>>From around the globe. If the cube with digital coverage of AWS reinvent 20, 20 special coverage sponsored by AWS worldwide public sector. >>Okay. Welcome back everyone. To the cubes, virtual coverage of AWS reinvent 2020, this is the cube virtual. I'm your host John farrier with the cube. The cube normally is there in person this year. It's all virtual. This is the cube virtual. We're doing the remote interviews and we're bringing in commentary and discussion around the themes of re-invent. And this today is public sector, worldwide public sector day. And the theme from Teresa Carlson, who heads up the entire team is to think big and look at the data. And I wanted to bring in a special cube alumni and special guests. Alan Cohen. Who's a partner at data collective venture capital or DCVC, um, which we've known for many, many years, founders, Matt OCO and Zachary Bogue, who started the firm, um, to over at about 10 years ago. We're on the really the big data wave and have grown into a really big firm thought big data, data, collective big ideas. That's the whole purpose of your firm. Alan. You're now a partner retired, retired, I mean a venture capitalist over at being a collective. Great to see you. Thanks for coming on. >>Great to see you as well. John, thanks for being so honest this morning. >>I love to joke about being retired because the VC game, it's not, um, a retirement for you. You guys made, you made some investments. Data collective has a unique, um, philosophy because you guys invest in essentially moonshots or big ideas, hard problems. And if I look at what's going on with Amazon, specifically in the public sector, genome sequencing now available in what they call the open data registry. You've got healthcare expanding, huge, you got huge demand and education, real societal benefits, uh, cybersecurity contested in space, more contention and congestion and space. Um, there's a lot of really hard science problems that are going on at the cloud. And AI are enabling, you're investing in entrepreneurs that are trying to solve these problems. What's your view of the big ideas? What are people missing? >>Well, I don't know if they're missing, but I think what I'd say, John, is that we're starting to see a shift. So if you look at the last, I don't know, forever 40, 50 years in the it and the tech industry, we took a lot of atoms. We built networks and data warehouses and server farms, and we, we kind of created software with it. So we took Adam's and we turned them into bets. Now we're seeing things move in the other direction where we're targeting bits, software, artificial intelligence, massive amount of compute power, which you can get from companies like, like AWS. And now we're creating better atoms. That means better met medicines and vaccines we're investor, um, and a company called abs Celera, which is the therapeutic treatment that J and J has, um, taken to market. Uh, people are actually spaces, a commercial business. >>If it's not a science fiction, novel we're investors in planet labs and rocket labs and compel a space so people can see right out. So you're sitting on your terrorists of your backyard from a satellite that was launched by a private company without any government money. Um, you talked about gene sequencing, uh, folding of proteins. Um, so I think the big ideas are we can look at some of the world's most intractable issues and problems, and we can go after them and turn them into commercial opportunities. Uh, and we would have been able to do that before, without the advent of big data and obviously the processing capabilities and on now artificial intelligence that are available from things like AWS. So, um, it's kind of, it's kind of payback from the physical world to the physical world, from the virtual world. Okay. >>Pella space was featured in the keynote by Teresa Carlson. Um, great to tie that in great tie in there, but this is the kind of hard problems. And I want to get your take because entrepreneurs, you know, it reminds me of the old days where, you know, when you didn't go back to the.com, when that bubble was going on, and then you got the different cycles and the different waves, um, the consumer always got the best kind of valuations and got the most attention. And now B to B's hot, you got the enterprise is super hot, mainly because of Amazon >>Sure. Into the Jordash IPO. Obviously this morning, >>Jordache IPO, I didn't get a phone call for friends and family and one of their top customers. They started in Palo Alto. We know them since the carton Jordache, these are companies that are getting massive, uh, zoom. Um, the post pandemic is coming. It's going to be a hybrid world. I think there's clear recognition that this some economic values are digital being digitally enabled and using cloud and AI for efficiencies and philosophy of new things. But it's going to get back to the real world. What's your, it's still hard problems out there. I mean, all the valuations, >>Well, there's always hard problems, but what's different now. And from a perspective of venture and, and investors is that you can go after really hard problems with venture scale level of investments. Uh, traditionally you think about these things as like a division of a company like J and J or general electric or some very massive global corporation, and because of the capabilities that are available, um, in the computing world, um, as well as kind of great scientific research and we fund more PhDs probably than any other, uh, any other type of background, uh, for, for founders, they can go after these things, they can create. Uh, we, uh, we have a company called pivot bio, uh, and I think I've spoken to you about them in the past, Sean, they have created a series of microbes that actually do a process called nitrogen fixation. Um, so it attaches the nitrogen to the roots of corn, sorghum and wheat. >>So you don't have to use chemical fertilizer. Well, those microbes were all created through an enormous amount of machine learning. And where did that machine learning come from? So what does that mean? That means climate change. That means more profitable farmers. Uh, that means water and air management, all major issues in our society where if we didn't have the computing capabilities we have today, we wouldn't have been able to do that. We clearly would have not been able to do that, um, as a venture level of investments to get it started. So I think what's missing for a lot of people is a paucity of imagination. And you have to actually, you know, you actually have to take these intractable problems and say, how can I solve them and then tear it apart to its actual molecules, just the little inside joke, right? And, and then move that through. >>And, you know, this means that you have to be able to invest in work on things. You know, these companies don't happen in two or three years or five years. They take sometimes seven, 10, 15 years. So it's life work for people. Um, but though, but we're seeing that, uh, you know, that everywhere, I mean, rocket lab, a company of ours out of New Zealand and now out of DC, which we actually launched the last couple of space, um, satellites, they print their rocket engines with a 3d printer, a metal printer. So think about that. How did all that, that come to bear? Um, and it started as a dangerous scale style of investments. So, you know, Peter Beck, the founder of that company had a dream to basically launch a rocket, you know, once a year, once a month, once a week, and eventually to once a day. So he's effectively creating a huge, um, huge upswing in the ability of people to commercialize space. And then what does space do? It gives you better observability on the planet from a, not just from a security point of view, but from a weather and a commerce point of view. So all kinds of other things that looked like they were very difficult to go after it now starts to become enabled. Yeah. >>I love the, uh, your investment in Capella space because I think that speaks volumes. And one of the things that the founder was talking about was getting the data down is the hard part. He he's up, he's up there now. He can see everything, but now I've got to get the data down because say, say the wildfires in California, or whether, um, things happening around the globe now that you have the, uh, the observation space, you got to get the data down there. This is the huge scale challenge. >>Well, let me, let me, let me give you something. That's also, so w you know, we are in a fairly difficult time in this country, right? Because of the covert virus, uh, we are going to maybe as quickly as next week, start to deliver, even though not as many as we'd like vaccines and therapeutics into this virus situation, literally in a year, how did all these things, I mean, obviously one of the worst public health crisis of our lifetimes, and maybe, you know, uh, of the past century, uh, how did that happen? How did it all day? Well, you know, some, I mean, the ability to use, um, computing power in, in assistance, in laboratory, in, in, uh, in, um, development of, of pharmaceutical and therapeutics is a huge change. So something that is an intractable problem, because the traditional methods of creating vaccines that take anywhere from three to seven years, we would have a much worse public health crisis. I'm not saying that this one is over, right. We're in a really difficult situation, but our ability to start to address it, the worst public health crisis in our lifetime is being addressed because of the ability of people to apply technology and to accelerate the ability to create vaccines. So great points, absolutely amazing. >>Let's just, let's just pause that let's double down on that and just unpack that, think about that for a second. If you didn't, and then the Amazon highlight is on Andy Jesse's keynote carrier, which makes air conditioning. They also do refrigeration and transport. So one IOT application leveraging their cloud is they may call it cold chain managing the value chain of the transport, making sure food. And in this case vaccine, they saw huge value to reduce carbon emissions because of it does the waste involved in food alone was a problem, but the vaccine, they had the cold, the cold, cold, cold chain. Can you hear me? >>Maybe this year, the cold chain is more valuable than the blockchain. Yeah. >>Cold don't think he was cold chain. Sounds like a band called play. Um, um, I had to get that in and Linda loves Coldplay. Um, but if you think about like where we are to your point, imagine if this hit 15 years ago or 20 years ago, um, you know, YouTube was just hitting the scene 20 years ago, 15 years ago, you know, so, you know, that kind of culture, we didn't have zoom education would be where we would be Skyping. Um, there's no bandwidth. So, I mean, you, you know, the, the bandwidth Wars you would live through those and your career, you had no bandwidth. You had no video conferencing, no real IOT, no real supply chain management and therapeutics would have taken what years. What's your reaction to, to that and compare and contrast that to what's on full display in the real world stage right now on digital enablement, digital transformation. >>Well, look, I mean, ultimately I'm an optimist because of what this technology allows you to do. I'm a realist that, you know, you know, we're gonna lose a lot of people because of this virus, but we're also going to be able to reduce a lot of, um, uh, pain for people and potentially death because of the ability to accelerate, um, these abilities to react. I think the biggest and the, the thing that I look for and I hope for, so when Theresa says, how do you think big, the biggest lesson I think we're going to we've learned in the last year is how to build resilience. So all kinds of parts of our economy, our healthcare systems, our personal lives, our education, our children, even our leisure time have been tested from a resilience point of view and the ability of technology to step in and become an enabler for that of resilience. >>Like there isn't like people don't love zoom school, but without zoom school, what we're going to do, there is no school, right? So, which is why zoom has become an indispensable utility of our lives, whether you're on a too much, or you've got zoom fatigue, does it really matter the concept? What we're going to do, call into a conference call and listen to your teacher, um, right in, you know, so how are you going to, you're going to do that, the ability to repurpose, um, our supply chain and, you know, uh, we, we, we see this, we're going to see a lot of change in the, in the global supply chain. You're going to see, uh, whether it's re domestication of manufacturing or tightening of that up, uh, because we're never going to go without PPE again, and other vital elements. We've seen entire industries repurposed from B2B to B to C and their ability to package, deliver and service customers. That is, those are forms of resilience. >>And, and, and, and taking that to the next level. If you think about what's actually happening on full display, and again, on my one-on-one with Andy Jassy prior to the event, and he laid this out on stage, he kind of talks about this, every vertical being disrupted, and then Dr. Matt wood, who's the machine learning lead there in Swami says, Hey, you know, cloud compute with chips now, and with AI and machine learning, every industry, vertical global industry is going to be disrupted. And so, you know, I get that. We've been saying that in the queue for a long time, that that's just going to happen. So we've been kind of on this wave of horizontal, scalability and vertical specialization with data and modern applications with machine learning, making customization really high-fidelity decisions. Or as you say, down to the molecule level or atomic level, but this is clear what, what I found interesting. And I want to get your thoughts because you have one been there, done that through many ways of innovation and now investor leading investor >>Investor, and you made up a word. I like it. Okay. >>Jesse talks about leadership to invent and reinvent. Can't fight gravity. You've got to get talent hungry for invention, solve real-world problems. Speed. Don't complexify. That's his message. I said to him, in my interview, you need a wartime conciliary cause he's a big movie buff. I quote the godfather. Yeah. Don't you don't want to be the Tom Hagen. You don't want to be that guy, right? You're not a wartime. Conciliary this is a time there's times in companies' histories where there's peace and there's wartime, wartime being the startup, trying to find its way. And then they get product market fit and you're growing and scaling. You're operating, you're hiring people to operate. Then you get into a pivot or a competitive situation. And then you got to get out there and, and, and get dirty and reinvent or re-imagine. And then you're back to peace. Having the right personnel is critical. So one of the themes this year is if you're in the way, get out of the way, you know, and some people don't want to hold on to hold onto the past. That's the way we did it before I built this system. Therefore it has to work this way. Otherwise the new ways, terrible, the mainframe, we've got to keep the mainframe. So you have a kind of a, um, an accelerated leadership, uh, thin man mantra happening. What is your take on this? Because, >>Sorry. So if you're going to have your F R R, if you're going to, if you are going to use, um, mob related better for is I'll share one with you from the final season of the Soprano's, where Tony's Prado is being hit over the head with a bunch of nostalgia from one of his associates. And he goes, remember, when is the lowest form of conversation and which is iconic. I think what you're talking about and what Andy is talking about is that the thing that makes great leadership, and what I look for is that when you invest in somebody or you put somebody in a leadership position to build something, 50% of their experience is really important. And 50% of it is not applicable in the new situation. And the hard leadership initiative has to understand which 50 matters in which 50 doesn't matter. >>So I think the issue is that, yeah, I think it is, you know, lead follow or get out of the way, but it's also, what am I doing? Am I following a pattern for a, for a, for an, a, for a technology, a market, a customer base, or a set of people are managing that doesn't really exist anymore, that the world has moved on. And I think that we're going to be kind of permanent war time on some level we're going to, we're going to be co we're because I think the economy is going to shift. We're going to have other shocks to the economy and we don't get back to a traditional normal any time soon. Yep. So I, I think that is the part that leadership in, in technology really has to, would adopt. And it's like, I mean, uh, you know, the first great CEO of Intel reminded us, right. Then only the paranoid survive. Right. Is that it's you, some things work and some things don't work and that's, that's the hard part on how you parse it. So I always like to say that you always have to have a crisis, and if there is no crisis, you create the crisis. Yeah. And, you know, >>Sam said, don't let a good crisis go to waste. You know? Um, as a manager, you take advantage of the crisis. >>Yeah. I mean, look, it wouldn't have been bad to be in the Peloton business this year. Right, too. Right. Which is like, when people stayed home and like that, you know, you know, th that will fade. People will get back on their bikes and go outside. I'm a cyclist, but you know, a lot more people are going to look at that as an alternative way to exercise or exercising, then when it's dark or when the weather is inclement. So what I think is that you see these things, they go in waves, they crest, they come back, but they never come back all the way to where they were. And as a manager, and then as a builder in the technology industry, you may not get like, like, like, okay, maybe we will not spend as much time on zoom, um, in a year from now, but we're going to still spend a lot of time on zoom and it's going to still be very important. >>Um, what I, what I would say, for example, and I, and looking at the COVID crisis and from my own personal investments, when I look at one thing is clear, we're going to get our arms around this virus. But if you look at the history of airborne illnesses, they are accelerating and they're coming every couple of years. So being able to be in that position to, to more react, more rapidly, create vaccines, the ability to foster trials more quickly to be able to use that information, to make decisions. And so the duration when people are not covered by therapeutics or vaccines, um, short, and this, that is going to be really important. So that form of resilience and that kind of speed is going to happen again and again, in healthcare, right. There's going to be in, you know, in increasing pressure across that in part of the segment food supply, right. I mean, the biggest problem in our food supply today is actually the lack of labor. Um, and so you have far, I mean, you know, farmers have had a repurpose, they don't sell to their traditional, like, so you're going to see increased amount of optimization automation and mechanization. >>Lauren was on the, um, keynote today talking about how their marketplaces collected as a collective, you know, um, people were working together, um, given that, given the big ideas. Well, let's, let's just, as we end the segment here, let's connect big ideas. And the democratization of, I mean, you know, the old expression Silicon Valley go big or go home. Well, I think now we're at a time where you can actually go big and stay and, and, and be big and get to be big at your own pace because the, the mantra has been thinking big in years, execute plan in months and execute weekly and month daily, you know, you can plan around, there's a management technique potentially to leverage cloud and AI to really think about bit the big idea. Uh, if I'm a manager, whether I'm in public sector or commercial or any vertical industry, I can still have that big idea that North star and then work backwards and figure that out. >>That sounds to the Amazon way. What's your take on how people should be. What's the right way to think about executing down that path so that someone who's say trying to re-imagine education. And I know a, some people that I've talked to here in California are looking at it and saying, Hey, I don't need to have silos students, faculty, alumni, and community. I can unify them together. That's an idea. I mean, execution of that is, you know, move all these events. So they've been supplying siloed systems to them. Um, I mean, cause people want to interact online. The Peloton is a great example of health and fitness. So there's, there's everyone is out there waiting for this playbook. >>Yeah. Unfortunately I, I had the playbook. I'd mail it to you. Uh, but you know, I think there's a couple of things that are really important to do. Maybe good to help the bed is one where is there structural change in an industry or a segment or something like that. And sorry to just people I'm home today, right? It's, everybody's running out of the door. Um, and you know, so I talked about this structural change and you, we talked about the structural change in healthcare. We talked about kind of maybe some of the structural change that's coming to agriculture. There's a change in people's expectations and how they're willing to work and what they're willing to do. Um, you, as you pointed out the traditional silos, right, since we have so much information at our fingertips, um, you know, people's responsibility as opposed to having products and services to deliver them, what they're willing to do on their own is really changed. >>Um, I think the other thing is that, uh, leadership is ultimately the most important aspect. And we have built a lot of companies in the industry based on forms of structural relations industry, um, background, I'm a product manager, I'm a sales person, I'm a CEO, I'm a finance person. And what we're starting to see is more whole thinking. Um, uh, particularly in early stage investors where they think less functionally about what people's jobs are and more about what the company is trying to get done, what the market is like. And it's infusing a lot more, how people do that. So ultimately most of this comes down to leadership. Um, uh, and, and that's what people have to do. They have to see themselves as a leader in their company, in their, in the business. They're trying to build, um, not just in their function, but in the market they're trying to win, which means you go out and you talk to a lot more people. >>You do a lot, you take a lot fewer things for granted. Um, you read less textbooks on how to build companies and you spend more time talking to your customers and your engineers, and you start to look at enabling. So the, we have made between machine learning, computer vision, and the amount of processing power that's available from things like AWS, including the services that you could just click box in places like the Amazon store. You actually have to be much more expansive in how you think about what you can get done without having to build a lot of things. Cause it's actually right there at your fingertips. Hopefully that kind of gets a little bit to what you were asking. >>Well, Alan, it's always great to have you on and great insight and, uh, always a pleasure to talk candidly. Um, normally we're a little bit more boisterous, but given how terrible the situation is with COVID while working at home, I'm usually in person, but you've been great. Take a minute to give a plug for the data collective venture capital firm. DCVC you guys have a really unique investment thesis you're in applied AI, computational biology, um, computational care, um, enterprise enablement. Geospatial is about space and Capella, which was featured carbon health, smart agriculture transportation. These are kind of like not on these are off the beaten path of like traditional herd mentality of venture capital. You guys are going after big problems. Give us an update on the firm. I know that firm has gotten bigger lately. You guys have >>No, I mean the further firm has gotten bigger, I guess since Matt, Zach started about a decade ago. So we have about $2.3 billion under management. We also have bio fund, uh, kind of a sister fund. That's part of that. I mean, obviously we are, uh, traditionally an early stage investor, but we have gone much longer now with these additional, um, um, investment funds and, and the confidence of our LPs. Uh, we are looking for bears. You said John, really large intractable, um, industry problems and transitions. Uh, we tend to back very technical founders and work with them very early in the creation of their business. Um, and we have a huge network of some of the leading people in our industry who work with us. Uh, we, uh, it's a little bit of our secret weapon. We call it our equity partner network. Many of them have been on the cube. >>Um, and these are people that work with us in the create, uh, you know, the creation of this. Uh, we've never been more excited because there's never been more opportunity. And you'll start to see, you know, you're starting to hear more and more about them, uh, will probably be a couple of years of report. We're a household name. Um, but you know, we've, we we're, we're washing deal flow. And the good news is I think more people want to invest in and build the things that we've. So we're less than itchy where people want to do what we're doing. And I think some of the large exits that starting to come our way or we'll attract more, more great entrepreneurs in that space. >>I really saw the data models, data, data trend early, you saw a Realty impacted, and I'll say that's front and center on Amazon web services reinvent this year. You guys were early super important firm. I'm really glad you guys exist. And you guys will be soon a household name if not already. Thanks for coming on. Right, >>Alan. Thanks. Thank you. Appreciate >>It. Take care. I'm John ferry with the cube. You're watching a reinvent coverage. This is the cube live portion of the coverage. Three weeks wall to wall. Check out the cube.net. Also go to the queue page on the Amazon event page, there's a little click through the bottom and the metadata is Mainstage tons of video on demand and live programming there too. Thanks for watching.

