>>LA from Las Vegas. It's the cube covering AWS reinvent 2019 brought to you by Amazon web services and along with its ecosystem partners. >>Welcome back to Vegas, Lisa Martin with John farrier. We are live at AWS reinvent in the expo hall at the sands convention center. There's tons of people in here. You could probably hear some of the background AWS expecting 65,000 or so folks. John, how many of those 65,000 and have you talked to in the last two days? >>Well, I can hear all the conversations happening at once. It's about hybrid cloud, IOT edge data, machine learning. my head's going to come. >>I was going to say lots of cool stuff. John and I are pleased to be joined by Greg Coralville, the VP of products and strategy for Blackberry Q. Next group. Welcome to the program >>to be here with 65,000 of our closest friends. >>His friends. Exactly. So Blackberry, cute X. What's it all about? >>What's it all about? Well, we do software. We do embedded software for mission critical systems at this event, at the AWS reinvent over showing a software and a really cool car, a karma, and we're connecting it to the AWS IOT backend services and showing some really, really cool use cases. Some of which are near term summer, which are a bit longer term are pretty exciting. Take a quick minute to describe Kunis. Is background acquired by Blackberry system history legacy? Exactly. Just take a quick minute to explain that. So we were founded in 1980 and then developing software for mission critical devices and medical, industrial. And then we started developing software for automotive in 1998 so we've been in automotive for about 20 years and developing originally an infotainment and then digital instrument clusters, telematic systems, gateways, safety systems, acoustics systems, pretty much becoming the software platform in the car because in the car, the car, the software is to be reliable, safe, secure. >>So we're trusted to deliver that. In automotive, we were acquired by Blackberry in 2010 and we're bringing the best of Blackberry and automotive and all of our other markets. So Lisa and I always talk about IOT is RPA automation. All this stuff's going on. But one of the things that comes up is we're trying to grok what's the software development environment in the cloud, in the car, and a Amazon one by having great API APIs. Yep. That was one of their core design principles. Is there a similar design principle from a car standpoint? Because if I'm an app developer, I just love, I have my mobile app sit on the car, right? But I don't want to have to become an expert on all the nuances of is there a connector? So is there going to be multiple platforms? What's the, what's the principle? Can you explain that a great question and great observation. >>So cars traditionally have been proprietary, pretty much closed systems and started open up with CarPlay and Android auto or all of a sudden you saw your mobile device being able to communicate with the car and now I could run Android apps, I could run iOS apps and started to open it up a bit. And now what you've seen is cars are becoming more connected, they're becoming more automated, eventually autonomous. Um, they're definitely, and what you're seeing in the car is in order for that car to really evolve and to offer connected services and shared mobility and the electrification that's occurring, the automotive industry is going through a disruption. We've all heard that and it really is true. So to the point where the electronics in the car, the networks in the car, the software in the car, it's getting completely redesigned and you're seeing a lot more high end processors. >>You're seeing safety critical systems, which have always been in cars, but now you're seeing a lot more complexity. And that speaks to exactly what we do. So where that car's going, if you think about it, is moving to more of a software platform. You have applications and mobile devices. Why? Because you've got Android and you've got iOS. That car is moving to that sort of a common platform where with the help of AWS connected services, the cubix Blackberry Punic software platform in the car, all of a sudden that'll open the door to that kind of environment to applications, to connected services. And that's exactly where it's going. So connectivities, it's here and it's going to be predominant through a pretty much all the vehicles coming off the line in the coming years. So you're going to see the connectivity and now we can bring the services and the apps to that vehicle. But at the same time you got to keep it safe, got to keep it secure. Gotta keep it reliable. You know, it's the classic mobile device, bingo literal device on wheels, right of two ton mobile device on wheels. >>Doc disruption sounds really cool and it's consumers. We just had this expectation that we can have whatever I want, the whole experience I want. And obviously as everything evolves, we want it to be safer and safer. And as there's laws and regulations that govern, Hey, you're going to get hefty fines if you're seeing with this device and you're driving. But disruption is really challenging, right? We talked, we got some great examples yesterday on stage with Andy Jassy of Goldman Sachs, right? How many years old are they and how they have leveraged disruption to revolutionize their consumer business or healthcare revolutionizing. I'd love to get your perspective on what are some of the automakers that are bleeding edge going, we get it. We want to work with you guys so that they understand that this the, you know, the, the mobile devices, the connected device on wheels is going to be transformative for their business. >>Good point. So first of all, every automaker we work with and we work, we work with almost 50 auto makers and we're over a hundred. We're in over 150 million vehicles and multiple systems in the cars. They're all putting safety first. That's never really changed. But that remains primary, primary objective. And to your point is how do you maintain that safety net reliability while at the same time opening the door to connectivity, making sure that vehicle is secure and resilient to attacks and whatnot. And you've seen some of those attacks in the past. And the industry is learning. Um, but that's, that's exactly what, that's what speaks to us and what we do. Same thing with AWS. If you think about what we do, we're plumbers. We, we build plumbing in the car, AWL splits, plumbing in the cloud. And I've had that call, those conversations with AWS and they're like, yeah, we're plumbers. >>And I said, so are we, we're going to get along great. But to your point, we have to keep our eye on security. Our definitely our eye on privacy and safety. And that's exactly what we do. As much as we all want the consumer apps and the connected experience at the same time, we can't compromise on that. So the good thing in automotive is there's a automotive safety standards, ISO two, six, two, six, two and whatnot, which we've certified our products to and we're going to keep doing that and keep delivering that software in the car. But that's awesome for 0.2 ton mobile device on wheels. So we got to always be aware of that. Great opportunity. People want more conduct and safety too. And that's a huge thing. Security and safety. I want to get to that in a second, but I got to ask you, um, what is the relationship that you guys have with Amazon? >>Could you explain that? And what are you guys doing at reinvent this year? Is your leg a presentation demo? Take a minute to explain the relationship between queen Nixon and Amazon web services and what you're showing here. Well, we're in the connected home exhibit. In fact, we're in the quote unquote garage where we've got a vehicle, a beautiful karma Rivero GT. And I was told it's the first time there's actually a car at reinvent. So that was pretty cool. And it's a cool car if you get a chance, come on over. And what we've done is we've taken the karma vehicle and we've actually connected it to AWS IOT. So if you think about what we do, we do software in the car, as I was saying earlier. And then we worked with the Amazon team, with the AWS team to say, okay, what can we do? So one of the things we're doing is we're doing battery monitoring and prediction in terms of the life of the battery. >>That's one of the things that we're doing. The other thing we're doing is personalized cockpit, which is, which is pretty exciting. And, and the last thing we're doing is kind of a business to business demonstration, um, where it's data orchestrations. If you think about the vehicle, there's a lot of sensors on the vehicle, a lot of information available on the vehicle. And what we're doing with AWS is pulling information from the vehicle, putting it in the cloud. And then we've got a few examples that we're using. So one of them is an application for an auto detailing company where they might want, you might want to have your vehicle detailed where we can make the position of your vehicle available, GPS, the VIN number. So the identify the identification of the vehicle. Um, and then you could actually contract with that expert detailings what we called them to come to your vehicle, clean the vehicle, detail your vehicle within a finite period of time securely. >>And then you'll get notified when it's done and whatnot. We're doing facial recognition in the vehicle and we also put some ML in machine learning in the car. We're actually showing gesture recognition where I can fold the mirrors with a, with a peace sign or victory signs. I could have the mirrors fold in. Uh, I can, I can interact with the infotainment system. I can personalize the music and whatnot. So really personalizing the cockpit. But all through the power of AWS. Sorry, what are we going to have to the car flying cars? Come on Jetsons flyers. I love this coming. Maybe not the flying carpet. Wow. Okay. Flying cars. Fine. I mean, I always say anything else that's in star Trek or star Wars will be invented. So I'm respecting some flying vehicles. All fun aside. Yeah. Now the serious conversation is safety and security. >>Worst case scenario, my car is hacked. Take over. This is a fear. Again, it's the worst. It's a doom season here. Those stories are straight. All IOT device. It's a car. How do you guys view the security posture? Um, good question. This is concerned. It might be on people's mind. Yeah. And that's what really speaks to where our company has been for almost four decades now. You know, when people would ask me, Hey, where would I find Punic software? Blackberry Punic software, I'd say almost everywhere, but the desktop. So where things have to be reliable, safe, secure work all the time. That's where you'll find our software. So factory floor, we're in laser eye surgery. Machines are in patient monitoring devices, MRI machines. And so essentially those areas which are safety critical, where safety, security and reliability, you know, our top real really industrial IOT thing, big time, big time. >>And that's the cool thing about walking around reinvent. There's all kinds of industrial devices and control. So if you go to the car now, if you think about the vehicle, same fundamental needs, reliability, safety, security, and we're trusted to deliver an automotive. So security is one of those things. It's not static. So when you, when you, when you make something that's secure, you're really building something that's resilient to attacks. So you'd be as resilient as possible to prevent attacks. And then you do whatever you can to prevent any malicious act or actions on that. So we will monitor what's going on in the system. We'll monitor any communications going to the car, for instance. So the minute we detect something a bit of normal, we can take action based on that. So that, that's absolutely key, especially given the cars connected and more and more becoming connected. >>What's the opportunity is in a trucking industry, when I think of the number of sensors on trucks, the regulations that you know for drivers safety in terms of how many hours they actually have to be able to can drive. What's the opportunity there for Q next? >>Good question. So everything we're doing in the car, which I should generalize and say a vehicle applies to trucks. So if you think about trucking or vehicles or drones or anything like that, you have multiple sensors that you have to interact with. You have to interpret that information, you have to take action based on that information. So if we look at trucking specifically, everybody knows a major shortage of truck truck, truck drivers. So when people ask me about autonomous cars and Hey, when are we going to see autonomy's vehicles? I always look at trucking and we're working with companies, trucking companies that are using our technology. And one of the first use cases that they're putting forward is something called platooning, where you'll actually have the first truck on the road with a driver and any other trucks on the road. We'll be operating autonomously essentially following like a train if you want on a highway, and then they'll have a starting location and a drop off location and that all of a sudden becomes a real world scenario, which makes use of the same sensors, LIDAR, radar cameras, et cetera. >>So from a trucking perspective, we look at it very similar to a car and automotive perspective because they need the same fundamental technologies. So pretty exciting. Like I said, what we do applies all over the place and again, all going to be connected. But grant, thanks for coming on. I really appreciate, I want to get your final thoughts, at least from my perspective on developers. When you see deep racer, you see that trend. It's kind of, they've got LIDAR, it's kind of a toy, but people geeking out on this. And so I would imagine that we're going to see an emergence of a software development environment where as a controlled sandboxes, cause yeah, they've got the concern with the industrial equipment. Exactly. Yeah. How do you balance that old school industrial mindset of, you know, IOT with the new rapid agile product development? Yeah. And to your point, we're going through that transition now. >>So this is where things like Sage maker come into play where I can develop out and develop and refine machine learning models in the cloud. You still have those tight control loops that you need and there's tools for that. So that's the deeply embedded stuff that's controlling actuators and whatnot. You still need that. But to your point, you need to be more iterative. You need to be more agile, need to develop according to the safety standards and the various industries that they might be in. So it's that is evolving and it's evolving at exactly the right pace. Really glad to see that evolution. But to your point, all of these devices are going to become interconnected. There's going to be new opportunities. And from a developer perspective, you know, we can't hire enough developers. No one can. It's really exciting whether it's IOT cloud developers or embedded developers. >>There's such an exciting future ahead. And I got to ask, this is just popped in my head. So I want to ask, cause I'm curious, um, spectrum and RF power is great, but you need connectivity to make an IOT device work, right? How do you guys, how does the car folks look at conductivity? Just when they get to a spot they can connect. So is it managing the spectrum? How are cars thinking about the connectivity? So we work very closely with the modem vendors. For instance, in today in cars you'll see Bluetooth, you'll see wifi, you'll see 4g. Obviously there's the emergence of 5g. Um, vehicle to vehicle communications is through something called DSRC. Essentially wifi 5g is going to come along, so now you're going to be able to have throughput and also what's called low latency. So quick turn around on your messages and the information being exchanged. >>So that too is evolving from a, from a QA software perspective, we'll make use of whatever modems there. But to your point, we also have to deal with the cases where I've lost connectivity. I still need that V vehicle to operate safely. And especially if you consider that the systems might be, um, uh, the systems might be connected or we don't want to make, make it such that they're dependent on that connectivity. So you have to have fail over scenarios and whatnot, but cars will become connected, devices will become connected. We're going to take advantage of that connectivity, but not be dependent on that connectivity. >>Well, Greg, please let me know when that, uh, personalized service is available so that my car can be found and detailed. They'd find it right in my driveway going lady, please. It's been a pleasure, a really cool stuff. Blackberry Kunis thank you for joining John. We'll be, we'll have to go check out that car for John furrier. I'm Lisa Martin. You're watching the cube live in Vegas at AWS. Reinvent 19. Thanks for watching.

(uplifting music) >> Hello, welcome back to theCUBE's coverage of CloudNativeSecurityCon, the inaugural event, in Seattle. I'm John Furrier, host of theCUBE, here in the Palo Alto Studios. We're calling it theCUBE Center. It's kind of like our Sports Center for tech. It's kind of remote coverage. We've been doing this now for a few years. We're going to amp it up this year as more events are remote, and happening all around the world. So, we're going to continue the coverage with this segment focusing on the data stack, entrepreneurial opportunities around all things security, and as, obviously, data's involved. And our next guest is a friend of theCUBE, and CUBE alumni from 2013, entrepreneur himself, turned, now, venture capitalist angel investor, with his own firm, Opher Kahane, Managing Director, Sonoma Ventures. Formerly the founder of Origami, sold to Intuit a few years back. Focusing now on having a lot of fun, angel investing on boards, focusing on data-driven applications, and stacks around that, and all the stuff going on in, really, in the wheelhouse for what's going on around security data. Opher, great to see you. Thanks for coming on. >> My pleasure. Great to be back. It's been a while. >> So you're kind of on Easy Street now. You did the entrepreneurial venture, you've worked hard. We were on together in 2013 when theCUBE just started. XCEL Partners had an event in Stanford, XCEL, and they had all the features there. We interviewed Satya Nadella, who was just a manager at Microsoft at that time, he was there. He's now the CEO of Microsoft. >> Yeah, he was. >> A lot's changed in nine years. But congratulations on your venture you sold, and you got an exit there, and now you're doing a lot of investments. I'd love to get your take, because this is really the biggest change I've seen in the past 12 years, around an inflection point around a lot of converging forces. Data, which, big data, 10 years ago, was a big part of your career, but now it's accelerated, with cloud scale. You're seeing people building scale on top of other clouds, and becoming their own cloud. You're seeing data being a big part of it. Cybersecurity kind of has not really changed much, but it's the most important thing everyone's talking about. So, developers are involved, data's involved, a lot of entrepreneurial opportunities. So I'd love to get your take on how you see the current situation, as it relates to what's gone on in the past five years or so. What's the big story? >> So, a lot of big stories, but I think a lot of it has to do with a promise of making value from data, whether it's for cybersecurity, for Fintech, for DevOps, for RevTech startups and companies. There's a lot of challenges in actually driving and monetizing the value from data with velocity. Historically, the challenge has been more around, "How do I store data at massive scale?" And then you had the big data infrastructure company, like Cloudera, and MapR, and others, deal with it from a scale perspective, from a storage perspective. Then you had a whole layer of companies that evolved to deal with, "How do I index massive scales of data, for quick querying, and federated access, et cetera?" But now that a lot of those underlying problems, if you will, have been solved, to a certain extent, although they're always being stretched, given the scale of data, and its utility is becoming more and more massive, in particular with AI use cases being very prominent right now, the next level is how to actually make value from the data. How do I manage the full lifecycle of data in complex environments, with complex organizations, complex use cases? And having seen this from the inside, with Origami Logic, as we dealt with a lot of large corporations, and post-acquisition by Intuit, and a lot of the startups I'm involved with, it's clear that we're now onto that next step. And you have fundamental new paradigms, such as data mesh, that attempt to address that complexity, and responsibly scaling access, and democratizing access in the value monetization from data, across large organizations. You have a slew of startups that are evolving to help the entire lifecycle of data, from the data engineering side of it, to the data analytics side of it, to the AI use cases side of it. And it feels like the early days, to a certain extent, of the revolution that we've seen in transition from traditional databases, to data warehouses, to cloud-based data processing, and big data. It feels like we're at the genesis of that next wave. And it's super, super exciting, for me at least, as someone who's sitting more in the coach seat, rather than being on the pitch, and building startups, helping folks as they go through those motions. >> So that's awesome. I want to get into some of these data infrastructure dynamics you mentioned, but before that, talk to the audience around what you're working on now. You've been a successful entrepreneur, you're focused on angel investing, so, super-early seed stage. What kind of deals are you looking at? What's interesting to you? What is Sonoma Ventures looking for, and what are some of the entrepreneurial dynamics that you're seeing right now, from a startup standpoint? >> Cool, so, at a macro level, this is a little bit of background of my history, because it shapes very heavily what it is that I'm looking at. So, I've been very fortunate with entrepreneurial career. I founded three startups. All three of them are successful. Final two were sold, the first one merged and went public. And my third career has been about data, moving data, passing data, processing data, generating insights from it. And, at this phase, I wanted to really evolve from just going and building startup number four, from going through the same motions again. A 10 year adventure, I'm a little bit too old for that, I guess. But the next best thing is to sit from a point whereby I can be more elevated in where I'm dealing with, and broaden the variety of startups I'm focused on, rather than just do your own thing, and just go very, very deep into it. Now, what specifically am I focused on at Sonoma Ventures? So, basically, looking at what I refer to as a data-driven application stack. Anything from the low-level data infrastructure and cloud infrastructure, that helps any persona in the data universe maximize value for data, from their particular point of view, for their particular role, whether it's data analysts, data scientists, data engineers, cloud engineers, DevOps folks, et cetera. All the way up to the application layer, in applications that are very data-heavy. And what are very typical data-heavy applications? FinTech, cyber, Web3, revenue technologies, and product and DevOps. So these are the areas we're focused on. I have almost 23 or 24 startups in the portfolio that span all these different areas. And this is in terms of the aperture. Now, typically, focus on pre-seed, seed. Sometimes a little bit later stage, but this is the primary focus. And it's really about partnering with entrepreneurs, and helping them make, if you will, original mistakes, avoid the mistakes I made. >> Yeah. >> And take it to the next level, whatever the milestone they're driving with. So I'm very, very hands-on with many of those startups. Now, what is it that's happening right now, initially, and why is it so exciting? So, on one hand, you have this scaling of data and its complexity, yet lagging value creation from it, across those different personas we've touched on. So that's one fundamental opportunity which is secular. The other one, which is more a cyclic situation, is the fact that we're going through a down cycle in tech, as is very evident in the public markets, and everything we're hearing about funding going slower and lower, terms shifting more into the hands of typical VCs versus entrepreneur-friendly market, and so on and so forth. And a very significant amount of layoffs. Now, when you combine these two trends together, you're observing a very interesting thing, that a lot of folks, really bright folks, who have sold a startup to a company, or have been in the guts of the large startup, or a large corporation, have, hands-on, experienced all those challenges we've spoken about earlier, in turf, maximizing value from data, irrespective of their role, in a specific angle, or vantage point they have on those challenges. So, for many of them, it's an opportunity to, "Now, let me now start a startup. I've been laid off, maybe, or my company's stock isn't doing as well as it used to, as a large corporation. Now I have an opportunity to actually go and take my entrepreneurial passion, and apply it to a product and experience as part of this larger company." >> Yeah. >> And you see a slew of folks who are emerging with these great ideas. So it's a very, very exciting period of time to innovate. >> It's interesting, a lot of people look at, I mean, I look at Snowflake as an example of a company that refactored data warehouses. They just basically took data warehouse, and put it on the cloud, and called it a data cloud. That, to me, was compelling. They didn't pay any CapEx. They rode Amazon's wave there. So, a similar thing going on with data. You mentioned this, and I see it as an enabling opportunity. So whether it's cybersecurity, FinTech, whatever vertical, you have an enablement. Now, you mentioned data infrastructure. It's a super exciting area, as there's so many stacks emerging. We got an analytics stack, there's real-time stacks, there's data lakes, AI stack, foundational models. So, you're seeing an explosion of stacks, different tools probably will emerge. So, how do you look at that, as a seasoned entrepreneur, now investor? Is that a good thing? Is that just more of the market? 'Cause it just seems like more and more kind of decomposed stacks targeted at use cases seems to be a trend. >> Yeah. >> And how do you vet that, is it? >> So it's a great observation, and if you take a step back and look at the evolution of technology over the last 30 years, maybe longer, you always see these cycles of expansion, fragmentation, contraction, expansion, contraction. Go decentralize, go centralize, go decentralize, go centralize, as manifested in different types of technology paradigms. From client server, to storage, to microservices, to et cetera, et cetera. So I think we're going through another big bang, to a certain extent, whereby end up with more specialized data stacks for specific use cases, as you need performance, the data models, the tooling to best adapt to the particular task at hand, and the particular personas at hand. As the needs of the data analysts are quite different from the needs of an NL engineer, it's quite different from the needs of the data engineer. And what happens is, when you end up with these siloed stacks, you end up with new fragmentation, and new gaps that need to be filled with a new layer of innovation. And I suspect that, in part, that's what we're seeing right now, in terms of the next wave of data innovation. Whether it's in a service of FinTech use cases, or cyber use cases, or other, is a set of tools that end up having to try and stitch together those elements and bridge between them. So I see that as a fantastic gap to innovate around. I see, also, a fundamental need in creating a common data language, and common data management processes and governance across those different personas, because ultimately, the same underlying data these folks need, albeit in different mediums, different access models, different velocities, et cetera, the subject matter, if you will, the underlying raw data, and some of the taxonomies right on top of it, do need to be consistent. So, once again, a great opportunity to innovate, whether it's about semantic layers, whether it's about data mesh, whether it's about CICD tools for data engineers, and so on and so forth. >> I got to ask you, first of all, I see you have a friend you brought into the interview. You have a dog in the background who made a little cameo appearance. And that's awesome. Sitting right next to you, making sure everything's going well. On the AI thing, 'cause I think that's the hot trend here. >> Yeah. >> You're starting to see, that ChatGPT's got everyone excited, because it's kind of that first time you see kind of next-gen functionality, large-language models, where you can bring data in, and it integrates well. So, to me, I think, connecting the dots, this kind of speaks to the beginning of what will be a trend of really blending of data stacks together, or blending of models. And so, as more data modeling emerges, you start to have this AI stack kind of situation, where you have things out there that you can compose. It's almost very developer-friendly, conceptually. This is kind of new, but kind of the same concept's been working on with Google and others. How do you see this emerging, as an investor? What are some of the things that you're excited about, around the ChatGPT kind of things that's happening? 'Cause it brings it mainstream. Again, a million downloads, fastest applications get a million downloads, even among all the successes. So it's obviously hit a nerve. People are talking about it. What's your take on that? >> Yeah, so, I think that's a great point, and clearly, it feels like an iPhone moment, right, to the industry, in this case, AI, and lots of applications. And I think there's, at a high level, probably three different layers of innovation. One is on top of those platforms. What use cases can one bring to the table that would drive on top of a ChatGPT-like service? Whereby, the startup, the company, can bring some unique datasets to infuse and add value on top of it, by custom-focusing it and purpose-building it for a particular use case or particular vertical. Whether it's applying it to customer service, in a particular vertical, applying it to, I don't know, marketing content creation, and so on and so forth. That's one category. And I do know that, as one of my startups is in Y Combinator, this season, winter '23, they're saying that a very large chunk of the YC companies in this cycle are about GPT use cases. So we'll see a flurry of that. The next layer, the one below that, is those who actually provide those platforms, whether it's ChatGPT, whatever will emerge from the partnership with Microsoft, and any competitive players that emerge from other startups, or from the big cloud providers, whether it's Facebook, if they ever get into this, and Google, which clearly will, as they need to, to survive around search. The third layer is the enabling layer. As you're going to have more and more of those different large-language models and use case running on top of it, the underlying layers, all the way down to cloud infrastructure, the data infrastructure, and the entire set of tools and systems, that take raw data, and massage it into useful, labeled, contextualized features and data to feed the models, the AI models, whether it's during training, or during inference stages, in production. Personally, my focus is more on the infrastructure than on the application use cases. And I believe that there's going to be a massive amount of innovation opportunity around that, to reach cost-effective, quality, fair models that are deployed easily and maintained easily, or at least with as little pain as possible, at scale. So there are startups that are dealing with it, in various areas. Some are about focusing on labeling automation, some about fairness, about, speaking about cyber, protecting models from threats through data and other issues with it, and so on and so forth. And I believe that this will be, too, a big driver for massive innovation, the infrastructure layer. >> Awesome, and I love how you mentioned the iPhone moment. I call it the browser moment, 'cause it felt that way for me, personally. >> Yep. >> But I think, from a business model standpoint, there is that iPhone shift. It's not the BlackBerry. It's a whole 'nother thing. And I like that. But I do have to ask you, because this is interesting. You mentioned iPhone. iPhone's mostly proprietary. So, in these machine learning foundational models, >> Yeah. >> you're starting to see proprietary hardware, bolt-on, acceleration, bundled together, for faster uptake. And now you got open source emerging, as two things. It's almost iPhone-Android situation happening. >> Yeah. >> So what's your view on that? Because there's pros and cons for either one. You're seeing a lot of these machine learning laws are very proprietary, but they work, and do you care, right? >> Yeah. >> And then you got open source, which is like, "Okay, let's get some upsource code, and let people verify it, and then build with that." Is it a balance? >> Yes, I think- >> Is it mutually exclusive? What's your view? >> I think it's going to be, markets will drive the proportion of both, and I think, for a certain use case, you'll end up with more proprietary offerings. With certain use cases, I guess the fundamental infrastructure for ChatGPT-like, let's say, large-language models and all the use cases running on top of it, that's likely going to be more platform-oriented and open source, and will allow innovation. Think of it as the equivalent of iPhone apps or Android apps running on top of those platforms, as in AI apps. So we'll have a lot of that. Now, when you start going a little bit more into the guts, the lower layers, then it's clear that, for performance reasons, in particular, for certain use cases, we'll end up with more proprietary offerings, whether it's advanced silicon, such as some of the silicon that emerged from entrepreneurs who have left Google, around TensorFlow, and all the silicon that powers that. You'll see a lot of innovation in that area as well. It hopefully intends to improve the cost efficiency of running large AI-oriented workloads, both in inference and in learning stages. >> I got to ask you, because this has come up a lot around Azure and Microsoft. Microsoft, pretty good move getting into the ChatGPT >> Yep. >> and the open AI, because I was talking to someone who's a hardcore Amazon developer, and they said, they swore they would never use Azure, right? One of those types. And they're spinning up Azure servers to get access to the API. So, the developers are flocking, as you mentioned. The YC class is all doing large data things, because you can now program with data, which is amazing, which is amazing. So, what's your take on, I know you got to be kind of neutral 'cause you're an investor, but you got, Amazon has to respond, Google, essentially, did all the work, so they have to have a solution. So, I'm expecting Google to have something very compelling, but Microsoft, right now, is going to just, might run the table on developers, this new wave of data developers. What's your take on the cloud responses to this? What's Amazon, what do you think AWS is going to do? What should Google be doing? What's your take? >> So, each of them is coming from a slightly different angle, of course. I'll say, Google, I think, has massive assets in the AI space, and their underlying cloud platform, I think, has been designed to support such complicated workloads, but they have yet to go as far as opening it up the same way ChatGPT is now in that Microsoft partnership, and Azure. Good question regarding Amazon. AWS has had a significant investment in AI-related infrastructure. Seeing it through my startups, through other lens as well. How will they respond to that higher layer, above and beyond the low level, if you will, AI-enabling apparatuses? How do they elevate to at least one or two layers above, and get to the same ChatGPT layer, good question. Is there an acquisition that will make sense for them to accelerate it, maybe. Is there an in-house development that they can reapply from a different domain towards that, possibly. But I do suspect we'll end up with acquisitions as the arms race around the next level of cloud wars emerges, and it's going to be no longer just about the basic tooling for basic cloud-based applications, and the infrastructure, and the cost management, but rather, faster time to deliver AI in data-heavy applications. Once again, each one of those cloud suppliers, their vendor is coming with different assets, and different pros and cons. All of them will need to just elevate the level of the fight, if you will, in this case, to the AI layer. >> It's going to be very interesting, the different stacks on the data infrastructure, like I mentioned, analytics, data lake, AI, all happening. It's going to be interesting to see how this turns into this AI cloud, like data clouds, data operating systems. So, super fascinating area. Opher, thank you for coming on and sharing your expertise with us. Great to see you, and congratulations on the work. I'll give you the final word here. Give a plugin for what you're looking for for startup seats, pre-seeds. What's the kind of profile that gets your attention, from a seed, pre-seed candidate or entrepreneur? >> Cool, first of all, it's my pleasure. Enjoy our chats, as always. Hopefully the next one's not going to be in nine years. As to what I'm looking for, ideally, smart data entrepreneurs, who have come from a particular domain problem, or problem domain, that they understand, they felt it in their own 10 fingers, or millions of neurons in their brains, and they figured out a way to solve it. Whether it's a data infrastructure play, a cloud infrastructure play, or a very, very smart application that takes advantage of data at scale. These are the things I'm looking for. >> One final, final question I have to ask you, because you're a seasoned entrepreneur, and now coach. What's different about the current entrepreneurial environment right now, vis-a-vis, the past decade? What's new? Is it different, highly accelerated? What advice do you give entrepreneurs out there who are putting together their plan? Obviously, a global resource pool now of engineering. It might not be yesterday's formula for success to putting a venture together to get to that product-market fit. What's new and different, and what's your advice to the folks out there about what's different about the current environment for being an entrepreneur? >> Fantastic, so I think it's a great question. So I think there's a few axes of difference, compared to, let's say, five years ago, 10 years ago, 15 years ago. First and foremost, given the amount of infrastructure out there, the amount of open-source technologies, amount of developer toolkits and frameworks, trying to develop an application, at least at the application layer, is much faster than ever. So, it's faster and cheaper, to the most part, unless you're building very fundamental, core, deep tech, where you still have a big technology challenge to deal with. And absent that, the challenge shifts more to how do you manage my resources, to product-market fit, how are you integrating the GTM lens, the go-to-market lens, as early as possible in the product-market fit cycle, such that you reach from pre-seed to seed, from seed to A, from A to B, with an optimal amount of velocity, and a minimal amount of resources. One big difference, specifically as of, let's say, beginning of this year, late last year, is that money is no longer free for entrepreneurs, which means that you need to operate and build startup in an environment with a lot more constraints. And in my mind, some of the best startups that have ever been built, and some of the big market-changing, generational-changing, if you will, technology startups, in their respective industry verticals, have actually emerged from these times. And these tend to be the smartest, best startups that emerge because they operate with a lot less money. Money is not as available for them, which means that they need to make tough decisions, and make verticals every day. What you don't need to do, you can kick the cow down the road. When you have plenty of money, and it cushions for a lot of mistakes, you don't have that cushion. And hopefully we'll end up with companies with a more agile, more, if you will, resilience, and better cultures in making those tough decisions that startups need to make every day. Which is why I'm super, super excited to see the next batch of amazing unicorns, true unicorns, not just valuation, market rising with the water type unicorns that emerged from this particular era, which we're in the beginning of. And very much enjoy working with entrepreneurs during this difficult time, the times we're in. >> The next 24 months will be the next wave, like you said, best time to do a company. Remember, Airbnb's pitch was, "We'll rent cots in apartments, and sell cereal." Boy, a lot of people passed on that deal, in that last down market, that turned out to be a game-changer. So the crazy ideas might not be that bad. So it's all about the entrepreneurs, and >> 100%. >> this is a big wave, and it's certainly happening. Opher, thank you for sharing. Obviously, data is going to change all the markets. Refactoring, security, FinTech, user experience, applications are going to be changed by data, data operating system. Thanks for coming on, and thanks for sharing. Appreciate it. >> My pleasure. Have a good one. >> Okay, more coverage for the CloudNativeSecurityCon inaugural event. Data will be the key for cybersecurity. theCUBE's coverage continues after this break. (uplifting music)

