>> From the Cube studios in Palo, Alto and Boston, connecting with thought leaders all around the world, this is a Cube conversation. >> Welcome to this Cube conversation. I'm Paul Gillin, Enterprise Editor at SiliconAngle. We've been talking a lot about cloud native on SiliconAngle lately, and my guest is someone who had a seminal role in defining the the principal architecture, some of the foundational technologies for cloud native applications. Ben Golub is the CEO of Storj, a company that has a really interesting new approach to storage management that we'll talk about in just a bit. Ben is probably best known to many people as the former CEO of Docker, which pioneered software containers and was one of the fastest growing companies in Silicon Valley, he's great. Ben, thanks for joining us, feel appreciated you being here today. >> Thank you, it's great to be here. >> So, let's get into the question of cloud native is a theme that we're focusing on right now. How important is it for organizations you believe that are moving to the cloud to choose to re architect around cloud native principles? >> Well, I think it's, I mean, two points. First of all, I think that the cloud native is sort of a spectrum. And for many people, there is a point along the spectrum that makes sense. At the far end of the spectrum is applications that are deployed on a massive scale. They're components to thousands of microservices, heavily orchestrated with things like Kubernetes, scaling up scaling down, and for many organizations, they don't need to go all the way there to get real benefits. And maybe the related thing is that I think, for organizations, there's absolutely, for most organizations, there's value in moving along that spectrum, but they should be thoughtful about where it is that they're going, and why they're going there. >> Either or thing and they applications can live along the spectrum. you submitted some comments recently for an article we did on this topic and among them you said that some applications may make sense being containerized or Dockerized but not being orchestrator with Kubernetes. Can you give an example of something that meets that criteria? >> Sure, well, I can I think that almost all applications can benefit from running on more cloud like infrastructure. There's certainly value in having infrastructure that that scales up, or that scales out there, where people are able to sort of dynamically use resources and not have it have to rely on big iron. But in terms of the applications themselves traditional applications can run well in cloud environments provided that some steps are taken. And often for many organizations, the first step with a traditional application is simply to containerize your Docker engine. That gives a lot of benefits including, ease of migration, greater ease of adopting things like CICD, and you don't necessarily have to take all of your traditional applications, break them into lots of micro services, start orchestrating them with Kubernetes on day one, for some reasons, case may never make sense because they're not going to be run at massive scale. >> Many people assume that containers and cloud native architecture are inextricably linked. Is that your opinion? >> Well, so I think that cloudy infrastructure tends to benefit from from containerization. But really, it's more of an application question. If you are breaking your application or you're writing applications that are composed of lots of different services, almost inevitably, you want to have those services in containers so that they have clean interfaces between them. And so, that you can do the things people want to do with cloud native, which is, make changes to your microservice A with a small team and do so rapidly without unintentionally screwing up microservice, B, C, D, et cetera. And Dockers in a containerization, among other things, provides that nice clean interface. >> All right, how have you seen I mean, since you left Docker three years ago, how have you seen the container technology evolve? What do you think are some of the most important evolutions we've seen in container technology since then? >> Yeah, so I think, what has been really important for us to see that the community continues to grow. So, once the Docker community continues to grow, there are now lots of other communities around it the cloud native computing Foundation, Kubernetes. And I think what you're seeing is really the maturing of this technology. So that applications can be written in a cloud native way much more more easily. The barriers to making an application cloud native really come down, but also the potential for running applications and really massive scale have have have increased and there are certainly a number of interesting things that have happened in the storage space in terms of persistent volumes. things that have happened in terms of service technology service measures, like STO these are all really great examples of how the community is filling in around containers. >> We've heard a lot about the benefits of portability that come from using containers. But being portable can involve some trade offs, because you have to give up some of the native functionality of branded cloud platforms. Do you think the goal of multi cloud is overblown? >> I think there is real value in being multi cloud. And I think that while you know, the larger stock traders have provided great services, it is in their names, of course, we're trying to get have all of the workloads run within their four walls. And I think for most organizations, locking is a bad idea, regardless, right? We're in a distributed world, most people want to be able to run their applications at scale in a distributed way and they want to be able to take advantage of spare cycles and the most efficient way and concise way of doing so. And so, having locking, I think is a bad idea. And for most organizations, the investment to become portable, while not trivial pays off in the long run. >> How about of the cultural issues is something that you also mentioned in the comments you contributed to us earlier, we hear often that the biggest impediments are not technical or even skills but actually changing the culture to adapt to a cloud native way of building applications. How should organizations prepare for that shift? >> Well, I mean, I think they should recognize what those differences are going to be. And if you're writing, the traditional method was you write a large monolithic application, because it's so big and complicated. Generally speaking, people follow sort of a waterfall procedure. They have large teams working on it, and you update the application once or twice a year. The cloud native approach is let's write applications that are composed of lots of smaller services produced by smaller teams that move very rapidly. And a lot of the testing and the deployment happens in a very automated way. And the cultural barriers are pretty large. I think most people are happy at the end of the journey. But there's a period in between where things are difficult that you're, you're breaking glass as it were. So, I think for a lot of large organizations, the approach that often works best is to have a few sort of isolated, Greenfield application approaches, where you have a small team that is sort of proving out and becoming good ambassadors for doing things in cloud native way. But there's also a an evolutionary way to bring the older applications along there for many organizations is really helpful. That doesn't have any running head on it. Other cultural issues with the traditional application. >> So, break them up into teams and have different teams at different stages of evolution. >> Right, and so, I think you can have a small advanced team that is working on new applications at Greenfield, cloud native way. But then the transition path for the teams that are working on the older application, traditional applications that were not initially architected in a cloud native way is to break them down in an evolutionary way, first dockerize, containerize, the traditional applications, then maybe break them down from a monolith into, say, three tiers, each of those tiers being containerized. And then potentially pull out one of those services if it's a common service across all the applications and start using that and the process. I think we find organizations get the sort of muscle memory around doing things in a more continuous way in a more agile way. And they get experienced with tools like CICD, Docker, Kubernetes te cetera in a more organic way. >> Do you find that people who come from the traditional waterfall development background eventually can't make that shift? >> I think some can, there are pluses and minuses. But I think that most organizations find that as they get more agile things that used to be very difficult become a lot easier, right? So, rather than having big masses of code that needs to be rewritten and changed, you change something in one area and it breaks things and unexpected way in another area. Right, then you're trying to get large teams of people to sort of agree on things which we know is not the way the world works. When you get to smaller teams working on more atomic pieces of the code with clean interfaces between them, and can iterate more rapidly without having unintended consequences. For most organizations that not only makes them faster, but it gives higher quote, quality, safer et cetera. >> Another topic we hear a lot about today is application modernization, what does that mean to you? >> So, I think for me application modernization means that you're re architect, you're making the application itself more cloud like, which doesn't mean that you made it full scale cloud native on day one, right? But that you, for example, taking a traditional application and Docker rising, or containerizing it, just containers in the monolith actually gives some real advantages. And that then sets people off to say, let's not only take the advantages that we now have in terms of portability, but let's start exploring the advantages that we can get from having more frequent deployments or more automated testing. And so, really it's modernizing the application but also modernizing the environment around it and in the culture for how you build and deploy applications. >> Let's turn to your current venture Storj. You've been CEO there for about two and a half years now. Very interesting decentralized approach to storj using blockchain. Just tell us quickly how you're re imagining Storj? >> Sure, sure, well I mean for, for of course, most of computing history storage was done, like people buying their own disk drives and then storing data on it. And if they failed or got lost as a problem, or if they had to buy too much, I was expensive. Then we move to centralized clouds where you were storing data on drives that one organization was running, we started taking it a step further, where we built a storage service. But we don't run your own any disk drives. We're sort of like ABNB, for restaurants, right? But we've gotten 10s of thousand people around the globe. Generally, data centers who have spare capacity enabled them to rent out that spare capacity. And we're offering our customers a way to do storage that is much safer, much more private, faster and far less expensive, than with the traditional cloud. >> Certainly intuitively, it would be less expensive. How is it faster? Well, it's faster for a lot of the same reason the the internet, if you will is faster than the traditional approach was landlines, right? We were able to take advantage of parallelism, right? So, we break every file up into a large number of pieces, which are then distributed across the network. And so, first of all, we don't get slowed down. If some of the drives are slow, or they happen to be in an area where there's network congestion. It doesn't slow down. We also end up having, generally speaking, have our data much closer to the edge. So, if you're in Kenya, and you're viewing a video that sort of serve from our network, chances are the data is getting served from graduate cluster view rather than driving or in Kansas. >> It sounds like there are some sort of cloud native aspects to what you're doing. In fact, are you adopting some cloud native principle on-- >> Well, so kind of we put our service in the cloud native way. But it really takes the cloud native notion of distribution and takes it even a step further, which is that things are highly decentralized. And so, we built our service in a very particular way because we are not directly controlling the disk drives, so, we basically use algorithms and math to make sure that we're resilient against any failure. and things are done in a highly automated and scalable way so that there's really no single points of failure. And there's infinite scalability, which is which is really the goal of cloud native, but we take it a step further. >> And blockchain is what knits us all together, right? Well, it tracks the location of all the all the data. >> I don't know, cause actually none of us 'cause we use blockchain for certain purposes, namely, compensating the people who are running the drives. So, they do cryptographic proofs to prove that the data they have, they shouldn't have to get compensated for running it. But then we've tried to use a large range of different kinds of peer to peer technologies. And even frankly, some very cool very old technology like racial coding which is on the on the Voyager spacecraft to make sure that it all fits together in a way that's safe, secure, private and super fast. >> All right, there other applications of this technology have developed be on Storj? >> Well, so we are working on decentralized storage. Other people are out there working on decentralized computing, where the application can be written and run on. Sorry, can be run on using CPUs that are all around the globe, we happen to think storage is probably the most important problem to solve first. Because, death, taxes and data are things that never go away. And the world's creating more and more every year, it would actually, the data created this year would have filled a stack of CD ROMs to orbit of Mars and back. It's going to grow from there. >> I love those analogies. >> Yeah, some of that's cat videos, but a lot of it is really super critical data on finding, therapeutics for COVID are the cure for cancer or new forms of energy. And so, find a way to use to give people the ability to store their data in a highly secure, highly efficient and very cost effective way we think is really important. >> And what should we be looking for from Storj for the next year, >> Let's say Storj is in production. We are adding end users. We're starting to see some larger users, which is a very 10 for us, today, we're used primarily for sort of second tier storage, but we expect to be moving into sort of primary storage and even CDN down the road. It turns out that what we built is a really great way to distribute large files, including video and photos and x-rays and satellite images and things like that. >> Well, Ben, thanks for joining us today. I know you're a Cube alum you've been many times on the Cube. I think this is the first time we've done it virtually though. >> I know, I do miss being in the same room as you and you're colleagues but this is a very nice thing too. >> So, do we believe me? Ben Golub, CEO of Storj. Thanks for taking time for being with us today. This has been a Cube conversation. I'm Paul Gillin. Thank you for joining us, be well. (bright upbeat music)

(upbeat music) >> Hello there and welcome to a special Cube conversation here at The Cube's Palo Alto studios, I'm John Furrier. Join with me for this special Cube Conference, Stu Miniman with Wikibon and The Cube co-host as well just up at Amazon Web Services Summit. Stu, great to see you again. Our next guest is Ben Golub, who's the executive chairman and interim CEO of Storj, pronounced storage. So it's a really hot cryptocurrency, blockchain based storage solution. I should say decentralized storage, not necessarily cryptocurrency, but tokens are involved, encryption. Great to see you. >> Great to see you, it's good to be back. >> Formerly Docker CEO and now advising at Mayfield Fund as a venture partner and also interim CEO of a hot-- >> Yeah really exciting company. And I'm really excited to talk to you about it today. >> So let's just jump into it. So obviously the ICO craze is awesome and we've always speculated that the blockchain and the decentralized applications are coming is going to be the real action. But yet it's going to create efficiencies where there's inefficiencies. >> Sure. >> Venture capital is one of them and that's why the ICO craze is going. People are raising a boatload of money that they probably wouldn't have gotten that amount. >> Wouldn't have gotten, yeah no dilution, things like that. It's interesting yeah. >> So give us an update on Storj or storage. How much in ICO did they raised, whitepapers out there? It's peer to peer, give a quick, take a minute to explain what the company's doing. >> Yeah well I guess that I should probably start by saying that I think that blockchain is bigger than just cryptocurrency, and decentralized is bigger than blockchain, and Storj is primarily a decentralized storage company. So we're about decentralized apps and the whole thing would absolutely work even if we were just using dollars. But I think it does make it a whole lot more exciting. And so the company, kind of unique in the crypto space in that we actually had a running service that was providing real value, before we did the large token sale. And the token sale raised about $30 million. Fortunately they took about 10 of that in Ethereum and Bitcoin which rose up. So there's a good deal more than that in the bank account right now. >> John: Hopefully they converted to fiat currency. >> And then they converted to fiat along the way. >> It's at an all-time high of $20,000 right now. It's like $7,000, something like that. >> Yeah, so you know, didn't sell everything at the peak, but didn't sell at the-- >> Yeah, so we've been having many blockchain and crypto or token-based economic kind of things. But the real question is what's happening? Now we know the action's been on the infrastructure side. We look at all the top hedge funds, Polychain, amongst others. They love these deals because it's infrastructure. Is that where the action is and how are you guys looking at that because at the same time, there's a wave of decentralized applications also known as Dapps coming on. So there's a relationship going on between how fast the infrastructure can go, and then how applications are going to work with either on chain or off chain dynamics. >> Sure, sure. So maybe it would be helpful to give you a sense of what it is that we do. 'Cause I think that if you do that, then I think it makes sense in the context of decentralized infrastructure, decentralized apps, but also actually traditional infrastructure as well. I've always been searching for a company that I could describe at Thanksgiving. I've never succeeded, so I always end up saying that I'm in computers, and fixing somebody's printer. (laughing) But I guess if I were to describe Storj at Thanksgiving, I'd say it's basically the Airbnb of storage, or the Airbnb of disc drives. So Airbnb, people have lots of condos or vacation properties that aren't being used all the time, and so Airbnb brings them together with people who want to rent those, and they're the largest hotel company in the world, without owning a single property. And we're kind of doing the same thing with Storj, in that there is, first of all, this explosion in the amount of data that's getting created. It would fill a stack of CD-ROMs to Mars and back this year. Yet the price of cloud storage hasn't come down. And 90% of all the disc drives that are out there are only about 10% utilized. So seems like a problem that needs a solution. And that's what we've done. We've basically brought together a very large network of individuals and companies that have spare storage capacity and matched them up with people who need storage. The really cool aspect, there are many cool aspects about it, but one of them is that basically if you want to store on the Storj network, we take your file, you encrypt it, so we never hold the keys. You encrypt it, it's all scrambled up, we break it up into between 20 and 80 pieces, and we spread those out across 150,000 or so nodes that we have in our network. So it's super cheap, but it's also super secure. Great performance because the data's way out at the edge. And super available because there's no storm or power outage or idiot tripping over a power cord that can take out your storage. >> So, Ben, you touched on, first question I was going to ask, of course, trust and security. Storage I absolutely have to worry about, so it sounds like that's at the core, but there's a number of dynamics going on in the industry. Object storage was great, let's spread it out, let's make it more decentralized, but most of the core storage industry is speeds and feeds and latency's super important, and even when you start getting to distributed architecture, I worry about that latency. So what are kind of the use cases, what are some of the key customer issues? Is price a big piece of it? Or what solutions does Storj solve that others can't? >> I always said when I was at Cluster, which was a storage company that there were four things that mattered in storage. There's certainly price; there was security; as in I don't want anybody to be able to access it; there's availability, I never want to drop or lose files; and finally there's performance, how fast I can get it. And so for a huge range of use cases that involve files, basically everything that object storage is kind of used for today, the design of our system is actually much better because we've encrypted it locally and then spread it out, you really can't attack it. First of all, you'd have to figure out... So a would-be attacker who wanted to find one of your files in the storage network would have to figure out which of the 80 or the 20 nodes out of 150,000 it's located on. If they found one of those, and they got the small portion of the file that's there, they wouldn't be able to do anything with it 'cause it's encrypted. Even if they were somehow able to decrypt it by stealing the key from you, not from us... >> So encryption and immutability... >> And immutability, right. So you get all of that. So for the security piece, it's great. For the availability piece, I never lose a file. It's really, really good, because if you just look at the math, the chances that somehow... You can basically lose 10 out of 20 nodes and still be able to recover your files. And all of our nodes are run by different people, different power supply. >> So let's take a step back. How many nodes are on the network now, you said? >> 150,000 now, run by 70,000 farmers, is what we call them. They're not miners, 'cause they're not just solving that problem, they're just producing something of value. 