>> From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE in ETR. This is "Breaking Analysis" with Dave Vellante. >> Despite all the talk about repatriation, hybrid and multi-Cloud opportunities, and Cloud is an increasingly expensive option for customers, the data continues to show the importance of public Cloud to the digital economy. Moreover, the two leaders, AWS and Azure, are showing signs of accelerated momentum that point to those two giants pulling away from the pack in the years ahead, with each firm's showing broad based momentum across their respective product lines. It's unclear if anything, other than government intervention or self-inflicted wounds will slow these two companies down this decade. Despite their commanding lead, a winning strategy for companies that don't run their own Cloud continues to be innovating on top of their massive CapEx investments. The most notable example here being Snowflake. Hello, everyone. Welcome to this week's Wikibon CUBE insights powered by ETR. In this breaking analysis, we provide our quarterly market share update for the big four hyperscale Cloud providers. And we'll share some new ETR data from their most recent survey. And we'll drill into some of the reasons for the momentum of these two companies and drill further into the database and data warehouse sector to see what, if anything, has changed in that space. First, let's look at some of the noteworthy comments from AWS and Microsoft in their recent earnings updates. We heard from Amazon, the following, "AWS has seen a reacceleration of revenue growth as customers have expanded their commitment to the Cloud and selected AWS as their Cloud partner." Notably, AWS revenues increased 39% in Q3 2021. That's a thousand basis point increase in growth relative to Q3 2020. That's an astounding milestone for a company that we expect to surpass $60 billion in revenue this year. Further, AWS touted the adoption of its custom silicon, and specifically its Graviton2 processors. AWS is fond of emphasizing Graviton's 40% price performance improvements relative to x86 processors, something we've reported on quite extensively. AWS is investing in custom silicon, encouraging ISVs to port their code to the platform so that customers will experience little or no code changes when they migrate. Again, we believe this is a secret weapon for AWS as its cost structure will continue to improve at a rate faster than competitors that don't have the resources or the skills or the stomach to develop such capabilities. Microsoft, for its part, also saw astoundingly good growth of 48% this past quarter for Azure. This is a company that we forecast will approach $40 billion in IaaS and PaaS public Cloud revenue this year. Microsoft's CEO, Satya Nadella, on its earnings call, emphasized the changing nature of Cloud expanding in a distributed fashion to the edge. He referenced Azure as the world's computer. Building on his statements last year that Microsoft is building out a powerful, ubiquitous, intelligent, sensing and predictive Cloud. Yes, folks, it does feel like we're entering the so-called Metaverse, doesn't it? Okay, to underscore the momentum of these two companies, let's take a look at the ETR breakdown of Net score, which measures spending momentum. This chart will be familiar to our listeners. It shows the breakdown of net score for AWS, with the lime green showing new adoptions. That's 11%. The forest green is spending more than 6% relative to the first half of this year. That's a very robust 53%. The gray is flat spending. That's 30% on a very, very large base. And the pink is spending declines of minus 6% or worse. That's 4%. And the bright red is defections i.e those leaving AWS. That's 1%. That's virtually non-existent. You subtract the reds from the greens and you get a net score of 59. Remember, anything over 40, we can still consider to be elevated. Let's look at that same data for Microsoft again. You have some new ads that lime green, that's 7%. The forest green is at 46% of customers spending more, which is an incredible figure for a company with revenues that will in the near term surpass $200 billion. And the red is in the low single digits. Buffered by its enormous PC software profits over the years, Microsoft is powered through its Window's Dogma and transitioned into a Cloud powerhouse. Let's now share some of our latest numbers for the big four hyperscale players, AWS, Azure, Alibaba and Google. Here, we show data for these companies from 2018 and our estimates for 2021. This data includes our final figures for AWS, Azure and GCP for Q3 with Alibaba yet to report. Remember, only AWS and Alibaba report IaaS revenue cleanly with Microsoft and Google, they give us a little breadcrumb nuggets that allow us to triangulate with our survey data and other intelligence. But it's our attempt to do an apples to apples comparison for those four companies using AWS and it's reporting as a baseline. In Q3, AWS reported more than $16 billion in revenue. We estimate Azure at 10 billion, Alibaba, we expect to come in at just under 3 billion, and GCP at 2.5 billion for the quarter. With three quarters of data in, with the exception of Alibaba, we're forecasting AWS to capture 51% of the big four revenue, the hyperscale revenue. And really we believe these are the only four hyperscalers. AWS will surpass 60 billion with Azure just under 40 billion, Alibaba approaching 11 billion, and Google coming in just under 10 billion for the year is our expectation. We forecast these four will account for $120 billion this year. That's a 41% increase over 2020 and the same collective growth rate as 2020 relative to 2019. We expect Azure to be 63% of the size of AWS revenue. So it is gaining share. Both of those companies, however, saw accelerated growth this past quarter with Alibaba and GCP's growth rates decelerating relative to last year. Now, let's take a closer look at those growth rates. This chart shows the quarterly growth rates for each of the four going back to the beginning of 2019. Both GCP and Alibaba are showing dramatic declines in growth rates, whereas, this past quarter Azure saw accelerated growth and AWS has now seen an increased rate of growth for the past two quarters. In fact, AWS' growth is about where it was in 2019 when it was around half of its current revenue size. And in 2019 growth was decelerating through the quarters as you can see where today that trend has reversed. It's quite amazing. All right, let's take a look at the broader Cloud landscape and bring back some ETR data. This chart that we're showing here, it shows net score or spending momentum on the vertical axis and market share or presence in the dataset on the horizontal axis. Note that red dotted line, anything above that we can still consider elevated and impressive. As when we've previously shared this data, AWS and Microsoft Azure are up and to the right. Now remember, this chart is not just counting IaaS and PaaS as we showed you earlier, it's however the customers views whatever they think Cloud is. And so they're likely including Microsoft SaaS in this picture. Which is why Microsoft shows larger than AWS despite what we showed you earlier. Nonetheless, these two are well ahead of the pack and the growth rates indicate that they're pulling away. But we've added some of the other players, most notably VMware Cloud on AWS. It's showing momentum as is VMware Cloud, which is VMware Cloud foundation and other on-prem Cloud offerings, even though it's below the red line for the on-prem piece, it's very respectable. The VMware Cloud on AWS has been consistently up above that red line. Has popped beneath it in some quarters, but it's very, very strong. As is, you know, Red Hat OpenShift, it's a little bit below the line, but it is respectable. We've superimposed this by the way. Red Hat OpenShift in the ETR platform is under the container orchestration taxonomy, but we'd like to put it in next to the Cloud players for context. That's how Red Hat sort of thinks about this as well. They think about OpenShift as Cloud. And then you can see the other players. Alibaba has got a small sample in the ETR dataset. Just does not enough presence in China. But Dell and HPE have started to show up in the Cloud taxonomy. So buyers are associating their private Clouds with Cloud. So Dell's Apex, HPE's GreenLake. So that's a positive. And you can see Oracle, which of course is OCI, Oracle Cloud infrastructure. And then IBM with its public Cloud. So, it's a positive that these on-prem players are showing up in this data, but the reality is the hyperscalers are growing collectively at 40% annually and the on-prem players are growing in the low single digits. So, and if you carve out the IaaS business of AWS and Azure, they're larger than most of the on-premises infrastructure players. And all the on-prem players are moving toward an as a service model, as I just alluded to. So, undoubtedly, hybrid multicloud edge are going to present opportunities for the likes of Dell, HPE, Cisco, VMware, IBM, Red Hat, et cetera. But they also present opportunities for the public Cloud players who have vibrant ecosystems and marketplaces much more diverse and deep than the traditional vendors. You know, we have a clearer picture of Microsoft's sort of hybrid and edge strategy because the company has such an enormous legacy business, it really had to think about that much more deeply. It wasn't a blank sheet of paper like AWS. It's going to be interesting at reinvent this year if new CEO, Adam Selipsky, will talk about this. And it will be good to hear how he's thinking about the next decade, how AWS thinks about hybrid and edge, I guarantee that with their developer affinity and custom Silicon capabilities, they're thinking about it differently than traditional enterprise players. And as we've stressed in this segment, they have across the board momentum. Now to quantify that, let's take a look at AWS as portfolio in the spending momentum within its product segments. This chart shows AWS's net scores or spending momentum in the areas where AWS participates in the ETR taxonomy. Again, note that red line. Anything above 40% is considered an elevated watermark. We're showing data from last October, this past July and the latest October 21 survey. That yellow line or a bar. What's notable is the yellow versus the gray bars up across the board for the most part, other than chime... And by the way, other than chime, everything is above the 40% mark as well. Now, we've highlighted database because we feel it's one of the most strategic sectors in a real battleground. So we want to drill into that a bit. Here's our familiar X Y graph showing Net score on the Y axis, remember, that's, again, spending momentum and market share or pervasiveness in the survey on the horizontal axis. This data, by the way, includes on-prem and Cloud database data warehouse. So keep that in mind. Let's start with one of our favorite topics; Snowflake. We've reported again and again and again, that we've never seen anything like this. The company's net score has moderated ever so slightly this quarter, but it's still just below 80%. Very highly elevated. Well, above that 40% mark. It's Snowflake's presence continues to grow as a gain share in the market. Snowflake is growing revenue in the triple digits. It's an insane pace, hence its current $115 billion market cap as of this episode. Now that said, all three US-based Cloud players there are above the 40% line with AWS and Microsoft having significant presence on the horizontal axis. You see Cockroach Labs, Redis, Couchbase, they're all elevated or highly elevated. Couchbase just went public this summer. So that may help with its presence. MongoDB, they're killing it. They have a $37 billion market cap as of this episode. The stock has been on a tear. You see MariaDB was also in the mix. And then of course you have Oracle, the database leader. Look, they continue to invest in making the Oracle database and other software like MySQL, the best solution for mission critical workloads, and they're investing in their Cloud. But you can see overall, they just don't have the momentum from a spending standpoint that the others do because the declines in their legacy business. And they've been around a long time. Those declines are not fully offset by the growth in Cloud database and Cloud migration. But look, Oracle is a financial powerhouse with a $250 billion plus market cap. And the stock has done very well this past year. Up over 60%. Cloudera is going private. So it can hide the pain of the transitions that it's undergoing between the legacy install bases of Cloudera and Hortonworks. It's just a tough situation. When the companies came together, Cloudera essentially had a dead end. Each of those respective platforms and migrate their customers to a more modern stack as part of its Cloud strategy. Ironic that it's name is Cloudera. You know, that's always a difficult thing to do. So as a private company, Cloudera can maybe get off that 90 day shot clock and buy some time to invest without getting hammered by the street. And you know, Teradata consistently has not shown up well in the ETR dataset. It's transitioned to Cloud and cross-Cloud still hasn't shown momentum in the surveys. So, look right now, it's looking like the rich get richer. So just to quantify that a little bit, let's line up some of the database players and look a little bit more closely at net score. This chart shows the spending momentum or lack thereof with the net score or spending velocity granularity that we described before. Remember, green is spending more, red is spending less, bright red is leaving the platform, bright green is adding the platform. You take red, subtract red from the green, and that gives you a net score. Snowflake, as we said, tops the list. You can see the granularity there. You can compare the performance. In a little different view to understand how these scores are derived, look, the ideal profile is a solid lime green, a big forest green, a not too large gray and ideally little or no bright red AKA defections. And you can see the green funnel in the gray increasing prominence as the vendor momentum declines. Interestingly, with the exception of Cloudera and Teradata, defections are all in the single digits or nonexistent. In the case of Snowflake, Redis, red is no red at all, but small sample, Couchbase has no defections and very little defection for the giant Microsoft. Incredibly impressive. This speaks to how hard it is to migrate off of a database no matter how disgruntled you are. The more common scenario is to isolate the database and build new functionality on modern platforms. Okay, so what to watch out for. Well, reinvent this coming up next month. Oh this month. It's the first time someone other than Andy Jassy will be keynoting as CEO. 15 years of Cloud, this is the 10th re-invent, which is always a market for the direction of the industry. I've said many times that the last decade was largely about IT transformation powered by the Cloud. I believe we're entering a new era of business transformation where the Cloud is going to play a significant role. But the Cloud is evolving from a set of remote services out there in the Cloud to an omnipresent platform on top of which many customers and technology companies can innovate. And virtually every industry will be impacted by Cloud. However it evolves in the coming decade. The question will be, how fast can you go? And how will players like AWS and Microsoft and many others that are building on top of these platforms make it easier for you to go fast? That's what I'll be watching for at re-invent and beyond. Okay, that's a wrap for today. Remember, these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis podcasts. Check out ETR's website at etr.plus. We also publish a full report every week on wikibon.com and siliconangle.com. You can get in touch with me, david.vellante@siliconangle.com. You can DM me @dvellante or comment on our LinkedIn posts. This is Dave Vellante for theCUBE insights powered by ETR. Have a great week, everybody. Stay safe, be well. And we'll see you next time. We'll see you at re-invent. (soft upbeat music)

