>> From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE in ETR. This is "Breaking Analysis" with Dave Vellante. >> Despite all the talk about repatriation, hybrid and multi-Cloud opportunities, and Cloud is an increasingly expensive option for customers, the data continues to show the importance of public Cloud to the digital economy. Moreover, the two leaders, AWS and Azure, are showing signs of accelerated momentum that point to those two giants pulling away from the pack in the years ahead, with each firm's showing broad based momentum across their respective product lines. It's unclear if anything, other than government intervention or self-inflicted wounds will slow these two companies down this decade. Despite their commanding lead, a winning strategy for companies that don't run their own Cloud continues to be innovating on top of their massive CapEx investments. The most notable example here being Snowflake. Hello, everyone. Welcome to this week's Wikibon CUBE insights powered by ETR. In this breaking analysis, we provide our quarterly market share update for the big four hyperscale Cloud providers. And we'll share some new ETR data from their most recent survey. And we'll drill into some of the reasons for the momentum of these two companies and drill further into the database and data warehouse sector to see what, if anything, has changed in that space. First, let's look at some of the noteworthy comments from AWS and Microsoft in their recent earnings updates. We heard from Amazon, the following, "AWS has seen a reacceleration of revenue growth as customers have expanded their commitment to the Cloud and selected AWS as their Cloud partner." Notably, AWS revenues increased 39% in Q3 2021. That's a thousand basis point increase in growth relative to Q3 2020. That's an astounding milestone for a company that we expect to surpass $60 billion in revenue this year. Further, AWS touted the adoption of its custom silicon, and specifically its Graviton2 processors. AWS is fond of emphasizing Graviton's 40% price performance improvements relative to x86 processors, something we've reported on quite extensively. AWS is investing in custom silicon, encouraging ISVs to port their code to the platform so that customers will experience little or no code changes when they migrate. Again, we believe this is a secret weapon for AWS as its cost structure will continue to improve at a rate faster than competitors that don't have the resources or the skills or the stomach to develop such capabilities. Microsoft, for its part, also saw astoundingly good growth of 48% this past quarter for Azure. This is a company that we forecast will approach $40 billion in IaaS and PaaS public Cloud revenue this year. Microsoft's CEO, Satya Nadella, on its earnings call, emphasized the changing nature of Cloud expanding in a distributed fashion to the edge. He referenced Azure as the world's computer. Building on his statements last year that Microsoft is building out a powerful, ubiquitous, intelligent, sensing and predictive Cloud. Yes, folks, it does feel like we're entering the so-called Metaverse, doesn't it? Okay, to underscore the momentum of these two companies, let's take a look at the ETR breakdown of Net score, which measures spending momentum. This chart will be familiar to our listeners. It shows the breakdown of net score for AWS, with the lime green showing new adoptions. That's 11%. The forest green is spending more than 6% relative to the first half of this year. That's a very robust 53%. The gray is flat spending. That's 30% on a very, very large base. And the pink is spending declines of minus 6% or worse. That's 4%. And the bright red is defections i.e those leaving AWS. That's 1%. That's virtually non-existent. You subtract the reds from the greens and you get a net score of 59. Remember, anything over 40, we can still consider to be elevated. Let's look at that same data for Microsoft again. You have some new ads that lime green, that's 7%. The forest green is at 46% of customers spending more, which is an incredible figure for a company with revenues that will in the near term surpass $200 billion. And the red is in the low single digits. Buffered by its enormous PC software profits over the years, Microsoft is powered through its Window's Dogma and transitioned into a Cloud powerhouse. Let's now share some of our latest numbers for the big four hyperscale players, AWS, Azure, Alibaba and Google. Here, we show data for these companies from 2018 and our estimates for 2021. This data includes our final figures for AWS, Azure and GCP for Q3 with Alibaba yet to report. Remember, only AWS and Alibaba report IaaS revenue cleanly with Microsoft and Google, they give us a little breadcrumb nuggets that allow us to triangulate with our survey data and other intelligence. But it's our attempt to do an apples to apples comparison for those four companies using AWS and it's reporting as a baseline. In Q3, AWS reported more than $16 billion in revenue. We estimate Azure at 10 billion, Alibaba, we expect to come in at just under 3 billion, and GCP at 2.5 billion for the quarter. With three quarters of data in, with the exception of Alibaba, we're forecasting AWS to capture 51% of the big four revenue, the hyperscale revenue. And really we believe these are the only four hyperscalers. AWS will surpass 60 billion with Azure just under 40 billion, Alibaba approaching 11 billion, and Google coming in just under 10 billion for the year is our expectation. We forecast these four will account for $120 billion this year. That's a 41% increase over 2020 and the same collective growth rate as 2020 relative to 2019. We expect Azure to be 63% of the size of AWS revenue. So it is gaining share. Both of those companies, however, saw accelerated growth this past quarter with Alibaba and GCP's growth rates decelerating relative to last year. Now, let's take a closer look at those growth rates. This chart shows the quarterly growth rates for each of the four going back to the beginning of 2019. Both GCP and Alibaba are showing dramatic declines in growth rates, whereas, this past quarter Azure saw accelerated growth and AWS has now seen an increased rate of growth for the past two quarters. In fact, AWS' growth is about where it was in 2019 when it was around half of its current revenue size. And in 2019 growth was decelerating through the quarters as you can see where today that trend has reversed. It's quite amazing. All right, let's take a look at the broader Cloud landscape and bring back some ETR data. This chart that we're showing here, it shows net score or spending momentum on the vertical axis and market share or presence in the dataset on the horizontal axis. Note that red dotted line, anything above that we can still consider elevated and impressive. As when we've previously shared this data, AWS and Microsoft Azure are up and to the right. Now remember, this chart is not just counting IaaS and PaaS as we showed you earlier, it's however the customers views whatever they think Cloud is. And so they're likely including Microsoft SaaS in this picture. Which is why Microsoft shows larger than AWS despite what we showed you earlier. Nonetheless, these two are well ahead of the pack and the growth rates indicate that they're pulling away. But we've added some of the other players, most notably VMware Cloud on AWS. It's showing momentum as is VMware Cloud, which is VMware Cloud foundation and other on-prem Cloud offerings, even though it's below the red line for the on-prem piece, it's very respectable. The VMware Cloud on AWS has been consistently up above that red line. Has popped beneath it in some quarters, but it's very, very strong. As is, you know, Red Hat OpenShift, it's a little bit below the line, but it is respectable. We've superimposed this by the way. Red Hat OpenShift in the ETR platform is under the container orchestration taxonomy, but we'd like to put it in next to the Cloud players for context. That's how Red Hat sort of thinks about this as well. They think about OpenShift as Cloud. And then you can see the other players. Alibaba has got a small sample in the ETR dataset. Just does not enough presence in China. But Dell and HPE have started to show up in the Cloud taxonomy. So buyers are associating their private Clouds with Cloud. So Dell's Apex, HPE's GreenLake. So that's a positive. And you can see Oracle, which of course is OCI, Oracle Cloud infrastructure. And then IBM with its public Cloud. So, it's a positive that these on-prem players are showing up in this data, but the reality is the hyperscalers are growing collectively at 40% annually and the on-prem players are growing in the low single digits. So, and if you carve out the IaaS business of AWS and Azure, they're larger than most of the on-premises infrastructure players. And all the on-prem players are moving toward an as a service model, as I just alluded to. So, undoubtedly, hybrid multicloud edge are going to present opportunities for the likes of Dell, HPE, Cisco, VMware, IBM, Red Hat, et cetera. But they also present opportunities for the public Cloud players who have vibrant ecosystems and marketplaces much more diverse and deep than the traditional vendors. You know, we have a clearer picture of Microsoft's sort of hybrid and edge strategy because the company has such an enormous legacy business, it really had to think about that much more deeply. It wasn't a blank sheet of paper like AWS. It's going to be interesting at reinvent this year if new CEO, Adam Selipsky, will talk about this. And it will be good to hear how he's thinking about the next decade, how AWS thinks about hybrid and edge, I guarantee that with their developer affinity and custom Silicon capabilities, they're thinking about it differently than traditional enterprise players. And as we've stressed in this segment, they have across the board momentum. Now to quantify that, let's take a look at AWS as portfolio in the spending momentum within its product segments. This chart shows AWS's net scores or spending momentum in the areas where AWS participates in the ETR taxonomy. Again, note that red line. Anything above 40% is considered an elevated watermark. We're showing data from last October, this past July and the latest October 21 survey. That yellow line or a bar. What's notable is the yellow versus the gray bars up across the board for the most part, other than chime... And by the way, other than chime, everything is above the 40% mark as well. Now, we've highlighted database because we feel it's one of the most strategic sectors in a real battleground. So we want to drill into that a bit. Here's our familiar X Y graph showing Net score on the Y axis, remember, that's, again, spending momentum and market share or pervasiveness in the survey on the horizontal axis. This data, by the way, includes on-prem and Cloud database data warehouse. So keep that in mind. Let's start with one of our favorite topics; Snowflake. We've reported again and again and again, that we've never seen anything like this. The company's net score has moderated ever so slightly this quarter, but it's still just below 80%. Very highly elevated. Well, above that 40% mark. It's Snowflake's presence continues to grow as a gain share in the market. Snowflake is growing revenue in the triple digits. It's an insane pace, hence its current $115 billion market cap as of this episode. Now that said, all three US-based Cloud players there are above the 40% line with AWS and Microsoft having significant presence on the horizontal axis. You see Cockroach Labs, Redis, Couchbase, they're all elevated or highly elevated. Couchbase just went public this summer. So that may help with its presence. MongoDB, they're killing it. They have a $37 billion market cap as of this episode. The stock has been on a tear. You see MariaDB was also in the mix. And then of course you have Oracle, the database leader. Look, they continue to invest in making the Oracle database and other software like MySQL, the best solution for mission critical workloads, and they're investing in their Cloud. But you can see overall, they just don't have the momentum from a spending standpoint that the others do because the declines in their legacy business. And they've been around a long time. Those declines are not fully offset by the growth in Cloud database and Cloud migration. But look, Oracle is a financial powerhouse with a $250 billion plus market cap. And the stock has done very well this past year. Up over 60%. Cloudera is going private. So it can hide the pain of the transitions that it's undergoing between the legacy install bases of Cloudera and Hortonworks. It's just a tough situation. When the companies came together, Cloudera essentially had a dead end. Each of those respective platforms and migrate their customers to a more modern stack as part of its Cloud strategy. Ironic that it's name is Cloudera. You know, that's always a difficult thing to do. So as a private company, Cloudera can maybe get off that 90 day shot clock and buy some time to invest without getting hammered by the street. And you know, Teradata consistently has not shown up well in the ETR dataset. It's transitioned to Cloud and cross-Cloud still hasn't shown momentum in the surveys. So, look right now, it's looking like the rich get richer. So just to quantify that a little bit, let's line up some of the database players and look a little bit more closely at net score. This chart shows the spending momentum or lack thereof with the net score or spending velocity granularity that we described before. Remember, green is spending more, red is spending less, bright red is leaving the platform, bright green is adding the platform. You take red, subtract red from the green, and that gives you a net score. Snowflake, as we said, tops the list. You can see the granularity there. You can compare the performance. In a little different view to understand how these scores are derived, look, the ideal profile is a solid lime green, a big forest green, a not too large gray and ideally little or no bright red AKA defections. And you can see the green funnel in the gray increasing prominence as the vendor momentum declines. Interestingly, with the exception of Cloudera and Teradata, defections are all in the single digits or nonexistent. In the case of Snowflake, Redis, red is no red at all, but small sample, Couchbase has no defections and very little defection for the giant Microsoft. Incredibly impressive. This speaks to how hard it is to migrate off of a database no matter how disgruntled you are. The more common scenario is to isolate the database and build new functionality on modern platforms. Okay, so what to watch out for. Well, reinvent this coming up next month. Oh this month. It's the first time someone other than Andy Jassy will be keynoting as CEO. 15 years of Cloud, this is the 10th re-invent, which is always a market for the direction of the industry. I've said many times that the last decade was largely about IT transformation powered by the Cloud. I believe we're entering a new era of business transformation where the Cloud is going to play a significant role. But the Cloud is evolving from a set of remote services out there in the Cloud to an omnipresent platform on top of which many customers and technology companies can innovate. And virtually every industry will be impacted by Cloud. However it evolves in the coming decade. The question will be, how fast can you go? And how will players like AWS and Microsoft and many others that are building on top of these platforms make it easier for you to go fast? That's what I'll be watching for at re-invent and beyond. Okay, that's a wrap for today. Remember, these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis podcasts. 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, david.vellante@siliconangle.com. You can DM me @dvellante or 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. We'll see you at re-invent. (soft upbeat music)

>> Narrator: From around the globe, it's theCUBE with coverage of KubeCon and CloudNativeCon Europe, 2021 Virtual brought to you by Red Hat, the Cloud Native Computing Foundation and Ecosystem Partners. >> Hello, welcome back to theCUBE'S coverage of KubeCon and CloudNativeCon 2021 Virtual, I'm John Furrier your host of theCUBE. We've got two great guests here, always great to talk to the KubeCon co-chairs and we have Stephen Augustus Head of Open Source at Cisco and also the KubeCon co-chair great to have you back. And Jasmine James Manager and Engineering Effectives at Twitter, the KubeCon co-chair, she's new on the job so we're not going to grill her too hard but she's excited to share her perspective, Jasmine, Stephen great to see you. Thanks for coming on theCUBE. >> Thanks for having us. >> Thank you. >> So obviously the co-chairs you guys see everything upfront Jasmine, you're going to learn that this is a really kind of key fun position because you've got to multiple hats you got to wear, you got to put a great program together, you got to entertain and surprise and delight the attendees and also can get the right trends, pick everything right and then keep that harmonious vibe going at CNCF and KubeCon is hard so it's a hard job. So I got to ask you out of the gate, what are the top trends that you guys have selected and are pushing forward this year that we're seeing evolve and unfold here at KubeCon? >> For sure yeah. So I'm excited to see, and I would say that some of the top trends for Cloud Native right now are just changes in the ecosystem, how we think about different use cases for Cloud Native technology. So you'll see lot's of talk about new architectures being introduced into Cloud Native technologies or things like WebAssembly. WebAssembly Wasm used cases and really starting to and again, I think I mentioned this every time, but like what are the customer used cases actually really thinking about how all of these building blocks connect and create a cohesive story. So I think a lot of it is enduring and will always be a part. My favorite thing to see is pretty much always maintainer and user stories, but yeah, but architecture is Wasm and security. Security is a huge focus and it's nice to see it comes to the forefront as we talked about having these like the security day, as well as all of the talk arounds, supply chain security, it has been a really, really, really big event (laughs) I'll say. >> Yeah. Well, great shot from last year we have been we're virtual again, but we're back in, the real world is coming back in the fall, so we hopefully in North America we'll be in person. Jasmine, you're new to the job. Tell us a little about you introduce yourself to the community and tell more about who you are and why you're so excited to be the co-chair with Stephen. >> Yeah, absolutely. So I'm Jasmine James, I've been in the industry for the past five or six years previous at Delta Airlines, now at Twitter, as a part of my job at Delta we did a huge drive on adopting Kubernetes. So a lot of those experiences, I was very, very blessed to be a part of in making the adoption and really the cultural shift, easy for developers during my time there. I'm really excited to experience like Cloud Native from the co-chair perspective because historically I've been like on the consumer side going to talk, taking all those best practices, stealing everything I could into bring it back into my job. So make everyone's life easier. So it's really, really great to see all of the fantastic ideas that are being presented, all of the growth and maturity within the Cloud Native world. Similar to Stephen, I'm super excited to hear about the security stuff, especially as it relates to making it easy for developers to shift left on security versus it being such an afterthought and making it something that you don't really have to think about. Developer experience is huge for me which is why I took the job at Twitter six months ago, so I'm really excited to see what I can learn from the other co-chairs and to bring it back to my day-to-day. >> Yeah, Twitter's been very active in open source. Everyone knows that and it's a great chance to see you land there. One of the interesting trends is this year I'll see besides security is GitOps but the one that I think is relevant to your background so fresh is the end user contributions and involvement has been really exploding on the scene. It's always been there. We've covered, Envoy with Lyft but now enterprise is now mainstream enterprises have been kind of going to the open source well and bringing those goodies back to their camps and building out and bringing it back. So you starting to see that flywheel developing you've been on that side now here. Talk about that dynamic and how real that is an important and share some perspective of what's really going on around this explosion around more end user contribution, more end user involvement. >> Absolutely. So I really think that a lot of industry like players are starting to see the importance of contributing back to open source because historically we've done a lot of taking, utilizing these different components to drive the business logic and not really making an investment in the product itself. So it's really, really great to see large companies invest in open source, even have whole teams dedicated to open source and how it's consumed internally. So I really think it's going to be a big win for the companies and for the open source community because I really am a big believer in like giving back and making sure that you should give back as much as you're taking and by making it easy for companies to do the right thing and then even highlighting it as a part of CNCF, it'll be really, really great, just a drive for a great environment for everyone. So really excited to see that. >> That's really good. She has been awesome stuff. Great, great insight. Stephen, I just have you piggyback off that and comment on companies enterprises that want to get more involved with the Cloud Native community from their respective experiences, what's the playbook, is there a new on-ramps? Is there new things? Is there a best practice? What's your view? I mean, obviously everyone's growing and changing. You look at IT has changed. I mean, IT is evolving completely to CloudOps, SRE get ops day two operations. It's pretty much standard now but they need to learn and change. What's your take on this? >> Yeah, so I think that to Jasmine's point and I'm not sure how much we've discussed my background in the past, but I actually came from the corporate IT background, did Desktop Sr, Desktop helped us support all of that stuff up into operations, DevOps, SRE, production engineering. I was an SRE at a startup who used core West technologies and started using Kubernetes back when Kubernetes is that one, two, I think. And that was my first journey into Cloud Native. And I became core less is like only customer to employee convert, right? So I'm very much big on that end user story and figuring out how to get people involved because that was my story as well. So I think that, some of the work that we do or a lot of the work that we do in contributor strategy, the SIG CNCF St. Contributor Strategy is all around thinking through how to bring on new contributors to these various Cloud Native projects, Right? So we've had chats with container D and linker D and a bunch of other folks across the ecosystem, as well as the kind of that maintainer circle sessions that we hold which are kind of like a private, not recorded. So maintainers can kind of get raw and talk about what they're feeling, whether it be around bolstering contributions or whether it'd be like managing burnout, right? Or thinking about how you talk through the values and the principles for your projects. So I think that, part of that story is building for multiple use cases, right? You take Kubernetes for example, right? So Ameritas chair for sync PM over in Kubernetes, one of the sub project owners for the enhancements sub project which involves basically like figuring out how we intake new enhancements to the community but as well as like what the end user cases are all of the use cases for that, right? How do we make it easy to use the technology and how we make it more effective for people to have conversations about how they use technology, right? So I think it's kind of a continuing story and it's delightful to see all of the people getting involved in a SIG Contributor Strategy, because it means that they care about all of the folks that are coming into their projects and making it a more welcoming and easier to contribute place so. >> Yeah. That's great stuff. And one of the things you mentioned about IT in your background and the scale change from IT and just the operational change over is interesting. I was just talking with a friend and we were talking about, get Op and, SRAs and how, in colleges is that an engineering track or is it computer science and it's kind of a hybrid, right? So you're seeing essentially this new operational model at scale that's CloudOps. So you've got hybrid, you've got on-premise, you've got Cloud Native and now soon to be multi-cloud so new things come into play architecture, coding, and programmability. All these things are like projects now in CNCF. And that's a lot of vendors and contributors but as a company, the IT functions is changing fast. So that's going to require more training and more involvement and yet open source is filling the void if you look at some of the successes out there, it's interesting. Can you comment on the companies that are out there saying, "Hey, I know my IT department is going to be turning into essentially SRE operations or CloudOps at scale. How do they get there? How could they work with KubeCon and what's the key playbook? How would you answer that? >> Yeah, so I would say, first off the place to go is the one-on-one track. We specifically craft that one-on-one track to make sure that people who are new to Cloud Native get a very cohesive story around what they're trying to get into, right? At any one time. So head to the one-on-one track, please add to the one-on-one track, hang out, definitely check out all of the keynotes that again, the keynotes, we put a lot of work into making sure these keynotes tell a very nice story about all of the technology and the amount of work that our presenters put into it as well is phenomenal. It's top notch. It's top notch every time. So those will always be my suggestions. Actually go to the keynotes and definitely check out the one-on-one track. >> Awesome. Jasmine, I got to get your take on this now that you're on the KubeCon and you're co-chairing with Stephen, what's your story to the folks that are in the end user side out there that were in your old position that you were at Delta doing some great Kubernetes work but now it's going beyond Kubernetes. I was just talking with another participant in the KubeCon ecosystem is saying, "It's not just Kubernetes anymore. There's other systems that we're going to deploy our real-time metrics on and whatnot". So what's the story? What's the update? What do you see on the inside now now that you're on board and you're at a Hyperscale at Twitter, what's your advice? What's your commentary to your old friends and the end user world? >> Yeah. It's not an easy task. I think that was, you had mentioned about starting with the one-on-one is like super key. Like that's where you should start. There's so many great stories out there in previous KubeCon that have been told. I was listening to those stories and the great thing about our community is that it's authentic, right? We're telling like all of the ways we tripped up so we can prevent you from doing this same thing and having an easier path, which is really awesome. Another thing I would say is do not underestimate the cultural shift, right? There are so many tools and technologies out there, but there's also a cultural transformation that has to happen. You're shifting from, traditional IT roles to a really holistic like so many different things are changing about the way infrastructure was interacted with the way developers are developing. So don't underestimate the cultural shift and make sure you're bringing everyone to the party because there's a lot of perspectives from the development side that needs to be considered before you make the shift initially So that way you can make sure you're approaching the problem in the right way. So those would be my recommendation. >> Also, speaking of cultural shifts, Stephen I know this is a big passion of yours is diversity in the ecosystem. I think with COVID we've seen probably in the past two years a major cultural shifts on the personnel involved, the people participating, still a lot more work to get done. Where are we on diversity in the ecosystem? How would you rate the progress and the overall achievements? >> I would say doing better, but never stop what has happened in COVID I think, if you look across companies, if you look across the opportunities that have opened up for people in general, there have been plenty of doors that have shut, right? And doors that have really made the assumption that you need to be physical are in person to do good work. And I think that the Cloud Native ecosystem the work that the LF and CNCF do, and really the way that we interact in projects has kind of pushed towards this async first, this remote first work culture, right? So you see it in these large corporations that have had to change the travel policies because of COVID and really for someone who's coming off being like a field engineer and solutions architect, right? The bread and butter is hopping on and off a plane, shaking hands, going to dinner, doing the song and dance, right? With customers. And for that model to functionally shift, right? Having conversations in different ways, right? And yeah, sometimes it's a lot of Zoom calls, right? Zoom calls, webinars, all of these things but I think some of what has happened is, you take the release team, for example, the Kubernetes release team. This is our first cycle with Dave Vellante who's our 121 released team lead is based in India, right? And that's the first time that we've had APAC region release team lead and what that forced us to do, we were already working on it. But what that forced us to do is really focused on asynchronous communication. How can we get things done without having to have people in the room? And we were like, "With Dave Vellante in here, it either works or it doesn't like, we're either going to prove that what we've put in place works for asynchronous communication or it doesn't." And then, given that a project of this scale can operate just fine, right? Right just fine delivering a release with people all across the globe. It proves that we have a lot of flexibility in the way that we offer opportunities, both on the open source side, as well as on the company side. >> Yeah. And I got to say KubeCon has always been global from day one. I was in Shanghai and I was in hung, Jo, visiting Ali Baba. And who do I see in the lobby? The CNCF crew. And I'm like, "What are you guys doing here?" "Oh, we're here talking to the cloud with Alibaba." So global is huge. You guys have nailed that. So congratulations and keep that going. Jasmine, your perspective is women in tech. I mean, you're seeing more and more focus and some great doors opening. It's still not enough. We've been covering this for a long time. Still the numbers are down, but we had a great conference recently at Stanford Women in Data Science amazing conference, a lot of power players coming in, women in tech is evolving. What's your take on this still a lot more work to done. You're an inspiration. Share your story. >> Yeah. We have a long way to go. There's no question about it. I do think that there's a lot of great organizations CNCF being one of them, really doing a great job at sharing, networking opportunities, encouraging other women to contribute to open source and letting that be sort of the gateway into a tech career. My journey is starting as a systems engineer at Delta, working my way into leadership, somehow I'm not sure I ended up there but really sort of shifting and being able to lift other women up has been like so fortunate to be able to do that. Women who code being a mentor, things of that nature has been a great opportunity, but I do feel like the open source community has a long way go to be a more welcoming place for women contributors, things like code of conduct, that being very prevalent making sure that it's not daunting and scary, going into GitHub and starting to create a PR for out of fear of what someone might say about your contributions instead of it being sort of an educational experience. So I think there's a lot of opportunities but there's a lot of programs, networking opportunities out there, especially everyone being remote now that have presented themselves. So I'm very hopeful. And the CNCF, like I said is doing a great job at highlighting these women contributors that are making changes to CNCF projects in really making it something that is celebrated which is really great. >> Yeah. You know that I love Stephen and we thought this last time and the Clubhouse app has come online since we were last talking and it's all audio. So there's a lot of ideas and it's all open. So with a synchronous first you have more access but still context matters. So the language, so there's still more opportunities potentially to offend or get it right so this is now becoming a new cultural shift. You brought this up last time we chatted around the language, language is important. So I think this is something that we're keeping an eye on and trying to keep open dialogue around, "Hey it matters what you say, asynchronously or in texts." We all know that text moment where someone said, "I didn't really mean that." But it was offensive or- >> It's like you said it. (laughs) >> (murmurs) you passionate about this here. This is super important how we work. >> Yeah. So you mentioned Clubhouse and it's something that I don't like. (laughs) So no offense to anyone who is behind creating new technologies for sure. But I think that Clubhouse from, if you take platforms like that, let's generalize, you take platforms like that and you think about the unintentional exclusion that those platforms involve, right? If you think about folks with disabilities who are not necessarily able to hear a conversation, right? Or you don't provide opportunities to like caption your conversations, right? That either intentionally or unintentionally excludes a group of folks, right? So I've seen Cloud Native, I've seen Cloud Native things happen on a Clubhouse, on a Twitter Spaces. I won't personally be involved in them until I know that it's a platform that is not exclusive. So I think that it's great that we're having new opportunities to engage with folks that are not necessarily, you've got people prefer the Slack and discord vibe, you've got people who prefer the text over phone calls, so to speak thing, right? You've got people who prefer phone calls. So maybe like, maybe Clubhouse, Twitter Spaces, insert new, I guess Disco is doing a thing too- >> They call it stages. Disco has stages, which is- >> Stages. They have stages. Okay. All right. So insert, Clubhouse clone here and- >> Kube House. We've got a Kube House come on in. >> Kube House. Kube House. >> Trivial (murmurs). >> So we've got great ways to engage there for people who prefer that type of engagement and something that is explicitly different from the I'm on a Zoom call all day kind of vibe enjoy yourselves, try to make it as engaging as possible, just realize what you may unintentionally be doing by creating a community that not everyone can be a part of. >> Yeah. Technical consequences. I mean, this is key language matters to how you get involved and how you support it. I mean, the accessibility piece, I never thought about that. If you can't listen, I mean, you can't there's no content there. >> Yeah. Yeah. And that's a huge part of the Cloud Native community, right? Thinking through accessibility, internationalization, localization, to make sure that our contributions are actually accessible, right? To folks who want to get involved and not just prioritizing, let's say the U.S. or our English speaking part of the world so. >> Awesome. Jasmine, what's your take? What can we do better in the world to make the diversity and inclusion not a conversation because when it's not a conversation, then it's solved. I mean, ultimately it's got a lot more work to do but you can't be exclusive. You got to be diverse more and more output happens. What's your take on this? >> Yeah. I feel like they'll always be work to do in this space because there's so many groups of people, right? That we have to take an account for. I think that thinking through inclusion in the onset of whatever you're doing is the best way to get ahead of it. There's so many different components of it and you want to make sure that you're making a space for everyone. I also think that making sure that you have a pipeline of a network of people that represent a good subset of the world is going to be very key for shaping any program or any sort of project that anyone does in the future. But I do think it's something that we have to consistently keep at the forefront of our mind always consider. It's great that it's in so many conversations right now. It really makes me happy especially being a mom with an eight year old girl who's into computer science as well. That there'll be better opportunities and hopefully more prevalent opportunities and representation for her by the time she grows up. So really, really great. >> Get her coding early, as I always say. Jasmine great to have you and Stephen as well. Good to see you. Final question. What do you hope people walk away with this year from KubeCon? What's the final kind of objective? Jasmine, we'll start with you. >> Wow. Final objective. I think that I would want people to walk away with a sense of community. I feel like the KubeCon CNCF world is a great place to get knowledge, but also an established sense of community not stopping at just the conference and taking part of the community, giving back, contributing would be a great thing for people to walk away with. >> Awesome. Stephen? >> I'm all about community as well. So I think that one of the fun things that we've been doing, is just engaging in different ways than we have normally across the kind of the KubeCon boundaries, right? So you take CNCF Twitch, you take some of the things that I can't mention yet, but are coming out you should see around and pose KubeCon week, the way that we're engaging with people is changing and it's needed to change because of how the world is right now. So I hope that to reinforce the community point, my favorite part of any conference is the hallway track. And I think I've mentioned this last time and we're trying our best. We're trying our best to create it. We've had lots of great feedback about, whether it be people playing among us on CNCF Twitch or hanging out on Slack silly early hours, just chatting it up. And are kind of like crafted hallway track. So I think that engage, don't be afraid to say hello. I know that it's new and scary sometimes and trust me, we've literally all been here. It's going to be okay, come in, have some fun, we're all pretty friendly. We're all pretty friendly and we know and understand that the only way to make this community survive and thrive is to bring on new contributors, is to get new perspectives and continue building awesome technology. So don't be afraid. >> I love it. You guys have a global diverse and knowledgeable and open community. Congratulations. Jasmine James, Stephen Augustus, co-chairs for KubeCon here on theCUBE breaking it down, I'm John Furrier for your host, thanks for watching. 