>>from our studios in the heart of Silicon Valley, Palo Alto, California It is a cute conversation. >>Hey, welcome back already, Jeffrey. Here with the cue, we're in our pal Amato Studios for acute conversation or excited, have ah, many Time Cube alone. I has been at all types of companies. He's moving around. We like to keep him close because he's got a great feel for what's going on. And now he's starting a new adventure. Eso really happy to welcome Alan Cohen back to the studio. Only great to see you. >>Hey, Draft, how are you >>in your new adventure? Let's get it right. It's the D C v c your partner. So this is ah, on the venture side. I'm gonna dark. You've gone to the dark side of the money side That is not a new firm, dark side. You know what's special about this town of money adventure right now, but you guys kind of have a special thesis. So tell us about yeah, and I think you've spoken >>to Matt and Zack. You know my partners in the past, So D. C. V. C is been in the venture business for about a decade and, um, you know, the 1st 5 years, the fund was very much focused on building, ah, lot of the infrastructure that we kind of take for granted. No things have gone into V m wear and into Citrix, and it's AWS, and hence the data collect of the D. C out of D. C. V. C. Really, the focus of the firm in the last five years and going forward is an area we call deep tech, which think about more about the intersection of science and engineering so less about. How do you improve the IittIe infrastructure? But how do you take all this computational power and put it to work in in specific industries, whether it's addressing supply chains, new forms of manufacturing, new forms of agriculture. So we're starting to see all that all the stuff that we've built our last 20 years and really apply it against kind of industrial transformation. So and we're excited. We just raise the $725 million fund. So we I got a little bit of ammunition to work with, >>Congratulate says, It's fun. Five. That's your eighth fund. Yeah, and really, it's consistent with where we're seeing all the time about applied a I and applied machine. Exactly. Right in New York, a company that's gonna build a I itt s'more the where you applying a i within an application, Where you applying machine, learning within what you do. And then you can just see the applications grow exactly right. Or are you targeting specific companies that are attacking a particular industrial focus and just using a eyes, their secret sauce or using deep taxes or secret uh, all of the above? Right. So, like I >>did when I think about D c v c like it's like so don't think about, um, I ops or throughput Orban with think about, um uh, rockets, robots, microbes, building blocks of effectively of human life and and of materials and then playing computational power and a I against those areas. So a little bit, you know, different focus. So, you know, it's the intersection of compute really smart computer science, but I'll give you a great example of something. It would be a little bit different. So we are investors and very active in a company called Pivot Bio, which is not exactly a household name. Pivot bio is a company that is replacing chemical fertilizer with microbes. And what I mean by that is they create microbes they used. So they've used all this big data and a I and computational power to construct microbes that when you plant corn, you insert the microbe into the planting cycle and it continuously produces nitrogen, which means you don't have to apply fertilizer. Right? Which fertilizer? Today in the U. S. A. $212 billion industry and two things happen. One you don't have. All of the runoff doesn't leech into the ground. The nitrous does. Nitrogen doesn't go into the air, and the crop yield has been a being been between about 12 and 15% higher. Right? >>Is it getting put? You know, the food industry is such a great place, and there's so many opportunities, both in food production. This is like beyond a chemical fertilizer instead of me. But it's great, but it's funny because you think of GMO, right? So all food is genetically modified. It's just It took a long time in the past because you had to get trees together, and yet you replant the pretty apples and throw the old apple trees away. Because if you look at an apple today versus an apple 50 years, 100 years, right, very, very different. And yet when we apply a man made kind of acceleration of that process than people, you know, kind of pushed back Well, this is this is not this is not nature, So I'm just curious in, in, in in, Well, this is like a microbe, you know? You know, they actually it is nature, right? So nature. But there'll be some crazy persons that wait, This is not, you know, you're introducing some foreign element into Well, you could take >>potash and pour it on corn. Or you could create a use, a microbe that creates nitrogen. So which one is the chemical on which one is nature, >>right, That that's why they get out. It's a funny part of that conversation, but but it's a different area. So >>you guys look, you guys spent a lot of time on the road. You talked a lot of startups. You talked a lot of companies. You actually talked to venture capitalists and most of the time where you know, we're working on the $4 trillion I t sector, not an insignificant sector, right? So that's globally. It's that's about the size of the economy. You know, manufacturing, agriculture and health care is more like 20 to $40 billion of the economy. So what we've also done is open the aperture to areas that have not gone through the technical disruption that we've seen an I t. Right now in these industries. And that's what's that mean? That's why I joined the firm. That's why I'm really excited, because on one hand you're right. There is a lot of cab you mentioned we were talking before. There is a lot of capital in venture, but there's not a CZ much targeted at the's area. So you have a larger part of global economy and then a much more of specific focus on it. >>Yeah, I think it's It's such a you know, it's kind of the future's here kind of the concept because no one knows, you know, the rate of which tech is advancing across all industries currently. And so that's where you wake up one day and you're like, Oh, my goodness, you know, look at the impacts on transportation. Look at the impacts on construction of the impacts on health care. Look at the impacts on on agriculture. So the opportunity is fantastic and still following the basic ideas of democratizing data. Not using a sample of old data but using, you know, real time analytics on hold data sets. You know, all these kind of concepts that come over really, really well to a more commercial application in a nightie application. Yeah. So, Jeff, I'm kind of like >>looking over your shoulder. And I'm looking at Tom Friedman's book The world is flat. And you know, if we think about all of us have been kind of working on the Internet for the last 20 years, we've done some amazing things like we've democratized information, right? Google's fairly powerful part of our lives. We've been able to allow people to buy things from all over the world and ship it. So we've done a lot of amazing things in the economy, but it hasn't been free. So if I need a 2032 c r. 20 to 32 battery for my key fob for my phone, and I buy it from Amazon and it comes in a big box. Well, there's a little bit of a carbon footprint issue that goes with that. So one of our key focus is in D. C V. C, which I think is very unique, is we think two things can happen is that weaken deal with some of the excess is over the economy that we built and as well as you know, unlock really large profit pulls. At the end of the day, you know, it has the word Venture Patrol says the word capital, right? And so we have limited partners. They expect returns. We're doing this obviously, to build large franchises. So this is not like this kind of political social thing is that we have large parts of the economy. They were not sustainable. And I'll give you some examples. Actually, you know, Jeff Bezos put out a pledge last week to try to figure out how to turn Amazon carbon neutral. >>Pretty amazing thing >>right with you from the was the richest person Now that half this richest person in the world, right? But somebody who has completely transformed the consumer economy as well as computing a comedy >>and soon transportation, right? So people like us are saying, Hey, >>how can we help Jeff meet his pledge? Right? And like, you know, there are things that we work on, like, you know, next generation of nuclear plants. Like, you know, we need renewables. We need solar, but there's no way to replace electricity. The men electricity, we're gonna need to run our economy and move off of coal and natural gas, Right? So, you know, being able to deal with the climate impacts, the social impacts are going to be actually some of the largest economic opportunities. But you can look at it and say, Hey, this is a terrible problem. It's ripping people across. I got caught in a traffic jam in San Francisco yesterday upon the top of the hill because there was climate protest, right? And you know, so I'm not kind of judging the politics of that. We could have a long conversation about that. The question is, how do you deal with these real issues, right and obviously and heady deal with them profitably and ethically, and I think that something is very unique about you know, D. C. V. C's focus and the ability to raise probably the largest deep tech fund ever to go after. It means that you know, a lot of people who back us also see the economic opportunity. And at the end of day there, you know, a lot of our our limited partners, our pension funds, you know, in universities, like, you know, there was a professor who has a pension fund who's gotta retire, right? So a little bit of that money goes into D C V C. So we have a responsibility to provide a return to them as well as go after these very interesting opportunities. >>So is there any very specific kind of investment thesis or industry focus Or, you know, kind of a subset within, you know, heavy lifting technology and science and math. That's a real loaded question in front of that little. So we like problems >>that can be solved through massive computational capability. And so and that reflects our heritage and where we all came from, right, you and I, and folks in the industry. So, you know, we're not working at the intersection of lab science at at a university, but we would take something like that and invest in it. So we like you know we have a lot of lessons in agriculture and health care were, surprisingly, one of the largest investors in space. We have investments and rocket labs, which is the preferred launch vehicle for any small satellite under two and 1/2 kilograms. We are large investors and planet labs, which is a constellation of 200 small satellites over investors and compel a space. So, uh, well, you know, we like space, and, you know, it's not space for the sake of space. It's like it's about geospatial intelligence, right? So Planet Labs is effectively the search engine for the planet Earth, right? They've been effectively Google for the planet, right? Right. And all that information could be fed to deal with housing with transportation with climate change. Um, it could be used with economic activity with shipping. So, you know, we like those kinds of areas where that technology can really impact and in the street so and so we're not limited. But, you know, we also have a bio fund, so we have, you know, we're like, you know, we like agriculture and said It's a synthetic biology types of investments and, you know, we've still invest in things like cyber we invest in physical security were investors and evolve, which is the lead system for dealing with active shooters and venues. Israel's Fordham, which is a drone security company. So, um, but they're all built on a Iot and massive >>mess. Educational power. I'm just curious. Have you private investment it if I'm tree of a point of view because you got a point of view. Most everything on the way. Just hear all this little buzz about Quantum. Um, you know, a censure opened up their new innovation hub in the Salesforce tower of San Francisco, and they've got this little dedicated kind of quantum computer quanta computer space. And regardless of how close it is, you know there's some really interesting computational opportunities last challenges that we think will come with some period of time so we don't want them in encryption and leather. We have lost their quantum >>investments were in literally investors and Righetti computing. Okay, on control, cue down in Australia, so no, we like quantum. Now, Quantum is a emerging area like it's we're not quite at the X 86 level of quantum. We have a little bit of work to get there, but it offers some amazing, you know, capabilities. >>One thing >>that also I think differentiates us. And I was listening to What you're saying is we're not afraid. The gold long, I mean a lot of our investments. They're gonna be between seven and 15 years, and I think that's also it's very different if you follow the basic economics adventure. Most funds are expected to be about 10 years old, right? And in the 1st 3 or four years, you do the bulk of the preliminary investing, and then you have reserves traditional, you know, you know, the big winners emerged that you can continue to support the companies, some of ours, they're going to go longer because of what we do. And I think that's something very special. I'm not. Look, we'd like to return in life of the fun. Of course, I mean, that's our do share a responsibility. But I think things like Quantum some of these things in the environment. They're going to take a while, and our limited partners want to be in that long ride. Now we have a thesis that they will actually be bigger economic opportunities. They'll take longer. So by having a dedicated team dedicated focus in those areas, um, that gives us, I think, a unique advantage, one of one of things when we were launching the fund that we realized is way have more people that have published scientific papers and started companies than NBA's, um, in the firm. So we are a little bit, you know, we're a little G here. That >>that's good. I said a party one time when I was talking to this guy. You were not the best people at parties we don't, but it is funny. The guy was He was a VC in medical medical tech, and I didn't ask him like So. Are you like a doctor? Did you work in a hospital where you worked at A at a university that doesn't even know I was investment banker on Wall Street and Michael, that's that's how to make money move. But do you have? Do you have the real world experience of being in the trenches? Were Some of these applications are being used, but I'm also curious. Where do you guys like to come in? ABC? What's your well, sweets? Traditionally >>we are have been a seed in Siri's. A investor would like to be early. >>Okay, Leader, follow on. Uh, everybody likes the lead, right? Right, right, right. You know what? Your term feet, you >>know? Yeah, right. And you have to learn howto something lead. Sometimes you follow. So we you know, we do both. Okay, Uh, there are increasing as because of the size of the fund. We will have the opportunity to be a little bit more multi stage than we traditionally are known for doings. Like, for example, we were seed investors in little companies, like conflict an elastic that worked out. Okay, But we were not. Later stage right. Investors and company likes companies like that with the new fund will more likely to also be in the later stages as well for some of the big banks. But we love seed we love. Precede. We'd like three guys in in a dog, right? If they have a brilliant >>tough the 7 50 to work when you're investing in the three guys in a dog and listen well and that runs and runs and you know you >>we do things we call experiments. Just you know, uh, we >>also have >>a very unique asset. We don't talk about publicly. We have a lot of really brilliant people around the firm that we call equity partners. So there's about 60 leaning scientists and executives around the world who were also attached to the firm. They actually are, have a financial stake in the firm who work with us. That gives us the ability to be early Now. Clearly, if you put in a $250,000 seed investment you don't put is the same amount of time necessarily as if you just wrote a $12 million check. What? That's the traditional wisdom I found. We actually work. Address this hard on. >>Do you have any? Do you have any formal relationships within the academic institutions? How's that >>work? Well, well, I mean, we work like everybody else with Stanford in M I t. I mean, we have many universities who are limited partners in the fund. You know, I'll give you an example of So we helped put together a company in Canada called Element A I, which actually just raised $150 million they, the founder of that company is Ah, cofounder is a fellow named Joshua Benji. Oh, he was Jeff Hinton's phD student. Him in the Vatican. These guys invented neural networks ing an a I and this company was built at a Yasha his position at the University of Montreal. There, 125 PhDs and a I that work at this firm. And so we're obviously deeply involved. Now, the Montreal A icing, my child is one of the best day I scenes in the world and cool food didn't and oh, yeah, And well, because of you, Joshua, because everybody came out of his leg, right? So I think, Yes, I think so. You know, we've worked with Carnegie Mellon, so we do work with a lot of universities. I would, I would say his university's worked with multiple venture firm Ah, >>such an important pipeline for really smart, heavy duty, totally math and tech tech guys. All right, May, that's for sure. Yeah, you always one that you never want to be the smartest guy in the room, right, or you're in the wrong room is what they say you said is probably >>an equivalent adventure. They always say you should buy the smallest house in the best neighborhood. Exactly. I was able to squeeze its PCB sees. I'm like, the least smart technical guy in the smartest technical. There >>you go. That's the way to go. All right, Alan. Well, thanks for stopping by and we look forward. Thio, you bring in some of these exciting new investment companies inside the key, right? Thanks for the time. Alright. He's Alan. I'm Jeff. You're watching the Cube. We're Interpol about the studios. Thanks for watching. We'll see you next time.

(upbeat music) >> Welcome to this special CUBEConversation here in the Palo Alto CUBE studio. I'm John Furrier, the co-host, theCUBE co-founder of SiliconANGLE Media. In theCUBE we're here with Alan Cohen, CUBE alumni, joining us today for a special segment on the future of technology and the impact to society. Always good to get Alan's commentary, he's the Chief Commercial Officer for Illumio, industry veteran, has been through many waves of innovation and now more than ever, this next wave of technology and the democratization of the global world is upon us. We're seeing signals out there like cryptocurrency and blockchain and bitcoin to the disruption of industries from media and entertainment, biotech among others. Technology is not just a corner industry, it's now pervasive and it's having some significant impacts and you're seeing that in the news whether it's Facebook trying to figure out who they are from a data standpoint to across the board every company. Alan, great to see you. >> Always great to be here, I always feel like, I can't tell whether I'm at the big desk at ESPN or I've got the desk chair at CNBC, but that's what it's like being on theCUBE. >> Great to have you on extracting the signal noises, a ton of noise out there, but one of things of the most important stories that we're tracking is, that's becoming very obvious, and you're seeing it everywhere from Meed to all aspects of technology. Is the impact of technology to people in society, okay you're seeing the election, we all know what that is, that's now a front and center in the big global conversation, the Russian's role of hacking, the weaponizing of data, Facebook's taking huge brand hits on that, to emerging startups, and the startup game that we're used to in Silicon Valley is changing. Just the dynamics, I mean cryptocurrency raises billions of dollars but yet (laughs) something like 10, 20% of it's been hacked and stolen. It's a really wild west kind of environment. >> Well it's a very different environment. John, you and I have been in the technology industry certainly for a whole bunch of lines under our eyes over the years have gone there. My friend Tom Friedman has this phrase that he says, "Everybody's connected and nobody's in control," so the difference is that, as you just said, the tech industry is not a separate industry. The tech industry is in every product and service. Cryptocurrency is like, the concept of that money is just code. You know, our products and services are just code, it raises a couple of really core issues. Like for us on the security point of view, if I don't trust people with the products they're selling me, that I feel like they're going to be hacked, including my personal data, so your product now includes my personal information, that's a real problem because that could actually melt down commerce in a real way. Obviously the election is if I don't trust the social systems around it, so I think we're all at an, and I'd like to say world is still kind of like iRobot moment, and if you remember iRobot, it's like, people build all these robots to serve humankind and then one day the robots wake up and they go, "We have our own point of view on how things are going to work" and they take over, and I think whether it's the debate about AI, whether cryptocurrency's good or bad, or more importantly, the products and services I use, which are now all digitally connected to me, whether I trust them or not is an issue that I think everyone in our industry has to take a step back because without that trust, a lot of these systems are going to stop growing. >> Chaos is an opportunity, I think that's been quoted many times, a variety-- >> You sound like Jeff Goldblum in like Jurassic Park, yeah. (laughing) >> So chaos is upon us, but this is an opportunity. The winds are shifting, and that's an opportunity for entrepreneurs. The technology industry has to start working for us but we've got to be mindful of these blind spots and the blind spots are technology for good not necessarily just for profits, so that also is a big story right now. We see things like AI for good, Intel has been doing a lot of work on that area, and you see stars dedicated to societal impact, then young millennials, you see the demographic shift where they want to work on stuff that empowers people and changes society so a whole kind of new generation revolution and kind of hippie moment, if you look at the 60s, what the 60s were, right? >> Well there's people out in the street protesting, right? There were a couple of million women out in the street this weekend, so we are in that kind of moment again, people are not happy with things. >> And I believe this is a signal of a renaissance, a change, a sea change at enormous levels, so I want to get your thoughts on this. As technology goes out in mainstream, certainly from a security standpoint, your business Illumio is in that now where there's not a lot of control, just like you were mentioning before we came on that all the spends happening but no one has more than 4% market share. These are dynamics and this is not just within one vertical. What's your take on this, how do you view this sea change that's upon us, this tech revolution? >> Well, you know, think about it. You and I grew up in the era where clients server took over from main frame, right? So remember there was this big company called IBM and they owned a lot of the industry, and then it blew up for client server and then there were thousands of companies and it consolidated its way down, but when those thousands of new companies, like you didn't know what was going to be Apollo and what was going to be Oracle right? Like you didn't know how that was going to work out, there was a lot of change and a lot of uncertainty. I think now we're seeing this on a scale like that's 10x of this that there's so much innovation and there's so much connectedness going on very rapidly, but no one is in control. In the security market, you know, what's happening in our world is like, people said, okay I have to reestablish control over my data, I've lost that control, and I've lost it for good reasons, meaning I've evolved to the cloud, I've evolved to the app economy, I've done all of these things, and I've lost it for bad reasons because like am I, like I'm not really running my data center the way I should. We're in the beginning of a move in of people kind of reasserting that control, but it's very hard to put the genie back in the bottle because the world itself is so much more dynamic and more distributed. >> It's interesting, I've been studying communities and online communities for over a decade in terms of dynamics. You know, from the infrastructural level, how packets move to a human interaction. It's interesting, you mentioned that we're all connected and no one's in control, but you now see a ground swell of organic self-forming networks where communities are starting to work together. You kind of think about the analog world when we grew up without computers and networks, you kind of knew everyone, you knew your neighbor, you knew who the town loony was, you kind of knew things and people watch each other's kids and parents sat from the porch, let the kid play, that's the way that I grew up, but it was still chaotic but yet somewhat controlled by the group. So I got to ask you, when you see things like cryptocurrency, things like KYC, know your customer, anti money laundering, which is, you know these are policy based things, but we're in a world now where, you know, people don't know who their neighbors are. You're starting to see a dynamic where people are-- >> Put the phone down. >> Asserting themselves to know their neighbor, to know their customer, to have a connected tissue with context and so your trust and reputation become super important. >> Well I think people are really, so like every time there is a shift in technology, there's scary stuff. There's the fuddy-duddy moment where people are saying, "Oh we can't use that," or "I don't know that," and you know, clearly we're in this kind of new kam-ree and explosion of this cloud mobile blah blah blah type of computing thing and ... Blah blah blah is always a good intersection when you don't have a term. Then things form around it, and just as you said, so if you think about 25 years ago, right, people created The WELL and there was community writing first bulletin boards and like now we have Facebook and you go through a couple of generations and for a while, things feel out of control and then it reforms. I personally am an optimist. Ultimately I believe in the inherent goodness of people, but inherent goodness leaves you open and then, you know, could be manipulated, and people figure these things out. Whether it's cryptocurrency or AI, they are really exciting technologies that don't have any ground rules, right? What's going to happen I believe is that people are going to reestablish ground rules, they're going to figure out some of the core issues, and some of these things may make it, and some of these things may not make it. Like cryptocurrency, like I don't know whether it makes it or not, but certainly the blockchain as a technology we're going to be incorporating in what we do, and maybe the blockchain replaces VPNs and last generation's way of protecting zeros and ones. If AI is figuring out how to read an MRI in five minutes, it's a good thing, and if the AI is teaching you how to exclude old folks for me finding jobs, it's a bad thing. I think as technology forms, there's always Spectre and 007, right? There's always good and bad sides and you know, I think if you believe-- >> I'm with you on that. I think value shifts and I think ultimately it's like however you want to look at it will shift to something, value activity will be somewhere else. Behind me in the bookshelf is a book called The World is Flat and you're quoted in it a lot as a futurist because you have inherently that kind of view, well that's not what you do for a living, but you're kind of in an opt-- >> Alan: Marketing, futurist, kind of same thing. >> Thomas Friedman, the book, that was a great book and at that time, it was game changing. If you take that premise into today where we are living in a flat world and look at cryptocurrency, and then over with the geo political landscape, I mean I just can't see why the Federal Reserve wouldn't reign in this cryptocurrency because if Japan's going to control a bunch of, or China, it's going to be some interesting conversations. I mean I would be like all over that if I was in the Federal Reserve. >> I think people-- Look, cryptocurrency's really interesting and I think people a little over-rotated. If you look at the amount of GDP that's invested in cryptocurrency, it's like, I don't know, there might've been, you know 20 years ago the same amount involved invested in Beanie Babies, right? I mean things show up for a while and the question is is it sustainable over time? Now I'm trained as an economist, you and I have had this conversation, so I don't know how you have a series of monetary without kind of governmental backing, I just don't understand. But I do understand that people find all kinds of interesting ways to trade, and if it's an exchange, like I mean what's the difference between gold and cryptocurrency? Somebody has ascribed a value to something that really has no efficacy outside of its usage. Yeah I mean you can make a filling or bracelets out of gold but it doesn't really mean anything except people agree to a unit of value. If people do that with cryptocurrency, it does have the ability to become a real currency. >> I want to pick your perspective on this being an economist, this is is the hottest area of cryptocurrency, it's also known as token economics, is a concept. >> Alan: Token economics. >> You know that's an area that theCUBE, with CUBE coins, experimenting with tokens. Tokens technically are used for things in mobile and whatnot but having a token as a utility in a network is kind of the whole concept, so the big trend that we're seeing and no one's really talking about this yet is instead of having a CTO, Chief Technology Officer, they're looking for a CEO, a Chief Economist Officer, because what you're seeing with the MVP economy we're living in and this gamification which became growth hack which didn't really help users, the notion of decentralized applications and token economics can open the door for some innovation around value and it's an economic problem, how you have a fiscal policy of your token, there's a monetary policy, what's it tied to? A product and a technology, so you now have a now a new, twisted, intertwined mechanism. >> Well you have it as part of this explosion, right? We're at a period of time, it feels like there's a great amount of uncertainly because everything's, you know, there's a lot of different forces and not everybody's in control of them, and you know, it's interesting. Google has this architecture, they call it BeyondCorp, where the concept is like networks are not trusted so I will just put my trust in this device, Duo Security's a great example of a company that's built a technology, a security technology around it which is completely antithetical to everything we know about networks and security. They're saying everything's the internet, I'll just protect the device that it's on. It's a kind of perfect architecture for a world like where nobody is in charge, so just isolate those, buy this, what is a device? It's a token too, it's a person, your iPhone's your personal token. Then over time, systems will form around it. I think we just have to, we always have to learn how to function in a different type of economy. I mean democracy was a new economy 250 years ago that kind of screwed around with most of the world, and a lot of people didn't think it would make it, in fact we went through two World War wars that it was a little on the edge whether democracy was going to make it and it seems to have done okay, like it was pretty good IPO to buy into. You know, in 1776. But it's always got risks and struggles with it. I think if, ultimately it comes together, it's whether a large group of people can find a way to function socially, economically, and with their personal safety in these systems. >> You bring up a great point, so I want to go to the next level in this conversation which is around-- >> Alan: You've got the wrong guy if you're going to the next level because I just tapped out. >> No, no, no we'll get you there. It's my job to get you there. The question is that everyone always wants to look at, whether it's someone looking at the industry or actors inside the industries across the board, mainly the tech and we'll talk about tech, is the question of are we innovating? You brought up some interesting nuances that we talk about with token economics. I mean Steve Jobs had the classic presentation where he had street signs, technology meets liberal arts. That's a mental image that people who know Steve Jobs, know Apple, was a key positioning point for Apple at that time which was let's make computers and technology connect with society, liberal arts. But we were just talking about is the business impact of technology, the economics, and that's just not like just some hand waving, making technology integrate with business. You're in the security business, There are some gamification technology, gamification that's business built into the products. So the question is, if we have the integration of business, technology, economics, policy, society rolling into the product definitions of innovation, does that change the lens and the aperture of what innovation is? >> I think it does, right? The IT industry's somewhere between three and four trillion dollars depends on how it counts in. It grows pretty slowly, it grows by a low single digit. That tells me as composite, like is that, that slow growth is a structural signal about how consumers of technology think in a macro sense. On a micro sense, things shift very rapidly, right? New platforms show up, new applications show up, all kinds of things show up. What I don't think we have done yet, to your point, is in this new integrated world, the role of technology is not just technology anymore. I don't think, you know you said you need Chief Economical Officer, what about Chief Political Officer? What about a Chief Social Officer? How many heads of HR make decisions about the insertion of systems into their business? And that's what this kind of iRobot concept is in my mind which is that you know, we are exceeding control of things that used to be done by human beings to systems and when you see control, the social mores, the political mores, the cultural mores, and the human emotional mores have to move with it. We don't tend to think about things like that. We're like, "I win and my competitors lose." Like technology used to be much more of a zero sum, my tech's better than yours. But the question is not just is my tech better than yours, is my customer better off in their industry for the consumption of my technology of inserting it into their offering or their service? You know what, that is probably going to be the next area of study. The other thing that's very important in whether, any of you have read Peter Thiel's book Zero to One, the nature of competition technology used to feel like a flat playing field and now the other thing that's rising is