>>Good afternoon, everyone. And welcome back to the VMware Explorer. 2022 live from San Francisco. Lisa Martin, here with Dave. Valante good to be sitting next to you, sir. >>Yeah. Yeah. The big set >>And we're very excited to be welcoming buck. One of our esteemed alumni Sanja poin joins us, the CEO and president of cohesive. Nice to see >>You. Thank you, Lisa. Thank you, Dave. It's great to meet with you all the time and the new sort of setting here, but first >>Time, first time we've been in west, is that right? We've been in north. We've been in south. We've been in Las Vegas, right. But west, >>I mean, it's also good to be back with live shows with absolutely, you know, after sort of the two or three or hiatus. And it was a hard time for the whole world, but I'm kind of driving a little bit of adrenaline just being here with people. So >>You've also got some adrenaline, sorry, Dave. Yeah, you're good because you are new in the role at cohesive. You wrote a great blog that you are identified. The four reasons I came to cohesive. Tell the audience, just give 'em a little bit of a teaser about that. >>Yeah, I think you should all read it. You can Google and, and Google find that article. I talked about the people Mohi is a fantastic founder. You know, he was the, you know, the architect of the Google file system. And you know, one of the senior Google executives was on my board. Bill Corrin said one of the smartest engineers. He was the true father of hyperconverge infrastructure. A lot of the code of Nutanix. He wrote, I consider him really the father of that technology, which brought computer storage. And when he took that same idea of bringing compute to secondary storage, which is really what made the scale out architect unique. And we were at your super cloud event talking about that, Dave. Yeah. Right. So it's a people I really got to respect his smarts, his integrity and the genius, what he is done. I think the customer base, I called a couple of customers. One of them, a fortune 100 customer. I, I can't tell you who it was, but a very important customer. I've known him. He said, I haven't seen tech like this since VMware, 20 years ago, Amazon 10 years ago and now Ko. So that's special league. We're winning very much in the enterprise and that type of segment, the partners, you know, we have HPE, Cisco as investors. Amazon's an investors. So, you know, and then finally the opportunity, I think this whole area of data management and data security now with threats, like ransomware big opportunity. >>Okay. So when you were number two at VMware, you would come on and say, we'd love all our partners and of course, okay. So you know, a little bit about how to work with, with VMware. So, so when you now think about the partnership between cohesive and VMware, what are the things that you're gonna stress to your constituents on the VMware side to convince them that Hey, partnering with cohesive is gonna gonna drive more value for customers, you know, put your thumb on the scale a little bit. You know, you gotta, you gotta unfair advantage somewhat, but you should use it. So what's the narrative gonna be like? >>Yeah, I think listen with VMware and Amazon, that probably their top two partners, Dave, you know, like one of the first calls I made was to Raghu and he knew about this decision before. That's the level of trust I have in him. I even called Michael Dell, you know, before I made the decision, there's a little bit of overlap with Dell, but it's really small compared to the overlap, the potential with Dell hardware that we could compliment. And then I called four CEOs. I was, as I was making this decision, Andy Jassey at Amazon, he was formerly AWS CEO sat Nadela at Microsoft Thomas cor at Google and Arvin Christian, IBM to say, I'm thinking about this making decision. They are many of the mentors and friends to me. So I believe in an ecosystem. And you know, even Chuck Robbins, who the CEO of Cisco is an investor, I texted him and said, Hey, finally, we can be friends. >>It was harder to us to be friends with Cisco, given the overlap of NSX. So I have a big tent towards everybody in our ecosystem with VMware. I think the simple answer is there's no overlap okay. With, with the kind of the primary storage capabilities with VSAN. And by the same thing with Nutanix, we will be friends and, and extend that to be the best data protection solution. But given also what we could do with security, I think this is gonna go a lot further. And then it's all about meet the field. We have common partners. I think, you know, sort of the narrative I talked about in that blog is just like snowflake was replacing Terada and ServiceNow replace remedy and CrowdStrike, replacing Symantec, we're replacing legacy vendors. We are viewed as the modern solution cloud optimized for private and public cloud. We can help you and make VMware and vs a and VCF very relevant to that part of the data management and data security continuum, which I think could end VMware. And by the way, the same thing into the public cloud. So most of the places where we're being successful is clearly withs, but increasingly there's this discussion also about playing into the cloud. So I think both with VMware and Amazon, and of course the other partners in the hyperscaler service, storage, networking place and security, we have some big plans. >>How, how much do you see this? How do you see this multi-cloud narrative that we're hearing here from, from VMware evolving? How much of an opportunity is it? How are customers, you know, we heard about cloud chaos yesterday at the keynote, are customers, do they, do they admit that there's cloud chaos? Some probably do some probably don't how much of an opportunity is that for cohesive, >>It's tremendous opportunity. And I think that's why you need a Switzerland type player in this space to be successful. And you know, and you can't explicitly rule out the fact that the big guys get into this space, but I think it's, if you're gonna back up office 365 or what they call now, Microsoft 365 into AWS or Google workspace into Azure or Salesforce into one of those clouds, you need a Switzerland player. It's gonna be hard. And in many cases, if you're gonna back up data or you protect that data into AWS banks need a second copy of that either on premise or Azure. So it's very hard, even if they have their own native data protection for them to be dual cloud. So I think a multi-cloud story and the fact that there's at least three big vendors of cloud in, in the us, you know, one in China, if include Alibaba creates a Switzerland opportunity for us, that could be fairly big. >>And I think, you know, what we have to do is make sure while we'll be optimized, our preferred cloud is AWS. Our control plane runs there. We can't take an all in AWS stack with the control plane and the data planes at AWS to Walmart. So what I've explained to both Microsoft and AWS is that data plane will need to be multi-cloud. So I can go to an, a Walmart and say, I can back up your data into Azure if you choose to, but the control plane's still gonna be an AWS, same thing with Google. Maybe they have another account. That's very Google centric. So that's how we're gonna believe the, the control plane will be in AWS. We'll optimize it there, but the data plane will be multicloud. >>Yeah. And that's what Mo had explained at Supercloud. You know, and I talked to him, he really helped me hone in on the deployment models. Yes. Where, where, where the cohesive deployment model is instantiating that technology stack into each cloud region and each cloud, which gives you latency advantages and other advantages >>And single code based same platform. >>And then bringing it, tying it together with a unified, you know, interface. That was he, he was, he was key. In fact, I, I wrote about it recently and, and gave him and the other 29 >>Quite a bit in that session, he went deep with you. I >>Mean, with Mohi, when you get a guy who developed a Google file system, you know, who can technically say, okay, this is technically correct or no, Dave, your way off be. So I that's why I had to >>Go. I, I thought you did a great job in that interview because you probed him pretty deep. And I'm glad we could do that together with him next time. Well, maybe do that together here too, but it was really helpful. He's the, he's the, he's the key reason I'm here. >>So you say data management is ripe for disrupt disruption. Talk about that. You talked about this Switzerland effect. That sounds to me like a massive differentiator for cohesive. Why is data management right for disruption and why is cohesive the right partner to do it? >>Yeah, I think, listen, everyone in this sort of data protection backup from years ago have been saying the S Switzerland argument 18 years ago, I was a at Veras an executive there. We used the Switzerland argument, but what's changed is the cloud. And what's changed as a threat vector in security. That's, what's changed. And in that the proposition of a, a Switzerland player has just become more magnified because you didn't have a sales force or Workday service now then, but now you do, you didn't have multi-cloud. You had hardware vendors, you know, Dell, HPE sun at the time. IBM, it's now Lenovo. So that heterogeneity of, of on-premise service, storage, networking, HyperCloud, and, and the apps world has gotten more and more diverse. And I think you really need scale out architectures. Every one of the legacy players were not built with scale out architectures. >>If you take that fundamental notion of bringing compute to storage, you could almost paralyze. Imagine you could paralyze backup recovery and bring so much scale and speed that, and that's what Mo invented. So he took that idea of how he had invented and built Nutanix and applied that to secondary storage. So now everything gets faster and cheaper at scale. And that's a disruptive technology ally. What snowflake did to ator? I mean, the advantage of snowflake is when you took that same concept data, warehousing is not a new concept it's existed from since Ralph Kimball and bill Inman and the people who are fathers of data warehousing, they took that to Webscale. And in that came a disruptive force toter data, right on snowflake. And then of course now data bricks and big query, similar things. So we're doing the same thing. We just have to showcase the customers, which we do. And when large customers see that they're replacing the legacy solutions, I have a lot of respect for legacy solutions, but at some point in time of a solution was invented in 1995 or 2000, 2005. It's right. For change. >>So you use snowflake as an example, Frank SL doesn't like when I say playbook, cuz I says, Dave, I'm a situational CEO, no playbook, but there are patterns here. And one of the things he did is to your point go after, you know, Terra data with a better data warehouse, simplify scale, et cetera. And now he's, he's a constructing a Tam expansion strategy, same way he did at ServiceNow. And I see you guys following a similar pattern. Okay. You get your foot in the door. Let's face it. I mean, a lot of this started with, you know, just straight back. Okay, great. Now it's extending into data management now extending to multi-cloud that's like concentric circles in a Tam expansion strategy. How, how do you, as, as a CEO, that's part of your job is Tam expansion. >>So yeah, I think the way to think about the Tam is, I mean, people say it's 20, 30 billion, but let me tell you how you can piece it apart in size, Dave and Lisa number one, I estimate there's probably about 10 to 20 exabytes of data managed by these legacy players of on-prem stores that they back up to. Okay. So you add them all up in the market shares that they respectively are. And by the way, at the peak, the biggest of these companies got to 2 billion and then shrunk. That was Verto when I was there in 2004, 2 billion, every one of them is small and they stopped growing. You look at the IDC charts. Many of them are shrinking. We are the fastest growing in the last two years, but I estimate there's about 20 exabytes of data that collectively among the legacy players, that's either gonna stay on prem or move to the cloud. Okay. So the opportunity as they replace one of those legacy tools with us is first off to manage that 20 X by cheaper, faster with the Webscale glass offer the cloud guys, we could tip that into the cloud. Okay. >>But you can't stop there. >>Okay. No, we are not doing just backup recovery. We have a platform that can do files. We can do test dev analytics and now security. Okay. That data is potentially at a risk, not so much in the past, but for ransomware, right? How do we classify that? How do we govern that data? How do we run potential? You know, the same way you did antivirus some kind of XDR algorithms on the data to potentially not just catch the recovery process, which is after fact, but maybe the predictive act of before to know, Hey, there's somebody loitering around this data. So if I'm basically managing in the exabytes of data and I can proactively tell you what, this is, one CIO described this very simply to me a few weeks ago that I, and she said, I have 3000 applications, okay. I wanna be prepared for a black Swan event, except it's not a nine 11 planes getting the, the buildings. >>It is an extortion event. And I want to know when that happens, which of my 3000 apps I recover within one hour within one day within one week, no later than one month. Okay. And I don't wanna pay the bad guys at penny. That's what we do. So that's security discussions. We didn't have that discussion in 2004 when I was at another company, because we were talking about flood floods and earthquakes as a disaster recovery. Now you have a lot more security opportunity to be able to describe that. And that's a boardroom discussion. She needs to have that >>Digital risk. O O okay, go ahead please. I >>Was just gonna say, ransomware attack happens every what? One, every 11, 9, 11 seconds. >>And the dollar amount are going up, you know, dollar are going up. Yep. >>And, and when you pay the ransom, you don't always get your data back. So you that's not. >>And listen, there's always an ethical component. Should you do it or not do it? If you, if you don't do it and you're threatened, they may have left an Easter egg there. Listen, I, I feel very fortunate that I've been doing a lot in security, right? I mean, I built the business at, at, at VMware. We got it to over a billion I'm on the board of sneak. I've been doing security and then at SAP ran. So I know a lot about security. So what we do in security and the ecosystem that supports us in security, we will have a very carefully crafted stay tuned. Next three weeks months, you'll see us really rolling out a very kind of disciplined aspect, but we're not gonna pivot this company and become a cyber security company. Some others in our space have done that. I think that's not who we are. We are a data management and a data security company. We're not just a pure security company. We're doing both. And we do it well, intelligently, thoughtfully security is gonna be built into our platform, not voted on. Okay. And there'll be certain security things that we do organically. There's gonna be a lot that we do through partnerships, this >>Security market that's coming to you. You don't have to go claim that you're now a security vendor, right? The market very naturally saying, wow, a comprehensive security strategy has to incorporate a data protection strategy and a recovery, you know, and the things that we've talking about Mount ransomware, I want to ask you, you I've been around a long time, longer than you actually Sanjay. So, but you you've, you've seen a lot. You look, >>Thank you. That's all good. Oh, >>Shucks. So the market, I've never seen a market like this, right? I okay. After the.com crash, we said, and I know you can't talk about IPO. That's not what I'm talking about, but everything was bad after that. Right. 2008, 2000, everything was bad. I've never seen a market. That's half full, half empty, you know, snowflake beats and raises the stock, goes through the roof. Dev if it, if the area announced today, Mongo, DB, beat and Ray, that things getting crushed and, and after market never seen anything like this. It's so fed, driven and, and hard to protect. And, and of course, I know it's a marathon, you know, it's not a sprint, but have you ever seen anything like this? >>Listen, I walk worked through 18 quarters as COO of VMware. You've seen where I've seen public quarters there and you know, was very fortunate. Thanks to the team. I don't think I missed my numbers in 18 quarters except maybe once close. But we, it was, it's tough. Being a public company of the company is tough. I did that also at SAP. So the journey from 10 to 20 billion at SAP, the journey from six to 12 at VMware, that I was able to be fortunate. It's humbling because you, you really, you know, we used to have this, we do the earnings call and then we kind of ask ourselves, what, what do you think the stock price was gonna be a day and a half later? And we'd all take bets as to where this, I think you just basically, as a, as a sea level executive, you try to build a culture of beaten, raise, beaten, raise, beaten, raise, and you wanna set expectations in a way that you're not setting them up for failure. >>And you know, it's you, there's, Dave's a wonderful CEO as is Frank Salman. So it's hard for me to dissect. And sometimes the market are fickle on some small piece of it. But I think also the, when I, I encourage people say, take the long term view. When you take the long term view, you're not bothered about the ups and downs. If you're building a great company over the length of time, now it will be very clear over the arc of many, many quarters that you're business is trouble. If you're starting to see a decay in growth. And like, for example, when you start to see a growth, start to decay significantly by five, 10 percentage points, okay, there's something macro going on at this company. And that's what you won't avoid. But these, you know, ups and downs, my view is like, if you've got both Mongo D and snowflake are fantastic companies, they're CEOs of people I respect. They've actually kind of an, a, you know, advisor to us as a company, you knows moat very well. So we respect him, respect Frank, and you, there have been other quarters where Frank's, you know, the Snowflake's had a down result after that. So you build a long term and they are on the right side of history, snowflake, and both of them in terms of being a modern cloud relevant in the case of MongoDB, open source, two data technology, that's, you know, winning, I, I, we would like to be like them one day >>As, as the new CEO of cohesive, what are you most ask? What are you most anxious about and what are you most excited about? >>I think, listen, you know, you know, everything starts with the employee. You, I always believe I wrote my first memo to all employees. There was an article in Harvard business review called service profit chains that had a seminal impact on my leadership, which is when they studied companies who had been consistently profitable over a long period of time. They found that not just did those companies serve their customers well, but behind happy engaged customers were happy, engaged employees. So I always believe you start with the employee and you ensure that they're engaged, not just recruiting new employees. You know, I put on a tweet today, we're hiring reps and engineers. That's okay. But retaining. So I wanna start with ensuring that everybody, sometimes we have to make some unfortunate decisions with employees. We've, we've got a part company with, but if we can keep the best and brightest retained first, then of course, you know, recruiting machine, I'm trying to recruit the best and brightest to this company, people all over the place. >>I want to get them here. It's been, so I mean, heartwarming to come Tom world and just see people from all walks, kind of giving me hugs. I feel incredibly blessed. And then, you know, after employees, it's customers and partners, I feel like the tech is in really good hands. I don't have to worry about that. Cuz Mo it's in charge. He's got this thing. I can go to bed knowing that he's gonna keep innovating the future. Maybe in some of the companies I've worried about the tech innovation piece, but most doing a great job there. I can kind of leave that in his cap of hands, but employees, customers, partners, that's kind of what I'm focused on. None of them are for me, like a keep up at night, but there are are opportunities, right? And sometimes there's somebody you're trying to salvage to make sure or somebody you're trying to convince to join. >>But you know, customers, I love pursuing customers. I love the win. I hate to lose. So fortune 1000 global, 2000 companies, small companies, big companies, I wanna win every one of them. And it's not, it's not like, I mean, I know all these CEOs in my competitors. I texted him the day I joined and said, listen, I'll compete, honorably, whatever have you, but it's like Kobe and LeBron Kobe's passed away now. So maybe it's Steph Curry. LeBron, whoever your favorite athlete is you put your best on the court and you win. And that's how I am. That's nothing I've known no other gear than to put my best on the court and win, but do it honorably. It should not be the one that you're doing it. Unethically. You're doing it personally. You're not calling people's names. You're competing honorably. And when you win the team celebrates, it's not a victory for me. It's a victory for the team. >>I always think I'm glad that you brought up the employee experience and we're almost out of time, but I always think the employee experience and the customer experience are inextricably linked. This employees have to be empowered. They have to have the data that they need to do their job so that they can deliver to the customer. You can't do one without the other. >>That's so true. I mean, I, it's my belief. And I've talked also on this show and others about servant leadership. You know, one of my favorite poems is Brenda Naor. I went to bed in life. I dreamt that life was joy. I woke up and realized life was service. I acted in service was joy. So when you have a leadership model, which is it's about, I mean, there's lots of layers between me and the individual contributor, but I really care about that sales rep and the engineer. That's the leaf level of the organization. What can I get obstacle outta their way? I love skipping levels of going right. That sales rep let's go and crack this deal. You know? So you have that mindset. Yeah. I mean, you, you empower, you invert the pyramid and you realize the power is at the leaf level of an organization. >>So that's what I'm trying to do. It's a little easier to do it with 2000 people than I dunno, either 20, 20, 2000 people or 35,000 reported me at VMware. And I mean a similar number at SAP, which was even bigger, but you can shape this. Now we are, we're not a startup anymore. We're a midsize company. We'll see. Maybe along the way, there's an IP on the path. We'll wait for that. When it comes, it's a milestone. It's not the destination. So we do that and we are, we, I told people we are gonna build this green company. Cohesive is gonna be a great company like VMware one day, like Amazon. And there's always a day of early beginnings, but we have to work harder. This is kind of like the, you know, eight year old version of your kid, as opposed to the 18 year old version of the kid. And you gotta work a little harder. So I love it. Yeah. >>Good luck. Awesome. Thank you. Best of luck. Congratulations. On the role, it sounds like there's a tremendous amount of adrenaline, a momentum carrying you forward Sanjay. We always appreciate having you. Thank >>You for having in your show. >>Thank you. Our pleasure, Lisa. Thank you for Sanja poin and Dave ante. I'm Lisa Martin. You're watching the cube live from VMware Explorer, 2022, stick around our next guest. Join us momentarily.

>>Good afternoon, everyone. And welcome back to the Cube's day two coverage of VMware Explorer, 2022 live from San Francisco. Lisa Martin, here with Dave. Valante good to be sitting next to you, sir. >>Yeah, the big >>Set and we're very excited to be welcoming back. One of our esteemed alumni Sanja poin joins us, the CEO and president of cohesive. Nice to see >>You. Thank you, Lisa. Thank you, Dave. It's great to meet with you all the time and the new sort of setting here, but >>First time we've been in west, is that right? We've been in north. We've been in south. We've been in Las Vegas, right. But west >>Nice. Well, I mean, it's also good to be back with live shows with absolutely, you know, after sort of the two or three or high. And it was a hard time for the whole world, but I'm kind of driving a little bit of adrenaline just being here with people. So >>You've also got some adrenaline, sorry, Dave. Yeah, you're good because you are new in the role at cohesive. You wrote a great blog that you are identified. The four reasons I came to cohesive. Tell the audience, just give 'em a little bit of a teaser about that. >>Yeah, I think you should all read it. You can Google and, and Google find that article. I talked about the people Mohi is a fantastic founder. You know, he was the, you know, the architect of the Google file system. And you know, one of the senior Google executives who was on my board, bill Corrin said one of the smartest engineers. He was the true father of hyperconverge infrastructure. A lot of the code of Nutanix. He wrote, I consider him really the father of that technology, which brought computer storage. And when he took that same idea of bringing compute to secondary storage, which is really what made the scale out architect unique. And we were at your super cloud event talking about that, Dave. Yeah. Right. So it's a people I really got to respect his smarts, his integrity and the genius, what he is done. >>I think the customer base, I called a couple of customers. One of them, a fortune 100 customer. I, I can't tell you who it was, but a very important customer. I've known him. He said, I haven't seen tech like this since VMware, 20 years ago, Amazon 10 years ago. And now COER so that's special league. We're winning very much in the enterprise and that type of segment, the partners, you know, we have HPE, Cisco as investors, Amazon's an investors. So, you know, and then finally the opportunity, I think this whole area of data management and data security now with threats, like ransomware big opportunity. >>Sure. Okay. So when you were number two at VMware, you would come on and say, we'd love all our partners and of course, okay. So you know, a little bit about how to work with, with VMware. So, so when you now think about the partnership between cohesive and VMware, what are the things that you're gonna stress to your constituents on the VMware side to convince them that Hey, partnering with cohesive is gonna gonna drive more value for customers, you know, put your thumb on the scale a little bit. You know, you gotta, you gotta unfair advantage somewhat, but you should use it. So what's the narrative gonna be like? >>Yeah. I think listen with VMware and Amazon, that probably their top two partners, Dave, you know, like one of the first calls I made was to Raghu and he knew about this decision before. That's the level of trust I have in him. I even called Michael Dell, you know, before I made the decision, there's a little bit of an overlap with Dell, but it's really small compared to the overlap, the potential with Dell hardware that we could compliment. And then I called four CEOs. I was, as I was making this decision, Andy Jassy at Amazon, he was formerly AWS CEO sat Nadela at Microsoft Thomas cor at Google and Arvin Christian at IBM to say, I'm thinking about this making decision. They are many of the mentors and friends to me. So I believe in an ecosystem. And you know, even Chuck Robbins, who the CEO of Cisco is an investor, I texted him and said, Hey, finally, we can be friends. >>It was harder to us to be friends with Cisco, given the overlap of NEX. So I have a big tent towards everybody in our ecosystem with VMware. I think the simple answer is there's no overlap okay. With, with the kind of the primary storage capabilities with VSAN. And by the same thing with Nutanix, we will be friends and, and extend that to be the best data protection solution. But given also what we could do with security, I think this is gonna go a lot further. And then it's all about meet in the field. We have common partners. I think, you know, sort of the narrative I talked about in that blog is just like snowflake was replacing Terada and ServiceNow replace remedy and CrowdStrike, replacing Symantec, we're replacing legacy vendors. We are viewed as the modern solution cloud optimized for private and public cloud. We can help you and make VMware and VSAN and VCF very relevant to that part of the data management and data security continuum, which I think could enhance VMware. And by the way, the same thing into the public cloud. So most of the places where we're being successful is clearly withs, but increasingly there's this discussion also about playing into the cloud. So I think both with VMware and Amazon, and of course the other partners in the hyperscaler service, storage, networking place and security, we have some big plans. >>How, how much do you see this? How do you see this multi-cloud narrative that we're hearing here from, from VMware evolving? How much of an opportunity is it? How are customers, you know, we heard about cloud chaos yesterday at the keynote, are customers, do they, do they admit that there's cloud chaos? Some probably do some probably don't how much of an opportunity is that for cohesive, >>It's tremendous opportunity. And I think that's why you need a Switzerland type player in this space to be successful. And you know, and you can't explicitly rule out the fact that the big guys get into this space, but I think it's, if you're gonna back up office 365 or what they call now, Microsoft 365 into AWS or Google workspace into Azure or Salesforce into one of those clouds, you need a Switzerland player it's gonna be out. And in many cases, if you're gonna back up data or you protect that data into AWS banks need a second copy of that either on premise or Azure. So it's very hard, even if they have their own native data protection for them to be dual cloud. So I think a multi-cloud story and the fact that there's at least three big vendors of cloud in, in the us, you know, one in China, if include Alibaba creates a Switzerland opportunity for us, that could be fairly big. >>And I think, you know, what we have to do is make sure while we'll be optimized, our preferred cloud is AWS. Our control plane runs there. We can't take an all in AWS stack with the control plane and the data planes at AWS to Walmart. So what I've explained to both Microsoft and AWS is that data plane will need to be multicloud. So I can go to an a Walmart and say, I can back up your data into Azure if you choose to, but the control, plane's still gonna be an AWS, same thing with Google. Maybe they have another account. That's very Google centric. So that's how we're gonna play the, the control plane will be in AWS. We'll optimize it there, but the data plane will be multi-cloud. >>Yeah. And that's what Mo had explained at Supercloud. You know, and I talked to, he really helped me hone in on the deployment models. Yes. Where, where, where the cohesive deployment model is instantiating that technology stack into each cloud region and each cloud, which gives you latency advantages and other advantages >>And single code based same platform, >>And then bringing it, tying it together with a unified, you know, interface. That was he, he was, he was key. In fact, I, I wrote about it recently and, and gave him and the other 20, >>Quite a bit in that session. Yeah. So he went deep with you. I >>Mean, with Mohi, when you get a guy who developed a Google file system, you know, who can technically say, okay, this is technically correct or no, Dave, your way off be so I that's why I had to >>Go. I, I thought you did a great job in that interview because you probed him pretty deep and I'm glad we could do that together with him next time. Well, maybe do that together here too, but it was really helpful. He's the, he's the, he's the key reason I'm here. >>So you say data management is ripe for disrupt disruption. Talk about that. You talked about this Switzerland effect. That sounds to me like a massive differentiator for cohesive. Why is data management right. For disruption and why is cohesive the right partner to do it? >>Yeah, I think, listen, everyone in this sort of data protection backup from years ago have been saying the S Switzerland argument 18 years ago, I was a at Veras an executive there. We used the Switzerland argument, but what's changed is the cloud. And what's changed as a threat vector in security. That's, what's changed. And in that the proposition of a, a Switzerland player has just become more magnified because you didn't have a sales force or Workday service now then, but now you do, you didn't have multi-cloud. You had hardware vendors, you know, Dell, HPE sun at the time. IBM, it's now Lenovo. So that heterogeneity of, of on-premise service, storage, networking, HyperCloud, and, and the apps world has gotten more and more diverse. And I think you really need scale out architectures. Every one of the legacy players were not built with scale out architectures. >>If you take that fundamental notion of bringing compute to storage, you could almost paralyze. Imagine you could paralyze backup recovery and bring so much scale and speed that, and that's what Mo invented. So he took that idea of how he had invented and built Nutanix and applied that to secondary storage. So now everything gets faster and cheaper at scale. And that's a disruptive technology ally. What snowflake did to ator? I mean, the advantage of snowflake is when you took that same concept data, warehousing is not a new concept it's existed from since Ralph Kimble and bill Inman and the people who are fathers of data warehousing, they took that to Webscale. And in that came a disruptive force toter data, right? And snowflake. And then of course now data bricks and big query, similar things. So we're doing the same thing. We just have to showcase the customers, which we do. And when large customers see that they're replacing the legacy solutions, I have a lot of respect for legacy solutions, but at some point in time of a solution was invented in 1995 or 2000, 2005. It's right. For change. >>So you use snowflake as an example, Frank sluman doesn't like when I say playbook, cuz I says, Dave, I'm a situational. See you no playbook, but there are patterns here. And one of the things he did is to your point go after, you know, Terra data with a better data warehouse, simplify scale, et cetera. And now he's, he's a constructing a Tam expansion strategy, same way he did at ServiceNow. And I, you guys following a similar pattern. Okay. You get your foot in the door. Let's face it. I mean, a lot of this started with, you know, just straight back. Okay, great. Now it's extending into data management now extending to multi-cloud that's like concentric circles in a Tam expansion strategy. How, how do as, as a CEO, that's part of your job is Tam expansion. >>So yeah, I think the way to think about the Tam is, I mean, people say it's 20, 30 billion, but let me tell you how you can piece it apart in size, Dave and Lisa number one, I estimate there's probably about 10 to 20 exabytes of data managed by these legacy players of on-prem stores that they back up to. Okay. So you add them all up in the market shares that they respectively are. And by the way, at the peak, the biggest of these companies got to 2 billion and then shrunk. That was Verto when I was there in 2004, 2 billion, every one of them is small and they stopped growing. You look at the IDC charts. Many of them are shrinking. We are the fastest growing in the last two years, but I estimate there's about 20 exabytes of data that collectively among the legacy players, that's either gonna stay on prem or move to the cloud. Okay. So the opportunity as they replace one of those legacy tools with us is first off to manage that 20 X bike cheaper, faster with the Webscale, a glass or for the cloud guys, we could tip that into the cloud. Okay. >>But you can't stop there. >>Okay. No, we are not doing just back recovery. Right. We have a platform that can do files. We can do test dev analytics and now security. Okay. That data is potentially at a risk, not so much in the past, but for ransomware, right? How do we classify that? How do we govern that data? How do we run potential? You know, the same way you did antivirus some kind of XDR algorithms on the data to potentially not just catch the recovery process, which is after fact, but maybe the predictive act of before to know, Hey, there's somebody loitering around this data. So if I'm basically managing in the exabytes of data and I can proactively tell you what, this is, one CIO described this very simply to me a few weeks ago that I, and she said, I have 3000 applications, okay. I wanna be prepared for a black Swan event, except it's not a nine 11 planes hitting the, the buildings. >>It is an extortion event. And I want to know when that happens, which of my 3000 apps I recover within one hour within one day within one week, no lay than one month. Okay. And I don't wanna pay the bad guys of penny. That's what we do. So that's security discussions. We didn't have that discussion in 2004 when I was at another company, because we were talking about flood floods and earthquakes as a disaster recovery. Now you have a lot more security opportunity to be able to describe that. And that's a boardroom discussion. She needs to have that >>Digital risk. O O okay, go ahead please. I >>Was just gonna say, ransomware attack happens every what? One, every 11, 9, 11 seconds. >>And the dollar amount are going up, you know, dollar of what? >>Yep. And, and when you pay the ransom, you don't always get your data back. So you that's >>Not. And listen, there's always an ethical component. Should you do it or not do it? If you, if you don't do it and you're threatened, they may have left an Easter egg there. Listen, I, I feel very fortunate that I've been doing a lot in security, right? I mean, I built the business at, at, at VMware. We got it to over a billion I'm on the board of sneak. I've been doing security and then at SAP ran. So I know a lot about security. So what we do in security and the ecosystem that supports us in security, we will have a very carefully crafted stay tuned. Next three weeks months, you'll see us really rolling out a very kind of disciplined aspect, but we're not gonna pivot this company and become a cyber security company. Some others in our space have done that. I think that's not who we are. We are a data management and a data security company. We're not just a pure security company. We're doing both. And we do it well, intelligently, thoughtfully security is gonna be built into our platform, not bolted on, okay. And there'll be certain security things that we do organically. There's gonna be a lot that we do through partnerships, >>This security market that's coming to you. You don't have to go claim that you're now a security vendor, right? The market very naturally saying, wow, a comprehensive security strategy has to incorporate a data protection strategy and a recovery, you know, and the things we've talking about, Mount ransomware, I want to ask you, you know, I've been around a long time, longer than you actually Sanjay. So, but you you've, you've seen a lot. You look incredibly, >>Thank you. That's all good. Oh, >>Shocks. So the market, I've never seen a market like this, right? I okay. After the.com crash, we said, and I know you can't talk about IPO. That's not what I'm talking about, but everything was bad after that. Right. 2008, 2000, everything was bad. I've never seen a market. That's half full, half empty, you know, snowflake beats and raises the stock, goes through the roof. Dev if it, the area announced today, Mongo, DB, beat and Ray, that things getting crushed. And, and after market never seen anything like this. It's so fed, driven and, and hard to protect. And, and of course, I know it's a marathon, you know, it's not a sprint, but have you ever seen anything like this? >>Listen, I walk worked through 18 quarters as COO of VMware. You seen, I've seen public quarters there and you know, was very fortunate. Thanks to the team. I don't think I missed my numbers in 18 quarters except maybe once close. But we, it was, it's tough. Being a public company. Officer of the company is tough. I did that also at SAP. So the journey from 10 to 20 billion at SAP, the journey from six to 12 at VMware, that I was able to be fortunate. It's humbling because you, you really, you know, we used to have this, we do the earnings call and then we kind of ask ourselves, what, what do you think the stock price was gonna be a day and a half later? And we'd all take bets as to wear this. I think you just basically, as a, as a sea level executive, you try to build a culture of beaten, raise, beaten, raise, beaten, raise, and you wanna set expectations in a way that you're not setting them up for failure. >>And you know, it's you, there's, Dave's a wonderful CEO as is Frank movement. So it's hard for me to dissect. And sometimes the market are fickle on some small piece of it. But I think also the, when I, I encourage people say, take the long term view. When you take the long term view, you're not bothered about the ups and downs. If you're building a great company over the length of time, now it will be very clear over the arc of many, many quarters that you're business is trouble. If you're starting to see a decay in growth. And like, for example, when you start to see a growth, start to decay significantly by five, 10 percentage points, okay, there's something macro going on at this company. And that's what you won't avoid. But these, you know, ups and downs, my view is like, if you've got both Mongo, DIA and snowflake are fantastic companies, they're CEOs of people I respect. They've actually a kind of an, a, you know, advisor to us as a company, you knows mot very well. So we respect him, respect Frank, and you, there have been other quarters where Frank's, you know, the snowflakes had a down result after that. So you build a long term and they are on the right side of history, snowflake, and both of them in terms of being a modern cloud relevant in the case of MongoDB open source to data technology, that's, you know, winning, I, we would like to be like them one day >>As, as the new CEO of cohesive, what are you most, what are you most anxious about? And what are you most excited about? >>I think, listen, you know, you know, everything starts with the employee. You, I always believe I wrote my first memo to all employees. There was an article in Harvard business review called service profit chains that had a seminal impact on my leadership, which is when they studied companies who had been consistently profitable over a long period of time. They found that not just did those companies serve their customers well, but behind happy engaged customers were happy, engaged employees. So I always believe you start with the employee and you ensure that they're engaged, not just recruiting new employees. You know, I put on a tweet today, we're hiring reps and engineers. That's okay. But retaining. So I wanna start with ensuring that everybody, sometimes we have to make some unfortunate decisions with employees. We've, we've got a part company with, but if we can keep the best and brightest retained first, then of course, you know, recruiting machine, I'm trying to recruit the best and brightest to this company, people all over the place. >>I want to get them here. It's been, so I mean, heartwarming to come to world and just see people from all walks, kind of giving me hugs. I feel incredibly blessed. And then, you know, after employees, it's customers and partners, I feel like the tech is in really good hands. I don't have to worry about that. Cuz Mo it's in charge. He's got this thing. I can go to bed knowing that he's gonna keep innovating the future. Maybe in some of the companies, I would worried about the tech innovation piece, but most doing a great job there. I can kind of leave that in his cap of hands, but employees, customers, partners, that's kind of what I'm focused on. None of them are for me, like a keep up at night, but they're are opportunities, right? And sometimes there's somebody you're trying to salvage to make sure or somebody you're trying to convince to join. >>But you know, customers, I love pursuing customers. I love the win. I hate to lose. So fortune 1000 global, 2000 companies, small companies, big companies, I wanna win every one of 'em and it's not, it's not like, I mean, I know all these CEOs in my competitors. I texted him the day I joined and said, listen, I'll compete, honorably, whatever have you, but it's like Kobe and LeBron Kobe's passed away now. So maybe it's step Curry. LeBron, whoever your favorite athlete is you put your best on the court and you win. And that's how I am. That's nothing I've known no other gear than to put my best on the court and win, but do it honorably. It should not be the one that you're doing it. Unethically. You're doing it personally. You're not calling people's names. You're competing honorably. And when you win the team celebrates, it's not a victory for me, it's a victory for the team. >>I always think I'm glad that you brought out the employee experience and we're almost out of time, but I always think the employee experience and the customer experience are inextricably linked. This employees have to be empowered. They have to have the data that they need to do their job so that they can deliver to the customer. You can't do one without the other. >>That's so true. I mean, I, it's my belief. And I've talked also on this show and others about servant leadership. You know, one of my favorite poems is Brenda NA Tago. I went to bed in life. I dreamt that life was joy. I woke up and realized life was service. I acted in service was joy. So when you have a leadership model, which is it's about, I mean, there's lots of layers between me and the individual contributor, but I really care about that sales rep and the engineer. That's the leaf level of the organization. What can I get obstacle outta their way? I love skipping levels and going write that sales rep let's go and crack this deal. You know? So you have that mindset. Yeah. I mean, you, you empower, you invert the pyramid and you realize the power is at the leaf level of an organization. >>So that's what I'm trying to do. It's a little easier to do it with 2000 people than I dunno, either 20, 20, 2000 people or 35,000 reported me at VMware. And I mean a similar number at SAP, which was even bigger, but you can shape this. Now we are, we're not a startup anymore. We're a mid-size company. We'll see. Maybe along the way, there's an IP on the path. We'll wait for that. When it comes, it's a milestone. It's not the destination. So we do that and we are, we, I told people we are gonna build this green company. Cohesive is gonna be a great company like VMware one day, like Amazon. And there's always a day of early beginnings, but we have to work harder. This is kind of like the, you know, eight year old version of your kid, as opposed to the 18 year old version of the kid. And you gotta work a little harder. So I love it. Yeah. >>Good luck. Awesome. Thank you too. Best of luck. Congratulations on the role, it sounds like there's a tremendous amount of adrenaline, a momentum carrying you forward Sanja. We always appreciate having thank >>You for having in your show. >>Thank you. Our pleasure, Lisa. Thank you for Sanjay poin and Dave ante. I'm Lisa Martin. You're watching the cube live from VMware Explorer, 2022, stick around our next guest. Join us momentarily.