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>> From the cube studios in Palo Alto in Boston bringing you data-driven insights from the cube in ETR. This is breaking analysis with Dave Vellante. >> There are four A players, in the IS slash pass hyperscale cloud services space, AWS, Azure, Alibaba, and alphabet, pretty clever, huh? In our view, these four have the resources, the momentum, and stamina to outperform all others virtually indefinitely. Now combined, we believe these companies will generate more than $115 billion in 2021 IaaS and PaaS revenue. That is a substantial chunk of market opportunity that is growing as a whole in the mid 30% range in 2021. Welcome to this week's Wiki bond cube insights, powered by ETR. In this breaking analysis, we are initiating coverage of Alibaba for our IaaS and PaaS market segments. And we'll update you on the latest hyperscale cloud market data, and survey data from ETR. Big week in hyperscale cloud land, Amazon and alphabet reported earnings and AWS CEO Andy Jassy was promoted to lead Amazon overall. I interviewed John Furrier on the cube this week. John has a close relationship with Jassy and a unique perspective on these developments. And we simulcast the interview on clubhouse, and then hosted a two hour clubhouse room that brought together all kinds of great perspectives on the topic. And then, we took the conversation to Twitter. Now in that discussion, we were just riffing on our updated cloud estimates and our numbers. And here's this tweet that inspired the addition of Alibaba. Now this gentleman is a tech journalist out of New Delhi and he pointed out that we were kind of overlooking Alibaba and I responded that no, we do not just discounting them but we just need to do more homework in the company's cloud business. He also said we're ignoring IBM, but really they're not in this conversation as a hyperscale IaaS competitor to the big four in our view. And we'll just leave it at that for now on IBM, but, back to Alibaba and the big four, we actually did some homework. So thank you for that suggestion. And this chart shows our updated IaaS figures and includes the full year 2020 which was pretty close to our Q4 projections. You know, the big change is we've added Alibaba in the mix. Now these four companies last year, accounted for $86 billion in revenue, and they grew it 41% rate combined relative to 2019. Now, notably as your revenue for the first time is more than half of that of AWS's revenue which of course hit over $45 billion. AWS's revenue, over top 45 billion last year, which is just astounding. Alibaba you'll note, is larger than Google cloud. The Google cloud platform, I should say GCP, at just over eight billion for Alibaba. Now, the reason Baba is such a formidable competitor, is because the vast majority of its revenue comes from China inside that country. And the company do have plans to continue their international expansion, so we see Alibaba as a real force here. Their cloud business showed positive EBITDA for the first time in the history of the company last quarter. So that has people excited. Now, Google, as we've often reported, is far behind AWS and Azure, despite its higher growth rates Google's overall cloud business lost 5.6 billion in 2020 which has some people concerned. We on the other hand are thrilled, because as we've reported in our view, Google needs to get its head out of its ads cloud is it's future. And we're very excited about the company pouring investments into its cloud business. Look with $120 billion essentially in the balance sheet, we can think of a better use of its cash. Now, I want to stress that these figures are our best efforts to create an apples to apples comparison across all four clouds. Many people have asked about, how much of these figures represent, for example, Microsoft office 365 or Google G suite, which by the way now is called workspaces. And the answer is our intention is $0. These are our estimates of worldwide IaaS in PaaS revenue. You know, some of said, we're too low. Some of said, we're too high. Hey, if you have better numbers, Please share them, happy to have a look. Now you maybe asking, what are the drivers of these figures and the growth that we're showing here? Well, all four of these companies, of course, they're benefiting from an accelerated shift to digital as a result to COVID, but each one has other tailwinds. You know, for example, AWS, it's Capitalizing on its a large headstart. It's created tremendous brand value. And as well, despite the fact that, while we estimate that more than 75% of AWS revenue comes from compute and storage, AWS is feature and functional differentiation combined with this large ecosystem is a very much a driving force of it's growth. In the case of Azure, in addition to its captive software application estate, the company on its earnings calls cited strong growth in its consumption based business across all of its industries and customer segments. As we've said, many times, Microsoft makes it really easy for customers to tap into Azure and a true consumption pricing model, with no minimums and cancel any time. Those kinds of terms make it extremely attractive to experiment and get hooked. We certainly saw this with AWS over the years. Now for Google it's growth is being powered by its outstanding technology, and in particular its prowess in AI and analytics. As well we suspect that much of the losses in Google cloud are coming from large go to market investments for Google cloud platform, and they're paying growth dividends. Now, as Tim Crawford said on Twitter, 6 billion, you know that's not too shabby. Also Google cited wins at Wayfair in Etsy, that Google is putting forth in our view to signal that many retailers they might be are you reluctant to do business with Amazon, was of course a big retailer competitor. These are two high profile names, we'd like to see more in future quarters and likely will. Now let's give you another view of this data and paint a picture of, how the pie is being carved out in the market. Actually we'll use bars because my, millennials sounding boards they hate pie charts. And I like to pay attention, to these emerging voices. At any rate amongst these four, AWS has more than half of the market. AWS and Azure are well ahead of the rest. And we think we'll continue to hold serve for quite some time. Now while we're impressed with Alibaba, they're currently constrained to doing business mostly in China. And we think it'll take many years for Baba and GCP to close that gap on the two leaders if they'll ever even get there. Now let's take a look at, what the customers are saying within the ETR survey data. The chart that we're showing here, this is X, Y chart that we show all the time. It's got net score or spending moments on the vertical axis, and market share or the pervasiveness in the datasets in the survey on the horizontal axis. Now on the upper right, you can see the net scores and the number of mentions for each company and the detailed behind this data. And what we've done here is cut the January survey data of 1,262 respondents, you can see that in filtered in there on the left, and we've filtered the data by cloud meaning the respondents are answering about the companies, cloud computing offerings only. So we're filtering out anything of the non-cloud spend. That's a nice little capability of the ETR platform. Azure is really quite amazing to us. It's got a net score of 72.6%, and that's across 572 responses out of the 1262. AWS is the next most pervasive in the data set with 492 shared accounts and a net score of 57.1%. Now, you may be wondering, well, why is Azure bigger in the dataset than AWS? And when we just told you that the opposite is the case in the market in the previous slide. And the answer is, like this is a survey and it's a lot of Microsoft out there, they're everywhere. And I have no doubt that the respondants notion of cloud doesn't directly map into IaaS and PaaS views of the world, but the trends are clear and consistent. Amazon and Azure, they dominate in this market space. Now for context, we've included functions in the form of AWS Lambda as your functions and Google cloud functions. Because, as you can see, there's a lot of spending momentum in these capabilities in these services. You'll also note, that we've added Alibaba to this chart, and it's got a respectable 63.6% net Score, but there are only 11 shared responses in the data. So they'll go into the bank on these numbers, but look, 11 data points, we'll take it. It's better than zero data points. We've also added VMware cloud on AWS in this chart, and you can see that, that capability that service, that has the momentum and you can see those ones that we've highlighted above the 40% red dotted line, that's where the real action in the market is. So all of those offerings have very strong or strong spending velocity in the ETR data set. Now, for context, we've put Oracle and IBM in the chart. And you can see, they both have, you know they've got a decent presence in the data set. They have 132 mentions and 81 responses respectively. So Oracle, they've got a positive net score of 16.7%, and IBM is in a negative 6.2%. Now, remember this is for their cloud offerings, as the respondents in the data set see them. So what does this mean? It says that among the 132 survey respondents answering that they use Oracle cloud, 16.7% more customers are spending more on Oracle's cloud than are spending less. In the case of IBM, it says more customers are spending less than spending more. Both companies are in the red zone, and show far less momentum than the leaders. Look, I've said many times that the good news is, that Oracle and IBM at least have clouds. But they're not direct competitors of the big four in our view, there just not. They have a large software business, and they can migrate their customers, to their respective clouds and market hybrid cloud services. Their definition of cloud is most certainly different than that of AWS, which is fine, but both companies use what I call a kitchen sink method of reporting their cloud business. Oracle includes, cloud and license support, often with revenue recognition at the time of contract, With a term that's renewable and, it also includes on-prem fees, for things like database and middleware, and if, you want to call that cloud, fine. IBM is just as bad, maybe they're worse and includes so much legacy stuff and its cloud number to hide the ball. It's just not even worth trying to unpack for this episode, I have previously and frankly, it's just not a good use of time. Now, as I've said before, both companies they're in the game that can make good money provisioning infrastructure to support their respective software businesses. I just don't consider them hyperscale class clouds which are defined by the big four, and really only those four. And I'm sure I'll get hate mail about that statement, and I'm happy to defend that position, so please reach out. Okay, but one other important thing that we want to discuss is something that came up this week in our Twitter conversation. Here's a tweet from Matt Baker who had strategic planning for Dell. He was responding to someone who commented on our cloud data, basically saying that, with all that cloud revenue who took the hit, which pockets did it come out of, and Matt was saying, look, it's coming out of customer pockets, but can we please end this zero sum game narrative. In other words, it's not a dollar for cloud that doesn't translate into a lost dollar from on-prem for the legacy companies. So let's take a look at that. For first I would agree, with Matt Baker, it's not a one for one swap of spend but there's definitely been an impact. And here's some data from ETR that can, maybe give us some insight here. What this chart shows is a cut of 915 hyperscale cloud accounts. So within those big four, and within those accounts we show the spending velocity or net score cut within further sectors representative of these on-prem players. So servers, storage and networking, so we cut the data on those three segments. And we're looking here at, VMware, Cisco, Dell, HPE, and IBM, for 2020 and into 2021. It's kind of an interesting picture, it shows the net scores for the January of 20 April, July and October 20 surveys and the January 21 surveys. Now all the on-prem players, they were of course impacted by COVID, IBM seems to be that counter trend line. Not that they weren't impacted, but they have this notable mainframe cycle thing going on. And you know, they're in a down cycle now. So it's kind of opposite of the other guys in terms of the survey momentum. And you can see pretty much, all the others are showing upticks headed into 2021, Cisco, you know kind of flattish, but stable and held up a bit. So to Matt Baker's point, despite the 35% or so growth expected for the big four and 2021 the on-prem leaders are showing some signs of positive spending momentum. So let's dig into this a little bit further, 'cause we're not saying cloud hasn't hurt on prem spending. You know, of course it has. Here's that same picture, over a 10 year view. So you're seeing this long, slow, decline occur, and it's no surprise. If you think about the prevailing model for servers, storage, and networking, on prem in particular. Servers have been perpetually under utilized, even with virtualization. You know, with the exception of like backup jobs, there aren't many workloads that can max out server utilization. So we kept buying more servers to give us performance headroom and ran at 20, 30% utilization, you know in a good day. Yes I know some folks can get up over 50%, but generally speaking servers are well under utilized in storage my gosh, it's kind of the same story, maybe even worse. Because for years it was powered by a mechanical system. So more spindles are required to gain performance, lots of copying going on, lots of, you know, pre-flash waste. And in networking it was a story of got to buy more ports. You've got to buy more ports. In the case of these segments, customers will just defense essentially, forced in this endless cycle of planning, procuring, you know, first planning. They got to get the secure the CapEx, and then they procure, and then they over-provision, and then they manage, you know, ongoing. So then along comes AWS, and says, try this on for size and you can see from that chart, the impact of cloud on those bellwether on-prem infrastructure players. Now, just to give you a little bit more insight on this topic, here's a picture of the wheel charts from the ETR data set. For AWS Microsoft, Google, and we brought in VMware to compare them. A wheel chart shows the percent of customers saying they'll either add a platform new that's the lime green. Increased spending by more than 5%, that's the forest green spend flat relative to last year. That's the gray spend less by more than 5% down, that's the pinkish or leave the platform, that's the Bright red. You subtract the red from the green and you get a percentage that represents net score, AWS with a net score of 60% is off the charts good. Microsoft remember, this includes the entire Microsoft business portfolio, not just Azure, so it's still really strong. Google, frankly, we'd like to see higher net scores and VMware's, you know, so there's a gold standard for on-prem. So we include them, so you can see for reference the strong, but notice they got a much, much bigger flat spending, which is what you would expect from some of these more mature players. Now let's compare these scores to the other, on-prem Kings. So this is not surprising to see, but the greens, they go down, the flats that gray area goes up compared to the cloud guys and the red which is virtually non-existent within AWS, goes into the high teens with the exception of Cisco which despite its exposure to virtually all industries including those hard hit by COVID shows pretty low read scores. So that's, that's good. And I got to share one other, look at this wheel chart for pure storage. We're not really not sure what's happening here, but this is impressive. We're seeing a huge rebound, and you can see we've superimposed as candlestick over comparing previous quarters surveys and, look at the huge up check in the January survey for pure that blue line. That's highlighted in that red dot at ellipse, jumps to a 63% net score from below 20% last quarter. You know, we'll see, I've never seen that kind of uptick before for an established company. And, you know, maybe it's pent up demand or some other anomaly in the data. We'll find out when pure reports in 2021, because remember these are forward looking surveys. But the point is, you still see action going on in hybrid and on-prem, and despite the freight train that is cloud, coming at the legacy players. You know, not that pure is legacy, but it's, you know, it's no longer a lanky teenager. And I think the bottom line, coming back to Matt Baker's point, is there are opportunities that the on-prem players can pursue in hybrid and multi-cloud, and we've talked about this a lot where you're building abstraction layer, on top of the hyperscale clouds and letting them build out their data center presence worldwide, spend on capex, they're going to outspend everybody. And these guys, these on-prem, and hybrid and multi-cloud folks they're going to have to add value on top of that. Now if they move fast, you no doubt there'll be acquiring startups to make that happen. They're going to have to put forth the value proposition and execute on that, in a way that adds clear value above and beyond what the hyperscalers are going to do. Now, the challenge, is picking those right spots, moving fast enough and balancing wall street promises with innovation. There's that same old dilemma. Let's face It. Amazon for years could lose tons of money and not get killed in the street. Google, they got so much cash, they can't spend it fast enough and Microsoft after years of going sideways is finally figured out and the some. Alibaba they're new to our analysis, but it's looking like you know, it's the Amazon of China, Plus ANT despite its regulatory challenges with the Chinese government. So all four of these players, are in the driver's seat in our view. And they're leading in not only cloud, but AI. And of course the data keeps flowing into their cloud. So they're really are in a strong position. Bottom line is we're still early into the cloud platform era and it's morphing. It's from a collection of remote cloud services, into this ubiquitous, sensing, thinking, anticipatory system, that's increasingly automated and working towards full automation. It's intelligent and it's hyper decentralizing toward the edge. One thing's for sure, the next 10 years, they're not going to be the same as the past 10. Okay, that's it for now. Remember I publish each week on Wikibond.com and siliconANGLE.com, these episodes they're all available as podcasts just search for breaking analysis podcast. You can always connect on Twitter. I'm @dvellante or email me at david.Vellante@siliconANGLE.com. I love the comments on LinkedIn and of course in clubhouse the new social app. So please follow me, so that you can get notified when we start a room and riff on these topics. And don't forget to check out etr.plus for all the survey action. This is Dave Vellante for the cube insights powered by ETR be well, and we'll see you next time. (upbeat music)

>> Woman: From theCube studios in Palo Alto in Boston, connecting with thought leaders all around the world. This is theCube conversation. >> Hey, welcome back everybody. Jeff Frick here with theCube coming to you from our Palo Alto studios to have a Cube conversation with a real leader in the industry he's been publishing for a long, long time. I've been following him in social media. First time I've ever get the met in person and kind of a virtual COVID 20, 20 way. And we're excited to welcome into the studio. Bob Evans. He's a founder and principal analyst, the Cloud Wars Media coming to us. Bob where are you coming to us from today? >> In Pittsburgh today. Jeff. Good to see you. >> Awesome. Pittsburgh Pennsylvania. There's a lot of Fricks in Pittsburgh Pennsylvania cause Henry Clay was there many moons ago so that's a good town. So welcome. >> Thank you, Jeff. Thanks. Great to be here. And I look forward to our conversation. >> Absolutely. So let's, let's jump into it. So I know you attended today, the Citrix Cloud Summit you know, we've covered Citrix energy in the past this year, they decided to go we'll obviously virtual like everybody did but they, you know, they did something a little creative I think as, and they broke it into pieces, which, which I think is the way of the future. There's no reason to necessarily aggregate all of your news, all of your customer stuff, all your customer appreciation, the party the partners, all for three days in Vegas. Cause that's the only time you could get the Science Convention Center. So today was the Cloud Summit all day long. First off, just, you know, your general impressions of the event, >> Jeff, you know, I just thought that the guys had hit a really good note about what's going on in the outside world. You know, sometimes I think it's a little awkward when tech companies come in and the first thing they want to talk about is themselves, which I guess in some ways fine but I think the Citrix guys did a really good job at coming outside in here's what's going on in the outside world. Here's how we as a technology player trying to adapt to that and deliver the maximum value to our customers in this time of unprecedented change. So I thought they really nailed that with cloud and some of the other big topics that they laid out >> Great. And you've been covering cloud for a long time and, and you know, COVID is, we're still in it. There's a lot of really bad things that are happening. There's hundreds of thousands of people that are dying and a lot of businesses are getting crushed especially hospitality, travel you know, anything that relies on an aggregation of people. Conversely though we're, we're fortunate to be in the IT industry and in the information industry. And for a lot of industries, it's actually been kind of an accelerant. And one of the main accelerants is this, you know kind of digital transformation and new way to work. And some of these things that were initiatives in play but on March 15th, approximately it was go, right? It was Light switch no more planning, no more talking, it's here now. Ready, set, go. And it's in, you know, Citrix is in a pretty good position in terms of the products that they offer, the services that they offer, the customer base that they have to take advantage of that opportunity and, and you know, go to this, we've all seen the social media memes right? Who's driving your digital transformation the CEO, the CIO, or COVID. And we all know what the answer to the question is. They're pretty well positioned and it seems like, you know, they're doing a good job kind of doubling down on the opportunity. >> Jeff. Yeah. And I'd sure echo your, your initial point there about the nightmare that everybody's experienced over the last six or seven months. There's, there's no way around that yet. It has forced in these categories like, you know, that we've all heard hundreds of thousand time digital transformation to the point where the term almost becomes a cliche but in fact right? You know, it has become something that's really you know, one of the driving forces, touching everybody in the planet, right? There's, and I think digital transformation. Isn't so much about the technology, of course but it's because, you know, there's a couple billion people around the world who want to live digitally enhanced digitally driven lifestyles. And the pandemic only accelerated that as you said. So it triggered things you know, in our personal lives and our new set of requirements and expectations sort of rippled up to the B2C companies and from them back up to the B2B companies So every company on earth, every industry has had to do this. And like you said, if they were, deluding themselves maybe telling themselves these different companies that yeah, we're going fast, we're aggressive. Well, when this thing hit earlier this year as you said, they just had to really slam their foot down. I think that David Henshall from Citrix said that they had some companies that had, they were compressing three years into five months or he said in some cases even weeks. So it's really been extraordinary. And cloud has been the vehicle for these companies to get over into their digital future. >> Right. And let's talk about that for a minute because you know, Moore's law is my favorite law that nobody knows which was, you know, we tend to underestimate, excuse me we tend to overestimate the impact of technology in the short term of specific technology and underestimate the longterm impact. You know, Gardener kind of uses a similar thing with the hype cycle. And then you know, the thing goes at the end, you know, had COVID hit five years ago, 10 years ago, 15 years ago you know, the ease in which the information workers were able to basically just not show up and turn on their computer at home and have access to most of their tools and most of the security and most of their applications that wasn't even possible. So it's a really interesting, you know, just validation on the enabler that we are actually able to not go to work on Tuesday the 16th or whatever the day was. And for the most part, you know, get most of our work done. >> Yeah. Yeah. Jeff, you know, I've thought about it a lot over the last several months. Remember the big consultant companies used to try to do these measures of technology and they'd always come out and say, well, we've done all these studies. And despite the billions of dollars of investment we can't show that IT has actually boosted productivity or, you know, delivered an ROI that customers should be happy with. I was always puzzled by some of the things that went into those. But I would say that today over these last six or seven months to your point, we have seen extraordinary validation of these investments in technology broadly. But specifically I think some of these things that are happening with the cloud, you know, as you've said how fast some companies have been able to do this and then not remarkable thing, Jeff right. About human nature. And we hear a lot about in, in when companies change that relative to changing human behavior changing technology is somewhat easy but you try to change human behavior and it's wicked. Well, we had this highly motivating force behind it, of the pandemic. So you had a desire on the part of people to change. And as you pointed out, there's also this corresponding thing of, you know, the technology was here. It was right. You've got a fast number of companies delivering some extraordinary solutions. And, you know, I thought it was interesting. I think it was a Kirsten Kliphouse from Google cloud. One of Citrix's partners who said that we're two best of breed companies, Citrix and Google cloud. So I thought that, that coming from Google you know, that is very high praise. So again, I think the guys at Citrix are sort of coming into this at the right time with the right set of outside in-approaches and having that flexibility to say that we're moving into territory nobody's ever been both been in before. So we better be able to move as fast as possible. >> Right. Right. And, and just to keep going down the quote line, you know once everyone is taken care of and you, you deal with the health and safety of your people which is a number one, right? The other thing is the great Winston Churchill quote which has never let a good crisis go to waste. And I think you know, David talked about in that, in his keynote that this is an opportunity, He said to challenge assumptions, challenge the models of the past. So, you know get beyond the technology discussion and use this really as a catalyst to rethink the way that you do things. And, you know, I think it's a really interesting moment because there is no model right? There is no, there is no formula for how do you reopen, there was no playbook for how do you shut down? You know, it was, everybody's figuring it out. And you've got kind of all these concurrent processes happening at the same time as everyone tries to figure it out and come to solutions. But clearly, you know, the path to, to leverage as much as you can, is the cloud and the flexibility of the cloud and, you know the ability to, to expand, add more applications. And so, you know, Citrix again, right place, right time right. Solution, but also you know, taking an aggressive tact to take advantage of this opportunity, both in taking care of their customers, but really it's a real great opportunity for them to change a little bit. >> It is. And Jeff, you know, I think if I could just piggyback on you know, your, your guy there Winston Churchill, one of his other quotes, I love it too. And he said, if find yourself crawling through hell, keep going. And I think so many companies have really had to do that now. It's, it's not ideal. It's not maybe the way they plan it but this is the reality we're facing here in 2020 and a couple of things right? I think it requires a new type of leadership within the customer companies right? What, how the CEO gets engaged in saying, I, I'm not going to relegate this to the CIO for this to happen and something else to the CMO. They've got to be front and center on this because people are pretty smart. And then the heightened sensitivity that everybody in every business has around the world today if you think your CEO is just paying lip service to this stuff about digital transformation and all these changes that everybody's going to make, the people aren't going to buy into it. So you've got the leadership thing happening on the one side and into that it's not a vacuum, but into that void or that opportunity of this unprecedented space that you mentioned come the smart, capable forward-looking technology companies that are less concerned with the stuff that they've dragged along with them for years or decade or more. But instead of trying to say, what is the new stuff that people are going to be desperately in need of and how can I help these customers do things that they never did before? It's going to require me as a tech company to do stuff that I've never done before. So I, I've just been really inspired by seeing a lot of the tech companies doing what they are helping their customers to do which is take a product development cycle, look at all the new stuff that came out around COVID and back to work, workspaces. And so on what Citrix, you know others are doing like this, the product development cycles Jeff, you study this stuff closely. It's, it's almost unimaginable. If you had said that somebody within three months within two months, we're going to have a new suite of product available we would have said it just, it's not possible the nice idea but it can't work, but that's happening now, right? >> Yeah. Isn't it interesting that had you asked them on March 10th, they would have told you it's not possible. And by March 20th, they were doing it. >> Yeah. >> At scale, huge companies. And to your point, I think that the good news is they had kind of their own companies to eat their own dog food and get their own employees you know, working from home and then, you know, bake that into the way that they had their go to market. But let's talk a little bit more specifically about work from home or work from anywhere or the new way to work. And it's funny cause that's been bantered about for, for way too long, but now, now it's here. And most indications are that for many people, many companies are saying you're not going to go back for a while. And even when you do go back it's going to be a lot different. So, you know, the new way to work is really important. And there's so much that goes into that. And one of the big pieces that I'm encouraged to hear is how do you measure work? And, you know, there's a great line I heard where, you know work is an output. It's not a place to go. And, you know, I had Martin Michaelson early on in this thing, and he had the great line, you know it's so easy to fake it at work, you know, just look busy and walk around and go to all the meetings where with a work from home or work from anywhere. What the leadership needs to do is, is a couple of things. One, is measure output right? Not activity. And you know, it's great. People can have dinner with their family or go see the kid's baseball game. Or I guess they don't have a baseball games right now but, you know, measure output, not activity which is, doesn't seem to be that revolutionary. But I think it kind of is. And, and then the other thing is really be an enabler and be a, an unblocker for people in terms of a leadership role right? Get out, help get stuff out of the way. And, but unfortunately, the counter is, you know how many apps does a normal person have to interact with every day? And how many notifications do those apps fire off every day between Slack and Asana and Salesforce and, and texts and tweets and everything else. You know, I think there's a real opportunity to take a whole nother level of productivity improvement by removing these, these silly distractions automating, you know, as much of the crap away as we can to enable people to use their brains and have some quiet time and think about things and deliver much better value than this constant reaction to nonstop notifications. >> Yeah. Yeah. Jeff, you know, I loved your point there about the difference between people's outlook on March 10th versus on March 20th. And I believe that, you know, all limitations are self-imposed, right? We tend to form constructs around how we think and allow those then to shape and often restrict or confine our behavior. And here's an example of the CEO of Novartis Pharmaceutical Company. He said, we have been brought up in the pharmaceutical industry to believe that it is immutable law of physics that it's going to take 12 and a half years and two and a half billion dollars to get a new drug approved. And he said in the past with the technology and the processes and the capabilities that that was true it is not true today yet too often, the pharmaceutical industries behave like those external limitations are put in there. So flip that over to one of the customers that, that was at the Citrix Cloud Summit today Jim Noga, who's the CIO at Mass General Brigham. I thought it was remarkable what he said when you asked about how are things going with this work from home? Well, Jim Noga the CIO there said that we had been averaging before COVID 9,000 virtual visits a month. And he said since then that number has gone up to a quarter of a million virtual visits a month or it's 8,000 a day. So they're doing an a day what they used to do in a month. Like, you said it, you tell them that on March 10th, they're not going to believe it but March 20th, it started to become reality. So I think for the customers, they're going to be more drawn to companies that are willing to say, I see your need. I see how fast you want to move. I see where you need to go and do things you never did before. I'm willing to lock elbows with you, and go in on that. And the tech number is that sort of sit back and say, ah well, I'd like to help you there, but that's not what I do. They're going to get destroyed. They're going to get blown out. And I think over the next year or two, we're going to see this massive forcing function in the tech industry. That's going to separate the companies that are able to move at the pace of market and keep up with their customers versus those that are trapped by their past or by their legacy. And it is, going to be a fascinating talk. >> So I throw on a follow up to make sure I understand that number. Those are patient visits per unit time. >> Yeah. At Mass Brigham. So he said 9,000 virtual visits a month is what they're averaging before COVID. He said, now we're up to 250,000 virtual visits per month. >> Wow. >> So it's 8,000 a day. >> Wow. I mean the thing that highlights to me, Bob, and the fact that we're doing this right now, and none of us had to get on an airplane is, you know, I think when people think back or sit back and look at what does this enable? right? What does digital enable? Instead of saying instead of focusing what we can't do, like we can't go out and get a cup of coffee after this is over and we can't and that would be great and we'd have a good time but conversely, there's so many new things that you can do right? And you can reach so many more people than you could physically. And, and for like, you know, events like the one today. And, you know, we cover events all the time. So many more people can attend if they don't have the expense, of flying to Vegas and they don't have to leave the shop or, you know, whatever the limitations are. And we're seeing massive increases in registrants for virtual events, massive increase in new registrants. Who've never attended the, the events before. So I think he really brings up a good point, which is, you know, focus on what you can do and which is a whole new opportunity a whole new space, if you will, as opposed to continuing to whine about the things that we can't do because we can't do anything about those anyway >> No, and you know, that old line of a wish in one hand and spit in the other and see which one fills up first (laughs) you know, one of the other guests that that was on the Cloud Summit today Jeff, I don't know if you got to see 'em, but Steve Shute from SAP who heads up their entire 40,000 person customer success organization he said this about Citrix. "Citrix workspace is the foundation to provide secure cloud based access for this new generation of remote workers." So you get companies like SAP, and, you know, you want to talk about somebody that has earned its way into the, you know the biggest companies in the world and how they go along. You know, it's pretty powerful. They end up, your point Jeff, about how things have changed, focus on what we can do. The former CEO of SAP, Bill McDermott. He recently said, we think of phones as, you know, devices that help us be more productive. We think of computers as devices that help us be more productive. He said, now the world's going to start thinking of the office or the headquarters. It's a productivity tool. That's all it is. It's not the place that measures Hey, he was only at work, four days today. So, you know, he didn't really contribute. It's going to be a productivity tool. So we're going to look at a lot of concepts and just flip them upside down what they meant in February. Isn't going to to mean that much after this incredible change that we've all been through. >> Right. Right. Another big theme I wanted to touch base with you on it was very evident at the at the show today was multicloud right and hybrid cloud. And, you know, I used to work for Oracle in, in the day. And you know Amazon really changed the game in, in public cloud. The greatest line, one of Jeff's best lines is you know, we had seven year headstart. Nobody even was paying attention to the small book seller in Seattle and they completely changed enterprise technology. But what came across today pretty clearly right? As horses for courses, and really focusing at the application first right? The workload first and where that thing runs and how that thing runs, can be any place in that in a large organization you know, this is pick an airline or, or a big bank right? They're going to have stuff running at Oracle. They're going to have stuff running at AWS. They're going to have stuff running on Google. They're going to to have stuff running in Azure. They're going to have stuff running in their data center. IBM cloud, Ali Baba. I mean there's restrictions for location and, and data sovereigncy and all these things that are driving it. And really, you know, kind of drives this concept where the concept of cloud is kind of simple but the actual execution day to day at the enterprise level and managing and keeping track of this stuff, it is definitely a multicloud hybrid cloud. Pick your, pick your, your adjective but it's definitely not a single cloud world. That's for sure. >> Yeah. Yeah. And Jeff, you know, the Citrix customer that I mentioned earlier, Jim Noga is that the CIO at mass General Brigham, one of the other points he made about this was he said he's been very pleased about some of the contributions that cloud has made in, in, in his hospital organizations, you know transformation, what they've been able today and all the new things that they're capable of doing now that they were not people poor. But he said, you know, cloud is a tool. He said, it's not Nirvana. It's not a place for everything. He said, we have some on-premises systems. He said, they're more valuable now than they were a couple of years ago. And then we've got edge devices and we have something else over here. He said, so I think his point was it's important to put the proper value on cloud for all the things it can do for a specific organization, but not the thing that it's a panacea for everything though, big fan, but also a realist about it. >> Great. >> And so from that to the hybrid stuff and multicloud and I know all the big tech vendors would love it and say Oh no, it's not a multicloud, but just be my cloud. Just, just use my stuff. Everything will be easy, but that's not true. So I think Citrix position itself really well big emphasis on security, big emphasis on the experience that employees need to have. It isn't just sort of like a road war you loose five or seven years ago, as long as he, or she can connect through email and, you know, sending a sales data back and forth, they're all set. Now. It's very different. You've got people sitting in a wildly different environments for, you know, six, eight, 10 hours a day and chunk of an hour or two or three here or there. But that, that seamless experience always dependable, always reliable is just, you know, it can't be compromised. And I just thought you have one you know, high level thought about what happened. It was impressive for me to see that Citrix certainly a fine company put it. It's not one of the biggest tech companies in the world but look at the companies we have, the Microsoft, SAP talking about Google Cloud, AWS, you know, up and down the line. So I just thought it was really impressive how they showed their might as sort of a part of a network effect that is undeniable right now. >> Right. Right. And I think it's driven, you know, we hear over and over right? I mean, co-opertition is a very Silicon Valley thing. And ultimately it's about customer choice and the customer's going to choose you know, kind of by workload, even if you will or by budget as to what they're going to do where so you have to be able to operate in that world or you're going to be you're going to get, you're going to get left out unless you're just super dominant and it's a single application and they built it on you and that's it. But that's not realistic. I want to shift gears a little bit Bob, since I'm so happy to be talking to you on another topic, that's, that's a big mega trend and we're slowly seeing more and more applications. That's machine learning and artificial intelligence and you know, and, and the generic conversations about these remind me of the old big data conversations. It's like okay. So what you know, who cares? It doesn't really matter until you apply it. And with all these new applications and even just around the work from home that we discussed earlier, you know, there's so many opportunities to apply machine learning and AI, to very specific functions and tasks to, again, help people prioritize what they're going to do help people not have to deal with the crap that they shouldn't have to do. And really, you know at a whole another level of, of productivity really, based on a smarter way to help them figure out what am I going to do in my next, my next marginal minute? You know, cause ultimately that's the decision that people make when they're sitting down getting work, done it, how do they do the best work? And I think the AI and machine learning opportunities are gargantuan. >> Jeff. The point you made a few minutes ago about, you know, we tend to overestimate the impact of a new technology in the short term and underestimate it, what it'll be overtime well, we've been doing that with AI for the last 40 years but this is going to be sort of the golden age of it. And one of the reasons why I have been so bullish on cloud is it presents like the perfect delivery system for it. This is we see in medicine, there's sometimes breakthroughs at the laboratory level where they've got the new breakthrough medication but they don't have the bullet. They don't have the delivery system to get it in there, cloud's going to be an accelerator for that. And it gives the tech companies, which and this is going to be very good for customers, every big tech company. Now as a data company, every company says, it's an analytics. Everybody says I'm into AI. Every company says I'm into ML. And in a way that's real good for customers cause the competitive level is going to soar. It's going to bring more choice. As you said, the more customers more types of solutions, more sorts of innovation. And it's also going to be incumbent on those tech vendors. You've got to make it as easy as possible, as fast as possible for these customers to get the benefit of it. I think it was Thomas Kurian, the CEO of Google cloud said, Hey, you know, if, if a shoe company or a retailer or a bank had fantastic expertise in data science, they could go out and hire 200 data scientists do this all themselves. He said, but that's not what they do. And they don't want to do that. >> Right. >> So he said, come to the companies who can do it. And I think that we will see changes in how business works driven by ML and AI, unlike anything that we've ever seen. >> Yeah. >> And that's going to happen over the next 12, 18 months. >> Yeah. Baked into everything. Well, Bob, I really am excited that we finally got to catch up in, in person COVID style. Like I said, I've been following you for a long time. So I just gave you the last word before we sign off. You know, you've been in this business for a long time. You've seen lots and lots of waves. You know, this is just another wave with this, with this, you know, gasoline thrown on the fire with, with COVID in terms of the rate of change. And the, you know there's no more talking, the time to move is now, share kind of your perspective as to kind of where we are. And, you know, we're, we're not that far from flipping the calendar to 2021, which is a good thing you know, as you, as you look forward a little bit you know, what's in your mind, what's getting you excited. What's getting you up in the morning. >> Yeah. Jeff, I guess it comes down to this thing of, we, I think here late in 2020, everybody's got a reason to be pretty proud of what we have done, not only in the last six months but over the last several years, if you look at the improvements that have been made in health care and making it available to more people, in education the things that teenagers or young teenagers or even pre-teenagers can do now to learn and explore the world and communicate with people from all over the globe, there's a lot of great things going on, but I think we're going to look back on this point and say, this was, this was a pivot point here in mid and late 2020, when we stopped letting in some ways, as you described it earlier worrying so much about the things we can't do. And instead put more time into what we can do, what breakthroughs can we make. And I think these things we've talked about with AI and ML are going to be a big part of that, the computer industry or the tech industry, maturing and understanding they're not in charge. It's the customers who are in charge here. And the tech companies have to reorient themselves and reimagine themselves to meet the demands of this new fast changing world. And so I think those are some of the mega trends and more and more Jeff, I think these tech companies are going to say that the customers are demanding that the tech companies give them the gift of speed, give them the gift of engaging with customers in new ways, give them the gift of seeing the world as other people see it rather than just through the narrow lens of, you know sometimes the tech bubble that can percolate somewhere out sometimes out in the Palo Alto area. So I, I'm incredibly optimistic about what the future is going to bring. >> Well, Thank you. Thanks for Bob for sharing your insight. You can follow Bob on Twitter. He's got podcasts, he's very prolific writer and again, really, really a great to meet you in person. And thanks for sharing your thoughts >> Jeff, thanks so much. You guys do a fantastic job and it's been a pleasure to be with you. >> Thank you. Allright. He's Bob Evans. I'm Jeff Frick. You're watching theCube from our Palo Alto studios. Thanks for watching. We'll see you next time. (soft music)

