(upbeat music) >> Okay, welcome back everyone to theCUBE's coverage of AWS re:Invent 2021. We're here live in Las Vegas for an in-person event. Of course, it's a hybrid event, virtual online. Many people online. A lot of people here on the event, a lot of action. cloud going next generation, mainframe transformation, more analytics, more chips, everything's faster and cheaper and getting better and better in the cloud. We've got the great coverage. We've got two great guests. We got Justin Hooper vice president of Global Operations Infrastructure Ingram Micro and JP Perot, EVP of Telecom Media and Technology and AWS executive sponsor for Atos. Gentlemen, thank you for joining me on theCUBE. >> Thank you. >> Thank you, glad to be here. >> So what is it about the conference so far? Pretty good, like a lot of people here? >> Super exciting. >> 27,000 people showing up. >> It's amazing. >> Real people not workers. >> Yeah, it feels almost normal. >> Yeah I can't believe the turnout. >> Got a great topic, you guys working together you got mainframe, you got analytics, transformation. Let's get into it. Let's start by introducing what you guys do, your company, and why you are here. JP, we'll start with you. >> Yeah, I can start. Okay, so yeah, so I'm leading, you know, in Atos all the cloud business and telecom media technology, Atos is a big company is a service and technology company, 11 billion Euro business, and we are leading all the transformation to cloud and also, all what is related to hybrid cloud transformation. Also with security. We are number two in the world in terms of security and cybersecurity. We have developed for so long lasting relationship with AWS. We have been an advanced technology partner of AWS for now many years, since 2013. And we have developed a specific program, you know, regarding manufacturing transformation and mega trends. So this is why we are super excited to be here with you Justin today, thank you, by the way having Ingram Micro with us, Justin. >> I appreciate it, it's good talking to you. Good to be here. >> And I'm Justin Hooper, I work for a Ingram Micro. I run their Global Infrastructure and IT operations. Ingram Micro is one of the world's largest technology suppliers, technology solutions, and cloud platform and services. >> Well, great for the intro. Thanks for that set up, a lot of action going on. You guys have recently purchased, you guys got the transformation in the cloud. What is the movement to the cloud? Take us through the current situation. >> Yeah, we see, a big acceleration and especially due to COVID situation. We have seen acceleration of transformation to cloud. There is a lot to do, a lot to do because many business critical application, which have not been transformed. And also, especially all the applications which are sitting on top of mainframe that is why executive discussion we are with Ingram at the moment is how we can help Ingram with some of the applications that are on mainframe to transform and design the future. >> Justin, take us through the transformation that they're helping you with, what's the key challenge? What problem are they solving? Take us through the specifics. >> Yeah, it's interesting because I'm actually a lover of the mainframe, I think most of the people at AWS would think, the mainframes, didn`t they put the rockets on the moon. That's old technology, but mainframes are still fantastic platforms. We, have great success, great resiliency with Atos . We are on the most modern chips, but there are a lot of restrictions. You know, you really have to size your mainframe for your peak workloads. You don't have the ability to separate segments, scale horizontally, and then there are really nuanced. Like it's hard to get resources that know mainframes, to be honest with you, it is just, there's a people issue there industry-wide, and we're not different than any other company and compete for resources, both on the system side and on the programming side. And we really want to look at how we can make a massive leave, if we're going to leave the mainframe, how do we start a journey where we can end up really being able to take advantage of horizontal scalability, the ability to have a utility compute model where we're really paying as we go, because that is the opposite how the mainframe model works today. >> Talk about the refactor 'cause I know I've covered a lot of mainframe stuff with IBM in the past and how banks are still using it. Everyone is they're real applications. They're mission critical. How are they integrating into the digital transformation. Containers, kubernetes are hot right now. You're starting to see a lot more integration. How do your customers and how do you guys see refactoring happening? I can see the integration, but that as the refactoring come in. >> There's really what we've learned with our partnership is there are really a couple of ways to do the refactoring. You can convert your old Cobalt code to something else like Java. And there are tools and companies out there that do that. Or you can really build a plan where you can effectively emulate your mainframe on commodity computing and through a relatively deep analysis with Atos, the recommendation that we're looking at is that ability to first get off of the hardware, get off of that reliance on the platform, but not jump all the way to modify your code to Java. There's not a lot of value in going from Cobalt to Java, for example, if you're not making improvements in your programs, adding business capabilities. So the journey starts with get off the hardware, but then it allows you to go and say, we are going to break up those complex programs. We are going to separate the data differently. And once you do that, you can start to take advantage of containers and start to separate yourself even more and really get into the cloud. But, there are ways to piece your way through that. >> You know that's really good insight, JP, I'd love to get your reaction on this too, because what Justin's getting at is what we hear a lot from experienced CIOs of large companies that have a lot of existing stuff. And the theme is and the word they use is you don't want to touch the white hot core. Meaning it's so mission critical that if you mangle it too hard, touch it too hard a lot of bad things happen. So this idea of push things out to the cloud that around the edges, and then work your way slowly in is a risk management and practical approach. >> Not exactly, you said it right, its exactly a risk management So, and Justin explain it different factors, which come to the end point in terms of decision there is one issue regarding competencies, because their lack of competency in the markets. There is what kind of business critical apps you have. There is a transformation as such, you know, as Justin explain you can record, or you can move, you know, to a different platform. So, each time it's a program, it's a program and analysis that we do with our customer advising the customer about, hey, based on your critical application, what is the right journey, what is the right transformation to do the right risk management? >> Justin you're taking the hot core I saw you nodding your head. You're like, yeah, what's your take on that? >> Well, yeah, I agree with you. And that fear, uncertainty and doubt it's kept people on the mainframe for a really long time. The technology has caught up and the expertise where just as JP said, you've got to be really careful in the way you plan it, and you've got to make sure that you can always get back. And so the approach that we're looking at taking is, you're able to accommodate more risk if there's an easy roll back plan, and some of the new new technologies and processes are going to allow that, so, you know, if I screw this up, I get to go find a job someplace else. So I'm aware of the white hot core, but I am confident it can be done. >> Yeah, and then technology, if you don't have to kill the old to bring in the new, you can do both, and I like your approach. I think that's a success path that people are talking about it's well documented. But at the end of the day, we're back in distributed computing, I mean, I want to get this at the end, but I want to give you guys some time to think about it. As cloud becomes everywhere as Adam Selipsky talks about, it's not just about mainframes, this it's a distributed computing paradigm. So we're going to come back to that, but let's get into the SAP Redshift `cause I think that's something that you guys are working on I think that's worth calling out here. Analytics is huge, tell us what's going on there, how you guys are working together on that. >> Yeah, so we have designed a high level of competency around SAP, and especially the migration and the SAP Redshift. So we have designed this program also with AWS and is something we are discussing at the moment also with Ingram. So we see an acceleration of this trajectory. It has been also highly pushed by SAP as well. And also we are one of the strongest partner of SAP and we see many many customers engage into this transformation at the moment. >> The cloud really gives you a lot of advantages when you're doing migration, especially around a pre-existing software, like SAP was pretty big, complex mission critical So you can throw compute at it, a lot of cool capabilities. >> Yeah, that's true, but you need, you still need to configure a lot of things as well, because it's, you need to customize and you have to really fine tune, you know, what is it, what is going to be available to the customer needs and to what you need in your company as well. >> Okay, lets get back to what Justin was saying about emulation, I mean, I can run SAP (laughs) on Amazon. I mean, we've talked about it, I wrote a story about this prior to the event called Superclouds. You can build these super applications that combine things that you never would have thought was possible. SAP running on Amazon or Ford can come to Redshift when you need it, so you have a lot more flexibility. This is now the new normal. >> Correct. >> Correct. Or Justin maybe you want also to comment on that, you know? >> You know, the great thing about being on Redshift is we pick that as a platform for our data warehouse a number of years ago, and there were basically analytics capabilities, but what we're seeing a lot here at re:Invent is as Amazon is catching up with their out of the box ML and AI capabilities in Redshift. So it feels good that we pick the platform that they're growing the capabilities in right, as we're advancing out of more of the traditional analytics and trying to go to that machine learning. And one of the things that we work at the Atos on is migrating off of SAPBW and saying, maybe we don't need that as a data and reporting platform, if we're solid with Redshift and we certainly don't need both. So we're working with them to look at the case to move all the way to Redshift, and then we can run our analytics and build the ML in that. >> And you know, that was a big theme in the keynote. This purpose-built capabilities, it's almost like having, you know, if you're building a building, you got iron steel girders made for you. You got this now better value in the platform to build on. This brings up the notion of distributed computing. >> JP: Yeah. >> In a way there's the same game, different generation. I mean, isn't it? You've got to integrate this still transformations inflection points, this is current. I feel like this now more than ever is a time where you can actually roll it all together with a little help from your friends or if Amazon's got somebody, you know, who want to reinvent the wheel. What's your reaction to that? 'Cause we've seen the movie before, when it's hard. Now, it seems easier, maybe its not. >> Yeah, we see three layers co-existing in more more. We see that, see application on data will be spread over three dimensions there will be edge computing there will be private cloud and there will be public cloud. And we see more more pressure in the direction that many customers are saying, hey, where should I put my data? This spot will go on and be processed at the edge, this spot will be process in the public cloud. There is also one of the capability where we in Atos we are able to advise customers about what is the best way to process your data if you have a lot of latency, you can process at the edge. You know, there's less equipment, you can process the public cloud. So, we see this coexistence of model. >> Justin what's your take on this distributed computing throwback concept, because look at the rise of companies like Snowflake. Where'd they come from? They're on Amazon, they pick the cloud. Now they're on going to other clouds. You can build a supercloud. You can actually build this out now faster. What's your take? >> Yeah, I, my take is that it's a pendulum and it swings back and forth, and like you said, there was client server and then everything was web-based. And a lot of things look a lot like the mainframe, put everything in the cloud and then attached to it. And then all of a sudden, you know what? We need edge computing, pull some stuff back out of the cloud and put it where we need it. So, it's going to continue to evolve. What I have noticed that I like more is, the major home one swings and statements like I want to get out of the data center business and go to the cloud, I hear those less. And people are realizing there's there's hybrid. There's purpose build computing like you said, and we need to make sure that we're putting our data where it needs to be, putting our compute where it needs to be. And that's going to change on our customer base and evolving technologies 5G is changing the whole world around edge computing. So I'm enjoying the ride, I'm glad I'm in technology because I get to move with the ebbs and flows, but I don't think we're ever going to land. I think it's going to keep moving. >> Yeah that's a totally fair point where it's fun as a technologist, but you're right. If you're operating with cloud, it doesn't matter if you're on premises or edge or public cloud, it's the same thing (laughs). >> Justin: Yeah. >> It's just pick your, pick, your use case. >> Justin: Right, your use case- >> I want a low latency at the edge. I'm not going to move my data, send it to cloud. Of course, we're going to leave it there. >> Yeah. >> If you're on premise before- >> We've already move workloads back and forth. And a lot of companies are doing that too, you know? >> I think that's what they're getting at when they talk about cloud everywhere. I think that's their way of saying, okay, hybrid is real. They won't ever say multicloud though. (all laughing) Not yet. (all laughing) >> Won't hear that here. >> All right, quick summary. What do you guys do? And what's the future hold for the relationship. You guys got a good thing going on? Take us through what's the future look like. >> Yeah, for me it's a big thank you for the partnership with Ingram. So we are extremely excited by what we can do for you. And in terms of advising your transformation and, you know, I hope that you get the right service and the right advice, you know, from Atos. >> Yeah, it's been great. We, we've appreciated. We've been, we started as a mainframe customer and now they're helping to advise on how we could get off the mainframe. I mean really cannibalizing one of the other areas there in the spirit of evolving and partnership, and you guys are bringing a ton of expertise and the way you guys attack the account and we centralized through our account team is very helpful. You're very aware of what's going on on all sides of the business. >> Well, congratulations. >> That's a big part of the theme, the keynote today on, on ad about mainframe transmission. But at the end of the day, it's about modern infrastructure, modern application development. >> Justin: Absolutely. >> Getting out, having set the table for the next generation. >> JP: Yeah. >> Thanks for coming on theCUBE and you guys want to get a quick plug in real quick for the company talk about Atos and Ingram. Give a quick plug for what you guys are working on. >> Sorry- >> Give a quick plug about what you`re working on. Give a quick commercial one minute about the company. >> One minute. >> Yeah. >> At Atos we're really transforming or leading the industry in terms of secured transformation to cloud security will be more and more important as data is everything about where is the value. So we are really making sure that our customers, they get to maximize, they can maximize the value around data transformation to cloud in a secured way. >> Justin, JP, thanks for coming on theCUBE. Really appreciate the insights. Don't touch the hot core and make, take your time. Have a good time, you're watching theCUBE, the official broadcasting of AWS re:Invent leader in tech coverage, theCUBE. Thanks for watching. (upbeat music)

