>> SiliconANGLE Media presents ... theCUBE! Covering AlibabaCloud's annual conference. Brought to you by Intel. Now, here's John Furrier... >> Hello everyone, I'm John Furrier, the co-founder of SiliconANGLE, Wikibon, and theCUBE. We are here for an exclusive Cube conversations at the Alibaba Cloud conference here in Hangzhou, China. We're here with Dr. Wang, who's the chairman of the Alibaba Group Technology Committee as well as the founder of Alibaba Cloud, here in the new Museum of Inspiration at the event. Thanks for spending the time with me. >> Thank you for coming. >> So before we talk about Alibaba Cloud and all the goodness going on here at the conference, talk about this Museum of Inspiration. It is new, and it has kind of a display theme. You kind of walk through time. What was the motivation and the inspiration for the museum? >> Yeah, I think the keyword for the museum, inspiration, is really the inspiration that started the museum. I would say that there's two, really the artists thinking about that. The first thing is really about when people, people take a lot of things for granted. One of the goals for this museum, it just shows the people they probably see every day. But just let them, just, wow, okay, that's different from what I thought. I think a lot of people take for granted, but it's really a great invention, a great human contribution to the whole society. I think that one thing is really about that people understand why we got here today. So that's the first thing. The other thing is really about science and technology. When people are talking about science and technology, people often will say, whether we can combine science and technology. But I don't think that's the right way to describe the relationship between science and technology. I would say science and technology, really the two sides of the coin. I really want to see, let people to see two sides instead of mixing together and got one thing. So that's two things that's parallel, just like zero and one. They are two things. When they're put together in a computer, amazing things happen. If you mix the zero and the one, like half something, then it's just not that fun. So I really want to make sure it's the museum of science and art instead of the mixture of science and arts. So that's the one thing. The other thing is really about the inspiration of future. Most of the museum is really about the past, to show how we have in the past, and with less on the inspiration to help people to think about the future. This museum is really, when we think about everything over here, we did talk about the past, but we want to make sure people think about the future. That's the whole idea about the museum. >> And the computer industry is fairly young, if you go back to modern computing. But you kind of have a take here about how technology really is embedded in life. Talk more about that impact 'cause that seems to translate to the conference here at Alibaba, that technology isn't just about the speeds and the feeds, it's about the integration into life. >> Yeah, and I think that from this museum we can see actually I trace back the origin of all the technology. When people are talking about the computer technology, I really want to talk about the computing technology. And then we can trace back, see actually the human is the first signal computing device. Our Mother Nature created for us. If you look at the same things differently, you really can see the origin of that. I think in this museum we talk about two really original things. The first is about the nature origin of the Internet. When talking about Internet, people talk about our current technological infrastructure of Internet. When you look at the human history, how is when people walk, you create an Internet for Earth? You can see a lot of things can trace back. Then, with this kind of trace back, you can help us to think about what's going to happen next. The trace of the original idea is actually very important if you're thinking about technology. >> Talk about the story of Alibaba Cloud. That is not, It's new, Amazon has had it for around, early 2000's. But you guys came right after Amazon, 2009. Still young and growing. How does the Alibaba Cloud take the culture of this inspiration? What are some of the design principles of the Alibaba Cloud? >> Actually I would say the Alibaba Cloud is different from the Amazon Cloud. In the sense we have different vision about the future. Unfortunately though, we are put under the same umbrella called cloud computing by media, I will say that. So we are different, in the sense when the Amazon, actually I show great respect to Amazon. When Amazon started cloud computing, they are really talking about the utility. They're talking about how to cut the cost down. So basically, they start with the low cost of IT infrastructure. That's what I understand. When I started Alibaba Cloud, we know that actually cost is important for sure. But we know that actually the computing part is more important than the cost if you're thinking about the big data era. We started with thinking it's the acentric cloud computing. When you look at our first brochure and we put those words over there. That's almost nine years ago. We called it acentric cloud computing. Instead of the IT-centric cloud computing. This actually, it's not just an idea difference. It's actually, eventually, influenced of the underlying technology infrastructure. Our whole underlying technological infrastructure is designed for the data, instead of just for the IT deployment. >> Jack Ma was talking about this industrial revolution, this digital transformation. What strikes me is you guys have that same art and scientist dynamic, art and science coming together, reminds me of the Steve Jobs technology liberal arts thinking that spawns new creativity. Certainly the iPhone is a great example of that as one of the many things. But now the new generation is coming together. You have a big artist focus here at the event. Music festival, not just technology. How is that part of the focus at the event here? What does that mean for new developers? >> I think it's really the crossing behind that. If you're thinking about technology and now e-commerce, what's really the one thing behind that that's really changed the way of peoples' lives? Computing in that sense, computing is not just technology. It's really something that changes the way of life of every people. I think the e-commerce change the way of life of every people. In that sense, they are the same. If you look at the peoples' lives, they won't just live on technology. They won't just live on the arts. They need a life, love means everything. By nature, we have to make sure as consumers, they need something more than just one thing. I think we are very lucky we understand that. If you're thinking about the young people, I will give you a few numbers about this conference about young people. In China, we have a very specific word talking about the young people a couple of years ago. We call the 'badiho'. It basically means the generation born of the '80s. When people talk about 'jodiho', that basically means people born after '90s. And then people talking about the 'leniho' it's basically people born after 2000. I think that most of the visitors for this conference are 'leniho', 'jodiho', and 'badiho'. These are all young, all young people. >> The digital culture. >> It's a digital culture. I would rather use my own word in the book I would say instead of digital. For me, digital generation is already an old generation I would say. I would like to call this the online generation. They do everything online. Even the last generation do a lot of things digital because digital is everywhere. But I want to emphasize it's an online generation. They do everything online. >> Dr. Wang, talk about data. You mentioned that's the key ingredient, the fuel for innovation. That's impacting the city brain project you guys are doing. Talk about the city brain and the role of data and how that's impacting the societal users out there certainly here in China, the traffic is crowded. This is just an example of what else is out there. >> Okay. City brain actually it's, again it means different things based on the perspective. One thing that's probably important is the data. This is first time actually I think instead of using the big data, it's better to using what I call the data results. It's a better word than big data. I think the one fundamental thinking for the city brain is we find a human army. Humans finally realize actually that data results is the most precious resource for the city, instead of land and water supply. Because we already know that the land is limited. The water supply is limited. This is very important. It doesn't view data as a non-essential thing. It's just a part of your IT system. We finally realize that data is part of the city instead of part of your city IT system. I think it's a leap frog thinking, at least for me. When it got to that, and you realize that today all the existing IT systems cannot actually really embrace the data. IT system is just to support the people doing the work they used to do. And then you realize we need an infrastructure to really make the value from the data. Just like we have water supply for the city, then you can use the reservoir. Otherwise, the reservoir is useless for the city. I think city brain is just like a water supply system for the data. The city eventually can consume that. We start thinking it's a new infrastructure for the city just like water supply system, just like power grid, just like any way system. That's how we're thinking about it. This is the first thing. The reason we got to the traffic system is this is the problem every city has around the world. From my yesterday's presentation, I just joked about we build two roads for the city, which is too many. I was thinking a lot of people realize it. That's why Boston had the project. They want to get all the roads under the surface. Under surface. But it's still a road. It's still expensive. You know how much money they spend just to move all the roads. >> The big dig, I remember, that was the-- >> Yes, that's a big dig. I don't think that's, that's good for the transportation system, but I don't think that's the number one way for the growth of the city. I think probably most of the city don't have the money to do that. What the data city brain wants to do whether we can take the resource of data and we can optimize every aspect of the city so we can use less resource to support city growth. When we start with the traffic, it's just to make sure, you know that when we use the data to optimize the traffic lights, the idea behind that actually we use the data to optimize the time. How to just read the time. It's not just lights. And then if you're thinking, when we show the eventually, if you have enough data, then we can have less roads in the city but still got the same. >> So the Internet of Things is the hottest trend. 0bviously machine learning and artificial intelligence are part of that, and the cloud powers this new edge of the network, and the data has to flow. So the question that a lot of technologists who are architecting these solutions ask is how do you make the data go at a very low latency? That takes compute power. That takes a lot of technology. How does Alibaba Cloud think about the architecture? Obviously you have a strategic partner like Intel, Obviously with a lot of compute power. You got to think differently around making the data move. If it's like water, it needs to flow. So real time is really important, but self-driving cars, real time is down to the millisecond, nanosecond. How do you think about that as a technologist? >> I think the, if you go back to the Internet of things, I think it's still the Internet. I would say eventually, if you're thinking about the word cloud computing and people use edge computing and people talking about Internet of things. For me, it's just the computing of the Internet. Cloud computing is the computing of the Internet and edge computing is computing on the Internet. Even the IoT is the computing of the Internet. If you're talking about the data, I think eventually it's really about the data on the Internet. It's not data on the sensor. It's not data on the cloud. Basically it's data on the Internet. I would expect eventually the Internet infrastructure will be improved significantly. It's not an improved cloud. It's not improved edge computing. Or it's improvement of the IoT. But it's really, >> Together. >> it's together. >> So Intel, I was covering them, Mobile World Congress earlier in the year. And obviously five G. You need the mobile overlay, that's super important. You also have the end-to-end inside the cloud. Obviously Intel is a strategic partner. Can you talk about the relationship you have with Intel? And also your philosophy, technically speaking, with the ecosystem? Because it's not just Intel, it's everybody. There's a lot of people here at this event. American companies as well as international companies who are now going to be part of your ecosystem. >> Actually the, we certainly have a very good relationship with Intel. I think we share in some sense the same vision. I think that the number one thing is really about people learning about how important the computing is. For me, the Intel is not that, a chip selling company. Intel is really the provider of computing power. That's what I understand. And we can expect eventually the whole ecosystem is really about who is going to provide the computing power. Who is going to provide the infrastructure to make the data? Instead of just equipment supply, eventually the need for computing, and the need for data, will be the challenge for every company, including Alibaba Cloud. We are not, we are not immune from these challenges. We will feel the same challenge. What we want to do is really make sure that with all these partners, provide enough computing for the next 10 or 20 years. We want to make sure that there's enough data flow for the next 10 years. In that sense, it's not the traditional ecosystem as like you do this and you do that. It's basically how we can work together to really make sure we have the challenge for the data and computing in the next 10 years. >> Yesterday we covered the news that you guys announced 15, building and R&D over the next three years, which is a lot of money. Also it has a very international and global view. Academics with younger folks. Alibaba Cloud is going to be a part of that, I'm assuming. I'd love to get your thoughts on how you see that intersecting. But the question for you is the cloud world today is moving at very, very fast speed. We're seeing Amazon, for instance, has been the best in terms of new announcements every year. Not one or two, like a ton of announcements, a lot. How are you guys going to continue to keep the pace? To move faster because the city brain is a great project, but it's going to have more evolution. It's going to move fast. How are you guys keeping up with the pace? >> I think the only way, that's not just for the next 10 years. Actually when I started Alibaba Cloud, we take the same philosophy. Actually the user moves very fast than us. If you look at the users in China they move very fast probably than anywhere else around the world. If you use the city brain project, I would say city brain project is basically tell the people, we need the computing power more than any other task. You really can see that. People want you. If you can't satisfy their demand, then somebody else is going to do that. It's not something we want to move fast but >> You have to move fast. >> You have to move fast. That's why the China is special. I want to say China is not just a place for the market. China is the place that pushes you to move faster. That's more important than market size. >> You mentioned data technology and information technology kind of transferring to a new world. Software is also a big part of it. Software you have to compute, obviously with Intel and the relationships you have. But software is growing exponentially. Certainly in open source, we see Cloud Native Foundation here. They'll probably have Linux foundation. Open source is going to grow exponentially. Most of the code will be shipping. But you have more data growing exponentially. Software is eating the world, but data is eating software. That means data is greater than software. If you look at it that way, that's super important. As the new architects, you and I were just talking about how we've in the industry for a while. You certainly have an amazing career from Microsoft now at Alibaba. A new generation of architects and developers are going to create new innovations around this dynamic of data. What's your advice and how do you view that if you are 21 years old again right now and you were going to jump into studies and academic and or field. It's a whole new world. >> I think there's probably two suggestions. Not necessarily for the young generation, but I would say it's just a suggestion for the young generation to push that habit. The first thing you mentioned about the data eats software. Well, I would put it in a different perspective. I would say for the last generation, the last two or three generations, I would say the computer era, we are really talking about the computer software. That's pretty much in everything. For this generation, I would say we are talking about computing plus the data. That box is not important, but the computing power is more important. For the computing era, the box is important. >> There's no box. It's the world, it's the cloud. >> That's one thing. The implication for this, I want the young generation to push is, then we need the new infrastructure. Thinking about the build as a great vision, got to have the computer in every home. That's infrastructure. Today when you are in the computing process data era, the infrastructure is not there. I think the vision for the Alibaba Cloud is make sure that we have this infrastructure for the next 10 or 20 years so the young generation can take advantage of that and to do that innovation and inventions, just like computing in every home. >> That's very important. I think that also speaks to businesses, how enterprises, I remember my first start up, I had to buy all this equipment and put it into the telephone closet. Now, start ups and small businesses don't need IT departments. This has been a big growth area certainly for Alibaba Cloud. But now all businesses might have a small closet, not a big data center. This is going to change the nature of business. So work and play are coming together. This speaks to the Museum of Inspiration theme here where you can have work and play kind of integrate but yet still be separate in that analog digital world. What's your vision on this new dimension of everything doesn't have to be just digital? You can have an analog life and mix it with digital. >> Actually I was always sad. It's not, the world never has just one side. It always has two sides. The difference is which side is important at a particular time. Just like when people talk about digital and analog, the analog will exist forever. It's hard for you to kill. The question is whether you can find the most beauty from the digital at the same time you can most beautiful part of the analog. I would say that the people, just like when talking about software, people still loved the hardware. And people still loved the touch. The digital has to make sure it looks good. Will it work versus it looks good? I would say we want to make sure people live in a world with two sides, instead of just giving them one side of the world. >> You mentioned people still love hardware. I always say, a car drives but there's still an engine, and people like to understand the engine. There's a maker culture in the United States that's been growing over the past two decades. And now even more accelerated is the maker culture because of the edge and how technology has become part of the fabric of life. How do you see that maker culture being enabled by more cloud services? Because anyone can make a skateboard or motorcycle or a computer or a device now. Powering that with the cloud is an opportunity. How do you view that? >> I would say that eventually, if we have the broad definition of a cloud, I would say eventually, everything the maker makes will be part of the cloud. When talking about clouds, we're really talking about Internet, so every hardware, every piece of hardware will be part of Internet. I would say, if you look at the evolution of the Internet, Internet, it's just a backbone at the very beginning. Actually the first revolution the Internet made is really to make sure that every piece of software is a part of Internet. That's how we got the world wide web. I would say when talking about the maker culture, I would say eventually that every piece of hardware will be part of Internet. So Internet won't be complete without the hardware. In that sense, the cloud is a really essential part of that. >> There's some really interesting things happening here in China that I'm excited about. One of them is the nature of the user base and how close you guys are to that. In the US a similar scale but it's kind of spread over a bunch of other cloud providers. But the interesting phenomenon as data grows exponentially, as software grows exponentially in open source, things are becoming more decentralized. Without talking about the whole initial coin offerings, I know China has banned it and Russia's going to ban it. Other countries are putting a clamp down on crypto currency. Putting that aside, there's still blockchain as a potential disruptive enabler. You're seeing decentralization becoming a new architecture dynamic because you have to support the growth of these devices at the edge. Distributive computing has been around for a while, but now a decentralized architecture dynamic exists. How do you steer that technology direction? >> You have to separate from the the distributive architecture versus its physical location. I would say I like the blockchain idea very much. I think eventually it would be part of the Internet. It's not just something that sits on top of the Internet. It would be very fundamental, just like TCP and IP. This is low level, so this would be part of the Internet instead of standing on top of the Internet. Eventually, in that sense, Internet would be very distributed. By thinking that it's nothing, there's no decentralization exists. You still need, even though physically, it's in one place. >> It's almost decentralized, not 100 percent. >> Yeah, yeah. Obviously this would be different. Without Internet, without new software, that basically, just like PC. PC is really in a single box, and we use all software in a box. We distribute architecture. We could have decentralized, but everything actually is distributed. You still cannot trace that. You put like a meeting. A service in a data center. It's actually distributed over this one meeting service. In that sense, it's completely distributed. >> That server list too is a big trend where if you talk about the edge of the network, you got to move compute to the data sometimes. Or have compute on the edge. So this is going to be continued growth, you see that as well right? >> Yes, but I still think, if you use Silicon as a measure for this computing power, I would say if you can see there's more silicon on the edge, but I would say when we put one silicon on the edge, you probably have to put 100 silicons on the cloud. It's still kind of-- >> It's a relationship. >> It's a relationship, just like our body is very important but the brain consumes the most oxygen. >> It's important what's in the cloud then. You got to have the computing, have those ratios. It depends on the architecture. >> Yes, yes. >> Final question for you is as the folks in Silicon Valley, where we're based, and Palo Alto want to know is Alibaba, what it means to them? If you have a chance to say a few things about what Alibaba Cloud is to America, what would you like to say? >> I would say that actually they would just put the cloud computing aside. Just look at what it really means behind that. I think the cloud, we do have an understanding of what the cloud computing really means. At the very beginning actually, I wouldn't call the company a cloud computing company. I would call it a general computing company. It's really a fraction of what's thinking in China. Again, my comment is not just to view China as the market to sell your product. To view China as the place to inspire having a new product. >> And it's a global world now, the world is flat. >> Yes, just like United States, it's not, it's a place inspired. All the people around the world together to have a new idea. I think the people in China just love new things. They love to try new things. It really can shoot your size of your innovation. >> And it's a global collaboration, it's interesting. That phenomenon is going to continue. You've done amazing work here. Congratulations on the Museum of Inspiration and the projects you're working on. Personal question for you. What are you excited about now? We kind of joke about how old we are now, but the young people certainly have a great future ahead of them. But you have a lot of experience and you're steering Alibaba's technology committee across the group as well as being the founder of the cloud. What are you excited about right now, technically speaking? What's the big, or just impact? What's the big wave that you like? >> I think it's very exciting in a couple of things, three things I would say. The first is really about just look at technology itself. Just like when I described my book, it's really, really exciting in your life if you can see the Internet plus the computing and plus data, cause they're together. Just like you have this engine, you have the airplane, a couple of things, they're together wherever. This is a very, very exciting era. This is not just about a technology era. It's an era that all things happen at the same time, so that's very exciting. That's one thing. The second thing as you read about the city around over here, I think the the Alibaba the Hanzo, it's just a very special for Alibaba, but I think it's special for the other company as well. So this place is very special. Just to give you an idea where you are, this area has the most networked river in the past. If you look at the map, it's like Internet. I would say, all the people over here, just their mindset. It's just on an Internet mindset. Even goes back 100, 200 years ago because the river is the only way for them to travel, for the communications-- >> That's the data back then. >> That's exactly my point, see. If you look at the map, so this is very exciting. The other thing about that the Alibaba, for me, the Alibaba you know Alibaba, we have a very broad opinions. You can feel that. From a technology point of view, that basically means it's the place you can touch every aspect of technology. You have a very slight, very-- >> You have a great surface area aperture to look at impact of life. >> So you think about these three things together. It's hard to say the, you better get excited. >> It's a great time to be in technology, isn't it? Entertainment, e-commerce, web services. >> For me, when I work on the city brain project, it's just the beginning of machine learning. A lot of people, they are fighting for like, when people talk about speech recognition, they are fighting for the last one meter for the speech recognition. But if you're talking about city brain, it's the world. The most big AI project. And it's just the beginning. We just start with the one percent. >> It must be a lot of fun. You got a lot of data to work with. You have real life integration. It's super exciting. When are we going to see you in Silicon Valley? >> I appear regularly to Silicon Valley two or three times every year. We'll probably see sometime early next year. >> Thank you very much for the time, appreciate it. >> Thank you for coming to the conference and coming to the museum. >> Thank you very much for your inspiration. >> Thank you. >> Thank you.

