>> Live from Washington D.C. It's theCUBE covering AWS Public Sector Summit 2018 brought to you by Amazon web services and its ecosystem partners. >> Welcome back to Washington D.C. everybody you're watching theCUBE, the leader in live tech coverage I'm Dave Vellante, with John Furrier, we're covering the AWS public sector summit Barry Russell is here, the General Manager of Worldwide Business Development and Operations for the AWS marketplace and service catalog and he's joined by Dmitri Alperovitch who is the co-founder and CTO of CrowdStrike a hot new company, just raised a boatload of dough we're going to talk about that, but welcome gentleman, thanks for coming on theCUBE. Barry, let's start with you. So we saw Teresa put up a slide, I tried to count and it was over two hundred ISVs and SAS providers for GovCloud, the marketplace is booming. What's going on from your perspective? >> So we launched marketplace in the GovCloud at New York summit last year, back in 2017 and we launched it in a little over four hundred products that were available. The team is more than double that now, there's nine hundred and fifty or more products available. But the exciting thing for us is that today we're able to make SAS; SAS inscription, SAS contracts available from partners such as CrowdStrike. It just gives customers more flexibility and choice in how they deploy software into a region like GovCloud. >> So Dmitri, we're going to get into the funding and the news in a second. But from your standpoint, marketplace, why the attractiveness, no concerns, it's all systems go, go hard in. What's your perspective? >> Absolutely. AWS has been a huge partner for us since really the beginning of the company. We've built our entire business on AWS, we're cloud end point security vendors so we have a little agent that lives on every server, desktop, laptop, both on premise and cloud environments. But the back-end is all on AWS where we process mass amounts of data and the exciting thing in the last year or so in partnering with AWS is being able to offer that capability to their customers through the marketplace where every asset that you have on AWS can now be protected by CrowdStrike and we're very very excited about that and actually today, we launched our 'Falcon' is the name of our product on GovCloud, offering to target primarily the Federal Government as well as the state and local and other enterprises actually, that are interested in that high level of assurance that GovCloud provides. >> What specifically- can you just drill down the product I just want to make sure that we get that right. So, you're on Amazon, you're protecting Amazon end points within their cloud. That's great for Amazon commercial enterprises, repeat one more time the public sector piece, how does that work? Who's the customer? Is it just the agency, or is it also enterprises who work with that? Talk about the dynamics. >> So when you look at our customers it's a mix of large enterprises, about twenty percent of fortune 500 companies, and various federal agencies. Basically we install on every machine they have that runs Windows, Mac or Linux systems so servers, desktops, laptops, everything within their environment but there's no on-premise equipment. So the agent connects to our cloud which runs on AWS and we collect all the execution activities that are taking place and apply machine learning and artificial intelligence to discover security threats. So it's a big data problem and we collect over a hundred billion events every single day just to give you a sense of how much that is, in two days we process the amount of data that Twitter processes in a year. So, really huge amounts of data. >> So Barry, do you go out to partners, do you even have to sell them on this concept, are they beating down your door, what's that dynamic like? >> Yeah, we work with partners that, well first of all, we have to get them to architect for AWS. So, before we even think about listing a product in marketplace, Dmitri will tell you, they have to first architect to run well on AWS so that when the software is deployed or the customer accesses that environment, it's running optimally. And the customer is protecting both assets that they have running on AWS and On-Prem. I think vendors have really warmed up to the idea of marketplace as a sales channel for them. And the reason for that is we really serve two different types of customers. One type of customer who can go to the public marketplace website and subscribe to a product, deploy that and immediately purchase it. And then, for large enterprise and public sector federal government customers, we still have that feature of private offers, which enables the customer and the vendor to negotiate on price and terms but still transact digitally through marketplace and have it all seamlessly built by AWS. Lots of flexibility for sales teams that are in the field. >> Okay, so they work out the financial arrangements and you guys facilitate that experience? >> That's right. We handle the deployment, subscription and billing for the customer. >> So obviously, you know, the commercial space SAS is exploding. What are the drivers in federal, are they similar, what are the differences? >> For customers that are wanting to move to SAS based applications, I think it's pretty simple. Customers have reached a point where they don't necessarily want to manage the underlying infrastructure or software itself. So they're really looking to manufacturers like CrowdStrike who have a fully managed SAS based environment running on AWS. All the customer wants is the outcome the functionality of the software, for it to be performant and do what the vendor said that it was going to do. Managing all of that infrastructure and underlying technology, that's the expertise of the manufacturer themselves and the movement to SAS is all about simplifying for customers. >> How about CrowdStrike news I want to get to the valuation question. You guys are valued at over three billion dollars just reported on siliconangle.com and around the world you guys raised two hundred million dollars in a round of funding. Total capitalization is about four hundred million, roughly? >> Yeah, over four hundred million. >> OK. So you're feeling good today, right? >> Very good. More than anything else it's an indication of our growth, we've doubled the company in terms of revenue last year. We had a year over year increase of five hundred percent in terms of one million dollar deals we've closed. So it's really an indication that we're separating ourselves from the rest of the pretty crowded endpoint security marketplace and establishing ourselves as a leader. >> And what's the money going to be used for? Mostly expansion, sales, marketing? >> It's further expansion, our growth internationally sales and marketing, engineering, helping build out more of the platform capabilities. >> I want to get your take on the cloud because you guys built your business on day one. We were commenting off-camera saying that with our company we have never owned a data center. Have you ever owned a data center? >> We do a few things, small things, but most of our stuff is on AWS. >> So, for the people out there trying to do cloud that don't have that clean sheet of paper of a start-up like you guys were seven years ago. The key to success, to really take advantage of the cloud, not just migrate to it, but actually use it. >> Well, you know, it's interesting in security it's been an interesting journey because when we started back in 2011, doing security in the cloud was a heresy. In fact, I remember meetings with major banks back in those days when we were telling them about our plans and how we're going to do security in a very different way. They said 'This sounds intriguing, but we'll never be a customer because we'll never do cloud." Now, most of these guys are customers, so the mindset has definitely changed a lot. And what we're seeing now is actually our competitors that for years have been trying to compete with us by saying 'Well we're on-premise, CrowdStrike is cloud, you can't trust cloud.' Now they're desperately trying to move to the cloud and of course, unless you build it natively in the cloud to begin with it's very very hard to do. You can't just put an appliance in a data center and call it a cloud, and that's what they're struggling with. >> How do customers determine whether something- How does it pass the smell test? You know, you can say you do things, what's the flaw in having that non-optimized fully cloud-ready, or born in the cloud solution? What's the test? >> That's a great question. So, one test is scalability. We replace a lot of our competitors because they just couldn't scale. Because they used traditional sequel-based databases, single appliances, not a multi-tenet environment, they deploy it to two hundred thousand end points and the thing just comes crashing down. So that's one big thing and then in terms of better security, unless this is what the cloud really gives you in security, unless you can aggregate all of this data, and we process a hundred billion events per day and do machine learning on that data to try and discover new types of attacks, you're not leveraging the benefits of the cloud you're not delivering better protection. >> We've had many interviews over the years, Dave and I, around security with Amazon. You took a lot of heat on it being not secure turns out the cloud is actually becoming more secure, you're an expert in security, you've done a lot of thread analysis over the years looking at your bio and you're successfully leading a great company. Hackers love to attack where the data is, so the cloud's complexity, if you will, or its distributive nature, makes it less hackable, some say. What's your take on that? How do you view that opportunity? So say, look at it, if I put everything in one spot, I can brute-force it, or I'm going to get hacked. What's your take on using the cloud as an opportunity to have better security? >> You know, in this day and age almost every single company that is not concerned in moving to the cloud is making a huge mistake because the reality is, when you look at the security teams that Amazon has, or other cloud providers have, they are way ahead of virtually everyone in this market. They're way ahead of the big banks that have a lot of money,6 they're certainly way ahead of the federal government, so you're getting the best of the best and security technologies they have the same level of scale that we do in terms of seeing all these types of attacks and can react a lot faster. So yes, while it may present itself as a bigger target the reality is that you'll be getting a much higher level of protection than you can ever do yourself. >> So what's the inside scoop on the tipping point? You were talking before, years ago, financial services, customers for example said 'Never, we'll never go to the cloud'. We've had many interviews, 'that's an evil word.' >> That's right. >> What was the tipping point? Was it the realization that companies like Amazon could do a better job? Was it fear of missing out? Was it economics? Was it the losses that they were taking? What was it? >> I think it was a combination of everything. It's funny because in those days we actually asked them, 'Well, how did you feel about virtualization when it came out? I bet you didn't like that either.' 