do you have super winners? And then what is the power of the super winners? So you mentioned whether it's Facebook or Google or Amazon or you know, or Microsoft, the FANG companies right? Their roles are so much more significant now than the Four Horsemen of the Nasdaq were in 2000 when you had Intel and Cisco and Oracle and Saht-in it's a different game. >> You're seeing that now. That's a good point, so you're reinforcing kind of this notion that the super players if you will are having an impact, you're mentioning the confluence of these new sectors, you know, government, policy, social are new areas. The question is, this sounds like a strategic imperative for the industry, and we're early so it's not like there's a silver bullet or is there, it doesn't sound like there, so to me that's not really in place yet, I mean. >> Oh no. We're not even in alpha. We have demo code for the new economy and we're trying to get the new model funded. >> John: That's the demo version, not the real version. It's the classic joke. >> Yeah this not the alpha or the beta version that like you're going to go launch it. If people think they're launching it, I think it's a little preliminary and you know, it's not just financial investment, it's like do I buy in? I'll tell you something that's really interesting. I've been visiting a bunch of our customers lately and the biggest change I'd say in the last two years is they now have to prove to their customers they're going to be good custodians of their data. Think about that, like you could go to any digital commerce you do, any website you use and you give them basically the ticket to the Furrier family privacy, you do, but you don't spend a lot of time questioning whether they're really going to protect your data. That has changed. And it's really changing in B2B and in government organizations. >> The role of data to us is regulation, GDPR in Europe, but this is a whole new dynamic. >> It's not just my data because I'm worried about my credit card getting hacked, I'm worried about my identity. Like am I going to show up as a meme in some social media feed that's substituted for the news? I don't want to use the FN word, but you know what I mean? It is a really brave new world. It's like a hyper-democracy and a hyper-risky state at the same time. >> We're living in an area of massive pioneering, new grounds, this is new territory so there's a lot of strategic imperatives that are yet not defined. So now let's take it to how people compete. We were talking before we came on camera, you mentioned the word we're in an MVP economy, minimum viable product concept, and you're seeing that being a standard operating procedure for essentially de-risking this challenge. The old way of you know, build it, ship it, will it work? We're seeing the impact from Hollywood to big tech companies to every industry. >> Well you've got a coffee mug for a company that does both. Amazon does MVP in entertainment, like we'll create one pilot and see if it goes as opposed to ordering a season for 17 million dollars to hey, let's try this feature and put it out on AWS. What's interesting is I don't think we've completely tilted but the question is will buyers of technology, of entertainment products, of any product start to say, "I'll try it." You know like, look, I've done four startups and I always know there's somebody I can go to get and try my early product. There are people that just have an appetite, right? The Jeffrey Moores, early adapter, all the way to the left of the-- >> They'll buy anything new. >> They'll try it, they're interested, they have the time and the resources, or they're just intellectually curious. But it was always a very small group of people in the IT industry. What I think that the MVP economy is starting to do is look, I Kickstarted my wallet. I don't know if I'm the only person who bought that skinny little wallet on Kickstarter, it doesn't matter to me, it had appeal. >> What's the impact of the MVP economy? Is it going to change to the competitive landscape like Peter Thiel was suggesting? Does it change the economics? Does it change the makeup of the team? All of the above? What's your thoughts on how this is going to impact? Certainly the encumbrance will seem to be impacted or not. >> I think two things happen. One, it attacks the structural way markets work. If you go back to classical economics, land, labor, and capital, and people who own those assets, now you add information as a fourth. If those guys were around now they would say that would be the fourth core asset, production, I'm sorry, means of production is the term. The people who can dominate that would dominate a market. Now that that's flattened out, you know, I think it pushes against the traditional structures and it allows new giants to kind of show up overnight. I mean the e-commerce market is rife with companies that have, like look at Stich Fix. A company driven by AI, fashions, tries to figure out what you like, sends it to you every month, just had a monster IPO. We invented, by the way the Spiegal Catalog, except like with a personal assistant and you know, it's changed that in just a short number of years. I think two things happen. One is you'll get new potential giants but certainly new players in the market quickly. Two, it'll force a change in the business model of every company. If you're in a cab in any city in the world, I'm not saying whether the app works there or not, Uber and Lyft has forced every cab company to show you here's the app to call the cab. They haven't quite caught up to the rest of the experience. What I think happens is ultimately, the larger players in an industry have to accommodate that model. For people like me, people who build companies or large technology companies, we may have to start thinking about MVPing of features early on, working with a small group, which is a little what the beta process is but now think about it as a commercial process. Nobody does it, but I bet sure a lot of people will be doing it in five years. >> I want to get your take on that approach because you're talking about really disrupting, re-imagining industry, the Spiegal catalog now becomes digital with technology, so the role of technology in business, we kind of talked about the intertwine of that and its nuance, it's going to get better in my opinion. But specifically the IT, the information technology industry is being disrupted. Used to be like a department, and the IT department will give you your phone on your desk, your PC on your desk or whatever, now that's being shattered and everyone that's participating in that IT industry is evolving. What's your take on the IT industry's disruption? >> Well look, it started 20 years ago when Marc Benioff and Salesforce decided to sell the sales forces instead of IT people, right? They went around to the end buyer. I don't think it's a new trend, I think a lot of technology leaders now figure out how to go to the business buyer directly and make their pitch and interestingly enough, the business buyer, if the IT team doesn't get on board, will do that. >> John: Because of cloud computing and ... >> Because of everything. The modern analog I think in our world is that the developers are increasingly in control. Like my friend Martin Casado up in Andreessen talks about this a lot. The traditional model on our industry is you build a product, you launch it, you launch your company, you work with the traditional analyst firms, you try to get a little bit of halo, you get customer references, those are the things you do and there was a very wall structured, for example, enterprise buying cycle. >> And playbook. >> Playbook, and there's the challenger sale and there's Jeffrey Moore and there's like seeing God. You've got your textbooks on how it's been done. As everything turns into code, the people who work with code for a living increasingly become the front end of your cycle and if you can get to them, that changes. Like I mean think about like, you know, Tom wrote about this actually in The World is Flat, like Linux started as a patchy. It didn't start with the IT department, it started with developers and there was the Linux foundation and now Linux is everything. >> There's a big enemy called the big mini computer, and not operating systems and work stations. >> Wiped out whole parts of Boston and other parts of the world, right? >> Exactly, that's why I moved out here. >> You filed client's server out here. >> I filed a smell of innovation. No but this is interesting because this location of industries is happening, so with that, so they also on the analog, so Martin's at Andreessen, so we'll do a little VC poke there at the VCs because we love them of course, they're being dislocated-- >> I don't (mumbles) my investors. >> Well no, their playbook is being challenged. Here's an example, go big or go home investment thesis seems not to be working. Where if you get too much cash on the front end, with the MVP economy we were just riffing on and with the big super powers, the Amazons and the Googles, you can't just go big or go home, you're going to be going home more than going big. >> I think they know that. I mean Dee-nuh Suss-man who's I think Chief Investment Officer at Nasdaq has a very well known talking line that there are half as many public companies as there were 10 years ago, so the exit scenario for our industry is a little bit different. We now have things like acqui-hires, right we have other models for monetization, but I think what the flip side of it is, we're in the-- >> Adapt or die because the value will shift. Liquidity's changing, which acqui-hires-- >> I think the investment community gets it completely and they spend a lot more time with the developer mindset. In fact I think there's been a doubling down focus on technical founders versus business founders for companies for just that reason because as everything turns to code, you got to hang out with the code community. I think there are actually-- >> You think there'll be more doubling down on technical founders? You do, okay. >> Yeah I think because that is ultimately the shift. There are business model shifts, but it's, you know, I mean like Uber was a business model shift, I mean the technology was the iPhone and GPS and they wrote an app for it, but it was a business model shift, so it can be a business model shift. >> And then scale. >> And then scale and then all of those other things. But I think if you don't think about developers when you're in our, and it's like we built Illumio because a developer could take the product and get started. I mean you can, developers actually can write security policy with our product because there's a class of customers, where as not everyone where that matters. There's other people where the security team is in charge or the infrastructure team is in charge but I think everything is based on zeros and ones and everything is based on code and if you're not sensitive to how code gets bought, consumed, I mean there's a GitHub economy which is I don't even have to write the code, I'll go look at your code and maybe use pieces of it, which has always been around. >> Software disruption is clear. Cloud computing is scale. Agile is fast, and with de-risking capabilities, but the craft is coming back and some will argue, we've talked about on theCUBE before is that, you know, the craftsmanship of software is moving to up the stack in every industry, so-- >> I think it's more like a sports league. I love the NBA, right? In the old days, your professional team, you'd scout people in college. Now they used to scout them in high school, now they're scouting kids in middle school. >> (laughs) That's sad. >> Well what it says is that you have to-- >> How can you tell? >> You know but they can, right? I think you know, your point about it craft, you're going to start tracking developers as they go through their career and invest and bet on them. >> Don't reveal our secrets to theCUBE. We have scouts everywhere, be careful out there. (laughs) >> But think about that, imagine it's like there's such a core focus on hiring from college, but we had an intern from high school two years ago. We hire freshman. >> Okay so let's go, I want to do a whole segment on this but I want to just get this point because we're both sports fans and we can riff on sports all day long. >> I'm just not getting the chance >> And the greatness of Tom Brady >> to talk about the Patriots. >> And Tom Brady's gotten his sixth finger attached to his hands for his sixth ring coming up. No but this is interesting. Sports is highly data driven. >> Alan: Yep. >> Okay and so what you're getting at here, with an MVP economy, token economics is more of a signal, not yet mainstream, but you can almost go there and think okay data driven gives you more accuracy so if you can bring data driven to the tech world, that's kind of an interesting point. What's your thoughts on that? >> Yeah I mean look, I think you have to track everything. You have to follow things, and by the way, we have great tools now, you can track people through LinkedIn. There's all kinds of vehicles to tracking individuals, you track products, you track everything, and you know look, we were talking about this before we went on the show right, people make decisions based on analytics increasingly. Now the craft part is what's interesting and I'm not the complete expert, I'm on the business side, I'm not an engineer by training, but look a lot of people understand a great developer is better than five bad developers. >> Well Mark Andris' 10x is a classic example of that. >> There's clearly a star system involved, so if I think in middle school or in high school, you're going to be a good developer, and I'm going to track your career through college and I'm going to try to figure out how to attach. That's why we started hiring freshmen. >> Well my good friend Dave Girouard started a company that does that, will fund the college education for people that they want to bet on. >> Sure, they're just taking an option in them. >> Yeah, option on their earnings. Exactly. >> They are. >> It sounds like token economics to me. (laughs) >> You know you can sell anything. We are in that economy, you can sell those pieces. The good news is I think it can be a great flattener, meaning that it can move things back more to a meritocracy because if I'm tracking people in high school, I'm not worrying whether they're going to go to Stanford or Harvard or Northwestern, right? I'm going to track their abilities in an era and it's interesting, speaking about craft, you know, what are internships? They're apprenticeships. I mean it is a little bit like a craft, right? Because you're basically apprenticing somebody for a future payout for them coming to work for you and being skilled because they don't know anything when they come and work, I shouldn't say that, they actually know a lot of things. >> Alan, great to have you on theCUBE as always, great to come in and get the update. We'll certainly do more but I'd like to do a segment on you on the startup scene and sort of the venture capital dynamics, we were tracking that as well, we've been putting a lot of content out there. We believe Silicon Valley's a great place. This mission's out there, we've been addressing them, but we really want to point the camera this year at some of the great stuff, so we're looking forward to having you come back in. My final question for you is a personal one. I love having these conversations because we can look back and also look forward. You do a lot of mentoring and you're also helping a lot of folks in the industry within just your realm but also startups and peers. What's your advice these days? Because there's a lot of things, we just kind of talked a lot of it. When people come to you for advice and say, "Alan, I got a career change," or "I'm looking at this new opportunity," or "Hey, I want to start a company," or "I started a company," how is your mentoring and your advisory roles going on these days? Can you share things that you're advising? Key points that people should be aware of. >> Well look, ultimately ... I never really thought about it, you just asked the question so, ultimately, I think to me it comes down to own your own fate. What it means is like do something that you're really passionate about, do something that's going to be unique. Don't be the 15th in any category. Jack Welch taught us a long time ago that the number one player in a market gets 70% of the economic value, so you don't want to play for sixth place. It's like Ricky Bobby said, if you're not first, you're last. (John chuckles) I mean you can't always be first, but you should play for that. I think for a lot of companies now, I think they have to make sure that, and people participating, make sure that you're not playing the old playbook, you're not fighting yesterday's battle. Rhett Butler in Gone With the Wind said, "There's a lot of money in building up an empire, "and there's even more money in tearing it down." There are people who enter markets to basically punish encumbrance, take share because of innovation, but I think the really inspirational is you know, look forward five years and find a practical but aggressive path to being part of that side of history. >> So are we building up or are we taking down? I mean it seems to me, if I'm not-- >> You're always doing both. The ocean is always fighting the mountains, right? That is the course of, right? And then new mountains come up and the water goes someplace else. We are taking down parts of the client server industry, the stack that you and I built a lot of our personal career of it, but we're building this new cloud and mobile stack at the same time. And you're point is we're building a new currency stack and we're going to have to build a new privacy stack. It's never, the greatest thing about our industry is there's always something to do. >> How has the environment of social media, things out there, we're theCUBE, we do our thing with events, and just in general, change the growth plans for individuals if you were, could speak to your 23 year old self right now, knowing what you know-- >> Oh I have one piece of advice I give everybody. Take as much risk as humanly possible in your career earlier on. There's a lot of people that have worked with me or worked for me over the years, you know people when they get into their 40s and they go, "I'm thinking about doing a startup," I go, "You know when you got two kids in college "and you're trying to fund your 401K, "working for less cash and more equity may not be "the most comfortable conversation in your household." It didn't work well in my household. I mean I'm like Benjamin Button. I started in big companies, I'm going to smaller companies. Some day it's just going to be me and a dog and one other guy. >> You went the wrong way. >> Yeah I went the wrong way and I took all the risk later. Now I was lucky in part that the transition worked. When I see younger folks, it's always like, do the riskiest thing humanly possible because the penalty is really small. You have to find a job in a year, right? But you know, you don't have the mortgage, and you don't have the kids to support. I think people have to build an arc around their careers that's suitable with their risk profile. Like maybe you don't buy into bitcoin at 19,000. Could be wrong, could be 50,000 sometime, but you know it's kind of 11 now and it's like-- >> Yeah don't go all in on 19, maybe take a little bit in. It's the play and run-- >> Dollar cost averaging over the years, that's my best fidelity advice. I think that's what's really important for people. >> What about the 45 year old executive out there, male or female obviously, the challenges of ageism? We're in economy, a gig economy, whatever you want to call, MVP economics, token economics, this is a new thing. Your advice to someone who's 45 who just says "Hey you're too old for our little hot startup." What should they do? >> Well being on the other side of that history I understand it firsthand. I think that you have an incumbent role in your career to constantly re-educate yourself. If you show up, whether you're a 25, 35, 45, 55, or 65, I hope I'm not working when I'm 75, but you never know right? (mumbles) >> You'll never stop working, that's my prediction. >> But you know have you mastered the new skills? Have you reinvented yourself along the way? I feel like I have a responsibility to feed the common household. My favorite part of my LinkedIn profile, it says, "Obedient worker bee at the Cohen household," because when I go home, I'm not in charge. I've always felt that it's up to me to make sure I'm not going to be irrelevant. That to me is, you know, that to me, I don't worry about ageism, I worry about did I-- >> John: Relevance. >> Yeah did I make myself self-obsolescent? I think if you're going to look at your career and you haven't looked at your career in 15 years and you're trying to do something, you may be starting from a deficit. So the question, what can I do? Before I make that jump, can I get involved, can I advise some small companies? Could I work part time and on the weekends and do some things so that when you finally make that transition, you have something to offer and you're relevant in the dialogue. I think that's, you know, nobody trains you, right? We're not good as an industry-- >> Having a good community, self-learning, growth mindset, always be relevant is not a bad strategy. >> Yeah, I mean because I find increasingly, I see people of all ages in companies. There is ageism, there is no doubt. There's financial ageism and then there's kind of psychological bias ageism, but if you keep yourself relevant and you are the up to speed in your thing, people will beat a path to want to work for you because there's still a skill gap in our industry-- >> And that's the key. >> Yeah, make sure that you're on the right side of that skill gap, and you will always have something to offer to people. >> Alan, great to have you come in the studio, great to see you, thanks for the commentary. It's a special CUBEConversation, we're talking about the future of technology impact the society and a range of topics that are emerging, we're on a pioneering, new generational shift and theCUBE is obviously covering the most important stories in Silicon Valley from figuring out what fake news is to impact to the humans around the world and again, we're doing our part to cover it. Alan Cohen, CUBEConversation, I'm John Furrier, thanks for watching. (upbeat music)

>> Voiceover: Live from Las Vegas, it's theCUBE covering VMworld 2017, brought to you by VMware and it's ecosystem partners. (electronic music) >> Hello everyone, welcome back to live coverage. This is theCUBE at VMworld 2017, our eighth year covering VMworld, going back to 2010. I'm John Furrier, co-host of theCUBE, and my co-host this segment, Justin Warren, industry analyst, and our guest, Alan Cohen, Chief Commercial Officer, COO for Illumio. Great to see you, CUBE alumni. Special guest appearance, guest analyst appearance, but also Chief Commercial Officer, Illumio is a security start-up, growing. Thanks for coming on. >> It's not even a startup anymore. >> Justin: It's technically a startup. >> John: After five years, it's not a startup. >> It's not a startup right, you raise $270 million, it's not exactly a startup. >> (laughs) That's true. Well, welcome back. >> Alan: Thank you. >> Welcome back from vacation. Justin and I were talking before you came on, look at, let's go get you on and get some commentary going. >> Alan: Okay. >> You're an industry vet, again, in security, some perspective, but industry perspective, you've seen this VMware cycle many times. What's your analysis right now, obviously stock's 107, they don't to a cloud, no big catback, so it's good. You've made a decision. What's your take on this? >> I've been coming to VMworld for a long time, as you guys have as well, and from my perspective, this was probably the biggest or most significant transition in the history of the company. If you think about the level of dialogue, obviously there's a lot about NSX, which came from the Nicira, I'm always happy about. But, if you hear about, talking about cloud, and kind of talking about a post-infrastructure world, about capabilities, about control, about security, about being able to manage your compute in multiple environments, this is, I think, the beginning of a fundamentally different era. I always think about VMware, this is the company that defined virtualization. No one will argue with that point, so when they come out and they start talking about how are your computes going to operate in multiple environments? And how you're going to put that together, this is not cloud-washing, this is a fairly, all right they have fully acknowledged that the cloud is not a fad, the cloud is not for third tier workloads, this is mainstream computing. I think this is the third wave of computing and VMware is starting to put its markers down for the type of role that it intends to play in this transition. >> Yeah, I agree. >> We have to argue if you don't agree (laughs). >> I'll mostly agree with you, how about that? >> All right that's good. >> At this show, VMware has stopped apologizing for existing. I think, previously, they've been trying to say, "No, no we're a cloud too, "in fact, we're better than cloud "and you shouldn't be using it." It forced customers to choose between two of their children, really, like which one do you love more? And customers don't like that. Whereas at this show, I think it's finally being recognized that customers want to be able to use cloud, as well as use VMware, so that they're taking a more partnership approach to that and it's more about the ecosystem. And, agree, they're not about the infrastructure so much, they're not about the Hypervisor, they're about what you run on top of that. But, I still think there's a lot of infrastructure in that because VMware is fundamentally an infrastructure. >> Alan: Well, you got to get paid, right? >> That's right, (Alan laughs) and there's a lot of stuff out there that's already on VMware. What do you think about the approach? Like with cloud, they have a lot of people doing things in new ways and you mentioned this is the third wave of computing that we're doing it a new way. A lot of VMware stuff is really the whole reason it was popular is that we have people doing things a particular way on physical hardware and then they kept doing more or less the same thing, only on virtual hardware. What do you say about people who are still essentially going to be doing virtual hardware, they're just running it on cloud now? That's not really changing much. >> The way I think about it is: Are you going to be the Chevy Volt or are you going to be a Tesla? What I mean by that, and by the way now GM has the Bolt, which is their move toward Tesla, which is that if you look at the auto industry, they talk about hybrid and you talk about it, and you talk to Elon Musk and he goes, "Hybrids are bullshit." Either you're burning gas, or you're using electricity. To me, this cloud movement is about electricity, which is: I'm going to use cloud-native controls, I'm going to use cloud-native services, I'm going to be using Python and Ruby, and I'm going to have scripting, and I'm going to act like DevOps. And so, cloud is not just a physical place where I rent cycles from Amazon or Azure, it is a way of computing that's got a distributed, dynamic, heterogeneous, and hybrid. When you're in your virtualization on top of cloud, you're still in your Chevy Volt moment, but when you say, "I'm going to actually be native "across all of these environments," then you're really moving into the Tesla movement. >> Hold on. Let me smoke a little bit, I'll pass it over to you because that's complete fantasy. Right now the reality is, is that-- >> It's legal here in LA, in Las Vegas. >> (laughs) I don't think so yet, is it? >> Only outside. >> You can go to Walgreens across the street. >> Whatever you're smoking is good stuff. No, I agree, cloud obviously as a future scenario, there's no debate, but the reality is, like the Volt, Tesla is a one-trick pony. So, greenfield-- >> But, once again, I'm not disagreeing with you, John, but my point is that VMware and most of the IT industry is not there. Most companies don't have DevOps people, you run up and down, you go to all of these shows, ask these guys how many of these guys does Ruby, Python, real scripting, they don't do that. They still have Lu-Wise and management consults and they have the old IT, but this is the beginning movement-- >> They've got legacy bag, I mean we call it legacy baggage in the business, we know what that is. >> Heritage systems. (all laugh) >> Well, Gelsinger was here, I had him in at one o'clock and I kind of, sometimes VMware, they make the technical mistake in PR, they don't really get sometimes where to position things, but the Google announcement was very strategic intent, but they kind of made it a land grab and they tried to overplay their hand, in my opinion, on that one thing, it's strategic intent. This audience, they're not DevOps ready, they're Ops trying to do Dev, so they're not truly ready. So, it's okay to say, "Here's Amazon. "Great, that's today, if you want to do that, "let's get going, checking the boxes, "we're hitting the milestones." And then to dump a headroom deal announcement, that's more headroom, which is cool, but not push it on the Ops guys. >> Here's the opportunity and here's the risk: If Amazon is a $16 billion a year business, it's a rounding error in IT spend. When you take the hype away, nothing against it, and I love that prices are cheaper at Amazon and you can buy a Dot in the fruit aisle, that would totally-- >> John: I think the margins are like 60% (laughs). >> On your cloud. >> My wife took a picture of a rib steak and it said $18, now $13.99, I said, "Fantastic, thank you, Jeff Bezos. "We're eating well, "and we're going to have a little extra money." What I think this transition is not about infrastructure, it's about how IT people do their job. >> John: That's a main point. >> Justin: That's a big, big change. >> Yeah. >> Okay, in this show today doing your job, Justin I want you to comment on this because you were talking with Stu about it. I'm a VMware customer, what do I care about right now in my world? Just today. >> Well, in my world I've got conflicting things, I need to get my job done now. There's nothing different about the IT job, really, which is a shame because some of it needs to change, but there is a gradual realization that it's not about IT, it's not about building infrastructure for the sake of, "Because I like shiny infrastructure." It's, "I'm being paid by my business "to do IT things in service of the business." I have customers who are buying Apples, or using Apple docs, you're laundering. >> In IT you're paid for an outcome. You don't create the outcome. The way IT works is business creates the outcome, IT helps fulfill the outcome, unless you work-- >> John: Is IT a department today? >> Yeah, it's still a department. >> It's still a department? >> Yeah, it is, but it's a department in the same way that, well finance is important, but it's actually the business. Sales is part, they're all integrated. In a really well-run business, they're all integrated. >> How do you know what a real business is? You go to a building, you go to the main offices, you visit the marketing floor, you visit the IT floor. Tell me what the decor is like. They'll tell you what they care about in a business. (John laughs) I've been in a lot of IT shops, not the beautiful shiny glass windows because it's perceived as a back office cost center. >> Digital transformation is always about taking costs, that's table stakes, but now some of the tech vendors need to understand that as you get more business focused, you got to start thinking about driving top line. >> You're also thinking about being in the product. For example, my company, we have three of the four top SAS vendors, as Illumio customers, we do the micro-segmentation for them. We're not their micro-segmentation, we're a component in the software they sell you guys. >> Justin: You're an input. >> Yeah, you are a commodity in the mix of what somebody's building and I think that's going to be one of the changes. The move to cloud, it's not rent or buy, it's not per hour per server, or call Michael Dell and send me a bunch of Q-series, or whatever the heck it's called, it's increasingly saying, "We have these outcomes, we have these dates, "we have these deliverables, "what am I doing to support that and be part of that?" >> Justin: That's it, it's a support function. It's a very important support function, but there's very few businesses, like digital transformation, I don't like that as a term-- >> What the heck does that mean? >> It means something to do with fingers. >> Alan: You use it a lot, what does it really mean, digital transformation? >> To me, first of all, I'm not a big hype person, I like the buzz word in the sense that it does have a relevance now in terms of doing business digitally means you're completely 100% technology-enabled in your business. That means IT is a power function, not a cost center, it's completely native, like electricity in the company-- >> Unless, let's say I have two customers, I have the Yellow Cab company of Las Vegas and I have Uber or Lyft as a customer. My role, as a technologist, or technology provider, is dramatically different in either one of those-- >> Digital transformation to me is a mindset of things like, "I'm going to do a blockchain, "I'm going to start changing the game, "I'm going to use technology "to change the value equation for my customer." It's not IT conversation in the sense of, let's buy more servers to make something happen for the guy who had a request in that saying, "Let's use technology digitally to change the outcomes." >> But, given that, if we assume that that's true, then there's two ways of doing that. Either we have the IT people need to learn more about business, or the business people need to learn more about IT. >> That's right. >> Which one do you think should happen? Traditionally-- >> I think they're on a collision course. >> I don't think you can survive as a senior executive in most businesses anymore by saying, "Oh, I'll get my CIO in here." >> I would like to believe that that's true, but when people say that it should be a strategic resource and so on, and yet we spend decades outsourcing IT to someone else. If it's really truly important to your business, why aren't you doing it yourself? >> Justin, it's a great question and here's my observations, just thinking out loud here. One, just from a Silicon Valley perspective, looking at entrepreneurial as a canary in the coalmine, you've seen over the past 10-15 years, recently past 10, entrepreneurs have become developer entrepreneurs, product entrepreneurs, have become very savvy on the business side. That's the programmer. When we see Travis with Uber, no VC, they got smart because they could educate themselves. AngelList, Venture Hacks, there's a lot of data out there, so I see some signs of developers specifically building apps because user design is really important, they are leading into, what I call, the street MBA. They're not actually getting an MBA, they don't read the Wall Street Journal, but they're learning about some business concepts that they have to understand to program. IT I think is still getting there, but not as much as the developers. >> Here's a great question that I've learned over the years, and look, I'm coming out of the IT side, as we all are. When I visit a customer and I try to sell them my product, my first question is, "If I didn't exist, what would you do? "And if you don't buy my product, what happens in your business?" And if they're saying, "I