>>The cube presents HPE discover 2022 brought to you by HPE. >>Welcome back to the Cube's coverage. We're wrapping up day two, John furrier and Dave ante. We got some friends and colleagues, longtime friends, Crawford Del Pret is the president of IDC. Matt Eastwood is the senior vice president of infrastructure and cloud guys. Thanks for coming on spending time. Great to you guys. >>That's fun to do it. Awesome. >>Cravin I want to ask you, I, I think this correct me if I'm wrong, but this was your first physical directions as, as president. Is that true or did you do one in 2019? >>Uh, no, we did one in 20. We did, we did one in 20. I was president at the time and then, and then everything started, >>Well, how was directions this year? You must have been stoked to get back together. Yeah, >>It was great. I mean, it was actually pretty emotional, you know, it's, it's a community, right? I mean, we have a lot of customers that have been coming to that event for a long, long time and to stand up on the stage and look out and see people, you know, getting a little bit emotional and a lot of hugs and a lot of bringing people together. And this year in Boston, we were the first event really of any size that kind of came back. And when I kind of didn't see that coming in terms of how people, how ready people were to be together. Cause >>When did you did it April >>In Boston? Yeah, we did it March in March. Yeah, it was, it was, it was, it was a game day decision. I mean, we were, we had negotiated it, we were going back and forth and then I kind of made the call at the last minute, say, let's go and do it. And in Santa Clara, I felt like we were kind of opening up the crypt at the convention center. I mean, all the production people said, you know what? You guys were really the first event to be back. And attendance was really strong. You know, we, we, we got over a thousand. It was, it was really good. >>Good. It's always a fun when I was there. It was, it's a big deal. You guys prepare for it. Yeah. Some new faces up on the stage. Yeah. So, so Matt, um, you've been doing the circuit. I take it like, like all top analysts, super busy. Right. This is kind of end of the spring. I mean, I know it's summer, right. That's right. But, um, how do you look at, at discover relative some, some of the other events you've been at? >>So I think if you go back to what Crawford was just talking about our event in March, I mean, March was sort of the, the reopening and there was, I think people just felt so happy to be, to be back out there. You still get a little bit at, at these events. I mean, cuz for each, each company it's their first time back at it, but I think we're starting to get down what these events are gonna feel like going forward. Um, and it, I mean, there's good energy here. There's been a good attendance. I think the, the interest in getting back live and having face to face meetings is clearly strong. >>Yeah. I mean, this definitely shows that hybrids, the steady state, both events cloud. Yeah. Virtualization remotes. So what are you guys seeing with that hybrid mode? Just from a workforce, certainly people excited to get back together, but it's gonna continue. You're starting to see that digital piece. How is that impacting some of the, some of the customers you're tracking, who's winning and who's losing, coming out of the pandemic. What's the big picture look like? >>Yeah. I mean, if you, if you take a look at hybrid work, um, people are testing many, many, many different models. And I think as we move from a pandemic to an em, we're gonna have just waves and waves and waves of people needing that flexibility for a lot of different reasons, whether they have, uh, you know, preexisting conditions, whether they're just not comfortable, whether they have people who can't be vaccinated at home. So I think we're gonna be in this hybrid work for a long, long time. I do think though that we are gonna transition back into some kind of a normal, um, and I, and I think the big difference is that I think leaders back in the day, a long time ago, when people weren't coming into work, it was kind of like, oh, I know nothing's going on there. People aren't getting worked. And I think we're over that stage. Yeah. I think we're now into a stage where we know people can be productive. We know people can effectively work from home and now we're into the reason to be in the office. And the reason to be in the office is that collaboration, it's that mentoring it's that, you know, think about your 25 year old self. Do you wanna be staring at a windshield all day long and not kind of building those relationships? People want face to face, it's difficult. They want face >>To face and I would, and you guys had a great culture and it's a young culture. How are you handling it as an executive in terms of, is there a policy for hybrid or >>Yeah, so, so, so at IDC, what we did is we're in a pilot period and we've kind of said that the summertime is gonna be a pilot period and we've asked people, we're actually serving shocker, we're >>Serving, >>But we're, but we're, but, but we're actually asking people to work with their manager on what works for them. And then we'll come up with, you know, whether you are in, out of the office worker, which will be less than two days a hybrid worker, which will be three days or, uh, in, in the office, which is more than three days a week. And you know, we all know there's, there's, there's limitation, there's, there's, there's variability in that, but that's kind of what we're shooting for. And we'd like to be able to have that in place in the fall. >>Are you pretty much there? >>Yeah, I am. I, I am there three days a week. I I, Mondays and Fridays, unless, >>Because you got the CEO radius, right? Yeah. >><laugh>, <laugh> >>The same way I'm in the office, the smaller, smaller office. But so, uh, let's talk a little bit about the, the numbers we were chatting earlier, trying to squint through you guys are, you know, obviously the gold standard for what the market does, what happened in, you know, during the pandemic, what happened in 2021 and what do you expect to happen in, in 2022 in terms of it spending growth? >>Yeah. So this is, this is a crazy time, right? We've never seen this. You and I have a long history of, uh, of tracking this. So we saw in, in, in, in 2020, the market decelerated dramatically, um, the GDP went down to a negative like it always does in these cases, it was, you know, probably negative six in that, in that, in that kind of range for the first time, since I've been tracking it, which goes back over 30 years, tech didn't go negative tech went to about just under 3%. And then as we went to 2021, we saw, you know, everything kind of snap back, we saw tech go up to about 11% growth. And then of course we saw, you know, GDP come back to about a 4%, you know, ki kind of range growth. Now what's I think the story there is that companies and you saw this anecdotally everywhere companies leaned into tech, uh, company. >>You know, I think, you know, Matt, you have a great statistic that, you know, 80% of companies used COVID as their point to pivot into digital transformation, right. And to invest in a different way. And so what we saw now is that tech is now where I think companies need to focus. They need to invest in tech. They need to make people more productive with tech and it played out in the numbers now. So this year what's fascinating is we're looking at two Fastly different markets. We've got gasoline at $7 a gallon. We've got that affecting food prices. Uh, interesting fun fact recently it now costs over $1,000 to fill an 18 Wheeler. All right. Based on, I mean this just kind of can't continue. So you think about it, don't put the boat >>In the wall. Yeah. Yeah. >>Good, good, good, good luck. It's good. Yeah, exactly. <laugh> so a family has kind of this bag of money, right? And that bag of money goes up by maybe three, 4% every year, depending upon earnings. So that is sort of sloshing around. So if food and fuel and rent is taking up more gadgets and consumer tech are not, you know, you're gonna use that iPhone a little longer. You're gonna use that Android phone a little longer. You're gonna use that TV a little longer. So consumer tech is getting crushed, you know, really it's very, very, and you saw it immediately and ad spending, you've seen it in meta. You've seen it in Facebook. Consumer tech is doing very, very it's tough enterprise tech. We haven't been in the office for two and a half years. We haven't upgraded whether that be campus wifi, whether that be, uh, servers, whether that be, uh, commercial PCs, as much as we would have. So enterprise tech, we're seeing double digit order rates. We're seeing strong, strong demand. Um, we have combined that with a component shortage and you're seeing some enterprise companies with a quarter of backlog. I mean, that's, you know, really unheard at higher >>Prices, which >>Also, and therefore that drives that >>Drives. It shouldn't be that way. If there's a shortage of chips, it shouldn't be that way, >>But it is, but it is, but it is. And then you look at software and we saw this, you know, we've seen this in previous cycles, but we really saw it in the COVID downturn where, uh, in software, the stickiness of SaaS means that you just, you're not gonna take that stuff out. So the, the second half of last year we saw double digit rates in software surprise. We're seeing high single digit revenue growth in software now, so that we think is gonna sustain, which means that overall it demand. We expect to be between five and 6% this year. Okay, fine. We have a war going on. We have, you know, potentially, uh, a recession. We think if we do, it'll be with a lower case, R maybe you see a banded down to maybe 4% growth, but it's gonna grow this. >>Is it, is it both the structural change of the disruption of COVID plus the digital transformation yeah. Together? Or is it, >>I, I think you make a great point. Um, I, I, I think that we are entering a new era for tech. I think that, you know, Andrew's famous wall street journal oped 10 years ago, software is even world was absolutely correct. And now we're finding that software is, is eing into every nook and cranny people have to invest. They, they know disruptors are coming around every single corner. And if I'm not leaning into digital transformation, I'm dead. So >>The number of players in tech is, is growing, >>Cuz there's well, the number of players in tech number >>Industry's coming >>In. Yeah. The industry's coming in. So I think the interesting dynamic you're gonna see there is now we have high interest rates. Yeah. Which means that the price of funding these companies and buying them and putting data on is gonna get higher and higher, which means that I think you could, you could see another wave of consolidation. Mm-hmm <affirmative> because tech large install based tech companies are saying, oh, you know what? I like that now >>4 0 9 S are being reset too. That's another point. >>Yeah. I mean, so if you think about this, this transformation, right. So it's all about apps, absent data and differentiating and absent data. What the, the big winner the last couple years was cloud. And I would just say that if this is the first potential recession that we're talking about, where the cloud service providers. So I think a cloud as an operating model, not necessarily a destination, but for these cloud service providers, they've actually never experienced a slowdown. So how, and, and if you think about the numbers, 30% of, of the typical it budget is now quote, unquote cloud and 30% of all expenditures are it related. So there's a lot of exposure there. And I think you're gonna see a lot of, a lot of focus on how we can rationalize some of those investments. >>Well, that's a great point. I want to just double click on that. So yeah, the cloud did well during the pandemic. We saw that with SAS, have you guys tracked like the Tams of what got pulled forward? So the bit, a big discussion about something that pulled forward because of the pandemic, um, like zoom, for instance, obviously everyone's using zoom. Yeah, yeah, yeah. Was there fake Tams? There was one, uh, couple analysts who were pointing out that some companies were hot during the pandemic will go away that that Tam doesn't really exist, but there's some that got pulled forward early. That's where the growth is. So is there a, is there a line between the, I call fake Tam or pulled forward TA that was only for the pandemic situationally, um, devices might be like virtual event, virtual event. Software was one, I know Hoppin got laid a lot of layoffs. And so that was kind of gone coming, coming and going. And you got SAS which got pulled forward. Yep. And it's not going away, but it's >>Sustaining. Yeah. Yeah. But it's, but, but it's sustaining, um, you know, I definitely think there was a, there was a lot of spending that absolutely got pulled forward. And I think it's really about CEO's ability to control expectations and to kind of message what it, what it looks like. Um, you know, I think I look, I, I, I think virtual event platforms probably have a role. I think you can, you can definitely, you know, raise your margins in the event, business, significantly using those platforms. There's a role for them. But if you were out there thinking that this thing was gonna continue, then you know, that that was unrealistic, you know, Dave, to, to your point on devices, I'm not necessarily, you know. Sure. I think, I think we definitely got ahead of our expectations and things like consumer PCs, those things will go back to historical growth >>Rates. Yeah. I mean, you got the install base is pretty young right now, but I think the one way to look at it too, is there was some technical debt brought in because people didn't necessarily expect that we'd be moving to a permanent hybrid state two years ago. So now we have to actually invest on both. We have to make, create a little bit more permanency around the hybrid world. And then also like Crawford's talking about the permanency of, of having an office and having people work in, in multiple modes. Yeah. It actually requires investment in both the office. And >>Also, so you're saying operationally, you gotta run the company and do the digital transformation to level up the hybrid. >>Yeah. Yeah. Just the way people work. Right. So, so, you know, you basically have to, I mean, even for like us internally, Crawford was saying, we're experimenting with what works for us. My team before the pandemic was like one third virtual. Now it's two third virtual, which means that all of our internal meetings are gonna be on, on teams or zoom. Right. Yeah. They're not gonna necessarily be, Hey, just coming to the office today, cuz two thirds of people aren't in the Boston area. >>Right. Matt, you said if you see cloud as an operating model, not necessarily a place. I remember when you were out, I was in the, on the, on the, on the zoom when, when first met Adam Celski yeah. Um, he said, you were asking him about, you know, the, the on-prem guys and he's like, nah, it's not cloud. And he kind of was very dismissive of it. Yeah. Yeah. I wanna get your take on, you know, what we're seeing with as Azure service GreenLake, apex, Cisco's got their version. IBM. Fewer is doing it. Is that cloud. >>I think if it's, I, I don't think all of it is by default. I think it is. If I actually think what HPE is doing is cloud, because it's really about how you present the services and how you allow customers to engage with the platform. So they're actually creating a cloud model. I think a lot of people get lost in the transition from, you know, CapEx to OPEX and the financing element of this. But the reality is what HPE is doing and they're sort of setting the standard. I think for the industry here is actually setting up what I would consider a cloud model. >>Well, in the early days of, of GreenLake, for sure it was more of a financial, you >>Know, it was kind of bespoke, right. But now you've got 70 services. And so you can, you can build that out. But >>You know, we were talking to Keith Townsend right after the keynote and we were sort of UN unpacking it a little bit. And I, I asked the question, you know, if you, if you had to pin this in terms of AWS's maturity, where are we? And the consensus was 2014 console filling, is that fair or unfair? >>Oh, that's a good question. I mean, um, I think it's, well, clouds come a long way, right? So it'd be, I, I, I think 20, fourteen's probably a little bit too far back because >>You have more modern tools I Kubernetes is. Yeah. >>And, but you also have, I would say the market still getting to a point of, of, of readiness and in terms of buying this way. So if you think about the HP's kind of strategy around edge, the core platform as a, as a service, you know, we're all big believers in edge and the apps follow the data and the data's being created in new locations and you gotta put the infrastructure there. And for an end user, there's a lot of risk there because they don't know how to actually plan for capacity at the edge. So they're gonna look to offload that, but this is a long term play to actually, uh, build out and deploy at the edge. It's not gonna happen tomorrow. It's a five, 10 year play. >>Yeah. I mean, I like the operating model. I'd agree with you, Matt, that if it's, if it's cloud operations, DevSecOps and all that, all that jazz it's cloud it's cloud operating and, and, and public cloud is a public cloud hyperscaler on premise. And the storage folks were presented. That's a single pane of glass. That's old school concepts, but cloud based. Yep. Shipping hardwares, auto figures. Yeah. That's the kind of consumption they're going for now. I like it. Then I, then they got the partner led thing is the partner piece. How do you guys see that? Because if I'm a partner, there's two things, wait a minute, am I at bottleneck to the direct self-service? Or is that an enabler to get more cash, to make more money? If I'm a partner. Cause you see what Essentia's doing with what they do with Amazon and Deloitte and et C. Yeah. You know, it's interesting, right? Like they've a channel partner, I'm making more cash. >>Yeah. I mean, well, and those channel partners are all in transition too. They're trying to yeah. Right. Figure out. Right, right. Are they, you know, what are their managed services gonna look like? You know, what kind of applications are they gonna stand up? They're they're not gonna just be >>Reselling, bought a big house in a boat. The box is not selling. I wanna ask you guys about growth because you know, the big three cloud, big four growing pick a number, I dunno, 30, 35% revenue big. And like you said, it's 30% of the business now. I think Dell's growing double digits. I don't know how much of that is sustainable. A lot of that is PCs, but still strong growth. Yep. I think Cisco has promised 9% >>In, in that. Right, right. >>About that. Something like that. I think IBM Arvin is at 6%. Yep. And I think HPE has said, Hey, we're gonna do three to 4%. Right. Which is so really sort of lagging and which I think a lot of people in wall street is like, okay, well that's not necessarily so compelling. Right. What does HPE have to do to double that growth? Or even triple that growth. >>Yeah. So they're gonna need, so, so obviously you're right. I mean, being able to show growth is Tanem out to this company getting, you know, more attention, more heat from, from investors. I think that they're rightly pointing to the triple digit growth that they've seen on green lake. I think if you look at the trailing, you know, 12 month bookings, you got over, you know, 7 billion, which means that in a year, you're gonna have a significant portion of the company is as a service. And you're gonna see that revenue that's rat being, you know, recognized over a series of months. So I think that this is sort of the classic SAS trough that we've seen applied to an infrastructure company where you're basically have to kind of be in the desert for a long time. But if they can, I think the most important number for HPE right now is that GreenLake booking snow. >>And if you look at that number and you see that number, you know, rapidly come down, which it hasn't, I mean off a very large number, you're still in triple digits. They will ultimately start to show revenue growth, um, in the business. And I think the one thing people are missing about HPE is there aren't, there are a lot of companies that want to build a platform, but they're small and nobody cares. And nobody let's say they throw a party and nobody comes. HP has such a significant installed base that if they do build a platform, they can attract partners to that platform. What I mean by that is partners that deliver services on GreenLake that they're not delivering. They have the girth to really start to change an industry and change the way stuff is being built. And that's the be they're making. And frankly, they are showing progress in that direction. >>So I buy that. But the one thing that concerns me is they kind of hide the ball on services. Right. And I, and I worry about that is like, is this a services kind of just, you know, same wine, new bottle or, >>Or, yeah. So, so I, I, I would argue that it's not about hiding the ball. It's about eliminating confusion of the marketplace. This is the company that bought EDS only to spin it off <laugh>. Okay. And so you don't wanna have a situation where you're getting back into services. >>Yeah. They're the only one >>They're product, not the only ones who does, I mean, look at the way IBM used to count and still >>I get it. I get it. But I think it's, it's really about clarity of mission. Well, I point next they are in the Ts business, absolutely. Point of it. It's important prop >>Drive for them at the top. Right. The global 50 say there's still a lot of uniqueness in what they want to buy. So there's definitely a lot of bespoke kind of delivery. That's still happening there. The real promise here is when you get into the global 2000 and yeah. And can start them to getting them to consume very standardized offers. And then the margins are, are healthy >>And they got they're what? Below 30, 33, 30 3%. I think 34% last quarter gross margin. Yeah. That that's solid. Just compare that with Dell is, I don't know. They're happy with 20, 21% of correct. You get that, which is, you know, I I'll come back. Go ahead. I want, I wanna ask >>Guys. No, I wanna, I wanna just, he said one thing I like, which was, I think he nailed it. They have such, um, big install base. They have a great channel. They know how to use it. Right. That's a real asset. Yeah. And Microsoft, I remember when their stock was trading at 26 when Baltimore was CEO. Yep. What they did with no, they had office and windows, so a little bit different. Yep. But similar strategy, leverage our install base, bring something up to them. That's what you're kind of connecting the >>Absolutely. You have this velocity, uh, machine with a significant girth that you can now move to a new model. They move that to a new model. To Matt's point. They lead the industry, they change the way large swath the customers buy and you will see it in steady revenue growth over time. Okay. So I just in that, well, >>So your point is the focus and there the right it's the right focus. And I would agree what's >>What's the other move. What's their other move, >>The problem. Triple digit booking growth off a number that gets bigger >>Inspired. Okay. >>Whats what's the scoreboard. Okay. Now they're go at the growth. That's the scoreboard. What are the signals? Are you looking at on the scoreboard Crawford and Matt in terms of success? What are the benchmarks? Is it ecosystem growth, number of services, triple growth. Yeah. What's the, what are some of the metrics that you guys are gonna be watching and we should be watching? >>Yeah. I mean, I dunno if >>You wanna jump in, I mean, I think ecosystem's really critical. Yeah. You want to, you want to have well and, and you need to sell both ways like HPE needs to be selling their technology on other cloud providers and vice versa. You need to have the VMs of the world on, you know, offering services on your platform and, and kind of capturing some, some motion off that. I think that's pretty critical. The channel definitely. I mean, you have to help and what you're gonna see happen there is there will be channel partners that succeed in transforming and succeeding and there'll be a lot that go away and that some, some of that's, uh, generational there'll be people that just kind of age outta the system and, and just go home. >>Yeah. Yeah. So I would argue it's, it's, it's, it's gonna be, uh, bookings growth rate. It's gonna be retention rate of the, of, of, of the customers, uh, that they have. And then it's gonna be that, that, um, you know, ultimately you're gonna see revenue, um, growth, and which is that revenue growth is gonna have to be correlated to the booking's growth for green lake cross. >>What's the Achilles heel on, on HPE. If you had to do the SWAT, what's the, what's the w for HPE that they really need to pay >>Attention to. I mean, they, they need to continue their relentless focus on cost, particularly in the, in the core compute, you know, segment they need to be, they need to be able to be as cost effective as possible while the higher profit dollars associated with GreenLake and other services come in and then increase the overall operating margin and gross margin >>Picture for the, I mean, I think the biggest thing is they just have, they have to continue the motion that they've been on. Right. And they've been consistent about that. Mm-hmm, <affirmative> what you see where others have, have kind of slipped up is when you go to, to customers and you present the, the OPEX as a service and the traditional CapEx side by side, and the customers put in this position of trying to detangle what's in that OPEX service, you don't wanna do that obviously. And, and HP has not done that, but we've seen others kind of slip up. And, but >>A lot of companies still wanna buy CapEx. Right. Absolutely liquid. And, and I think, >>But you shouldn't do a, you shouldn't do that bake off by putting those two offers out. You should basically ascertain what they want to do. >>What's kind of what Dell does. Right. Hey, how, what do you want? We got this, we got >>This on one hand, we got this, the, we got that, right. Uh, the two hand sales rep, no, this CapEx. Thing's interesting. And if you're Amazon and Azure and, and GCP, what are they thinking right now? Cause remember what, four years ago outpost was launched, which essentially hardware. Yeah. This is cloud operating model. Yep. Yeah. They're essentially bringing outpost. This is what they got basically is Amazon and Azure, like, is this ABL on the radar for them? How would you, what, what are they thinking in your mind if we're on, if we're in their office, in their brain trust, are they laughing? Are they like saying, oh, they're scared. Is this real threat >>Opportunity? I, I, I mean, I wouldn't say they're laughing at all. I, I would say they're probably discounting a little bit and saying, okay, fine. You know, that's a strategy that a traditional hardware company is moving to. But I think if you look underneath the covers, you know, two years ago it was, you know, pretty basic stuff they were offering. But now when you start getting into some, you know, HPC is a service, you start getting into data fabric, you start getting into some of the more, um, sophisticated services that they're offering. And, and I think what's interesting about HP. What my, my take is that they're not gonna go after the 250 services the Amazon's offering, they're gonna basically have a portfolio of services that really focus on the core use cases of their infrastructure set. And, and I think one of the danger things, one, one of the, one of the red flags would be, if they start going way up the stack and wanting to offer the entire application stack, that would be like a big flashing warning sign, cuz it's not their sweet spot. It's not, not what they have. >>So machine learning, machine learning and quantum, okay. One you can argue might be up the stack machine learning quantum should be in their wheelhouse. >>I would argue machine learning is not up the stack because what they would focus on is inference. They'd focus on learning. If they came out and said, machine learning all the way up to the, you know, what a, what, what a drug discovery company needs to do. >>So they're bringing it down. >>Yeah. Yeah. Well, no, I think they're focusing on that middle layer, right? That, that, that data layer. And I think that helping companies manage their data make more sense outta their data structure, their data that's core to what they wanna do. >>I, I feel as though what they're doing now is table stakes. Honestly, I do. I do feel like, okay, Hey finally, you know, I say the same thing about apex, you >>Know, we finally got, >>It's like, okay guys, the >>Party. Great. Welcome to the, >>But the one thing I would just say about, about AWS and the other big clouds is whether they might be a little dismissive of what's truly gonna happen at the edge. I think the traditional OEMs that are transforming are really betting on that edge, being a huge play and a huge differentiator for them where the public cloud obviously have their own bets there. But I think they were pretty dismissive initially about how big that went. >>I don't, and I don't think anybody's really figured out the edge yet. >>Well, that's an, it's a battleground. That's what he's saying. I think you're >>Saying, but on the ecosystem, I wanna say up the stack, I think it's the ecosystem. That's gotta fill that out. You gotta see more governance tools and catalogs and AI tools and, and >>It immediately goes more, it goes more vertical when you go edge, you're gonna have different conversations and >>They're >>Lacking. Yeah. And they, but they're in there though. They're in the verticals. HP's in the, yeah, >>For sure. But they gotta build out an ego. Like you walk around here, the data, the number of data companies here. I mean, Starburst is here. I'm actually impressed that Starburst is here. Cause I think they're a forward thinking company. I wanna see that times a hundred. Right. I mean, that's >>You see HP's in all the verticals. That's I think the point here, >>So they should be able to attract that ecosystem and build that, that flywheel that's the, that's the hallmark of a cloud that marketplace. >>Yeah, it is. But I think there's a, again, I go back to, they really gotta stay focused on that infrastructure and data management. Yeah. >>But they'll be focused on that, but, but their ecosystem, >>Their ecosystem will then take it up from there. And I think that's the next stage >>And that ecosystem's gotta include OT players and communications technologies players as well. Right. Because that stuff gets kind of sucked up in that, in that edge play. Do >>You feel like HPE has a, has a leg up on that or like a little, a little bit of a lead or is it pretty much, you know, even raced right now? >>I think they've, I think the big infrastructure companies have all had OEM businesses and they've all played there. It's it's, it's also helping those OT players actually convert their own needs into more of a software play and, and not so much of >>Physical. You've been, you've been following and you guys both have been following HP and HPE for years. They've been on the edge for a long time. I've been focused on this edge. Yeah. Now they might not have the product traction that's right. Or they might not develop as fast, but industrial OT and IOT they've been talking about it, focused on it. I think Amazon was mostly like, okay, we gotta get to the edge and like the enterprise. And, and I think HP's got a leg up in my opinion on that. Well, I question is can they execute? >>Yeah. I mean, PTC was here years ago on stage talking >>About, but I mean, you think about, if you think about the edge, right. I mean, I would argue one of the best acquisitions this company ever did was Aruba. Right. I mean, it basically changed the whole conversation of the edge changed the whole conversation. >>If >>Became GreenLake, it was GreenLake. >>Well, it became a big department. They gave a big, but, but, but I mean, you know, I mean they, they, they went after going selling edge line servers and frankly it's very difficult to gain traction there. Yeah. Aruba, huge area. And I think the March announcement was when they brought Aruba management into. Yeah. Yeah. >>Totally. >>Last question. Love >>That. >>What are you guys saying about the, the Broadcom VMware acquisition? What's the, what are the implications for the ecosystem for companies like HPE and just generally for the it business? >>Yeah. So >>You start. Yeah, sure. I'll start, I'll start there. So look, you know, we've, you know, spent some time, uh, going through it spent some time, you know, speaking, uh, to the, to the, to the folks involved and, and, and I gotta tell you, I think this is a really interesting moment for Broadcom. This is Broadcom's opportunity to basically build a different kind of a conversation with developers to, uh, try to invest in. I mean, just for perspective, right? These numbers may not be exact. And I know a dollar is not a dollar, but in 2001, anybody, remember what HP paid for? Compact >>8,000,000,020, >>So 25 billion, 25 billion. Wow. VMware just got sold for 61 billion. Wow. Okay. Unbill dollars. Okay. That gives you a perspective. No, again, I know a dollar is not a dollar 2000. >>It's still big numbers, >>2022. So having said that, if you just did it to, to, to basically build your DCF model and say, okay, over this amount of time, I'll pay you this. And I'll take the money out of this period of time, which is what people have criticized them for. I think that's a little shortsighted. I, yeah, I think this is Broadcom's opportunity to invest in that product and really try to figure out how to get a seat at the table in software and pivot their company to enterprise software in a different way. They have to prove that they're willing to do that. And then frankly, that they can develop the skills to do that over time. But I do believe this is a, a different, this is a pivot point. This is not >>CA this is not CA >>It's not CA >>In my, in my mind, it can't be CA they would, they would destroy too much. Now you and I, Dave had some, had some conversations on Twitter. I, I don't think it's the step up to them sort of thinking differently about semiconductor, dying, doing some custom semi I, I don't think that's. Yeah. I agree with that. Yeah. I think I, I think this is really about, I got two aspiration for them pivoting the company. They could >>Justify the >>Price to the, getting a seat at the adults table in software is, >>Well, if, if Broadcom has been squeezing their supplies, we all hear the scutle butt. Yeah. If they're squeezing, they can use VMware to justify the prices. Yeah. Maybe use that hostage. And that installed base. That's kind of Mike conspiracy. >>I think they've told us what they're gonna do. >><laugh> I do. >>Maybe it's not like C what's your conspiracy theory like Symantec, but what >>Do you think? Well, I mean, there's still, I mean, so VMware there's really nobody that can do all the things that VMware does say. So really impossible for an enterprise to just rip 'em out. But obviously you can, you can sour people's taste and you can very much influence the direction they head in with the collection of, of providers. One thing, interesting thing here is, was the 37% of VMware's revenues sold through Dell. So there's, there's lots of dependencies. It's not, it's not as simple as I think John, you you're right. You can't just pull the CA playbook out and rerun it here. This is a lot more complex. Yeah. It's a lot more volume of, of, of distribution, but a fair amount of VMware's install >>Base Dell's influence is still there basically >>Is in the mid-market. It's not, it's not something that they're gonna touch directly. >>You think about what VMware did. I mean, they kept adding new businesses, buying new businesses. I mean, is security business gonna stay >>Networking security, I think are interesting. >>Same >>Customers >>Over and over. Haven't done anything. VMware has the same customers. What new >>Customers. So imagine simplifying VMware. Right, right. Becomes a different equation. It's really interesting. And to your point, yeah. I mean, I think Broadcom is, I mean, Tom Crouse knows how to run a business. >>Yeah. He knows how to run a business. He's gonna, I, I think it's gonna be, you know, it's gonna be an efficient business. It's gonna be a well run business, but I think it's a pivot point for >>Broadcom. It's amazing to me, Broadcom sells to HPE. They sell it to Dell and they've got a market cap. That's 10 X, you know? Yes. Yeah. All we gotta go guys. Awesome. Great conversation guys. >>A lot. Thanks for having us on. >>Okay. Listen, uh, day two is a, is a wrap. We'll be here tomorrow, all day. Dave ante, John furrier, Lisa Martin, Lisa. Hope you're feeling okay. We'll see you tomorrow. Thanks for watching the cube, your leader in enterprise tech, live coverage.