'No, we didn't like that, now we use the virtualization.' 'How do you feel about open source?' 'No, no. We hated it. Now we use it.' Right, so it's a journey for a lot of companies. Whenever something new comes out that's a big paradigm shift. But a few years in typically they realize the adoption. What we're seeing now particularly in the public sector is that realization that the commercial sector went through probably three or four years ago. And now we're seeing the big push and the executive order from the present that you have to adopt cloud, that you have to move to modern IT infrastructure and we're seeing a lot of success and the federal government agencies are realizing we need to do security in particular very differently and the cloud is a huge differentiator. >> How about, anything you can add to that Barry? Your perspectives on it? >> No, we're seeing enterprise customers and not just in financial services but across all industries. On the public sector side, you have organizations like GoodWill or City and Newport and then on the enterprise side, you have really large organizations like Siemens or 3M that are not only leveraging AWS but have also started leveraging solutions that are available in the marketplace and I think that in the past couple of years we have seen a turn both in the enterprise customer and in public sector customers that are really starting to adopt cloud and move to that as their primary mechanism. >> And we have seen in the last year huge adoption of the public sector across many sensitive agencies they're starting to adopt our solution on the GovCloud platform because they're seeing the benefits of that security model. >> It's a no-brainer, really, if you look at the speed and scale that you can do things, but you've got to check the boxes of the public sector, a little bit different than the commercial enterprise. So, talk about the public sector we're here at the public sector summit, it's like a reinvent in and of itself of that ecosystem. What does the current landscape look like? What's the orientation? What's the posture of their technology strategies? What's their appetite? Can you guys just give us some color commentary on the public sector customers? >> Sure, go ahead? >> Yeah. You know, one of the reasons that GovCloud was built and stood out was to give customers that needed FedRAMP or ITAR compliancy, you know and an opportunity to operate those workloads that they were moving over. Here's what I would say, you know, it's not just traditional public sector customers, like government agencies or the federal government that are operating in GovCloud, it's also enterprise customers that serve those needs. So there's this cross-section of pollination of customers and server team partners that are serving the federal government and government entities and large educational institutions or state and local government. But they want the same level of innovation, scale, they want to free up their developers to develop new applications and services for the citizens that they serve. They want all of the same things that the enterprise customers that we've been talking about have had for a number of years. They want the exact same thing. >> The paradigm shift, Dmitri, we were talking off-camera about the public sectors looking to the private sector because there's leadership there. No-one says, 'Hey, let's just do what the government does, there's no real- the inefficiencies that use cases there. You mention paradigm shift. How has the paradigm of operating and servicing and selling and delivering product value to the public sector changed? I mean, we still hear, the Oracle, thing was in the news about the DOD JEDI project? So the old way of selling and procuring is changing? >> It is, and the fact that customers can now leveraging Amazon and buy through the marketplace, all of these services directly from Amazon without having to go do separate contracting vehicles and separate prosumers, but the other benefit you get is the SAS deployment model in times of value. Traditional security solutions as an example take literally twelve to eighteen months to deploy. We had an agency in the US government that bought our solution recently and deployed throughout the entire agency in two weeks. So that ability to automatically get value of the solution helps secure the enterprise is something that you can only achieve with a cloud-based solution. >> I talk to a lot of people in D. C., we've been covering, opening up more coverage here it's still hot-market for the cloud area and certainly government as well. And then, in an off-the-record conversation, I won't say the name, but he says 'Look, I can't deny the Amazon solution, this cloud-native stuff is amazing, when have prices ever gone up? They don't, they go down, but they take more account-control because they get more penetration. So the prices go down. In the old way, prices went up! So, again, this is the shift in the mindset where you get more business, but you're driving the prices down at the element level. Is this the key thing that you're hearing too? >> Absolutely, and when you look at some of the customers that, I don't want to speak for you, but that Amazon has acquired in terms of intelligence community and others that you would never think would ever move to the cloud given the sensitivity that they have, and yet they've realized that to do things differently, to accomplish their mission, they have to use the cloud. So we're absolutely seeing that paradigm shift and the nice thing is that it's coming both from the bottom-up with these agencies realizing that they have to do things differently, and there is support in the White House in terms of IT modernization that we need to adopt the cloud to be successful. >> So do you feel like we'll finally start turning the corner in security? What I mean by that, is if you look at some of the metrics about, OK, a company gets infiltrated, they don't even realize it for whatever, two hundred and seventy five days, we spend more on security every year but we feel less secure. Is the cloud beginning to change that or are some of those metrics or even subjective measurements, I'm happy to spend more but I want to be more secure, are we starting to see the fulfillment of that promise? >> Absolutely, no question about it. And I'll give you a very concrete example. We actually launched, two weeks ago, a guarantee. If you're a customer using our service and you get breached on a system we protect, we pay up to a million dollars of various costs that you have because we believe that we can actually secure you and we're willing to put our money where our mouth is and establish that guarantee and there's no one in the industry that is doing anything like that. >> That's putting your money where your mouth is, I mean that's fantastic, usually these guarantees give a free month of service. >> No, no, no. We will pay cash to reimburse various expenses and set a response, legal fees, everything else that comes into it. >> Congratulations for taking that step. I mean, others are going to have to follow. >> That's good leadership. One of the guys on the stage from the CIA, Dave, you had the quote said that security-- >> Cloud security on its worst day- Cloud security on its very worst day is far better than my client's server systems. (John laughs) >> So there it is, to your point, OK, let's get the plug in for you guys. So you've got eight months of you starting to work together in the marketplace. >> We did. >> Tell us about that relationship, how's it going? What do you guys do? You're selling products together? Give a quick update on the relationship between that. >> Okay, so our Falcon platform in the last eight months has been on marketplace where customers that are coming in, and provisionary resources on EC2, on AWS can immediately get Falcon to protect those resources and that has been a fantastic growth area for us. We've also been partnering on the new GuardDuty offering that Amazon launched last year we're the intelligence provider for that platform. So it's been a great partnership we're looking to do a lot more, in particular with the GovCloud in the public sector. >> Last word? >> Well for us now, we're able to have a solution we can recommend to customers that's fully SAS-based, running on AWS and proven in its capability so, you know, it's great to partner with their sales and alliance team on the commercial and public sector side. We're going to look forward to seeing what we can do for the rest of the year. >> Well, Barry, thanks for coming back again it's great to have you on theCUBE and Dmitri, wonderful, and congratulations on the raise and making some progress, really appreciate your insights. >> Thank you so much. >> You're welcome. >> Alright, keep it right there buddy, John Furrier and I will be back with Stu Miniman, we're live from AWS Public Sector Summit. You're watching theCUBE.