70,000 farmers, and then we have on the network right now, over 50 petabytes of data, which is a really large amount, and yet, we don't run a single data center. >> Have you guys raised any venture at all, or is it all ICO proceeds? >> There was a small seed round that was done, before the ICO craze. But other than that, it's all-- >> And how many people are working on the company? >> 25. >> So you guys are a classic startup. The working product, how does that look now? Is it on the blockchain, is it off the chain, how's it working, Bitcoin? >> So I've described to you what the product does. So far nothing I've described to you involves blockchain. The way the economics work is that as a user, somebody who wants to store on our network, we quote a price in dollars. You can either pay us in dollars or in the Storj token, and as a farmer, you get compensated with a Storj token. And that's done, of course, using blockchain we're actually part of Ethereum. >> Is that ERC-20 token? >> ERC-20 token, yeah. There are also interesting things that we are working on using blockchain for things like you just mentioned, data integrity, so I can make sure that if I'm doing a snapshot of a database, and I want to make sure that it's exactly what it is, nobody can tamper with it, et cetera, then that's a perfect use of blockchain. But using blockchain for the stuff I was talking about before, like figuring out where the shards are and making sure that they're uptime and reliable, that's actually stuff where blockchain isn't the best answer. >> Ben, tell us a little bit about the customers that you find there, 'cause storage administrators, that role's been changing a lot, but the typical storage administrator, if you tell them, "Oh yeah, I'm doing some distributed thing, "somewhere else, and paying in crypto-currency," they'd be like, are you kidding me? I want this thing that I can lock and hold and guard with a gun. >> This is like anything else, there's an adoption curve, and right now it's clearly very much early adopters. And actually similarly to Docker and similar to the cloud in general, it's developers who are leading the way. Developers are saying, oh, wow, I can write to the storage network in the same way that I would have written to S3, only it's cheaper, for many use cases, more performing, and not centralized, so I'm not trusting one cloud provider. So for certain use cases, this is fantastic. >> Are there certain cloud native apps that you're finding have strong affinity here? >> Yeah, so basically what we have affinity with right now, and let's be clear, this is early days. I wouldn't recommend that people store their most sensitive data on this, but-- >> Not Oracle certified yet, is what you're saying? >> We're not Oracle certified, no. (laughing) Basically anything involving a large file that you're not writing to very frequently, but you're reading a lot, or that's getting read by lots of people around the world, we're a really good solution. It's one of the things I think I mentioned to you. So we've got 150,000 nodes. They're located in I think it's now 180 countries, and all over the U.S. So if you want to get your data close to the edge, the people who are consuming your data are really close to the edge, this is actually really good. And because it's spread across so many, you get the benefit of parallelism, so it's super fast, in addition to being super safe and super secure. >> How does it work for the farmers? Because we have video files, so we would love to spread our video files on the Storj network. So let's just say... >> I'd do a special deal for you, too, you know. >> Of course, yeah, get a little token action going on both sides, Cube coins. But the availability thing is concerning. Whose computers is it being stored on? Is it extra capacity? Is it servers? Is it people's home computers? What's the, is it that kind of model? >> Sure, so basically yeah, we, just as Airbnb measures reputation, we measure reputation, too. And so if you don't have a good reputation, certain characteristics, we won't send data to you. What it basically means is you've got to have dedicated hardware and a dedicated connection. So we do have people who are running things in their home, but it's not a laptop, it's not on your phone. But if you have a disc drive that's connected with reasonably high capacity and reasonably well connected, then you'll establish good reputation. But what we are seeing is we are seeing a lot of universities, a lot of small businesses, some data center operators who have spare capacity or just want to use us as like, be both a farmer and a user. So backup and get stuff on their capacity as a good idea. And interestingly enough, we also are getting a lot of people who were Bitcoin miners and bought equipment, which is good quality equipment, but there's such an arms race in doing that. >> So they abandoned, because it was too hard for them to get coins. >> It's too hard to make money, right, and very expensive, specialized equipment, and in our case, basically general high quality equipment works well. >> What's the profit model? How do the farmers make money? Take our Cube videos, as an example, so I'm paying you guys, and you're distributing those tokens? >> You're paying us and you're paying us either in dollars or tokens. And then farmers get compensated in tokens. Right now, about 60 cents on every dollar goes to farmers. And farmers get more storage based off of their reputation. We charge people based on both how much you're storing as well as how much bandwidth egress that you're doing, and we compensate farmers exactly the same way. >> It's handled through a consensus protocol that you guys have? >> Yeah, yeah, so the payment and assessing reputation we actually use good distributed blockchain as well there, right, so you're not counting on Storj to be in the middle there. Now, with the remaining 40 cents, which I think is actually the really interesting part, we keep some of that, we put some back into the network, but what I'm really excited about is that this is now a way for us to economically empower demand partners as well. The first thing we announced was FileZilla, but we have lots of other open source projects waiting in the wings, and we're happy to share with them. So as opposed to centralized cloud, where it's really hard to make money as an open source company, we're not an open source project in our case, right? We're happy if you're sending us users and data, to give you a really meaningful percentage. >> Any kind of freemium model you guys are playing with? I can imagine this being pretty interesting, because S3 democratized and lowered the cost barrier, obviously with cloud. >> S3 has been great for many things. >> How low are you in terms of the disruption? You guys are probably going to have to come in and undercut S3, is that the strategy? Or is that the price value? >> I think what I learned from my time in storage, is price is important but you have to be really safe and available and reliable, 'cause people's data is really important. But we looked across a pretty broad set of use cases, in comparing us to the traditional cloud providers we're probably a third. And we could go lower. What I think is really interesting in our case is that the economics just work really well. So from our perspective, if you're a farmer, you've already got, it's spare capacity, you don't need any more electricity to run this thing, you've got bandwidth, right? You don't need to hire any more people. So it's almost pure margin for a farmer, which is great for them. And so we can give economic value to farmers, we can give economic value to our customers, we can give economic value to partners. >> Any kind of economic models you can share in terms of what someone would make? Let's just say that I had this big music library that's not being used anymore, and I had a-- >> Well, as a customer of course, if you've got data that you want to store on our network, you'll save a lot of money, and it's probably a third of what you might pay. >> But is there any kind of, if I'm a farmer, I want to join the network? >> But if you're a farmer. >> How much am I going to make? >> It really depends on how much you're storing and how good your connection is, but as a farmer, I think you can make decent money. This could probably be I don't know off the top of my head, $20, $30 a month per drive, which isn't bad, and certainly much easier than making money-- >> So it kind of depends like the Airbnb model, depends how well you're using-- >> How well you're used. So some people earn less, some people earn more. And again, for most of the farmers, this is pure margin. >> Great, we got a couple back to back rooms, Stu. We should get some drives up there and get on board. We could pay for the cameras. >> And look, I think for videos, you guys would actually be a perfect use case with a lot of the stuff that's going to be coming out later this year. You get both storage and CDN like things for free, in the sense that because-- >> I'm really glad you brought that up, 'cause I want to ask you about Videocoin, 'cause Halsey Minor has Videocoin, another ICO, he raised $50 million. We covered that on Silicon Angle. But he's trying to democratize Acromi. Is that similar to what you guys are doing? >> I guess you could say yeah, we're further democratizing object storage, democratizing S3, but I think we can also democratize Acromi, we can democratize Isilon, there's certain other really exciting things that are-- >> What other services, you mentioned CDN, so it's not just storing the information, but that global dispersion, what does that enable? >> It used to be that people had a really big difference between archival which is slow, hard to get at, and CDN, right? And but actually, given the way that we're doing this thing, we can be pretty seamless. Pay archival for stuff that's staying in archival, but go up market if you're going to be having a lot of people read it. >> So I got to ask you about the, obviously, security. You're looking at it for additional services around redundancy, I can see that being a nice headroom for you. On a personal note, you've been involved in a lot of industry companies that have done very well, entrepreneurial success. >> Ben: Why am I doing this? (laughing) >> I can tell you're having fun. How could you not have fun, it's a whole 'nother generation of innovation, disruption coming, a whole 'nother price point. So what's it like, are you having fun? And if you could talk to your 22-year-old self right now, 'cause I wish I was 22 right now in this market-- >> Are you saying I'm not 22? >> How do you explain this? And when you go to parties, even in the Valley, and people say, "Man, you're crazy, it's a fricken' "scam out there," how do you explain to 'em this revolution? Because this is like a special, unique wave. How would you talk about that? >> Actually I describe it the same way to people in the Valley the same way that I described at the beginning, which is that blockchain is bigger than cryptocurrency, and decentralized is much bigger than blockchain. And Storj is first and foremost decentralized. It's about decentralized computing, decentralized storage, supporting decentralized apps, keeping the internet from ending up in the hands of just three people, three companies, which I think is really important. But also I feel very good that, to the extent that Storj does touch on cryptocurrency, that we've done it the right way. We had the service working first before we did the token sale. We raised what now appears to be a modest amount in the token sale, tried to be very transparent and at the forefront. >> You probably could've gotten more if you wanted to. >> Probably, right? But we were trying to be forefront in terms of governance and transparency, and I think that it'll probably be a good thing, just as it was kind of a good thing that the bubble burst in the late '90s and you got rid of a lot of such not great companies and not such great operators. I think that the current corrections, or whatever, in the crypto market I think will-- >> Like pets.com is gone, but DogeCoin still exists. (laughing) >> So I'm sure that somebody has a crypto base pets.com or webvan lurking in the wings somewhere. Kodak just did it. >> I got to ask you, you're super smart. You went to some really good schools, I think Princeton, Harvard Business School. So you got a good education, so I got to get your take on the whole token economics vision. 'Cause this is, if you look at outside the tech trends, there's actually new economic models that are coming out. Have you looked at token economics? New liquidity on the one side, you've got sovereignty, you've got consensus. These are not just tech issues, these are society issues. What's your vision around that? How are you viewing it? What's the upside? How is this shaping the future? >> Yeah, I think if you're a token network, you sort of have to have some central bank chops as well, right? And we actually have a central banker. >> John: So you have a chief economic officer? >> So we don't, no, we have an advisor-- >> John: Public policy. >> I actually had a degree in public policy at one point. But we need to think about the token supply in the same way you'd think about the money supply. We're backed by something real, so it's sort of like having currencies backed by gold. We need to make sure that the market grows and the network grows. And my fundamental belief is that the more the network grows, the more people use it, the more value that we're able to provide, that'll be good for token economics in the long run. In the short run, though, what we've done, is again, we price based off of dollars, and we compensate farmers based off the token based off of the spot price. So for farmers, we've tried to remove any need to worry about volatility or things like that. >> So I want your reaction-- >> Or the price. >> I've said on The Cube multiple times that in the old days of venture startups, the CTO was everything. You had to have a great CTO or VP of engineering and great senior executive team on the entrepreneurial team. Now it's almost like the chief economic officer is a critical piece, 'cause you've got public policy intersecting with economics. You've got new kinds of math that's not technical algorithm but it's kind of business algorithms. >> It is, business algorithms. Just like any economy, the money supply matters. And people's trust in that money matters. And the supply matters. All that stuff like that, and stability matters. So I think absolutely this new breed of network based token companies will have to worry about that, and probably should think about a chief economics officer, but it doesn't mean that you don't also have to have a great CTO and great technology, 'cause that's how you make the network valuable and grow. And one of the reasons that gave me both excitement and comfort about going to Storj is that the economic model works, fundamentally, even if the crypto's not there. >> John: 'Cause technology is decentralized. >> Decentralized storage makes sense even if you're buying and selling it with dollars or pounds or rubles, or whatever. >> Ben, great to see you, thanks for coming in and sharing the Ben Golub School of Economics, Public Policy for Tokens. You can give a class at Stanford on that soon, although that's the competition's school. >> Maybe, yes. Slightly different. We still like them. >> Great to see you, congratulations. Storj, pronounced storage. Great, successful ICO, hot startup, really, an example of the infrastructure opportunities of a new decentralized infrastructure that can be and will soon, we think, it will be critical infrastructure in a whole new way. Great to see you. >> Ben: Really good to see you, great to be back with you. >> It's the Cube Conversation, I'm John Furrier, Stu Miniman, thanks for watching. (upbeat music)

(techno music) >> Narrator: From Austin, Texas It's theCUBE, covering DockerCon 2017. Brought to you by Docker, and support from EnSync System Partners. >> Welcome back to theCUBE, I'm Stu Miniman, here with Jim Kobielus. Happy to welcome back to the program. Someone we've had on theCUBE many times, Ben Golub, who is the CEO of Docker. Welcome Back. Hey, congratulations to you and the team. >> Oh hey, thank you, and I'd like to say, this is our favorite time of year. Followed very closely by the week after DockerCon and we no longer have to do it. >> Absolutely, I mean, look, I'd say the word that stuck out for me the most this morning is, 'scaleability'. So, we talk about how customers are thinking about scaleability, how you scale the different solutions you have. And, look at the scale of an event like this. So, you know, we've got, you know, this big event here, 5,500 people ... Which we were reminiscing back to like the first DockerCon and the growth of this. It's impressive and it's done really well. I haven't seen people griping about taking an hour to check in, the food's been good ... You know, the lines haven't been. >> Ben: Yeah, good. >> And, Austin always a fun place to come, >> Absolutely. >> Apropos for all the open source stuff that's going on. >> Yeah, the only problem is, this is the first place where we've had a Docker conference, where we haven't been at a port. So, like all of these great, look at the containers ships outside, you know, we can no longer do that. But, that's okay. >> Uh, Vancouver would maybe be good. I remember actually, I did puns for an entire week when we were at Open Stack Summit in Vancouver. Overlooking the bay there cause there is container ships everywhere. >> Ben: Is that right? >> So Ben, you know please just bring us up to speed ... Kind of you, the team, we've gone through a lot of the announcements but, so some of the highlights for it. >> Yeah, I mean, I mean obviously this morning we had a lot of fantastic announcements. We talked about Lenox Kit. We talked about Mobi. You saw, just huge improvements in the developer flow. Tomorrow is going to be a lot about enterprise. For me, that's really the most exciting change that we've seen over the past year. It's just an explosion of Docker and the enterprise. You know, Docker has brought on over 400 enterprise class customers. Some of the largest names uh, really in the industry right? And, some of them like, MetLife and VISA and Intuit, will be talking live tomorrow. Um, and what's been especially interesting for us is that, the use of Docker is not just for Greenfield projects. Um, Docker's being used to keep planes in the air, keep trains running on time, and it's being used in the largest, some of the largest financial transactions, handling, you know, millions and millions of transactions a day, right? And, that's really exciting for us, it's also very humbling. >> All those used cases you throw out, it's Docker cover lots of applications, from a wide variety of things. It reminds of what we've see. >> Right, right. A lot of them are, you know, they're 15 three year old applications as well as, you know, two minute old applications. >> Yeah, and it's something we've been picking at is how much is it the new stuff, and how much is it the platform, that can bring some of the older stuff in. And, then we look at how we change it over time. I think it's something we've been struggling with, kind of, whole cloud and app, you know, modernization, for years now. >> Yeah, well I think it's really good. I think, um, that there's this sort of, there's this fallacy, that sort of persisted for a while, where people thought, okay, you know if you're going to have BiModal IT, there's going to be the new cool stuff down in the containers running the cloud, and then all that old stuff is just going to wither and die in some dark data center somewhere. >> Yeah, right. >> It doesn't match what we hear. >> That's absolutely not the case actually, you know. If we look across our customer base, you know, about 50% of them are beginning their Docker journey with their traditional apps. Now that's not where it ends. But, you know, if you think about it just by taking 80% or 90% of the apps out there, our traditional applications run in, you know, traditional infrastructure. And, just by taking a traditional application, you put it inside of a Docker container, you know, automatically you're getting, without changing a single line of code, something between 75% and 5X better resource utilization. You're able to do simple things like, upgrade your data base, or move from an old machine to a new machine, or old data center to a new data center. Again, without changing a single line of code. But, then the magic starts. >> Right? Then you start taking that traditional application, and treating it in a more modern way. CICD, gradually breaking it down into smaller and smaller bits, and that's the way it goes. >> So, You know, some of has struggled. We said, remember back to virtualization. Virtualization has the easy low hanging fruit of, oh, I can consolidate. I can get great utilization. %I can save a lot of money. I think you did a good job laying out. You know, in your last statement there. But, it's not as simple, you know? When it gets bubbled up to the customers, you know, the board, the sea level, when they're doing this. What is it they're like? What's the initiative they're running? Cause, it's not ... Nobody says, oh I have a container problem. >> Ben: Uh, right, right, we fix it. >> What is that business need, you know, that you're helping to, you're helping them to itch? >> Well, it's something all they need to, they need to be more efficient. They need to be faster, right? >> And, Docker helps you do that if you're running brand spanking new applications. >> Yeah, but she loves that. We talked about that for a while. >> It's agility. But, you know, part of agility is also making sure that your existing applications don't weigh you down, right? And, and that they actually support your business gradually going forward. >> Yeah. And, I mean, one of the things, one of the things that excited me about containers in the early days, is ... I'm an