(bright symphony music) >> Hello, I'm John Furrier, the founder of SiliconANGLE Media and co-host of theCUBE. We're here in Paulo Alto at our studio here. I'm joining with Joseph Jacks, the founder and general partner of OSS Capital. Open Source Software Capital, is what OSS stands for. He's also the founder of KubeCon which now is part of the CNCF. It's a huge conference around Kubernetes. He's a cloud guy. He knows open source. Very well respected in the industry and also a great guest and friend of theCUBE, CUBE alumni. Joseph, great to see you. Also known as JJ. JJ, good to see you. >> Thank you for having me on again, John. >> Hey, great to have you come on. I know we've talked many times on theCUBE, but you've got some exciting news. You got a new firm, OSS Capital. Open Source Software, not operational support like a telco, but this is an investment opportunity where you're making investments. Congratulations. >> Thank you. >> So I know you can't talk about some of the specifics on the funds size, but you are actually going to go out, talk to entrepreneurs, make some equity investments. Around open source software. What's the thesis? How did you get here, why did you do it? What's motivating you, and what's the thesis? >> A lot of questions in there. Yeah, I mean this is a really profoundly huge year for open source software. On a bunch of different levels. I think the biggest kind of thing everyone anchors towards is GitHub being acquired by Microsoft. Just a couple of weeks ago, we had the two huge hadoop vendors join forces. That, I think, surprised a lot of people. MuleSoft, which is a big opensource middleware company, getting acquired by Salesforce just a year after going public. Just a huge outcome. I think one observation, just to sort of like summarize the year 2018, is actually, starting in January, almost on sort of like a monthly basis, we've observed a major sort of opensource software company outcome. And sort of kicking off the year, we had CoreOS getting acquired by Red Hat. Brandon and Alex, the founders over there, built a really interesting company in the Kubernetes ecosystem. And I think in February, Al Fresco, which is an open source content portal taking privatization outcome from a private equity firm, I believe in March we had Magento getting acquired by Adobe, which an open source based CMS. PHP CMS. So just a lot of activity for significant outcomes. Multibillion dollar outcomes of commercial open source companies. And open source software is something like 20 years old. 20 years in the making. And this year in particular, I've just seen just a huge amount of large scale outcomes that have been many years in the making from companies that have taken lots of venture funding. And in a lot of cases, sort of partially focused funding from different investors that have an affinity for open source software and sort of understand the uniqueness of the open source model when it's applied to business, when it's applied to company building. But more sort of opportunistic and sort of affinity oriented, as opposed to a pure focus. So that's kind of been part of the motivation. I'd say the more authentically compelling motivation for doing this is that it just needs to exist. This is sort of a model that is happening by necessity. We're seeing more and more software companies be open source software companies. So open source first. They're built in a distributed way. They're leveraging engineers and talent around the world. They're just part of this open source kind of philosophy. And they are fundamentally kind of commercial open source software companies. We felt that if you had a firm basically designed in a way to exclusively focus on those kind of companies, and where the firmware actually backed and supported by the founders of the largest commercial open source companies in the world before sort of the last decade. That could actually deliver a lot of value. So we've been sort of blogging a little bit about this. >> And you wrote a great post on it. I read about open source monetization. But I think one of the things I'm seeing as well that supports your thesis, and I like to get your reaction to it because I think this is something that's not really talked about, but open source is still young. I mean, you go back. I remember the days when we used to have to hide in the shadows to get licenses and pirate stuff and do all those crazy stuff. But now, it's only a couple decades away. The leaders that were investing were usually entrepreneurs that've been successful. The Rob Bearns, the Amar Wadhwa, the guy that did Spring. All these different open source. Linux, obviously, great success story. But there hasn't any been any institutional. Yeah, you got benchmark, other things, done some investments. A discipline around open source. Where open source is now table stakes in all software development. Cloud is scaling, scaling out globally. There's no real foc- There's never been a firm that's been focused on- Just open source from a commercial, while maintaining the purity and ethos of open source. I mean, is that. >> You agree? >> That's true. >> 100%, yeah. That's been the big part of creating the firm is aligning and solving for a pure focused structure. And I think what I'll say abstractly is this sort of venture capital, venture style approach to funding enterprise technology companies, software companies in general, has been to kind of find great entrepreneurs and in an abstract way that can build great technology companies. Can bring them to market, can sell them, and can scale them, and so on. And either create categories, or dominate existing categories, and disrupt incumbents, and so