features to make a big splash for the product's 10th anniversary. the biggest change, they are getting rid of the home button. it will not be a virtual home button. it will be an entirely new system based around gestures and thumb control. emily: the home button is actually staying on the seven plus, or the seven s plus. it is not completely gone away yet. mark: there will be three new phones. two of them will have the current design of the 7's. the same screens and they will have the fiscal -- physical home buttons. the big changes are happening on the higher premium phone. emily: what else did you see? there are design changes, the screen is taller. mark: what some people don't get is the new iphone will be significantly taller. it is able to fit more content. you will see more of text message conversations, more of maps, webpages, other applications from the app store. it is a big change to the screen as well. emily: talk to us about what is going on with toshiba and the the chip unit and apple's interest in that? mark: apple is always looking for a new way to get components for the lowest cost and the highest quantity. they have done so many deals. it is called nand chips. that is what powers the storage ipads, and other devices. it is an absolutely critical component to the iphone, just as the screen or the cellular reception modem is critical. they want to be able to get as many of those, and obviously, toshiba does great work on chips. emily: what does this mean for apple in terms of performance and supply chain issues? mark: probably little in terms of performance because of the chip suppliers are pretty much on par with storage capacity and speed. having more suppliers gives them more leverage. emily: do we know anything more about when we will see this new phone in person? mark: yes. mid-september is when we understand this new phone will be announced. emily: our bloomberg tech reporter mark gurman there. apples stock success this year helped push c.e.o. tim cook's compensation to new heights. less week, cook was awarded shares of apple stock valued at $90 million. cook's total compensation surged to $150 million last year, compared to $72.9 million in 2015. we spoke with anders who wrote about this for bloomberg news. he spoke with caroline hyde. >> when he came into the c.e.o. role, apple said, ok, we will give you a massive stock of stock that you will get two increments for 10 years. it was worth about $370 million at the time. a couple years later, it was restructured and split up over the years. cook, in a typical year, he can collect about 280,000 shares as long as he remains on the job and another up to 280,000 shares if apple's share price beats at least two thirds of the companies in the s&p 500. they did so in the past three years, so he corrected all those shares. caroline: i am looking at the pay go function in the bloomberg. you can see how he is really high flying. he is number two at the moment in terms of where he stood previously. talk to us about how tim cook stacks up versus the rest of the tech ecosystem with the new conversation? -- the new compensation being handed out? >> in the bigger scheme, it is almost absurd that even tim cook's figure, which is really, really high, does not hit the ceiling when it comes to pay in the tech sector. we have seen mark lore at walmart, who was north of $200 million in 2016. prior to that, we have sundar pichai, who also every other year, he gets a big stock grant from google. so even though apple's cook gets quite a bit of money, it does not tend to be up at the very top. caroline: nothing like m&a. that always helps his compensation. talk to us about whether or not this will be sustained. will we always see tim cook's compensation tied to the share price performance? should it be tied to another critical measurement? revenue, for example? >> that is a frequent debate among pay consultants and people in the boardroom and the executive suite. is share price really the best measure of corporate performance? because some people say perhaps you should focus on other internal financial matters, such as revenue or product development, which will, in turn, drive share prices. share price being the ultimate goal, but perhaps not the journey to get there. the way apple's award for cook is set up, it is tied to share price. the board can change that. but it has been successful both for shareholders and for cook himself. so i would not say that i see any change is coming in the near term, but who knows. caroline: and how does it fit with those who work at apple, with the general public? i'm speaking from london, where there is so much handwringing and government pressure and general public outcry when you see c.e.o.'s being paid significantly more than the average employee and average person on the street. how is it being absorbed in america, where it is a little more land of those that can make it? anders: making a lot of money is not seen as a bad thing in the united states of america. we know that. cook actually did get a bit of pushback for his compensation when he first signed on and got this large $370 million award. it was actually at cook's request that part of these shares were tied to the company's