>>Welcome to the cubes coverage of C CFS, co con EU cloud native con in Valencia Spain, I'm John furrier. This is a preview interview with the co-chairs versus we have Jasmine James senior engineering manager and of developer experience and Coon cloud native con EU co-chair and RI ricotta Rocher computing engineer at CERN and Coon co-chair as well at EU. Great to have you both on great to see you, both of you, >>Hey, to be here, >>Us >>Keep alumni. So, you know, Coon just continues to roll and get bigger and bigger, um, and watching all the end user action watching the corporations enterprises come in and just all the open source projects being green litted and just all the developer onboarding has been amazing. So it should be a great EU and Vale span, great venue. A lot of people I I'm talking to are very excited, so let's get into it as co-chairs take us through kind of the upcoming schedule at a very high level. Then I wanna dig into, uh, some of the new insights into selection and program programming that you guys had to go through. I know every year it's hard. So let's start with the overall upcoming schedule for COCOM. >>Yeah. So I'll dive into that. So the schedule is represents a, quite a diverse set of topics. I would say, um, I personally am a fan of those, you know, more personal talks from an end user perspective. There's also like a lot of the representation from a community perspective and how folks can get involved. Um, as most of, you know, like our tracks, the types of tracks has evolved over the year as well. So we now have a community track student track. So it's gonna be very exciting to hear content within those tracks, um, through in Valencia. So a very exciting schedule. Um, yeah. >>And just real quick for the folks watching it's virtual and physical it's hybrid event May 4th through seventh Ricardo, what's your take on the schedule? Uh, how do you see it breaking down from a high level standpoint? >>Yeah, so, um, I'm pretty excited. Um, I think the, the fact that this hybrid will help keep, um, build on the experiences we had, uh, during the pandemic times to, to give a better experience for people not making, uh, it to Valencia. I'm pretty excited also about the number of co-located events. So the two days before the conference will include, uh, um, a large number of co-located events, focusing on security S uh, and some new stuff for like batch and HPC workloads that I'm pretty close to as well. Uh, and then some, some really good consolidation in some tracks like this value, which I think will be quite, quite interesting as well. >>So you mentioned this is gonna be like watch parties, people gonna be creating kind of satellite events. Is that what you're referring to, uh, in terms of the physical space gonna be an event, obviously, um, what's going on around, outside the event, either online or as part of the program. >>So, yeah, uh, the, the, all the sessions, uh, from, from the collocated events will be available virtually as well. I don't know if people will actually be setting up parties everywhere. <laugh>, I'm sure some people will. Yeah, >>There'll definitely be >>Some. And then for, for, for the conference itself, there will be dedicated rooms where for the virtual talks, uh, people can just join in and sit for a while and watch the virtual talks and then go back to the in person, ones, uh, Monday feel >>Like, yeah, it's always a good event. Uh, Jasmine, we talked about this last time and Ricardo, we always get into the hood as well. What's the vibe on the, the, the, the programming. And honestly, people wanna get, give talks. There's a virtual component, which opens up more aperture, uh, for more community and more actions as, as Ricardo pointed out. What's what was the process this year? Because we're seeing a lot of big trends emerge, obviously securities front and center, um, end user projects are growing data engineering is a new persona. That's just really emerged out of kind of the growth of data and the role of data that it plays and containers. And, and with Kubernetes, just a lot of action. What's the, what was it like this year in, in the selection process for the program? >>Yeah, I mean, the selection process is always lots of fun for the co-chairs. Um, you shout out to program committee, track chairs, you put in a lot of great work and reviewing talks and, and it's just a very, very thorough process. So kudos to all of us who are getting through it for this year. I think that lots of things emerge, but I still feel like security is top of mind for a lot of folks, like security is really has provided. One of the biggest, um, submissions is from, from a quantity perspective, there are tons of talks submitted for security track, and that just kind of speaks for itself, right? This is something that the cloud native community cares about, and there's still a lot of innovation and people wanna voice what they're doing and share it. >>Ricardo, what's your take, we've had a lot of chats around not only some of the hardcore tech, but some of the new waves that are emerging out of the growth, the mature maturization of, of, of the segment. What are you seeing, uh, as terms of like the, the key things that came out during the, the process? >>Yeah, exactly. So I think I would highlight something that Jasmine said, which is the, the emergency emergence of some new tracks as well. Uh, she mentioned the student track, but also we added a research track, which is actually the first time we'll have it. So I'm pretty excited about that. Of course, uh, then for the trends, clearly security observability are, uh, massive tracks for app dev operations, uh, extending Kubernetes had also a lot of submissions. Um, I think the, the main things I saw that, uh, kind of, uh, gain a bit of more consistency is the part for the business value. And, uh, the, the, the fact that people are now looking more at the second step, like managing cloud costs, uh, how to optimize, uh, spot usage and, um, usage of GPUs for machine learning, things like this. So I'm pretty excited. And all these hybrid deployments also is something that keeps coming back. So those were, are the ones that, uh, I, I think came out from, from, from the submission at this time, >>You know, it's interesting as the growth comes in, you see these cool new things happen, but there are also signs of problems that need to be solved to create opportunities. Jasmine, you mentioned security. Um, there's a lot of big trends, scale Ricardo kind of hinting at the scale piece of it, but there's all this now new things, the security posture changes, uh, as you shift left, it's not, it's not, it's not over when you shift left in security in the pipeline in there, but it's, there's audits. There's the size of, uh, the security elements, uh, there's bill of materials. Now, people who got supply chains, these are huge conversations right now in the industry, supply chain security, um, scale data, uh, optimization management, um, notifications, all this is built in, built into a whole nother level. What do you guys see in the key trends in the cloud native ecosystem? >>I, I would say that a lot of the key trends, like you said, it, right, these things are not going anywhere. It's actually coming to a point of maturation. Um, I see more of a focus on how consuming, how, how companies go about consuming these different capabilities. What is that experience like? There's a talk that's gonna be offered, um, as a keynote, um, just about that security and leveraging developers to scale security within your environment. And not only is it a tool problem, it's a mindset thing that you have to be able to get over and partner bridge gaps between teams in order to make this, um, a reality within, within, um, people, within certain organizations. So I see the experience part of it, um, coming a big, a big thing. Um, there's multiple talks about that. >>Ricardo, what's your take on these trends? Cause I look at the, the, the paragraph of the projects now it's like this big used to be like a couple sentences. Now you got more projects coming on, you got the rookies in there and you got the, the veterans, the veteran projects in there. So this speaks volumes to kind of things like notaries new, right? So this is cool. Wait, what does that mean? Okay. Security auditing all this is happening. What are the, what are the big trends that you're excited about that you see that people are gonna be digging in, in, in the pro in, in the event? >>Yeah, I think we, we, we talked about supply chain just before. I think that's, that's a big one. We, we saw a, a keynote back in north America already introducing this, and we saw a lot of consolidation happening now in projects, but also companies supporting this project. Um, I, I'm also quite interested, interested in the evolution of Kubernetes in the sense that it's not just for, what was it, it was traditionally used for like traditional it services and scaling. We start seeing, there will be a very cool keynote from, from deploying, uh, Kubernetes at the edge, but really at the edge with the lower orbit satellites running ES in basically, uh, space. So those things I think are, are, are very cool. Like we start seeing really a lot of consolidation, but also people looking at Kubernetes for, for pretty crazy things, which is very exciting. >>Yeah. You mention, you mentioned space that really takes us to a whole edge, another level of edge thinking, um, you know, I've had many conversations around how do you do break fixing space with some folks in, in the space industry, in, in public sector, software is key in all this. And again, back to open source, open source has to be secured. It has to be, be able to managed effectively. It needs to be optimized into the new workflows space is one of them, you know, you see in, um, 5g edge is huge, uh, with new kind of apps that are being built there. So open source plays a big role in all this. So the, the question I wanna ask you guys is as open source continues to grow and it's growing, we're seeing startups emerge with the playbook of you. You play an open source or you actually create a project and then you get funding behind it because I know at least three or four VCs here in Silicon valley that look at the projects and say, they're looking for deals. And they're saying, keep it open a whole nother level. Can you guys share your insights on how the ecosystem's, uh, evolving with entrepreneurship and, and startups? >>Uh, oh, I guess I'll start. Um, I think that it's such a healthy thing, um, to have such innovation occurring, um, is it's really just, uh, Testament as to how the cloud native community right. Nurtures and cultivates these ideas and provides a great framework for them to develop over time, going from, you know, the sandbox and incubating and graduating and having the support of a solid framework, I think is a lot of the reason why a lot of these projects grow so quickly and reach certain these high levels of adoption. Um, so it's a really fantastic thing to see. I think that, you know, VCC an opportunity and, and, and there's a lot of great innovation that can be, you know, operationalized and scaled, right. Um, and applied to a lot of industries. So I feel it, I feel like it's a very healthy thing. Um, it also creates a lot of opportunities about something I'm passionate about, which is like, you know, people getting involved in open source as a step into the world of tech. Um, so all of these projects coming about provide an opportunity for folks to get involved in a particular component they're interested in and then grow their career in open source. So really great thing, in my opinion. >>And you mentioned the student track, by the way, I kept to point that out. I mean, that's huge. That's gonna be a lot of people who have, you know, in computer science programs or self learning. I mean, the, the, the ability to get up to speed, uh, from a development standpoint, as a coder, um, you can be a rural comp SI or, uh, just a practitioner just coding. I mean, data's everywhere. So data engineering, coding, I mean, Ricardo, this is huge student and then just every sector's opening up. I mean, the color codes on the calendar is, uh, larger than ever before. >>Yeah. I think, yeah, the, the diversity of the usage and the communities is, is something that is really important and it's been growing still. So I, I think this one not stop. Um, I'm pretty, pretty, pretty excited to see also how we'll handle this growth, because as you mentioned, like everything is increasing in numbers, number of projects, number of startups around this project. Uh, so one, one thing that I'm particularly interested on as an end user is to understand also how to help other end users that are jumping in not only the, the developers or, or the people wanting to support these projects, but also the end users. How, how do they choose their sta how, how it's, how, how should they look like for their use cases, much more than just going, uh, from, from the selection, individual projects to understand how they, they work together. So I think this is a challenge for, for the next couple of years. >>Yeah. I mean, roll your own and building blocks, whatever you wanna call it, you're starting to see people, uh, build their own stacks. And that's not a bad thing. It might be a feature, not a bug. >>Yeah. I, I would agree that I think it's something that we have to work on, uh, together to, to, to help, especially people starting in the ecosystem, but also for, for the experienced ones that start looking at other use cases as well. >>Okay. Jasmine, we talked about this last time, you gotta pick a favorite, uh, child in the, in the, in the agenda. Uh, what's your favorite session? Um, and you gotta pick one or three or maybe put handful, um, as you guys look through this year, what's the theme. I mean, people like you can kind of sense what's happening. Uh, when you look at the agenda, obviously observability is in there, all these great stuff's in there, but what's the, what's your favorite, um, uh, project or topic this year that, uh, you're jazzed about >>For me, I I'd say there's such diverse, um, topics that are being presented both on the keynote stage and throughout, um, the various tracks. I will just reference, um, the talk that I, I sort of alluded to earlier about, um, leveraging developers to scale Kubernetes. Um, it's a talk given by red hat on the keynote stage. Um, I just think it, you know, the abstracts will me because it's talks about bridging two different roles together, um, and scaling what we all know to be so important within the cloud native space, security and Kubernetes. So it's something that's very like real for me, um, in, in my current role and previous roles. So I think that that's the one that spoke to me. >>Awesome. Ricardo, what's your favorite, uh, this year? What do you, what do you, uh, if you had to put a little gold star on something that you're interested in, what it would it be? >>I think I hinted on, on it just before, which is, uh, I'm, I'm kind of a space enthusiast. So all, all this idea of running Kubernetes in space, um, makes me very excited. So really looking forward to that one, but as an end user, I'm also very interested in talks. Uh, like the one Mercedes will be doing, which is the transition from a kind of a more traditional company to this, uh, uh, more modern world of, uh, cloud native. And I'm quite interested to hear how, how, what their experience has been has been like in the last few years. >>Well, you guys do a great job. I love chatting with you and I love, uh, CNCF and following from the beginning, we were there when it was, when it was created and watched it grow from an insider perspective, the hyperscalers people who are really kind of eating glass and building scale, you know, SREs. Now you have, you have the SRE concept going kind of global mainstream, seeing enterprises and end users contributing and participating enterprises, getting, connecting those two worlds. Jasmine, as you said, as you look at that, you're starting to see the scale piece become huge. You mentioned it a little bit earlier, Jasmine, the SRE role was specific to servers and cloud. You're kind of seeing that kind of role needed for this kind of cloud native layer. We're seeing it with data engineering. It's not for the faint of heart. It may not be a persona. That's got zillions of people, but it scales. It's like an SRE role. You're seeing that with this kind of monitoring and, and with containers and Kubernetes where it's gotta get easier and scale, how do you guys see that? Do you see that emerging in the community, this, this kind of new scale role and, um, what is it, what is this trend? Or maybe I'm misrepresenting it or maybe I'm sensing it wrong, but what do you guys think about the scale piece? How is that F falling into place? >>Yeah, I, I think that is, um, adoption, like, or there's more saturation of, of cloud native technologies within any environment. Um, most in most companies realize that you have to have that represented right within the role that is managing it. Um, if you wanna have it be reliable. Um, so I think that a lot of roles are adopting those behaviors, right. In order to be able to sustain this within their environment and learning as they start to implement these things. Um, so I see that to be something that just happens. Um, we saw it was like DevOps, right? You know, engineers were starting to adopt, you know, working on the systems versus just, you know, working on software. Um, so it's sort of like encompassing all the things, right. We're, we're seeing a shift in the role and, and the behaviors that are within it in order to maintain these cloud native services. So >>Ricardo, what's your take, we've been seeing engineers get to the front lines more and more. Uh, you guys mentioned business value as one of the tracks and, uh, focus topics this year, it's happening, engineers and developers. They're getting in the front lines cuz as you move up that stack, whether it's a headless system for retail or deploying something in another sector, they gotta be in the front lines. If you're gonna be in doing machine learning and have data, you gotta have domain scales about what the business is. Right? >>Yeah. I, I, I agree very much with what Jasmine said and, and uh, if we add this for, for kind of the business value and the, this opportu opportunistic usage of, uh, all types of resources that can come from basically anywhere these days, I think this is, this is really becoming, um, a real role to, to understand how, how to best, uh, use all of this and uh, to, to make the best of all this available resources. When we start talking about, uh, CPUs, it's already important. If we start talking about GPU's, which are more scar or some sort of specialized accelerators, then, then it becomes really like something that, uh, you, you need people that know where, where to go and fish for those. Cause they, they, you can just build your own data center and, and scale that anymore. So you really need to understand what's out there. >>Applications gotta have the security posture nailed down. They gotta have it. Automation built in. You gotta have the observability, you gotta have the business value. I mean, it sounds like a mature industry developing here finally. It's happening. Good job guys. Thanks for coming on the queue. Really appreciate it. >>Thank you. Thank you for having >>Us. And we'll see the cube here at Koon cloud native con May 16th through the 20th in Vale Spain, the cube will be there. We'll have some online coverage as well. Look for the virtual from CNCF. The cube will bring all the, all the action. I'm John fur, your host, see you in Spain and see you on the 16th.

>>no real filter and that kind of stuff. But you're also an entrepreneur, right? And you know the business, you've been in software, you detect business. I'm instructing you get a lot of pictures, this entertainment business on our show, we're a bubble. We don't do a lot of tech deals that were talking because it's boring tv tech people love tech consumers love the benefit of text. No consumer opens up their iphone and says, oh my gosh, I love the technology behind my, what's it been like being on the shark tank? You know, filming is fun and hang out just fun and it's fun to be a celebrity at first your head gets really big and you get a really good tables at restaurants and who says texas has got a little possessed more skin in the game today in charge of his destiny. Great robert Herjavec. No, these two stars cube alumni >>welcome back to the cubes coverage of A W. S. Public sector seven. I'm john for your host of the cube got a great segment here on healthcare startup accelerators of course. Sandy carter is co hosting media. This one Vice President Aws. She's awesome on the cuBA and jennifer Blumenthal co founder and C of one record entrepreneur, very successful. Thanks for coming on jennifer. Thank good to see you. Sandy thanks for joining me again. You >>are most welcome, >>jennifer. Before we get into the whole accelerated dynamic, just take a minute to explain what you guys do. One record. >>Sure. So one record is a digital health company that enables users to access aggregate and share their healthcare information. So what that means is we help you as a person get your data and then we also help companies who would like to have workflows were consumers in the loop to get their data. So whether they're sharing it with a provider, researcher payer. >>So, Sandy, we've talked about this amazon web services, healthcare accelerator cohort batches. What do you call cohort batches? Cohorts explain what's going on with the healthcare accelerator? >>Yeah. So, um, we decided that we would launch and partner an accelerator program and accelerator program just provides to a start up a little bit extra technical help. A little bit extra subject matter expertise and introductions to funders. And so we decided we were going to start one for health care. It's one of the biggest disruptive industries in public sector. Um, and so we weren't sure how it's gonna go. We partnered with Kids X. Kids X is part of the Los Angeles system for medical. And so we put out a call for startups and we had 427 startups, we were told on average and accelerating it's 50-100. So we were blown away 31 different countries. So it was really amazing. And then what we've been doing is down selecting and selecting that Top 10 for our first cohort. So we're going from 427 down to 10. And so obviously we looked at the founders themselves to see the quality of the leadership of the company, um the strength of their technology and the fit of the technology into the broader overall healthcare and healthcare ecosystem. And so we were thrilled that jennifer and one record was one of the top 10 start ups in this space that we chose to be in the, in the cohort. And so now we're going to take it to the six weeks intensive where we'll do training, helping them with AWS, provide them A W. S. Credits and then Kid X will also provide some of the health care uh subject matter >>expertise as well. Can I get some of those credits over here to maybe? >>Yes, you can actually, you can talk to me don you can't >>Talk to me, Jennifer, I gotta ask you. So you're an entrepreneur. So doing start doing cos it's like a roller coaster. So now to make the top 10 but also be in the area of his accelerator, it's a partnership, right? You're making a bet. What's your take on all this? >>Well, we've always been partners with a W. S. We started building on AWS in the very beginning. So when I was setting up the company a huge decision early on with infrastructure and when I saw the launch of the accelerator, I had to apply because we're at the point in the company that we're growing and part of growing is growing with the VW. So I was really excited to take advantage of that opportunity and now in the accelerator, it's more of thinking about things that we weren't thinking about the services that we can leverage to fill in the gaps within our platform so we can meet our customers where they are >>using award winning MSP cloud status city, your partners, great relationship with the ecosystem. So congratulations Sandi. What's the disruption for the healthcare? Because right now education and health care, the two top areas we're seeing and we're reporting on where cloud scale developed two point or whatever buzzword digital transformation you want to use is impacting heavily healthcare industry. There's some new realities. What's your, what's your vision, what's your view? >>Hey john before she does that, I have to give a plug to Claudius city because they just made premier partner as well, which is a huge deal. Uh and they're also serving public sector. So I just wanted to make sure that you knew that too. So you can congratulate. Go ahead, jennifer >>Well, so if I zoom in, I think about a P. I. S. Every day, that's what I think about and I think about microservices. So for me and for one record, what we think about is legislation. So 21st century Cures act says that you as a consumer have to be able to access your healthcare data from both your providers and from your players and not just your providers, but also the underlying technology vendors and H. I. E. S. H. I am and it's probably gonna extend to really anyone who plays within the healthcare ecosystem. So you're just going to see this explosion of A. P. I. S. And we're just your one of that. I mean for the payers that we went into effect on july 1st. So I mean when you think about the decentralization of healthcare where healthcare is being delivered plus an api economy, you're just going to have a whole new model developing and then throwing price transparency and you've got a whole new cake. >>I'm smiling because I love the peacocks. In fact, last night I shouldn't have tweeted this but there's a little tweet flames going on around A. P. Is being brittle and all this stuff and I said, hey developer experience about building great software apps are there for you. It's not a glue layer by itself. You got to build software around the so kind of a little preaching to the younger generation. But this health care thing is huge because think about like old school health care, it was anti ap I was also siloed. So what's your take on has the culture is changing health care because the user experience, I want my records, I want my privacy, I want to maintain everything confidential but access. That's hard. >>I think well health care to be used to just be paper was forget about a. P. I. Is it was just paper records. I think uh to me you think about uh patient journey, like a patient journey starts with booking an appointment and then everything after that is essentially an api call. So that's how I think about it is to all these micro transactions that are happening all the time and you want your data to go to your health care provider so they can give you the proper care, you want your data to go to your pair so they can pay for your care and then those two stakeholders want your data so that they can provide the right services at the right time to the right channel. And that is just a series of api calls that literally sits on a platform. >>What's interesting, I'd love to get your take on the where you think the progress bar is in the industry because Fintech has shown the way you got defy now behind a decentralized finance, health care seems to be moving on in a very accelerated rate towards that kind of concept of cloud, scale, decentralization, privacy. >>Yeah, I mean, that's a big question, what's interesting to me around that is how healthcare stakeholders are thinking about where they're providing care. So as they're buying up practices primary care specialty care and they're moving more and more outside of the brick and mortar of the health care system or partnering with your startups. That's really where I think you're going to see a larger ecosystem development, you could just look at CVS and walmart or the dollar store if they're going to be moving into health care, what does that look like? And then if you're seeking care in those settings, but then you're going to Mayo clinic or Kaiser permanente, there's so many new relationships that are part of your hair circle >>delivery is just what does that even mean now, delivery of health >>care. It's wherever you it's like the app economy you want to ride right now, you want a doctor right now, that's where we're heading its ease of use. >>This is this exciting startups, changing the game. Yes, I love it. I mean, this is what it's all about this health >>Care, this is what it's all about. And if you look at the funding right now from VCS, we're seeing so much funding pour into health care, we were just looking at some numbers and in the second quarter alone, the funding went up almost 700%. And the amount of funding that is pouring into companies like jennifer's company to really transform healthcare, 30% of it is going into telehealth. So when you talked about, you know, kind of ai at the edge, getting the right doctor the right expert at the right time, we're seeing that as a big trend in healthcare to >>well jennifer, I think the funding dynamics aside the opportunity for market total addressable market is massive when the application is being decomposed, you got front end, whether it's telemedicine, you got the different building blocks of healthcare being radically reconfigured. It's a re factoring of healthcare. Yeah, >>I think if you just think about where we're sitting today, you had to use an app to prove proof of vaccination. So this is not just national, this is a global thing to have that covid wallet. We at one record have a covid wallet. But just a couple years from now, I need more than just by covid vaccination. I need all my vaccinations. I need all my lab results. I need all my beds. It's opening the door for a new consumer behavior pattern, which is the first step to adoption for any technology. >>So somebody else covid wallet. So I need >>that was California. Did the, did a version of we just have a pen and it's pretty cool. Very handy. I should save it to my drive. But my phone, but I don't jennifer, what's the coolest thing you're working on right now because you're in the middle of all the action. >>I get very excited about the payer app is that we're working on. So I think by the end of the month we will be connected to almost to all the blues in the United States. So I'm very excited when a user comes into the one record and they're able to get their clinical data from the provider organization and then their clinical financial and formulary data from their payers because then you're getting a complete view, You're getting the records for someone who gave you care and you're getting the records from someone who paid for your care. And that's an interesting thing that's really moving towards a complete picture. So from a personal perspective that gets exciting. And then from a professional perspective, it's really working with our partners as they're using our API s to build out workflows and their applications. >>It's an api economy. I'd like to ask you to on the impact side to the patient. I hear a lot of people complaining that hey, I want to bring my records to the doctor and I want to have my own control of my own stuff. A lot of times, some doctors don't even know other historical data points about a patient that could open up a diagnosis and, or care >>or they can't even refer you to a doctor. Most doctors really only refer within a network of people that they know having a provider directory that allows doctors refer, having the data from different doctors outside of their, you know, I didn't really allows people to start thinking beyond just their little box. >>Cool. Well, great to have you on and congratulations on being in the top 10 saying this is a wonderful example of how the ecosystem where you got cloud city, your MSP. You mentioned the shout out to them jerry Miller and his team by working together the cloud gives you advantages. So I have to ask, we look at amazon cloud as an entrepreneur. It's kind of a loaded question, but I'm going to ask it. I love it. >>You always do it >>when you look at amazon, what do you see as opportunities as an entrepreneur? Because I'll see the easy ones. They have computing everything else. But like what's the, what does cloud do for you as an entrepreneur? What does it, what does it make you do? >>Yeah. So for been working with jerry since the beginning for me when I think about it, it's really the growth of our company. So when we start building, we really just thinking about it from a monolithic build and we move to microservices and amazon has been there every step of the way to support us as that. And now, you know, the things that I'm interested in are specifically health lake and anything that's NLP related that we could plug into our solution for when we get data from different sources that are coming in really unstructured formats and making it structured so that it's searchable for people and amazon does that for us with their services that we can add into the applications. >>Yeah, we announced that data health like and july it has a whole set of templates for analytics, focused on health care as well as hip hop compliance out of the box as well. >>The I think I think that's what's important is people used to think application first. Now it's creating essentially a data lake, then analytics and then what applications you build on top of that. And that's how our partners think about it and that's how we try and service them using amazon as our problem. So >>you're honing in on the value of the data and how that conflicts and then work within the whatever application requests might come >>in. Yes, >>it's interesting. You know, we had an event last month and jerry Chen from Greylock partners came on and gave a talk called castles in the cloud. He's gonna be cute before. He's a, he's a veces, they talk about moats and competitive manage so having a moat, The old school perimeter moz how cloud destroyed that. He's like, no, now the castles are in the cloud, he pointed snowflake basically data warehouse in the cloud red shifts there too. But they can be successful. And that's how the cloud, you could actually build value, sustainable value in the cloud. If you think that way of re factoring not just hosting a huge, huge, huge thing. >>I think the only thing he, this was customer service because health care is still very personal. So it's always about how you interact with the end user and how you can help me get to where they need to be going >>and what do you see that going? Because that's, that's a good point. >>I think that is a huge opportunity for any new company that wants to enter healthcare, customer service as a service in health care for all the different places that health care is going to be delivered. Maybe there's a company that I don't know about, but when they come out, I'd like to meet them. >>Yeah, I mean, I can't think of one cover that can think of right now. This is what I would say is great customer service for health care. >>And if there is one out there contacted me because I want to talk to you about AWS. >>Yeah. And you need the app from one record that make it all >>happen. That's where Omni channel customer service across all health care entities. Yeah, that's >>a great billion dollar idea for someone listening to our show right now. >>Right, alright. So saying they had to give you the opportunity to talk more because this is a great example of how the world's very agile. What's the next step for the AWS Healthcare accelerator? Are there more accelerators? Do you do it by vertical? >>What happens next? So, with the healthcare accelerator, this was our first go at the accelerator. So, this is our first set of cohorts, Of course, all 427 companies are going to get some help from a W. S. as well. We also you'll love this john We also did a space accelerator. Make sure you ask Clint about that. So we have startups that are synthesizing oxygen on mars to sending an outpost box to the moon. I mean, it's crazy what these startups are doing. Um, and then the third accelerator we started was around clean energy. So sustainability, we sold that one out to, we had folks from 66 different countries participate in that one. So these have been really successful for us. So it reinvent. When we talk again, we'll be announcing a couple of others. So right now we've got healthcare, space, clean energy and we'll be announcing a couple other accelerators moving forward. >>You know, it's interesting, jennifer the pandemic has changed even our ability to get stories. Just more stories out there now. So you're seeing kind of remote hybrid connections, ap ideas, whether it's software or remote interviews or remote connections. There's more stories being told out there with digital transformation. I mean there wasn't that many before pandemic has changed the landscape because let's face it, people were hiding some really bad projects behind metrics. But when you pull the pandemic back and you go, hey, everyone's kind of emperors got no clothes on. Those are bad projects. Those are good projects that cloud investment worked or I didn't have a cloud investment. They were pretty much screwed at that point. So this is now a new reality of like value, you can't show me value. >>It's crazy to me when I meet people who tell me like we want to move to the cloud of like, why are you not on the cloud? Like this really just blows my life. Like I don't understand why you have on prem or while you did start on the cloud, this is more for larger organizations, but younger organizations, you know, the first thing you have to do, it's set up that environment. >>Yeah. And then now with the migration plans and seeing here, uh whereas education or health care or other verticals, you've got, now you've got containers to give you that compatibility and then you've got kubernetes and you've got microservices, you've got land. Uh I mean, come on, that's the perfect storm innovation. There's no excuses in my opinion. So, you know, if you're out there and you're not leveraging it, then you're probably gonna be out of business. That's my philosophy. Thank you for coming up. Okay. Sandy, thank you. Thank you, john Okay. Any of his coverage here, summit here in D. C. I'm john ferrier. Thanks for watching. Mm >>mm mm mhm. I have been in the software and technology industry for over 12 years now, so I've had >>the opportunity