>> SiliconANGLE Media presents ... theCUBE! Covering AlibabaCloud's annual conference. Brought to you by Intel. Now, here's John Furrier... >> Hello everyone, I'm John Furrier, the co-founder of SiliconANGLE, Wikibon, and theCUBE. We are here for an exclusive Cube conversations at the Alibaba Cloud conference here in Hangzhou, China. We're here with Dr. Wang, who's the chairman of the Alibaba Group Technology Committee as well as the founder of Alibaba Cloud, here in the new Museum of Inspiration at the event. Thanks for spending the time with me. >> Thank you for coming. >> So before we talk about Alibaba Cloud and all the goodness going on here at the conference, talk about this Museum of Inspiration. It is new, and it has kind of a display theme. You kind of walk through time. What was the motivation and the inspiration for the museum? >> Yeah, I think the keyword for the museum, inspiration, is really the inspiration that started the museum. I would say that there's two, really the artists thinking about that. The first thing is really about when people, people take a lot of things for granted. One of the goals for this museum, it just shows the people they probably see every day. But just let them, just, wow, okay, that's different from what I thought. I think a lot of people take for granted, but it's really a great invention, a great human contribution to the whole society. I think that one thing is really about that people understand why we got here today. So that's the first thing. The other thing is really about science and technology. When people are talking about science and technology, people often will say, whether we can combine science and technology. But I don't think that's the right way to describe the relationship between science and technology. I would say science and technology, really the two sides of the coin. I really want to see, let people to see two sides instead of mixing together and got one thing. So that's two things that's parallel, just like zero and one. They are two things. When they're put together in a computer, amazing things happen. If you mix the zero and the one, like half something, then it's just not that fun. So I really want to make sure it's the museum of science and art instead of the mixture of science and arts. So that's the one thing. The other thing is really about the inspiration of future. Most of the museum is really about the past, to show how we have in the past, and with less on the inspiration to help people to think about the future. This museum is really, when we think about everything over here, we did talk about the past, but we want to make sure people think about the future. That's the whole idea about the museum. >> And the computer industry is fairly young, if you go back to modern computing. But you kind of have a take here about how technology really is embedded in life. Talk more about that impact 'cause that seems to translate to the conference here at Alibaba, that technology isn't just about the speeds and the feeds, it's about the integration into life. >> Yeah, and I think that from this museum we can see actually I trace back the origin of all the technology. When people are talking about the computer technology, I really want to talk about the computing technology. And then we can trace back, see actually the human is the first signal computing device. Our Mother Nature created for us. If you look at the same things differently, you really can see the origin of that. I think in this museum we talk about two really original things. The first is about the nature origin of the Internet. When talking about Internet, people talk about our current technological infrastructure of Internet. When you look at the human history, how is when people walk, you create an Internet for Earth? You can see a lot of things can trace back. Then, with this kind of trace back, you can help us to think about what's going to happen next. The trace of the original idea is actually very important if you're thinking about technology. >> Talk about the story of Alibaba Cloud. That is not, It's new, Amazon has had it for around, early 2000's. But you guys came right after Amazon, 2009. Still young and growing. How does the Alibaba Cloud take the culture of this inspiration? What are some of the design principles of the Alibaba Cloud? >> Actually I would say the Alibaba Cloud is different from the Amazon Cloud. In the sense we have different vision about the future. Unfortunately though, we are put under the same umbrella called cloud computing by media, I will say that. So we are different, in the sense when the Amazon, actually I show great respect to Amazon. When Amazon started cloud computing, they are really talking about the utility. They're talking about how to cut the cost down. So basically, they start with the low cost of IT infrastructure. That's what I understand. When I started Alibaba Cloud, we know that actually cost is important for sure. But we know that actually the computing part is more important than the cost if you're thinking about the big data era. We started with thinking it's the acentric cloud computing. When you look at our first brochure and we put those words over there. That's almost nine years ago. We called it acentric cloud computing. Instead of the IT-centric cloud computing. This actually, it's not just an idea difference. It's actually, eventually, influenced of the underlying technology infrastructure. Our whole underlying technological infrastructure is designed for the data, instead of just for the IT deployment. >> Jack Ma was talking about this industrial revolution, this digital transformation. What strikes me is you guys have that same art and scientist dynamic, art and science coming together, reminds me of the Steve Jobs technology liberal arts thinking that spawns new creativity. Certainly the iPhone is a great example of that as one of the many things. But now the new generation is coming together. You have a big artist focus here at the event. Music festival, not just technology. How is that part of the focus at the event here? What does that mean for new developers? >> I think it's really the crossing behind that. If you're thinking about technology and now e-commerce, what's really the one thing behind that that's really changed the way of peoples' lives? Computing in that sense, computing is not just technology. It's really something that changes the way of life of every people. I think the e-commerce change the way of life of every people. In that sense, they are the same. If you look at the peoples' lives, they won't just live on technology. They won't just live on the arts. They need a life, love means everything. By nature, we have to make sure as consumers, they need something more than just one thing. I think we are very lucky we understand that. If you're thinking about the young people, I will give you a few numbers about this conference about young people. In China, we have a very specific word talking about the young people a couple of years ago. We call the 'badiho'. It basically means the generation born of the '80s. When people talk about 'jodiho', that basically means people born after '90s. And then people talking about the 'leniho' it's basically people born after 2000. I think that most of the visitors for this conference are 'leniho', 'jodiho', and 'badiho'. These are all young, all young people. >> The digital culture. >> It's a digital culture. I would rather use my own word in the book I would say instead of digital. For me, digital generation is already an old generation I would say. I would like to call this the online generation. They do everything online. Even the last generation do a lot of things digital because digital is everywhere. But I want to emphasize it's an online generation. They do everything online. >> Dr. Wang, talk about data. You mentioned that's the key ingredient, the fuel for innovation. That's impacting the city brain project you guys are doing. Talk about the city brain and the role of data and how that's impacting the societal users out there certainly here in China, the traffic is crowded. This is just an example of what else is out there. >> Okay. City brain actually it's, again it means different things based on the perspective. One thing that's probably important is the data. This is first time actually I think instead of using the big data, it's better to using what I call the data results. It's a better word than big data. I think the one fundamental thinking for the city brain is we find a human army. Humans finally realize actually that data results is the most precious resource for the city, instead of land and water supply. Because we already know that the land is limited. The water supply is limited. This is very important. It doesn't view data as a non-essential thing. It's just a part of your IT system. We finally realize that data is part of the city instead of part of your city IT system. I think it's a leap frog thinking, at least for me. When it got to that, and you realize that today all the existing IT systems cannot actually really embrace the data. IT system is just to support the people doing the work they used to do. And then you realize we need an infrastructure to really make the value from the data. Just like we have water supply for the city, then you can use the reservoir. Otherwise, the reservoir is useless for the city. I think city brain is just like a water supply system for the data. The city eventually can consume that. We start thinking it's a new infrastructure for the city just like water supply system, just like power grid, just like any way system. That's how we're thinking about it. This is the first thing. The reason we got to the traffic system is this is the problem every city has around the world. From my yesterday's presentation, I just joked about we build two roads for the city, which is too many. I was thinking a lot of people realize it. That's why Boston had the project. They want to get all the roads under the surface. Under surface. But it's still a road. It's still expensive. You know how much money they spend just to move all the roads. >> The big dig, I remember, that was the-- >> Yes, that's a big dig. I don't think that's, that's good for the transportation system, but I don't think that's the number one way for the growth of the city. I think probably most of the city don't have the money to do that. What the data city brain wants to do whether we can take the resource of data and we can optimize every aspect of the city so we can use less resource to support city growth. When we start with the traffic, it's just to make sure, you know that when we use the data to optimize the traffic lights, the idea behind that actually we use the data to optimize the time. How to just read the time. It's not just lights. And then if you're thinking, when we show the eventually, if you have enough data, then we can have less roads in the city but still got the same. >> So the Internet of Things is the hottest trend. 0bviously machine learning and artificial intelligence are part of that, and the cloud powers this new edge of the network, and the data has to flow. So the question that a lot of technologists who are architecting these solutions ask is how do you make the data go at a very low latency? That takes compute power. That takes a lot of technology. How does Alibaba Cloud think about the architecture? Obviously you have a strategic partner like Intel, Obviously with a lot of compute power. You got to think differently around making the data move. If it's like water, it needs to flow. So real time is really important, but self-driving cars, real time is down to the millisecond, nanosecond. How do you think about that as a technologist? >> I think the, if you go back to the Internet of things, I think it's still the Internet. I would say eventually, if you're thinking about the word cloud computing and people use edge computing and people talking about Internet of things. For me, it's just the computing of the Internet. Cloud computing is the computing of the Internet and edge computing is computing on the Internet. Even the IoT is the computing of the Internet. If you're talking about the data, I think eventually it's really about the data on the Internet. It's not data on the sensor. It's not data on the cloud. Basically it's data on the Internet. I would expect eventually the Internet infrastructure will be improved significantly. It's not an improved cloud. It's not improved edge computing. Or it's improvement of the IoT. But it's really, >> Together. >> it's together. >> So Intel, I was covering them, Mobile World Congress earlier in the year. And obviously five G. You need the mobile overlay, that's super important. You also have the end-to-end inside the cloud. Obviously Intel is a strategic partner. Can you talk about the relationship you have with Intel? And also your philosophy, technically speaking, with the ecosystem? Because it's not just Intel, it's everybody. There's a lot of people here at this event. American companies as well as international companies who are now going to be part of your ecosystem. >> Actually the, we certainly have a very good relationship with Intel. I think we share in some sense the same vision. I think that the number one thing is really about people learning about how important the computing is. For me, the Intel is not that, a chip selling company. Intel is really the provider of computing power. That's what I understand. And we can expect eventually the whole ecosystem is really about who is going to provide the computing power. Who is going to provide the infrastructure to make the data? Instead of just equipment supply, eventually the need for computing, and the need for data, will be the challenge for every company, including Alibaba Cloud. We are not, we are not immune from these challenges. We will feel the same challenge. What we want to do is really make sure that with all these partners, provide enough computing for the next 10 or 20 years. We want to make sure that there's enough data flow for the next 10 years. In that sense, it's not the traditional ecosystem as like you do this and you do that. It's basically how we can work together to really make sure we have the challenge for the data and computing in the next 10 years. >> Yesterday we covered the news that you guys announced 15, building and R&D over the next three years, which is a lot of money. Also it has a very international and global view. Academics with younger folks. Alibaba Cloud is going to be a part of that, I'm assuming. I'd love to get your thoughts on how you see that intersecting. But the question for you is the cloud world today is moving at very, very fast speed. We're seeing Amazon, for instance, has been the best in terms of new announcements every year. Not one or two, like a ton of announcements, a lot. How are you guys going to continue to keep the pace? To move faster because the city brain is a great project, but it's going to have more evolution. It's going to move fast. How are you guys keeping up with the pace? >> I think the only way, that's not just for the next 10 years. Actually when I started Alibaba Cloud, we take the same philosophy. Actually the user moves very fast than us. If you look at the users in China they move very fast probably than anywhere else around the world. If you use the city brain project, I would say city brain project is basically tell the people, we need the computing power more than any other task. You really can see that. People want you. If you can't satisfy their demand, then somebody else is going to do that. It's not something we want to move fast but >> You have to move fast. >> You have to move fast. That's why the China is special. I want to say China is not just a place for the market. China is the place that pushes you to move faster. That's more important than market size. >> You mentioned data technology and information technology kind of transferring to a new world. Software is also a big part of it. Software you have to compute, obviously with Intel and the relationships you have. But software is growing exponentially. Certainly in open source, we see Cloud Native Foundation here. They'll probably have Linux foundation. Open source is going to grow exponentially. Most of the code will be shipping. But you have more data growing exponentially. Software is eating the world, but data is eating software. That means data is greater than software. If you look at it that way, that's super important. As the new architects, you and I were just talking about how we've in the industry for a while. You certainly have an amazing career from Microsoft now at Alibaba. A new generation of architects and developers are going to create new innovations around this dynamic of data. What's your advice and how do you view that if you are 21 years old again right now and you were going to jump into studies and academic and or field. It's a whole new world. >> I think there's probably two suggestions. Not necessarily for the young generation, but I would say it's just a suggestion for the young generation to push that habit. The first thing you mentioned about the data eats software. Well, I would put it in a different perspective. I would say for the last generation, the last two or three generations, I would say the computer era, we are really talking about the computer software. That's pretty much in everything. For this generation, I would say we are talking about computing plus the data. That box is not important, but the computing power is more important. For the computing era, the box is important. >> There's no box. It's the world, it's the cloud. >> That's one thing. The implication for this, I want the young generation to push is, then we need the new infrastructure. Thinking about the build as a great vision, got to have the computer in every home. That's infrastructure. Today when you are in the computing process data era, the infrastructure is not there. I think the vision for the Alibaba Cloud is make sure that we have this infrastructure for the next 10 or 20 years so the young generation can take advantage of that and to do that innovation and inventions, just like computing in every home. >> That's very important. I think that also speaks to businesses, how enterprises, I remember my first start up, I had to buy all this equipment and put it into the telephone closet. Now, start ups and small businesses don't need IT departments. This has been a big growth area certainly for Alibaba Cloud. But now all businesses might have a small closet, not a big data center. This is going to change the nature of business. So work and play are coming together. This speaks to the Museum of Inspiration theme here where you can have work and play kind of integrate but yet still be separate in that analog digital world. What's your vision on this new dimension of everything doesn't have to be just digital? You can have an analog life and mix it with digital. >> Actually I was always sad. It's not, the world never has just one side. It always has two sides. The difference is which side is important at a particular time. Just like when people talk about digital and analog, the analog will exist forever. It's hard for you to kill. The question is whether you can find the most beauty from the digital at the same time you can most beautiful part of the analog. I would say that the people, just like when talking about software, people still loved the hardware. And people still loved the touch. The digital has to make sure it looks good. Will it work versus it looks good? I would say we want to make sure people live in a world with two sides, instead of just giving them one side of the world. >> You mentioned people still love hardware. I always say, a car drives but there's still an engine, and people like to understand the engine. There's a maker culture in the United States that's been growing over the past two decades. And now even more accelerated is the maker culture because of the edge and how technology has become part of the fabric of life. How do you see that maker culture being enabled by more cloud services? Because anyone can make a skateboard or motorcycle or a computer or a device now. Powering that with the cloud is an opportunity. How do you view that? >> I would say that eventually, if we have the broad definition of a cloud, I would say eventually, everything the maker makes will be part of the cloud. When talking about clouds, we're really talking about Internet, so every hardware, every piece of hardware will be part of Internet. I would say, if you look at the evolution of the Internet, Internet, it's just a backbone at the very beginning. Actually the first revolution the Internet made is really to make sure that every piece of software is a part of Internet. That's how we got the world wide web. I would say when talking about the maker culture, I would say eventually that every piece of hardware will be part of Internet. So Internet won't be complete without the hardware. In that sense, the cloud is a really essential part of that. >> There's some really interesting things happening here in China that I'm excited about. One of them is the nature of the user base and how close you guys are to that. In the US a similar scale but it's kind of spread over a bunch of other cloud providers. But the interesting phenomenon as data grows exponentially, as software grows exponentially in open source, things are becoming more decentralized. Without talking about the whole initial coin offerings, I know China has banned it and Russia's going to ban it. Other countries are putting a clamp down on crypto currency. Putting that aside, there's still blockchain as a potential disruptive enabler. You're seeing decentralization becoming a new architecture dynamic because you have to support the growth of these devices at the edge. Distributive computing has been around for a while, but now a decentralized architecture dynamic exists. How do you steer that technology direction? >> You have to separate from the the distributive architecture versus its physical location. I would say I like the blockchain idea very much. I think eventually it would be part of the Internet. It's not just something that sits on top of the Internet. It would be very fundamental, just like TCP and IP. This is low level, so this would be part of the Internet instead of standing on top of the Internet. Eventually, in that sense, Internet would be very distributed. By thinking that it's nothing, there's no decentralization exists. You still need, even though physically, it's in one place. >> It's almost decentralized, not 100 percent. >> Yeah, yeah. Obviously this would be different. Without Internet, without new software, that basically, just like PC. PC is really in a single box, and we use all software in a box. We distribute architecture. We could have decentralized, but everything actually is distributed. You still cannot trace that. You put like a meeting. A service in a data center. It's actually distributed over this one meeting service. In that sense, it's completely distributed. >> That server list too is a big trend where if you talk about the edge of the network, you got to move compute to the data sometimes. Or have compute on the edge. So this is going to be continued growth, you see that as well right? >> Yes, but I still think, if you use Silicon as a measure for this computing power, I would say if you can see there's more silicon on the edge, but I would say when we put one silicon on the edge, you probably have to put 100 silicons on the cloud. It's still kind of-- >> It's a relationship. >> It's a relationship, just like our body is very important but the brain consumes the most oxygen. >> It's important what's in the cloud then. You got to have the computing, have those ratios. It depends on the architecture. >> Yes, yes. >> Final question for you is as the folks in Silicon Valley, where we're based, and Palo Alto want to know is Alibaba, what it means to them? If you have a chance to say a few things about what Alibaba Cloud is to America, what would you like to say? >> I would say that actually they would just put the cloud computing aside. Just look at what it really means behind that. I think the cloud, we do have an understanding of what the cloud computing really means. At the very beginning actually, I wouldn't call the company a cloud computing company. I would call it a general computing company. It's really a fraction of what's thinking in China. Again, my comment is not just to view China as the market to sell your product. To view China as the place to inspire having a new product. >> And it's a global world now, the world is flat. >> Yes, just like United States, it's not, it's a place inspired. All the people around the world together to have a new idea. I think the people in China just love new things. They love to try new things. It really can shoot your size of your innovation. >> And it's a global collaboration, it's interesting. That phenomenon is going to continue. You've done amazing work here. Congratulations on the Museum of Inspiration and the projects you're working on. Personal question for you. What are you excited about now? We kind of joke about how old we are now, but the young people certainly have a great future ahead of them. But you have a lot of experience and you're steering Alibaba's technology committee across the group as well as being the founder of the cloud. What are you excited about right now, technically speaking? What's the big, or just impact? What's the big wave that you like? >> I think it's very exciting in a couple of things, three things I would say. The first is really about just look at technology itself. Just like when I described my book, it's really, really exciting in your life if you can see the Internet plus the computing and plus data, cause they're together. Just like you have this engine, you have the airplane, a couple of things, they're together wherever. This is a very, very exciting era. This is not just about a technology era. It's an era that all things happen at the same time, so that's very exciting. That's one thing. The second thing as you read about the city around over here, I think the the Alibaba the Hanzo, it's just a very special for Alibaba, but I think it's special for the other company as well. So this place is very special. Just to give you an idea where you are, this area has the most networked river in the past. If you look at the map, it's like Internet. I would say, all the people over here, just their mindset. It's just on an Internet mindset. Even goes back 100, 200 years ago because the river is the only way for them to travel, for the communications-- >> That's the data back then. >> That's exactly my point, see. If you look at the map, so this is very exciting. The other thing about that the Alibaba, for me, the Alibaba you know Alibaba, we have a very broad opinions. You can feel that. From a technology point of view, that basically means it's the place you can touch every aspect of technology. You have a very slight, very-- >> You have a great surface area aperture to look at impact of life. >> So you think about these three things together. It's hard to say the, you better get excited. >> It's a great time to be in technology, isn't it? Entertainment, e-commerce, web services. >> For me, when I work on the city brain project, it's just the beginning of machine learning. A lot of people, they are fighting for like, when people talk about speech recognition, they are fighting for the last one meter for the speech recognition. But if you're talking about city brain, it's the world. The most big AI project. And it's just the beginning. We just start with the one percent. >> It must be a lot of fun. You got a lot of data to work with. You have real life integration. It's super exciting. When are we going to see you in Silicon Valley? >> I appear regularly to Silicon Valley two or three times every year. We'll probably see sometime early next year. >> Thank you very much for the time, appreciate it. >> Thank you for coming to the conference and coming to the museum. >> Thank you very much for your inspiration. >> Thank you. >> Thank you.

(gentle music) >> Hello, everyone welcome to "theCUBE's" live coverage here in San Francisco, California for VMware Explore not VMworld, it's VMware Explore. I'm John Furrier, your host of "theCUBE" with Dave Vellante. We're here with two sets. 12th year, Dave, covering VMworld, now VMware Explore, what a journey? I had a little reminiscing from Paul Maritz in 2010, who predicted the future but the timing was off. Raghu predicting the future, but is his timing right with multi-cloud or super-cloud? We're going to get into it. We got three days of wall to wall CUBE coverage, two sets. All the top execs from VMware coming on, including the CEO Raghu himself, Vittorio, Kit Colbert, the whole kit and caboodle of the executive group to talk about the future of VMware, where it's going, and of course the appearance of Hock Tan here from Broadcom, Dave, made an appearance. Michael Dell was also in presence. I get the vibe that there's something going on with Broadcom and VMware beyond just the acquisition. So a lot of people are curious. This event again is notable and historic from the sense of it's VMware Explore not VMworld, so they changed the name, and Broadcom's intent, and they're going to be buying VMworld. Dave, the keynote was anticipated by all, how it was going to go down, what was going to be said. Raghu set the table, I got a ton of notes, I know you do. What's your take? >> Well, you have to start with the Broadcom acquisition. You're right, Hock Tan was in the audience, he stood up, he got a little clap. >> Golf clap. >> He's paying $60 billion for VMware, he better be able to be recognized. And he was here yesterday with Michael Dell at the executive sessions. And their purpose I'm sure, they didn't let us in, but I'm sure the purpose was to make sure that customers were calm, they were comfortable with the direction. Of course, the narrative coming out of VMware is that, hey, they're investigating, they're going deep into our portfolio, and they like what they see, it's going to be all good, it's not going to be like the CA acquisition and de-levering and all that stuff. I still stand by what I wrote in my breaking analysis back in May. The fact is, Broadcom has promised $8.5 billion in EBITDA within three years. That's the only way they get there, is to cut, so that's going to happen. But the interesting dynamic in the market, I don't know if you've noticed this, VMware stock is trading at a 20% discount to what Broadcom is paying for it. So there's a big amount of fluff, if you want to do some arbitration. And I think it's due to the fact that it's a stock and a cash deal, it's a combination deal, and it's not going to close for a year. So there's maybe some skepticism around that. But that was an interesting dynamic. The keynote we'll get into it, but it's all around multi-cloud and what we call super-cloud. >> I have my conspiracy theories on Broadcom, actually they make chips. Looking at all the waves right now in the technology industry, silicon is hot, anyone who's doing custom silicon and putting software on the chip, making purpose built vertical applications is seeing performance gains in cloud and in these applications. So one, I'm really excited by the dots connecting there. But also the VMware story, Dave, is pretty interesting in the sense that timing's everything, the Broadcom acquisition, EBITDA focus might drive behavior. But notable for VMware, is Raghu has been on this vision for years. I remember in 2016 when I interviewed him with Andy Jassy, who was then the CEO of AWS, they had moved everything to Amazon Web Services. And that was the beginning of the vision of multi-cloud and cloud-native. VMware invested a ton, and so we're seeing some fruit come off the tree. If you will, bearing some fruit from that VMware investment in cloud-native across the board which was their bet prior to Broadcom buying them out. So the question is, does Broadcom harvest that, continue that nurturing of that "plantation of goodness" that could come out of that VMware? And again, it's probability, it's not guaranteed. Commentary on Twitter is pretty heavy on, can they win the Devs? Can the new Ops bringing around the front? So, VMware's and Broadcom in a tough position, they bought more than they thought in my opinion. And I think a lot of people are saying, does Broadcom recognize the strategic value of what's coming out of the oven, so to speak, or what's blowing off the tree from VMware? And is it real? That is the number one question. I talk to people in the hallway, that's what they're saying. They want to know what's going to happen with what's around the corner, that's on top of mind of everybody. >> It's a really important question because VMware's future is multi-cloud management, what we call super-cloud. And without Tanzu, and I speculated that Tanzu was probably going to be under the microscope and potentially on the chopping block because they spend a lot of money marketing it, but they're probably not today getting a lot of returns. But without Tanzu, without a cross-cloud PaaS we sometimes call a super PaaS. their strategy doesn't work, it basically fails. And I think what a lot of people are missing, and I saw you chime in on Twitter, is can they win the Devs? Can they win the Devs? This is table stakes. If you don't have a cross-cloud PaaS, and it's really about not necessarily just the Devs, it's about the ops, right? Because now it's about security. Yes, shift left, but shield right. But the DevOps team, the Ops team needs consistency. It's like Adrian Cockcroft says, the Devs, they love to get married, the Ops, they got to clean up after the divorce. And so they need standard- >> You're implying that they'll use any tool for the job and not really worry about lock in. And I think today on the keynote, Deshaun was up there who submitted a comment, "You kids have it easy these days." Implying us old guys, when we coded, you had to do everything yourself. Kelsey Hightower mentioned her support pack desktop edition. The old days when had to build everything by hand, now it's all automated, all goodness. But in all seriousness, the focus there was DevOps has won, DevOps is what the developers are doing. The developers are in the clear right now, as far as I'm concerned. They're sitting on the beach right now, sunglasses on, sun shining, everything's shift left, CI/CD pipeline, cloud-native goodness. If you're a dev, things are much rosier than an Ops person. So DevOps is developer, security and DataOps, is where the action is. So it's not so much IT operations as it is security and data leveling up to the velocity demand of developers and also ease of use. So self-service in the motion of coding, in the pipelining, that's what the developers have to have. And if people don't build that experience from the upside, the new ops is not going to enable the develop, it won't be adopted in my opinion. >> You mentioned Paul Maritz before, his whole thing was any workload, any cloud, the software mainframe, they're talking about any Kubernetes, any cloud. And we got to go through some of the announcements real quick here. VMware Aria is the new multi-cloud management platform. That is the fundamental strategy for going cross-cloud or what we call super-cloud. The vSphere and vSAN 8 are big deals. And as relates to compute with vSphere, they're really pushing that whole DPU. You might remember Project Monterey. Well, Project Monterey is essentially like AWS Nitro, it's the future of computing architecture seven years after AWS introduced it. So AWS has a huge lead here. But it's critical that a company like VMware is able to offer that capability with XPU optionality, GPU, CPU, Arm based, Pensando capabilities, eventually NPUs, other capabilities to bring in and support new workloads, new data driven workloads. So the lot of talk about the whole DPU thing. As I mentioned, Tanzu new version of Tanzu, they talked about edge. They're basically bringing VMware to the edge with an eventual consistency model. >> Hold on, the vSphere thing, just to jump in there real quick. I always thought that that'd be higher up in the keynote. Clearly in the keynote, they flexed their cloud-native positioning, they had to address the Broadcom thing, talk about modern applications. So it felt like they were selling the dream on the front end. And they buried the lead in my opinion, which is vSphere 8. They don't do a lot of vSphere 8 announcements. If you look at the history of VMworld, every few years they got a new release. This was packed with a lot of goodness. And I thought they'd buried that in the keynote. >> I don't know, Raghu mentioned it. Yeah, they had a lot to cover. And then the other thing was they announced support for Red Hat OpenShift. So everybody's like, "Ooh, wow." And then Tanzu for all the Kubernetes versions from the cloud guys. So a lot of announcements, you got to always give VMware props. It's not like they stopped engineering, they have a great engineering culture. And so it's nice to see Project Monterey in particular, go from R&D to actual product. And so we like to see that. >> Even towards the end, now that we're doing the keynote review, Raghu said, "As proud as we are," this is when they started talking about the sustainability, implying they're real proud engineering, and that's a good call out there. I think that's what were trying to get across to Hock Tan, who was sitting in the front row. But Dave, in terms of keynote, my analysis is clear. Raghu was nervous, you can tell. But he's a product guy, he even said that on stage. He set the table at the beginning, I thought really well with modern applications. He had to address the name change, and I thought that was interesting. He actually said, "We built a community with VMworld, but now with multi-cloud, we're going to recall it Explore." Not sure I agree with that. I think VMworld community is still vibrant, and that's why they're here. So I thought that was nice, the way he balance that out, the messaging is good, the graphics and the branding of Explore is world class, I think it's phenomenal. I'm not a big fan of the name change, but I never go well with change there. Hock Tan didn't speak, he did stand up and wave. >> There's no way he's going to get up to speak. >> He didn't speak. So I thought that was interesting front end, so they got that right out of the way. And absolutely you saying last night. And then they got into this digitally smart concept, which I thought was on point. Did not like the great replatforming message. I'm not a big fan of that because it reminded me of the great resignation. And I think there's going to be a lot of memes on that. So not a big fan of the great replatforming. I did like the Cloud Universal pitch. But this whole multi-cloud pitch seems to me, and I want to get your thoughts on this, is that that's what it reminded me of, Paul Maritz. So when Raghu is clearly betting the ranch on multi-cloud, the question is timing. Paul Maritz in 2010 here at VMworld Moscone, he laid out the vision, he was right. But timing was off, the top of the stack didn't materialize. But at the end of the day, ended up being the right architecture. Is VMware too early with multi-cloud, Dave? And that's the question, that's the question on the table. >> Well, so a couple things. So Maritz, the one mistake Maritz made was he really tried to go into apps, remember? So now at least I think Raghu, the current VMware thinking is, we're going to enable apps to be developed. And that is the right thinking. Are they too early or too late with multi-cloud? I think technically it just wasn't feasible, the customers weren't ready for it. VMware moves at the speed of the CIO we like to say. So I think the timing is actually really good because the technical capabilities are now there. You've got to have across-cloud paths, which Tanzu is about. And I think Tanzu was too immature before. They've got the pieces on the DPU side. And the other thing about the timing is now with Broadcom acquiring VMware, the whole non Dell ecosystem has got to be a lot happier. NetApp, guys like that, Cisco. >> Why is that? >> Because Dell, their thumb on the scale, they had the thing rigged, Dell was first in line for everything. When EMC owned VMware, that was the case. But they were required about it, Dell made no concessions. And they just came out and said, "We are going to be VMware first, we are the preferred partner, we do more business with anybody." They really drove a truck through that. And I think it caused a lot of the ecosystem to pull back, like HPE and others to say, "Okay, we're going to find some alternatives here." Now they can really lean in. It's like when HP broken two, that really changed the ecosystem posture with HPE. This is like that, but times 10. >> What did you think about the ecosystem floor last night? When I did a walk of the floor, I thought it was very vibrant, it was not a ghost town at all. >> No, not at all, we saw Alibaba Cloud was there, we saw a lot of- >> AWS. >> Smaller companies >> Microsoft. >> And so I thought it was better than I thought it would be. There's probably what, 7,000 people here I would say? So well off from the 15,000 pre-COVID highs, but still very robust, it's a good crowd. People are excited to be back in person obviously. And I think the messaging was right, John. I think cross-cloud, multi-cloud, super-cloud, that is the future. Well, David Floid took a stab at it and said, "I think it's going to be $100 billion market by the end of the decade." >> Super-cloud is a thing for sure. And I think that came out in Aria announcement, which was basically a rebranding. It's not a new product, essentially it's a cobble together management platform. I thought the Cloud Universal notes here were interesting. The Cloud Universal is the commercial cloud smart component. Meaning they're trying to make that the frame, Dave, for the hyperscalers to come in to a de facto consortium movement. I feel like that's next here. If this Cloud Universal could become the super-cloud consortium, that might give them a better shot. The ecosystem is buzzing, attendance is strong. It's interesting a lot of people were speculating, will this be an event? I thought they did a great job and I thought they came through well with this. >> You were saying about consortium, because have to have the cloud guys in any consortium. But is any one cloud going to drive it? VMware could be- >> AWS >> Could be the driver. >> I'm thinking if I had to make a prediction, looking at what I just saw in the keynote, we'll see what the VMware execs say, If I had to make a guess, I think you're going to have customers, "Let's still double down on VMware stuff." They're going to settle into vSphere and networking compute and storage, the normal stuff that they've got, the software to find data center core as a cloud operational platform. And then you're going to see a lot more AWS migration. You might see that if Broadcom doesn't nurture the fruit coming off the tree, as we mentioned earlier, I think you might see people go more cloud-native. But I think VMware's prepared for that with the hybrid. So it's going to be very interesting