(upbeat techno music) >> Live from Las Vegas. It's theCUBE covering Dell Technologies World 2019. Brought to you by Dell Technologies and its ecosystem partners. >> Welcome back to Las Vegas, Lisa Martin with Stu Miniman. You're watching theCUBE live from day one of our coverage of Dell Technologies World 2019. There's about 15,000 people here, about 4,000 of Dell Technologies' partners, lots of folks. We're pleased to welcome to theCUBE, a couple of guests. We've got Melanie De Vigan, VP of Digital Workplace Portfolio from Atos. Melanie, it's great to have you on theCUBE. >> Thank you for having me. >> And we have Justin Grimsley, Product Marketing from VMware. Justin, thank you for joining Stu and me as well. >> Yep, good to be here. >> So, workplace. One of the big themes from this morning's keynote, one of the themes that we've actually heard all day is, we talk about digital transformation, we talk about it at every event. It's essential. But, people are essential for digital transformation. And we have this workforce that has changed so much in the last few years. Some of the stats that were shown this morning, I think I remember seeing 81% of people now work outside of a traditional office. And about half the people, and I'm one of them, and I know Stu is too, work in at least three different places in a single week. So, in order to enable digital transformation to be real, it's got to start with the people. So Melanie, talk to us about transformation of the modern workplace, and what Atos is doing to facilitate that. >> Yeah, I think we've seen a big change in the market lately, where in the past successful organization would be focusing on employee productivity, but lately all of them realize the importance of employee engagement and employee experience. This morning, Pat mentioned the fact that ideally, engaged employees were going to drive success of the company. What is very striking is that if you compare that to the fact Gallup released a study last year saying that 87 percent of employees are not engaged. So you can see the huge gap, and how by focusing on this employee engagement, by transforming the employee experience, you are actually going to contribute to the business. And I think, really, when we talk about employee experience, we need to look at it from a wholistic point of view. So at Atos, we used to talk about "people, places, and platforms." "People" is all about the company culture, how people are engaged, what type of leadership in the company. It is about digital inclusion and accessibility. "Places," of course, is about from where you work. You mentioned the stat about mobility and from where people work. It's also about the building itself, and how the building is going to foster collaboration. And of course the "platform," it is about the IT, the technology that is going to enable all of that. What are the tools that you give to the end user, to the employee to be able to perform his jobs, so it starts with a device, it is about the collaboration solutions that are going to foster and help changing the mindset, changing the way people work. >> Alright. So, Justin, how does VMware tie into the picture that Melanie was painting there? >> Absolutely, I think this is why Atos, VMware, and Dell are such good partners, right? Our visions are so well-aligned to that employee experience that you guys were talking about. For us, the three major trends that we see are that users are no longer tied to the company network. They're not tethered to their cubicle with that Cat 5 cable. They're working shoulder-to-shoulder with their customers, or in the coffee shop, or at home. They're accessing all sorts of different types of applications now. It's not just legacy Windows apps, it's SaaS applications, it's virtual apps. And then the third trend is, they're using all sorts of different devices. And so, as companies are really looking to attract and retain talent, they want to enable employees to use the devices that they love, to be productive how they want to be productive. And so, many employees that we see now use two or three different devices. They might use their Dell laptop to be really productive and crank out work. They might use their iPhone or their Android device as well, and the applications that are available to them there. And so, we really see these three trends comin' together as a way for organizations to change how their employees work. And Atos and VMware and Dell are coming together to help enable that for our customers. >> So Justin, I don't know if it struck others, but for me, seeing Pat Gelsinger and Satya Nadella up on stage together was impressive, because Dell and Microsoft have a long, long relationship. VMware and Microsoft, it's an interesting relationship there, you know. End-user is something that we actually have seen Sanjay and his team with end-user computing growing out. But, can you comment on the news of the week, as well as the importance of bringing Microsoft into this discussion? >> Absolutely, you know, I think with everything that you said, the one thing I would say is that I think VMware compliments Microsoft very well. So, when we look at the end-user computing space, for years now, we've looked at how can we-- as Microsoft introduced Windows 10-- how can we bring that into the fold and extend a great experience on Windows 10. When you look at Office 365, I just did a session earlier and the number of hands that went up that are deploying Office 365, VMware has a great story around conditional access for those applications and providing a great experience. And so I think what we see now is this: customers are making different investments. Some customers are making investments in Microsoft 365, and others are making them in Workspace ONE, and so now, we can maximize those investments so they can get the most out of their end-point, and their end-user computing strategy. It's really a "one plus one equals three" scenario. And then we have services from companies like Atos, and Dell, and others that are coming around to help drive transformation across any of the devices that employees are using. Whether it is a Windows 10 PC, or whether it is a mobile device and accessing Office and other applications on it. So it was really powerful to see, I think, Satya, Pat, and Michael onstage this morning, coming together. >> Indeed, it was really, really impressive. I think just the fact that they were onstage were the most powerful message, for end-user computing at least. >> So Melanie, we look at this importance of employee engagement-- you mentioned, Justin, talent attraction and retention. What is Atos doing to actually-- there's got to be another-- maybe it's employee transform-- well, it's workplace transformation, really, right? But how are you kind of leading in that, to really drive business outcomes, like a business being able to generate more revenue, because "hey, we're enabling our workforce "and the way that they want to work." And as Justin said, with all the devices that they say, "let me use what I'm familiar with." >> Yeah, so one thing for us which is really key, is that, I mean, all this employee experience, it's a really nice story, but if we just talk about it, it remains a story, and we can't really do anything about it. I heard many people say this morning, "it's about the data." And this is what we're doing. What we're really looking at now is how do we make this employee experience tangible? So, it's all about moving toward a data-driven approach. So we are going to collect all the data. So again, we have this "people, places, and platforms," so we're going to collect the data from the devices. At Atos, we manage 4.5 million devices, so this is that much data matrix that we can collect to understand what's happening and what's going. It is the same with the feedback of the End-user, understanding how they work, like on a collaboration solution, understanding how people are working with each other, how they can change, so that at the end, we are going to be able to give some insight. We're going to be able to give some insight to the employee, so that again, he can understand what he can do differently. We're also going to give insight to the organization. It can be the IT department, it can be the HR department, it can be the facilities. It's all about bringing all of that together, so we give this wholistic vision and be able to drive the change, this is what we're targeting. >> Yeah, I love that. If you look at digital transformation, one of the most important things is, I need to have my business being driven by data, I have to have those feedback loops. What I'm curious is, what are some of those key measurements, how are you looking at these environments today when I have all this data, versus maybe how I would have done things in the past? >> Yeah, so, indeed, and this is where today, we are working away from this service-level agreement, the way we used to measure the IT services. People talk a lot about this watermelon effect, where it's all green outside, but red inside. So, all the KPI are green, meaning the server and infrastructure is working, but at the end, the end-user is not happy. So today, we are talking about experience-level agreements, so it's about defining metrics, which are really going to show how does the service perform, and what makes sense for the employee at the end. So more or less, we're moving away from the infrastructure, and we're getting closer to the business, taking measures that are really going to show what is going to impact the business. >> Just to build on that, I think what's one of the interesting things that we see now is that IT teams aren't just measured on cost. They're being measured more and more on employee experience. We're seeing companies do employee net promoter scores now. How can we elevate the employee experience from the day they start at the company, to the day they retire, right? And so, I think that's what Atos and others are really bringing together for their customers, and for our joint customers. >> And that's cultural impact at a business. Whether it's a business that's been around 35 years, as long as Dell has, or one that's maybe younger. That cultural change is hard. We talk about that at every event, with every company, because, especially for veteran employees, or more seasoned, who are used to certain ways of doing business, that company has to transform culturally as well, for their digital transformation to enable them to become the leaders that they want. So I'm hearing that one of the things that Atos is enabling is that cultural transformation. It's not just about having new KPIs and changing SLAs, it's driving change for entire business units to impact that whole company. >> Yeah, and to be able to do that-- So we still want to be data-driven, so we're going to get this KPI, but with KPIs, there is no "one size fits all." There is not one KPI that we're going to apply to all our customers. It is a war that we're doing with the customer to understand what is key for them. An example, which is a bit... I don't know if it's funny or interesting, is we have this customer for whom we have these tech bars, you know, the walk-in bar where an end-user can go and get coaching, support, help from a technician. And so, we had this customer where the tech bars were very successful, so there were more and more people going there. And because there were more and more people, they started queuing, and we said, "Okay, there's an issue. "we don't want people to be queuing." So we went into a discussion with the customer. At the beginning, everybody's idea was, "Okay, let's put more people behind the desk, "so they can help." And when we had this discussion with the customer, it turned out it was not a good solution, because it was a company with a very strong family culture, very centered about the relationship and the network, and these tech bars, they were meant to be a place where people can go and chat with each other, and share about what's going on. So, instead of putting more people behind the desk, we talked about adding coffee and cookies at the desk so people are willing to go. I mean, this is just an example, but it's just to say, it's not about measuring how long someone is going to wait at the desk, it's about understanding what is important for this customer, and then we can define with them the key matrix that we need to follow. >> That's excellent. And a tech bar, that's a bar I can get behind. (laughing) Melanie, Justin, thank you so much for joining Stu and me on theCUBE this afternoon, we appreciate your time and it's always exciting to hear how the employee experience is so pivotal and critical to digital transformation. >> Thanks for having us. >> Thank you very much. >> Oh, our pleasure. We're Stu Miniman, I'm Lisa Martin, and you're watching us live in Las Vegas. Day one of theCUBE's coverage of Dell Technology World's 2019. Thanks for watching. (electronic techno music)

>> Narrator: Live from Orlando, Florida, it's theCUBE. Covering ServiceNow Knowledge 17, brought to you by ServiceNow. >> Welcome back to Knowledge17 everybody. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante and I'm here with my cohost Jeff Frick. This is our fifth Knowledge, we're doing wall to wall coverage. This is day one, we'll be here for three days giving you all the keynotes, the announcements, talking to practitioners. We're going to talk to one of the leading partners now of ServiceNow. Michael Kollar, is the Senior Vice President and Chief Digital Officer of Vision, Strategy, and Engineering for Atos. Michael, welcome to theCUBE, thanks for coming on. >> Thanks for having me. >> Dave: You got a lot on your plate. >> I do. >> Dave: Talk about that role, I love that title. >> So, essentially what I do for Atos, I own, one, the vision and strategy of how we deliver, develop and deploy our services. And then second, I'm also accountable for how we engineer and build those services and bring 'em to market. >> Dave: Okay, so talk about your relationship with ServiceNow, how did it start, how'd you get into this space? >> So about two, three years ago we started a need to transform our service delivery platforms within Atos from the 196 different tool sets that we had across the global services that we provide to really find a better way to do it. We we're spending a lot of our time picking tools, integrating tools, trying to figure out what's the right tool for every little corner case. And we said to ourselves, "There's got to be a better way to do this." So we started to think about what were the key things we wanted in a ITSM service management platform going forward. And we thought about workflow, integration, orchestration, some of the key things that today are cornerstone to ServiceNow. And it led us down the path to find ServiceNow as our vendor partner of choice for service management and beyond. >> Okay, so how's that business going, what's the reaction been from your customers? And talk a little bit about the strategy. >> So from a business perspective I tell ya the customers love what we're doing. For the first time we're able to adapt at their rate of change and differentiate, or transform our services aligned to how they want to consume it and to align to their business. Typically in the past that was a very difficult process for us since everything was bespoke, we wrote code to do it. Now it's a configuration or an orchestration that we do with ServiceNow. So that part's been great. From an overall journey, I will tell you it's been hard. Given that we have a global customer base that we support in 72 different countries around the world, it's pretty hard to get to a standard platform, so it's taken us a considerable amount of time to get there. But the results have been, I think, extraordinary in the way that we can deliver the service, the revenue that we've created with it, and just the ability we're able to respond to customer needs with. >> So, can you talk, unpack the value flow for our audience? Just help us understand sort of, where ServiceNow adds value, where you guys add value, and then where the customers pick up, and what impact it's having on their business? >> Sure, so first question, where do we provide value? A couple of different areas, so, besides the service management discipline that we provide, we're a managed service provider, so all the platforms that go into running their private cloud and public cloud get built, designed, and deployed by Atos. So that's one of the areas. Second, as it relates to deploying ServiceNow in support of their needs, we have a set of accelerators, technologies, methodologies, and capabilities that we're able to deploy to allow them to consume our services with ServiceNow faster. Nice part about that is we have our own instance that we provide a shared service out of but we've adapted that so that if customers want their own instance of ServiceNow and want to grow and leverage that capability we're able to deploy it in their instance and let them take advantage of it, and then build with it as they want to adapt it or extend it for their enterprise. >> How about the technology integration challenges? You integrated your business and ServiceNow sort of into your business, I guess, what were the technology integration challenges that you faced and others that you're facing? >> So the first challenges we went through was just the complexity of the model that we wanted to support. So for us it wasn't just a single set of services it really is our entire global portfolio. So that is everything from cloud, our digital workplace solution, our large scale analytics, including our security offerings. So we had to integrate a global set of offerings into ServiceNow and the platforms that we use, so Amazon, Azure, Google, and other bespoke technologies, and writing the code to make that happen. >> So one of the big challenges when we talk to IT practitioners is migration from A to B. "We got to get from A to B and we don't want to "spend a billion dollars doing it and we got to do it fast." How did you deal with the migration from the legacy systems to where you are today? >> So we took an approach that we refer to as big box and little box. So the little box allowed us to take our green field services that had been built with ServiceNow and our net new customers that were consuming those services were deployed straight out onto those platforms, the new capability we built with ServiceNow. And what we've done with the legacy customers and our legacy services, as we work through either renewal strategies with our customers or they start to consume new services we migrate them onto the new platform to be able to leverage those services going forward. So it's an evolutionary process it's not a big bang. We have to do it in a very systematic way so we don't compromise the services that they consume from us that they in turn deliver to their internal IT departments or their customers from Atos. >> What are the big asks you're getting from customers and how are you advising them? >> So a big ask we get from customers is, "Can we leverage the IP that you've built "and help us extend that further, faster, with us?" And what we've done there is originally the frameworks we built at Atos we refer to as the Atos technology framework, it was a very proprietary home grown type product that we used to transform our services. What we've done over the last several years is turned that into a product, essentially a application that we can sell to our customers and they can get it from us as a license and support model to help them on their journey. The ask then is that if they aren't happy or say they want to engage other providers from Atos is to allow them to leverage the IP that we've built with them and have those other providers be part of the ecosystem. So aligned to that we've now created the ability for third parties to interact with our customers and leverage the ecosystem and products and services we built on ServiceNow in support of our common customer. >> Nice, now when you were talking off camera you obviously, hybrid cloud's a big topic, a hot topic. Dell EMC World's going on this week, you guys get a, you've won an award at that show. You're here obviously but, so what's going on in hybrid cloud, you know, what are you being recognized for? >> So from a hybrid cloud perspective we're going to announce a private Azure stack appliance in partnership with VC around VxRack and VxRail. One of the other things, when we think about hybrid cloud, what we've done specifically with ServiceNow is integrate our offerings that come from Atos, our private cloud platforms, we refer to as our digital private cloud, that was built in concert with Dell EMC around the Vmware suite of technologies, VCE, and other components of the Dell EMC family. And we stitch all of that together with public cloud providers AWS, Azure, and Google, in a seamless framework with ServiceNow. And that's I think, from us, one of our key value props that we take to customers, is the integration of the private cloud on-prem solutions and what we do in the public space, with ServiceNow as the engine to do that. >> So you see all this stuff coming together don't you? So you're saying ServiceNow is the platform glue to allow you to manage all these disparate systems? >> Oh without a doubt. We look at ServiceNow as the platform of the future for us and our customers. And we look at it, and we really refer to them as being platform businesses going forward. And you need an integrated platform end to end to drive that to, one, the transformation, but two, to be able to manage that end to end service perspective as you think about private public and the SAS model that's out there that our customers want to consume. >> I'll give you the last word on Knowledge17 what's the sort of bumper sticker for you guys? >> So I think the bumper sticker for us is, at least from an Atos perspective, it's the year of the platform. And as we look at what ServiceNow is rolling out being a platform provider, and the partnership that we have with them specifically in the cloud space, to enable a successful outcome of hybrid cloud consumption for our customers. >> Platform trumps products every time so Michael thanks very much for coming to theCUBE and sharing your knowledge, and best of luck. >> Thanks for your time and I appreciate it. >> You're very welcome. And keep it right there everybody we'll be back with out next guest, theCUBE, we're live from Knowledge17. We'll be right back. (bright electronic music)