infrastructure guy, and, infrastructure has always held us back. and, the atomic, you know, you know, containers bring the applications really as the atomic note. yIt's not the server or their VM. It's the app, or you know, the 12 factor, you know, app there so. So if the app's driving it, not that infrastructure matters, but, it's not the thing driving it. >> Right, well the ... by focusing on the app, we actually let people choose the infrastructure that they want, or migrate from, you know one style of infrastructure to another style, over time. Uh, what it also though means is, if you're focusing on the app, or on the container, then how do you think about security, and how do you think about networking, and how you think about compliance? Uh, all of those things need a refresh. But, the good news is &once you do that refresh, it's actually much faster, and much more efficient. >> Alright, So you know John Furrier wouldn't let this interview come without, you know popping in. So, he is just sending me a note, and he said, "What is the intersection between the cloud native, and the app developers, that you're seeing?" >> Uh, the internet intersection between the cloud native ... >> Cloud native and app developers. >> Um, you know, I think that developers want to build really cool stuff. And, if they build a cloud native, that's fantastic. Um, if they want to build it, not being cloud native, that's very cool too, right? We're seeing this whole generation of, of developers who, you know, may have been working in Java for the past 15 years, or working in, ah, dot net. Um, They're able to do really, really cool things. Um, With Docker, uh, and it actually helps bring them into the cloud native space. But, you don't have to rewrite an amazing application, just because of your architecture, your infrastructure is changing. >> Yeah, you can wrap and refactor, and migrate your existing applications at the pace that you wish. Uh, rather than being forcibly upgraded or migrated. >> That's right, that's right. You also don't need to know what cloud you're going to be running on four years from now. Or, what infrastructure you're going to be running on, or, what your apps going to be able to do, right? Um, you know, this stuff happens organically with Docker. And, that's really part of the beauty of it. >> You know you are developing for the multi-cloud. In other words, the cloud you're on today, and the clouds you might be on tomorrow, and a flexible or graceful transition. And, you know, it's really cloud churn over time you're going to be on a variety of clouds, and you just want to make sure your applications, and your data and all your assets are easily migrate-able. >> Yeah, I think you stated that really well, and I think especially as people start looking into, you know, applications where they want to burst, or applications that are sort of big data where they want to, you know, be moving the application to the data rather than the date to the applications, right? Um, it needs to be multi-cloud because actually, or multi-location, right? Um, and we're happy to help with that. >> Um, so, we've watched the maturity of the technology, and the growth of the system. I mean, I think a lot of us were really happy. Eco system, I mean, you know, Soloman did a great job of highlighting that. To be honest, some of the swarm stuff, with Docker data center last year, felt like ... >> Felt like we were fighting, yeah. >> It felt like a little bit of fighting, and it feels like we're healing, and we're coming together, and, we're growing that. So, maybe speak on that a little bit. But, the follow up question I have for you on kind of the business is, I think we're still pretty early in the modernization strategy for this. And, I think it's good for people to realize that. That, you know, all of this stuff doesn't happen over night. It's amazing to see how far it's come, you know, In just four years of the company. Um, but, you know, I'll let you riff on those two things. >> Yeah, yeah, I mean, so I'll start with the first one, which is, um, you know, fighting within the eco system. You know, there's this sort of this saying that, you know, people hate people of a slightly different sect, more than they hate pagans, right? (laughing) so I think sometimes within, within like the open source community, oh, you take a slightly different approach towards orchestration than I would of taken, therefore, we should be enemies. And, then suddenly you take a step back and say, "now wait a minute, we're all trying to do the same thing. Build great apps and make the world, uh, enable people to build great things, Right?" And, I think as Solomon laid out today, right? Orchestration, container run time, security, networking, various slavers of the security. These are all things, that actually should be really atomic, and we should be able to all collaborate on them. So, you're seeing a lot more of that. Cause also what we're seeing is in terms of modernization you know, modernization isn't a single, isn't driven by a single factor. It's not driven by orchestration, or it's not driven by networking. It's really, what we're seeing more and more is that it's being driven by the supply chain. And it's how do I as an enterprise, with lots of developers building lots of different types of apps. Some are old, some are new, some are Lenix, some are Windows, some are running on Prim, some are running in the cloud. How do I manage that supply chain, and have it be secure no matter where it's going? And, that's where we're able to add a lot of value. What we're finding as a business, to get to your point. Is that we'll meet the customer wherever they want to start. Our business model, our subscription model, we charge based off of you know, nodes per year, or nodes per minute, if you really want to go there. And, we just let them gradually start using more and more and more. So we're actually very excited. Not only do we have, you know, 400 large customers, and you know, 10,000 smaller customers. But, we're seeing every customer is expanding, is renewing, and so customers who were on 40 nodes six months ago, are now on 400, 500, a 1,000 nodes. We have on 12,000 node customer, uh, and that's really good for our business model. >> Yeah, the other question from Furrier is, you know, what KPI's are you tracking this year? Are you talking, 400 enterprise customers, you look at, you know, the size of how many employees you have, you know. What are some of the growth drivers and levers that you guys are playing with this year? >> Yeah, it's honestly for us, the most important metrics that we're looking at is, is obviously number of new users, how that translates into number of new customers. You know, within the customers, how many nodes are they deploying on, and most importantly, how many more of them? >> What about your host, is that growing too? >> That's growing too, right, right? So, designated containers for host is growing. Ah, and for us, the KPI is okay. You know, how are those customers doing? How many of them are renewing? How many of them are expanding? Um, and for us, you know, I think that sort of brings it back to the customer level. We do a good job with the customers, especially with this subscription business model. I think that sort of forces you to, if you invest in the customer, they're going to invest in you. >> Yeah, um, speaking of money, we've got Cherry Chen coming on next. And, as far as you're saying, there's a lot of top VC's here. What do you see that, what's driving investment in this area? Um, you know, where are you guys with dollars? Anything you can you say on that? Just kind of the VC investment end. >> Okay, tell Furrier if he wants to ask difficult questions, you've got to be sitting here, otherwise ... (laughing) Um, uh, no, so, so, we're seeing ... >> He's shy, he can only talk through an intermediary. >> Yeah. I understand. John is not shy. >> Talk for yourself John. >> Um, we're very happy about what's happening with our modernization. We're seeing the top line growing much, much faster than the expanse line growing. I mean, if we want them to cross right at a certain point. But, it looks like that's going to happen pretty soon here. But, I think there's so much interest in this area, because this is really is much broader than a single application, right? I mean, yeah, you can go out and you can invest in some great sales companies, or, you know, some great open source application companies. But, you know, containerization and dockerization, right? It's really a c-chain, and it's impacting infrastructure, and it's impacting apps. It's impacting networking and storage, and also the other traditional areas, but I think in a really exciting way. >> Yeah, can you speak to the culture of Docker? I remember that first show in 2014, 42 employees. And, now you've got a little over 300. What is, you know, the prototype? What do you look for in a docker, an employee there, you know, what do you see this company being when you're a 1,000 employees? >> That's a really good question? >> How do you motivate them? What is the vision that they're all ... >> Well something like this. This is incredibly motivating. And, I honestly, um, for people at Docker, we look for all different types, sort of say, hey, we kind of like people who are type A personalities, and type B bodies, you know? (laughing) We're really excited, but are able to, you know, run at sprint pace for a marathon. Um, but honestly the things that keep us really, really motivated is, I say, if you're ever feeling down at Docker, go talk to users, go talk to customers, and that will get you excited. I spoke this morning about, ah, TGN, which is this non-profit genomics company. The fact that Docker has enabled them to sequence individual pages of genomes, so much faster, and diagnose them, and cure them faster. You know, you heard the story of the young girl who spent the first 12 years of her life in a wheel chair, barely able to talk. And, now because of things that Docker helped enable, she's out, she's living life like a typical teenager. Wants to become a genomics scientist when she grows up. Going to main stream school. I mean that, that's motivating. And, that helps to deal with the normal trough of oh, okay the code didn't work, we missed the ship date, whatever the case may be. >> Yeah, yeah, you didn't help advertising clicks. You know, you're helping to improve lives. And to that, I love that the show here, you've got some charitable events, that you're contributing to. Are there activities you guys are doing at corporate to help to drive, kind of, civic engagement? >> Um, you know, we do, but what we found is the best is when it comes from, from inside our employee base. Of course, our employee base would really love nothing more than going out, and talking to users, and to some extent we do have a lot of charitable things that we do. It's really exciting to have, 14 and 13 year olds who are using your technology. I mean, who would ever thought? I spent my entire life trying to have something that my kids would think is cool, and actually now, they think Docker is. >> How does it tie in with education? Are you guys helping to, you know, the next generation of active people? >> Absolutely, Docker is actually being used very broadly in computer science courses. Just because, that's basically how teachers want students to submit their, submit their projects to them, submit within the Docker container, right? Of course, we're thrilled that they're learning how to use Docker. It also means that students, they don't need to worry about making sure the student's laptops are set up correctly. They can focus on writing great code. So, yeah, we engage in education. We're doing some educational work with people in San Francisco. Just because that's our home base. And, we're really happy to support you know, three, actually four wonderful charities that are here at DockerCon today. You know, some servicing, LGBT youth, we've got one in the genomics space. Uh, one focused on teaching coding. Uh, and that just kind of ... That really helps to stay motivated. To stay motivated. >> It's a shame that you're not having any fun. >> You know, I'm having a ton of fun. I'm exhausted. I'll probably collapse in a corner. You know, come Friday. >> And as you said, your second favorite week of the year is this week, right? >> Absolutely, absolutely. >> Alright Ben, I want to give you the final word, you know, we've got another day, I'm sure you've got a ton of stuff in the announcements tomorrow. We're going to have Solomon on right after the key note tomorrow, but when people leave Austin, what do you want them to know about, you know, the Docker community and Docker the company? >> You know, I'd say that, you know, Docker is here, Docker is now, Docker is for old and for new, for on premise, and for cloud, for Lenix and for Windows. Docker is here for you, and however you want to use us, we're going to help you do amazing things faster. >> Alright, I think that's wonderful Cube gem to end this on, Ben Golub, CEO of Docker, always a pleasure to talk with you. Congratulations on the show. We are thrilled to be able to be here to cover it. >> Okay. >> And we'll back with one more guest here, on our day one of two days of live coverage, you're watching theCUBE. (techno music)

(bright symphony music) >> Hello, I'm John Furrier, the founder of SiliconANGLE Media and co-host of theCUBE. We're here in Paulo Alto at our studio here. I'm joining with Joseph Jacks, the founder and general partner of OSS Capital. Open Source Software Capital, is what OSS stands for. He's also the founder of KubeCon which now is part of the CNCF. It's a huge conference around Kubernetes. He's a cloud guy. He knows open source. Very well respected in the industry and also a great guest and friend of theCUBE, CUBE alumni. Joseph, great to see you. Also known as JJ. JJ, good to see you. >> Thank you for having me on again, John. >> Hey, great to have you come on. I know we've talked many times on theCUBE, but you've got some exciting news. You got a new firm, OSS Capital. Open Source Software, not operational support like a telco, but this is an investment opportunity where you're making investments. Congratulations. >> Thank you. >> So I know you can't talk about some of the specifics on the funds size, but you are actually going to go out, talk to entrepreneurs, make some equity investments. Around open source software. What's the thesis? How did you get here, why did you do it? What's motivating you, and what's the thesis? >> A lot of questions in there. Yeah, I mean this is a really profoundly huge year for open source software. On a bunch of different levels. I think the biggest kind of thing everyone anchors towards is GitHub being acquired by Microsoft. Just a couple of weeks ago, we had the two huge hadoop vendors join forces. That, I think, surprised a lot of people. MuleSoft, which is a big opensource middleware company, getting acquired by Salesforce just a year after going public. Just a huge outcome. I think one observation, just to sort of like summarize the year 2018, is actually, starting in January, almost on sort of like a monthly basis, we've observed a major sort of opensource software company outcome. And sort of kicking off the year, we had CoreOS getting acquired by Red Hat. Brandon and Alex, the founders over there, built a really interesting company in the Kubernetes ecosystem. And I think in February, Al Fresco, which is an open source content portal taking privatization outcome from a private equity firm, I believe in March we had Magento getting acquired by Adobe, which an open source based CMS. PHP CMS. So just a lot of activity for significant outcomes. Multibillion dollar outcomes of commercial open source companies. And open source software is something like 20 years old. 20 years in the making. And this year in particular, I've just seen just a huge amount of large scale outcomes that have been many years in the making from companies that have taken lots of venture funding. And in a lot of cases, sort of partially focused funding from different investors that have an affinity for open source software and sort of understand the uniqueness of the open source model when it's applied to business, when it's applied to company building. But more sort of opportunistic and sort of affinity oriented, as opposed to a pure focus. So that's kind of been part of the motivation. I'd say the more authentically compelling motivation for doing this is that it just needs to exist. This is sort of a model that is happening by necessity. We're seeing more and more software companies be open source software companies. So open source first. They're built in a distributed way. They're leveraging engineers and talent around the world. They're just part of this open source kind of philosophy. And they are fundamentally kind of commercial open source software companies. We felt that if you had a firm basically designed in a way to exclusively focus on those kind of companies, and where the firmware actually backed and supported by the founders of the largest commercial open source companies in the world before sort of the last decade. That could actually deliver a lot of value. So we've been sort of blogging a little bit about this. >> And you wrote a great post on it. I read about open source monetization. But I think one of the things I'm seeing as well that supports your thesis, and I like to get your reaction to it because I think this is something that's not really talked about, but open source is still young. I mean, you go back. I remember the days when we used to have to hide in the shadows to get licenses and pirate stuff and do all those crazy stuff. But now, it's only a couple decades away. The leaders that were investing were usually entrepreneurs that've been successful. The Rob Bearns, the Amar Wadhwa, the guy that did Spring. All these different open source. Linux, obviously, great success story. But there hasn't any been any institutional. Yeah, you got benchmark, other things, done some investments. A discipline around open source. Where open source is now table stakes in all software development. Cloud is scaling, scaling out globally. There's no real foc- There's never been a firm that's been focused on- Just open source from a commercial, while maintaining the purity and ethos of open source. I mean, is that. >> You agree? >> That's true. >> 100%, yeah. That's been the big part of creating the firm is aligning and solving for a pure focused structure. And I think what I'll say abstractly is this sort of venture capital, venture style approach to funding enterprise technology companies, software companies in general, has been to kind of find great entrepreneurs and in an abstract way that can build great technology companies. Can bring them to market, can sell them, and can scale them, and so on. And either create categories, or dominate existing categories, and disrupt incumbents, and so on. And I think while that has worked for quite a while, in the venture industry overall, in the 50, 60 years of the venture industry, lots of successful firms, I think what we're starting to see is a necessary shift toward accounting for the fundamental differences of opensource software as it relates to new technology getting created and going, and new software companies kind of coming into market. So we actually fundamentally believe that commercial open source software companies are fundamentally different. Functionally in almost every way, as compared to proprietary closed source software companies of the last 30 years. And the way we've sort of designed our firm and we'll about ten people pretty soon. We're just about a month in. We're growing the team quickly, but we're sort of a small, focused team. >> A ten's not focused small, I mean, I know venture firms that have two billion in management that don't have more than 20 people. >> Well, we have portfolio partners that are focused in different functional areas where commercial open source software companies have really fundamental differences. If you were to sort of stack rank, by function, where commercial open source software companies are really fundamentally different, sort of top to bottom. Legal would be, probably, the very top of the list. Right, in terms of license compliance management, structuring all the sort of protections and provisions around how intellectual property is actually shipped to and sold to customers. The legal licensing aspects. The commercial software licensing. This is quite a polarizing hot topic these days. The second big functional area where we have a portfolio partner focused on this is finance. Finance is another area where commercial open source software companies have to sort of behaviorally orient and apply that function very, very differently as compared to proprietary software companies. So we're crazy honored and excited to have world experts and very respected leaders in those different areas sort of helping to provide sort of different pillars of wisdom to our portfolio companies, our portfolio founders, in those different functional areas. And we provide a really focused kind of structure for them. >> Well I want to ask you the kind of question that kind of bridges the old way and new way, 'cause I definitely see you guys definitely being new and different, which is good. Or as Andy Jassy would say, you can be misunderstood for a while, but as you become successful, people will start understanding what you do. And that's a great example of Amazon. The pattern with success is traditionally the same. If we kind of encapsulate the difference between open source old and new, and that is you have something of value, and you're disrupting the market and collecting rents from it. Or revenue, or profit. So that's commercial, that's how businesses run. How are you guys going to disrupt with open source software the next generation value creation? We know how value's created, certainly in software that opensource has shown a path on how to create value in writing software if code is value and functionality's value. But to commercialize and create revenue, which is people paying something for something. That's a little bit different kind of value extraction from the value creation. So open source software can create value in functionality and value product. Now you bring it to the market, you get paid for it, you have to disrupt somebody, you have to create something. How are you looking at that? What's the vision of the creation, the extraction of value, who's disrupted, is it greenfield new opportunities? What's