>> Announcer: "theCUBE" presents "Kubecon and Cloudnativecon Europe, 2022" brought to you by Red Hat, the Cloud Native Computing Foundation and its ecosystem partners. >> Welcome to Valencia, Spain and "Kubecon + Cloudnativecon Europe, 2022." I'm Keith Townsend, and we're continuing the conversations with amazing people doing amazing things. I think we've moved beyond a certain phase of the hype cycle when it comes to Kubernetes. And we're going to go a little bit in detail with that today, and on all the sessions, I have today with me, Taylor Dolezal. New head of CNCF Ecosystem. So, first off, what does that mean new head of? You're the head of CNCF Ecosystem? What is the CNCF Ecosystem? >> Yeah. Yeah. It's really the end user ecosystem. So, the CNCF is comprised of really three pillars. And there's the governing board, they oversee the budget and fun things, make sure everything's signed and proper. Then there's the Technical Oversight Committee, TOC. And they really help decide the technical direction of the organization through deliberation and talking about which projects get invited and accepted. Projects get donated, and the TOC votes on who's going to make it in, based on all this criteria. And then, lastly, is the end user ecosystem, that encompasses a whole bunch of different working groups, special interest groups. And that's been really interesting to kind of get a deeper sense into, as of late. So, there are groups like the developer experience group, and the user research group. And those have very specific focuses that kind of go across all industries. But what we've seen lately, is that there are really deep wants to create, whether it be financial services user group, and things like that, because end users are having trouble with going to all of the different meetings. If you're a company, a vendor member company that's selling authentication software, or something in networking, makes sense to have a SIG network, SIG off, and those kinds of things. But when it comes down to like Boeing that just joined, does that make sense for them to jump into all those meetings? Or does it make sense to have some other kind of thing that is representative of them, so that they can attend that one thing, it's specific to their industry? They can get that download and kind of come up to speed, or find the best practices as quickly as possible in a nice synthesized way. >> So, you're 10 weeks into this role. You're coming from a customer environment. So, talk to me a little bit about the customer side of it? When you're looking at something, it's odd to call CNCF massive. But it is, 7.1 million members, and the number of contributing projects, et cetera. Talk to me about the view from the outside versus the view now that you're inside? >> Yeah, so honestly, it's been fun to kind of... For me, it's really mirrored the open-source journey. I've gone to Kubecon before, gotten to enjoy all of the booths, and trying to understand what's going on, and then worked for HashiCorp before coming to the CNCF. And so, get that vendor member kind of experience working the booth itself. So, kind of getting deeper and deeper into the stack of the conference itself. And I keep saying, vendor member and end user members, the difference between those, is end users are not organizations that sell cloud native services. Those are the groups that are kind of more consuming, the Airbnbs, the Boeings, the Mercedes, these people that use these technologies and want to kind of give that feedback back to these projects. But yeah, very incredibly massive and just sprawling when it comes to working in all those contexts. >> So, I have so many questions around, like the differences between having you as an end user and in inter-operating with vendors and the CNCF itself. So, let's start from the end user lens. When you're an end user and you're out discovering open-source and cloud native products, what's that journey like? How do you go from saying, okay, I'm primarily focused on vendor solutions, to let me look at this cloud native stack? >> Yeah, so really with that, there's been, I think that a lot of people have started to work with me and ask for, "Can we have recommended architectures? Can we have blueprints for how to do these things?" When the CNCF doesn't want to take that position, we don't want to kind of be the king maker and be like, this is the only way forward. We want to be inclusive, we want to pull in these projects, and kind of give everyone the same boot strap and jump... I missing the word of it, just ability to kind of like springboard off of that. Create a nice base for everybody to get started with, and then, see what works out, learn from one another. I think that when it comes to Kubernetes, and Prometheus, and some other projects, being able to share best practices between those groups of what works best as well. So, within all of the separations of the CNCF, I think that's something I've found really fun, is kind of like seeing how the projects relate to those verticals and those groups as well. Is how you run a project, might actually have a really good play inside of an organization like, "I like that idea. Let's try that out with our team." >> So, like this idea of springboarding. You know, is when an entrepreneur says, "You know what? I'm going to quit my job and springboard off into doing something new." There's a lot of uncertainty, but for enterprise, that can be really scary. Like we're used to our big vendors, HashiCorp, VMware, Cisco kind of guiding us and telling us like, what's next? What is that experience like, springboarding off into something as massive as cloud native? >> So, I think it's really, it's a great question. So, I think that's why the CNCF works so well, is the fact that it's a safe place for all these companies to come together, even companies of competing products. you know, having that common vision of, we want to make production boring again, we don't want to have so much sprawl and have to take in so much knowledge at once. Can we kind of work together to create all these things to get rid of our adminis trivia or maintenance tasks? I think that when it comes to open-source in general, there's a fantastic book it's called "Working in Public," it's by Stripe Press. I recommend it all over the place. It's orange, so you'll recognize it. Yeah, it's easy to see. But it's really good 'cause it talks about the maintainer journey, and what things make it difficult. And so, I think that that's what the CNCF is really working hard to try to get rid of, is all this monotonous, all these monotonous things, filing issues, best practices. How do you adopt open-source within your organization? We have tips and tricks, and kind of playbooks in ways that you could accomplish that. So, that's what I find really useful for those kinds of situations. Then it becomes easier to adopt that within your organization. >> So, I asked Priyanka, CNCF executive director last night, a pretty tough question. And this is kind of in the meat of what you do. What happens when you? Let's pick on service mesh 'cause everyone likes to pick on service mesh. >> XXXX: Yeah. >> What happens when there's differences at that vendor level on the direction of a CIG or a project, or the ecosystem around service mesh? >> Yeah, so that's the fun part. Honestly, is 'cause people get to hash it out. And so, I think that's been the biggest thing for me finding out, was that there's more than one way to do thing. And so, I think it always comes down to use case. What are you trying to do? And then you get to solve after that. So, it really is, I know it depends, which is the worst answer. But I really do think that's the case, because if you have people that are using something within the automotive space, or in the financial services space, they're going to have completely different needs, wants, you know, some might need to run Coball or Fortran, others might not have to. So, even at that level, just down to what your tech stack looks like, audits, and those kinds of things, that can just really differ. So, I think it does come down to something more like that. >> So, the CNCF loosely has become kind of a standards body. And it's centered around the core project Kubernetes? >> Mm-hmm. >> So, what does it mean, when we're looking at larger segments such as service mesh or observability, et cetera, to be Kubernetes compliant? Where's the point, if any, that the CNCF steps in versus just letting everyone hash it out? Is it Kubernetes just need to be Kubernetes compliant and everything else is free for all? >> Honestly, in many cases, it's up to the communities themselves to decide that. So, the groups that are running OCI, the Open Container Interface, Open Storage Interface, all of those things that we've agreed on as ways to implement those technologies, I think that's where the CNCF, that's the line. That's where the CNCF gets up to. And then, it's like we help foster those communities and those conversations and asking, does this work for you? If not, let's talk about it, let's figure out why it might not. And then, really working closely with community to kind of help bring those things forward and create action items. >> So, it's all about putting the right people in the rooms and not necessarily playing referee, but to get people in the right room to have and facilitate the conversation? >> Absolutely. Absolutely. Like all of the booths behind us could have their own conferences, but we want to bring everybody together to have those conversations. And again, sprawling can be really wild at certain times, but it's good to have those cross understandings, or to hear from somebody that you're like, "Oh, my goodness, I didn't even think about that kind of context or use case." So, really inclusive conversation. >> So, organizations like Boeing, Adobe, Microsoft, from an end user perspective, it's sometimes difficult to get those organizations into these types of communities. How do you encourage them to participate in the conversation 'cause their voice is extremely important? >> Yeah, that I'd also say it really is the community. I really liked the Kubernetes documentary that was put out, working with some of the CNCF folks and core, and beginning Kubernetes contributors and maintainers. And it just kind of blew me away when they had said, you know, what we thought was success, was seeing Kubernetes in an Amazon Data Center. That's when we knew that this was going to take root. And you'd rarely hear that, is like, "When somebody that we typically compete with, its success is seeing it, seeing them use that." And so, I thought was really cool. >> You know, I like to use this technology for my community of skipping rope. You see the girls and boys jumping double Dutch rope. And you think, "I can do that. Like it's just jumping." But there's this hesitation to actually, how do you start? How do you get inside of it? The question is how do you become a member of the community? We've talked a lot about what happens when you're in the community. But how do you join the community? >> So, really, there's a whole bunch of ways that you can. Actually, the shirt that I'm wearing, I got from the 114 Release. So, this is just a fun example of that community. And just kind of how welcoming and inviting that they are. Really, I do think it's kind of like a job breaker. Almost you start at the outside, you start using these technologies, even more generally like, what is DevOps? What is production? How do I get to infrastructure, architecture, or software engineering? Once you start there, you start working your way in, you develop a stack, and then you start to see these tools, technologies, workflows. And then, after you've kind of gotten a good amount of time spent with it, you might really enjoy it like that, and then want to help contribute like, "I like this, but it would be great to have a function that did this. Or I want a feature that does that." At that point in time, you can either take a look at the source code on GitHub, or wherever it's hosted, and then start to kind of come up with that, some ideas to contribute back to that. And then, beyond that, you can actually say, "No, I kind of want to have these conversations with people." Join in those special interest groups, and those meetings to kind of talk about things. And then, after a while, you can kind of find yourself in a contributor role, and then a maintainer role. After that, if you really like the project, and want to kind of work with community on that front. So, I think you had asked before, like Microsoft, Adobe and these others. Really it's about steering the projects. It's these communities want these things, and then, these companies say, "Okay, this is great. Let's join in the conversation with the community." And together again, inclusivity, and bringing everybody to the table to have that discussion and push things forward. >> So, Taylor, closing message. What would you want people watching this show to get when they think about ecosystem and CNCF? >> So, ecosystem it's a big place, come on in. Yeah, (laughs) the water's just fine. I really want people to take away the fact that... I think really when it comes down to, it really is the community, it's you. We are the end user ecosystem. We're the people that build the tools, and we need help. No matter how big or small, when you come in and join the community, you don't have to rewrite the Kubernetes scheduler. You can help make documentation that much more easy to understand, and in doing so, helping thousands of people, If I'm going through the instructions or reading a paragraph, doesn't make sense, that has such a profound impact. And I think a lot of people miss that. It's like, even just changing punctuation can have such a giant difference. >> Yeah, I think people sometimes forget that community, especially community-run projects, they need product managers. They need people that will help with communications, people that will help with messaging, websites updating. Just reachability, anywhere from developing code to developing documentation, there's ways to jump in and help the community. From Valencia, Spain, I'm Keith Townsend, and you're watching "theCUBE," the leader in high tech coverage. (bright upbeat music)

(upbeat music) >> Welcome to this CUBE Power Panel where we're going to talk about application modernization, also success templates, and take a look at some new survey data to see how CIOs are thinking about digital transformation, as we get deeper into the post isolation economy. And with me are three familiar VIP guests to CUBE audiences. Tony Bear, the principal at DB InSight, Doug Henschen, VP and principal analyst at Constellation Research and Sanjeev Mohan principal at SanjMo. Guys, good to see you again, welcome back. >> Thank you. >> Glad to be here. >> Thanks for having us. >> Glad to be here. >> All right, Doug. Let's get started with you. You know, this recent survey, which was commissioned by Couchbase, 650 CIOs and CTOs, and IT practitioners. So obviously very IT heavy. They responded to the following question, "In response to the pandemic, my organization accelerated our application modernization strategy and of course, an overwhelming majority, 94% agreed or strongly agreed." So I'm sure, Doug, that you're not shocked by that, but in the same survey, modernizing existing technologies was second only behind cyber security is the top investment priority this year. Doug, bring us into your world and tell us the trends that you're seeing with the clients and customers you work with in their modernization initiatives. >> Well, the survey, of course, is spot on. You know, any Constellation Research analyst, any systems integrator will tell you that we saw more transformation work in the last two years than in the prior six to eight years. A lot of it was forced, you know, a lot of movement to the cloud, a lot of process improvement, a lot of automation work, but transformational is aspirational and not every company can be a leader. You know, at Constellation, we focus our research on those market leaders and that's only, you know, the top 5% of companies that are really innovating, that are really disrupting their markets and we try to share that with companies that want to be fast followers, that these are the next 20 to 25% of companies that don't want to get left behind, but don't want to hit some of the same roadblocks and you know, pioneering pitfalls that the real leaders are encountering when they're harnessing new technologies. So the rest of the companies, you know, the cautious adopters, the laggards, many of them fall by the wayside, that's certainly what we saw during the pandemic. Who are these leaders? You know, the old saw examples that people saw at the Amazons, the Teslas, the Airbnbs, the Ubers and Lyfts, but new examples are emerging every year. And as a consumer, you immediately recognize these transformed experiences. One of my favorite examples from the pandemic is Rocket Mortgage. No disclaimer required, I don't own stock and you're not client, but when I wanted to take advantage of those record low mortgage interest rates, I called my current bank and some, you know, stall word, very established conventional banks, I'm talking to you Bank of America, City Bank, and they were taking days and weeks to get back to me. Rocket Mortgage had the locked in commitment that day, a very proactive, consistent communications across web, mobile, email, all customer touchpoints. I closed in a matter of weeks an entirely digital seamless process. This is back in the gloves and masks days and the loan officer came parked in our driveway, wiped down an iPad, handed us that iPad, we signed all those documents digitally, completely electronic workflow. The only wet signatures required were those demanded by the state. So it's easy to spot these transformed experiences. You know, Rocket had most of that in place before the pandemic, and that's why they captured 8% of the national mortgage market by 2020 and they're on track to hit 10% here in 2022. >> Yeah, those are great examples. I mean, I'm not a shareholder either, but I am a customer. I even went through the same thing in the pandemic. It was all done in digital it was a piece of cake and I happened to have to do another one with a different firm and stuck with that firm for a variety of reasons and it was night and day. So to your point, it was a forced merge to digital. If you were there beforehand, you had real advantage, it could accelerate your lead during the pandemic. Okay, now Tony bear. Mr. Bear, I understand you're skeptical about all this buzz around digital transformation. So in that same survey, the data shows that the majority of respondents said that their digital initiatives were largely reactive to outside forces, the pandemic compliance changes, et cetera. But at the same time, they indicated that the results while somewhat mixed were generally positive. So why are you skeptical? >> The reason being, and by the way, I have nothing against application modernization. The problem... I think the problem I ever said, it often gets conflated with digital transformation and digital transformation itself has become such a buzzword and so overused that it's really hard, if not impossible to pin down (coughs) what digital transformation actually means. And very often what you'll hear from, let's say a C level, you know, (mumbles) we want to run like Google regardless of whether or not that goal is realistic you know, for that organization (coughs). The thing is that we've been using, you know, businesses have been using digital data since the days of the mainframe, since the... Sorry that data has been digital. What really has changed though, is just the degree of how businesses interact with their customers, their partners, with the whole rest of the ecosystem and how their business... And how in many cases you take look at the auto industry that the nature of the business, you know, is changing. So there is real change of foot, the question is I think we need to get more specific in our goals. And when you look at it, if we can boil it down to a couple, maybe, you know, boil it down like really over simplistically, it's really all about connectedness. No, I'm not saying connectivity 'cause that's more of a physical thing, but connectedness. Being connected to your customer, being connected to your supplier, being connected to the, you know, to the whole landscape, that you operate in. And of course today we have many more channels with which we operate, you know, with customers. And in fact also if you take a look at what's happening in the automotive industry, for instance, I was just reading an interview with Bill Ford, you know, their... Ford is now rapidly ramping up their electric, you know, their electric vehicle strategy. And what they realize is it's not just a change of technology, you know, it is a change in their business, it's a change in terms of the relationship they have with their customer. Their customers have traditionally been automotive dealers who... And the automotive dealers have, you know, traditionally and in many cases by state law now have been the ones who own the relationship with the end customer. But when you go to an electric vehicle, the product becomes a lot more of a software product. And in turn, that means that Ford would have much more direct interaction with its end customers. So that's really what it's all about. It's about, you know, connectedness, it's also about the ability to act, you know, we can say agility, it's about ability not just to react, but to anticipate and act. And so... And of course with all the proliferation, you know, the explosion of data sources and connectivity out there and the cloud, which allows much more, you know, access to compute, it changes the whole nature of the ball game. The fact is that we have to avoid being overwhelmed by this and make our goals more, I guess, tangible, more strictly defined. >> Yeah, now... You know, great points there. And I want to just bring in some survey data, again, two thirds of the respondents said their digital strategies were set by IT and only 26% by the C-suite, 8% by the line of business. Now, this was largely a survey of CIOs and CTOs, but, wow, doesn't seem like the right mix. It's a Doug's point about, you know, leaders in lagers. My guess is that Rocket Mortgage, their digital strategy was led by the chief digital officer potentially. But at the same time, you would think, Tony, that application modernization is a prerequisite for digital transformation. But I want to go to Sanjeev in this war in the survey. And respondents said that on average, they want 58% of their IT spend to be in the public cloud three years down the road. Now, again, this is CIOs and CTOs, but (mumbles), but that's a big number. And there was no ambiguity because the question wasn't worded as cloud, it was worded as public cloud. So Sanjeev, what do you make of that? What's your feeling on cloud as flexible architecture? What does this all mean to you? >> Dave, 58% of IT spend in the cloud is a huge change from today. Today, most estimates, peg cloud IT spend to be somewhere around five to 15%. So what this number tells us is that the cloud journey is still in its early days, so we should buckle up. We ain't seen nothing yet, but let me add some color to this. CIOs and CTOs maybe ramping up their cloud deployment, but they still have a lot of problems to solve. I can tell you from my previous experience, for example, when I was in Gartner, I used to talk to a lot of customers who were in a rush to move into the cloud. So if we were to plot, let's say a maturity model, typically a maturity model in any discipline in IT would have something like crawl, walk, run. So what I was noticing was that these organizations were jumping straight to run because in the pandemic, they were under the gun to quickly deploy into the cloud. So now they're kind of coming back down to, you know, to crawl, walk, run. So basically they did what they had to do under the circumstances, but now they're starting to resolve some of the very, very important issues. For example, security, data privacy, governance, observability, these are all very big ticket items. Another huge problem that nav we are noticing more than we've ever seen, other rising costs. Cloud makes it so easy to onboard new use cases, but it leads to all kinds of unexpected increase in spikes in your operating expenses. So what we are seeing is that organizations are now getting smarter about where the workloads should be deployed. And sometimes it may be in more than one cloud. Multi-cloud is no longer an aspirational thing. So that is a huge trend that we are seeing and that's why you see there's so much increased planning to spend money in public cloud. We do have some issues that we still need to resolve. For example, multi-cloud sounds great, but we still need some sort of single pane of glass, control plane so we can have some fungibility and move workloads around. And some of this may also not be in public cloud, some workloads may actually be done in a more hybrid environment. >> Yeah, definitely. I call it Supercloud. People win sometimes-- >> Supercloud. >> At that term, but it's above multi-cloud, it floats, you know, on topic. But so you clearly identified some potholes. So I want to talk about the evolution of the application experience 'cause there's some potholes there too. 81% of their respondents in that survey said, "Our development teams are embracing the cloud and other technologies faster than the rest of the organization can adopt and manage them." And that was an interesting finding to me because you'd think that infrastructure is code and designing insecurity and containers and Kubernetes would be a great thing for organizations, and it is I'm sure in terms of developer productivity, but what do you make of this? Does the modernization path also have some potholes, Sanjeev? What are those? >> So, first of all, Dave, you mentioned in your previous question, there's no ambiguity, it's a public cloud. This one, I feel it has quite a bit of ambiguity because it talks about cloud and other technologies, that sort of opens up the kimono, it's like that's everything. Also, it says that the rest of the organization is not able to adopt and manage. Adoption is a business function, management is an IT function. So I feed this question is a bit loaded. We know that app modernization is here to stay, developing in the cloud removes a lot of traditional barriers or procuring instantiating infrastructure. In addition, developers today have so many more advanced tools. So they're able to develop the application faster because they have like low-code/no-code options, they have notebooks to write the machine learning code, they have the entire DevOps CI/CD tool chain that makes it easy to version control and push changes. But there are potholes. For example, are developers really interested in fixing data quality problems, all data, privacy, data, access, data governance? How about monitoring? I doubt developers want to get encumbered with all of these operationalization management pieces. Developers are very keen to deliver new functionality. So what we are now seeing is that it is left to the data team to figure out all of these operationalization productionization things that the developers have... You know, are not truly interested in that. So which actually takes me to this topic that, Dave, you've been quite actively covering and we've been talking about, see, the whole data mesh. >> Yeah, I was going to say, it's going to solve all those data quality problems, Sanjeev. You know, I'm a sucker for data mesh. (laughing) >> Yeah, I know, but see, what's going to happen with data mesh is that developers are now going to have more domain resident power to develop these applications. What happens to all of the data curation governance quality that, you know, a central team used to do. So there's a lot of open ended questions that still need to be answered. >> Yeah, That gets automated, Tony, right? With computational governance. So-- >> Of course. >> It's not trivial, it's not trivial, but I'm still an optimist by the end of the decade we'll start to get there. Doug, I want to go to you again and talk about the business case. We all remember, you know, the business case for modernization that is... We remember the Y2K, there was a big it spending binge and this was before the (mumbles) of the enterprise, right? CIOs, they'd be asked to develop new applications and the business maybe helps pay for it or offset the cost with the initial work and deployment then IT got stuck managing the sprawling portfolio for years. And a lot of the apps had limited adoption or only served a few users, so there were big pushes toward rationalizing the portfolio at that time, you know? So do I modernize, they had to make a decision, consolidate, do I sunset? You know, it was all based on value. So what's happening today and how are businesses making the case to modernize, are they going through a similar rationalization exercise, Doug? >> Well, the Y2K era experience that you talked about was back in the days of, you know, throw the requirements over the wall and then we had waterfall development that lasted months in some cases years. We see today's most successful companies building cross functional teams. You know, the C-suite the line of business, the operations, the data and analytics teams, the IT, everybody has a seat at the table to lead innovation and modernization initiatives and they don't start, the most successful companies don't start by talking about technology, they start by envisioning a business outcome by envisioning a transformed customer experience. You hear the example of Amazon writing the press release for the product or service it wants to deliver and then it works backwards to create it. You got to work backwards to determine the tech that will get you there. What's very clear though, is that you can't transform or modernize by lifting and shifting the legacy mess into the cloud. That doesn't give you the seamless processes, that doesn't give you data driven personalization, it doesn't give you a connected and consistent customer experience, whether it's online or mobile, you know, bots, chat, phone, everything that we have today that requires a modern, scalable cloud negative approach and agile deliver iterative experience where you're collaborating with this cross-functional team and course correct, again, making sure you're on track to what's needed. >> Yeah. Now, Tony, both Doug and Sanjeev have been, you know, talking about what I'm going to call this IT and business schism, and we've all done surveys. One of the things I'd love to see Couchbase do in future surveys is not only survey the it heavy, but also survey the business heavy and see what they say about who's leading the digital transformation and who's in charge of the customer experience. Do you have any thoughts on that, Tony? >> Well, there's no question... I mean, it's kind like, you know, the more things change. I mean, we've been talking about that IT and the business has to get together, we