from the cube studios in palo alto in boston bringing you data-driven insights from the cube and etr this is breaking analysis with dave vellante as you well know by now the cloud is about shifting i.t labor to more strategic initiatives or as andy jassy laid out years ago removing the undifferentiated heavy lifting associated with deploying and managing i.t infrastructure cloud is also about changing the operating model and rapidly scaling a business operation or a company often overlooked with cloud however is the innovation piece of the puzzle a main source of that innovation is venture funded startup companies that have brilliant technologists who are mission driven and have a vision to solve really hard problems and enter a large market at scale to disrupt it hello everyone and welcome to this week's wikibon cube insights powered by etr in this breaking analysis we're pleased to welcome a special guest and author of the elite 80. a report that details the hottest privately held cyber security and i.t infrastructure companies in the world eric suppenger is that author and joins us today from jmp securities eric welcome to the cube thanks for being here thank you very much dave i'm uh i'm looking forward to uh to having a discussion here with you yeah me too this is going to be great so let's dive right into the elite 80. first if you could tell us about jmp securities and fill us in on the report its history your approach to picking the 80 companies out of thousands of choices sure so jmp is a middle markets investment bank we're a full full-service investment bank based in san francisco we were founded in 2000 and we focus on technology health care financial services and real estate i've been with jmp since 2011. um i've uh i've i cover uh cyber security companies public companies uh i cover uh it infrastructure companies uh more broadly and um we have having been based here in san francisco i've long kept uh a good dialogue with uh private companies uh that that compete with the public companies that i cover and so um about seven years ago i i started uh developing this uh this report which is really designed to highlight uh emerging uh private companies that uh that i think are are well positioned to be leaders in their respective markets and uh and over time we've um we've built the list up to about 80 companies and uh and we publish this report every year uh it's designed to uh to keep tabs on on the companies that are doing well and uh and we rotate about uh about 15 to 20 to 25 percent of the companies uh out of the report every year either as they get acquired or they do an ipo or um uh they uh they if we think that they are slowing and others are getting a little bit more uh more exciting and you talk directly to the companies that's part of your methodology as well you do a lot of background research digging into funding but you also talk to the executives at these companies correct yes for the most part we uh we try to talk to the ceos at least the cfos the object here is to build a a relationship with these companies so that we have some good insights into uh into how they're doing and and how the market trends are evolving as they relate to those companies in particular some of the some of the dynamics that go into us selecting companies is one we do have to talk to the management teams uh two we uh we we base our decisions on who we include on how the companies are performing on how their competitors are uh are are discussing those companies their performance uh how other industry contacts talk about those companies and then we we track their hiring and uh and and how they've uh you know other metrics that we can uh we can gauge them by got it okay so i dug into the report a little bit and tried to summarize a few key takeaways so let's take a look at those and if if you allow me just set up the points and then and ask you to add some color so the first two things that really you know jumped out i want to comment on are the perspectives of the technology companies and then of course the other side is the buyers so it seems that the pandemic really got startups to sharpen their focus i remember talking to a number of vcs early on in the shutdown and they were all over their portfolio companies to reset their icp their ideal customer profile and sharpen their uvp their unique value proposition and they wanted them to do that specifically in the context of the pandemic and the new reality and then on the buy side let's face it if you weren't a digital business you were out of business so picking up on those two thoughts eric what can you share with us in terms of the findings that you have well that's that's very uh consistent with what we had found uh basically um when the pandemic first when the lockdown came uh in march we reached out to quite a few companies and industry contacts at that time feedback was uh you know it was uh it was a period of great uncertainty and a lot of a lot of budgets were were tightened pretty quickly but it didn't take very long and a lot of these companies uh you know having been uh innovation engines and and emerging players what they found was that uh the broader market quickly adopted uh digital transformation in response to the pandemic basically that was how they they uh facilitated uh keeping their their doors open so to speak and so um the ones that were able to uh to leverage uh need for emerging technologies because of an acceleration in digital transformation uh they they really stepped up and and quite a few of these companies they kept hiring they kept uh their sales uh did very well and uh and ultimately um a lot of the vcs that had been uh putting on the brakes uh they actually stepped up and uh and and continued funding uh pretty generously yeah we've got some data on that that we wanna look into so thank you for that now let's take a look at some of the the specific date of the study just break that down the elite 80 raised more than three billion dollars last year eclipsing the previous highs in your studies of 2019 and then a big portion of that capital went to pretty small number only 10 of the 80 firms and and most of that went to cyber security plays so what do you make of these numbers especially you know given your history with with this group of elite companies and the high concentration this year this past year so one of the trends that we've seen in the public in the public market or the ipo market is um companies are are waiting until they're a little bit more mature than they used to be so what we've seen is um the the funding for companies uh the the larger rounds are far larger than they used to be these companies typically are waiting until they're of size you know maybe now they're waiting to be uh 200 million uh in annual salary in annual revenues versus a 100 million before and so they are consuming quite a bit the larger rounds are are much bigger than they used to be um in the in the most recent uh report that we published we had uh one round that was over half a billion and another one that was over 400 million and if you go back just a couple of few years ago a large round was over 100 million and you didn't get too many that were over 200 million so that's that's been a distinct change and and i think that's not necessarily just a function of the pandemic but i think the pandemic caused caused some companies to kind of step up the size of their rounds uh and so there were a handful of uh very large rounds uh certainly bigger than what we've ever seen before yeah those are great observations i mean you're right it was 100 million used to be the magic number to go public and now you get so much late money coming in locking in maybe smaller gains but giving that company you know a little more time to get their act together pre-ipo let's take a look at where the money went you know talk about follow the money and eric you and your team you segmented that three billion dollars into a number of different categories as i said most of it go into cyber security uh categories like application security is assessment and risk there's endpoint endpoint boomed during the pandemic same with identity and this chart really shows those categories that you created to better understand these dynamics and sort of figure out where the money went how did you come up with these these categories and what does this data tell you so these categories were basically uh homegrown these are how i um i think of these companies um it's a little bit of uh pulling some information out of uh the likes of gartner but uh for the most part this was how i how i conceptualize the landscape uh in my mind um the interesting thing to me is you know so a lot of that data is skewed by a few large transactions so um you know if you if you think about the the the allocation of those uh those different categories and and the uh investments in those categories it's it's skewed by large transactions and what was most interesting to me was one the application security space is a space that had quite a few additional smaller rounds and i think that's one that's pretty interesting going forward and then the one that was a surprise to me more than that was the data management um outside of cyber security uh data management's a space that's getting uh a lot more attention and uh and it's getting um uh some pretty good uh growth so that's a space that we're uh we're paying some good good attention to as well yeah that's interesting i mean of course data management means a lot of different things to a lot of different people and vc's throwing money at it maybe trying to define it and then and then the the the ai ops and and the that data management piece you know took a took a portion of it but wow the the cyber guys really are are killing it and now as we mentioned ten companies sucked up the lion's share of of the funding and this next chart shows that concentration of those 10 investments so eric some big numbers here one trust secured more than a half a billion dollars four others nabbed more than a quarter billion in funding give us your thoughts on this what do you make of that high concentration well um i i think this is a function of companies that are waiting uh longer than they used to um they're these these companies are getting to be of considerable scale i mean titanium would be a good example that's a company that could have gone public years ago and uh and i don't think they're particularly eager to get out the door uh they provide liquidity to their previous investors by raising money and uh and and buying those shares back um and so they uh they basically uh just continue to uh to grow uh without the uh the burden or or the um uh the demands that being a public company create um so there's this that's that's really a function of of companies just waiting longer before they get out the door got it now here's another view of that that data the so the left side of this chart uh that we we want to show you next um gives you a sense of the size of the companies the revenue in the elite 80 and you know most of these companies have broken through the 100 million dollar revenue mark as you say uh and they're they're still private and so you can see the breakdown and then the right-hand side of the chart shows the most active investors we just pulled out those with three or more transactions and it's it's interesting to see the players there and of course you've got some strategics you got city in there you've got cisco along with a little bit of p and e private equity action maybe your thoughts on on on this data so so to give you a little flavor around the uh the size of these companies when we first started publishing this report a little bit of the goal was to try to keep those categories relatively equal and as you can see they've skewed uh far to the left uh towards the uh to the larger revenue stream you know size so that's that just goes to the point that um uh the the companies that uh you know that are getting that a lot of these private companies uh they're they're of saw considerable size before they uh they really go out the door and and i think that's a reflection of um of the caliber of uh of or the quality of investments that uh that are out there today these are companies that have built very mature businesses and they're not going into the market until um until they can demonstrate uh high confidence and uh and consistency in their performance yeah i mean you i remember when when cloudera took that massive i think it was the 750 billion a million dollar investment from uh from intel you know way back when they that bridged them to ipo and that was sort of if i recall started that that trend and then now you get a ipo last year like snowflake which is price to perfection and you got guys that really know how to do this they've done it a number of times and so it really is somewhat changed that that dynamic uh for ipos which of course came booming back it was so quiet there for so many years but let's look into these markets a bit um i want to talk about the security space and the i.t infrastructure space and here's a chart from optiv which is one of the elite 80 ironically and we've shared this with with our audience before and the point of this is that the cyber security spaces it's highly fragmented we've reported on this a lot it's got hundreds and hundreds of companies in there it's just mosaic of solutions so very complicated and bespoke sets of tooling and combine that with a lack of skilled expertise you know csos tell us the lack of talent is their biggest challenge makes it a really dynamic market and eric this is part of the reason why vcs they want in so the takeaway i get from that chart is we have a lot of um we still have a great need for best of breed um digital transformation uh cloud mobile all these trends are creating such a disruption that there's still a great opportunity for somebody that can deliver a uh you know a real best of the best of breed uh solution uh in spite of uh all the challenges that uh id it departments are having with trying to uh to meet you know security requirements and things like that uh the the world has embraced uh you know digital delivery and uh you are your success is oftentimes dependent on your your digital differentiation and if that's the case then there's always going to be opportunity for a better technology out there so that's that in the end is uh is why uh optiv has a uh a line card that's uh as as long as you can read it i'm glad you brought the point about best of breeze it's an age-old debate in the industry it's do we go best of breed or do we go you know integrated suites you know you look at a company like microsoft obviously that that works very well for them uh companies like cisco but so this next uh set of data we're gonna bring in some etr customer spending data and see where the momentum is and i think it'll really underscore the points that you're making there in terms of best of breed this chart shares a popular view that we like to to share with our community on the vertical axis is net score or that's spending velocity and the horizontal axis shows market share or pervasiveness in the data as we've said before anything above 40 percent that red line on the vertical axis is considered elevated and you can see a lot of companies in cyber security are above that mark now a couple points i want to make here before we bring eric back in first is the market it's fragmented but it's pretty large at over 100 billion dollars depending on which research firm you look at it's growing at you know the low double digits so so nice growth is putting on 10 billion dollars a year into that number and there are some big pure plays like palo alto networks and fortinet but the market includes some other large whales like cisco uh they've built up a sizeable security business microsoft microsoft's in most markets and serves its you know software customers so but you can see how crowded this market is now we've superimposed in the red recent valuations for some of the companies and and the other point we want to make is there's some big numbers here and some divergence between us eric was saying the the best of breed and the integrated suites and the pandemic as we've talked about a lot is fueled a shift in cyber strategies toward endpoint identity and cloud and you can see that in crowdstrike's 50 billion plus valuation octa another best of breed 34 billion dollars in identity they just bought off zero and paid four and a half billion dollars for auth0 to get access to the developer community z scaler at 28 billion proof point is going private at a 12 billion dollar number so you can see why vcs are pouring money into this market some really attractive valuations eric what are your thoughts on this data so my interpretation is that's that's just further validation that uh that these security markets are uh are getting disrupted and uh and the truth of the matter is there's only one um really well positioned uh platform player in there uh uh palo alto the rest of them are are platforms within their respective uh security technology space but uh you know there's there's not very many um you know broad security solution providers today and the reason for that is because we've got such a uh transformation going on uh across uh technology that the need for best of breed is uh is is getting recognized uh day in day out yeah you're right palo alto they're they csos love to work with palo alto they're kind of the high-end gold standard but and we reported last year on the divergence in valuations between fortinet and palo alto networks fortinet was doing a better job you know pivoting to the cloud we said palo alto will get its act together it did but then you see these pure play best of breeds really you know doing well so now let's take a look at the it infrastructure space and it's it's quite different in terms of the dynamics of the market so here's that same view of the etr data and we've cut it by uh three categories we cut on networking servers and storage and this is a very large market it's it's it's over 200 billion dollars but it's much more of an oligopoly in that you've got great concentration at the top you've got some really big companies like cisco and dell which is spinning out vmware so we're going to unlock you know more value of the core dell company dell's valuation is 79 billion and that includes its 80 ownership in vmware so you do the math and figure out what core dell is worth hpe is much smaller it's notable that its valuation is comparable to netapp netapp's around you know one-fifth the size of revenue-wise uh hpe now eric arista they stand out as the lone player that's having some success clearly against cisco what are your thoughts on on the infrastructure space so so a couple things i'll take away from that now first off uh you mentioned arista arista is a bit of an anomaly um a switching company you know a networking company that is in that upper echelon like you've pointed out above 40 percent it is it is unique and and basically they kind of cracked the code they figured out how to beat cisco at cisco's core competency which is traditionally switching switching and routing and they they did that by delivering a very differentiated uh uh hardware product um that that they were able to tap into some markets that uh that even cisco hasn't been able to open up and and those would be the hyperscale uh hyperscale you know hosting vendors like uh google and facebook and microsoft but i would i would put i would put arista kind of in a in a unique situation the other thing that i'll just point out that i think is an interesting takeaway from the um from the the the slide that you showed is there are some uh infrastructure or what i would consider is bordering on data management type companies i mean you look at uh rubric you look at cohesity and nutanix veeam they're they're all kind of bubbling up there and pure storage and i think that comes back to what i was mentioning earlier where there is some pretty interesting innovation going on in data management which has traditionally not had a lot of innovation so i would bet you those names would have bubbled up just in the last uh year or two where that's been a market that hasn't had a lot of innovation and and now there's some interesting things coming down the pipe you know that's interesting comments that you make in there because if you think back to sort of last decade arista obviously broke out the only two other companies in the in the core infrastructure space and this was a hardware game historically but it's obviously becoming a software game but take a look at pure storage and nutanix you can see their valuations at five billion and seven point four billion dollars respectively uh and then to your point cohesity you got them at 3.7 billion just did a recent you know round rubric 3.3 billion that's from 2019 and so you know presumably that's a higher valuation now veeam got taken out last january at five billion by uh inside capital uh and so i think they're doing very well and they're probably uh up from that and susa is going public at uh at a reported seven billion dollar valuation so quite a bit different dynamic in the infrastructure space so eric i want to bring it back to the elite 80 in in in in startups in general my first question to you is is what do you look for from successful startups to make this elite 80 list so a few factors first off uh their performance is uh is is one of the primary uh situations if it's a company that's not growing we'll we'll probably pull it from the list um i would say it is also very much a function of my perception of the quality of management uh we we do meet with all these management teams um if we feel like uh they're they're they're putting together a uh you know a um a leadership team that's gonna be around for a long time and they've got a product position that's uh pretty attractive uh those would certainly be two key aspects of what i look for beyond that uh certainly feedback that we get from competitors uh feedback that we get from industry contacts like resellers and then then i'd also just say my enthusiasm for their respective market that they're in if it's a a market that i think is is going to be difficult or flat or not very interesting then then that would certainly be a a reason to to not include them uh conversely even if it's a small company if it's if it's a sector that i think is going to be uh around for quite a while and it's very differentiated uh then we'll include um a lot of the smaller companies too well a good example that's like a weka i mean i don't want to i don't want to go into these companies but two because we believe we 80 companies are going to leave somebody else but that that's a good example of a smaller company that looks to be disruptive um how should enterprise customers the buyers do you think evaluate and filter startups you have any sense of that well um a couple things that i struggle with that that would be uh you know something that's a lot more readily available to them is uh is just the quality of the product i mean that's obviously uh why why they're looking at it but uh if it's a uh if it's a company that's got a a unique product that uh is is built uh you know that that can that can that works that would be the starting point then then beyond that it's also is it a management team is is the behavior of the company something that uh reflects a management team that's uh that's that's you know a high quality management team if they if they you know are responsive if they're following up if they're not trying to pull in business uh quickly if they're priced appropriately uh metrics like that would certainly be um key aspects that would be readily available to uh to the you know to the the buyers of technology beyond that um you know i think the viability of that market is going to be uh a key aspect as to whether or not that company is going to be around even if it's a good company if uh if it's a highly competitive uh market that's going to have some big big players that can kind of integrate it and to make it a feature across other other product lines then that's going to make it a a tough a tough road to to go for a start-up these days you know the other thing i wanted to to talk about was the risks and the rewards of working with with startup companies and i've had i've had cios and and enterprise architects tell me that they'll when when they have to do an rfp they'll pull out the gartner magic quadrant they'll always you know pick a couple in the top right just to cover their butts but they many say you know what we also pick some of those those in the challenger space because because that are that are really interesting to us and and we run them through the paces and we manage those risks we don't we don't run the company on them but it helps us find these diamonds in the rough i mean think about you know in the in this in the second part of last decade if you picked a snowflake you might have been able to get ahead of some of your competition things like data sharing or or maybe you found that that well you know what octa is going to help me with my identity in in a new way and you're going to be better prepared to be a digital business but do you have any thoughts on how uh people should manage those risks and and how they should think about the upside i don't i don't think today um a a you know a company can work today using legacy technologies i i think the risk the greater risk is falling behind from a a digital transformation perspective this this era i think the pandemic is probably the best proof point of this um you can't you can't go with just a uh a traditional legacy architecture in a in in a key aspect of your business and so the startups um i i think you've got to take the quote-unquote risk of working with a startup that's uh you know that's got a viability concern or sustainability concern uh the risk of of having a um uh an i.t infrastructure that's inadequate is uh is a far greater risk from my perspective so i think that the startups right now are are are in a very strong position and they're well funded that's the last question i wanted to talk about is how will startups kind of penetrate the enterprise in this modern era i mean you know this is really a software world and software is this sort of capital efficient business but yet you're seeing companies raise hundreds of millions of dollars i mean that's not even absurd these days you see companies go to ipo that have raised over a billion dollars and much of that if not most of it goes to promotion and go to market uh so so how maybe you could give us your perspectives on how you see startups getting into the enterprise in these sectors so i one of the really interesting things that we've seen in the last couple years is a lot of changes to sales models and and if you look at the mid market the ability to leverage viral sales models uh has been wildly successful for some companies um it's been um you know a great strategy uh there's a public company ubiquity that did a uh has built a multi-billion dollar uh you know business on on without without a sales organization so there's some pretty interesting um directions that i think sales and go to market is going to uh incur over the over the coming years uh traditional enterprise sales i think are still uh pretty standard today but i i think that the efficiency of um of you know social networking and and uh and and what would the the delivery of uh of products on on a digital for in a digital format is going to change the way that we do sales so i think i think there's a lot of efficiencies that are going to come in uh in sales over the coming years that's interesting because then you'll you know i i think you're right and and and instead of just just pouring money at promotion maybe get more efficient there and pour money in into engineering because that really is the long-term sustainable value that these companies are going to create right yeah i i would absolutely agree with that and um again if you look at the you know if you look at the charts of the well-established players that that you had mentioned those companies are where they are that the ones at the top are where they are because of their technology i mean it's it's not because of uh their go to market it's it's it's because they have something that other people can't uh can't replicate right well eric hey it's been great having you on today thanks so much for joining us really appreciate your time well dave i greatly appreciate it uh it's been a lot of fun so uh so thank you all right hey go get the elite 80 report all you got to do is search jmp elite 80 and it'll it'll come up there's a there's a lot of data out there so it's really a worthwhile reference tool and uh so thank you everybody for watching remember these episodes are all available as podcasts wherever you listen you can check out etr's website at etr dot plus and we also publish weekly a full report on wikibon.com and siliconangle.com you can email me david.velante at siliconangle.com or dm me on twitter at divalante hit up hit our linkedin post and really appreciate those comments this is dave vellante for the cube insights powered by etr have a great week everybody stay safe and we'll see you next time you

