>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> This past week we saw two of the Big 3 cloud providers present the latest update on their respective cloud visions, their business progress, their announcements and innovations. The content at these events had many overlapping themes, including modern cloud infrastructure at global scale, applying advanced machine intelligence, AKA AI, end-to-end data platforms, collaboration software. They talked a lot about the future of work automation. And they gave us a little taste, each company of the Metaverse Web 3.0 and much more. Despite these striking similarities, the differences between these two cloud platforms and that of AWS remains significant. With Microsoft leveraging its massive application software footprint to dominate virtually all markets and Google doing everything in its power to keep up with the frenetic pace of today's cloud innovation, which was set into motion a decade and a half ago by AWS. Hello and welcome to this week's Wikibon CUBE Insights, powered by ETR. In this Breaking Analysis, we unpack the immense amount of content presented by the CEOs of Microsoft and Google Cloud at Microsoft Ignite and Google Cloud Next. We'll also quantify with ETR survey data the relative position of these two cloud giants in four key sectors: cloud IaaS, BI analytics, data platforms and collaboration software. Now one thing was clear this past week, hybrid events are the thing. Google Cloud Next took place live over a 24-hour period in six cities around the world, with the main gathering in New York City. Microsoft Ignite, which normally is attended by 30,000 people, had a smaller event in Seattle, in person with a virtual audience around the world. AWS re:Invent, of course, is much different. Yes, there's a virtual component at re:Invent, but it's all about a big live audience gathering the week after Thanksgiving, in the first week of December in Las Vegas. Regardless, Satya Nadella keynote address was prerecorded. It was highly produced and substantive. It was visionary, energetic with a strong message that Azure was a platform to allow customers to build their digital businesses. Doing more with less, which was a key theme of his. Nadella covered a lot of ground, starting with infrastructure from the compute, highlighting a collaboration with Arm-based, Ampere processors. New block storage, 60 regions, 175,000 miles of fiber cables around the world. He presented a meaningful multi-cloud message with Azure Arc to support on-prem and edge workloads, as well as of course the public cloud. And talked about confidential computing at the infrastructure level, a theme we hear from all cloud vendors. He then went deeper into the end-to-end data platform that Microsoft is building from the core data stores to analytics, to governance and the myriad tooling Microsoft offers. AI was next with a big focus on automation, AI, training models. He showed demos of machines coding and fixing code and machines automatically creating designs for creative workers and how Power Automate, Microsoft's RPA tooling, would combine with Microsoft Syntex to understand documents and provide standard ways for organizations to communicate with those documents. There was of course a big focus on Azure as developer cloud platform with GitHub Copilot as a linchpin using AI to assist coders in low-code and no-code innovations that are coming down the pipe. And another giant theme was a workforce transformation and how Microsoft is using its heritage and collaboration and productivity software to move beyond what Nadella called productivity paranoia, i.e., are remote workers doing their jobs? In a world where collaboration is built into intelligent workflows, and he even showed a glimpse of the future with AI-powered avatars and partnerships with Meta and Cisco with Teams of all firms. And finally, security with a bevy of tools from identity, endpoint, governance, et cetera, stressing a suite of tools from a single provider, i.e., Microsoft. So a couple points here. One, Microsoft is following in the footsteps of AWS with silicon advancements and didn't really emphasize that trend much except for the Ampere announcement. But it's building out cloud infrastructure at a massive scale, there is no debate about that. Its plan on data is to try and provide a somewhat more abstracted and simplified solutions, which differs a little bit from AWS's approach of the right database tool, for example, for the right job. Microsoft's automation play appears to provide simple individual productivity tools, kind of a ground up approach and make it really easy for users to drive these bottoms up initiatives. We heard from UiPath that forward five last month, a little bit of a different approach of horizontal automation, end-to-end across platforms. So quite a different play there. Microsoft's angle on workforce transformation is visionary and will continue to solidify in our view its dominant position with Teams and Microsoft 365, and it will drive cloud infrastructure consumption by default. On security as well as a cloud player, it has to have world-class security, and Azure does. There's not a lot of debate about that, but the knock on Microsoft is Patch Tuesday becomes Hack Wednesday because Microsoft releases so many patches, it's got so much Swiss cheese in its legacy estate and patching frequently, it becomes a roadmap and a trigger for hackers. Hey, patch Tuesday, these are all the exploits that you can go after so you can act before the patches are implemented. And so it's really become a problem for users. As well Microsoft is competing with many of the best-of-breed platforms like CrowdStrike and Okta, which have market momentum and appear to be more attractive horizontal plays for customers outside of just the Microsoft cloud. But again, it's Microsoft. They make it easy and very inexpensive to adopt. Now, despite the outstanding presentation by Satya Nadella, there are a couple of statements that should raise eyebrows. Here are two of them. First, as he said, Azure is the only cloud that supports all organizations and all workloads from enterprises to startups, to highly regulated industries. I had a conversation with Sarbjeet Johal about this, to make sure I wasn't just missing something and we were both surprised, somewhat, by this claim. I mean most certainly AWS supports more certifications for example, and we would think it has a reasonable case to dispute that claim. And the other statement, Nadella made, Azure is the only cloud provider enabling highly regulated industries to bring their most sensitive applications to the cloud. Now, reasonable people can debate whether AWS is there yet, but very clearly Oracle and IBM would have something to say about that statement. Now maybe it's not just, would say, "Oh, they're not real clouds, you know, they're just going to hosting in the cloud if you will." But still, when it comes to mission-critical applications, you would think Oracle is really the the leader there. Oh, and Satya also mentioned the claim that the Edge browser, the Microsoft Edge browser, no questions asked, he said, is the best browser for business. And we could see some people having some questions about that. Like isn't Edge based on Chrome? Anyway, so we just had to question these statements and challenge Microsoft to defend them because to us it's a little bit of BS and makes one wonder what else in such as awesome keynote and it was awesome, it was hyperbole. Okay, moving on to Google Cloud Next. The keynote started with Sundar Pichai doing a virtual session, he was remote, stressing the importance of Google Cloud. He mentioned that Google Cloud from its Q2 earnings was on a $25-billion annual run rate. What he didn't mention is that it's also on a 3.6 billion annual operating loss run rate based on its first half performance. Just saying. And we'll dig into that issue a little bit more later in this episode. He also stressed that the investments that Google has made to support its core business and search, like its global network of 22 subsea cables to support things like, YouTube video, great performance obviously that we all rely on, those innovations there. Innovations in BigQuery to support its search business and its threat analysis that it's always had and its AI, it's always been an AI-first company, he's stressed, that they're all leveraged by the Google Cloud Platform, GCP. This is all true by the way. Google has absolutely awesome tech and the talk, as well as his talk, Pichai, but also Kurian's was forward thinking and laid out a vision of the future. But it didn't address in our view, and I talked to Sarbjeet Johal about this as well, today's challenges to the degree that Microsoft did and we expect AWS will at re:Invent this year, it was more out there, more forward thinking, what's possible in the future, somewhat less about today's problem, so I think it's resonates less with today's enterprise players. Thomas Kurian then took over from Sundar Pichai and did a really good job of highlighting customers, and I think he has to, right? He has to say, "Look, we are in this game. We have customers, 9 out of the top 10 media firms use Google Cloud. 8 out of the top 10 manufacturers. 9 out of the top 10 retailers. Same for telecom, same for healthcare. 8 out of the top 10 retail banks." He and Sundar specifically referenced a number of companies, customers, including Avery Dennison, Groupe Renault, H&M, John Hopkins, Prudential, Minna Bank out of Japan, ANZ bank and many, many others during the session. So you know, they had some proof points and you got to give 'em props for that. Now like Microsoft, Google talked about infrastructure, they referenced training processors and regions and compute optionality and storage and how new workloads were emerging, particularly data-driven workloads in AI that required new infrastructure. He explicitly highlighted partnerships within Nvidia and Intel. I didn't see anything on Arm, which somewhat surprised me 'cause I believe Google's working on that or at least has come following in AWS's suit if you will, but maybe that's why they're not mentioning it or maybe I got to do more research there, but let's park that for a minute. But again, as we've extensively discussed in Breaking Analysis in our view when it comes to compute, AWS via its Annapurna acquisition is well ahead of the pack in this area. Arm is making its way into the enterprise, but all three companies are heavily investing in infrastructure, which is great news for customers and the ecosystem. We'll come back to that. Data and AI go hand in hand, and there was no shortage of data talk. Google didn't mention Snowflake or Databricks specifically, but it did mention, by the way, it mentioned Mongo a couple of times, but it did mention Google's, quote, Open Data cloud. Now maybe Google has used that term before, but Snowflake has been marketing the data cloud concept for a couple of years now. So that struck as a shot across the bow to one of its partners and obviously competitor, Snowflake. At BigQuery is a main centerpiece of Google's data strategy. Kurian talked about how they can take any data from any source in any format from any cloud provider with BigQuery Omni and aggregate and understand it. And with the support of Apache Iceberg and Delta and Hudi coming in the future and its open Data Cloud Alliance, they talked a lot about that. So without specifically mentioning Snowflake or Databricks, Kurian co-opted a lot of messaging from these two players, such as life and tech. Kurian also talked about Google Workspace and how it's now at 8 million users up from 6 million just two years ago. There's a lot of discussion on developer optionality and several details on tools supported and the open mantra of Google. And finally on security, Google brought out Kevin Mandian, he's a CUBE alum, extremely impressive individual who's CEO of Mandiant, a leading security service provider and consultancy that Google recently acquired for around 5.3 billion. They talked about moving from a shared responsibility model to a shared fate model, which is again, it's kind of a shot across AWS's bow, kind of shared responsibility model. It's unclear that Google will pay the same penalty if a customer doesn't live up to its portion of the shared responsibility, but we can probably assume that the customer is still going to bear the brunt of the pain, nonetheless. Mandiant is really interesting because it's a services play and Google has stated that it is not a services company, it's going to give partners in the channel plenty of room to play. So we'll see what it does with Mandiant. But Mandiant is a very strong enterprise capability and in the single most important area security. So interesting acquisition by Google. Now as well, unlike Microsoft, Google is not competing with security leaders like Okta and CrowdStrike. Rather, it's partnering aggressively with those firms and prominently putting them forth. All right. Let's get into the ETR survey data and see how Microsoft and Google are positioned in four key markets that we've mentioned before, IaaS, BI analytics, database data platforms and collaboration software. First, let's look at the IaaS cloud. ETR is just about to release its October survey, so I cannot share the that data yet. I can only show July data, but we're going to give you some directional hints throughout this conversation. This chart shows net score or spending momentum on the vertical axis and overlap or presence in the data, i.e., how pervasive the platform is. That's on the horizontal axis. And we've inserted the Wikibon estimates of IaaS revenue for the companies, the Big 3. Actually the Big 4, we included Alibaba. So a couple of points in this somewhat busy data chart. First, Microsoft and AWS as always are dominant on both axes. The red dotted line there at 40% on the vertical axis. That represents a highly elevated spending velocity and all of the Big 3 are above the line. Now at the same time, GCP is well behind the two leaders on the horizontal axis and you can see that in the table insert as well in our revenue estimates. Now why is Azure bigger in the ETR survey when AWS is larger according to the Wikibon revenue estimates? And the answer is because Microsoft with products like 365 and Teams will often be considered by respondents in the survey as cloud by customers, so they fit into that ETR category. But in the insert data we're stripping out applications and SaaS from Microsoft and Google and we're only isolating on IaaS. The other point is when you take a look at the early October returns, you see downward pressure as signified by those dotted arrows on every name. The only exception was Dell, or Dell and IBM, which showing slightly improved momentum. So the survey data generally confirms what we know that AWS and Azure have a massive lead and strong momentum in the marketplace. But the real story is below the line. Unlike Google Cloud, which is on pace to lose well over 3 billion on an operating basis this year, AWS's operating profit is around $20 billion annually. Microsoft's Intelligent Cloud generated more than $30 billion in operating income last fiscal year. Let that sink in for a moment. Now again, that's not to say Google doesn't have traction, it does and Kurian gave some nice proof points and customer examples in his keynote presentation, but the data underscores the lead that Microsoft and AWS have on Google in cloud. And here's a breakdown of ETR's proprietary net score methodology, that vertical axis that we showed you in the previous chart. It asks customers, are you adopting the platform new? That's that lime green. Are you spending 6% or more? That's the forest green. Is you're spending flat? That's the gray. Is you're spending down 6% or worse? That's the pinkest color. Or are you replacing the platform, defecting? That's the bright red. You subtract the reds from the greens and you get a net score. Now one caveat here, which actually is really favorable from Microsoft, the Microsoft data that we're showing here is across the entire Microsoft portfolio. The other point is, this is July data, we'll have an update for you once ETR releases its October results. But we're talking about meaningful samples here, the ends. 620 for AWS over a thousand from Microsoft in more than 450 respondents in the survey for Google. So the real tell is replacements, that bright red. There is virtually no churn for AWS and Microsoft, but Google's churn is 5x, those two in the survey. Now 5% churn is not high, but you'd like to see three things for Google given it's smaller size. One is less churn, two is much, much higher adoption rates in the lime green. Three is a higher percentage of those spending more, the forest green. And four is a lower percentage of those spending less. And none of these conditions really applies here for Google. GCP is still not growing fast enough in our opinion, and doesn't have nearly the traction of the two leaders and that shows up in the survey data. All right, let's look at the next sector, BI analytics. Here we have that same XY dimension. Again, Microsoft dominating the picture. AWS very strong also in both axes. Tableau, very popular and respectable of course acquired by Salesforce on the vertical axis, still looking pretty good there. And again on the horizontal axis, big presence there for Tableau. And Google with Looker and its other platforms is also respectable, but it again, has some work to do. Now notice Streamlit, that's a recent Snowflake acquisition. It's strong in the vertical axis and because of Snowflake's go-to-market (indistinct), it's likely going to move to the right overtime. Grafana is also prominent in the Y axis, but a glimpse at the most recent survey data shows them slightly declining while Looker actually improves a bit. As does Cloudera, which we'll move up slightly. Again, Microsoft just blows you away, doesn't it? All right, now let's get into database and data platform. Same X Y dimensions, but now database and data warehouse. Snowflake as usual takes the top spot on the vertical axis and it is actually keeps moving to the right as well with again, Microsoft and AWS is dominant in the market, as is Oracle on the X axis, albeit it's got less spending velocity, but of course it's the database king. Google is well behind on the X axis but solidly above the 40% line on the vertical axis. Note that virtually all platforms will see pressure in the next survey due to the macro environment. Microsoft might even dip below the 40% line for the first time in a while. Lastly, let's look at the collaboration and productivity software market. This is such an important area for both Microsoft and Google. And just look at Microsoft with 365 and Teams up into the right. I mean just so impressive in ubiquitous. And we've highlighted Google. It's in the pack. It certainly is a nice base with 174 N, which I can tell you that N will rise in the next survey, which is an indication that more people are adopting. But given the investment and the tech behind it and all the AI and Google's resources, you'd really like to see Google in this space above the 40% line, given the importance of this market, of this collaboration area to Google's success and the degree to which they emphasize it in their pitch. And look, this brings up something that we've talked about before on Breaking Analysis. Google doesn't have a tech problem. This is a go-to-market and marketing challenge that Google faces and it's up against two go-to-market champs and Microsoft and AWS. And Google doesn't have the enterprise sales culture. It's trying, it's making progress, but it's like that racehorse that has all the potential in the world, but it's just missing some kind of key ingredient to put it over at the top. It's always coming in third, (chuckles) but we're watching and Google's obviously, making some investments as we shared with earlier. All right. Some final thoughts on what we learned this week and in this research: customers and partners should be thrilled that both Microsoft and Google along with AWS are spending so much money on innovation and building out global platforms. This is a gift to the industry and we should be thankful frankly because it's good for business, it's good for competitiveness and future innovation as a platform that can be built upon. Now we didn't talk much about multi-cloud, we haven't even mentioned supercloud, but both Microsoft and Google have a story that resonates with customers in cross cloud capabilities, unlike AWS at this time. But we never say never when it comes to AWS. They sometimes and oftentimes surprise you. One of the other things that Sarbjeet Johal and John Furrier and I have discussed is that each of the Big 3 is positioning to their respective strengths. AWS is the best IaaS. Microsoft is building out the kind of, quote, we-make-it-easy-for-you cloud, and Google is trying to be the open data cloud with its open-source chops and excellent tech. And that puts added pressure on Snowflake, doesn't it? You know, Thomas Kurian made some comments according to CRN, something to the effect that, we are the only company that can do the data cloud thing across clouds, which again, if I'm being honest is not really accurate. Now I haven't clarified these statements with Google and often things get misquoted, but there's little question that, as AWS has done in the past with Redshift, Google is taking a page out of Snowflake, Databricks as well. A big difference in the Big 3 is that AWS doesn't have this big emphasis on the up-the-stack collaboration software that both Microsoft and Google have, and that for Microsoft and Google will drive captive IaaS consumption. AWS obviously does some of that in database, a lot of that in database, but ISVs that compete with Microsoft and Google should have a greater affinity, one would think, to AWS for competitive reasons. and the same thing could be said in security, we would think because, as I mentioned before, Microsoft competes very directly with CrowdStrike and Okta and others. One of the big thing that Sarbjeet mentioned that I want to call out here, I'd love to have your opinion. AWS specifically, but also Microsoft with Azure have successfully created what Sarbjeet calls brand distance. AWS from the Amazon Retail, and even though AWS all the time talks about Amazon X and Amazon Y is in their product portfolio, but you don't really consider it part of the retail organization 'cause it's not. Azure, same thing, has created its own identity. And it seems that Google still struggles to do that. It's still very highly linked to the sort of core of Google. Now, maybe that's by design, but for enterprise customers, there's still some potential confusion with Google, what's its intentions? How long will they continue to lose money and invest? Are they going to pull the plug like they do on so many other tools? So you know, maybe some rethinking of the marketing there and the positioning. Now we didn't talk much about ecosystem, but it's vital for any cloud player, and Google again has some work to do relative to the leaders. Which brings us to supercloud. The ecosystem and end customers are now in a position this decade to digitally transform. And we're talking here about building out their own clouds, not by putting in and building data centers and installing racks of servers and storage devices, no. Rather to build value on top of the hyperscaler gift that has been presented. And that is a mega trend that we're watching closely in theCUBE community. While there's debate about the supercloud name and so forth, there little question in our minds that the next decade of cloud will not be like the last. All right, we're going to leave it there today. Many thanks to Sarbjeet Johal, and my business partner, John Furrier, for their input to today's episode. Thanks to Alex Myerson who's on production and manages the podcast and Ken Schiffman as well. Kristen Martin and Cheryl Knight helped get the word out on social media and in our newsletters. And Rob Hof is our editor in chief over at SiliconANGLE, who does some wonderful editing. And check out SiliconANGLE, a lot of coverage on Google Cloud Next and Microsoft Ignite. Remember, all these episodes are available as podcast wherever you listen. Just search Breaking Analysis podcast. I publish each week on wikibon.com and siliconangle.com. And you can always get in touch with me via email, david.vellante@siliconangle.com or you can DM me at dvellante or comment on my LinkedIn posts. And please do check out etr.ai, the best survey data in the enterprise tech business. This is Dave Vellante for the CUBE Insights, powered by ETR. Thanks for watching and we'll see you next time on Breaking Analysis. (gentle music)

(bright music) >> "Supermetafragilisticexpialadotious." What's in a name? In an homage to the inimitable Charles Fitzgerald, we've chosen this title for today's session because of all the buzz surrounding "supercloud," a term that we introduced last year to signify a major architectural trend and shift that's occurring in the technology industry. Since that time, we've published numerous videos and articles on the topic, and on August 9th, kicked off "Supercloud22," an open industry event designed to advance the supercloud conversation, gathering input from more than 30 experienced technologists and business leaders in "The Cube" and broader technology community. We're talking about individuals like Benoit Dageville, Kit Colbert, Ali Ghodsi, Mohit Aron, David McJannet, and dozens of other experts. And today, we're pleased to welcome David Linthicum, who's a Chief Strategy Officer of Cloud Services at Deloitte Consulting. David is a technology visionary, a technical CTO. He's an author and a frequently sought after keynote speaker at high profile conferences like "VMware Explore" next week. David Linthicum, welcome back to "The Cube." Good to see you again. >> Oh, it's great to be here. Thanks for the invitation. Thanks for having me. >> Yeah, you're very welcome. Okay, so this topic of supercloud, what you call metacloud, has created a lot of interest. VMware calls it cross-cloud services, Snowflake calls it their data cloud, there's a lot of different names, but recently, you published a piece in "InfoWorld" where you said the following. "I really don't care what we call it, "and I really don't care if I put "my own buzzword into the mix. "However, this does not change the fact "that metacloud is perhaps the most important "architectural evolution occurring right now, "and we need to get this right out of the gate. "If we do that, who cares what it's named?" So very cool. And you also mentioned in a recent article that you don't like to put out new terms out in the wild without defining them. So what is a metacloud, or what we call supercloud? What's your definition? >> Yeah, and again, I don't care what people call it. The reality is it's the ability to have a layer of cross-cloud services. It sits above existing public cloud providers. So the idea here is that instead of building different security systems, different governance systems, different operational systems in each specific cloud provider, using whatever native features they provide, we're trying to do that in a cross-cloud way. So in other words, we're pushing out data integration, security, all these other things that we have to take care of as part of deploying a particular cloud provider. And in a multicloud scenario, we're building those in and between the clouds. And so we've been tracking this for about five years. We understood that multicloud is not necessarily about the particular public cloud providers, it's about things that you build in and between the clouds. >> Got it, okay. So I want to come back to that, to the definition, but I want to tie us to the so-called multicloud. You guys did a survey recently. We've said that multicloud was mostly a symptom of multi-vendor, Shadow Cloud, M&A, and only recently has become a strategic imperative. Now, Deloitte published a survey recently entitled "Closing the Cloud Strategy, Technology, Innovation Gap," and I'd like to explore that a little bit. And so in that survey, you showed data. What I liked about it is you went beyond what we all know, right? The old, "Our research shows that on average, "X number of clouds are used at an individual company." I mean, you had that too, but you really went deeper. You identified why companies are using multiple clouds, and you developed different categories of practitioners across 500 survey respondents. But the reasons were very clear for "why multicloud," as this becomes more strategic. Service choice scale, negotiating leverage, improved business resiliency, minimizing lock-in, interoperability of data, et cetera. So my question to you, David, is what's the problem supercloud or metacloud solves, and what's different from multicloud? >> That's a great question. The reality is that if we're... Well, supercloud or metacloud, whatever, is really something that exists above a multicloud, but I kind of view them as the same thing. It's an architectural pattern. We can name it anything. But the reality is that if we're moving to these multicloud environments, we're doing so to leverage best of breed things. In other words, best of breed technology to provide the innovators within the company to take the business to the next level, and we determine that in the survey. And so if we're looking at what a multicloud provides, it's the ability to provide different choices of different services or piece parts that allows us to build anything that we need to do. And so what we found in the survey and what we found in just practice in dealing with our clients is that ultimately, the value of cloud computing is going to be the innovation aspects. In other words, the ability to take the company to the next level from being more innovative and more disruptive in the marketplace that they're in. And the only way to do that, instead of basically leveraging the services of a particular walled garden of a single public cloud provider, is to cast a wider net and get out and leverage all kinds of services to make these happen. So if you think about that, that's basically how multicloud has evolved. In other words, it wasn't planned. They didn't say, "We're going to go do a multicloud." It was different developers and innovators in the company that went off and leveraged these cloud services, sometimes with the consent of IT leadership, sometimes not. And now we have these multitudes of different services that we're leveraging. And so many of these enterprises are going from 1000 to, say, 3000 services under management. That creates a complexity problem. We have a problem of heterogeneity, different platforms, different tools, different services, different AI technology, database technology, things like that. So the metacloud, or the supercloud, or whatever you want to call it, is the ability to deal with that complexity on the complexity's terms. And so instead of building all these various things that we have to do individually in each of the cloud providers, we're trying to do so within a cross-cloud service layer. We're trying to create this layer of technology, which removes us from dealing with the complexity of the underlying multicloud services and makes it manageable. Because right now, I think we're getting to a point of complexity we just can't operate it at the budgetary limits that we are right now. We can't keep the number of skills around, the number of operators around, to keep these things going. We're going to have to get creative in terms of how we manage these things, how we manage a multicloud. And that's where the supercloud, metacloud, whatever they want to call it, comes that. >> Yeah, and as John Furrier likes to say, in IT, we tend to solve complexity with more complexity, and that's not what we're talking about here. We're talking about simplifying, and you talked about the abstraction layer, and then it sounds like I'm inferring more. There's value that's added on top of that. And then you also said the hyperscalers are in a walled garden. So I've been asked, why aren't the hyperscalers superclouds? And I've said, essentially, they want to put your data into their cloud and keep it there. Now, that doesn't mean they won't eventually get into that. We've seen examples a little bit, Outposts, Anthos, Azure Arc, but the hyperscalers really aren't building superclouds or metaclouds, at least today, are they? >> No, they're not. And I always have the predictions for every major cloud conference that this is the conference that the hyperscaler is going to figure out some sort of a multicloud across-cloud strategy. In other words, building services that are able to operate across clouds. That really has never happened. It has happened in dribs and drabs, and you just mentioned a few examples of that, but the ability to own the space, to understand that we're not going to be the center of the universe in how people are going to leverage it, is going to be multiple things, including legacy systems and other cloud providers, and even industry clouds that are emerging these days, and SaaS providers, and all these things. So we're going to assist you in dealing with complexity, and we're going to provide the core services of being there. That hasn't happened yet. And they may be worried about conflicting their market, and the messaging is a bit different, even actively pushing back on the concept of multicloud, but the reality is the market's going to take them there. So in other words, if enough of their customers are asking for this and asking that they take the lead in building these cross-cloud technologies, even if they're participating in the stack and not being the stack, it's too compelling of a market that it's not going to drag a lot of the existing public cloud providers there. >> Well, it's going to be interesting to see how that plays out, David, because I never say never when it comes to a company like AWS, and we've seen how fast they move. And at the same time, they don't want to be commoditized. There's the layer underneath all this infrastructure, and they got this ecosystem that's adding all this tremendous value. But I want to ask you, what are the essential elements of supercloud, coming back to the definition, if you will, and what's different about metacloud, as you call it, from plain old SaaS or PaaS? What are the key elements there? >> Well, the key elements would be holistic management of all of the IT infrastructure. So even though it's sitting above a multicloud, I view metacloud, supercloud as the ability to also manage your existing legacy systems, your existing security stack, your existing network operations, basically everything that exists under the purview of IT. If you think about it, we're moving our infrastructure into the clouds, and we're probably going to hit a saturation point of about 70%. And really, if the supercloud, metacloud, which is going to be expensive to build for most of the enterprises, it needs to support these things holistically. So it needs to have all the services, that is going to be shareable across the different providers, and also existing legacy systems, and also edge computing, and IoT, and all these very diverse systems that we're building there right now. So if complexity is a core challenge to operate these things at scale and the ability to secure these things at scale, we have to have commonality in terms of security architecture and technology, commonality in terms of our directory services, commonality in terms of network operations, commonality in term of cloud operations, commonality in terms of FinOps. All these things should exist in some holistic cross-cloud layer that sits above all this complexity. And you pointed out something very profound. In other words, that is going to mean that we're hiding a lot of the existing cloud providers in terms of their interfaces and dashboards and things like that that we're dealing with today, their APIs. But the reality is that if we're able to manage these things at scale, the public cloud providers are going to benefit greatly from that. They're going to sell more services because people are going to find they're able to leverage them easier. And so in other words, if we're removing the complexity wall, which many in the industry are calling it right now, then suddenly we're moving from, say, the 25 to 30% migrated in the cloud, which most enterprises are today, to 50, 60, 70%. And we're able to do this at scale, and we're doing it at scale because we're providing some architectural optimization through the supercloud, metacloud layer. >> Okay, thanks for that. David, I just want to tap your CTO brain for a minute. At "Supercloud22," we came up with these three deployment models. Kit Colbert put forth the idea that one model would be your control planes running in one cloud, let's say AWS, but it interacts with and can manage and deploy on other clouds, the Kubernetes Cluster Management System. The second one, Mohit Aron from Cohesity laid out, where you instantiate the stack on different clouds and different cloud regions, and then you create a layer, a common interface across those. And then Snowflake was the third deployment model where it's a single global instance, it's one instantiation, and basically building out their own cloud across these regions. Help us parse through that. Do those seem like reasonable deployment models to you? Do you have any thoughts on that? >> Yeah, I mean, that's a distributed computing trick we've been doing, which is, in essence, an agent of the supercloud that's carrying out some of the cloud native functions on that particular cloud, but is, in essence, a slave to the metacloud, or the supercloud, whatever, that's able to run across the various cloud providers. In other words, when it wants to access a service, it may not go directly to that service. It goes directly to the control plane, and that control plane is responsible... Very much like Kubernetes and Docker works, that control plane is responsible for reaching out and leveraging those native services. I think that that's thinking that's a step in the right direction. I think these things unto themselves, at least initially, are going to be a very complex array of technology. Even though we're trying to remove complexity, the supercloud unto itself, in terms of the ability to build this thing that's able to operate at scale across-cloud, is going to be a collection of many different technologies that are interfacing with the public cloud providers in different ways. And so we can start putting these meta architectures together, and I certainly have written and spoke about this for years, but initially, this is going to be something that may escape the detail or the holistic nature of these meta architectures that people are floating around right now. >> Yeah, so I want to stay on this, because anytime I get a CTO brain, I like to... I'm not an engineer, but I've been around a long time, so I know a lot of buzzwords and have absorbed a lot over the years, but so you take those, the second two models, the Mohit instantiate on each cloud and each cloud region versus the Snowflake approach. I asked Benoit Dageville, "Does that mean if I'm in "an AWS east region and I want to do a query on Azure West, "I can do that without moving data?" And he said, "Yes and no." And the answer was really, "No, we actually take a subset of that data," so there's the latency problem. From those deployment model standpoints, what are the trade-offs that you see in terms of instantiating the stack on each individual cloud versus that single instance? Is there a benefit of the single instance for governance and security and simplicity, but a trade-off on latency, or am I overthinking this? >> Yeah, you hit it on the nose. The reality is that the trade-off is going to be latency and performance. If we get wiggy with the distributed nature, like the distributed data example you just provided, we have to basically separate the queries and communicate with the databases on each instance, and then reassemble the result set that goes back to the people who are recording it. And so we can do caching systems and things like that. But the reality is, if it's distributed system, we're going to have latency and bandwidth issues that are going to be limiting us. And also security issues, because if we're removing lots of information over the open internet, or even private circuits, that those are going to be attack vectors that hackers can leverage. You have to keep that in mind. We're trying to reduce those attack vectors. So it would be, in many instances, and I think we have to think about this, that we're going to keep the data in the same physical region for just that. So in other words, it's going to provide the best performance and also the most simplistic access to dealing with security. And so we're not, in essence, thinking about where the data's going, how it's moving across things, things like that. So the challenge is going to be is when you're dealing with a supercloud or metacloud is, when do you make those decisions? And I think, in many instances, even though we're leveraging multiple databases across multiple regions and multiple public cloud providers, and that's the idea of it, we're still going to localize the data for performance reasons. I mean, I just wrote a blog in "InfoWorld" a couple of months ago and talked about, people who are trying to distribute data across different public cloud providers for different reasons, distribute an application development system, things like that, you can do it. With enough time and money, you can do anything. I think the challenge is going to be operating that thing, and also providing a viable business return based on the application. And so why it may look like a good science experiment, and it's cool unto itself as an architect, the