>> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> The pandemic precipitated what is shaping up to be a permanent shift in cybersecurity spending patterns. As a direct result of hybrid work, CSOs have vested heavily in endpoint security, identity access management, cloud security, and further hardening the network beyond the headquarters. We've reported on this extensively in this Breaking Analysis series. Moreover, the need to build security into applications from the start rather than bolting protection on as an afterthought has led to vastly high heightened awareness around DevSecOps. Finally, attacking security as a data problem with automation and AI is fueling new innovations in cyber products and services and startups. Hello and welcome to this week's Wikibon CUBE Insights powered by ETR. In this Breaking Analysis, we present our quarterly findings in the security industry, and share the latest ETR survey data on the spending momentum and market movers. Let's start with the most recent news in cybersecurity. Nary a week goes by without more concerning news. The latest focus in the headlines is, of course, Russia's relentless cyber attacks on critical infrastructure in the Ukraine, including banking, government websites, weaponizing information. The hacker group, BlackByte, put a double whammy on the San Francisco 49ers, meaning they exfiltrated data and they encrypted the organization's files as part of its ransomware attack. Then there's the best Super Bowl ad last Sunday, the Coinbase floating QR code. Did you catch that? As people rushed to scan the code and participate in the Coinbase Bitcoin giveaway, it highlights yet another exposure, meaning we're always told not to click on links that we don't trust or we've never seen, but so many people activated this random QR code on their smartphones that it crashed Coinbase's website. What does that tell you? In other news, Securonix raised a billion dollars. They did this raise on top of Lacework's massive $1.3 billion raise last November. Both of these companies are attacking security with data automation and APIs that can engage machine intelligence. Securonix, specifically in the announcement, mentioned the uptake from MSSPs, managed security service providers, something we've talked about in this series. And that's a trend that we see as increasingly gaining traction as customers are just drawing in and drowning in security incidents. Peter McKay's company, Snyk, acquired Fugue, a company focused on making sure security policies are consistent throughout the software development life cycle. It's a really an example of a developer-defined security approach where policy can be checked at the dev, deployment, and production phases to ensure the same policies are in place at all stages, including monitoring at runtime. Fugue, according to Crunchbase, had raised $85 million to date. In some other company news, Cisco was rumored to be acquiring Splunk for not much more than Splunk is worth today. And the talks reportedly broke down. This would be a major move in security by Cisco and underscores the pressure to consolidate. Cisco would get an extremely strong customer base and through efficiencies could improve Splunk's profitability, but it seems like the premium Cisco was willing to pay was not enough to entice board to act. Splunk board, that is. Datadog blew away its earnings, and the stock was up 12%. It's pulled back now, thanks to Putin, but it's one of those companies that is disrupting Splunk. Datadog is less than half the size of Splunk, revenue-wise, but its valuation is more than 2 1/2 times greater. Finally, Elastic, another Splunk disruptor, settled its trademark dispute with AWS, and now AWS will now stop using the name Elasticsearch. All right, let's take a high level look at how cyber companies have performed in the stock market over time. Here's a graph of the Cyber ETF, and you can see the March 1st crosshairs of 2020 signifying the start of the lockdown. The trajectory of cybersecurity stocks is shown by the orange and blue lines, and it surely has steepened post March of 2020. And, of course, it's been down with the market lately, but the run up, as you can see, was substantial and eclipsed the trajectory of the previous cycles over the last couple of years, owing much of the momentum to the spending dynamics that we talked about at our open. Let's now drill into some of the names that we've been following over the last few years and take a look at the firm level. This chart shows some data that we've been tracking since before the pandemic. The top rows show the S&P 500 and the NASDAQ prices, and the bottom rows show specific stocks. The first column is the index price or the market cap of the company just before the pandemic, then the same data one year later. Then the next column shows the peak value during the pandemic, and then the current value. Then it shows in the next column where it is today, in percentage terms, i.e., how far has it pulled back from the peak, then the delta from pre-pandemic, in other words, how much did the issue earn or lose during the pandemic for investors? We then compare the pre-pandemic revenue multiple using a trailing 12-month revenue metric. Sorry, that's what we used. It's easy to get. (laughs) And that's the revenue multiple compared to the August in 2020, when multiples were really high, and where they are today, and then a recent quarterly growth rate guide based on the last earnings report. That's the last column. Okay, so I'm throwing a lot of data at you here, but what does it tell us? First, the S&P and the NAS are well up from pre-pandemic levels, yet they're off 9% and 15%, respectively, from their peaks today. That was earlier on Friday morning. Now let's look at the names more closely. Splunk has been struggling. It definitely had a tailwind from the pandemic as all boats seem to rise, but its execution has been lacking. It's now 30% off from its pre-pandemic levels. (groans) And it's multiple is compressing, and perhaps Cisco thought it could pick up the company for a discount. Now let's talk about Palo Alto Networks. We had reported on some of the challenges the company faced moving into a cloud-friendly model. that was before the pandemic. And we talked about the divergence between Palo Alto's stock price and the valuations relative to Fortinet, and we said at the time, we fully expected Palo Alto to rebound, and that's exactly what happened. It rode the tailwinds of the last two years. It's up over 100% from its pre-COVID levels, and its revenue multiple is expanding, owing to the nice growth rates. Now Fortinet had been doing well coming into the pandemic. In fact, we said it was executing on a cloud strategy better than Palo Alto Networks, hence that divergence in valuations at the time. So it didn't get as much of a boost from the pandemic. Didn't get that momentum at first, but the company's been executing very well. And as you can see, with 155% increase in valuation since just before the pandemic, it's going more than okay for Fortinet. Now, Okta is a name that we've really followed closely, the identity access management specialist that rocketed. But since it's Auth0 acquisition, it's pulled back. Investors are concerned about its guidance and its profitability. And several analyst have downgraded their price targets on Okta. We still really like the company. The Auth0 acquisition gives Okta a developer vector, and we think the company is going hard after market presence and is willing to sacrifice short-term profitability. We actually like that posture. It's very Frank Slupin-like. This company spends a lot of money on R&D and go-to-market. The question is, does Okta have inherent profitability? The company, as they say, spends a ton in some really key areas but it looks to us like it's going to establish a footprint. It's guiding revenue CAGR in the mid-30s over the mid to long-term and near term should beat that benchmark handily. But you can see the red highlights on Okta. And even though Okta is up 59% from its pre-pandemic levels, it's far behind its peers shown in the chart, especially CrowdStrike and Zscaler, the latter being somewhat less impacted by the pullback in stocks recently, of course, due to the fears of inflation and interest rates, and, of course, Russian invasion escalation. But these high flyers, they were bound to pull back. The question is can they maintain their category leadership? And for the most part, we think they can. All right, let's get into some of the ETR data. Here's our favorite XY view with net score, or spending momentum on the Y-axis, and market share or pervasiveness in the data center on the horizontal axis. That red 40% line, that indicates a highly elevated spending level. And the chart inserts to the right, that shows how the data is plotted with net score and shared N in each of the columns by each company. Okay, so this is an eye chart, but there really are three main takeaways. One is that it's a crowded market. And this shows only the companies ETR captures in its survey. We filtered on those that had more than 50 mentions. So there's others in the ETR survey that we're not showing here, and there are many more out there which don't get reported in the spending data in the ETR survey. Secondly, there are a lot of companies above the 40% mark, and plenty with respectable net scores just below. Third, check out SentinelOne, Elastic, Tanium, Datadog, Netskope, and Darktrace. Each has under 100 N's but we're watching these companies closely. They're popping up in the survey, and they're catching our attention, especially SentinelOne, post-IPO. So we wanted to pare this back a bit and filter the data some more. So let's look at companies with more than 100 mentions in the same chart. It gets a little cleaner this picture, but it's still crowded. Auth0 leads everyone in net score. Okta is also up there, so that's very positive sign since they had just acquired Auth0. CrowdStrike SalePoint, Cyberark, CloudFlare, and Zscaler are all right up there as well. And then there's the bigger security companies. Palo Alto Network, very impressive because it's well above the 40% mark, and it has a big presence in the survey, and, of course, in the market. And Microsoft as well. They're such a big whale. They skew the data for everybody else to kind of mess up these charts. And the position of Cisco and Splunk make for an interesting combination. They get both decent net scores, not above the 40% line but they got a good presence in the survey as well. Thinking about the acquisition, Al Shugart was the CEO of of Seagate, and founder. Brilliant Silicon valley icon and engineer. Great business person. I was asking him one time, hey, you thinking about buying this company or that company? And of course, he's not going to tell me who he's thinking about buying or acquiring. He said, let me just tell you this. If you want to know what I'm thinking, ask yourself if it were free, would you take it? And he said the answer's not always obviously yes, because acquisitions can be messy and disruptive. In the case of Cisco and Splunk, I think the answer would be a definitive yes It would expand Cisco's portfolio and make it the leader in security, with an opportunity to bring greater operating leverage to Splunk. Cisco's just got to pay more if it wants that asset. It's got to pay more than the supposed $20 billion offer that it made. It's going to have to get kind of probably north of 23 billion. I pinged my ETR colleague, Erik Bradley, on this, and he generally agreed. He's very close to the security space. He said, Splunk isn't growing the customer base but the customers are sticky. I totally agree. Cisco could roll Splunk into its security suite. Splunk is the leader in that space, security information and event management, and Cisco really is missing that piece of the pie. All right, let's filter the data even more and look at some of the companies that have moved in the survey over the past year and a half. We'll go back here to July 2020. Same two-dimensional chart. And we're isolating here Auth0, Okta, SalePoint CrowdStrike, Zscaler, Cyberark, Fortinet, and Cisco. No Microsoft. That cleans up the chart. Okay, why these firms? Because they've made some major moves to the right, and some even up since last July. And that's what this next chart shows. Here's the data from the January 2022 survey. The arrow start points show the position that we just showed you earlier in July 2020, and all these players have made major moves to the right. How come? Well, it's likely a combination of strong execution, and the fact that security is on the radar of every CEO, CIO, of course, CSOs, business heads, boards of directors. Everyone is thinking about security. The market momentum is there, especially for the leaders. And it's quite tremendous. All right, let's now look at what's become a bit of a tradition with Breaking Analysis, and look at the firms that have earned four stars. Four-star firms are leaders in the ETR survey that demonstrate both a large presence, that's that X-axis that we showed you, and elevated spending momentum. Now in this chart, we filter the N's. Has to be greater than 100. And we isolate on those companies. So more than 100 responses in the survey. On the left-hand side of the chart, we sort by net score or spending velocity. On the right-hand side, we sort by shared N's or presence in the dataset. We show the top 20 for each of the categories. And the red line shows the top 10 cutoffs. Companies that show up in the top 10 for both spending momentum and presence in the data set earn four stars. If they show up in one, and make the top 10 in one, and make the top 20 in the other, they get two stars. And we've added a one-star category as honorable mention for those companies that make the top 20 in both categories. Microsoft, Palo Alto Networks, CrowdStrike, and Okta make the four-star grade. Okta makes it even without Auth0, which has the number one net score in this data set with 115 shared N to boot. So you can add that to Okta. The weighted average would pull Okta's net score to just above Cyberark's into fourth place. And its shared N would bump Okta up to third place on the right-hand side of the chart Cisco, Splunk, Proofpoint, KnowBe4, Zscaler, and Cyberark get two stars. And then you can see the honorable mentions with one star. Now thinking about a Cisco, Splunk combination. You'd get an entity with a net score in the mid-20s. Yeah, not too bad, definitely respectable. But they'd be number one on the right-hand side of this chart, with the largest market presence in the survey by far. Okay, let's wrap. The trends around hybrid work, cloud migration and the attacker escalation that continue to drive cybersecurity momentum and they're going to do so indefinitely. And we've got some bullet points here that you're seeing private companies, (laughs) they're picking up gobs of money, which really speaks to the fact that there's no silver bullet in this market. It's complex, chaotic, and cash-rich. This idea of MSSPs on the rise is going to continue, we think. About half the mid-size and large organization in the US don't have a SecOps, a security operation center, and outsourcing to one that can be tapped on a consumption basis, cloud-like, as a service just makes sense to us. We see the momentum that companies that we've highlighted over the many quarters of Breaking Analysis are forming. They're forming a strong base in the market. They're going for market share and footprint, and they're focusing on growth, at bringing in new talent. They have good balance sheets and strong management teams and we think they'll be leading companies in the future, Zscaler, CrowdStrike, Okta, SentinelOne, Cyberark, SalePoint, over time, joining the ranks of billion dollar cyber firms, when I say billion dollar, billion dollar revenue like Palo Alto Networks, Fortinet, and Splunk, if it doesn't get acquired. These independent firms that really focus on security. Which underscores the pressure and consolidation and M&A in the whole space. It's almost assured with the fragmentation of companies and so many new entrants fighting for escape velocity that this market is going to continue with robust M&A and consolidation. Okay, that's it for today. Thanks to my colleague, Stephanie Chan, who helped research this week's topics, and Alex Myerson on the production team. He also manages the Breaking Analysis podcast. Kristen Martin and Cheryl Knight, who get the word out. Thank you to all. Remember these episodes are all available as podcasts wherever you listen. All you do is search Breaking Analysis podcast. Check out ETR's website at etr.ai. We also publish a full report every week on wikibon.com and siliconangle.com. You can email me at david.vellante@siliconangle.com. @dvellante is my DM. Comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights powered by ETR. Have a great week. Be safe, be well, and we'll see you next time. (upbeat music)