[Music] the history of exadata in the platform is really unique and from my vantage point it started earlier this century as a skunk works inside of oracle called project sage back when grid computing was the next big thing oracle saw that betting on standard hardware would put it on an industry curve that would rapidly evolve and i remember the oracle hp database machine which was announced at oracle open world almost 15 years ago and then exadata kept evolving after the sun acquisition it became a platform that had tightly integrated hardware and software and today exadata it keeps evolving almost like a chameleon to address more workloads and reach new performance levels last april for example oracle announced the availability of exadata x9m in oci oracle cloud infrastructure and introduced the ability to run the autonomous database service or the exa data database service you know oracle often talks about they call it stock exchange performance level kind of no description needed and sort of related capabilities the company as we know is fond of putting out benchmarks and comparisons with previous generations of product and sometimes competitive products that underscore the progress that's being made with exadata such as 87 percent more iops with metrics for latency measured in microseconds mics instead of milliseconds and many other numbers that are industry-leading and compelling especially for mission-critical workloads one thing that hasn't been as well publicized is that exadata on oci is using amd's epyc processors in the database service epyc is not eastern pacific yacht club for all your sailing buffs rather it stands for extreme performance yield computing the enterprise grade version of amd's zen architecture which has been a linchpin of amd's success in terms of penetrating enterprise markets and to focus on the innovations that amd and oracle are bringing to market we have with us today juan loyza who's executive vice president of mission critical technologies at oracle and mark papermaster who's the cto and evp of technology and engineering at amd juan welcome back to the show mark great to have you on thecube and your first appearance thanks for coming on yep happy to be here thank you all right juan let's start with you you've been on thecube a number of times as i said and you've talked about how exadata is a top platform for oracle database we've covered that extensively what's different and unique from your point of view about exadata cloud infrastructure x9m on oci yeah so as you know exadata it's designed top down to be the best possible platform for database uh it has a lot of unique capabilities like we make extensive use of rdma smart storage we take advantage of you know everything we can in the leading uh hardware platforms and x9m is our next generation platform and it does exactly that we're always wanting to be to get all the best that we can from the available hardware that our partners like amd produce and so that's what x9 in it is it's faster more capacity lower latency more ios pushing the limits of the hardware technology so we don't want to be the limit the software the database software should not be the limit it should be uh the actual physical limits of the hardware and that that's what x9m is all about why won amd chips in x9m uh yeah so we're we're uh introducing uh amd chips we think they provide outstanding performance uh both for oltp and for analytic workloads and it's really that simple we just think that performance is outstanding in the product yeah mark your career is quite amazing i've been around long enough to remember the transition to cmos from emitter coupled logic in the mainframe era back when you were at ibm that was an epic technology call at the time i was of course steeped as an analyst at idc in the pc era and like like many witnessed the tectonic shift that apple's ipod and iphone caused and the timing of you joining amd is quite important in my view because it coincided with the year that pc volumes peaked and marked the beginning of what i call a stagflation period for x86 i could riff on history for hours but let's focus on the oracle relationship mark what are the relevant capabilities and key specs of the amd chips that are used in exadata x9m on oracle's cloud well thanks and and uh it's really uh the basis of i think the great partnership that we have with oracle on exadata x9m and that is that the amd technology uses our third generation of zen processors zen was you know architected to really bring high performance you know back to x86 a very very strong road map that we've executed you know on schedule to our commitments and this third generation does all of that it uses a seven nanometer cpu that is a you know core that was designed to really bring uh throughput uh bring you know really high uh efficiency uh to computing uh and just deliver raw capabilities and so uh for uh exadata x9m uh it's really leveraging all of that it's it's a uh implemented in up to 64 cores per socket it's got uh you know really anywhere from 128 to 168 pcie gen 4 io connectivity so you can you can really attach uh you know all of the uh the necessary uh infrastructure and and uh storage uh that's needed uh for exadata performance and also memory you have to feed the beast for those analytics and for the oltp that juan was talking about and so it does have eight lanes of memory for high performance ddr4 so it's really as a balanced processor and it's implemented in a way to really optimize uh high performance that that is our whole focus of uh amd it's where we've you know reset the company focus on years ago and uh again uh you know great to see uh you know the the super smart uh you know database team at oracle really a partner with us understand those capabilities and it's been just great to partner with them to uh you know to you know enable oracle to really leverage the capabilities of the zen processor yeah it's been a pretty amazing 10 or 11 years for both companies but mark how specifically are you working with oracle at the engineering and product level you know and what does that mean for your joint customers in terms of what they can expect from the collaboration well here's where the collaboration really comes to play you think about a processor and you know i'll say you know when one's team first looked at it there's general benchmarks and the benchmarks are impressive but they're general benchmarks and you know and they showed you know the i'll say the you know the base processing capability but the partnership comes to bear uh when it when it means optimizing for the workloads that exadata x9m is really delivering to the end customers and that's where we dive down and and as we uh learn from the oracle team we learned to understand where bottlenecks could be uh where is there tuning that we could in fact in fact really boost the performance above i'll say that baseline that you get in the generic benchmarks and that's what the teams have done so for instance you look at you know optimizing latency to rdma you look at just throughput optimizing throughput on otp and database processing when you go through the workloads and you take the traces and you break it down and you find the areas that are bottlenecking and then you can adjust we have you know thousands of parameters that can be adjusted for a given workload and that's again that's the beauty of the partnership so we have the expertise on the cpu engineering uh you know oracle exudated team knows innately what the customers need to get the most out of their platform and when the teams came together we actually achieved anywhere from 20 percent to 50 gains on specific workloads it's really exciting to see so okay so so i want to follow up on that is that different from the competition how are you driving customer value you mentioned some you know some some percentage improvements are you measuring primarily with with latency how do you look at that well uh you know we are differentiated with the uh in the number of factors we bring a higher core density we bring the highest core density certainly in x86 and and moreover what we've led the industry is how to scale those cores we have a very high performance fabric that connects those together so as as a customer needs more cores again we scale anywhere from 8 to 64 cores but what the trick is uh that is you add more cores you want the scale the scale to be as close to linear as possible and so that's a differentiation we have and we enable that again with that balanced computer of cpu io and memory that we design but the key is you know we pride ourselves at amd of being able to partner in a very deep fashion with our customers we listen very well i think that's uh what we've had the opportunity uh to do with uh juan and his team we appreciate that and and that is how we got the kind of performance benefits that i described earlier it's working together almost like one team and in bringing that best possible capability to the end customers great thank you for that one i want to come back to you can both the exadata database service and the autonomous database service can they take advantage of exadata cloud x9m capabilities that are in that platform yeah absolutely um you know autonomous is basically our self-driving version of the oracle database but fundamentally it is the same uh database course so both of them will take advantage of the tremendous performance that we're getting now you know when when mark takes about 64 cores that's for chip we have two chips you know it's a two socket server so it's 128 128-way processor and then from our point of view there's two threads so from the database point there's 200 it's a 256-way processor and so there's a lot of raw performance there and we've done a lot of work with the amd team to make sure that we deliver that to our customers for all the different kinds of workload including otp analytics but also including for our autonomous database so yes absolutely allah takes advantage of it now juan you know i can't let you go without asking about the competition i've written extensively about the big four hyperscale clouds specifically aws azure google and alibaba and i know that don't hate me sometimes it angers some of my friends at oracle ibm too that i don't include you in that list but but i see oracle specifically is different and really the cloud for the most demanding applications and and top performance databases and not the commodity cloud which of course that angers all my friends at those four companies so i'm ticking everybody off so how does exadata cloud infrastructure x9m compare to the likes of aws azure google and other database cloud services in terms of oltp and analytics value performance cost however you want to frame it yeah so our architecture is fundamentally different uh we've architected our database for the scale out environment so for example we've moved intelligence in the storage uh we've put uh remote direct memory access we put persistent memory into our product so we've done a lot of architectural changes that they haven't and you're starting to see a little bit of that like if you look at some of the things that amazon and google are doing they're starting to realize that hey if you're gonna achieve good results you really need to push some database uh processing into the storage so so they're taking baby steps toward that you know you know roughly 15 years after we we've had a product and again at some point they're gonna realize you really need rdma you really need you know more uh direct access to those capabilities so so they're slowly getting there but you know we're well ahead and what you know the way this is delivered is you know better availability better performance lower latency higher iops so and this is why our customers love our product and you know if you if you look at the global fortune 100 over 90 percent of them are running exit data today and even in the in our cloud uh you know over 60 of the global 100 are running exadata in the oracle cloud because of all the differentiated uh benefits that they get uh from the product uh so yeah we're we're well ahead in the in the database space mark last question for you is how do you see this relationship evolving in the future can you share a little road map for the audience you bet well first off you know given the deep partnership that we've had on exudate x9m uh it it's really allowed us to inform our future design so uh in our current uh third generation epic epyc is uh that is really uh what we call our epic server offerings and it's a 7003 third gen in and exudate x9m so what about fourth gen well fourth gen is well underway uh you know it and uh and uh you know ready to you know for the for the future but it incorporates learning uh that we've done in partnership with with oracle uh it's gonna have even more through capabilities it's gonna have expanded memory capabilities because there's a cxl connect express link that'll expand even more memory opportunities and i could go on so you know that's the beauty of a deep partnership as it enables us to really take that learning going forward it pays forward and we're very excited to to fold all of that into our future generations and provide even a better capabilities to one and his team moving forward yeah you guys have been obviously very forthcoming you have to be with with with zen and epic juan anything you'd like to add as closing comments yeah i would say that in the processor market there's been a real acceleration in innovation in the last few years um there was you know a big move 10 15 years ago when multi-core processors came out and then you know we were on that for a while and then things started staggering but in the last two or three years and amd has been leading this um there's been a dramatic uh acceleration in innovation in this space so it's very exciting to be part of this and and customers are getting a big benefit from this all right chance hey thanks for coming back in the cube today really appreciate your time thanks glad to be here all right thank you for watching this exclusive cube conversation this is dave vellante from thecube and we'll see you next time [Music]

[Music] is an open source first company right and we've been around for 20 years and we're pretty amazing at being good at open source giving back to the community building software with people and sharing it back to the community the cubism is an amazing kind of community outreach show and it's really great to be able to communicate and talk to the right people working with the cube has been incredible we do have a couple people that have been on the show a lot and like been able to do that and i think you're very friendly um and yeah just just have a good community around you i've worked for microsoft for a really long time and this is my first reinvent and it's it feels a little odd to be here for a non-microsoft event um and odd and exciting in a way um we are so redhead is partnering with both aws azure as well as gcp ibm and we we are working across different clouds partnering with a lot of cloud providers and i think this is a very interesting new relationship that we have that is new to me compared to being very committed to one single vendor one single line of business like one single operating system and stuff like that being able to partner with different people across the industry and board can build stuff together for the customers one word community

from the cube studios in palo alto in boston bringing you data-driven insights from the cube and etr this is breaking analysis with dave vellante you know we've often said that the next 10 years in cloud computing won't be like the last ten cloud has firmly planted its footprint on the other side of the chasm with the momentum of the entire multi-trillion dollar tech business behind it both sellers and buyers are leaning in by adopting cloud technologies and many are building their own value layers on top of cloud in the coming years we expect innovation will continue to coalesce around the three big u.s clouds plus alibaba in apac with the ecosystem building value on top of the hardware saw tooling provided by the hyperscalers now importantly we don't see this as a race to the bottom rather our expectation is that the large public cloud players will continue to take cost out of their platforms through innovation automation and integration while other cloud providers and the ecosystem including traditional companies that buy it mine opportunities in their respective markets as matt baker of dell is fond of saying this is not a zero sum game welcome to this week's wikibon cube insights powered by etr in this breaking analysis we'll update you on our latest projections in the cloud market we'll share some new etr survey data with some surprising nuggets and drill into this the important cloud database landscape first we want to take a look at what people are talking about in cloud and what's been in the recent news with the exception of alibaba all the large cloud players have reported earnings google continues to focus on growth at the expense of its profitability google reported that it's cloud business which includes applications like google workspace grew 45 percent to five and a half billion dollars but it had an operating loss of 890 billion now since thomas curion joined google to run its cloud business google has increased head count in its cloud business from 25 000 25 000 people now it's up to 40 000 in an effort to catch up to the two leaders but playing catch up is expensive now to put this into perspective let's go back to aws's revenue in q1 2018 when the company did 5.4 billion so almost exactly the same size as google's current total cloud business and aws is growing faster at the time at 49 don't forget google includes in its cloud numbers a big chunk of high margin software aws at the time had an operating profit of 1.4 billion that quarter around 26 of its revenues so it was a highly profitable business about as profitable as cisco's overall business which again is a great business this is what happens when you're number three and didn't get your head out of your ads fast enough now in fairness google still gets high marks on the quality of its technology according to corey quinn of the duck bill group amazon and google cloud are what he called neck and neck with regard to reliability with microsoft azure trailing because of significant disruptions in the past these comments were made last week in a bloomberg article despite some recent high-profile outages on aws not surprisingly a microsoft spokesperson said that the company's cloud offers industry-leading reliability and that gives customers payment credits after some outages thank you turning to microsoft and cloud news microsoft's overall cloud business surpassed 22 billion in the december quarter up 32 percent year on year like google microsoft includes application software and sas offerings in its cloud numbers and gives little nuggets of guidance on its azure infrastructure as a service business by the way we estimate that azure comprises about 45 percent of microsoft's overall cloud business which we think hit a 40 billion run rate last quarter microsoft guided in its earning call that recent declines in the azure growth rates will reverse in q1 and that implies sequential growth for azure and finally it was announced that the ftc not the doj will review microsoft's announced 75 billion acquisition of activision blizzard it appears ftc chair lena khan wants to take this one on herself she of course has been very outspoken about the power of big tech companies and in recent a recent cnbc interview suggested that the u.s government's actions were a meaningful contributor back then to curbing microsoft's power in the 90s i personally found that dubious just ask netscape wordperfect novell lotus and spc