>>From around the globe. It's the queue with digital coverage of AWS reinvent 2020 sponsored by Intel, AWS, and our community partners. >>Hello, and welcome back to the cube live coverage of reinvent 2020 virtual. We're not there this year. It's the cube virtual. We are the cube virtual. I'm your host, John fro with Dave Alante and analyzing our take on the partner day. Um, keynotes and leadership sessions today was AWS APN, which is Amazon partner network global partner network day, where all the content being featured today is all about the partners and what Amazon is doing to create an ecosystem, build the ecosystem, nurture the ecosystem and reinvent what it means to be a partner. Dave, thanks for joining me today on the analysis of Amazon's ecosystem and partner network and a great stuff today. Thanks for coming on. >>Yeah, you're welcome. I mean, watch the keynote this morning. I mean, partners are critical to AWS. Look, the fact is that when, when AWS was launched, it was the developers ate it up. You know, if you're a developer, you dive right in infrastructure is code beautiful. You know, if you're mainstream it, this thing's just got more complex with the cloud. And so there's, there's a big gap right between how I, where I am today and where I want to be. And partners are critical to help helping people get there. And we'll talk about the details of specifically what Amazon did, but I mean, especially when John, when you look at things like smaller outposts, you know, going hybrid, Andy Jassy redefining hybrid, you need partners to really help you plan design, implement, manage at scale. >>Yeah. You know, one of the things I'm always, um, you know, saying nice things about Amazon, but one of the things that they're vulnerable on in my opinion is how they balanced their own SAS offerings and with what they develop in the ecosystem. This has been a constant, um, challenge and, and they've balanced it very well. Um, so other vendors, they are very clear. They make their own software, right. And they have a channel and it's kind of the old playbook. Amazon's got to reinvent the playbook here. And I think that's, what's key today on stage Doug Yom. He's the, uh, the leader you had, um, also Dave McCann who heads up marketplace and Sandy Carter who heads up worldwide public sector partners. So Dave interesting combination of three different teams, you had the classic ISV partners in the ecosystem, the cohesiveness of the world, the EMCs and so on, you had the marketplace with Dave McCann. That's where the future of procurement is. That's where people are buying product and you had public sector, huge tsunami of innovation happening because of the pandemic and Sandy is highlighting their partners. So it's partner day it's partner ecosystem, but multiple elements. They're moving marketplace where you buy programs and competencies with public sector and then ISV, all of those three areas are changing. Um, I want to get your take because you've been following ecosystems years and you've been close to the enterprise and how they buy your, >>And I think, I think John, Oh, a couple of things. One is, you know, Dave McCann was talking a lot about how CIO is one of modernize applications and they have to rationalize, and it will save some of that talk for later on, you know, Tim prophet on. But there's no question that Amazon's out to reinvent, as you said, uh, the whole experience from procurement all the way through, and, you know, normally you had to, to acquire services outside of the marketplace. And now what they're doing is bundling the services and software together. You know, it's straightforward services, implementation services, but those are well understood. The processes are known. You can pretty much size them and price them. So I think that's a huge opportunity for partners and customers to reduce friction. I think the other thing I would say is ecosystems are, are critical. >>Uh, one of the themes that we've been talking about in the cube as we've gone from a product centric world in the old days of it to a platform centric world, which has really been the last decade has been about SAS platforms and cloud platforms. And I think ecosystems are going to be a really power, the new innovation in the coming decade. And what I mean by that is look, if you're just building a service and Amazon is going to do that same service, you know, you got to keep innovating. And one of the ways you can innovate is you can build on ecosystems. There's all this data within industries, across industries, and you can through the partner network and through customer networks within industry start building new innovation around ecosystems and partners or that glue, Amazon's not going to go in. And like Jandy Jesse even said in the, uh, in his fireside chat, you know, customers will ask us for our advice and we're happy to give it to them, but frankly partners are better at that nitty gritty hardcore stuff. They have closer relationships with the customers. And so that's a really important gap that Amazon has been closing for the last, you know, frankly 10 years. And I think that to your point, they've still got a long way to go, but that's a huge opportunity in that. >>A good call out on any Jess, I've got to mention that one of the highlights of today's keynote was on a scheduled, um, Andy Jassy fireside chat. Uh, normally Andy does his keynote and then he kind of talks to customers and does his thing normally at a normal re-invent this time he came out on stage. And I think what I found interesting was he was talking about this builder. You always use the word builder customer, um, solutions. And I think one of the things that's interesting about this partner network is, is that I think there's a huge opportunity for companies to be customer centric and build on top of Amazon. And what I mean by that is, is that Amazon is pretty cool with you doing things on top of their platform that does two things serves the customer's needs better than they do, and they can make more money on and other services look at snowflake as an example, um, that's a company built on AWS. I know they've got other clouds going on, but mainly Amazon Zoom's the same way. They're doing a great solution. They've got Redshift, Amazon, Amazon's got Redshift, Dave, but also they're a customer and a partner. So this is the dynamic. If you can be successful on Amazon serving customers better than Amazon does, that's the growth hack. That's the hack on Amazon's partner network. If you could. >>I think, I think Snowflake's a really good example. You snowflake you use new Relic as an example, I've heard Andy Jess in the past use cloud air as an example, I like snowflake better because they're, they're sort of thriving. And so, but, but I will say this there's a, they're a great example of that ecosystem that we just talked about because yes, not only are they building on AWS, they're connecting to other clouds and that is an ecosystem that they're building out. And Amazon's got a lot of snowflake, I guess, unless you're the Redshift team, but, but generally speaking, Snowflake's driving a lot of business for Amazon and Andy Jesse addressed that in that, uh, in that fireside chat, he's asked that question a lot. And he said, look, we, we, we have our primary services. And at the same time we want to enable our partners to be successful. And snowflake is a really good example of that. >>Yeah. I want to call out also, uh, yesterday. Um, I had our Monday, I should say Tuesday, December 1st, uh, Jesse's keynote. I did an interview with Jerry chin with gray lock. He's investing in startups and one of the things he observed and he pointed out Dave, is that with Amazon, if you're, if you're a full all-in in the cloud, you're going to take advantage of things that are just not available on say on premises that is data patterns, other integrations. And I think one of the things that Doug pointed out was with interoperability and integration with say things like the SAS factor that they put out there there's advantages for being in the cloud specifically with Amazon, that you can get on integrations. And I think Dave McCann teases that out with the marketplace when they talk about integrations. But the idea of being in the cloud with all these other partners makes integration and interoperability different and unique and better potentially a differentiator. This is going to become a huge deal. >>I didn't pick up on that because yesterday I thought I wasn't in the keynote. I think it was in the analyst one-on-one with, with Jesse, he talked about, you know, this notion that people, I think he was addressing multi-cloud he didn't use that term, but this notion of an abstraction layer and how it does simplify things in, in his basic, he basically said, look, our philosophy is we want to have, you know, the, the ability to go deep with the primitives and have that fine grain access, because that will give us control. A lot of times when you put in this abstraction layer, which people are trying to do across clouds, you know, it limits your ability to really move fast. And then of course it's big theme is, is this year, at the same time, if you look at a company who was called out today, like, like Octa, you know, when you do an identity management and single sign-on, you're, you're touching a lot of pieces, there's a lot of integration to your point. >>So you need partners to come in and be that glue that does a lot of that heavy lifting that needs to needs to be done. Amazon. What Jessie was essentially saying, I think to the partner network is, look, we're not going to put in that abstraction layer. You're going to you, you got to do that. We're going to do stuff maybe between our own own services like they did with the, you know, the glue between databases, but generally speaking, that's a giant white space for partner organizations. He mentioned Okta. He been talked about in for apt Aptio. This was Dave McCann, actually Cohesity came up a confluent doing fully managed Kafka. So that to me was a signal to the partners. Look, here's where you guys should be playing. This is what customers need. And this is where we're not going to, you know, eat your lunch. >>Yeah. And the other thing McCann pointed out was 200 new Dave McCann pointed out who leads these leader of the, of the marketplace. He pointed out 200 new ISP. ISV is out there, huge news, and they're going to turn already. He went, he talked with his manage entitlements, which got my attention. And this is kind of an, um, kind of one of those advantage points that it's kind of not sexy and mainstream to talk about, but it's really one of those details. That's the heavy lifting. That's a pain in the butt to deal with licensing and tracking all this compliance stuff that goes on under the covers and distribution of software. I think that's where the cloud could be really advantaged. And also the app service catalog registry that he talked about and the professional services. So these are areas that Amazon is going to kind of create automation around. >>And as Jassy always talks about that undifferentiated heavy lifting, they're going to take care of some of these plumbing issues. And I think you're right about this differentiation because if I'm a partner and I could build on top of Amazon and have my own cloud, I mean, let's face it. Snowflake is a born in the cloud, in the cloud only solution on Amazon. So they're essentially Amazon's cloud. So I think the thing that's not being talked about this year, that is probably my come up in future reinvents is that whoever can build their own cloud on top of Amazon's cloud will be a winner. And I, I talked about this years ago, data around this tier two, I call it tier two clouds. This new layer of cloud service provider is going to be kind of the, on the power law, the, the second wave of cloud. >>In other words, you're on top of Amazon differentiating with a modern application at scale inside the cloud with all the other people in there, a whole new ecosystem is going to emerge. And to me, I think this is something that is not yet baked out, but if I was a partner, I would be out there planning like hell right now to say, I'm going to build a cloud business on Amazon. I'm going to take advantage of the relationships and the heavy lifting and compete and win that way. I think that's a re redefining moment. And I think whoever does that will win >>And a big theme around reinventing everything, reinvent the industry. And one of the areas that's being reinvented as is the, you know, the VAR channel really well, consultancies, you know, smaller size for years, these companies made a ton of dough selling boxes, right? All the, all the Dell and the IBM and the EMC resellers, you know, they get big boats and big houses, but that business changed dramatically. They had to shift toward value, value, value add. So what did they do? They became VMware specialists. They came became SAP specialists. There's a couple of examples, maybe, you know, adding into security. The cloud was freaking them out, but the cloud is really an opportunity for them. And I'll give you an example. We've talked a lot about snowflake. The other is AWS glue elastic views. That's what the AWS announced to connect all their databases together. Think about a consultancy that is able to come in and totally rearchitect your big data life cycle and pipeline with the people, the processes, the skillsets, you know, Amazon's not going to do that work, but the upside value for the organizations is tremendous. So you're seeing consultancies becoming managed service providers and adding all kinds of value throughout the stack. That's really reinvention of the partnership. >>Yeah. I think it's a complete, um, channel strategy. That's different. It doesn't, it looks like other channels, but it's not, it's, it's, it's driven by value. And I think this idea of competing on value versus just being kind of a commodity play is shifting. I think the ISV and the VARs, those traditional markets, David, as you pointed out, are going to definitely go value oriented. And you can just own a specialty area because as data comes in and when, and this is interesting. And one of the key things that Andy Jassy said in his fireside chat want to ask directly, how do partners benefit when asked about his keynote, how that would translate to partners. He really kind of went in and he was kind of rambling, but he, he, he hit the chips. He said, well, we've got our own chips, which means compute. Then he went into purpose-built data store and data Lake data, elastic views SageMaker Q and QuickSight. He kind of went down the road of, we have the horsepower, we have the data Lake data, data, data. So he was kind of hinting at innovate on the data and you'll do okay. >>Well, and this is again, we kind of, I'm like a snowflake fan boy, you know, in the way you, you like AWS. But look, if you look at AWS glue elastic views, that to me is like snowflakes data cloud is different, a lot of pushing and moving a date, a lot