>>from around the globe. It's the Cube with digital coverage of VM World 2020 brought to you by VM Ware and its ecosystem partners. Hello and welcome back to the cubes. Virtual coverage of VM World 2020 Virtual I'm John for your host of the Cube, our 11th year covering V emeralds. Not in person. It's virtual. I'm with my coast, Dave. A lot, of course. Ah, guest has been on every year since the cubes existed. Sanjay Putin, who is now the chief operating officer for VM Ware Sanjay, Great to see you. It's our 11th years. Virtual. We're not in person. Usually high five are going around. But hey, virtual fist pump, >>virtual pissed bump to you, John and Dave, always a pleasure to talk to you. I give you more than a virtual pistol. Here's a virtual hug. >>Well, so >>great. Back at great. >>Great to have you on. First of all, a lot more people attending the emerald this year because it's virtual again, it doesn't have the face to face. It is a community and technical events, so people do value that face to face. Um, but it is virtually a ton of content, great guests. You guys have a great program here, Very customer centric. Kind of. The theme is, you know, unpredictable future eyes is really what it's all about. We've talked about covert you've been on before. What's going on in your perspective? What's the theme of your main talks? >>Ah, yeah. Thank you, John. It's always a pleasure to talk to you folks. We we felt as we thought, about how we could make this content dynamic. We always want to make it fresh. You know, a virtual show of this kind and program of this kind. We all are becoming experts at many Ted talks or ESPN. Whatever your favorite program is 60 minutes on becoming digital producers of content. So it has to be crisp, and everybody I think was doing this has found ways by which you reduce the content. You know, Pat and I would have normally given 90 minute keynotes on day one and then 90 minutes again on day two. So 180 minutes worth of content were reduced that now into something that is that entire 180 minutes in something that is but 60 minutes. You you get a chance to use as you've seen from the keynote an incredible, incredible, you know, packed array of both announcements from Pat myself. So we really thought about how we could organize this in a way where the content was clear, crisp and compelling. Thekla's piece of it needed also be concise, but then supplemented with hundreds of sessions that were as often as possible, made it a goal that if you're gonna do a break out session that has to be incorporate or lead with the customer, so you'll see not just that we have some incredible sea level speakers from customers that have featured in in our pattern, Mikey notes like John Donahoe, CEO of Nike or Lorry beer C I, a global sea of JPMorgan Chase partner Baba, who is CEO of Zuma Jensen Wang, who is CEO of video. Incredible people. Then we also had some luminaries. We're gonna be talking in our vision track people like in the annuity. I mean, one of the most powerful women the world many years ranked by Fortune magazine, chairman, CEO Pepsi or Bryan Stevenson, the person who start in just mercy. If you watch that movie, he's a really key fighter for social justice and criminal. You know, reform and jails and the incarceration systems. And Malala made an appearance. Do I asked her personally, I got to know her and her dad's and she spoke two years ago. I asked her toe making appearance with us. So it's a really, really exciting until we get to do some creative stuff in terms of digital content this year. >>So on the product side and the momentum side, you have great decisions you guys have made in the past. We covered that with Pat Gelsinger, but the business performance has been very strong with VM. Where, uh, props to you guys, Where does this all tie together for in your mind? Because you have the transformation going on in a highly accelerated rate. You know, cov were not in person, but Cove in 19 has proven, uh, customers that they have to move faster. It's a highly accelerated world, a lot. Lots changing. Multi cloud has been on the radar. You got security. All the things you guys are doing, you got the AI announcements that have been pumping. Thean video thing was pretty solid. That project Monterey. What does the customer walk away from this year and and with VM where? What is the main theme? What what's their call to action? What's what do they need to be doing? >>I think there's sort of three things we would encourage customers to really think about. Number one is, as they think about everything in infrastructure, serves APS as they think about their APS. We want them to really push the frontier of how they modernize their athletic applications. And we think that whole initiative off how you modernized applications driven by containers. You know, 20 years ago when I was a developer coming out of college C, C plus, plus Java and then emerge, these companies have worked on J two ee frameworks. Web Logic, Be Aware logic and IBM Web Street. It made the development off. Whatever is e commerce applications of portals? Whatever was in the late nineties, early two thousands much, much easier. That entire world has gotten even easier and much more Micro service based now with containers. We've been talking about kubernetes for a while, but now we've become the leading enterprise, contain a platform making some incredible investments, but we want to not just broaden this platform. We simplified. It is You've heard everything in the end. What works in threes, right? It's sort of like almost t shirt sizing small, medium, large. So we now have tens Ooh, in the standard. The advanced the enterprise editions with lots of packaging behind that. That makes it a very broad and deep platform. We also have a basic version of it. So in some sense it's sort of like an extra small. In addition to the small medium large so tends to and everything around at modernization, I think would be message number one number two alongside modernization. You're also thinking about migration of your workloads and the breadth and depth of, um, er Cloud Foundation now of being able to really solve, not just use cases, you are traditionally done, but also new ai use cases. Was the reason Jensen and us kind of partner that, and I mean what a great company and video has become. You know, the king maker of these ai driven applications? Why not run those AI applications on the best infrastructure on the planet? Remember, that's a coming together of both of our platforms to help customers. You know automotive banking fraud detection is a number of AI use cases that now get our best and we want it. And the same thing then applies to Project Monterey, which takes the B c f e m A Cloud Foundation proposition to smart Knicks on Dell, HP Lenovo are embracing the in video Intel's and Pen Sandoz in that smart make architectural, however, that so that entire world of multi cloud being operative Phobia Macleod Foundation on Prem and all of its extended use cases like AI or Smart Knicks or Edge, but then also into the AWS Azure, Google Multi Cloud world. We obviously had a preferred relationship with Amazon that's going incredibly well, but you also saw some announcements last week from, uh, Microsoft Azure about azure BMR solutions at their conference ignite. So we feel very good about the migration opportunity alongside of modernization on the third priority, gentlemen would be security. It's obviously a topic that I most recently taken uninterested in my day job is CEO of the company running the front office customer facing revenue functions by night job by Joe Coffin has been driving. The security strategy for the company has been incredibly enlightening to talk, to see SOS and drive this intrinsic security or zero trust from the network to end point and workload and cloud security. And we made some exciting announcements there around bringing together MAWR capabilities with NSX and Z scaler and a problem black and workload security. And of course, Lassiter wouldn't cover all of this. But I would say if I was a attendee of the conference those the three things I want them to take away what BMR is doing in the future of APS what you're doing, the future of a multi cloud world and how we're making security relevant for distributed workforce. >>I know David >>so much to talk about here, Sanjay. So, uh, talk about modern APS? That's one of the five franchise platforms VM Ware has a history of going from, you know, Challenger toe dominant player. You saw that with end user computing, and there's many, many other examples, so you are clearly one of the top, you know. Let's call it five or six platforms out there. We know what those are, uh, and but critical to that modern APS. Focus is developers, and I think it's fair to say that that's not your wheelhouse today, but you're making moves there. You agree that that is, that is a critical part of modern APS, and you update us on what you're doing for that community to really take a leadership position there. >>Yeah, no, I think it's a very good point, David. We way seek to constantly say humble and hungry. There's never any assumption from us that VM Ware is completely earned anyplace off rightful leadership until we get thousands, tens of thousands. You know, we have a half a million customers running on our virtualization sets of products that have made us successful for 20 years 70 million virtual machines. But we have toe earn that right and containers, and I think there will be probably 10 times as many containers is their virtual machines. So if it took us 20 years to not just become the leader in in virtual machines but have 70 million virtual machines, I don't think it will be 20 years before there's a billion containers and we seek to be the leader in that platform. Now, why, Why VM Where and why do you think we can win in their long term. What are we doing with developers Number one? We do think there is a container capability independent of virtual machine. And that's what you know, this entire world of what hefty on pivotal brought to us on. You know, many of the hundreds of customers that are using what was formerly pivotal and FDR now what's called Tan Xue have I mean the the case. Studies of what those customers are doing are absolutely incredible. When I listen to them, you take Dick's sporting goods. I mean, they are building curbside, pick up a lot of the world. Now the pandemic is doing e commerce and curbside pick up people are going to the store, That's all based on Tan Xue. We've had companies within this sort of world of pandemic working on contact, tracing app. Some of the diagnostic tools built without they were the lab services and on the 10 zoo platform banks. Large banks are increasingly standardizing on a lot of their consumer facing or wealth management type of applications, anything that they're building rapidly on this container platform. So it's incredible the use cases I'm hearing public sector. The U. S. Air Force was talking about how they've done this. Many of them are not public about how they're modernizing dams, and I tend to learn the best from these vertical use case studies. I mean, I spend a significant part of my life is you know, it s a P and increasingly I want to help the company become a lot more vertical. Use case in banking, public sector, telco manufacturing, CPG retail top four or five where we're seeing a lot of recurrence of these. The Tan Xue portfolio actually brings us closest to almost that s a P type of dialogue because we're having an apse dialogue in the in the speak of an industry as opposed to bits and bytes Notice I haven't talked at all about kubernetes or containers. I'm talking about the business problem being solved in a retailer or a bank or public sector or whatever have you now from a developer audience, which was the second part of your question? Dave, you know, we talked about this, I think a year or two ago. We have five million developers today that we've been able to, you know, as bringing these acquisitions earn some audience with about two or three million from from the spring community and two or three million from the economic community. So think of those five million people who don't know us because of two acquisitions we don't. Obviously spring was inside Vienna where went out of pivotal and then came back. So we really have spent a lot of time with that community. A few weeks ago, we had spring one. You guys are aware of that? That conference record number of attendees okay, Registered, I think of all 40 or 50,000, which is, you know, much bigger than the physical event. And then a substantial number of them attended live physical. So we saw a great momentum out of spring one, and we're really going to take care of that, That that community base of developers as they care about Java Manami also doing really, really well. But then I think the rial audience it now has to come from us becoming part of the conversation. That coupon at AWS re invent at ignite not just the world, I mean via world is not gonna be the only place where infrastructure and developers come to. We're gonna have to be at other events which are very prominent and then have a developer marketplace. So it's gonna be a multiyear effort. We're okay with that. To grow that group of about five million developers that we today Kate or two on then I think there will be three or four other companies that also play very prominently to developers AWS, Microsoft and Google. And if we're one among those three or four companies and remembers including that list, we feel very good about our ability to be in a place where this is a shared community, takes a village to approach and an appeal to those developers. I think there will be one of those four companies that's doing this for many years to >>come. Santa, I got to get your take on. I love your reference to the Web days and how the development environment change and how the simplicity came along very relevant to how we're seeing this digital transformation. But I want to get your thoughts on how you guys were doing pre and now during and Post Cove it. You already had a complicated thing coming on. You had multi cloud. You guys were expanding your into end you had acquisitions, you mentioned a few of them. And then cove it hit. Okay, so now you have Everything is changing you got. He's got more complex city. You have more solutions, and then the customer psychology is change. You got to spectrums of customers, people trying to save their business because it's changed, their customer behavior has changed. And you have other customers that are doubling down because they have a tailwind from Cove it, whether it's a modern app, you know, coming like Zoom and others are doing well because of the environment. So you got your customers air in this in this in this, in this storm, you know, they're trying to save down, modernized or or or go faster. How are you guys changing? Because it's impacted how you sell. People are selling differently, how you implement and how you support customers, because you already had kind of the whole multi cloud going on with the modern APS. I get that, but Cove, it has changed things. How are you guys adopting and changing to meet the customer needs who are just trying to save their business on re factor or double down and continue >>John. Great question. I think I also talked about some of this in one of your previous digital events that you and I talked about. I mean, you go back to the last week of February 1st week of March, actually back up, even in January, my last trip on a plane. Ah, major trip outside this country was the World Economic Forum in Davos. And, you know, there were thousands of us packed into the small digits in Switzerland. I was sitting having dinner with Andy Jassy in a restaurant one night that day. Little did we know. A month later, everything would change on DWhite. We began to do in late February. Early March was first. Take care of employees. You always wanna have the pulse, check employees and be in touch with them. Because the health and safety of employees is much more important than the profits of, um, where you know. So we took care of that. Make sure that folks were taking care of older parents were in good place. We fortunately not lost anyone to death. Covert. We had some covert cases, but they've recovered on. This is an incredible pandemic that connects all of us in the human fabric. It has no separation off skin color or ethnicity or gender, a little bit of difference in people who are older, who might be more affected or prone to it. But we just have to, and it's taught me to be a significantly more empathetic. I began to do certain things that I didn't do before, but I felt was the right thing to do. For example, I've begun to do 25 30 minute calls with every one of my key countries. You know, as I know you, I run customer operations, all of the go to market field teams reporting to me on. I felt it was important for me to be showing up, not just in the big company meetings. We do that and big town halls where you know, some fractions. 30,000 people of VM ware attend, but, you know, go on, do a town hall for everybody in a virtual zoom session in Japan. But in their time zone. So 10 o'clock my time in the night, uh, then do one in China and Australia kind of almost travel around the world virtually, and it's not long calls 25 30 minutes, where 1st 10 or 15 minutes I'm sharing with them what I'm seeing across other countries, the world encouraging them to focus on a few priorities, which I'll talk about in a second and then listening to them for 10 15 minutes and be, uh and then the call on time or maybe even a little earlier, because every one of us is going to resume button going from call to call the call. We're tired of T. There's also mental, you know, fatigue that we've gotta worry about. Mental well, being long term. So that's one that I personally began to change. I began to also get energy because in the past, you know, I would travel to Europe or Asia. You know, 40 50%. My life has travel. It takes a day out of your life on either end, your jet lag. And then even when you get to a Tokyo or Beijing or to Bangalore or the London, getting between sites of these customers is like a 45 minute, sometimes in our commute. Now I'm able to do many of these 25 30 minute call, so I set myself a goal to talk to 1000 chief security officers. I know a lot of CEOs and CFOs from my times at S A P and VM ware, but I didn't know many security officers who often either work for a CEO or report directly to the legal counsel on accountable to the audit committee of the board. And I got a list of these 1,002,000 people we called email them. Man, I gotta tell you, people willing to talk to me just coming, you know, into this I'm about 500 into that. And it was role modeling to my teams that the top of the company is willing to spend as much time as possible. And I have probably gotten a lot more productive in customer conversations now than ever before. And then the final piece of your question, which is what do we tell the customer in terms about portfolio? So these were just more the practices that I was able to adapt during this time that have given me energy on dial, kind of get scared of two things from the portfolio perspective. I think we began to don't notice two things. One is Theo entire move of migration and modernization around the cloud. I describe that as you know, for example, moving to Amazon is a migration opportunity to azure modernization. Is that whole Tan Xue Eminem? Migration of modernization is highly relevant right now. In fact, taking more speed data center spending might be on hold on freeze as people kind of holding till depend, emmick or the GDP recovers. But migration of modernization is accelerating, so we wanna accelerate that part of our portfolio. One of the products we have a cloud on Amazon or Cloud Health or Tan Xue and maybe the other offerings for the other public dog. The second part about portfolio that we're seeing acceleration around is distributed workforce security work from home work from anywhere. And that's that combination off workspace, one for both endpoint management, virtual desktops, common black envelope loud and the announcements we've now made with Z scaler for, uh, distributed work for security or what the analysts called secure access. So message. That's beautiful because everyone working from home, even if they come back to the office, needs a very different model of security and were now becoming a leader in that area. of security. So these two parts of the portfolio you take the five franchise pillars and put them into these two buckets. We began to see momentum. And the final thing, I would say, Guys, just on a soft note. You know, I've had to just think about ways in which I balance work and family. It's just really easy. You know what, 67 months into this pandemic to burn out? Ah, now I've encouraged my team. We've got to think about this as a marathon, not a sprint. Do the personal things that you wanna do that will make your life better through this pandemic. That in practice is that you keep after it. I'll give you one example. I began biking with my kids and during the summer months were able to bike later. Even now in the fall, we're able to do that often, and I hope that's a practice I'm able to do much more often, even after the pandemic. So develop some activities with your family or with the people that you love the most that are seeing you a lot more and hopefully enjoying that time with them that you will keep even after this pandemic ends. >>So, Sanjay, I love that you're spending all this time with CSOs. I mean, I have a Well, maybe not not 1000 but dozens. And they're such smart people. They're really, you know, in the thick of things you mentioned, you know, your partnership with the scale ahead. Scott Stricklin on who is the C. C so of Wyndham? He was talking about the security club. But since the pandemic, there's really three waves. There's the cloud security, the identity, access management and endpoint security. And one of the things that CSOs will tell you is the lack of talent is their biggest challenge. And they're drowning in all these products. And so how should we think about your approach to security and potentially simplifying their lives? >>Yeah. You know, Dave, we talked about this, I think last year, maybe the year before, and what we were trying to do in security was really simplified because the security industry is like 5000 vendors, and it's like, you know, going to a doctor and she tells you to stay healthy. You gotta have 5000 tablets. You just cannot eat that many tablets you take you days, weeks, maybe a month to eat that many tablets. So ah, grand simplification has to happen where that health becomes part of your diet. You eat your proteins and vegetables, you drink your water, do your exercise. And the analogy and security is we cannot deploy dozens of agents and hundreds of alerts and many, many consoles. Uh, infrastructure players like us that have control points. We have 70 million virtual machines. We have 75 million virtual switches. We have, you know, tens of million's off workspace, one of carbon black endpoints that we manage and secure its incumbent enough to take security and making a lot more part of the infrastructure. Reduce the need for dozens and dozens of point tools. And with that comes a grand simplification of both the labor involved in learning all these tools. Andi, eventually also the cost of ownership off those particular tool. So that's one other thing we're seeking to do is increasingly be apart off that education off security professionals were both investing in ah, lot of off, you know, kind of threat protection research on many of our folks you know who are in a threat. Behavioral analytics, you know, kind of thread research. And people have come out of deep hacking experience with the government and others give back to the community and teaching classes. Um, in universities, there are a couple of non profits that are really investing in security, transfer education off CSOs and their teams were contributing to that from the standpoint off the ways in which we can give back both in time talent and also a treasure. So I think is we think about this. You're going to see us making this a long term play. We have a billion dollar security business today. There's not many companies that have, you know, a billion dollar plus of security is probably just two or three, and some of them have hit a wall in terms of their progress sport. We want to be one of the leaders in cybersecurity, and we think we need to do this both in building great product satisfying customers. But then also investing in the learning, the training enable remember, one of the things of B M worlds bright is thes hands on labs and all the training enable that happened at this event. So we will use both our platform. We in world in a variety of about the virtual environments to ensure that we get the best education of security to professional. >>So >>that's gonna be exciting, Because if you look at some of the evaluations of some of the pure plays I mean, you're a cloud security business growing a triple digits and, you know, you see some of these guys with, you know, $30 billion valuations, But I wanted to ask you about the market, E v m. Where used to be so simple Right now, you guys have expanded your tam dramatically. How are you thinking about, you know, the market opportunity? You've got your five franchise platforms. I know you're very disciplined about identifying markets, and then, you know, saying, Okay, now we're gonna go compete. But how do you look at the market and the market data? Give us the update there. >>Yeah, I think. Dave, listen, you know, I like davinci statement. You know, simplicity is the greatest form of sophistication, and I think you've touched on something that which is cos we get bigger. You know, I've had the great privilege of working for two great companies. s a P and B M where the bulk of my last 15 plus years And if something I've learned, you know, it's very easy. Both companies was to throw these TLS three letter acronyms, okay? And I use an acronym and describing the three letter acronyms like er or s ex. I mean, they're all acronyms and a new employee who comes to this company. You know, Carol Property, for example. We just hired her from Google. Is our CMO her first comments like, My goodness, there is a lot of off acronyms here. I've gotta you need a glossary? I had the same reaction when I joined B. M or seven years ago and had the same reaction when I joined the S A. P 15 years ago. Now, of course, two or three years into it, you learn everything and it becomes part of your speed. We have toe constantly. It's like an accordion like you expanded by making it mawr of luminous and deep. But as you do that it gets complex, you then have to simplify it. And that's the job of all of us leaders and I this year, just exemplifying that I don't have it perfect. One of the gifts I do have this communication being able to simplify things. I recorded a five minute video off our five franchise pill. It's just so that the casual person didn't know VM where it could understand on. Then, when I'm on your shore and when on with Jim Cramer and CNBC, I try to simplify, simplify, simplify, simplify because the more you can talk and analogies and pictures, the more the casual user. I mean, of course, and some other audiences. I'm talking to investors. Get it on. Then, Of course, as you go deeper, it should be like progressive layers or feeling of an onion. You can get deeper. It's not like the entire discussion with Sanjay Putin on my team is like, you know, empty suit. It's a superficial discussion. We could go deeper, but you don't have to begin the discussion in the bowels off that, and that's really what we don't do. And then the other part of your question was, how do we think about new markets? You know, we always start with Listen, you sort of core in contact our borough come sort of Jeffrey Moore, Andi in the Jeffrey more context. You think about things that you do really well and then ask yourself outside of that what the Jason sees that are closest to you, that your customers are asking you to advance into on that, either organically to partnerships or through acquisitions. I think John and I talked about in the previous dialogue about the framework of build partner and by, and we always think about it in that order. Where do we advance and any of the moves we've made six years ago, seven years ago and I joined the I felt VM are needed to make a move into mobile to really cement opposition in end user computing. And it took me some time to convince my peers and then the board that we should by Air One, which at that time was the biggest acquisition we've ever done. Okay. Similarly, I'm sure prior to me about Joe Tucci, Pat Nelson. We're thinking about nice here, and I'm moving to networking. Those were too big, inorganic moves. +78 years of Raghu was very involved in that. The decisions we moved to the make the move in the public cloud myself. Rgu pack very involved in the decision. Their toe partner with Amazon, the change and divest be cloud air and then invested in organic effort around what's become the Claudia. That's an organic effort that was an acquisition fast forward to last year. It took me a while to really Are you internally convinced people and then make the move off the second biggest acquisition we made in carbon black and endpoint security cement the security story that we're talking about? Rgu did a similar piece of good work around ad monetization to justify that pivotal needed to come back in. So but you could see all these pieces being adjacent to the core, right? And then you ask yourself, Is that context meaning we could leave it to a partner like you don't see us get into the hardware game we're partnering with. Obviously, the players like Dell and HP, Lenovo and the smart Knick players like Intel in video. In Pensando, you see that as part of the Project Monterey announcement. But the adjacent seas, for example, last year into app modernization up the stack and into security, which I'd say Maura's adjacent horizontal to us. We're now made a lot more logical. And as we then convince ourselves that we could do it, convince our board, make the move, We then have to go and tell our customers. Right? And this entire effort of talking to CSOs What am I doing is doing the same thing that I did to my board last year, simplified to 15 minutes and get thousands of them to understand it. Received feedback, improve it, invest further. And actually, some of the moves were now making this year around our partnership in distributed Workforce Security and Cloud Security and Z scaler. What we're announcing an XDR and Security Analytics. All of the big announcements of security of this conference came from what we heard last year between the last 12 months of my last year. Well, you know, keynote around security, and now, and I predict next year it'll be even further. That's how you advance the puck every year. >>Sanjay, I want to get your thoughts. So now we have a couple minutes left. But we did pull the audience and the community to get some questions for you, since it's virtually wanted to get some representation there. So I got three questions for you. First question, what comes after Cloud and number two is VM Ware security company. And three. What company had you wish you had acquired? >>Oh, my goodness. Okay, the third one eyes gonna be the turkey is one, I think. Listen, because I'm gonna give you my personal opinion, and some of it was probably predates me, so I could probably safely So do that. And maybe put the blame on Joe Tucci or somebody else is no longer here. But let me kind of give you the first two. What comes after cloud? I think clouds gonna be with us for a long time. First off this multi cloud world, you just look at the moment, um, that AWS and azure and the other clouds all have. It's incredible on I think this that multi cloud from phenomenon. But if there's an adapt ation of it, it's gonna be three forms of cloud. People are really only focus today in private public cloud. You have to remember the edge and Telco Cloud and this pendulum off the right balance of workloads between the data center called it a private cloud. The public cloud on one end and the telco edge on the other end. I think we're in a really good position for workloads to really swing between all three of those locations. Three other part that I think comes as a sequel to Cloud is cloud native. All of the capabilities a serverless functions but also containers that you know. Obviously the one could think of that a sister topics to cloud but the entire world of containers. The other seat, uh, then cloud a cloud native will also be topics, but these were all fairly connected. That's how I'd answer the first question. A security company? Absolutely. We you know, we aspire to be one of the leading companies in cyber security. I don't think they will be only one. We have to show this by the wealth on breath of our customers. The revenue momentum we have Gartner ranking us or the analysts ranking us in top rights of magic quadrants being viewed as an innovator simplifying the stack. But listen, we weren't even on the radar. We weren't speaking of the security conferences years ago. Now we are. We have a billion dollar security business, 20,000 plus customers, really strong presences and network endpoint and workload and Cloud Security. The three Coppola's a lot more coming in Security analytics, Cloud Security distributed workforce Security. So we're here to stay. And if anything, BMR persist through this, we're planning for multi your five or 10 year timeframe. And in that course I mean, the competition is smaller. Companies that don't have the breadth and depth of the n words are Andy muscle and are going market. We just have to keep building great products and serving customer on the third man. There's so many. But I mean, I think Listen, when I was looking back, I always wondered this is before I joined so I could say the summit speculatively on. Don't you know, make this This is BMR. Sorry. This is Sanjay one's opinion. Not VM. I gotta make very, very clear. Well, listen, I would have if I was at BMO in 2012 or 2013. I would love to about service now then service. It was a great company. I don't even know maybe the company's talk, but then talk about a very successful company at that time now. Maybe their priorities were different. I wasn't at the company at the time, but I can speculate if that had happened, that would have been an interesting Now I think that was during the time of Paul Maritz here and and so on. So for them, maybe there were other priorities the company need to get done. But at that time, of course, today s so it's not as big of a even slightly bigger market cap than us. So that's not happening. But that's a great example of a good company that I think would have at that time fit very well with VM Ware. And then there's probably we don't look back and regret we move forward. I mean, I think about the acquisitions we have made the big ones. Okay, Nice era air watch pop in black. Pivotal. The big moves we've made in terms of partnership. Amazon. What? We're announcing this This, you know, this week within video and Z scaler. So you never look back and regret. You always look for >>follow up on that To follow up on that from a developer, entrepreneurial or partner Perspective. Can you share where the white spaces for people to innovate around vm Where where where can people partner and play. Whether I'm an entrepreneur in a garage or venture back, funded or say a partner pivoting and or resetting with Govind, where's the white spaces with them? >>I think that, you know, there's gonna be a number off places where the Tan Xue platform develops, as it kind of makes it relevant to developers. I mean, there's, I think the first way we think about this is to make ourselves relevant toe all of that ecosystem around the C I. C. D type apply platform. They're really good partners of ours. They're like, get lab, You know, all of the ways in which open source communities, you know will play alongside that Hash E Corp. Jay frog there number of these companies that are partnering with us and we're excited about all of their relevancy to tend to, and it's our job to go and make that marketplace better and better. You're going to hear more about that coming up from us on. Then there's the set of data companies, you know, con fluent. You know, of course, you've seen a big I p o of a snowflake. All of those data companies, we'll need a very natural synergy. If you think about the old days of middleware, middleware is always sort of separate from the database. I think that's starting to kind of coalesce. And Data and analytics placed on top of the modern day middleware, which is containers I think it's gonna be now does VM or play physically is a data company. We don't know today we're gonna partner very heavily. But picking the right set of partners been fluent is a good example of one on. There's many of the next generation database companies that you're going to see us partner with that will become part of that marketplace influence. And I think, as you see us certainly produce out the VM Ware marketplace for developers. I think this is gonna be a game changing opportunity for us to really take those five million developers and work with the leading companies. You know, I use the example of get Lab is an example get help there. Others that appeal to developers tie them into our developer framework. The one thing you learn about developers, you can't have a mindset. With that, you all come to just us. It's a very mingled village off multiple ecosystems and Venn diagrams that are coalescing. If you try to take over the world, the developer community just basically shuns you. You have to have a very vibrant way in which you are mingling, which is why I described. It's like, Listen, we want our developers to come to our conferences and reinvent and ignite and get the best experience of all those provide tools that coincide with everybody. You have to take a holistic view of this on if you do that over many years, just like the security topic. This is a multi year pursuit for us to be relevant. Developers. We feel good about the future being bright. >>David got five minutes e. >>I thought you were gonna say Zoom, Sanjay, that was That was my wildcard. >>Well, listen, you know, I think it was more recently and very fast catapult Thio success, and I don't know that that's clearly in the complete, you know, sweet spot of the anywhere. I mean, you know, unified collaboration would have probably put us in much more competition with teams and, well, back someone you always have to think about what's in the in the bailiwick of what's closest to us, but zooms a great partner. Uh, I mean, obviously you love to acquire anybody that's hot, but Eric's doing really well. I mean, Erica, I'm sure he had many people try to come to buy him. I'm just so proud of him as a friend of all that he was named to Time magazine Top 100. But what he's done is phenomenon. I think he could build a company that's just his important, his Facebook. So, you know, I encourage him. Don't sell, keep building the company and you'll build a company that's going to be, you know, the enterprise version of Facebook. And I think that's a tremendous opportunity to do this better than anybody else is doing. And you know, I'm as an immigrant. He's, you know, China. Born now American, I'm Indian born, American, assim immigrants. We both have a similar story. I learned a lot from him. I learned a lot from him, from on speed on speed and how to move fast, he tells me he learns a thing to do for me on scale. We teach each other. It's a beautiful friendship. >>We'll make sure you put in a good word for the Kiwi. One more zoom integration >>for a final word or the zoom that is the future Facebook of the enterprise. Whatever, Sanjay, Thank >>you for connecting with us. Virtually. It is a digital foundation. It is an unpredictable world. Um, it's gonna change. It could be software to find the operating models or changing you guys. We're changing how you serve customers with new chief up commercial customer officer you have in place, which is a new hire. Congratulations. And you guys were flexing with the market and you got a tailwind. So congratulations, >>John and Dave. Always a pleasure. We couldn't do this without the partnership. Also with you. Congratulations of Successful Cube. And in its new digital format, Thank you for being with us With VM world here on. Do you know all that you're doing to get the story out? The guests that you have on the show, they look forward, including the nonviable people like, Hey, can I get on the Cuban like, Absolutely. Because they look at your platform is away. I'm telling this story. Thanks for all you're doing. I wish you health and safety. >>I'm gonna bring more community. And Dave is, you know, and Sanjay, and it's easier without the travel. Get more interviews, tell more stories and tell the most important stories. And thank you for telling your story and VM World story here of the emerald 2020. Sanjay Poon in the chief operating officer here on the Cube I'm John for a day Volonte. Thanks for watching Cube Virtual. Thanks for watching.