(upbeat music) >> Announcer: From theCUBE studios in Palo Alto in Boston connecting with thought leaders all around the world, this is theCUBE Conversation. >> Well, welcome to theCUBE Conversation here in theCUBE studios in Palo Alto, California. I'm John Furrier, your host. Got a great conversation with two great guests, going to explore the edge, what it means in terms of commercial, but also national security. And as the world goes digital, we're going to have that deep dive conversation around how it's all transforming. We've got Ki Lee, Vice President of Booz Allen's Digital Business. Ki, great to have you. John Pisano, Principal at Booz Allen's Digital Cloud Solutions. Gentlemen, thanks for coming on. >> And thanks for having us, John. >> So one of the most hottest topics, obviously besides cloud computing having the most refactoring impact on business and government and public sector has been the next phase of cloud growth and cloud scale, and that's really modern applications and consumer, and then here for national security and for governments here in the U.S. is military impact. And as digital transformation starts to go to the next level, you're starting to see the architectures emerge where the edge, the IoT edge, the industrial IoT edge, or any kind of edge concept, 5G is exploding, making that much more of a dense, more throughput for connectivity with wireless. You got Amazon with Snowball, Snowmobile, all kinds of ways to deploy technology, that's IT like and operational technologies. It's causing quite a cloud operational opportunity and disruption, so I want to get into it. Ki, let's start with you. I mean, we're looking at an architecture that's changing both commercial and public sector with the edge. What are the key considerations that you guys see as people have to really move fast in this new architecture of digital? >> Yeah, John, I think it's a great question. And if I could just share our observation on why we even started investing in edge. You mentioned the cloud, but as we've reflected upon kind of the history of IT, then you take a look from mainframes to desktops to servers to cloud to mobile and now IoT, what we observed was that industry investing in infrastructure led to kind of an evolution of IT, right? So as you mentioned, with industry spending billions on IoT and edge, we just feel that that's going to be the next evolution. If you take a look at, you mentioned 5G, I think 5G will be certainly an accelerator to edge because of the resilience, the lower latency and so forth. But taking a look at what's happening in space, you mentioned space earlier as well, right, and what Starlink is doing by putting satellites to actually provide transport into the space, we're thinking that that actually is going to be the next ubiquitous thing. Once transport becomes ubiquitous, just like cloud allows storage to be ubiquitous. We think that the next generation internet will be space-based. So when you think about it, connected, it won't be connected servers per se, it will be connected devices. >> John: Yeah, yeah. >> That's kind of some of the observations and why we've been really focusing on investing in edge. >> I want to come back to that piece around space and edge and bring it from a commercial and then also tactical architecture in a minute 'cause there's a lot to unpack there, role of open source, modern application development, software and hardware supply chains, all are core issues that are going to emerge. But I want to get with John real quick on cloud impact, because you think about 5G and the future of work or future of play, you've got people, right? So whether you're at a large concert like Coachella or a 49ers or Patriots game or Redskins game if you're in the D.C. area, you got people there, of congestion, and now you got devices now serving those people. And that's their play, people at work, whether it's a military operation, and you've got work, play, tactical edge things. How is cloud connecting? 'Cause this is like the edge has never been kind of an IT thing. It's been more of a bandwidth or either telco or something else operationally. What's the cloud at scale, cloud operations impact? >> Yeah, so if you think about how these systems are architected and you think about those considerations that Ki kind of touched on, a lot of what you have to think about now is what aspects of the application reside in the cloud, where you tend to be less constrained. And then how do you architect that application to move out towards the edge, right? So how do I tier my application? Ultimately, how do I move data and applications around the ecosystem? How do I need to evolve where my application stages things and how that data and those apps are moved to each of those different tiers? So when we build a lot of applications, especially if they're in the cloud, they're built with some of those common considerations of elasticity, scalability, all those things; whereas when you talk about congestion and disconnected operations, you lose a lot of those characteristics, and you have to kind of rethink that. >> Ki, let's get into the aspect you brought up, which is space. And then I was mentioning the tactical edge from a military standpoint. These are use cases of deployments, and in fact, this is how people have to work now. So you've got the future of work or play, and now you've got the situational deployments, whether it's a new tower of next to a stadium. We've all been at a game or somewhere or a concert where we only got five bars and no connectivity. So we know what that means. So now you have people congregating in work or play, and now you have a tactical deployment. What's the key things that you're seeing that it's going to help make that better? Are there any breakthroughs that you see that are possible? What's going on in your view? >> Yeah, I mean, I think what's enabling all of this, again, one is transport, right? So whether it's 5G to increase the speed and decrease the latency, whether it's things like Starlink with making transport and comms ubiquitous, that tied with the fact that ships continue to get smaller and faster, right? And when you're thinking about tactical edge, those devices have limited size, weight, power conditions and constraints. And so the software that goes on them has to be just as lightweight. And that's why we've actually partnered with SUSE and what they've done with K3s to do that. So I think those are some of the enabling technologies out there. John, as you've kind of alluded to it, there are additional challenges as we think about it. We're not, it's not a simple transition and monetization here, but again, we think that this will be the next major disruption. >> What do you guys think, John, if you don't mind weighing in too on this as modern application development happens, we just were covering CloudNativeCon and KubeCon, DockerCon, containers are very popular. Kubernetes is becoming super great. As you look at the telco landscape where we're kind of converging this edge, it has to be commercially enterprise grade. It has to have that transit and transport that's intelligent and all these new things. How does open source fit into all this? Because we're seeing open source becoming very reliable, more people are contributing to open source. How does that impact the edge in your opinion? >> So from my perspective, I think it's helping accelerate things that traditionally maybe may have been stuck in the traditional proprietary software confines. So within our mindset at Booz Allen, we were very focused on open architecture, open based systems, which open source obviously is an aspect of that. So how do you create systems that can easily interface with each other to exchange data, and how do you leverage tools that are available in the open source community to do that? So containerization is a big drive that is really going throughout the open source community. And there's just a number of other tools, whether it's tools that are used to provide basic services like how do I move code through a pipeline all the way through? How do I do just basic hardening and security checking of my capabilities? Historically, those have tend to be closed source type apps, whereas today you've got a very broad community that's able to very quickly provide and develop capabilities and push it out to a community that then continues to adapt and add to it or grow that library of stuff. >> Yeah, and then we've got trends like Open RAN. I saw some Ground Station for the AWS. You're starting to see Starlink, you mentioned. You're bringing connectivity to the masses. What is that going to do for operators? Because remember, security is a huge issue. We talk about security all the time. Where does that kind of come in? Because now you're really OT, which has been very purpose-built kind devices in the old IoT world. As the new IoT and the edge develop, you're going to need to have intelligence. You're going to be data-driven. There is an open source impact key. So, how, if I'm a senior executive, how do I get my arms around this? I really need to think this through because the security risks alone could be more penetration areas, more surface area. >> Right. That's a great question. And let me just address kind of the value to the clients and the end users in the digital battlefield as our warriors to increase survivability and lethality. At the end of the day from a mission perspective, we know we believe that time's a weapon. So reducing any latency in that kind of observe, orient, decide, act OODA loop is value to the war fighter. In terms of your question on how to think about this, John, you're spot on. I mean, as I've mentioned before, there are various different challenges, one, being the cyber aspect of it. We are absolutely going to be increasing our attack surface when you think about putting processing on edge devices. There are other factors too, non-technical that we've been thinking about s we've tried to kind of engender and kind of move to this kind of edge open ecosystem where we can kind of plug and play, reuse, all kind of taking the same concepts of the open-source community and open architectures. But other things that we've considered, one, workforce. As you mentioned before, when you think about these embedded systems and so forth, there aren't that many embedded engineers out there. But there is a workforce that are digital and software engineers that are trained. So how do we actually create an abstraction layer that we can leverage that workforce and not be limited by some of the constraints of the embedded engineers out there? The other thing is what we've, in talking with several colleagues, clients, partners, what people aren't thinking about is actually when you start putting software on these edge devices in the billions, the total cost of ownership. How do you maintain an enterprise that potentially consists of billions of devices? So extending the standard kind of DevSecOps that we move to automate CI/CD to a cloud, how do we move it from cloud to jet? That's kind of what we say. How do we move DevSecOps to automate secure containers all the way to the edge devices to mitigate some of those total cost of ownership challenges. >> It's interesting, as you have software defined, this embedded system discussion is hugely relevant and important because when you have software defined, you've got to be faster in the deployment of these devices. You need security, 'cause remember, supply chain on the hardware side and software in that too. >> Absolutely. >> So if you're going to have a serviceability model where you have to shift left, as they say, you got to be at the point of CI/CD flows, you need to be having security at the time of coding. So all these paradigms are new in Day-2 operations. I call it Day-0 operations 'cause it should be in everyday too. >> Yep. Absolutely. >> But you've got to service these things. So software supply chain becomes a very interesting conversation. It's a new one that we're having on theCUBE and in the industry Software supply chain is a superly relevant important topic because now you've got to interface it, not just with other software, but hardware. How do you service devices in space? You can't send a break/fix person in space. (chuckles) Maybe you will soon, but again, this brings up a whole set of issues. >> No, so I think it's certainly, I don't think anyone has the answers. We sure don't have all the answers but we're very optimistic. If you take a look at what's going on within the U.S. Air Force and what the Chief Software Officer Nic Chaillan and his team, and we're a supporter of this and a plankowner of Platform One. They were ahead of the curve in kind of commoditizing some of these DevSecOps principles in partnership with the DoD CIO and that shift left concept. They've got a certified and accredited platform that provides that DevSecOps. They have an entire repository in the Iron Bank that allows for hardened containers and reciprocity. All those things are value to the mission and around the edge because those are all accelerators. I think there's an opportunity to leverage industry kind of best practices as well and patterns there. You kind of touched upon this, John, but these devices honestly just become firmware. The software is just, if the devices themselves just become firmware , you can just put over the wire updates onto them. So I'm optimistic. I think all the piece parts are taking place across industry and in the government. And I think we're primed to kind of move into this next evolution. >> Yeah. And it's also some collaboration. What I like about, why I'm bringing up the open source angle and I think this is where I think the major focus will shift to, and I want to get your reaction to it is because open source is seeing a lot more collaboration. You mentioned some of the embedded devices. Some people are saying, this is the weakest link in the supply chain, and it can be shored up pretty quickly. But there's other data, other collective intelligence that you can get from sharing data, for instance, which hasn't really been a best practice in the cybersecurity industry. So now open source, it's all been about sharing, right? So you got the confluence of these worlds colliding, all aspects of culture and Dev and Sec and Ops and engineering all coming together. John, what's your reaction to that? Because this is a big topic. >> Yeah, so it's providing a level of transparency that historically we've not seen, right? So in that community, having those pipelines, the results of what's coming out of it, it's allowing anyone in that life cycle or that supply chain to look at it, see the state of it, and make a decision on, is this a risk I'm willing to take or not? Or am I willing to invest and personally contribute back to the community to address that because it's important to me and it's likely going to be important to some of the others that are using it? So I think it's critical, and it's enabling that acceleration and shift that I talked about, that now that everybody can see it, look inside of it, understand the state of it, contribute to it, it's allowing us to break down some of the barriers that Ki talked about. And it reinforces that excitement that we're seeing now. That community is enabling us to move faster and do things that maybe historically we've not been able to do. >> Ki, I'd love to get your thoughts. You mentioned battlefield, and I've been covering a lot of the tactical edge around the DOD's work. You mentioned about the military on the Air Force side, Platform One, I believe, was from the Air Force work that they've done, all cloud native kind of directions. But when you talk about a war field, you talk about connectivity. I mean, who controls the DNS in Taiwan, or who controls the DNS in Korea? I mean, we have to deploy, you've got to stand up infrastructure. How about agility? I mean, tactical command and control operations, this has got to be really well done. So this is not a trivial thing. >> No. >> How are you seeing this translate into the edge innovation area? (laughs) >> It's certainly not a trivial thing, but I think, again, I'm encouraged by how government and industry are partnering up. There's a vision set around this joint all domain command control, JADC2. And then all the services are getting behind that, are looking into that, and this vision of this military, internet of military things. And I think the key thing there, John, as you mentioned, it's not just the connected of the sensors, which requires the transport again, but also they have to be interoperable. So you can have a bunch of sensors and platforms out there, they may be connected, but if they can't speak to one another in a common language, that kind of defeats the purpose and the mission value of that sensor or shooter kind of paradigm that we've been striving for for ages. So you're right on. I mean, this is not a trivial thing, but I think over history we've learned quite a bit. Technology and innovation is happening at just an amazing rate where things are coming out in months as opposed to decades as before. I agree, not trivial, but again, I think there are all the piece parts in place and being put into place. >> I think you mentioned earlier that the personnel, the people, the engineers that are out there, not enough, more of them coming in. I think now the appetite and the provocative nature of this shift in tech is going to attract a lot of people because the old adage is these are hard problems attracts great people. You got in new engineering, SRE like scale engineering. You have software development, that's changing, becoming much more robust and more science-driven. You don't have to be just a coder as a software engineer. You could be coming at it from any angle. So there's a lot more opportunities from a personnel standpoint now to attract great people, and there's real hard problems to solve, not just security. >> Absolutely. Definitely. I agree with that 100%. I would also contest that it's an opportunity for innovators. We've been thinking about this for some time, and we think there's absolute value from various different use cases that we've identified, digital battlefield, force protection, disaster recovery, and so forth. But there are use cases that we probably haven't even thought about, even from a commercial perspective. So I think there's going to be an opportunity just like the internet back in the mid '90s for us to kind of innovate based on this new kind of edge environment. >> It's a revolution. New leadership, new brands are going to emerge, new paradigms, new workflows, new operations, clearly great stuff. I want to thank you guys for coming on. I also want to thank Rancher Labs for sponsoring this conversation. Without their support, we wouldn't be here. And now they were acquired by SUSE. We've covered their event with theCUBE virtual last year. What's the connection with those guys? Can you guys take a minute to explain the relationship with SUSE and Rancher? >> Yeah. So it's actually it's fortuitous. And I think we just, we got lucky. There's two overall aspects of it. First of all, we are both, we partner on the Platform One basic ordering agreement. So just there we had a common mentality of DevSecOps. And so there was a good partnership there, but then when we thought about we're engaging it from an edge perspective, the K3s, right? I mean, they're a leader from a container perspective obviously, but the fact that they are innovators around K3s to reduce that software footprint, which is required on these edge devices, we kind of got a twofer there in that partnership. >> John, any comment on your end? >> Yeah, I would just amplify, the K3s aspects in leveraging the containers, a lot of what we've seen success in when you look at what's going on, especially on that tactical edge around enabling capabilities, containers, and the portability it provides makes it very easy for us to interface and integrate a lot of different sensors to close the OODA loop to whoever is wearing or operating that a piece of equipment that the software is running on. >> Awesome, I'd love to continue the conversation on space and the edge and super great conversation to have you guys on. Really appreciate it. I do want to ask you guys about the innovation and the opportunities of this new shift that's happening as the next big thing is coming quickly. And it's here on us and that's cloud, I call it cloud 2.0, the cloud scale, modern software development environment, edge with 5G changing the game. Ki, I completely agree with you. And I think this is where people are focusing their attention from startups to companies that are transforming and re-pivoting or refactoring their existing assets to be positioned. And you're starting to see clear winners and losers. There's a pattern emerging. You got to be in the cloud, you got to be leveraging data, you got to be horizontally scalable, but you got to have AI machine learning in there with modern software practices that are secure. That's the playbook. Some people are making it. Some people are not getting there. So I'd ask you guys, as telcos become super important and the ability to be a telco now, we just mentioned standing up a tactical edge, for instance. Launching a satellite, a couple of hundred K, you can launch a CubeSat. That could be good and bad. So the telco business is changing radically. Cloud, telco cloud is emerging as an edge phenomenon with 5G, certainly business commercial benefits more than consumer. How do you guys see the innovation and disruption happening with telco? >> As we think through cloud to edge, one thing that we realize, because our definition of edge, John, was actually at the point of data collection on the sensor themselves. Others' definition of edge is we're a little bit further back, what we call it the edge of the IT enterprise. But as we look at this, we realize that you needed this kind of multi echelon environment from your cloud to your tactical clouds where you can do some processing and then at the edge of themselves. Really at the end of the day, it's all about, I think, data, right? I mean, everything we're talking about, it's still all about the data, right? The AI needs the data, the telco is transporting the data. And so I think if you think about it from a data perspective in relationship to the telcos, one, edge will actually enable a very different paradigm and a distributed paradigm for data processing. So, hey, instead of bringing the data to some central cloud which takes bandwidth off your telcos, push the products to the data. So mitigate what's actually being sent over those telco lines to increase the efficiencies of them. So I think at the end of the day, the telcos are going to have a pretty big component to this, even from space down to ground station, how that works. So the network of these telcos, I think, are just going to expand. >> John, what's your perspective? I mean, startups are coming out. The scalability, speed of innovation is a big factor. The old telco days had, I mean, months and years, new towers go up and now you got a backbone. It's kind of a slow glacier pace. Now it's under siege with rapid innovation. >> Yeah, so I definitely echo the sentiments that Ki would have, but I would also, if we go back and think about the digital battle space and what we've talked about, faster speeds being available in places it's not been before is great. However, when you think about facing an adversary that's a near-peer threat, the first thing they're going to do is make it contested, congested, and you have to be able to survive. While yes, the pace of innovation is absolutely pushing comms to places we've not had it before, we have to be mindful to not get complacent and over-rely on it, assuming it'll always be there. 