>> Announcer: Live from Las Vegas, it's theCUBE covering AWS re:Invent 2017, presented by AWS, intel, and our ecosystem of partners. >> Welcome back everyone, live here in Las Vegas. This is theCUBE's exclusive coverage of AWS re:Invent Amazon Web Services annual conference, forty-five thousand people here. Huge event. This is the industry bellwether for Cloud computing now, soon to be IT public sector, IOT, AI, as Amazon sets the trends. TheCUBE's got the coverage. I'm John Furrier with Stu Miniman. Our next two guests is Barry Russell, general manager and (mumbles) for Amazon Web Services Marketplace, hot and on fire, growing, and Thomas Wyatt, chief strategy officer at App Dynamics, partner of AWS. Welcome to theCUBE. >> It's great to be here guys. >> Thank you. >> Partner central, lot of love going on in the partnerships because Amazon has an enabling platform. They lower the costs, increase the value, and increase the wealth creation flowing around. You guys are taking advantage of that. >> Absolutely, so with AppDynamics, we're helping customers with their Cloud migration to Amazon. You know, applications really are becoming the foundation of the modern business and understanding the performance of those applications, the users, the application, the business metrics themselves is critical, as this really signifies the brand for most companies. So as they are moving their workloads over to Amazon, it's critical they really understand how things are performing and make sure that they perform well in that new environment. And so the relationship we've had together has been phenomenal in helping that happen. >> (mumbles) done a lot of work, though, on the app side. And it's interesting, and the hottest trend right now that we're seeing, certainly in this Cloud conversion, IT in particular, as well as other markets, I mentioned IOT and AI, obviously hot as hell as well, is the instrumentation of the data is super critical. >> Yes, yes. >> And that is not new to you guys. But it's now becoming apparent that it's easier to do in the Cloud than it was before. >> Sure. >> What do you see? I mean you must look at the Cloud and be like, man this is so awesome, horizontally scalable, but all the goodness of having that instrumentation. What's your take on that? >> Right so it really starts with that. Instrumentation provides you the insights in real time necessary to take advantage of the optimizations that Cloud provides you, so the ability to scale up, scale down. If you know how your application is performing in real time, you take that guesswork out. And I think that's really what, leveling AppDynamics with Amazon really gives you that capability, the best of both worlds. >> Yeah, Barry, the application monitoring space, you have a number of really good partners here. Amazon also has some of their own pieces. How do you balance that sort of engagement? We've seen, you know the partner summit I saw some really good slides up there. We've interviewed a number of the partners of this space, but want to get your viewpoint. Well, first, AppDynamics makes their software available as SaaS, which is a pretty quickly growing trend, with all sorts of customers, you know, particularly enterprise customers wanting to move to that model. And then we work with AppDynamics to come up with a specific use case for the workloads that are migrating over, particularly with customers that are migrating large amount of workloads as they're shutting down data centers. And we make those available to those customers and provide them with a choice. And once we document that technical use case we can put that in the hands of our SAs, our solution architects, Proserv teams, and consulting partners like 2nd Watch and Slalom, Accenture, and Deloitte, to help advise the customer on which third-party software meets those workload needs best. >> Thomas, you know, Cisco's got a pretty sizable presence at this show. I was mentioning, you know, this is the second recently acquired company of Cisco that we've had on the program this week. I mean, they spent billions of dollars on AppDynamics, bunch of others. Cisco has always been an acquisitive company, but, you know, what is the kind of acceleration of Cloud, mean for Cisco. How are companies like AppDynamics helping along that shift for Cisco's business? >> Yeah, that's a great question. I think the way to think about it is, Cisco's really been helping our customers with their networking, their data center, security, but it was a critical missing component for us was really understanding application intelligence and how end users and businesses are impacted by the infrastructure. And so, bringing AppDynamics into part of Cisco, which we're running it fairly autonomously, but having the ability to connect to other infrastructure-related products to provide more real-time intelligence is a key part of the strategy. So bringing those things together and then complementing that with our Cloud partners, and the marketplace has really made that super easy for us now, from the context of making it easier to buy AppDynamics with AWS. That combination has been super powerful. >> Talk about the marketplace dynamics that you're trying to create, Barry, because you obviously got a good thing going. What are you doing to create the incentives, to create a frictionless environment? Because obviously you don't want any friction, but you got growth. >> Barry: We do. >> What are some of the speed bumps you're hitting? How are you addressing it? How are you with AppDynamics of the world? Is there incentive programs? Is there joint selling? How should partners think about that? And then I'd love to get your reaction to Amazon's programs. >> Well there's one key thing that we launched a couple of weeks ago. It's called seller private offers. And what it enabled us to do, and it was kind of a missing piece, was for a seller to work with a customer, so AppDynamics working with a customer, to negotiate on best price and terms for a longer period of duration of use, one, two, or three year subscription. That enabled the customer to get the best terms and price to run the software on AWS, and it also enabled sales teams, for example, working with Cisco and AppDynamics, to sell in a way that they were more accustomed to once a customer was familiar with the software. And then we announced... >> Renewals' a recurring revenue. >> Right. >> Right. >> They're smiling over there. >> And then we paired it with enterprise contract that we launched on Tuesday. Which was a negotiated set of terms to remove a ton of friction around legal negotiation of standard contract terms between software vendors and enterprise buyers, and so we're trying to innovate between both the buyer and the seller at all times. >> So until you can actually voice order product, you're gonna always be chippin' away at the friction? >> Barry: Always. >> Thomas: Right. >> All right, your reaction to Amazon, how are they a partner? You can tell the truth even though he's standing right there. >> Thomas: No absolutely. >> Come on... >> I mean, here's the key thing. We've been a marketplace partner for several quarters now. We're seeing huge transactions flow through that, and as part of that, the two key things that we're finding. The first one is the deal sizes are expanding, and largely because there's a lot of comfort from the end customers at the combination of AppDynamics working closely with AWS, ensuring those systems are integrated, that they work well together, they can be procured together, there's common bill. Those kind of capabilities have really helped us. The second thing is, we're proving that we can help accelerate the pace of Cloud migration. So, we're seeing on average our enterprise customers are getting through the Cloud 30% faster by using the two solutions together. >> So they like the buying methodology. >> Thomas: That's right. >> And speed of deployment. >> The speed of deployment and the fact that when they get there, they know their environment's going to be very stable. They have that additional assurance because they've got the performance monitoring metrics before they make the move, and then once they get there they have it. Because the AppDynamics really provides you that visibility across both. So, thinking about it from... >> So I saw the announcement, it was one click was it Andy who put up one click something? Was that a marketplace deal? I saw it on the keynote yesterday. It might have been one click (mumbles), I don't know. >> I don't think it was associated with the marketplace. We do still have that feature. Yeah, so. >> So things are going good? You're happy? >> Yeah, I mean a great example, NASDAQ spoke yesterday with Barry, Heather Abbott, and talked about their experience about moving their workloads over to AWS and how AppDynamics was instrumental to help them understand the dependencies of their environment before they made that transition. There are so many great examples of that, and that's why we think... >> All right, so final question for you, then I know Stu wants to jump in, Andy Jassy told me when I interviewed him last week for the event, customers vote with their workloads. What are the workloads that you're seeing moving over? What kinds of workloads fit into this new style, this new guard model of... >> I would say a couple years ago it was primarily new apps, building from the ground up. Now it's the mission critical stuff. It's the important things that people are running their businesses on, moving those over, and I think that's part of the reason why AppD is becoming more integrated into that, is because AppD instruments generally the most critical applications, not necessarily the third and fourth tier. So the typical workloads that impact revenue, impact customer engagements, are ones that are now being... >> So you're at the center of all the migrations? >> Thomas: Yeah. >> Awesome. >> So the one, can't let you go without asking, beyond just getting to the Cloud, I'm wondering what you're seeing from customers and how you're working with them on moving along from just instances to containerization and even serverless. >> Yeah, in the enterprise space we're definitely seeing the phase one was just move the existing VMs over. Now it's refactoring and reestablishing the products and the architectures based on the modern technologies like Lamba and Serverless, and other things. It's all great. It's a really exciting time. >> Thomas Wyatt, chief strategy officer AppDynamics, happy partner obviously (mumbles) workloads are moving to the Cloud. Barry Russell, general manager of the place making it happen. >> Congratulations, Barry, on your success. >> Thank you. >> And AppDynamics >> Thank you. >> Congratulations on your acquisition with Cisco. Big deal. You guys are driving a big part of their transformation. >> Barry: Yes. Congratulations to you guys as well. >> Thank you. >> Of course, Amazon's taking no prisoners here at re:Invent, 45,000 people. I'm John Furrier (mumbles) more live coverage from day 3 after this short break.