share price performance. and if the shares don't beat at least two thirds of the companies in the s&p 500 than he gets fewer shares. emily: that was bloomberg's anders melin. coming up, bitcoin prices have been hovering at record levels once again. we will take a deep dive at what is driving the crypto craze next. a reminder that all episodes of "bloomberg technology" are live streaming on twitter weekdays at 5:00 p.m. eastern. this is bloomberg. ♪ so we need tablets installed... with the menu app ready to roll. in 12 weeks. yeah. ♪ ♪ the world of fast food is being changed by faster networks. ♪ ♪ data, applications, customer experience. ♪ ♪ which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. ♪ emily: welcome back to the best of "bloomberg technology." i'm emily chang. cryptocurrencies like bitcoin and ethereum have been surging this year, causing interest in digital assets to spike. this week, we took an in-depth look at the rise of virtual currencies. we began by looking at what has made the market so volatile. caroline hyde reports. caroline: cryptocurrencies are in the midst of a record-setting run. bitcoin and ethereum have seen their value skyrocket this year. bitcoin, as close to a household name as you can get in cryptocurrencies, have shot up over 350% so far this year. in fact, it jumped from just over $1000 at the start of the year to over $4500 recently. ethereum, number two in the digital money market, is on the move as well. camilla: we see companies across all industries looking at how to use this technology. caroline: it is not all smooth sailing. just look at a recent 30 day snapshot in bitcoin's price, and you can see a roller coaster. in august of last year, bitcoin plummeted 13% after hackers stole $65 million. this year, ethereum also fell on tough times. camilla: we have to remember that this technology is still pretty new. that causes there to be glitches along the way. caroline: even with volatility inherent in these new currencies, there are still plenty of promising opportunities. there is a growing mainstream acceptance. big investors like mark cuban are already throwing their weight behind cryptocurrencies and the block chain technology that underlies them. we are also starting to see more financial institutions, such as fidelity, and retail investors embracing virtual currencies. if the sec approves the first bitcoin electronically traded fund, it will make it easier for the everyday investor to jump in. perhaps tempting given bitcoin has also soared past the price of gold for the first time this year. but given we are not four years removed from the infamous bitcoin crash of 2013, there might be one sure bet you want to make when looking at the future of cryptocurrencies. and that is to buckle up. emily: caroline hyde joins us live from london, as well as roger mcnamee, cofounder of elevation partners, a private equity firm that invests in private intellectual property. great to have you on the show. highs, lows? bitcoin -- are we in a bubble? roger: i would think we probably are. i think it is important to distinguish between cryptocurrencies and the block chain technology that comes underneath them. to me, the thing about cryptocurrencies is they really are not currencies. they are really commodities, like soybeans. they are things that people trade to create a return. emily: what does that mean about the value? roger: it means it will always be volatile. i think it is volatile by design. i think it was designed to be volatile. currencies, by definition, need to have stability. if you look at this and think about it, it is more like trading gold futures or oil futures. those are going to be inherently volatile. yes, there is something very valuable underneath them, but you would not use gold futures to pay your mortgage or your child's college tuition. emily: so you think if you own bitcoin now, does it have long-term value? roger: i think it is too early to know. structurally, these things do not seem like they can make the transition to become real currencies, but i am not sure that matters to investors. i think they are in it for the volatility and the return. and that may work out, as it has recently for a lot of people. but i do think we are not done with the sharp drops, and i think there are enormous structural issues. there are thefts of the crypto's here, there, and everywhere. that, i think, is going to continue. the whole concept of the role of miners and the fact that these are things adopted primarily by black and gray markets, suggests -- it confirms my basic notion. which is that these are far from mainstream currency options. emily: you mentioned people getting robbed, the number of complaints about coinbase, the biggest cryptocurrency exchange, has gone from 600 to 300, and we are seeing so much more mainstream acceptance. give us some examples of how we are seeing mainstream investors embrace this. caroline: i think that is what is so fascinating. it is indeed the likes of fidelity, one of the biggest money managers, they are mining bitcoin themselves. they themselves are looking to be getting into this as an asset class. we are seeing banks between the -- banks distinguishing the tween the cryptocurrencies and