>>Mhm. Yes. Hello. Welcome back to the cubes coverage of dr khan 2021 virtual. I'm john for your host of the cube. We're messing my fair principal technologist at AWS amazon Web services messman. Thank you for coming on the cube, appreciate it. Um >>Thank you. Thank you for having me. >>Great to see you love this amazon integration with doctor want to get into that in a second. Um Been great to see the amazon cloud native integration working well. E. C. S very popular. Every interview I've done at reinvent uh every year it gets better and better more adoption every year. Um Tell us what's going on with amazon E. C. S because you have Pcs anywhere and now that's being available. >>Yeah that's fine, that's correct, join and uh yeah so customers has been appreciating the value and the simplicity of VCS for many years now. I mean we we launched GCS back in 2014 and we have seen great adoption of the product and customers has always been appreciating. Uh the fact that it was easy to operate and easy to use. Uh This is a journey with the CS anywhere that started a few years ago actually. And we started this journey uh listening to customers that had particular requirements. Um I'd like to talk about, you know, the the law of the land and the law um uh of the physic where customers wanted to go all in into uh into the cloud, but they did have this exception that they need to uh deal with with the application that could not move to the cloud. So as I said, this journey started three years ago when we launched outpost. Um and outpost is our managed infrastructure that customers can deploy in their own data centers. And we supported Pcs on day one on outpost. Um having that said, there are lots of customers that came to us and said we love outputs but there are certain applications and certain requirements, uh such as compliance or the fact simply that we have like assets that we need to reuse in our data center uh that we want to use and before we move into into the cloud. So they were asking us, we love the simplicity of Vcs but we have to use gears that we have in our data center. That is when we started thinking about Pcs anywhere. So basically the idea of VCS anywhere is that you can use e c s E C as part of that, you know, and love um uh appreciated the simplicity of using Pcs but using your customer managed infrastructure as the data plane, basically what you could do is you can define your application within the Ec. S country plane and deploy those applications on customer own um infrastructure. What that means from a very practical perspective is that you can deploy this application on your managed infrastructure ranging from uh raspberry pis this is the demo that we show the invent when we pronounce um e c s anywhere all the way up to bare metal server, we don't really care about the infrastructure underneath. As long as it supported, the OS is supported. Um we're fine with that. >>Okay, so let's take this to the next level and actually the big theme at dr Connors developer experience, you know, that's kind of want to talk about that and obviously developer productivity and innovation have to go hand in hand. You don't want to stunt the innovation equation, which is cloud, native and scale. Right. So how does the developer experience improve with amazon ECs and anywhere now that I'm on, on premises or in the cloud? Can you take me through? What's the improvements around pcs and the developer? >>Yeah I would argue that the the what you see as anywhere solved is more for operational aspect and the requirements that more that are more akin to the operation team that that they need to meet. Uh We're working very hard to um to improve the developing experience on top of the CS beyond what we're doing with the CS anywhere. So um I'd like to step back a little bit and maybe tell a little bit of a story of why we're working on those things. So um the customer as I said before, continue to appreciate the simplicity and the easier views of E. C. S. However what we learn um over the years is that as we added more features to E. C. S, we ended up uh leveraging more easy. Um AWS services um example uh would be a load balancer integration or secret manager or Fc. Or um other things like service discovery that uses underneath other AWS products like um clubman for around 53. And what happened is that the end user experience, the developer experience became a little bit more complicated because now customers opportunity easy of use of these fully managed services. However they were responsible for time and watering all uh together in the application definition. So what we're working on to simplify this experience is we're working on tools that kind of abstract these um this verbal city that you get with pcs. Um uh An example is a confirmation template that a developer we need to use uh to deploy an application leveraging all of these features. Could then could end up being uh many hundreds of transformation lines um in the in the in the definition of the service. So we're working on new tools and new capabilities to make this experience better. Uh Some of them are C d k uh the copilot cli, dws, copilot cli those are all instruments and technologies and tools that we're building to abstract that um uh verbosity that I was alluding to and this is where actually also the doctor composed integration with the CS falls in. >>Yeah, I'm just gonna ask you that the doctor piece because actually it's dr khan all the developers love containers, they love what they do. Um This is a native, you know, mindset of shifting left with security. How is the relationship with the Docker container ecosystem going with you guys? Can you take him in to explain for the folks here watching this event and participating in the community, explain the relationship with Docker container specifically. >>Yeah, absolutely. Uh so basically we started working with dR many, many years ago, um uh Pcs was based on on DR technology when we launch it. Uh and it's still using uh DR technology and last year we started to collaborate with dR more closely um when DR releases the doctor composed specification um as an open source projects. So basically doctor is trying to use the doctor composed specification to create uh infrastructure product gnostic, uh way to deploy Docker application um uh using those specification in multiple infrastructure as part of these journey, we work with dr to support pcs as a back end um for um for the specification, basically what this means from a very practical perspective, is that you can take a doctor composed an existing doctor composed file. Um and doctor says that there are 650,000 doctor composed files spread across the top and all um uh lose control uh system um over the world. And basically you can take those doctor composed file and uh composed up and deploy transparently um into E. C. S Target on AWS. So basically if we go back to what I was alluding to before, the fact that the developer would need to author many 100 line of confirmation template to be able to take their application and deploy it into the cloud. What they need to do now is um offering a new file, a um a file uh with a very clear and easy to use dr composed syntax composed up and deploy automatically on AWS. Um and using Pcs Fargate um and many other AWS services in the back end. >>And what's the expectation in your mind as you guys look at the container service to anywhere model the on premise and without post, what does he what's the vision? Because that's again, another question mark for me, it's like, okay, I get it totally makes sense. Um, but containers are showing the mainstream enterprises, not the hyper skills. You guys always been kind of the forward thinkers, but you know, main street enterprise, I call it. They're picking up adoption of containers in a massive way. They're looking at cloud native specifically as the place for modern application development period. That's happening. What's the story? Say it again? Because I want to make sure I get this right e C s anywhere if I want to get on premises hybrid, What's it mean for me? >>Uh, this goes back to what I was saying at the beginning. So there are there are there when we have been discussing here are mostly to or token of things. Right. So the fact that we enable these big enterprises to meet their requirements and meet their um their um checkboxes sometimes to be able to deploy outside of AWS when there is a need to do that. This could be for edge use cases or for um using years that exist in the data center. So this is where e c s anywhere is basically trying, this is what uh pcs anywhere is trying to address. There is another orthogonal discussion which is developer experience, uh and that development experience is being addressed by these additional tools. Um what I like to say is that uh the confirmation is becoming a little bit like assembler in a sense, right? It's becoming very low level, super powerful, but very low level and we want to abstract and bring the experience to the next level and make it simple for developers to leverage the simplicity of some of these tools including Docker compose um and and and being able to deploy into the cloud um and getting all the benefits of the cloud scalability, electricity and security. >>I love the assembler analogy because you think about it. A lot of the innovation has been kind of like low level foundational and if you start to see all the open source activity and the customers, the tooling does matter. And I think that's where the ease of use comes in. So the simplicity totally makes sense. Um can you give an example of some simplicity piece? Because I think, you know, you guys, you know, look at looking at ec. S as the cornerstone for simplicity. I get that. Can you give an example to walk us through a day in the life of of an example >>uh in an example of simplicity? Yeah, supposedly in action. Yeah. Well, one of the examples that I usually do and there is this uh, notion of being served less and I think that there is a little bit of a, of an obsession around surveillance and trying to talk about surveillance for so many things. When I talk about the C. S, I like to use another moniker that is version less. So to me, simplicity also means that I do not have to um update my service. Right? So the way E C. S works is that engineering in the service team keeps producing and keeps delivering new features for PCS overnight for customers to wake up in the morning and consuming those features without having to deal with upgrades and updates. I think that this is a very key, um, very key example of simplicity when it comes to e C s that is very hard to find um in other, um, solutions whether there are on prime or in the cloud. >>That's a great example in one of the big complaints I hear just anecdotally around the industry is, you know, the speed of the minds of business, want the apps to move faster and the iteration with some craft obviously with security and making sure things buttoned up, but things get pulled back. It's almost slowed down because the speed of the innovation is happening faster than the compliance of some sort of old governance model or code reviews. I want to approve everything. So there's a balance between making sure what's approved, whether security or some pipeline procedures and what not. >>So that I could have. I cannot agree more with you. Yeah, no, it's absolutely true because I think that we see these very interesting um, uh, economy, I would say between startups moving super fast and enterprises try to move fast but forced to move at their own speed. So when we when we deliver services based on, for example, open source software uh, that customers need to um, look after in terms of upgrade to latest release. What we usually see is start up asking us can you move faster? There is a new version of that software, can you enable us to deploy that version? And then on the other hand of the spectrum, there are these big enterprises trying to move faster but not so much that are asking us can use lower. Can you slow down a little bit? Right, because I cannot keep that pigs. So it's a very it's a very interesting um, um, a very interesting time to be alive. >>You know, one of the, one of the things that pop up into these conversations when you talk, when I talk to VP of engineering of companies and then enterprises that the operational efficiency, you got developer productivity and you've got innovation right, you've got the three kind of things going on there knobs and they all have to turn up. People want more efficiency of the operations, they want more developed productivity and more innovation. What's interesting is you start seeing, okay, it's not that easy. There's also a team formation and I know Andy Jassy kinda referred to this in his keynote at Reinvent last year around thinking differently around your organizational but you know, that could be applied to technologists too. So I'd love to get your thoughts while you're here. I know you blog about this and you tweet about this but this is kind of like okay if these things are all going to be knobs, we turned up innovation efficiency, operationally and develop productivity. What's the makeup of the team? Because some are saying, you have an SRE embedded, you've got the platform engineering, you've got version lists, you got survival is all these things are going on all goodness. But does that mean that the teams have to change? What's your thoughts on that you want to get your perspective? >>Yeah, no, absolutely. I think that there was a joke going around that um as soon as you see a job like VP of devoPS, I mean that is not going to work, right? Because these things are needs to be like embedded into each team, right? There shouldn't be a DEVOPS team or anything, it would be just a way of working. And I totally agree with you that these knobs needs to go insane, right? And you cannot just push too hard on innovation which are not having um other folks um to uh to be able to, you know, keep that pace um with you. And we're trying to health customers with multiple uh tools and services to try to um have not only developers and making developer experience uh better but also helping people that are building these underneath platforms. Like for example, prod on AWS protein is a good example of this, where we're focusing on helping these um teams that are trying to build platforms because they are not looking themselves as being a giant or very fast. But they're they're they're measured on being secure, being compliant and being, you know, within a guardrail uh that an enterprise um regulated enterprise needs to have. So we need to have all of these people um both organizationally as well as with providing tools and technologies that have them in their specific areas um to succeed. >>Yeah. And what's interesting about all this is that you know I think we're also having conversations and and again you're starting to see things more clearly here at dr khan we saw some things that coop con which the joke there was not joke but the observation was it's less about kubernetes which is now becoming boring, lee reliable to more about cloud native applications under the covers with program ability. So as all this is going on there truly is a flip of the script. You can actually re engineer and re factor everything, not just re platform your applications in I. T. At once. Right now there's a window whether it's security or whatever. Now that the containers and and the doctor ecosystem and the container ecosystem and the The kubernetes, you've got KS and you got six far gay and all the stuff of goodness. Companies can actually do this right now. They can actually change everything. This is a unique time. This window might close are certainly changed if you're not on it now, it's the same argument of the folks who got caught in the pandemic and weren't in the cloud got flat footed. So you're seeing that example of if you weren't in the cloud up during the pandemic before the pandemic, you were probably losing during the pandemic, the ones that one where the already guys are in the cloud. Now the same thing is true with cloud native. You're not getting into it now, you're probably gonna be on the wrong side of history. What's your reaction to that? >>Yeah, No, I I I agree totally. I I like to think about this. I usually uh talk about this if I can stay back step back a little bit and I think that in this industry and I have gray areas and I have seen lots of things, I think that there has been too big Democratisation event in 90 that happened and occurred in the last 30 years. So the first one was from, you know from when um the PC technology has been introduced, distributed computing from the mainframe area and that was the first Democratisation step. Right? So everyone had access to um uh computers so they could do things if you if you fast forward to these days. Um uh what happened is that on top of that computer, whatever that became a server or whatever, there is a state a very complex stack of technologies uh that allow you to deployment and develop and deploy your application. Right. But that stack of technology and the complexity of that stack of technology is daunting in some way. Right? So it is in a bit access and democratic access to technology. So to me this is what cloud enabled, Right? So the next step of democratisation was the introduction of services that allow you to bypass that stack, which we call undifferentiated heavy lifting because you know, um you don't get paid for managing, I don't know any M. R. Server or whatever, you get paid for extracting values through application logic from that big stack. So I totally agree with you that we're in a unique position to enable everyone um with what we're building uh to innovate a lot faster and in a more secure way. >>Yeah. And what comes out, I totally agree. And I think that's a great historical view and I think let's bring this down to the present today and then bring this as the as the bridge to the future. If you're a developer you could. And by the way, no matter whether you're programming infrastructure or just writing software or even just calling a PS and rolling your own, composing your services, it's programmable and it's just all accessible. So I think that that's going to change the again back to the three knobs, developer productivity or just people productivity, operational efficiency, which is scale and then innovation, which is the business logic where I think machine learning starts to come in, right? So if you can get the container thing going, you start tapping into that control plane. It's not so much just the data control plane. It's like a software control plane. >>Yeah, no, absolutely. The fact that you can, I mean as I said, I have great hair. So I've seen a lot of things and back in the days, I mean the, I mean the whole notion of being able to call an api and get 10 servers for example or today, 10 containers. It would be like, you know, almost a joke, right? So we spent a lot of time racking and um, and doing so much manual stuff that was so ever prone because we usually talk about velocity and agility, but we, we rarely talk about, you know, the difficulties and the problems that doing things manually introduced in the process, the way that you can get wrong. >>You know, you know, it reminds me of this industry and I was like finally get off my lawn in the old days. I walk to school with no shoes on in the snow. We had to build our own colonel and our own graphics libraries and then now they have all these tools. It's like, you're just an old, you know, coder, but joking aside, you know that experience, you're bringing up appointments for the younger generation who have never loaded a Linux operating system before or had done anything like that level. It's not so much old versus young, it's more of a systems thinking, he said distributed computing. If you look at all the action, it's essentially distributed computing with new software paradigm and it's a system architecture. It's not so much software engineering, software developer, you know, this that it's just basically all engineering at this point, all software. >>It is, it is very much indeed. It's uh, it's whole software, there is no other um, there is no other way to call it. It's um, I mean we go back to talk about, you know, infrastructure as code and everything is now uh corridor software in in in a way. It's, yeah. >>This is great to have you on. Congratulations. A CS anywhere being available. It's great stuff. Um, and great to see you and, and great to have this conversation. Um, amazon web services obviously, uh, the world has has gone super cloud. Uh, now you have distributed computing with edge iot exploding beautifully, which means a lot of new opportunities. So thanks for coming on. >>Thank you very much for having me. It was a pleasure. Okay, cube >>Coverage of Dr Khan 2021 virtual. This is the Cube. I'm John for your host. Thanks for watching.

>>from around the >>globe. It's the >>cube with coverage of Kublai >>Khan and Cloud Native Con Europe 2021 >>virtual brought to >>you by red hat, the cloud native computing foundation and ecosystem partners. Hello, welcome back to the cubes coverage of coupon 21 Cloud Native Con 21 Virtual, I'm John Ferrier Host of the Cube. We're here with a great gas to break down one of the hottest trends going on in the industry and certainly around cloud native as this new modern architecture is evolving so fast. Richard Hartman, director of community at Griffon, a lab's involved with Prometheus as well um, expert and fun to have on and also is going to share a lot here. Richard, thanks for coming. I appreciate it. >>Thank you >>know, we were chatting before we came on camera about the human's ability to to handle all this new shift uh and the and the future of observe ability is what everyone has been talking about. But you know, some say the reserve abilities, just network management was just different, you know, scale Okay, I can buy that, but it's got a lot more than that. It involves data involves a new architecture, new levels of scale that cloud native has brought to the table that everyone is agreeing on. It scales their new capabilities, thus setting up new architectures, new expectations and new experiences are all happening. Take us through the future of observe ability. >>Mhm. Yes, so um 11 of the things which many people find when they onboard themselves onto the cloud native space is um you can scale along different and new axis, which you couldn't scale along before, uh which is great. Of course, it enables growth, it enables different operating models, it enables you to choose different or more modern engineering trade offs, like the underlying problems are still the same, but you just slice and dice your problems and compartmentalize your services differently. But the problem is um it becomes more spread out and the more classic tooling tends to be built for those more classic um setups and architectures as your architecture becomes more malleable and as you can can choose and pick how to grow it along with which access a lot more directly and you have to um that limits the ability of the humans actually operating that system to understand what is truly going on. Um Obviously everyone is is fully fully all in on A. I. M. L. And all those things. But one of the dirty secrets is you will keep needing domain specific experts who know what they're doing and what that thing should look like, what should be working hard to be working. But enable those people to actually to actually understand the current state of the system and compare this to the desired state of the system. Is highly nontrivial in particular, once you have not machine lifetimes of month or years which he had before, which came down to two sometimes hours and when you go to Microsoft to surveillance and such sometimes even into sub seconds. So a lot of this is about enabling this, this this higher volume of data, this higher scale of data, this higher cardinality of what what you actually attach as metadata on your data and then still be able to carry all this and makes sense of it at scale and at speed because if you just toss it into a data lake and do better analysis like half a day later no one cares about it anymore. It needs to be life it needs or at least the largest part of it needs to be life. You need to be able to alert right now if something is imminently customer facing. >>Well, that's awesome. I love totally agree this new observe ability horizontally scalable, more surface area, more axes, as you point out, changes the data equation on the automation plays a big role in mention machine learning and ai great, great grounds for that. I gotta ask you just well before we move on to the next topic around this is that the most people that come from the old world with the tooling and come from that old school vendor mentality or old soup architecture, old school architecture tend to kind of throw stones at the future and say, well the economics are all wrong and the performance metrics. So I want to ask you so I assume that we believe we do believe because assume that's going to happen. What is the economic picture? What's the impact that people are missing? When you look at the benefits of what this system is going to enable the impact? Specifically whether it's economics, productivity, efficient code, what are some of the things that maybe the VCS or other people in the naysayers side? Old school will, will throw stones at what's the, what's the big upside here? >>Mhm. So this will not be true for everyone and there will still be certain situations where it makes sense to choose different sets of of trade offs, but most everyone will be moving into the cloud for for convenience and speed reasons. And I'm deliberately not saying cost reasons. Um the reason being um usually or in the past you had simply different standard service delineations and all of the proserve, the consulting your hiring pool was all aligned with this old type of service delineation, which used to be a physical machine or a service or maybe even a service and you had a hot standby or something. If we, if we got like really a hugely respect from the same things still need to operate under laying what you do. But as we grow as an industry, more of more of this is commoditized and same as we commoditize service and storage network. We commoditized actually running off that machine and with service and such go even further. Um so it's not so much about about this fundamentally changing how it's built. It's just that a larger or a previously thing which was part of your value at and of what you did in your core is now just off the shelf infrastructure which you just by as much as you need again at certain scales and for certain specific use cases, this will not be true for the foreseeable future, but most everyone um will be moving there simply because where they actually add value and the people they can hire for and who are interested in that type of problem. I just mean that it's a lot more more sensical to to choose this different delineation but it's not cheaper >>and the commoditization and disintermediation is definitely happening, totally agree. And the complexity that's gonna be abstracted away with software is novell and it's also systematic. There's just it's new and there's some systems involved, so great insight there. I totally agree with you. The disruption is happening majority of almost all areas, so in all verticals and all industries, so so great point. I think this is where I think everyone's so excited and some people are paranoid actually frankly, but we cover that in depth on the Cuban other segments. But great point. We'll get back to what you're where you're spending your time right now. Um You're spending a lot of time on open metrics. What is that enabling take us through that? >>So um the super quick history of Prometheus, of course, we need that for open metrics. Promises was actually created in 2012. Um and the wire format which he used to in the exposition format, which he used to transport metrics into Prometheus is stable since 2014. Um But there is a large problem here. Um It carries the promise his name and a lot of competing projects and a lot of competing vendors of course there are vendors which compete with just the project. Um It's simply refused to to to take anything in which carried the promise his name. Of course, this doesn't align with their food um strategy, which they ran back then. So um together with scenes, the f we decided to just have a new different name for just that wire format for the underlying data model for everything which you need to make one complete exposition or a bunch of expositions towards towards permissions. So that's it at the corn, that's been ongoing since 2000 and 15 16 something. Um But there's also changes on the one hand, there is a super careful, a super super careful um Clean up and backwards compatible cleanup of a few things which the permit this exposition former serious here for didn't get right. But also we enable two features within this and as permitted chose open metrics as its official format. We also uplift committees and varying both heads. Obviously it's easier to get the synchronization. Um Ex employers stand out which is a completely new, at least outside of certain large search companies google. Um Who who used who use ex employers to do something different with with their traces. Um it was in 2017 when they told me that for them searching for traces didn't scale by labels. Uh and at that point I wanted to have both. I wanted to have traces and logs also with the same label set as permitting system. But when they tell you searching doesn't scale like they tell you you better listen. So uh the thing is this you have your index where you store all your data or your where you have the reference to enter your database and you have these label sets and they are super efficient and and quite powerful when compared to more traditional systems but they still carry a cost and that cost becomes non trivial at scale. So instead of storing the same labels for your metrics and your logs and your traces, the idea is to just store an I. D. For your trace which is super lightweight and it's literally just one idea. So your index is super tiny. Um And then you touch this information to your logs to your metrics and in the meantime also two year to year logs. Um So you know already that trace has certain properties because historically you have this needle estate problem. You have endless amounts of traces and you need to figure out what are the useful are they are the judicial and interesting aero state highlight and see some error occurring whatever if that information is already attached to your other signals. That's a lot easier. Of course. You see you're highlighting see bucket and you see a trace ID which is for that high latency bucket. So going into that trace, I already know it is a highlight and see trace for for a service which has a high latency, it has visited that labor. It was running this in that context, blah blah blah blah blah. Same for logs. There is an error. There is an exception, maybe a security breach, what have you and I can jump directly into a trace and I have all this mental context and the most expensive part is the humans. So enabling that human to not need to break mental uh train of thought to just jump directly from all the established state which they already have here in debugging just right into the trace, went back and just see why that thing behave that way. It's super powerful and it's also a lot cheaper to store this on the back and a four year traces which in our case internally we just run at 100% something. We do not throw data way, which means you don't have the super interesting thing. And by the way the trace just doesn't exist for us a good job. And that's the one thing to to from day one this intent to to marry those three pillars more closely. The other thing is by having a true lingua franca. It gave that concept of of of promises compatibility on the wire, its own name and it's its own distinct concept. And that is something which a lot of people simply attached to. So just by having that name, allow the completely different conversation over the last half decade or so and to close >>them close it >>up and to close that point because I come from the network, from the networking space and, and basically I T f r f C s are the currency within the networking space and how you force your vendors to support something, which is why I brought open metrics into the I. D. F. To to give it an official stamp of approval in Rfc number which is currently hopefully successful. Um So all of a sudden you can slip this into your tender and just tell your vendor, ex wife said okay, you need to support this. But I've seen all of a sudden by contract they're bound to to support communities native. So >>I support that Rfc yet or no, is that still coming? >>I, so at the last uh TF meeting, which was virtual, obviously I presented everything to the L. A W G. Um there was very good feedback. Um they want to adopt it as an informational uh I. D. Reason being it is most or it is a documentation of an already widely existed standard. So it gets different bits and pieces in the heather. Um Currently I'm waiting for a few rounds of feedback on specific wording how to make it more clear and such. Um looking >>good. It's looking good. >>Oh yes while presenting it. They actually told me that I have a conference with promises and performance. Well >>that's how you get things done in the old school internet. That's the way it was talking to Vince serving all of my friends and that generation we grew up, I mean I was telling a story on the clubhouse, just random that I grew up in the era. We used to pirate software used to deal software back in the old days. Pre open source. This is how things get done. So I gotta ask you the impact question. The, the deal with open metrics potentially could disrupt all those startups. So what, how does this impact all these stars because everyone is jockeying for land grabbing the observe ability space? Is that just because it's just too many people competing for one spot or do they all have differentiation? What happens to all those observe ability startups that got minted and funded? >>So I have, I think we have to split this into two answers, the first one open metrics and also Prometheus we're trying really hard to standardize what we're doing and to make this reusable as much as we possibly can um simply because premises itself does not have any any profit motivation or anything, it is just a project run by people. Um so we gain by, by users using our stuff and working in the way, which we think is a good way to operate. So anyone who just supports all those open standards, just on boards themselves onto a huge ecosystem of already installed base. And we're talking millions and millions and millions of installations, we don't have hard numbers, but the millions and millions I am certain of and thats installations, not users, so that's several orders of magnitude more. Um, so that that actually enables an ecosystem within which to move as to the second question. It is a super hot topic. So obviously that we see money starts coming in from all right. Um, I don't think that everyone will survive, but that is just how it usually is. There is a lot of of not very differentiated offerings, be the software, be they as a service, be their distributions? Well, you don't really see much much value and not not a lot of, not a lot of much anything in ways of innovation. So this is more about about making it easier to run or or taking that pain away, which obviously makes you open to attack by by all the hyper scale. Of course, they can just do this at a higher scale than you. Um, so unless you actually really in a way in that space and actually shape and lead in that space, at least to some extent, it will probably be relatively hard. That being said. >>Yeah, when you ride, when you ride the big waves like this, I mean, you you got to be on the right side of this. Uh, Pat Gelsinger's when he was that VM Where now is that intel told me on the cube one time. If you're not, you don't get it right on these waves, your driftwood, Right? So, so, you know, and we've seen this movie before, when you start to see the standards bodies like the I E T. F. Start to look at standards. You start to think there's a broader market opportunities, a need for some standards, which is good. It enables more value, right value creation, whether it's out in the open or if it's innovative from a commercialization standpoint, you know, these are good things and then you have everyone who's jockeying around from the land grab incomes, a standard momentum, you gotta be on the right side of these things. We know what we know it's gonna look like. If you're not on the right side of the standard, then your proprietary, >>precisely. >>And so that's the endgame. Okay, well, I really appreciate the impact. Final question. Um, as the world evolved post Covid as cloud Native goes mainstream, the enterprises in the cloud scale are demanding more things. Enterprises are are, you know, they want more stuff than just straight up in the cloud startups, for instance. So you start to see, you know, faster, more agility obviously, uh, with deploying modern apps, when you start getting into enterprise grade scale, you gotta start thinking, you know, this is an engineering and computer science discipline. Coming together, you've got to look at the architecture. What's your future vision of how the next gen programmable infrastructure looks like? >>You mean, as in actually manage those services or limited to observe ability to >>observe ability, role, observe ability. Just you're in the urine. The survivability speaks to the operating system of what's going on, distributed computing you're looking at, you gotta have a good observe ability if you want to deploy services. So, you know, as it evolves and this is not a fringe thing anymore. This is real deal. This observe abilities a key linchpin in the architecture. >>So, um, maybe to approach us from two sides. One of the things which, which, I mean I come from very much non cloud native background. One of the things which tends to be overlooked in cloud native is that not everything is green field. Matter of fact, legacy is the code word for makes actual money. Um, so a lot of brownfield installations, which still make money, which we keep making money and all of those existence, they will not go away anytime soon. And as soon as you go to actually industry trying to uplift themselves to industry that foreign, all those passwords you get a lot more complexity in, in just the availability of systems than just the cloud native scheme. So being able to to actually put all of those data types together and not just have you. Okay, nice. I have my micro service events fully instrumented and if anything happens on the layer below, I'm simply unable to make any any effort on debugging um things like for example, Prometheus course they are so widely adopted enable you to literally, and I did this myself um from the Diesel Genset of your data center over the network down to down to the office. If if someone is in there, if if if your station and your pager is is uh stepped in such to the database to the extra service which is facing your end customers, all of those use the same labels that use the same metadata to actually talk about this. So all of a sudden I can really drill down into my data, not only from you. Okay. I have my microservices, my database. Big deal. No, I can actually go down as deep in my infrastructure as my infrastructure is. And this is especially important for anyone who's from the more traditional enterprise because most of them will for the foreseeable future have tons and tons and tons of those installations and the ability to just marry all this data together no matter where it's coming from. Of course you have this lingual franklin, you have these widely adopted open standards. I think that is one of the main drivers in >>jail. I think you just nailed the hybrid and surprised use case, you know, operation at scale and integrating the systems. So great job Richard, thank you so much for coming on. Richard Hartman, Director of community Griffon A labs. I'm talking, observe ability here on the cube. I'm john for your host covering cube con 21 cognitive content. One virtual. Thanks for watching. Mhm Yeah. Mhm.

