(light music) You are Cube alumni. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) You are Cube alumni. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) You are Cube alumni. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) >> Today as a country, as a universe. >> Narrator: Congratulations, Reggie Jackson. You are Cube alumni. (light music) (light music) >> Narrator: Live from the Silicon Valley, It's the Cube. Covering Google Cloud Next 17. >> Hello and welcome to the Cube special coverage of Google Next 2017. This is the Cube's two days of live coverage here in Palo Alto studio. We have reporters and analysts on the ground. We have all the Wikibon analysts in San Francisco. Have been up there since Monday for the Google analyst summit. As well as reporters at the keynote. We're going to be going live to folks on the ground for a reaction and commentary from the keynotes. As well as all the big break outs and news coverage. Again, two days of live coverage and we want to put a shout out to Intel for their sponsorship and allowing us to do the two days of in depth coverage. Really breaking down the Cloud. And really talking about this new mega trend around Cloud service providers where it's a multi-cloud game, which is pretty clear that's happening. And then the SaaSification of the world with AI machine learning. Really changing the game on infrastructure, software development. This is the digital transformation. This is the May trend. And here to help kick off our two days of coverage is venture capitalist, Scott Raney, who's a partner at Redpoint Ventures, who has a lot of history in network software SaaS. Scott, thanks for joining us on the kickoff here. >> My pleasure. >> For our coverage. Yeah, the big story I on Google News is obviously Diane Green, great executive. She gets a lot of criticism for her presentation. Some people were saying it's a little bit sleepy, but she's got a folksy kind of, I call it the Berkeley kind of vibe, but she's super smart. She's a very cool person. But she came in from VMWare, which has a lot of chops in the enterprise so it's no surprise that Google Cloud is now marching heavily towards the enterprise. They have all the window dressing. You're seeing the all the check boxes next to the sales and marketing, some of the things that they're doing. But the end of the day, it's an AI machine learning at the center of all this. Where data and a new cloud developer or new developer market has been emerging very fast. They call it cloud native. You're investing in this space. Give me your thoughts on this because you guys have to look at the 20 mile stare down the road. Look at kind of that five year horizon or plus for investments whether it's early stage or what not, but you guys have done a lot with startups that have been successful. Twilio went public that you're on the board of. You have a lot of investments in there that are doing very, very well. The developers, the opportunities, what's your take as an investor writing big checks. >> Yeah, well I think Google is a really interesting way to start this conversation. Not just the Google Cloud platform, but Google as an entity. I think Google is frankly been defining about 10 years ahead of where enterprises are in terms of how they're thinking about building and deploying applications. And so, if you look at Google, the work they've done to actually support their internal efforts, these guys then create white papers, the white papers are then disseminated, and then a whole set of industries get kicked off around those. So obviously one of the great examples of that is what happen around Hadoop and that wave. I think what we're in the process of seeing right now is a whole series of innovations that are being developed around more kind of cloud native technologies. I think Kubernetes is a great example, which is really the outgrowth of work that Google had done around Borg. And so we spend a lot of time thinking about the work that Google's, the things that Google is working on now. Recognizing that's the future of enterprise computing. Obviously, it takes a while to get there. But, there have been massive industries you can create from that. >> And it's transformative too. Again, I mentioned Twillio. They went public. Great service. We saw Snap go public. They're now running on Google Cloud and some on AWS. There's game changing opportunities out there that are going to come out of these unique perspectives that developers and entrepreneurs might have. And say hey I'm going to innovate on camera technology. That becomes Snap, which becomes kind of a unique, weird app and then to a main stream. This is not a one off. I mean there's a lot happening around creative, young entrepreneurs and old, some guys our age. But either way, it's not just apps. It's transformation at the network level. All the way up to the top of the stack. >> Yeah. >> What are the trends around that? I mean because machine learning is obviously hot. What are you hearing for pitches? What's coming through your door? What are you looking at? You guys see a lot of deals. What's the trends that are coming out of there? >> Well, every pitch we see has machine learning in it. Every company has become an AI company at some level. So that's clearly a big trend. I think for us the way that we look at it in terms of investments is we're recognizing that the algorithms are really becoming commoditized in some level. And Google, with TensorFlow, is actually helping make that happen. As we just talked about, they're democratizing machine learning at some level. The key there is data. And so, when we look at these companies, we're looking for companies that have a unique, proprietary access to data that they can apply those algorithms to, deliver insight. I think one of the more interesting areas or applications around that we're seeing is in the SaaS space. Kind of upper level at the cloud space, how it's really not enough now to build a SaaS application that just automates a business process. What you have to do is deliver insights. You have to help make the people that are using these applications better at there job at some level and the way to do that is through things like machine learning. >> What's interesting, Peter Burris, who's one of our heads of research for Wikibon pointed out, last week when we we're covering Mobile World Congress, he goes it's interesting, you know years ago, when I was breaking into the business in the late 80s, early 90s, it was known processes, unknown technology, and those were automated. Now you have known technology and