(bright music) >> Okay, we're back in theCUBE. We said we were signing off for the night, but during the hallway track, we ran into old friend Stu Miniman who was the Director of Market Insights at Red Hat. Stu, friend of theCUBE done the thousands of CUBE interviews. >> Dave, it's great to be here. Thanks for pulling me on, you and I hosted Red Hat Summit before. It's great to see Paul here. I was actually, I was talking to some of the Red Hatters walking around Boston. It's great to have an event here. Boston's got strong presence and I understand, I think was either first or second year, they had it over... What's the building they're tearing down right down the road here. Was that the World Trade Center? I think that's where they actually held it, the first time they were here. We hosted theCUBE >> So they moved up. >> at the Hines Convention Center. We did theCUBE for summit at the BCEC next door. And of course, with the pandemic being what it was, we're a little smaller, nice intimate event here. It's great to be able to room the hall, see a whole bunch of people and lots watching online. >> It's great, it's around the same size as those, remember those Vertica Big Data events that we used to have here. And I like that you were commenting out at the theater and the around this morning for the keynotes, that was good. And the keynotes being compressed, I think, is real value for the attendees, you know? 'Cause people come to these events, they want to see each other, you know? They want to... It's like the band getting back together. And so when you're stuck in the keynote room, it's like, "Oh, it's okay, it's time to go." >> I don't know that any of us used to sitting at home where I could just click to another tab or pause it or run for, do something for the family, or a quick bio break. It's the three-hour keynote I hope has been retired. >> But it's an interesting point though, that the virtual event really is driving the physical and this, the way Red Hat marketed this event was very much around the virtual attendee. Physical was almost an afterthought, so. >> Right, this is an invite only for in-person. So you're absolutely right. It's optimizing the things that are being streamed, the online audience is the big audience. And we just happy to be in here to clap and do some things see around what you're doing. >> Wonderful see that becoming the norm. >> I think like virtual Stu, you know this well when virtual first came in, nobody had a clue with what they were doing. It was really hard. They tried different things, they tried to take the physical and just jam it into the virtual. That didn't work, they tried doing fun things. They would bring in a famous person or a comedian. And that kind of worked, I guess, but everybody showed up for that and then left. And I think they're trying to figure it out what this hybrid thing is. I've seen it both ways. I've seen situations like this, where they're really sensitive to the virtual. I've seen others where that's the FOMO of the physical, people want physical. So, yeah, I think it depends. I mean, reinvent last year was heavy physical. >> Yeah, with 15,000 people there. >> Pretty long keynotes, you know? So maybe Amazon can get away with it, but I think most companies aren't going to be able to. So what is the market telling you? What are these insights? >> So Dave just talking about Amazon, obviously, the world I live in cloud and that discussion of cloud, the journey that customers are going on is where we're spending a lot of the discussions. So, it was great to hear in the keynote, talked about our deep partnerships with the cloud providers and what we're doing to help people with, you like to call it super cloud, some call it hybrid, or multi-cloud... >> New name. (crosstalk) Meta-Cloud, come on. >> All right, you know if Che's my executive, so it's wonderful. >> Love it. >> But we'll see, if I could put on my VR Goggles and that will help me move things. But I love like the partnership announcement with General Motors today because not every company has the needs of software driven electric vehicles all over the place. But the technology that we build for them actually has ramifications everywhere. We've working to take Kubernetes and make it smaller over time. So things that we do at the edge benefit the cloud, benefit what we do in the data center, it's that advancement of science and technology just lifts all boats. >> So what's your take on all this? The EV and software on wheels. I mean, Tesla obviously has a huge lead. It's kind of like the Amazon of vehicles, right? It's sort of inspired a whole new wave of innovation. Now you've got every automobile manufacturer kind of go and after. That is the future of vehicles is something you followed or something you have an opinion on Stu? >> Absolutely. It's driving innovation in some ways, the way the DOS drove innovation on the desktop, if you remember the 64K DOS limit, for years, that was... The software developers came up with some amazing ways to work within that 64K limit. Then when it was gone, we got bloatware, but it actually does enforce a level of discipline on you to try to figure out how to make software run better, run more efficiently. And that has upstream impacts on the enterprise products. >> Well, right. So following your analogy, you talk about the enablement to the desktop, Linux was a huge influence on allowing the individual person to write code and write software, and what's happening in the EV, it's software platform. All of these innovations that we're seeing across industries, it's how is software transforming things. We go back to the mark end reasons, software's eating the world, open source is the way that software is developed. Who's at the intersection of all those? We think we have a nice part to play in that. I loved tha- Dave, I don't know if you caught at the end of the keynote, Matt Hicks basically said, "Our mission isn't just to write enterprise software. "Our mission is based off of open source because open source unlocks innovation for the world." And that's one of the things that drew me to Red Hat, it's not just tech in good places, but allowing underrepresented, different countries to participate in what's happening with software. And we can all move that ball forward. >> Well, can we declare victory for open source because it's not just open source products, but everything that's developed today, whether proprietary or open has open source in it. >> Paul, I agree. Open source is the development model period, today. Are there some places that there's proprietary? Absolutely. But I had a discussion with Deepak Singh who's been on theCUBE many times. He said like, our default is, we start with open source code. I mean, even Amazon when you start talking about that. >> I said this, the $70 billion business on open source. >> Exactly. >> Necessarily give it back, but that say, Hey, this is... All's fair in tech and more. >> It is interesting how the managed service model has sort of rescued open source, open source companies, that were trying to do the Red Hat model. No one's ever really successfully duplicated the Red Hat model. A lot of companies were floundering and failing. And then the managed service option came along. And so now they're all cloud service providers. >> So the only thing I'd say is that there are some other peers we have in the industry that are built off open source they're doing okay. The recent example, GitLab and Hashicorp, both went public. Hashi is doing some managed services, but it's not the majority of their product. Look at a company like Mongo, they've heavily pivoted toward the managed service. It is where we see the largest growth in our area. The products that we have again with Amazon, with Microsoft, huge growth, lots of interest. It's one of the things I spend most of my time talking on. >> I think Databricks is another interesting example 'cause Cloudera was the now company and they had the sort of open core, and then they had the proprietary piece, and they've obviously didn't work. Databricks when they developed Spark out of Berkeley, everybody thought they were going to do kind of a similar model. Instead, they went for all in managed services. And it's really worked well, I think they were ahead of that curve and you're seeing it now is it's what customers want. >> Well, I mean, Dave, you cover the database market pretty heavily. How many different open source database options are there today? And that's one of the things we're solving. When you look at what is Red Hat doing in the cloud? Okay, I've got lots of databases. Well, we have something called, it's Red Hat Open Database Access, which is from a developer, I don't want to have to think about, I've got six different databases, which one, where's the repository? How does all that happen? We give that consistency, it's tied into OpenShift, so it can help abstract some of those pieces. we've got same Kafka streaming and we've got APIs. So it's frameworks and enablers to help bridge that gap between the complexity that's out there, in the cloud and for the developer tool chain. >> That's really important role you guys play though because you had this proliferation, you mentioned Mongo. So many others, Presto and Starbursts, et cetera, so many other open source options out there now. And companies, developers want to work with multiple databases within the same application. And you have a role in making that easy. >> Yeah, so and that is, if you talk about the question I get all the time is, what's next for Kubernetes? Dave, you and I did a preview for KubeCon and it's automation and simplicity that we need to be. It's not enough to just say, "Hey, we've got APIs." It's like Dave, we used to say, "We've got standards? Great." Everybody's implementation was a little bit different. So we have API Sprawl today. So it's building that ecosystem. You've been talking to a number of our partners. We are very active in the community and trying to do things that can lift up the community, help the developers, help that cloud native ecosystem, help our customers move faster. >> Yeah API's better than scripts, but they got to be managed, right? So, and that's really what you guys are doing that's different. You're not trying to own everything, right? It's sort of antithetical to how billions and trillions are made in the IT industry. >> I remember a few years ago we talked here, and you look at the size that Red Hat is. And the question is, could Red Hat have monetized more if the model was a little different? It's like, well maybe, but that's not the why. I love that they actually had Simon Sinek come in and work with Red Hat and that open, unlocks the world. Like that's the core, it's the why. When I join, they're like, here's a book of Red Hat, you can get it online and that why of what we do, so we never have to think of how do we get there. We did an acquisition in the security space a year ago, StackRox, took us a year, it's open source. Stackrox.io, it's community driven, open source project there because we could have said, "Oh, well, yeah, it's kind of open source and there's pieces that are open source, but we want it to be fully open source." You just talked to Gunnar about how he's RHEL nine, based off CentOS stream, and now developing out in the open with that model, so. >> Well, you were always a big fan of Whitehurst culture book, right? It makes a difference. >> The open organization and right, Red Hat? That culture is special. It's definitely interesting. So first of all, most companies are built with the hierarchy in mind. Had a friend of mine that when he joined Red Hat, he's like, I don't understand, it's almost like you have like lots of individual contractors, all doing their things 'cause Red Hat works on thousands of projects. But I remember talking to Rackspace years ago when OpenStack was a thing and they're like, "How do you figure out what to work on?" "Oh, well we hired great people and they work on what's important to them." And I'm like, "That doesn't sound like a business." And he is like, "Well, we struggle sometimes to that balance." Red Hat has found that balance because we work on a lot of different projects and there are people inside Red Hat that are, you know, they care more about the project than they do the business, but there's the overall view as to where we participate and where we productize because we're not creating IP because it's all an open source. So it's the monetizations, the relationships we have our customers, the ecosystems that we build. And so that is special. And I'll tell you that my line has been Red Hat on the inside is even more Red Hat. The debates and the discussions are brutal. I mean, technical people tearing things apart, questioning things and you can't be thin skinned. And the other thing is, what's great is new people. I've talked to so many people that started at Red Hat as interns and will stay for seven, eight years. And they come there and they have as much of a seat at the table, and when I talk to new people, your job, is if you don't understand something or you think we might be able to do it differently, you better speak up because we want your opinion and we'll take that, everybody takes that into consideration. It's not like, does the decision go all the way up to this executive? And it's like, no, it's done more at the team. >> The cultural contrast between that and your parent, IBM, couldn't be more dramatic. And we talked earlier with Paul Cormier about has IBM really walked the walk when it comes to leaving Red Hat alone. Naturally he said, "Yes." Well what's your perspective. >> Yeah, are there some big blue people across the street or something I heard that did this event, but look, do we interact with IBM? Of course. One of the reasons that IBM and IBM Services, both products and services should be able to help get us breadth in the marketplace. There are times that we go arm and arm into customer meetings and there are times that customers tell us, "I like Red Hat, I don't like IBM." And there's other ones that have been like, "Well, I'm a long time IBM, I'm not sure about Red Hat." And we have to be able to meet all of those customers where they are. But from my standpoint, I've got a Red Hat badge, I've got a Red Hat email, I've got Red Hat benefits. So we are fiercely independent. And you know, Paul, we've done blogs and there's lots of articles been written is, Red Hat will stay Red Hat. I didn't happen to catch Arvin I know was on CNBC today and talking at their event, but I'm sure Red Hat got mentioned, but... >> Well, he talks about Red Hat all time. >> But in his call he's talking backwards. >> It's interesting that he's not here, greeting this audience, right? It's again, almost by design, right? >> But maybe that's supposed to be... >> Hundreds of yards away. >> And one of the questions being in the cloud group is I'm not out pitching IBM Cloud, you know? If a customer comes to me and asks about, we have a deep partnership and IBM will be happy to tell you about our integrations, as opposed to, I'm happy to go into a deep discussion of what we're doing with Google, Amazon, and Microsoft. So that's how we do it. It's very different Dave, from you and I watch really closely the VMware-EMC, VMware-Dell, and how that relationship. This one is different. We are owned by IBM, but we mostly, it does IBM fund initiatives and have certain strategic things that are done, absolutely. But we maintain Red Hat. >> But there are similarities. I mean, VMware crowd didn't want to talk about EMC, but they had to, they were kind of forced to. Whereas, you're not being forced to. >> And then once Dell came in there, it was joint product development. >> I always thought a spin in. Would've been the more effective, of course, Michael Dell and Egon wouldn't have gotten their $40 billion out. But I think a spin in was more natural based on where they were going. And it would've been, I think, a more dominant position in the marketplace. They would've had more software, but again, financially it wouldn't have made as much sense, but that whole dynamic is different. I mean, but people said they were going to look at VMware as a model and it's been largely different because remember, VMware of course was a separate company, now is a fully separate company. Red Hat was integrated, we thought, okay, are they going to get blue washed? We're watching and watching, and watching, you had said, well, if the Red Hat culture isn't permeating IBM, then it's a failure. And I don't know if that's happening, but it's definitely... >> I think a long time for that. >> It's definitely been preserved. >> I mean, Dave, I know I read one article at the beginning of the year is, can Arvin make IBM, Microsoft Junior? Follow the same turnaround that Satya Nadella drove over there. IBM I think making some progress, I mean, I read and watch what you and the team are all writing about it. And I'll withhold judgment on IBM. Obviously, there's certain financial things that we'd love to see IBM succeed. We worry about our business. We do our thing and IBM shares our results and they've been solid, so. >> Microsoft had such massive cash flow that even bomber couldn't screw it up. Well, I mean, this is true, right? I mean, you think about how were relevant Microsoft was in the conversation during his tenure and yet they never got really... They maintained a position so that when the Nadella came in, they were able to reascend and now are becoming that dominant player. I mean, IBM just doesn't have that cash flow and that luxury, but I mean, if he pulls it off, he'll be the CEO of the decade. >> You mentioned partners earlier, big concern when the acquisition was first announced, was that the Dells and the HP's and the such wouldn't want to work with Red Hat anymore, you've sort of been here through that transition. Is that an issue? >> Not that I've seen, no. I mean, the hardware suppliers, the ISVs, the GSIs are all very important. It was great to see, I think you had Accenture on theCUBE today, obviously very important partner as we go to the cloud. IBM's another important partner, not only for IBM Cloud, but IBM Services, deep partnership with Azure and AWS. So those partners and from a technology standpoint, the cloud native ecosystem, we talked about, it's not just a Red Hat product. I constantly have to talk about, look, we have a lot of pieces, but your developers are going to have other tools that they're going to use and the security space. There is no such thing as a silver bullet. So I've been having some great conversations here already this week with some of our partners that are helping us to round out that whole solution, help our customers because it has to be, it's an ecosystem. And we're one of the drivers to help that move forward. >> Well, I mean, we were at Dell Tech World last week, and there's a lot of talk about DevSecOps and DevOps and Dell being more developer friendly. Obviously they got a long way to go, but you can't have that take that posture and not have a relationship with Red Hat. If all you got is Pivotal and VMware, and Tansu >> I was thrilled to hear the OpenShift mention in the keynote when they talked about what they were doing. >> How could you not, how could you have any credibility if you're just like, Oh, Pivotal, Pivotal, Pivotal, Tansu, Tansu. Tansu is doing its thing. And they smart strategy. >> VMware is also a partner of ours, but that we would hope that with VMware being independent, that does open the door for us to do more with them. >> Yeah, because you guys have had a weird relationship with them, under ownership of EMC and then Dell, right? And then the whole IBM thing. But it's just a different world now. Ecosystems are forming and reforming, and Dell's building out its own cloud and it's got to have... Look at Amazon, I wrote about this. I said, "Can you envision the day where Dell actually offers competitive products in its suite, in its service offering?" I mean, it's hard to see, they're not there yet. They're not even close. And they have this high say/do ratio, or really it's a low say/do, they say high say/do, but look at what they did with Nutanix. You look over- (chuckles) would tell if it's the Cisco relationship. So it's got to get better at that. And it will, I really do believe. That's new thinking and same thing with HPE. And, I don't know about Lenovo that not as much of an ecosystem play, but certainly Dell and HPE. >> Absolutely. Michael Dell would always love to poke at HPE and HP really went very far down the path of their own products. They went away from their services organization that used to be more like IBM, that would offer lots of different offerings and very much, it was HP Invent. Well, if we didn't invent it, you're not getting it from us. So Dell, we'll see, as you said, the ecosystems are definitely forming, converging and going in lots of different directions. >> But your position is, Hey, we're here, we're here to help. >> Yeah, we're here. We have customers, one of the best proof points I have is the solution that we have with Amazon. Amazon doesn't do the engineering work to make us a native offering if they didn't have the customer demand because Amazon's driven off of data. So they came to us, they worked with us. It's a lot of work to be able to make that happen, but you want to make it frictionless for customers so that they can adopt that. That's a long path. >> All right, so evening event, there's a customer event this evening upstairs in the lobby. Microsoft is having a little shin dig, and then serves a lot of customer dinners going on. So Stu, we'll see you out there tonight. >> All right, thanks you. >> Were watching a brewing somewhere. >> Keynotes tomorrow, a lot of good sessions and enablement, and yeah, it's great to be in person to be able to bump some people, meet some people and, Hey, I'm still a year and a half in still meeting a lot of my peers in person for the first time. >> Yeah, and that's kind of weird, isn't it? Imagine. And then we kick off tomorrow at 10:00 AM. Actually, Stephanie Chiras is coming on. There she is in the background. She's always a great guest and maybe do a little kickoff and have some fun tomorrow. So this is Dave Vellante for Stu Miniman, Paul Gillin, who's my co-host. You're watching theCUBEs coverage of Red Hat Summit 2022. We'll see you tomorrow. (bright music)

[Music] thecube's coverage of red hat summit 2022 thecube has been covering red hat summit for a number of years of course the last two years were virtual coverage now the red hat summit is one of the industry's most premier events and and typically red hat summits are many thousands of people i think the last one i went to was eight or nine thousand people very heavy developer conference this year red hat has taken a different approach it's a hybrid event it's kind of a vip event at the westin in boston with a lot more executives here than we would normally expect versus developers but a huge virtual audience my name is dave vellante i'm here with my co-host paul gillin paul this is a location that you and i have broadcast from many times and um of course 2019 the summer of 2019 ibm acquired red hat and um we of course we did red hat summit that year but now we're seeing a completely new red hat and a new ibm and you wouldn't know ibm owned red hat for what they've been talking about at this conference we just came out of the keynote where uh in the in the hour-long keynote ibm was not mentioned once and only appeared the logo only appeared once on the screen in fact so this is uh very much red hat being red hat not being a subsidiary at ibm and perhaps that's justified given that ibm's track record with acquisitions is that they gradually envelop the acquired company and and it becomes part of the ibm board yeah they blue wash the whole thing right it's ironic because ibm think is going on right across the street arvin krishna is here but no presence here and i think that's by design i mean it reminds me of when you know emc owned vmware you know the vmware team didn't want to publicize that they had an ecosystem of partners that they wanted to cater to and they wanted to treat everybody equally even though perhaps behind the scenes they were forced to do certain things that they might not have necessarily wanted to because they were owned by another company and i think that you know certainly ibm's done a good job of leaving the brand separate but when they talk about the con the conference calls ibm's earnings calls you certainly get a heavy dose of red hat when red hat was acquired by ibm it was just north of three billion dollars in revenue obviously ibm paid 34 billion dollars for the company actually by today's valuations probably a bargain you know despite the market sell-off in the last several months uh but now we've heard public statements from arvind kushner that that red hat is a 5 billion plus revenue company it's a little unclear what's in there of course when you listen to ibm earnings you know consulting is their big business red hat's growing at 21 but when i remember paul when red hat was acquired stu miniman and i did a session and i said this is not about cloud this is about consulting and modernizing applications and sure there's some cloud in there with openshift but from a financial standpoint ibm was able to take red hat and jam it right into its application modernization initiatives so it's hard to tell how much of that 5 billion is actually you know legacy red hat but i guess it doesn't matter anymore it's working ibm mathematics is notoriously opaque they if the business isn't going well it'll tend to be absorbed into another number in the in the earnings report that that does show some growth so we've heard uh certainly ibm talks a lot about red hat on its earnings calls it's very clear that red hat is the growth engine within ibm i'd say it's a bit of the tail wagging the dog right now where red hat really is dictating where ibm goes with its hypercloud strategy which is the foundation not only of its technology portfolio but of its consulting business and so red hat is really in the driver's seat of of hybrid cloud and that's the future for ibm and you see that very much at this conference where uh red hat is putting out its uh series of announcements today about improvements to his hybrid cloud the new release of route 9 red hat enterprise linux 9 improvements to its hybrid cloud portfolio it very much is going its own way with that and i sense that ibm is going to go along with wherever red hat chooses to go yeah i think you're absolutely right if by the way if you go to siliconangle.com paul just published a piece on red hat reds hats their roll out of their parade which of course is as you pointed out led by enterprise linux but to your point about hybrid cloud it is the linchpin of of certainly ibm strategy but many companies hybrid cloud strategies if you think about it openshift in particular it's it's the modern application development environment for kubernetes you can get kubernetes you can buy eks you can get that for free in a lot of places but you have to do dozens and dozens of things and acquire dozens of services to do what openshift does to get the reliability the recoverability the security and that's really red hat's play and they're the the thing about red hat combining with linux their linux heritage they're doing that everywhere it's going to open shift everywhere red hat everywhere whether it's on-prem in aws azure google out to the edge you heard paul cormier today saying he expects that in the next several years hardware is going to become one of the most important you know factors i agree i think we're going to enter a hardware renaissance you've seen the work that we've done on arm i think 2017 was when red hat and arm announced kind of their initial collaboration could have even been before that today we're hearing a lot about intel and nvidia and so affinity with all of these alternative processes i think they did throw in today in the keynote power and so i think i heard that that was the other ibm branding they sort of tucked that in there but the point is red hat runs everywhere so it's fundamental to building out hybrid cloud and that is fundamental to a lot of company strategies and red hat has been all over kubernetes with openshift it's i mean it's a drum beat here uh the openshift strategy is what really makes hybrid cloud possible because kubernetes is what makes it possible to shift workloads seamlessly from platform to platform you make an interesting point about hardware we have seen kind of a renaissance in hardware these last couple of years as these specific chipsets and uh and even full-scale processors have come to market we're seeing several in the ai area right now where startups are developing full-blown chipsets and and systems uh just for ai processing and nvidia of course that's that's really kind of their stock and trade these days so uh a a company that can run across all of those different platforms a platform like like rel which can run all across those different platforms is going to have a leg up on on anybody else and the implications for application development are considerable when you when you think about we talk about a lot about these alternative processes when flash replaced the spinning disk that had a huge impact on how applications are developed developers now didn't have to wait for that that disc to spin even though it's spinning very fast it's mechanical compared to electrons forget it and and the second big piece here is how memory is actually utilized the x86 you know traditional x86 you know memory everything goes through that core processor intel for years grabbed more and more function and you're seeing now that function become dispersed in fact a lot of people think we're moving from a processor-centric world to a connect centric world meaning connecting all these piece parts alternative processors memory controllers you know storage controllers io network interface cards smartnics and things like that where the communication across those resources is now where a lot of the innovation is going you see you're seeing a lot of that and now of course applications can take advantage of that especially now at the edge which is just a whole new frontier the edge certainly is part of that equation when you look at machine learning at training machine learning models the cpu actually does relatively little work most of it is happening in gpus in these parallel processes that are going on and the cpu is kind of acting as a traffic cop and you see that in the edge as well it's the same model at the edge where more of the intelligence is going to be out in discrete devices spread across the network and the cpu is going to be less of a uh you know less of a engine of intelligence at the same time though we've got cpus with we've got 100 core cpus are on the horizon and there are even 200 and 300 core cpus that we may see in the next uh in the next couple of years so cpus aren't standing still they are evolving to become really kind of super traffic cops for all of these other processors out in the network and on the edge so it's a very exciting time to be in hardware because so much innovation is happening really at the microprocessor level well we saw this you and i lived through the pc era and we saw a whole raft of applications come about as a result of the microprocessor the shift of the microprocessor-based economy we're going to see so we are seeing something similar with mobile and the edge you know just think about some of the numbers if you think about the traditional moore's law doubling a number of transistors every let's call it two years 18 to 24 months pat gelsinger at intel promises that intel is on that pace still but if you look at the apple m1 ultra they increased the transistor density 6x in the last 15 months okay so where is this another data point is the historical moore's law curve is 40 that's moderating to somewhere down you know down in the low 30s if you look at the apple a series i mean that thing is on average increasing performance at 110 a year when you add up into the combinatorial factors of the cpu the neural processing unit the gpu all the accelerators so we are seeing a new era the thing i i i wanted to bring up paul is you mentioned ai much of the ai work that's done today is modeling that's done in the cloud and when we talk about edge we think that the future of ai is ai inferencing in real time at the edge so you may not even be persisting that data but you're going to create a lot of data you're going to be operating on that data in streams and it's going to require a whole new new architectural thinking of hardware very low cost very low power very high performance to drive all that intelligence at the edge and a lot of that data is going to stay at the edge and and that's we're going to talk about some of that today with some of the ev innovations and the vehicle innovations and the intelligence in these vehicles yeah and in talking in its edge strategy which it outlined today and the announcements that are made today red hat very much uh playing to the importance of being able to run red hat enterprise linux at the edge the idea is you do these big machine learning models centrally and then you you take the you take what results from that and you move it out to smaller processors it's the only way we can cope with it with the explosion of data that will be uh that these sensors and other devices will be generating so some of the themes we're hearing in the uh announcements today that you wrote about paul obviously rel9 is huge uh red hat enterprise linux version nine uh new capabilities a lot of edge a lot of security uh new cross portfolio capabilities for the edge security in the software supply chain that's a big conversation especially post solar winds managed ansible when you think about red hat you really i think anyway about three things rel which is such as linux it powers the internet powers everything uh you think of openshift which is application development you think about ansible which is automation so itops so that's one of the announcements ansible on azure and then a lot of hybrid cloud talk and you're gonna hear a lot of talk this week about red hat's cloud services portfolio packaging red hat as services as managed services that's you know a much more popular delivery mechanism with clients because they're trying to make it easy and this is complicated stuff and it gets more complicated the more features they add and the more the more components of the red hat portfolio are are available it's it's gonna be complex to build these hybrid clouds so like many of these so thecube started doing physical events last summer by the way and so this is this is new to a lot of people uh they're here for the first time people are really excited we've definitely noticed a trend people are excited to be back together paul cormier talked about that he talked about the new normal you can define the new normal any way you want so paul cormier gave the uh the the intro keynote bidani interviewed amex stephanie cheris interviewed accenture both those firms are coming out stephanie's coming on with the in accenture as well matt hicks talked about product innovation i loved his reference to ada lovelace that was very cool he talked about uh serena uh ramyanajan a famous mathematician who nobody knew about when he was just a kid these were ignored individuals in the 1800s for years and years and years in the case of ada lovelace for a century even he asked the question what if we had discovered them earlier and acted on them and been able to iterate on them earlier and his point tied that to open source very brilliantly i thought and um keynotes which i appreciate are much shorter much shorter intimate they did a keynote in the round this time uh which i haven't seen before there's maybe a thousand people in there so a much smaller group much more intimate setting not a lot of back and forth but uh but there is there is a feeling of a more personal feel to this event than i've seen it past red hat summits yeah and i think that's a trend that we're going to see more of where the live audience is kind of the on the ground it's going to the vip audience but still catering to the virtual audience you don't want to lose them so that's why the keynotes are a lot tighter okay paul thank you for setting up red hat summit 2022 you're watching the cube's coverage we'll be right back wall-to-wall coverage for two days right after this short break [Music] you