to see. I think the winners coming out of this will be AWS, maybe a little bit of trickle into Azure, Alibaba mostly for the European, I mean the China side. But I don't see them playing. Google is a wild card, we'll see it from them. >> I think the other big thing about the timing, to your earlier point is, VMware used to go to market with very bespoke, We got vSAN, we got NSX, we got vSphere, and now they're trying to bring that together. And essentially remember, they used to go to market and say, "Okay, hey, your ELA is up, time to renew." And they're talking to the wrong people. So now they're going forth with the Azure service model, they're going to move to a subscription model. And I think the timing is right for that. I would've liked to see it a little bit before hand, maybe pre COVID would have been better timing. But I think technically, the time is right now for that. >> And I think looking at the acquisition, speculating on that, I think let's discuss how we see things, how they might move forward. Again, we'll ask the guests as much as best as we can and the best they could answer. But let's take this forward. Okay, based upon what I'm seeing here, if I'm Hock Tan in the audience, I'm saying to myself, "Okay, I got more here than I thought I was buying." Maybe I thought I was getting some great EBITDA. I wonder if his outlook changed on how he goes to market with the new VMware post acquisition. So that means in the around February timeframe, I would probably, if I was advising him to say, "Okay, let's keep it as is, let's not do the cut, cut, cut. Maybe trim a little bit here and there." But for the most part, he's got the solid customer base and he's going to have to keep the event. >> Here's the problem with that. They have a very high do-say ratio. They do what they say they're going to do. And as a result, they've promised 8.5 billion in EBITDA within three years out of VMware. And they return 50% of their free cash flow to investors. If they break that promise, their stock will get crushed. I don't think they're going to break that promise. So I think they're going to run. That's something I believe in their playbook that they're not going to change. Now, could they get there without massive cuts? I think it's going to be hard. Can they get there with price increases? Yes. And better efficiency, yes. But they don't have a lot of go to market synergies, John. Broadcom doesn't have a big sales force that they can say, "Okay, we're going to fire all the VMware sales force and you're going to go to market through our channel." Like Oracle would do with their big sales force or a Dell would do with an acquisition, they can't. And so I just don't see how they're going to around it. The only other thing I would say is, to me, I thought the application development piece, the Tanzu piece was very appropriate. And I think they got it. Whether or not they're going to succeed there, we can debate that. But I thought what was missing was there wasn't enough, in my opinion, on their security posture, their security strategy. I thought they gave it lip service with, "Oh yeah, we're going to shift left and dev security, et cetera." They did not go in depth. I think when you talk to someone like Tom Gillis, who really can go deep, I think talking about Barry and the lead, that was not, security is the number one issue of CIOs, CSO. >> Data and security >> At boards, it's number one. And data is the second thing. And those two stories in the keynote where quasi non-existent or/and weak. >> Again, the reason why I believe, and you're discussing it publicly at a high level, is super-cloud is real because it's not just SaaS on cloud, it's hybrid, it's DevOps, it's developer. And security and data operations are just absolutely now leveling up, and the edge is a complete wild card. We met a company last night, they're doing the edge cloud. The edge is going to open up all kinds of new use cases and challenges. And that's on the DataOps, data security side. DevOps, IT operations is already in the dev cycle. If companies aren't doing that, in my opinion, they're not really doing it right. So I think it'll shift to security and Ops and DataOps, that's going to be the action. In the cloud operational framework, that's super-cloud. To me, if I'm Hock Tan, I'm saying, "VMworld, VMware Explore, VMware has to be a core component of super-cloud of the future. Not multi-cloud just a state." I think multi-cloud will be a description of a state, of an architecture, and an outcome, but that's not super-cloud, that's not a functioning operating system, that's not a functioning business driven technology. So I think VMware has the opportunity. So I look at that and say, I got cheap options all the way up to the top of the stack. And super-cloud paths layer, as you describe, that I think is the way to go. >> When you think about how VMware got here, VMware was a $13 billion trailing 12 month revenue company. There aren't a lot of $13 billion software companies. And the way VMware got here, is through great software engineering. They identified problems that the customers had and they went and solved them. They did it with virtualization, they did it with private cloud, they figured out their public cloud strategy. So I think the question for Broadcom is going to be okay, how fast can we monetize that engineering? Can we turn that engineering R&D into dollars? And how fast can we do that? They have two choices in my opinion, keep innovating, which of course we hope that's the case, or act like a private equity firm and just squeeze as much cash out of VMware as possible. Which I don't think would be the right strategy because eventually that says, okay, what's going to happen to Broadcom? How are they going to continue to grow? Are they're going to have to just keep growing through acquisitions? So I think R&D is a really good spend when it's VMware. >> And I think as we wrap up our keynote analysis, one of the things that's going to come out of this as the conversation, no doubt in my mind will be, VMware isn't CA. And the question is, does Broadcom go off their playbook with VMware because of the fact that you look at the sponsorships for the show, we got a robust set of sponsorships for "theCUBE." With two sets, we're booked, fully loaded. Conversation's high, the floor is all about next level cloud operations. This is not a dying market, this is a growth wave coming. So the question, as super-cloud becomes that growth, and everyone's talking about super-cloud there. Some people who don't like the name, which is good, keep grace debate. But there's no doubt that that next wave is the super-cloud philosophy, the super-cloud mindset and architecture, and development environment. And we've documented that on supercloud.world if anyone's interested. But that wave is coming, and you can see it on the floor. Look at the sponsors, look at what people are talking about, Dave. This is not like Broadcom buying VMware and tucking it under and saying, "Okay, hope we can service the customer." There's a real market growth here story. So the question is, what do you do with that? >> Well, so you start with the base. VMware is a very good platform. The reason why they don't have a ton of competition and the reason why, okay, Nutanix can maybe trickle some away, but VMware is really good, it works, it's stable, it recovers from failures, it's got a super strong ecosystem. So you start by building there and then you identify the places where you can spend a dollar and make it 10. >> Well, I was very excited that when we had our super-cloud event, which was a virtual event as a test, we had great VMware support. And a lot of the catalog sessions up here, on Moscone West, where we're sitting, upstairs is all the sessions, they're crowded. And they overlay, Dave, with our narrative and the industry narrative. On the influencer side, you're starting to see the influencers meeting our editorial and pursuing a super-cloud with VMware and their ecosystem. Kind of agreeing super-cloud is real. And I think that is an important note because just last December, when we coined the term at Reinvent, I think it was Reinvent look what's happened. I want to get your thoughts and your reaction to why super-cloud has got so much traction, it's a great buzz with the name. But why is it that our super-cloud, the VMware, and the ecosystem are all aligning with this? Why do you think that's happening? Why do you think that the momentum is accelerating? >> The reason is that, as everybody knows, organizations have multiple clouds, it's a function of shadow Devs, M&A. And so they end up with all these different clouds, all these different projects, different primitives, different APIs, different tool sets. And they called it cloud chaos today. It's accurate, it is cloud chaos. So what's the problem with that? Well, that makes it harder to secure, it makes it harder to govern, it makes it harder to share data, it creates data silos. What's the answer? Well, if you can create a layer that's an abstraction layer that simplifies all that cross cloud data sharing and development and have a consistent set of APIs through a PaaS layer, we call it super PaaS and you are going to have a metadata intelligence that says, "Okay, I'm going to put this here or put that there. And I'm going to deal with latency, I'm going to optimize for whatever purpose, data sharing, or performance or whatever it is." You're going to solve a lot of problems. And you're going to make the CIO's life easier so that they can invest in their own business and their digital transformation and their digital strategy. So that's why people agree. They might not agree with the name, but they certainly agree with the concept of that abstraction layer. >> The name is certainly a better name than multi-cloud, multi-cloud sounds broken. But I think CIOs and CXOs, CISO, CSOs have to get buy-in from their teams. The organic dev relationship with Ops and SecOps and DataOps has to be symbiotic, not conflicting. And I love the chaos story because as Andy Grove, the legend at Intel once said, "Let chaos reign and then reign in the chaos." >> Chaos is cash. >> So in any innovation inflection point, chaos becomes the complexity, abstraction layers, and or innovation takes that complexity away. This is the formula for success. And I think VMware is right in the middle of it. And I think if I'm looking at VMware right now, I'm saying, hey, reign in that chaos right now and you win. So chaos is not a bad thing if you can reign it in, Dave. >> And that's what they've done. You think about what they did with virtualization, it was chaotic, it was wasteful. I think of what they did with private cloud. They said, "Hey IT guys, we're going to help you not get cloudified. We're going to cloudify your presence on-prem and not just throw everything into the cloud." They did a great job there. And now it's all about multi-cloud. >> Well, we're going to reign in the chaos, extract the signal from the noise. Super CUBE here at super-cloud event VMware Explore. Dave, great to kick it off again. Again, 12th year of CUBE coverage. It seems like a lifetime, Dave. Just yesterday we were 2010 >> Amazing, right. We've been in Moscone South, we've been in North, we've been in Las Vegas. Now we're here West, first time in west. >> Some of these developers were in elementary school when we started "theCUBE" here, I was just feeling old relics. Anyway, we're going to bring more action, three days of coverage, thecube.net, check it out. Join our community, join the conversation. As the influences are coming more onto the market, you're seeing a lot more conversations on Twitter, on LinkedIn, on the internet, check it out. Join the conversation. I'm John Furrier and Dave Vellante. We'll be back with more coverage here in San Francisco after this break. (gentle music)

>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Despite a mixed bag of earnings reports from tech companies, negative GDP growth this past quarter, and rising inflation, the cloud continues its relentless expandtion on the IT landscape. AWS, Microsoft, and Alphabet of all reported earnings, and when you include Alibaba Cloud in the mix, the Big 4 hyperscalers are on track to generate 167 billion in revenue this year based on our projections. But as we said many times on theCUBE, the definition of cloud is expanding and hybrid environments are becoming the norm at major organizations. We're seeing the largest enterprise tech companies focus on solving for hybrid, and every public cloud company now has a strategy to bring their environments closer to where customers workloads live, at data centers, and at the edge. Hello, and welcome to this week's Wikibon CUBE Insights powered by ETR. In this Breaking Analysis will update you on our latest cloud projections and outlook. We'll share some fresh ETR data and commentary on what's happening in the hybrid zone of cloud. Let's start with the market data for the Big 4 hyperscalers. In this chart, we share our Big 4 cloud share for IaaS and PaaS for 2020, 2021, and the first quarter of 2022, and our estimate for 2022 full year and growth. Remember, only AWS and Alibaba report relatively clean IaaS and PaaS figures, whereas Microsoft and Google, they bundled their cloud infrastructure in with their SaaS numbers. We both firms, however, they do give guidance and we use survey data and other tidbits to create an apples to apples comparison, and that's what we show here. For the quarter, the Big 4 approach to 37 billion in revenue as a group. Azure's growth rate is reported by Microsoft but the absolute revenue is not. Azure growth accelerated sequentially by 49% to just over 13 billion in the quarter by our estimates while AWS's growth moderated, sequentially, but revenue still hit 18.4 billion. Azure, by our estimates, now is more than 2/3 the size of AWS's cloud business. Google and Alibaba are fighting for the bronze medal, but well behind the two leaders. Microsoft's Azure acceleration is quite remarkable for such a large revenue base, but it's not unprecedented as we've seen this pattern before with AWS. Nonetheless, the fact that Azure is growing at the same rate as GCP is quite impressive. Now, a couple of other tidbits of information. Amazon, its stock is getting hammered today because of inflation and slowing growth rates at the top line. But AWS continues to beat Wall Street's expectations. A look at Amazon's operating income this quarter tells the story. Amazon overall had operating income of -3.66 billion and AWS's operating income with 6.5 billion. AWS's operating margin grew sequentially from nearly 30% last quarter to 35.3%. That's an astoundingly profitable figure. This is comparable to insanely profitable companies like Oracle and Microsoft. These are software companies with software marginal economics. Is that level of sustainable? Probably not for AWS, but it's eye opening, nonetheless. ETR survey data shows why these companies are doing so well with customers. This chart shows the net score granularity for the Big 4 cloud players. Net score, remember, measures spending momentum by asking customers, are you adopting new? That's the lime green. Increasing spend by 6% or more, that's the forest green. Flats spend is the gray. Spending dropping by 6% or worse is the light pink. And the red is decommissioning the platform. Subtract the reds from the greens and you get a net score which is shown on the right. Anything, by the way, over 40% we consider highly elevated. Now some key points here. Microsoft includes its entire business in this chart, we are including, ETR is including Microsoft's entire business, not just its cloud. Its Azure-only net score is 67%, higher than even AWS's, and that's huge. Google Cloud, on the other hand, while still elevated is well behind the two leaders. Alibaba's data sample in the ETR survey is small and China has had its foot on the neck of Big Tech for a while so we can't read too much into a net score of 26. But notice the replacements in red across the boards single digits for all and low single digits for the two giants, 1% for Amazon and Azure. Very impressive. Now the other really telling reality check is CapEx spending on cloud. CapEx spend tends to be a pretty good indicator of scale. And Charles Fitzgerald who runs the Platformonomics blog spends a fair amount of his time on this topic and we borrowed this chart from a recent post he did, and then we put in some estimates of our own. It shows CapEx spend over time for five cloud companies, the Big 3 US firms that we just talked about, plus IBM and Oracle. And it's always astounding to me to go back to the pre-cloud era and look at IBM. They were in a great position prior to 2006 to really dominate this notion of as a service and the transition to what is now known as cloud. But they really couldn't get their head out of professional services and their outsourcing business. There was some conflicts there as well. And so, you know, IBM you see is that dark blue or black line and spent significantly more than the others way back when, not anymore. Charles is kind of a snark. He loves to make fun of our super cloud concept even though I'm confident it's evolving and is real. But his point above in this chart is right on, the Big 3 US players spend far more on CapEx than IBM and Oracle. He states that Oracle's uptick in CapEx spend puts them past IBM, but the two of them are battling to distance themselves and differentiate from the X-axis. Funny guy, Charles. In its recent earnings report, Amazon stated that around 40% of its CapEx goes to infrastructure and most of that goes to AWS. It expects CapEx to grow this year and around 50% will go toward infrastructure. So we've superimposed our rough estimate of where AWS lands when you subtract out all of Amazon's warehouses for retail. And once again, Microsoft is notable because unlike Amazon, it doesn't have a zillion warehouses to ship products to consumers. And while Google spending is massive, it's mostly on servers to power its ad network. But there's no question that GCP can leverage that infrastructure and the tech behind it, and it does. And by the way, so can everyone else, by the way, leverage all this CapEx spend. We're going to come back to that and talk about super cloud in a moment. Okay, let's close by looking at the ever-expanding cloud landscape. This chart shows a two-dimensional view of the ETR data for cloud computing. On the vertical-axis is net score or spending momentum, and in the horizontal-axis is pervasiveness in the data set. It's like market share within the survey, if you will. The chart insert shows the data for how the dots are plotted on each axis. The red dotted line at 40%, remember, indicates a highly elevated position with net score and significant spending momentum. And the green arrows show the movement for some companies relative to three months ago. Okay, so Microsoft and AWS, they're kind of circled way up in the right-hand corner, very impressive. Just to reduce the clutter, we're not showing AWS Lambda here and some other highly elevated services which would push up, ticked up AWS's net score but it's still really, really good. As is azure, they're both moving solidly to the right relative to last quarters survey. So gaining presence in the data set and presumably in the market as well. Google is, as we've said, well behind and has much work to do. It was announced this past week that the head of sales at Google Cloud, Rob Enslin, is leaving to join UiPath, so some interesting news there. We've highlighted the hybrid zone. Now to the theme of this Breaking Analysis, the ever-expanding cloud, AWS announced that it's completed the launch of 16 local zones in the US and there are 32 more coming across 26 countries. Local zones basically bring cloud infrastructure to regions where there's a lot of IT that isn't going to move. And for proximity and latency reasons, they have to move closer, move the cloud closer, the cloud operating model if you will, closer to the customers. And there's that CapEx build out showing its head again. Now the reason this hybrid zone becomes interesting is you're seeing the large enterprise players finally go after the hybrid cloud in Earnest. It's almost like the AWS outposts announcement in 2018 was a wake up call to infrastructure players like Dell, HPE, and IBM. It took a while, but Oracle is kind of skipping to its own tune, but they're in that hybrid zone as well. IBM had a really good quarter and the Red Hat acquisition seems to be working to support its hybrid cloud strategy. Now VMware several years ago clean up its fuzzy cloud strategy and partnered up with AWS and everyone else. And you see VMware Cloud on AWS doing well as is VMware Cloud, its on-prem offering. Even though it's somewhat lower on the X-axis, based on that green arrow was showing relative to last quarter. It's moving to the right with a greater presence in the data set so that we see that as a positive sign. Now, Dell and HP are interesting. Both companies are going hard after as a service with APEX and GreenLake, respectively. HPE, based on the survey data from ETR, seems to have a lead in spending momentum while Dell has a larger presence in the market, naturally, as a much bigger company. HPE is climbing up on the X-axis, as is Dell, although, not as quickly. And the point we come back to often is the definition of cloud is in the eye of the customer. AWS can say, "No, no that's not cloud." And the on-prem crowd can say, "Ooh, we have cloud too." It really doesn't matter. What matters is what the customer thinks and which platforms they choose to invest. And I'll close by circling back to the idea of super cloud. You are seeing it evolve and you're going to hear more and more about it. Yeah, maybe not the term, many don't like it. We're going to continue to use it as a metaphor for a layer that leverages the CapEx build, the gift that the hyperscalers are providing the industry. This is a real opportunity for the likes of Dell, HPE, IBM, Cisco, and dozens of other companies providing compute and storage infrastructure, networking, security, database, and other parts of the stack. By hiding the underlying complexity of the cloud, dealing with all the API and primitive muck, creating singular experience across on-prem, across clouds, and out to the edge is a definite need from customers. This is a new battle that's shaping up and it's going to be expensive to build and it require an ecosystem cooperating across this API economy, as some like to call it. It's going to have to do that to make it a reality. Now there's a definite, as I say, customer need for this common experience, and in our view, we're seeing it manifest in pockets today and in strategies and in R&D projects, both within startups and established players. Okay, that's it for today. Thanks to Stephanie Chan who helps research Breaking Analysis topics. Alex Myerson is on production and he also manages the Breaking Analysis podcast. Kristen and Martin and Cheryl Knight get the word out on social. Thanks to all, including Rob Hof, our editor in chief at SiliconANGLE. Remember these episodes are all available as podcast wherever you listen. All you got to do is search Breaking Analysis podcast. Check out ETR website at etr.ai. We publish a full report every week on wikibon.com and siliconangle.com. You can email me directly at david.vellante@siliconangle.com, or DM me @dvellante or comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights powered by ETR. Have a great week, stay safe, be well and we'll see you next time. (upbeat music)

>> From around the globe, it's theCUBE, with coverage of KubeCon and CloudNativeCon Europe 2020 virtual. Brought to you by Red Hat, the Cloud Native Computing Foundation and ecosystem partners. >> Welcome back I'm Stu Miniman. And this is theCUBE coverage of KubeCon CloudNativeCon 2020, the Europe virtual edition. Happy to welcome back to the program, fresh off the keynote stage, Priyanka Sharma. She's the general manager of the CNCF. Priyanka, thanks so much for joining us. Great to see you. And we all get to be together even while we're apart. >> That's absolutely right. Thank you so much for having me Stu and great energy in the interwebs today with my keynote and everybody engaging and attending KubeCon. So, very happy to be here. >> All right, so I want to dig into your keynote a little bit. I had a bunch of key themes, a lot of pieces, and of course, community at the heart of it. When I spoke with you when you first took the job, of course, you've got strong background, you know this community really well. We've loved covering it for the last five years, but you talked about the foundation of doers and how that's powering the end user driven open tour. So talk to us a little bit about that, how is this community different from everything else. You know, open source always is community, but this feels a little bit special. >> Well, I'm glad to hear you say that, it is special. Yes, so when you think about the Cloud Native Ecosystem, right? There's so many people who've come together to create this amazing field that we all get to create. The awesome technology that people use to be part of this whole technology creation and deployment process. Those people are the end users first and foremost, they utilize the technology every day. And as time has grown, as time has gone by, they have played a bigger and bigger role. Over time they've become very sophisticated, they're contributing their own projects such as you know, I mean, you all know Envoy and a Jaeger came from Lyft and Uber respectively, but there's many more like Spotify and Wayfair, the furniture company. They have all submitted projects for the sandbox. So there was a lot of momentum, but not only are they creating their own technologies very needed and donating them. They're becoming the guider. They're becoming the guidance for the project that exists. They're giving feedback, they're sharing requirements. It's a very collaborative process and that's what is end-user-driven open source. Now this end user-driven-open source cannot happen by one contributor alone by one maintainer or alone by one company. No, it takes a lot of people. I mean, CNCF, as you know, has invested in its global community since day one. That's why we have the KubeCon EU, we have China events, we have North America. And just the other day I was speaking on a virtual Brazil event. There's just the geographic diversity is amazing. And by being able to reach out to a very large ecosystem and by especially having a formal role for end users, by having an end user member program with their own special interest groups and working groups, we've created a safe space where there is a neutral IP zone, open governance, and also a clear directive and shared partnership with the end users. So that ends up being a large group of people who are all doers, everybody's collaboration matters, and together they create end user-driven-open source. >> Well, Priyanka, I'm not sure that that most people understand really the full charter of what the CNCF does. So maybe you could talk a little bit about, obviously there's all the projects involved. You just brought up some of the end users and how you get engaged. There's also help along career development, when you talk to the individual developers and participants. So help us understand beyond the big events that we gather people at any given time with the smaller events, just, you know, what the CNCF its charter as these days. >> Absolutely, so as some of you know, the CNCF stands for Cloud Native Computing Foundation. And our objective is to host and proliferate technologies that support development, infrastructure development that is cloud native. Now what does cloud native mean, cloud native is when you develop, when you utilize cloud computing, which is the big clouds you must have heard of such as, Alibaba cloud, AWS, Google cloud platform, Azure, IBM, all these hyperscalers. They provide these offerings by which you don't need to have your own server farm, and you can buy compute from them and run your applications on that. When you do that, the way you develop software changes, it should change in order to maximize the value you get. So you started developing with micro services, containerization happens once that happens you need to orchestrate the containers, which is where Kubernetes our founding project comes in. And then you go from there because you have different complexities and observability, you have different complexities and storage and all the cloud native tech comes together to support you in that journey. So from a technology perspective that's what we do. As we have been so fortunate to develop this large ecosystem that so many people joining in of all kinds, we believe it is part of our responsibility to support this community in skill development and always like knowledge sharing. So knowledge sharing community empowers education. And that's how we talked about the events, right? Like KubeCon et cetera. But also these days, we are focusing a lot on our programs with the certifications we offer such as a CKA, which stands for a Certified Kubernetes Admin and CKAD, which stands for Certified Kubernetes Application Developer. To date, 15,000 plus people have taken these certifications successfully. So we have more and more people joining in these ranks. And we are here to support people as they build their careers, as they get more knowledgeable on cloud native, from in formal ways, such as training edX and in informal ways, such as KubeCon and the Meetups and the Webinars, you name it, and we're here for you. >> Well, you used a word that I want to touch on, responsibility, obviously in 2020, there's a lot going on Priyanka. So first of all, you talk about the global pandemic. Some of my favorite interviews I've done for this shows and others talking about how open source and communities are contributing to it. One of the interviews I have coming up for the KubeCon show is out of the Pronto area with how's my flattening, which uses data and visualization, really phenomenal to see how, you know, Kubernetes and collaboration allowed people to rally fast and share data and get information from the right people. The other piece is social justice. You announced a new working group for racial terminology, talk about, how's the CNCF dealing with, all the changes and all the things that are happening in 2020. And how are you helping the community get engaged and participate? >> Absolutely. 2020s is a very unique year. It's had very unique challenges. We've all been through it out together as a global community. So in that way, it has brought us all together, but the fissures and cracks that maybe were overlooked before have gotten deeper this year. And we are committed to bringing the open source cloud native way to help support this full global push to overcome 2020 as a year. (laughs) So part of that as you said, we have a working group to eradicate racially charged tech, sorry, I am really not speaking well to that. So part of our initiatives is a working group to eradicate racially charged terminology from code we're working on it, not just on the CNCF level, but on the entire Linux foundation level, by bringing together various folks, such as companies projects, regardless of where they stand, they don't need to be an LF project or a CNCF project, but we're sharing best practices on What should be the terminology we agree upon? What is the change management look like? And soon we want to really encourage the people who are making these positive steps with and enablement and incentive programs, such as prizes, et cetera. So I'm very committed to this. I think anyone and everyone has a home in open source. This cannot be, you know, the take ground of one type of person or one type of community. And we're going to do our very best to welcome each and every one. This world of technology has been built by the blood, sweat, and tears off many people, and we honor them all. And we also open our arms to more and more of you, no matter how few of people from your ecosystem or community you see in open source, join in, we welcome you.. we are here for you and this working group and this initiative hopes to voice exactly just that. >> Well, yeah, the KubeCons absolutely. I can speak from the event I've gone to, you know, strong diversity. We've really appreciated being able to hear those voices. When you talk about the collaboration, the community activity, we'd love when we can help support those from our team's standpoint, when we can, we want to be able to help those nonprofits, help those communities get their messages and do their call to actions. All right, Priyanka so much to cover. This week when I look at all the breakouts, when I look at the interviews and the technologies, there's a lot of emerging themes also in edge computing has been something we've been talking about for the last year or two, of course, IOT, DevSecOps, what are some of the hot technologies that you're seeing and making sure that the show covers. >> Well, you send them all. (laughs) No, but these are the key themes. Yes, absolutely. As you know, devices are proliferating across the globe. So many people have cell phones, with the coming of 5G things will be even more rocket ship. And these folks need to go cloud native to support development as this change happens, and Kubernetes and CNCF is here to support. We have projects such as KubeEdge. We have k3s from Rancher and the sandbox, all these are meant for edge deployment. So there's that focus that we have. There's always going to be DevSecOps. The minute there is this complexity, the minute there's this growth, new security vulnerabilities, pop up, new interfaces become exposed. And so we have to be on a constant watch. So DevSecOps is a theme that we are going to see a lot of innovation and development in. For anyone who may not be familiar with DevSecOps, DevSecOps does for security, what DevOps did for operations, which is shifted left into the application developers workflow, so that things have got faster so that there is a better collaboration between security teams and application development team. So these are absolutely trans, I think a trend we briefly touched upon is, end-user-driven open source. I think the voice of end users is going to grow bigger and more louder and just that much more critical. The ship has left the dock. And now it's just going to gain steam and gain steam. I think we're going to see more technology contributions from them. We're going to see much more utilization of cloud native from them. And we also will get lots of feedback and advice from them. And there'll be interwoven into the fabric of cloud native in a way like never before. >> Yeah, Priyanka, you've known this community, but now you're very steeped into it. You had to work with a lot of people. I'm curious, does anything, especially from those end users, you know, a big focus of what you've been talking about. Absolutely, it's so important that they not just use the technology, but are participate in it. It's been one of those big waves we've been watching in the open source community for a number of years. So any insight you can give us as to why it is so important to those end users, what is encouraging them, not just to, use these projects, but, you know, assigned people and sponsor events and have much deeper integration with this community. >> They don't integrate with this community. They are part of this community. That's one key thing to remember. I would say, when we all, like, I mean, CNCF is relatively young, it started end of 2015. I started working on a project in it in 2016. And back then we were talking about things like, what are microservices? How to do a lift and shift to the cloud, or what are containers, things like that, right? And there was maybe a bit of a gap in the knowledge that people had to acquire to get good at deploying containers, that's using microservices, et cetera, et cetera. Now, in the last four years, huge leaps have been made by an users just because they were in the trenches, they were doing the work, right? So now their knowledge level has gone really up. And they've also started like knowing where the gaps are, what they need, because they're doing the building, they're the doers here. And so in that environment, it is a natural thing that they will have the best sense of where things should go next. They will have the best sense of what their own requirements are. And so it's an evolution of the end user community. It's an evolution of the doers. And I think that's why this trend is going to continue. And I would like to take like, not a credit, but I would say a tiny shoutout to the CNCF ecosystem program, which is run by Cheryl on my team. She's done a phenomenal job having been a developer herself to bring people and create safe spaces where the enhancers or the vendors are not like necessarily breathing down their neck and they can discuss amongst each other, the topics that matter. And I think that's gone a really long way. >> Yeah. There's, Cheryl's been doing some great work. I know I'm having a conversation with Liz Rice to talk about some of the new pooling, helping customers understand. It's such a broad ecosystem out there that, you know, we didn't even touch on. We're going to talk in many of the other interviews I have Priyanka. There's so many projects, new ways for sandbox and incubation and everything like that. It is definitely a challenge for everybody to look at this space. Want to give you the final word though. What do you want people to have as their takeaway from the event this time? >> Absolutely. Hi everybody. I am so happy. You all took the time and engaged with the community you joined in and attended KubeCon EU virtual, stay with us, partnering with us, come to our events, give us feedback, share ideas. We're all a foundation of doers. We're all team cloud native, and we're in this together. We will go through 2020, we'll come out strong. And this is just the beginning. >> Well, Priyanka, thank you so much. We love the partnership with the CNCF and definitely happy to be able to participate in the event again this year. >> Absolutely. Thank you so much Stu. >> All right, and stay tuned. Lots of coverage here from KubeCon, CloudNativeCon 2020 Europe the virtual edition. I'm Stu Minimam. And thank you as always for watching theCUBE. (upbeat music)

from the silicon angle media office in Boston Massachusetts it's the queue now here's your host Stu minimun hi this is a cute conversation from our Boston area studio I'm Stu minimun and joining for this deep dive into partnership discussions is Brian Regan the CMO of activity Oh Brian great to see you and happy 2020 great to see you used to thanks all right so we had a conversation with yourself and a shuch talking about 10c some of the activities the general momentum of ectopy oh but really want to spend a little bit of time talking about partnerships so Activia being a software company always has add a number of partnerships so you know when we talk a little bit of just the philosophy of the company and you know how important that is for you know technology partnerships as well as the go-to-market absolutely and I think we you know in 2019 we really increased our focus our investments and really our entire company alignment towards five types of partners specifically one was relatively new partnership for us which is a software partnership with IBM and their data and AI division of IBM under Arvid Krishna and Rob Thomas that we really the OEM our product to go after the test data management market opportunity and really become a data platform for a lot of their initiatives that involve Watson and and analytics as well as test data management that was a huge new partnership for us in 2019 well of course a new area of partnership because IBM I understand is probably the longest and oldest partnership that activity oh is that absolutely so the software group was probably the last group that we have partnered with in inside of the IBM corporation but we saw incredible traction throughout the year great pipeline growth from literally the beginning of the the Inc signing the the paper and have a roster of incredible logos to show for it over the last 12 months yeah it's always interesting to look if you talk about software and how a ifit's to it that was 2019 one of the things we said just you know okay what is AI are along that spectrum but you know how do these things stitch together everything to a Maya feed for the training algorithms or there are other things I can do so that sounds like you found some areas where customers are going to be working at leveraging your solution absolutely and certainly with IBM's acquisition of Red Hat and their embrace of containers and kubernetes that application modernization intersection point where we can bring data into containers is going to be a big theme for us in 2020 as well okay exciting stuff so that's on the software piece so if you have software hardware still matters into C 20 it turns out we still need to run things on servers and storage so and and switches and the like so we're fortunate to have partnered with Dell EMC as one of our focus infrastructure partners we have reference architectures for converged infrastructure using the rail and their rack designs on the VX flex OS underneath and really going after the database cloning market opportunity so bringing a essentially a data center pod architecture with Activia software running inside to power these databases of service opportunities that exist in a large enterprises alright interesting that you know EMC was not one that I would have thought would have been the first one to partnership Dell EMC with a much broader portfolio it seems a natural fit absolutely and and we were excited actually to based on client demand to also introduce the support to write to data domain so we can actually support data domain essentially we treated almost like an object target to increase the useful life and actually increase the power of data domain within these broader infrastructures that the enterprise clients have you know I had a great conversation with the shuch talking about what one of the things about 10 C is we've known for a long time that object storage is so important for the storage industry and where we want to go but customers shouldn't have to think about it it's just how we enable that and that leads up to of course cloud is big piece absolutely NC there so so where the important partnership from a cloud standpoint so certainly all of the clouds for us in our multi cloud effort are important we we support seven of the hyper scalars and and certainly you know Alibaba cloud IBM cloud Oracle cloud VMware cloud in addition to the three that people think about most but from a go-to-market standpoint we were probably the most embedded with Google cloud over the last year to 18 months again we've aligned a lot of both go to market but also engineering efforts to make sure that we're supporting Google cloud in the best way possible bringing the most compelling and differentiated offerings particularly for database workloads for backup dr and ultimately database cloning well congratulations important partnership especially when you talk about that engineering standpoint Google is not one just to make oh you know we made a handshake and it's good it really they dig in from an engineering standpoint and we know that Google makes the smartest stuff out there they'll tell you that so if you you've gone through the wringer on that that that really speaks to the architectural absolutely piece of the environment and and credit to a shook in the entire engineering organization I mean that is to your point very much an engineering first and then go to market second type of relationship and we're delighted to be in the go-to-market side of that okay go to market then is probably another way piece of absolutely so the last two types of partners that were really focused on for 2020 and we certainly got very serious in 2019 one is global systems integrators and TCS has really emerged is a really key partner for us in that landscape when we think about the enterprise accounts that we target you know a billion and up in revenue they're in every single one of them and we have several wins that we can look back on 2019 and credit their influence they are certainly helping the application modernization initiatives within all of these enterprises and partnering with active Pheo to really bring a data management and test data management capability to bear really was an important step for us in nineteen that we hope to accelerate in 2020 and then the the last piece and last but not least from a go-to-market standpoint is the chat and you know important channel partners whether it's Trace 3 particularly on the west coast whether it's data trend you know from the Midwest and East Coast these types of channel partners have really helped us you know become embedded in some of the largest accounts in in North America as well as globally and really are the the trusted adviser inside of those accounts that we want to continue to enable with compelling differentiated offerings like Tennessee yeah there were a lot of transformations going on in the channel they were all trying to figure out how they live in that multi-cloud world seems a natural fit for those that are thriving and surviving absolutely in this era that those would be the ones that you'd be working with absolutely so as a software company you know the part of our power is the ecosystem power and but we believe that by continuing to foster these multifaceted relationships they all have actually really fascinating benefits across the board the IBM relationship for example has ecosystem benefits in their channel and their systems integrators the Dell EMC relationship has you know ripple effects into their channel and their distribution points of distribution so we believe it's a very complimentary ecosystem that we're building we're excited at the possibility of an even stronger 2020 because of it awesome the one that you mentioned actually in our earlier conversation talking about active intensity si P of course a big important partner also a huge it's an important partner from a standpoint of it's maybe the most critical workload in most enterprises that use sa P and being a part of their technology stack inside of the Hana enterprise cloud is a critical capability for us but it's also an important point of distribution as they go out to their enterprise customers and are looking to become more relevant in a broader sense of data management so we're certainly excited about the work that we're doing with them we're delighted about the influence that they've had in terms of our roadmap and pushing our platform to be even more capable particularly for Hana workloads all right a lot of different pieces Brian congratulations on all that happened in 2019 and looking forward to watching the momentum in 2020 Thanks looking forward to being back all right lots more coverage from us at the cube dotnet of course will be lots of shows feel free to reach out on Twitter I'm at Stu and thank you for watching the cube