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 the pandemic not only accelerated the shift to digital but also highlighted a rush of cyber criminal sophistication collaboration and chaotic responses by virtually every major company in the planet the solar winds hack exposed supply chain weaknesses and so-called island hopping techniques that are exceedingly difficult to detect moreover the will and aggressiveness of well-organized cyber criminals has elevated to the point where incident responses are now met with counterattacks designed to both punish and extract money from victims via ransomware and other criminal activities the only upshot is the cyber security market remains one of the most enduring and attractive investment sectors for those that can figure out where the market is headed and which firms are best positioned to capitalize hello everyone and welcome to this week's wikibon cube insights powered by etr in this breaking analysis we'll provide our quarterly update of the security industry and share new survey data from etr and thecube community that will help you navigate through the maze of corporate cyber warfare we'll also share our thoughts on the game of 3d chest that octa ceo todd mckinnon is playing against the market now we all know this market is complicated fragmented and fast moving and this next chart says it all it's an interactive graphic from optiv a denver colorado based si that's focused on cyber security they've done some really excellent research and put together this awesome taxonomy and mapped vendor names therein and this helps users navigate the complex security landscape and there are over a dozen major sectors high-level sectors within the security taxonomy in nearly 60 sub-sectors from monitoring vulnerability assessment identity asset management firewalls automation cloud data center sim threat detection and intelligent endpoint network and so on and so on and so on but this is a terrific resource and can help you understand where players fit and help you connect the dots in the space now let's talk about what's going on in the market the dynamics in this crazy mess of a landscape are really confusing sometimes now since the beginning of cyber time we've talked about the increasing sophistication of the adversary and the back and forth escalation between good and evil and unfortunately this trend is unlikely to stop here's some data from carbon black's annual modern bank heist report this is the fourth and of course now vmware's brand highlights the carbon black study since the acquisition and it catalyzed the creation of vmware's cloud security division destructive malware attacks according to the recent study are up 118 percent from last year now one major takeaway from the report is that hackers aren't just conducting wire fraud they are 57 of the bank surveyed saw an increase in wire fraud but the cyber criminals are also targeting non-public information such as future trading strategies this allows the bad guys to front run large block trades and profit it's become very lucrative practice now the prevalence of so-called island hopping is up 38 from already elevated levels this is where a virus enters a company's supply chain via a partner and then often connects with other stealthy malware downstream these techniques are more common where the malware will actually self-form with other infected parts of the supply chain and create actions with different signatures designed to identify and exfiltrate valuable information it's a really complex problem of major concern is that 63 of banking respondents in the study reported that responses to incidents were then met with retaliation designed to intimidate or initiate ransomware attacks to extract a final pound of flesh from the victim notably the study found that 75 percent of csos reported to the cio which many feel is not the right regime the study called for a rethinking of the right cyber regime where the cso has increased responsibility in a direct reporting line to the ceo or perhaps the co with greater exposure to boards of directors so many thanks to vmware and tom kellerman specifically for sharing this information with us this past week great work by your team now some of the themes that we've been talking about for several quarters are shown in the lower half of the chart cloud of course is the big driver thanks to work from home and the pandemic to pandemic and the interesting corollary of course is we see a rapid rethinking of endpoint and identity access management and the concept of zero trust in a recent esg survey two-thirds of respondents said that their use of cloud computing necessitated a change in how they approach identity access management now as shown in the chart from optiv the market remains highly fragmented and m a is of course way up now based on our research it looks like transaction volume has increased more than 40 percent just in the last five months so let's dig into the m a the merger and acquisition trends for just a moment we took a five month snapshot and we were able to count about 80 deals that were completed in that time frame those transactions represented more than 20 billion dollars in value some of the larger ones are highlighted here the biggest of course being the toma bravo taking proof point private for a 12 plus billion dollar price tag the stock went from the low 130s and is trading in the low 170s based on 176 dollar per share offer so there's your arbitrage folks go for it perhaps the more interesting acquisition was auth 0 by octa for 6.5 billion which we're going to talk about more in a moment there's more private equity action we saw as insight bought armis and iot security play and cisco shelled out 730 million dollars for imi mobile which is more of an adjacency to cyber but it's going to go under cisco's security and applications business run by g2 patel but these are just the tip of the iceberg some of the themes that we see connecting the dots of these acquisitions are first sis like accenture atos and wipro are making moves in cyber to go local they're buying secops expertise as i say locally in places like france germany netherlands canada and australia that last mile that belly-to-belly intimate service israel israeli-based startups chalked up five acquired companies in the space over the last five months also financial services firms are getting into the act with goldman and mastercard making moves to own its own part of the stack themselves to combat things like fraud and identity theft and then finally numerous moves to expand markets octa with zero crowdstrike buying a log management company palo alto picking up devops expertise rapid seven shoring up its kubernetes chops tenable expanding beyond insights and going after identity interesting fortinet filling gaps in a multi-cloud offering sale point extending to governance risk and compliance grc zscaler picked up an israeli firm to fill gaps in access control and then vmware buying mesh 7 to secure modern app development and distribution services so tons and tons of activity here okay so let's look at some of the etr data to put the cyber market in context etr uses the concept of market share it's one of the key metrics which is a measure of pervasiveness in the data set so for each sector it calculates the number of respondents for that sector divided by the total to get a sense for how prominent the sector is within the cio and i.t buyer communities okay this chart shows the full etr sector taxonomy with security highlighted across three survey periods april last year january this year in april this year now you wouldn't expect big moves in market share over time so it's relatively stable by sector but the big takeaway comes from observing which sectors are most prominent so you see that red line that dotted line imposed at the sixty percent level you can see there are only six sectors above that line and cyber security is one of them okay so we know that security is important in a large market but this puts it in the context of the other sectors however we know from previous breaking analysis episodes that despite the importance of cyber and the urgency catalyzed by the pandemic budgets unfortunately are not unlimited and spending is bounded it's not an open checkbook for csos as shown in this chart this is a two-dimensional graphic showing market share in the horizontal axis or pervasiveness and net score in the vertical axis net score is etr's measurement of spending velocity and we've superimposed a red line at 40 percent because anything over 40 percent we consider extremely elevated we've filtered and limited the number of sectors to simplify the graphic and you can see in the sectors that we've highlighted only the big four four are above that forty percent line ai containers rpa and cloud they exceed that sort of forty percent magic water line information security you can see that is highlighted and it's respectable but it competes for budget with other important sectors so this of course creates challenges for organization because not only are they strapped for talent as we've reported they like everyone else in it face ongoing budget pressures research firm cybersecurity ventures estimates that in 2021 6 trillion dollars worldwide will be lost on cyber crime conversely research firm canalis pegs security spending somewhere around 60 billion dollars annually idc has it higher around 100 billion so either way we're talking about spending between one to one point six percent annually of how much the bad guys are taking out that's peanuts really when you consider the consequences so let's double click into the cyber landscape a bit and further look at some of the companies here's that same x y graphic with the company's etr captures from respondents in the cyber security sector that's what's shown on the chart here now the usefulness of the red lines is 20 percent on the horizontal indicates the largest presence in the survey and the magic 40 percent line that we talked about earlier shows those firms with the most elevated momentum only microsoft and palo alto exceed both high water marks of course splunk and cisco are prominent horizontally and there are numerous companies to the left of the 20 percent line and many above that 40 percent high water mark on the vertical axis now in the bottom left quadrant that includes many of the legacy names that have been around for a long time and there are dozens of companies that show spending momentum on their platforms i.e above single digits so that picture is like the first one we showed you very very crowded space but so let's filter it a bit and only include companies in the etr survey that had at least a hundred responses so an n of a hundred or greater so it's a little easy to read but still it's kind of crowded when you think about it okay so same graphic and we've superimposed the data that determined the plot position over in the bottom right there so it's net score and shared n including only companies with more than 100 n so what does this data tell us about the market well microsoft is dominant as always it seems in all dimensions but let's focus on that red line for a moment some of the names that we've highlighted over the past two years show very well here first i want to talk about palo alto networks pre-covet as you might recall we highlighted the valuation divergence between palo alto and fortinet and we said fortinet was executing better on its cloud strategy and palo alto was at the time struggling with the transition especially with its go to market and its sales force compensation and really refreshing its portfolio but we told you that we were bullish on palo alto networks at the time because of its track record and the fact that cios consistently told us that they saw palo alto as a thought leader in the space that they wanted to work with they said that palo alto was the gold standard the best especially larger company cisos so that gave us confidence that palo alto a very well-run company was going to get its act together and perform better and palo alto has just done just that as we expected they've done very well and they've been rapidly moving customers to the next generation of platforms and we're very impressed by the company's execution and the stock has generally reflected that now some other names that hit our radar and the etr data a couple of years ago continue to perform well crowdstrike z-scaler sales sail point and cloudflare a cloudflare just reported and beat earnings but was off the stock fell on headwinds for tech overall the big rotation but the company is doing very well and they're growing rapidly and they have momentum as you can see from the etr data and we put that double star around proof point to highlight that it was worthy of fetching 12 and a half billion dollars from private equity firm so nice exit there supporting the continued control consolidation trend that we've predicted in cyber security now let's turn our attention to octa and auth zero this is where it gets interesting and is a clever play for octa we think and we want to drill into it a bit octa is acquiring auth zero for big money why well we think todd mckinnon octa ceo wants to run the table on identity and then continue to expand his tam he has to do that to justify his lofty valuation so octa's ascendancy around identity and single sign sign-on is notable the fragmented pictures that we've shown you they scream out for simplification and trust and that's what octa brings but it competes with some major players most notably microsoft with active directory so look of course microsoft is going to dominate in its massive customer base but the rest of the market that's like jump ball it's wide open and we think mckinnon saw the opportunity to go dominate that sector now octa comes at this from an enterprise perspective bringing top-down trust to the equation and throwing a big blanket over all the discrete sas platforms and unifying employee access octa's timing was perfect it was founded in 2009 just as the massive sasification trend was happening around crm and hr and service management and cloud etc but the one thing that octa didn't have that auth 0 does is serious developer chops while octa was crushing it with its enterprise sales strategy auth 0 was laser focused on developers and building a bottoms up approach to identity by acquiring auth0 octa can dominate both sides of the barbell and then capture the fat middle so yes it's a pricey acquisition but in our view it's a great move by mckinnon now i don't know mckinnon personally but last week i spoke to arun shrestha who's the ceo of security specialist beyond id they're a platinum services partner of octa and there a zero trust expert he worked for octa for a number of years and shared with me a bit about mckinnon's style and think big approach arun said something that caught my attention he said firewalls used to be the perimeter now people are and while that's self-serving to octa and probably beyond id it's true people apps and data are the new perimeter and they're not in one location and that's the point now unfortunately i had lined up an interview with dia jolly who was the chief product officer at octa in a cube alum for this past week knowing that we were running this segment in this episode but she unfortunately fell ill the day of our interview and had to cancel but i want to follow up with her and understand how she's thinking about connecting the dots with auth 0 with devs and enterprises and really test our thesis there this is a really interesting chess match that's going on let's look a little deeper into that identity space this chart here shows some of the major identity players it has some of the leaders in the identity market and there's a breakdown of etr's net score now net score comprises five elements the lime green is we're adding the platform new the forest green is we're spending six percent or more relative to last year the gray is flat send plus or minus flat spend plus or minus five percent the pinkish is spending less and the bright red is where exiting the platform retiring now you subtract the red from the green and that gets you the result for net score which you can see superimposed on the right hand chart at the bottom that first column there the far column is shared in which informs and indicates the number of responses and is a proxy for presence in the market oh look at the top two players in terms of spending momentum now sales sale point is right there but auth 0 combined with octa's distribution channel will extend octa's lead significantly in our view and then there's microsoft now just a caveat this includes all of microsoft's security offerings not just identity but it's there for context and cyber arc as well includes its acquisition of adaptive but also other parts of cyberarks portfolio so you can see some of the other names that are there many of which you'll find in the gartner magic quadrant for identity and as we said we really like this move by octa it combines positive market forces with lead offerings from very well-run companies that have winning dna and passionate people now to further emphasize emphasize what what's happening here take a look at this this chart shows etr data for octa within sale point and cyber arc accounts out of the 230 cyber and sale point customers in the data set there are 81 octa accounts that's a 35 overlap and the good news for octa is that within that base of sale point in cyber arc accounts octa is shown by the net score line that green line has a very elevated spending and momentum and the kicker is if you read the fine print in the right hand column etr correctly points out that while sailpoint and cyberarc have long been partners with octa at the recent octane 21 event octa's big customer event the company announced that it was expanding into privileged access management pam and identity governance hello and welcome to coopetition in the 2020s now our current thinking is that this bodes very well for octa and cyberark and sailpoint well they're going to have to make some counter moves to fend off the onslaught that is coming now let's wrap up with what has become a tradition in our quarterly security updates looking at those two dimensions of net score and market share we're going to see which companies crack the top 10 for both measures within the etr data set we do this every quarter so here on the left we have the top 20 sorted by net score or spending momentum and on the right we sort by shared n so again top 20 which informs shared end and forms the market share metric or presence in the data set that red horizontal lines those two lines on each separate the top 10 from the remaining 10 within those top 20. in our method what we do is we assign four stars to those companies that crack the top ten for both metrics so again you see microsoft palo alto networks octa crowdstrike and fortinet fortinet by the way didn't make it last quarter they've kind of been in and out and on the bubble but you know this company is very