reality is the more pragmatic approach is going to be a leavitt in a single region on a single cloud. >> Very interesting. The other reason I like to talk to companies like Deloitte and experienced people like you is 'cause I can get... You're agnostic, right? I mean, you're technology agnostic, vendor agnostic. So I want to come back with another question, which is, how do you deal with what I call the lowest common denominator problem? What I mean by that is if one cloud has, let's say, a superior service... Let's take an example of Nitro and Graviton. AWS seems to be ahead on that, but let's say some other cloud isn't quite quite there yet, and you're building a supercloud or a metacloud. How do you rationalize that? Does it have to be like a caravan in the army where you slow down so all the slowest trucks can keep up, or are the ways to adjudicate that that are advantageous to hide that deficiency? >> Yeah, and that's a great thing about leveraging a supercloud or a metacloud is we're putting that management in a single layer. So as far as a user or even a developer on those systems, they shouldn't worry about the performance that may come back, because we're dealing with the... You hit the nail on the head with that one. The slowest component is the one that dictates performance. And so we have to have some sort of a performance management layer. We're also making dynamic decisions to move data, to move processing, from one server to the other to try to minimize the amount of latency that's coming from a single component. So the great thing about that is we're putting that volatility into a single domain, and it's making architectural decisions in terms of where something will run and where it's getting its data from, things are stored, things like that, based on the performance feedback that's coming back from the various cloud services that are under management. And so if you're running across clouds, it becomes even more interesting, because ultimately, you're going to make some architectural choices on the fly in terms of where that stuff runs based on the active dynamic performance that that public cloud provider is providing. So in other words, we may find that it automatically shut down a database service, say MySQL, on one cloud instance, and moved it to a MySQL instance on another public cloud provider because there was some sort of a performance issue that it couldn't work around. And by the way, it does so dynamically. Away from you making that decision, it's making that decision on your behalf. Again, this is a matter of abstraction, removing complexity, and dealing with complexity through abstraction and automation, and this is... That would be an example of fixing something with automation, self-healing. >> When you meet with some of the public cloud providers and they talk about on-prem private cloud, the general narrative from the hyperscalers is, "Well, that's not a cloud." Should on-prem be inclusive of supercloud, metacloud? >> Absolutely, I mean, and they're selling private cloud instances with the edge cloud that they're selling. The reality is that we're going to have to keep a certain amount of our infrastructure, including private clouds, on premise. It's something that's shrinking as a market share, and it's going to be tougher and tougher to justify as the public cloud providers become better and better at what they do, but we certainly have edge clouds now, and hyperscalers have examples of that where they run a instance of their public cloud infrastructure on premise on physical hardware and software. And the reality is, too, we have data centers and we have systems that just won't go away for another 20 or 30 years. They're just too sticky. They're uneconomically viable to move into the cloud. That's the core thing. It's not that we can't do it. The fact of the matter is we shouldn't do it, because there's not going to be an economic... There's not going to be an economic incentive of making that happen. So if we're going to create this meta layer or this infrastructure which is going to run across clouds, and everybody agrees on, that's what the supercloud is, we have to include the on-premise systems, including private clouds, including legacy systems. And by the way, include the rising number of IoT systems that are out there, and edge-based systems out there. So we're managing it using the same infrastructure into cloud services. So they have metadata systems and they have specialized services, and service finance and retail and things like doing risk analytics. So it gets them further down that path, but not necessarily giving them a SaaS application where they're forced into all of the business processes. We're giving you piece parts. So we'll give you 1000 different parts that are related to the finance industry. You can assemble anything you need, but the thing is, it's not going to be like building it from scratch. We're going to give you risk analytics, we're giving you the financial analytics, all these things that you can leverage within your applications how you want to leverage them. We'll maintain them. So in other words, you don't have to maintain 'em just like a cloud service. And suddenly, we can build applications in a couple of weeks that used to take a couple of months, in some cases, a couple of years. So that seems to be a large take of it moving forward. So get it up in the supercloud. Those become just other services that are under managed... That are under management on the supercloud, the metacloud. So we're able to take those services, abstract them, assemble them, use them in different applications. And the ability to manage where those services are originated versus where they're consumed is going to be managed by the supercloud layer, which, you're dealing with the governance, the service governance, the security systems, the directory systems, identity access management, things like that. They're going to get you further along down the pike, and that comes back as real value. If I'm able to build something in two weeks that used to take me two months, and I'm able to give my creators in the organization the ability to move faster, that's a real advantage. And suddenly, we are going to be valued by our digital footprint, our ability to do things in a creative and innovative way. And so organizations are able to move that fast, leveraging cloud computing for what it should be leveraged, as a true force multiplier for the business. They're going to win the game. They're going to get the most value. They're going to be around in 20 years, the others won't. >> David Linthicum, always love talking. You have a dangerous combination of business and technology expertise. Let's tease. "VMware Explore" next week, you're giving a keynote, if they're going to be there. Which day are you? >> Tuesday. Tuesday, 11 o'clock. >> All right, that's a big day. Tuesday, 11 o'clock. And David, please do stop by "The Cube." We're in Moscone West. Love to get you on and continue this conversation. I got 100 more questions for you. Really appreciate your time. >> I always love talking to people at "The Cube." Thank you very much. >> All right, and thanks for watching our ongoing coverage of "Supercloud22" on "The Cube," your leader in enterprise tech and emerging tech coverage. (bright music)

>> From the theCUBE studios in Palo Alto in Boston, bringing you data driven insights from theCUBE and ETR. This is "Breaking Analysis" with Dave Vellante. >> Welcome to this week's Wikibon, theCUBE's insights powered by ETR. As we exited the isolation economy last year, supercloud is a term that we introduced to describe something new that was happening in the world of cloud. In this Breaking Analysis, we address the 10 most frequently asked questions we get around supercloud. Okay, let's review these frequently asked questions on supercloud that we're going to try to answer today. Look at an industry that's full of hype and buzzwords. Why the hell does anyone need a new term? Aren't hyperscalers building out superclouds? We'll try to answer why the term supercloud connotes something different from hyperscale clouds. And we'll talk about the problems that superclouds solve specifically. And we'll further define the critical aspects of a supercloud architecture. We often get asked, isn't this just multi-cloud? Well, we don't think so, and we'll explain why in this Breaking Analysis. Now in an earlier episode, we introduced the notion of super PaaS. Well, isn't a plain vanilla PaaS already a super PaaS? Again, we don't think so, and we'll explain why. Who will actually build and who are the players currently building superclouds? What workloads and services will run on superclouds? And 8-A or number nine, what are some examples that we can share of supercloud? And finally, we'll answer what you can expect next from us on supercloud? Okay, let's get started. Why do we need another buzzword? Well, late last year, ahead of re:Invent, we were inspired by a post from Jerry Chen called "Castles in the Cloud." Now in that blog post, he introduced the idea that there were sub-markets emerging in cloud that presented opportunities for investors and entrepreneurs that the cloud wasn't going to suck the hyperscalers. Weren't going to suck all the value out of the industry. And so we introduced this notion of supercloud to describe what we saw as a value layer emerging above the hyperscalers CAPEX gift, we sometimes call it. Now it turns out, that we weren't the only ones using the term as both Cornell and MIT have used the phrase in somewhat similar, but different contexts. The point is something new was happening in the AWS and other ecosystems. It was more than IaaS and PaaS, and wasn't just SaaS running in the cloud. It was a new architecture that integrates infrastructure, platform and software as services to solve new problems that the cloud vendors in our view, weren't addressing by themselves. It seemed to us that the ecosystem was pursuing opportunities across clouds that went beyond conventional implementations of multi-cloud. And we felt there was a structural change going on at the industry level, the supercloud, metaphorically was highlighting. So that's the background on why we felt a new catch phrase was warranted, love it or hate it. It's memorable and it's what we chose. Now to that last point about structural industry transformation. Andy Rappaport is sometimes and often credited with identifying the shift from the vertically integrated IBM mainframe era to the fragmented PC microprocesor-based era in his HBR article in 1991. In fact, it was David Moschella, who at the time was an IDC Analyst who first introduced the concept in 1987, four years before Rappaport's article was published. Moschella saw that it was clear that Intel, Microsoft, Seagate and others would replace the system vendors, and put that forth in a graphic that looked similar to the first two on this chart. We don't have to review the shift from IBM as the center of the industry to Wintel, that's well understood. What isn't as well known or accepted is what Moschella put out in his 2018 book called "Seeing Digital" which introduced the idea of "The Matrix" that's shown on the right hand side of this chart. Moschella posited that new services were emerging built on top of the internet and hyperscale clouds that would integrate other innovations and would define the next era of computing. He used the term Matrix because the conceptual depiction included not only horizontal technology rose like the cloud and the internet, but for the first time included connected industry verticals, the columns in this chart. Moschella pointed out that whereas historically, industry verticals had a closed value chain or stack and ecosystem of R&D, and production, and manufacturing, and distribution. And if you were in that industry, the expertise within that vertical generally stayed within that vertical and was critical to success. But because of digital and data, for the first time, companies were able to traverse industries, jump across industries and compete because data enabled them to do that. Examples, Amazon and content, payments, groceries, Apple, and payments, and content, and so forth. There are many examples. Data was now this unifying enabler and this marked a change in the structure of the technology landscape. And supercloud is meant to imply more than running in hyperscale clouds, rather it's the combination of multiple technologies enabled by CloudScale with new industry participants from those verticals, financial services and healthcare, manufacturing, energy, media, and virtually all in any industry. Kind of an extension of every company is a software company. Basically, every company now has the opportunity to build their own cloud or supercloud. And we'll come back to that. Let's first address what's different about superclouds relative to hyperscale clouds? You know, this one's pretty straightforward and obvious, I think. Hyperscale clouds, they're walled gardens where they want your data in their cloud and they want to keep you there. Sure, every cloud player realizes that not all data will go to their particular cloud so they're meeting customers where their data lives with initiatives like Amazon Outposts and Azure Arc, and Google Anthos. But at the end of the day, the more homogeneous they can make their environments, the better control, security, cost, and performance they can deliver. The more complex the environment, the more difficult it is to deliver on their brand promises. And of course, the lesser margin that's left for them to capture. Will the hyperscalers get more serious about cross-cloud services? Maybe, but they have plenty of work to do within their own clouds and within enabling their own ecosystems. They had a long way to go a lot of runway. So let's talk about specifically, what problems superclouds solve? We've all seen the stats from IDC or Gartner, or whomever the customers on average use more than one cloud. You know, two clouds, three clouds, five clouds, 20 clouds. And we know these clouds operate in disconnected silos for the most part. And that's a problem because each cloud requires different skills because the development environment is different as is the operating environment. They have different APIs, different primitives, and different management tools that are optimized for each respective hyperscale cloud. Their functions and value props don't extend to their competitors' clouds for the most part. Why would they? As a result, there's friction when moving between different clouds. It's hard to share data, it's hard to move work. It's hard to secure and govern data. It's hard to enforce organizational edicts and policies across these clouds, and on-prem. Supercloud is an architecture designed to create a single environment that enables management of workloads and data across clouds in an effort to take out complexity, accelerate application development, streamline operations and share data safely, irrespective of location. It's pretty straightforward, but non-trivial, which is why I always ask a company's CEO and executives if stock buybacks and dividends will yield as much return as building out superclouds that solve really specific and hard problems, and create differential value. Okay, let's dig a bit more into the architectural aspects of supercloud. In other words, what are the salient attributes of supercloud? So first and foremost, a supercloud runs a set of specific services designed to solve a unique problem and it can do so in more than one cloud. Superclouds leverage the underlying cloud native tooling of a hyperscale cloud, but they're optimized for a specific objective that aligns with the problem that they're trying to solve. For example, supercloud might be optimized for lowest cost or lowest latency, or sharing data, or governing, or securing that data, or higher performance for networking, for example. But the point is, the collection of services that is being delivered is focused on a unique value proposition that is not being delivered by the hyperscalers across clouds. A supercloud abstracts the underlying and siloed primitives of the native PaaS layer from the hyperscale cloud and then using its own specific platform as a service tooling, creates a common experience across clouds for developers and users. And it does so in a most efficient manner, meaning it has the metadata knowledge and management capabilities that can optimize for latency, bandwidth, or recovery, or data sovereignty, or whatever unique value that supercloud is delivering for the specific use case in their domain. And a supercloud comprises a super PaaS capability that allows ecosystem partners through APIs to add incremental value on top of the supercloud platform to fill gaps, accelerate features, and of course innovate. The services can be infrastructure-related, they could be application services, they could be data services, security services, user services, et cetera, designed and packaged to bring unique value to customers. Again, that hyperscalers are not delivering across clouds or on-premises. Okay, so another common question we get is, isn't that just multi-cloud? And what we'd say to that is yes, but no. You can call it multi-cloud 2.0, if you want, if you want to use it, it's kind of a commonly used rubric. But as Dell's Chuck Whitten proclaimed at Dell Technologies World this year, multi-cloud by design, is different than multi-cloud by default. Meaning to date, multi-cloud has largely been a symptom of what we've called multi-vendor or of M&A, you buy a company and they happen to use Google Cloud, and so you bring it in. And when you look at most so-called, multi-cloud implementations, you see things like an on-prem stack, which is wrapped in a container and hosted on a specific cloud or increasingly a technology vendor has done the work of building a cloud native version of their stack and running it on a specific cloud. But historically, it's been a unique experience within each cloud with virtually no connection between the cloud silos. Supercloud sets out to build incremental value across clouds and above hyperscale CAPEX that goes beyond cloud compatibility within each cloud. So if you want to call it multi-cloud 2.0, that's fine, but we chose to call it supercloud. Okay, so at this point you may be asking, well isn't PaaS already a version of supercloud? And again, we would say no, that supercloud and its corresponding superPaaS layer which is a prerequisite, gives the freedom to store, process and manage, and secure, and connect islands of data across a continuum with a common experience across clouds. And the services offered are specific to that supercloud and will vary by each offering. Your OpenShift, for example, can be used to construct a superPaaS, but in and of itself, isn't a superPaaS, it's generic. A superPaaS might be developed to support, for instance, ultra low latency database work. It would unlikely again, taking the OpenShift example, it's unlikely that off-the-shelf OpenShift would be used to develop such a low latency superPaaS layer for ultra low latency database work. The point is supercloud and its inherent superPaaS will be optimized to solve specific problems like that low latency example for distributed databases or fast backup and recovery for data protection, and ransomware, or data sharing, or data governance. Highly specific use cases that the supercloud is designed to solve for. Okay, another question we often get is who has a supercloud today and who's building a supercloud, and who are the contenders? Well, most companies that consider themselves cloud players will, we believe, be building or are building superclouds. Here's a common ETR graphic that we like to show with Net Score or spending momentum on the Y axis and overlap or pervasiveness in the ETR surveys on the X axis. And we've randomly chosen a number of players that we think are in the supercloud mix, and we've included the hyperscalers because they are enablers. Now remember, this is a spectrum of maturity it's a maturity model and we've added some of those industry players that we see building superclouds like CapitalOne, Goldman Sachs, Walmart. This is in deference to Moschella's observation around The Matrix and the industry structural changes that are going on. This goes back to every company, being a software company and rather than pattern match an outdated SaaS model, we see new industry structures emerging where software and data, and tools, specific to an industry will lead the next wave of innovation and bring in new value that traditional technology companies aren't going to solve, and the hyperscalers aren't going to solve. You know, we've talked a lot about Snowflake's data cloud as an example of supercloud. After being at Snowflake Summit, we're more convinced than ever that they're headed in this direction. VMware is clearly going after cross-cloud services you know, perhaps creating a new category. Basically, every large company we see either pursuing supercloud initiatives or thinking about it. Dell showed project Alpine at Dell Tech World, that's a supercloud. Snowflake introducing a new application development capability based on their superPaaS, our term of course, they don't use the phrase. Mongo, Couchbase, Nutanix, Pure Storage, Veeam, CrowdStrike, Okta, Zscaler. Yeah, all of those guys. Yes, Cisco and HPE. Even though on theCUBE at HPE Discover, Fidelma Russo said on theCUBE, she wasn't a fan of cloaking mechanisms, but then we talked to HPE's Head of Storage Services, Omer Asad is clearly headed in the direction that we would consider supercloud. Again, those cross-cloud services, of course, their emphasis is connecting as well on-prem. That single experience, which traditionally has not existed with multi-cloud or hybrid. And we're seeing the emergence of companies, smaller companies like Aviatrix and Starburst, and Clumio and others that are building versions of superclouds that solve for a specific problem for their customers. Even ISVs like Adobe, ADP, we've talked to UiPath. They seem to be looking at new ways to go beyond the SaaS model and add value within their cloud ecosystem specifically, around data as part of their and their customers digital transformations. So yeah, pretty much every tech vendor with any size or momentum and new industry players are coming out of hiding, and competing. Building superclouds that look a lot like Moschella's Matrix, with machine intelligence and blockchains, and virtual realities, and gaming, all enabled by the internet and hyperscale cloud CAPEX. So it's moving fast and it's the future in our opinion. So don't get too caught up in the past or you'll be left behind. Okay, what about examples? We've given a number in the past, but let's try to be a little bit more specific. Here are a few we've selected and we're going to answer the two questions in one section here. What workloads and services will run in superclouds and what are some examples? Let's start with analytics. Our favorite example is Snowflake, it's one of the furthest along with its data cloud, in our view. It's a supercloud optimized for data sharing and governance, query performance, and security, and ecosystem enablement. When you do things inside of that data cloud, what we call a super data cloud. Again, our term, not theirs. You can do things that you could not do in a single cloud. You can't do this with Redshift, You can't do this with SQL server and they're bringing new data types now with merging analytics or at least accommodate analytics and transaction type data, and bringing open source tooling with things like Apache Iceberg. And so it ticks the boxes we laid out earlier. I would say that a company like Databricks is also in that mix doing it, coming at it from a data science perspective, trying to create that consistent experience for data scientists and data engineering across clouds. Converge databases, running transaction and analytic workloads is another example. Take a look at what Couchbase is doing with Capella and how it's enabling stretching the cloud to the edge with ARM-based platforms and optimizing for low latency across clouds, and even out to the edge. Document database workloads, look at MongoDB, a very developer-friendly platform that with the Atlas is moving toward a supercloud model running document databases very, very efficiently. How about general purpose workloads? This is where VMware comes into to play. Very clearly, there's a need to create a common operating environment across clouds and on-prem, and out to the edge. And I say VMware is hard at work on that. Managing and moving workloads, and balancing workloads, and being able to recover very quickly across clouds for everyday applications. Network routing, take a look at what Aviatrix is doing across clouds, industry workloads. We see CapitalOne, it announced its cost optimization platform for Snowflake, piggybacking on Snowflake supercloud or super data cloud. And in our view, it's very clearly going to go after other markets is going to test it out with Snowflake, running, optimizing on AWS and it's going to expand to other clouds as Snowflake's business and those other clouds grows. Walmart working with Microsoft to create an on-premed Azure experience that's seamless. Yes, that counts, on-prem counts. If you can create that seamless and continuous experience, identical experience from on-prem to a hyperscale cloud, we would include that as a supercloud. You know, we've written about what Goldman is doing. Again, connecting its on-prem data and software tooling, and other capabilities to AWS for scale. And we can bet dollars to donuts that Oracle will be building a supercloud in healthcare with its Cerner acquisition. Supercloud is everywhere you look. So I'm sorry, naysayers it's happening all around us. So what's next? Well, with all the industry buzz and debate about the future, John Furrier and I, have decided to host an event in Palo Alto, we're motivated and inspired to further this conversation. And we welcome all points of view, positive, negative, multi-cloud, supercloud, hypercloud, all welcome. So theCUBE on Supercloud is coming on August 9th, out of our Palo Alto studios, we'll be running a live program on the topic. We've reached out to a number of industry participants, VMware, Snowflake, Confluent, Sky High Security, Gee Rittenhouse's new company, HashiCorp, CloudFlare. We've hit up Red Hat and we expect many of these folks will be in our studios on August 9th. And we've invited a number of industry participants as well that we're excited to have on. From industry, from financial services, from healthcare, from retail, we're inviting analysts, thought leaders, investors. We're going to have more detail in the coming weeks, but for now, if you're interested, please reach out to me or John with how you think you can advance the discussion and we'll see if we can fit you in. So mark your calendars, stay tuned for more information. Okay, that's it for today. Thanks to Alex Myerson who handles production and manages the podcast for Breaking Analysis. And I want to thank Kristen Martin and Cheryl Knight, they help get the word out on social and in our newsletters. And Rob Hof is our editor in chief over at SiliconANGLE, who does a lot of editing and appreciate you posting on SiliconANGLE, Rob. Thanks to all of you. Remember, all these episodes are available as podcasts wherever you listen. All you got to do is search Breaking Analysis podcast. It publish each week on wikibon.com and siliconangle.com. You can email me directly at david.vellante@siliconangle.com or DM me @DVellante, or comment on my LinkedIn post. And please do check out ETR.ai for the best survey data. And the enterprise tech business will be at AWS NYC Summit next Tuesday, July 12th. So if you're there, please do stop by and say hello to theCUBE, it's at the Javits Center. This is Dave Vellante for theCUBE insights powered by ETR. Thanks for watching. And we'll see you next time on "Breaking Analysis." (bright music)

>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR. This is "Breaking Analysis" with Dave Vallante. >> Welcome to this week's Wikibon CUBE Insights powered by ETR. As we exited the isolation economy last year, Supercloud is a term that we introduced to describe something new that was happening in the world of cloud. In this "Breaking Analysis," we address the 10 most frequently asked questions we get around Supercloud. Okay, let's review these frequently asked questions on Supercloud that we're going to try to answer today. Look at an industry that's full of hype and buzzwords. Why the hell does anyone need a new term? Aren't hyperscalers building out Superclouds? We'll try to answer why the term Supercloud connotes something different from hyperscale clouds. And we'll talk about the problems that Superclouds solve specifically, and we'll further define the critical aspects of a Supercloud architecture. We often get asked, "Isn't this just multi-cloud?" Well, we don't think so, and we'll explain why in this "Breaking Analysis." Now, in an earlier episode, we introduced the notion of super PaaS. Well, isn't a plain vanilla PaaS already a super PaaS? Again, we don't think so, and we'll explain why. Who will actually build and who are the players currently building Superclouds? What workloads and services will run on Superclouds? And eight A or number nine, what are some examples that we can share of Supercloud? And finally, we'll answer what you can expect next from us on Supercloud. Okay, let's get started. Why do we need another buzzword? Well, late last year ahead of re:Invent, we were inspired by a post from Jerry Chen called castles in the cloud. Now, in that blog post, he introduced the idea that there were submarkets emerging in cloud that presented opportunities for investors and entrepreneurs. That the cloud wasn't going to suck the hyperscalers, weren't going to suck all the value out of the industry. And so we introduced this notion of Supercloud to describe what we saw as a value layer emerging above the hyperscalers CAPEX gift, we sometimes call it. Now, it turns out that we weren't the only ones using the term, as both Cornell and MIT, have used the phrase in somewhat similar, but different contexts. The point is, something new was happening in the AWS and other ecosystems. It was more than IS and PaaS, and wasn't just SaaS running in the cloud. It was a new architecture that integrates infrastructure, platform and software as services, to solve new problems that the cloud vendors, in our view, weren't addressing by themselves. It seemed to us that the ecosystem was pursuing opportunities across clouds that went beyond conventional implementations of multi-cloud. And we felt there was a structural change going on at the industry level. The Supercloud metaphorically was highlighting. So that's the background on why we felt a new catch phrase was warranted. Love it or hate it, it's memorable and it's what we chose. Now, to that last point about structural industry transformation. Andy Rapaport is sometimes and often credited with identifying the shift from the vertically integrated IBM mainframe era to the fragmented PC microprocesor based era in his HBR article in 1991. In fact, it was David Moschella, who at the time was an IDC analyst who first introduced the concept in 1987, four years before Rapaport's article was published. Moschella saw that it was clear that Intel, Microsoft, Seagate and others would replace the system vendors and put that forth in a graphic that looked similar to the first two on this chart. We don't have to review the shift from IBM as the center of the industry to Wintel. That's well understood. What isn't as well known or accepted is what Moschella put out in his 2018 book called "Seeing Digital" which introduced the idea of the matrix that's shown on the right hand side of this chart. Moschella posited that new services were emerging, built on top of the internet and hyperscale clouds that would integrate other innovations and would define the next era of computing. He used the term matrix, because the conceptual depiction included, not only horizontal technology rows, like the cloud and the internet, but for the first time included connected industry verticals, the columns in this chart. Moschella pointed out that, whereas historically, industry verticals had a closed value chain or stack and ecosystem of R&D and production and manufacturing and distribution. And if you were in that industry, the expertise within that vertical generally stayed within that vertical and was critical to success. But because of digital and data, for the first time, companies were able to traverse industries jump across industries and compete because data enabled them to do that. Examples, Amazon and content, payments, groceries, Apple and payments, and content and so forth. There are many examples. Data was now this unifying enabler and this marked a change in the structure of the technology landscape. And Supercloud is meant to imply more than running in hyperscale clouds. Rather, it's the combination of multiple technologies, enabled by cloud scale with new industry participants from those verticals; financial services, and healthcare, and manufacturing, energy, media, and virtually all and any industry. Kind of an extension of every company is a software company. Basically, every company now has the opportunity to build their own cloud or Supercloud. And we'll come back to that. Let's first address what's different about Superclouds relative to hyperscale clouds. Now, this one's pretty straightforward and obvious, I think. Hyperscale clouds, they're walled gardens where they want your data in their cloud and they want to keep you there. Sure, every cloud player realizes that not all data will go to their particular cloud. So they're meeting customers where their data lives with initiatives like Amazon Outposts and Azure Arc and Google Antos. But at the end of the day, the more homogeneous they can make their environments, the better control, security, costs, and performance they can deliver. The more complex the environment, the more difficult it is to deliver on their brand promises. And, of course, the less margin that's left for them to capture. Will the hyperscalers get more serious about cross cloud services? Maybe, but they have plenty of work to do within their own clouds and within enabling their own ecosystems. They have a long way to go, a lot of runway. So let's talk about specifically, what problems Superclouds solve. We've all seen the stats from IDC or Gartner or whomever, that customers on average use more than one cloud, two clouds, three clouds, five clouds, 20 clouds. And we know these clouds operate in disconnected silos for the most part. And that's a problem, because each cloud requires different skills, because the development environment is different as is the operating environment. They have different APIs, different primitives, and different management tools that are optimized for each respective hyperscale cloud. Their functions and value props don't extend to their competitors' clouds for the most part. Why would they? As a result, there's friction when moving between different clouds. It's hard to share data. It's hard to move work. It's hard to secure and govern data. It's hard to enforce organizational edicts and policies across these clouds and on-prem. Supercloud is an architecture designed to create a single environment that enables management of workloads and data across clouds in an effort to take out complexity, accelerate application development, streamline operations, and share data safely, irrespective of location. It's pretty straightforward, but non-trivial, which is why I always ask a company's CEO and executives if stock buybacks and dividends will yield as much return as building out Superclouds that solve really specific and hard problems and create differential value. Okay, let's dig a bit more into the architectural aspects of Supercloud. In other words, what are the salient attributes of Supercloud? So, first and foremost, a Supercloud runs a set of specific services designed to solve a unique problem, and it can do so in more than one cloud. Superclouds leverage the underlying cloud native tooling of a hyperscale cloud, but they're optimized for a specific objective that aligns with the problem that they're trying to solve. For example, Supercloud might be optimized for lowest cost or lowest latency or sharing data or governing or securing that data or higher performance for networking, for example. But the point is, the collection of services that is being delivered is focused on a unique value proposition that is not being delivered by the hyperscalers across clouds. A Supercloud abstracts the underlying and siloed primitives of the native PaaS layer from the hyperscale cloud, and then using its own specific platform as a service tooling, creates a common experience across clouds for developers and users. And it does so in the most efficient manner, meaning it has the metadata knowledge and management capabilities that can optimize for latency, bandwidth, or recovery or data sovereignty, or whatever unique value that Supercloud is delivering for the specific use case in their domain. And a Supercloud comprises a super PaaS capability that allows ecosystem partners through APIs to add incremental value on top of the Supercloud platform to fill gaps, accelerate features, and of course, innovate. The services can be infrastructure related, they could be application services, they could be data services, security services, user services, et cetera, designed and packaged to bring unique value to customers. Again, that hyperscalers are not delivering across clouds or on premises. Okay, so another common question we get is, "Isn't that just multi-cloud?" And what we'd say to that is yeah, "Yes, but no." You can call it multi-cloud 2.0, if you want. If you want to use, it's kind of a commonly used rubric. But as Dell's Chuck Whitten proclaimed at Dell Technologies World this year, multi-cloud, by design, is different than multi-cloud by default. Meaning, to date, multi-cloud has largely been a symptom of what we've called multi-vendor or of M&A. You buy a company and they happen to use Google cloud. And so you bring it in. And when you look at most so-called multi-cloud implementations, you see things like an on-prem stack, which is wrapped in a container and hosted on a specific cloud. Or increasingly, a technology vendor has done the work of building a cloud native version of their stack and running it on a specific cloud. But historically, it's been a unique experience within each cloud, with virtually no connection between the cloud silos. Supercloud sets out to build incremental value across clouds and above hyperscale CAPEX that goes beyond cloud compatibility within each cloud. So, if you want to call it multi-cloud 2.0, that's fine, but we chose to call it Supercloud. Okay, so at this point you may be asking, "Well isn't PaaS already a version of Supercloud?" And again, we would say, "No." That Supercloud and its corresponding super PaaS layer, which is a prerequisite, gives the freedom to store, process, and manage and secure and connect islands of data across a continuum with a common experience across clouds. And the services offered are specific to that Supercloud and will vary by each offering. OpenShift, for example, can be used to construct a super PaaS, but in and of itself, isn't a super PaaS, it's generic. A super PaaS might be developed to support, for instance, ultra low latency database work. It would unlikely, again, taking the OpenShift example, it's unlikely that off the shelf OpenShift would be used to develop such a low latency, super PaaS layer for ultra low latency database work. The point is, Supercloud and its inherent super PaaS will be optimized to solve specific problems like that low latency example for distributed databases or fast backup in recovery for data protection and ransomware, or data sharing or data governance. Highly specific use cases that the Supercloud is designed to solve for. Okay, another question we often get is, "Who has a Supercloud today and who's building a Supercloud and who are the contenders?" Well, most companies that consider themselves cloud players will, we believe, be building or are building Superclouds. Here's a common ETR graphic that we like to show with net score or spending momentum on the Y axis, and overlap or pervasiveness in the ETR surveys on the X axis. And we've randomly chosen a number of players that we think are in the Supercloud mix. And we've included the hyperscalers because they are enablers. Now, remember, this is a spectrum of maturity. It's a maturity model. And we've added some of those industry players that we see building Superclouds like Capital One, Goldman Sachs, Walmart. This is in deference to Moschella's observation around the matrix and the industry structural changes that are going on. This goes back to every company being a software company. And rather than pattern match and outdated SaaS model, we see new industry structures emerging where software and data and tools specific to an industry will lead the next wave of innovation and bring in new value that traditional technology companies aren't going to solve. And the hyperscalers aren't going to solve. We've talked a lot about Snowflake's data cloud as an example of Supercloud. After being at Snowflake Summit, we're more convinced than ever that they're headed in this direction. VMware is clearly going after cross cloud services, perhaps creating a new category. Basically, every large company we see either pursuing Supercloud initiatives or thinking about it. Dell showed Project Alpine at Dell Tech World. That's a Supercloud. Snowflake introducing a new application development capability based on their super PaaS, our term, of course. They don't use