your vision? >> A lot of nuance and complexity in that question. What I would say is- >> Well, open source is creating products. >> Well, open source is the basis for creating products in a different kind of way. I'll go back to your question around let's just sort of maybe simplify it as the value creation and the value capture dynamics, right? We've sort of written a few posts about this, and it's subtle, but it's easy to understand if you look at it from a fundamental kind of perspective. We actually believe, and we'll be publishing research on this, and maybe even sort of more principled scientific, perhaps, even ways of looking at it. And then blog posts and research. We believe that open source software will always generate or create orders of magnitude more value than any constituent can capture. Right, and that's a fundamental way of looking at it. So if you see how cloud providers are capturing value that open source creates, whether it's Elasticsearch, or Postgres, or MySQL or Hadoop. And then commercial open source software companies that capture value that open source software creates, whether it's companies like Confluent around Kafka, or Cloudera around Hadoop, or Databricks around Apache Spark. Or whether it's the creators of those projects. The creators of Spark and Hadoop and Elasticsearch, sometimes many of them are the founders of those companies I mentioned, and sometimes they're not. We just believe regardless of how that sort of value is captured by the cloud providers, the commercial vendors, or the creators, the value created relative to the value captured will always be orders and orders of magnitude greater. And this is expressed in another way, which this may be easier to understand, it's a sort of reinforcing this kind of assertion that there's orders of magnitude value created far greater than what can be captured. If you were to do a survey, which we're currently in the process of doing, and I'm happy to sort of say that publicly for the first time here, of all the commercial open source software companies that have projects with large significant adoption, whether, say for example, it's Docker, with millions of users, or Apache Hadoop. How many Hadoop deployments there are. How many customers' companies are there running Hadoop deployments. Or it may be even MySQL. How many MySQL installations are there. And then you were to sort of survey those companies and see how many end users are there relative to how many customers are paying for the usage of the project. It would probably be something like if there were a million users of a given project, the company behind that project or the cloud provider, or say the end user, the developer behind the project, is unlikely to capture more than, say, 1% or a couple percent of those end users to companies, to paying companies, to paying customers. And many times, that's high. Many times, 1% to 2% is very high. Often, what we've seen actually anecdotally, and we're doing principled research around this, and we'll have data here across a large number of companies, many times it's a fraction of 1%. Which is just sort of maybe sometimes 10% of 1%, or even smaller. >> So the practitioners will be making more money than the actual vendors? >> Absolutely right. End users and practitioners always stand to benefit far greater because of the fundamental nature of open source. It's permissionless, it's disaggregated, the value creation dynamics are untethered, and it is fundamentally freely available to use, freely available to contribute to, with different constraints based on the license. However, all those things are sort of like disaggregating the creating of technology into sort of an unbounded network. And that's really, really incredible. >> Okay, so first of all, I agree with your premise 100%. We've seen it with CUBE, where videos are free. >> And that's a good thing. All those things are good. >> And Dave Vellante says this all the time on theCUBE. And we actually pointed this out and called this in the Hadoop ecosystem in 2012. In fact, we actually said that on theCUBE, and it turned out to be true, 'cause look at Hortonworks and Cloudera had to merge because, again, the market changed very quickly >> Value Creation. >> Because value >> Was created around them in the immediate cloud, etc. So the question is, that changes the valuation mechanisms. So if this true, which we believe it is. Just say it is. Then the traditional net present value cash flow metric of the value of the firm, not your firm, but, like, if I'm an open source firm, I'm only one portion of the extraction. I'm a supplier, and I'm an enabler, the valuation on cash flow might not be as great as the real impact. So the question I have for you, have you thought about the valuation? 'Cause now you're thinking about bigger construct community network effects. These are new dynamics. I don't think anyone's actually crunched a valuation model around this. So if someone knew that, say for example, an open source project created all this value, and they weren't necessarily harvesting it from a cash flow perspective, there might be other ways to monetize it. Have you though about that, and what's your reaction to that concept? 'Cause capitalism would kind of shake down the system. 'Cause why would someone be motivated to participate if they're not capturing any value? So if the value shifts, are they still going to be able to participate? You follow the logic I'm trying to- >> I definitely do. I think what I would say to that is we expect and we encourage and we will absolutely heavily invest in more business model innovation in the area of open source. So what I mean by that is, and it's important to sort of qualify a few things there. There's a huge amount of polarization and lack of consensus, lack of industry consensus on what it actually means to have or implement an open source based business model. In fact there's a lot of people who just sort of point blankedly assert that an opensource business model does not exist. We believe that many business models for monetizing and commercializing open source exist. We've blogged and written about a few of them. Their services and training and support. There's open core, which is very effective in sort of a spectrum of ways to implement open core. Around the core, you can have a thin crust or a thick crust. There's SAS. There are hardware based distribution models, things like Sourcefire, and Cumulus Networks. And there are also network based approaches. For example, project called Storj or Stor-J. Being developed and run now by Ben Golub, who's the former CEO of Docker. >> CUBE alumni. >> Ben's really great open source veteran. This is a network, kind of decentralized network based approach of sort of right sizing the production and consumption of the resource of a storage based open source project in a decentralized network. So those are sort of four or five ways to commercializing value, however, four or five ways of commercializing value, however what we believe is that there will be more business model innovation. There will be more developments around how you can better capture more, or in different ways, the value that open source creates. However, what I will say though, is it is unrealistic to expect two things. It is unrealistic and, in fact, unfair to expect that any of those constituents will contribute back to open source proportional to the value that they received from it, or the benefit, and I'm actually paraphrasing Doug Cutting there, who tweeted this a couple of years ago. Very profoundly deep, wise tweet, which I very strongly agree with. And it is also unrealistic to expect a second thing, which is that any of those constituents can capture a material portion of the value that open source creates, which I would assert is many trillions of dollars, perhaps tens of trillions of dollars. It's really hard to quantify that. And it's not just dollars in economic sense, it's dollars in productivity time saved, new markets, new areas, and so on. >> Yeah, I think this is interesting, and I think that we'll be an open book at that. But I will say that what I've observed in looking through all these CUBE interviews, I think that business model innovation absolutely is something that is an IP. >> We need it. Well, it's now intellectual property, the business model isn't, hey I went to business school, learned this at Babson or Harvard, I learned this business model. We're going to do SAS premium. Okay, I get that. There's going to be very interesting new innovations coming, and I think that's the new IP. 'Cause open source, if it's community based, there's going to be formulas. So that's going to be really inter- Okay, so now let's get back to actual funding itself. You guys are doing early stage. Can you take us through the approach? >> We're very focused on early stage, investing, and backing teams that are, just sort of welcoming the idea of a commercial entity around their open source project. Or building a business fundamentally dependent on an open source project or maybe even more than one. The reason for that is this is really where there's a lot of structural inefficiency in supporting and backing those types of founders. >> I think one of the things with ... is with that acquisition. They were pure on the open source side, doing a great job, didn't want to push the business model too hard because the open source, let's face it, you got people like, eh, I don't want to get caught on the business side, and get revenue, perverse incentives might come up, or fear of incentives that might be different or not aligned. Was a great a value. >> I think so. >> So Red Hat got a steal on that one. But as you go forward, there's going to be certainly a lot more stuff. We're seeing a lot of it now in CNCF, for instance. I want to get your thoughts on this because, being the co founder of KubeCon, and donating it to the CNCF, Kubernetes is the hottest thing on the planet, as we talked about many years ago. What's your take on that, now? I see exciting things happening. What is the impact of Kubernetes, in your opinion, to the world, and where do you see that evolving rapidly, and where is the focus here as the people should be paying attention to? >> I think that Kubernetes replaces EC2. Kubernetes is a disaggregated API for distributed computing anywhere. And it happens to be portable and able to run on any kind of computer infrastructure, which sort of makes it like a liquid disaggregated EC2-like API. Which a lot of people have been sort of chasing and trying to implement for many years with things like OpenStack or Eucalyptus. But interestingly, Kubernetes is sort of the right abstraction for distributed computing, because it meets people where they are architecturally. It's sort of aligned with this current movement around distributed systems first designs. Microservices, packaging things in small compartmentalized units. >> Good for integrating of existing stuff. >> Absolutely, and it's very composable, un-opinionated architecturally. So you can sort of take an application and structure it in any given way, and as long as it has this sort of isolation boundary of a container, you can run it on Kubernetes without needing to sort of retrofit the architecture, which is really awesome. I think Kubernetes is a foundational part of the next kind of computing paradigm in the same way that Linux was foundational to the computing paradigm that gave rise to the internet. We had commodity hardware meeting open source based sort of cost reduction and efficiency, which really Linux enabled, and the movement toward scale out data center infrastructure that supported the Internet's sort of maturity and infrastructure. I think we're starting to see the same type of repeat effect thanks to Kubernetes basically being really well received by engineers, by the cloud providers. It's now the universal sort of standard for running container based applications on the different cloud providers. >> And think having the non-technical opinion posture, as you said, architectural posture, allows it to be compatible with a new kind of heterogeneous. >> Heterogeneity is critical. >> Heterogeneity is key, 'cause it's not just within the environment, it's also within each vendor, or customer has more heterogeneity. So, okay, now that's key. So multi cloud, I want to get your thoughts on multi cloud, because now this goes into some of things that might build on top of if Kubernetes continues to go down the road that you say it does. Then the next question is, stateful applications, service meshes. >> A lot of buzz words. A lot of buzz words in there. Stateful application's real because at a certain point in time, you have a maturity curve with critical infrastructure that starts to become appealing for stateful mission critical storage systems, which is typically where you have all the crown jewels of a given company's infrastructure, whether it's a transactional system, or reading and writing core customer, or financial service information, or whatever it is. So Kubernetes' starting to hit this maturity curve where people are migrating really serious mission critical storage workloads onto that platform. And obviously we're going to start to see even more critical work loads. We're starting to see Edge workloads because Kubernetes is a pretty low footprint system, so you can run it on Edge devices, you can even run it on microcontrollers. We're sort of past the experimental, you know, fun and games was Raspberry Pi, sort of towers, and people actually legitimately doing real world Edge kind of deployments with Kubernetes. We're absolutely starting to see multi-geo, multi-replication, multi-cloud sort of style architectures becoming real, as well. Because Kubernetes is this API that the industry's agreeing upon sufficiently. We actually have agreement around this sort of surface area for distributed system style computing that if cloud providers can actually standardize on in a way that lets application specific vendors or new types of application deployment models innovate further, then we can really unlock this sort of tight coupling of proprietary services inside cloud providers and disaggregate it. Which is really exciting, and I forget the Netscape, Jim Barksdale. Bundling, un-bundling. We're starting to see the un-bundling of proprietary cloud computing service API's. Things like Kinesis, and ALB and ELB and proprietary storage services, and these other sticky services get un-bundled because of two big things. Open source, obviously, we have open source alternative data paths. And then we have Kubernetes which allows us to sort of disaggregate things out pretty easily. >> I want to hear your thoughts, one final concept, before we break, 'cause I was having a private conversation with three people besides myself. A big time CIO of a company that if I said the name everyone would go, oh my god, that guy is huge, he's seen it all going back many, many ways. Currently done a lot of innovation. A hardcore network chip guy who knows networking, old school infrastructure. And then a cloud native application founder who knows a lot about software development and is state-of-the-art cloud native. So cloud native, all experienced, old-school, kind of about my age, a cloud native app developer, a big time CIO, and a chip networking kind of infrastructure guy. And we're talking, and one thing that came out, I want to get you thoughts on this, he says, so what's going on with DevOps, how do you see this service mesh, is a stay for (mumbles) on top of the stack, no stacks, horizontally scalable. And the comment that came out was storage and networking have had this relationship with everything since day one. Network moves a packet from point A to point B, and nothing happens in between, maybe some inspection. And storage goes from here now to the then, because you store it. He goes, that premise moves up the stacks, so then the cloud native guy goes, well that's what's happening up at the top, there's a lot of moving things around, workloads and or services, provisioning services, and then from now to then state. In real time. And what dawned on the next conversation the CIO goes, well this is exactly our challenge. We have under the hood infrastructure being programmable, >> We're having some trouble with the connection. Please try again. >> My phone's calling me. >> Programmable connections. >> So you got the programmable on the top of the stack too, so the CIO said, that's exactly the problem we're trying to solve. We're trying to solve some of these network storage concepts now at an application level. Your thoughts to that. >> Well, I think if I could tease apart everything you just said, which is profound synthesis of a lot of different things, I think we've started to see application logic leak out of application code itself into dedicated layers that are really good at doing one specific thing. So traditionally we had some crud style kind of behavioral semantics implemented around business logic. And then, inside of that, you also had libraries for doing connectivity and lookups and service discovery and locking and key management and encryption and coordination with other types of applications. And all that stuff was sort of shoved into the single big application binary. And now, we're starting to see all those language runtime specific parts of application code sort of crack or leak out into these dedicated, highly scalable, Unix philosophy oriented sort of like layers. So things like Envoy are really just built for the sort of nervous system layer of application communication fabric up and down the layer two through layer seven sort of protocol transport stack, which is really profound. We're seeing things like Vault from Hashicorp handle secure key storage persistence of application dedication, authorization, metadata and information to sort of access different systems and end points. And that's a dedicated sort of stateful layer that you can sort of fragment out and delegate sort of application specific functionality to, which is really great for scalability reasons. And on, and on, and on. So we've started to see that, and I think one way of looking at that is it's a cycle. It's the sort of bundling and un-bundling aspect. >> One of the granny level services are getting a really low level- >> Yeah, it's a sort of like bundling and un-bundling and so we've got all this un-bundling happening out of application code to these dedicated layers. The bundling back may happen. I've actually seen a few Bay Area companies go like, we're going back to the monolith 'cause it actually gives us lots of efficiencies in things that we though were trade offs before. We're actually comfortable with a big monorepo, and one or two core languages, and we're going to build everything into these big binaries, and everyone's going to sort of live in the same source code repository and break things out through folders or whatever. There's a lot of really interesting things. I don't want to say we're sort of clear on where this bundling, un-bundling is happening, but I do think that there's a lot of un-bundling happening right now. And there's a lot of opportunity there. >> And the open source, obviously, driving it. So final question for you, how many deals have you done? Can you talk a little bit about the firm? And exciting things and plans that you have going forward. >> Yeah, we're going to be making a lot of announcements over the next few months, and we're, I guess, extremely thrilled. I don't want to say overwhelmed, 'cause we're able to handle all of the volume and inquiries and inbound interest. We're really honored and thrilled by the reception over the last couple weeks from announcing the firm on the first of October, sort of before the Hortonworks Cloudera merger. The JFrog funding announcement that week. The Elastic IPO. Just a lot of really awesome things happened that week. This is obviously before Microsoft open sourced all their patents. We'll be announcing more investments that we've made. We announced our first one on the first of October as well with the announcement of the firm. We've made a good number of investments. We're not able to talk to much about our first initiative, but you'll hear more about that in the near future. >> Well, we're excited. I think it's the timing's perfect. I know you've been working on this kind of vision for a while, and I think it's really great timing. Congratulations, JJ >> Thank you so much. Thanks for having me on. >> Joesph Jacks, also known as JJ, founder and general partner of OSS Capital, Open Source Software Capital, co founder of KubeCon, which is now part of the CNCF. A real great player in the community and the ecosystem, great to have him on theCUBE, thanks for coming in. I'm John Furrier, thanks for watching. >> Thanks, John. (bright symphony music)