strong and doing quite well only the other four did last quarter there was same four last quarter and we give two stars to those companies that make it in both categories within the top 20 but didn't make the top 10. so cisco splunk which has been steadily decelerating from a spending momentum standpoint and z-scaler which is just on the cusp you know we really like z-scaler and the company has great momentum but that's the methodology it is what it is now you can see we kept carbon black on the rightmost chart it's like kind of cut off it's number 21 only because they're just outside looking in on netscore you see them there they're just below on on netscore number 11. and vmware's presence in the market we think that carbon black is really worth paying attention to okay so we're going to close with some summary and final thoughts last quarter we did a deeper dive on the solar winds hack and we think the ramifications are significant it has set the stage for a new era of escalation and adversary sophistication now major change we see is a heightened awareness that when you find intruders you'd better think very carefully about your next moves when someone breaks into your house if the dog barks or if you come down with a baseball bat or other weapon you might think the intruder is going to flee but if the criminal badly wants what you have in your house and it's valuable enough you might find yourself in a bloody knife fight or worse what's happening is intruders come to your company via island hopping or inside or subterfuge or whatever method and they'll live off the land stealthily using your own tools against you so they can you can't find them so easily so instead of injecting new tools in that send off an alert they just use what you already have there that's what's called living off the land they'll steal sensitive data for example positive covid test results when that was really really sensitive obviously still is or other medical data and when you retaliate they will double extort you they'll encrypt your data and hold it for ransom and at the same time threaten to release the sensitive information to crushing your brand in the process so your response must be as stealthy as their intrusion as you marshal your resources and devise an attack plan you face serious headwinds not only is this a complicated situation there's your ongoing and acute talent shortage that you tell us about all the time many companies are mired in technical debt that's an additional challenge and then you've got to balance the running of the business while actually affecting a digital transformation that's very very difficult and it's risky because the more digital you become the more exposed you are so this idea of zero trust people used to call it a buzzword it's now a mandate along with automation because you just can't throw labor at the problem this is all good news for investors as cyber remains a market that's ripe for valuation increases and m a activity especially if you know where to look hopefully we've helped you squint through the maze a little bit okay that's it for now thanks to the community for your comments and insights remember i publish each week on wikibon.com and siliconangle.com these episodes they're all available as podcasts all you do is search breaking analysis podcast put in the headphones listen when you're in your car out for your walk or run and you can always connect on twitter at divalante or email me at david.valante at siliconangle.com i appreciate the comments on linkedin and in clubhouse please follow me so you're notified when we start a room and riff on these topics and others and don't forget to check out etr.plus for all the survey data this is dave vellante for the cube insights powered by etr 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 in ETR. This is "Breaking Analysis" with Dave Vellante >> The pandemic not only accelerated the shift to digital but it also highlighted a rush of cyber criminal sophistication, collaboration, and chaotic responses by virtually every major company in the planet. The SolarWinds hack exposed supply chain weaknesses and so-called island hopping techniques that are exceedingly difficult to detect. Moreover, the will and aggressiveness of well-organized cybercriminals has elevated to the point where incident responses are now met with counter attacks, designed to both punish and extract money from victims via ransomware and other criminal activities. The only upshot is the cybersecurity market remains one of the most enduring and attractive investment sectors for those that can figure out where the market is headed and which firms are best positioned to capitalize. Hello, everyone. And welcome to this week's Wikibon Cube Insights powered by ETR. In this "Breaking Analysis" we'll provide our quarterly update of the security industry, and share new survey data from ETR and the Cube community that will help you navigate through the maze of corporate cyber warfare. We'll also share our thoughts on the game of 3D chess that Okta CEO, Todd McKinnon, is playing against the market. Now, we all know this market is complicated, fragmented and fast moving. And this next chart says it all. It's an interactive graphic from Optiv, a Denver, Colorado-based SI that's focused on cybersecurity. They've done some really excellent research and put together this awesome taxonomy, and it mapped vendor names therein. And this helps users navigate the complex security landscape. And there are over a dozen major sectors, high-level sectors within the security taxonomy and nearly 60 subsectors. From monitoring, vulnerability assessment, identity, asset management, firewalls, automation, cloud, data center, sim, threat detection and intelligent endpoint network, and so on and so on and so on. But this is a terrific resource, and going to help you understand where players fit and help you connect the dots in the space. Now let's talk about what's going on in the market. The dynamics in this crazy mess of a landscape are really confusing sometimes. Now, since the beginning of cyber time, we've talked about the increasing sophistication of the adversary, and the back and forth escalation between good and evil. And unfortunately, this trend is unlikely to stop. Here's some data from Carbon Black's annual modern bank heist report. This is the fourth, and of course now, VMware's brand, highlights the Carbon Black study since the acquisition, and to catalyze the creation of VMware's cloud security division. Destructive malware attacks, according to the recent study are up 118% from last year. Now, one major takeaway from the report is that hackers aren't just conducting wire fraud, they are. 57% of the banks surveyed, saw an increase in wire fraud, but the cybercriminals are also targeting non-public information such as future trading strategies. This allows the bad guys to front-run large block trades and profit. It's become a very lucrative practice. Now the prevalence of so-called island hopping is up 38% from already elevated levels. This is where a virus enters a company supply chain via a partner, and then often connects with other stealthy malware downstream. These techniques are more common where the malware will actually self-form with other infected parts of the supply chain and create actions with different signatures, designed to identify and exfiltrate valuable information. It's a really complex problem. Of major concern is that 63% of banking respondents in the study reported that responses to incidents were then met with retaliation designed to intimidate, or initiate ransomware tax to extract a final pound of flesh from the victim. Notably, the study found that 75% of CISOs reported to the CIO, which many feel is not the right regime. The study called for a rethinking of the right cyber regime where the CISO has increased responsibility and a direct reporting line to the CEO, or perhaps the COO, with greater exposure to boards of directors. So, many thanks to VMware and Tom Kellerman specifically for sharing this information with us this past week. Great work by your team. Now, some of the themes that we've been talking about for several quarters are shown in the lower half of the chart. Cloud, of course is the big driver thanks to work-from-home and to the pandemic. And the interesting corollary of course, is we see a rapid rethinking of end point and identity access management, and the concept of zero trust. In a recent ESG survey, two thirds of respondents said that their use of cloud computing necessitated a change in how they approach identity access management. Now, as shown in the chart from Optiv, the market remains highly fragmented, and M&A is of course, way up. Now, based on our research, it looks like transaction volume has increased more than 40% just in the last five months. So let's dig into the M&A, the merger and acquisition trends for just a moment. We took a five-month snapshot and we were able to count about 80 deals that were completed in that timeframe. Those transactions represented more than $20 billion in value. Some of the larger ones are highlighted here. The biggest of course, being the Thoma Bravo, taking Proofpoint private for a $12 plus billion price tag. The stock went from the low 130s and is trading in the low 170s based on the $176 per share offer. So there's your arbitrage, folks. Go for it. Perhaps the more interesting acquisition was Auth0 by Optiv for 6.5 billion, which we're going to talk about more in a moment. There was more private equity action we saw as Insight bought Armis, an IOT security play, and Cisco shelled out $730 million for IMImobile, which is more of an adjacency to cyber, but it's going to go under Cisco security and applications business run by Jeetu Patel. But these are just the tip of the iceberg. Some of the themes that we see connecting the dots of these acquisitions are first, SIs like Accenture, Atos and Wipro are making moves in cyber to go local. They're buying SecOps expertise, as I say, locally in places like France, Germany, Netherlands, Canada, and Australia, that last mile, that belly to belly intimate service. Israeli-based startups chocked up five acquired companies in the space over the last five months. Also financial services firms are getting into the act with Goldman and MasterCard making moves to own its own part of the stack themselves to combat things like fraud and identity theft. And then finally, numerous moves to expand markets. Okta with Auth0, CrowdStrike buying a log management company, Palo Alto, picking up dev ops expertise, Rapid7 shoring up it's Coobernetti's chops, Tenable expanding beyond Insights and going after identity, interesting. Fortinet filling gaps in a multi-cloud offering. SailPoint extending to governance risk and compliance, GRC. Zscaler picked up an Israeli firm to fill gaps in access control. And then VMware buying Mesh7 to secure modern app development and distribution service. So tons and tons of activity here. Okay, so let's look at some of the ETR data to put the cyber market in context. ETR uses the concept of market share, it's one of the key metrics which is a measure of pervasiveness in the dataset. So for each sector, it calculates the number of respondents for that sector divided by the total to get a sense for how prominent the sector is within the CIO and IT buyer communities. Okay, this chart shows the full ETR sector taxonomy with security highlighted across three survey periods; April last year, January this year, and April this year. Now you wouldn't expect big moves in market share over time. So it's relatively stable by sector, but the big takeaway comes from observing which sectors are most prominent. So you see that red line, that dotted line imposed at the 60% level? You can see there are only six sectors above that line and cyber security is one of them. Okay, so we know that security is important in a large market. But this puts it in the context of the other sectors. However, we know from previous breaking analysis episodes that despite the importance of cyber, and the urgency catalyzed by the pandemic, budgets unfortunately are not unlimited, and spending is bounded. It's not an open checkbook for CSOs as shown in this chart. This is a two-dimensional graphic showing market share in the horizontal axis, or pervasiveness in net score in the vertical axis. Net score is ETR's measurement of spending velocity. And we've superimposed a red line at 40% because anything over 40%, we consider extremely elevated. We've filtered and limited the number of sectors to simplify the graphic. And you can see, in the sectors that we've highlighted, only the big four are above that 40% line; AI, containers, RPA, and cloud. They exceed that sort of 40% magic waterline. Information security, you can see that as highlighted and it's respectable, but it competes for budget with other important sectors. So this is of course creates challenges for organization, because not only are they strapped for talent as we've reported, they like everyone else in IT face ongoing budget pressures. Research firm, Cybersecurity Ventures estimates that in 2021, $6 trillion worldwide will be lost on cyber crime. Conversely, research firm, Cannolis peg security spending somewhere around $60 billion annually. IDC has at higher, around $100 billion. So either way, we're talking about spending between 1 to 1.6% annually of how much the bad guys are taking out. That's peanuts really when you consider the consequences. So let's double-click into the cyber landscape a bit and further look at some of the companies. Here's that same X/Y graphic with the companies ETR captures from respondents in the cybersecurity sector. That's what's shown on the chart here. Now, the usefulness of the red lines is 20% on the horizontal indicates the largest presence in the survey, and the magic 40% line that we talked about earlier shows those firms with the most elevated momentum. Only Microsoft and Palo Alto exceed both high watermarks. Of course, Splunk and Cisco are prominent horizontally. And there are numerous companies to the left of the 20% line and many above that 40% high watermark on the vertical axis. Now in the bottom left quadrant, that includes many of the legacy names that have been around for a long time. And there are dozens of companies that show spending momentum on their platforms, i.e above single digits. So that picture is like the first one we showed you, very, very crowded space. But so let's filter it a bit and only include companies in the ETR survey that had at least 100 responses. So an N of 100 or greater. So it was a little easier to read but still it's kind of crowded when you think about it. Okay, so same graphic, and we've superimposed the data that determined the plot position over in the bottom right there. So there's net score and shared in, including only companies with more than 100 N. So what does this data tell us about the market? Well, Microsoft is dominant as always, it seems in all dimensions but let's focus on that red line for a moment. Some of the names that we've highlighted over the past two years show very well here. First, I want to talk about Palo Alto Networks. Pre-COVID as you might recall, we highlighted the valuation divergence between Palo Alto and Fortinet. And we said Fortinet was executing better on its cloud strategy, and Palo Alto was at the time struggling with the transition especially with its go-to-market and its Salesforce compensation, and really refreshing its portfolio. But we told you that we were bullish on Palo Alto Networks at the time because of its track record, and the fact that CIOs consistently told us that they saw Palo Alto as a thought leader in the space that they wanted to work with. They said that Palo Alto was the gold standard, the best, especially larger company CISOs. So that gave us confidence that Palo Alto, a very well-run company was going to get its act together and perform better. And Palo Alto has just done just that. As we expected, they've done very well and rapidly moving customers to the next generation of platforms. And we're very impressed by the company's execution. And the stock has generally reflected that. Now, some other names that hit our radar in the ETR data a couple of years ago, continue to perform well. CrowdStrike, Zscaler, SailPoint, and CloudFlare. Now, CloudFlare just reported and beat earnings but was off, the stock fell on headwinds for tech overall, the big rotation. But the company is doing very well and they're growing rapidly and they have momentum as you can see from the ETR data. Now, we put that double star around Proofpoint to highlight that it was worthy of fetching $12.5 billion from private equity firm. So nice exit there, supporting the continued consolidation trend that we've predicted in cybersecurity. Now let's turn our attention to Okta and Auth0. This is where it gets interesting, and is a clever play for Okta we think, and we want to drill into it a bit. Okta is acquiring Auth0 for big money. Why? Well, we think Todd McKinnon, Okta CEO, wants to run the table on identity and then continue to expand as TAM has to do that, to justify his lofty valuation. So Okta's ascendancy around identity and single sign-on is notable. The fragmented pictures that we've shown you, they scream out for simplification and trust, and that's what Okta brings. But it competes with some major players, most notably Microsoft with active directory. So look, of course, Microsoft is going to dominate in its massive customer base, but the rest of the market, that's like (indistinct) wide open. And we think McKinnon saw the opportunity to go dominate that sector. Now Okta comes at this from an enterprise perspective bringing top-down trust to the equation, and throwing a big blanket over all the discreet SaaS platforms and unifying employee access. Okta's timing was perfect. It was founded in 2009, just as the massive SaaSifiation trend was happening around CRM and HR, and service management and cloud, et cetera. But the one thing that Okta didn't have that Auth0 does is serious developer chops. While Okta was crushing it with its enterprise sales strategy, Auth0 was laser-focused on developers and building a bottoms up approach to identity. By acquiring Auth0, Okta can dominate both sides of the barbell and then capture the fat middle. So yes, it's a pricey acquisition, but in our view, it's a great move by McKinnon. Now, I don't know McKinnon personally, but last week I spoke to Arun Shrestha, who's the CEO of security specialist, BeyondID, they're a platinum services partner of Okta. And they're a zero trust expert. He worked for Okta for a number of years and shared with me a bit about McKinnon's style, and think big approach. Arun said something that caught my attention. He said, firewalls used to be the perimeter, now people are. And while that's self-serving to Okta and probably BeyondID, it's true. People, apps and data are the new perimeter, and they're not in one location. And that's the point. Now, unfortunately, I had lined up an interview with Diya Jolly, who was the chief product officer at Okta and a Cube alum for this past week, knowing that we were running this segment in this episode but she unfortunately fell ill the day of our interview and had to cancel. But I want to follow up with her, and understand how she's thinking about connecting the dots with Auth0 with devs and enterprises and really test our thesis there. This is a really interesting chess match that's going