(upbeat electronic music) >> From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE conversation! >> Hi, everybody, this is Dave Vellante, and welcome to this CUBE conversation. You know, in this COVID-19 pandemic, we've been reaching out to folks that really have good visibility on what's going on out there. Tim Conley is here, he's a principal with the ATS Group, and partner of IBM. Tim, good to see you again man, thanks for comin' on! >> You got it, Dave, how are you today? >> Not too bad, you hangin' in there with all this craziness? How are things where you are? >> Yeah, we sure are, it's like groundhog day everyday, right? >> I know, the family's goin' crazy. They want to get out, and, well summer's comin', so hopefully the pandemic is going to calm down a little bit here, give us a breather. >> I hear that. >> But so, tell us what's goin' on these days with your company, with the ATS Group, what are you seein' in the marketplace? Give us the update. >> Sure, Dave. We've been in business 19 years now as a IBM systems integrator. Doin' a lot of work around storage. There's a lot of shiny new nickels out there these days that we're trying to make sure that we stay ahead of the game on. You know, our customers demand excellence from us, because that's what we've been giving them the last, you know, 19 years. So, they demand that from us, which is actually a great position for us to be in, but you know, with a lot of the new, shiny new nickels out there today, takes a lot of energy to focus on those, make sure we're talkin' to our customer about the right things, at the right times in the marketplace. >> I had Ed Walsh on the other day, and actually a couple times within the last six months, and he shared with us, actually in studio, when we didn't have to be six feet apart, the new announcements, the simplification of the portfolio. Presumably you've seen that. What was your reaction, how do you think the customer will react? >> That's a good question. Like I said, we're always looking to be bleeding edge, that's actually where we got our name from, Advanced Technology Services Group. So, IBM consistently comes out with some really good products and solutions, and we're constantly vetting that in our innovation center, in beta programs and things like that. A couple key things that are working now with us is Hybrid Multicloud. You know, IBM comes out, like I said, with some good solutions. We vet them out, and we're real excited about Spectrum Virtualize for Public Cloud. We've been using that for probably the last 12, 14 months, so trying to get the word out our customers on what it means, for partners as well, we can have a simple 10 minute conversation with our customers and our partners, kind of describe it at a high-level, and then they can gain interest at that point. It can be a little tricky, but we try to take that trickiness out of it, and let our customers know what's really goin' on, how it works for disaster recovery, for data protection to the cloud. Customers always want to talk about those things, but a lot of them really don't know those specifics, so we literally in 10 to 15 minutes can simply it to them, let 'em know how it works, and what scenarios it might work for them. Again, doing tests, and PoCs, things like that, it's really easy for us to do. One of our big federal customers want to call today at 12 o'clock, going over that implementation. They're pretty excited about tryin' it out, 'cause everybody thinks they want to move some things to the cloud, so Spectrum Virtualize allows us to do that pretty transparently. In fact, we used it ourselves last year, 'cause we took the journey to the cloud for SaaS offering. Took us over a year to do it, let me tell ya, it's not easy. You know, people make it sound like goin' to cloud is a snap, you know, spin up some OS instances, some EBS storage, and away we go. It's not that easy. >> I was just talkin' to a software executive who started his company 37 years ago, we both agreed, that's kind of when I started in this business, we both agreed that it just keeps getting more and more complicated. So, firms like yours are, but okay, so you talk about Hybrid Multicloud, of course IBM has cloud, but IBM itself says, "Hey, we hope people put their data into our cloud, "but we know there's other clouds out there." Well, hence Multicloud. So, what do you see as going on in the marketplace, specifically as it relates to Multicloud? And I wonder if we could weave in the COVID-19. Are you seeing people more receptive to cloud? >> Yeah, I'll tell ya, with COVID-19 we've had some opportunities delayed, because customers don't quite know where the market's going to go for themselves. We actually had one customer go out of business. So, that ultimately delayed a deal forever, right? But overall, things aren't that bad, but we do see customers, you know, lookin' to make some things easier for themselves. They might have been thinking about the cloud, but COVID's kind of brought it to the forefront, and they want to make things easier right away. Maybe you can save some money, right? So, we have a calculator we created for our customers to really go measure things to see what actually would it cost to go to cloud? You know, a lot of customers have no clue what it is. We could do that in five minutes for them, really interesting so, again we'll give them that information that hey, going to cloud might be an opportunity that they didn't think might be existent 'til now. >> So, Spectrum Virtualize, otherwise known you know, for those who have been around for a while like I have as kind of the roots of the SVC, the SAN Volume Controller, and the history of that product is software that enables you to virtualize, not just IBM storage, but anybody's storage, and of course one of the major use cases has been migration. So, in downturns, people want to get more value out of existing system. You know, maybe they come off lease, or maybe they want to elongate the life, and they may not have all the function so they can plug it into an SVC, and they get all the wonderful new bells and whistles, and the capabilities there. I wonder if we could talk about that, and again, what you're seeing just in terms of the current, you know, economic situation, and then specifically as it relates to cloud? >> That's a really a good point. So, you're tying to key things in today, right? Customers are looking to save money, because they don't want their financial outlook is based on COVID-19, so being able to help customers, and you nailed it, right? SVCs, Spectrum Virtualize has been around for, gosh probably 11 or 12 years now, 13 years actually. Right? So, we pride ourselves on bringing that to customers. Showing them how they can virtualize their environments in the storage arena. And we have some gigantic customers in the federal space, commercial space, so we don't just bring out white paper, say, "Eh, well it kind of looks good." Right? We actually have distinct customers, and talk to them about how they can drive their storage efficiencies up with IBM technologies, especially virtualization. And then, you know, reducing their overall cost. That's key, especially now. Customers are constantly looking to reduce their costs and whatnot with their storage, so that's a perfect inroad to that, and then bringin' in the Multicloud part of it, you're just extending Spectrum Virtualize to the cloud. You know, it was in IBM cloud first, it was in AWS back June of last year, and now we're working at IBM on puttin' that out into Azure. You know, so we can bring those savings to customers in the cloud, which they didn't know they could do that before. >> All right Tim, talk a little bit more about Multicloud, because you know, a joke recently, up until recently anyway, that Multicloud is more of a symptom of multi vendor, as opposed to a strategy, but with shadow IT, and sort of rogue systems, and the marketing department, the sales, everybody doing their own cloud, essentially Multicloud has become a strategy that the CIO has been asked to come in, "Hey, we got all these clouds." Clean up the crime scene I call it! What are you seeing today around Multicloud? >> That's a great point, I like that term, I'm going to steal it if you don't mind. Multicloud's customers are very much interested in, we have several customers doing Multicloud, IBM, Amazon, Azure. We actually did a study for an Azure customer, where we actually projected him to go to AWS with substantial cost savings. Some of that had to do with right-sizing their environment, where they weren't right-size in azure today. But I got to tell ya, you know, Cloud's not simple. It's not easy, again I mentioned earlier, we took that journey ourselves, spent a lot of time and energy with some really smart guys on my team to take that journey. So, Multicloud is a really great idea, and should be looked at, but I'm tellin ya' it's not quite that easy to just shift around, but there are definitely things to move to different cloud vendors. Again, if we bring it back to the storage arena, right? Spectrum Virtualize today's in IBM and Amazon, it's not in other clouds, so if you want to go that route, perfect opportunity to go Multicloud. >> Yeah, I mean I think you're makin' a good point. Let's face it, for our audience, we're in the early days of Multicloud. Yes, everybody has multiple clouds, everybody talks about having multiple clouds, but to be able to run applications natively in all these different clouds, whether it's the control plane, the data plane, the transport plane, all these disparate systems, and really be able to take native advantage of the local cloud services. That's not only very complex, it's really not fully baked out here today, but you know, we heard this week at IBM saying a lot of talk about Red Hat, containers, and Open Shift. So, we're starting on that journey, and that's really the promise of Multicloud, to be able to ultimately run applications anywhere, but as you point out, that's a very complex situation today for customers. >> Yeah, that's a good point. So, I totally would follow up with you on that, that's Multicloud, customers are looking at it, and their are some distinct advantages to the different cloud vendors. One could even say on-prem is a form of cloud, right? That's just your private cloud. So, keeping