talked about this back during, and Doug, you probably remember this, back during the Y2K ERP days, is that you need these cross functional teams, we've been seeing this. I think what's happening today though, is that, you know, back in the Y2K era, we were basically going into like our bedrock systems and having to totally re-engineer them. And today what we're looking at is that, okay, those bedrock systems, the ones that basically are keeping the lights on, okay, those are there, we're not going to mess with that, but on top of that, that's where we're going to innovate. And that gives us a chance to be more, you know, more directed and therefore we can bring these related domains together. I mean, that's why just kind of, you know, talk... Where Sanjeev brought up the term of data mesh, I've been a bit of a cynic about data mesh, but I do think that work and work is where we bring a bunch of these connected teams together, teams that have some sort of shared context, though it's everybody that's... Every team that's working, let's say around the customer, for instance, which could be, you know, in marketing, it could be in sales, order processing in some cases, you know, in logistics and delivery. So I think that's where I think we... You know, there's some hope and the fact is that with all the advanced, you know, basically the low-code/no-code tools, they are ways to bring some of these other players, you know, into the process who previously had to... Were sort of, you know, more at the end of like a, you know, kind of a... Sort of like they throw it over the wall type process. So I do believe, but despite all my cynicism, I do believe there's some hope. >> Thank you. Okay, last question. And maybe all of you could answer this. Maybe, Sanjeev, you can start it off and then Doug and Tony can chime in. In the survey, about a half, nearly half of the 650 respondents said they could tangibly show their organizations improve customer experiences that were realized from digital projects in the last 12 months. Now, again, not surprising, but we've been talking about digital experiences, but there's a long way to go judging from our pandemic customer experiences. And we, again, you know, some were great, some were terrible. And so, you know, and some actually got worse, right? Will that improve? When and how will it improve? Where's 5G and things like that fit in in terms of improving customer outcomes? Maybe, Sanjeev, you could start us off here. And by the way, plug any research that you're working on in this sort of area, please do. >> Thank you, Dave. As a resident optimist on this call, I'll get us started and then I'm sure Doug and Tony will have interesting counterpoints. So I'm a technology fan boy, I have to admit, I am in all of all these new companies and how they have been able to rise up and handle extreme scale. In this time that we are speaking on this show, these food delivery companies would have probably handled tens of thousands of orders in minutes. So these concurrent orders, delivery, customer support, geospatial location intelligence, all of this has really become commonplace now. It used to be that, you know, large companies like Apple would be able to handle all of these supply chain issues, disruptions that we've been facing. But now in my opinion, I think we are seeing this in, Doug mentioned Rocket Mortgage. So we've seen it in FinTech and shopping apps. So we've seen the same scale and it's more than 5G. It includes things like... Even in the public cloud, we have much more efficient, better hardware, which can do like deep learning networks much more efficiently. So machine learning, a lot of natural language programming, being able to handle unstructured data. So in my opinion, it's quite phenomenal to see how technology has actually come to rescue and as, you know, billions of us have gone online over the last two years. >> Yeah, so, Doug, so Sanjeev's point, he's saying, basically, you ain't seen nothing yet. What are your thoughts here, your final thoughts. >> Well, yeah, I mean, there's some incredible technologies coming including 5G, but you know, it's only going to pave the cow path if the underlying app, if the underlying process is clunky. You have to modernize, take advantage of, you know, serverless scalability, autonomous optimization, advanced data science. There's lots of cutting edge capabilities out there today, but you know, lifting and shifting you got to get your hands dirty and actually modernize on that data front. I mentioned my research this year, I'm doing a lot of in depth looks at some of the analytical data platforms. You know, these lake houses we've had some conversations about that and helping companies to harness their data, to have a more personalized and predictive and proactive experience. So, you know, we're talking about the Snowflakes and Databricks and Googles and Teradata and Vertica and Yellowbrick and that's the research I'm focusing on this year. >> Yeah, your point about paving the cow path is right on, especially over the pandemic, a lot of the processes were unknown. But you saw this with RPA, paving the cow path only got you so far. And so, you know, great points there. Tony, you get the last word, bring us home. >> Well, I'll put it this way. I think there's a lot of hope in terms of that the new generation of developers that are coming in are a lot more savvy about things like data. And I think also the new generation of people in the business are realizing that we need to have data as a core competence. So I do have optimism there that the fact is, I think there is a much greater consciousness within both the business side and the technical. In the technology side, the organization of the importance of data and how to approach that. And so I'd like to just end on that note. >> Yeah, excellent. And I think you're right. Putting data at the core is critical data mesh I think very well describes the problem and (mumbles) credit lays out a solution, just the technology's not there yet, nor are the standards. Anyway, I want to thank the panelists here. Amazing. You guys are always so much fun to work with and love to have you back in the future. And thank you for joining today's broadcast brought to you by Couchbase. By the way, check out Couchbase on the road this summer at their application modernization summits, they're making up for two years of shut in and coming to you. So you got to go to couchbase.com/roadshow to find a city near you where you can meet face to face. In a moment. Ravi Mayuram, the chief technology officer of Couchbase will join me. You're watching theCUBE, the leader in high tech enterprise coverage. (bright music)

(upbeat music) >> We're back. This is Dave Vellante of theCUBE, and we're here with Ray Wang, who just wrote a book reminiscent of the famous Tears for Fears song, Everybody Wants to Rule the World: Surviving and Thriving in a World of Digital Giants. Ray, great to see again, man. >> What's going on, man, how are you? >> Oh great, thanks for coming on. You know, it was crazy, been crazy, but it's good to see you face-to-face. >> Ray: This is, we're in the flesh, it's live, we're having conversations, and the information that we're getting is cut right. >> Dave: Yeah, so why did you write this book and how did you find the time? >> Hey, we're in the middle of pandemic. No, I wrote the book because what was happening was digital transformation efforts, they're starting to pop up, but companies weren't always succeeding. And something was happening with digital giants that was very different. They were winning in the marketplace. And never in the form of, if you think about extreme capitalism, if we think about capitalism in general, never in the history of capitalism have we seen growth of large companies. They get large, they fall apart, they don't have anything to build, they can't scale. Their organizations are in shambles. But what happened? If you look at 2017, the combined market cap of the FAANGs and Microsoft was 2 trillion. Today, it is almost 10.2 trillion. It's quintupled. That's never happened. And there's something behind that business model that they put into place that others have copied, from the Airbnbs to the Robloxes to what's going to happen with like a Starlink, and of course, the Robinhoods and you know, Robinhoods and Coinbases of the world. >> And the fundamental premise is all around data, right? Putting data at the core, if you don't do that, you're going to fly blind. >> It is and the secret behind that is the long-term platforms called data-driven digital networks. These platforms take the ability, large memberships, our large devices, they look at that effect. Then they look at figuring out how to actually win on data supremacy. And then of course, they monetize off that data. And that's really the secret behind that is you've got to build that capability and what they do really well is they dis-intermediate customer account control. They take the relationships, aggregate them together. So food delivery app companies are great example of that. You know, small businesses are out there that hundreds and thousands of customers. Today, what happens? Well, they've been aggregated. Millions of customers together into food delivery app. >> Well, I think, you know, this is really interesting what you're saying, because if you think about how we deal with Netflix, we don't call the Netflix sales department or the marketing department of the service, just one interface, the Netflix. So they've been able to put data at their core. Can incumbents do that? How can they do that? >> Incumbents can definitely do that. And it's really about figuring out how to automate that capture. What you really want to do is you start in the cloud, you bring the data together, and you start putting the three A's, analytics, automation, and AI are what you have to be able to put into place. And when you do do that, you now have the ability to go out and figure out how to create that flywheel effect inside those data-driven digital networks. These DDDNS are important. So in Netflix, what are they capturing? They're looking at sentiment, they're looking at context. Like why did you interact with, you know, one title versus another? Did you watch Ted Lasso? Did you switch out of Apple TV to Netflix? Well, I want to know why, right? Did you actually jump into another category? You switched into genres. After 10:00 p.m., what are you watching? Maybe something very different than what you're watching at 2:00 p.m.. How many members are in the home, right? All these questions are being answered and that's the business graph behind all this. >> How much of this is kind of related to the way organizations or companies are organized? In other words, you think about, historically, they would maybe put the process at the core or the, in a bottling plant, the manufacturing facility at the core and the data's all dispersed. Everybody talks about silos. So will AI be the answer to that? Will some new database, Snowflake? Is that the answer? What's the answer to sort of bringing that data together and how do you deal with the organizational inertia? >> Well, the trick to it is really to have a single plane to be able to access that data. I don't care where the data sits, whether it's on premise, whether it's in the cloud, whether it's in the edge, it makes no difference. That's really what you want to be able to do is bring that information together. But the glue is the context. What time was it? What's the weather outside? What location are you in? What's your heart rate? Are you smiling, right? All of those factors come into play. And what we're trying to do is take a user, right? So it could be a customer, a supplier, a partner, or an employee. And how do they interact with an order doc, an invoice, an incident, and then apply the context. And what we're doing is mining that context and information. Now, the more, back to your other point on self service and automation, the more you can actually collect those data points, the more you can capture that context, the more you're able to get to refine that information. >> Context, that's interesting, because if you think about our operational systems, we've contextualized most of them, whether it's sales, marketing, logistics, but we haven't really contextualized our data systems, our data architecture. It's generally run by a technical group. They don't necessarily have the line of business context. You see what HPE is doing today is trying to be inclusive of data on prem. I mentioned Snowflake, they're saying no way. Frank Slootman says we're not going on prem. So that's kind of interesting. So how do you see sort of context evolving with the actually the business line? Not only who has the context actually can, I hate to use the word, but I'm going to, own the data. >> You have to have a data to decisions pathway. That data decisions pathway is you start with all types of data, structured, unstructured, semi-structured, you align it to a business process as an issue, issue to resolution, order to cash, procure to pay, hire to retire. You bring that together, and then you start mining and figuring out what patterns exist. Once you have the patterns, you can then figure out the next best action. And when you get the next best action, you can compete on decisions. And that becomes a very important part. That decision piece, that's going to be automated. And when we think about that, you and I make a decision one per second, how long does it get out of management committee? Could be a week, two weeks, a quarter, a year. It takes forever to get anything out of management committee. But these new systems, if you think about machines, can make decisions a hundred times per second, a thousand times per second. And that's what we're competing against. That asymmetry is the decision velocity. How quickly you can make decisions will be a competitive weapon. >> Is there a dissonance between the fact that you just mentioned, speed, compressing, that sort of time to decision, and the flip side of that coin, quality, security, governance. How do you see squaring that circle? >> Well, that's really why we're going to have to make that, that's the automated, that's the AI piece. Just like we have all types of data, we got to spew up automated ontologies, we got to spit them up, we got to be using, we've got to put them back into play, and then we got to be able to take back into action. And so you want enterprise class capabilities. That's your data quality. That's your security. That's the data governance. That's the ability to actually take that data and understand time series, and actually make sure that the integrity of that data is there. >> What do you think about this sort of notion that increasingly, people are going to be building data products and services that can be monetized? And that's kind of goes back to context, the business lines kind of being responsible for their own data, not having to get permission to add another data source. Do you see that trend? Do you see that decentralization trend? Two-part question. And where do you see HPE fitting into that? >> I see, one, that that trend is definitely going to exist. I'll give you an example. I can actually destroy the top two television manufacturers in the world in less than five years. I could take them out of the business and I'll show you how to do it. So I'm going to make you an offer. $15 per month for the next five years. I'm going to give you a 72 inch, is it 74? 75 inch, 75 inch smart TV, 4k, big TV, right? And it comes with a warranty. And if anything breaks, I'm going to return it to you in 48 hours or less with a brand new one. I don't want your personal information. I'm only going to monitor performance data. I want to know the operations. I want to know which supplier lied to me, which components are working, what features you use. I don't need to know your personal viewing habits, okay? Would you take that deal? >> TV is a service, sure, of course I would. >> 15 bucks and I'm going to make you a better deal. For $25 a month, you get to make an upgrade anytime during that five-year period. What would happen to the two largest TV manufacturers if I did that? >> Yeah, they'd be disrupted. Now, you obviously have a pile of VC money that you're going to do that. Will you ever make money at that model? >> Well, here's why I'll get there and I'll explain. What's going to happen is I lock them out of the market for four to five years. I'm going to take 50 to 60% of the market. Yes, I got to raise $10 billion to figure out how to do that. But that's not really what happens at the end. I become a data company because I have warranty data. I'm going to buy a company that does, you know, insurance like in Asurion. I'm going to get break/fix data from like a Best Buy or a company like that. I'm going to get at safety data from an underwriter's lab. It's a competition for data. And suddenly, I know those habits better than anyone else. I'm going to go do other things more than the TV. I'm not done with the TV. I'm going to do your entire kitchen. For $100 a month, I'll do a mid range. For like $500 a month, I'm going to take your dish washer, your washer, your dryer, your refrigerator, your range. And I'll do like Miele, Gaggenau, right? If you want to go down Viking, Wolf, I'll do it for $450 a month for the next 10 years. By year five, I have better insurance information than the insurance companies from warranty. And I can even make that deal portable. You see where we're going? >> Yeah so each of those are, I see them as data products. So you've got your TV service products, you've got your kitchen products, you've got your maintenance, you know, data products. All those can be monetized. >> And I went from TV manufacturer to underwriter overnight. I'm competing on data, on insurance, and underwriting. And more importantly, here's the green initiative. Here's why someone would give me $10 billion to do it. I now control 50% of all power consumption in North America because I'm also going to do HVAC units, right? And I can actually engineer the green capabilities in there to actually do better power purchase consumption, better monitoring, and of course, smart capabilities in those, in those appliances. And that's how you actually build a model like that. And that's how you can win on a data model. Now, where does HPE fit into that? Their job is to bring that data together at the edge. They bring that together in the middle. Then they have the ability to manage that on a remote basis and actually deliver those services in the cloud so that someone else can consume it. >> All right, so if you, you're hitting on something that some people have have talked about, but it's, I don't think it's widely sort of discussed. And that is, historically, if you're in an industry, you're in that industry's vertical stack, the sales, the marketing, the manufacturing, the R&D. You become an expert in insurance or financial services or whatever, you know, automobile manufacturing or radio and television, et cetera. Obviously, you're seeing the big internet giants, those 10 trillion, you know, some of the market caps, they're using data to traverse industries. We've never seen this before. Amazon in content, you're seeing Apple in finance, others going into the healthcare. So they're technology companies that are able to traverse industries. Never seen this before, and it's because of data. >> And it's the collapsing value chains. Their data value chains are collapsing. Comms, media, entertainment, tech, same business. Whether you sell me a live stream TV, a book, a video game, or some enterprise software, it's the same data value stream on multi-sided networks. And once you understand that, you can see retail, right? Distribution, manufacturing collapsed in the same kind of way. >> So Silicon Valley broadly defined, if I can include, you know, Microsoft and Amazon in there, they seem to have a dual disruption agenda, right? One is on the technology front, disrupting, you know, the traditional enterprise business. The other is they're disrupting industries. How do you see that playing out? >> Well the problem is, they're never going to be able to get into new industries going forward because of the monopoly power that people believe they have, and that's what's going on, but they're going to invest in creating joint venture startups in other industries, as they power the tools to enable other industries to jump and leap frog from where they are. So healthcare, for example, we're going to have AI in monitoring in ways that we never seen before. You can see devices enter healthcare, but you see joint venture partnerships between a big hyperscaler and some of the healthcare providers. >> So HPE transforming into a cloud company as a service, do you see them getting into insurance as you just described in your little digital example? >> No, but I see them powering the folks that are in insurance, right? >> They're not going to compete with their customers maybe the way that Amazon did. >> No, that's actually why you would go to them as opposed to a hyperscale that might compete with you, right? So is Google going to get into the insurance business? Probably not. Would Amazon? Maybe. Is Tesla in the business? Yeah, they're definitely in insurance. >> Yeah, big time, right. So, okay. So tell me more about your book. How's it being received? What's the reaction? What's your next book? >> So the book is doing well. We're really excited. We did a 20 city book tour. We had chances to meet everybody across the board. Clients we couldn't see in a while, partners we didn't see in a while. And that was fun. The reaction is, if you read the book carefully, there are $3 trillion market cap opportunities, $1000 billion unicorns that can be built right there. >> Is, do you have a copy for me that's signed? (audience laughing) >> Ray: Sorry (coughs) I'm choking on my makeup. I can get one actually, do you want one? >> Dave: I do, I want, I want one. >> Can someone bring my book bag? I actually have one, I can sign it right here. >> Dave: Yeah, you know what? If we have a book, I'd love to hold it. >> Ray: Do you have any here as well? >> So it's obviously you know, Everybody Wants to Rule the World: Surviving and Thriving in a world of Digital Giants, available, you know, wherever you buy books. >> Yeah, so, oh, are we still going? >> Dave: Yeah, yeah, we're going. >> Okay. >> Dave: What's the next book? >> Next book? Well, it's about disrupting those digital giants and it's going to happen in the metaverse economy. If we think about where the metaverse is, not just the hardware platforms, not just the engines, not just what's going on with the platforms around defy decentralization and the content producers, we see those as four different parts today. What we're going to actually see is a whole comp, it's a confluence of events that's going to happen where we actually bring in the metaverse economy and the stuff that Neal Stephenson was writing about ages ago in Snow Crash is going to come out real. >> So, okay. So you're laying out a scenario that the big guys, the disruptors, could get disrupted. It sounds like crypto is possibly a force in that disruption. >> Ray: Decentralized currencies, crypto plays a role, but it's the value exchange mechanisms in an Algorand, in an Ether, right, in a Cardano, that actually enables that to happen because the value exchange in the smart contracts power that capability, and what we're actually seeing is the reinvention of the internet. So you think, see things like SIOM pop-up, which actually is creating the new set of the internet standards, and when those things come together, what we're actually going to move from is the seller is completely transparent, the buyer's completely anonymous and it's in a trust framework that actually allows you to do that. >> Well, you think about those protocols, the internet protocols that were invented whenever, 30 years ago, maybe more, TCP/IP, wow. I mean, okay. And they've been co-opted by the internet giants. It's the crypto guys, some of the guys you've mentioned that are actually innovating and putting, putting down new innovation really and have been well-funded to do so. >> I mean, I'll give you another example of how this could happen. About four years ago, five years ago, I wanted to buy Air Canada's mileage program, $400 million, 10 million users, 40 bucks a user. What do I want them in a mileage program? Well think about it. It's funded, a penny per mile. It's redeemed at 1.6 cents a mile. It's 2 cents if you buy magazines, 2 1/2 cents if you want, you know, electronics, jewelry, or sporting equipment. You don't lose money on these. CFOs hate them, they're just like (groans) liability on the books, but they mortgage the crap out of them in the middle of an ish problem and banks pay millions of dollars a year pour those mileage points. But I don't want it for the 10 million flyers in Canada. What I really want is the access to 762 million people in Star Alliance. What would happen if I turned that airline mileage program into cryptocurrency? One, I would be the world's largest cryptocurrency on day one. What would happen on day two? I'd be the world's largest ad network. Cookie apocalypse, go away. We don't need that anymore. And more importantly, on day three, what would I do? My ESG here? 2.2 billion people are unbanked in the world. All you need is a mobile device and a connection, now you have a currency without any government regulation around, you know, crayon banking, intermediaries, a whole bunch of people like taking cuts, loansharking, that all goes away. You suddenly have people that are now banked and you've unbanked, you've banked the unbanked. And that creates a whole very different environment. >> Not a lot of people thinking about how the big giants get disintermediated. Get the book, look into it, big ideas. Ray Wang, great to see you, man. >> Ray: Hey man, thanks a lot. >> Hey, thank you. All right and thank you for watching. Keep it right there for more great content from HPE's big GreenLake announcements. Be right back. (bright music)

>> Live from Seattle, Washington it's theCUBE covering KubeCon and CloudNativeCom North America 2018. Brought to you by Red Hat the cloud-native computing foundation and its ecosystem partner. >> Welcome back everyone, it's theCUBE's live coverage here in Seattle of KubeCon and CloudNativeCon 2018. I'm John Furrier, with Stu Miniman, host of theCUBE. Three days of live coverage. Wall to wall, 8000 people here. Doubled from the previous event in North America, expanding globally, we are here with Liz Rice, technology analyst, evangelist at Aqua Security and program co-chair here at KubeCon, CloudNativeCon. Liz, thanks for joining us. >> Thank you for having me. >> I know you had a busy day, keynotes and all. A lot of activity, a lot of hand shaking, walking around, very crowded. >> It is, we're packed. We're absolutely at capacity here and the event sold out and it's busy. >> A lot of energy, real quick, I know you guys did a lot of work, you guys always do a great job, exceptional performance again. >> Thank you. >> CNCF does a great job on the content programming. It's about the open source communities. That's fundamental, a lot of end users, both participating and consuming. Vendor list is expanding. Putting the program together gets challenging when you have these kind of numbers. What were the themes? How did you put it all together? What was resonating? What's the focus? >> Yeah, it was so hard, we had so many applications that we could only accept 13%, which makes it almost impossible some of the decisions you have to make. And some of the things that were coming out, were like Knative, a lot of submissions around Knative. Serverless in general obviously being quite a hot topic, I would say across our industry. Really great talks from end users and we've seen a few on the keynote stage. Where some brands that we're all aware of, people like Airbnb, sharing their stories of what they've done to make their deployments, their cloud-native deployments, their use of kubernetes successful. So it's not just working from the ties, and doing some experiments, they are telling us how they've done this for real. >> You had a very successful KubeCon in Copenhagen. And so how did you integrate from Copenhagen to here. What were some of the inefficiencies? Obviously, the bigger numbers here. You recently had China the success where, we've reported on SiliconANGLE, the open source consumption and contribution is off the charts. It's huge, it's growing and it's a new dynamic. So between China, and Copenhagen, here, interesting things happening. >> China was phenomenal for me. It was my first trip to China, so it was eye-opening in all sorts of respects. And one of the really interesting things there was the use of machine learning. The uses of kube flow, real life examples. Again I think there is something about how much data they've been able to collect in China. But we heard some really great stories of, for example, electricity companies using machine learning on kubernetes to predict demand. It was fascinating. >> It's a lot of adoption. >> Yes. >> They are at the front end, they are a mobile culture. IOT is booming over there, it's just massive. >> Absolutely. >> Alright here in Seattle, obviously Seattle home of AWS, and I was just talking to some folks here locally in Seattle, just this morning, they said they think this is the biggest conference of the year here in Seattle. Which is really telling where you guys have come from. Interesting dynamic. A lot of new ecosystem partners. What's happening? It seems to be energy, the buzz. There's a subtext here that's buzzing around the hallways. What's the most important thing that people should be taking away from this event this year? >> I think the scale of it is coming from real adoption and businesses that are moving their applications into the cloud. Public cloud and hybrid cloud and finding success through doing that with cloud native components. You mentioned the end users who want to be part of the community, and they actually wanted to contribute to the community. You can look around the hall and see booths from, like Uber's over there. They're really contributing to this community. It's not just a bunch of enthusiasts, it's for real. >> Problems being solved, real company end users. >> So Liz, one of the things we've been looking at this is not a monolith here. You've actually got a whole lot of communities. As I've been wandering the floor, if I'm talking to people. We had Matt come on to talk about Envoy and they had their own conference at the beginning of the week and they had 250 people. As I'm wandering around, you talk to a number and it's like oh, I'm here all about Helm. You know there's different service meshes all over the place that everybody is talking about. >> Yeah another big theme. >> You're heavily focused on the security aspects there. I believe you've got a project that Aqua has been involved in. It was kube-hunter if I've got it. Maybe before you talk about kube-hunter, maybe just talk about balancing, this isn't one community, it's gotten