>> Live from Seattle, Washington it's theCUBE, covering KubeCon and CloudNativeCon North America 2018. Brought to you by Red Hat, the Cloud Native Computing Foundation, and its ecosystem partners. >> Hey, welcome back everyone, it's theCUBE live here in Seattle for day three of three of wall-to-wall coverage. We've been analyzing here on theCUBE for three days, talking to all the experts, the CEOs, CTOs, developers, startups. I'm John Furrier, Stu Miniman, with theCUBE coverage of here at dock, not DockerCon, KubeCon and CloudNativeCon. Getting down to the last Con. >> So close, John, so close. >> Lot of Docker containers around here. We'll check it on the Kubernetes. Our next two guests got a startup, hot startup here. You got Norman Hsieh, head of business development, LogDNA. New compelling solution on Kubernetes give them a unique advantage, and of course, Daniel Berg who's distinguished engineer at IBM. They have a deal. We're going to talk about the startup and the deal with IBM. The highlights, kind of a new model, a new world's developing. Thanks for joining us. >> Yeah, no problem, thanks for having us. >> May get you on at DockerCon sometimes. (Daniel laughing) Get you DockerCon. The container certainly been great, talk about your product first. Let's get your company out there. What do you guys do? You got something new and different. Something needed. What's different about it? >> Yeah, so we started building this product. One thing we were trying to do is finding a login solution that was built for developers, especially around DevOps. We were running our own multi-tenant SaaS product at the time and we just couldn't find anything great. We tried open source Elastic and it turned out to be a lot to manage, there was a lot of configuration we had to do. We tried a bunch of the other products out there which were mostly built for log analysis, so you'd analyze logs, maybe a week or two after, and there was nothing just realtime that we wanted, and so we decided to build our own. We overcame a lot of challenges where we just felt that we could build something that was easier to use than what was out there today. Our philosophy is for developers in the terms of we want to make it as simple as possible. We don't want you to manage where you're going to think about how logs work today. And so, the whole idea, even you can go down to some of the integrations that we have, our Kubernetes integration's two lines. You essentially hit two QCTL lines, your entire cluster will get logged, directly logged in in seconds. That's something we show often times at demos as well. >> Norman, I wonder if you can drill in a little bit more for us. Always look at is a lot of times the new generation, they've got just new tools to play with and new things to do. What was different, what changes? Just the composability and what a small form factor. I would think that you could just change the order of magnitude in some of the pricing of some of these. Tell us why it's different. >> Yeah, I mean, I think there's, three major things was speed. So what we found was that there weren't a lot of solutions that were optimized really, really well for finding logs. There were a lot of log solutions out there, but we wanted to optimize that so we fine-tuned Elasticsearch. We do a lot of stuff around there to make that experience really pleasurable for our users. The other is scale. So we're noticing now is if you kind of expand on the world of back in the day we had single machines that people got logs off of, then you went to VMware where you're taking a single machine and splitting up to multiple different things, and now you have containers, and all of a sudden you have Kubernetes, you're talking about thousands and thousands of nodes running and large production service. How do you find logs in those things? And so we really wanted to build for that scale and that usability where, for Kubernetes, we'll automatically tag all your logs coming through. So you might get a single log line, but we'll tag it with all the meta-data you need to find exactly what you want. So if I want to, if my container dies and I no longer know that containers around, how am I going to get the logs off of that, well, you can go to LogDNA, find the container that you're looking for, know exactly where that error's coming from as well. >> So you're basically storing all this data, making it really easy for the integration piece. Where does the IBM relationship fit in? What's the partnership? What are you guys doing together? >> I don't know if Dan wants to-- >> Go ahead, go ahead. >> Yeah, so we're partnering with IBM. We are one of their major partners for login. So if you go into Observability tab under IMB Cloud and click on Login, login is there, you can start the login instance. What we've done is, IBM's brought us a great opportunity where we could take our product and help benefit their own customers and also IBM themselves with a lot of the login that we do. They saw that we are very simplistic way of thinking about logs and it was really geared towards when you think about IBM Cloud and the shift that they're moving towards, which is really developer-focused, it was a really, really good match for us. It brought us the visibility into the upmarket with larger customers and also gives us the ability to kind of deploy globally across IBM Cloud as well. >> I mean, IBMs got a great channel on the sales side too, and you guys got a great relationship. We've seen that playbook before where I think we've interviewed in all the other events with IBM. Startups can really, if they fit in with IBM, it's just massive, but what's the reason? Why the partnership? Explain. >> Well, I mean, first of all we were looking for a solution, a login solution, that fit really well with IKS, our Kubernetes service. And it's cloud-native, high scale, large number of cluster, that's what our customers are building. That's what we want to use internally as well. I mean, we were looking for a very robust cloud-native login service that we could use ourselves, and that's when we ran across these guys. What, about a year ago? >> Yeah, I mean, I think we kind of first got introduced at last year's KubeCon and then it went to Container World, and we just kept seeing each other. >> And we just kept on rolling with it so what we've done with that integration, what's nice about the integration, is it's directly in the catalog. So it's another service in the catalog, you go and select it, and provision it very easily. But what's really cool about it is we wanted to have that integration directly with the Kubernetes services as well, so there's the tab on the Integration tab on the Kubernetes, literally one button, two lines of code that you just have to execute, bam! All your logs are now streaming for the entire cluster with all the index and everything. It just makes it a really nice, rich experience to capture your logs. >> This is infrastructure as code, that's what the promise was. >> Absolutely, yes. >> You have very seamless integration and the backend just works. Now talk about the Kubernetes pieces. I think this is fascinating 'cause we've been pontificating and evaluating all the commentary here in theCUBE, and we've come to the conclusion that cloud's great, but there's other new platform-like things emerging. You got Edge and all these things, so there's a whole new set, new things are going to come up, and it's not going to be just called cloud, it's going to be something else. There's Edge, you got cameras, you got data, you got all kinds of stuff going on. Kubernetes seems to fit a lot of these emerging use cases. Where does the Kubernetes fit in? You say you built on Kubernetes, just why is that so important? Explain that one piece. >> Yeah, I mean, I think there's, Kubernetes obviously brought a lot of opportunities for us. The big differentiator for us was because we were built on Kubernetes from the get go, we made that decision a long time ago, we didn't realize we could actually deploy this package anywhere. It didn't have to be, we didn't have to just run as a multi-tenant SaaS product anymore and I think part of that is for IBM, their customers are actually running, when they're talking about an integrated login service, we're actually running on IBM Cloud, so their customers can be sure that the data doesn't actually move anywhere else. It's going to stay in IBM Cloud and-- >> This is really important and because they're on the Kubernetes service, it gives them the opportunity, running on Kubernetes, running automatic service, they're going to be able to put LogDNA in each of the major regions. So customer will be able to keep their logged data in the regions that they want it to stay. >> Great for compliance. >> Absolutely. >> I mean, compliance, dreams-- >> Got to have it. >> Especially with EU. >> How about search and discovery, that's fit in too? Just simple, what's your strategy on that? >> Yeah, so our strategy is if you look at a lot of the login solutions out there today, a lot of times they require you to learn complex query languages and things like that. And so the biggest thing we were hearing