>> Narrator: Live from Las Vegas, it's theCUBE. Covering AWS re:Invent 2017. Presented by AWS, Intel, and our ecosystem of partners. >> Welcome back and we're live here in Las Vegas. This is 45,000 people here for Amazon Web Services re:Invent. This is theCUBE's exclusive coverage. I'm John Furrier with my co-host Stu Miniman. And our next guests are Barry Russell, general manager and business development of AWS Marketplace, and John Rooney, Vice President of product management for Splunk, partner of AWS. Also we cover Cube.com, Cube alumnis. Welcome back, good to see you. >> Thank you, it's wonderful to be back. >> So what's it like partnering with AWS? Because you guys got a big mention from Andy Jassy on my interview with him last week, really highlighting Splunk as a partner that's done so well on the platform, in the ecosystem. You guys were called out as just a real success story. Congratulations, what's the secret magic formula? Just can't be making great products? >> No, really, I think the secret formula is really about helping customers, and sort of what do customers need, and getting it to them. And there is this sort of virtuous cycle of the more AWS continues to innovate in how customers can build, deploy, manage services and applications, really build a whole business in the cloud, the more varied visibility needs there are. And that's what we provide. So it's a really good symbiotic relationship. It's a partnership that goes back years and years. I think I was here in 2012 on theCUBE re:Invent that year. And every year, it seems like there is no shortage of services. >> You and Jerry Chen have been on every year of AWS. >> I'm trying to dress better. That first year I wore a black Splunk t-shirt. And my Aunt Merry Jo was really upset. Like, "Can you please dress up?" So I'm wearing a sport jacket and shirt. So doing my best. >> Whatever you do, don't wear a tie. I'm boycotting the tie. >> I'll try not to. Yeah. >> Barry, we've been talking about the engagement and integrations that you've been doing. Talk about Splunk, the category that they're in, and why that's important in the marketplace. >> Yeah, well they've been great at innovating with us. In particular, they offer customers the ability to really deeply analyze what's happening in their environment. And as customers are migrating over, that's been super important for us. As a customer makes a decision to shut down data centers and migrate those application workloads over, they want to understand what's happening in their environment. They want security within that environment. And Splunk has been innovating around that. And for us, they've been a great partner because not only have they offered a traditional machine image-based software. But now they offer Splunk Cloud, which is a SAS based offering. Which we know many enterprise customers are moving to that model. >> What's the Splunk formula for the product? Because I hear there's a lot. And it's been debunked, but I'll bring it up because it's out there in people's minds. Whoa if we partner with Amazon I don't know they might take over our company. So I won't say there's a general fear, but I've heard that before. >> No, no, I think our relationship, again, with Amazon, it is around delivering the best possible service. the best possible products to our customers and we feel like the Amazon platform is, it's obviously best in industry, and best in class. Look around at the people that are here. And our customers are going there in droves. And they're looking at moving workloads. They're looking at starting. I mean, that's the other thing that's great. And the interesting thing, That we heard so much about serverless in the last couple of days and so much about sort of the next paradigm in building applications. That's all because the groundwork's been set in the cloud by Amazon for when the cloud in 2008, 2009, 2010 was all forklift a VM into the cloud and that sort of cloud. Well now we're completely re-architecting. We're really thinking about re-thinking the way applications and services are built. And again, that brings in new changes and challenges in visibility. I think the early, the sort of last decade or so at the early stage of, what were the concerns around the cloud? It's like, well, what about security and what about visibility? Obviously Verner talked today in the keynote about security is job one. Every developer needs to think about security. That's no longer a concern. That's not a blocker for cloud migration. Then obviously you have things like the Kinesis Firehose. All these other sources of information and sources of data so that customers who are moving their workloads to the cloud still have the same and probably better and more manageable visibility then they would have if they were pulling log files off disks in their data center. >> John you mentioned customers going through that transformation. I remember when we first started covering the Splunk conference with theCUBE. It was heavily virtualization environment. I mean, I first came across Splunk from the VMware community and the like. Customers are being pulled and going through those transformations. You mentioned Kinesis, you talk about, I think you've got an announcement for the Alexa for business also. You have a pretty broad spectrum. I mean, Splunk, how do you manage that portfolio internally and with customers? How do you manage the, I wouldn't say old guard for Splunk but you know manage the modernization and all these changes that are happening? >> Well, sort of the mental model for Splunk has always been, we'll go and get your data wherever it is and we'll pull it into Splunk so then you can correlate, visualize, search, and get value out of that data. And in some cases, that data is going to live, again, in the traditional distributed data center environment. Is going to be a log written to disk. There are still some industries where there are still mainframes. I know it seems crazy, but that is still a big piece and that's not necessarily going to go away tomorrow or the next day. But more importantly, I think increasingly, you're going to see, not just a, again, take an existing VM and forklift that into an IS environment. Lets re-architect an entire service. Lets rethink the way that we're delivering value to our customers. Those are the interesting opportunities for us It's a very close partnership with AWS. We're very closely aligned with the teams. So as they think about services, Cloud Trails, and the Kinesis Firehose, and Guard Duty. These things that they realize are valuable to their customers because they are here and their customers ask for it. We have just a good partnership that says, how can we plug in? How can we contribute to that initiative? >> Hey Barry, there's a word that John used that I want to ask you about. It's data. So you know when we interviewed Andy last year I put forth the premise, I think data is going to be the next flywheel for AWS. How does the marketplace look at that? You work with your partners, obviously integrations, the APIs but data is at the center of it. And how do you make sure that you are securing the data? Make sure that only the people have it but that partners can also help customers get more value out of it? >> Well you know all the applications we list in the catalog are put through security tests and we scan the applications themselves, the code, 24 hours a day seven days a week. It's part of the value we add. But working with ISVs like Splunk we also build API integration to services like Kinesis Firehose, like S3, like Aurora, so that customers have the opportunity to move their data over into AWS, which is where it's secure, and then leverage secure software to access and analyze that data. So I think he's exactly right in working in partnership with AWS. There's that connective tissue between a third party software and the native AWS service. >> Where's it go next for you guys? I mean, obviously, I think you're right about this whole partnership thing. Even though I brought that other question up. The growth is so massive. You can innovate with AWS. It's not like you're just partnering with them and putting it in a marketplace and hope someone buys it. There's growth. I think that's the nuance that people don't understand, is that you can do more with AWS. >> Well yeah I mean absolutely. I think the ability to be part of, the same way, again, in the keynote today, we talked about building in security from the get go. You start with security and with functionality. I think the notion of visibility and observability from a data standpoint. If you are building something, how do you know it's working? How can you provide the folks in operational roles and business roles the data and information that they need? So if you bake that in from the beginning, we now have an opportunity for Splunk to rethink our integration points. To rethink how we deliver value to customers. Again if you think about the Splunk origin story, we started with monitoring and troubleshooting in production environments. Right? Obviously, we built the company on that. We drink a lot of free soda in San Francisco based on those use cases. But if you think about now with DevOps and sort of the shift left movement that >> Your chair has grown significantly, big time because more services are available. >> More services are available but also people are rethinking the whole notion of product development and life cycle. And again I think DevOps, in many cases, the accelerant for DevOps has been cloud and obviously the accelerant for cloud has been AWS. >> Alright question for both of you guys because we've been talking about this on theCUBE and I've got Andy coming on in a few hours. We believe there is going to be a renaissance in software development. You mentioned software lifecycle. You can see it here. Verner's keynote about re-imagining architecture. He put the basic architecture slide up from a video streaming company, boxes and lines, normal architecture. Then S3 buckets, it looked completely different. So the question is with all the simplicity now, all this simplification in APIs. This is going to be a real boom for developers. We believe this is going to be a renaissance in software development, because it's not going to be you grandfather's software development lifecycle. Do you believe that, and how do you see software developers evolving? More craft? More artisanship? What do you see? >> I think that the confines of the scope of what a developer did five, ten, fifteen years ago is different. Developers didn't think about security. They didn't care about security. They didn't think about scalability. They didn't think about. What does elasticity of scale look like in my application? I don't know it worked in my dev environment. That now feels archaic. That's like leeches. Nobody does business like that anymore, right? And I think that's where the notion of >> Cloud9 was an impressive demo too. >> Absolutely. >> Things like that are coming down >> Yeah the idea that you have a fully powered IDE that includes interactivity in the cloud. Folks have sort of dreamt of that. If you think about how heavyweight the client based IDE has got to a certain point kind of in the late odds. Everyone went away from that and said nope we're just going to VI everything. I don't want to see, I don't want to plug in. I don't want to download anything. I just want to VI anything. Now it's sort of, we're back to. I have this full set of functionality. I have code completion, and I have all the things I need as a developer to help me. But its completely light weight. It's a service. It's a utility. It's like the faucet. So-- >> Here's what I would say. I would say that for the first time developers are going to have a rich set of options where they can choose how the customer deploys the software. Containers or serverless. API based or SAS. With the consumption model that matches that use case. Hourly, and metered, annual, or multi-year or consumed via an API service. >> It's going top be awesome and creative too. A lot of creativity. Final question because I know both of your companies very well. Both have really strong communities. The role of communities, certainly open source is growing exponentially. We're seeing that with the Linux Foundation and a variety of other places. With the cloud flywheel, with the open source flywheel, we believe communities are going to be very important. You guys both have strong communities, Splunk and AWS. What would you say to folks that aren't thinking about nurturing and building community into their products? >> I would say that our company was built by our early advocates. I mean again, our mission at the end of the day and from the very beginning was our core practitioners, our users. It's a little slightly different now AWS is sort of the classic developer but for us it was the sysadmin, the tier one and tier two SOC analysts and security. How do we help their lives? How do we make their job better? So we have to have an intimate understanding of what problems are they trying to solve? How do we solve that? How do we abstract away, essentially, the high-effort low-value parts of their job? Have the software do that, so they get to the point where their focus is on the. Essentially they get to apply their intellect, their expertise. Then they evangelize for us. So community is one hundred percent essential. It doesn't matter how great the mouse trap is if you are not connecting with people, if you are not making people part of that and allowing people to share ideas. >> So you had a strategy for community out of the gate. >> Yeah I think it's community first. >> Without community you don't get the feedback on how to improve your product. It's that simple. >> That simple, all right. Man, a great conversation. Marketplace is booming. General Manager of the Marketplace, Barry Russell. We got also John Rooney vice president of product marketing at Splunk. Very successful company. Gone from very small niche product, great community, to public company and now taking over the data world. Great to see you, John. Thanks for coming on. Barry, thanks for the commentary. >> Thank you. >> It' theCUBE 45,000 people here live in Vegas for re:Invent. I'm John Furrier and Stu. We'll be back with more coverage after this short break. (upbeat music)