the phrase. Mongo, Couchbase, Nutanix, Pure Storage, Veeam, CrowdStrike, Okta, Zscaler. Yeah, all of those guys. Yes, Cisco and HPE. Even though on theCUBE at HPE Discover, Fidelma Russo said on theCUBE, she wasn't a fan of cloaking mechanisms. (Dave laughing) But then we talked to HPE's head of storage services, Omer Asad, and he's clearly headed in the direction that we would consider Supercloud. Again, those cross cloud services, of course, their emphasis is connecting as well on-prem. That single experience, which traditionally has not existed with multi-cloud or hybrid. And we're seeing the emergence of smaller companies like Aviatrix and Starburst and Clumio and others that are building versions of Superclouds that solve for a specific problem for their customers. Even ISVs like Adobe, ADP, we've talked to UiPath. They seem to be looking at new ways to go beyond the SaaS model and add value within their cloud ecosystem, specifically around data as part of their and their customer's digital transformations. So yeah, pretty much every tech vendor with any size or momentum, and new industry players are coming out of hiding and competing, building Superclouds that look a lot like Moschella's matrix, with machine intelligence and blockchains and virtual realities and gaming, all enabled by the internet and hyperscale cloud CAPEX. So it's moving fast and it's the future in our opinion. So don't get too caught up in the past or you'll be left behind. Okay, what about examples? We've given a number in the past but let's try to be a little bit more specific. Here are a few we've selected and we're going to answer the two questions in one section here. What workloads and services will run in Superclouds and what are some examples? Let's start with analytics. Our favorite example of Snowflake. It's one of the furthest along with its data cloud, in our view. It's a Supercloud optimized for data sharing and governance, and query performance, and security, and ecosystem enablement. When you do things inside of that data cloud, what we call a super data cloud. Again, our term, not theirs. You can do things that you could not do in a single cloud. You can't do this with Redshift. You can't do this with SQL server. And they're bringing new data types now with merging analytics or at least accommodate analytics and transaction type data and bringing open source tooling with things like Apache Iceberg. And so, it ticks the boxes we laid out earlier. I would say that a company like Databricks is also in that mix, doing it, coming at it from a data science perspective trying to create that consistent experience for data scientists and data engineering across clouds. Converge databases, running transaction and analytic workloads is another example. Take a look at what Couchbase is doing with Capella and how it's enabling stretching the cloud to the edge with arm based platforms and optimizing for low latency across clouds, and even out to the edge. Document database workloads, look at Mongo DB. A very developer friendly platform that where the Atlas is moving toward a Supercloud model, running document databases very, very efficiently. How about general purpose workloads? This is where VMware comes into play. Very clearly, there's a need to create a common operating environment across clouds and on-prem and out to the edge. And I say, VMware is hard at work on that, managing and moving workloads and balancing workloads, and being able to recover very quickly across clouds for everyday applications. Network routing, take a look at what Aviatrix is doing across clouds. Industry workloads, we see Capital One. It announced its cost optimization platform for Snowflake, piggybacking on Snowflake's Supercloud or super data cloud. And in our view, it's very clearly going to go after other markets. It's going to test it out with Snowflake, optimizing on AWS, and it's going to expand to other clouds as Snowflake's business and those other clouds grows. Walmart working with Microsoft to create an on-premed Azure experience that's seamless. Yes, that counts, on-prem counts. If you can create that seamless and continuous experience, identical experience from on-prem to a hyperscale cloud, we would include that as a Supercloud. We've written about what Goldman is doing. Again, connecting its on-prem data and software tooling, and other capabilities to AWS for scale. And you can bet dollars to donuts that Oracle will be building a Supercloud in healthcare with its Cerner acquisition. Supercloud is everywhere you look. So I'm sorry, naysayers, it's happening all around us. So what's next? Well, with all the industry buzz and debate about the future, John Furrier and I have decided to host an event in Palo Alto. We're motivated and inspired to further this conversation. And we welcome all points of view, positive, negative, multi-cloud, Supercloud, HyperCloud, all welcome. So theCUBE on Supercloud is coming on August 9th out of our Palo Alto studios. We'll be running a live program on the topic. We've reached out to a number of industry participants; VMware, Snowflake, Confluent, Skyhigh Security, G. Written House's new company, HashiCorp, CloudFlare. We've hit up Red Hat and we expect many of these folks will be in our studios on August 9th. And we've invited a number of industry participants as well that we're excited to have on. From industry, from financial services, from healthcare, from retail, we're inviting analysts, thought leaders, investors. We're going to have more detail in the coming weeks, but for now, if you're interested, please reach out to me or John with how you think you can advance the discussion, and we'll see if we can fit you in. So mark your calendars, stay tuned for more information. Okay, that's it for today. Thanks to Alex Myerson who handles production and manages the podcast for "Breaking Analysis." And I want to thank Kristen Martin and Cheryl Knight. They help get the word out on social and in our newsletters. And Rob Hof is our editor in chief over at SiliconANGLE, who does a lot of editing and appreciate you posting on SiliconANGLE, Rob. Thanks to all of you. Remember, all these episodes are available as podcasts wherever you listen. All you got to do is search, breaking analysis podcast. I publish each week on wikibon.com and siliconangle.com. Or you can email me directly at david.vellante@siliconangle.com. Or DM me @DVallante, or comment on my LinkedIn post. And please, do check out etr.ai for the best survey data in the enterprise tech business. We'll be at AWS NYC summit next Tuesday, July 12th. So if you're there, please do stop by and say hello to theCUBE. It's at the Javits Center. This is Dave Vallante for theCUBE Insights, powered by ETR. Thanks for watching. And we'll see you next time on "Breaking Analysis." (slow music)

(gentle music) >> We're back at the Seaport in Boston. I'm Dave Vellante with my co-host, Paul Gillin. Tracie Zenti is here. She's the Director of Global Partner Management at Microsoft, and Tom Anderson is the Vice President of Ansible at Red Hat. Guys, welcome to theCube. >> Hi, thank you. >> Yep. >> Ansible on Azure, we're going to talk about that. Why do I need Ansible? Why do I need that kind of automation in Azure? What's the problem you're solving there? >> Yeah, so automation itself is connecting customers' infrastructure to their end resources, so whether that infrastructure's in the cloud, whether it's in the data center, or whether it's at the edge. Ansible is the common automation platform that allows customers to reuse automation across all of those platforms. >> And so, Tracie, I mean, Microsoft does everything. Why do you need Red Hat to do Ansible? >> We want that automation, right? We want our customers to have that ease of use so they can be innovative and bring their workloads to Azure. So that's exactly why we want Ansible. >> Yeah, so kind of loaded questions here, right, as we were sort of talking offline. The nature of partnerships is changing. It's about co-creating, adding value together, getting those effects of momentum, but maybe talk about how the relationship started and how it's evolving and I'd love to have your perspective on the evolving nature of ecosystems. >> Yeah, I think the partnership with Red Hat has been strong for a number of years. I think my predecessor was in the role for five years. There was a person in there for a couple years before that. So I think seven or eight years, we've been working together and co-engineering. Red Hat enterprised Linux. It's co-engineered. Ansible was co-engineered. We work together, right? So we want it to run perfectly on our platform. We want it to be a good customer experience. I think the evolution that we're seeing is in how customers buy, right? They want us to be one company, right? They want it to be easy. They want be able to buy their software where they run it on the cloud. They don't want to have to call Red Hat to buy and then call us to buy and then deploy. And we can do all that now with Ansible's the first one we're doing this together and we'll grow that on our marketplace so that it's easy to buy, easy to deploy, easy to keep track of. >> This is not just Ansible in the marketplace. This is actually a fully managed service. >> That's right. >> What is the value you've added on top of that? >> So it runs in the customer account, but it acts kind of like SaaS. So Red Hat gets to manage it, right? And it's in their own tenant. So they get in the customer's own tenant, right? So with a service principle, Red Hat's able to do that management. Tom, do you want to add anything to that? >> Yeah, the customers don't have to worry about managing Ansible. They just worry about using Ansible to automate their infrastructure. So it's a kind of a win-win situation for us and for our customers. We manage the infrastructure for them and the customer's resources themselves and they get to just focus on automating their business. >> Now, if they want to do cross-cloud automation or automation to their hybrid cloud, will you support that as well? >> 100%. >> Absolutely. >> Yeah. >> We're totally fine with that, right? I mean, it's unrealistic to think customers run everything in one place. That isn't enterprise. That's not reality. So yeah, I'm fine with that. >> Well, that's not every cloud provider. >> No (laughing) that's true. >> You guys over here, at Amazon, you can't even say multicloud or you'll get thrown off the stage. >> Of course we'd love it to all run on Azure, but we want our customers to be happy and have choice, yeah. >> You guys have all, I mean, you've been around a long time. So you had a huge on-prem state, brought that to the cloud, and Azure Stack, I mean, it's been around forever and it's evolved. So you've always believed in, whatever you call it, Hybrid IT, and of course, you guys, that's your call of mission. >> Yeah, exactly. >> So how do you each see hybrid? Where's the points of agreement? It sounds like there's more overlap than gaps, but maybe you could talk about your perspective. >> Yeah, I don't think there are any points of disagreement. I think for us, it's meeting our customers where their center of gravity is, where they see their center of management gravity. If it's on Azure, great. If it's on their data center, that's okay, too. So they can manage to or from. So if Azure is their center of gravity, they can use automation, Ansible automation, to manage all the things on Azure, things on other cloud providers, things in their data center, all the way out to their edge. So they have the choice of what makes the most sense to them. >> And Azure Arc is obviously, that's how Azure Stack is evolving, right? >> Yeah, and we have Azure Arc integration with Ansible. >> Yeah. >> So yeah, absolutely. And I mean, we also have Rell on our marketplace, right? So you can buy the basement and you could buy the roof and everything in between. So we're growing the estate on marketplace as well to all the other products that we have in common. So absolutely. >> How much of an opportunity, just go if we go inside? Give us a little peak inside Microsoft. How much of an opportunity does Microsoft think about multi-cloud specifically? I'm not crazy about the term multicloud, 'cause to me, multicloud, runs an Azure, runs an AWS, runs on Google, maybe runs somewhere else. But multicloud meaning that common experience, your version of hybrid, if you will. How serious is Microsoft about that as a business opportunity? A lot of people would say, well, Microsoft really doesn't want. They want everything in their cloud. But I'd love to hear from you if that is good. >> Well, we have Azure Red Hat OpenShift, which is a Microsoft branded version of OpenShift. We have Ansible now on our marketplace. We also, of course, we have AKS. So I mean, container strategy runs anywhere. But we also obviously have services that enhance all these things. So I think, our marketplace is a third party marketplace. It is designed to let customers buy and run easily on Azure and we'd want to make that experience good. So I don't know that it's... I can't speak to our strategy on multicloud, but what I can speak to is when businesses need to do innovation, we want it to be easy to do that, right? We want it to be easy to buy, defined, buy, deploy, manage, and that's what we're trying to accomplish. >> Fair to say, you're not trying to stop it. >> No, yeah, yeah. >> Whether or not it evolves into something that you heavily lean into or see. >> When we were talking before the cameras turned on, you said that you think marketplaces are the future. Why do you say that? And how will marketplaces be differentiated from each other in the future? >> Well, our marketplace is really, first of all, I think, as you said off camera, they're now. You can buy now, right? There's nothing that stops you. But to me, it's an extension of consumerization of IT. I've been in IT and manageability for about 23 years and full automation is what we and IT used to always talk about, that single pane of glass. How do you keep track of everything? How do you make it easy? How do you support? And IT is always eeking out that last little bit of funding to do innovation, right? So what we can do with consumerization of IT is make it easier to innovate. Make it cheaper to innovate, right? So I think marketplaces do that, right? They've got gold images you can deploy. You're also able to deploy custom images. So I think the future is as particularly with ours, like we support, I don't remember the exact number, but over a hundred countries of tax calculation. We've got like 17 currencies. So as we progress and customers can run from anywhere in the world and buy from anywhere in the world and make it simple to do those things that used to take maybe two months to spin up services for innovation and Ansible helps with that, that's going to help enterprises innovate faster. And I think that's what marketplaces are really going to bring to the forefront is that innovation. >> Tom, why did Ansible, I'm going to say one, I mean, you're never done. But it was unclear a few years ago, which automation platform was going to win in the marketplace and clearly, Ansible has taken a leading position. Why? What were the factors that led to that? >> Honestly, it was the strength of the community, right? And Red Hat leaning into that community to support that community. When you look out at the upstream community for Ansible and the number of participants, active participants that are contributing to the community just increases its value to everybody. So the number of integrations, the number of things that you can automate with Ansible is in the thousands and thousands, and that's not because a group of Red Hat engineers wrote it. That's because our community partners, like Microsoft wrote the user integrations for Ansible. F5 does theirs. Customers take those and expand on them. So the number of use cases that we can address through the community and through our partners is immense. >> But that doesn't just happen. I mean, what have you done to cultivate that community? >> Well, it's in Red Hat's DNA, right? To be the catalyst in a community, to bring partners and users together, to share their knowledge and their expertise and their skills, and to make the code open. So anybody can go grab Ansible from upstream and start doing stuff with it, if they want. If they want to mature on it and management for it and support all the other things that Red Hat provides, then they come to us for a subscription. So it's really been about sort of catalyzing and supporting that community, and Red Hat is a good steward of these upstream communities. >> Is Azure putting Ansible to use actually within your own platform as opposed to being a managed service? Are you adopting Ansible for automation of the Azure Platform? >> I'll let you answer that. >> So two years ago, Microsoft presented at AnsibleFest, our fall conference, Budd Warrack, I'm butchering his last name, but he came on and told how the networking team at Microsoft supports about 35,000 access points across hundreds of buildings, all the Microsoft campuses using Ansible to do that. Fantastic story if you want to go on YouTube and look up that use case. So Microsoft is an avid user of the Ansible technology in their environment. >> Azure is kind of this really, I mean, incredible strategic platform for Microsoft. I wonder if you could talk about Azure as a honeypot for partners. I mean, it seems, I mean, the momentum is unbelievable. I mean, I pay attention to their earnings calls every quarter of Azure growth, even though I don't know what the exact number is, 'cause they won't give it to me but they give me the growth rates and it's actually accelerating. >> No lie. (Tracie laughing) >> I've got my number. It's in the tens of billions. I mean, I'm north of 35 billion, but growing at the high 30%. I mean, it's remarkable. So talk about the importance of that to the ecosystem as a honey pot. >> Paul Satia said it right. Many times partners are essential to our strategy. But if you think about it, software solves problems. We have software that solves problems. They have software that solves problems, right? So when IT and customers are thinking of solving a problem, they're thinking software, right? And we want that software to run on Azure. So partners have to be essential to our strategy. Absolutely. It's again, we're one team to the customer. They want to see that as working together seamlessly. They don't want it to be hardware Azure plus software. So that's absolutely critical to our success. >> And if I could add for us, the partners are super important. So some of our launch partners are like F5 and CyberArk who have certified Ansible content for Ansible on Azure. We have service provider partners like Accenture and Kindra that are launching with us and providing our joint customers with help to get up to speed. So it really is a partner play. >> Absolutely. >> Where are you guys taking this? Where do you want to see it go? What are some of the things that observers should pay attention to as marketers of success and evolution? >> Well, certainly for us, it's obviously customer adoption, but it is providing them with patterns. So out of the box patterns that makes it easy for them to get up and running and solve the use cases and problems that they run into most frequently. Problems ain't the right word. Challenges or opportunities on Azure to be able to automate the things. So we're really leaning into the different use cases, whether it's edge, whether it's cloud, whether it's cloud to edge, all of those things. We want to provide users with out of the box Ansible content that allows 'em to just get up and automating super fast, and doing that on Azure makes it way easier for us because we don't have to focus on the install and the setting up and configuring it. It's all just part of the experience >> And Tracie, for Microsoft, it's world domination with a smile. (all laughing) >> Of course. No, of course not. No, I think it's to continue to grow the co-engineering we do across all of the Red Hat products. I can't even tell you the number of things we work on together, but to look forward strategically at what opportunities we have across our products and theirs to integrate like Arc and Ansible, and then making it all easy to buy, making it available so that customers have choice and they can buy how they want to and simplify. So we're just going to continue to do that and we're at that infancy right now and as we grow, it'll just get easier and easier with more and more products. >> Well, bringing the edge into the equation is going to be really interesting. Microsoft with its gaming, vector is amazing, and recent, awesome acquisitions. All the gamers are excited about that and that's a huge edge play. >> You'll have to bring my son on for that interview. >> Yeah. >> My son will interview. >> He knows more than all of us, I'm sure. What about Ansible? What's ahead for Ansible? >> Edge, so part of the Red Hat play at the Edge. We've getting a lot of customer pull for both industrial Edge use cases in the energy sector. We've had a joint customer with Azure that has a combined Edge platform. Certainly, the cloud stuff that we're announcing today is a huge growth area. And then just general enterprise automation. There's lots of room to run there for Ansible. >> And lots of industries, right? >> Yeah. >> Telco, manufacturing. >> Retail. >> Retail. >> Yeah. >> Yeah. There's so many places to go, yeah, that need the help. >> The market's just, how you going to count it anymore? It's just enormous. >> Yeah. >> It's the entire GDP the world. But guys, thanks for coming to theCUBE. >> Yeah. >> Great story. Congratulations on the partnership and the announcements and look forward to speaking with you in the future. >> Yeah, thanks for having us. >> Thanks for having us. >> You're very welcome. And keep it right there. This is Dave Vellante for Paul Gillin. This is theCUBE's coverage of Red Hat Summit 2022. We'll be right back at Seaport in Boston. (gentle music)

>> From the theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Well, it looks like hybrid cloud is finally here. We've seen a decade of posturing, marchitecture, slideware and narrow examples of hybrid cloud, but there's little question that the definition of cloud is expanding to include on-premises workloads in hybrid models. Now depending on which numbers you choose to represent IT spending, public cloud only accounts for actually less than 5% of the total pie. So the big question is, how will this now evolve? Customers want control, they want governance, they want security, flexibility and a feature-rich set of services to build their digital businesses. It's unlikely that they can buy all that, so they're going to have to build it with partners, specifically vendors, SI's, consultancies and their own developers. The tug of war to win the new cloud day has finally started in earnest between the hyperscalers and the largest enterprise tech companies in the world. Hello and welcome to this week's Wikibon CUBE insights, powered by ETR. In this Breaking Analysis, we'll walk you through how we see the battle for hybrid cloud, how we got here, where we are and where it's headed. First, I want to go back to 2009, in a blog post by a man named Chuck Hollis. Chuck Hollis, at the time, was a CTO and marketing guru inside of EMC who, remember, owned VMware. Chuck was kind of this hybrid, multi-tool player, pun intended. EMC at the time had a big stake, a lot at stake, as the ascendancy of AWS was threatening the historical models, which had defined enterprise IT. Now around that time, NIST published its first draft of a cloud computing definition which, as I recall, included language, something to the effect of accessing remote services over the public network, i.e., public IP networks. Now, NIST has essentially or since evolved that definition, but the original draft was very favorable to the public cloud. And the vendor community, the traditional vendor community, said hang on, we're in this game too. So that was 2009 when Chuck Hollis published this slide. He termed it Private Cloud, a term which he saw buried inside of a Gartner research post or research note that was not really fleshed out and defined. The idea was pretty compelling. The definition of cloud centered on control, where you, as the customer, had on-prem workloads that could span public and on-prem clouds, if you will, with federated security and a data plan that spanned the states. Essentially, you had an internal and an external cloud with a single point of control. This is basically what the hybrid cloud vision has become. An abstraction layer that spans on-prem and public clouds and we can extend that across clouds and out to the edge, where a customer has a single point of control and federated governance and security. Now we know this is still aspirational, but we're now seeing vendor offerings that put forth this promise and a roadmap to get there from different points of view, that we're going to talk about today. The NIST definition now reads cloud computing is a model for enabling ubiquitous, convenient on-demand network access to a shared pool of configurable computing resources, e.g., network server storage, applications and services, that can be rapidly provisioned and released with minimal management effort or service provider interaction. So there you have it, that is inclusive of on-prem, but it took the industry a decade plus to actually get where we are today. And they did so by essentially going to school with the public cloud offerings. Now in 2018, AWS announced Outposts and that was another wake up call to the on-prem community. Externally, they pointed to the validation that hybrid cloud was real. Hey, AWS is doing it so clearly they've capitulated, but most on-prem vendors at the time didn't have a coherent offering for hybrid, but the point is the on-prem vendors responded as they saw AWS moving past the demilitarized zone into enemy lines. And here's what the competitive landscape of hybrid offerings looks like today. All three US-based hyperscalers have an offering or multiple offerings in various forms, Outposts from Amazon and other services that they offer, Google Anthos and Azure Arc, they're all so prominent, but the real action today is coming from the on-prem vendors. Every major company has an offering. Now most of these stemmed from services-led and finance-led initiatives, but they're evolving to true Azure Service models. HPE GreenLake is prominent and the company's CEO, Antonio Neri, is putting the whole company behind Azure Service. HPE claims to be the first, it uses that in its marketing, with such an Azure Service offering, but actually Oracle was their first with Cloud@Customer. You know, possibly Microsoft could make a claim to being early as well, but it really doesn't matter. Let's see, Dell has responded with Apex and is going hard after this opportunity. Cisco has Cisco Plus and Lenovo has TruScale. IBM also has a long services and finance-led history and has announced pockets of Azure Service in areas like storage. And Pure Storage is an example that we chose of a segment player, of course within storage, that has a strong Azure Service offering, and there are others like that. So the landscape is getting very busy. And so, let's break this down a bit. AWS is bringing its programmable infrastructure model and its own hardware to what it calls the edge. And it looks at on-prem data centers as just another edge node. So that's how they're de-positioning the on-prem crowd, but the fact is, when you really look at what Outposts can do today, it's limited, but AWS will move quickly so expect a continued rapid evolution of their model and the services that are supported on Outposts. Azure gets its hardware from partners and has relationships with virtually everyone that matters. Anthos is, as well, a software layer and Google created Kubernetes as the great equalizer in cloud. And it was a nice open source gift to the industry and has obviously taken off. So the cloud guys have the advantage of owning a cloud. The pure on-prem players, they don't, but the on-prem crowd has rich stacks, much richer and more mature in a lot of areas, as it relates to supporting on-premises workloads and much more so than the cloud players, but they don't have mature cloud stacks. They're kind of just getting started with things like subscription billing and API-based microservices offerings. They got to figure out Salesforce compensation and just the overall Azure service mentality versus the historical product box mentality, and that takes time. And they're each coming at this from their respective different points of view and points of strength. HPE is doing a very good job of marketing and go-to market. It probably has the cleanest model, enabled by the company's split from HP, but it has some gaps that it's needed to fill and it's doing so through acquisitions. Ezmeral, for example, is it's new data play. It just bought Zerto to facilitate backup as a service. And it's expanded partnerships to fill gaps in the portfolio. Some partnerships, which they couldn't do before because it created conflicts inside of HPE or HP. Dell is all about the portfolio, the breadth of the portfolio, the go-to-market prowess and its supply chain advantage. It's very serious about Azure Service with Apex and it's driving hard to win that day. Cisco comes at this from a huge portfolio and of course, a point of strength and networking, which maybe is a bit tougher to offer as a service, but Cisco has a large and fast growing subscription business in collaborations, security and other areas, so it's cloud-like in that regard. And Oracle, of course, has the huge advantage of an extremely rich functional stack and it owns a cloud, which has dramatically improved in the past few years, but Oracle is narrow to the red stack, at least today. Oracle, if it wanted to, we think, could dominate the database cloud, it could be the database cloud, especially if it decided to open its cloud to competitive database offerings and run them in the Oracle cloud. Hmm. Wonder if Oracle will ever move in that direction. Now a big part of this shift is the appeal of OPEX versus CAPEX. Let's take a look at some ETR data that digs a bit deeper into this topic. This data is from an August ETR drill down, asking CIOs and IT buyers how their budgets are split between OPEX and CAPEX. The mid point of the yellow line shows where we are today, 57% OPEX, expecting to grow to 63% one year from now. That's not a huge difference, there's not a huge difference when you drill into global 2000, which kind of surprised me. I thought global 2000 would be heavier CAPEX, but they seem to be accelerating the shift to OPEX slightly faster than the overall base, but not really in a meaningful way. So I didn't really discern big differences there. Now, when you dig further into industries and look at subscription versus consumption models for OPEX, you see about 60/40 favoring subscription models, with most industry slowly moving toward consumption or usage based models over time. There are a couple of outliers, but generally speaking, that's the trend. What's perhaps more interesting is when you drill into subscription versus usage based models by product area, and that's what this chart shows. It shows by tech segment, the percent subscription, that's the blue, versus consumption or usage based, that's the gray bars, yellow being indifferent or maybe it's I don't know. What stands out are two areas that are more usage heavy, consumption heavy. That's database, data warehousing, and IS. So database is surely weighted by companies like Snowflake and offerings like Redshift and other cloud databases from Azure and Google and other managed services, but the IS piece, while not surprising, is, we think, relevant because most of the legacy vendor Azure Service offerings are borrowing from a SaaS-oriented subscription model with a hardware twist. In other words, as a customer, you're committing to a term and a minimum spend over the life of that term. You're locked in for a year or three years, whatever it is, to account for the hardware and headroom the vendor has to install because they want to allow you to increase your usage. So that's the usage based model. See, you're then paying by the drink for that consumption above that minimum threshold. So it's a hybrid subscription consumption model, which is actually quite interesting. And we've been saying, what would really be cool is if one of the on-prem penguins on the iceberg would actually jump in and offer a true consumption model right out of the box, as a disruptive move to the industry and to the cloud players, and take that risk. And I think that might happen once they feel comfortable with the financial model and they have nailed the product market fit, but right now, the model is what it is. And even AWS without post requires a threshold and a minimum commitment. So we'd love to see someone take that chance and offer true cloud consumption pricing to facilitate more experimentation and lower risk for the customer entry points. Now let's take a look at some of these players and see what kind of spending momentum they have. This is our popular XY chart-view that plots net score or spending velocity on the x-axis and market share or pervasiveness in the data set on the... Oh, sorry, net score or spending momentum on the y-axis and pervasiveness or market share on the x-axis. Now this is cut by cloud computing vendors, as defined by the customers responding. There were nearly 1500 respondents in the ETR survey, so a couple of points here. Note the red line is the elevated line. In other words, anything above that is considered really robust momentum. And no surprise, Azure, AWS and Google are above that line. Azure and AWS always battle it out for top share of voice in the x-axis in this survey. Now this, remember, is the July survey, but ETR, they gave me a sneak peek at the October results that they're going to be releasing in the coming week and Dell cloud and VMware cloud, which is VCF and maybe some other components, not VMware cloud and AWS, that's a separate beast, but those two are moving up in the y-axis. So they're demonstrating spending momentum. IBM is moving down and Oracle is at a respectable 20% on the y-axis. Now, interestingly, HPE and Lenovo don't show up in the cloud taxonomy, in that cloud cut, and neither does Cisco. I believe I'm correct in that this is an open-ended question, i.e., who are your cloud suppliers? So the customers are not resonating with that messaging yet, but I'm going to double check on that. Now to widen the aperture a bit, we said let's do a cut of the on-prem and cloud players within cloud accounts, so we can include HPE and Cisco and see how they're doing inside of cloud accounts. So that's what this chart does. It's a filter on 975 customers who identify themselves as cloud accounts. So here we were able to add in Cisco and HPE. Now, Lenovo still doesn't show up on the data. It shows up in laptops and desktops, but not as prominent in the enterprise, not prominent at all, but HPE Ezmeral did show up and it's moving forward in the October survey, again, part of the sneak peek. Ezmeral is HPE's data platform that they've introduced, combining the assets of MapR, BlueData and some other organic development. Now, as you can see, HPE and Cisco, they show up on the chart, as I said, and you can see the rope in the tug of war is starting to get a little bit more taut. The cloud guys have momentum and big account presence, but the on-prem folks also have big footprints, rich stacks and many have strong services arms, and a lot of customer affinity. So let's wrap with some comments about how this will shake out and what's some of the markers we can watch. Now, the first thing I'll say is we're starting to hear the right language come out of the vendor community. The idea that they're investing in a layer to abstract the underlying complexity of the clouds and on-prem infrastructure and turning the world into, essentially, a programmable interface to resources. The question is, what about giving access through that layer to underlying primitives in the public cloud? VMware has been very clear on this. They will facilitate that access. I believe Red Hat as well. So watch to the degree in which the large on-prem players are enabling that access for developers. We believe this is the right direction overall, but it's also very hard and it's going to require lots of resources and R & D. I would say at this point that each company has its respective strengths and weaknesses. I see HPE mostly focused today on making its on-prem offerings work like a cloud, whereas some of the others, VMware, Dell and Cisco, are stressing to a greater degree, in my view, enabling multi-cloud and edge connections, cross connections. Not that HPE isn't open to that when you ask them about it, but its marketing is more on-prem leaning, in my opinion. Now all of the traditional vendors, in my view, are still defensive about the cloud, although I would say much less so each day. Increasingly, they look at the public cloud as an opportunity to build value on top of that abstraction layer, if you will. As I said earlier, these on-prem guys, they all have ways to go. They're in the early stages of figuring out what a cloud operating model looks like, how it works, what services to offer, how to pay sellers and partners, but the public cloud vendors, they're miles ahead in that regard, but at the same time, they're navigating into on-prem territory. And they're very immature, in most cases. So how do they service all this stuff? How do they establish partnerships and so forth? And how do they build stacks on prem that are as rich as they are in the cloud? And what's their motivation to do that? Are they getting pulled, digging their heels in? Or are they really serious about it? Now, in some respects, Oracle is in the best position here in terms of hybrid maturity, but again, it's narrowly focused on the Red Stack. I would say the same for Pure Storage, more mature as a service, but narrowly focused, of course, on storage. Let's talk marketplace and ecosystems. One of the hallmarks of public clouds is optionality of tooling. Just all you do is go to the AWS Marketplace and you'll see what I mean. It's got this endless bevy of choices. It's got one of everything in there and you can buy directly from your AWS Console. So watch how the hybrid cloud plays out in terms of partner inclusion and ease of doing business, that's another sign of maturity. Let's talk developers and edge. This is by far the most important and biggest hole in the hybrid portfolios, outside the public cloud players. If you're going to build infrastructure as code, who do you expect to code it? How are the on-prem players cultivating developer communities? IBM paid 34 billion to buy its way in. Actually, in today's valuation terms, you might say that's looking like a good play, but still, that cash outlay is equal to one third of IBM's revenue. So big, big bet on OpenShift, but IBM's infrastructure strategy is fragmented and its cloud business, as IBM reports in its financial statements, is a services-heavy, kitchen sink set of offerings. It's very confusing. So they got to still do some clean up there, but they're serious about the architectural battle for hybrid cloud, as Arvind Krishna calls it. Now VMware, by cobbling together the misfit developer toys of the remnants from the EMC Federation, including Pivotal, is trying to get there. You know, but when you talk to customers, they're still not all in on VMware's developer affinity. Now Cisco has DevNet, but that's basically CCIE's and other trained networking engineers learning to code in languages like Python. It's not necessarily true devs, although they're upskilling. It's a start and they're investing, Cisco, that is, investing in the community, leveraging their champions, and I would say Dell could do the same with, for example, the numerous EMC storage admins that are out there. Now Oracle bought Sun to get Java, and that's a large community of developers, but even so, when you compare AWS and Microsoft ecosystems to the others, it's not even close in terms of developer affinity. So lots of work to be done there. One other point is Pure's acquisition of Portworx, again, while narrowly focused, is a good move and instructive of the changes going on in infrastructure. Now how does this all relate to the edge? Well, I'm not going to talk much about that today, but suffice to say, developers, in our view, will win the edge. And right now, they're coding in the cloud. Now they're often coding in the cloud and moving work on prem, wrapping them in containers, but watch how sticky that model is for the respective players. The other thing to watch is cadence of offerings. Another hallmark of cloud is a rapid expansion of features. The public cloud players don't appear to be slowing down and the on-prem folks seem to be accelerating. I've been watching HPE and GreenLake and their cadence of offerings, and watch how quickly the newbies of Azure Service can add functionality, I have no doubt Dell is going to be right there as well, as is Cisco and others. Also pay attention to financial metrics, watch how Azure Service impacts the income statements and how the companies deal with that because as you shift to deferred revenue models, it's going to hurt profitability. And I'm not worried about that at all because it won't hurt cashflow, or at least it shouldn't. As long as the companies communicate to Wall Street and they're transparent, i.e., they don't shift reporting definitions every year and a half or two years, but watch for metrics around retention and churn, RPO or Remaining Performance Obligations, billing versus bookings, increased average contract values, cohort selling, the impact on both gross margin and operating margin. These are the things you watch with SaaS companies and essentially, these big hardware players are becoming Azure Service slash SaaS companies. These are going to be the key indicators of success and the proof in the pudding of the transition to Azure Service. It should be positive for these companies, assuming they get the product market fit right, and can create a flywheel effect with their respective ecosystems and partner channels. Now I'm sure you can think of other important factors to watch, but I'm going to leave it here for now. Remember these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis podcast and please subscribe, check out ETR's website at etr.plus. We also publish a full report every week on wikibon.com and siliconangle.com. You can get in touch with me, email david.vellante@siliconangle.com or you can DM me @dvellante. You can comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights powered by ETR. Have a great week, everybody, stay safe, be well. And we'll see you next time. (soft music)