have this other alternative." Or it's like, "Ah, we'll do it next year." I mean, maybe I can sell them some product, but what they're really telling me is, "I don't matter." >> All right, let's change the conversation a little bit, just move to another direction I want to get your thoughts on. And I should have, on the intro, given you more prompts, Alan. You were also involved in Nicira, the startup that VMware had bought-- >> Alan: Before all this NSX stuff, I was early. >> Hold on, let me finish the intro. We've interviewed Martin Casado. Stu talks to us all the time, I'm sure Chess has been hearing on the other set, "Oh, hey Martin Casado." It was a great interview, of course they're on theCUBE directory. But, you were there when it was just developing and then boom, software-defined networking, it's going to save the world. NSX has become very important to VMware, what's your thoughts on that? What does the alumni from Nicira and that folks that are still here and outside of VMware think about what's it's turned into? Is it relevant? And where is it going? >> Look, I could have not predicted five years ago when Nicira was acquired by VMware, it would be the heart of everything that their CEO and their team is talking about, if you want to know if that's important, go to the directory of sessions and one out of every three are about NSX. But, I think what it really means is there's a recognition that the network component, which is what really NSX represents, is the part that's going to allow them to transcend the traditional software-defined data center. I have two connections, so Steve Herrod is my investor, Steve is the inventor of the software-defined data center. That was the old Kool-Aid, not the new Kool-Aid. We've left the software-defined data center, we've moved into this cloud era and for them NSX is their driving force on being able to extend the VMware control plane into environments they used to never play in before. That's imminently clear. >> John: Justin, what's your take on NSX? >> NSX is the compatibility mechanism for being able do VMware in multiple places, so I think it's very, very important for VMware as a company. I don't think it's the only solution to that particular problem of being able to have networks that move around, it's possible to do it in other ways. For example, cloud-native type things, will do the networking thing in a different way. But, the network hasn't really undergone the same kind of change that happened in server or it did in storage, it's been pretty much the same for a long, long time. >> You've had an industry structurally dominated by one company, things don't change when-- >> Justin: And it still is, yeah. >> John: Security, security, because we've got a little bit of time I want to get to security. You guys are in the security space. >> Thanks for noticing. >> (laughs) I still don't know what you did, I'm only kidding. Steve Harrod is your investor, former CEO of VMware, very relevant for folks watching. Guys, security Pat Gelsinger said years ago it should be a duo, we've got to fix this. Nothing has really happened. What is the state of the union, if you will, of security? Where the frig is it going? What the hell's going on with security? >> There's two issues with that. If we put our industry analyst hat on, security is the largest segment of IT where nobody owns 5% market share, so there's not gorilla force that can drive that. VMware was the gorilla force driving virtualization, Cisco drove networking, EMC, in the early days, drove storage, but when you get to security you have this kind of-- >> John: Diluted. >> It's like the Balkans, it's like feudal states. >> Justin: It's a ghastly nightmare. >> What I think what Pat was talking about, which we also subscribe to, there are some movements in security, which micro-segmentation is one of them, which are kind of reinstalling a form of forensic hygiene into saying, "Your practices, if they occur, "they will reduce the risk profile." But, I think 50% of the security solutions and categories-- >> So, if I've lost my teeth, I don't get cavities. That kind of thing going on. >> If you're a doctor and you're making rounds in the hospital, you wash your hands or you put on gloves. >> And that's where we are. That is the stage we are at with security is we're at the stage where surgeons didn't believe they should wash their hands because they knew better and they'd say, "No, this couldn't possibly be making patients sick." People have finally realized that people get sick and the germ theory is real and we should wash our hands. >> Your network makes you sick. Your network is the carrier. Everything that's happening in network is effectively the Typhoid Mary of security. (John laughs) We're building flat, fast, unsegmented Layer 3 networks, which allow viruses to move at the speed of light across your environment. So, movements like, what's that called App Defense? >> Justin: App Defense, yep. >> App Defense or micro-segmentation from Illumio and Vmware, are the kind of new hygiene and new practices that are going to reduce the wide-spread disease growing. >> From an evolution theory, then the genetics of networks are effed up. This is what you're saying, we need to fix-- >> No, the networks are getting back to what they were supposed to do. Networks move packets from point A to point D. >> The dumb network? >> Alan: Yes, the dumber the better. >> Okay. You agree? >> Alan: Dumb them down. >> Dumb networks, smart end points. Smart networks doesn't scale as well as smart end points, and we're seeing that with edge computing, for example. Distributed networking is a hard problem and there is so much compute going out there, everything has a computer in it, they're just getting tinier and tinier. If we rely on the network to secure all of that, we're doomed. >> Better off at the end point. And this fuels the whole IoT edge thing, straight up one of the key wave slides out there. >> What you're going to have is a lot of telemetry points and you're going to have a lot of enforcement points. Our architecture is compatible with this, VMware is moving in this direction, other people are, but the people that are clinging to the gum up my network with all kinds of crap, because actually people want it to go the other way. If you think about it, the Internet was built to move packets from point A to point B in case of a nuclear war and, other than routing, there wasn't a whole lot-- >> We still might have that problem (laughs) >> Yeah, well there's always that (laughs). >> Fingers crossed. >> Guys, we got to break, next segment. Al, I'll give you the last word, just give a quick plug for Illumio. Thanks for coming on and being a special guest analyst, as usual, great stuff. Little slow from vacation, you're usually a little snappier. >> Alan: Little slow off the vacation mark. >> Yeah, come on. Back in Italy-- >> Too much Brunello di Motalcino, yeah. >> John: (laughs) Quick plug for Illumio, do a quick plug. >> We're really great to be here. John, you and I talked recently, Illumio is growing very rapidly, clearly we are probably emerging as one of the leaders in this micro-segmentation movement. >> John: A wannabe gorilla. >> What's that? >> You're a wannabe gorilla, go big or go home. >> We are, well, gorillas have to start as little gorillas first, we're not a wannabe gorilla, we're just gorillas growing really rapidly. It takes a lot more food at the zoo to keep us going. About 200 people growing rapidly, just moved into Asia, Pat, we got a guy in your part of the world we work with. >> First of all, it's not a zoo, it's still a jungle. The zoo is not yet established. >> That's true. We're going to establish the zoo. Things are great at Illumio. We have amazing things on the floor here today of, basically the system will actually write its own security policy for you. It's a lot of movement into machine learning, a lot of good stuff. >> All right. Guys, thanks so much. Alan Cohen with Illumio, >> Alan: Thank you. >> Chief Commercial Officer. And Justin Warren, analyst, I'm John Furrier. More live coverage from VMworld after this short break. (electronic music)

>> Live from Washington D.C., it's the CUBE covering dot next conference. Brought to you by Nutanix. >> Welcome back to Nutanix.next everybody. This is Dave Villante with Stu and this is the CUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise. Alan Cohen is here, he's the chief commercial officer of hot startup Illumio. Alan, friend of the CUBE, great to see you again. Always happy to be here. Wherever you guys are, I'm going to show up. >> It's nice not to be in Silicon Valley for a change, hanging out with the CUBE. >> Right, the real world, you'll have to talk to John Courier that things happen outside of Palo Alto. >> So the timing of this interview is perfect because we just had Stephen Hadley on, who's sort of a public policy expert. We were talking about basically how industry should really lead with this whole new era of cyber and he was talking about if we let government do it, they're probably going to mess it up. >> Right. >> So it's guys like yourselves and others in our industry that really have to lead, so, but before we do that, give us the update on Illumio. You guys did another big raise, you guys are smokin' hot, growing like crazy, what's the update? >> So I mean so since we spoke to you guys last we did have a little funding round. It was led by J.P. Morgan Chase. You might have heard of them, they have credit cards and branches and things like that. Actually, they're also a customer of Illumio's. Which is a really big deal. They are advanced, so we're growing very rapidly, lot of geographic expansion, lot of technology expansion and I think actually today and this morning Sineal and the technology roadmap talked about micro segmentation, the ability to create really smaller and smarter water tight compartments around your data, down even to the workload or the process level is just going to be a way that people are going to have to do their computing. And so as you look at the journey now from data center or enterprise cloud into public cloud, this approach to security that we're building is a key component allowing people to take advantage of cloud architectures. So that's also really led to our growth. >> So I think it's fair to say you guys are really the pioneer of this concept of micro segmentation. Others have sort of hopped on board. >> Well I got to give Vmware credit, they actually did break- >> They were first. >> Yeah, but they- >> To commercialize it. >> Yeah, they commercialized it in their environment, I would say Illumio is the first company through software to commercialize it in all environments. In a cloud, in a box, with a fox, in a house, with a mouse, bare metal virtual machines, containers, Amazon, Azure, Oracle, across all of those environments simultaneously. And I think we were talking earlier this morning about the idea of multi-cloud, right? So you're going to pick your cloud based on where the workload and the applications should live. So your security has to move with that. And that's really what we've focused on. >> Right, okay, so VMware's there, you know Cisco's in there as well, so- >> Yeah, I've heard of those guys. >> Duking it out, so how do you feel about our competitive position, talk about about that a little bit. >> Well, we feel good that our competitors have finally kind of woken up and started to amplify our message. About this, you know, at the end of the day, you have to make a decision whether your goal in building security is to drive the sale of your infrastructure, or is to make your customer's environment more secure wherever they run. So in their own environments they're clearly adding value. But at the end of the day they're dependent on maintaining server licenses or upgrading your switches. That's not a really good motivation for how to make your security decision. You should make your security decision based on what you're trying to do, not what infrastructure you're in. >> Okay, so, now what about the traditional security guys? Are they catching up, are they hopping on board, do they just think this is an itch that's not worth it, or they just missed the boat? >> Well, you know, with the I'm being respectful and aggressive at the same time, I think most of the firewall vendors have been primarily focused on the perimeter, and then they've looked at APT technologies, things like fire I have done and they've made a lot of their investments there, so they have not been as focused. Now, to also be fair, in the heart of the data center in the public cloud, you don't see firewall technology. Right? So people said I have this hard crunchy exterior, I protect the perimeter of my environment, and I assume once I protect the perimeter the inside is safe. So their traditional model didn't lend itself to that kind of introspection and focus on the interior. What's happened in the last couple of years, though, and you had Hadley on, is that the focus of cyber has shifted to the interior, right? So, Target, Sony, OPM, all the big breaches started with basically vulnerabilities on the inside that have then kind of spread and then ex-filtrated outside of the organization. So we started focusing on the inside out, not the outside in, I mean to say I think ultimately the large security venues and perimeters, they're partners of ours, because they're going to wind up working both sides of the equation. >> Yeah, because even an air gap doesn't protect you. >> You don't want an air gap, actually, you know, we have a partnership with F-five, we actually talked about it with the CUBE couple years ago, because you think about the consequence of something like a load balancer, it sits between tiers of applications, you don't want that to be a black box. So the basically the world is moving into the zero trust model, so trust nothing. And you know it's kind of like running it you know like in a mob, it's like the Sopranos, you've got to make sure everybody does the collections and everybody's got to check in everyday, everything's got to be part of the security fabric. >> Alan, so, bringing it back to the Nutanix discussion. We had Sue Neil on earlier in the keynote this morning I saw broad ecosystem, love our partners, saw Illumio, >> Huge logo, wasn't that great? They got me. >> Great glow man, they finally figured it out. >> Release the Krakken, yeah, you know what, up there. And I asked Neil, how do you balance the we're going to have broad ecosystem but seems a lot of that energy is being put into AHV. And one of the examples he brought up was like oh, if you buy, if you use AHV, you get micro segmentation for free included in there. What are you seeing, how does Nutanix fit into micro segmentation environment? >> Yeah, I mean I showed her the slides too, right, so? If you remember how he defined it, if I have ten workloads, and I want to segment them off, I will put it in what I call micro segmentation. And that to me is like a virtual network segment, but he said you don't have to use an FCN overlay, and that is not any different than what a security group does in Amazon or Azure and I assume Google has its own version of that. When you go into that couple of levels deeper, that's where Illumio lives. So we live inside public cloud security groups today and across them and to non-environment. So you got to remember a lot of people are going to have Nutanix workloads, but then they're going to have workloads sitting in Azure and they're not going to have anything to do with each other for awhile from a software point of view. So illumio is really that bridge. So I mean I think it's actually a fairly synergystic kind of relationship to do that. Actually for me, that recognition, and that communication and micro segmentation into their base, is really good. So, you're always going to have a little bit of overlap. I mean they're smart and they really build great software. >> So it sounds like you're saying the definitions of micro segmentation are a little bit complementary and you're also going to help with that heterogeneous mess that everybody has and gives them consistent security across those environments. >> Right, we don't define micro segmentation that way. I might want to say I want to micro segment off one workload or I want to segment processes or I'm going to have a Kubernetes application running someplace and then I'm going to have the core database someplace else. How do I move across that? >> So it's granularity and flexibility of the use case that you provide. >> Yeah, we have this thing we call the wheel of cheese, from the segmentation. So there's like rough front use segmentation, and then there's micro and then there's nano, so over time, people are going to basically close the gates tighter and tighter. Because the challenge in cyber is lateral spread. Like you guys you have these fast high speed networks. So if I compromise one server, one workload, today it flies through the environment, so you actually have to keep closing those doors from a security point of view. So, I mean I think it was a great first move for them. And I mean, we like it, it works really well. We work with other vendors, cloud vendors, today that do some form of segmentation. >> So I know we're super tight on time, everybody wants to talk security, and your schedule's packed John Furry is watching, no surprise. >> Oh, hey John. >> So when he has to give up the mic there's always crowd chat, so he's got a question on crowd share for you. Ask Alan about the economics of the cyber security business models with all this stuff going on with cyber war and ransom ware and- >> Yes, so here are some stats. You guys are great analysts you focus on this. So cyber security is about a hundred billion dollar business somewhere between 80 and 100, depending on who's counting on that. But think about the scheme of overall IT. How much is IT? Three trillion dollars? >> Trillions, yeah. >> Right, so a hundred billion dollars is a fairly small segment. Now, I would be disingenuous as a vendor, but I'll go for it, I would say people are highly underinvested in security relative ... Stu's laughing his head off, right? >> Well, is that not a big enough pie for you, come on. >> No, it's not, I think the pie should be like five times bigger, I mean. >> You don't want to make that comparison with health insurance, do you? >> You have health insurance, you have life insurance, you insurance on your car, you have insurance on your home. You guys are high net worth individuals, you probably have policies so you don't get sued. You probably spend ten percent of your total income on forms of insurance, things that protect you and your family. >> So you're saying it should be triple the spend. >> Why are you only spending two or three percent of your IT given the criticality of the data that's sitting in those environments? >> Okay, so we know we only pay for insurance when we need it, in marketing the joke's always I waste half of money, I just don't know which half. You know, how much are we wasting in security vs. >> Well, I mean I think if you're buying infrastructure based models you're spending, you're building, you're wasting a lot. Illumio is a consumption-based model based on how much you use. So I mean we look more like you know, it's a per operating system instance that you pay a yearly license for. So I think we're closer to the Amazon consumption model for security, and we've led with that four years ago, when we started the company. So I think if security became more like you pay as you go, and less pay for just having it, just as we talk about the different models for infrastructure, where I own it, where I rent it, where I pay as I go, I think you will get better spends. I mean, we effectively sell security the way Uber sells or Lyft sells car, when you need to pay for it, use it, you pay for it. There's probably a whole lot of efficiency that could be there, but I'd argue it's under invested. >> Well, the other dimension that is inside out vs. outside in, I mean, you're building more moats. We know still more money is spent over here. >> Well here's a stat. So the vast bulk of data center security, so the perimeter firewall market's about a ten billion dollar market. Only about Cisco just sent out their announcement this week about their cloud index. 17 percent of the traffic, net traffic that goes in and out of the data center and about 80 percent of it's inside, and a little bit of it goes to the co-load, right? So you are putting all your investment on 17 percent of your traffic. So that's like buying all the cable channels. You watch the cooking channel? You're paying for it. You're watching rugged outdoor fishermen channel? You're paying for it. So I think you're going to have to, just like you're making infrastructure investments are moving to paying for what you use, your security investments have to go the same way. So why would you put all your money only guarding 17% of your network traffic? >> Okay, we're out of time, but so, last question, what are you guys going to do, what are you doing with this big bag of money that you just got? Where are you directing it? What's your strategy? >> Well, I mean we're probably going to have to hire the CUBE to come to like Illumio. >> Fantastic, let's do that. >> Yeah, we're totally going to do that but ... >> Oh really, well, what's the show, Illumio World? >> Well there's going to be an Illumio World when we launch it you guys are going to be there. >> Fantastic, I'd love to be there. >> So, there's no doubt. You have that in writing, you have that on video, like testimony. >> Yeah, even better. >> Yeah, like I can't even say I didn't tweet it, like you'll have a record of it. >> We can shame you into it. >> You can totally shame me into it. I think you're going to see a lot of geographic expansion of the company. We're about to expand down under and other places we've been mostly in North America and parts of Europe. And a lot of investments going into the channels, strategic partnerships and I mean a lot like Nutanix, I mean our company's half R&D, we're going to just as heavily a year from now we'll still be half R&D. Even with growth, because we've got a lot of platform build, and we're building a platform that's going to be around for decades. So there's still a lot of engineering to do too. >> Al, we love having you on, you're plugged in, great Silicon Valley friend, really appreciate you coming back. >> Appreciate you having me today. >> You're welcome. Okay, keep it right there everybody, we're back with our next guest after this short break. This is the CUBE here live from next.conf. We'll be right back.

>> Announcer: Live from Silicon Valley, it's theCube, covering Mobile World Congress 2017, brought to you by Intel. >> Okay, welcome back, everyone. Here, live, in Palo Alto, California, the Silicon Angle Studio for the Silicon Valley coverage of Mobile World Congress 2017. I'm John Furrier. We're in theCube. We're here with Cube alumni and one of our favorite guests, Alan Cohen, the Chief Commercial Officer of Illumio, hot security startup, coming in to share his commentary on Mobile World Congress. Alan's a veteran in the industry. Great to have you. Been in the Silicon Valley Friday Show a few weeks ago. Great to see you. >> Thrilled to be back. Beautiful environment. You know, party. >> It was great to see you on the Silicon Valley Friday Show because after our segment the New York Times ran that story Friedman had that the cross where they took our content. >> We're going to Freeport next. >> Exactly. (laughing) And great content, we're serving it up. So I want to say thank you, it was great coverage. Thanks to the New York Times for picking up our content, taking it to the next level. Always great to have a conversation. You've got a good way to put the finger on the pulse. Mobile World Congress, two days of coverage for us. I'll just give you a quick Reader's Digest summary of what we're seeing. It's a bipolar show. It's a device show and a telco trying-to-figure-things-out show. Then in the middle is a lot of money to be had by whoever can help sort out the counseling of the telco business. Intel certainly is a big player in that with 5G. And there's a lot of under the covers stuff. SDN, NFV, new networks and new paradigms of how to configure these architectures. Not much mention of security, but that's essentially what's going on. You've got everyone's working out the devices, the new LG, the Yahweh, all this stuff's going on. Then you get the telcos well speeds and feeds and build out and business models. So what's your assessment? >> I've been to the Mobile World Congress 10 times. We never talked about this, but I actually worked the cellular carrier in the 90s. To me the show is the same every year. It's drones, clones, and phones. That's what people really focus on, right? So the 11,000 versions of the Android phone, even though Apple's still taking 89% of the profit at the industry so it actually only one phone you have to pay attention to on one side. Then more bits, less money side of being on the carrier, because what is being an ISP, wireless ISP or a wired ISP. Every year I give you more bits and I make less money. I'm going to make it up in volume. And I keep pouring all this capital into this. So to me, they haven't really yet completely broken out of that paradigm. The key thing is that the mobile network is the primary network. So all the profitability in telco is in the mobile network. Nobody says hey, I'm going to get up and build a wired network and pull some more copper to your house, right? So that is the principle way that people are using it and we have now an entire generation that don't know you can actually plug a phone into a wall or an ethernet connection. I think that's the kind of competitive dynamics that people go with. >> And that's under pressure though, because now the carrier's always in the operating, always controlled the relationship to the user via the contract. Did you buy an iPhone lately? There's no more relationship. You just buy whatever device you want. The subsidy ended ... I'm not talking about subsidy. I'm talking about like I have a contract with AT and T, I can certainly change it to Verizon, so I can certainly swap. But for the most part the carrier views me as a subscriber. Pretty much that's it. They bill me, I'm not really getting anything extra from AT and T. Maybe I'll get some hotspots. But I mean come on, what value? >> You are just our poo. >> Where does it go from here? We had the guys from Datatron on who had an interesting proposition. They had a ton of data. So there really has been this struggle institutionally, as you know, I mean core competency has been provisioning, truck roll, and billing. So what else can they do? What's your thoughts, okay let's change the mental, here's the exercise. We get elected to be the CEO of the biggest telco. >> You're Verizon, I'm A T and T. >> We own the telcos, and what do we do? Do we fire everybody? Do we do what Donald Trump does and just fire everyone and run it the way we want to run it? Or do we build it? What would we do seriously, what would we do if we were telcos and we want to put our business hat on? >> I think you have to kind of deconstruct the value chain of that. So what telcos do is they offer up content, for the most part. These devices, I've had to teach my kids that you can make a call with it. But aside from a call mostly what people do is use some form of internet application. They don't get any other money for the internet application. They don't get any money for hosting it, they don't get any money for managing it. They don't get very much money for making it perform. So to me, the biggest challenge of the telcos is actually Amazon because if you think about it, Amazon is now becoming the supply chain for so much internet delivery content. If the telco wants to be something other than the last mile and the wires connecting that last mile, it takes a lot of wires to build a wireless network, people forget that. They're going to have to start to figure out can I, whether it's cash and data center, can I turn profitable services to the people who are all competing at the edge of that universe and applications. I don't think they really have done that. I mean they are some of the largest data center operators in the world, but they haven't really thought it through. I was in a studio in L.A. a couple weeks ago and it's one of the large national studios. It's an Illumio customer and they've now moved all their content distribution into Amazon. So they don't send the content from their network to the affiliates. They put it in Amazon, and Amazon delivers it. How much longer is it going to before there's actually studio that works out of Amazon? >> Yeah, I mean the head end's dead. This cable is kind of changing. That's the media piece, but also you have all these new use cases, the fantasy autonomous driving cars which you can say it's a data center on wheels, yes I could buy that. Is it going to be uploading data every half mile? Where's the wire? So you have this new construction. Smart cities is another one, smart homes is an echo in there. >> I made my living out of making data centers more secure. But the data center is going to completely evolve. The share perfusion of data that's going to come out of these devices, and a lot of people have talked about the edge architecture, is going to blow up the idea of back hauling it to a centralized server. Process it in a bunch of ways and spit it back out. For me, if I wanted to write a smart or autonomous car management system, let's say I was the city of Palo Alto and I'm responsible for now instead of just the traffic lights, I'm also responsible for how autonomous cars go through Palo Alto, I'm not sending something back to some data center in Virginia for Amazon. I'm going to have to figure out how to process all that data closest to where those cars are. Make intelligent decisions about them while at local, and then send back out instructions. What I think you're going to do is you're going to see a shift from this central model to a much more distributed model and I'm going to have to have mini data centers. So instead of having 10 mega data centers I might have 1,000 mini mega data centers that's going to make all of these things happen. I don't think a lot of people have paid attention to that architectural shift. If you're in the process of, business of selling server networks you're still thinking client-server back haul it into the giant data center next to the nuclear power plant. But it's all going to have to move a lot closer to where something, because I only care about that decision right now with the 50 cars coming down middle field and the streets that feed into it. >> But there's a bigger architecture thing that the Mobile World Congress is trying to point at, which is an ecosystem. Let me take a step back. Is Mobile Congress a relevant show, or is it becoming a CES sideshow, Biz Dev show? I mean Cy Gerli was on yesterday saying look, it's where everyone goes, who's who goes there. It's essentially a Biz Dev show that happens to have a trade show running with it. >> It's the agora, right? The Greek term for marketplace. You go there to do business with people. It's like RSA two weeks ago, right? You guys were up at RSA. It's like is it really fun to walk through 14,000 vendor booths, or is it like everybody who make decisions on buying and selling security stuff happened to be in the same two-square miles of San Francisco. I don't think that part goes away, but I do think ... >> It's a super important part. >> Yeah, but I think the architecture of who plays is going to change. The the question you've got to ask is who's going to be the Amazon of the mobile world and disrupt the network model? The network is now just something glued together with software. I mean years ago they had the same thing, it didn't really work out, that they called the cloud where I would rent my access point in London to people and I'd use their wifi. The stuff that glues it together is always much more important than the infrastructure itself. So if Mobile World Congress can be important there's going to be a track on the people actually glue all of that stuff all together. >> All right, so I've got to get your take on the business conversation, the marketplace that runs there. What are some of the conversations that you could imagine that was happening at Mobile World Congress? I know we're not there, I mean we've been seeing and hearing some of the hallway conversations. Obviously 5G's the big story. What are some of the marketplace hallway conversations or business meetings that are going on in your mind's eye if you had to make a guess on what's happening? >> What are the most important content that people like to use today? Pop quiz, do you know this? >> Yeah, video. >> Video, right? So to me, one of the conversation Netflix was having and Amazon Prime was having because they're not just waiting for you to be in your TV, to consume, right? People are consuming increasing amounts of video content on mobile devices. So I think there's the Hollywood influence or the studio or what is it? The National Association of Programming Executives, NAPE right? What you're doing, if you're a content producer you're looking for eyeballs and people to pay for it. There's nothing more ubiquitous than that piece of glass we're all carrying in front of our nose 17 hours a day. I think that's a big set of business discussions. Your partner was talking about this, is okay, is there just a dramatically different way to build this network? 5G is going to give you the promise, more is a lot of work. The physics are I'm getting a lot more bandwidth. What am I going to do with it? Well people are going to fill it up. >> There's different use cases. There's the mobility and then with dense areas. Then things that are moving at a hundred miles an hour, 50 miles and hour, planes, trains. >> I think there's an element of that. I think there's the internet of things discussion. I still think five years will take the internet whatever things, right? I call the IOWT, right, because it's like nobody's, it's not really about connecting your lightbulb to the network, but there are a lot of things in motion that people want to better manage. >> We just introduced a research agenda this morning with Peter Burroughs, IOT, IOT people. Things and people. >> Have you gone back to the Furrier family and counted up how many IP addresses you have as a family? The Cohen family has 111 IP addresses. >> John: IPV6 for you. (laughing) >> Yeah, we need a gateway man for the network router that comes into the house. But that is actually ... >> We just bought the new Google access points, the ones that have that little mesh instrument. >> But yes, I'm just kidding you. So there are a lot of things. The other thing is that there is the interaction of the mobile, actually I think Google is a great example. If you think about Google produces the wifi at Starbucks and a lot of retail. They're interested in what's going on. Today we think about the mobile network as a mobile network and we think about the broadband fixed network as a different network. And like the interplay between those two, it's like there's a lot more than Foursquare and Facebook. >> Sure fibers of the home is very capital intensive. We knew it would cost us to do a truck roll, the trench, and connect to the home which we did. Overlay wireless, fixed wireless would be fantastic there. >> So you have the overlay and then when I know that you're coming by, right, because the fixed network is now actually a wifi network, I mean it has wires. So you have the mobile network, you have the wifi network, and you have people moving in and out of those environments. I think I'm seeing a lot of companies getting funded. People actually trying to say how do we monetize that experience? This is obviously was Foursquare and those other location guys started years ago. I mean, look at something like Wayce. Wayce went from a GPS app with social interaction to a car sharing, ride sharing going after Uber, this Google company. >> Well we had an NTD Delcomo VC, Chris McCoo, talk about mapping as a huge app for these telcos. >> Mapping is the killer app. Almost everything on your phone local works off a map which, by the way, is paid for by us as taxpayers. The GPS comes from the United States government. It's free. The most powerful utility in mobility is location, and GPS is free. >> All right, final question. Bumper sticker from Mobile World Congress from your perspective this year. Yawner, golf clap, or standing ovation? >> I say golf clap because more bandwidth is good and I think there's an insatiable demand. We're a long way from ending the bandwidth drought, and there is a bandwidth drought. I think the other thing is there aren't camps anymore. I think people will coalesce very quickly on 5G. So good time to be in that business. One hand clap maybe. >> Yeah, not a hole in one. Certainly more golf analogies coming on theCube. Alan Cohen here, Chief Commercial Officer, Illumio. We didn't get to security, but we'll do that next time. I'm John Furrier, I'll be right back with more Mobile World Congress coverage after this short break. (upbeat instrumental music)