>> Narrator: Live from Las Vegas: It's theCUBE covering AWS reInvent 2017. Presented by AWS, Intel, and our ecosystem of partners. (techno music) >> Welcome back, everyone, we're live here in Las Vegas. 45,000 people here at Amazon Web Services reInvent. This is theCUBE's exclusive coverage. I'm John Furrier, my co-host Stu Miniman. Our next guests are Barry Russell, general manager and business development of Amazon Web Services marketplace, growing like a weed, and Chad Whalen, who is the global Vice President of Public Cloud for F5, guys, welcome back to theCUBE. Barry, welcome to theCUBE. >> Thank you. >> So, I mean, just, you can kinda see it now. Clear as day, no more, I mean, Andy says, "We're okay to be misunderstood." That quote, okay, no one's gonna misunderstand the Marketplace. >> Barry: I think it's pretty clear. >> You get in there, and you make money. It's pretty straightforward. >> Barry: Reducing a bunch of friction for customers. >> What's the current pitch, I mean, because this sounds like an easy sell at this point, what's the real benefits? Because, more of services are coming in. You got composability. What's the current state of the Marketplace? >> Yeah, you know, I think it's a couple of things. Uh, it's about selection and customer choice, so we've really grown the catalog, in terms of number of listings that are available and now more than 4200 listings in the catalog, and we announced three key features that we launched on Tuesday: AWS private link which enables SAS products to be run in a VPC. We announced Private Image Build that allows enterprise customers to run their own hardened OS underneath an image, and then we announced Enterprise Contract to reduce friction in the procurement process between large enterprise customers and software vendors. >> Okay, so I gotta ask, the AWS question: What was the working backwards document on this? Was it a main request from the customers? What was the main driver for some of these features because it sounds like they want to be cloud native, but, yet, they still gotta get that migration over, or was it something else, what was the driver? >> The driver was customer feedback. We went out, and we interviewed hundreds of customers over the last 12 months before we started building some of these features, and, without a doubt, they told us they wanted broader selection, broader deployment options, and to reduce friction around the contracting process, and then we just started building, and, over the course of the last nine to 10 months, that's what we've delivered. >> Awesome, all right, F5, you guys are in the Marketplace. You're partnered with AWS. What's your relationship with AWS, how's that going? >> Oh, I would say our relationship with AWS is fantastic. I mean, they're obviously the innovator in the Cloud space. Public Cloud is a strategic imperative for F5. They're at the vanguard of really the innovation of what's taking place in Public Cloud, and Marketplace is that fantastic medium to reach market, and, so, we really have the premise around meeting our customers how and when they want to be met. Marketplace is an excellent vehicle for us to do that, and we've enjoyed a lot of success with launch. >> How has your customers' consumption changed with the Cloud 'cause I can only imagine that, as they look at the mix of how they're gonna consume technology, they want some Cloud. How did you guys hone in on AWS? What was the real factor there? Was is acquisition of the technology? Was it the performance, what was some of the key things? >> You know, I think it's all about really reducing the friction in the process, right? Our customers are moving to the Cloud to have real-time agility and velocity in their business. What we get out of Marketplace is a fantastic set of options from a commercial construct. This solved the customer requirements. If it's going to be at development, we do it on a utility by the hour. When you start to go into production, we can do it in a subscription or a BYOL, so it's really about what application is there permanence and what's the best outcome for the customer, and we have all of that in front of us in multi-year agreements or otherwise leverage in this vehicle. >> So they're tailoring the products, basically. >> Absolutely. >> It sounds like customers are looking at this tailored model, whatever their needs are. They don't wanna be forced into a. >> Correct. >> Certain use case, they can just kind of mix and match. >> Yup, absolutely. >> Yeah, Barry, you know, think networking security have been spaces that I've seen really exploding in this ecosystem over the last couple a years. It, building off of what John was say, I mean, how much of it is custom stuff? You know, things that they're coming, working with Amazon versus just, you know, oh, it's the everything store where I can go get pieces? >> Well, we work with each vendor that lists in the catalog. We have a SA team, Solution Architect team, to work with them on the optimal architecture, be that an omni-based, API-based, and SAS-based, and then we give that vendor and their product development teams the ability to price those products in utility consumption model metered, for example, on the amount of data or band-width consumed, multi-year contracts that are publicly priced or negotiated behind the scenes. So, both in the innovation and the engineering and how the customer actually deploys the product, we innovate on pricing and consumption models to match those deployment options, and we give vendors, all vendors, that enter the catalog, whether they're open-source or commercial products, like F5, the option to use all of those features. >> Yeah, Chad, I think back to, you know, there was the wave of like software, you know, happening kind of networking and secured and everything, but, you know, you've always been in kind of the application delivery portion of this. How is Cloud accelerating your customers' journey and impacting how fast you need to change inside at F5? >> Yeah, that's a great question. I think that because Public Cloud is such a fantastic vehicle for our customers it was really customers-focused, right? So, when you work back from what the customer wants both in terms of how you orchestrate, how you automate, and then with the commercial construct is then they can use it in a best-fit application, and that's really the grounding point for us, and, when we get friction, any time you have a new medium there's going to be friction points and learning points. We've worked in concert with AWS, Marketplace in particular, about solving these ways, whether it's in private offers or custom negotiated offers specifically for customers to meet their needs from an economic and a delivery standpoint. >> I gotta ask the question 'cause it always pops into my head, especially at this reInvent, the pace of services being released, Lambda, Serverless, you can just see it coming. It's going to put more pressure under the hood for automation, that heavy lifting that's Dev Ops, as we know, right, so no new news there. The question is what does it mean for the Marketplace 'cause now you're gonna be under a lot of pressure to integrate a lot of these plumbing and or, abstracted away dev ops-like tools that developers don't wanna provision, so you have the automate so that seems like a challenge. How are you guys dealing with that? How do you make Lambda sing? How do you guys make this thing go smoother? >> Yeah, it's a really great question. I mean, one of the challenges that you get in, when you get into what I would say Cloud Sprawl, within an organization, is how do you maintain the governance and compliance of those workloads? And so we're really lookin' at it from that basis. We want to give as much flexibility into the model while still maintaining what was designed from the beginning, and so our customers wanna use the rules. They wanna have that portability into Public Cloud so they have the assurance. The underlying technologies are just the delivery vehicles, whether it's containers or Lambda or whatever in a server-less architecture, we're focused really on making sure that we have that ubiquity of posture across the asset wherever that asset is. >> Jeff: Makes your sources work together properly. >> Absolutely. >> Barry, what's the trends that you're seeing in the Marketplace? I mean, obviously, there's a lot of growth. Lot of data, and one of the things that I love about this reInvent is they're servicing this new playbook of, hey, use the data, your own data. We saw a new relic had a great report, Sumo Logic kind of report, that basically anonymizes the data, but they're using real data and Verner will talk about this at the keynote. What data can you share about the Marketplace that shows some trends that indicates or allows us to read the tea leaves of what's gonna happen next? >> Well, I think the customer growth stat that we shared, in terms of active monthly customers, we've gone from a hundred active monthly customers we announced last reInvent last year when we were here to now 160,000 active customers using the Marketplace, so we see steady growth. We see growth and adoption from the enterprise, and customers like Shell and Thomson Reuters, that we announced were part of Enterprise contracts on Tuesday, really beginning to think about using the Marketplace to go from traditional procurement moving to digital procurement model allows their IT organizations' dev ops teams to move much fast when pairing with services like a Kinesis, like an S3, like a Red Shift, when they're matching third party software with an AWS-native service. >> Jeff: Are you happy with things right now? Pretty much looking pretty good! >> I'm happy. >> Jeff: Middle of the fairway. >> I think it's been a fantastic show! (laughing) >> I'm happy, F5 has been a great partner of ours in the Marketplace, I'm a happy camper. >> Jeff: What's next? >> What's next? I think what's next for us next year is continuing to grow the Enterprise contract that we deployed, so we started with a small set of customers and vendors that participated to help us arrive at that contract that they both could use, and, I think that over the course of the next 12 months, we really need to think about the types of customers and vendors that enter that program. >> All right, Barry Russell and Chad Whalen with F5. Barry will be back on our next segment with another partner. A lot of partner goodness here. Amazon's ecosystem's exploding, and there's a lot of value to be had by all. That's theCUBE bringing you some content value on our third day live coverage. 45,000 people here this year at Amazon Webster's reInvent. More after this short break. I'm John Furrier with Stu Miniman. We'll be right back. (techno music)