the maker of harvard presentation graphics how effective the government was in curbing microsoft power generally my take is that the u s government has had a dismal record regulating tech companies most notably ibm and microsoft and it was market forces company hubris complacency and self-inflicted wounds not government intervention these were far more effective than the government now of course if companies are breaking the law they should be punished but the u.s government hasn't been very productive in its actions and the unintended consequences of regulation could be detrimental to the u.s competitiveness in the race with china but i digress lastly in the news amazon announced earnings thursday and the company's value increased by 191 billion dollars on friday that's a record valuation gain for u.s stocks aws amazon's profit engine grew 40 percent year on year for the quarter it closed the year at 62 billion dollars in revenue and at a 71 billion dollar revenue run rate aws is now larger than ibm which without kindrel is at a 67 billion dollar run rate just for context ibm's revenue in 2011 was 107 billion dollars now there's a conversation going on in the media and social that in order to continue this growth and compete with microsoft that aws has to get into the sas business and offer applications we don't think that's the right strategy for amp from for amazon in the near future rather we see them enabling developers to compete in that business finally amazon disclosed that 48 of its top 50 customers are using graviton 2 instances why is this important because aws is well ahead of the competition in custom silicon chips is and is on a price performance curve that is far better than alternatives especially those based on x86 this is one of the reasons why we think this business is not a race to the bottom aws is being followed by google microsoft and alibaba in terms of developing custom silicon and will continue to drive down their internal cost structures and deliver price performance equal to or better than the historical moore's law curves so that's the recent news for the big u.s cloud providers let's now take a look at how the year ended for the big four hyperscalers and look ahead to next year here's a table we've shown this view before it shows the revenue estimates for worldwide is and paths generated by aws microsoft alibaba and google now remember amazon and alibaba they share clean eye ass figures whereas microsoft and alphabet only give us these nuggets that we have to interpret and we correlate those tidbits with other data that we gather we're one of the few outlets that actually attempts to make these apples to apples comparisons there's a company called synergy research there's another firm that does this but i really can't map to their numbers their gcp figures look far too high and azure appears somewhat overestimated and they do include other stuff like hosted private cloud services but it's another data point that you can use okay back to the table we've slightly adjusted our gcp figures down based on interpreting some of alphabet's statements and other survey data only alibaba has yet to announce earnings so we'll stick to a 2021 market size of about 120 billion dollars that's a 41 growth rate relative to 2020 and we expect that figure to increase by 38 percent to 166 billion in 2022 now we'll discuss this a bit later but these four companies have created an opportunity for the ecosystem to build what we're calling super clouds on top of this infrastructure and we're seeing it happen it was increasingly obvious at aws re invent last year and we feel it will pick up momentum in the coming months and years a little bit more on that later now here's a graphical view of the quarterly revenue shares for these four companies notice that aws has reversed its share erosion and is trending up slightly aws has accelerated its growth rate four quarters in a row now it accounted for 52 percent of the big four hyperscaler revenue last year and that figure was nearly 54 in the fourth quarter azure finished the year with 32 percent of the hyper scale revenue in 2021 which dropped to 30 percent in q4 and you can see gcp and alibaba they're neck and neck fighting for the bronze medal by the way in our recent 2022 predictions post we said google cloud platform would surpass alibaba this year but given the recent trimming of our numbers google's got some work to do for that prediction to be correct okay just to put a bow on the wikibon market data let's look at the quarterly growth rates and you'll see the compression trends there this data tracks quarterly revenue growth rates back to 20 q1 2019 and you can see the steady downward trajectory and the reversal that aws experienced in q1 of last year now remember microsoft guided for sequential growth and azure so that orange line should trend back up and given gcp's much smaller and big go to market investments that we talked about we'd like to see an acceleration there as well the thing about aws is just remarkable that it's able to accelerate growth at a 71 billion run rate business and alibaba you know is a bit more opaque and likely still reeling from the crackdown of the chinese government we're admittedly not as close to the china market but we'll continue to watch from afar as that steep decline in growth rate is somewhat of a concern okay let's get into the survey data from etr and to do so we're going to take some time series views on some of the select cloud platforms that are showing spending momentum in the etr data set you know etr uses a metric we talked about this a lot called net score to measure that spending velocity of products and services netscore basically asks customers are you spending more less or the same on a platform and a vendor and then it subtracts the lesses from the moors and that yields a net score this chart shows net score for five cloud platforms going back to january 2020. note in the table that the table we've inserted inside that chart shows the net score and shared n the latter metric indicates the number of mentions in the data set and all the platforms we've listed here show strong presence in the survey that red dotted line at 40 percent that indicates spending is at an elevated level and you can see azure and aws and vmware cloud on aws as well as gcp are all nicely elevated and bounding off their october figures indicating continued cloud momentum overall but the big surprise in these figures is the steady climb and the steep bounce up from oracle which came in just under the 40 mark now one quarter is not necessarily a trend but going back to january 2020 the oracle peaks keep getting higher and higher so we definitely want to keep watching this now here's a look at some of the other cloud platforms in the etr survey the chart here shows the same time series and we've now brought in some of the big hybrid players notably vmware cloud which is vcf and other on-prem solutions red hat openstack which as we've reported in the past is still popular in telcos who want to build their own cloud we're also starting to see hpe with green lake and dell with apex show up more and ibm which years ago acquired soft layer which was really essentially a bare metal hosting company and over the years ibm cobbled together its own public cloud ibm is now racing after hybrid cloud using red hat openshift as the linchpin to that strategy now what this data tells us first of all these platforms they don't have the same presence in the data set as do the previous players vmware is the one possible exception but other than vmware these players don't have the spending velocity shown in the previous chart and most are below the red line hpe and dell are interesting and notable in that they're transitioning their early private cloud businesses to dell gr sorry hpe green lake and dell apex respectively and finally after years of kind of staring at their respective navels in in cloud and milking their legacy on-prem models they're finally building out cloud-like infrastructure for their customers they're leaning into cloud and marketing it in a more sensible and attractive fashion for customers so we would expect these figures are going to bounce around for a little while for those two as they settle into a groove and we'll watch that closely now ibm is in the process of a complete do-over arvin krishna inherited three generations of leadership with a professional services mindset now in the post gerschner gerstner era both sam palmisano and ginny rometty held on far too long to ibm's service heritage and protected the past from the future they missed the cloud opportunity and they forced the acquisition of red hat to position the company for the hybrid cloud remedy tried to shrink to grow but never got there krishna is moving faster and with the kindred spin is promising mid-single-digit growth which would be a welcome change ibm is a lot of work to do and we would expect its net score figures as well to bounce around as customers transition to the future all right let's take a look at all these different players in context these are all the clouds that we just talked about in a two-dimensional view the vertical axis is net score or spending momentum and the horizontal axis is market share or presence or pervasiveness in the data set a couple of call-outs that we'd like to make here first the data confirms what we've been saying what everybody's been saying aws and microsoft stand alone with a huge presence many tens of billions of dollars in revenue yet they are both well above the 40 line and show spending momentum and they're well ahead of gcp on both dimensions second vmware while much smaller is showing legitimate momentum which correlates to its public statements alibaba the alibaba in this survey really doesn't have enough sample to make hardcore conclusions um you can see hpe and dell and ibm you know similarly they got a little bit more presence in the data set but they clearly have some work to do what you're seeing there is their transitioning their legacy install bases oracle's the big surprise look what oracle was in the january survey and how they've shot up recently now we'll see if this this holds up let's posit some possibilities as to why it really starts with the fact that oracle is the king of mission critical apps now if you haven't seen video on twitter you have to check it out it's it's hilarious we're not going to run the video here but the link will be in our post but i'll give you the short version some really creative person they overlaid a data migration narrative on top of this one tooth guy who speaks in spanish gibberish but the setup is he's a pm he's a he's a a project manager at a bank and aws came into the bank this of course all hypothetical and said we can move all your apps to the cloud in 12 months and the guy says but wait we're running mission critical apps on exadata and aws says there's nothing special about exadata and he starts howling and slapping his knee and laughing and giggling and talking about the 23 year old senior engineer who says we're going to do this with microservices and he could tell he was he was 23 because he was wearing expensive sneakers and what a nightmare they encountered migrating their environment very very very funny video and anyone who's ever gone through a major migration of mission critical systems this is gonna hit home it's funny not funny the point is it's really painful to move off of oracle and oracle for all its haters and its faults is really the best environment for mission critical systems and customers know it so what's happening is oracle's building out the best cloud for oracle database and it has a lot of really profitable customers running on-prem that the company is migrating to oracle cloud infrastructure oci it's a safer bet than ripping it and putting it into somebody else's cloud that doesn't have all the specialized hardware and oracle knowledge because you can get the same integrated exadata hardware and software to run your database in the oracle cloud it's frankly an easier and much more logical migration path for a lot of customers and that's possibly what's happening here not to mention oracle jacks up the license price nearly doubles the license price if you run on other clouds so not only is oracle investing to optimize its cloud infrastructure it spends money on r d we've always talked about that really focused on mission critical applications but it's making it more cost effective by penalizing customers that run oracle elsewhere so this possibly explains why when the gartner magic quadrant for cloud databases comes out it's got oracle so well positioned you can see it there for yourself oracle's position is right there with aws and microsoft and ahead of google on the right-hand side is gartner's critical capabilities ratings for dbms and oracle leads in virtually all of the categories gartner track this is for operational dvms so it's kind of a narrow view it's like the red stack sweet spot now this graph it shows traditional transactions but gartner has oracle ahead of all vendors in stream processing operational intelligence real-time augmented transactions now you know gartner they're like old name framers and i say that lovingly so maybe they're a bit biased and they might be missing some of the emerging opportunities that for example like snowflake is pioneering but it's hard to deny that oracle for its business is making the right moves in cloud by optimizing for the red stack there's little question in our view when it comes to mission critical we think gartner's analysis is correct however there's this other really exciting landscape emerging in cloud data and we don't want it to be a blind spot snowflake calls it the data cloud jamactagani calls it data mesh others are using the term data fabric databricks calls it data lake house so so does oracle by the way and look the terminology is going to evolve and most of the action action that's happening is in the cloud quite frankly and this chart shows a select group of database and data warehouse companies and we've filtered the data for aws azure and gcp customers accounts so how are these accounts or companies that were showing how these vendors were showing doing in aws azure and gcp accounts and to make the cut you had to have a minimum of 50 mentions in the etr survey so unfortunately data bricks didn't make it just not enough presence in the data set quite quite yet but just to give you a sense snowflake is represented in this cut with 131 accounts aws 240 google 108 microsoft 407 huge [ __ ] 117 cloudera 52 just made the cut ibm 92 and oracle 208. again these are shared accounts filtered by customers running aws azure or gcp the chart shows a net score lime green is new ads forest green is spending more gray is flat spending the pink is spending less and the bright red is defection again you subtract the red from the green and you get net score and you can see that snowflake as we reported last week is tops in the data set with a net score in the 80s and virtually no red and even by the way single digit flat spend aws google and microsoft are all prominent in the data set as is [ __ ] and snowflake as i just mentioned and they're all elevated over the 40 mark cloudera yeah what can we say once they were a high flyer they're really not in the news anymore with anything compelling other than they just you know took the company private so maybe they can re-emerge at some point with a stronger story i hope so because as you can see they actually have some new additions and spending momentum in the green just a lot of customers holding steady and a bit too much red but they're in the positive territory at least with uh plus 17 percent unlike ibm and oracle and this is the flip side of the coin ibm they're knee-deep really chest deep in the middle of a major transformation we've said before arvind krishna's strategy and vision is at least achievable prune the portfolio i.e spin out kindrel sell watson health hold serve with the mainframe and deal with those product cycles shift the mix to software and use red hat to win the day in hybrid red hat is working for ibm's growing well into the double digits unfortunately it's not showing up in this chart with little database momentum in aws azure and gcp accounts zero new ads not enough acceleration and spending a big gray middle in nearly a quarter of the base in the red ibm's data and ai business only grew three percent this last quarter and the word database wasn't even mentioned once on ibm's earnings call this has to be a concern as you can see how important database is to aws microsoft google and the momentum it's giving companies like snowflake and [ __ ] and others which brings us to oracle with a net score of minus 12. so how do you square the momentum in oracle cloud spending and the strong ratings and databases from gartner with this picture good question and i would say the following first look at the profile people aren't adding oracle new a large portion of the base 25 is reducing spend by 6 or worse and there's a decent percentage of the base migrating off oracle with a big fat middle that's flat and this accounts for the poor net score overall but what etr doesn't track is how much is being spent rather it's an account based model and oracle is heavily weighted toward big spenders running mission critical applications and databases oracle's non-gaap operating margins are comparable to ibm's gross margins on a percentage basis so a very profitable company with a big license and maintenance in stall basin oracle has focused its r d investments into cloud erp database automation they've got vertical sas and they've got this integrated hardware and software story and this drives differentiation for the company but as you can see in this chart it has a legacy install base that is constantly trying to minimize its license costs okay here's a little bit of different view on the same data we expand the picture with the two dimensions of net score on the y-axis and market