>> From around the globe it's theCUBE with coverage of the GLOBAL.NEXT DIGITAL EXPERIENCE brought to you by Nutanix. >> Hi and welcome back, we're wrapping up our coverage of the Nutanix .Next Global Digital Experience, I'm Stu Miniman and I'm happy to welcome to the program, help us as I said wrap things up. We're going to be talking about running better, running faster and running anywhere. A theme that we've heard in the keynotes and throughout the two day event of the show. We have three VPs to help go through all the pieces coming up on the screen with first of all we have Greg Smith who's the vice president of product technical marketing right next to him is Madhukar Kumar, who is the vice president of product and solutions marketing and on the far end, the senior vice president Thomas Cornely, he is the senior vice president, as I said for product portfolio management. Gentlemen, thank you so much for joining us. >> Good to be here Stu. >> Alright, so done next to show we really enjoy, of course this the global event so not just the US and the European and Asia but what really gets to see across the globe and a lot going on. I've had the pleasure of watching Nutanix since the early days, been to most of the events and the portfolio is quite a bit bigger than just the original HCI solution. Thomas since you've got to portfolio management is under your purview, before we get into summarizing all of the new pieces and the expansion of the cloud and software and everything just give us if you could that overview of the portfolio as it's coming into the show. >> Yeah absolutely Stu. I mean as you said we've been doing this now for 10 plus years and we've grown the portfolio we developed products over the years and so what we rolled out at this conference is a new way and to talk about what we do at Nutanix and what we deliver in terms of set of offerings and we talk about the 4 D's. We start with our digital hyper converged infrastructure cartridges, dual core HCI stack that you can run on any server and that stack these two boards are data center services which combines our storage solutions, our business computing and data recovery solution and security solutions on DevOps services, which is our database automation services, our application delivery automation services and now our new common and that's one of the service offerings and then our desktop services catridges which is our core VDI offering and offering our discipline and service offerings. So put all these together this is what we talk about in the 4 D's, which is on Nutanix cloud platform that you can run on premises and now on any job. >> Well thank you Thomas for laying the ground work for us, Greg we're going to come to you first that run better theme as Thomas said and as we know HCI is at the core a lot of discussions this year of course, the ripple effect of the global pandemic has more people working remotely that's been a tailwind for many of the core offerings, but help us understand, how's that building out some of the new things that we should look at in the HCI. >> Yeah ,thanks too for Nutanix and our customers a lot of it begins with HCI, right. And what we've seen in the past year is really aggressive adoption for HCI, particularly in core data center and private cloud operations and customers are moving to HCI in our not only for greater simplicity, but to get faster provisioning and scaling. And I think from a workload perspective, we see two things, that ACI is being called upon to deliver even more demanding apps those with a really very low latency such as large scale database deployments. And we also see that HCI is expected to improve the economics of IT and the data center and specifically by increasing workload density. So we have a long history, a storied history of continually improving HCI performance. In fact every significant software release we've optimized the core data path and we've done it again. We've done it again with our latest HCI software release that we announced just this week as our next. The first enhancement we made was in 518, was to reduce the CPU overhead and latency for accessing storage devices such as SSD and NBME and we've done this by managing storage space on physical devices in the HCI software. So rather than rely on slower internal file systems and this new technology is called block store and our customers can take advantage of block store simply by upgrading to the new software released and we're seeing immediate performance gains of 20 to 25% for IOPS and latency. And then we built on top of that, we've added software support for Intel Optane by leveraging user space library, specifically SPDK or storage performance development kit. And SPDK allows Nutanix to access devices from user space and avoid expensive interrupts and systems calls. So with this support along with block store we're seeing application performance gains about this 56% or more. So we're just building our own a legacy of pushing performance and software and that's the real benefit of moving to HCI. >> And just to add to that too when it comes to run better I think one of the things that we think of running better is automation and operation then when it comes to automation and operation there are a couple of ways I would say significant announcements that we also did to. One is around Comm as a service. Comm is one of those products that our customers absolutely love and now with Comm as a service you have a SaaS plane, so you can just without installing anything or configuring anything you could just take advantage of that. And the other thing we also announced is something called Nutanix central and Nutanix central gives you the way to manage all your applications on Nutanix across all of your different clusters and infrastructure from a single place as well. So two big parts of a run better as well. >> Well, that's great and I've really, is that foundational layer, Madhukar if we talk about expanding out, running faster the other piece we've talked about for a few years is step one is you modernize the platform and then step two is really you have to modernize your application. So maybe help us understand that changing workload cloud native is that discussion that we've been having a few years now, what are you hearing from your customers and what new pieces do you have to expand and enable that piece of the overall stack? >> Yeah, so I think what you mentioned which is around cloud data the big piece over there is around Cybernetics's and they already had a carbon, so with carbon a lot of the things of complexities around managing cybernetics is all taken care of, but there are higher level aspects on it like you have to have observability, you have to have log, you have to have managed the ingress ,outgress which has a lot of complexity involved with, so if you're really just looking for building of applications what we found is that a lot of our customers are looking for a way to be able to manage that on their own. So what we announced which is carbon platform service enables you to do exactly that. So if you're really concerned about creating cloud native applications without really worrying too much about how do I configure the cybernetics clusters? How do I manage Histio? How do I manage all of that carbon platform service that actually encapsulates all of that to a sass plate So you can go in and create your cloud native application as quickly and as fast as possible, but just in a typical Nutanix style we wanted to give that freedom of choice to our customers as well. So if you do end up utilizing this what you can also choose is the end point where you want these application to run and you could choose any of the public clouds or the hyper scaler or you could use a Nutanix or an IOT as an endpoint as well. So that was one of the big announcements we've made. >> Great, Greg and Madhukar before we go on, it's one of the things that I think is a thread throughout but maybe doesn't get highlighted as much but security of course is been front and center for a while, but here in 2020 is even more emphasized things like ransomware, of course even more so today than it has been for a couple of years. So maybe could it just address where we are with security and any new pieces along there that we should understand? >> Yeah, I can start with that if I could. So we've long had security in our platform specifically micro-segmentation, fire walling individual workloads to provide least privilege access and what we've announced this week at .Next is we've extended that capability, specifically we've leveraged some of the capabilities in Xi beam and this is our SAS based service to really build a single dashboard for security operators. So with security central, again a cloud based SAS app, Nutanix customers can get a single pane from which they can monitor the entire security posture of their infrastructure and applications, it gives you asset reporting, asset inventory reporting, you can get automated compliance checks or HIPAA or PCI and others. So we've made security really easy in keeping with the Nutanix theme and it's a security central is a great tool for that security operations team so it's a big step for Nutanix and security. >> Yeah. >> To actually add on this one, one bit piece of security central is to make it easier, right. To see your various network bills and leverage the flow micro segmentation services and configure them on your different virtual machines, right? So it's really a key enabler here to kind of get a sense of what's going on in your environment and best configure and best protect and secure infrastructure. >> Thomas is exactly right. In fact, one of the things I wanted to chime into and maybe Greg you could speak a little bit more about it. One of my favorite announcements that we heard or at least I heard was the virtualized networking and coming from a cloud native world, I think that's a big deal. The ability to go create your virtual private cloud or VPCs and subnets and then be able to do it across multiple clouds. That's, something I think has been long time coming, so I was personally very, very pleased to hear that as well. Greg, do you want to add a little bit more? >> Yeah, that's a good point I'm glad you brought that up, when we talk about micro-segmentation that's one form of isolation, but what we've announced is virtual networking. So we really adopted some cloud principles, specifically virtual private clouds constructs that we can now bring into private cloud data centers. So this gives our customers the ability to define and deploy virtual networks or overlays this sort of sit on top of broadcast domains and VLANs and it provides isolation for different environments. So a number of great use cases, we see HCI specifically being relied upon for fast provisioning in a new environment. But today the network has always been sort of an impediment to that we're sort of stuck with physical network plants, switches and routers. So what virtual networking allows us to do is through APIs, is to create an isolated network a virtual private cloud on a self service basis. This is great for organizations that increasing operating as service providers and they need that tenant level segmentation. It's also good for developers who need isolated workspace and they want to spin it up quickly. So we see a lot of great use cases for virtual networks and it just sort of adds to our full stack so we've software defined compute, we've software defined storage, now we're completing that with software defining networking. >> And if I have it right in my notes the virtual networking that's in preview today correct? >> Yes, we announce it this week and we are announcing upcoming availability, so we have number of customers who are already working with us to help define it and ready to put it into their environments. The virtual private network is upcoming from Nutanix. >> Yeah, so I absolutely I've got, Mudhakar, I've got a special place in my heart for the networking piece that's where a lot of my background is, but there was a different announcement that got a little bit more of my attention and Thomas we're going to turn to you to talk a little bit more about clusters. I got to speak with Monica and Tarkin, ahead of the conference when you had the announcement with AWS, for releasing Nutanix clusters and this is something we've been watching for a bit, when you talk about the multicloud messaging and how you're taking the Nutanix software and extending it even further that run anywhere that you have talk about in the conference. So Thomas if you could just walk us through the announcements as I said something we've been excited, I've been watching this closely for the last couple of years with Nutanix and great to see some of the pieces really starting to accelerate. >> Well absolutely and as you said this is something that's been core to the strategy in terms of getting and enabling customers to go and do more with hybrid cloud and public cloud and if you go back a few weeks when we announced clusters on AWS this was a few weeks back now, we talked of HCI is a prerequisite to getting the most of your hybrid cloud infrastructure, which is the new HCI in our mind and what we covered at .Next was this great announcement with Microsoft Azure, right, and just leveraging their technologies bringing some of their control plan onto our cloud platform but also now adding clusters on Azure and announcing that we'll be doing this in a few months. Enabling the customers to go and take the same internet cloud platform the same consistent set of operations and technology services from data center services, DevOps services and desktop services and deploying those anywhere on premises, on AWS or on Microsoft Azure and again for us cloud is not a destination. This is not a now we just accomplished something. This is a new way of operating, right? And so it's touching, giving customers options in terms of where they want to go to count so we keep on adding new counts as we go but also it's a new form of consuming infrastructure, right? From an economist perspective you probably know, you don't extend it you're pressing into the moving to is fiction based offering on all of our solutions and our entire portfolio and as we go and enable these clusters offering, we're not making consumptions more granular to non customers do not consume our software on an hourly basis or a monthly basis. So again this is kind of that next step of cloud is not just technology, it's not a destination it's a new way of operating and consuming technology. >> Why think about the flexibility that this brings to existing new techs customers it gives them enormous choices in terms of new infrastructure and whether they set up new clusters. So think about in text a customer today. They may have data centers throughout the US or in Europe and in Asia Pacific, but now they have a choice rather than employ their Nutanix environment, in an existing data center or Colo, they can put it into AWS and they can manage it exactly the same. So it just provides near infinite choice for our customers of how they deploy HCI and our full software stack. In addition to the consumption that Thomas talked about, consumption choices. >> Yeah, just to add to that again I should have said this is also one of my favorite announcements as well, yesterday. We Greg, myself, Thomas, we were talking to some industry analysts and they were talking about, Hey, you know how there is a need for pods where you have compute, you have network and you have storage altogether, and now people want to run it across multiple different destination but they have to have the freedom of choice. Today using one different kind of hardware tomorrow you want to use something else. They should be portability for that, so with clusters, I think what we have been able to do is to take that concept and apply it across public cloud. So the same whether you want to call it a pod or whatever but compute, storage, networking. Now you have the freedom of choice of choosing a public cloud as an end point where you want to run it. So absolutely one of those I would say game-changing announcements that we have made more recently. >> Yeah-- >> To close that loop actually and talk about portability as enabling quality of occupations. But also one thing that's really unique in terms of how we're delivering this to customers is probability of licenses. The fact that you have a subscription term license for on premises you can very easily now repay the license if you decide to move a workload and move a cluster from one premises to your count of choice, that distance is also affordable. But so again, full flexibility for these customers, freedom of choice from a technology perspective but also a business perspective. >> Well, one of the things I think that really brings home how real this solution is, it's not just about location, Thomas as you said, it's not about a destination, but it's about what you can do with those workloads. So one of the use cases I saw during the conference was talking about a very long partner of a Nutanix Citrix and how that plays out in this clusters type of environment so maybe if you could just illustrate that as one of those proof points is how customers can leverage the variety of choice. >> Yeah, we're very excited about this one, right? Because given what we're currently going through as a humanity right now, across the world with COVID situation, and the fact that we all have now to start looking at working from home, enabling scaling of existing infrastructure and doing it without having to go and rethink your design enabling this clusters in our Citrix solution is just paramount. Because what it will ask you to do is if you say you started and you had an existing VDI solution on premises using Citrix, extending that now and you putting new capacity in every location where you can go and spin this up in any AWS region or Azure region, no one has to go and the same images, the same processes, the same operations of your original desktop infrastructure would apply regardless of where you're moving now your workforce to work remotely. And this is again it's about making this very easy and keeping that consistency operations, from managing the desktops to managing that core infrastructure that is now enabled by using different clusters on Azure or AWS. >> Well, Thomas back in a previous answer, I thought you were teeing something up when you said we will be entering a new era. So when you talk about workloads that are going to the cloud, you talk about modernization probably the hottest area that we have conversations with practitioners on is what's happening in the database world. Of course, there's migrations, there's lots of new databases on there, and Nutanix era is helping in that piece. So maybe if we could as kind of a final workload talk about how that's expanding and what updates you have for the database. >> Absolutely and so I mean Eras is one of our key offerings when it comes to a database automation and really enabling teams to start delivering database as a service to their own and users. We just announced Era 2.0 which is now taking Era to a whole other level, allowing you to go and manage your devices on cross clusters. And this is very topical in this current use case, because we're talking of now I can use era to go in as your database that might be running on premises for production and using Era to spin up clones for test drive for any team anywhere potentially in cloud then using clusters on the all kind of environments. So those use cases of being which more leverage the power of the core is same structure of Nutanix for storage management for efficiency but also performance and scaling doing that on premises and in unique cloud region that you may want to leverage, using Era for all the automation and ensuring that you keep on with your best practices in terms of deploying and hacking your databases is really critical. So Era 2.0 great use cases here to go and just streamline how you onboard databases on top of HCI whether you're doing HCI on premises or HCI in public town, and getting automation of those operations at any scale. >> Yeah, hey Tom has mentioned a performance and Era has been a great extension to the portfolio sitting on top of our HCI. As you know Stu database has long been a popular workload to run it all HCI, particularly Nutanix and it extends from scalability performance. A lot of I talked about earlier in terms of providing that really low latency to support the I-Ops, to support the transactions per second, that are needed these very demanding databases. Our customers have had great success running SAP, HANA, Oracle SQL server. So I think it's a combination of Era and what we're doing as Thomas described as well as just getting a rock solid foundational HCI platform to run it on and so that's what we're very excited about to go forward in the database world. >> Wonderful, well look, we covered a lot of ground here. I know we probably didn't hit everything there but it's been amazing to watch Nutanix really going from simplicity at its core and software driving it to now that really spiders out and touches a lot of pieces. So I'll give you each just kind of final word as you having conversations with your customers, how do they think of Nutanix today and expect that we have a little bit of diversity and the answers but it's one of those questions I think the last couple of years you've asked when people register for .Next. So it's, I'm curious to hear what you think on that. Maybe Greg if we start with you and kind of go down the line. >> Yeah, for me what sums it up is Nutanix makes IT simple, It makes IT invisible and it allows professionals to move away from the care and feeding structure and really spend more time with the applications and services that power their business. >> And I agree with Greg I think the two things that always come up, one is the freedom of choice, the ability for our customers to be able to do so many different things, have so many more choices and we continue to do that every time we add something new or we announce something new and then just to add onto what Greg said is to try and make the complexities invisible, so if there are multiple layers, abstract them out so that our customers are really focused on doing things that really matter versus trying to manage all the other underlying layers, which adds more complexity. >> Yeah You could just kind of send me to it up right. In the end, internet is becoming much more than HCI, as hyper converged infrastructure this is not taking it to another level with the hybrid cloud infrastructure and when you look at what's been built over the last few years from the portfolio points that we now have, I think it was just growing recognition that internet actually delivers this cloud platform that you can all average to go and get to a consistency of services, operations and business operations in any location, on premises through our network constant providers through our Nutanix cloud offerings and hyper scaler with Nutanix clusters. So I think things are really changing, the company is getting to a whole other level and I couldn't be more excited about what's coming out now the next few years as we keep on building and scaling our cloud platform. >> And I'll just add my perspective as a long time watcher of Nutanix. For so long IT was the organization where you typically got an answer of no, or they were very slow to be able to react on it. It was actually a quote from Alan Cohen at the first .Next down in Miami he said, "we take need to take those nos "and those slows and get them to say go." So the ultimate, what we need is of course reacting to the business, taking those people, eliminating some of the things that were burdensome or took up too much time and you're freeing them up to be able to really create value for the business. Want to thank Greg, Madhukar, Thomas, thank you so much for helping us wrap up, theCUBE is always thrilled to be able to participate in .Next great community customers really engaged and great to talk with all three of you. >> Thank you. >> Alright so that's a rack for theCUBES coverage of the Nutanix Global.Next digital experience. Go to thecube.com. thecube.net is the website where you can go see all of the previous interviews we've done with the executives, the partners, the customers. I'm Stu Miniman and as always thank you for watching theCUBE.

>> From around the globe. It's "theCUBE" with digital coverage of OutSystems NexStep 2020 brought to you by OutSystems. >> Welcome back, I'm Stu Miniman and this is CUBE's coverage of OutSystems NextStep. Really excited to have "theCUBE" at this event. Lots of excitement in the Keynote and happy to bring back one of the Keynote speakers Goncalo Gaiolas. He is the vice president of product at OutSystems. Understand the team calls him GG, Goncalo, thanks so much for joining us and good to talk you. >> Good to talk to you too, still welcome. Again thank you for having me. >> Yeah, so we're glad to be here. One of the big themes of course we've heard of the show it's built it fast, build it right, build it for the future and a theme that you hit on, something we've been hearing for years and only more so, is building new applications that software development, we need to do it faster. I hear from Microsoft Satya Nadella talks about just the massive amount of new applications that will be out there, so it's one of those things, do we have enough people? Do we have the right skillset? So take us into that developing software first, what that really means and how you're helping your customers there. >> Of course, so absolutely. So when we talk to customers, I talk to customers all the time and when they speak to me, they're essentially telling me about their business problems. And today the ability to get custom, highly customized, specific applications that fit their business have great experiences and get go to market quickly is one of the top business issues that they have. Now we know that this has historically been something that companies have tried to do but now more than so with a fast pace of change and sort of response cycles that companies have to go through this has now become an imperative. We've actually built most of our platform to accelerate the entire cycle of application, not only development, but also deployment, delivery, all the pieces that can, where we can increase productivity. That's really what we've been doing for the past 20 years or so. And we believe that we can help customers with a bunch of things from getting access to more wide diverse talent pools, to deliver great experiences that are best in class and rival the consumer experiences that people are used to. And that helped them modernize their existing legacy systems, all of that with unbeatable speed. >> It's interesting. The discussion of modernization has been around for decades, but in the old world it was like, okay, I'm going to do some migration, it's going to take a couple of years and then when I get there just don't breathe on it 'cause we think we got it mostly where we need whereas today, I mean the conversation we have, what I want to hear you and your team talking about is we know that, you know what we stand up, there's constantly going to be change, it's not the monolist anymore. Maybe speak a little bit more to that. That it's not just modernizing, it's not a destination, but it's that ongoing journey that we need to continue to have. >> Absolutely, absolutely. So we spoke about speed. Speed is often thought of as how fast you get to market but we think of speed also on how do you keep that change going at the right pace so that you react quickly and you react without sacrificing important things like the scalability or the security or the performance of the things you're trying to do. So really think about it in three ways. The speed that we do, that we provide our customers for their initial deployments without ever sacrificing the building it right part. But then above all, building for change, building for the future, allowing customers to experience new technologies but to react very, very quickly. So we obsess over having giving customers the ability to really iterate on top of what they deliver because even with a great platform such as ours, you'll never get it right the first time around in the world as we know and this year was best prove ever. The world is always constantly changing around you. So it doesn't matter if you're the first to market, if you can't change and adapt that's, in due time competitors will catch up with you and you got to really build it for it to change, build it for the future. >> Yeah, you bring up a really great point there and you kind of hinted that your platform is going through a lot of changes. Help us, bring us inside a little bit. When you know, we're going to talk more, I know about the AIP some of the new enhancements there. OutSystems now almost 20 years old, you go back a decade ago, we weren't talking digital transformation, it was like a mobile enablement, some of those other pieces there. So it's very different challenges to get day, very different skillsets, generational changes going on. So help us understand a little bit the kind of the underpinnings the evolution of OutSystems to be able to still be competitive and quite relevant today. >> Excellent. That's a great questions too, and I mean we spent the last 20 years just completely obsessing this problem of how do we help customers go fast and change fast. And to do that, we had to tackle the entire life cycle of software. So in the past few years, we've actually focused very much on helping customers deliver best in class front-end experiences. How do you build the great user interface? How do you do that in the world? What is a low-code quote unquote "Environment"? How do you do that to compete with the best and class front-end developers? That's really where we've focused very much of our last few years. At the same time, the backend of that and how those things get delivered and how more mission-critical you can get, that's been quite an investment for us. So really investing in security and scalability of the generated apps on the ability to have multiple global deployments has been a great investment. We were big on clouds. Most of our customers run on our own clouds and we invest tremendously there to give them all the options that they need. So if you think about these two things, you get very much massive mission-critical enterprise applications built on top of our platform. And if I go back, you were talking about our 20 years. If I go back five or six years ago, I remember talking to customers and customers telling us, wake me up when you can build a mobile banking system or my customer portal and today that's every week, we're building things like that in our technology. So it's really a testament of the maturity of the platform and how customers have embraced it. I would say also Stu, just to compliment and to finalize the answer. I'd say, we see a lot of focus as well on making it more accessible to people from different backgrounds. Just in the next couple of years there are going to be the world's going to need 10 million more developers. We're not going to get to those 10 million more developers if we keep using the same methodologies we've used in the past. So we invest very much on things that accelerate transitions from people coming into the professional development cycle, obviously because our platform is visual and we invest very, very much on the user experience, the developer experience, we make it easy for people to be onboarded into the platform without really ever sacrificing the power of what they can deliver. So those are the things that we've really been focusing on for the past few years. >> Yeah, we've looked back the last 10 years, there's so much discussion about starting to take advantage of the cloud, companies that were born in the cloud starting off there, we know that we are just in the early days and what we hear customers they're accelerating even more, so there needs to be that wholesale change and therefore they need tools that can help them culturally and building those new pieces. So I guess it makes sense maybe, let's bring the same inside, the platform itself, you did a great job in the Keynote walking through so maybe we can encapsulate for our audience a bit, some of the key capabilities that you have inside the platform. >> Absolutely. So you should think of our platform as divided in three great pieces to three major components. First of all, there's the entire development capabilities or we call the our development studio. That's been something we've been developing for years and adding capabilities. It's a visual environment, where developers can assemble really quickly applications that they can consume services from their enterprise or from cloud services which to your point is something we see customers struggling with. How do I make sense of the 240 services available to me on the cloud? How do I connect these together so they make business sense to me? So that's one part, and that's really the part that is typically associated with Low-code. At the same time, we're also very much focused on this deployment and runtime capability because an app is not really so useful if you've just developed it. Now, the biggest or a big part of it is actually to get it in front of customers delivered with zero downtime with many, many cycles and many, many deployments per day. So we focused very much on the delivery pipeline, if you will and our own cloud. So we've invested, we have a great partnership with AWS, we run our cost on top of AWS. We've invested on abstracting all of the complexity that you need to run an enterprise grade mission-critical system on top of such a platform and that's really the second component is all of our runtime capabilities of all of our cloud and our deployment capabilities. And finally, I would be remissive. I wouldn't talk about our entire community and our forge. Our forge is of repository in our marketplace or of applications and components. We have a very active developer community it actually grew more than 90% last year and they contribute to law to disforge. So think of the forge as a capability that allows unlimited extension of the platform powered by a very, very active community. So it's that full stack development environment that has not only our surface studio, but also our builders I forgot to mention our great builders that accelerates typical use cases like building workflows or building prototyping applications we've seen that in the keynotes. Also our cloud and our deployment capabilities very much focused that would be the second part, very much focused on that building, it writes in that mission-critical deployment. And finally our community, our ecosystem of partners and our forge that really extend the platform to do many, many different use cases that are valuable for our customers. >> I'm looking forward. I know we have Jen Lopez coming on "theCUBE" to talk more about the community. One of the things >> Excellent that we would love to see at shows like this and that builder message of course resonates quite well with the AWS Community since that was one of their big ad campaigns for a couple of years. Maybe if you could, it often helps to illustrate if you've got a customer example that speed of response. 