unknown processes. So getting those insights to get that discovery could really disrupt existing incumbents, big players. So someone can innovate, say hey, I'm going to innovate on a new process that's emerging. This seems to be the big trend that's going on and again the software model is changing. So how do you guys see entrepreneurs looking at the AI and are they that focused on that? Or do they see that? I mean what are the key areas? Do they actually say hey, I'm going to disrupt this marketplace with this one feature? We always hear the MVP or pick something and do it great. What are some of the things that you've seen? >> We're really seeing two things in the AI and ML space. We're seeing one is the general kind of platform play. People that are trying to actually offer machine learning to developers in some way, shape or form. And the reality is I think those are very difficult businesses to build. I think Google Cloud is actually extremely well positioned to be able to actually kind of drive that forward for developers based on all the work they've done internally and they way that cloud is built and architected. The second are applications are AI and ML. And that's where we're spending the vast majority of our time because we think that's where the most value we be created there for folks that don't own a cloud like Google. >> The thing that's interesting about entrepreneurs is it's been a nice thing, the cloud you can get into the game with open source and build a business. You don't have to get all the, provision the data center. That's kind of been talked about, it's not new news. Yeah, you can get up and running, but it's interesting. It was easy to get into the enterprise and then all of sudden now, as it gets more complicated, we're almost going back to the old days of it was really hard to crack the code in the enterprise. It seems to be a lot of new table stakes are emerging. It used to be could native, oh we're going to go to the enterprise. And you saw box.net, now being Box and Dropbox, they're getting in the enterprise very easily. But now, as we go I'd say post-2012, all these new requirements start to rear their ugly head around it's hard to get into the enterprise. So this is something that Google is certainly challenged with right now is that they have a lot of tech, they're serious about the enterprise, that's clear. But to be an enterprise contender and winner and winning deals, how hard is it to win the enterprise? And is that some that you see where the enterprise landscape has changed where it's harder or is it easier? What's your thoughts in the complexities in the enterprise? >> Yeah, I maybe have a different point of view than you do. Which is actually, I actually think it's actually easier now to penetrate the enterprise at some level than it ever has been before. But it has to start with product. And open source is an incredible phenomenon that we're seeing that's kind of overtaking the way that enterprises think about building infrastructure today. I don't think you can build an infrastructure company unless you're offering it as open source software. And so, what we look for in terms of investments and I think what entrepreneurs need to do is think about how do I build products that enterprises will love and release that as open source and open to see some level of adoption. When you see that then that's the best path to be able to go in and sell to them and building revenue around it. Kind of transitioning back to Google and what they're doing with the cloud effort, I think that their approach is actually, it's intriguing. You know, Diane is a world class executive in this way and, you know, I think brought in the last big transition that we've seen through the work she did with virtualization. And I wouldn't bet against her here. I think the things that those guys are doing is offering a pretty compelling set of higher level services now that are getting traction with things like BigQuery. I think TensorFlow is obviously very interesting. And then what they now announced recently with Spanner as a service. These are all technologies that Google understands and mastered and are very compelling technologies that I think the average developer will want. And they are highly differentiated from the services that are available from the Amazon's and Microsofts' of the world. >> Yeah, Spanner certainly got that horizontally-scalable mojo going on. They still got some work to do outside of MySQL and there on the relational database side, which we're watching. But they know that. I mean Google is clearly not saying they're, you know, fully-baked. They're actually candid in the analyst meeting. They were very candid on the security side and very candid on some of these things that they know they've got to do. But they are peddling as fast as they can. So I got to ask you the venture capital question. Developers are out there. Because there was a line, literally a blockbuster as they called it. People around the block to get in. Google IO had similar attraction. Those events are awesome. Google runs great events. They have, I would call them the technology store. People love to go in there and see what they have. But as an entrepreneur coming in, I'm going to build on a stack, whether it's Amazon or Google or somewhere else, you got to worry about the viability when you have the big gorillas out there. You got Amazon, now Google. What's the formula for and what do you worry about as an investor because the things you must think about is okay, what's the approach, where's the viability, is there a marketplace, is there monetization, can they get traction, can they go beyond the first three million in sales, because SaaS you can get there pretty quickly, as it's been discussed. What are the fears that you worry about and what advice would you give entrepreneurs as they start to start really innovating and saying hey I'm going to take the democratization of AI and I'm going to do some damage. I want to enter a market. These are considerations that you got to think about and you, as an investor, where's the risk? And what's the opportunity? >> Oh man, well there are lots of risks starting a company. We could talk for an hour about the challenges associated with being an entrepreneur. It's probably the hardest job you can imagine having. You know I think that the first and foremost is you got to build products that people love. And you got to solve a real problem. And so, I think for us as investors, we look for that. It's different now in enterprise investing in infrastructure than before where there