things on-prem for certain scenarios makes sense, be able to tie that back to the big cloud vendors, IBM, Amazon, Azure, right? Tying them together is the direction people are looking to go, and are kind of, some of them are there and have done it, but I'd say some, or more of them are in the infancy stage of that. >> What are you seeing in terms of, just kind of switching topics on you, in terms of things like governments, compliance, a lot of talk about cyber resiliency, especially given the pandemic. What are you seeing there with customers? >> Wow, that's a big topic. It's interesting, data classification, you think it'd be that easy, especially for some of our fed' customers, it's not that easy, right? Tryin' to classify the data, they just don't know, they might know the applications, but they don't know the content of that data. Is it able to be, what is it, section 126? Something like that. Is it able to go to the cloud? So, customers have a struggle on their hands tryin' to do that, right? The technology, groups within the customers, the storage folks, the OS folks, the Apps folks, they're all about the cloud, move things to cloud, but at the end of the day, it's the security folks that need to be able to do that data classification to see can the data even go there? Let alone the application or whatnot. Fairly easy to do that kind of stuff, but the data classification, we see that's the hard part. >> Okay, so you talked about shiny new toys at the beginning of this conversation. You know, IBM, you're tryin' to be a shiny old toy, (Tim laughing) they've been around you know, a century. >> Yeah. >> Why IBM though? What is it about IBM that you choose to partner with them? Give us the good, the bad, and the what you'd like to see improve. >> I would say, we've been a partner for IBM a long time, I used to work for IBM a million years ago. At the end of the day, our customers demand excellence from us, and they demand things to work, right? So, for me to put my company, and my resources into an opportunity for my customers, we can count on IBM. One, we have a great relationship with them, they have fantastic solutions, and then we vet them out. Our customers demand that of us, and I can give real world examples of one customer to another. So again, it's not like a white paper, I read it from vendor XYZ, at the end of the day we're implementing these solutions at our customers. A lot of times we're doing em in our lab first to make sure it works as designed, figure out with the shiny new nickels, you know, what's broken with that nickel? Why's it not so shiny? Or is it really as shiny as it appears to be, right? So, being able to do that stuff in-house is great, but at the end of the day, our customers demand excellence, and you know, we have to be bringing solutions to our customers, and IBM provides quite a few solutions, especially around the storage arena, where we live and breathe, that instant marketplace. So, we have to use great solutions that we can trust, and know work. >> So, my last question is what have you learned in the last, you know, couple of months with this pandemic. Now that we start to hopefully come out of it, at least for a little while, what are you learning? What's been accelerated, or pulled forward, and we're obviously not just goin' to 2019. So, how are you seeing your business, and your customers responding, what's the sort of mindset going forward? >> I'd say two things, so there's the COVID stuff, and then I talk about ransomware, cyber security, that could be another whole topic, right? But at the end of the day, I've been on a lot of webinars, and things of last three, four weeks, five weeks, listenin' to vendors talk about their shiny new nickels, and it's, quite frankly it's a bunch of mumbo jumbo, and that's not the world we live in, 'cause that's not what our customers are asking from us. But a lot of customers are really concerned about cyber security, ransomware. I have two customers locally that got hit with ransomware last fall, and let me tell ya, it's not a pretty scene, and they were not prepared for it, right? So, one of our jobs is to really help our customers understand where their gaps are within their organization, so that if they do get hit by cyber crime, or ransomware, that they can actually survive that, and not actually have to pay for it, then be up and running in a very small amount of time, which is key. Like I said, two customers got hit, just of mine, within 20 miles of our business, and they weren't prepared for it. >> I can't leave it there Tim, what do I got to do, if I'm an organization that's concerned about ransomware, probably every organization, what are the steps that I should take, like immediately? >> I would say a health assessment, and it doesn't have to be from ATS, it could be from anybody that's got the experience, and whatnot. We do health checks for customers consistently, and they don't have to be expensive, they don't have to be like, months. People always think, "A health check, oh my god, it's going to take so much time." It really doesn't. It's a quick health check, and we can look at those key things within your organization to see where you might not be prepared. And I'm talking like not prepared, like if you get ransomware tomorrow, you very well could be out of business. It's not hard to see those kinds of things. And you can make it more detailed if customers want that, right? But I would definitely have customers, if you're interested in that, call us, call any other vendor out there that's doin' those kinds of things. But it's fairly easy for folks like us and other vendors to be able to do those health checks, just take a quick look in your environment, see where your gaps are that you could literally go out of business tomorrow. >> Okay so, first pass is you're lookin' for open chest wounds that you got to close immediately and stop the bleeding, and then what? You start implementing things, you know, best practices, air gap. >> Air gap, you stole the word right out of my mind, air gap, right? You have to start, you know, look and see where, what's the requirements? First of all, make sure you can survive the event, and get back up and running in a reasonable amount of time, right? That one customer I mentioned was probably four or five weeks before they were able to restore all their servers, and they were fortunate that a lot of those were test thing that they could kind of wait a little bit long, but the other one they nearly went out of business, 'cause they just weren't prepared for it, right? So yeah, air gapping is a key thing, right? You know, where I put my data that it can't be touched, right? That's a fairly easy thing to start off with. >> Yeah, and then the whole process of recovery, who's on deck, you know, et cetera, et cetera. How communications occurs, there's technology, and of course as always, there's people in process. Well, Tim, I'll give you the last word, bring us home! >> Bring us home. Hey, but Dave, thanks very much for your time today. This is was a great time talking to you about some key things that we've worked with day in and day out over the last couple months. Again, bringing our solutions to our customers, that they demand that excellence from us. Bringin' IBM solutions that we natively know and love, and trust, because we've done 'em many, many times with other customers. So, pretty excited about what's goin' on in the industry, lookin' at all those shiny new nickels, and see which ones are actually shiny at the end of the day. >> All right, Tim, well listen, thanks for comin' back on theCUBE, it's great to see ya. I hope we get to see each other face to face. Stay safe. >> Sounds good Dave, thanks for your time, thank you. >> All right, you're welcome, and thank you for watching, everybody. This is Dave Vellante with theCUBE. Go to http://www.siliconangle.com to check out all the news, for thecube.net, where all these videos live, and http://www.wikibon.com, where I publish weekly. We'll see you next time on theCUBE. (relaxing instrumental music)

>>Hi, welcome to this cube conversation here in Palo Alto, California. I'm John fur, host of the cube here at our headquarters on the west coast in Palo Alto, California. Got a great news guest here. Matt McGill, Wayne managing director of Madrona venture group is here with me on the big news and drone raising their record 690 million fund and partnering with their innovative founders. Matt, thanks for coming on and, and talking about the news and congratulations on the dry powder. >>Well, Hey, thanks so much, John. Appreciate you having me on the show. >>Well, great news here. Oley validation. We're in a new market. Everyone's talking about the new normal, we're talking about a recession inflation, but yet we've been reporting that this is kind of the first generation that cloud hyperscale economic scale and technical benefits have kind of hit any kind of economic downturn. If you go back to to 2008, our last downturn, the cloud really hasn't hit that tipping point. Now the innovation, as we've been reporting with our startup showcases and looking at the results from the hyperscalers, this funding news is kind of validation that the tech society intersection is working. You guys just get to the news 430 million in the Madrona fund nine and 200. And I think 60 million acceleration fund three, which means you're gonna go stay with your roots with seed early stage and then have some rocket fuel for kind of the accelerated expansion growth side of it. Not like late stage growth, but like scaling growth. This is kind of the news. Is that right? >>That's right. You know, we, we've had a long time strategy over 25 years here in Seattle of being early, early stage. You know, it's like our friends at Amazon like to say is, well, we're there at day one and we wanna help build companies for the long run for over 25 years. We've been doing that in Seattle. And I think one of the things we've realized, I mean, this is, these funds are the largest funds ever raised by a Seattle based venture capital firm and that's notable in and of itself. But we think that's the reason is because Seattle has continued to innovate in areas like consumer internet software cloud, of course, where the cloud capital of the world and increasingly the applications