2020 is at no shortage of companies having to move fast in directions that weren't necessarily what they were planning to at the beginning of the year. >> Absolutely, absolutely. So we've had many examples, one that we addressed in the Keynote stem cell technologies is that we're really able to respond super quickly to the COVID challenge by deploying a series of applications that serve many, many different stakeholders, and that speed was off of the essence. We've also had a campaign, some of you might've seen around LU Crowe, LU Crowe is a financial services provider in the United States. And LU Crowe has been able to respond to government stimulus packages and capabilities by creating applications specifically target for this use case, this is a highly optimized for the workflow that they were going after. So great example as well. And we've had customers all around the world, but only building their now mission-critical new completely new applications to get people back to work safely in multiple different workflows, from field services to people going to the office, but also customers have seen more ramp in their own businesses and really took those digital channels to the next level. We see telcos, large telcos using our systems to deploy new digital systems that are now very, very important because people more they have an extra incentive to use digital channels if you will. So it's been quite intensive to see all of these customers respond and react to their own specific needs in the middle of everything that's going on. That's good, I think quite good. >> Yeah, one of the trends that we've been seeing in the last couple of years is the pulling together of developers not just being, a group off on the side that you threw something over the wall to, but there was not just the DevOps Movement, but a lot of the tooling now is helping to give visibility to multiple groups. When I talked to some of your customers, when I look at the servers community, oftentime it's not a hardcore developer but that citizen developer that's getting involved or sometimes even somebody from marketing that can leverage some of those tools. Can you talk a little bit about how your platform is maybe now hitting different skills and different people inside organizations as we see this trend progress? >> Absolutely, absolutely. So we have a, I think we have a quite unique take on the entire approach to what's normally called the citizen developer. So the first thing I would tell too, is that we think we obsess over productivity of these teams. And like to your point, the composition of these teams, how they're put together is radically changing, you don't have the business team and the IT team and the operations team, everything is being managed and fusing together. So we think very much about how do we optimize for that entire life cycle and for the entire collaboration set of collaboration activities and workflows for those teams. In the keynote, you've seen it talk about the thing we called the experience builder. The experience builder is a great tool for business users, business stakeholders, and professional developers to collaborate on assembling in a very visual, very fast way, what a beautiful mobile application would look like. So we think that is the future, is to design specific capabilities that allow for these interactions for these jobs to be done, to happen in the natural context of the collaboration. We don't think, we think the citizen Developer Movement is an offshoot of not actually addressing the root cause of giving developers and IT teams the capabilities to interact, collaborate, and respond fast enough. Now at the same time, we're very much fans of a diverse set of people or backgrounds coming into the professional developer community. We have examples all around the world with people with chemical engineering backgrounds, history majors that have transitioned through training and through usage of the product that transitioned to full time developer careers. And we don't think of those as citizen developers. We just think of those as the new developers coming into the workplace, enabled by platforms and tools such as ours. That really democratized the ability for people to make application creation their own trade, their own job. So that's a very, very exciting trend. >> Well, and what I hear you saying reminds me of the conversations we've been having in general about automation, AI, and even robots worthed, today there's a lot of software robots out there. So just as most people are familiar now, if you go into email and it starts trying to complete your sentences for you or give you responses, I heard you talking your AI capabilities are starting to help along that way and therefore that could open up the window for a broader class of people to be able to lower that bar to entry to become a full developer. Is that where you see it going? I'd love to hear just a little bit more directionally the AI piece today for the next year and how comfortable are your customers with that as to partnering with the software? >> Absolutely, that's a great, great question. And we think of AI. So it's two layers actually. One is what would happen if you had a colleague that would be sitting next to you? There will be a phenomenal technical lead, somebody that would guide, automate and validate all the work that you've done, and to really remove anything that's completely boring and repetitive out of your way. That's really how we think about AI. We started this journey about two years ago if I will, about three years ago, two to three years ago at our other next step. And what we've seen over the last few years, we started very small with a thing we call the next-best-action prediction and now more and more, we've been fusing AI across the product so that every poor part of the development cycle from what developers code and the logic, the UI to how architecture is measured and technical depth is measured. Everything is infused in with the AI and we see great reception from customers because it just makes their life easier. It's removing the boring, that's the expression they use. Its just removes the boring, repetitive things and frees human creativity. It's not going to take the developer's job, it's essentially going to make them super humans if you will, so that's one way. The other thing that you've seen us talk about the Keynote is how do we make this happen for our customers customer? How we help developers deploy AI capabilities within their own applications build like a platform so that what they do and what they deliver has the same property, the same characteristics of the thing that I'm talking about. So with deploying AI, it's still hard. It's still very, very hard these days. We talk a lot about it, but it's not for the, it's hard. It has many, many problems. You've got to treat the data, create the models, deploying the models, integrate them into the applications. And we're really making sure that that cycle is compressed as well and accessible to more people. So to answer your question, we see customers, absolutely. It's probably the part of the product they get most excited when they see it in action like they saw it on the Keynote because it's just going to make their lives easier, more easier to respond faster to change. Easier to build new things and easier to have people that are just happy with their lives and with their careers. >> I know, such a good point there. I've run through people over time that sometimes they're hesitant or they're not sure, they're worried it's going to take away their job. And it's like, well, don't you think if you had an extra hour or an extra day that you would do other things that would be more fulfilling and more valuable for the business. So important that we can do that and top priority we've been hearing for the last year or so >> Absolutely >> Is to really embrace that automation, AI. All right Goncalo, I want to get, let you have the final word a lot going on at the show here. We're really excited to have a broad coverage here. Going to dig more into the AI, the community, a couple of your customers and the like so. Give us a final word from OutSystems NextStep. >> Well, I think the final word here is what we're building is just starting. We're looking forward as you said, OutSystems is about 20 years old now, we're looking forward to the next 20 years into really embracing the next 10 million developers that are coming into the workplace and to make their lives and their contributions to society, to organizations, to businesses really, really fantastic. And to have people going to meetings and say yes, and to feel like they're the roadrunner and not that to feel that they're pushing their businesses back, and we're going to be here to support our community in this transition. And to make them super human, super productive, so a hundred times more productive than with any alternative, that's our vision. And so I hope that if you're still on the fence about is this the right thing for me, that you take a closer look and really understand what it is that we can offer to actually most businesses. We're applicable to most businesses at this point in time. >> Goncalo, thank you so much. Alan Cohen, a great friend of "theCUBE" said many years ago, right we need to get people going from saying no or being slow and the answer needs to be go. >> So Goncalo. >> Yeah, absolutely. >> Thank you so much for joining us pleasure talking to you. >> Thank you too, pleasure. >> Okay, stay tuned for more coverage from OutSystems Nextstep, I'm Stu Miniman and thank you for watching "theCUBE". (bright upbeat music)

live from Copenhagen Denmark it's the cube covering Nutanix next 2019 bought to you by Nutanix gut morgen cube inators we are here in Copenhagen Nutanix dot next I'm your host Rebecca night along with my co-hosts to minimun what what I what a what a beautiful day in Copenhagen it's such a pleasure to be co-hosting dot next with you this is a company that you have really what been watching for a long time we're here celebrating ten years of this company I'd love to just get your first uh flick off the cuff thoughts what do you think about this company how has it changed since its inception ten years ago Chuck Rebecca unfortunately is the only Danish that I know so so hopefully you'll bring that but super excited it's the ninth dot NEX that we've had the qubit which is all of them that's the eighth one I've had the pleasure attending and Rebecca as you said uh you know I've watched this company since early early days first time I went to Newt annexes office that the paint was drying on the wall there and D arrives actually the CEO founder of the company showed me here's actually from a real estate standpoint we're going to expand here and move here and if things go well like we think we will move across the street and we can really build out a corporate headquarters and actually all of that has happened so ten years of celebration here over 5,000 employees there are some things that have not changed at all from the very first interview that John Ferrara and I had with dirige it was talking about the complexity of building distributed architectures and software what what Nutanix has learned from the hyper scale players absolutely impacts what they're doing but this landscape has changed so greatly you know you know this was originally everybody thought about it was you know that that term hyper-converged infrastructure came out it was about appliances and how many boxes you have but at the core it always was software and today we're hear them talking about how you live in that hybrid and multi cloud world all of these software pieces many of which you know seem to have it they're loosely coupled with the the core a OS software which itself has gone through complete revision to be ready for cloud native the latest databases all the new things so we know there is so much change going on in our industry um but but I saw what was built here is a culture and a company not just a product and so it is a celebration I love do they started with some of their early customers and partners especially here in Europe so very international flavor of course over 50 companies countries represented at this show we can see the the energy behind us with the expo hall here and yeah you know Nutanix have been public now for about three years going through a lot of transitions and lots of stuff for us to dig into over the next absolutely we're gonna we're gonna get into all that one at one of your tweets from this morning words where you were watching the mainstage and you said Nutanix is finally starting to answer that question what is the value of Nutanix in the data center you have a devoted Twitter followings do so we're all dying to hear what it was how do you see them answering that question it isn't enough well it's actually how they fit into the hyper scale data center because we know where Nutanix fits in the on-premises data center that's where they've lived but as customers are figuring out and you know the you know the thing that gets talked about a bunch here is you know the technologies that you know most of the customers use here is virtualization in VMware of courses that still has a dominant position in this environment while almost half of all new tannic snows that shipped in the last year use ahv the Acropolis hypervisor which is free it's by Nutanix it's based off of the KVM open source the rest of them are using pregnant predominantly VMware it's a little bit of hyper-v in there but when you go to that cloud environment I want some of the same software stack I want to be able to be able to put there so right there's one of the Nuggets that they showed towards the end of the keynote today and they've teased it out a little bit over the last year it's what they calls AI clusters so that is their stack or what they call X in some of those clouds the first one interestingly enough is is AWS and I say interesting because Google has been a solution that Nutanix has been working on but AWS is actually opening up bare-metal instances so it doesn't mean you know we take our stack and we put it on the side and we have specialized hardware it's the ec2 bare-metal instances that we're going to be able to run the new Tannis software and we've seen a number of companies out there pure storages one-day Volante and Lisa Martin were at that show not that long ago talking about you know if I am truly software and I'm independent of location how can i integrate into some of these environments so that's where we see Nutanix looking to go it's in tech preview with AWS GCP something they can do for demo environments but it's not yet open to be able to put in production environments you know the hope from Nutanix and others is that Google will open that up Google is position themselves in the open cloud and then azure will be there too so other clouds so when customers choose their environments and their own data centers they're hosted environment the public clouds we know there's going to be a lot of moves and changes and it's not going to be a one-way or a one-time thing so I want to get this as solutions that give flexibility and allow me to place where I want to and then move things as my strategy needs to adjust so the really interesting stuff definitely something what will geek out with talking about the competitive landscape this is a company that is that is a solid number two of you you've talked about this a lot in your analysts reports and at these various shows too VMware if this is a this is a two horse race there's a lot of money to be made in this market where do you see this is a company somewhat under pressure but where do you see Nutanix strengths and where do you see its biggest obstacles to overcome especially as it as it goes head-to-head with VMware yes so from the early discussion about hyper-converged infrastructure it is down to two companies and it doesn't get talked as as much as it might have a couple of years ago um there were some of my peers in the industry you know three four years ago there were like 30 companies out there there were a few acquisitions Cisco made an acquisition HPE made an acquisition you know VMware has their offerings out there but really it is to you know lead horses out there if you talk from a revenue and a dollar standpoint it is VMware and their partner ships their Dell of course has did the leading offering from VMware and then Nutanix is strong and Nutanix is growing customers they've got over 14,000 customers they added over 3,500 in the last 12 months so growing strong good growth the transition from being both you know soft soft rose at the core but really kind of ridding themselves of the hard we're going to full subscription and software model has been increasing their gross margin they're up to about 80 points of gross margin up if I remember right about three three and a half from from a year ago it has moderated their revenue because if you look traditionally and say okay what's their bookings and what's their Billings it is flat even down a little bit but that is because you're shifting from well I'm pulling along a whole bunch of stuff that I'm really not taking margin on to pure software so they believe they're past the toughest piece of that transition and I'm sure Dee Ridge will be talking about that they've done the faster transition of any company that's done this he sits on the board of Adobe Adobe went to that subscription model from this software subscription so they're doing that on but the big change is really if you talk about okay you know Nutanix is number two well that's the hyper-converged market that's what we were talking about a couple years ago when we're talking the multi cloud market you're talking about companies like Microsoft in Google and Cisco and of course VMware competing there and Nutanix would not be one of the first ones that I would mention but they do have their well positioned to help their customers and what we need in cloud is the simplicity that hyper-converged solutions like Nutanix brought to the data center so Nutanix has that opportunity to reach a much broader audience and a much broader market to go from the 14,000 customers they have to literally hundreds of thousands of companies out there that need these types of solutions and if they are to be 10 years from now at they're 20 years looking back and saying where do they fit in cloud where are they as you know a true you know technology software company for businesses that is the mark that they will need to make you're what you're saying about the simplicity that is what that is the message that we are given here today is that this is all about simplicity choice and delight make computing invisible and do you think I mean that that's so that's their message that's that's the that's the marketing gambit here altogether now do you think that is it is it going to work I mean this it is it is clearly what you say that the market needs but is does Nutanix have the staying power so Rebecca I I think you'll agree what's nice is when you hear the customers out on stage you know they actually give you the reality and it is you know in the early days of these shows it was I loved Nutanix it gave me my weekends back the quote that I had from a customer that I spoke to getting ready for this show is what I loved about this they actually had a customer that the main IT staff was not really in favor of going Nutanix they were certified and knew how to use the existing hardware and software and it spent years working on that um and they followed the rules and he said I don't want IT to follow the rules I want them to try things I want them to break things um you know I want them to be able to get ahead of the business and not just meet the requirements so he said we're spending we're ramping up our spending on training and education than sending them to events like this and Nutanix is an enabler because it doesn't just work it exceeds their expectations it is better performance they have Headroom to be able to try things and throw things at it and that is exciting so it's not just as I said oh this interesting box that I stick in a corner and I don't worry about it it is changing that that culture something I've been looking at you know can some of these technologies actually drive some of that cultural changes because traditionally it's you know executive mandate you put something new in and everybody fights against it so some of this can actually be from the ground level up is I get into these tools and solutions and it changes my workflow it changes how I work between groups how do I get the developers involved there was a lot of talk about the applications the messaging that they unveiled here all together now that that resonates with I can't just have my database my apps and my data itself in siloed as to who can access it and who can use it and have to worry about oh I need nine months and hundreds of thousands of dollars to do anything I want to be able to you know IT needs to be not no or slow but go I shout out you know Cuba Lum Alan Cohen who actually interviewed at the first dot next so he was you know early supporter of Nutanix and you know that that's what the kind of the developer driven mantra is you know IT very much working with the business and if it can drive innovation I mean Rebecca we've been talking important female leader at the moment but exactly talking about how technology can drive cultural change within a large organization because Nutanix is a large organization now it's it's only ten years old but it is it is not a start-up it is it as large complex exceedingly complicated organization and so how do you drive innovation creativity change collaboration communication between different silos these are all these are all topics that we were going to delve into today another word we keep hearing a sort of a cultural buzzword at this conference is resilience and we're going to on the main stage we're going to hear from Caroline Wozniacki who is a very famous tennis player we're gonna hear from the CEO of Noma who was of course Copenhagen's famous kuelen Airy delight and of course Kit Harington yeah so anybody that watch Game of Thrones um you know Jon Snow was definitely resilient to be able to last the eight seasons and everything that happened across it so Andy rich you know one thing we really respect you know we've watched him since the early days he is very thoughtful as to how he goes and when he actually said to me yesterday's it's do you know we are you're going to hear some of the same words that some of the other vendors but the you know the why and the how underneath that for us is different and that's very important and especially in the technology space that that nuance and the you know really how's that work in how does that put together and not just that we can do it but is this the right way it doesn't make sense so they are thoughtful about how they do it and and they're moving forward so you know they definitely believe they're positioned well for the next phase of their journey and always it's been a pleasure to you know watch this and you know to talk to all the the builders the dreamers and yeah dreamers believers and builders is what they came out this morning so well we're gonna be we have a lot of great guests on the show today I'm so excited to be hosting here with you in Copenhagen at this next dot dot next so we have dirige Pandey coming up next i'm rebecca night force two minimun please keep tuned to the cube you're watching the cube

(upbeat music) >> Announcer: Live from New York, it's the Cube, covering AWS Global Summit 2019. Brought to you by Amazon Web Services. >> Welcome back, we're here in New York City at AWS Summit, one of the regional summits. Over 10,000 people in attendance. I'm Stu Miniman. My cohost is Corey Quinn and happen to welcome Slalom to the program for the first time. So, Slalom, like Amazon themselves, is based in Seattle, yet, also has a presence here in New York City. And representing that, to my right, we have Parul Patel, who is the managing director of middle market for Slalom, based here in New York City. >> That's right. >> World Trade Center, I believe that's where your office is. >> That's right. >> That's excellent. And Joe Berg is the managing director with Slalom based out of Seattle. Thank you so much for joining us. >> Yeah, thank you. >> All right, so, I did walk by the booth this morning. Build as a service is the big takeaway. But for our audience that might not be familiar with Slalom, give us the bumper sticker. >> Yeah, so, the way we like to tell the story is Slalom is a modern consulting company focused on strategy, technology and business transformation. As a part of the technology work that we've been doing for clients for the last couple decades, we started to see a shift in that really with the advent of cloud and companies like AWS. Really changing the technology landscape and what was really possible. You mentioned the build as a service tagline. That's really what the operating model that we built to serve those customers at the scale and at the velocity that they're starting to execute on their most mission critical digital initiatives today. So build as a service is really how we dig in and leverage platforms like AWS and provide value for customers. All right, so, Parul, one of the things we like about these regional summits is it's not just little bit rinse and repeat when you go to the environments-- >> Parul: Right. >> But they do speak to the local market. So when you look at that, some of the customers in the keynotes, you expect to see some financial services-- >> Parul: Right. >> Being here in New York City. A startup like Door Dash, where they were here. Give us your viewpoint, what is special or unique about the greater metropolitan region here in New York City that you see with your customers. >> Sure. So I think as we think about New York as a market, a lot of industries, a lot of companies that are based here. Certainly financial service is one of the big ones. But the buzz in the market is all about cloud. What are we going to do, how are we going to get into the cloud? The question we like to ask our customers is, why. Why do you want to be in the cloud? And what we're seeing, especially in financial services, is a lot of innovation. So as we think about what Joe does from a build as a service perspective, we have a client in financial services who they wanted to figure out, how do we generate more revenue? So we built them, with our build as a service capability, an AWS platform that helped them bring data together and figure out how to monetize that data across different business units and innovate. And so I think it's things like that that we ask that question of why. We can leverage cloud to really do that transformation. >> That's great. We always talk about IT can't be the organization of no. Or, as a friend of mine, Alan Cohen, said, that there's the triangle of no and slow and we need to move up to the top, which is go. >> Right. >> So how does cloud help with that move forward. That love story you talk about, how do I monetize data, how do I move that forward. There's been that promise of that but how do I turn it from a lofty goal into actual reality? >> Yeah, maybe Joe, I'll let you answer that with a little bit of how we bring it to life with our build as a service. >> Honestly, we look at cloud, it's not just an enabler of business today. It's almost fueling business today. And the reality is, the customer consumer demand out there for digital experiences is exponentially growing, right? Organizations are trying to transform themselves into these modern technology companies. Doesn't matter what industry, financial services-- >> Parul: That's right. >> Or otherwise, they're really trying to transform themselves. And cloud is really allowing them to get out of the procurement game, out of the infrastructure game, out of the data center game and really start to lean into, how do I just make use of this in a meaningful way that's going to translate into those revenue streams that Parul talked about. >> It's deceptively complex. Sorry, it's deceptively simple, I suppose, to take a look at what cloud represents, of, okay, now whatever you want instead of buying it, waiting six weeks for it to show up, if you're lucky, and then racking it. Suddenly, it's an API call away. The technology piece is interesting but how does that impact the cultural change, the processes, the governance story about it? The cost control, speaking as a cloud economist, how do you find that this is revolutionizing these companies as they are migrating into this brave new world and transforming? >> Joe: Yeah. >> When I think about cloud, so to me, it isn't a technology play at all across a business. It's about changing your business that starts with changing your mindset. So, being in the cloud, and leveraging cloud, is about how do I do things different? And that means, I'm looking at my fundamental operating model. I'm looking at who my customers are and then changing the mindset of my people. And culturally, we're going to become faster, we're going to iterate a lot more. And having things like cloud, which I can spin up instances at the click of a button, makes it easier for me to do that. But it comes with, I've got to think about my people, right? And I always tell our clients, explain to your people why this is important to them and why it's important to the business because they're going to be able to learn new skills. They're going to be able to do more and become more marketable out there. And so, to me it's a company transformation, not necessarily a technology play at all. >> Yeah, and I'll just maybe piggyback on the back of that. When you take your strategy and you start to think about translating how we're going to do things in a digital business environment and you start to think about the demands that consumer base has on how fast you release features, how quickly you are procuring new experiences for them. It is absolutely about an operating model that can translate strategy and do initiative and budgeting planning into execution very quickly. It's also, then, about when they move into the actual execution. IT organizations were not built to build technology products. They were there to build technology projects. And the confluence of those events of this becoming mission critical and part of their external facing strategy has really required that transformation and cultural shift as well, in terms of how do we build things very fastly and quickly-- >> Parul: That's right. >> Get them out to market in a iterative way that has impact and benefit and value to consumer. And I think that is the holistic complexity that organizations are dealing with, with something that is making technology very simple but the actual then motion of getting that technology to be useful is complex. >> Yeah, and it becomes very challenging to get to a point of people who are used to the old way of doing things. they're seeing the skillset that's required continue to evolve. And it's very challenging for a large-scale company to say, okay, I'm going to go out this week and hire 2,000 new people who are all up to speed on a cloud provider. >> Parul: Yeah. >> That's something that's almost impossible for people to do. So there has to be a bridge. There has to be a story that isn't, well, we're going to replace you with a younger version. >> Right. >> There has to be something that opens a door and a way to get there. And doing that both culturally and on an individual level seems like it's something a lot of companies are struggling with right now. Is that something you're seeing in your customer base? >> Absolutely. I love that question because it gives me an invitation to talk about build as a service. >> That's right. >> And build as a service, we're playing on the as a service language that companies like AWS establish, right? And the idea about build as a service is it's instantly available. You've got idea, you need to go start executing quickly. Maybe competitor A has already built an experience out there that is surpassing you in the marketplace. You don't time to think about, how do I pull all these things together? How do I upskill my resources in terms of skillsets and capabilities to then get to the point where I can execute? I need to do that now. But, I'm also on this journey of transforming my internal culture and my people and my skillsets. So how do I get a jumpstart in that. We have built a model to help our customers instantly tap into that. And these multidisciplinary teams that really holistically are bringing solution to customer, but we're also doing this in what we call a co-creation model. How do we help them learn and adopt those same principles that are going to help them build modern technology, software and products when we're gone and they're becoming self-dependent. And I think that is part of the journey of how you can leverage a company like Slalom. >> And that's why I would add, Joe, as we think about our offering, it is about getting to velocity in the software engineering space in the cloud. But this co-creation concept, I think, is one that we've heard from our clients that not a lot of people do. It's easy for partners to come in and say, here, we'll just do it for you. And our model is, we want to do it with you to the point where, when you have an agile team, we've got a mixed team of Slalom team members and client team members where we're helping the client team members learn along the way because these are all new technologies that are evolving so fast that it's hard to keep up, for anyone. >> It give me hope to hear what you're saying here, 'cause we all have the scars of listing through. It's like, okay I did a big rollout. Oh how'd it go? Well, you know, it was six to 12 months later than we thought and we all did the corporate mandated training. Yet, a month later, we're all lookin' at each other sayin, oh my gosh, how do we deal with what we have? And of course, it is no longer just waterfall and throw things over there. It is constantly changing. Therefore, co-creation is a term we love-- >> Joe: Yeah. >> And help us walk through. How long is an engagement like this? How much is there the ramp up? And then, as a service, so I'm assuming there is maintenance and you're staying engaged as after we are through some of those milestones. >> Sure, sure. Well, I always kind of start with, we moved from, as I said earlier, a project mindset into a product mindset. So each of these we consider its own piece of software. And product really starts way out here on the ideation site. So Parul talks a lot with customers about the strategy of what new revenue streams you need be thinking about. how do you engage with experiences? Once we move into this I know what I want to build. Now I just don't know how I'm going to get there to