was like, man, onboarding is really hard because some of our developers don't look at logs on a daily basis. They look at it every two weeks. >> Jerry Chen from Greylock Ventures said machine learning is the new, ML is the new SQL. >> Yup. (Daniel laughing) >> To your point, this complex querying is going to be automated away. >> Yup. >> Yes. >> And you guys agree with that. >> Oh, yeah. >> You actually, >> Totally agree with that. >> you talked about it on our interview. >> Norman, wonder if you can bring us in a little bit of compliance and what discussions you're having with customers. Obviously GDPR, big discussion point we had. We've got new laws coming from California soon. So how important is this to your customers, and what's the reality kind of out there in your user base? >> Yeah, compliance was, our founders had run a lot of different businesses before. They had two major startups where they worked with eBay, compliance was the big thing, so we made a decision early on to say, hey, look, we're about 50 people right now, let's just do compliance now. I've been at startups where we go, let's just keep growing and growing and we'll worry about compliance later-- >> Yeah, bite you in the ass, big time. >> Yeah, we made a decision to say, hey, look, we're smaller, let's just implement all the processes and necessary needs, so. >> Well, the need's there too, that's two things, right? I mean, get it out early. Like security, build it up front and you got it in. >> Exactly. >> And remember earlier we were talking and I was telling you how within the Kubernetes service we like to use our own services to build expertise? It's the same thing here. Not only are they running on top of IKS, we're using LogDNA to manage the logs and everything, and cross the infrastructure for IKS as well. So we're heavily using it. >> This also highlights, Daniel, the ecosystem dynamic of having when you break down this monolithic type of environments and their sets of services, you benefit because you can tap into a startup, they can tap in to IBM's goodness. It's like somewhat simple Biz Dev deal other than the RevShare component of the sales, but technically, this is what customers want at the endgame is they want the right tool, the right job, the right product. If it comes from a startup, you guys don't have to build it. >> I mean, exactly. Let the experts do it, we'll integrate it. It's a great relationship. And the teams work really well together which is fantastic. >> What do you guys do with other startups? If a startup watches and says, hey, I want to be like LogDNA. I want to plug into IBM's Cloud. I want to be just like them and make all that cash. What do they got to do? What's the model? >> I mean, we're constantly looking at startups and new business opportunities obviously. We do this all the time. But it's got to be the right fit, alright? And that's important. It's got to be the right fit with the technology, it's got to be the right fit as far as culture, and team dynamics of not only my team but the startup's teams and how we're going to work together, and this is why it worked really great with LogDNA. I mean, everything, it just all fit, it all made sense, and it had a good business model behind that as well. So, yes, there's opportunities for others but we have to go through and explore all those. >> So, Norman, wonder if you can share, how's your experience been at the show here? We'd love to hear, you're going to have so many startups here. You got record-setting attendance for the show. What were your expectations coming in? What are the KPIs you're measuring with and how has it met what you thought you were going to get? >> No, it's great, I mean, previous to the last year's KubeCon we had not really done any events. We're a small company, we didn't want to spend the resources, but we came in last year and I think what was refreshing was people would talk to us and we're like, oh, yeah, we're not an open source technology, we're actually a log vendor and we can, and we'll-- (Stu laughing) So what we said was, hey, we'll brush that into an experience, and people were like, oh, wow, this is actually pretty refreshing. I'm not configuring my fluentd system, fluentd to tap into another Elasticsearch. There was just not a lot of that. I think this year expectation was we need the size doubled. We still wanted to get the message out there. We knew we were hot off the presses with the IMB public launch of our service on IBM Cloud. And I think we we're expecting a lot. I mean, we more than doubled what our lead count was and it's been an amazing conference. I mean, I think the energy that you get and the quality of folks that come by, it's like, yeah, everybody's running Kubernetes, they know what they're talking about, and it makes that conversation that much easier for us as well. >> Now you're CUBE alumni now too. It's the booth, look at that. (everyone laughing) Well, guys, thanks for coming on, sharing the insight. Good to see you again. Great commentary, again, having distinguished engineering, and these kinds of conversations really helps the community figure out kind of what's out there, so I appreciate that. And if everything's going to be on Kubernetes, then we should put theCUBE on Kubernetes. With these videos, we'll be on it, we'll be out there. >> Hey, yeah, absolutely, that'd be great. >> TheCUBE covers day three. Breaking it down here. I'm John Furrier, Stu Miniman. That's a wrap for us here in Seattle. Thanks for watching and look for us next year, 2019. That's a wrap for 2018, Stu, good job. Thanks for coming on, guys, really appreciate it. >> Thanks. >> Thank you. >> Thanks for watching, see you around. (futuristic instrumental music)

>> From Seattle, Washington, it's theCUBE. Covering KubeCon and CloudNativeCon North America 2018. Brought to you by Red Hat. The Cloud Native Computing Foundation and it's ecosystem partners. [techno Music] >> Okay, welcome back everyone. It's theCUBE's live coverage in Seattle for KubeCon and CloudNativeCon 2018. I'm John Furrier with theCUBE. Stu Miniman. Breaking down all the action. Talking to all the thought leaders, all the experts, all the people making it happen. We're here with Aparna Sinha who's the group product manager, Kubernetes, Google Cloud. Also one of the power women of the Cloud at Google, according the Forbes. I wrote the story. Great to see you again. >> Thank you, great to be here with you. >> Thanks for coming on. >> CUBE alumni. Great to have you on. I want to get your prospective. One when you've seen a lot of action, certainly overseeing the group engineering team at Google and all the Kubernetes action. A lot of contribution, a lot of activity, that you guys are leading. >> Yes. >> And quite frankly enabling and contributing to the community. So, congratulations and thanks for that work. Kubernetes certainly looking good. People are pumped up. >> Very much. >> 8,000 people. A lot of activity. A lot of new things around that you guys are always kind of bringing into, the Geo, knative, a lot things. You gave a key note. What's your focus here this year? What's the message from Google? >> Yeah, well as you pointed out, this is the largest KubeCon ever. 8,000 people, 2,000 on the wait list. And people are telling me here that this is the... This is here to stay, right? It's in the early majority going to the mainstream very much like you kind of think about virtualization was 10 years ago. So that's the momentum that I'm seeing here, that I'm hearing here. My keynote was about the community. Thanking the community first of all. So I talked about how open-source really, success in contingent on contribution. And so, I started by showing the contribution over the last one year, the companies that are contributing. And 80% of contributions are by at least 10 entities. One of them is individual contributors. 40% percent I think was Google, which is still staggeringly high. And then the next highest was Red Hat. And so I think in many of the keynotes, we've been calling out the contributors because it's really important. 