>> Live from Toronto, Canada, it's theCUBE, covering Global Cloud and Block Chain Summit 2018. Brought to you by theCUBE. >> Hello everyone, welcome back to theCUBE live coverage in Toronto for the Block Chain-Cloud Convergence Show. This is the Global Cloud Block Chain Summit part of the Futurist Event that's going on the next two days after this. Our next guest is Kesem Frank, AION co-founder and CEO of MavenNet. Doing a lot of work in the enterprise and also block chain space around the infrastructure, making it really interoperable. Of course, Jenna Pilgrim, co-founder and COO of a new opportunity called Network Effects. Welcome to the cube, thanks for joining us. >> Thanks, thanks for having us. >> Thanks, John. >> You guys were just on a panel, The Real World Applications of Block Chain. IBM was on it, which, been doing a lot of work there. This is real world, low hanging fruit, block chain, everyone's pretty excited about. A lot of people get it, and some don't. Some are learning. So you've got the believers, the I want to believe, and then the nonbelievers. Let's talk about the I want to believe and the believers in block chain. Some real world applications going on. As it's evolving, so there's evolution of the standards, technology, but people are putting it to use. What's going on in the sector around some of the real world cases you guys talked about? >> I think we're seeing a lot of collaboration as far as real world applications go, because I think people are sort of starting to understand that if a distributed network is going to work or is going to be secure, it needs diversity and it needs mass scale. If lots of different parties can work together, then they can actually form a community that's really working. As far as real world applications, there's some really interesting one as far as supply chain. Kathryn Harrison at IBM talked about their pilot about shipping, bringing together the global supply chain of distribution. There's a bunch of interesting ones about food providence and bringing together different parties just to make sure that people know what they're eating and that they are able to keep themselves safe, so I think those are two definitely interesting ones. >> Kesem, block chain, supply chain, value chains, these are kind of key words that mean something together. >> Right. >> Making things work in a new way, making things more efficient, seems to be a trend. You're kind of in that world. Is it efficient? (laughing) How's the tech working? What are some of the core threshold issues that people have to get over? >> So you know, John, that's exactly the question to ask. A lot of folks out there are looking at block chain and the promise it represents, and the one big question that keeps echoing over and over is when is this going mainstream? When are we going to see something, a domain, a use case, that is actually natively on a block chain? I think that, essentially, we kind of owe it to ourselves and to everyone that cares about this stuff to ask what's working today, August 2018 and what is still kind of pending? I co-founded a project called AION. For us, interoperability is really one of the key facets that you need to be able to solve for to make block chains real. And again, here's the 60 second argument. If you're going to grow all these solutions that are centric around the use case, they solve for different pinpoints and different stakeholders care about them. They don't really create the cohesive kind of ecosystem until they can all talk to each other, and then you have to ask yourself is the original hypothesis where it's going to be one main net, one chain that's going to rule them all, and everybody gets to play on it and everybody deploys their Dapps on stuff like Fabric or R3 or Ethereum, or whatever it might be. That is absolutely not the way we're seeing enterprise actually shaping into this domain of block chain. What we're seeing is big consortiums that already have value, tangible today, out of doing stuff on chain, and the biggest thing to solve is how do I take, to Jenna's point around supply chain or food providence, whatever it is, how do I actually open it so I can now start writing insurance events, payment events, banking, underwriting, auditing, regulation? There's this gigantic ecosystem that needs to be enabled, and again we are actively saying it's not going to be by an organic model where you and I do everything on top of a single solution. There will be a multitude of solutions, and what we need to solve for is how do we convert them from disparate islands that don't talk to each other into a cohesive ecosystem? >> This is a great point. We were talking on our intro, and we talked last night on our panel, about standards. If you look at all the major inflection points where wealth was created and value was created around innovation and entrepreneurship and industry inflection points, there's always some sort of standard thing that happened. >> Right. >> Whether it's the OSI model during the early days of the internet to certain protocols that made things happen with the internet. Here, it's interesting because if you have one chain and rule the world, it's got to be up and running. >> Yeah. >> It's not. There's no one thing yet, so I see that trend the cloud has, private cloud, public cloud, but public cloud was first but people had data centers. >> Right. >> Both not compatible, now the trend is multi-cloud. You can almost connect the dots of saying multi-chain >> Right. >> Might be a big trend. >> Right. >> This is kind of what you're teasing out here. >> That's exactly what we're about, and I think it's very interesting, the point you're making about dissimilarities between the two domains. We are in a cloud convention, and to me it means two things. One, we absolutely see the mainstream people, the mainstream players in industry, starting to take this seriously. It used to be a completely disparate world where you guys are a bunch of crazies with your Bitcoin and ether and what not. They're definitely taking this seriously now. The second thing, when you think of cloud as a model, how cloud evolved, we used to have these conversations around are you crazy, you're telling me that my data is not going to be on premise? >> It's not secure, now it's the most secure. >> Oh my God! It's in the cloud, what's a cloud? (laughing) You think of the progression model that was applicable back then, right? 10 years, 15 years back, where we started privately and we tell them OK, we'll take this side step of hybrid and then fully public. Took them a while, took them almost 20 years to get their heads around it. >> There's no one trajectory. What's interesting about block chain and crypto with token economics, there's no one trend you can map an analog to, you can't say this is going to be like this trend of the past. It's almost developing it's own kind of trajectory. A lot of organic community involvement. Different tech involvement. >> Totally. >> Different engineering mindsets coming together. You're seeing an engineering-led culture big time going on. That's propelling it up to the conversations of let's lay down the pipes, let's start running apps, but I'll do it within a two year window (laughing). >> I think the big thing to understand about that is yes, you need a whole host of developer talent to build distributed systems, but at the end of the day those systems still have to be used by people. They still have to be used by society, you still have to understand how to talk to your chief executives about what's happening within your company or what your tech teams are doing. There's a growing need for marketers, for PR people, for people who speak, I don't want to say plain English, but people who understand how-- >> Translate it to the real world. >> Yeah, they need to translate it, and how to bridge the gap between legacy systems and how do you take what you were doing before and transform it to a distributed ledger system? How do you do that without just paving the cow path? >> It's interesting, it's almost intoxicating, 'cause you got two elements that get people excited. You got the token economics, which gets people to go, "Whoa," the economics and the liquidity of money and/or value creation capture equations completely changing some of the business model stuff, which could be translated to software and Dapps and software general stuff or SaaS, et cetera. Then you got the plumbing or the networking side of it where things like latency, interoperability, absolutely matter, so with all that going on in real time, it's kind of happening at 30,000 feet and trying to change the airplane engine out. People are failing, and so there's some false promises, there's also false hopes that have not been achieved, so this clouds up the real big picture which is this is an innovative environment. We're seeing that trend. But when you get to the end of the day, what are people working on, to me, is the tell sign. Kesem, what's your project, talk about AION and the work you're doing, specifically give some examples of some of the things that you're doing in the trenches. >> Sure. >> What are you trying to solve, what are some examples you're running into and how does that relate to how things might evolve going forward? >> Sure, so there is a multitude of different problems that we work on but if you want to stick just to the fundamentals? Let's take one gigantic issue that everyone's kind of tackling from different perspectives, let's talk about scale. Scale is, especially in block chains especially challenging just because of how the technology works. How decentralized can you get before you're faced with gigantic latencies and before transaction cost are kind of through the roof? When you think about it, that is all a result of how we kind of contemplate these early stage networks. It was always the one network that is going to scale to infinity. Absolutely not the way it's going to work out. So from my perspective, again, sticking to this one issue, if you could actually give me a decentralized rail that maintains consensus throughout two networks, I can now actually have two trusted kind of go-tos instead of always putting the full brunt of the throughput on one single network. For us, that's kind of a no brainer application to interoperability. If you could actually give me all these trusted networks that work in tandem, I could now start splicing throughputs across many different parallel kind of rails. Not to similar than how we can solve for super computing. We understood there is a limit on how fast can a single CPU go and we started going wide. >> That's an interesting point, I want to just double click on that for a second because if you think about it, why would I have multiple rails and multiple systems? Maybe the use cases are different for them. >> Correct. >> You don't want to have to pick one cloud or one chain to rule them all because it's not optimized. We saw that with monolithic systems and cloud is all about levels of granularity and micro service and micro everything, right? >> Correct. >> And I would also say that gets into a security issue as well, right? You're talking about multiple layers but you also will have multiple layers of permission. You'll have multiple layers of how much information someone can see and what I think is emerging, if data is the new oil, then what's emerging is for the first time we're now able to trust data that we do not own. For corporations who say, "I don't know to market to you "if I don't know everything about you." But at the end of the day, they want to be able to leverage your data but they don't need to secure it and I think that cybersecurity issue is a huge, huge thing that's definitely coming. >> I want to get both of your thoughts on this, because we were talking about this last night. We were riffing on the notion that with cloud compute and data really drove scale. So Amazon is a great example and their value now is things like Kinesis and Aurora, some of their fastest growing services. You got SageMaker, probably will be announced at re:Invent coming up as the fastest growing service, right now it's Aurora. All data concepts. So the dataization really made cloud, great. >> True. >> Okay what's the analog for crypto and block chain? Tokenization is an interesting concept. There's almost an extension of cloud where you're saying, hey, with tokenization, the tokenization phase, how do you explain that to a common person? You say, is token going to be the token and the money aspect of and the economics the killer app? How's it transverse the infrastructures, plural? >> Yeah, or is the wallet going to be the browser? Or how are all of these things happening? >> How do you make sense of this? What's your reaction to that trend? >> So I actually get excited when I think about what token, on the most profound level, actually means. When you kind of think of where value happens in the context of these gigantic enterprises, right? You think of Apple, Amazon, Google, Facebook, any of them, and you kind of think of what the product is, it's all about the data and it's all about how do you convince people to give up data so they can monetize on it. And then you have two distinct, like literally gigantic groups of stakeholders at play. You have the users, that essentially get something free, right? I get to post on Facebook or I get to write an e-mail on Gmail. Then you have the stakeholders that actually extract all that value from my activities. A token, I think most profoundly represents, how do we actually get to a unified group where the user himself is the stakeholder that gets to extract the data? And again, the proposition is pretty straightforward. The more you use a network and the more the network becomes valuable and grows, the more value the token that drives at it. >> So it changes the value capture equation? >> Correct, different model altogether. >> The value creators get to capture the value and obviously network effects plays a big part in this? >> Yes. >> Which is your wheelhouse. (laughing) >> Yeah, definitely. I think it really comes down to core principles. Now you're able to really get down, to what Kesem was talking about, about when you're designing a token or if you're designing an incentive mechanism, you're really going down to the sort of deep game theory of why people do specific things and if we can financially incentivize people to do good rather than punish them or fine them for doing bad then we can actually create value for everyone. We're designing a new economy that now has the ability to propel itself in a fair and prosperous way, if done correctly, obviously that's the disclaimer afterwards, but. >> I love what you're saying there because if you look at collective intelligence a lot of the AI concepts came around from collective intelligence, predictive analytics, prescriptive analytics all came around using data to create value. I always talk about fake news because we have a cloud of media business that's kind of tokenized now but fake news it two things, it's payload, fake news, the fake content and then the infrastructure dynamics that they arbitraged, with network effects. They targeted specific people, fake payload, but the distribution was a network effect. Again, this was the perverse incentive that no one was monitoring, there was no- >> Well and I think in that case, yes there is news that is inherently false information but then there's also a whole spectrum of trueness, if you want to call it that so now we have this technology that allows us to overlay on top of that and say, "Well what is the providence of my information?" And with different layers of block chain systems you're actually able to prove the providence of your information without exposing the user's privacy and without exposing the whole supply chain of the media because there's like media buyers, go through all kinds of hands. >> And we believe the answer to fake news, frankly, is data access, collective intelligence and something like a block chain where you have incentive systems to filter out the fake news. >> Totally. >> Exactly. >> Reputation systems, these things are not new concepts. >> It's all about stake at the end of the day, right? It's how do you keep a stakeholder accountable for their action? You need backing so I think we're definitely on the same page. >> I love, I could talk about fake news all day because we think we can solve that with our CUBEcoin token coming out soon. I want to shift gears and talk about some of the examples we've seen with cloud. >> Sure. >> And try to map that to some navigation for people in how to get through the block chain token world. One of the key things about the cloud was something they called shadow IT. Shadow IT was people who said, hey, you know what? I could just put my credit card down and move this non core thing out in this cloud and prove to my boss, show them, not pitch 'em on the Power Point deck, to say look it, I just did this for that cost in this timeframe, and that started around 2009/2010 timeframe, the early digerati or the clouderati kind of did that but around 2012 it became, wow, this shadow IT is actually R and D practice. >> Mm-hmm. >> Right. >> You started to see that now, so the question that we see for people evaluating in the enterprise is how do you judge what's a good project? Certainly people are kicking the tires and doing a little bit, I won't call it shadow IT, but they're taking on some projects as you were talking about on the panel. How should they, the enterprises in general, the large companies, start thinking about how to enable a shadow IT-like dynamic and how should they evaluate the kind of projects? I think that's an area people just don't know what to look for. Your thoughts? >> I want to add a premise to that, because I think that's absolutely the right question to ask. We also need to add the why. Why should we, as people that do native crypto currency, even care about enterprises? A lot of people kind of theorized when Bitcoin was created to say it was anti institutional is an understatement, right? Aren't we meant to kill enterprise? The thing is, I don't think it's going to be a big bang. I don't think it's going be we wake up and nobody's using banking anymore or nobody's using the traditional healthcare or government and you know whatever insurance policies. We care about block chain in the context of enterprise because we think block chain is a fundamentally better model of doing things. It kind of does away with the black box where I need to be in business, I need to blindly trust you and it introduces a much more transparent and democratic model of doing things. We absolutely want to introduce and make block chain mainstream because that's important for us. When you think of how we do it, to your question, AION is all about interoperability, right? We create a solution that helps scale and helps different networks, decentralized networks, communicate to each other. What we also do with MavenNet, the company I run, is essentially make that enterprise friendly. It's extremely hard to do adoption and implementation within an enterprise, they're very immune to change. >> Antibodies as they say. >> Oh. >> The antibodies to innovation, they kill innovation. >> Totally, so going back to your original question, it all starts with a P and L. If somebody is going to authorize, you know, an actual production system in enterprise for block chain, it needs to create a tangible value, a tangible return, quickly and that's the key. The model that actually scales is you start by flushing out inefficiency plate. You show the enterprise how you could actually achieve, I don't know 20%/30%, that's the order of magnitude that they care about, efficiency by moving some part of your value chain on top of a block chain. >> It has to have an order of magnitude difference or so. I mean cloud was a great example, too, it changes the operating model. >> Yeah. >> They achieve what they wanted to achieve faster and more efficiently and operated it differently. >> Correct. >> And people were starting at it like a three headed monster like what is this thing, right? The cloud thing. And throwing all kinds of fud out there, but ultimately at the end of the day, it's a new operating model for the same thing that they're trying to do with the old stuff. >> Mm-hmm. >> I mean, it's almost that simple. >> Yeah, I think in some cases you need to really, in my previous life at the Block Chain Research Institute, we encouraged a lot of our clients to really take a step back and say, well will I actually, A, will I have this problem in eight years or seven years or 20 years or 50 years, if we're really fundamentally building a new financial system or a new way of doing things that is fundamentally different? Are we building it on old technology? We need to make sure that, and that's why you've seen banks were the first in the door to say, "Yeah, payments, that sounds great, that sounds great." But the real applications that we're seeing from banks are in loyalty, they're in AMLKYC, they're in the sort of fringe operations. Something like payments is going to take a really long time to push through because of those legacy systems because payments is the fundamentals of what banks do. >> This is an interesting point, I want to get your thoughts to end the segment because I think one of the things that we've certainly seen with cloud that over the generational shifts that have happened, the timeframe for innovation is getting shorter and shorter, so timeframe is critical so if the communities are fumbling around hitting that time to value, it seems to be trending to faster and we don't want to hear slower because these systems are inadequate, they're antiquated. >> Mm-hmm. >> These are the systems that are disrupted so the timing of, whether it's standards, or interoperability or business models, operating models, they got to be faster. >> Yeah. >> That's the table stakes. >> I think it all comes down to collaborative governance. >> People have to figure out block chain faster. >> Yeah. >> What's holding us back? Or what's accelerating us? What's the key for the community at large from the engineering community and the business community to make it go faster? Your thoughts? >> Right, so I think we're still searching for the next killer app. If Bitcoin is the reason we're all sitting here today and I profoundly believe that. >> Yeah. >> What is the next thing that drives change on a global scale? That's kind of what we're trying, collectively as an industry, to figure out. Sure, many kind of roadblocks on the way. Some of them educational, perceptional, regulation, technology, but the next big wave that's going to accelerate us to the next ten years of block chain is that next killer app. Organizations such as myself, Jenna, that's our day job, we wake up and that's what we do. >> I mean I've always said, and Dr. Wong, who's the founder of Alibaba Cloud agreed with me, I've been saying that the TCPIP protocol, that standard really enabled a lot of interoperability and created lots of diverse value up the stacks of the OSI model, Open Systems Interconnect, seven layer model, actually never got standardized. It's kind of stopped at TCPIP and that was good, everyone snapped at the line, that created massive value. >> But that's a collaborative governance thing. That's people coming together and saying that these are the standards that we wish to adhere to. >> We need the moment right now. >> Yeah, so you see organizations like the Enterprise Ethereum Alliance coming out with a prospective list of standards that they think the community should adhere here. You know you have the ERC20 standard, you have all these different organizations, the World Economic Forum is playing a role in that and the UN is playing a role, especially when it comes to identity and those kind of really big, societal issues but I think that it comes down to that everyone plays a role that I'm doing my best, I think it's going to be somewhere in the realm of data so that's where I've chosen to sort of make my course. >> I think this is a good conversation to have, and I think we could continue it. I mean, I read on Medium, everyone's reading these fat protocols, thin protocols but at the end of the day what does that matter if there's no like scale? >> Yeah. >> You can have all the fat protocols you want, more of a land grab I would say but there's certainly models but is that subordinate or is that the cart before the horse? This is the conversation I think is in the hallways. >> Totally agree, totally agreed. >> Guys, thanks so much for coming on theCUBE, really appreciate it. Breaking down real world applications of block chain we're at the Global Cloud and Block Chain Summit. It's an inaugural event and think it's going to be the kind of format we're going to see more of, cloud and block chain coming together. Collision course or is it going to come in nicely and land together and work together? We'll see, of course theCUBE's covering it. Thanks for watching. Stay with us for more all day coverage. Part of the Futurist Conference coming up the next two days. We're in Toronto, we'll be back with more after this short break. (theCUBE theme music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering AWS Reinvent 2017, presented by AWS, intel, and our ecosystem of partners. >> Welcome back everyone, live here in Las Vegas. We're at AWS Reinvent. Day one coverage of three days of theCUBE, I'm John Furrier, the host this week. >> We've got two sets, our fifth year covering Reinvent. It's been great to watch. Every year we try to get in the VC panels. We just had Jerry Chen on from Greylock. We've got two more awesome friends of theCUBE in the community here. We've got Sunil Dhaliwal who is the founder of Amplify Ventures and Nick Sturiale with Ignition Partners. Guys, great to see you. >> Great to see you, John. >> Good to see you, John. >> Boy what a lineup it's been over the past three years, four years with Amazon, just watching them tear. Now it's all steamed ahead. Microsoft is totally gearing up. You can see them playing, what they're doing, they're pedaling as fast as they can. Google Play and the (mumbles) we're gonna compete on TensorFlow and other, little goodness, a lot more to go. You got Alibaba Cloud. Intel behind us is making (mumbles) chips. Good market on paper. >> Yeah. >> But we're seeing startups kind of get bought, not for what they wanted. Didn't go public. Skyhigh from Greylock. You see Barracuda going private. A lot of money to be made. Maybe the investment thesis of 200 million dollar fundings, that's over, is it over? Get a little bit of cash and get the critical mass and... >> Well, here's a question. Do you invest in these companies thinking every one of them is going to go public? Or do you think that a good number of them are gonna get acquired? And I think the investors that have done this for a while, and Nick's done this for what, like 45 years? >> I started when I was two, so. >> I've done this like two years less than you have, so I don't pretend I'm dramatically younger. But the reality is, these companies get acquired. And pretending that you're gonna pile into a company late and expect every single thing to go public I think is kind of crazy. And the people that are getting caught in that trap, I think they're gonna be in for a rude awakening. But look, you've got a billion six outcome for Barracuda, right? >> John: That was pretty damn good. >> And you know Skyhigh number hasn't been printed, but it wasn't a small one. Like, those are good outcomes. Those are good venture returns, if you were smart about where you got in. >> So I have a slightly different perspective, which is the real issue is that so much money moved into the late stage, and these companies thought that growth would always be linear even asymptotic. And so what happens is that their growth rate slows down and the cost of growth goes up, and suddenly the company's not quite as hot as it was a year ago, and so now the options for what they do have shrunk dramatically, and so you get exits like you just mentioned. And so part of the problem is is that entrepreneurs and investors really have to have a sober view of what is a business model that's durable over time and which ones really are gonna start to leak in their later phases. >> Well it's kind of a planted question for you guys, because you're early stage in Amplify. I've been following you guys, do a great job. You guys do a range of early, end growth. >> Mostly early though. >> The days of just laying back and kicking your feet up and throwing cash at stuff is over. You actually gotta do the work. It sounds like old school VCs. Greg Sands and I talk about this all the time. You gotta go in and be venturing. You gotta actually make it work. >> And that sucks, I was just told I put my feet up, I put some money in and then I get a distribution check at the end of it. >> That's what everyone thinks you guys do. What do you guys do every day? Take us through your day. >> It looks a lot like that except... >> It's so easy to be a VC, all you do is okay, yes, no, okay that's good. >> We got a dartboard. >> All you gotta do is bet on the good ones. >> Yeah. >> That's so easy. >> So there are what, 14,000 startups in the bay area, how many of them are worthwhile you think? >> It's a lot of work. Well old school, let's go back to the old school tactics, because you're seeing a couple things going on. You guys essentially pointing it out, you gotta do the work and pick the winners. But now that the business models are changing, right? You're seeing Amazon just ignoring conventional wisdom, and they're winning. The game is changing a bit in the business model side. How are you guys looking at that as you make investments? So you got the classic venture, bet on a good team, do all that stuff. What do you guys look at now in the marketplace for fit, scale, longevity, durability? >> I mean the stuff we care about the most is are you going after a big problem? Because I think a lot of the stuff we see, even with your great teams and great technologies, but you step back and you actually think, you know, that isn't a company, that's a product, or that's not even a product, that's a feature. And I think that's the natural outgrowth of what happens when you got 14,000 startups in the bay area, is there aren't 14,000 products that are companies worth having. What you have is, probably 12,000 features, 1500 products, and then like 500 real companies. And that's probably the biggest filter that you gotta apply on the way in, and it's maybe the hardest one to solve for, which is, roll this out seven years, nine years, because that's really what you're talking about when you're talking about building a public durable company is, what does this market look like way down the road? And is that a thing that can stand alone? And that's really, I think, the difference between the companies and the investors that do really well and the ones that can kind of squeeze by, knocking out a couple interesting outcomes. >> My favorite thing is that when you say we just pick the winners, is that nobody knows who the winner is a priori. If you knew that, that market would be gone already. And most successful companies that you read about, and they talk about the (mumbles) investors that were in it early, that's all BS. It's a million good things happen along the way, serendipity, a ton of hard work on the management team and the employees. So this idea that things are preordained is just silly. And I would tell you that you look at most really successful companies today, their business model is completely different than the one that the venture person backed. >> I mean it's always the classic, because I remember when I first started an entrepreneur in the 90s, the question was what's your exit strategy? It was a legitimate question at that time, and it was kind of a peg mark, okay, when I build a growing company and have an exit. Now the exits are, as you mentioned, buyers. And that's not necessarily a bad thing. If Microsoft's in a race to fill in their white spaces, man, I would crop up and get the crops growing, right? So you can say, okay, Microsoft. So you guys gotta kind of do a little bit of homework there, do some relationship work, and you guys are close to Microsoft, so. >> Yes. >> I mean, is that kind of the new playbook? >> Yes. >> How should entrepreneurs posture to this? I mean obviously they're gonna try to build a durable venture, but they don't want to be zig-zagging too much or pivoting. >> No. >> I mean Nick made the point earlier, which I think is absolutely the one to focus on, which is when you raise a ton of capital your options start to shrink. The more money you raise at the higher and higher price, there's somebody you gotta serve who's thinking about the even bigger pot of gold at the end of the rainbow. And honestly, when we look at, I'll take one company in our portfolio for example, and I think the Splunk story is right up there with it, If you look at Datadog, Datadog's huge here at this show. There's purple shirts everywhere and a massive booth, and they've been here for five years running or four years running. That business has barely touched the last round of capital they raised, let alone the round of capital before that. The capital efficiency of that business, not only is it gonna make it a great outcome, but it's gonna give them tons of options of things that they can do. And, you know, they'll get to make every single decision they make, whether it's going to new product or whatever, position of strength. And not a lot of companies do that. >> So Splunk started in 2004. Guess how much total the company raised before it went public? >> How much? >> Forty million. Guess how much it spent up to the time it went public? >> John: How much? >> John: Twenty five. >> So it went public... >> So very capital efficient? >> John: Think about that. >> Yes, and it's worth 9 billion now. So you had several hundred millionaires created out of Splunk, and I would submit to you if Splunk was started today, the investor community would have killed it. >> John: Why? >> Because 18 Brinks trucks would have backed up and dumped a billion dollars on top of it, and buried it in too much money without allowing the company to get the time to become a fully viable system. >> Sunil: Yeah. >> So the too much cash can create toxicity for the startup? >> Money rarely makes the company. Money rarely makes the company. >> Lew Cirne was on earlier, founder of New Relic. Another capital efficient company. >> Great company. >> Went public all time high. Love that guy. He's such a strong, he wrote some code last week. He said, if you can help your partners be successful, in referring to Amazon. >> Man: Amazon. >> Then you can be a great ecosystem partner. So the question now is that's not a bad deal for a company to jump into the Cloud game and be a really good partner and build a kick-ass product. >> Yes. >> And look like a feature maybe on paper, and then sequence to an opportunity. Thoughts on that? It's certainly lucrative if you can get the flywheel going. Right? >> So you don't want to build a company whose basic thesis is helping Amazon or Azure or Google. That is a dead company. If, however, you pull revenue for one of those three in a way that's interesting to them, they will support you all day long. We have two companies in particular, Icertis and KenSci that are pulling a lot of revenue for Azure right now. And Microsoft gives them extraordinary support. >> That's the nuance right there. That's the nuance. Pulling revenue, value, creation. >> Yes. >> Well, they've created Amazon and Microsoft and Google, to a degree, as they get going. They've created a really interesting model, which is unlike your traditional ecosystem, hub-and-spoke model, where someone's gonna capture (mumbles) control of the sale, etc., etc. The smart thing that Amazon's done is they say, you use whatever you want, we're gonna bill you for the primitives until the cows come home, and as long as you're not standing in between Amazon and their primitives revenue, you're gonna do great. >> All right, final question for you guys. First of all, great conversation on the capital markets, certainly it's crazy. We always try to cover it, but here's a thought exercise. Last night we were at the analyst summit. We were talking to some analysts, and the question was, the airplane's going down, and you're in a board meeting, I gotta pick a parachute. There are only three parachutes, Amazon, Microsoft, and Google, which one do you grab? You got 10 seconds. >> To sell to or? >> No, just grab a parachute, and you hope that it opens and you live. Pick a parachute. >> Amazon, >> I'm going with Amazon. This one isn't hard. >> Microsoft and Google. The only person who's gonna grab the Microsoft parachute is the guy who's been with Microsoft for 30 years and knows they're not gonna let him down. If you're a forward-facing company you're going with Amazon, and if you're nuts, you're gonna grab Google right now. No offense to my friends at Google. >> So we're sitting here at Reinvent, so I feel like that's a trick question. (laughing) >> Well, that's good. If you're in the Microsoft ecosystem, they do take care of their own. >> They do. >> Their DNA is tuned to ISVs, they're very good at it. >> and that's their track record. Well, the one guys says, well it depends. By the time you argue with the parachute the planes (mumbles). But it does depend on your business. >> Sunil: Yes. >> Nick: Yes. >> But it is hard not to look at this show and say this is what electricity was in 1920. >> Final question, obviously Amazon is looking at all steam ahead, business models are changing, you're starting to see the top of the stack develop nicely, moving up the stacks seems to be the trend. You got this decentralized market up there. Bitcoin hit 10,000. A lot of smart alpha geeks, including some of the guys here at theCUBE team, is looking at ways to kind of leverage this decentralization trend in a way that's productive. Yet there's a lot of scams out there with these ICOs. Decentralization good or just another infrastructure dynamic? Thoughts on this whole decentralized token economics wave? Also the FCC has regulations now in it. Is it disrupting VC? Your thoughts, Nick. >> Do remember what H.L. Mencken said? "A fool and his money are soon parted." so I think anyone who sits there and says I understand completely what an ICO is and what I'm buying and doesn't view it as something that'll be a tax deduction for next year, I think is gonna be in for a bumpy ride. >> Get out your Gartner Hype Cycle. And if you don't know what it is, go look it up, and there's a spot right now of where we are in the hype cycle, and I think the movement my finger tells you where we are, but this is coming, but this comes afterwards. >> I heard this argument, the web is just for kids. No one will ever use the web. Browsers is a toy. >> A K memory is all you'll ever need. >> Yeah, but guess what, guess what, 2001 happened before we got to 2017, so let's never forget where we are at that kind of hype. >> ICOs are like subprime mortgages, and I speak Spanish and I can't even read the thing. That is what an ICO is. >> So certainly hyped up. Winter's coming, we'll see. All right, we got the VCs here, Nick and Sunil. We got Amplify and Ignition Partners here in theCUBE. More live coverage day one after this short break.