of copying data. But, but this is a great example of where like, remember last year at reinvent, they said, Hey, we're separating compute from storage. Well, you know, of course, snowflake popularized that. So this is great example of two companies thriving that are both competitors and partners. >>Well, I've got to ask you, you know, you, you and I always say we kind of his stories, we've been around the block on the enterprise for years. Um, where do you Mark the, um, evolution of their partner? Because again, Amazon has been so explosive in their growth. The numbers have been off the charts and they've done it well with and pass. And now you have the pandemic which kind of puts on full display, digital transformation. And then Jassy telegraphing that the digital global it spend is their next kind of conquering ground, um, to take, and they got the edge exploding with 5g. So you have this kind of range and they doing all kinds of stuff with IOT, and they're doing stuff in you on earth and in space. So you have this huge growth and they still don't have their own fully oriented business model. They rely on people to build on top of Amazon. So how do you see that evolving in your opinion? Because they're trying to add their own Amazon only, we've got Redshift that competes with others. How do you see that playing out? >>So I think it's going to be specialized and, and something that, uh, that I've talked about is Amazon, you know, AWS in the old day, old days being last decade, they really weren't that solution focused. It was really, you know, serving the builders with tooling, with you, look at something like what they're doing in the call center and what they're doing at the edge and IOT there. I think they're, so I think their move up the stack is going to be very solution oriented, but not necessarily, you know, horizontal going after CRM or going after, you know, uh, supply chain management or ERP. I don't think that's going to be their play. I think their play is going to be to really focus on hard problems that they can automate through their tooling and bring special advantage. And that's what they'll SAS. And at the same time, they'll obviously allow SAS players. >>It's just reminds me of the early days when you and I first met, uh, VMware. Everybody had to work with VMware because they had a such big ecosystem. Well, the SAS players will run on top. Like Workday does like Salesforce does Infour et cetera. And then I think you and I, and Jerry Chen talked about this years ago, I think they're going to give tools to builders, to disrupt the service now is in the sales forces who are out buying companies like crazy to try to get a, you know, half, half a billion dollar, half a trillion dollar market caps. And that is a really interesting dynamic. And I think right now, they're, they're not even having to walk a fine line. I think the lines are reasonably clear. We're going up to database, we're going to do specialized solutions. We're going to enable SAS. We're going to compete where we compete, come on, partner ecosystem. And >>Yeah, I, I, I think that, you know, the Slack being bought by Salesforce is just going to be one of those. I think it's a web van moment, you know, um, you know, where it's like, okay, Slack is going to go die on Salesforce. Okay. I get that. Um, but it's, it's just, it's just, it's just, it's just old school thinking. And I think if you're an entrepreneur and if you're a developer or a partner, you could really reinvent the business model because if you're, dis-aggregating all these other services like you can compete with Salesforce, Slack has now taken out of the game with Salesforce, but what Amazon is doing with say connect, which they're promoting heavily at this conference. I mean, you hear it, you heard it on Andy Jessie's keynote, Sandy Carter. They've had huge success with AWS connect. It's a call center mindset, but it's not calling just on phones. >>It's contact that is descent, intermediating, the Salesforce model. And I think when you start getting into specialists and specialism in channels, you have customer opportunity to be valuable. And I think call center, these kinds of stories that you can stand up pretty quickly and then integrate into a business model is going to be game changing. And I think that's going to going to a lot of threat on these big incumbents, like Salesforce, like Slack, because let's face it. Bots is just the chat bot is just a call center front end. You can innovate on the audio, the transcriptions there's so much Amazon goodness there, that connect. Isn't just a call center that could level the playing field and every vertical >>Well, and SAS is getting disrupted, you know, to your, to your point. I mean, you think about what happened with, with Oracle and SAP. You had, you know, these new emerging players come up like, like Salesforce, like Workday, like service now, but their pricing model, it was all the same. We lock you in for a one-year two-year three-year term. A lot of times you have to pay up front. Now you look at guys like Datadog. Uh, you, you look at a snowflake, you look at elastic, they're disrupting the Splunks of the world. And that model, I think that SAS model is right for disruption with a consumption pricing, a true cloud pricing model. You combine that with new innovation that developers are going to attack. I mean, you know, people right now, they complain about service now pricing, they complain about Splunk pricing. They, you know, they talk about, Oh, elastic. We can get that for half the price Datadog. And so I'm not predicting that those companies service now Workday, the great companies, but they are going to have to respond much in the same way that Oracle and SAP had to respond to the disruption that they saw. >>Yeah. It's interesting. During the keynote, they'll talk about going out to the mainframes today, too. So you have Amazon going into Oracle and Microsoft, and now the mainframes. So you have Oracle database and SQL server and windows server all going to being old school technologies. And now mainframe very interesting. And I think the, this whole idea of this SAS factory, um, got my attention to Cohesity, which we've been covering Dave on the storage front, uh, Mo with the founder was on stage. I'm a data management as a service they're part of this new SAS factory thing that Amazon has. And what they talk about here is they're trying to turn ISV and VARs into full-on SAS providers. And I think if they get that right with the SAS factory, um, then that's going to be potentially game changing. And I'm gonna look at to see if what the successes are there, because if Amazon can create more SAS applications, then their Tam and the global it market is there is going to, it can be mopped up pretty quickly, but they got to enable it. They got to enable that quickly. Yeah. >>Enabling to me means not just, and I think, you know, when Jesse answered your question, I saw it in the article that you wrote about, you know, you asked them about multi-cloud and it, to me, it's not about running on AWS and being compatible with Azure and being compatible with Google. No, it's about that frankly abstraction layer that he talked about, and that's what Cohesity is trying to do. You see others trying to do it as well? Snowflake for sure. It's about abstracting that complexity away and adding value on top of the cloud. In other words, you're using the cloud for scale being really expert at taking advantage of the native cloud services, which requires is that Jessie was saying different API APIs, different control, plane, different data plane, but taking that complexity away and then adding new value on top that's white space for a lot of players there. And, and, and I'll tell you, it's not trivial. It takes a lot of R and D and it takes really smart people. And that's, what's going to be really interesting to see, shake out is, you know, can the Dell and HPE, can they go fast enough to compete with the, the Cohesity's you've got guys like CLU Mayo coming in that are, that are brand new. Obviously we talked about snowflake a lot and many others. >>I think there's going to be a huge change in expectations, experience, huge opportunity for people to come in with unique solutions. We're going to have specialty programming on the cube all day today. So if you're watching us here on the Amazon channel, you know that we're going to have an all of a sudden demand. There's a little link on our page. On the, on the, um, the Amazon reinvent virtual event platform, click here, the bottom, it's going to be a landing page, check out all the interviews as we roll them out all day. We got a great lineup, Dave, we got Nutanix pure storage, big ID, BMC, Amazon leaders, all coming in to talk today. Uh, chaos search ed Walsh, Rachel Rose, uh, Medicar Kumar, um, Mike Gill, flux, tons of great, great, uh, partners coming in and they're going to share their story and what's working for them and their new strategies. And all throughout the day, you're going to hear specific examples of how people are changing and reinventing their business development, their partnership strategies on the product, and go to market with Amazon. So really interesting learnings. We're going to have great conversations all throughout the day. So check it out. And again, everything's going to be on demand. And when in doubt, go to the cube.net, we have everything there and Silicon angle.com, uh, for all the great coverage. So >>I don't think John is, we're going to have a conversation with him. David McCann touched on this. You talked about the need for modernization and rationalization, Tim Crawford on, on later. And th this is, this is sort of the, the, uh, the call-out that Andy Jassy made in his keynote. He gave the story of that one. CIO is a good friend of his who said, Hey, I love what you're doing, but it's not going to happen on my watch. And, and so, you know, Jessie's sort of poking at that, that, uh, complacency saying, guys, you have to reinvent, you have to go fast, you have to keep moving. And so we're gonna talk a little bit about what, what does that mean to modernize applications, why the CIO is want to rationalize what is the role of AWS and its ecosystem and providing that, that, that level of innovation, and really try to understand what the next five to seven years are gonna look like in that regard. >>Funny, you mentioned, uh, Andy Jesuit that story. When I had my one-on-one conversation with them, uh, he was kind of talking about that anonymous CIO and I, if people don't know Andy, he's a big movie buff, too, right? He loves it goes to Sundance every year. Um, so I said to him, I said, this error of digital transformation, uh, is kind of like that scene in the godfather, Dave, where, um, Michael Corleone goes to Tom Hagen, Tom, you're not a wartime conciliary. And what he meant by that was is that, you know, they were going to war with the other five families. I think now I think this is what chassis pointed out is that, that this is such an interesting, important time in history. And he pointed this out. If you don't have the leadership chops to lean into this, you're going to get swept away. >>And that story about the CIO being complacent. Yeah. He didn't want to shift. And the new guy came in or gal and they, and they, and they lost three years, three years of innovation. And the time loss, you can't get that back. And during this time, I think you have to have the stomach for the digital transformation. You have to have the fortitude to go forward and face the truth. And the truth is you got to learn new stuff. So the old way of doing things, and he pointed that out very aggressively. And I think for the partners, that same thing is true. You got to look in the mirror and say, where are we? What's the opportunity. And you gotta gotta go there. If not, you can wait, be swept away, be driftwood as Pat Gelsinger would say, or lean in and pick up a, pick up a shovel and start digging the new solution. >>You know what the other interesting thing, I mean, every year when you listen to Jassy and his keynotes and you sort of experienced re-invent culture comes through and John you're live in Silicon Valley, you talked to leaders of Silicon Valley, you know, well, what's the secret of success though? Nine times out of 10, they'll talk about culture, maybe 10 times out of 10. And, and, and so that's, that comes through in Jesse's keynotes. But one of the things that was interesting this year, and it's been thematic, you know, Andy, you know, repetition is important, uh, to, to him because he wants to educate people and make sure it sticks. One of the things that's really been he's been focused on is you actually can change your culture. And there's a lot of inertia. People say, well, not on my watch. Well, it doesn't work that way around here. >>And then he'll share stories about how AWS encourages people to write papers. Anybody in the organization say we should do it differently. And, and you know, they have to follow their protocol and work backwards and all of those stuff. But I believe him when he says that they're open to what you have a great example today. He said, look, if somebody says, well, it's 10 feet and somebody else says, well, it's, it's five feet. He said, okay, let's compromise and say it's seven and a half feet. Well, we know it's not seven and a half feet. We don't want to compromise. We either want to be a 10, Oh, we want to be at five, which is the right answer. And they push that. And that that's, he gives examples like that for the AWS culture, the working backwards, the frequently asked questions, documents, and he's always pushing. And that to me is very, very important and fundamental to understanding AWS. >>It's no doubt that Andy Jassy is the best CEO in the business. These days. If you look at him compared to everyone else, he's hands down, more humble as keynote who does three hour keynotes, the way he does with no notes with no, he memorize it all. So he's competitive and he's open. And he's a good leader. I think he's a great CEO. And I think it will be written and then looked back at his story this time in history. The next, I think post COVID Dave is going to be an error. We're going to look back and say the digital transformation was accelerated. Yes, all that good stuff, people process technology. But I think we're gonna look at this time, this year and saying, this was the year that there was before COVID and after COVID and the people who change and modernize will build the winners and not, and the losers will, will be sitting still. So I think it's important. I think that was a great message by him. So great stuff. All right. We gotta leave it there. Dave, the analysis we're going to be back within the power panel. Two sessions from now, stay with us. We've got another great guest coming on next. And then we have a pair of lb talk about the marketplace pricing and how enterprises have CIO is going to be consuming the cloud in their ecosystem. This is the cube. Thanks for watching..