(bright music) >> Hello, everyone, and welcome to this CUBE video exclusive. This is Dave Vellante, and as I've said many times what people sometimes forget is Oracle's chairman is also its CTO, and he understands and appreciates the importance of engineering. It's the lifeblood of tech innovation, and Oracle continues to spend money on R and D. Over the past decade, the company has evolved its Exadata platform by investing in core infrastructure technology. For example, Oracle initially used InfiniBand, which in and of itself was a technical challenge to exploit for higher performance. That was an engineering innovation, and now it's moving to RoCE to try and deliver best of breed performance by today's standards. We've seen Oracle invest in machine intelligence for analytics. It's converged OLTB and mixed workloads. It's driving automation functions into its Exadata platform for things like indexing. The point is we've seen a consistent cadence of improvements with each generation of Exadata, and it's no secret that Oracle likes to brag about the results of its investments. At its heart, Oracle develops database software and databases have to run fast and be rock solid. So Oracle loves to throw around impressive numbers, like 27 million AKI ops, more than a terabyte per second for analytics scans, running it more than a terabyte per second. Look, Oracle's objective is to build the best database platform and convince its customers to run on Oracle, instead of doing it themselves or in some other cloud. And because the company owns the full stack, Oracle has a high degree of control over how to optimize the stack for its database. So this is how Oracle intends to compete with Exadata, Exadata Cloud@Customer and other products, like ZDLRA against AWS Outposts, Azure Arc and do it yourself solutions. And with me, to talk about Oracle's latest innovation with its Exadata X9M announcement is Juan Loaiza, who's the Executive Vice President of Mission Critical Database Technologies at Oracle. Juan, thanks for coming on theCUBE, always good to see you, man. >> Thanks for having me, Dave. It's great to be here. >> All right, let's get right into it and start with the news. Can you give us a quick overview of the X9M announcement today? >> Yeah, glad to. So, we've had Exadata on the market for a little over a dozen years, and every year, as you mentioned, we make it better and better. And so this year we're introducing our X9M family of products, and as usual, we're making it better. We're making it better across all the different dimensions for OLTP, for analytics, lower costs, higher IOPs, higher throughputs, more capacity, so it's better all around, and we're introducing a lot of new software features as well that make it easier to use, more manageable, more highly available, more options for customers, more isolation, more workload consolidation, so it's our usual better and better every year. We're already way ahead of the competition in pretty much every metric you can name, but we're not sitting back. We have the pedal to the metal and we're keeping it there. >> Okay, so as always, you announced some big numbers. You're referencing them. I did in my upfront narrative. You've claimed double to triple digit performance improvements. Tell us, what's the secret sauce that allows you to achieve that magnitude of performance gain? >> Yeah, there's a lot of secret sauce in Exadata. First of all, we have custom designed hardware, so we design the systems from the top down, so it's not a generic system. It's designed to run database with a specific and sole focus of running database, and so we have a lot of technologies in there. Persistent memory is a really big one that we've introduced that enables super low response times for OLTP. The RoCE, the remote RDMA over convergency ethernet with a hundred gigabit network is a big thing, offload to storage servers is a big thing. The columnar processing of the storage is a huge thing, so there's a lot of secret sauce, most of it is software and hardware related and interesting about it, it's very unique. So we've been introducing more and more technologies and actually advancing our lead by introducing very unique, very effective technologies, like the ones I mentioned, and we're continuing that with our X9 generation. >> So that persistent memory allows you to do a right directly, atomic right directly to memory, and then what, you update asynchronously to the backend at some point? Can you double click on that a little bit? >> Yeah, so we use persistent memory as kind of the first tier of storage. And the thing about persistent memory is persistent. Unlike normal memory, it doesn't lose its contents when you lose power, so it's just as good as flash or traditional spinning disks in terms of storing data. And the integration that we do is we do what's called remote direct memory access, that means the hardware sends the new data directly into persistent memory and storage with no software, getting rid of all the software layers in between, and that's what enables us to achieve this extremely low latency. Once it's in persistent memory, it's stored. It's as good as being in flash or disc. So there's nothing else that we need to do. We do age things out of persistent memory to keep only hot data in there. That's one of the tricks that we do to make sure, because persistent memory is more expensive than flash or disc, so we tier it. So we age data in and out as it becomes hot, age it out as it becomes cold, but once it's in persistent memory, it's as good as being stored. It is stored. >> I love it. Flash is a slow tier now. So, (laughs) let's talk about what this-- >> Right, I mean persistent memory is about an order of magnitude faster. Flash is more than an order of magnitude faster than disk drive, so it is a new technology that provides big benefits, particularly for latency on OLTP. >> Great, thank you for that, okay, we'll get out of the plumbing. Let's talk about what this announcement means to customers. How does all this performance, and you got a lot of scale here, how does it translate into tangible results say, for a bank? >> Yeah, so there's a lot of ways. So, I mentioned performance is a big thing, always with Exadata. We're increasing the performance significantly for OLTP, analytics, so OLTP, 50, 60% performance improvements, analytics, 80% performance improvements in terms of costs, effectiveness, 30 to 60% improvement, so all of these things are big benefits. You know, one of the differences between a server product like Exadata and a consumer product is performance translates in the cost also. If I get a new smartphone that's faster, it doesn't actually reduce my costs, it just makes my experience a little better. But with a server product like Exadata, if I have 50% faster, I can translate that into I can serve 50% more users, 50% more workload, 50% more data, or I can buy a 50% smaller system to run the same workload. So, when we talk about performance, it also means lower costs, so if big customers of ours, like banks, telecoms, retailers, et cetera, they can take that performance and turn it into better response times. They can also take that performance and turn it into lower costs, and everybody loves both of those things, so both of those are big benefits for our customers. >> Got it, thank you. Now in a move that was maybe a little bit controversial, you stated flat out that you're not going to bother to compare Exadata cloud and customer performance against AWS Outposts and Azure Stack, rather you chose to compare to RDS, Redshift, Azure SQL. Why, why was that? >> Yeah, so our Exadata runs in the public cloud. We have Exadata that runs in Cloud@Customer, and we have Exadata that runs on Prem. And Azure and Azure Stack, they have something a little more similar to Cloud@Customer. They have where they take their cloud solutions and put them in the customer data center. So when we came out with our new X8, 9M Cloud@Customer, we looked at those technologies and honestly, we couldn't even come up with a good comparison with their equivalent, for example, AWS Outpost, because those products really just don't really run. For example, the two database products that Outposts promote or that Amazon promotes is Aurora for OLTP and Redshift for analytics. Well, those two can't even run at all on their Outposts product. So, it's kind of like beating up on a child or something. (laughs) It doesn't make sense. They're out of our weight class, so we're not even going to compare against them. So we compared what we run, both in public cloud and Cloud@Customer against their best product, which is the Redshifts and the Auroras in their public cloud, which is their most scalable available products. With their equivalent Cloud@Customer, not only does it not perform, it doesn't run at all. Their Premiere products don't run at all on those platforms. >> Okay, but RDS does, right? I think, and Redshift and Azure SQL, right, will run a their version, so you compare it against those. What were the results of the benchmarks when you did made those comparisons? >> Yeah, so compared against their public cloud or Cloud@Customer, we generally get results that are something like 50 times lower latency and close to a hundred times higher analytic throughput, so it's orders of magnitude. We're not talking 50%, we're talking 50 times, so compared to those products, there really is kind of, we're in a different league. It's kind of like they're the middle school little league and we're the professional team, so it's really dramatically different. It's not even in the same league. >> All right, now you also chose to compare the X9M performance against on-premises storage systems. Why and what were those results? >> Yeah, so with the on-premises, traditionally customers bought conventional storage and that kind of stuff, and those products have advanced quite a bit. And again, those aren't optimized. Those aren't designed to run database, but some customers have traditionally deployed those, you know, there's less and less these days, but we do get many times faster both on OLTP and analytic performance there, I mean, with analytics that can be up to 80 times faster, so again, dramatically better, but yeah, there's still a lot of on-premise systems, so we didn't want to ignore that fact and compare only to cloud products. >> So these are like to like in the sense that they're running the same level of database. You're not playing games in terms of the versioning, obviously, right? >> Actually, we're giving them a lot of the benefit. So we're taking their published numbers that aren't even running a database, and they use these low-level benchmarking tools to generate these numbers. So, we're comparing our full end-to-end database to storage numbers against their low-level IO tool that they've published in their data sheets, so again, we're trying to give them the benefit of the doubt, but we're still orders of magnitude better. >> Okay, now another claim that caught our attention was you said that 87% of the Fortune 100 organizations run Exadata, and you're claiming many thousands of other organizations globally. Can you paint a picture of the ICP, the Ideal Customer Profile for Exadata? What's a typical customer look like, and why do they use Exadata, Juan? >> Yeah, so the ideal customer is pretty straightforward, customers that care about data. That's pretty much it. (Dave laughs) If you care about data, if you care about performance of data, if you care about availability of data, if you care about manageability, if you care about security, those are the customers that should be looking strongly at Exadata, and those are the customers that are adopting Exadata. That's why you mentioned 87% of the global Fortune 100 have already adopted Exadata. If you look at a lot of industries, for example, pretty much every major bank almost in the entire world is running Exadata, and they're running it for their mission critical workloads, things like financial trading, regulatory compliance, user interfaces, the stuff that really matters. But in addition to the biggest companies, we also have thousands of smaller companies that run it for the same reason, because their data matters to them, and it's frankly the best platform, which is why we get chosen by these very, very sophisticated customers over and over again, and why this product has grown to encompass most of the major corporations in the world and governments also. >> Now, I know Deutsche bank is a customer, and I guess now an engineering partner from the announcement that I saw earlier this summer. They're using Cloud@Customer, and they're collaborating on things like security, blockchain, machine intelligence, and my inference is Deutsch Bank is looking to build new products and services that are powered by your platforms. What can you tell us about that? Can you share any insights? Are they going to be using X9M, for example? >> Yes, Deutsche Bank is a partnership that we announced a few months ago. It's a major partnership. Deutsche Bank is one of the biggest banks in the world. They traditionally are an on-premises customer, and what they've announced is they're going to move almost the entire database estate to our Exadata Cloud@Customer platform, so they want to go with a cloud platform, but they're big enough that they want to run it in their own data center for certain regulatory reasons. And so, the announcement that we made with them is they're moving the vast bulk of their data estate to this platform, including their core banking, regulatory applications, so their most critical applications. So, obviously they've done a lot of testing. They've done a lot of trials and they have the confidence to make this major transition to a cloud model with the Exadata Cloud@Customer solution, and we're also working with them to enhance that product and to work in various other fields, like you mentioned, machine learning, blockchain, that kind of project also. So it's a big deal when one of the biggest, most conservative, best respected financial institution in the world says, "We're going all in on this product," that's a big deal. >> Now outside of banking, I know a number of years ago, I stumbled upon an installation or a series of installations that Samsung found out about them as a customer. I believe it's now public, but they've something like 300 Exadatas. So help us understand, is it common that customers are building these kinds of Exadata farms? Is this an outlier? >> Yeah, so we have many large customers that have dozens to hundreds of Exadatas, and it's pretty simple, they start with one or two, and then they see the benefits, themselves, and then it grows. And Samsung is probably the biggest, most successful and most respected electronics company in the world. They are a giant company. They have a lot of different sub units. They do their own manufacturing, so manufacturing's one of their most critical applications, but they have lots of other things they run their Exadata for. So we're very happy to have them as one of our major customers that run Exadata, and by the way, Exadata again, very huge in electronics, in manufacturing. It's not just banking and that kind of stuff. I mean, manufacturing is incredibly critical. If you're a company like Samsung, that's your bread and butter. If your factory stops working, you have huge problems. You can't produce products, and you will want to improve the quality. You want to improve the tracking. You want to improve the customer service, all that requires a huge amount of data. Customers like Samsung are generating terabytes and terabytes of data per day from their manufacturing system. They track every single piece, everything that happens, so again, big deal, they care about data. They care deeply about data. They're a huge Exadata customer. That's kind of the way it works. And they've used it for many years, and their use is growing and growing and growing, and now they're moving to the cloud model as well. >> All right, so we talked about some big customers and Juan, as you know, we've covered Exadata since its inception. We were there at the announcement. We've always stressed the fit in our research with mission critical workloads, which especially resonates with these big customers. My question is how does Exadata resonate with the smaller customer base? >> Yeah, so we talk a lot about the biggest customers, because honestly they have the most critical requirements. But, at some level they have worldwide requirements, so if one of the major financial institutions goes down, it's not just them that's affected, that reverberates through the entire world. There's many other customers that use Exadata. Maybe their application doesn't stop the world, but it stops them, so it's very important to them. And so one of the things that we've introduced in our Cloud@Customer and public cloud Exadata platforms is the ability for Oracle to manage all the infrastructure, which enables smaller customers that don't have as much IT sophistication to adopt these very mission critical technology, so that's one of the big advancements. Now, we've always had smaller customers, but now we're getting more and more. We're getting universities, governments, smaller businesses adopting Exadata, because the cloud model for adopting is dramatically simpler. Oracle does all the administration, all the low-level stuff. They don't have to get involved in it at all. They can just use the data. And, on top of that comes our autonomous database, which makes it even easier for smaller customers to adapt. So Exadata, which some people think of as a very high-end platform in this cloud model, and particularly with autonomous databases is very accessible and very useful for any size customer really. >> Yeah, by all accounts, I wouldn't debate Exadata has been a tremendous success. But you know, a lot of customers, they still prefer to roll their own, do it themselves, and when I talk to them and ask them, "Okay, why is that?" They feel it limits their reliance on a single vendor, and it gives them better ability to build what I call a horizontal infrastructure that can support say non-Oracle workloads, so what do you tell those customers? Why should those customers run Oracle database on Exadata instead of a DIY infrastructure? >> Yeah, so that debate has gone on for a lot of years. And actually, what I see, there's less and less of that debate these days. You know, initially customers, many customers, they were used to building their own. That's kind of what they did. They were pretty good at it. What we have shown customers, and when we talk about these major banks, those are the kinds of people that are really good at it. They have giant IT departments. If you look at a major bank in the world, they have tens of thousands of people in their IT departments. These are gigantic multi-billion dollar organizations, so they were pretty good at this kind of stuff. And what we've shown them is you can't build this yourself. There's so much software that we've written to integrate with the database that you just can't build yourself, it's not possible. It's kind of like trying to build your own smartphone. You really can't do it, the scale, the complexity of the problem. And now as the cloud model comes in, customers are realizing, hey, all this attention to building my own infrastructure, it's kind of last decade, last century. We need to move on to more of an as a service model, so we can focus on our business. Let enterprises that are specialized in infrastructure, like Oracle that are really, really good at it, take care of the low-level details, and let me focus on things that differentiate me as a business. It's not going to differentiate them to establish their own storage for database. That's not a differentiator, and they can't do it nearly as well as we can, and a lot of that is because we write a lot of special technology and software that they just can't do themselves, it's not possible. It's just like you can't build your own smartphone. It's just really not possible. >> Now, another area that we've covered extensively, we were there at the unveiling, as well is ZDLRA, Zero Data Loss Recovery Appliance. We've always liked this product, especially for mission critical workloads, we're near zero data loss, where you can justify that. But while we always saw it as somewhat of a niche market, first of all, is that fair, and what's new with ZDLRA? >> Yeah ZDLRA has been in the market for a number of years. We have some of the biggest corporations in the world running on that, and one of the big benefits has been zero data loss, so again, if you care about data, you can't lose data. You can't restore to last night's backup if something happens. So if you're a bank, you can't restore everybody's data to last night. Suppose you made a deposit during the day. They're like, "Hey, sorry, Mr. Customer, your deposit, "well, we don't have any record of it anymore, "'cause we had to restore to last night's backup," you know, that doesn't work. It doesn't work for airlines. It doesn't work for manufacturing. That whole model is obsolete, so you need zero data loss, and that's why we introduced Zero Data Loss Recovery Appliance, and it's been very successful in the market. In addition to zero data loss, it actually provides much faster restore, much more reliable restores. It's more scalable, so it has a lot of advantages. With our X9M generation, we're introducing several new capabilities. First of all, it has higher capacity, so we can store more backups, keep data for longer. Another thing is we're actually dropping the price of the entry-level configuration of ZDLRA, so it makes it more affordable and more usable by smaller businesses, so that's a big deal. And then the other thing that we're hearing a lot about, and if you read the news at all, you hear a lot about ransomware. This is a major problem for the world, cyber criminals breaking into your network and taking the data ransom. And so we've introduced some, we call cyber vault capabilities in ZDLRA. They help address this ransomware issue that's kind of rampant throughout the world, so everybody's worried about that. There's now regulatory compliance for ransomware that particularly financial institutions have to conform to, and so we're introducing new capabilities in that area as well, which is a big deal. In addition, we now have the ability to have multiple ZDLRAs in a large enterprise, and if something happens to one, we automatically fail over backups to another. We can replicate across them, so it makes it, again, much more resilient with replication across different recovery appliances, so a lot of new improvements there as well. >> Now, is an air gap part of that solution for ransomware? >> No, air gap, you really can't have your back, if you're continuously streaming changes to it, you really can't have an air gap there, but you can protect the data. There's a number of technologies to protect the data. For example, one of the things that a cyber criminal wants to do is they want to take control of your data and then get rid of your backup, so you can't restore them. So as a simple example of one thing we're doing is we're saying, "Hey, once we have the data, "you can't delete it for a certain amount of days." So you might say, "For the 30 days, "I don't care who you are. "I don't care what privileges you have. "I don't care anything, I'm holding onto that data "for at least 30 days," so for example, a cyber criminal can't come in and say, "Hey, I'm going to get into the system "and delete that stuff or encrypt it," or something like that. So that's a simple example of one of the things that the cyber vault does. >> So, even as an administrator, I can't change that policy? >> That's right, that's one of the goals is doesn't matter what privileges you have, you can't change that policy. >> Does that eliminate the need for an air gap or would you not necessarily recommend, would you just have another layer of protection? What's your recommendation on that to customers? >> We always recommend multiple layers of protection, so for example, in our ZDLRA, we support, we offload tape backups directly from the appliance, so a great way to protect the data from any kind of thing is you put it on a tape, and guess what, once that tape drive is filed away, I don't care what cyber criminal you are, if you're remote, you can't access that data. So, we always promote multiple layers, multiple technologies to protect the data, and tape is a great way to do that. We can also now archive. In addition to tape, we can now archive to the public cloud, to our object storage servers. We can archive to what we call our ZFS appliance, which is a very low cost storage appliance, so there's a number of secondary archive copies that we offload and implement for customers. We make it very easy to do that. So, yeah, you want multiple layers of protection. >> Got it, okay, your tape is your ultimate air gap. ZDLRA is your low RPO device. You've got cloud kind of in the middle, maybe that's your cheap and deep solution, so you have some options. >> Juan: Yes. >> Okay, last question. Summarize the announcement, if you had to mention two or three takeaways from the X9M announcement for our audience today, what would you choose to share? >> I mean, it's pretty straightforward. It's the new generation. It's significantly faster for OLTP, for analytics, significantly better consolidation, more cost-effective. That's the big picture. Also there's a lot of software enhancements to make it better, improve the management, make it more usable, make it better disaster recovery. I talked about some of these cyber vault capabilities, so it's improved across all the dimensions and not in small ways, in big ways. We're talking 50% improvement, 80% improvements. That's a big change, and also we're keeping the price the same, so when you get a 50 or 80% improvement, we're not increasing the price to match that, so you're getting much better value as well. And that's pretty much what it is. It's the same product, even better. >> Well, I love this cadence that we're on. We love having you on these video exclusives. We have a lot of Oracle customers in our community, so we appreciate you giving us the inside scope on these announcements. Always a pleasure having you on theCUBE. >> Thanks for having me. It's always fun to be with you, Dave. >> All right, and thank you for watching. This is Dave Vellante for theCUBE, and we'll see you next time. (bright music)

(upbeat music) >> Thanks so much, and we're back here live. Live, I love saying that, at cloud city, at Mobile World Congress. Barcelona at the Fira. It's just been crazy here all week. We've been going wall to wall coverage. Am really excited to have John Savill here, as a principal cloud solutions architect at Microsoft. John, welcome to Barcelona, man. Come on in the cube. >> Oh yeah, thank you for having me. I'm not quite getting that Barcelona vibe here, but seems great. >> Well, you were just tell you look great. You just did an iron man up in Idaho, so awesome. Congratulations on completing that and many more in your future, I'm sure. You have a really interesting background. You know, in addition to your amazing cardiovascular capabilities. As a cloud architect, you've got a long history, 20 plus year history, you know, digging in at Microsoft. In your spare time you write books on architecture and you've got a great YouTube channel, a lot of subscribers. Tell us a little bit about that. >> Yeah, so it really started out 25 years ago. I was playing around with windows and technology and I just tried to share information. So I created a website artifact.com and I wrote magazine articles. And then people asked me to write some books and it's really evolved from there. And the most recent thing is actually the YouTube and I really enjoy doing the videos. It's a lot more rapid in terms of creating the content and sharing it, whereas the book takes six months. You'd write the book and then with technology moving as fast as it is, especially the cloud, you write a book on the cloud and then it's published and it's out on date. And so now this ability to create the content and get it to people a few minutes later, it's just phenomenal. So it's my hobby and my passion. And it's the best of both worlds for me. >> I love a CICD of books. Okay, Let's get into it. We've been talking all week about and actually drawing a lot of parallels with the traditional enterprise IT business and what's happening in Telco In one stop I just talking about the shifts in responsibilities for architects and the organizational roles, when you go from, you know, on-prem, everything's inside of a virtual machine, when you go to the cloud, there's a lot more optionality. As you just pointed out, things are a lot faster. What have you seen in your experience what's different? What should we be thinking about? >> Yeah, so exactly, as you said, it on premise really everything is a virtual machine. It's an OS that you have to manage, like the thing about the patching, the security, the policy. And then I have to put things inside this virtual machine, but that's my unit of work. Some coming to the site and look at containers on premises. And then they struggle with managing one even orchestrator. So I'm managing Kuberneters and ITs and there's work there. When you move to the cloud, you have all these other types of service. You think about serverless kind of at an end of a spectrum where, hey, I just have some code. I want to run based on some event, maybe a schedule, maybe a web hook, some trigger, some event happens. And I only pay for when it's doing work. But what I care about is my code or my focus is this is my code. I don't care about any of the other stuff that makes it work. I just can focus on my code, but you still have the options. I can do containers. I can do virtual machines if that's what I want to do. But my responsibility can really laser focus just on the business value. Generally as a company, I don't really care about managing an OS or patching, I want to see what differentiates my business from someone else. And when I moved to the cloud, I can shift my focus to just that business value and let the cloud vendor take care of the responsibility of keeping the things running, enables me to shift and just focus on value, which is key. >> And as a cloud vendor, that allows you to price by consumption in a very transparent way, and as a customer, now I know what I'm paying for and I can align that investment as you were just pointing out with the business value. >> Oh, absolutely. Right, so again, on premises, we have bits of equipment. We have this server, with memory and CPU, and generally we have different usage. We have peaks and we have lows. We have the same bit of hardware I'm paying for all of the time, we have disaster recovery. I'm paying for that all of the time. If I have customers all over the world, well, speed of light is speed of light. I have to wrap boxes all over the world in the cloud. I can have services dynamically scale based on the need, based on the work coming in. I can scale the amount of resource% I have available to meet that. So I'm optimizing my costs to only pay for what I actually need at any given moment. And of course we have regions all over the world. So suddenly now I can be super close to my customers. So its right, it completely changes how the companies can think about spending the money to only spend what they have to spend on what they want to spend it on. >> Yeah so the last decade clearly the aha moment for enterprise tech, just in terms of really understanding those benefits. And we saw it, you know, it actually first hit right around the financial crisis. When you know, all the CFOs said, "hey, shift your CapEx to OPEX immediately. And then we came out of that downturn and people said, "hey, this stuff, this cloud stuff actually is really good. Let's start to really change our business models around it." And, and there's a lot of relevance for Telco here. And you've talked about cloud as a, a flat layer, three network, what do you mean by that? >> Yes, if you think about on premises, you have bits of wire. Now that might be copper wire, it might be fiber, but you have these bits of wire that connects stuff. And I can think about connecting different bits of staff, to different network cards to enable me to separate systems and how they can communicate to each other and segregate. So that's how I've always thought about on premise is that why I separate stuff. A little bits of wire connecting different bits of network card. Well in the cloud, you don't have that. It's all software defined networking. If I think about a construct where I put my resources like a virtual network, it's just an IP of the layer three network there are no bits of wire. I can plug into different places. There are no different physical network cards. So we have to shift our thinking, and it can be very difficult. If I'm used to being an on-prem network admin, I'm used to the idea of the lines and cables and multiple nicks with different bits of copper plugged into them. When I go to the cloud, I have to shift that and think it is this flat layer three network. And when I want to segment things, now it's software defined networking walls, networks security groups, maybe botched appliances that can inspect the traffic. But it's a huge shift in thinking to how we now segregate and control how that networking actually functions. And of course, if you then want to extend that to hybrid connectivity, well, how does that then map to why my on-prem network? And I want to extend that to make it completely seamless into the cloud. >> Yeah, I don't want to come back to that, but I want to ask you about some of the organizational roles. 'Cause you've been at this for a couple of decades. So you've seen, you know, you remember the days of when you know, the expertise in managing a LAN a report was, you know, highly valued. It's not anymore. And so your colleagues, your peers in the industry, the architects that are your customers, they have to reinvent themselves. And that that's really now beginning to happen in Telco. So I wonder if you could talk about your thoughts, how you're thinking about cloud in telecom. >> Yeah, so I think what's happening is you still need skills. What shifts is, what is the type of skills you talked about LANs and managing storage. Well, you don't manage LANs anymore, but in the cloud, there's different types of storage service. There's different performance characteristics. IOPS throughput capacity. So we have to shift how we actually think about those skillings so I still need to architect accordingly. It's only to make sure I have the right characteristics, that it's just a different unit of work. I'm working with different tools now. And I think from a kind of telco perspective, they're really looking now, well, how can we leverage the cloud, Telcos in particular, have a huge pressure around very low latency. They have to be close to their customers. They deliver critical services. You can think about emergency services. They have to have super high availability. That's when you start moving to the cloud, they can now embrace the fact that well cloud has these various constructs like different physical structures within independent power calling communications. They have different regions, so I can be close my customers and kind of replicate between them. Through the Telco, you have to kind of firstly think about, well, okay, I still need to adhere to all of these core requirements. That quality of service, giving my customers a great experience, but now we have these different tools available in how we can actually deliver that. I think also a big shift is from a security perspective. I think especially Telcos love the idea of the network. The network is the be all and end all of security. When you start using the cloud network is still super important, but identity becomes this huge factor as well, because now I don't have this moat around my physical box. That copper wire doesn't have this disconnect. I'm in the cloud as so now we think about, well, how does the identity play into actually securing our resources? Because now we're going to have all these different cloud services that are going to talk to each other. We need to do that in a secure way. So the identity becomes this much bigger part of my architecture networks still super important, but now identity bumps up there as well. And I think that that's a key thing for Telcos is that there's a shift there. >> Yeah, well on speaking of shifts, a big conversation and Theme CubeCon this year was the shift left with security and designing security in. And really when you think about infrastructure as code, the programmable network, and you combine that with the cloud, I mean, Microsoft has gone through the greatest transformation of any tech company in the history of tech. And it did so with a cloud first mentality. And now you see that cloud expanding. It's clearly on prem you're bringing that you're connecting those, but now the edge. 5g networks and the it's very, you know, super exciting, you know, new compute architectures and new programming models. So this you're essentially building this abstraction layer that developers can really take advantage of having consistency across all those physical locations, really hiding the underlying complexity. I wonder if you could comment on that. >> Not, exactly. You're a 100% correct. So right Azure was a cloud service. So we had this cloud and we had services operating in that cloud, app services, data services, machine learning but you still have requirements for on-premises components. You talk about the edge. Well, hey, I may be, I'm using a private wireless network. I have my RAD, I have the core kind of packet switching components. Well, I still want things on premises then I need compute, I need workers running on my edge, close to where the data's being generated IOT sensors. What Azure has is yes, it has the public cloud services. Then it has things like Azure like edge, Azure stack hub, Azure like HCI that let me actually have things on premises in different form factors. But the can now run consistently like Azure services. I can manage them through Azure services, policy, security constructs, identity constructs, and then with things like if I have Kubernetes any kind of Kubernetes CNCF-compliant, I can actually now sync Azure arc, manage it through the cloud and I can deploy SQL manage instance, Postgres hyper-scale, machine learning, app services, serverless functions now running on-prem. So as a developer, as an architect, I create my solution, but now I can run it in the cloud, I can run it on premises. I don't have to make that conscious decision and do things differently. If my requirements change, I can move or do hybrid. So it really is a game changer. The customer gets the choice. I can leverage these technologies. I can write code and architect solutions and then run it where makes the most sense for me. >> Yeah, and we just got a couple of minutes here, just as we saw new applications emerge in the cloud, we're going to see new applications emerge at the edge. The developers will win the edge, I've said it many times. I'll give you the last thoughts, John. >> No, I just think it's a, it's an amazing, exciting time. I mean, you talked about kind of the whole shift left more and more companies are moving into kind of the whole infrastructures code and the dev ops models. And now we see security embedded all the way at the start of our pipeline. But I really just think this is the time now as a customer, as a Telco, you do have this fantastic set of capabilities available to you in the cloud, but you're always going to have, I think that on-premise is component as well. So you don't have to compromise. I don't have to say, well, I'd love to use this service, but wow, I had this anchor or I had this requirement on prem. I can use the same services. You have that complete choice. You can operate in the same way, the same pipelines, the same dev ops, the same security and one where it makes the most sense for you. I mean, it's a fantastic time. >> Well, John, thanks so much for virtually coming into Barcelona. We've got this great hybrid event, good luck in your career and in your Ironman competitions, all the best to you. Thank you. >> Thank you for having me, the pleasure. >> It's been our pleasure. So we're here, live at the, the Fira in Barcelona. We're in Cloud City. I'll tell you, I'll set it up. It's not like jammed packed where you can't move, you know, good thing we're in, still in the COVID, but it's like the post isolation economy here, but we're really excited to be sharing with you. We're going to go back to the studio to Adam Burns right now.