1.13, the 13th release of Kubernetes shipped last week. A lot of stability, a lot of GA features, and the uptake in the enterprise. The other thing I called out was just the amount of job opportunity in Kubernetes >> Yeah >> 230% growth in the last year. You see here so many customers that are here to talk about their experience. But also they're here to hire. >> Yeah. And there recruiters on the floor, so it's been I think a huge economic value add. And we feel very proud of that. >> Yeah, Aparna, great point. We've been talking about the end users. I always loved... There's a job board right outside the hall here and it's just covered. Big giant white board there. Bring us inside a little bit. I mean Google's always fascinating people. What's the hiring situation there? What's your team lookin' like? Is anybody smart enough to actually go work there? >> Google, I think we've been very, very fortunate in that we've had the original board team that started the Kubernetes project. And so we have a really, really deep bench because we've been running containers since the beginning. So now 15 years of experience with that, which many people tell me, I think that the reason that Kubernetes is so successful is because it's not new actually, right? >> Yeah >> It's been tried and true at scale. So, we have quite a bit of that, but we've been building this community and a lot of folks have been hired in through the community-- >> Yeah >> into Google. And really amazing, amazing people. So yeah. >> The thing about we had Brian Grant on yesterday and Tim Hockin -- Yes. >> Who was talking about some of those early board days. >> Yes. I want to ask you your point of about the hiring because I think this is a interesting dynamic. Open-source is key to your strategy. We've talked many times about how you guys are committed to open source, but what's interesting is not just net new jobs are available, we're seeing a revitalization around traditional roles like the network engineer under Kubernetes. Looking at the policy knobs that your folks pointed out that's... They think it's underutilized. And then on top of Kubernetes, new things are going on that's getting the app kind of server guy-- >> Yeah. >> Kind of energized. >> Yeah. >> It's kind of enabling a lot of thing, actions that's transforming existing jobs. >> That's right. >> And bringing new ones. >> Talk about that dynamic because you see it from both sides. >> Yes >> You've got SREs, site reliable engineers. >> Yes >> You've got developers. But, Now enterprises are now trying to adopt... >> That's right >> You guys are hitting that note. Talk about that dynamic. >> That's right, so I've been talking to a lot of customers here, it's been non-stop. I've not been able to attend any talks or keynotes. And I'm seeing two things. One there's the kind of operations now called platform teams. And they're under tremendous pressure. They're doing incredible work. Incredible. And they're energized. They're really... So one of the customers I was talking to was moving from VMs on EC2 to containers on GCE on Kubernetes. Google Cloud. And in the last one year, they looked... Honestly, they looked miserable because they have worked so hard in doing that transfomation. Turning their application from a VM-based application into containers. But you could also see that they were so happy and so successful because of the impact that it's had. And so and then I asked them so like, "What is driving that?" This is different customer. What is driving that? And it's really... As soon they get that environment up and running, and this is a large enterprise bank that I was talking to, this other one, their developers are just all over it. And they have, they have hundreds of services running within six months. And they're like, "Well we just got this platform up. "We still have to figure how we're going to upgrade it." But it's... So those are the two constituents. The developers are happy. >> The integration and delivery changes the makeup of how teams work. So that's one thing we're seeing here. And the other one is just scale. >> Yeah. >> So that seems to be the area. Now I got to ask you, as you guys look at... As you guys are doing the work on the enterprise side, you guys, I know you're working hard, I talk to Jennifer a lot, Jennifer Lynn, as well and we've talked before, are used to doing the work. But there's still a lot more work done. Where do you guys see the work that this community value opportunities for participants in the eco-system to fill white spaces? Where are the value lines starting to be drawn? Can you comment? >> Yeah, so I see two or three different areas. One of the areas is of course hardening. And that's why Janet Quill gave the keynote about "Kubernetes is boring and that's a good thing". And that's been something we've been working on for the last year at least. Adding a lot more security capabilities. Adding a lot more just moving everything to GA, right? Adding a lot more hooks in the enterprise storage and into enterprise networking. Building up the training and building up the partners that'll do the implementations. All of those things I think are very, very healthy. >> Yeah. >> Cause I see them. You probably talked to the CNCF. They're helping a lot with the certification and the training. So that's one piece of enterprise adoption. I think the other piece is the developer experience. And that's where a lot of the talks here, my key note as well, I demoed Istio and Knative on top of GKE. The developer experience is ultimately this whole thing. My perspective, this whole thing is about making your developers more productive. And developers have been driving this transition. Again going back to those customer examples. So that's getting a lot easier. >> Yeah, Aparna, I'd love you to talk a little about Knative. So, I know the excitement is there. Products only been around for five months. I remember at your show last summer it was announce and roll. Trying to understand exactly what it is. It's like, wait, wait is serverless going to kill Kubernetes? And how does this fit? How does this work with all the various services in the Cloud? Maybe just understand where we are. >> Right. >> What it is, what it isn't. >> Right. >> Again, so the heritage of serverless, I'm going to go back to Google, right? We have the first serverless offering in the world like 10 years ago. And so that's based on containers. Underneath it's based on containers. That's why we knew that with Kubernetes that's the right foundation for building serverless. And it actually, I think, we sort of held back for the longest time. And a couple of years ago there were one, two, and then 15, and then 17 serverless frameworks that just kind of all popped up around Kubernetes, on top of Kubernetes. I remember the first demo in the community. Here's this serverless piece. And at some point, a little bit over a year ago we decided that actually serverless is really important to our customers, to our users. The majority of Kubernetes tends to be on-prem, actually. And so it's important to them to have serverless capabilities on-prem. So then we need to make sure it's stable and it's something that's standard. >> I think it's a really important point... I talked to some people that are in the serverless ecosystem that is living on a AWS and they say, "You can't build serverless on-prem "because then you're racking "and stacking and dealing with it." And it's not... We know there's servers underneath of it and it's just system calls and how we consume that. But maybe explain the nuances to how this is important and we understand it. >> Yeah. >> There's not like a solution out there. >> Yeah. >> Server meshes, there's a lot of options out there right now. >> Yeah. >> So. >> A lot of things, because this is an open-source community, a lot of things come from the users. So when the user says, "You know what, actually need "the serverless capability on-prem. "Why? "Because I've got this developer group and I don't want "them to have to muck with the infrastructure. "I don't want them to have access to the infrastructure. "I want to just give them a simple interface "where they're going to write their applications "and the rest is taken care of for them." Right? And then I want to be able to bill them on a per-use basis. So, it's... Yeah there's someone managing the server. Someone building actually the severless capability and that's the platform team. That's the guys that I talked about that are working very hard these days happily. But, working very hard. >> And these are the new personas, by the way-- >> Yeah. >> In the enterprise. This is new kind of new re-architecting of how enterprises are creating value. These new platform teams. >> Right. >> This is the opportunity. Well I got to ask you, you know everyone that watches theCUBE knows I'm a big fan of scale. Love Amazon scale. I love Google scale. I love the enterprise market. And I want to get your thoughts... I want you to take a minute to explain the culture at Google Cloud. Because it's a separate building. Give you an opportunity to share. But you guys are working hard to go after the enterprise. It's not like a new thing. But the enterprise is interesting. It's not so much the best technology that wins. It's grit. It's almost like a street fight. You got to go out. You got to win those battles. Get all the work done. Hit those features. You can't just roll into town and say we've got great technology. We're Google. You guys recognize this. And I want you to share the culture you guys are building and how you guys are attacking the enterprise. What's the guiding principles? What are some of the core tenants? >> Yeah, yeah. So you know my entire life has been spent in enterprise software. >> Yeah. >> I do think that enterprises respect Google Cloud. I work very closely with them. And they respect certainly the engineering prowess. Like, "Wow. I need that." >> Yeah. Right? Especially you see all these enterprises that are being transformed by technology. Their industry is being transformed by technology. Whether that's in transportation, or it's in retail, or it's in media. And they want the best. They want the latest. Right? And they also don't necessarily