really big. Do we need to break this into a micro-services space show? We'll have the core, but lots of other things and spread it out all over the world. >> Sure, it's a real challenge as this community is growing so fast and trying to keep the community feel. Balancing what the contributors want to do and making sure they're getting value and having the conversations they want, but also enabling the vendors, and the end users, and every constituent part to get something good out of this conference. It's a challenge as this gets bigger. There's no kind of, if this doubles again, will it feel the same? That's hard to imagine. So we got to think carefully about how-- >> We've seen that happen and it would not, even from last year to this year was a big change for a lot of people. >> For sure. >> So kube-hunter tell us about that. >> Yeah, kube-hunter, yes, kube-hunter is one of our open source projects at Aqua. It's basically penetration testing for kubernetes clusters, so it's written in Python. It attempts to make network requests looking for things like the open ports. It will tell you if you got some misconfigurations, 'cause a lot of the security issues with kubernetes can come about through poor configuration. And the other thing you can do, you can run it from externally to your cluster. You can also run it inside a pod inside your cluster and then that's simulating what might happen if an attacker got into your cluster, what could they do from there. They compromised a pod which could happen to a software vulnerability. Once they're in the pod, how vulnerable are you? What's the blast radius of that attack? And kube-hunter can help you see whether it's a complete disaster or actually fairly contained. >> Alright, Liz how are we doing from a security standpoint? We've watched the rise of containers over the last few years. And it's like okay wait do I need to put in some kind of lightweight VM? Do I do something there? What can I trust? What do I do? At AWS Reinvent a couple of weeks ago, there's the whole container marketplace. Feels like we are making progress but still plenty of work to do. >> Right, right, container security has lots of parts to it as you go through the life cycle of a container. Actually at AWS Reinvent, Aqua was recognized as having, I think they called it competency. Which I think it's a bit better than competency in container security. >> That's a complement I believe. >> Yeah, really complement, really competent. I think as community on the open source level, there are lots of good things happening. For example, the defaults in kubernetes have been getting better and better. If you are an enterprise, and particularly if you're a financial user, or a media company, or a government organization, you have much stronger requirements from a security perspective and that's where the open source tooling on its own may not be sufficient, and you may need to plug in commercial solutions like Aqua to really beef that up. And also to provide that end to end security right from when you're building your image through to the run time protection which is really powerful. >> Security has got to be built in from the beginning. Let me get your thoughts on end user traction and the huge demand for what end users are doing. I know you guys are seeing on the program side, the Linux foundation, CNC was talking about trying to get more case studies. We're seeing the end users prominent here. You mentioned Uber, Apple's here. A bunch of other companies, they're here. So end users are not only just contributing, they are also consuming. How are the new enterprises that are coming in consuming and interacting and engaging with kubernetes? Where are they on the IQ, if you will, level and what are they engaging on? Kubernetes has matured a bit and ready. It's been deployed, people using it. People gathering around it, but now people are starting to consume and deploy it at different scales. What's the end user uptake? What's the hot areas? What do you see the most people digging in? >> Great question, so I think we are seeing a lot of, particularly, I want to say like mature start-ups, so the Ubers and the Airbnbs and the Lyfts. They've got these massive scaled technology problems, and kubernetes is giving them, and the whole cloud-native community around it, it's giving them the ability to do these kind of custom things that they need to do. The kind of weird and wonderful things. They can add whatever adaptations they need, that maybe they wouldn't get if they were in a traditional architecture. So they're kind of the prominent voices that we are hearing right now. But at Aqua we are seeing some of these, maybe what you might call more traditional businesses like banks. They want to replicate that. They want to shape functionality really quickly. They are seeing challenges from upstart and they want to compete. So they know they've got to shift functionality quickly. They've got to do continuous deployment. Containers enable that. The whole cloud-native world enables that and that's where the adoption's from. >> They can take the blueprints from the people who built it from the ground up, the large scale startups, cloud-native in the beginning, and kind of apply the traditional IT kind of approach with the same tooling and the same platform. >> And we are seeing some interesting things around making that easier. So things like the CNAB, the cloud-native application bundling, that is coming out at Microsoft and Docker are involved in that. I think that's all to do with making it easier for enterprises to just go, yeah, this is the application I want to run it in the cloud. >> So let me ask you a question around the customer end users that we see coming onboard, because you have the upstream kind of community, the downstream benefits are impacting certainly IT and then developers, right? The classic developers, IT is starting to reimagine their infrastructure. All the goodness with cloud, and machine learning, and application is being redefined. It's changing the investment. So in 2019, what's your view on how companies are shaping their investment strategy to IT investment or technology investment strategies with cloud-native? Because this is a real trend that you just pointed out. Okay I'm a big company and I've used the old way and now I want the new way. So there's a lot of okay, instant start. Turn the key, does it run? There's a lot of managed services here, so the new persona of customer. How does that impact their investment, IT investments in your mind? What are you seeing please share any color commentary around that? >> I'm sure we're all aware that we're seeing shifts away from the traditional data center into public cloud which has implications around opex rather than capex. And I guess following on from that people worrying about whether vendor lock-in is a thing. Should they be just adopting in one public cloud or perhaps putting their eggs across different baskets? Should they be using these managed platforms? We have all these different distributions, we have these different managed solutions for kubernetes, there's a lot of choice out there. I think it's going to be interesting to see how that shapes out over the next few years. Are all these different distributions going to find a niche or how's that going to work? >> Matt Klein had a great observation. He was on earlier today from Lyft. He says look to solve a problem, use the tech to solve a problem, and then iterate, build on that. It's iteration mull of dev, ops. I think that's a good starting point. There's no magic silver bullet here. There's no magic answer, I think it's more of just get in there and get it going. The other question I have for you is 2019 prediction for kubernetes. What's going to happen this coming year? We're seeing this picture now, 8000 people, diverse audience. >> Yeah. >> What's the prediction 2019 for kubernetes? >> Oh, great question. I think maybe broader than just kubernetes, but the kind of cloud-native. Because kubernetes is like Janet said in her keynote this morning it's essentially boring. It kind of does what it's supposed to do now. I think what's going to be interesting is seeing those other pieces around it and above it, the improved developer experiences making it easier for companies to adopt. Maybe some of these choices around things like what service mesh you're going to use. How you're going to implement your observability. How you're going to deploy all this stuff without needing to hire 20 super detailed experts. We've got all the experts in this stuff. They're kind of here. The early adopters, great. Maybe that next wave, how are they going to be able to take advantage of this cloud-native? >> I think the programmability is key. Well great to have-- >> I think a big part of that is actually is going to be serverless. The ease of using serverless rather than the flexibility you get out of-- >> The millisecond latency around compute, yeah it's great. Well thanks for coming on, really appreciate it. Final question for you, what surprised you this year? Is there one thing that jumped out at you that you didn't expect? Good, bad or ugly? Great show here, it was packed. The waiting list was like 1500. What was the surprise this year from a program standpoint? >> I think actually the nicest surprise was the contribution of Phippy and all those lovely characters from Phippy Goes to the Zoo and those characters being donated by Microsoft, Matt Butcher and Karen Chu's work, was terrific. And it's just beautiful, just lovely. >> That's awesome, thanks so much Liz. Appreciate Liz right here. Program co-chair at KubeCon, CloudNativeCon, also technology evangelist at Aqua Security. That's her day job and her other job, she's running the content programming which is very huge here. Congratulations, I know it's tough work, a great job. >> Thank you very much. >> It's theCUBE coverage, breaking down all the action here at KubeCon and CloudNativeCon. I'm John Furrier and Stu Miniman, stay with us. Three days of wall-to-wall coverage. We're only on day two, we've got a whole nother day. A lot of great stories coming out of here and great content. Stay with us for more after this short break. (upbeat music)

>> Live from Las Vegas, it's theCUBE, covering AWS re:Invent 2018. Brought to you by Amazon Web Services, Intel, and their ecosystem partners. >> And welcome back to Las Vegas. We are at AWS re:Invent, along with Rebecca Knight, I'm John Walls. A lot of energy still behind us here. >> It's amazing. >> Have you noticed that? >> This is day three, people, wow. >> And again, I know a lot of you watching, you come to shows, you attend these things, and you realize that day three sometimes can be a little bit >> Sleepy, yeah. >> Slower, yeah. Not so here, this place is still very much alive. >> Sin City. >> Yeah. Easy, easy now. (group chuckles) We're joined by a couple of gentlemen right now to join us here, Prathap Dendi, who is the General Manager of Growth Initiatives and Commercialization at AppDynamics. Prathap, thank you for being with us. >> Oh, great to be here. >> And Emmanuel Offiong, who is Vice President of Enterprise at Wyndham Hotels. Emmanuel, now usually the conversation in here is, hey, how ya doin', where are you staying? We don't have to ask you that. (group chuckles) We know, right. >> Right. >> So you're good to go at Wyndham. So, first off, let's just talk about, I'd like to get your ideas, we've talked about the show, I mean, how do you feel? You're probably around here quite a bit, Prathap, at various shows and what have ya, your thoughts about what you're seeing here at AWS re:Invent 2018? >> For starters, I think you guys need at least 10 more Cubes because I've been watching the activity here. It's just, you know, crazy, right? A lot of high energy here, a lot of cloud stories, multi-cloud stories, really feed on that, a lot of innovation that's being announced here. >> Alright, and Emmanuel, we hear this a lot, right, customers who are making that big digital jump, you're making that leap, and, in some cases, it's a bit of a leap of faith, right, in some respects. Let's go back to before that, the genesis of your decision, what was the impetus and what were your reservations, and what are your reservations still, for that matter, going forward? >> Sure, so I actually joined Wyndham about three years ago when we were trying to undertake this digital journey, and what we realized was that there was a lot of competition with our online travel agents, and we weren't really bringing in customers the way we thought we could, and so we realized that our digital platforms were antiquated. They weren't speaking to our customers in terms of increased loyalty and such, and so we knew that we had to make a change. We knew that in today's economy, in order to attract customers, we had to be more digital friendly. We had to provide a seamless experience, and we had to make sure that, on all of our platforms, that customers were able to check-in and check-out on their mobile platforms very easily. >> You mentioned online travel agents, but just talk a little bit about this era of hoteling. Has it become so much more competitive, particularly with the rise of Airbnb and other VRBOs? >> It has, it really has, so the Expedias, the Airbnbs of the world, they've really embraced technology, more so than maybe the traditional hospitality companies have, and so that's why you'll see companies like ourselves starting to make investments in technology, making investments into digital transformation. >> So you have your aha moment, we need to move forward, we need a digital transformation so you begin to look for partners. What were you looking for? >> Couple of things, so we were looking at transformation on three levels, for digital, infrastructure management, and data, and so, in terms of a partner, what we wanted to do is we were looking for someone to help us ease that journey. We knew the journey was going to be rough, especially from where we started, so we were looking for a partner like AWS that was going to help us sort of make that scale into modern-day technology very quickly. >> Alright, so when you talk about a digital journey, I just want to back up a little bit. What exactly does that encompass in your case? I mean, I'm thinking you've got your website, you've got your reservation, you know, you've got all these microservices running on your site, you know, it's all good, it's all fine. What weren't you doing specifically germane to your business that AppDynamics is now getting you back up to speed and getting you into the 21st century, if you will? >> Sure, so let me give you some context then. When we talk about customers, we talk about two sets of customers. There are guests who walk in through the door, and then there are franchisees. We're a franchise-based company so let's speak to our guests. In regards to our guests, our check-in/check-out process wasn't as seamless as it could be, right. It wasn't very mobile friendly at the time so those were the things that we were looking to change, and in regards to our franchisees, their ultimate goal is they want to be able to check revenue. They want to be able to check rates, change rates. They want to be able to see what their competitors are doing, and they want to be able to do that very seamlessly and on a mobile platform, and we didn't have those capabilities available to them at the time. >> If I may say something? >> Please. >> It's interesting when we see leaders like Emmanuel talk about digital transformation, they're not talking about I.T. transformation, they're not talking about servers going away, infrastructure. It's really refreshing to see customers talk about business model changes. What I see, you know, Scott and Emmanuel, their team has done a great job about focusing on what is it about the business model that needs to change, and really getting that end-user experience journey, like you asked, right from the time they log-in to requesting a service or changing some reservation, all of that is what they're capturing, and it's really complex, and I know he's quite humble to say, oh, we've done it at scale, but this is hard stuff, to make it simple for the end-user passes the complexity down to the systems, and that's what the team at Wyndham was able to do and we're lucky, AppDynamics, to be part of that journey that monitors the end-to-end performance of the end-user journeys, and then importantly correlate that to business outcomes. You know, do we actually have more partners coming in? Is the full journey faster now, now that we've gone to AWS, is it really impacting the business or is it just I.T. spin? So that's really a good caller to see that digital transformation is really a business model change not just an I.T. change. >> So the business model, so walk us through exactly what you did for this transformation and this cloud migration too. >> Sure, so the first step was realizing that we had to start to migrate some workloads to the cloud, and the reason why we knew we had to go to the cloud was, like I said before, we wanted to get out of the business of managing infrastructure, right, so we said we're going to take our workloads to the cloud. Well, going to the cloud, especially with the type of workloads we were looking at, is often a very complicated and complex adventure, and that's where AppDynamics came in for us, right. We knew we needed something that was going to allow us to see end to end where we started from, and when we migrate to the cloud, have that same level of visibility to ensure that we didn't do two things, right. We're protecting the brand, and we want to make sure we protect our customer experience. Those are the two things that were most important to us as a part of this journey. >> From a security standpoint, huge concern, right? I mean, it has been for a while, but when you go public and what exposure there might be, how have you two kind of dealt with that because, obviously, you're dealing with financial information, with customer information, there's a lot of proprietary stuff that you're getting from your folks that you have to protect, and, obviously, internally as well. So talk about the security component. >> Yeah, happy to go first. It used to be just about five, six years ago, application was seen as a separate silo or a separate layer, and security was different and experience was different. What we're now seeing is every business function is getting really melded into that one concept of end-user experience so security becomes, not an afterthought, but actually is part of the design construct, right, and what we've seen with customers like Wyndham is they have gotten so much better at measuring right from the click stream of from reservation to fulfillment, and looking for anomalies in that data, right, so security correlation to the application data is out of the box now so that's the pre-design for architecture groups like Emmanuel's. >> Sure, yeah, so I (chuckles) I think you said it very well. >> I'll say what he said, right? (group chuckles) >> Well, when you're thinking about this migration, which began in, when did this journey begin? >> Couple years ago. >> Couple of years ago. So, now, was there resistance to it? As you said, you were really at this tipping point where you said we got to do something different here. We've got a lot of different competition coming at us from different angles. >> Yeah, so there was some level of internal concern, I would say, but we worked through that, right. It's really about, at the end of the day, we migrated 8,400 hotels across 18 brands onto this new platform, right, so it's not insignificant so you can imagine, right, the amount of internal conversations that needed to happen to get something like that accomplished. >> And what haven't you done? Obviously, this is a multi-year process. You can't snap your fingers and it's going to be done. I assume you're in a still a nascent stage of this, and you have much more work to do. >> Yep, now we're focused on data, right. Now, we're focused on grabbing insights from the data that we've put into the cloud. We've migrated most of what we were looking to migrate over the last two years, if you will, and now we're lookin' at how do we get more insights from the data that's available to us? >> Alright, and is that something that your company can play with as well? >> And Amazon and AWS themselves so I think over the years what I've seen, you know, I've been an engineer in this career, now in the business side, you co-system around application stack has gotten so transparent, right, so customers like Wyndham are able to purchase best of breed solutions like AppDynamics on AWS marketplace, click of a button. There's no long cycles of value so you quickly get to the value, and then once the journey starts, it's really all about the customer. They're generating trillions of data set every day across their business. Our goal is to see how can we bubble up the impact of that investment to their line of business? How quickly are the customers getting on board, making their decisions versus having to worry about the servers and the infrastructure. That's what we're seeing in a big way. >> Well, and as you said before, this is a business model change. It wasn't just a technology change so how have your customers seen this? How are they reacting? What are your franchisees seeing? How has the business changed? >> From our perspective, the customers love it, and we can measure that in terms of our bookings. We're up 75% in terms of mobile bookings as a result of some of these changes that we've made. Our customers have given us feedback that the experience is much more seamless. Our franchisees have given us feedback that, you know what, it's easier to use our services. >> Yeah, all I want is the best rate. (group laughs) Just give me the best rate, Emmanuel, alright, and I'm a happy camper. >> The statistic that he shared is phenomenal, right, being able to see 75% jump in mobile booking is significant. >> That's extraordinary. >> That's real ROI. >> Yeah, and there are others too. Scott, their CIO, recently wrote in a blog about how and why the CIOs are sleeping better, right. They're actually getting sleep back, and I think that's really the result of the transformation where systems like AppDynamics, systems like applications they wrote, they'll become a lot more seamless now, and being able to show, when I invest a dollar into an application, how is that yielding to line of business, real time is what they have as power now. >> The boss is happy. >> Yeah. >> Yes. >> Well, if they're sleeping well, we're all sleeping well. I know how that goes. Gentlemen, thanks for sharing this story. >> Thank you. >> Thank you, thank you for having us. >> Appreciate your time here. >> Appreciate it. >> Appreciate it. >> You bet, back with more here from AWS re:Invent. You're watching this live from Las Vegas, and we're on theCUBE. (techno music)

(lively orchestral music) >> Hello, everyone. Welcome to this special CUBE Conversation. We're here in Palo Alto, California, theCUBE headquarters. I'm John Furrier, the cofounder of SiliconANGLE Media, cohost of theCUBE. We're here with fellow cloud influencer, friend of theCUBE, Sarbjeet Johal, who's always on Twitter. If you check out my Twitter stream, you'll find out we've always got some threads. He's always jumping in the CrowdChat and I think was in the leaderboard for our last CrowdChat on multi-cloud Kubernetes. Thanks for coming in. >> Yeah, thank you for having me here. >> Thanks for coming in. So you're very prolific on Twitter. We love the conversations. We're gettin' a lot of energy around some of the narratives that have been flowing around, obviously helped this week by the big news of IBM acquiring Red Hat for, what was it, 30, what was the number, 34? >> 34, yeah. >> $34 billion, huge premium, essentially changing the game in open source, some think, some don't, but it begs the question, you know, cloud obviously is relevant. Ginni Rometty, the CEO of IBM, actually now saying cloud is where it's at, 20% have been on the cloud, 80% have not yet moved over there, trillion-dollar market which we called, actually, I called, a few years ago when I wrote my Forbes story about Amazon, the Trillion Dollar Baby I called it. This is real. >> Yeah. So apps are moving to the cloud, value for businesses on the cloud, people are seeing accelerated timelines for shipping. Software. >> Yeah. >> Software offer is eating the world. Cloud is eating software, and data's at the center of it. So I want to get your thoughts on this, because I know that you've been talking a lot about technical debt, you know, the role of developer, cloud migration. The reality is, this is not easy. If you're doin' cloud native, it's pretty easy. >> Still pretty easy, yeah. >> If that's all you got, right, so if you're a startup and/or built on the cloud, you really got the wind at your back, and it's lookin' really good. >> Yeah. >> If you're not born in the cloud, you're an IT shop, they've been consolidating for years, and now told to jump to a competitive advantage, you literally got to make a pivot overnight. >> Yeah, actually, at high level, I think cloud consumption you can divide into two buckets, right? One is the greenfield which, as you said, it's not slam dunk, all these startups are born in cloud, and all these new projects, systems of innovation what I usually refer to those, are born in cloud, and they are operated in cloud, and at some point they will sort of fade away or die in cloud, but the hard part is the legacy applications sitting in the enterprise, right? So those are the trillion dollar sort of what IBM folks are talking about. That's a messy problem to tackle. Within that, actually, there are some low-hanging fruits. Of course, we can move those workloads to the cloud. I usually don't refer the application, the workloads as applications because people are sort of religiously attached to the applications. They feel like it's their babies, right? >> Yeah. >> So I usually say workload, so some workloads are ripe for the cloud. It's data mining, BI, and also the AI part of it, right? So but some other workloads which are not right for the cloud right now or they're hard to move or the ERP system, systems of record and systems of engagement or what we call CRMs and marketing sort of applications which are legacy ones. >> Yeah, hard-coded operationalized software frameworks and packages and vendors like Oracle. >> Yes. >> They're entrenched. >> Oracle SAP, and there's so many other software vendors that have provided tons of software to the data centers that they're sitting there, and the hard part is that nobody wants to pull the plug on the existing applications. I've seen that time and again. I have done, my team has done more than 100 data center audits from EMC and VMware days. We have seen that time and again. Nobody wants to pull the plug on the application. >> 'Cause they're runnin' in production! (laughs) >> They are running in production. And it's hard to measure the usage of those applications, also, that's a hard part of the sort of old stack, if you will. >> Yeah. So the reality is, this is kind of getting to the heart of what we wanted to talk about which is, you know, vendor hype and market realities. >> Yeah. >> The market reality is, you can't unplug legacy apps overnight, but you got a nice thing called containers and Kubernetes emerging, that's nice. >> Yeah. >> Okay, so check, I love that, but still, the reality is, is okay, then who does it? >> Yeah. >> Do I add more complexity? We just had Jerry Chen and hot startup Rockset on, they're trying to reduce the complexity by just having a more simple approach. This is a hard architectural challenge. >> It is. >> So that's one fundamental thing I want to discuss with you. And then there's the practical nature of saying assuming you get the architecture right, migrating and operating. Let's take those as separate, let's talk architecture, then we'll talk operating and migrating. >> Okay. >> Architecturally, what do people do, what are people doing, what you're seeing, what do you think is the right architecture for cloud architects, because that's a booming position. >> Yeah. >> There's more and more cloud architects out there, and the openings for cloud architects is massive. >> Yeah, I think in architecture, the microservices are on the rise. There are enabling technologies behind it. It doesn't happen sort of magically overnight. We have had some open source sort of development in that area the, the RESTful APIs actually gave the ports to the microservices. Now we can easily inter-operate between applications, right? So and our sort of, sorry I'm blanking out, so our way to divide the compute at the sort of micro-chunks from VM, virtual machine, to the container to the next level is the serverless, right? So that is giving ports to the microservices, and the integration technologies are improving at the same time. The problem of SEL lies in the data, which is the storage part and the data part and the network, and the network is closely associated with security. So security and network are two messy parts. They are in the architecture, even in the pure cloud architecture in the Kubernete world, those are two sort of hard parts. And Cisco is trying to address the network part. I speak, I spoke to some folks there, and what they are doing in that space, they are addressing the network and SCODI part, sort of deepening-- >> And it's a good time for them to do that. >> Yeah. >> Because, I mean, you go back, and you know, we covered DevNet Create, which is Susie Wee, she's a rising star at Cisco, and now she's running all of DevNet. So the developer network within Cisco's has a renaissance because, you know, you go back 20 years ago, if you were a network guy, you ran the show, I mean, everything ran the network. The network was everything. The network dictated what would happen. Then it kind of went through a funk of like now cloud native's hot and serverless, but now that programability's hitting the network because remember the holy trinity of transformation is compute, storage, and networking. (laughs) >> Yeah. >> Those aren't going away. >> Yeah, they aren't going away. >> Right, so networking now is seeing some, you know, revitalization because you can program it, you can automate it, you can throw DevOps to it. This is kind of changing the game a little bit. So I'm intrigued by the whole network piece of it because if you can automate some network with containers and Kubernetes and, say, service meshes, then it's become programmable, then you can do the automation, then it's infrastructure, it's code. >> Yeah, exactly. >> Infrastructure is code. It has to cover all three of those things. >> That is true, and another aspect is that we talk about multi-cloud all the time, which Cisco is focusing on also, like IBM, like VMware, like many other players who talk about multi-cloud, but problem with the multi-cloud right now is that you cannot take your security policies from one cloud provider to another and then just say, okay, just run there, right? So you can do the compute easy, containers, right, or