the finish line, as you were talking about earlier, Stu. That's really where we enter in with this build as a service model. And we start with a short four to six week discovery phase. So we can start to establish the foundation of what we're going to build together with our customers. That's where co-creation starts, right? What are other priorities? What are the features? How do we do agile together, which is usually a term companies use but it's not a term they know how to use, or a motion they know how to exercise well with. And so, how do we establish those things that we're going to create together? And then we scale into what we would call an MVP release cycle. Our whole idea is that we help you get to an MVP. We help you get to more viable product and then you start to become the owners of those future releases. That's that co-creation piece, where we can bring you alongside us, establish culture, actually create business value by actually getting something out the door. And then, you start to own it yourself. Depending on the competency and the abilities of the customers we work with, that can vary in terms of when those transitions happen. But we look at that as typically anywhere from a 10 to 14 week exercise to get that first iteration out. And then we start to iterate faster than that. >> Are most of your customers, are they just dealing with the people that they have in house? Or are they having to bring in new people to help with that transition along the way? I'm assuming it's a bit of a mix. >> I think it is a bit of a mixed bag and I think one of the keys, what I like about our philosophy, is that, we're all about how do we get you working software as quickly as possible. While we can do a four to six week discovery, we have client in a startup in the healthcare space, where we got them through discovery within four weeks. We do two week sprints. After three sprints, we had software up and running. And so, within 10 weeks, we said, here's what you need, and here's some working software. That I think, in a lot of ways, people say, hey, we're agile, we work fast. People typically are not delivering software in 10 weeks. And that to me, is the differentiator for the way we approach our problems, is we want to get to that working software as fast as possible. >> Right, at some point it almost feels like agile stopped meaning agility and started meaning we have a lot of meetings every morning. >> Parul: Yes. >> Joe: That's right. >> And that doesn't work. >> Yeah. >> That's right. That's a great way to say it, yeah. >> All right, a lot of customers here. Tell us what are some of the top things you're hearing from people. What bring them to your booth? What are some of those things that kind of set off the, oh this is a good fit for working with Slalom. >> Sure, well, I get asked all the time, what industries do you guys work in? Where is this most relevant, especially when you're talking about build as a service. And the reality is, it just slices horizontally right through every industry. Because, I don't know of an industry, whether it be healthcare, financial services, retail, manufacturing, I don't know of one that isn't on that journey. They're at different places on that journey, and the adoption curve, but usually we seem them coming. I think there's a stat out there that says 80% of the enterprise customers have adopted cloud. But only about 10% of the work clothes are on cloud, right? >> Parul: That's right. >> So they're coming to us with saying, hey we know we're on this journey of moving to the cloud, but we're stuck in really getting the most value out of the cloud and how can you help us accelerate the value that we believe is there with a platform like AWS? And that's where we're really entering in and finding those critical experiences that are going to create value, not only internally in terms of momentum, but externally in terms of their business. >> Yeah. And I would say that as we think about when companies look at us and why they picked Slalom as an organization to work with, one of the key differentiators is we like to work with people that we enjoy working with. So we truly want to partner with our clients and so companies say, you know what? We want people that we enjoy working with. we want people that are going to challenge us and be innovative. And that's what you're going to get. When you get Slalom, if you're lookin' for someone to be innovative and challenging a little bit, we're probably not the best fit for your company, right? That's just being honest out there. But I think the other piece of it is that we want to accelerate your journey and enable you to do it. So, we're not in the business. While we have long-term capabilities, like as a service, etc, we're not in the business of taking over your business or being in the outsourcing space. And so, our mindset is all about how do we make you better? And help you realize your vision? And I think that's why we work across a lot of different industries and a lot of different types of companies. >> Joe and Perul, really appreciate you helping share how you're helping customers through that journey, through great adoption in the cloud. Thanks for sharin' and all the updates on Slalom. >> Thank for having us! >> Yeah, thanks for havin' us. >> All right. for Corey Quinn, >> Take care. >> I'm Stu Minimann. We'll be back here with lots more coverage from AWS Summit in New York City. Thanks for watchin' the Cube. (upbeat music)

(triumphant orchestral music) >> Hello, everyone, and welcome to a special CUBE conversation. I'm John Furrier, here inside theCUBE Studios in Palo Alto. We have a great CUBE conversation around security, malware, phishing, and we got Atif Mushtaq who's the CEO of SlashNext. It's a startup here in the Bay Area with a Series A funding and they really solved probably one of the hardest problems that people are trying to crack the code on, which is how do you solve the human problem of not getting phished? And that is the technique how people are getting in. Actually, welcome to theCUBE, thanks for coming in. >> Thanks for having me. >> So I love bringing the startups in to get the real lay of the land because you got some funding, you got customers, you just kind of get out in the market, you're at the frontlines of security. And you're solving one of the hardest problems. >> That's right. >> Malware, phishing. >> Phishing, yes. >> So before we get into it, take a minute to explain what the company's doing. What is SlashNext? Why did you start the company? What's the early product look like? And what's the core problem you're targeting? >> Yeah, of course, I mean, I think you already told that. We are a company that is completely focused on phishing and social engineering. We are not a part-time, phishing is not a part-time problem for us. The company was built on the problem that, okay, that phishing is a growing problem, and we really need a technology and a company who's dedicatedly focused on social engineering and phishing. Before founding SlashNext, I worked for a company called FireEye. And the FireEye was not about phishing. FireEye was all about malware problem, right? So when I came out of that, I started to see that there was a time when the malware were really growing rapidly, right? And at that time, they were trying to exploit problems in the software, and exploiting that without any human intervention, right? And over the period of time, what we saw that Google, Microsoft, the world, they tried to make their software really secure. So during my last days at FireEye, I started to feel that malware growth is going down, and the reason is that Microsoft software are much better than they used to be. Google is really determined that nobody should really exploit my software to install malware. But at the same time I was seeing that, okay, the cyber crimes are rising. So if the malware are going down, what is really causing the cyber crimes? And, end of the day, I found that, okay, the game has changed. Now it's more about tricking humans and tricking in such a way that they give you their information, they click on the malware themselves, without exploiting anything in the software. And I also found that, you know what, I mean, you can't really solve this problem with just conventional computing, right? With just the algorithm. You really need to understand the human psychology because these guys are exploiting that psychology. Fear, trust, and reward. All of us have these emotions, right? They just have to exploit them in such a way that we get excited enough to hand over our information willingly to them. And this is where we start-- >> And it's working too, by the way. We know the numbers are off the charts and we cover it heavily on siliconangle.com, and we're about to do a bunch more content on cybersecurity and national security. So now it's not just the individual, the implications are broader. >> That's right. >> But let's go back. Before we get into that, I want to get it back, when you said at FireEye, the company you worked for, you said they were just doing malware. So they saw malware declining, you saw the trends going up. Before you wrote a line of code, that's what you saw. When you started the technology, what did you do next? >> I think it started with the problem. I think first of all, I really wanted to make sure that I'm solving a growing problem. If the problem is going down, eventually other people will catch up and by the time you have a solution, maybe the problem is not really there. So it's funny that at that time there were so many other companies trying to solve the malware problem, and they didn't realize that, okay, the malware problems are going down, right? And because I was working for a company who started the malware thing around 2004 or '05, right? So I had already seen-- >> A little bit older. The trend moves on. The fashion moved to phishing. But what did you start writing code on? Is it born in the cloud, did you have servers? What were you doing? How were you getting going? >> Yes, the code technology is based on cognitive computing. And the reason you really need a cognitive computing or artificial intelligence because you need computer software who could understand emotions. Because phishing is about exploiting the human emotion. And they try to exploit you by giving you a piece of text or some visuals in order to trick you. Okay, your CEO lookalike say, okay, transfer me $50,000. There's nothing really malware in it, right? It's just $50,000 transfer to me, right? They give you a fake login page of PayPal. No malware in that, they're just using the logo and sometimes they ask you, okay, there are various computer problems on your laptop, right? In order to fix that, you need to call us, right? So they're trying to exploit your emotion of trust, reward, and greed. So, end of the day, we thought that, okay, unless we have an army of researchers who are doing all this job because they understand the human emotions, or we can build programs that can understand these emotions, and whenever they see someone is trying to exploit this emotion, they can trigger on that. So result is that we have built a technology in the cloud. So while your user is checking an email, or a webpage is being rendered on the computer screen, within milliseconds we find, okay, something suspicious is going on. And we send the information to a cloud, and from our cloud we launch the browser in realtime. So while I'm seeing this webpage on my screen, the computer programs are actually seeing a copy of that from the cloud. The only difference is that, this, I might not be the tech-savvy guy, but the computer algorithm that actually looking into that webpage, seeing what logo is being used and reading the natural language, they're quite tech-savvy. So with it-- >> Talk about the technology. So, you had customers out of the gate before you had one dime of venture capital. You started getting paying customers. How are they deploying? What was the original product? What was their initial traction? Is it a SaaS model? Do they buy software? What were they paying you for? >> The form factor was hardware based. The hardware was cloud-powered. The whole purpose of the hardware was to sniff the network traffic, all the web traffic at the network switch level, and whenever they see something suspicious, they engage that cloud. So all the secret sauce and the main technology resided at the cloud. It was just a mechanical way for us to sniff the traffic. So the first product that we sold was that hardware device. And now we're moving more towards other form factor-- >> And you guys catch some phishing out of the gate? Did you guys solve some problems out of the gate? >> Yeah, within seconds, we started catching stuff. We, first of all, started seeing direct filtration attempts. We started seeing the phishing attempt right away. And this is where, I think, we got them by surprise because they already have all these big vendors already in place, and they were kind of over confident. They said, okay, you know what? You look like a young guy who's rarely had big claims. >> You had FireEye, you must know what you're talking about, we'll give it a shot. >> We'll give it a shot and they never believed that, okay? They thought, okay, maybe I can catch one or two phishing attacks, right? >> I have nothing to lose. I'll try it, I'm probably >> I'll try-- >> going to be on the plan, one more, what's one more box? >> But we got them by surprise. At the very, very beginning, the moment you attach the network traffic, we'll start tripping and this is how we got, I mean, no marketing material, no website. A founder is going without any presentation, and just selling. And I a hired a VP of sales who would actually carry the box with me. I would manufacture the box in my bedroom. My wife would put stickers, she's really good at that. And we actually pack it-- >> It looks good, yeah. >> It looks good. >> Little micro boxes, well, trying the chip on there. No, only kidding. Yeah, so you got the products, how many customers did you get on the early stages? How many did you get in that month? >> We had around 10 paying customer, and the revenue for around three, $400,000 ARR before we went in front of the VCs. And these guys had actually seen FireEye, and FireEye took a lot of money before they even had the paying customer. And they said, you know, what are you doing? >> You did a good move there. So, Atif, bootstrapping is a great, I think it's not only brave from an entrepreneurial standpoint, it really gives you the more creative freedom, because if you're putting your own cash on the table. So it's commitment and also it gives you creative license, not like that extra pressure. Most VCs might, some of these might give you a pass. Most are a bunch of board meetings and want to put pressure on you. >> That's right. >> Let's take a step back. Give us a 101 on the current state of malware. What are the different types of malware out there? You mentioned a few of them just a second ago. Break down the top malware, I mean, the phishing attacks. What are the top phishing attacks that you're seeing right now that people should know about? That may not know about. >> Okay, so there are two things. I would call it, first of all, there are two things that are happening when it comes to phishing. First of all, the mechanism that phishing attacks for using is moving beyond email. That is the first change. Now we are seeing phishing attacks spreading through advertisement, through social media, through messaging apps. Previously it was just emails. So that's one difference that we are seeing. Another difference is that the type of phishing's changing as well. Historical, it has been about fake login pages or money transfer scams. Now we are seeing a lot more things that were never been tried by the bad guys. You are seeing the scareware scams where suddenly there's a popup on your screen and they're asking you, to install a malware because there's a problem on your system and so-called anti-virus is going to solve that problem, right? We're seeing browser extensions being spread through phishing, right? We are seeing telephone fraud happening through this phishing, right? So it has moved beyond just fake login pages. So, first of all, more communication medium, and at the same time, more type of phishing attacks that are happening. So, right now, if you say around 20 to 30% of attacks that we are catching are the credential stealing, fake login pages. Around 20 to 30% are the rogue software, fake Flash player, fake PDF readers, and all that. And then the rest are the, you know what, browser extensions. >> So what is spear phishing? I hear that term a lot. >> Spear phishing is the targeted phishing. Spear phishing is that I'm not sending it to hundreds and thousands of people randomly, and who are gets victim to it, that's a bonus, right? >> The system admin for the Linux kernel for the bank. >> Yeah, I'm targeting you. >> I'm targeting him, social engineering. >> So I'm going to LinkedIn. I'm going to LinkedIn. I want to target your company. So I got your name, I got your email, and I'm sending one email to you. That is spear phishing, right? The drive by phishing is all about sending it to thousands and thousands of peoples, and then getting them phished. But there's one thing, there's one trend that is happening that is actually making spear phishing going away. What's really happening is that a lot of people who are targeting you, they don't need to send you the direct email. They actually go to the black market and all these guys who are randomly hunting you, they got your name from there. So they don't have to work hard. >> Dark web has my contact. >> Right, so I can go there and say, you know what, John, is there anyone with this email who you recently phished? And the guy who never really cared about you acted and die. I got that guy infected, how much you going to pay me for that? I pay you $50, and now I got access to your information without even sending you any spear phishing email. So this dark market and this overall cyber crime business actually has made much easier for the guys who really want to target you. Spend 50 bucks instead of I try to send you emails, and I have to set up all these website. I don't have to do anything. I can simply go to that dark web and can buy your information. >> This is a really good point. I think this is some people, it scares a lot of people, but it's well known the crime syndicates in the dark web are well advanced and well funded. So a lot of Bitcoin and cryptocurrencies help fueling that. Share your opinion on that. Share some color commentary about how sophisticated and how robust the economy is in the dark web. >> There are hundreds and millions of dollars. I mean, the guys are making millions of dollars. There was a ransomware called CryptoLocker and called in to FBI. They made tons of millions of dollars. So the money is huge. And Bitcoin is actually fueling that. Previously it was very difficult. You can always track by it. Previously, around 2006, I remember there was a ransomware, and they were asking you to transfer money through Western Union. But you can really catch those guys, the money trail always there. Bitcoin is one thing that really fueled the dark web. Because for the very first time, you can steal people's money without leaving any trail. And that is actually, I think, is the unfortunate consequences is it is really fueling the cyber crimes because now you don't have to care about you getting tracked, getting arrested. >> Yeah, I mean, we have a debate on theCUBE all the time about this. I mean, that with every dark movement there's also a light at the end of the tunnel. Gaming culture leads a lot of the user experience. The dark web, I think, is leading a lot of the transactional things. If you think about Shadow IT before cloud was popular, Shadow IT is what drove a lot of the cloud early adopter. Some are saying that the dark web, and cryptocurrency, and blockchain, token economics, actually is a leading indicator of what we might become. So the dark web might become the operational model. >> That's right. >> Because you just turn the lights on and say, hey, if this is so inefficient, why not just adopt this efficient market? Yeah, you can't track it but it's more efficient. So, again, that's a little bit provocative and a little bit radical, but, I mean, think about it. A lot of problems going on. Bitcoin certainly is a great way to clear that cash out. >> That's right. >> And cannabis sales in the US is driving a lot of Bitcoin as well. >> That's right. >> Moving money around. So, follow the money, you'll find the technology, is what I always say. So, your thoughts now on the business. How do you see the business shaping? What are you guys trying to do? What's the product currently? You got some venture capital. You got Wing VC. >> That's right. >> And Norwest too. >> Norwest Partners. >> Great firms. What's it like? How much did you raise? What are you looking to do? >> So, we raised around $9 million last year, and we are gearing up for our CDSP earlier next year. So we have actually made great progress, and I think that one of the biggest thing that we're getting from our investors is that, I mean, just like FireEye, we got into the business of all this multi-vector phishing at the early stage. So, we have an advantage of around two to three years, as compared to our competitors, right? And at the same time, they also know that we are not developing a niche enterprise product. There are four billion internet users and phishing is all of them problem. So just think about that, right? We just have a tiny customer base, right? But if you target all those internet users, it's going to be around seven billion internet users. >> So do you have a strategy laid out yet? It's going to be an enterprise business? You're targeting individuals? Have you had a clear visibility on some of the target beach yet? >> So next two to three years is going to be all enterprise, right? And we'll start with the Northern America and all that. Maybe a later stage, little bit of the international expansion. But, overall, if you see the road map, and we really want to make a great company. I never really started this company to at least sell it for $100 million. >> You probably made some good dough at FireEye, so. They take care of you? >> Yeah, yeah, of course. (John and Atif laughing) But I think the purpose was that, I mean, I have nothing else to do, right? I mean, and so I'm not a serial entrepreneur. It was never the purpose that I can sell something quickly. >> You want to build a durable company. >> I want to build a durable company, and all the VCs, they want us to build a durable company because they want really, want a big exit, right? But I think the roadmap that they're seeing is that, okay, you know what, you can start with enterprise, and then you can go into the consumer space. And then, I think the problem is huge. It's not something that you can only sell to enterprise, or you can only sell to consumer, right? Every internet user is a victim. >> Yeah, and I think there's an opportunity for a vendor to come, I mean, a supplier, to come out of the market. And I've always said to the Illumio guys, Alan Cohen, and a bunch of other venture-backed companies, that it's going to be a new company, a new brand, that will be the big player. Because if you look at the market share, no one company actually has dominant market share in cybersecurity. >> That's right. >> So you have thousands of flowers blooming, but no clear winner yet. And I think that's a function of throwing everything at cybersecurity, and the buyers are like, I'll take anything. I'm so desperate. So there's a huge factor of desperation. How do you see that being solved? Because it is a desperate market, because people, they can't play offense, they got to play defense, they got to protect. And so the perimeter's gone. Used to be the moat and the firewall switch. Now it's gone, the perimeter. >> Is gone. >> Is gone, and so now you have service areas off the charts. So how do you protect it? (chuckles) What do you see? >> I think we started with the device model, right? But I think now we moving towards the software and the endpoint business. And we really believe that you need to cover the remote user. I mean, you just barely spend eight hours in the office, right? So we are actually developing technologies that are going to target the remote users, and we going to target multiple type of devices and all that. So that's our next big thing. Off of the same cloud technology. Cloud you have already developed, right? Now you have to develop multiple form factors or multiple ways to actually access that cloud. >> Multi-factor authentication, not just two-factor authentication really is the key, biometrics, things of that nature. Google's got some stuff going on there. But I want to get your thoughts on the cloud. I mean, cloud obviously is something you, cloud's your secret sauce. >> A big part of it. >> Is it on Amazon, Google? Which cloud do you use? >> It's distributed between AWS, but the core of our logic is actually reside in our own data centers. The reason is that the kind of GPU power that we wanted, because we are rendering all these pages in realtime, right? So we never got that kind of GPU support from the off-the-shelf AWS, right? So we really built our own-- >> So custom GPU powerhouse? >> Yes. >> For all the floating point calculations. >> Yeah, because you have to run millions of browser instances. Can you imagine? We are running all these virtual browser, continue-- >> Why didn't you start a GPU cloud? It's another venture. >> Yeah, another venture. (John laughing) But I think that's the lead for that because AI and the metrics calculation is going to be the key, right? And they're adding support. But around 2014 to be really frag-a-mit, it look like a joke. That you can have hundreds of millions of browser getting up and down, getting up and down, in realtime, right? So we got a very customized cloud for that purpose, and that's actually barrier to entry for a lot of other vendors. >> Yeah, and I think the cloud provides you some good agility as well. And they have, Amazon's kicking butt, we love Amazon. Okay, so now on the future. Hiring, you got some people. What are the key priorities for you guys? Engineering, obviously. More and more engineering. >> Engineering. >> Technology's cognitive. What kind of skill sets are you looking build? Machine learning, AI? >> It's already based on the machine learning and AI because we're doing the natural language processing, computer vision analysis. Because you want computer to see things, what's being rendered on the screen, right? So we already have the technology. What we really want to do now is to make it accessible for a variety of customers. Not every customer wants a hardware device, not every customer wants endpoint solution, right? You need to order multiple form factors. So you want to use this cloudware endpoint? Okay, you take that one. Okay, you love hardware device, right? But, end of the day, you're offering your cloud service to other people. So, first of all, building more form factors and definitely more customer traction. >> I better ask you the question, 'cause I just love the entrepreneurial hustle. And congratulations on the startup and it's looking really, great space to be in, by the way. So it's super, super great. 10 years out from now, in your mind's eye, what's the preferred future look like in your mind? For your company and the outcome that 10 years from now. What's it going to look like? What's the state of phishing and security? If you're successful, if you achieve your mission, what happens? >> Okay, so, I think, I mean, it's kind of funny. Over success lies with the bad news, right? I think every tech landscape is changing. It's usually one train lost was seven to eight years, before it goes down and the bad guys move to the next train. I think this is the very first time they have started targeting humans viciously, right? The problem is that by the time you have a trained professional, the new people who are emerging in, right? I don't think, right, this problem is going to get solved any time sooner. We can't rely on the humans to train, to get trained. You can't really make a user a computer security researches, right? In my opinion, eventually technology has to catch up. In my opinion. So I think we have to keep innovating because hackers are going to find new methods, and we have to keep on catching up. And I think we'll be a phishing protection company in the next 10 years. Maybe adjacent product, but I think we really want to be focus on this. >> And social engineering, to your point, and tell me if you agree with this, it's been very successful for hackers. Social engineering has been the tactic. And there's a variety of forms of social engineering. >> That's right. >> Great, awesome. Well, good luck with everything. Thanks for coming on theCUBE. We have Atif Mushtaq, the CEO of SlashNext. Hot startup funded by Norwest Venture Capital and Wing VC, two good firms that we know very well. They know their tech. And, again, security. Great problem to solve. And if there's a big thing you want to go after and solve a big problem, it's security. It's theCUBE bringing you the theCUBE coverage here in Palo Alto. I'm John Furrier, thanks for watching. (triumphant orchestral music)

>> Announcer: Live from Nashville, Tennessee, it's theCUBE, covering Commvault GO 2018, brought to you by Commvault. >> Welcome back to Nashville. You're watching theCUBE at Commvault GO. Our first year at this show, the third year of the show. I'm Stu Miniman, my co-host, Keith Townsend. Happy to welcome to the program Chris Powell, who's the Chief Marketing Officer at Commvault. Thanks so much. >> Thanks, Stu. >> For inviting us to the Music City, and your party. >> We're glad to have you guys, thanks for being here. >> All right, so Chris, Commvault... I really like what I've seen at the show, so far. You made a statement that really resonated with me yesterday. You said, look, this is a 20 year old company, but it's very different than it was. We know cloud and AI and all these things are kind of changing. >> Yeah. >> Things like ransomware and GDPR are hot in the data world. When we look at our research, data is at the center of everything. So, you know, what's the brand of Commvault? If we think of a company that has lots of customers, but going through its own transformation, how should we be thinking of the company? >> I think what we're trying to do with Commvault is make sure that we, there's some times in marketing, where you end up in a place where it's either, it's perception is driving reality or reality is driving perception, and Commvault's in that transitional period where it's more about reality that we need to use to drive that perception, because there's some old perceptions. And as you said, in any company, especially in the tech space, that's 20 years old, you end up in a place where there's a lot of different perceptions of you from days gone by. Those can be about pricing. They can be about the usability of the products. The different technology innovations that you've had because you have such a long history, so we, sort of, need to continue to shift that and shape that as we go forward. For us, the Commvault brand has really evolved into Commvault is about being data experts and helping our customers be data experts. As you said, data is the new oil. Data, as we said at the show this morning, the new water, and it's definitely, sort of, this space where everybody's recognizing what's happening, but it's such early days in this world of data that's changing everything around us. >> Well, we have a friend of the program, Alan Cohen, that said, here's the challenge in IT, used to be that IT was the, always the no, and then you go to the procurement people and they're really slow. And, Chris, do you know what we need everybody to do? We need them to go. (laughs) I really like the branding of the show. Probably not where you came up with the term, but you've got 2,000 people here. The show floor, I've been to five or six thousand person shows that have a smaller expo hall here. You've got customers, with booths. You've got partners with booth. You know, Nashville's got a great energy. So, for people who haven't come here in person, give us a little bit about, why Nashville, what you hope to accomplish with the expo, the flow and then the show? >> Well, the why Nashville, and a lot of what we were trying to get with is, we've all been to probably one or two too many conferences in other cities, that we won't name here because I love those other cities too, but what we've done in our partnership with the Gaylord Hotels, which is a great customer of Commvault's as well, is trying to find just venues that are a little bit more interesting, and unexpected and different. That it was all part of the plan, as we were coming up with this, is to really project Commvault in a way that we believe, really, was more about our image. Towns like Nashville, last year we were in Washington, D.C., it's, they're great representations of what we're trying to do in the market. I was with people last night and they said so many people said they'd never been to Nashville, and this is a great town, and it really represents our brand well. >> So Chris, 20 years, 20 years of data. There's companies that are just waking up, realizing that they have this asset locked away in their, whether it's on tape, on media that's sitting aside in some random storage facility, but they have this asset that they can now unlock. What's the central message you want these customers to know about Commvault and your ability to help them to unlock that data. >> Keith, the... it's so true in that when you talk to people who are more on the data scientist side of things, it's this, it's this understanding that the... usually, the very well-paid data scientists struggle with just a couple of very basic things that they don't want to struggle with and it's not even what you pay them for. It's, can I get access to the data? Is the data all brought together in a form that I can really now serve it up, use it, get value from it? And as Commvault's been, sort of, developing and expanding our overall portfolio, it's really trying to address both of the issues of, if you're someone who's responsible for data in your organization, you have a bit of a challenge on an ongoing basis. You need to make sure the data is protected so it's secure. It's available when you need it. But it's also that you can serve it up and you can get value from it. The portfolio that Commvault's really been refining and introduced this past July, and continued to introduce things just this week, is made up of products that both enable the protection of that data but also serving that data up. The Commvault Activate product line and the portfolio that we're starting to introduce now is all meant to try to drive value out of the data. You're so right, in that, I was talking to some of our... we have a great expert in AI that's going to be with us tomorrow, Y.Y. Lee, who's also one of our board of director members, and she was just talking about how so many companies, as you've said, have locked that data away. It's not... it's not available to them and now they're bringing in these data scientists and their job is to try to find value in that data but they can't get access to that data. So this is a, this is a very straight-forward challenge that we're trying to help our customers with. >> Chris, I'd like you to take us inside your customers because when I think about five or ten years ago, backup, there was usually a storage person. It's like, okay, how do I have it? Do I have a backup window? Got to worry about recovery, something we would look at, but when you talk about data, you talk about data scientists. We're going up the stack. How do I use analytics and everything? Is this... >> Yeah. >> Is there a C.D.O. in my organization, worries about that? Governance and compliance are board-level discussions. So, bring us through where are you talking to the customers? Is there, kind of, the traditional customer, and the new customer? How'd that impact your whole field? It's a, it's a big, broad question. We don't have a ton of time but, yeah. >> Chris: Well, the way that I usually look at it is you can almost come at this from two different directions but you end up telling a very similar story. It's just almost the order of operation that you tell it. What I mean by that is, in the world of the folks who were really responsible for their virtual environment, their physical environment, and backing it up, you can talk to them about what they need and their desires in terms of the strongest backup and recovery, but then eventually you pretty quickly find yourself talking about a better understanding of what that data is so that you can apply your policies against it, so that you can show your compliance, and then eventually, to be able to serve that data up for more higher-value needs of your organization. And if you end up speaking to someone often, it's a more senior IT person in an organization or even all the way into the CEO's office. It's sort of just almost a different direction you go. It's you want to talk about how you can get value out of your data, and in order to get that value out of your data, you need to be able to understand truly what it is, where it is, who created it, who has access to it, and then eventually, you find yourself to: Is it protected? So it's a very similar story but if you go to a CEO and you start with backup, they don't really want to talk to you. And, if you go to a backup administrator and start talking about the value of data, they don't really want to talk to you. So, but what we've come to realize is that it's the same story, just told in a different direction. >> So talk... talk to us about bridging that gap. We're at Commvault GO, two thousand people, over 150 sessions, guys have been pretty clear this is an educational event. How did you help bridge the gap with such a large... difference of users? You have over five hundred partners attended the, the Partners Session. You have customers from the backup, admin, all the way up to the data scientists, and even executives that have to make these decisions. How does Commvault GO help bridge that gap? >> So, in a lot of ways, we use data so we're... we're as the old saying goes, eating your own dog food, kind of thing. We're using data from the previous conferences and always refining this. It's a... there's 182 Break-Out Sessions that occur over two days. There's, what we call, 30 and 30. It's 30 structured labs and 30 hands-on labs that you can, sort of, experience while you're here at the show. There's a lot of mini sessions, so there's the theaters that hold 120 people and then there's the theaters that hold 15 people. And through a lot of the technology of the shows now, the mobile apps, you can really refine what you want to experience at the show. The Meet the Experts Sessions, we have our developers here. The first year we did this, I wasn't sure how this would work, but we brought about, I think we brought about 10 developers for a Meet the Experts Sessions. The next year, we ended up bringing 20, and this year, we brought 40. 