VMware CEO Pat Gelsinger, coming off a strong earnings quarter despite COVID-19 induced economic upheaval, repeated his cloud-and-software-first mantra at the Bank of America 2020 Global Technology Conference this afternoon. “We continue to see this hierarchy,” he said. “Wherever GDP is, tech will be better, and software and cloud will be better than that.”

Echoing some of his statements from last week’s Q1 earnings call, Gelsinger said that despite its economic implications, the global pandemic has made cloud computing more important. It’s also increased the speed at which enterprises are going to make that move. “COVID-19 makes digital transformation more important — not less,” he said. Gelsinger expects this cloud migration and remote work to continue well after researchers develop a vaccine.

“This is a permanent change,” Gelsinger said. “We’re not going back.”

Gelsinger: ‘We’re Not Going Back’

Pre-pandemic, Gelsinger said about 20% of VMware’s staff worked remotely. Even after companies return to the “new normal,” Gelsinger said he expects more than 50% of VMware employees will work remotely more than half of the time. “It’s going to be one of those game changing kind of things,” he said. “I’m going to have more access to talent, less carbon footprint. So we believe that we’re going to see a step function, increase in the amount of distributed workforce for the world. Period. Also, education. Also, telemedicine. Every one of these categories, you’re going to say it’s just better this way.”

Gelsinger said he talked to around 200 CEOs across industries over the last couple months, “and almost uniformly they say my metrics look good. Maybe this is a better way to work?” Productivity remains high despite the remote workforce, and executives can meet with more customers, and at less cost and travel time, via video meetings.

Of course, Gelsinger believes that VMware will play a vital role in customers’ digital transformation. But he does make a compelling argument.

VMware’s 5-Pronged Strategy

VMware’s strategy didn’t shift because of COVID-19. It kept its focus on five key areas: cloud-native applications, multi-cloud, networking, security, and end-user devices, Gelsinger said. “Those are the five things that we do, and as we’ve looked at it through the lens of COVID-19, those are still the right things.”

However, he admitted to some “juggling” within those five areas as the virus shifted customers priorities to areas including end-user computing (EUC), edge, and SD-WAN.

“EUC: if you would have asked me in the middle of last year I would have said they’re sort of down the list,” Gelsinger said. “Well, hey, they are coming up the list.” So is virtual desktop infrastructure (VDI), as enterprises struggle to accommodate a much-larger-than-usual remote workforce, which Gelsinger expects to continue well into the future.

“This is a new plane of changing how we work, how we learn, how we live, how we care [for people]. All of these are going to be systematically changed, and VDI is going to be an increasing use case inside of that as one of the models,” he said.

Remember VMware and Microsoft?

Virtual desktop infrastructure, delivered as a cloud-service, allows customers to scale, and to quickly spin up thousands of new sessions to accommodate remote workers. It will “become a very natural extension to the solution set because of [VMware’s] cloud offerings,” Gelsinger said. He’s talking about VMware’s partnerships with all of the major public cloud providers including Amazon Web Services, Microsoft Azure, Google Cloud, IBM, Oracle Cloud, and Alibaba Cloud. VMware provides a common management plane across private data centers and public clouds — including former bitter rivals expected to kill VMware as customers moved to the cloud.

“Remember Microsoft and VMware? We kicked, spit, scratched, and clawed at each other for 20 years,” he said. “And now, as they announced a couple of weeks ago, the AVS or the Azure VMware solution 2.0, now we’re really delivering cloud together.”

On the other hand, NSX data center networking projects are “a little bit slower” because of COVID-19 and the lack of on-premises employees, Gelsinger said. “But VeloCloud? Wow,” he added. “Being able to connect and give quality service to the edge, to homes, to embrace transformation.”

Making VeloCloud a $1B Business

And speaking of VMware’s VeloCloud SD-WAN, Gelsinger said when VMware bought VeloCloud for $449 million two years ago, he predicted that VeloCloud would grow to be a $1 billion business for VMware. “I’m more confident of that post COVID-19 than I was before, and I was already pretty confident,” he said.

While VMware hasn’t specific how much revenue VeloCloud brings in on its own, in April the vendor said more than 225,000 branch offices have deployed VeloCloud. “We are the No. 1 vendor in SD-WAN,” Tom Gillis, SVP and GM of VMware’s Networking and Security business said at the time. This also set off an SD-WAN war with Cisco.

Gelsinger said there are three larger trends propelling VeloCloud toward the $1 billion mark. First, it’s part of VMware’s NSX networking and security portfolio. NSX started in the data center and VMware has since moved the network virtualization technology to the cloud and now out to the edge. “We’re going to transform the wide area network, and make this an on-ramp to the edge,” while helping customers connect their networks from the data center to the edge, Gelsinger said. “So that’s a big piece of our strategy.”

Second, VeloCloud allows VMware to provide distributed security at the network’s edge, closer to users and devices. “And then there’s entirely new models like SASE that are emerging — different ways to think about the security problem as well,” Gelsinger said. “So there’s a lot going on in that space.”