>>from around the globe. It's the Cube with digital coverage of AWS reinvent 2020 sponsored by Intel, AWS and our community partners. >>Everyone welcome to the cubes Live coverage of AWS reinvent 2020 virtual were virtual this year We are the Cube Virtual I'm your host John for a joint day Volonte for keynote analysis Andy Jassy just delivered his live keynote. This is our live keynote analysis. Dave. Great to see you, Andy Jassy again. You know their eight year covering reinvent their ninth year. We're virtual. We're not in person. We're doing it. >>Great to see you, John. Even though we're 3000 miles apart, we both have the covert here. Do going Happy birthday, my friend. >>Thank you. Congratulations. Five years ago I was 50 and they had the cake on stage and on the floor. There's no floor, this year's virtual and I think one of the things that came out of Andy Jessie's keynote, obviously, you know, I met with him earlier. Telegraph some of these these moves was one thing that surprised me. He came right out of the gate. He acknowledged that social change, the cultural shift. Um, that was interesting but he went in and did his normal end to end. Slew of announcements, big themes around pivoting. And he brought kind of this business school kind of leadership vibe to the table early talking about what people are experiencing companies like ourselves and others around the change and cultural change around companies and leadership. It takes for the cloud. And this was a big theme of reinvent, literally like, Hey, don't hold on to the old And I kept thinking to myself, David, you and I both are Historians of the tech industry remind me of when I was young, breaking into the business, the mainframe guys and gals, they were hugging onto those mainframes as long as they could, and I looked at it like That's not gonna be around much longer. And they kept No, it's gonna be around. This is this is the state of the art, and then the extinction. Instantly this feels like cloud moment, where it's like it's the wake up call. Hey, everyone doing it the old way. You're done. This is it. But you know, this is a big theme. >>Yes. So, I mean, how do you curate 2.5 3 hours of Andy Jassy. So I tried to break it down at the three things in addition to what you just mentioned about him acknowledging the social unrest and and the inequalities, particularly with black people. Uh, but so I had market leadership. And there's some nuance there that if we have time, I'd love to talk about, uh, the feature innovation. I mean, that was the bulk of his presentation, and I was very pleased. I wrote a piece this weekend. As you know, talk about Cloud 2030 and my main focus was the last 10 years about I t transformation the next 10 years. They're gonna be about organizational and business and industry transformation. I saw a lot of that in jazz ces keynote. So you know, where do you wanna go? We've only got a few minutes here, John, >>but let's break. Let's break down the high level theme before we get into the announcement. The thematic part was, it's about reinventing 2020. The digital transformation is being forced upon us. Either you're in the cloud or you're not in the cloud. Either way, you got to get to the cloud for to survive in this post covert error. Um, you heard a lot about redefining compute new chips, custom chips. They announced the deal with Intel, but then he's like we're better and faster on our custom side. That was kind of a key thing, this high idea of computing, I think that comes into play with edge and hybrid. The other thing that was notable was Jessie's almost announcement of redefining hybrid. There's no product announcement, but he was essentially announcing. Hybrid is changed, and he was leaning forward with his definition of redefining what hybrid cloud is. And I think that to me was the biggest, um, signal. And then finally, what got my attention was the absolute overt call out of Microsoft and Oracle, and, you know, suddenly, behind the scenes on the database shift we've been saying for multiple times. Multiple databases in the cloud he laid that out, said there will be no one thing to rule anything. No databases. And he called out Microsoft would look at Microsoft. Some people like cloud wars. Bob Evans, our good friend, claims that Microsoft been number one in the cloud for like like year, and it's just not true right. That's just not number one. He used his revenue a za benchmark. And if you look at Microsoft's revenue, bulk of it is from propped up from Windows Server and Sequel Server. They have Get up in there that's new. And then a bunch of professional services and some eyes and passed. If you look at true cloud revenue, there's not much there, Dave. They're definitely not number one. I think Jassy kind of throws a dagger in there with saying, Hey, if you're paying for licenses mawr on Amazon versus Azure that's old school shenanigans or sales tactics. And he called that out. That, to me, was pretty aggressive. And then So I finally just cove in management stuff. Democratizing machine learning. >>Let me pick up on a couple things. There actually were a number of hybrid announcements. Um, E C s anywhere E k s anywhere. So kubernetes anywhere containers anywhere smaller outposts, new local zones, announced 12 new cities, including Boston, and then Jesse rattle them off and made a sort of a joke to himself that you made that I remembered all 12 because the guy uses no notes. He's just amazing. He's up there for three hours, no notes and then new wavelength zones for for the five g edge. So actually a lot of hybrid announcements, basically, to your point redefining hybrid. Basically, bringing the cloud to the edge of which he kind of redefined the data center is just sort of another edge location. >>Well, I mean, my point was Is that my point is that he Actually, Reid said it needs to be redefined. Any kind of paused there and then went into the announcements. And, you know, I think you know, it's funny how you called out Microsoft. I was just saying which I think was really pivotal. We're gonna dig into that Babel Babel Fish Open source thing, which could be complete competitive strategy, move against Microsoft. But in a way, Dave Jassy is pulling and Amazon's pulling the same move Microsoft did decades ago. Remember, embrace and extend right Bill Gates's philosophy. This is kind of what they're doing. They have embraced hybrid. They have embraced the data center. They're extending it out. You're seeing outpost, You see, five g, You're seeing these I o t edge points. They're putting Amazon everywhere. That was my take away. They call it Amazon anywhere. I think it's everywhere. They want cloud operations everywhere. That's the theme that I see kind of bubbling out there saying, Hey, we're just gonna keep keep doing this. >>Well, what I like about it is and I've said this for a long time now that the edge is gonna be one by developers. And so they essentially taking AWS and the data center is an AP, and they're bringing that data center is an A P I virtually everywhere. As you're saying, I wanna go back to something you said about leadership and Microsoft and the numbers because I've done a lot of homework on this Aziz, you know, And so Jassy made the point. He makes this point a lot that it's not about the the actual growth rate. Yeah, the other guys, they're growing faster. But there were growing from a much larger base and I want to share with you a nuance because he said he talked about how AWS grew incrementally 10 billion and only took him 12 months. I have quarterly forecast and I've published these on Wiki Bond, a silicon angle. And if you look at the quarterly numbers and now this is an estimate, John. But for Q four, I've got Amazon growing at 25%. That's a year on year as you're growing to 46% and Google growing at 50% 58%. So Google and and Azure much, much higher growth rates that than than Amazon. But what happens when you look at the absolute numbers? From Q three to Q four, Amazon goes from 11.6 billion to 12.4 billion. Microsoft actually stays flat at around 6.76 point eight billion. Google actually drops sequentially. Now I'm talking about sequentially, even though they have 58% growth. So the point of the Jazz is making is right on. He is the only company growing at half the growth rate year on year, but it's sequential. Revenues are the only of the Big Three that are growing, so that's the law of large numbers. You grow more slowly, but you throw off more revenue. Who would you rather be? >>I think I mean, it's clearly that Microsoft's not number one. Amazon's number one cloud certainly infrastructure as a service and pass major themes in the now so we won't go through. We're digging into the analyst Sessions would come at two o'clock in three o'clock later, but they're innovating on those two. They want they one that I would call this member. Jasio says, Oh, we're in the early innings Inning one is I as and pass. Amazon wins it all. They ran the table, No doubt. Now inning to in the game is global. I t. That was a really big part of the announcement. People might have missed that. If you if you're blown away by all the technical and complexity of GP three volumes for EBS and Aurora Surveillance V two or sage maker Feature store and Data Wrangler Elastic. All that all that complex stuff the one take away is they're going to continue to innovate. And I, as in past and the new mountain that they're gonna Klima's global I t spin. That's on premises. Cloud is eating the world and a W s is hungry for on premises and the edge. You're going to see massive surge for those territories. That's where the big spend is gonna be. And that's why you're seeing a big focus on containers and kubernetes and this kind of connective tissue between the data machine layer, modern app layer and full custom. I as on the on the bottom stack. So they're kind of just marching along to the cadence of, uh, Andy Jassy view here, Dave, that, you know, they're gonna listen to customers and keep sucking it in Obama's well and pushing it out to the edge. And and we've set it on the Cube many years. The data center is just a big edge. And that's what Jassy is basically saying here in the keynote. >>Well, and when when Andy Jassy gets pushed on Well, yes, you listen to customers. What about your partners? You know, he'll give examples of partners that are doing very well. And of course we have many. But as we've often said in the Cube, John, if you're a partner in the ecosystem, you gotta move fast. There were three interesting feature announcements that I thought were very closely related to other things that we've seen before. The high performance elastic block storage. I forget the exact name of it, but SAN in a cloud the first ever SAN in the cloud it reminds me of something that pure storage did last year and accelerate so very, very kind of similar. And then the aws glue elastic views. It was sort of like snowflake's data cloud. Now, of course, AWS has many, many more databases that they're connecting, You know, it, uh, stuff like as one. But the way AWS does it is they're copying and moving data and doing change data management. So what snowflake has is what I would consider a true global mesh. And then the third one was quicksight que That reminded me of what thought spots doing with search and analytics and AI. So again, if you're an ecosystem partner, you gotta move fast and you've got to keep innovating. Amazon's gonna do what it has to for customers. >>I think Amazon's gonna have their playbooks when it's all said and done, you know, Do they eat the competition up? I think what they do is they have to have the match on the Amazon side. They're gonna have ah, game and play and let the partners innovate. They clearly need that ecosystem message. That's a key thing. Um, love the message from them. I think it's a positive story, but as you know it's Amazons. This is their Kool Aid injection moment, David. Educational or a k A. Their view of the world. My question for you is what's your take on what wasn't said If you were, you know, as were in the virtual audience, what should have been talk about? What's the reality? What's different? What didn't they hit home? What could they have done? What, your critical analysis? >>Well, I mean, I'm not sure it should have been said, but certainly what wasn't said is the recognition that multi cloud is an opportunity. And I think Amazon's philosophy or belief at the current time is that people aren't spreading workloads, same workload across multiple clouds and splitting them up. What they're doing is they're hedging bets. Maybe they're going 70 30 90 10, 60 40. But so multi cloud, from Amazon standpoint is clearly not the opportunity that everybody who doesn't have a cloud or also Google, whose no distant third in cloud says is a huge opportunity. So it doesn't appear that it's there yet, so that was I wouldn't call it a miss, but it's something that, to me, was a take away that Amazon does not currently see that there's something that customers are clamoring for. >>There's so many threads in here Were unpacked mean Andy does leave a lot of, you know, signature stories that lines in there. Tons of storylines. You know, I thought one thing that that mass Amazon's gonna talk about this is not something that promotes product, but trend allies. I think one thing that I would have loved to Seymour conversation around is what I call the snowflake factor. It snowflake built their business on Amazon. I think you're gonna see a tsunami of kind of new cloud service providers. Come on the scene building on top of AWS in a major way of like, that kind of value means snowflake went public, uh, to the level of no one's ever seen ever in the history of N Y s e. They're on Amazon. So I call that the the next tier cloud scale value. That was one thing I'd like to see. I didn't hear much about the global i t number penetration love to hear more about that and the thing that I would like to have heard more. But Jassy kind of touched a little bit on it was that, he said at one point, and when he talked about the verticals that this horizontal disruption now you and I both know we've been seeing on the queue for years. It's horizontally scalable, vertically specialized with the data, and that's kind of what Amazon's been doing for the past couple of years. And it's on full display here, horizontal integration value with the data and then use machine learning with the modern applications, you get the best of both worlds. He actually called that out on this keynote. So to me, that is a message to all entrepreneurs, all innovators out there that if you wanna change the position in the industry of your company, do those things. There's an opportunity right now to integrate with the cloud to disrupt horizontally, but then on the vertical. So that will be very interesting to see how that plays out. >>And eventually you mentioned Snowflake and I was talking about multi cloud snowflake talks about multi cloud a lot, but I don't even think what they're doing is multi cloud. I think what they're doing is building a data cloud across clouds and their abstracting that infrastructure and so to me, That's not multi Cloud is in. Hey, I run on Google or I run on the AWS or I run on Azure ITT's. I'm abstracting that making that complexity disappeared, I'm creating an entirely new cloud at scale. Quite different. >>Okay, we gotta break it there. Come back into our program. It's our live portion of Cube Live and e. K s Everywhere day. That's multi cloud. If they won't say, that's what I'll say it for them, but the way we go, more live coverage from here at reinvent virtual. We are virtual Cuban John for Dave a lot. They'll be right back.