of machine learning. And so with all that combination, we believe there's a ton more companies to be built here in the Pacific Northwest and in Seattle in particular. And then through our acceleration fund where we're investing in companies anywhere in the country, in fact, anywhere in the world, those are the kinds of companies that want to have the Seattle point of view. They don't understand how to work with Amazon and AWS. They don't understand how to work with Microsoft and we have some unique relationships in those places and we think we can help them succeed in doing that. >>You know, it's notable that you guys in particular have been very close with Jeff Bayo Andy Jesse, and the success of ABUS as well as Microsoft. So, you know, Seattle has become cloud city. Everyone kind of knows that from a cloud perspective, obviously Microsoft's roots have been there for a long, long time. You go back, I mean, August capital, early days, funding Microsoft. You remember those days not to date myself, but you know, Microsoft kind of went up there and kind of established it a Amazon there as well. Now you got Google here, you got Facebook in the valley. You guys are now also coming down. This funding comes on the heels of you appointing a new managing director here in Palo Alto. This is now the migration of Madrona coming into the valley. Is that right? Is that what we're seeing? >>Well, I think what we're trying to do is bring the things that we know uniquely from Seattle and the companies here down to Silicon valley. We've got a terrific partner in Karama Hend, Andrew he's somebody that we have worked together with over the years, co-investing in companies. So we knew him really well. It was a bit opportunistic for us, but what we're hearing over and over again is a lot of these companies based in the valley, based in other parts of the country, they don't know really how to best work with the Microsoft and Amazons are understand the services that they offer. And, you know, we have that capability. We have those relationships. We wanna bring that to bear and helping build great companies. >>What is your expectation on the Silicon valley presence here? You can kind of give a hint here kind of a gateway to Seattle, but you got a lot of developers here. We just reported this morning that MEA just open source pie, torch to the Linux foundation again, and Mary material kind of trend we are seeing open source now has become there's no debate anymore has become the software industry. There's no more issue around that. This is real. I >>Think that's right. I mean, you know, once, you know, Satya became CEO, Microsoft, and they started embracing open source, you know, that was gonna be the last big tech holdout. We think open source is very interesting in terms of what it can produce and create in terms of next generation, innovative innovation. It's great to see companies like Facebook like Uber and others that have had a long track record of open source capabilities. But what we're also seeing is you need to build businesses around that, that a lot of enterprises don't wanna buy just the open source and stitch it together themselves. They want somebody to do it with them. And whether that's the way that, you know, companies like MongoDB have built that out over time or that's, you know, or elastic or, you know, companies like opt ML and our portfolio, or even the big cloud, you know, hyperscalers, you know, they are increasingly embracing open source and building finished services, managed services on top of it. So that's a big wave that we've been investing in for a number of years now and are highly confident gonna >>Continue. You know, I've been a big fan of Pacific Northwest for a while. You know, love going up there and talking to the folks at Microsoft and Amazon and AWS, but there's been a big trend in venture capital where a lot of the, the later stage folks, including private equity have come in, you seen tiger global even tiger global alumni, that the Cubs they call them, you know, they're coming down and playing in the early state and the results haven't been that good. You guys have had a track record in your success. Again, a hundred percent of your institutional investors have honed up with you on this two fund strategy of close to 700 million. What's this formula says, why aren't they winning what's is it, they don't have the ecosystem? Is it they're spraying and praying without a lot of discipline? What's the dynamic between the folks like Madrona, the Neas of the world who kind of come in and Sequoia who kind of do it right, right. Come in. And they get it done in the right way. The early stage. I just say the private equity folks, >>You know, I think that early stage venture is a local business. It is a geographically proximate business when you're helping incredible founders, try to really dial in that early founder market fit. This is before you even get to product market fit. And, and so the, the team building that goes on the talking to potential customers, the ITER iterating on business strategy, this is a roll up your sleeves kind of thing. It's not a financial transaction. And so what you're trying to do is have a presence and an understanding, a prepared mind of one of the big themes and the kinds of founders that with, you know, our encouragement and our help can go build lasting companies. Now, when you get to a, a, a later stage, you know, you get to that growth stage. It is generally more of a financial, you know, kind of engineering sort of proposition. And there's some folks that are great at that. What we do is we support these companies all the way through. We reserve enough capital to be with them at the seed stage, the series B stage the, you know, the crossover round before you go public, all of those sorts of things. And we love partnering with some of these other people, but there's a lot of heavy lifting at the early, early stages of a business. And it's, it's not, I think a model that everybody's architected to do >>Well, you know, trust becomes a big factor in all this. You kind of, when you talk about like that, I hear you speaking. It makes me think of like trusted advisor meets money, not so much telling people what to do. You guys have had a good track record and, and being added value, not values from track. And sometimes that values from track is getting in the way of the entrepreneur by, you know, running the certain meetings, driving board meetings and driving the agenda that you see to see that trend where people try too hard and that a force function, the entrepreneur we're living in a world now where everyone's talking to each other, you got, you know, there's no more glass door it's everyone's on Twitter, right? So you can see some move, someone trying to control the supply chain of talent by term sheet, overvaluing them. >>You guys are, have a different strategy. You guys have a network I've noticed that Madrona has attracted them high end talent coming outta Microsoft outta AWS season, season, senior talent. I won't say, you know, senior citizens, but you know, people have done things scaled up businesses, as well as attract young talent. Can you share with our audience that dynamic of the, the seasoned veterans, the systems thinkers, the ones who have been there done that built software, built teams to the new young entrepreneurs coming in, what's the dynamic, like, how do you guys look at at those networks? How do you nurture them? Could you share your, your strategy on how you're gonna pull all this together, going forward? >>You know, we, we think a lot about building the innovation ecosystem, like a phrase around here that you hear a lot is the bigger pie theory. How do we build the bigger pie? If we're focusing on building the bigger pie, there'll be plenty of that pie for Madrona Madrona companies. And in that mindset says, okay, how are we gonna invest in the innovation ecosystem? And then actually to use a term, you know, one of our founders who unfortunately passed away this year, Tom Aber, he had just written a book called flywheel. And I think it embodies this mindset that we have of how do you create that flywheel within a community? And of course, interestingly enough, I think Tom both learned and contributed to that. He was on the board of Amazon for almost 20 years in helping build some of the flywheels at Amazon. >>So that's what we carry forward. And we know that there's a lot of value in experiential learning. And so we've been fortunate to have some folks, you know, that have worked at some of those, you know, kind iconic companies, join us and find that they really love this company building journey. We've also got some terrific younger folks that have, you know, some very fresh perspectives and a lot of, a lot of creativity. And they're bringing that together with our team overall. And you know, what we really are trying to do at the end of the day is find incredible founders who wanna build something lasting, insignificant, and provide our kind of our time, our best ideas, our, our perspective. And of course our capital to help them be >>Successful. I love the ecosystem play. I think that's a human capital game too. I like the way you guys are thinking about that. I do wanna get your reaction, cause I know you're close to Amazon and Microsoft, but mainly Jeff Bezos as well. You mentioned your, your partner who passed away was on the board. A lot of great props on and tributes online. I saw that, I know I didn't know him at all. So I really can't comment, but I did notice that Bezos and, and jazz in particular were complimentary. And recently I just saw Bezos comment on Twitter about the, you know, the Lord of the rings movie. They're putting out the series and he says, you gotta have a team. That's kinda like rebels. I'm paraphrasing, cuz these folks never done a movie like this before. So they're, they're getting good props and reviews in this new world order where entrepreneurs gotta do things different. >>What's the one thing that you think entrepreneurs need to do different to make this next startup journey different and successful because the world is different. There's not a lot of press to relate to Andy Jassey even on stage last week in, in, in LA was kind of, he's not really revealing. He's on his talking points, message, the press aren't