>>from around the globe. It's the Cube presenting Cuban Cloud brought to you by Silicon Angle. Welcome back to the live segment of the Cuban cloud. I'm Dave, along with my co host, John Ferrier. John Rose is here. He's the global C T o Dell Technologies. John, great to see you as always, Really appreciate >>it. Absolutely good to know. >>Hey, so we're gonna talk edge, you know, the the edge, it's it's estimated. It's a multi multi trillion dollar opportunity, but it's a highly fragmented, very complex. I mean, it comprises from autonomous vehicles and windmills, even retail stores outer space. And it's so it brings in a lot of really gnarly technical issues that we want to pick your brain on. Let me start with just what to you is edge. How do you think about >>it? Yeah, I think I mean, I've been saying for a while that edges the when you reconstitute Ike back out in the real world. You know, for 10 years we've been sucking it out of the real world, taking it out of factories, you know, nobody has an email server under their desk anymore. On that was because we could put it in data centers and cloud public clouds, and you know that that's been a a good journey. And then we realized, Wait a minute, all the data actually was being created out in the real world. And a lot of the actions that have to come from that data have to happen in real time in the real world. And so we realized we actually had toe reconstitute a nightie capacity out near where the data is created, consumed and utilized. And, you know, that turns out to be smart cities, smart factories. You know, uh, we're dealing with military apparatus. What you're saying, how do you put, you know, edges in tow, warfighting theaters or first responder environments? It's really anywhere that data exists that needs to be processed and understood and acted on. That isn't in a data center. So it's kind of one of these things. Defining edge is easier to find. What it isn't. It's anywhere that you're going to have. I t capacity that isn't aggregated into a public or private cloud data center. That seems to be the answer. So >>follow. Follow that. Follow the data. And so you've got these big issue, of course, is late and see people saying, Well, some applications or some use cases like autonomous vehicles. You have to make the decision locally. Others you can you can send back. And you, Kamal, is there some kind of magic algorithm the technical people used to figure out? You know what, the right approaches? Yeah, >>the good news is math still works and way spent a lot of time thinking about why you build on edge. You know, not all things belong at the edge. Let's just get that out of the way. And so we started thinking about what does belong at the edge, and it turns out there's four things you need. You know, if you have a real time responsiveness in the full closed loop of processing data, you might want to put it in an edge. But then you have to define real time, and real time varies. You know, real time might be one millisecond. It might be 30 milliseconds. It might be 50 milliseconds. It turns out that it's 50 milliseconds. You probably could do that in a co located data center pretty far away from those devices. One millisecond you better be doing it on the device itself. And so so the Leighton see around real time processing matters. And, you know, the other reasons interesting enough to do edge actually don't have to do with real time crossing they have to do with. There's so much data being created at the edge that if you just blow it all the way across the Internet, you'll overwhelm the Internets. We have need toe pre process and post process data and control the flow across the world. The third one is the I T. O T boundary that we all know. That was the I O t. Thing that we were dealing with for a long time. And the fourth, which is the fascinating one, is it's actually a place where you might want to inject your security boundaries, because security tends to be a huge problem and connected things because they're kind of dumb and kind of simple and kind of exposed. And if you protect them on the other end of the Internet, the surface area of protecting is enormous, so there's a big shift basically move security functions to the average. I think Gardner made up a term for called Sassy. You know, it's a pretty enabled edge, but these are the four big ones. We've actually tested that for probably about a year with customers. And it turns out that, you know, seems to hold If it's one of those four things you might want to think about an edge of it isn't it probably doesn't belong in >>it. John. I want to get your thoughts on that point. The security things huge. We talked about that last time at Del Tech World when we did an interview with the Cube. But now look at what's happened. Over the past few months, we've been having a lot of investigative reporting here at Silicon angle on the notion of misinformation, not just fake news. Everyone talks about that with the election, but misinformation as a vulnerability because you have now edge devices that need to be secured. But I can send misinformation to devices. So, you know, faking news could be fake data say, Hey, Tesla, drive off the road or, you know, do this on the other thing. So you gotta have the vulnerabilities looked at and it could be everything. Data is one of them. Leighton. See secure. Is there a chip on the device? Could you share your vision on how you see that being handled? Cause it's a huge >>problem. Yeah, this is this is a big deal because, you know, what you're describing is the fact that if data is everything, the flow of data ultimately turns into the flow of information that knowledge and wisdom and action. And if you pollute the data, if you could compromise it the most rudimentary levels by I don't know, putting bad data into a sensor or tricking the sensor which lots of people can dio or simulating a sensor, you can actually distort things like a I algorithms. You can introduce bias into them and then that's a That's a real problem. The solution to it isn't making the sensors smarter. There's this weird Catch 22 when you sense arise the world, you know you have ah, you know, finite amount of power and budget and the making sensors fatter and more complex is actually the wrong direction. So edges have materialized from that security dimension is an interesting augment to those connected things. And so imagine a world where you know your sensor is creating data and maybe have hundreds or thousands of sensors that air flowing into an edge compute layer and the edge compute layer isn't just aggregating it. It's putting context on it. It's metadata that it's adding to the system saying, Hey, that particular stream of telemetry came from this device, and I'm watching that device and Aiken score it and understand whether it's been compromised or whether it's trustworthy or whether it's a risky device and is that all flows into the metadata world the the overall understanding of not just the data itself, but where did it come from? Is it likely to be trustworthy? Should you score it higher or lower in your neural net to basically manipulate your algorithm? These kind of things were really sophisticated and powerful tools to protect against this kind of injection of false information at the sensor, but you could never do that at a sensor. You have to do it in a place that has more compute capacity and is more able to kind of enriched the data and enhance it. So that's why we think edges are important in that fourth characteristic of they aren't the security system of the sensor itself. But they're the way to make sure that there's integrity in the sense arised world before it reaches the Internet before it reaches the cloud data centers. >>So access to that metadata is access to the metadata is critical, and it's gonna be it's gonna be near real time, if not real time, right? >>Yeah, absolutely. And, you know, the important thing is, Well, I'll tell you this. You know, if you haven't figured this out by looking at cybersecurity issues, you know, compromising from the authoritative metadata is a really good compromise. If you could get that, you can manipulate things that a scale you've never imagined. Well, in this case, if the metadata is actually authoritatively controlled by the edge note the edge note is processing is determining whether or not this is trustworthy or not. Those edge nodes are not $5 parts, their servers, their higher end systems. And you can inject a lot more sophisticated security technology and you can have hardware root of trust. You can have, you know, mawr advanced. PK I in it, you can have a I engines watching the behavior of it, and again, you'd never do that in a sensor. But if you do it at the first step into the overall data pipeline, which is really where the edges materializing, you can do much more sophisticated things to the data. But you can also protect that thing at a level that you'd never be able to do to protect a smart lightbulb. A thermostat in your house? >>Uh, yes. So give us the playbook on how you see the evolution of the this mark. I'll see these air key foundational things, a distributed network and it's a you know I o t trends into industrial i o t vice versa. As a software becomes critical, what is the programming model to build the modern applications is something that I know. You guys talk to Michael Dell about this in the Cuban, everyone, your companies as well as everyone else. Its software define everything these days, right? So what is the software framework? How did people code on this? What's the application aware viewpoint on this? >>Yeah, this is, uh, that's unfortunately it's a very complex area that's got a lot of dimensions to it. Let me let me walk you through a couple of them in terms of what is the software framework for for For the edge. The first is that we have to separate edge platforms from the actual edge workload today too many of the edge dialogues or this amorphous blob of code running on an appliance. We call that an edge, and the reality is that thing is actually doing two things. It's, ah, platform of compute out in the real world and it's some kind of extension of the cloud data pipeline of the cloud Operating model. Instance, he added, A software probably is containerized code sitting on that edge platform. Our first principle about the software world is we have to separate those two things. You do not build your cloud your edge platform co mingled with the thing that runs on it. That's like building your app into the OS. That's just dumb user space. Colonel, you keep those two things separate. We have Thio start to enforce that discipline in the software model at the edges. The first principle, the second is we have to recognize that the edges are are probably best implemented in ways that don't require a lot of human intervention. You know, humans air bad when it comes to really complex distributed systems. And so what we're finding is that most of the code being pushed into production benefits from using things like kubernetes or container orchestration or even functional frameworks like, you know, the server list fast type models because those low code architectures generally our interface with via AP, eyes through CCD pipelines without a lot of human touch on it. And it turns out that, you know, those actually worked reasonably well because the edges, when you look at them in production, the code actually doesn't change very often, they kind of do singular things relatively well over a period of time. And if you can make that a fully automated function by basically taking all of the human intervention away from it, and if you can program it through low code interfaces or through automated interfaces, you take a lot of the risk out of the human intervention piece of this type environment. We all know that you know most of the errors and conditions that break things are not because the technology fails it because it's because of human being touches it. So in the software paradigm, we're big fans of more modern software paradigms that have a lot less touch from human beings and a lot more automation being applied to the edge. The last thing I'll leave you with, though, is we do have a problem with some of the edge software architectures today because what happened early in the i o t world is people invented kind of new edge software platforms. And we were involved in these, you know, edge X foundry, mobile edge acts, a crane. Oh, and those were very important because they gave you a set of functions and capabilities of the edge that you kind of needed in the early days. Our long term vision, though for edge software, is that it really needs to be the same code base that we're using in data centers and public clouds. It needs to be the same cloud stack the same orchestration level, the same automation level, because what you're really doing at the edge is not something that spoke. You're taking a piece of your data pipeline and you're pushing it to the edge and the other pieces are living in private data centers and public clouds, and you like they all operate under the same framework. So we're big believers in, like pushing kubernetes orchestration all the way to the edge, pushing the same fast layer all the way to the edge. And don't create a bespoke world of the edge making an extension of the multi cloud software framework >>even though the underlying the underlying hardware might change the microprocessor, GPU might change GP or whatever it is. Uh, >>by the way, that that's a really good reason to use these modern framework because the energies compute where it's not always next 86 underneath it, programming down at the OS level and traditional languages has an awful lot of hardware dependencies. We need to separate that because we're gonna have a lot of arm. We're gonna have a lot of accelerators a lot of deep. Use a lot of other stuff out there. And so the software has to be modern and able to support header genius computer, which a lot of these new frameworks do quite well, John. >>Thanks. Thanks so much for for coming on, Really? Spending some time with us and you always a great guest to really appreciate it. >>Going to be a great stuff >>of a technical edge. Ongoing room. Dave, this is gonna be a great topic. It's a clubhouse room for us. Well, technical edge section every time. Really. Thanks >>again, Jon. Jon Rose. Okay, so now we're gonna We're gonna move to the second part of our of our technical edge discussion. Chris Wolf is here. He leads the advanced architecture group at VM Ware. And that really means So Chris's looks >>at I >>think it's three years out is kind of his time. Arise. And so, you know, advanced architecture, Er and yeah. So really excited to have you here. Chris, can you hear us? >>Okay. Uh, >>can Great. Right. Great to see you again. >>Great >>to see you. Thanks for coming on. Really appreciate it. >>So >>we're talking about the edge you're talking about the things that you see way set it up is a multi trillion dollar opportunity. It's It's defined all over the place. Uh, Joey joke. It's Could be a windmill. You know, it could be a retail store. It could be something in outer space. Its's It's it's, you know, whatever is defined A factory, a military installation, etcetera. How do you look at the edge. And And how do you think about the technical evolution? >>Yeah, I think it is. It was interesting listening to John, and I would say we're very well aligned there. You know, we also would see the edge is really the place where data is created, processed and are consumed. And I think what's interesting here is that you have a number off challenges in that edges are different. So, like John was talking about kubernetes. And there's there's multiple different kubernetes open source projects that are trying to address thes different edge use cases, whether it's K three s or Cubbage or open your it or super edge. And I mean the list goes on and on, and the reason that you see this conflict of projects is multiple reasons. You have a platform that's not really designed to supported computing, which kubernetes is designed for data center infrastructure. Uh, first on then you have these different environments where you have some edge sites that have connectivity to the cloud, and you have some websites that just simply don't write whether it's an oil rig or a cruise ship. You have all these different use cases, so What we're seeing is you can't just say this is our edge platform and, you know, go consume it because it won't work. You actually have to have multiple flavors of your edge platform and decide. You know what? You should time first. From a market perspective, I >>was gonna ask you great to have you on. We've had many chest on the Cube during when we actually would go to events and be on the credit. But we appreciate you coming into our virtual editorial event will be doing more of these things is our software will be put in the work to do kind of a clubhouse model. We get these talks going and make them really valuable. But this one is important because one of the things that's come up all day and we kind of introduced earlier to come back every time is the standardization openness of how open source is going to extend out this this interoperability kind of vibe. And then the second theme is and we were kind of like the U S side stack come throwback to the old days. Uh, talk about Cooper days is that next layer, but then also what is going to be the programming model for modern applications? Okay, with the edge being obviously a key part of it. What's your take on that vision? Because that's a complex area certain a lot of a lot of software to be written, still to come, some stuff that need to be written today as well. So what's your view on How do you programs on the edge? >>Yeah, it's a It's a great question, John and I would say, with Cove it We have seen some examples of organizations that have been successful when they had already built an edge for the expectation of change. So when you have a truly software to find edge, you can make some of these rapid pivots quite quickly, you know. Example was Vanderbilt University had to put 1000 hospital beds in a parking garage, and they needed dynamic network and security to be able to accommodate that. You know, we had a lab testing company that had to roll out 400 testing sites in a matter of weeks. So when you can start tohave first and foremost, think about the edge as being our edge. Agility is being defined as you know, what is the speed of software? How quickly can I push updates? How quickly can I transform my application posture or my security posture in lieu of these types of events is super important. Now, if then if we walk that back, you know, to your point on open source, you know, we see open source is really, uh you know, the key enabler for driving edge innovation and driving in I S V ecosystem around that edge Innovation. You know, we mentioned kubernetes, but there's other really important projects that we're already seeing strong traction in the edge. You know, projects such as edge X foundry is seeing significant growth in China. That is, the core ejects foundry was about giving you ah, pass for some of your I o T aps and services. Another one that's quite interesting is the open source faith project in the Linux Foundation. And fate is really addressing a melody edge through a Federated M L model, which we think is the going to be the long term dominant model for localized machine learning training as we continue to see massive scale out to these edge sites, >>right? So I wonder if you could You could pick up on that. I mean, in in thinking about ai influencing at the edge. Um, how do you see that? That evolving? Uh, maybe You know what, Z? Maybe you could We could double click on the architecture that you guys see. Uh, progressing. >>Yeah, Yeah. Right now we're doing some really good work. A zai mentioned with the Fate project. We're one of the key contributors to the project. Today. We see that you need to expand the breath of contributors to these types of projects. For starters, uh, some of these, what we've seen is sometimes the early momentum starts in China because there is a lot of innovation associated with the edge there, and now it starts to be pulled a bit further West. So when you look at Federated Learning, we do believe that the emergence of five g I's not doesn't really help you to centralized data. It really creates the more opportunity to create, put more data and more places. So that's, you know, that's the first challenge that you have. But then when you look at Federated learning in general, I'd say there's two challenges that we still have to overcome organizations that have very sophisticated data. Science practices are really well versed here, and I'd say they're at the forefront of some of these innovations. But that's 1% of enterprises today. We have to start looking at about solutions for the 99% of enterprises. And I'd say even VM Ware partners such as Microsoft Azure Cognitive Services as an example. They've been addressing ML for the 99%. I say That's a That's a positive development. When you look in the open source community, it's one thing to build a platform, right? Look, we love to talk about platforms. That's the easy part. But it's the APS that run on that platform in the services that run on that platform that drive adoption. So the work that we're incubating in the VM, or CTO office is not just about building platforms, but it's about building the applications that are needed by say that 99% of enterprises to drive that adoption. >>So if you if you carry that through that, I infer from that Chris that the developers are ultimately gonna kind of win the edge or define the edge Um, How do you see that From their >>perspective? Yeah, >>I think its way. I like to look at this. I like to call a pragmatic Dev ops where the winning formula is actually giving the developer the core services that they need using the native tools and the native AP eyes that they prefer and that is predominantly open source. It would some cloud services as they start to come to the edge as well. But then, beyond that, there's no reason that I t operations can't have the tools that they prefer to use. A swell. So we see this coming together of two worlds where I t operations has to think even for differently about edge computing, where it's not enough to assume that I t has full control of all of these different devices and sensors and things that exists at the edge. It doesn't happen. Often times it's the lines of business that air directly. Deploying these types of infrastructure solutions or application services is a better phrase and connecting them to the networks at the edge. So what does this mean From a nightie operations perspective? We need tohave, dynamic discovery capabilities and more policy and automation that can allow the developers to have the velocity they want but still have that consistency of security, agility, networking and all of the other hard stuff that somebody has to solve. And you can have the best of both worlds here. >>So if Amazon turned the data center into an A P I and then the traditional, you know, vendors sort of caught up or catching up and trying to do in the same premise is the edge one big happy I Is it coming from the cloud? Is it coming from the on Prem World? How do you see that evolving? >>Yes, that's the question and races on. Yeah, but it doesn't. It doesn't have to be exclusive in one way or another. The VM Ware perspective is that, you know, we can have a consistent platform for open source, a consistent platform for cloud services. And I think the key here is this. If you look at the partnerships we've been driving, you know, we've on boarded Amazon rds onto our platform. We announced the tech preview of Azure Arc sequel database as a service on our platform as well. In addition, toe everything we're doing with open source. So the way that we're looking at this is you don't wanna make a bet on an edge appliance with one cloud provider. Because what happens if you have a business partner that says I am a line to Google or on the line to AWS? So I want to use this open source. Our philosophy is to virtualized the edge so that software can dictate, you know, organizations velocity at the end of the day. >>Yeah. So, Chris, you come on, you're you're an analyst at Gartner. You know us. Everything is a zero sum game, but it's but But life is not like that, right? I mean, there's so much of an incremental opportunity, especially at the edge. I mean, the numbers are mind boggling when when you look at it, >>I I agree wholeheartedly. And I think you're seeing a maturity in the vendor landscape to where we know we can't solve all the problems ourselves and nobody can. So we have to partner, and we have to to your earlier point on a P. I s. We have to build external interfaces in tow, our platforms to make it very easy for customers have choice around ice vendors, partners and so on. >>So, Chris, I gotta ask you since you run the advanced technology group in charge of what's going on there, will there be a ship and focus on mawr ships at the edge with that girl singer going over to intel? Um, good to see Oh, shit, so to speak. Um, all kidding aside, but, you know, patch leaving big news around bm where I saw some of your tweets and you laid out there was a nice tribute, pat, but that's gonna be cool. That's gonna be a didn't tell. Maybe it's more more advanced stuff there. >>Yeah, I think >>for people pats staying on the VMRO board and to me it's it's really think about it. I mean, Pat was part of the team that brought us the X 86 right and to come back to Intel as the CEO. It's really the perfect book end to his career. So we're really sad to see him go. Can't blame him. Of course it's it's a It's a nice chapter for Pat, so totally understand that. And we prior to pack going to Intel, we announced major partnerships within video last year, where we've been doing a lot of work with >>arm. So >>thio us again. We see all of this is opportunity, and a lot of the advanced development projects were running right now in the CTO office is about expanding that ecosystem in terms of how vendors can participate, whether you're running an application on arm, whether it's running on X 86 or whatever, it's running on what comes next, including a variety of hardware accelerators. >>So is it really? Is that really irrelevant to you? I mean, you heard John Rose talk about that because it's all containerized is it is. It is a technologies. Is it truly irrelevant? What processor is underneath? And what underlying hardware architectures there are? >>No, it's not. You know it's funny, right? Because we always want to say these things like, Well, it's just a commodity, but it's not. You didn't then be asking the hardware vendors Thio pack up their balls and go home because there's just nothing nothing left to do, and we're seeing actually quite the opposite where there's this emergence and variety of so many hardware accelerators. So even from an innovation perspective, for us. We're looking at ways to increase the velocity by which organizations can take advantage of these different specialized hardware components, because that's that's going to continue to be a race. But the real key is to make it seamless that an application could take advantage of these benefits without having to go out and buy all of this different hardware on a per application basis. >>But if you do make bets, you can optimize for that architecture, true or not, I mean, our estimate is that the you know the number of wafer is coming out of arm based, you know, platforms is 10 x x 86. And so it appears that, you know, from a cost standpoint, that's that's got some real hard decisions to make. Or maybe maybe they're easy decisions, I don't know. But so you have to make bets, Do you not as a technologist and try to optimize for one of those architectures, even though you have to hedge those bets? >>Yeah, >>we do. It really boils down to use cases and seeing, you know, what do you need for a particular use case like, you know, you mentioned arm, you know, There's a lot of arm out at the edge and on smaller form factor devices. Not so much in the traditional enterprise data center today. So our bets and a lot of the focus there has been on those types of devices. And again, it's it's really the It's about timing, right? The customer demand versus when we need to make a particular move from an innovation >>perspective. It's my final question for you as we wrap up our day here with Great Cuban Cloud Day. What is the most important stories in in the cloud tech world, edge and or cloud? And you think people should be paying attention to that will matter most of them over the next few years. >>Wow, that's a huge question. How much time do we have? Not not enough. A >>architect. Architectural things. They gotta focus on a lot of people looking at this cove it saying I got to come out with a growth strategy obvious and clear, obvious things to see Cloud >>Yeah, yeah, let me let me break it down this way. I think the most important thing that people have to focus on >>is deciding How >>do they when they build architectures. What does the reliance on cloud services Native Cloud Services so far more proprietary services versus open source technologies such as kubernetes and the SV ecosystem around kubernetes. You know, one is an investment in flexibility and control, lots of management and for your intellectual property, right where Maybe I'm building this application in the cloud today. But tomorrow I have to run it out at the edge. Or I do an acquisition that I just wasn't expecting, or I just simply don't know. Sure way. Sure hope that cova doesn't come around again or something like it, right as we get past this and navigate this today. But architect ng for the expectation of change is really important and having flexibility of round your intellectual property, including flexibility to be able to deploy and run on different clouds, especially as you build up your different partnerships. That's really key. So building a discipline to say you know what >>this is >>database as a service, it's never going to define who I am is a business. It's something I have to do is an I T organization. I'm consuming that from the cloud This part of the application sacked that defines who I am is a business. My active team is building this with kubernetes. And I'm gonna maintain more flexibility around that intellectual property. The strategic discipline to operate this way among many of >>enterprise customers >>just hasn't gotten there yet. But I think that's going to be a key inflection point as we start to see. You know, these hybrid architectures continue to mature. >>Hey, Chris. Great stuff, man. Really appreciate you coming on the cube and participate in the Cuban cloud. Thank you for your perspectives. >>Great. Thank you very much. Always a pleasure >>to see you. >>Thank you, everybody for watching this ends the Cuban Cloud Day. Volonte and John Furry. All these sessions gonna be available on demand. All the write ups will hit silicon angle calm. So check that out. We'll have links to this site up there and really appreciate you know, you attending our our first virtual editorial >>event again? >>There's day Volonte for John Ferrier in the entire Cube and Cuba and Cloud Team >>Q 3 65. Thanks >>for watching. Mhm

>> Narrator: From around the globe, it's theCUBE, with coverage of the Global .NEXT digital experience. Brought to you by Nutanix. >> Hi, I'm Stu Miniman. And welcome to theCUBE's coverage of the Nutanix .NEXT global digital experience. We've been at the Nutanix shows since the first time they ever happened, way back at the Fontainebleau, in Miami, of course. Nutanix is now a public company. A lot of news, a lot going on, and the first time they've done, first, a global event and digital event because this was the convergence of the events that they were originally going to have both in North America as well as Europe. So happy to welcome back to the program. To help kick it off, first of all, we have Monica Kumar, she's the Senior Vice President of Marketing with Nutanix. And also joining us is Virginia Gambale, she is a Managing Partner at Azimuth Partners LLC and also a board member of Nutanix. Virginia, Monica, thanks so much for joining us. >> Thank you so much for having us. >> Thank you, Stu. >> So the event here, of course, the line we've used at many of those shows is, how do we bring people together even while we're apart? Good energy, great speakers, everything from Dr. Condoleezza Rice and Simon Sinek, in the opening, in Trevor Noah for some entertainment in day two, and lots of announcements with partners, customers, of course, speaking, and lots of the Nutants. So, Monica, maybe I start with you. You've had a very a close role in helping to shape a lot of what's going on here. I kind of teed up. Give us, from your standpoint, really, kind of the goals, give us a little bit of insight into putting this together for an online audience versus the kind of party that we have for the users when they come together in-person. >> Yeah, thank you so much, Stu. And I'm so excited to have Virginia here with us as well. You know, obviously, the world is so different now. And one of the biggest things that we've been doing for the last six, seven months is figuring out how do we stay connected with our customers, with our partners, with our own employees, and society at large? So, along the same lines, .NEXT has evolved to, of course, also being a virtual event, but at the same time, the biggest design factor for .NEXT is really the connection with customers, partners, our own employees, and influencers, and society at large. So you'll see a lot of our agenda is designed around future of work and what does it mean to be a leader and a technology leader, a technology provider in this world while we are living through the pandemic. We're also talking about future of education, future of healthcare, future financial services, all the things that matter to us as human beings, and then what's the role that technology is going to play in that, and, of course, how can Nutanix as a technology vendor help our customers navigate these uncertain times. So that's how most of our content is on day-one. And then day-two is really all about the latest and greatest cool tech. And you're going to hear a lot about and you've heard a lot about cloud technology and cloud being that constant enabler of innovation for businesses and for IT. So all of our hybrid cloud, multicloud, our core hyperconverged infrastructure, and how that's evolving to hybrid cloud infrastructure, it's about platform as a service, DevOps, I mean, database solutions, and these are competing solutions, you name it. So that's going to be at day-two. And then day-three is a partner exchange. So, obviously, partners are really important to us. That's the village, the ecosystem. And we have a whole day dedicated to our partners in helping understand how can we together bring the best solutions to market. >> Virginia, I'd love to get your experience so far with the event that you've attended. >> Well, I always find that .NEXT experiences a very broadening, enriching experience. I tell people who have never heard of cloud, who are well in the cloud, who are wanting to just learn about it, just sort of standing at the precipice of embarking on this journey, to watch or participate or go to the .NEXT for Nutanix, because it is so rich with content and speakers that are so intelligent about an experience about what they are doing and embarking on. And then in addition to that, there's always a hint and a lookout at the future and where we are going and where we need to think about where we are going. So I am very excited. The first part of this virtual .NEXT, I didn't know what to expect, but I am extremely pleased. >> Well, yeah, Virginia, you bring up a really good point. It's not just the cool technology, and there's lots of that, but what, personally, how do I enrich myself, how do I reach my career, how do enrich my community, that heart that Nutanix talks a lot about. Monica, obviously cloud has been a very important piece of the discussion. I noticed a little bit of shift in marketing. For a couple of years, the enterprise cloud was the discussion. Dheeraj's teams is out, he said, "Okay, we're going to change HCI from hyperconverged infrastructure to hybrid cloud infrastructure." You and I had had a conversation when the announcement of Nutanix Clusters with AWS, and at the show, Scott Guthrie, of course, wearing the signature red polo, and deeper partnership with Microsoft for Azure. Definitely, lots of excitement around that because Microsoft is a company that most people partner with and work with and use their technologies. And things like Azure Arc have the real promise to help us live in this hybrid and multicloud world. So we'd love to just briefly touch on the cloud pieces, what you're seeing in the news from Nutanix's standpoint? >> Absolutely. So one of the big pieces of news that's come out of .NEXT is a partnership with Azure, and we are super-excited for that partnership. Not only is Nutanix Clusters going to be available on Azure and we are jointly developing that solution to bring hybrid cloud solution to customers, you rightfully mentioned Azure Arc, we are also working to integrate Azure Arc across on-premises and Azure cloud. So, ultimately, for us, it's really about technology being a means to an end. The end is business outcomes for our customers, the end is a better customer experience, better employee experience, growth for the company in terms of revenue and profitability. And ultimately, that's what technology is doing, is really simplifying the use of cloud technology and build that hybrid cloud fabric that customers can deploy very quickly, very easily, seamlessly, and then manage it very easily, oh, and by the way, also be able to move their apps and data and license across the on-premises and, in this case, Azure environment. So very excited. By the way, we don't just stop there. When you say cloud, and when we say hybrid cloud and multicloud, it's, of course, on-premises, it's, of course, the hyperscaler clouds, but then there are service provider clouds. Because in region, and then, by the way, I don't know if you heard Khaled Soudani, he's the CTO at SocGen, he joined us as well in one of the keynotes, and obviously, they are building hybrid clouds. And when we talk about hybrid cloud to customers, it's also service provider cloud, which could be for data locality, data residency regions. It's also Nutanix's own cloud, the Nutanix cloud. So that's definitely one of the big pieces of news coming out of .NEXT, is this morphing or I would say evolution of hyperconverged infrastructure to becoming the hybrid cloud infrastructure. >> Virginia, of course, the big discussion this year has been the impact of COVID and what that's meant to IT priorities, CIO priorities. In a lot of the conversations we've been having on theCUBE this year, there's been a real acceleration on a lot of those cloud initiatives that Monica was talking about. So what are you hearing? What are you seeing? What are some of those imperatives that are either accelerating or, and are there some things that people are saying, "Hey, we might want to put this on ice for a few months?" >> Well, I can tell you, from my work with clients, the many public boards that I sit on, which span from financial services, to pure tech, all the way through to consumer-facing businesses, I really see the spectrum. And three years ago, when I was on theCUBE, we were talking about standing at the precipice and jumping in. Now, we are full on, we are in it. And Monica talked about all these different public clouds and the various providers who are leading their own way. But what I love and I think it's really important is that we need an independent company that actually begins to step back and help all the leaders that are running technology and operations and customer-facing functions, to be able to help them do their job. So here we are today, talking to various CEOs and C-suite executives. And the big issues are, "Okay, this stuff isn't so scary, we are in it, we need it for being able to function in the COVID world, and we also need it because our customers need us to need this, to have it." So, when we look at our portfolio of how businesses are investing in technology and other areas going forward, innovation, cost management, and also cyber seemed to be sort of the three very important themes of the day. And I believe that, today, as we sit through the next few days with .NEXT, we are really going to find stories, experiences, and visions about how we can actually address all three of those. >> Yeah, I think the point, Virginia, you're making is so fantastic, that this is the age of innovation while organizations also have to focus on cost intelligence. And that's the number one thing we're hearing from our customers. I mean, like when you were talking, it just reminded me, in the old days and maybe even up to five years ago, and the CIOs were all about knowing technology knowhow and managing costs, and like it was a cost center. But now you look at IT, IT is at the forefront of driving innovation. IT is at the forefront of adopting cloud. But at the same time, IT is also tasked with being smart about cost optimization. So you're right, that's exactly what we're also going to discuss the .NEXT, is how can technology help our customers innovate and, at the same time, be intelligent about cost optimization and which cloud to use for which workloads, for example. >> Yes, and also having the flexibility and the optionality to be able to put these things together. >> Well, yeah, Monica, simplicity was always at the core of what Nutanix did. And talking about the hybrid cloud solutions, it's very important you talk about the fact that it's the same operational model wherever things lived. The one piece that you didn't cover yet, that Virginia teed up, cyber security. So, absolutely, we would need innovation, we need to look at costs, but security is something that went from, it was already at the top of the list, to, oh, my gosh, in 2020, it feels like it's even higher there. So how does Nutanix make sure that, Nutanix along with your partners are making sure that companies, their data, their employees are all secure as possible? >> Absolutely. You mentioned that simplicity is a design principle for Nutanix from day-one, add to that security, security has been a guiding light from day-one, and security is built into our platform. It's not an afterthought, it's something we designed our products to incorporate right from the beginning. And there's a reason for that. The reason is we have over 17,000 customers, and a lot of them are running big, huge enterprise business critical workloads on Nutanix, including public sector, including state and local governments. And we have to ensure that they are able to make the environment secure using Nutanix technology. So whether it's our core technology platform, where we have things built in like data encryption, audit capabilities, or whether it's some of our new portfolio products. Last time, I think, Stu, we talked about how Nutanix offers now this complete cloud platform. 