>> From the silicon angle media office in Boston Massachusetts, it's the Cube. Now here's your host, Dave Vellante. >> Hello everyone and welcome to this week's episode of wiki buns cube insights, powered by ETR. In this breaking analysis, I plan to look deeper into the cloud market and specifically the business results and the momentum of the big three U.S cloud players. Now, Google last week opened up a bit and they not only broke out YouTube's revenues but also its cloud business. And quite a bit more detailed now like Microsoft the numbers are still somewhat opaque and hard to compare with AWS numbers which I find much cleaner. Nonetheless by squinting through the data, we're able to better understand the momentum that these three companies have in cloud and of course the ETR spending data, gives us an added data-driven dimension that is really insightful and helpful. Today we're focusing on, the big three in cloud. Amazon's AWS, Google's cloud platform GCP and Microsoft Azure. Now to meet the other U.S players are not hyper scalars and they're really not even in the discussion other than is an extension of their existing business. As an example, it would take IBM and Oracle between four and six years to spend as much on capex as Google spends, in four months. Now coming back to the big three. Each of these companies is coming at the opportunity with a different perspective. But Amazon and Microsoft, have been on a collision course for quite some time now. Google of course aspires to get into that conversation. Amazon in my opinion is the gold standard in cloud and I specifically refer to infrastructure as a service. They created the market and have earned the right to define the sector. Competitors like Microsoft are smart to differentiate and I'm going to discuss that. But first, let's take a listen as to how Amazon's CEO Andy Jassy Amazon web services CEO Andy Jassy, thinks about the goals of the AWS business. Roll the clip please. >> A high-level are top-down aggressive goals that we want every single customer who uses our platform to have an outstanding customer experience. And we want that outstanding customer experience in part is that their operational performance and their security are outstanding. But also that it allows them to build projects and initiatives that change their customer experience and allow them to be a sustainable successful business over a long period of time and then, we also really want to be the technology infrastructure platform under all the applications of people build. >> So, what's interesting to me here is how Jesse thinks about the AWS platform. It's a platform, to build applications. It's not a SaaS, it's not a platform which AWS can use to sell its software packages, it's a place to build apps. Any application, any workload, any place in the world. So when I say AWS has clean numbers, it's because they have a clean business. Infrastructure is what they do, period. That's what they report in their numbers and it's clean. Now compare that with Microsoft. Microsoft is doing incredibly well in the cloud and will come back to that, but Microsoft is taking a much different approach to the market. They report cloud revenue but it comprises public, private and hybrid. It includes SQL Server, Windows Server, Visual Studio, System Center, GateHub and Azure. And also support services and consulting. But the key here is they defined cloud to their advantage which is smart trying to differentiate with a multi cloud any cloud, any edge, story. Think Microsoft Azure stack slash Microsoft Ark etc. Now Google as we know is coming at this as a late comer. They admit they're a challenger. Their starting point is G suite. Their cloud focus is infrastructure and analytics. So, with that as some background let's take a look at the wiki bond estimates for I as revenue in 2019. What we have here is our estimates of AWS Azure and GCPs is IaaS and PaaS revenue, for 2018 and 2019. We've tried to strip out everything else so we can make an apples-to-apples comparison with Amazon. So let's start with Amazon. The street is concerned about the growth rate of AWS. It grew 35% last quarter, which admittedly is slowing down. But it did just under 10 billion. Think about that. AWS will probably hit a 50 billion dollar run rate this year 50 billion and it's growing in the double digits. AWS is going to be larger than Oracle this year and Cisco is next in its sights. it's like Drew Brees knocking down records in the NFL. Microsoft is very strong but remember, these are estimates. They report as your growth, but they don't really give us a dollar figure. We have to infer that from other data. So the narrative on Microsoft is they're catching up to AWS and in one-dimension that's true because they're growing faster than AWS. But AWS in 2019 grew by an amount almost equal to Asher's entire business in 2018. Now Google is hard to peg. The only thing we know is Google said it's cloud business was 9 billion in 2019, up from 5.8 billion in 18 and 4 billion in 17. So we're seeing an accelerating growth rate. That they said is largely attributable to GCP and they told us that GCP is growing significantly faster than their overall business. Which remember includes, G suite, cloud business that is. Okay. So that's the picture. Now, I want to take a minute to talk about the profitability of the cloud. On the Microsoft earnings call, Heather Bellini of Goldman Sachs, she was effusive she's an analyst exclaiming how impressed she was with the fact that Microsoft has been consistently increasing its cloud gross margins each quarter. I think was up five points in the last quarter. And on the Google call, Heather again was praising Google CEO Sundar Pichai on gross margin guidance for GCP. Which Sundar didn't answer. As well, Andy Jassy said in the Q blast reinvent that the cloud was higher margin than retail but it's scale, it's a relatively low margin business. As compared to software. I would like to comment on all this. First I think Jesse is sandbagging. AWS is a great margin business in my opinion. AWS has operating margins consistently in the mid 20s like 26% last quarter. Now, Bellini on the earnings call, was pressing on gross margins which in my opinion are even more impressive. Here's why. This is a chart I drew a long long time ago. It's a very basic view of the economics of the different sectors of the technology business. Namely hardware, software and services. Now, that each have a different margin profile as we're showing here. On the vertical axes, marginal cost that is the incremental cost of producing one additional unit of a product or service. On the horizontal axis, is volume. And we're showing the Pre-Cloud Era on the left and the Post-Cloud Era on the right-hand side of the chart. And you can see each segment has a different cost and hence different margin profile. In Hardware, you have economies at volume but you have to purchase and assemble components and so at some point your marginal cost hit a floor. Professional services have a diseconomies of scale. Meaning at higher volume, things get more complex and you have more overhead. Now that red line is software and everybody loves software because the marginal costs go to zero and your gross margin approaches the cost of distributing the software. Back in the old days, it really came down to the cost of a what our custom distributed a disk or a CD. So software gross margins are absolutely huge. Now let me call your attention to the green line that we've labeled outsourcing. In the pre-cloud era, outsourcing companies could get some economies but it really wasn't game changing. But in the post-cloud world the hyper scalars are driving automation. Now I'm exaggerating the margin impact because the cloud players still have to buy hardware and they have other costs. But the point is, gross margin and outsourcing IT to a cloud player is far more attractive to the vendor at scale. So Heather Bellini, was essentially asking Sachini Adela how is it that you can keep expanding your gross margins each quarter and she was trying to understand, if GCP gross margins were tracking similar to where AWS and Azure were back when they were smaller. And I think these curves at least give us some guidance. All right, so now let's pivot into the ETR data. This chart shows net score which remember, refers to spending velocity for each of the big three cloud players. Over the past nine surveys for cloud computing the cloud computing sector. Now three things stand out. First is that AWS remains very strong with net scores solidly in the 60% plus range. Second, is Azure has sustained a clear momentum lead over AWS, since the July 18 survey. And the third, is look at GCP's uptick. It's very notable and quite encouraging for Google. Now, let's take another cut on this data and drill into the larger companies, in the ETR data set. Look what happens when you isolate on Fortune 500. Two points here, AWS actually retakes the lead over azure, in net score or spending velocity even though Azure remains very strong. Amazon's showing in large accounts is very very impressive. Nearly back to early 2018 peak levels at 76%. So really strong net scores. The second point is GCPs uptrend holds firm and actually increases slightly, in these larger accounts. So it appears, that the big brands which perhaps used to shy away from cloud, are now increasingly adopting. Now, one of the things ETR does that I love is these drill downs, where they'll ask specific questions that are both timely and relevant. So we want to know, what every salesperson wants to know. Why do they buy? And that's what this chart shows. It shows data from the ETR drill downs and on the left hand in the green or the y the buys from Microsoft AWS and Google cloud. For Microsoft CIOs a compatibility with existing skills and the organization's IT footprint then its feature set etc. Look here's the deal, this is mr. softies huge advantage. It's just simpler to migrate work to Azure if you're already running Microsoft apps. And if Microsoft continues to deliver adequate features it's a no-brainer for many customers. For AWS, the pluses are ROI near-term and long-term and I've said many times, best cloud in terms of reliability, uptime, security AWS has the best cloud for infrastructure. And if you're not incurring huge migration cost or if you're not Walmart, why wouldn't you go, with the best cloud? Now GCP comes down to the tech. Google has good tech and IT guys. They're geeks. And geeks love Tech. And when it comes to analytics, Google is very very strong as well. Now the right-hand side of this chart shows why this is not in my opinion a winner-take-all game. The chart shows the percent of workloads in the cloud today in two years and three years across different survey dates. Today it's between 25% and 35% and it's headed upwards to 50% , this is a huge growth opportunity for these companies. You know sometimes people say to me that Google doesn't care about the cloud because it's such a small piece of their business or well they can't be number one or number two so they'll exit it. I don't buy this for a second. This is a trillion dollar business. Google is in it for the long game, and in my opinion, is going to slowly gain share over time. All right let's wrap up by looking forward to 2020 and beyond. The first thing I want to say is feel good for Google for reporting its cloud revenues but I think Google has to show more in cloud. I understand it's a good first step but IT buyers are still going to want to see more transparency. The other point I want to make is we are entering a new era the story of the past isn't going to be the same as this decade. Buyers aren't afraid of cloud anymore. It has become a mandate. The dominant services of the past and compute storage and networking to still be there but they're evolving, to support analytics, with AI and new types of database services. And these are becoming platforms for business transformation. Competition is, as we've seen, much more real today. Buyers have optionality. And that's going to create more innovation. SaaS, continues to be a huge factor but more so than ever. And hybrid and multi cloud is increasingly real and it's become a challenge for IT buyers so, I expect AWS is going to enter the ring in a bigger way to expand its Tim. Finally developers are no longer tinkerers, they are product creators. Now they said, there's a huge market. And the big tree can all participate as well as overseas players like, Ali Baba. As a customer it's becoming a more and more complicated situation. Cloud is not just about experimentation or startups it's increasingly about something that you really need to get right. Where to bet, migration and managing risks all become much more critical. On one hand, optionality is a good thing but if you make the wrong bet, it could be costly if you don't have a good exit strategy. Now as always, I really appreciate the comments that I get on my LinkedIn post and on Twitter I'm @DVellante So thanks for watching and thanks for your comments and your feedback This is Dave Vellante for the cube insights powered by ETR. We'll see you next time. (upbeat music)

>>From Las Vegas. It's the cube covering Qualis security conference 2019 you buy quality. >>Hey, welcome back. You're ready. Jeff Frick here with the cube. We're in Las Vegas at the Bellagio, at the quality security conference. It's the 19th year they've been doing this. It's our first year here and we're excited to be here and it's great to have a veteran who's been in this space for so long, to give a little bit more of a historical perspective as to what happened in the past and where we are now and what can we look forward to in the future. So coming right off his keynote is Felipe korto, the chairman and CEO of Qualys. Phillip, great to see you. Thank you. Same, same, same for me. Absolutely. So you touched on so many great, um, topics in your conversation about kind of the shifts of, of, of modern computing from the mainframe to the mini. We've heard it over and over and over, but the key message was really about architecture. If you don't have the right architecture, you can't have the right solution. So how has the evolution of architects of architectures impacted your ability to deliver security solutions for your clients? >>So now that's a very good question. And in fact, you know, what happened is that we started in 1999 with a vision that we could use exactly like a salesforce.com this nascent internet technologies and apply that to security. And uh, so, and mod when you have applied that to essentially changing the way CRM was essentially used and deployed in enterprises and with a fantastic success as we know. So for us, the, I can say today that 19 years later the vision was right. It took a significant longer because the security people are not really, uh, warm at the idea of silently, uh, having the data in their view, which was in place that they could not control. And the it people, they didn't really like at all the fact that suddenly they were not in control anymore of the infrastructure. So we had a lot of resistance. >>I, wherever we always, I always believe, absolutely believe that the, the cloud will be the cloud architecture to go back. A lot of people make the confusion. That was part of the confusion that for people it was a cloud, that kind of magical things someplace would you don't know where. And when I were trying to explain, and I've been saying that so many times that well you need to look at the cloud like compute that can architecture which distribute the competing power far more efficiently than the previous one, which was client server, which was distributing the convening power far better than of course the mainframes and the mini computers. And so if you look at their architectures, so the mainframe were essentially big data centers in uh, in Fort Knox, like settings, uh, private lines of communication to a dump terminal. And of course security was not really issue then because it's security was built in by the IBM's and company. >>Same thing with the mini computer, which then was instead of just providing the computing power to the large, very large company, you could afford it. Nelson and the minicomputer through the advanced in semiconductor technology could reduce a foot Frank. And then they'll bring that computing power to the labs and to the departments. And was then the new era of the digital equipment, the prime, the data general, et cetera. Uh, and then kind of server came in. So what client server did, again, if you look at the architecture, different architecture now silently servers, the land or the internal network and the PC, and that was now allowing to distribute the computing power to the people in the company. And so, but then you needed to, so everybody, nobody paid attention to security because then you were inside of the enterprise. So it started inside the walls of the castle if you prefer. >>So nobody paid attention to that. It was more complex because now you have multiple actors. Instead of having one IBM or one digital equipment, et cetera, suddenly you have the people in manufacturing and the servers, the software, the database, the PCs, and on announcer, suddenly there was the complexity, increasing efficiency, but nobody paid attention to security because it wasn't a needed until suddenly we realized that viruses could come in through the front door being installed innocently. You were absolutely, absolutely compromised. And of course that's the era of the antivirus which came in. And then because of the need to communicate more and more now, Senator, you could not stay only in your castle. You needed to go and communicate to your customers, to your suppliers, et cetera, et cetera. And now he was starting to open up your, your castle to the world and hello so now so that the, the bad guy could come in and start to steal your information. >>And that was the new era of the forward. Now you make sure that those who come in, but of course that was a little bit naive because there were so many other doors and windows, uh, that people could come in, you know, create tunnels and create these and all of that trying to ensure your customers because the data was becoming more and more rich and more, more important or more value. So whenever there is a value, of course the bad guys are coming in to try to sell it. And that was that new era of a willing to pay attention to security. The problem has been is because you have so many different actors, there was nothing really central there that was just selling more and more solutions and no, absolutely like 800 vendors bolting on security, right? And boating on anything is short-lived at the end of the day because you put more and more weight and then you also increase the complexity and all these different solutions you need. >>They need to talk together so you have a better context. Uh, but they want the design to talk together. So now you need to put other system where they could communicate that information. So you complicated and complicated and complicated the solution. And that's the problem of today. So now cloud computing comes in and again, if you look at the architecture of cloud computing, it's again data centers, which is not today I've become thanks to the technology having infinite, almost competing power and storage capabilities. And like the previous that I sent her, the are much more fractured because you just one scale and they become essentially a little bit easier to secure. And by the way, it's your fewer vendors now doing that. And then of course the access can be controlled better. Uh, and then of course the second component is not the land and the one, it's now the internet. >>And the internet of course is the web communications extremely cheap and it brings you an every place on the planet and soon in Morris, why not? So and so. Now the issue today is that still the internet needs to be secure. And today, how are we going to secure the internet? Which is very important thing today because you see today that you can spoof your email, you can spoof your website, uh, you can attack the DNS who, yes, there's a lot of things that the bad guys still do. And in fact, they've said that leverage the internet of course, to access everywhere so they take advantage of it. So now this is obviously, you know, I created the, the trustworthy movement many years ago to try to really address that. Unfortunately, the quality's was too small and it was not really our place today. There's all the Google, the Facebook, the big guys, which in fact their business depend on the internet. >>Now need to do that. And I upload or be diabetic, criticized very much so. Google was the first one to essentially have a big initiative, was trying to push SSL, which everybody understand is secret encryption if you prefer. And to everybody. So they did a fantastic job. They really push it. So now today's society is becoming like, okay, as I said, you want to have, as I said it all in your communication, but that's not enough. And now they are pushing and some people criticize them and I absolutely applaud them to say we need to change the internet protocols which were created at a time when security, you were transferring information from universities and so forth. This was the hay days, you know, of everything was fine. There was no bad guys, you know, the, he'd be days, if you like, of the internet. Everybody was free, everybody was up and fantastic. >>Okay. And now of course, today this protocol needs to be upgraded, which is a lot of work. But today I really believe that if you put Google, Amazon, Facebook altogether, and they can fix these internet protocols. So we could forget about the spoofing and who forgot about all these phishing and all these things. But this is their responsibility. So, and then you have now on the other side, you have now very intelligent devices from in a very simple sensors and you know, to sophisticated devices, the phone, that cetera and not more and more and more devices interconnected and for people to understand what is going. So this is the new environment and whether we always believe is that if you adopt an architecture, which is exactly which fits, which is similar, then we could instead of bolting security in, we can now say that the build security in a voting security on, we could build security in. >>And we have been very proud of the work that we've done with Microsoft, which we announced in fact relatively recently, very recently, that in fact our agent technologies now is bundled in Microsoft. So we have built security with Microsoft in. So from a security perspective today, if you go to the Microsoft as your secretly center, you click on the link and now you have the view of your entire Azure environment. Crazier for quality Sagent. You click on a second link and now you have the view of your significant loss posture, crazy of that same quality. Say Sagent and then you click on the third name with us. Nothing to do with quality. It's all Microsoft. You create your playbook and you remediate. So security in this environment has become click, click, click, nothing to install, nothing to update. And the only thing you bring are your policies saying, I don't want to have this kind of measured machine expose on the internet. >>I want, this is what I want. And you can continuously audit in essentially in real time, right? So as you can see, totally different than putting boxes and boxes and so many things and then having to for you. So very big game changer. So the analogy that I want you that I give to people, it's so people don't understand that paradigm shift is already happening in the way we secure our homes. You put sensors everywhere, you have cameras, you have detection for proximity detection. Essentially when somebody tried to enter your home, all that data is continuously pumped up into an incidence restaurant system. And then from your phone, again across the internet, you can change the temperature of your rooms. You can do what you can see the person who knocks on the door. You can see its face, you can open the door, close the door, the garage door, you can do all of that remotely, another medically. >>And then if there's a burglar then in your house to try to raking immediately the incidents or some system called the cops or the far Marsha difficult fire. And that's the new paradigm. So security has to follow that paradigm. And then you have interesting of the problem today that we see with all the current secretly uh, systems, uh, incidents, response system. They have a lot of false positive, false positive and false negative are the enemy really of security. Because if you are forced visited, you cannot automate the response because then you are going to try to respond to something that is not true. So you are, you could create a lot of damage. And the example I give you that today in the, if you leave your dog in your house and if you don't have the ability, the dog will bark, would move. And then the sensors would say intruder alert. >>So that's becomes a false positive. So how do you eliminate that? By having more context, you can eliminate automatically again, this false positives. Like now you take a fingerprint of your dog and of these voice and now the camera and this and the sensors and the voice can pick up and say, Oh, this is my dog. So then of course you eliminate that for solar, right? Right. Now even if another dog managed to enter your home through a window which was open or whatever for soul, you will know her window was up and but you know you cannot necessarily fix it and the dog opens. Then you will know it's a, it's a, it's not sure about, right? So that's what security is evolving such a huge sea of change, which is happening because of all that internet and today companies today, after leveraging new cloud technology, which are coming, there's so much new technology. >>What people understand is where's that technology coming from? How come silently we have, you know, Dockers netics all these solutions today, which are available at almost no cost because it's all open source. So what happened is that, which is unlike the enterprise software, which were more the Oracle et cetera, the manufacturer of that software today is in fact the cloud public cloud vendors, the Amazon, the Google, the Facebook, the Microsoft. We suddenly needed to have to develop new technology so they could scale at the size of the planet. And then very shrewdly realized that effective that technology for me, I'm essentially going to imprison that technology is not going to evolve. And then I need other technologies that are not developing. So they realized that they totally changed that open source movement, which in the early days of opensource was more controlled by people who had more purity. >>If you prefer no commercial interests, it was all for the good of the civilization and humankind. And they say their licensing model was very complex. So they simplified all of that. And then nothing until you had all this technology coming at you extremely fast. And we have leverage that technology, which was not existing in the early days when when socials.com started with the Linux lamp pour called what's called Linux Apache. My SQL and PHP, a little bit limiting, but now suddenly all this technology, that classic search was coming, we today in our backend, 3 trillion data points on elastic search clusters and we return inflammation in a hundred milliseconds. And then onto the calf cabin, which is again something at open source. We, we, we, and now today 5 million messages a day and on and on and on. So the world is changing and of course, if that's what it's called now, the digital transformation. >>So now enterprises to be essentially agile, to reach out to the customers better and more, they need to embrace the cloud as the way they do, retool their entire it infrastructure. And essentially it's a huge sea of change. And that's what we see even the market of security just to finish, uh, now evolving in a totally different ways than the way it has been, which in the past, the market of security was essentially the market for the enterprise. And I'm bringing you my, my board, my board town solutions that you have to go and install and make work, right? And then you had the, the antivirus essentially, uh, for all the consumers and so forth. So today when we see the marketplace, which is fragmenting in four different segments, which is one is the large enterprise which are going to essentially consolidate those stock, move into the digital transformation, leveraging absolutely dev ops, which isn't becoming the new buyer and of course a soak or they could improve, uh, their it for, to reach out to more customers and more effectively than the cloud providers as I mentioned earlier, which are building security in the, no few use them. >>You don't have to worry about infrastructure, about our mini servers. You need, I mean it is, it's all done for you. And same thing about security, right? The third market is going to be an emergence of a new generation of managed security service providers, which are going to take to all these companies. We don't have enough resources. Okay, don't worry, I'm going to help you, you know, do all that digital transformation. And that if you build a security and then there's a totally new market of all these devices, including the phone, et cetera, which connects and that you essentially want to all these like OT and IOT devices that are all now connected, which of course presents security risk. So you need to also secure them, but you also need to be able to also not only check their edits to make sure that, okay, because you cannot send people anymore. >>So you need to automate the same thing on security. If you find that that phone is compromised, you need to make, to be able to make immediate decisions about should I kill that phone, right? Destroyed everything in it. Should I know don't let that phone connect anymore to my networks. What should I do? Should I, by the way detected that they've downloaded the application, which are not allowed? Because what we see is more and more companies now are giving tablets, do the users. And in doing so now today's the company property. So they could say, okay, you use these tablets and uh, you're not allowed to do this app. So you could check all of that and then automatically remote. But that again requires a full visibility on what you are. And that's why just to finish, we make a big decision about a few, three months ago that we have, we build the ability for any company on the planet to automatically build their entire global HSE inventory, which nobody knows what they have in that old networking environment. >>You don't know what connects to have the view of the known and the unknown, totally free of charge, uh, across on premise and pawn cloud containers, uh, uh, uh, whether vacations, uh, OT and IOT devices to come. So now there's the cornerstone of security. So with that totally free. So, and then of course we have all these additional solutions and we're build a very scalable, uh, up in platform where we can take data in, pass out data as well. So we really need to be and want to be good citizen here because security at the end of the day, it's almost like we used to say like the doctors, you have to have that kind of apricot oath that you cannot do no arm. So if you keep, if you try to take the data that you have, keep it with you, that's absolutely not right because it's the data of your customers, right? >>So, and you have to make sure that it's there. So you have to be a good warning of the data, but you have to make sure that the customer can absolutely take that data to whatever he wants with it, whatever he needs to do. So that's the kind of totally new field as a fee. And finally today there is a new Ash culture change, which is, which is happening now in the companies, is that security has become fronted centers, is becoming now because of GDPR, which has a huge of financial could over you challenge an impact on a company. A data breach can have a huge financial impact. Security has become a board level. More and more social security is changing and now it's almost like companies, if they want to be successful in the future, they need to embrace a culture of security. And now what I used to say, and that was the, the conclusion of my talk is that now, today it DevOps, uh, security compliance, people need to unite. Not anymore. The silos. I do that. This is my, my turf, my servers. You do that, you do this. Everybody in the company can work. I have to work together towards that goal. And the vendors need to also start to inter operate as well and working with our customers. So it's a tall, new mindset, which is happening, but the safes are big. That's what I'm very confident that we're now into that. Finally, we thought, I thought it would have happened 10 years ago, quite frankly. And uh, but now today's already happening. >>She touched on a lot, a lot there. And I'll speak for another two hours if we could. We could go for Tara, but I want to, I want to unpack a couple of things. We've had James Hamilton on you to at AWS. Um, CTO, super smart guy and it was, it was at one of his talks where it really was kind of a splash, a wet water in the face when he talked about the amount of resources Amazon could deploy to just networking or the amount of PhD power he could put on, you know, any little tiny sub segment of their infrastructure platform where you just realize that you just can't, you can't compete, you cannot put those kinds of resources as an individual company in any bucket. So the inevitability of the cloud model is just, it's, it's the only way to leverage those resources. But because of that, how has, how has that helped you guys change your market? How nice is it for you to be able to leverage infrastructure partners? Like is your bill for go to market as well as feature sets? And also, you know, because the other piece they didn't talk about is the integration of all these things. Now they all work together. Most apps are collection of API APIs. That's also changed. So when you look at the cloud provider GCP as well, how does that help you deliver value to your customers? >>Yeah, but the, the, the, the club, they, they don't do everything. You know, today what is interesting is that the clubs would start to specialize themselves more and more. So for example, if you look at Amazon, the, the core value of Amazon since the beginning has been elastic computing. Uh, now today we should look at Microsoft. They leverage their position and they really have come up with a more enterprise friendly solution. And now Google is trying to find also their way today. And so then you have Addy Baba, et cetera. So these are the public cloud, but life is not uniform like is by nature. Divers life wants to leave lunch to find better ways. We see that that's what we have so many different species and it just ended up. So I've also the other phenomena of companies also building their own cloud as well. >>So the word is entering into a more hybrid cloud. And the technology is evolving very fast as well. And again, I was selling you all these open source software. There's a bigger phenomenon at play, which I used to say that people don't really understand that much wood, but it's so obvious is if you look at the printing price, that's another example that gives the printing price essentially allowed, as we all know, to distribute the gospel, which has some advantage of, you know, creating more morality, et cetera. But then what people don't know for the most part, it distributed the treaties of the Arabs on technology, the scientif treaties, because the archives, which were very thriving civilization at the time, I'd collected all the, all the, all the information from India, from many other places and from China and from etc. And essentially at the time all of Europe was pretty in the age they really came up and it now certainty that scientific knowledge was distributed and that was in fact the seeds of the industrial revolution, which then you're up cat coats and use that and creating all these different technologies. >>So that confidence of this dimension of electricity and all of that created the industrial revolution seeded by now, today what is happening is that the internet is the new printing press, which now is distributing the knowledge that not to a few millions of people to billions of people. So the rate today of advancing technology is accelerating and it's very difficult. I was mentioning today, we know today that work and working against some quantum computing which are going to totally change things. Of course we don't know exactly how and you have also it's clear that today we could use genetic, uh, the, the, the, if you look at DNA, which stores so much information, so little place that we could have significant more, you know, uh, memory capabilities that lower costs. So we have embarked into absolutely a new world where things are changing. I've got a little girl, which is 12 years old and fundamentally that new generation, especially of girls, not boys, because the boys are still on, you know, at that age. >>Uh, they are very studious. They absorb so much information via YouTube. They are things like a security stream. They are so knowledgeable. And when you look back at history 2000 years plus ago in Greece, you at 95 plus percent of the population slaves. So a few percent could start to think now, today it's totally changed. And the amount of information they can, they learn. And this absolutely amazing. And you know, she, she's, I would tell you the story which has nothing to do with computing, but as a button, the knowledge of, she came to me the few, few weeks ago and she said, Oh daddy, I would like to make my mother more productive. Okay. So I said, Oh, that's her name is Avia, which is the, which is the, the, the either Greece or Zeus weathered here. And so I say, Evie, I, so that's a good idea. >>So how are you going to do it? I mean, our answer, I was flawed, but that is very simple. Just like with, for me, I'm going to ask her to go to YouTube to learn what she needs to learn. Exactly. And she learns, she draws very well. She learns how to draw in YouTube and it's not a gifted, she's a nice, very nice little girl and very small, but all her friends are like that. Right? So we're entering in a word, which thing are changing very, very fast. So the key is adaptation, education and democracy and democratization. Getting more people access to more. Absolutely. It's very, very important. And then kind of this whole dev ops continuous improve that. Not big. That's a very good point that you make because that's exactly today the new buyer today in security and in it is becoming the DevOps shipper. >>Because what? What are these people? There are engineers which suddenly create good code and then they want to of course ship their code and then all these old silos or you need to do these, Oh no, we need to put the new server, we don't have the capacity, et cetera. How is that going to take three months or a month? And then finally they find a way through, again, you know, all the need for scale, which was coming from the Google, from the Facebook and so forth. And by the way, we can shortcut all of that and we can create and we can run out to auto-ship, our code. Guess what are they doing today? They are learning how to secure all of that, right? So again, it's that ability to really learn and move. And today, uh, one of the problem that you alluded to is that, which the Amazon was saying is that their pick there, they have taken a lot of the talent resources in the U S today because of course they pay them extra to me, what? >>Of course they'll attract that talent. And of course there's now people send security. There's not enough people that even in, but guess what? We realized that few years ago in 2007, we'll make a big decision who say, well, never going to be able to attract the right people in the Silicon Valley. And we've started to go to India and we have now 750 people. And Jack Welch used to say, we went to India for the cost and discover the talent. We went to India for the talent and we discover the cost. And there is a huge pool of tenants. So it's like a life wants to continue to leave and now to, there are all these tools to learn, are there, look at the can Academy, which today if you want to go in nuclear physics, you can do that through your phone. So that ability to learn is there. So I think we need just more and more people are coming. So I'm a very optimistic in a way because I think the more we improve our technologies that we look at the progress we're making genetics and so everywhere and that confidence of technology is really creating a new way. >>You know, there's a lot of conversations about a dystopian future and a utopian future with all these technologies and the machines. And you know what? Hollywood has shown us with AI, you're very utopian side, very optimistic on that equation. What gives you, what gives you, you know, kind of that positive feeling insecurity, which traditionally a lot of people would say is just whack a mole. And we're always trying to chase the bad guys. Generally >>speaking, if I'm a topian in in a way. But on the other end, you'd need to realize that unfortunately when you have to technological changes and so forth, it's also create factors. And when you look at this story in Manatee, the same technological advancement that some countries to take to try to take advantage of fathers is not that the word is everything fine and everything peaceful. In fact, Richard Clark was really their kid always saying that, Hey, you know that there is a sinister side to all the internet and so forth. But that's the human evolution. So I believe that we are getting longterm. It's going to. So in the meantime there's a lot of changes and humans don't adapt well to change. And so that's in a way, uh, the big challenge we have. But I think over time we can create a culture of change and that will really help. And I also believe that probably at some point in time we will re-engineer the human race. >>All right, cool. We'll leave it there. That's going to launch a whole nother couple hours. They leave. Congratulations on the event and a great job on your keynote. Thanks for taking a few minutes with us. Alrighty. It's relief. I'm Jeff. You're watching the cube where the Qualice security conference at the Bellagio in Las Vegas. Thanks for watching. We'll see you next time.