(techno music) >> Announcer: Live, from the Moscone Center it's theCUBE. Covering AWS Summit, San Francisco 2018. Brought to you by Amazon Web Services. >> Hello everyone, welcome back to theCUBE's exclusive coverage here in San Francisco, I'm John Furrier with Stu Miniman. This is Amazon Web Services, AWS Summit 2018. We got two great guests, Dave McCann the vice president general manager of AWS Marketplace and Service Catalog and Matthew Scullion is a CEO of Matillion, partner of Marketplace. Guys thanks for coming on good to see you again >> Thank you. >> Thanks for havin' us. >> Alright, so Dave, Marketplace is doing phenomenal, well, we talked with Lew Cirne from New Relic at Reinvent, and was talking about how successful they've been on the Marketplace, so clearly it's working, 170 thousand active customers on stage, we saw the keynote today, What's going on with the Marketplace? Take a minute to explain how the Marketplace is set up now and how it's evolved to this point. >> Thank you, so, great to be back. Can't believe it's four months since Reinvent. So Marketplace is a digital library, of software. You know the cloud is helping our customers innovate faster but you need to be able to innovate with the software not just with the compute and the storage, and so our purpose is to stand up a digital library of software for our customers to subscribe and launch, and we're continuing to grow on multiple dimensions. We've deployed out to all the new standard regions, so we're now up in Korea, we're clearly in LHR so in all the standard regions we've fit Marketplace. And then we continue to expand the library of software, so more and more companies, like a Matillion, publish into the library. We're over 1,300 software companies now, and we're over 4,000 different software titles and you know, our customers show up, they're typically a developer or a manager, with a project with a budget, and they're looking for the best tool that they can keep the project going on schedule. >> And just to make clarification nuances, I know it's commercial and is there a public sector version or is it all one? >> That's a really good question. We actually launched Marketplace last August in our GovCloud Region, so we do actually operate a GovCloud Region for our US government customers and we actually offer a separate Marketplace for the US intelligence agencies. So that's the library of what were doing and we continue tho grow and as Werner said this morning, bunch of new stats. >> The business, the business model obviously people see, um, two things happening. I want to get your reaction to, one is Werner Vogels laid out how services are going to be laid out all over the place and it's not, you know, monolithic as he says. They're all a bunch of services. Scale is a huge factor in enabling that, and also the business model changes are going on, we're seeing people be successful. How are your customers and partners using Marketplace today, how does it work, I mean, do they just call up and say, "Hey! Dave I want to get in the Marketplace." I mean what, I mean, obviously downloading services, enabling services makes sense. How is it working? Like what do they do? Like what's the model? >> So, let's start from the customer and walk backwards. You know Amazon talks about working backwards from the customer. So typically in a company will be a set of developers who are building on us and they'll have a set of architects very often they've a few cloud architects and across the set of software, networking, security, database, dealer analytics, BI, DevOps, all the way to business apps. There'll be a set of architects saying, "What's the best software as we move to the cloud? "Do we bring what we had, or do we buy new?" So the architects are recommending to the developers, "Hey, for your project, here's a good tool." So in the buyer, architects are recommending, and then the developer gets told you can use these vendors. On the seller side of things, software companies like Matillion have to decide "How do we reach the AWS customer?" and then they have to package up their software, put it in our library, and make a bunch of decisions that he can talk about, and then they make it available. >> Yeah Dave it's been interesting to watch kind of the maturation in the Marketplace. It's been large for a number of years but how your partners have changed how they package software, last year there was a discussion that you know, it changed how billing is done, so that Amazon can help make it just seamless for customers, whether they buy service from, you know, AWS or beyond. You know, give us, you used to talk about the customer and the partner, walk us through a little bit of that maturation and how that's that's gone. >> So, we're a six year old service and so we you know we're agile, we keep releasing features. So last year in April, at San Francisco, with Splunk we launched something called SaaS Contracts, which was a new API for SaaS vendors and now we have over 300 SaaS companies in the last year that have developed to that API. So a software vendor can decide they want to deliver as a software package or as an AMI so it could be SaaS or AMI. And we also provision APIs. So we're constantly introducing flexibility on how that vendor can price and package and the more we innovate, the more software companies use our features. >> Yeah, I'm sure you get asked, you know, what's the concern, is there concern, from some of the SaaS players that, "Oh, I'm going to go in there, "I'm going to price and package the way Amazon does, "what's to stop them from just kind of "duplicating what I'm doing and becoming a competitor?" >> You know, that question comes up a lot, and you know look, the software industry is $550 billion. It's growing at 6% a year which is $30 billion and AWS all late last year did about $18 billion. So the software industry is growing by an AWS a year, and the reality is there's so much innovation going on that whatever innovation we're doing, you know, there's lots of room for other software vendors to innovate on top of our stack, 'cause we live in an expanding universe. >> Stu and I always joke, it's like so funny, we look at the, we watch all the cloud, of your competition, you Google Microsoft and Oracle, IBM, whatever, and they all quote numbers. If you factored in the ecosystem, in your number, the cloud revenues would be, I mean trillions. So you know, you guys I know you don't include that, in the numbers and like Microsoft does put Office in there, so it's kind of apples and oranges and so you know, Matthew I want to ask you, 'cause you're a partner. You're doing business on that, so, this is the formula we've been seeing that's been working where, the ecosystem growth, rising tide floats all boats, clearly that's Amazon's strategy. And they're opening up their platform to partners. So talk about what you guys are doing. First, take a minute to explain your company and then talk about your relationship to the Marketplace, and how that's working, and the relationship, how you make money, and the business model behind it. >> Yeah sure, and thanks for the question and for having me. So first of all Matillion, we're a software company, an ISV we make cloud-native data integration technology, purpose-built for this new generation of cloud data warehouses. For us that's Amazon Redshift, it's also Snowflake, and we sell both of those products on the AWS Marketplace, So customers are using us any time when they want to compete with data, so drive product development, or service their customers better, or in fact, become more efficient in the way they run their IT infrastructure. Perhaps migrating an on-premise warehouse into the cloud. So we developed that product through 2014-15, and we were looking for a route to market. Being honest, originally we were going to set it up as a SaaS business, and I saw a pitch from one of Dave's reports, a guy called Barry Russell, talking about AWS marketplace. We're like, okay here's a platform that's going to allow me to deliver my software anywhere in the world to any AWS customer pretty much instantly. More to the point, it's going to deliver my customer a really excellent experience around doing that, from a performance point of view, my software's going to go to go into their VPC sat right next to their data sources, in their Redshift cluster. From a security point of view, that question, very important in data integration, just taken totally off the table, so inside that firewall inside their VPC and of course super convenient and simple to buy. You just access AWS Marketplace, pay with Genuine Cloud Economics by the hour and stand it up pay a few AWS bills. So a really compelling way to deliver the software. >> Was there a technical integration required on your end? I mean like, there's some clients that are born in the cloud Amazon, some are, have built their own stuff. Do you have to, I mean, where are you guys fit into that? One, are you using Amazon? If not, was there any integration piece that you had to do? And if so, what was the level of work required to integrate? >> Yeah, and to be honest, I think this is, you know, the key question on how to be successful selling in this this kind of landscape of public cloud vendor marketplaces and, and the public cloud. So, I mean we're a born on AWS and in fact are born on AWS Marketplace products, and that intersection of product engineering with the route to market, and it's not just the software, it's also the things you surround it with, like great quality content, online support portals, videos, a really great launch experience, that means you're going to be clicked to running our software, commercial-grade ETL tool in under five minutes, free for the first 14 days and then by the hour billing, you know, there's a lot of different angles that go into that and you've absolutely got to be thinking about it. Other people are being successful just kind of sticking their products on the Marketplace and using it just as a billing mechanism but I think for us one of the reasons we've been able to drive great customer resonance and growth, is having that intersection of engineering, content and the Marketplace, together. >> Matthew I wanted have you talk to me a little bit about Matillion, 'cause when I think about kind of customer acquisition, you know Data Warehousing Market's been around for a long time. Redshift's been doing phenomenal, I mean for a while it was the largest, you know, fastest growing product in the AWS you know, portfolio. Being only through the Marketplace, does that, you know, how does that help you get customers, how do they learn about you? Do you ever worry about, like, oh well they just think I'm an Amazon service? Maybe that's a good thing. You know, I'm just curious about kind of that whole go-to-market and relationship with the customers being, you know, super tight, with AWS, you said Snowflake's in there too, so yeah, I'm just curious about that dynamic. >> Yeah, I mean the, the AWS only service thing that historically was a pro and a con. So back in the day we were just Redshift. We're now a couple of other data warehouses as well, you mentioned Snowflake, that's quite right. So that's allowed us to kind of move up the value chain with our customers and give them some choice, which they wanted. Yeah, I think in terms of the go-to-market economics, I mean, we all say this, sometimes its glib, here I think it's authentic. You want to start with what's best for the customer, right. And so we're delivering with genuine cloud economics. Our product starts at $1.37 an hour and yet it'll scale to the world's largest enterprises, and if they don't like it they can turn it off. Typical SaaS products, you're actually signing up for 12 months. So you're not that focused on keeping your customer happy for 11 of those months. Me, I need to keep that customer happy 100% of the time, because he can turn it off any time he likes. >> Yeah, yeah, I always wonder sometimes as an analyst, you know, should it be called a SaaS product if I'm signed into a year or multi-year contract. >> Yeah, so really interesting dynamic of our business is our entire revenue drops by 15% Saturday, Sunday, and it's cause people are turning off dev instances. They come back on Monday morning. Now, as a CEO I could worry about that and say, "Where's my 15% gone Saturday, Sunday?" Actually I'm delighted, 'cause it means my customers are only paying for value they're getting out of the product. >> And then, so about the business model, I wanted to drive into that. I want you to explain and give some color commentary to what your choice was if you didn't have the Marketplace. Hire a sales force? That's going to cost you some money. First you got to find people. >> Yeah. >> Push