on. Let's look a little deeper into that identity space. This chart here shows some of the major identity players. It has some of the leaders in the identity market, and is a breakdown at ETR's net score. Now net score comprises five elements. The lime green is, we're adding the platform new. The forest green is we're spending 6% or more relative to last year. The gray is flat send plus or minus flat spend, plus or minus 5%. The pinkish is spending less. And the bright red is we're exiting the platform, retiring. Now you subtract the red from the green, and that gets you the result for net score which you can see super-imposed on the right hand chart at the bottom, that first column there. The far column is shared in which informs and indicates the number of responses and is a proxy for presence in the market. Oh, look at the top two players in terms of spending momentum. Now SailPoint is right there, but Auth0 combined with Okta's distribution channel will extend Okta's lead significantly in our view. And then there's Microsoft. Now just a caveat, this includes all of Microsoft's security offerings, not just identity, but it's there for context. And CyberArk as well includes this acquisition of adaptive, but also other parts of CyberArk's portfolio. So you can see some of the other names that are there, many of which you'll find in the Gartner magic quadrant for identity. And as we said, we really like this move by Okta. It combines positive market forces with lead offerings from very well-run companies that have winning DNA and passionate people. Now, to further emphasize what's happening here, take a look at this. This chart shows ETR data for Okta within SailPoint and CyberArk accounts. Out of the 230 CyberArk and SailPoint customers in the dataset, there are 81 Okta accounts. That's a 35% overlap. And the good news for Okta is that within that base of SailPoint and CyberArk accounts, Okta is shown by the net score line, that green line has a very elevated spending in momentum. And the kicker is, if you read the fine print in the right hand column, ETR correctly points out that while SailPoint and CyberArk have long been partners with Okta, at the recent Octane21 event, Okta's big customer event, The company announced that it was expanding into privileged access management, PAM, and identity governance. Hello, and welcome to co-opetition in the 2020s. Now, our current thinking is that this bodes very well for Okta and CyberArk and SailPoint. Well, they're going to have to make some counter moves to fend off the onslaught that is coming. Now, let's wrap up with what has become a tradition in our quarterly security updates. Looking at those two dimensions of net score and market share, we're going to see which companies crack the top 10 for both measures within the ETR dataset. We do this every quarter. So here in the left, we have the top 20, sorted by net score spending momentum and on the right, we sort by shared N. So it's again, top 20, which informs, shared N informs the market share metric or presence in the dataset. That red horizontal lines, those two lines on each separate the top 10 from the remaining 10 within those top 20. And our method, what we do is we assign four stars to those companies that crack the top 10 for both metrics. So again, you see Microsoft, Palo Alto Networks, Okta, CrowdStrike, and Fortinet. Fortinet by the way, didn't make it last quarter. They've kind of been in and out and on the bubble, but company is very strong, and doing quite well. Only the other four did last quarter. They were the same for last quarter. And we give two stars to those companies that make it in both categories within the top 20 but didn't make the top 10. So Cisco, Splunk, which has been steadily decelerating from a spending momentum standpoint, and Zscaler, which is just on the cusp. We really like Zscaler and the company has great momentum, but that's the methodology. That is what it is. Now you can see, we kept Carbon Black on the right most chart, it's like kind of cut off, it's number 21. Only because they're just outside looking in on net score. You see them there, they're just below on net score, number 11. And VMware's presence in the market we think, that Carbon Black is right really worth paying attention to. Okay, so we're going to close with some summary and final thoughts. Last quarter, we did a deeper dive on the SolarWinds hack, and we think the ramifications are significant. It has set the stage for a new era of escalation and adversary sophistication. Now, major change we see is a heightened awareness that when you find intruders, you'd better think very carefully about your next moves. When someone breaks into your house, if the dog barks, or if you come down with a baseball bat or other weapon, you might think the intruder is going to flee. But if the criminal badly wants what you have in your house and it's valuable enough, you might find yourself in a bloody knife fight or worse. Well, what's happening is intruders come to your company via island hopping or insider subterfuge or whatever method. And they'll live off the land stealthily using your own tools against you so that you can't find them so easily. So instead of injecting new tools in that send off an alert, they just use what you already have there. That's what's called living off the land. They'll steal sensitive data, for example, positive COVID test results when that was really, really sensitive, obviously still is, or other medical data. And when you retaliate, they will double-extort you. They'll encrypt your data and hold it for ransom, and at the same time threaten to release the sensitive information, crushing your brand in the process. So your response must be as stealthy as their intrusion, as you marshal your resources and devise an attack plan. And you face serious headwinds. Not only is this a complicated situation, there's your ongoing and acute talent shortage that you tell us about all the time. Many companies are mired in technical debt, that's an additional challenge. And then you've got to balance the running of the business while actually effecting a digital transformation. That's very, very difficult, and it's risky because the more digital you become, the more exposed you are. So this idea of zero trust, people used to call it a buzzword, it's now a mandate along with automation. Because you just can't throw labor at the problem. This is all good news for investors as cyber remains a market that's ripe for valuation increases and M&A activity, especially if you know where to look. Hopefully we've helped you squint through the maze a little bit. Okay, that's it for now. Thanks to the community for your comments and insights. Remember I publish each week on wikibon.com and siliconangle.com. These episodes, they're all available as podcasts. All you got to do is search breaking analysis podcasts, put in the headphones, listen when you're in your car, or out for your walk or run, and you can always connect on Twitter @DVellante, or email me at david.vellante@siliconangle.com. I appreciate the comments on LinkedIn and in Clubhouse, please follow me, so you're notified when we start a room and riff on these topics and others. And don't forget to check out etr.plus for all the survey data. This is Dave Vellante for The Cube Insights powered by ETR. Be well, and we'll see you next time. (light instrumental music)

you live from Miami Beach Florida Biman 2019 brought to you by beam welcome back to Miami everybody this is the cube the leader in live tech coverage I'm Dave Volante with my co-host Peter burst we're wrapping up day two of v-mon 2019 and so we've been talking about cloud hybrid cloud data protection backup evolving to more of an automated data management environment can bring dollars here and he is in charge of really building out the VM ecosystem that he's the vice president of global alliance architecture at VM Kent great to see you again thanks for coming on yeah thanks Dave preciate so the ecosystem is evolving you know you're in a competitive marketplace but one of the things that differentiates Veeam is you know billion dollar company and people want to do business with your customers and so the ecosystem keeps growing and growing and you guys have some you know blue chip names at the top of your sponsor list we do a good job but you're not done yet so not at all and I think Dave you know it's it's really great to see how v-mon has evolved and you know in our partner ecosystem you know we have you know you talked about us hitting a billion dollars you know we rat marinelle's we hit 350,000 customers that customer number is a huge asset for us when we talked to our partners you know that is something that they're all trying to tap into right they love you know and our customers are really passionate and we have partners that come to us and they say hey look you know and that you know the bigger partners than us and they're saying hey will you please work with us will you please you know we want to do deeper integration because our customers you know are saying we're Veeam customers and and you you know you know mister partner you have to go work with teams so that so that our solutions will work better together so it's a it's a great asset to us yeah and it's it's evolved since you know it's just certainly just the first Vemma and I was at the very first one I think was we were talking was at the Aria whatever it was five years ago so so you know ecosystem is I think Jason Buffington was quoting Archimedes today and you know livre and and that ecosystem is is you know a huge opportunity for growth ok so let's get into it well first of all I want to ask you if time was interesting global alliance architecture yes so we're not talking technical architecture necessarily we're talking about what the architecture of the ecosystem or both yeah so some money you know my role my responsibilities and what my team looks after is everything technical related to our partners so veem we're a hundred percent is fee and you know ratmir and aundrea to co-founders and leaders to the company you know that that's something that they take to heart and it's something that's actually really valuable when we talk to our partners is we don't really overlap very much especially with the infrastructure partners that we have and so you know my job is to take the great products we have and make it work really well and go deep with our partners so create value with these partners there's sometimes their product integrations storage snapshot integrations we announced the width beam program two weeks ago we are together at that next with the rest of your team talking about Nutanix mine with theme which is a secondary storage integrated solution so all of those that's all part of my roles so solution architecture and product integrations you know through our partner ecosystem which which is very broad it stretches from storage partners to platform partners to other is feeds like Oracle SAT even healthcare partners yeah Peter we were excited about the width Eames stuff dat who is with Fein yours with Vemma yeah so my team is responsible for the overall architecture with Vemma it's it's really a joint collaboration within within Veeam so we have an R&D investment that's building the intellectual property that powers the you know the system under the covers my team's responsible for the broader architecture how we bring it together how we bring it to market through the channel right and and and how we bring it to our customers and that whole experience so my team is is intimately involved in that so a lot of people talk about inflection points in the industry and clearly were in the middle one way of describing it is that the first 50 years were known process unknown technology we never gonna do accounting we knew are going to do HR where you were going to do blah blah blah blah blah and there was mainframe client-server with a lot of other stuff but the whole notion of backup and restore and data protection grew up out of the complexity in the infrastructure as we move forward it's interesting because it's known technology it's gonna be cloud relatively known yes but what's interesting is we don't know what the processes are gonna be we don't know what we're gonna automate we don't know how we're going to change the business it's all going to be data driven which places an enormous burden on IT and specifically how they use data within the business so I'm gonna ask your question it's a long preamble but I'm asking the question I asked you out in there too and this is not the test but the question is look as we move forward as data is used to differentiate a business it suggests that there's going to be greater specialization in how data use is used which could and should lead to greater specialization in the role that veem and related technologies will play within the business and the question then is is the with veem approach a way to let allow innovation to bloom so that specialization can be accommodated and supported within the VM ecosystem yeah so yeah Peter good question and so I tell you that the short answer is yes the longer answer is I wasn't shorter than the short answer is yes the longer answer is it doesn't have to be with Veeam but really our goal and and what we want to empower our partners and so really the goal of with Veeam is hey we're already working across our partner ecosystem and we you know we work with with the likes of NetApp and HP and pure and Nutanix and you know and all the platform providers as well public clouds you know our goal is is to make VM ubiquitous and drive better value to our customers and through our partners right we need partners no matter what when we're working with a customer there's always there's always a workload we're protecting and we need a place to land our backup so no matter what we're always working with one or two partners in a deal and sometimes it's multiple because then you TR out to cloud storage and in other places you know with with veem what we're trying to do is is really simplify that process for customers and so make that process from the buying experience all the way through the delivery and the deployment and the management and the ongoing management day 1 and day 2 operations we want to make that all seamless and give them higher value now one thing we're looking to enable and by adding api's with veeam is we want to leverage the strengths of the partners we have and so you know I often end up in these discussions because we have a broad partner ecosystem we've already announced - with VM solutions we have a third that you know we did last year with Cisco that's in the market that's sort of similar in nature and we're gonna add more and you know the question our partners even ask us is you know you already got three of them why are you gonna add another one you know how am I going to differentiate and the answer is you know they differentiate with their own technology and and the idea is we have these open API so that they can they can build their own solutions they fit different markets and fit different use cases some are small small customer solutions some are enterprise but our goal is to enable them to be creative and how they build on top of eeeem but but have you know Veen be a core part of that solution rather so so it is a core part of solution yes apply to specific customer absolutely okay so the term seamless always you know triggers me in a way because seamless is like open right it's evolved over time and so what was seamless you know 10 years ago wasn't really seamless in today's terms so when you talk about seamless we're talking about if I understand it deep engineering right getting access to primitives through api's and creating solutions that are differentiable as a function of your partner's core value proposition and obviously integrating with meme with 350,000 customers so you're now in the ball game with with Veen customers so so so talk about the importance of api's and how that actually gets done yeah and seamless to whom to the partners to the customer to ultimately it's to the customer boom but but but there's got to be an ease of integration as well with the partners and I'd like to understand that better yeah absolutely so I'll give you an example of something we've done in the past that's that we're trying to model this with veem program after so but a year and a half as part of our 9.5 update 3 we introduced what we call universal storage API and we've talked about our version 10 there were five core features of version 10 when we announced that two years ago in New Orleans you're the first time you were you were with us at a v-mon and one of those was Universal storage API and what that means is you know we help we help our partners we help our customers ultimately by way of our partners on the primary side of integrating storage snapshots with vmware vsphere and so when we when we go to backup a vm we take a snapshot of that vm and with this with our storage snapshot integration we then take a storage snapshot of the volume that vm is on and we can release that VM where a snapshot very quickly so it's very low touch and low impact on the environment well we we introduced this API so that we could scale we had we had done our own storage snapshot and integration with you know call it 5 or 6 storage vendors over the previous seven years eight years right in the last year and a half we've added seven right and that's the scale we're talking about and allowing our partners to build the storage snapshot plug-in together right so we have a program we invite them into that program we collaborate on it they develop the plug-in we jointly test it and we release it and so we're trying to sort of take and that's been very successful as I said eight years five or six storage snapshot vendors year and a half we've done like another seven or eight so it's been very successful and we have more that are in queue so we'll be talking about more of these as time goes on in the very near future with the width beam program we're looking to do something very similar it's gonna be an invite-only program realistically the secondary storage partner is this the universe is probably 20 the logical universe for us is probably 10 to 12 so it's not going to be huge but it's gonna be impactful for our partners and so we'll invite them into the program we'll have an agreement of us working together we'll jointly develop and test it and we'll bring it to market together at the end of the day you know both our partner and veem we have our name on it and I'm sure you heard from rat mayor and Danny and others right we have our NPS score which we really really value and it's really high it's best in the industry and if we're putting our name on a solution in the market we also want to make sure that we're working on it together in it you know it really goes through the rigor of what it takes to bring a Vemma solution tomorrow actually you know what nobody's talked this week this week about the NPS core if they maybe they have in the keynote so that it might have missed it but well I was in the keynotes what is it today well yeah so so an NPS score is basically you know from from 0 to 100 it's it's you know we'll a customer reference you or recommend you right right and so ours is 73 ok the industry the the general average in in in our space is about 28 to 30 so we're about 2 and a half times that that's core you know and that's in Frank Zubin said to me one time