'Cause I know in my experience wearing the uniform, and even if I'm up against an adversary, that's the first thing I'm going to do is I'm going to do whatever I can to disrupt your ability to communicate. So how do you take it down to that lowest level and still make that squad, the platoon, whatever that structure is, continue survivable and lethal. So that's something I think, as we look at the innovations, we need to be mindful of that. So when I talk about how do you architect it? What services do you use? Those are all those things that you have to think about. What if I lose it at this echelon? How do I continue the mission? >> Yeah, it's interesting. And if you look at how companies have been procuring and consuming technology, Ki, it's been like siloed. "Okay, we've got a workplace workforce project, and we have the tactical edge, and we have the siloed IT solution," when really work and play, whether it's work here in John's example, is the war fighter. And so his concern is safety, his life and protection. >> Yeah. >> The other department has to manage the comms, (laughs) and so they have to have countermeasures and contingencies ready to go. So all this is, they all integrate it now. It's not like one department. It's like it's together. >> Yeah. John, I love what you just said. I mean, we have to get away from this siloed thinking not only within a single organization, but across the enterprise. From a digital battlefield perspective, it's a joint fight, so even across these enterprise of enterprises, So I think you're spot on. We have to look horizontally. We have to integrate, we have to inter-operate, and by doing that, that's where the innovation is also going to be accelerated too, not reinventing the wheel. >> Yeah, and I think the infrastructure edge is so key. It's going to be very interesting to see how the existing incumbents can handle themselves. Obviously the towers are important. 5G obviously, that's more deployments, not as centralized in terms of the spectrum. It's more dense. It's going to create more connectivity options. How do you guys see that impacting? Because certainly more gear, like obviously not the centralized tower, from a backhaul standpoint but now the edge, the radios themselves, the wireless transit is key. That's the real edge here. How do you guys see that evolving? >> We're seeing a lot of innovations actually through small companies who are really focused on very specific niche problems. I think it's a great starting point because what they're doing is showing the art of the possible. Because again, we're in a different environment now. There's different rules. There's different capabilities. But then we're also seeing, you mentioned earlier on, some of the larger companies, the Amazons, the Microsofts, also investing as well. So I think the merge of the, you know, or the unconstrained or the possible by these small companies that are just kind of driving innovations supported by the maturity and the heft of these large companies who are building out these hardened kind of capabilities, they're going to converge at some point. And that's where I think we're going to get further innovation. >> Well, I really appreciate you guys taking the time. Final question for you guys, as people are watching this, a lot of smart executives and teams are coming together to kind of put the battle plans together for their companies as they transition from old to this new way, which is clearly cloud-scale, role of data. We hit out all the key points I think here. As they start to think about architecture and how they deploy their resources, this becomes now the new boardroom conversation that trickles down and includes everyone, including the developers. The developers are now going to be on the front lines. Mid-level managers are going to be integrated in as well. It's a group conversation. What are some of the advice that you would give to folks who are in this mode of planning architecture, trying to be positioned to come out of this pandemic with a massive growth opportunity and to be on the right side of history? What's your advice? >> It's such a great question. So I think you touched upon it. One is take the holistic approach. You mentioned architectures a couple of times, and I think that's critical. Understanding how your edge architectures will let you connect with your cloud architecture so that they're not disjointed, they're not siloed. They're interoperable, they integrate. So you're taking that enterprise approach. I think the second thing is be patient. It took us some time to really kind of, and we've been looking at this for about three years now. And we were very intentional in assessing the landscape, how people were discussing around edge and kind of pulling that all together. But it took us some time to even figure it out, hey, what are the use cases? How can we actually apply this and get some ROI and value out for our clients? So being a little bit patient in thinking through kind of how we can leverage this and potentially be a disruptor. >> John, your thoughts on advice to people watching as they try to put the right plans together to be positioned and not foreclose any future value. >> Yeah, absolutely. So in addition to the points that Ki raised, I would, number one, amplify the fact of recognize that you're going to have a hybrid environment of legacy and modern capabilities. And in addition to thinking open architectures and whatnot, think about your culture, the people, your processes, your techniques and whatnot, and your governance. How do you make decisions when it needs to be closed versus open? Where do you invest in the workforce? What decisions are you going to make in your architecture that drive that hybrid world that you're going to live in? All those recipes, patience, open, all that, that I think we often overlook the cultural people aspect of upskilling. This is a very different way of thinking on modern software delivery. How do you go through this lifecycle? How's security embedded? So making sure that's part of that boardroom conversation I think is key. >> John Pisano, Principal at Booz Allen Digital Cloud Solutions, thanks for sharing that great insight. Ki Lee, Vice President at Booz Allen Digital Business. Gentlemen, great conversation. Thanks for that insight. And I think people watching are going to probably learn a lot on how to evaluate startups to how they put their architecture together. So I really appreciate the insight and commentary. >> Thank you. >> Thank you, John. >> Okay. I'm John Furrier. This is theCUBE Conversation. Thanks for watching. (upbeat music)

live from San Francisco celebrating ten years of high-tech coverage it's the cube covering vmworld 2019 brought to you by VMware and its ecosystem partners welcome to day two of the cubes coverage of VMworld 2019 double vowels two sets going on on our other set day Volante and John Fourier they're talking to Michael Dell they're talking to passenger but over here we know where the hot action is talking about even Steve Young you know the Hall of Fame quarterback from the 49ers knows what hyper-converged infrastructure is and they're from well I'm excited to welcome back to the program Chad Dunn who is the vice president of product management and hyper-converged infrastructure for Delly MC Chad great to see you great to be back soon and also I want to also welcome my guest host for this segment who is Bobby Allen coming up to us from Charlotte North Carolina a cube alum now flipping the desk and gonna be asking some questions with me so Chad well my first question is why did you put me up against Michael and Pat well because we knew you could take it you know some people would be like oh that's the other Chad even but Ron you know HCI you know still a big story it's a big piece of what goes into VMware's vfc yeah story there you know VMware's talking about there's 20,000 deployments that they have a v san and i believe you might know who the number one partner is in the number one solution set out of those 20 thousands I think I might and I think that's also the leading product in terms of volume and the leading product in terms of revenue in the hyper-converged market as a blast so I will give you a second you know give us some of the you know you know the the drum beat the chest thumping of how the VX RL product line and and your portfolio is doing the the portfolio is doing great and the integration of V CF on VX rail is just throwing gasoline on to the fire in terms of adoption you know we see hyper-converged now mainstream moving into the data center mission-critical applications are being run on it infrastructure as a service right alongside container as a service so a few things that we announced this week in addition to you know the latest update of VCF on rail we added fibre channel 2 to V X rail a move that people are very is very polarizing move for people to chat why we have people who continue to love their primary storage arrays that are fiber channel connected and very often we're selling to someone who's refreshing servers but they have life left on the the array they want to preserve it they want to migrate data so they demanded fiber channel we gave them fiber right so if I understand this though it's that I've seen certain HD eyes where there's like you know a faucet on the side that I can plug in I scuzzy now you're just saying there's that it's not like you haven't a V X rail that is you know fiber dole baked in through and through so there's a server architect there's still v Santa at the core of VX rail but we give you the option now attaching primary storage either in the context of VCF or or in standalone other big news is we've recently refreshed a product line to the next generation of Xeon processor the cascade Lake version that gives us about a 28 to 30 percent performance increase and Intel opt in cache drives so there are lots of hardware updates along with software updates that that accelerate our LCM or lifecycle management process so Chad thank you for the update but I've got a different question I want to go in a different direction I talk to customers all the time cxos what would you tell the ciock so who's who's scared to invest more in the data center because public cloud seems like the one is in its sales but obviously Dell has a story to tell how do you help them defend their their turf well III I don't think they should get territorial about that every customer that I engaged with has a hybrid cloud strategy and very often it's more than one public cloud there's always a champion challenger relationship right we as CX know you want to keep your vendors honest correct right so you may have multiple public clouds you may have multiple infrastructure providers but VMware and in VCF on the X rail can be that common thread between the two so I can use tools like VMware Cloud Health to determine where it makes sense to run the workload I think very seamlessly move that workload from a VCF on VX rail deployment into a public cloud when it makes sense I can bring it back when it makes sense I can move it to Amazon to Azure to Google to any one of the VMware cloud providers and really hedge my bets right in terms of where it's best to run that workload so we encourage public cloud are you seeing customers actually take advantage of those capabilities yet or is it something they're still kind of waiting to see how that develops in terms of hybrid multi-cloud we see customers taking advantage of it right away so I'll give you an example I have a large retail customer right now and they've got about 900 different workloads that are existing virtual machines so they're looking at how they either refactor those into cloud native and move them into the cloud or whether they rationalize some of those away which is sort of a natural process with the Dell technologies cloud platform which is based on VCF on the X rail they can effectively put off that decision and they can move those workloads into the public cloud as virtual machines and start to enjoy those economics while they decide which ones to refactor while they decide which ones to rationalize away yeah so chata tell tech world we talked a bunch about how I have you know V X rel is the underpinning for the VMware cloud on Dell EMC right here at the show you know we talk a lot about cloud and even you know kubernetes was mentioned just a few times a couple of times in the keynote there was some guy in the audience you know Hootin Hollerin about some of that but you know help us you know draw the line you know where your customers today what are they starting to do and you know where does that put this portfolio extend to in the future great well first of all I'm gonna do a session tomorrow morning at 9:30 and we're gonna be talking about the business aspect of containers of service and kubernetes to customers so a good session to check out if if the viewers can but from our perspective we see customers at different points in that journey toward container as a service or cloud native on their premises or in a hybrid cloud scenario and it's funny one of the slides that I'll do tomorrow says that about 71 percent of customers are spending their budgets on operating their infrastructures and services are traditional VMs when they want to be able to reinvest some of that money and move to cloud native now this is almost the exact same slide and same percentage that we use you know five six eight years ago to talk about keeping the lights on with 70 percent of IT budgets it was 8020 back then so it's the exact same dynamic we're seeing it really be mainstreamed now every dtw or EMC world that I would go to I would always ask how much of your workload is cloud native they would always say 1% how much is it going to be in five years they say we have no idea now they're telling us about what those projects are and and they're rapidly adopting them but the nice thing about the VCF on rail is you can create workload domains that are traditional infrastructure as a service with virtual machines but you can also spin up container as a service workload domain with d KS and NS xt and so as you start to refactor those applications and there's that balance changes you simply increase the number and the size of your cloud native workload domains and you shrink your infrastructure as a service so you're in an ideal spot to be able to run virtual infrastructure workload domains virtual desktop workload domains cloud native workload domains consistent operating model across-the-board consistent hardware layer which is VX rail so you get those economics and as your business demands change you as an IT operator are able to serve those DevOps organizations within your company because if you're not providing them a kubernetes dial-tone they're gonna find it right and you're gonna see shadow IT spring up and they're gonna be in the public cloud before you know what happens so Chad want one of the things that I'm curious about so this is a software conference obviously right we're talking about a lot of the goodness that's hypervisor and above yep what would you say to the person who says doesn't matter what sort of hardware I'm running is that a commodity what is Dells differentiate a value in this software-defined world if I wanted to be a smart aleck I would tell you to look at some of the other hyper-converged competitors who went software only and then go take a look at their market cap but if I wanted to be serious I would say that hardware really does matter and when you look at you know how we need to lifecycle manage that infrastructure and make it seamless and effortless for the customer it means that you need to think about that hardware layer so if I look inside a PowerEdge server for example there are between nine and twelve different programmable parts from BIOS to HBAs to drive firmware backplane power supply you name it all those things have dependencies on the software drivers that you use being able to look at that all in context and be able to update that all at once so users don't have to worry about the bits and bytes of drivers and and firmware compatibility really saves them money saves them time and effort and lets them concentrate on things they're gonna differentiate their business and we see customers making that switch daily now and understanding that they can now redeploy some of that cost and resources toward things that are more differentiated like you know moving to cloud native so Chad what about the folks that have a they've got a Dell footprint they've got some other competitors and that how do you help them where there may be in the midst of changing over right they've got some other manufacturers that provided hardware before some of that story may not be as consistent so what can they do when they may be in the midst of a change over so you really