(upbeat music) >> From theCUBE studios in Palo Alto, in Boston, connecting with thought leaders all around the world. This is a Cube conversation. >> Hi everybody, this is Dave Vellante. And as you know, I've been running a CxO series in this COVID economy. And as we go into the post-isolation world, really want to focus and expand our scope and really look at startups. And of course, we're going to look at startups, let's follow the money. And I want to start with the investor. Mark Roberge is here. He's the managing director at Stage 2 capital. He's a professor at the Harvard Business School, former CRO over at HubSpot. Mark, great to see you. Thanks for coming on. >> Yeah, you bet, Dave. Thanks for having me. >> So I love that, you know... looking at your career a little bit, on your LinkedIn and following some of your videos, I love the fact that you did, and now you teach and you're also applying it with Stage 2 Capital. Tell us a little bit more about both of your career and Stage 2. >> Yeah, I mean, a lot of it's a bit serendipitous, especially last 10 years, but I've always had this learn, do, teach framework in my, in mind as I go through the decades of my career, you know, like you're probably like 80% learning in your twenties, early thirties and you know, 20% doing. Then, you know, I think my thirties was like leading the HubSpot sales team, a lot of doing, a little bit of teaching, you know, kind of hopping into different schools, et cetera, and also doing a lot of, some writing. And now like, I'm teaching it. I think investing kind of falls into that too, you know, where you've got this amazing opportunity to meet, the next generation of, of extraordinary entrepreneurs and engage with them. So yeah, that, that has been my career. You know, Dave, I've been a, passionate entrepreneur since 22 and then, the last one I did was HubSpot and that led to just an opportunity to build out one of the first sales teams in a complete inside environment, which opened up the doors for a data driven mindset and all this innovation that led to a book that led to recruitment on HBS's standpoint, to like come and teach that stuff, which was such a humbling honor to pursue. And that led to me a meeting my co-founder, Jay Po, of Stage 2 Capital, who was a customer to essentially start the first VC fund, running back by sales and marketing leaders, which was his vision. But when he proposed it to me, addressed a pretty sizeable void, that I saw, in the entrepreneur ecosystem that I thought could make a substantial impact to the success rate of startups. >> Great, I want to talk a little bit about how you guys compete and what's different there, but you know, I've read some of your work, looked at some of your videos, and we can bring that into the conversation. But I think you've got some real forward-thinking for example, on the, you know, the best path to the upper right. The upper right, being that, that xy-axis on growth and adoption, you know, do you go for hyper-growth or do you go for adoption? How you align sales and marketing, how you compensate salespeople. I think you've got some, some leading-edge thinking on that, that I'd love for you to bring into the conversation, but let's start with Stage 2. I mean, how do you compete with the big guys? What's different about Stage 2 Capital? >> Yeah, I mean, first and foremost, we're a bunch of sales and marketing and execs. I mean, our backing is, a hundred plus CROs, VPs of marketing, CMOs from, from the public companies. I mean, Dropbox, LinkedIn, Oracle, Salesforce, SurveyMonkey, Lyft, Asana, I mean, just pick a unicorn, we probably have some representation from it. So that's, a big part of how we compete, is most of the time, when a rocket ship startup is about to build a sales team, one of our LPs gets a call. And because of that, we get a call, right. And, and so there's, we're just deep in, in helping... So first off, assess the potential and risks of a startup in their current, go to market design, and then really, you know, stepping in, not just with capital, but a lot of know-how in terms of, you know, how to best develop this go-to-market for their particular context. So that's a big part of our differentiation. I don't think we've ever lost a deal that we tried to get into, you know, for that reason, just because we come in at the right stage, that's right for our value prop. I'd say Dave, the biggest, sort of difference, in our investing theme. And this really comes out of like, post HubSpot. In addition to teaching the HBS, I did parachute into a different startup every quarter, for one day, where you can kind of like assess their go-to-market, looking for, like, what is the underlying consistency of those series A businesses that become unicorns versus those that flatline. And if I, you know, I've now written like 50 pages on it, which I, you know, we can, we can highlight to the crew, but the underlying cliffnotes is really, the avoidance of a premature focus on top line revenue growth, and an acute focus early on, on customer attention. And, I think like, for those of you, who run in that early stage venture community these days, and especially in Silicon Valley, there's this like, triple, triple, double, double notion of, like year one, triple revenue, year two, triple revenue, year three, double revenue, year four, double revenue, it's kind of evolved to be like the holy grail of what your objectives should be. And I do think like there is a fraction of companies that are ready for that and a large amount of them that, should they pursue that path, will lead to failure. And, and so, we take a heavy lens toward world-class customer retention as a prerequisite, to any sort of triple, triple, double, double blitzscaling type model. >> So, let me ask you a couple of questions there. So it sounds like your LPs are heavily, not only heavily and financially invested, but also are very active. I mean, is that a, is that a fears thing? How active are the LPs in reality? I mean, they're busy people. They're they're software operators. >> Yeah. >> Do they really get involved in businesses? >> Absolutely. I mean, half of our deals that we did in fund one came from the LPs. So we get half of our funnel, comes from LPs. Okay. So it's always like source-pick-win-support. That's like, what basically a VC does. And our LPs are involved in every piece of that. Any deal that we do, we'll bring in four or five of our LPs to help us with diligence, where they have particular expertise in. So we did an insuretech company in Q4, one of our LPs runs insurance practice at Workday. And this particular play he's selling it to big insurance companies. He was extremely helpful, to understand that domain. Post investment, we always bring in four or five LPs to go deeper than I can on a particular topic. So one of our plays is about to stand up in account based marketing, you know, capability. So we brought in the CMO, a former CMO at Rapid7 and the CMO at Unisys, both of which have, stood in, stood up like, account based marketing practices, much more deeply, than I could. You know of course, we take the time to get to know our LPs and understand both their skills, and experiences as well as their willingness to help, We have Jay Simons, who's the President of Atlassian. He doesn't have like hours every quarter, he's running a $50 billion company, right? So we have Brian Halligan, the CEO of HubSpot, right? He's running a $10 billion company now. So, we just get deal flow from them and maybe like an event once or twice a year, versus I would say like 10 to 20% of our LPs are like that. I would say 60% of them are active operators who are like, "You know what? I just miss the early days, and if I could be active with one or two companies a quarter, I would love that." And I would say like a quarter of them are like semi-retired and they're like, they're choosing between helping our company and being on the boat or the golf course. >> Is this just kind of a new model? Do you see having a different philosophy where you want to have a higher success rate? I mean, of course everybody wants to have a, you know, bat a thousand. >> Yeah. >> But I wonder if you could address that. >> Yeah. I don't think it, I'm not advocating slower growth, but just healthier growth. And it's just like an extra, it's really not different than sort of the blitzscaling oriented San Francisco VC, okay? So, you know, I would say when we were doing startups in the nineties, early 2000s before The Lean Startup, we would have this idea and build it in a room for a year and then sell it in parallel, basically sell it everywhere and Eric Ries and The Lean Startup changed all that. Like he introduced MVPs and pivots and agile development and we quickly moved to, a model of like, yeah, when you have this idea, it's not like... You're really learning, keep the team small, keep the burn low, pivot, pivot, pivot, stay agile and find product-market fit. And once you do that, scale. I would say even like, West Coast blitzscaling oriented VCs, I agree with that. My only take is... We're not being scientifically rigorous, on that transition point. Go ask like 10 VCs or 10 entrepreneurs, what's product-market fit, and you'll get 10 different answers. And you'll get answers like when you have lots of sales, I just, profoundly disagree with that. I think, revenue in sales has very little to do with product-market fit. That's like, that's like message-market fit. Like selling ice to Eskimos. If I can sell ice to Eskimos, it doesn't mean that product-market fit. The Eskimos didn't need the ice. It just means I was good at like pitching, right? You know, other folks talk about like, having a workable product in a big market. It's just too qualitative. Right? So, that's all I'm advocating is, that, I think almost all entrepreneurs and investors agree, there's this incubation, rapid learning stage. And then there's this thing called product-market fit, where we switch to rapid scale. And all I'm advocating is like more scientist science and rigor, to understanding some sequences that need to be checked off. And a little bit more science and rigor on what is the optimal pace of scale. Because when it comes to scale, like pretty much 50 out of 50 times, when I talk to a series A company, they have like 15 employees, two sales reps, they got to like 2 million in revenue. They raise an 8 million-dollar round in series A, and they hired 12 salespeople the next month. You know, and Dave, you and your brother, who runs a large sales team, can really understand how that's going to failure almost all the time. (Dave mumbles) >> Like it's just... >> Yeah it's a killer. >> To be able to like absorb 10 reps in a month, being a 50, it's just like... Who even does all those interviews? Who onboards them? Who manages them? How do we feed them with demand? Like these are some of the things I just think, warrant more data and science to drive the decisions on when and how fast to scale. >> Mark, what is the key indicator then, of product-market fit? Is it adoption? Is it renewal rates? >> Yeah. It's retention in my opinion. Right? So, so the, the very simple framework that I require is you're ready to scale when you have product-market and go to market-fit. And let's be, extremely precise, and rigorous on the definitions. So, product-market fit for me, the best metric is retention. You know, that essentially means someone not only purchased your offering, but experienced your offering. And, after that experience decided to repurchase. Whether they buy more from you or they renew or whatever it is. Now, the problem with it is, in many, like in the world we live inside's, it's like, the retention rate of the customers we acquire this quarter is not evident for a year. Right, and we don't have a year to learn. We don't have a year to wait and see. So what we have to do is come up with a leading indicator to customer retention. And that's something that I just hope we see more entrepreneurs talking about, in their product market fit journey. And more investors asking about, is what is your lead indicator to customer retention? Cause when that gets checked off, then I believe you have product-market fit, okay? So, there's some documentation on some unicorns that have flirted with this. I think Silicon Valley calls it the aha moment. That's great. Just like what. So like Slack, an example, like, the format I like to use for the lead indicator of customer retention is P percent of customers, do E event, in T time, okay? So, it basically boils it down to those three variables, P E T. So if we bring that to life and humanize it, 70% of the customers, we sign up, this is Slack, 70% of the customers who sign up, send 2000 team messages in 30 days, if that happens, we have product-market fit. I like that a lot more, than getting to a million in revenue or like having a workable product in a big market. Dropbox, 85% of customers, share one file in one hour. HubSpot, I know this was the case, 75% of customers, use five or more of the 25 features in the platform, within 60 days. Okay? P percent, do E event, in T time. So, if we can just format that, and look at that through customer cohorts, we often get visibility into, into true product market-fit within weeks, if not like a month or two. And it's scientifically, data-driven in terms of his foundation. >> Love it. And then of course, you can align sales compensation, you know, with that retention. You've talked a lot about that, in some of your work. I want to get into some of the things that stage two is doing. You invest in SaaS companies. If I understand it correctly, it's not necessarily early stage. You're looking for companies that have sort of achieved some degree of revenue and now need help. It needs some operational help and scaling. Is that correct? >> Yeah. Yeah. So it's a little bit broader in size, as any sort of like B2B software, any software company that's scaling through a sales team. I mean, look at our backers and look at my background. That's, that's what we have experience in. So not really any consumer plays. And yeah, I mean, we're not, we have a couple product LPs. We have a couple of CFO type LPs. We have a couple like talent HR LPs, but most of us are go-to-market. So we don't, you know, there's awesome seed funds out there that help people set up their product and engineering team and go from zero to one in terms of the MVP and find product-market fit. Right? We like to come in right after that. So it's usually like between the seed and the A, usually the revenue is between half a million and 1.5 million. And of course we put an extraordinary premium on customer retention, okay? Whereas I think most of our peers put an extraordinary premium on top line revenue growth. We put an extraordinary premium on retention. So if I find a $700,000 business that, you know, has whatever 50, 70 customers, you know, depending on their ticket size, it has like North of 90% local retention. That's super exciting. Even if they're only growing like 60%, it's super exciting. >> What's a typical size of investments. Do you typically take board seats or not? >> Yeah. We typically put in like between like seven hundred K, one and a half million, in the first check and then have, larger amounts for follow on. So on the A and the B. We try not to take board's seats to be honest with you, but instead the board observers. It's a little bit selfish in terms of our funds scale. Like the general counsel from other venture capitalists is of course, like, the board seat is there for proper governance in terms of like, having some control over expenditures and acquisition conversations, et cetera, or decisions. But a lot of people who have had experience with boards know that they're very like easy and time efficient when the company is going well. And there are a ton of work when the company is not going well. And it really hurts the scale, especially on a smaller fund like us. So we do like to have board observers seats, and we go to most of the board meetings so that our voice is heard. But as long as there's another fund in there that, has, world-class track record in terms of, holding proper governance at the board level, we prefer to defer to them on that. >> All right, so the COVID lock down, hit really in earnest in March, of course, we all saw the Sequoia memo, The Black Swan memo. You were, I think it HubSpot, when, you remember the Rest In Peace Good Times memo, came out very sort of negative, put up all over the industry, you know, stop spending. But there was some other good advice in there. I don't mean to sort of, go too hard on that, but, it was generally a negative sentiment. What was your advice to your portfolio companies, when COVID hit, what were you telling them? >> Yeah, I summarized this in our lead a blog article. We kicked off our blog, which is partially related to COVID in April, which has kind of summarize these tips. So yes, you are correct, Dave. I was running sales at HubSpot in '08 when we had last sort of major economic, destabilization. And I was freaking out, you know (laughs briefly) at the time we were still young, like 20, 30 reps and numbers to chase. And... I was, actually, after that year, looking back, we are very fortunate that we had a value prop that was very recession-proof. We were selling to the small business community, who at the time was cutting everything except new ways to generate sales. And we happen to have the answer to that and it happened to work, right? So it showed me that, there's different levels of being recession proof. And we accelerated the raise of our second fund for stage two with the anticipation that there would be a recession, which, you know, in the venture world, some of the best things you could do is close a fund and then go into a recession, because, there's more deals out there. The valuations are lower and it's much easier to understand, nice to have versus must have value props. So, the common theme I saw in talking to my peers who looked back in the '01 crisis, as well as the '08 crisis, a year later was not making a bolder decision to reorient their company in the current times. And usually on the go-to-market, that's two factors, the ICP who you're selling to, ideal customer profile and the CVP, what your message is, what's your customer value prop. And that was really, in addition to just stabilizing cash positions and putting some plans in there. That was the biggest thing we pushed our portfolio on was, almost like going through the exercise, like it's so hard as a human, to have put like nine months into a significant investment leading up to COVID and now the outcome of that investment is no longer relevant. And it's so hard to let that go. You know what I mean? >> Yeah. >> But you have to, you have to. And now it's everything from like, you spent two years learning how to sell to this one persona. And now that persona is like, gyms, retail and travel companies. Like you've got to let that go. (chuckle simultaneously) You know what I mean? Like, and, you know, it's just like... So that's really what we had to push folks on was just, you know, talking to founders and basically saying this weekend, get into a great headspace and like, pretend like you were parachuted into your company as a fresh CEO today. And look around and appreciate the world and what it is. What is this world? What are the buyers talking about? Which markets are hot, which markets are not, look at the assets that you have, look at your product, look at your staff, look at your partners, look at your customer base, and come up with a strategy from the ground up based on that. And forget about everything you've done in the last year. Right? And so, that's really what we pushed hard on. And in some cases, people just like jumped right on it. It was awesome. We had a residential real estate company that within two weeks, stood up a virtual open house module that sold like hotcakes. >> Yeah. >> That was fantastic execution. And we had other folks that we had to have like three meetings with to push them deep enough, to go more boldly. But that, was really the underlying pattern that I saw in past, recessions and something I pushed the portfolio on, is just being very bold on your pivots. >> Right? So I wanted to ask you how your portfolio companies are doing. I'm imagining you saw some looked at this opportunity as a tailwind. >> Yeah. >> You mentioned the virtual, open house, a saw that maybe were exposed, had, revenue exposure to hard-hit industries and others kind of in the middle. How are your portfolio companies doing? >> Yes, strong. I'm trying to figure out, like, of course I'm going to say that, but I'm trying to figure out like how to provide quant, to just demonstrate that. We were fortunate that we had no one, and this was just dumb luck. I mean, we had no one exclusively selling to like travel, or, restaurants or something. That's just bad luck if you were, and we're fortunate that we got a little lucky there, We put a big premium, obviously we had put a big premium on customer retention. And that, we always looked at that through our recession proof lens at all our investments. So I think that helped, but yeah, I mean, we've had, first off, we made one investment post COVID. That was the last investment on our first fund and that particular company, March, April, May, their results were 20% higher than any month in history. Those are the types of deals we're seeing now is like, you literally find some deals that are accelerating since COVID and you really just have to assess if it's permanent or temporary, but that one was exciting. We have a telemedicine company that's just like, really accelerating post COVID, again, luck, you know, in terms of just their alignment with the new world we're living in. And then, jeez! I mean, we've had, I think four term sheets, for markups in our portfolio since March. So I think that's a good sign. You know, we only made 11 investments and four of them, either have verbal or submitted term sheets on markups. So again, I feel like the portfolio is doing quite well, and I'm just trying to provide some quantitative measures. So it doesn't feel like a political answer. (Mark chuckles) >> Well, thank you for that, but now, how have you, or have you changed your sort of your thesis post COVID? Do you feel like your... >> Sure. >> Your approach was sort of geared towards, you know, this... >> Yeah. >> Post COVID environment? But what changes have you made. >> A little bit, like, I think in any bull market, generally speaking, there's just going to be a lot of like triple, triple, double, double blitzscaling, huge focus on top-line revenue growth. And in any down market, there's going to be a lot of focus on customer retention unit economics. Now we've always invested in the latter, so that doesn't change much. There's a couple of things that have changed. Number one, we do look for acceleration post COVID. Now, that obviously we were not, we weren't... That lens didn't exist pre-COVID, So in addition to like great retention, selling through a sales team, around the half million to a million revenue, we want to see acceleration since COVID and we'll do diligence to understand if that's a permanent, or a temporary advantage. I would say like... Markets like San Francisco, I think become more attractive in post COVID. There's just like, San Francisco has some magic happening there's some VC funds that avoid it, cause it's too expensive. There's some VC funds that only invest in San Francisco, because there's magic happening. We've always just been, you know... we have two portfolio companies there that have done well. Like we look at it and if it's too expensive, we have to avoid it. But we do agree that there's magic happening. I did look at a company last week. (chuckles inaudibly) So Dave, there are 300K in revenue, and their last valuation is 300 million. (both chuckle) >> Okay, so why is San Francisco more attractive, Mark? >> Well, I mean and those happened in Boston too. >> We looked at... (Mark speaks inaudibly) >> I thought you were going to tell me the valuations were down. (Dave speaks inaudibly) >> Here's the deal all right, sometimes they do, sometimes they don't and this is one, but in general, I think like they have come down. And honestly, the other thing that's happened is good entrepreneurs that weren't raising are now raising. Okay? So, a market like that I think becomes more attractive. The other thing that I think that happens is your sort of following strategies different. Okay so, there is some statistical evidence that, you know, obviously we're coming out of a bear market, a bullish market in, in both the public and the private equities. And there's been a lot of talk about valuations in the private sector is just outrageous. And so, you know, we're fortunate that we come in at this like post seed, pre-A, where it's not as impacted. It is, but not as or hasn't been, but because there's so many more multibillion-dollar funds that have to deploy 30 to 50 million per investment, there's a lot of heating up that's happened at that stage. Okay? And so pre COVID, we would have taken advantage of that by taking either all or some of our money off the table, in these following growth rounds. You know, as an example, we had a company that we made an investment with around 30 million evaluation and 18 months later, they had a term sheet for 500. So that's a pretty good return in 18 months. And you know, that's an expensive, you know, so that that's like, wow, you know, we probably, even though we're super bullish on the company, we may want to take off a 2X exposition... >> Yeah. >> And take advantage of the secondaries. And the other thing that happens here, as you pointed out, Dave is like, risk is not, it doesn't become de-risk with later rounds. Like these big billion dollar funds come in, they put pressure on very aggressive strategic moves that sometimes kills companies and completely outside of our control. So it's not that we're not bullish on the company, it's just that there's new sets of risks that are outside of the scope of our work. And so, so that that's probably like a less, a lesser opportunity post COVID and we have to think longer term and have more patient capital, as we navigate the next year or so of the economy. >> Yeah, so we've got to wrap, but I want to better understand the relationship between the public markets and you've seen the NASDAQ up, which is just unbelievable when you look at what's happening in main street, and the relationship between the public markets and the private markets, are you saying, they're sort of tracking, but not really identical. I mean, what's the relationship. >> Okay, there's a hundred, there's thousands of people that are better at that than me. Like the kind of like anecdotal thoughts that I, or the anecdotal narrative that I've heard in past recessions and actually saw too, was the private market, when the public market dropped, it took nine months roughly for the private market to correct. Okay, so there was a lag. And so there's, some arguments that, that would happen here, but this is just a weird situation, right? Of like the market, even though we're going through societal crazy uncertainty, turmoil and, and tremendous tragedy, the markets did drop, but they're pretty hot right now, specifically in tech. And so there's a number of schools of thoughts there that like some people claim that tech is like the utilities companies of the eighties, where it's just a necessity and it's always going to be there regardless of the economy. Some people argue that what's happened with COVID and the remote workplace have made, you know, accelerated the adoption of tech, the inevitable adoption, and others could argue that like, you know, the worst is still the come. >> Yeah. And of course, you've got The Fed injecting so much liquidity into the system, low interest rates, Mark, last question. Give me a pro tip for entrepreneurs. (Mark Sighs) >> I would say, like, we've talked a lot about, this methodology with, you know, customer retention, really focusing there, align everything there as opposed to top line revenue growth initially. I think that the extension I do at this point is, do your diligence on your investors, and what their thoughts are on your future growth plans to see if they're aligned. Cause that, that becomes like, I think a lot of entrepreneurs, when they dig into this work, they do want to operate around it. But that becomes that much harder when you have investors that think a different way. So I would just, you know, just always keep in mind that, you know, I know it's so hard to raise money, but you know, do the diligence on your investors to understand, what they'd like to see in the next two years and how it's aligned with your own vision. >> Mark is really great having you on. I'd love to have you back and as this thing progresses, and see how it all shakes out. It really a pleasure. Thanks for coming on. >> No, thanks, Dave. I appreciate you having me on. >> And thank you everybody for watching. This is Dave Vellante for The Cube. We'll see you next time. (music plays)

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation I am stupid a man and this is a special cube conversation we've been talking a lot of course for many years about the ascent of cloud and today in 2020 multi cloud is a big piece of the discussion and we're really happy to help unveil coming out of cell al kiram which is helping the networking challenges when it comes to multi cloud and I have the two co-founders they are brothers I have Amir who is the CEO and a DIF who is the CTO the Khan brothers thank you so much for joining us and congratulations on the launch of the company thank you sue for having us on the show it's a pleasure to see you again all right so Amir we've had you on the program your previous company that you've done was of course the fella you the two of you have worked together at I believe five companies successful companies acquired you know the most recent one into Cisco so a mirror obviously you know you know strong networking theme your brother the CTO I was going to talk to us about the engineering but give us you know just the the story of Al Kyra what you've been building and now ready to unveil to the world certainly needs to so in around 2018 timeframe we started looking into the next big problem to solve in the industry which was not only a substantial you know from the market size perspective but also from the customers perspective was solving a major pain point so when we started looking into the cloud customers and started talking to our customers they were struggling from the cloud networking perspective even in a single cloud and it was a new environment for them and they had to understand all the nitty-gritty details of each one of these clouds and when you go to multi cloud environment it becomes exponentially complicated to address not only connectivity but how to deploy services like firewall and other services including low balancers and IP address management etc and remote access so we started digging deeper into this problem and start working with the customers and took a clean sheet of paper and came up with a very comprehensive approach to offering a solution which is as a service this time we are not shipping any hardware or software it is you know just like any other SAS application you just come to our portal I just drag and drop literally draw out your network and click on provision and you know come back after 40 minutes or so your full global cloud infrastructure is up and running so out if your brother laid out a pretty broad vision there any of us from the networking world we know there's a lot of complexity there and therefore it takes a lot of work when I want to do things simply as a service is you know a huge growth area bring us inside the engineering challenges that you and the team have been working on to build this solution second let's do so we've been working both our men and myself in the networking industry for more than 25 years now and our the way we have worked and what we have believed in is that we need to solve customer problems we never believed in like doing a science project so here also we started working with customers as we have always done in the past we understood the customers pain points the challenges they were facing especially in this case and in cloud networking space multi-cloud networking space based on the user requirements users or the customers use cases we started the building a service and here what we have built is a complete network as a service it's a multi cloud met work as a service which not only provides connectivity to multiple routes but also addresses the needs for bringing in networking services as well as security services making sure that you have a full policy based infrastructure on top of it you have deep visibility into into the clouds as well as into on-premise into and visibility into and monitoring troubleshooting and all of it is delivered to you as a service so that's what we have been doing here at ELQ here excellent so when we look at multi-cloud of course you know every cloud they have some similar things they have some different things they all tend to do things a little bit differently you know one of the secret sauces that have been talked about for the last few years is ESP BAM space like you and built with Nutella to help really enable those environments so if we've got a diagram here which I think will help explain a little bit as you know we're out here it how it plugs into these different environments walk us through a little bit what we're seeing here and what you're actually doing a tell Kira so here we are building a global unifying the multi cloud Network it's consumed as a service think of it as consuming it just like you would consume any other SAS like our SAS issue so you come to lqs portal you register and then there you go and you start building your global multi-cloud unified network with integrated services so here what you see is is a Elka's cloud services exchange with comprises of cloud exchange points you can bring these up these cloud exchange points up anywhere on the globe you can decide like what networking services security services you need in these cloud exchange points you can connect the multiple clouds from there you can bring your existing on-premise connector matiee into the CX PS all these CX B's have a full mesh of overlay high speed low latency connectivity among each other so there is a full network which comes up between these CX B's and this the whole infrastructure scales with customers as as a customer scale so it's a horizontally scalable veil a very highly redundant and resilient infrastructure which we have both all right so armor now that we understand the basics of the technology you've got some strong investors including Sequoia kleiner perkins give us you know what is being announced day you're coming out of stealth where are you with the product you know how many employees you have and where are you with the discussion of customer adoption so stew we're obviously bringing this to the market and we will be announcing it on April 15th it's available for the customers to consume our solution as a service on that day so they are welcome to reach out to us and we'll be happy to help them and as a matter of fact just come to our website and register for the service and yeah we rightly said that we have a superstar team of not only the venture capital companies but also the board members representing those companies the bill Cochran and mamoon Hamid Wright who the leading VCS are on the board of our company including myself inactive all right I'm all right love to actually bring up the second slide that we have here walk us through you said you know the service you know how do people get started how do they understand you know what would walk us through what what they do so the biggest challenge when we started looking into these problems you know Stu was that it was very complicated you have to piecemeal bring up instances and the cloud and stitch them together and when you try to integrate the services that was a different challenge for the customers right so we wanted to make sure that it was so simple and clean that the customer didn't even have to think about any underlying construct on any of the clouds they should not have to worry about learning each individual power from the you know networking perspective so here's your portal you just come you know step one is come to a portal or register step two is you start drawing your network based on your intent what on-prem an activity you want to bring into this service what type of services you need like all all the firewalls and then you know what pilots you need to connect and everything happens seamlessly the from on pram pram through services into the cloud and across multiple clouds it's a seamless service that we have created and with full analytics capabilities and full governance built in alright so I'll to bring us into what this means for customers you know how do they manage it you know is this the networking team is it the cloud architects you know what api's are there how does this fit into kind of what customers are doing today and you know solve some of those challenges that we laid out earlier in the discussion yes trauma from the customers perspective it's as I said it's it's completely delivered as a service customers come to our portal they draw out the network they select the services they click on provision and the whole network comes up within minutes so the main thing here is that from a customer's point of view if they are connecting to different clouds they don't need to understand any of the underlying specifics or underlying constructs of any of the of the cloud in order to bring can I bring up connectivity so we what we are doing here is we are abstracting the clouds here so we are building a virtual cloud network so if you if you think of if you compare it with what we did in the in the previous life be virtualized the when so here would be a doing is we are virtualizing the cloud network so underlying doesn't matter which cloud you sit on which cloud you need to connect to which networking services whether cloud native services or whether you you want to consume our care services or we also support like customer bringing in third-party services as well so it's all all offered from our platform all offered is a service for to the customer again no expertise required in any of the underlying networking constructs of any of these cards give us what we should be looking at from a technology roadmap from Akira through the rest of 2020 good question as to so as I mentioned earlier our roadmap is dictated by customer requirements so we prioritize what customers need from us so we have come out with a scalable platform we have come out with a marketplace for networking services in there in the near term we'll be expanding our market place with more services we will be addressing more use cases and when I talk about use cases I can give you some examples like there's a view you not just only need connectivity into cloud you might have different requirements from from throughput perspective or bandwidth perspective or different services that you need to front-end your cloud but you may have certain applications such as internet basing application where you eat like traffic coming in from the internet inbound to those applications you might need services like a load balancer like an external load balancer in our services exchange you might also need like a firewall you might need traffic engineering or sorry service eaning capability is where you would chain service through multiple or traffic through multiple of these services like a firewall in the load balancer so we have built a platform which gives you all those capabilities going forward we will be adding more services more use cases to it we have a long ways ahead of us and we will be putting all our effort in delivering a roadmap as we go all right so Amma your technical team definitely has their hands full and uh you know robust after work on uh give us the the high-level what we should be looking for out Kira for people that are out there you know multi-cloud and networking you know tend to get talked a lot there's many big companies and some small ones what will separate al Kira from the rest of the market today and what should we be looking to see the company's progression through 2020 yeah thanks for asking that yeah certainly I mean you know from the solution perspective out it's said that you know it's so fundamentally important to have a very strong basis right and that's what we have done we are bringing out a certain number of services and now we will continue to grow on that will create a big marketplace we will continue to improve on which clouds we connect to and how and we will be building our own services in certain cases as well now building a technology is just one piece of it we have to go out to market with a company that the customers can trust every single you know the department in that company whether it's sales or how they do business with us all the business back-end pieces have to be sorted out and that's what we've been working with and you know then go to market partners that is very very important right support is very important so let me spend a little bit of time on go to market strategy we have been working with the service riders so that we can extend our reach not only to the large customers but also to midsize customers across the globe so you will see us in the future announcing major service water partnerships as well as we've been working with large sis bars and system integration in a partners and also we have taking a slightly different approach this time because it's a service so we are going with telecom master agents which have been you know working with the service providers the cloud providers the cable providers as a channel and they have a huge reach into the customer base so we we have a very comprehensive strategy not only from the go to market in the technology perspective but also how we are going to support our customers and continue to build a relationship to build a lasting company yeah I'm a super important point there absolutely we've seen the maturation and change in the service providers as today they are working with many of the public cloud providers and they're as you said a close touch point and a trusted partner of our customers all right so before I let you go you know YouTuber brothers everybody in today's day and age is spending even more time with family but you know your your situation you've worked together for a long time what keeps bringing the two of you together working together and then talk about that ball so I mean we're very close-knit family we have four brothers and one sister and obviously active and I have been the closest because we have been working together for the longest we have at least work in five different companies together our families travel together we have three daughters each we live about five minutes you know walk from each other and we you know just have this bond where we not only have you know the family close but also very close-knit friends a circle which we both hang out with and we you know obviously have common interest in the sports as well we play squash and tennis and work out so after four if they want to take a stab at it but also yeah so we've always been very close in fact we've been together for the last like ever since I can remember like even even college days he was we were roommates for for some time also he ever say we have like our circle of friends is the same also so again we're very close and we work well together so we complement each other's skills and and it's it's worked out in the past hopefully it will work out again and I look forward to working with them for many many more years to come yeah well I'm or not - thank you so much for sharing the the coming out of stealth for Al Kyra we definitely look forward to watching your progress and you know seeing how you're helping customers in this multi-cloud world thank you for joining us - thank you so much thank you for having us all right I'm Stu minimun and thank you so much for watching this special cube conversation on the cube [Music]