(bright music) >> Hello everyone and welcome back to AWS re:Invent, here in wonderful Las Vegas, Nevada. We're theCUBE. I am Savannah Peterson. Joined with my co-host, Dave Vellante. Day four, you look great. Your voice has come back somehow. >> Yeah, a little bit. I don't know how. I took last night off. You guys, I know, were out partying all night, but - >> I don't know what you're talking about. (Dave laughing) >> Well, you were celebrating John's birthday. John Furrier's birthday today. >> Yes, happy birthday John! >> He's on his way to England. >> Yeah. >> To attend his nephew's wedding. Awesome family. And so good luck, John. I hope you feel better, he's got a little cold. >> I know, good luck to the newlyweds. I love this. I know we're both really excited for our next guest, so I'm going to bring out, Lena Smart from MongoDB. Thank you so much for being here. >> Thank you for having me. >> How's the show going for you? >> Good. It's been a long week. And I just, not much voice left, so. >> We'll be gentle on you. >> I'll give you what's left of it. >> All right, we'll take that. >> Okay. >> You had a fireside chat, at the show? >> Lena: I did. >> Can you tell us a little bit about that? >> So we were talking about the Rise, The developer is a platform. In this massive theater. I thought it would be like an intimate, you know, fireside chat. I keep believing them when they say to me come and do these talks, it'll be intimate. And you turn up and there's a stage and a theater and it's like, oh my god. But it was really interesting. It was well attended. Got some really good questions at the end as well. Lots of follow up, which was interesting. And it was really just about, you know, how we've brought together this developer platform that's got our integrated services. It's just what developers want, it gives them time to innovate and disrupt, rather than worry about the minutia of management. >> Savannah: Do the cool stuff. >> Exactly. >> Yeah, so you know Lena, it's funny that you're saying that oh wow, the lights came on and it was this big thing. When when we were at re:Inforced, Lena was on stage and it was so funny, Lena, you were self deprecating like making jokes about the audience. >> Savannah: (indistinct) >> It was hilarious. And so, but it was really endearing to the audience and so we were like - >> Lena: It was terrifying. >> You got huge props for that, I'll tell you. >> Absolutely terrifying. Because they told me I wouldn't see anyone. Because we did the rehearsal the day before, and they were like, it's just going to be like - >> Sometimes it just looks like blackness out there. >> Yeah, yeah. It wasn't, they lied. I could see eyeballs. It was terrifying. >> Would you rather know that going in though? Or is it better to be, is ignorance bliss in that moment? >> Ignorance is bliss. >> Yeah, yeah yeah. >> Good call Savannah, right? Yeah, just go. >> The older I get, the more I'm just, I'm on the ignorance is bliss train. I just, I don't need to know anything that's going to hurt my soul. >> Exactly. >> One of the things that you mentioned, and this has actually been a really frequent theme here on the show this week, is you said that this has been a transformative year for developers. >> Lena: Yeah. >> What did you mean by that? >> So I think developers are starting to come to the fore, if you like, the fore. And I'm not in any way being deprecating about developers 'cause I love them. >> Savannah: I think everyone here does. >> I was married to one, I live with one now. It's like, they follow me everywhere. They don't. But, I think they, this is my opinion obviously but I think that we're seeing more and more the value that developers bring to the table. They're not just code geeks anymore. They're not just code monkeys, you know, churning out lines and lines of code. Some of the most interesting discussions I've had this week have been with developers. And that's why I'm so pleased that our developer data platform is going to give these folks back time, so that they can go and innovate. And do super interesting things and do the next big thing. It was interesting, I was talking to Mary, our comms person earlier and she had said that Dave I guess, my boss, was on your show - >> Dave: Yeah, he was over here last night. >> Yeah. And he was saying that two thirds of the companies that had been mentioned so far, within the whole gamut of this conference use MongoDB. And so take that, extrapolate that, of all the developers >> Wow. >> who are there. I know, isn't that awesome? >> That's awesome. Congrats on that, that's like - >> Did I hear that right now? >> I know, I just had that moment. >> I know she just told me, I'm like, really? That's - >> That's so cool. >> 'Cause the first thing I thought of was then, oh my god, how many developers are we reaching then? 'Cause they're the ones. I mean, it's kind of interesting. So my job has kind of grown from, over the years, being the security geek in the back room that nobody talks to, to avoiding me in the lift, to I've got a seat at the table now. We meet with the board. And I think that I can see that that's where the developer mindset is moving towards. It's like, give us the right tools and we'll change your world. >> And let the human capital go back to doing the fun stuff and not just the maintenance stuff. >> And, but then you say that, you can't have everything automated. I get that automation is also the buzzword of the week. And I get that, trust me. Someone has to write the code to do the automation. >> Savannah: Right. >> So, so yeah, definitely give these people back time, so that they can work on ML, AI, choose your buzzword. You know, by giving people things like queriable encryption for example, you're going to free up a whole bunch of head space. They don't have to worry about their data being, you know harvested from memory or harvested while at rest or in motion. And it's like, okay, I don't have to worry about that now, let me go do something fun. >> How about the role of the developer as it relates to SecOps, right? They're being asked to do a lot. You and I talked about this at re:Inforce. You seem to have a pretty good handle on it. Like a lot of companies I think are struggling with it. I mean, the other thing you said said to me is you don't have a lack of talent at Mongo, right? 'Cause you're Mongo. But a lot of companies do. But a lot of the developers, you know we were just talking about this earlier with Capgemini, the developer metrics or the application development team's metrics might not be aligned with the CSO's metrics. How, what are you seeing there? What, how do you deal with it within Mongo? What do you advise your customers? >> So in terms of internal, I work very closely with our development group. So I work with Tara Hernandez, who's our new VP of developer productivity. And she and her team are very much interested in making developers more productive. That's her job. And so we get together because sometimes security can definitely be seen as a blocker. You know, funnily enough, I actually had a Slack that I had to respond to three seconds before I come on here. And it was like, help, we need some help getting this application through procurement, because blah, blah, blah. And it's weird the kind of change, the shift in mindset. Whereas before they might have gone to procurement or HR or someone to ask for this. Now they're coming to the CSO. 'Cause they know if I say yes, it'll go through. >> Talk about social engineering. >> Exactly. >> You were talking about - >> But turn it around though. If I say no, you know, I don't like to say no. I prefer to be the CSO that says yes, but. And so that's what we've done. We've definitely got that culture of ask, we'll tell you the risks, and then you can go away and be innovative and do what you need to do. And we basically do the same with our customers. Here's what you can do. Our application is secure out of the box. Here's how we can help you make it even more, you know, streamlined or bespoke to what you need. >> So mobile was a big inflection point, you know, I dunno, it seems like forever ago. >> 2007. >> 2007. Yeah, iPhone came out in 2007. >> You remember your first iPhone? >> Dave: Yeah. >> Yeah? Same. >> Yeah. It was pretty awesome, actually. >> Yeah, I do too. >> Yeah, I was on the train to Boston going up to see some friends at MIT on the consortium that I worked with. And I had, it was the wee one, 'member? But you thought it was massive. >> Oh, it felt - >> It felt big. And I remember I was sitting on the train to Boston it was like the Estella and there was these people, these two women sitting beside me. And they were all like glam, like you and unlike me. >> Dave: That's awesome. >> And they, you could see them like nudging each other. And I'm being like, I'm just sitting like this. >> You're chilling. >> Like please look at my phone, come on just look at it. Ask me about it. And eventually I'm like - >> You're baiting them. >> nonchalantly laid it on the table. And you know, I'm like, and they're like, is that an iPhone? And I'm like, yeah, you want to see it? >> I thought you'd never ask. >> I know. And I really played with it. And I showed them all the cool stuff, and they're like, oh we're going to buy iPhones. And so I should have probably worked for Apple, but I didn't. >> I was going to say, where was your referral kickback on that? Especially - >> It was a little like Tesla, right? When you first, we first saw Tesla, it was Ray Wong, you know, Ray? From Pasadena? >> It really was a moment and going from the Blackberry keyboard to that - >> He's like want to see my car? And I'm like oh yeah sure, what's the big deal? >> Yeah, then you see it and you're like, ooh. >> Yeah, that really was such a pivotal moment. >> Anyway, so we lost a track, 2007. >> Yeah, what were we talking about? 2007 mobile. >> Mobile. >> Key inflection point, is where you got us here. Thank you. >> I gotchu Dave, I gotchu. >> Bring us back here. My mind needs help right now. Day four. Okay, so - >> We're all getting here on day four, we're - >> I'm socially engineering you to end this, so I can go to bed and die quietly. That's what me and Mary are, we're counting down the minutes. >> Holy. >> That's so sick. >> You're breaking my heart right now. I love it. I'm with you, sis, I'm with you. >> So I dunno where I was, really where I was going with this, but, okay, there's - >> 2007. Three things happened. >> Another inflection point. Okay yeah, tell us what happened. But no, tell us that, but then - >> AWS, clones, 2006. >> Well 2006, 2007. Right, okay. >> 2007, the iPhone, the world blew up. So you've already got this platform ready to take all this data. >> Dave: Right. >> You've got this little slab of gorgeousness called the iPhone, ready to give you all that data. And then MongoDB pops up, it's like, woo-hoo. But what we could offer was, I mean back then was awesome, but it was, we knew that we would have to iterate and grow and grow and grow. So that was kind of the three things that came together in 2007. >> Yeah, and then Cloud came in big time, and now you've got this platform. So what's the next inflection point do you think? >> Oh... >> Good question, Dave. >> Don't even ask me that. >> I mean, is it Edge? Is it IOT? Is there another disruptor out there? >> I think it's going to be artificial intelligence. >> Dave: Is it AI? >> I mean I don't know enough about it to talk about it, to any level, so don't ask me any questions about it. >> This is like one of those ignorance is bliss moments. It feels right. >> Yeah. >> Well, does it scare you, from a security perspective? Or? >> Great question, Dave. >> Yeah, it scares me more from a humanity standpoint. Like - >> More than social scared you? 'Cause social was so benign when it started. >> Oh it was - >> You're like, oh - I remember, >> It was like a yearbook. I was on the Estella and we were - >> Shout out to Amtrak there. >> I was with, we were starting basically a wikibond, it was an open source. >> Yeah, yeah. >> Kind of, you know, technology community. And we saw these and we were like enamored of Facebook. And there were these two young kids on the train, and we were at 'em, we were picking the brain. Do you like Facebook? "I love Facebook." They're like "oh, Facebook's unbelievable." Now, kids today, "I hate Facebook," right? So, but social at the beginning it was kind of, like I say, benign and now everybody's like - >> Savannah: We didn't know what we were getting into. >> Right. >> I know. >> Exactly. >> Can you imagine if you could have seen into the future 20 years ago? Well first of all, we'd have all bought Facebook and Apple stock. >> Savannah: Right. >> And Tesla stock. But apart from, but yeah apart from that. >> Okay, so what about Quantum? Does that scare you at all? >> I think the only thing that scares me about Quantum is we have all this security in place today. And I'm not an expert in Quantum, but we have all this security in place that's securing what we have today. And my worry is, in 10 years, is it still going to be secure? 'Cause we're still going to be using that data in some way, shape, or form. And my question is to the quantum geniuses out there, what do we do in 10 years like to retrofit the stuff? >> Dave: Like a Y2K moment? >> Kind of. Although I think Y2K is coming in 2038, isn't it? When the Linux date flips. I'll be off the grid by then, I'll be living in Scotland. >> Somebody else's problem. >> Somebody else's problem. I'll be with the sheep in Glasgow, in Scotland. >> Y2K was a boondoggle for tech, right? >> What a farce. I mean, that whole - >> I worked in the power industry in Y2K. That was a nightmare. >> Dave: Oh I bet. >> Savannah: Oh my God. >> Yeah, 'cause we just assumed that the world was going to stop and there been no power, and we had nuclear power plants. And it's like holy moly. Yeah. >> More than moly. >> I was going to say, you did a good job holding that other word in. >> I think I was going to, in case my mom hears this. >> I grew up near Diablo Canyon in, in California. So you were, I mean we were legitimately worried that that exactly was going to happen. And what about the waste? And yeah it was chaos. We've covered a lot. >> Well, what does worry you? Like, it is culture? Is it - >> Why are you trying to freak her out? >> No, no, because it's a CSO, trying to get inside the CSO's head. >> You don't think I have enough to worry about? You want to keep piling on? >> Well if it's not Quantum, you know? Maybe it's spiders or like - >> Oh but I like spiders, well spiders are okay. I don't like bridges, that's my biggest fear. Bridges. >> Seriously? >> And I had to drive over the Tappan Zee bridge, which is one of the longest, for 17 years, every day, twice. The last time I drove over it, I was crying my heart out, and happy as anything. >> Stay out of Oakland. >> I've never driven over it since. Stay out of where? >> Stay out of Oakland. >> I'm staying out of anywhere that's got lots of water. 'Cause it'll have bridges. >> Savannah: Well it's good we're here in the desert. >> Exactly. So what scares me? Bridges, there you go. >> Yeah, right. What? >> Well wait a minute. So if I'm bridging technology, is that the scary stuff? >> Oh God, that was not - >> Was it really bad? >> It was really bad. >> Wow. Wow, the puns. >> There's a lot of seems in those bridges. >> It is lit on theCUBE A floor, we are all struggling. I'm curious because I've seen, your team is all over the place here on the show, of course. Your booth has been packed the whole time. >> Lena: Yes. >> The fingerprint. Talk to me about your shirt. >> So, this was designed by my team in house. It is the most wanted swag in the company, because only my security people wear it. So, we make it like, yeah, you could maybe have one, if this turns out well. >> I feel like we're on the right track. >> Dave: If it turns out well. >> Yeah, I just love it. It's so, it's just brilliant. I mean, it's the leaf, it's a fingerprint. It's just brilliant. >> That's why I wanted to call it out. You know, you see a lot of shirts, a lot of swag shirts. Some are really unfortunately sad, or not funny, >> They are. >> or they're just trying too hard. Now there's like, with this one, I thought oh I bet that's clever. >> Lena: It is very cool. Yes, I love it. >> I saw a good one yesterday. >> Yeah? >> We fix shit, 'member? >> Oh yeah, yeah. >> That was pretty good. >> I like when they're >> That's a pretty good one. >> just straightforward, like that, yeah yeah. >> But the only thing with this is when you're say in front of a green screen, you look as though you've got no tummy. >> A portal through your body. >> And so, when we did our first - >> That's a really good point, actually. >> Yeah, it's like the black hole to nothingless. And I'm like wow, that's my soul. >> I was just going to say, I don't want to see my soul like that. I don't want to know. >> But we had to do like, it was just when the pandemic first started, so we had to do our big presentation live announcement from home. And so they shipped us all this camera equipment for home and thank God my partner knows how that works, so he set it all up. And then he had me test with a green screen, and he's like, you have no tummy. I'm like, what the hell are you talking about? He's like, come and see. It's like this, I dunno what it was. So I had to actually go upstairs and felt tip with a magic marker and make it black. >> Wow. >> So that was why I did for two hours on a Friday, yeah. >> Couldn't think of another alternative, huh? >> Well no, 'cause I'm myopic when it comes to marketing and I knew I had to keep the tshirt on, and I just did that. >> Yeah. >> In hindsight, yes I could have worn an "I Fix Shit" tshirt, but I don't think my husband would've been very happy. I secure shit? >> There you go, yeah. >> There you go. >> Over to you, Savannah. >> I was going to say, I got acquainted, I don't know if I can say this, but I'm going to say it 'cause we're here right now. I got acquainted with theCUBE, wearing a shirt that said "Unfuck Kubernetes," 'cause it was a marketing campaign that I was running for one of my clients at Kim Con last year. >> That's so good. >> Yeah, so - >> Oh my God. I'll give you one of these if you get me one of those. >> I can, we can do a swapskee. We can absolutely. >> We need a few edits on this film, on the file. >> Lena: Okay, this is nothing - >> We're fallin' off the wheel. Okay, on that note, I'm going to bring us to our challenge that we discussed, before we got started on this really diverse discussion that we have had in the last 15 minutes. We've covered everything from felt tip markers to nuclear power plants. >> To the darkness of my soul. >> To the darkness of all of our souls. >> All of our souls, yes. >> Which is perhaps a little too accurate, especially at this stage in the conference. You've obviously seen a lot Lena, and you've been rockin' it, I know John was in your suite up here, at at at the Venetian. What's your 30 second hot take? Most important story, coming out of the show or for you all at Mongo this year? >> Genuinely, it was when I learned that two-thirds of the customers that had been mentioned, here, are MongoDB customers. And that just exploded in my head. 'Cause now I'm thinking of all the numbers and the metrics and how we can use that. And I just think it's amazing, so. >> Yeah, congratulations on that. That's awesome. >> Yeah, I thought it was amazing. >> And it makes sense actually, 'cause Mongo so easy to use. We were talking about Tengen. >> We knew you when, I feel that's our like, we - >> Yeah, but it's true. And so, Mongo was just really easy to use. And people are like, ah, it doesn't scale. It's like, turns out it actually does scale. >> Lena: Turns out, it scales pretty well. >> Well Lena, without question, this is my favorite conversation of the show so far. >> Thank you. >> Thank you so much for joining us. >> Thank you very much for having me. >> Dave: Great to see you. >> It's always a pleasure. >> Dave: Thanks Lena. >> Thank you. >> And thank you all, tuning in live, for tolerating wherever we take these conversations. >> Dave: Whatever that was. >> I bet you weren't ready for this one, folks. We're at AWS re:Invent in Las Vegas, Nevada. With Dave Vellante, I'm Savannah Peterson. You're washing theCUBE, the leader for high tech coverage.

>> From theCUBE studios in Palo Alto in Boston bringing you data driven insights from theCUBE and ETR. This is "Breaking Analysis" with Dave Vellante. >> In just over 10 years, CrowdStrike has become a leading independent security firm with more than 2 billion in annual recurring revenue, nearly 60% ARR growth, and approximate $40 billion market capitalization, very high retention rates, low churn, and a path to 5 billion in revenue by mid decade. The company has joined Palo Alto Networks as a gold standard pure play cyber security firm. It has achieved this lofty status with an architecture that goes beyond a point product. With outstanding go to market and financial execution, some sharp acquisitions and an ever increasing total available market. Hello, and welcome to this week's Wikibon Cube Insights powered by ETR. In this "Breaking Analysis" and ahead of Falcon, Fal.Con, CrowdStrike's user conference, we take a deeper look into CrowdStrike, its performance, its platform, and survey data from our partner ETR. Now, the general consensus is that spending on Cyber is non-discretionary and is held up better than other technology sectors. While this is generally true, as this data shows, it's nuanced. Let's explore this a bit. First, this is a year-to-date chart of the stock performance of CrowdStrike relative to Palo Alto, the BUG ETF, which is a Cyber index, the NASDAQ and SentinelOne, a relatively new entrant to the IPO public markets. Now, as you can see the security sector as evidenced by the orange line, that Cyber ETF, is holding up better than the overall NASDAQ which is off 28% year-to-date. Palo Alto has held up incredibly well, the best, being off only around 4% year-to-date. Whereas CrowdStrike is off in the double digits this year. But up as we talked about in one of our last "Breaking Analysis" on Cyber, up from its lows this past May. Now, CrowdStrike had a very nice beat and raise on August 30th. But the stop didn't respond well initially. We asked "Breaking Analysis" contributor, Chip Simonton for his technical take and he stated that CrowdStrike has bounced around for the last three months in its current range. He said that Cyber stocks have held up better than the rest of the market, as we're showing. And now might be a good time to take a shot but he is cautious. FedEx had a warning today of a global recession and that's obvious case for a concern. You know, maybe some of these quality Cyber stocks like Palo Alto and CrowdStrike and Zscaler will outperform in a recession, but that play is not for the faint of heart. In fact, it's feeling like a longer, more drawn out tech lash than many had hoped. Perhaps as much as 12 to 18 months of bouncing around with sellers still in control, is generally the sentiment from Simonton. So in terms of Cyber spending being non-discretionary, we'd say it's less discretionary than other it sectors but the CISO still does not have an open wallet, as we've reported before. We've seen that spending momentum has decelerated in all sectors throughout the year. This is an across the board trend. Now, independent of the stock price, George Kurtz, CEO of CrowdStrike, he's running a marathon, not a sprint. And this company is running at a nice pace despite tough macro headwinds. The company is free cash flow positive and is in the black, or a non-GAAP operating profit basis and yet it's growing ARR at nearly 60%. Frank Slootman uses the term inherent profitability, meaning that the company could drive more profits if it wanted to dial down expenses especially in go to market costs. But that would be a mistake for a company like CrowdStrike, in our opinion. While it has an impressive nearly 20,000 customers, there are hundreds of thousands of customers that CrowdStrike could penetrate. So like Snowflake and Slootman, Kurtz is not taking its foot off the gas. Now, the fundamental strength of CrowdStrike and its secret sauce is its architecture and platform, in our view, so let's take a deeper look. CrowdStrike believes that the unstoppable breach is a myth. Now, CISOs don't agree with that because they assume they're going to get breached, but that's CrowdStrike's point of view, so lofty vision. CrowdStrike's mission is to consolidate the patchwork of solutions by introducing modules that go beyond point products. CrowdStrike has more than 20 modules, I think 22, that span a range of capabilities as shown in this table. Now, there are a few critical aspects of the CrowdStrike architecture that bear mentioning. First is the lightweight agent, that is fundamental. You know, we're used to thinking that agentless is good and agent is bad, but in this case, a powerful but small, slim and easy to install but unobtrusive agent has its advantages because it supports multiple CrowdStrike modules. The second point is CrowdStrike from the beginning has been dogmatic about getting all the telemetry data into the cloud. It sort of shunned doing bespoke on prem so that all the data could be analyzed. So the more agents that CrowdStrike installs around the world, the more data it has access to and the better its intelligence. Few companies have access to more data, perhaps Microsoft given it scale and size is an exception in that endpoint space. CrowdStrike has developed a purpose-built threat graph and analytics platform that allows it to quickly ingest in near real time key telemetry data and detect not only known malware, that's pretty straightforward, pretty much anybody could do that. But using machine intelligence, it can also detect unknown malware and other potentially malicious behavior using indicators of attack, IOC, or IOAs. Humio is shown here as a company that CrowdStrike bought for around 400 million in early 2020, early 2021. It's the company's Splunk killer and will serve as an observability platform. It's really starting to take off, that's a great market for them to go after. CrowdStrike, to try to put it into sort of a summary, uses a three pronged approach. First is it's next generation anti-virus, meaning it's SaaS base. SAS based solution that can do fast lookups to telemetry data and that data lives in the cloud. And this leverages cloud strikes proprietary threat graph. Now, the second is endpoint detection and response. CrowdStrike sends all endpoint activity to the cloud and can process the data in real time. CrowdStrike EDR allows you to search data history and its partners with threat intelligent platforms who push the data into CrowdStrike, the CrowdStrike cloud. This increases CloudStrike's observation space. It also has containment capabilities in EDR to fence off compromised system. Now, the third leg of the stool is CrowdStrike's world class manage hunting approach. Like many firms, CrowdStrike has a crack team of experts that is looking at the data, but CrowdStrike's advantage is the amount of data, that observation space that we just talked about, and near real time capabilities of the architecture thanks to that proprietary database that they've developed. And all this is built in the cloud and so it enables global scale. And of course, agility. Now, let's dig into some of the survey data and take a look at what ETR respondents are saying about the spending momentum for CrowdStrike in context with its peers. Here's a very recent dataset, the October preliminary data from the October dataset in ETR's survey. Eric Bradley shared with us, ETR's head of strategy, and he runs the round tables, he's a frequent "Breaking Analysis" contributor. This is an XY graph with Netcore or spending momentum on the vertical axis and the overlap or pervasiveness in the survey on the horizontal axis. That dotted red line at 40% indicates an elevated level of spending velocity. Anything above that, we consider really impressive. Note the CrowdStrike progression since the pandemic started. The two notable points are one, that CrowdStrike has remained consistently above that 40% mark and two, it has made notable progress to the right. You can see that sort of squiggly line consistently increasing its share with one little anomaly there in the early days of over a two-year period. The other call out here is Microsoft in the upper-right. We circled Microsoft as usual. Microsoft messes up the data because it's such a dominant player and has referenced earlier as a massive scale and very quality telemetry from its endpoints. Unlike AWS, Microsoft is a direct competitor of CrowdStrike's. Nonetheless, the sector remains very strong with lots of players. Cyber is a large and expanding TAM with too many point tools that CrowdStrike is well positioned to consolidate, in our view. Now, here's a more narrow view of that same XY graph. What it does is it takes out Microsoft to kind of normalize the data a bit and it compares a number of firms that specialize in endpoint, along with CrowdStrike such as Tanium which also has a lightweight agent, by the way, and appears to be doing pretty well. SentinelOne did a relatively recent IPO, took off, stock hasn't done as well since, as you saw earlier. Carbon Black which VMware bought for around $2 billion and Cylance which is the Blackberry pivot. Now, we've also for context included Palo Alto and Cisco because they are major players with the big presence in security and they've got solutions that compete with CrowdStrike. But you can see how CrowdStrike looms large with a higher net score than these others. Although Palo Alto is very impressive, as is Cisco, steady. But Palo Alto also, sorry, CrowdStrike also has a very steady posture instead of just looming on that X axis. Let's now take a look at XDR, extended detection and response. XDR is kind of this bit of a buzzword but CrowdStrike seems to be taking the mantle and trying to sort of own the category and define it, in our view. It's a natural evolution of endpoint detection and response, EDR. In a recent ETR Roundtable hosted by our colleague, Eric Bradley, the sentiment among several CIOs is that existing SIEM, security information and event management platforms are inadequate and some see XDR as a replacement for, or at least a strong compliment to SIEM. CISOs want a single view of their data. Hmm, you haven't heard that before. They want help prioritizing potentially high impact breaches and they want to automate the low level stuff because the problem is sometimes too much information becomes information overload and you can't prioritize. So they want to consolidate platforms. They want better co consistency. They have too many dashboards, too many stove pipes. They have difficulty scaling and they have inconsistent telemetry data. As one CISO said, it's a call out here. "If the regulatory requirement isn't there, I absolutely would get rid of my SIEM." So CrowdStrike, we feel, is in a good position to continue to gain, share and disrupt this space. And that's what Dave Nicholson and I will be looking for next week when theCUBE is at Fal.Con, CrowdStrike's user conference. We'll be there for two days at the area in Vegas. In addition to CrowdStrike CEO, we'll hear from government cyber experts. We always hear that at security conferences and the CEO of Mandiant. Google just the other day closed its $5 billion plus acquisition of Mandiant, which is a threat intelligence expert and MSSP. I'm going to hear a lot about MSSPs by the way. CrowdStrike is a growing MSSP base. We think that's a really interesting sector because many companies don't have a SOC. As many as 50% of companies in the United States don't have a security operations center. So they need help, that's where MSPs come in. At the conference, there'll be a real focus on the Falcon platform. And we expect CrowdStrike to educate the audience on its multiple modules and how to take advantage of the capabilities beyond endpoint. And we'll also be watching for the ecosystem conversations. We saw this at reinforced, for example, where CrowdStrike and Okta were presenting together to show how these companies products compliment each other in the marketplace. Sometimes it gets confusing when you hear that CrowdStrike has an identity product. Okta, of course, is the identity specialist. So we'll be helping extract that signal from the noise. Because a generational company must have a strong ecosystem. CrowdStrike is evolving and our belief is that it has some work to do to create a stronger partner flywheel, and we're eager to dig into that next week. So if you're at the event, please do stop by theCUBE, say hello to Dave Nicholson and myself. Okay, we're going to leave it there today. Many thanks to Chip Simonton and Eric Bradley for their input and contributions to today's episode. Thanks to Alex Myerson, who does production, he also manages our podcast, Ken Schiffman as well, in our Boston studios, Kristen Martin and Cheryl Knight help get the word out on social media and our newsletters, and Rob Hof is our editor in chief over at siliconangle.com. He does some wonderful editing and I really appreciate that. Remember, all these episodes are available as podcasts wherever you listen, just search "Breaking Analysis" Podcast. I publish each week on wikibon.com and siliconangle.com and you can email me at david.vellante@siliconangle.com or DM me @DVellante or comment on our LinkedIn post. And please do check out etr.ai for the best survey data in the enterprise tech business. This is Dave Vellante for theCUBE Insights powered by ETR. Thanks for watching, and we'll see you next time on "Breaking Analysis". (upbeat music)