out there and big numbers anymore. And you got a lot of different go-to market strategies, omnichannel, social different ways to communicate to customers. Yeah. So product market fit is becomes big. So how do you see this new flywheel emerging for those entrepreneurs have to go out there, roll up their sleeves and make it happen. And what kind of resources do you think they need to be successful? What are you guys advocating? >>Well, you know, what's really interesting about that question is I've heard Jeff say many times that when people ask him, what's gotta be different. He, he reminds them to think about what's not gonna change. And he usually starts to then talk about things like price, convenience, and selection. Customer's never gonna want a higher price, less convenience, smaller selection. And so when you build on some of those principles of, what's not gonna change, it's easier for you to understand what could be changing as it relates to the differences. One of the biggest differences, I don't think any of us have fully figured out yet is what does it mean to be productive in a hybrid work mode? We happen to believe that it's still gonna have a kernel of people that are geographically close, that are part of the founding and building in the early stages of a company. >>And, and it's an and equation that they're going to also have people that are distributed around the country, perhaps around the world that are some of the best talent that they attract to their team. The other thing that I think coming back to what remains the same is being hyper focused on a certain customer and a certain problem that you're passionate about solving. And that's really what we look for when we look for this founder market fit. And it can be a lot of different things from the next generation water bottle to a better way to handle deep learning models and get 'em deployed in the cloud. If you've got that passion and you've got some inkling of the skill of how to build a better solution, that's never gonna go away. That's gonna be enduring, but exactly how you do that as a team in a hybrid world, I think that's gonna be different. >>Yeah. One thing that's not changing is that your investor, makeup's not changing a hundred percent of your existing institutional investors have signed back on with you guys and your oversubscribed, lot of demand. What is your flywheel success formula? Why is Tron is so successful? Can you share some feedback from your investors? What are they saying? Why are they re-upping share some inside baseball or anecdotal praise? >>Well, I think it's very kind to you to frame it that way. I mean, you know, it does for investors come back to performance. You know, these are university endowments and foundations that have a responsibility to, to generate great returns. And we understand that and we're very aligned with that. I think to be specific in the last couple years, they appreciated that we were also not holding onto our, our stocks forever, that we actually made some thoughtful decisions to sell some shares of companies like Smartsheet and snowflake and accolade in others, and actually distribute capital back to them when things were looking really, really good. But I think the thing, other thing that's very important here is that we've created a flywheel with our core strategy being Seattle based and then going out from there to try to find the best founders, build great companies with them, roll up our sleeves in a productive way and help them for the long term, which now leads to multiple generations of people, you know, at those companies. And beyond that we wanna be, you know, partner with and back again. And so you create this flywheel by having success with people in doing it in a respectful. And as you said earlier, a trusted way, >>What's the message for the Silicon valley crowd, obviously bay area, Silicon valley, Palo Alto office, and the center of it. Obviously you got them hybrid workforce hybrid venture model developing what's the goals. What's the message for Silicon valley? >>Well, our message for folks in Silicon valley is the same. It's always been, we we're excited to partner with them largely up here again, cause this is still our home base, but there'll be a, you know, select number of opportunities where we'll get a chance to partner together down in Silicon valley. And we think we bring something different with that deep understanding of cloud computing, that deep understanding of applied machine learning. And of course, some of our unique relationships up here that can be additive to what the they've already done. And some of them are just great partners and have built, you know, help build some really incredible companies over >>The years. Matt, I really appreciate you taking the time for this interview, given them big news. I guess the question on everyone's mind, certainly the entrepreneur's mind is how do I get some of that cash you have and put it into work for my opportunity. One what's the investment thesis can take a minute to put the plug in for the firm. What are you looking to invest in? What's the thesis? What kind of entrepreneurs you're looking for? I know fund one is seed fund nine is seed to, to a and B and the second one is beyond B and beyond for growth. What's the pitch. What's the pitch. >>Yeah. Well you can, you can think of us as you know, any stage from pre-seed to series seed. You know, we'll make a new investment in companies in all of those stages. You know, I think that, you know, the, the core pitch, you know, to us is, you know, your passion for the, for the problem that you're trying to, trying to get solved. And we're of course, very excited about that. And you know, at, at, at the end of the day, you know, if you want somebody that has a distinct point of view on the market that is based up here and can roll up their sleeves and work alongside you. We're, we're, we're the ones that are more than happy to do that. Proven track record of doing that for 25 plus years. And there's so much innovation ahead. There's so many opportunities to disrupt to pioneer, and we're excited to be a part of working with great founders to do that. >>Well, great stuff. We'll see you ATS reinvent coming up shortly and your annual get together. You always have your crew down there and, and team engaging with some of the cloud players as well. And looking forward to seeing how the Palo Alto team expands out. And Matt, thanks for coming on the cube. Appreciate your time. >>Thanks very much, John. Appreciate you having me look forward to seeing you at reinvent. >>Okay. Matt, Matt here with Madrona venture group, he's the partner managing partner Madrona group raises 690 million to fund nine and, and, and again, and big funds for accelerated growth fund. Three lot of dry powder. Again, entrepreneurship in technology is scaling. It's not going down. It's continuing to accelerate into this next generation super cloud multi-cloud hybrid cloud world steady state. This is the cubes coverage. I'm John for Silicon angle and host of the cube. Thanks for watching.

>>The cube presents, Coon and cloud native con Europe 22, brought to you by the cloud native computing foundation. >>Welcome to Valencia Spain in co con cloud native con Europe, 2022. I'm Keith Townsend with my cohos on Rico senior. Etti senior it analyst at gig home. Exactly 7,500 people I'm told en Rico. What's the flavor of the show so far, >>It's a fantastic mood. I mean, I found a lot of people wanting to track talk about what they're doing with Kubernetes, sharing their, you know, stories, some word stories that meet tough. And you know, this is where you learn actually, because we had a lot of zoom calls, webinar and stuff, but it is when you talk a video, oh, I did it this way and it didn't work out very well. So, and, and you start a conversation like this that is really different from learning from zoom. When, you know, everybody talks about things that working well, they did it, right. No, it's here that you learn from other experiences. >>So we're talking to amazing people the whole week, talking about those experiences here on the queue, fresh on the queue for the first time, Chris Vos, senior software engineer at Microsoft Xbox, Chris, welcome to the queue. >>Thank you so much for having >>Me. So first off, give us a high level picture of the environment that you're running at Microsoft. >>Yeah. So, you know, we've got 20, well probably close to 30 clusters at this point around the globe, you know, 700 to a thousand pods per cluster, roughly. So about 22,000 pods total. So yeah, it's pretty pretty sizable footprint and yeah. So we've been running on Kubernetes since 2018 and well actually might be 2017, but anyways, so yeah, that, that's kind of our, our footprint. >>Yeah. So all of that, let's talk about the basics, which is security across multiple I'm assuming containers, work, microservices, et cetera. Why did you and the team settle on link or do >>Yeah, so previously we had our own kind of solution for managing TLS certs and things like that. And we found it to be pretty painful pretty quickly. And so we knew, you know, we wanted something that was a little bit more abstracted away from the developers and, and things like that that allowed us to move quickly. And so we began investigating, you know, solutions to that. And a few of our colleagues went to Cuban in San Diego in 2019 cloud native con as well. And basically they just, you know, sped it all up. And actually funny enough, my, my old manager was one of the people who was there and he went to the link D booth and they had a thing going that was like, Hey, get set up with MTLS in five minutes. And he was like, this is something we want to do, why not check this out? And he was able to do it. And so that, that put it on our radar. And so yeah, we investigated several others and Leer D just perfectly fit exactly what we needed. >>So, so in general, we are talking about, you know, security at scale. So how you manage security to scale and also flexibility, right. But you know, what is the you, this there, you told us about the five minutes to start using there, but you know, again, we are talking about word stories. We talk about, you know, all these. So what, what, what kind of challenges you found at the beginning when you start adopting this