need to look at what that operating expense savings is gonna be so we we certainly want to get as much life out of that existing infrastructure as we can and then provide migration fibre channel and and IP attached storage is an example of that right where people are not necessarily ready to move away from those arrays so say great right continue to leverage those assets but also if it's an existing VC on infrastructure based on bare metal servers the migration from one VC on environment to another is a pretty seamless one right because you preserve that storage policy based management as you make the migration so you know it typically is a pretty easy migration for customers to move on to hyper conversion they think and obviously we'll provide whatever professional services are necessary right if you look it by the way and I'll plug VMware since I'm at at VMworld if you look at VMware HDX if we're doing migration across these environments either to or from a public cloud or from a legacy environment to a next-generation HCI environment that's one of the coolest tools out there for doing that migration and preserving all the policies security and Software Defined Networking policies and micro segmentation from one environment to the other so really impressed with with what VMware has done there yeah definitely a theme we've heard it this show is you know VMware talk to their install base and says oh my gosh you look at all these cloud native things out there and kubernetes is super hard so you know we're gonna build it enable it in there um when I've looked at the you know Dell and VMware family there's been a few different kubernetes options out there help gives a little clarity where that fits into your world and you know where we are today where it's going kind of yeah future yeah there has been a sort of a dichotomy of you know cloud native ins inside VMware and cloud native inside pivotal for example and we've worked with with both of those organizations in fact we've been very successful with what platform and container as a service on the x rail going to market with pivotal but now that PKS is moving into VMware and really all of pivotal is moving into VMware it sort of unifies that strategy and if you look at the acquisitions that VMware is making with hep tio and others and actually embedding kubernetes into ESX I I mean that's a game changer an absolutely game-changer so now we have all of the the software assets to you know build run and manage cloud native were closed all within the VMware portfolio now the great thing about VX rail is we inherit all that work natively and build that natively into our hyper-converged platform so you know we sort of get that for free so you know not only can we now be the the leading hyper-converged infrastructure player for infrastructure as a service of traditional VMs we now can expand that and be the number one player in the new container world and you know as you saw with the the performance discussion that Pat had yesterday they actually see these things running faster in a virtualized ESXi environment than we do on bare metal only single digits but that's pretty impressive right it's very counter intuitive right so we're really happy to be able to take advantage of that and we have still have the pivotal labs team which really gets engaged with these customers to make it more transformational in terms of how they develop and how they deliver applications to their end users and by the way I mean not to preview something that's pretty far down the road we're looking at how we change up how we deliver software updates in VX rail and how we architect the software to make it a continuous integration continuous delivery pipeline because we need to make the infrastructure more intelligent and more agile and products like VX rail ace which we just announced a dtw does exactly that right it gives us the ability to pull back telemetry from VX rail apply machine learning and in an artificial intelligence to it in our own cloud and then push that data back out to our VX rail users to Auto remediating problems so the infrastructure is going to get more agile and it's going to get more intelligent as we go yeah um we've been talking a bit about some of the future stuff before we go but want to bring back to you know one of the core things that we wanted to do in this space it was simplification how do we make it super easy when I talk to most people that do HCI it's like you know where is that it's like I don't know it got installed and I've never touched it since then my understanding you're doing some things even on the management side to make things even easier there's some virtual reality in there too no we like to think everything is real reality yeah we are doing things to to even further simplify our lifecycle management process to make that that infrastructure something that that operators don't need to worry about so we're now doing pre staging of updates future scheduling of updates pause and resume of updates to fit within customers maintenance windows more effectively we'll be doing updates that are delivered via the cloud through the ACE platform coming up in in a release that's that's about to ship so again the idea is to you know simultaneously make the the product more flexible but maintain the simplicity because as I said we've moved into these core data center deployments where people are buying you know six hundred eight hundred thousand units at a time and deploying its scale and they expect flexibility you know all the flexibility you would get with an ESXi server with all the simplification and and day 2 operations that you get from HDI so we're in a constant state of trying to balance those two things and optimize for both use cases and by the way at the same time software-defined networking containers are coming at us at light speed the VMware has acquired more more companies in the last three months and then I can name I can name them all so it's a very fast-moving space yeah I don't think I can keep over the last week all right Bobby final question I guess quick sound bite what should people know about VMware cloud on Dale that they don't know VMware cloud on Dell EMC formerly project to mention right the extension of the MC on the customer premises I think this is incredibly strategic for us and for VMware because it gives you that cloud consumption model on-premises in an operating expense model so just into two initial access with that beta customers are turned up and the feedback has been extremely positive vmware dell technologies cloud platform which is VCF on VX rail really off to the races on that right we've had huge uptake in that we're seeing deals of literally hundreds of nodes at a time data centers at a time are consuming this deploying it we're demoing it here at the show if you go to the nvidia booth all the VDI demos are being run on VCF on VX rail that's sitting over in a hotel across the street it's a very hot hotel room cuz we get a lot of GPUs in those but it's also something that users can actually go see it live and working nice alright and just a quick tip for you if you haven't made it to VM world or even if you came here Chad mentioned he's doing a session this week they do make all of those available to people out there and of course all of our content is always available on the cube net Chad Dunn always great to catch up with you Bobby Allen thanks so much for joining me for this segment and my audience as always thanks for watching the Q

>> From Sand Hill Road in the heart of Silicon Valley, it's theCUBE. Presenting, the People First Network, insights from entrepreneurs and tech leaders. >> Hello everyone I'm John Furrier with theCUBE, we are here in Sand Hill Road up at Mayfield Venture Capital Firm for their 50th anniversary, their People First Network series, produced with theCUBE and Mayfield, I'm John Furrier, with Bill Schlough, the Chief Information Officer of the San Francisco Giants, CUBE alumni, great to see you thanks for joining me today for this People First Series we're doing with Mayfield's 50th anniversary, thanks for coming in. >> Good to be here, John. >> So, been a while since we chatted, it's been a year, A lot's happening in tech, you can't go a year, that's like seven dog years in tech, lot happening, you're managing, as the CIO for the Giants, a lot of things going on in baseball, what's the priorities for you these days, obviously, you guys, great social, great fan experience, what's new for you, what's the priority? >> Man, there's always something new. It's what I love about it, this'll be my 20th season with the Giants comin' up. And, it never gets old, there's always new challenges. On the field, in the seats, off the field, you name it. As we look toward next year, really excited about bringin' in a new video board, which we haven't publicly announced, maybe I just did publicly announce, we're breaking news on theCUBE today. So we're puttin' in a new video board, it'll be over three times the size of the one we have today. That's big news, we're doing a lot of exciting things in the ticketing world. The ticketing world is really transforming right before our eyes in terms of the way fans buy tickets. It's changed a lot. Once up on a time you could call a game a sellout, and we sold out 530 straight games at AT&T Park, but really there's no such thing as a sellout anymore I mean, at any point you can get a great ticket, so we have to adapt to that and change the product that we're delivering to fans, so making some changes on the ticketing front, the fan experience, the ballpark with the video board, and another thing that's changing a lot is the way fans consume our game when they're not at the ballpark. It's rare that you're going to see somebody sit on a couch for three plus hours and watch a game continuously anymore. Fans are consuming through mobile devices, streaming, catching clips here and there, all different methods, and it's fun to be a part of that, because, fans still love the game, but they're just consuming it in different ways. >> Yeah, I love having chats with you on theCUBE because one of the things that have always been the same from nine years doing theCUBE is, the buzzword of consumerization of IT has been out there, overused, but you're living it, you have a consumer product, the ultimate consumer product, in Major League Baseball, and the Giants, great franchise, in a great city, in a great stadium, with a rabid fanbase, and they know tech, so you have all the elements of tech, but the expectation of consumers, and the experiences are changing all the time, you got to deliver on the expectations and introduce new experiences that become expectations, and this is the flywheel of innovation, and it's really hard, but I really respect what you guys are doing over there, and that's why I'm always curious, but, always, the question comes back to, is, can I get faster wifi in the stadium? (laughs) It's always the number one question >> It's funny that you ask that because it is AT&T Park, you know, so, honestly, we got to check that box, and we've had to for years, all the way back to when we first rolled it out, way back in 2004 when we first rolled out wifi in the park, people weren't asking for it then, people were coming to the ballpark with a laptop and plugging a card into it, and there were about a hundred of them that were accessing it, but today, what's interesting is, who knows what next, but we're not talkin' about wifi as much, wifi is just kind of, expected, you got to have it, like water. You're talkin' about 5G networks, and new ways to connect. Honestly, this past season, our wifi usage in terms of the number of fans that use wifi, what we call the take rate, the percentage of fans, was actually down 30% from the previous year. Not because we had less fans in the stadium, because this is the take rate, a percentage of fans in the stadium, went down, because AT&T made some massive investments in their cellular infrastructure at the ballpark, and if you're just connecting, and you got great bandwidth, you don't feel the need to switch over to wifi, so who knows what the future will hold? That's a great point, and you see the LTE networks have so much more power, it used to be you needed wifi to upload your photos, so you'd go in, log in, and if they auto login that's cool, but people don't need to. >> Not with photos, what they need it now for is when we see it really maxing out is events, like our Eagles concert, or Journey concert, or a really big game, like opening day, or honestly, Warriors playoffs game, 49ers football games, that's when folks are streamin' to video. For streamin' to video, they're still goin' to that wifi. Yeah, that's the proven method, plus they don't want to jack up their charges on the AT&T site, but I won't go there, Let's talk about innovat-- Most say unlimited, I will go there, most say unlimited these days. >> Really, I got to find that plan, my daughter's killin' me with her watchin' Netflix on LTE, I tell her. Innovation is changing, I want to get your thoughts on this, 'cause I know you're on the front end of a lot of innovations, you do a lot of advising here at Mayfield. The VC's always trying to read the tea leaves, you're living it, what's the innovation formula look like now for you 'cause as you're sittin' in your staff meetings, as you look at the team of people around you, you guys want to foster, you do foster, innovation culture. What's the formula, what do you guys do when you have those meetings, when everyone's sitting around the table sayin', what do we do next? "How do we create a better experience? "How can we get better fans, and better product "in their hands as fast as possible?" What's your strategy? >> You know, it's funny, people talk about the secret sauce for innovation, what's the formula? I would say, for us, it's really a symbiotic relationship with a lot of things, first of all, where we are, geographically, we've got folks like Mayfield, down the street, and many others, that we can talk to, that are, when innovation is happening, when the startups are incubating, they're being funded by these guys, a lot of times they are here, and our phones are ringing off the hook with a lot of folks so my formula for innovation is answer the phone and take the meetings, but, to be honest, that creates its own problems, because there's so many great ideas out there, if you try to do all of them, you're going to fail at all of them. You got to pick a very small few to try to experiment with, give it a shot, we just don't have the bandwidth, we only have 250 full-time staff on the business side. For us, geographically, you have to really be laser-focused and say okay, there are so many great ideas out here, which are the three or four that we're going to focus on this year, and really give it a try, that's really going to drive, propel our business forward, enhance our product on the field, whatever it might be, but I'll tell you where it really truly starts. It's from the top with our CEO. And, I've had a few different bosses over the years, but with the Giants, our CEO is singularly focused on all of us doing things folks have never done before regardless of what business unit you're in. Whether you're in ticketing, finance, marketing, sales, what drives him, and drives all of us, is innovation. And his eyes glaze over when I talk to him about cost-cutting, and his eyes can glaze over really fast. But when I talk to him about doing something no one's ever done before, that's when he sits forward in his chair, he gets engaged, and I just have a great boss, Larry Baer, he's been with us for 25 years wit the Giants, and he is the driver for it, he creates the culture from the top, where all of us, we want to impress him, and to impress him, you got to do sometin' nobody's ever done before, and what's even more interesting is there are some challenges and some changes talking place across our industry, as I said before, ticketing and other areas, and I've sat in meetings with him where somebody might raise their hand and say, "But this is happening across the industry, "so it's just a macro trend," and he'll get upset, be like, "I don't care about macro trends. "We are here in the Bay Area, "we're the San Francisco Giants, "we're going to do it our way." >> And so when you do it your way, he promotes risk-taking, so that's a great culture. What are some of the things you have tried that were risky, and/or risque, or maybe an experiment, that went well, and maybe ones that didn't go well, can you share some color commentary around that? >> Sure, over 20 years we've had some of all of those. I would say, I've had some real scary moments, our culture is collaborative, but I wouldn't call it combative, but we all have strong opinions, a lot of us have been there a long time, and we have strong opinions and so we'll battle, internally, a lot, but then once the battle is over, we'll all align behind the victory. Thinking back, one of the most stressful times for me at the ballpark was related to wifi, when we decided to take our antennas and put 'em under people's seats. No one had ever done that before, and there were two major concerns with that. One is, honestly are people going to get cancer from these antennas under their seats, it's never been done before, what's going to happen, and whether it's going to happen or not, what's the perception of our fans going to be, because, these are, the bread and butter is, the golden goose here, all the fans, so, yeah it's great that they're going to be, have faster connection here at AT&T Park, but if they think they're going to get cancer, they're going to cancel their season ticket plans, we got to problem. Number two is, we're taking away a little storage space also, under the seats, so it was very controversial internally, we did all of our research, we proved that having a wifi antennae under your seat is the equivalent to having a cell phone in your pocket, most people do that, so we're pretty safe there, and from the storage space perspective, honestly, it actually elevates your stuff, if somebody spills a Coke behind ya, it'll fall all around your purse, which is sitting on top of that wifi antenna so we came up with a good solution, but that was an example of something that was really controversial >> So beer goes on the antennae not your bag. (laughs) >> Exactly, your bag stays dry, we found a way to spin that but, there have been so many, I can go way back in time, back to the days when it was the PalmPilot that ruled the day instead of the apple >> Well you guys also did a good job on social media, I got to give you guys props, because, you're one of the first early adopters on making the fan experience very interactive. That was, at that time, not viewed as standard. Yeah, built the @Cafe at our ballpark, which is still there really to try to bring social media to the fans. >> I think you're the first ballpark to have a kale garden, too, I think. >> That's a little off topic, but yes, driven by one of our players, who's a big kale fan, yeah, the garden out in center field. >> So sustainibility's certainly important, okay, I got to ask the question around your role in the industry, because