block chain technology that is shared record-keeping underlying it. banks want to embrace blockchain. six banks today joining a project which is called the utility settlement coin. they are building their own coin. it will be available by the end of next year. why? to make financial transactions that much easier. clearing settling. , this is why they want to introduce this sort of technology. not, perhaps, as a store of value, as we are seeing bitcoin suddenly become. that is what is so interesting. we saw the split in bitcoin. into bitcoin and bitcoin cash. really at the heart of this is what is bitcoin? does it remain a store of value? does it become a so-called haven, when you see a flight to value, when you see concerns about north korea, for example, gold shoots up. as does bitcoin. or does it become a payment mechanism? does the transaction capacity have to scale? do we need to start to see improvements in the size of the transactions? this is how much bitcoin is beating gold. what is interesting is talking about the flood of investors into this market, you are in for a roller coaster ride whether you hold the actual cryptocurrency or you gain exposure via fund. check out my bloomberg at the moment. i am going into g#btv 3994. what do you get? a crypto roller coaster. you see in the white line, bitcoin investment trust. this is where money managers have been pouring their money, who do not want to buy bitcoin outright. they want exposure. on the bottom half, we see the 90-daty volatility of that investment trust is more than three times the volatility of bitcoin. whether you want to be overall, it seems you are in for a rough ride, whether you have a cryptocurrency or investment trust. emily: if you look at the run up in bitcoin, it is dwarfing the run-up before the tech bubble, before the housing bubble, roger, is that a concern? roger: only if you are long on bitcoin. if you have already taken your profits, you're sitting there, not a problem at all. we talked about $170 billion interest in this category, that is why you see banks and others coming in. why are we having this segment right now? there is a lot of interest in it. the trick is, at least for viewers watching this, is to separate the commodity of bitcoins from the notion of a cryptocurrency. a currency needs to have stable value. i don't think you will get there from this. then, the third piece, this is the one i am excited about, is the underlying block chain technology. there are a lot of reasons why people would like to be able to do high-volume financial and information transactions at a very low cost with privacy and security. block chain technology offers that promise. i think everyone is excited by that. what i would love to see is of one of these banks or financial institutions actually try to create a currency. try to create a stable store of value that would rival a national currency. that is the promised land that i think so many people are hoping to go to. emily: when it comes to block chain, there is talk that it could revolutionize not just financial services but real estate, giant technology companies. roger: and sale of information. emily: where do you think the block chain could be the most revolutionary? or is that an exaggeration? roger: too early to tell. to me, what is exciting about it is it is like the internet before it. it is a distributed system where scalability is not a problem. with the scale of markets you have today, if you take that off the table as an issue, you can apply it to almost anything. now, what remains to be seen is which markets will find this most appealing. and in its current state, the answer is only experiments. consumers are not yet interacting with this regularly. but a lot of money has been raised. we are going to run that experiment and see. i look at this and go, to me, that part is really, really exciting. it makes it worth going through what i think is going to be further issues around the so-called currency part of this discussion. emily: that was elevation partners cofounder roger mcnamee and bloomberg's caroline hyde. coming up, expedia's new c.e.o. mark okerstrom talks about his plans for the company, including a possible partnership with uber. this is bloomberg. ♪ ♪ emily: as we discussed earlier, this week saw uber's c.e.o., dara khosrowshahi, move from being expedia's c.e.o. the online travel company did not waste time. they promoted the chief financial officer to the top job. we spoke with him a day after accepting it. i started by asking him about his reaction to khosrowshahi's move. mark: these things, you talk about them for years. somewhat like a sports analogy, you prepare the team for a big game. suddenly, you get a call on sunday night and the game is not two weeks from now, it is tomorrow. it unfolded like that. we were already for this eventuality when it did unfold. i do not think it unfolded exactly how everyone had planned. but we are all happy around expedia. we are all excited. we are happy. i'm happy for the people at uber. i think he will do a fantastic job. emily: when it comes to you and your job, barry diller said no one else was considered. i know you and dara have worked together for many years. what is your