(digital music) >> And we're back live in New York. It's theCUBE. It's not SNL, it's better than SNL. Lisa Martin and John Furrier here with about 10,000 to 12,000 folks. (John chuckles) There is a ton of energy here. There's a ton of interest in what's going on. But one of the things that we know that AWS is really well-known for is its massive ecosystem. And one of its ecosystem partners is joining us. Please welcome Domenic Ravita, the VP of Product Marketing from SingleStore. Dominic, great to have you on the program. >> Well, thank you. Glad to be here. >> It's a nice opening, wasn't it? (Lisa and John laughing) >> I love SNL. Who doesn't? >> Right? I know. So some big news came out today. >> Yes. >> Funding. Good number. Talk to us a little bit about that before we dig in to SingleStore and what you guys are doing with AWS. >> Right, yeah. Thank you. We announced this morning our latest round, 116 million. We're really grateful to our customers and our investors and the partners and employees and making SingleStore a success to go on this journey of, really, to fulfill our mission to unify and simplify modern, real time data. >> So talk to us about SingleStore. Give us the value prop, the key differentiators, 'cause obviously customers have choice. Help us understand where you're nailing it. >> SingleStore is all about, what we like to say, the moments that matter. When you have an analytical question about what's happening in the moment, SingleStore is your best way to solve that cost-effectively. So that is for, in the case of Thorn, where they're helping to protect and save children from online trafficking or in the case of True Digital, which early in the pandemic, was a company in Southeast Asia that used anonymized phone pings to identify real time population density changes and movements across Thailand to have a proactive response. So really real time data in the moment can help to save lives quite literally. But also it does things that are just good commercially that gives you an advantage like what we do with Uber to help real time pricing and things like this. >> It's interesting this data intensity happening right now. We were talking earlier on theCUBE with another guest and we said, "Why is it happening now?" The big data has been around since the dupe days. That was hard to work with, then data lakes kicked in. But we seem to be, in the past year, everyone's now aware like, "Wow, I got a lot of data." Is it the pandemic? Now we're seeing customers understand the consequences. So how do you look at that? Because is it just timing, evolution? Are they now getting it or is the technology better? Is machine learning better? What's the forces driving the massive data growth acceleration in terms of implementing and getting stuff out, done? (chuckles) >> We think it's the confluence of a lot of those things you mentioned there. First of all, we just celebrate the 15-year anniversary of the iPhone, so that is like wallpaper now. It's just faded into our daily lives. We don't even think of that as a separate thing. So there's an expectation that we all have instant information and not just for the consumer interactions, for the business interactions. That permeates everything. I think COVID with the pandemic forced everyone, every business to try to move to digital first and so that put pressure on the digital service economy to mature even faster and to be digital first. That is what drives what we call data intensity. And more generally, the economic phenomenon is the data intensive era. It's a continuous competition and game for customers. In every moment in every location, in every dimension, the more data hat you have, the better value prop you can give. And so SingleStore is uniquely positioned to and focused on solving this problem of data intensity by bringing and unifying data together. >> What's the big customer success story? Can you share any examples that highlight that? What are some cool things that are happening that can illustrate this new, I won't say bit that's been flipped, that's been happening for a while, but can you share some cutting edge customer successes? >> It's happening across a lot of industries. So I would say first in financial services, FinTech. FinTech is always at the leading edge of these kind of technology adaptions for speeds and things like that. So we have a customer named IEX Cloud and they're focused on providing real time financial data as an API. So it's a data product, API-first. They're providing a lot of historical information on instruments and that sort of thing, as well as real time trending information. So they have customers like Seeking Alpha, for instance, who are providing real time updates on massive, massive data sets. They looked at lots of different ways to do this and there's the traditional, transactionals, LTP database and then maybe if you want to scale an API like theirs, you might have a separate end-memory cache and then yet another database for analytics. And so we bring all that together and simplify that and the benefit of simplification, but it's also this unification and lower latency. Another example is GE who basically uses us to bring together lots of financial information to provide quicker close to the end-of-month process across many different systems. >> So we think about special purpose databases, you mentioned one of the customers having those. We were in the keynote this morning where AWS is like, "We have the broadest set of special purpose databases," but you're saying the industry can't afford them anymore. Why and would it make SingleStore unique in terms of what you deliver? >> It goes back to this data intensity, in that the new business models that are coming out now are all about giving you this instant context and that's all data-driven and it's digital and it's also analytical. And so the reason that's you can't afford to do this, otherwise, is data's getting so big. Moving that data gets expensive, 'cause in the cloud you pay for every byte you store, every byte you process, every byte you move. So data movement is a cost in dollars and cents. It's a cost in time. It's also a cost in skill sets. So when you have many different specialized data sets or data-based technologies, you need skilled people to manage those. So that's why we think the industry needs to be simplified and then that's why you're seeing this unification trend across the database industry and other parts of the stack happening. With AWS, I mean, they've been a great partner of ours for years since we launched our first cloud database product and their perspective is a little bit different. They're offering choice of the specialty, 'cause many people build this way. But if you're going after real time data, you need to bring it. They also offer a SingleStore as a service on AWS. We offer it that way. It's in the AWS Marketplace. So it's easily consumable that way. >> Access to real time data is no longer a nice-to-have for any company, it's table stakes. We saw that especially in the last 20 months or so with companies that needed to pivot so quickly. What is it about SingleStore that delivers, that you talked about moments that matter? Talk about the access to real time data. How that's a differentiator as well? >> I think businesses need to be where their customers are and in the moments their customers are interacting. So that is the real time business-driver. As far as technology wise, it's not easy to do this. And you think about what makes a database fast? A major way of what makes it fast is how you store the data. And so since 2014, when we first released this, what Gartner called at the time, hybrid transaction/analytical processing or HTAP, where we brought transactional data and analytical data together. Fast forward five years to 2019, we released this innovation called Universal Storage, which does that in a single unified table type. Why that matters is because, I would say, basically cost efficiency and better speed. Again, because you pay for the storage and you pay for the movement. If you're not duplicating that data, moving it across different stores, you're going to have a better experience. >> One of the things you guys pioneered is unifying workloads. You mentioned some of the things you've done. Others are now doing it. Snowflake, Google and others. What does that mean for you guys? I mean, 'cause are they copying you? Are they trying to meet the functionality? >> I think. >> I mean, unification. I mean, people want to just store things and make it, get all the table stakes, check boxes, compliance, security and just keep coding and keep building. >> We think it's actually great 'cause they're validating what we've been seeing in the market for years. And obviously, they see that it's needed by customers. And so we welcome them to the party in terms of bringing these unified workloads together. >> Is it easy or hard? >> It's a difficult thing. We started this in 2014. And we've now have lots of production workloads on this. So we know where all the production edge cases are and that capability is also a building block towards a broader, expansive set of capabilities that we've moved onto that next phase and tomorrow actually we have an event called, The Real Time Data Revolution, excuse me, where we're announcing what's in that new product of ours. >> Is that a physical event or virtual? >> It's a virtual event. >> So we'll get the URL on the show notes, or if you know, just go to the new site. >> Absolutely. SingleStore Real Time Data Revolution, you'll find it. >> Can you tease us with the top three takeaways from Revolution tomorrow? >> So like I said, what makes a database fast? It's the storage and we completed that functionality three years ago with Universal Storage. What we're now doing for this next phase of the evolution is making enterprise features available and Workspaces is one of the foundational capabilities there. What SingleStore Workspaces does is it allows you to have this isolation of compute between your different workloads. So that's often a concern to new users to SingleStore. How can I combine transactions and analytics together? That seems like something that might be not a good thing. Well, there are multiple ways we've been doing that with resource governance, workload management. Workspaces offers another management capability and it's also flexible in that you can scale those workloads independently, or if you have a multi-tenant application, you can segment your application, your customer tenant workloads by each workspace. Another capability we're releasing is called Wasm, which is W-A-S-M, Web Assembly. This is something that's really growing in the open source community and SingleStore's contributing to that open source scene, CF project with WASI and Wasm. Where it's been mentioned mostly in the last few years has been in the browser as a more efficient way to run code in the browser. We're adapting that technology to allow you to run any language of your choice in the database and why that's important, again, it's for data movement. As data gets large in petabyte sizes, you can't move it in and out of Pandas in Python. >> Great innovation. That's real valuable. >> So we call this Code Engine with Wasm and- >> What do you call it? >> Code Engine Powered by Wasm. >> Wow. Wow. And that's open source? >> We contribute to the Wasm open source community. >> But you guys have a service that you- >> Yes. It's our implementation and our database. But Wasm allows you to have code that's portable, so any sort of runtime, which is... At release- >> You move the code, not the data. >> Exactly. >> With the compute. (chuckles) >> That's right, bring the compute to the data is what we say. >> You mentioned a whole bunch of great customer examples, GE, Uber, Thorn, you talked about IEX Cloud. When you're in customer conversations, are you dealing mostly with customers that are looking to you to help replace an existing database that was struggling from a performance perspective? Or are you working with startups who are looking to build a product on SingleStore? Is it both? >> It is a mix of both. I would say among SaaS scale up companies, their API, for instance, is their product or their SaaS application is their product. So quite literally, we're the data engine and the database powering their scale to be able to sign that next big customer or to at least sleep at night to know that it's not going to crash if they sign that next big costumer. So in those cases, we're mainly replacing a lot of databases like MySQL, Postgre, where they're typically starting, but more and more we're finding, it's free to start with SingleStore. You can run it in production for free. And in our developer community, we see a lot of customers running in that way. We have a really interesting community member who has a Minecraft server analytics that he's building based on that SingleStore free tier. In the enterprise, it's different, because there are many incumbent databases there. So it typically is a case where there is a, maybe a new product offering, they're maybe delivering a FinTech API or a new SaaS digital offering, again, to better participate in this digital service economy and they're looking for a better price performance for that real time experience in the app. That's typically the starting point, but there are replacements of traditional incumbent databases as well. >> How has the customer conversation evolved the last couple of years? As we talked about, one of the things we learned in the pandemic was access to real time data and those moments that matter isn't a nice-to-have anymore for businesses. There was that force march to digital. We saw the survivors, we're seeing the thrivers, but want to get your perspective on that. From the customers, how has the conversation evolved or elevated, escalated within an organization as every company has to be a data company? >> It really depends on their business strategy, how they are adapting or how they have adapted to this new digital first orientation and what does that mean for them in the direct interaction with their customers and partners. Often, what it means is they realize that they need to take advantage of using more data in the customer and partner interaction and when they come to those new ideas for new product introductions, they find that it's complicated and expensive to build in the old way. And if you're going to have these real time interactions, interactive applications, APIs, with all this context, you're going to have to find a better, more cost-effective approach to get that to market faster, but also not to have a big sprawling data-based technology infrastructure. We find that in those situations, we're replacing four or five different database technologies. A specialized database for key value, a specialized database for search- >> Because there's no unification before? Is that one of the reasons? >> I think it's an awareness thing. I think technology awareness takes a little bit of time, that there's a new way to do things. I think the old saying about, "Don't pave cow paths when the car..." You could build a straight road and pave it. You don't have to pave along the cow path. I think that's the natural course of technology adaption and so as more- >> And the- pandemic, too, highlighted a lot of the things, like, "Do we really need that?" (chuckles) "Who's going to service that?" >> That's right. >> So it's an awakening moment there where it's like, "Hey, let's look at what's working." >> That's right. >> Double down on it. >> Absolutely. >> What are you excited about new round of funding? We talked about, obviously, probably investments in key growth areas, but what excites you about being part of SingleStore and being a partner of AWS? >> SingleStore is super exciting. I've been in this industry a long time as an engineer and an engineering leader. At the time, we were MemSQL, came into SingleStore. And just that unification and simplification, the systems that I had built as a system engineer and helped architect did the job. They could get the speed and scale you needed to do track and trace kinds of use cases in real time, but it was a big trade off you had to make in terms of the complexity, the skill sets you needed and the cost and just hard to maintain. What excites me most about SingleStore is that it really feels like the iPhone moment for databases because it's not something you asked for, but once your friend has it and shows it to you, why would you have three different devices in your pocket with a flip phone, a calculator? (Lisa and Domenic chuckles) Remember these days? >> Yes. >> And a Blackberry pager. (all chuckling) You just suddenly- >> Or a computer. That's in there. >> That's right. So you just suddenly started using iPhone and that is sort of the moment. It feels like we're at it in the database market where there's a growing awareness and those announcements you mentioned show that others are seeing the same. >> And your point earlier about the iPhone throwing off a lot of data. So now you have data explosions at levels that unprecedented, we've never seen before and the fact that you want to have that iPhone moment, too, as a database. >> Absolutely. >> Great stuff. >> The other part of your question, what excites us about AWS. AWS has been a great partner since the beginning. I mean, when we first released our database, it was the cloud database. It was on AWS by customer demand. That's where our customers were. That's where they were building other applications. And now we have integrations with other native services like AWS Glue and we're in the Marketplace. We've expanded, that said we are a multi-cloud system. We are available in any cloud of your choice and on premise and in hybrid. So we're multi-cloud, hybrid and SaaS distribution. >> Got it. All right. >> Got it. So the event is tomorrow, Revolution. Where can folks go to register? What time does it start? >> 1:00 PM Eastern and- >> 1:00 PM. Eastern. >> Just Google SingleStore Real Time Data Revolution and you'll find it. Love for everyone to join us. >> All right. We look forward to it. Domenic, thank you so much for joining us, talking about SingleStore, the value prop, the differentiators, the validation that's happening in the market and what you guys are doing with AWS. We appreciate it. >> Thanks so much for having me. >> Our pleasure. For Domenic Ravita and John Furrier, I'm Lisa Martin. You're watching theCUBE, live from New York at AWS Summit 22. John and I are going to be back after a short break, so come back. (digital pulsing music)

>>Um, okay, thanks to the studio there for the handoff. Appreciate it. We're here for breaking news and it's exciting that we have who's the managing director. Google is breaking some hard news here, Dave. We want to bring him in and get commentary while we end up Dave too. Honestly, the story here is cloud city. We are in the cloud city and all, thanks for coming on remotely into our physical hybrid set here. Thanks for coming >>On. Thank you, John. And very excited to be here. What Juliet. >>Well, we got Bon Jovi ready to play. Everyone's waiting for that concert in the year. The only thing standing between bunch of LV and all the great stuff. So a lot of people watching. Thanks for coming on, sir. So you guys got some big news, um, first Erickson partners with you guys on 5g platform, deal with Anthem, as well as, uh, open ran Alliance. You guys are joining huge, a Testament to the industry. I see Google with all your innovation you guys have in the big three cloud hyperscalers. Obviously you guys invented SRE, so you know, you no stranger to large scale. What's the news. Let's tell us why this Erickson news is so important. Let's start with the Erickson announcement. >>Sure. So John, I mean, we are very excited today to finally bring to the market, the strategic partnership that we've been building with Erickson for the last few months, uh, the partnership to recent retreat, which is very important to the industry is you're actually doing this in conjunction with very large CSPs. So it's not been in isolation. You are in fact in the press release that we have already launched something to get the big telecom Italia in Italy, because you will see that also in the past. And really the partnership is on three pillars. Number one, how can CSBs monetize 5g and edge, which is the real team at the moment using Google clouds solutions like the edge computing platform and, and POS, and Erikson's cutting edge 5g components, 5g solutions. And if we can onboard these together at the CSP, such as telecom Italia, that creates massive pain to market efficiency. So that's 0.1 because speed and agility is key John, but then point to it also unlocks a lot of edge use cases for a bunch of verticals, retail, manufacturing, healthcare, so on, which are already starting to launch together with that. Excellent. And so that's the second pillar. And then the final pillar of course, is this continuously cloud native innovation that you just highlighted. John, we are going to try and double down on it between ourselves and Ericsson to really time created this cloud native application suite or 5g or whatever. >>Talk about the innovations around cloud, because the message we're hearing him this year at mobile world Congress, is that the public cloud is driving the innovation. And, you know, I can be a little bit over the top. So the telcos are slow. They're like glaciers, they move slow, but they're just moving packets. They are there. They're moving the network around. The innovation is happening on top. So there's some hardened operations operating the networks. Now you have a build concept cloud native enables that. So you've got containers. You can put that encapsulate that older technology and integrated in. So this is not a rip and replace. Someone has to die to win. This is a partnership with the tellers. Can you share your thoughts on that piece? >>Smart Antone's photo? We believe that it's a massive partnership opportunity. There's zero conflict or tensions in this sort of ecosystem. And the reason for that is when you talk about that containerization and right once and deploy everywhere type architecture that we are trying to do, that's where the cloud native really helps. Like when you create Ericsson 5g solutions with the operators, adjust telecom Italia, once you build a solution, you don't have to worry about, do I need to kick it back again and again, but every deployment, as long as your mantra, genetics and working, you shouldn't be able to have the same experience. >>Yeah, I'm John. I talk all the time in the cube about how developers are really going to drive the edge. You're clearly doing that with your distributed cloud, building out a telco cloud. I wonder if you could talk a little bit more about how you see that evolving. A lot of the AI that's done today is done in the cloud. A lot of modeling being done. When you think about edge, you think about AI inferencing, you think about all these monetization opportunities. How are you thinking about that? >>So I think David, first of all, it's a fan best six Sigma in how we are looked in at analytics at the edge, right? So we, uh, we have realized that is a very, very, uh, uh, uh, data computing, heavy operation. So certainly the training of the models is still going to stay in cloud for the foreseeable future. But the influencing part that you mentioned is there something that we can offer to the edge? Why is that so important in the pandemic era, think of running a shop or a factory floor, completely autonomously meeting zero minimal human intervention. And if you want to look at an assembly line and look at AI influencing as a way to find out assembly line defects on products in manufacturing, that's very difficult problem to solve unless you actually create those influencing models at the edge. So creating that ecosystem of an Erickson and a Google cloud carrier gives you that edge placement of the workloads that would fit right next to our factory floor in our manufacturing example. And then on top of that, you could run that AI influence thing to really put in the hands of the manufacturer, a visual inspection capability to just bring this to life. >>Great. Thank you for that. And now the other piece of the announcement of course, is the open, open ran. We've been talking about that all weekend and you know, you well, remember when cloud first came out, people were concerned about security. Of course. Now everybody's asking the question, can we still get the reliability and the security that we're used to with the telcos? And of course over time we learned that you guys actually pretty good at security. So how do you see the security component, maybe first talk about the open ran piece, why that's important and how security fits? >>Sure. So first of all, open trend is something that we have taken great interest in the last year or so as it started evolving. And the reason for that is fairly simple. Dave, this aggregation of networks has been happening for some time in the radio layer. We believe that's the final frontier of sort of unlocking and dis-aggregating that radio layer. And why is it so important? 80% of the operators spend globally is on radio. 80% is on radio. If you disaggregate that. And if the internet synergies for your CSP partners and clients, that meant you have standard purpose hardware standard for software with open interfaces, number one, massive difference in VCO. Number two, the supply chain gets streamlined and become still really, really simple way to manage a fairly large distribution. That's about to get larger in 5g and the capital clarity that 5g needs. >>You're thinking of tens of thousands of micro cells and radio cells going everywhere. And having that kind of standardized hardware software with openings of Essex is an extremely important cost dimension to every new site finished that the reason we got to exact open brand was you can now run for a lot of API APIs on the radio net, cetera, that then certainly brings a whole developer community on the radio later. That then helps you do a bunch of things like closed loop automation for network optimization, as well as potentially looking at monetization opportunities by hyper personalizing, yours and mine experiences at the waist level from the self-doubt. And so that really is what is driving us towards this open grind paper. Come on, we go and >>Got a minute and a half. I want to get your thoughts real quick on, on open source and the innovation. Um, Danielle Royston, who's the CEO of telco, Dr. She's at a keynote today. And she mentioned that the iPhone 14 years ago was launched. Okay. And you think about open and you mentioned proprietary with the 5g and having Iran be more commodity and industry standard. That's going to lower the costs increase the surface here of infrastructure. Everyone wins because everyone wants more connectivity options. Software is going to be the key to success for the telco industry. And open source is driving. That is Android. The playbook that you guys pioneered, obviously at Google with the smart phones was very successful. How is that a playbook or an indicator to what could happen at telecom? >>Absolutely. John and the parallel and analogy that you raised is photon. Be believed in the telco world and tossed multi cloud as a unifying software development layer. The app development platform is the way that people will start to drive this innovation, whether it's radio or whether it's in the core or whether it's on the side of pups, same software planning, everywhere that really allows you that whole development models that we are familiar with, but on the telecom side. And that's where we are seeing some massive innovation opportunities for systems to come on board. >>That's great stuff. And I was just heard someone in the hallway just yesterday and say, you want to be the smartphone. You don't want to be the Blackberry going forward. That's pretty much the consensus here at mobile world Congress. I'm all. Thank you for coming on and sharing the hard news and Google regulations on the Erickson Anthem platform, a deal as well as the open Ranton Alliance. Uh, congratulations. Good to see you. And by the way, you'll be keynoting tomorrow on the cube featured segment. So >>Watch that in there. Thank you, John. Thank you. Glad >>To be here. Benching director telecom, industry, solicitor, Google, obviously player. He's managing that business. Big opportunities for Google because they have the technology. They got the chops, Dave, and we're going to now bring this Daniel. Russia says here when to bring up on the stage, Bon Jovi is about to go on behind us Bon Jovi's here. And this is like a nightclub, small intimate setting here in cloud city. Dave Bon. Jovi's right there. He's going to come on stage after we close down here, but first let's bring up the CEO of telco. Dr. And yeah, it was great to see she's hot off the keynote. We're going to see you to Mike. Great to see you. Oh, it's great to be there. We're going to see you tomorrow for an official unpacking of the keynote, but thanks for coming by and closing, >>Swinging by. I never closed down the show. It's been a big, it's been a big day-to-day at MWC and in cloud city, really starting to get packed. I mean, everyone's coming in the band's warming up. You can kind of hear it. Um, I think Elon Musk is about to go on as well. So I mean, it's really happening all the buzz about cloud city out there in the hallway. Yeah. Yeah, no, I mean, I think everyone's talking about it. I'm really, really excited with how it's going. >>Well, this is awesome. While we got you here, we want to put you to work being the cube analyst for the segment. You just heard Google. Uh, we broke them in for a breaking news segment. So hard news Erickson partnership. We're in the factory, former Erickson booth. They're not even here, it's now the Calco VR booth, but that's a relation. And then open ran again, open source, you got five G you got open source all happening. What's your take on this? >>You see, you know, there's two big. And I, I talked about it, my keynote this morning, and there's two big technological changes that are happening in our industry simultaneously. And I don't think we could have had it MWC 21. I certainly wanted to make it about the public cloud. I think I'm sort of successful in doing that. And I think the other piece is open ramp, right? And I think these two big shifts are happening and, um, I'm really thrilled about it. And so, yeah, >>Well I loved your keynote. We were here, live. Chloe was here filling in for Dave while David was going to do some research and some breaking stories to you are on stage. And we were talking well, he's like, there's trillions of dollars, John on the table. And I was making the point, the money is at the middle of the table and it's changing hands if people don't watch it. And then you onstage that this trillions of dollars, this is a real competitive shift with dollars on the table. And you've got cultural collision. You got operators and builders trying to figure out it feels like dev ops is coming in here. Yeah. I mean, what's the, what's the holistic vibe. What's >>The, yeah, I think my message is about, we can use the software and specifically the software, the public cloud to double your ARPU without massive cap X expenditure. And I think the CSPs is always viewed to get the increase in ARPU. I got to build out the network. I got to spend a lot of money. And with these two technologies that require might be dropped. And then in exchange for doubling our poo, why not? We should do that. Absolutely. >>You know, your message has been pretty clear that you got to get on, on the wave that arrived the way you're going to become driftwood. As John said yesterday. And I think it's pretty, it's becoming pretty clear that that's the case for the telcos. I feel like Danielle, that they were entering this decade, perhaps with a little bit more humility than they have in the past. And then, you know, maybe, especially as it relates to developers, we're just talking about building out the edge. We always talk about how developers are really going to be a key factor in the edge. And that's not a wheelhouse necessarily. It's obviously they're going to have to partner for that to have going to have to embrace cloud native. I mean, it's pretty clear that your premise is right on it. We'll see how long it takes, but if it, if they don't move fast, you know, what's going to happen. Well, I >>Think you look at it from the enterprise's perspective. And I think we just heard Google talking about it. We need to provide a tech stack that the enterprises can write to now, historically they haven't had this opportunity historically that CSPs have provided it. Now you're going to be able to write against Google's tech stack. And that's something that is documented. It's available. There's developers out there that know it. Um, and so I think that's the big opportunity and this might be the big use case that they've been looking for with 5g and looking forward to 16th. And so it's a huge opportunity for CSS. >>I think that's an important point because you got to place bets. And if I'm betting on Google or Amazon, Microsoft, okay. Those are pretty safe bets, right. Those guys are going to be around. >>I mean, they're like, no, don't trust the hyperscalers. I'm like, um, are you guys nuts? If they're safe, right. Safe >>Bets in terms of your investment in technology, now you got to move fast. Yeah. That's the other piece of it. You've got to change your business model. >>Well, you gotta be in the right side of history too. I mean, I mean, what is trust actually really mean? The snowflake trust Amazon, it sure did to get them where they are. Um, but now that's a >>Great example, John. It really is because there's a company that can move fast, but at the same time they compete with the same time they add incremental value. And so yeah, >>Here, the, you can see the narrative like, oh no, we're partnering telcos. Aren't bad. No one needs to die to bring in the new containers. Do we'll help them manage that operational legacy. But if they don't move, they're going to have an asset. That'll get rolled up into a SPAC or some sort of private equity deal. And because the old model of building cap backs and extract rents is kind of shifting because the value shifting. So to me, I think this is what we're watching still kind of unknown. Danielle Love to get your thoughts on this because if the value shifts to services, which is a consumption model like cloud, yeah. Then you can, don't have to try and extract the rents out of the cap ex >>Yeah. I don't think you need to own the entire stack to provide value. And I think that's where we are today in telco, right there. I mean, nuts and bolts of the stack, the servers, you know, the cabling, everything. And I'm like, stand on the shoulders of these amazing tech giants that have solved, you know, mega data centers, right. Huge data centers at scale, and just leverage their, their investment and uh, for your own benefit, it starts to focus. And we heard, um, all talking about it starts to focus on your subscriber and driving a great experience for us. Right? Yeah. Well, you're >>Talking about that many times they can do, but you're right. If the conversation hasn't has to go beyond, okay, we're just conductivity. It's gotta be ongoing and be like, oh, it's $10 a month for roaming charges. Ah, great. Yeah. Tick that box, right? It's those value added services that you're talking about and it's an infinite number of those that can be developed. And that's where the partnerships come in a creativity in the industry. It's just >>A blank piece of paper for, well, we, you know, everyone thinks Google knows everything about you, right. We've had the experience on our phone where they're serving of ads and you're like, how did you write Facebook? But you know, who knows more about us than, than Google or your mother, even your telco, you take your phone with you everywhere. Right? And so it's time to start unlocking all of that knowledge and using it to provide >>A really great, by the way, congratulations on the CEO to Toby and the investment a hundred million dollars. That's a game changer statement again, back to the billing. And there's a good, there's a whole new chain, even all up and down the stack of solutions, great stuff. And I want to unpack that tomorrow. I don't hold that. We're going and we're going to meet tomorrow. I want, I wanna want to leave that to stay >>In the data for a second, because you made the point before in your keynote as well. That it's, that it's the data that drives the value of these companies. Why is it that apple, Amazon, Google Facebook now trillion dollar evaluations. It's all about the data and the telcos have the data, but they can't figure out how to turn that into valuation. >>There's two parts of the data problem, which is number one, the data is trapped in on-premise siloed systems that are not open. You can't connect them and they certainly can't do without. And we talked about it, I think yesterday, you know, millions of dollars of expenditure. And I think the other piece that's really interesting is that it's not connected to a mechanism to get it out in a timely manner, right? This is data that's aging by the minute. And when it takes you weeks to get the insight it's useless. Right? And so to Togi we announced the launch to Togi, I'll get a little to Tokyo plug in there, right. To Toby is connecting that insight to the charger, to the engagement engine and getting it out to subscribers. I think that's the beginning of this connection. I think it's a hard problem to solve and would have been solved already. >>But I think the key is leveraging the public cloud to get your data out of on-premise and, and mashing it up against these great services that Google and Azure and Amazon provides to drive it into the hands of the subscriber, make it very actionable, very monetizeable right at the end, that's what they want. More ARPU, more revenue. Right. And you know, we heard some keynotes from GSA yesterday, some big, big guys, you know, talking about how, you know, it's not fair that these other communication platforms are not regulated. You know, telco is heavily regulated and they're like, it's not fair. And I'm like, yep. It's not fair. That's like right. South complaining about it and start treating your customers better. So they are, they're happy to give you more. >>Yeah. And I think that's the message about the assets do, um, well, one thing I will say is this mobile world Congress is that we've been having a lot of fun here in cloud city. I have to ask you a personal question. Have you been having fun? You look great on the keynote of spring to your staff, cloud cities. Beautiful. Spectacular here. Give us some highlights, personal highlights from your trip. So far, >>Number one, I'm, I'm psyched that the keynote is delivered and, and done. I mean, I think it takes my blood pressure down a blind, um, you know, the spring in my step, I wore these fun little tennis shoes and, and that was really fun, but yeah, I'm having, I'm having, I think a lot of things, great conversations. Yes. The attendance has reduced, um, you know, usually you see hundreds of people from the big group carriers, especially the European groups and yeah, the attendance is reduced, but the senior guys are here, right. The senior leadership teams are in the booth or having meetings, running amazing conversations. I think the last year we really did live a decade in one year. I think they woke up to the power of the public cloud. I mean, there was no way that they got business done without cloud based tools. And I think the light bulb went off, I think I'm right in the right moment. Awesome. Do you think that, >>Do you think that they'd think in there, like left money on the table because you look at the pandemic, there were three categories of companies, losers, people who held the line struggled and then winners. Yeah. Big time tailwind booming. Obviously the zooms of the world telcos did well. They were up and running. Uh, this, this was good. You think we might've left some money on the table? They could have done more. >>Yeah. I think the ones that were, you know, people talk about digital transformation where digital telco we're digitally enabled, but I think the pandemic really tested this. Right. Can you deliver a contactless SIM or do you need to go to a store in person to get to go pick it up? And I had a broken SIM during the pandemic. My provider made me go to the store and I'm like, is it even open? And so I heard other stories of telcos that were very digitally enabled, right. They were using Uber to deliver Sims, all sorts of fun, crazy stuff and new ideas. And they were able to pivot right. Agile. And so I think, I think that was a really big telemedicine booming. So >>If you were in a digital business during the pandemic in general, you're out of business maybe unless you were telco, but I think you're right. I think the light bulb went off. It was an aha moment. And they said, oh, if >>We don't, I mean, I am not kidding. Right. As an ex CEO where I was trying to collect signatures on renewals, right. Here's a DocuSign, which for the world is like, duh. I mean, our school uses DocuSign. I had telcos that required an in-person signature, right. In some country once a month on Tuesday between 10 and two. And I'm like, how are you doing business? Like that? That's like the dark ages. >>Yeah. This is where the crypto guys got it right. With know your customer. Right. >>Because they have the data. Well, there's a lot of things that come in wrong. We don't want to get the whole show on that, but then you have great to have you drop biopsy Bon Jovi's here. How did you get Bon Jovi? Huge fan, New Jersey boy Patriots fan. We'd love it. Well, >>Yeah. I mean, who doesn't love Bon Jovi. Right. Um, we knew we wanted a rocker, right. Rock and roll is all about challenging the status quo. Um, that, I mean, since the beginning and that's what we're doing here, right. We're really challenging. Like the way things have been done in telco kind of just shattering the glass ceiling and lots of different ways. Right. Calling the old guys dinosaurs. I'm sure those guys love me. Right. I mean, how much do they hate me right now? Or they're like that girl? Oh, we're punk >>Rock. They're rock and roll. Right, right. I mean, maybe we should have gotten the clash >>Right. Black flag. Right. I'm a little bit old. >>Accessible. Still >>Edgy. Yeah. So really excited to get them here. Um, I've met him before. Um, and so hopefully he'll remember me. It's been a couple of years since I've seen him. So can't wait to connect with him again. I think we have Elon Musk coming up and that's going to be, it's always exciting to hear that guy talk. So >>Yeah, it could be inspiration off after you've talked to space, space X and kind to star lake. >>Right. I mean, those guys are launching rockets and deploying satellites. And >>I think that's really interesting for >>Rural right. In telco. Right. Being able to deploy very quickly in rural where the, maybe the cost, um, you know, per gig doesn't make sense. You know, the cost for deployment of tower. I think, I mean, that's an interesting idea right there. It's exciting. It's exciting. >>He's inspirational. I think a lot of people look at the younger generation coming into this issue. Why are we doing things? A lot of people are questioning and they see the cloud. They're saying, oh, Hey, you're a B, why are we doing this? This is such an easier, better way. Yeah. I think eventually the generation shifts >>It's coming. I'm so excited to be a part of it. Yeah. Great, >>Great leadership. And I want to say that you are real innovative, glad to have us here and presenting with you here. >>Awesome team. I'm psyched to have you guys. We talked last night about how great this partnership has said. Yeah. >>Cuba's keep us rocking inside the cloud city. The streets of the city are packed in here. All stuff. Great stuff. Thanks for coming on. Thanks. Bon Jovi is here. We've got a shot. A bunch of we do we have a screenshot of Bon Jovi? Yup. There it is. Okay. He's about to come on stage and uh, we're gonna take a break here. We're gonna take and send it back to Adam and the team in the studio. Thanks guys.