one of the things that's happening more and more in Major League Baseball and certainly as it crosses over to tech her at Mayfield Venture Capital, there's a lot of collaboration going on, and it's a very people-centric culture where, it used to be people would meet at conferences, or you'd do conference calls, now people are in touch in real time, so these networks are forming. It takes a village to create innovative products, whether you're inside the Giants, or outside in the ecosystem, how have you personally navigated that, and can you share some experiences to the folks watching, how you became successful working in an environment where it's collaborative inside the walls of the San Francisco Giants, but also outside? >> %100, the topic is near and dear to my heart, and from when I started with the Giants, that's what I love about our industry We compete on the field, and only on the field. When you look at who the Giants competitors are, from a business perspective, honestly the Dodgers are not a competitor from a business perspective. The A's are barely a competitor from a business perspective. We got a lot of competitors and very few of them are in our actual industry, so we collaborate all day, and it's been amazing, I can count on one hand, across all of sports, folks who have not been collaborative. There's a very small group of teams, your favorite team, the Boston Red Sox, are not on that list, they are very collaborative, but their arch rival, well there's a few others out there that may be less collaborative, but most of them are highly collaborative, from top down, and so, what I did from when I first started the first trip I made, was to Cleveland. And this was many years ago, Cleveland Indians had a reputation of being very progressive so I called up my counterpart there, I said, "I'm new to the industry, can I come out, "can I learn from you?" And that's where it started, and ever since, every year, we travel to two cities, I take at least four of my staff, to two cities each year and we meet with all the sports teams in those cities. This year, we went to Milwaukee and we met with the Brewers, and we did the Packers as well. Every year, over the 20 years we've visited pretty much every professional sports city, and we just go through it again, and always, red carpet, open door, and you build those face-to-face relationships, that you can pick up the phone and make the call, in a few weeks we're all going to get together in Denver at our MLB IT Summit, my job at the IT Summit every year is I host the golf classic, so I bring all the golfers, the hackers, the duffers out, and we have a great time on the golf course and build those relationships and again, the only thing that we don't really talk about that much is the technology we use to enhance the product on the field. Everything else is fair game. >> So share the business side, but the competitive advantage, where the battle's really having Dodger and Giants obviously on the field, highly competitive-- >> But what's cool about that is then I can meet with the other sports teams to talk about that, so I'll leave the teams nameless, but we've had some awesome collaborative discussions with NBA teams especially to talk about what they're doing to assess talent, and there's no competition there. >> So there's kind of rules of the road, kind of like baseball, unwritten rules. >> Right. >> So talk about the coolest thing that you guys have done this year, share something that you personally feel proud of, or fans love, what were some of the cool things this year that pops out for you? >> Sure, the technology that we invested in this year that I thought was a game-changer, we saw, we experimented with last season, but this year, we've been experimenting with VR and AR a little bit. But, a technology that we thought was really cool is called 4DReplay, it's a company out of Korea. And we saw them, we did an experiment with them, and then we implemented them for the full season this year and we've seen them at some other venues as well, the Warriors tried them at the Playoffs, but we had 'em full year and what we did was they put in about 120 cameras, spaced approximately five feet apart, between the bases. 120 of 'em, and they focus on the pitcher and the batter, so when you have a play, you can 3D, or 4D, 4D rotate around that play and watch the ball as it's moving off the bat, and get it from that full perspective, it's awesome for the fan experience, it gives them a perspective they never have, I love watching the picture, because you can see that hand, in full 4D glory pronating as it comes through on every pitch, if you can watch that hand carefully you can predict what kind of pitch it is, it's something that a fan has never had access to before, we did that for the first time this year. >> I had a new experience, obviously you see Statcast on TV now, a lot of this overlayed stuff happening, kind of creates like an esports vibe to the table. Esports is just coming. >> And it's just the beginning >> Your thoughts on esports, competitor, natural evolution, baseball's going to be involved in it, obviously, thing in the emerging technology's looking interesting, and the younger generation wants the hot, young... Sure, we feel like our game has been around a long time, and it still is, the rules haven't changed that much, but fans still enjoy it, but they just consume it differently and our game can be incredibly exciting in moments, but, there's also some gaps in there when you can build relationships. Some of the younger generation may fill those gaps with watching somethin' else, or two other things on their devices, but that's okay, we embrace that at the ballpark, but in terms of the emergence of esports, and the changing demographic of our fanbase, what we're trying to do is just package our game differently. One thing I'm really excited about, and startin' to see, we're in the early days, I consider with virtual reality, we experiment with it, maybe two or three years ago we've been doing some stuff with it, but I'd say it feels like we're in the second or third inning with virtual reality, where we're really going, and I've seen Intel doin' some of this stuff, I was out working with Intel in Pyeongchang, at the Olympics this past year, working with their PR team, and where it's going I can already visualize what this is going to be like, this concept of volumetric video. Where, it's not about having that courtside seat, in basketball, or that seat right behind home plate, it's about being wherever you want to be, anywhere in the action. And to me it's not about doin' it live, because in baseball, you don't know where the ball's going to go, it's about doin' it, replay, right after, okay, that ball was shot to Brandon Crawford, he made the most amazing diving play, picked it up, gunned it to first, where do you want to watch that from? Everybody's different, some people might want to watch it from right behind first base, some people might want to watch it right Brandon Crawford, behind the batter, with volumetric video and the future of VR, you'll be able to do that, and this esports generation, this fan's instant gratification want, unique experiences, that's what's going to deliver it. >> This is such an immersive environment, we're looking at this kind of volumetric things from Intel, and you got VR and AR, immersion, is a new definition, and it's not, I won't say putting pressure, it's evolving the business model, who would've thought that DraftKings and these companies would be around and be successful, that's gambling, okay, you now you got that, your VR so the business model's changing, I've been hearing even token and cryptocurrency, maybe baseball cards will be tokenized. So these are kind of new, crazy ideas that might be new fan experience and a business model for you guys. Your thoughts on those kind of wacky trends. >> That's why I love working with companies like Mayfield 'cause they're seeing the future before we see it, and I love being where we are, so we can talk to them, and learn about these companies. Another example, along those lines is, how are fans going to get to the ballpark five years from now, and how do we adapt to that because we're doing a major development right adjacent to the ballpark, we've got 4,000 parking spaces. Are we going to need those five years from now? Well we're going to build out that whole parking lot, we're going to put a structure in there. But five, ten years from now, we're building that structure so it can be adaptable, because, is anyone going to need to park? Is parking going to be like typing, you know on a typewriter, 10, 15 years now because everybody is in either self-driving cars, or ride shares, and the cars just, poof, go away, and they come back when you need 'em. >> Like I said, everything that's been invented's been on Star Trek except for the transporter room, but maybe they could transport to the game. >> We could use that in San Francisco. >> Bill, got to ask you about your role with Mayfield, because one of the things I've always been impressed with you is that you always have a taste for innovation, you're not afraid to put the toe in the water or jump in the deep end where the technology is, these guys are lookin' for some trends, too. How do you advise some of these guys, how do you work with Mayfield, what's the relationship, how are they to work with, what's the intersection between Mayfield and you? >> Well the one thing that Mayfield does is they put together a conference, each Summer, that I love comin' down to, and I get to meet a lot of my counterparts and we talked about meeting with my counterparts in sports, but I love meetin' with my counterparts across all industries, and Mayfield makes that possible, they bring us all together with some really interesting speakers on a variety of topics not all directly tech related, so it's a great opportunity for me to just get outside of the daily routine, get outside the box, open my mind, and I just have to drop down the road to do it. So that's an example, another thing is, Mayfield, and other firms will come to me, and just say, "Hey, here's a technology we're evaluating, "they think it would be a great fit in sports, "what do you think?" And so, I can give them some valuable feedback, on company's they're evaluating, companies will come to us, and I might throw them their way, so it's really a two way street >> Great relationship, so you're a sounding board for some ideas, you get to peek into the future, I mean, we've interviewed entrepreneurs, successful entrepreneurs here, it's a seven, eight year build out, so it's almost like an eight year peek into the future. >> Yeah, and it's super valuable, especially given where we are geographically and our inclination toward being on the leading edge. >> I want to just end the segment by sayin', thanks for comin' in, and I want you to show the ring there, 'cause I always, can't stop starin' at the hardware, you got the ring there, the world champion. >> It's a few years old at the moment, we're going to have to get a new one sometime soon. >> We got to work on that, so is there any cutting edge technology to help you evaluate the best player, who you lookin' at next year, what's goin' on? What's the trades goin' on, share us-- >> Are we off the record now, 'cause I have a feeling you're asking this for personal reasons, for your squad, so. >> I'm a Red Sox fan of the AL, obviously, moved here 20 years ago, big fan of the Giants, I love comin' to the games, you guys do a great job, fan experience is great, you guys do great job and I'm looking forward to seeing a great season. >> Thanks, yeah, hope springs eternal this time of year, we always block off October and expect to be busy, but when we have it back, it just gives us an opportunity to get a head start on everybody. >> Well Bill, thanks for coming in, Bill Schlough, CIO for the San Francisco Giants, here on Sand Hill Road talkin' about the 50th anniversary of Mayfield, and this is the People First Network, getting ideas from entrepreneurs, industry executives, and leaders. I'm John Furrier with theCUBE, thanks for watching. (electronic music)

>> Live, from Las Vegas! It's theCube! Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. >> Welcome back everyone, it's theCube's live coverage in Las Vegas for VMworld 2018, it's theCube. We got two sets, 24 interviews per day, 94 interviews total. Next three days, we're in day two of three days coverage. It's our ninth year of covering VMworld. It's been great. I'm John Furrier with Dave Vellante, next guest, Cube alumni, number one in the leading boards right now, Sanjay Poonen did a great job today on stage, keynote COO for VMware. Great to have you back. Thanks for coming on. >> John and Dave, you're always so kind to me, but I didn't realize you've been doing this nine years. >> This is our ninth year. >> That's half the life of VMware, awesome. Unreal. Congratulations. >> We know all the stories, all the hidden, nevermind, let's talk about your special day today. You had a really, so far, an amazing day, you were headlining the key note with a very special guest, and you did a great job. I want you to tell the story, who was on, what was the story about, how did this come about? Tech for good, a big theme in this conference has really been getting a lot of praise and a lot of great feedback. Take us through what happened today. >> Well listen, I think what we've been trying to do at VMware is really elevate our story and our vision. Elevate our partnerships, you've covered a lot of the narrative of what we've done with Andy Jessie. We felt this year, we usually have two 90 minute sessions, Day One, Day Two, and it's filled with content. We're technical company, product. We figured why don't we take 45 minutes out of the 180 minutes total and inspire people. With somebody who's had an impact on the world. And when we brainstormed, we had a lot of names suggested, I think there was a list of 10 or 15 and Malala stood out, she never spoke at a tech conference before. I loved her story, and we're all about education. The roots of VMware were at Stamford Campus. Diane Greene, and all of that story. You think about 130 million girls who don't go to school. We want to see more diversity in inclusion, and she'd never spoken so I was like, you know what, usually you go to these tech conferences and you've heard somebody who's spoken before. I'm like, lets invite her and see if she would come for the first time, and we didn't think she would. And we were able to score that, and I was still a little skeptical 'cause you never know is it going to work out or not. So thank you for saying it worked, I think we got a lot of good feedback. >> Well, in your first line, she was so endearing. You asked her what you thought a tech conference, you said too many acronyms. She just cracked the place up immediately. >> And then you heard my response, right? If somebody tells me like that, you tell VMotion wrong she looked at me what? >> Tell them about our story, real quick, our story I want to ask you a point in question. Her story, why her, and what motivated you to get her? >> Those stories, for any of you viewers, you should read the book "I'm Malala" but I'll give you the short version of the story. She was a nine year old in the Pashtun Area of the Swat Valley in Pakistan, and the Taliban setted a edict that girls could not go to school. Your rightful place was whatever, stay at home and become a mom with babies or whatever have you. You cannot go to school. And her father ran a school, Moster Yousafzai, wonderful man himself, an educator, a grandfather, and says know what, we're going to send you to school. Violating this order, and they gave a warning after warning and finally someone shot her in 2012, almost killed her. The bullet kind of came to her head, went down, and miraculously she escaped. Got on a sort of a hospital on a plane, was flown to London, and the world if you remember 2012, the world was following the story. She comes out of this and she's unscathed. She looks normal, she has a little bit of a thing on the right side of her face but her brains normal, everything's normal. Two years later she wins the Nobel Peace Prize. Has started the Malala Fund, and she is a force of nature, an amazing person. Tim Cook has been doing a lot with her in the Malala Fund. I think that actually caught my attention when Tim Cook was working with her, and you know whatever Apple does often gets a little bit of attention. >> Well great job selecting her. How's that relevant to what you guys are doing now, because you guys had a main theme Tech for Good? Why now, why VMware? A lot of people are looking at this, inspired by it. >> There are milestones in companies histories. We're at our 20 year birthday, and I'm sure at people's birthday they want to do big things, right? 