Kubernetes are there, but you can't take the network as is, you cannot, you can still take the storage but not storage policies, so the policy-driven computing is still not there. >> Yeah. >> So we need, I think, more innovation in that area. >> Yeah, there's some technical issues. I talk a lot of startups, and they're jumpin' around from Azure to Amazon, and everyone comes back to Amazon because they say, and I'm not going to name names, but I'll just categorically say with what's going on is when they get to Microsoft and Oracle and IBM, the old kind of guards is they come in and they find that they check the boxes on the literature, oh, they do this, that, and that, but it's really just a lot of reverse proxies, there's a lot of homegrown stuff in there-- >> Yeah. >> That are making it work and hang together but not purely built from the ground up. >> Exactly, yeah, so they're actually sort of re-bottling the old sort of champagne kind of stuff, like they re-label old stuff and put layers of abstraction on top of it and that's why we're having those problems with the sort of legacy vendors. >> So let's get into some of the things that I know you're talking about a lot on Twitter, we're engaging on with with the community is migration, and so I want to kind of put a context to the questions so we can riff together on it. Let's just say that you and I were hired by the the CIO of a huge enterprise, financial services, pick your vertical. >> Yeah. >> Hey, Sarbjeet and John, fix my problems, and they give us the keys to the kingdom, bag of money, whatever it takes, go make it happen. What do we do, what's the first things that we do? Because they got a legacy, we know what it looks like, you got the networks, you're racking stack, top-of-rack switches, you got perimeter-based security. We got to go in and kind of level the playing field. What's our strategy, what do we what do we recommend? >> Yeah, the first thing first, right? So first, we need to know the drivers for the migration, right, what is it? Is it a cost-cutting, is it the agility, is it mergers and acquisitions? So what are the, what is the main driver? So that knowing that actually will help us like divvy up the problem, actually divide it up. The next thing, the next best practice is, I always suggest, I've done quite a few migrations, is that do the application portfolio analysis first. You want to find that low-hanging fruit which can be moved to the cloud first. The reason, main reason behind that is that your people and processes need to ease into using the cloud. I use consumption term a lot, actually on Twitter you see that, so I'm a big fan of consumption economics. So your people and processes need to adapt, like your change control, change management, ITSM, the old stuff still is valid, actually. We're giving it a new name, but those problems don't go away, right? How you log a ticket, how you how the support will react and all that stuff, so it needs to map to the cloud. SLA is another less talked about topic in our circles on Twitter, and our industry partners don't talk about, but that's another interesting part. Like what are the SLAs needed for, which applications and so forth. So first do the application profiling, find the low-hanging fruit. Go slow in the beginning, create the phases, like phase one, phase two, phase three, phase four. And it also depends number, on the number of applications, right? IBM folks were talking about that thousand average number of applications per enterprise. I think it's more than thousand, I've seen it. And that, just divvy up the problem. And then another best practice I've learned is migrate as is, do not transform and migrate, because then you're at, if something is not working over there or the performance problem or any latency problem, you will blame it on your newer architecture, if you will. Move as is, then then transform over there. And if you want me to elaborate a little more on the transformation part, I usually divide transformation into three buckets, actually this is what I tell the CIOs and CTOs and CEOs, that transformation is of three types. Well, after you move, transformation, first it is the infrastructure-led transformation. You can do the platforming and go from Windows to Linux and Linux to AIX and all that stuff, like you can go from VM to container kind of stuff, right? And the second is a process-led transformation, which is that you change your change control, change management, policy-driven computing, if you will, so you create automation there. The third thing is the application where you open the hood of the application and refactor the code and do the Web service enablement of your application so that you can weave in the systems of innovation and plug those into the existing application. So you want to open your application. That's the whole idea behind all this sort of transformation is your applications are open so you can bring in the data and take out the data as you weave. >> From your conversations and analysis, how does cloud, once migrations happen in cloud operations, how does that impact traditional network, network architecture, network security, and application performance? >> On the network side, actually, how does it, let me ask you a question, what do you mean by how does it-- >> In the old days, used a provisional VLAN. >> The older stuff? >> So I got networks out there, I got a big enterprise, okay, we know how to run the networks, but now I'm movin' to the cloud. >> Yeah. >> I'm off premises, I'm on premise, now I'm in the cloud. >> Yeah. >> How do I think about the network's differently? Whose provisioning the subnets, who's doing the VPNs? You know, where's the policy, all these policy-based things that we're startin' to see at Kubernetes. >> Yeah. >> They were traditionally like networks stuff-- >> You knew what it was. >> That's now happening at the microservices level. >> Yeah. >> So new paradigm. >> The new paradigm, actually, the whole idea is that your network folks, your storage folks, your server folks, like what they were used to be in-house, they need to be able to program, right? That's the number one thing. So you need to retrain your workforce, right? If you don't have the, you cannot retrain people overnight, and then you bring in some folks who know how to program networks and then bring those in. There's a big misconception about, from people, that the service, sorry, the service provider, which is called cloud service provider, is it responsible for the security of your applications or for the network, sort of segmentation of your network. They are not, actually, they don't have any liability over security if you read the SLAs. It's your responsibility to have the sort of right firewalling, right checks and balances in place for the network for storage, for compute, right policies in place. It's your responsibility. >> So let's talk about the, some tweets you've been doin' 'cause I've been wanting to pull the ones that I like. You tweeted a couple days ago, we don't know how to recycle failed startups. >> Yeah. (chuckles) >> Okay, and I said open source. And you picked up and brought up another image, is open source a dumping ground for failed startups? And it was interesting because what I love about open source is, in the old days of proprietary software, if the company went under, the code went under with it, but at least now, with open source, at least something can survive. But you bring up this dumping concept, that also came up in an interview earlier today with another guest which was with all this contribution coming in from vendors, it's almost like there's a dumping going on into open source in general, and you can't miss a beat without five new announcements per day that's, you know, someone's contributing their software from this project or a failed, even failed startup, you know, last hope, let's open source it. Is that good or bad, I mean, what's your take on that, what was your posture or thinking around this conversation? It is good, is it bad? >> Yeah, I believe it's, it's a economic problem, economics thing, right? So when somebody's like proprietary model doesn't work, they say, okay, let me see if this works, right? Actually, they always go first with like, okay let me sell-- >> Make money. >> Let me make money, right? A higher margin, right, everybody loves that, right? But then, if they cannot penetrate the market, they say, okay, let me make it open source, right? And then I will get the money from the support, or my own distro, like, distros are a big like open source killer, I said that a few times. Like the vendor-specific distributions of open source, they kill open source like nothing else does. Because I was at Rackspace when we open-sourced OpenStack, and I saw what happened to OpenStack. It was like eye-opening, so everybody kind of hijacked OpenStack and started putting their own sort of flavors in place. >> Yeah, yeah, we saw the outcome of that. >> Yeah. >> It niched into infrastructures of service, kind of has a special purpose-built view. >> And when I-- >> And that it comes cloud native didn't help either. Cloud grew at that time, too, talking about the 2008 timeframe. >> Yeah, yeah, and exactly. And another, why I said that was, it was in a different context, actually, I invested some money into an incubator in Berkeley, The Batchery, so we have taken what, 70-plus startups through that program so far, and I've seen that pattern there. So I will interview the people who want to bring their startup to our incubator and all that, and then after, most of them fail, right? >> Yeah. >> They kind of fade away or they leave, they definitely leave our incubator after a certain number of weeks, but then you see like what happens to them, and now also living in the Valley, you can't avoid it. I worked with 500 Startups a little bit and used to go to their demo days from the Rackspace days because we used to have a deal with them, a marketing deal, so the pattern I saw that was, there's a lot of innovation, there was a lot of brain power in these startups that we don't know what, these people just fade away. We don't have a mechanism to say, okay, hey you are doing this, and we are also doing similar stuff, we are a little more successful than, let's merge these two things and make it work. So we don't know how to recycle the startups. So that's what was on it. >> It's almost a personal network of intellectual capital. >> Yeah. >> Kind of, there needs to be a new way to network in the IP that's in people's heads. Or in this case, if it's open source, that's easy there, too, so being inaccessible. >> So there's no startup, there's no Internet of startups, if you will. >> Yeah, so there's no-- >> Hey, you start a CUBE group. (Sarbjeet laughing) You'll do it, start a CrowdChat. All right, I want to ask you about this consumption economics. >> Yeah. >> I like this concept. Can you take a minute to explain what you mean by consumption economics? You said you're all over it. I know you talk a lot about it on Twitter. >> Yes. >> What is it about, why is it important? >> Actually, the pattern I've seen in tech industry for last 25, 24 years in Silicon Valley, so the pattern I've seen is that everybody focuses on the supply side, like we do this, we like, we're going to change the way you work and all that stuff, but people usually do not focus on the consumption side of things, like people are consuming things. I'm a great fan of a theory called Jobs to Be Done theory. If you get a time, take a look at that. So what jobs people are trying to do and how you can solve that problem. Actually, if you approach your products, services from that angle, that goes a long way. Another aspect I talk about, the consumption economics, is age of micro-consumption, and again, there are reasons behind it. The main reason is there's so much thrown at us individually and and also enterprise-wise, like so much technology is thrown at us, if we try to batch, like if were ready to say, okay, we're not going to consume the technology now, and we're going to do every six months, like we're going to release every six months, or new software or new packages, and also at the same time, we will consume every six months, that doesn't work. So the whole notion when I talk about the micro-consumption is that you keep bringing the change in micro-chunks. And I think AWS has mastered the game of micro-supply, as a micro-supplier of that micro-change. >> Yeah. >> If you will. So they release-- >> And by the way, they're very customer-centric, so listening to the demand side. >> Exactly. So they kind of walk hand in hand with the customer in a way that customer wants this, so they're needing this, so let us release it. They don't wait for like old traditional model of like, okay, every year there's a new big release and there are service packs and patches and all that stuff, even though other vendors have moved along the industry. But they still have longer cycles, they still release like 10 things at a time. I think that doesn't work. So you have to give, as a supplier, to the masses of the workers of the world in HPs and IBMs, give the change in smaller chunks, don't give them monolithic. When you're marketing your stuff, even marketing message should be in micro-chunks, like or even if you created like five sort of features and sort of, let's, say in Watson, right, just give them one at a time. Be developer-friendly because developers are the people who will consume that stuff. >> Yeah, and then making it more supply, less supply side but micro-chunks or microservices or micro-supply. >> Yeah. >> Having a developer piece also plays well because they're also ones who can help assemble the micro, it's in a LEGO model of composeability. >> Yeah, exactly. >> And so I think that's definitely right. The other thing I wanted to get your thoughts on is validated by Jerry Chen at Greylock and his hot startups and a few others is my notion of stack overhaul. The changes in the stack are significant. I tweeted, and you commented on it, on the Red Hat IBM deal 'cause they were talkin' about, oh, the IBM stack is going to be everywhere, and they're talking about the IBM stack and the old full-stack developer model, but if you look at the consumption economics, you look at horizontally scalable cloud, native serverless and all those things goin' on with Kubernetes, the trend is a complete radical shifting of the stack where now the standardization is the horizontally scalable, and then the differentiations at the top of the stack, so the stack has tweaked and torqued it a little bit. >> Yeah. >> And so this is going to change a lot. Your thoughts and reaction to that concept of stack, not a complete, you know, radical wholesale change, but a tweak. >> Actually our CTO at Rackspace, John Engates, gave us a sort of speech at one of the kind of conferences here in Bay Area, the title of that was Stack, What Stack, right? So the point he was trying to make was like stack is like, we are not in the blue stack, red stack anymore, so we are a cross-stack, actually. There are a lot of the sort of small LEGO pieces, we're trying to put those together. And again, the reason behind that is because there's some enabling technology like Web services in RESTful APIs, so those have enabled us to-- >> And new kinds of glue layers, if you will. >> Yeah, yeah. >> Abstraction layers. >> Yeah, I call it digital glue. There's a new type of digital glue, and now we have, we are seeing the emergence of low code, no code sort of paradigms coming into the play, which is a long debate in itself. So they are changing the stack altogether. So everything is becoming kind of lightweight, if you will, again-- >> And more the level of granularity is getting, you know, thinner and thinner, not macro. So you know, macroservices doesn't exist. That was my, I think, my tweet, you know, macroservices or microservices? >> Yeah. >> Which one you think's better? And we know what's happening with microservices. That is the trend. >> That is the trend. >> So that is that antithesis of macro. >> Yeah. >> Or monolithic. >> Yeah, so there's a saying in tech, actually I will rephrase it, I don't know exactly how that is, so we actually tend to overestimate the impact of a technology in the short run and underestimate in the long term, right? So there's a famous saying somebody, said that, and that's, I think that's so true. What we actually wanted to do after the dot-com bust was the object-oriented, like the sort of black box services, it as, we called them Web services back then, right? >> Yeah. >> There were books written by IBM-- >> Service-oriented architecture-- >> Yeah, SOA. >> Web services, RSS came out of that. >> Yes. >> I mean, a lot of good things that are actually in part of what the vision is happening today. >> It's happening now actually, it just happening today. And mobile has changed everything, I believe, not only on the consumer side, even on the economic side. >> I mean, that's literally 16, 17 years later. >> Yes, exactly, it took that long. >> It's the gestation period. >> Yes. >> Bitcoin 10 years ago yesterday, the white paper was built. >> Yeah. >> So the acceleration's certainly happening. I know you're big fan of blockchain, you've been tweeting about it lately. Thoughts on blockchain, what's your view on blockchain? Real, going to have a big impact? >> I think it will have huge impact, actually. I've been studying on it, actually. I was light on it, now I'm a little bit, I'm reading on it this and I understand. I've talked to people who are doing this work. I think it will have a huge impact, actually. The problem right now with blockchain is that, the speed, right? >> It's slow, yeah. So yeah, it's very slow, doc slow, if you will. But I think that is a technical problem, we can solve that. There's no sort of functional problem with the blockchain. Actually, it's a beautiful thing. Another aspect which come into play is the data sovereignty. So blockchains actually are replicated throughout the world if you want the worldwide money exchange and all that kind of stuff going around. We will need to address that because the data in Switzerland needs to sit there, and data in the U.S. needs to stay in the U.S. That blockchain actually kind of, it doesn't do that. You have a copy of the same data everywhere. >> Yeah, I mean, you talk about digital software to find money, software to find data center. I mean, it's all digital. I mean, someone once said whatever gets digitized grows exponentially. (Sarbjeet laughing) Oh, that was you! >> Actually I-- >> On October 30th. >> That was, that came from a book, actually. It's called Exponential Organizations. Actually, they're two great books I will recommend for everybody to read, actually there's a third one also. So (laughs) the two are, one is Exponential Organizations. It's a pretty thin book, you should take, pick it up. And it talks about like whatever get digitized grows exponentially, but our organizations are not, like geared towards handling that exponential growth. And the other one is Consumption Economics. The title of the book is Consumption Economics, actually. I saw that book after I started talking about it, consumption economics myself. I'm an economics major, actually, so that's why I talk about that kind of stuff and those kind comments, so. >> Well, and I think one of the things, I mean, we've talked about this privately when we've seen each other at some of theCUBE events, I think economics, the chief economic officer role will be a title that will be as powerful as a CSO, chief security officer, because consumption economics, token economics which is the crypto kind of dynamic of gamification or network effects, you got economics in cloud, you got all kinds of new dynamics that are now instrumented that need, that are, they're throwin' off numbers. So there's math behind things, whether it's cryptocurrency, whether it's math behind reputation, or any anything. >> Yeah. >> Math is driving everything, machine learning, heavy math-oriented algorithms. >> Yeah, actually at the end of the day, economics matters, right? That's what we are all trying to do, right? We're trying to do things faster cheaper, right? That's what automation is all about. >> And simplifying, too. >> And simplifying service. >> You can't throw complexity in, more complexity. >> Yeah. >> That's exponential complexity. >> Sometimes while we are trying to simplify things, and I also said, like many times the tech is like medicine, right? I've said that many times. (laughs) Tech is like medicine, every pill has a side effect. Sometimes when we are trying to simplify stuff, we add more complexity, so. >> Yeah. What's worse, the pain or the side effects? Pick your thing. >> Yeah, you pick your thing. And your goal is to sort of reduce the side effects. They will be there, they will be there. And what is digital transformation? It's all about business. It's not, less about technology, technology's a small piece of that. It's more about business models, right? So we're trying to, when we talk about micro-consumption and the sharing economy, they're kind of similar concepts, right? So Ubers of the world and Airbnbs all over the world, so those new business models have been enabled by technology, and we want to to replicate that with the medicine, with the, I guess, education, autos, and you name it. >> So we obviously believe in microcontent at theCUBE. We've got the Clipper tool, the search engine. >> I love that. >> So the CUBEnomics. It's a book that we should be getting on right away. >> Yeah, we should do that! >> CUBEnomics. >> CUBEnomics, yeah. >> The economics behind theCUBE interviews. Sarbjeet, thank you for coming on. Great to see you, and thank you for your participation-- >> Thanks, John. >> And engagement online in our digital community. We love chatting with you and always great to see you, and let's talk more about economics and digital exponential growth. It's certainly happening. Thanks for coming in, appreciate it. >> It was great having, being here, actually. >> All right, the CUBE Conversation, here in Palo Alto Studios here for theCUBE headquarters. I'm John Furrier, thanks for watching. (lively orchestral music)

(techno music) >> Announcer: Live from Las Vegas, it's theCUBE. Covering Dell Technologies World 2018. Brought to you by Dell EMC and its Ecosystem Partners. >> Welcome to Las Vegas everybody. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante, and I'm here with Stu Miniman and this is the inaugural Dell Technologies World and Pat Gelsinger's here, he's the- >> Hey, great to be with you today, >> Dave: the CEO of VMware, awesome to see you, >> Oh, thank you. >> Our number one guest of all time, this is our ninth Dell/EMC World and your 900th CUBE interview, But it never gets old Pat. It's really a pleasure to see you. >> Oh it's always fun to be with you guys. Thank you for the chance to spend some time on theCUBE, you've come a long way. >> So, thank you for noticing! So, you were the first, and people are recognizing this, to really sort of call the boom in the data center. We certainly have seen it with cloud, and we saw a little bit with data and big data, and now digital transformation, but well over a year ago, you said, we have tailwinds, it just feels right, so good call. >> Yeah, hey thank you, and you know clearly like the IDCs, Gartners, you know, they began last year, 2% to 3% growth, I said no, I think it's at least 2x that, and we ended of the year almost 6% growth in IT, and everybody's raised their forecast, and I think they're still a little bit conservative, and I think in this period, where technology is becoming more pervasive in everything, every business is becoming a tech business, every area of every business is becoming influenced by tech, and as a result, hey I think we're going to see a long run of tech strength and every company in tech is going to benefit and those that are well-positioned are going to benefit in a big way. >> Yeah, you see, you called it, "tech is breaking out of tech" >> Yep, yep absolutely, right, you know, we're no longer that little IT thing stuck in the back corner making sure your mail runs, it's now everything. You know, back office has become front office, right. You know, every aspect of data becomes mission-critical for the business. As some have called it, you know, data is the new oil, right, in the future. And it really is thrilling to see some of our customers, and Michael had a few on stage this morning doing really pretty cool things. >> Well VMware is on fire. I mean, it's only 10% of Dell's revenue, but it's half, it generates half of its operating cash flow. Obviously we love the software business, of course. Talk about your business, the core is doing really well, you got NSX crankin', vSAN cranking, the cloud now, there's Clarity in cloud, give us the overview of your business and give us the update. >> Sure, and as I say, you know, there's three reasons we're doing well. You know, one is our strategy is resonating with customers, and you know, when you got strategic resonance with customers, you're not in the purchasing department, you're in the business units, the CIO's office. So strategy is resonating well, across what we do for private cloud, what we're doing for public cloud, what we're doing for end user and workforce transformation, our security strategy, every aspect is resonating. You know, second, we're executing well. And I'll say, you know, your good strategy, you're executing it well, and you know, clearly the Dell momentum has helped us. We're ahead of schedules on the synergies that we've laid out, and that's been a powerful accelerant. It was like we're doing well, you know, and you put some turbochargers on, whoa, you know this is going, and then finally as we said, it's a good market, right. And well-positioned tech companies are benefiting from that. So across our product families, you know, NSX, vSAN, and HCI, you know, our cloud management is really performing, the end user computing, you know, all of these seeing, you know 30, 50, 100 percent growth rates. You know, my overall cloud business, you know, VMware is growing in the teens you know, my cloud business is growing in the 30s, and way ahead of the growth rate of the business, so pretty much everything that we've laid out is firing on all cylinders. >> Pat, I think most people understand some of the products of VMware. I think it's, you know, 20 years now, since server virtualization laws You've, you know great momentum with NSX with vSAN, wonder if you could talk a little bit about the digital platform though, you know how does VMware look, you know, for the next five to 10 years, fit into the Vision 2030 like Michael was talking about. >> Yeah, yeah, you know very much, you know, as I say, you know, our objective is to be the essential, ubiquitous, digital infrastructure, right. Where you know, this idea, you know, essential. You know we run this mission critical stuff and increasingly we're seeing businesses put their crown jewels running on VMware. You know, 'cause we ran a lot of the stuff of the past, we'd run your SharePoints, your Outlooks, and so on, but now, they're putting core banking on us, you know, core transactional platform. They just say, you are essential, ubiquitous, our strategy is to move all the way to the edge, and the IOT use cases, into the core networks of our service provider partners, You know, to as I say, build these four clouds, the private cloud, the public cloud, the telco cloud, and the NF or the IOT cloud. All of those on a common infrastructure, that enables applications to build on and leverage all of the above. So you know, we're increasingly ubiquitous, digital infrastructure, meaning that they can build their applications from the past as well as in the future on us. And as we're partnering with Pivotal with our PKS strategy, reaching more to the developer, right, and delivering that infrastructure for the next-generation apps, and of course the dirty secret is, is that almost all of the cool new apps are some ugly combination of new and old. And if we can give a common operational security management and automation environment that transcends their cool new container, and function as a service, but combine it, in a consistent operational and security environment with today's infrastructure, oh, that's like the big easy button for IT. Got it, we could take you to the future, without giving up the past. >> We hear from our, you know, CXOs, in our community, in our audience, they really, they want to get digital right. So my question to you is, what kind of conversations are you having with executives around getting digital right? >> Uh-huh, yeah, and lots of those things are, you know, like just with a big media company, was with a huge Bank, on the phone with a big consumer goods product last week. You know these interactions occurring, you know like you say they want to get it right. And with it we're seeing the conversation shift, because a lot of it used to be, you know best of breed. Oh that looks good, and I'll stitch it together with this, and maybe I'll put it that, and a lot of their bandwidth was being put to putting the pieces together, and we're saying no, right. What you going to do is have robust infrastructure. Increasingly rely on fewer, more strategic vendors. It's my job to put it together, so you can take your investments and put them into the applications and services that really differentiate your business. And this is becoming a sea change in how we work with customers and say, okay, yeah I can't stitch all these pieces together, I can't have a hundred security vendors, I must rely on fewer vendors, in much more strategic ways. And in that, obviously we're benefiting from that enormously and they're expecting us to step up like never before, to be a partner with them, and it really is a thrilling time for us. >> So that simplifies all the complexity on there, and at least in concept. Who's leading this charge? Do you discern any patterns of the guys that are getting it right, versus the guys that are maybe struggling, or maybe complacent, specifically in terms of leadership? >> Yeah, and it's super, super interesting, because I find leaders in every industry, right? You know, you find leaders and laggards in those, I had one customer not a lot, long say, "Hey is that virtualization stuff, can I really rely on it?" It's like, ding dong, you know, you're now the trailing edge of technology, but for every one of those trailers, we're seeing those front end customers, and you saw some of them on stage this morning. Where they're just really going and saying, boy we are now ready to ante in, in a big way. We're seeing that in car companies. We're seeing that in financial services companies. We're seeing that in supply chain companies. And some of those are now really seeing these startups now putting pressure on their business for the first time, and they say no, we got to innovate in a very aggressive way. And for that, you know, the Dell Technologies family, you know all of us coming together, you know with our, each skills and focus areas, but together being able to present that holistic solution