share or pervasiveness on the horizontal axis and the table insert is how the data gets plotted y and x respectively not much to add here other than to say the picture continues to look strong for those companies above the 40 line that are focused and their focus and have figured out a clear cloud strategy and aren't necessarily dealing with a big install base the exception of course is is microsoft and the ones below the line definitely have parts of their portfolio which have solid momentum but they're fighting the inertia of a large install base that moves very slowly again microsoft had the advantage of really azure and migrating those customers very quickly okay so let's wrap it up starting with the big three cloud players aws is accelerating and innovating great example is custom silicon with nitro and graviton and other chips that will help the company address concerns related to the race to the bottom it's not a race to zero aws we believe will let its developers go after the sas business and for the most part aws will offer solutions that address large vertical markets think call centers the edge remains a wild card for aws and all the cloud players really aws believes that in the fullness of time all workloads will run in the public cloud now it's hard for us to imagine the tesla autonomous vehicles running in the public cloud but maybe aws will redefine what it means by its cloud microsoft well they're everywhere and they're expanding further now into gaming and the metaverse when he became ceo in 2014 many people said that satya should ditch xbox just as an aside the joke among many oracle employees at the time was that safra katz would buy her kids and her nieces and her nephews and her kids friends everybody xbox game consoles for the holidays because microsoft lost money for everyone that they shipped well nadella has stuck with it and he sees an opportunity to expand through online gaming communities one of his first deals as ceo was minecraft now the acquisition of activision will make microsoft the world's number three gaming company by revenue behind only 10 cent and sony all this will be powered by azure and drive more compute storage ai and tooling now google for its part is battling to stay relevant in the conversation luckily it can afford the massive losses it endures in cloud because the company's advertising business is so profitable don't expect as many have speculated that google is going to bail on cloud that would be a huge mistake as the market is more than large enough for three players which brings us to the rest of the pack cloud ecosystems generally and aws specifically are exploding the idea of super cloud that is a layer of value that spans multiple clouds hides the underlying complexity and brings new value that the cloud players aren't delivering that's starting to bubble to the top and legacy players are staying close to their customers and fighting to keep them spending and it's working dell hpe cisco and smaller predominantly on-plan prem players like pure storage they continue to do pretty well they're just not as sexy as the big cloud players the real interesting activity it's really happening in the ecosystem of companies and firms within industries that are transforming to create their own digital businesses virtually all of them are running a portion of their offerings on the public cloud but often connecting to on-premises workloads and data think goldman sachs making that work and creating a great experience across all environments is a big opportunity and we're seeing it form right before our eyes don't miss it okay that's it for now thanks to my colleague stephanie chan who helped research this week's topics remember these episodes are all available as podcasts wherever you listen just search breaking analysis podcast check out etr's website at etr dot ai and also we publish a full report every week on wikibon.com and siliconangle.com you can get in touch with me email me at david.velante siliconangle.com you can dm me at divalante or comment on my linkedin post this is dave vellante for the cube insights powered by etr have a great week stay safe be well and we'll see you next time [Music] you

>>Good morning from Los Angeles, Lisa Martin here at Qube con cloud native con north America, 2021. This is the cubes third day, a wall-to-wall coverage. So great to be back at an event in person I'm excited to be joined by Vince Wang, senior director of products at 49. We're going to talk security and Kubernetes then welcome to the program. >>Thank you for having me. >>So I always love talking to 40 minutes. Cybersecurity is something that is such an impersonal interest of mine. The fording that talks about the importance of integrating security and compliance and the dev sec ops workflow across the container life cycle. Why is this important and how do you help companies achieve it? >>Well, as companies are making digital innovations, they're trying to move faster and as to move faster, or many companies are shifting towards a cloud native approach, uh, rapid integrations, rapid development, and rapid deployment, uh, but sometimes speed, you know, there's a benefit to that, but there's also the downside of that, where, you know, you can lose track of issues and you can, uh, introduce a human error in a problem. So as part of the, as part of the, the, the means to deliver fast while maintaining his six year approach, where both the company and the organizations delivering it and their end customers, it's important to integrate security throughout the entire life cycle. From the moment you start planning and development, and people's in process to when you're developing it and then deploying and running in production, um, the entire process needs to be secured, monitored, and, um, and vetted regularly with good quality, um, processes, deep visibility, and an integrated approach to the problem. Um, and I think the other thing to also consider is in this day and age with the current situation with COVID, there's a lot of, uh, development of employment in terms of what I call NASA dental Baltic cloud, where you're deploying applications in random places, in places that are unplanned because you need speed and that, uh, diversity of infrastructure and diversity of, uh, of clouds and development and things to consider then, uh, produces a lot of, uh, you know, uh, opportunities for security and, and challenges to come about. >>And we've seen so much change from a security perspective, um, the threat landscape over the last 18 months. So it's absolutely critical that the integration happens shifting left. Talk to us about now let's switch topics. Application teams are adopting CIC D uh, CICB workflows. Why does security need to be at the center of that adoption? >>Well, it goes back to my earlier point where when you're moving fast, your organizations are doing, um, you're building, deploying, running continuously and monitoring, and then improving, right? So the idea is you're, you're creating smaller, incremental changes, throwing it to the cloud, running it, adjusting it. So then you're, you're rapidly integrating and you're rapidly developing and delivery. And again, it comes down to that, that rapid nature, uh, things can happen. There's, there's more, uh, more points of touching and there's more points of interactions. And, you know, and again, when you're moving that fast, it's really easy to, um, miss things along the way. So as you have security as a core fundamental element of that DNA, as you're building it, uh, that that's in parallel with everything you're doing, you just make sure that, um, when you do deliver something that is the most secure application possible, you're not exposing your customers or your organizations to unforeseen risks that just kind of sits there. >>Uh, and I think part of that is if you think about cloud infrastructure, misconfiguration is still number one, uh, biggest problem with, uh, with security on the, in the cloud space, there's, uh, tasks and vulnerabilities those, we all know, and there's there's means to control that, but the configurations, when you're storing the data, the registries, all these different considerations that go into a cloud environment, those are the things that organizations need visibility on. And, um, the ability to, to adopt their processes, to be proactive in those things and know what they, uh, do. They just need to know what, what then, where are they're operating in, um, to kind of make these informed decisions. >>That visibility is key. When you're talking with customers in any industry, what are the top three, let's say recommendations to say, here's how you can reduce your exposure to security vulnerabilities in the CIS CD pipeline. What are some of the things that you recommend there to reduce the risk? >>There's a couple, oh, obviously security as a fundamental practice. We've been talking about that. So that's number one, key number. The second thing that I would say would be, uh, when you're adopting solutions, you need to consider the fact that there is a very much of a heterogeneous environment in today's, uh, ecosystem, lots of different clouds, lots of different tools. So integration is key. The ability to, um, have choices of deployment, uh, in terms of where you wanted to play. You don't want to deploy based upon the technology limitations. You want to deploy and operate your business to meet your business needs and having the right of integrations and toolings to, uh, have that flexibility. Now, option is key. And I think the third thing is once you have security, the choices, then you can treat, you create a situation where there's a lot of, uh, you know, process overhead and operational overhead, and you need a platform, a singular cybersecurity platform to kind of bring it all in that can work across multiple technologies and environments, and still be able to control at the visibility and consolidate, uh, policies and nationally consistent across all closet points. >>So we're to the DevOps folks, what are some of the key considerations that they need to take into >>Account to ensure that their container strategy isn't compromising security? Well, I think it comes down to having to think outside of just dev ops, right? You have to, we talk about CIC D you have to think beyond just the build process beyond just where things live. You have to think continuous life cycles and using a cyber security platform that brings it together, such as we have the Fortinet security fabric that does that tying a lot of different integration solutions. We work well within their core, but theirs have the ability to integrate well into various environments that provide that consistent policies. And I think that's the other thing is it's not just about integration. It's about creating that consistency across class. And the reality is also for, I think today's dev ops, many organizations are in transition it's, you know, as, as much as we all think and want to kind of get to that cloud native point in time, the reality is there's a lot of legacy things. >>And so dev ops set ups, the DevSecOps, all these different kind of operational functions need to consider the fact that everything is in transition. There are legacy applications, they are new cloud native top first type of application delivery is using containers of various technologies. And there needs to be a, again, that singular tool, the ability to tie this all together as a single pane of glass, to be able to then navigate emerge between legacy deployments and applications with the new way of doing things and the future of doing things with cloud native, uh, and it comes down again to, to something like the Fortinet security fabric, where we're tying things together, having solutions that can deploy on any cloud, securing any application on any cloud while bringing together that consistency, that visibility and the single point management, um, and to kind of lower that operational overhead and introduce security as part of the entire life cycle. >>Do you have a Vincent example of a customer that 49 has worked with that has done this, that you think really shows the value of what you're able to enable them to achieve? >>We do. We do. We have lots of customers, so can name any one specific customer for various reasons, you know, it's security after all. Um, but the, the most common use cases when customers look at it, that when you, we talked to a CIO, CSO CTO is I think that's a one enter they ask us is, well, how do we, how do we manage in this day and age making these cloud migrations? Everyone? I think the biggest challenge is everyone is in a different point in time in their cloud journey. Um, there's if you talk to a handful of customers or a rueful customers, you're not going to find one single organization that's going to be at the same point in time that matches them yet another person, another organization, in terms of how they're going about their cloud strategies, where they're deploying it at what stage of evolution there are in their organizational transformations. >>Um, and so what they're looking for is that, that that's the ability to deploy and security any application on any topic throughout their entire application life cycle. Um, and so, so the most common things that, that our customers are looking for, um, and, you know, they're doing is they're looking to secure things on the network and then interconnected to the cloud with, uh, to deliver that superior, uh, application experience. So they were deploying something like the security fabric. Uh, again, you know, Fordanet has a cybersecurity approach to that point and securing the native environments. They're looking at dev ops, they're deploying tooling to provide, uh, you know, security posture management, plus a few posture management to look at the things that are doing that, the registries, their environment, the dev environment, to then securing their cloud, uh, networks, uh, like what we do with our FortiGate solutions, where we're deploying things from the dev ops. >>I feel secure in the cloud environment with our FortiGate environments across all the various multitudes of cloud providers, uh, like, uh, AWS Azure, Google cloud, and that time that together with, with some secure, um, interconnections with SD LAN, and then tying that into the liver and productions, um, on the web application side. So it's a very much a continuous life cycle, and we're looking at various things. And again, the other example we have is because of the different places in different, uh, in terms of Tod journeys, that the number one key is the ability to then have that flexibility deployment to integrate well into existing infrastructure and build a roadmap out for, uh, cloud as they evolve. Because when you talk to customers today, um, they're not gonna know where they're going to be tomorrow. They know they need to get there. Uh, they're not sure how they're going to get there. And so what they're doing now is they're getting to cloud as quickly as they can. And then they're looking for flexibility to then kind of adjust and they need a partner like Fordanet to kind of bring that partnership and advisorship to, uh, to those organizations as they make their, their, their strategies clearer and, uh, adjust to new business demands. >>Yeah. That partnership is key there. So afforded it advocates, the importance of taking a platform approach to the application life cycle. Talk to me about what that means, and then give me like the top three considerations that customers need to be considering for this approach. >>Sure. Number one is how flexible is that deployment in terms of, do you, do customers have the option to secure and deploy any application, any cloud, do they have the flexibility of, um, integrating security into their existing toolings and then, uh, changing that out as they need, and then having a partner and a customer solution that kind of grows with that? I think that's the number one. Number two is how well are these, uh, integrations or these flexible options tied together? Um, like what we do with the security fabric, where everything kind of starts with, uh, the idea of a central management console that's, you know, uh, and consistent policies and security, um, from the get-go. And I think the third is, is looking at making sure that the, the, the security integrations, the secure intelligence is done in real time, uh, with a quality source of information, uh, and, and points of, uh, of responsiveness, um, what we do with four guard labs. >>For example, we have swell of large, um, machine learning infrastructure where have supported by all the various customer inputs and great intelligence organizations, but real time intelligence and percussion as part of that deployment life cycle. Again, this kind of really brings it all together, where organizations looking for application security and, and trying to develop in a CSED fashion. And you have the ability to then have security from the get, go hide ident to the existing toolings for flexibility, visibility, and then benefits from security all along the way with real time, you know, uh, you know, leading edge security, that then kind of brings that, that sense of confidence and reassurance as they're developing, they don't need to worry about security. Security should just be part of that. And they just need to worry about solving the customer problems and, uh, and, you know, delivering business outcomes and results. >>That's it, right? It's all about those business outcomes, but delivering that competence is key. Vince, thank you for joining me on the program today, talking through what 49 is doing, how you're helping customers to integrate security and compliance into the dev dev sec ops workflow. We appreciate your insights. >>Thank you so much for your time. I really appreciate it. My >>Pleasure for vents Wang. I'm Lisa Martin. You're watching the cube live from Los Angeles, uh, cube con and cloud native con 21 stick around at Dave Nicholson will join me next with my next guest.