la from Las Vegas it's the cube covering AWS reinvent 2019 brought to you by Amazon Web Services and Vinum care along with its ecosystem partners hello everyone welcome to the cube we're here live in Las Vegas for AWS reinvent 2019 I'm John Farrar your host is silicon Angles flagship the cube we're extract a signal noise leader in event coverage with day Volante my co-host and justin warren tech analysts Forbes contributor guru of cube host guys keynote for J&E jassie first of all I don't know how he does it he's just like continues hissing Marc loved the live music in there but a slew of announcements this is a reinvention of AWS you can tell that they're just essentially trying to go the next level on what the cloud means how they're gonna bring it to customers and you know they've been criticized for you know kind of nut I won't say falling behind I could say Microsoft's been probably praised more for catching up and it's been a lot of discussion around that the loss of the Jedi contract variety of enterprise wins Microsoft has the field Salesforce Google's just kind of retooling but Amazon clearly the leader with a little pressure for the first time in the rearview mirror they've got someone on their on their tail win and Microsoft's far back but this isn't a statement from from chassis and Amazon of okay you want to see the Jets we're gonna we're gonna turn on the Jets and blow pass everybody Jesse gets cocky self Justin what do you think yeah so a lot of signaling to enterprise that it's safe to come here it's this is where you can have everything that you need to get everything that you need done you can get all of it in one place so there there is a real signal there to say Enterprise if you want to do cloud there's only one place to do cloud enterprise customers they tried out some big names Goldman Sachs not a small enterprise they had all the classic born in the cloud but you know we put out this concept on I'm on our Silicon angle post called reborn in the cloud almost born-again enterprise you start to see the telegraphing of what their core message is which is transform just don't kick the tires and fall into the Microsoft trap go with em is on and transform your business model transform your miss not just run IT a better way than before well yeah I mean I'm impressed they got two CEOs the CEO of Goldman Sachs David Solomon the CEO of Cerner coming to the show it's kind of rare that the CEO of your customer comes to the show I guess the second thing I'd say is you know Amazon is not a rinse and repeat company at these shows although they are when it comes to shock and awe so they ticked the Box on shock and awe but you're right John they're talking a lot about transformation I sort of think of it as disruption here's what I would say to that Amazon has a dual disruption agenda one is its disrupting the horizontal technology stack and 2 its disrupting industries it wants to be the platform of which startups in particular but also incumbents can disrupt industries and it's in their DNA because it's in Amazon's DNA and I think it's the last thing I'll say as Amazon is the reach a Amazon retailers the you can buy anything here store and now to your point Justin Amazon Web Services is you can get AWS anywhere at the edge and a little mini data centers that they're built on outpost and of course in the cloud all right I want to get you guys reactions a couple things I saw and I want to just analyze the keynote one as we saw Jesse come out with the transformation message that's really more of their posture to the market you should be transforming we're gonna take Amazon as a center of gravity and push it out to the edge without post so kind of a customer company posture there on the industry then you had the announcements and I thought that the sage maker studio was pretty robust a lot of data and announcements so you had the transformation message a lot of core data and then they kind of said hey we're open we got open source databases we got kubernetes and multiple flavors a couple steers from the Twitter crowd on that one and then finally outpost with the edge where they're essentially you know four years ago Dave they said no more data centers in ten years now they're saying we're gonna push Amazon to the your datacenter so you know a posture for the company a lot of data centric data ops almost program and build I'm also DevOps feel to it what's your reaction to that I think the most interesting part for me was the change there was a bit of a shift there I think he made the statement of rather than bringing the data to the computer we want to bring the compute to the data and I think that's that's acknowledging reality that data has gravity and it's very difficult for enterprises particularly if you've already invested a lot in building a data Lake so being able to just pick that up and then move it to any cloud nothing let alone AWS just moving that around is is a big effort so if you're going to transform your business you have to kind of rethink completely how you address some of these issues and one of that would be well what if rather than let's just pick everything up and move it to cloud what if we could actually do something a little bit better than that and we can pick and choose what we want to suit our particular solution and your point Dave I think that's where Amazon strength comes from is it they are the everything store so you can buy whatever you want be at this tiny little piece that only five companies need or the same thing that everyone else on the planet needs you can come and buy everything from us and that's what I think they're trying to signal to an organization that says look if you want to transform and you're concerned that it'll be difficult to do we've got you we've got something here that will suit your needs and we will be able to work with you to transform your business and we're seeing you know Amazon years ago we wouldn't talk about hybrid and now they're going really all-in on hybrid and it's not outpost is no longer just this thing they're doing with VMware it's now a fundamental piece of their infrastructure for the edge and I think the key point there is the the edge is going to be one with developers and Amazon is essentially bringing its development platform to the edge without posts as the the underpinning and I like the strategy much much better than I like what I'm seeing from some of the guys like HP and Dell which is they're throwing boxes you know over the fence with really without a strong developer angle your thoughts I mean my my big takeaway was I think this is key knows about a next-generation shift on the business model but that's the transformation he didn't come out and say it I said it in my post but I truly believe if you're not born in the cloud or reborn in the cloud you'll probably be out of business and as a startup were to ask them of the VCS this question how do you go after and target some of those people who aren't gonna be reborn in the cloud to have the scale advantage but the data announcements was really the big story here because we look at DevOps infrastructure as code programming infrastructure we've seen that that that's of now an established practice now you start to see this new concept around data ops some people call it AI ops whatever but Dana now the new programmability it's almost a devops culture - data and I think what got my attention the most was the IDE for stage maker which kind of brings in this cool feature of what everyone was which is I want machine learning but I can't hire anybody and I got to make I got a democratized machine learning I got to make application developers get value out of the data because the apps need to tap the data it's got to be addressable so I think this is a stake in the ground for the next five to ten years of a massive shift from increasing the DevOps mission to add a layer making that manageable multiple databases he's totally right on that it's not one database if you want time series for real-time graph for you know network constructs it's pick your database you know that shouldn't be it inhibitor at all I think the data story is real that's the top story in my mind the data future what that's going to enable and then the outpost is just a continuation of Amazon realizing that the center of the cloud is not the end game it's just the center of gravity and I think you gonna start to see edge become really huge I mean I count ten into ten purpose-built databases now and jesse was unequivocal he said you gotta have the right database tool for the right job you're seeing the same thing with their machine learning and AI tools it's been shocking dozens and dozens of services each with their own sort of unique primitives that give you that flexibility and so where you can disagree with the philosophy but their philosophy is very clear we're gonna go very granular and push a lot of stuff out there I think there's two bits at play there that I can see you know I think you're right on the data thing and something that people don't quite realize is that modern data analysis is programming like it's code your data scientists know how to code so there was a lot of talk there about notebooks going in there like they love their notebooks they love using different frameworks to solve different problems and they need to be able to use for this one I need tens of flow for another one I might need MX net yeah so if you couple that that idea that we need to it's all about the data and you couple that with developers and AWS knows developers really really well so you've got modern enterprises lot wanting to do more with the data that they have the age or business problem of I've got all this information I need to process I need to do be out bi I need to do data analysis and you couple that with the Pala that iws has with developers I think it's a pretty strong story then you know in my interview with Jesse I asked him the question and I stole the line from Steve Moe Mulaney from aviatrix you take the tea out of cloud native it's cloud naive and I think what I've been seeing is a lot of customers have been naive about what cloud is and it's actually been buying IT and so they really don't are not sensitive to the capabilities message so I asked Jeff see I'm like you got these capabilities that's cool if you want to go to the store and buy everything or look at everything and buy what you want and construct and transform check no problem I buy that however some customers just want a package solution and Amazon has not always been great on having something packaged for customers so he kind of addressed that and this might be an Achilles heel for Amazon as Microsoft has such entrenched sales sales presence that they might be pushing a solution that frankly customers might not care about capabilities we did see one bit where there was a little bit of a nudge towards is fees and and systems integrators and I think that that really for me is there needs to be a lot more work done by Amazon there because that's what Enterprise me enterprise is used to dealing with systems integrators that will help them to use the raw materials that ados provides to solve that promote you said there are two segments of developers and customers one that wants all the low level building blocks and others want simpler faster results with abstractions aka packaging so they're going down the road but again they're not shy don't like hey we're just going to continue to build we're not going to try to move off our trajectory they're gonna stay with adding more power and frankly some digs at snowflake I fought with red shift and I thought the dig to the kubernetes community with we code our own stuff wink wink we don't have to slow down was a nice jab at the CN CF I thought because he's saying hey you know what we're not in committees deciding features which is the customers and implementing them so a kind of a jab well sure that's gonna rapid a I would say the snowflake is sort of a copycat separating compute from stores that's what snowflakes has been doing forever but he did take direct jabs at IBM Oracle and obviously Microsoft with with Windows so I like to see that you know usually Jessie doesn't do that it's good take the gloves so much so many announcements out there you got to go to silk and angled comm will have all the stories but one of the top stories coming into the reinvent that we didn't hear anything about but if you squint through and connect the dots on Jessie's keynote it is pretty evident what the strategy is and that's multi-cloud so I'll see multi-cloud is a word that Amazon is not using at all onstage as you can tell they don't really they're in well they're one cloud they don't really care about the other clouds but their customers do so guys multi cloud is a legit conversation how they get multi cloud is debatable acquisition sprawl by the end of the day multiple clouds is reality I think Jessie was kind of predicting and laying down some early narratives around the multi cloud story by saying hey we have more capabilities we're faster we're doing more stuff so I think he's trying to cede the base on the concept of hey if you want to go look at other clouds try to go apples to apples NIT that other than that he didn't really address at all multi-cloud what do you guys think about multi cloud yeah what it's pretty much that if you're gonna have multiple clouds at least one of them's gonna be AWS so they're gonna get some of your money if we came a bi can't get all your money I'll get at least get some of your money that's reasonable but I think part of the multi cloud conversation is that enterprises are actually trying to clarify their existing way of doing things so cloud isn't a destination it's not like a it's not a physical location it's a state of mind it's a way of operating things an enterprise that that's that's the transformation part that enterprises are trying to do so transform the way that they operate themselves to be more cloud like so part of the multi cloud piece I think that people are kind of missing is well it's not