20, 30, 40, 50, these decades are big ones and we thought, lets make this year a year to remember in various things we do. We had a 20 year anniversary celebration on campus, we invited Diane Greene back. It was a beautiful moment internally at Vmware during one of our employee meetings. It was a private moment, but just with her to thank her. And man, there were people emotional almost in tears saying thank you for starting this company. A way to give back to us, same way here. What better way to talk about the impact we're having in the community than have someone who is of this reputation. >> Well we're behind your mission 100%, anything you need. We loved the message, Tech for Good, people want to work for a mission driven company. People want to buy >> We hope so. >> from mission driven companies, that stated clear and the leadership you guys are providing is phenomenal. >> We had some rankings that came out around the same time. Fortune ranked companies who are changing the world, and VMware was ranked 17th overall, of all companies in the world and number one in the software category. So when you're trying to change the world, hopefully as you pointed out it's also an attractor of talent. You want to come here, and maybe even attractor of customers and partners. >> You know the other take-away was from the key note was how many Cricket fans there are in the VMworld Community. Of course we have a lot of folks from India, in our world but who's your favorite Cricketer? Was it Sachin Tendulkar? (laughs) >> Clearly you're reading off your notes Dave! >> Our Sonya's like our, >> Dead giveaway! >> Our Sonya's like our Cricket Geek and she's like, ask him about Sachin, no who's your favorite Cricketer, she wants to know. >> Sachin Tendulkar's way up there, Shayuda Free, the person she likes from Pakistan. I grew up playing cricket, listen I love all sports now that I'm here in this country I love football, I love basketball, I like baseball. So I'll watch all of them, but you know you kind of have those childhood memories. >> Sure >> And the childhood memories were like she talk about, India, Pakistan games. I mean this was like, L.A. Dodgers playing Giants or Red Socks, Yankee's, or Dallas Cowboys and the 49ers, or in Germany playing England or Brazil in the World Cup. Whatever your favorite country or team rivalry is, India Pakistan was all there more, but imagine like a billion people watching it. >> Yeah, well it was a nice touch on stage, and I'd say Ted Williams is my favorite cricketer, oh he plays baseball, he's a Red Sock's Player. Alright Sanjay, just cause your in the hot seat, lets get down to business here. Great moment on stage, congratulation. Okay Pat Gelsinger yesterday on the key note talked about the bridges, VMware bridging, connecting computers. One of the highlights is kind of in your wheelhouse, it's in your wheelhouse, the BYOD, Bring Your Own Device bridge. You're a big part of that. Making that work on on the mobile side. Now with Cloud this new bridge, how is that go forward because you still got to have all those table stakes, so with this new bridge of VMware's in this modern era, cloud and multicloud. Cluely validated, Andy Jassy, on stage. Doing something that Amazon's never done before, doing something on premise with VMware, is a huge deal. I mean we think it's a massive deal, we think it's super important, you guys are super committed to the relationship on premises hybrid cloud, multicloud, is validated as far as we're concerned. It's a done deal. Now ball's in your court, how are you going to bring all that mobile together, security, work space one, what's your plan? >> I would say that, listen on as I described in my story today there's two parts to the VMware story. There's a cloud foundation part which is the move the data center to the cloud in that bridge, and then there's the desk job move it to the mobile. Very briefly, yes three years of my five years were in that business, I'm deeply passionate about it. Much of my team now that I put in place there, Noah and Shankar are doing incredible jobs. We're very excited, and the opportunity's huge. I said at my key note of the seven billion people that live in the world, a billion I estimate, work for some company small or big and all of them have a phone. Likely many of those billion have a phone and a laptop, like you guys have here, right? That real estate of a billion in a half, maybe two billion devices, laptops and phones, maybe in some cases laptop, phone, and tablets. Someone's going to manage and secure, and their diverse across Apple, Google, big option for us. We're just getting started, and we're already the leader. In the data center, the cloud world, Pat, myself, Raghu, really as we sat three years ago felt like we shouldn't be a public cloud ourselves. We divested vCloud Air, as I've talked to you on your show before, Andy Jassy is a friend, dear friend and a classmate of mine from Harvard Business School. We began those discussions the three of us. Pat, Raghu, and myself with Andy and his team and as every quarter and year has gone on they become deeper and deep partnerships. Andy has told other companies that VMware Amazon is the model partnership Amazon has, as they describe who they would like to do business more with. So we're proud when they do that, when we see that happen. And we want to continue that. So when Amazon came to us and said listen I think there's an opportunity to take some of our stack and put it on premise. We kept that confidential cause we didn't want it to leak out to the world, and we said we're going to try'n annouce it at either VMworld or re:Invent. And we were successful. A part with these projects is they inevitably leak. We're really glad no press person sniffed it out. There was a lot of speculation. >> Couldn't get confirmation. >> There was a lot of speculation but no one sniffed it out and wrote a story about it, we were able to have that iPhone moment today, I'm sorry, yesterday when we unveiled it. And it's a big deal because RDS is a fast growing business for them. RDS landing on premise, they could try to do on their own but what better infrastructure to land it on than VMware. In some cases would be VMware running on VxRail which benefits Dell, our hardware partners. And we'll continue doing more, and more, and more as customers desire, so I'm excited about it. >> Andy doesn't do deals, as you know Andy well as we do. He's customer driven. Tell me about the customer demand on this because it's something we're trying to get reporting on. Obviously it makes sense, technically the way it's working. You guys and Andy, they just don't do deals out of the blue. There's customer drivers here, what are those drivers? >> Yeah, we're both listening to our customers and perhaps three, four, five years ago they were very focused on student body left, everybody goes public cloud. Like forget your on premise, evaporate, obliterate your data centers and just go completely public. That was their message. >> True, sweep the floor. >> Right, if you went to first re:Invent I was there on stage with them as an SAP employee, that's what I heard. I think you fast forward to 2014, 2015 they're beginning to realize, hey listen it's not as easy. Refactoring your apps, migrating those apps, what if we could bring the best of private cloud and public cloud together enter VMware and Amazon. He may have felt it was harder to have those cultivations of VMware or for all kinds of reasons, like we had vCloud Air and so on and so forth but once we divested that decision culminations had matured between us that door opened. And as that door opened, more culminations began. Jointly between us and with customers. We feel that there are customers who want many of those past type of services of premise. Cause you're building great things, relational database technology, AI, VI maybe. IoT type of technologies if they are landing on premise in an edge-computing kind of world, why not land on VMware because we're the king of the private cloud. We're very happy to those, we progress those discussion. I think in infrastructure software VMware and Amazon have some of the best engineers on the planet. Sometimes we've engineers who've gone between both companies. So we were able to put our engineering team's together. This is a joint engineering effort. Andy and us often talk about the fact that great innovation's built when it's not just Barny go to Marketing and Marketing press releases this. The true joint engineering at a deep level. That's what happened the last several months. >> Well I can tell you right now the commitment I've seen from an executive level and deep technology, both sides are deep and committed to this. It's go big or go home, at least from our perspective. Question I want to ask you Sanjay is you're close to the customer's of VMware. What's the growth strategy? If you zoom out, look down on stage and you got vSAN, NSX at the core, >> vSANjay (laughs) >> How can you not like a product that has my name on it? >> So you got all these things, where's the growth going to come from, the merging side, is the v going to be the stable crown jewels at NSX? How do you guys see the growth, where's it going to come from? >> Just kind of look at our last quarter. I mean if you peel back the narrative, John and Dave, two years ago we were growing single digits. Like low single digits. Two, three percent. That was, maybe the legacy loser description of VMware was the narrative everyone was talking about >> License revenue was flattish right? >> And then now all of sudden we're double digits. 12, 15 sort of in that range for both product revenue. It's harder to grow faster when you're bigger, and what's happened is that we stabilize compute with vSphere in that part and it's actually been growing a little bit because I think people in the VMware cloud provider part of our business, and the halo effect of the cloud meant that as they refresh the servers they were buying more research. That's good. The management business has started to grow again. Some cases double digits, but at least sort of single digits. NSX, the last few order grew like 30, 40%. vSAN last year was growing 100% off a smaller base, this year going 60, 70%. EUC has been growing double digits, taking a lot of share from company's like Citrix and MobileIron and others. And now, also still growing double digits at much bigger paces, and some of those businesses are well over a billion. Compute, management, end-user computing. We talked about NSX on our queue forming called being a 1.4 billion. So when you get businesses to scale, about a billion dollar type businesses and their sort of four, training five that are in that area, and they all get to grow faster than the market. That's the key, you got to get them going fast. That's how you get growth. So we focus on those on those top five businesses and then add a few more. Like VMware Cloud on AWS, right now our goal is customer logo count. Revenue will come but we talked on our earnings call about a few hundred customers of VMware Cloud and AWS. As that gets into the thousands, and there's absolutely that option, why? Because there's 500,000 customers of VMware and two million customers of Amazon, so there's got to be a lot of commonality between those two to get a few thousand. Then we'll start caring about revenue there too, but once you have logos, you have references. Containers, I'd like to see PKS have a few hundred customers and then, we put one on stage today. National Commercial Bank of Jamaica. Fantastic story of PKS. I even got my PKS socks for this interview. (John laughs) >> So that give you a sense as to how we think, there will be four, five that our businesses had scale and then a few are starting to get there, and they become business to scale. The nature of software is we'll always be doing this show because there will be new businesses to talk about. >> Yeah, hardware is easy. Software is hard, as Andy Patchenstien said on theCUBE yesterday. Congratulations Sanjay and all the success, you guys are doing great financially. Products looking really good coming out, the bloom is rising from the fruit you guys have harvested, coming together. >> John if I can say one last thing, I shared a picture of a plane today and I put two engines behind it. There's something I've learned over the last years about focus of a company, and I joked about different ways that my name's are pronounced but at the core of me there's a DNA. I said on stage I'd rather not be known as smart or stupid but having a big heart. VMware, I hope is known by our customers as having these two engines. An engine of innovation, innovating product and a variety of other things. And focused on customer obsession. We do those, the plane will go a long way. >> And it's looking good you guys, we can say we've been to Radio Event, we've been doing a lot of great stuff. Congratulations on the initiative, and a great interview with you today on doing Tech for Good and sharing your story. Getting more exposure to the kind of narratives people want to hear. More women in tech, more girls in tech, more democratization. Congratulations and thanks so much for sharing. >> Thank you John and Dave. >> Appreciate you being here. >> Sanjay Poonen, COO of VMware. Friend of theCUBE, Cube Alumni, overall great guy. Big heart and competitive too, we know that from his Twitter stream. Follow Sanjay on Twitter. You'll have a great time. I'm John Furrier with Dave Vellante, stay with us for more coverage from day two live, here in Las Vegas for VMware 2018. Stay with us. (tech music)

>> Announcer: Live from Chicago, Illinois, it's theCUBE. Covering VeeamOn 2018. Brought to you by VeeamOn. >> We're back. VeeamOn 2018. You're watching theCUBE, the leader in live tech coverage, where we go out to the events and we extract the signal from the noise. Dave Vellante, with my co-host Stu Miniman and Marc Crespi is here. He's the Vice President of Sales Engineering at ExaGrid, another Mass boy. Welcome back to theCUBE. Good to see you again, Marc. >> Thanks, great to be with you guys again. Great to be on another fantastic VeeamOn in the world-class city of Chicago. >> Yeah, it's a great city. What's happening at VeeamOn for ExaGrid this year? >> Quite a few executive meetings, a lot of customer contact, existing customers, prospective customers, meeting with the joint sales teams and so on. We coordinate a lot with VeeamOn in the field and on an engineering level, so great to get off the phone and see each other face to face and really deepen the relationship. >> So, talk a little bit about what the conversation is like with customers, particularly as it relates to data protection. We're hearing a lot on cloud, multi-cloud, intelligent data management. What does that all mean to your customers? >> Sure. So, obviously VeeamOn provides a wealth of different functionality in all of those areas, whether it be the intelligent data management, which includes cloud components, et cetera. We at ExaGrid play a role, mostly on the on-premise side, to be honest, of the equation. And because we typically deal with a quite large customers, the use of the cloud is really, typically relegated for older, more archive oriented data, or long-term retention backup data than it is for primary data, or even primary copy for disaster recovery simply because of the logistics of managing that much data when you may need it. However, the cloud plays a very important role in those types of customers, as many of them have regulatory requirements, compliance requirements to keep data long-term that they may never need to access, or never need to touch. In which case tiering that out to the cloud is a potentially good strategy. >> Marc, one of the things we're watching at this show is how VeeamOn's trying to get deeper and broader into the enterprise. If you can, give us a little color as to how you're seeing, where is VeeamOn being successful, what are customers liking for that kind of solution? >> Sure. We're seeing a significant amount of traction with VeeamOn and enterprise customers. In fact, we met with a large travel agency out here at the show who's looking at both VeeamOn and ExaGrid as a combined solution. So we're working very closely. VeeamOn has a dedicated enterprise team in the field, and they're breaking down doors to a number of the different enterprises. And our solution, the way it scales and its performance profile is very well-suited to the enterprise. We are an enterprise-class company as well, so we're doing cross-introductions for each other and to each other's enterprise customer base as we go. >> Talk a little bit more about your solution, where the sweet spot is. We always talk about horses for courses on theCUBE. >> Marc: Sure. Yeah. >> What's your favorite course? >> So, we define a target customer, the first demographic that we use is typically the amount of data they have under management. Put another way, the amount of primary data they have, or the utilization on their primary storage. And where we typically live, these days is 50 terabyte is kind of the low end, all the way up to multiple petabytes of data being backed up. And we can store many, many weeks, or months, or years of that data because of the data deduplication impact. But that's our sweet spot. And typically that's the most key demographic for us to look at, is how much data they're managing. >> And you're an infrastructure provider, obviously. You have software, but you don't do backup software. That's not your specialty, right? >> That's correct. That's one of the reasons we have such a close relationship with VeeamOn. And, quite honestly, we partner with a number of folks, but VeeamOn is clearly one of our key, if not our key partner because they provide the data protection functionality, the management, et cetera, and we provide the intelligent hyperconverged secondary storage that can store all of that data, deduplicate it, replicate it, and also provide, uniquely, I might add; support for some of VeeamOn's really critical features, like Instant VM Recovery and Virtual Lab and SureBackup. Because of the way our product is architected those features work extremely well with us, where in some cases, in some solutions they don't quite work as well. >> I think back to a number of years ago deduplication was all the talk in the storage industry. How are the latest trends in everything from Flash's adoption, NVMe, and NVMe over fabric coming soon, how's that going to impact what customers are doing in your space? >> Sure, so first I'll tackle the deduplication part of it. There's no question that it's now become an accepted norm. It's rare these days that you're explaining what it is, or what it does. But there still is one left over misconception that I think it's really important for all of us who have deduplication to educate customers. And that is that not every type of deduplication is created equal. Sometimes people conflate it with compression. You know, all compression's kind of the same to a certain extent. The way deduplication is implemented, there are certain characteristics that will either increase the amount of data reduction you get or lessen the amount of data reduction you get. For customers it's really important to know what type of algorithm you're dealing with 'cause that's going to translate to cost over the long term. So that's the first thing. The other trends, the adoption of Flash and so on, really has been more on the primary storage side, where that level of performance is required for high transaction, high performance requiring applications and so on. Because Flash remains quite a bit more expensive than spinning disc is, it's inroads into backup or secondary storage have been somewhat more on a limited basis. >> So, if I understand you correctly, a large part of the data reduction is a function of the algorithm... I don't want to say not so much the workload, but I was always under the impression that the workload determined the sort of data reduction efficacy. >> Marc: Sure. >> Which I'm sure is true, but you're saying the algorithm also has a huge impact. >> It's a combination. So, there's no question that certain data types deduplicate extremely well, other types not as well, and some not at all. You know, pre-compressed, pre-encrypted data tends not to deduplicate well at all. Where the algorithm comes in is there's a couple of elements, not to get to get too much in the weeds, but something called block size, which is basically the size of the objects that you examine when you deduplicate, and then whether or not you do what's called variable-length analysis, which is adjusting to the fact that the data is expanding and shrinking as it's changing. Algorithm's that implement very large block sizes and avoid variable-length technology are going to get much lower deduplication ratios than algorithms that implement both of those elements, smaller object sizes, and variable-length technology. And we're in the latter category of the more aggressive form of deduplication. >> So, you've got greater granularity and the greater ability to drive data reduction ratios, assuming the workload is favorable to that. >> Exactly right. If you were to compare the same workload across the two algorithms, the less aggressive and the more aggressive, the more aggressive is going to do better on that workload than the less aggressive. >> And again, I know it depends on the workload, but are we talking about on a percentage basis 10% better, 20%, 50%, a 100%? >> Marc: Multiples better. Some cases five