>>To the Seaport in Boston, Massachusetts, everybody's buzzing. The Bruins are playing tonight. They tied it up. The Celtics tied it up last night. We're excited. We don't talk about the red Sox. Red Sox are getting struggles, but you know, we have good distractions. Paul goer is here. He's the president and chief executive officer at red hat and also a Boston fan of great to see, of course, you too. >>Nice to see you guys, you know, it's been a, it's been a while. >><laugh> yeah, we saw you, you know, online and virtually for a couple of years there, but, uh, you know, we've been doing red hat summit for a long, long time. Yeah, of course we were talking earlier. It's just much more intimate, kind of a VIP event, a few more suit jackets here. You know, I got my tie on, so I don't get too much grief. I usually get grief when I wear a tie of red hat summit, but it's a different format this year. Compressed keynotes. Your keynote was great. The new normal, sometimes we call it the new abnormal <laugh>, uh, but you know, how do you feel? >>I, I, I, I feel great. First of all, you know, combination today, virtual audience in, in house audience here today. I think we're gonna see a lot of that in the future. I mean, we designed the event around that and I, I think it, I think it played pretty well. Kudos, kudos to our team. You're right. It's, it's, it's a bit more intimate even the way it was set up, but those are the conversations we like having with our customers and our partners, much more partner centric, uh, as well right now, as well. >>You know, we were talking about, you know, hybrid cloud. It was kind of, you know, it was a good marketing term. And, but now it's, it's, it's become the real thing. I've said many times the, the definition of cloud is changing. It's expanding it's no, the cloud is no longer this remote set of services, you know, somewhere up in the cloud, it's on prem connecting to a cloud across clouds, out to the edge and you need capabilities that work everywhere. And that's what red hat did. The market's just swimming toward you. >>Yeah. I mean, you look at it, you know, I was, uh, you know, if you look at it, you know, the clouds are powerful unto themselves, right? The clouds are powerful unto themselves. They're all different. Right? And that that's, I mean, hardware vendors were, were similar, but different, same thing. You need that connective tissue across, across the whole thing. I mean, as I said, in my keynote today, I remember talking to some of our CIOs and customers 10 years ago and they said, we're going 90% of our apps tomorrow to one cloud. And we knew that wasn't practical because of course the clouds are built from Linux. So we knew it was underneath the hood and, and what's happened. It's taken some time, but as they started to get into that, they started to see, well, maybe one cloud's more suited for one application than the other, these apps. You may have to keep on premise, but you know, what really exploded at the, the, the hybrid thing, the edge. Now they're putting things at the edge, the GM announcement tell you, I know you're gonna talk to Francis. Yeah, yeah. Later. I mean, that's, that's a mini data center in, in every cloud, but that's still under the purview of the CIO, you know? So, so, so that's what hybrid's all about is tying all those pieces together, cuz it got more powerful, but it also more complex. >>You mentioned being the connective tissue, but we don't hear as much talk about multi-cloud seems to me, as we used to this conference has been all about hybrid cloud. You don't really talk about multi-cloud. How important is that to the red hat strategy, being that consistent layer? >>It's probably my mistake or our mistake because multi's more prevalent and more important than just hybrid alone. I mean, hybrid hybrid started from on-premise to one part to any one particular cloud. That was the, the first thought of hybrid. But as I said, as, as, as um, some of the cloud providers became so big, um, every, every CIO I talked to, whether they know whether they know it or not most do are in a multi environment for a whole bunch of reasons, right. You know, one cloud provider might be better in a different part of the world. And another one cloud provider might have a better service than another. Some just don't like to be stuck to one it's it's really hybrid multi. We should, we should train ourselves to every time we say hybrid, say multi, because that's really, that's really what it is. It, I think that happened overnight with, with Microsoft, you know, with Microsoft they've, they've, they've really grown over the last few years, so has Amazon for that matter. But Microsoft really coming up is what really made it a, a high, a multi world. >>Microsoft's remarkable what, what they're doing. But I, I, I have a different thinking on this. I, I heard Chuck Whitten last week at, at the Dell conference he used, he said used the phrase a multicloud, uh, by default versus multi-cloud by design. And I thought that was pretty interesting because I've said that multi-cloud is largely multi-vendor, you know? And so hybrid has implications, right? We, we bring and a shesh came up with a new term today. Metacloud I use Supercloud I like Metacloud better because something's happening, Paul. It feels like there's this layer abstraction layer that the underlying complexity is hidden. Think about OpenShift. Yeah. I could buy, I could get OpenShift for free. Yeah. I mean, I could, and I could cobble together and stitch together at 13, 15 dozens of different services and replicate, but I don't, I don't want that complexity. I want you to hide that complexity. I want, I'd rather spend money on your R and D than my engineering. So something's changing. It feels like >>You buy that. I totally buy that. I mean, you know, I, I, I'm gonna try to not make this sound like a marketing thing because it's not, not fair enough. Right. I mean, I'm engineer at heart, you know that, so, >>Okay. >>I really look to what we're trying to do is we're building a hybrid multi cloud. I mean that we, I look at us as a cloud provider spanning the hybrid multi all the way out to the edge world, but we don't have the data centers in the back. Like the cloud providers do in and by that is you're seeing our products being consumed more like cloud services because that's what our customers are demanding. Our, our products now can be bought out of the various marketplaces, et cetera. You're seeing different business models from us. So, uh, you're seeing, uh, committed spend, for example, like the cloud providers where a customer will buy so much up front and sort of just work it down. You're seeing different models on how they're consumed, consumption, based pricing. These, these are all things that came from the cloud providers and customers buying like that. >>They now want that across their entire environment. They don't wanna buy differently on premise or in one cloud and they don't wanna develop differently. They don't wanna operate differently. They don't wanna have to secure it differently. Security's the biggest thing with, with our, with our customers, because hybrid's powerful, but you no longer have the, you know, your security per perimeter, no longer the walls of your data center. You know, you're, you're responsible as a CIO. You're responsible for every app. Yeah. No matter where it's running, if that's the break in point, you're responsible for that. So that's why we've done things like, you know, we cried stack rocks. We've, we've built it into the container Kubernetes platform that spans those various footprints because you no longer can just do perimeter security because the perimeter is, is very, very, very large right now >>Diffuse. One of the thing on the multi-cloud hyper skills, I, I, red hat's never been defensive about public cloud. You, I think you look at the a hundred billion dollars a year in CapEx spend that's a gift to the industry. Not only the entire it industry, but, but the financial services companies and healthcare companies, they can build their own hybrid clouds. Metacloud super clouds taking advantage of that, but they still need that connective tissue. And that's where >>We products come in. We welcome our customers to go to, to the public cloud. Um, uh, look, it's it's. I said a long time ago, we said a long time it was gonna be a hybrid. Well, I should have said multi anybody said hybrid, then it's gonna be a hybrid world. It is. And it doesn't matter if it's a 20, 80, 80, 20, 40, 60, 60, 40. It's not gonna be a hundred percent anywhere. Yeah. And, and so in that, in that definition, it's a hybrid multi world. >>I wanna change the tune a little bit because I've been covering IBM for 40 years and seen a lot of acquisitions and see how they work. And usually it follows the same path. There's a commitment to leaving the acquire company alone. And then over time that fades, the company just becomes absorbed. Same thing with red hat. It seems like they're very much committed to, to, to leaving you alone. At least they said that upon the acquisition, have they followed through on that promise? >>I have to tell you IBM has followed through on every commitment they've made, made to us. I mean, I, I owe it, I owe a lot of it to Arvin. Um, he was the architect of the deal, right. Um, we've known each other for a long time. Um, he's a great guy. Um, he, uh, he, he believes in it. It's not, he's not just doing it that way because he thinks, um, something bad will happen if he doesn't, he's doing it that way. Cuz he believes in that our ecosystem is what made us. I mean, I mean, even here it's about the partners in the ecosystem. If you look at what made REL people think what made red hat as a company was support, right. Support's really important. Small piece of the value proposition life cycle supports certainly their life cycle a 10 year life cycle just came out of a, a, a customer conference asking about the life cycle and could we extend it to 15 years? You know? Um, the ecosystem is probably the most important part of, of, of, of the, of the overall value proposition. And Arvin knows in IBM knows that, you know, we have to be neutral to be able to do everything the same for all of our ecosystem partners. Some that are IBM's competitors, even. So, >>So we were noticing this morning, I mean, aside from a brief mention of power PC and the IBM logo during, at one point, there was no mention of IBM during the keynote sessions this morning. Is that intentional? Or is that just >>No, no, it it's, it's not intentional. I mean, I think that's part of, we have our strategy to drive and we're, we're driving our, our strategy. We, we, we IBM great partner. We look at them as a partner just as we do our, our many other partners and we won't, you know, we wouldn't, we wouldn't do something with our products, um, for I with IBM that we wouldn't offer to our, our entire ecosystem. >>But there is a difference now, right? I don't know these numbers. Exactly. You would know though, but, but pre 2019 acquisition red hat was just, I think north of 3 billion in revenue growing at maybe 12% a year. Something like that, AR I mean, we hear on the earnings calls, 21% growth. I think he's publicly said you're north of 5 billion or now I don't know how much of that consulting gets thrown in. IBM likes to, you know, IBM math, but still it's a much bigger business. And, and I wonder if you could share with us, obviously you can't dig into the numbers, but have you hired more people? I would imagine. I mean, sure. Like what's been different from that standpoint in terms of the accelerant to your >>Business. Yeah. We've been on the same hiring cycle percentage wise as, as we, we always were. I mean, I think the best way to characterize the relationship and where they've helped is, um, Arvin, Arvin will say, IBM can be opinionated on red hat, but not the other way around <laugh>. So, so what that, what that means is they had a lot of, they had, they had a container based Linux platform. Yeah, right, right. They, they had all their, they were their way of moving to the cloud was that when we came in, they actually stopped that. And they standardized on OpenShift across all of their products. We're now the vehicle that brings the blue software products to the hybrid cloud. We are that vehicle that does it. So I think that's, that's how, that's how they, they look about it. I mean, I know, I mean in IBM consulting, I know, I know they have a great relationship with Microsoft of course. >>Right. And so, so that's, that's how to really look at it. They they're opinionated on us where we not the other way around, but that, but they're a great partner. And even if we're at two separate companies, we'd do be doing all the same things we're doing with them. Now, what they do do for us can do for us is they open a lot of doors in many cases. I mean, IBM's been around for over a hundred years. So in many cases, they're in, in, in the C-suite, we, we may be in the C suite, but we may be one layer down, one, two layers down or something. They, they can, they help us get access. And I think that's been a, a part of the growth as well as is them talking into their, into, into their >>Constituents. Their consulting's one of the FA if not the fastest growing part of their business. So that's kind of the tip of the spear for application modernization, but enough on IBM you said something in your keynote. That was really interesting to me. You said, you, you, you didn't use the word hardware Renaissance, but that my interpretation was you're expecting the next, you know, several years to be a hardware Renaissance. We, we certainly have done relationships with arm. You mentioned Nvidia and Intel. Of course, you've had relationships with Intel for a long time. And we're seeing just the spate of new hardware developments, you know, does hardware matter? I'll ask you, >>Oh, oh, I mean the edge, as I said, you're gonna see hardware innovation out in the edge, software innovation as well. You know, the interesting part about the edge is that, you know, obviously remade red hat. What we did with REL was we did a lot of engineering work to make every hardware architecture when, when it was, when, when the world was just standalone servers, we made every hardware architecture just work out of the box. Right? And we did that in such, because with an open source development model. So embedded in our psyche, in our development processes is working upstream, bringing it downstream 10 years, support all of that kind of thing. So we lit up all that hardware. Now we go out to the edge, it's a whole new, different set of hardware innovation out at the edge. We know how to do that. >>We know how to, we know how to make hardware, innovation safe for the customer. And so we're bringing full circle and you have containers embedded in, in Linux and REL right now as well. So we're actually with the edge, bringing it all full circle back to what we've been doing for 20 plus years. Um, on, on the hardware side, even as a big part of the world, goes to containers and hybrid in, in multi-cloud. So that's why we're so excited about, about, about the edge, you know, opportunity here. That's, that's a big part of where hybrid's going. >>And when you guys talk about edge, I mean, I, I know a lot of companies will talk about edge in the context of your retail location. Okay. That's fine. That's cool. That's edge or telco that that's edge. But when you talk about, um, an in vehicle operating system, right. You know, that's to me the far edge, and that's where it gets really interesting, massive volumes, different architectures, both hardware and software. And a lot of the data may stay. Maybe it doesn't even get persisted. May maybe some comes back to the club, but that's a new >>Ballgame. Well, think about it, right? I mean, you, if you listen, I think you, right. My talk this morning, how many changes are made in the Linux kernel? Right? You're running in a car now, right? From a safety perspective. You wanna update that? I mean, look, Francis talked about it. You'll talk to Francis later as well. I mean, you know, how many, how many in, in your iPhone world Francis talked about this this morning, you know, they can, they can bring you a whole new world with software updates, the same in the car, but you have to do it in such a way that you still stay with the safety protocols. You're able to back things out, things like that. So it's open source, but getting raw upstream, open source and managing itself yourself, I just, I'm sorry. It takes a lot of experience to be able to be able to do those kinds of things. So it's secure, that's insecure. And that's what that's, what's exciting about it. You look at E the telco world look where the telco world came from in the telco world. It was a hardware stack from the hardware firmware operating system, every service, whether it was 9 1, 1 or 4, 1, 1 was its own stack. Yep. In the 4g, 3g, >>4g >>Virtualized. Now, now it's all software. Yeah. Now it's all software all the way out to the cell tower. So now, so, so now you see vendors out there, right? As an application, as a container based application, running out, running in the base of a cell tower, >>Cell tower is gonna be a little mini data >>Center. Yeah, exactly. Because we're in our time here asking quickly, because you've been at red hat a long time. You, you, you, uh, architected a lot of the reason they're successful is, is your responsibility. A lot of companies have tried to duplicate the red hat model, the, the service and support model. Nobody has succeeded. Do you think anybody ever will or will red hat continue to be a unicorn in that respect? >>No, I, I, I think, I think it will. I think open source is making it into all different parts of technology. Now I have to tell you the, the reason why we were able to do it is we stayed. We stayed true to our roots. We made a decision a long time ago that we weren't gonna put a line, say everything below the line was open and above the line was closed. Sometimes it's hard sometimes to get a differentiation with the competition, it can be hard, but we've stayed true to that. And I, to this day, I think that's the thing that's made us is never a confusion on if it's open or not. So that forces us to build our business models around that as well. But >>Do you have a differentiated strategy? Talk about that. What's your what's your differentiation >>Are, are, well, I mean, with the cloud, a differentiation is that common cloud platform across I differentiate strategy from an open source perspective is to, to sort make open source consumable. And, and it's even more important now because as Linux Linux is the base of everything, there's not enough skills out there. So even, even a container platform like open source op like OpenShift, could you build your own? Certainly. Could you keep it updated? Could you keep it updated without breaking all the applications on top? Do you have an ecosystem around it? It's all of those things. It was, it was the support, the, the, the hardening the 10 year to predictability the ecosystem. That was, that was, that is the secret. I mean, we even put the secret out as open. >>Yeah, <laugh> right. Free, like a puppy, as they say. All right, Paul, thanks so much for coming back in the cubes. Great to see you face to face. Nice to see you guys get it. All right. Keep it right there. Dave Valante for Paul Gill, you're watching the cubes coverage of red hat summit, 2022 from Boston. Be right back.

from the cube studios in palo alto in boston bringing you data-driven insights from the cube and etr this is breaking analysis with dave vellante you know we've often said that the next 10 years in cloud computing won't be like the last ten cloud has firmly planted its footprint on the other side of the chasm with the momentum of the entire multi-trillion dollar tech business behind it both sellers and buyers are leaning in by adopting cloud technologies and many are building their own value layers on top of cloud in the coming years we expect innovation will continue to coalesce around the three big u.s clouds plus alibaba in apac with the ecosystem building value on top of the hardware saw tooling provided by the hyperscalers now importantly we don't see this as a race to the bottom rather our expectation is that the large public cloud players will continue to take cost out of their platforms through innovation automation and integration while other cloud providers and the ecosystem including traditional companies that buy it mine opportunities in their respective markets as matt baker of dell is fond of saying this is not a zero sum game welcome to this week's wikibon cube insights powered by etr in this breaking analysis we'll update you on our latest projections in the cloud market we'll share some new etr survey data with some surprising nuggets and drill into this the important cloud database landscape first we want to take a look at what people are talking about in cloud and what's been in the recent news with the exception of alibaba all the large cloud players have reported earnings google continues to focus on growth at the expense of its profitability google reported that it's cloud business which includes applications like google workspace grew 45 percent to five and a half billion dollars but it had an operating loss of 890 billion now since thomas curion joined google to run its cloud business google has increased head count in its cloud business from 25 000 25 000 people now it's up to 40 000 in an effort to catch up to the two leaders but playing catch up is expensive now to put this into perspective let's go back to aws's revenue in q1 2018 when the company did 5.4 billion so almost exactly the same size as google's current total cloud business and aws is growing faster at the time at 49 don't forget google includes in its cloud numbers a big chunk of high margin software aws at the time had an operating profit of 1.4 billion that quarter around 26 of its revenues so it was a highly profitable business about as profitable as cisco's overall business which again is a great business this is what happens when you're number three and didn't get your head out of your ads fast enough now in fairness google still gets high marks on the quality of its technology according to corey quinn of the duck bill group amazon and google cloud are what he called neck and neck with regard to reliability with microsoft azure trailing because of significant disruptions in the past these comments were made last week in a bloomberg article despite some recent high-profile outages on aws not surprisingly a microsoft spokesperson said that the company's cloud offers industry-leading reliability and that gives customers payment credits after some outages thank you turning to microsoft and cloud news microsoft's overall cloud business surpassed 22 billion in the december quarter up 32 percent year on year like google microsoft includes application software and sas offerings in its cloud numbers and gives little nuggets of guidance on its azure infrastructure as a service business by the way we estimate that azure comprises about 45 percent of microsoft's overall cloud business which we think hit a 40 billion run rate last quarter microsoft guided in its earning call that recent declines in the azure growth rates will reverse in q1 and that implies sequential growth for azure and finally it was announced that the ftc not the doj will review microsoft's announced 75 billion acquisition of activision blizzard it appears ftc chair lena khan wants to take this one on herself she of course has been very outspoken about the power of big tech companies and in recent a recent cnbc interview suggested that the u.s government's actions were a meaningful contributor back then to curbing microsoft's power in the 90s i personally found that dubious just ask netscape wordperfect novell lotus and spc the maker of harvard presentation graphics how effective the government was in curbing microsoft power generally my take is that the u s government has had a dismal record regulating tech companies most notably ibm and microsoft and it was market forces company hubris complacency and self-inflicted wounds not government intervention these were far more effective than the government now of course if companies are breaking the law they should be punished but the u.s government hasn't been very productive in its actions and the unintended consequences of regulation could be detrimental to the u.s competitiveness in the race with china but i digress lastly in the news amazon announced earnings thursday and the company's value increased by 191 billion dollars on friday that's a record valuation gain for u.s stocks aws amazon's profit engine grew 40 percent year on year for the quarter it closed the year at 62 billion dollars in revenue and at a 71 billion dollar revenue run rate aws is now larger than ibm which without kindrel is at a 67 billion dollar run rate just for context ibm's revenue in 2011 was 107 billion dollars now there's a conversation going on in the media and social that in order to continue this growth and compete with microsoft that aws has to get into the sas business and offer applications we don't think that's the right strategy for amp from for amazon in the near future rather we see them enabling developers to compete in that business finally amazon disclosed that 48 of its top 50 customers are using graviton 2 instances why is this important because aws is well ahead of the competition in custom silicon chips is and is on a price performance curve that is far better than alternatives especially those based on x86 this is one of the reasons why we think this business is not a race to the bottom aws is being followed by google microsoft and alibaba in terms of developing custom silicon and will continue to drive down their internal cost structures and deliver price performance equal to or better than the historical moore's law curves so that's the recent news for the big u.s cloud providers let's now take a look at how the year ended for the big four hyperscalers and look ahead to next year here's a table we've shown this view before it shows the revenue estimates for worldwide is and paths generated by aws microsoft alibaba and google now remember amazon and alibaba they share clean eye ass figures whereas microsoft and alphabet only give us these nuggets that we have to interpret and we correlate those tidbits with other data that we gather we're one of the few outlets that actually attempts to make these apples to apples comparisons there's a company called synergy research there's another firm that does this but i really can't map to their numbers their gcp figures look far too high and azure appears somewhat overestimated and they do include other stuff like hosted private cloud services but it's another data point that you can use okay back to the table we've slightly adjusted our gcp figures down based on interpreting some of alphabet's statements and other survey data only alibaba has yet to announce earnings so we'll stick to a 2021 market size of about 120 billion dollars that's a 41 growth rate relative to 2020 and we expect that figure to increase by 38 percent to 166 billion in 2022 now we'll discuss this a bit later but these four companies have created an opportunity for the ecosystem to build what we're calling super clouds on top of this infrastructure and we're seeing it happen it was increasingly obvious at aws re invent last year and we feel it will pick up momentum in the coming months and years a little bit more on that later now here's a graphical view of the quarterly revenue shares for these four companies notice that aws has reversed its share erosion and is trending up slightly aws has accelerated its growth rate four quarters in a row now it accounted for 52 percent of the big four hyperscaler revenue last year and that figure was nearly 54 in the fourth quarter azure finished the year with 32 percent of the hyper scale revenue in 2021 which dropped to 30 percent in q4 and you can see gcp and alibaba they're neck and neck fighting for the bronze medal by the way in our recent 2022 predictions post we said google cloud platform would surpass alibaba this year but given the recent trimming of our numbers google's got some work to do for that prediction to be correct okay just to put a bow on the wikibon market data let's look at the quarterly growth rates and you'll see the compression trends there this data tracks quarterly revenue growth rates back to 20 q1 2019 and you can see the steady downward trajectory and the reversal that aws experienced in q1 of last year now remember microsoft guided for sequential growth and azure so that orange line should trend back up and given gcp's much smaller and big go to market investments that we talked about we'd like to see an acceleration there as well the thing about aws is just remarkable that it's able to accelerate growth at a 71 billion run rate business and alibaba you know is a bit more opaque and likely still reeling from the crackdown of the chinese government we're admittedly not as close to the china market but we'll continue to watch from afar as that steep decline in growth rate is somewhat of a concern okay let's get into the survey data from etr and to do so we're going to take some time series views on some of the select cloud platforms that are showing spending momentum in the etr data set you know etr uses a metric we talked about this a lot called net score to measure that spending velocity of products and services netscore basically asks customers are you spending more less or the same on a platform and a vendor and then it subtracts the lesses from the moors and that yields a net score this chart shows net score for five cloud platforms going back to january 2020. note in the table that the table we've inserted inside that chart shows the net score and shared n the latter metric indicates the number of mentions in the data set and all the platforms we've listed here show strong presence in the survey that red dotted line at 40 percent that indicates spending is at an elevated level and you can see azure and aws and vmware cloud on aws as well as gcp are all nicely elevated and bounding off their october figures indicating continued cloud momentum overall but the big surprise in these figures is the steady climb and the steep bounce up from oracle which came in just under the 40 mark now one quarter is not necessarily a trend but going back to january 2020 the oracle peaks keep getting higher and higher so we definitely want to keep watching this now here's a look at some of the other cloud platforms in the etr survey the chart here shows the same time series and we've now brought in some of the big hybrid players notably vmware cloud which is vcf and other on-prem solutions red hat openstack which as we've reported in the past is still popular in telcos who want to build their own cloud we're also starting to see hpe with green lake and dell with apex show up more and ibm which years ago acquired soft layer which was really essentially a bare metal hosting company and over the years ibm cobbled together its own public cloud ibm is now racing after hybrid cloud using red hat openshift as the linchpin to that strategy now what this data tells us first of all these platforms they don't have the same presence in the data set as do the previous players vmware is the one possible exception but other than vmware these players don't have the spending velocity shown in the previous chart and most are below the red line hpe and dell are interesting and notable in that they're transitioning their early private cloud businesses to dell gr sorry hpe green lake and dell apex respectively and finally after years of kind of staring at their respective navels in in cloud and milking their legacy on-prem models they're finally building out cloud-like infrastructure for their customers they're leaning into cloud and marketing it in a more sensible and attractive fashion for customers so we would expect these figures are going to bounce around for a little while for those two as they settle into a groove and we'll watch that closely now ibm is in the process of a complete do-over arvin krishna inherited three generations of leadership with a professional services mindset now in the post gerschner gerstner era both sam palmisano and ginny rometty held on far too long to ibm's service heritage and protected the past from the future they missed the cloud opportunity and they forced the acquisition of red hat to position the company for the hybrid cloud remedy tried to shrink to grow but never got there krishna is moving faster and with the kindred spin is promising mid-single-digit growth which would be a welcome change ibm is a lot of work to do and we would expect its net score figures as well to bounce around as customers transition to the future all right let's take a look at all these different players in context these are all the clouds that we just talked about in a two-dimensional view the vertical axis is net score or spending momentum and the horizontal axis is market share or presence or pervasiveness in the data set a couple of call-outs that we'd like to make here first the data confirms what we've been saying what everybody's been saying aws and microsoft stand alone with a huge presence many tens of billions of dollars in revenue yet they are both well above the 40 line and show spending momentum and they're well ahead of gcp on both dimensions second vmware while much smaller is showing legitimate momentum which correlates to its public statements alibaba the alibaba in this survey really doesn't have enough sample to make hardcore conclusions um you can see hpe and dell and ibm you know similarly they got a little bit more presence in the data set but they clearly have some work to do what you're seeing there is their transitioning their legacy install bases oracle's the big surprise look what oracle was in the january survey and how they've shot up recently now we'll see if this this holds up let's posit some possibilities as to why it really starts with the fact that oracle is the king of mission critical apps now if you haven't seen video on twitter you have to check it out it's it's hilarious we're not going to run the video here but the link will be in our post but i'll give you the short version some really creative person they overlaid a data migration narrative on top of this one tooth guy who speaks in spanish gibberish but the setup is he's a pm he's a he's a a project manager at a bank and aws came into the bank this of course all hypothetical and said we can move all your apps to the cloud in 12 months and the guy says but wait we're running mission critical apps on exadata and aws says there's nothing special about exadata and he starts howling and slapping his knee and laughing and giggling and talking about the 23 year old senior engineer who says we're going to do this with microservices and he could tell he was he was 23 because he was wearing expensive sneakers and what a nightmare they encountered migrating their environment very very very funny video and anyone who's ever gone through a major migration of mission critical systems this is gonna hit home it's funny not funny the point is it's really painful to move off of oracle and oracle for all its haters and its faults is really the best environment for mission critical systems and customers know it so what's happening is oracle's building out the best cloud for oracle database and it has a lot of really profitable customers running on-prem that the company is migrating to oracle cloud infrastructure oci it's a safer bet than ripping it and putting it into somebody else's cloud that doesn't have all the specialized hardware and oracle knowledge because you can get the same integrated exadata hardware and software to run your database in the oracle cloud it's frankly an easier and much more logical migration path for a lot of customers and that's possibly what's happening here not to mention oracle jacks up the license price nearly doubles the license price if you run on other clouds so not only is oracle investing to optimize its cloud infrastructure it spends money on r d we've always talked about that really focused on mission critical applications but it's making it more cost effective by penalizing customers that run oracle elsewhere so this possibly explains why when the gartner magic quadrant for cloud databases comes out it's got oracle so well positioned you can see it there for yourself oracle's position is right there with aws and microsoft and ahead of google on the right-hand side is gartner's critical capabilities ratings for dbms and oracle leads in virtually all of the categories gartner track this is for operational dvms so it's kind of a narrow view it's like the red stack sweet spot now this graph it shows traditional transactions but gartner has oracle ahead of all vendors in stream processing operational intelligence real-time augmented transactions now you know gartner they're like old name framers and i say that lovingly so maybe they're a bit biased and they might be missing some of the emerging opportunities that for example like snowflake is pioneering but it's hard to deny that oracle for its business is making the right moves in cloud by optimizing for the red stack there's little question in our view when it comes to mission critical we think gartner's analysis is correct however there's this other really exciting landscape emerging in cloud data and we don't want it to be a blind spot snowflake calls it the data cloud jamactagani calls it data mesh others are using the term data fabric databricks calls it data lake house so so does oracle by the way and look the terminology is going to evolve and most of the action action that's happening is in the cloud quite frankly and this chart shows a select group of database and data warehouse companies and we've filtered the data for aws azure and gcp customers accounts so how are these accounts or companies that were showing how these vendors were showing doing in aws azure and gcp accounts and to make the cut you had to have a minimum of 50 mentions in the etr survey so unfortunately data bricks didn't make it just not enough presence in the data set quite quite yet but just to give you a sense snowflake is represented in this cut with 131 accounts aws 240 google 108 microsoft 407 huge [ __ ] 117 cloudera 52 just made the cut ibm 92 and oracle 208. again these are shared accounts filtered by customers running aws azure or gcp the chart shows a net score lime green is new ads forest green is spending more gray is flat spending the pink is spending less and the bright red is defection again you subtract the red from the green and you get net score and you can see that snowflake as we reported last week is tops in the data set with a net score in the 80s and virtually no red and even by the way single digit flat spend aws google and microsoft are all prominent in the data set as is [ __ ] and snowflake as i just mentioned and they're all elevated over the 40 mark cloudera yeah what can we say once they were a high flyer they're really not in the news anymore with anything compelling other than they just you know took the company private so maybe they can re-emerge at some point with a stronger story i hope so because as you can see they actually have some new additions and spending momentum in the green just a lot of customers holding steady and a bit too much red but they're in the positive territory at least with uh plus 17 percent unlike ibm and oracle and this is the flip side of the coin ibm they're knee-deep really chest deep in the middle of a major transformation we've said before arvind krishna's strategy and vision is at least achievable prune the portfolio i.e spin out kindrel sell watson health hold serve with the mainframe and deal with those product cycles shift the mix to software and use red hat to win the day in hybrid red hat is working for ibm's growing well into the double digits unfortunately it's not showing up in this chart with little database momentum in aws azure and gcp accounts zero new ads not enough acceleration and spending a big gray middle in nearly a quarter of the base in the red ibm's data and ai business only grew three percent this last quarter and the word database wasn't even mentioned once on ibm's earnings call this has to be a concern as you can see how important database is to aws microsoft google and the momentum it's giving companies like snowflake and [ __ ] and others which brings us to oracle with a net score of minus 12. so how do you square the momentum in oracle cloud spending and the strong ratings and databases from gartner with this picture good question and i would say the following first look at the profile people aren't adding oracle new a large portion of the base 25 is reducing spend by 6 or worse and there's a decent percentage of the base migrating off oracle with a big fat middle that's flat and this accounts for the poor net score overall but what etr doesn't track is how much is being spent rather it's an account based model and oracle is heavily weighted toward big spenders running mission critical applications and databases oracle's non-gaap operating margins are comparable to ibm's gross margins on a percentage basis so a very profitable company with a big license and maintenance in stall basin oracle has focused its r d investments into cloud erp database automation they've got vertical sas and they've got this integrated hardware and software story and this drives differentiation for the company but as you can see in this chart it has a legacy install base that is constantly trying to minimize its license costs okay here's a little bit of different view on the same data we expand the picture with the two dimensions of net score on the y-axis and market share or pervasiveness on the horizontal axis and the table insert is how the data gets plotted y and x respectively not much to add here other than to say the picture continues to look strong for those companies above the 40 line that are focused and their focus and have figured out a clear cloud strategy and aren't necessarily dealing with a big install base the exception of course is is microsoft and the ones below the line definitely have parts of their portfolio which have solid momentum but they're fighting the inertia of a large install base that moves very slowly again microsoft had the advantage of really azure and migrating those customers very quickly okay so let's wrap it up starting with the big three cloud players aws is accelerating and innovating great example is custom silicon with nitro and graviton and other chips that will help the company address concerns related to the race to the bottom it's not a race to zero aws we believe will let its developers go after the sas business and for the most part aws will offer solutions that address large vertical markets think call centers the edge remains a wild card for aws and all the cloud players really aws believes that in the fullness of time all workloads will run in the public cloud now it's hard for us to imagine the tesla autonomous vehicles running in the public cloud but maybe aws will redefine what it means by its cloud microsoft well they're everywhere and they're expanding further now into gaming and the metaverse when he became ceo in 2014 many people said that satya should ditch xbox just as an aside the joke among many oracle employees at the time was that safra katz would buy her kids and her nieces and her nephews and her kids friends everybody xbox game consoles for the holidays because microsoft lost money for everyone that they shipped well nadella has stuck with it and he sees an opportunity to expand through online gaming communities one of his first deals as ceo was minecraft now the acquisition of activision will make microsoft the world's number three gaming company by revenue behind only 10 cent and sony all this will be powered by azure and drive more compute storage ai and tooling now google for its part is battling to stay relevant in the conversation luckily it can afford the massive losses it endures in cloud because the company's advertising business is so profitable don't expect as many have speculated that google is going to bail on cloud that would be a huge mistake as the market is more than large enough for three players which brings us to the rest of the pack cloud ecosystems generally and aws specifically are exploding the idea of super cloud that is a layer of value that spans multiple clouds hides the underlying complexity and brings new value that the cloud players aren't delivering that's starting to bubble to the top and legacy players are staying close to their customers and fighting to keep them spending and it's working dell hpe cisco and smaller predominantly on-plan prem players like pure storage they continue to do pretty well they're just not as sexy as the big cloud players the real interesting activity it's really happening in the ecosystem of companies and firms within industries that are transforming to create their own digital businesses virtually all of them are running a portion of their offerings on the public cloud but often connecting to on-premises workloads and data think goldman sachs making that work and creating a great experience across all environments is a big opportunity and we're seeing it form right before our eyes don't miss it okay that's it for now thanks to my colleague stephanie chan who helped research this week's topics remember these episodes are all available as podcasts wherever you listen just search breaking analysis podcast check out etr's website at etr dot ai and also we publish a full report every week on wikibon.com and siliconangle.com you can get in touch with me email me at david.velante siliconangle.com you can dm me at divalante or comment on my linkedin post this is dave vellante for the cube insights powered by etr have a great week stay safe be well and we'll see you next time [Music] you