have the skills, like you said, right? So they're looking for a partner that'll both help them scale up but also provide them all of that guidance. And the one thing you asked about culture at Google. I think we are a revolutionary company. We are willing to do lots of things. Lots of things that you wouldn't expect. And that's why you saw GK on-prem from my team, right? The first, kind of, Kubernetes on-prem offering from a cloud provider. Managed by a cloud provider. And that's really... I mean we've seen tremendous, tremendous interest in that. Tremendous feedback from our users and new customers. People that hadn't thought about it. Hadn't thought about Google, necessarily before that have said, "Wow. If you are going to come and help me on-prem "with this, I'm ready. "Give it to me now. "Because I trust you and I know I want to go to the Cloud. "So it's the right step for me. "You have the right incentives." Right? "And you're the open cloud, which is important to me "because I may want to be multi cloud." So that's the piece that is... >> You got the enterprise chops. You've spent your whole career there. I know Jennifer as well. >> Yes. >> A lot of people you guys have hired. >> Right. >> The good news is you've got a market that's changing. So you don't have to come in and replicate the old IT. So that's an opportunity at Google. How are you guys attacking that, that beachhead? Because you have the check. What's the vibe? What's the grit? What's it like... How you guys attacking the enterprise? What do you see as opportunities knowing the enterprise of old-- >> Yeah >> As it shifts to new kind of method? >> Yeah. >> What's the core? >> I think about the problems the users are having. I think about what is the problem the customer is facing. And so... And then breaking that down and solving that for them. I mean that's what's important, right? And so some of the problems I see is one they need a developer platform. And the developer platform sometimes cannot be in the Cloud. When I talk to large financial institutions, there's so much compliance and regulation and things that have to be on-prem. That it has to be on-prem. And they try to move to the Cloud and some things will do it. But the majority, like 90% is on-prem. And so they need an agile development environment and there's no holding it back. Because, like I said, there's all this transformation. Their developers need that environment today. So you have to provide that. That's one use case. We provide an on-prem development and agile development environment. Best in class. Your developers are super happy. Your business is going to do well. The other thing I see, and I see this a lot in retail, but also in hospitality at some of these very kind of brick and mortar enterprises is the edge. They need a solution at their edge location. Thousands, these are thousands of branch locations. We've even got this use case with Chick-fil-A, right? And a lot of times this is... A lot of different use cases, but a lot of time the common thing is that they're collecting data. They're doing some processing at that site and then they're doing further processing in the Cloud. And so it's a connected, but an intimately, it's not always connected.... Intimately connected environment. So that's the second big use case. Edge retail or just edge. There's so many... For me, it's one of the most exciting. There's so many examples of that. >> Awesome. >> Aparna, first of all, just so many goodness I want to say thank you to Google because everything from I heard at the show Google wasn't giving out swag because it actually went to charitable givings instead of spending that money. One of the things we always look is open-source is, how much more value is being created for the eco-system not just the vendor that started it. And it is a really tough balance. We've seen it fail many times. Do you step too far back? And how much do you engage? How do you strike that bound? For the last five to 10 years, we've been saying, "Where is the independent place where we can have that "conversation about cloud?" We think found it at this show. I mean we've been here for three years now. Google Cloud, phenomenal event. Our teams loves to be there, but this feels like overnight has turned into oh wait, here's the show we were looking at to have that conversation. To have that commons where we can come together and there's so many diversity of people, diversity of projects in here. Many which have very disconnected from original Kubernetes and everything, so. It's been fascinating to watch and have to imagine your team is... When you watch that first piece go and everything that's built around it. It's got to be amazing. >> My team loves this event. We have literally I think 300 people here. And a lot of them are core maintainers. Everybody is a contributor, but they are core maintainers of the Kubernetes project. The Istio project. The Knative project. And I think the best thing here is just interacting with our users. Because this is a developer, this is a developer conference, primarily. There's a lot of businesses here. >> Yeah >> With their kind of director level executives. But primarily it's an action-oriented hands-on audience. And you just... These customer meetings that I have, we review their architecture and we're like... It's an engineer to engineer conversation. >> Yep. >> And so how can we make that better? And sometimes they're contributing back and it makes the whole project better. >> Yeah. The thing, too, is it's an engineering, it's a developer conference, true. But what's interesting about that evolution as it modernizes, those end users are developers. >> That's right. >> And so the end user aspect of this show. >> That's right. >> Is the developer piece. >> That's right. >> It never used to be like that. Used to be COMDEX or some big event. >> Yeah. >> And then people just selling their stuff. >> Yeah. >> Doing business. The end user participation... >> Yes. >> Is not a consumption conversation, it's a contribution. >> Right. And end users are all over the spectrum of sort of really, really hands-on. Very, very smart to just give me something that works and I respect all of that, right? And we were actually very far here in terms of GKE. Giving you something that you really don't need to get in, that's fully managed, right? But then on the other hand we had Uber on stage earlier today in their keynote talking about how they've built all of this advanced capability on GKE. And that's a power user. That's using all their capabilities. Like custom additions and an operator. And it's just really gratifying I think for us to work with them and for us to see the user base as well as the community. So the ecosystem. Google. I thinks it's very important for us to have and create economic opportunity for our partners. And you'll see that with GKE on-prem. We're partnering heavily on that one. And you'll see that also in our marketplace. Our Kubernetes marketplace. So many of the companies that have come out of this ecosystem are now part of selling through Google Cloud. >> Aparna, thank you for your time. I know you've had to move some things around to come here. Great to have you on. I love your leadership at Google, it's phenominal. You've got the enterprise chops building out heavily over there. Congratulations. And for more CUBE interviews check out theCUBE dot net. You can check out Aparna's other good news. Of course search her name on Forbes. I wrote a story about her featuring her. Talking about her background and her passion. Always great to have her on theCUBE and get some commentary from Google. Of course, theCUBE is breaking down live coverage. Been there from the beginning of KubeCon and now CloudNativeCon, the Linux Foundation. Bringing you all the analysis and insight. Be back with more coverage after this short break. [Techno Music]