>> Narrator: Live from Orlando, Florida, it's theCUBE, covering Microsoft Ignite. Brought to you by, Cohesity. >> Good morning everyone and welcome back to theCUBE's live coverage of Microsoft Ignite. We are here in the Orange County Convention Center. I'm your host Rebecca Knight, along with Stu Miniman. Stu, this is Microsoft's Big Show. 26,000 people from around the globe, all descending on Orlando. This is the big infrastructure show. Thoughts, impressions, now that we're on day two of a three day show. >> Yeah, Rebecca. Last year I had this feeling that it was a little bit too much talking about the Windows 10 transition and the latest updates to Office 365. I could certainly want to make sure that we really dug in more to what's going on with Azure, what's happening in 6the developer space. Even though they do have a separate show for developers, it's Microsoft build. They actually have a huge partner show. And so, Microsoft has a lot of shows. So it's, what is this show that is decades old? And really it is the combination of Microsoft as a platform today. Satya Nadella yesterday talked about empowering the world. This morning, Scott Hanselman was in a smaller theater, talking about app devs. And he came out and he's like, "Hey, developers, isn't it a little bit early for you this morning?" Everybody's laughing. He said, "Even though we're kicking off at 9:00 a.m., Eastern." He said, "That's really early, especially for anybody coming from the West Coast." He was wearing his Will Code For Tacos shirt. And we're going to have Scott on later today, so we'll talk about that. But, where does Microsoft sit in this landscape? Is something we've had. I spent a lot of time looking at the cloud marketplace. Microsoft has put themselves as the clear number two behind AWS. But trying to figure out because SaaS is a big piece of what Microsoft does. And they have their software estate in their customer relationship. So how many of those that are what we used to call window shops. And you had Windows people are going to start, Will it be .NET? Will it be other operating systems? Will it come into Azure? Where do they play? And the answer is, Microsoft's going to play a lot of places. And what was really kind of put on with the point yesterday is, it's not just about the Microsoft solutions, it is about the ecosystem, they really haven't embraced their role, very supportive of open source. And trust is something that I know both you and I have been pointing in on because, in the big tech market, Microsoft wants to stand up and say, "We are the most trusted out there. And therefore, turn to us and we will help you through all of these journeys." >> So you're bringing up so many great points and I want to now go through each and every one of them. So, absolutely, we are hearing that this is the kinder, gentler Microsoft, we had Dave Totten on yesterday. And he was, as you just described, just talking about how much Microsoft is embracing and supporting customers who are using a little bit of Microsoft here, a little bit of other companies. I'm not going to name names, but they're seemingly demanding. I just want best to breed, and this is what I'm going to do. And Microsoft is supporting that, championing that. And, of course we're seeing this as a trend in the broader technology industry. However, it feels different, because it's Microsoft doing this. And they've been so proprietary in the past. >> Yeah, well, and Rebecca, it's our job on theCUBE actually, I'm going to name names. (laughs) And actually Microsoft is-- >> Okay. >> Embracing of this. So, the thing I'm most interested in at the show was Azure Arc. And I was trying to figure out, is this a management platform? And at the end of the day really, it is, there's Kubernetes in there, and it's specifically tied to applications. So they're going to start with databases specifically. My understanding, SQL is the first piece and saying, it sounds almost like the next incarnation of platform as a service to our past. And say, I can take this, I can put it on premises in Azure or on AWS. Any of those environments, manage all of them the same. Reminds me of what I hear from VMware with Hangzhou. Vmworld, Europe is going on right now in Barcelona. Big announcement is to the relationship with VMware on Azure. If I got it right, it's actually in beta now. So, Arc being announced and the next step of where Microsoft and VMware are going together, it is not a coincidence. They are not severing the ties with VMware. VMware, of course partners with all the cloud providers, most notably AWS. Dave Totten yesterday, talked about Red Hat. You want Kubernetes? If you want OpenShift, if you are a Red Hat customer and you've decided that, the way I'm going to leverage and use and have my applications run, are through OpenShift, Microsoft's is great. And the best, most secure place to run that environment is on Azure. So, that's great. So Microsoft, when you talk about choice, when you talk about flexibility, and you talk about agility cause, it is kinder and gentler, but Satya said they have that tech intensity. So all the latest and greatest, the new things that you want, you can get it from Microsoft, but they are also going to meet you where you are. That was Jeremiah Dooley, the Azure advocate, said that, "There's, lots of bridges we need to make, Microsoft has lots of teams. It's not just the DevOps, it's not just letting the old people do their own thing, from your virtualization through your containerization and everything in between microservices server list, and the like. Microsoft has teams, they have partners. Sure that you could buy everything in Microsoft, but they know that there are lots of partners and pieces. And between their partners, their ecosystem, their channel, and their go-to-market, they're going to pull this together to help you leverage what you need to move your business forward. >> So, next I want to talk about Scott Hanselman who was up on the main stage, we're going to have him on the show and he was as you said, adorned in coder dude, attire with a cool t-shirt and snappy kicks. But his talk was app development for everyone. And this is really Microsoft's big push, democratizing computing, hey, anyone can do this. And Satya Nadella, as we've talked about on the show. 61% of technologist's jobs are not in the technology industry. So this is something that Microsoft sees as a trend that's happening in the employment market. So they're saying, "Hey, we're going to help you out here." But Microsoft is not a hardware company. So how does this really change things for Microsoft in terms of the products and services-- >> Well right, >> It offers. >> So really what we're talking about here, we're talking about developers right? 61% of jobs openings for developers are outside the tech sector. And the high level message that Scott had is your tools, your language, your apps. And what we have is, just as we were talking about choice of clouds, it's choice of languages. Sure they'd love to say .NET is wonderful, but you want your Java, your PHP, all of these options. And chances are, not only are you going to use many of them, but even if you're working on a total solution, different groups inside your company might be using them and therefore you need tools that can spam them. The interesting example they use was Chipotle. And if there's a difference between when you're ordering and going through the delivery service, and some of the back-end pieces, and data needs to flow between them, and it can't be, "Oh wait, I've got silos of my data, I've got silos of all these other environments." So, developer tools are all about, having the company just work faster and work across environments. I was at AnsibleFest show earlier this year. And, Ansible is one of those tools that actually, different roles where you have to have the product owner, the developer, or the the operations person. They all have their way into that tool. And so, Microsoft's showing some very similar things as to, when I build something, it's not, "Oh, wait, we all chose this language." And so many of the tools was, " Okay, well, I had to standardize on something." But that didn't fit into what the organization needed. So I need to be able to get to what they all had. Just like eventually, when I'm picking my own taco, I can roll it, bowl it, soft or hard shell-- >> It was a cool analogy. >> And choose all my toppings in there. So it is Taco Tuesday here-- >> Yes. >> At Microsoft Ignite and the developers like their choices of tools, just like they like their tacos. >> And they like their extra guac. So going back to one of the other points you made at the very opening. And this is the competitive dynamic that we have here. We had David Davis and Scott Lowe on yesterday from a ActualTech Media. Scott was incredibly bullish about Microsoft. And saying it could really overtake AWS, not tomorrow, but within the next decade. Of course, the choice for JEDI certainly could accelerate that. What do you make of it? I mean, do you think that's still pie in the sky here? AWS is so far ahead. >> So look, first of all, when you look at the growth rates, first of all, just to take the actual number, we know what AWS's, revenue is. Last quarter, AWS did $9 billion. And they're still growing at about a 35% clip. When I look at Microsoft, they have their intelligent cloud bucket, which is Azure, Windows Server, SQL Server and GitHub. And that was 10.8 billion. And you say, "Oh, okay, that's really big." But last year, Azure did about $12 billion dollars. So, AWS is still two to three times larger when you look at infrastructure as a service. But SaaS hugely important piece of what's going on in the cloud opportunity. AWS really is more of the platform and infrastructure service, they absolutely have some of the PaaS pieces. Azure started out as PaaS and has this. So you're trying to count these buckets, and Azure is still growing at, last quarter was 64%. So if you look at the projection, is it possible for Azure to catch up in the next three years? Well, Azure's growth rate is also slowing down, so I don't think it matters that much. There is a number one and a number two, and they're both clear, valid choices for a customer. And, this morning at breakfast, I was talking to a customer and they are very heavily on Microsoft shop. But absolutely, they've got some AWS on the side. They're doing Azure, they've got a lot of Azure, being here at our Microsoft show. And when I go to AWS, even when I talked to the companies that are all in on AWS, " Oh, you got O 365?" "Of course we do." "Oh, if you're starting to do O 365, are there any other services that you might be using out of Azure?" "Yeah, that's possible." I know Google is in the mix. Ali Baba's in the mix. Oracle, well, we're not going to talk about Oracle Cloud, but we talked about Oracle, because they will allow their services to run on Azure specifically. We talked about that a lot yesterday, especially how that ties into JEDI. So, look, I think it is great when we have a healthy competitive marketplace. Today really, it is a two horse race. It is, AWS and Azure are the main choices for customers. Everyone else is really a niche player. Even a company like IBM, there's good solutions that they have, but they play in a multi cloud world. Google has some great data services, and absolutely a important player when you talk about multi cloud for all they've done with Kubernetes and Istio. I'm going to be at Kube Con in a couple of weeks and Google is front and center there. But if you talk about the general marketplace, Microsoft has a lot of customers, they had a lot of applications and therefore, can they continue to mature that market and grow their environment? Absolutely. AWS has so many customers, they have the marketplace is stronger. It's an area that I want to dig in a little bit more at this show is the Azure Marketplace, how much we talked about the ecosystem. But, can I just procure through the cloud and make it simpler? Big theme we've talked about is, cloud in the early days was supposed to be cheap and simple. And it is neither of those things. So, how do we make it easier, so that we can go from the 20% of applications in the public cloud, up to 50% or more? Because it is not about all everything goes to the public cloud, but making customers put the applications and their data in the right place at the right time with the right services. And then we haven't even talked about edge computing which Microsoft has a big push on, especially with their partners. We talked to HP, a little bit about that yesterday. But really the surface area that this show and Microsoft covers is immense and global. >> It is indeed, and we are going, this is our second day of three days of coverage and we're going to be getting into all of those things. We've got a lot of great guests. We have Cute Host, Keith Townsend, Dave Cahill, a former Wikibon guy, a lot of other fantastic people. So I'm excited to get it on with you today, Stu. >> Thank you, Rebecca. Great stuff. >> I'm Rebecca Knight, for Stu Miniman. Stay tuned for more of theCUBE's live coverage of Microsoft Ignite. (upbeat music`)

>> Announcer: Live, from Copenhagen, Denmark, it's theCUBE! Covering Nutanix.NEXT 2019. Brought to you by Nutanix. >> Welcome back everyone to theCUBE's live coverage of Nutanix.NEXT. We are at the Bella Center in Copenhagen, Denmark. I'm your host, Rebecca Knight, alongside of Stu Miniman, of course. We are joined by a good friend of theCUBE, Ray Wang, principal analyst and CEO of Constellation Research. Thank you so much for returning to theCUBE. >> Hey, how you doing? Good morning! >> Good morning, good morning! >> Good morning! (laughing) >> Good morning! >> I don't know. I get all my accents wrong out here. >> (laughing) So, you got a shout out on the main stage this morning, from Monica Kumar, congratulations on that. She talked about you and your research on the infinite role of computing. You also do a lot with the future of work. I know that that is really right in your wheelhouse right now. What are you hearing, what are you seeing, what kinds of conversations are you having that are interesting you? >> Yeah, so, this infinite computing option, it's one of the that we're talking about, the fact that you can scale out forever, right? And the problem that's holding us back has been technical debt, right? So all that legacy that everyone's got to figure out. It's like, my connections, my server, my disk-rack recovery, my disaster recovery, my backup, everything. It's a pain in the butt. And I'm still trying to get onto the cloud. So on that end, we're like, okay, all this stuff is holding us back, how do we get there? Now, the future of work is a little bit different. We're seeing a very very different set of work. People have talked about where we are the gig economy, but that's just one aspect of it. Everything is being decomposed into microservices. Large processes are becoming smaller and smaller microservices, they're being reusable, well our work and tasks are following the same way. We're getting smaller and smaller tasks, some are more repetitive, some are going to be automated, and it's really about where we actually find the difference between augmentation of humanity, and full automation, and that's where the next battle's going to be. >> Yeah, Ray, some of the discussions we've been having this week, is how do we really simplify the environment? The balance I hear from customers, on the one hand, they're always like, I don't have enough money, I don't have enough personnel, on the other hand, oh my gosh, that full automation sounds like you're going to put me out of a job. We know we're not putting everybody out of work in the next couple of years. There are challenges; we worry about the hollowing out of the center of the economy, but here, what Nutanix is trying to do, of course, is, I don't want to have to thrive in that complexity anymore, I want to be able to drive innovation, keep up with that, take advantage of that unlimited resources out there, so, where do you see, you've been here at the show, what are you hearing from the customers here? Anything different in Europe versus back in North America that you'd share about that journey onto the changing roles? >> Oh it's a great point. It's about simplifying everything where you can, it's about areas of automation where they make sense. Here in Europe it's slightly different because a lot of the focus in Europe has been about cost and efficiency, followed by of course regulatory. Those have been the two drivers. And they've been battling that in order to be, even they will look at some level of innovation. Where in the US, people are head on doing innovation, regulatory and operational efficiency at the same time. So that creates a very very different environment. But what we have noticed are some patterns, especially when we look at automation and AI; there are four areas out of seven where we see a lot more automation that's happening. The first one is massively repetitive tasks, those are things, yeah, got to get that out of the way, we don't do this very very well. The second one is really thinking about massive nodes of interaction. When you're connected to multiple places, multiple organizations, multiple instances, that's something where we start to get overwhelmed, and then of course, there's lots of volume. If you've got lots of volume or requests that are coming through, you can't possibly handle that, and that's a place where we see a lot of machine scale. And the last piece is really when you have to scale, humans don't scale very well. However, it's actually not a hollowing out of the middle; it's actually a hollowing out of the ends in a very, very real end, because really really simple tasks go away, super complex tasks go away, and the middle actually remains, and the middle is things that are complex that cannot be recreated by math, they're also areas that require a lot of creativity, humans make the rules, we break the rules, and then the last part is really fine motor skills and presence, the machines still aren't as good. So we still have some hope. So the middle stays, it's the hollowing out of the ends, the high end jobs and the low end jobs are the ones where we're going to see a lot of risk. >> So what does that mean? So we have, leaving the middle there, and as you said, the high end jobs and the low end jobs go away, but what does that mean in terms of the skills? In terms of what employers are looking for, in terms of what they need in their prospective applicants and hirees. >> That's a great point. Soft skills are important; it's the qualitative skills that become even more important, it's also being able to manage and orchestrate the hard skills; because you don't necessarily have to know how to do the calculation, you have to just know which algorithm to apply. >> Okay, and then also, these soft skills of managing people, I'm assuming too? Because computers are not so good at that either. >> Yes. Soft skills are managing people, but also manage the human and machine equation that's going to happen. Because we have to train the machines, the machines aren't going to know that level of intuition, and there's a large amount of training that's going to happen over time. >> All right. So, Ray, one of the things Nutanix is doing is, as they've been transforming to not only subscription, software's always been at their core, but they're starting to do not just infrastructure software, but application software. I know you live in that world quite a lot, so when you hear Nutanix talking about building databases, delivering these services, it's something that I look at, Amazon does some of that, but for the most part they're infrastructure and build on top of us. How do you think, how is Nutanix doing, what are some of the challenges for them, going up against some of the bellwethers out there in tech, and all the open source projects that are out there. >> So the challenge is always going to be, there is a one dominant player in every market. And what they're providing is an alternative to allow the orchestration of not having that, not only that dominant player, but a choice. So in every single market, they're focused on giving users choice, and giving the ability to aggregate, and bring everything into one single plane. That is tough to do, right? And the fact that they see that as their big hairy audacious goal, that's impressive. If you said they were going to do this three years ago, I wouldn't have believed them. >> Well yeah, I think back to, remember almost 10 years ago, VMware tried to get into applications, they bought Zimbra, they bought a few others. Cisco did like 26 adjacencies, they were going to take over video and do all these things, and we've seen lots of failures over the years. They refocused on their core, was a big thing that I heard, that the users seem to be excited about. Are there areas that you're find especially interesting as to where Nutanix is poking? >> So, I would say that Nutanix three years ago was a little bit sleepy. They got comfortable, they did the stuff that they did really well, and it feels like, maybe about 12 months ago, Dheeraj had a different vision. Like something snapped, something hit, he said this isn't working, we're going to change things, and we've seen a whole bunch of new talent come into play. We've also seen a huge expansion of what they're trying to do, and a cleanup of all those side projects that were all going on before. So I think they've actually honed in on, okay, if we can simplify this piece, this is a money-winning business for some time, and they're talking about 80% margins last quarter, I mean that's huge, and that's just trying to save customers money, and make their lives simpler. >> Do you think that they have the messaging right? Because, I mean, they're going to this Thoreauvian/Emersonian idea of simplify, simplify, simplify, and it does resonate, of course! What customer doesn't want a simpler computing experience? But do you think that they are reaching the right people, and they have obviously very passionate customers, but are they getting into new businesses. >> I think they're getting to the businesses that their customers are asking them to, those adjacencies are huge, I think and when you think about cleaning up technical debt, all that legacy debt that you actually have to fix, I mean, this is where you begin. It's so hard to make that cloud journey to begin with, it's even harder to carry all that legacy with you. And we're going to see a lot more of this going forward. >> All right. So, Ray, talk a little bit about, I loved an event you did last year, the people's centered digital future. Help explain to our audience what this is about, and where you're taking it again this year. >> So that event was a one-time event. We were celebrating the 70th anniversary of the United Nations founding, we were celebrating almost 50 years of the internet, and 50% of the world being connected to the internet. And part of the reason that was an important event was, we really felt that there was a need to get back to the roots of where the internet had begun, and more importantly, talk about where we are today in the world of privacy. One of the biggest challenges we have in the a digital world is that your personal data, your genomics, all this information about you is being brokered for free. And what we have to do is take that back. And by taking that back, what I mean is, we've got to make all these rights, property right. If we can make that a property right, we can leverage the existing rules and legislation that's there, and we can actually start paying people for that data through consent, and giving people that ability, on consent to data, could create lots of things, from universal basic income, to a brand new set of data economy that equalizes the playing field, while keeping the large tech giants. >> There's some of those big journeys that we went on, you talk about the internet, this year's 50th anniversary of the first walking on the moon, and you look at how entire countries rallied together, so much technology was-- >> Yeah, look at India. >> Spun off of what they've done there, it's like we need some rallying cries in today's day and age to solve some of these big day and age. Is that AI? Where are some of the big areas that you see tech needing to drive forward in the next decade? >> I think the big area's going to be around decentralization, giving individuals more empowerment. We've got large, big tech companies, that are, I'd say, imbalanced. We start companies right away, building monopolies on day one, and we don't open up those markets. And the question is, how do we create a level playing field for the individual to be to compete, to bring a new idea, and to innovate, if that's continuously stifled by big technology companies without an opportunity, we're in trouble. And so that starts by making data a property right, to the personal data. It starts by also creating marketplaces for that data, and those marketplaces have to have regulations, similar to capital market flows. The way treat exchanges, we treat marketplaces, we need to do the same thing with the way we do with data, and then the third piece, there has to be some level of a tax, that goes to all these data economies, so that they can fund the infrastructure and the watch dogs that are there. Now this is coming from a free market, I'm a free market capitalist, okay? I can't stand regulation, but I also realize that it's so important that we have a fair market. >> But do you, we know so much about how Americans are so much more cavalier about their privacy than even Europeans, what will it take to galvanize Americans to care about those little crumbs that they're leaving on the internet, that is the data that you say should be a property right, that we should be paid for? >> I think it's going to start with companies actually take, and do the right thing, where they actually give them that opportunity to monetize that information. >> Will they do that? >> I think the new set of startups are starting to do that, because they're looking at the risk that's being posed, at Facebook and Google and Amazon, on the anti-trust, DOJ, FCC, they're all coming in at the same time, the FTC, they're all wondering, do we break these companies up or not? The short answer is, I don't think they're going to, because we're competing with China, and when you're looking at that scale of data, where Amazon's transactions are only 1/10 of Ali Baba's? That's huge. So the consolidation has to happen, but we need to create a layer that actually democratizes and creates a fair trading play. >> And those startups, you think, can compete with established players? >> I think once we set the roles, and the ground rules, I think people are going to be able to do that, but once you free that data, what are we competing on now? You have to pay for my consent, you have to earn my business, you can't trade it for free, or just say, "Hey look, you are the product." That changes everything. >> Rebecca: Yeah, that's a good point. >> Ray, I know you spend a lot of time talking to, and giving advice to some of the leaders in technology, you're welcome to get into some specifics about Nutanix, or some of the cloud players, but what are some of the key themes, what are people getting right, and what are they still doing wrong? >> Okay, so theme number one, this is going to be a multicloud hybrid world for a long time. Anybody that's bucking the multicloud trend, they've missed the point, right? Because we want portability in data, there's only two or three players in every single market, if I can't move my data, my workloads, and my IO in and out, then you've actually created vendor lock-in from hell. And I think customers are going to protest against that. The second one, and you guys are probably following this trend a lot, is really about AI ethics and design principles for AI. So what is ethical AI? We've got five things that are important: The first one is make sure it's transparent. See the algorithms, see what they write. Second one, make sure it's explainable. Hey, bias is not a bad thing, so if I'm discriminating against redheads, with, left-handed, and that happened to like, I don't know, Oracle, fine. But, if that was unintended, and you're discriminating against that, then we have to get rid of that, right? And so we have to figure out how to reduce that kind of bias, if it's unwanted bias. If you discover that you're discriminating, and not being inclusive, you've got to make sure that you address that. So then the next part is, it's got to be reversible. And once you have that reversibility, we also make sure that we can train these systems over time. And then the last piece is, Musk could be right! Musk could be right, the machines might take over, but if you insert a human at the beginning of the process, and at the end of the process, you won't get taken over. >> I want to hear about what the future of work looks like for Ray Wang. You are on the road constantly, you are (laughs) you are moving your data from one place, you are everywhere, all the time. So what do you have on next, what's exciting you about your professional life? >> I think the challenge's that we are living in a world where there's too much information, too much content. And you guys say this all the time, right? Separating the signal from the noise. And people are willing to pay for that signal. But that is a very very tough job, right? It's about the analysis, the insights, and when you have that, people don't want to read through your reports. They don't want to watch through the videos. They just want to call you up and say, "Hey, what's going on?" And get the short version of it. And that's what's making it very interesting, because you would expect this would be in a chat bot, it'd be in a robo advisor, doesn't work that way. People still want the human connection, especially given all that data out there, they want the analysis and insights that you guys provide, that's very very important, but even more important right now, it's really about getting back to those relationships. I think people are very careful about the relationships they're keeping, they're also curating those relationships, and coming back to spending more time. And so we're seeing a lot more of in-person meetings, in-person events, very very small, curated conversations, and I think that's coming back. I mean that's why we do our conference every year, as well, we try to keep 200 to 300 people intimately together. >> Those human connections, not going away. (laughs) >> Nope, not going away, in an automated, AI, digital world! This is our post-digital future. >> That's excellent. Well Ray, thanks you so much for coming on theCUBE, it's always so much fun to talk to you. >> Hey, thanks a lot. >> High energy guy (laughs). >> Low energy. >> I'm Rebecca Knight for Stu Miniman, we will have more from the Bella Center at Nutanix.NEXT coming up in just a little bit. (upbeat music)

>> from atop the Salesforce Tower in downtown San Francisco. It's the Q covering Accenture Innovation Date brought to you by ex center >> Hey, welcome back Your body jefe Rick here from the Cube were high atop San Francisco in the essential innovation hub. It's in the middle of the Salesforce Tower. It's a beautiful facility. They think you had it. The grand opening about six months ago. We're here for the grand opening. Very cool space. I got maker studios. They've got all kinds of crazy stuff going on. But we're here today to talk about Cloud in this continuing evolution about cloud in the enterprise and hybrid cloud and multi cloud in Public Cloud and Private Cloud. And we're really excited to have a couple of guys who really helping customers make this journey, cause it's really tough to do by yourself. CEOs are super busy. They worry about security and all kinds of other things. So centers, often a trusted partner. We got two of the leaders from center joining us today's Prasad Sankaran. He's the senior managing director of Intelligent Cloud infrastructure for Center Welcome and Larry Soccer, the global managing director. Intelligent cloud infrastructure offering from central gentlemen. Welcome. I love it. It intelligent cloud. What is an intelligent cloud all about? Got it in your title. It must mean something pretty significant. >> Yeah, I think First of all, thank you for having us, but you're absolutely Everything's around becoming more intelligent around using more automation. And the work that, you know we delivered to our clients and cloud, as you know, is the platform to which all of our clients are moving. So it's all about bringing the intelligence not only into infrastructure, but also into cloud generally. And it's all driven by software, >> right? It's just funny to think where we are in this journey. We talked a little bit before we turn the cameras on and there you made an interesting comment when I said, You know, when did this cloud for the Enterprise start? And you took it back to sass based applications, which, >> you know, you were sitting in the sales force builder. >> That's true. It isn't just the tallest building in here, and everyone all right, everyone's >> had a lot of focus on AWS is rise, etcetera. But the real start was really getting into sass. I mean, I remember We used to do a lot of Siebel deployments for CR M, and we started to pivot to sales, for some were moving from remedy into service. Now I mean, we went through on premise collaboration, email todo 360 5 So So we've actually been at it for quite a while in the particularly the SAS world. And it's only more recently that we started to see that kind of push to the, you know, the public pass, and it's starting to cloud native development. But But this journey started, you know, it was that 78 years ago that we really start to see some scale around it >> and tell me if you agree. I think really, what? The sales forces of the world and the service now is of the world off. 3 65 kind of broke down some of those initial barriers which were all really about security and security. Security secure. It's always too here where now security is actually probably an attribute >> and loud can brink Absolutely. In fact, I'm in those barriers took years to bring down. I still saw clients where they were forcing salesforce tor service. Now to put you know instances on Prime, and I think I think they finally woke up toe. You know, these guys invested ton in their security organizations. You know, there's a little of that needle in the haystack. You know, if you breach a data set, you know what you're getting after. But when you happen to sail sports, it's a lot harder. And so you know. So I think that security problems, I've certainly got away. We still have some compliance, regulatory things, data sovereignty. But I think security and not not that it's all by any means that you know, it's always giving an ongoing problem. But I think they're getting more comfortable with their data being up in the public domain, right? Not public. >> I think it also help them with their progress towards getting cloud native. So, you know, you pick certain applications which were obviously hosted by sales force and other companies, and you did some level of custom development around it. And now I think that's paved the way for more complex applications and different workloads now going into, you know, the public cloud and the private cloud. But that's the next part of the journey, >> right? So Let's back up 1/2 a step cause then, as you said, a bunch of stuff then went into Public Cloud, right? Everyone's putting in AWS and Google. Um, IBM has got a public how there was a lot more. They're not quite so many as there used to be. Um, but then we ran into a whole new home, Those of issues, right, Which is kind of opened up this hybrid cloud. This multi cloud world, which is you just can't put everything into a public clouds there certain attributes that you need to think about and yet from the application point of view, before you decide where you deploy that. So I'm just curious. If you can share now, would you guys do with clients? How should they think about applications? How, after they think about what to deploy where I >> think I'll start in the, You know, Larry has a lot of expertise in this area. I think you know, we have to obviously start from an application centric perspectives. You got to take a look at you know where your applications have to live water. What are some of the data implications on the applications or do you have by way of regulatory and compliance issues? Or do you have to do as faras performance because certain applications have to be in a high performance environment? Certain other applications don't think a lot of these factors will then drive where these applications need to recite. And then what we're seeing in today's world is really accomplish. Complex, um, situation where you have a lot of legacy, but you also have private as well as public cloud. So you approach it from an application perspective. >> Yeah. I mean, if you really take a look at Army, you look at it centers clients, and we were totally focused on up into the market Global 2000 savory. You know, clients typically have application portfolios ranging from 520,000 applications. And really, I mean, if you think about the purpose of cloud or even infrastructure for that, they're there to serve the applications. No one cares if your cloud infrastructure is not performing the absolute. So we start off with an application monetization approach and ultimately looking, you know, you know, with our tech advisory guys coming in, there are intelligent engineering service is to do the cloud native and at mod work our platforms. Guys, who do you know everything from sales forward through ASAP. They should drive a strategy on how those applications going to evolve with its 520,000 and determined hey, and usually using some like the six orders methodology. And I'm I am I going to retire this Am I going to retain it? And I'm gonna replace it with sass. Am I gonna re factor in format? And it's ultimately that strategy that's really gonna dictate a multi in and, you know, hybrid cloud story. So it's based on the applications data, gravity issues where they gonna reside on their requirements around regulatory, the requirements for performance, et cetera. That will then dictate the cloud strategies. I'm you know, not a big fan of going in there and just doing a multi hybrid cloud strategy without a really good up front application portfolio approach, right? How we're gonna modernize that >> it hadn't had a you segment. That's a lot of applications. And you know, how do you know the old thing? How do you know that one by that time, how do you help them pray or size? Where they should be focusing on. Yes, >> it. Typically, what we do is work with our clients to do a full application portfolio analysis, and then we're able to then segment the applications based on, you know, important to the business and some of the factors that both of us mentioned. And once we have that, then we come up with an approach where certain sets of applications have moved to sass certain other applications you moved past. So you know, you're basically doing the re factoring and the modernization, and then certain others, you know, you can just, you know, lift and shift. So it's really a combination off both modernization as well as migration. It's a combination off that, but to do that, you have initially look at the entire set of applications and come up with that approach. >> I'm just curious where within that application assessment, where is cost savings? Where is, uh, this is just old and where is opportunities to innovate faster? Because we know a lot of lot of talk really. Days has cost savings, but what the real advantages is execution speed if you can get it. >> If >> you could go back three or four years and we had there was a lot of CEO discussions around cost savings. I'm not really have seen our clients shift. It costs never goes away, obviously right. But there's a lot greater emphasis now on business agility. You know, howto innovate faster, get, get new capabilities, market faster to change my customer experience. So it's really I t is really trying to step up and, you know, enabled the business toe to compete in the marketplace. So we're seeing a huge shift in emphasis or focus at least starting with, you know, how do I get better business agility outta leverage to cloud and cloud native development to get there upper service levels? Actually, we started seeing increase on Hey, you know, these applications need to work. It's actress, So obviously cost still remains a factor, but we seem much more, you know, much more emphasis on agility, you know, enabling the business on giving the right service levels of right experience to the user. Little customers. Big pivot there, >> Okay. And let's get the definitions out because you know a lot of lot of conversation about public clouds. Easy private clouds, easy but hybrid cloud and multi cloud and confusion about what those are. How do you guys define them? How do you help your customers think about the definition? Yes, >> I think it's a really good point. So what we're starting to see is there were a lot of different definitions out there. But I think as I talk to my clients and our partners, I think we're all starting to come toe. You know, the same kind of definition on multi cloud. It's really about using more than one cloud. But hybrid, I think, is a very important concept because hybrid is really all about the placement off the workload or where your application is going to run on. And then again, it goes to all of these points that we talked about data, gravity and performance and other things. Other factors. But it's really all about where do you place the specific workload >> if you look at that, so if you think about public, I mean obviously gives us the innovation of the public providers. You look at how fast Amazon comes out with new versions of Lambda etcetera, so that's the innovations. There obviously agility. You could spend up environments very quickly which is, you know, one of the big benefits of it. The consumption economic models. So that is the number of drivers that are pushing in the direction of public. You know, on the private side, they're still it's quite a few benefits that don't get talked about as much. Um, so you know, if you look at it performance, you know, if you think the public world, you know, although they're scaling up larger T shirts, et cetera, they're still trying to do that for a large array of applications on the private side, you can really Taylor somethingto very high performance characteristics. Whether it's you know, 30 to 64 terabyte Hana, you can get a much more focused precision environment for business critical workloads like that article, article rack. You know, the Duke clusters everything about fraud analysis. So that's a big part of it. Related to that is the data gravity that Prasad just mentioned. You know, if I've got a 64 terrified Hana database, you know, sitting in my private cloud, it may not be that convenient to go and put get that data shared up in red shift or in Google's tensorflow. So So there's some data gravity out. Networks just aren't there. The Laden sea of moving that stuff around is a big issue. And then a lot of people of investments in their data centers. I mean, the other piece, that's interesting. His legacy, you know, You know, as we start to look at the world a lot, there's a ton of Could still living in, You know, whether it's you, Nick system, that IBM mainframes. There's a lot of business value there, and sometimes the business cases aren't aren't necessarily there toe to replace them. Right. And in world of digital, the decoupling where I can start to use micro service is we're seeing a lot of trends. We worked with one hotel to take the reservation system. You know, Rapid and Micro Service is, um, we then didn't you know, open shift couch base, front end. And now when you go against, you know, when you go and browsing properties, you're looking at rates you actually going into distributed database cash on, you know, in using the latest cloud native technologies that could be dropped every two weeks or every three or four days for my mobile application and It's only when it goes, you know, when the transaction goes back, to reserve the room that it goes back there. So we're seeing a lot of power with digital decoupling, but we still need to take advantage of, you know, we've got these legacy applications. So So the data centers air really were trying to evolve them. And really, just, you know, how do we learn everything from the world of public and struck to bring those saints similar type efficiencies to the to the world of private? And really, what we're saying is this emerging approach where I can start to take advantage of the innovation cycles that land is that you know, the red shifts the azure functions of the public world. But then maybe keep some of my more business critical regulated workloads. You know, that's the other side of the private side, right? I've got G X p compliance. If I've got hip data that I need to worry about GDP are you know, the whole set of regular two requirements Over time, we do anticipate the public guys will get much better and more compliant. In fact, they made great headway already, but they're Still not a number of clients are still, you know, not 100% comfortable from rail client's perspective. >> Gotta meet Teresa Carlson. She'll change him. Who runs that AWS Public Sector is doing amazing things, obviously with big government contracts. But but you raise real inching point later. You almost described what I would say is really a hybrid application in this thing. This hotel example that you use because it's is, you know, kind of break in the application and leveraging micro service is to do things around the core that allowed to take advantage of some this agility and hyper fast development, yet still maintain that core stuff that either doesn't need to move