used to be 10, 20 million dollar efforts required to build the technology and then you take it to the enterprise. And you would hope that it would sell. Now, with a couple million dollars, you have the ability to go out and write some compelling software, release it in the open source and see whether or not it gets traction. And then, really the challenge is figuring out whether you can monetize that or not, right. And in today's model, that's really where we struggle. It's ultimately in how you ultimately package this and sell it. I think that the primary models that we're seeing are either some form of upsell on open source, so either service support, open core, or an enterprise grade application built on top of the open source. The other alternative is to deliver it as a service. And we see lots of folks that are taking that open source and saying we're going to run this as a service. We have a company, a platform of mine, that does that for cribinetties, but there are companies like Data Bricks that are doing that for Spark and the whole data pipeline. And that is potentially a very compelling model too. >> Do you have a formula or an algorithm for investment? I remember talking to Jeremy Lu way back in the day and I just saw him in an interview on Snapchat, was an investor and he actually jumped into the stats with Evan Spiegel and saw the traction cause he was skeptical. A lot of people had passed on it, but you know that story. Is there an algom that you look for besides the team and being an exceptional team of people, you know technical chops and product chops. Is there a way that you look at to identify traction in this marketplace because it could be, there's a lot of turbulence, mircoservices, you got Kubernetes, another Google innovation that's kind of becoming a glue layer if you will across services. Is there a way to say oh that's got traction, I like that? Or here's some benchmarks that I look for for hurdles in ventures. >> Yeah, within this infrastructure space primarily around models that are going to be delivered as open source, there's a couple things that we can look at. We'll track GitHub stars and so we'll get a sense from that how the community views this. Whether this is something that they are particularly interested in and the level of traction they're getting within that community. It's almost like that is almost like a stamp of approval from the technology community that says this is a really cool project, right? And then, beyond that you start to look at download volumes. And to understand just how widespread the adoption of this technology is. Those are imperfect metrics, you know. And so, a lot of times it comes back to >> Market forces or whatever. >> Switching gears and looking at the customers and asking them the kinds of problems they are experiencing and whether or not these technologies have a chance to actually address real long standing challenges that they've had in either building or deploying or running applications. And so, it's different than consumer. Yeah, consumer is a little bit easier to measure. And you have a lot of data. Consumer has it's own challenges and it's very difficult to kind of predict a priority or what's going to be successful. But the good news for us is that with high-quality teams, these guys typically know where to focus and where to spend time and ultimately will be able to create it. >> And customer traction is always a great one to look at. I mean sell the data points. Scott Raney, what's new with Redpoint Ventures? Give a quick plug for what you guys are doing, what you're investing in, size of the fund, how much dry powder you have as they say. Are you still writing checks? What kind of checks? >> We are in business and we're looking for great entrepreneurs. So we have two funds. One is a 400 million dollar early stage fund that focuses primarily on Series A and an occasional Series B. And then we have a 400 million dollar early growth fund that is really more an occasional Series B and Series C. You know our attitude to the entrepreneurs is they should be indifferent to which fund they're in. We treat every investment the same. Really, we just want to be a part of great companies and get a chance to work with great entrepreneurs. >> And you guys also sponsored the party last night with the CNCF After Cloud Native Compute Foundation. >> Yeah. >> How'd that go? What were some of the conversations in the hall way there? Or in the hall way, in the event, it was a social event, but you know great community, the CNCF After Development. A couple new projects emerging. >> They've done some great work. And the projects that are coming in represent a lot of the foundation work that's going to be required to build cloud native applications. The first thing we did at this event last night is try to find what cloud native actually is. (laughs) And I think everybody has a different definition for that. >> What's the most common one? Is there a trend pattern in there? >> Yeah, I think people were saying these are applications that are built, traditionally built, using containers. They're built leveraging microservices. And they are built with the assumption that the underlying infrastructure is going to be ephemeral in some way. So you know built... >> And you have a pony in that game with Azicorp so update on those guys? >> It's a company that is doing extremely well and solving a broad set of problems around helping developers build and run applications on top of the cloud and I think what were setting there and we're seeing kind of across the board is a general desire to start to think about multi-cloud. To start to understand what it takes to actually deploy applications and run applications across multiple clouds. And also to be more agnostic about what they underlying substrate looks like. And those are trends that bode well for Google and Microsoft. >> Yeah, we're excited, we're going to be watching. Scott, thanks for coming on. We're going to be watching that. Kubernetes, that orchestration layer that's going on around microservices that's a hot I'd say battleground around innovation, a lot of good things happening there. Great opportunities when there's a lot of turbulence. Great opportunities to invest. Good luck with your investments. Scott Raney, partner at Redpoint Ventures. Very active in the community. A great VC, check him out. It's the Cube two days of live coverage all day. Going to 4:30, 5:00 pm today. And then tomorrow, Thursday. And then we're off to South by Southwest again. More coverage, we wrap with more coverage after the short break.