it to about a thousand customers, run ad campaign. Did you guys do the analysis and say, "Whoa, this is like A,B"? >> Well, so when we launched this product, we were a 12 man company, so I'm not going to say that we rolled in a management consultancy to work that stuff out for us, being honest. But we took a view. I think there have been two big things. First of all, in those very early days when you're trying to find some product market fit, you're trying to find some customers. That global reach instantly delivered by the Marketplace is amazing. So I'm from Manchester UK, apologies for the accent, that's where a good part of our business is still based, although we have offices now in New York and Denver and Seattle as well. If you drill a vertical hole downwards from Manchester, UK, you pop out in Melbourne, Australia that's the first customer we picked up on AWS Marketplace, still a customer today. So in those early guerrilla days, >> No travel, instant global footprint. >> And they were spending money with us before we spoke to them for the first time as well. Now today, we do have a sales force, of course, but it's not a sales force that's closing big deals. They're being value-added, and additive, they are escorting customers through the buying journey, and we've got just as many pre-sales guys as we have sales guys just helping the customer 'cause that's what we want to do. They're going to use the products and consume it 'cause it's easy to do and to turn it off. >> So you focus the high-value activities with the high value employees on the right customer mix, while the rest is just kind of working through the cloud economics. >> Yeah, that's it. Hey, we have to do marketing, of course. We're here doing an event, it's going great. We were lucky enough to be mentioned in the, in the keynote this morning, so our booth's been swamped, >> And now you're on theCUBE, you're a CUBE alumni. >> Exactly. >> The world's going to see, going public next. >> One of the things we do on the marketing front, is when you come into Marketplace and you talk about how we onboard a seller, we have a whole team who we call category managers and so there's an expert over each subject area such as data analytics or networking or security and we not only give them the engineering advice on how to package, on how to onboard and by the way we didn't curate manage so we publish his AMI and he tells us what regions he wants it to go to. And so he may say, clone to Korea, but I don't want it over here, so the seller could decide geography but then we lay on a business go-to-market plan and we actually develop a joint go-to-market. And so we'll do co-marketing with our sellers, and they can choose whether it's by country, by territory, is it large enterprise, is it small business. So there's a set of business advice that we lend. >> So you apply some best practices and some market intelligence on the portfolio side. >> Exactly. >> And the sector. And then we have all the data right? We provide these guys with a real time API they're pulling data off the API every day and what's happening, and so were monitoring that data and everything's measured so this is a digital channel. And then of course the ultimate thing we do when I ran my last SaaS company, we provide the billing platform. And so the buyer comes in on the AWS account, uses the AWS account, so now we bill on behalf of, we do the collection from the buyer, and then we disperse the funds back to the vendor. >> You're making the market for 'em, and they're still doing their blocking and tackling. >> The customer gets a really good experience on their bill and then the customer spend actually becomes visible in Cost Explorer, so we've tagged everything, so we also tagged it so that it's "this is Matillion", and so the customer knows "I'm spending X much on, "X amount of dollars on Matillion on that stack." >> So you're a sales channel and you're adding more value, Matthew, if someone asks you, just say I say, "Hey Matthew, look I got a great product and it's kickin' ass, I want to get into Marketplace" what do I do, what advice would you give me, what would you say? "Oh, I'm skeptical of Amazon's Marketplace" or, "Hey, I really want it". How would you talk to those two tubes of audiences? >> Yeah, so I think the first thing, and we alluded to it earlier, is I think really hard about that 360 experience of packaging the product and how it's launched, that's engineering in the software itself. You need to think about how the customer's going to interact with it, but you also need to clothe that software with great quality content and support, and finally the right type of go-to-market motion around that. And one of the big benefits for us in terms of the AWS Marketplace has been the efficiency of the sales model. So we've got really efficient go-to-market economics and also the types of customers that we sell to and we've, for a company of our stage, you know, we're a post series B, high-growth software company, but for a company of that stage, we are, have a disproportionately high number of global 8,000 global 2,000 customers, that are because Marketplace takes away the barrier of selling into those guys. So as advice on how to be successful, I'd focus on that packaging side and advice as to why to do it, you've got instant worldwide reach into the traditional stomping ground of the the startup other tech vendors but also into the world's biggest software users. >> A virtuous circle, faster to the customers, at a lower cost structure, you still make money, everyone's happy, sounds like a, the Amazon business model. >> It is. >> Great customer experience, great selection, and you know, adoption by the customer, and then continued innovation. Another thing that we do is we have a portal where these guys are publishing new versions, so it's not a one-and-done model. So as these guys update their models, their engineers just publish into seller portal and then that new version comes in, and then we publish that new version out to the customer. So there's a refreshing of the AMI so the latest version is up there. >> And Werner's keynote today really highlighted it's not just about developers anymore, it's about the business teams coming together, pushing stuff real time to the Marketplace is now a business ops model and it's really kind of coming together with entrepreneurial traction and the footprint's a gateway to the world. You have a world footprint. >> Yes, it's 21st century software distribution and really the buyer gets the ultimate choice and you know the buyer can go for an annual contract or for by the hour, so economically, lots of choice. >> Alright, so I'll put you on the spot to end this segment. I'll be a naysayer. Dave you got competition out there, what, what's in it for me? How do you compare vis-a-vis the competition? >> Dave: You're a software vendor? >> Yeah. >> As, you're playin' the persona? >> Yeah, I'm a software guy, I'm looking at marketplaces, you know, why you guys? >> You know, you have to go where the customer is, ultimately you have to decide who your customer is. You know, Werner talked this morning about the tens of thousands of companies that are up on AWS, and so, if I've got 170 thousand buyers showing up on my marketplace, and they're intentional on their budget, and you're a software vendor you get reach, and given what Gartner says on where we are, on fulfilling share in cloud, is where the customer is. >> And if you're a service too, software service APIs, it's even better goodness there. >> Yeah we have thousands of consulting partners also use Marketplace as a library so if you're an SI, and we have tens of thousands of SIs, those SIs also view Marketplace as a good place to find software for the project. >> You've been in this business for a while. I mean, we've always talked about this on theCUBE, I want to ask you real quick, I mean more than ever now, ecosystems and communities are paramount, priority. Especially with this kind of dynamic 'cause that ecosystem is that fabric to enable, you know, go-to-markets that are seamless with economic scale, visibility into the numbers, what's your reaction when someone says that comment to you about community and an ecosystem? >> Well you know, an ecosystem is a collection of software companies that inter-operate. And the reality is that our customers are rewriting all the software. The world is rewriting its software portfolio. You know, a large customer I went to see recently has a thousand software applications. Now as they move them all to the cloud, they're either rewriting or they're modernizing, but as they rewrite them, they're going to use distributed services, they're going to use micro-services. And so they're refreshing their entire stack. >> Yeah, it's a re-platforming of the internet. >> Transformational. >> Dave McCann, who runs the Marketplace for AWS. Really kickin' butt out there. Congratulations on all your success, and I know there's a lot more to do, I wish we had more time, I'd love to do a follow-up with you and find out what's going on the Marketplace. and Matthew a partner, congratulations, hyper-growth, hittin' that trajectory. Congratulations, we'll come visit you in Manchester and then we'll drill a hole, we'll go to Melbourne right down there. Appreciate, thanks for coming on theCUBE, thanks. >> Thank you. >> I'm John Furrier and Stu Miniman. More live coverage after this short break. We are in San Francisco, live for AWS Summit 2018. We'll be right back. (techno music)

live from Las Vegas it's the Cuban covering AWS reinvent 2017 presented by AWS Intel and our ecosystem of partners ok welcome back everyone we're here live in Las Vegas forty two thousand plus people maybe forty five huge numbers here at AWS reinvent twin seventeen Amazon Web Services annual conference wall-to-wall coverage our third day I'm John Ferrier the co-founder of silicon Anglo what's two Minutemen we're here with Andy Jesse the CEO of Amazon Web Services the Andy crate to see you again great to see you thanks for having me on graduations we had a great chat a week ago you and I sat down for breakfast and you kind of laid out you kind of laid out with a plan for the show here but I you kind of left a lot out of this you hold it back I've know every three hours from I thought I had a great story you needed the floor our breakfast oh damn it's good what an announcement I mean your keno two and a half hours I mean the longest keynote I've seen just non-stop announces you went right into a no preamble right into the announcements how many announcements did you do like fifty plus or what was the number I think there were 22 news services and features announced in the keynote I did alright so you gotta look back now as it's coming down to an end to reap the parties tonight what's your take I mousey you're absorbing it still he's still kind of like numb pinch me moment what's what's the vibe what are you feeling right now you know it's been a fantastic week and this is our favorite week of the year just having the chance to spend the week with our entire community and I think that it's been a very successful week in terms of what we were trying to accomplish which was it's always first and foremost of learning and education conference and I think that people feel like the array of sessions they've been able to go to and what they've learned both about the services altogether the new services we announced and then just especially what other peers are doing on top of the platform I think has been really valuable and I've had a lot of customer meetings over the last few days and the conversations have been so excited you know people saying I just can't you know you guys already had so much functionality but I just can't believe the amount of innovation and capability the two guys just released over the last couple days and several people said to me you know how to I knew I was having a meeting with you so I had a list of things I was gonna ask you to to deliver and during your keynote I kept going check check check so they're a really positive excited conversation talk about the flywheel what's going on with you guys right now I use that term kind of a pun intended because you've got some