from the cube studios in palo alto in boston bringing you data-driven insights from the cube and etr this is breaking analysis with dave vellante cloud repatriation is a term often used by technology companies the ones that don't operate a public cloud the marketing narrative most typically implies that customers have moved work to the public cloud and for a variety of reasons expense performance security etc are disillusioned with the cloud and as a result are repatriating workloads back to their safe comfy and cost-effective on-premises data center while we have no doubt this does sometimes happen the data suggests that this is a single digit de minimis phenomenon hello and welcome to this week's wikibon cube insights powered by etr some have written about the repatriation myth but in this breaking analysis we'll share hard data that we feel debunks the narrative and is currently being promoted by some we'll also take this opportunity to do our quarterly cloud revenue update and share with you our latest figures for the big four cloud vendors let's start by acknowledging that the definition of cloud is absolutely evolving and in this sense much of the vendor marketing is valid no longer is cloud just a distant set of remote services that lives up there in the cloud the cloud is increasingly becoming a ubiquitous sensing thinking acting set of resources that touches nearly every aspect of our lives the cloud is coming on prem and work is being done to connect clouds to each other and the cloud is extending to the near and far edge there's little question about that today's cloud is not just compute storage connectivity and spare capacity but increasingly it's a variety of services to analyze data and predict slash anticipate changes monitor and interpret streams of information apply machine intelligence to data to optimize business outcomes it's tooling to share data protect data visualize data and bring data to life supporting a whole new set of innovative applications notice there's a theme there data increasingly the cloud is where the high value data lives from a variety of sources and it's where organizations go to mine it because the cloud vendors have the best platforms for data and this is part of why the repatriation narrative is somewhat dubious actually a lot dubious because the volume of data in the cloud is growing at rates much faster than data on prem at least by a couple thousand basis points by our estimates annually so cloud data is where the action is and we'll talk about the edge in a moment but a new era of application development is emerging with containers at the center the concept of write wants run anywhere allows developers to take advantage of systems that run on-prem say a transaction system and tap data from multiple sources in various locations there might be multiple clouds or at the edge or wherever and combine that with immense cheap processing power that we've discussed extensively in previous breaking analysis episodes and you see this new breed of apps emerging that's powered by ai those are hitting the market so this is not a zero-sum game the cloud vendors have given the world an infrastructure gift by spending like crazy on capex more than a hundred billion last year on capex for example for the big four and in our view the players that don't own a cloud should stop being so defensive about it they should thank the hyperscalers and lay out a vision as to how they'll create a new abstraction layer on top of the public cloud and you know that's what they're doing and they'll certainly claim to be actively working on this vision but consider the pace of play between the hyperscalers and their traditional on-prem providers we believe the innovation gap is actually widening meaning the public cloud players are accelerating their innovation lead and will 100 compete for hybrid applications they have the resources the developer affinity they're doing custom silicon and have the expertise there and the tam expansion goals that loom large so while it's not a zero-sum game and hybrid is definitely real we think the cloud vendors continue to gain share most rapidly unless the hybrid crowd can move faster now of course there's the edge and that is a wild card but it seems that again the cloud players are very well positioned to innovate with custom silicon programmable infrastructure capex build-outs at the edge and new thinking around system architectures but let's get back to the core story here and take a look at cloud adoptions you hear many marketing messages that call into question the public cloud at its recent think conference ibm ceo arvind krishna said that only about 25 of workloads had moved into the public cloud and he made the statement that you know this might surprise you implying you might think it should be much higher than that well we're not surprised by that figure especially especially if you narrow it to mission critical work which ibm does in its annual report actually we think that's probably high for mission critical work moving to the cloud we think it's a lot lower than that but regardless we think there are other ways to measure cloud adoption and this chart here from david michelle's book c seeing digital shows the adoption rates for major technological innovations over the past century and the number of years how many years it took to get to 50 percent household adoption electricity took a long time as did telephones had that infrastructure that last mile build out radios and tvs were much faster given the lower infrastructure requirements pcs actually took a long time and the web around nine years from when the mosaic browser was introduced we took a stab at estimating the pace of adoption of public cloud and and within a decade it reached 50 percent adoption in top enterprises and today that figures easily north of 90 so as we said at the top cloud adoption is actually quite strong and that adoption is driving massive growth for the public cloud now we've updated our quarterly cloud figures and want to share them with you here are our latest estimates for the big four cloud players with only alibaba left to report now remember only aws and alibaba report clean or relatively clean i ass figures so we use survey data and financial analysis to estimate the actual numbers for microsoft in google it's a subset of what they report in q121 we estimate that the big 4is and pas revenue approached 27 billion that's q121 that figure represents about 40 growth relative to q1 2020. so our trailing 12-month calculation puts us at 94 billion so we're now on roughly 108 billion dollar run rate as you may recall we've predicted that figure will surpass 115 billion by year end when it's all said and done aws it remains the leader amongst the big four with just over half of the market that's down from around 63 percent for the full year of 2018. unquestionably as we've reported microsoft they're everywhere they're ubiquitous in the market and they continue to perform very well but anecdotally customers and partners in our community continue to report to us that the quality of the aws cloud is noticeably better in terms of reliability and overall security etc but it doesn't seem to change the trajectory of the share movements as microsoft's software dominance makes doing business with azure really easy now as of this recording alibaba has yet to report but we'll update these figures once their earnings are released let's dig into the growth rates associated with these revenue figures and make some specific comments there this chart here shows the growth trajectory for each of the big four google trails the pack in revenue but it's growing faster than the others from of course a smaller base google is being very aggressive on pricing and customer acquisition to that we say good google needs to grow faster in our view and they most certainly can afford to be aggressive as we said combined the big four are growing revenue at 40 on a trailing 12-month basis and that compares with low single-digit growth for on-prem infrastructure and we just don't see this picture changing in the near to midterm like storage growth revenue from the big public cloud players is expected to outpace spending on traditional on on-prem platforms by at least 2 000 basis points for the foreseeable future now interestingly while aws is growing more slowly than the others from a much larger 54 billion run rate we actually saw sequential quarterly growth from aws and q1 which breaks a two-year trend from where aws's q1 growth rate dropped sequentially from q4 interesting now of course at aws we're watching the changing of the guards andy jassy becoming ceo of amazon adam silipsky boomeranging back to aws from a very successful stint at tableau and max peterson taking over for for aws public sector replacing teresa carlson who is now president and heading up go to market at splunk so lots of changes and we think this is actually a real positive for aws as it promotes from within we like that it taps previous amazon dna from tableau salesforce and it promotes the head of aws to run all of amazon a signal to us that amazon will dig its heels in and further resist calls to split aws from the mothership so let's dig in a little bit more to this repatriation mythbuster theme the revenue numbers don't tell the entire story so it's worth drilling down a bit more let's look at the demand side of the equation and pull in some etr survey data now to set this up we want to explain the fundamental method used by etr around its net score metric net score measures spending momentum and measures five factors as shown in this wheel chart that shows the breakdown of spending for the aws cloud it shows the percentage of customers within the platform that are either one adopting the platform new that's the lime green in this wheel chart two increasing spending by more than five percent that's the forest green three flat spending between plus or minus five percent that's the gray and four decreasing spend by six percent or more that's the pink and finally five replacing the platform that's the bright red now dare i say that the bright red is a proxy for or at least an indicator of repatriation sure why not let's say that now net score is derived by subtracting the reds from the greens anything above 40 percent we consider to be elevated aws is at 57 so very high not much sign of leaving the cloud nest there but we know it's nuanced and you can make an argument for corner cases of repatriation but come on the numbers just don't bear out that narrative let's compare aws with some of the other vendors to test this theory theory a bit more this chart lines up net score granularity for aws microsoft and google it compares that to ibm and oracle now other than aws and google these figures include the entire portfolio for each company but humor me and let's make an assumption that cloud defections are lower than the overall portfolio average because cloud has more momentum it's getting more spend spending so just stare at the red bars for a moment the three cloud players show one two and three percent replacement rates respectively but ibm and oracle while still in the single digits which is good show noticeably higher replacement rates and meaningfully lower new adoptions in the lime green as well the spend more category in the forest green is much higher within the cloud companies and the spend less in the pink is notably lower and you can see the sample sizes on the right-hand side of the chart we're talking about many hundreds over 1300 in the case of microsoft and if we look if we put hpe or dell in the charts it would say several hundred responses many hundreds it would look similar to ibm and oracle where you have higher reds a bigger fat middle of gray and lower greens it's just the way it is it shouldn't surprise anyone and it's you know these are respectable but it's just what happens with mature companies so if customers are repatriating there's little evidence here we believe what's really happening is that vendor marketing people are talking to customers who are purposefully spinning up test and dev work in the cloud with the intent of running a workload or portions of that workload on prem and when they move into production they're counting that as repatriation and they're taking liberties with the data to flood the market okay well that's fair game and all's fair in tech marketing but that's not repatriation that's experimentation or sandboxing or testing and deving it's not i'm leaving the cloud because it's too expensive or less secure or doesn't perform for me we're not saying that those things don't happen but it's certainly not visible in the numbers as a meaningful trend that should factor into buying decisions now we perfectly recognize that organizations can't just refactor their entire applications application portfolios into the cloud and migrate and we also recognize that lift and shift without a change in operating model is not the best strategy in real migrations they take a long time six months to two years i used to have these conversations all the time with my colleague stu miniman and i spoke to him recently about these trends and i wanted to see if six months at red hat and ibm had changed his thinking on all this and the answer was a clear no but he did throw a little red hat kool-aid at me saying saying that the way they think about the cloud blueprint is from a developer perspective start by containerizing apps and then the devs don't need to think about where the apps live whether they're in the cloud whether they're on prem where they're at the edge and red hat the story is brings a consistency of operations for developers and operators and admins and the security team etc or any plat on any platform but i don't have to lock in to a platform and bring that everywhere with me i can work with anyone's platform so that's a very strong story there and it's how arvin krishna plans to win what he calls the architectural battle for hybrid cloud okay so let's take a take a look at how the big cloud vendors stack up with the not so big cloud platforms and all those in between this chart shows one of our favorite views plotting net score or spending velocity on the vertical axis and market share or pervasiveness in the data set on the horizontal axis the red shaded area is what we call the hybrid zone and the dotted red lines that's where the elite live anything above 40 percent net score on the on on the vertical axis we consider elevated anything to the right of 20 on the horizontal axis implies a strong market presence and by those kpis it's really a two horse race between aws and microsoft now as we suggested google still has a lot of work to do and if they're out buying market share that's a start now you see alibaba shown in the upper left hand corner high spending momentum but from a small sample size as etr's china respondent level is obviously much lower than it is in the u.s and europe and the rest of apac now that shaded res red zone is interesting and gives credence to the other big non-cloud owning vendor narrative that is out there that is the world is hybrid and it's true over the past several quarters we've seen this hybrid zone performing well prominent examples include vmware cloud on aws vmware cloud which would include vcf vmware cloud foundation dell's cloud which is heavily based on vmware and red hat open shift which perhaps is the most interesting given its ubiquity as we were talking about before and you can see it's very highly elevated on the net score axis right there with all the public cloud guys red hat is essentially the switzerland of cloud which in our view puts it in a very strong position and then there's a pack of companies hovering around the 20 vertical axis level that are hybrid that by the way you see openstack there that's from a large telco presence in the data set but any rate you see hpe oracle and ibm ibm's position in the cloud just tells you how important red hat is to ibm and without that acquisition you know ibm would be far less interesting in this picture oracle is oracle and actually has one of the strongest hybrid stories in the industry within its own little or not so little world of the red stack hpe is also interesting and we'll see how the big green lake ii as a service pricing push will impact its momentum in the cloud category remember the definition of cloud here is whatever the customer says it is so if a cio says we're buying cloud from hpe or ibm or cisco or dell or whomever we take her or his word for it and that's how it works cloud is in the eye of the buyer so you have the cloud expanding into the domain of on-premises and the on-prem guys finally getting their proverbial acts together with hybrid that they've been talking about since 2009 but it looks like it's finally becoming real and look it's true you're not going to migrate everything into the cloud but the cloud folks are in a very strong position they are on the growth flywheel as we've shown they each have adjacent businesses that are data based disruptive and dominant whether it's in retail or search or a huge software estate they are winning the data wars as well that seems to be pretty clear to us and they have a leg up in ai and i want to look at that can we all agree that ai is important i think we can machine intelligence is being infused into every application and today much of the ai work is being done in the cloud as modeling but in the future we see ai moving to the edge in real time and real-time inferencing is a dominant workload but today again 90 of it is building models and analyzing data a lot of that work happens in the cloud so who has the momentum in ai let's take a look here's that same xy graph with the net score against market share and look who has the dominant mind share and position and spending momentum microsoft aws and google you can see in the table insert in the lower right hand side they're the only three in the data set of 1 500 responses that have more than 100 n aws and microsoft have around 200 or even more in the case of microsoft and their net scores are all elevated above the 60 percent level remember that 40 percent that red line indicates the elevation mark the high elevation mark so the hyperscalers have both the market presence and the spend momentum so we think the rich get richer now they're not alone there are several companies above the 40 line databricks is bringing ai and data science to the world of data lakes with its managed services and it's executing very well salesforce is infusing infusing ai into its platform via einstein you got sap on there anaconda is kind of the gold standard that platform for data science and you can see c3 dot ai is tom siebel's company going after enterprise ai and data robot which like c3 ai is a small sample in the data set but they're highly elevated and they're simplifying machine learning now there's ibm watson it's actually doing okay i mean sure we'd like to see it higher given that ginny rometty essentially bet ibm's future on watson but it has a decent presence in the market and a respectable net score and ibm owns a cloud so okay at least it's a player not the dominance that many had hoped for when watson beat ken jennings in jeopardy back 10 years ago but it's okay and then is oracle they're now getting into the act like it always does they want they watched they waited they invested they spent money on r d and then boom they dove into the market and made a lot of noise and acted like they invented the concept oracle is infusing ai into its database with autonomous database and autonomous data warehouse and look that's what oracle does it takes best of breed industry concepts and technologies to make its products better you got to give oracle credit it invests in real tech and it runs the most mission critical apps in the world you can hate them if you want but they smoke everybody in that game all right let's take a look at another view of the cloud players and see how they stack up and where the big spenders live in the all-important fortune 500 this chart shows net score over time within the fortune 500 aws is particularly interesting because its net score overall is in the high 50s but in this large big spender category aws net score jumps noticeably to nearly 70 percent so there's a strong indication that aws the largest player also has momentum not just with small companies and startups but where it really counts from a revenue perspective in the largest companies so we think that's a very positive sign for aws all right let's wrap the realities of cloud repatriation are clear corner cases exist but it's not a trend to take to the bank although many public cloud users may think about repatriation most will not act on it those that do are the exception not the rule and the etr data shows that test and dev in the clouds is part of the cloud operating model even if the app will ultimately live on prem that's not repatriation that's just smart development practice and not every workload is will or should live in the cloud hybrid is real we agree and the big cloud players know it and they're positioning to bring their stacks on prem and to the edge and despite the risk of a lock-in and higher potential monthly bills and concerns over control the hyperscalers are well com positioned to compete in hybrid to win hybrid the legacy vendors must embrace the cloud and build on top of those giants and add value where the clouds aren't going to or can't or won't they got to find places where they can move faster than the hyperscalers and so far they haven't shown a clear propensity to do that hey that's how we see it what do you think okay well remember these episodes are all available as podcasts wherever you listen you do a search breaking analysis podcast and please subscribe to the series check out etr's website at dot plus we also publish a full report every week on wikibon.com and siliconangle.com a lot of ways to get in touch you can email me at david.velante at siliconangle.com or dm me at dvalante on twitter comment on our linkedin post i always appreciate that this is dave vellante for the cube insights powered by etr have a great week everybody stay safe be well and we'll see you next time you

>>from >>around the globe. It's >>the cube >>with digital >>coverage of IBM >>Think 2021 >>brought to you by IBM. Welcome back to the cubes coverage of IBM Think 2021 virtual, I'm john for your host of the cube. We're here virtual again in real life soon is right around the corner but we got a great guest here, Cameron art managing director at A T and T for IBM. Cameron manages the A T and T global account for IBM camera. Great to see you. Thanks for coming on the cube. >>Thank you very much, john it's great to be >>Here. Uh, can almost imagine how complicated and big and large a TNT is with respect to IBM in the history and 18 very large company. What's the relationship with I B M and A T and T over the years? How has that evolved? And what, how do you approach that role as the managing director? >>Well, it's been fascinating. Um as you said, we've got to large complex companies but also to brand names that are synonymous for innovation, whether it be in in compute or technology or communications. But the most fascinating thing is if you look back at our relationship and this is two brands that have been around for well over 100 years. Our relationship actually has some fascinating backdrop to it. My favorite is in 1924, A T and T sent a picture of thomas Watson sr over a telephone wire to IBM and thomas Watson said they sent this over the telephone. We are united in a community of interest. They want to make it easier for businesses to transact as do I. We need to work together. And since then, there has been a number of advanced advances that both of us have driven collectively and individually. And it's been a it's been a long running and treasured relationship in the IBM company. >>It's such a storied relationship on both sides. I mean, the history is just amazing. They could do a whole History Channel segment on both 18 T N I B M. Uh but together, it's kind of the better together story, as you pointed out from that example, going back to sending a picture with the phone lines, like, oh my God, that's instagram on the internet um, happening. But how are they responding to the relationship now? I'll see with cloud, um Native exploding with the ability to get more access and you're seeing a lot more things evolved, more complexity is emerging. That needs to be abstracted away. You're seeing businesses saying, hey, I can do more with less, I can connect more more access. But then that also services more potential opportunities and challenges. How are you responding with a T and T? How are they responding to that dynamic with you guys? >>Yeah, I think it's fascinating because when I originally approached this relationship and I've been doing this for 12 months now, a little over 12 months and when I originally approach it as with anything else, many times, you're trying to enter something that is quite special and make it even better. And my approach at least initially with AT and T was very much one of, we're going to provide even better service. We're going to jointly grow together in the market and strengthen each of our businesses and we're gonna work for something broader than ourselves. And I'll get into a little more of the last point later. But those first two things from an A T T response perspective, and I think this is a common perspective among many clients is we'll see if your actions follow your words. And so it's been a process. We've gone through to understand that I'm a champion for A T and T inside of IBM and those interests that we share individually and collectively will be represented at the highest levels. And we will mature this relationship into one of not just kind of supply chain partners because we're very complementary to each other, but more ecosystem partners and my belief in my core. And you see this much with many of the business strategies that are out there. The ecosystem strategy, this sum is greater than the parts, it's not a zero sum game is something that's absolutely blooming in the market. >>Yeah, that ecosystem message is one of the things that's resonating and coming clearly out of IBM think 2021 this year and in the industry is seeing the success of network effects, ecosystem changes is the constant that's happening. Certainly the pandemic and now coming out of it, people want to have a growth strategy that's gonna be relevant, current and impactful. And you you pointed that out growth with each other is interesting. And you you shared some perspective on this just recently with an example of what is underway there where you heading with that? I mean talk more about this growth with each other because that really is an ecosystem dynamic. What is underway and where are you heading? >>It's a fascinating ecosystem dynamic and it's something that we've adopted wholeheartedly within AT and T in terms of not only how we work. So there are very basic examples examples like we, rather than answering our PS and responding to uh to requirements, we're co creating with our clients, we have multiple cloud garages going with a T and T. Where we identify outcomes that we believe could be possible and then we show and allow the client to experience the outcome of that rather than a power point slides. So there's this kind of base of how do you work with each other? But then much more broadly in the market, it didn't take long for us to realize that, you know, the addressable market, if if I were selling A T and T, everything I could ever sell them and at and T was selling IBM everything they could ever sell us. The addressable market is, let's say $10 billion. But the moment at which we pointed ourselves outside to the external market, we realize that that market opportunity expands by a factor of 20 or by a factor of 50, we have the opportunity to create unique value together. And I think that kind of comes from the core of how we work together. >>I'm also intrigued by your comments about working together for a greater purpose. You said you'd address that later. What do you mean by that? I mean that's a little bit very higher purpose. Um North Star and as you mentioned, you know, working together in the ecosystem that kind of seems tactical and strategic as well. But what's this greater purpose? What does that mean? >>Well, my belief and it's something I learned actually, as I got indoctrinated into the work that 18 T does the work that IBM does and how we do it. But we share many common purposes in terms of what we believe on the whole, in terms of progress in society. So for example, equality in the workplace. We hosted a women's day lunch and actually multiple women stays lunch days luncheons across the United States, where we had hundreds of female leaders from both IBM and AT and T. Collaborating together talking about how tips and tricks for how they continue to advance in the workplace. Another example is in equality and diversity and inclusion. Both A T and T and IBM have a strong commitment and if you'll see IBM just published, just published their diversity and inclusion study where we actually demonstrate here the numbers, here's our targets, here's where we want to get 18 T has exactly that same belief. Finally, in stem education for educating our future leaders in science and technology, engineering and math. Both 18 T and IBM for our future, need those skills showing up in the marketplace and Corey Anthony is just a quick spot for any of you would think cory cory Anthony who see it diversity and development Officer at AT and T is going to give a great presentation on A. T. N. T. S work in stem for younger generations. So there are many things that are, I would say societal on a broader purpose statement that we share a belief in together, >>that's awesome people and also people want to work on a team that's mission driven, has impact beyond just the profit and loss me, I love capitalism personally myself, I'm an entrepreneur but been there done that, but we're living in a cultural shift. Now we're starting to see a remote work. You're starting to see virtual teams, new use cases that have different expectations and experiences um, in the work place and also at home. So you know, with mobile that could be on the side of the soccer fields or you know, skiing or running or jogging and take a message to pull over to a chat, jump into an audio chat, listen to a podcast, engage. So we're all tethered now, this is exchanging the experiences and this is going to change the game for how you work together. >>100%. And by the way, we're all teller tethered hopefully through a T and T mobile connectivity devices, it was kind of amusing how much that has become a part of our lives and the core value, one of the core value propositions of AT and T is obviously connecting businesses to each other, but also consumers through their mobile brand, but also then to entertainment. I will say when I was in Augusta at the Masters, you know, people that have been there know that you're not allowed to have cell phones. It was amazing just in conversations how often whoever was I was having a conversation with and myself would say, well I'd like to look that up, hold on, can I get that statistic and and we we realized we're missing a big part of our of our lives in terms of communication. But those requirements of connecting people in new ways and in their homes were remotely actually only reinforce this shared value proposition of when you have the technology and you have it securely between our company IBM and A T and T. We play a massive part in that and it's something I'm quite proud of. >>You guys have a really interesting position there with the history of with the relationship and as you pointed out, A T and T has to be in the forefront of cutting edge user experience technology bringing. I mean, they are the edge. I mean they ultimately from base station down to the device to the person to the account you're talking about a real edge there, that's a person's consumer. Um They got to provide these new services. So I gotta ask you, you mentioned at the top of this interview that your goal is to provide even better service to a T and T. A pretty big pressure point for IBM. You know, you gotta deliver step up and their expectations must be high. Can you take us through perspectives on that kind of even better service when you've got a client that's on the cutting edge of having to deliver new kinds of things like better notifications. Smarter devices, Smarter software, more fault tolerant, highly available services. These are things that, you know, there's a lot of pressure take us through that what's it like? >>There is a lot of pressure, but there's a lot of consistency in terms of expectations and it's something that both of us understand very well and I would argue that it's probably the reason we work so well together, Both 18 T and IBM for years uh namely 50 hundreds of years have understood that if we're transacting for business, were transaction transacting on something that has to get done so on both sides of the equation. Not only do we push the edge of what can be done technically or for business, but we also understand the expectations of the business clients that are, it works every time and it works in every way I needed to. So for us, when we work together, I think that healthy balance of uh part musician, part engineer uh comes out very, very strongly in both teams, >>camera great insight and great to talk to you. I love to get the perspective on, you know, the kind of challenges and opportunities that you're um seizing at IBM with A T and T. Again, the history is amazing. Um the impact of the industry at both levels you mentioned Tom Watson senior than you got Junior. That in that generation just carries forward. You got that vibe back now with hybrid cloud. Arvin loves clouds. So, you know, you got a lot of things happening and it's really strong over at IBM and the theme this year generally is better together. So awesome, awesome work. Congratulations. >>Thank you very much. I will tell you, I don't want to I don't want to miss the opportunity to talk a bit about the future because from an A T and T and IBM perspective, we're doing a load of work around private five G or five G in general. This is something that provides an absolutely low latency, huge band with with a lot of actually characteristics from a business perspective that are manageable and it will enable. What I believe is another big wave in the technology and business industry, which is new business models very similar to that of the Internet. Originally, it allows with IBM technology and 18 T technology, they have something called multi access. Such compute these are absolutely blazing fast. Five G boxes that will be in not only businesses but universities, sports stadiums, you name that, you name it, changing the experience of how people consume technology or the benefits of technology, which I couldn't be more excited about >>awesome future ahead. Great. There's a big wave certainly away we've never seen before. Cameron, art managing Director at A T and T at IBM. Great insight. Thanks for sharing. Thanks for coming on. >>Thanks john >>Okay, Cube coverage of IBM think 2021. I'm John Ferrier. Thanks for watching. Mm. Mhm. Mhm.