from the cube studios in palo alto in boston bringing you data-driven insights from the cube and etr this is breaking analysis with dave vellante despite all the chatter about cloud repatriation and the exorbitant cost of cloud computing customer spending momentum continues to accelerate in the post-isolation economy if the pandemic was good for the cloud it seems that the benefits of cloud migration remain lasting in the late stages of covid and beyond and we believe this stickiness is going to continue for quite some time we expect i asked revenue for the big four hyperscalers to surpass 115 billion dollars in 2021 moreover the strength of aws specifically as well as microsoft azure remain notable such large organizations showing elevated spending momentum as shown in the etr survey results is perhaps unprecedented in the technology sector hello everyone and welcome to this week's wikibon cube insights powered by etr in this breaking analysis we'll share some some fresh july survey data that indicates accelerating momentum for the largest cloud computing firms importantly not only is the momentum broad-based but it's also notable in key strategic sectors namely ai and database there seems to be no stopping the cloud momentum there's certainly plenty of buzz about the cloud tax so-called cloud tax but other than wildly assumptive valuation models and some pockets of anecdotal evidence you don't really see the supposed backlash impacting cloud momentum our forecast calls for the big four hyperscalers aws azure alibaba and gcp to surpass 115 billion as we said in is revenue this year the latest etr survey results show that aws lambda has retaken the lead among all major cloud services tracked in the data set as measured in spending momentum this is the service with the most elevated scores azure overall azure functions vmware cloud on aws and aws overall also demonstrate very highly elevated performance all above that of gcp now impressively aws momentum in the all-important fortune 500 where it has always showed strength is also accelerating one concern in the most recent survey data is that the on-prem clouds and so-called hybrid platforms which we had previously reported as showing an upward spending trajectory seem to have cooled off a bit but the data is mixed and it's a little bit too early to draw firm conclusions nonetheless while hyperscalers are holding steady the spending data appears to be somewhat tepid for the on-prem players you know particularly for their cloud we'll study that further after etr drops its full results on july 23rd now turning our attention back to aws the aws cloud is showing strength across its entire portfolio and we're going to show you that shortly in particular we see notable strength relative to others in analytics ai and the all-important database category aurora and redshift are particularly strong but several other aws database services are showing elevated spending velocity which we'll quantify in a moment all that said snowflake continues to lead all database suppliers in spending momentum by a wide margin which again will quantify in this episode but before we dig into the survey let's take a look at our latest projections for the big four hyperscalers in is as you know we track quarterly revenues for the hyperscalers remember aws and alibaba ias data is pretty clean and reported in their respective earnings reports azure and gcp we have to extrapolate and strip out all a lot of the the apps and other certain revenue to make an apples-to-apples comparison with aws and alibaba and as you can see we have the 2021 market exceeding 115 billion dollars worldwide that's a torrid 35 growth rate on top of 41 in 2020 relative to 2019. aggressive yes but the data continues to point us in this direction until we see some clearer headwinds for the cloud players this is the call we're making aws is perhaps losing a sharepoint or so but it's also is so large that its annual incremental revenue is comparable to alibaba's and google's respective cloud business in total is business in total the big three u.s cloud companies all report at the end of july while alibaba is mid mid-august so we'll update these figures at that time okay let's move on and dig into the survey data we don't have the data yet on alibaba and we're limited as to what we can share until etr drops its research update on on the 23rd but here's a look at the net score timeline in the fortune 500 specifically so we filter the fortune 500 for cloud computing you got azure and the yellow aws and the black and gcp in blue so two points here stand out first is that aws and microsoft are converging and remember the customers who respond to the survey they probably include a fair amount of application software spending in their cloud answers so it favors microsoft in that respect and gcp second point is showing notable deceleration relative to the two leaders and the green call out is because this cut is from an aws point of view so in other words gcp declines are a positive for aws so that's how it should be interpreted now let's take a moment to better understand the idea of net score this is one of the fundamental metrics of the etr methodology here's the data for aws so we use that as a as a reference point net score is calculated by asking customers if they're adding a platform new that's the lime green bar that you see here in the current survey they're asking are you spending six percent or more in the second half relative to the first half of the year that's the forest green they're also asking is spending flat that's the gray or are you spending less that's the pink or are you replacing the platform i.e repatriating so not much spending going on in replacements now in fairness one percent of aws is half a billion dollars so i can see where some folks would get excited about that but in the grand scheme of things it's a sliver so again we don't see repatriation in the numbers okay back to net score subtract the reds from the greens and you get net score which in the case of aws is 61 now just for reference my personal subjective elevated net score level is 40 so anything above that is really impressive based on my experience and to have a company of this size be so elevated is meaningful same for microsoft by the way which is consistently well above the 50 mark in net score in the etr surveys so that's you can think about it that's even more impressive perhaps than aws because it's triple the revenue okay let's stay with aws and take a look at the portfolio and the strength across the board this chart shows net score for the past three surveys serverless is on fire by the way not just aws but azure and gcp functions as well but look at the aws portfolio every category is well above the 40 percent elevated red line the only exception is chime and even chime is showing an uptick and chime is meh if you've ever used chime every other category is well above 50 percent next net score very very strong for aws now as we've frequently reported ai is one of the four biggest focus areas from a spending standpoint along with cloud containers and rpa so it stands to reason that the company with the best ai and ml and the greatest momentum in that space has an advantage because ai is being embedded into apps data processes machines everywhere this chart compares the ai players on two dimensions net score on the vertical axis and market share or presence in the data set on the horizontal axis for companies with more than 15 citations in the survey aws has the highest net score and what's notable is the presence on the horizontal axis databricks is a company where high on also shows elevated scores above both google and microsoft who are showing strength in their own right and then you can see data iq data robot anaconda and salesforce with einstein all above that 40 percent mark and then below you can see the position of sap with leonardo ibm watson and oracle which is well below the 40 line all right let's look at at the all-important database category for a moment and we'll first take a look at the aws database portfolio this chart shows the database services in aws's arsenal and breaks down the net score components with the total net score superimposed on top of the bars point one is aurora is highly elevated with a net score above 70 percent that's due to heavy new adoptions redshift is also very strong as are virtually all aws database offerings with the exception of neptune which is the graph database rds dynamodb elastic document db time stream and quantum ledger database all show momentum above that all important 40 line so while a lot of people criticize the fragmentation of the aws data portfolio and their right tool for the right job approach the spending spending metrics tell a story and that that the strategy is working now let's take a look at the microsoft database portfolio there's a story here similar similar to that of aws azure sql and cosmos db microsoft's nosql distributed database are both very highly elevated as are azure database for mysql and mariadb azure cash for redis and azure for cassandra also microsoft is giving look at microsoft's giving customers a lot of options which is kind of interesting you know we've often said that oracle's strategy because we think about oracle they're building the oracle database cloud we've said oracle strategy should be to not just be the cloud for oracle databases but be the cloud for all databases i mean oracle's got a lot of specialty capability there but it looks like microsoft is beating oracle to that punch not that oracle is necessarily going there but we think it should to expand the appeal of its cloud okay last data chart that we'll show and then and then this one looks at database disruption the chart shows how the cloud database companies are doing in ibm oracle teradata in cloudera accounts the bars show the net score granularity as we described earlier and the etr callouts are interesting so first remember this is an aws this is in an aws context so with 47 responses etr rightly indicates that aws is very well positioned in these accounts with the 68 net score but look at snowflake it has an 81 percent net score which is just incredible and you can see google database is also very strong and the high 50 percent range while microsoft even though it's above the 40 percent mark is noticeably lower than the others as is mongodb with presumably atlas which is surprisingly low frankly but back to snowflake so the etr callout stresses that snowflake doesn't have a strong as strong a presence in the legacy database vendor accounts yet now i'm not sure i would put cloudair in the legacy database category but okay whatever cloudera they're positioning cdp is a hybrid platform as are all the on-prem players with their respective products and platforms but it's going to be interesting to see because snowflake has flat out said it's not straddling the cloud and on-prem rather it's all in on cloud but there is a big opportunity to connect on-prem to the cloud and across clouds which snowflake is pursuing that that ladder the cross-cloud the multi-cloud and snowflake is betting on incremental use cases that involve data sharing and federated governance while traditional players they're protecting their turf at the same time trying to compete in cloud native and of course across cloud i think there's room for both but clearly as we've shown cloud has the spending velocity and a tailwind at its back and aws along with microsoft seem to be getting stronger especially in the all-important categories related to machine intelligence ai and database now to be an essential infrastructure technology player in the data era it would seem obvious that you have to have database and or data management intellectual property in your portfolio or you're going to be less valuable to customers and investors okay we're going to leave it there for today remember these episodes they're all available as podcasts wherever you listen all you do is search breaking analysis podcast and please subscribe to the series check out etr's website at etr dot plus plus etr plus we also publish a full report every week on wikibon.com and siliconangle.com you can get in touch with me david.velante at siliconangle.com you can dm me at d vallante or you can hit hit me up on our linkedin post this is dave vellante for the cube insights powered by etr have a great week stay safe be well and we'll see you next time you

>>from around the globe. It's the Cube with digital coverage of VM World 2020 brought to you by VM Ware and its ecosystem >>partners. Hello and welcome to the Cube. Special coverage of VM World 2020 Virtual I'm John for host of the Cube were stupid men Day volonte all doing interviews covering the virtual version of VM World. First time it's ever happened. We've been covering VM World for over 10 years, our 11th season with Cube at VM World. And of course, it's difference virtual. But we're doing our part. We're getting in the programs. We need to get the stories out and we got a great guest here. Submit to on who's the chief customer officer of the M where, uh, back to VM, where he ran the end user computing of which we covered air. Watch a lot of great announcements Submit. Great to see you. Thanks for coming on to the Q. Virtual >>John. Great to see you again. And great to be back on the Cube. >>So great to see you. And again I know you. You came in your back into the wheelhouse of VM ware. But as the theme of this show is putting the digital foundation for an unpredictable world. Also, with Covidien going virtual makes a lot of sense. However, VM Ware has been doing extremely well on the business performance side and making all the right tech moves we've been covering them to Cuba is well documented, the business models evolving. The performance is there. You are in a new role for VM, where its newly created chief customer officer tell us why you're back. Why this role? Why is it important? >>Yeah, great question, John. You know, I I joined the anywhere because we end where I look at sort of what bm where is trying to do all aligned with what customers want If you think about customers, they have been up until now, dabbling with cloud building sort of strategies on how to embrace Cloud, which applications will go to which parts off the cloud. And it has been something that has been more off slow RL strategy and with the multi cloud transition plan. Now, VM Ware provides to some extent this, you know, started out with operating system for the hardware, and it has evolved to provide operating system for the cloud it truly runs applications across multiple clouds. And with our partnerships with AWS Azure, Microsoft Google, we're able to sort of give our customers this multi cloud platform for them to run any application, whether that's traditional or modern, in a sort of unified operational fashion. Now this is a different subscription world for customers, right and customers in the world of cloud, especially when they're going into this kind of a transformational journey. Um, you know, it requires we anywhere to think slightly differently. It's not just the traditional cell implement support kind of customer model. You have really help them achieve their out, come over a period of time and then make them successful as they continue to sort of face the uncertainties off the multi cloud world. So So So Pat and Sanjay decided to create this new customer experience office and all different functions from success support digital engagement as well a czar insulting professional services. Tam's were put together so that we can offer integrated experiences to the customer. And that sounded exciting and, you know, we're making tons off interesting innovations there. Some announced that GM World and, uh, very much aligned with an objective to help our customers. >>E. I want to dig into the news and the announcement because I think there's a specific thing I'd like to drill into. But I want to get your thoughts submit because I think VM Ware and I thought to Sanjay about this as well as Pat. Clearly. Cooper Days is the dial tone of the Internet investment cloud Native Project. Monterey speaks to Multi cloud, totally get it. But Cove it has accelerated not only VM where every company, whether they're on the delivery side of it selling side or even consuming of the technology cloud, for instance, has forced the digital transformation. And it's catching some people off guard, right? So what are your thoughts? Because, you know, you have a value projects, you sell it to customers, you implement it, you support it. I mean, that >>was a >>nice grew swing for enterprise vendors like VM Ware. But now, with cove, it and all the digital transformation acceleration, it's causing a lot of people to be ready faster. How >>do you get >>that readiness? What do you bring to the table? What's your view on this? What's your reaction? Because people >>try to >>figure this out. It's