10 years ago, we started with a core foundation, which is hyperconverged infrastructure. But in the last few years, we've added on data center services, like other storage, different types of storage, consolidation, ability for customers, networking options, DR, we've added DevOps and database services, we've added desktop services. If you combine all of those three together with our digital infrastructure services, that's a complete cloud platform that has to be secure for our customers to run enterprise apps on databases, analytics workloads, and also build cloud native applications and run on it, and be able to run the same stack in a public cloud or private on-premises cloud. That has to be secure, so that's the number one design principle for Nutanix. >> Virginia, if Dave Alante was here, he would probably throw out the line that security has really become a board-level discussion. Well, you sit on a few boards, so I'd love to hear a little bit of your insights there as to the security that Monica talked about. Is this something that comes up at every board meeting? What kind of concerns are there out there today? >> Well, Stu, there is no question, it historically has come up at every board meeting. And one of the issues with that has always been the cost growth and escalation that takes place, and can we keep throwing more dollars at securing our environment. Fast-forward, look where we are today. We are highly dispersed workforce. So our attack surface has increased exponentially. And when we think about all the products that we're using, from virtual desktop and functioning from wherever we are in this world, how can that not help, but in the mind of a board director who doesn't know too much about technology, it would frighten them even more. However, the thing that I constantly always underscore is the sooner we move to these more modernized infrastructures, the better our ability will be to secure our environment at a very cost-efficient model. Because these technologies, particularly like Nutanix, have security built into them. And instead of having to add constantly to our cyber workforce, who's going to be looking at and parsing through information, we are able to have these embedded sensors and our ability to have the infrastructure talk to us about where our vulnerabilities are, as opposed to us having to go in and try to figure that out either post event or at some point pre any type of event. So it's very exciting time. I really encourage people to just get off our legacy environments as fast as we can and go to these modernized technology infrastructures and to the vendors who make this invisible to us. And I think the board members start to then say, "Okay, I can begin to understand that." I often give an example of if you're building a smart house versus you buy an old house and you're trying to put cameras on the side and sensors in the windows and in the doors, you can't possibly be as effective in your security as if you built it from the ground up to be secure. >> Yeah, definitely, it is challenging to retrofit that. Modernization is definitely a drum beat we've seen. Monica, a question for you on that theme is, in many ways, the current economic situation is a challenge, but it's also a forcing function. If I can need to keep up, if I need my employees to stay productive, I often need to rapidly adapt some modern solutions like Virginia was saying. Any words on that from what you're hearing from your customers and how Nutanix is helping? >> Absolutely. As I said earlier, I think the more IT leaders we talk to, it's become clear to us that there's three major mandates for IT that they are supporting. It's business growth, it's customer experience, and it's employee experience. So, in terms of modernization, absolutely, we find that IT stakeholders are very keen to go on a journey, which kind of looks like this, and again, it may not be the same for everybody, but starting with data center modernization or what we call infrastructure modernization. So really standardizing and consolidating all the key workloads so they can most efficiently use the data center assets. But then the next step very quickly becomes automation. And I think that's what Virginia was alluding to earlier, is we can no longer throw more and more people at things like security and provisioning and patching and updating and expect us to deliver the service-level agreements we have with business. So automation becomes really key. And, of course, with AI and machine learning, there's a lot of solutions out there around automation, and Nutanix is obviously big in terms of automating. Our one-click upgrades are legendary. That's even before people talked about AI and machine learning, we've been offering them. But then the next step becomes, very quickly, is, okay, great, I've automated everything, IT has become a service, my stakeholders are, I'm able to deliver the service-level agreements, well, what's next? How do I get the flexibility to on-demand spin up environments? And I think that's where the linkage with public cloud comes in, that's where customers are starting to build hybrid cloud. And then the ultimate nirvana that we're hearing from many customers is, they want to be able to use the right cloud for the right workload. A lot of our customers don't want to be stuck, and I'm using the word stuck kind of loosely, but just not with one public cloud. Just like our customers use a lot of different hardware providers in some cases, they also want to have the optionality of using an Azure for one workload, maybe an AWS for something else, maybe it's on-premises for something else, maybe it's a service provider for something else, and that's the ultimate nirvana for IT. So that would be the ultimate modernization, is where you have this kind of like an infinite computing solution, where you can go tap into any resource you need at the point in time that you need it for and be able to pay the right price for that and have a single management across everything. So you don't have to worry about the complexity of managing for environments, it's all done through one single plane, and that's where Nutanix comes in. Really, that's what we are doing, is making it really easy for our customers to reach from this infrastructure modernization, all the way to this hybrid multicloud world, with a single, unified management plan, the ability to move data, applications, and license around as they choose to, and have a cost-optimized solution. >> And let me add to that because I love what Monica is saying. You know, as a corporate fiduciary, I want my partners to do what they do best. So having each cloud provider really continue down the path of the areas that they are best in class in as opposed to wasting their time competing with each other on the same stuff, which doesn't help me evolve as a consumer, and it doesn't help them grow their business. And so, by enabling this kind of hybrid world, we are allowing each of these cloud providers to be able to do what they do best, which helps us invest in our future as consumers. >> All right, so Virginia, talking about fiduciary duties, as a board member, there's a topic that was talked a little bit at the show, but we'd love your feedback. And Monica, I want to hear the company's superior parent. Of course, I'm talking about the founder and CEO, Dheeraj Pandey is, there's a transition, there's a look, looking for the new CEO. If I have the line right, he's he said he will be a Nutant forever even though his role will become a little bit more invisible, of course, what Nutanix has been trying to do with infrastructure and clouds before. So, Virginia, what does this mean for today and for the direction of the company? And then Monica, I would love kind of the internal look from an employee standpoint. >> Well, Stu, thank you for asking the question. I actually did a significant post on LinkedIn a couple of days ago because I really wanted to express to the world how blown away I am by our founder, Dheeraj. I've been working with him now over the last three years. And as I have gotten to know him, and I have worked with a lot of founders in my life, and I've worked with a lot of CEOs who were founders and some that were not founders, they were just CEOs and they came in after the fact, and it is rare that you find an individual that is just so focused on driving the mission forward in a very selfless way. And from the very beginning, people who ended up talking to with our CEO over their life's journey with Nutanix over the last 10, 11 years, will say the same exact same thing, which is, his single focus was about the mission and how Nutanix can support and grow the mission of the organization and what the world needs today. And it is rare that an individual will say, at a certain point in time, "I have taken this thing that I have created to a certain point, and now, it is yet at another inflection point, and it needs to continue on in a significant way. So being concerned about every facet, from do I have the right talent, do I have the right offering, do I have the right capital position, do I have the right board, do I have the right person at the helm? And I have spent a lot of time talking with Dheeraj, which is a gift and a pleasure in life, and to be able to have a candid conversation about where is Nutanix going next and how best to get there. And for a CEO to be able to sit down and talk to their board about that, it is really unique. And to have someone who cares so much about the future of the company, I was really blown away. So I'm very excited about our prospects going forward. Otherwise, I would not have joined this board. We all have, our lives are challenged, and life is short, and we want to spend the time doing the things that we believe in and we love and support. So I am very excited for the next chapter. We have built an incredible base. And now we're poised for very significant growth. And I think to underscore that, you saw the performance of the company was extremely good, the partnerships that are coming out, this is exactly the time when you want to, again, self-effacing, disrupting yourself, looking at where we need to go next. The time to do that is not at the point where you are there and you've arrived at that next step, but just as you're about to take off on a launch. And I think we're here. And I'm very excited. >> Yeah, I'll add to that. So, first of all, Virginia, we are so thrilled that you're on the board. As far as Dheeraj goes, I believe he's a force of nature. I think that's what Virginia said. And look, I'm a parent, and for those of you who are parents out there, this will probably resonate. When a child is born, you nurture your child and you take care of them. At some point, they leave for college. And for me, it was a hard one coming from a different culture, but I almost seem this is akin to that. Dheeraj is the founding father of Nutanix. He has really nurtured the company, he's built it up, he's given us all the right culture principles, and now, he's sending us off to call it saying, "Okay, this is the next phase of your life, go do the best you can and take Nutanix to the next level." And I'm really, really proud to be part of this company, I've been here for a year-and-a-half, we have amazing talent, people are important, we have amazing innovations. And, by the way, this new year, we started a fiscal year in August, it's going to be full of amazing innovations. I mean, this is only the beginning, what you've heard in the last two or three weeks, a lot more is coming down. And then there are some process that we've put in place so people process technology, process to actually scale as a larger company. So I think what Dheeraj has done is really set us up for the next phase of our life, and he's always going to be there for us as an advisor just like a parent is there for the child when they're off to college and off to doing other things in life. That's what I believe. >> Well, Monica and Virginia, thank you so much for sharing the updates. theCUBE really appreciates being able to be part of the Nutanix .NEXT event, and great to catch up with both of you. >> Thank you so much. >> Thank you for continuing to work with us. Thank you. >> All right, stay tuned for more from Nutanix .NEXT digital experience. I'm Stu Miniman. And thank you for watching theCUBE. (gentle music)

>> Narrator: From around the globe, it's theCUBE, with coverage of the Global .NEXT digital experience. Brought to you by Nutanix. >> Hi, I'm Stu Miniman. And welcome to theCUBE's coverage of the Nutanix .NEXT global digital experience. We've been at the Nutanix shows since the first time they ever happened, way back at the Fontainebleau, in Miami, of course. Nutanix is now a public company. A lot of news, a lot going on, and the first time they've done, first, a global event and digital event because this was the convergence of the events that they were originally going to have both in North America as well as Europe. So happy to welcome back to the program. To help kick it off, first of all, we have Monica Kumar, she's the Senior Vice President of Marketing with Nutanix. And also joining us is Virginia Gambale, she is a Managing Partner at Azimuth Partners LLC and also a board member of Nutanix. Virginia, Monica, thanks so much for joining us. >> Thank you so much for having us. >> Thank you, Stu. >> So the event here, of course, the line we've used at many of those shows is, how do we bring people together even while we're apart? Good energy, great speakers, everything from Dr. Condoleezza Rice and Simon Sinek, in the opening, in Trevor Noah for some entertainment in day two, and lots of announcements with partners, customers, of course, speaking, and lots of the Newtons. So, Monica, maybe I start with you. You've had a very a close role in helping to shape a lot of what's going on here. I kind of teed up. Give us, from your standpoint, really, kind of the goals, give us a little bit of insight into putting this together for an online audience versus the kind of party that we have for the users when they come together in-person. >> Yeah, thank you so much, Stu. And I'm so excited to have Virginia here with us as well. You know, obviously, the world is so different now. And one of the biggest things that we've been doing for the last six, seven months is figuring out how do we stay connected with our customers, with our partners, with our own employees, and society at large? So, along the same lines, .NEXT has evolved to, of course, also being a virtual event, but at the same time, the biggest design factor for .NEXT is really the connection with customers, partners, our own employees, and influencers, and society at large. So you'll see a lot of our agenda is designed around future of work and what does it mean to be a leader and a technology leader, a technology provider in this world while we are living through the pandemic. We're also talking about future of education, future of healthcare, future financial services, all the things that matter to us as human beings, and then what's the role that technology is going to play in that, and, of course, how can Nutanix as a technology vendor help our customers navigate these uncertain times. So that's how most of our content is on day-one. And then day-two is really all about the latest and greatest cool tech. And you're going to hear a lot about and you've heard a lot about cloud technology and cloud being that constant enabler of innovation for businesses and for IT. So all of our hybrid cloud, multicloud, our core hyperconverged infrastructure, and how that's evolving to hybrid cloud infrastructure, it's about platform as a service, DevOps, I mean, database solutions, and these are competing solutions, you name it. So that's going to be at day-two. And then day-three is a partner exchange. So, obviously, partners are really important to us. That's the village, the ecosystem. And we have a whole day dedicated to our partners in helping understand how can we together bring the best solutions to market. >> Virginia, I'd love to get your experience so far with the event that you've attended. >> Well, I always find that .NEXT experiences a very broad and enriching experience. I tell people who have never heard of cloud, who are well in the cloud, who are wanting to just learn about it, just sort of standing at the precipice of embarking on this journey, to watch or participate or go to the .NEXT for Nutanix, because it is so rich with content and speakers that are so intelligent about an experience about what they are doing and embarking on. And then in addition to that, there's always a hint and a lookout at the future and where we are going and where we need to think about where we are going. So I am very excited. The first part of this virtual .NEXT, I didn't know what to expect, but I am extremely pleased. >> Well, yeah, Virginia, you bring up a really good point. It's not just the cool technology, and there's lots of that, but what, personally, how do I enrich myself, how do I reach my career, how do enrich my community, that heart that Nutanix talks a lot about. Monica, obviously cloud has been a very important piece of the discussion. I noticed a little bit of shift in marketing. For a couple of years, the enterprise cloud was the discussion. Dheeraj's teams is out, he said, "Okay, we're going to change HCI from hyperconverged infrastructure to hybrid cloud infrastructure." You and I had had a conversation when the announcement of Nutanix Clusters with AWS, and at the show, Scott Guthrie, of course, wearing the signature red polo, and deeper partnership with Microsoft for Azure. Definitely, lots of excitement around that because Microsoft is a company that most people partner with and work with and use their technologies. And things like Azure Arc have the real promise to help us live in this hybrid and multicloud world. So we'd love to just briefly touch on the cloud pieces, what you're seeing in the news from Nutanix's standpoint? >> Absolutely. So one of the big pieces of news that's come out of .NEXT is a partnership with Azure, and we are super-excited for that partnership. Not only is Nutanix Clusters going to be available on Azure and we are jointly developing that solution to bring hybrid cloud solution to customers, you rightfully mentioned Azure Arc, we are also working to integrate Azure Arc across on-premises and Azure cloud. So, ultimately, for us, it's really about technology being a means to an end. The end is business outcomes for our customers, the end is a better customer experience, better employee experience, growth for the company in terms of revenue and profitability. And ultimately, that's what technology is doing, is really simplifying the use of cloud technology and build that hybrid cloud fabric that customers can deploy very quickly, very easily, seamlessly, and then manage it very easily, oh, and by the way, also be able to move their apps and data and license across the on-premises and, in this case, Azure environment. So very excited. By the way, we don't just stop there. When you say cloud, and when we say hybrid cloud and multicloud, it's, of course, on-premises, it's, of course, the hyperscaler clouds, but then there are service provider clouds. Because in region, and then, by the way, I don't know if you heard Khaled Soudani, he's the CTO at SocGen, he joined us as well in one of the keynotes, and obviously, they are building hybrid clouds. And when we talk about hybrid cloud to customers, it's also service provider cloud, which could be for data locality, data residency regions. It's also Nutanix's own cloud, the Nutanix cloud. So that's definitely one of the big pieces of news coming out of .NEXT, is this morphing or I would say evolution of hyperconverged infrastructure to becoming the hybrid cloud infrastructure. >> Virginia, of course, the big discussion this year has been the impact of COVID and what that's meant to IT priorities, CIO priorities. In a lot of the conversations we've been having on theCUBE this year, there's been a real acceleration on a lot of those cloud initiatives that Monica was talking about. So what are you hearing? What are you seeing? What are some of those imperatives that are either accelerating or, and are there some things that people are saying, "Hey, we might want to put this on ice for a few months?" >> Well, I can tell you, from my work with clients, the many public boards that I sit on, which span from financial services, to pure tech, all the way through to consumer-facing businesses, I really see the spectrum. And three years ago, when I was on theCUBE, we were talking about standing at the precipice and jumping in. Now, we are full on, we are in it. And Monica talked about all these different public clouds and the various providers who are leading their own way. But what I love and I think it's really important is that we need an independent company that actually begins to step back and help all the leaders that are running technology and operations and customer-facing functions, to be able to help them do their job. So here we are today, talking to various CEOs and C-suite executives. And the big issues are, "Okay, this stuff isn't so scary, we are in it, we need it for being able to function in the COVID world, and we also need it because our customers need us to need this, to have it." So, when we look at our portfolio of how businesses are investing in technology and other areas going forward, innovation, cost management, and also cyber seemed to be sort of the three very important themes of the day. And I believe that, today, as we sit through the next few days with .NEXT, we are really going to find stories, experiences, and visions about how we can actually address all three of those. >> Yeah, I think the point, Virginia, you're making is so fantastic, that this is the age of innovation while organizations also have to focus on cost intelligence. And that's the number one thing we're hearing from our customers. I mean, like when you were talking, it just reminded me, in the old days and maybe even up to five years ago, and the CIOs were all about knowing technology knowhow and managing costs, and like it was a cost center. But now you look at IT, IT is at the forefront of driving innovation. IT is at the forefront of adopting cloud. But at the same time, IT is also tasked with being smart about cost optimization. So you're right, that's exactly what we're also going to discuss the .NEXT, is how can technology help our customers innovate and, at the same time, be intelligent about cost optimization and which cloud to use for which workloads, for example. >> Yes, and also having the flexibility and the optionality to be able to put these things together. >> Well, yeah, Monica, simplicity was always at the core of what Nutanix did. And talking about the hybrid cloud solutions, it's very important you talk about the fact that it's the same operational model wherever things lived. The one piece that you didn't cover yet, that Virginia teed up, cyber security. So, absolutely, we would need innovation, we need to look at costs, but security is something that went from, it was already at the top of the list, to, oh, my gosh, in 2020, it feels like it's even higher there. So how does Nutanix make sure that, Nutanix along with your partners are making sure that companies, their data, their employees are all secure as possible? >> Absolutely. You mentioned that simplicity is a design principle for Nutanix from day-one, add to that security, security has been a guiding light from day-one, and security is built into our platform. It's not an afterthought, it's something we designed our products to incorporate right from the beginning. And there's a reason for that. The reason is we have over 17,000 customers, and a lot of them are running big, huge enterprise business critical workloads on Nutanix, including public sector, including state and local governments. And we have to ensure that they are able to make the environment secure using Nutanix technology. So whether it's our core technology platform, where we have things built in like data encryption, audit capabilities, or whether it's some of our new portfolio products. Last time, I think, Stu, we talked about how Nutanix offers now this complete cloud platform. 10 years ago, we started with a core foundation, which is hyperconverged infrastructure. But in the last few years, we've added on data center services, like other storage, different types of storage, consolidation, ability for customers, networking options, DR, we've added DevOps and database services, we've added desktop services. If you combine all of those three together with our digital infrastructure services, that's a complete cloud platform that has to be secure for our customers to run enterprise apps on databases, analytics workloads, and also build cloud native applications and run on it, and be able to run the same stack in a public cloud or private on-premises cloud. That has to be secure, so that's the number one design principle for Nutanix. >> Virginia, if Dave Alante was here, he would probably throw out the line that security has really become a board-level discussion. Well, you sit on a few boards, so I'd love to hear a little bit of your insights there as to the security that Monica talked about. Is this something that comes up at every board meeting? What kind of concerns are there out there today? >> Well, Stu, there is no question, it historically has come up at every board meeting. And one of the issues with that has always been the cost growth and escalation that takes place, and can we keep throwing more dollars at securing our environment. Fast-forward, look where we are today. We are highly dispersed workforce. So our attack surface has increased exponentially. And when we think about all the products that we're using, from virtual desktop and functioning from wherever we are in this world, how can that not help, but in the mind of a board director who doesn't know too much about technology, it would frighten them even more. However, the thing that I constantly always underscore is the sooner we move to these more modernized infrastructures, the better our ability will be to secure our environment at a very cost-efficient model. Because these technologies, particularly like Nutanix, have security built into them. And instead of having to add constantly to our cyber workforce, who's going to be looking at and parsing through information, we are able to have these embedded sensors and our ability to have the infrastructure talk to us about where our vulnerabilities are, as opposed to us having to go in and try to figure that out either post event or at some point pre any type of event. So it's very exciting time. I really encourage people to just get off our legacy environments as fast as we can and go to these modernized technology infrastructures and to the vendors who make this invisible to us. And I think the board members start to then say, "Okay, I can begin to understand that." I often give an example of if you're building a smart house versus you buy an old house and you're trying to put cameras on the side and sensors in the windows and in the doors, you can't possibly be as effective in your security as if you built it from the ground up to be secure. >> Yeah, definitely, it is challenging to retrofit that. Modernization is definitely a drum beat we've seen. Monica, a question for you on that theme is, in many ways, the current economic situation is a challenge, but it's also a forcing function. If I can need to keep up, if I need my employees to stay productive, I often need to rapidly adapt some modern solutions like Virginia was saying. Any words on that from what you're hearing from your customers and how Nutanix is helping? >> Absolutely. As I said earlier, I think the more IT leaders we talk to, it's become clear to us that there's three major mandates for IT that they are supporting. It's business growth, it's customer experience, and it's employee experience. So, in terms of modernization, absolutely, we find that IT stakeholders are very keen to go on a journey, which kind of looks like this, and again, it may not be the same for everybody, but starting with data center modernization or what we call infrastructure modernization. So really standardizing and consolidating all the key workloads so they can most efficiently use the data center assets. But then the next step very quickly becomes automation. And I think that's what Virginia was alluding to earlier, is we can no longer throw more and more people at things like security and provisioning and patching and updating and expect us to deliver the service-level agreements we have with business. So automation becomes really key. And, of course, with AI and machine learning, there's a lot of solutions out there around automation, and Nutanix is obviously big in terms of automating. Our one-click upgrades are legendary. That's even before people talked about AI and machine learning, we've been offering them. But then the next step becomes, very quickly, is, okay, great, I've automated everything, IT has become a service, my stakeholders are, I'm able to deliver the service-level agreements, well, what's next? How do I get the flexibility to on-demand spin up environments? And I think that's where the linkage with public cloud comes in, that's where customers are starting to build hybrid cloud. And then the ultimate nirvana that we're hearing from many customers is, they want to be able to use the right cloud for the right workload. A lot of our customers don't want to be stuck, and I'm using the word stuck kind of loosely, but just not with one public cloud. Just like our customers use a lot of different hardware providers in some cases, they also want to have the optionality of using an Azure for one workload, maybe an AWS for something else, maybe it's on-premises for something else, maybe it's a service provider for something else, and that's the ultimate nirvana for IT. So that would be the ultimate modernization, is where you have this kind of like an infinite computing solution, where you can go tap into any resource you need at the point in time that you need it for and be able to pay the right price for that and have a single management across everything. So you don't have to worry about the complexity of managing for environments, it's all done through one single plane, and that's where Nutanix comes in. Really, that's what we are doing, is making it really easy for our customers to reach from this infrastructure modernization, all the way to this hybrid multicloud world, with a single, unified management plan, the ability to move data, applications, and license around as they choose to, and have a cost-optimized solution. >> And let me add to that because I love what Monica is saying. You know, as a corporate fiduciary, I want my partners to do what they do best. So having each cloud provider really continue down the path of the areas that they are best in class in as opposed to wasting their time competing with each other on the same stuff, which doesn't help me evolve as a consumer, and it doesn't help them grow their business. And so, by enabling this kind of hybrid world, we are allowing each of these cloud providers to be able to do what they do best, which helps us invest in our future as consumers. >> All right, so Virginia, talking about fiduciary duties, as a board member, there's a topic that was talked a little bit at the show, but we'd love your feedback. And Monica, I want to hear the company's superior parent. Of course, I'm talking about the founder and CEO, Dheeraj Pandey is, there's a transition, there's a look, looking for the new CEO. If I have the line right, he's he said he will be a Newton forever even though his role will become a little bit more invisible, of course, what Nutanix has been trying to do with infrastructure and clouds before. So, Virginia, what does this mean for today and for the direction of the company? And then Monica, I would love kind of the internal look from an employee standpoint. >> Well, Stu, thank you for asking the question. I actually did a significant post on LinkedIn a couple of days ago because I really wanted to express to the world how blown away I am by our founder, Dheeraj. I've been working with him now over the last three years. And as I have gotten to know him, and I have worked with a lot of founders in my life, and I've worked with a lot of CEOs who were founders and some that were not founders, they were just CEOs and they came in after the fact, and it is rare that you find an individual that is just so focused on driving the mission forward in a very selfless way. And from the very beginning, people who ended up talking to with our CEO over their life's journey with Nutanix over the last 10, 11 years, will say the same exact same thing, which is, his single focus was about the mission and how Nutanix can support and grow the mission of the organization and what the world needs today. And it is rare that an individual will say, at a certain point in time, "I have taken this thing that I have created to a certain point, and now, it is yet at another inflection point, and it needs to continue on in a significant way. So being concerned about every facet, from do I have the right talent, do I have the right offering, do I have the right capital position, do I have the right board, do I have the right person at the helm? And I have spent a lot of time talking with Dheeraj, which is a gift and a pleasure in life, and to be able to have a candid conversation about where is Nutanix going next and how best to get there. And for a CEO to be able to sit down and talk to their board about that, it is really unique. And to have someone who cares so much about the future of the company, I was really blown away. So I'm very excited about our prospects going forward. Otherwise, I would not have joined this board. We all have, our lives are challenged, and life is short, and we want to spend the time doing the things that we believe in and we love and support. So I am very excited for the next chapter. We have built an incredible base. And now we're poised for very significant growth. And I think to underscore that, you saw the performance of the company was extremely good, the partnerships that are coming out, this is exactly the time when you want to, again, self-effacing, disrupting yourself, looking at where we need to go next. The time to do that is not at the point where you are there and you've arrived at that next step, but just as you're about to take off on a launch. And I think we're here. And I'm very excited. >> Yeah, I'll add to that. So, first of all, Virginia, we are so thrilled that you're on the board. As far as Dheeraj goes, I believe he's a force of nature. I think that's what Virginia said. And look, I'm a parent, and for those of you who are parents out there, this will probably resonate. When a child is born, you nurture your child and you take care of them. At some point, they leave for college. And for me, it was a hard one coming from a different culture, but I almost seem this is akin to that. Dheeraj is the founding father of Nutanix. He has really nurtured the company, he's built it up, he's given us all the right culture principles, and now, he's sending us off to call it saying, "Okay, this is the next phase of your life, go do the best you can and take Nutanix to the next level." And I'm really, really proud to be part of this company, I've been here for a year-and-a-half, we have amazing talent, people are important, we have amazing innovations. And, by the way, this new year, we started a fiscal year in August, it's going to be full of amazing innovations. I mean, this is only the beginning, what you've heard in the last two or three weeks, a lot more is coming down. And then there are some process that we've put in place so people process technology, process to actually scale as a larger company. So I think what Dheeraj has done is really set us up for the next phase of our life, and he's always going to be there for us as an advisor just like a parent is there for the child when they're off to college and off to doing other things in life. That's what I believe. >> Well, Monica and Virginia, thank you so much for sharing the updates. theCUBE really appreciates being able to be part of the Nutanix .NEXT event, and great to catch up with both of you. >> Thank you so much. >> Thank you for continuing to work with us. Thank you. >> All right, stay tuned for more from Nutanix .NEXT digital experience. I'm Stu Miniman. And thank you for watching theCUBE. (gentle music)

(upbeat music) >> From around the globe, it's theCUBE with coverage of SUSECON Digital. Brought to you by SUSE. >> Welcome back. I'm Stuart Miniman coming to you from our Boston area studio and this is theCUBE coverage of SUSECON Digital 20. Happy to welcome to the program two of the keynote present presenters. First of all, we have Dr. Thomas Giacomo. He is the President of Engineering and innovation and joining him his co presenter from Makino state, Daniel Nelson, who is the Vice President of Product Solutions, both of you with SUSE. Gentlemen, thanks so much for joining us. >> Thank you. >> Thank you for having us. >> All right. So, Dr. T, Let's start out, innovation, open source, give us a little bit of the message for our audience that you and Daniel were talking about on stage. We've been watching for decades, the growth in the proliferation of open source communities, so give us the update there. >> Yeah. And then it's not stopping, it's actually growing even more and more and more and more innovations coming from open source. The way we look at it is that our customers there, they have their business problems, they have their business reality. And so we, we have to curate, and prepare and filter all the open source innovation that they can benefit from, because that takes time to understand how that can match your needs and fix problems. So at SUSE, we've always done that, since 27 plus years. So, working in the open source projects, innovating there but with customers in mind, and what is pretty clear in 2020 is that large enterprises, more startups, everybody's doing software, everybody's is doing IT and they all have the same type of needs in a way they need to simplify their landscape, because they've been accumulating investments all the way or infrastructure or software, different solutions, different platforms from different vendors. They need to simplify that. They need to modernize, and they need to accelerate their business stay relevant and competitive in their own industries. And that's what we are focusing on. >> Yeah, it's interesting, I completely agree when you say simplify thing, you know, Daniel, I go back in the opportunities about 20 years. And in those days, we were talking about the operating Linux was helping to go past the proprietary Unix platform, Microsoft, the big enemy. And you were talking about operating system, server storage, the application that on, it was a relatively simple environment in there compared to today's multi cloud, AI, container based architecture, applications going through this radical Information broke, though, gives a little bit of insight as to the impact this is having on ecosystems and, of course SUSE now has a broad portfolio that at all? >> It's a great question and I totally get where you're coming from, like, if you look 20 years ago, the landscape is completely different, the technologies we're using are completely different, the problems we're trying to solve with technology are more and more sophisticated. At the same time, though, there's kind of nothing new under the sun. Every company, every technology, every modality goes through this expansion of capabilities and the collapse around simplification as the capabilities become more and more complex and more manageable. So there's this continuous tension between capabilities, ease of use consume ability. What we see with open source is that, that kind of dynamic still exists, but it's more online of like developers want, easy to use technologies, but they want the cutting edge. They want the latest things. They want those things within their packages. And then if you look at operations groups or people that are trying to consume that technology, they want that technology to be consumable simple, works well with others be able to pick and choose and have one pane of glass to be able to operate within that. And that's where we see this dynamic. And that's kind of what the SUSE portfolio was built upon. It's like, how do we take the thousands and thousands of developers that are working on these really critical projects, whether it's Linux like you mentioned, or Kubernetes, or or Cloud Foundry? And how do we make that then more consumable to the thousands of companies that are trying to do it, who may even be new to open source or may not contribute directly, but when you have all the benefits that are coming to it, and that's where SUSE fits and where SUSE has fits historically, and where we see us continuing to fit long term is taken all those Legos, put into together for companies that want that, and then allow them a lot of autonomy and choice and how those technologies are consumed. >> Right, one of the themes that I heard you both talk about, in the keynote, it was simplifying, modernize, celebrate, really reminded me of the imperatives of the CIO. There's always run the business, they need to help grow the business, and if they have the opportunity, they want to transform the business. I think you said, run improve in scale. Scale absolutely a critical thing that we talk about these days, when I think back to the Cloud Foundry summit, in the keynote stage, it was the old way if I could do faster, better, cheaper, you could do them today. We know Faster, faster, faster is what you want. So give us a little bit of insight as to, you talked about Cloud Foundry and Kubernetes, application, modernization, what are the imperatives that you're hearing from customers and how are we, with all of these tools out there helping, IT, not just be responsive to the business but actually be a driver for that transformation of the business? >> It's a great question. And so when I talk to customers, and Dr. T, feel free to chime in, you talk to as many or more customers than I do. They do have these what are historically competing imperatives. But what we see with the adoption of some of these technologies is that faster is cheaper, faster is safer, creating more opportunities to grow and to innovate betters the business. It's not risk injection, when we change something, it's actually risk mitigation, when we get good at changing. And so it's kind of that modality of moving from, a simplified model or a very kind of like a manufacturing model of software to a much more organic, much more permissimuch more being able to learn within ecosystems model. And so that's how we see companies start to change the way they're adopting this technology. What's interesting about them is that same level of adoption. That same thought of adoption, It's also how open sources is developed. Open Source has developed organically, it's developed with many eyes make shallow bugs, it's developed by like, let me try this and see what happens, right? And be able to do that in smaller and smaller increments just like we look at Red Green deployments or being able to do micro services, or Canary or any of those things. It's like, let's not, do one greatly for what we're used to and waterfall is that's actually really risky. Let's do many, many, many steps forward and be able to transform it iteratively and be able to go faster iteratively and make that just part of what the business is good at. And so you're exactly right. Like those are the three imperatives of the CIO. What I see with customers is the more that they are aligning those three imperatives together and not making them separate, but we have to be better at being faster and being transformative. Those are the companies that are really using IT as a competitive advantage within their reach. >> Yeah, because most of the time they have different starting points. They have a history. They have different business strategy and things they've done in the past. So you need to be able to accommodate all of that and the faster microservice, native development posture for the new apps, but they're also coming from somewhere, and if you don't take care of that together, you can just accelerate if you simplify your existing because otherwise you spend your time making sure that your existing is running. So you have to combine all of that together, and the two, you mentioned Cloud Foundry and Kubernetes and I love those topics because, I mean, everybody knows about Kubernetes. Now it's picking up in terms of adoption, in terms of innovation technology, uilding AI ML framework on top of it. Now, what's very interesting as well is that, Cloud Foundry was designed for fast software development, and cloud native from the beginning that by the factor apps, and several like four or five years ago, right? What we see now is we can extract the value that Cloud Foundry brings to speed up and accelerate our software development cycles, and we can combine that very nicely and very smoothly simple in a simple way, with all the benefits you get from Kubernetes, and not from one Kubernetes. From your Kubernetes running in your public clouds because you have workloads there, you have services that you want to consume from one public clouds. We have a great SUSECON fireside chat with open shot from Microsoft. Asia, we're actually discussing those topics. Or you might have also Kubernetes clusters at the edge that you want to run in your factory or close to your data and workloads in the field. So those things and Daniel mentioned that as well taking care of the IT ops, like simplify, modernize and accelerate for the IT ops and also accelerate for the developers themselves, we benefiting from a combination of open source technologies. And today, there's not one open source technology that can do that. You need to bundle combine them together and best make sure that they are integrated, hat they are certified together, that they are stable together, that the security aspects, all the technology around them are deeply integrated into services as well. >> Well, I'm really glad you brought up some of those Kubernetes that are out there. We've been saying for a couple years on theCUBE, Kubernetes is getting baked in everywhere. SUSE's got partnership with all the cloud providers and you're not fighting them over whether to use a solution that you have versus theirs. I worry a little bit about, how do I manage all those environments? Do I end up with Kubernetes sprawl just like we have with every other technology out there? Help us understand what differentiates SUSE's offerings in this space? And how do you fit in with the rest of that very dynamic and diverse. >> So, let me start with the aspect of combining things together. And Daniel, maybe you can take the management piece. So, first of all, we are making sure at SUSE that we don't force our customers into a SUSE stack. Of course we have a SUSE stack, and we're very happy people use it. But the reality is that the customer knows that they have some investments, they have different needs, they use different technologies from the past, or they want to try different technologies. So you have to make sure that for Kubernetes like for any other part of the stack, the IT stack or the developer