vision? what are some things you might do differently? mark: as i said, i have been very involved in the strategic direction of the company for a long time. dara and i have been lockstep in all the major strategic decisions, along with our chairman, barry diller. i don't have a long list of things i'm dying to change. we have a number of priorities across the company. certainly becoming more international is one of the key priorities. i will be very focused on making sure we continue to expand globally. the big transition at homeaway is a big priority. i think you will see a lot more of the same for us. if i do my job well, it might go faster. emily: let's talk about that. you now have some deep ties to uber's new c.e.o. what what are some ways you could work together? like, perhaps, free uber rides for expedia customers? mark: we have talked a long time about possible ways we could integrate with uber, integrating their service into things like the homeaway app. i'm hopeful that in the future now that we have a direct connection, the talks might be easier. emily: dara is walking into an incredibly challenging situation. an ousted founder who still wants a role in the company. several lawsuits. very difficult board dynamic. we have heard a lot about he can deal with big personalities. tell us more about why you think he has what it takes to take on some of these personnel challenges. mark: i think above all, dara has one of the highest levels of emotional intelligence i have ever seen. he knows people. he is humble. he listens. and i think, above all, dara makes people around him better. people want to be around him. people want to think like he does. he is a great role model, and he is a man of high integrity. he values diversity, gender balance, he really stands for a lot of the great things that, from what we read, may be lacking at uber. so i have 100% confidence that uber will be a much better company under dara's leadership. emily: information retracted a report that you were going to uber with dara. they were wrong. but there is a point that dara has a lot of executive positions to fill. are you concerned that a number of executives from expedia are going to follow him there? mark: i think we feel very good about our executive team. we have, i think, one of the most talented executive teams out there. we have been together for a very long time. they are really excited about the prospects around expedia inc. they are highly engaged. they are highly committed. we have been working together on a strategy that we are not yet done, so there is lots of work yet to do ahead of us. i think we feel pretty good about our team. emily: that was expedia's new c.e.o., mark okerstrom. coming up, vmware's roster of cloud computing partnership grows. my conversation with the c.e.o. is next. and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪ ♪ emily: south korea's samsung is investing $7 billion in flash memory chips. the three-year investment will go towards its xian plant. samsung's memory chip business has helped it to become more profitable than apple in its recent quarter. this comes after a seoul court sentenced jay y. lee to prison in a bribery scandal. vmware announced several new partnerships with the likes of google and amazon. i sat down with vmware to talk about how current partners reacted to the latest about cloud computing partnerships. pat: we have those conversations. we do not want surprises. because we are trying to be thoughtful about our relationships with them. clearly, amazon says this worked for the amazon service we just did. ibm we are also working with and pivotal in that community. we go through all of those discussions, because it is important to us. think about these partnerships like friendships. you know, i may do some things that you did not necessarily want me to do, but let me explain to you -- i don't want to surprise you. and maybe there are even opportunities for us to work together in different ways. that is how we approach working with our ecosystem partners. emily: does the frenemy term apply? >> we say it is all friends. emily: are you concerned that this partnership with amazon, for example, could lead to them stealing your business? pat: absolutely not. if you think about it, several have asked that question. customers, if they wanted to just move to the amazon service, they would have. it is not like the amazon service appeared yesterday. it is been around for a decade plus now. what customers have found is that to re-platform my application, it is hard and doesn't give me a lot of value. yesterday, i had the app, tomorrow, i have the app running on amazon cloud. i had to put a lot of work to get it there. that is the problem we are solving. we are going to customers and saying you can now take advantage of cloud scale, cloud geography, cloud economics without re-platforming the application. in many cases, these applications that we are now bringing to the cloud, they might have been curated for 20 or 30 years as they built those. complex networks, security management, we now give them the easy button. amazon is excited, because they have heard that from their customers, too. emily: it has been a year since the big merger closed. the