just Amazon or some of its competitors its existing on-site infrastructure and making that into a cloud which i think is where something like outpost becomes a really strong proposition and I've said a million times multiplied cloud is more of a symptom than it is a strategy that'll start to change they will see an equilibrium there you know right cloud for the right job but today it's a problem that CIOs are asked being asked to clean up the crime scene all right let's wrap up by summarizing the keynote each of you guys give me your take on I'll start I think this was a inflection point for AWS and Jesse in the sense of they now know they have to go the next gen loud it's Amazon enterprise it's data it's outpost it's all these things it's truly next-gen I think this is going to be all about data it's all gonna be about large-scale infrastructure and data scaling and with edge and outpost I think is really an amazing move for them in the sense that's gonna probably put in motion another five to ten years of continuing architectural reshipping and I think that if you're not born in the cloud or reborn in the cloud you're gonna be naive to the fact that you're not gonna have the capabilities to be success when I think that's going to be an opportunity for entrepreneurs and for companies pivoting into enterprises so I think this goes will go might go down as one of the most pax keynotes but I think it'll look back as one of the instrumental transitions for Amazon so I think he did a good job beginning and to rush 30 announcements in three hours marathon but overall I thought he did a great job I think I would agree Jesse always does a good job he's giving a message to you know CEOs as opposed to the CIO and he had two CEOs on stage I thought there was quite a gap between you know that message of transformation and then sort of geeking out on all the new services so there's still some work to be done there but I think it's a lot of developers in the audience I'm seeing them tell your boss to get on the train it's a very hard keynote to serve both audiences but so it's a start but there's a lot of work to be done there Justin yeah I agree with that I think this is probably one of the first keynotes maybe last year but certainly this year there's like AWS is very serious about enterprise and is trying to talk to enterprise a lot more than it ever has it still talks to developers but we didn't see anywhere near as much interesting in kind of the startup ecosystem it's like no no cloud is for serious companies doing serious work and I think that we're just going to see Amazon talking about that more and more and more because that's where all the money is yeah next-generation cloud new architectures all about the enterprise guys this is the cube opening day for three days of wall-to-wall coverage keynote analysis from Andy Jessie and Amazon Andy Jessie will be on Thursday at 3 o'clock we got a lot of top Amazon executives will who'll help us open and unpack all these to make mega announcements stay with us for more cube coverage and go to Silicon angle comm cube net for the videos be back back after this short break [Music]

live from Las Vegas it's the cube covering AWS reinvent 2018 brought to you by Amazon Web Services Intel and their ecosystem partners everyone welcome back to the cube day two of three days of wall-to-wall coverage here in Las Vegas for AWS Amazon Web Services reinvent 2018 start sixth year covering I was only meeting to all the reinvents except for the original one I'm John for a mykos David Lunz we got two sets here and set one we got another set over there's so much content set upstairs total of four sets here covering all the video covers and right now we're coming off the keynote with Andy Jesse full of action packed analysis Dave a pretty amazing set of keynotes they had so many announcements here at ABS they had to basically start releasing them they did media alerts before the show midnight madness just a lot of front-end releases that would be notable releases for any other other conference they're letting out early Andy Jesse only has two hours on stage he's giving the keynote finishing up huge amounts of news announcements Dave so you know you went to the analyst session I met with any Jesse last Monday night for the preview we've been following Amazon a lot of the stuff that we've been saying for the past multiple years is actually happening our original predictions and impact of a toes of business on the IT landscape is happened and happening and now new areas that they're focused on that extends their a leadership both technology and the business and on the business model side continue to come on they well yesterday launched as a preview satellites as a service you actually stand up some satellites which is the power of the IOT has so many implications so many things to talk about through the course of today a lot of interviews we're gonna have again day two let's analyze Andy's keynote and the company what's your take their business is strong their lead a lot of analysts are fooled by the numbers you're not we've been watching it huge number of lead in the cloud I think the first thing I want to say is I go to Silicon angle calm I read you're both of your pieces that are up there your piece on Forbes this is a preview and then the the number of announcements here is just overwhelming last two days at the analyst event they gave us previews of sixty-two announcements and that's only a partial list of the announcement 62 that they took us through it was like rapid-fire kool-aid injection unbelievable so silicon Hangul comm is covering as much of that as physically possible any chassis made a big point this morning and at the private analyst meeting of talking about the context of the cloud market he's very sensitive to people misinterpreting growth there are 26 27 billion dollar business exclusively focused on infrastructure as a service and they're totally transparent about the size of that business everybody else throws in SAS I mean you've made this point a bunch of times and all these other things they mix in hosting and you really can't tell what's what despite that Amazon is by far the leader infrastructure as a service with over 50% of the marketplace now they're only growing at 46% but there are 26 27 billion-dollar run rate business growing at 46% so you see sometimes like Microsoft growing it whatever 70% but they're much much smaller so the absolute number in terms of revenue growth is much much higher for Amazon so that's sort of point number one the thing that Jesse doesn't talk about is the profitability of the business they're transparent about it in their financials Amazon has 28 percent operating margins now just to put that in the context software companies like Oracle have 37 percent operating margins Microsoft 32 percent AWS I just mentioned 28 percent Cisco 25 percent VMware as a software companies with 22 percent operating margins IBM 15 percent Dell eight point seven percent HPE seven percent this underscores the power of the AWS model at scale where they're driving the marginal cost of new services and deploying new services down to zero and it just keeps getting stronger and stronger and stronger and as a great point as a flywheel effect totally Amazon like but it's a great point ago we've been saying it for a long time the competitive advantage is scale and speed and jessee's now adopting that into his rhetoric into his into his narrative totally true and the other thing to point out on that margin and the profitability is that they're plowing it back in so what what you have at scale I wrote this in my Forbes post and in space at all in Silicon angle transcripts are my my exclusive interview with Andy is that not only are they profitable so they have software like margins for what is what is a hardware business basically in the cloud the stack and in Iraq on their own servers they're making their own chips as they start getting the scale up Dave they are getting a competitive advantage I'm following the profitability back in to launch new services so as the trajectory and I kind of tease this out in my Forbes article I wrote which is as you have a trajectory of growth they're building on that trajectory and the competition is trying to copy Amazon and you can't you can't get the trajectory value by trying to meet Amazon's current trajectory that's called diseconomies of scale I teach you that in business school this economies of scales it's the unsub optimized execution model where you run you don't have the learning experience that you don't have the scale Amazon has that trajectory and as people try to match them they will lose and they're at risk of losing because the risk so the only play for the competition in my opinion like Google like Microsoft like others is to change the goalposts they got to change the playing field on Amazon this is the number one thing that the industry is looking at Amazon is making the market they continue to make the market as market makers that's gonna attract an ecosystem that's gonna attract value and and more companies the only competitive strike that I think one could make is to change the playing field they got to change the game on Amazon that is extremely difficult to do when you're operating at scale you got the profitability numbers you talked about so again that is the new bar and as Amazon I'm we've said this every year ever and every year they've done it they've doubled their aurora customers on the database lied every year they introduced more services last year they in 2018 they'll have introduced significantly new services and the number of eighteen hundred plus okay the year before is like fourteen hundred next year we're probably higher by introducing new services faster that keeps the pace and that's what's hard to copy it's hard for competition to try to match that and as they try to match it they have the diseconomies of scale this is a major advantage this is going to give Amazon customers a comfort because they know that that's that scale becomes more stable products becomes stable the flywheel kicks in and as data gets into the cloud it gets sticky so there's no real lock in spec you can move every in and out of Amazon all you want but why would you because the benefits of being in Amazon far outweigh benefits of actually doing anything else so again the lock-in spec doesn't exist anymore from a technology feature standpoint it's a lock in spec on business model oh it's better well and I want to add something some color to what you said about the the new services and the pace of innovation their services of substance and we know this because our developers you know they talked to us about Amazon Andy Jesse told the story about one of his his executives that was on a plane leaving Seattle he didn't mention Microsoft but clearly he was talking about Microsoft that somebody's laptop was up the PowerPoint presentation it said their strategies explicitly said just announce what Amazon announces don't worry about the functionality and and what so what Amazon what Microsoft is doing presumably it was Microsoft is basically saying check the box freeze the market we have that too so to your point competitors cannot compete with Amazon on pace of innovation no way what they have to do is in the case of Microsoft they have to rely on their software estate in the case of Google you know they've got their innovations ok fine but nobody can match Amazon head-to-head don't just lose every time I like Google's position I love I love Google's got the technology power but you're exactly right that competitive strategy of checking the boxes is an old way of competing and I think what's interesting is the competition has not yet woke up to the fact that the game has already changed on them look at the public sector work that Teresa Collins done the CIA deal really made Amazon a business model because people said hey the CIA could do it we could do it that's been that's come up in all my conversations across all Amazon executives but what's happening now the DoD isn't the only soul source or that's Oracle's business they try to compete I'm checking the boxes but because it's so easy to use the cloud and Andy talked about this as keynote is that you can't fake it till you make it hey you can't you got it you have the surge it's gotta be up and running so it's very easy to do a bake off so you know that it's so that whole way of competing of checking the boxes over the only way to compete is have value and that is a new flywheel that's what's happening right now and that's key so so let me set it up so when you get to reinvent I mean I'm so psyched to be here with you John it's been a while but but try that you try to absorb all the innovation so you so try to boil it down you got to look at it it to simplify it two dimensions one is the data exploiting data better use out of data and the other is developers and developer tools and making it simpler for developers their announcements the 60-plus announcement that they made I break them down into five categories storage and database services compute networking and security third is ease of use and abstractions making things simpler fourth is machine learning and developer tools and the fifth is these new growth frontiers like you mentioned satellite as a service and some other things like in hybrid that we're going to talk about so the announcements kind of fit into that framework but let's maybe highlight some of the announcement a lot of time at least just run down the announcements real quick to meet the main main ones at the place he started the bottom of the stack and move it has moved up storage deep glacier FX Windows file systems lustre for high-performance workloads the new persona developer he call it the Builder the right tool for the right job this is a constant refrain he's been saying control tower blueprints and guardrails template based approach to stand up new use cases for compliance all the kind of detailed manual things that they're automating signal from the noise I love that phrase he