(upbeat music) >> Okay, Chloe, thank you very much. Hey folks, in here in the Cloud City We with Danielle Royston. Great to see you. Watching you up on stage, I got to say, as the CEO of TelcoDR, leader and chief executive of that company. As well as a great visionary, you laid out the vision. It's hard to debate that. I mean, I think there's people who will say that vision, is like freedom, no one can debate it. It's not going to happen. >> Yeah, there's still a lot of debate in our industry about it. There's a lot of articles being written about it. I've referenced one about, you know, should we let the dragons into the castle? For me, I think it's super obvious. I think other industries are like "Duh, we've made the move." And Telco is still like, "Hmm, we're not sure." And so, am I a visionary, I don't know. I'm just sort of just Babe Ruth-ing it a little bit. I think that's where we're going. >> You know you do, you have a lot of content, podcasts, you write blogs, you do a lot of speaking. You brought it all together on stage, right? That has got to feel good. >> Yeah. >> You've got a body of work and it came together very nicely. How did you feel up there? >> Oh my God, it's absolutely nerve wrecking. I sort of feel like, you know, could you tell if my hands were shaking? Right, could you tell that my heart was racing? >> It's a good feeling. >> I don't know. >> Come on! >> I'll be honest, I'm happy it's over, I'm happy. I think I did a really great job and I'm really happy >> Yeah, you did a great job, I love the dragon reference-- >> Have it in the can. >> Fantastic, loved the Game of Thrones vibe there. It was cool-- >> Totally. >> One of the things I wanted pick up on, I thought it was very interesting and unique was the iPhone reference 14 years ago, because that really, to me, was a similar moment because that shifted the smartphone. A computer that happened to make phone calls. And then we all knew who was the leader at that time, Nokia, Blackberry with the phones, and they became toast. That ushered in a whole another era of change, wealth creation, innovation, new things. >> Yeah. Well, up until that moment, carriers had been designing the phones themselves. They were branded with their logos. And so Steve Jobs fought for the design of the iPhone. He designed it with the consumer, with the user in mind. But I think what it really, I mean, it's such a big pivotal moment in our industry because it singled the end of voice revenue and ushered in the era of data. But it also introduced the OTT players, right? That came in through the apps and started a siphon approved from the carriers. And this is like, it's a pivotal moment in the industry, like, changed the industry forever. >> It's a step function, it was a step function change, it's obvious, everyone knew it. But what's interesting is that we were riffing yesterday about O-RAN and Android. So you have iPhone, but Android became a very successful open source project that changed the landscape of the handset. Some are saying that that kind of phenomenon is coming here. Into Telco with software, kind of like an Android model where that'll come in. What's your thoughts on that, reaction to that? >> Yeah, well the dis-aggregation of the hardware, right? We're in the iconic Erickson booth, right? They get most of their revenue from RAN, from Radio Access Networks. And now with the introduction of Open RAN, right? With 50% less CapEx, 40% less OPEX, you know, I think it's easiest for Greenfield operators like Dish, that are building a brand new network. But just this month, Vodafone announced they're going to build the world's largest Open RAN network. Change is happening and the big operators are starting to adopt Open RAN in a real big way. >> So to me, riding the dragon means taking the advantage of new opportunities on top of that dragon. Developing apps like the iPhone did. And you mentioned Android, they got it right. Remember the Windows Phone, right? They tried to take Windows and shove it to the phone-- >> Barely. >> It was a kin phone too. >> I try to delete it from my, look here, beep! >> I'm going to take this old world app and I'm going to shove it into the new world, and guess what, it failed. So if the Telco is trying to do the same thing here, it will fail, but if they start building 5G apps in the cloud and pick the cloud native and think about the consumer, isn't really that the opportunity that you're talking about? >> Well, I think it is, absolutely. And I think it's a wake up call for the vendors in our space, right? And I'm certainly trying to become a vendor with Totogi. I'm really pushing my idea. But you can't take, using your Windows example on the Windows Phone, you can't take a Windows app and stuff it onto a phone and you can't take these old school applications that were written 20 years ago and just stuff them into the cloud, right? Cloud is not a place, it's a way to design applications and it all needs to be rewritten and let's go write, rewrite it. >> It's not a destination as we always say. Let's take a step back on the keynote 'cause I know we just did a couple of highlights there, wasn't the whole thing. We were watching it, by the way, we thought you did a great job, you were very cool and calm under pressure. But take us through the core ideas in the keynote. Break down the core elements of what the talk was about. >> Yeah, I think the headline really is, you know, just like there were good and bad things about the iPhone, right? It killed voice, but introduced data and all these other things. There's good and bad things about the public cloud, right? It's not going to be smooth sailing, no downsides. And so I acknowledge that, even though I'm the self appointed queen, you know? This self appointed evangelist. And so, I think that if you completely ignore the public cloud, try to stick your head in the sand and pretend it doesn't exist, I think there's nothing but downsides for Telcos. And so I think you need to learn how to maximize the advantage there, ride he dragon, like spew some fire and, you know, get some speed and height, and then you can double your ARPU. But I think, going from there, so the next three, I was trying to give examples of what I meant by that, of why it's a double-edged sword, why it's two sides of the coin. And I think there's three areas, which is the enterprise, the network, and a relationship with subscribers. And so that really what the talk, that's what the talk is about >> The three main pillars. >> Yeah, yeah! >> Future, work, enterprise, transition, Open RAN. >> The network and then the relationship with the subscribers. >> Those are the structural elements you see. >> Yeah, yeah, yeah. >> What's the most important one you think, right now, that people are focused on? >> I mean, I think the first one, with work, that's an easy one to do, because there's not too much downside, right? I think we all learned that we could work productively from home. The reason public cloud matter there is because we had tools like Zoom and G Suite and we didn't need to be, I mean, imagine if that this had happened even 20 years ago, right? Broadband at the home wasn't ready, the tools weren't ready. I mean, it would have been, I mean a bigger disaster than it was, right? And so this is an opportunity to sort of ride this work from home wave that a lot of CEOs are saying, we're not coming back or we're going to have smaller offices. And all of those employees need fiber to their home. They need 5G at their home. I mean, if I'm a head of enterprise in a Telco, I am shifting my 5G message from like random applications or whatever, to be like, how are you getting big pipes to the home so your workers can be productive there? And that, I don't hear Telco's talking about that and that's a really big idea. >> You know, you say it's a no brainer, but it's interesting you had your buildings crumbling, which was great, very nice effect in the talk. I heard a executive, Wall Street executive the other day, talking about how, "My people will be back in the office. "I'm going to mandate vaccinations, they're going to be back "in the office, you work for me. "Even though it's an employee friendly environment "right now, I don't care". And I was shocked. I go, okay, this is just an old guy. But, and it's not just the fact that it's an old guy, old guard doing that because I take two examples of old guys, Michael Dell and Frank Slootman. >> Yeah. >> Right, Michael Dell, you know, hundred billion dollar company, Frank Slootman, hottest, you know, software company. Both of them, sort of agree. It's a no brainer. >> Yeah. >> Why should I spend all this money on buildings? And my people are going to be more productive. They love it, so. Why fight the fashion? >> Well, I think the office and I can talk about this for a long time and I know we don't have that much time, but on offices, it's a way to see when did you come in and when did you leave, and look over your shoulder and what we're working on. And that's what offices are for. Now, we tell ourselves it's about collaboration and all this other stuff. And you know, these guys are saying, "come back to the office." It's because they don't have an answer on how to manage productivity. What are you working on? Are you off, are you authentically working 40 hours a week? I want to see, I know if at least you're here, you're here. Now, you might be playing, you know, Minesweeper. You might be playing Minesweeper on your computer, but at least you were, your butt was at your computer. So yeah, I think this is a pivotal moment in work. I think Telcos could push it, to work from home. We'll get you the pipes, we'll get you the cloud-based tools to help manage productivity, to change in work style. >> Yeah, and we've covered this in theCube many times, about how software is going to enable this virtual first model, no one's actually built software for virtual first. I think that's going to happen. Again, back to your team software, but I want to ask you about software defined infrastructure. You mentioned O-RAN, and as software eats the world and eats infrastructure, you still need infrastructure. So, talk about the relationship of how you see O-RAN competing and winning with the balance of software versus the commodity argument. >> Yeah, and I think this is really where people get scared in Telco. I mean, authentically nervous, right. Where you're like, okay, really the public cloud is at that network edge, right? We're really going to like, who are we? It's an identity crisis. We're not the towers anymore. We're renting space, right? We're now dis-aggregating the network, putting the edge cloud right there and it's AWS or Google. Who are we, what do we do, are we networks? Are we a tech company? Right, and so I'm like, guys, you are your subscribers and you don't focus on that. I mean, it's kind of like a last thought. >> So you're like a therapist then too, not just an evangelist. >> I'm a little bit of a therapist. >> Okay, lay down on the couch, Telco. >> Let's talk about what your problems are. (laughs) >> They have tower issues. >> All seriousness, no but, the tower is changing is backhauling. Look at direct connects for instance. The rise of direct and killed the exchanges. I mean, broadband, backhaul, last mile, >> Yeah. >> Completely, still issues, >> Yeah. >> But it's going to software and so that's there. The other thing I want to get to quickly, I know we don't have a lot of time, is the love relationship you talk about with subscribers. We had Peter Adderton on, from a Boost Mobile, formerly Boost Mobile, earlier. He was saying, if you don't have a focus on the customer, then you're just selling minutes and that's it. >> Yeah. >> And his point was, they don't really care. >> Yeah. Let's talk about organizational energy, right? How much energy is contained within any organization, not just Telco, but any organization. To some of your people time is the hours they work per week. And then you think of that as a sack on how you're allocating your time and spending your time, right? And so I think they spend 50% of their time, maybe more, fighting servers, machines, the network, right? And having all these battles. How much of that organizational energy is dedicated to driving great subscriber experiences? And it just shrunk, right? And I think that's where the public cloud can really help them. Like ride the dragon. Let the dragon deal with some of this underlying stuff. So that you can ride a dragon, survey the land, focus on your subscriber and back to the software. Use software, just like the OTT players are doing. They are taking away your ARPU. They're siphoning your ARPU, 'cause they're providing a better customer experience. You need to compete on that dimension. Not the network, not the three Telcos in the country. You're competing again, WhatsApp, Apple, Amazon, Facebook. And you spent how much of your organizational energy to focus on that? Very small. >> And that's where digital platforms roll by, it uses the word platform, why? Because everybody wants to be a platform. Why do you want to be a platform? Because I want to be like Amazon, they're a platform. And you think about Netflix, right? It's not, you know, you don't think about Netflix UK or Netflix Spain, right? >> It's global. >> There's one Netflix >> Yeah, yeah. >> You don't think about their marketing department or their sales department or their customer service, you think about the app. >> Yeah. >> You know. One interface. And that's what digital platforms allow you to do. And granted, there's a lot of public policy to deal with, but if you're shooting satellites up in space, >> Yeah. >> You know, now, you own that space, right, global network. >> And what makes Netflix so good, I think, is that it knows you, right? It knows what you're watching and recommends things, and you're like, "Oh, I would like that, that's great." Who knows more about you than your mobile phone? Carry it everywhere you go, right? What you're watching, what you're doing, who you're calling, what time did you wake up? And right now all of that data we talked about a couple of days ago, it's trapped in siloed old systems. And like why do people think Google knows so much about you? Telco knows about you. And to start to use that to drive a great experience. >> And you've got a great relationship with Netflix. The relationship we have with our our carrier is to your admin, "can you call these guys? "I don't know, I lost the password, I can't get in". >> Right. >> It's like-- >> Or you get SIM hacked-- >> I don't have an hour and a half to call your call center 'cause you don't have a chat bot, right. >> I don't have time. >> Chat bot, right. I can't even do the chat bot because my problem is, you're like, I got to talk to someone. All of their systems are built with the intention of a human being on the other side, and there's all this awesome chat bot AI that works. >> Yeah. >> Set it free. >> Yeah, yeah, right. You almost rather go to the dentist, then calling your carrier. >> Well, we're going to wrap things up here on the keynote review. Did you achieve what you wanted to achieve? I mean, controversy, bold vision, leadership, also that came across, but people they know who you are now. You're out there and that's great news. >> Yeah. I think I rocked the Telco universe and I'm really, that was my goal, and I think I accomplish it so, very excited. >> Well, we love having you on theCUBE. It's great to have great conversations, not only are you dynamic and smart, you're causing a lot of controversy, in a good way and getting, waking people up. >> Making people talk, that's a start. >> And I think, the conversations are there. People are talking and having relationships on the ecosystem open, it's all there. Danielle Royston, you are a digital revolution, DR. Telco DR, thanks for coming to theCube. >> Thank you so much, always fun. >> Good to see you. >> Thanks. >> Of course, back to the Cloud City studios. Adam is going to take it from here and continue on day three of theCube. Adam in studio, thanks for having us and take it from here.

(upbeat music) >> Okay, thanks to the studio there for the handoff. Appreciate it, we're here for breaking news and it's exciting that we have Amol Phadke who's the Managing Director, Google is breaking some hard news here, Dave, so we want to bring him in and get commentary while we end out day two. Obviously, the story here is CLOUD CITY. We are in the CLOUD CITY. Amol, thanks for coming on remotely into our physical hybrid set here. Thanks for coming on. >> Thank you, John. I'm very excited to be here, virtually at MWC 21. >> Oh we got Bon Jovi ready to play. Everyone's waiting for that concert and you're the only thing standing between Bon Jovi and all the great stuff so. >> A lot of people watching. >> Thanks for coming on. Seriously you guys got some big news first Ericsson partners with you guys on 5G, platform deal with anthesis as well as open O-ran Alliance. You guys are joining huge testament to the industry. Obviously Google with all your innovation you guys have in the big three cloud hyperscalers. Obviously you guys invented SRE, so you know, you're no stranger to large scale. What's the news? Tell us why this Ericsson news is so important. Let's start with the Ericsson announcement. >> Sure, so, John, I mean, we are very excited today to finally bring to the market, the strategic partnership that we've been building with Ericsson for the last few months, the partnership, the reason we feel this is very important to the industry is we are actually doing this in conjunction with very large CSPs. So it's not done in isolation. You in fact saw in the press release that we have already launched something together with Telecom Italia in Italy. Because you will see that also in the press. And really the partnership is on three pillars. Number one, how can CSPs monetize 5G and Edge, which is a real team at the moment using Google Clouds solutions like the Edge computing platform and Anthos and Ericsson's cutting Edge 5G components, 5G solutions. And if we can onboard this together at the CSPs, such as Telecom Italia, that creates massive time to market efficiency. So that's point 1. Speed and agility is key John. But then point 2, it also unlocks a lot of Edge use cases for a bunch of verticals, retail, manufacturing, healthcare and so on. Which we are already starting to launch together with Ericsson. And so that's the second pillar. And then the final pillar of course, is this continuous wave of Cloud Native innovation that you just highlighted, John. We are going to try and double down on it between ourselves and Ericsson to really try and create this Cloud Native Application Suite for 5G over time. >> Talk about the innovations around Cloud, because the message we're hearing this year at Mobile World Congress is that the public cloud is driving the innovation and you know, I can be a little bit over the top and say, so the Telcos are slow, they're like glaciers, they move slow, but they're just moving packets. They are there, they're moving the network around. The innovation is happening on top. So there's some hardened operations operating the networks. Now you have a build concept, Cloud Native enables that. So you've got containers. You can put that, encapsulate that older technology and integrate it in. So this is not a rip and replace, someone has to die to win. This is a partnership with the Telco's. Can you share your thoughts on that piece? >> Spot on, John, spot on. We, we believe that it's a massive partnership opportunity. There's zero conflict or tensions in this sort of ecosystem. And the reason for that is, when you talk about that containerization and write once and deploy everywhere type architecture, that we are trying to do, that's where the Cloud Native be really helps. Like when you create Ericsson 5G solutions with the operators at Telecom Italia, once you build a solution, you don't have to worry about, do I need to go create that again and again for every deployment. As long as you have Anthos and Ericsson working, you should be able to have the same experience everywhere. >> Yeah, John and I talk all the time in theCUBE about how developers are really going to drive the Edge. You're clearly doing that with your Distributor Cloud, building out a Telco Cloud. I wonder if you could talk a little bit more about how you see that evolving and a lot of the AI that's done today is done in the cloud. A lot of modeling being done. When you think about Edge, you think about AI inferencing, you think about all these monetization opportunities. How are you thinking about that? >> Sure, so I think David first of all, it's a fantastic segue into how we are looking at analytics at the Edge, right? So we, we have realized that (connection disruption) is a very, very data computing, heavy operation. So certainly the training of the models is still going to stay in cloud for the foreseeable future. But the influencing part that you mentioned, is definitely something that we can offload to the Edge? Why is that so important? In the pandemic era think of running a shop or a factory floor, completely autonomously, needing zero minimal human intervention. And if you want to look at an assembly line and look at AI influencing as a way to find out assembly line defects on products and manufacturing. That's a very difficult problem to solve unless you actually create those influencing models at the Edge. So creating that ecosystem of an Ericsson and a Google Cloud and Telecom Italia type of carrier, gives you that Edge placement of the workloads that would fit right next to a factory floor in our manufacturing example. And then on top of that, you could run the AI influencing to really put in the hands of the manufacturer, a visual inspection capability to just bring this to life. >> Great, thank you for that and now the other piece of the announcement of course is the open, Open RAN. We've been talking about that all week. And you know, you well remember when Cloud first came out, people were concerned about security. And of course, now everybody's asking the question, can we still get the reliability and the security that we're used to with the Telcos? And of course over time we learned that you guys actually are pretty good at security. So how do you see the security component? Maybe first talk about the Open RAN piece, why that's important and how security fits? >> Sure, so first of all, Open RAN is something that we have taken great interest in the last year or so as it started evolving. And the reason for that is fairly simple Dave, this aggregation of networks has been happening for some time. In the radio layer, we believe that's the final frontier of sort of unlocking and desegregating that radio layer. And why is that so important? 80% of the operators spent globally is on radio across the entire infrastructure, 80% is on radio. If you disaggregate that and if you created synergies for your CSP partners and clients, that meant you have standard purpose hardware, standard purpose software with open interfaces, number one, massive difference in PCO. Number two, the supply chain gets streamlined and becomes a really, really simple way to manage a fairly large distribution, that's about to get larger with 5G and the capillarity that 5G needs. You're thinking of tens of thousands of micro cells and radio cells going everywhere. And having that kind of standardized hardware, software with open interfaces, is an extremely important cost dimension too. And on the revenue side, the things is that, the reason we got so excited with Open RAN was, you can now run a lot of API's on the radio net itself. That then suddenly brings a whole developer community on the radio layer. That then helps you do a bunch of things like closed loop automation for network optimization, as well as potentially looking at monetization opportunities by hyper personalizing yours and mine experiences at a device level, from the cell tower. And so that really is what is driving us towards this Open RAN type announcement. >> John: Amol, we've only got a minute and a half. I want to get your thoughts real quick on, on Open Source and the innovation. Danielle Royston, who's the CEO of TelcoDr. She's a keynote today. And she mentioned that the iPhone, 14 years ago was launched, okay. And you think about Open, and you mentioned proprietary with the 5G, and having O-RAN be more commodity and industry standard. That's going to lower the costs, increase the surface area of infrastructure. Everyone wins, 'cause everyone wants more connectivity options. Software is going to be the key to success for the telco industry, and Open Source is driving that. Is Android the playbook that you guys pioneered, obviously at Google with phones was very successful. How is that a playbook or an indicator to what could happen at Telco? >> Absolutely John and the parallel analogy that you raised is spot on. We believe in the Telco world Anthos multi-cloud as a unifying software development layer and the app development platform is the way that people will start to drive this innovation. Whether it's a radio or whether it's in the core or whether it's on the IT side of house. Same software running everywhere. That really allows you that whole CICD SRE type development models that we are familiar with, but on the telecom side. And that's where we are seeing some massive innovation opportunities for start, that would be for systems to come on. >> John: That's great stuff. And I was, just heard someone in the hallway just yesterday and say, you want to be the smartphone. You don't want to be the Blackberry going forward. That's pretty much the consensus here at Mobile World Congress. Amol, thank you for coming on and sharing the hard news with Google. Congratulations on the Ericsson Anthos platform deal as well as the Open Ran Alliance. Congratulations, good to see you. And by the way, you'll be keynoting tomorrow on theCUBE featured segments. So, watch that interview. >> Thank you John. Glad to be here. >> Thanks Amol. Managing Director, Telecom Industry Solutions at Google, obviously player, he's managing that business. Big opportunities for Google because they have the technology to get the chops Dave, and we're going to now, bring on Danielle Royston, she's here, I want to bring her up on the stage. Bon Jovi's about to go on, behind us, Bon Jovi's here. And this is like a nightclub, small intimate setting here in CLOUD CITY. Dave, Bon Jovi is right there. He's going to come on stage after we close down here, but first let's bring up the CEO of TelcoDR, Danielle Royston, great to see you. She's hot off the keynote. We're going to see you have a mic. Great to see you. >> Oh, it's great to be here, awesome. >> We are going to see you tomorrow for an official unpacking of the keynote but thanks for coming by and closing, swinging by. >> I know we're closing down the show. It's been a big, it's been a big day today at MWC and in CLOUD CITY. >> And Bon Jovi by the way. >> Day two, I mean really starting to get packed. >> And I mean, everyone's coming in, the band's warming up. You can kind of hear it. I think Elon Musk is about to go on as well. So I mean, it's really happening. >> A lot of buzz about CLOUD CITY out there in the hallway. >> Yeah, yeah. No, I mean, I think everyone's talking about it. I'm really, really excited >> Awesome. >> with how it's going, so yeah. >> Well, this is awesome, while we got you here, we want to put you to work being theCUBE analyst for this segment. You just heard Google. We broke them in for a breaking news segment. Obviously, so hard news Ericsson partnership. We're in the, actually former Ericsson booth. They're not even here, it's now the TelcoDR booth. But that's and then Open RAN again, Open Source. You got 5G, you got Open Source all happening. What's your take on this, as you're seeing this? >> Yeah, I think, you know, there's two big, and I talked about in my keynote this morning, there's two big technological changes that are happening in our industry simultaneously. And I don't think we could have had it--MWC 21 I certainly wanted to make it about the Public Cloud. I think I'm sort of successful in doing that. And I think the other piece is Open RAN, right? And I think these two big shifts are happening and I'm really thrilled about it. And so, yeah, we saw these two. >> I loved your keynote, we were here live Chloe was here filling in for Dave while Dave was going to do some research and getting some breaking stories. But you are on stage and, and we were talking, Chloe's like, these there's trillions of dollars, John on the table. And I was making the point, that the money's in the middle of the table and it's changing hands. If people don't watch it. And then you onstage said there's trillions of dollars. This is a real competitive shift with dollars on the table. And you've got cultural collision. You've got operators and builders trying to figure out, it feels like Dev Ops is coming in here. >> Yeah. >> I mean, what's the, what's the holistic vibe. What's the, what do you? >> Yeah, I think my message is about, we can use the software and specifically the software, the Public Cloud, to double your ARPU without massive CapEx expenditure. And I think the CSPs has always viewed to get the increase in ARPU, I got to build out the network, I got to spend a lot of money. And with these two technologies that require might be dropped. And then in exchange for doubling our ARPU, why not? We should do that absolutely. >> You know, your message has been pretty clear that you got to get on, on the wave. Got to ride the wave or become driftwood, as John said yesterday. And I think it's pretty, it's becoming pretty clear that that's the case for the Telcos. I feel like Danielle, that they entering this decade, perhaps with a little bit more humility than they have in the past. And then, you know, maybe, especially as it relates to developers, we're just talking about building out the Edge. We always talk about how developers are really going to be a key factor in the Edge and that's not a wheelhouse necessarily. But, obviously they're going to have to partner for that to have, they're going to have to embrace Cloud Native. I mean, it's pretty clear that your premise is right on. We'll see how long it takes, but if it, if they don't move fast, you know, what's going to happen. >> Well, I think you look at it from the enterprise's perspective. And we just heard Google talking about it. We need to provide a tech stack that the enterprises can write to. Now, historically they haven't had this opportunity. Historically that CSPs have provided it. Now you're going to be able to write against Google's tech stack. And that's something that is documented, it's available. There's developers out there that know it. And so I think that's the big opportunity. And this might be the, the big use case that they've been looking for with 5G and looking forward to 6G. And so it's a huge opportunity for CSPs to do that. >> I think that's an important point because you've got to place bets. And if I'm betting on Google or Amazon, Microsoft, okay, those are pretty safe bets, right? Those guys are going to be around. >> You think, I mean, they're like, no, don't trust the hyperscalers. And like, are you guys nuts? They're safe bets. >> Safe bets in terms of your investment in technology, now you've got to move fast. >> Yeah. >> That's the other piece of it. >> Yeah. >> You got to change your business model. >> Yeah, absolutely. >> Well, you got to be in the right side of history too. I mean, I mean, what is trust actually really mean? Does Snowflake trust Amazon? It sure did to get them where they are, but now they're looking at other options. >> That is a great example, John. It really is, because there's a company that can move fast, but the same time they compete, but the same time they add incremental value. >> And so here you can see the narrative like, oh no, we're partnering, Telcos aren't bad. No one needs to die to bring in the new. Well containers do, will help them manage that operational legacy, but culturally, if they don't move, they're going to have an asset that'll get rolled up into a SPAC or some sort of private equity deal. And because the old model of building CapEx and extract rents is kind of shifting because the value's shifting. So to me, I think this is what we're watching still kind of unknown. Danielle, love to get your thoughts on this, because if the value shifts to services, which is a consumption model like cloud, >> Yeah. >> Then you can, don't have to try to extract the rents out of the CapEx or, what's your thought, I mean. >> Yeah, I don't think you need to own the entire stack to provide value. And I think that's where we are today in Telco, right. There, I mean, nuts and bolts of the stack, the servers, you know, the cabling, everything. And I'm like, stand on the shoulders of these amazing tech giants that have solved, you know, mega data centers, right? Huge data centers at scale, and just leverage their investment and for your own benefit and start to focus, and we heard Amol talking about it, starts to focus on your subscriber and driving a great experience for us, right, yeah. >> Well, you've talking about that many times that you exhibit, you're right. If the conversation has been, has to go beyond, okay, we're just connectivity. It's got to be going to be like, oh, it's $10 a month for roaming charges, ah great. >> Yeah. >> Tick that box. Right, it's those value added services that you're talking about. And it's an infinite number of those that can be developed. And that's where the partnerships come in, and creativity in the industry. It's just a blank piece of paper. >> Well, we, you know, everyone thinks Google knows everything about you, right? We've had the experience on our phone where they're serving up ads and you're like, how did it? >> Facebook does? >> Right, Facebook. But you know who knows more about us than, than Google or your mother even, your Telco. >> Yeah. >> You take your phone with you everywhere, right? And so it's time to start unlocking all of that knowledge and using it to provide a really great experience. >> And by the way, congratulations on the CEO to Totogi and the investment hundred million dollars. That's a game changer statement again, back to the billing and the there's a good, there's a whole new team, even all up and down the stack of solutions, great stuff. And I want to unpack that tomorrow. I want to hold that, we're going to meet tomorrow. I want to, I want to, leave that here. >> Stay in the data for a second, because you made the point before in your keynote as well. That, it's that it's the data that drives the value of these companies. Why is it that Apple, Amazon, Google, Facebook now trillion dollar valuations. >> Yeah. >> It's all about the data and the Telco's have the data, but they can't figure out how to turn that into valuation. >> I think there's two parts of the data problem, which is number one, the data is trapped in on-premise, siloed systems that are not open. You can't connect them, and you certainly do it without, and we talked about it, I think yesterday, you know, millions of dollars of expenditure. And I think the other piece that's really interesting is that it's not connected to a mechanism to get it out in a timely manner, right? This is data that's aging by the minute. And when it takes you weeks to get the insight , it's useless, right? And so to Totogi, we announced the launch of Totogi, I'll get a little to Totogi plug in there, right. Totogi is connecting that insight to the charger, to the engagement engine and getting it out to subscribers. I think that's the beginning of this connection. I think it's a hard problem to solve it would have been solved already. But I think the key is leveraging the Public Cloud to get your data out of on-premise and, and mashing it up against these great services that Google and Azure and Amazon provide to drive it into the hands of the subscriber, make it very actionable, very monetizeable right at the end, that's what they want. More ARPU, more revenue, right. And you know, we've heard some keynotes from GSMA yesterday, some big, big guys, you know, talking about how, you know, it's not fair that these other communication platforms are not regulated. You know, Telco is heavily regulated and they're like, it's not fair. And I'm like, yep, it's not fair. That's life, right? >> Yeah. >> Stop complaining about it and start treating your customers better. So they're happy to give you more money. >> Yeah, and I think that's the message about the assets too. But one thing I will say, this Mobile World Congress, is that we've been having a lot of fun here in CLOUD CITY. I have to ask you a personal question. Have you been having fun? You look great on the keynote. You have a spring to your step. CLOUD CITY is beautiful, spectacular here. >> Yeah. >> Give us some highlights, personal highlights from your trip so far. >> Well number one, I'm, I'm psyched that the keynote is delivered in and done. I mean, I think it takes my blood pressure down a bunch. You know, the spring in my step, I wore these fun little tennis shoes and that was really fun. But yeah, I'm having, I'm having, I think a lot of things, great conversations. Yes the attendance is reduced. You know, usually you see hundreds of people from the big group carriers, especially the European groups. And yeah the attendance is reduced, but the senior guys are here, right? The senior leadership teams are in the booth. We're having meetings, we're having amazing conversations. I think the last year we really did live a decade in one year. I think they woke up to the power of the Public Cloud. >> Yeah, the pandemic helped. >> I mean, there was no way that they got business done without cloud based tools. And I think the light bulb went off. I think I'm right in the right moment. It's Awesome. >> Do you think that, do you think that they'll think in there, like left money on the table because you look at the pandemic, there were three categories of companies, losers, people who held the line, struggled and then winners. >> Yeah. >> Big time tale wind, booming. Obviously the Zooms of the world. Telco's did well. They were up and running, business was good. You think they might've left some money on the table? They could have done more. >> Yeah, I think the ones that were, you know, people talk about digital transformation. We're digital Telco, we're digitally enabled. And I think the pandemic really tested this, right. Can you deliver a contactless SIM? Or do you need to go to a store, in person, to get to go pick it up? And I had a broken SIM during the pandemic. My provider made me go to the store and I'm like, is it even open? And so I heard other stories of Telcos that were very digitally enabled, right. They were using Uber to deliver sims, and all sorts of fun, crazy stuff and new ideas. And they were able to pivot. >> Agile. >> Right, agile. And so I think, I think that was a really big wake up call. >> Telemedicine booming. >> So If you were in a digital business during the pandemic. In general, you're out of business, maybe unless you were a Telco, but I think you're right. I think the light bulb went off. It was an aha moment. And they said, oh-oh, if we don't move. >> I mean, I am not kidding right. As an ex-CEO where I was trying to collect signatures on renewals, right. Here's a DocuSign, which for the world is like, duh. I mean, our school uses DocuSign. I had telcos that required an in-person signature, >> Facts. >> Right, in some country, once a month on Tuesday between 10 and 2. And I'm like, how are you doing business, like that? That's like the dark ages. >> Yeah, this is where the crypto guys got it right, with know your customer. >> Yeah, right. >> 'Cause they have the data. >> Well, they had to, they had to. >> Yeah. >> There's a lot of things that's going wrong on crypto, we don't want to, we could do a whole show on that. But Danielle great to have you drop by, obviously Bon Jovi's here. How did you get Bon Jovi? Huge fan, New Jersey boy, Patriot's fan. >> Yeah. >> Dave, we love him. >> Fantastic. >> Well, I mean, who doesn't love Bon Jovi, right? We knew we wanted a rocker, right. Rock and roll is all about challenging the status quo. That, I mean, since the beginning and that's what we're doing here, right. We're really challenging like the way things have been done in Telco. Kind of just shattering the glass ceiling in lots of different ways, right. Calling the old guys dinosaurs. I'm sure those guys love me, right. I mean, how much do they hate me right now? Or they're like that girl, oh, so. >> Well we are punk rock. They're rock and roll. >> Right, right. I mean, maybe we should have gotten The Clash, right. Black Flag, right. I'm a little bit older than you. >> Bon Jovi's good. >> Right, we'll go with Bon Jovi. >> We like both of them. >> Accessible, right. >> Once's more conservative rock and roll still edgy. >> Yeah, so really excited to get them here. I've met him before. And so hopefully he'll remember me. It's been a couple of years since I've seen him. So can't wait to connect with him again. I think we have Elon Musk coming up and that's going to be, it's always exciting to hear that guy talk, so yeah. >> Yeah, he's going to be inspiration he'll talk space, SpaceX, >> Oh yeah. >> And possibly Starlink. >> Talking about the edge. >> Starlink, right. >> Starlink. >> I mean, those guys are launching rockets and deploying satellites and I think that's really interesting for rural. For rural right in Telco, right. Being able to deploy very quickly in rural where the, maybe the cost, you know, per gig doesn't make sense. You know, the cost for deployment of tower, I think. I mean, that's an interesting idea right there, yeah. >> It's exciting, he's inspirational. I think a lot of people look at the younger generation coming in and saying why are we doing things? A lot of people are questioning and they see the cloud. They're saying, oh, A or B, why are we doing this? This is such an easier, better way. >> Yeah. >> I think eventually the generation shifts in time. >> It's coming. I'm so excited to be a part of it, yeah. >> Great, great leadership. And I want to say that you are real innovative, glad to have us here and presenting with you here. >> Awesome team. >> I'm excited to have you guys. We talked last night about how great this partnership is, so thank you so much, yeah. >> TheCUBE, theCUBE's rocking inside the CLOUD CITY. The streets of the CLOUD CITY are hustling and booming. >> Packed. >> Packed in here. All stuff, great stuff. Thanks for coming on. >> Yep, thanks so much. >> Bon Jovi is here, we got a shot of Bon Jovi. Do we have a screenshot of Bon Jovi? >> Yeah, there it is. >> There it is, yeah. >> Okay, he's about to come on stage and we're going to take a break here. We're going to take and send it back to Adam and the team in the studio. Thanks guys.