that says, that's right, we can lead you on digital transformation, we could change your infrastructure, we can build-in security, we could transform your workplace, we could take you to the multi-cloud future, we got it. >> Pat, there was one of the things that caught my ear, Allison Dew, when she was talking about the Dell Technology Institute, said that, together you're going to become a force for good. I know that's something that's near and dear to your heart, >> Pat: Yeah. >> So, maybe, you talked about the tech, and the security and everything, what about the Dell families as a force for good out there? >> Yeah, and I've described this era, and I've said there's four superpowers. You know, technology superpowers that are bigger than any of us, right. And the four I described, you know, mobile. The ability to reach anyone, over half the planet is now connected. Cloud, the ability to scale as never before. AI, the ability to bring intelligence to everything, and IOT, the ability to bridge to the physical world everywhere. And those four are really reinforcing each other, right? They're accelerating each other, as Michael said, you know, "Today, the fastest day of your life. "Today, the slowest day of the rest of your life, "for tech evolution." And we see them just causing and accelerating each to go, as I mentioned in my talk this week at the Grow Awards in Silicon Valley, in 1986 I was making the 486, a great AI chip, right. It's like, what? 31 years ago? And now it's a success because the superpowers are coming together. The compute is now big enough, the data is now volumous enough, that we can do things never possible before. But with that, technology is neutral. The Gutenberg printing press did the Bible, you know, Luther's Bible, it also prints Playboy. It sort of doesn't care. Technology is neutral. And it's our job as a tech industry to shape technology for good. You know that's our obligation, and increasingly we need to be involved in, and shaping, legislations, policies, laws, to enable tech to be that force for good. >> Pat, you mentioned kind of the speed of change in the industry. You're a public company with you know, a lot of employees, how does, internally, how do you keep up with the pace of change, keep inspiring people, get them working on the next thing? You know, Michael talked about going private was one of the things that would help him restructure and get ready for that, so maybe discuss that dynamic. >> Well, you know and for us, you know, as a software company living in Silicon Valley, we feel it every day, right. I'll tell ya' you know, we see these startups, that are hovering around our people, and our buildings, and they got ideas, you know, so we're synthesizing those ideas. We have our own research effort, our advanced product efforts, we're engaging, you know, and thousands of customer interactions per day. And ultimately, it's my job to create a culture that enables my 8,000 software engineers to go for it every single day, right. Where they are just, you know, they love what we do as a company, they love who we are as a company, our values. And then find ways that we enable our teams to, what I say, innovate in everything. Not just in R and D, but how we sell our products, how we support our customers, you know, how we enable these new use cases. We have to innovate in everything, if we're going to keep pace with this industry, and to some degree, I think it's almost in the water in Silicon Valley, right. You know yeah, you got some crazy master's student coming out of Stanford, and he thinks he's going to start up a company to displace me. It's like, what are you talking about? But we feel that every day, and as we bring those people into our environment, creating that culture that allows everybody to innovate in everything, >> So it's hard to argue that things aren't getting faster, that speed, but speed is an interesting question. When you think about blockchains, and AI, and natural language processing, just digital in general, there's a lot of complexity in terms of adopting those things. So speed versus adoption. What do you see in terms of adoption? >> Yeah, you know in a lot of these things like, you know, you look at a technology like NSX, cool, breakthrough, you know we're five years old now, almost on NSX, right? Since we did the Nicira acquisition as a starting point, 4 1/2 years on NSX, and some of these things need to be sedimented, as I describe it, into the infrastructure. Hardened, you know when you've really proven all of the edge cases. You know, those things don't move every day. >> Dave: Right right, fossilized, Furrier word, >> Yeah, you know there is, you know similarly with vSAN. Boy, these edge use cases, data recovery, pounding on the periphery of failure cases, disk drives, failure modes on flash drives, some of those things need to be sedimented, but as you think about those layers, always it's you know, how do you sediment? How do you standardize? And then expose them as APIs and services to the next layer. And every layer as you go up the stack gets faster and faster right, so as somebody would consume the software-defined data center, they need to be able to do that pretty fast. You know, how can I make, you know VM, we just released 6.7. Which reduced by an order of magnitude the time to launch a VM. You know, increase the, by 20x the amount of V-Center bandwidth, just so I can go faster. Not that I needed to go faster for VMs, I needed to go faster that I can put containers in VMs, and they need much higher speed of operation. So to me, it's this constant standardization, sedimenting, integrating, and then building more and more agile surfaces, as you go higher in the stack, that allows people to build applications where literally they're pushing updates, and seeing their CICD pipeline allow new code releases every day. I'm not changing NSX every day, but I am changing my container environment for that new app literally every day, and the whole stack needs to support that. >> Cloud partnerships, we talked last year at Vmworld, about the clarity that the AWS deal brought, of course you have an arrangement with IBM, you're doing stuff with Kubernetes, so, just talk about your posture with the big cloud players, and how that has affected your business, and where you see it going. >> Yeah, you know, clearly the cloud strategy, the AWS partnership, as I said, more than anything else, when we announced that, people moved their views of VMware. Oh, I get it, VMware isn't part of my private cloud, or part of my past, they're the bridge to the future. And that has been sort of a game-changing perspective where we can truly enable this hybrid cloud experience. Where I could take you and take your existing data centers, I can move them into a range of public cloud partners, AWS, IBM, you know, and be able to operate seamlessly in a truly hybrid way. Oh your data center's getting a little hot, let's move a few workloads out. Oh, it's getting a little bit cool, let's move some workloads back. We can truly do that now, in a seamless, hybrid multi-cloud way, and customers, as they see that, it's not only the most cost-efficient, right, it also allows them to deal with unique business requirements, geo-requirements that they might have, oh, in Europe I have to be on a GDPR cloud in Germany. Okay, we support, we have a right, you know here's our portfolio. Other cases, it's like, oh, I really want to do take advantage of those proprietary services that some of the cloud vendors are doing, you know. You know, maybe in fact that new AI service is something that I could differentiate my business on, but the bulk of my workload, I want to have it on this hybrid platform that truly does give them more freedom and choice over time, while still meeting unique compliance, legal, security, issues, as they've come to know and love from VMware over time. >> So to clarify, is it, are you seeing it as use-case-specific, or is it people wanting to bring that cloud experience on-prem, or is it both? >> It is truly both, because what you've seen, is many people, and if we were talking four years ago, you would've been asking me questions, "oh, you know I just talked to Fred, "and he says everything is going to the cloud" right. And people tried that student body right to the cloud of their existing apps, and it was like, oh crap, right? You know, it's hard to re-platform, to refactor those applications, and when I got there, I got the same app, right. You know, it's like, wow that was a lot of investment to not get much return, right. Now, they look at it and they say, "Oh boy, you know, "I can build some new apps in cool new ways" right, with these cloud native services. I can now have this agile private hybrid cloud environment, and I truly can operationalize across that in a flexible way. And sometimes we have customers that are bringing workloads out of native cloud, and saying, oh that's become too big in my operation role. You know I have different governance requirements. I'm going to bring that one back. Other cases are saying, "Oh, I didn't want to move it to the VMware cloud on Amazon", or you know, IBM, the migration service is really powerful. I want to get out of the data center. Other cases, they look at their cost of capital, and the size and scale they're operating, and says, "Hey, I'm going to keep 80% on-premise forever, "but I never want to be locked in, "that I can't take advantage of that, "should there be a new service." It really is all of the above. And VMware, and our Dell relationship, and our key cloud partners, now 4,100 cloud partners strong, it's really stepping into that, in a pretty unique and powerful way. >> And the key is that operational impact, as Pat is saying. >> So Pat, just one of the challenges we've heard from users we talked to is, if this was supposed to get simpler, virtualizing it, you know, I kept all my old applications. Going the cloud, there's more SKUs of compute in the public cloud than there are, if I was to buy from Dell.com. You know, in management, you know we're making steps, but you know it's heterogeneous, it's always add, nothing ever dies, how do we help customers through this? >> Yeah, and I do think they're, you know we're definitely hearing that from customers. And they're looking to us to make these things simpler. And I think we've now, you know, laid the templates for a truly simpler world. Right, in the security domain, intrinsic security. Build many of the base security capabilities into the platform. Automation, automate across these multiple cloud environments, so you don't care about it, we're taking care of it against your policies. Being able to do that, you know, and have an increasingly autonomous infrastructure that truly is responding and operationalizing those environments, without you having to put personnel and specific investments, right at that fundamental operations level, because it's too big, it's too fast, you can't respond at the pace the business requires. So I feel really good, we have some key innovations, you'll see us announcing. Now, we're going to talk at VMworld right? >> Dave: Oh absolutely. >> Okay, >> I will 100% be there, >> I have some cool announcements in this area, by VMworld as well, specifically, in some of these management automation, we see some of that applying, some new AIML techniques, to be able to help with some of those workload management and policy management areas. So, some really cool things going on to help these problems specifically. >> We've seen, oh we saw blog recently, about you guys working on some blockchain stuff. I know it's early days there, but it's exciting new technology. >> Yeah, and the blockchain stuff is what I'm really, really pretty excited about. We have some algorithmic breakthroughs that right now, you know, blockchain on a log scale basically scales at you know log or super log, right. Which meaning, it's problematic right. Is you get lots of nodes, right, you know the time to resolve those, gets to be exponentially expensive, to be able to resolve. We've come up with some algorithmic breakthroughs that drop that to near linear. And when people look at that, they sort of say, wow, I can make my blockchain environments much larger, much more distributed as a result, so as a result of some of that work we'll be increasingly making blockchain as a primitive. We're not trying to deal with the application level, you know for insurance, for financial, but we can increasingly deliver a primitive infrastructure along with vSphere in the VMware environment, that says yeah, we've taken care of that base issue. We've guaranteed it from a vendor you trusted, and you might remember there was a couple of breaches, of some of the blockchain implementations, so yeah, we hope to take care of some of those hard problems for customers and bring some, a good breakthrough engineering, from VMware to that problem. >> Well, it's great to see companies like VMware and you know enterprise plays, IBM obviously involved, into bringing some credibility to that space, which everybody says "Crypto, oh", they don't walk they run, but there's real potential in the technology. I want to ask you about a Silicon Valley question. >> Pat: Okay. >> Any chance I get, so if I broadly define Silicon Valley, Let's include, you know, Seattle. And we generally don't do that, but that's okay, but I'm going to. >> We'll take this, we'll take 'em in okay. >> it's technology industry, but technology industry seems to have this dual disruption agenda. We've always sort of seen, tech companies own this horizontal stack, you know, and go attack, and cloud, and big data, and disruption, but it seems like, with digital, you're seeing them attack new industries. Whether it's healthcare, or groceries, or media. What do you make of that? Can Silicon Valley, broadly defined, pull off this dual disruption agenda? >> You know I really believe it can, right. In that, I'm, you know, being part of it. I'm a huge optimist on it. I don't think it will be exclusive to Silicon Valley, right. You know, there's a tech community in Boston, that's a bit more focused on healthcare, right. Obviously, the cloud guys coming out of Seattle. You know, Austin, and you know, Texas has increasing, Research Triangle, when you go around the world, you see more places because, you know, in that sense, one of my favorite, you know, cartoons, is a picture of a dog at a terminal. I'm sure it was a Dell terminal, but you know, and the caption reads right, "On the internet, "they don't know you're a dog." Right, you know the point being, hey, when you're on the net, it doesn't matter where you are, right. And it enables innovation, whether that's Afghanistan, whether that's Bangladesh, whether that's Myanmar, you know any of those places, become equal on the net, and it does open up that domain of innovation. So I view it much more as tech is disrupting everything. And that's my theme of, "tech is breaking out of tech". Clearly the hub of that, is Silicon Valley. Right you know, that's the center where you know, every third door is a new startup, as you walk down the street. It really is an incredible experience. But increasingly, you know, that innovative disruptive spirit is breaking out of Silicon Valley, to you know, literally across the world. The Chinese think they might be the number one. You know, Europeans, oh sort of a renaissance in France, you know that we haven't seen for many years, and so on. And I do believe that it will continue to be technology, in this horizontal way you know, but increasingly, and I think you know, Amazon has led the way on this. We're seeing boy, we can disrupt entire industries you know, leveraging that. You know, Tesla in automotive, and Airbnbs. All of these are changing industries in fundamental ways, and I do not see that slowing down at all. You know, I'm thrilled to see like, you know, health care, right. Boy, I have not seen this amount of disruptive technology startups in healthcare, healthcare one of the lowest percentage of spend on IT. Can you imagine that? Right, you know at that level, and boy, we're starting to see that pick up. So industry by industry I think we're just getting started. >> And that's an industry that is really ripe for disruption. >> Pat: Oh my gosh. >> So Pat, we're going to hear about some of this, this afternoon at your keynote, I presume? Maybe show us a little leg there, and we'll wrap. >> Yeah, yeah. >> Dave: Alright, take it home. >> Hey, you know we're, today's keynote, obviously going to talk about the better together aspects, we'll update on vSAN and HCI and our strategy there, some of the cool things we're doing with Dell, and AirWatch Workspace ONE, and the client space. Yeah, we're going to talk about networking. I'm going to lay out our networking strategy, and we're going to give a teaser this afternoon of a broad set of networking announcements that we're doing this week. And hope to really lay out, what we think of, as the virtual cloud network of the future, and how the network is essential to that future. So, we're going to have a little bit of fun there, and you'll see me don the VR headset, right, and hey we're going to go into the virtual, virtual data center today, >> Virtualization inception. >> There we go. >> Well Pat, on a personal note, you've been a great friend of theCUBE, and we really appreciate that, and you've been an awesome guest, we saw you come from Intel with an amazing career, and we just see it going from there. So congratulations on all your personal success, your team success and continued. >> Love you guys, it's always great to be on theCUBE. You guys do a fabulous job, >> Dave: Thank you. >> For live tech coverage, and it really has been a lot of fun, and next year we're going to go party for your 10 year anniversary on theCUBE. >> Dave: That's right. Love it. >> Okay, cool, very good. >> Alright. >> Thank you, thanks so much. >> Good. Thanks. >> Alright, keep it right there everybody. We'll be back with our wall-to-wall coverage of Dell Technologies World. You're watching theCUBE. (techno music)

>> Dave: Good morning everybody and welcome to Big Data SV. >> Come down, hang out with us today as we have continued conversations. >> Will this trend, this Big Data trend, solve the problems that decision support and business intelligence couldn't solve. We're going to talk about that today. Gentlemen, welcome to theCUBE. (energetic rock music) >> Dave: We're setting up for the digital business era. >> What do people really want to do? And it's big data analytics. I want to ingest a lot of information. I want to enrich it. I want to analyze it and I want to take actions and then I want to go park it. >> Leveraging everything that is open source to build models and put models in production. >> We talk a little bit like it's Google Docs for your data. >> So I no longer have to send daily data dumps to partners. They can simply query the data themselves. >> We've taken the two approaches of enterprise analytics and self-services and tried to create a scenario where you kind of get the best of both worlds. >> The epicenter of this whole data management has to move to cloud. >> It saves you a lot of time and effort. You can focus on more strategic projects. >> Do you agree it's kind of bifurcated. There's the Spotifys, and the Ubers, and the AirBnBs that are crushing it and then there's a lot of traditional enterprises that are still stovepipe and struggling. >> Marketing people, operational people, finance people, they need data to do their jobs. Their jobs are becoming more data-driven but they're not necessarily data people. >> They're depending on the vendor landscape to provide them with an entry level set of tools. >> Don't make me work harder and add new staff. Solve the problem. >> Yeah, it's all about solving problems. >> A lot more on machine learning now and artificial intelligence and frankly a lot of discussion around ethics. >> Data governance, it is in fact a business imperative. >> Marketers want all the customer data they can get, right? But there's social security numbers, PII-- Who should be able to see and use what because if this data is used inappropriately then it can cause a lot of problems. >> Creating that visibility is very important. >> The biggest casualty is going to be their customer relationship if they don't do this because most companies don't know their customers fully. >> The key that digital transformation is really a lauder on the concept of real time. >> If anybody deals with the data that's in motion, you lose because I'm analyzing as it's happening and then you would be analyzing after at rest. >> Speed is so important these days and the new companies that are grasping data aggressively, putting it somewhere where they can make decisions on it on a day-to-day basis, they're winning. >> Come on down, be part of our audience. We also have a great party tonight where you can network with some of our experts and analysts. (energetic rock music) >> Our expectation is that as the tooling gets better, we will see more people be able to present themselves truly as capable of doing this, and that will accelerate the process. >> To me, one of the first things a CDO has to do is understand how a company gets value out of its data. >> You can either run away from that data and say, look, I'm going to not, I'm going to bury my head in the sand, I'm going to be a business, I'm just going to forget about that data stuff and that's certainly a way to go. Right? It's a way to go away. >> It's easy to get overwhelmed for companies, you have to pick somewhere, right? >> You don't have to go sit in the basement for a year having something that is 'the thing', the unicorn in the business, it's small quick wins. >> We're not afraid of makin' mistakes. If we provision infrastructure and we don't get it right the first time, we just change it. >> That's something that we would just never be able to do previously in a data center. >> When companies get started with the right first project they can build on that success and invest more, whereas if you're not experimenting and trying things and moving, you're never going to get there. >> Dave: Thanks for watching, everybody. This is thCUBE. We're live from Big Data SV. >> And we're clear. Thank you. (audience applauds)

>> Narrator: Live from New York, it's theCUBE. Covering machine learning everywhere. Build your ladder to AI. Brought to you by IBM. >> Welcome back to IBM's Machine Learning Everywhere. Build your ladder to AI, along with Dave Vellante, John Walls here, wrapping up here in New York City. Just about done with the programming here in Midtown. Dave, let's just take a step back. We've heard a lot, seen a lot, talked to a lot of folks today. First off, tell me, AI. We've heard some optimistic outlooks, some, I wouldn't say pessimistic, but some folks saying, "Eh, hold off." Not as daunting as some might think. So just your take on the artificial intelligence conversation we've heard so far today. >> I think generally, John, that people don't realize what's coming. I think the industry, in general, our industry, technology industry, the consumers of technology, the businesses that are out there, they're steeped in the past, that's what they know. They know what they've done, they know the history and they're looking at that as past equals prologue. Everybody knows that's not the case, but I think it's hard for people to envision what's coming, and what the potential of AI is. Having said that, Jennifer Shin is a near-term pessimist on the potential for AI, and rightly so. There are a lot of implementation challenges. But as we said at the open, I'm very convinced that we are now entering a new era. The Hadoop big data industry is going to pale in comparison to what we're seeing. And we're already seeing very clear glimpses of it. The obvious things are Airbnb and Uber, and the disruptions that are going on with Netflix and over-the-top programming, and how Google has changed advertising, and how Amazon is changing and has changed retail. But what you can see, and again, the best examples are Apple getting into financial services, moving into healthcare, trying to solve that problem. Amazon buying a grocer. The rumor that I heard about Amazon potentially buying Nordstrom, which my wife said is a horrible idea. (John laughs) But think about the fact that they can do that is a function of, that they are a digital-first company. Are built around data, and they can take those data models and they can apply it to different places. Who would have thought, for example, that Alexa would be so successful? That Siri is not so great? >> Alexa's become our best friend. >> And it came out of the blue. And it seems like Google has a pretty competitive piece there, but I can almost guarantee that doing this with our thumbs is not the way in which we're going to communicate in the future. It's going to be some kind of natural language interface that's going to rely on artificial intelligence and machine learning and the like. And so, I think it's hard for people to envision what's coming, other than fast forward where machines take over the world and Stephen Hawking and Elon Musk say, "Hey, we should be concerned." Maybe they're right, not in the next 10 years. >> You mentioned Jennifer, we were talking about her and the influencer panel, and we've heard from others as well, it's a combination of human intelligence and artificial intelligence. That combination's more powerful than just artificial intelligence, and so, there is a human component to this. So, for those who might be on the edge of their seat a little bit, or looking at this from a slightly more concerning perspective, maybe not the case. Maybe not necessary, is what you're thinking. >> I guess at the end of the day, the question is, "Is the world going to be a better place with all this AI? "Are we going to be more prosperous, more productive, "healthier, safer on the roads?" I am an optimist, I come down on the side of yes. I would not want to go back to the days where I didn't have GPS. That's worth it to me. >> Can you imagine, right? If you did that now, you go back five years, just five years from where we are now, back to where we were. Waze was nowhere, right? >> All the downside of these things, I feel is offset by that. And I do think it's incumbent upon the industry to try to deal with the problem, especially with young people, the blue light problem. >> John: The addictive issue. >> That's right. But I feel like those downsides are manageable, and the upsides are of enough value that society is going to continue to move forward. And I do think that humans and machines are going to continue to coexist, at least in the near- to mid- reasonable long-term. But the question is, "What can machines "do that humans can't do?" And "What can humans do that machines can't do?" And the answer to that changes every year. It's like I said earlier, not too long ago, machines couldn't climb stairs. They can now, robots can climb stairs. Can they negotiate? Can they identify cats? Who would've imagined that all these cats on the Internet would've led to facial recognition technology. It's improving very, very rapidly. So, I guess my point is that that is changing very rapidly, and there's no question it's going to have an impact on society and an impact on jobs, and all those other negative things that people talk about. To me, the key is, how do we embrace that and turn it into an opportunity? And it's about education, it's about creativity, it's about having multi-talented disciplines that you can tap. So we talked about this earlier, not just being an expert in marketing, but being an expert in marketing with digital as an understanding in your toolbox. So it's that two-tool star that I think is going to emerge. And maybe it's more than two tools. So that's how I see it shaping up. And the last thing is disruption, we talked a lot about disruption. I don't think there's any industry that's safe. Colin was saying, "Well, certain industries "that are highly regulated-" In some respects, I can see those taking longer. But I see those as the most ripe for disruption. Financial services, healthcare. Can't we solve the HIPAA challenge? We can't get access to our own healthcare information. Well, things like artificial intelligence and blockchain, we were talking off-camera about blockchain, those things, I think, can help solve the challenge of, maybe I can carry around my health profile, my medical records. I don't have access to them, it's hard to get them. So can things like artificial intelligence improve our lives? I think there's no question about it. >> What about, on the other side of the coin, if you will, the misuse concerns? There are a lot of great applications. There are a lot of great services. As you pointed out, a lot of positive, a lot of upside here. But as opportunities become available and technology develops, that you run the risk of somebody crossing the line for nefarious means. And there's a lot more at stake now because there's a lot more of us out there, if you will. So, how do you balance that? >> There's no question that's going to happen. And it has to be managed. But even if you could stop it, I would say you shouldn't because the benefits are going to outweigh the risks. And again, the question we asked the panelists, "How far can we take machines? "How far can we go?" That's question number one, number two is, "How far should we go?" We're not even close to the "should we go" yet. We're still on the, "How far can we go?" Jennifer was pointing out, I can't get my password reset 'cause I got to call somebody. That problem will be solved. >> So, you're saying it's more of a practical consideration now than an ethical one, right now? >> Right now. Moreso, and there's certainly still ethical considerations, don't get me wrong, but I see light at the end of the privacy tunnel, I see artificial intelligence as, well, analytics is helping us solve credit card fraud and things of that nature. Autonomous vehicles are just fascinating, right? Both culturally, we talked about that, you know, we learned how to drive a stick shift. (both laugh) It's a funny story you told me. >> Not going to worry about that anymore, right? >> But it was an exciting time in our lives, so there's a cultural downside of that. I don't know what the highway death toll number is, but it's enormous. If cell phones caused that many deaths, we wouldn't be using them. So that's a problem that I think things like artificial intelligence and machine intelligence can solve. And then the other big thing that we talked about is, I see a huge gap between traditional companies and these born-in-the-cloud, born-data-oriented companies. We talked about the top five companies by market cap. Microsoft, Amazon, Facebook, Alphabet, which is Google, who am I missing? >> John: Apple. >> Apple, right. And those are pretty much very much data companies. Apple's got the data from the phones, Google, we know where they get their data, et cetera, et cetera. Traditional companies, however, their data resides in silos. Jennifer talked about this, Craig, as well as Colin. Data resides in silos, it's hard to get to. It's