put on this put on the big screen that's our motto here it's looking angle security hub lake formation instant data lakes he kind of was pooh-poohing data Lake which I love them like oh shit it'll is just one piece of freedom around databases so one storage was a huge part of the innovation and they're expanding that front and compute and storage it's gonna be critical the database war is definitely happening open engines Aurora doubling customers DynamoDB runtime capacity on demand sensors and time series dais they have timestream block chaining address that straight up look at weekly we'd love blockchain if the customers wanted we're gonna look at and understand it then announce that they announced the quantum ledger database ql DB amazon manage blockchain service so you want etherium or hyper ledger got it and then he moved on to Mitch from databases to machine learning this is where sage maker comes in so you got s3 and ec2 that the pillars you got Aurora that's the key product and then sage making the other key product at the top of stack sets the tone for all these abstractions the machine learning trends tensorflow if you want to use it no problem we'll optimize it Amazon inference engine so elastic inferences blatant see they got a chip inference chip in inferential inferential so you put it the chip and the elasticity service together you have a powerful combination that comes out of the Annapurna acquisition from 2015 building and tuning and managing machine learning apps is gonna be a control area they're gonna add value on and the insights coming from this and marketplace capability so and then on and on and finally the Amazon on premise stack which is gonna be called outpost is the final nail of the coffin behind the strategy because think about it you're gonna put Amazon on premise with a hardware device that's gonna connect with the cloud with all the innovation and this is what amy jazzy talked about we're not just a software company we're hardware we're networking we're compute we're storage and we're software abstractions we're gonna bring that and put it in a device so we're gonna basically create a Amazon Cloud in a box search solution on premise to allow people to manage those Layton sees where network traffic is there this is not just a software only he's not gonna let people run their databases on their clouds it's the Amazon footprints I wanna make a comment about that I came in to reinvent with the with the statement that Amazon actually is winning in hybrid now they used to not talk about hybrid as you well know how can I make that statement when they don't really deliberately go after hybrid well the reason I made the statements cuz the entire ecosystem is connecting to Amazon s3 targets Direct Connect you've seen Amazon do things like snowball and VPC so now what Amazon is doing without post is they're putting the exact same hardware that Amazon uses in its data centers allowing customers to put that in their data centers the identical configuration control plane hardware etc that move is going to really even further extend yeah Amazon's lead and hybrid yeah and we're gonna have eme Jesse on Thursday day of coverage here we have Teresa Carlson on Andy Jessie all the topics David gave McCann you name all the AIG folks coming on as well we're gonna get into all this and extract the signal from all this signal out here of course RTS on VMware I forgot it the other way so there's so much this noise omus iot there IOT strategy is bottoms up and very very impressive gonna have Jerry Chen come on former VMware cloud guy now great little cray lakh venture capital partners over there he's gonna come on and analyze what's the only announcements we're gonna continue to tease out the announcement of course but a silicon angle comm check out all the news it's a tsunami of content coming out of reinvent totally game-changing days we're gonna wrap it up here we're gonna do more analysis so you'll see a bunch of videos on on our YouTube channel and stay tuned watching all week here for live coverage I'm chef Devaux want a stay with us we'll be right back [Music]

>> Live, from Las Vegas! It's theCube! Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. >> Welcome back everyone, it's theCube's live coverage in Las Vegas for VMworld 2018, it's theCube. We got two sets, 24 interviews per day, 94 interviews total. Next three days, we're in day two of three days coverage. It's our ninth year of covering VMworld. It's been great. I'm John Furrier with Dave Vellante, next guest, Cube alumni, number one in the leading boards right now, Sanjay Poonen did a great job today on stage, keynote COO for VMware. Great to have you back. Thanks for coming on. >> John and Dave, you're always so kind to me, but I didn't realize you've been doing this nine years. >> This is our ninth year. >> That's half the life of VMware, awesome. Unreal. Congratulations. >> We know all the stories, all the hidden, nevermind, let's talk about your special day today. You had a really, so far, an amazing day, you were headlining the key note with a very special guest, and you did a great job. I want you to tell the story, who was on, what was the story about, how did this come about? Tech for good, a big theme in this conference has really been getting a lot of praise and a lot of great feedback. Take us through what happened today. >> Well listen, I think what we've been trying to do at VMware is really elevate our story and our vision. Elevate our partnerships, you've covered a lot of the narrative of what we've done with Andy Jessie. We felt this year, we usually have two 90 minute sessions, Day One, Day Two, and it's filled with content. We're technical company, product. We figured why don't we take 45 minutes out of the 180 minutes total and inspire people. With somebody who's had an impact on the world. And when we brainstormed, we had a lot of names suggested, I think there was a list of 10 or 15 and Malala stood out, she never spoke at a tech conference before. I loved her story, and we're all about education. The roots of VMware were at Stamford Campus. Diane Greene, and all of that story. You think about 130 million girls who don't go to school. We want to see more diversity in inclusion, and she'd never spoken so I was like, you know what, usually you go to these tech conferences and you've heard somebody who's spoken before. I'm like, lets invite her and see if she would come for the first time, and we didn't think she would. And we were able to score that, and I was still a little skeptical 'cause you never know is it going to work out or not. So thank you for saying it worked, I think we got a lot of good feedback. >> Well, in your first line, she was so endearing. You asked her what you thought a tech conference, you said too many acronyms. She just cracked the place up immediately. >> And then you heard my response, right? If somebody tells me like that, you tell VMotion wrong she looked at me what? >> Tell them about our story, real quick, our story I want to ask you a point in question. Her story, why her, and what motivated you to get her? >> Those stories, for any of you viewers, you should read the book "I'm Malala" but I'll give you the short version of the story. She was a nine year old in the Pashtun Area of the Swat Valley in Pakistan, and the Taliban setted a edict that girls could not go to school. Your rightful place was whatever, stay at home and become a mom with babies or whatever have you. You cannot go to school. And her father ran a school, Moster Yousafzai, wonderful man himself, an educator, a grandfather, and says know what, we're going to send you to school. Violating this order, and they gave a warning after warning and finally someone shot her in 2012, almost killed her. The bullet kind of came to her head, went down, and miraculously she escaped. Got on a sort of a hospital on a plane, was flown to London, and the world if you remember 2012, the world was following the story. She comes out of this and she's unscathed. She looks normal, she has a little bit of a thing on the right side of her face but her brains normal, everything's normal. Two years later she wins the Nobel Peace Prize. Has started the Malala Fund, and she is a force of nature, an amazing person. Tim Cook has been doing a lot with her in the Malala Fund. I think that actually caught my attention when Tim Cook was working with her, and you know whatever Apple does often gets a little bit of attention. >> Well great job selecting her. How's that relevant to what you guys are doing now, because you guys had a main theme Tech for Good? Why now, why VMware? A lot of people are looking at this, inspired by it. >> There are milestones in companies histories. We're at our 20 year birthday, and I'm sure at people's birthday they want to do big things, right? 20, 30, 40, 50, these decades are big ones and we thought, lets make this year a year to remember in various things we do. We had a 20 year anniversary celebration on campus, we invited Diane Greene back. It was a beautiful moment internally at Vmware during one of our employee meetings. It was a private moment, but just with her to thank her. And man, there were people emotional almost in tears saying thank you for starting this company. A way to give back to us, same way here. What better way to talk about the impact we're having in the community than have someone who is of this reputation. >> Well we're behind your mission 100%, anything you need. We loved the message, Tech for Good, people want to work for a mission driven company. People want to buy >> We hope so. >> from mission driven companies, that stated clear and the leadership you guys are providing is phenomenal. >> We had some rankings that came out around the same time. Fortune ranked companies who are changing the world, and VMware was ranked 17th overall, of all companies in the world and number one in the software category. So when you're trying to change the world, hopefully as you pointed out it's also an attractor of talent. You want to come here, and maybe even attractor of customers and partners. >> You know the other take-away was from the key note was how many Cricket fans there are in the VMworld Community. Of course we have a lot of folks from India, in our world but who's your favorite Cricketer? Was it Sachin Tendulkar? (laughs) >> Clearly you're reading off your notes Dave! >> Our Sonya's like our, >> Dead giveaway! >> Our Sonya's like our Cricket Geek and she's like, ask him about Sachin, no who's your favorite Cricketer, she wants to know. >> Sachin Tendulkar's way up there, Shayuda Free, the person she likes from Pakistan. I grew up playing cricket, listen I love all sports now that I'm here in this country I love football, I love basketball, I like baseball. So I'll watch all of them, but you know you kind of have those childhood memories. >> Sure >> And the childhood memories were like she talk about, India, Pakistan games. I mean this was like, L.A. Dodgers playing Giants or Red Socks, Yankee's, or Dallas Cowboys and the 49ers, or in Germany playing England or Brazil in the World Cup. Whatever your favorite country or team rivalry is, India Pakistan was all there more, but imagine like a billion people watching it. >> Yeah, well it was a nice touch on stage, and I'd say Ted Williams is my favorite cricketer, oh he plays baseball, he's a Red Sock's Player. Alright Sanjay, just cause your in the hot seat, lets get down to business here. Great moment on stage, congratulation. Okay Pat Gelsinger yesterday on the key note talked about the bridges, VMware bridging, connecting computers. One of the highlights is kind of in your wheelhouse, it's in your wheelhouse, the BYOD, Bring Your Own Device bridge. You're a big part of that. Making that work on on the mobile side. Now with Cloud this new bridge, how is that go forward because you still got to have all those table stakes, so with this new bridge of VMware's in this modern era, cloud and multicloud. Cluely validated, Andy Jassy, on stage. Doing something that Amazon's never done before, doing something on premise with VMware, is a huge deal. I mean we think it's a massive deal, we think it's super important, you guys are super committed to the relationship on premises hybrid cloud, multicloud, is validated as far as we're concerned. It's a done deal. Now ball's in your court, how are you going to bring all that mobile together, security, work space one, what's your plan? >> I would say that, listen on as I described in my story today there's two parts to the VMware story. There's a cloud foundation part which is the move the data center to the cloud in that bridge, and then there's the desk job move it to the mobile. Very briefly, yes three years of my five years were in that business, I'm deeply passionate about it. Much of my team now that I put in place there, Noah and Shankar are doing incredible jobs. We're very excited, and the opportunity's huge. I said at my key note of the seven billion people that live in the world, a billion I estimate, work for some company small or big and all of them have a phone. Likely many of those billion have a phone and a laptop, like you guys have here, right? That real estate of a billion in a half, maybe two billion devices, laptops and phones, maybe in some cases laptop, phone, and tablets. Someone's going to manage and secure, and their diverse across Apple, Google, big option for us. We're just getting started, and we're already the leader. In the data center, the cloud world, Pat, myself, Raghu, really as we sat three years ago felt like we shouldn't be a public cloud ourselves. We divested vCloud Air, as I've talked to you on your show before, Andy Jassy is a friend, dear friend and a classmate of mine from Harvard Business School. We began those discussions the three of us. Pat, Raghu, and myself with Andy and his team and as every quarter and year has gone on they become deeper and deep partnerships. Andy has told other companies that VMware Amazon is the model partnership Amazon has, as they describe who they would like to do business