>> Live from Seattle, Washington it's theCUBE covering KubeCon and CloudNativeCon North America 2018 brought to you by Red Hat the Cloud Native Computing Foundation and it's Ecosystem Partners. >> Well, everyone welcome back to theCube's live coverage here in Seattle for KubeCon and CloudNativeCon 2018. I'm John Furrier with Stu Miniman. Three days of coverage around the Cloud Native growth, around the Ecosystem around open source, and the role of micro servers in the cloud. Our next guest is Roland Barcia who's the IBM Distinguished Engineer for IBM's Hybrid Cloud. Welcome to theCube. >> Thank you, glad to be here. >> Thanks for joining us. Being a Distinguished Engineer of IBM is a pretty big honor so congratulations. >> Thank you. >> it means you got technical chops so we can get down and dirty if we want to. >> Sure. >> I want to get your take on this because a lot of companies in IT are transforming and then that's been called digital transformation, it's happening and cloud has developed scale. And the wish list if you had the magic wand that could make things do better is actually happening. Supernetting's actually creating some goodness that if you had the magic wand, if I asked that question three years ago, if you had a magic wand what would an environment look like? Seamless operations around the cloud, so it's kind of happening. How are you guys positioned for this? Talk about the IBM cloud, what you're doing here, and how you see this cloud native market exploding. It's almost 8,000 people here up from 4,000 last year. >> Yeah, that's a great question I think. I work a lot with our enterprise clients. I'm part of what's called the IBM Cloud Garage, so I'm very customer facing. And often times, we're seeing that there is different paces of a journey. And so for example, I worked with a client that started building a cloud native application. They built about 60 micro services. And at the end of that, they were deploying it as one job which means they defeated the whole purpose of micro service architecture. And so what we really need to think about is an end to end journey. I think the developers are probably the more modern role in an enterprise, but we're starting to see modernization of an operations team for example, and adopting culture, and cutting down the walls of IT organizational groups into mixed squads, adopting something like a Spotify model. And I think a lot of the challenges in adopting kubernetes is really in cultural aspects and in enterprise. Does that make sense? >> Yeah. And because network guys are different than the app guys, and now they have policy knobs on kubernetes they can play with. Network guys love policy. >> Yeah, and they're fighting over ownership, right? >> Roland indeed. We look at that modernization, the application modernization really is that long home intent. And what we hear here is you need to be able to meet customers where they are. Sure, there's some stuff they're building shiny and new and have the developers, but enterprises have a lot of application and therefore there's a grand spectrum. What do you hear from customers? What's the easy part and where's the parts they're getting stuck? >> Yeah, so I think the easy part is writing the application. I think where they're getting stuck is really scaling it to the enterprise, doing the operations, doing the DevOps. I always tell people that a modernization journey might be better started by taking a certain class of applications like middleware where we have a WebSphere heritage from IBM, and saying why don't we take a look at containerizing that. We've built tools like Transformation Advisor that'll scan your WebSphere applications and tell you what do you need to change in that middleware application to make it behave well in a containerized platform. Then from there, you build your DevOps engine, your DevOps pipeline and you really start to get your operations teams going in delivering containers, delivering applications as containers. And then getting your policies and your standards in place. Then you can start opening up around innovation and start really driving towards building cloud native new applications in addition to that. >> One of those areas we've been talking about in the industry for decades is automation. The conversation's a little bit different these days. Maybe you can bring us up to speed about what's different than say it was earlier days. >> Yeah, I think IT organizations have always done a bit of automation. I think they write scripts, they automate builds. I think the mantra that I use is automate everything, right? Organizations need to really start to automate in a new way. How I deliver containers, but delivering the app is not enough. I need to automate all levels of testing in a modern way. Test driven development is big. At the IBM Cloud Garage, we have something we call the IBM Cloud Garage Method which really takes a set of practices like test driven development, pair programming, things out of lean startup, extreme programming, and really start to help enterprises adopt those practices. So I say why can't we automate end to end performance testing in the pipeline, and functional testing, and writing them early and in the beginning of projects? That way, as I'm deploying containers which are very dynamic, along with configuration, and along with policy you're testing it continuously. And I think that level of automation is what we need to get to. >> Talk about security as well 'cause security's one of those things where it's got to be baked in upfront. You got to think about it holistically. It's also now being pulled out of IT, it's more of a board function because the risk management is one hack you could get crushed. And so you got to have security. And the container there's a security boundary issue, so it's important. >> Last week we met with an insurance company. We did a workshop. And they walked us through all the compliant steps that they need to go through today. How they do it with traditional middleware and virtual machines and hardware and it was a very, what I'm going to say governance driven process. And so a lot of checks and balances, stop don't move forward, which is really the industry for developing and innovating is going the opposite way: self service and enabling. And there's a lot of risk with that. And so what we're really trying to do with technology is like Multicloud Manager, technology we have around multicluster, management is how do I do things like I want to check which clusters are Hipaa compliant and which ones are out. How do i force that policy? >> That's smart. >> Now that everything is software driven, software developed, there's an opportunity to really automate those checks. >> So your point automate everything. >> Yeah, I want to automate everything. >> Governance is a service. (laughing) >> Yeah, that's right. And actually, that can help get away from error prone human checks where they had all these tons of documents of all different policies they have to go through can now be automated in a seamless way. >> So compliance and governance could be a stumbling block or it can be just part of the software. That's what you're getting at here. >> That's right, that's what I'm getting at. I think the transition is look at it as an opportunity now that everything is software driven, use software disciplines that developers are used to in those security roles and those CSO roles, etc. >> So I want to ask you a question. So one of the things we're seeing obviously with the cloud is it's great for certain things, and then on premises it has latency issues. We saw Amazon essentially endorse this by saying RDS on VMware on premises. They announced Outpost had reinvent oh, latency. Things aren't moving into the cloud as fast. So you're going to see this hybrid environment. So hybrids, we get that, it's been around, check. No real discussion other than it's happening. The real trend is multicloud, right? >> That' right. >> And so multicloud is just a modern version of the word multi vendor about the client server days. So systems were a multi vendor man choice. This is a fundamental thing. It's not so much about multicloud as it is about choice. How do you guys see that? You are in an environment where you have a lot of customers who don't have one cloud, so this is a big upcoming trend in 2019. >> Most of our clients have at least five different clouds that they deal with, whether it be an IaaS, a PaaS, a SaaS base solution. What we're seeing as a trend is we talked about on premise and private and enterprise is I think is 80% of workloads are still in the data center. And so they want to build that private cloud environment as a transitionary point to public, but what we're seeing across the multicloud space is I'm going to say a new integration space. So if you really think 15 years ago, SOA and enterprise service bosses in a very centralized fashion, I think there's a new opportunity for integration across clouds and on-prem in a more decentralized way. So I think integration is kind of the next trend that we're seeing in this multicloud space because the new applications that we're seeing with cognitive data AI are mixing data sources from multiple clouds and on-prem and needing to control that in a hybrid control plane is key. >> It's funny, the industry always talks about these buzzwords, multicloud. If we're talkin' about multicloud, then it's a problem. The idea of infrastructure as code it's not even use the word multicloud. I mean, if you think about it, if you're programming the infrastructure and enabling the stuff under the covers, why even talk about cloud? It should be automated, so that's the future state, but in reality, that's kind of what enterprisers are tryin' to think about. >> They are, and I think it's a tension between innovation and moving fast and control, right? The enterprisers want to move fast, but they want to make sure that they don't break security protocol, that they don't break resiliency that they're maybe have used to with their existing customers and applications. I do think the challenge is how operations teams and management teams start to act like developers to get to that point. And I think that's part of the journey. >> Open source obviously a big part of this show, and that's open source, people contribute upstream It's great stuff. IBM is a big contributor, and it'll be even more when Red Hat gets into