(techy music playing) >> Hello, everyone, welcome to theCUBE Studios here in Palo Alto, California. I'm John Furrier, the cofounder of SiliconANGLE Media Inc., also cohost of theCUBE. We're here for a CUBE Conversation on Thought Leader Thursday and I'm here with Chris Cummings, who's a senior manager, advisor, big-time industry legend, but he's also the Chasm Group, right now, doer, Crossing the Chasm, famous books and it's all about the future. Formerly an exec at Netapp, been in the storage and infrastructure cloud tech business, also friends of Stanford. Season tickets together to go to the tailgates, but big Cal game coming up of course, but more importantly a big-time influence in the industry and we're going to do some drill down on what's going on with cloud computing, all the buzzword bingo going on in the industry. Also, AWS, Amazon Web Services re:Invent is coming up, do a little preview there, but really kind of share our views on what's happening in the industry, because there's a lot of noise out there. We're going to try to get the signal from the noise, thanks for watching. Chris, thanks for coming in. >> Thank you so much for having me, glad to be here. >> Great to see you, so you know, you have seen a lot of waves of innovation and right now you're working with a lot of companies trying to figure out the future. >> That's right. >> And you're seeing a lot of significant industry shifts. We talk about it on theCUBE all the time. Blockchain from decentralization all the way up to massive consolidation with hyper-convergence in the enterprise. >> Mm-hmm. >> So a lot of action, and because of the day the people out in the marketplace, whether it's a developer or a CXO, CIO, CDO, whatever enterprise leader's doing the transformations. >> Chris Collins: We got all of them. >> They're trying to essentially not go out of business. A lot of great things are happening, but at the same time a lot of pressure on the business is happening. So, let's discuss that, I mean, you are doing this for work at the Chasm Group. Talk about your role, you were formerly at Netapp, so I know you know the storage business. >> Right. >> So we're going to have a great conversation about storage and impact infrastructure, but at the Chasm Group how are you guys framing the conversation? >> Yeah, Chasm Group is really all about helping these companies process their thinking, think about if they're going to get to be a platform out in the industry. You can't just go and become a platform in the industry, you got to go knock down problem, problem, problem, solution, solution, solution. So we help them prioritize that and think about best practices for achieving that. >> You know, Dave Alante, my co-CEO, copartner, co-founder at SiliconANGLE Media and I always talk about this all the time, and the expression we use is if you don't know what check mate looks like you shouldn't be playing chess, and a lot of the IT folks and CIOs are in that mode now where the game has changed so much that sometimes they don't even know what they're playing. You know, they've been leaning on this Magic Quadrant from Gartner and all these other analyst firms and it's been kind of a slow game, a batch kind of game, now it's real time. Whatever metaphor you want to use, the game has changed so the chessboard has changed. >> Chris: Mm-hmm. >> So I got to get your take on this because you've been involved in strategy, been on product, you worked at growth companies, big companies, start-ups, and now looking at the bigger picture, what is the game? I mean, right now if you could lay out the chessboard, what are people looking at, what is the game? >> So, we deal a lot with customer conversations and that's where it all kind of begins, and I think what we found is this era of pushing product and just throwing stuff out there. It worked for a while but those days are over. These folks are so overwhelmed. The titles you mentioned, CIO, CDO, all the dev ops people, they're so overwhelmed with what's going on out there. What they want is people to come in and tell them about what's happening out there, what are their peers doing and what problems are they trying to solve in order and drive it that way. >> And there's a lot of disruption on the product side. >> Yes. >> So tech's changing, obviously the business models are changing, that's a different issue. Let's consider the tech things, you have-- >> Mm-hmm. >> A tech perspective, let's get into the tech conversation. You got cloud, you got private cloud, hybrid cloud, multi-cloud, micro-machine learning, hyper-machine learning, hyper-cloud, all these buzzwords are out there. It's buzzwords bingo. >> Chris: Right. >> But also the reality is you got Amazon Web Services absolutely crushing it, no doubt about it. I mean, I've been looking at Oracle, I've been looking at Google, I've been looking at SAP, looking at IBM, looking at Alibaba, looking at Microsoft, the game is really kind of a cloak and dagger situation going on here. >> That's right. >> A lot of things shifting on the provider side, but no doubt scale is the big issue. >> Chris: That's right. >> So how does a customer squint through all this? >> The conversations that I've had, especially with the larger enterprises, is they know that they've got to be able to adopt and utilize the public cloud capabilities, but they also want to retain that degree of control, so they want to maintain, whether it's their apps, their dev ops, some pieces of their infrastructure on prem, and as you talked about that transition it used to be okay, well we thought about cloud was equal to private cloud, then it became public cloud. Hybrid cloud, people are hanging on to hybrid cloud, sometimes for the right reasons and sometimes for the wrong reasons. Right reasons are because it's critical for their business. You look at somebody, for instance, in media and entertainment. They can't just push everything out there. They've got to retain control and really have their hands around that content because they've got to be able to distribute it, right? But then you look at some others that are hanging on for the wrong reasons, and the wrong reasons are they want to have their control and they want to have their salary and they want to have their staff, so boy, hybrid sounds like a mix that works. >> So I'm going to be having a one-on-one with Andy Jassy next week, exclusive. I do that every year as part of theCUBE. He's a great guy, good friend, become a good friend, because we've been a fan of him when no one loved Amazon. We saw the early, obviously at SiliconANGLE, now he's the king of the industry, but he's a great manager, great executive, and has done a great job on his ethos of Bezos and Amazon. Ship stuff faster, lower prices, the flywheel that Amazon uses. Everything's kind of on that-- And they own Twitch, which we stream, too, and we love. But if you could ask Andy any questions what questions would you ask him if you get to have that one-on-one? >> Yeah, well, it stems from conversations I've had with customers, which was probably once a week I would be talking to a CIO or somebody on that person's staff, and they'd slide the piece of paper across and say this is my bill. I had no idea that this was what AWS was going to drive me from a billing perspective, and I think we've seen... You know, we've had all kinds of commentary out there about ingress fees, egress fees, all of that sort of stuff. I think the question for Andy, when you look at the amount of revenue and operating margin that they are generating in that business, how are they going to start diversifying that pricing strategy so that they can keep those customers on without having them rethink their strategy in the future. >> So are you saying that when they slide that piece of paper over that the fees are higher than expected or not... Or low and happy, they're happy with the prices. >> Oh, they're-- I think they're-- I think it's the first time they've ever thought that it could be as expensive as on-premise infrastructure because they just didn't understand when they went into this how much it was going to cost to access that data over time, and when you're talking about data that is high volume and high frequency data, they are accessing it quite a bit, as opposed to just stale, cold, dead stuff that they want to put off somewhere else and not have to maintain. >> Yeah, and one of the things we're seeing that we pointed at the Wikibon team is a lot of these pricings are... The clients don't know that they're being billed for something that they may not be using, so AI or machine learning could come in potentially. So this is kind of what you're getting at. >> Exactly. >> The operational things that Amazon's doing to keep prices low for the customer, not get bill shock. >> Chris: That's right. >> Okay, so that's cool. What else would you ask him about culture or is there anything you would ask him about his plans... What else would you ask him? >> I think another big thing would be just more plans on what's going to be done around data analytics and big data. We can call it whatever we want, but they've been so good at the semi-structured or unstructured content, you know, when we think about AWS and where AWS was going with S3, but now there's a whole new phenomenon going on around this and companies are as every bit as scared about that transition as they were about the prior cloud transition, so what really are their plans there when they think about that, and for instance, things like how does GPU processing come into play versus CPU processing. There's going to be a really interesting discussion I think you're going to have with him on that front. >> Awesome, let's talk about IT. IT and information technology departments formerly known as DP, data processing, information-- All that stuff's changed, but there were still guys that were buying hardware, buying Netapp tries that you used to work for, buying EMC, doing data domain, doing a lot of stuff. These guys are essentially looking at potentially a role where-- I mean, for instance, we use Amazon. We're a big customer, happy customer. >> Chris: Mm-hmm. >> We don't have those guys. >> Chris: Right. >> So if I'm an IT guy I might be thinking shit, I could be out of a job, Amazon's doing my job, so I'm not saying that's the case but that's certainly a fear. >> Chris: Absolutely. >> But the business models have to shift from old IT to new IT. >> Chris: Mm-hmm. >> What does that game look like? What is this new IT game? Is it more, not a department view, is it more of a holistic view, and what's the sentiment around the buyers and your customers that you talk to around how do they message to the IT guys, like, look, there's higher valued jobs you could go to. >> Right. >> You mention analytics... >> That's right. >> What's the conversation? Certainly some guys won't make the transition and might not make it, but what's the narrative? >> Well, I think that's where it just starts with what segment are you talking about, so if you look at it and say just break it down between the large enterprise, the uber enterprise that we've seen for so long, mid-size and smaller, the mid-size and smaller are gone, okay. Outside of just specific industries where they really need that control, media and entertainment might be an example. That mid-size business is gone for those vendors, right? So those vendors are now having to grab on and say I'm part of that cloud phenomenon, my hyper-cloud of the future. I'm part of that phenomenon, and that becomes really the game that they have to play, but when you look at those IT shops I think they really need to figure out where are they adding value and where are they just enabling value that's being driven by cloud providers, and really that's all they are is a facilitator, and they've got to shift their energy towards where am I adding value, and that becomes more that-- >> That's differentiation, that's where differentiation is, so non-differentiated labor is the term that Wikibon analysts use. >> Oh, okay. >> That's going down, the differentiated labor is either revenue generating or something operationally more efficient, right? >> That's right, and it's all going to be revenue generating now. I mean, I used to be out there talking about things like archiving, and archiving's a great idea. It's something where I'm going to save money, okay, but I got this many projects on my list if I'm a CIO of where I can save money. I'm being under pressure about how am I going to go generate money, and that's where I think people are really shifting their eyeballs and their attention, is more towards that. >> And you got IOT coming down the pike. I mean, we're hearing is from what I hear from CIOs when we have a few in-depth conversations is look, I got to get my development team ramped up and being more cloud native, more microservice and I got to get more app development going that drives revenue for my business, more efficiency. >> Chris: Right. >> I have a digital transformation across the company in terms of hiring culture and talent. >> Chris: Mm-hmm. >> And then I got pressure to do IOT. >> Chris: Right. >> And I got security, so of those five things, IOT tends to fall out, security takes preference because of the security challenges, and then that's already putting their plate full right there. >> That's right, that's real time and those people are-- >> Those are core issues. >> Putting too much pressure on that right now and then you're thinking about IT and in the meantime, by the way, most of these places don't have the dev ops shop that's operating on a flywheel, right? So you're not... What's it, Goldman Sachs has 5,000 developers, right? That's bigger than most tech companies, so as a consequence you start thinking about well, not everybody looks like that. What the heck are they going to do in the future. They're going to have to be thinking about new ways of accessing that type of capability. >> This is where the cloud really shines in my mind. I think in the cloud, too, it's starting to fragment the conversations. People will try to pigeonhole Amazon. I see Microsoft-- I've been very critical of Microsoft in their cloud because-- First of all, I love the move that they're making. I think it's a smart move business-wise, but they bundle in 365 Office, that's not really cloud, it's just SAS, so then you start getting into the splitting of the hairs of well, SAS is not included in cloud. But come on, SAS is cloud. >> Chris: Mm-hmm. >> Well, maybe Amazon should include their ecosystem that would be a trillion dollar revenue number, so all companies don't look the same. >> That's right. >> And so from an enterprise that's a challenge. >> Chris: Mm-hmm. >> Do I got to hire developers for Asger, do I got to hire developers for Amazon, do I got to hire developers for Google. >> Chris: Mm-hmm. >> There's no stack consistency across private enterprises to cloud. >> Chris: So I have-- >> Because I'm a storage guy, I've got Netapp drives and now I've got an Amazon thing. I like Amazon, but now I got to go Asger, what the hell do I do? >> I got EMCs here and I got Nimbles there and HP and I've still got tape from IBM from five decades ago, so, John, I got a great term for you that's going to be a key one, I think, in the ability. It's called histocompatibility, and this is really about... >> Oh, here we go. Let's get nerdy with the tape glasses on. >> It's really about the ability to be able to inter-operate with all this system and some of these systems are live systems, they're current systems. Some of it's garbage that should've been thrown out a long time ago and actually recycled. So I think histocompatibility is going to be a really, really big deal. >> Well, keep the glasses on. Let's get down in the weeds here. >> Okay. >> I like the-- With the pocket protector, if you had the pocket protector we'd be in good shape. >> Yep. >> So, vendors got to compete with these buzzwords, become buzzword bingo, but there are trends that you're seeing. You've done some analysis of how the positionings and you're also a positioning guru as well. There's ways to do it and that's a challenge is for suppliers, vendors who want to serve customers. They got to rise above the noise. >> Chris: That's right. >> That's a huge problem. What are you seeing in terms of buzzword bingo-- >> Oh, my goodness. >> Because like I said, I used to work for HP in the old days and they used to have an expression, you know, don't call it what it is because that's boring and make it exciting, so the analogy they used was sushi is basically cold, dead fish. (laughing) So, sushi is a name for cold, dead fish. >> Chris: Yeah. >> So you don't call your product cold, dead fish, you call it sushi. >> Chris: Right. >> That was the analogy, so in our world-- >> Chris: That was HP-UX. >> That was HP-UX, you know, HP was very engineering. >> Yes. >> That's not-- Sushi doesn't mean anything. It's cold, dead fish, that's what it is. >> Right. >> That's what it does. >> That's right. >> So a lot of vendors can error in that they're accurate and their engineers, they call it what it is, but there's more sex appeal with some better naming. >> Totally. >> What are you seeing in terms of the fashion, if you will, in terms of the naming conventions. Which ones are standing out, what's the analysis. >> Well, I think the analysis is this, you start with your adjectives with STEM words, John, and what I mean by that is things like histocompatibility. It could start with things like agility, flexibility, manageability, simplicity, all those sorts of things, and they've got to line those terms up and go out there, but I think the thing that right now-- >> But those are boring, I saw a press release saying we're more agile, we're the most effective software platform with agility and dev ops, like what the hell does that mean? >> Yeah, I think you also have to combine it with a heavy degree of hyperbole, right? So hyperbole, an off-the-cuff statement that is so extreme that you'd never really want to be tested on it, so an easy way to do that is to add hyper in front of all that. So it's hyper-manageability, right, and so I think we're going to see a whole new class of words. There are 361 great adjectives with STEMs, but-- >> Go through the list. >> Honestly. >> Go through the list that you have. >> I mean, there's so many, John, it's... >> So hyper is an easy one, right? >> Hyper is easy, I think that's a very simple one. I think now we also see that micro is so big, right, because we're talking about microservices and that's really the big buzzword in the industry right now. So everything's going to be about micro-segmenting your apps and then allowing those apps to be manifest and consumed by an uber app, and ultimately that uber app is an ultra app, so I think ultra is going to be another term that we see heading into the spectrum as well. >> And so histocompatibility is a word you mentioned, just here in my notes. >> Yep. >> You mentioned, so histo means historical. >> Exactly. >> So it means legacy. >> Chris: That's right. >> So basically backwards compatible would be the boring kind of word. >> Chris: That's right. >> And histocompatibility means we got you covered from legacy to cloud, right. >> Uh-huh. >> Or whatever. >> You bet. >> Micro-segmentility really talks to the granularity of data-driven things, right? >> That's right, another one would be macro API ability, it's kind of a mouthful, but everyone needs an API. I think we've seen that and because they're consuming so many different pieces and trying to assemble those they've got to have something that sits above. So macro API ability, I think, is another big one, and then lastly is this notion of mobility, right. We talk about-- As you said earlier, we talked about clouds and going from-- It's not just good enough to talk about hybrid cloud now, it's about multi-cloud. Well, multi-cloud means we're thinking about how we can place these apps and the data in all kinds of different spaces, but I've got to be able to have those be mobile, so hyper-mobility becomes a key for these applications as well. >> So hyper-scale we've seen, we've seen hyper-convergence. Hyper is the most popular-- >> Chris: Absolutely. >> Adjective with STEM, right? >> Chris: It's big. >> STEM words, okay, micro makes sense because, you know, micro-targeting, micro-segmentation, microservices, it speaks to the level of detail. >> Chris: Right. >> I love that one. >> Chris: Right. >> Which ones aren't working in your mind? We see anything that's so dead on arrival... >> Sure, I think there's a few that aren't working anymore. You got your agility, you got your flexibility, you got your manageability, and you got your simplicity. Okay, I could take all four of those and toss those over there in the trash because every vendor will say that they have those capabilities for you, so how does that help you distinguish yourself from anyone else. >> So that's old hat. >> It's just gone. >> Yeah, never fight fashion, as Jeremy Burton at EMC, now at Dell Technologies, said on theCUBE. I love that, so these are popular words. This is a way to stand out and be relevant. >> That's right. >> This is the challenge for vendors. Be cool and relevant but not be offensive. >> Yeah. >> All right, so what's your take on the current landscape for things like how do companies market themselves. Let's say they get the hyper in all the naming and the STEM words down. They have something compelling. >> Chris: Right. >> Something that's differentiated, something unique, how do companies stand out above the crowd, because the current way is advertising's not working. We're seeing fake news, you're seeing the analyst firms kind of becoming more old, slower, not relevant. I mean, does the Magic Quadrant really solve that problem or are they just putting that out there? If I'm a marketer, I'm a B2B marketer. >> Yeah. >> Obviously besides working with theCUBE and our team, so obviously great benefits. Plug there, but seriously, what do you advise? >> Yeah, I think the biggest thing is, you know, you think about marketing as not only reaching your target market, but also enabling your sales force and your channel partners, and frankly, the best thing that I've found in doing that, John, is starting every single piece that we would come up with with a number. How much value are we generating, whether it's zero clicks to get this thing installed. It's 90% efficiency, and then prove it. Don't just throw it out there and say isn't that good enough, but numbers matter because they're meaningful and they stimulate the conversation, and that's ultimately what all of this is. It's a conversation about is this going to be relevant for you, so that's the thing that I start with. >> So you're say being in the conversation matters. >> Absolutely. >> Yeah. >> Absolutely. >> What's the thought leadership view, what's your vision on how a company should be looking at thought leadership. Obviously you're seeing more of a real-time-- I call it the old world was batch marketing. >> Chris: Mm-hmm. >> E-mail marketing, do the normal things, get the white papers, do those things. You know, go to events, have a booth, and then the new way is real-time. >> Chris: Mm-hmm. >> Things are happening very fast-- >> That's right. >> In the market, people are connected now. It's a global, basically, message group. >> That's right. >> Twitter, LinkedIn, Facebook and all this stuff. >> It's really an unfulfilled need that you guys are really looking to fill, which is to provide that sort of real-time piece of it, but I think vendors trip over themselves and they think about I need a 50 page vision. They don't need a 50 page vision. What they need is here are a couple of dimensions on which this industry is going to change, and then commit to them. I think the biggest problem that many vendors have is they won't commit, they hedge, as opposed to they go all in behind those and one thing we talk about at Chasm Institute is if you're going to fail, fail fast, and that really means that you commit full time behind what you're pushing. >> Yeah, and of course what the Chasm, what it's based upon, you got to get to mainstream, get to early pioneers, cross the chasm. The other paradigm that I always loved from Jeffrey Moore was inside the tornado. Get inside the tornado because if you don't get in you're going to be spun out, so you've got to kind of get in the game, if you will. >> Chris: That's right. >> Don't overthink it, and this is where the iteration mindset comes in, "agile" start-up or "agile" venture. Okay, cool, so let's take a step back and reset to end the segment here. >> Mm-hmm. >> Re:Invent's coming up, obviously that's the big show of the year. VMworld, someone was commenting on Facebook VMworld 2008 was the big moment where they're comparing Amazon now to VMworld in 2008. >> Chris: Right. >> But you know, Pat Gelsinger essentially cut a great deal with Andy Jassy on Vmware. >> Chris: Right. >> And everything's clean, everything's growing, they're kicking ass. >> Chris: Mm-hmm. >> They got a private cloud and they got the hybrid cloud with Amazon. >> Yeah, it's that VMcloud on Amazon, that really seems to be the thing that's really driving their move into the future, and I think we're going to see from both of those folks, you are going to see so much on containers. Containerization, ultra-containers, hyper-containers, whatever it may be. If you're not speaking container language, then you are yesterday's news, right? >> And Kubernetes' certainly the orchestration piece right underneath it to kind of manage it. Okay, final point, what's in store for the legacy, because you're seeing a few major trends that we're pointing out and we're watching very closely, which really I put into two buckets. I know Wikibon's a more disciplined approach, I'm more simple about that. The decentralization trend we're seeing with Blockchain, which is kind of crazy and bubbly but very infrastructure relevant, this decentralized, disrupting, non-decentralized incumbence, so that's one trend and the other one is what cloud's doing to legacy IT vendors, Oracle, you know, these traditional manufacturers like that HP and Dell and all these guys, and Netapp which is transforming. So you've got disruption on both sides, cloud and like a decentralized model, apps, what's the position, view, from your standpoint, for these legacy guys? >> It's going to be quite an interesting one. I think they have to ride the wave, and I'll steal this from Peter Levine, from Andreessen, right? He talks about the end of cloud computing, and really what that is is just basically saying everything is going to be moving to the edge and there's going to be so much more compute at the edge with IOT and you can think about autonomous vehicles as the ultimate example of that, where you're talking about more powerful computers, certainly, than this that are sitting in cars all over the place, so that's going to be a big change, and those vendors that have been selling into the core data center for so long are going to have to figure out their way of being relevant in that universe and move towards that. And like we were talking about before, commit to that. >> Yeah. >> Right, don't just hedge, but commit to it and move. >> What's interesting is that I was talking with some executives at Alibaba when I was in China for part of the Alibaba Cloud Conference and Amazon had multiple conversations with Andy Jassy and his team over the years. It's interesting, a lot of people don't understand the nuances of kind of what's going on in cloud, and what I'm seeing is it's essentially, to your point, it's a compute game. >> Chris: Yeah. >> Right, so if you look at Intel for instance, Alibaba told me on my interview, they don't view Intel as a chip company anymore, they're a compute company, right, and CJ Bruno, one of the executives there, reaffirmed that. So Intel's looking at the big picture saying the cloud's a computer. Intel Inside is a series of compute, and you mentioned that the edge, Jassy is building a set of services with his team around core compute, which has storage, so this is essentially hyper-converged cloud. >> That's right. >> This is a pretty big thing. What's the one thing that people might not understand about this. If you could kind of illuminate this trend. I mean, the old Intel now turned into the new Intel, which is a monster franchise continuing to grow. >> Mm-hmm. >> Amazon, people see the numbers, they go oh, my god, they're a leader, but they have so much more headroom. >> Chris: Right, right. >> And they've got everyone else playing catch up. >> Yeah. >> What's the real phenomenon going on here? >> I think you're going to see more of this aggregation phenomenon where one vendor can't solve this entire problem. I mean, look at most recently, in the last two weeks, Intel and AMD getting together. Who would've thought that would happen? But they're just basically admitting we got a real big piece of the equation, Intel, and then AMD can fulfill this niche because they're getting killed by NVIDIA, but you're going to see just more of these industry conglomerations getting together to try and solve the problem. >> Just to end the segment, this is a great point. NVIDIA had a niche segment, graphics, now competing head to head with Intel. >> Chris: That's right. >> So essentially what's happening is the landscape is completely changing. Once competitors no longer-- New entrants, new competitors coming in. >> Chris: Mm-hmm. >> So this is a massive shift. >> Chris: It is. >> Okay, Chris Cummings here inside theCUBE. I'm John Furrier of CUBE Conversation. There's a massive shift happening, the game has changed and it's incumbent upon start-ups, venture capital, you know, Blockchain, ICOs or whatever's going on. Look at the new chessboard, look at the game and figure it out. Of course, we'll be broadcasting live at AWS re:Invent in a couple weeks. Stay tuned, more coverage, thanks for watching. (techy music playing)

>> Announcer: From Denver, Colorado, it's theCUBE covering Super Computing '17. Brought to you by Intel. (upbeat techno music) Hey welcome back, everybody. Jeff Frick here with theCUBE. We're at Super Computing 2017 in Denver, Colorado. It's our first trip to the show, 12,000 people, a lot of exciting stuff going on, big iron, big lifting, heavy duty compute. We're excited to have our next guest on. He's Jim Wu, he's the Director of Customer Experience for Falcon Computing. Jim, welcome. Thank you. Good to see you. So, what does Falcon do for people that aren't familiar with the company? Yeah, Falcon Company is in our early stages startup, focus on AVA-based acceleration development. Our vision is to allow software engineers to develop a FPGA-based accelerators, accelerators without FPGA expertise. Right, you just said you closed your B round. So, congratulations on that. >> Jim: Thank you. Yeah, very exciting. So, it's a pretty interesting concept. To really bring the capability to traditional software engineers to program for hardware. That's kind of a new concept. What do you think? 'Cause it brings the power of a hardware system. but the flexibility of a software system. Yeah, so today, to develop FPGA accelerators is very challenging. So, today for the accelerations-based people use very low level language, like a Verilog and the VHDL to develop FPGA accelerators. Which was very time consuming, very labor-intensive. So, our goal is to liberate them to use, C/C++ space design flow to give them an environment that they are familiar with in C/C++. So now not only can they improve their productivity, we also do a lot of automatic organization under the hood, to give them the highest accelerator results. Right, so that really opens up the ecosystem well beyond the relatively small ecosystem that knows how to program their hardware. Definitely, that's what we are hoping to see. We want to the tool in the hands of all software programmers. They can use it in the Cloud. They can use it on premises. Okay. So what's the name of your product? And how does it fit within the stack? I know we've got the Intel microprocessor under the covers, we've got the accelerator, we've got the cards. There's a lot of pieces to the puzzle. >> Jim: Yeah. So where does Falcon fit? So our main product is a compiler, called the Merlin Compiler. >> Jeff: Okay. It's a pure C and the C++ flow that enables software programmers to design APGA-based accelerators without any knowledge of APGA. And it's highly integrated with Intel development tools. So users don't even need to learn anything about the Intel development environment. They can just use their C++ development environment. Then in the end, we give them the host code as well as APGA binaries so they can round on APGA to see a accelerated applications. Okay, and how long has Merlin been GA? Actually, we'll be GA early next year. Early next year. So finishing, doing the final polish here and there. Yes. So in this quarter, we are heavily investing a lot of ease-of-use features. Okay. We have most of the features we want to be in the tool, but we're still lacking a bit in terms of ease-of-use. >> Jeff: Okay. So we are enhancing our report capabilities, we are enhancing our profiling of capabilities. We want to really truly like a traditional C++-based development environment for software application engineers. Okay, that's fine. You want to get it done, right, before you ship it out the door? So you have some Alpha programs going on? Some Beta programs of some really early adopters? Yeah, exactly. So today we provide a 14 day free trial to any customers who are interested. We have it, you can set up your enterprise or you can set up on Cloud. Okay. We provide to where you want your work done. Okay. And so you'll support all the cloud service providers, the big public clouds, all the private clouds. All the traditional data servers as well. Right. So, we are twice already on Aduplas as well as Alibaba Cloud. So we are working on bringing the tool to other public cloud providers as well. Right. So what is some of the early feedback you're getting from some of the people you're talking to? As to where this is going to make the biggest impact. What type of application space has just been waiting for this solution? So our Merlin Compiler is a productivity tool, so any space that FPGA can traditionally play well that's where we want to be there. So like encryption, decryption, video codec, compression, decompression. Those kind of applications are very stable for APGA. Now traditionally they can only be developed by hardware engineers. Now with the Merlin Compiler, all of these software engineers can use the Merlin Compiler to do all of these applications. Okay. And when is the GA getting out, I know it's coming? When is it coming? Approximately So probably first quarter of 2018. Okay, that's just right around the corner. Exactly. Alright, super. And again, a little bit about the company, how many people are you? A little bit of the background on the founders. So we have about 30 employees, at the moment, so we have offices in Santa Clara which is our headquarters. We also have an office in Los Angeles. As well as a Beijing, China. Okay, great. Alright well Jim, thanks for taking a few minutes. We'll be looking for GA in a couple of months and wish you nothing but the best success. Okay, thank you so much, Jeff. Alright, he's Jim Lu I'm Jeff Frick. You're watching theCUBE from supering computing 2017. Thanks for watching. (upbeat techno music)