confusing. >>I mean, I You know what it's it's very interesting. For example, I will give you an example. There's like, two extremes, and both of them are dealing with a very similar situation, all caused because of prove it. Okay, On one end of the spectrum, there are customers who are saying, Listen, our business is doing extremely well because of digital, and all of a sudden, uh, business needs this rapid agility, which can only be achieved through modern applications, and they're able to sort of move these applications because of elasticity of the cloud and leveraging multiple clouds. To do so is extremely important. If you're on one side of the spectrum on your business, where the business is doing extremely well, you have a percentage of the business that was coming from e commerce. All of a sudden that e commerce has accelerated. You know you can think off certain retailers, you know. Large scale retailers in that segment, and their their multi cloud journeys are accelerated, mostly because off just this surge in demand and change in capabilities that are needed to perform digital engagement with customers at a much much rapid pace, which are very difficult to do without leveraging multiple clouds. That's one extreme. The other extreme is, you know, I'll give you an example from large scale airlines and we all know in the travel hospitality airline business, this is extremely slow business for them, right at this point of time, and they're using the opportunity off this sort of time when things are slower to say, Okay, why don't we take this opportunity to fundamentally change our distilling it and truly embraced multi cloud while doing so? Because there is an opportunity to do so. The workload on the application than the infrastructure does not high little more technology reasons. A little bit more sort of a for downtime reason sort of go through the transformation faster. In other words, both ends of the spectrum. I'm seeing customers move the words sort of this destination fast it. And guess what? There is really no one at this stage outside of VM ware who can help them achieve that because otherwise you set a single voice. You know, there are their players who died. You tow their singular cloud solution and running. You know what I what I tell customers is multi cloud doesn't mean you are running two different architectures on two different clouds, right? That's not multi cloud. Multi cloud means running a singular architectures on multiple clouds, because that's when you get through governance and true operational scale and true experience and elasticity and control. And that's what we, um, where is all about? So we are now engaged with those conversations and helping customers at both the front end right when they're engaged with us at this stage. But we have also down tailored our service delivery and our success off offerings and are how we engage with customers digitally and sort of technically and through people. Uh, in once they start their journey with us, Um, and they sort of embark on leveraging the technology into multi cloud I want. So So that's the sort of shift that has occurred. >>Yeah, I want to unpack the offering in a second, but I want to stay in the customer experience for a minute. We've heard that cliche a customer experience. So digital transmission. Okay, it's actually happening now, and I totally agree with you, by the way there's there's the modernization trend. You just basically spoke to the spectrums. But it's about modernization. Okay, if you think modernization, you think business model business model is Hey, it's pretty light right now. I'm not a lot of people traveling. Let's retool, Let's modernize, Let's use our resource is and modernize our business, which is a lot of applications. It's everything up and down the stack. And then the companies that have a tailwind with Covic, who have had the epiphany and saying, If we don't building modern app or have modern APS in market, we're out of business. So there's a critical urgency to, uh, coming out of it with a growth strategy that's a business model transformation. Totally get that. That's where the customers are. So the question for you is okay. How do you talk to the customer that is saying, Hey, I'm building a modern app. We have to pivot, were forced to pivot whatever word you want to use force to survive. They're now they have to build a modern app. How do you guys support that customer? How does that customer? What does that customer need to be successful? >>Yeah, I mean, I think it starts with an architectural approach right. We bring to the customers and architectural approach across multiple clouds that helped them when they go for their existing applications or new modern applications conforming toe, one operating model and one architectures. Because in this in this time, you know, customers have many critical line of business applications. This airline customer I was talking about, they have 600 applications that are quite critical. They sort of segment them out on which one they will truly modernize because of the business model modernization like you mentioned and which ones they will live with, the way they are for multiple reasons and how it starts with connecting them with a unified architect chair and a unified operating model is how we start with customers. Okay. And that is where the power off the younger comes in. Because, like I said, it becomes this architectural operating system for for the customers to run and adopt multiple clouds. >>You gotta be the chief customer officer. You're the quarterback. You're the one in charge of making sure customers were happy. Okay? And they get what they need. And again, there's different aspects of it. What do you guys announcing it? VM World 2020 virtual, um, that people should pay attention thio around servicing customers in this new subscription and SAS world. >>Yeah, I think besides the technology announcements in terms off modern, sort off, multi cloud platform, the architectural with Project Monterey from the customer experience side, we did announcement to announcements. One was for customers embarking on a journey. We want to make sure that customers get everything they need to be successful on the journey on an ongoing basis. Some off these journeys for large customers, John can take not just sort of three months, but three years because they're dealing with various applications. So for that we announced two pretty simple and easy to embrace offerings. One is AP navigator. AP Navigator enables customers to quickly assess which applications I have to be, you know, on one end, you know, rewritten, completely rewritten and on the other end simply sort of re hosted. Okay, and there are multiple options in between, and we call them as a five, our model with customers, and we guide customers through our own assessment and working with customers on how to sort of segment their applications and use a common architectures across all of them that we can then help and it and secondly, toe help them with. We announced something called Success 3 60 Success 3 60 is Our Mechanism Toe guide and help customers on an ongoing basis for a success plan with continuous, sort off adoption guidance designed workshops as well as providing they're dedicated support that customers need for embracing multiple cloud across all the cloud. With this architectural this way, customers get assured that they're able to get the right up front sort of assessment on applications and ongoing success. Okay, And that's sort of what we announced within customer experience side. And we have been able all of this available two people you know there are critical for large scale engagements, but also digital, you know, just like our customers are innovating with digital. We innovated with our own digital environment, and we brought it all together with something called customer Connect, all available with one single digital experience that's mobile friendly, alert driven, search driven. You know, all the AI that's needed at this point of time in terms of engaging with customers with proactive notifications and guidance in terms of how they're doing with success built into a singular experience so that they can engage with us, and we can engage with them to make them successful. >>And so it's people in technology you guys are bringing to the table. What can customers expect? Because, you know, as they've worked with the M where you've always had great technical support outside its have been a technology driven company. Um, but as you start getting into SAS, you're starting to get into the business model transformation. How do you guys impacting the customers and how you go to market and how you, uh, service your customer base? >>Yeah, I think there are two elements What customers can expect one. They don't have to stand up and engagement and experience mortal completely separate for a small set of applications on a completely different you know, cloud architectures. They could just fit and build a single experience off dealing with the M, where, as a mechanism to enable all of their applications to be hosted, regardless of which cloud there in Uh huh Sandvik they do it at their own pace, right? As then when they're ready for applications. Secondly, and more importantly, for the business model transformation side. We have a model where we continue to show them the value realization. Okay, because these are true business model transformations. At this stage, there is lot off investment that's coming into I P while at the same time, the rest off the business is doing belt type. So there is a continuous pressure on Earth. Customers are I t. That is the champion for the customers, and they're working with developers in line of business teams, and they have to continue to show how what they're investing into as a singular platform or in architecture is going to deliver some kind of a value on an ongoing basis. So we have delivered on an ongoing basis rip boards and feed back and continuous sort of information back to the customers so that they can take back to their businesses on all the investments they're making now are ongoing basis what value the business is getting, because at the end of the day in this, this is probably the first time in the where I I t is probably getting the least belt tightening in the case off sort of an economic downturn, and in fact, it is being looked at as a way to invest out off the downturn. Right? So they're going to be, in a way where there sometimes even going into the boardroom and showing not just governance, but also sort of the investments they made, what kind of value they they got. So those are the two things were providing seamless and at at pace move toe multi cloud with a common experience and second, ongoing value realization that they can communicate whoever they need. Toe >>submit. You know, we've been following VM where for many me personally of persons that was founded. But with the Cube since 2010 star 11th year, You know, we've been critical of times and pointing out the obvious and in some cases, not so obvious successes and challenges. Um and so we've seen the completeness of vision evolved and pat, certainly. You know, he he held the line and he did the right things. And then he executed. So, you know, as you look at the emerald, we're now been complimentary on some of the moves. Certainly on the technology side that you guys have made and then we again we've talked about this many times on the Cube. So complete in this, uh, vision check. Okay, this is wholesome. Michael Dell issues, but gave talks about that. So good vision complete executed business performance is there. But as you talk about sass and subscription, your ability to execute is going to be a key variable and things like the Gartner Magic quadrant for the areas you're competing in. Multi cloud talk about how you guys just set up financially to support that personnel. What is your organization gonna do? Can you share your vision? How you going to be able to execute customers success programs as this uncertainty around multi cloud continues to become reality and things are changing. >>Yeah, I think a couple of things firstly, you know, to be absolutely candid, you know, the pace at which the customers are going to the new multi cloud models is faster now than it was nine months ago. We just discussed that. Okay, so I wouldn't I would be misrepresenting if I said we always were ready for this kind of the case. We're also adjusting and innovating at this stage as fast as possible. The good news is that we were headed in the right direction. Okay, if we were headed in the wrong direction, it would have been much, much harder. Okay. Secondly, I think there is a very strong leadership, the leadership team. I mean, at the end of the day, it's vision, leadership, team investment, the components and, of course, diligence to execute that comes in for the execution. To me vision and the direction was always very, very strong. It motivated me to join the anywhere for this important mission. Second and many other exact. If second the leadership team is as strong as they get, the four team is extremely strong. We have strong leadership team leadership from Pat Michael, of course, as well as Sanjay Rgu Rajiv. Everyone provides strong leadership and then third, you asked about sort of the financial element. You know, they're The company continues to perform quite well, right? We have core businesses that some critical for customers to use as technologies to enable them, you know, to come out off this sort off economic issue we're facing and they're facing. So as a result, you know, financially, we're in a good position to be able to invest back into the business and Secondly, we have made now we've always, always been extremely strong on the technology front. Okay, now with Sanjay and packed sort of saying that we're going to be extremely strong in terms of customer experience front because the world of subscription, the world of cloud, the world off the SAS requires not just great technology but also a great customer experience. So we're seeing tremendous in a continued sort of support financially in terms of investing into the customer experience, from both getting the right set of people offerings as well as technology. So I believe we have all three things. Having said that, you know, some of these things that we're investing in. They need a lot of work, and I'm. While I'm proud of what we have accomplished, I truly believe you know the best is yet to come, and the right investments that we're making are going to continue to sort of enhance our offerings both through people as well as technology. But there's work to be done. You >>know, it's all about, you know, having the consume ability of the technology thio, the value proposition of VM ware and also also is a company being um, open and easy to work with and consumable that way. So I think this is a great time. Certainly. Product wise. Business wise, You guys do extremely well. Congratulations on your new role on the senior leadership is the chief customer officer of VM Ware will be following the stories of your customers. So I really appreciate you taking the time. >>Thank you. Thank you so much, John. Excited to be back. Great >>to have you back on the queue here. VM world coverage of 2020 virtual. I'm John for this. The host of Cube Virtual. Check us out cube dot Net. And also our new cube 3 65 where it's our new modern application for virtual events. Of course, we want to continue to tell the most important stories and cover all the key people making it happen. Submit. Thank you for coming on. This is the Cube. Thanks for watching