on. And I think while that has worked for quite a while, in the venture industry overall, in the 50, 60 years of the venture industry, lots of successful firms, I think what we're starting to see is a necessary shift toward accounting for the fundamental differences of opensource software as it relates to new technology getting created and going, and new software companies kind of coming into market. So we actually fundamentally believe that commercial open source software companies are fundamentally different. Functionally in almost every way, as compared to proprietary closed source software companies of the last 30 years. And the way we've sort of designed our firm and we'll about ten people pretty soon. We're just about a month in. We're growing the team quickly, but we're sort of a small, focused team. >> A ten's not focused small, I mean, I know venture firms that have two billion in management that don't have more than 20 people. >> Well, we have portfolio partners that are focused in different functional areas where commercial open source software companies have really fundamental differences. If you were to sort of stack rank, by function, where commercial open source software companies are really fundamentally different, sort of top to bottom. Legal would be, probably, the very top of the list. Right, in terms of license compliance management, structuring all the sort of protections and provisions around how intellectual property is actually shipped to and sold to customers. The legal licensing aspects. The commercial software licensing. This is quite a polarizing hot topic these days. The second big functional area where we have a portfolio partner focused on this is finance. Finance is another area where commercial open source software companies have to sort of behaviorally orient and apply that function very, very differently as compared to proprietary software companies. So we're crazy honored and excited to have world experts and very respected leaders in those different areas sort of helping to provide sort of different pillars of wisdom to our portfolio companies, our portfolio founders, in those different functional areas. And we provide a really focused kind of structure for them. >> Well I want to ask you the kind of question that kind of bridges the old way and new way, 'cause I definitely see you guys definitely being new and different, which is good. Or as Andy Jassy would say, you can be misunderstood for a while, but as you become successful, people will start understanding what you do. And that's a great example of Amazon. The pattern with success is traditionally the same. If we kind of encapsulate the difference between open source old and new, and that is you have something of value, and you're disrupting the market and collecting rents from it. Or revenue, or profit. So that's commercial, that's how businesses run. How are you guys going to disrupt with open source software the next generation value creation? We know how value's created, certainly in software that opensource has shown a path on how to create value in writing software if code is value and functionality's value. But to commercialize and create revenue, which is people paying something for something. That's a little bit different kind of value extraction from the value creation. So open source software can create value in functionality and value product. Now you bring it to the market, you get paid for it, you have to disrupt somebody, you have to create something. How are you looking at that? What's the vision of the creation, the extraction of value, who's disrupted, is it greenfield new opportunities? What's your vision? >> A lot of nuance and complexity in that question. What I would say is- >> Well, open source is creating products. >> Well, open source is the basis for creating products in a different kind of way. I'll go back to your question around let's just sort of maybe simplify it as the value creation and the value capture dynamics, right? We've sort of written a few posts about this, and it's subtle, but it's easy to understand if you look at it from a fundamental kind of perspective. We actually believe, and we'll be publishing research on this, and maybe even sort of more principled scientific, perhaps, even ways of looking at it. And then blog posts and research. We believe that open source software will always generate or create orders of magnitude more value than any constituent can capture. Right, and that's a fundamental way of looking at it. So if you see how cloud providers are capturing value that open source creates, whether it's Elasticsearch, or Postgres, or MySQL or Hadoop. And then commercial open source software companies that capture value that open source software creates, whether it's companies like Confluent around Kafka, or Cloudera around Hadoop, or Databricks around Apache Spark. Or whether it's the creators of those projects. The creators of Spark and Hadoop and Elasticsearch, sometimes many of them are the founders of those companies I mentioned, and sometimes they're not. We just believe regardless of how that sort of value is captured by the cloud providers, the commercial vendors, or the creators, the value created relative to the value captured will always be orders and orders of magnitude greater. And this is expressed in another way, which this may be easier to understand, it's a sort of reinforcing this kind of assertion that there's orders of magnitude value created far greater than what can be captured. If you were to do a survey, which we're currently in the process of doing, and I'm happy to sort of say that publicly for the first time here, of all the commercial open