(uplifting music) >> Hello, everyone. Welcome to theCUBE Conversations here at the Palo Alto Studios for theCUBE. I'm John Furrier the co-host of theCUBE, co-founder of SiliconANGLE. We're here for Thought Leader Thursday, and my guest here to talk about the cloud, earnings in the industry, and also all the mega trends happening is Tarun Thakur, who is the co-founder and CEO of Datos.IO, hot start up out of Los Gatos, California. Welcome back to theCUBE, great to see you. >> Thank you, John, thank you, good to be back. >> We love having entrepreneurs come in because you guys are on the cutting edge, you're sweating bullets, you're stressing out, you're building the company. You guys are still in a growth mode, which is great, congratulations. >> Thank you. >> But you're also playing in the cloud game. You're in the ecosystem. We're seeing massive visibility now into the numbers. You see the cloud earnings just came out. Amazon continues to crush it. Microsoft, they're bundling 365 and they're juicing the numbers up but we all know what's going on there, but still, they're looking good. >> Correct. >> And then Google's a dark horse with really that developer platform looking good. So the big three are popping. But, you know, Facebook just announced a $10 billion quarter. They're a cloud too, not to be reckoned with, but kind of not in the pure infrastructures of service. So clearly the market has shown that there is some stability. We're in the second, third inning maybe of this cloud game. What's your take on the marketplace? >> No, I think this is an excellent topic. Thank you, John, for again having us back. Always great to be here. So, you know, the way I think about what's happening really in the cloud is really from three dimensions. Number one, you know, you rightly said $20 billion is what Amazon is on a run rate business of. We personally believe it's still the first innings. It's not the second or the third. You know, they've seen a massive adoption as its called the product market for developilabilty, where the developers, where the application developers, where the SMBs of the world, but the enterprises are just starting to scratch the surface of the cloud. We believe the cloud is in the first innings. The real growth. >> Enterprise cloud. >> Enterprise cloud is just beginning. Just beginning, right. I was, you know, I'll give you quickly an example. I was out in Denver visiting a customer, which is the world's largest, one of the world's largest, shipping companies. They are moving as fast as possible to the cloud, but this is their first foray. But their first foray is not five terabytes or 50 terabytes. Their first foray is 50 petabytes of data. >> So they're moving big time. >> Oh, they're moving big time. >> This is not a toe in the water. >> No, they took two years to evaluate it, and then they go big. >> Right, so talk about the trends here because let's tease through the numbers. I looked at all the earnings, and again, Microsoft is doing well, but remember, they're bundling Office 365, which kind of puts Google unnoticed because Google's got a huge presence that they could roll in. So there's a lot of number games going on that the analysts are kind of pointing out, and we're pointing out, but Amazon has just been crushing it on overall performance. >> Right. >> I mean look at the compute that's going on, the scale, they've got thousands of enterprise customers, and still there's a lot more growth there because the on-prem, true private cloud, is still growing. >> That's correct. >> So what is the state of the enterprise now, and who is using the public cloud more, and who's using it less, and why are they doing that? Is it a makeup, is it a DNA culture? Is it just evolution? >> No, it's just evolution, John. I think the enterprises are finally latching on to this, I think they are, but they're latching on it in a big way. Right, and so that's the second point that I sort of wanted to highlight that while you call Google the Trojan horse, and Amazon being the lead, and then Microsoft somewhere in the middle, let's not forget about Oracle cloud. Larry Ellison is a formidable competitive spirit. He's not going to give up. He has not given up so far. They are going to build an Oracle cloud. There will be a-- >> Well they have an Oracle cloud. >> They have an Oracle cloud. But, you know, having versus really truly-- >> It's so funny, Larry Ellison called Salesforce a fake cloud, but a lot of people are calling Oracle a fake cloud. >> A fake cloud. >> But Oracle on Oracle, we've entered Dave Donatelli, Larry is the only one that hasn't come on theCUBE. Oracle cloud works great with Oracle. >> Correct. >> They're trying to put the message out there that Oracle is working well with cloud native. They're in the Cloud Native Foundation now. >> Sure, sure. >> CNCF, so you stayed in Oracle amidst Avery and folks over there doing a great job, so, but they're not getting the word out. Oracle's not getting the job done because no one sees Oracle as a cool cloud native company. >> No, and they're not. And I think that's a very valid point. But what I'm saying is that there will be room There is oxygen in this market to get the fourth and the fifth cloud provider. There will be specialized clouds. And there will be places for that. Because Amazon is not an answer for all. It is definitely an answer for majority of your workloads, but the HPC, the high performance computing workloads, the GPU workloads, the Oracle. You know, you look at the number one database in the cloud that Amazon claims openly is MySQL. It's not Oracle. An Amazon database business, if they're making 20 billion in total AWS, I will tell you about 40% or 50% of their business is database. And that's not Oracle. So think of five to $10 billion of revenue and money that Amazon is making is not Oracle. >> What's that mean? Does that mean Oracle's losing money or. That's leakage on Oracle's model? Is that Oracle still has an opportunity? Cause they still control a lot of databases. >> Thank you and, thus, thank you, thank you for asking that. It's not that Oracle is losing money, it's the next generation applications, it's the cloud enabled applications. >> So it's growth, it's pure growth. >> It's the new oxygen, it's the new wealth creation. >> So it's like the classic example when the internet started. Web traffic increased because more people were using the internet. >> Correct. >> So what you're saying is that cloud has created a more database market. Amazon's getting a big chuck of it there, but Oracle still has the database market. >> For example if you look-- >> And SAP too. >> And look at the third reason of these clouds, if you look at AIML, right, these applications, the Alexa, the Siri-like applications, and the applications that will be built on top of this, will be built in the cloud. You're not going to start building Alexa AI application on prem infrastructure. That is not happening. And that's the third part of this whole cloud. We say it's $20 billion and we have barely scratched the surface on AI, ML, and blockchain. And all those applications that will be built, will be built on cloud elastic infrastructure. >> Alright, so what's your take? I mean, right now Amazon's winning the cloud game, Oracle, I wouldn't call them number four, but they're trying to juice the numbers up as well, but they clearly have an installed base, and they're not going anywhere. >> Tarun: Captive audience. >> SAP is going multi-cloud, so you're seeing SAP starting to put their, looking at saying, hey, we want our customers to run Oracle SAP on any cloud, so they're clearly thinking multi-cloud. Who else is out there? Alibaba cloud is now coming to the US in San Mateo, so they're number seven cloud but four worldwide, right? >> Tarun: Correct. >> So, pure worldwide numbers, Alibaba's four. >> Yes, so I'll start with Ali cloud. You know, you talk about Alibaba, their cloud is called Ali cloud, and fortunately, as you're building a company, as you talked about earlier on in our offline conversation, you get to meet all the way from governed DoD's and DIA's of the world too. We worked with Ali cloud executive team just a few weeks ago and they were out here in the bay area. Didi is the de facto car hailing company, it's not Uber, in China. We believe Ali cloud will be that in China. There will be a fifth cloud, there will be a sixth cloud. To my point, there will be specialized clouds. Amazon's not going to win this entire pie. And there will be clouds outside of US markets. >> Well I had a chance to tell Karen Lu and Dr. Min Wen Li as well as Dr. Wong at Alibaba in China a few weeks ago, and if you look at what they're doing in China, it's not just cloud. They've got eCommerce, they've got the city brain project. They're looking at holistically around data. Data's fundamental to their vision. I think that's consistent with what we're seeing in the US. A little bit more broader scope because IT here is a little bit more, has more legacy. China's got much more focus and got some government controls in there to get some latitude to do the right things. But the consumers are moving faster in China. If you look at the mobile growth. >> Absolutely. >> John: Huge indicator. >> Look at the Didi's growth. Didi's growth is more faster than Uber's growth. Right, and they've built a massive, massive company out there. >> IoT is pretty hot in China, you're starting to see that. I mean, this is a re-imagining of cloud, so you guys are in the middle of it with back on the road recovery. So as a CEO you're in the body swerving, car's that are flying by you, you're trying not to get run over. You've got a good market opportunity with the cloud because GDPR's coming right around the corner. >> Yes, yes, absolutely. >> So what's your strategy? Are you, I mean, I'm paraphrasing, not dodging cars, but, I mean, as a start up you've got to worry about your success might kill you, but how do you manage the business? I mean, how are you looking at this? Because you've got a great opportunity, and it's a growth market. >> Thank you, thank you. No we're lucky and fortunate that some of the decisions we made back four years ago people used to laugh, why are you going in this market of cloud data applications and isn't eight out of $10 dollars being spent on Oracle. Why would you go off to that. And, we're like, guys that's today. Where the puck is going. The puck is going towards the cloud and cloud applications. And to answer your question, we've found beautiful beautiful excellent product market fit. A little bit about the company. >> John: What's the use case? >> We're just classically going backup in recovery use cases. Built for cloud native applications. So, for example, I talked about the number one database in the cloud is MySQL. The number two database on prem is SQL Server. Take a guess on number two database in the cloud. It's MongoDB, they just went IPO two weeks ago. Number two database on Amazon is MongoDB. Who thought that five years ago? >> Well Lamp Stack its just open stores driving a lot of this action. >> So, I'll give you an example, one of our biggest, biggest customers which we're going to be announcing very soon, but take the liberty to share here, OpenTable. OpenTable, we are protecting OpenTable. 2.5 billion documents. That's yours and my reservation. That's your and my reservation that we make for a beautiful restaurant. >> Yeah, and if I change that reservation I've got to have that backed up, but want to bring it back. You guys are doing that. So what's the scale of the OpenTable? Ballpark it. >> So all their entire reservation applications. >> The whole thing. >> I probably will not talk about the datasets. You know, but their entire geo-distributed applications. You could be sitting in New York or you could be in London. >> And in which cloud are they using? >> They are all Google cloud, they're on prem. So they're truly private cloud and public cloud. So I call that a multi cloud data management space. They've a ton of stuff still on prem. They're not going to diverge away from that very quickly. >> What's the Google situation? Sam Ramji is over there doing a great job. Google Next is coming up soon, next year. Great traction, but still people aren't considering Google as the white glove service because, well, Amazon's not really known for that either, but at least they have a lot more, thousands more customers than Google does. >> Yeah so I think that the problem is twofold, in my humble opinion. Or the observation is twofold. One, I think Google needs to amp up their game around cloud and cloud messaging. You open Amazon AWS.cloud website, and you open GCP website, you could just see the differences. How Amazon talks about cloud. You're still selling compute storage network, but they talk business agility. What took a month for SQL Server now takes two hours. That's what you're selling, right? >> You're selling speed and you're selling automation, and you're selling value. >> Orchestration. So I think Google has to amp up their game, and amp up their game around that. >> Are they too technical, too geeky? >> Too nerdy, too geeky and still talking about infrastructure. >> Yeah sure, and I think Sam knows that too. >> And I think second part, which is, you know, they absolutely need to amp up their game not go head on and follow Amazon, find the newer applications and new use cases, where they can go ahead of Amazon. Whenever you're playing Art of War, either you can follow somebody or you go establish your own base. >> If they go frontal attack on these guys they'll lose, they've got to play the shadows. I think they can slingshot around them. I think the developer traction they have is strong, even though Amazon's got strong developer traction. Google's got some goodness with TensorFlow, they've got some great technology, but they've got to stop the game of we're Google, go with us. Enterprises don't work that way even though I get why they say that cause it's true. At some level from a alpha geek perspective, but this isn't the land of alpha geeks, these are real people that have jobs and enterprise IT that won't transform. >> They're real enterprises, who have real DBAs, and real server admins who really care about data services. Going back to the comment-- >> Not just the shiny new toy. I need reliability, proof. >> I want durability of this data. Don't just tell me I can get compute 10 times cheaper than Amazon. That's not what I care about. Change my, talk my language. I care about data services. I called data driven enterprises. >> Okay, as you guys go out and talk to customers, give me the anecdotal view of the landscape of customers. Because obviously the earnings came out. We saw, again, Amazon continuing to do well. But they've got some competition. We just laid and unpacked that. Customers now see this. What's kind of the the conversations in the boardrooms, and then in the trenches in IT and enterprise as they transform because IT is not a department anymore in the future enterprise. It's now a fabric of all things in cloud native. What are the conversations? Are they slowing down, obviously they want to go faster, is it a personnel issue? What are some of the conversations? >> I'll give you real example. We presented recently to a big, massive federal government agency. We cannot take their name out of legal. >> John: They spend a lot of money. >> Out of Washington, D.C. out here in the Bay area. >> CIA. Or, NSA. >> You're looking at the start-ups in the Bay area, and they were like, look why had we ever adopted the IBMs, the mainframes, and the EMCs, and the Dells of the world. We also know the wealth of the innovation is here in Silicon Valley. Right, so they come out once a year. And I can tell you, John, spending two hours that we did with them earlier in the week, and they are accelerating their journey to the cloud. Things that were foreign terms like micro services, that's how they want to build these federal agencies now. Every application has to have microservices. They are not truly there. I'll tell you that. They are not there, but that is top of mind for the CIA. >> And gov cloud has grown very fast, fedramp, all these services. >> Amazon called it Commercial Cloud Service, c2s, built for the government. And that entire team was here. >> Well Tarun great job. Congratulations on your opportunity we just talked about. Datos.IO. You guys, it's Datos.IO if you want to check out the website. You're going to be at Reinvent, you're going to come on theCUBE, we'll be there with two sets. Again, I have 50, you're doing Amazon, love the community there, they do a great job, Andy Jassy comes on, great group, Trace Carlson, among others. What are you expecting to see this year at Amazon? Besides the fact that it's going to be crowded and certainly the show of the year in terms of cloud. >> Momentum, they're going to accelerate the momentum. The amount of services they're planning to announce from, because we work with the team very closely, and the amount of acceleration they're showing, the new partners coming on board, and the partners like us who had one customer, and now we have 20 in Amazon cloud. You know, we just became an advanced technology partner, they understand that. >> So you're happy with how they're working with partners? >> Oh we love Amazon team. We became an advanced technology partner. They drilled us down for three months to prove themselves, yes, Datos can run on their infrastructure. You know, they want to go fast, but they want to go diligent fast. >> Yeah, we love Amazon too, of course. Our crowd chat solver's on their website as a case study using some of their stuff. Thanks so much for coming on, your final thoughts. Earnings, cloud, where are we? >> This is unstoppable force. It's an unstoppable force, we're in the first innings. There's so much opportunity ahead of us. And we couldn't have picked a beautiful market to than what we did. >> And true private cloud as we keep pointing out, turns out that's playing out. On prem activity's high. Your thoughts on on prem? True private cloud? >> It's going to survive, it's going to survive. But it's not going to be the growth place. >> But we think it will grow with the SaaS. >> With the Saas, I agree, but infrastructure. Infrastructure is not going to be growing. So that's our two cents, but you know, we'll be back in a couple of weeks, we have a phenomenal exciting product launch coming up. >> I just tweeted on Twitter this morning $1.5 billion is going to be coming out of on premise, non-differentiated labor operations. Which basically means, the rack and stacking some of these jobs are going to go away. But the growth is in automation, AI, and machine learning, and some SaaS tooling. >> Cloud applications. >> Cloud operations business models growing on premise. >> And those dollars are going to leak to the cloud. >> Yeah, and cloud, it's all to the cloud. Tarun, thanks so much. >> Thank you. >> Co-founder and CEO of Datos.IO. I'm John Furrier here for CUBE Conversation in Palo Alto at our studios, thanks for watching. (techno music)

(light adventurous music) >> Hello everyone, welcome to theCUBE Studios here in Palo Alto. I'm John Furrier, the co-host of theCUBE, co-founder of SiliconANGLE Media. This is our CUBE Conversation Thought Leader Thursday and I'm here with Val Bercovici, who's the founder and CEO of a new startup called PencilDATA. Val, CUBE alumni, been on many times with NetApp and then a variety of other great startups, but now you're doing your own thing around cryptocurrency, blockchain, enterprise-like technical infrastructure. You've been a CTO, now entrepreneur, founder and CEO of PencilDATA. Congratulations, you're on the crypto wave, this wave is coming. >> I believe it's here. >> It's here. >> Timing couldn't be better. >> So, I interviewed Dr. Jian Wang who's the chairman of Alibaba's technology steering committee, also the founder of Alibaba Cloud, just recently in China. Presented by Intel, plug for Intel there, thanks Intel for supporting theCUBE. He said to me, and I put the clip out on Twitter, natively on the video clip, which was, I asked him about blockchain, you know China, they blocked the ICOs, he said, "Blockchain is fundamental, part of the Internet. "It's as fundamental as TCP/IP was." This is the nuance that is attracting a lot of tier one entrepreneurs. Obviously the money side is hyped up beyond all recognition right now. As Don Klein on our team was saying, "It's melting up in terms of hype." But this really speaks to the transformation of the web, and the Internet now, the web is the Internet, from distributed and decentralized. This is a big sea change. Kind of building on the fundamentals of the internet, formerly called the information superhighway, before the web came along, but the web was designed to withstand nuclear disaster, be resilient, be decentralized. >> It reminds me of Back to the Future in many, many ways, because if you're as old as we are, you remember those DARPA origins of the Internet and exactly that decentralized nature, and we've gone away from that, right? As Tim Berners-Lee brought on the HTTP protocol, we've had web protocols, and as major, the FANG vendors have really dominated their usage of that existing layer of technology we've gone away, we've gone to a very, very centralized approach, which as we're seeing with the tech hearings this week, carries all sorts of risks, it's not just business and legal and political. >> And you're referring to the senate hearings, where Facebook, Google, or Alphabet, and Twitter were in front of the senate committee, you're going to tell them about the Russians, the Russian political thing, but they're bringing up the issue of the role of these mega platforms that have all this data and the problem is that this is not what the users bargained for. I mean, I use Facebook as a free app, I love Facebook, Facebook, we love you, WhatsApp here and there, and Instagram, but you know, my bargain was simple. I'll use your free app and I'll let you use some of my data but now you're making billions, $10 billion quarter, fake news has infiltrated the country, I have a poor user experience every day, it's getting worse and worse, a lot of hate and division. This is not what I bargained for. >> Val: Exactly. >> So the world's kind of revolting against these mega-siloed platforms. >> That's the risk of having such centralized control of the technology. If you remember in the old days when Microsoft's dominance was rising, all you had to do was target Windows as a virus platform and you're able to impact thousands of businesses, even in the early Internet days, within hours. And it's the same thing happening right now, there's a weaponization of these social media platforms and Google's search engine technology and so forth. It's the same side effect now, the centralization of that control is the problem. One of the reasons I love the blockstack technology, and blockchain in general is the ability to decentralize these things right now, and the most passionate thing I care about nowadays is being driven out of Europe, where they have a lot more maturity in terms of handling these new scenarios. >> You mean the tech being driven out of Europe. >> The laws. >> The laws, okay. >> Being driven out of Europe. >> Be specific, we'd like an example. >> The major deadline that's coming up in May 25th of 2018 is GDPR, General Data Protection Regulation, where European citizens now in any company, American or otherwise, catering to European citizens, has to respond to things like the right to be forgotten request. You've got 24 hours, as a global corporation with European operations, to respond to European citizens', EU citizens', right to be forgotten request, where all the personally identifiable information, the PII, has to be removed and an audit trail, proving it's been removed, has to be gone from two, three hundred internal systems within 24 hours. And this has teeth by the way, it's not like the $2.7 billion fine that Google just flipped away casually, this has up to 4% of your global profits per incident where you don't meet that requirement. >> Well you bring up a good point, the GDPR is a good one, it has teeth and it's kind of in the weeds with the folks who might not know that regulation, but really it's about the privacy and the rights of the individual. But coming back to Facebook, to connect another dot is, what we're seeing with Facebook, Twitter, and Alphabet with the senate hearings is, and this is why the industry and the media is crumbling, publications are dying, the newspapers, the media's changing, is because knowing your customer is a really important thing. The people who want to be served need to have a closed loop with the publication, and these platforms are bogarting all the data, and so the right of the customer, the users are suffering, and that's what people are generally talking about. You know, personally, a guy can rent a truck and go mow people down in Manhattan, we should know who these people are, like the neighbors, so I think there's going to be a trend towards knowing who your neighbor is, knowing who the customers are, at a level that's not scary privacy violation, but we're going to know who the crazies are, we're going to know what's going on and then that's kind of out there, that's kind of my general feeling. But now, getting back to the impact. GDPR, these big mega platforms where the users are at the center of the value proposition, really comes down to the shift in user expectations around a decentralized Internet. That means agile goes to a whole other level. If I'm a user and I say, "Hey Facebook, "delete my digital exhaust or digital footprints "from Facebook over the past 10 years." I mean, that's hard to do. >> That's hard for them. >> That's not, technically is a really serious problem. >> And it's actually not just a technology challenge, I always love to go back to Conway's Law in these discussions, the org chart, you know, how information, infrastructure is budgeted for, and managed through various different departments within any large enterprise, data-savvy or not, is a challenge, as is coordinating these efforts, actually going beyond the talking phase, towards implementing a master data model. Those are the main challenges right now, and it's a movement that I believe now has political strength to actually migrate across the pond. Over here as well there's a groundswell movement called Digital Sovereignty as a response to GDPR in Europe, where people are realizing that they have the right to be sovereign over their data, their digital exhaust, their digital footprints online and that's a two-way street. You want and demand control over your data, but on the other hand your identity, which you control, has to be authentic as opposed to a fake identity, and your reputation has to be out there as well. >> These signals and these trends you were just referring to, to me are just like little tremors of the tectonic plates that are going to be changing, because if you look at the major shift in technology, let's take blockchain for instance, and look at the impact of a decentralized internet, now global, immutability with the ability now for more agile capability and not just permanent, "I want to erase things" that you're talking about, but three, the younger generation, if we look at what the young kids are doing, I have four kids, my oldest is 22, it's a gaming culture, right? It's a gaming culture, they're online all the time. They're not old like us, my son's like, "Dad, Google Search is for old people." I mean, that's a general sentiment, over-categorizing, but a combination of the new user experience, this younger generation, entrepreneurs and users, and these tremors we're seeing in the marketplace, signaling that, "hey Facebook, you might be too big for your britches," or, "hey Twitter, you got a bot problem, "hey all you gamers using Twitch," this is now a signal, where is it leading to? And where does blockchain in particular impact it? Because this is kind of where everything's converging to. >> So what I'd like to say right now is, you've got Marc Andreessen's premise that software is eating the world. If you extend that, data is feeding it, blockchain is valuing it, and it's AI that's automating it. So in my mind, particularly in my experience earlier this year in the AI industry, you realize that AI today really boils down to machine learning, which in itself boils down to deep learning, which boils down to data, your access to data. Professor Andrew Wang did this at the recent O'Reilly conference up in the city, he got up and lectured as the keynote instead of sharing slides and his number one, two, and three advice to everyone in the audience was, get the right datasets to train your model. If you don't have that you don't have a differentiated business, and that's what inspired PencilDATA, is my encountering of the cold start AI problem where the IP's in a public domain, public datasets are ubiquitous which is fantastic for academics, but as a business you can't differentiate unless you have access to the right datasets to train your models more specifically. >> Okay, as the founder and CEO of PencilDATA, that's your new startup, let's get into some of the reasons why you're starting it. What problem are you attacking? Obviously a pencil, I can see pencil and you erase things, it's got data... >> The internet is no longer written in ink, that's the premise. Now with Pencil you can erase some data. >> Well blockchain is immutable, so this is conflicting in my mind. Help me kind of rationalize this. The benefit of blockchain is everything's permanent, if you're on-chain as they say. >> Exactly. >> If you're off-chain, you could do some things. Is that kind of what we're getting at? >> We're mixing the best of both. So our premise is that again, whether you're an organization or an individual, you need to have, to survive in a new digital economy, control over your data. The blockchain part of it is the visibility side. If you don't know who's doing what to your data, you're far less likely to share it. And once you know who's doing what to your data, in an immutable blockchain, with a detailed audit trail, with strong authentication, of literally who's doing what to your data, gives you that visibility. Then you do what modern asset managers do. You can't really value an asset until you fully control it. And our premise is, you can't control something until you can take it back. So the notion of PencilDATA is the ability to go on-chain for the visibility and off-chain for managing data in encrypted containers, and if a data owner or publisher doesn't like how the subscriber's consuming their data, they have the power to revoke all downloaded copies. >> So is this kind of like a shadow blockchain model? I'm trying to find a mental model because I remember the old days back, I was breaking into the industry in the late '80s, early '90s, WORM drives, write once, read many. And you write it once, it's a laser, it was optical drives at the time. Also, demilitarized zones in networking was an area where there was a safe harbor kind of thing, where people could play around. What metaphor, what mental model can people take away from some of the things that you're trying to solve? Is it like a DMZ, is it like a-- >> The implementation's a lot like a DMZ and the business challenge and opportunity is that there's a lot of tension between protecting data, because we have an epidemic of data breaches right now, I think you're foolish if you're assuming that you haven't been breached yet but you might be, because everyone has been breached, personally and organizationally, so we have to deal with the rising need to protect data more and more. But at the same time, you can't stay in business if you don't optimize the monetization of the data you have. And so PencilDATA walks that fine line between letting you do both, letting you not just protect infrastructure, that's a whole other industry that we're not involved in, but literally protect data at the data level. If you look up terms like crypto anchor you'll see some of the technologies we're taking advantage of there. But being able to monetize data by unlocking all that latent value of data hidden behind firewalls. If you use a physics analogy of potential and kinetic energy, applied to data behind firewalls, there's hundreds of billions of dollars of value in latent data basically, potential data hiding behind firewalls, and when you can safely share it, give the owners control they've never had before, then you expose the value of that data for the first time. >> Alright, so let's take us through where you're at. Obviously super exciting, you're leveraging the blockchain and you've got an ICO, initial coin offering coming up but you're not just doing that for the sake of doing, there's a lot of scams out there, you're taking a little bit more of a pragmatic approach. Give us the status because you're the founder and CEO, what's the makeup of the team, how big are you guys, what are you guys looking for, obviously you're looking for team members most likely. >> We're looking for developers obviously. >> Where in the process are you? >> We are a two-month-old company. We're at the seed stage. And we've actually assembled a world-class team. You hear that a lot, but I'm really, really proud of the team members we have right now. >> World-class, are they from around the world and then they have class? Define world-class. >> They're worldly, like myself, I travel a lot. (laughter) An example, my chief privacy officer is Sheila Fitzpatrick, she's a worldwide recognized leader in data privacy, she's on many, many privacy boards in the US and EU and so forth, and she now is traveling nonstop lecturing on GDPR, itself specifically. She's one of those recognized-- >> Should you see yourself as a solution for GDPR, because that's, again, it does have teeth, I'll just say that we've been reporting on this through Wikibon, our research team as well as theCUBE, it comes up all the time and there's heavy fines associated with it, so it's not like- >> GDPR is the perfect use case because on the one hand, we have that audit trail that proves what you're doing with data. On the other hand we have a kill switch, that revocable use clause for data where you can literally comply with GDPR in minutes or seconds, as opposed to take a full 24 hours to scour database and delete selected records. >> Alright, so what about the product? Give us an example of the product. Will you be, first of all that's right around the corner, it's next year. >> Val: Yeah. >> I think it was a March or April's timeframe, I don't have the exact date but it's pretty soon. >> Public beta before the end of this year, version 1.0 first of second quarter next year. >> For you guys, PencilDATA. >> Yes. >> Clients, are you working with anyone right now, you have a handful? >> So we've actually got really interesting distribution partnerships that we're not in a position to announce right now but the top-tier brand name enterprise cloud vendors, both on the SaaS and infrastructure and database side, they're lining up to work with us. Because we're enabling amazing use cases in healthcare and life sciences, the ability to selectively share patient data with insurers, with healthcare providers, clinical trials now to share more information through differential privacy and collectively have more data to be processed and analyzed. Use cases are just off the charts. >> Well you know we go to all the big data shows, we're horizontally scaled on the event site circuit, but this is the number one thing that comes up, I want to move from batch marketing, batch process, batch business to real-time business, speed is essential, but it's always been a conflict between, how do I enable data to move really fast and be available for applications but protecting the privacy. >> Yeah. >> Do you solve that problem, is that something that you see yourselves solving? >> We aren't necessarily innovating on speed, of data movement, it's going to be a SaaS service. >> So it's availability model. >> It's availability of data that's really never been shared before and I think that's the key here, is we know there's a lot of value locked up behind corporate firewalls. The irony is, we don't even have to sell this outside firewalls initially, when you go to any medium-to-large size enterprise that has more than one site or more than one department, Sales doesn't trust Marketing and vice versa, Engineering doesn't trust Customer Support, neither of the four of them trust each other, so we're actually going to enable more data shared within an enterprise at first. >> So that's a starting point for you guys. >> That's a starting point, that's the easiest low-hanging fruit sale we have. >> Well PencilDATA, it's great stuff, Val, congratulations on that startup. I mean, you've got a world-class management team, and this kind of brings up a point that I've been banging on theCUBE pretty much every time I go out I'll talk about blockchain and ICO because you know, theCUBE is a very decentralized audience and that's a value that we're looking at as well with blockchain. I've got to ask you the personal question, from your own personal perspective, experience, executive and CTO, why is blockchain attracting so many A players? Because you're seeing a lot of what I call A players, entrepreneurs, technical geeks, really jumping into this because they can see it, they can smell the opportunity, and also, it also attracts the scammers as well, but specifically, why are these A players coming in? Is it, what are you hearing, what's the general vibe, what's the anecdotal reason? >> So as you said earlier on, it's a fundamental evolution of the core internet as a technology, as fundamental as HTTP and web was on top of TCP/IP back 20 years ago, but it's got that rare combination of not only being a technical innovation that empowers new use cases on the web, on the internet, it's also got immediate, amazing business applications as a store of value initially, as an actual valuation of various business processes, or datasets in my case, as an ability to exchange that value so transparently, so, in such a friction-less liquid manner, those are some of the amazing innovations it brings to the table and I think the most important thing is not to think of this as being able to do digital transformation or faster analog, it's about completely reimagining the exchange of value, measurement of value, and new kinds of businesses that just weren't possible before. >> And at all points of the stack, not the low levels and at the application level, the business logic, and to the geek side, right? >> Absolutely. >> You agree. I mean, that's great and as you know, theCUBE is looking at a blockchain ICO on down the horizon so keep an eye out for that, CUBEcoins could be in everyone's future, so we're super excited like you. >> I'm looking forward to your presale, just like I'm looking forward to mine. (laughing) >> Well, we'll see. But the bottom line is that this is what the reality is, you know, reimagining the applications is what people are thinking and I think people should beware of the scams out there, and then final question I want to ask you is, obviously we're both in the community together, with our teams. Share your perspective on the ecosystem, because obviously decentralization will change the nature of traditional ecosystems. >> Very much so. >> What's your vision on how the ecosystem will evolve, and how big is it now relative to these early markets? >> We're actually starting to enter the middle innings of the cloud game, if you will, we're seeing a very good maturity, a good diversification of profitable earnings and outcomes for the major cloud players, so I think we've gone well down the cloud path so far. But the decentralized world is in its infancy. It's embryonic right now. And I've always been a proponent of the multi-cloud environment and a multi-cloud world, and decentralization fundamentally is based on and depends on a multi-cloud, not just multi-region, but multi-data-center-in-a-closet scenario as well, to be able to actually have a democratic model for determining where the value is, where the value isn't, blockchain node style. And that is incredibly exciting to me, because that really cements this rebalancing of the pendulum between core and edge in terms of where processing and value happens. >> Yeah, and value exchange obviously now, markup links are becoming the du jour way to exchange value, users are in control, infrastructure equilibrium is interesting. Great stuff. And I'll say, perfect storm for innovation. The waves are coming. (laughing) >> You know, one thing I've learned over the years is, the innovation, change never stops. There's always an opportunity to innovate, and that's what I love about this movement. >> Blockchain, ICO, PencilDATA, check 'em out, Val Bercovici, founder and CEO, great friend of theCUBE, also really strong CTO, check these guys out. This wave of innovation around blockchain ICOs and infrastructure, reimagining, the future is here upon us at theCUBE, be right back with more, thanks for watching. (electronic music)