technology? >>So the biggest ones were around getting up and running with like a new service, especially in the beginning, right. We were, you know, adding a new service almost every day. It felt like. And so, you know, basically it took someone going through a whole bunch of different repos, getting approvals from everyone to get the SEARCHs minted, all that fun stuff, getting them put into the right environments and in the right clusters to make sure that, you know, everybody is talking appropriately. And just the amount of work that, that took alone was just a huge headache and a huge barrier to entry for us to, you know, quickly move up the number of services we have. So, >>So I'm, I'm trying to wrap my head around the scale of the challenge. When I think about certification or certificate management, I have to do it on a small scale and the, the, every now and again, when a certificate expires, it is just a troubleshooting pain. Yes. So as I think about that, it costs, it's not just certificates across 22,000 pods or it's certificates across 22,000 pods in multiple applications. How were you doing that before link D like, what was the, what and what were the pain points? Like? What happens when a certificate either fails or expired up not, not updated? >>So, I mean, to be completely honest, the biggest thing is we're just unable to make the calls, you know, out or, or in, based on yeah. What is failing basically. But, you know, we saw essentially an uptick in failures around a certain service and pretty quickly, I pretty quickly, we got used to the fact that it was like, oh, it's probably a cert expiration issue. And so we tried, you know, a few things in order to make that a little bit more automated and things like that, but we never came to a solution that like didn't require every engineer on the team to know essentially quite a bit about this, just to get into it, which was a huge issue. >>So talk about day two after you've deployed link D how did this alleviate software engineers and what was like the, the benefits of now having this automated way of managing >>Certs? So the biggest thing is like, there is no touch from developers, everyone on our team. Well, I mean, there are a lot of people who are familiar with security and certs and all of that stuff, but no one has to know it. Like it's not a requirement. Like for instance, I knew nothing about it when I joined the team. And even when I was setting up our newer clusters, I knew very little about it. And I was still able to really quickly set up blinker D, which was really nice. And, and it's been, you know, essentially we've been able to just kind of set it and not think about it too much. Obviously, you know, there are parts of it that you have to think about. We monitor it and all that fun stuff, but, but yeah, it's been pretty painless almost day one. It took a lot, a long time to trust it for developers. You know, anytime there was a failure, it's like, oh, could this be link or D you know, but after a while, like now we don't have that immediate assumption because people have built up that trust, but >>Also you have this massive infrastructure, I mean, 30 cluster. So I guess that it's quite different to manage a single cluster and 30. So what are the, you know, consideration that you have to do to install this software on, you know, 30 different cluster manage different, you know, versions probably etcetera, etcetera, et cetera. >>So, I mean, you know, the, the, as far as like, I guess, just to clarify, are you asking specifically with Linky or are you just asking in more in general? Well, >>I mean, you, you can take the, the question in the, in two ways, so, okay. Yeah. Yes. Link in particular, but the 30 cluster also quite interesting. >>Yeah. So, I mean, you know, more generally, you know, how we manage our clusters and things like that. We have, you know, a CLI tool that we use in order to like, change context very quickly and switch and communicate with whatever cluster we're trying to connect to and, you know, are we debugging or getting logs, whatever. And then, you know, with link D it's nice because again, you know, we, we, aren't having to worry about like, oh, how is this cert being inserted in the right node or, or not the right node, but in the right cluster or things like that. Whereas with link D we don't, we don't really have that concern when we spin up our, our clusters, essentially we get the root certificate and, and everything like that packaged up, passed along to link D on installation. And then essentially there's not much we have to do after that. >>So talk to me about your upcoming coming section here at Q con what's the, what's the high level talking points? Like what, what will attendees learn? >>Yeah. So it's, it's a journey. Those are the sorts of talks that I find useful. Having not been, you know, I, I'm not a deep Kubernetes expert from, you know, decades or whatever of experience, but I think >>Nobody is >>Also true. That's another story. That's a, that's, that's a job posting decades of requirements for >>Of course. Yeah. But so, you know, it, it's a journey it's really just like, Hey, what made us decide on a service mesh in the first place? What made us choose link D and then what are the ways in which, you know, we, we use link D so what are those, you know, we use some of the extra plugins and things like that. And then finally, a little bit about more, what we're gonna do in the future. >>Let's talk about not just necessarily the future as in two or three days from now, or two or three years from now. Well, the future after you immediately solve the, the low level problems with link D what were some of the, the surprises, because link D in service me in general has have side benefits. Do you experience any of those side benefits as well? >>Yeah, it's funny, you know, writing the, the blog post, you know, I hadn't really looked at a lot of the data in years on, you know, when we did our investigations and things like that. And we had seen that we like had very low latency and low CPU utilization and things like that. And looking at some of that, I found that we were actually saving time off of requests. And I couldn't really think of why that was, and I was talking with someone else and the biggest, unfortunately, all that data's gone now, like the source data. So I can't go back and verify this, but it, it makes sense, you know, there's the availability zone routing that linker D supports. And so I think that's actually doing it where, you know, essentially if a node is closer to another node, it's essentially, you know, routing to those ones. So when one service is talking to another service and maybe on they're on the same node, you know, it, it short circuits that, and allows us to gain some, some time there. It's not huge, but it adds up after, you know, 10, 20 calls down the line. Right. >>In general. So you are saying that it's smooth operations in, in ATS, very, you know, simplifying your life. >>And again, we didn't have to really do anything for that. It, it, it handled that for it was there. Yeah. Yep. Yeah, exactly. >>So we know one thing when I do it on my laptop, it works fine when I do it with across 22,000 pods, that's a different experience. What were some of the lessons learned coming out of KU con 2018 in San Diego was there? I wish I would've ran to the microphone folks, but what were some of the hard lessons learned scaling link D across the 22,000 nodes? >>So, you know, the, the first one, and this seems pretty obvious, but was just not something I knew about was the high availability mode of link D so obviously makes sense. You would want that in a, you know, a large scale environment. So like, that's one of the big lessons that like, we didn't ride away. No. Like one of the mistakes we made in, in one of our pre-production clusters was not turning that on. And we were kind of surprised. We were like, whoa, like all of these pods are spinning up, but they're having issues like actually getting injected and things like that. And we found, oh, okay. Yeah, you need to actually give it some, some more resources, but it's still very lightweight considering, you know, they have high availability mode, but it's just a few instances still. >>So from, even from a, you know, binary perspective and running link D how much overhead is it? >>That is a great question. So I don't remember off the top of my head, the numbers, but it's very lightweight. We, we evaluated a few different service missions and it was the lightest weight that we encountered at that point. >>And then from a resource perspective, is it a team of link D people? Is it a couple of people, like how >>To be completely honest for a long time, it was one person, Abraham who actually is the person who proposed this talk. He couldn't make it to Valencia, but he essentially did probably 95% of the work to get a into production. And then this was before we even had a team dedicated to our infrastructure. And so we have, now we have a team dedicated, we're all kind of Linky folks, if not Linky experts, we at least can troubleshoot basically. And things like that. So it's, I think a group of six people on our team, and then, you know, various people who've had experience with it >>On other teams, but I'm not dedicated just to that. >>I mean, >>No one is dedicated just to it. No, it's pretty like pretty light touch once it's, once it's up and running, it took a very long time for us to really understand it and, and to, you know, get like, not getting started, but like getting to where we really felt comfortable letting it go in production. But once it was there, like, it is very, very light touch. >>Well, I really appreciate you stopping by Chris. It's been an amazing conversation to hear how Microsoft is using a open source project. Exactly. At scale. It's just a few years ago, when you would've heard the concept of Microsoft and open source together and like, oh, that's just, you know, but >>They have changed a lot in the last few years now, there are huge contributors. And, you know, if you go to Azure, it's full of open source stuff, every >>So, yeah. Wow. The Cuban 2022, how the world has changed in so many ways from Licia Spain, I'm Keith Townsend, along with a Rico senior, you're watching the, the leader in high tech coverage.