to 10 times better. >> Even an order of magnitude in some cases. >> Marc: An order of magnitude better, yes, in some cases. >> What about encryption? What's the state of encryption these days? What are you advising customers with regard to encryption? >> Well, for years we've been under the impression that everything's going to have to be encrypted at some point. It's been a slow journey. You know, there's PCI compliance, HIPPA compliance. Obviously, there's been some pretty infamous hacks that have happened and so on. So the way we look at encryption, we have encryption solutions, self-encrypting appliances, and we recommend to customers, even if you don't need encryption today, if there is a slight chance that you'll need it in the future, then go with our encrypting line of appliances. The cost difference is nominal. It's in single-digit, low single-digit percentages, and it's there when you need it. So you don't have to potentially swap after that. We also do encryption any time we move data over the LAN. So we're fully ready for all of these compliances. It's certified encryption, you know, federal level certification, et cetera, so-- >> Yeah, Marc, let us know what companies aren't aware of the need for encryption and I'm going to short those stocks. (laughing) >> Okay, you got it. Yeah, you might want to change your bank. >> All right. Got to ask you. Brady, if you were Robert Kraft, would you have traded Tom Brady? >> Absolutely not. >> That's unanimous, there. Three for three on that. >> Absolutely, no. >> Okay, why not? What would the rationale be? >> I think he's got a lot more to give yet. I think it would have been on par with the Babe Ruth trade. It would have been a historical disaster. You know, he got us to the Super Bowl last year. Granted, Philly inched us out, but I still think he's the GOAT and he's going to stay the GOAT. >> Giselle said Tom Brady can't catch the ball. I would say also, he can't play defense, so-- >> I would agree with that as well. >> All right, what about Garoppolo? Do you think it was the right move to hold onto him, essentially as an insurance policy in case Brady went down before the trade deadline, or should they have been more proactive and gotten more for him? >> I think it probably would have been the right move for the Patriots to hang on to Garoppolo, however, for Garoppolo himself, and for the fact that they needed to get at least something for him, I think it was the right move at the right time. He needs to play. He's a great quarterback. He's already turning that San Francisco franchise around. >> Right. >> So I'm happy to see him play. I actually now start watching 49ers games 'cause I want to root for him. >> Me, too. I'm a fan of Garoppolo. >> Marc: He's a son of the Patriots. >> I agree. I think it was the smart move, Stu to keep him as an insurance policy, just in case. You don't know. I mean, Brady, you know, 40 plus years old. I mean, look what happened last year. >> It's the economics, Dave, though. They weren't going to pay him what he needed to be able to be a backup, and I agree with Marc. He was ready to play, obviously and it is fun to watch him on the 49ers. >> No, we agree. One of 'em had to go, right? Okay, and now we're three for three. So Peter McKay, Patrick Osborne, and now Marc Crespi all say Brady should stay. Right move. We'll see. Hey, they're the favorite to win the Super Bowl next year. Hopefully, they can get there. >> Sounds like I'm in good company. >> Marc, thanks very much for coming back on theCUBE. >> Thank you. It's always a pleasure to see you guys. >> All right, keep it right there, everybody. We'll be back with our next guest right after this short break. You're watching theCUBE, from VeeamOn 2018. (upbeat music)

(upbeat electronic music) >> Announcer: Live from Chicago, Illinois, it's theCUBE, covering Veeamon 2018. Brought to you by Veeam. >> Welcome back to Chicago everybody, the Windy City, you're watching theCUBE, the leader in live tech coverage and we're here day two at Veeamon 2018, theCUBE's second year doing Veeamon, and I'm Dave Vellante, with my cohost, Stu Miniman. Patrick Osborne is here, the newly minted VP and GM of big data and secondary storage. >> And CUBE alumni. >> HPE and many time CUBE alumni, did you get a sticker? >> Yeah, it's already on my laptop. >> Oh, awesome, great to see you again. >> Good to see you guys. >> Thanks so much for coming on, always fun at Veeamon. >> Yep. >> They have a big presence. Your show, HPE Discover, they painted the Chi-Town green. >> Patrick: Yep. >> What's going on at the show for you guys? >> So a huge partner for us, in our ecosystem, as you guys know, HPE and the world of virtualized workloads, like, you know, we definitely own the space in terms of the number of Veeams sitting on our infrastructure and they are a great partner. You know, we've got thousands of customers, and I think what we're seeing, too, is that as Veeam grows up into the midsize and enterprise space, that is, you know, that's where our wheelhouse is. And so we're getting a lot of customer interactions in that space, and then, with some of our offerings around Nimble and SimpliVity, where they play very well in the commercial segments, that's a great way for us to go grab new logos, be present in the channel. So it's a really good partnership for us on both ends. >> I definitely want to understand what's going on in big data, but before we get there, let's talk a little bit about secondary storage and your point of view there. We know that data protection is moving way up on the list of CXO priorities, we also know there's a dissonance in the customer base, between the expectations of how much automation is actually there from the line of business, versus what IT can deliver. >> Patrick: Yeah, yeah. >> And so there's this gap and now you have multi-cloud coming on in a big way, digital transformation, and so it feels like backup and recovery and data protection is transforming. Throw in security and it even complicates it further. What's your point of view on what's going on in this mix? >> Well, certainly the sands are shifting in the secondary storage market. I think because of a heightened customer expectation in this area, whether it's, you know, I want to do more with my data, running things that we do at Veeam, like test data, automation, Sandboxing, security, you know, ransomware. All those are higher level data services than just what people were doing in the past around backup and recovery. So for us, we're really focused a lot on automation right in this space. The death of backup and recovery in that traditional space is essentially caused by comPlexxity, right? So automate or die in this space, nobody wants to deal with backup, right? What you want is outcomes, and what we're doing is, for our product line, we've got sort of this three-tiered mantra, of predictive, cloud-ready and timeless. So we want to be able to, through platforms like InfoSite, be able to heavily, heavily automate all those activities. Cloud-ready, because, you know, as we talked before, it's a hybrid world. People, especially in secondary storage, want to have some data on-prem, and certainly a lot of it for archival and retention off-prem. And then, timeless is sort of this scenario around, even though I'm operating a data center, I want the purchasing experience to be elastic, and like, again, the cloud, right? So consumption-based as a service. So that's what we're trying to bring to the market for secondary storage and storage in general. >> Dave: Awesome. >> Patrick, as I look at this space, you talk about that hybrid, multi-cloud world that we talked about. The two big, main things are data and my applications. So you talked a bit about the data, connect for us, kind of the applications and things, cloud native and 12 factor microservices, versus traditional applications. And you've got that whole spectrum, what are you seeing from your customers and how are you helping them? >> Yeah, so, we're definitely seeing a lot of the tech leading customers in the enterprise from HPE, you know, the big logos, right? They're out there disrupting themselves, disrupting industry, are massively betting on analytics, right? So, they've moved certainly from databases to batch now, it's all, you know, I think people call it fast data, streaming analytics, Kafka, Spark. So we're seeing, that part of our business that HPE's growing, like, non-sequentially, right? So it's really good business for us. But what's going on right now, is that the customers who are doing this, these are all net new apps. Kubernetes, you know, new styles of application, it's not a rip and replace, it's more of an augmentation scenario, where you're providing new services on top of existing apps. So that is very new and I think one of the things we'll see over the next couple of years is, how do I protect those workloads? How do I provide multi-cloud for them? So it's an interesting space, it's very nascent, a lot of tech-heavy investment going on for the, you know, the big players in the market. But that's going to have a long tail into the mid range. >> How will the data protection architecture sort of change for those new emerging applications? You know, maybe IoT is another piece of that. And maybe, where does your partnership with Veeam fit into that? >> Yeah, so we are having a number of strategy discussions on that this morning, you know. And I think that space is, you know, there's a lot of identification that has to go on. Do I want to back it up, do I care? Right, are those persistent streams? Or that IoT data that's coming in, do I really have to back it up at the end of the day or can I back up the results? So, a lot of it is not just an availability issue, it's certainly a data management issue. But a lot of the tools that we would need to do that, today, they're focused on bare-metal, VM wear, virtualization, a lot of stuff that hasn't been written yet, right? So I think there's a lot of actual tech development that has to go on in this space and I think we're kind of poised together as partners to deliver in that area the next couple years. >> You guys have this tagline, "We Make Hybrid IT Simple." >> Patrick: Yes. >> IT, you know-- >> Patrick: Very quantifiable. >> It ain't simple. (laughter) So, where does storage fit into that equation? >> Yeah, the stats that blow my mind was, I think IBC came out with this, was that there's essentially around 500 million apps in the data center today. And then, in any sort of spectrum of bare-metal, being virtualized, maybe being containerized, in the next four years there's going to be 500 million net new apps, right? So that's like, it's mind blowing, in terms of, most people have a flat budget, maybe a little increase. So you think that you're doubling the amount of apps you have and all the services around it. So for us, the automation piece is absolutely key, right? So anything we can do with InfoSite as a platform, we're going to be extending that to other products, you see we've done it for 3PAR, we'll be bringing that experience. But anything we can do around automation, analytics, that's going to take a lot of the mystery and comPlexxity out of managing these apps and services, I think is a win for the customers, and that's why they're going to buy into the platforms. >> Yeah, it's like, imagine if you're a young family, you've got two kids and you have twins. >> Patrick: Yeah. (laughter) >> Uh-oh. (laughs) >> Or you decide to have two more, like I did. (laughter) >> Patrick, we've been talking about intelligence in the storage world for decades. >> Yes. >> Why is it real, you know, more real and different now, than it was in some of the previous generations? >> Yeah, I think, you know, some of the techniques... So, we've had systems that have called home and brought telemetry home forever, right? But I think what's going on is that, as you take the tools that we've developed, and a lot of them are new, right, that are allowing you to do this, it's the practition of the data science, which is like the key, at the end of the day. InfoSite is an amazing piece of technology, a lot of the magic is in the way that you set up your teams, and to be able to take that on, right? So, it's no longer a product manager, an engineering guy, support person in a different organization, right? What we have is what's called a peak team, right? Which just takes all the functions, brings them together with a data scientist, to be able to take a look at, how can I do machine learning, AI, a more predictive model, to actually take use of this data, right? And I think the techniques and the organizational design is the big change that's happened over the last couple of years. Data's always been there, right? But now we know what to do with that. >> Yeah, and like you said before, the curve is reshaping, it's not this linear Moore's Law curve anymore. >> Patrick: Yeah. >> It's this exponential curve. >> Patrick: Exactly. >> I can't even draw it anymore you know, it used to be easy, just put the dotted line straight out, now it's twisting. So, that increases the need obviously, for automation. Now talk about how HPE's automation play is differentiable in the marketplace. >> So I think a couple of things from a differentiated perspective. Obviously we talked a lot about InfoSite as a platform, as a portfolio company, we're definitely trying to take out the friction, in terms of the deployment and automation of some of these big data environments. So our mission is to be able to, like you would stand up some analytic workloads in the public cloud, to provide that same experience, on-prem, right? And essentially be the broker for that user experience. So that's an area that we're going to differentiate, and then, you know, in general, there's not that many mega portfolio companies, right, anymore. And I feel like, that we're exploiting that for our customers, bringing together compute networking and storage. And certainly on the automation side. So you know, for us, I really feel that you're no longer going to be buying on horizontal lines anymore. You know, best of breed servers, best of breed networking, best of breed storage, but bringing together a complete, vetted stack for a set of workloads, from a vendor like HPE. >> Yeah, and it was just announced, the deal's not closed yet, but just to mention to the audience, HPE just made an acquisition of Plexxi, a networking specialist-- >> Patrick: Yeah, a good friend, too, Rich Napolitano. >> Rich Napolitano. Just this week, which is interesting, because that brings cloud scale to some of the hyperconvergence infrastructure. It's essentially hyperconverge networking, so really interested to see how that plays out. HPE has made a number of really effective acquisitions over the last several years, starting really with 3PAR, was the one. Clearly Aruba, you know, the Nimble acquisition, you know, SimpliVity, so, SGI. So some really strong, both tactical and strategic moves for HPE, really interested to see how Plexxi sorts out. Okay, we got to talk sports for a minute. I asked Peter McKay this question, I asked his boss, some sports fans, if you were Robert Kraft, would you have traded Tom Brady? >> (sharp inhale) No. >> No way? >> No way, no way. >> Okay, that's consistent with McKay. >> Yeah, no way, that's like trading Montana, that didn't work out. >> That did work out, right? They traded Montana, then they won another Superbowl. >> Yeah, I know, I mean, I think, for me, he's an icon and then he's still operating at maximum efficiency, which is amazing, but I think he got a lot of legs in him. >> What do you think of the... Well hopefully he stays, hopefully he does play 'til 45. What do you think of the Garoppolo trade, though? Are you disappointed that they didn't get more, or do you think it was the right move to hang on, just in case Brady went down again? >> I think it's the right move at the end of the day, right? You're not going to get much from him anyways, and they're certainly not going to pay him out as a backup quarterback. What I don't like, though, is the fact that he's gone to the 49ers, and that's where most of my engineering team is in the Bay Area. So, to have to deal with yahoo 49ers fans, you know, for the next couple years, is going to be painful. But it's good, it's a good renewed rivalry. >> So you're not a-- >> Celtics, Warriors, you know, Patriots, Niners. >> You're not an instant transplanted 49ers fan, because of Garoppolo, right? >> Patrick: No, absolutely not. >> He's a carpet-bagger, right? >> He's out, he's off the team, he's out of the house. >> I love it, okay, Bruins were a big disappointment this year. >> Yeah, yeah. >> We thought that, you know, the Celtics were super exciting, let's go there, I mean. You know, you watched the Celtics early in the year, 'cause your like, after Hayward went down, you're like, kind of' we were all walking around like this. And then you-- >> I felt like, it's like where Kennedy was shot, right? I know exactly where I was, right? >> Right, and you had people blaming Danny Ainge for, like, making a move, I'm like, come on, guys. And you see what happened with the young players, and then they sort of tailed off a little bit, they were struggling, you know, Ky was trying to find his way and now they're the exciting team. Up to on Cleveland, I mean, you got to believe that Lebron is going to step up his game with a little home cooking. But let's assume for a second that they get by Cleveland (laughs) which will be a huge task. I mean, I don't think there's anybody in the NBA who can stop Kevin Durant, but I'd love to see Marcus Smart try. >> So two things in that scenario. One is that, who needs Kyrie Irving more right now, Cleveland or Boston, right? (laughter) Which is amazing, can you imagine saying that a couple months ago? It blows my mind. And then, for me, it's a revamping of the NBA, right? If you get the Celtics versus the Warriors in that style of play, I mean, it's definitely, it's changed the whole game, right? Shooting guards, ballers, I think it's fantastic to see, you know, a whole new style of play in the NBA. >> It's so exciting to see the Celtics back in. >> Team basketball, defense, passing, all of it, it's great. >> And ESPN is losing their minds, they don't know what to do. Stephen A Smith doesn't know what to say. >> Patrick: ESPN Live. >> He's actually pissed I think, yeah. (laughter) So, now, Stu, you're a Yankees fan, of course, and you know my line on the Yankees. Stu's kind of a weekend Yankees fan. My line on the Yankees is, that sucks you can't beat us in April. (laughs) Here it is in May. >> Dave, I'm just quiet around you, because I know where my paycheck comes from. >> I appreciate that perspective, Stu, okay. >> Patriots win, we're in agreement. >> Think about all these renewed rivalries, it's great. Celtics, Sixers, Red Sox, Yankees, it's unbelievable. >> And like I said, San Francisco-- >> Patrick: Phillies! >> And the Pats. >> The Pats! >> Well Patrick, always a pleasure seeing you, thanks for making time out of your busy schedule. >> Yeah, absolutely, it was great. >> For coming on theCUBE. Alright, keep it right there everybody, we'll be back with our next guest, right after this brief break. You're watching theCUBE, Live from Veeamon 2018. (upbeat electronic music)