stack, your pieces are our modular that you can accommodate different different elements. So typically, at SUSE, we support different types of hypervisors We're not like focused on one but we can support KVM, Xen, Hyper-V, vSphere, all of the nutanix hypervisor, NetApp hypervisors and everything. Same thing with the OS, there's not only one Linux that people are running, and that's exactly the same with kubernetes. There's no one probably that I've seen in our customer base that will just need one vendor for Kubernetes because they have a hybrid cloud needs and strategy and they will benefit from the native Kubernetes they found on AKA, CKA, SDK, Alibaba clouds, you name them and we have cloud vendors in Europe as well doing that. So for us, it's very important that what we bring as SUSE to our customers can be combined with what they have, what they want, even if it's from the so called competition. And so the SUSE Cloud Foundry is running on. I guess, you can find it on the marketplace of public clouds. It could run on any Kubernetes. It doesn't have to be SUSE Kubernetes. But then you end up with a lot of cells, right? So how do we deal with that then? >> So it's a great question. And I'll actually even broaden that out because it's not like we're only running Kubernetes. Yes, we've got lots of clusters, we've got lots of containers, we've got lots of applications that are moving there. But it's not like all the VMs disappeared. It's not like all the beige boxes, like in the data center, like suddenly don't exist. We all bring all the sins and decisions of the past board with us wherever we go. So for us, it's not just that lens of how do we manage the most modern, the most cutting edge? That's definitely a part of it. But how do you do that within the context of all the other things you have to do within your business? How do I manage virtual machines? How do I manage bare metal? How do I manage all those. And so for us, it's about creating a presentation layer. On top of that, where you can look at your clusters, look at your VMs, look at all your deployments, and be able to understand what's actually happening within your environment. We don't take a prescriptive approach. We don't say you have to use one technology or have to use that technology. What we want to do is to be adaptive to the customer's needs. And say you've got these things. Here's some of our offerings. You've got some legacy offerings too. Let's show you how to bring those together. Let's show you how you modernize your viewpoints, how you simplify your operational framework and how you end up accelerating what you can do with the stuff that you've got in place. >> Yeah, I'm just on the management piece. Is there any recommendations from your team? Last year at Microsoft Ignite, there was a launch of Azure Arc, and, we're starting to see a lot of solutions come out there. Our concern is that any of us that live through the multi vendor management days, don't have good memories from those. It is a different discussion if we're just talking about kind of managing multiple Kubernetes. But, how do we learn from the past? And, what, what are you recommending for people in this multi cloud era? >> So my suggestion to customers is you always start with what are your needs, what is strategic problems you're trying to solve. And then choose a vendor that is going to help you solve those strategic problems. So isn't going to take a product centric view. Isn't going to tell you, use this technology and this technology and this technology, but it's going to take the view of like, this is the problem you're going to solve. Let me be your advisor within that and choose people that you're going to trust within that. That being said, you want to have relationships with customers that have been there for a while that have done this that have a breadth of experience in solving enterprise problems. Coz, I mean, everything that we're talking about, is mostly around the new things. But keep in mind that there are nuances about the enterprise, there are things that are that are intrinsically found within the enterprise, that it takes a vendor with a lot of experience to be able to meet customers where they are. I think you've seen that in some of the real growth opportunities within the hyper scalars. They've kind of moved into being more enterprise, view of things, kind of moving away from just an individual bill perspective to enterprise problems. You're seeing that more and more. I think vendors and customers need to choose companies that meet them where they are, that enable their decisions, not prescribe their decision. >> Okay. Oh-- >> Let me just add to that. >> Please go ahead. >> Yeah, sorry. Yeah. I also wanted to add that I would recommend people to look at open source based solutions because that will prevent them to be in a difficult situation potentially, in a few years from now. So there are open source solutions that can do that. And look at viable, sustainable, healthy open source solutions that are not just one vendor, but multi vendor as well, because that leaves doors options open for you in the future as well. So if you need to move for another vendor, or if you need to complement with an additional technology, or you've made a new investment or you go to a new public cloud, if you base your choices on open source, you have a better chance but from a data. >> I think that's a great point, Dr. T, and I would glom on to that by saying, customers need to bring a new perspective on how they adjudicate these solutions. Like it's really important to look at the health of the open source community. Just because it's open source doesn't mean that there's a secret army of gnomes that you know, in the middle of the night go and fix box, like there needs to be a healthy community around that. And that is not just individual contributors. That is also what are the companies that are invested in this? Where are they dedicating resources? Like that's another level of sophistication that a lot of customers need to bring into their own vendor selection process. >> Excellent. Speaking about communities and open ports, want to make sure you have time to tell us a little bit about the AI platform discussed. >> Yeah, it's it's very, very interesting and something I'm super excited about it SUSE. And it's kind of this, we're starting to see AI done and it's really interesting problems to solve. And like, I'll just give you one example, is that we're working with a Formula One team around using AI to help them actually manage in car mechanics and actually manage some of the things that they're doing to get super high performance out of their vehicles. And that is such an interesting problem to solve. And it's such a natural artificial intelligence problem that even then you're talking about cars instead of servers or you're talking about racing stack instead of data centers, you still got a lot of the same problems. And so you need an easy to use AI stack, you need it to be high performance, you need it to be real time, you need to be able to get decisions made really quickly. These are the same kinds of problems. But we're starting to see them in all these really interesting real world scenarios, which is one of the coolest things that I've seen in my career, especially as it turns of IT, is that IT is really everywhere. It's not just grab your sweater and go to the data centre, because it's 43 degrees in there, it's also get on the racetrack, it's also go to the airfield, it's also go to the grocery store and look at some of the problems being addressed and solved there. And that is super fascinating. One of the things that I'm super excited about in our industry in total. >> All right, well, really good discussion here. Daniel, Dr. T, thank you so much for sharing everything from your keynote and been a pleasure watching. >> Thank you. >> All right back with lots more covered from SUSECON Digital 20 I'm Stuart Miniman and as always, thank you for watching theCUBE. (upbeat music)

>> Announcer: From around the globe, it's theCUBE, with digital coverage of Red Hat Summit 2020, brought to you by Red Hat. >> Hi, I'm Stu Miniman, and this is theCUBE's coverage of Red Hat Summit, happening digitally, interviewing practitioners, executives, and thought leaders from around the world. Happy to welcome back to our program, one of our CUBE alumni, Ashesh Badani, who's the Senior Vice President of Cloud Platforms with Red Hat. Ashesh, thank you so much for joining us, and great to see you. >> Yeah, likewise, thanks for having me on, Stu. Good to see you again. >> All right, so, Ashesh, since the last time we had you on theCUBE a few things have changed. One of them is that IBM has now finished the acquisition of Red Hat, and I've heard from you from a really long time, you know, OpenShift, it's anywhere and it's everywhere, but with the acquisition of Red Hat, it just means this only runs on IBM mainframes and IBM Cloud, and all things blue, correct? >> Well, that's true for sure, right? So, Stu, you and I have been talking for many, many times. As you know, we've been committed to hybrid multi-cloud from the very get-go, right? So, OpenShift supported to run on bare metal, on virtualization platforms, whether they come from us, or VMware, or Microsoft Hyper-V, on private clouds like OpenStack, as well as AWS, Google Cloud, as well as on Azure. Now, with the completion of the IBM acquisition of Red Hat, we obviously always partnered with IBM before, but given, if you will, a little bit of a closer relationship here, you know, IBM's been very keen to make sure that they promote OpenShift in all their platforms. So as you can probably see, OpenShift on IBM Cloud, as well as OpenShift on Z on mainframe, so regardless of how you like OpenShift, wherever you like OpenShift, you will get it. >> Yeah, so great clarification. It's not only on IBM, but of course, all of the IBM environments are supported, as you said, as well as AWS, Google, Azure, and the like. Yeah, I remember years ago, before IBM created their single, condensed conference of THINK, I attended the conference that would do Z, and Power, and Storage, and people would be like, you know, "What are they doing with that mainframe?" I'm like, "Well, you do know that it can run Linux." "Wait, it can run Linux?" I'm like, "Oh my god, Z's been able to run Linux "for a really long time." So you want your latest Container, Docker, OpenShift stuff on there? Yeah, that can sit on a mainframe. I've talked to some very large, global companies that that is absolutely a part of their overall story. So, OpenShift-- >> Interesting you say that, because we already have customers who've been procuring OpenShift on mainframe, so if you made the invest mainframe, it's running machine learning applications for you, looking to modernize some of the applications and services that run on top in OpenShift on mainframe now is an available option, which customers are already taking advantage of. So exactly right to your point, we're seeing that in the market today. >> Yeah, and Ashesh, maybe it's good to kind of, you know, you've got a great viewpoint as to customers deploying across all sorts of environments, so you mentioned VMware environments, the public cloud environment. It was our premise a few years ago on theCUBE that Kubernetes get staked into all the platforms, and absolutely, it's going to just be a layer underneath. I actually think we won't be talking a lot about Kubernetes if you fast-forward a couple of years, just because it's in there. I'm using it in all of my environments. So what are you seeing from your customers? Where are we in that general adoption, and any specifics you can give us about, you know, kind of the breadth and the depth of what you're seeing from your customer base? >> Yeah, so, you're exactly right. We're seeing that adoption continue on the path it's been on. So we've got now, over 1700 customers for OpenShift, running in all of these environments that you mentioned, so public, private, a combination of the two, running on traditional virtualization environments, as well as ensuring that they run in public cloud at scale. In some cases managed by customers, in other cases managed by us on their behalf in a public cloud. So, we're seeing all permutation, if you will, of that in play today. We're also seeing a huge variety of workloads, and to me, that's actually really interesting and fascinating. So, earliest days, as you'd expect, people trying to play with micro-services, so trying to build new market services and run it, so cloud native, what have you. Then as we're ensuring that we're supporting stateful application, right. Now you're starting to see if your legacy applications move on, ensuring that we can run them, support them at scale, within the platform 'cause we're looking to modernize applications. We'll talk maybe in a few minutes also about lift-and-shift that we got to play as well. But now also we're starting to see new workloads come on. So just most recently we announced some of the work that we're doing with a series of partners, from NVIDIA to emerging AI ML, AI, artificial intelligence machine learning, frameworks or ISVs, looking to bring those to market. Been ensuring that those are supported and can run with OpenShift. Right, our partnership with NVIDIA, ensuring OpenShift be supported on GPU based environment for specific workloads, whether it be performance sensitive or specific workloads that take advantage of underlying hardware. So starting now to see a wide variety if you will, of application types is also something that we're starting, right, so numbers of customers increasing, types of workloads, you know, coming on increasing, and then the diversity of underlying deployment environments. Where they're running all services. >> Ashesh, such an important piece and I'm so glad you talked about it there. 'Cause you know my background's infrastructure and we tend to look at things as to "Oh well, I moved from VM to a container, "to cloud or all these other things," but the only reason infrastructure exists is to run my application, is my data and my application that are the most important things out there. So Ashesh, let me get in some of the news that you got here, your team work on a lot of things, I believe one of them talks about some of those, those new ways that customers are building applications and how OpenShift fits into those environments. >> Yeah, absolutely. So look, we've been on this journey as you know for several years now. You know recently we announced the GA of OpenShift Service Mesh in support of Istio, increasing an interest as for turning microservices will take advantage of close capabilities that are coming in. At this event we're now also announcing the GA of OpenShift Serverless. We're starting to see obviously a lot of interest, right, we've seen the likes of AWS spawn that in the first instance, but more and more customers are interested in making sure that they can get a portable way to run serverless in any Kubernetes environment, to take advantage of open source projects as building blocks, if you will, so primitives in, within Kubernetes to allow for serverless capabilities, allow for scale down to zero, supporting serving and eventing by having portable functions run across those environments. So that's something that is important to us and we're starting to see support of in the marketplace. >> Yeah, so I'd love just, obviously I'm sure you've got lots of break outs in the OpenShift Serverless, but I've been talking to your team for a number of years, and people, it's like "Oh, well, just as cloud killed everything before it, "serverless obviates the need for everything else "that we were going to use before." Underlying OpenShift Serverless, my understanding, Knative either is the solution, or a piece of the solution. Help us understand what serverless environment this ties into, what this means for both your infrastructure team as well as your app dev team. >> Yeah, great, great question, so Knative is the basis of our serverless solution that we're introducing on OpenShift to the marketplace. The best way for me to talk about this is there's no one size fits all, so you're going to have specific applications or service that will take advantage of serverless capabilities, there will be some others that will take advantage of running within OpenShift, there'll be yet others, we talked about the AI ML frameworks, that will run with different characteristics, also within the platform. So now the platform is being built to help support a diversity, a multitude of different ways of interacting with it, so I think maybe Stu, you're starting to allude to this a little bit, right, so now we're starting to focus on, we've got a great set of building blocks, on the right compute network storage, a set of primitives that Kubernetes laid out, thinking of the notions of clustering and being able to scale, and we'll talk a little bit about management as well of those clusters. And then it changes to a, "What are the capabilities now, "that I need to build to make sure "that I'm most effective, most efficient, "regard to these workloads that I bring on?" You're probably hearing me say workloads now, several times, because we're increasingly focused on adoption, adoption, adoption, how can we ensure that when these 1700 plus, hopefully, hundreds if not thousands more customers come on, how they can get the most variety of applications onto this platform, so it can be a true abstraction over all the underlying physical resources that they have, across every deployment that they put out. >> All right, well Ashesh, I wish we could spend another hour talking about the serverless piece, I definitely am going to make sure I check out some of the breakouts that cover the piece that we talked to you, but, I know there's a lot more that the OpenShift update adds, so what other announcements, news, do you have to cover for us? >> Yeah, so a couple other things I want to make sure I highlight here, one is a capability called ACM, advanced cluster management, that we're introducing. So it was an experimental work that was happening with the IBM team, working on cluster management capabilities, we'd been doing some of that work ourselves, within Red Hat, as part of IBM and Red Hat coming together. We've had several folks from IBM actually join Red Hat, and so we're now open sourcing and providing this cluster management capability, so this is the notion of being able to run and manage these different clusters from OpenShift, at scale, across multiple environments, be able to check on cluster health, be able to apply policy consistently, provide governance, ensure that appropriate applications are running in appropriate clusters, and so on, a series of capabilities, to really allow for multiple clusters to be run at scale and managed effectively, so that's one set of, go ahead, Stu. >> Yeah, if I could, when I hear about multicluster management, I think of some of the solutions that I've heard talked about in the industry, so Azure Arc from Microsoft, Tanzu from VMware, when they talk about multicluster management, it is not only the Kubernetes solutions that they're offering, but also, how do I at least monitor, if not even allow a little bit of control across these environments? So when you talk about cluster management, is that all the OpenShift pieces, or things like AKS, EKS, other options out there, how do those fit into the overall management story? >> Yeah, that's absolutely our goal, right, so we've got to get started somewhere, right? So we obviously want to make sure that we bring into effect the solution to manage OpenShift clusters at scale, and then of course as we would expect, multiple other clusters exist, from Kubernetes, like the ones you mentioned, from the cloud providers as well as others from third parties and we want the solution to manage that as well. But obviously we're going to sort of take steps to get to the endpoint of this journey, so yes, we will get there, we've got to get started somewhere. >> Yeah, and Ashesh, any guides, when you look at people, some of the solutions I mentioned out there, when they start out it's "Here's the vision." So what guidance would you give to customers about where we are, how fast they can expect these things to mature, and I know anything that Red Hat does is going to be fully open source and everything, what's your guidance out there as to what customers should be looking for? >> Yeah, so we're at an interesting point, I think, in this Kubernetes journey right now, and so when we, if you will, started off, and Stu you and I have been talking about this for at least five years if not longer, was this notion that we want to provide a platform that can be portable and successfully run in multiple deployment environments. And we've done that over these years. But all the while when we were doing that, we're always thinking about, what are the capabilities that are needed that are perhaps not developed upstream, but will be over time, but we can ensure that we can look ahead and bring that into the platform. And for a really long time, and I think we still do, right, we at Red Hat take a lot of stick for saying "Hey look, you form the platform." Our outcome back to that has always been, "Look, we're trying to help solve problems "that we believe enterprise customers have, "we want to ensure that they're available open source, "and we want to upstream those capabilities always, "back into the community." But, let's say making available a platform without RBAC, role-based access control, well it's going to be hard then for enterprises to adopt that, we've got to make sure we introduce that capability, and then make sure that it's supported upstream as well. And there's a series of capabilities and features like that that we work through. We've always provided an abstraction within OpenShift to make it more productive for developers and administrators to use it. And we always also support working with kubectl or the command line interface from kube as well. And then we always hear back from folks saying "Well, you've got your own abstraction, "that might make that seem impossible," Nope, you can use both kubectl GPUs or C commands, whichever one is better for you, have at it, we're just trying to be more productive. And now increasingly what we're seeing in the marketplace is this notion that we've got to make sure we work our way up from not just laying out a Kubernetes distribution, but thinking about the additional capability, additional services that you can provide, that would be more valuable to customers, and I think Stu, you were making the point earlier, increasingly, the more popular and the more successful Kubernetes becomes, the less you will see and hear of it, which by the way is exactly the way it should be, because that becomes then the basis of your underlying infrastructure, you are confident that you've got a rock solid bottom, and now you as a customer, you as a user, are focusing all of your energy and time on building the productive application and services on top. >> Yeah, great great points there Ashesh, the vision people always talked about is "If I'm leveraging cloud services, "I shouldn't have to worry "about what version they're running." Well, when it comes to Kubernetes, ultimately we should be able to get there, but I know there's always a little bit of a delta between the latest and newest version of Kubernetes that comes out, and what the managed services, and not only managed services, what customers are doing in their own environment. Even my understanding, even Google, which is where Kubernetes came out of, if you're looking at GKE, GKE is not on the latest, what are we on, 1.19, from the community, Ashesh, so what's Red Hat's position on this, what version are you up to, how do you think customers should think about managing across those environments, because boy, I've got too many scars from interoperability history, go back 10 or 15 years and everything, "Oh, my server BIOS doesn't work on that latest "kernel.org version of what we're doing for Linux." Red Hat is probably better prepared than any company in the industry, to deal with that massive change happening from a code-based standpoint, I've heard you give presentations on the history of Linux and Kubernetes, and what's going forward, so when it comes to the release of Kubernetes, where are you with OpenShift, and how should people be thinking about upgrading from versions? >> Yeah, another excellent point, Stu, it's clearly been following us pretty closely over the years, so where we came at this, was we actually learned quite a bit from our experience in the company with OpenStack. And so what would happen with OpenStack is, you would have customers that are on a certain version of Openstack, and then they kept saying "Hey look, we want to consume close to trunk, "we want new features, we want to go faster." And we'd obviously spent some time, from the release in community to actually shipping our distribution into customer's hand, there's going to be some amount of time for testing and QE to happen, and some integration points that need to be certified, before we make it available. We often found that customers lagged, so there'd be let's say a small subset if you will within every customer or several customers who want to be consuming close to trunk, a majority actually want stability. Especially as time wore on, they were more interested in stability. And you can understand that, because now if you've got mission critical applications running on it you don't necessarily want to go and put that at risk. So the challenge that we addressed when we actually started shipping OpenShift four last summer, so about a year ago, was to say, "How can we provide you basically a way "to help upgrade your clusters, "essentially remotely, so you can upgrade, "if you will, your clusters, or at least "be able to consume them at different speeds." So what we introduced with OpenShift four was this ability to give you over the air updates, so the best way to think about it is with regard to a phone. So you have your phone, your new OS upgrades show up, you get a notification, you turn it on, and you say "Hey, pull it down," or you say at a certain point of time, or you can go off and delay it, do it at a different point in time. That same notion now exists within OpenShift. Which is to say, we provide you three channels, so there's a stable channel where you say "Hey look, maybe this cluster in production, "no rush here, I'll stay at or even a little behind," there's a fast channel for "Hey, I want to be up latest and greatest," or there's a third channel which allows for essentially features that are being in developed, or are still in early stage of development to be pushed out to you. So now you can start consuming these upgrades based on "Hey, I've got a dev team, "on day one I get these quicker," "I've got these applications that are stable in production, "no rush here." And then you can start managing that better yourself. So now if you will, those are capabilities that we're introducing into a Kubernetes platform, a standard Kubernetes platform, but adding additional value, to be able to have that be managed much much, in a much better fashion that serves the different needs of different parts of an organization, allows for them to move at different speeds, but at the same time, gives you that same consistent platform regardless of where you are. >> All right, so Ashesh, we started out the conversation talking about OpenShift anywhere and everywhere, so in the cloud, you talked about sitting on top of VMware, VM Farms is very prevalent in the data centers, or bare metal. I believe since I saw, one of the updates for OpenShift is how Red Hat virtualization is working with OpenShift there, and a lot of people out there are kind of staring out what VMware did with VSphere seven, so maybe you can set it up with a little bit of a compare contrast as to how Red Hat's doing this rollout, versus what you're seeing your partner VMware doing, or how Kubernetes fits into the virtualization environment. >> Yeah, I feel like we're both approaching it from different perspective and learnset that we come at it, so if I can, the VMware perspective is likely "Hey look, there's all these installations of VSphere "in the marketplace, how can we make sure "that we help bring containers there," and they've come up with a solution that you can argue is quite complicated in the way how they're achieving it. Our approach is a different one, right, so we always looked at this problem from the get-go with regard to containers as a new paradigm shift, it's not necessarily a revolution, because most companies that we're looking at are working with existing application services, but it's an evolution in the way you're thinking about the world, but this is definitely the long term future. And so how can we then think about introducing this environment, this application platform into the environment, and then be able to build a new application in it, but also bring in existing applications to the form? And so with this release of OpenShift, what we're introducing is something that we're calling OpenShift Virtualization, which is a few of our existing applications, certain VMs, how can we ensure that we bring those VMs into the platform, they've been certified, data security boundaries around it, or certain constraints or requirements have been put by your internal organization around it, and we can keep all of those, but then still encapsulate that VM as a container, have that be run natively within an environment orchestrated by OpenShift, Kubernetes as the primary orchestrator of those VMs, just like it does with everything else that's cloud-native, or is running directly as containers as well. We think that's extremely powerful, for us to really bring now the promise of Kubernetes into a much wider market, so I talked about 1700 customers, you can argue that that 1700 is the early majority, or if you will, almost the scratching of the surface of the numbers that we believe will adopt this platform. To get, if you held the next setup, whatever, five, 10, 20,000 customers, we'll have to make sure we meet them where they are. And so introducing this notion of saying "We can help migrate," with a series of tools that Rock's providing, these VM-based applications, and then have them run within Kubernetes in a consistent fashion, is going to be extremely powerful, and we're really excited about it, by those capabilities, bringing that to our customers. >> Well Ashesh, I think that puts a great exclamation point as to how we go from these early days off to the vast majority of environments, Ashesh, one thing, congratulations to you and the team on the growth, the momentum, all the customer stories, I'd love the opportunity to talk to many of the Red Hat customers about their digital transformation and how your cloud platforms have been a piece of it, so once again, always a pleasure to catch up with you. >> Likewise, thanks a lot, Stuart, good chatting with you, and hope to see you in person soon sometime. >> Absolutely, we at theCUBE of course hope to see you at events later in 2020, for the time being, we of course fully digital, always online, check out theCUBE.net for all of the archives as well as the events including all the digital ones that we are doing, I'm Stu Miniman, and as always, thanks for watching theCUBE. 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>> From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hello everyone and welcome to this week's episode of theCUBE Insights, powered by ETR. In this Breaking Analysis I want to lay out my 2020 predictions using insights gleaned from theCUBE blended with ETR spending data. You know, 2019 marked our 10th year of doing theCUBE. Over that time we've had the pleasure of covering nearly 1000 events and milestones, including the exit from the great softness of 2008 and 2009. You know theCUBE has extensively tracked a 10 year bull market. We've covered the era of data. We saw the rise and profitless prosperity of the big data and opensource Hadoop movement, where we predicted the practitioners, not vendors, would benefit the most from big data. We've covered many dozens of acquisitions including the 60 billion dollar chess move made by Michael Dell acquiring EMC, and a launch of hundreds of startups in flash, hyper-converged, big data, AI, blockchain, crypto, security and SaaS. There'll be other days to talk about theCUBE and review that, today's all about predicting the future, using spending data and insights from the thousands of interviews we've done on theCUBE. So let's get right into the ETR data and start with the high-level spending. Remember in October, ETR released its survey results and stated that we're coming out of a multiyear investment cycle in digital transformation. Enterprise IT buyers have learned what works, and on which technologies they're going to double down. They're now narrowing their investments on emerging technologies, picking those winners for the next gen tech, and at the same time, they're cutting redundancies from legacy players that they were keeping on as a hedge. Buyers are picking bundled suites from a handful of mega vendors, and solidifying their investments. We're seeing a multi-generational dynamic repeat itself, where buyers are creating a balance between the convenience of packaged offerings, i.e. bundles, and leveraging best of breed technologies to drive innovation. So on balance, the ETR data shows that a contraction in spending and tepid CIO sentiment is impacting both emerging vendors as well as traditional players, and these trends are most pronounced in the very largest organizations, which have always been the best bellwether in ETR's data sets. Let me share with you what one IT executive said recently that I think really sums up the situation quite well. He said, "ETR's findings mirror what we're doing today, "in that we spend most of 2018 bringing in "a lot of the new, core technology. "I believe what you're seeing now is not a lull in spend, "but an operationalization of what we've already purchased. "We're not spending on what's next yet, "because we're still rolling out what we just bought." This is from a VP of global IT at a large public manufacturing company, I said he, it could be a she as well. I think that she's summing it up correctly, and it reflects many of what customers on theCUBE tell us. Now, let's take a look at the macroeconomy. GDP growth is going to come in at about 2.3% this year, give or take. It's not going to hit the Trump administration's goal of 3% plus, but consumers are clearly powering steady growth. At least for now. IT spending should grow at about a point or two above GDP, so let's put that at, say, 4%. We're right in the middle of a Santa Claus rally, and the S&P is above 3200 today. Tech has been a powerful tailwind for stocks, and I think stocks, tech stock's going to take a breath in early 2020, but I expect continued strong growth in the economy and tech spending after a Q1 pause. I could see the S&P flirting with 3700 or even higher in 2020, and I think the tech sector will be a benefactor of that momentum, providing an impetus for continued growth. Here's my thinking on that. So much of 2020 is going to be about the election, and to me the election is going to be really about the economy. And I predict the economy is going to remain steady. And as the IT leader I quoted earlier said, customers will be operationalizing what's been previously purchased. Here's what's different in 2020. Tech projects have historically been very risky investments, and have required higher internal rates of return, IRRs, to get approved by CFOs. But the cloud has altered two factors. One, is that it's allowed more experimentation for way less money. The second is cloud, by shifting CAPEX to OPEX, allows for much more incremental, lower risk investments. So I think you'll see continued steady growth, powered by the cloud, which allows experimentation, and importantly higher hit rates of success. These successful projects will throw off cash for companies, and CFOs are getting on board because they realize it's driving innovation. They also realize that IT does matter, maybe not in the form that Nick Carr envisioned, but a new generation of IT that creates competitive advantage. This brings me to my first main prediction, which is the growth of cloud computing is going to moderate, but the cloud will continue to steal significant share from on-prem spending. Now the narrative that the pendulum is swinging back in my view, is a false narrative. Rather, the pendulum has swung, and the cloud is the underpinning of innovation. Now having said that, I do think we're seeing a bit of an equilibrium in spending, where buyers have identified those workloads that are going to remain on-prem, which is why you see, for example, AWS, Azure, and Google making moves in hybrid. Hybrid slash on-prem offerings. What this chart here shows from ETR, so from 2010 through October '19 survey on cloud spending, I had to block out the 2020 survey as it's currently in the field, I'm not allowed to show that data. The yellow line is market share, which in ETR parlance, as you remember, is pervasiveness, or mentions in their survey. The blue line is spending momentum, measured as net score, which essentially subtracts the percent of customers spending less from those spending more. The long, steady march of cloud, as you can see, continues, and there's no indication that it's going to abate. That said, the penetration of cloud has become much more meaningful, so share gains will be more hard-fought for the cloud guys. Now, you may see this as a non-prediction, or a hedge. It's not, let me be clear. Cloud will continue to steal share from on-prem, but share gains for the cloud vendors will be more difficult. Which brings me to part B of this prediction. What I'm showing in this chart is market share from ETR's January 2016 survey through October '19. And I'm showing spending for three on-prem vendors within AWS, Azure, and Google Cloud accounts. And I'm picking on Oracle, IBM, and Dell EMC as three prominent on-prem proxies, and you can see the steady decline in market share for these companies. And even though there's a bit of an uptick in October, I don't see this as a reversal. What's going to happen is that traditional on-prem vendors are going to step up their cloud strategies. Specifically with multicloud management. This is going to be the case with Dell, who's going to leverage VMware, and in the case of IBM, they'll try to take advantage of Red Hat in that multicloud game. Now both IBM and Oracle, who each have public clouds are going to dig their heels in, they're going to get customers in a headlock, and provide big financial incentives for them to use their captive clouds. All right, so with the high-level spending comments that I made earlier, and that cloud discussion that we just had as a backdrop, the question is, which companies will do well in the coming year? I'm going to call out five companies, that I want to highlight where the ETR data intersects what we're seeing on theCUBE. The prediction is these five players will do well in 2020, they're going to power through any downturn in spending, and they're going to thrive in the face of the cloud share shift. So the chart here shows data from the ETR October 2019 survey, and it lays out net score or spending momentum for these companies, that I am predicting will be winners in 2020 and beyond. And the five companies are UIPath, Snowflake, Databricks, HashiCorp, and Rubrik. Let me start with UIPath. They are the leader in robotic process automation. I think RPA is going to do well even in a downturn, because more companies will be looking to automate and save money, even in a softer climate. Automation Anywhere is another player in this space, they're doing pretty well, and I predict that UIPath will come out on top of this space, but both UIPath and Automation Anywhere can thrive. Next company is Snowflake, they are changing the analytic database market, and I've covered them before in previous Breaking Analysis segments. They are going to continue to grow nicely in my view. They are 100% cloud-based, and they participate in all popular cloud platforms. Now ironically, they compete with AWS RedShift, who continues to copy some of the innovations that Snowflake has popularized. But AWS and Snowflake are strong partners, so there's room for both companies to thrive. Snowflake especially, as they play in clouds other than just AWS. Which brings me to Databricks. We're seeing a new type of workload emerge in the cloud for modern analytic databases, where organizations are taking all this data that they have, lots of it in the cloud, and they're structuring it within a Snowflake database, or RedShift, and they're bringing Databricks tooling to the equation to be able to query and visualize the data in near real time. Now of course, as I say, AWS plays here with RedShift, and they're selling a lot of EC2, so they love Snowflake. All major cloud players are seeing this type of workload enter the mix, and it's going to be a strong area of growth in 2020 and beyond. Next thing I want to talk about is HashiCorp. HashiCorp is capitalizing on this trend toward cloud-native computing. The company provides opensource tooling for developers, and is all about simplifying application deployment independent of the underlying platform, whether it's virtual, container, or cloud. Five years ago, the players in the space that got all the attention on theCUBE were Chef, Puppet, Ansible and Salt, and today, especially again on theCUBE, you hear the most about Hashi and Ansible, and in fact we were at AnsibleFest with theCUBE, and we heard lots about HashiCorp, so they both complement and compete with the older players. To me, this reminds me of Spark within the Hadoop ecosystem. Hashi has raised about 174 million in VC, and as you can see they have very strong spending momentum in the ETR dataset, with a net score, as shown, of 63%. Now finally, I want to talk about Rubrik, which has been a consistent performer in the ETR dataset. They're trying to transform backup into data management as a discipline. They compete with established players in the data protection space, guys like Veritas, Dell EMC, IBM and CommVault. Now Rubrik is not the only new or newish player here, that's doing very well, Cohesity, who's relatively new, Veeam, which has been around for a decade, both doing very well and showing up strong in ETR surveys, especially Veeam, but Rubrik has been a consistently strong performer and has been outpacing the others, so I want to call them out. Look for these five to do very well in 2020, and into the next decade. So that brings me to my next prediction, I want to talk about Kubernetes. This prediction is twofold. Kubernetes is going to continue its strong showing as this data from ETR shows. This is Kubernetes' market share in the October 2019 survey, so Kubernetes spend had a 76% net score. So very very strong. But the other part of the prediction is that Kubernetes will become embedded into virtually every platform, and people will stop thinking about it as a separate market. Already today, there's little discussion of the idea of a Kubernetes distro, I mean Anthos is an example of a Kubernetes stack, but it can be run in the cloud, it can be run on-prem, anywhere. VMware Tanzu, Microsoft Azure Arc are other examples, they're really not stacks, but they're management platforms that can manage anyone's Kubernetes instances. I like to think of this as kind of like flash. You remember when everyone looked at flash storage as a separate market, well today it's just embedded everywhere. And that's kind of what's happening with Kubernetes. So spending momentum is going to continue to be strong, but by 2023, Kubernetes will be ubiquitous, and not really thought of as a separate entity. All right, for my next prediction, I want to talk about cybersecurity. I did a Breaking Analysis earlier this year on security, and I showed this slide. And as you can see, I've added a little something in the red stars for my prediction. So what this chart shows is two views of net score, the left-hand side shows the ranking by net score, and you can see CrowdStrike, Okta, Shape Security, which was just, by the way, bought by F5, that was an announcement. Twistlock, which is now Palo Alto Networks, and you can see the others down that list. On the right-hand side is net score, but it's ranked by shared N, which is a measure of pervasiveness in the ETR dataset. What I've added is the four star companies, that is those companies that have both spending momentum and are pervasive in the ETR survey. So the prediction is 2020 we'll see the four star companies maintain their position and gain strength in 2020. These include established players with portfolios where they can bundle like Microsoft, Cisco, Palo Alto Networks, Splunk, Proofpoint, Fortinet, and CyberArk Software. And then the newer companies like Okta and CrowdStrike are going to continue to gain share faster than the larger players. Now you also may see companies like SailPoint, Illumio, and SentinelOne emerge as four star companies over the next 24 months. Now the one company that's not on this list that is a major player in security is AWS. AWS is the cloud security leader, and is in a category all by itself in many ways. As I said in my security segment earlier this year, the market is incredibly fragmented, and it's going to stay that way. Each year we look back and say "Did we spend more on security?" and "Are we more safe?" And every year the answer is yes, and no. And 2020 will be no different. Now if you look at the various data sources, we spend approximately 120 billion dollars annually on cybersecurity. The worldwide economy is about 85 trillion in dollar terms, so on balance, we spend about .14% on securing our economy, so we're barely scratching the surface. The market is going to remain highly fragmented, the rich will get richer if they have four stars, new players will continue to enter the space, and M&A will continue to be robust. Now if you exclude my long shot that the S&P will break through 3700 next year, that makes nine predictions. For my 10th and final prediction, I don't have hard data from ETR, but I have a strong opinion on this, and that is that the edge will be won by developers, you've heard me talk about this before. Specifically, platforms like Outposts, which are essentially programmable infrastructure which bring a cloud development platform to the edge, is how that space will evolve. It won't be won by shoving traditional servers and storage boxes out to the edge. Rather, it will grow by coders being able to build new applications and workloads on top of infrastructure as code. Okay, that wraps up my 2020 predictions. I'd very much like to hear your opinion, so you can leave your thoughts or your own predictions in the comments sections of this video, or go to my LinkedIn posts. You can reach me @DVellante on Twitter, love to hear your thoughts. And don't forget, this series is available on iTunes, Spotify, and other podcast platforms for your listening pleasure. I'd like to wish everyone a safe and restful holiday season and a prosperous, healthy 2020. Enjoy your families, enjoy this time, this is Dave Vellante, signing out from the latest episode of theCUBE Insights powered by ETR, thanks for watching, everybody. We'll see you next time. (techno music)