>>from around the globe. It's the Cube with digital coverage of AWS reinvent 2020 Special coverage sponsored by AWS Global Partner Network. Right. Welcome back to the cubes. Live coverage of AWS reinvent 2020 were virtual this year. We're not in person. We have to do it remote but the Cuba's virtual And I'm John for your host here with Cube Virtual next guest, Sarah Cooper, who is the general manager of the i o T Solutions with a W s. Sarah. Great to see you. Eso you last year in person. In real life, now we're remote. But thanks for coming on. Thank you. >>Thanks, John. Always good to be on the Cube and great to see you again. I don't know how many years it's been from our initial meeting, but it's been a few. >>Well, we gotta we gotta cube search engine. You were on in 2016, but we saw each other last year on when we're riffing on the i o t. News. A lot of great stuff. I mean, from Speed Racer all the way down through all the industrial stuff. Even more this year. But two things that jumped out at me this year. War is the carrier keynote and also the BlackBerry kind of automotive thing again speaks to kind of two megatrends. Obviously, automotive will get to a second, but the carrier announcement was really interesting. You guys did this thing and I was so impressed with the cold chain, uh, product. It was the connected cold chain. It was called, Um, this is where the carrier, which is known for air conditioning This is critical I o t devices that stays with the vaccines involved. Take a minute to explain what the cold chain connected cold chain project waas. >>Yeah, absolutely. So. So we worked closely and are working closely with Carrier on on a product called Links Now Cold chain. Um, as Dave Gitlin, the CEO of Carrier, described in Andy's keynote eyes about moving perishable goods, things that need certain temperature ranges from point A to point B and that usually it sounds simple. Uh, that's not quite so simple. It's usually you know, least you know, 5 to 25 hops, sometimes as much as 40. Andi zehr these air partial goods This is food. This is medicines. This is vaccines. Very hot topic at the moment. And today you know you're moving between ships and those big tractor trailers, and you've got warehouses with refrigeration units and you've got retail grocery stores with refrigeration units thes air, all different data sources that are owned by different. You know, members of that supply chain that value chain and to end. And so what links does is it pulls the data from all of the curier equipment and then pulls that data and looks across all of this information, using things like machine learning to draw inference and relationship and then be allows us to be able to make smart recommendations on things like routes. Or, if you know, a particular produce might need to stop before its original event to make sure it's got long shelf life. It allows us basically to provide that transparency and toe end, which is so difficult because of the number of players. And it's in part due to curious breath of products. And then, you know, with AWS, we're bringing the digital technology side. We got the i o t. The M l. A lot of big data processing pieces, eh? So we're really excited about that. I have to say It's one of the easiest projects to hire for when you talk about making sure that we're able to reduce food waste from the current 30 to 40% or that we're working on making sure that vaccines are efficacious by the time that they get a vaccination site, engineers sign up pretty quickly. >>You know the cliche. You know, mission driven companies. They're always kind of like people love the work for mission driven companies. In this case, you have a project and group that literally is changing the world. If you think about just the life savings on the on the on the vaccine side, that's obvious. We all can relate to that now with covert on full display. But just in terms of energy consumption, on food, ways to perishables if you get the costs involved to society, hunger around the world. Uh, just >>food is >>just wasted, and there are people starving, right? So when you start looking at this as an instrumentation problem, right, it gets really interesting. So you mentioned supply chain value chain. This is I o t potentially, even Blockchain again. This is a key change. The world area. You guys have a multi year deal with Carrier, So validation. What does that mean? Specifically, you guys gonna provide cloud services? Um, what's that all mean? >>Yeah. So we were bringing our engineering talent as this carrier. This is a code development, so we're actually jointly developing together. They bring a lot of the domain expertise they bring, you know, years and years of experience in refrigeration, Um, and in, you know, track and trace of these products. And we bring engineers who have vast experience at scale in these kinds of inference, challenges and and data management and data quality. And so it's really kind of bringing the best of both worlds. And you see this happening more and more. I think in general, where you've got a company like AWS that has strong digital expertise and a history of product innovation, working with customers that are very innovative themselves, but typically have been innovative in in, you know, traditional hardware products and the two worlds coming together to make sure that we can really solve some of the big challenges that are facing our society today. And, um, again, you know, it's great to wake up in the morning and get to work on a project that has that kind of impact. >>Well, before we move on to the whole BlackBerry automotive thing, which is another whole fascinating thing share something that people might not know about this carrier project. That's important. Um, whether it's something anecdotal, something that you know, Um, that's important. What, what what's what's What else is there that's game changing that you think is important to point out? >>Yeah, you know, I don't know that when we first started working with Carrier on on scoping this project that I had really thought through all the different players that are touched by cold chain. Um, certainly we've got a number of them within Amazon with our our fulfillment technologies and our grocery stores. That that's logical. Um, you think about the shippers and people who are out, you know, um, farming. And you know, I mean, crabmeat is something that moves in these big refrigerated containers, but actually there's there are transportation companies. There's drivers of these big rigs that need to make sure that they're being that they have fuel consumption management. You've got customers, you know, really kind of throughout that piece, freight forwarders. And so really the breath of the people that are touched, not just you and I is consumers of of perishable goods and fruits and produce on DNA medicines, but also really, that full end to end ecosystem on that's That's both the exciting part from A from a business standpoint, but also the exciting part from the technology stand. >>Well, it's great work, and I applaud you for it's one of those things where foodways isn't just a supply chain impacts the rest of the world because you're more efficient. You could distribute food, toe other places where people are hungry and just its overall impact is huge trickle effect. So impact is huge. Okay, now let's talk about the automotive peace. Because last year we had on the Cube folks from BlackBerry and remember them came on like BlackBerry. Isn't that the phone that went extinct by the iPhone? No, no. There's a whole nother io ti automotive thing around. Ivy Ivy? Why intelligent vehicle data platform? You guys just announced a multiyear agreement with them to develop that product combined with some of the I O. T and machine learning. Could you take him in to explain what this relationship is. What does it mean? What does it mean for the industry? >>Yeah, it's It's similar to the carrier relationship. You know we are. We're engineering together. Um, in this instance Q and X, which is a division of BlackBerry, is in 175 million vehicles. I mean, just think about that. They're running under the covers, and they are. They are a safety security layer and a real time operating system. So you know, when you think about all of the products, really end end in Q and X isn't just in automotives. It's in nuclear power plants. It's in manufacturing automation. It's one of those products that that you probably benefit from, but you didn't know it. Um, and in the automotive space, it's the piece that manages the safety certified layers of data coming off of sensors in the car. And so, fundamentally, what we're doing with Ivy is we're up leveling that information today. If you think about a car, you've got 1500 suppliers that are all providing parts into that far, which means that different makes and models have different seats. Sensors to give you wait in the back, you know, seat as an example. And so if do you want to write an application that tries to determine if that weight in the back seat is your dog or not, my dog happens to be bothering me at the moment. Z. >>That's one of the benefits of working at home. You know? >>Absolutely. So we'll use him as an excuse here. But if you want to know if that's a dog on the back seat, um, being able Thio, then figure out the PC electric measurements and the algorithms, um means you have to know what sensors air in that back seat, which means you got to write essentially an application Pir sensor manufacturer for vehicle make and model That doesn't work so fundamentally What Ivy does, is it? It abstracts away the differences between the vendors and then it up levels information by using machine learning and analytics running in the car. To be able to allow a developer to say, you know, a P I. Is there a dog in the car like How simple is that? I don't have to figure out what the weight measurement is. I don't know. I have to know if there's cameras in the car or if there's some other way to know. If the dog I just need to ask, Is there dog in the car? And the A P. I, for my view, will tell you yes, No, or I don't know, you know, because sometimes there isn't the technology to know that. And then the application developer can then use that information to build delightful experiences, things that make your dog behave, hopefully, things that might help protect them on a hot day. Um, you know, in things where you know that if there's a child in the car, you don't play explicit lyrics. If they're fighting in the back seat, you make sure that the cartoons go off until they behave themselves and cartoons come back on. There are lots of in vehicle experiences that can be enabled by this as well as vehicle operations. So, you know, being able to do >>yeah and all that stuff. >>Yeah, Selective recalls making sure that Onley cars that are actually affected need to come in and making sure that that you know, that's that's quantified and that, you know, it is actually safe to drive to the point of recall. All of that could be done on a vehicle by vehicle basis. >>So are you competing with car companies now? >>No, fundamentally, the oe EMS are the Are the companies that that the car manufacturers are those that end up delivering this capability and they own the data. You know, this isn't something where BlackBerry or A W S owns the data the auto manufacturers dio so it's there platforms to make a delightful experience out of, um, we're just helping to make sure that that's as easy as possible and opening up. You know, the potential innovation so that it's, you know, it's certainly their developers internally. But if they want take advantage of the millions of AWS developers now, they could do that. >>Sarah, Great to have you on one of the things. I just want a final questions or final point. Let's get your reaction to Is that it seems to me with the cloud in this post covert scale error when you start to get into edge, um, you know, industrial I o t. You hear things like instrumentation supply chain, these air buzzwords, these air kind of characteristics all kind of in play. But the other observation is partnerships, arm or co engineering. Co development vibe. Is that just unique? Thio what you're doing? Or do you see this as kind of as a template for partnering? Because when you start to get these abstraction layers, the heavy lifting can be under the covers. You have this enablement model. What's your quick take on this? >>Yeah, I think we talk about undifferentiated heavy lifting, a lot of Amazon on defunding mentally. That's different for each industry. And he talked about that. His keynote. And so I think you know you'll see more and more co development and co engineering coming from from companies across when we have big technical challenges and these air complex problems to solve it takes a village >>awesome. Sarah Cooper Thanks for coming on GM of Iot. TIF Solutions A. The best to great success stories. The carrier and Blackberry, one Automotive with Black Braids operating system that powers the safety and for cars and, hopefully, future of application, development and carrier, with the cold connected chain delivering perishable goods, vaccines and food. Changing the game. That's a game changer. Thanks for coming on. >>Thanks, John appreciate. Always good to see you. >>Okay. Cube coverage. Jump shot for your host. Stay with us from or coverage throughout the day and all next couple weeks. Thanks for watching. Yeah. Mhm.

>>from around the globe. It's the Cube covering upgrade twenty twenty, The NTT Research Summit presented by NTT Research. >>Welcome back. I'm stupid a man. And this is the Cubes coverage of Upgrade twenty twenty. Of course, it's the NTT Research Summit and happy to welcome to the program someone that watch the Cube for a long time. But first time on the program. Simon Walsh. He is the new CEO of NTT America's Simon. Great to see you and thanks so much for joining us. >>Thanks very much. Too good to be here. All right. See, >>A Zai mentioned your your previous companies that you've worked for are ones that the Cube and Cube audience are well aware of. Matter of fact, when I worked for some of those companies, NTT is one of the large global companies that I had the pleasure to interact with over the years. But if you could maybe let's start with just a little bit of your background. And as I said, it's only been a few months that you've been the CEO, so you know, what's it like coming into a role like this? You know, during the situation that we're all faced with in twenty twenty. >>Yeah, Thank you. I mean, my background is really in, You know, the platforms that enable the customers Thio run their technologies. Andi, Uh, you know, I spent some of my time in Europe and the media on then latterly the last five plus years in the Americas. I have to say I really enjoy It's a much better environment. If I think about it from a GDP and an economy perspective, it's, ah really dynamic place to work. I worked with companies headquartered from Europe running America's, and I've worked with companies that were headquartered in the Americas, running some of the European businesses. So I've crossed the continent's if you like. I recently joined NTT. I have to say, you know, it was a pretty lengthy process to explore, but that was partly, you know, interviews and due diligence because you want to make sure that, you know, you're you're buying into a company that, you know, number one, you can have ah, cultural compatibility with, but also somebody who you see really investing in technology that consult for, you know, the business agenda of the markets. So that's really a bit about my background and then, you know, joining. I mean, I literally joined last week of June, so my whole time has bean through, locked down in terms of employment. It's been very unique. Taking on a new post, exclusively remote. Andi I was a bit worried, you know, at a human level, just, you know, how do you connect with people? What I would comment is I've actually had the ability to really meet ah, lot more people in person because you can physically get to people's schedules a lot easier. So that's certainly helped, you know. And I've done my, uh, activities of meeting clients. Eso they've been very amenable to connecting talking to our business partners and spending, you know, considerable amount of time with my colleagues, uh, in the Americas and around the world. Andi, it's actually been very rewarding. I think, funnily enough, you probably physically closer because you're on a screen and you probably like twenty four inches away from each other. Whereas in a meeting room you'd be the other side of the table. So it's been unique, but so far so good. >>Well, yeah, absolutely. The the new abnormal is we. We have sometimes say what? We're all usedto looking in the screens all day talking to various people there. Uh, the impact on business, though, has been, uh, you know, obviously ah, lot of different things, depending on the company. But that discussion of digital transformation a few years ago it was like, Oh, I don't know if it's really is it a buzzword? But that the spotlight that's been shown here in twenty twenty is what Israel and what is not leveraging cloud services, giving people agility, being able to react fast because, boy in twenty twenty if we needed to react fast, so help bring us inside a little bit. And your time there, the discussion you're having with customers, that adoption moving along that journey for digital transformation, the impact that you're seeing and house NTT helping its customers as they need to accelerate and respond toe the realities that we see today. >>Yeah, so you're right into I mean, digital disruption has been ongoing for multiple years. Way used to call it technology and change, and now we call it digital disruption or digital transformation. So it's not necessarily new. I think the thing that's really accelerated in twenty twenty, You know, as a consequence of the pandemic is really the word distributed, uh, in that customers are undertaking their digital transformations understanding. You know what it is to modernize processes, you know, modernize the customer experience on Then they're finding that actually, they don't need in a board room and discuss, you know, the performance of the business so they now need to have distributed access to data on. I think the topics that we see very prevalent is the distributed nature off the workforce. Andi. Obviously there's always been a filled workforce, and we've had systems, crm systems and other systems that were built for a distributed workforce. But now we have toe think about our supply chain management systems and our HR systems, the P and L. And you know all of the activities that business undertakes with an entirely distributed workforce, and it's quite abnormal. And I think what we've learned is where is the data on how doe I amalgamate data from distributed systems. And so I see. And we're doing a lot of work with our clients relating to digital transformation, but really about how doe I join data from system a two system F in a distributed manner, most importantly, securely timely on in A in an interface that is usable on it sounds really easy is like Oh, great, yeah, it's just two different data points. Connect them together, make it secure, make it visible, create transparency. But we all know that the world is full of technical debt, legacy systems and platforms Very expensive and significant historical investments on those things Don't modernize themselves overnight. Quite often. The dollars to modernize them don't justify themselves. So we then end up layering on, you know, new technology. So you know what I'm seeing on in digital transformation is really about. How do we handle distributed data Distributed decision making on how we do that in a secure manner on through an interface that is, uh, user friendly? >>Yeah, way. Obviously know that there's had to be some prioritization. You know, the joke. I've had everybody came into twenty twenty with Okay, here. Here's what I'm gonna do for the first half of the year. Here's the objectives that I have, and we kind of throw those in the shredder rather early on Number one priority. I still hear it was probably that the number one priority coming into the year and it stays there, and you've mentioned it multiple times. Its security, you know, is absolutely front and center Still. How overall, though, How are your customers? You know, the c X So sweet. How are they adjusting their priorities? Are there certain projects that just go on hold? Are there certain ones that get front and center? Obviously, you know, that distributed work from anywhere. Telemedicine, uh, you know, teach and learn from anywhere have been top of mind. But any other key learnings you're finding or prioritization changes, some of which are gonna probably stay with us. Uh, you know, for the long term, >>Absolutely. We've definitely seems Thio customers re prioritizing. And I think there is obviously an inevitability to this, a za consequence of the pandemic. I mean, if you were undertaking a campus upgrade, you might just put that on pause for the moment. And we've absolutely seen that. But what we've really seen is a prioritization has been How do we get our information to our users? Whether the user is a customer or whether the user is an employee, you know, there's examples where there's lots of companies who are saying they've got, like, online detail, right. But now they've got to do curbside pickup because they've actually got inventory in the stores. But the stores couldn't open. So what you've seen is a re prioritization to say, Well, when we look out inventory management and the supply chain systems, are we factoring in that the inventory we have in a store could also be seen as inventory across the stores? And in fact, what we've really got now is a distributed warehouse. We've got inventory in the warehouse like wholesale, ready for distribution on. Then we've got inventory in a store retail ready for consumer consumption. What? We don't want that to be separate Infantry. We want that to be holistic on. Then how do we enable any any consumer anywhere to be able to arrange for curbside pickup, which we didn't used to do because we would come into the store or arrange for mail order? But the inventory may come from, you know, I may send something from San Francisco to somebody in Boston because it was in a storied inventory in San Francisco. Now, sure, it's got it's got some freight cost, but I've also got some other efficiency savings, and I'm reducing my working capital in my inventory expense. So we've seen prioritization for really how to take advantage of this. I come back to it. This word distributed is very simple in principle, but everything is now working on a new dynamic. So that's some of the prioritization we've seen. >>Um, you mentioned one of the things that might get put on hold is wait. If I was doing a corporate network update, that might not be the first thing. You know, we we Absolutely. We've gotten some great data on just the changing traffic patterns of the Internet, but the network is so critically important, everybody from home is, you know, dealing with Children doing their zoom classrooms while we're trying to dio video meetings. Um, NTT obviously has a strong, uh, you know, network component to what? Its businesses help us understand the services that are important there. What? What? You're working with customers. And how has this kind of transformed, uh, some of those activities? >>Yeah, Yeah, sure. Thank you. You're so right. I mean, I have to say I just like thio, pay my respects to colleagues and fellow workers around the world who are not just working from home but also home schooling in parallel. Uh, kids are fled the nest, you know, they're working for themselves now, so we don't have the extra activity of home schooling. But I can really have a lot of respect her colleagues who are trying to do both. It's a real fine art on. We've seen a lot of actually just talking of re prioritization. We've seen a lot of companies, including ourselves. You know, say to our colleagues, Look after your Children home, school them do everything you can to support your families on, then get to your work So that re prioritization. Justin behavior has been a key change that we've seen a lot of people do that flexibility to. You know, work is something you do not somewhere you go on. Therefore, as long as the work is done, we can flex around. You know your needs is a family, so that's one prioritization we've seen at, actually. But to your point on the network, it is quite amusing to me that we've been for years now talking about cloud on demand subscription services on Actually, the one asset that you need to really enable cloud is the network and its historically been the least cloudlike that you could possibly imagine Because you still need to specify a physical connection. You still need to specify a band with value you still need to specify. You know, the number of devices you get too attached to it. I think this is really a monstrous change that we're going to experience and really are experiencing the network as a service. I mean, we talk about I as has SAS. But what happened toe now, as I mean really, did we just think that everything was about computing software? The network is the underpin er on DSO. Really? We see a big change and this is where we've been very busy in the network as a service enabling customers tohave dynamic reallocation of resources on the network so that they can prioritize traffic, prioritize content, prioritize events, you know, a lot of customers are now doing activities such as hosting their own event, their own digital conference on. Do you want to prioritize what the user experience is when you host one of those events over perhaps a back office process that, quite frankly, wait a few days so we see a significant opportunity. This is where we've been very busy the last few months in really building out much more dynamic network of the service solutions. You know, the Cloud Network. And I think the whole software defined network agenda has materially accelerated. That's one major area on then. The other area has just been the phenomenal ship to I p voice on soft bone, actually almost the deletion of the phone in its entirety. Everybody using you know, teams or Skype or Google hangouts to really use as their collaboration mechanism on. Then you know, we're providing all the underlying transportation layer. But as I p voice, you know, that creates a much more integrated collaboration. Experience on git creates a cost saving because you're taking away classic voice services. >>Yeah, Simon Boy, I'm excited for that. I I remember when I got my first BlackBerry and they were trying to sell me some things. I'm like, Wait, this is an Internet endpoint. I can do all of these things there and of course you know it's taking taking it. The last dozen years. If If Ghana certain far, but and we always joke, it's like smartphones. We don't use them for phones anymore. We use them for all the messaging and all those services. So, uh, the the data and the network are so critically important, something I want to turn Thio, you know, upgrade twenty twenty. You know what? I'm excited about this. You know, we've talked about, you know, the major impacts of what's happened in twenty twenty, and we're looking at the here and now. But it's great in technology when we get to be able to look forward and look at some of the opportunities out there. So we'd love to hear from your standpoint, some of the areas. What's exciting? You what's exciting? That we can look forward to some of the areas and pockets of research that we see at the event. >>Yeah. Thank you. Strewn E. I think what I like about Aravind is the investment that we make to work with, You know, scientific community, academia, really invest in, you know, forward looking future proofing, how physics and different technologies might play a role in the future. And, you know, some of these investments and some of this research yields commercial products, and some of it doesn't. But it's still a very valuable opportunity for us to really look at you know where technology is going. I think the areas that particularly appealing to me on a personal level, just the whole thing of quantum computing. This is, uh, you know, I know we're already exploring the capabilities of quantum computing in, you know, some labs and Cem academia centers on really to understand, how can we take advantage of that? But I think if you then say and you take another area that we're exploring through the event Biosciences, if you then take the two together and you think Okay, how do we take quantum computing on? We take Biosciences on you think about health care, and then you think about the pandemic. You know? Are there things that we can do with simulations and technologies in the future that really would give us a greater comprehension and ability to accelerate understanding, understand, accelerate testing, and then really contribute to, you know, the health and welfare of society. Andi, I think that's really quite an exciting area for us. So that's a specific topic that I'm particularly interested in. I'm glad to see us doing a lot in that space quantum computing as well as you know, Biosciences. And I'd say, you know, one other area where I still think we're all trying to ascertain how it serves the business is really the area of Blockchain. I think this is, um, intriguing. I'm still mentally trying to master the subject. No amount of white papers has managed Thio overcome the topic of my brain yet, So I'm still working on it on. Then I think cryptography, I come back to the same subject security. I mean, we are dependent as citizens, businesses and nations on technology. Now, on our data is available how we secure it, How we make sure that it's encrypted is absolutely going to be critical. You see an increasing push nationally on globally to ensure that there is, you know, security of data on. I think the subject of cryptography and how we go forward with, you know, beyond one hundred and twenty eight bit is gonna be a very difficult and critical subjects. So these are the areas I'm very impressed with. >>Wonderful. Simon, I wanna give you the final word from update. Great. Twenty twenty. >>Yeah, thanks to you. Just thanks very much, Thio. Anybody that's attending what you'll find through various workshops. There's lots of insight from our strategic partners from research scientists from academia from ourselves. So thank you very much for participating. You know, we always value your feedback. So please tell us what we could do to improve the content to help you with your businesses. Onda, We look forward and hope that everybody stays safe. Thank you for connecting with us virtually >>well. Simon Walsh, Thank you so much. Great. Having a conversation and glad to have you in our cube alumni now, >>thank you very much to have a good day. >>Alright, Stay tuned. More coverage from upgrade twenty twenty. I'm still minimum. And thanks. As always, for watching the cube. Yeah,