flywheel going on as you add more services I detailed in my story after we met I teased out this is a competitive advantage for you you just listen to listening to customers but you're putting out more services there's leveraging those services so it's good for customers but I worry about the complexity and they might worry about the complexity how do you talk about that and how does your team address that because I mean tsunami of services yeah well you know I think that the first thing to remember is that simply because we have a lot of functionality doesn't mean that customers have to know about every single service and every single feature they use what they need when they need it and they don't have to pay for it up front and so you know one of the reasons we release so many things during the area of over 1300 services and features this year alone and in about 70 new releases just at reinvent this week is that when you have millions of active customers you have lots of diversity in those customers you know lots of different businesses lots of different priorities lots of different needs and so you know even in the set of customer meetings I've had this week the first question I asked every single customer i sat down with is what are your impressions what are you excited about they were some who said I can't believe I'm so excited about sage maker it's gonna completely change the accessibility of doing machine learning in my org and some said oh I really really wanted those language application services and machine learning others were totally focused on the multi master or aurora on the global tables for dynamodb and the graph database and then still others said you know I love ECS but I've wanted a kubernetes option and then now that I don't even have to manage containers at the server level and I can manage the task level is what I'm excited about still others who are IOT customers that's what cared about so we have so many customers it was such diversity in their businesses and their priorities that they all have a bunch of needs keep on delivering on that and I want to get your reaction something that we've been talking about in the cube all week which is well I've been pushing its due and I've been kind of debating it but we see a clear path towards a new renaissance in software development and invention and it comes down to some of the things that you guys have enabled we saw a lot of go get excited by some of the deep learning I'll see lecture for business and two other things it's easier to do stuff now the application layer because you don't have to build the full stack so we're you guys are talking about a reimagining architecture that was Vernors keynote it's all kind of pointing to a new Renaissance a new way to create value what's your reaction then how do you share that the customers because it's kind of a new new model yeah well I think that this has been happening now for you know the last ten years and I think that people aren't building applications for the most part the way they used to it you know if you if you're building new applications and you're trying to build all the hosting software and all the storage software and all the database software at all the messaging and queuing and analytics and and machine learning you're just wasting resource because because when you when you have the option of using 120 services from a platform like AWS that has thousands and thousands of people working on it delivering on average three-and-a-half new features a day that you could choose to use or not it's so much faster and so much more empowering to let your builders take advantage of that platform you get from idea to implementation and orders of magnitude faster using the cloud and that you know what keeps happening is we just keep adding more and more capabilities that allow people get now even the marketplace we just had Barry Russell on and you go now are bringing a global reach opportunity so not only can you help them get to market faster with coding and building value this growth so it's not just parking the marketplace and hope that something happens they're taking advantage of that growth I think it's a really important point it's it's not just a set of services that we're building but are thousands and thousands vis--vis and SAS providers who are also building products on top of AWS where their business is growing by leaps and bounds I mean one of the interesting things about the marketplace I don't know how much you guys have talked about this in the past or currently is that most if you talk to most software buyers they hate the process it you know it's just how long it takes the negotiation process most the software sellers also hate the process and so if you can find a mechanism which is what we're trying to provide with the AWS marketplace where buyers and sellers can complete those transactions and find each other so much faster it totally changes the world of buying software and consuming software Andy I came in this week pretty excited to look at the adoption of server lists and you know congratulations you've impressed a lot of announcements talked a lot of customers the thing that probably impressed me the most is it went from being kind of just lambda to really integrated all the service it's a much more holistic view but you made a comment that I that a lot of us in the community kind of you know poked at a little witches if you were to build AWS today in 2017 you would build it you know on you mean Amazon yes sorry Amazon on it today now I've talked to startups that are building all server list but you know it was on D gigantic company and you know I talked to Tim I talked to the team a lot of things I can't do so is this a goal or you know it just being kind of kind of the future or you know do you feel that I can put you know a global you know company of your size you know built with yeah yeah it's a good question and you know I really the comment I made was really about directionally what Amazon would do you know in the city in the very earliest days of AWS Jeff used to say a lot if I were starting Amazon today I'd have built it on top AWS we didn't have all the capability and all the functionality at that very moment but he knew what was coming and he saw what people were still able to accomplish even with where the services were at that point I think the same thing is true here with lambda which is I think if Amazon we're starting today it's a given they would build it on the cloud and I think we with a lot of the applications that comprise Amazon's consumer business we would build those on our server list capabilities now we still have plenty of capabilities and features and functionality we need to add to to lambda and our various serverless services so that may not be true from the get-go right now but I think if you look at the hundreds of thousands of customers who are building on top of lambda and lots of real applications you know FINRA is built a good chunk of their market watch application on top of lambda and Thompson Reuters has built you know that one of their key analytics apps like people are building real serious things on top of lambda and the pace of iteration you'll see there will increase as well and I really believe that to be true over the next year or two and you talked a little bit more about competition than then I'm used to hearing in the keynote I mean there's been some pokes at some of the database stuff in that migration but you know when it walked talked about there was this colorful bar chart you put up and you had some data pointing about that you know in your market chairs growing your continuing growth you know how do you look at the market landscape what are people you know still getting wrong yeah I think that I don't think that we actually talked that much more or less about competitors in the keynote there was a slide that had a color chart that may have been the only difference but you know for us it's always about you you could spend so much your time trying to look at what others are doing and wondering what they're gonna do the reality is if you don't stay focused on your customers and what they actually care about you know you're wasting your time about mobile and business years ago Alexa for business is a new thing voice we heard from Berner today it's a new interface so we were talking on the cube it's the first time we're kind of talking about this constant maybe we're the first ones to say it so we'll just say it voice first strategy mobile first created a massive wealth creation iPhone new kinds of application development voice has that same feel voice first interface could spawn massive innovation yeah what's your view their reaction what do you guys talk about internally at Amazon in terms of a how voice will take advantage of all your scale yeah well I strongly agree with what you heard Verner communicate in the in his keynote today which is just you know when we first had phones that had apps and you could do all kinds of things by tapping on the phone like that was revolutionary but then when you experienced a voice app it makes tapping on your phone so circa 2010 and so I think that the world will have a huge amount of voice applications it's gonna be people's preference and in part because it's just a more natural expression than actually tapping and trying to click and type things and so we we had so many customers almost a good chunk of our enterprise meetings that we have throughout the year one of the things customers want to talk about is how can I actually be involved in using Alexa how can I build skills for Alexa and then over the last few months that conversation has started to turn to hey you thinking about making Alexa more useful inside of businesses and for work and so there's so much applicability I think that voice first it's gonna have the same kind of impact or more than the mobile trend or I think it has a chance to have as big an impact I mean all the devices have to continue to evolve and you can see that at Amazon we're continuing to build all kinds of diverse devices but I think voice is gonna be a major mode of how people interact with handi 42,000 people I don't know how you top it congratulations on all your success and appreciate the growth and you've done with the company congratulate breaking chicken wing contest to Tonka yeah we said a Guinness I what is that about come on tell us about this door well I Tatanka is a buffalo wing eating club that we started in Seattle back in 1997 and we go for wings we used to go every Tuesday night for wings and we have membership standards you can become a regular member if you need 10 wings with five pasty wings a pasty wing is you know when the wing sauce sits the room temperature and it kind of congeals it gets Spacey so it's five wings wrapped in that pays platinum membership is 25 wings plus five pasties then we started having eating contests and we call it a tonka Bowl and so when we start a reinvent we very much wanted to have a conference that had a lot of interesting fun quirky events and one of the ideas we had was we said well let's try an eating contest and the first year we tried it we did it a lunchtime down in the basement and nobody wanted to have an eating contest at one o'clock in the afternoon in the middle of rain BAM so then we moved it to Lagasse Stadium here in the Venetian and people started coming so this year we had two groups of about a hundred each one at Lagasse won at the MGM and they they did a 30-minute round and then the top five wing eaters in each venue came back to one place for a second round and the winner apparently ate a cumulative total of 59 wings there were three thousand eight hundred and fifty-seven Wings consumed in the contest about as many features as Amazon has released since the first time event sounds like to continue the momentum and you're eating away at the competition congratulations Andy jazzy CEOs on Web Services the cube thanks for coming in man and I appreciate it guys thanks for being here appreciate it live coverage here from Las Vegas Amazon webster's reinvent annual conference 2017 s the cube I'm John Force to Minutemen be back with more live coverage after this short break [Music]