>> Announcer: Live from Las Vegas, it's theCUBE! Covering HPE Discover 2017. Brought to you by Hewlett-Packard Enterprise. (electronic music) >> Welcome back everyone. We're here live in Las Vegas. This is SiliconANGLE Media's theCUBE. Coverage of HPE Discover 2017. That's Hewlett-Packard Enterprise. I'm John Furrier, the co-host of theCUBE. My co-host for the next three days, Dave Vellante, Chief analyst at Wikibon and co-founder with me of theCUBE. Our next guest is Partha Narasimhan, who's the CTO of Aruba, now part of HP for multiple years. Welcome to theCUBE, thanks for joining us. >> Thank you. Thanks for having me here. >> So chief technology officer of Aruba, we get to go under the hood a little bit, but it's really important the we kind of have that context because the wireless is beyond just wifi. I mean, wifi is joked on the internet as the lower level of the Maslow's hierarchy of needs. I mean, it's the biggest complaint people have. 'Where's the wifi? Is it secure?' So wifi obviously in wireless, certainly brings that digital life. Now you take wireless in an enterprise environment, unlimited possibilities with Internet of Things, campus, intelligent edge was the key part of this theme. Welcome to theCUBE and thanks for joining us. >> Narasimhan: Thank you. >> So your thoughts on the intelligent edge, what is Aruba's real innovation happening now? Where's the fruit coming off the trees, beyond just the access to wireless, because we all know is like, freedom. >> Right, and so think of it. People tend to think of wireless as just okay, getting rid of the cables. And yes, it does that, but it does a lot more than getting rid of the cables. And if you think about what it allows you to do, wireless enables mobility, right? So as people walk around and stay connected to all the things that they need connectivity to, we allow that to happen. But wireless enabling mobility also means that we have now the ability to observe things in the physical world that people reside in, right? Kinds of things that they interact with, whether it's in the workplace as part of their work, or whether it's as a customer when you enter a retail store, or when you enter a stadium or a venue for an event. How do we now gather our understanding of context from purely from a digital domain? Combine that with what we are learning about context, the other side of context from the physical domain. Blend that together, one, to either create new experiences for enthusers. Or to enhance existing ones that they're already used to, how can we make it work better? Right, and we have these used cases in- >> Is it true enabling technology and these new scenarios are new? I want to get into the used case, but I first want to get the hard news out of the way. You guys have some announcements here at HPE Discover that are notable. One is an extension to the course, which is 8400 line, real focus on the intelligent edge. And the other one is really comprehensive asset tracking. Assets could be anything, it could be people, it could be machines, devices and whatnot. This really kind of highlights the things that are possible. Obviously asset tracking is entering a change, and it's also big data, it's Internet of Things. Talk about this intelligent edge, talk about the switches and the asset tracking. What is the notable things about those two announcements? >> So let's start with the 8400, right it's a big core of new classes, Abdication switch. We don't have many of those built over the years in the industry, right? There have been very small number of instances of switches like this built in here. But the big difference with the 8400 is it's actually the first one that was completely built in an era that is defined increasingly by mobility in IoT, right? Think of mobility. With mobility, topology is never a constant. Right, I can never assume that the network topology is set and it never changes. Or changes can be controlled in some perspectives. So if you start with the given that topology is not a constant, how do we now create a switch that enables network administrators to deploy networks without having to worry about, you know, old methods of configuring and monitoring the switches, right? So, this was built ground up with the notion that it has to support today's use cases, not overlay today's use cases onto, you know a switch that might have worked many years ago. So programmability was important, modernality was important. It is built on a basic premise that you know, the entire state of the network, the switch, is stored in a database that is accessible through modern interfaces. It allows you to take that switch, plug it into existing workflows that are more modern than to try and force feed these modern workflows be constrained by technologies that were invented fifteen, twenty years ago. So that is the one that's important, right? And in addition to all of the connectivity options, the speeds and feeds that we have to go build, it's extremely interesting and there are advances and innovation on that side. The one that excites me the most is the software layer in the switch, right, that allows for the programmability, it allows for visibility, right, I'm able to get access to all of the state of the switch, and any trouble, problems that I see, I can quickly get to the bottom of, and go back and fix it. But more importantly, the biggest innovation that I think we have, is this thing that we call the Network Analytics Engine. This is what gives you the extensibility property for the switch. Where your ability to go extend the capabilities of the switch in the field, right? Not have to for our engineers to tell what features, but people in the field, either customers or our own field engineers, can extend the capabilities of the switch to go do things that we didn't think of, but exist in the field. >> So before we get to asset tracking, I love the way this press release was worded. You kind of hit on it, John. 'Setting it apart from other core aggregation switches in the market, the 8400's most unique innovation is the Aruba OSCX, a modern software foundation that is a departure from today's static, inflexible operating systems.' I'm not sure exactly who you're talking about there, but nonetheless, so when you talk about this network analytics engine, Are you suggesting that makers of static inflexible operating system designs would have to bolt something like that on? And it would just not be as effective? Or would it not be possible? >> Well you have to go deeper into the operating system, and do major surgery for that to happen. And that is very hard to do. So if you already built it for a certain static use case, and you're trying to now introduce support on certain things in there, you will always be limited by what lies underneath, compared to if you look at the operating system Aruba OSCX, it was built from the ground up with the modalality and extensibility in mind including the programmability for configuring the switches. This is not something that you can bolt on later and go fix it, because you have to go very deep into the operating system, and there's a lot of major surgery work that is for a switch of this magnitude and size, the effort is as good as starting from scratch, throwing everything away and starting from scratch and building it new. That is very hard to do. >> And tell us about the asset tracking. Let's not, I didn't want to lose that either. >> Well the asset tracking, before we get that point. Operating systems are generally about connecting things, subsystems. You mentioned the wireless as an unpredictable. Which is true, I agree with that. Now Internet of Things is even more unpredictable, and the rate of devices connecting: a watch on someone's wrist, a wearable, a phone. We saw the new Apple announcements yesterday, we covered that on SiliconANGLE.com, again more and more consumer devices, and yet, industrial equipment. This is important, I mean, it's not just machinery, it's like, it could be the air conditioning, it could be anything. Thoughts on this asset tracking concept? >> Narasimhan: I'll start the IoT's side, and how it applies to the network, and get to the asset tracking. Let me start with an example. One of our university customers, in adding to the story, right, they said one day the facilities people called and said hey, we just went out and swapped out about 400 door locks in a residence hall with wifi enabled door locks, and then they turn on the 400 of them and they don't work, and the network people are saying sure it doesn't work, we're not surprised, because the network's not built to have arbitrary things come in and start working. But if you look at it from the people that are deploying this equipment, they just think hey, it's wifi, it should just connect and work, right? Versus people running the network have certain ways in which they have configured the network either for quality of service, or security, that, you have to understand. But the network admins are also in a state where they just say that battle is probably lost. People are going to add things to my environment and my job is to go make sure that I gracefully accept them in and fit the into a profile. In the security profile that I already have. So this is why the programmability is key, right? As door locks come in, chances are those door locks don't need to communicate with everything on the network. Maybe only to a very specific server that pushes policy on which keys should open a particular door, and which one's shouldn't, but if you look at network's specifically designed with a certain notion of trust, saying okay, I have a security perimeter. Whether it's a physical perimeter that allows me entry into the building, or a digital perimeter that, you know, I have a dmz in a firewall, but once you're on the inside, you're in a safe zone. That safe zone is being challenged by IoT, right? Because these devices are not capable to begin with. Think of an electronic door lock, and compare it with many other servers, and the compute capabilities and the servers on the showfloor, versus what is available in the door lock. By itself, it's starting out at a very huge disadvantage on that front. But more importantly, the compute capabilities of a door lock are frozen in time. And they tend to stay on the door for ten years, fifteen years, twenty years. Versus the compute capabilities that are available to an attacker keeps pace with technology. So over time, the ability for the door lock to protect itself diminishes, right? And this is not just true of door locks, it's true of any of these IoT type of things that are getting added to the systems. So our goal is as we gracefully accept them and get them connected to the network and provide the network guys with the tools to kind of segment them into appropriate boundaries, we also have a need to go monitor their activity all the time. Because they become juicy targets for hackers. To get into and from there, propagate out to the rest of the network. So how do we know they're not getting attacked? Their vulnerability is not getting exploited, and the only way to do this is to continuously monitor them. But more importantly, to use a machine learning approach. A behavioral approach, rather than a signature based detection. So if I baseline behaviors of a certain IoT device, whether it's a door lock or a security camera, or any number of those, and whenever I see deviations from that baseline behavior, I want to alert somebody. Because, while it is an anomaly, and not all anomalies are malicious, but it could be potentially. And you need somebody to look at it, so how do we quickly detect that, okay, there's a deviation and is it malicious, and how do we react to it, and how do we shut it down? >> Now talk about the asset tracking announcement, because that's relevant to this show. What's the status, the news? What's the notable thing about the Aruba asset tracking? >> So the asset tracking is interesting on two counts: one is, when you want to track an asset, you need to attach a tag to it, that kind of puts out some notion of identity that I can attach to that asset. But there's also the infrastructure side of it, you need an infrastructure that picks up on these signals, and can locate the asset, and can figure out where all it's been, and who's kind of used it, and how it's getting used. So while we look at asset tags as one improvement, the infrastructure is also another improvement. Aruba we started down the bluetooth low energy as one of the elements for our location based services strategy, look at Meridian team as a central gravity for all location based services. We started out with beacons, and using the beacons as an indication of location, and then providing contextual information and semantic information about that location. But over time we've also recognized that in addition to beacons, we've integrated bluetooth into our access point. So any wireless LAN infrastructure that's based off of the Aruba solution that is getting deployed today is already ready for one half of the asset tracking solution, so the other half is the tags that we're introducing that can be attached to high value assets, and then together these two combine with a back end solution that not only provides you with where the assets are and where they've been, but also uses APIs to integrate with other asset tracking larger solutions that you might have. >> Furrier: So you're feeding data into a bigger picture on the edge? Alright, so let's talk about the fun stuff now. So we can get under the hood there. Getting a little technical, which is great. There's some real sexy deployments out that you guys have been involved in. One is, we've talked about, the folks watching theCUBE know, Levi Stadium in San Francisco, for the San Francisco 49ers is highly instrumented venue next is the provider, great service provider. You guys are the provider there. But it's interesting, this other use case. So talk about how the use cases are driving the value, and how people who are discovering these new value creation opportunities, how do they get there and give us some examples. >> So Levi Stadium, okay. We tend to talk about it a lot, but it also is because we learnt a lot of things as part of being, you know, we were fortunate to be part of that exercise. We learnt a lot of things, so one key learning was the people that built the stadium were very clear from the beginning, their competition was not another sporting venue, right? It's not the Oakland Raiders fans that they wanted to attract over into the stadium. They were very clear their competition was a TV in your living room. How do I convince a fan to not watch the game on the TV in their living room but instead to come into the stadium and watch it? So they said here's a list of experiences that I want to create for the fan that you can only have in the stadium, and that is compelling enough to get a fan into the stadium to watch the game. So once you define those, then it becomes a lot easier. The rest of it underlying here is all technology, and we know how to piece it together. So this was one of the first instances where we saw the whole infrastructure build out being driven top down, right? You define your experiences and then you work your way down on what kind of pieces of technology we need to go in there. Otherwise the networking industry was largely driven by hey, here's the connectivity infrastructure, and we'll figure what hooks are available, and then we'll figure out what you can do with it. >> Furrier: You constrain, naturally, with that. >> Correct, but if you start from the top, lot's of things become easier, right, what we need can be customized to go address the problem, specific problems if we want to go in there. And this is not something new. As you look at, yes it was true for the stadium, but retail stores have a similar problem, right, how do I convince a user to not buy a particular item online, and instead come into the store to do it? And Apple's done a pretty good job of it, the whole store is not a place where you go pick items off of the shelf, put it in your cart, and check it out. It is a place where you go and interact with the item. >> Experience! >> Experience, again. >> What other verticals are hot right now, obviously retail makes sense, sports makes sense, what other verticals- >> Narasimhan: Hospitality is another one where you want to create an experience that customers associate with a brand. If I can somehow make the whole process of you checking into a hotel room, and being in the hotel room and then checking out, if that whole experience can be made significantly better, then I'm going to associate it with that brand. And the next time I'm looking for a hotel- >> So it's an opportunity for brands to extend their brand value, digitally. >> Narasimhan: Correct. It is by creating a better experience in the physical world, you tie it to your brand, and customers associate it with it. And then you go into the workplace. Again, employees and how do I help improve their productivity with what kind of experiences? More and more workplaces are shifting to more open environments, all wireless workplace, because, you know, even if I had wires, there's nothing that I can plug into. I have three devices with me in my bag. Nothing with an Ethernet port in it. And we recently moved into a new facility in Santa Clarita. in January of this year, and the one thing you'll notice is that there are no wires running to where people sit. So when you go into an all wireless workplace, you convince users that it's viable, right, and the way to convince users it's viable is that the network is always there when they need it, when they need to do something on it. But the facilities people are also excited by the possibility, because it gives them a lot of flexibility in how they want to reconfigure space. >> Furrier: It's the future of work and the future of play kind of converging with analog and digital kind of coming together with experiences at the center, and wireless is the fabric for it all. >> Correct, and wireless is what enables mobility but more importantly location is the other fabric that interconnects the two worlds. If I can sense location on the digital side, location is an attribute of the physical world. That's what bridges the two together. >> Context, interest, location. These are all new variables, a whole new way of doing things. In fact, the modern mobility we suggest on SiliconANGLE, Wikibon and theCUBE is this is going to be the future of work, the future of play, all around modern mobility. >> Narasimhan: Correct. >> Partha, thanks so much for sharing your insights. The CTO here of Aruba Wireless, doing some amazing things, enabling new possibilities here in a new simplified, sounds complex to me, but it sounds like you simplifying, as the new message from HP. Thanks for sharing your insights. Of course, we're bringing that modern day to you here on theCUBE live in Las Vegas, our exclusive coverage for three days. This is theCUBE, I'm John Furrier, Dave Vellante, we'll be right back with more after this short break. (electronic music)