source software companies that have projects with large significant adoption, whether, say for example, it's Docker, with millions of users, or Apache Hadoop. How many Hadoop deployments there are. How many customers' companies are there running Hadoop deployments. Or it may be even MySQL. How many MySQL installations are there. And then you were to sort of survey those companies and see how many end users are there relative to how many customers are paying for the usage of the project. It would probably be something like if there were a million users of a given project, the company behind that project or the cloud provider, or say the end user, the developer behind the project, is unlikely to capture more than, say, 1% or a couple percent of those end users to companies, to paying companies, to paying customers. And many times, that's high. Many times, 1% to 2% is very high. Often, what we've seen actually anecdotally, and we're doing principled research around this, and we'll have data here across a large number of companies, many times it's a fraction of 1%. Which is just sort of maybe sometimes 10% of 1%, or even smaller. >> So the practitioners will be making more money than the actual vendors? >> Absolutely right. End users and practitioners always stand to benefit far greater because of the fundamental nature of open source. It's permissionless, it's disaggregated, the value creation dynamics are untethered, and it is fundamentally freely available to use, freely available to contribute to, with different constraints based on the license. However, all those things are sort of like disaggregating the creating of technology into sort of an unbounded network. And that's really, really incredible. >> Okay, so first of all, I agree with your premise 100%. We've seen it with CUBE, where videos are free. >> And that's a good thing. All those things are good. >> And Dave Vellante says this all the time on theCUBE. And we actually pointed this out and called this in the Hadoop ecosystem in 2012. In fact, we actually said that on theCUBE, and it turned out to be true, 'cause look at Hortonworks and Cloudera had to merge because, again, the market changed very quickly >> Value Creation. >> Because value >> Was created around them in the immediate cloud, etc. So the question is, that changes the valuation mechanisms. So if this true, which we believe it is. Just say it is. Then the traditional net present value cash flow metric of the value of the firm, not your firm, but, like, if I'm an open source firm, I'm only one portion of the extraction. I'm a supplier, and I'm an enabler, the valuation on cash flow might not be as great as the real impact. So the question I have for you, have you thought about the valuation? 'Cause now you're thinking about bigger construct community network effects. These are new dynamics. I don't think anyone's actually crunched a valuation model around this. So if someone knew that, say for example, an open source project created all this value, and they weren't necessarily harvesting it from a cash flow perspective, there might be other ways to monetize it. Have you though about that, and what's your reaction to that concept? 'Cause capitalism would kind of shake down the system. 'Cause why would someone be motivated to participate if they're not capturing any value? So if the value shifts, are they still going to be able to participate? You follow the logic I'm trying to- >> I definitely do. I think what I would say to that is we expect and we encourage and we will absolutely heavily invest in more business model innovation in the area of open source. So what I mean by that is, and it's important to sort of qualify a few things there. There's a huge amount of polarization and lack of consensus, lack of industry consensus on what it actually means to have or implement an open source based business model. In fact there's a lot of people who just sort of point blankedly assert that an opensource business model does not exist. We believe that many business models for monetizing and commercializing open source exist. We've blogged and written about a few of them. Their services and training and support. There's open core, which is very effective in sort of a spectrum of ways to implement open core. Around the core, you can have a thin crust or a thick crust. There's SAS. There are hardware based distribution models, things like Sourcefire, and Cumulus Networks. And there are also network based approaches. For example, project called Storj or Stor-J. Being developed and run now by Ben Golub, who's the former CEO of Docker. >> CUBE alumni. >> Ben's really great open source veteran. This is a network, kind of decentralized network based approach of sort of right sizing the production and consumption of the resource of a storage based open source project in a decentralized network. So those are sort of four or five ways to commercializing value, however, four or five ways of commercializing value, however what we believe is that there will be more business model innovation. There will be more developments around how you can better capture more, or in different ways, the value that open source creates. However, what I will say though, is it is unrealistic to expect two things. It is unrealistic and, in fact, unfair to expect that any of those constituents will contribute back to open source proportional to the value that they received from it, or the benefit, and I'm actually paraphrasing Doug Cutting there, who tweeted this a couple of years ago. Very profoundly deep, wise tweet, which I very strongly agree with. And it is also unrealistic to expect a second thing, which is that any of those constituents