biggest tech deal in history. what has it been like for you under the dell umbrella? the high points and the pain points? pat: when we announced the merger, michael and i got on stage. i said three words describe -- independent, ecosystem, acceleration. independent. we are an independent company. we are governed by the board. dell and silver lake happen to be our largest shareholder -- emily: michael doesn't bug you too much? pat: of course he bugs me. he is the chairman of the board. but i am managed by the board, and it is really the multiplicity of the board. he was committed to our independent ecosystem. and he is going to accelerate his business with us. we said a billion dollars of synergy. clearly the independence is , working great. the board is happy. obviously, when the company is doing well, the board is happy. that is wonderful. ecosystem. think about the partnerships we have announced. ibm, amazon, the hp announcement this week. all of those are not necessarily in the traditional view of dell's best interest. but michael says if it is good for vmware, it is good for dell technology. the ecosystem is being supported. finally, we raised our guidance for the acceleration. last quarter we did that. overall, we are seeing them sell more of our products and build more new products together. overall, we are exceeding the expectations that we had a year ago when we announced the deal. emily: how is the networking business doing? is it still growing as rapidly? are you seeing meaningful competition from cisco? pat: networking is going great for us. the vision i laid out is bold in the sense that it is not just in the data center anymore but between data centers, between clouds, we are stretching it to servicethe core provider network. today's announcement into next-generation container. we are viewing it as a common fabric that connects these things together. turning data centers into centers of data that have a connection across everywhere they go. going very well. the relationship with cisco, they continue to view this -- that networking layer, we are in this hardware business, and what we're finding is customers are running a lot of our overlay network on their hardware. that is great. that is ok. it works great. maybe half of our customers run it that way. but our vision is much bigger and broader than any traditional view of networking. that is why it is a thrilling period for what we are doing. emily: just a last question about security. i know you unveiled a new security product. how concerned are you at the level of threats that we're seeing from cyberspace? will the industry ever be able to really get ahead? pat: yeah. and as i declared in my keynote on monday, i think we, the tech industry, have failed our customers in security. we have almost 2000 different companies in security. mind-boggling innovations going on, but there are so many products that are, as we are calling it, "chasing bad." we need to think holistically in a different way to solve the security dilemma. we call it "enforcing good." we announced new products. app defense is one of those. we said there are three things we need to do to fundamentally change the game in security. one is it is not about infrastructure. infrastructure must, essentially, eliminate many of those products and make it secure infrastructure. literally, products and companies go away. they disappear into the infrastructure. you cannot turn it off. it is always secure. second, we must integrate into the core security ecosystem and automate, integrate, validate, so customers are not trying to put all these pieces together. we have done it for them. third, enable consistent cyber hygiene. we have been involved with the u.s. government. we had representatives and senators talking about cyber hygiene. they are introducing legislation. we laid out five cyber hygiene principles. that if you do these things, you will not be sony targets. the service area of those will be radically reduced, if not eliminated. sort of like a great sports team. you practice the basics. the people who are practicing the basics and implementing these things consistently and well, we think we would eliminate a large portion, maybe 80% to 90%, of all cyber losses. those would be eliminated. we believe this is the right way to think about security in the future. we at vmware are stepping forward in a much bolder way in this regard, partnering with dell in our ecosystem. it is time to change the game in cybersecurity. c.e.o.that was vmware pat gelsinger. that does it for this edition of best of "bloomberg technology." we will bring you all the latest in tech throughout the week. tune in each day at 5:00 p.m. in new york, 2:00 p.m. in san francisco. all episodes of "bloomberg technology" are live streaming on twitter. check us out on weekdays. that is all for now. this is bloomberg. ♪ ♪ >> begging for war. the u.s. says the strongest possible sanctions on north korea are appropriate to end its nuclear ambitions. >> the yen and gold rising further on food -- renewed tensions. pyongyang may be preparing another icbm launch. struggling.still >> bitcoin tumbling after china declares initial coin

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