>> Announcer: From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here are your hosts, Dave Vellante and Stu Miniman. >> 2010 was the first year we brought theCUBE to VMworld. At that time, VMware was a $2.5 billion company with former Microsoft exec Paul Maritz at the helm. Two years earlier, in a stunning development, VMware fired co-founder and CEO Diane Greene, which sent the company's stock tumbling almost 25%. Under pressure from investors, Joe Tucci, the chairman of EMC, made the move after a rocky four-year relationship with Ms. Greene. EMC purchased VMware in 2004 for $635 million. The Maritz years were marked by a strategy to move the company beyond the hypervisor into new areas of growth, including desktop virtualization and applications, which were met with mixed market responses. To Maritz's credit, however, the company continued to expand its presence in the data center, and under his leadership remained highly competitive with Microsoft, who was seen at the time as VMware's main rival. In 2012, the company named long-time Intel and then recently EMC exec, Pat Gelsinger as its CEO. Gelsinger inherited a roughly $4.5 billion company, staring into the teeth of the oncoming cloud megatrend. Gelsinger quickly embarked on a strategy to refocus on the core business, buoyed by a restructuring of many of the VMware assets that EMC and VMware folded into a new company called Pivotal. Gelsinger made several attempts to maintain and expand VMware's total available market with a public cloud play called vCloud Air, which ultimately failed. On the plus side of the ledger, however, Gelsinger led VMware's software-defined data center strategy grabbing pieces of its value chain that were historically left for the ecosystem. Of course, the most notable being NSX, the company's software-defined networking product, and vSan, a software storage play. Fast forward to 2017, and add to these developments the momentum of VMware's cloud management and orchestration offerings, its security and other multi-cloud services, and you now have a nearly $8 billion revenue company growing at 10% per anum, with a $40 billion market cap, and a new owner, namely, Michael Dell and company. Hello, everyone. My name is Dave Vellante and I'm here with Stu Miniman, and this is our VMworld 2017 preview. Stu, thanks for joining me. >> Dave, can't believe it's bene eight years we've been doing theCUBE at VMworld. >> Right, and we have been tracking this, Stu, and now, as we were saying, we see new owners, Michael Dell, Dell buying EMC, and of course VMware maintaining the vast majority of the ownership. Stu, what has changed since Michael Dell purchased VMware? What's changed in terms of Dell, its ownership, and also in the past year? >> Yeah, so it's been one of the top questions. Last year, John Furrier and I interviewed Michael Dell, and there were still everybody trying to say after the acquisition happened, "Aren't you going to just sell of VMware because VMware "needs to be independent, "they need to be able to partner with everyone?" And Michael was basically like, just lit a fire underneath him, and he's like, "People that think I'm going to sell it "don't understand the business plan "and they don't understand math." Everybody thought, "Oh, you got to sell them off "to be able to pay down the debt," and he's like, "No. "VMware has been called the jewel of this acquisition "of EMC, the largest acquisition in tech history." And that relationship of VMware is something that's still playing out. One piece of it, you mentioned vSAN, one of the success stories, there was the failure of EVO:RAIL, which was kind of the first generation solution put together sold through a whole lot of partners. They took that whole product and marketing team and put them together with EMC and created the VxRail team, which now reports up to Chad Sakac. On the Dell/EMC side, VxRail doing quite well, vSAN doing phenomenally well. They claim to have the most number of customers for any product in the hyper-converged infrastructure space. Lots of different solutions out there. So, some of that blending of how Dell/EMC and VMware, we see a little bit of that, but still, VMware partners with everyone. VMworld, still, Dave, is probably the largest infrastructure ecosystem out there, and even if we look at cloud, it's one of the more robust ecosystems out there. The only one probably rivals it these days is Amazon. >> Stu, isn't Dell's ownership of VMware somewhat more threatening to server vendors in particular than EMCs? Especially Cisco, IBM, HPE, large volume movers of VMware licenses, how has that affected the dynamic in the ecosystem? >> Yeah, Dave, we've talked in previous years. I was at EMC back at the beginning of the VMware relationship. EMC really didn't know what it was getting when it got VMware. It was less dollars were going to go into servers because we consolidate with virtualization, and less dollars to servers should mean more dollars to storage, good for EMC. Well, Dell, number one thing that Michael Dell wants to do is sell Dell servers. So, of course, if I'm someone else in that ecosystem, if I'm selling other servers, if I'm selling storage that doesn't run on Dell gear and not part of that Dell ecosystem, absolutely it could be a threat. Micheal has maintained the they're going to keep VMware, allow them to have their independence, and I haven't heard too many rumblings from the ecosystem that they've messed up the apple cart from VMware's standpoint. >> Okay, last year the talk was that Pat Gelsinger was on his way out. >> Stu Miniman: Yeah. >> You see Pat Gelsinger doesn't appear to be on his way out. There's earnings momentum, which we'll talk about, but thoughts on management? >> Yeah, so, right, Dave. Number one thing is we thought Pat would be out. Things are doing better from a stock market. You talked about the growth, 10% per anum right now is solid VMware. We've seen a number of moves and changes, people that, there have been a lot of people that have left. There's new people that have come in. There are areas that are doing quite well, and virtualization is still a mainstay of the data center. One of the things we'll talk about, I know, is that Amazon relationship, which we expect to hear a lot about at the show. Amazon's one of the Global Diamond partners, which, a year ago if you had said that Amazon was one of the top partners up there with the likes of Hewlett Packard Enterprise, OVH took over the vCloud Air business, which is, as you said, it failed from VMware's standpoint. They still have a number of partners. Companies like Rackspace, OVH that took over that vCloud Air business, and lots of service providers are doing quite well selling VMware lots of places. And virtualization still is the foundational layer for most infrastructure. >> So VMware pre-announced earnings to the upside and future growth ahead of expectations, so the stock got a nice pop out of that. What's driving that momentum? >> The two areas you talked about first. vSAN is doing quite well. It's driving a lot of adoption and trying to get VMware to be a little bit more sticky and really kind of slowly expand as opposed to big chunks. We talked about when Pat first went in as CEO, it was, VMware had to play a similar game to what Intel did, Dave, which is how do they expand what they're doing without really ostracizing their ecosystem. And, to their credit, they've done a pretty good job of that. They baked in some backup solutions, but lots of backup solutions, you and I were at the vMon conference earlier this year. VM's still doing a very solid business inside of VMware's ecosystem. Lots of other players that play well there. NSX is really starting to hit its stride, that networking piece, but where a few years ago we were talking about it was VMware versus Cisco, well, they seem to be kind of settling into their swim lanes. Cisco still has their core networking business. Cisco's trying to become more of a software company. Cisco actually recently bought Springpath, which was their hyper-converged product, but today that's far behind what vSAN's doing, revenue, users, and everything like that. AirWatch was another acquisition. Sanjay Poonen really helped drive that forward. So the mobility play, VMware's doing well. A lot of the emerging areas, we've been waiting to see where VMware goes with them. Things that I look at like containerization, server lists, open stack VMware had some plays there. They are really kind of nascent at this point and haven't really exploded. I always look at this show, are we seeing many developers there? Lots of the shows we go to have a big developer group. We'll have a little bit of developers, but it's really still a small piece of the overall picture. There's still lots of virtualization admins, people looking at where VMware fits into cloud, and that's kind of where it sits today. >> Let's talk about the competitive dynamic, which is totally different. I mean, back when we first started covering VMworld with theCUBE, 2010, it was really Citrix, Microsoft, Citrix with VDI. You mentioned AirWatch, which kind of flipped the dynamic a little bit. Quite a bit, actually. But Microsoft was the key virtualization competitor. Now it's like competitors, partners, you've got Google Cloud, now, of course, Diane Greene running Google Cloud, which is kind of ironic. We can talk about that. Microsoft with Azure, AWS, which is, we expect to hear a lot from VMware at VMworld 2017 about the AWS relationship. Certainly, IBM with its cloud. Nutanix, which launched at VMworld several years ago, is now more competitive. You mentioned Cisco. They're clearly more competitive with NSX. How do you describe the competitive landscape? What should we be watching at this year's show? >> Yeah, Dave, first of all, you talked about how VMware grew from kind of the $2.5 billion to more like an $8 billion, so of course they're bumping into, kind of going over some of their swim lanes a little bit, and the market has matured. Absolutely, hyper convergence for the last few years has been one of the hot spots, not only for VMware, first when they launched vSAN, it actually was the tide that rose for a lot of their competitors out there. Nutanix, SimpliVity, many of these companies said that they actually stopped a lot of their outbound marketing for about a year because all the people that called up looking at vSAN went to those solutions. Now vSAN's hitting its stride. It's doing really well. I highlighted how VxRail is doing great revenue on the Dell/EMC side, and there's still lots of partners that VMware has. So hyper converge, absolutely something that we'll see there. Cloud, big piece. I mentioned Rackspace, OVH, all the service providers. The vCloud Air network is still kind of there. So how VMware is getting into the service providers, how they're getting into the cloud, I know we'll talk a little bit more about the cloud piece. Last year it was the Cloud Foundation suite, which takes vSAN, and NSX, and vSphere, puts it all together with a management, and that's something that VMware wants to be able to put on prem in a service provider or in AWS. So really, wherever you go, VMware is going to be there and stretch that, but it's like a four-node star configuration. It doesn't natively go into Amazon. That's been a lot of the lift that's been happening over the last year to try to get that VMware on AWS working, and I hear it's not 100% baked yet by the time we get to the show, but working out a lot of those details. But cloud, hyper-converged, some of the new ones. VDI will still come up too, I'm sure. >> How about Docker? Where do they fit in the competitive landscape? >> Yeah, it's interest, remember, I remember the last year we had the show in San Francisco we had Ben Golub, a CEO at Docker, on the program there. Ben's no longer the CEO. They switched CEO's. We had theCUBE at DockerCon this year. Containers, absolutely very important. VMware has something called VMware Integrated Containers. I hear a little bit about it, but most people, if they're saying, "I'm doing virtualization," they're probably doing it on Linux. So Red Hat Summit this year, heard a lot about containers. We're going to have theCUBE at Kubecon, which is the Kubernetes show, later this year. So we know VMware plays a little bit with Docker. I'd love to see VMware saying how they fit into the Kubernetes piece a little bit more. We heard of the Cloud Foundry Summit earlier this year, how Pivotal kind of fits into that environment and they've got a way to be able to spread across multiple environments there. But VMware tends to play in a little bit more traditional applications. And, Dave, when you talk about a competitive standpoint, that's what I look at for VMware. The biggest threat to them is they don't own the application, so Microsoft, Oracle, IBM, and all those cloud-native apps that are getting put in the public cloud, like Google, and Amazon, and Microsoft, does that leave VMware behind? Does VMware, I heard it many times last year, become the new Legacy? >> Well, and, but they're clearly positioned as an infrastructure player, so let's talk about that. I mean, cloud has become the new, infrastructure and service, become the new big competitive threat to on-prem infrastructure. Wikibon has done some research on the true private cloud. Interestingly, I mean, true private cloud essentially is a moniker representation of public cloud-like attributes on prem, bringing cloud, cloud models, to the data, for example, and Wikibon has forecast that as the largest market. I think I've got some data here. It shows that true private cloud over time will be a $230 billion market, whereas infrastructures and service in the public cloud will be about 150 billion. So you expect that true private cloud is going to overtake that. It's growing faster. The CAG here is 33% versus public IAS at 15%, but the big thing is staff. >> Yeah. >> Staffing, getting taken out essentially, getting out of non-differentiated heavy lifting, but what is VMware's cloud strategy generally, but specifically with regard to bringing the cloud model to the data on prem? >> Yeah, so when we created the true private cloud definition, we said,"Vvirtualization alone is not cloud, "and therefore, what do we need? "We really need to have that automation, "that orchestration." And VMware had done a number of acquisitions, they're putting the suite of solutions together, and it's more than just saying, "Oh, I have six different software products; "here's a bundle." How do we fully integrate that? And that's what the Cloud Foundation suite's what VMware put together so that I can have it in a virtual private cloud in Amazon. And it's something basically VMware manages it, but it's Amazon's data center, and that's plugged into the public clouds. I can do the similar sort of thing in the service providers and that's why, with our forecast, Dave, we show in about five years, true private cloud should have more revenue than public cloud. Big reason is because there's a whole lot of Legacy out there and moving from all of my, most companies hundreds if not thousands of applications, getting all of them to the public cloud is tough. Having them in a virtualized environment and being able to slide them over to this kind of environment makes a lot of sense. I can do that. And the shift of my workloads and my applications going to microservices really starting to break apart some of the the pieces is something that a lot of times that's going to take five to 10 years. So, in the meantime, we're going to shift kind of Legacy to private cloud while we're picking off the things that we can with the public cloud. And VMware with their Cloud Foundation suite and their solutions that they're putting together, networking as, really, the inter fabric with NSX, vSAN making it easy to make those applications a little bit more portable between different types of infrastructure, but that's really, VMware is they put their cloud play, and they have a very large set of partners that they're working with in this space. >> So, Stu, how should we look at the VMware AWS deal? Is it AWS's attempt to get a piece of the true private cloud action on prem? Is it VMware's initiative to try to actually get a cloud strategy that has teeth, and works, and has longevity? How should we think about that? >> Yeah, it's, of course, a little bit of both. At its core, I think it's Amazon looks at 500,000 VMware customers that have data center deployments and they're going to stick a straw into that environment and say, "Come try out the first taste of our services," and once you get on the Amazon services which, by the way, they're launching, what, three new features every week, I think. I was at the Amazon Summit in New York City recently and it was like, "Oh, it's a regional summit," there were like three main announcements. No, I got the email. There were like 12 announcements and each one of them were kind of cool and things like that. So it absolutely is how do I get customers comfortable with moving to this new model. I think one of the things that Microsoft did really well is when they pushed everybody to Office 365, they said, "SaaS is the way you should always think "about buying your applications going forward, not, "I'm going to deploy a server for my Outlook, "I'm going to deploy infrastructure for my SharePoint." It's, "I'm going to buy Office 365 and that's just "the way it's done." So they made it the okay. Now VMware, it's really dangerous, in a way, saying, working with Amazon, now we're saying, "Hey, playing on Amazon's safe. "The water's nice." And once they get in that water and you have access to all of those cool things that Amazon keeps putting out, which, by the way, Dave, the week after they announced the partnership of VMware and AWS, what Amazon announced was, "There's a really easy "migration service that, if you have "a VMware Ware environment, "you just kind of click this button." And I'm pretty sure it's for free. "You can now be completely on AWS "and you don't have to pay for VMware licensing anymore. "Wouldn't that be nice?" >> So, okay, so the way you've phrased it or framed it, is it sounds like that VMware, with its half a million customers, has more to lose than AWS in this deal. Is that the right way to think about it or is this not a zero-sum game? >> I don't think it's a zero-sum game when, you brought up the true private cloud. The data center still, there's room for some growth with VMware, even if people are 90% virtualized now, there's some room for growth there. Public cloud, though, has a strong growth engine, so now VMware has a play there. Rather than saying, "It's the book seller, don't go there," they want to have a play. Michael Dell, Dave, I'm sure we're going to ask him, say, "Hey, what do you think the world's going to look like "in five years? "You've got your Azure Stack partnership "that you're lining up with your server division "and with EMC, you've got Amazon that VMware's playing with, "you've got your data center; "how does that go?" And, of course, Michael being the smart businessman that he is, is going to say, "Uh, yeah, you're going to buy Dell "no matter what solution you go with, "and I'm going to have a strong position "in all of them." but it definitely is, we're in a bit of a transitional phase as to how this is going to look. We've, for years, been arguing how big does public cloud get, what applications go where. I do think that this has the potential to accelerate a little bit from VMware's standpoint. VMware customers getting in this environment, trying out some of the new things. I know lots of people that were in the virtualization community that are now playing in the public cloud, getting certified, doing the same things that they did a decade ago to get on public cloud. So, as those armies of certified people kind of move over in the skillset, we have a generational shift going on and lots of people are going to be like, "Hey, I don't want to spend 12 to 18 months "building a temple for my data anymore. "I can just spin this up really fast and move." It's interesting, Dave, Cycle Computing, one of the earliest customers that we interviewed at Amazon, was just acquired by one of the other cloud guys, not Amazon. So companies that know, that was an HPC company that was, rather than spend 18 months and $10 million, we can do the same thing in, like, a few weeks and $10,000. >> They're super computing in the cloud. All right, let's wrap with what to expect at VMworld 2017. Obviously it's going to be a lot of people there. They're your peeps. A lot of partying going on. It's like, it used to be Labor Day kicked off the fall selling season, and for years it's been VMworld. What should we look for this year? >> Yeah, so, I'm excited, Dave. It's always, this community, they spend like the whole summer getting ready for it. I'm actually going to be sitting on a panel at Opening Acts, which is, the VMunderground group does on Sunday. So the event really, it doesn't start Monday, Dave, it actually, a lot of people are already flying in by the time this video goes up. They're doing things Saturday. On Sunday there's three panels. I'm sitting on one on buzz words in IT, so to things like cloud and server lists. Are those meaningful or are those a total waste of our time? So that kind of gets us started. You mentioned lot of good parties at the show always. There's the vExpert community. I was a vExpert for a number of years back when it was, you know, hundred, couple hundred people. I think there's now 1,500 vExperts worldwide. We've got a bunch of hosts coming in to help us, including John Troyer who created the vExpert program, Keith Townsend, Justin Warren, excited to have them. Lisa Martin's going to be co-hosting, along with you, me, John Furrier and Peter Burris. So we've got a big team. We've got two sets. We've got a great lineup at theCUBE. Two sets, three days in the VMvillage, which this year is on the first floor right outside of the Expo Hall. So it's one of those things I don't expect to sleep a lot. I expect to see a lot of people, bump into 'em on the show floor, stop by theCUBE, see the parties, and definitely see 'em in the after parties. >> Great. Well, as Stu says, we have two sets going on, so please stop by and see us. Stu, thanks very much for helping me with this VMworld preview. We'll see you in Vegas next week. Thanks for watching, everybody. See you in Las Vegas. This is theCUBE. (electronic music)