our Studios in the heart of Silicon Valley Palo Alto California this is a cute conversation hello everyone welcome to the special cube conversation with a remote guest Steve Herod managing director of general kennel s he's a venture capitalist former CTO of VMware cube alumni Steve welcome to this special cube conversation coming in remote from Palo Alto you're right across town but still we're gonna grab you big news happening and also get your thoughts on the Emerald 2019 welcome to our remote conversation yeah hey Jon yeah we're close and yet this makes it even more convenient go we'd love the new format of bring people into no matter where they are no matter what whatever it takes to get the stories we want to do that and and two important ones to having we we know vm world's coming next week but congratulations in order to you and your portfolio companies signal FX another cube alumni firm we've been covering since the beginning of their funding acquisition by Splunk today for over a billion dollars sixty percent in cash and forty percent in stop congratulations you've been on the board you've known these guys from VMware quite a team quite an exit it's a win-win for those guys congratulations yeah great group of guys several of which were at VMware has you as you mentioned and as you've had on your show that's great they were doing a really good job of monitoring and getting metrics about applications and how they're doing it and they're marrying it with spunks ability to ingest logs and really understand operational data and I think the combination will be very powerful it brings kind of what we've been monitoring cloud 2.0 essentially monitoring 2.0 is really observability as the world starts moving into the the kinds of services we're seeing with cloud and on-premises operations more than ever that game has changes much more dynamic and the security impact is significant and certainly as applications connect whether it's IOT or any IP device having that data at scale is really a critical part of that and I know signal FX was one of those companies where you invested early and I remember interview them a couple years ago and saying damn these guys might be too early I mean they're so smart they're so on it but this is an example of skating to where the as Wayne Gretzky would say these guys were just hitting their stride Steve can you can you share any color commentary on on the deal and or you know why this is so important well they've been at this for a long time and they're a great team I've been involved as an investor less time obviously but yeah it was the really original team out of Facebook monitoring really at scale applications and then trying to take that technology that Facebook could use and applied it to our world and you know as you discovered we're in a world of micro services and containers and that is definitely hitting its stride right now and so they were in the right place knowing how to monitor this very fast moving information and and make some sense out of it so yeah really good job on their part and it was a pleasure to be along for part of the ride with them it's great to meet great founders that have a vision and stay the course because you know it's always tricky when you're early to see the future especially around ok we're talking micro services and containers way back before it became the rage and now more relevant operationally for enterprises it's easy to get distracted and it's fashion well just jump on this trend or this wave they stayed the course they stayed the nose to the grindstone and now observability which to me is code word for monitoring 2.0 is probably one of the hottest segments you saw companies going public companies filing the pager Duty dynaTrace now the you guys with your acquisition with signal FX this is an important sector this would normally be viewed in the IT world as kind of lists of white space but it seems to be a much bigger landscape can you comment on your view on this and why it's so important why is observability so hot Steve well it's been this actually been a great market to be in for quite a while they've been a large number of companies continuing to be both built up and it's pretty simple the amount of e-commerce or the amount of customer interactions you're having over applications and over the web has gone up and so anything is not performing well or house downtime literally cost you a lot of money as a company and so as these applications get more complex and they're being relied on more for revenue and for customer interactions you know simply you have to have better tools and that's gonna be something that continues to evolve we have more complex apps and more commerce is going to go through them complexity is obviously something that people a lot of people are talking about I want to ask you something around today's marketplace but I want you to compare and contrast it similarly to what your experience was at VMware when you the CTO you know virtualization evolved very very quickly and ended up becoming a really critical component of the infrastructure and a lot of people were pooh-poohing that initially at first and then all the sudden became we got to kill VMware and you know so the resiliency of VMware was such that they continued to innovate on virtualization and so that's been you know part of the legacy of VMware and VM roads will cover next next week but when you look at what's happening now with cloud computing and now some of the hybrid cloud opportunities with micro services and other other cool things the the role of the application is being is important part of the equation it used to be the stand up infrastructure and that would enable the application to do things virtualization kind of changed that game now you don't need to stand up any infrastructure you can just deploy an application then the infrastructure can be code and be self formed so you can have unique requirements as infrastructure driven by the application the whole world seems to have flipped around do you see it that way is that accurate assessment and what's your thoughts on that I think you're right on a bunch of fronts people have been calling it different things but the beauty of VMware and you know this is a while ago now but the reason it was successful is that you didn't have to change any of your software to use it sort of slid in underneath and added value but at the same time applications evolved and so the path of looking like hardware was something that was great for not changing applications you have to think about a little differently when people are taking advantage of new application patterns or new services that are in the cloud and as you build up these as they're called cloud native applications it really is about the infrastructure you know it's job and life as to run applications and it's it sort of felt like the other way around it needs to be you wrote an application for what your infrastructure was it shouldn't be like that anymore it's about what what you need to do to get the job done and so we see the evolution of the clouds and their services that are there certainly the notion of containers and a lot the stuff that VMware is now doing has been focused on those new applications and making sure VMware adds value to them whatever type of application they are it's interesting one of the exciting things in this wave that we're on this year around multi cloud hybrid cloud and public cloud now that we've kind of crossed over to the reality that public cloud has been there done that succeeded I call that cloud 1.0 you saw the emergence of hybrid cloud even early on around 2012-2013 we were talking about that at VMworld you know certainly Pat Kelson here but now you're seeing hybrid cloud validated you got outpost you got Azure stack among other things the reality is if you are cloud native you might not need to have anything on premise like companies like ours with 50 plus people we don't have an IT department but most enterprises have stuff on premise so the the nuance these days is around you know what's the architecture of IT these days when you add security into it's complicated so there's debates can there be a sole cloud for a workload certainly that's been something that we've been covering with the Amazon Jedi contract where it's not necessarily a sole cloud for the entire department of defense it's a sole cloud for the workload the military application workload or app the military it's 10 billion dollar application and it's okay to have one cloud as we would say but yet they're gonna use Microsoft's cloud for other things so the DoD's having a multiple cloud approach multiple environments multiple vendors if you will but you don't have to split the cloud up or say this is kind of one of those conversations really evolving quickly because there's no real school of thought around this other than the old way which was have a multi-vendor environment split two things what's your thoughts on the the workload relationship to the cloud is it okay to have a workload have a single clap for that workload and coexist with other clouds it's funny I've been thinking about this more lately where if you went back earlier in time forgetting cloud there used to be a lot of different type of servers that you could run on whether it be a mainframe or a mini mainframe or UNIX system or a Linux system and to some extent people are choosing what would run where based on the demands of the application sometimes on price sometimes on certifications or even what's been ported to the right one so this is I'm beating myself but you know that's that's a while ago it's not too different to kind of think about the different kind of cloud services are out there whether you're running your own on your own data center or whether you're leveraging one from the other partners I really do think in the ideal world you get your choice of the best possible platform for the application across a variety of characteristics and it's kind of up to the vendors of management software and monitoring software at security software to give you more flexibility to choose where to run and so forgetting VMware exactly but think of a virtualization layer that that really tries to abstract out and let you more fluidly run things on different clouds I do think that's where a lot of the you know the core software is head of these days to really enable that to work better and so a million other use cases with with you know storage being moved around for disaster recovery or for whatever it else might be but that core of flexibility reminds me a lot of you know choosing what application would one run would run where within your own company and the kubernetes trend in container certainly really makes that so much more flexible because you can still run VMware's on the ends beams under the covers or put stuff on bare metal a lot of great opportunities so it's exciting and you slap an API in front of them and and micro-services sort of works in tandem with that so that you you could really have your application composed across multiple environments and I think the observable observability is so hot because it takes what network management was doing in the old way which is monitoring making sure things are operating effectively and combining with data and so when I heard about the acquisition of signal FX into Splunk I'm like there it is we're back to data so observability is really a data challenge and opportunity for using what would be a white space monitoring but it's more than monitoring because it's about the data and the efficacy of that data and how it's being used whether it's for security or whatever your thoughts so there's more data than ever for sure and so being able to stream that in being able to capture it at cost all that is a big part of our you know the environments we all work and the key thing is turning that into some actionable insight and whether you're using you know interesting calculations for that or different forms of machine learning like that's where this really has to go is with all this data coming in do I avoid false false positives how do i only alert people when needed and