from the cube studios in palo alto in boston bringing you data-driven insights from the cube and etr this is breaking analysis with dave vellante while cloud computing is generally seen as a bright spot in tech spending the sector is not immune from the effects of covid19 look it's better to be cloud than not cloud no question but recent survey data shows that the v-shaped recovery in the stock market looks much more like a square root sign for it spending in 2020 and even the cloud is going to be negatively impacted albeit much less so than many other sectors hello everyone and welcome to this week's wikibon cube insights powered by etr i'm dave vellante and in this breaking analysis we want to update you on our latest data and thinking around the cloud computing market with an emphasis on infrastructure as a service we'll also update our latest quarterly estimates of the big three show you our typical trailing 12-month view of revenue let's start with the macro picture the reality is that the latest etr survey of nearly 1200 respondents shows that the vast majority of companies is the covet is hitting i.t budgets notably 59 of respondents have frozen hiring that's up from 26 in the last survey which was taken in march and april at the height of the u.s lockdown 24 percent have laid off employees that's up from four percent 41 percent froze new i.t deployments that's nearly double the percentage from the last survey now on the plus side there are some shops 23 percent that are accelerating i t deployments and that's up significantly from last quarter now as we've reported that's coming from the work from home and coveted tailwind segments and cloud computing is obviously one of those but these spending shifts are not enough to offset the overall outlook for 2020 and likely that's going to continue into 2021. because the big cloud players especially aws and azure are so large they're exposed to industries that have been hard hit by the pandemic as such we see pockets of spending deceleration even at these companies now the other piece of data that has our attention is the hybrid and multi-cloud market it's beginning to show some spending momentum this is particularly notable within vmware and red hat accounts and we've even seen a bit of momentum for oracle that we'll talk about in a moment now before we dig into the numbers let's hear the sentiment from some of the customers what we're showing here are some of the verbatim comments from etr customers one of the things i love about this survey is it includes quantitative and qualitative data that i can sort by industry so i've just pulled up a few examples that underscore some of the broad-based pain that companies are facing education minimum 15 cut across the organization engine energy and utilities we cut projects 10 15 across the board financials we've been asked to cut 20 out of our budget government hiring freeze larger constraints on spending health care and farmer much more scrutiny from upper management industrials materials and manufacturing slowing down is not all projects can be done remotely i.t telco head count and projects on hold and pushed into 2021 retail consumer budget cuts we lost three months of cash flow services and consulting all discretionary projects are frozen now these comments predominantly come from large companies that are big spenders now in fairness there are plenty of positives in the anecdotes but i have to say in squinting through the hundreds and hundreds of comments this pretty much sums up the sentiment now this is especially true in the all-important u.s market where we heard in cisco's earnings call this week the theme is uncertainty related to the pandemic and this is hitting i.t budgets now cloud spending remains at elevated levels but there's definitely pressure what we're showing here is the net score for the big three cloud players microsoft amazon and google in the three surveys of 2020 net scores etr's measure of spending momentum in each quarter etr asks buyers are you spending more or less on a particular platform and net score essentially subtracts the lesses from the mores it's a bit more complicated that but but that is really the essence and you can see the deceleration in all three big cloud platforms now it's important to point out that these are at elevated levels and they represent strength but there's clear pressure and headwinds on spending even in the cloud no sector is immune now there are pockets like video conferencing and security that are winning but even in these sectors it's bifurcated it's often a story of a firm that is well positioned to gain share like say a zoom or we've talked a lot about an octa or a crowdstrike or z scale or a sail point that we've highlighted in previous breaking analysis segments now this slide shows data from the etr survey the pies compare the spring survey to the summer asking buyers will covert impact your i.t budgets in 2020. in the latest covent survey 78 say yes now that's up from 63 percent see the bar chart below that answers your next obvious question which is how will your budget be impacted and can you see the distribution of the growth yes there it is you could see the decline 22 percent say no change but the red bars that decline are much bigger than the green bars and that's why we continue to forecast i.t spending declines of five to eight percent in 2020. we think this is even going to spill into the first half of 2020 who knows we'll see if it goes beyond now let's put the cloud in context despite my dire outlook we have to remember that it's all relative this chart shows you know one of our favorite views it plots net score or spending momentum on the vertical axis against the market share on the horizontal axis market share is a measure of pervasiveness in the survey and calculates the penetration of the sector as a percent of the overall survey so what this view tells us is the degree of spending momentum on the vertical axis cloud is elevated relative to other sectors that we're showing here and it shows the penetration of cloud in the data set on the horizontal axis so cloud shows spending momentum and high penetration relative to other priorities in i.t note there are dozens of other sectors but we've cherry picked a few here for context to wit other than containers ai and rpa cloud is outpacing all sectors shown for the net score and only analytics bi and big data is more pervasive so cloud very strong no doubt cloud is the place to be but the pandemic has created spending friction even in cloud and what we showed earlier the decline of the the net scores for the big three now again we're still holding here at elevated levels what this chart shows is the sectors of infrastructure as a service that show increasing next net scores relative to the last survey and you can see there are only five areas that show positive increase in net score this is out of dozens and dozens reading the bars left to right you see vmware cloud on aws with a very impressive net score of 66 percent that's up 700 basis points since the last survey next you see red hat open shift with a 44 net score that's up 600 basis points and then vmware cloud which comprises vmware cloud foundation and other hybrid and multi-cloud services from vmware it shows a net score of 42 which is up 400 basis points now after that is red hat openstack yes openstack with a 40 net score up 1200 basis points since the last survey red hat sells and supports its openstack distro now prior to the ibm acquisition red hat would frequently cite openstack as a growth business on its earnings calls and this data confirms that there's actually some momentum there as an example red hat is selling into the telco sector to service providers that want to stand up a private cloud why well the big cloud players may not have a local presence and there may be a data sovereignty requirement in that country you know that's just one example and then finally on the chart we have oracle now for sure there's some sas in there and you know oracle's net score is really not inspiring at 12 percent but it's up from the last survey so these are the only five areas showing net score expansion from the last survey we're talk which talks to the impacts of covid that we discussed earlier now let's take a look at a more granular set of data that cloud services and how they stack up what we show here are the top ten cloud services measured by net score or spending momentum this is for the july survey of respondents the first point is these are solid net scores so while i'm a bit of a davey downer today these are very strong relative to most other parts of the technology stack most companies would kill to have this type of momentum you see azure functions and azure platform they lead the pack but look at vmware cloud on aws we've seen this popping up showing strong in recent surveys and it's gaining presence and momentum in the data set then there's aws lambda you know functions or serverless this remains strong as you can see it does google functions and there's aws that's the aws overall and even though it's a bit off in net score terms from previous quarters as we'll talk about in a moment this is a 40 billion dollar business with net scores that remain elevated remember the net scores they can't grow to the moon they're going to fluctuate and the larger the base the harder it is to maintain high net score so this is very very impressive for aws google cloud platform is next and you know frankly i'd like to see stronger net scores from google gcp is around an eighth of the size of aws yet aws still maintains a notably higher net score in each survey google continues to struggle with selling into the enterprise now look at the last three in the chart you know cloud purists like aws might say that these hybrid or multi-cloud services aren't in a real cloud you know but to me this is a customer survey if the customer says their cloud i'm gonna go with that now forgetting about the semantics here the point is we've been talking about hybrid and multi-cloud for a while and we see vmware and red hat with openshift two companies that we've predicted are in a strong position to compete for hybrid and multi and they're showing up on customers spending radar i should also mention that microsoft is also a leader if not the leader in hybrid multi-cloud because it has a massive public cloud presence and numerous relevant services particularly in the hybrid space but they don't show up necessarily as discrete services in the etr taxonomy but they are in the numbers for sure probably just peanut butter spread over a number of categories now let's put this into context here's our old friend the xy graph it's one of our favorites this time we show specific named vendors in cloud on the x and the y axis axis is net score or spending velocity and the x axis is market share or pervasiveness so as usual we see aws and azure separating from the pac this is such a huge market it's really not a winner takes all space you know maybe not even a winner takes most and as you can see in the players that we've highlighted in the hybrid multi-zone you got you know google's kind of on that bubble but any player here with a net score above 40 percent in the green as you can see in the upper right hand corner is doing well red hat vmware cloud google and and look at vmware cloud on aws this service is getting a lot of traction and it better given the effort that both companies have put behind this aws has created a special bare metal instance to run this service on its cloud vmware talks about aws as its preferred partner this has been a winner for both companies aws gets access to a half a million vmware customers and vmware gets a really solid cloud play look where this goes in the future it's going to be interesting to watch when this service was announced several years ago it didn't take long for aws to also announce its vmware migration services but for now it's a win-win for the companies and a win for the customers now for context we've included both oracle and ibm cloud services and you can see where they stand relative to the rest they're not setting the world on fire but hey as i've said many times they at least are in the cloud game and importantly both companies are in a good position to migrate their customers mission critical workloads to their own respective clouds all right i want to wrap by looking at the big three performance this quarter as has been our custom we like to share our estimates of how the big three u.s cloud players stack up from a revenue standpoint this chart shows our is and pas revenue estimates for aws azure and google cloud platform the data shows 2018 19 2019 growth and the first two quarters of 2020 with a trailing 12-month view and here are the key points now as always remember aws reports clean numbers the others we have to squint through 10ks and 10qs and triangulate with survey data to come up with the reasonable apples to apple's estimate in comparison first point aws is now 40 billion wow combined the big three now account for nearly 70 billion dollars in is and pass revenue you know that's more than a sizable chunk of the data center business which is not all this hasn't been necessarily incremental growth to the it market there's been a share shift going on in other words that share shift is going from on-prem into the cloud now the third point is growth is strong but not surprisingly the bigger you get the slower the growth rate rate in 2018 aws revenue was 2.7 times greater than that of microsoft for the first time however aws revenue has dropped below 2x that of microsoft said another way microsoft's is revenue is now about 57 of aws's revenue google's growth rate at its size appears to be lagging where aws and azure's growth was at earlier points in their respective journeys for example when aws put up nearly 8 billion in 2015 in revenue it grew over 70 percent that year azure as you can see at 16 billion in 2019 grew at 65 percent now google grew 72 last quarter and 59 this quarter so you know it's no slouch but it's size with its but it's at its size with its resources we'd like to see google pick up the pace and you may have to wait until post covid but despite the coveted headwinds in the overall it market there's no question that this is a cloud world and we just happen to live in it [Music]

>>from the Cube Studios in Palo Alto and Boston connecting with thought leaders all >>around the world. This is a cube conversation, Everyone. Welcome to this week's Cube insights, powered by ET are My name is Dave Volante, and we've been reporting every week really on the code. 19. Impact on Budgets Docker Korakia is back in with me soccer. It's great to see you really >>again for having >>your very welcome. Soccer is, of course, the director of research, that we are our data partner and man. I mean, you guys have just been digging into the data or a court reiterate We're down, you know, roughly around minus 5% for the year. The thing about what we're doing here and where they want to stress in the audience that that's going to change. The key point is we don't just do ah, placeholder and update you in December. Every time we get new information, we're going to convey it to you. So let's get right into it. What we want to do today is you kind of part two from the takeaways that we did last week. So let's start with the macro guys. If you bring up the first chart, take us through kind of the top three takeaways. And just to reiterate where we're at >>Yeah, no problem. And look, as you mentioned, uh, what we're doing right now is we're collecting the pulse of CIOs. And so things change on and we continue to expect them to change, you know, in the next few weeks, in the next few months, as things change with it. So just kind of give a recap of the survey and then kind of going through some of our top macro takeaways. So in March mid March, we launched our Technology Spending Intention Survey. We had 1250 CIOs approximately. Take that survey. They provided their updated 2020 verse 2019 spending intentions, right? So effectively, they first Davis, those 20 21st 19 spending intentions in January. And then they went ahead and up state of those based on what happened with move it and then in tandem with that, we did this kind of over 19 drill down survey where we asked CEOs to estimate the budget impact off overnight in versus what they originally forecast in the year. And so that leads us to our first take away here, where we essentially aggregated the data from all these CIOs in that Logan 19 drill down survey. And we saw a revision of 900 basis points so down to a decline of 5%. And so coming into the year, the consensus was about 4% growth. Ah, and now you can see we're down about 5% for the year. And again, that's subject to change. And we're going again re measure that a Z kind of get into June July and we have a couple of months under our belt with the folks at night. The second big take away here is, you know, the industries that are really indicating those declines and spend retail, consumer airlines, financials, telco I key services in consulting. Those are the verticals, as we mentioned last week, that we're really seeing some of the largest Pullbacks and spend from consumers and businesses. So it makes sense that they are revising their budgets downwards the most. And then finally, the last thing we captured that we spoke about last week as well as a few weeks before that, and I think that's really been playing out the last kind of week in 1/2 earnings is CIOs are continuing to press the pedal on digital transformation. Right? We saw that with Microsoft, with service now last night, right, those companies continued the post good numbers and you see good demand, what we're seeing and where those declines that we just mentioned earlier are coming from. It's it's the legacy that's the on premise that your place there's such a concentration of loss and deceleration within some of those companies. And we'll kind of get into that more a Z go through more slides. But that's really what kind of here, you know, that's really what we need to focus on is the declines are coming from very select vendors. >>Yeah, and of course you know