>>from around the globe. >>It's the cube >>With digital coverage of IBM think 2021 brought to you by IBM. Welcome back to the cube coverage of IBM Think 2021. I'm john for your host of the cube ricardo for lenses here with me is the global managing director for IBM at Citigroup recorded. Great to see you. Thank you for coming on the cube. >>Thanks for having me. >>You're the team leader for Citigroup Managing Director um, a lot going on in the world of finance, Fintech technology, scale transformation. All this is happening. Always a leading edge indicator give us your perspective on the market right now on the, on that vertical and in general because there's so much scale is so much machine learning, so much going on, so much competitive advantages. Give us an overview of the industry, how you see them. >>So john I had the good fortune of working essentially around the world of work in europe in Asia in Australia, back here in north America. And I'll tell you what, there are some, some uh, dynamics are specific to a market. There are also a lot of common threads, right? You know, a lot of common threads right? As you know, my industry, financial services in the middle of uh great disruption right from payments to a global wealth to understand exactly. Not to reposition yourself is a, is a startup. Oftentimes looking time to be dis intimidated by many of the context. I have found that many financial institutions are very adept, a change in the way they operate a lot more nimble than they had been in the past. And they found ways to incorporate a lot of the techniques that some of the Frontex operate with. So they all have shark tanks, they all find a way to uh progress investments that they get to a point of uh, failing fast, right, more are some more adept than others. But for the most part, I'd say that everyone in the market is looking to beef up their, their core competences. >>And, you know, the financial, um, industry has never been shy of using technology ever. They've always poured it on. They always want to get more edge. Um, what's your, what is the edge now in the industry for, um, financial and, and in general, businesses who were learning how to be agile? What's the edge? >>I think the edges really finding a way to be ambidextrous, right? Because in many respects that you don't want to hold on to a franchise to what got you to a level of success. It's oftentimes it's in the case of my client is to be in good stead for more than 100 years, Right? So you don't want to let that go. But you also want to grow a new set of skills and grow competences that they need to take into the future. I have found that in many respects that many of my clients are remind me of what lookers and one said maybe 2025 years ago, our former Ceo and chairman, who said the last thing that IBM needs is a strategy. In fact, I think that many of our financial institutions that don't need a strategy, they just need the competences to innovate and executed scale and it's a lot easier said than that >>card. I want to get your perspective before we move on to some of the initiatives and work at city, which is probably compelling. But I want to get your expert opinion on a question that comes up all the time with customers and that are going post pandemic and looking at growth strategies. The idea of the unit economics of their business models tend to change with more data, more digital acceleration. Is there any observations that you could share for leaders who are looking to get that financial mindset or how the business is changing with whether it's copies or business models. Because at the end of the day, the financial upside of what we're seeing with digital is pretty significant. The economics are seem to be a real game changer on these, these conversations about acceleration, but also the results are business results are money. >>Absolutely, john, as a matter of fact, that I'd argue that while it's true that the common theme, so many and that several of our financial institutions are growing a skill in, in a, in a uh, approaching problems in a different fashion is also true that there's been a lot of redistribution of wealth across financial enterprises, Right? So it's not lost on all of us. Right. The security look at market globalization of the financial institutions, on the work. They really come all over the place with the clear winners in several sectors, site in Asia and europe as quality of North America. So what I argue is that while I think we're all tired of hearing the data is the new oil, right? It's also true that we need to find a way to finally harness the power of it. Right? And that's what I think IBM is more more adept at, right, argue that many of the common threads that we've seen across the financial institutions and back to the, to the measures of success you would indicate in a minute ago, not really around cloud, right around data and around digital transformation. Right? So our approach to cloud, for instance is unique, right? While there are a number of uh very competent hyper scholars, we've taken a different approach to it, right? We've taken our approach is more than after other highly specialized regulated workloads, right. Organ after the layer that allows you to port application seamlessly based on regulation costs and competition across multiple platforms. Right? So this hybrid concept has only been at the center of our strategy and that's the one that mama is is delivering our clients greatest value. Tell you what. I think one client told me once after hearing our hybrid story that while there were many cloud providers, there wasn't anyone that could help them out as much as I B. M. Dealing with your legacy and in all candor. I think it's fair to say that legacy is here to say well past our investment horizon. Right? So that level of self awareness, I think ended up believe forming our collaborations for years to come. >>You know, I'm a big believer and I've reported this and certainly talked to Arvin when um he was on the cube about this microservices, containers, kubernetes, these kinds of new technologies really allow for legacy to integrate well into the new modern era of computing in hybrid cloud. So totally agree. And that is really key tailwind for for innovation and these transformations. I have to ask you ricardo what's going on at city and IBM tell us take us through some things that you're working on, some of the exciting projects that you're driving. >>So the disclaimer is that I started this well three months ago, so I'll try to do my my team proud here. But what I'll tell you is that the teams you talk about are alive and well, it's sitting right? So on the cloudfront we are doing exactly that. We're focusing on on on being uh cities partner on the heavy cloud deployment, acknowledging that higher Ecologist is an ecosystem of participants, right? Technology that IBM s dominance in on prime computing. We'll go through a very different face going forward. We not only a comfortable with it, but we are trying to accelerate its deployment. Right? So you mentioned communities, you mentioned containers, Hence a redhead acquisition, right? Which has been central to the collaboration that we've uh we've established the city and we look at the broad, I'm also gonna go back to data and I will tell you that, uh, you know, uh, cities in the midst of a transformation journey of their own right. It's also the middle of a regulatory challenge. That's second to none. Right. With with the zero cc. Findings that then led to a financial remediation plan that the bank has put in place over the past two months. With that in mind we are looking to help the bank make a make a good crisis make the most of the crisis, right? And so helping, for instance, Mark Sabino, the head of Innovation City, find ways to infuse Ai into their internal Codec practices doing that. It's just smart business. The results in much better outcome at a lower cost and it's something that can scale because it's all seen before. Oftentimes our solutions have lacked the ability to scale to really keep up with them in >>ricardo. The relationship between IBM and city has been long standing. I believe. I read somewhere you're celebrating 100 year partnership. Is that true? If so. I mean, it's a huge milestone. What's the take us through the history and where this is going as a partnership? >>I've heard as a matter of fact is that as I first came on board that in fact our companies have been added for more than 100 years and someone showed me an actual document 100 years old, there was proof positive of that. So I'll tell you, I know that our firms would be added again 100 years from now. I will probably not be here to toast to it but I'm certain they will continue to collaborate and for the strong is this is my responsibility. I'll do whatever I can to help you continue to grow. We're only going to focus on three things I spoke about every cloud. Would you also want to be the partner? Is the bank transforms its operations right and infuse in it. Our Ai and process, information skills and capabilities. I think if we do that, we'll continue to collaborate and will continue to have our partnership fully rests on two pillars that is always independent, which are really innovation can trust >>great commentary, great uh an account that you're leading probably a great team behind how many people are on this team must be pretty massive and I'd love to see that document by the way, was it a memo? Was that type written was a handwritten? You know, it was a P. O. >>It was an Akron document and I get your copy. >>Uh so historic. I love those history. I love the IBM culture longstanding relationships. Final question for you. You've been in the industry for a while, you've seen many waves of innovation if you're talking to a customer, your friend or colleague and they had asked you ricardo, why is this wave so big and so important? What would you tell them, >>john I think at the heart of this transformation, the evolution, the way they should call it is not the intellectual products, the international new processes but entire no value chains that are being established by players that in many cases need need each other to coexist. This is hardly been the case in the past. I think IBM will form a great example of it, right? And so I do think that this is far more disruptive than what we have witnessed in years past and I can't wait to get get in it and my part to lead us through it >>ricardo, great insight, totally agree. This is a time of open collaboration, an ecosystem you're seeing in the ecosystem and network effect where people are integrating together in this new connected distributed economy. Global economy, thank you for coming on the cube, appreciate your >>time. Thank you so much for having me. >>Okay, Ricardo for Relenza, Global managing director for IBM at Citigroup. This is the Cube coverage of IBM think 2021. I'm John for your host. Thanks for watching. Yeah.

>>from around the globe. It's the >>cube >>With digital coverage of IBM think 2021 brought to you by IBM. Welcome back to the cube coverage of IBM Think 2021. I'm john for the host of the cube here for virtual event Cameron Siva who's here with corporate vice president with a M. D. Uh CVP and business development. Great to see you. Thanks for coming on the cube. >>Nice to be. It's an honor to be here. >>You know, love A. M. D. Love the growth, love the processors. Epic 7000 and three series was just launched. Its out in the field. Give us a quick overview of the of the of the processor, how it's doing and how it's going to help us in the data center and the edge >>for sure. No this is uh this is an exciting time for A. M. D. This is probably one of the most exciting times uh to be honest and in my 2020 plus years of uh working in sex industry, I think I've never been this excited about a new product as I am about the the third generation ethic processor that were just announced. Um So the Epic 7003, what we're calling it a series processor. It's just a fantastic product. We not only have the fastest server processor in the world with the AMG Epic 7763 but we also have the fastest CPU core so that the process of being the complete package to complete socket and then we also the fastest poor in the world with the the Epic um 72 F three for frequency. So that one runs run super fast on each core. And then we also have 64 cores in the CPU. So it's it's addressing both kind of what we call scale up and scale out. So it's overall overall just just an enormous, enormous product line that that I think um you know, we'll be we'll be amazing within within IBM IBM cloud. Um The processor itself includes 256 megabytes of L three cache, um you know, cash is super important for a variety of workloads in the large cache size. We have shown our we've seen scale in particular cloud applications, but across the board, um you know, database, uh java all sorts of things. This processor is also based on the Zen three core, which is basically 19% more instructions per cycle relative to ours, N two. So that was the prior generation, the second generation Epic Force, which is called Rome. So this this new CPU is actually quite a bit more capable. It runs also at a higher frequency with both the 64 4 and the frequency optimized device. Um and finally, we have um what we call all in features. So rather than kind of segment our product line and charge you for every little, you know, little thing you turn on or off. We actually have all in features includes, you know, really importantly security, which is becoming a big, big team and something that we're partnering with IBM very closely on um and then also things like 628 lanes of pc I E gen four, um are your faces that grew up to four terabytes so you can do these big large uh large um in memory databases. The pc I interfaces gives you lots and lots of storage capability so all in all super products um and we're super excited to be working with IBM honest. >>Well let's get into some of the details on this impact because obviously it's not just one place where these processes are going to live. You're seeing a distributed surface area core to edge um, cloud and hybrid is now in play. It's pretty much standard now. Multi cloud on the horizon. Company's gonna start realizing, okay, I gotta put this to work and I want to get more insights out of the data and civilian applications that are evolving on this. But you guys have seen some growth in the cloud with the Epic processors, what can customers expect and why our cloud providers choosing Epic processors, >>you know, a big part of this is actually the fact that I that am be um delivers upon our roadmap. So we, we kind of do what we say and say what we do and we delivered on time. Um so we actually announced I think was back in august of 2019, their second generation, Epic part and then now in March, we are now in the third generation. Very much on schedule. Very much um, intern expectations and meeting the performance that we had told the industry and told our customers that we're going to meet back then. So it's a really super important pieces that our customers are now learning to expect performance, jenin, Jenin and on time from A. M. D, which is, which is uh, I think really a big part of our success. The second thing is, I think, you know, we are, we are a leader in terms of the core density that we provide and cloud in particular really values high density. So the 64 cores is absolutely unique today in the industry and that it has the ability to be offered both in uh bare metal. Um, as we have been deployed in uh, in IBM cloud and also in virtualized type environment. So it has that ability to spend a lot of different use cases. Um and you can, you know, you can run each core uh really fast, But then also have the scale out and then be able to take advantage of all 64 cores. Each core has two threads up to 128 threads per socket. It's a super powerful uh CPU and it has a lot of value for um for the for the cloud cloud provider, they're actually about over 400 total instances by the way of A. M. D processors out there. And that's all the flavors, of course, not just that they're generation, but still it's it's starting to really proliferate. We're trying to see uh M d I think all across the cloud, >>more cores, more threads all goodness. I gotta ask you, you know, I interviewed Arvin the ceo of IBM before he was Ceo at a conference and you know, he's always been, I know him, he's always loved cloud, right? So, um, but he sees a little bit differently than just being like copying the clouds. He sees it as we see it unfolding here, I think Hybrid. Um, and so I can almost see the playbook evolving. You know, Red has an operating system, Cloud and Edge is a distributed system, it's got that vibe of a system architecture, almost got processors everywhere. Could you give us a sense of the over an overview of the work you're doing with IBM Cloud and what a M. D s role is there? And I'm curious, could you share for the folks watching too? >>For sure. For sure. By the way, IBM cloud is a fantastic partner to work with. So, so, first off you talked about about the hybrid, hybrid cloud is a really important thing for us and that's um that's an area that we are definitely focused in on. Uh but in terms of our specific joint partnerships and we do have an announcement last year. Um so it's it's it's somewhat public, but we are working together on Ai where IBM is a is an undisputed leader with Watson and some of the technologies that you guys bring there. So we're bringing together, you know, it's kind of this real hard work goodness with IBM problems and know how on the AI side. In addition, IBM is also known for um you know, really enterprise grade, yeah, security and working with some of the key sectors that need and value, reliability, security, availability, um in those areas. Uh and so I think that partnership, we have quite a bit of uh quite a strong relationship and partnership around working together on security and doing confidential computer. >>Tell us more about the confidential computing. This is a joint development agreement, is a joint venture joint development agreement. Give us more detail on this. Tell us more about this announcement with IBM cloud, an AMG confidential computing. >>So that's right. So so what uh you know, there's some key pillars to this. One of this is being able to to work together, define open standards, open architecture. Um so jointly with an IBM and also pulling in something assets in terms of red hat to be able to work together and pull together a confidential computer that can so some some key ideas here, we can work with work within a hybrid cloud. We can work within the IBM cloud and to be able to provide you with, provide, provide our joint customers are and customers with uh with unprecedented security and reliability uh in the cloud, >>what's the future of processors, I mean, what should people think when they expect to see innovation? Um Certainly data centers are evolving with core core features to work with hybrid operating model in the cloud. People are getting that edge relationship basically the data centers a large edge, but now you've got the other edges, we got industrial edges, you got consumers, people wearables, you're gonna have more and more devices big and small. Um what's the what's the road map look like? How do you describe the future of a. M. D. In in the IBM world? >>I think I think R I B M M D partnership is bright, future is bright for sure, and I think there's there's a lot of key pieces there. Uh you know, I think IBM brings a lot of value in terms of being able to take on those up earlier, upper uh layers of software and that and the full stack um so IBM strength has really been, you know, as a systems company and as a software company. Right, So combining that with the Andes Silicon, uh divided and see few devices really really is is it's a great combination, I see, you know, I see um growth in uh you know, obviously in in deploying kind of this, this scale out model where we have these very large uh large core count Cpus I see that trend continuing for sure. Uh you know, I think that that is gonna, that is sort of the way of the future that you want cloud data applications that can scale across multi multiple cores within the socket and then across clusters of Cpus with within the data center um and IBM is in a really good position to take advantage of that to go to, to to drive that within the cloud. That income combination with IBM s presence on prem uh and so that's that's where the hybrid hybrid cloud value proposition comes in um and so we actually see ourselves uh you know, playing in both sides, so we do have a very strong presence now and increasingly so on premises as well. And we we partner we were very interested in working with IBM on the on on premises uh with some of some of the key customers and then offering that hybrid connectivity onto, onto the the IBM cloud as well. >>I B M and M. D. Great partnership, great for clarifying and and sharing that insight come, I appreciate it. Thanks for for coming on the cube, I do want to ask you while I got you here. Um kind of a curveball question if you don't mind. As you see hybrid cloud developing one of the big trends is this ecosystem play right? So you're seeing connections between IBM and their and their partners being much more integrated. So cloud has been a big KPI kind of model. You connect people through a. P. I. S. There's a big trend that we're seeing and we're seeing this really in our reporting on silicon angle the rise of a cloud service provider within these ecosystems where hey, I could build on top of IBM cloud and build a great business. Um and as I do that, I might want to look at an architecture like an AMG, how does that fit into to your view as a doing business development over at A. M. D. I mean because because people are building on top of these ecosystems are building their own clouds on top of cloud, you're seeing data. Cloud, just seeing these kinds of clouds, specialty clouds. So I mean we could have a cute cloud on top of IBM maybe someday. So, so I might want to build out a whole, I might be a cloud. So that's more processors needed for you. So how do you see this enablement? Because IBM is going to want to do that, it's kind of like, I'm kind of connecting the dots here in real time, but what's your, what's your take on that? What's your reaction? >>I think, I think that's I think that's right and I think m d isn't, it isn't a pretty good position with IBM to be able to, to enable that. Um we do have some very significant osD partnerships, a lot of which that are leveraged into IBM um such as Red hat of course, but also like VM ware and Nutanix. Um this provide these always V partners provide kind of the base level infrastructure that we can then build upon and then have that have that A P I. And be able to build build um uh the the multi cloud environments that you're talking about. Um and I think that, I think that's right. I think that is that is one of the uh you know, kind of future trends that that we will see uh you know, services that are offered on top of IBM cloud that take advantage of the the capabilities of the platform that come with it. Um and you know, the bare metal offerings that that IBM offer on their cloud is also quite unique um and hyper very performance. Um and so this actually gives um I think uh the the kind of uh call the medic cloud that unique ability to kind of go in and take advantage of the M. D. Hardware at a performance level and at a um uh to take advantage of that infrastructure better than they could in another cloud environments. I think that's that's that's actually very key and very uh one of the one of the features of the IBM problems that differentiates it >>so much headroom there corns really appreciate you sharing that. I think it's a great opportunity. As I say, if you're you want to build and compete. Finally, there's no with the white space with no competition or be better than the competition. So as they say in business, thank you for coming on sharing. Great great future ahead for all builders out there. Thanks for coming on the cube. >>Thanks thank you very much. >>Okay. IBM think cube coverage here. I'm john for your host. Thanks for watching. Mm

>> Voiceover: From around the globe, it's theCUBE with digital coverage of IBM Think 2021, brought to you by IBM. >> Hello and welcome back everyone to theCUBE's coverage of IBM Think 2021 virtual. I'm John Furrier, your host of theCUBE. I'm excited to have this next guest, CUBE alumni, K.C. Choi, Corporate EVP, Executive Vice President and General Manager at Samsung Mobile the B2B/B2G Team. K.C., great to see you, how you've been? >> John, it is wonderful to see you and it's been way too long. Great to be back on theCUBE with you looking forward to our conversation and I hope you're safe. >> Yeah and same to you. Great to see you, I'm so excited. One of the things I've really admired about you and our conversations in the past is you've always had your finger on the pulse of the waves and you're always involved with some really great engineering work. And I want to dig into this now because your role is really hitting the industry for that kind of wave which is the confluence of tech, media, entertainment, every vertical, big data, IOT and with the distributed computing now called the Cloud and edge. It really sets the table for what is now going to be the preferred architecture probably for the next 20 plus years. So give us your view on how you see the changing landscape in the industry. >> Yeah, I think you covered all of the major seismic shifts that are happening here. And then as we've all experienced over the last, over a year with the COVID pandemic, that's actually accelerated a lot of the thinking around edge. We've certainly seen news cases proliferate whether it be in things such as healthcare, manufacturing's also taken I think, a real hard look at the applicability of these types of solutions. We've seen things like, for example 5G pickup in these industrial applications as the industrial companies have thought about worker safety, as they've thought about automation, as they thought about utilizing more protocols, as well as bringing these technologies and processes together in a way that will help to reinvent their particular economic base, as well as the learnings that we've seen over the last year, coming from these new safety protocols as well as the need for now with the economies is picking back up, the need for productivity, as well as greater efficiencies coming from these types of solutions. So we've seen that confluence happen. And then certainly on our end, as our network connectivity has become much stronger, lower latency, as well as the endpoint capabilities have increased dramatically over the last few years, as SOC and others have taken root, we've seen the edge, if you will, start be more extreme, in the sense that it's pushing further and further out beyond what we originally envisioned the edge to be. >> And the SOC trend actually highlights that it's not so much about Moore's law as it is more about more chips, more performance. If you look at actual performance, Dave Vellante just put out a report on this, where there's actually more performance now than ever before coming in from the combined energy and combined processing power out there. So it's super, super amazing what you can do at the edge. Before we get into the edge, I want to just clarify what is your new role there? I mean, Samsung is known for obviously the B2C with the phones and everything else, but you have a specific focus, what is your main focus there? >> Yeah, our mission's pretty straightforward. And as everyone knows, Samsung is a powerhouse consumer electronics company. We pride ourselves in obviously our position in that, but we also have a very significant role really in the business to business and in the government and financial services sector space with our mobile devices, as well as with our Knox security platform solution and device management platform. We actually provide a large portion of the security devices for governments worldwide as well as the Knox platform that is built into the majority of our, both, consumer as well as business devices that really allows for that, if you will, that next protective layer on top of the Android OS that allows for things such as, personal and professional profiles. So we produce those solutions out of my team as well as we provide really the go-to-market support, as well as the RnD support for that platform, including an area that's growing rapidly for us which is in the rugged category, which is one of the key products that we're using for some of these edge applications that we'll be talking about. >> Great, let's jump into that. What are you guys doing specifically in the edge computing space? Let's dig into it. >> Yeah, I think maybe the place to start on that is we're really reenvisioning what the edge is. And I mentioned a little earlier that with what's occurring in the performance profile and really the functional profile, what is being produced at the device level. We're talking about in the last few years, the fidelity and the capabilities are in, what I would call the computer class type functions, as well as obviously mobile devices have always been communication gateways for a number of functions, whether they be videos or photos. They're multisensory in nature. And as this has become more practical and the connective tissue has gotten there with 5G as well as all kinds of other fast low latency communications capabilities and Wi-Fi 6, UWB, included within that. What we're finding is that the use case to bring applications especially cloud native and container native applications to these devices to be augmenting the endpoint user, the frontline worker, really the knowledge worker and moving that capability further away from, if you will, an extension to cloud services as well as MEC type services, this is where we see it going. And really what we're trying to work on with IBM and with Red Hat is how do we continue to fortify this, not only from an actual processing AI/ML capability, but also equip these devices so that they can fully participate as part of a multi-hybrid cloud architecture. The endpoint is really one of the last bastions where we have not conquered bringing cloud first container native applications really to that point. And we believe the time is right because of the capabilities that are there along with, again, the connectivity that is becoming much more ubiquitous now to allow for that type of architecture to exist. And we're starting to call this the intelligent human edge as well. We think that the applications that we'll see for this are ones that will make the human operator more productive, safer, certainly more efficient. And we think that this augmentation of that frontline worker is an area that we are, put our stakes on in terms of pioneering, just because of again, our experience in that mobility space and in that consumer space. >> That's great you brought up Red Hat and IBM. Obviously Red Hat was bought by IBM. Arvin, the CEO who I interviewed in 2019 in theCUBE at Red Hat summit, ironically, a couple months later, buys the company and a smile on his face. He likes cloud. >> K.C.: Maybe you had something to do with that, John. >> No, he wanted to, I could see he wanted to say it, but he loves the cloud. Everyone who knows Arvin knows that he's into the cloud in a new way. And this edge piece that you mentioned that you're using Red Hat and IBM for hybrid, this is what the new operating system is going to look like. It's a completely distributed system and the edge is just part of that operating model. This is what their vision is, which I love by the way. I think that redefines what that is. Are you saying that you guys are working with Red Hat and IBM for that hybrid edge piece? How does that work? Can you take me through that? >> Yeah, that's exactly right. I mean, obviously the ecosystem is bigger than that, but IBM and Red Hat really bring the expertise really around container ecosystems, certainly the work that they have done in terms a multi hybrid cloud, certainly the work that OpenShift has brought forward in terms of, you know, multi-platform capability. We really love the concept of develop bonds run, any sort of a construct. And when you think about it, the mobile platforms specifically, you know, ours, as well as others, has really been that last baskin of areas where more of the development is on a particular platform, it's more bespoke. We think that by broaching this, you know in conjunction with IBM and Red Hat this is going to give us the ability to have these device architectures become a full voting member, if you will, of that hybrid cloud architecture and of that microservice container architecture that is becoming much more prevalent. So this is really the work that we're doing. And then obviously we're working at a vertical level to see where are the applicable use cases in places such as the design studio we have in Singapore, where with the Singaporean government we're looking at really bringing a Renaissance to industry 4.0 type applications, smart factory automation, public safety, these areas where we believe that this type of architecture can be deployed. >> That's awesome. And I totally believe that, you know the edge is still going to be pushed farther and further out, honestly, having that open standards of hybrid. So I got to ask you, on the edge just while I got you here, you know, one of the things that you see clearly as the industrial edge, it's called, factories and whatnot. You've mentioned some of those. And then you've got the human piece, which is like people have phones and wearables and other things are going to be happening. So as you start to have those end points, which are then going to be connected into a distributed network, AKA a hybrid cloud, soon to be multiple clouds. But that's the sub system within the cloud construct. The complaint has been, not complaint, but the observation has been and complaint, if you look at it that the edge is limited by power and connectivity, okay. These are like key basic concepts. How is the connectivity option? I know 5G is coming, it's here, we're seeing it being deployed. We got people saying, hey, this is our business application. Clearly got higher throughput, not as much range. Give us your take on this because this becomes important, obviously, power is battery that is driven, it's getting better and better and power is not really that much of a problem, but connectivity seems to be, what's your vision of this? >> Yeah and you know, there's a lot of ways to approach that. I will tell you on the industrial side, at least in some of the deployments and PLCs that we've been involved in over the last a year or two years, connectivity is an issue. And a lot of it has to do with the infrastructure that is available in many of these plants or factories, or points of distribution, they're not necessarily leading edge, in many cases we're dealing with what I would call sub par connectivity. It's not like an office complex where you may have state-of-the-art Wi-Fi capability or 10 gig capability or whatever it might be. So what we've found on that is it requires actually quite a bit of work, in terms of fine tuning, both, on the the network infrastructure side, whatever that might be or we've also found that on the device side, the programmability of the of the device, in terms of tuning it for whatever connective environment would be there. And we've worked with everything from, you know, Bluetooth, UWB to Wi-Fi 6 and everything in between and in many cases or multiple protocols or connectivity methods that are there. So, you know, one thing we've learned is that you can't necessarily assume that in a, especially in a factory environment that those conditions are going to allow for consistency. So you have to engineer around that, you know, in some of the things that we've done are really around making sure that we've got deployable programmability at the device as well as board dynamic network tuning capabilities that will allow for better connectivity and to handle things such as consistency. >> All right, K.C., great insight. Final question for you, why Samsung and IBM? What's the bottom line? >> Yeah, I think the bottom line is really straightforward. I mean, we've had a 30 year history of working together, you know, we've been mutual customers to each other. We do a lot of work for IBM, in regards to foundry type services and semiconductor services. And that we work very closely with them over many years on applications. So number one, there's been a natural relationship, just in the services that we provided to each other. But as we look at really the go-to-market, I mean, IBM brings so much credibility from a vertical market perspective. There's a trusted advisor type status that I think is a very profound and it's been built over many years, you know, delivering on the promises. And on our end, I think what we bring is really this cycle time that is driven by our passion in the consumer space. And when we start to apply that into more of these vertical industrial, you know, vertical sectors, I think that combination is very powerful. The services piece obviously comes into play with IBM. And then really, the Red Hat piece of this really just puts the icing on the cake with really the the market leadership in hybrid cloud and in the container native architecture, so it's just a very powerful combo and the cooperation there has been strong and we continue to look forward to delivering more through that partnership. >> K.C., great to see you, great thing to hear. You know, you got scalable infrastructure, you got modern applications, got the edge, all hybrid. Great partnership. K.C. Choi, Corporate Executive Vice President and General Manager of Samsung Mobile B2B Team. Great to see you and congratulations on your mission and it's an exciting project. Thanks for coming on theCUBE and sharing. >> Great to see you, John, take care of yourself and looking forward to seeing you again. >> Okay, this is theCUBE's coverage IBM Think 2021. I'm John Furrier, your host of theCUBE. Thanks for watching. (soft upbeat music) (melodious music)