more with. So we're proud when they do that, when we see that happen. And we want to continue that. So when Amazon came to us and said listen I think there's an opportunity to take some of our stack and put it on premise. We kept that confidential cause we didn't want it to leak out to the world, and we said we're going to try'n annouce it at either VMworld or re:Invent. And we were successful. A part with these projects is they inevitably leak. We're really glad no press person sniffed it out. There was a lot of speculation. >> Couldn't get confirmation. >> There was a lot of speculation but no one sniffed it out and wrote a story about it, we were able to have that iPhone moment today, I'm sorry, yesterday when we unveiled it. And it's a big deal because RDS is a fast growing business for them. RDS landing on premise, they could try to do on their own but what better infrastructure to land it on than VMware. In some cases would be VMware running on VxRail which benefits Dell, our hardware partners. And we'll continue doing more, and more, and more as customers desire, so I'm excited about it. >> Andy doesn't do deals, as you know Andy well as we do. He's customer driven. Tell me about the customer demand on this because it's something we're trying to get reporting on. Obviously it makes sense, technically the way it's working. You guys and Andy, they just don't do deals out of the blue. There's customer drivers here, what are those drivers? >> Yeah, we're both listening to our customers and perhaps three, four, five years ago they were very focused on student body left, everybody goes public cloud. Like forget your on premise, evaporate, obliterate your data centers and just go completely public. That was their message. >> True, sweep the floor. >> Right, if you went to first re:Invent I was there on stage with them as an SAP employee, that's what I heard. I think you fast forward to 2014, 2015 they're beginning to realize, hey listen it's not as easy. Refactoring your apps, migrating those apps, what if we could bring the best of private cloud and public cloud together enter VMware and Amazon. He may have felt it was harder to have those cultivations of VMware or for all kinds of reasons, like we had vCloud Air and so on and so forth but once we divested that decision culminations had matured between us that door opened. And as that door opened, more culminations began. Jointly between us and with customers. We feel that there are customers who want many of those past type of services of premise. Cause you're building great things, relational database technology, AI, VI maybe. IoT type of technologies if they are landing on premise in an edge-computing kind of world, why not land on VMware because we're the king of the private cloud. We're very happy to those, we progress those discussion. I think in infrastructure software VMware and Amazon have some of the best engineers on the planet. Sometimes we've engineers who've gone between both companies. So we were able to put our engineering team's together. This is a joint engineering effort. Andy and us often talk about the fact that great innovation's built when it's not just Barny go to Marketing and Marketing press releases this. The true joint engineering at a deep level. That's what happened the last several months. >> Well I can tell you right now the commitment I've seen from an executive level and deep technology, both sides are deep and committed to this. It's go big or go home, at least from our perspective. Question I want to ask you Sanjay is you're close to the customer's of VMware. What's the growth strategy? If you zoom out, look down on stage and you got vSAN, NSX at the core, >> vSANjay (laughs) >> How can you not like a product that has my name on it? >> So you got all these things, where's the growth going to come from, the merging side, is the v going to be the stable crown jewels at NSX? How do you guys see the growth, where's it going to come from? >> Just kind of look at our last quarter. I mean if you peel back the narrative, John and Dave, two years ago we were growing single digits. Like low single digits. Two, three percent. That was, maybe the legacy loser description of VMware was the narrative everyone was talking about >> License revenue was flattish right? >> And then now all of sudden we're double digits. 12, 15 sort of in that range for both product revenue. It's harder to grow faster when you're bigger, and what's happened is that we stabilize compute with vSphere in that part and it's actually been growing a little bit because I think people in the VMware cloud provider part of our business, and the halo effect of the cloud meant that as they refresh the servers they were buying more research. That's good. The management business has started to grow again. Some cases double digits, but at least sort of single digits. NSX, the last few order grew like 30, 40%. vSAN last year was growing 100% off a smaller base, this year going 60, 70%. EUC has been growing double digits, taking a lot of share from company's like Citrix and MobileIron and others. And now, also still growing double digits at much bigger paces, and some of those businesses are well over a billion. Compute, management, end-user computing. We talked about NSX on our queue forming called being a 1.4 billion. So when you get businesses to scale, about a billion dollar type businesses and their sort of four, training five that are in that area, and they all get to grow faster than the market. That's the key, you got to get them going fast. That's how you get growth. So we focus on those on those top five businesses and then add a few more. Like VMware Cloud on AWS, right now our goal is customer logo count. Revenue will come but we talked on our earnings call about a few hundred customers of VMware Cloud and AWS. As that gets into the thousands, and there's absolutely that option, why? Because there's 500,000 customers of VMware and two million customers of Amazon, so there's got to be a lot of commonality between those two to get a few thousand. Then we'll start caring about revenue there too, but once you have logos, you have references. Containers, I'd like to see PKS have a few hundred customers and then, we put one on stage today. National Commercial Bank of Jamaica. Fantastic story of PKS. I even got my PKS socks for this interview. (John laughs) >> So that give you a sense as to how we think, there will be four, five that our businesses had scale and then a few are starting to get there, and they become business to scale. The nature of software is we'll always be doing this show because there will be new businesses to talk about. >> Yeah, hardware is easy. Software is hard, as Andy Patchenstien said on theCUBE yesterday. Congratulations Sanjay and all the success, you guys are doing great financially. Products looking really good coming out, the bloom is rising from the fruit you guys have harvested, coming together. >> John if I can say one last thing, I shared a picture of a plane today and I put two engines behind it. There's something I've learned over the last years about focus of a company, and I joked about different ways that my name's are pronounced but at the core of me there's a DNA. I said on stage I'd rather not be known as smart or stupid but having a big heart. VMware, I hope is known by our customers as having these two engines. An engine of innovation, innovating product and a variety of other things. And focused on customer obsession. We do those, the plane will go a long way. >> And it's looking good you guys, we can say we've been to Radio Event, we've been doing a lot of great stuff. Congratulations on the initiative, and a great interview with you today on doing Tech for Good and sharing your story. Getting more exposure to the kind of narratives people want to hear. More women in tech, more girls in tech, more democratization. Congratulations and thanks so much for sharing. >> Thank you John and Dave. >> Appreciate you being here. >> Sanjay Poonen, COO of VMware. Friend of theCUBE, Cube Alumni, overall great guy. Big heart and competitive too, we know that from his Twitter stream. Follow Sanjay on Twitter. You'll have a great time. I'm John Furrier with Dave Vellante, stay with us for more coverage from day two live, here in Las Vegas for VMware 2018. Stay with us. (tech music)

(techno music) >> Narrator: Live from San Francisco, it's theCUBE covering AWS Summit 2017. Brought to you by Amazon Web Services. >> Hi, welcome back to theCUBE. We are live in San Francisco at Moscone Center at the AWS Summit. And I'm Lisa Martin, joined with my co-host Jeff Frick. We're very excited to have the chief architect and co-founder of Nextdoor, Prakash Janakiraman, on the program, welcome. >> Thank you for having me. >> For those of you who missed the keynote this morning, Prakash, you did a really fantastic keynote in the session that Werner did, and I loved how you positioned what Nextdoor is. If there's anyone out there that actually doesn't know, give us for those who didn't see the keynote just how you positioned it and talk to us about what you guys are doing, how you've achieved 70% of US neighborhoods covered, over 135,000 neighborhoods in the US. You're expanding globally. Give us in a few minutes this back story on Nextdoor. >> Yeah, so we think of Nextdoor as sitting kind of alongside Facebook, Twitter and LinkedIn. People are using Facebook to communicate with their friends and family all over the world, and Twitter to connect with people with whom they share common interests. And despite having hundreds of Facebook friends and thousands of Twitter followers, in my own neighborhood I only knew a couple of my neighbors, and it's sort of unfortunate. Your neighbors are a great resource that you should know, right, in a local context. So we feel like Nextdoor is bringing back a sense of community to the neighborhood by connecting people in the medium that we use today, which is this virtual medium, online social networking. So we kind of sit alongside of those. And as you think about the difference between what Facebook has been able to do, or an Instagram or a SnapChat, they really leverage existing connections, and when most people don't know their neighbors we have our work cut out for us, because we need to go build those connections. And once those connections are built, they're really, really valuable, right? All of a sudden you didn't know how to find the local electrician or a handyman, or how to reunite with a lost pet, or what happened with this rash of break ins in the neighborhood. Or who do you go to if there's a natural disaster that's happening in your community? How do you band together? How do you even communicate with other people? And so we think we're bringing that basic connectivity to these neighborhoods. >> What was the secret sauce? Because obviously you can't just authorize integration to my contacts, because by definition they're not in my contacts. So how did you kind of crack that code? >> There were a couple of things. So number one was we made a very deliberate decision, we'll get to why this was important, to verify each of our members as being actual residents of a neighborhood community. In our parlance, a neighborhood is really a geographically bounded region. Every single neighborhood in the Nextdoor (mumbles) is started by one member. The member draws the neighborhood boundaries, and then subsequent members-- >> Jeff: They draw the boundaries. >> They do, they do. >> They define it. >> That's right. And so every member that joins has to actually prove that they're residents of the community, and that raises trust. And all these neighborhoods have grown because of word of mouth. People go out, they tell their neighbors, "Hey, you should come on to Nextdoor. "It's a great place for us to connect. "I just heard something interesting "that happened on Nextdoor." But then we also use a variety of different mechanisms to invite people that are a little unusual for internet companies. For example, we allow our members to send out postcard invitations, because again, they don't have phone numbers, they don't have emails or electronic correspondence. So we've had to resort to some non-traditional types of marketing to get the word out about Nextdoor. >> Don't share any secrets, but what percentage of new members come through a postcard sent by a neighbor? >> Well, not isolating postcards, the vast majority of our members are coming in because of a referral from another member, of which postcards are one of those mechanisms. >> Are one piece. >> Yeah. >> With all apps and stuff there's kind of the moment, right, the CNN moment, whatever, where things kind of catch. Is there a particular type of activity in the neighborhood that is the one that kind of catalyzes people where you get that little spike? >> Well, it depends. In a lot of different cases, I remember an example from really the early days of the company, a community in Woodside, California, which is just right down the road from here, a small child in that neighborhood had developed meningitis, and meningitis if you don't know is hugely contagious. It's really bad news. And so lots and lots of members got the word out about this, and that brought new members in because they were saying, "Well, wait a minute, what do I do about meningitis? "Do we need to get immunizations? "Do we need to do something else? "Do we need to quarantine our kids?" So sometimes it's bad news like that. In other cases it's good news, it's about neighborhood events, it's about bringing people together. One of our very first neighborhoods organized a Halloween party, a Halloween parade in their neighborhood, and they used Nextdoor to organize the entire thing, and they had like 50% participation in the neighborhood. It was a small neighborhood of 90 households, but to see all the kids, and them taking pictures and publishing them on Nextdoor, it created this connectivity that just didn't exist before, so. >> And that's such great point, because we are so used to be connecting with everything, and we think we're