where we were in earning season now, and we're paying close attention to that. A lot of people say I just ignore the earnings here, you know, you got the over 19 Mulligan, but But that's really not right. I mean, obviously you want to look at balance sheets, you want to look at cash flows, but also we're squinting through some of the data your point about I t services and insulting is interesting. I saw another research firm put out that you know, services and consulting was going to be OK. Our data does, you know, different. Uh, and we're watching. For instance, Jim Kavanaugh on IBM's earnings call was very specific about the metrics that they're watching. They're obviously very concerned about pricing and their ability. The book business. There we saw the cloud guys announced Google was up in the strong fifties. The estimate is DCP was even higher up in the 80% range. Azure, you know, we'll talk about this killing it. I mean, you guys have been all over of Microsoft and its presence, you know, high fifties aws solid at around 34% growth from a larger base. But as we've been reporting, you know, downturns. They've been they've been good to cloud. >>That's right. And I think, you know, based on the data that we've captured, um, you know, it's people are really pressing the pedal on cloud and SAS with this much remote work, you need to have you know, that structure in place to maintain productivity. >>Okay, let's bring up the next slide. Now. We've been reporting a lot on this sort of next generation work loads Bob one Dato all about storage and infrastructures of service. Compute. There's an obviously some database, but there's a new analytics workload emerging. Uh, and it's kind of replacing, or at least disinter mediating or disrupting the traditional e d ws. I've said for years. CDW is failed to live up to its expectations of 360 degree insights and real time data, and that's really what we're showing here is some of the traditional CDW guys are getting hit on Some of the emerging guys, um, are looking pretty good. So take us through what we're looking at here. Soccer. >>Yeah, no problem. So we're looking at the database data warehousing sector. What you're looking at here is replacement rates. Um And so, as example, if you see up in with roughly 20% replacement, what that means is one out of five people who took the survey for that particular sector for that vendor indicated that they were replacing, and so you can see here for their data. Cloudera, IBM, Oracle. They have very elevated and accelerating replacement rates. And so when we kind of think about this space. You can really see the bifurcation, right? Look how well positioned the Microsoft AWS is. Google Mongo, Snowflake, low replacements, right low, consistent replacements. And then, of course, on the left hand side of the screen, you're really seeing elevated, accelerating. And so this space is It kind of goes with that theme that we've been talking about that we covered last week by application, right when you think about the declines that you're seeing and spend again, it's very targeted for a lot of these kind of legacy legacy vendors. And we're again. We're seeing a lot of the next gen players that Microsoft AWS in your post very strong data. And so here, looking within database, it's very clear as to which vendors are well positioned for 2020 and which ones look like they're being ripped out and swapped out in the next few months. >>So this to me, is really interesting. So you know, you you've certainly reported on the impact that snowflake is having on Terra data. And in some of IBM's business, the old man, he's a business. You can see that here. You know, it's interesting. During the Hadoop days, Cloudera Horton works when they realize that it didn't really make money on Hadoop. They sort of getting the data management and data database and you're seeing that is under pressure. It's kind of interesting to me. Oracle, you know, is still not what we're seeing with terror data, right, Because they've got a stranglehold on the marketplace That's right, hanging in there. Right? But that snowflake would no replacements is very impressive. Mongo consistent performer. And in Google aws, Microsoft AWS supports with Red Shift. They did a one time license with Park Cell, which was an MPP database. They totally retooled a thing. And now they're sort of interestingly copycatting snowflake separating compute from storage and doing some other moves. And yet they're really strong partners. So interesting >>is going on and even, you know, red shift dynamodb all. They all look good. All these all these AWS products continue screen Very well. Ah, in the data warehousing space, So yeah, to your point, there's a clear divergence of which products CIOs want to use and which ones they no longer want in their stack. >>Yeah, the database market is very much now fragment that it used to be in an Oracle db two sequel server. As you mentioned, you got a lot of choices. The Amazon. I think I counted, you know, 10 data stores, maybe more. Dynamodb Aurora, Red shift on and on and on. So a really interesting space, a lot of activity in that new workload that I'm talking about taking, Ah, analytic databases, bringing data science, pooling into that space and really driving these real time insights that we've been reporting on. So that's that's quite an exciting space. Let's talk about this whole workflow. I t s m a service now. Just just announced, uh, we've been consistently crushing it. The Cube has been following them for many, many years, whether, you know, from the early days of Fred Luddy, Bruce Lukman, the short time John Donahoe. And now Bill McDermott is the CEO, but consistent performance since the AIPO. But what are we actually showing here? Saga? Yeah, You bring up that slot. Thank you. >>So our key take away on kind of the i t m m i t s m i t workflow spaces. Look, it's best in breed, which is service now, or some of the lower cost providers. Right There's really no room for middle of the pack, so >>this is an >>interesting charts. And so what you're looking at here, there's a few directives, so kind of walk you through it and then I'll walk through. The actual results is we're looking within service now accounts. And so we're seeing how these companies are doing within or among customers that are using service. Now, today, where you're looking at on the ex, access is essentially shared market share our shared customers, and then on the Y axis you're seeing essentially the spend velocity off those vendors within service. Now's outs, right? So if the vendor was doing well, you would see them moving up into the right, right? That means they're having more customer overlap with service now, and they're also accelerating Spend, but you can see if you will get zendesk. If you look at BMC, it's a managed right. You can see there either losing market share and spend within service now accounts or they're losing spend right and zendesk is another example Here, Um, and what's actually interesting is, and we've had a lot of anecdotal evidence from CIOs is that look they start with service. Now it's best in breed, but a few of them have said, Look, it's got expensive, Um, and so they would move over Rezendes. And then they would look at it versus a conference that last year, and we had a few CEO say, Look at last quarter of the price of zendesk. Andi moved away from Zendesk and subsequently well, with last year. And so it's just it's interesting that, you know, during these times where you know CIOs are reducing their budgets on that look, it's either best of breed or low cost. There's really no room in the middle, and so it's actually kind of interesting. In this space, it's It's an interesting dynamic and being usually it's best of breed or low cost. Rarely do you kind of see both win, and I think that's what kind of makes the space interesting. >>I've been following service now for a number of years. I just make a few comments there. First of all, you know, workday was the gold standard in enterprise software for the longest time and, you know, company and and and I I always considered service now to be kind of part of that you know Silicon Valley Mafia with Frank's Loop. But what's happened is, you know, Sluman did a masterful job of identifying the total available market and executing with demand, and now you know, his successors have picking it beyond there. You know, service now has a market cap that's not quite double, but I mean, I think workday last I checked was in the mid thirties. Service now is market valuation is up in the 60 billion range. I mean, they announced, um uh, just recently, very interestingly, they be expectations. They lowered their guidance relative to consensus guide, but I think the street hose, first of all, they beat their numbers and they've got that SAS model, that very predictable model. And I think people are saying, Look there, just leaving meat on the bone so they can continue to be because that's been their sort of m o these last several years. So you got to like their positioning and you get to talk to customers. They are pricey. You do hear complaints about that, and they've got a strong lock spec. But generally I got my experiences. If people can identify business value and clear productivity, they work through the lock in, you know, they'll just fight it out in the negotiations with procurement. >>That's right, and two things on that. So with service now and and even Salesforce, right, they are a platform like approach type of vendors right where you build on them. And that's what makes them such break companies, right? Even if they have, you know, little nicks and knacks here and there. When they report people see past that right, they understand their best of breed. You build your companies on the service now's and the sales forces of the world. And to the second point, you're exactly right. Businesses want to maintain consistent productivity on, and I think that, you know, is it kind of resonates with the theme, right, doubling down on Cloud and sas. Um, as as you have all this remote work, as you have kind of, you know, questionable are curating marquee a macro environment organizations want to make sure that their employees continue to execute that they're generating consistent productivity. And using these kind of best of breed tools is the way to go. >>It's interesting you mentioned, uh, salesforce and service now for years I've been saying they're on a collision course we haven't seen yet because they're both platforms. I still, uh I'm waiting for that to happen. Let's bring up the next card and let's get into networking way talk. Um Ah. Couple of weeks ago, about the whole shift from traditional Mpls moving to SD win. And this sort of really lays it out. Take us through the data here, please. >>Yeah, no problem. So we're just looking at a handful of vendors here. Really? We're looking at networking vendors that have the highest adoption rates within cloud accounts. And so what we did was we looked inside of aws azure GCC, right. We essentially isolated just those customers. And then we said which networking vendors are seeing the best spend data and the most adoptions within those cloud accounts. And so you get you can kind of see some, uh, some themes here, right? SD lan. Right. You can see Iraqi their VM. Where nsx. You see some next gen load balance saying are they're on the cdn side right then. And so you're seeing a theme here of more next gen players on You're not really seeing a lot of the mpls vendors here, right? They're the ones that have more flattening, decreasing and replacing data. And so the reason just kind of going on this slide is you know, when you kind of think about the networking space as a whole, this is where adoptions are going. This is this is where spends billing and expanded, arise it. And what we just talked about >>your networking such a fascinating space to me because you got you got the leader and Cisco That has helped 2/3 of the market for the longest time, despite competitors like Arista, Juniper and others trying to get in the Air Force and NSX. And the big Neisseria acquisition, you know, kind of potentially disrupted that. But you can see, you know, Cisco, they don't go down without a fight. And ah, there, let's take a look at the next card on Cdn. You know, this is interesting. Uh, you know, you think with all this activity around work from home and remote offices, there's a hot area, But what are we looking at here? >>Yeah, no problem. And that's right, right? You would think. And so we're looking at Cdn players here you would think with the uptake in traffic, you would see fantastic. That scores right for all the cdn vendor. So what you're looking at here and again there's a few lenses on here, so I kind of walk. You kind of walk the audience through here is first we isolated only those individuals that were accelerating their budgets due to work from home. Right. So we've had this conversation now for a few weeks where support employees working from home. You did see a decent number of organizations. I think it was 20 or 30% of organizations at the per server that indicated they're actually accelerate instead. So we're looking at those individuals. And then what we're doing is we're seeing how are how's Cloudflare and aka my performing within those accounts, right? And so we're looking at those specific customers and you could just see within Cloudflare and we practice and security and networking which by more the Cdn piece, How consistent elevated the date is right? This is spend in density, right? Not overall market share is obviously aka my you know, their brand father CD ends. They have the most market share and if you look at optimized to the right. Now you can see the spend velocity is not very good. It's actually negative across boats sector. So you know it's not. We're not saying that. Look, there's a changing of the guard that's occurring right now. We're still relatively small compared talk my But there's just such a start on trust here and again, it kind of goes to what we're talking about. Our macro themes, right? CIOs are continuing to invest in next gen Technologies, and better technologies on that is having an impact on some of these legacy. And, you know, grandfather providers. >>Well, I mean, I think as we enter this again, I've said a number of times. It's ironic overhead coming into a new decade. And you're seeing this throughout the I T. Stack, where you've got a lot of disruptors and you've got companies with large install bases, lot of on Prem or a lot of historical legacy. Yeah, and it's very hard for them to show growth. They often times squeeze R and D because they gotta serve Wall Street. And this is the kind of dilemma they're in, and the only good news with a comma here is there is less bad security go from negative 20% to a negative 8% net score. Um, but wow, what a what a contrast, but to your point, much, much smaller base, but still very relevant. We've seen this movie before. Let's let's wrap with another area that we've talked about. What is virtualization? Desktop virtualization? Beady eye again. A beneficiary of the work from home pivot. Um, And we're focused here, right on Fortune 500 net scores. But give us the low down on this start. >>Yeah, So this is something that look, I think it's it's pretty obvious to into the market you're seeing an uptake and spend across the board versus three months ago in a year ago and spending, etc. Among your desktop virtualization players, there's FBI, right? So that's gonna be your VPN right now. Obviously, they reported pretty good numbers there, so this is an obvious slide, but we wanted to kind of throw it in there. Just say, look, you know, these organizations are seeing nice upticks incent, you know, within the virtualization sectors, specifically within Fortune 500 again, that's kind of, you know, work from home spend that we're seeing here, >>right? So, I mean, this is really a 100% net score in the Fortune 500 for workspaces is pretty amazing. And I think the shared in on this that the end was actually quite large. It wasn't like single digits, Many dozens. I remember when Workspaces first came out, it maybe wasn't ready for prime time. But clearly there's momentum there, and we're seeing this across the board saga. Thanks so much for coming in this week. Really appreciate it. We're gonna be in touch with with you with the TR. We're gonna continue to report on this, but start Dr stay safe. And thanks again. >>Thanks again. Appreciate it. Looking for to do another one. >>All right. Thank you. Everybody for watching this Cube insights Powered by ET are this is Dave Volante for Dr Sadaaki. Remember, all these episodes are available as podcasts. I published weekly on wiki bond dot com Uh, and also on silicon angle dot com Don't forget tr dot Plus, Check out all the action there. Thanks for watching everybody. We'll see you next time. Yeah, yeah, yeah, yeah, yeah