it's easy to have a high NPS core if you're a one product company but you're not a one product company no no we've we've evolved substantially I mean you know we've we've added agents to cover physical workload we've we've added cloud support we've added other applications we've added veem availability Orchestrator we've added beam backup for office 365 we have VA C which is the availability console for our service providers which has cloud connected it's a very broad portfolio everything comes back to beam backup and replication as the flagship foundation but we have all these other products that that now help our customers solve their problems the reason we were so excited about this with wid theme is this notion of cloud and hybrid cloud and you talk about programmable infrastructure you really have been pushing just bringing the cloud experience to your data talking about that for a while and part of that has to be infrastructure as code and it can't really do that without open api's and this sort of seamless integration well the cloud is testing us with you as well the cloud is a really an architecture for how you're going to distribute work as opposed to how you can centralize Handicap I think for a long time we got it wrong it's all presumed and it's all gonna go to the center we're in fact when you get that level of standardization and common conventions and the technologies are built to make a tea that much easier it allows you to distribute the work a lot more effectively get the data closer to where the works going to be done and that is enormous implications for how we think about things but it also means that we when we talk about bringing the cloud to the data that the data has to be there the data services that make that data part of a broader fabric have to be there and it all has to be assured so that the system knows something about where the data is and what services can be applied to it in advance of actually moving the workloads that suggests ultimately that the technology set that veem is offering is going to evolve relatively rapidly so the whole notion of you know with V today for secondary storage but I could see that becoming something that you guys take two new classes of data service providers pretty quickly I don't want you to pre-announce anything but what do you think yeah Peter I think I think you're really on to something and when we when we sort of look at the worlds right the infrastructure world were in you know and and certainly some of our partners would draw a slightly different picture but we see Veen as as the common thread in the middle right because at the end of the day and I think you mentioned it as you were just talking there you know when we talk about hybrid cloud right we see now our customers especially commercial and enterprise and large enterprise customers it is it is a very heterogeneous environment it's multiple hypervisors different storage platforms it's multiple cloud providers because they're picking best to breed for the workload and so they need a platform that's got really breadth in depth of coverage and so the the one common thread we weave between there is Veeam right so if if we are that data protection layer as I mentioned before you know we're in the middle we're protecting a primary workload and we're writing our data to a secondary workload but in the middle is Veeam and so that workload we're protecting on Prem cloud secondary data centers theme is the thread in between there you can move that data around and wherever that is we can make use for now I'll give you a good example today you know let's say we're protecting a visa or workload on Prem right we back that up to it to assist them locally so we can have fast restore but ultimately we tear that out bean cloud tier capacity tear tear that's AWS so we can we can actually recover workloads in Atos one or two we have directory store which would take a backup from on-prem and directly move it there for DRAM migration purposes or we can simply consume that that backup that's now up in the cloud because Veen backups are self-describing we can lose the system on Prem and recover it so your point about making the data close to your workload with with veeam in the middle we enable that for our customers regardless of where they want to go yeah so we think that that's going to change the mindset from protection to assurance so assure your data is local and then it's the right data it's Integris and all the other things and then ultimately you know move it and back it up to some other site so it's but it's a subtle switch it's gonna be interesting to see how it plays out this is obviously well and as we talked about as you need to begin to protect things like containers like functions that come and go super quickly assurance has more meaning because there's the security threats and if you can help solve those problems through your partners through automation spinning containers up and down making it harder for the bad guys to you know a target a specific container raising essentially the cost so lowers their ROI that is a new game yeah and and I'll call out one thing a rat mayor I thought did a really good job on stage yesterday in his keynote he popped the slide which talked about the universal storage API and with theme and it had all our partners sort of around that you know that that I think he Illustrated our strategy which is hey we're focusing on the core parts of backup and replication and helping the core parts the data protection we're gonna partner with everything else that's adjacent to that we're not going to go solve maybe some of the security problems ourselves we're gonna enable some hooks secure restore maybe as an example we've announced you know in the technology keynote yesterday we announced a new API that allows partners to come in and crack open Veen backups and take a look at them one of the things could be deep inspection so you know our strategy and our goal is really to be open to our partners so that they can come in and add value and again our our goal for our customers is give them choice so give them choice of to choose best-of-breed solutions don't go do it and say hey you got to go use partner a you know hey we're gonna we're gonna have an API that others can build to and you go choose your best debris partner or your platform technology choice well and with 350,000 customers you've got a big observation space so guys have always been customer driven can give you the last word on vivant 2019 you're our last guest then we're gonna wrap with a little analysis on our end but give us the bumper sticker yeah I think the bumper sticker is hey you know we've you know from a business perspective you know we hit a billion dollars in bookings we have hit 350,000 customers the Innovation Train is really moving our Veen clouds here that we announced with update four earlier this year has gone way beyond our expectations and and we're looking to continue to build on that momentum so we're just super excited you know we if I'm the closer I'll say thanks to all of our sponsors we have a lot of great sponsors and on the cloud side on the on the Alliance partners side the channel side you know it's just it's it's a testament to where we are as a companies yeah and you're building out a great ecosystem congratulations on that and and good luck going forward and we'll see you around at the shows it's great it's great to have you guys right thank you all right you're welcome all right keep it right there everybody Peter and I went back to wrap right after this short break and watching the cube live from V Mon 2019 from Miami we'll be right back

live from Las Vegas it's the queue covering Dell technologies world 2019 brought to you by Dell technologies and it's ecosystem partners welcome back everyone to the cubes live coverage of Dell technologies world here in Sin City I'm your host Rebecca night along with my co-host Stu minimun we have Chadds a catch he is the SVP PKS and Deltek Alliance at pivotal thank you so much for coming back on the cube Rebekah it is my pleasure Stu as always this is a big anniversary actually this isn't he I'm glad you brought it up this is this is Mark's 10 years of the cube at Dell technologies world and you're a cube MVP I want to hear you break it down for us would listen down this milestone when when when you guys started doing this I'm not sure whether anyone knew whether there was gonna be a season two but you know I think at these events distilling down what's happening bring in people with diverse points of view you guys have always made it real shared the perspective of the ecosystem challenged us to keep it a no-spin zone which i think is a great formula yeah Chad thank you so much first of all you know one of the things we do come in opinionated but one of the things we want is we want guests with opinions and luckily you've always brought it we love having you on the program and boy have things changed a lot in the last 10 years so I want to get your view on the keynote so I mean Chad you and I go back way we we were colleagues back at EMC I remember when you were acquired into the company we worked on like I scuzzy stuff which nobody even talks anymore of my scuzzy storage networking the dark art of that stuff but VMware was something that you know it really was a lifter for both of our careers I think it was really interesting to see how central VMware is to the strategy that we saw how it fits into multi cloud I just got a note from Dave Volante said you know Pat Geller drew up on there talking about multi cloud and you know let's not think that Microsoft obviates the need for AWS Atos is the first the big cloud and absolutely VMware's working with them so I'd love to get your take on you know VMware and the multi cloud and VMware with delve as opposed to VMware with EMC there's a lot to unpack in that yeah we've got like an hour so the first thing that I think is interesting is that history and context gives perspective but ditch context and dick ditch history and if you think of the now and the market the customer no longer wants servers network storage they don't want virtualization they don't even want things like RDS and ec2 and we still want the emotion right you know the the reality is is that with every customer that I see they're looking for things that only the Giants in increasingly vertically integrated stacks can do so think about the whole keynote through that context right basically you saw Dell EMC and VMware more aligned than ever and again you and I have the history in the context of years of EMC VMware I remember the first time I did a vien the first time played with ESX 3.0 and virtual Center 100 and 200 and going is gonna change the universe but fast-forward to now people are like I want an easy button for the whole stack Dell EMC says this is the common building block VX rail my former baby is now grown up and it's the standardized way to deploy the VMware stack on Brentt Project I mention is moved out of a hypothetical into beta management of that lifecycle as a cloud service and you'll notice that Michael started it in the keynote kubernetes is central to that vision our efforts between pivotal and VMware in the kubernetes universe is singular the objective is to make that whole stack simple to deploy consume grow etc etc now Chad I needed a comment on one thing so I seem to remember back another project you worked on that was going to start as a managed server and that turned into Acadia which turned into VCE which turned into a product because the customer gave very clear feedback that most of them didn't want it so why is it is it different now what's different now what changed in a decade the customer wants the outcome in the historical like you know that's a Wayback Machine right so circa 2010 the way you built a private cloud was an assemblage of server network computes virtualization in separate components delivering that as an outcome as a managed service even for VCE CPS D etc etc there we did it amazingly for about 3,000 customers but it was held together with services and human that's not software what's adapted is that the software-defined data center is now much more mature and it's possible for us to literally roll in a rack of VX rails manage it via dimension do full lifecycle updates not via NRC em but via button click in a window that is necessary for that degree of simplification now if we had stopped there in the keynote we'd be missing the mark because basically the customers have said I want a common multi cloud hybrid cloud operating model with consistent control consistent infrastructure can consistent kubernetes consistent developer abstractions and I thought it was a pretty big deal to see Microsoft join what VMware's been doing with AWS and you know we were there at the Google announcement at Google next you know just a couple weeks back so I think that we're moving into a face to be a little opinionated here where customers wanting an outcome are going to look at Deltek Microsoft Amazon sometimes Google and go tell us how we bring ourselves to the digital future it's interesting because that means what things that people don't like which is vertically integrated stacks they don't like industry consolidation they don't like optionality being reduced but if you want an outcome frankly increasingly what's happening is consolidation at this layer and a blossoming ecosystem above it so so where where where will that bring us I mean I think I think you're absolutely right in you you started talking about how we're sort of putting aside history and perspective and now let's bring it back into the conversation yeah what does that mean I think I think that for human beings watching the era of doing cool things assembling things that run VMS even things that run kubernetes and containers is increasingly turning into an a realm where you have to let go so that you can do things that matter increasingly the ecosystems are hyper standardizing those stacks and delivering them as a service in a public cloud and on-premises our objective and I think it's something that only Deltek really is in a position to do is to do that in a way which is open multi-cloud and yet also deeply integrated and what I would say is again to anybody watching is if you're deep passion is in building cool things build cool things but on top of that stuff so chat great set up for the question I have kubernetes I've argued for a number of years is something that the average customer shouldn't need to worry about it's something that should be baked into the platform all the public clouds have it VMware has it your babies PKS today help help us reconcile the statement you were just making and what PKS because I know it's really cool tech and there's lots of pieces and lots of smart people work on it but so you know how does that fit so a stew again you and I go back aways do you remember you remember the state of virtualization circa 2006 sure you'd show up to the VM world and it would be filled with people deeply passionate at the time it was like three four thousand people we're gonna change the world with virtualization all of them were doing weird science projects very few of them could say and I'm running this in production to you know do bla and I'm making the hospital run better right but they'd be like look at how cool this is the technology matured a lot and if you look at the time frame 2010 which was vSphere for if my timing is right it was the first year where it was like kind of for reals right and people started to talk about hey I can do cool stuff kubernetes is currently in the 2006 of virtualization so I've been doing this now for a year we as del tech are now the number two contributor to kubernetes right after Google more than RedHat more than RedHat is that combining all the pieces we have basically drove and so hard towards this point because we think it's essential now you've got the help to your team as part of that that's a big that is a big part of the strategy right how do we make contributions for the native upstream community and lead that charge via be a good citizen of that ecosystem one two we will make PKS Enterprise PKS in a central PKS the best simplest curated way to make this work that said kubernetes has three major release over three months PKS 1.4 using one dot 13.5 came out last week 1.5 with beta support for Windows is just arriving and we did a beta last week three months from now there's gonna be another major release I'm doing a session that basically says and I'm the I'm a cheerleader I'm like a superfan this is currently like juggling flaming chainsaws right yeah it's it's like you were like what and I'm like yeah so the CNC F which is the ecosystem around kubernetes kubernetes on its own is just like a base component you need to have this and this and this and this has 647 things on the landscape landing page that means if you take five minutes per you would spend a week without sleep without eating like the Game of Thrones watching last night's no food no sleeping no bathroom breaks today Chad five minutes each today and you would get a chance to learn all of those but to really deeply understand what they do you can't do with that in five minutes that's six months of work people need that market to consolidate mature industrialize and we're doing it having having been part of the VX rail envy san ramp being part of the NSX ramp the vSphere ramp the converged infrastructure ramp what's happening with kubernetes and with peak s exceeds the ramp curves for all of those so if you're a customer and you're thinking about do I need this kubernetes thing the answer is yes we have 50 of the Fortune 500 customers now using peak s people are doing it for real but it's still early days now some people may go that's scary and I'm gonna take a timeout I wouldn't do that I would say that just like virtualization 2006 those people who were there at vmworld got a ton of value leveraged and learning and now it's like an industry standard we are going to make kubernetes part of the VMware software defined data center and you heard Pat and Michael talk about it so it sounds like it's going in the direction that you that you believe thumbs up thumbs up from Chad sockets you heard it here first thumbs up it's been it's been a really exciting year and this year we are gonna take that momentum and accelerate it to the moon and beyond but we can't wait to have you back at this table this time next year for Season eleven thank you so much for returning to the queue Rebecca thank you I'm Rebecca Knight first amendment we will have much more from the cubes live coverage of Dell technologies world here in Las Vegas coming up in just a little bit [Music]