>> From around the globe, its theCUBE, covering the UPGRADE 2020, the NTT Research Summit presented by NTT research. >> Welcome back. I'm Stu Miniman and this is theCUBE's coverage of UPGRADE 2020. Of course, it's the NTT Research Summit and happy to welcome to the program, someone that's watched theCUBE for a long time, but first time on the program, Simon Walsh, he is the new CEO of NTT Americas. Simon, great to see you, and thanks so much for joining us. >> Thanks very much Stu, good to be here, nice to see you. >> As I mentioned, your previous companies that you've worked for are that theCUBE and theCUBE audience are well aware of. As a matter of fact, when I worked for some of those companies, NTT is one of the large global companies that I had the pleasure to interact with over the years. But if you could, maybe, let's start with just a bit of your background. And as I said, it's only been a few months that you've been the CEO. So, what's it like coming into a role like this, during the the situation that we're all faced with in 2020? >> Yeah. Thank you. My background is really in the platforms that enable the customers to run their technologies. And, I've spent some of my time in Europe and India and then lastly the last five plus years in the Americas, I have to say, I really enjoy it. It's a much better environment. And if I think about it from a GDP and an economy perspective, it's a really dynamic place to work. I've worked with companies, headquartered from Europe, running in Americas. And I've worked with companies that were headquartered in the Americas, running some of the European businesses. So, I've crossed the continents if you like. And I recently joined NTT and I have to say, it was a pretty lengthy process to explore, but that was partly, interviews and due diligence. Cause you want to make sure that, you're buying into a company that, number one, you can have a cultural compatibility with, but also somebody who you see really investing in technology that consult for the business agenda of the markets. So, that's really a bit about my background and then joining. I mean, I literally joined the last week of June, so, my whole time has been through lockdown in terms of employment. It's been very unique taking on a new post, exclusively remote, and I was a bit worried, at a human level, just, how do you connect with people? But what I would comment is I've actually had the ability to really meet a lot more people in person cause you can physically get to people's schedules a lot easier. So, that's certainly helped. And I've done my activities of meeting up clients. So, they've been very amenable to connecting, talking to our business partners and spending considerable amount of time with my colleagues in the Americas and around the world. And it's actually been very rewarding. I think, funnily enough, you probably physically closer because you're on a screen, and you're probably like 24 inches away from each other. Whereas in a meeting room you'd be the other side of a table. So, it's been unique, but so far so good. >> Oh yeah, absolutely. The new abnormal, as we've sometimes say we're all used to looking in the screens all day, talking to various people there. The impact on business though has been, obviously a lot of different things depending on the company, but that discussion of digital transformation a few years ago, it was like, "Oh, I don't know if it's real, is it a buzz word?" But that the spotlight that's been shown here in 2020 is what is real and what is not? Leveraging cloud services, giving people agility, being able to react fast because buoyant 2020th, we needed to react fast. So, help bring us inside a bit, and your time there, the discussions you're having with customers that adoption, moving along that journey for digital transformation, the impact that you're seeing and how's NTT helping its customers as they need to accelerate and respond to the realities that we see today. >> Yeah. So you're right Stu. I mean, digital disruption has been on varying for multiple years and we used to call it, technology and change and now we call it digital disruption or digital transformation. So, it's not necessarily new. I think the thing that's really accelerated in 2020, as a consequence of the pandemic is really the word distributed in that customers are undertaking their digital transformations, understanding what it is to modernize processes, modernize the customer experience. And then they're finding that actually they don't meet in a boardroom and discuss, the performance of the business. So, they now need to have distributed access to data. And I think that the topics that we see very prevalent is the distributed nature of the workforce. And obviously there's always been a field workforce and we've had systems. CRM systems and other systems that were built for a distributed workforce. But now we have to think about how supply chain management systems and our HR systems, the PNL, and, all of the activities that our business undertakes with an entirely distributed workforce. And it's quite abnormal. What I think what we've learned is where is the data and how do I amalgamate data from distributed systems? And so I see, we're doing a lot of work with our clients relating to digital transformation, but really about how do I join data from system A to System F in a distributed manner? And most importantly, securely, timely and in an interface that is usable. And it sounds really easy. It's like, Oh great. Yeah, it's just two different data points, connect them together, make it secure, make it visible, create transparency. But we all know that the world is full of technical debt, legacy systems and platforms, very expensive and significant historical investments. And those things don't modernize themselves overnight. And quite often the dollars to modernize them don't justify themselves. So, we then end up layering on new technology. So, what I'm seeing in digital transformation is really about how do we handle distributed data, distributed decision making, and how do we do that in a secure manner and through an interface that is user friendly. >> Yeah, we obviously know that there's had to be some prioritization. The joke I've had, everybody came into 2020 with, "Okay, here's what I'm going to do for the first half of the year. Here's the objectives that I have." And we kind of throw those in the shredder rather early on. Number one priority I still hear it was probably that the number one priority coming into the year and it stays there and you've mentioned it multiple times, it's security, it is absolutely front and center still. How overall though, how are your customers, the CXO suite, how are they adjusting their priorities? Are there certain projects that just go on hold? Are there certain ones that get front and center, obviously, you know, that distributed work from anywhere telemedicine, teach and learn from anywhere, have been top of mind. But any other key learnings you're finding or prioritization changes, some of which are going to probably stay with us, for the longterm. >> Absolutely. We've definitely seen customers reprioritizing. And I think there is obviously an inevitability to this as a consequence of the pandemic. I mean, if you were undertaking a campus upgrade, you might just put that on pause for the moment. And we've absolutely seen that. But what we've really seen as a prioritization has been, how do we get our information to our users, whether the user is a customer or whether the user is an employee? There's examples where there's lots of companies who say they've got like online e-tail, right? But now they've got to do curbside pickup because they've actually got inventory in the stores, but the stores couldn't open. So, what you've seen is a re-prioritization to say, well when we look at inventory management and the supply chain systems, are we factoring in the inventory we have in a store could also be seen as inventory across the stores? And in fact, what we've really got now is a distributed warehouse. We've got inventory in the warehouse like wholesale ready for distribution. And then we've got inventory in a store, retail ready for consumer consumption. What don't want that to be separate inventory. We want that to be holistic. And then how do we enable any consumer anywhere to be able to arrange for curbside pickup, which we didn't use to do because we would come into the store or arrange for mail order. But the inventory may come from you know, I may send something from San Francisco to somebody in Boston because it was in a store inventory in San Francisco. Now, sure, it's got some freight cost, but I've also got some other efficiency savings and I'm reducing my working capital or my inventory expense. So, we've seen prioritization for really how to take advantage of this. I come back to it, this word distributed is very simple in principal, but everything is now working on a new dynamic. So, that's some of the prioritization we've seen. >> You mentioned one of the things that might get put on hold is, wait if I was doing a corporate network update, that might not be the first thing, we absolutely, we've gotten some great data on just the changing traffic patterns of the internet, but the network is so critically important. Everybody from home is dealing with, you know, children doing their Zoom classrooms while we're trying to do video meetings. NTT obviously has a strong network component to what its business is. So, help us understand the services that are important there, what you're working with customers and how has this kind of transformed some of those activities? >> Yeah. Yeah, sure. Thank you. You're so right. I mean and I have to say, I just like to pay my respects to colleagues and fellow workers around the world who are not just working from home, but also homeschooling in parallel. Our kids fled the nest, either they're working for themselves now, so, we don't have the extra activity of homeschooling, but I can really have a lot of respect for colleagues who are trying to do both, it's a real fine art. And we've seen a lot of actually just talking of re-prioritization. We've seen a lot of companies including ourselves, say to our colleagues, look after your children, homeschool them, do everything you can to support your families and then get to your work. So, that re-prioritization just in behavior has been a key change that we've seen a lot of people do. That flexibility to, you know, work is something you do, not somewhere you go. And therefore, as long as the work is done, we can flex around, you know your needs as a family. So, that's one prioritization we've seen active actually. But to your point on the network, it's quite amusing to me that we've been for years now talking about cloud, on-demand subscription services. And actually the one asset that you need to really enable cloud is the network. And it's historically been the least cloud-like that you could possibly imagine because you still need to specify a physical connection. You still need to specify a bandwidth value. You still need to specify, the number of devices you've got to attach to it. I think this is really a monstrous change that we're going to experience and really are experiencing, the network as a service. I mean, we talk about IAS, PAS SAS, but what happened to NAS? I mean, really did we just think that everything was about computer and software? The networker is the underpinner. And so really we see a big change and this is where we've been very busy in the network as a service enabling customers to have, dynamic reallocation of resources on the network so that they can prioritize traffic, prioritize content, prioritize events. A lot of customers and are doing activities such as hosting their own event, their own digital conference. And you want to prioritize what the user experience is when you host one of those events over perhaps back office process that can quite frankly wait a few days. So, we see a significant opportunity. This is where we've been very busy the last few months in really building out much more dynamic network as a service solutions, the cloud network. And I think the whole software defined network agenda has materially accelerated. That's one major area. And then the other area has just been the phenomenal shift to IP voice and software and actually almost the deletion of the phone in its entirety. Everybody using, Teams or Skype or Google Hangouts to really use as their collaboration mechanism. And then, we're providing all the underlying transportation layer, but as IP voices, that creates a much more integrated collaboration experience, and it creates a cost saving cause you're taking away the classic voice services. >> Yeah. So Simon boy, I'm excited for that. I tell you, I remember when I got my first Blackberry and they were trying to sell me some things, I'm like, "Wait, this is an internet endpoint. I can do all of these things there." And of course, you know, it's taken me the last dozen years. If gone a certain far, but, and we always joke. It's like smartphones, we don't use them for phones anymore. We use them for all the messaging and all those services. So, the data and the network are so critically important. Simon, I want to turn to UPGRADE 2020, you know what I'm excited about this, we've talked about the major impacts of what's happened in 2020. And we're looking at the here and now, but it's great in technology when we get to be able to look forward and look at some of the opportunities out there. So, would love to hear from your standpoint, some of the areas, what's exciting you, what's exciting that we can look forward to some of the areas and pockets of research that we see at the event. >> Yeah, I think he's Stu. I think what I like about our event is the investment that we make to work with the scientific community, academia, and really invest in, forward-looking, future-proofing, how physics and different technologies might play a role in the future. And, some of these investments and some of this research yields, commercial products and some of it doesn't, but it's still a very valuable opportunity for us to really look at where technology is going. I think the areas that are particularly appealing to me on a personal level, just the whole thing of Quantum computing. This is, I know we're already exploring the capabilities of Quantum computing in some labs, and some academia centers and really to understanding how can we take advantage of that. But I think if you then say, and you take another area that we're exploring through the event, Biosciences. If you then take the two together and you think, okay, how do we take Quantum computing, and we take Biosciences and you think about healthcare, and then you think about the pandemic, are there things that we can do with simulations and technologies in the future that really would give us greater comprehension and ability to accelerate, understanding, accelerate testing, and then really contribute to the health and welfare of society. And I think that's really quite an exciting area for us. So, that's a specific topic that I'm particularly interested in. I'm glad to see us doing a lot in that space, Quantum computing, as well as the Biosciences. And I'd say one other area where I still think we're all trying to ascertain, how it serves the business is really the area of blockchain. I think this is intriguing. I'm still mentally trying to master the subject. No amount of white papers has managed to overcome the topic in my brain yet. So I'm still working on it. And then I think cryptography, I come back to the same subject security. I mean, we are dependent as citizens, businesses and nations on technology now, and our data is available how we secure it, how we make sure that it's encrypted is absolutely going to be critical. You see an increasing push nationally and globally to ensure that there is security of data. And I think the subject of cryptography, and how we go forward with, beyond 128 bit is going to be a very difficult and critical subject. So these are the areas I'm very impressed with. >> Wonderful. Simon, I want to give you the final word from UPGRADE 2020. >> Yeah. Thanks, Stu Just thanks very much to anybody that's attending. What you'll find through various workshops is lots of insight, from our strategic partners, from research scientists, from academia, from ourselves. So thank you very much for participating. We always value your feedback. So, please tell us what we could do to improve the content, to help you with your businesses. And we look forward and hope that everybody stays safe. Thank you for connecting with us virtually. >> Well, Simon Walsh. Thank you so much. Great having a conversation and glad to have you in our Cube alumni now. >> Thank you very much Stu. Have a good day. >> All right. And stay tuned more coverage from UPGRADE 2020 I'm Stu Miniman, and thanks as always for watching theCUBE. (upbeat music)

(upbeat music) >> Hi, and welcome to theCUBE, the leading source for insights into the world of technology and innovation. I'm your host Donald Klein, and today's topic is the market for autonomous vehicles and the ecosystem suppliers looking to tap into this brave new world of autonomous capabilities in our daily commute. To have this conversation I'm joined by Rudy Burger, managing partner at Woodside Capital. Rudy, welcome to the show. >> Thanks Don, it's great to be here. >> Great, so look, why don't we start off Rudy, why don't you tell us a little bit about Woodside Capital and your role there? >> Great, so I founded Woodside Capital about 20 years ago having started five different companies of my own, one of which I took public. We are a specialist M&A advisor. We work with so-called growth stage often venture-backed companies and help them find buyers that are usually much larger public companies. Our clients are usually US or European companies and we find buyers in the US, Europe, or Asia. >> Excellent, excellent, okay. And why don't you talk a little bit about your kind of specialty areas? >> So I focused my career, and certainly the work at Woodside Capital, on imaging technologies and as an enabling technology, and the products and markets that are enabled by imaging and increasingly computer vision. So nowadays that is autonomous vehicles, consumer technology, security surveillance, and digital health. So enabling technologies, the computer vision is the theme that binds those together. >> Okay, well, the thing that's on everybody's mind these days is autonomous vehicles, when are we going to get them? Very high profile for sure. Before the show we talking about the kind of two key ingredients to making this happen, the AI software which is kind of the brains of the operation and then also the sensors which enable all of the AI. So why don't we talk about the sensor world first, okay? Lot of discussion about there, so sort of does the brave new world of vehicles need lidar? Does it not need lidar? Are there other types of sensors coming along? What's your sense of that market and how it's looking for all of the different players in it? >> So, Don, I look at it from a sort of fairly basic standpoint. Humans have two very capable image sensors and a very powerful processor, and the degree to which the automotive manufacturers and so-called Robo-Taxi developers have decided it's necessary to sprinkle every sensor known to man, and I'm talking lidar, radar, ultrasound, thermal, and of course cameras, is to some extent a degree to which, you know, image sensors are not as good as our eyes today. Now, there are some areas in which we will probably always have technology as a help. For example, humans are not very good at seeing in the dark whereas a thermal technology can do that very well. But my overall belief is that it's never a good idea to bet against an incumbent technology, and in this case I'm talking about so-called CMOS image sensors which are the sensor that goes into pretty much every camera in the world now. It's never a good idea to bet against the incumbent technology being able to scale into a new market. Every time people have done that, they've been wrong. Back in the early days the debate was whether CMOS image sensors would ever be good enough to replace CCDs as the sensor technology, and of course now, you know, everything uses CMOS image sensors. In other markets there was a long period of time in which people were thinking that LCD panels would never be large enough to replace, you know, for television, for example, 50 inch and so forth. It was never going to happen, so we needed plasma TVs, we needed rear-projection TVs. But slowly but surely the incumbent technology, LCDs, expanded to that market. So my belief is that CMOS image sensors will evolve to a point at which they will replace the need for lidar in most applications. >> Interesting, so that's a very controversial statement, right? Because you've certainly seen a lot of emphasis on the development of new generation lidar capability. >> Over 100 lidar companies started over the last three, four years, and of course many of them will not be happy to hear me say that. There are two distinct markets and one is the so-called Robo-Taxi market, and the other is more of the consumer vehicle ADAS market, and I think we need to think about those separately because the economics behind both are very different. If you look at the Robo-Taxi market, those vehicles tend to be much more expensive and are relatively price-insensitive. So if they can improve safety a little bit by putting a lidar on there, you know, great, let's do it, multiple lidars because these vehicles will be in operation 24 by seven, and if each vehicle costs 200,000, $250,000, fine. When we talk about the mass market for automobiles, type of car that you and I might go down and buy, very different thing. And, you know, auto makers sweat the pennies, and so putting a one or $200 lidar in a vehicle, big decision. And to the extent that they can replace the need for that lidar with a much less expensive camera system, that's what they'll do. Bear in mind that Mobileye, which has been the biggest success story, acquired by Intel for $13.5 billion, second largest acquisition Intel ever made, they for the most part still run on one camera, forward-looking camera. That's it, no radar, no lidar, no thermal, one camera. So the clever use of image processing, computer vision, and one image sensor can do a great deal. >> Interesting, okay. Well, so I want to talk about the software in just a second, but just to kind of finish this point, so if you were advising a sensor company that's developing some next gen capabilities, whether lidar or other related technologies, is the point you're making here that there are certain segments of this industry which are going to be more attractive to your technology than others? >> Absolutely, yes. I mean, the first thing to recognize is that the automotive industry has never really been a particularly comfortable fit with the economics and timeline of venture capital. VCs need to invest and recoup and redeploy back to their LPs on an eight-year cycle. But the automotive industry moves quite slowly, perhaps Tesla are excepted, and what the first piece of advice I would give these companies is it's probably going to be three, four, five years before, even if you have the right technology, before that technology really starts generating any significant volume and revenue. So for many venture-backed companies, that's too long. So the first piece of advice is find pockets of revenue, right, beachheads if you will, where you can land your technology and start generating revenue before you get to the automotive market. And many of these lidar companies we just talked about are not going to last long enough to get to the automotive market because not only does the automotive market move slowly but the autonomous vehicle market keeps on getting pushed out to the right as the industry realizes that this is a big, hairy problem. And so I would say, what is it that your technology can do an order of magnitude better than any other technology? Focus on that and find some opportunities for revenue outside the automotive industry that will sustain the company on its way to the holy grail. >> Interesting, yeah, so find that alternative revenue source to get you to base camp, and then when the market's ready, climb that Everest to-- >> I've seen so many companies basically go out of business because they've set their sights on either the automotive market, and it's go for broke. We're not interested in, all these other things are distractions. You know, entrepreneurs don't have a plan B. Or this. We're going to get our technology into a smartphone, that's it. And there are possibly some other opportunities but it takes so long and it's so difficult to get your technology into a smartphone that they go out of business before they ever get to that point. >> Interesting, okay. So good advice for people looking to kind of apply their technology in this kind of a very difficult market, right, very complicated market. All right, well, then let's switch to the other side of it. So we were kind of talking about the key ingredients, right? Sensors but also AI and the software around that, okay, and there are some very big players developing the software. Tesla's had their Autonomy Day where they've showcased their technology. You've obviously got Google with their capabilities developing software. How do you make sense of this overall landscape because we do see a lot of smaller providers also trying to develop software here. >> So the first thing that I find fascinating about the automotive industry is that for the most part there is no software market. There's perhaps one exception of any scale, that's BlackBerry that sells the QNX software. They found a point within the entertainment console where they can license their software. But for all of the development and capital invested into automotive software, nobody is actually generating revenue, making a living, by licensing software. And one of the main reasons for that is that, you know, the automotive market, really since inception, has been a hardware business. This is a business of bending sheet metal, internal combustion engines, and software has really not played that big a role up until relatively recently. So even those companies that do have software technology have ended up selling it into the automotive supply chain as a piece of silicon, embedded on a piece of silicon, not as, you know, here's my software on a USB stick, right? I think that the whole software licensing model hasn't so far fit well, fit comfortably, with the automotive industry. And the other reason is that there's no standard platform. If I were to develop a piece of software, I can, in the PC industry, I can develop for Windows, I can develop for Mac, I can develop for an iPhone. There's no such thing in the automotive industry, and particularly in this new world of autonomous vehicles there is no standard platform. There are many different processors, Nvidia has staked an early claim there. And the reason that most of the companies developing autonomous vehicle technology have developed the so-called full-stack solution, everything from code running on the processor, integrated through the sensors and so forth, is for that reason, there is no standard platform. So each company has developed the whole solution for themselves, and there are many of them around here that have raised hundreds of millions of dollars, some cases billions of dollars, for that purpose. So there is, today, no software market for automotive in the same way that we think about it in other industries. >> Understood, understood. But in terms of the companies that are actually pushing the envelope on these kind of capabilities, right, so we're taking the best of AI, we're applying it to big data sets, and then hopefully being able to extract that to create capabilities for these vehicles, right? What's your sense of how far that's come along in-- >> Well, it's come a long way but, here I'm going to push the boat out a little bit. I don't believe that the so-called deep learning technology, which is the current state of the art for AI, it's the technology that has allowed computers to beat humans at chess, at Go, I don't think that that flavor of AI, that approach to AI, is ever going to get us to safe enough autonomous vehicles. And that's because it works extremely well in fairly well-bounded rules, rule-bounded games or any scenario like that, but can you imagine trying to teach your 16-year-old how to drive by showing them images of every situation that they might encounter, right? Impossible. It's an infinite, it's not a well-bounded set. And that's so difficult because we really haven't developed the technology to allow computers to learn, to have things like common sense, to infer, you know, well, this happened, so this is likely to happen. So I think we are going to need a whole new breakthrough in AI before we get to what is generally considered safe enough vehicles. >> Interesting, well then, maybe if we kind of apply your previous thought about sort of Robo-Taxis as maybe being the segment where you're going to see the most use of these newer sensor technologies. >> Rudy: Near term, yes. >> Exactly, what about maybe, is that sort of the same rules apply there for maybe the AI providers, that they're-- >> I think so and that's why they're all focused on that. I mean, from Uber to Waymo, they've all made the same calculation which is if you're running a fleet of vehicles, and so for example in Uber's case, the driver takes 80% of the fare and only 20% goes back to Uber, but if you can replace the driver with a computer, you can keep that vehicle on the road 24 by seven and you can keep 100% of the revenue. You don't need to pay the computer. So that's the calculus that they're all going through. But I think that many of them are making a fundamental mistake and I predicted recently that I think Uber, my prediction for 2020 is that Uber is going to divest its autonomous vehicle business and get back to the business that it should be focused on. Uber generates about $14 billion a year in gross revenue, so 20% of that, which is the piece that Uber keeps after the drivers take their 80, is what, 2.8 billion. Uber should be able to be an extremely profitable business on 2.8 billion of net revenue, but they're spending a huge chunk of money every year on R&D. Now, I would argue that Hertz and Avis have successful businesses. They're in the service, they're in the transportation business, but they didn't decide that they had to build their own cars in order to be in that business. My view, personal view, is that what Uber should be doing is saying, that's not our business, right? We are the world's best at managing this sort of peer-to-peer network crowdsourced transportation, if you will. And when some company, some Silicon Valley startup, comes out with safe enough technology, great, we'll use it, but we don't have to develop that ourselves. >> Well then, maybe just to play devil's advocate here for a second, what about it's a Robo-Taxi-type technologies being applied in bounded areas within metropolitan areas where the rules-- >> That's where it will start. >> Could be more-- >> I think that's where it will start, but I think part of the problem is that we have, perhaps in part due to all of the media hype around autonomous vehicles, we've been misdirected to thinking about autonomous vehicles as a replacement for the car we drive to work every day and I think that's the wrong way to think about it. I think that autonomous vehicles are going to show up in the market as an extension of public transportation. Right, you know, I get off the train and there's an autonomous vehicle waiting to take me for the last couple of miles to my office. >> And those last couple of miles would be sort of a regulated space. >> Rudy: May well be. >> Where the AI is more than capable of functioning. >> Right, and that, you know, yes. And so it's better to think about autonomous vehicles as not being a revolutionary technology but much more of an evolutionary technology. And in fact, most of these technologies are showing up in so-called ADAS technologies which are designed to make driving your regular car safer, lane assist, keeping you a safe distance. >> Donald: Maybe just explain that word, ADAS, and what that means. >> So ADAS stands for automated driver-assistance systems. So one of the first was cruise control, right, everybody's familiar with cruise control. And so to some extent ADAS is just building on cruise control. In addition to maintaining a constant speed, you can now stay in the lane. In addition to maintaining a constant speed, it will now automatically slow down if you get too close to the car in front. And so you can see ADAS as, you know, collision avoidance and so forth, not full autonomy, still have to have a driver in the driver's seat, but evolving year by year until one year we wake up and, yep, my car will actually drive me all the way from home to work without me intervening. Right, it's going to happen in that way. >> So incremental improvements. >> Incremental improvement. >> To ADAS as opposed to kind of revolution of autonomy. >> An overnight sensation. >> Yeah, right, coming from nowhere. Okay, understood. Well then, let's pivot from that then, okay. So let's talk about the automotive industry as a whole and sort of your thoughts on how this is all going to play out. >> Yeah, so there are some very interesting dynamics playing out in the automotive industry. Firstly, as good news, as a result of all of this money and innovation in the automotive industry, Detroit's actually coming back. I go there once or twice a year and you can feel the economy coming back in Detroit, but it's not going to come back around, you know, bending sheet metal. And the challenge that the automotive companies have is so much of their infrastructure and expertise has been built on construction, building a car, production lines to bend the metal, install the engine, and the internal combustion engine itself. And by complete coincidence, to some extent, we've got this confluence of all of these autonomous technologies and electric vehicles happening at the same time. Electric vehicles are much easier to make than internal combustion engines. Far fewer parts. It's one of the reasons that China has spun up about 20 different electric vehicle companies recently. So I think that long term, my prediction is that the automobile industry will go the same way that the personal computer industry went. When the PC first, you know, it was born by IBM, or Apple in some sense before that. There were dozens of companies producing different PCs and it was very much, they were expensive products, and, you know, relatively unusual. As the industry matured, the supply chains matured, and it became apparent there were really only two companies that were making a lot of money out of the PC industry. The companies that developed the software, operating system, and the companies that developed the processor, and all of the manufacturing went over to, in the PC's case, in Taiwan, right? And I think that exactly the same thing is going to happen with the automotive industry. Tesla today still actually makes cars, but I don't see them long term being in the car business because they're really a technology company. It's the reason I don't think Apple is ever going to get into the car industry. They make fantastic margins selling computer products. The gross margin selling a car, it's miserable. It can be single digits or teens. That would completely tank Apple's blended gross margin. So my prediction for the industry is there will be a few small pockets of very profitable businesses, particularly around the operating system, by which I mean the intelligence or the AI intelligence, and then the processor, whether it's a Qualcomm processor or a Nvidia processor or an Intel processor. And as with the PC industry, most of the profit will go there and most of the manufacturing will end up getting outsourced because that's not the value-add, you know, bending metal and so forth. >> Interesting, well, so in the kind of compute market today, right, we have this notion of sort of cloud-native, right, okay, and that many of the companies that are developing apps as relying on cloud-native infrastructure have a kind of technology lead that's going to be hard for some of the legacy providers to actually catch up on. Now, other people say that that's not necessarily the case and et cetera, right? Can you make the same argument for the electric car market, that some of the electric-natives might have a kind of sustainable advantage here? >> I should've added, today the cloud infrastructure companies, cloud services, SaaS companies, in the PC world, you know, very profitable, and I can see a similar cloud services model developing for the automotive industry. However, other than Tesla, it's very difficult to change the automotive channel to support that. I'll give you one example. Everyone that owns a Tesla is very used to the idea that, sometimes on a daily basis, a new bunch of software, operating system software, is downloaded overnight to your vehicle. You wake up in the morning and some new feature's been turned on, right? Tesla can do that because they bypass the entire dealership channel that has a complete lock on the rest of the industry. So for example, if GM wants to do the same thing as Tesla and do sort of what's called over-the-air, OTA, updates, software updates, they can't do that because their contract with the dealership network states that if there is service to be done on the vehicle, the vehicle has to be brought back to the dealership, and the dealerships consider updating the software on the vehicle as service. So their contract with the dealers actually prevent them from doing something that basic. So it's not just a technology issue. The whole channel and way vehicles get sold is going to have to change. >> Interesting, so that's the advantage that some of the new generation of vehicle manufacturers-- >> I would say that Tesla has a five year lead, technology lead, because they, like Apple, are vertically integrated. They're doing everything from user interface, fit and function, all the way down to the semiconductor. They're developing their own semiconductors now. So they have become a fearsome competitor in the electronic vehicle space because they've been doing it for longer than the other major auto companies. They've figured out a lot of the, you know, tricks and techniques of how to extend mileage and so forth. And so they have a substantial lead in the industry at this point, despite the fact that over the next 12, 18 months, every automotive company is going to be coming out with their own flavor of electronic vehicle. >> So then it's more than just about having electric drivetrains, et cetera, right? It's about the whole suite of capabilities. >> It's a systems engineering challenge. >> Interesting, okay. All right, well Rudy, we're going to have to leave it there, okay, but I think everything you've told us is, it sounds like some good news for some of the Tesla stock holders at the moment. >> I think so. >> Okay, well. (laughs) We'll pass on making an opinion about that, but great conversation, thank you for your insights. Okay, this is Donald Klein, host of theCUBE, here with Rudy Burger, managing partner at Woodside Capital. >> Rudy: Great, thank you, Don. (upbeat music)