from the cube Studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation hi I'm Stu mana man and welcome to a special cube conversation talking to leaders around the globe happy to welcome to the program two guests actually one is a cube alumni the other one I believe the first time on the program the Khan brothers I have a mirror and on TIFF so gentlemen thanks so much for joining us oh thank you for having us again yeah so here you know you and your brother you're coming out of stealth al Kyra is the company you two both work together at many companies we know you most recently from Katella we're a mirror you know we've spoken with you on the cube I believe right after that acquisition proc it was another company back in the day also happened to sell to Cisco but we know that you know networking is one of the you know toughest things in our industry now everybody thinks that their environment is is something challenging but you know we know networking in the weeds there's so many protocols and while networking as a whole doesn't change really fast there have been a lot of waves of change happening most recently of course cloud having a major impact on what's happening to the networking world Amir let's start with you you're the CEO your brother a tip is the CTO you're both co-founders give us a little bit of the background and the why of Al Kyra yes but after we sold patella I was looking for the next idea and we talked to multiple customers and multiple service providers a common theme that came across was the cloud networking was complex and when it came to multiple clouds it became exponentially complex it was not only learning multiple clouds but all the underlying constructs were different in each one of us so we decided that we need to take a look at a common solution which provides one way of connecting to all clouds that exist out there and provides common services like firewall and then from the governance perspective it becomes very challenging if you have very diverse environments so we are bringing analytics a common way of monitoring and managing the networks on top of that so it's a very comprehensive solution that the industry needed and they needed it as a service so we we dug deeper and came up with this idea went to the VCS and got funded very quickly to solve the problem and very proud to say that we are the first ones were in the industry for bringing computer networking as a service for multi cloud environments to the market all right now that's a that's a big vision and definitely something you know we hear from talking to customers you know absolutely multi-cloud most of the people there trying to figure out exactly what that means to their cuspid to their companies as well as it is not simple today aught if I want to pull you in you know we've seen you know many you know groups of talented you know development engine developers and engineers sometimes they try Ville in packs so when you look at you know what Amir just talked about the challenge in front of you give our audience a little bit of the understanding of you know the history of what you've been working on and is this you know a you know just turning the crank based on the latest and greatest technologies is that the coming together of some of the pieces that you've been thinking about for many years you know help us under the hood a little bit as to you know that this problem and the talents and what you're moving forward with for the last many many years both Amma and myself and other team are other team members we've been working on large customer networks whether those are service provider networks or whether those are enterprise networks so we have a deep understanding of the challenges they have based over over time so and now as I mentioned customers are transitioning to public clouds they are transitioning to SAS environments and there are a lot of challenges with which they are running into so we decided to take this challenge on and we brought together like a stellar team we have people who joined us from from botella as well as people from other large organizations they've been working on we have people from AWS we have people from Azure via people from other large companies so we have put together a great team we are very well funded and as I mentioned our approach has always always been to work with customers always understand their pain points and solve the real issues which which are having so that's approach we took and that's what we are doing here Adele here yeah so I did if I want to dig down a little bit more and actually we've got a slide I think you'll talk to because we know in networking a lot of the words sound the same you know is this an overlay I'm your said that at the service what gets deployed where is it what are the customers need to do where does this all live so if you could explain this this this diagram here for our audience so what the buildings do is a is a service and it's a cloud services exchange if you look at it and what it is comprised off is east cloud exchange points you can think of these as virtual pops and virtual polos and you can you can decide which region in the world or on the globe you want the DC X is to be spun up you come to our portal since it's consumed as a service you decide like what needs to reside on the CX PS which networking services you need there you can bring your own services or you can consume LTS services and when I talk about services or when I say services these can mean security services other networking services such as load balancers ipam DDI whatnot from the EC XPS you're gonna connect to multiple pounds from here without you as as Enterprise know without you knowing need to know anything about the underlying cloud providers networking concerts so all you do is you give us the requirements you say that you need to connect to this cloud this this is your appointment and we we do it for you so what basically what we are doing is we are virtualizing the clouds networks it's a so in the past we virtualize the when in our previous company and patella if you look at it it's virtualizing plan over different types of transports here we are virtualizing cloud it doesn't matter which public clouds you're sitting on which public cloud you need to connect to you know one service to consume you know one way of doing about networking great III that diagram definitely helped me a lot Amir let's talk my understanding you've got some customers what are some of the early things that they're using this for is this you know hybrid cloud going from their data center to a public cloud we talked about multi cloud does that mean we're actually connecting services between some of the public clouds help us understand what what your customers are seeing and starting to use it's a very interesting questions too we've been talking to multiple customers that we said and without a doubt every single customer that we are talking to has some sort of a multi cloud strategy and the reasons for them to get into multiple clouds could be either their some teams are using some applications which are optimized for a particle cloud one of the customers that we went to they were using one cloud and then acquired a company because of which you know another cloud was brought into the environment so all of a sudden they have a need to very quickly you know integrate those two environments and then there are you know with what's going on in the market today people are going to remote access requirements you know people are working from home and they need to get onto the network very quickly and consume applications which scale much better in the cloud so there's a demand from that perspective right so and in some cases one company becomes let's say Amazon becomes a competitor somewhere and people want to move to another cloud that could be another alternative right so so without fail many people are you know getting into cloud environments and the primary reason that I'm hearing now that many more companies will move into the cloud is going to be regulatory issues right so people are starting to think about pushing all the financial companies the healthcare companies to adopt multiple clouds for redundancy for high availability etc yeah you bring up a great point one of the questions we've been asking for the last couple of years is how is multi-cloud the same or different from what we used to see with multi-vendor aught if you know I think back to you go back you know 10 15 20 years ago and some of the M&A discussions that Omer was talking about you know you know I buy another company Oh what are they doing for their network well throw out their whole network and let's standardize on the vendor of choice that we have because it's better if I can go homogeneous well it's not as easy to do that in the public cloud so help us understand you know it's not as easy as that saying oh all these clouds they have API is they all use similar type type of abstractions and the like you know where does Al Kira really help make things easy for customers when they're when they're doing multi cloud so you know every cloud is doing things differently when it comes to networking so yeah at the end of the day functionality might be the same but how to achieve that how to get that working it's very different between each plug so now what we are seeing with these enterprises is that they have to build a deep understanding of each cloud before they can take on that cloud and nowadays cloud architects are in big demand they don't come cheap either so you don't necessarily just need the personal cloud architect with expertise in one account you need like architects with the expertise and multiple thoughts so so we wanted to solve that problem that's why we took this challenge on and we wanted to make it a make it one way of working with all these clouds so from a cloud architects perspective from a enterprises perspective why can't there be just one way of connecting to all these clouds why do I have to know the details of each cloud as armor said each cloud spring brings its own own its own value in different ways and there is a multi cloud strategy out there so either customers are in multiple pounds or they're looking at at multiple doubt so that's that's a big challenge right now and since what we are offering is as a service it's a unified global multi cloud network and again we're virtualizing the cloud network all right Amir you mentioned early on in the conversation that Acura is well funded you've got Sequoia and kleiner perkins as two of your investors you know definitely companies that look closely and understand the networking space help us understand the basics of the company though coming out of stealth right now is the product available where is it available you know where are you with with customer and deployments certainly we are making our product available on April 15 and many customers are trying it right now they're in the process of deploying it in production these are across industries healthcare manufacturing high-tech you know financial industries so customers span across multiple different verticals in addition to that many service providers are working with us to offer this to extend their capabilities into the cloud so many service providers have been struggling with that and this makes it very easy for them to complement their private connectivity solutions and extend their reach deeper into the cloud so the industry is very excited right now and we are excited because this is an opportunity you know which the cloud migration has brought to the table from networking perspective and if we had thought about it 10 years ago 20 years ago it was just not possible and now we have this capability in the clouds to offer in lastik capabilities do not only provide connectivity but but integrate the services like firewalls scale them up and down and provide proper governance yeah you bring up such a such a big point there I talked before about multi vendor and today you know the network team it's not just oh well I touch all of the gear that I manage as you said it's the service providers public clouds they need to span all those environments we've definitely seen a huge shift in service riders and their relationships with the public cloud over the last five years or so atif I guess that brings up a the important point here who's gonna be managing all this when it comes to a Keira is this the traditional Network person if they've been you know doing land maybe a little bit of an are they going to be doing it is the cloud team you know where does this sit in the you know conversation and jostling of roles that we're seeing as organizations are more and more embracing public cloud so it's Stu it's still a networking solution so what we are seeing working with our customers is that it's a it's a cloud architects who are were very excited when they see our solution now they can see that the network can can can show the same agility which they have been very they're being seen with with compute and storage and and rest of the stuff moving into the cloud so network was always like behind it took a lot lot of effort a lot of work to get the network to extend into clouds meeting all the all the enterprise requirements so now network architects are excited because they it's it's become very simple for them to to move into the cloud or extend their private connectivity into the club I'll give you an example we've been working with some large enterprises and they many of them they don't need to open up a manual or documentation to use our solution so our goal was always to make it so simple that anyone should be able to connect to a cloud without knowing anything about the networking constructs of a given cloud so you just come in you should just be able to give us the requirements that you need need this much capacity you need this much throughput you need B services to front-end the clouds these are your security policies which are global and you need like a multi global transport or global network a multi-level network and you should be able to just bring it up and you should on you should not need like certifications in cloud networking or certifications in using tools to orchestrate cloud connectivity so we are built a very scalable infrastructure which allows the customers to get a service from us or use our service which which meets the requirements all right I'd like to ask both of you you know it's April 2020 you're coming out of stealth you know I'm sure the product has you know all the features that your customers are asking for today but give us a look as we go through the kind of the next six to 12 months armor first from kind of a customer standpoint not if from the technology standpoint what should people be looking at both with your product how you're working with partners and you know really this multi cloud networking landscape our focus is on mid to large size enterprises and depending on which company you talk to their strategy varies to get into the cloud somewhere some are at a very early stage others have moved significant amount of workloads into into the cloud already the reality that we are seeing out there is that the hybrid environment is going to exist for a long long time and that's why we have built a solution which seamlessly integrates their existing wide area networking infrastructure to bring traffic into our solution and then we tie them seamlessly to the cloud and provide integrated services and Governors governance on top of that and they can define their own internal policies based on you know their enterprise needs so that's what we are seeing right now and going into the future I think that industry is going to continue to evolve it's still early the solutions will evolve quite a bit we have a first mover advantage to provide networking as a service and we are so excited to just continue to you know accelerate and help customers to migrate into the cloud as quickly as possible provided with the highest resiliency and security yes so from from a technology perspective as I said like we we believe in working with the customers and solving their use cases we are innovating at a very rapid pace and there are many many different use cases which which we are working on we have some of the use cases which we are which we have delivered so far where we are going out with a certain number of use cases and we will be adding more use cases as we as we go support support for more use cases and we support like all the major clouds right now we will be adding more clouds to our offering we offer a Marketplace on our portal as well so it's a it's a it's a cloud service with a built in marketplace of network services we will be expanding that marketplace as well with more services it's all based on the on the customer requirements and and we prioritize our offerings based on the requirements and there's a there's a lot of work ahead of us also it's just the beginning and as I said we are very excited to solve all these problems and make our customers successful excellent if you're a good setup for armors last slide here so we've got a slide here is that how do customers get started walk us through yeah as I have said we've our goal is to make it as simple as possible you know we live in a different world now where things change very very quickly but the customers just come to our portal they register or our service just like any other SAS based service they you know basically are taken to a canvas where they can draw their infrastructure drop services create policies within minutes and then you know across the globe and then click on the provision button and they can go and have coffee and the full infrastructure comes up literally in less than an hour as a matter of fact in many cases we have seen a comment in around half an hour across the globe this is the type of a solution or capability that the industry has never seen before in the industries we are very proud of bringing the solution to the market well congratulations both of you a lot of work goes into bringing a company to launch before I let you go I do have one last question you two are brothers you've worked together at a number of companies so you know give our audience but you know what it's like and you know what what keeps bringing you back to working together well we are very close family we've always you know you know studied together work together and many different companies we live about five minutes away from each other our kids hang out together we travel together so you know it's kind of interesting you know we've always had a very very close relation yeah this is this is a fifth company I guess where we are working together as he said like we have always worked together we have a we we have a same circle of friends also so so we have very very close to each other so yeah this is one of the best squash players in the country and nowadays he doesn't get much time but he was ranked in the top three for a long time in amateurs in the country well that is awesome well hopefully you know you get to get a little bit of break you know once the company goes into spell they know a lot of work moving forward but I'm Erin atif congratulations and thank you so much for joining us to announce coming out of stealth thank you thank you for having us thank you it's a pleasure to talk to you alright and we definitely look forward to tracking al Kyra in the future as that they move forward with adoption with their customers and their solution I'm still minimun and as always thank you for watching the queue [Music]

la from Las Vegas it's the cube covering AWS reinvent 2019 brought to you by Amazon Web Services and Vinum care along with its ecosystem partners hello everyone welcome to the cube we're here live in Las Vegas for AWS reinvent 2019 I'm John Farrar your host is silicon Angles flagship the cube we're extract a signal noise leader in event coverage with day Volante my co-host and justin warren tech analysts Forbes contributor guru of cube host guys keynote for J&E jassie first of all I don't know how he does it he's just like continues hissing Marc loved the live music in there but a slew of announcements this is a reinvention of AWS you can tell that they're just essentially trying to go the next level on what the cloud means how they're gonna bring it to customers and you know they've been criticized for you know kind of nut I won't say falling behind I could say Microsoft's been probably praised more for catching up and it's been a lot of discussion around that the loss of the Jedi contract variety of enterprise wins Microsoft has the field Salesforce Google's just kind of retooling but Amazon clearly the leader with a little pressure for the first time in the rearview mirror they've got someone on their on their tail win and Microsoft's far back but this isn't a statement from from chassis and Amazon of okay you want to see the Jets we're gonna we're gonna turn on the Jets and blow pass everybody Jesse gets cocky self Justin what do you think yeah so a lot of signaling to enterprise that it's safe to come here it's this is where you can have everything that you need to get everything that you need done you can get all of it in one place so there there is a real signal there to say Enterprise if you want to do cloud there's only one place to do cloud enterprise customers they tried out some big names Goldman Sachs not a small enterprise they had all the classic born in the cloud but you know we put out this concept on I'm on our Silicon angle post called reborn in the cloud almost born-again enterprise you start to see the telegraphing of what their core message is which is transform just don't kick the tires and fall into the Microsoft trap go with em is on and transform your business model transform your miss not just run IT a better way than before well yeah I mean I'm impressed they got two CEOs the CEO of Goldman Sachs David Solomon the CEO of Cerner coming to the show it's kind of rare that the CEO of your customer comes to the show I guess the second thing I'd say is you know Amazon is not a rinse and repeat company at these shows although they are when it comes to shock and awe so they ticked the Box on shock and awe but you're right John they're talking a lot about transformation I sort of think of it as disruption here's what I would say to that Amazon has a dual disruption agenda one is its disrupting the horizontal technology stack and 2 its disrupting industries it wants to be the platform of which startups in particular but also incumbents can disrupt industries and it's in their DNA because it's in Amazon's DNA and I think it's the last thing I'll say as Amazon is the reach a Amazon retailers the you can buy anything here store and now to your point Justin Amazon Web Services is you can get AWS anywhere at the edge and a little mini data centers that they're built on outpost and of course in the cloud all right I want to get you guys reactions a couple things I saw and I want to just analyze the keynote one as we saw Jesse come out with the transformation message that's really more of their posture to the market you should be transforming we're gonna take Amazon as a center of gravity and push it out to the edge without post so kind of a customer company posture there on the industry then you had the announcements and I thought that the sage maker studio was pretty robust a lot of data and announcements so you had the transformation message a lot of core data and then they kind of said hey we're open we got open source databases we got kubernetes and multiple flavors a couple steers from the Twitter crowd on that one and then finally outpost with the edge where they're essentially you know four years ago Dave they said no more data centers in ten years now they're saying we're gonna push Amazon to the your datacenter so you know a posture for the company a lot of data centric data ops almost program and build I'm also DevOps feel to it what's your reaction to that I think the most interesting part for me was the change there was a bit of a shift there I think he made the statement of rather than bringing the data to the computer we want to bring the compute to the data and I think that's that's acknowledging reality that data has gravity and it's very difficult for enterprises particularly if you've already invested a lot in building a data Lake so being able to just pick that up and then move it to any cloud nothing let alone AWS just moving that around is is a big effort so if you're going to transform your business you have to kind of rethink completely how you address some of these issues and one of that would be well what if rather than let's just pick everything up and move it to cloud what if we could actually do something a little bit better than that and we can pick and choose what we want to suit our particular solution and your point Dave I think that's where Amazon strength comes from is it they are the everything store so you can buy whatever you want be at this tiny little piece that only five companies need or the same thing that everyone else on the planet needs you can come and buy everything from us and that's what I think they're trying to signal to an organization that says look if you want to transform and you're concerned that it'll be difficult to do we've got you we've got something here that will suit your needs and we will be able to work with you to transform your business and we're seeing you know Amazon years ago we wouldn't talk about hybrid and now they're going really all-in on hybrid and it's not outpost is no longer just this thing they're doing with VMware it's now a fundamental piece of their infrastructure for the edge and I think the key point there is the the edge is going to be one with developers and Amazon is essentially bringing its development platform to the edge without posts as the the underpinning and I like the strategy much much better than I like what I'm seeing from some of the guys like HP and Dell which is they're throwing boxes you know over the fence with really without a strong developer angle your thoughts I mean my my big takeaway was I think this is key knows about a next-generation shift on the business model but that's the transformation he didn't come out and say it I said it in my post but I truly believe if you're not born in the cloud or reborn in the cloud you'll probably be out of business and as a startup were to ask them of the VCS this question how do you go after and target some of those people who aren't gonna be reborn in the cloud to have the scale advantage but the data announcements was really the big story here because we look at DevOps infrastructure as code programming infrastructure we've seen that that that's of now an established practice now you start to see this new concept around data ops some people call it AI ops whatever but Dana now the new programmability it's almost a devops culture - data and I think what got my attention the most was the IDE for stage maker which kind of brings in this cool feature of what everyone was which is I want machine learning but I can't hire anybody and I got to make I got a democratized machine learning I got to make application developers get value out of the data because the apps need to tap the data it's got to be addressable so I think this is a stake in the ground for the next five to ten years of a massive shift from increasing the DevOps mission to add a layer making that manageable multiple databases he's totally right on that it's not one database if you want time series for real-time graph for you know network constructs it's pick your database you know that shouldn't be it inhibitor at all I think the data story is real that's the top story in my mind the data future what that's going to enable and then the outpost is just a continuation of Amazon realizing that the center of the cloud is not the end game it's just the center of gravity and I think you gonna start to see edge become really huge I mean I count ten into ten purpose-built databases now and jesse was unequivocal he said you gotta have the right database tool for the right job you're seeing the same thing with their machine learning and AI tools it's been shocking dozens and dozens of services each with their own sort of unique primitives that give you that flexibility and so where you can disagree with the philosophy but their philosophy is very clear we're gonna go very granular and push a lot of stuff out there I think there's two bits at play there that I can see you know I think you're right on the data thing and something that people don't quite realize is that modern data analysis is programming like it's code your data scientists know how to code so there was a lot of talk there about notebooks going in there like they love their notebooks they love using different frameworks to solve different problems and they need to be able to use for this one I need tens of flow for another one I might need MX net yeah so if you couple that that idea that we need to it's all about the data and you couple that with developers and AWS knows developers really really well so you've got modern enterprises lot wanting to do more with the data that they have the age or business problem of I've got all this information I need to process I need to do be out bi I need to do data analysis and you couple that with the Pala that iws has with developers I think it's a pretty strong story then you know in my interview with Jesse I asked him the question and I stole the line from Steve Moe Mulaney from aviatrix you take the tea out of cloud native it's cloud naive and I think what I've been seeing is a lot of customers have been naive about what cloud is and it's actually been buying IT and so they really don't are not sensitive to the capabilities message so I asked Jeff see I'm like you got these capabilities that's cool if you want to go to the store and buy everything or look at everything and buy what you want and construct and transform check no problem I buy that however some customers just want a package solution and Amazon has not always been great on having something packaged for customers so he kind of addressed that and this might be an Achilles heel for Amazon as Microsoft has such entrenched sales sales presence that they might be pushing a solution that frankly customers might not care about capabilities we did see one bit where there was a little bit of a nudge towards is fees and and systems integrators and I think that that really for me is there needs to be a lot more work done by Amazon there because that's what Enterprise me enterprise is used to dealing with systems integrators that will help them to use the raw materials that ados provides to solve that promote you said there are two segments of developers and customers one that wants all the low level building blocks and others want simpler faster results with abstractions aka packaging so they're going down the road but again they're not shy don't like hey we're just going to continue to build we're not going to try to move off our trajectory they're gonna stay with adding more power and frankly some digs at snowflake I fought with red shift and I thought the dig to the kubernetes community with we code our own stuff wink wink we don't have to slow down was a nice jab at the CN CF I thought because he's saying hey you know what we're not in committees deciding features which is the customers and implementing them so a kind of a jab well sure that's gonna rapid a I would say the snowflake is sort of a copycat separating compute from stores that's what snowflakes has been doing forever but he did take direct jabs at IBM Oracle and obviously Microsoft with with Windows so I like to see that you know usually Jessie doesn't do that it's good take the gloves so much so many announcements out there you got to go to silk and angled comm will have all the stories but one of the top stories coming into the reinvent that we didn't hear anything about but if you squint through and connect the dots on Jessie's keynote it is pretty evident what the strategy is and that's multi-cloud so I'll see multi-cloud is a word that Amazon is not using at all onstage as you can tell they don't really they're in well they're one cloud they don't really care about the other clouds but their customers do so guys multi cloud is a legit conversation how they get multi cloud is debatable acquisition sprawl by the end of the day multiple clouds is reality I think Jessie was kind of predicting and laying down some early narratives around the multi cloud story by saying hey we have more capabilities we're faster we're doing more stuff so I think he's trying to cede the base on the concept of hey if you want to go look at other clouds try to go apples to apples NIT that other than that he didn't really address at all multi-cloud what do you guys think about multi cloud yeah what it's pretty much that if you're gonna have multiple clouds at least one of them's gonna be AWS so they're gonna get some of your money if we came a bi can't get all your money I'll get at least get some of your money that's reasonable but I think part of the multi cloud conversation is that enterprises are actually trying to clarify their existing way of doing things so cloud isn't a destination it's not like a it's not a physical location it's a state of mind it's a way of operating things an enterprise that that's that's the transformation part that enterprises are trying to do so transform the way that they operate themselves to be more cloud like so part of the multi cloud piece I think that people are kind of missing is well it's not just Amazon or some of its competitors its existing on-site infrastructure and making that into a cloud which i think is where something like outpost becomes a really strong proposition and I've said a million times multiplied cloud is more of a symptom than it is a strategy that'll start to change they will see an equilibrium there you know right cloud for the right job but today it's a problem that CIOs are asked being asked to clean up the crime scene all right let's wrap up by summarizing the keynote each of you guys give me your take on I'll start I think this was a inflection point for AWS and Jesse in the sense of they now know they have to go the next gen loud it's Amazon enterprise it's data it's outpost it's all these things it's truly next-gen I think this is going to be all about data it's all gonna be about large-scale infrastructure and data scaling and with edge and outpost I think is really an amazing move for them in the sense that's gonna probably put in motion another five to ten years of continuing architectural reshipping and I think that if you're not born in the cloud or reborn in the cloud you're gonna be naive to the fact that you're not gonna have the capabilities to be success when I think that's going to be an opportunity for entrepreneurs and for companies pivoting into enterprises so I think this goes will go might go down as one of the most pax keynotes but I think it'll look back as one of the instrumental transitions for Amazon so I think he did a good job beginning and to rush 30 announcements in three hours marathon but overall I thought he did a great job I think I would agree Jesse always does a good job he's giving a message to you know CEOs as opposed to the CIO and he had two CEOs on stage I thought there was quite a gap between you know that message of transformation and then sort of geeking out on all the new services so there's still some work to be done there but I think it's a lot of developers in the audience I'm seeing them tell your boss to get on the train it's a very hard keynote to serve both audiences but so it's a start but there's a lot of work to be done there Justin yeah I agree with that I think this is probably one of the first keynotes maybe last year but certainly this year there's like AWS is very serious about enterprise and is trying to talk to enterprise a lot more than it ever has it still talks to developers but we didn't see anywhere near as much interesting in kind of the startup ecosystem it's like no no cloud is for serious companies doing serious work and I think that we're just going to see Amazon talking about that more and more and more because that's where all the money is yeah next-generation cloud new architectures all about the enterprise guys this is the cube opening day for three days of wall-to-wall coverage keynote analysis from Andy Jessie and Amazon Andy Jessie will be on Thursday at 3 o'clock we got a lot of top Amazon executives will who'll help us open and unpack all these to make mega announcements stay with us for more cube coverage and go to Silicon angle comm cube net for the videos be back back after this short break [Music]