a very human-driven business and the data is bolted on. With the companies that we just talked about, it's a data-driven business, and the humans have expertise to exploit that data, which is very important. So there's a giant skills gap in existing companies. There's data silos. The other thing we touched on this is, where does innovation come from? Innovation drives value drives disruption. So the innovation comes from data. He or she who has the best data wins. It comes from artificial intelligence, and the ability to apply artificial intelligence and machine learning. And I think something that we take for granted a lot, but it's cloud economics. And it's more than just, and somebody, one of the folks mentioned this on the interview, it's more than just putting stuff in the cloud. It's certainly managed services, that's part of it. But it's also economies of scale. It's marginal economics that are essentially zero. It's speed, it's low latency. It's, and again, global scale. You combine those things, data, artificial intelligence, and cloud economics, that's where the innovation is going to come from. And if you think about what Uber's done, what Airbnb have done, where Waze came from, they were picking and choosing from the best digital services out there, and then developing their own software from this, what I say my colleague Dave Misheloff calls this matrix. And, just to repeat, that matrix is, the vertical matrix is industries. The horizontal matrix are technology platforms, cloud, data, mobile, social, security, et cetera. They're building companies on top of that matrix. So, it's how you leverage the matrix is going to determine your future. Whether or not you get disrupted, whether your the disruptor or the disruptee. It's not just about, we talked about this at the open. Cloud, SaaS, mobile, social, big data. They're kind of yesterday's news. It's now new artificial intelligence, machine intelligence, deep learning, machine learning, cognitive. We're still trying to figure out the parlance. You could feel the changes coming. I think this matrix idea is very powerful, and how that gets leveraged in organizations ultimately will determine the levels of disruption. But every single industry is at risk. Because every single industry is going digital, digital allows you to traverse industries. We've said it many times today. Amazon went from bookseller to content producer to grocer- >> John: To grocer now, right? >> To maybe high-end retailer. Content company, Apple with Apple Pay and companies getting into healthcare, trying to solve healthcare problems. The future of warfare, you live in the Beltway. The future of warfare and cybersecurity are just coming together. One of the biggest issues I think we face as a country is we have fake news, we're seeing the weaponization of social media, as James Scott said on theCUBE. So, all these things are coming together that I think are going to make the last 10 years look tame. >> Let's just switch over to the currency of AI, data. And we've talked to, Sam Lightstone today was talking about the database querying that they've developed with the Plex product. Some fascinating capabilities now that make it a lot richer, a lot more meaningful, a lot more relevant. And that seems to be, really, an integral step to making that stuff come alive and really making it applicable to improving your business. Because they've come up with some fantastic new ways to squeeze data that's relevant out, and get it out to the user. >> Well, if you think about what I was saying earlier about data as a foundational core and human expertise around it, versus what most companies are, is human expertise with data bolted on or data in silos. What was interesting about Queryplex, I think they called it, is it essentially virtualizes the data. Well, what does that mean? That means i can have data in place, but I can have access to that data, I can democratize that data, make it accessible to people so that they can become data-driven, data is the core. Now, what I don't know, and I don't know enough, just heard about it today, I missed that announcement, I think they announced it a year ago. He mentioned DB2, he mentioned Netezza. Most of the world is not on DB2 and Netezza even though IBM customers are. I think they can get to Hadoop data stores and other data stores, I just don't know how wide that goes, what the standards look like. He joked about the standards as, the great thing about standards is- >> There are a lot of 'em. (laughs) >> There's always another one you can pick if this one fails. And he's right about that. So, that was very interesting. And so, this is again, the question, can traditional companies close that machine learning, machine intelligence, AI gap? Close being, close the gap that the big five have created. And even the small guys, small guys like Uber and Airbnb, and so forth, but even those guys are getting disrupted. The Airbnbs and the Ubers, right? Again, blockchain comes in and you say, "Why do I need a trusted third party called Uber? "Why can't I do this on the blockchain?" I predict you're going to see even those guys get disrupted. And I'll say something else, it's hard to imagine that a Google or a Facebook can be unseated. But I feel like we may be entering an era where this is their peak. Could be wrong, I'm an Apple customer. I don't know, I'm not as enthralled as I used to be. They got trillions in the bank. But is it possible that opensource and blockchain and the citizen developer, the weekend and nighttime developers, can actually attack that engine of growth for the last 10 years, 20 years, and really break that monopoly? The Internet has basically become an oligopoly where five companies, six companies, whatever, 10 companies kind of control things. Is it possible that opensource software, AI, cryptography, all this activity could challenge the status quo? Being in this business as long as I have, things never stay the same. Leaders come, leaders go. >> I just want to say, never say never. You don't know. >> So, it brings it back to IBM, which is interesting to me. It was funny, I was asking Rob Thomas a question about disruption, and I think he misinterpreted it. I think he was thinking that I was saying, "Hey, you're going to get disrupted by all these little guys." IBM's been getting disrupted for years. They know how to reinvent. A lot of people criticize IBM, how many quarters they haven't had growth, blah, blah, blah, but IBM's made some big, big bets on the future. People criticizing Watson, but it's going to be really interesting to see how all this investment that IBM has made is going to pay off. They were early on. People in the Valley like to say, "Well, the Facebooks, and even Amazon, "Google, they got the best AI. "IBM is not there with them." But think about what IBM is trying to do versus what Google is doing. They're very consumer-oriented, solving consumer problems. Consumers have really led the consumerization of IT, that's true, but none of those guys are trying to solve cancer. So IBM is talking about some big, hairy, audacious goals. And I'm not as pessimistic as some others you've seen in the trade press, it's popular to do. So, bringing it back to IBM, I saw IBM as trying to disrupt itself. The challenge IBM has, is it's got a lot of legacy software products that have purchased over the years. And it's got to figure out how to get through those. So, things like Queryplex allow them to create abstraction layers. Things like Bluemix allow them to bring together their hundreds and hundreds and hundreds of SaaS applications. That takes time, but I do see IBM making some big investments to disrupt themselves. They've got a huge analytics business. We've been covering them for quite some time now. They're a leader, if not the leader, in that business. So, their challenge is, "Okay, how do we now "apply all these technologies to help "our customers create innovation?" What I like about the IBM story is they're not out saying, "We're going to go disrupt industries." Silicon Valley has a bifurcated disruption agenda. On the one hand, they're trying to, cloud, and SaaS, and mobile, and social, very disruptive technologies. On the other hand, is Silicon Valley going to disrupt financial services, healthcare, government, education? I think they have plans to do so. Are they going to be able to execute that dual disruption agenda? Or are the consumers of AI and the doers of AI going to be the ones who actually do the disrupting? We'll see, I mean, Uber's obviously disrupted taxis, Silicon Valley company. Is that too much to ask Silicon Valley to do? That's going to be interesting to see. So, my point is, IBM is not trying to disrupt its customers' businesses, and it can point to Amazon trying to do that. Rather, it's saying, "We're going to enable you." So it could be really interesting to see what happens. You're down in DC, Jeff Bezos spent a lot of time there at the Washington Post. >> We just want the headquarters, that's all we want. We just want the headquarters. >> Well, to the point, if you've got such a growing company monopoly, maybe you should set up an HQ2 in DC. >> Three of the 20, right, for a DC base? >> Yeah, he was saying the other day that, maybe we should think about enhancing, he didn't call it social security, but the government, essentially, helping people plan for retirement and the like. I heard that and said, "Whoa, is he basically "telling us he's going to put us all out of jobs?" (both laugh) So, that, if I'm a customer of Amazon's, I'm kind of scary. So, one of the things they should absolutely do is spin out AWS, I think that helps solve that problem. But, back to IBM, Ginni Rometty was very clear at the World of Watson conference, the inaugural one, that we are not out trying to compete with our customers. I would think that resonates to a lot of people. >> Well, to be continued, right? Next month, back with IBM again? Right, three days? >> Yeah, I think third week in March. Monday, Tuesday, Wednesday, theCUBE's going to be there. Next week we're in the Bahamas. This week, actually. >> Not as a group taking vacation. Actually a working expedition. >> No, it's that blockchain conference. Actually, it's this week, what am I saying next week? >> Although I'm happy to volunteer to grip on that shoot, by the way. >> Flying out tomorrow, it's happening fast. >> Well, enjoyed this, always good to spend time with you. And good to spend time with you as well. So, you've been watching theCUBE, machine learning everywhere. Build your ladder to AI. Brought to you by IBM. Have a good one. (techno music)

>> Narrator: Live from Munich Germany, it's theCUBE, covering IBM, Fast Track Your Data. Brought to you by IBM. >> We're back. This is Dave Vellante with Jim Kobielus, and this is theCUBE, the leader in live tech coverage. We go out to the events. We extract the signal from the noise. We are here covering special presentation of IBM's Fast Track your Data, and we're in Munich Germany. It's been a day-long session. We started this morning with a panel discussion with five senior level data scientists that Jim and I hosted. Then we did CUBE interviews in the morning. We cut away to the main tent. Kate Silverton did a very choreographed scripted, but very well done, main keynote set of presentations. IBM made a couple of announcements today, and then we finished up theCUBE interviews. Jim and I are here to wrap. We're actually running on IBMgo.com. We're running live. Hilary Mason talking about what she's doing in data science, and also we got a session on GDPR. You got to log in to see those sessions. So go ahead to IBMgo.com, and you'll find those. Hit the schedule and go to the Hilary Mason and GDP our channels, and check that out, but we're going to wrap now. Jim two main announcements today. I hesitate to call them big announcements. I mean they were you know just kind of ... I think the word you used last night was perfunctory. You know I mean they're okay, but they're not game changing. So what did you mean? >> Well first of all, when you look at ... Though IBM is not calling this a signature event, it's essentially a signature event. They do these every June or so. You know in the past several years, the signature events have had like a one track theme, whether it be IBM announcing their investing deeply in Spark, or IBM announcing that they're focusing on investing in R as the core language for data science development. This year at this event in Munich, it's really a three track event, in terms of the broad themes, and I mean they're all important tracks, but none of them is like game-changing. Perhaps IBM doesn't intend them to be it seems like. One of which is obviously Europe. We're holding this in Munich. And a couple of things of importance to European customers, first and foremost GDPR. The deadline next year, in terms of compliance, is approaching. So sound the alarm as it were. And IBM has rolled out compliance or governance tools. Download and the go from the information catalog, governance catalog and so forth. Now announcing the consortium with Hortonworks to build governance on top of Apache Atlas, but also IBM announcing that they've opened up a DSX center in England and a machine-learning hub here in Germany, to help their European clients, in those countries especially, to get deeper down into data science and machine learning, in terms of developing those applicants. That's important for the audience, the regional audience here. The second track, which is also important, and I alluded to it. It's governance. In all of its manifestations you need a master catalog of all the assets for building and maintaining and controlling your data applications and your data science applications. The catalog, the consortium, the various offerings at IBM is announced and discussed in great detail. They've brought in customers and partners like Northern Trust, talk about the importance of governance, not just as a compliance mandate, but also the potential strategy for monetizing your data. That's important. Number three is what I call cloud native data applications and how the state of the art in developing data applications is moving towards containerized and orchestrated environments that involve things like Docker and Kubernetes. The IBM DB2 developer community edition. Been in the market for a few years. The latest version they announced today includes kubernetes support. Includes support for JSON. So it's geared towards new generation of cloud and data apps. What I'm getting at ... Those three core themes are Europe governance and cloud native data application development. Each of them is individually important, but none of them is game changer. And one last thing. Data science and machine learning, is one of the overarching envelope themes of this event. They've had Hilary Mason. A lot of discussion there. My sense I was a little bit disappointed because there wasn't any significant new announcements related to IBM evolving their machine learning portfolio into deep learning or artificial intelligence in an environment where their direct competitors like Microsoft and Google and Amazon are making a huge push in AI, in terms of their investments. There's a bit of a discussion, and Rob Thomas got to it this morning, about DSX. Working with power AI, the IBM platform, I would like to hear more going forward about IBM investments in these areas. So I thought it was an interesting bunch of announcements. I'll backtrack on perfunctory. I'll just say it was good that they had this for a lot of reasons, but like I said, none of these individual announcements is really changing the game. In fact like I said, I think I'm waiting for the fall, to see where IBM goes in terms of doing something that's actually differentiating and innovative. >> Well I think that the event itself is great. You've got a bunch of partners here, a bunch of customers. I mean it's active. IBM knows how to throw a party. They've always have. >> And the sessions are really individually awesome. I mean terms of what you learn. >> The content is very good. I would agree. The two announcements that were sort of you know DB2, sort of what I call community edition. Simpler, easier to download. Even Dave can download DB2. I really don't want to download DB2, but I could, and play with it I guess. You know I'm not database guy, but those of you out there that are, go check it out. And the other one was the sort of unified data governance. They tried to tie it in. I think they actually did a really good job of tying it into GDPR. We're going to hear over the next, you know 11 months, just a ton of GDPR readiness fear, uncertainty and doubt, from the vendor community, kind of like we heard with Y2K. We'll see what kind of impact GDPR has. I mean it looks like it's the real deal Jim. I mean it looks like you know this 4% of turnover penalty. The penalties are much more onerous than any other sort of you know, regulation that we've seen in the past, where you could just sort of fluff it off. Say yeah just pay the fine. I think you're going to see a lot of, well pay the lawyers to delay this thing and battle it. >> And one of our people in theCUBE that we interviewed, said it exactly right. It's like the GDPR is like the inverse of Y2K. In Y2K everybody was freaking out. It was actually nothing when it came down to it. Where nobody on the street is really buzzing. I mean the average person is not buzzing about GDPR, but it's hugely important. And like you said, I mean some serious penalties may be in the works for companies that are not complying, companies not just in Europe, but all around the world who do business with European customers. >> Right okay so now bring it back to sort of machine learning, deep learning. You basically said to Rob Thomas, I see machine learning here. I don't see a lot of the deep learning stuff quite yet. He said stay tuned. You know you were talking about TensorFlow and things like that. >> Yeah they supported that ... >> Explain. >> So Rob indicated that IBM very much, like with power AI and DSX, provides an open framework or toolkit for plugging in your, you the developers, preferred machine learning or deep learning toolkit of an open source nature. And there's a growing range of open source deep learning toolkits beyond you know TensorFlow, including Theano and MXNet and so forth, that IBM is supporting within the overall ESX framework, but also within the power AI framework. In other words they've got those capabilities. They're sort of burying that message under a bushel basket, at least in terms of this event. Also one of the things that ... I said this too Mena Scoyal. Watson data platform, which they launched last fall, very important product. Very important platform for collaboration among data science professionals, in terms of the machine learning development pipeline. I wish there was more about the Watson data platform here, about where they're taking it, what the customers are doing with it. Like I said a couple of times, I see Watson data platform as very much a DevOps tool for the new generation of developers that are building machine learning models directly into their applications. I'd like to see IBM, going forward turn Watson data platform into a true DevOps platform, in terms of continuous integration of machine learning and deep learning another statistical models. Continuous training, continuous deployment, iteration. I believe that's where they're going, or probably she will be going. I'd like to see more. I'm expecting more along those lines going forward. What I just described about DevOps for data science is a big theme that we're focusing on at Wikibon, in terms where the industry is going. >> Yeah, yeah. And I want to come back to that again, and get an update on what you're doing within your team, and talk about the research. Before we do that, I mean one of the things we talked about on theCUBE, in the early days of Hadoop is that the guys are going to make the money in this big data business of the practitioners. They're not going to see, you know these multi-hundred billion dollar valuations come out of the Hadoop world. And so far that prediction has held up well. It's the Airbnbs and the Ubers and the Spotifys and the Facebooks and the Googles, the practitioners who are applying big data, that are crushing it and making all the money. You see Amazon now buying Whole Foods. That in our view is a data play, but who's winning here, in either the vendor or the practitioner community? >> Who's winning are the startups with a hot new idea that's changing, that's disrupting some industry, or set of industries with machine learning, deep learning, big data, etc. For example everybody's, with bated breath, waiting for you know self-driving vehicles. And the ecosystem as it develops somebody's going to clean up. And one or more companies, companies we probably never heard of, leveraging everything we're describing here today, data science and containerized distributed applications that involve you know deep learning for you know image analysis and sensor analyst and so forth. Putting it all together in some new fabric that changes the way we live on this planet, but as you said the platforms themselves, whether they be Hadoop or Spark or TensorFlow, whatever, they're open source. You know and the fact is, by it's very nature, open source based solutions, in terms of profit margins on selling those, inexorably migrate to zero. So you're not going to make any money as a tool vendor, or a platform vendor. You got to make money ... If you're going to make money, you make money, for example from providing an ecosystem, within which innovation can happen. >> Okay we have a few minutes left. Let's talk about the research that you're working on. What's exciting you these days? >> Right, right. So I think a lot of people know I've been around the analyst space for a long long time. I've joined the SiliconANGLE Wikibon team just recently. I used to work for a very large solution provider, and what I do here for Wikibon is I focus on data science as the core of next generation application development. When I say next-generation application development, it's the development of AI, deep learning machine learning, and the deployment of those data-driven statistical assets into all manner of application. And you look at the hot stuff, like chatbots for example. Transforming the experience in e-commerce on mobile devices. Siri and Alexa and so forth. Hugely important. So what we're doing is we're focusing on AI and everything. We're focusing on containerization and building of AI micro-services and the ecosystem of the pipelines and the tools that allow you to do that. DevOps for data science, distributed training, federated training of statistical models, so forth. We are also very much focusing on the whole distributed containerized ecosystem, Docker, Kubernetes and so forth. Where that's going, in terms of changing the state of the art, in terms of application development. Focusing on the API economy. All of those things that you need to wrap around the payload of AI to deliver it into every ... >> So you're focused on that intersection between AI and the related topics and the developer. Who is winning in that developer community? Obviously Amazon's winning. You got Microsoft doing a good job there. Google, Apple, who else? I mean how's IBM doing for example? Maybe name some names. Who do you who impresses you in the developer community? But specifically let's start with IBM. How is IBM doing in that space? >> IBM's doing really well. IBM has been for quite a while, been very good about engaging with new generation of developers, using spark and R and Hadoop and so forth to build applications rapidly and deploy them rapidly into all manner of applications. So IBM has very much reached out to, in the last several years, the Millennials for whom all of this, these new tools, have been their core repertoire from the very start. And I think in many ways, like today like developer edition of the DB2 developer community edition is very much geared to that market. Saying you know to the cloud native application developer, take a second look at DB2. There's a lot in DB2 that you might bring into your next application development initiative, alongside your spark toolkit and so forth. So IBM has startup envy. They're a big old company. Been around more than a hundred years. And they're trying to, very much bootstrap and restart their brand in this new context, in the 21st century. I think they're making a good effort at doing it. In terms of community engagement, they have a really good community engagement program, all around the world, in terms of hackathons and developer days, you know meetups here and there. And they get lots of turnout and very loyal customers and IBM's got to broadest portfolio. >> So you still bleed a little bit of blue. So I got to squeeze it out of you now here. So let me push a little bit on what you're saying. So DB2 is the emphasis here, trying to position DB2 as appealing for developers, but why not some of the other you know acquisitions that they've made? I mean you don't hear that much about Cloudant, Dash TV, and things of that nature. You would think that that would be more appealing to some of the developer communities than DB2. Or am I mistaken? Is it IBM sort of going after the core, trying to evolve that core you know constituency? >> No they've done a lot of strategic acquisitions like Cloudant, and like they've acquired Agrath Databases and brought them into their platform. IBM has every type of database or file system that you might need for web or social or Internet of Things. And so with all of the development challenges, IBM has got a really high-quality, fit-the-purpose, best-of-breed platform, underlying data platform for it. They've got huge amounts of developers energized all around the world working on this platform. DB2, in the last several years they've taken all of their platforms, their legacy ... That's the wrong word. All their existing mature platforms, like DB2 and brought them into the IBM cloud. >> I think legacy is the right word. >> Yeah, yeah. >> These things have been around for 30 years. >> And they're not going away because they're field-proven and ... >> They are evolving. >> And customers have implemented them everywhere. And they're evolving. If you look at how IBM has evolved DB2 in the last several years into ... For example they responded to the challenge from SAP HANA. We brought BLU Acceleration technology in memory technology into DB2 to make it screamingly fast and so forth. IBM has done a really good job of turning around these product groups and the product architecture is making them cloud first. And then reaching out to a new generation of cloud application developers. Like I said today, things like DB2 developer community edition, it's just the next chapter in this ongoing saga of IBM turning itself around. Like I said, each of the individual announcements today is like okay that's interesting. I'm glad to see IBM showing progress. None of them is individually disruptive. I think the last week though, I think Hortonworks was disruptive in the sense that IBM recognized that BigInsights didn't really have a lot of traction in the Hadoop spaces, not as much as they would have wished. Hortonworks very much does, and IBM has cast its lot to work with HDP, but HDP and Hortonworks recognizes they haven't achieved any traction with data scientists, therefore DSX makes sense, as part of the Hortonworks portfolio. Likewise a big sequel makes perfect sense as the sequel front end to the HDP. I think the teaming of IBM and Hortonworks is propitious of further things that they'll be doing in the future, not just governance, but really putting together a broader cloud portfolio for the next generation of data scientists doing work in the cloud. >> Do you think Hortonworks is a legitimate acquisition target for IBM. >> Of course they are. >> Why would IBM ... You know educate us. Why would IBM want to acquire Hortonworks? What does that give IBM? Open source mojo, obviously. >> Yeah mojo. >> What else? >> Strong loyalty with the Hadoop market with developers. >> The developer angle would supercharge the developer angle, and maybe make it more relevant outside of some of those legacy systems. Is that it? >> Yeah, but also remember that Hortonworks came from Yahoo, the team that developed much of what became Hadoop. They've got an excellent team. Strategic team. So in many ways, you can look at Hortonworks as one part aqui-hire if they ever do that and one part really substantial and growing solution portfolio that in many ways is complementary to IBM. Hortonworks is really deep on the governance of Hadoop. IBM has gone there, but I think Hortonworks is even deeper, in terms of their their laser focus. >> Ecosystem expansion, and it actually really wouldn't be that expensive of an acquisition. I mean it's you know north of ... Maybe a billion dollars might get it done. >> Yeah. >> You know so would you pay a billion dollars for Hortonworks? >> Not out of my own pocket. >> No, I mean if you're IBM. You think that would deliver that kind of value? I mean you know how IBM thinks about about acquisitions. They're good at acquisitions. They look at the IRR. They have their formula. They blue-wash the companies and they generally do very well with acquisitions. Do you think Hortonworks would fit profile, that monetization profile? >> I wouldn't say that Hortonworks, in terms of monetization potential, would match say what IBM has achieved by acquiring the Netezza. >> Cognos. >> Or SPSS. I mean SPSS has been an extraordinarily successful ... >> Well the day IBM acquired SPSS they tripled the license fees. As a customer I know, ouch, it worked. It was incredibly successful. >> Well, yeah. Cognos was. Netezza was. And SPSS. Those three acquisitions in the last ten years have been extraordinarily pivotal and successful for IBM to build what they now have, which is really the most comprehensive portfolio of fit-to-purpose data platform. So in other words all those acquisitions prepared IBM to duke it out now with their primary competitors in this new field, which are Microsoft, who's newly resurgent, and Amazon Web Services. In other words, the two Seattle vendors, Seattle has come on strong, in a way that almost Seattle now in big data in the cloud is eclipsing Silicon Valley, in terms of where you know ... It's like the locus of innovation and really of customer adoption in the cloud space. >> Quite amazing. Well Google still hanging in there. >> Oh yeah. >> Alright, Jim. Really a pleasure working with you today. Thanks so much. Really appreciate it. >> Thanks for bringing me on your team. >> And Munich crew, you guys did a great job. Really well done. Chuck, Alex, Patrick wherever he is, and our great makeup lady. Thanks a lot. Everybody back home. We're out. This is Fast Track Your Data. Go to IBMgo.com for all the replays. Youtube.com/SiliconANGLE for all the shows. TheCUBE.net is where we tell you where theCUBE's going to be. Go to wikibon.com for all the research. Thanks for watching everybody. This is Dave Vellante with Jim Kobielus. We're out.