(upbeat music) >> Hi, and welcome to theCUBE, the leading source for insights into the world of technology and innovation. I'm your host Donald Klein, and today's topic is the market for autonomous vehicles and the ecosystem suppliers looking to tap into this brave new world of autonomous capabilities in our daily commute. To have this conversation I'm joined by Rudy Burger, managing partner at Woodside Capital. Rudy, welcome to the show. >> Thanks Don, it's great to be here. >> Great, so look, why don't we start off Rudy, why don't you tell us a little bit about Woodside Capital and your role there? >> Great, so I founded Woodside Capital about 20 years ago having started five different companies of my own, one of which I took public. We are a specialist M&A advisor. We work with so-called growth stage often venture-backed companies and help them find buyers that are usually much larger public companies. Our clients are usually US or European companies and we find buyers in the US, Europe, or Asia. >> Excellent, excellent, okay. And why don't you talk a little bit about your kind of specialty areas? >> So I focused my career, and certainly the work at Woodside Capital, on imaging technologies and as an enabling technology, and the products and markets that are enabled by imaging and increasingly computer vision. So nowadays that is autonomous vehicles, consumer technology, security surveillance, and digital health. So enabling technologies, the computer vision is the theme that binds those together. >> Okay, well, the thing that's on everybody's mind these days is autonomous vehicles, when are we going to get them? Very high profile for sure. Before the show we talking about the kind of two key ingredients to making this happen, the AI software which is kind of the brains of the operation and then also the sensors which enable all of the AI. So why don't we talk about the sensor world first, okay? Lot of discussion about there, so sort of does the brave new world of vehicles need lidar? Does it not need lidar? Are there other types of sensors coming along? What's your sense of that market and how it's looking for all of the different players in it? >> So, Don, I look at it from a sort of fairly basic standpoint. Humans have two very capable image sensors and a very powerful processor, and the degree to which the automotive manufacturers and so-called Robo-Taxi developers have decided it's necessary to sprinkle every sensor known to man, and I'm talking lidar, radar, ultrasound, thermal, and of course cameras, is to some extent a degree to which, you know, image sensors are not as good as our eyes today. Now, there are some areas in which we will probably always have technology as a help. For example, humans are not very good at seeing in the dark whereas a thermal technology can do that very well. But my overall belief is that it's never a good idea to bet against an incumbent technology, and in this case I'm talking about so-called CMOS image sensors which are the sensor that goes into pretty much every camera in the world now. It's never a good idea to bet against the incumbent technology being able to scale into a new market. Every time people have done that, they've been wrong. Back in the early days the debate was whether CMOS image sensors would ever be good enough to replace CCDs as the sensor technology, and of course now, you know, everything uses CMOS image sensors. In other markets there was a long period of time in which people were thinking that LCD panels would never be large enough to replace, you know, for television, for example, 50 inch and so forth. It was never going to happen, so we needed plasma TVs, we needed rear-projection TVs. But slowly but surely the incumbent technology, LCDs, expanded to that market. So my belief is that CMOS image sensors will evolve to a point at which they will replace the need for lidar in most applications. >> Interesting, so that's a very controversial statement, right? Because you've certainly seen a lot of emphasis on the development of new generation lidar capability. >> Over 100 lidar companies started over the last three, four years, and of course many of them will not be happy to hear me say that. There are two distinct markets and one is the so-called Robo-Taxi market, and the other is more of the consumer vehicle ADAS market, and I think we need to think about those separately because the economics behind both are very different. If you look at the Robo-Taxi market, those vehicles tend to be much more expensive and are relatively price-insensitive. So if they can improve safety a little bit by putting a lidar on there, you know, great, let's do it, multiple lidars because these vehicles will be in operation 24 by seven, and if each vehicle costs 200,000, $250,000, fine. When we talk about the mass market for automobiles, type of car that you and I might go down and buy, very different thing. And, you know, auto makers sweat the pennies, and so putting a one or $200 lidar in a vehicle, big decision. And to the extent that they can replace the need for that lidar with a much less expensive camera system, that's what they'll do. Bear in mind that Mobileye, which has been the biggest success story, acquired by Intel for $13.5 billion, second largest acquisition Intel ever made, they for the most part still run on one camera, forward-looking camera. That's it, no radar, no lidar, no thermal, one camera. So the clever use of image processing, computer vision, and one image sensor can do a great deal. >> Interesting, okay. Well, so I want to talk about the software in just a second, but just to kind of finish this point, so if you were advising a sensor company that's developing some next gen capabilities, whether lidar or other related technologies, is the point you're making here that there are certain segments of this industry which are going to be more attractive to your technology than others? >> Absolutely, yes. I mean, the first thing to recognize is that the automotive industry has never really been a particularly comfortable fit with the economics and timeline of venture capital. VCs need to invest and recoup and redeploy back to their LPs on an eight-year cycle. But the automotive industry moves quite slowly, perhaps Tesla are excepted, and what the first piece of advice I would give these companies is it's probably going to be three, four, five years before, even if you have the right technology, before that technology really starts generating any significant volume and revenue. So for many venture-backed companies, that's too long. So the first piece of advice is find pockets of revenue, right, beachheads if you will, where you can land your technology and start generating revenue before you get to the automotive market. And many of these lidar companies we just talked about are not going to last long enough to get to the automotive market because not only does the automotive market move slowly but the autonomous vehicle market keeps on getting pushed out to the right as the industry realizes that this is a big, hairy problem. And so I would say, what is it that your technology can do an order of magnitude better than any other technology? Focus on that and find some opportunities for revenue outside the automotive industry that will sustain the company on its way to the holy grail. >> Interesting, yeah, so find that alternative revenue source to get you to base camp, and then when the market's ready, climb that Everest to-- >> I've seen so many companies basically go out of business because they've set their sights on either the automotive market, and it's go for broke. We're not interested in, all these other things are distractions. You know, entrepreneurs don't have a plan B. Or this. We're going to get our technology into a smartphone, that's it. And there are possibly some other opportunities but it takes so long and it's so difficult to get your technology into a smartphone that they go out of business before they ever get to that point. >> Interesting, okay. So good advice for people looking to kind of apply their technology in this kind of a very difficult market, right, very complicated market. All right, well, then let's switch to the other side of it. So we were kind of talking about the key ingredients, right? Sensors but also AI and the software around that, okay, and there are some very big players developing the software. Tesla's had their Autonomy Day where they've showcased their technology. You've obviously got Google with their capabilities developing software. How do you make sense of this overall landscape because we do see a lot of smaller providers also trying to develop software here. >> So the first thing that I find fascinating about the automotive industry is that for the most part there is no software market. There's perhaps one exception of any scale, that's BlackBerry that sells the QNX software. They found a point within the entertainment console where they can license their software. But for all of the development and capital invested into automotive software, nobody is actually generating revenue, making a living, by licensing software. And one of the main reasons for that is that, you know, the automotive market, really since inception, has been a hardware business. This is a business of bending sheet metal, internal combustion engines, and software has really not played that big a role up until relatively recently. So even those companies that do have software technology have ended up selling it into the automotive supply chain as a piece of silicon, embedded on a piece of silicon, not as, you know, here's my software on a USB stick, right? I think that the whole software licensing model hasn't so far fit well, fit comfortably, with the automotive industry. And the other reason is that there's no standard platform. If I were to develop a piece of software, I can, in the PC industry, I can develop for Windows, I can develop for Mac, I can develop for an iPhone. There's no such thing in the automotive industry, and particularly in this new world of autonomous vehicles there is no standard platform. There are many different processors, Nvidia has staked an early claim there. And the reason that most of the companies developing autonomous vehicle technology have developed the so-called full-stack solution, everything from code running on the processor, integrated through the sensors and so forth, is for that reason, there is no standard platform. So each company has developed the whole solution for themselves, and there are many of them around here that have raised hundreds of millions of dollars, some cases billions of dollars, for that purpose. So there is, today, no software market for automotive in the same way that we think about it in other industries. >> Understood, understood. But in terms of the companies that are actually pushing the envelope on these kind of capabilities, right, so we're taking the best of AI, we're applying it to big data sets, and then hopefully being able to extract that to create capabilities for these vehicles, right? What's your sense of how far that's come along in-- >> Well, it's come a long way but, here I'm going to push the boat out a little bit. I don't believe that the so-called deep learning technology, which is the current state of the art for AI, it's the technology that has allowed computers to beat humans at chess, at Go, I don't think that that flavor of AI, that approach to AI, is ever going to get us to safe enough autonomous vehicles. And that's because it works extremely well in fairly well-bounded rules, rule-bounded games or any scenario like that, but can you imagine trying to teach your 16-year-old how to drive by showing them images of every situation that they might encounter, right? Impossible. It's an infinite, it's not a well-bounded set. And that's so difficult because we really haven't developed the technology to allow computers to learn, to have things like common sense, to infer, you know, well, this happened, so this is likely to happen. So I think we are going to need a whole new breakthrough in AI before we get to what is generally considered safe enough vehicles. >> Interesting, well then, maybe if we kind of apply your previous thought about sort of Robo-Taxis as maybe being the segment where you're going to see the most use of these newer sensor technologies. >> Rudy: Near term, yes. >> Exactly, what about maybe, is that sort of the same rules apply there for maybe the AI providers, that they're-- >> I think so and that's why they're all focused on that. I mean, from Uber to Waymo, they've all made the same calculation which is if you're running a fleet of vehicles, and so for example in Uber's case, the driver takes 80% of the fare and only 20% goes back to Uber, but if you can replace the driver with a computer, you can keep that vehicle on the road 24 by seven and you can keep 100% of the revenue. You don't need to pay the computer. So that's the calculus that they're all going through. But I think that many of them are making a fundamental mistake and I predicted recently that I think Uber, my prediction for 2020 is that Uber is going to divest its autonomous vehicle business and get back to the business that it should be focused on. Uber generates about $14 billion a year in gross revenue, so 20% of that, which is the piece that Uber keeps after the drivers take their 80, is what, 2.8 billion. Uber should be able to be an extremely profitable business on 2.8 billion of net revenue, but they're spending a huge chunk of money every year on R&D. Now, I would argue that Hertz and Avis have successful businesses. They're in the service, they're in the transportation business, but they didn't decide that they had to build their own cars in order to be in that business. My view, personal view, is that what Uber should be doing is saying, that's not our business, right? We are the world's best at managing this sort of peer-to-peer network crowdsourced transportation, if you will. And when some company, some Silicon Valley startup, comes out with safe enough technology, great, we'll use it, but we don't have to develop that ourselves. >> Well then, maybe just to play devil's advocate here for a second, what about it's a Robo-Taxi-type technologies being applied in bounded areas within metropolitan areas where the rules-- >> That's where it will start. >> Could be more-- >> I think that's where it will start, but I think part of the problem is that we have, perhaps in part due to all of the media hype around autonomous vehicles, we've been misdirected to thinking about autonomous vehicles as a replacement for the car we drive to work every day and I think that's the wrong way to think about it. I think that autonomous vehicles are going to show up in the market as an extension of public transportation. Right, you know, I get off the train and there's an autonomous vehicle waiting to take me for the last couple of miles to my office. >> And those last couple of miles would be sort of a regulated space. >> Rudy: May well be. >> Where the AI is more than capable of functioning. >> Right, and that, you know, yes. And so it's better to think about autonomous vehicles as not being a revolutionary technology but much more of an evolutionary technology. And in fact, most of these technologies are showing up in so-called ADAS technologies which are designed to make driving your regular car safer, lane assist, keeping you a safe distance. >> Donald: Maybe just explain that word, ADAS, and what that means. >> So ADAS stands for automated driver-assistance systems. So one of the first was cruise control, right, everybody's familiar with cruise control. And so to some extent ADAS is just building on cruise control. In addition to maintaining a constant speed, you can now stay in the lane. In addition to maintaining a constant speed, it will now automatically slow down if you get too close to the car in front. And so you can see ADAS as, you know, collision avoidance and so forth, not full autonomy, still have to have a driver in the driver's seat, but evolving year by year until one year we wake up and, yep, my car will actually drive me all the way from home to work without me intervening. Right, it's going to happen in that way. >> So incremental improvements. >> Incremental improvement. >> To ADAS as opposed to kind of revolution of autonomy. >> An overnight sensation. >> Yeah, right, coming from nowhere. Okay, understood. Well then, let's pivot from that then, okay. So let's talk about the automotive industry as a whole and sort of your thoughts on how this is all going to play out. >> Yeah, so there are some very interesting dynamics playing out in the automotive industry. Firstly, as good news, as a result of all of this money and innovation in the automotive industry, Detroit's actually coming back. I go there once or twice a year and you can feel the economy coming back in Detroit, but it's not going to come back around, you know, bending sheet metal. And the challenge that the automotive companies have is so much of their infrastructure and expertise has been built on construction, building a car, production lines to bend the metal, install the engine, and the internal combustion engine itself. And by complete coincidence, to some extent, we've got this confluence of all of these autonomous technologies and electric vehicles happening at the same time. Electric vehicles are much easier to make than internal combustion engines. Far fewer parts. It's one of the reasons that China has spun up about 20 different electric vehicle companies recently. So I think that long term, my prediction is that the automobile industry will go the same way that the personal computer industry went. When the PC first, you know, it was born by IBM, or Apple in some sense before that. There were dozens of companies producing different PCs and it was very much, they were expensive products, and, you know, relatively unusual. As the industry matured, the supply chains matured, and it became apparent there were really only two companies that were making a lot of money out of the PC industry. The companies that developed the software, operating system, and the companies that developed the processor, and all of the manufacturing went over to, in the PC's case, in Taiwan, right? And I think that exactly the same thing is going to happen with the automotive industry. Tesla today still actually makes cars, but I don't see them long term being in the car business because they're really a technology company. It's the reason I don't think Apple is ever going to get into the car industry. They make fantastic margins selling computer products. The gross margin selling a car, it's miserable. It can be single digits or teens. That would completely tank Apple's blended gross margin. So my prediction for the industry is there will be a few small pockets of very profitable businesses, particularly around the operating system, by which I mean the intelligence or the AI intelligence, and then the processor, whether it's a Qualcomm processor or a Nvidia processor or an Intel processor. And as with the PC industry, most of the profit will go there and most of the manufacturing will end up getting outsourced because that's not the value-add, you know, bending metal and so forth. >> Interesting, well, so in the kind of compute market today, right, we have this notion of sort of cloud-native, right, okay, and that many of the companies that are developing apps as relying on cloud-native infrastructure have a kind of technology lead that's going to be hard for some of the legacy providers to actually catch up on. Now, other people say that that's not necessarily the case and et cetera, right? Can you make the same argument for the electric car market, that some of the electric-natives might have a kind of sustainable advantage here? >> I should've added, today the cloud infrastructure companies, cloud services, SaaS companies, in the PC world, you know, very profitable, and I can see a similar cloud services model developing for the automotive industry. However, other than Tesla, it's very difficult to change the automotive channel to support that. I'll give you one example. Everyone that owns a Tesla is very used to the idea that, sometimes on a daily basis, a new bunch of software, operating system software, is downloaded overnight to your vehicle. You wake up in the morning and some new feature's been turned on, right? Tesla can do that because they bypass the entire dealership channel that has a complete lock on the rest of the industry. So for example, if GM wants to do the same thing as Tesla and do sort of what's called over-the-air, OTA, updates, software updates, they can't do that because their contract with the dealership network states that if there is service to be done on the vehicle, the vehicle has to be brought back to the dealership, and the dealerships consider updating the software on the vehicle as service. So their contract with the dealers actually prevent them from doing something that basic. So it's not just a technology issue. The whole channel and way vehicles get sold is going to have to change. >> Interesting, so that's the advantage that some of the new generation of vehicle manufacturers-- >> I would say that Tesla has a five year lead, technology lead, because they, like Apple, are vertically integrated. They're doing everything from user interface, fit and function, all the way down to the semiconductor. They're developing their own semiconductors now. So they have become a fearsome competitor in the electronic vehicle space because they've been doing it for longer than the other major auto companies. They've figured out a lot of the, you know, tricks and techniques of how to extend mileage and so forth. And so they have a substantial lead in the industry at this point, despite the fact that over the next 12, 18 months, every automotive company is going to be coming out with their own flavor of electronic vehicle. >> So then it's more than just about having electric drivetrains, et cetera, right? It's about the whole suite of capabilities. >> It's a systems engineering challenge. >> Interesting, okay. All right, well Rudy, we're going to have to leave it there, okay, but I think everything you've told us is, it sounds like some good news for some of the Tesla stock holders at the moment. >> I think so. >> Okay, well. (laughs) We'll pass on making an opinion about that, but great conversation, thank you for your insights. Okay, this is Donald Klein, host of theCUBE, here with Rudy Burger, managing partner at Woodside Capital. >> Rudy: Great, thank you, Don. (upbeat music)

>>LA from Las Vegas. It's the cube covering AWS reinvent 2019 brought to you by Amazon web services and along with its ecosystem partners. >>Hello everyone. Welcome back to the cubes. Day three coverage of ADAS reinvent in Las Vegas. It's the cubes coverage. Want to thank Intel for being the headline sponsor for the cube two sets. Without Intel, we wouldn't make it happen. We're here extracting the signal from the noise as usual. Wall-to-wall SiliconANGLE the cube coverage. I'm John Feria with student men and men doing a keynote analysis from Verner Vogel. Stu, you know Vernor's, they always, they always got the disc, the format jazzy kicks it off. You get the partner thing on day two and then they say Verner flask could nerd out on all the good stuff. Uh, containers. Coobernetti's all under the hood stuff. So let's jump in a keynote analysis. What's your take? What's Verner's posture this year? What's the vibe? What's the overall theme of the keynote? >>Well, well, first of all, John, to answer the question that everybody asks when Werner takes the stage, this year's t-shirt was posse. So Verner usually either has a Seattle band or it's usually a Dutch DJ, something like that. So he always delivers it. The geek crowd there. And really after seeing it of sitting through Werner's keynote, I think everybody walks out with AWS certification because architecturally we dig into all these environments. So right. You mentioned they started out with the master class on how Amazon built their hypervisor. Super important. Nitro underneath is the secret sauce. When they bought Annapurna labs, we knew that those chips would be super important going forward. But this is what is going to be the driver for outposts. It is the outpost is the building block for many of the other services announced this week. And absolutely the number one thing I'm hearing in the ecosystems around outpost but far gate and firecracker micro databases and managing containers. >>Um, they had some enterprises up on stage talking about transformation, picking up on the themes that Andy started with his three hour keynote just yesterday. But um, it's a lighter on the news. One of the bigger things out there is we will poke Amazon about how open and transparent they are. About what they're doing. And one of the things they announced was the Amazon builders library. So it's not just getting up on stage and saying, Hey, we've got really smart people and we architected these things and you need to use all of our tools, but Hey, this is how we do things. Reminded me a little bit of a, you know, just echoes of what I heard from get lab, who of course is fully open source, fully transparent, but you know, Amazon making progress. It's Adrian Cockcroft and that team has moved on open source, the container group. >>I had a great interview yesterday with Deepak saying, and Abby fuller, the container group actually has a roadmap up on containers. They're so sharing a lot of deep knowledge and good customers talk about how they're taking advantage, transforming their business. In serverless, I mean, John, coming out of Andy's keynote, I was like, there wasn't a lot of security and there wasn't a lot of serverless. And while serverless has been something that we know is transforming Amazon underneath the covers, we finally got to hear a little bit more about not just Lambda but yes, Lambda, but the rest of it as to how serverless is transforming underneath. >>You know ain't Jessie's got along three hour keynote, 30 announcements, so he has to cut save some minutes there. So for Verner we were expecting to go in a little bit more deeper dive on this transformational architecture. What did you learn about what they're proposing, what they're saying or continuing to say around how enterprises should be reborn in the cloud? Because that's the conversation here and again, we are, the memes that are developing are take the T out of cloud native. It's cloud naive. If you're not doing it right, you're going to be pretty naive. And then reborn in the cloud is the theme. So cloud native, born in the cloud, that's proven. Reborn in the cloud is kind of the theme we're hearing. Did he show anything? Did he talk about what that architecture is for transformation? Right. >>Did actually, it was funny. I'm in a watching the social stream. While things are going on. There was actually a cube alumni that I follow that we've interviewed at this show and he's like, if we've heard one of these journeys to you know, transformation, haven't we heard them all and I said, you know, while the high level message may be similar is I'm going to transfer math transform, I'm going to use data. When you looked at what they were doing, and this is a significant, you know, Vanguard, you know the financial institutions, Dave Volante commenting that you know the big banks, John, we know Goldman Sachs, we know JP Morgan, these banks that they have huge it budgets and very smart staffs there. They years ago would have said, Oh we don't need to use those services. We'll do what ourselves. Well Vanguard talking about how they're transforming rearchitecting my trip services. >>I love your term being reborn cloud native because that is the architecture. Are you cloud native or I used to call it you've kind of cloud native or kinda you know a little bit fo a cloud. Naive is a great term too. So been digging in and it is resonating is to look, transformation is art. This is not trying to move the organizational faster than it will naturally happen is painful. There's skillsets, there's those organizational pieces. There are politics inside the company that can slow you down in the enterprise is not known for speed. The enterprises that will continue to exist going forward better have taken this methodology. They need to be more agile and move. >>Well the thing about the cloud net naive thing that I like and first of all I agree with reborn in the cloud. We coined the term in the queue but um, that's kinda got this born again kind of vibe to it, which I think is what they're trying to say. But the cloud naive is, is some of the conversations we're hearing in the community and the customer base of these clouds, which is there are, and Jesse said it is Kino. There are now two types of developers and customers, the ones that want the low level building blocks and ones who want a more custom or solution oriented packages. So if you look at Microsoft Azure and Oracle of the clouds, they're trying to appeal to the folks that are classic it. Some are saying that that's a naive approach because it's a false sense of cloud, false sense of security. >>They got a little cloud. Is it really true? Cloud is, it's really true. Cloud native. So it's an interesting confluence between what true cloud is from a cloud native standpoint and yet all the big success stories are transformations not transitions. And so to me, I'm watching this it market, which is going to have trillions of dollars in, are they just transitioning? I old it with a new coat of paint or is it truly a skill, a truly an architectural transformation and does it impact the business model? That to me is the question. What's your reaction to that? >>Yeah, so John, I think actually the best example of that cloud native architecture is the thing we're actually all talking about this week, but is misunderstood. AWS outpost was announced last year. It is GA with the AWS native services this year. First, the VMware version is going to come out early in 2020 but here's why I think it is super exciting but misunderstood. When Microsoft did Azure stack, they said, we're going to give you an availability zone basically in your data center. It wasn't giving you, it was trying to extend the operational model, but it was a different stack. It was different hardware. They had to put these things together and really it's been a failure. The architectural design point of outpost is different. It is the same stack. It is an extension of your availability zone, so don't think of it of I've got the cloud in my data center. >>It's no, no, no. What I need for low latency and locality, it's here, but starting off there is no S3 in it because we were like, wait, what do you mean there's no S3 in it? I want to do all these services and everything. Oh yeah. Your S three bucket is in your local AC, so why would you say it's sharing? If you are creating data and doing data, of course I want it in my S three bucket. You know that, that that makes that no, they're going to add us three next year, but they are going to be very careful about what surfaces do and don't go on. This is not, Oh Amazon announces lots of things. Of course it's on outpost. It has the security, it has the operational model. It fits into the whole framework. It can be disconnected song, but it is very different. >>I actually think it's a little bit of a disservice. You can actually go see the rack. I took a selfie with it and put it out on Twitter and it's cool gear. We all love to, you know, see the rack and see the cables and things like that. But you know, my recommendation to Amazon would be just put a black curtain around it because pay no attention to what's here. Amazon manages it for you and yes, it's Amazon gear with the nitro chip underneath there. So customers should not have to think about it. It's just when they're doing that architecture, which from an application standpoint, it's a hybrid architecture. John, some services stay more local because of latency, but others it's that transformation. And it's moving the cloud, the edge, my data center things are much more mobile. Can you to change and move over? >>Well this spring you mentioned hybrid. I think to me the outpost announcement in terms of unpacking that is all about validation of hybrid. You know, VMware's got a smile on their face. Sanjay Poonen came in because you know Gelson you're kind of was pitching hybrid, you know, we were challenging him and then, but truly this means cloud operations has come. This is now very clear. There's no debate and this is what multi-cloud ultimately will look like. But hybrid cloud and public cloud is now the architecture of the of it. There's no debate because outpost is absolute verification that the cloud operating model with the cloud as a center of gravity for all the reasons scale, lower costs management, but moving the cloud operations on premises or the edge proves hybrid is here to stay. And that's where the money is. >>So John, there's a small nuance I'll say there because hybrid, we often think of public and private as equal. The Amazon positioning is it's outpost. It's an extension of what we're doing. The public cloud is the main piece, the edge and the outposts are just extensions where we're reaching out as opposed to if I look at, you know what VMware's doing, I've got my data center footprint. You look at the HCI solution out there. Outpost is not an HCI competitor and people looking at this misunderstand the fundamental architecture in there. Absolutely. Hybrid is real. Edge is important. Amazon is extending their reach, but all I'm saying is that nuance is still, Amazon has matured their thinking on hybrid or even multi-cloud. When you talk to Andy, he actually would talk about multi-cloud, but still at the center of gravity is the public cloud and the Amazon services. It's not saying that, Oh yeah, like you know, let's wrap arounds around all of your existing, >>well, the reason why I liked the cloud naive, take the T out of cloud native and cloud naive is because there is a lot of negativity around what cloud actually is about. I forget outpost cloud itself, and if you look at like Microsoft for instance, love Microsoft, I think they do an amazing work. They're catching up as fast as they can, but, and they play the car. Well we are large scale too, but the difference between Amazon and Microsoft Azure is very clear. Microsoft's had these data centers for MSN, I. E. browsers, global infrastructure around the world for themselves and literally overnight they have to serve other people. And if you look at Gardner's results, their downtime has been pretty much at an all time high. So what you're seeing is the inefficiencies and the district is a scale for Microsoft trying to copy Amazon because they now have to serve millions of customers anywhere. This is what Jessie was telling me in my one-on-one, which is there's no compression algorithm for experience. What he's basically saying is when you try to take shortcuts, there's diseconomies of scale. Amazon's got years of economies of scale, they're launching new services. So Jesse's bet is to make the capabilities. The problem is Microsoft Salesforce do is out there and Amos can't compete with, they're not present and they're going into their customers think we got you covered. And frankly that's working like real well. >>Yeah. So, so, so John, we had the cube at Microsoft ignite. I've done that show for the last few years. And my takeaway at Microsoft this year was they build bridges. If you are, you know, mostly legacy, you know, everything in my data center versus cloud native, I'm going to build your bridge. They have five different developer groups to work with you where you are and they'll go there. Amazon is a little bit more aggressive with cloud native transformation, you know, you need to change your mindset. So Microsoft's a little bit more moderate and it is safer for companies to just say, well, I trust Microsoft and I've worked with Microsoft and I've got an enterprise license agreement, so I'll slowly make change. But here's the challenge, Don. We know if you really want to change your business, you can't get there incrementally. Transformation's important for innovation. So the battle is amazing. You can't be wrong for betting on either Microsoft or Amazon these days. Architecturally, I think Amazon has clear the broadest and deepest out there. They keep proving some of their environments and it has, >>well the economies of scale versus diseconomies scale discussion is huge because ultimately if Microsoft stays on that path of just, you know, we got a two and they continue down that path, they could be on the wrong side of the history. And I'll tell you why I see that and why I'm evaluating Microsoft one, they have the data center. So can they reach tool fast enough? Can they, can they eliminate that technical debt because ultimately they're, they're making a bet. And the true bet is if they become just an it transition, they in my opinion, will, will lose in the long run. Microsoft's going all in on, Nope, we're not the old guard. We're the new guard. So there's an interesting line being formed too. And if Microsoft doesn't get cloud native and doesn't bring true scale, true reliability at the capabilities of Amazon, then they're just going to be just another it solution. And they could, that could fall right on there, right on their face on that. >>And John, when we first came to this show in 2013 it was very developer centric and could Amazon be successful in wooing the enterprise? You look around this show, the answer was a resounding yes. Amazon is there. They have not lost the developers. They're doing the enterprise. When you talk to Andy, you talked about the bottoms up and the top down leadership and working there and across the board as opposed to Google. Google has been trying and not making great progress moving to the enterprise and that has been challenging. >>Oh, I've got to tell you this too. Last night I was out and I got some really good information on jet eye and I was networking around and kind of going in Cognito mode and doing the normal and I found someone who was sharing some really critical information around Jedi. Here's what I learned around this is around Microsoft, Microsoft, one that Jed ideal without the capabilities to deliver on the contract. This was a direct quote from someone inside the DOD and inside the intelligence community who I got some clear information and I said to him, I go, how's that possible? He says, Microsoft one on the fact that they say they could do it. They have not yet proven any capabilities for Jedi. And he even said quote, they don't even have the data centers to support the deal. So here you have the dynamic we save, we can do it. Amazon is doing it. This is ultimately the true test of cloud naive versus cloud native. Ask the clouds, show me the proof, John, you could do it and I'll go with, >>you've done great reporting on the jet. I, it has been a bit of a train wreck to watch what's going on in the industry with that because we know, uh, Microsoft needs to get a certain certification. They've got less than a year. The clock is ticking to be able to support some of those environments. Amazon could support that today. So we knew when this started, this was Amazon's business and that there was the executive office going in and basically making sure that Amazon did not win it. So we said there's a lot of business out there. We know Amazon doing well, and the government deals Gelsinger was on record from VMware talking about lots of, >>well here's, here's, here's the thing. I also talked to someone inside the CIA community who will tell me that the spending in the CIA is flat. Okay. And the, the flatness of the, of the spending is flat, but the demand for mission support is going exponential. So the cloud fits that bill. On the Jedi side, what we're hearing is the DOD folks love this architecture. It was not jury rig for Amazon's jury rig for the workload, so that they're all worried that it's going to get scuttled and they don't want that project to fail. There's huge support and I think the Jedi supports the workload transformational thinking because it's completely different. And that's why everyone was running scared because the old guard was getting, getting crushed by it. But no one wants that deal to fail. They want it to go forward. So it's gonna be very interesting dynamics do if Microsoft can't deliver the goods, Amazon's back in the driver's seat >>deal. And John, I guess you know my final takeaway, we talked a bunch about outpost but that is a building block, 80 West local zones starting first in LA for the telco media group, AWS wavelength working with the five G providers. We had Verizon on the program here. Amazon is becoming the everywhere cloud and they really, as Dave said in your opening keynote there, shock and awe, Amazon delivers mere after a year >>maybe this logo should be everything everywhere cause they've got a lot of capabilities that you said the everything cloud, they've got everything in the store do great stuff. Great on the keynote from Verner Vogel's again, more technology. I'm super excited around the momentum around Coobernetti's you know we love that they think cloud native is going to be absolutely legit and continue to be on a tear in 2020 and beyond. I think the five G wavelength is going to change the network constructs because that's going to introduce new levels of kinds of policy. Managing data and compute at the edge will create new opportunities at the networking layer, which for us, you know, we love that. So I think the IOT edge is going to be a super, super valuable. We even had Blackberry on their, their car group talking about the software inside the car. I mean that's a moving mobile device of, of of industrial strength is industrial IOT. So industrial IOT, IOT, edge outpost, hybrid dude, we called this what year? Yeah, we call that 2013. >>And John, it's great to help our audience get a little bit more cloud native on their education and uh, you know, make sure that we're not as naive anymore. >>Still you're not naive. You're certainly cloud native, born in the clouds do, it's us born here. Our seventh year here at Amazon web services. Want to thank Intel for being our headline sponsor. Without Intel support, we would not have the two stages and bringing all the wall to wall coverage. Thanks for supporting our mission. Intel. We really appreciate it. Give them a shout out. We've got Andy Jassy coming on for exclusive at three o'clock day three stay with us for more coverage. Live in Vegas for reinvent 2019 be right back.