so connected, we all have over 500 LinkedIn connections, and Twitter followers and Facebook friends, but it's very abstracted. It actually can be very isolating. So it seems like it probably was like a no brainer from an investment perspective to go, this is the, as you said in your keynote, paraphrase, this is the original social network. So talk to us about how you built that on AWS, how you've leveraged the power of AWS, the technologies, to gain what you have done so far. >> It's interesting, because prior to starting this company I was at Google, and we always felt like one of our technology advantages at Google was that we had near infinite computing resources, and that the computing resources were abstracted away from the developers so that they could just go in and build applications and not need to worry about what actually powered those applications under the hood. You said, "I needed some RAM. "I needed some disk. "I need some CPU," and boom, you're off to the races. So coming out of Google, and this is a long time ago now in 2008, seeing that AWS was just getting started with EC2 and S3, and that the playing field was leveled for developers in such a way that you no longer had to rack and stack servers, you didn't need to have a physical data center, you didn't have to have people managing that data center, and that you could use hardware as software really, you could interface with it as software, was hugely powerful. So we started out on EC2 and S3, and over time, and as we fast forward to today, we're using almost 30 different AWS services, including DynamoDB, ECS, Redshift, Kinesis, and so all of these components fit together in running our business. >> Right. Early lines, right, for AWS. It's a data center as an API is one of my favorites, just those little lines, but one of the, so security, all that stuff is kind of done talking about security for a publisher in the cloud, but one other thing that still is out there is at some point, you know, you rent, rent, rent, and at some point you pass a milestone where it's more economical to buy. Clearly you guys didn't buy. Netflix hasn't bought. There's plenty of cases, but from your point of view as a founder and a businessman, and also an operator, when you looked at that, has that ever come up in your discussion as your Amazon bills get bigger and bigger and bigger, and if so, kind of what's the internal discussion and why are you where you are today? >> So we, like a lot of startups, we really value speed and we want to focus on the things that we're really good at, and the things that we're good at are building great products. So we are so advantaged by the fact that we do not have to manage our own infrastructure, that we can use these component parts from which to build our applications, and nowhere is this more apparent than in prototyping new features, right? When you don't necessarily know if something is going to work, you don't want to go make a big investment in procuring resources for that. You want to just be able to spin something up on demand and try it out, and if it doesn't work you shut it back down. And so for us it's a TCO, total cost of ownership, type of question. And along with having on premises data centers and infrastructure comes overhead for maintenance and having teams that do that, and right now, for all of these neighborhoods that we support, 135,000 neighborhoods in the US, right, we only have two people that manage our underlying infrastructure, two dev-ops folks. >> And how many people do you have in the whole company? >> The entire company is about 150 people, and we have 60 of them in engineering, so we're a really, really, really lean team, and we're supporting massive scale with that small team because of the help of something like AWS. And this would've never been possible 10 years ago, so. >> And you'd rather spend that next marginal dollar on another developer, or marketing, or sales, or community, or something, than a piece of metal and a rack. >> We want to put that money towards making a better user experience for our users, and whether that means going into new communities, places where we aren't already, or improving engagement in communities where we already have the product, in either case that's a better dollar spent for us. >> Jeff: Right, right. >> So along those lines, how do you do that? How are you taking user feedback and determining kind of what the next steps are even within the US, but also is there, as Andy Jessie actually talked about in his fireside chat, the GOs that they're expending, they're in 16 now, is there maybe a model to kind of follow along where AWS has a footprint? I'd love to know what that customer engagement is to help really refine that user experience. >> Yeah, there's a few different ways that we can get customer feedback. One is sort of implicit. So we have lots of data that we collect and look at and trying to understand like what features are really popular, what features are taking off, what features aren't really as popular as others, and we do a lot of A/B and split testing to understand how these features perform. But the other way is just good old fashioned qualitative feedback from our users. So we have a couple of different ways that we do that. One, we have a neighborhood operations team that's always in contact with our communities. We have leads in our communities that serve as sort of moderators and the folks that manage the community's activity, and so we lean on them heavily for feedback. And then we have a national leads forum where they all come together and they exchange their own experiences building their community. And from that, it's a treasure trove of information where we communicate with them, we participate in those forums, and then we build the features that we think that they want. >> It's funny, this theme of competing for speed, you're competing against time has come up a number of times today, in Werner's keynote, you mentioned it, it came up again in Andy's fireside chat. I thought it was interesting in your keynote piece how the measure of speed and deployment has so radically changed. It used to be one push a day was crazy. And you talked about a concept of democratization of deployment, which I thought was interesting. Because in the big data world we're always talking about democratizing big data, get it out of the hands of data scientists, let everybody make better decisions based on data, but you talked about democratization of deployments which I've never heard before. Wondering if you could share that story, because again, one a day, that's no longer the measure of success. >> No. So the way that we think about this and the reason that I call it democratization of deployment is as you invest more in automation and you turn down the kind of batching of releases together, the batches of commits together, you can now isolate their impact, and you can move faster by doing more frequent, smaller releases. And part of that is each developer is responsible for their own code going out to production. So what we've invested in is a lot of automation that makes it possible for any one of our developers to push a button, a metaphorical button, and actually push code out to the site, observe how that code performs, and then we can move onto the next one. So in the old world people would often hire a release engineer, and the release engineer's job was really to coordinate all of the activities of the developers, build packages, get them staged and ready for QA, and the overhead on that just does not scale well as a company gets bigger and bigger. And so what we've said is, "Listen developers, "you guys are responsible. "You guys know how your code works. "Let's make it possible for you "to minimize the amount of time "between you committing a piece of code "and that code being live to our users." And so that's what I kind of was talking about in terms of democratization of the release process, making sure that everyone can do it. >> What I thought just was fascinating is on one end everybody is talking about smaller, marginal units of compute and store, etc., right, and yet on the other hand you were basically doing, basically duplicating your entire production environment in kind of this red black strategy, build it up, make that one go, crash the other one. Build up a fresh one, make that one go, crash the old one, and leveraging what are basically infinite resources behind the AWS screen in a really innovative way that you could never do that with your own hardware. >> Well, a lot of credit goes to Netflix. We saw a presentation that they did a few years ago at Reinvent that inspired us to build our own kind of version of the red black deployment system. But again, because these resources are ephemeral, you can spin them up and shut them down, that's what makes any of that possible. So it's really, really awesome for us, because we're moving fast. In fact, I don't even know how many deploys we've done today, but every time a deploy is done we get a message in a Slack channel that says, "Hey, somebody pushed." And it says who the conductor of the train that actually pushed out the commit is, and so you have full accountability in this like living log of what's going on in your production environment, and anyone can do it. Even our interns are allowed to do it, and so it's really, really empowering for our developers to be able to do that. >> I was going to say, that was the word that I heard when you were talking earlier. It's really this empowerment, which is huge for productivity. And speaking of productivity, you guys have really achieved some pretty significant technology achievements that are presumably in this feedback circle going back and making the experience for your mother in law, your mom, probably my mom, even better. What are some of those technology achievements? You mentioned a few of them on the keynote. I'd love for our guests to hear some of those big things that you've achieved. >> Yeah, I think when we think about the technology stack there are two things that we're trying to do. Number one is build for our developers so that they can push features out faster, but then the second and the most important is that we improve the user experience for our users. And most recently, we've done a few different things. Number one is we've introduced this concept around personalization, and it's very lightweight at this point where we can try and understand, what is your experience? If you're not a parent, do you really care about play dates and all of the information about kids? If you don't have a pet, do you care about what's going on with pets? Do you not like the classified ads? And so we're starting to look at data, this is where the big data stack becomes very interesting, and say, "Okay, let's see if we can "match the content in your neighborhood "to the things that you're interested in," and sort of making a lot of investments in that area. And then the second is we're making a lot of investments in search, because we think a lot of people will come to Nextdoor with an intent in mind. They'll say, "Hey, you know what? "I need to find a handyman or a plumber." And what's the natural way to do that is to go into a search box and say, "Handyman," right, and look for handymen in your local community. And so we're making a lot of investments on both fronts that will make it easier for our users to get connected to the information that's most important to them. >> That personalization is so key because we sort of, as consumers and as people who expect things immediately, we want what we want, we want what's relevant. And we know a lot of companies, whether they're banks or whatnot, retailers, spend a tremendous amount of time and dollars investing to know how do I make this experience unique to Jeff, or unique to Prakash, or unique to Lisa. And so I think that there's so much capabilities. I have to ask you though, you must have the most connected neighborhood. You must have the best block parties. (laughing) >> Me personally? >> Yeah. >> You know, it's interesting. The product takes on the identity of each of our communities. And so in an urban community like in San Francisco I'll say that I still don't know all of my neighbors, but it's really, really comforting to know that I know by name and by face who they are even if I haven't had in person interactions. But one of the things that we always talk about, which is pretty cool, and it's happened to me in my own community, is we talk about this concept of bits that move atoms, and using our platform, which is really exchanging information electronically, to facilitate in person interactions, and those are the atoms. And it's definitely happened to me where I've seen someone on the street and I just say, "Hello," right, because I'm like, "Oh yeah, I saw your post. "Did you get your dog back? "Were you able to sell that television?" And so it's really interesting that this is actually happening, and ultimately that's our goal is to bring back that sense of community to neighborhoods and to make neighborhoods stronger and safer, and the way you do that is by connecting people in the community. >> Right, right. >> Absolutely. >> It's a neighborhood watch on steroids kind of, right? >> Totally, yeah. >> Yeah. >> It's fantastic. And I'm sure they would be blown away if they knew they were talking to the guy behind Nextdoor. >> Prakash: One of them. >> One of them. >> One of them. >> Well Prakash, thank you so much for sharing your story with us on theCUBE. >> Thank you very much for having me. >> It's so exciting to get back to the original social network and really kind of, I love that. I think people might even be learning how to write again rather than type. >> My handwriting is terrible. >> We can only hope. >> Reaching, you're reaching there. >> Well Prakash, thank you so much. Continued success with Nextdoor. >> Thank you very much. >> We so much appreciate your time here. >> For my co-host Jeff Frick, I'm Lisa Martin. You've been watching theCUBE. Don't go anywhere. We'll be right back. (techno music)