can capture a material portion of the value that open source creates, which I would assert is many trillions of dollars, perhaps tens of trillions of dollars. It's really hard to quantify that. And it's not just dollars in economic sense, it's dollars in productivity time saved, new markets, new areas, and so on. >> Yeah, I think this is interesting, and I think that we'll be an open book at that. But I will say that what I've observed in looking through all these CUBE interviews, I think that business model innovation absolutely is something that is an IP. >> We need it. Well, it's now intellectual property, the business model isn't, hey I went to business school, learned this at Babson or Harvard, I learned this business model. We're going to do SAS premium. Okay, I get that. There's going to be very interesting new innovations coming, and I think that's the new IP. 'Cause open source, if it's community based, there's going to be formulas. So that's going to be really inter- Okay, so now let's get back to actual funding itself. You guys are doing early stage. Can you take us through the approach? >> We're very focused on early stage, investing, and backing teams that are, just sort of welcoming the idea of a commercial entity around their open source project. Or building a business fundamentally dependent on an open source project or maybe even more than one. The reason for that is this is really where there's a lot of structural inefficiency in supporting and backing those types of founders. >> I think one of the things with ... is with that acquisition. They were pure on the open source side, doing a great job, didn't want to push the business model too hard because the open source, let's face it, you got people like, eh, I don't want to get caught on the business side, and get revenue, perverse incentives might come up, or fear of incentives that might be different or not aligned. Was a great a value. >> I think so. >> So Red Hat got a steal on that one. But as you go forward, there's going to be certainly a lot more stuff. We're seeing a lot of it now in CNCF, for instance. I want to get your thoughts on this because, being the co founder of KubeCon, and donating it to the CNCF, Kubernetes is the hottest thing on the planet, as we talked about many years ago. What's your take on that, now? I see exciting things happening. What is the impact of Kubernetes, in your opinion, to the world, and where do you see that evolving rapidly, and where is the focus here as the people should be paying attention to? >> I think that Kubernetes replaces EC2. Kubernetes is a disaggregated API for distributed computing anywhere. And it happens to be portable and able to run on any kind of computer infrastructure, which sort of makes it like a liquid disaggregated EC2-like API. Which a lot of people have been sort of chasing and trying to implement for many years with things like OpenStack or Eucalyptus. But interestingly, Kubernetes is sort of the right abstraction for distributed computing, because it meets people where they are architecturally. It's sort of aligned with this current movement around distributed systems first designs. Microservices, packaging things in small compartmentalized units. >> Good for integrating of existing stuff. >> Absolutely, and it's very composable, un-opinionated architecturally. So you can sort of take an application and structure it in any given way, and as long as it has this sort of isolation boundary of a container, you can run it on Kubernetes without needing to sort of retrofit the architecture, which is really awesome. I think Kubernetes is a foundational part of the next kind of computing paradigm in the same way that Linux was foundational to the computing paradigm that gave rise to the internet. We had commodity hardware meeting open source based sort of cost reduction and efficiency, which really Linux enabled, and the movement toward scale out data center infrastructure that supported the Internet's sort of maturity and infrastructure. I think we're starting to see the same type of repeat effect thanks to Kubernetes basically being really well received by engineers, by the cloud providers. It's now the universal sort of standard for running container based applications on the different cloud providers. >> And think having the non-technical opinion posture, as you said, architectural posture, allows it to be compatible with a new kind of heterogeneous. >> Heterogeneity is critical. >> Heterogeneity is key, 'cause it's not just within the environment, it's also within each vendor, or customer has more heterogeneity. So, okay, now that's key. So multi cloud, I want to get your thoughts on multi cloud, because now this goes into some of things that might build on top of if Kubernetes continues to go down the road that you say it does. Then the next question is, stateful applications, service meshes. >> A lot of buzz words. A lot of buzz words in there. Stateful application's real because at a certain point in time, you have a maturity curve with critical infrastructure that starts to become appealing for stateful mission critical storage systems, which is typically where you have all the crown jewels of a given company's infrastructure, whether it's a transactional system, or reading and writing core customer, or financial service information, or whatever it is. So Kubernetes' starting to hit this maturity curve where people are migrating really serious mission critical storage workloads onto that platform. And obviously we're going to start to see even more critical work loads. We're starting to see Edge workloads because Kubernetes is a pretty low footprint system, so you can run