Works fine. Be too expensive. Drea Factor. It's a real different weight. Even think about workloads and applications into breaking those things into bits. >> And we see that pattern all over the place. I'm gonna give you the hotel Example Where but finance, you know, look at financial service. Is retail banking so open banking a lot. All those rito applications are on the mainframe. I'm insurance claims and and you look at it, the business value, replicating a lot of like the regulatory stuff, the locality stuff. It doesn't make sense to write it. There's no rule inherent business values of I can wrap it, expose it and you know the micro service's architecture now. D'oh cloud native front end. That's gonna give me a 360 view a customer, Change the customer experience. You know, I've got a much you know, I can still get that agility. The the innovation cycles by public. Bye bye. Wrapping my legacy environment >> in person, you rated jump in and I'll give you something to react to, Which is which is the single glass right now? How do I How did I manage all this stuff now? Not only do I have distributed infrastructure now, I've got distributed applications and the thing that you just described and everyone wants to be that single pane of glass Everybody wants to be the app that's upon everybody. Screen. How are you seeing people deal with the management complexity of these kind of distributed infrastructures? If you will Yeah, >> I think that that's that's an area that's, ah, actually very topical these days because, you know, you're starting to see more and more workers. Goto private cloud and so you've got a hybrid infrastructure you're starting to see move movement from just using the EMS to, you know, the cantinas and Cuban Edie's. And, you know, we talked about Serval s and so on. So all of our clients are looking for a way, and you have different types of users as well. Yeah, developers. You have data scientists. You have, you know, operators and so on. So they're all looking for that control plane that allows them access and a view toe everything that is out there that is being used in the enterprise. And that's where I think you know, a company like Accenture were able to use the best of breed toe provide that visibility to our clients. >> Yeah. I mean, you hit the nail on the head. It's becoming, you know, with all the promise of cloud and all the power. And these new architectures is becoming much more dynamic, ephemeral, with containers and kubernetes with service computing that that one application for the hotel, they're actually started, and they've got some actually, now running a native us of their containers and looking at serverless. So you gonna even a single application can span that and one of things we've seen is is first. You know, a lot of our clients used to look at, you know, application management, you know, different from their their infrastructure. And the lines are now getting very blurry. You need to have very tight alignment. You take that single application. You know, if any my public side goes down or my mid tier with my you know, you know, open shipped on VM where it goes down on my back and mainframe goes down. Or the networks that connected to go down the devices that talked it. It's a very well, despite the power, very complex environment. So what we've been doing is first we've been looking at, you know, how do we get better synergy across what we you know, application service is teams that do the application manager an optimization cloud infrastructure, you know, how do we get better alignment that are embedded security, You know, how do you know what are managed to Security Service's and bringing those together? And then what we did was we looked at, you know, we got very aggressive of cloud for a strategy and, you know, how do we manage the world of public. But when looking at the public providers of hyper scale er's and how they hit incredible degrees of automation, we really looked at, said and said, Hey, look, you gotta operate differently in this new world. What can we learn from how the public guys they're doing that? We came up with this concept We call it running different. You know, how do you operate differently in this new multi speed? You know, you know, hot, very hybrid world across public, private demon, legacy environment and started looking say OK, what is it that they do? You know, first they standardize, and that's one of the big challenges you know, going to almost all of our clients in this a sprawl. And you know, whether it's application sprawl, its infrastructure, sprawl and >> my business is so unique. The Larry no business out there has the same process that we have. So we started make you know how to be >> standardized like center hybrid cloud solution apart with HP. Envy em where we, you know, how do we that was an example. So we can get thio because you can't automate unless you standardise. So that was the first thing you know, standardizing service catalog. Standardizing that, um, you know, the next thing is the operating model. They obviously operate differently. So we've been putting a lot of time and energy and what I call a cloud and agile operating model. And also a big part of that is truly you hear a lot about Dev ops right now, but truly putting the security and and operations into Deb set cops of bringing, you know, the development in the operations much tied together. So spending a lot of time looking at that and transforming operations re skilling the people you know, the operators of the future aren't eyes on glass there. Developers, they're writing the data ingestion, the analytic algorithms, you know, to do predictive operations. They're writing the automation script to take work, you know, test work out. Right. And over time, they'll be tuned in the air. Aye, aye. Engines to really optimize the environment and then finally has presided. Looted thio. Is that the platforms that control planes? That doing that? So, you know, we What we've been doing is we've had a significant investments in the eccentric cloud platform, our infrastructure automation platforms and then the application teams with it with our my wizard framework, and we've been starting to bring that together. You know, it's an integrated control plane that can plug into our clients environments to really manage seamlessly, you know, and provide, you know, automation Analytics. Aye, aye. Across APS, cloud infrastructure and even security. Right. And that, you know, that really is a iob is right. I mean, that's delivering on, you know, as the industry starts toe define and really coalesce around, eh? I ops, that's what we use. >> So just so I'm clear that so it's really your layer your software layer kind of management layer that that integrates all these different systems and provides kind of a unified view. Control, I reporting et cetera. Right >> Exactly. Then can plug in and integrate, you know, third party tools. I had to do some strategic function. >> I'm just I'm just >> curious is one of the themes that we here out in the press right now is this is this kind of pull back of public cloud app. Some of them are coming back. Or maybe it was, you know, kind of a rush. Maybe a little bit too aggressively. What are some of the reasons why people are pulling stuff back out of public clouds, that just with the wrong it was just the wrong application? The costs were not what we anticipated to be. We find it, you know, what are some of the reasons that you see after coming back in house? Yeah, >> I think it's >> a variety of factors. I mean, it's certainly cost, I think is one. So as there are multiple private options and you know, we don't talk about this, but the hyper skills themselves are coming out with their own different private options, like Aunt Ours and out pulls and other stack and on. And Ali Baba has obsessed I and so on. So you see a proliferation of that and you see many more options around private cloud. So I think the cost is certainly a factor. The second is I think data gravity is, I think, a very important point because as you're starting to see how different applications have to work together, then that becomes a very important point. The third is just about compliance, and, you know, the regulatory environment. As we look across the globe, you know, even outside the U. S. We look at Europe and other parts of Asia as clients and moving more to the cloud. You know, that becomes an important factor. So as you start to balance these things, I think you have to take a very application centric view. You see some of those some some maps moving back, and and I think that's the part of the hybrid world is that you know, you can have a nap running on the private cloud and then tomorrow you can move this. Since it's been containerized to run on public and it's, you know, it's all managed that look >> e. I mean, cost is a big factor if you actually look at it. Most of our clients, you know, they typically you were big cap ex businesses, and all of a sudden they're using this consumption consumption model. And they weren't really They didn't have a function to go and look at the thousands or millions of lines of it, right? You know, as your statement, exactly think they misjudged, you know, some of the scale on B e e. I mean, that's one of the reasons we started. It's got to be an application lead modernization that really that will dictate that. And I think in many cases, people didn't may not have thought through which application. What data? There The data, gravity data. Gravity's a conversation I'm having just by with every client right now. You know, I've got a 64 terabyte hana, and that's the core. My crown jewels. That data, you know, how do I get that to tensorflow? How'd I get that >> right? But if Andy was >> here, though, Andy would say, we'll send down the snow. The snow came from which virgin snow plows Snowball snowball. Well, they're snowballs. But we've seen the >> hold of a truck killer >> that comes out and he'd say, Take that and stick it in the cloud. Because if you've got that data in a single source right now, you can apply multitude of applications across that thing. So they you know they're pushing. Get that date end in this single source course than to move it, change it, you know you run it. All these micro lines of billing statement take >> the hotel. I mean, their data stolen the mainframe. So if they may want need to expose it? Yeah, they have a database cash, and they move it out. You know, the particulars of data sets get larger, it becomes, you know, the data. Gravity becomes a big issue. Because no matter how much you know, while Moore's law might be might have elongated from 18 to 24 months, the network will always be the bottle, Mac. So ultimately, we're seeing, you know, a CZ. We proliferate more and more data, all data sets get bigger and better than network becomes more of a bottleneck. Conned. That's a lot of times you gotta look at your applications. They have. I've got some legacy database I need to get. Thio. I need this to be approximately somewhere where I don't have, you know, high bandwith o r. Right Or, you know, highlight and see type or so egress costs a pretty big deals. My date is up in the cloud, and I'm gonna get charged for pulling it off. You know that That's been a big issue. >> You know, it's funny, I think, and I think a lot of the issue, obviously complexity building. It's a totally different building model, but I think to a lot of people will put stuff in a public cloud and then operated as if they bought it. And they're running in the data center in this kind of this. Turn it on, turn it off when you need it. Everyone turns. Everyone loves to talk about the example turning it on when you need it. But nobody ever talks about turning it off when you don't. But but the kind of clothes on our conversation I won't talk about a I and applied a I. CoSine is a lot of talk in the market place, but a time machine learning. But as you guys know pride better than anybody, it's the application of a I and specific applications, which really on unlocks the value. And as we're sitting here talking about this complexity, I can't help but think that, you know, applied a I in a management layer like your run differently, set up to actually know when to turn things on, when to turn things off when you moved in but not moved, it's gonna have to be machines running that right cause the data sets and the complexity of these systems is going to be just overwhelming. Yeah, yeah, >> absolutely completely agree with you in fact. Ah, essential. We actually referred to the Seoul area as Applied intelligence. Ah, and that's our guy, right? And, uh, it is absolutely to add more and more automation Move everything Maur toe where it's being run by the machine rather than, you know, having people really working on these things >> yet, e I mean, if you think you hit the nail on the head, we're gonna a eyes e. I mean, given how things getting complex, more ephemeral, you think about kubernetes et cetera. We're gonna have to leverage a humans or not to be able to get, you know, manage this. The environment is important, right? What's interesting way we've used quite effectively for quite some time. But it's good at some stuff, not good at others. So we find it's very good at, like, ticket triage, like ticket triage, chicken routing, et cetera. You know, any time we take over account, we tune our AI ai engines. We have ticket advisers, etcetera. That's what probably got the most, you know, most bang for the buck. We tried in the network space. Less success to start even with, you know, commercial products that were out there. I think where a I ultimately bails us out of this is if you look at the problem. You know, a lot of times we talked about optimizing around cost, but then performance. I mean, and it's they they're somewhat, you know, you gotta weigh him off each other. So you've got a very multi dimensional problem on howto I optimize my workloads, particularly. I gotta kubernetes cluster and something on Amazon, you know, sums running on my private cloud, etcetera. So we're gonna get some very complex environment. And the only way you're gonna be ableto optimize across multi dimensions that cost performance service levels, you know, and then multiple options don't do it public private, You know, what's my network costs etcetera. Isn't a I engine tuning that ai ai engines? So ultimately, I mean, you heard me earlier on the operators. I think you know, they write the analytic albums, they do the automation scripts, but they're the ultimate ones who then tune the aye aye engines that will manage our environment, right. And I think it kubernetes will be interesting because it becomes a link to the control plane optimize workload placement between >> when the best thing to you. Then you have dynamic optimization can. You might be up to my tanks at us right now, but you might be optimizing for output the next day. So exists really a you know, kind of Ah, never ending >> when you got you got to see them >> together with it. And multi dimension optimization is very difficult. So I mean, you know, humans can't get their head around. Machines can, but they need to be trained. >> Well, Prasad, Larry, Lots of great opportunities for for centuries bring that expertise to the table. So thanks for taking a few minutes to walk through some of these things. Our pleasure. Thank you. Raise Prasad is Larry. I'm Jeff. You're watching the Cube. We are high above San Francisco in the Salesforce Tower. Theis Center. Innovation have in San Francisco. Thanks for watching. We'll see you next time

>> Hey, welcome back. Your body, Jefe Rick here from the Cube were high atop San Francisco in the century innovation hub. It's in the middle of the Salesforce Tower. It's a beautiful facility. They think you had it. The grand opening about six months ago. We're here for the grand opening. Very cool space. I got maker studios. They've got all kinds of crazy stuff going on. But we're here today to talk about Cloud in this continuing evolution about cloud in the enterprise and hybrid cloud and multi cloud in Public Cloud and Private Cloud. And we're really excited to have a couple of guys who really helping customers make this journey, cause it's really tough to do by yourself. CEOs are super busy. There were about security and all kinds of other things, so centers, often a trusted partner. We got two of the leaders from center joining us today's Prasad Sankaran. He's the senior managing director of Intelligent Cloud infrastructure for Center Welcome and Larry Soccer, the global managing director. Intelligent cloud infrastructure offering from central gentlemen. Welcome. I love it. It intelligent cloud. What is an intelligent cloud all about? Got it in your title. It must mean something pretty significant. >> Yeah, I think First of all, thank you for having us, but yeah, absolutely. Everything's around becoming more intelligent around using more automation. And the work that, you know we delivered to our clients and cloud, as you know, is the platform to reach. All of our clients are moving. So it's all about bringing the intelligence not only into infrastructure, but also into cloud generally. And it's all driven by software, >> right? It's just funny to think where we are in this journey. We talked a little bit before we turn the cameras on and there you made an interesting comment when I said, You know, when did this cloud for the Enterprise start? And you took it back to sass based applications, which, >> you know you were sitting in the sales force builder. >> That's true. It isn't just the tallest building in >> everyone's, you know, everyone's got a lot of focus on AWS is rise, etcetera. But the real start was really getting into sass. I mean, I remember we used to do a lot of Siebel deployments for CR M, and we started to pivot to sales, for some were moving from remedy into service now. I mean, we've went through on premise collaboration, email thio 3 65 So So we've actually been at it for quite a while in the particularly the SAS world. And it's only more recently that we started to see that kind of push to the, you know, the public pass, and it's starting to cloud native development. But But this journey started, you know, it was that 78 years ago that we really started. See some scale around it. >> And I think and tell me if you agree, I think really, what? The sales forces of the world and and the service now is of the world office 3 65 kind of broke down some of those initial beers, which are all really about security and security, security, security, Always to hear where now security is actually probably an attributes and loud can brink. >> Absolutely. In fact, I mean, those barriers took years to bring down. I still saw clients where they were forcing salesforce tor service Now to put, you know, instances on prime and I think I think they finally woke up toe. You know, these guys invested ton in their security organizations. You know there's a little of that needle in the haystack. You know, if you breach a data set, you know what you're getting after. But when Europe into sales force, it's a lot harder. And so you know. So I think that security problems have certainly gone away. We still have some compliance, regulatory things, data sovereignty. But I think security and not not that it sold by any means that you know, it's always giving an ongoing problem. But I think they're getting more comfortable with their data being up in the in the public domain, right? Not public. >> And I think it also helped them with their progress towards getting cloud native. So, you know, you pick certain applications which were obviously hosted by sales force and other companies, and you did some level of custom development around it. And now I think that's paved the way for more complex applications and different workloads now going into, you know, the public cloud and the private cloud. But that's the next part of the journey, >> right? So let's back up 1/2 a step, because then, as you said, a bunch of stuff then went into public cloud, right? Everyone's putting in AWS and Google. Um, IBM has got a public how there was a lot more. They're not quite so many as there used to be, Um, but then we ran into a whole new host of issues, right, which is kind of opened up this hybrid cloud. This multi cloud world, which is you just can't put everything into a public clouds. There's certain attributes is that you need to think about and yet from the application point of view before you decide where you deploy that. So I'm just curious. If you can share now, would you guys do with clients? How should they think about applications? How should they think about what to deploy where I think >> I'll start in? The military has a lot of expertise in this area. I think you know, we have to obviously start from an application centric perspective. You go to take a look at you know where your applications have to live water. What are some of the data implications on the applications, or do you have by way of regulatory and compliance issues, or do you have to do as faras performance because certain applications have to be in a high performance environment. Certain other applications don't think a lot of these factors will. Then Dr where these applications need to recite and then what we think in today's world is really accomplish. Complex, um, situation where you have a lot of legacy. But you also have private as well as public cloud. So you approach it from an application perspective. >> Yeah. I mean, if you really take a look at Army, you look at it centers clients, and we were totally focused on up into the market Global 2000 savory. You know how clients typically have application portfolios ranging from 520,000 applications? And really, I mean, if you think about the purpose of cloud or even infrastructure for that, they're there to serve the applications. No one cares if your cloud infrastructure is not performing the absolute. So we start off with an application monetization approach and ultimately looking, you know, you know, with our tech advisory guys coming in, there are intelligent engineering service is to do the cloud native and at mod work our platforms, guys, who do you know everything from sales forward through ASAP. They should drive a strategy on how those applications gonna evolve with its 520,000 and determined hey, and usually using some, like the six orders methodology. And I'm I am I going to retire this Am I going to retain it? And, you know, I'm gonna replace it with sass. Am I gonna re factor in format? And it's ultimately that strategy that's really gonna dictate a multi and, you know, every cloud story. So it's based on the applications data, gravity issues where they gonna reside on their requirements around regulatory, the requirements for performance, etcetera. That will then dictate the cloud strategies. I'm you know, not a big fan of going in there and just doing a multi hybrid cloud strategy without a really good up front application portfolio approach, right? How we gonna modernize that >> it had. And how do you segment? That's a lot of applications. And you know, how do you know the old thing? How do you know that one by that time, how do you help them pray or size where they should be focusing on us? >> So typically what we do is work with our clients to do a full application portfolio analysis, and then we're able to then segment the applications based on, you know, important to the business and some of the factors that both of us mentioned. And once we have that, then we come up with an approach where certain sets of applications he moved to sass certain other applications you move to pass. So you know, you're basically doing the re factoring and the modernization and then certain others you know, you can just, you know, lift and shift. So it's really a combination off both modernization as well as migration. It's a combination off that, but to do that, you have to initially look at the entire set of applications and come up with that approach. >> I'm just curious where within that application assessment, um, where is cost savings? Where is, uh, this is just old. And where is opportunities to innovate faster? Because we know a lot of lot of talk really. Days has cost savings, but what the real advantages is execution speed if you can get it. If >> you could go back through four years and we had there was a lot of CEO discussions around cost savings, I'm not really have seen our clients shift. It costs never goes away, obviously right. But there's a lot greater emphasis now on business agility. You know, howto innovate faster, get getting your capabilities to market faster, to change my customer experience. So So it's really I t is really trying to step up and, you know, enabled the business toe to compete in the marketplace. We're seeing a huge shift in emphasis or focus at least starting with, you know, how'd I get better business agility outta leverage to cloud and cloud native development to get their upper service levels? Actually, we started seeing increase on Hey, you know, these applications need to work. It's actress. So So Obviously, cost still remains a factor, but we seem much more for, you know, much more emphasis on agility, you know, enabling the business on, given the right service levels of right experience to the user, little customers. Big pivot there, >> Okay. And let's get the definitions out because you know a lot of lot of conversation about public clouds, easy private clouds, easy but hybrid cloud and multi cloud and confusion about what those are. How do you guys define him? How do you help your customers think about the definition? Yes, >> I think it's a really good point. So what we're starting to see is there were a lot of different definitions out there. But I think as I talked more clients and our partners, I think we're all starting to, you know, come to ah, you know, the same kind of definition on multi cloud. It's really about using more than one cloud. But hybrid, I think, is a very important concept because hybrid is really all about the placement off the workload or where your application is going to run on. And then again, it goes to all of these points that we talked about data, gravity and performance and other things. Other factors. But it's really all about where do you place the specific look >> if you look at that, so if you think about public, I mean obviously gives us the innovation of the public providers. You look at how fast Amazon comes out with new versions of Lambda etcetera. So that's the innovations there obviously agility. You could spend up environments very quickly, which is, you know, one of the big benefits of it. The consumption, economic models. So that is the number of drivers that are pushing in the direction of public. You know, on the private side, they're still it's quite a few benefits that don't get talked about as much. Um, so you know, if you look at it, um, performance if you think the public world, you know, Although they're scaling up larger T shirts, et cetera, they're still trying to do that for a large array of applications on the private side, you can really Taylor somethingto very high performance characteristics. Whether it's you know, 30 to 64 terabyte Hana, you can get a much more focused precision environment for business. Critical workloads like that article, article rack, the Duke clusters, everything about fraud analysis. So that's a big part of it. Related to that is the data gravity that Prasad just mentioned. You know, if I've got a 64 terabyte Hana database you know, sitting in my private cloud, it may not be that convenient to go and put get that data shared up in red shift or in Google's tensorflow. So So there's some data gravity out. Networks just aren't there. The laden sea of moving that stuff around is a big issue. And then a lot of people of investments in their data centers. I mean, the other piece, that's interesting. His legacy, you know, you know, as we start to look at the world a lot, there's a ton of code still living in, You know, whether it's you, nick system, just IBM mainframes. There's a lot of business value there, and sometimes the business cases aren't aren't necessarily there toe to replace them. Right? And in world of digital, the decoupling where I can start to use micro service is we're seeing a lot of trends. We worked with one hotel to take their reservation system. You know, Rapid and Micro Service is, um, we then didn't you know, open shift couch base, front end. And now, when you go against, you know, when you go and browsing properties, you're looking at rates you actually going into distributed database cash on, you know, in using the latest cloud native technologies that could be dropped every two weeks or everything three or four days for my mobile application. And it's only when it goes, you know, when the transaction goes back, to reserve the room that it goes back there. So we're seeing a lot of power with digital decoupling, But we still need to take advantage of, you know, we've got these legacy applications. So So the data centers air really were trying to evolve them. And really, just, you know, how do we learn everything from the world of public and struck to bring those saints similar type efficiencies to the to the world of private? And really, what we're seeing is this emerging approach where I can start to take advantage of the innovation cycles. The land is that, you know, the red shifts the functions of the public world, but then maybe keep some of my more business critical regulated workloads. You know, that's the other side of the private side, right? I've got G X p compliance. If I've got hip, a data that I need to worry about GDP are there, you know, the whole set of regular two requirements. Now, over time, we do anticipate the public guys will get much better and more compliant. In fact, they made great headway already, but they're still not a number of clients are still, you know, not 100% comfortable from my client's perspective. >> Gotta meet Teresa Carlson. She'll change him, runs that AWS public sector is doing amazing things, obviously with big government contracts. But but you raise real inching point later. You almost described what I would say is really a hybrid application in this in this hotel example that you use because it's is, you know, kind of breaking the application and leveraging micro service is to do things around the core that allowed to take advantage of some this agility and hyper fast development, yet still maintain that core stuff that either doesn't need to move. Works fine, be too expensive. Drea Factor. It's a real different weight. Even think about workloads and applications into breaking those things into bits. >> And we see that pattern all over the place. I'm gonna give you the hotel Example Where? But finance, you know, look at financial service. Is retail banking so open banking a lot. All those rito applications are on the mainframe. I'm insurance claims and and you look at it the business value of replicating a lot of like the regulatory stuff, the locality stuff. It doesn't make sense to write it. There's no rule inherent business values of I can wrap it, expose it and in a micro service's architecture now D'oh cloud native front end. That's gonna give me a 360 view a customer, Change the customer experience. You know, I've got a much you know, I can still get that agility. The innovation cycles by public. Bye bye. Wrapping my legacy environment >> and percent you raided, jump in and I'll give you something to react to, Which is which is the single planet glass right now? How do I How did I manage all this stuff now? Not only do I have distributed infrastructure now, I've got distributed applications in the and the thing that you just described and everyone wants to be that single pane of glass. Everybody wants to be the app that's upon everybody. Screen. How are you seeing people deal with the management complexity of these kind of distributed infrastructures? If you will Yeah, >> I think that that's that's an area that's, ah, actually very topical these days because, you know, you're starting to see more and more workers go to private cloud. And so you've got a hybrid infrastructure you're starting to see move movement from just using the EMS to, you know, cantinas and Cuba needs. And, you know, we talked about Serval s and so on. So all of our clients are looking for a way, and you have different types of users as well. Yeah, developers. You have data scientists. You have, you know, operators and so on. So they're all looking for that control plane that allows them access and a view toe everything that is out there that is being used in the enterprise. And that's where I think you know, a company like Accenture were able to use the best of breed toe provide that visibility to our clients, >> right? Yeah. I mean, you hit the nail on the head. It's becoming, you know, with all the promises, cloud and all the power. And these new architectures is becoming much more dynamic, ephemeral, with containers and kubernetes with service computing that that that one application for the hotel, they're actually started in. They've got some, actually, now running a native us of their containers and looking at surveillance. So you're gonna even a single application can span that. And one of things we've seen is is first, you know, a lot of our clients used to look at, you know, application management, you know, different from their their infrastructure. And the lines are now getting very blurry. You need to have very tight alignment. You take that single application, if any my public side goes down or my mid tier with my you know, you know, open shipped on VM, where it goes down on my back and mainframe goes down. Or the networks that connected to go down the devices that talk to it. It's a very well. Despite the power, it's a very complex environment. So what we've been doing is first we've been looking at, you know, how do we get better synergy across what we you know, Application Service's teams that do that Application manager, an optimization cloud infrastructure. How do we get better alignment that are embedded security, You know, how do you know what are managed to security service is bringing those together. And then what we did was we looked at, you know, we got very aggressive with cloud for a strategy and, you know, how do we manage the world of public? But when looking at the public providers of hyper scale, er's and how they hit Incredible degrees of automation. We really looked at, said and said, Hey, look, you gotta operate differently in this new world. What can we learn from how the public guys we're doing that We came up with this concept. We call it running different. You know, how do you operate differently in this new multi speed? You know, you know, hot, very hybrid world across public, private demon, legacy, environment, and start a look and say, OK, what is it that they do? You know, first they standardize, and that's one of the big challenges you know, going to almost all of our clients in this a sprawl. And you know, whether it's application sprawl, its infrastructure, sprawl >> and my business is so unique. The Larry no business out there has the same process that way. So >> we started make you know how to be standardized like center hybrid cloud solution important with hp envy And where we how do we that was an example of so we can get to you because you can't automate unless you standardise. So that was the first thing you know, standardizing our service catalog. Standardizing that, um you know, the next thing is the operating model. They obviously operate differently. So we've been putting a lot of time and energy and what I call a cloud and agile operating model. And also a big part of that is truly you hear a lot about Dev ops right now. But truly putting the security and and operations into Deb said cops are bringing, you know, the development in the operations much tied together. So spending a lot of time looking at that and transforming operations re Skilling the people you know, the operators of the future aren't eyes on glass there. Developers, they're writing the data ingestion, the analytic algorithms, you know, to do predictive operations. They're riding the automation script to take work, you know, test work out right. And over time they'll be tuning the aye aye engines to really optimize environment. And then finally, has Prasad alluded to Is that the platforms that control planes? That doing that? So, you know what we've been doing is we've had a significant investments in the eccentric cloud platform, our infrastructure automation platforms, and then the application teams with it with my wizard framework, and we started to bring that together you know, it's an integrated control plane that can plug into our clients environments to really manage seamlessly, you know, and provide. You know, it's automation. Analytics. Aye, aye. Across APS, cloud infrastructure and even security. Right. And that, you know, that really is a I ops, right? I mean, that's delivering on, you know, as the industry starts toe define and really coalesce around, eh? I ops. That's what we you A ups. >> So just so I'm clear that so it's really your layer your software layer kind of management layer that that integrates all these different systems and provides kind of a unified view. Control? Aye, aye. Reporting et cetera. Right? >> Exactly. Then can plug in and integrate, you know, third party tools to do straight functions. >> I'm just I'm just curious is one of the themes that we here out in the press right now is this is this kind of pull back of public cloud app, something we're coming back. Or maybe it was, you know, kind of a rush. Maybe a little bit too aggressively. What are some of the reasons why people are pulling stuff back out of public clouds that just with the wrong. It was just the wrong application. The costs were not what we anticipated to be. We find it, you know, what are some of the reasons that you see after coming back in house? Yeah, I think it's >> a variety of factors. I mean, it's certainly cost, I think is one. So as there are multiple private options and you know, we don't talk about this, but the hyper skills themselves are coming out with their own different private options like an tars and out pulls an actor stack and on. And Ali Baba has obsessed I and so on. So you see a proliferation of that, then you see many more options around around private cloud. So I think the cost is certainly a factor. The second is I think data gravity is, I think, a very important point because as you're starting to see how different applications have to work together, then that becomes a very important point. The third is just about compliance, and, you know, the regulatory environment. As we look across the globe, even outside the U. S. We look at Europe and other parts of Asia as clients and moving more to the cloud. You know that becomes an important factor. So as you start to balance these things, I think you have to take a very application centric view. You see some of those some some maps moving back, and and I think that's the part of the hybrid world is that you know, you can have a nap running on the private cloud and then tomorrow you can move this. Since it's been containerized to run on public and it's, you know, it's all managed. That left >> E. I mean, cost is a big factor if you actually look at it. Most of our clients, you know, they typically you were a big cap ex businesses, and all of a sudden they're using this consumption, you know, consumption model. And they went, really, they didn't have a function to go and look at be thousands or millions of lines of it, right? You know, as your statement Exactly. I think they misjudged, you know, some of the scale on Do you know e? I mean, that's one of the reasons we started. It's got to be an application led, you know, modernization, that really that will dictate that. And I think In many cases, people didn't. May not have thought Through which application. What data? There The data, gravity data. Gravity's a conversation I'm having just by with every client right now. And if I've got a 64 terabyte Hana and that's the core, my crown jewels that data, you know, how do I get that to tensorflow? How'd I get that? >> Right? But if Andy was here, though, and he would say we'll send down the stove, the snow came from which virgin snow plows? Snowball Snowball. Well, they're snowballs. But I have seen the whole truck killer that comes out and he'd say, Take that and stick it in the cloud. Because if you've got that data in a single source right now, you can apply multitude of applications across that thing. So they, you know, they're pushing. Get that date end in this single source. Of course. Then to move it, change it. You know, you run into all these micro lines of billing statement, take >> the hotel. I mean, their data stolen the mainframe, so if they anyone need to expose it, Yeah, they have a database cash, and they move it out, You know, particulars of data sets get larger, it becomes, you know, the data. Gravity becomes a big issue because no matter how much you know, while Moore's Law might be might have elongated from 18 to 24 months, the network will always be the bottle Mac. So ultimately, we're seeing, you know, a CZ. We proliferate more and more data, all data sets get bigger and better. The network becomes more of a bottleneck. And that's a It's a lot of times you gotta look at your applications. They have. I've got some legacy database I need to get Thio. I need this to be approximately somewhere where I don't have, you know, high bandwith. Oh, all right. Or, you know, highlight and see type. Also, egress costs a pretty big deals. My date is up in the cloud, and I'm gonna get charged for pulling it off. You know, that's being a big issue, >> you know, it's funny, I think, and I think a lot of the the issue, obviously complexity building. It's a totally from building model, but I think to a lot of people will put stuff in a public cloud and then operated as if they bought it and they're running in the data center in this kind of this. Turn it on, Turn it off when you need it. Everyone turns. Everyone loves to talk about the example turning it on when you need it. But nobody ever talks about turning it off when you don't. But it kind of close on our conversation. I won't talk about a I and applied a Iot because he has a lot of talk in the market place. But, hey, I'm machine learning. But as you guys know pride better than anybody, it's the application of a I and specific applications, which really on unlocks the value. And as we're sitting here talking about this complexity, I can't help but think that, you know, applied a I in a management layer like your run differently, set up to actually know when to turn things on, when to turn things off when you moved in but not moved, it's gonna have to be machines running that right cause the data sets and the complexity of these systems is going to be just overwhelming. Yeah, yeah, >> absolutely. Completely agree with you. In fact, attack sensual. We actually refer to this whole area as applied intelligence on That's our guy, right? And it is absolutely to add more and more automation move everything Maur toe where it's being run by the machine rather than you know, having people really working on these things >> yet, e I mean, if you think you hit the nail on the head, we're gonna a eyes e. I mean, given how things getting complex, more ephemeral, you think about kubernetes et cetera. We're gonna have to leverage a humans or not to be able to get, you know, manage this. The environments comported right. What's interesting way we've used quite effectively for quite some time. But it's good at some stuff, not good at others. So we find it's very good at, like, ticket triage, like ticket triage, chicken rounding et cetera. You know, any time we take over account, we tune our AI ai engines. We have ticket advisers, etcetera. That's what probably got the most, you know, most bang for the buck. We tried in the network space, less success to start even with, you know, commercial products that were out there. I think where a I ultimately bails us out of this is if you look at the problem. You know, a lot of times we talked about optimizing around cost, but then performance. I mean, and it's they they're somewhat, you know, you gotta weigh him off each other. So you've got a very multi dimensional problem on howto I optimize my workloads, particularly. I gotta kubernetes cluster and something on Amazon, you know, sums running on my private cloud, etcetera. So we're gonna get some very complex environment. And the only way you're gonna be ableto optimize across multi dimensions that cost performance service levels, you know, And then multiple options don't do it public private, You know, what's my network costs etcetera. Isn't a I engine tuning that ai ai engines? So ultimately, I mean, you heard me earlier on the operators. I think you know, they write the analytic albums, they do the automation scripts, but they're the ultimate one too. Then tune the aye aye engines that will manage our environment. And I think it kubernetes will be interesting because it becomes a link to the control plane optimize workload placement. You know, between >> when the best thing to you, then you have dynamic optimization. Could you might be optimizing eggs at us right now. But you might be optimizing for output the next day. So exists really a you know, kind of Ah, never ending when you got me. They got to see them >> together with you and multi dimension. Optimization is very difficult. So I mean, you know, humans can't get their head around. Machines can, but they need to be trained. >> Well, Prasad, Larry, Lots of great opportunities for for centuries bring that expertise to the tables. So thanks for taking a few minutes to walk through some of these things. Our pleasure. Thank you, Grace. Besides Larry, I'm Jeff. You're watching the Cube. We are high above San Francisco in the Salesforce Tower, Theis Center, Innovation hub in San Francisco. Thanks for watching. We'll see you next time.