>> Narrator: Silicon Angle Media presents TheCUBE! Covering Alibaba Cloud's annual conference. Brought to you by Intel. Now, here's John Furrier.... >> Hi, I'm John Furrier of Silicon Angle Media based in the United States in Silicon Valley in Palo Alto, California. I'm also co-host of TheCUBE where we go out through the event and extract the signal from the noise. We're here in China, we are here with a business development director of America's for Alibaba Cloud International, Karen Lu. Thanks for taking the time. >> Karen: Sure, absolutely. >> So, it's exciting for us from the US to come to China to hear the (mumbles), but I'm blown away by the culture. It's not a B-to-B tech conference. It's not boring. It's exciting. Talk about the Alibaba Cloud. What's so special about Alibaba Cloud? >> Sure. Alibaba Cloud is actually the encumbered cloud provider in China, and further more we extend our reach into global market since two years ago, and our strategy for globalize our cloud services is really to bridge up the business communities from overseas to China, from US to China, from US to Asia-Pacific, and to connect the rest of the world as well. Our goal is set up the platform to enable our enterprise customers, our SMEs, small and medium customer base be able to utilize our platform to develop their applications, their vertical solutions to benefit their end users. >> Alibaba Cloud has come such a long way since 2009. So much has happened, Alibaba grew up as a company. It's not just e-commerce. It's intersecting e-commerce, entertainment and web services, which is the magical formula that consumers want. They don't want just a business solution or just do e-commerce. You guys have weaved that formula together. What's special about that formula, and why is Alibaba important to the folks in the United States? >> I think it's all about the ecosystem and what makes the people, the people's community, and business community benefit from the services we provided to the world, right? Not just the e-commerce platform that have been running for the past 18 years, but also entertaining, to the map services, location services, the data services like Ali Cloud is providing, and be able to put out those elements together, and benefit people's lives, and help to improve users' experience from globally. >> It's been impressive here in China. Now as you go outside of China in the globalization plan, what's the strategy, what's the tactics? What are you going to do? >> I think our value is to, as I mentioned earlier, bridge up the business communities, especially to enable the outside world benefit a huge market from Mainland China and rest of the world as well, so I think I think our key value is to enable the business communities and be able to help them reach out outside the world. That being said, one of our key globalization strategy is to be able to help the SME's, small and medium companies to benefit the new technologies to the level that they won't be able to get in the past. It's the old technologies. >> John: What's some of the statistics or facts, fun facts, or Alibaba stats in the US, North America, your presence there, can you share what the current situation is? >> Sure. I think things about two years ago, when we extend our reach in two your market, we now have more than two thousand customers from individual to startup, to medium enterprises, and to some very large enterprises in the world as well. People are from the communities get to know Alibaba Cloud and get to know Alibaba not only provide to the e-commerce services, the EWTP platform to the world. We're also brought the data technologies. We also provided the technologies to the world that benefit their reach to the world. >> Everyone talks about data-driven. You guys have a very specific data formula, data fueling, not just getting the data from engagement data and user data, but fueling data in for user experience. The question is as you go outside of China into the US, certainly you have a developer ecosystem, you have a business ecosystem. >> Correct. >> How do the folks benefit locally in the US, to our business, do they have have access to China? Is it the services, is it the technology? Can you share the benefits to the developers and to the businesses? >> Sure absolutely. We ran a program called the China Connect, and that's the program we help the business communities you have, from the IVs, the independent after vendors, from the sales providers and developers' opportunity of communities to be able to develop their applications and software, and bring those benefits to China market. Through this process, it's hard to navigate a brand new market, especially in China, without knowing the people, the communities, the culture, the business practices here, right? We actually provide a platform, a program to help them to get to know the market, and help them to land their business in China through this program, and help them, of course, expertise their business roles in China. >> A lot of people want to know what's inside their cloud. It's one of those things where this mysterious cloud. The security's a concern, but partnerships are critical. Talk about what's inside your cloud. Intel's a big partner. What's the Alibaba-Intel partnership like? >> It's a fantastic partnership. We have been established over the past years, and Intel is one of our strategic alliance in the marketplace. They provide us a lot from hardware to technology, in terms of helping us to establish the platform with the business communities, not only China, but globally, so we really appreciate Intel's partnership, and moving forward we are looking for more reciprocal partnership with Intel to be able to form more strategic partnership to be able to benefit the business communities, and people's communities as well. >> For the folks in the US, I'll say that this is an amazing conference. It's got a million people here. I don't even know the numbers. I'm sure you have the numbers handy, but it's a mix of developers. You have a crowded house here with developers, but you also have some business people. You have key partners. I saw some US companies here. What's the vibe at the event? What's the feeling here? You got a music festival three nights. It's not a boring tech conference. Is that by design? Share the stats, how many people are here? >> I guess this is the excitement of this, the conference, annually, we actually invite a lot of our customers from US, and the rest of the world to join us to share the excitement from China, to share the experience from Alibaba. Just like Jack said, the vision for us is to make people's lives more healthier and happier. The 2H strategy from us, right, is not just the hardworking. It's also the fun. It's also the the excitement for us to share these technologies, to share this platform, and to enable people to enjoy this technology. >> The scene I see here is interesting. I've seen at Apple, in the late 90's when Steve Jobs transformed that company, he had the vision of technology meeting liberal arts. That became their calling card. You guys have art and science come in together. It's not just scientists and developers. You have artists here because user experience is super important >> exactly. >> Is that part of the culture as science and art comes together because Jack is a charismatic leader. He's a culptive personality. Young Company. >> Karen: It is. >> Share the culture. >> It is. Just like Jack and other topic executives has been sharing with the community, we want to make sure technology is inclusive elements to everyone in the community, not just for the programmers or developers, or the very high-tech companies, right? It should benefit the entire society, and fun, of course, always as part of it to make people's life happier, and to make users' experience more satisfied. >> You had a career in international technology industry for a while. You see how it's played out in the past. We're in a different now. It's a global world. The internet has opened up a lot of good things, and sometimes not so good things. The US have the selection in fake news, but as the culture starts connecting, a new kind of normal is evolving. How does Alibaba see themselves in this new world order? >> I think we see ourselves as the enabler and platform to bring the technology, and bring the people, and bring the happiness together to benefit everyone in the world, not just the tech sectors, or just the e-commerce sectors, or just one of the single verticals. We are trying to bring the technologies, and the enablement, the platform that everybody can enjoy. That's the core value for us as the inclusive technology provider. >> For the folks in the United States that will see this video, share something that they may not know about Alibaba. Might be the first time in getting to see some of the culture and some of the commentary, what should they know about Alibaba as you guys move in and become global? They're going to see some services. Is it the services, is it the people, the culture, what should they engage with Alibaba at cloud? How should they see Alibaba Cloud? >> First of all, we are one of the top three cloud providers in the world. If you look at the latest (speaks in foreign language) released a couple of weeks ago, and that's why globalization is critical for us, and we want to be able to reach out to the overseas communities, and we want to build up the trust and the confidence with the local business communities, like the rating, where in US market for instance. For us, become the global family is critical for us, and this is our vision to bring the values to them as well. >> That's fantastic, spectacular culture, and the ecosystem is just now growing, open-source software is growing exponentially, global fabric of communities developing. It is opportunities for US companies and developers to access China. Talk a little bit more about the potential that entrepreneurs and businesses could have in this global framework. >> Sure. The beauty of cloud is actually the ecosystem. It's not just one company or one vertical. For us, for instance, we try to enable the small business, especially those startup business by offering them the free resources from our infrastructure at global level, be able to enable those young peoples, especially, to create their own ideas, to be innovative, and to utilize our resources, be able to access the technologies like the way the big companies has been invested into. This is, I think, as an example for us to commit to this global market. I think for us to be part of that family, especially in Silicon Valley is critical because of the technologies, because of innovations, and because of the mindset in Silicon Valley. That's why we set up our R&D centers, we set up our frontend back office in Silicon Valley as well be able to part of that reach in, and not only to learn the technologies, but sense the mindset in our reach in. I think that's critical for us as well as the Chinese headquarter of the company, but with a global vision. >> And where in Silicon Valley is your office? >> We're headquartered in San Mateo, California for US operations. >> And entrepreneurship is changing, and it's global. It's exciting. What's the benefit to entrepreneurship? Certainly, ventured capitalists are highly interested in the China market. They've been in here for a while. Is it coming together? >> Yes, it is indeed. Actually, not only we funding a lot of the new tech companies, we also been able to help them to find their partners to build up a extended ecosystem. In Silicon Valley, in West Coast reach ins, as well as extend from the inner US, in mid-western reach in, Chicago for instance, to New York coastal areas as well. >> I noticed on the sponsorship list and partner list in your ecosystem, a logo that is new, but it's super important in the US. It's growing like crazy. The Cloud Native Compute Foundation's here, and that's the Linux Foundation. They're partnering with you. The cloud native developer market is evolving very, very quickly. They're different than the old classic IT developers. A new generation, it's not IT anymore. It's data that's driving it, and it's open-source. How do you guys engage with that community because, clearly, they win with you. >> Yes. We're actually working with a lot of open-source partners like Docker, (mumbles), and others, be able to help them to bring the communities to bring their customers onto our infrastructures and create this platform to help the developer communities to develop their applications. It's a lot of vertical focus, the solution department tasks right now. >> Excuse me, you mentioned small, medium size enterprises and business, but the big enterprises are transforming as well. How do you see Alibaba helping them because they're going cloud native? They're going private cloud on premise. You have quantum computing. You even have IOT. You have a lot of things. How's the digital transformation message for enterprises and for small businesses that don't want to pay the technology tax. >> I think for large enterprises, the most strategy you have been seeing from the marketplace, one is multi-cloud strategy. People need redundancy. People want to reduce the dependencies for one or two cloud providers, and we work with other cloud providers in the community to provide interval qualities to support this multi-cloud strategies. On the other side, couple years back, people didn't know what's in a cloud. And then, people rush to cloud for everything. And now, people come back and review the strategies and find out hybrid-cloud strategy is more suitable for large enterprises. They have their on-prem architect and infrastructure. Meanwhile, they move some of their applications to cloud. It's a good combination of on-prem physical infrastructure cloud topology. We have been seeing a trend for both for large enterprise clients. For small business, especially for small business, they don't have the upfront huge investment paying to the infrastructure, and we provide them the instant access to the infrastructure, not only from computing storage network and the database perspective, more importantly from security perspective. >> The Alibaba Infrastructure services, I saw a part of the display here, very prominent in that equation. You guys have the scale. What can you share about the under-the-hood? What's the technology look like? What's the engine of Alibaba Cloud? How mature is it? What's to do? Where's the strategic direction? Block-chain is important, but now, that's changing everything It's all this new wave's coming. >> Just like the (speaks in foreign language) indicated two months ago, if you look at the overall qualifications to be a world lead cloud provider, we're number four, after AWS, Microsoft Azure, and Google Cloud, but if you look at market share and revenue, we're number three. That being said, we actually provide a very comprehensive technology, and the infrastructure to the business communities, and people's communities. For instance, from the global footprint perspective, right now, we have 14 reach ins, pretty much cover all the major market in the world. By end of this year into beginning of next year, we're going to activate two to three reach ins, make it 16 to 17 reach ins globally, that we can offer the global cloud solutions for the big and small businesses. >> That's exciting, and Silicon Valley certainly import our home base. Are you guys hiring, is there expanding? Share a little bit of a public service announcement on what's going on in the Silicon Valley area. You guys hiring, looking for engineers, what kind of people are you looking for? >> Yes, (laughs) great question. Actually, we are hiring, and we're looking for talented professionals join us from those marketing, business development, to cloud architect, to technical account management, to marketing premises, so we want to build up a business that we can truly build up the trust towards the local business communities. That's why we hire a lot of local talented young professionals, and to help them to be able to fit in to the culture, the unique culture of Alibaba, and also be able to contribute to this journey, very exciting journey... >> China has always been big. Everyone in the United States knows. The numbers are big here in terms of mobile deployment, app size. A lot of the people in the US look at China and say, "Wow, we can collaborate with China." It's a very nice distribution system, but they got to take care of their needs at home. >> Exactly. >> This is a big part of the undercurrent we're hearing. How do you guys help? >> Globalization is always critical for any business, even for some small business. Just like Jack Ma said this morning at his speech, even for small business, they need to globalize. They need to reach out to more business communities, and more customers. For us, because of the huge market in China, because of the EWTP platform we set up globally, because Alibaba Cloud Infrastructure and our global footprint, we're actually being able to help our customers, not only access the infrastructure from cloud perspective, but also help them to leverage our ecosystem from different business unit, and more partnership, to be able to help them to expertise their business in China and globally. >> That's exciting. Finally, developers are a big hot button. Everyone always says, I hear comments like, "We have to own the developer community," not that you could own the developer. No one wants to be owned, but what they mean is they want to win over the hearts and minds of developers. A lot of competition, and developers want programmable infrastructure. In dev ops world, that's called dev ops. That is really the new normal in developer community. How do you guys attack that developer market? >> We actually want to enable the developers community, not own or just win over. We want constantly enable them with the new platform, the new business models, the new programs that we can bring them together. That's our mission, enablement. >> Congratulations on a spectacular formula. Thanks for having us here, TheCUBE and Silicon Angle, and thanks for your time. >> Thank you so much for the opportunity. >> Karen Lu here in China with TheCUBE. Exclusive coverage in China, bringing the stories of the most important trends and tech in Alibaba Cloud. Really changing the game with their formula of e-commerce, entertainment, and entertainment. This is not B-to-B, boring to boring. It's exciting, in a music festival. 60 thousand people are here at this conference. Developers in the world watching, I'm John Furrier with Silicon Angle. Thanks for watching. (techno music)

>> SiliconANGLE Media presents theCUBE! Covering AlibabaCloud's annual conference. Brought to you by Intel. Now, here's John Furrier... >> Hello everyone, I'm John Furrier, the co-founder of SiliconANGLE, Wikibon, and theCUBE, for our exclusive coverage in Hangzhou, China for Alibaba Cloud Conference here, it's a Cloud Computing Conference. The entire city is a cloud. We're here at the Intel booth with Peter Chen, who's the general manager of Products and Technology, for Data Center Group Sales of Intel Corporation. Peter, AI is the hottest topic, IoT, Alibaba Cloud, I mean, a huge event here mixing, kind of a cultural shift, generational shift, young developers. >> Definitely lots of crowd, you can see people surrounding us, right? So, artificial intelligence is definitely a hot word here in China for the past 12 months. Everybody's trying to figure it out, what's going on, how they can really use them, so we're very excited as well to really partner with Alibaba to really explore some of the potentials. >> I had a chance to speak with some of the Alibaba executives, and obviously, a strategic partnership with Intel, pretty strategic, and it matters what's inside the Cloud. But it's not an Intel inside like a PC. The AI is showing that there's a little bit of Intel on everything, from IoT, industrial IoT to data center. It's a range of technology that's powering a new kind of software. This is where AI is shining. We're seeing that with machine learning and as data driven technology. So, I got to ask you. What is the view from Intel on AI? Obviously, we see the commercials, we see the technology from Intel. How does that translate to your view on AI? What's that view? >> So, essentially today's AI, artificial intelligence, is powered by three factors, the amount of data, the new algorithms, and lastly the compute power. And Intel has historically been the leader of create and compute. So, for the past many years, we has always been generating new compute powers into the cloud and data centers as well as PCs. But going forward as we look at applying AI to different usages like autonomous driving, for example, you cannot expect everything to be done just in the cloud because we need the real data to be inputted from a car, for instance, all the cameras, all the sensors. So, we do definitely see a need of actually faster processors at the edge as well to constantly bring in the data back into the cloud, so they have an autonomous feedback loop, make sure there will be right decision making. >> Yeah, so Cloud drives this, right? So, it's not just Cloud though, it's software. There's exponential growth in open source software that's causing a Renaissance in the developer community. You're seeing it here in China, a lot of young demographics here. Software and data's tsunami going on. You need compute power. >> Yes, yes. I think, everybody knows Intel is a hardware company, but we do have a very large effort on engaging a software ecosystem. From the old days on engaging Linux, the cloud different software stack, and working with CSPs like Alibaba in China to really make sure they can create and write the new latest software AI framework and taking the most advantage of our hardware platform as well. So, that's something that we've been very focusing on. >> And one of the themes here is the IoT for traffic in China. Obviously, if you've been here, you know it's kind of congested. But Alibaba is giving a lot of talks on how they're using data in this cloud city for traffic, which is an example of IoT, Internet of Things, but applied to the real world. That's where the AI kind of connects with the data. Is that kind of where it's going? >> Yeah, so I think this is a great application, as you just mentioned. And Alibaba calls it City Brain. So, essentially, imagine a normal city like in China, can easily go five million, 10 million people. The amount of people and the amount of traffic that goes on the road every day. So, if the city is able to utilize all these videos' stream of data, feedback from different traffic intersections, and be able to direct traffics and control the traffic lights dynamically, using artificial intelligence, you'd actually solve a lot of the city's congestion problem. So, I think this is where we are seeing a lot of application being explored in China, they're using very innovative, different ways by Alibaba. >> Peter, I've got to ask you because one of the things we're seeing in theCUBE and Wikibon Research is the growth of new kinds of ecosystems. Karen Liu, who runs the America's, general manages for America's Alibaba, said to me that ecosystem is super important for Alibaba as an example. But a new kind of ecosystem is developing. Cloud service providers are becoming a new hot growth area because the specialty of building applications in the cloud is not like it was kind of in the old days. You got to have a little bit of a cloud native mindset, but yet, domain expertise, whether it's traffic or a certain vertical solution. So, it's a little bit of both. Always often scalable, yet specialism. This is going to create a lot of opportunities for cloud service providers. What's your view on that from Intel's perspective? How are you guys seeing that market? Do you agree? And what are you guys looking at, at that market? >> So, obviously cloud service provider, the likes of Alibaba or Amazon, are one of our fastest growing customer base over the past five years. And in the near future, we expect this trend to continue to grow. We definitely see CSPs as a leading edge of driving innovation because they are not just the leading edge of driving consumer usages but they also, like the City Brain project, they've been really close on solving the enterprise problem as well with public cloud. So, I think we're very excited to have the opportunity to be a close partner with a CSP like Alibaba to really help them, providing our latest hardware technology to allow them to drive innovation on top of this offer and with the programs and the algorithms. >> How are they, how are those big cloud service providers, or CSPs like Alibaba, they're a big one, they're the fourth cloud in the world, enabling their CSPs? Because I was just talking to someone on the floor here, an ISV in the old world, who was telling me that he's now a cloud service provider, so you have now this nice balance in the ecosystem developing. You guys see the same thing? How do you guys, looking at that? >> So, this is what we call a hybrid situation. So, while the big CSPs like Alibaba, they have a lot of competency and they have a lot of internal engineering, it may not make sense for them to create every single application in the world. So, there may be some legacy enterprise application, for instance, a CRM software in China, maybe it was really popular, for them to forge a collaboration with the leading company Alibaba to translate their on-prem software stack into a cloud solution. So, I think we definitely see a lot of that collaboration happening, to take the best of the best from the legacy as well as the new public cloud environment to really make the better service for the companies and the customers. >> Create ecosystem opportunity. Okay, so I got to ask. What is the Intel relationship that you guys are doing on your end with Alibaba Cloud? Obviously, they're taking names, they're kicking butt. They're doing well. They're going global. They're not just in China. They're the first cloud provider here in China to go outside the mainland. Obviously, they're in the US, they're in Silicon Valley, our backyard. What's the collaboration? Share the relationship. >> We work very closely with Alibaba. Like you said, they're now the leading cloud service provider in China. They're starting going abroad. And we as an ingredient, knowledge provider perspective, we have a very close collaboration with them, sharing with them our technologies on hardware roadmap as well as software enabling to make sure they can take full advantage of it. So, we're very excited to see the growth of Alibaba over the past few years, and we look forward to seeing them continue to expand their business together with us. >> Yeah, great company. So, I got to ask you, one of the collaborations that got my attention was the, I don't want to say hack-a-thon, it was a competition, it was the AI competition called Tianchi that you guys were a part of with Alibaba. What was Intel's role in that? I saw some of the winners earlier. I didn't get a chance to get the specifics, but take me through this AI competition that Alibaba did with these entrepreneurs. >> So, I'm very, actually very excited. I just talked to one of the winning team just now. So, what happened is, when we talk about artificial intelligence, today it's a lot about image recognition, voice recognition but that's just pure technology. So, what Alibaba decide to do, which in terms of partner, is we created a medical image contest. So, we pick a particular subject, for instance, lung cancer and we invited 16 local hospitals to provide some of the image data of the patients anonymously, and then we opened it up for the software ecosystem, the academia, professors, the schools, and say, hey, why don't you come in and try to compete on the image recognition accuracy based on those X-ray images, using these images? So, it takes about six, we have overwhelming turnout. We have about 3,000 teams from 20 different countries applying to join in the contest, and then we just select the winner yesterday. So, basically, the three winning teams, two of them are from the best universities here in China, one of them is from overseas. And again, Intel's role in this is we provide a lot of consultation help. First of all, we provide the hardware system based on our Xeon Phi clusters, and on top of that, we provide a lot of the software tools, Caffe, image recognition libraries, Intel material libraries to really help the contestant to be able to use the Intel hardware for the maximum to drive the best performance. >> And so, you guys provided the technology, Alibaba the Cloud, and let these guys just take. What was the results? Was there any success? Was there a winner? >> There was a winner. I think the big winner was Beijing University. But I think overall, we are not just excited just because of this specific winners but really the larger intent. If you can imagine in a country like China, there's a lot of people, meaning there's a lot of patients at different part of the country, and not every tier two, tier three city have the same resource or access of the best doctors. If we're able to simplify the lung cancer image recognition to be able to provide this as a tool for all the tier two, tier three cities of China, imagine how much this will change. >> It's a societal impact. >> Definitely. >> And you've got a collective intelligence. It's almost like an open source kind of thing, where the more people doing it. >> It gets better, it gets better. >> The fly wheel. >> And then, we have definitely a lot of hospitals who want to really take advantage of this as well. So, we're really glad on the results of this first round, and I think Alibaba will do a next round with a different subject as well, and we're looking forward to partnering with them again. >> That's inspirational. Okay, great to have you on. Thanks for the commentary. Exclusive coverage. Final thought, what's your thoughts on the event? Where's AI going? Where do you see this trajectory of Alibaba and Intel going? >> So, definitely the event's wonderful and great. This is my third year here. It gets just bigger and bigger every time. So, I'm looking forward to come back for the next couple of years again. Our collaboration with Alibaba has been very close. We work with each other deeply, with our engineers' collaboration, and I look forward to continuing to bring out more successful projects. >> And they're really bringing together, not just science and developers, but artists. You've got a music festival here, feels like South by Southwest meets a developer conference. Societal impact, traffic, solving problems, lung cancer, big data, and data is changing the world. Now, you need the compute power, you need the analytics. Of course, you need SiliconANGLE and theCUBE and Wikibon, exclusive coverage here in China of the Alibaba Cloud Conference. Thanks for watching.