>> Announcer: Live from Boston, Massachusetts, it's The Cube covering Red Hat Summit 2017. Brought to you by Red hat. >> I'm joined by my co-host, Stu Miniman. Stu, this is day one of the conference: 20 keynotes, six general sessions, people from 70 countries gathered here in Boston, Massachusetts. You are a Red Hat Summit veteran. Thoughts, impressions of the first day. What has struck you really? >> So first of all, it's like Red Hat itself. The company just keeps growing. It's just one of those, you know, strong progress. We talked a little bit over the intro this morning with Dave Vellante as, what is it, 60 quarters consecutively that the company has had revenue growth. It's like, I've worked for a lot of tech companies. It's like, I remember when I worked for (mumbles) when they were doing it (mumbles). They have a miss and the stock kind of drops. IBM, you know, has had quarter and quarter and things like this, but with all of these waves and look, Red Hat's not the biggest company out there, but they are an important player in many changes in the ecosystem. This is one of my favorite developer shows that we cover at the show. Of course, Open Source, we used to say, okay, software's leaving the world and Open Source is eating software. Red Hat's right in the middle of this. I think most people agree. There is really only one way to Red Hat. There's not going to be a Red Hat of something else. There's no one else to really capture that. They got involved at a certain point in time where they could have that model, but they've extended it. They understand what they're doing. They're getting involved in a lot of interesting technologies and there's a lot of people, like most conferences that we go to, there's a lot of passionate people that are really interested, very tech savvy group here, going into all of these breakouts. Many came yesterday for some things. They're coming for a whole week to just dig in, do demos. Down on the show floor, they've got little coating challenges and VR things. I mean there's just a lot of pieces of the show and we only get to see a part of it, but I've enjoyed the customers, the executives, and only one day of three that we're covering so far. >> It is early days in the summit, but where would you say that we are in terms of the maturity of the cloud? We heard from Jim Whitehurst, the CEO, he's going to be on the program tomorrow. He talked about how cloud strategy really is the #1 thing on customers' mind. The cloud is not new and we are really evolving and is maturing, where are we? >> Right, a couple of stats from the keynote this morning. It was 84% of customers have a cloud strategy. Now those of us in the analyst world, we might say, "Well, let's see whether they really have a strategy "they understand," and 59% have a multi-cloud environment which doesn't surprise us. Most people, the joke we used to have was, you had two types of customers, those that were using Amazon and those that didn't realize that some group was using Amazon, reminds me of a comment I made earlier, about like Linux itself. There was always, 15 years ago, big companies would be like, "oh, no, we're a Unix shop," or "we're looking at windows." No, no, no, there's the guy in the corner. He's been using Linux for awhile and that's been a big driver, so cloud absolutely is maturing. I loved, it was an interesting discussion we had with Paul Cormier towards the end of the day. We were seeing Ramgji from Google talking about how we've got the infrastructure and we've got the applications. And I'm an infrastructure guy, but I knew from day one, the reason you build infrastructures is because of your application. If I can just buy SaaS, I don't care about the infrastructure underneath it. The SaaS provider sure does. We talked a lot to SaaS providers as to how they're building their solution. If I'm using infrastructure as a service, you know, there's some I need to understand the infrastructure and there's plenty of infrastructure here, everything from, there's the storage and networking teams, Open Source is permeating every corner of the environment, so it's maturing, but in many ways it's gotten more complex. Cloud was supposed to, many of us thought, simplify the environment, but boy, it seems that many of the things that we had in previous ways as it gets more mature, gets a little bit more complex. Red Hat tries to take those pieces together, build them into solutions. We've talked about there's Red Hat Linux. Enterprise Linux is the platform that can live in many environments. Open Shift is something that allows to encapsulate all of those services, things like containers, we're working with our cloud data applications, and how I want to build them, Open Shift's going to help and you know Cooper Netties goes into the mix so Red Hat is places strategic bets, and, you know, has a strong position in the number place and has big partners. It's really interesting to see. We've had a couple on already, and we'll have many on through the week from key providers in the infrastructure and cloud players out there. >> I think the theme of this year's conference is the power of the individual, and it really is. I mean, we heard from Sam Ramji who said, "This is the age of the developer." Developers have more respect, more veneration, than ever before and yet we also heard from Sandra Rivera, it is also harder than it has ever been before to be a developer because there is just so much data and it's hard to know the difference between the good data and the bad data and where you find the right insights to make decisions that drive the business on that data and if you're a developer, you might not have the business savvy to do that, so it's a real balance here that the companies and developers themselves are trying to strike. Are they doing a good job? I mean, is it still too early? >> It's funny. When you say that it makes me think of in the machine-learning space, it's how do we get the data to train the machine to understand what is good or not, and you know, I wish they'd done that for us when we all went to college because in my job, it's always like, okay, what data can we trust? Well, if you remember from Princess Bride, it was like, with Versini, it was like, well, I know a vendor told me information, so therefore, I know I can't trust that data, but if I take someone else's data, you know, it gets very confusing as it, what I'm saying, is any single piece of data a lot of times you know you can throw that out because maybe it's good, maybe it's not, but how do I get, understand the trends, understand what's going on. I love talking to practitioners here that when they're talking about their business and the impact it's had. We had one of the customers on today was like, "Look, I deployed this, and I have like $6 million "worth of savings in my business year every year. I mean, that's hard information, hard to argue with it. Now are there other solutions that might do that? Sure, but yeah, it's challenging to understand what's good data, what's not good data. As an industry, you know, whether that's the kind of the people or the machines themselves. >> I think the other question that we're all grappling with here is that, and you talked about this earlier, just talking about the evolution of Red Hat that you've seen in coming to this summit all these years. This is a company founded in 1993. Today it has a market cap of $15 billion, 2.4 billion in revenue, nearly 8,000 employees. Can a big company, and it's a big company now, can it innovate, can it truly innovate and we heard in the keynote one of the things that Jim Whitehurst was trying to do was to cultivate a startup mindset. Is that possible? >> Yeah, it's a great question, and I know, Rebecca, you and I've been talking about this throughout the week so far as to big companies have challenges because there are the structure and the organization and what drives the business. What's interesting about Red Hat, of course, is that sure they have products, but underneath it, it's all Open Source, so community is in their DNA. As Paul Cormier said, he's like "We couldn't "buy a company and do it closed-source again." They did that a couple years ago, it didn't go well. They were going to transition it, but it's been a case study that's been written up. (talking over each other) >> Me and Jim in the room alone, yes. >> Absolutely, so what's interesting is Red Hat is more like a community in many ways. As Jim Whitehurst spoke, is the open organizations so they act more like an Open Source community than they do a company, of course, that being said, they're profitable, they have employees, they have benefits, they have locations all around the world so it's been interesting to see how Red Hat adopts certain technologies, contributes to them. You know, it would be interesting to see who else Jim Whitehurst tomorrow and say okay, you know, what is a product that was developed by Red Hat versus a project that was taken in by Red Hat, something I've seen over the last three or four years, a lot of acquisitions they made, it was, let's take Open Stack for example. There is a big survey that's done twice a year that said what are people using and what are they interested in with Open Stack, and it felt like that was the buying guide for Red Hat because it was like, "Oh, okay, here's the sent-to-us stuff, "that was pretty interesting. "Well, we can't buy Konica, we'll buy Sento West," and that comes under the umbrella. "Oh, there's this storage management piece "that actually is open source that people "are using for Open Stack, well let me buy that one, too." So Red Hat has become inquisitive, but it's to get deeper engagement in the community. They are all Open Source so always there is that balance in big companies of what do I do with R & D and what do I do with M & A? And Red Hat has done both. I think they've done a good job of moving the industry forward. Innovation is a lot of times a buzz word, but they do some good stuff. They contribute a lot. People here are very positive about what's going on. Just because they haven't created the next flying car or things like that. >> But they're on that. We heard here that they're thinking about it. I mean, I think that's also, I didn't mean to ask the question insinuating that they're not innovating, but I do think that particularly at a time where we are seeing Microsoft years of no growth, Intel, stalled growth, you know, what is Red Hat's secret sauce, and also what is going to the breaking point for these other lagging enterprise companies? When will we see some new ideas and fresh perspective? >> Yeah, it's interesting 'cause we write this whole, the shift of what's happening with cloud, the wave of the machine-learning, the augmented intelligence or artificial intelligence, how much is that going to ding the traditional companies, especially the infrastructure companies. Red Hat touches it, but they're much broader. Their growth, they're an Open Source company. It's interesting. I've seen a lot of other companies, the Open Sourced-based ones, "Oh, we're not "an Open Source company. "We're an enterprise software company," or "software company." I'm sure we asked Red Hat if they were a software company, they will say well, of course, like everything we deliver is software, but at their DNA, they are Open Source, and that kind of sets them apart from the pack even though there are other examples Dave Vellante went through this morning of other companies that are heavily involved in Open Source, struggling with that how do we monetize Open Source. >> Well, is it a problem with the business model? Why is it so challenging? >> It's a great question. The first time I interviewed Jim Whitehurst, it's like "Jim, why aren't there more billion dollar Open Source companies," and his answer was, you know, Not being flippy," he's like, "Look, selling free is hard." >> Yeah, that's a great point, but I think that we should, we need to dig a little deeper and hopefully we can get to the bottom of that by day three. >> Absolutely, and I tell ya, I'm sitting here listening to, you know, we'll be doing the Cloud Foundry Summit in June there, which is pivotal as making a lot of money with that, but most of the other companies not doing so much. We were just a Docker Con. A couple weeks ago, Docker Company seems to be growing, doing well. They just changed their CEO today so hot news out on SiliconANGLE.com. Ben Golub, the CEO, I just interviewed him a couple weeks ago and now he's moving the board, but they're bringing the Chairman of the Board to be CEO, so we look at all these companies: Cloudera just IPO'd. Hortonworks is a public company. These companies that have Open Core or Open Source as a major piece of what they're doing, none have had the just measured growth and success that Red Hat does, so you know, Red Hat has a case study. It still seems to be one that stands alone category by themselves, but you know, partnering and growing and doing great, and it's exciting to cover. >> Day two, anything you're particularly excited about? >> Yeah, so I got a taste of the AWS-enhanced partnership talking about how Open Shift is going to have deeper integration and we talked a little bit with Paul Cormier so I suspect Jim Whitehurst will be talking to him about it. We have one of the main guys involved in that from Red Hat side will be on our program tomorrow. So the keynote tomorrow, I'll be watching here. Maybe there'll be a special guest during the keynote talk about that announcement some, but you know, obviously a space we watch real closely. We had Optum, one of the customers on today, he said, "I use Open Shift and I'm using Amazon and want to do it most and this is a game-changer for me," so we think this is really interest to watch, really, you talked about maturity early in this segment here, the maturity of hybrid cloud. If Amazon starts to get deeper into the data centers, partnering with companies like Red Hat and like VMware, that will help them to stave off some of the competition that's coming at them. (mumbles) to Microsoft and Google who's getting Cooper Netties everywhere. Lots more to dig in with. There's some announcements today but a lot more to come and you know, more customers, more partners, more Red Hatters. >> That's great, great. Well, we are looking forward to being back here tomorrow bright and early. Thank you for joining us. I'm Rebecca Knight for Stu Miniman. We'll see you back here tomorrow. (innovative tones)

>> Narrator: Live from Austin, Texas. It's theCUBE. Covering DockerCon 2017, brought to you by Docker and support from its ecosystem partners. >> Hi, welcome back. I'm Stu Miniman and this is Silicon Angle Media's theCUBE, worldwide leader in live, enterprise tech coverage here at DockerCon 2017, Austin, Texas. Happy to have on the program, a guest that's been on before. Mazda Marvasti, he's the CEO of appLariat, and he's brought along a managed service provider of his, also a customer of his, Thomas Chamtie, who is the founder of KMicro Technologies. Gentleman, thanks so much for joining me. >> Thank you for having us. >> Thank you sir. >> Alright, so you're both from Orange County, come down here to Austin, I have some local friends of mine they're like, God all these tech conferences are coming down here. I'm like, this seems to be where open source kind of gathers. There's the OSCON coming in a couple weeks, I'll be back later this year for Cube-con, come there. First time for both of you. Just quick, how's the show been for you so far? >> It's been really well received in terms of our product announcement and our company, and not just open source, enterprise. Enterprise applications are all over the place. For us, doing a launch at DockerCon was very appropriate because our company is all about taking your existing applications, new applications and taking them through the journey of not just into the cloud, but into the container era, running on a modern container environment. So it's been well received so far. >> Mazda, it takes some really interesting stuff this week and even the last few months when I've been hearing the cloud space. We've been talking about micro services and cloud-native and everything like that. But customers have, you talk of the enterprise, they've got hundreds if not thousands of existing applications. Therefore, what about them? Ben Golub got on stage, said, "it's not a bimodal world, we need to give them platform, to be able to move forward." That ties into the vision of your company right? >> Oh absolutely. The real problems and the real opportunities are with the existing applications. How do you get those applications same kinds of capabilities that you're trying to give brand new applications being done with microservices. That's why Thomas with KMicro, they're a managed service provider that they're working with customers along the same journey. >> Thomas, before we get into the solution with appLariat, just give us the thumbnail, your background and your company. >> Basically, KMicro as a company is a three year old company, we do managed services for mid to large sized customers. I, myself have been doing IT for about 20 years. Not the fresh guy on the block. But we were introduced to appLariat, when we were looking to do a little project for a client of ours. They had a specific legacy application that they needed to modernize. We're looking for a solution for them that would help them modernize the application, at the same time stay up to date with the latest technologies. Docker seemed, in addition to containerizing, all their application was the solution, was the way to go for them. That's when we were introduced to appLariat and worked together on that project and we've been working with them since then. We love working with these guys, their solution seems to solve a huge issue for a lot of our clients and we look forward to actually doing that again and again for more clients. >> I mean, the challenge here is how does KMicro repeatably do that across customers? So you have consistency which is the same thing when you look at an enterprise. Yeah, I can hand craft an application so that it's containerized and I can deploy it. But how do I get repeatability and consistency across different teams across my applications? That's the scale issue, that you can't use muscle memory to move your applications into the cloud. >> Mazda you're totally right. I've watched the app modernization environment and when you go say, oh what's the killer app, what's the number one thing, it's custom. And that's not scalable, that's not repeatable. Maybe unpack for us a little bit about what you guys bring, that journey along there and how you fit in that spectrum. >> Again, the key is, not to be reliant upon software artists to sit there and script away per application, how does this thing get containerized? What you want to bring is automation and uniformity across these applications. So that you have the same type of consistency for the applications. Then not only that, but when you deploy it, how does the orchestrator manage those deployed containers? Because if you're not going to run it in on an orchestrator, it becomes really difficult to manage it. We use Kubernetes from the backend to actually orchestrate these containers but then you have to have a policy layer that manages that entire infrastructure. Kubernetes is great at knowing that to do, it just doesn't know when to do it. So we provide that when capability. Again, that's a solution that a managed service provider can essentially say okay, now I can repeatably do this across my customers and manage the environments in a similar manner. Versus having to do one-offs. That's what we're trying to get away from. >> Thomas, could you maybe, if it's possible, walk us through a little bit that project with the customer. How long it took, how many people were involved. Where some of the heavy lifting is there. Anything that you've done this, to say oh okay, here's what we've learned for the next time. >> So one of the clients is a GPS tracking company. And they have the DevOps team that were struggling maintaining their code. They have code all over the place. Mazda was more involved on this project than I might have been, so he'll chime in on that. But what we walked out at the end with this client, is that they had a platform that their DevOp could go to and test their code against without having to spend tremendous amount of time or effort into putting all the pieces together. The application will actually do all of that for you from A to Z. They didn't have to worry about storage or processing or memory or any of that stuff. It was just there for them to use. In a second, or a few seconds, they could just conduct an environment, test their code against it, and all was said, when they're done with it, it just shuts down. And it scales up as well, so if they needed to do some testing against an application or a code, they would do the test and then shut down the environment and they're ready to go. And move on. >> Right, the primary use case was that I'm spending way too much money on AWS for DevTest. Because developers would go spin up the VMs and use it to develop and do some unit testing and then the VMs will just live there. So ongoing, continuous basis. Once we put the AWS under a Kubernetes cluster, we're then able to manage the cluster size based on usage and availability, etc. Not only that but then the IT side of the house is able to govern that environment for the developers. The developers don't care to go provision machines or use iAds or anything like that. They just want to deploy their applications, be able to test it and go back and modify code. That's all they care about while IT cares about where does that code go, who looks at it, how does it get tested, what is the cost infrastructure for that. By using our product to manage that AWS cluster, they were able to save 50% on their AWS costs by just managing that DevTest environment. Now we're moving it into production. Those are the kinds of use cases that really you find containerization can bring. You talk about bringing new capabilities to the apps, but it also really goes to cost savings as well. And that was something that-- >> 50% probably conservative even, I would think. We had one of the keynotes case studies this morning, I think it was Visa, was like, 90% of my environment is being utilized less than 10%. >> Mazda: Underutilized, right. >> We know that, heck, I think back, we had server sprawl, we had vm sprawl, now we have cloud sprawl. Is it the whole API economy that allows your software to be able to plug into this, manage some of these environments? How much of it is just cloud, how much is it containers allowing us to do some of this-- >> So every layer we talk about is another layer of abstraction. Cloud is an abstraction, container is an abstraction. Orchestration is an abstraction. Every time you bring these abstractions, you're introducing inefficiency into the system. It brings efficiency in terms of how you develop, how much more secure your application is, how easily you can bring your applications up and down. It brings inefficiencies in terms of these things living on. In terms of sprawl along the cloud boundaries that your applications are running. We bring the efficiency in terms of policies. That says who gets to have what where? And when does it die? Because nothing should live forever. Unless it's your production app, it should not live forever. And when should it die? Expiring those applications and then reclaiming the environment to a smaller size so that your costs are lower or giving the resource to someone else who may need to use it. >> Mazda, Dockers made a real emphasis this week about the ecosystem. Can you talk about partnering with them, how easy it is to work with them, what you're seeing over the last year or so? >> Yeah, we're primarily using the open source Docker containerization mechanism. Because that's really prevalent in the marketplace. We found the same thing in terms of using Kubernetes. Customers are looking for having a degree of control. Close source at a level where your application is running at this point is becoming really difficult. For customers to be able to manage that ability to be able to say okay, I don't have control over this part of my environment, that doesn't make any sense to me. The open source community is really come along in terms of moving the enterprises into their direction. What we're doing is that we're leveraging those open source elements so