it on Edge devices, you can even run it on microcontrollers. We're sort of past the experimental, you know, fun and games was Raspberry Pi, sort of towers, and people actually legitimately doing real world Edge kind of deployments with Kubernetes. We're absolutely starting to see multi-geo, multi-replication, multi-cloud sort of style architectures becoming real, as well. Because Kubernetes is this API that the industry's agreeing upon sufficiently. We actually have agreement around this sort of surface area for distributed system style computing that if cloud providers can actually standardize on in a way that lets application specific vendors or new types of application deployment models innovate further, then we can really unlock this sort of tight coupling of proprietary services inside cloud providers and disaggregate it. Which is really exciting, and I forget the Netscape, Jim Barksdale. Bundling, un-bundling. We're starting to see the un-bundling of proprietary cloud computing service API's. Things like Kinesis, and ALB and ELB and proprietary storage services, and these other sticky services get un-bundled because of two big things. Open source, obviously, we have open source alternative data paths. And then we have Kubernetes which allows us to sort of disaggregate things out pretty easily. >> I want to hear your thoughts, one final concept, before we break, 'cause I was having a private conversation with three people besides myself. A big time CIO of a company that if I said the name everyone would go, oh my god, that guy is huge, he's seen it all going back many, many ways. Currently done a lot of innovation. A hardcore network chip guy who knows networking, old school infrastructure. And then a cloud native application founder who knows a lot about software development and is state-of-the-art cloud native. So cloud native, all experienced, old-school, kind of about my age, a cloud native app developer, a big time CIO, and a chip networking kind of infrastructure guy. And we're talking, and one thing that came out, I want to get you thoughts on this, he says, so what's going on with DevOps, how do you see this service mesh, is a stay for (mumbles) on top of the stack, no stacks, horizontally scalable. And the comment that came out was storage and networking have had this relationship with everything since day one. Network moves a packet from point A to point B, and nothing happens in between, maybe some inspection. And storage goes from here now to the then, because you store it. He goes, that premise moves up the stacks, so then the cloud native guy goes, well that's what's happening up at the top, there's a lot of moving things around, workloads and or services, provisioning services, and then from now to then state. In real time. And what dawned on the next conversation the CIO goes, well this is exactly our challenge. We have under the hood infrastructure being programmable, >> We're having some trouble with the connection. Please try again. >> My phone's calling me. >> Programmable connections. >> So you got the programmable on the top of the stack too, so the CIO said, that's exactly the problem we're trying to solve. We're trying to solve some of these network storage concepts now at an application level. Your thoughts to that. >> Well, I think if I could tease apart everything you just said, which is profound synthesis of a lot of different things, I think we've started to see application logic leak out of application code itself into dedicated layers that are really good at doing one specific thing. So traditionally we had some crud style kind of behavioral semantics implemented around business logic. And then, inside of that, you also had libraries for doing connectivity and lookups and service discovery and locking and key management and encryption and coordination with other types of applications. And all that stuff was sort of shoved into the single big application binary. And now, we're starting to see all those language runtime specific parts of application code sort of crack or leak out into these dedicated, highly scalable, Unix philosophy oriented sort of like layers. So things like Envoy are really just built for the sort of nervous system layer of application communication fabric up and down the layer two through layer seven sort of protocol transport stack, which is really profound. We're seeing things like Vault from Hashicorp handle secure key storage persistence of application dedication, authorization, metadata and information to sort of access different systems and end points. And that's a dedicated sort of stateful layer that you can sort of fragment out and delegate sort of application specific functionality to, which is really great for scalability reasons. And on, and on, and on. So we've started to see that, and I think one way of looking at that is it's a cycle. It's the sort of bundling and un-bundling aspect. >> One of the granny level services are getting a really low level- >> Yeah, it's a sort of like bundling and un-bundling and so we've got all this un-bundling happening out of application code to these dedicated layers. The bundling back may happen. I've actually seen a few Bay Area companies go like, we're going back to the monolith 'cause it actually gives us lots of efficiencies in things that we though were trade offs before. We're actually comfortable with a big monorepo, and one or two core languages, and we're going to build everything into these big binaries, and everyone's going to sort of live in the same source code repository and break things out through folders or whatever. There's a lot of really interesting things. I don't want to say we're sort of