>> Narrator: Live, from San Francisco, celebrating 10 years of high-tech coverage, It's theCUBE! Covering VMworld 2019. Brought to you by VMware, and its ecosystem partners. >> And, welcome back here on theCUBE, we're at the Moscone Center here at downtown San Francisco. Gorgeous day outside, by the way. Picture perfect day. Chamber of Commerce weather, but a lot of big news happening inside here for VMworld 2019, along with John Troyer. I'm John Walls, we're joined by Pierluca Chiodelli, who's the Vice President of Product Management at Dell EMC. And, Pierluca, good to see you, Sir. >> Thank you, it's awesome to be here. >> Great, thanks for being here. And Muneyb Minhazuddin, whose the VP of solutions product marketing at VMware. And Muneyb, I know you're right just hot off the presentation stage. >> Yes I am. >> Catch your breath, it's all going to be fine. How was your audience? I'm sure standing remotely. >> Yeah, it was thirteen hundred plus >> Excellent, yeah. Been a big week, already. >> Of course it has, yeah. >> For you and your team. So, first off, let me just, let's step back, talk about the vibe of the show, the theme of the show we saw Pat on the stage. >> Muneyb: Perfect. >> About an hour and a half this morning, just your thoughts about day one and the big announcements that VMware's been making. >> It's been a great week, and it's actually been a great approaching week. As you know, on Thursday we announced intent and acquire both Pivotal and Carbon Black for close to about $5,000,000,000. So, that's, kind of a big announcement by itself, and then how do you kind of bring in and keep day one where you're not too focused on those two, but get the narrative of VMworld across. And really, you know, where we have, you know, CUBE has been with us on this journey for a long time. >> Right. >> We've seen that data center shift into kind of two tangents. One is, you know, workloads into data center break out into public clouds. Second, rerouting into cloud native applications. And, if you've seen our strategy wall when that was kind of the key messages. Hey, we're embracing both the modern app development, the focus on Kubernetes and Tanzoo announcement, was all about to say, "VMware platforms ready "for the breakout of both tangents." First, Cloud Native, we've got Kubernetes, we're bringing it right into vSphere, so that everybody in the audience can support it. Second, the breadth of our cloud everywhere, right, so, we've gone from Amazon to IBM to Google to Ajour. So, it'll give you the infrastructure for your workloads to be your choice. Modernize or migrate. (chuckles) That was a key message for us to kind of land today. For a lot of our audience who are kind of stuck in that same piece of, "What am I doing with my workloads? "What is that platform I got to build on?" And, you know, the key foundational platform being VMware Cloud Foundation. Right, that was our strategy, and I think last year we called out VMware Cloud Foundation in Pat's keynote, because I wrote it 44 times. (laughs) (group laughter) We didn't do it that many times, this time. We only said that's the platform that lands in Amazon, GCP, Ajour, IBM, and 4,200, you know, cloud provider partners. That gives you really that public cloud extension. The second part being modern apps, Kubernetes is a new, kind of, modern app development platform, vSphere is embedded into that project pacific and the whole Tanzoo announcement, right? So, really, a powerful message, what do you think? Was that successfully landed? >> I think so. John, do you feel good about what you heard today? >> Yeah, absolutely, I think VCF is super interesting. I'm also kind of, so there was an announcement today also about the Dell Technologies Cloud Validated Designs for using VCF. So, VCF the layer, which is kind of the VMware stack with some extra magic in it, that can be in, can make a private hybrid cloud, you know, everywhere. So, talk to us a little bit about Dell Technologies Cloud. As I call it, "DTC." The, it's a lot, there's a lot of stuff in that as well, so, but we have two very complicated solutions stacks that are, we're talking about now, so. >> Yeah, absolutely. >> Can you talk a little bit about the validated design and what came out of that? >> Absolutely, so before we go into the validated design, I think it's very important as Muneyb said. When we think about the Dell Technology Cloud, really, it's a component of the best (murmurs) technology from our storage, networking, and also compute, but we did the VMware VCS on top. So, we work very closely with VMware, and today we are announcing today the Cloud Validated Design. As we announce at the Dell Technology World in May, we said Dell Technology Cloud is this, now we want to tell to the people, how you can easily deploy this. What is make this tangible? So, what we are doing today is rapid time to value. We did design and pretested configuration, that we put in Dell Technologies Cloud Validated Design, as we said. The other important things as Muneyb said, right? It's... And, I heard this also from theCUBE. There was a debate with Stu and other people about, what is the Cloud? How I deploy the Cloud? When we think about Dell Technologies we speak with different peoples, and two set of peoples. One is the app, right? The Cloud app, all the app people that, they want to build have all the automation, DevOps operation and all these things. But, behind those people, there's still an infrastructure. So, we are speaking on both things. So, it's very important this paradigm is there, where you can have people that they can consume the technology, and understand how to build the infrastructure to be automated, and build that automation for the Cloud. So, that's what is the Dell Technologies Font Validation Design. Right. So, one of the biggest things here that we announced, is not only the Cloud Validation Design. It's the first one but also the ability to have compute, storage and network together, and also use it primary storage as a primary citizen of the VCF. So, we should talk about that later but that's-- >> Absolutely, and I think to catch onto that, you know, talking about the applications et cetera, you know, again, in the evolution of Cloud, and we've been on the journey for 10 years is, we've had, the first few years of the Cloud journey was, felt a little like a one way street, which was, kind of meant where people were shutting down data centers and going to all these public cloud providers, was always a one-way street. Now, VMware, and if you followed us closely, we had a service call VMware, you know VCHS, which is VMware Hybrid Cloud Service before the vCloud Air and then we came out with this solution, right? The idea was, we thought there's going to be movement back-and-forth but it wasn't the case. People were seriously shutting down and going one way. As we made all these partnerships of you know, Amazon, IBM, we started seeing, and you heard stories of IHS, Freddie Mac on stage where they take six weeks to move 100 applications one way into the Cloud, customers started asking us some questions, say, 'If it's so easy to go that way, is it also that easy to bring it back?' >> Come back! >> Right? And, that kind of lead to the whole kind of Dell partnership, Dell announcement within the Dell Cloud Foundation, you know, VMware Cloud Foundation, Dell Technologies Cloud Platform to say that, "Hey, it's actually..." There's a notion of not going from hardware-specific, you know, just high-tuned for workloads to commodity hardware in the Public Cloud. There's now a need for having common hardware platform on both on-PRAM, off-PRAM because there is a need for customers to take EC2 workloads or, you know, Ajour workloads and bring it on PRAM again. That was just a notion of how fast it is. I add that point because it is so critical to know that your hardware is performing in tuned, to perform for a high business critical applications. People forgot about them the first few phases of going to the Cloud, and now as they think about a hybrid, true hybrid Cloud nature, they want optimal performance in the software layer, in the hardware layer. You know, hence our announcement of Dell Technologies Cloud, Cloud Foundation, Validated Design. It's really supporting that customer notion. >> So, it's like this optimal, or maximized flexibility is what you're trying to give people. I mean, is that-- >> Pierluca: With the Cloud simplicity, that's really the key. >> But what drives that? I know that you have, you've, you know, whether you're on-PRAM or you're off-PRAM, you're going to decide what workload's going to go on what space on, so forth, but is some of that kind of hedging bets for future workloads because you can't predict where they're going to be done or where you want them done? Or is it just providing flexibility today, and let's not worry about tomorrow? You know, it just seems like there's a lot of runway here, if you will. >> Yeah, and I think there's no right or wrong answer. One of the big workshops I do with our customers is really kind of say have you figured out what's your three to five-year application strategy? Because again, in that first phase of that fast migration to the Public Cloud, people were just like CIOs I know, it's like, I have a cloud for strategy, what does that mean? I'm shutting down all data centers, I'm going to the Cloud. Right or wrong, and that's my Cloud First strategy. Now, what they've come to realize is not all workloads work effectively in the Cloud, right? So, they kind of like, hey, put an application strategy to say what are the most optimal applications that will get the benefit of Cloud? These are like, e-commerce retail. They have to have, you know, Black Friday, expanding elasticity. If you got no slow, mundane, you know backend processes doing batch processes of massive storage of in a bank ledger in the back end, they're not going to get that elasticity. I know what it is, I know how many, you know, batch processes I got to run. So, people are getting smarter about which ones get the benefit of, you know, modern app development, or Cloud elasticity, which ones don't really need to have that. So, we've seen best practice customers actually have a very good app strategy, three to five years, and then decide how much of my app strategy is gone to the right, you know, or gone to the left, right? It's pretty much to say, "I don't have to change." 60, 70% of my Eastern European customers, their banking ledgers are still on mainframes. They're not in a hurry to go to the Cloud, whereas, you know Fintech on the East Coast is going, "I'm going to the, I'm going to the Cloud", right? So, it's really that strategy that's, they should take the app strategy and decide what the infrastructure strategy is on the top shelf. >> I think from the storage business, we see that really clear, right? The app is definitely what is moving the things, right? It's not, people they're not thinking anymore because the transformation is in the way that you consume the infrastructure. They not thinking anymore about what I put there, but is about what app I need to run, how I build my app. So, it's the environment. And, I don't think personally I meet a lot of customer. There is not one right way or wrong way, it's an end, right? As you can see also in VCF we have Vsend, VxRail and primary storage. If you look at two years ago, we will be sitting here and say, you know, "It's only this, not the other things." When we, I been in governor conference, three years ago was like, it's all Cloud. It's reality is the world, the information technology world is always the same, where is a natural genius things. Because people, they need to have the trust, right? You cannot run your entire things on something that you don't know or you didn't prove. So, what we give here today with our technology is the flexibility. You can have a Cloud approach, but use the trusted PowerMax, for example, in conjunction with Vsend, in conjunction with the Unity. So, not all these is the proof that you can preserve your investment. But, is the proof that you can start to build those up. And, if you've seen what paths say today, then those app can live everywhere. So, you can go, you can move, it's much easier to move, and you can just trust what you're doing. >> And, you hit an important point on the move part, right? And, people are so easy, like, "Hey I moved a thousand applications in six weeks "to VMC and AWS." The fundamental notion where that was not possible before, was compute, network, storage. Like, we've been doing vSphere for a long time, you know that. And, it wasn't that easy because what used to happen is people thought, "Hey, a virtualized computer, I can move it." But, what did not happen as you moved that, was your databases, you know, your storage, rules didn't follow you into the Cloud. Your networking QOS and, you know, policies, and you know, priorities didn't follow you into the Cloud. So, that was kind of like, you know, you know, I'm an Australian, so it was a half-assed solution, right? (group laughing) So bear with my language, right. It was a half-assed solution, but really what needs to happen is your compute, your network, your storage has to all work together. And, that's where Cloud Foundation was powerful. And, what we're lighting with this Validated Designs is also that capability that your computer, or storage is one unit from a app. Once you package it and make it available in all the platforms, then that migration becomes six weeks, two weeks to move that. Because once you break it apart, it's a nightmare. There's not a lot of folks who have survived database migrations. (laughs) >> I mean maybe Pierluca, you can kind of sum us up here. This conversation's been a lot around evolution, right? And, there's also been an evolution of data center design and what to expect with that, you know, just buying things off the shelf and getting a Var and, you know, the VMAX, and we've been through this whole, and now, we've talked about VxRail, which can be part of this solution. But, can you talk, just, maybe, take us in, take us out with the, or into the future with the Dell Technologies Cloud as the idea of the Validated Design, the idea of this stack from Dell Technologies in storage et cetera, what can we expect in the near future? And, how much guidance will folks get? >> Yeah, absolutely. So, without breaking any NDA things, but this is only the first step. So, the Cloud Validated Design is just the first step where we said, 'Okay, we are tasked in this, "we putting this together." We are working very closely to also solve the entire things that VCF allow you to do first day deployment, allow you to expand the infrastructure, and allow you also to do life cycle management. For example, with the VxRail we already have the life cycle management part. We are working in way to do that also for our storage and other things. So, if you think about that then it becomes as you said, all the policy we put, like with Vworld, will be strategically in that sense, the policies can be carried over. So, then you can go to VMC, you can go to another place where the software and infrastructure can move back. So, because people can do this on PRAM, a replicate exactly but not only replicate the application, but replicate the (murmurs). What do you do on the QOS, all these key things that makes people running enterprise application, right? So that's, I think, it's very exciting moment. I think it's just the starting of this dream. >> Absolutely. >> Gentlemen, thanks for the time. >> Thank you. >> And you're all, you paint a pretty exciting future, don't ya? >> I hope so. >> So, I can't wait to look forward to even VMworld 2020? >> Wait 'til Barcelona, come on? (laughs) >> All right, well I'm not making that road trip, so unfortunately-- >> We going to more out there. >> But, Barcelona's going to be good. >> Yes, thank you for having us. >> No, I'm not the best guy, so, all right good. Hey, gentlemen, thank you for the time. >> Thank you >> Thank you. >> I appreciate it very much, great discussion. >> Thank you very much. >> Thanks for having us. >> Back with more from San Francisco right after this. (techno music)

[Music] when welcome to the special exclusive cube conversation here in Palo Alto in our studios I'm John for your host of the cube we have a very special guest speaking for the first time around some alleged alleged accusations and also innuendo around the Amazon Web Services Jedi contract and his firm c5 capital our guest as Andre Pienaar who's the founder of c5 capital Andre is here for the first time to talk about some of the hard conversations and questions surrounding his role his firm and the story from the BBC Andre thanks for a rat for meeting with me John great to have me thank you so you're at the center of a controversy and just for the folks who know the cube know we interviewed a lot of people I've interviewed you at Amazon web sources summit Teresa Carl's event and last year I met you and bought a rein the work you're doing there so I've met you a few times so I don't know your background but I want to drill into it because I was surprised to see the BBC story come out last week that was basically accusing you of many things including are you a spy are you infiltrating the US government through the Jedi contract through Amazon and knowing c-5 capital I saw no correlation when reading your article I was kind of disturbed but then I saw I said a follow-on stories it just didn't hang together so I wanted to press you on some questions and thanks for coming in and addressing them appreciate it John thanks for having me so first thing I want to ask you is you know it has you at the center this firm c5 capital that you the founder of at the center of what looks like to be the fight for the big ten billion dollar DoD contract which has been put out to multiple vendors so it's not a single source deal we've covered extensively on silicon angle calm and the cube and the government the government Accounting Office has ruled that there are six main benefits of going with a sole provider cloud this seems to be the war so Oracle IBM and others have been been involved we've been covering that so it kind of smells like something's going along with the story and I just didn't believe some of the things I read and I want to especially about you and see five capitals so I want to dig into what the first thing is it's c5 capital involved in the Jedi contract with AWS Sean not at all we have absolutely no involvement in the Jedi contract in any way we're not a bidder and we haven't done any lobbying as has been alleged by some of the people who've been making this allegation c5 has got no involvement in the general contract we're a venture capital firm with a British venture capital firm we have the privilege of investing here in the US as a foreign investor and our focus really is on the growth and the success of the startups that we are invested in so you have no business interest at all in the deal Department of Defense Jedi contract none whatsoever okay so to take a minute to explain c5 firm I read some of the stories there and some of the things were intricate structures of c5 cap made it sound like there was like a cloak-and-dagger situation I want to ask you some hard questions around that because there's a link to a Russian situation but before we get to there I want to ask you explain what is c5 capital your mission what are the things that you're doing c5 is a is a British venture capital firm and we are focused on investing into fast-growing technology companies in three areas cloud computing cyber security and artificial intelligence we have two parts our business c5 capital which invests into late stage companies so these are companies that typically already have revenue visibility and profitability but still very fast-growing and then we also have a very early stage startup platform that look at seed state investment and this we do through two accelerators to social impact accelerators one in Washington and one in Bahrain and it's just size of money involved just sort of order magnitude how many funds do you have how is it structure again just share some insight on that is it is there one firm is there multiple firms how is it knows it work well today the venture capital business has to be very transparent it's required by compliance we are a regulated regulated firm we are regulated in multiple markets we regulated here in the US the sec as a foreign investor in london by the financial conduct authority and in Luxembourg where Afonso based by the regulatory authorities there so in the venture capital industry today you can't afford to be an opaque business you have to be transparent at all levels and money in the Western world have become almost completely transparent so there's a very comprehensive and thorough due diligence when you onboard capital called know your client and the requirements standard requirement now is that whenever you're onboard capital from investor you're gonna take it right up to the level of the ultimate beneficial ownership so who actually owns this money and then every time you invest and you move your money around it gets diligence together different regulators and in terms of disclosure and the same applies often now with clients when our portfolio companies have important or significant clients they also want to know who's behind the products and the services they receive so often our boards our board directors and a shell team also get diligence by by important clients so explain this piece about the due diligence and the cross country vetting that goes on is I think it's important I want to get it out because how long has been operating how many deals have you done you mentioned foreign investor in the United States you're doing deals in the United States I know I've met one of your portfolio companies at an event iron iron on it iron net general Keith Alexander former head of the NSA you know get to just work with him without being vetted I guess so so how long a c5 capital been in business and where have you made your investments you mentioned cross jurisdiction across countries whatever it's called I don't know that so we've been and we've been in existence for about six years now our main focus is investing in Europe so we help European companies grow globally Europe historically has been underserved by venture capital we on an annual basis we invest about twenty seven billion dollars gets invested in venture capital in Europe as opposed to several multiples of that in the US so we have a very important part to play in Europe to how European enterprise software companies grow globally other important markets for us of course are Israel which is a major center of technology innovation and and the Middle East and then the u.s. the u.s. is still the world leader and venture capital both in terms of size but also in terms of the size of the market and of course the face and the excitement of the innovation here I want to get into me early career because again timing is key we're seeing this with you know whether it's a Supreme Court justice or anyone in their career their past comes back to haunt them it appears that has for you before we get there I want to ask you about you know when you look at the kind of scope of fraud and corruption that I've seen in just on the surface of government thing the government bit Beltway bandits in America is you got a nonprofit that feeds a for-profit and then what you know someone else runs a shell corporation so there's this intricate structures and that word was used which it kind of implies shell corporations a variety of backroom kind of smokey deals going on you mentioned transparency I do you have anything to hide John in in in our business we've got absolutely nothing to hide we have to be transparent we have to be open if you look at our social media profile you'll see we are communicating with the market almost on a daily basis every time we make an investment we press release that our website is very clear about who's involved enough who our partners are and the same applies to my own personal website and so in terms of the money movement around in terms of deploying investments we've seen Silicon Valley VCS move to China get their butts handed to them and then kind of adjust their scenes China money move around when you move money around you mentioned disclosure what do you mean there's filings to explain that piece it's just a little bit so every time we make an investment into a into a new portfolio company and we move the money to that market to make the investment we have to disclose who all the investors are who are involved in that investment so we have to disclose the ultimate beneficial ownership of all our limited partners to the law firms that are involved in the transactions and those law firms in turn have applications in terms of they own anti-money laundering laws in the local markets and this happens every time you move money around so I I think that the level of transparency in venture capital is just continue to rise exponentially and it's virtually impossible to conceal the identity of an investor this interesting this BBC article has a theme of national security risk kind of gloom and doom nuclear codes as mentioned it's like you want to scare someone you throw nuclear codes at it you want to get people's attention you play the Russian card I saw an article on the web that that said you know anything these days the me2 movement for governments just play the Russian card and you know instantly can discredit someone's kind of a desperation act so you got confident of interest in the government national security risk seems to be kind of a theme but before we get into the BBC news I noticed that there was a lot of conflated pieces kind of pulling together you know on one hand you know you're c5 you've done some things with your hat your past and then they just make basically associate that with running amazon's jedi project yes which i know is not to be true and you clarified that joan ends a problem joan so as a venture capital firm focused on investing in the space we have to work with all the Tier one cloud providers we are great believers in commercial cloud public cloud we believe that this is absolutely transformative not only for innovation but also for the way in which we do venture capital investment so we work with Amazon Web Services we work with Microsoft who work with Google and we believe that firstly that cloud has been made in America the first 15 companies in the world are all in cloud companies are all American and we believe that cloud like the internet and GPS are two great boons which the US economy the u.s. innovation economy have provided to the rest of the world cloud computing is reducing the cost of computing power with 50 percent every three years opening up innovation and opportunities for Entrepreneurship for health and well-being for the growth of economies on an unprecedented scale cloud computing is as important to the global economy today as the dollar ease as the world's reserve currency so we are great believers in cloud we great believers in American cloud computing companies as far as Amazon is concerned our relationship with Amazon Amazon is very Amazon Web Services is very clear and it's very defined we participate in a public Marcus program called AWS activate through which AWS supports hundreds of accelerators around the world with know-how with mentoring with teaching and with cloud credits to help entrepreneurs and startups grow their businesses and we have a very exciting focus for our two accelerators which is on in Washington we focus on peace technology we focus on taking entrepreneurs from conflict countries like Sudan Nigeria Pakistan to come to Washington to work on campus in the US government building the u.s. Institute for peace to scale these startups to learn all about cloud computing to learn how they can grow their businesses with cloud computing and to go back to their own countries to build peace and stability and prosperity their heaven so we're very proud of this mission in the Middle East and Bahrain our focus is on on female founders and female entrepreneurs we've got a program called nebula through which we empower female founders and female entrepreneurs interesting in the Middle East the statistics are the reverse from what we have in the West the majority of IT graduates in the Middle East are fimo and so there's a tremendous talent pool of of young dynamic female entrepreneurs coming out of not only the Gulf but the whole of the MENA region how about a relation with Amazon websites outside of their normal incubators they have incubators all over the place in the Amazon put out as Amazon Web Services put out a statement that said hey you know we have a lot of relationships with incubators this is normal course of business I know here in Silicon Valley at the startup loft this is this is their market filled market playbook so you fit into that is that correct as I'm I get that that's that's absolutely correct what we what is unusual about a table insists that this is a huge company that's focused on tiny startups a table started with startups it double uses first clients with startups and so here you have a huge business that has a deep understanding of startups and focus on startups and that's enormous the attractor for us and terrific for our accelerators department with them have you at c5 Capitol or individually have any formal or conversation with Amazon employees where you've had outside of giving feedback on products where you've tried to make change on their technology make change with their product management teams engineering you ever had at c5 capital whore have you personally been involved in influencing Amazon's product roadmap outside they're just giving normal feedback in the course of business that's way above my pay grade John firstly we don't have that kind of technical expertise in C 5 C 5 steam consists of a combination of entrepreneurs like myself people understand money really well and leaders we don't have that level of technical expertise and secondly that's what one our relationship with AWS is all about our relationship is entirely limited to the two startups and making sure that the two accelerators in making sure that the startups who pass through those accelerators succeed and make social impact and as a partner network component Amazon it's all put out there yes so in in a Barren accelerator we've we formed part of the Amazon partner network and the reason why we we did that was because we wanted to give some of the young people who come through the accelerator and know mastering cloud skills an opportunity to work on some real projects and real live projects so some of our young golf entrepreneurs female entrepreneurs have been working on building websites on Amazon Cloud and c5 capital has a relationship with former government officials you funded startups and cybersecurity that's kind of normal can you explain that positioning of it of how former government if it's whether it's US and abroad are involved in entrepreneurial activities and why that is may or may not be a problem certainly is a lot of kind of I would say smoke around this conversation around coffin of interest and you can you explain intelligence what that was it so I think the model for venture capital has been evolving and increasingly you get more and more differentiated models one of the key areas in which the venture capital model is changed is the fact that operating partners have become much more important to the success of venture capital firms so operating partners are people who bring real world experience to the investment experience of the investment team and in c-five we have the privilege of having a terrific group of operating partners people with both government and commercial backgrounds and they work very actively enough firm at all levels from our decision-making to the training and the mentoring of our team to helping us understand the way in which the world is exchanging to risk management to helping uh portfolio companies grow and Silicon Valley true with that to injuries in Horowitz two founders mr. friendly they bring in operating people that have entrepreneurial skills this is the new model understand order which has been a great source of inspiration to us for our model and and we built really believe this is a new model and it's really critical for the success of venture capitals to be going forward and the global impact is pretty significant one of things you mentioned I want to get your take on is as you operate a global transaction a lots happened a lot has to happen I mean we look at the ICO market on the cryptocurrency side its kind of you know plummeting obsoletes it's over now the mood security children's regulatory and transparency becomes critical you feel fully confident that you haven't you know from a regulatory standpoint c5 capital everything's out there absolutely risk management and regulated compliance and legal as the workstream have become absolutely critical for the success of venture capital firms and one of the reasons why this becomes so important John is because the venture capital world over the last few years have changed dramatically historically all the people involved in venture capital had very familiar names and came from very familiar places over the last few years with a diversification of global economic growth we've seen it's very significant amounts of money being invest invested in startups in China some people more money will invest in startups this year in China than in the US and we've seen countries like Saudi Arabia becoming a major source of venture capital funding some people say that as much as 70% of funding rounds this year in some way or another originated from the Gulf and we've seen places like Russia beginning to take an interest in technology innovation so the venture capital world is changing and for that reason compliance and regulation have become much more important but if Russians put 200 million dollars in face book and write out the check companies bright before that when the after 2008 we saw the rise of social networking I think global money certainly has something that I think a lot of people start getting used to and I want on trill down into that a little bit we talked about this BBC story that that hit and the the follow-on stories which actually didn't get picked up was mostly doing more regurgitation of the same story but one of the things that that they focus in on and the story was you and the trend now is your past is your enemy these days you know they try to drum up stuff in the past you've had a long career some of the stuff that they've been bringing in to paint you and the light that they did was from your past so I wanted to explore that with you I know you this is the first time you've talked about this and I appreciate you taking the time talk about your early career your background where you went to school because the way I'm reading this it sounds like you're a shady character I like like I interviewed on the queue but I didn't see that but you know I'm going to pressure here for that if you don't mind I'd like to to dig into that John thank you for that so I've had the I've had the privilege of a really amazingly interesting life and at the heart of at the heart of that great adventures been people and the privilege to work with really great people and good people I was born in South Africa I grew up in Africa went to school there qualified as a lawyer and then came to study in Britain when I studied international politics when I finished my studies international politics I got head hunted by a US consulting firm called crow which was a start of a 20 years career as an investigator first in