>> Hey, welcome back. Your body, Jefe Rick here from the Cube were high atop San Francisco in the century innovation hub. It's in the middle of the Salesforce Tower. It's a beautiful facility. They think you had it. The grand opening about six months ago. We're here for the grand opening. Very cool space. I got maker studios. They've got all kinds of crazy stuff going on. But we're here today to talk about Cloud in this continuing evolution about cloud in the enterprise and hybrid cloud and multi cloud in Public Cloud and Private Cloud. And we're really excited to have a couple of guys who really helping customers make this journey, cause it's really tough to do by yourself. CEOs are super busy. There were about security and all kinds of other things, so centers, often a trusted partner. We got two of the leaders from center joining us today's Prasad Sankaran. He's the senior managing director of Intelligent Cloud infrastructure for Center Welcome and Larry Soccer, the global managing director. Intelligent cloud infrastructure offering from central gentlemen. Welcome. I love it. It intelligent cloud. What is an intelligent cloud all about? Got it in your title. It must mean something pretty significant. >> Yeah, I think First of all, thank you for having us, but yeah, absolutely. Everything's around becoming more intelligent around using more automation. And the work that, you know we delivered to our clients and cloud, as you know, is the platform to reach. All of our clients are moving. So it's all about bringing the intelligence not only into infrastructure, but also into cloud generally. And it's all driven by software, >> right? It's just funny to think where we are in this journey. We talked a little bit before we turn the cameras on and there you made an interesting comment when I said, You know, when did this cloud for the Enterprise start? And you took it back to sass based applications, which, >> you know you were sitting in the sales force builder. >> That's true. It isn't just the tallest building in >> everyone's, you know, everyone's got a lot of focus on AWS is rise, etcetera. But the real start was really getting into sass. I mean, I remember we used to do a lot of Siebel deployments for CR M, and we started to pivot to sales, for some were moving from remedy into service now. I mean, we've went through on premise collaboration, email thio 3 65 So So we've actually been at it for quite a while in the particularly the SAS world. And it's only more recently that we started to see that kind of push to the, you know, the public pass, and it's starting to cloud native development. But But this journey started, you know, it was that 78 years ago that we really started. See some scale around it. >> And I think and tell me if you agree, I think really, what? The sales forces of the world and and the service now is of the world office 3 65 kind of broke down some of those initial beers, which are all really about security and security, security, security, Always to hear where now security is actually probably an attributes and loud can brink. >> Absolutely. In fact, I mean, those barriers took years to bring down. I still saw clients where they were forcing salesforce tor service Now to put, you know, instances on prime and I think I think they finally woke up toe. You know, these guys invested ton in their security organizations. You know there's a little of that needle in the haystack. You know, if you breach a data set, you know what you're getting after. But when Europe into sales force, it's a lot harder. And so you know. So I think that security problems have certainly gone away. We still have some compliance, regulatory things, data sovereignty. But I think security and not not that it sold by any means that you know, it's always giving an ongoing problem. But I think they're getting more comfortable with their data being up in the in the public domain, right? Not public. >> And I think it also helped them with their progress towards getting cloud native. So, you know, you pick certain applications which were obviously hosted by sales force and other companies, and you did some level of custom development around it. And now I think that's paved the way for more complex applications and different workloads now going into, you know, the public cloud and the private cloud. But that's the next part of the journey, >> right? So let's back up 1/2 a step, because then, as you said, a bunch of stuff then went into public cloud, right? Everyone's putting in AWS and Google. Um, IBM has got a public how there was a lot more. They're not quite so many as there used to be, Um, but then we ran into a whole new host of issues, right, which is kind of opened up this hybrid cloud. This multi cloud world, which is you just can't put everything into a public clouds. There's certain attributes is that you need to think about and yet from the application point of view before you decide where you deploy that. So I'm just curious. If you can share now, would you guys do with clients? How should they think about applications? How should they think about what to deploy where I >> think I'll start in? The military has a lot of expertise in this area. I think you know, we have to obviously start from an application centric perspective. You go to take a look at you know where your applications have to live water. What are some of the data implications on the applications, or do you have by way of regulatory and compliance issues, or do you have to do as faras performance because certain applications have to be in a high performance environment. Certain other applications don't think a lot of these factors will. Then Dr where these applications need to recite and then what we think in today's world is really accomplish. Complex, um, situation where you have a lot of legacy. But you also have private as well as public cloud. So you approach it from an application perspective. >> Yeah. I mean, if you really take a look at Army, you look at it centers clients, and we were totally focused on up into the market Global 2000 savory. You know how clients typically have application portfolios ranging from 520,000 applications? And really, I mean, if you think about the purpose of cloud or even infrastructure for that, they're there to serve the applications. No one cares if your cloud infrastructure is not performing the absolute. So we start off with an application monetization approach and ultimately looking, you know, you know, with our tech advisory guys coming in, there are intelligent engineering service is to do the cloud native and at mod work our platforms, guys, who do you know everything from sales forward through ASAP. They should drive a strategy on how those applications gonna evolve with its 520,000 and determined hey, and usually using some, like the six orders methodology. And I'm I am I going to retire this Am I going to retain it? And, you know, I'm gonna replace it with sass. Am I gonna re factor in format? And it's ultimately that strategy that's really gonna dictate a multi and, you know, every cloud story. So it's based on the applications data, gravity issues where they gonna reside on their requirements around regulatory, the requirements for performance, etcetera. That will then dictate the cloud strategies. I'm you know, not a big fan of going in there and just doing a multi hybrid cloud strategy without a really good up front application portfolio approach, right? How we gonna modernize that >> it had. And how do you segment? That's a lot of applications. And you know, how do you know the old thing? How do you know that one by that time, how do you help them pray or size where they should be focusing on us? >> So typically what we do is work with our clients to do a full application portfolio analysis, and then we're able to then segment the applications based on, you know, important to the business and some of the factors that both of us mentioned. And once we have that, then we come up with an approach where certain sets of applications he moved to sass certain other applications you move to pass. So you know, you're basically doing the re factoring and the modernization and then certain others you know, you can just, you know, lift and shift. So it's really a combination off both modernization as well as migration. It's a combination off that, but to do that, you have to initially look at the entire set of applications and come up with that approach. >> I'm just curious where within that application assessment, um, where is cost savings? Where is, uh, this is just old. And where is opportunities to innovate faster? Because we know a lot of lot of talk really. Days has cost savings, but what the real advantages is execution speed if you can get it. If >> you could go back through four years and we had there was a lot of CEO discussions around cost savings, I'm not really have seen our clients shift. It costs never goes away, obviously right. But there's a lot greater emphasis now on business agility. You know, howto innovate faster, get getting your capabilities to market faster, to change my customer experience. So So it's really I t is really trying to step up and, you know, enabled the business toe to compete in the marketplace. We're seeing a huge shift in emphasis or focus at least starting with, you know, how'd I get better business agility outta leverage to cloud and cloud native development to get their upper service levels? Actually, we started seeing increase on Hey, you know, these applications need to work. It's actress. So So Obviously, cost still remains a factor, but we seem much more for, you know, much more emphasis on agility, you know, enabling the business on, given the right service levels of right experience to the user, little customers. Big pivot there, >> Okay. And let's get the definitions out because you know a lot of lot of conversation about public clouds, easy private clouds, easy but hybrid cloud and multi cloud and confusion about what those are. How do you guys define him? How do you help your customers think about the definition? Yes, >> I think it's a really good point. So what we're starting to see is there were a lot of different definitions out there. But I think as I talked more clients and our partners, I think we're all starting to, you know, come to ah, you know, the same kind of definition on multi cloud. It's really about using more than one cloud. But hybrid, I think, is a very important concept because hybrid is really all about the placement off the workload or where your application is going to run on. And then again, it goes to all of these points that we talked about data, gravity and performance and other things. Other factors. But it's really all about where do you place the specific look >> if you look at that, so if you think about public, I mean obviously gives us the innovation of the public providers. You look at how fast Amazon comes out with new versions of Lambda etcetera. So that's the innovations there obviously agility. You could spend up environments very quickly, which is, you know, one of the big benefits of it. The consumption, economic models. So that is the number of drivers that are pushing in the direction of public. You know, on the private side, they're still it's quite a few benefits that don't get talked about as much. Um, so you know, if you look at it, um, performance if you think the public world, you know, Although they're scaling up larger T shirts, et cetera, they're still trying to do that for a large array of applications on the private side, you can really Taylor somethingto very high performance characteristics. Whether it's you know, 30 to 64 terabyte Hana, you can get a much more focused precision environment for business. Critical workloads like that article, article rack, the Duke clusters, everything about fraud analysis. So that's a big part of it. Related to that is the data gravity that Prasad just mentioned. You know, if I've got a 64 terabyte Hana database you know, sitting in my private cloud, it may not be that convenient to go and put get that data shared up in red shift or in Google's tensorflow. So So there's some data gravity out. Networks just aren't there. The laden sea of moving that stuff around is a big issue. And then a lot of people of investments in their data centers. I mean, the other piece, that's interesting. His legacy, you know, you know, as we start to look at the world a lot, there's a ton of code still living in, You know, whether it's you, nick system, just IBM mainframes. There's a lot of business value there, and sometimes the business cases aren't aren't necessarily there toe to replace them. Right? And in world of digital, the decoupling where I can start to use micro service is we're seeing a lot of trends. We worked with one hotel to take their reservation system. You know, Rapid and Micro Service is, um, we then didn't you know, open shift couch base, front end. And now, when you go against, you know, when you go and browsing properties, you're looking at rates you actually going into distributed database cash on, you know, in using the latest cloud native technologies that could be dropped every two weeks or everything three or four days for my mobile application. And it's only when it goes, you know, when the transaction goes back, to reserve the room that it goes back there. So we're seeing a lot of power with digital decoupling, But we still need to take advantage of, you know, we've got these legacy applications. So So the data centers air really were trying to evolve them. And really, just, you know, how do we learn everything from the world of public and struck to bring those saints similar type efficiencies to the to the world of private? And really, what we're seeing is this emerging approach where I can start to take advantage of the innovation cycles. The land is that, you know, the red shifts the functions of the public world, but then maybe keep some of my more business critical regulated workloads. You know, that's the other side of the private side, right? I've got G X p compliance. If I've got hip, a data that I need to worry about GDP are there, you know, the whole set of regular two requirements. Now, over time, we do anticipate the public guys will get much better and more compliant. In fact, they made great headway already, but they're still not a number of clients are still, you know, not 100% comfortable from my client's perspective. >> Gotta meet Teresa Carlson. She'll change him, runs that AWS public sector is doing amazing things, obviously with big government contracts. But but you raise real inching point later. You almost described what I would say is really a hybrid application in this in this hotel example that you use because it's is, you know, kind of breaking the application and leveraging micro service is to do things around the core that allowed to take advantage of some this agility and hyper fast development, yet still maintain that core stuff that either doesn't need to move. Works fine, be too expensive. Drea Factor. It's a real different weight. Even think about workloads and applications into breaking those things into bits. >> And we see that pattern all over the place. I'm gonna give you the hotel Example Where? But finance, you know, look at financial service. Is retail banking so open banking a lot. All those rito applications are on the mainframe. I'm insurance claims and and you look at it the business value of replicating a lot of like the regulatory stuff, the locality stuff. It doesn't make sense to write it. There's no rule inherent business values of I can wrap it, expose it and in a micro service's architecture now D'oh cloud native front end. That's gonna give me a 360 view a customer, Change the customer experience. You know, I've got a much you know, I can still get that agility. The innovation cycles by public. Bye bye. Wrapping my legacy environment >> and percent you raided, jump in and I'll give you something to react to, Which is which is the single planet glass right now? How do I How did I manage all this stuff now? Not only do I have distributed infrastructure now, I've got distributed applications in the and the thing that you just described and everyone wants to be that single pane of glass. Everybody wants to be the app that's upon everybody. Screen. How are you seeing people deal with the management complexity of these kind of distributed infrastructures? If you >> will Yeah, I think that that's that's an area that's, ah, actually very topical these days because, you know, you're starting to see more and more workers go to private cloud. And so you've got a hybrid infrastructure you're starting to see move movement from just using the EMS to, you know, cantinas and Cuba needs. And, you know, we talked about Serval s and so on. So all of our clients are looking for a way, and you have different types of users as well. Yeah, developers. You have data scientists. You have, you know, operators and so on. So they're all looking for that control plane that allows them access and a view toe everything that is out there that is being used in the enterprise. And that's where I think you know, a company like Accenture were able to use the best of breed toe provide that visibility to our clients, >> right? Yeah. I mean, you hit the nail on the head. It's becoming, you know, with all the promises, cloud and all the power. And these new architectures is becoming much more dynamic, ephemeral, with containers and kubernetes with service computing that that that one application for the hotel, they're actually started in. They've got some, actually, now running a native us of their containers and looking at surveillance. So you're gonna even a single application can span that. And one of things we've seen is is first, you know, a lot of our clients used to look at, you know, application management, you know, different from their their infrastructure. And the lines are now getting very blurry. You need to have very tight alignment. You take that single application, if any my public side goes down or my mid tier with my you know, you know, open shipped on VM, where it goes down on my back and mainframe goes down. Or the networks that connected to go down the devices that talk to it. It's a very well. Despite the power, it's a very complex environment. So what we've been doing is first we've been looking at, you know, how do we get better synergy across what we you know, Application Service's teams that do that Application manager, an optimization cloud infrastructure. How do we get better alignment that are embedded security, You know, how do you know what are managed to security service is bringing those together. And then what we did was we looked at, you know, we got very aggressive with cloud for a strategy and, you know, how do we manage the world of public? But when looking at the public providers of hyper scale, er's and how they hit Incredible degrees of automation. We really looked at, said and said, Hey, look, you gotta operate differently in this new world. What can we learn from how the public guys we're doing that We came up with this concept. We call it running different. You know, how do you operate differently in this new multi speed? You know, you know, hot, very hybrid world across public, private demon, legacy, environment, and start a look and say, OK, what is it that they do? You know, first they standardize, and that's one of the big challenges you know, going to almost all of our clients in this a sprawl. And you know, whether it's application sprawl, its infrastructure, sprawl >> and my business is so unique. The Larry no business out there has the same process that way. So >> we started make you know how to be standardized like center hybrid cloud solution important with hp envy And where we how do we that was an example of so we can get to you because you can't automate unless you standardise. So that was the first thing you know, standardizing our service catalog. Standardizing that, um you know, the next thing is the operating model. They obviously operate differently. So we've been putting a lot of time and energy and what I call a cloud and agile operating model. And also a big part of that is truly you hear a lot about Dev ops right now. But truly putting the security and and operations into Deb said cops are bringing, you know, the development in the operations much tied together. So spending a lot of time looking at that and transforming operations re Skilling the people you know, the operators of the future aren't eyes on glass there. Developers, they're writing the data ingestion, the analytic algorithms, you know, to do predictive operations. They're riding the automation script to take work, you know, test work out right. And over time they'll be tuning the aye aye engines to really optimize environment. And then finally, has Prasad alluded to Is that the platforms that control planes? That doing that? So, you know what we've been doing is we've had a significant investments in the eccentric cloud platform, our infrastructure automation platforms, and then the application teams with it with my wizard framework, and we started to bring that together you know, it's an integrated control plane that can plug into our clients environments to really manage seamlessly, you know, and provide. You know, it's automation. Analytics. Aye, aye. Across APS, cloud infrastructure and even security. Right. And that, you know, that really is a I ops, right? I mean, that's delivering on, you know, as the industry starts toe define and really coalesce around, eh? I ops. That's what we you A ups. >> So just so I'm clear that so it's really your layer your software layer kind of management layer that that integrates all these different systems and provides kind of a unified view. Control? Aye, aye. Reporting et cetera. Right? >> Exactly. Then can plug in and integrate, you know, third party tools to do straight functions. >> I'm just I'm just curious is one of the themes that we here out in the press right now is this is this kind of pull back of public cloud app, something we're coming back. Or maybe it was, you know, kind of a rush. Maybe a little bit too aggressively. What are some of the reasons why people are pulling stuff back out of public clouds that just with the wrong. It was just the wrong application. The costs were not what we anticipated to be. We find it, you know, what are some of the reasons that you see after coming back in house? Yeah, I think it's >> a variety of factors. I mean, it's certainly cost, I think is one. So as there are multiple private options and you know, we don't talk about this, but the hyper skills themselves are coming out with their own different private options like an tars and out pulls an actor stack and on. And Ali Baba has obsessed I and so on. So you see a proliferation of that, then you see many more options around around private cloud. So I think the cost is certainly a factor. The second is I think data gravity is, I think, a very important point because as you're starting to see how different applications have to work together, then that becomes a very important point. The third is just about compliance, and, you know, the regulatory environment. As we look across the globe, even outside the U. S. We look at Europe and other parts of Asia as clients and moving more to the cloud. You know that becomes an important factor. So as you start to balance these things, I think you have to take a very application centric view. You see some of those some some maps moving back, and and I think that's the part of the hybrid world is that you know, you can have a nap running on the private cloud and then tomorrow you can move this. Since it's been containerized to run on public and it's, you know, it's all managed. That >> left E. I mean, cost is a big factor if you actually look at it. Most of our clients, you know, they typically you were a big cap ex businesses, and all of a sudden they're using this consumption, you know, consumption model. And they went, really, they didn't have a function to go and look at be thousands or millions of lines of it, right? You know, as your statement Exactly. I think they misjudged, you know, some of the scale on Do you know e? I mean, that's one of the reasons we started. It's got to be an application led, you know, modernization, that really that will dictate that. And I think In many cases, people didn't. May not have thought Through which application. What data? There The data, gravity data. Gravity's a conversation I'm having just by with every client right now. And if I've got a 64 terabyte Hana and that's the core, my crown jewels that data, you know, how do I get that to tensorflow? How'd I get that? >> Right? But if Andy was here, though, and he would say we'll send down the stove, the snow came from which virgin snow plows? Snowball Snowball. Well, they're snowballs. But I have seen the whole truck killer that comes out and he'd say, Take that and stick it in the cloud. Because if you've got that data in a single source right now, you can apply multitude of applications across that thing. So they, you know, they're pushing. Get that date end in this single source. Of course. Then to move it, change it. You know, you run into all these micro lines of billing statement, take >> the hotel. I mean, their data stolen the mainframe, so if they anyone need to expose it, Yeah, they have a database cash, and they move it out, You know, particulars of data sets get larger, it becomes, you know, the data. Gravity becomes a big issue because no matter how much you know, while Moore's Law might be might have elongated from 18 to 24 months, the network will always be the bottle Mac. So ultimately, we're seeing, you know, a CZ. We proliferate more and more data, all data sets get bigger and better. The network becomes more of a bottleneck. And that's a It's a lot of times you gotta look at your applications. They have. I've got some legacy database I need to get Thio. I need this to be approximately somewhere where I don't have, you know, high bandwith. Oh, all right. Or, you know, highlight and see type. Also, egress costs a pretty big deals. My date is up in the cloud, and I'm gonna get charged for pulling it off. You know, that's being a big issue, >> you know, it's funny, I think, and I think a lot of the the issue, obviously complexity building. It's a totally from building model, but I think to a lot of people will put stuff in a public cloud and then operated as if they bought it and they're running in the data center in this kind of this. Turn it on, Turn it off when you need it. Everyone turns. Everyone loves to talk about the example turning it on when you need it. But nobody ever talks about turning it off when you don't. But it kind of close on our conversation. I won't talk about a I and applied a Iot because he has a lot of talk in the market place. But, hey, I'm machine learning. But as you guys know pride better than anybody, it's the application of a I and specific applications, which really on unlocks the value. And as we're sitting here talking about this complexity, I can't help but think that, you know, applied a I in a management layer like your run differently, set up to actually know when to turn things on, when to turn things off when you moved in but not moved, it's gonna have to be machines running that right cause the data sets and the complexity of these systems is going to be just overwhelming. >> Yeah, yeah, absolutely. Completely agree with you. In fact, attack sensual. We actually refer to this whole area as applied intelligence on That's our guy, right? And it is absolutely to add more and more automation move everything Maur toe where it's being run by the machine rather than you know, having people really working on these things >> yet, e I mean, if you think you hit the nail on the head, we're gonna a eyes e. I mean, given how things getting complex, more ephemeral, you think about kubernetes et cetera. We're gonna have to leverage a humans or not to be able to get, you know, manage this. The environments comported right. What's interesting way we've used quite effectively for quite some time. But it's good at some stuff, not good at others. So we find it's very good at, like, ticket triage, like ticket triage, chicken rounding et cetera. You know, any time we take over account, we tune our AI ai engines. We have ticket advisers, etcetera. That's what probably got the most, you know, most bang for the buck. We tried in the network space, less success to start even with, you know, commercial products that were out there. I think where a I ultimately bails us out of this is if you look at the problem. You know, a lot of times we talked about optimizing around cost, but then performance. I mean, and it's they they're somewhat, you know, you gotta weigh him off each other. So you've got a very multi dimensional problem on howto I optimize my workloads, particularly. I gotta kubernetes cluster and something on Amazon, you know, sums running on my private cloud, etcetera. So we're gonna get some very complex environment. And the only way you're gonna be ableto optimize across multi dimensions that cost performance service levels, you know, And then multiple options don't do it public private, You know, what's my network costs etcetera. Isn't a I engine tuning that ai ai engines? So ultimately, I mean, you heard me earlier on the operators. I think you know, they write the analytic albums, they do the automation scripts, but they're the ultimate one too. Then tune the aye aye engines that will manage our environment. And I think it kubernetes will be interesting because it becomes a link to the control plane optimize workload placement. You know, between >> when the best thing to you, then you have dynamic optimization. Could you might be optimizing eggs at us right now. But you might be optimizing for output the next day. So exists really a you know, kind of Ah, never ending when you got me. They got to see them >> together with you and multi dimension. Optimization is very difficult. So I mean, you know, humans can't get their head around. Machines can, but they need to be trained. >> Well, Prasad, Larry, Lots of great opportunities for for centuries bring that expertise to the tables. So thanks for taking a few minutes to walk through some of these things. Our pleasure. Thank you, Grace. Besides Larry, I'm Jeff. You're watching the Cube. We are high above San Francisco in the Salesforce Tower, Theis Center, Innovation hub in San Francisco. Thanks for watching. We'll see you next time.

(upbeat music) >> Commentator: From our studios in the heart of Silicon Valley, Palo Alto, California, this is a Cube conversation. >> Welcome to this special Cube conversation here in Palo Alto, California. I'm John Furrier, host of the Cube. We're here with Fletcher Previn, who's the CIO of IBM, part of a series we're calling a new brand of tech leaders, where we profile leaders in technology and business, where there's innovation and a changing of the guard of approaches and results. Fletcher, thanks for joining me today. >> Thanks for having me. >> So we were talking before you came on camera, you have an interesting background. You kind of went to an arts school, got into entertainment as an intern, Conan O'Brien... >> David Letterman. >> David Letterman. You were fast track to be a comedian and get into the business of entertainment, (laughter) and you ended up as the CIO. How does that happen? Tell us the story. >> The comedy's better in tech. (laughter) >> These days, certainly, watching the Senate hearings, it's phenomenal. >> Well, yeah. As you said, I thought I very well might go into entertainment, that's kind of more of the family business. And I spent a lot of time on movie sets and worked as a production assistant on a couple movies, and then was an intern at the David Letterman Show and Conon during college. But I did always have this strong other thread of really loving technology and being drawn into it. First family computer was a Commodore 64, but my first real computer for me was the original Mac 128K. And I knew something was awry when I was working at the Letterman Show, I was kind of more interested in the phone system than who the guest that night was. And so, when I graduated, I just accepted it. Why keep fighting this? I'm going to go out to the West coast and start my career in tech. >> That's interesting, you know you always gravitate towards what your affinity is, and I think a lot of people look at today's work environment as an environment where there's so many shifts and new kind of waves. To me, we've always said on theCube, you know, this wave that we're living on, tech wave, is kind of a combination of main frame, mini computers, localary networks and PCs all kind of rolled up in one. Because there's so many different touchpoints that's changing things. You know, you don't need to be a coder to be successful in cyber security, you can be a policy person. Lot of societal changes with self-driving cars, which side of the street do they drive on? All these new things are happening. And so it's really putting the pressure on digital, and the notion of data, IT has become a central part of it. You're the CIO at IBM, how do you look at that world? Because now, being a technologist, we'll get to the idea of it in a minute, but as a technologist, as someone who's the Chief Information Officer, when you look at the world today, you look at the wave we're on, what does that wave of technology mean to you? >> Yeah, well I think as you said, there is no part of our modern life that is not touched, and hopefully augmented in some way, by technology. And so, you know, that's the answer to the question why am I at IBM. Because the kinds of businesses that IBM is involved in, the kinds of enabling technology that it provides, really underlies a lot of the critical infrastructure and systems for our modern way of life. And so, being able to be at a company that has a narrative position in what our collective future looks like is what drives me. >> Yeah, a lot of the application developers, you guys have a huge portfolio of applications. You got cloud computer, you got on-premise, you got IOT, a lot of things, AI changing. You're changing the nature of application development, but also the role of data. At IBM as the CIO, what is your strategy in looking at all these changes? And how do you implement it with IBM? What is specifically your strategy? >> Well, certainly our strategy is there will be no part of the IT portfolio that is not augmented with IBM technology, and in particular AI. And an AI strategy is a data strategy, for us to be able to really collect, organize, harness the power of that data and then leverage it in innovative ways to be a more effective and efficient business. More broadly though, in terms of what is my strategy to deliver IT services to a huge company of IT professionals, it's to lead with design. And there's a lot underneath that, but one of the first changes that I made when I became CIO of IBM was adding, as a direct report to myself, a person responsible for design and user experience. And IBM's got a huge focus on design thinking and leading with the user experience, but for us to be successful, we got to create an environment where successful, excuse me, where talented people want to work. And that requires us to have empathy, and engineer from the user in instead of IT out. >> And making service is a big part, because we've got consumption, people consuming IT. >> Yeah, exactly. The barrier to entry for people to make decisions about what they use or don't use is very different. I think people coming to the business 10 years ago, very different set of expectations, even 5 or 3 years ago. And so, it's got to be carrot, it can't be stick. People just won't do something because you tell them to do it, they have to perceive that this is making their work life better in some way. >> Culture's a huge thing, I want to get your thoughts on engineering for excellence, this is something that you believe in. What's your view on that? What does that mean? What does engineering for excellence mean for you as CIO? >> Yeah, well we spend a lot of time thinking of IT as the driver of culture change. And when people say we're a culture that values engineering excellence, what does that really mean? And it means that we recognize and reward people who are really passionate about what they do for a living, deep subject matter experts in their field. You know, I sometimes get asked, what are you looking for when you're hiring people? And I'm looking to hire people who are kind, passionate about what they do for a living, and believe in our purpose as a company. And if we surround ourselves with those kind of people, we will be successful in whatever kind of problem we happen to be trying to solve at that moment. >> What are some of the guiding principles in an organization that's engineered for excellence? What are some of the guiding principles that you hire and push forth through your organization? >> Yeah, well as I said, we are trying to attract and retain, and ultimately reward the people who are deeply passionate about what they do and believe in our collective purpose. And so I think the era of the generalist is probably a bygone era. I'm looking to attract people that are doing in their spare time and in their hobbies and at home the same thing that we're paying them to do at work, because they love it and they feel fulfilled by it. >> And the roles are changing too. Talk about the skill gap, this is a big talk track we hear at every event we go to and exec we talk to. The new brand of tech leaders have to address the skill gap because there's more job openings in jobs that don't have a degree requirement. Meaning, the job doesn't have a certificate or a diploma because it's new. Whether it's cyber security, or data science, new kinds of roles and the skill gaps there. Talk about that, that challenge, that opportunity. >> Yeah, well these new and emerging fields, AI, blockchain, cloud, or otherwise, you're right. A lot of those are new, and there are not well established four-year degrees around those kinds of professions. And so, IBM is very heavily involved in what we call the P Tech, or the Pathway to Technology Program, where people can have a successful career in technology without having a traditional four-year college degree. But more broadly, yeah, there is a gap. A gap between the demand and the supply for people in these fields, and so the best protection all of us have against obsolescence is continuous upscaling and education. And that happens organically if you're passionate about what you do, because you're eating, breathing and sleeping the area that you work in. >> Yeah, and sometimes learning on the job too is key, and getting content on the internet, people can self-learn and apply that. Talk about how your organization's structured for learning. How do you retain the best talent? What are some of the strategies you deploy to keep people motivated, keep them informed, and keep them engaged with a good assignment? >> Yeah, well that is a challenge in any large organization, and IBM is 350,000 plus people in 170 countries. And so the era of us being able to get everybody together in a town hall meeting is long gone. And so, how we communicate and get everybody on the same page around mission alignment, what is our strategy, and what skills do you need, and how do you stay informed and educated. That's an ongoing challenge. I think, ultimately, we try to attract people with our purpose as a company. It's an employer of purpose, the kinds of work IBM's involved in attracts people that are mission driven. And then, there is a tremendous focus on providing distance based self-paced learning, online learning, in person learning, badgen programs, the P Tech Program that I mentioned. And to make sure that a person who is motivated and wants to grow their skills, that they have all the vehicles to do that. But I think the other thing I spend a lot of time focused on is, does everybody in this organization have a good understanding of what our purpose as a company is, and how what they do contributes to that purpose, and can they map back really clearly I'm not just a widget in a machine doing something and I have no idea what the impact of it is. I see that what I'm doing contributes to our collective success. >> People want to work for a mission driven company, that's a new data point we've been seeing. >> Fletcher: Yes. >> Talk about the outcome of focus. You know, you hear digital transformation being kicked around, I think it's happening now more than ever, obviously been hyped up. But now you're starting to see companies really digging in. You guys are going through a digital transformation over many years. You supply technology for companies that are transforming digitally. The notion of business outcomes becomes a big part of that. How have you evolved your organization, from an outcome standpoint, that's new and different from the old ways? Can you give an example and talk about that? Old way of doing things and the new way of doing things. How do you talk about technology for business outcomes in a new way? >> Well, ultimately it's a business problem that you're solving. And so there has to be a business driver behind any project that we engage in. And having good discipline around... organizations tend to die of indigestion, not starvation, and getting really disciplined about what we say no to, in some cases is more important than what we agree to do. And it's much harder to stop work than it is to start work in a large organization. And so we've really leveraged Agile as a new way of working to say, "We have a well-defined methodology for "one funnel of work, that gets prioritized "in partnership with the business in a transparent way." where we say, "You submit this many units of demand, "we have this much unit of supply, let's go through "the story definitions, backlog grooming, "future presentations, retrospectives, the mechanics "of working in an Agile way, to be really disciplined "about everyone's on the same page about what "we are going to do and what we're not going to do." >> Yeah, that's a great point. We hear this all the time. Certainly, it's looking valid here, where I'm located. The notion of Agile, fail fast, the lean startup. You know, I never bought into the fail fast thing. No one wants to fail, but in the spirit of learning Agile, failure is a part of the process. So getting to yes is what people want to get to, but you can't say yes to everything. IT has failed in that area. You can't say yes to everything. So you got to say no. >> Yep. >> You got to also get to what you don't want to do. So knowing what is not the right way to go is where Agile kicks in. So Agile, you want to get to a fail point and know what not to do, at the same time you got to say no to all the requests that you possibly could do. >> Yes. >> Is kind of the formula. Talk about that dynamic. Because this is where Agile translates or DevOps translates into business. It's the same kind of concept applied to organizations, process, and people. >> Yeah, so I think in terms of how do we have good discipline around what we do and don't do. It's very important that people understand what their role in the company is and what their lane is and what their mission is. And if we say no to something, it's not an indictment that that piece of work is not valuable. It just may not be something that is aligned to our mission or something that we're supposed to do. And I think those things can get blurry if you don't have really well defined Agile frameworks and ways of working and everybody on the same page. And so all kinds of things can sound like a good idea potentially, but if it's ultimately not really what we're supposed to be doing, that's what creates friction, right? >> I'd love to get your thoughts just as a person in tech who's got a lot of responsibility in IBM. But you talk about IBM, from an IBM capacity or as a person, but we have a lot of conversations here in the Cube, from Netflix to IBM, to practitioners in the field around the role of data. [Fletcher] Mhmm. Everyone wants to be data driven, so there's no debate there. Data driven is a good approach to take on things. >> Fletcher: Yes. >> But how you look at data depends on what you're lookin' at. You can correlate data and you've got causation. So a lot of conversation's been around don't get too caught up in the data for data's sake. Because if you look at just correlation, you might not know what's causing something. So most data scientists love correlation because it's numbers, they're there, you can look at all those correlations, but not understand the cause of something. Can you talk about how you view this? Because this has become an important part of decision making with data. >> Yeah, for sure. And AI very closely related to having a good data and data governance and taxonomy strategy. To really be able to harness the insights from all that data, you got to have a good data governance strategy behind it. But behind every piece of data is a business process. And so ultimately, being able to really map back and understand which business processes are generating this data is sort of the methodology for trying to put your arms around all the massive amounts of data that are being collected. And I think our old strategy was, we'll have a data lake and we'll just dump everything into it. The advent of AI sort of requires a different data strategy and says we need to have a good governance process around this and have a data platform, not a data lake. That we can then build automation against, run AI against it, and be a business that makes better, more informed decisions based on that data, and then help our customers do the same thing. >> And this has certainly come up a lot in AI around bias and contextual relevance, I think it's a big part of what's behind the data. >> Yeah, right. And you need to have explainability and transparency into the recommendations that AI is making. You know, if it's a black box, that's an issue. If AI came back and told you, "I think you should make "your product more expensive." Your first question would be why? And if you can't answer that... And so, AI's autonomous driving is a good example of that. Where you put a human being in the seat and he or she drives the car, and the system compares the inputs that they would make versus what the human is doing, and can explain why they had variances. But if it's just a complete mystery, that's not going to work. >> Yeah, the contextual why is a great question. I want to get your thoughts on security. [Fletcher] Mhmm. But you had made a comment earlier around the general purpose, IT person is kind of a thing of the past. Meaning that specialism and or variety and diversity of skills are always going to be out there. >> Fletcher: Yeah. >> With security, no one company has the same security makeup. Because their posture and or their organization structures are different because their organization mission is different. No one company is the same. >> Right. >> It's kind of like we as individuals, our DNA, everyone's different. So that means that security's not always the same in every company. As the CIO of IBM, you guys are a large multi-national, you're obviously huge. >> Other companies might have different approaches. How do you see security playing out? Because in some cases, CIOs manage security, in some cases the CSO is bolted out separately. >> Fletcher: Right. >> Either way, we know security's a board issue, as is IT. What's your view on security and the role of security within an organization. >> Security's a huge focus for us, it consumes a large amount of my time. And as much as we worry about our data, we really worry about customer data. And the kinds of threats that we're seeing are evolving rapidly, and as an industry statement I would say the advantage continues to go to bad guys, not good guys. Red is easier than blue. And so this really becomes an exercise in do we understand our networks and the systems that underlie those networks better than the people who are trying to break into it? And in particular, some of the more Apex predator, advanced nation state activities. In terms of the organizational construct of CSO, and where it fits in the company, we've had different models. Where we're at today is that the CSO is a peer of mine, and we work very closely together. And the CSO really, for the most part, defines risk and understands what is the attack surface and threat profile of any particular area. And then anything operational falls to the IT department. And so, in our environment, you know IBM's 350,000 plus employees, the IT department that I lead is about 12,000 people. And so, we have to work very closely together on very different threat profiles of general back office workers, people building commercial software, researchers building quantum computers, people doing outsourced IT. All of them have very different security profiles, and we have to be able to meet those requirements for each of those segments. >> We could do a whole hour just on security, one of my favorite topics. But you guys do have large surface area. >> Fletcher: Yes. >> You got a large employee base, diverse virtual workforce and offices. >> Mhmm. >> You got applications. I mean this is a really complicated security framework you guys have. Well, not framework, but just in terms of challenge, opportunity. >> It's a large surface area, hopefully the framework is not complicated, but it does require vigilance and focus. And so as an example, I am a customer of IBM's Xforce and managed security services. IBM's a market leader in the security services business and they're my kind of perimeter defense on some of these things. But no, you're right. It's something that we can't take our focus off of. >> You know, I had a conversation recently with General Keith Alexander, formally the original commander of cyber command, now he's CEO of a startup, doing a private version of NSA. Signaling is huge in security. >> Fletcher: Yep. >> And I know one of your hobbies is to study kind of the general national security thing as a techie. >> Fletcher: Mhmm. >> The enterprises, they're private organizations. You know, the government's job is to protect IBM. But you guys have to protect yourselves. So you have a new world now where there's a private, public partnerships going on where signaling is super important. Where's the data coming, so real time, and sometimes systems can slow that down for the sake of protecting. But at the same time, you need real time. Not just for security, but in business. Retail, to users. So real time's become a big part of it. What's your thoughts on the notion of real time and security? >> It's huge. Our capacity to detect, respond, and remediate a threat in real time, or as near real time as we can, is the name of the game. You're exactly right, the partnership between governments and public sector and private sector, I think is evolving in a positive way. Where we're beginning to see, as an industry statement, more of these kind of advanced nation state type tactics even being used outside of governments. And so that requires a different kind of response. And then we've got to kind of move forward from an environment where things that are publicly available get enriched and analyzed in some way and then become classified and we can't have access to it. And so the kind of information sharing between companies and governments is really helpful in being able to detect threat on the internet in a real time way. And by the way, if you think we got threats now, when you get to AI and then eventually quantum, threat in the future is not going to be about getting you to click on a link in your email that you think is a legitimate email and install some piece of malware. It's going to be about injecting the minimum amount of data required to teach a system something incorrect or different. So you think of image classification in autonomous driving, with a very small piece of data you can teach it that a stop sign is a yield sign. And that's a fairly benign kind of use case, a simple one, but now imagine financial systems, healthcare systems. So that is leading to quantum resistance cryptography, which is how long do you need to retain data and then what is your encryption strategy around it. >> You know it's interesting. The cost of malware injection can be applied to anything with this. So, I got to ask you, 'cause you guys are leading a lot in quantum, Baba Giano and I have had many conversations. You guys got a great group over there, you got power, amazing stuff happening in quantum. Quantum does change security. What specifically should people know about when they hear quantum. Good for security? Potentially harmful for security? It's an opportunity in both ways. You have a quantum computer, you can crack things much faster. The notion of passwords pretty much goes away. So I need multi-factorial authentication. I mean the whole world's changing with quantum. What's your view? >> Well, like all technology, it can be leveraged for good or less good, and it's a reflection of what the human beings who are using that technology intend to do with it. At IBM, we are working on both sides of that issue. We are developing quantum computers, and then on the other side of it developing encryption methodologies that are quantum resistant or quantum proof. So things like lattice cryptography, where you can mathematically prove you can hide keys in N number of layers such that even a quantum computer can't decrypt it. And so then, how long do you really need to keep that data? If it's two or three years, maybe quantum resistant cryptography is less of an issue for you. If you are the social security administration and you got to keep data for the next 50 years, you got to start investing now in what does the quantum future look like and what are the implications to me from a data and encryption perspective? >> Quantam's super exciting. Fletcher, thanks for coming on and sharing your insight, final question for you. As a person in the tech industry, you've had a chance to see the waves, you got a big one coming up from quantum cloud to AI. What are you most excited about? What should people be paying attention to? In terms of the macro trends. Not necessarily just IBM, just your personal view. To be a new brand of tech leader, what are some of the things that people should pay attention to? And what are you excited about? >> Well, what I'm excited about is what all of this technology is going to bring to bear on our lives. I mean, autonomous driving is going to be life changing for people. The insights that AI will drive. And think about how much time all of us spend doing menial, non-value added tasks at work and in our personal lives. And those things we won't have to worry about as much, with RPA and AI and all kinds of technologies. And I think that will free us to be more creative and be more fulfilled, and I feel very optimistic about the future. In terms of the second part of your question, what advice would I have for tech leaders, I think it's do what you're passionate about. I spend a lot of time focused on trying to create an environment where I think talented people want to work, and that means understanding our purpose, communicating that purpose well. And as I say, kind, passionate about what you do, and believe in the company's purpose. >> Yeah, that's interesting. You mentioned tech for good is always an underbelly in every new trend. And if you look at what happened with, say Facebook, I mean we were talking in 2012 around how data could be weaponized. That was years before so called election or other things meddling. >> Fletcher: Yeah. >> I think there's a community obligation, from sharing data for security risks to seeing the good as a vision, but also identifying bad actors that are going to weaponize the good first. Right? You always have those kind of early adopters. Might not be the best characters. So there's kind of a community has to come together and be faster to identify those. >> Yeah, I do think all of us as leaders have an obligation to understand that risk, and then make decisions around, we as the designers of these systems have to make sure that we're engineering them with fairness and without bias. And then, are the people that we're consuming technology from, are the people creating that technology, are their business models compatible with people who are consuming that technology? And making decisions around who is an ethical, trustworthy partner that I want to be in business with to develop the future. >> Fletcher, thanks for coming on. CIO of IBM here inside theCube, as part of this special program, new brand of tech leaders. I'm John Furrier, thanks for watching. (upbeat music)