at the end of the day, we are not in the interconnect between the customer and their applications. They can always go back to those open source tools to manage the applications however they want. We're providing the orchestration layer that sits on top of those open source tools, really unifying them and bringing them together. >> Thomas, what is this whole containerization, your partnership with appLariat mean to your business? How do you expect it to change what you guys are doing? >> There's a couple of things. One of them is modernizing the applications that we talked about a minute ago. But another thing that we wanted to bring on the table and use their solution for was disaster recovery. No one had thought of real time disaster recovery without the efforts of going through a whole bunch of configuration and maintaining, a whole bunch of things. Just to have disaster recovery for a company, no matter what cloud you're in, no matter what infrastructure you use, it doesn't matter. That's when appLariat, we think, is a really good platform that we're going to build on to actually provide what we call real time disaster recovery services for our clients. I think that'll take us, that'll be pretty good for our clients and it's going to help us grow our business as well. >> Yeah, that's another one of those areas where you see a lot of managed service providers providing disaster recovery services but what that means is that they'll provide you a location in the cloud for you to have your application and then services along the lines of people. In bringing those applications to run over there. Then when there is a disaster, have to go through a lot of manual effort to get that site up and running. So what we're talking about, is that if you have your applications already containerized, you can snap shot it anywhere. Once it's snap shotted, it can come up and go down very quickly. Having that ability in terms of being able to provide disaster recovery services on a containerized application is a whole new set of capabilities that now I think it's viable for our organizations. >> Let alone the cost savings as well. Like you were talking about. The cost savings are huge. I only need to speed up the environment when needed. It doesn't have to sit idle, sitting there, costing us money or costing the client money. >> Do you see passing that savings onto your customers? >> Absolutely, absolutely. That's one of the areas that was untapped in the past and with doctoring, containerizing applications technologies, this is the next thing. This is the future of doing disaster recovery. We see it that way. And then we look for-- >> Mazda, oh sorry. >> Yeah, no worries. >> Mazda, want to give you the final word. When people leave DockerCon 2017, what do you want them to know about appLariat and the solutions you're providing. >> What I want them to know is that you don't need to become a scripting ninja to be able to containerize our applications and bring cloud native capabilities to your existing applications. You don't need to become a scripting magician. You can take your existing applications through a very easy process, get them containerized, deploy it on Kubernetes without having to know anything about the underlying infrastructure that it actually takes for those platforms to run. On an ongoing basis, as newer technologies comes along, we'll be the abstraction layer in front of the application for those customers so that they don't need to bother. Do I need to make a bet on something? Do I need to learn new technologies, do I need to upgrade my people? Keep doing what you're doing, your existing CICD process stays as is, your existing developer work levels and skillset remains as is. Everything else should be abstracted and taken away from you. >> Mazda and Thomas, thank you so much for joining us, we'll be back with lots more programming, thanks for watching theCUBE. (electronic music)

>> Narrator: From Austin, Texas, it's theCUBE. Covering DockerCon 2017. Brought to you by Docker and support from it's ecosystem partners. >> Hi, I'm Stu Miniman joining with my co-host Jim Kobielus. We're here with theCUBE at DockerCon 2017. When I talked to John Furrier, he said Stu, at DockerCon, we're going to get Solomon Hykes, the founder. We're going to get Ben Golub, the CEO. And we're also, of course, going to get Marianna Tessle, who is the EVP of Strategic Development. Marianna, thank you for having us back again, we've been having a great event. How is everything with you? >> Thank you first of all, it's great. This is the second day of DockerCon. I think we had a great set of announcement yesterday, and an amazing set of announcement today as well. It's really going great. You know I have been roaming the exhibit hall, and actually a couple of people said this is one of the best shows they have been part of, and this very engaged audience is great to hear. >> From the keynote yesterday, the word that stuck out to me is really scaling. We talk about scaling employment, scaling the ecosystem, and the show itself. I was at that first DockerCon when we were wedged into that hotel room, as Ben joked. We had 100 more people than we told the Fire Marshall. Because it was tight. TheCUBE is usually a little bit smaller footprint than we have at some other shows. But, Austin, first of all, you pick great locations. I mean, San Francisco, Seattle, here. I'm looking forward to... Have we announced yet where next year's is? >> I don't think we've announced it yet. Usually it happens in the afternoon. >> Here in Austin. Talk to us a little about some of those announcements and stuff that you're excited about with growing the ecosystem. >> You know, I'm going to continue the theme you started with scale, and obviously like you said, a lot of things are changing, and scaling. One of the things we have noticed more and more are companies and enterprises have really started to use us more in scale and more in production, more apps, more of that going on. One of the trends we've noticed that actually Ben covered on stage today is that there's not just the leading edge of development and all new apps, web apps, but actually, we are starting to see more of traditional apps coming on board as well. More traditions Ops saying, I want those benefits as well. I do not want to go all the way to the extreme of re-writing my code, and going to microservices. But I can reap a lot of the benefits from Docker rising and putting our tools on top. So we're actually seeing more and more of that. And more and more companies. >> The discussion with Solomon, we talked this morning. He said, Oh, I don't know what Lego set we are. And I said, You know that green, flat piece that you can build everything on top of, so you can have your spaceset, your castle, and all the pieces there. You want to be a platform that can build. One of the announcements you guys had today, it's the modernized traditional applications. Maybe you can walk us through a little bit what that means, you know that mix of microservices verses traditional apps. How you guys see yourself participating in a customer's journey. >> Right. So, when we call this program, by the way it has a nickname, MTA. It's like you said, what we've seen is customers and users that want to have benefit across the board was if they write new code as they have more traditional apps with traditional stacks. What we came up with is a way for you to move from a more traditional to the new and Dockerizing really quickly. One of the things we also announced today, is a go-to market and a program helping customers to do that. We have great partners we announced today and I'm sure we're going to have even more, whether it's Microsoft, Avalon, HPE, and Cisco. What we're going to basically provide is a way for you to very quickly start seeing the benefits. Taking the traditional app, and within days, like five days, you should be able to get it in a modern state and start seeing the benefits from that. It's something that we're going to encourage customers to do very quickly and see the benefits. In fact, we had a customer today, Noran Trust, who's already been doing that, talking about the benefits they've been seeing from this program. >> Marianna, in terms of developer enablement, that's everything to getting Dockerizing, a universal phenomenon for wrapping legacy systems, for refactoring existing code, for building greenfield applications. What will Docker do to continue to improve the experience of Project Moby as an enabler of your ISV ecosystem? Going forward, how do you see the experience of front-end in front of Moby evolving to enable very simplicity and speed of development? >> First of all, I have to say that one of the magic, or secret sauces of Docker is our user experience, and the way we made technologies sometimes that were already available super accessible and super useful for developers and ops and users. So I would say that's definitely something that we have the DNA to do. And a project in Moby, we see ISV's and companies, and it doesn't have to be a company, it could be like users, a company that can come in and collaborate and really create a new component, or a new project from what we're going to put there, and hopefully others as well is a whole set of these Lego building blocks they can assemble. >> Are there any plans of Dockers to provide task-oriented skins or experiences on Moby for different roles, different developer roles associated with particular projects, you know, task, or wrapping a legacy system is a different task, obviously, from developing a greenfield containerized application. So to an extend, will you evolve the tool to enable more task oriented role specific interfaces? >> I would say as far as Moby, and across the company, we do have this realization that it could be that developers started to use Docker first, but actually Ops, and even like we talked about, traditional IT, it's pretty prevalent. So our thought is really to cater to all of these audiences, kind of understand, have a conversation with them and understand what exactly they need and what would make them more productive. An example of what I mentioned with the MTA program, the Modernized Traditional Apps, that one is targeted more towards an Ops audience. Different things we do, we try to understand our audience and engage with them, and see what's going to make them most productive. Both in terms of tool sets and in terms of how we bring it to them. >> Right, right. >> Marianna, we had the opportunity to have some of the partner keynote speakers on theCUBE, John Gossman on from Microsoft yesterday, we had Mark Cavage on from Oracle, here. There's a lot going on. Maybe give our audience a little flavor as to some of the other partner activity going on that we might have missed if we weren't watching close. >> I think we had the same conversation last year, just explaining how important it is for us that we work well with our ecosystem. It's a big part of our plan and strategy, and again confirmation that customers want to use choice, different things, that we're not alone in the world, and we really want to engage with a vast ecosystem. So you saw from Cloud providers to a more on-prem infrastructure to ISV's to networking providers, storage providers. Like a whole understanding and way to be a full platform, we really need to understand how to integrate and how to engage with that ecosystem, and how to help customers have benefits of the entire thing combined. So we've been really looking at who are the different leaders; Sometimes customers take us there, they're like, hey please partner with this company or that company. Understanding mapping of what is needed, and starting from Cloud, infrastructure, network, storage, management, monitoring, security, all the way to ISV's. I would, since you brought up that fact that Mark was here, Mark from Oracle. I do want to talk about that because I think that is maybe even a bit new and unique. Another thing that we announced today, the fact that we have Oracle, Dockerizing their apps and putting them in Docker store and that is big, and again, to us that is obviously big, but again, big for user. It's a very easy way to get software you really need. And not only that, we announced several weeks ago, a certification program. The nice thing about that, if something is certified in store, you can really use that with a lot of trust. You know it's been tested, it's secure. That we made sure that it followed best practices. We made sure that our support engagement with the publisher. Again, geared toward enterprises that really want to have that confidence of downloading something from the store and just using it. Again, Oracle is kind of groundbreaking in putting their software there, and we're very excited about that and we think there is going to be more to come. We really are looking forward to this being an amazing service for our users who want to really start from components that exist and the components that they can trust and be productive very quickly. >> I'm curious, how do you think of the Docker store in relation to things like the Amazon Marketplace, or you know, many of your other partners have their own piece. There really is no kind of enterprise app store today so what do you guys want to own? How do you integrate with partners as you look at that develop over time? >> For us, Docker Store started as an enabler as we saw more and more need from users to to basically, Hey, I want.. Let's say since I talked about Oracle I want to use a database. I don't want to go and Dockerize it again. If somebody already did it and they're already prepared, they already went through it, why wouldn't I just re-use it? So the fact that you can put things in this building block and then move them around, it actually enables the idea that you can re-use the same component between different users. So basically you have here something you can do once, and many people can benefit. So that's the benefit we see. It started with official images long ago. We saw unbelievable traction for it. Users really love it, it makes them productive very quickly. We wanted to expand it to a wider set of ISV's, a wider set of components, a wider set of apps, and make them available. We, right now, see it as more of an enabler and again it's one of those things, listening to our users, listening to our customers, we saw that that's one of the things that will make them productive really quickly. >> One of the things we saw in abundance at DockerCon this year is customers of Visa, MetLife, and so forth, up on stage, talking about how they are using Docker in their business for actual live applications. In terms of partners, are you focusing on particular vertical industries in terms of partnership with ISV's and VAR's, particular geographies? Give us a sense for where you're going in terms of diversification of geographies and industries, and in terms of your focus on partnerships. >> Yeah, and again different parts of the stack require different kinds of partnerships. Like on the South end of the stack on the infrastructure, we're looking for partners that either provide on-prem or Cloud infrastructure, or they can provide a set of plug-ins that integrate with us and a set of tools that can be used with Docker to complete and enhance the overall experience of users using Docker. So that's kind of one set of partnerships that started from hardware vendors, to different plug-ins. On the North side of it as we look at it, we just talked about the fact that we have... >> Jim: Top of the application, the application services end of the staff is the North, right? >> Exactly, and all the way to the content. What you actually put inside and what you run. >> Data, so forth and so on. >> Exactly. We'll form a set of partnerships there and making sure that those components are available in store, those components are Dockerized, that companies can really use that, and obviously Microsoft is a huge partner for us in the OS and as your others as well. >> The storage vendors, like Veritask and so forth, there is a fair amount of data inside the ecosystem that really you're going to continue to develop a partnership. >> Absolutely, Adera, Quadera, you've seen a lot, and we continue partner and seeing what's needed there. Understanding we are trying to predict where customers are today, where they're going to maybe, what they will need a year or two from now, and be ready for that. >> Marianna, that leads me to my final question. We know where you're going to be in Europe, you won't tell us yet the location of the North American show for next year, but as you look at the ecosystem, how do you see that developing? When we sit down with you a year from now, what do you hope to have as the progress? >> As I look at the exhibit hall, I am hoping that we're going to see a bigger exhibit hall with every single DockerCon. And, not just for fun, but really, it kind of indicates the collaboration we have with the ecosystem. I would like us to be known as a trusted and productive partner for our ecosystem. And a trusted and productive partner for our customer. That kind of knows to work together with all these contingencies to have amazing results. Like you said, we seen customers on stage, we seen the press releases of people say it took me months to get VM going, it takes me seconds to get this now going. So you see the kind of productivity and we would like to enhance it even more and get there faster. >> Absolutely, Marianna, always a pleasure to catch up with you. We've got a few more interviews left, two days of live coverage, for Jim Kobielus, and I'm Stu Miniman. Thanks for watching theCUBE. [techno music]

>> Narrator: Live, from Austin Texas it's the Cube. Covering DockerCon 2017. Brought to you by Docker and support from it's ecosystem partners. >> Hi, and welcome back to the Cube SiliconAngle Media's production of DockerCon 2017. I'm Stew Miniman, and joining me for the rap today I have Jim Kobilus who's been my host for the whole day, part of the Wikibon team. Jim, it's been a long day. Your first full day on the Cube, you've been on many times. >> It's been invigorating, I've learned so much. This is an awesomely substantial show. It's been wonderful. We've had so many great guests, oh my gosh. Ben Golub and everybody who came before. Amazing material. >> Stu: And my other guest for the wrap up is John Troyer who's been on the program many times. He sometimes guest host of the program so Chief Reckoner at TechReckoning. John, thanks for joining us. >> Hey, thanks so much for having me, Stu. >> Alright, so you know, we think right, guests we had some really good guests. It's easy for me at the end of the day when you're like oh it's energy flag oh let's have Ben Golub, the CEO of the company that where Docker's gone, and Jerry Chen who always brings energy, part of the V mafia like yourself, John so really interesting stuff. I want to step back, let's talk about the keynote. So I guess John, I'll start with you. Something we've been talking the last year or so is this Docker, Docker, Docker hype. I felt like a little bit of a hype was let out over the last year with the Docker data center, Docker swarm type activity, some of the ecosystem was a little frustrated with the direction that Docker the company was going, compared to where they wanted the open source part to do. Lot of open source, lot of developer talk today. What's your take on the announcements, the ecosystem, opensource? There's so many things, but let's get us started. >> Sure. Well I didn't quite know what to expect, Stu. We hear about Docker going more enterprise, they just made a big enterprise announcement, so I thought we might come in here and hear 45 minutes on digital transformation. And the standard enterprise keynote that you get at every other keynote. And we did not get that this morning. >> I've seen Michael Dell give that keynote in this building. (laughs) So, totally. >> At least we didn't get that here we've all heard that elsewhere. >> Well, at every conference for the last five years, I think. Ten years. So we talked about the ecosystem, that was the first message this morning. It was about growth of the ecosystem, about growth of the partnership, growth of the projects and so that was definitely playing to their strengths, and then they went straight to the code. This was a developer centered keynote, they did live demos with real code. And so they were really playing to the audience here which I think is still predominately developers. So they were signaling that hey, they weren't going all enterprise. Now, the announcements were also interesting. But I think the signal from the keynote was that we are still here, we're all about developer experience, we're about making things simple. >> Yeah, I don't think there's too many shows where you'd start off and they're like oh, here's how you can build really large containers, easier with this multi-part build and filling all this Docker stuff. It's not the suits, it's not the big customers. Having said, does that mean you won't go to tomorrow's keynote because Ben said it's going to be all the enterprise stuff tomorrow. >> I live for the enterprise stuff. I'm really excited about tomorrow. So hopefully, not too much digital transformation. But I think what Docker has announced the last month, not even talking about what happened today, but the Docker packaging, the Docker data, Docker enterprise edition versus consumer edition, and then not consumer, community addition, sorry. And then the tiers of the Docker, Docker enterprise edition, I think is really kind of brilliant. Docker is at a real turning point in its evolution right now. And there was a lot of confusion around what is Docker the project, what is Docker the engine, what is Docker the company, and I think with this kind of packaging, and then with the announcements today, I really think that they've just cleared up a whole lot of confusion in the ecosystem. >> Yeah, I mean coming in I think I heard a lot of people who were really excited that container D got open sourced. We went to, all three of us went to kubernetes event last night that was over at the Google Fiber Space a couple of blocks from here. And it was oh, cool I get all the opensource like Docker one, that stuff I need, but not all that upper level stuff and advanced things that Docker is building in to it so there's opensource pieces. That goes into the Moby project. Docker's committing, doubling down on a lot of this. We're going to take all these pieces. We're going to work on them, community's going to build it, they can take that compostable