crawl where I was a managing director in the London and then in building my own consulting firm which was called g3 and all of this led me to cybersecurity because as an investigator looking into organized crime looking into corruption looking into asset racing increasingly as the years went on everything became digital and I became very interested in finding evidence on electronic devices but starting my career and CRO was tremendous because Jules Kroll was a incredible mentor he could walk through an office and call everybody by their first name any Kroll office anywhere in the world and he always took a kindly interest in the people who work for him so it was a great school to go to and and I worked on some terrific cases including some very interesting Russian cases and Russian organized crime cases just this bag of Kroll was I've had a core competency in doing investigative work and also due diligence was that kind of focus yes although Kroll was the first company in the world to really have a strong digital practice led by Alan Brugler of New York Alan established the first computer forensics practice which was all focused about finding evidence on devices and everything I know about cyber security today started with me going to school with Alan Brolin crawl and they also focused on corruption uncovering this is from Wikipedia Kroll clients help Kroll helps clients improve operations by uncovering kickbacks fraud another form of corruptions other specialty areas is forensic accounting background screening drug testing electronic investigation data recovery SATA result Omar's McLennan in 2004 for 1.9 billion mark divested Kroll to another company I'll take credit risk management to diligence investigator in Falls Church Virginia over 150 countries call Kroll was the first CRO was the first household brand name in this field of of investigations and today's still is probably one of the strongest brand names and so it was a great firm to work in and was a great privilege to be part of it yeah high-end high-profile deals were there how many employees were in Kroll cuz I'd imagine that the alumni that that came out of Kroll probably have found places in other jobs similar to yes do an investigative work like you know they out them all over the world many many alumni from Kroll and many of them doing really well and doing great work ok great so now the next question want to ask you is when you in Kroll the South Africa connection came up so I got to ask you it says business side that you're a former South African spy are you a former South African spy no John I've never worked for any government agency and in developing my career my my whole focus has been on investigations out of the Kroll London office I did have the opportunity to work in South Africa out of the Kroll London office and this was really a seminal moment in my career when I went to South Africa on a case for a major international credit-card company immediately after the end of apartheid when democracy started to look into the scale and extent of credit card fraud at the request of this guy what year was there - how old were you this was in 1995 1996 I was 25 26 years old and one of the things which this credit card company asked me to do was to assess what was the capability of the new democratic government in South Africa under Nelson Mandela to deal with crime and so I had the privilege of meeting mr. Mandela as the president to discuss this issue with him and it was an extraordinary man the country's history because there was such an openness and a willingness to to address issues of this nature and to grapple with them so he was released from prison at that time I remember those days and he became president that's why he called you and you met with him face to face of a business conversation around working on what the future democracy is and trying to look at from a corruption standpoint or just kind of in general was that what was that conversation can you share so so that so the meeting involved President Mandela and and the relevant cabinet ministers the relevant secretaries and his cabinet - responsible for for these issues and the focus of our conversation really started with well how do you deal with credit card fraud and how do you deal with large-scale fraud that could be driven by organized crime and at the time this was an issue of great concern to the president because there was bombing in Kate of a Planet Hollywood cafe where a number of people got very severely injured and the president believed that this could have been the result of a protection racket in Cape Town and so he wanted to do something about it he was incredibly proactive and forward-leaning and in an extraordinary way he ended the conversation by by asking where the Kroll can help him and so he commissioned Kroll to build the capacity of all the black officers that came out of the ANC and have gone into key government positions on how to manage organized crime investigations it was the challenge at that time honestly I can imagine apartheid I remember you know I was just at a college that's not properly around the same age as you it was a dynamic time to say the least was his issue around lack of training old school techniques because you know that was right down post-cold-war and then did what were the concerns not enough people was it just out of control was it a corrupt I mean just I mean what was the core issue that Nelson wanted to hire Kroll and you could work his core issue was he wanted to ensure the stability of South Africa's democracy that was his core focus and he wanted to make South Africa an attractive place where international companies felt comfortable and confident in investing and that was his focus and he felt that at that time because so many of the key people in the ANC only had training in a cold war context that there wasn't a Nessy skill set to do complex financial or more modern investigations and it was very much focused he was always the innovator he was very much focused on bringing the best practices and the best investigative techniques to the country he was I felt in such a hurry that he doesn't want to do this by going to other governments and asking for the help he wanted to Commission it himself and so he gave he gave a crawl with me as the project leader a contract to do this and my namesake Francois Pienaar has become very well known because of the film Invictus and he's been he had the benefit of Mandela as a mentor and as a supporter and that changed his career the same thing happened to me so what did he actually asked you to do was it to train build a force because there's this talk that and was a despite corruption specifically it was it more both corruption and or stability because they kind of go hand in hand policy and it's a very close link between corruption and instability and and president Ellis instructions were very clear to Crowley said go out and find me the best people in the world the most experienced people in the world who can come to South Africa and train my people how to fight organized crime so I went out and I found some of the best people from the CIA from mi6 the British intelligence service from the Drug Enforcement Agency here in the US form officers from the Federal Bureau of Investigation's detectives from Scotland Yard prosecutors from the US Justice Department and all of them for a number of years traveled to South Africa to train black officers who were newly appointed in key roles in how to combat organized crime and this was you acting as an employee he had crow there's not some operative this is he this was me very much acting as a as an executive and crow I was the project leader Kroll was very well structured and organized and I reported to the chief executive officer in the London office nor Garret who was the former head of the CIA's Near East Division and Nelson Mandela was intimately involved in this with you at Krall President Mandela was the ultimate support of this project and he then designated several ministers to work on it and also senior officials in the stories that had been put out this past week they talked about this to try to make it sound like you're involved on two sides of the equation they bring up scorpions was this the scorpions project that they referred to so it was the scorpions scorpion sounds so dangerous and a movie well there's a movie a movie does feature this so at the end of the training project President Mandela and deputy president Thabo Mbeki who subsequently succeeded him as president put together a ministerial committee to look at what should they do with the capacity that's been built with this investment that they made because for a period of about three years we had all the leading people the most experienced people that have come out of some of the best law enforcement agencies and some of the best intelligence services come and trained in South Africa and this was quite this was quite something John because many of the senior officers in the ANC came from a background where they were trained by the opponents of the people came to treat trained them so so many of them were trained by the Stasi in East Germany some of them were trained by the Russian KGB some of them were trained by the Cubans so we not only had to train them we also had to win their trust and when we started this that's a diverse set of potential dogma and or just habits a theory modernised if you will right is that what the there was there was a question of of learning new skills and there was a question about also about learning management capabilities there was also question of learning the importance of the media for when you do difficult and complex investigations there was a question about using digital resources but there was also fundamentally a question of just building trust and when we started this program none of the black officers wanted to be photographed with all these foreign trainers who were senior foreign intelligence officers when we finished that everyone wanted to be in the photograph and so this was a great South African success story but the President and the deputy president then reflected on what to do with his capacity and they appointed the ministerial task force to do this and we were asked to make recommendations to this Minister ministerial task force and one of the things which we did was we showed them a movie because you referenced the movie and the movie we showed them was the untouchables with Kevin Costner and Sean Connery which is still one of my favorite and and greatest movies and the story The Untouchables is about police corruption in Chicago and how in the Treasury Department a man called Eliot Ness put together a group of officers from which he selected from different places with clean hands to go after corruption during the Probie and this really captured the president's imagination and so he said that's what he want and Ella yeah okay so he said della one of the untouchables he wanted Eliot Ness exactly Al Capone's out there and and how many people were in that goodness so we asked that we we established the government then established decided to establish and this was passed as a law through Parliament the director of special operations the DSO which colloquy became known as the scorpions and it had a scorpion as a symbol for this unit and this became a standalone anti-corruption unit and the brilliant thing about it John was that the first intake of scorpion officers were all young black graduates many of them law graduates and at the time Janet Reno was the US Attorney General played a very crucial role she allowed half of the first intake of young cratchits to go to Quantico and to do the full FBI course in Quantico and this was the first group of foreign students who've ever been admitted to Quantico to do the full Quantico were you involved at what score's at that time yes sir and so you worked with President Mandela yes the set of the scorpions is untouchable skiing for the first time as a new democracy is emerging the landscape is certainly changing there's a transformation happening we all know the history laugh you don't watch Invictus probably great movie to do that you then worked with the Attorney General United States to cross-pollinate the folks in South Africa black officers law degrees Samar's fresh yes this unit with Quantico yes in the United States I had the privilege of attending the the graduation ceremony of the first of South African officers that completed the Quantico course and representing crow they on the day you had us relationships at that time to crawl across pollen I had the privilege of working with some of the best law enforcement officers and best intelligence officers that has come out of the u.s. services and they've been tremendous mentors in my career they've really shaped my thinking they've shaped my values and they've they've shaved my character so you're still under 30 at this time so give us a is that where this where are we in time now just about a 30 so you know around the nine late nineties still 90s yeah so client-server technologies there okay so also the story references Leonard McCarthy and these spy tapes what is this spy tape saga about it says you had a conversation with McCarthy me I'm thinking that a phone tap explain that spy tape saga what does it mean who's Lennon McCarthy explain yourself so so so Leonard McCarthy it's a US citizen today he served two terms as the vice president for institutional integrity at the World Bank which is the world's most important anti-corruption official he started his career as a prosecutor in South Africa many years ago and then became the head of the economic crimes division in the South African Justice Department and eventually became the head of the scorpions and many years after I've left Kroll and were no longer involved in in the work of the scorpions he texted me one evening expressing a concern and an anxiety that I had about the safety of his family and I replied to him with two text messages one was a Bible verse and the other one was a Latin saying and my advice name was follow the rule of law and put the safety of your family first and that was the advice I gave him so this is how I imagined the year I think of it the internet was just there this was him this was roundabout 2000 December 2007 okay so there was I phone just hit so text messaging Nokia phones all those big yeah probably more text message there so you sitting anywhere in London you get a text message from your friend yep later this past late tonight asking for help and advice and I gave him the best advice I can he unfortunately was being wiretapped and those wiretaps were subsequently published and became the subject of much controversy they've now been scrutinized by South Africa's highest court and the court has decided that those wiretaps are of no impact and of importance in the scheme of judicial decision-making and our unknown provenance and on and on unknown reliability they threw it out basically yeah they're basically that's the president he had some scandals priors and corruption but back to the tapes you the only involvement on the spy tapes was friend sending you a text message that says hey I'm running a corruption you know I'm afraid for my life my family what do I do and you give some advice general advice and that's it as there was there any more interactions with us no that's it that's it okay so you weren't like yeah working with it hey here's what we get strategy there was nothing that going on no other interactions just a friendly advice and that's what they put you I gave him my I gave him my best advice when you when you work in when you work as an investigator very much as and it's very similar in venture capital it's all about relationships and you want to preserve relationships for the long term and you develop deep royalties to its people particularly people with whom you've been through difficult situations as I have been with Leonard much earlier on when I was still involved in Kroll and giving advice to South African government on issues related to the scorpius so that that has a lot of holes and I did think that was kind of weird they actually can produce the actual tax I couldn't find that the spy tapes so there's a spy tape scandal out there your name is on out on one little transaction globbed on to you I mean how do you feel about that I mean you must've been pretty pissed when you saw that when you do it when when you do when you do investigative work you see really see everything and all kinds of things and the bigger the issues that you deal with the more frequently you see things that other people might find unusual I are you doing any work right now with c5 at South Africa and none whatsoever so I've I retired from my investigative Korea in 2014 I did terrific 20 years as an investigator during my time as investigator I came to understood the importance of digital and cyber and so at the end of it I saw an opportunity to serve a sector that historically have been underserved with capital which is cyber security and of course there are two areas very closely related to cyber security artificial intelligence and cloud and that's why I created c5 after I sold my investigator firm with five other families who equally believed in the importance of investing private capital to make a difference invest in private capital to help bring about innovation that can bring stability to the digital world and that's the mission of c-5 before I get to the heart news I want to drill in on the BBC stories I think that's really the focal point of you know why we're talking just you know from my standpoint I remember living as a young person in that time breaking into the business you know my 20s and 30s you had Live Aid in 1985 and you had 1995 the internet happened there was so much going on between those that decade 85 to 95 you were there I was an American so I didn't really have a lot exposure I did some work for IBM and Europe in 1980 says it's co-op student but you know I had some peak in the international world it must been pretty dynamic the cross-pollination the melting pot of countries you know the Berlin Wall goes down you had the cold war's ending you had apartheid a lot of things were going on around you yes so in that dynamic because if if the standard is you had links to someone you know talked about why how important it was that this melting pot and how it affected your relationships and how it looks now looking back because now you can almost tie anything to anything yes so I think the 90s was one of the most exciting periods of time because you had the birth of the internet and I started working on Internet related issues yet 20 million users today we have three and a half billion users and ten billion devices unthinkable at the time but in the wake of the internet also came a lot of changes as you say the Berlin Wall came down democracy in South Africa the Oslo peace process in the time that I worked in Kroll some of them made most important and damaging civil wars in Africa came to an end including the great war in the Congo peace came to Sudan and Angola the Ivory Coast so a lot of things happening and if you have a if you had a an international career at that time when globalization was accelerating you got to no a lot of people in different markets and both in crow and in my consulting business a key part of what it but we did was to keep us and Western corporations that were investing in emerging markets safe your credibility has been called in questions with this article and when I get to in a second what I want to ask you straight up is it possible to survive in the international theatre to the level that you're surviving if what they say is true if you if you're out scamming people or you're a bad actor pretty much over the the time as things get more transparent it's hard to survive right I mean talk about that dynamic because I just find it hard to believe that to be successful the way you are it's not a johnny-come-lately firms been multiple years operating vetted by the US government are people getting away in the shadows is it is is it hard because I almost imagine those are a lot of arbitrage I imagine ton of arbitrage that you that are happening there how hard or how easy it is to survive to be that shady and corrupt in this new era because with with with investigated with with intelligence communities with some terrific if you follow the money now Bitcoin that's a whole nother story but that's more today but to survive the eighties and nineties and to be where you are and what they're alleging I just what's your thoughts well to be able to attract capital and investors you have to have very high standards of governance and compliance because ultimately that's what investors are looking for and what investors will diligence when they make an investment with you so to carry the confidence of investors good standards of governance and compliance are of critical importance and raising venture capital and Europe is tough it's not like the US babe there's an abundance of venture capital available it's very hard Europe is under served by capital the venture capital invested in the US market is multiple of what we invest in Europe so you need to be even more focused on governance and compliance in Europe than you would be perhaps on other markets I think the second important point with Gmail John is that technology is brought about a lot of transparency and this is a major area of focus for our piece tech accelerator where we have startups who help to bring transparency to markets which previously did not have transparency for example one of the startups that came through our accelerator has brought complete transparency to the supply chain for subsistence farmers in Africa all the way to to the to the shelf of Walmart or a big grocery retailer in in the US or Europe and so I think technology is bringing a lot more more transparency we also have a global anti-corruption Innovation Challenge called shield in the cloud where we try and find and recognize the most innovative corporations governments and countries in the space so let's talk about the BBC story that hit 12 it says is a US military cloud the DoD Jedi contractor that's coming to award the eleventh hour safe from Russia fears over sensitive data so if this essentially the headline that's bolded says a technology company bidding for a Pentagon contract that's Amazon Web Services to store sensitive data has close partnerships with a firm linked to a sanctioned Russian oligarch the BBC has learned goes on to essentially put fear and tries to hang a story that says the national security of America is at risk because of c5u that's what we're talking about right now so so what's your take on this story I mean did you wake up and get an email said hey check out the BBC you're featured in and they're alleging that you have links to Russia and Amazon what Jon first I have to go I first have to do a disclosure I've worked for the BBC as an investigator when I was in Kroll and in fact I let the litigation support for the BBC in the biggest libel claim in British history which was post 9/11 when the BBC did a broadcast mistakenly accusing a mining company in Africa of laundering money for al-qaeda and so I represented the BBC in this case I was the manager hired you they hired me to delete this case for them and I'm I helped the BBC to reduce a libel claim of 25 million dollars to $750,000 so I'm very familiar with the BBC its integrity its standards and how it does things and I've always held the BBC in the highest regard and believed that the BBC makes a very important contribution to make people better informed about the world so when I heard about the story I was very disappointed because it seemed to me that the BBC have compromised the independence and the independence of the editorial control in broadcasting the story the reason why I say that is because the principal commentator in this story as a gentleman called John Wheeler who's familiar to me as a someone who's been trolling our firm on internet for the last year making all sorts of allegations the BBC did not disclose that mr. Weiler is a former Oracle executive the company that's protesting the Jedi bidding contract and secondly that he runs a lobbying firm with paid clients and that he himself often bid for government contracts in the US government context you're saying that John Wheeler who's sourced in the story has a quote expert and I did check him out I did look at what he was doing I checked out his Twitter he seems to be trying to socialise a story heavily first he needed eyes on LinkedIn he seems to be a consultant firm like a Beltway yes he runs a he runs a phone called in interoperability Clearing House and a related firm called the IT acquisition Advisory Council and these two organizations work very closely together the interoperability Clearing House or IC H is a consulting business where mr. Weiler acts for paying clients including competitors for this bidding contract and none of this was disclosed by the BBC in their program the second part of this program that I found very disappointing was the fact that the BBC in focusing on the Russian technology parks cocuwa did not disclose the list of skok of our partners that are a matter of public record on the Internet if you look at this list very closely you'll see c5 is not on there neither Amazon Web Services but the list of companies that are on there are very familiar names many of them competitors in this bidding process who acted as founding partners of skok about Oracle for example as recently as the 28th of November hosted what was described as the largest cloud computing conference in Russia's history at Skolkovo this is the this is the place which the BBC described as this notorious den of spies and at this event which Oracle hosted they had the Russian presidential administration on a big screen as one of their clients in Russia so some Oracle is doing business in Russia they have like legit real links to Russia well things you're saying if they suddenly have very close links with Skolkovo and so having a great many other Khayyam is there IBM Accenture cisco say Microsoft is saying Oracle is there so Skolkovo has a has a very distinguished roster of partners and if the BBC was fair and even-handed they would have disclosed us and they would have disclosed the fact that neither c5 nor Amazon feature as Corcovado you feel that the BBC has been duped the BBC clearly has been duped the program that they broadcasted is really a parlor game of six degrees of separation which they try to spun into a national security crisis all right so let's tell us John while ago you're saying John Wyler who's quoted in the story as an expert and by the way I read in the story my favorite line that I wanted to ask you on was there seems to be questions being raised but the question is being raised or referring to him so are you saying that he is not an expert but a plant for the story what's what's his role he's saying he works for Oracle or you think do you think he's being paid by Oracle like I can't comment on mr. Wireless motivation what strikes me is the fact that is a former Oracle executive what's striking is that he clearly on his website for the IC H identifies several competitors for the Jedi business clients and that all of this should have been disclosed by the BBC rather than to try and characterize and portray him as an independent expert on this story well AWS put out a press release or a blog post essentially hum this you know you guys had won it we're very clear and this I know it goes to the top because that's how Amazon works nothing goes out until it goes to the top which is Andy chassis and the senior people over there it says here's the relationship with c5 and ATS what school you use are the same page there but also they hinted the old guard manipulation distant I don't think they use the word disinformation campaign they kind of insinuate it and that's what I'm looking into I want to ask you are you part are you a victim of a disinformation campaign do you believe that you're not a victim being targeted with c5 as part of a disinformation campaign put on by a competitor to AWS I think what we've seen over the course of this last here is an enormous amount of disinformation around this contract and around this bidding process and they've a lot of the information that has been disseminated has not only not been factual but in some cases have been patently malicious well I have been covering Amazon for many many years this guy Tom Wyler is in seems to be circulating multiple reports invested in preparing for this interview I checked Vanity Fair he's quoted in Vanity Fair he's quoted in the BBC story and there's no real or original reporting other than those two there's some business side our article which is just regurgitating the Business Insider I mean the BBC story and a few other kind of blog stories but no real original yes no content don't so in every story that that's been written on this subject and as you say most serious publication have thrown this thrown these allegations out but in the in those few instances where they've managed to to publish these allegations and to leverage other people's credibility to their advantage and leverage other people's credibility for their competitive advantage John Wheeler has been the most important and prominent source of the allegations someone who clearly has vested commercial interests someone who clearly works for competitors as disclosed on his own website and none of this has ever been surfaced or addressed I have multiple sources have confirmed to me that there's a dossier that has been created and paid for by a firm or collection of firms to discredit AWS I've seen some of the summary documents of that and that is being peddled around to journalists we have not been approached yet I'm not sure they will because we actually know the cloud what cloud computing is so I'm sure we could debunk it by just looking at it and what they were putting fors was interesting is this an eleventh-hour a desperation attempt because I have the Geo a report here that was issued under Oracle's change it says there are six conditions why we're looking at one sole cloud although it's not a it's a multiple bid it's not an exclusive to amazon but so there's reasons why and they list six service levels highly specialized check more favorable terms and conditions with a single award expected cause of administration of multiple contracts outweighs the benefits of multiple awards the projected orders are so intricately related that only a single contractor can reasonably be perform the work meaning that Amazon has the only cloud that can do that work now I've reported on the cube and it's looking angle that it's true there's things that other clouds just don't have anyone has private they have the secret the secret clouds the total estimated value of the contract is less than the simplified acquisition threshold or multiple awards would not be in the best interest this is from them this is a government report so it seems like there's a conspiracy against Amazon where you are upon and in in this game collect you feel that collateral damage song do you do you believe that to be true collateral damage okay well okay so now the the John Wheeler guys so investigate you've been an investigator so you mean you're not you know you're not a retired into this a retired investigator you're retired investigated worked on things with Nelson Mandela Kroll Janet Reno Attorney General you've vetted by the United States government you have credibility you have relationships with people who have have top-secret clearance all kinds of stuff but I mean do you have where people have top-secret clearance or or former people who had done well we have we have the privilege of of working with a very distinguished group of senior national security leaders as operating partisan c5 and many of them have retained their clearances and have been only been able to do so because c5 had to pass through a very deep vetting process so for you to be smeared like this you've been in an investigative has you work at a lot of people this is pretty obvious to you this is like a oh is it like a deep state conspiracy you feel it's one vendor - what is your take and what does collateral damage mean to you well I recently spoke at the mahkum conference on a session on digital warfare and one of the key points I made there was that there are two things that are absolutely critical for business leaders and technology leaders at this point in time one we have to clearly say that our countries are worth defending we can't walk away from our countries because the innovation that we are able to build and scale we're only able to do because we live in democracies and then free societies that are governed by the rule of law the second thing that I think is absolutely crucial for business leaders in the technology community is to accept that there must be a point where national interest overrides competition it must be a point where we say the benefit and the growth and the success of our country is more important to us than making commercial profits and therefore there's a reason for us either to cooperate or to cease competition or to compete in a different way what might takes a little bit more simple than that's a good explanation is I find these smear campaigns and fake news and I was just talking with Kara Swisher on Twitter just pinging back and forth you know either journalists are chasing Twitter and not really doing the original courting or they're being fed stories if this is truly a smear campaign as being fed by a paid dossier then that hurts people when families and that puts corporate interests over the right thing so I think I a personal issue with that that's fake news that's just disinformation but it's also putting corporate inches over over families and people so I just find that to be kind of really weird when you say collateral damage earlier what did you mean by that just part of the campaign you personally what's what's your view okay I think competition which is not focused on on performance and on innovation and on price points that's competition that's hugely destructive its destructive to the fabric of innovation its destructive of course to the reputation of the people who fall in the line of sight of this kind of competition but it's also hugely destructive to national interest Andrae one of the key stories here with the BBC which has holes in it is that the Amazon link which we just talked about but there's one that they bring up that seems to be core in all this and just the connections to Russia can you talk about your career over the career from whether you when you were younger to now your relationship with Russia why is this Russian angle seems to be why they bring into the Russia angle into it they seem to say that c-5 Cable has connections they call deep links personal links into Russia so to see what that so c5 is a venture capital firm have no links to Russia c5 has had one individual who is originally of Russian origin but it's been a longtime Swiss resident and you national as a co investor into a enterprise software company we invested in in 2015 in Europe we've since sold that company but this individual Vladimir Kuznetsov who's became the focus of the BBC's story was a co investor with us and the way in which we structure our investment structures is that everything is transparent so the investment vehicle for this investment was a London registered company which was on the records of Companies House not an offshore entity and when Vladimir came into this company as a co investor for compliance and regulatory purposes we asked him to make his investment through this vehicle which we controlled and which was subject to our compliance standards and completely transparent and in this way he made this investment now when we take on both investors and Co investors we do that subject to very extensive due diligence and we have a very robust and rigorous due diligence regime which in which our operating partners who are leaders of great experience play an important role in which we use outside due diligence firms to augment our own judgment and to make sure we have all the facts and finally we also compare notes with other financial institutions and peers and having done that with Vladimir Kuznetsov when he made this one investment with us we reached the conclusion that he was acting in his own right as an independent angel investor that his left renova many years ago as a career executive and that he was completely acceptable as an investor so that you think that the BBC is making an inaccurate Association the way they describe your relationship with Russia absolutely the the whole this whole issue of the provenance of capital has become of growing importance to the venture capital industry as you and I discussed earlier with many more different sources of capital coming out of places like China like Russia Saudi Arabia other parts of the world and therefore going back again to you the earlier point we discussed compliance and due diligence our critical success factors and we have every confidence in due diligence conclusions that we reached about vladimir quits net source co-investment with us in 2015 so I did some digging on c5 razor bidco this was the the portion of the company in reference to the article I need to get your your take on this and they want to get you on the record on this because it's you mentioned I've been a law above board with all the compliance no offshore entities this is a personal investment that he made Co investment into an entity you guys set up for the transparency and compliance is that true that's correct no side didn't see didn't discover this would my my children could have found this this this company was in a transparent way on the records in Companies House and and Vladimir's role and investment in it was completely on the on the public record all of this was subject to financial conduct authority regulation and anti money laundering and no your client standards and compliance so there was no great big discovery this was all transparent all out in the open and we felt very confident in our due diligence findings and so you feel very confident Oh issue there at all special purpose none whatsoever is it this is classic this is international finance yes sir so in the venture capital industry creating a special purpose vehicle for a particular investment is a standard practice in c-five we focus on structuring those special-purpose vehicles in the most transparent way possible and that was his money from probably from Russia and you co invested into this for this purpose of doing these kinds of deals with Russia well we just right this is kind of the purpose of that no no no this so in 2015 we invested into a European enterprise software company that's a strategic partner of Microsoft in Scandinavian country and we invested in amount of 16 million pounds about at the time just more than 20 million dollars and subsequent in August of that year that Amir Kuznetsov having retired for nova and some time ago in his own right as an angel investor came in as a minority invest alongside us into this investment but we wanted to be sure that his investment was on our control and subject to our compliance standards so we requested him to make his investment through our special purpose vehicle c5 raised a bit co this investment has since been realized it's been a great success and this business is going on to do great things and serve great clients it c5 taking russian money no see if I was not taking Russian money since since the onset of sanctions onboarding Russian money is just impossible sanctions have introduced complexity and have introduced regulatory risk related to Russian capital and so we've taken a decision that we will not and we can't onboard Russian capital and sanctions have also impacted my investigative career sanctions have also completely changed because what the US have done very effectively is to make sanctions a truly global regime and in which ever country are based it doesn't really matter you have to comply with US sanctions this is not optional for anybody on any sanctions regime including the most recent sanctions on Iran so if there are sanctions in place you can't touch it have you ever managed Russian oligarchs money or interests at any time I've never managed a Russian oligarchs money at any point in time I served for a period of a year honest on the board of a South African mining company in which Renova is a minority invest alongside an Australian company called South 32 and the reason why I did this was because of my support for African entrepreneurship this was one of the first black owned mining companies in South Africa that was established with a British investment in 2004 this business have just grown to be a tremendous success and so for a period of a year I offered to help them on the board and to support them as they as they looked at how they can grow and scale the business I have a couple more questions Gabe so I don't know if you wanna take a break you want to keep let's take a break okay let's take a quick break do a quick break I think that's great that's the meat of it great job by the way fantastic lady here thanks for answering those questions the next section I want to do is compliment