>> Live, from Washington DC it's the Cube. Covering AWS Public-Sector Summit. Brought to you by Amazon Web Services. >> Welcome back everyone to AWS public sector here in Washington DC, the Cube's live coverage, two-day coverage, I'm your host, Rebecca Knight. Co-hosting alongside John Ferrier, and we are welcoming back to the Cube, 13 time Cube alum, Sanjay Poonen in the COO of VM-Ware. Thank you so much for coming back on the show >> VIP status, by the way. >> Yes, absolutely. >> Thank you, Rebecca. >> That's definitely VIP status. >> Yes we have a red carpet rolled out >> Delighted to be here. I've lost track of the number of times, but when you're having fun it's good. >> Exactly, so tell us a little bit about what is VM-ware's role here in the public sector, what are you doing here at this conference? >> VM-ware and AWS announced a partnership in October 2016, and it really was the coming together of the best in the public cloud, with the best in the private cloud for what we describe as the hybrid cloud opportunity. And the past two and a half years, coming up on three years pretty soon, has been incredibly exciting. We started off with some of the key industries that we felt, for us, the public sector is among our top three industries. But financial services, telco, public sector, healthcare, manufacturing, all the key industries, technology, we're looking for ways by which they could take their applications into the cloud without having to re-factor and re-platform those applications. That's a big deal because it's wasted of work, if you can lift and shift and then innovate. And that's the value we brought to the public sector and some of our earliest customers, were customers in the public sector like MIT, schools, most of the regulated industries. In the on premise world, we're very strong in almost every, civilian, military, the legislative advance, the judicial advance, the federal agency, all of them use us. Millions and millions of work loads. The question really is how is they think about modernization can they get the best manifesto of the public cloud while leveraging their VM footprint >> So some would say that modernization may not include the original VM-ware vision because a lot of the governments are tryna replace and equated old systems like coldblow, mainframes, whatever, but you guys have been around dominated the operating side of IT for a while so you're kind of seeing the first wave of virtualization, the first wave of modernization but there's some cloud native people they might see that as like "Whoa, is that old school?" So what is particular perspective on that innovation dynamic? Because a lot of the public sector investors are awakening now going "Oh my god, I can move fast with Cloud" So Cloud is bringing on a new set of disruptors in IT, you guys have already been there on the first wave of disruption, so how do balance that kind of presence, >> Yeah >> But also disruption, you might be viewed that way, I'm not sure. >> Yeah, I would say, actually, that the first wave of our free reign modernization started with this device before Cloud. Okay, in 2007 when the iPhone came out there was a significant move by big parts of the public sector to move away from blackberry, which is kind of what they use for the decade prior to that. And when we brought AirWatch, we began to see some of the earliest industries that were adopting the public sector. Many of the agencies started to look at us now, so we actually began our journey into this modernization discussion in the workplace transformation, part of the discussion before we got to Cloud. So we were prepared for some of what that looked like, for example, census 2020 that entire for all the workers something is being done with mobile devices now as opposed to paper or surveys that were done maybe 10, 20 years ago, and all powered and secured by Workspace ONE. Now, when it got to Cloud we were prepared for that because, you know, we knew a little bit of what that meant and mobile and Cloud were some of the two top discussion items that people were talking about as modernization at first under the banner of digital transformation. We had to begin to showcase to a customer that moving an application, now we're talking clients server three tier architectures as opposed to a cobalt mainframe that's really where we have but the bulk of the 886 architecture that's from virtualized VM-ware if you could take them now to the cloud and then use some of the services that these guys are building whether it's data based, whether it's artificially intelligence, machine learning, if you waste all your time in re-platforming and re-marketing an application it's that much less time you have to do some of those innovative things. And the lift and shift process once we had this sort of highway into the Cloud, so to speak, which is what VM-ware Cloud and AWS does, it became so apparent, so we are that process, we had to then work what we can talk about Fred RAM certification all of these things that I'm (inaudible) >> In AirWatch was really a critical acquisition, turns out a boom for you guys with public sector. >> Oh yeah. >> You guys had the iPhone was a driver not so much the blocking and tackling of virtualizing data centers and IT, which you had a presence in, but it was the mobility piece. >> Well since 1998, 99, since the company was founded, the public sector business of VM-ware has been very important, I mean I would say, like I said it's the top three and so, we have tremendous amount of relationships some of our biggest deals. Eight figures plus deals where done with some of the biggest and many of our partners here. >> So it's a large business. >> Large business. >> Did you break that in the numbers? >> We did but we have always said it so a top three, we have always talked about in our earnings calls, some big, large customer examples like US Army, and then , which is also a sort of representative of this community here. Safe, local education. All the universities are using us. So the footprint of VW-ware premise was well documented, well understood, lots of spent going on there. What we didn't have an access to, we had some virtual desktops, VDIs. This mobile aperture gave us a whole new banner of spending. But then the Cloud aperture is kind of taking this to a whole new level. And quite frankly if you look at the commercial sector, the overall IT spent in the world is about one trillion we track and about 150 to 200 billion of that, 15 to 20 % is being spent on the Cloud. And the public sector, governs sector is starting to track that, they are probably a little bit lagging in certain areas to commercial. But that 15 to 20 % is only going to get 30 or 40 % in the next five years. VM-ware has been one the top infrastructure companies, we are looking at our move, a bigger part of the wall of share that we gain as people move their investment to the Cloud. >> When you are thinking about the different clients and customers that you're working with, the Sled groups and then the corporate customers, what-how different are they and how, what's on the public sector's mind versus your corporate clients? And how do you manage the relationships differently? >> Yeah, we have sort of segment them at VM-ware and many companies have done the same thing into three pockets. One is who we describe as the federal public sector customers that are civilian, military and we mirror that in almost every country so Theresa here, for example, runs AWS and we have a similar type of work structure to hear in each of the key regions. The second big segment is healthcare, many of the healthcare organizations are regulated there's similar characteristics and the third is SLED, state local education. And those three pockets are very similar patterns in the way in which they buy, their CIOs are similar and they also have often very similar security requirements. So the highest maybe something like a FED and FedRAMP and we some specialized needs that they have for certain certifications on the device or certifications on the Cloud and we have to comply with all of those. But then as you get to the ones that are in the state local maybe they don't as many and higher certifications but what it's helped is to basically work with partners with a very similar across this, and the proposition on the initial transformation is really modernization of either the data center and their applications or modernization of the device. And VM-ware is very uniquely provisioned to help on both those fronts. >> And security is really top of mind >> Absolutely >> I mean we've heard on the main stage and we know how big a threat these cyber threats face. These Cyber threats pose. >> Absolutely, and if you think about aspects of security. Security has multiple aspects of where you can think of them as control points. The network, the end-point, the cloud, identity and lots of event management that is collected. These are the five biggest markets of security. In each of those areas VM-ware is starting to play more. For example, network, you know, five, six years ago people didn't think of VM-ware in that area but with NSX our leading software define networking area, we have become the lead on that segment and about half of our use cases are security related for a use case called micro-segmentation. So the government can basically segment out a set of their apps and through software, think of these as on-off switches almost like light switches only allow certain apps to access certain parts of the data center. That's very easily done through NSX. Workspace ONE, the endpoint can now be extremely secure and provide all the levels of security that Blackware provided in their proprietary devices but now on any device. So we've been systematically looking at each of these areas I would estimate about 15 to 20 % of VM-ware revenue is security related use cases and public sector this is a very, very key place where we get grilled on and we have to satisfy their level of requirements for security. >> Sanjay, what are you doing here? I know you said you are speaking at a panel, Fireside chat, what's your agenda of the week? What's the story? What some of the key talking points for VM-ware? >> VM-ware is one of the top sponsors here, I don't know whatever is global or platinum or whatever the highest level is, you will see our name's there. And largely what we did when we announced this partnership was, you know, Andy and I were classmates at school. We wanted to build a very close partnership at their big events, so you will see us at all the major summits. VM-ware is a top sponsor, and you'll see them also at >> Doubling down on the relationships. >> Yep, we're doubling down. And they're doing the same at VM-world, so we said "Listen" and I think I talked about this in one of your previous shows. If you can mingle, VM-ware has collectively about 100,000 people that come to all the VM-ware events across the world and maybe about half a million to people who watch those events online. Amazon has probably twice that number. But if we can mingle each other audiences because they are coming off into both shows and we, the best showing up at AWS summits and we'll give them lots of access to VM-world. >> Ups* >> (laughs) There we go. >> Operations >> Hey, that's got a ring to it. I like it >> That's exactly the vision. So we, first of all, VM-ware is a big presence and the acquisition we've done, also, like Cloud helped also has a big presence, so that's one. Number two, we try as often as possible to have either a key note or some kind of Provence, I've had a good friendship with Theresa. She invited me to speak, I think there's an event with their top five hundred customers, sort of a key note inside that. And I do that a little later this afternoon. And it's also a tremendous opportunity, I think they have 13 or 15,000 attendees here to meet some of our top customers, so those are the three things that I'm doing over the course of the next day and a half. >> You got the CIA deal 2013, what that has done, in gestation period since then, a lot of other folks in the DC circuit here, public sector, government, agencies, they are all going "Hmm, Amazon has got the right formula" so Theresa put the formula together, people are adopting it, you guys do the strategic deal with AWS with your AA gown on, as a student of the game if you will in tech, Sanjay, which you are, knowing what you know now at VM-ware what's your perspective on this? Because you got a big tail wind with Cloud, you get clarity in what you guys do, in what AWS does, you also have multi Cloud with other Clouds, I mean you got NSX with a nice product, you got multi Cloud built-in hybrid, I mean, pretty good at spot for VM-ware for public sector. What's your perspective on this? >> Yeah, two parts to your question. First off, tremendous respect for Andy. I was describing before I go out on the show with both of you, when we were in school, I wouldn't have put him, in 1987 when we graduated, as the person who would of been the pied piper of this public Cloud revolution. But kudos to him, Theresa a fantastic executive and I think that, you know, 2013 CIA deal put them on an incredible place to be, a front runner in this and many other deals they've done similarly. VM-ware, we saw over the last, you know, 3, 4, 5 years is a significant rise of Amazon in our accounts. Customers were asking us "Why can't we get the best of both worlds? Why does it have to be on premise runs and VM-ware and public lines and I've got to portent and refactor and re platform my applications?" So our customers drove a us together and what we've sort to do in our relationship with Amazon is we meet on a quarterly basis, we review feature and function, product road map, we're aggressive, with our sales teams are trying to pursue opportunities together. And that's really helped us, you know, that's part of the reason I'm here, so, the more that we can do together to satisfy customers, customers like seeing big partners come together, even if, it feels a little bit like Berlin wall moment, right? You remember 1987? You had the US and Soviet Union and people were surprised by that. I that that the general consensus was complete surprise in 2016 when we announced the project with Amazon. But with every move we made like for instance, recently we announced the FedRAM status, one of our biggest 8 figure deals we had announced in our queue for was with a major customer that's in this segment, actually. Our public sector SLED and the more that we can do this, I think there's a lot of future ahead of us. >> Berlin is interesting, you know, tearing down that wall that was a moment that came down and the government, the theme that we are hearing over and over again is red tape. Lag with data it hurts application work loads so fast data, make it available, cut the read tape out of procurement, I mean, basically, 1980s, 1990s, procurement rules don't apply to how people consume and deploy technology today. >> Yeah, absolutely. >> Tear down that red tape. >> I think you got that right. I think the governments mandate to go Cloud first in the, you know, last several administrations was absolutely key and certain elementary work loads like websites, I mean why, so if it's a public website that's holding public information, I mean, of course, you've got to worry about security but the data public anyway. Okay, so, what's going to get hacked? I mean, why don't you move all websites that are web content, so some of those early work loads are moved over very easy. I would call it so, the 1-O-1 of posting. Why would you want to have server just to host a website? But once that's done the more mission critical applications, Windows work loads, Oracle's sequel service databases, Virtual desktops, now you are starting to see and I think eventually some of the more mission critical apps like SAP or Oracle apps, I think you see them also now with a lot of customers in both public sectors and commercial- >> Military DOD tactical edges, >> Absolutely. >> The military lives are on the line, it's not a video game, lag actually will kill people. So you want to have that application peaked. >> Exactly. >> With the right architect >> One of the things that are so inspiring about being here at the public sector summit is that we are seeing all these used cases, of using the Cloud for good to solve pressing environmental challenges, health challenges, social challenges, what are you seeing, what is VM-ware working on that is, that is particularly inspiring to you? >> I am glad you asked that Rebecca. I would say that's one the things and Amazon shares a similar value where we think that, you know, technology companies have to think beyond themselves and be a force for good. I think that one of the first times at any major conference, last year we had the Nobel Peace Prize winner who's changed the world, Malala, come and speak and I think everyone who comes to major tech conferences, and we had one of the biggest conferences, was, I mean, we had grown big men, 6 foot tall crying at the end of that. And we had a number of customers that we loved to be able to talk about there stories, Make A wish is an example of an organization that, you know, if someone's with a terminal disease and they want to have some wish that they could wish for, all the infrastructure runs in VM-ware and we can help them serve that audience better, we have a number of charitable organization, Red Cross was on (unintelligible), so we, a big part of pad mind the attire of companies, kind of charter in our EPICC values has been people of integrity, people of work with the customers and the community. Our values EPICC stands for execution, passion, integrity customer and community. And that last C I think is very important, cause, you know, we live in a world and the more important thing is not necessarily how much money you make but what a force you can be for changing people's life. That lasts forever. You can't take your money into the grave but the more you can have on people, impact on people's lives, I mean, John, I am delighted to see your daughter. >> Yeah. >> I mean that generation continues >> Well, it's community right? >> And you're passing on those values onto the next generation or helping people that's the bigger story of life and that gets us equally excited as innovation. >> Communities can now be instrumented via digital technologies, so your faster time to find truth, people who have communities were very active, the data is there, it's all in the data and so you can see the impact >> You know, I think that's absolutely key. So John, I would agree with you and I think you as, you know, you talk to companies that's an important question to ask them. Because we are all in this together. There is no whether it's competitors or what's not, we can all serve the greater community, here for good and make this world a better place, you know there is a lot of what we do that helps the world run better, that's good, infrastructure helps us run better, but helping the world be a better place, it takes both individual and collective will. >> Well one of the talent gaps is not just computer programming and tech people it's architects for the new society that needs help and these key policy questions like governance and responsibilities, you're seeing YouTube and Facebook and our neck of the woods responsible for all this impact and they don't really kind of, there's no oversight. (laughs) >> Well, listen I'm not going to get into the public debate about, you know, privacy and governance and so on. I would say that one thing that, you know, we're also really excited to kind of give back to the community in terms of education. One of the things that is very powerful to VM-ware is our user groups. We call them V-mugs, VM-ware user groups and there's collectively about 150, 200000 of them and it's amazing when you spend time with them, they are really, really, they are members of the community really because they're customers and partners and they dedicate their time to educating others and the more that we can use online forums, I love the way in which you're using your online platform with the AI and other techniques. I think artificial intelligence becomes the ground equalizer, give access to everybody. >> Access to the voice is access to the data but right now as you pointed out we need a society that's going to have shared values and I think that's like where the good is coming from and it's easy to get on the bad tech band wagon which everyone is on right now but there are examples of tech for good, you mentioned- >> But when you say shared values, is that you, I mean is that possible? >> Well, I think there is, there is an awakening going on now from Silicon Valley where I live and here in DC which it's, it's in my face here because people as tech savvy here as they are in say Silicon Valley, no offense, but those people aren't as tech savvy here as they are in Silicon Valley, they don't go deep on the impact of tech but they see the results of bad tech. So I don't see a lot of a vandalizing going on outside of certain areas around tech for good. So I think there's a lot of great examples, human trafficking, you're seeing tech for hiring, new generations onboard training, skills gap, so efficiencies in healthcare, there is so many areas that tech could be used for good and if people were educated on focusing on that and not the bad, I mean bad's got to eradicated, certainly, I'm not for bad things but maybe there's a lot more good, the good pile is much bigger than the bad pile in tech, so, when I say shared values is recognition of that which is let's get on the same page, there's bad and there's good, have that debate and then apply the tech. >> Yeah, interesting. It's a galvanizing force. >> Well, it's just like any invention whether it's the printing press or the use of fire, I mean, there is good use of it and there's bad use of it. And we got to to find ways by which technology while this debate is going on as to as some of these social media platforms, my fundamental belief is that technology is going to transform society, the reason I came to the United States as an immigrant was to study computer science and I felt like the United States had, you know, when I came to this college I hade never heard of called Dartmouth College in Haven New Hampshire, was very fortunate to have a scholarship to go there but that's because I wanted to study computer science and I felt like computer science could change a lot of the way at which, you know, at that time, I was just trying to program and learn how to, you know, create algorithms but if you look at what transformed every aspect whether it's the mobile device which is really a computer in your pocket or Cloud computing which is kind of bringing the super computer into the Cloud. >> (inaudible) >> I think it's tremendous what we can do and we have to constantly find ways by which artificial intelligence and these forces of, you know, the next part of general mobile, Cloud computing can be used for greater good. >> Did you go to scholarship on full bode with basketball? (all laugh) >> Man, we got the Warriors with two ball games. >> So you are a big Warriors and for the folks that don't know Sanjay, we always used to talk about every time Warriors looking good to stay alive but not looking good >> So sad to see. I mean it's sort of, the last game I was watching last night, it was, it was sad, it was, of course, it was a win but also a loss to see KD go down that way was just absolutely tearful, yeah, but, you know, we have one more game. >> It's going to be hard >> It's going to be hard to, you know, kind of beat the crowd and the crowd is really loud at Oracle and get one more game and then, yeah, I think it'll get to game 7, we'll what happens but it's just great to their heart. >> I'm from Boston so I'm kind of over Golden state but I am sure everyone is over Boston and our red socks and our throw-ins and our pads >> Duck tour has only been 15 months? >> I know exactly! Exactly! We're still- >> There will be a Celtic warriors game >> That would have been so good >> That would have been so good like the Lakers (inaudible) >> It was more recent than that. It was the pads victory, so yeah >> Okay >> Yeah, anyway. Just saying, just saying. Sanjay, thank you so much for coming back on The cube, we look forward to your 14th visit on the show. >> Thank you, Rebecca. Thank you, John. >> I'm Rebecca Knight for John Ferrier, stay tuned for more AWS public sector summit here in Washington DC. (Upbeat Music)

>> Everyone, welcome to this special CUBE conversation. We are here in the Palo Alto studios of theCUBE. I'm John Furrier, your host here with Rehan Jalil, former president and CEO of Elastica, here to talk about the People First network and his approach and experiences and his entrepreneurial journey. Rehan thanks for joining us. >> Thank you so much. Thanks for inviting. >> So we were talking before we came on. You have a great entrepreneurial journey. It's a great podcast up on the Mayfield.com website. Really a good story about what you've done. But you had a lot of different kind of experiences through your progression journey in entrepreneurship. You had some failures and some successes. And certainly now with cloud security hot, I'm sure you're probably go into another one. But what it's like right now for you? You just left Semantic. You're kind of out on your own. Are you clipping coupons? Going to go to the beach and hang out? Are you working on a new startup? What's happening? >> I think there's a lot to do. Frankly for me it's very important to actually understand some new problems that needs to be solved. Especially there's so much changing with AI and all the intrusions are you're seeing and breaches that are going on. There are new problems to solve and that's where my head is. I'm not going to take too much of a break. I'm going to get going. >> Yeah you seem to get it going. And that's, most entrepreneurs do that. Let's talk about some of the experience you have. And one of the things we were talking about, before I got my cameras out, back in the old days when before internet, broadband wireless was hot, you get a startup around Wimax, which was early days of broadband wireless. And then you had some failures that successes but didn't work out. Then you had another wireless startup that was successful that became part of that 4G movement. This is an example of being correct in the thesis but you picked the wrong door to go through. Talk about that journey because I think that time in history, this was around 2001, 2002, 2003 timeframe. This was the internet was growing. Wireless, we didn't have the phones we have now. Obviously it's smartphone in 2007 years later. This was pre-mobile boom. This was the beginning of the shift to broadband, true broadband. Now we see it everywhere: LTE, 5G's around the corner. This was a pivotal moment, but for you, you were as an entrepreneur, you had the right decision, broadband wireless, but it was shifting. Feels like cloud today but I want to get in touch here. What did you learn? >> I think they were two very different companies. The mission of the first company which I joined as an employee, the first company, which was to take the high speed internet to the masses. In US and some developed world, they were DSL and cable kind of first coming up, but that infrastructure did not exist in the rest of the world, and the mission was that if we could take same level of high speed connectivity and enable it for the rest of the world, it'd be really cool. And this is back in the day. So thesis was right and hence I joined that company. And it was a lot of fun. I learned a lot. But I think one thing you have to realize, even in those times, to do such a massive project and to go against some massive incumbents which exist in those ecosystems, the differentiation has to be extremely high. And to create differentiation on the radio side of things is just very difficult. And I think so, and of course at that time, the economy took a bad turn and that company didn't have some significant big outcome. From that learning I evolved a thesis that this technology needs to go mobile and this is again pre-iPhone times. It was Blackberry times. So if you were to go talk to investor and say look the world is going to look like when we will have internet in our pocket, the people would smile at you. It's like what are you talking about? So even raising money for that was not easy and that was my first company that I started myself called WiChorus. And these there was what if you could have DSL-type connectivity and literally all internet's power in your pocket. But the learnings from that first company were that if you go try to do that in straight in the wireless side of things in a telco environment, the competition is going to be significantly high. >> The scale, the presence, the market power they have. >> And the purchasing side. Most important is the purchasing cycles. People take time. Even if you come up with something really compelling, by the time it's going to be getting deployed, somebody will catch up to you. >> I mean just think about the time. This is a time for the folks watching, if you're younger or even older like my age, think about it. To actually have a phone in the car and surfing the internet didn't exist. I mean you could barely get email just through a lower latency and a lower bandwidth internet tower. They didn't have the broadband. And so today we surf, watch movies in the car. This was pre-broadband. So I remember a time when we were testing one router, it's like look it we're getting a ping back while we're driving down 101. That was like a miracle. Now it's standard. This is when big shifts happen and a lot of people are comparing that kind of environment to what we're seeing with cloud computing now. You're seeing Amazon Web Services, 26, 27 billion dollar run rate from just 47% a year. Google with great technology and now entering in. Microsoft pivoting to cloud. Those are big players and startups are now trying to figure out what you learned and how to not get in the way but also draft off the momentum. What's your view of this and what advice do you have for entrepreneurs that are out there because this is the number one question that I hear and I talk about entrepreneurs, either behind closed doors or on theCUBE. >> I think it's a blessing to have actually some infrastructure like that, but if you don't do it right it could be a curse. What I mean by that is that you have to leverage something that is available to you and not trying to kind of reinvent, do something slightly better. So I think on the infrastructure side, you have to be very thoughtful on where you could potentially play. And we're frankly some of the big players like AWS or Microsoft and perhaps Google is going to be basically wanting to actually play themselves in that area. However having said that, but the ecosystem and the layer of services that is made available, it's actually a big, big blessing for startups because all the value creation is kind of moving up the chain. And if you leverage that, then the cost of building startups and cost of doing new things is kind of gone down. So we did something very similar with Elastica, which was all about security for the cloud from the cloud. And if we didn't have that infrastructure and the layer available the amount of money that would have required would have been significantly higher. >> So the cloud gets you scaled up, leveled up quicker. Faster to go to market, more agile and dynamic, and then you could wrap IP around those old tasks of provisioning servers. >> There's plenty of intellectual property that first you can put on top of it but in a verticalized fashion. At least for Elastica it was very much kind of a vertical solution of security for the cloud in SaaS applications itself instead of trying to redo your own servers and server stack and our mission. I mean things that are available, just make use of it. >> So you guys were successful with the cloud and you sold that company to Symantec. What year was that? >> Actually it was 2015. We sold it to Bluecoat. And the Bluecoat got acquired by Symantec but then Bluecoat management took over Symantec and that was hurried. So we had like two acquisitions back to back. >> That's nice. It's a good experience. So I want to, before we move on to some of the things that are more personal, I want to get your take on an entrepreneurial dynamic that a lot of successful entrepreneurs take and I want to get your reaction to. Most entrepreneurs are very optimistic. They see the opportunity recognition. They go for it. They're persistent. But they're also in discovery mode to validate their thesis and always kind of self-aware, but there's always the fatal flaw out there that potentially could be there. We talked about broadband wireless, directionally correct, good concept, its fatal flaw was the incumbents. How do you in essence debug a startup venture, venture architecture or venture plan because if there's a fatal flaw in there it's like a bug in software. How as an entrepreneur do you debug that? I mean in your journey as you've had successes and you learned from some of the things that were teachable moments for you, is there a debugging formula? How would you react to that? How would you explain to entrepreneurs? Because that's what they always are naturally doing. Where's the fatal flaw? Where's the fatal flaw? >> And it's I think extremely important. Firstly, the intellectual honesty in setting your own direction is very important. You certainly have to have the aspiration to go do something and have that initiative to go do it, but at the same time setting direction is the most important thing or keep tuning the direction over time is actually extremely important. And then there is no one answer. The key thing is that if you're going to be building something, you have to see if there's going to be a big market for it. That's the first thing. And then when you're going to get there, how the adoption is going to be there. Would you have advantage in adoption as compared to incumbents if they get there? So I think you have to have a thesis because you just can't always project the right way, especially in the enterprise side of things. And if you can actually crack that code, and then if when you do offer this to the market, is it going to be easy to adopt? Easy to accept by the customers? And would it have some kind of an effect of quick movement? I think you have to have all those right. And some trend, if it kind of gives you support. Like when we built Elastica, there was thesis the cloud is going to take over. The SaaS is going to happen. >> That was a tailwind for you. >> So it was a tailwind. So it happened interestingly at the times when we had the product. Same actually happened for WiChorus interestingly, with a thesis that the need of very high speed internet to a mobile device, this is pre-iPhone times, would happen and luckily iPhone came on in around 2007 timeframe and we had the product which telco's would have needed and the iPhone came along. And we ended up building one of the first 4G networks along with ClearY in southern California. So I think all these things kind of have to line up. The market timing, your strategic advantage, your acceptance, all these stuff. >> The self awareness is a great point. Also having versatility and having the skills to flex because to get all those things right you're kind of juggling. And that persistence. Okay I got to ask you about People First. What does People First mean to you? >> At the end I think frankly that is the core, core of startups. And we've been kind of lucky within Elastica. Our main reason for success has been that the team that we ended up having and building over time, they not only had actually very good, diverse skill set because Elastica required very diverse skill set from networking to cloud to AI to all those. But the chemistry between the team was also quite amazing. So I think if you understand that not only the people and the company and the dynamics within them is going to be, which is going to be required, then you start paying attention to the culture that goes along with it. So the culture of executing as well as doing it with kindness and humility along the way. >> Sharing your experience, the journey together, co-creating, kind of creating that superglue in the culture. That's super important. What have you learned over your journey around the where it's worked, where it hasn't cause a lot of people are trying to figure out that people equation, and it's people they really if they sincerely believe they want to do it then but sometimes people don't know the playbook. Is there a playbook or people just go by their gut? What's your advice on in terms of hey I really want to get my people equation right. I want to get that right. We have a mission, you share that mission. What are some of the things that entrepreneurs and companies can do like immediately that's easy to get going? >> I think being is communication. And upfront I continue to start communicating not just in words, but in the things that you do yourself. Because it's not words don't count. How you actually deal with people and how you should treat them and how you actually collaborate additionally really matters. And that actually is the driving force of actually starting a culture I would say in place. And then if you observe anything that aren't working out, communication is going to be the key. You openly communicate and do it in a way that it is not a hostile environment. >> I love your history. I love your background. My personal family as a family of immigrants has come to the United States. You have a very immigrant story. Andy Grove was an immigrant, founder of Intel. I mean Silicon Valley is born, entrepreneurship is indiscriminate. Entrepreneurs are who they are but you have an interesting story where you came from, how you came to Silicon Valley. Tell that story. >> So I was born in Pakistan. My parents were born in India so they migrated to Pakistan which just happens to be that I came here for studies. Interestingly I didn't know much about Silicon Valley to be honest and I happened to have a job in Sun Microsystems that happened to be in Silicon Valley, but when I came here it was kind of a blessing. This is exactly where I needed to be because even when I was going to grad school I had the aspiration to actually go do something on my own but I didn't know how. And when you come here to Silicon Valley, the people around you and the friendships that you create here and the relations that you build here and what you learn from the other people is actually quite amazing. So I feel very blessed. >> And it really is a special place and you have to kind of understand that vibe and culture. I want to ask you a personal question. A lot of entrepreneurs think they can go to business school and get an entrepreneurship degree, and some do, but I always have that debate. You're kind of born with this kind of my philosophy. Some people might debate that. It's always a classic debate: are you born with it or can you learn it or both. Some people know their entrepreneurship early on. Some figure out like me when I'm in my 30's. That's when I kind of figured it out that I have that entrepreneurial talent looking back at some of the things I did. When did you find out that you knew that you were entrepreneurial and wanted to build stuff on your own and this is who I am as a person. What was that moment like? >> I think very early. I didn't have any doubt. This was undergrad times back in my undergrad school in Pakistan. I think I just knew that I'll be doing something on my own and that's exactly what I wanted to do so how I would do it, what time it was going to be, I didn't know any of that. But I had some belief in my mind that I'm going to basically build some things and build business around it. So it was quite early. >> You were lucky, got some time. And when you came to Silicon Valley, what were some of the things you did? Was it like a oh my God this is an amazing place or did you have to do some networking? What were some of the things that you did when you first came in to really kind of get in to that groove swing, entrepreneurial groove swing? >> This is one of those times when Sun was, is an amazing place. I ended up at Sun Microsystems and the people there were unbelievably talented. They have all kind of talented people there. >> Very entrepreneurial. Two coming out of Stanford, Scott McNeely, all the early DNA was very entrepreneurial. >> Exactly. So I think that was again a place where you could learn a lot not just in technology but actually how to solve problems, how to understand customer problems that you could solve and build new technology on top of it. And I didn't stay there that long. Within a couple of years, I decided that I need to go basically join a small company where I could do more things beyond just designing one aspect. I was building microprocessor designs. Instead of just doing that I could do other roles also. So I joined the broadband wireless company after that opportunity. >> As an entrepreneur, one of the big decisions is who are you going to marry in terms of the VC or partner, financial partner. It truly is taking on a new partnership and that's a big struggle and I think we've seen the programmer culture certainly amplified. It's just recently passed decade where everyone wants to go for the big valuations and like wow look it, I only sold 15% of my company and raised ten million or a big number, look how great it is. But then you realize that when they come to board meetings you got them a good valuation but they may not be receptive on the other side. So there's a dynamic in fundraising early on, not just market selection as a venture but partner selection. Talk about how important that is, how you handled it, and advice for people thinking about selection of a financial partner. >> In technology companies where you have to invest a bunch in R&D early on, you do need money. It's just the way it works. But money is not everything because right now at least, today, money is kind of commodity. You can actually raise from many, many different sources, many different VC's. But one thing I've learned within the startups is that any and all startups will have good times and bad times, will have doubt in a strategy and will have conviction. And when those times are not so good, you need people who you can just go talk frankly without having to worry about it and without getting judged along the way. >> Trust. >> Trust is the key. So I think you pick people essentially based on how much you actually trust them, especially very, very early stage startups. And then as you go along, perhaps things change over time because over time if the company's scaling you may need a lot more money. But I think again people first. You want to partner people you can actually trust. >> In that hard conversation sometimes, you want to be self aware and that's always step one but two, vulnerability and then partnering with a financial partner that's going to sit on the same side of the table at the right times and maybe on the other side to be a counterbalance at the right times. And also when you need more money they got to help you sell the next round too. There's a lot of things that they have do to, and the dynamic is critical. And you've had success with that. >> So far it's been a success. >> Well what's the big thing happening right now in your mind, just to kind of take it forward now as we look forward. You see a lot of cloud computing. You got a great experience with cloud. You've been successful. Cloud security is really hot. What do you see as opportunities in the cloud space now that you got your entrepreneurial 20 mile stare out, they're looking for opportunities. I'm sure you probably mean more security space but in general as an entrepreneur, what do you see as things that people can go after markets? >> In general I sit on the enterprise side of things. Anything that simplifies work and automates it, whether it's using AI and whether they're using other technologies, software technologies, I think that space is going to grow more because the horizontal layers where you have big data platforms and you have infrastructure providers, I think they are doing a great job in integrating the system, but now you're going to see a lot more verticalized solutions based on machine learning and AI and automation. I think we're going to see a lot more of that. There's plenty of opportunities. >> It's super early. Do you agree with that? Great, well thanks for coming in the CUBE conversation. I appreciate this part of the Mayfield People First conversations. I'm John from theCUBE. We are here with Rehan Jalil, former president and CEO of Elastica. Successful serial entrepreneur about to embark on his next adventure. Good luck and I'm looking forward to catching up. >> You know, thank you so much for inviting me. >> Thanks for watching. This is the CUBE conversation People First network. I'm John Furrier.