clear on where this bundling, un-bundling is happening, but I do think that there's a lot of un-bundling happening right now. And there's a lot of opportunity there. >> And the open source, obviously, driving it. So final question for you, how many deals have you done? Can you talk a little bit about the firm? And exciting things and plans that you have going forward. >> Yeah, we're going to be making a lot of announcements over the next few months, and we're, I guess, extremely thrilled. I don't want to say overwhelmed, 'cause we're able to handle all of the volume and inquiries and inbound interest. We're really honored and thrilled by the reception over the last couple weeks from announcing the firm on the first of October, sort of before the Hortonworks Cloudera merger. The JFrog funding announcement that week. The Elastic IPO. Just a lot of really awesome things happened that week. This is obviously before Microsoft open sourced all their patents. We'll be announcing more investments that we've made. We announced our first one on the first of October as well with the announcement of the firm. We've made a good number of investments. We're not able to talk to much about our first initiative, but you'll hear more about that in the near future. >> Well, we're excited. I think it's the timing's perfect. I know you've been working on this kind of vision for a while, and I think it's really great timing. Congratulations, JJ >> Thank you so much. Thanks for having me on. >> Joesph Jacks, also known as JJ, founder and general partner of OSS Capital, Open Source Software Capital, co founder of KubeCon, which is now part of the CNCF. A real great player in the community and the ecosystem, great to have him on theCUBE, thanks for coming in. I'm John Furrier, thanks for watching. >> Thanks, John. (bright symphony music)

>> Announcer: Live from Santa Clara, in the heart of Silicon Valley, it's theCUBE, covering Cloud Foundry Summit 2017. Brought to you by the Cloud Foundry Foundation and Pivotal. >> Welcome back. I'm Stu Miniman joined by my host, John Troyer. Really excited to welcome to the program one of the keynote speakers from this morning, Mojgan Lefebvre who is the SVP and chief information officer. We always love CIOs, from Liberty Mutual Insurance Global Specialty. Thank you for your keynote this morning and thank you so much for joining us on theCUBE. >> Thank you, thanks for having me. >> So you went through a lot of data and a lot of information in your keynote. Liberty Mutual, you say spent a billion dollars in tech yearly. There's certain technology companies that spend that much. As the CIO, what are some of the biggest things on your plate and we'll get in the discussion of Cloud Foundry and cloud and everything as we go from there. >> Sure so I'd say probably the priorities differ by the business unit you're in. The specialty business has generally been a bit more manual and we have over 200 or so insurance products. So really automating it is very different from automating consumer insurance which is really focused on home and auto. So really right now, our focus is increasing the productivity and the risk assessment for a lot of our underwriters. And then I say probably analytics, pricing. Making sure that we're assessing risks correctly is definitely another point of focus for us. >> Okay with so many products, we understand the rate of change must be difficult. In your keynote you spoke about embracing cloud and agile methodology. Maybe take us back to what some of the pain points were and led to yourself and management to embrace this big change. >> Yeah, absolutely so several things are going on. One is that we see a lot of new players entering the world of insurance, and it both about new capital coming into the world of insurance. Just 'cause there's not enough investments that capital can be put towards so insurance is one place to come to and the other is technology players that are coming into our world. Companies like Metromile, Lemonade, the list goes on and on and so really our world is changing. Technology is driving a lot of that change and so we know that we've got to be a big player in that area as well. And as I said really, we've got to become one of those software companies that can actually sell insurance as opposed to the other way around. I'd say some of the other things that are happening is the fact that our employees. Our consumers now have all these other software companies that they have experience with and so their expectations are very different. They've got one experience when they're at home and then they come into the workplace and it looks like they've gone back 100 years. So that paradigm needs to change. So those are some of the things that have really made us think we have no choice but to truly change the way that deliver software. We've got to get out of this mode where everything takes multiple years and multiple millions of dollars and really at the end of the day. The people that you started the work with are no longer even there to appreciate what you've delivered to them. And usually it's not what they ask for anyway. >> As you adopted the Cloud Foundry platform. One of the things about Cloud Foundry, even very early in it's life cycle was that it was associated with digital transformation, and cloud native. And especially once it was joined up with Pivotal Labs. So how much of, as you all embark on this journey. The great thing about here at Summit, there is a lot of talk about visual transformation. A lot of talk about agile. That's what we were just talking about. Some shows you go to it's a lot about features and a lot about speeds and feeds. And a lot