>> Hi from Toronto, Canada. It's the CUBE covering Blockchain Futurist Conference 2018 brought to you by the CUBE. >> Welcome back to the live coverage. Day Two of the CUBE here in Toronto, Ontario in Canada for the untraceable Blockchain Futurist Conference wall-to-wall coverage Day Two. A lot of action going on. Tons of great content, tons of great after-hour networking. Just overall great vibe. In light of the market crashing, bitcoin stabilizing, some old coins getting crushed. We got it all covered for here. I'm John Furrier, your host for the CUBE, and our next guest is Nithin Eapen, who's the chief investment officer of Arcadia Crypto Ventures. Arcadia Crypto Ventures, welcome to the CUBE, good to see you. >> Hey good to see you too John. Thank you for having me here. >> Keep alumni in the know. Okay. So first of all, you're an investor in crypto. Everyone's running for the hills. A dip is happening, a crash, or some will say. Your perspective, what's happening in the market? >> See, happening in the market. So typically just like in any asset class, there was a huge run-up that happened very quickly. It didn't go up slow, alright? And the geeks were in early, the libertarians came in after that, then there were speculators. And the retail market also came in, and they all came in together for let's say the December after the November Thanksgiving week and everybody learnt about cryptos, they came in. Alright, the next set of guys haven't come in. Alright? So there's nothing for them there. Nobody's holding them there. And there were expecting the institutional investors to come in and that hasn't happened due to custody problems, ETF problems and all that stuff. Alright, it started going down. The weak hands are falling. The weak hands are keeping on falling and as with any technology, any bubble of people have come in, now they feel that okay the world is coming to an end and they are selling all their stuff. All the ICOs that have raised money in Ether, selling the Ether. All this together is pushing it down, and everybody's waiting for that next set of investors, or the, every 10 X, I mean, an asset goes up, there's a new set of guys who are supposed to come in, and this time it hasn't come in and we're waiting for that. >> You're on the panel here at the event. A lot of different panels, but one panel I watched you were on, you talked about the token model, people were holding Ether. It's kind of a debate, you know, and Bradley Rotter, another investor was saying, hey, there are too many tokens out there. You had different perspective, but one of the things I wanted to get your reaction to is that people who held on to the Ether lost their runway and it creates a harder road to hold. So people were converting to Fiat. This is a big issue. How are we going to get by this? This whole lot of Ether, more people are going to come in. The dynamics of investing in this token model, has it changed? How are you looking at it, and I'd say, how do you help startups? >> So regarding a lot of tokens, first thing is there are a lot of tokens out there. See that is going to happen. It's just like in the 1999, okay, a lot of websites and a lot of Internet companies, pet.com, everybody's an Internet company. Same way, everybody is a token. 95 to 99 percent of them are going to go away and the good ones will rise from those ashes, okay. Now regarding runway, a lot of these projects have pretty much raised enough money for 50 years of runway. So it has crashed one-fifth, okay, they have 10 years worth of runway. Typically, in the olden days, a small company with an idea or a MVP was max going to raise one million to two or three million, alright? And all of them anyway have that even after Ether has crashed. I'm saying, just don't panic okay? You still have 10 years worth of runway. Utilize that, build upon it because the high period may be over where you can just raise money on a white paper. You've got the money, build yourself. You promised your real investors I'm going to build this great thing. So this is where we're going to see the great founders to the average and the bad ones where they've hit a wall, they don't know what to do, they'll fold their hands and walk away. Really good founders, they're resilient. They will, no matter how hard they're pushed to the wall, they're going to come up with the product, you see, and they're going to try to meet customer demands. They're going to get through the feedback loop, check what the customer wants and start delivering it. >> So basically what you're saying is there's so much money being raised, and I agree with you by the way. If you go the classic venture capital route, if you had a Powerpoint or prototype or even a working product with recurring revenue, your serious preferred stock financing will be anywhere from three to 15 million. >> Oh my god. And that's high end. >> That's a high end. >> 15 million will be on the high end. Some cases are raising 50 million, some cases 70 plus million, so even if you cut that in half, it's still a better outcome on the first round. I agree at that, so I think that's interesting. The other one that you mentioned is that things are dynamic, that we're seeing here at the show is in the hallways, everybody's talking about flight-to-quality. And I was talking yesterday on the wrap-up of Day One that you can tell the good deals from the bad deals by is the venture architecture working for the coin, or is the coin working for the venture architecture. And so this flight-to-quality combined with how people are optimizing their build up is critical. >> Yes. >> Talk about some things that you're seeing with this flight-to-quality. Is there anything in particular? Is it blockchain? Is it token economics? Where's the quality deals from your perspective? >> I feel quality lies in the founder of this. The founding team, because the idea, if you really ask me what is an idea here? An idea is just like mental masturbation. Guys who sit there can come up with so many ideas. That's what ideas are, okay? Now taking these ideas to fruition, like building it. There's a capital raising part, okay? Now a lot of people are good at capital raising. They're raising money and a lot of capital coming in. That's awesome because you need capital to attract talent to the space because a lot of talent who are maybe in astrophysics or in mechanical engineering, you want that talent to come here and come with ideas and build the stuff. Okay, the capital has come in. Now once the capital has come in, you really have to build the stuff. Even after you build the stuff, you have to go find the customer right? You have to go and acquire customers and all these three things coming together are so hard in reality. And that's why the venture capital always give a little bit of money to make sure that these guys are not wasting the whole thing away, right? >> Well, the other thing I want to get in touch, get on to you is here is that, in the old days, Silicon Valley, you got to move there, the VCs were there. Now, talking about the global phenomenon, the capital formation is both inside the United States and outside the United States. Certainly inside the United States, you're starting to see the formation around traditional structures, security token, which is more like, it feels like a security, a more preferred financing model. Equity's now involved. Outside United States, a booming utility token market. Your thoughts on how that's progressing, still open, still crazy? What's your thoughts? >> So the capital model, the beauty that has happened today is, earlier, you had to pitch to two hundred VCs or three hundred VCs to get one guy to put money into it. Most of the time, they'll be wasting your time, alright? So you had to go to them to get a million. And you didn't have any other option. You couldn't get it from a small enthusiast of your project to give you five hundred bucks or a thousand bucks. So now, you have that option, okay. Now that option is being cut by regulation, by the STC and people like that coming in saying, oh you can't do that, it has to be a security token. Alright, let's make it a security token. The moment you make it a security token, my question is, can you raise money from outside? Are you stopping that? Then again it doesn't really make sense. You're cutting the small investor, the chance for him to buy into a good, okay? It was only the VCs like Sequoia, or somebody like that, who could access a deal like Google. Now we have a chance for something like Google to come up with the common man whose putting five hundred, like Ethereum. There was no venture capitalist or Wall Street who got involved in Ethereum. The real money was made by very common people who supported a decentralized world computer. >> All CVCs get it now, market entries or whoever's getting involved, starting to see VCs dabble in there. Has that changed the investment dynamic at all? >> It has because the VCs, they have this feeling they've missed out, right? So now they're putting in five and 10 million dollars into a project, valuing a project to three hundred million. It changes the dynamics because now all these guys, like, there are so many projects that are raising like a hundred million because the VCs, all these private investors, are giving 10, 15, 20 million. Like recently for example, they've raised a 300 million dollar fund. They can't invest 10 thousand to 50 thousand to 100 thousand, right? They have to push 10 million to manage the money. That is skewing stuff, and I personally am not very interested in those kinds of projects, because it's without a community power at that time, so I don't know how the token economics is going to be fruitful for the second investor, the third investor. >> And Block Tower, we found out yesterday, is also investing in putting a fund together, a venture fund. It's interesting. We'll see how that shakes out. One thing that is going to change is the dynamics. You mentioned community, obviously, a big part of that. Big community here at the Futurist event, Toronto. So they've got a Canadian culture, a lot of Ethereum DNA in this area. What are you hearing at this event? What are some of the things that you're hearing in the hallways? You've obviously been on some panels at this event, and you're highly networked. What are you hearing? What's, with your ears to the ground, what's it telling you? >> You were talking about Block Tower, yes, they're doing a venture fund. It's great. He's a very very smart investor and they're going to do very well. On the ground, so most of the questions right now are coming, so we've reached the point that okay, we have built up the blockchains or the bit coins. We want it to be faster, alright? Everybody's looking for scalability. Who can bring scalability? The EOS guys are out there. They are saying they can do, you know what, five thousand or 10 thousand or 100 thousand transactions per second. So scalability is a very very big thing. I personally consider something like interoperability, bigger. Interoperability in the sense, alright, so now you have these multiple chains. It's just like multiple types of phones. Now imagine you had an AT&T phone and you couldn't call the Verizon phone customer, alright? We're at that point. We have all these chains, there's Ethereum, there's One Chain, there's EOS. Okay, I've built, let's say, a distributor app, let's say it's a poker app on Ethereum. But I can't play with the guy who's on EOS right? What if he also wants to play poker in this poker app? Is there somewhere we can make this integrate and interoperable? Now to make it interoperable, now we have, if we go into details, there are assets, there are tokens on both sides. How can we transfer tokens from one chain to the other chain making sure there's no double-spend happening? >> I mean there's two things. That was the consumability, making it easy to use, one. And two, I think you're right on. Interoperability's huge. You got to have that. >> Interface, as you said. Interface is big. To make it simple, it's still the geeks. In geeks, a lot of people are using command lang prompts. You can't expect the common man sitting at home. It's just like email. Email was there from 1978. It's only when all these tools like, beginning '94, and the browser came in, that people started using it. So those things have to come in. >> A lot of work's got to get done. So many on the blockchain side. Well, great to have you on. Good to see you. Congratulations on your panels and this afternoon, you're doing a good job. Thanks for coming on. I appreciate it. >> Thank you so much, John. >> Any predictions by the way? >> Predictions, I don't know, I'm not a predictions guy. I just go with the market. >> Price of bitcoin 20 thousand? >> Oh I never get into those predictions. I never want to get it. I think that it's possible that the bear market can continue for a longer time based on the fact that the newer money cannot come in. It has happened before. Bitcoin has fallen so many times at the 70, 80 percent range and then it stayed stagnant for a year before the next round up came. >> And certainly we got work (inaudible). Thanks for coming on. Keep coverage here live in Toronto, Ontario. Keep coverage here with the untraceable Blockchain Futurist Conference here of two days. Day Two, keep coverage. We're back after this short break. Thanks for watching. (electronic music)

[Music] [Applause] [Music] welcome to the special cube conversations here in Palo Alto cube studios I'm John Ferrier the founder of Silicon angle in the cube we're here with divest cargoes the founder and CEO of arcus Inc our curse com ar-are see us calm and Steve Herod General Partner at at General Catalyst VCU's funded him congratulations on your launch these guys launched on Monday a hot new product software OS for networking powering white boxes in a whole new generation of potentially cloud computing welcome to this cube conversation congratulations on your >> launch thank you John >> so today I should talk about this this >> startup when do you guys were founded let's get to the specifics date you were founded some of the people on the team and the funding and we were formally incorporated in February of 2016 we really got going in earnest in August of 2016 and have you know chosen to stay in stealth the the founding team consists of myself a gentleman by the name of Kop tell he's our CTO we also have a gentleman by the name of Derek Young he's our chief architect and our backgrounds are a combination of the semiconductor industry I spent a lot of time in the semiconductor industry most recently I was president of easy chip and we sold that company to Mellanox and Kher and Derek our networking protocol experts spent 20 plus years at places like Cisco and arguably some of the best protocol guys in the world so the three of us got together and basically saw an opportunity to to bring some of the insights and and architectural innovation you know we had in mind to the Mobius a pedigree in there some some top talent absolutely some of the things that they've done in the past from some notable yeah I mean you know some if you if you'd like some just high-level numbers we have 600 plus years of experience of deep networking expertise within the company our collective team has shipped over 400 products to production we have over 200 IETF RFC papers that have been filed by the team as well as 150 plus patents so we really can do something on the pedigree for sure yeah we absolutely focused on getting the best talent in the world because we felt that it would be a significant differentiation to be able to start from a clean sheet of paper and so really having people who have that expertise allowed us to kind of take a step back and you know reimagine what could be possible with an operating system and gave us the benefit of being able to you know choose >> best-in-class approaches so what's the >> cap the point that this all came >> together what was the guiding vision was it network os's are going to be cloud-based was it going to be more I owe t what was the some of the founding principles that really got this going because clearly we see a trend where you know Intel's been dominating we see what NVIDIA is doing competitively certainly on the GPU side you're seeing the white box has become a trend Google makes their own stuff apples big making their own silicon seeking the that's kind of a whole big scale world out there that has got a lot of hardware experience what was the catalyst for you guys when you found this kinda was the guiding principle yeah I would say there were three John and you hit you hit on a couple of them in your reference to Intel and NVIDIA with some of the innovation but if I start at the top level the market the networking market is a large market and it's also very strategic and foundational in a hyper-connected world that market is also dominated by a few people and there's essentially three vertically integrated OEM so that dominate that market and when you have that type of dominance it leads to ultimately high prices and muted innovations so we felt number one the market was going through tremendous change but at the same time it had been tightly controlled by a few people the other part of it was that there was a tremendous amount of innovation that was happening at the silicon component level coming from the semiconductor industry I was early at Broadcom very you know involved in some of the networking things that happened in the early stages of the company we saw tremendous amounts of innovation feature velocity that was happening at the silicon component level that in turn led to a lot of system hardware people coming into the market and producing systems based on this wide variety of choices for you know for the silicon but the missing link was really an operating system that would unleash all that innovation so Silicon Valley is back Steve you you know you're a VC now but you were the CTO at VMware one of the companies that actually changed how data centers operate certainly as it certainly as a pretext and cloud computing was seeing with micro services and the growth of cloud silicon's hot IT operations is certainly being decimated as we old knew it in the past everything's being automated away you need more function now there's a demand this is this penny how you see I mean you always see things are a little early as of technologist now VC what got you excited about these guys what's the what's the bottom line yeah maybe two points on that which so one silicon is is definitely become interesting again if you will in the in the Silicon Valley area and I think that's partly because cloud scale and web scale allows these environments where you can afford to put in new hardware and really take advantage of it I was a semiconductor I first austerity too so it's exciting for me to see that but um you know is the fish that it's kind of a straightforward story you know especially in a world of whether it's cloud or IOT or everything networking is you know like literally the core to all of us working going forward and the opportunity to rethink it in a new design and in software first mentality felt kind of perfect right now I think I I think device even sell the team a little short even is with all the numbers that are there kr for instance this co-founder was sort of everyone you talk to will call him mister BGP which is one of the main routing protocols in the internet so just a ridiculously deep team trying to take this on and there been a few companies trying to do something kind of like this and I think what do they say that the second Mouse gets the cheese and I think I think we've seen some things that didn't work the first time around and we can really I think improve on them and have a >> chance to make a major impact on the networking market you know just to kind of go on a tangent here for a second >> because you know as you're talking kind of my brain is kind of firing away because you know one of things I've been talking about on the cube a lot is ageism and if you look at the movement of the cloud that's brought us systems mindset back you look at all the best successes out there right now it's almost a old guys and gals but it's really systems people people who understand networking and systems because the cloud is an operating system you have an operating system for networking so you're seeing that trend certainly happened that's awesome the question I have for you device is what is the difference what's the impact of this new network OS because I'm almost envisioning if I think through my mind's eye you got servers and server list certainly big train seeing and cloud it's one resource pools one operating system and that needs to have cohesiveness and connectedness through services so is this how you guys are thinking about how are you guys think about the network os what's different about what you guys are doing with ARC OS versus what's out there today now that's a great question John so in terms of in terms of what we've done the the third piece you know of the puzzle so to speak when we were talking about our team I talked a little bit about the market opportunity I talked a little bit about the innovation that was happening at the semiconductor and systems level and said the missing link was on the OS and so as I said at the onset we had the benefit of hiring some of the best people in the world and what that gave us the opportunity was to look at the twenty plus years of development that had happened on the operating system side for networking and basically identify those things that really made sense so we had the benefit of being able to adopt what worked and then augment that with those things that were needed for a modern day networking infrastructure environment and so we set about producing a product we call it our Co s and the the characteristics of it that are unique are that its first of all its best-in-class protocols we have minimal dependency on open source protocols and the reason for that is that no serious network operator is going to put an open source networking protocol in the core of their network they're just not going to risk their business and the efficacy and performance of their network for something like that so we start with best-in-class protocols and then we captured them in a very open modular Services microservices based architecture and that allows us the flexibility and the extensibility to be able to compose it in a manner that's consistent with what the end-use case is going to be so it's designed from the onset to be very scalable and very versatile in terms of where it can be deployed we can deploy it you know in a physical environment we can deploy it visa via a container or we could deploy it in the cloud so we're agnostic to all of those use case scenarios and then in addition to that we knew that we had to make it usable it makes no sense to have the best-in-class protocols if our end customers can't use them so what we've done is we've adopted open config yang based models and we have programmable api's so in any environment people can leverage their existing tools their existing applications and they can relatively easily and efficiently integrate our Co s into their networking environment and then similarly we did the same thing on the hardware side we have something that we call D pal it's a data plane adaptation layer it's an intelligent how and what that allows us to do is be Hardware agnostic so we're indifferent to what the underlying hardware is and what we want to do is be able to take advantage of the advancements in the silicon component level as well as at the system level and be able to deploy our go S anywhere it's let's take a step back so you guys so the protocols that's awesome what's the value proposition for our Co S and who's the target audience you mentioned data centers in the past is a data center operators is it developers is it service providers who was your target customer yeah so so the the piece of the puzzle that wraps everything together is we wanted to do it at massive scale and so we have the ability to support internet scale with deep routing capabilities within our Co s and as a byproduct of that and all the other things that we've done architectural II were the world's first operating system that's been ported to the high-end Broadcom strata DNX family that product is called jericho plus in the marketplace and as a byproduct of that we can ingest a full internet routing table and as a byproduct of that we can be used in the highest end applications for network operators so performance is a key value public performance as measured by internet scale as measured by convergence times as measured by the amount of control visibility and access that we provide and by virtue of being able to solve that high-end problem it's very easy for us to come down so in terms of your specific question about what are the use cases we have active discussions in data center centric applications for the leaf and spine we have active discussions for edge applications we have active discussions going on for cloud centric applications arcus can be used anywhere who's the buyer those network operator so since we can go look a variety of personas network operator large telco that's right inner person running a killer app that's you know high mission-critical high scale is that Mike right yeah you're getting you're absolutely getting it right basically anybody that has a network and has a networking infrastructure that is consuming networking equipment is a potential customer for ours now the product has the extensibility to be used anywhere in the data center at the edge or in the cloud we're very focused on some of the use cases that are in the CDN peering and IP you know route reflector IP peering use cases great Steve I want to get your thoughts because I say I know how you invest you guys a great great firm over there you're pretty finicky on investments certainly team check pedigrees they're on the team so that's a good inside market tamp big markets what's the market here for you but how do you see this market what's the bet for you guys on the market side yeah it's pretty pretty straightforward as you look at the size of the networking market with you know three major players around here and you know a longer tail owning a small piece of Haitian giant market is a great way to get started and if you believe in the and the secular trends that are going on with innovation and hardware and the ability to take advantage of them I think we have identified a few really interesting starting use cases and web-scale companies that have a lot of cost and needs in the networking side but what I would love about the software architecture it reminds me a lot of things do have kind of just even the early virtualization pieces if you if you can take advantage of movement in advantages and hardware as they improve and really bring them into a company more quickly than before then those companies are gonna be able to have you know better economics on their networking early on so get a great layer in solve a particular use case but then the trends of being able to take advantage of new hardware and to be able to provide the data and the API is to programmatic and to manage it who one would that it's creative limp limitless opportunity because with custom silicon that has you know purpose-built protocols it's easy to put a box together and in a large data center or even boxes yeah you can imagine the vendors of the advances and the chips really love that there's a good company that can take advantage of them more quickly than others can so cloud cloud service refined certainly as a target audience here large the large clouds would love it there's an app coming in Broadcom as a customer they a partner of you guys in two parts first comes a partner so we we've ported arc OS onto multiple members of the Broadcom switching family so we have five or six of their components their networking system on chip components that we've ported to including the two highest end which is the jericho plus and you got a letter in the Broadcom buying CA and that's gonna open up IT operations to you guys and volge instead of applications and me to talk about what you just said extensibility of taking what you just said about boxes and tying applique and application performance you know what's going to see that vertically integrated and i think i think eloping yeah from from a semiconductor perspective since i spent a lot of time in the industry you know one of the challenges i had founded a high court count multi processor company and one of the challenges we always had was the software and at easy chip we had the world's highest and network processor challenge with software and i think if you take all the innovation in the silicon industry and couple it with the right software the combination of those two things opens up a vast number of opportunities and we feel that with our Co s we provide you know that software piece that's going to help people take advantage of all the great innovation that's happening you mentioned earlier open source people don't want to bring open source at the core the network yet the open source communities are growing really at an exponential rate you starting to see open source be the lingua franca for all developers especially the modern software developers wine not open sourcing the core the amino acids gotta be bulletproof you need security obviously answers there but that seems difficult to the trend on open source what's the what's the answer there on why not open source in the core yeah so we we take advantage of open source where it makes sense so we take advantage of open and onl open network Linux and we have developed our protocols that run on that environment the reason we feel that the protocols being developed in-house as opposed to leveraging things from the open source community are the internet scale multi-threading of bgp integrating things like open config yang based models into that environment right well it's not only proven but our the the the capabilities that we're able to innovate on and bring unique differentiation weren't really going back to a clean sheet of paper and so we designed it ground-up to really be optimized for the needs of today Steve your old boss Palmer rich used to talk about the harden top mmm-hmm similar here right you know one really no one's really gonna care if it works great it's under the under the harden top where you use open source as a connection point for services and opportunities to grow that similar concept yes I mean at the end of the day open source is great for certain things and for community and extensibility and for visibility and then on the flip side they look to a company that's accountable and for making sure it performs and as high quality and so I think I think that modern way for especially for the mission critical infrastructure is to have a mix of both and to give back to community where it makes sense to be responsible for hardening things are building them when they don't expense so how'd you how'd you how'd you land these guys you get him early and don't sit don't talk to any other VCS how did it all come together between you guys we've actually been friends for a while which has been great in it at one point we actually decided to ask hey what do you actually do I found that I was a venture investor and he is a network engineer but now I actually have actually really liked the networking space as a whole as much as people talk about the cloud or open source or storage being tough networking is literally everywhere and will be everywhere and whatever our world looks like so I always been looking for the most interesting companies in that space and we always joke like the investment world kind of San Francisco's applications mid here's sort of operating systems and the lower you get the more technical it gets and so well there's a vaccine I mean we're a media company I think we're doing things different we're team before we came on camera but I think media is undervalued I wrote just wrote a tweet on that got some traction on that but it's shifting back to silicon you're seeing systems if you look at some of the hottest areas IT operations is being automated away AI ops you know Auto machine learning starting to see some of these high-end like home systems like that's exactly where I was gonna go it's like the vid I I especially just love very deep intellectual property that is hard to replicate and that you can you know ultimately you can charge a premium for something that is that hard to do and so that's that's really something I get drugs in the deal with in you guys you have any other syndicates in the video about soda sure you know so our initial seed investor was clear ventures gentleman by the name of Chris rust is on our board and then Steve came in and led our most recent round of funding and he also was on the board what we've done beyond that institutional money is we have a group of very strategic individual investors two people I would maybe highlight amongst the vast number of advisers we have our gentleman by the name of Pankaj Patel punka JH was the chief development officer at Cisco he was basically number two at Cisco for a number of years deep operating experience across all facets of what we would need and then there's another gentleman by the name of Amarjeet Gill I've been friends with armored teeth for 30 years he's probably one of the single most successful entrepreneurs in the he's incubated companies that have been purchased by Broadcom by Apple by Google by Facebook by Intel by EMC so we were fortunate enough to get him involved and keep him busy great pedigree great investors with that kind of electoral property and those smart mines they're a lot of pressure on you as the CEO not to screw it up right I mean come on now get all those smart man come on okay you got it look at really good you know I I welcome it actually I enjoy it you know we look when you have a great team and you have as many capable people surrounding you it really comes together and so I don't think it's about me I actually think number one it's about I was just kidding by the way I think it's about the team and I'm merely a spokesperson to represent all the great work that our team has done so I'm really proud of the guys we have and frankly it makes my job easier you've got a lot of people to tap for for advice certainly the shared experiences electively in the different areas make a lot of sense in the investors certainly yeah up to you absolutely absolutely and it's not it's not just at the at the board it's just not at the investor level it's at the adviser level and also at you know at our individual team members when we have a team that executes as well as we have you know everything falls into place well we think the software worlds change we think the economics are changing certainly when you look at cloud whether it's cloud computing or token economics with blockchain and new emerging tech around AI we think the world is certainly going to change so you guys got a great team to kind of figure it out I mean you got a-you know execute in real time you got a real technology play with IP question is what's the next step what is your priorities now that you're out there congratulations on your launch thank you in stealth mode you got some customers you've got Broadcom relationships and looking out in the landscape what's your what's your plan for the next year what's your goals really to take every facet of what you said and just scale the business you know we're actively hiring we have a lot of customer activity this week happens to be the most recent IETF conference that happened in Montreal given our company launch on Monday there's been a tremendous amount of interest in everything that we're doing so that coupled with the existing customer discussions we have is only going to expand and then we have a very robust roadmap to continue to augment and add capabilities to the baseline capabilities that we brought to the market so I I really view the next year as scaling the business in all aspects and increasingly my time is going to be focused on commercially centric activities right well congratulations got a great team we receive great investment cube conversation here I'm John furry here the hot startup here launching this week here in California in Silicon Valley where silicon is back and software is back it's the cube bringing you all the action I'm John Fourier thanks for watching [Music]