>> Let me check. (uptempo orchestral music) (uptempo techno music) >> Live, from San Francisco, it's theCUBE! Covering Red Hat Summit 2018. Brought to you by Red Hat. >> Hey welcome back everyone, we are live here with theCUBE in San Francisco, Moscone West, for Red Hat Summit 2018. I'm John Furrier, co-host of theCUBE, with John Troyer co-host, analyst this week. the TechReckoning co-founder. Our next two guests are Ashesh Badani, vice president and general manager of OpenShift Platform and Alex Polvi, CEO of CoreOS, interview of the week because CoreOS now part of Red Hat. Congratulations, good to see you again. Thanks for coming on theCUBE. >> You're welcome. >> So obviously this is for us, we've been covering both of you guys pretty heavily and we've been commenting very positively around the acquisition of CoreOS. Two great companies that know open-source, pure open-source. You guys got the business model nailed down, these guys got great tech. You bring it together. So the first question is how's everyone doing? How's everyone feeling? And where's the overlap, if any and where's the fix? Explain the true fit of CoreOS. >> I'm going to start Alex, you want to jump in after. We're very excited right, so when we first had interactions with CoreOS, we knew this is going to be a great fit. The conversation we had earlier, both companies delivers in open-source, delivers in the mission center to take us forward regard to Kubernetes, as the container orchestration engine, and then being able to build out value for our customers around it. I think from our perspective, the work that both CoreOS did in advancing the community forward but also the work they've done around automation or their upgrades, management metering, charge back and so on. Being able to bring all those qualities into Red Hat is incredible. So I think the fits been good. It's been three months, I'll let Alex comment some more on that but we've been doing a lot of work from integration perspective around engineering, around product management. At Red Hat Summit this week, we reveal details around some of the converged road maps, which I can talk about some more as well. So we're feeling pretty good about it. >> Alex, your reaction. >> Yes, it's been three months. If you've studied CoreOS at all, you know everything that we do really centers around this concept of automated operations. And so by being part of Red Hat, we're starting to bring that to market in a much bigger and faster way of really accelerating it. The way the acquisition are really successful is either mutually beneficial to both companies and they accelerate the adoption of technology and that's definitely happening. We had the announcement yesterday with Red Hat CoreOS around the Linux distribution. Last week, we did the operator framework. It was very central to the work that we've been doing as part of CoreOS, and then as companies in a lot of ways is being part of Red Hat for three months now. This is what our company would have looked like if we ever just another 10 years along or whatever very similar, we're like a mini Red Hat, and now we're leaped ahead in a big way. >> And you guys done a good work. We've documented on theCUBE many times, and we were in Copenhagen last week. Now covering the operating framework but I want to get your reaction. You guys did a lot of great work on the tech side obviously, you can go into more detail but we've always been saying on theCUBE. If you try to force monetization in these emerging markets, you're optimizing behavior. And this was something that's gone on, we've seen containers. It's been well documented obviously what's happened. It's certainly a beautiful thing. Got Kubernetes now on top working together with that. If as an entrepreneur out there that are building companies. If you try to force the monetization too early, you really thinking differently. You guys stay true to it. Now we've got a good home with Red Hat. Talk about that dynamic because that was something that I know you guys faced at CoreOS and you've managed through it. Tempted probably many times to do something. Talk about the mission that you had, staying true to that and just that dynamic. It's challenging. >> Yeah, as we set out to build a company in general, there are really three operating principles. There is build a great technology to solve our mission which is to secure the internet through automated operations, build a great place to spend their days which is really about the people and the culture and so on. Why are we doing this, and the third was to make it sustainable and by that I mean to build their own money fountains, building out of the middle of our campus. And so by joining Red Hat it's we have a money fountain sitting there. (laughing) It's spewing off a ton of cash flow every single quarter that allows us to continue to do those first two things in perpetuity, and that third one is something every company needs in order to continue to execute towards the mission. And the thing that's so awesome about working with Red Hat is we're very much aligned and compatible. Red Hat's mission isn't exactly the same thing we are working but it's definitely compatible. It's like Apache and GPL are compatible. It's like that type of compatible. >> You both believe in open-source in a big way. Talk about the Red Hat perspectives. Now you got like a kid in a candy store. Openshift made a big bed with Kubernetes. You see now, you have the CoreOS, how has it changed in Red Hat internally? Things moving around actually accelerates the game a bit for you guys, and you're seeing new life being pumped into OpenStack. You're seeing clear line of sight with Kubernetes on the app side. We were just at KubeCon. A lot of people are pretty excited. There's clear lines of sight on what's defacto. What people are going to build around, and also differentiate. >> Right, so I'll start off by saying I really hope our CEO, Jim Whitehurst doesn't see this interview but if it goes off in terms of money factor. I'm currently make budget request. I think I know what's going on. >> Balance sheet, cashless now. It's in the public filings. If I see a fountain of money spewing off the thing, >> The ability to reinvest. >> This is a really good fit. (laughing) The way to say this, they have a great business model. >> Yeah, yeah. >> Some of us will make money, some of us will spend the money. Some of us will spend the money, it will work out well. (laughing) >> It's a great win. It's a great win. It obviously accelerates the plans. The commercialization is already there with Red Hat. This is just a good thing for everybody but the impact of you guys accelerating, just seeing OpenShift. You can boil it down to the impact of Red Hat. What is the impact? >> So in all seriousness, I think the focus for us really has been about there is so much complimentary work that's been going on with the CoreOS team that we're bringing into OpenShift, and to Red Hat in general that accelerates everything that you're seeing. You saw some amazing announcements happen this week with regard to our partnership with Microsoft and getting OpenShift out and Azure, and joint support offering. The work we're doing with IBM to get IBM middleware as well as IBM Cloud Private support integrated with OpenShift. The work that Alex referred to around automation, being able to bring that to our customers. We see all the excitement around that front as well so we want to take all Techtonic work that has been going on at CoreOS, then move that to OpenShift. Carry forward the community that CoreOS built around Container Linux, and actually inject a lot those ideas into that Linux, our flagship technology. Bring that passion and energy to bear as well, and then carry forward a lot of the other projects that they have. For example, the Quake Container Registry, that's extremely popular. Carry that forward, support our customers to use that both stand alone integrated with the OpenShift platform. Other projects like FCB that Alex has been talking about which is the underpinnings of Kubernetes plus running worldwide. So all of those things, we can bring forward, and then all the advancements that were made in place by CoreOS as they're working towards their money fountain, just plug that right into it. >> And just as a point of reference, Brendan Burns flew in yesterday. Microsoft Build is going up so he left their own conference to come down here. >> As did Scar Guthrie, right? >> That's a great testament. This is the testament. They're coming down, really laying down support. This is a real big deal. This is not a fake deal, it's real. >> And so I want to talk a little bit about specifics of the timeline, the road maps. Sometimes with these mergers or acquisitions, it's well the technology will be incorporated at some point, and then it goes away to die and you never see it again. And then the people all leave, and then you ask what was going on. But here, you actually have, I was great. You were talking to me. You have some specific timelines and we'll start to see some of the Techtonics Stack in OpenShift fairly soon. >> Yes, absolutely so the acquisition was announced three months ago and we said at that time that by Red Hat Summit, we'll lay out for you a road map and so we're now starting to do that. We put out release of some materials around some details with regard to how that's coming out. We have detailed sessions going on at Red Hat Summit around the integration plans between Red Hat, OpenShift and CoreOS with a few specific areas with regard to OpenShift. You'll start seeing the earliest versions if you will of the work that's being done. This summer, we'll deliver the full road map to you there by the end of this calendar year. With regard to, for example pieces like the Quake Container Registry that's being made available and being sold now as we speak. Customers can go get that, and we want to make sure no customer is left behind. Right, that's a principle we put out. And with regard to supporting any existing customers on Techtonic or the Container Linux space, we're doing that as we're working to integrate them into the Red Hat portfolio. Can you talk a little bit about the decision for Red Hat's atomic coast and Container Linux? Now re-named again, CoreOS. That was one of the seminal inventions that you all made as you started the company. I think it had some brilliant ideas again about security and the operational aspects but can you talk about some of those technologies and the decisions made there? >> Yeah, like I said, the acquisition of CoreOS Red Hat was about saying look what can we take that CoreOS has been doing to accelerate both work and community but also what could be doing to deliver this technology to customers. So the goal was we'll take all the atomic and the word that's been going on there have that be superseded by the work that's coming out of CoreOS Container Linux carry the community forward. Release a version of that called Red Hat CoreOS and in its initial form make that actually an underlying environment to run OpenShift in. Okay so for customers who want the automation that Alex talked about earlier. They made that available both at the underlying platform. Make it available in OpenShift platform itself via the work that's come from Techtonic, and then ultimately, Alex will talk about this some more through operators. So trusted operations from ISP or third party software that would run on the platform. All right so now if you will, we'll have full stack automation all the way through. OpenShift also support Red Hat Linux, a traditional environment for the thousands of customers that we have globally. Over a period of time, you should expect to see much of the work that's going on Red Hat CoreOS find its way into it as well. So I think this just benefits all around for us both in the near term as well as long. >> And Red Hat Container certification, where does that fit into all this? >> Yeah, a great question, so what we announced maybe was, actually was two years ago was a Container certification program. Last year, we spent some time talking about the health of those containers, and being able to provide that to customers. And this year, we're talking about trusted operations around those containers. That carries forward, we've got hundreds of ISPs that have built certified containers around it, and now with the operator framework, we've had, I think it's four ISPs demonstrating previews of their operators working with our platform as well as 60 more that are committed to building ISP operators that will be certified again. >> So people are certified in general, pretty much. I think we're very excited. The fact that we went to KubeCon last week, announced that the operating framework have been based on the ideas that the CoreOS team has been working on for at least two years. Making that available to the community and then saying for the ISPs that want a path to market. Going back to the money fountain again for the ISP that want to pass through market which is pretty much all of them. We also have the ability to do that so give them an opportunity to make sure that as wide as possible some adoption of the software at the same time help with commercialization. >> Can you guys share your definition of operator because I saw the announcement but we we're on a broader definition when we see the DevOps movement going the next level. It's all about automation and security, you mentioned that admin roles are being automated in a way to see more of an operator function within enterprise and emerging service providers. So the role operator now takes on two meanings. It's a software developer. It also is a network operator, it's also a service, so what is that, how do you guys view that role because if this continues, you're going to have automation. More administrator is going to be self healing, all this stuff is going to go on. Potentially operations is now the developers and IT all blurring together. How do you guys define the word operator in the future state? >> Well I know the scenario of great interest to you. >> So operator is the term for the piece of software that implements the automated operations. And so automated operations, what is that? Well that's what sets apart, the way I think about it is what sets apart a cloud provider verses a hosting provider. It's a set of software that really runs the thing for you and so if we're going to get into specific Kubernetes lingo, it would be an application specific controller. That's a piece of software that's implements the automated operations. And automated operation is a software that gives you that simplicity of cloud. It's at the core of a database as a service. It's both hosting but also automated operations. Those two things together make up a cloud service and that software piece is what we're decoupling from the hosting providers for the first time and allowing any open-source project or ISP brings the simplicity of cloud but in any environment. And that's what the operator is a piece of software that actually goes and implements that. >> So a microservices framework, this fits in pretty nicely. How do you see obviously? >> Microservices, there's all these terms. Microservice is more of an architecture than anything but it's saying look, there's these basic things that every operations team has to go and do. You have to go and install something, you have to upgrade it, you have to back it up, when it crashes in the middle of the night, get it going again. A lot of these things, the best practices for how you do them are all common. There's no ingenuity in it. And for those things, we can now because of Kubernetes write software that just automates it, and this was not possible five years ago. You couldn't write those software. There were things like configuration management systems and stuff like that that would allow companies to build their own custom versions of this. But to build a generic piece of software that knows how to run application like Prometheus or a database or so on. It wasn't possible to write that and that's what the first four or five years of CoreOS was is making it possible, that's why you saw all these mat and new open-source projects being built. But once it was possible it was like let's start leveraging that. You saw the first operator come out about a year ago, and I think it was our ATD operator was the first one, and we started talking about this as a concept. And now we're releasing operator framework which is from all the learnings of building the first couple. We now made a generic, so anybody can go and do it, and as part of Red Hat, we're now bringing it to the whole ISP ecosystem. So the whole plan to make automated operations ubiquitous is still well underway. >> I'd love to extend that conversation though to the operator, the person. >> Right. I think you and your team brought the perspective of the operational excellence right to the table. A lot of cloud has been driven by the role of developer and DevOps but I've always felt like well wait a minute operators the people who use to be known as IT insisted they had a lot to bring to the table too about security and about keeping things running, and about compliance and about all that good stuff. So can you talk a little bit as you see the community emerging, and as you see all these folks here. How do you talk to people who want to understand what their role is going to be with all this automation in keeping the clouds running? >> Computers use to be people too. (laughing) But we're not going to completely automate away everything because there's still parts of this wildly complex system that justifies whole conferences of thousands of people that require a whole lot of human ingenuity. What we're doing is saying let's not like do the part that is the fire drill in the middle of the might that keeps you from making forward progress. The typical role of an operations person today is just fighting fires of mundane things that don't actually add a lot of value to the business. In fact, this guy is difficult because you only get brought up when things are on fire. You never get an praise when things are going well. And so what we want to do is help the operations folks put out those fires like the security updates. Let's just roll those out automatically. The way you do those across all organizations does not need to be special and unique but they're really critical to do right. >> Well it's just automate that stuff away and let the operations team focus on moving the business forward. The parts that require the human spirit to actually go and do, and if we get to a point where a CEO of a company is like, wow, I can not come up with a new vision for this imitative 'cause my operations team are just so fast at influencing them. Then we have to start worrying about operations people's job but I don't see that happening for a very long time. >> And no one is going to be sitting around twiddling their thumbs either. >> Let me just extend that point a little bit. The whole point of operators is to encapsulate human knowledge that ISPs have and bring that in the platform and automate it. So the challenge that we've had is an operations person is required to know a lot about a lot. So the question then really is how can we at least take some of what's already known by people and be able to replicate that and that allows for every one to move forward. I think that's just forward-- >> Well, there's a bigger picture beyond that, so I agree but there is also scale. With cloud, you have scale issues. So with scale automation is a beautiful thing 'cause the fire has also grown exponentially too so you can't be operating like this. Scale matters, super. >> The reason that this stuff was invented at Google initially was not because of Google's high career per second. Is that they were, to build the application they're building required so many servers that you couldn't hire enough operations people without writing software to automate it. So they were forced to custom design the system because they had so many servers to run to build the software that they wanted to build. And other companies are just now getting to that point because every company is going through a digital transformation. They have to have