about the latest, greatest. So how much apart of it as you all were adopting this platform? Was that culture of digital transformation surrounding the actual tech. How important was that? >> I think that was very important because again, as I said we know that, that's what the consumers expect. They no longer want things to be manual. They want things to be at the tips of their fingers and so really transforming us from being a company that's very paper intensive to really being more and more digital was critical to us. The very first application that we actually put in the cloud which was in my business unit was for document management in our Al Fresco. And actually what we named it was we're going paperless. As something that we started about three years ago, and today I can say that yep, we are paperless and so the great thing about Al Fresco was that it was indeed cloud native, and that was very important to us. We started out looking at some of the other solutions that are out there. I won't necessarily name them but they did not lend themselves to the cloud. And so really going with a cloud native solution that would enable us to become much more digital and paperless was very critical to us. >> You talked a lot about developer adoption now in your journey. Was that a tough sell at the very beginning or did developers go wait a minute, This is going to save me a lot of time. I'm on board. >> So you mean with Cloud Foundry in general? >> John: With Cloud Foundry, in general. >> So if anything I'd it was probably the developer community that really sorted this out and so by the time that the leadership and management started to pay attention. There were pockets of developers who were just very, very bought into it, and so I would say that went a long way. And then made it easier to sell it to other developers. I say they're much more listening to what their peers are saying than what we have to say. And then really meeting with the Pivotal Labs guys. I'd say those folks have truly a magical way of selling their story and they've truly helped us. Not only sell it to our developers but also sell the story to our business. I'd say that the mindset shift from thinking I'm going to have everything in one go versus no, I'm going to get it in iterations and I'm actually going to trust the fact that the next releases are going to come is a big mind shift and Pivotal was instrumental in helping sell that to us. >> One of the benefits of Cloud Foundry is to give you flexibility as to where your applications and data live. That being said, a majority of customers that have deployed Cloud Foundry are doing it on premises. How do you manage what goes, stays in your own environment. What handles the public cloud. My understanding you're doing quite a bit of AWS today. What's your viewpoint for you and management on public cloud? >> We certainly see public cloud as the future. I know Chip mentioned something about, well it's not going to be cheaper. We're actually counting on that in the end from a total cost of ownership perspective. That it will be cheaper and we truly mean it when we say we want 75% of the people writing code. And by that I mean the staff within the IT group of course. And we don't want them to have to worry about the infrastructure and so while we've started with AWS, we absolutely have a relationship with Microsoft as well. We definitely want to be independent on this cloud and I would say something like Cloud Foundry definitely allows you to do that. >> When you're looking at that total. That full TCO, you don't have fully burden, I have gear and I have people managing that gear and all the operations there. If you can shift that piece of it. You're not differentiated on the infrastructure or at those needs. You want to focus on those thousands of products that you have and your people coding to create those next opportunities. >> Exactly. We want to focus on the value add. That's where we want our people to really be focusing and we want to let the cloud players who do it extremely well to be doing that for us. >> You put forth in your keynotes some pretty audacious metrics. I think it was 60% of the work load public cloud. More than 50% of apps to release code on daily basis and you wanted 75% of the IT staff to write code. How did you come up with those numbers. How are doing against those? >> About a year ago, once we decided that the imperative for change was so critical. The IT leadership team got together. We spent a couple of days off site and we said let's come up with what we're calling today our IT manifesto. And so we said we just have to change and there are multiple things that we're going to change. And we said we're going to put some, what we call bold, audacious moves or BAMS as they've come to be known together. And so those were just some, we knew they were out of right to some extent, but we said if we don't really put some goals that are really hard to reach, we're never going to get there. >> What are some of the head winds there? What have slowed you from meeting those and any lessons learned that you share to your peers on what you've learned going through this. >> Certainly deciding on what goes to the clouds first is one of those areas that we're learning as we're doing. We know that it's easy when you're working in a greenfield and it's something new. So yeah, you can very easily say I'll build in the cloud. When you're looking at what you're existing environment is and what you move to the cloud. One of the questions as well, if we move all of our development environment. How's that going to interact with the production environment. If you have them in different clouds. Other