>> SiliconANGLE Media presents theCUBE! Covering the Alibaba Cloud annual conference. Brought to you by Intel. Now, here's John Furrier... >> Hello everyone, welcome to exclusive coverage with SiliconANGLE, Wikibon, and theCUBE here in Hangzhou, China for Alibaba Cloud's annual event here in Cloud City, the whole town is a Cloud. This is their event with developers, music festivals, and again, theCUBE coverage. Our next guest is Dhiraj Mallick, who is the Vice President of the Data Center Group, and the General Manager of Innovation, Pathfinding, and Architecture Group. That's a mouthful. Basically the CTO of the Data Center Group, trying to figure out the next big thing. >> That's right, John. >> Thanks for spending the time. >> It's my pleasure. >> We're here in China, it's-- You know in the U.S., we're looking at China, and we say okay, the fourth largest Cloud, Alibaba Cloud? >> Yes. >> Going outside of Mainland China, going global. You guys are strategic partners with them. >> Yes. >> They need a lot of compute, they need a lot of technology. Is this the path that you're finding for Intel? >> Yeah, so we've been collaborators with Alibaba for over 10 years, and we view them as a very strategic partner. They're one of the Super Seven, which is our top seven Cloud providers, and certainly in China, they're a very relevant customer for many years. We engage with them on a variety of fronts. On the technology side, we engage with them on what their key pinpoints are, what is the problems they want to be solving three to five years out, and then we co-develop, or co-architect solutions with them. >> So, I want to get your take on the event here in China, and how it relates to the global landscape, because I, it's my first time here, and I was taken back by the booth. I walked through Alibaba's booth, and obviously Jack Ma is inspirational. Steve Jobs like the culture, and artistry and science coming together, but I walked through the booth, it's almost too good to be true. They've got Quantum Computing, a Patent Wall, they've got Hybrid Cloud, they got security, they have IoT examples with The City Brain, a lot of great tech here at Alibaba Cloud. >> So I think the technologies that they're investing in are very, very impressive. Most cloud companies are probably not as far along as them, and looking at such a broad range of technologies, the Brain Project is really exciting, because it's going to be the Nexus of smart cities, both in China, as well as globally. The second thing that's very interesting is their research and investments in Quantum. While Quantum is not here today, it's certainly on the frontier, and Intel also has significant investments in sort of unpacking where Quantum will go, and what promises it offers to address. >> What I find interesting is that also hearing the positioning of, I kind of squint through the positioning, they're almost talking Cloud-native, DevOps, but they have all this goodness under the hood, and they're kind of talking IT-transitioning to Data Technology. Everything's about data to these guys, not just collecting data, using data with software. Now, that's really critical, because isn't that software-defined, data-driven is a hot trend? >> Yes, software-defined and data-driven is a very hot trend, in fact at Intel our CEO and us all believe that we've entered the data economy, and that the explosion in data is, and the thirst for analyzing that data to be able to drive smart business analytics is really the key to this digital revolution. I was reading an industry report by one of the analysts that said by 2019 there would have been over 100 billion dollars spent on business intelligence. And so, the real key is this data economy. >> The intersection of things, and even industrial internet, IIot, Industrial Iot, with artificial intelligence AI, intelligence Intel inside that word, interesting play on words-- >> Yes. >> Is coming together, and we've covered what you guys were doing on Mobile World Congress this year, where 5G was clearly an end-to-end architecture. You got FPGAs, all this goodness here going on. So that's 5G, and that's going to fuel a lot of IoT if you think of it like that way, but now AI. >> Yes. >> It's Software. How does that connect? Because that's the path we see forward on the Wikibon analyst side, we see software eating the world, but data eating software. And now you got 5G creating more data. >> Yeah, so the way we look at it at Intel is, we have data-center technologies that are fueled by the growth at the Edge by IoT devices, because they're creating demand for more processing capability to be able to unpack and analyze that information, and it's a self-fulfilling circle. We call it the virtual cycle of growth, because the data center feeds IoT demand and then IoT feeds the data center. And so it's the combination of those. What 5G does, is 5G forms the connectivity fabric between the data center and the Edge. It allows data to be pre-positioned at the correct places in the network, so that you minimize latencies through the network, and can process or do the analytics on it as quickly as you possibly can. >> So we were talking before we came on camera about Jack Ma, they call him Jackie Ma here, keynote being very inspirational, and talking moving to a new industrial era, a digital economy, all that good stuff, very, very inspirational. Let's translate that into the data center transformation, because we're seeing the data center and the Cloud with Hybrid Cloud become really critical to support what you were just talking about which is, how do you put it all together? It sounds so easy, but it really is difficult. >> It is, and so our vision is that in order to be able to fulfill this data economy, we will need to have five key innovations in the data center. The first innovation, in no particular order, is that the data center will be frictionless. And what I mean by frictionless, is that there will be zero to low latencies in order to provide that real-time experience at the Edge. So latency is extremely critical, and the way we believe that that can be achieved is by moving from copper to light. And Intel has significant investments in leadership products and silicon photonics that will enable switches to be based on photonics. It'll enable CPUs, and server hosts to be based on light. So we believe that light is a critical aspect to this success. The second aspect of frictionless is the need for liquid cooling and that was in the keynotes from Simon Hu this morning, that the liquid cooling is going to be essential to be able to enable a lot more horsepower in these data centers to be able to handle the volume of data that's coming. >> So you guys obviously with the photonics and the liquid cooling, you guys have been working on this in your labs for a long time, it's great R&D, but you need the connective tissue because with 5G you're now talking about a ubiquitous RF cloud, powering autonomous vehicles. We're seeing the Brain Project here, ET Brain, the City Brain-- >> Yes. >> Which is essentially IoT and big data being a big application that they're showcasing. What's the connective tissue? How does that work, from the data center, to the Edge? What's Intel's position? How do you see it? And what's going to unfold in front of our eyes? >> Yeah, so two things, so number one, I believe that the data center is boundary-less. It's not based on four physical walls. It's a connected link between the data center, and all the Edge devices that you called IoT. In order to fulfill this, you have to have 5G technology. We're invested in Silicon, in radio technologies, as well as in driving the 5G industry in consortia, to be able to bring 5G solutions to market. We think that 5G, as well as a tiered architecture between the Edge to the center, where you do some processing at the Edge, the radio stations, some in intermediate data centers, and then some in the back end Cloud data center, is what's going to be essential, and Intel has significant investments, both in developing this distributed hierarchical architecture, as well as in 5G. >> That's a great point. I want to just unpack that, and double-click on it a little bit, because you mentioned data at the Edge, and you also said earlier, low latency. Okay, a lot of people have been talking about, it costs you speed and time to move data around. So there's no real one general architecturing, where you have to kind of decide the architecture for the use case. >> Yes. >> So, the beauty is in the eye of the beholder, whoever has the workloads or the equipment. >> Yes. >> How do you look at that, because now you're thinking about, if I don't want to move data around, maybe you shouldn't, maybe you want to move data around. How does that fit with the Cloud of model, because we're seeing Cloud being a great use case for IoT in one instance, and maybe not in another. How do you think about that? How should practitioners think about the data architecture? >> Yeah, so our vision is that the Cloud changes from a centralized Cloud, to a distributed Cloud, and is amorphoused between the Edge where the IoT devices are, and the backend, and the way to think about it perhaps, is to say that storage as people have envisioned it, as being centralized, that paradigm has to change, and storage has to become distributed, such that data is available at different points in the network, and my vision is that you don't want to move data around, you want to minimize data movement for most use cases, and you want to have it pre-positioned on the 5G network, and you want to move the compute to the data, that's more energy-efficient. >> So I got to ask you, as someone who's doing the path-finding, which is the future path for Intel, and innovation and architecture. I was talking with some practitioners recently at another event, and trying to find someone, because I don't speak Chinese very well. But they asked me the same question. It matters what's in my Cloud. And what they mean by their Cloud, either on-premise private Cloud that they're putting together, operating model of their business, now going Cloud-like. But also as they pick their Cloud provider, they want to have multi-Cloud, and so what's in their Cloud, and their Cloud provider's matters. You guys are the inside of the Cloud across many spectrums, Intel. >> Yes. >> How should a customer think about that question? What's in my Cloud? Why should it matter, and it should matter. What's your take on that, and what should they look for? >> Yeah, so my take is that for years we've had the debate of whether it's public Cloud, or private Cloud, or on-prem Cloud. Our view is that the world is Hybrid, which is why we are big supporters of Alibaba, and the Hybrid Cloud movement, and as such, if it's Hybrid, it sort of suggests that the end state is that there'll be about an equal amount of applications that run on public versus private, and so I think the number of applications have an affinity to move into the public Cloud, like mail, and then there's other applications that you might care more about the compliance and security that you would say have an affinity to being on-prem. >> Also you mentioned that there's no walls, it's boundary-less in the data center. Okay, there's no door, there's no mote, you can't put a firewall on that door, unlimited access surface area for security. Obviously security hacks are big. We found out today that Israel had hacked, and notified the NSA. Hacking is a huge problem. Equifax is going to be another one. How should customers protect themselves? >> It's a very fair question John. This is one of the side-effects of saying that the data center will be boundary-less. We now have to have security technologies that can, we've effectively expanded the attacks of security in a significant way, but I don't think the answer is to say we need to move backwards and not adopt this boundary-less Cloud. I think we want to adopt it, and we want to develop technologies. So at Intel, we are developing multiple isolation technologies that allow different VM and container tenants to be isolated from other tenants. >> And this was your point earlier, making the device more intelligent, whether that's more on-board memory, and more chips. >> Yes. >> That's what you were kind of referring to, is that right? >> That's correct. >> Okay great, so I want to get one kind of off-the-wall question, since I have you on here. It's just a brain trust here from Intel, which it's great to have him here. Distributed computing has been around for awhile, we know all about that. Network effects, distributed computing, the computer industry. But now we're seeing a trend with decentralization. Blockchain is one shining example. Russia just banned cryptocurrency. This poses a architectural challenge. What's your thoughts on the decentralization, and distributed architectures that are emerging? Opportunity is scary. How should customers think about decentralization? >> Well certainly there's a security challenge, as we just spoke, related to this. But I think the computer industry has oscillated, depending on the era and the needs between centralized and decentralized a number of times now. And we're going through an era where decentralization makes sense, because we expect 30 to 50 billion devices at the Edge, and so you can't handle that with a centralized model, primarily due to three reasons, number one, just moving that volume of data would be very expensive to do over the network. Second there'll be a number of applications that are latency-sensitive. And third, you might care about data federation, and crossing country boundaries in a number of cases. So I think for the use case that we have with IoT, we have to adopt decentralized and distributed. >> So, if The Brain is processing and data, and you've got plenty of it at Intel with more compute power, what's the central nervous system, the metadata? >> Well, actually look at the central nervous system as the 5G distributed network that enables the end-points, or the nerve endings if you will, to be connected to the spinal cord. >> Okay so a final question for you, I really appreciate you spending the time. >> Sure, it's been a pleasure. >> Intel's been a wave company in its generation, and obviously Moore's law, it's not well documented. It seems that Moore's law is every year some journalist claims Moore's law is dead, and that it never goes away, so we expect more and more innovation coming from Intel. You guys have surfed many waves. In your opinion, what waves are coming? Because it feels like the waves are big now, but a lot of people think that there's bigger waves coming. That the big wave set is coming in. What's the technology wave that you're looking at from a path-finding, innovation standpoint, that customers should look for, maybe prepare for. It could be further out coming in. What's the big wave coming in, obviously AI was seeing these things. What's your focus on that? >> So, a number of them. I think, you know distributed computing is not a solved problem yet. But certainly it needs to be solved to be able to address these end-point challenges. Another great example I think, is around visual computing. So in the past, most of the type of data that people handled, was textual. But that's moving to visual very rapidly, and there's so many examples. You brought up the City Brain Project as an example. But video and analyzing images, requires a different kind of art. Different compression techniques. If a human doesn't need to see it, you perhaps don't have to have as high a resolution, and so there's a number of ships in the assumption space. And so I think for me, visual computing is a great opportunity, as well as a wave, that's coming at us. >> And the software too. So the final question, final, final question. Alibaba here, are connecting the dots. You can see where it's going. How do you see the Cloud service provider opportunity, because obviously they're a Cloud service provider on paper, but they're big, they're a Native Cloud now, like with the big guys like Amazon, Google, Microsoft. But we're seeing an emergence of new class of Cloud service provider. Certainly our research is showing that what was a very thin neck in the power laws, now expanding into a much bigger range, where VARs and value-edited software developers are going to start doing their own Cloud-like solutions with the Native Clouds, because they need horizontally scalable data infrastructure, connective tissue, and Edge devices from Intel, but they're going to provide software expertise that's vertically specialized, whether it's traffic, IoT, or oil and gas, or financial, Fintech. The specialism of application developers combined with horizontally scalable Cloud, it seems like a renaissance in the Cloud service provider market. Do you see that as well, and how should the industry think about this potential renaissance? >> So I think there's two possibilities. One is for the vast majority of functions that people run in the public Cloud, I think one possibility is that there's a consolidation amongst a few players. But I think your point's a very good one. That they are specialized services that companies are able to provide, where they're able to carve out a niche, and become a Cloud provider for that particular set of functions, as well as there's a second reason that motivates regional Cloud providers to succeed, again, because of data federation requirements, as well as local proximal, proximity to the end-points. I think these two phenomena are likely to drive the emergence of regional Clouds, as well as specialized Clouds, like you described to perform certain functions. >> And potentially a new kind of ecosystem development. >> Yes. >> And this is, then you guys are all about ecosystems, so is Alibaba. >> That's right. >> Dhiraj, thanks so much for coming on theCUBE, this is exclusive CUBE coverage with SiliconANGLE, and Wikibon here in China with Intel's booth here. Talking about AI, and the future of the data center and Cloud. I'm John Furrier, thanks for watching.

>> SiliconANGLE Media Presents the CUBE! Covering Alibaba's Cloud annual conference. Brought to you by Intel. Now, here's John Furrier... >> Hello there, and welcome to theCUBE here on the ground in China for Intel's booth here at the Alibaba Cloud event. I'm John Furrier, the co-founder of SiliconANGLE, Wikibon, and theCUBE. We're here with John Sakamoto who is the vice president of the Programmable Solutions Group. Thanks for stopping by. >> Thank you for having me, John. >> So FPGAs, field-programmable gate arrays, kind of a geeky term, but it's really about software these days. What's new with your group? You came to the Intel through an acquisition. How's that going? >> Yeah, so far it's been great. As being part of a company with the resources like Intel and really having access to data center customers, and some of the data center technologies and frameworks that they've developed and integrating MPJs into that, it's been a great experience. >> One of the hot trends here, I just interviewed Dr. Wong, at Alibaba Cloud, the founder, and we were talking about Intel's relationship, but one of the things he mentioned was striking to me is that, they got this big city brain IOT project, and I asked him about the compute at the Edge and how data moves around, and he said "for all the Silicon at the Edge, one piece of Silicon at the Edge is going to be 10X inside the data center, inside the cloud or data center," which is fundamentally the architecture these days. So it's not just about the Edge, it's about how the combination of software and compute are moving around. >> Right. >> That means that data center is still relevant for you guys. What is the impact of FPGA in the data center? >> Well, I think FPGA is really our great play in the data center. You mentioned City Brain. City Brain is a great example where they're streaming live video into the data center for processing, and that kind of processing power to do video live really takes a lot of horsepower, and that's really where FPGAs come into play. One of the reasons that Intel acquired Altera was really to bring that acceleration into the data center, and really that is a great complement to Xeon's. >> Take a minute on FPGA. Do you have to be a hardware geek to work with FPGA? I mean, obviously, software is a big part of it. What's the difference between the hardware side and the software side on the programmability? >> Yes, that's a great question. So most people think FPGAs are hard to use, and that they were for hardware geeks. The transitional flow had been using RTL-based flows, and really what we've recognized is to get FPGA adoption very high within the data center, we have to make it easier, and we've invested quite a bit in acceleration stacked to really make it easier for FPGAs to be used within the data center. And what we've done is we've created frameworks and pre-optimized accelerators for the FPGAs to make it easy for people to access that FPGA technology. >> What's the impact of developers because you look at the Acceleration Stack that you guys announced last month? >> Yes, that's correct. >> Okay, so last month. This is going to move more into software model. So it's almost programmability as a dev-ops, kind of a software mindset. So the hardware can be programmed. >> Right. >> What's the impact of the developer make up, and how does that change the solutions? How does that impact the environment? >> So the developer make up, what we're really targeting is guys that really have traditionally developed software, and they're used to higher level frameworks, or they're used to designing INSEE. So what we're trying to do is really make those designers, those developers, really to be able to use those languages and frameworks they're used to and be able to target the FPGA. And that's what the acceleration stack's all about. And our goal is to really obfuscate that we actually have an FPGA that's that accelerator. And so we've created, kind of, standard API's to that FPGA. So they don't really have to be an FPGA expert, and we've taken things, basically standardized some things like the connection to the processor, or connections to memory, or to networking, and made that very easy for them to access. >> We see a lot of that maker culture, kind of vibe and orientation come in to this new developer market. Because when you think of a field-programmable gate array, the first thing that pops into my mind is oh my God, I got to be a computer engineering geek. Motherboards, the design, all these circuits, but it's really not that. You're talking about Acceleration-as-a-Service. >> That's right. >> This is super important, because this brings that software mindset to the marketplace for you guys. So talk about that Accelerations-as-a-Service. What is it? What does it mean? Define it and then let's talk about what it means. >> Yeah. Okay, great. So Acceleration-as-a-Service is really having pre-optimized software or applications that really are running on the FPGA. So the user that's coming in and trying to use that acceleration service, doesn't necessarily need to know there's an FPGA there. They're just calling in and wanting to access the function, and it just happens to be accelerated by the FPGA. And that's why one of the things we've been working with with Alibaba, they announce their F1 service that's based on Intel's Arria 10 FPGAs. And again we've created a partner ecosystem that have developed pre-optimized accelerators for the FPGA. So users are coming in and doing things like Genomics Sequencing or database acceleration, and they don't necessarily need to know that there's an FPGA actually doing that acceleration. >> So that's just a standard developer just doing, focusing in on an app or a use case with big data, and that can tap into the hardware. >> Absolutely, and they'll get a huge performance increase. So we have a partner in Falcon Computing, for example, that can really increase the performance of the algorithm, and really get a 3X improvement in the overall gene sequencing. And really improve the time it takes to do that. >> Yeah, I mean, Cloud and what you're doing is just changing society. Congratulations, that's awesome. Alright, I want to talk about Alibaba. What is the relationship with Intel and Alibaba? We've been trying to dig that out on this trip. For your group, obviously you mentioned City Brain. You mentioned the accelerations of service, the F1 instances. >> Right. >> What specifically is the relationship, how tight is it? What are you guys doing together? >> Well the Intel PSG group, our group, has been working very closely with Alibaba on a number of areas. So clearly the acceleration, the FPGA acceleration is one of those areas that are big, big investors. We announced the Arria 10 version today, but will continue to develop with them in the next generation Intel FPGAs, such as Stratix 10 which is based on 14 nanometer. And eventually with our Falcon Mesa product which is a 10 nanometer product. So clearly, acceleration's a focus. Building that ecosystem out with them is going to be a continued focus. We're also working with them on servers and trying to enhance the performance >> Yeah. >> of those servers. >> Yeah. >> And I can't really talk about the details of all of those things, but certainly there are certain applications that FPGAs, they're looking to accelerate the overall performance of their custom servers, and we're partnering with them on that. >> So one of the things I'm getting out of this show here, besides the conversion stuff, eCommerce, entertainment, and web services which is Alibaba's, kind of like, aperture is that it's more of a quantum mindset. And we talked about Blockchain in my last interview. You see quantum computing up on their patent board. >> Yeah. >> Some serious IT kinds of things, but from a data perspective. How does that impact your world, because you provide acceleration. >> Right. >> You got the City Brains thing which is a huge IOT and AI opportunity. >> Right. >> How does someone attack that solution with FPGAs? How do you get involved? What's your role in that whole play? >> Again, we're trying to democratize FPGAs. We're trying to make it very easy for them to access that, and really that's what working with Alibaba's about. >> Yeah. >> They are enabling FPGA access via their Cloud. Really in two aspects, one which we talked about which we have some pre-optimized accelerators that people can access. So applications that people can access that are running on FPGAs. But we're also enabling a developer environment where people can use the tradit RTL flow, or they can use an OpenCL Flow to take their code, compile it into the FPGA, and really get that acceleration that FPGAs can provide. So it's not only building, bringing that ecosystem accelerators, but also enabling developers to develop on that platform. >> You know, we do a lot of Cloud computing coverage, and a lot of people really want to know what's inside the Cloud. So, it's one big operation, so that's the way I look at it. But there's a lot going on there under the hood. What is some of the things that Alibaba's saying to you guys in terms of how the relationship's translating into value for them. You've mentioned the F1 instances, any anecdotal soundbites you can share on the feedback, and their direction? >> Yeah, so one of the things they're trying to do is lower the total TCO of the data center. And one of the things they have is when you look at the infrastructure cost, such as networking and storage, these are cycles that are running on the processor. And when there's cycles running on the processor, they monetize that with the customers. So one of the areas we're working with is how do we accelerate networking and storage functions on a FPGA, and therefore, freeing up HORVS that they can monetize with their own customers. >> Yeah. >> And really that's the way we're trying to drop the TCO down with Alibaba, but also increase the revenue opportunity they have. >> What's some updates from the field from you guys? Obviously, Acceleration's pretty hot. Everyone wants low latency. With IOT, you need to have low latency. You need compute at the edge. More application development is coming in with Vertical Specialty, if you will. City Brains is more of an IOT, but the app is traffic, right? >> Yeah. >> So that managing traffic, there's going to be a million more use cases. What are some of the things that you guys are doing with the FPGAs outside of the Alibaba thing. >> Well I think really what we're trying to do is really focus on three areas. If you look at, one is to lower the cost of infrastructure which I mentioned. Networking and storage functions that today people are using running those processes on processors, and trying to lower that and bring that into the FPGA. The second thing we're trying to do is, you look at high cycle apps such as AI Applications, and really trying to bring AI really into FPGAs, and creating frameworks and tool chains to make that easier. >> Yeah. >> And then we already talked about the application acceleration, things like database, genomics, financial, and really those applications running much quicker and more efficiently in FPGAs. >> This is the big dev-ops movement we've seen with Cloud. Infrastructure as code, it used to be called. I mean, that's the new normal now. Software guys programming infrastructure. >> Absolutely. >> Well congratulations on the great step. John Sakamoto, here inside theCUBE. Studios here at the Intel booth, we're getting all the action roving reporter. We had CUBE conversations here in China, getting all the action about Alibaba Cloud. I'm John Furrier, thanks for watching.