>> Narrator: From around the globe, it's theCUBE with digital coverage of IBM Think 2021 brought to you by IBM. >> Hello everybody, welcome back to IBM Think 2021, the virtual edition. My name is Dave Vellante and I'm pleased to welcome back a long time Cube alum, Jim Whitehurst, who's the president of IBM. And I'll call him chief cultural evangelist, welcome Jim. Great to see you again. >> Great to see you, Dave. Thanks so much for having me. >> Yeah, it's really our pleasure. And I want to start off, it's just over a year as president of IBM. And I wonder, you know, when you're a little kid or, you know, early in your career, computer science class, did you ever think you'd be president of a company that was founded in 1911? I mean, amazing. I wonder if you could share what's the most important thing you've learned in your first year? >> Well, look, I mean, as you said, I would've never thought it. Yeah, I was the first kid to have an IBM PC on the block and was always into technology but never saw myself as like, you know, running a big tech company. So it is humbling. I would say that there are tons of lessons in the first year. I guess the two that strike me most is one is just related to strategy and that's, you know, Red Hat and most technology companies, we're very customer focused. But it's around whatever technology we're bringing to market where IBM has fundamentally transitioned. And kind of transformed itself over time to make sure it can meet customer needs. So it's sold off businesses, it's bought other businesses, it's created new businesses. So it really shows the kind of the focus and value on serving our customers and doing whatever it takes to do it. And that's been a fundamental kind of different strategy than most companies have had. I think one of the reasons that we've been around for over a 100 years. The second is I'm deeply into culture and I've talked a lot about the difference of running Red Hat, it's all about innovation versus Delta Airlines where I was before, which is driving efficiency. IBM is both and so really trying to think through how you run an organization that needs to run the financial systems of the world, that extraordinary reliability and drive roadmaps on things like quantum computing. At the same time be able to innovate iteratively with our customers and in open source communities. And kind of getting that balance right as a leader. It's, you're kind of doing what we did at Red Hat and what we did at Delta but kind of doing it together. And I think that stretched me as a leader and kind of taught me a lot about how we're thinking about continuing to evolve the culture at IBM. >> Now, of course, you do this leadership series, you put out things out on LinkedIn and words matter. And that's what I take away from a lot of the little short hits that you do, which I really appreciate. My stuff that I put Jim on LinkedIn, it's just, you got to invest like 15, 20 minutes. So I really appreciate the short hits. But you do that regular series and I'm curious do you do that to reach more IBM people? Are you an open source culture? You're trying to help others. And I'm curious as to sort of why that platform as opposed to sending around an internal thing an IBM. And I'm wondering if your principles and how they've evolved kind of post pandemic. >> Well, so first off, maybe that comes from Red Hat but I think IBM shares that it's if you have something really, really valuable, you want to share it. And look, when I am out talking to our customers, CEOs and some of the biggest companies in the world, honestly we rarely talk about technology 'cause other people are more detailed or deep in that. We primarily do talk about culture. And how you think about again, how do you take an organization that's been built to drive efficiency and scale on a global basis and make it able to be more nimble and more innovative? And so, and obviously, hopefully that's all with IBM and Red Hat technologies. But ultimately most of my conversations at a senior leadership level are about culture and leadership style to drive that. And so if that's valuable for CEOs of some of the world's largest companies, it's valuable to leaders kind of across all spectrums, all sizes. And so I think LinkedIn is a good way to kind of take some of those messages and make sure we were able to share those much more broadly. So certainly I spend more time talking about it inside of IBM and I spend a lot of time with our clients talking about it. But I think many of the lessons are applicable more broadly. And so why not share them? And LinkedIn's a great platform to be able to do that. >> How about you, how have your principles, how have your principles sort of changed and how have they evolved post pandemic? >> Well, I think a couple things, so one is the pandemic kind of forces you to get more precise about it. And what I mean by that is so much of leadership is about building credibility and trust and influence. And when you're seeing someone in 3D live, visual cues can kind of mean a lot in the water cooler conversations. Or who you run into in the hall can all help kind of create that level of trust. But you can't do that in 2D. As great as Zoom and other platforms are, you just can't quite do it. And so you have to be much more thoughtful in how you're creating opportunities to kind of create trust. So I'd say I've gotten more surgical in thinking about kind of what those elements of leadership are that do that. I think the second thing I've really learned at IBM again is back to this. We have to be able to do both, drive a future state in a known world as well as, I call it seek a future state in an unknown world. So driving a roadmap for quantum computing takes a number of different technologies coming together in one year, in two years, in five years. And that really does have to be pre-planned, which is very very different, that I'll call the iterative innovation approach that we use at Red Hat and open source communities and working with our clients. And we have to do both. And so as a leader you really have to understand the problem you're trying to solve and apply slightly different kind of leadership tactics against that. So when you're executing a known versus you are trying to create something in an unknown, does require different approaches and we have to do both in IBM. And I think that's the struggle a lot of companies have, every company needs to do that. If you're Delta Airlines, you don't want anybody innovating on the safety procedures before your flight. Yet you want a lot of innovation happening on your website and your mobile app. So how do you bring those together? And as a leader you can have a common set of values, but recognize you have to bring different tools to the table, depending on the context in which you're leading. And so I learned a lot more and gotten a lot crisper with that since being at IBM. >> Interesting, I mean, the pandemic, we all know it's been terrible but one of the upshots has been we had a glimpse of the future sort of shoved into a forced march of digital in 2020. And so obviously the next 10 years ain't going to be like the last 10 years. And one of the things we've been talking about is ecosystems and partnerships and the power and leverage that you can get from those. And Arvin has said, laid it out, we are returning to growth company. And so I wonder if you could talk to how partnerships and ecosystems play into that return to growth for IBM. >> Well, first off a key part of our strategy we talk about hybrid cloud and AI. It's not just about, hey, a platform that runs across all the different deployment models is convenient. It's also because innovation is coming from so many sources today. It's coming from a by-product from the web 2.0 companies, it's coming from open source. It's coming from an explosion of startups because of the amount of capital in venture capital. It's coming from traditional software companies. It's coming from our clients who are participating in open source. And so you have so many sources of innovation. Much of what we're doing is landing a platform that allows you to consume innovation safely and reliably from wherever it's coming from. So a core part of a platform by definition is the ecosystem around it. Having a platform that runs everywhere is great but if you don't have any applications that run on it who cares. And so ecosystem and partners have always been important to IBM, but for this strategy of this horizontal platform oriented strategy, it is critical to our success because much of the platform is the ecosystem. And so we've already talked about investing a billion dollars in that ecosystem to get ISVs and other partners on our platform, again, to ultimately kind of create that kind of horizontal layer where I can run anything that I want to on it and I can run that anywhere I want to. And so the two sides of that so all the innovation happening on top and making sure it runs everywhere is what really unlocks the freedom of choice. That reduces friction to innovation, which allows everybody in the ecosystem from our clients to ISVs to hardware partners to innovate more quickly. And that's what we really see as the benefit of our platform. It's not a horizontal stove pipe, come innovate in this one place. It's recognizing innovation's happening in so many places. And the only way we're going to be able to allow people to ingest that is to have a horizontal platform that everyone's participating in. Which is why partners and ecosystem are so important, not only to the success of our platform, but to the, I'd say, as a success of this next generation of computing. These horizontal fabrics that require an ecosystem kind of built around them. >> I think that's an important nuance that maybe people don't understand that yes, you have a platform. Obviously, OpenShift is a linchpin but it's an enabler for people to build other platforms. It's not the be all, end all platform that's sort of ultimately becomes another Island. And so that is a key part of the growth strategy and presumably expand your total available market. >> Oh, absolutely and so this is the key is we can talk about great IBM technologies. We're doing amazing things in security and AI and natural language processing and all these other areas. But the platform is a recognition that we're not going to do everything for everybody anymore. There's just the democratization of technology means that there is so many sources of innovation. And so first and foremost, we have to land a platform so you can consume anything from anywhere. And then of course, we'll drive our own pace of innovation both in hardware and software around that platform. But we are just a player on that platform, which we're really instantiating for really anybody to be able to reach customers or customers to reach sources of innovation. >> I know sustainability is a passion of yours, that it's obviously a hot topic right now. Oftentimes I joke tongue in cheek, Milton Friedman's rolling over in his grave with all this ESG talk. And I know you just posted recently on LinkedIn. And of course I went right down to Kavanaugh because my premise is not only is sustainability the right thing to do, it's also good business. But I wonder if you could give us your perspectives on this. >> Yeah, well, so first off, I mean, as a large global citizen as IDM I think this is an important role that we play and look, this isn't new to IBM. We came out with our first statements around environment in 1970. We put out our first report that's become our environmental impact report in 1990. We've been talking about climate since the early two thousands. So we've been involved in this for a long, long time because I do think it's important broadly. But there's also a specific role I think IBM can play beyond just our own individual actions to reduce our own footprint. Because of some of the extraordinary technologies that IBM has worked on in the years especially around semiconductors, we have just an amazing amount of technology, expertise, intellectual property around material science. And so just a couple of examples of those that relate to the environment. We in doing some other work realized that we had a way to be able to recycle PET plastic, which is a real problem because so many clothes and other things are now made out of PET. And it's really hard to recycle but a by-product of other work we're doing realized we could do that. And so we've formed a JV and we're funding that to not profit from it but to make sure that much more of the world's PET is recycled. Or the work that we're doing on batteries, where using ocean water instead of rare earth minerals to make batteries that not only are cleaner but last longer. Those are kind of byproducts of our kind of core business. The areas that we can see the benefits of innovation and material science being able to impact the world. I am hopeful that we'll be able to play a role with all of that in clear air carbon capture. I mean, that's still far further away but I do think IBM has a unique role that we can play because of our deep expertise in, again, material science, quantum computing, and modeling that put us in a unique position to have a major impact on the world. >> I wonder if we could talk a little bit about sort of IBM and its technology bets. And I've made the point a number of times in my writing that IBM's R and D spend has been about pretty constant, about $6 billion a year. But as IBM is jettison certain businesses got out of the x86 server business and it got out of the Foundry business with micro electronics. Now it's spinning out NewCo. What happens, the effect is that R and D as a percent of revenue goes way, way up. And my premise has always been that allows IBM to be more focused. So whether it's hybrid cloud, AI, quantum, Edge where are you placing your technology bets and maybe give us a sense of how you ranked them, some of your favorites. >> Yeah, so, look, that's exactly right. I mean, we are one of the few places that still invest a massive amount in R and D, especially in fundamental research. And so I'll kind of break down kind of the core areas. So first off, what I'd say is part of the hybrid cloud platform is recognizing we don't need to do everything for everyone. There is great open source technology. There are great other vendors that are doing things that we can enable our customers to access via the platform. So we're not trying to do everything for everybody in the way maybe 40 years ago we did. Because we understand there's so much great other technology out there that we're going to make sure that we expose. So we're investing in areas where we think we can uniquely add value that need to happen that others aren't doing. So AI, let me take that as an example. There's tremendous work happening in machine learning that we see every day because of Facebook and people trying to identify cats. And so I don't mean to trivialize it, there's a phenomenal work happening there. There's a lot less work being done on in AI on things where you have a lot less data. Or areas where you need explainable unbiased AI and the problem with machine learning engines is they're not auditable by definition. That's kind of a black box. And so we do a lot of work in areas like that. We do a lot of work in natural language processing. So we've had more of a as a kind of publicity kind of push the technology something called Project Debater. Where Watson can debate kind of champion debaters. That was mainly to make sure we can understand language in context, which allows for being able to better handle call centers in areas like that. Allows us to understand source code, which also is thinking about how you migrate applications from on-premise to the cloud. So we have a bunch of AI things that we are doing and is a core focus of what we're doing. But specifically we're investing in areas like anti-biased auditability, natural language processing, areas where others aren't. Which is unique and we can bring those capabilities together with what others are doing. Security, obviously, a huge, huge area where we've invested in quantum safe encryption. We've invested in confidential computing. In other words, even in compute mode your data is encrypted. So you can keep your own keys, so not even we on our cloud can see your data. So a lot of investments happening around security and that's going to continue to be an area as we know that's going to get more and more and more scrutiny. So heavy, heavy focus there. Heavily focused on technologies that help you kind of modernize your infrastructure. So automation tools, integration tools and areas around that. So on the software side, those are kind of the main areas. When you look on the hardware side, obviously quantum is a significant area where we have a leadership position we continue to drive. But even semiconductor research in kind of process technology. So we announced something with Intel to work with them to bring some of our process technologies. As we kind of go from 7 nanometers to 5 to 2 to ultimately 1. That set of technologies is an area where we have a real leadership position and we'll continue to work with now Intel. We continue to work with others to drive that forward. So whole bunch of areas both on the hardware and the software side that we continue to make progress on. >> Yeah, the Silicon piece is interesting. And when we saw that Arvin as part of the Intel announcements that we thought originally, oh, maybe it's just about quantum but it's really much more than that. You mentioned the process. We dug into it and we realized, wow, we said Power10 actually has the highest performance. And because of the way in which you are not to geek out but you're you dis-aggregate memory. And Pat Gelsinger talked about system on a package. It turns out folks that IBM is actually the leader in that type of capability. And also the way that systems on chips use memory is very inefficient but IBM has actually invented some techniques to make that much more efficient. That's sort of the future of semiconductors. And the reason why we spend so much time thinking about it is because it's of national interest. There's a huge chip shortage, which doesn't look like it's going away anytime soon. So that's a critical part of national competitiveness and technology competitiveness going forward. >> Well, and the other interesting part about that, and you talked about Power10, going back to the hybrid cloud platform that we talked about. It's not just about running applications across wherever you want to run them. It also abstracts the chip architecture. So all of a sudden whether it's on the mainframe, it's on power, it's on ARM, it's on x86 and a whole bunch of other technologies that might get developed. We're making it much easier to kind of consume that specialization or variety at the hardware level. Recognize as Moore's law runs its course there's no longer this inevitability of everything's just going to go to x86. I think we are going to see more variety because we're going to have needs in the factory floor or in the automobile or with massive container as applications. Where you're going to need, whether it's kind of shared memory or different architectures all the way out to kind of low battery consumption. And that whole kind of breadth and our hybrid cloud platform enables that variability. And then IBM obviously has great technology to enable kind of building unique capability in hardware. So we kind of play on both sides of it, both kind of developing great technologies but then making it really easy for developers to consume and use those specialized features. >> I'm glad you brought that up, Jim. We mentioned Moore's law because we're all talking about how Moore's law is waning and it's quote, unquote dead. But the reality is, is the outcome of Moore's law which is the doubling of performance every two years is actually accelerating because of the common actuarial factors of CPU's and GPU's and NPUs and accelerators and DSPs. If you add all those up and actually, we're actually quadrupling every two years. So we have more processing power at much lower costs because of the volumes that you're seeing on things like ARM. So it's actually a very exciting time. We're entering an era that really, it's hard to get your mind around sometimes. So my question is how should we think about the future state of IBM? What does that look like? >> Well, so first off, the thing that I've found extraordinary about IBM kind of having been there now just a little over a year as an employee, a couple of years, I guess, when Red Hat was acquired. Is it is unique in fundamentally changing, again, who we are to kind of meet the needs going forward. And if you think about the needs in technology, recognize it was only like 20 years ago that Nicholas Carr wrote his famous article, IT Doesn't Matter, it's about back office. And in that world, IBM was really, really effective at building and running IT systems for our clients. We would come in, we would just kind of do everything for them. Today, technology is the forefront of developing or building competitive advantage for almost any business. And so nobody wants to kind of hand the keys, so we no longer are necessarily doing things for our clients. We're doing things with our clients. So there's a whole set of work, and we talked about how we engage with our clients, how we're much more collaborative and co-creative and our whole garage model to help build the capability to innovate with our clients is a key part of what we're doing. We'll continue to drive core technologies forward like quantum in key areas that require billions of dollars of research that frankly no one else is willing to do. And then we bring it all together with this hybrid cloud platform where we recognize it's no longer about us doing it all for you anymore. We're going to do the things where we can uniquely add value but then provide it all on a platform which allows you to consume from wherever, however you want to in a safe, secure, reliable way. So as we watch this next generation of computing unfold, cloud shouldn't end up being a bunch of vertical stove pipes. It truly needs to be kind of a horizontal platform that allows you to run any application anywhere in a safe, secure, reliable way and our architecture helps do that. So it's no longer able to do everything for you. It's we can do things uniquely on a platform and work with you to be able to help you kind of create your own pace of innovation, your own sources of advantage. And so that's the broad kind of direction that we're going, again, as enterprises move from consuming technology to be more efficient, to driving advantage with it. They need partners who understand that focused on their success and can innovate with them. And that's really where we're going with our technology, with our services capability and kind of our approach to how we work with our clients. >> Yeah, Jim, you just laid out the Holy grail of computing in the coming decade and with IBM's acquisition of Red Hat. And it really enables that vision and clearly the company is one of the top few that are in a position to do that. Jim Whitehurst, thanks so much for coming back on theCUBE. Really appreciate your time. >> Thanks for having me, it's great to chat. >> All right and thank you for watching. Keep it right there for more content of theCUBE's coverage of IBM Think 2021, the virtual edition, be right back. (gentle music)

>>Mhm Yes. Hello and welcome back to the cube coverage of red hat summit 2021 Virtual. I'm john furrier host of the Q. We've got a great lineup here. We've got two great guests just bad padan, E. S. V. P. Of cloud platforms at red hat and Tracy ranking VP of open shift engineering at Red Hat folks. Thanks for coming on. Good to see. You got some big news, you guys have made some acquisitions. Uh stack rocks you guys bought into red hat was a really big deal. People want to know, what's the story? How's it going? What's the uptake? What's the integration, how's it going? >>Right, thanks john, thanks for having us on. Um so yeah, we're really excited with stack rocks acquisition being the team on board. Uh Well, the first thing to note before even why we did it uh was for for you and and then the beers have been following us closely. This is our first acquisition as red Hat being part of IBM. So, so, so quite big for us from that perspective as well. Right? Continue to maintain our independence um within uh IBM uh and I really appreciate that way of working together. Um but saying all of that aside, you know, as a company have always been focused on ensuring that were direct enterprise capabilities to just sort of doing that for two decades. With with Lennox, security has always been a big part of our story, right, ensuring that, you know, we're finding cbs updating uh and sending out patches to our customers and doing that in a reliable fashion running mission critical applications. We applied that same if you will um security mindset on the community side with the open ship platform. Um we've invested insecurity ourselves organically, right, you know, uh in various areas and making it more secure, all right, can't run containers uh as Root by default, uh investing in things like role based access control and so on. And we really felt like we want to deepen our commitment to security. Uh and so, you know, in conversations with stack rocks, we found just a great fit, just a great team building a really interesting approach to community security, right? You know, very declared of approach to it. Uh you know, focus on a vision around this notion of shift left. But you've probably been hearing from that because we're a little bit right. Which is this uh idea that, you know, we're in the world moving from devops to death setups. Uh and the approach that sack rocks were saying, so great team, great product, really great vision with regard to kind of weather going forward and finding a nice alignment between, you know what, you know, they've been thinking about the value that we want to bring >>Yeah, I want to dig into the depths cops, piece of it. But you brought up the IBM acquisition as part of now Red Hat bought IBM you know it's just you remember back in 2019 I interviewed Arvin on the cube when he was at IBM you guys were still independent and he had a smile on his face. He is pro cloud, he is all about cloud Native and even that interview I had no idea what was going on behind the scenes but I was kind of drilling him on some of the things that were important at that time which are now certainly relevant today which is cloud Native, Agile development Programmable infrastructure. I don't think we touched on security that much was kind of inherent in the conversation. He was like all smiling, he loves the cloud Native and and this is where it comes into the relevant, I have to ask you, what was it like to get this through? IBM where they're like girl green light or was it, was it different? What was different about this acquisition? >>John great, great question for you to ask. And you know, I will say that, uh, you know, everyone's heard the stories they're telling us. They get, you know, part of IBM, you know, it's definitely working on red hat jOHn the cube we've talked to you and several of your colleagues about that. Um, the great thing has been that, look, the redhead way of working, uh, are still pushing forward with regard to our commitment to open source, uh, and our culture, you know, is still the way it is. And I have to give huge credit not just to urban and his and his team, but definitely to orbit right. He's always champion, He's champion rather acquisition. He's champion kind of, you know, the independence that we've had and he takes very, very firm stance around it. Um, and look, IBM uh, story company uh, in the United States and really in the world, um, they have, there was working and you know, for redhead, they've kind of said, look, we'll give you a pass path, right? So, uh, getting the acquisition through, if you will, diarrhea processes, um, really was, was hugely supported by, you know, from mormon, but all the way down. Russian strategic >>strategic bet with the dollars involved trace, they want to get you in this because, you know, one of the things about shift left and getting security built in by default, which has always been part of red hat, that's never been an issue. It just extends as developers want to have native security built in. There's a technology angle to this as well. So, um, obviously cloud native is super important. What investments are you guys making with this acquisition and how does that translate to customer benefits? >>Yeah, I mean the one thing that is really important about the stock rocks acquisition and kind of, you know, key for us is, you know, this was a cube native solution and I think that's really, you know, was important piece as to why stock rocks might have been, you know, was a great fit for us. Um, and so you know, what we've been trying to do in the short time that that team has been on board with us is really, you know, taken a deep look and understanding where are the intersection points of some of the things that we have been trying to focus on, you know, just with inside of, you know, open shift in red hat in general and where do they have bring the additional value. Um, and really trying to make sure that when we create this solution and ultimately it is a solution that's cohesive across the board. Um, we don't add confusion too. You know what, some of the things that maybe we already do this team knows, you know, how to they know their customer base. They really know what the customers are looking for. And we are just trying to absorb, I would say so much of this information uh as we are trying to, you know, create what the right road map will be uh for stack rocks from a long term and infrared had ultimately in the security space. I mean, as the chef said, I mean we are red hats known for being, you know, security mind focus built on top of realm, you know, uh the leader and so we want to make sure that what we've got that actually serves, you know, the developers being able to not just secure the environment and the platform, but also the workloads, customers need that security from us. Um and build it in so that we have, you know, into the cube native >>controls. >>So stack rocks was known for reinventing and security enterprise security with cloud native. How is it complimentary? How does it fit in? Can you guys just quickly talk to that point because um like you said, you guys had security but as kubernetes and containers in general continue to rise up and and kubernetes continue to become a hybrid cloud kind of linchpin for applications. Um where's the synergy? Where's where does this connect? And what are some of the uh the part of the areas where it's it's fitting in nicely or or any overlaps that you can talk about as well? >>Yeah, I can start and then maybe Tracy if you want to add to that securities of it's a wide space. Right? So, you know, just saying security is like, well, you know what security you're talking about, you're talking about, you know, and use the security, like what your desktop are you talking about? You know, intrusion prevention? I mean, it's a huge, huge, you know, space. Uh you know, many companies devoted to the entire spectrum, you know, self has a very robust security business. We're very focused on uniting Tracy. Was talking about this, the Kubernetes Native security part of this. Right. You know, do we have the appropriate runtime uh, controls in place? Uh You know, our policies configured appropriately Well, if they're in one cluster, are they being applied consistently across, you know, every cluster? How do we make sure that, you know, we make security the domain, not just of the operators but also uh in in uh make it easier for it to be adopted at development time. So, you know, there's a, there's a, if you will, a very sort of uh a lot of surface area for security, we're trying to really think about the pieces that are most relevant for our enterprise customers and the ones that are deploying it at scale. And I'm sure we can build on it. Having said that, john what I do want to add also is that because expands even of Cuban any security is so large, there is a lot of room for our partners to play. Right? And so before you asked me that question, I want to say that there is space. Right? So you know, I've had conversations with you know, all the other folks in the cloud native security space. We know them well, we've been working with them over the years and we could do to look forward to ensure that they're building over and above the foundation of Berlin. >>So plenty of beachhead, what you're saying from a, from a security sample, you guys hit the table stakes added into the product, but there's so much surface area going on with this hybrid cloud and soon to be multi cloud that you're saying this room for partners to play. >>Exactly, right, >>okay. Tracy quick under the hood, you know, actually shift left. That's kind of the mindset for developers who are writing modern applications might not want to get under the hood, who just wanted all the program ability of security and not have to come back to it. I mean that seems to be the complaint that I hear. It's like okay I gotta come back and do a security, more security work. I just wrote the code that was last week or yesterday and that seems to be the developer productivity. Then there's also under the hood devops what how does this all fit? >>Yeah, so it's uh let's take a take a step back and this is how I kind of like to think about it. So we are trying to look at, you know, how do we just enable in some of the C. I. C. D. The tooling that we have? How do we actually take and enable some of the technology that was already available in stock rocks today and actually put it into those tools. Because if we can make it easy for you to not just develop your application and, you know, integrated in with what you're, the tooling is that you're trying to use for the entire life cycle of developing your application. It then becomes exactly what you didn't say, you know, what they're doing now is it's an after thought. We don't need it to be an afterthought. Um and I think, you know, we're seeing the changing from a customer mindset where um they're become customers are becoming a lot more aware of these things. So if we actually get this into, you know, some of the Argo and the ci cd pipe pipeline work, then it just becomes something natural and not a secondary thought because actually when it's a secondary thought, uh we have exposures and that's not what a customer wants when they're creating, you know, creating these workloads, they're trying to rapidly create the workloads, so we need to make it um to have those integration points in as quickly >>as possible. >>Totally nailed. I mean there's productivity issues and there's also the top line which is security. Great stuff. Congratulations on that acquisition. Security continues to be built in from the beginning. That's what people want. They want productivity want want security, great stuff, Great acquisition. Congratulations. Um Next next segment I want to get into is uh open shifts around telemetry. Tell us about telemetry for open shift. What is this about? >>Yeah, another big interesting topic for us. So over a year ago we released open Ship for and you know, we learned a lot of lessons, you know, shipping open ship three up and over the years and really getting feedback from hundreds of customers around the globe. One of the things obviously we heard from a lot was you know, make install the upgrade experience better. Right. But you know, we were thinking about how can we take that forward to the next level, which is is there a way for us to say, you know, let these clusters they connected up so we can get a better sense of cluster help and help with remote health monitoring will be able to proactively provide information back to our customers around, let's say, you know, if applications are healthy clusters healthy and how they're running and how we can help them um could figure them if they're not. Um And so that led us to introducing uh inflammatory remote health monitoring directly into open ship for as a value that we can provide to customers. Um And what that really starts doing is starts bringing this notion of a public cloud, like experience to customers with clusters run across the hybrid cloud. Right? So you have the expectation that, you know, your clusters are monitored and watched over in the public cloud and we want to make sure we can provide that to customers regardless of, you know, where they're running in. So, so that's just >>a quick question on that insights for open shit. That's what you're getting to. Is that on premise? And in the cloud? So it's hybrid environment, is that correct? >>Exactly. Right. So, the insights for open ship is all about that, Right? So how can be proactively, you know, uh identify risk helped remediated? How can we uh do things like, for example, give you recommendations, cost optimization, right insights around around around that. Uh and to your point, right? The goal is to make it completely hybrid. So, it's obviously a new area right for customers want Leslie used to that, you know, in an on premise environment, they're used to that in a public cloud or cloud native environment. And we're trying to make sure we bring that consistently across to our customers, you know, regardless of where they're running apart. >>Tracy. Talk about the the developer productivity involved because if you have telemetry and you have insight into what's going on in the infrastructure and the data, what's going on the application, you can be more proactive, You don't have to get pulled into these rabbit holes of troubleshooting. Oh, is a trace over here or something going on over here. Are clusters going down or should I could have caught that there's a lot of, you know, good intentions with with the code and then all of a sudden new code gets pushed and then also that triggers this to go off and you have all these kind of dependencies, day two operations, many people call this kind of that phenomenon where everything looks good and then you start pushing more stuff more code and then the cluster goes down and then it's like wait, that could have been avoided. That was a dumb error, we could have fixed that this is kind of the basic what I call human software error kind of stuff that's not intended. The telemetry help this area. >>Yeah, it does. And actually one point that even to take it further, that I think it's important is our customers can learn from each other not even having to talk to each other, which is the beauty of what telemetry is and what redhead insights, rope and shift is. You know, what we have been able to see is you know, there are certain characteristics that happen even across, you know, certain groups of customers but they don't know that they don't talk to each other, but the telemetry is giving us a night into what some of those patterns are. And so when a customer in one site starts to have, we start to see telemetry, you know, you know, maybe a. T. D. Is going down for a certain reason and and we can determine that we then have the ability to take that telemetry and you know, be able to send alerts back to all the other customers and say, hey we recognize this might be becoming an issue, You know, here's how you might re mediate it or hey we've already put a fix out for this issue that we're starting to see you having an issue, you should probably take action on. So it's an increasing the the efficiency of customers without them necessarily having to, you know, constantly be understanding, monitoring, you know, watching everything like they had had to do from of the three perspective, we're now giving them some of the insights of what we know as developers back to them, >>you know, that's interesting. I think that's really key because it's talking to a friend last night we just talked about cybersecurity and we're talking about how a lot of these things are patterns that have that are the same and people just don't talk to each other. There's no shared insights. I think this is an interesting dynamic where you can get the collective intelligence of other patterns and then share that. So the question that I mean that's that's a game changer in my opinion. So that's awesome. The question I have is can you guys push alerts and recommendations to the customers? So from this data? So how does that work? Is that built into the product? Can I get some proactive notifications and saying, hey, you know, your cluster might go down and we've seen this before, we've seen this movie. I mean she is that built in. >>Yeah, so john you're keeping it exactly where we're taking this, right? And I think Tracy started putting out some breadcrumbs for you there. So uh, first get comfortable with the foundation was laid out, get clusters connected right. Then information starts going, reported, we start getting exactly to what you said, john write a set of patterns that we can see Tracy, start talking about what we can, if we see pattern on one end, we can go off and help customers on other end. Now, if you take this forward interest for your viewers today, um introduce a I you know, into this, right? And then we can start almost starting to proactive now of saying, look, you know, following actions are going to be committed or we expect them to be committed. You know, here's what the outcome is a result of that. Here's what we recommend for you to do, right? So start proactive remediation along that. So that is exactly, you know, the surface that we're trying to lay down here and I think this is a huge, >>huge game changer. Well, great stuff, want to move on the next we're getting go on for hours on that one topic. I think telemetry is a super important trend. Uh you guys are on top of a great, great job to bring in the Ai piece. I think that's super cool. Let's get back to the end of blocking and tackling Tracy. You know, one of the things that we're seeing with devops as it goes mainstream now, you've got def sec apps in there too, is you've got the infrastructure and you've got the modern application development, modern application developers, just wanna code, be productive, all that security shifting left, everyone's all happy that things are going great under the hood. You have a whole set of developers working on infrastructure. The end of the customers don't want to manage their own infrastructure. How is red hat focused on these two groups? Because you got this SRE like cloud Ops persona developing in the enterprise and you got the developers, it's kind of like almost two worlds coming together, how you, how you helping customers, you know, control their infrastructure and manage it better. >>Yeah, so great question. And you know, this really plays to the strength of what, you know, we have been trying to champion here at red hat for for many years now around the hybrid cloud and this, you know, hopefully everybody's recently heard about the announcement we've made with our new offering Rosa in partnership with amazon. Um you know, we've got different offerings that enables customers to really focus, as you mentioned on the key aspects that they are concerned about, which is how do they drive their businesses, how do they create their applications, their workloads that they need to and offload, you know, the need for having to understand all of the I. T. Infrastructure that's underneath. Um We want to red hat to reduce the operational complexity that customers are having um and give them the ability to really focus on what's important for them. Um how can they be able to scale out their applications, their businesses and continue to add value where they need to have and so um I think it's great we're seeing a huge uptake right now and we've got customers and they understand completely this hybrid cloud model where they're, you know, purchasing open shift um for certain, you know, applications and workloads that they want to run inside their own data centers. And then for those that they know that they don't, you know, don't have to be inside their own data centers. They don't want to have all of that operational complexity. They want to utilize some of the clouds. That's when they're starting to look at other things like rosa or open shift dedicated and and really starting to find the right mix that works well for their business. >>So are you saying that you guys are going to the next level because the previous, I won't say generation but the current situation was okay, you're born in the cloud or you lift and shift to the cloud, You do that manually, then you go on premise to build that cloud operations. Now you're in a hybrid environment. So you're saying if I get this right that you guys are providing automation around standing up in building services on AWS and cloud, public cloud and hybrid, is that kinda what you're getting at? >>Yeah. So the to go to the higher multi cloud world, right? You want platform consistency, right? Running my application running on a platform consistently, you know, where we go. Right. Tracy started talking about this idea of in some cases you say, well I've got the infrastructure team, I've got the ops team, johnny talked about this notion of, well the dwarves can be hard, sometimes right to some groups. Um, and so hey, red hat or hey redhead, plus, you know, my hyper scale of choice, you know, take that off of my hands, Right. Run that for me consistently yourself. Right. So I focused on my application uh and the management of infrastructure is something that's on you Tracy talked about rosa, that's our joint uh first party service that you know, we've got with amazon were directly available in amazon's console, you can go pull that down, right. You'll see red hat open shift on AWS, right on their uh we've got a similar one with Microsoft Azure Tracy mentioned open dedicated, we stand up the platform, we have our own sorry team that manages it with IBM as well as with google. So you pick your cloud of choice and we'll make sure, you know, we'll give you a platform that if you as a customer so choose to self manage. Great, go for it. If you'd like for us to manage it directly ourselves or in conjunction with the cloud provider and provided to you as a native service, you know, we can do that for you as well. Right? So that day to obsolete, you know, challenge that we're talking about. You know, it's something that we can get your hands if you want us to. >>That's really cool. You gotta manage service. They can do it themselves whatever they want. They can do it on public cloud and hybrid. Great stuff. Yeah, I think that's the key. Um, and that's, that's, that's killer. Now, the next question is my favorite. I want to ask you guys both pretend I'm a customer and I'm like, okay, Tracy shit, tell me what's in it for me. What is open shifts and red hat doing for me is the customer? What are you bringing to the table for me? What are you gonna do for me? What is red hat doing for me today? So if you have the kind of bottom line we were in the elevator or probably I ask you, I like what I'm hearing. Why? Why are you cool? Why are you relevant? What's in it for me? >>You >>already start? Okay. Yeah, so I mean I think it's a couple of things that we let's just tie it back to the first initial blend. I mean we've got, we're enabling the customers to choose like where do they want to work that run their workloads, what do they want to focus on? I think that's the first thing. Um we're enabling them to also determine like what workloads do they want to put on there. We continue to expand the workloads that we are providing um capabilities to customers. You know most, you know one of the more recent ones we've had is you know, enablement of Windows containers a huge plus for us. Um, you know, it's just kind of talked about, dropped the buzzword ai you know, recently, you know, we're looking at that, we're talking about, you know, moving workloads need to go to the edge now. It's not just about being in the data centers, so it's about enablement. That's really what open shift as you know, bread and butter is, is, you know, let us, you know, create the ability for you to drive your workloads, whichever, whatever your workloads is, modernize those workloads um, in place them wherever you want to. >>Yes, your your answer. How would you say to that? >>I'll build on what Tracy said, right. She obviously took the, you know, build up tribal Benjamin perspective and I'll sort of talk about a business thing you're introducing, actually add threat at summit. So, you know, we go up and acquire stock rocks, you know, further deepen investment in communities or containment of security. Uh if you recall, john, we've talked to you about, you know, advanced cluster management team that we actually got from IBM incorporate that within red hat, um, to start providing, you know, those capabilities are consistent, you know, cluster policy, immigration management. Um, and you know, in the past we've made an acquisition of Core West, we've got a lot of technology from that incorporated the platform and also things like the quake container registry. What we're introducing address had some it is a way for us to package all of that together. So a customer doesn't say, look, you know, let me pick out a container platform here, let me go find, you know, somebody manage it over there. You let me see, you know what security you adhere. We introduced something called open shift platform plus right. Which is the packaging of, you know, core Open shift contain a platform uh, capabilities within uh, stack rocks, which we're calling advanced cluster security capabilities of cluster management, which is called advanced cluster management. And the quake container registry always want to make it much easier for customers to consume that. And again, you know, the goal is, you know, run that consistently in your hybrid multi club >>chef Tracy. Great, great segment, great insight. Um, here on the cloud platform and open shift under the hood. Uh, you guys are well positioned and I was talking about Arvin and idea who acquired red hat. You know, it's pretty clear that cloud native hybrid is the new cloud operating environment. That's clear. You guys are well positioned. And congratulations. Final question Chef. Take a minute to quickly put the plug in for open shift. What's next? Um, looking forward, what do you guys building on? Um, what's on the roadmap if you can negative share the road map, but yeah, tell us what you're thinking about. I mean you're innovating out in the open, love your shirt by the way and that's the red hat way, looking ahead. What's coming for? Open shift? >>So john I will say this, our roadmap is out in the open every quarter. Our product managers host the session right open to anybody, right? You know, customers prospect, competitors, anybody can can come on. Um, and uh, you hear about our road map, lots of interesting things they're working on uh, as you can imagine investments on the edge front, right? So that's across our portfolio, right on the open shift side, but also on learning platform as well as on the open stack front, make it easier to have, you know, slim down open shift. we'll run that you won't be able to run uh open ship in remote locations and then manage it. Um So expect for us uh you know, just to show you more work there, drinking things like uh ai and more workloads directly onto the platform, but you'll see what they're doing to get more Alex on what we're doing to take uh technologies that we've got called Open data hub to make it easier to run more data intensive, more ai ml types of frameworks directly a platform. Um And so that's a great interest, more workloads Tracy, start talking about that. Right, so Windows containers, support has G eight, uh and what's really awesome about that is that we've done that with Microsoft, right, so that offering is jointly supported by both us and our partners over at Microsoft uh virtualization, which is taking much machines and being able to run them as dangerous orchestrated by communities Um, and and doing more work, you know, on that front as well. So just a lot of different areas uh, were investigated and really, really excited to bring more workloads on 2:00. >>Well, Chef Tracy, great segment with a lot of data in there. Thanks for spending time in and providing that insight and uh, sharing the information. A lot of flowers blooming um, here in the cloud native environment, a lot of action. A lot of new stuff going on. Love the shift left. I think that's super relevant. You guys do a great job. Thanks for coming on. I appreciate it. >>Okay. >>This the cubes coverage of red hat summit. I'm john for a host of the cube. Thank you for watching.