>> Announcer: Live, from San Francisco, it's theCUBE, covering AWS Summit 2017, brought to you by Amazon Web Services. (bouncy techno music) >> Hi, welcome back to theCUBE, live in San Francisco at the AWS Summit here. I'm Lisa Martin, joined by my co-host Jeff Frick. Our next guest is from Sumo Logic. We have the VP of Product Marketing, Kalyan Ramanathan. Welcome to theCUBE! >> Thank you very much. Very excited to be here. >> Very excited to have you here. So, tell us a little bit about what Sumo Logic is doing with AWS and machine data. What services are you delivering, who's your target audience, all that good stuff. >> Yeah, absolutely. We are a cloud native, i.e., SaaS-based, machine data analytics platform, and what we do is to help our customers manage the operations and security of their machine-critical applications. Right, so we are an entirely AWS-based customer, we've been using AWS since our inception. What we do is to provide machine data and machine learning so that our customers can manage the performance of their applications, right. So, what is machine data, you might ask. So machine data typically includes logs, metrics, events, anything that your application is generating when it is running, when it is serving the enterprise's customers. And what Sumo Logic excels at is to ingest this data. We collect and ingest this data, and then we apply a lot of analytics on that data. We have some patented machine learning technologies that helps us correlate this data, get insights from this data, and then using this data, our customers manage the applications that they are providing to their end customers. >> And it's not just their applications that are co-located at AWS with your application, it's beyond that, I assume. >> Absolutely, I mean, we have customers from, you know, very different walks of life, we have customers who are on-prem, customers who are down the hybrid path and moving to AWS, and customers who are on an AWS. You know, I can rattle off a queue of great names, Pinterest, Twitter, Airbnb, are examples of customers who are born in the cloud. They run on AWS from the very get-go. And they use us today to manage the security and performance of their applications. We have other customers who have migrated to AWS, Scripps Network, the guys behind HGTV, it's a great example of a customer who was running applications in their on-prem data center, and then one day decided that they are a content company, and they don't want to be running their own data center. >> Right. >> And so they wanted to move their applications to the cloud, and they used Sumo Logic to help migrate their applications to AWS. >> What are some of the barriers that you help customers overcome when it comes to maybe that daunting task of migrating services? >> Yeah, that's a great question. You know, the first thing that someone has to do before they start to migrate their applications to the cloud is to understand what is it that they have within the data centers, right. If I don't know what I have, how do I even migrate that to the cloud? The first task is obviously provide visibility into what is within their data center. And that's where Sumo Logic comes in, right. If you deploy Sumo Logic, and if you implement Sumo Logic as a SaaS service, the first thing that we do is to provide you complete visibility into your applications. All the application components, the infrastructures that the application is deployed on, the services that the application may be using. The next thing that you want to do is start to migrate your workload to the cloud. But you want to do this in a very thoughtful way, and what that means is that you start to move your applications and your infrastructure to AWS, but then you do this cut of work to AWS, only when you are convinced about the performance as well as the security of that application in this new environment. So the ability to baseline what you have in your current environment, and then compare it to what it might look like in this new environment within AWS is extremely critical, and what Sumo Logic helped Scripps Network do is to essentially compare and contrast how they are performing in this new environment. And when they were extremely comfortable that their security and their performance was no less in this new environment compared to what they were doing in the data center, they were able to flip that switch and complete the move over to AWS. >> You guys are in an interesting position, because you were born in AWS, essentially, cloud-native, and you have a lot of customers that are running in AWS. And so you guys did a survey, a report, really kind of taking a look at what's actually happening with cloud-native companies running their apps in AWS. I wonder if you can kind of give-- What did you guys find in this thing? >> Yeah, absolutely Jeff. And this is, the report that we put out towards the end of last year, I think is one of the first start leadership reports that gives, you know, people in AWS, a birds-eye view into how are their peers, you know, deploying, architecting, and managing their applications within the AWS environment. So, how did we put this report together? Sumo Logic has over 1200 customers under management today and more than 80% of our customers are, you know, using AWS today. They are implementing their applications within AWS. So what we did was to anonymously mine data from our customers, and publish a report that provides the set of best practices, and the commonly-used techniques and architectures that, you know, the leaders are doing and implementing today as they move to AWS. Now there were some great learnings that we found out as we put this report together, alright. First and foremost, we discovered that the stack, that a customer typically deploys in AWS, is very unlike the stack that they deploy within their on-premise data center. So, how does that work out? I mean, so, many of the AWS customers that we mined here, happen to use Docker extensively within their AWS environment. In fact, 18% of our customers, this was last year, already are using Docker, you know, for the production application. Which is pretty amazing, given that Docker is just, you know, two or three years-- >> Well hopefully Solomon and Ben are watching, we actually have another crew with Docker-- >> Absolutely. >> Right now. >> We'll have to report that back. >> You know, Docker is all the rage, no doubt about, and we are seeing, you know, increased adoption of Docker across the board, among all of, for AWS customer. The other thing that we found very interesting was that the applications that you may typically expect to succeed in your data center, are not quite doing that well in the AWS world. I'll give you a good example, in the database world, you would expect to see Oracle and SQL Server, you know, ruling the root within a typical data center today. You go on AWS, that's not the case at all. The NoSQL databases, right, are the leading vendors of databases within the AWS world. MongoDB, Redis, you know, are well ahead of Oracle and SQL Server when it comes to AWS. When it comes to web server technologies. You know, Nginx and Apache, you know, are well ahead of IAS, which happens to be the web server of choice within the data center world. Now we've also seen, you know, pretty amazing adoption of Lambda Technologies within AWS. I mean, that's to be expected, a certain bit, because I know AWS is definitely pushing it, but again, 12% use it within a production environment. You know, one year into Lambda, GA in some sense, is pretty astonishing numbers, so-- >> What was your takeaway? Was it because of the applications that are deployed, is it because, kind of, historical legacy of what Amazon offered, kind of for an on-prem versus an on-prem, you know, those early business decisions, not so much today, but, you know, years ago, when there was the security and public cloud, you know, it was a very different conversation three years ago. What were some of your takeaways as to the why? >> The takeaways that I think, there's a meta takeaway here, and let me start with that. The meta takeaway is that as people are building applications in AWS, native AWS applications, or as they are migrating their applications from an on-prem data center to, let's say, AWS, this is giving IT architects the opportunity rethink how their applications are constructed. You know, they are no longer bound by the old shackles of, if I have to use a database, it's Oracle or SQL Server. If I have to use a IIS web server, it's IIS or some other option. >> Right. >> So, once you are unchained from these shackles, you have the ability now to rethink and re-architect your application from scratch to target and to focus on this amazing new world that the cloud, you know, offers. So that's the, that's a big meta takeaway for us, and, what we have learned is that once you are unbound, you can come up with new technologies and new ways of doing things that are adopted and better suitable for this new space. That's one. The second thing that we do see, obviously, is that the vendors of yesterday are not yet focused on the cloud technologies. It may be heresy to say this, but, you know, Oracle has not found a cult religion until very recently. And that's why you see Oracle as not doing a lot, or not making a dent in, you know, in cloud places or in cloud technologies like AWS. >> Right, right, it's just interesting, that procurement angle, because, as anyone who's ever been at a relatively small company, trying to sell into a big company, one of the biggest hurdles is actually just getting on the procurement list, becoming an approved vendor. So, it's interesting to think about that from the other side as a consumer. That if now you are unshackled from the approved vendor list, and you, because if now the only approved vendor is Amazon, and now you have this whole breadth of things to choose from within that ecosystem, that, how that could really impact your behavior and what you actually buy, build, and deliver. >> Yeah, I mean, I think that's a great point too. I mean, there are economics involved here, there is the friction of adopting certain technologies to AWS, which also makes it a little harder to adopt some of the more traditional software applications in the AWS world. Now that's why AWS obviously has come up with the notion of a marketplace, and Sumo Logic, you know, we face the same challenges when we are signing up customers, right. We have some big-name customers who, you know, if we have to sell into those customers, you know, we have to get into their procurement list, we have to, you know, go through a few rigamaroles-- >> Jeff: Right, Right >> To even get into that list. That's where, you know, getting into the AWS marketplace has really helped us a lot. Now you have one vendor, you have one relationship, you have one payment terms, and that vendor is already on your approved list. And so, hey, Sumo Logic comes along with the rights. >> So, definitely a simplification there, which was one of the themes in the keynote this morning, as well as this unshackling. What are your objectives for the report, are you going to be either going back to some of your existing customers or to new customers to show them all of these best practices that you've developed? >> Yeah, I mean, I think our goal of this report, obviously, first thing from us is to make this an annual report, we plan to do this every year, write it on reinvent. And what we want to do is to provide our community, who are mostly AWS shops today. We do have a few Microsoft Azure customers, and we are starting to see some Google Cloud platform customers too. But what we want to do is become the hot leader, who not only serves his customers, but also provides them a road map, in terms of, you know, how should they be adopting these cloud technologies. >> Jeff: Right. >> What are their leading-edge peers like the Twitters and the Airbnbs and the Pinterests of the world starting to do. Obviously, in a anonymized way, we don't want to be calling out any of our customers by name, but here is how you need to think about architecting your applications in the cloud. There is an opportunity, as we said, to, you know, break open from the chains of the past, redo this. We want to help our customer redo this well. >> I'd love to get your perspective, what are the, you know, and I think we're past the security and some of those kind of historic impediments, to you will, to public cloud adoption, but one of the ones that still comes up all the time is the rent versus buy, and you know I think it goes back to the tested roots of, yes, it's great to rent for awhile, but at some point in time, when you hit some scale-- >> Kalyan: Right. >> The business model flips and now it's more economical to buy and operate your own. But what we see in the slide that Werner showed today, there's plenty of customers, Netflix, of course always being the flagship, that are giant, and must have a giant AWS bill every month, who have chosen to still leverage them as their IT platform, and not flip the switch to a purchase. So you know, kind of either from the survey or anecdotally with your own customers, and you as a company, you know, what impacts that decision and do you have, like this review every couple of years, when those CFOs go, "Ah, we're paying these guys a lot of money," should we build our own stuff, but clearly you haven't gone that route. >> I mean, there are definitely enterprises who are still on-prem today, I think the last stat that I heard from Gartner is that 20% of enterprises have flipped over to public cloud infrastructure. 80% is still running things in the cloud, you know, within the data center, maybe a private cloud or maybe in the traditional old ways of running applications. But that tide is definitely turning. And what we see from many of our customers is that there are many reasons for customers or enterprises to now start adopting public cloud. Economics is obviously one, I mean, there is a big advantage of going from Capex to Opex, it obviously makes a lot of sense to do that. The second thing is that what we see is that it's not just about moving the application to the cloud, it's also having the right tooling around the application that can now allow you to manage that application, manage the performance of that application, the security of that application, the deployment of that application in the public cloud environment. And that has taken a while to mature, and I think we are already there, I mean, in an event like this, you can see so many companies come up with new, innovative ways of managing applications within the public cloud environment. And I think we are there now, I mean, the pendulum has swung, and we have enough technologies now to do this with a very high level of confidence. The third thing I would say, and you know, we keep hearing this from our customers again and again, and you know, I brought up Scripps as a great example, you know, we just did a public webinar with a company called Hootsuite, and, you know, they are a social media management platform company, and one of the comments from the Hootsuite VP of Operations was very telling, he said, "Look, I can do this, I can run my own stuff, but do I really want to do it, right? I am a social media company, I want to provide the best application to my customers. I'm not in the business of running a management technology, you know, on-prem or even, for that matter, you know, within the four walls of the company itself. What I want to do is focus on where I can deliver the best value to my customer, and that is by delivering a great social media application." >> Lisa: Exactly. >> "And I want to let the infrastructure game, the management game to the experts," right. >> Focusing on their core competencies to really drive more business. >> I mean I think we are definitely starting to see that, there are certain verticals that have adopted this, you know, wholeheartedly, retail is a good one, media is a good one, there are also cost pressures in those verticals that are forcing them to adopt this at a much faster pace. Financial is kicking and screaming, but they are also getting on board. >> But definitely from a thematic perspective, you talk about maturation, maturation of the services, maturation of the technologies, and maturation of the user. So we want to thank you so much for stopping by theCUBE, great to have you here. >> Thank you very much, I mean, it's been a great conversation with you guys, and it's a great event. >> Excellent, well for my co-host Jeff Frick, I am Lisa Martin, you're watching this on theCUBE live in San Francisco as the AWS Summit. Stick around, we'll be right back. (bouncy techno music)

(upbeat techno music) >> Okay, welcome back to SiliconANGLE's Cube special two-day coverage of Mobile World Congress 2017. The hashtag is #MWC17. My next guess is Emily Mui who is with SAP Cloud, formerly SAP HANA Cloud. Great to see you. Thanks for coming in. >> Good seeing you again, John. It's been a ... Over a year. >> Since Sapphire, since the big news of ... >> That's right. >> The cloud team kind of really showing its stuff. >> Yes. >> That was called the the HANA Cloud. >> Yes. >> Now it's called SAP Cloud. The name changed. Give us a little bit more deeper ... Meaning behind the name, why the name changed, 'cause, you know, everyone knows what HANA is. >> Yes. >> HANA's got a great brand name. >> Right. >> Why drop HANA? What's the deal? >> Well, very good question. I like to talk about ... I've been with this product for over two years now, and I've really seen the evolution of the product. We have so many more capabilities than we did about three years ago, and a lot of it is customer-driven and demand-driven and market-driven. So what we realized is that yes, we have a lot of customers that wanted to do real-time decision, but then we also had a lot of customers that wanted to talk about IOT, use IOT. They want to talk about machine learning, they want to talk about analytics, so it's not just about HANA. So the name change really helps reflect the product and the evolution of this platform as a service that is now known as SAP Cloud Platform. >> So mainly what I hear you saying is that it's gone broader than that. So it's not ... HANA was like a Ferrari, something really good and was great at what it did ... >> [Emily] Yes. >> And that's all great, but the Cloud is more, right? >> Exactly. >> [ John] And what specifically more would you mean? Non-HANA solutions, or ... Greenfield opportunities? >> We have so many customers that do different things, and they're the ones that are helping us understand what is needed to be in the product. So there are many, and what we've learned is that there's a lot of business value that they're seeing from it, and they're the ones telling us that they're trying to be more agile, they're trying to optimize their business processes, and what's interesting is they want to become digital, and I'm not talking about the Ubers of the world, or the Airbnb. I'm talking about those traditional brick-and-mortar companies, manufacturers that are trying to figure out, how do I stay competitive? How do I get one step ahead of the game, and how do I use technology to do that? >> One of the things I love about Mobile World Congress is that it's like CES but in a different way. CES is hardcore early adopters. Yeah, Mobile World Congress is a lot of people who love the device news, yeah, so-and-so's got a new phone, 5G's going to be amazing, it's going to power autonomous vehicles. So, there's some glam and sex appeal inside with some of the tech, but it's almost like a meat and potatoes kind of show in the sense that it's mostly, it's a very business deal-oriented show. A lot of telecos trying to figure out their future, a lot of enterprises trying to figure out how things like network function virtualization works with mobile apps, so you're seeing kind of what I call the early adopter market be more of a CES, and Mobile World Congress be more of a ... Okay, how do you make it real? So this seems to be the topic that we're seeing across the hundreds of events that we go to at theCUBE a year, which is you have the Ubers and Airbnbs, the pioneers, the Facebooks. Then you have the settlers who come in and say, okay, I get it now. I understand what digital transformation means. Now I want to operationalize it. And Amazon Web Services has been so much success with their cloud, in the enterprise, of all places, now. So that's a tell sign that ... Real businesses ... >> [Emily] Yes. >> Not the unicorns, want to use the technology. >> [Emily] Right. >> Do you see the same thing, and can you give some anecdotal or specific examples of how a normal business gets SASSified, and what path does it take? >> So, a really good point and really good question. So one of the customers that is actually going to be at Mobile World Congress is Mapal, and they are a mid-size German precision tool manufacturer. And you think, how are they going to use the cloud and cloud technology to help them improve their business, and it's quite interesting, because they're trying to become digital. They are, you know, and this is ... Their way of doing business is not different from how anyone else is doing. They're trying to connect their suppliers, their customers together, and then be able to track what's happening with the tools that they're manufacturing. The whole life cycle of that tool, from the minute they actually start manufacturing to the point of selling it. But they're using technology to do that, right? And so they're using that SAP Cloud platformm creating the application, and then being able to track what's happening and then providing visibility to their customers, to everyone on the plant floor, to their suppliers, so they're connecting everyone together. >> You know, Emily, I was just talking with Jeff Frick, who runs theCUBE. We had our Silicon Valley Friday show last week, and we were talking about some of the conversations that we hear in cloud from some of the normal businesses out there, and things like microservices ... It's a geeky term, but microservices, containers, a lot of application conversations happening, so you hear that, and also you hear about integration. So these are the two hottest areas that we see, because basically, the SAP has been in the process business. We value chains and manufacturing, customer support, and CRM, ZRP, all that good stuff that goes on, but now, those are being completely shattered and reconfigured with cloud. So integration is top of mind, whether it's an IOT, internet of things or a new application. How does this all get threaded together? Can you share some insight into the SAP Cloud strategy, and what things do you offer to those customers, because that seems to be the critical decision point for most CXOs on the cloud SASSification. >> That's another good point, because we see a lot of customers trying to connect. They're trying to figure out how to get to the cloud, and no one is immediately jumping to it, so they've got different applications that they're trying to build out, but in order to do that, they have to connect their backend, right? And not all of it is cloud application. Most of it is on-premises, and so you've got legacy systems, you've got some SAP applications, you've got some other ... I shouldn't mention venture applications, and then they're trying to figure out how do you extend and create new applications? So how do you bring it all together? So integration is one of the key services that we provide. APIs, integration ... We've also invested in microservices technology. SAP's heavily looking into that and seeing how we can help those companies out there who want to leverage that type of technology. How do they bring all that together? Build small applications, connect everything together, and then build out an application that will help support their business. New opportunities for their customers to make their customer experience better, for their employees, and trying to track talent. So there are a lot of different use cases where ... >> What are the top three use cases that you're seeing there right now from your customer base, as they look at the HANA Cloud ... Well, it's not HANA Cloud. The SAP Cloud. >> Yes. >> New name. When they look at it, what do they gravitate to? What does the ... I mean, it's not all the same, but I mean, some low-hanging fruit. >> Right. >> Most people say, oh, test/dev, but probably in SAP. What is that low-hanging fruit for you guys, and where do you see more of these ... >> Integration. I mean, a lot of times, they start with integration, because they need to bring that together, but integration's kind of a means to an end. So, an example I can think of is we have a customer named Owens-Illinois. They're a glass manufacturer, another real business, right? It doesn't always sound so sexy, but the reality ... >> They're billion ... These are billion-dollar businesses out there ... >> Yes, exactly. >> That aren't called Uber, and no one's ever heard of them, but they're businesses, doing their thing. >> Exactly. And they need to be able to integrate their backend. They had this one specific requirement where they had to quickly meet the requirements of the Peruvian government, because they needed to create e-invoicing, and if they weren't able to bring together their backend systems, build out this application to do e-invoicing, their plant in Peru was going to get shut down. So, really good example ... >> [John] A critical path item. >> Exactly. Integration, and then being able to extend that. So those are really key examples of what our customers are doing, and then of course innovation, just coming up with something completely brand new. You know, there's so many examples of of those types of ... >> You know, you mention some of these traditional businesses, whether they're a glass company or a tooling company or whatever. This is really highlighting the big trend, internet of things, or IOT. AI kind of gets bolted into that 'cause it's got machine learning and using data and things. Is the digitization of business ... It's not just like IT and getting your email and things of that nature. Seeing the industrial, analog side of the business being digitized, so, with sensors ... You can't look any further than some of the more obvious consumer examples, the Tesla car, self-driving cars, drones, all have data. And so that's kind of a mental model for most folks, but it could be plant and machinery, it could be airplanes, flown off data ... This is the industrialization of this new era. >> Right. >> [John] Of data. >> Yep. >> That's connected to the internet. Therefore, it is an internet-connected device that needs to be managed. So this is a new use case that points to some of these businesses that are now digitizing. Is that a big part of the new IOT service, and how do you guys talk to that market, because some of it's not an IT market, they're like a normal business market, that might have SAP accounting software, or manufacturing software... >> Well, I mean, I think, like most companies and most people out there, everyone's a consumer, right? We talk about companies, but within those companies, we're talking about employees, people, and everyone has a phone, a smartphone of some sort, if not an iPhone, an Android device. There's so much data that's being generated. I could give an example of my teenage ... Just turned teenage boy, and I don't want him to carry cash around. He wants to go to Starbucks, so I make sure that he has an account set up. So it's easy. All that ... Just think about the way he's transacting. He walks into Starbucks, and he can pay. I can see how much he's paying, what he's buying, right? So there's so much data, and businesses are transacting in such a way that they've never had to do before. >> [John] Do you track his location? >> That too. I know when he's going in the wrong direction. He's on the wrong bus, right? So, there's so much data, and businesses have to figure out what's the best way to monetize that, to create opportunities from it, right? And to provide that experience for their customers and then come up with new solutions and new products and new services. >> That's a great parent story. I feel the same. My wife and I have the surveillance tracker, and that's part and parcel to us paying for the phone, so. >> [Emily] Right. >> Quid pro quo. If they want to pay for their own phone, they can be anonymous. But that brings us back to the customer. I want to get back to the customer impact, because the challenges are also opportunities, so what are some of the key challenges that your top customers face in the cloud. Because I think right now, it's pretty obvious that Mobile World Congress is kind of proving it's no branch of the cloud. It's really the business model behind it. Okay, I need to have my business model align with the value preposition for what we sell to customers, and how do we execute that operationally? >> [Emily] Right. >> So, take us through how you guys help customers through those challenges and turn them into opportunities. >> Well, first, John, we listen to what those challenges are. We've heard it over and over again. How do I ... How does the company become agile? How can they stay competitive? And you're always trying to stay one step ahead of your competition, and how else do you do it? So agility is really important, and when we talk about agility, we're not just talking about being able to create an opportunity quickly. It's how can you become flexible? How can you integrate your backend quickly? How do you support your new business requirements? If you're IT, how do you support your business partner very quickly? So it's about agility, and we provide the software that will help them do that. The cloud platform allows them to quickly integrate and extend those applications, and then of course, optimizing business processes. Who doesn't want to be efficient? I don't know how many businesses out there who wants to do things this old-fashioned, slow way. They're always trying to do it better and quicker. >> They got to preserve the old, but kind of bring in the new at the same time, it's a ... >> Right. So how do we help them optimize that? So they're asking us that all the time, and we're SAP, right? Our bread and butter, ERP, CRM, applications. We know business processes, so we understand what it takes to help them optimize those business processes. >> I didn't get a chance to ask Dan Lahl, who I interviewed earlier, about ... Who's Vice President of Product Marketing at SAP Cloud, your colleague. I didn't get to ask him this question, but this is important. Customers want to know ... That their partner, in this case, SAP Cloud, has a healthy ecosystem around it. Why is an ecosystem important, a healthy ecosystem important for customers, and then what does SAP Cloud doing to foster more innovation and openness and relevance in that ecosystem? >> Another really good question, because SAP has a history of building out an ecosystem for partners, and with SAP Cloud platform, what's great about it is it's technology that our partners are, today, leveraging and creating applications. So for those integrators, systems integrators who work really closely with our customers or their customers, they understand their businesses. They're very intimate and close with them. So they're developing applications that will help support their needs, and there are actually a lot of these partners. We have over a thousand applications that have been built by partners today. We have 600 partners that are building applications with SAP Cloud platform, and that's quite remarkable, considering the product has been around ... for just three, four years. Four years. So, it's really good news. Our partners are really invested in this technology. >> Can you comment on some of the big news that's happening at Mobile World Congress, specifically around this concept of an integrated solution set? So we see 5G was a big announcement by Intel. You're seeing autonomous vehicles as a showcase. You saw them at CES by the way, too ... It was an auto show there, too, but it allows people to really get a sense that it's not a stovepipe or a silo anymore of software stack solutions in that, you know, you need some bandwidth, you need some glue software, you need some third-party solution. You need to have things componentized or Lego-blocked kind of designed in, so this is kind of this new fabric. Could be IOT from machine manufacturing equipment, to wearable computers, all kind of coming in. That's kind of the new solution set. What's the vision for you guys on that? >> You know, at Mobile World Congress, we actually have a couple really cool demos. I should probably say they're not just demos, but they're actually exhibits. We've got a connected vehicle. We talk about the connected stadium, and when we talk about the connected stadium, we're talking about the whole experience of someone coming to an event and then being able to use their iPhone or their Android device and be able to buy their food, be able to understand what's happening and know what, you know, be able to go to their seats, and things like that. Help them through the whole experience with a connected vehicle. Be able to rent a car, and then be able to create an expense report, all on their phone. All of that needs integration. >> [John] It's a mashup of all kinds of stuff. >> Exactly. >> An accounting system is now part of feature of a stadium. >> [Emily] Right. >> A cool sports venue. >> Think about all those business processes that have to be integrated, and not just on the IT side, but all those business processes. So, like you said. >> The speed is critical. You have to have low latency ... >> Yes. >> And great software to make that work. >> A repository, right? To be able to collect all that data, streaming data, bring all that together, and then be able to analyze and then make decisions and then trigger actions immediately, so. >> All right, so, let's go through some of the cool highlights real quick. I know we have limited time. I want to get to it. In terms of the demos, you mentioned the stadium thing. What else do you have? Explain some of the demos, and kind of give a little bit of a quick synopsis of each demo, and the coolness of it. >> Yeah, so, definitely, like I mentioned, the connected stadium's going to be a cool factor. The connected vehicle. We're going to have a car there, so that's going to be fun to watch, so, the fact that it's all connected. It's all IOT. It's through your phone. It's rental. >> [John] What's going to be in the car demo? >> Lots. (both laugh) Through the iPad, you can see certain things. I don't want to give it all away. >> So go to the demo. If you're in Barcelona, we're here in Palo Alto. >> [Emily] We'll have examples of what exactly the ... >> But what is in the car, because, if you think about it, obviously, over the years, I've seen tons of demos on stage, certainly at Sapphire and the big events. And there's a lot of real-time dashboarding stuff. Is that some of the ... The glam and flair going on at the demos? >> That's some aspect, yep. Yes. So, I can't give anything away yet. We want people to watch when we're there, but yeah. So there's going to be some cool demos there. And then we're actually going to be showcasing ... Intel, who's also a sponsor, for this particular show. This time around. Yeah, so we're going to be showing a prototype of a really simple IOT example, where we're going to connect it with Google Home and Amazon Echo, and we're able to control this little prototype building, send elevators up and down, all through bot technology. >> So SAP as a company's moving from a back office powering 80% of the world's businesses to a much more front-end, agile solution provider with technology ... >> [Emily] Exactly. >> Using the cloud and big data. >> And digital. >> [John] And digital. >> Yeah. And all of that is because our customers are demanding it. They see it, they know that ... They trust that we can help them along the way, on the backend as well as on the integration front, and help them become digital. >> But this is the transformation you guys have been at HANA. The system of record, that's the database and software. System of engagement, that's free-flowing data, and now you have AI ... >> [Emily] Yes. >> Kind of automating a lot of that real-world examples, so that seems to be the same. Nothing changes on the SAP vision on that front. >> No, it's an evolution. So I think all the technology components are in place. So AI, predictive, machine learning, that's been around forever. It seems like it's the holy grail for marketers, for people in risk management, you name it. Everyone wants to be able to use analytics. >> It's all integrated. >> Yeah, and now you've got the database, you've got the in-memory database, you've got the streaming capabilities, you've got ... There's so many different components that are now ready and in place to make it actually a reality. So it's exciting. >> Emily Mui with SAP Cloud Group. Final words, somewhere that you'd like folks to walk away with from a customer standpoint and impact here, Mobile World Congress this week. What's the big story from your perspective? >> Big story is that we've got a great cloud platform solution that people are just learning more about, and they should learn more about it, because we've got all the components, all the services available to help them become a much more agile business, help them optimize all the business processes they have in place today and the ones they're looking to create, and then of course becoming digital. It's become a benefit for them. It's an actual benefit to become digital. >> The IOT really highlights your value proposition as a company in general, and the cloud opportunity is just right ... Right lockstep with that. Congratulations. Thanks for coming out. >> Thank you. >> Emily Mui, here inside theCUBE in Palo Alto breaking down and talking about Mobile World Congress. Special two days of coverage here at Palo Alto. I'm John Furrier, thanks for watching. (upbeat techno music) (bright instrumental music)