the mix. So upstream's great, but as you got 8,000 people here, you're startin' to see people talkin' about business issues, and other things. One of the downstream impacts of this conference being so open source centric is the IT equation and then just the classic developer. So you have multiple personas now kind of interacting. You got the developer, you got the IT architect, cloud architect pro whatever, and then you got the open source community members. Melting pot: good, challenges, thoughts? >> So I think it's so developers love that, right? I think from an enterprise perspective, there are issues. We're seeing a lot of our clients with our private cloud platform ask us to build out what's called air gapped environment which is how do I build up an open source style ecosystem within my enterprise. So things like getting an artifactory registry or a Docker registry or whatever type of registry where I get certified, open source packages in my enterprise that I've gone and done security vulnerability scans with, or that I've made sure that I look at every layer from the Linux kernel all the way up to whatever software is included. So what we're seeing is how do I open the aperture a bit, but do it in a more responsible fashion I think is the key. >> Yeah, and that's for stability, right? So Stu, one of things I've been talkin' about and want to get your thoughts on this role is that you got the cloud as a scalable system then one of the things that's being discussed in Silicon Valley now for the first time, we've been sitting on theCube for years, is the cloud's a system. It's just some architecture, it's network distributing, computing, art paradigm, all that computer science has been around for awhile, right? >> Yes, yes. >> So if you've been a systems person whether hardware or whatever, operating systems, you get cloud. But also you got the horizontal specialism of applications that are using machine learning and data and applications which is unique on top. So you have the collision of those two worlds. This is kind of a modern version of two worlds that we used to call systems and apps, but they're happening in a real dynamic way. What's your thoughts on this? Because you got the benefits of horizontally scalable cloud and you now have the ability to power that so we're seeing things like AI, which has been around for a long, long time, have a renaissance because now you got a lot of compute. >> That's right, and I think data is the real big challenge we're seeing with a lot of our clients. They have a lot of it in their enterprise, they don't want to unlock it all right away. We recently did what's called IBM Cloud Private for Data, in which we brought in a set of technologies around our AI, our Watson core to really start leveraging some of those tools in a private manner. And then what we're seeing is a lot of applications that are moving to the cloud have a data drag. It might start as something as simple as caching data and no SQL databases, but very quickly they want to learn a lot more about that data. So we're seeing that mix happening all the time. >> We've had it, we've had someone say in theCube ML's the new SQL. >> Yeah. >> Because you're starting to see SQL abstraction layers are a beautiful thing if they're connected. So I want to get your thoughts on this because everyone's kind of in discovery mode right now. Learning, there's a lot of education. I mean, we're talkin' about real, big time players. Architects are becoming cloud architects. Sysadmins are becoming operators for large infrastructure scale. You see network guys goin' wait a minute, if I don't get on the new network programmable model I'm going to be irrelevant. So a lot of persona changes in the enterprise. How are you guys handling that with customers? I know you guys have the expert program. Comment on that dynamic. >> I think what we're doing is we use the IBM Cloud Garage to bring in practices like the Spotify method where we start pushing things like >> What's the Spotify method? >> Spotify method is a way of doing kind of development where rather than having your disciplines of architects, development, operations, we're now splitting teams, let's say functionally, where I have mixed disciplines in a squad and maybe saying hey, the person building the account team has an SRE, an ops guy, a dev guy all within their same squad. And then maybe have guilds across disciplines, right? And so what we do at the Garage is we bring 'em in to one of the Garages. We have four team locations worldwide. Maybe do your first project. Then we build enablement and education around that, bring it back to the enterprise and start making that viral. And that's what we're doing in the IBM Cloud Garage. >> So not a monolithic thing, breakin' it down, integrating multiple disciplines, kind of like a playlist. >> Yeah, that's right. And I think the best way to do it is to practice it, right, in action. Let's pick a project rather than talking about it. >> If I had to ask you in 2019, what is the IT investment going to look like with kubernetes impact? How does kubernetes change the IT priorities and investments for an enterprise? >> Yeah, so I think you'll see kubernetes become a vehicle for enterprises to deliver content. So one, the whole area around helm and other package managers as a way to bundle software. I think as people build more clusters, multicluster management is going to be the big trend of how do I deal now with clusters that I have in public cloud and private cloud, all different clouds? And I think that integration layer that I talked about where what does modern integration look like across kubernetes based applications. >> Someone asked me last week at Reinvent hey, can't we just automate kubernetes? And then I was like, well it's kind of automated now. What's your thoughts on that? >> So I think when someone asks a question what does it mean to automate that I think the kubernetes stack really sits on top of IaaS infrastructure. And so for example, our IBM Cloud Private you can run it on zLinux or Power. And we have a lot of IBM folks that run multi architecture clusters. And therefore, they still need a level of automating how I create clusters over IaaS and there's technologies like Terraform and others that help with that, but then there's also automating standing up the DevOps stack, automating deployment of the applications over that stack. And I think they mean automating how I use kubernetes in an environment. >> So 2019, the year of programmability and automation creating goodness around kubernetes. >> Yeah, absolutely, >> Roland, thanks for comin' >> Thank you, it was great. >> on theCube, thanks for that smart insight. TheCube coverage here, day two winding down. We got day three tomorrow. This is theCube covering KubeCon and CloudNativeCon 2018. We'll be right back with more day two coverage after this short break. (happy electronic music)

>> Live from Seattle, Washington, it's theCUBE covering KubeCon and CloudNativeCon, North America 2018, brought to you by Redhat, the Cloud Native Computing Foundation and it's ecosystem partners. >> Okay, welcome back, everyone, this is theCUBE's live coverage here in Seattle for KubeCon and CloudNativeCon 2018. I'm John Furrier with Stu Miniman breaking down all the action, talking to all the top people, influencers, executives, start-ups, vendors, the foundation itself. We're here with two co-leads of Kubernetes at Google, legends in the Kubernetes industry. Tim Hockin and Brian Grant, both with Google, both co-leads at GKE. Thanks for joining us, legends in the industry. Kubernetes is still a short life, but still, being there from the beginning, you guys were instrumental at Google building out and contributing to this massive tsunami of 8000 people here. Who would have thought? >> It's amazing! >> It's a little overwhelming. >> It's almost like you guys are celebrity-status here inside this crowd. How's that feel? >> It's a little weird. I don't buy into the celebrity culture for technologists. I don't think it works well. >> We agree, but it's great to have you on. Let's get down to it. Kubernetes, certainly the rise of Kubernetes has grown. It's now pretty mainstream, people look at that as a key linchpin for the center of Cloud Native. And we see the growth of Cloud, you guys are living it with Google. What is the importance of Kubernetes? Why is it so important? Fundamentally at it's core, has a lot of impact, what's the fundamental reason why it's so successful? >> I think fundamentally Kubernetes provides a framework for driving migration towards Cloud Native patterns across your entire operational infrastructure. The basic design of Kubernetes is pretty simple and can be applied to automating pretty much anything. We're seeing that here, there are at least more than half a dozen talks about how people are using the Kubernetes to control plane to manage their applications or workflows or functions or things other than just core Kubernetes, containers, for example. Cloud Native is about... One of the things I'm involved with is I'm on the Technical Oversight Committee of the Cloud Native Computing Foundation. I