(upbeat music playing) >> Announcer: Live from San Diego, California, it's theCUBE! Covering KubeCon and CloudNativeCon, brought to you by Red Hat, the cloud native computing foundation and its ecosystem partners. >> Welcome back to theCUBE, here at KubeCon, CloudNativeCon 2019 in San Diego, I am Stu Miniman John Troyer is my co-host and joining us is one of our esteemed Cube alumni multi-time guests. Steve Herrod who is the managing director at General Catalyst. Steve, thanks so much for joining us. Always great to see you. >> It's good to see you again. >> Stu: All right I'm having >> And John. >> A flashback meeting with the two of you at a certain campus in Palo Alto and the like. But, you know it's interesting Steve, before we get into this technology, we kicked off this morning talking about a company, Docker. We knew Docker from the early on. I said, look Docker had the opportunity to be this generation's VM-ware. It has had a huge impact on the market. You know, we wouldn't have 12 thousand people here if it wasn't for them. Give us your take kind of as to, you know, this wave of technology and we'll start there. >> Yeah, well I guess I'll start with Docker the company. I mean, it just shows you boy, it's hard to build big companies these days and I think there will be plenty of people talking about why that didn't work out or did work out. Maybe there was too much stuff given to open source. Maybe not enough, maybe there isn't enough community. But I do think, I think that's the tale of just how hard it is to be out in this world. But on the flip side they certainly moved for the idea of containers and got things going. We always have a saying in the venture business, actually in the startup business, which is it's sometimes the second mouse that gets the cheese. Someone's got to break a little glass and then sometimes someone else comes in afterwards and gets some of the reward for it. >> Well Steve this is a sprawling ecosystem. We went from 8 thousand people last year, 4 thousand the year before to over 12 thousand, and this ecosystem keeps growing. You've got a portfolio company that launched this week. You're checking out the show floor. Maybe let's start with the new one coming out from your side. >> Yeah you know I have several startups that are here but I think what's been interesting is the opportunity to create new companies. If you look at the, I'm sure you've covered a lot of them. But if you look at the sponsor sheets here, there's literally hundreds of booths that you can go see and many of which are in similar areas, many of which are open source. So it's really a challenge, like as you all trained interviewers and me trained looking at the space. Think how complex it is to a customer right now. Do that, think about like which service mesh do I pull together with this and that and which command line and which API tool, so I think that's both the challenge and the opportunity you often see this early on. One company that we just had coming out is called Render and their idea is to build an application platform service kind of on top of all this and just to hide it all from the user which I think is, I think that's what always happens in these ecosystems. You get so many players and then someone will be the bundler and make a suite out of it. Or someone will write a service on top of it all and take it away from you. So I think it's sort of a healthy part of a rapidly changing ecosystem. And Render will be doing some interesting things, but they talk to Application developers, not to infrastructure people. App developers don't want to know about any of this. >> Well we're sitting here at KubeCon in the midst of kind of, right at that margin, right at that boundary between from one perspective it looks very developer-y, But from another perspective, this seems very operator-y here. How do you see, in the market in the place, with the buyers, the CIOs or the technical buyers out there. I mean how are you looking at infrastructure versus developers and cloud et cetera? >> It's funny, you know we're all infrastructure people for the most part. What I often say, I know you all know that as well, like at the end of the day infrastructure is only there to run applications. It has no other purpose in life except to be a great place to run applications. But it's also accountable for doing a lot of the things you need. It has to make it run fairly at a certain performance. It has to make sure it's safe from attack. It needs to make sure the data is backed up. So I always just try to think about that when I'm looking at these startups, and we were just talking about this before the show. When I go up to one of the booths and I ask, I usually ask, how do you make someone's life better? Sometimes you get someone who's not the most senior person at the company and they'll quickly go into the technology on how it's this or that. But if you can't frame it in the context of how some enterprises' applications are better, faster, safer then it's really not that interesting, I think, to a CIO that has all these decision making. So, anyway I keep coming back to that with what ever infrastructure or application companies out there and try to wonder what's going on. >> Yeah, no I do really like that as we often frame it, it's what is the business value? It's, you know, nobody really has a problem that I need to rub Kubernetes on. Yes, I need agility, I need you know, the result of what having a distributed architecture drives from my business is what I need. Not the niggling little details there. Um, so I love that piece of what you do better for a company. The other thing, I walk around and I talk to some of these companies and some of them, I scratch my head a little bit as to the oh well I created a cool project, and we've open sourced it and that's my business. And as you know we've talked about the cautionary tale of Docker. Where are we with open source and business model and what's your latest take on that? >> Boy, that is ever evolving. It's funny though, if you look at even just the last ten years since you've been covering things. The go to model for most open source companies has shifted from maybe supportive subscription to really, some of them are open core meaning that parts of it are closed source. But, more and more that the really well to do ones are running them as a service. So that