then that allows you to do what everyone has talked about for 30 years which is automatic remediation but for now let's talk about it is how do i process all of this rich data and give me the right information to take action see we want to thank you for coming on this promote cube conversation you've been with us at the cube since 2010 I think our first cube event was EMC world 2010 that show doesn't exist any longer because that folded into Dell technologies world so VM world next week is the last show standing that has been around since the cube cubes been around of course you guys had the VM worlds had their 10th anniversary I think was 2013 as a show but this is our 10th year I want to thank you for being part of our community and being a contributor with your commentary and your friendship and referral appreciate all that so I gotta ask you looking back over the 10 years since you've been with the cube VMworld what's the most exciting moments what are moments that you can say hey that was an amazing time that was a grind but we got through it funny moments your thoughts yeah boy that's a tough question I've enjoyed you know working with you John and the cube there have been so many really interesting things for me the some of the big acquisitions that we went through at VMware where I think the nsx acquisition when we get nasarah I think that really pushed us in an interesting spot but we had gone through IPOs and acquisition ourselves by EMC and we've gone through some pretty vicious competition from whether it be Citrix or Zin or Microsoft yeah that's just the joy of being at these companies it's lots of ups and downs along the way but they all kind of fit together to make an exciting life what were some moments for you I know you had left was a twenty fifteen or twenty six point eight vs world you go down there yeah about six years what do you miss about VMware the team is what everyone kind of cliche says but it's totally true the chance to kind of work with all those people at the executive staff all the way down to like these awesome engineers with Co ideas so I definitely missed that miss shipping products you don't get to do that as much as a venture capitalist but but on the flip side this is a great world to be and I get to see enthusiastic you know very optimistic founders all day long pushing the envelope and while that was existing at the EM where it's it's what I see every single day here you've been on the cube ten times at vmworld that's the all time spot you're tied but first congratulations on the leaderboard well it's been a great ten years going forward we've seen more so go looking back I would say that you know Palmer it's taking over from Diane Greene really set the table he actually laid out essentially what I think now as a clearly a cloud SAS architecture I think he got that pretty much right again or maybe early in certain spots of what he proposed at that time though some things that didn't materialize as fast but ultimately from a core perspective you guys got that right and then went in try to do the cloud but then and this year it comes in for a software-defined you know line with Amazon and since that time the stock has been really kind of up to the right so you know some key moments there for VMware from small somalia more stuff it's fun to see pivotal now possibly coming back into after after getting started there but I think you know there's there's a hugely talented team of executives there Pat Yeltsin jurors come in and done a great job I think Raghu and all these folks that are in there are good thinkers and so I think you'll consider to continue to see it evolve quite a bit and probably some cool announcements next week talk about the role Raghu and the team played because he doesn't really get a lot of the spotlight he avoids it I know he'd I've talked to him privately he won't come on the qoi let the other guys go on other guys and gals so he's been instrumental he was really critical in multiple deals could you share some insight into his role at VMware VMware and why it's been so important well I'll push them to get on especially now that you have remote you can probably grab him no he and Rajiv and andraia Ferrell just all the guys are I think he and regime basically split up half and half of the products but I know Raghu is very very similar in the whole cloud strategy that has clearly been working well he's good friend in a very smart guy well I want you to give me a personal word that you're gonna give him in a headlock and tell him to come on the cube this year we want him on he's a great great great guest he's certainly knowledgeable going forward Steve 10 years out we still got 10 more years of great change coming if you look at the wave that's coming you're out investing in companies again you had one big exit today with the billion dollar acquisition that was happening by Splunk and signal affects a lot more action you've been investing in security what's your outlook as you look at the next ten years there's a lot more action to happen we seem to be early days in this new modern era historic time in the computer industry has applications of now dictating infrastructure capabilities is still a lot more to do what are you excited about there's there's a million things I get to see everyday which are clearly where the world is headed but I think at the end of the day there's there's infrastructure which the job and life of infrastructure is to run applications and so then you look at applications how are they changing and and what is the underlying fabric gonna need to do to support them and if you look at the future of applications it's clearly some amazing things around artificial intelligence and machine learning to actually make them smarter it's all different factors form factors that they're running on and being displayed on I think we clearly have a world where with the next generation of networking you can do even more at the edge and communicate in a very different way with the backend so I kind of look at all these application patterns and really try to think about what is the change to the underlying clouds and fabrics and compute that's going to be needed to run them I think we have plenty of headroom of interesting ideas ahead stew Dave and I were talks to Dave Stuben they want this too many man died we're talking about you know as infrastructure and cloud get automated as automation comes in new waves are gonna be formed from it what new waves do you see is it's like RPAs a I I mean because as those things get sucked in and they ships in to new waves what are the some of the key ways people should pay attention to I'm not saying the inverse tress is going away but as it becomes automated and as the shift happens the value still is there where is those new waves well I think today it looks like most applications are going to be composed of a lot of services and I think they're gonna be able they're gonna need to be displaying on everything from big screens to small screens to purely as headless api friends and so again I think at the end of the day this this infrastructure is gonna have to have a lot of computation capability have to crunch through tons of data but also have to stitch together these connections between components and provide really good experiences and ability in the network and all those are very hard problems that we've been working on for a while I think we're gonna keep working on them and new forms for the next ten years at least awesome see thanks for being a friend with us in the cube what's your funny favorite moment of the Q can you share any observations about the cube and your experiences your observations over the 10 years we've come a long way you've come a long way actually I've enjoyed it I mean it's a microcosm of all the other stuff going on but I saw your first little box that you built and used for the cube like that was that was really cool but now the fact that I'm on my laptop you know doing this over the network and it's showing up is pretty awesome so I think you're following the same patterns of the other of the other applications moving to the cloud and having good user experience because cube native here software if the male native Steve thank you so much for staying the time commenting on the acquisition I know it's fresh on the press a lot more analysis and cut to come next week it's certainly I'll be co-hosting ATS plunks Kampf later in the year so I'm looking forward to connecting with the team there and again thanks for all your contribution into the cube community we really appreciate it one thank you for your time thanks John you guys are awesome thanks for chatting okay Steve Herod managing director at General Counsel top tier VC from here in Silicon Valley and they have offices around the world I'm Jean ferré breaking down the news as well as a VM real preview with the former CTO of VMware Steve hare now a big-time venture capitalist I'm John Ferrier thanks for watching [Music] you [Music]

>> live from Boston, Massachusetts. It's the you covering your red have some twenty nineteen. You >> buy bread >> and welcome back to Boston as we continue our coverage here on the Cube of the Red Hat Summit twenty nineteen, along with two minimum. I'm John Walls, and we're now joined by the V, P and C e o of Delta Airlines. Mr. Rahul Samad. Good to see you, sir. Good to see you too, Jamie, For joining us. And you have a little keynote appearance coming through with five. Forty five s. So we will not be well, we won't hold you back. >> But thank you for squeezing this, and we really do. We appreciate that. >> First off, let's talk about just Delta >> from the macro level in terms of the technology emphasis that you have tohave now, obviously running an airline. Extraordinarily complex, sophisticated systems. But how the view of technology has evolved. Maybe over the last five, ten years, where it is today. >> Yeah. I mean, you know, technology has always been core. I mean, we had a reservation systems going back to the sixties on IBM mainframes, but it's as as things have digitalized and the customer experience has become the key and empowering our employees with insights and tools so they can take better care. Even better care of the customers has become the other problem, so it's kind of a two pronged approach to digitalize ing. The company and technology has become central Now. Our culture is all about people, and our frontline teammates take great care off our customers. But then technology plays a great role in empowering them to do that even better. Sighting. It's Ah, within the company. We say, you know, we're transforming technology until competitive advantage for Delta, and so relevance is not a problem. We are extremely relevant to the company, have been forever. But I think it's getting Mohr and Maury even more so today, especially at the customer interaction. Touch point. >> So we're who we understand how important technology is. You know, in your field there talk a little bit about kind of the role of the CEO. How you know, what's the business asking for you? What? The stressors on that and a little bit of that dynamic. >> Yeah, I think. Look, >> you know, I'm an equal member of the CEOs executive team, but you still have to earn your right. And so things like reliability and stability, availability, security become table stakes. And so, in sixteen and seventeen, I started in two thousand sixteen and we needed to focus on that. So I came in, you know, starry eyed going. I'm gonna digitalize the airline experience. But what I needed to focus on was, you know, the table stakes and sort of earning my place at that table rightfully And then that gives you permission to really start collaborating with the business and bringing technology solutions to bear on business opportunity. So we're there now, so it's really exciting time we launched in the Enterprise. Why the digital transformation of the company in early two thousand eighteen, which is again both employees and customers focus. And so clearly we are central to the role ofthe Delta and the airline. >> You just can you share with us? What are some of those key goals of