40 developers and engineers are here to have whiteboard sessions and just sit and talk to people. So, it's a... we've really divined, defined, sorry, this show in a way that looks at the audience first and, from a marketing perspective, I can tell you that when we came into this, nobody wants to be marketed to in this, in this industry. They, they want real information and what Commvault GO has been about is real information. It's, you talk about the reality driving the perception. Commvault is strong in reality. You know, it's, that's our reality. We just need to be able to communicate that and we use this show to make sure we're doing it, and not selling to people. We're here to provide real information. >> Chris, one of the things that actually surprised me, the portfolio is actually broader than I expected and part of that, you had quite a bit of hard news. What I mean by that, you announced quite a lot of products, everything from the ASA service through the Commvault Activate. >> Yeah... extended appliances. >> There's a whole lot of things there. We're going to have a lot of your, your team on to go through that, but give us what, when you, people walk away from the show, what you want them to know about Commvault, announcements. >> Yeah, so I think the big... there's so many different pieces, you're right, that have come from the show, very tangible, specific things, new product line around Commvault Activate, what you can utilize that... solution for, in terms of, understanding your data, things like, for sensitive data governance, then you get into the Commvault appliance and the extended appliance offering. We've taken the start of the appliance that was just in its initial forms last year at this time, at the last GO Conference, and then extended that this year with a larger appliance offering, as well as a smaller. And that's just a testament to how these things are being adopted in the market and the amount of customer uptake we're beginning to see on it. And then, when you look within our product portfolio, we've tried to make sure that some of our foundational products, like Commvault Complete Backup Recovery, that's been a big change for us recently. In terms of offering what we consider to be, and in terms of the name, the most complete backup and recovery solution, and what that was, is an answer to the market. Over the last 20 years, and it's not just Commvault, the whole market started to disperse their backup and recovery products. If you wanted backup and recovery, you had to go out and buy 10, 15 different products. You had to piece all these different things together, and what we realized is that what customers were really... longing for was something that really brought this together, so that they stopped spending all their time trying to figure out how to piece together a backup and recovery solution, and started spending more of their time about how to get value out of that data. >> As your CEO and COO said on the stage this morning, there's the difference between simple and smart, >> Chris: Yeah. >> And often, smart will end up being easier than, than doing this in part. >> Yep. >> Chris, I really appreciate you helping us to get a flavor for the show at the beginning. We've got lots more interviews to dig through all the product announcements, talk to the customers, talk to the partners. For Keith Townsend, I'm Stu Miniman, back with lots more coverage. Thanks for watching theCUBE. (light electronic music)

(upbeat techno music) >> Live, from Las Vegas, it's theCUBE covering VMworld 2018, brought to you by VMware and it's ecosystem partners. >> Okay, welcome back everyone, we're here live in Las Vegas for VMworld 2018 coverage. It's the final analysis, the final interview of three days, 94 interviews, two CUBE sets, amazing production, our ninth year covering VMworld. We've seen the evolution, we've seen the trials and tribulations of VMware and it's ecosystem and as it moves into the modern era, the dynamics are changing. We heard quotes like, "From playing tennis "to playing soccer," it's a lot of complicated things, the cloud certainly a big part of it. I'm John Furrier your host, Stu Miniman couldn't be here for the wrap, he had an appointment. I'm here with Dave Vallente and Jim Kobielus who's with Wikibon and SiliconANGLE and theCUBE team. >> Guys, great job, I want to say thanks to you guys and thanks to the crew on both sets. Amazing production, we're just going to have some fun here. We've analyzed this event, ten different ways from Sunday. >> So many people working so hard for such a steady clip as we have here the last three days, amazing. >> Just to give some perspective, I want to get, just lay out kind of what's going on with theCUBE. I've get a lot of people come up and ask me hey what's going on, you guys are amazing. It's gotten so much bigger, there's two sets. But every year, Dave, we always try to at VMworld, make VMworld our show to up our value. We always love to innovate, but we got a business to run. We have no outside finance, we have a great set of partners. I'm proud of the team, what Jeff Frick did and the team has done amazing work. Sonia's here's, the whole analyst team's here, our whole team's here. But we have an orchestrated system now, we have the blogging at SilconANGLE.com and Rob Hof leading the editorial. Working on a content immersion program. Jim you were involved in with Rob and Peter in the team, bringing content on the written word side, as fast as possible, the best quality, fast as possible, the analysts getting the pre-briefing and the NDAs, theCUBE team setting it up. Pretty unique formula at full stride right now, only going to get better. New photography, better pictures, better video, better guests, more content. Now with the video clipper tool and our video cloud service and we did a tech preview of our block chain, token economics, a lot of the insiders of VMworld, the senior executives and the community, all with great results, they all loved it, they want to do more. Opening up our platform, opening up the content's been a big success, I want to thank you guys for that. >> And I agree, I should point out that one of the things we have that say an agency doesn't offer, I used to be with a large multi national solutions provider doing kind of similar work but in a thought leadership market kind of, let me just state something here, what we've got is unique because we have analysts, market researchers, who know this stuff at the core of our business model, including, especially the content immersion program. Peter Boroughs did a bit, I did a fair amount on this one. You need subject matter experts to curate and really define the themes that the entire editorial team, and I'm including theCUBE people on the editorial team, are basically, so we're all aligned around we know what the industry is all about, the context, the vendor, and somebody's just curating making sure that the subject matter is on target was what the community wants to see. >> So I got to day, first of all, VMware set us up with two stages here, two sets, amazing. They've been unbelievable partners. They really put their money with their mouth is. They allow us to bring in the ecosystem, do our own thing, so that's phenomenal and our goal is to give back to the community. We had two sets, 94 guests this week, 70 interview segments, hundreds and hundreds of assets coming out, all free. >> It was amazing. >> SiliconANGLE.com, Wikibon.com, theCUBE.net, all free content was really incredible. >> It's good free content. >> It's great free content. >> We dropped a true private cloud report with market shares, that's all open and free. Floyer did a piece on VMware's hybrid cloud strategy, near to momentum, ice bergs ahead. Jim Kobelius, first of all, every day here you laid out here's what happened today with your analysis plus you had previews plus you have a trip report coming. >> Plus I had a Wikibon research note that had been in the pipeline for about a month and I held off on publishing until Monday at the show, the AI ready IT infrastructure because it's so aligned with what's going on. >> And then Paul Gillan and Rob Hof did a series in their team on the future of the data center. Paul Gillan, the walls are tumbling down, I mean that thing got amazing play, check that out. It's just a lot of detail in there. >> And more importantly, that's our content. We're linking, we're open, we're linking to other people's content, from Tech Field Day what Foskett's doing to vBrownBag to linking to stories, sharing, quoting other analysts, Patrick Moorehead for more insights. Anyone who has content that we can get it in fast, in real time, out to the marketplace, is our mission and we love doing it so I think the formula of open is working. >> Yeah Charles King, this morning I saw Charles, I thanked him for, he had great quotes. >> Yeah, great guy. >> He's like, "I love with Paul Gillan calls me." John, talk about the tech preview because the tech preview was an open community project that's all about bringing the community together, helping them and helping get content out into the marketplace. >> Well our goal for this event was to use the VMworld to preview some of our innovations and you're going to start to hear more from the siliconANGLE media, CUBE and siliconANGLE team around concepts like the CUBE cloud. We have technology we're going to start to surface and bring out to the marketplace and we want to make it free and open and allow people to use and share in what we do and make theCUBE a community brand and a community concept and continue this mission and treat theCUBE like an upstream project. Let's all co-create together because the downstream benefits in communities are significantly better when there's co-creation and self governance. Highest quality content, from highly reputable people, whether it's news, analysis, opinion, commentary, pontification, we love it all, let the content stand on it's own and let's the benefits come down so if you're a sponsor, if you're a thought leader, you're a news maker, you're an analyst, we love to do that and we love talking with the executives so that's great. The tech preview is about showcasing how we want to create a new network. As communities are growing and changing, VMware's community is robust, Dave, it's it's own subnet, but as the world grows in those multiple clouds, Azure has a community, Google has a community, and people have been trained to sit in these silos, okay? >> Mm-hmm. >> We go to so many events and we engage with so many communities, we want to connect them all through the CUBE coin concept of block chain where if someone's in a community, they can download the wallet and join theCUBE network. Today there's no mechanism to join theCUBE network. You can go to theCUBE.net and subscribe, you can go to YouTube and subscribe, you can get e-mail marketing but that's not acceptable to us we want a subscribe button that's going to add value to people who contribute value, they can capture it. That was the tech preview, it's a block chain based community. We're calling it the Open Community Project. >> Wow. >> Open Community Project is the first upstream content software model that's free to use, where if the community uses it, they can capture value that they create. It's a new concept and it's radical and revolutionary. >> In some ways were analogous to what VMware has evolved into where they bridge clouds and they say that, "We bridge clouds." We bridge communities all around thought leadership and to provide a forum for conversations that bridge the various siloed communities. >> Well Jim you and I talked about this, we've seen the movie and media. In the old school media days and search engine marketing and e-mail marketing and starting a blog, which we were part of, the blogging was the first generation of sharing economy where you linked to other bloggers and shared your traffic, because you were working together against the mainstream media. >> It's my major keyboard, by the way, I love blogs. >> And if you were funded you had to build an audience. Audience development, audience development. Not anymore, the audience is already there. They are now in networks so the new ethos, like blogging, is joining networks and not making it an ownership, lock in walled garden. So the new ethos is not link sharing, community sharing, co-creation and merging networks. This is something that we're seeing across all event communities and content is the nutrients and the glue for those communities. >> You got multi cloud, you got multi content networks. Making it together, it's exciting. I mean there were some people that I saw this week, I mean Alan Cohen as a guest host, amazingly articulate, super smart guy, plugged in to Silicon Valley. Christophe Bertrand, analyst at ESG, a great analysis today on theCUBE, bringing those guys, nominate them into the community for the Open Community Project. >> You know what I like, Dave, was also Jeff Frick, Sonia and Gabe were all at the front there, greeting the guests. We had great speakers, it all worked. The stages worked but it's for the community, by the community, this is the model, right? This is what we want to do and it was a lot of fun, I had a lot of great interviews from Andy Bechtolsheim, Michael Dell, Pat Gellsinger to practitioners and to the vendors and suppliers all co-creating here in real time, it was really a lot of fun. >> Oh yes, amen. >> Well Dave, thanks for everything. Thanks for the crew, great job everybody. >> Awesome. >> Jim, well done. >> Thanks to Stu Miniman, Peter Burris and all the guests, Justin Warren, John Troyer, guest host Alan Cohen, great community participation. This is theCUBE signing off from Las Vegas, this is VMworld 2018 final analysis, thanks for watching. (upbeat techno music)

>> Live from Las Vegas, it's theCUBE! Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. >> Welcome back to VMworld day three, continuing coverage for theCUBE, I'm Lisa Martin with Dave Vellante sporting this fantastic salmon tie, and what you can't see is the matching salmon pants. Dave- >> There ya go. I still have my voice. (laughs) >> The outfit game is on point, Dave. >> Thank you. >> So we've been here, this is our third day, this is a huge event, 25,000 or so people here, lots of great announcements. We're excited to welcome to theCUBE for the first time Mimi Spier the Vice President of the Internet of Things Business at Vmware, Mimi, it's great to have you! >> Thank you! I'm so happy to be here. >> Thanks for comin' on. >> Yeah, it's great. >> So, three action packed days, lot's of announcements, lots of momentum. You lead a team at VMware that launched the VMware IoT business about a year and a half ago, including, launching the product, the GTM strategy, the partner in marketing strategy. In the last year and a half, talk to us about the evolution of VMware IoT, the business challenges that you're helping customers to solve. >> Absolutely, so, this has been a journey for almost a couple years now, and, VMware saw a need to really start to look at what we'll call the edge or IoT use cases. Our customers started coming to us saying "Wait a minute, this is coming, I know my business units are starting to invest in IoT, I have no control over it, I have no exposure to it, what should I do?" And, we are really committed to being an infrastructure company, we knew that when started this journey, and we said "We really want to focus on infrastructure, but we want to help our customers go to the edge, really start to embrace this new opportunity in the industry, to be able to take advantage of this data." We call it, the data is the gold, how do you actually be able to take advantage of it? So, we're really excited, we just started the journey and now we've really this VMworld is where the momentum is starting to take off. >> How do you look at that opportunity? Because it's complicated, especially for a bunch of IT people, right? And now you're entering this world of operations technology. But how do you sort of look at the landscape of the market? >> I'm really glad you asked that, 'cause that's one of my favorite topics, so. I want our customers to think about, first of all, what are the mission critical objectives of their business? They shouldn't do IoT just to do IoT, they need to do what's right for their business; but I also think it's important that they look beyond that. So, if you look at some of the macro trends happening in the world today, there will need to be 70% more food that's created, and there's only 5% more land that it can be built on. There's going to be 300 million connected cars out on the roads There was a statistic that there will be two thirds of energy is consumed by cities, yet we still have very old ways of doing it, but it's in this very consolidated area; why would we not take advantage of that? So I think industries, whether you're in energy or you're in smart cities or you're in automotive, you have to really think about where is your industry going? And even IT people need to think about this, I think, and I'll explain why in a minute but, how can I actually create an industry and a company that can sustain in this future world, and also contribute to the future of what our world's going to be like. So I think, and the technology, and the way we set this up, and the architecture, is really the foundation to do that. So, that's where VMware comes in. >> Okay. And talk a little bit more about VMware's specific strategy as it relates to IoT. I mean I was at the big Dell announcement last fall. Okay, so you've got Dell sort of with existing relationships actually with a lot of the industrial giants. But now enter VMware, what's your strategy? >> So, first I want to say that Dell and VMware have come together into one big business unit to solve IoT and edge. And the beauty of that is we believe that our customers can really have a more simplistic way of achieving this infrastructure foundation, if we can offer these end-to-end solutions together; so I'll talk about how the Dell piece fits into the VMware strategy. But what VMware's trying to do is drastically simplify the complexity of the infrastructure and the foundation you'll need for IoT. So we want to extend what we're doing in the cloud and the multi-cloud, because we fundamentally believe most of our customers are actually in multiple clouds, private, public, multiple public, and actually be able to extend that down to whatever edge they need as well. Because of the amount of data that will be generated at the edge, there's going to be, I don't know, analysts say 50 to 75% of data will be generated at the edges of our business by 2020. And think about it, all of our applications today are in the cloud, so there must be edge computing that is local to be able to process that data. And there also needs to be, there's this heterogeneous set of devices that will need to be managed, monitored, secure, and collect that data; so this requires, it's complex, so we want to drastically simplify that and that's the overarching part of our strategy. But we also want to allow our customers to do it in a way that's secure, that's scalable, and that's manageable over time, so. >> So does that mean putting some, first of all the Dell partnership is interesting, and Alan Cohen one of our guest analysts this week said "Partnerships used to be like tennis, one-on-one, and now partnerships are like soccer." There's just so many parts of the ecosystem so that's sort of one observation, but. Are you sort of bringing VMware to the edge? Is that? >> We are, so we're bringing VMware to the edge, we announced a new portfolio of solutions called VMware Edge it will take advantage of the ability to do the compute edge which is the processing at the edge, and really extending our hyper-converge technology as a service, like we're doing for VMC on AWS, to the edge; and it includes our device edge, and there's a lot of things that is happening on the device edge, which is like gateways and things, that we want to help provide a more software-defined approach, as well as ensure that those can be managed, monitored, secure, across all the diverse set of devices. Now, you can't do that alone. The ecosystem you mentioned, I've never seen any in my history of my career the amount of collaboration that's going on across the ecosystem, because IoT is so hard; so, you really do need to collaborate. And we are collaborating with the IoT platform providers, the gateway and the thing providers, the hardware providers, the system integrators; it requires that to be successful. But what we want to do with Dell is do it in a way that we offer these end-to-end solutions so that it's just more simple, you can go to one place to consume it, to ensure that it gets deployed, and to actually support that solution, but offering it from a multitude of our partners, typically so. >> So let's dig into to simplicity because we hear that, Mimi, all the time, as you do too. Customers want choice, they want simplicity, right Dave? They want flexibility. >> They want it all! >> They want it all! We all want it all. But how is the VMware edge computing strategy, the technology level, actually facilitating simplicity, in what is inherently a complex world of multiple devices, multiple clouds, et cetera? Talk to us about the technology and the actual enablers of that simple approach they need. >> I'm so glad you asked me that! So, we've been saying very consistently, that we want to offer consistent infrastructure, consistent operations, but we want to give you the choice of your application platform or development platform. We're going to do the exact same thing at the edge. So everything that VMware customers experience in their private cloud, their SDDC solution, private cloud, public cloud, we are now going to offer as a service at the edge same infrastructure, same operational model as the HyperCloud model, but at the edge; with the choice of the application development tools that they would like, because, they might want Greengrass from Amazon, they might want the Azure, they might IoT Watson, whatever they want at the edge we want to be able to support that on our infrastructure, but still maintaining that simplicity of a consistent infrastructure no matter where you choose to run your applications. We want to just eliminate the even thought process, run your applications anywhere, on a consistent infrastructure, with the same management, the same operations, and move 'em around as much as you like. >> So is there an abstraction layer almost that this can enable so that that management of all of these different applications and development platforms can be really done seamlessly? >> Yeah, so Project Dimension we announced a tech preview, and, well we'll be launching it later this year, and it will have a management layer that allows you to move your infrastructure and be able to actually, actually it's a VMware managed solution, so we will do it for you, it's even more simple; but be able to choose where you want to run that appliance as a service or infrastructure, whether it be the public cloud, the private cloud or the data center, and the edge. So that is the new what you call extraction, it's almost a new dimension, no pun intended. >> Hence the name. >> Hence the name, of, across all of your different clouds, or edge. >> So the notes I had on dimension, a hybrid cloud control plane, and the end-to-end VMware stack, on-prem cloud at the edge. And I think I heard Lenovo, VMware, and Dell are the initial sort of platform providers. >> That's right, Lenovo, Dell is the hardware. >> And that, what's the consumption model, is that an as a service consumption model? >> So we'll start with as a service, and what that means is VMware will actually manage your hardware, your infrastructure, and your software, we will do it for you. Obviously with the collaboration of when to do it and if everything, because this could be at the edge running mission critical applications. We want to make sure the OT, it's really an opportunity for OT and IT to collaborate and ensure that it's meeting the OT needs as well. >> So it's bringing a cloud-like consumption model to the edge, which of course is huge for VMware, I think probably 10% of your business today is SaaS-based, and the trend is clear; and the trend is your friend as they say, but, it's not easy to necessarily get there. So that's exciting I think that you're delivering as a service. >> I think we got really lucky. We ended up with this hybrid cloud strategy, it was the right thing to do, it's absolutely where the market's gone, and we're now almost at a multi-cloud strategy. And that puts us at the perfect position because we have set up our customers to be flexible and be able to choose whatever cloud or private they want in a cloud, we are very easily able to extend that to the edge, so it puts us in a very good position. >> Talking about the ecosystem again, I mean IoT it's every industry, every sector, every size of company, and I want you to discuss an ISV piece of this it's a very complex situation. >> I would love to talk with ISVs. >> But there's so many ISVs it makes your eyes bleed when you look at the list of ISVs, hard to figure out, okay who's real, who's not, and who to partner with; how are you guys sorting all that out? >> Okay. So, we are the infrastructure, what is beautiful about that is we are not competing with ISVs at all, so they all want to work with us. And the ISVs in the IoT world consist of not only specific application providers, but also IoT platform providers. So it's the SAPs of the world, it's Microsoft, it's also the Bosch, the GE, everybody that wants to do something with that data and build applications it. Most of those are doing industry-specific things, so what we're going to do is take Project Dimension and we're going to offer appliances as a service for industry-specific use cases, and sometimes they're horizontal like building management, but we're going to pick the best ones that we think have the right solution that can scale to the level our customers need in a secure way, and doing the most rich experience with our data. In fact we have 15 different partners in our zone right now really showing what they can do across six different industries, and that's what we're going to do with them. We're also, with Pulse, so I need to talk a little bit about Pulse because it's my baby, we announced Pulse IoT Center 2.0. And what that is, is it's the ability to manage, monitor, and secure things, or IoT gateways. So, one example of that is surveillance, we are partnering with camera companies that also offer analytic applications for visualization and surveillance, and we offering an end-to-end solution. In fact we announced the Dell Technologies surveillance solution partnering with companies like Access Communications owned by Cannon, Pulse runs on the camera to ensure that that camera is working properly, hasn't been hacked into, can get patched, can get isolated, God forbid something happens; and we're doing the same thing across many of the device and thing providers as well, which really falls into that. >> Let's talk about- Sorry Mimi, let's talk about an actual customer. Where do they start in this conversation? Because as you were saying in the beginning, the world is going IoT, there's this proliferation of devices, companies are moving in this direction because they have no choice. We were talking with a school district yesterday and the proliferation of BYOD, all of the things. So where does the conversation start with a customer about VMware edge? Does it start with the business level leadership who need to be able to get a handle on this, and identify new revenue streams, new business models? Does it start with the technology folks who have to have the infrastructure to support it? What is that sort of, I'm a customer, maybe a hospital or what not, where do I start? >> Great question. So, it starts, it depends is the answer, it can start either way, even if it starts on the infrastructure side. What we always tell IT is that you really need to have a reason to do this. You need to work with your business, you need to prioritize, you need to understand the mission critical objectives of your business, the outcome you're trying to achieve; and then let's work together on a use case, and we can help solve it with your business. So, whether we go through IT and we really educate them on the importance of this digital foundation at the edge, and then we work with one of their businesses, maybe in security and surveillance, or maybe it's with a bank, the ATM group; actually there is a group that runs the ATMs and we're working with that group. It might be the bank of the future retail bank, and they're all different organizations with many different use cases, we'll work with all of them. The nice thing about starting with IT is IT understands the challenge that they're faced with, and they really want to have the impact that they've had on the IT organization now on the OT, OT's very siloed. So, anyway, it starts there, but, with our partners, and the beauty about working with partners like ISVs, it will start on the OT side, and it will start with a use case; and then they'll go to the IT side and say "Hey, what about VMware to solve this?" And the IT will say are you serious? That's a dream. So, it absolutely is both, but it has to have a business outcome. >> Mimi, how about the data model? I mean, we know from talking to IT people they understand data, they've lived data their whole lives. A lot of the operations side of the business is analog today, and it's becoming digital. What's the conversation like around data? >> So, okay, so my whole background is data, I started business intelligence and then analytics, and then big data, now IoT. The purpose of the data, so first of all it depends on the use case, so the one thing we like to educate our anyone we're talking to is that you are going to need deep learning, and you're going to need real-time analytics. And each use case will be unique, and depending on the use case, you will need a slightly different architecture. So we'll help support this foundation based on the data, it's always about the data, or actually even more importantly the insights you're trying to get from the data. Once you know your use case, then you can determine where am I getting this data? Although sometimes you already know. And what's the right analytic process? Am I doing machine learning, am I doing AI, am I doing just predictive analytics, do I want to do something quickly at the edge to determine something in real-time and then send it back to make that process smarter, that's actually what I think will ultimately happen, it will be a decision making loop that goes from the edge to the cloud and back. But that's the data conversation we have, and I could talk all day, just in that topic. (laughs) >> And I mean I know we're tight on time but, how prominent is the discussion around data ownership? I mean, does the factory own the data? Does the device manufacturer own the data? I mean yes and yes? I don't know. >> I mean, there is controversy there, but typically, I know the device manufacturers want to own the data, and often times they have access to that data. Every industry's slightly different, but at the end of the day, the customer should own the data, I mean they should at least have access to that data. And we will always say in our situation the customer, the data is yours. And we will work with the both of those organizations 'cause those will be our constituents to a use case, and we will do what's right for that use case, and hopefully everybody wins. It really does depend. If it's car manufacturer, they have to own the data, because they have to make sure that car's safe and secure, but there might need to be level of access that the consumers get as well, so. >> Mimi, thanks so much for stopping by. I can tell by your energy and your genuine passion for this, we're going to hear a lot more, Dave, about what VMware edge is doing and helping customers embrace the superpowers that Pat Gelsinger was talking about on Monday. Great to have you on the show, Mimi. >> Thank you for having me, have a great day. >> Thank you, for Dave Vellante, I'm Lisa Martin, you're watch theCUBE, continuing coverage of VMworld 2018, this is our third day, stick around, we'll be right back with our next guest. (bubbly music)