drove the update of the Cloud Native definition. If you're trying to operate with high velocity, deploying many times a day, if you're trying to operate at scale, especially with containers and functions, scale is increasing and compounding as people break their applications into more and more micro services. Kubernetes really provides the framework for managing that scale and for integrating other infrastructure that needs to accommodate that scale and that pace of change. >> I think Kubernetes speaks to the pain points that users are really having today. Everybody's a software company now, right? And they have to deploy their software, they have to build their software, they have to run their software, and these things, they build up pain. When it was just a little thing, you didn't have to worry about scale, internet-scale and web-scale, you could tolerate it within your organization. But more and more, you need to deploy faster, you need to automate things. You can't afford to have giant staffs of people who are running your applications. These things are all part of Kubernetes purvey. I think it just spoke to people in a way, they said I suffer from that every day and you just made it go away. >> And what's the core impact now? Because then now people are seeing it, what is the impact to the organizations that are rethinking their entire operation from all parts of the staff, from how they buy infrastructure, which is also Cloud, you see some Cloud there, and then that deploying applicant, what's the real impact? >> I think the most obvious, the most important part here is the way it changes how people operate and how they think about how they manage systems. It no longer becomes scary to update your application. It's just a thing you do. If you can do it with high confidence, you're going to do it more often, which means you get features and bugs fixed and you get your roll-outs done quicker. It's amazing, the result that it can have on the user experience. A user reports a bug in the morning, and you fix it in the afternoon, and you don't worry about that. >> You bring up some really interesting points. I think back 10 years ago, from a research standpoint, we were looking at how can the enterprise do some of the things that the hyperscale vendors were doing. I feel over the last 10 years, every time Google released one of the great scientific papers, we'd all get a peer inside and say like, oh hey. When I went to the first DockerCon and heard how Google was using containers, when Kubernetes first came out, it's like, oh wow, maybe the rest of us will get to do something that Google's been doing for the last 10 years. Maybe bring us back a little bit to Borg and how that led to Kubernetes. Are we still all the rest of us just doing whatever Google did 10 years ago? >> Yeah, Tim and I both worked on Borg previously, Tim on the node-agent side and I worked on the control-point side in Borg One lesson we really took from Borg is that really you can run all types of applications. People started with stateless applications and we started with that because it's simpler in Kubernetes. But really it's just a general management control plane for managing applications. With the model of one application per container, then you can manage the applications in a much more first-class way and unlock a lot of opportunities for automation in the management control plane. At Google, several years ago when we started, Google had already gone through the transition of moving most of its applications to Borg. It was after that phase that Google started its Cloud effort and the rest of the world was doing VMs. When Docker emerged, we were... In the early phases, Tim mentioned this in our keynote yesterday of open-sourcing our container runtime. When Docker emerged, it is clear it had a much better user experience for the way folks were managing applications outside of Google and we just pivoted to that immediately. >> When Docker first came out, we took a look at it, we, my node-agent team in Borg, and we went, yeah, it's kind of like poor man's version of Borglet. We sort of ignored it for awhile because we were already working on our open-source effort. We were open-sourcing it, not really to change the world and make everybody use it, but more so that we can have conversations with people like the Linux kernel community. When we said we need this feature, and they'd say well why, why do you need this, we could actually demonstrate for them why we needed it. When Docker landed, we saw the community building, and building, and building. That was a snowball of its own, right? As it caught on, we realized we know what this is going to. We know once you embrace the Docker mindset that you very quickly need something to manage all of your Docker nodes once you get beyond two or three of them. We know how to build that. We got a ton of experience here. We went to our leadership and said, please, this is going to happen with us or without us and I think the world would be better if we helped. >> I think that's an interesting point. You guys had to open-source to do collaboration with Linux to get that flywheel going for you guys out of necessity. Then when Docker validated the community acceptance of hey, we can just use containers, a lot of magic will happen, it hit the second trigger point. What happened after that? You guys just had a debate internally? Is this another MapReduce? What's happening? Like, we should get behind this. I knew there was a big argument or debate, I should say, within Google. At that time there were a lot of conversations, how do we handle this? >> That was around the time that Google Compute Engine, our infrastructures and service platform, was going GA and really starting to get usage. So then we had an opportunity to enable our customers to benefit from the kinds of techniques we had been using internally. So I don't think the debate was whether we should participate, it was more how. For example, should we have a fully managed product, should we have to do open-source, should we do managed open-source, so those were really the three alternatives that we were discussing. >> Well, congratulations, you guys done great work and certainly a huge impact to the industry. I think it's clear that the motivation to have some sort of standardization, de facto standard, whatever word can be used to kind of let people be enabled on top or below Kubernetes is great. I guess the next question is how do you guys envision this going forward as a core? If we're going to go to decomposition with low levels of granularity tying together through the network and cloud-scale and the new operating law, we'll have comments in this, how does the industry maintain the greatness of what Kubernetes is delivering and bring new things to market faster? What's your vision on this? >> I talked a little bit about this this week. We put a ton of work into extension points, extensibility of the system trying to stay very true to the original vision of Kubernetes. It is a box, and Kubernetes fits inside a box, and anything that's outside the box has to stay outside the box. This gives us the opportunity to build new ecosystems. You can see it in networking space, you can see it in storage space where whole sort of cottage industries are now springing up around doing networking for Kubernetes and doing storage for Kubernetes. And that's fantastic! You see projects like Istio, which I'm a big fan of, it's outside of Kubernetes. It works really well with Kubernetes, it's designed on top of Kubernetes infrastructure, but it's not Kubernetes. It's totally removable and you don't need it. There's systems like Knative which are taking the serverless idea and upleveling Kubernetes into serverless space. It's happening all over the place. We're trying to sort of pray fanatically, say, no, we're staying this big and no bigger. >> It's a really... From an engineering standpoint, it's much simpler if I just build a product and build everything into it. All those connection points, I go back to my engineering training. It's like every connection point is going to be another place where it could fail. Now it's got all these APIs, there's all the security issues, and things like that. But what I love what I heard right here is some of the learnings that we've had in open-source is these are all of these individual components that most of them can stand on their own. They don't even have to be with Kubernetes, but altogether you can build lots of different offerings. How do you balance that? How do you look at that from kind of a design and architecture standpoint? >> So one thing I've been looking at is how do we ensure compatibility of workloads across Kubernetes in all different environments and different configurations. How do we ensure that the tools and other systems building an ecosystem work with Kubernetes everywhere? So this is why we created the Conformance Program to certify that the critical APIs that everybody depends on behave the same way. As we try to improve the test coverage of the conformance, people are focusing on these areas of the system that are highly pluggable and