>> From the SiliconANGLE media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hello, everyone, and welcome to this week's episode of theCUBE Insights, powered by ETR. In this Breaking Analysis, I want to do a quasi post-mortem on AWS re:Invent, and put the company's prospects into context using some ETR spending data. First I want to try to summarize some of the high-level things that we heard at the event. I won't go into all the announcements in any kind of great detail, there's a lot that's been written out there on what was announced, but I will touch on a few of the items that I felt were noteworthy and try to give you some of the main themes. I then want to dig into some of the spending data and share with you what's happening from a buyer's perspective in the context of budgets, and we'll specifically focus on AWS's business lines. And then I'm going to bring my colleague Stu Miniman into the conversation, and we're going to talk about AWS's hybrid strategy in some detail, and then we're going to wrap. So, the first thing that I want to do is give you a brief snapshot of the re:Invent takeaways, and I'll try to give you some commentary that you might not have heard coming out of the show. So, to summarize re:Invent, AWS is not being on rinsing and repeating, they have this culture of raising the bar, but one thing that doesn't change is this shock and awe that they do of announcements, it comes out each year, and it's obvious. It's always a big theme, and this year Andy Jassy really wanted to underscore the company's feature and functional lead relative to some of the other cloud providers. Now the overarching theme that Jassy brought home in his keynote this year is that the cloud is enabling transformation. Not just teeny, incremental improvement, he's talking about transformation that has to start at the very top of the organization, so it's somewhat a challenge and an appeal to enterprises, generally versus what is often a message to startups at re:Invent. And he was specifically talking to the c-suite here. Jassy didn't say this, but let me paraphrase something that John Furrier said in his analysis on theCUBE. He said if you're not born in the cloud, you basically better find the religion and get reborn, or you're going to be out of business. Now, one of the other big trends that we saw this year at re:Invent, and it's starting to come into focus, is that AWS is increasingly leveraging its acquisition of Annapurna with these new chip sets that give it higher performance and better cost structures and utilization than it can with merchant silicon, and specifically Intel. And here's what I'll say about that. AWS is one of the largest, if not the largest customer of Intel's in the world. But here's the thing, Intel wants a level playing field. We've seen this over the years, where it's in Intel's best interest to have that level playing field as much as possible, in its customer base. You saw it in PCs, in servers, and now you're seeing it in cloud. The more balanced the customer base is, the better it is for Intel because no one customer can exert undue influence and control over Intel. Intel's a consummate arms dealer, and so from AWS's perspective it makes sense to add capabilities and innovate, and vertically integrate in a way that can drive proprietary advantage that they can't necessarily get from Intel, and drive down costs. So that's kind of what's happening here. The other big thing we saw is latency, what Pat Gelsinger calls the law of physics. Well a few years ago, AWS, they wouldn't even acknowledge on-prem workloads, and Stu and I are going to talk about that, but clearly sees hybrid as an opportunity now. I'm going to talk more on detail and drill into this with Stu, but a big theme of the event was moving Outposts closer to on-prem workloads, that aren't going to be moving into the cloud anytime soon. And then also the edge, as well as, for instance, Amazon's Wavelength announcement that puts Outposts into 5G networks at major carriers. Now another takeaway is that AWS is unequivocal about the right tool for the right job, and you see this really prominently in database, where I've counted at least 10 purpose-built databases in the portfolio. AWS took some really indirect shots at Oracle, maybe even direct shots at Oracle, which, Oracle treats Oracle Database as a hammer, and every opportunity as a nail, antithetical to AWS's philosophy. Now there were a ton of announcements around AI and specifically the SageMaker IDE, specifically Studio, SageMaker Studio, which stood out as a way to simplify machine intelligence. Now this approach addresses the skillset problem. What I mean by that is, the lack of data scientists to leverage AI. But one of the things that we're kind of watching here is, it's going to be interesting to see if it exacerbates the AI black box issue. Making the logic behind the machines' outcomes less transparent. Now, all of this builds up to what we've been calling next-gen cloud, and we're entering a new era that goes well beyond infrastructure as a service, and lift and shift workloads. And it really ties back to Jassy's theme of transformation, where analytics approaches new computing models, like serverless, which are fundamental now, as is security, and a topic that we've addressed in detail in prior Breaking Analysis segments. AWS even made an announcement around quantum computing as a service, they call it Braket. So those are some of the things that we were watching. All right, now let's pivot and look at some of the data. Here's a reminder of the macro financials for AWS, we get some decent data around AWS financials, and this chart, I've showed before, but it's AWS's absolute revenue and quarterly revenue year on year with the growth rates. It's very large and it's growing, that's the bottom line, but growth is slowing to 35% last quarter as you can see. But to iterate, or reiterate, we're looking at a roughly 36 billion dollar company, growing at 35% a year, and you don't see that often. And so, this market, it still has a long way to go. Now let's look at some of the ETR tactical data on spending. Now remember, spending attentions according to ETR are reverting to pre-2018 levels, and are beginning to show signs of moderation. This chart shows spending momentum based on what ETR calls net score, and that represents the net percentage of customers that are spending more on a particular platform. Now, here's what's really interesting about this chart. It show the net scores for AWS across a number of the company's markets, comparing the gray, which is October '18 survey, with the blue, July '19, and the yellow, October '19. And you can see that workspaces, machine learning and AI, cloud overall, analytic databases, they're all either up or holding the same levels as a year ago, so you see AWS is bucking the trend, and even though spending on containers appears to be a little less than last year, it's holding firm from the July survey, so my point is that AWS is really bucking that trend from the overall market, and is continuing to do very very well. Now this next slide takes the same segments, and looks at what ETR refers to as market share, which is a measure of pervasiveness in the survey. So as you can see, AWS is gaining in virtually all of its segments. So even though spending overall is softening, AWS in the marketplace, AWS is doing a much better job than its peers on balance. Now, the other thing I want to address is this notion of repatriation. I get this a lot, as I'm sure do other analysts. People say to me, "Dave, you should really look into this. "We hear from a lot of customers "that they moved to the cloud, "now they're moving workloads back on-prem "because the cloud is so expensive." Okay, so they say "You should look into this." So this next chart really does look into this. What the chart shows is across those same offerings from AWS, so the same services, the percent of customers that are replacing AWS, so I'm using this as a proxy for repatriation. Look at the numbers, they're low single digits. You see traditional enterprise vendors' overall business growing in the low single digits, or shrinking. AWS's defections are in the low single digits, so, okay, now look at this next chart. What about adoptions, if the cloud is slowing down, you'd expect a slowdown in new adoptions. What this data shows is the percent of customers that are responding, that they're adding AWS in these segments, so there's a new platform. So look, across the board, you're seeing increases of most of AWS's market segments. Notably, in respondents citing AWS overall at the very rightmost bars, you are admittedly seeing some moderation relative to last year. So that's a bit of a concern and clearly something to watch, but as I showed you earlier, AWS overall, that same category, is holding firm, because existing customers are spending more. All right, so that's the data portion of the conversation, hopefully we put that repatriation stuff to bed, and I now want to bring in Stu Miniman to the conversation, and we're going to talk more about multicloud, hybrid, on-prem, we'll talk about Outposts specifically, so Stu, welcome, thank you very much for coming on. >> Thanks Dave, glad to be here with you. >> All right, so let's talk about, let's start with multicloud, and dig into the role of Kubernetes a little bit, let me sort of comment on how I think AWS looks at multicloud. I think they look at multicloud as using multiple public clouds, and they look at on-prem as hybrid. Your thoughts on AWS's perspective on multicloud, and what's going on in the market. >> Yeah, and first of all, Dave, I'll step back for a second, you talked about how Amazon has for years had shots against Oracle. The one that Amazon actually was taking some shots at this year was Microsoft, so, not only did they talk about Oracle, they talked about customers looking to flee their SQL customers, and I lead into that because when you talk about hybrid cloud, Dave, if you talked to any analyst over the last three, four years and you say "Okay, what vendor is best position in hybrid, "which cloud provider has the "best solution for hybrid cloud?" Microsoft is the one that we'd say, because their strong domain in the enterprise, of course with Windows, the move to Office 365, the clear number two player in Azure, and they've had Azure Stack for a number of years, and they had Azure Pack before that, they'd had a number of offerings, they just announced this year Azure Arc, so three, we've had at least three generations of hybrid multicloud solutions from Microsoft, Amazon has a different positioning. As we've talked about for years, Dave, not only doesn't Amazon like to use the words hybrid or multicloud, for the most part, but they do have a different viewpoint. So the partnership with VMware expanded what they're doing on hybrid, and while Andy Jassy, he at least acknowledges that multicloud is a thing, when he sat down with John Furrier ahead of the show, he said "Well, there might be reasons why customers "either there's a group inside "that has a service that they want, "that they might want to do a secondary cloud, "or if I'm concerned that I might fall out of love "with this primary supplier I have, "I might need a second one." Andy said in not so, just exactly, said "Look, we understand multicloud is a thing." Now, architecturally, Amazon's positioning on this is that you should use Amazon, and they should be the center of what you're doing. You talked a lot about Outposts, Outposts, critical to what Amazon is doing in this environment. >> And we're going to talk about that, but you're right, Amazon doesn't like to talk about multicloud as a term, however, and by the way, they say that multicloud is more expensive, less secure, more complicated, more costly, and probably true, but you're right, they are acknowledging at least, and I would predict just as hybrid, which we want to talk about right now, they'll be talking about, they'll be participating in some way, shape, or form, but before we go to multicloud, or hybrid, what about Kubernetes? >> So, right, first of all, we've been at the KubeCon show for years, we've watching Kubernetes since the early days. Kubernetes is not a magic layer, it does not automatically say "Hey, I've got my application, I can move it willy-nilly." Data gravity's really important, how I architect my microservices solution absolutely is hugely important. When I talk to my friends in the app dev world, Dave, hybrid is the way they are building things a lot, if I took some big monolithic application, and I start pulling it apart, if I have that data warehouse or data store in my data center, I can't just migrate that to the cloud, David Floyer for years has been talking about the cost of migration, so microservice architecture's the way most customers are building, a hybrid environment often is there. Multicloud, we're not doing cloud bursting, we're not just saying "Oh hey, I woke up today, "and cloud A is cheaper than cloud B, "let me move my workload." Absolutely, I had a great conversation with a good Amazon customer that said two years ago, when they deployed Kubernetes, they did it on Azure. You want to know why, the Azure solution was more mature and they were doing Azure, they were doing things there, but as Amazon fully embraced Kubernetes, not just sitting on top of their solution, but launched the service, which is EKS, they looked at it, and they took an application, and they migrated it from Azure to Amazon. Now, migrating it, there's the underlying services and everybody does things a little bit different. If you look at some of the tooling out there, great one to look at is HashiCorp has some great tooling that can span across multiple clouds, but if you look at how they deploy, to Azure, to Google, to AWS, it's different, so you got to have different code, there's different skillsets, it's not a utility and just generic compute and storage and networking underneath, you need to have specific skills there, so Kubernetes, absolutely when I've been talking to users for the last few years and saying "Why are you using Kubernetes?" The answer is "I need that eject lever, "so that if I want to leave AWS with an application, "I can do that, and it's not press a button and it's easy, "that easy, but I know that I can move that, "'cause underneath the pods, and the containers, "and all those pieces, the core building blocks "are the same, I will have to do some reconfiguration," as we know with the migration, usually I can get 80 to 90 percent of the way there, and then I need to make the last minute-- >> So it's a viable hedge on your AWS strategy, okay. >> Absolutely, and I've talked to lots of customers, Amazon shows that most cloud Kubernetes solutions out there are running on Amazon, and when I go talk to customers, absolutely, a lot of the customers that are doing Kubernetes in the public cloud are doing that on Amazon, and one of the main reasons they're using it is in case they do want to, as a hedge against being all-in on Amazon. >> All right, let's talk about Outposts, specifically as part of Amazon's hybrid strategy, and now their edge strategy as well. >> Right, so Azure Stack, I mentioned earlier from Microsoft has been out there for a few years. It has not been doing phenomenally well, when I was at Microsoft Ignite this year, I heard basically certain government agencies and service providers are using it and basically acting, delivering Azure as a service, but, Azure Stack is basically an availability zone in my data center, and Amazon looked at this and says "That's not how we're going to build this." Outposts is an extension of your local region, so, while people look at the box and they say, I took a picture of the box and Shu was like, "Hey, whose server and what networking card, "and the chipset and everything," I said "Hold on a second. "You might look at that box, "and you might be able to open the door, "but Amazon is going to deploy that, "they're going to manage that, "really you should put a curtain in front of it "and say pay no attention to what's behind here, "because this is Amazon gear, it's an Amazon "as a service in your data center, "and there are only a few handful of services "that are going to be there at first." If I want to even use S3, day one, the Amazon native services, you're going to just use S3 in your local region. Well, what if I need special latency? Well, Amazon's going to look at that, and see what's available, so, it is Amazon hardware, the Amazon software, the Amazon control plane, reaching into that data center, and very scalable, it's, Amazon says over time it should be able to go to thousands of racks if you need, so absolutely that cloud experience closer to my environment, but where I need certain applications, certain latency, certain pieces of data that I need to store there. >> And we've seen Amazon dip its toe into the hybrid on-prem market with Snowball and Greengrass and stuff like that before, but this is a much bigger commitment, one might even say capitulation, to hybrid. >> Well, right, and the reason why I even say, this is hybrid, but it's all Amazon, it is not "Take my private cloud and my public cloud "and tie 'em together," it's not, "I've taken cloud to customer" or IBM solution, where they're saying "I'm going to put a rack here "and a rack there, and it's all going to work the same." It is the same hardware and software, but it is not all of the pieces-- >> VMware and Outposts is hybrid. >> Really interesting, Dave, as the native AWS solution is announced first here in 2019, and the VMware solution on Outposts isn't going to be available until 2020. Draw what you will, it's been a strong partnership, there are exabytes of data in the VMware cloud on AWS now, but yeah, it's a little bit of a-- >> Quid pro quo, I think is what you call that. >> Well I'd say Amazon is definitely, "We're going to encroach a little bit on your business, "and we're going to woke you into our environment, too." >> Okay, let's talk about the edge, and Outposts at the edge, they announced Wavelength, which is essentially taking Outposts and putting it into 5G networks at carriers. >> Yeah, so Outposts is this building block, and what Amazon did is they said, "This is pretty cool, "we actually have our environment "and we can do other things with it." So sometimes they're just taking, pretty much that same block, and using it for another service, so one that you didn't mention was AWS Local Zones. So it is not a whole new availability zone, but it is basically extending the cloud, multi-tenant, the first one is done for the TME market in Los Angeles, and you expect, how does Amazon get lower latency and get closer, and get specialized services, local zones are how they're going to do this. The Wavelength solution is something they built specifically for the telco environment. I actually got to sit down with Verizon, this was at least an 18 month integration, anybody that's worked in the telco space knows that it's usually not standard gear, there's NEBB certification, there's all these things, it's often even DC power, so, it is leveraging Outposts, but it is not them rolling the same thing into Verizon that they did in their environments. Similar how they're going to manage it, but as you said, it's going to push to the telco edge and in a partnership with Verizon, Vodafone, SK, Telecom, and some others that will be rolling out across the globe, they are going to have that 5G offering and this little bit, I actually buy it from Amazon, but you still buy the 5G from your local carrier. It's going to roll out in Chicago first, and enabling all of those edge applications. >> Well what I like about the Amazon strategy at the edge is, and I've said this before, on a number of occasions on theCUBE Breaking Analysis, they're taking programmable infrastructure to the edge, the edge will be won by developers in my view, and Amazon obviously has got great developer traction, I don't see that same developer traction at HPE, even Dell EMC proper, even within VMware, and now they've got Pivotal, they've got an opportunity there, but they've really got a long way to go in terms of appealing to developers, whereas Amazon I think is there, obviously, today. >> Yeah, absolutely true, Dave. When we first started going to the show seven years ago, it was very much the hoodie crowd, and all of those cloud-native, now, as you said, it's those companies that are trying to become born again in the cloud, and do these environments, because I had a great conversation with Andy Jassy on air, Dave, and I said "Do we just shrink wrap solutions "and make it easy for the enterprise to deploy, "or are we doing the enterprise a disservice?" Because if you are truly going to thrive and survive in the cloud-native era, you've got to go through a little bit of pain, you need to have more developers. I've seen lots of stats about how fast people are hiring developers and I need to, it's really a reversal of that old outsourcing trend, I really need IT and the business working together, being agile, and being able to respond and leverage data. >> It's that hyperscaler mentality that Jassy has, "We got engineers, we'll spend time "on creating a better mousetrap, on lowering costs," whereas the enterprise, they don't have necessarily as many resources or as many engineers running around, they'll spend money to save time, so your point about solutions I think is right on. We'll see, I mean look, never say never with Amazon. We've seen it, certainly with on-prem, hybrid, whatever you want to call it, and I think you'll see the same with multicloud, and so we watch. >> Yeah, Dave, the analogy I gave in the final wrap is "Finding the right cloud is like Goldilocks "finding the perfect solution." There's one solution out there, I think it's a little too hot, and you're probably not smart enough to use it just yet. There's one solution that, yeah, absolutely, you can use all of your credits to leverage it, and will meet you where you are and it's great, and then you've got Amazon trying to fit everything in between, and they feel that they are just right no matter where you are on that spectrum, and that's why you get 36 billion growing at 35%, not something I've seen in the software space. >> All right, Stu, thank you for your thoughts on re:Invent, and thank you for watching this episode of theCUBE Insights, powered by ETR, this is Dave Vellante for Stu Miniman, we'll see you next time. (techno music)

>> Announcer: Live from San Diego, California, it's theCUBE! Covering KubeCon and CloudNativeCon. Brought to you by Red Hat, the Cloud Native Computing Foundation, and its ecosystem partners. >> Welcome back, this is theCUBE's fourth year of coverage at KubeCon CloudNativeCon, we're here in San Diego, it's 2019, I'm Stu Miniman, my host for this afternoon is Justin Warren, and happy to welcome two guests from the newly minted platinum member of the CNCF, NetApp, sitting to my right is Matt Baldwin, who is the director of cloud native and Kubernetes engineering, and sitting to his right is Rob Esker, who does product and strategy for Kubernetes, and is also a forward member on the CNCF, thank you both for joining us. >> Thank you. >> Thanks for having us. >> All right, so Matt, maybe start with you, NetApp, companies that know, I've got plenty of history with NetApp there, what I've been hearing from NetApp for the last few years is, the core of NetApp has always been software, and it is a multicloud world. I've been hearing this message since before the cloud native and Kubernetes piece was going. Of course there's been some acquisitions, and NetApp continuing to go through its transformations, if you will. So help us understand NetApp's positioning in this ecosystem. >> In Kubernetes? >> Yes. >> Okay, so, what we're doing is, we're building a product that allows you to manage cloud-native workloads on top of Kubernetes, so we've solved the infrastructure problem, and that's kind of the old problem we're bored to death talking about that problem, but what we try to do is try to provide a single pane of glass to manage on-premise workloads and off-premise workloads, and so that's what we're trying to do, we're trying to say, it's now more about the app taxonomy in Kubernetes, and then what type of tooling do you build to manage that application in Kubernetes, and so that's what we're building right now, that's where we're headed with the hybrid multicloud. >> There's a piece of it, though, that does draw from the historical strengths of NetApp, of course. So we're building, we are essentially already in market a capability that allows you to deploy Kubernetes, in an agnostic way, using pure open unmodified Kubernetes, on all of the major public clouds, but also on-prem. But over time, and some of this is already evident, you'll see it married to the storage and data management capabilities that we draw from the historical NetApp, and that we're starting to deploy into those public clouds. >> With the idea that you should be able to take a project, so a project being in a namespace, namespace having an application in it, so you have multiple deployments, I should be able to protect that namespace, or that project, I should be able to move that, and that data goes with it, so that we're very data-aware, that's what we're trying to do with our software is, make it very data-aware and have that align with apps inside of Kubernetes. >> Yeah, so Rob, maybe step back for a second, one of the things we've heard a few times at this show before, and it was talked about in the keynote this morning, is that it is project over company when it comes to the CNCF. Project over company, so it's about the ecosystem, the CNCF tries not to be opinionated, so it's okay for multiple projects to fit in a space. NetApp moving up to a platinum sponsor level, participated here, NetApp's got lots of histories in participating and driving standards, helping move where the industry's going, where does NetApp see its position in participating in the foundation and participating in this ecosystem? >> Yeah, so great question, and actually, I love it, it's one of my favorite topics, so, I think the way we look at it is, oftentimes projects, to the extent they become ubiquitous, define a standard, a defacto standard, so not necessarily ratified by some standards body, and so we're very interested in making sure that in the scenario where you want to employ this standard, from a technology integration perspective, our capabilities can operate as an implementation behind the standard. So you get the distinguishing qualities of our capabilities, our products and our services, vis-a-vis, or in the context of the standard, but we're not trying to take you down a walled garden path in a proprietary journey, if you will. We would rather compel you to work with us on the basis of the value, not necessarily operating off a proprietary set of interfaces. So Kubernetes, broadly perceive it as a defacto standard at this point, there's still some work to be done on rounding out the edges, a lot of it underway this week, it's definitely the case that there's an appeal to making this more offerable by, pardon the expression, mere mortals, and we think we can offer some help in that respect as well. >> Yeah, where is its usability? I mean, that's the reason I started stacked on cloud, was that there was a usability problem with Kubernetes. I had a usability problem with Kubernetes. That's what we're trying, that's how I'm looking at the landscape, and I look at all the projects inside of the CNCF, and I look at my role is, our role is to, how do we tie these together, how do we make these so they're very very usable to the users, and how we're engaging with the community is to try to align this, basically pure upstream projects, and create a usability layer on top of that. But we're not going to, we don't want to ever say we're going to fork any of these projects, but we're going to contribute back into these projects. >> So that's one concern that I have heard from some customers, which speaking of which, some of them yesterday, one of the concerns they had was that, when you add that manageability onto the base Kubernetes layer, that often, various vendors become rather opinionated about which way we think this is a good way to do that, and when you're trying to maintain that compatibility across the ecosystem, so some customers say, "Well I actually don't want to have to be too closely welded "to any one vendor, 'cause part of the benefit "of Kubernetes is I can move my workloads around." So how do you navigate what is the right level of opinion to have, and which part should actually just be part of a common standard? >> Think it needs to be along the lines of best practices, is how we do it. So, let's take network policy, for example, applying a sane, default network policy to every namespace. Defining a sane, default pod security policy, building a cluster in a best practices fashion, with security turned on, hardening done, where you would've done this already as a user, so we're not locking you in in any way there. So that's, we're not trying, I'm not trying to curate any type of opinion of the product, what we're trying to do is harmonize your experience across all this ecosystem, so that you don't ever have to think about, "I'm building a cluster on top of Amazon, "so I got to worry about how do I manage this on Amazon." I don't want you to have to think about those providers anymore. And then on top of those, on top of that infrastructure, I want to have a way that you're thinking about managing the applications on those environments in the exact same way, so I'm scaling, or I'm protecting an application on-premise, in the identical way I'm doing it in the cloud. >> So if it's the same everywhere, what's the value that you're providing that means that I should choose your option than something else? >> So, we do have, this is where we have controllers that live inside of the clusters, that manage this stuff for the users. So, you could rebuild what we're doing, but you would have to roll it all by hand. But you could, we don't stand in the way of your operations either, so if we go down, you don't go down, type of idea. But we do have controllers, we're using CRDs, and so our app management technology, our controllers are just watching for a workload to come into the environment, and then we show that in the interface, but you can just walk away as well, if you wanted to. >> There's also a constellation of other services that we're building around, this experience, that do draw, again, from some of the storage and data management capabilities, so staple sets, your traditional workloads that want to interact with or transact data against a block or a shared file system. We're providing capabilities for sophisticated qualities of persistence that can exist in all of those same public clouds, but moreover, over time, we're going to be, and on-premise as well, we're going to be able to actually move, migrate, place, cache, per policy, your persistent data, with your workloads, as you move, migrate, scale, burst, whatever the model is, as you move across and between clouds. >> How far down that pathway do you think we are, 'cause one criticism of Kubernetes is that a lot of the tooling that we're used to from more traditional ways of operating this kind of infrastructure, isn't really there yet, hence the question about, we actually need to make this easier to use. How far down that pathway are we? >> I'd argue that the tooling that I've built has already solved some of those problems. So I think we're pretty far down the path. Now, what we haven't done is open sourced all of my tooling, right, to make it easier on everybody else. >> Rob, NetApp's got strong partnerships across the cloud platforms, I had a chance to interview George at the Google Cloud event, I know you partner of the year, I believe, on some of these stuff, help us understand how some of the things Matt and the team are building interact with the public clouds, you look at Anthos, and Azure Arc, and of course Amazon has many different ways you can do your container and management piece there. Talk a little bit about that relationship and how, both with those partners and then across those partners, work. >> Yeah, it's, how much time do we have, so there's certainly a lot of facets to that, but drawing from the Google experience, we just announced the general availability of Cloud Volumes ONTAP, so the ability to stand up and manage your own ONTAP instance in Google's cloud. Likewise, we announced the general availability of the Cloud Volume service, which gives you the managed push button as a service experience of shared file system on demand, at Google, I believe it was either today or yesterday, in London, I guess maybe I'll blame that on the time zone conversion, not knowing what day it was, but the point is, that's now generally available. Some of those capabilities are going to be able to be connected to our ability from MKS, to deploy a on-demand Kubernetes cluster, and deploy applications from a marketplace experience, in a common way, not just with Google but Azure, with Amazon, and so frankly the story does differ a little bit from one cloud to the next, but the endeavor is to provide common capabilities across all of them. It's also the case that we do have people that are very opinionated about, I want to live only in the Google or the Microsoft or the Amazon ecosystem, we're trying to deliver a rich experience for those folks as well, even if you don't value the agnostic multicloud experience. >> Yeah, and Matt, I'm sure you have a viewpoint on this, but it's that skillset that's really challenging. I was at the Microsoft show, and you've got people, it's not just about .NET, they're embracing and open to all of these environments, but people tend to have the environments that they're used to, and for multicloud to be a reality, it needs to be a little bit easier for me to go between them, but it's still, we're making progress but there's work to do. >> Matt: Yeah, what's the question? >> Yeah, so, I know you're building tools and everything, but what more do we need to do, where are some of the areas that you're hopeful for, but where are the areas that we need to go further? >> So for me it's coming down to the data side. I need to be able to say that, when I turn on data services, inside of Kubernetes, I need to be able to have that workload go anywhere, because as a developer, I'm running a production, I'm running an Amazon, but maybe I'm doing tests locally on my bare metal environments, right, I want to be able to maybe sink down some of my data that I'm working with in production down to my test environment. That stuff's missing, there's no one doing that right now, and that's where we're headed, that's the path, that's where we're headed. >> Yeah, I'm glad you brought that up, actually, 'cause one of the things that I feel like I heard a little bit last year but it is highlighted more this year, is we're talking a little bit more to the application developers because, Kubernetes is a piece of the infrastructure, but it's about-- >> It's the kernel. >> Yeah, it's the kernel there, so, how do we make sure we're spanning between what the app developer needs and still making sure that infrastructure is taken care of, because storage and networking are still hard. >> It is, yeah, I mean I'm approaching, I'm thinking more along the lines of, I'm trying to think more about app developers, personally, than infrastructure at this point. For me, so I can give you a cluster in three minutes, right, so I don't really have to worry about that problem. We also put Istio on top of the clusters, so it's like we're trying to create this whole narrative that you can manage that environment on day one, day two type operations. But, and that's for an IT manager, right, so inside of our product, how I'm addressing this is you have personas, and so you have this concept, you have an IT manager, they can do these things, they can set limits, but for the developer, who's building the applications or the services and pushing those up into the environment, they need to have a sense of freedom, and so on that side of the house, I'm trying not to break them out of their tooling, so part of our product ties into Git, so we have cd, so you just do a git push, git commit to a branch, and we can target multiple clusters. But at no point did the developer actually draft DAML, or anything, we basically create the container for you, create the deployment, bring it online, and I feel like there's these lines, and the IT guys need to be able to say, "I need to create the guardrails for the devs, "but I don't want to make it seem like "I'm creating guardrails for the devs, "'cause the devs don't like that." So that's how I'm balancing it. >> Okay, 'cause that has always been the tension, in that there's a lot of talk about DevOps, but you go and talk to application developers, and they don't want to have anything to do with infrastructure, they just want to program to an API and get things done, they would like this infrastructure to be seamless. >> Yeah, and what we do, also what I'm giving them is service dashboards, because as a developer, you know, because now you're in charge of your QA, you're writing your tests, you're pushing it through CI, it's going to CD. You own your service and production, right? And so we're delivering dashboards as well for services that the developers are running, so they can dig in and say, "Oh, here's an issue," or "Here's where the issue's probably going to be at, "I'm going to go fix this." And we're trying to create that type of scenario for a developer, and for an IT manager. >> Slightly different angle on it, if I'm understanding the question correctly, part of the complexity of infrastructure is something we're also trying to provide a deterministic sort of easy button capability for, perhaps you're familiar with NetApp's Nason ATI product, which we kind of expand that as hybrid cloud infrastructure. If the intention is to make it a simple, private cloud capability, and indeed, our NetApp Kubernetes service operates directly off of it, it's a big part of actually how we deliver cloud services from it. So the point is that, if you're that application developer, if you want the effective NKS on-prem, the endeavor with our NetApp ATI product is to give you that sort of easy button experience, because you didn't really want to be a storage admin or a network admin, you didn't want to get into the, be mired in the details of infra, so that's obviously work in progress, but we think we're definitely headed down the right direction. >> It does seem that a lot of enterprises want to have the cloudlike experience, but they want to be able to bring it home, we're seeing that a lot more. >> Yeah, so this turnkey on-premise, turnkey cloud on-premise, and, with NKS we can, the same auto-scaling, so take the dynamic nature of Kubernetes, so I have a base cluster size of say four worker nodes, right, but my workload's going to maybe need to have more nodes, so my auto-scaler's going to increase the size of my cluster and decrease the size, right? Pretty much everybody only can do that in the public cloud. I can do that in public cloud and on-premise, now. And so that's what we're trying to deliver, and that's pretty cool stuff, I think. >> Well there's a lot of advantages to enterprises operating in that way, because people out here, I can go and buy them or hire them, and say "Hey, we need you to operate this gear," and you've already done it elsewhere, you can do it in cloud, you can do it on-site, I can now run my operations the same across, no matter where my applications live, which saves me a lot of money on training costs, on development costs, and generally it makes for a much more smooth and seamless experience. >> So Rob, if you could, just love your takeaway on NetApp's participation here at the event, and what you want people to take away from the show this year. >> So it's certainly the case that we're doing a lot of great work, we like people to become aware of it. NetApp of course is not, I think we talked about this in perhaps other contexts, not strictly a storage and data management company only. We do draw from the strengths of that as we're providing full stack capabilities, in a way that are interconnected with public cloud, things like our NetApp Kubernetes service as really the foundational glue in many ways, to how we deliver the application runtime, but over time we'll build a constellation of data-centric capabilities around that as well. >> Matt, I would just love to get your viewpoint as someone that built a company in this ecosystem, there's so many startups here, give us kind of that founder viewpoint of being in this sort of ecosystem. >> Of the ecosystem... So this is, I came into the ecosystem at the beginning. I would have to say that it does feel different at this point, I'm going to speak as Matt, not as NetApp. And so my thinking has always been it feels a lot like, you're a big fan of that rock band, right, and you go to a local club, and we all get to know each other at that local club, and there's maybe 500 of us or 1000 of us, and then that band gets signed to Warner Brothers, and goes to the top, and now there's 20,000 people or 12,000 people. That's how it feels to me right now. I think, but what I like about it is that, it just shows the power of the community is now at a point where it's drawing in cities now, not just a small collection of a tribe of people. And I think that's a very powerful thing with this community, and like all the, what are they called, the Kubernetes Summits that they're doing, we didn't have any of those back when we first got going, I mean it was tough to fill the room, and now we can fill the room, and it's amazing, and what I like seeing is people moving past the problem of Kubernetes itself, and moving into what other problems can I solve on top of Kubernetes, so you're starting to see all these really exciting startups doing really neat things, and I really like, like this vendor hall I really like, 'cause you get to see all the new guys, but there's a lot of neat stuff going on, and I'm excited to see where the community goes in the next five years, but it's, we've gone from zero to 60 insanely fast, 'cause you guys were at the original KubeCon, I think, as well. >> It's our fourth year doing theCUBE at this show, but absolutely, we've watched it since the early days. I'm not supposed to mention OpenStack at this show, but we remember talking to JJ and some of the early people there, and we interviewed Craig McLuckie back in his Google days, and the like, so we've been fortunate to be on here since really day zero here, and definitely great energy, congrats so much on the progress, I really appreciate the updates on everything going, as you said, we've reached a certain state, and adding more value on top of this whole environment. >> Yeah, we're in junior high now, right, and we were in grade school for a few years. >> All right, well Matt and Rob, thank you so much for the update, hopefully not an awkward dance tonight for the junior people. For Justin Warren, I'm Stu Miniman, back with more coverage here from KubeCon CloudNativeCon 2019 in San Diego. Thank you for watching theCUBE. (techno music)