view of putting their solutions. And Docker will package and have monetization and things that they'll do there but the partner ecosystem can do different things with that. So what do you guys take on, let's just start with the Moby project first, some of these open source, the whole ecosystem. Positive, you think it's good? >> Yes, very much so. So the maturation of the container ecosystem is in the form of, what you see though the announcements, one of which is customization. So customize containers to the finest degree. They've got that capability now with Moby, exactly. It's all about containers everywhere. Containerization of applications is now the dominant theme in the developer community across all segments. So I think Docker has done the right thing which is doubling down on developers, doubling down on the message and the tooling now for both customization of containers but also for portability with the Linux kit announcement and so forth. Containerization, micro services and so forth across all segments. One of the areas I focus on is artificial intelligence, deep learning. Containerization is coming to that in a big way as well. A lot of it is to drive things like autonomous vehicles and drones and whatnot. But we're going to see containerization come to every other segment of data science, deep learning, machine learning and so forth. It's not just the people at this show, it's other developer communities that are coming to containerization in a big way. And Docker is becoming a premier development tool then for them. Or will be. >> So Jim, Stu, I think even more tactically, there was this confusion about Docker the engine, Docker the container run time, Docker the container specification. Now as pulling that out with container D and now with Linux kit, you always had the thing where Red Hat would say well we have open shift, it's like Docker or it has a piece of Docker or it can work with Docker, you have Cloud Foundry it's like Docker, or has a Docker, or can work with Docker now. And so everybody had to do this dance by saying well, we use some of the technology there. Now, very clean split, very different branding, we use Linux kit, we use container D, we use the Moby framework. And that actually will help again, look, the death of commercial success is confusion. If a buyer does not understand how to get what you want or what you're selling, he's never going to buy anything. >> Yeah, I think we've seen the end of Docker's well, batteries included but removable, cause some confusion in the marketplace. People are like well, but it's not easy, that's kind of what's there, I want to be able to choose the pieces up front. We talked about with Brian Gracely earlier today, what is the pinioned platform because there's certain solutions. Microsoft wants to build what they want. And they've lots of options, but when they want to build an upper level service, they have the pieces underneath that they care about. It's not like oh, okay wait. I have to do this, then I have to uninstall this, that was like in Linux all the time. It's like up, I'm recompiling, I'm recompiling, I have to add things in and remove them it's like no, no, no. I want it in box. In the kernel. And then I can choose and activate what I need. >> My guess is that next year, my prediction is that next year at DockerCon Docker will double down on experience, developer experience. There's not a enough of it yet, here. I think that will be a core theme for them going forward to continue to deepen their mind share in that community. >> I actually, I'll take that and double it. So, one of the reasons that, I think one of the factors, that caused VMWare to come to prominence was its operator experience and its simplicity. VMWare HA high availability was a one check box. VMWare distributed resource schedule which moved virtual machines around, one check box, right? And so with Docker's focus on developer usability and developer experience with today's announcements of Linux kit, that could actually be a huge, huge deal. If in the future, the application development pipeline greatly depends on building a just enough operating system as we used to say back in the day of VMWare with Jerry Chen. >> Stu: Yeah, good 'ol juice. >> Yeah, if that becomes the defining characteristic of building cloud native apps, and it is right? The Docker file is the defining document of our time. If that's the case, and now they've taken it into the Linux distribution world, which could have repercussions for the whole ecosystem, that could be Docker's, you know, again, their magic check box, the developer experience of rolling out a custom stack has just been the level has just been raised. And Linux kit is not new to the world. They just open sourced it today. But it's what they're using to get out their Docker for AWS and Docker for Google cloud. And Docker on public clouds already uses it so it's already in production today. I'm super impressed. >> And I think there was potential that it could have caused more confusion or upset in the ecosystem. But we interviewed Red Hat, and Canonical today and I'm not saying that jumped up and down and embraced and said oh goody, but it wasn't it was like okay, that's fine. It's not there, because there's always got to be that cooptive. I mean Jim, you came most recently from IBM. The company that I most associated with that word co-opetition. So, there's always, there's the swim lanes, there's where you partner together and there's where you sometimes bump heads as to strategy. >> Yeah. And I don't think people should be too alarmed, I mean from a technical level, right there's stuff that runs in containers, there's stuff that runs underneath containers. There's still a role for Ubuntu and there's still a role for Red Hat and there's still a role for CoreOS and Rancher. I don't know enough, I don't have enough of a crystal ball to say what we'll be talking about next year. It could actually have a fairly large dripple effect going out in our ecosystem. >> John, you've also, you've dug into with a couple of vendors here, what about the storage space? It's one we've been digging out of bed. There's still the general consensus is, we still have a little ways to go on the maturity and it's the furthest behind. Big surprise just like VMWare. We spent over a decade doing that. What's your take on storage? Any other comments on just the broad ecosystem, just what needs to work, be worked on and improved over time. >> I think storage is the next area that needs to be worked on. I think that's the next piece that we see as still a little bit fragmented. I've heard from many vendors here at the show that even from Docker itself, that the surprising thing is that containers are not just for cloud native apps. A lot of the enterprise journey, and I imagine we're going to hear about that in tomorrow's keynote, starts with containerizing your big legacy apps. >> Yeah, it's funny. I made a comment at the Google cloud event in San Francisco a month ago. I'm like, hey when did lift and shift all of a sudden become sexy? (laughs) It's of course nuanced on that, and we've had a few interviews Jim, where we've talked about look, there's initiatives that we want to do the cool app modernization and everything there but in the meantime, it is not a bimodal world. We're not going to leave our old stuff there and let it slowly have Larry the engineer keep an eye on it and sleep all the time. The whole world kind of needs to move forward, containers are part of the way to give us the bridge to the future if you will. >> Yeah, how do you containerize the legacy app the mainframe app for example, it's got a petabyte of data in its storage, I mean you just got to work through the data, I mean the deep data issues there, you know. >> Yeah, you can run Docker on a mainframe. I mean, I've done interviews on that. You work with those people, Jim. And it's one of those oh wait, okay, right. So there's pieces that'll be updated and people that are changed. John, you and I have talked. I remember early days of VMWare. It was let me take that horrible 10 year old application that's running on Windows NT which is going into life, and my hardware's going to die, let me shove it into VM and leave it there for another five, ten years. And it was like, please don't do that. >> Sometimes the real world intrudes. I think we are, part of this problem does get smoothed over or confused but we're talking about both on prem apps and public cloud apps. And that can get a little confusing because the storage issues, going back to storage, are a little different. Right? Especially in the public cloud, you've got issues of data locality, you've got issues of latency, even performance and so you see a number of vendors who are approaching it. It's very easy to connect the container to some sort of persistent volume. It is very hard to give something that its performance and is backed up and is, you know is going to be there. People have spent, the storage industry has spent decades on those problems. I don't think we're there yet in terms of the generic container that is floating either in public cloud or on prem. >> And they can handle the hybrid cloud, hybrid data clouds of which there are a myriad in terms of high public private zones within a distributed data architecture with varying degrees of velocity and variety. Managing all that data in a containerized environments with rich orchestration among them, to replication and streaming and so forth. >> You can do it, but it's not, it's cutting edge right now. >> Yeah, it's cutting edge. >> So, John last question I have to ask you is something near and dear to your heart. When you talk about careers and people that are doing, there's a lot of people here, people I used to see in the VMWare community that learning all the cool new stuff. Anything you see is Docker doing evangelism? Program the influencer program type thing? Are you seeing anything in the educational spaces from career space, what can you share? >> Sure, Docker is very rich in community it's kind of been the engine of their growth. They've long had a huge user group program, they have a campus program, they have a mentorship program, and they also have the Docker captains. The Docker captains started, oh I don't know, a year, a year and a half ago and is an advocacy program, I think there's 70 of them now, they work very closely with them. The come from all across the ecosystem which is kind of interesting. Everybody from Dehli MC and many companies. So that's pretty cool that these people, it feels a lot like early days of VMWare, these people have day jobs but yet they spend their nights and weekends hacking on Docker. And Docker takes advantage of that, I mean in the best sort of way. They give them opportunities, they give them platforms to speak, they give them platforms to help others. And I see that's in full force here. They have a track here at the show, so Dockers are leaning heavily on its community. I even saw one person here, Stu from from a mainline storage company said you know what, my company's not here but I am because I have to learn how to do this. I think people who are here have a good next phase of their career. >> That's a smart. A community advocacy program of that sort is actually is even more important than an event like this in terms of deepening the loyalty of the developers to leverage providers and their growing stacks. >> John: Docker the company is very small. There's a very large community and a very small company. >> Stu: Three hundred and some odd people. >> They have to leverage those resources. >> John: Exactly. >> Well, Jim thanks for all your help co-hosting today, John, really appreciate you coming in, especially some of that community ecosystem expertise that you bring. By the way, John's going to be co-hosting open stack summit with me. Another one that will have lost (mumbles) where that ecosystem community is and where it's going in a couple of weeks in my home state of Massachusetts in Boston. So be sure to tune in tomorrow, we've got a full day of coverage. First guest is going to be Solomon Hykes coming off the day two keynote. We're going to talk a little bit more about enterprise. We got a full lineup of guests. So be sure to check out siliconangle.tv for everything there. So for Jim Kobielus, John Troyer and myself Stu Miniman, thank you for watching day one of the Cube's coverage of DockerCon 2017. (upbeat music)

>> Narrator: Live from Austin, Texas, it's The Cube covering DockerCon 2017 brought to you by Docker and support from its ecosystem partners. (upbeat tech music) >> Hi, I'm Stu Miniman and this is SiliconANGLE Media's The Cube. We're the worldwide leader in enterprise tech coverage. Happy to be coming to you from DockerCon 2017 here in the Austin Convention Center of course in Austin, Texas. My host for the next few days will be Jim Kobielus, Jim thank you so much for joining us. >> It's great to join the team. >> Alright, so we'll get to you in a second, Jim, but first of all, it is the fourth year of the DockerCon show Docker The Company, just celebrated its fourth year of existence, CEO Ben Golub started off the keynote Founder, CTO, Chief Product Guy, Solomon Heights, introduced a bunch of opensource initiatives, did a bunch of demos, the first DockerCon event back in 2014, I actually had the pleasure of attending, was my favorite show of that year, I got to hear some of these HyperScale guys talk about how they were using containers, how Google spins up and spins down two billion containers in a week and there were about 400 people there and Docker, the company, was 42 people. Fast forward to where we are today in 2017, Docker, the company, I believe is 320 people, there is over 5,500 people here, you can see 'em all streaming in behind me here as the Keynote just let out, so, we've got two full days here of coverage. This morning, we're going to go through a little bit of the news, talk about who we're going to cover, but first of all, I want to introduce you to Jim Kobielus, so John Furrier sends his regards to the community, he's real sorry he couldn't make it out, just had some things came up at the last minute, so he couldn't come, but stepping in for him with lots of knowledge and experience is Jim, so Jim, please, for our audience that hasn't gotten chance to see, you did some intro videos with our crew out in our 4,500 square foot Palo Alto studio at the beginning of the month, but why don't you tell 'em what brought you to the SiliconANGLE Media team, your background, and what you're going to be doing. >> Great, yeah, thanks Stu. Yeah, I've joined just recently in the last few weeks, I am Wikibon's lead analyst for application development as well as data science and deep learning. I create data science and the development of artificial intelligence as a huge and really one of the predominant developer themes now in the business world and really much of that that's going on in business in terms of development of the AI applications is in the form of microservices in containerized format for deployment out to multiclouds and increasingly serverless computing environments. So, I am totally pumped and excited to be at DockerCon and there were some great announcements this morning, I was very impressed that this community is making great progress, both on the sheer complexity and sophistication of the ecosystem, but on just the amount of support for Docker technology, for Kubernetes and so forth for the full range of technologies that enable containerized application development. Hot stuff. >> Yeah, Jim, and you talked about things like community and ecosystem and that was definitely the theme here day one. Docker did some changing in their packaging since we were at the show last year. They now have Docker CE which is the community edition. Focus on the developers and today was developer day. I'm pretty sure everything that was announced today is opensourced, it's in there, it's in the free version. I expect tomorrow we'll probably hear more about EE, it's the Enterprise Edition >> Enterprise, yes. >> A question I know we all have is how is the monetization of what Docker's doing progressing, the press and analyst dinner last night, I heard from a Docker employee and said look, we all understand, we are the early days of the monetization of Docker, but Solomon, this morning, said really, the success of Docker the company is tied directly to the ecosystem. We've got Microsoft coming on today, we've got Sysco, Oracle, lots of partners coming on this week talk about what Docker's doing, what's happened in opensource is going to help a broad ecosystem and all, not just the developers, but enterprises and the companies, so, what are you looking at this week, what are you hoping to come out of, what grabbed you from the Keynotes this morning? >> Well, grabbing from the Keynotes this morning is the maturation of the containerized Docker ecosystem in the form of greater portability, in terms of the LinuxKit announcement, we'll get to that later, as well as great customization capabilities to the Moby project. This is just milestones in the development and maturation of a truly robust ecosystem of innovation, really, what Docker's all about now that it's a real platforms company, is helping its partners to be raving successes in this rapidly expanding marketplace, so, that's what I see, the chief themes so far of this today. >> Yeah and it's interesting, one of the things we've always looked at Docker is like what does the opensource community do, what does the company do, what's the co-opetition play? Two years ago at the show in San Francisco, there was taking the container run time and really making sure that's opensource. You had the CoreOS guys and the Docker guys hugging. I got a picture of Ben Golub and Alex Polvi standing together and it was like oh, okay, that little cold war was over. LinuxKit is something we're going to look at, they lined up some really good partners. We got Intel, Microsoft, HPE, and IBM, but, we're going to talk to Red Hat and Canonical and see what they think about this because from the Linux guys, I've been hearing for the last couple of years, well, Linux really is containers. It's all just something that sits on top and containers, of course, is the Windows variant now, too, but you just buy your Linux and Containers comes with it and now, we say oh, we've got LinuxKit which is, I'm going to have a distribution that's fast, optimized, four containers that Docker and that ecosystem they're building's going to do. >> Same as everywhere, I mean Ben Golub laid it out maybe with Solomon this morning. Containers are really the predominant packaging of applications large and small across increasingly not just traditional enterprise and consumer applications but also the internet of things, so, but internet of things and the development of AI for the IOT is a huge theme that I'm focusing on in my coverage for Wikibon. I see a fair amount of enablers for that here. >> Great, and Jim, and absolutely, there was a big slide with Docker will be where you need to be, so, whether you're in the public cloud, of course, there's container services from, we've got Amazon ECS right here. You've got what's going on with Google and their containers. Microsoft Badger of course, so, there's so many pieces, so, a lot we're going to go through, we've got a full slate of interviews, of course, everybody can watch here at SiliconANGLE TV. If you want to participate in social conversation, John Furrier's actually been banging away, it's CrowdChat.net/DockerCon is where we're having some of the social conversations, of course, you can always reach out, I'm just @Stu on Twitter, Jim is @JamesKobielus which you'll see on the lower third when we put him up here is where he is on Twitter, if you're at the Expo Hall, you'll see the Expo Hall's behind us, we're just in the corner of the Expo Hall, going to be here for two days. Jim, I want to give you the final word on our intro here, come to the end of the day, what do you hope to have walked away with? >> Well, I hope to walk away with a more rich and nuance understanding of this ecosystem and the differentiators among the dozen upon dozens of companies here. Partners of Docker. Really what I see is a huge growth of the Kubernetes segment in terms of orchestration, scaling, of cluster management for all things to do with, not just Docker, but really Container D, which, of course, Docker recently opensourced, it's core container engine. I think this is totally exciting to see just the vast range of specialty vendors in the area providing tools to help you harden your containerized microservices environment for your CloudNative computing environments, that's what I hope to take away. I'm going to walk these halls when I'm not physically on The Cube and talk to these vendors here, exciting stuff, innovation. >> Yeah, absolutely, and you gave us so many pieces there, Jim. You mentioned Kubernetes, of course. There is that little bit of do I use Dockers Forum or do I use Kubernetes? Docker, of course, would like you to use Forum, that's what they're >> And in fact, that was an excellent discussion this morning about swarms advantages as well. I don't want to make it sound like I'm totally shifting towards Kubernetes in terms of my preferences. I mean, clearly, it's a highly innovative and dynamic space, so, Docker is making some serious investments and beefing up their entire enterprise stack including Swarm. >> Where I wanted to go, actually, with that is the Moby project actually is one of those things I saw as a nice maturation of what we hear from Docker. For the first couple of years, Docker said batteries are included but swapable, which means things like Swarm are going to make it in there, but you could use an alternative, so you want to use Kubernetes, go ahead and that's fine and Moby has allowed them to take all the components that are opensource. People inside Docker can work on them, people outside can collaborate them, much more modular. Reminds me of how when we talk about how development teams work, it's those two pizza teams, Docker has them internal, they're pulling more people in, how is that opensource collaboration going to expand? Scalability, I think, is the word that I heard over and over again in the Keynote. Scaling of the company, scaling of the products, scaling of the ecosystem, so something more interesting, say, we've been scaling our operations and we got two full days here of coverage so make sure to stay with The Cube for everything we've got here and thank you for watching The Cube. (upbeat tech music)