thousands of servers just to run their applications. There's no way you're just going to hire the operations staff to go and do it all by hand. You have to write software to turn the operations people into mech warriors of running servers. You need to wrap them in automation in order to scale that. >> At KubeCon, she made a comment that all those operations folks at Google are software developers. >> Brand engineers. >> Brand engineering, so they're not Ops guys just pushing buttons and provisioning gear and what not. They're actually writing code. You bring up the Google piece, the other piece that we heard at KubeCon. We hear this consistently that this is now a new way to do software development. So when a former Googler went to work for another company, left Google. She went in and she said, "Oh my God, you guys don't do. "You don't use board?" To her, she's like how do you write software? So she was like young and went out in the real world and was like wait a minute, you don't do this? So this is a new model in software development at scale with these new capabilities. >> I think so and I think what's really important is the work we're doing with regards to an ecosystem perspective to help folks. So one of the top things I hear from customers all the time is this sounds fantastic. Everyone's talking about DevOps or microservices or wanting to run Kubernetes at scale. Do I have the skills? Can I keep up with the change that's in place and how do I continue going forward around that? So we announced at Red Hat Summit Managed offerings from let's say Atos and DXC where you've got goals to integrate us helping folks, or companies like Extension T systems. The CEO came and spoke today about the work we're doing with them to help connected cars, and those applications be rolled out quick and fast. I think it's going to take a village to get us to where we want to because the rate of change is so fast around all of these areas and it's not slowing down that we'll have to ensure there's more automation and then there's more enablement that's going on for our customers. >> So some clarity, can you guys comment on your reaction to obviously we've seen OpenStack has done over the years and now with well Containers, now Kubernetes. You seeing at least two ecosystems clearly identified. Application developers, cloud native and then I would call under the hood infrastructure, you got OpenStack. Almost it clarifies where people can actually focus on real problems that the Kubernetes needs. So how has the Container, maturation of Containers with Kubernetes clarified the role of the community? If this continues with automation, you can almost argue that the clarity happens everywhere. Can you comment on how you see that happening? Is it happening or is it just observation that's misguided? >> I think we're getting better with regard to fit for a purpose or fit for use case. All right, so if you start thinking about the earliest days of OpenStack. OpenStack is going to be AWS in a box, and then you realize well that's not a practical way of thinking about what a community can do a build at scale. And so when you start thinking about a Word appropriate use case for this. Now you start betting if you will, a set of scales, you set expectations around how to make that successful. I think we'll go through the same if we haven't already or even going through it with regard to Kubernetes. So not every company in the world can run Managed World call. DYI Kubernetes, don't many companies will start with that. And so the question is how do we get to the point where there's balance around it and then be able to take advantage of the work? For example, companies like Red Hat work for us was doing to help accelerate that path 'cause to the point Alex was trying to make is the value for them being able to keep up with the core release of Kubernetes? And every time a bug shows up to go off and be able to fix and patch it, and watch that or is the value building the next set of applications set on top of platforms. >> That's great, well congratulations guys. Thanks for coming on theCUBE. Appreciate the insight. Congratulations on the three months into Red Hat. Good fit, and enjoy the rest of the show. Thanks for coming on, I appreciate it. >> Thanks. >> Live from Red Hat Summit, it's theCUBE's coverage here of Red Hat and all the innovation going on out in the open. We're here in the middle of, we open the floor with Moscone West with live coverage. Stay with us for more after this short break. (uptempo techno music)

>> Narrator: Live from Las Vegas, it's the Cube, covering IBM Think 2018, brought to you by IBM. >> We're back at IBM Think 2018. You're watching the Cube, the leader in live tech coverage. My name is Dave Vellante and I'm here with my co-host, Peter Burris. Ken King is here; he's the general manager of OpenPOWER from IBM, and Sumit Gupta, PhD, who is the VP, HPC, AI, ML for IBM Cognitive. Gentleman, welcome to the Cube >> Sumit: Thank you. >> Thank you for having us. >> So, really, guys, a pleasure. We had dinner last night, talked about Picciano who runs the OpenPOWER business, appreciate you guys comin' on, but, I got to ask you, Sumit, I'll start with you. OpenPOWER, Cognitive systems, a lot of people say, "Well, that's just the power system. "This is the old AIX business, it's just renaming it. "It's a branding thing.", what do you say? >> I think we had a fundamental strategy shift where we realized that AI was going to be the dominant workload moving into the future, and the systems that have been designed today or in the past are not the right systems for the AI future. So, we also believe that it's not just about silicon and even a single server. It's about the software, it's about thinking at the react level and the data center level. So, fundamentally, Cognitive Systems is about co-designing hardware and software with an open ecosystem of partners who are innovating to maximize the data and AI support at a react level. >> Somebody was talkin' to Steve Mills, probably about 10 years ago, and he said, "Listen, if you're going to compete with Intel, "you can copy them, that's not what we're going to do." You know, he didn't like the spark strategy. "We have a better strategy.", is what he said, and "Oh, strategies, we're going to open it up, "we're going to try to get 10% of the market. "You know, we'll see if we can get there.", but, Ken, I wonder if you could sort of talk about, just from a high level, the strategy and maybe go into the segments. >> Yeah, absolutely, so, yeah, you're absolutely right on the strategy. You know, we have completely opened up the architecture. Our focus on growth is around having an ecosystem and an open architecture so everybody can innovate on top of it effectively and everybody in the ecosystem can profit from it and gains good margins. So, that's the strategy, that's how we design the OpenPOWER ecosystem, but, you know, our segments, our core segments, AIX in Unix is still a core, very big core segment of ours. Unix itself is flat to declining, but AIX is continuing to take share in that segment through all the new innovations we're delivering. The other segments are all growth segments, high growth segments, whether it's SAP HANA, our cognitive infrastructure in modern day to platform, or even what we're doing in the HyperScale data centers. Those are all significant growth opportunities for us, and those are all Linux based, and, so, that is really where a lot of the OpenPOWER initiatives are driving growth for us and leveraging the fact that, through that ecosystem, we're getting a lot of incremental innovation that's occurring and it's delivering competitive differentiation for our platform. I say for our platform, but that doesn't mean just for IBM, but for all the ecosystem partners as well, and a lot of that was on display on Monday when we had our OpenPOWER summit. >> So, to talk about more about the OpenPOWER summit, what was that all about, who was there? Give us some stats on OpenPOWER and ecosystem. >> Yeah, absolutely. So, it was a good day, we're up to well over 300 members. We have over 50 different systems that are coming out in the market from IBM or our partners. Over 20 different manufacturers out there actually developing OpenPOWER systems. A lot of announcements or a lot of statements that were made at the summit that we thought were extremely valuable, first of all, we got the number one server vendor in Europe, Atos, designing and developing P9, the number on in Japan, Hitachi, the number one in China, Inspur. We got top ODMs like Super Micro, Wistron, and others that are also developing their power nine. We have a lot of different component providers on the new PCIe gen four, on the open cabinet capabilities, a lot of announcements made by a number of component partners and accelerator partners at the summit as well. The other thing I'm excited about is we have over 70 ISVs now on the platform, and a number of statements were made and announcements on Monday from people like MapD, Anaconda, H2O, Conetica and others who are leveraging those innovations bought on the platform like NVLink and the coherency between GPU and CPU to do accelerated analytics and accelerated GPU database kind of capabilities, but the thing that had me the most excited on Monday were the end users. I've always said, and the analysts always ask me the questions of when are you going to start penetration in the market? When are you going to show that you've got a lot of end users deploying this? And there were a lot of statements by a lot of big players on Monday. Google was on stage and publicly said the IO was amazing, the memory bandwidth is amazing. We are deploying Zaius, which is the power nine server, in our data centers and we're ready for scale, and it's now Google strong which is basically saying that this thing is hardened and ready for production, but we also (laughs) had a number of other significant ones, Tencent talkin' about deploying OpenPOWER, 30% better efficiency, 30% less server resources required, the cloud armor of Alibaba talkin' about how they're putting on their on their X-Dragon, they have it in a piler program, they're asking everybody to use it now so they can figure out how do they go into production. PayPal made statements about how they're using it, but the machine learning and deep learning to do fraud detection, and we even had Limelight, who is not as big a name, but >> CDN, yeah. >> They're a CDN tool provider to people like Netflix and others. We're talkin' about the great capability with the IO and the ability to reduce the buffering and improve the streaming for all these CDN providers out there. So, we were really excited about all those end users and all the things they're saying. That demonstrates the power of this ecosystem. >> Alright, so just to comment on the architecture and then, I want to get into the Cognitive piece. I mean, you guys did, years ago, little Indians, recognizing you got to get software based to be compatible. You mentioned, Ken, bandwidth, IO bandwidth, CAPI stuff that you've done. So, there's a lot of incentives, especially for the big hyperscale guys, to be able to do more with less, but, to me, let's get into the AI, the Cognitive piece. Bob Picciano comes over from running a $15 billion analytics business, so, obviously, he's got some knowledge. He's bringin' in people like you with all these cool buzzwords in your title. So, talk a little bit about infrastructure for AI and why power is the right platform. >> Sure, so, I think we all recognize that the performance advantages and even power advantages that we were getting from Dennard scaling, also known as Moore's law, is over, right. So, people talk about the end of Moore's Law, and that's really the end of gaining processor performance with Dennard scaling and the Moore's Law. What we believe is that to continue to meet the performance needs of all of these new AI and data workloads, you need accelerators, and not just computer accelerators, you actually need accelerated networking. You need accelerated storage, you need high-density memory sitting very close to the compute power, and, if you really think about it, what's happened is, again, system view, right, we're not silicon view, we're looking at the system. The minute you start looking at the silicon you realize you want to get the data to where the computer is, or the computer where the data is. So, it all becomes about creating bigger pipelines, factor of pipelines, to move data around to get to the right compute piece. For example, we put much more emphasis on a much faster memory system to make sure we are getting data from the system memory to the CPU. >> Coherently. >> Coherently, that's the main memory. We put interfaces on power nine including NVLink, OpenCAPI, and PCIe gen four, and that enabled us to get that data either from the network to the system memory, or out back to the network, or to storage, or to accelerators like GPUs. We built and embedded these high-speed interconnects into power nine, into the processor. Nvidia put NVLink into their GPU, and we've been working with marketers like Xilinx and Mellanox on getting OpenCAPI onto their components. >> And we're seeing up to 10x for both memory bandwidth and IO over x86 which is significant. You should talk about how we're seeing up to 4x improvement in training of MLDL algorithms over x86 which is dramatic in how quickly you can get from data to insight, right? You could take training and turn it from weeks to days, or days to hours, or even hours to minutes, and that makes a huge difference in what you can do in any industry as far as getting insight out of your data which is the competitive differentiator in today's environment. >> Let's talk about this notion of architecture, or systems especially. The basic platform for how we've been building systems has been relatively consistent for a long time. The basic approach to how we think about building systems has been relatively consistent. You start with the database manager, you run it on an Intel processor, you build your application, you scale it up based on SMP needs. There's been some variations; we're going into clustering, because we do some other things, but you guys are talking about something fundamentally different, and flash memory, the ability to do flash storage, which dramatically changes the relationship between the processor and the data, means that we're not going to see all of the organization of the workloads around the server, see how much we can do in it. It's really going to be much more of a balanced approach. How is power going to provide that more balanced systems approach across as we distribute data, as we distribute processing, as we create a cloud experience that isn't in one place, but is in more places. >> Well, this ties exactly to the point I made around it's not just accelerated compute, which we've all talked about a lot over the years, it's also about accelerated storage, accelerated networking, and accelerated memories, right. This is really, the point being, that the compute, if you don't have a fast pipeline into the processor from all of this wonderful storage and flash technology, there's going to be a choke point in the network, or they'll be a choke point once the data gets to the server, you're choked then. So, a lot of our focus has been, first of all, partnering with a company like Mellanox which builds extremely high bandwidth, high-speed >> And EOF. >> Right, right, and I'm using one as an example right. >> Sure. >> I'm using one as an example and that's where the large partnerships, we have like 300 partnerships, as Ken talked about in the OpenPOWER foundation. Those partnerships is because we brought together all of these technology providers. We believe that no one company can own the agenda of technology. No one company can invest enough to continue to give us the performance we need to meet the needs of the AI workloads, and that's why we want to partner with all these technology vendors who've all invested billions of dollars to provide the best systems and software for AI and data. >> But fundamentally, >> It's the whole construct of data centric systems, right? >> Right. >> I mean, sometimes you got to process the data in the network, right? Sometimes you got to process the data in the storage. It's not just at the CPU, the GPUs a huge place for processing that data. >> Sure. >> How do you do that all coherently and how do things work together in a system environment is crucial versus a vertically integrated capability where the CPU provider continues to put more and more into the processor and disenfranchise the rest of the ecosystem. >> Well, that was the counter building strategies that we want to talk about. You have Intel who wants to put as much on the die as possible. It's worked quite well for Intel over the years. You had to take a different strategy. If you tried to take Intel on with that strategy, you would have failed. So, talk about the different philosophies, but really I'm interested in what it means for things like alternative processing and your relationship in your ecosystem. >> This is not about company strategies, right. I mean, Intel is a semiconductor company and they think like a semiconductor company. We're a systems and software company, we think like that, but this is not about company strategy. This is about what the market needs, what client workloads need, and if you start there, you start with a data centric strategy. You start with data centric systems. You think about moving data around and making sure there is heritage in this computer, there is accelerated computer, you have very fast networks. So, we just built the US's fastest supercomputer. We're currently building the US's fastest supercomputer which is the project name is Coral, but there are two supercomputers, one at Oak Ridge National Labs and one at Lawrence Livermore. These are the ultimate HPC and AI machines, right. Its computer's a very important part of them, but networking and storage is just as important. The file system is just as important. The cluster management software is just as important, right, because if you are serving data scientists and a biologist, they don't want to deal with, "How many servers do I need to launch this job on? "How do I manage the jobs, how do I manage the server?" You want them to just scale, right. So, we do a lot of work on our scalability. We do a lot of work in using Apache Spark to enable cluster virtualization and user virtualization. >> Well, if we think about, I don't like the term data gravity, it's wrong a lot of different perspectives, but if we think about it, you guys are trying to build systems in a world that's centered on data, as opposed to a world that's centered on the server. >> That's exactly right. >> That's right. >> You got that, right? >> That's exactly right. >> Yeah, absolutely. >> Alright, you guys got to go, we got to wrap, but I just want to close with, I mean, always says infrastructure matters. You got Z growing, you got power growing, you got storage growing, it's given a good tailwind to IBM, so, guys, great work. Congratulations, got a lot more to do, I know, but thanks for >> It's going to be a fun year. comin' on the Cube, appreciate it. >> Thank you very much. >> Thank you. >> Appreciate you having us. >> Alright, keep it right there, everybody. We'll be back with our next guest. You're watching the Cube live from IBM Think 2018. We'll be right back. (techno beat)