things are how it interacts with active directory and held app and some of those things. And I say finally would be kind of the global applications always make it much more difficult as you think. How do you replicate among different clouds in different geographies. Those are some of the blockers that we've got to tackle and make sure that we get around. >> One of the interesting parts of any management strategy in any company is skills, up skilling. So how have you been approaching that in terms of this new cloud native world. Both for the devs, is this year at Cloud Foundry Summit. Are people here learning? There's new certifications. >> I say it's a multi prong approach. We definitely have partnered with several companies to put some training together to make sure that we're training our staff. We started a program that we call go for code and so we've asked volunteers. For people who are not coding today and who want to get there that actually they go to these coding schools and they're going to spend the next two to three months actually learning how to code. It's very rigorous. >> So they might have been technical in an infrastructure way before and they want to learn how to code? >> Yeah, it may be that or they may have just been business analysts who are just doing requirements gathering or project management, and they want to learn how to code. So we've tried to be as transparent as possible because when you say I want 75% of my IT staff to be coding. Like you've got 50% who are not coding today. There's a message in that and so of course it's up to us to make sure that we're providing the tools and what's needed for that to happen. Our goal is to get anyone on our staff who really wants to get there and is willing to put the sweat in to be able to do it. 'Cause we also know it's not like software engineers are just lying out there on the streets. There is a shortage of software engineers and that's going to become more and more of a problem. So really getting our own employees that we value greatly to be able to do that transformation, I think is critical for us. >> Another great one line, you had your keynote was out with the annual, in with the weekly. I think you said it was 16 releases in five months. The counter to that and I'm curious how you deal with it and talk to your peers is how do people keep up with just all the changes that are happening? I talk to the companies that create code on just regular occasions and they can't keep up. And how do you make sure your staff doesn't get burned out? >> So great, great question again. We're at the very beginnings of our transformation. The one thing I will say is looking at the team that did this and did the 16 releases in five months versus teams that are working on annual releases. The energy, the enthusiasm, the excitement and hopefully some of it came through in the video that you saw is just phenomenal. So I'd say, I'm much less worried about them burning out than hey can we keep the others as excited. I will tell you automation and things like Cloud Foundry that actually help you automate your pipeline are critical. You can not do multiple releases or daily releases if you don't have those tools. If you truly get to the point where you do have the automated pipeline. I think a lot of that is done for you so that's what we're gearing towards and driving towards. >> One of the things that people always love to pontificate is in the future, what is the role of the CIO? We'd love to see you embracing things like cloud because it was like well, when I had gear, and I had capital budget I understood it. But I'm changing the role. I'm doing that. What have you been seeing as the changing role? Anything down the line you see and how that changes? >> You're right, so a lot of people say, well there is no need for a CIO in the future. I'd say there's probably more and more need for very business oriented, strategic CIOs who also understands technology really well and they're the epitome of someone who understands technology and is the head of engineering so to speak. But also making sure that they can work very well with the business and understands the impact of technology on the business. I'll be waiting for the day where the need for someone like that goes away. I don't see it coming too soon. >> Final question I have for you is what brings you to an event like this? Spend the time, give the keynote. What do you get out of it personally and for your company? >> One is really learning 'cause again, if you're a doctor in medicine. If you want to keep up with what's going on around you you've got to educate yourself. So certainly that aspect of go out there, see what's going on. Making sure that you're keeping up with new technology that's one thing. The other was my experience with Pivotal has been phenomenal, and so I thought it was critical to actually take the opportunity to share that. Hopefully others will learn. A lot of the tweets that I saw was well, if a big 100 year old insurance company can do this. Then nobody has an excuse and I'll say yeah of course. So it's really both to give back and to continue to learn and then to reconnect with colleagues. Cornelia and I actually worked together over 10 years ago. So just coming to here and being able to have dinner with her tonight is going to be very enjoyable. >> Absolutely a tight knit community. Really appreciate you coming on the program. We welcome you to theCUBE alumni list now, our community, >> Thank you. Of the thousands that we had on the program. From John and myself, we'll be back with lots more coverage here from the Cloud Foundry Summit. Thanks for watching theCUBE. (uptempo techno music)