that digital transformation? Obviously, you know, we're all your end ultimate customers wait, value there, but, you know, is data at the core of that digital train. >> You said it. You took >> the words right out of my mouth. You know, I mean any legacy legacy is like a four letter word when it comes to technology everywhere else. We take great pride in our ninety plus year legacy, but not so much with our aging technology. So part of it was, of course, you know you got to modernize the technology, so we're doing that in the background. But data was strewn all over the company. We know a lot about our customers, but we hadn't brought it together. So now we have we have a three sixty degree view. We call it the single view of the customer. Along with that, we also have a single view of the operation. So those two data repositories are now real time and building a pea eye's on top of that and unlocking the power of that data. Two equipped Like I said, the frontline employees, they've now got tools there mobile enable, and they have insights that they can take to serving the customer and then directly guessing both off your customers and directly with you. We've mobile enable the experience and given you ah, whole lot more across the entire traveled ribbon. So >> what are you >> learning then or what have you learned about customers then, in terms of that data collection, I'm sure. I mean, there's there's pretty first level stuff when they buy tickets where the travel to that kind of thing. But then I guess going deeper and learning more about behaviors and impulsive sze impulsive reactions to certain use. Whatever. >> Yep. What do you get it out? We're just >> starting. You know, that's an interesting when, John, because we we do have it. It's a huge data repository, and we're just starting to get the use case is built on that and where we focus our attention is on service. Recovered because we >> do it with >> service would call recovery. So you know whether when weather goes bad and the airline, you know, goes into what we call an irregular operation or an IRA in airline terms, you gotta put that back together and you've got to recover the customers. They might be delayed. They might have suffered a canceled flight or miss bag in spite of all our best efforts. And that's where we're applying the single view of the customer because we know the history ofthe all your interactions with us. And so at the top of the house. The executives decided that that's where we wanted to go. We wanted to make sure that we could acknowledge to you we could recognize interruptions on your next travel with us. But while it's happening, we could actually help get you out of that and on your way again. So now we're moving from that two more revenue generation and targeted offers and targeted recognition. But where we started was really around service recovery because we think you know that that's where customers sometimes feel the pain azaz. Muchas way try for them not to. But you know, whether it's not our ally at times >> and making the business case for that, then are you able to then see how behavior is modified in terms of whether it's customer reaction or customer uptake on your services, whatever and how that's translating to either pretension or business growth or something >> along Absolutely. Even even with the early use cases that we've put forward, we're seeing that I mean the the expectations off airlines over time the customers have and that they're going to use data and technology. Ah, effectively is, I think, fairly low on DSO the when we go up and our folks walk down the aisle with the handheld device on board and they acknowledge someone for hitting a million mile milestone or for achieving diamond status >> in a way, customers are are impressed and, you know, and then you go >> the next level and you're able to take care of them on a on a delay or on a cancel and re accommodate. Before they even called the service center. They've been re accommodated and rebuild. Those are things that I mean, they engender so much loyalty. Andi, I think its technology equipping our our employees in a big way. So the employees are doing great. Now you've put another helping of technology on top of it. Customers are are paying us for that way. Have ah revenue premium on. >> So you talk about internal, Tell us a little bit about your team. How much has this been in a digital transfer? Information is retraining. So how much you trying to get people from the outside? You know, we go to shows like this. Companies like yours are heavy recruiting mode. Typical absent skill sets are tough. You know what you're looking for? And give a little >> Yes, we've had >> Ah, very seasoned, you know, t team an organization. As you would expect, an attrition very low at adult. What what I needed to do was bring in about fifteen to twenty percent of the total team. Strength is knew. That's what I brought in about six hundred people in the last thirty six months. And those were people who were hired for contemporary skills. I call them Been there, done that type people. So Cloud Engineers, FBI people, agile cyber expert, and blending that with the seasoned veterans that know a lot about Del Tighty and know a lot about the airline domain was really important. So you didn't create haves and have nots because that could have easily happened. And then that causes a rupture. So we spent a lot of time on integrating those those two halves and making sure that this was a sort of a shot of adrenaline into the bloodstream. But the blood stream is strong, and the combined force of those two groups has been terrific for us. So that that's the other thing I would say. And I'm not saying that because I'm sitting here in the Red Hat Summit is the use ofthe partners, not just for products but a set of strategic partners. Whether it's Red Hat or IBM or Microsoft, right, a small set of partners becomes a force multiplier from a talent perspective. So they become an accelerant to the transformation. >> Well, you brought it up. Talk a little bit of partnerships. How do you look at this? Is it? I want to have a primary one. Is it a handful? Talk about that depth of relationship and what you're looking for from that Federico >> system. Absolutely. And look, we've got about a dozen that I meet at the the CEO president type level on an annual basis where I would say, you know, ten to twelve that we really are tight with and that are inside the tent. They understand the pillars off our transformation, and they know where they can provide swift acceleration to our transformation. And of course, right at is one and the others that I named. But they're they're they're giving us not just the product and the service, but they're in there helping us with setting the strategy and making sure that they put the right team on the ground with us or training our people. So it runs the gamut from, you know, sort of the system integrator type all the way to open source product pipes >> for the Red Happy's. Can you highlight What are you using? And, you know, are they involved in some of that training and transformation? >> And I think you know, >> the behind the scenes sort of under the hood. The platform is a service that gives us tremendous interoperability. We are young in our journey to the cloud, and like any big company, we're going to be multi cloud and hybrid. So we built our private cloud. We've got the the red had open shift container platform hosted in our private cloud. And so we're moving a lot of application components into that >> prior to that. And that's only >> about a year that we've been doing that. But prior to that, we've been big Lennox users, you know, Red Hat Enterprise, Lin X J boss, a whole plethora of products. But I think the platform is the service is really helping us with our cloud journey, and we're we're totally jazzed about that. >> You talked about hiring and six hundred two employees in a very short period of time class door. It just stood up and said, Hey, Delta Airlines, one of the top of companies for hiring software engineers >> after it was a very nice distinction to get. What does that do? Does that mean terms of first off? How do you do >> that in such an environment where you know everybody's after the same market, if you >> will. I think, you know, how do you feel about something today? I'm I'm validate a little bit really proud of that. And it actually wasn't something that you self >> nominate or you even have, you know, some kind of a selection process. It just arrived, you know, we didn't know about it. And those are some of the best ones because it's also recognition from your employees >> because they're the >> ones who are voting with their their posts and their the ones that are telling glass Door that this is a terrific place to work and we're doing a lot of new things and we're doing them at speed and it's very relevant to the customer experience into our front line employees experience. So >> there's an impact >> story this is this is the great thing about working for an airline. There's no place to run or hide when you're in I t. Because if it's down within fifteen minutes were front page news right somewhere. And so we strive hard to make sure it's never down. And on top of that, we're building, you know, these great digital experiences. So it's been really gratifying, and I think it's going to help us even further with our recruiting efforts. >> Yeah, it's interesting, you know, without getting political. It's like you're doing this modernization. But I mean, you've got heavy regulations on, you know, just some of the basic infrastructure of your industry is a little bit antiquated, you know, and comments >> on that. Well, I think it's It's a dichotomy, and I don't think we're >> unique. And I came out of banking to insurance to airlines, And you think that the way the financial services guys spend money on it, there would be no aging technology and there'd be no you no, none of that. Webb off connectivity. It's not true. I think any company that's been around forty fifties, you know, years >> has all the generations of technology still existing. So our Endeavour >> is to make sure that we deprecate out of that technology as quickly as we can and where it's useful. I mean, >> we still use mainframes >> for a really good purpose, and someone asked me just couple of weeks ago would you get out of it? And I said, >> No, it's a half a billion dollars project >> and it's a high risk project and IBM serves me really well, And for that purpose, the mainframe is exactly what the doctor ordered. So this >> isn't about >> ideology, right? This is about purpose built and custom build. So if there's a technology that fits the purpose, I'm gonna leave well alone. And I'm going to train people and recruit people so that I don't have a talent issue in ten or twenty years when it comes to mainframe people. We've had no problem in getting apprentices and keeping our mainframe talent pipeline gold so they never get away from it. >> Can you give us just a little sneak peek on the keynote tonight? >> I mean, just a maybe a high >> level here, a couple of things just for John, and it's going to be a fireside with Jim you'LL have to come in and we'll be there and listen. But I think Jim Jim's probably got a few questions up his sleeve is also, you know, Jim's got a heritage with Delta. He was our >> chief operating officer until I think about ten years ago. And so it >> should be a fun. He hasn't told me what he's going to ask, so it's gonna be interesting as to which way he's going to come. But I would assume he >> wants to talk about, you know, digital transformation and and, of course, how right ATS helping I would, I would seem there's going to be a question or two about about red >> handed. My only warning, obi, is what >> I hear when I walk on a Delta flight. Let's fasten your seat belt. >> Yes, there. Thank you. Thanks for the time and looks forward to Aquino tonight. Thank you so much, guys. All right. Back with more here on the Cube were watching coverage right now. Right. Had summit >> and we're in Boston, Massachusetts

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