tl;dr: they need to straddle two worlds, pre-cloud and post-cloud infrastructure. When VMware says “hybrid cloud,” that straddling of “legacy” IT and “real cloud” seems to be what they mean:
That brings us to VMware (and many of the other traditional IT vendors who are trying to figure out what to do in an increasingly cloud-y world). Today’s keynote messages at VMworld have been heavily focused on cost reduction and offering more agility while maintaining safety (security, availability, reliability) and control. This is clearly a message that is targeted at traditional IT, and it’s really a story of incremental agility, using the software-defined data center to do IT better. There’s a heavy overtone of reassurance that the VMware faithful can continue to do business as usual, partaking of some cool new technologies in conjunction with the VMware infrastructure that they know and love — and control.
But a huge majority of the new agile-mode IT is cloud-native. It’s got different champions with different skills (especially development skills), and a different approach to development and operations that results in different processes and tooling. “Agility” doesn’t just mean “faster provisioning” (although to judge from the VMware keynote and customer speakers, IT Operations continue to believe this is the case). VMware needs to find ways to be relevant to the agile-IT mode, rather than just helping traditional-IT VMware admins try to improve operations efficiency in a desperate grasp to retain control. (Unfortunately for VMware, the developer-relevant portions of the company were spun off into Pivotal.)
This last parenthetical point is what always confus[es|ed] me about the Pivotal divestiture. I get all sorts of answers depending on who I ask, the official one (as far as I understand it) is always the least interesting, of course.