tends to be what we look for now is, whether you're running it directly, or you're doing something with a Microsoft, Google, Amazon where you get some of the revenue from it, which is a big, a big if. That seems to be one of the better ways to consume it and the people who have control over the software should be the best at operationalizing it. So that's kind of the change that we've seen as of late. >> Yeah, quick follow up on that, when we look at the hyper scale, the public clouds. Their marketplaces are getting more and more, you know, it's just a big force in the marketplace. Especially AWS, but Azure's pushing that way and Google to some extent there. Do you give any advice to your portfolio customers? How they should think about their relationships with the big cloud players? >> Well yeah, I mean that's one of the biggest discussions, not even just for our tech companies, but our commerce companies and everywhere else. But I do think what's kind of interesting, in many cases we're seeing the companies talk about maybe Amazon or someone is running that software as a service and it's maybe it's a little older version or maybe it's not all the bells and whistles. So there's certainly a case where good enough is good enough and it kind of crushes the startup, but you also hear a fair amount of tales of where it introduces them to this concept for the first time and then they're going to move over to perhaps the best of breed case, so obviously getting that right is a big job for the founder as well as for an investor. But, um I really see it as a mixed bag. The notion of being introduced to a customer at a lower cost than ever before matters a lot if they then switch to you. >> Well Steve, another boundary that you're sitting at is the boundary between all these technology providers and the customer. Any particular observations on trends over in the customer side? Are people looking to save money, are people feeling good, are the techies really leading the adoption? Is CIO down? Digital transformation? I mean, you're sitting right there in the middle. >> Yeah I mean the good news for I think all startups are that software matters and the digital transformation that's been going on for many, many years continues in a broad way. I would say at the end of the day though, the one question that I almost ask just back to your point on business value. I ask any startup, tell me why you are at least 10 times better than everyone else in this space. And because it is, the bad news of so many startups and so many cool ideas is how's anyone to choose? So if you ask any of your CIOs, they're just massively confused. They try to look for a bigger vendor who could possibly bundle it all together and make it a suite. That's super enticing as you know to all these guys. But when you have this much churn and change going on, you know someone has to step into that role, so I would just say that the ideal thing is you have smaller number of vendors, that never works with a lot of rapid innovation so somewhere in the middle you need to have startups that are really good at bundling in with other folks and fitting into APIs and doing that. >> Alright, so Steve, we've had an interesting view on what's going on in the security industry this week and I know you've got a perspective on it. Our team did the AWS reinforce show in Boston and it was generally upbeat, talking about all the great things that cloud's doing and you know, modernize everything we're doing. Pat Gelsinger from VMware, you know, banging on the table at VMware saying you know, we need a do-over, we need to start over with security. Here at this show, if some people are very cautiously optimistic that we've solved a bunch of the problems of security. You know, where in your view are we, and where are we going? >> I think we'll never be done with security. However, I do think we've reached a maturity level, if you, well, you were here. A couple years ago, there were so many security companies just for containers and I think, you know that's interesting to some extent, but, every CIO is going to have a mixed environment. And so I think what you see this year and what you saw with Palo Alto's acquisitions, so my companies Alumio I know you've talked to. It's really saying let's have one master policy and have it actually then go out and talk to Amazon, talk to my local infrastructure, talk to containers, talk to server lists. That will be the next wave of things going on. But, um, I think whenever you see a maturing of a company like this, the management tools and the security tools that have to inter operate start to really make a showing. And I actually see that quite a bit in this show, so that's a sign of a little bit of maturity going on here. >> Okay, last thing, Steve, I guess, what's catching your eye? Anything interesting or spaces there that you'd call out that we haven't already touched on? >> Well, I spend a lot of time these days actually on, and I hesitate to say it, but on AI. And I mean specifically it is such a hyped term and it's used in many ways like cloud used to be used, so it's just sort of a marketing term in many ways. But specifically, the picks and shovels that are enabling that, many of which show up here too because it is being deployed in containers, that sort of thing. So certainly the tools, but more importantly the vertical applications that can have a meaningful benefit from it. And I'll say, same thing as with infrastructure. AI is a means to an end, it's not the actual thing you're trying to do. But there's real, there's been a real advance there and so I'm really enjoying watching where you get these 10x improvements because you're using the data and AI there. So I continue to love infrastructure and developer tools and I think especially as they get applied to some of these new areas, like AI. That's where I'm excited about what we'll be seeing. >> Well, Steve, really appreciate you coming by. Congrats to the Demon Render, definitely look to catch up there if we don't catch him this week, we'll get him to our Palo Alto studios sometime. >> Yeah, Render is cool. You can go try it out. Render.com >> All right. For John Troyer, I'm Stu Miniman. Getting towards the end of day 1 of 3 days. Wall to wall coverage. Check out theCUBE.net for all of the coverage, and as always, thanks for watching theCUBE. (upbeat music playing)