>> from our studios in the heart of Silicon Valley, Palo Alto, California. It is a cute conversation. >> Everyone. Welcome to this Special Cube conversation here at the Palo Alto Cube Studios. I'm John for a host of Cuba here. Moritz man is the head of the product management team at Open Systems A G. Great to see you again. Thanks for coming in. >> Hey, John. Thanks for having me. >> So last time we spoke, you had your event in Las Vegas. You guys are launching. You have a new headquarters here in Silicon Valley. Opened up this past spring. Congratulations. Thank you. >> Yeah, it's a great, great venue to start, and we set foot on the Silicon Valley ground. So to make our way to >> I know you've been super busy with the new building and rolling out, expanding heavily here in the Valley. But you guys were in the hottest area that we're covering Security Cloud security on premise, security. The combination of both has been the number one conversation pretty much in the cloud world right now. Honestly, besides a normal cloud, native cloud I t hybrid versus multi cloud out. See, that continues to be the discussion I think there's no more debate around multi cloud in hybrid public clouds. Great people gonna still keep their enterprises. But the security equation still is changing this new requirements. What's the latest that you guys are seeing with respect to security? >> Yeah. So, John, what we see is actually that cloud adoption had happens at different speeds. So you have usually the infrastructure of the service. Adoption would happens in a quite controlled way because there's a lift in shift. Do you have your old data center? You you take it and you transferred into azure I W S O G C P. But then there's also uncontrolled at option, which is in the SAS space. And I think this is where a lot off data risk occur, especially the wake off GDP are on where we see that this adoption happens. Maurin a sometimes control, but sometimes in a very uncontrolled way, >> explain that the uncontrolled and controlled expansion of of how security and multi cloud and cloud is going because this interesting control means this this plan's to do stuff uncontrolled means it's just by other forces explain uncontrolled versus controls >> eso controlled specifically means the IittIe team takes as a project plan and aches servers and workloads and moves them in a controlled fashion or in a dedicated project to the cloud. But what happened in the business world of business I t is actually did use those share content at any time with any device at any at any time and in all locations. So this is called the Mobile Enterprise on the Cloud First Enterprise. So it means that the classical security perimeter and the controls in that are my past, actually, by the path of least resistance or the shortest path >> available. And this is the classic case. People use Dropbox with some, you know, personal things. They're at home, they're at work, a p I based software. That's what you're getting at the >> and the issue of this is that that the data that has bean, like contained an pera meters where, you know, as it Caesar, where your data is. This has bean deployed too many edge devices, too many mobile devices, and it's get it gets shared, a nun controlled way. >> We'll get a couple talk tracks would like to drill down on that, because I think this is the trend. We're seeing a pea eye's dominant. The perimeter on the infrastructure has gone away. It's only getting bigger and larger. You got I, O. T and T Edge just and the networks are controlled and also owned by different people. So the packets of moving on it that's crazy so that that's the reality. First, talk track is the security challenge. What is the security challenge? How does a customer figure out what to do from an architectural standpoint when they're dealing with hybrid and multi cloud? So first of >> all, um, customers or BC enterprises try need to re think their infrastructure infrastructure centric view off the architecture's. So the architecture that had been built around data send us needs to become hybrid and multi cloud aware. So that means they need to define a new way off a perimeter, which is in cloud but also in the covering. Still the old, so to say, legacy hyper data center set up, which has the data still in the old data center and at the same time, they need to open up and become the cloud themselves, so to say, and but still draw a perimeter around their data and they users and not and their applications and not so much anymore around the physical infrastructure. >> So taking, changing their view of what a security product is, Is that really what you're getting at? >> Yeah, So the issues with the product point solution was that they fixed a certain part off off a tactile issue. So if you take a firewall in itself, firewall back then it was like a entry door to a big building, and you could could decide who comes out goes in. Now. If the the kind of the walls of the building are vanishing or arm or more FIC, you need to come over the more integrated concept. So having these stacked appliance and stacked security solutions trying to work together and chain them doesn't work anymore. So we think and we see that, >> Why is that? Why doesn't it work? Because in >> the end, it's it's it's hardly two to operate them. Each of those points solutions have their own end off life. They have their own life cycle. They have their own AP eyes. They have their own TCO, as all that needs to be covered. And then there's the human aspect where you have the knowledge pools around >> those technologies. So as an enterprise you have to content to continuously keep the very scar security experts to maintain content continues the depreciating assets running right, >> and they're also in it. We weren't built for tying into a holistic kind of platform. >> Yeah, What we see is that that enterprises now realize we have data centers and it's not accepted reality that you can abstracted with the cloud. So you have You don't own your own servers and buildings anymore. So you have a PAX model to subscribe to Cloud Service is and we think that this has to happen to security to so shift from cap ex to our pecs and the same way also for operational matters >> securities. The service is a crepe is a small I want to ask you on that front you mentioned mobile users. How do you secure the mobile uses when they use cloud collaboration? Because this is really what uses expect, and they want How do you secure it? >> So be secured by by actually monitoring the data where it actually gravitates, and this is usually in the cloud. So we enforce the data that is in transit through, ah, proxies and gators towards the cloud from the endpoint devices, but also then looking by AP eyes in the cloud themselves to look for threats, data leakage and also sandbox. Certain activities that happened. There >> are the next talk talk I want to get into is the expansion to hybrid and multi cloud so that you guys do from a product standpoint, solution for your customers. But in general, this is in the industry conversation as well. How how do you look at this from a software standpoint? Because, you know, we've heard Pat Gelsinger of'em were talking about somewhere to find Data Center S d n. Everything's now software based. You talk about the premiere goes away. You guys were kind of bring up a different approaches. A software perimeter? Yeah, what is the challenge for expanding to multi cloud and hybrid cloud? >> So So the challenge for enterprise and customers we talked to is that they have to run their old business. Gardner once called it by motile business, and it's still adopting not one cloud, but we see in our surveys. And this is also what market research confirms is that customers end up with 2 to 3 loud vendors. So there were will be one or two platforms that will be the primary to their major majority of applications and data gravity. But they will end up and become much more flexible with have running AWS, the old Davis Center. But it was the G, C, P and Azure, or Ali Baba glowed even side by side, right tow cover the different speeds at what their own and the price runs. And >> so I gotta ask you about Cloud Needed was one of the things that you're bringing up that just jumps in my head. And when I got to ask, because this is what I see is a potential challenge. It might be a current challenges when you have kubernetes growing such a rapid rate. You see the level of service is coming online much higher rate. So okay, people, mobile users, they're using the drop boxes, the boxes and using all these FBI service's. But that's just those wraps. As a hundreds and thousands of micro service is being stood up and Tauron down in there, you guys are taking, I think, an approach of putting a perimeter software premieres around these kinds of things, but they get turned on enough. How do you know what's clean? It's all done automatically, so this is becoming a challenge. So is this what you guys mean when you say software perimeter that you guys could just put security around things at any time? Is that explain this? >> Yeah, So? So if you talk about the service match so really mashing cloudy but native functions, I think it's still in the face where it's, I would say, chaos chaotic when you have specific projects that are being ramped up them down. So we draw a perimeter in that specific contact. So let's say you have You're ramping up a lot off cloud a function AWS. We can build a pyramid around this kind off containment and look especially for threats in the activity locks off. The different component is containers, but from from a design perspective, this needs to be, uh, we need to think off the future because if you look at Mike soft on AWS strategy, those containers will eventually move Also back to the edge. Eso were in preparing that to support those models also cover. Bring these functions closer back again to the edge on We call that not any longer the when, ej but it will become a cloud at at actually. So it's not an extension of the land that comes to the data. It's actually the data and the applications coming back to the user and much closer. >> Yeah. I mean, in that case, you could define the on premises environment has an edge, big edge, because this is all about moving, were close and data around. This is what the new normal is. Yeah, So okay, I gotta ask the next question, which is okay, If that's true, that means that kubernetes becomes a critical part of all this. And containers. How do you guys play with that at all? >> So we play with us by by actually looking at data coming from that at the moment. We're looking at this from a from a data transit perspective. We But we will further Maur integrate into their eighties AP eyes and actually become part off the C I C D. Process that building then actually big become a security function in approval and rolling out a cannery to certain service mesh. And we can say, Well, this is safe for this is unsafe This is, I think, the eventual goal to get there. But But for now, it's It's really about tracking the locks of each of those containers and actually having a parent her and segmentation around this service mash cloud. So to say, >> I think you guys got a good thing going on when you talk about this new concept that's of softer to find perimeter. You can almost map that to anything you get. Really think everything has its own little perimeter workload. Could be moving around still in these three secure. So I gotta ask on the next talk Trek is this leads into hybrid cloud. This is the hottest topic. Hybrid cloud to me is the same as multi cloud. Just kind of get together a little bit different. But hybrid cloud means you're operating both on premises and in the cloud. This is becoming a channel most si si SOS Chief admission Security officers. I don't want to fork their teams and have multiple people coding different stacks. They don't want the vendor lock in, and so you're seeing a lot of people pulling back on premises building their own stacks, deploying in the cloud and having a seamless operation. What is your definition of hybrid? Where do you see hybrid going? And how important is it? Have a hybrid strategy. >> So I think the key successfactors of a hybrid strategy is that standards standardization is a big topic. So we think that a service platform that to secure that like the SD when secure service platform rebuilt, needs to be standardized on operational level, but also from a baseline security and detection level. And this means that if you run and create your own work, those on Prem you need to have the same security and standard security and deployment standard for the clout and have the seamless security primary perimeter and level off security no matter where these these deployments are. And the second factor of this is actually how do you ensure a secure data transfer between those different workloads? And this is where S T win comes into play, which acts as a fabric together with when backbone, where we connect all those pieces together in a secure fashion >> where it's great to have you on the Q and sharing your insight on the industry. Let's get into your company. Open systems. You guys provide an integrated solution for Dev Ops and Secure Service and Security Platform. Take a minute to talk about the innovations that you guys were doing because you guys talk a lot about Casby. Talk a lot about integrated esti when but first define what Casby is for. The audience doesn't know what Casby is. C. A S B. It's kicked around all of the security conscious of your new to security. It's an acronym that you should pay attention to so defined casby and talk about your solution. >> Eso casby isn't theory. Aviation means cloud access security we broker. So it's actually becoming this centralized orchestrator that that allows and defines access based on a trust level. So saying, um, first of all, it's between networks saying I have a mobile workforce accessing SAS or I s applications. Can't be it in the middle to provide security and visibility about Where's my data moving? Where's married? Where do I have exposure off off GDP, our compliance or P C. I or he power risks And where is it exposed to, Which is a big deal on it's kind of the lowest level to start with, But then it goes further by. You can use the Casby to actually pull in data that that is about I s were close to toe identified data that's being addressed and stored. So are there any incidentally, a shared data artifacts that are actually critical to the business? And are they shared with extra resource is and then going one step further, where we then have a complete zero trust access model where we say we know exactly who can talkto which application at any time on give access to. But as everything this needs to be is in embedded in an evolution >> and the benefit ultimately goes to the SAS applications toe, have security built in. >> That's the first thing that you need to tackle. Nowadays, it's get your sass, cloud security or policy enforced on, but without disrupting service on business on to actually empower business and not to block and keep out the business >> can make us the classic application developer challenge, which is? They love to co they love the build applications, and what cloud did with Dev Ops was abstracted away the infrastructure so that they didn't have to do all this configuration. Sister. Right? APs You guys air enabling that for security? >> Exactly. Yeah. So coming back to this multi protein product cloud would, which is not keeping up anymore with the current reality and needs of a business. So we took the approach and compared death ops with a great service platform. So we have engineers building the platform. That's Integrated Security Service Platform, which promotes Esti Wen managed Detection response and Caspi Service is in one on the one platform which is tightly integrated. But in the in the customer focus that we provide them on or Pecs model, which is pretty, very predictable, very transparent in their security posture. Make that a scalable platform to operate and expand their business on. >> And that's great. Congratulations. I wanna go back for the final point here to round up the interview for the I T. Folks watching or, um, folks who have to implement multi cloud and hybrid cloud they're sitting there could be a cloud architect that could be an I T. Operations or 90 pro. They think multi cloud this in hybrid club. This is the environment. They have to get their arms around. How? What >> should they >> be thinking about? Around multi cloud and hybrid cloud. What is it, really? What's the reality now? What >> should they be considering for evaluation? What are some of the key things that that should be on their mind when they're dealing with hybrid cloud and all the opportunity around it? >> So I think they're they're like, four key pieces. Oneness. Um, they think they still have to start to think strategic. So what? It's a platform and a partner That helps them to plan ahead for the next 3 to 5 years in a way that they can really focus on what their business needs are. This is the scalability aspect. Secondly, it's a do. We have a network on security, our architecture that allows me to grow confidently and go down different venues to to actually adopt multi clouds without worrying about the security implication behind it. Too much, uh, and to implement it. And third is have this baseline and have this standardized security posture around wherever the data is moving, being at Mobil's being it SAS or being on Prem and in clouds workloads, the fourth pieces again, reading, thinking off where did you spend most of my time? Where do I create? Create value by by defining this framework so it really can create a benefit and value for the enterprise? Because if you do it not right your not right. You will have a way. You will end up with a an architecture that will break the business and not accelerated. >> Or it's made head of product that open systems here inside the Cube studios. Um, great job. Must love your job. You got the keys. A lot of pressure. Security being a product. Head of product for security companies. A lot of pressure before we wrap up. Just give a quick plug for the company. You guys hiring you have a new office space here in Redwood City. Looks beautiful. Give a quick shared play for the company. >> Yeah. So open systems the great company to work with. We're expanding in the U. S. On also, Amy, uh, with all the work force. So we're hiring. So go on our website. We have a lot off open positions, exciting challenges in a growth or into workspace. Andi. Yeah. As you said, security at the moment, it's one of the hottest areas to be in, especially with all the fundamental changes happening in the enterprise and architecture. I d landscape. So yeah, >> and clouds securing specifically. Not just in point. The normal stuff that people used to classify as hot as hot as Hades could be right now. But thanks for coming on. Strong insights. I'm jumping with Cuba here in Palo Alto with more Morris Man is the head of product management for open systems. Thanks for watching.

>> live from Las Vegas. It's the queue covering del Technologies. World twenty nineteen, brought to you by Del Technologies and its ecosystem partners. >> Okay, welcome back. Everyone's cubes. Live coverage. Day three wrap up of Del Technologies World twenty nineteen Java is Dave a lot. There's too many men on set one. We get set to over there blue set, White said. We got a lot of content. It's been a cube can, in guise of a canon of content firing into the digital sphere. Great gas. We had all the senior executive players Tech athletes. Adele Technology World. Michael Dell, Tom Sweet, Marius Haas, Howard Ally As we've had Pat Kelsey, rco v M were on the key partner in the family. They're of del technology world and we had the clients guys on who do alien where, as well as the laptops and the power machines. Um, we've had the power edge guys on. We talked about Hollywood. It's been a great run, but Dave, it's been ten years Stew. Remember, the first cube event we ever went to was DMC World in Boston. The chowder there he had and that was it wasn't slogan of of the show turning to the private cloud. Yeah, I think that was this Logan cheering to the private cloud that was twenty ten. >> Well, in twenty ten, it was Cloud Cloud Cloud Cloud Cloud twenty nineteen. It's all cloud now. That difference is back then it was like fake cloud and made up cloud and really was no substance to it. We really started to see stew, especially something that we've been talking about for years, which is substantially mimicking the public cloud on Prem. Now I know there are those who would say No, no, no, no, no. And Jessie. Probably in one of those that's not cloud. So there's still that dichotomy is a cloud. >> Well, Dave, if I could jump in on that one of the things that's really interesting is when Veum, where made that partnership with a ws It was the ripple through this ecosystem. Oh, what's that mean for Del you know Veum, wherein Del not working together Well, they set the model and they started rolling out bm where, and they took the learnings that they had. And they're bringing that data center as a service down to the Dell environment. So it's funny I always we always here, you know, eight of us, They're learning from their partners in there listening and everything like that. Well, you know, Dylan Veum where they've been listening, they've been learning to in this, and it brings into a little bit of equilibrium for me, that partnership and right, David, you said, you know that you could be that cloud washing discussion. And today it's, you know, we're talking about stacks that live in eight of us and Google and Microsoft. And now, in, you know, my hosted or service lighter or, you know, my own data center. If that makes sense, >> I mean, if you want to just simplify the high order bit, Dave Cloud. It's simply this Amazon's trying to be enterprised everyone, the enterprise, trying to claw Amazon, right? And so what? The what that basically means is it's all cloud. It's all a distributed computer system. OK, Scott McNealy had it right. The network is the computer. If you look at what's going on here, the traditional enterprise of vendors over decades of business model and technology, you know, had full stack solutions from mainframe many computers to PC the local area networking all cobble together wires it up creates applications, services. All that is completely being decimated by a new way to roll out storage, computing and networking is the same stuff. It's just being configured differently. Throw on massive computer power with Cloud and Moore's Law and Data and A. I U have a changing of the the architecture. But the end of the day the cloud is operating model of distributed computing. If you look at all the theories and pieces of computer science do and networking, all those paradigms are actually playing out in in the clouds. Everything from a IIE. In the eighties and nineties you got distributed networking and computing, but it's all one big computer. And Michael Dell, who was the master of the computer industry building PCs, looks at this. Probably leg. It's one big computer. You got a processor and subsystems. So you know this is what's interesting. Amazon has done that, and if they try to be like the enterprise, like the old way, they could fall into that trap. So if the enterprise stays in the enterprise, they know they're not going out. So I think it's interesting that I see the enterprise trying to like Amazon Amazon trying to get a price. So at the end of the day, whoever could build that system that's scalable the way I think Dell's doing, it's great. I was only scaleable using data for special. So it's a distributed computer. That's all that's going on in the world right now, and it's changing everything. Open source software is there. All that makes it completely different, and it's a huge opportunity. Whoever can crack the code on this, it's in the trillions and trillions of dollars. Total adjustable market >> well, in twenty ten we said that way, noted the gap. There's still a gap between what Amazon could do and what the on Prem guys Khun Dio, we'd argue, is a five years is seven years, maybe ten years, whatever it is. But at the time we said, if you recall, lookit, they got to close the gap. It's got to be good enough for I t to buy into it like we're starting to see that. But my view, it's still not cloud. It doesn't have to scale a cloud, doesn't have the economics cloud. When you peel the onion, it doesn't certainly doesn't have the SAS model and the consumption model of cloud nowhere close yet. Well, and you know, >> here's the drumbeat of innovation that we see from the public cloud. You know where we hit the shot to show this week, the public have allowed providers how many announcements that they probably had. Sure, there was a mega launch of announcements here, but the public lives just that regular cadence of their, you know, Public Cloud. See a CD. We're not quite there yet in this kind of environment, it's still what Amazon would say is. You put this in an environment and it's kind of frozen. Well, it's thought some, and it's now we can get data set. A service consumption model is something we can go. We're shifting in that model. It's easier to update things, but you know, how do I get access to the new features? But we're seeing that blurring of the line. I could start moving services that hybrid nature of the environment. We've talked a few times. We've been digging into that hybrid cloud taxonomy and some of the services to span because it's not public or private. It's now truly that hybrid and multi environment and customers are going to live in. And all of >> the questions Jonah's is good enough to hold serve >> well. I think the reality is is that you go back to twenty ten, the jury in the private cloud and it's enterprises almost ten years to figure out that it's real. And I think in that time frame Amazon is absolutely leveled. Everybody, we call that the tsunami. Microsoft quickly figures out that they got to get Cloud. They come in there, got a fast followers. Second, Google's trying to retool Oracle. I think Mr Bo completely get Ali Baba and IBM in there, so you got the whole cloud game happening. The problem of the enterprises is that there's no growth in terms of old school enterprise other than re consolidate in position for Cloud. My question to you guys is, Is there going to be true? True growth in the classic enterprise business or, well, all this SAS run on clouds. So, yes, if it's multi cloud or even hybrid for the reasons they talk about, that's not a lot of growth compared to what the cloud can offer. So again, I still haven't seen Dave the visibility in my mind that on premises growth is going to be massive compared to cloud. I mean, I think cloud is where Sassen lives. I think that's where the scale lives we have. How much scale can you do with consolidation? We >> are in a prolonged bull market that that started in twenty ten, and it's kind of hunger. In the tenth year of a of a decade of bull market, the enterprise market is cyclical, and it's, you know, at some point you're going to start to see a slowdown cloud. I mean, it's just a tiny little portion of the market is going to continue to gain share cloud can grow in a downturn. The no >> tell Motel pointed out on this, Michael Dell pointed out on the Cubans, as as those lieutenants, the is the consolidation of it is just that is a retooling to be cloud ready operationally. That's where hybrid comes in. So I think that realization has kicked in. But as enterprises aren't like, they're not like Google and Facebook. They're not really that fast, so So they've got to kind of get their act together on premises. That's why I think In the short term, this consolidation and new revitalisation is happening because they're retooling to be cloud ready. That is absolutely happen. But to say that's the massive growth studio >> now looked. It is. Dave pointed out that the way that there is more than the market growth is by gaining market share Share share are areas where Dell and Emcee didn't have large environment. You know, I spent ten years of DMC. I was a networking. I was mostly storage networking, some land connectivity for replication like srd Evan, like today at this show, I talked a lot of the telco people talk to the service of idle talk where the sd whan deny sirrah some of these pieces, they're really starting to do networking. That's the area where that software defined not s the end, but the only in partnership with cos like Big Switch. They're getting into that market, and they have such small market share their that there's huge up uplift to be able to dig into the giant. >> Okay, couple questions. What percent of Dell's ninety one billion today is multi cloud revenue. Great question. Okay, one percent. I mean, very small. Okay. Very small hero. Okay? And is that multi cloud revenue all incremental growth isat going to cannibalize the existing base? These? Well, these are the fundamentals weighs six local market that I'm talking to >> get into this. You led the defense of conversations. We had Tom Speed on the CFO and he nailed us. He said There's multiple levers to shareholder growth. Pay down the debt check. He's got to do that. You love that conversation. Margin expansion. Get the margins up. Use the client business to cover costs. As you said, increased go to market efficiency and leverage. The supply chain that's like their core >> fetrow of cash. And that all >> these. The one thing he said that was mind blowing to me is that no one gets the valuation of how valuable Del Technologies is. They're throwing off close to seven billion dollars in free cash flow free cash flow. Okay, so you can talk margin expansion all you want. That's great, but there got this huge cash flow coming in. You can't go out of business worth winning if you don't run out of cash >> in the market. When the market is good, these guys are it is good a position is anybody, and I would argue better position than anybody. The question on the table that I'm asking is, how long can it last? And if and when the market turns down and markets always cyclical we like again. We're in the tenth year of a bull market. I mean, it's someone >> unprecedented gel can use the war chest of the free cash flow check on these levers that they're talking about here, they're gonna have the leverage to go in during the downturn and then be the cost optimizer for great for customers. So right now, they're gonna be taking their medicine, creating this one common operating environment, which they have an advantage because they have all the puzzle pieces. You A Packer Enterprises doesn't have the gaping holes in the end to end. They can't address us, >> So that is a really good point that you're making now. So then the next question is okay. If and when the downturn turn comes, who's going to take advantage of it, who's going to come out stronger? >> I think Amazon is going to be continued to dominate, and as long as they don't fall into the enterprise trap of trying to be too enterprising, continue to operate their way for enterprises. I think jazz. He's got that covered. I think DEL Technologies is perfectly positioned toe leverage, the cash flow and the thing to do that. I think Cisco's got a great opportunity, and I think that's something that you know. You don't hear a lot of talk about the M where Cisco war happening. But Cisco has a network. They have a developer ecosystem just starting to get revitalized. That's an opportunity. So >> I got thoughts on Cisco, too. But one of things I want to say about Del being able to come out of that stronger. I keep saying I've said this a number of times and asked a lot of questions this week is the PC business is vital for Del. It's almost half the company's revenue. Maybe not quite, but it it's where the company started it. It sucks up a lot of corporate overhead. >> If Hewlett Packard did not spin out HP HP, they would be in the game. I think spinning that out was a huge mistake. I wrote about a publicly took a lot of heat for it, but you know I try to go along with the HPD focus. Del has proven bigger is better. HP has proven that smaller is not as leverage. And if it had the PC that bee have the mojo in gaming had the mojo in the edge, and Dale's got all the leverage to cross pollinate the front end and edge into the back and common cloud operate environment that is going to be an advantage. And that's going to something that will see Well, let me let me >> let me counter what you just said. I agree. You know this this minute. But the autonomy was the big mistake. Once hp autonomy, you know what Meg did was almost a fatal complete. They never should've bought autonomy >> makers. Levi Protector he was. So he was there. >> But she inherited that bag of rocks. And then what you gonna do with it? Okay, so that's why they had to spend out and did create shareholder value. If they had not purchased autonomy, then he would return much better shape, not to split it up. And they would be a much stronger competitor. >> And I share holder Pop. They had a pop on value. People made some cash with long game. I think that >> going toe peon base actually done pretty well for a first year holding a standalone PC company. So, but again, I think Del. With that leverage, assuming pieces, it's going to be really interesting. I don't know much about that market. You were loving that PC conversation, but the whole, you know, the new game or markets and and the new wayto work throwing an edge in there, I don't know is ej PC and edges that >> so the peanut butter. And so the big thing that Michael get the big thing, Michael Dell said on the Cube was We're not a conglomerate were an integrated company. And when you have an integrated company like this, with the tech the tech landscape shifting to their advantage, you have the ability to cross subsidize. So strategy game. Matt Baker was here we'd be talking about OK, I can cross subsidize margin. You've brought it up on the client side. Smaller margins, but it pays a lot of the corporate overhead. Absolutely. Then you got higher margin GMC business was, you know, those margins that's contributing. And so when you have this new configuration. You can cross, subsidize and move and shift, so I think that's a great advantage. I think that's undervalued in the market place. And I think, you know, I think Del stock price is, well, undervalue. Point out the numbers they got VM wear and their question is, What what point is? VM where blink and go All in on del technology stew. Orcas Remember that Gus was gonna partner. You don't think the phone was ringing off the hook in Palo Alto from their parties? What? What's this as your deal? So Vienna. There's gotta be the neutral party. Big problem. The opportunity. >> Well, look, if I'm a traditional historical partner of'Em are, it's not the Azure announcement that has me a little bit concerned because all of them partner with Microsoft to it is how tightly combined. Del and Veum, where are the emcee, always kept them in arms like now they're in the same. It's like Dave. They're blending it. It's like, you know Del, from a market cap standpoint, gets fifty cents on the dollar. VM wears a software company, and they get their multiples. Del is not a software company, but VM where well, people are. Well, if we can win that a little bit, maybe we could get that. >> Marty still Isn't it splendid? No, no, I think the strategy is absolutely right on. You have to go hard with VM wear and use it as a competitive weapon. But, Stuart, your point fifty cents and all, it's actually much worse than that. I mean the numbers. If you take out of'Em, wears the VM wear ownership, you take out the core debt and you look at the market value you're left with, like a billion dollars. Cordell is undervalued. Cordell is worth more than a billion or two billion dollars. Okay, so it's a really cheap way to buy Veum. Where Right that the Tom Sweet nailed this, he said. You know, basically, these company those the streets not used to tech companies having such big debt. But to your point, John, they're throwing off cash. So this company is undervalued, in my view. Now there's some risks associated with that, and that's why the investors of penalizing them for that debt there, penalizing him from Michael's ownership structure. You know, that's what this is, but >> a lack of understanding in my opinion. I think I think you're right. I just think they don't understand. Look at Dale and they think G You don't look a day Ellen Think distributed computing system with software, fill in those gaps and all that extra ten expansion. It's legit. I think they could go after new market opportunities as as a twos to us as the client business. I mean mere trade ins and just that's massive trillions of dollars. It's, I think I think that is huge. But I'm >> a bull. I'm a bull on the value of the company. I know >> guys most important developments. Del technology world. What's the big story that you think is coming out of the show here? >> Well, it's definitely, you know, the VM wear on del I mean, that is the big story, and it's to your point. It's Del basically saying we're going to integrate this. We're going to hard, we're going to go hard and you know Veum wear on Dell is a preferred solution. No doubt that is top for Dell and PacBell Singer said it. Veum wearing eight of us is the first and preferred solution. Those are the two primary vectors. They're going to drive hard and then Oh, yeah, we'Ll listen to customers Whatever else you want Google as you're fine, we're there. But those two vectors, they're going to Dr David >> build on that because we saw the, um we're building out of multi cloud strategy and what we have today is Del is now putting themselves in there as a first class citizen. Before it was like, Oh, we're doing VX rail and Anna sex and, you know, we'LL integrate all these pieces there, but infrastructure, infrastructure, infrastructure now it is. It is multi cloud. We want to see that the big table, >> right, Jeff, Jeff Clarke said, Why are you doing both? Let's just one strategy, one company. It's all one Cash registers that >> saying those heard that before. I think the biggest story to me is something that we've been seeing in the Cuban laud, you know, been Mom. This rant horizontally scaleable operating environment is the land grab and then vertically integrate with data into applications that allow each vertical industry leverage data for the kind of intimate, personalized experiences for user experiences in each industry. With oil and gas public sector, each one has got their own experiences that are unique. Data drives that, but the horizontal and tow an operating model when it's on premises hybrid or multi cloud is a huge land grab. And I think that is a major strategic win for Dell, and I think, as if no one challenges them on this. Dave, if HP doesn't go on, emanate change. If H h p e does not do it em in a complete changeover from strategy and pulling, filling their end to end, I think that going to be really hurting I think there's gonna be a tell sign and we'LL see, See who reacts and challenges Del on this in ten. And I think if they can pull it off without being contested, >> the only thing I would say that the only thing I would say that Jonah's you know, HP, you know very well I mean, they got a lot of loyal customers and is a huge market out there. So it's >> Steve. Look at economic. The economics are shifting in the new world. New use cases, new step function of user experiences. This is this is going to be new user experiences at new economic price points that's a business model. Innovation, loyal customers that's hard to sustain. They'Ll keep some clutching and grabbing, but everyone will move to the better mousetrap in the scenario. So the combination of that stability with software it's just this as a big market. >> So John twenty ten Little Table Back Corner, you know of'em See Dylan Blogger World double set. Beautiful says theatre of present lot of exchange and industry. But the partnership in support of this ecosystem. It's something that helped us along the way. >> You know, when we started doing this, Jeff came on board. The team has been amazing. We have been growing up and getting better every show. Small, incremental improvements here and there has been an amazing production, Amazing team all around us. But the support of the communities do this is has been a co creation project from day one. We love having this conversation's with smart people. Tech athletes make it unique. Make it organic, let the page stuff on on the other literature pieces go well. But here it's about conversations for four and with the community, and I think the community sponsorship has been part of funding mohr of it. You're seeing more cubes soon will be four sets of eight of US four sets of V M World four sets here. Global Partners sets I'm used to What have we missed? >> Yeah, it's phenomenal. You know, we're at a unique time in the industry and honored to be able to help documented with the two of you in the whole team. >> Dave, How it Elias sitting there giving him some kind of a victory lap because we've been doing this for ten years. He's been the one of the co captains of the integration. He says. There's a lot of credit. >> Yeah, Howard has had an amazing career. I I met him like literally decades ago, and he has always taken on the really hard jobs. I mean, that's I think, part of his secret success, because it's like he took on the integration he took on the services business at at AMC U members to when Joe did you say we're a product company? No services company. I was like, Give me services. Take it. >> It's been on the Cube ten years. Dave. He was. He was John away. He was on fire this week. I thought bad. Kelsey was phenomenal. >> Yeah, he's an amazing guest. Tom Tom Suite, You know, very strong moments. >> What's your favorite Cuban? I'LL never forget. Joe Tucci had my little camera out film and Joe Tucci, Anna. One of the sessions is some commentary in the hallway. >> Well, that was twenty ten, one of twenty eleven, I think one of my favorite twenty ten moments I go back to the first time we did. The cue was when you asked Joe Tucci, you know why a storage sexy. Remember that? >> A He never came on >> again. Ah, but that was a mean. If you're right, that was a cube mean all for the next couple of years. Remember, Tom Georges, we have because I'm not touching. That was >> so remember when we were critical of hybrid clouds like twenty, twelve, twenty, thirteen I go, Pat is a hybrid cloud, a halfway house to the final destination of public loud. He goes to a halfway house, three interviews. This was like the whole crowd was like, what just happened? Still favorite moment. >> Oh, gosh is a mean so money here, John. As you said, just such a community, love. You know, the people that we've had on for ten years and then, you know, took us, you know, three or four years to before we had Michael Dell on. Now he's a regular on our program with luminaries we've had on, you know, but yeah, I mean, twenty ten, you know, it's actually my last week working for him. See? So, Dave, thanks for popping me out. It's been a fun ride, and yeah, I mean, it's amazing to be able to talk to this whole community. >> Favorite moment was when we were at eighty bucks our first show. We're like, We still like hell on this. James Hamilton, Andy Jazzy Come on up, Very small show. Now it's a monster, David The Cube has had some good luck. Well, we've been on the right waves, and a lot of a lot of companies have sold their companies. Been part of Q comes when public Unicorns New Channel came on early on. No one understood that company. >> What I'm thrilled about to Jonah's were now a decade, and we're documenting a lot of the big waves. One of one of the most memorable moments for me was when you called me up. That said, Hey, we're doing a dupe world in New York. I got on a plane and went out. I landed in, like, two. Thirty in the morning. You met me. We did to dupe World. Nobody knew what to do was back then it became, like, the hottest thing going. Now nobody talks about her dupe. So we're seeing these waves and the Cube was able to document them. It's really >> a pleasure. The Cube can and we got the Cube studios sooner with cubes Stories with Cube Network too. Cue all the time, guys. Thanks. It's been a pleasure doing business with you here. Del Technologies shot out the letter. Chuck on the team. Sonia. Gabe. Everyone else, Guys. Great job. Excellent set. Good show. Closing down. Del Technologies rose two cubes coverage. Thanks for watching