>>mhm Yes. Hello and welcome back to the cubes coverage of red hat summit 2021 virtual. I'm john for your host of the cube and cube coverage here with matt Hicks. Executive vice president of products and technologies at red hat cuba lum I've been on many times, knows the engineering side now running all the process of technologies matt. Great to see you. Thanks for coming on remote. I wish we were in real real life in person. I RL but doing it remote again. Thanks for coming on. >>Hey, thanks thanks for having me today. >>Hey, so what a year you know, um, I was just talking to a friend and another interview with the red hat colleagues. Chef on your team in 2019 I interviewed Arvin at IBM right before he bought red hat and you smile on his face and he wasn't even ceo then um, he is such a big fan of cloud native and you guys have been the engine underneath the hood if you will of IBM this transformation huge push now and with Covid and now with the visibility of the post Covid, you're seeing cloud Native at scale with modern applications just highly accelerated across the board In almost every industry, every vertical. This is a very key trend. You guys at the, at the center of it always have been, we've been covering you for many years, interesting time and so now you guys are really got the, got the formula at red hat, take us through the key transit you see on this wave for enterprises and how is red hat taking that, taking that through? >>Yeah, no, absolutely. It has been, it's been a great ride actually. I remember a couple years ago standing on stage with Arvin prior to the acquisition. So it's been uh, it's been a world one but I think if we look at Really would emerge in 2020, we've seen three trends that we hope we're gonna carry through in 2021 just in a better and better year for that. That the first is open hybrid cloud is really how customers are looking to adapt to change. They have to use what they have um assets they have today. On premise, we're seeing a lot of public cloud adoption that blend of being hybrid is just, it is a reality for how customers are having to deliver a edge computing I think is another area I would say uh the trend is really not going to be a fad or a new, you know, great texture. Um the capabilities of computing at the edge, whether that is automotive vehicles, radio access network capabilities to five G. It's pretty astounding at this point. So I think we're gonna see a lot of pushing edge computing for computing, getting closer to users. Uh but then also the choice aspect we're seeing with Ceos, we often talk about technology is choice, but I think the model of how they want to consume technology has been another really strong trend in 2020. Uh We look at this really is being able to deliver a cloud managed services in addition to technology that ceos around themselves. But those, those will probably be the three that stand out to me at least in 2020 we've seen, >>so matt take us through in your minds and red hats, perspective the workloads that are going to be highlighted in this cloud native surge that's happening. We're seeing it everywhere. You mentioned edge industrial edge to consumer Edge to lightweight, edge, massive new workloads. So take us through how you see kind of the existing workloads evolving and potentially new workloads that emerging. >>Yeah. So I think um you know first when you talk about edge workloads a big umbrella but if you look at data driven workloads, especially in the machine learning artificial intelligence spectrum of that, that's really critical. And a reason that those workloads are important is five G. Aside for now when you're running something at the edge you have to also be able to make decisions pretty well at the edge. And that that is that's where your data is being generated and the ability to act on that closely. Whether that's executing machine learning models or being able to do more than that with A I. That's going to be a really really critical workload. Uh huh. Coupled to that, we will see I think five G. Change that because you're going to see more blending in terms of what can you draw back to uh closer to your data center to augment that. So five G will shift how that's built but data driven workloads are going to be huge then I think another area will see is how you propagate that data through environment. Some Kafka has been a really popular technology will actually be launching a service in relation to that. But being able to get that data at the edge and bring it back to locations where you might do more traditional processing, that's going to be another really key space. Um and then we'll still have to be honest, there is still a tremendous amount of work loads out there that just aren't going to get rebuilt. And So being able to figure out how can you make them a little more cloud native? You know, the things your companies have run on for the last 20 years, being able to step them closer to cloud native, I think it's going to be another critical focus because he can't just rewrite them all in one phase and you can't leave them there as well. So being able to bridge shadow B T to >>what's interesting if folks following red hat, No, no, you guys certainly at the tech chops you guys have great product engineering staff been doing this for a long time. I mean the common Lennox platform that even the new generation probably have to leave it load limits on the server anymore. You guys have been doing this hybrid environment in I T for I T Sloan for decades. Okay. In the open, so, you know, it's servers, virtualization, you know, private, public cloud infrastructures and it's been around, we've been covering it in depth as you know, but that's been, that's a history. But as you go from a common Lennox platform into things with kubernetes as new technologies and this new abstraction layers, new control plane concept comes to the table. This need for a fully open platform seems to be a hot trend this year. >>How do you >>describe that? Can you take a minute to explain what this is, this is all about this new abstraction, this new control plane or this open hybrid cloud as you're calling? What is this about? What does it mean? >>Yeah, no, I'll do a little journey that she talked about. Yeah. This has been our approach for almost a decade at this point. And it started, if you look at our approach with Lennox and this was before public clouds use migrants existed. We still with Lennox tried to span bare metal and virtualized environments and then eventually private and public cloud infrastructure as well. And our goal there was you want to be able to invest in something, um, and in our world that's something that's also open as in Lennox but be able to run it anywhere. That's expanded quite a bit. That was good for a class of applications that really got it started. That's expanded now to kubernetes, for example, kubernetes is taking that from single machines to cluster wide deployments and it's really giving you that secure, flexible, fast innovation backbone for cloud native computing. And the balance there is just not for cloud native, we've got to be able to run traditional emerging workloads and our goal is let those things run wherever rail can. So you're really, you're based on open technologies, you can run them wherever you have resources to run. And then I think the third part of this for us is uh, having that choice and ability to run anywhere but not being able to manage. It can lead to chaos or sprawl and so our investments in our management portfolio and this is from insights the redhead advanced cluster management to our cluster security capabilities or answerable. Our focus has been securing, managing and monitoring those environments so you can have a lot of them, you can run where you want, but she just sort of treat it as one thing. So you are our vision, how we've executed up to this point has really been centered around that. I think going forward where you'll see us um really try to focus is, you know, first you heard paul announced earlier that we're donating more than half a billion dollars to open. I would cloud research and part of this reason is uh running services. Cloud native services is changing. And that research element of open source is incredibly powerful. We want to make sure that's continuing but we're also going to evolve our portfolio to support this same drive a couple areas. I would call out, we're launching redhead open shift platform plus and I talked about that combination from rail to open shift to being able to manage it. We're really putting that in one package. So you have the advanced management. So if you have a huge suites of cloud native real estate there, you can manage that. And it also pushes security earlier into the application, build workflows. This is tied to some of our technology is bolstered by the stack rocks acquisition that we did. Being able to bring that in one product offering I think is really key to address security and management side. Uh we've also expanded Redhead insights beyond Rehl to include open shift and answerable and this is really targeted it. How do we make this easier? How do we let customers lean on our expertise? Not just for Lennox as a service, but expand that to all of the things you'll use in a hybrid cloud. And then of course we're going to keep pushing Lennox innovation, you'll see this with the latest version of red hat enterprise, like so we're gonna push barriers, lower barriers to entry. Uh But we're also going to be the innovation catalyst for new directions include things like edge computing. So hopefully that sort of helps in terms of where, where we started when it was just Lennox and then all the other pieces were bringing to the table and why and some new areas. Uh We're launching our investment going forward. >>Yeah, great, that's great overview. Thanks for taking the time to do that. I think one of the areas I that's jumping out at me is the uh, advanced cluster management work you guys are doing saw that with the security peace and also red hat insights I think is is another key one and you get to read that edge. But on the inside you mentioned at the top of this interview, data workloads pretty much being, I mean that pretty much everything, much more of an emphasis on data. Um, data in general but also, you know, serve abilities a hot area. You know, you guys run operating system so you know, in operating systems you need to have the data, understand what's being instrumented. You gotta know that you've got to have things instrument and now more than ever having the data is critical. So take us through your vision of insights and how that translates. Because he said mentions in answerable you're seeing a lot more innovations because Okay I got provisions everything that's great. Cloud and hybrid clouds. Good. Okay thumbs up everyone check the box and then all of a sudden day too As they call day two operations stuff starts to, you know, Get getting hairy, they start to break. Maybe some things are happening. So day two is essentially the ongoing operational stability of cloud native. You need insights, you need the data. If you don't have the data, you don't even know what's going on. You can't apply machine learning. It's kind of you if you don't get that flywheel going, you could be in trouble. Take me through your vision of data driven insights. >>Yeah. So I think it's it's two aspects. If you go to these traditional traditional sport models, we don't have a lot of insight until there's an issue and I'm always amazed by what our teams can understand fix, get customers through those and I think that's a lot of the success red hats had at the same note, we want to make that better where if you look at real as an example, if we fixed an issue for any customer on the planet of which we fix a lot in the support area, we can know whether you're going to hit that same issue or not in a lot of cases and so that linkage to be able to understand environments better. We can be very proactive of not just hey apply all the updates but without this one update, you risk a kernel panic, we know your environment, we see it, this is going to keep you out of that area. The second challenge with this is when things go do break or um are failing the ability to get that data. We want that to be the cleanest handshake possible. We don't want to. Those are always stressful times anyway for customers being able to get logs, get access so that our engineering knowledge, we can fix it. That's another key part. Uh when you extend this to environments like open shift things are changing faster than humans can respond in it. And so those traditional flows can really start to get strained or broken broken down with it. So when we have connected open shift clusters, our engineering teams can not only proactively monitor those because we know cooper net is really well. We understand operators really well. Uh we can get ahead of those issues and then use our support teams and capabilities to keep things from breaking. That's really our goals. Finding that balance where uh we're using our expertise in building the software to help customers stay stable instead of just being in a response mode when things break >>awesome. I think it's totally right on the money and data is critical in all this. I think the trust of having that partnership to know that this pattern recognition is gonna be applied from the environment and that's been hurting the cybersecurity market people. That's the biggest discussion I had with my friends and cyber is they don't share the data when they do, things are pretty obvious. Um, so that's good stuff there and then obviously notifications proactive before there's a cause or failure. Uh great stuff. This brings up a point that paul come here, said earlier, I want to get your reaction to this. He said every C. I. O. Is now a cloud operator. >>That's a pretty bold >>statement. I mean, that's simply means that it's all cloud all the time. You know? Again, we've been saying this on the queue for many years, cloud first, whatever people want to call it, >>what does that actually >>mean? Cloud operator, does that just mean everything's hybrid? Everything's multiple. Cloud. Take me through an unpacked what that actually means? >>Yeah. So I think for the C I O for a lot of times it was largely a technology choice. So that was sort of a choice available to them. And especially if you look at what public clouds have introduced, it's not just technology choice. You're not just picking Kafka anymore. For example, you really get to make the choice of do I want to differentiate my business by running it myself or is this just technology I want to consume and I'm going to consume a cloud, native service and other challenges come with that. It's an infrastructure, not in your control, but when you think about a ceo of the the axes they're making decisions on, there are more capabilities now and I think this is really crucial to let the C i O hone in on where they want to specialist, what do they want to consume, what do they really want to understand, differentiate and Ron? Um and to support this actually, so we're in this vein, we're going to be launching three new managed cloud services and our our focus is always going to be hybrid in these uh but we understand the importance of having managed cloud services that red hat is running not the customers in this case. So one of those will be red hat open shift streams for Patrick Kafka. We've talked about that, that data connectivity and the importance of it and really being able to connect apps across clouds across data centers using Kafka without having to push developers to really specialize in running. It is critical because that is your hybrid data, it's going to be generated on prim, it's going to be generated the edge, you need to be able to get access to it. The next challenge for us is once you have that data, what do you do with it? And we're launching a red hat open shift data science cloud service and this is going to be optimized for understanding the data that's brought in by streams. This doesn't matter whether it's an Ai service or business intelligence process and in this case you're going to see us leverage our ecosystem quite a bit because that last mile of AI workloads or models will often be completed with partners. But this is a really foundational service for us to get data in and then bring that into a workflow where you can understand it and then the last one for us is that red hat open shift api management and you can think of this is really the overseer of how apps are going to talk to services and these environments are complex, their dynamic and being able to provide that oversight up. How should my apps be consuming all these a. P. S, how should they be talking? How do I want to control? Um and understand that is really critical. So we're launching these, these three and it fits in that cloud operator use, we want to give three options where you might want to use Kafka and three Scale technologies and open data hub, which was the basis of open shift data sides, but you might not want to specialize in running them so we can run those for you and give you as a C. I. O. That choice of where you want to invest in running versus just using it. >>All right, we're here with matt Hicks whose executive vice president prospect technology at red hat, matt, your leader at red hat now part of IBM and continues to operate um in the red hat spirit, uh innovating out in the open, people are wearing their red hat uh hoodies, which has been great to see. Um I ask every executive this question because I really want to get the industry perspective on this. Um you know, necessity is the mother of invention as the saying goes and, you know, this pandemic was a challenge for many In 2020. And then as we're in 2021, some say that even in the fall we're gonna start to see a light at the end of the tunnel and then maybe back to real life in 2022. This has opened up huge visibility for CSOS and leaders and business in the enterprise to say, Hey, what's working, what do we need? We didn't prepare for everyone to be working at home. These were great challenges in 2020. Um, and and these will fuel the next innovations and achievements going forward. Um again necessity is the mother of all invention. Some projects are gonna be renewed and double down on some probably won't be as hybrid clouds and as open source continues to power through this, there's lessons to be learned, share your view on what um leaders in in business can do coming out of the pandemic to have a growth strategy and what can we learn from this pandemic from innovation and and how open source can power through this adversity. >>Yeah. You know, I think For as many challenging events we had in 2020, I think for myself at least, it it also made me realize what companies including ourselves can accomplish if we're really focused on that if we don't constrain our thinking too much, we saw projects that were supposed to take customers 18 months that they were finishing in weeks on it because that was what was required to survive. So I think part of it is um, 2020 broke a lot of complacency for us. We have to innovate to be able to put ourselves in a growth position. I hope that carries into 2021 that drives that urgency. When we look at open source technologies. I think the flexibility that it provides has been something that a lot of companies have needed in this. And that's whether it could be they're having to contract or expand and really having that moment of did the architectural choices, technology choices, will they let me respond in the way I need? Uh, I'm biased. But first I think open models, open source development Is the best basis to build. That gives you that flexibility. Um, and honestly, I am an optimist, but I look at 2021, I'm like, I'm excited to see what customers build on sort of the next wave of open innovation. I think his life sort of gets back to normal and we keep that driving innovation and people are able to collaborate more. I hope we'll see a explosion of innovation that comes out and I hope customers see the benefit of doing that on a open hybrid cloud model. >>No better time now than before. All the things are really kind of teed up and lined up to provide that innovation. Uh, great to have you on the cube. Take a quick second to explain to the folks watching in the community What is red hat 2021 about this year? And red hat someone, I'll see. We're virtual and we're gonna be back in a real life soon for the next event. What's the big takeaway this year for the red hat community and the community at large for red hat in context of the market? >>You know, I think redhead, you'll keep seeing us push open source based innovation. There's some really exciting spaces, whether that is getting closer and closer towards edge, which opens up incredible opportunities or providing that choice, even down to consumption model like cloud managed services. And it's in that drive to let customers have the tools to build the next incredible innovations for him. So, And that's what summit 2021 is going to be about for us, >>awesome And congratulations to, to the entire team for the donation to the academic community, Open cloud initiative. And these things are doing to promote this next generation of SRS and large cloud scale operators and developers. So congratulations on that props. >>Thanks john. >>Okay. Matt Hicks, executive vice president of products and technology. That red hat here on the Cube Cube coverage of red hat 2021 virtual. I'm John Ferrier. Thanks for watching. Yeah.

>>Mhm Yes. Hello and welcome back to the cubes coverage of red hat summit 2021 virtual. I'm john for your host of the cube we're here with Hillary Hunter, the VP and CTO and IBM fellow of IBM cloud at IBM. Hillary, Great to see you welcome back, You're no stranger to us in the cube your dentist few times. Thanks for coming on. >>Thanks so much for having me back. Great to talk more today >>I believe I B M is the premier sponsor for red hat summit this year. No, I mean I think they're somewhat interested in what's happening. >>Yeah, you know, somebody is such a great event for us because it brings together clients that, you know, we work together with red head on and gives us a chance to really talk about that overall journey to cloud and everything that we offer around cloud and cloud adoption um, and around redheads capabilities as well. So we look forward to the summit every year for sure. >>You know, the new IBM red hat relationship obviously pretty tight and successful seeing the early formations and customer attraction and just kind of the momentum, I'll never forget that Red hat something was in SAN Francisco. I sat down with Arvin at that time, uh, Red hat was not part of IBM and it was interesting. He was so tied into cloud native. It was almost as if he was dry running the acquisition, which he announced just moments later after that. But you can see the balance. The Ceo at IBM really totally sees the cloud. He sees that experience. He sees the customer impact. This has been an interesting year, especially with Covid and with the combination of red hat and IBM, this cloud priority for IT leaders is more important than ever before. What's your, what's your take on this? Because clearly you guys are all in on cloud, but not what people think, what's your, what's your view on this? >>Yeah. You know, from, from the perspective of those that are kind of data oriented IBM Institute for Business Value, did lots of studies over the last year, you know, saying that over 60% of leaders feel, you know, increased urgency to get to the cloud, um they're intending to accelerate their program to the cloud, but I think, you know, just even as consumers where each very conscious that our digital behaviors have changed a lot in the last year and we see that in our enterprise client base where um everything from, you know, a bank, we work that that that had to stand up their countries equivalent of the payroll protection program in a matter of weeks, which is just kind of unheard of to do something that robust that quickly or um, you know, retail obviously dealing with major changes, manufacturing, dealing with major changes and all consumers wanting to consume things on an app basis and such, not going into brick and mortar stores and such. And so everything has changed and months, I would say have sort of timeframes of months have been the norm instead of years for um, taking applications forward and modernizing them. And so this journey to cloud has compressed, It's accelerated. And as one client I spoke with said, uh, in the midst of last year, you know, it is existential that I get to cloud with urgency and I think That's been that has been the theme of 2020 and now also 2021. And so it is, it is the core technology for moving faster and dealing with all the change that we're all experiencing. >>That's just so right on point. But I got I want to ask you because this is the key trend enterprises are now realizing that cloud native architecture is based on open source specifically is a key architectural first principle now. >>Yeah. >>What's your, what, what would you say to the folks out there who were listening to this and watching this video, Who were out in the enterprise going, hey, that's a good call. I'm glad I did it. So I don't have any cognitive dissidence or I better get there faster. >>Yeah. You know, open source is such an important part of this conversation because I always say that open source moves at the rate and pays a global innovation, which is kind of a cute phrase that I really don't mean it in anyways, cute. It really is the case that the purpose of open sources for people globally to be contributing. And there's been innovation on everything from climate change to you know, musical applications to um things that are the fundamentals of major enterprise mission critical workloads that have happened is everyone is adopting cloud and open source faster. And so I think that, you know this choice to be on open source is a choice really, you know, to move at the pace of global innovation. It's a choice too um leverage capabilities that are portable and it's a choice to have flexibility in deployment because where everyone's I. T is deployed has also changed. And the balance of sort of where people need the cloud to kind of come to life and be has also changed as everyone's going through this period of significant change. >>That's awesome. IBM like Red has been a long supporter and has a history of supporting open source projects from Lenox to kubernetes. You guys, I think put a billion dollars in Lenox way back when it first started. Really power that movement. That's going back into the history books there. So how are you guys all collaborating today to advance the open source solutions for clients? >>Yeah, we remain very heavily invested in open source communities and invested in work jointly with Red Hat. Um you know, we enabled the technology known as um uh Rackham the short name for the Red Hat advanced cluster management software, um you know, in this last year, um and so, you know, provided that capability um to to become the basis of that that product. So we continue to, you know, move major projects into open source and we continue to encourage external innovators as well to create new capabilities. And open source are called for code initiatives for developers as an example, um have had specific programs around um uh social justice and racial issues. Um we have a new call for code out encouraging open source projects around climate change and sustainable agriculture and all those kind of topics and so everything from you know, topics with developers to core product portfolio for us. Um We have a very uh very firm commitment in an ongoing sustained contribution on an open source basis. >>I think that's important. Just to call out just to kind of take a little sidebar here. Um you guys really have a strong mission driven culture at IBM want to give you props for that. Just take a minute to say, Congratulations call for code incredible initiative. You guys do a great job. So congratulations on that. Appreciate. >>Thank you. Thank you. >>Um as a sponsor of Red Hat Summit this year, I am sponsoring the zone Read at um you have you have two sessions that you're hosting, Could you talk about what's going on? >>Yeah, the the two sessions, so one that I'm hosting is around um getting what we call 2.5 x value out of your cloud journey. Um and really looking at kind of how we're working with clients from the start of the journey of considering cloud through to actually deploying and managing environments and operating model on the cloud um and where we can extract greater value and then another session um that I'm doing with Roger Primo, our senior vice President for strategy at IBM We're talking about lessons and clouded option from the Fortune 500, so we're talking there about coca cola european bottling partners, about lumen technologies um and um also about wonderman Thompson, um and what they're doing with us with clouds, so kind of two sessions, kind of one talking a sort of a chalkboard style um A little bit of an informal conversation about what is value meaning cloud or what are we trying to get out of it together? Um And then a session with roger really kind of focused on enterprise use cases and real stories of cloud adoption. >>Alright so bottom line what's going to be in the sessions, why should I attend? What's the yeah >>so you know honest honestly I think that there's kind of this um there's this great hunger I would say in the industry right now to ascertain value um and in all I. T. Decision making, that's the key question right? Um not just go to the cloud because everyone's going to the cloud or not just adopt you know open source technologies because it's you know something that someone said to do, but what value are we going to get out of it? And then how do we have an intentional conversation about cloud architecture? How do we think about managing across environments in a consistent way? Um how do we think about extracting value in that journey of application, modernization, um and how do we structure and plan that in a way? Um that results in value to the business at the end of the day, because this notion of digital transformation is really what's underlying it. You want a different business outcome at the end of the day and the decisions that you take in your cloud journey picking. Um and open hybrid, multi cloud architecture leveraging technologies like IBM cloud satellite to have a consistent control plan across your environments, um leveraging particular programs that we have around security and compliance to accelerate the journey for regulated industries etcetera. Taking intentional decisions that are relevant to your industry that enable future flexibility and then enable a broad ecosystem of content, for example, through red hat marketplace, all the capabilities and content that deploy onto open shift, et cetera. Those are core foundational decisions that then unlock that value in the cloud journey and really result in a successful cloud experience and not just I kind of tried it and I did or didn't get out of it what I was expecting. So that's really what, you know, we talk about in these in these two sessions, um and walk through um in the second session than, you know, some client use cases of, of different levels and stages in that cloud journey, some really core enterprise capabilities and then Greenfield whitespace completely new capabilities and cloud can address that full spectrum. >>That's exciting not to get all nerdy for a second here, But you know, you bring up cloud architecture, hybrid cloud architecture and correct me if I'm wrong if you're going to address it because I think this is what I'm reporting and hearing in the industry against the killer problem everyone's trying to solve is you mentioned, um, data, you mentioned control playing for data, you mentioned security. These are like horizontally scalable operating model concepts. So if you think about an operating system, this is this is the architecture that becomes the cloud model hybrid model because it's not just public cloud cloud native or being born in the cloud. Like a startup. The integration of operating at scale is a distributed computing model. So you have an operating system concept with some systems engineering. Yeah, it sounds like a computer to me, right. It sounds like a mainframe. Sounds like something like that where you're thinking about not just software but operating model is, am I getting that right? Because this is like fundamental. >>Yeah, it's so fundamental. And I think it's a great analogy, right? I think it's um you know, everyone has kind of, their different description of what cloud is, what constitutes cloud and all that kind of thing, but I think it's great to think of it as a system, it's a system for computing and what we're trying to do with cloud, what we're trying to do with kubernetes is to orchestrate a bunch of, you know, computing in a consistent way, as, you know, other functions within a single server do. Um What we're trying to do with open shift is, you know, to enable um clients to consume things in a consistent way across many different environments. Again, that's the same sort of function um conceptually as, you know, an operating system or something like that is supposed to provide is to have a platform fundamentally, I think the word platform is important, right? Have a platform that's consistent across many environments and enables people to be productive in all those environments where they need to be doing their computing. >>We were talking before we came on camera about cloud history and we were kind of riffing back and forth around, oh yeah, five years ago or six years ago was all the conversations go to the cloud now, it's like serious conscience around the maturity of cloud and how to operate that scale in the cloud, which is complex, it's complex system and you have complexity around system complexity and novelty complexity, so you have kind of all these new things happening. So I want to ask you because you're an IBM fellow and you're on the cloud side at IBM with all this red hat goodness you've got going on, Can you give us a preview of the maturity model that you see the IBM season, that red hats doing so that these architectures can be consistent across the platforms, because you've got def sec ops, you've got all these new things, you've got security and data at scale, it's not that obviously it's not easy, but it has to be easier. What's what's the preview of the maturity model? >>Yeah, you know, it really is about kind of a one plus one equals three conversation because red hats approach to provide a consistent platform across different environments in terms of Lennox and Kubernetes and the open shift platform um enables that first conversation about consistency and maturity um in many cases comes from consistency, being able to have standards and consistency and deployment across different environments leads to efficiency. Um But then IBM odds on that, you know, a set of conversations also around data governance, um consistency of data, cataloguing data management across environments, machine learning and ai right bringing in A. I. For I. T. Operations, helping you be more efficient to diagnose problems in the IT environment, other things like that. And then, you know, in addition, you know, automation ultimately right when we're talking about F. R. I. T. Ops, but also automation which begins down at the open shift level, you know with use of answerable and other things like that and extends them up into automation and monitoring of the environment and the workloads and other things like that. And so it really is a set of unlocking value through increasing amounts of insight, consistency across environments, layering that up into the data layer. Um And then overall being able to do that, you know efficiently um and and in a consistent way across the different environments, you know, where cloud needs to be deployed in order to be most effective, >>You know, David Hunt and I always talk about IBM and all the years we've been covering with the Cube, I mean we've pretty much been to every IBM events since the Cube was founded and we're on our 11th year now watching the progression, you guys have so much expertise in so many different verticals, just a history and the expertise and the knowledge and the people. They're so smart. Um I have to ask you how you evolved your portfolio with the cloud now um as it's gone through, as we are in the 2021 having these mature conversations around, you know, full integration, large scale enterprise deployments, Critical Mission Mission Critical Applications, critical infrastructure, data, cybersecurity, global scale. How are you evolve your portfolio to better support your clients in this new environment? >>Yeah, there's a lot in there and you hit a lot of the keywords already. Thank you. But but I think that you know um we have oriented our portfolio is such that all of our systems support Red hat um and open shift, um our cloud, we have redhead open shift as a managed service and kubernetes is at the core of what we're doing as a cloud provider and achieving our own operational efficiencies um from the perspective of our software portfolio, our core products are delivered in the form of what we refer to as cloud packs on open shift and therefore deploy across all these different environments where open shift is supported, um products available through Red hat marketplace, you know, which facilitates the billing and purchasing an acquisition and installation of anything within the red hat ecosystem. And I think, you know, for us this is also then become also a journey about operational efficiency. We're working with many of our clients is we're kind of chatting about before about their cloud operating model, about their transformation um and ultimately in many cases about consumption of cloud as a service. Um and so um as we, you know, extend our own cloud capabilities, you know, out into other environment through distributed cloud program, what we refer to as as IBM cloud satellite, you know, that enables consistent and secure deployment of cloud um into any environment um where someone needs, you know, cloud to be operated. Um And that operating model conversation with our clients, you know, has to do with their own open shift environments that has to do with their software from IBM, it has to do their cloud services. And we're really ultimately looking to partner with clients to find efficiency in each stage of that journey and application modernization in deployment and then in getting consistency across all their environments, leveraging everything from uh the red hat, you know, ACM capabilities for cluster management up through a i for beauty shops and automation and use of a common console across services. And so it's an exciting time because we've been able to align our portfolio, get consistency and delivery of the red half capabilities across our full portfolio and then enable clients to progress to really efficient consumption of cloud. >>That's awesome. Great stuff there. I got to ask you the question that's on probably your customers minds. They say, okay, Hillary, you got me sold me on this. I get what's going on, I just gotta go faster. How do I advance my hybrid cloud model faster? What are you gonna do for me? What do you have within the red hat world and IBM world? How are you gonna make me go faster? That's in high quality way? >>Yeah. You know, we often like to start with an assessment of the application landscape because you move faster by moving strategically, right? So assessing applications and the opportunity to move most quickly into a cloud model, um, what to containerized first, what to invest in lift and shift perspective, etcetera. So we we help people look at um what is strategic to move and where the return on investment will be the greatest. We help them also with migrations, Right? So we can help jump in with additional skills and establish a cloud center of competency and other things like that. That can help them move faster as well as move faster with us. And I think ultimately choosing the right portfolio for what is defined as cloud is so important, having uh, an open based architecture and cloud deployment choice is so important so that you don't get stuck in where you made some of your initial decisions. And so I think those are kind of the three core components to how we're helping our clients move as quickly as possible and at the rate and pace that the current climate frankly demands of everyone. >>You know, I was joking with a friend the other night about databases and how generations you have an argument about what is it database, what's it used for. And then when you kind of get to that argument, all agree. Then a new database comes along and then it's for different functions. Just the growth in the internet and computing. Same with cloud, you kind of see a parallel thing where it's like debate, what is cloud? Why does he even exist? People have different definitions. That was, you know, I mean a decade or so ago. And then now we're at almost another point where it's again another read definition of, okay, what's next for cloud? It's almost like an inflection point here again. So with that I got to ask you as a fellow and IBM VP and Cto, what is the IBM cloud because if I'm going to have a discussion with IBM at the center of it, what does it mean to me? That's what people would like to know. How do you respond to that? >>Yeah. You know, I think two things I think number one to the, to the question of accelerating people's journeys to the cloud, we are very focused within the IBM cloud business um on our industry specific programs on our work with our traditional enterprise client base and regulated industries, things like what we're doing in cloud for financial services, where we're taking cloud, um and not just doing some sort of marketing but doing technology, which contextualize is cloud to tackle the difficult problems of those industries. So financial services, telco uh et cetera. And so I think that's really about next generation cloud, right? Not cloud, just for oh, I'm consuming some sauce, and so it's going to be in the cloud. Um but SAS and I SV capabilities and an organization's own capabilities delivered in a way appropriate to their industry in in a way that enables them to consume cloud faster. And I think along those lines then kind of second thing of, you know, whereas cloud headed the conversation in the industry around confidential computing, I think is increasingly important. Um It's an area that we've invested now for several generations of technology capability, confidential computing means being able to operate even in a cloud environment where there are others around um but still have complete privacy and authority over what you're doing. And that extra degree of protection is so important right now. It's such a critical conversation um with all of our clients. Obviously those in things like, you know, digital assets, custody or healthcare records or other things like that are very concerned and focused about data privacy and protection. And these technologies are obvious to them in many cases that yes, they should take that extra step and leverage confidential computing and additional data protection. But really confidential computing we're seeing growing as a topic zero trust other models like that because everyone wants to know that not only are they moving faster because they're moving to cloud, but they're doing so in a way that is without any compromise in their total security, um and their data protection on behalf of their clients. So it's exciting times. >>So it's so exciting just to think about the possibilities because trust more than ever now, we're on a global society, whether it's cyber security or personal interactions to data signing off on code, what's the mutability of it? I mean, it's a complete interplay of all the fun things of uh of the technology kind of coming together. >>Absolutely, yeah. There is so much coming together and confidential computing and realizing it has been a decade long journey for us. Right? We brought our first products actually into cloud in 2019, but its hardware, it's software, it services. It's a lot of different things coming together. Um but we've been able to bring them together, bring them together at enterprise scale able to run entire databases and large workloads and you know um pharmaceutical record system for Germany and customer records for daimler and um you know what we're doing with banks globally etcetera and so you know it's it's wonderful to see all of that work from our research division and our developers and our cloud teams kind of come together and come to fruition and and really be real and be product sizable. So it's it's very exciting times and it's it's a conversation that I think I encourage everyone to learn a little bit more about confidential computing. >>Hillary hunter. Thank you for coming on the cube. Vice President CTO and IBM fellow which is a big distinction at IBM. Congratulations and thanks for coming on the Cuban sharing your insight. Always a pleasure to have you on an expert always. Great conversation. Thanks for coming on. >>Thanks so much for having me. It was a pleasure. >>Okay, so cubes coverage of red Hat Summit 21 of course, IBM think is right around the corner as well. So that's gonna be another great event as well. I'm john Feehery, a host of the cube bringing all the action. Thanks for watching. Yeah.