>> Announcer: Live from Las Vegas, Nevada. It's the CUBE, covering AWS re:Invent 2016. Brought to you by AWS and its ecosystem partners. (light techno music) Now, here's your host. >> And we're back, happy to welcome back to the program, regular guest on our program, David Richards, who is the founder and CEO of WANdisco. David, anything interesting happen since last time, you know, we've talked to you? >> David: Well I kind of got, you guys are a bad omen for me. Kind of left the CUBE in New York, got off a plane, got fired, and then four days later got reinstated. Apart from that, virtually nothing's happened actually. >> Hey, you know it's good coverage in The Financial Times, and then lots of press and everything, so lots more people know about WANdisco now, right? >> David: That's right, and I don't have Tourette's, I promise. (laughs) >> Alright, David, AWS re:Invent, I mean, pretty impressive show, you know we see you in a lot of shows, many of them interesting, lots of smart people but I mean, wow this is pretty impressive. They got up on stage lots of things that I'm sure interest you, give us your take of the show so far. >> It's fascinating, I mean, this sort of must have been, I wasn't there when, you know, Steve Jobs was launching the first Mac and so on, but this kind of feels, more than just a small movement. This is a large shift in enterprise, moving from On-premises to Cloud, I think it's unquestionable that's happening. I mean, I'm sure you've covered it this week on The Cube. I've not seen it, but 32,000 people are here. Virtually every single vendor that you could ever think of is exhibiting in this exhibit hall. You can barely move about the people. Our booth traffic has just been phenomenal this week, and it really feels like this is a seismic shift in the marketplace. I know we've been saying that for a while, but it really does feel that way. >> Why do you think now, is it just, we just got here, and it's the overnight success that's been ten years in the making, or was there an event or something that really, kind of, tipped it over to where we are, because clearly, it's very different than last year. >> It, sort of, Cloud V1, and you guys have been covering this for a long time, was really companies that were born in the Cloud, it was the Airbnbs, it was the Tinders, it was the Facebooks and so on. Those companies were actually made, born in the Cloud. What's now happening, clearly, is enterprise is moving to the Cloud, and Cloud 2.0 really is about a different set of requirements, a different set of customers. There are customers with massive petabyte-scale data sets that they really can't take advantage of, they can't really scale out, it's too complex for them to build many of the applications they need to build, they now have to move to Cloud, and, you know, 32,000 people are not here just for the sake of it, they're here because they have to be here, because they're moving, obviously, to Cloud, and AWS have such a massive lead, I think, in the Cloud at the moment and Enterprise Cloud, and that's probably why so many people are here. >> David, one of the interesting things to look at at this show is, Amazon has some opinions about where data lives, how it moves, where you process it, you know, all of those kind of things. You guys are kind of opinionated on those kind of things too so, you know, give us your view on those kind of, those guys. I mean, I made a comment on Twitter, it was like, "Hey, what do we call a data lake when it's in the Cloud now?" >> Jeff: Well look, that's what happens to Clouds, they-- >> One of the big reveals in Andy Jassy's talk this morning was a truck coming across the front of the stage, and I've had so many emails saying, is this real, is this a joke, are we now really moving data in a semi from On-premises into the Cloud? And, it's kind of interesting, I think it's a little bit of a gimmick to be honest with you, I think Amazon do lots of great things, there were lots of wonderful announcements today, like opening up Alexa and allowing, you know, and some of the things they're doing with serverless computers, just phenomenal, but I think a truck to move data from On-premises to Cloud, kind of feels like we're back in the 1970s to me, whereas I was talking to a, the CIO of an automotive company a couple of weeks ago. They have a problem where, you know, to move data causes an outage in their organization today of about 30 hours. Their data growth is going to be so vast, the velocity is going to be so great in the next 12 months, that if they use the existing technology today, that they have today, would take them in the region of a month to move that data. So, trucks are great for cold, archival data, well they might be great for cold, archival data, I'm sure you could figure out a better way, like the internet to move it, but for our active transactional data, data that changes and moves, that's critical to the organization, you simply can't put it on the back of a truck and basically mail it to Amazon with a Snowball, that really doesn't work, and I think the market really needs to be educated a little bit about what's possible. >> Well, and I don't know that Amazon would necessarily disagree with you. I mean, if you look at the Snowball family, they had the Snowball Edge out there, which was realization, hey I might want compute, and even, we're going to give you that new green grass Lambda, serverless type stuff, so that you can do processing where there's no network, or I can't do anything, but, I guess, we know from a physics standpoint, I understand, you know, the internet is great, but, you know, if I want to move, you know, 100 petabytes or more of data, you know, even if I'm a Telco, that's a ton of data that I need to move. So, tell me where there's this connect. >> So, the way that WANdisco's technology works, is we continually replicate data, so where every other form of data replication is time based, it requires the concept of a clock, like, even Google, who've got Google Spanner, which is kind of active/active replication, but relies on a satellite in the sky, on atomic clocks, GPS clocks on every single server. We don't have any of that reliance, we're transactional data replication, which means if something changes, it gets replicated, and that process is continuous, which means that you can basically move data applications without any downtime or interruption to service. And that's absolutely critical for what I called earlier Cloud V2, which is the enterprises moving to Cloud, they have to be able to get there without any interruption to service. Small data, yeah, you can use that kind of technology, or non-strategic data, yeah, you can use this kind of technology. Strategic data and strategic applications, trading systems, you know, you can't be 99.99% correct if somebody's got cancer or not, right? If you're using the Cloud, or machine learning technology to figure that out, you can't be, you know, almost certain, you need to be completely certain, and that requires data to be where it's supposed to be. >> So, Amazon's a partner of yours. What's it like being a partner of Amazon's these days? Give us your point on that. >> Amazon are a phenomenal company. They have to be, right, they've just built, probably the world's most valuable enterprise technology business by a country mile in ten years. I mean, it's just, you know, zero to 10 billion in (snaps fingers) the blink of an eye is just incredible. And part of their secret is, they base everything on data, and I've learned a lot from dealing with Amazon actually, everything is data driven. You know, they have this Five Why's, I'm sure you've read about it in the media, where you have to prove, through facts and figures, not sentiment, that something is so, and that's pretty uncomfortable for a lot of people. For us, it's not, and it's, working with Amazon, their requirements, the bar is so high it's made our products much much much better. They have a well-architectured review that they go through with all their partners. They're actually great to partner with, if you're not a very good company, I would, daresay, don't bother because they'll find you out very quickly. But they're a great set of guys, very very good to partner with, it's very black and white, it's very quantitative, but, yeah, they've obviously got a huge market. >> Yeah. One of the things I love about this show is that the quality of people, you know, is phenomenal, and you get such a, I mean, a huge cross-section, not only location, size, industry, but one of the things I think that is across everybody that comes here, is they're trying new things, they're open to, you know, moving forward, iterating, learning, which has been one of the things that, you know, we kind of say what holds companies back is like, oh I'm doing it the old way. So, what's your experience been with the users? Any stories you can tell from that standpoint? >> So, right down to the bottom of the organization, they're prepared to take any idea. I mean, Amazon Web Services, for goodness' sake was basically a paper that was written and presented to Jeff Bezos, right, who said, yeah that's a good idea to Jassy and said yeah, let's go off and do it. But they, virtually every innovation in their organization is somebody coming up with an idea. They have the mechanics and machinery to listen to that idea. We do it ourselves, so, we're looking at serverless compute and using Lambda so we can have replication literally as a service that you can just call, you can call Paxos, which is our core IP, it's based on Paxos, it's called DConE, so you can call that algorithm and get a replication service. So these concepts, some of the concepts that Amazon are introducing, their ability to move so quickly to introduce new products is because they have this innovative approach where they allow people, right down to the very bottom of the organization, to come up with new ideas and approaches to doing things. And it's perfectly fine for somebody at the bottom of their organization to challenge somebody at the top of the organization. In fact, they expect it. And again, that's not comfortable for a lot of people, but I like the way that they go around their business. >> I'm looking forward to, Alexa, how's my replication doing? (laughs loudly) >> Wouldn't that be great? >> Well, it's interesting you say that, we had Malcolm Gladwell on a month or two ago, and he talked about, the most powerful organizations are the ones that let the fresh ideas bubble up from the bottom because it's the people that have not been tainted by being in part of the company, that had new and creative and innovative, and a different way of looking at it, and oftentimes they get squelched, so the fact that they let those ideas come up, and also driven by data, pretty powerful. >> It's interesting being at the show this week, and I have two types of meetings, I have meetings with companies at the forefront of this Cloud revolution, companies at the forefront of building new, innovative applications that were designed for the Cloud, and then I have other meetings with companies, vendors, who have been caught out by this. They didn't see this coming, they didn't expect, you know, this sea change to happen as quickly as it's happening and they really are fighting and scrambling to know what to do, and this is everything from, you know, the big services companies, the big traditional enterprise storage companies are really struggling to understand what they're going to do with the Cloud, and they don't have those processes and procedures inside their businesses like we do. Like, they can't change and be agile and nimble and take advantage of these new products and markets that are suddenly appearing overnight. >> Yeah, it's funny, the guy from (mumbles) was talking about, they don't want to be a system integrator anymore, right now it's services integration and really changing the way you think about putting this stuff together, it's very different. >> It is very different, and, it used to be the case that you'd get, and I know we've all lived through this, you get the enterprise sales guy that turns up in the $2,000 suit and the Porsche parked outside, and comes in and sells you, you know, a piece of software, and asks you how your wife and kids are doing and all the rest of it. Look at the audience here today. They're not going to put up with, you know, that style of enterprise sales moving forward. People are buying stuff from a marketplace. The expectation is you can choose, select, deploy, and build applications yourself, and that's how many of these companies are operating today. So it's not just the sea change in the technology, the technology's facilitating completely different and new markets. >> Jeff: Behaviors, yeah. >> David, want to give you the final word on, as you leave this show, you know, your takeaways, what you want people to know. >> Clearly we're in an era where, this is going to be an Enterprise Cloud. Cloud 2.0 is all about enterprises that are taking their data from On-premises into the Cloud. It's happening very quickly. 32,000 people are here this week, they're here for a reason, because they have to be. This is a sea change in the marketplace, and I hope, well I know WANdisco's the vanguard of moving many of those enterprises from On-premises into the Cloud very quickly. >> Alright, absolutely, definitely agree with the sea change there. David Richards, founder and still CEO of WANdisco, really appreciate you joining us again. We'll be back to wrap up our coverage of today at AWS re:Invent 2016. You're watching the CUBE. (light techno music)

(upbeat pop music) >> Announcer: Live from San Jose, California. In the heart of Silicon Valley. It's theCUBE, covering QuickBooks Connect 2016! Sponsored by Intuit QuickBooks. (upbeat pop music) Now, here are your hosts, Jeff Frick and John Walls. >> Welcome back here on theCUBE. Along with Jeff Frick, I'm John Walls. As we continue our coverage here at QuickBooks Connect 2016. Gathering here in San Jose at the Convention Center. Third annual gathering with a record crowd of more than 5,000 attendees. (crowd noise) So the show continues to show explosive growth. Which is, I guess you can say a lot about what Intuit's doing, in terms of how it's growing its portfolio, in terms of how it serves the business ... The small business and the medium-size business communities. With us now is Sasan Goodarzi, who is the EVP of the small business group at Intuit. Sasan, good to have you with us-- >> Thank you. >> We appreciate the time. >> Thank you for having me. >> What are the keynote stars today? You were talking about some key things, big things about the company about how we're going to help save time. How we're going to have more accessibility to money. And ultimately what we could do to deliver a better proposition to small business. So talk about that, if you would, a little about that theme on the keynote stage, and how that applies to what you're doing in general with QuickBooks. >> Sure, sure. Well one of the things that our customers have taught us is, that there are three things that are important to them. One is time, so they can actually spend running their business and the product that they're passionate about; versus all the tedious, drudgery things that it takes to run your business. The second is money. It's mind boggling the effort that goes into earning money. But how hard is it for them to actually get access to their money. And then last, but not least, is ways to help them grow their business. They're experts in their industry, but where they need help is ways in which that they can drive growth. And so everything that we do is centered around those three things. And it's what inspires us when we show up to work every single day. So a lot of, obviously, what we talked about today on stage, was just very quick, we call ESPN highlight reels of here's the innovation that's coming your way to either save you time, put more money into your pocket, or help you grow your business, or your practice. >> Sure, okay. >> What's amazing is as I say, as much as they've worked to finally get that sale, a lot of times it seems all the collection side-- >> That's right. >> For small business. A huge issue, getting paid. To do all that work, sell it, have a happy customer and then, don't necessarily get their receivables in line. >> That's right. I know we threw a lot of stats out there this morning. But first of all, 80% of small businesses have some sort of a cash flow issue. And in that context about 65% of them have invoices that are 60 days overdue. And in fact, they live and die by getting paid on time. And so, obviously, the innovations that we talked about on stage today, were how do you get access to those funds right away. >> Jeff: Right, right. >> That's one element of it. The other element is we have all the data of small businesses. And so we know what they're good for. And so we can deliver loans to them on the spot. If they have payables and they want to borrow on the payable to make payroll for the week, or they want to go buy more inventory to grow their business, we can actually fund them very quickly. Literally within minutes. And so those are examples of what we showed on stage today all in service of helping them thrive and achieve their dreams. >> I love to ding into that a little bit, because growth actually exacerbates your cash flow problem if you're not managing it well. And now suddenly you're selling more and you got to buy to fulfill those obligations. But the fact that you almost have a secondary market now for people to be able to borrow money without pulling all their paper together, and trekking down to the bank and hoping they can get it, because you actually have the real data. It's updated (chuckles)-- >> That's right. >> All the time. And it's a different set of data ... Potentially more complete set of data for a lender to actually make that decision, than the stack of paper that they bring down-- >> That's right. >> to the local bank. >> That's right. Well, you know it's interesting. You just said something that triggered a thought. When you think about startups that go out and get VC money ... There's a reason why they have board of directors, 'cause the board of directors what they're looking for is one, do you have a growth plan, but then how do you manage that growth? How do you make sure you have enough money? How much money are you burning per week? And are you going to be able to maintain that growth? Small businesses don't have that. They don't have the board of directors that are actually helping them with some of those decisions. They may not be surrounded by a CFO or a finance expert in the office. And so part of what we're trying to do is just digitize and automate everything so they don't have to worry about that. And secondarily I think to the point you made, helping them with access to money at the point in which they need it. But I think even before we get to that stage, what we're trying to do is help them by being that board of directors without having to have one. Which is to helping them manage their cash flow, their inventory. Because as they're on that growth curve ... One of the main reasons why they go out of business is 'cause they're growing fast, but they're not managing their funds, and they do not have enough money sometimes to make payroll. >> Right. Well we've heard the stat from a couple of different sources but 50% of all small businesses fail in the first five years-- >> That's right. >> of operation. And the use of accounting and accountant, what that could do to increase your odds of being in business for the long term. So certainly you could see where all that is coming in play. You mentioned payments, so we're thinking about Apply Pay. That was one of the announcements-- >> Yes. >> You had. Google Calendar, talking about time. >> Sasan: Yes. >> And then AMEX with the loans. So the power of these partnerships, I'd like to hear from you on that, because, you know, big names, right (chuckles) >> Sasan: Yes, yes. >> That I ... If Jeff or I or anybody watching ran a little mom and pop operation in Morgantown, WV, I've got Apple, and I've got Google, and I've got Intuit on my side. Talk about leveraging that power for small businesses? >> Yes, actually listening to you inspires me around what Intuit is doing for these small businesses. And it starts with our vision of having an open platform. It's less about what we innovate on that platform, but our goal is to bring all of the innovation; whether it's our engineers or engineers outside of our four walls. Bring all of that innovation on our platform, so that in fact we can digitize and automate everything with Google Calendar. So we can go in and we know all of where you spent your time, and help you easily, with one click, invoice your customers. Or, as an example you used, be able to use Apple Pay Touch where you can immediately get paid. But that's because our goal is to have an open platform where we bring all the innovation of the best companies out there to you. So that you can run your business on any device, and you don't have to worry about which application it is, but that we do it all for you. >> I just love the Google Calendar example, because so many great innovations today are basically reassembling stuff that's already out there; leveraging APIs and presenting it in a different way. And so the fact that you're taking advantage of Google Calendar, which so so many people ... You probably know the numbers use ... And then have that drive your billing, have that drive your time management, and then just take advantage of the data that's there, or as Scott said, "Take advantage of the data that's in your phone." >> Sasan: That's right. >> It knows exactly how far you went on that drive to the client. It knows when you left and when you arrived-- >> That's right. >> and when you got home. So the leverage of Cloud platform with APIs, to pull that data in and drive in a seamless integration, it makes (chuckles) it makes too much sense, right? (Sasan laughs) It does, and when you think about someone like Google, where there's a billion people that use Gmail ... >> A billion. >> And most of them are using ... There's a billion people that have Gmail accounts. >> Jeff: Wow. >> And over 60% of our customers use Google Calendar to run their business. And so, it's only intuitive to figure out a way well, how do we automate all of that-- >> Jeff: Right. >> so that the customer doesn't have to use cookbooks for taxes and accounting, then go to Google Calendar to see where they spent their time so they can figure out how to invoice? >> And they type it in, right. >> Just integrate it all together so it's all in one place, yeah. >> How do you all keep focused when your market, your potential market's so big? You've got, I don't know ... I've read, was it 800 million possible businesses, right? Small businesses. >> Sasan: That's right. >> So how do you ... If you look at what would be reasonable growth trajectory and expansion, your plans ... How do you keep your eyes on the target, and how do you determine that target? >> Yeah, that's a great question. Let me start with where you just ended, which is there are 800 million self-employed and small businesses worldwide. And 97 to 8% of 'em actually are not using the Cloud to run their business, or their time. And the way we prioritize is think about the countries that are the biggest opportunity to create virility by those that are using the platform. And so we've prioritized which countries that we're going after, and really doubling down in those countries. And that's where we really are able to focus our efforts in time. 'Cause once we create this, what we call the network effect, the more small businesses and self-employed we get to use the platform, the more we get accountants to be able to see the power of the platform. The more they tell their friends. The more accountants are recommending it, you in essence create this flywheel effect of more and more going to the Cloud. And once we get that flywheel effect going, we'll think about what's that next country that we want to go into. We're not that serial about it, but our biggest focus comes from being clear which countries we're going to play in today, and which countries, for now, we're going to wait 'til we get this network effect going. >> And now you've got this whole new way to work. People that are giving up part of their house or apartment for Airbnb rentals. Or people that are driving in Uber for four hours a couple of days a week. Again, those are all based on systems that are driving that engagement. Do you see that it's just a whole new opportunity, do you see a lot of growth in ... I always forget the technical term for-- >> Sasan: The digamy ... The giga-- >> The gig. >> Sasan: The gig economy. >> The gig economy. >> That's right-- >> Which is a whole new and swelling thing. >> It is. >> And for a lot of those people, they are even less sophisticated on keeping track of their tax withdrawals than the small mom and pop store (chuckles)-- >> Sasan: That's right. >> that's at least been paying their social security for a number of years. >> Sasan: That's right. >> So another huge opportunity for you. >> It absolute is. One of the myths is most self-employed are actually not part of the gig economy. There's the photographer that you may call on to come take pictures of your family, or the landscaper that's a one-person shop. That's 90% of self-employment. About less than 10% is the Airbnbs, the Lyft, and the Ubers of the world. But that number's only going to grow over time. In fact, our view is in this day and age people will work at a company for three to four years at a time. We believe in ten years, people will work for three to four companies in a day. 'Cause they're workers, and they're outsourcing their time to different companies. >> Jeff: Three or four companies-- >> A day. >> Jeff: A day? >> A day. Because in essence, they're self-employed. Now I may work for you and do a job. I may work for you and do a job. That's actually starting to happen today. Except it's a small part of the economy. We believe ten years from now it'll be a huge part of the economy. And that creates a huge opportunity for us, 'cause they're all self-employed. >> Right. >> Before you head out, again, one of the big trend topics, artificial intelligence, machine learning. How do those come into play in your vision for the company's vision, and the products and services that you think you could develop that can be put to use? >> Yeah, in fact we think there are two core competencies that we must have. One is an open platform where we integrate all applications into the platform, whether it's ours or somebody else's. The second is being amazing at leveraging the data, whether it's data from a PayPal app, a Square app our own app. And leveraging artificial intelligence and machine learning, so we can do the work for our customers. So we believe when it comes to data and artificial intelligence, that is actually one of two or three primary core competencies that we are building as a company. And it's something we're not new at. We've been doing this for years. In fact, last year in TurboTax we've reduced the amount of time it took to do your taxes by 40%, by using machine learning. And we're now applying that within QuickBooks. >> I'd like you to reduce my tax liability by about 40%. (Jeff laughs) If we can (chuckles) take care of that and I'm yours. >> Or at least-- >> Well, listen-- >> Or at least get you to the July deadline. (John laughs) >> If you just make less income-- (Jeff laughing) >> That's right. >> I'm sure that's doable. (Sasan laughs) >> If you don't make it, you don't pay it. >> Sasan: That's right (chuckles). >> You mentioned ESPN earlier about the stage and all that. You made top plays today, no doubt about it with the keynotes address. >> Sasan: Oh, thank you-- >> Job very well done. >> Thank you very much. >> Jeff: Cute Kim's (mumbles) coming. >> Sasan: Thank you. >> And thank you (Jeff laughs) for joining us here on theCUBE. We appreciate the time-- >> Thank you, thank you for having me. >> John: You bet. Back with more-- >> Alright, thanks. QuickBooks Connect 2016 here in San Jose. You're watching theCUBE. (upbeat pop music)