extensible. So for example, the kubelet in the node has a pluggable container runtime, pluggable networks, pluggable storage systems now with CSI. So we're really focusing on ensuring we have good coverage of the Pod API, for example. And other parts of the system, people have swapped out an ecosystem, whether it's kube-proxy for our Kubernetes services or the scheduler. So we'll be working through those areas to make sure that they have really good coverage so users can deploy, say, a Helm Chart or their takes on a configuration or whatever, however they manage their applications and have that behave the same way on Kubernetes everywhere. >> I think you guys have done a great job of identifying this enabling concept. What is good enabling technology? Allowing others to do innovation around it. I think that's a nice positioning. What are the new problem areas that you guys see to work on next? Now I see things are developing in the ecosystem. You mentioned the Istio service mesh and people see value in that. Security is certainly a big conversation we've been having this week. What new problem areas or problem sets you guys see emerging that are needed to just tackle and just knock down right away? >> The most obvious, the thing that comes up sort of in every conversation of users now is multi-cluster, multi-cloud, hybrid, whether that's two clouds or on-prem plus cloud or even across different data centers on your premises. It's a hard topic. For a long time Kubernetes was able to sort of put a finger in our ears and pretend it didn't exist while we built out the Kubernetes model. Now we're at a place where we've crossed the adoption chasm. We're into the real adoption now. It's a real problem. It actually exists and we have to deal with it, and so we're now looking at how's it supposed to work. Philosophically, what do we think is supposed to happen here? Technologically, how do we make it happen? How do these pieces fit together? What primitives can we bring into Kubernetes to make these higher level systems possible? >> Would you consider 2019 to be the year of multi-cloud, in terms of the evolution of trying to tackle some of these things from latency? >> Yeah, I'm always reluctant to say the year of something because... >> Someone has to get killed, and someone dies, and someone's winning. >> It's the year of the last desktop. >> It's the year of something. (laughs) EDI, I'm just saying. >> I think multi-cluster is definitely the hot topic right now. It's certainly almost every customer that we talk to through Google and tons of community chatter about how to make this work. >> You've seen companies like NetApp and Cisco, for instance, and how they're been getting a tail-wind from the Kubernetes. It's been interesting. You need networks. They have a lot of networks. They can play a role in it. So it's interesting how it's designed to allow people to put their hands in there without kind of mucking up the main... >> Yeah, I think that really contributes to the success of Kubernetes, the more people that can help add value to Kubernetes, more people have a stake in the success of Kubernetes, both users and vendors, and developers, and contributors. We're all stakeholders in this endeavor now and we all share common goals, I think. >> Well guys, final question for you. I know we got to break on time. Thanks for coming. I really appreciate the time. Talk about an area of Kubernetes that most people should know about that might not know about. In other words, there was a lot of hype around Kubernetes, and it's warranted, it's a lot of buzz, what's an important area that's not talked about much that people should know more about it and pay attention to within the Kubernetes realms of that world? Is there any area that you think is not talked about enough that should be focused on in the conversations, the press, or just in general? >> Wow, that's a challenging question. I spent a lot of my time in the infrastructure side of Kubernetes, the lower end of the stack, so my brain immediately goes to networking and storage and all the lower level pieces there. I think there's a lot of policy knobs that Kubernetes has that not everybody's aware of, whether those are security policies or network policies. There's a whole family of these things and I think we're going to continue to acree more and more policy as more people come up with real-use cases for doing stuff. It's hard to keep that all in your mind, but it's really valuable stuff down there. >> For programmability, it's like a Holy Grail, really. Thoughts on the things that (chuckles) put you on the spot there? >> I think this question of how people should change what they were doing before if they're going to migrate to Kubernetes. To operate any workload, you need at least monitoring and you need really CI/CD if you want to operate with any amount of velocity. When you bring those practices to Kubernetes, should you just lift and shift those into Kubernetes or do you really need to change your mindset? I think Kubernetes really provides some capabilities that create opportunities for changing the way some things happen. I'm a big fan of GitOps, for example, in managing the resources to declaritively using version control as a source of truth and keeping that in sync with the state in your for live clusters. I think that enables a lot of interesting capabilities like instant disaster recovery, for example, migrations, new locations. There are some key folks here who are talking about that, giving that message, but we're really at the early stages there. >> All right, well great to have you guys on. Thanks for the insight. We've got to wrap up. Thanks Brian, thanks Tim, appreciate it. Live coverage here, theCUBE is at KubeCon, Cloud Native, Cloud 2018. I'm John Furrier with Stu Miniman, we'll be back after this short break.

>> Live from Seattle, Washington, it's theCUBE, covering KubeCon and CloudNativeCon North America 2018, brought to you by Red Hat, the Cloud Native Computing Foundation, and its ecosystem partners. >> Hello everyone, welcome back to the live Cube coverage here, three days at Seattle's KubeCon and CloudNativeCon. It's a conference put on by the Linux Foundation. Cube's been there from the beginning, breaking down all the action. 8,000 people, doubling attendance from the last one, now global, on a global scale, seen great traction in China and other areas around the world. It's about the cloud global. I'm John Furrier with Stu Miniman, our next guest, Kelsey Hightower with Google. Former code program share, now out in the wild on his own, super dope, playing with all kinds of new technology, it's great to see you, thanks for coming on. >> Proper you said the word dope, by the way, so congratulations there. I'm an attendee, I still have a keynote on Thursday but I do get to enjoy the floor like everyone else. >> So what's new, so you're now, again, there's a lot of pressure now every year. It's more and more people here, so it's a lot of pressure to kind of get all the action packed, but the growth has been pretty phenomenal. You've been looking at serverless, we saw some tweets, again you mention it's super dope, serverless is. You've got serverless, you've got a lot of stuff going on within the CNC app, you've got Kubernetes at the core. A lot of people like calling it the Kubernetes stack or the CNCF stack. Is it really a stack, is it really more of an operating model because there's stacks involved but how do you describe it, because this is a point of clarification. I mean, Kubernetes isn't necessarily a stack. Is it, how do people use it, what's the current state? >> I think when people say stack, you think about the LAMP stack, right? Linux, Apache, MySQL, it's a way of pre-packaging these ideas. This is something that worked for me, it may work for you, you say that enough times and then you say things like the Kubernetes stack. It's a quick, shorthand for Kubernetes and building on top of it. I think from the engineering perspective, when you look at Kubernetes and all the gaps that the CNC app is trying to fill these days, it's all this stuff you're probably building yourself, someone else is building it, and now we kind of have an outlet now. If you're working on a service mesh like list was, you have an outlet to give it to the rest of the world, open governance, and get some contributors. I think what we're seeing now is that hey, CNCF is kind of the place people go to figure out is someone building the thing that I've already started building and can I stop and just download that and go off? >> It's been very successful open source community, obviously, it's been end user leverage, it's been great and it's been open source, community led. Not so much vendor led, but vendors have been participating, so it's been great, but now as Kubernetes is going mainstream, the rise of Kubernetes is undeniable. No one can really deny that. Other end users are now coming in either to participate or to consume Kubernetes. How is that going in your mind? What's going on in the landscape, because people want multicloud, they want hybrid, they want choice. How are end users coming into the ecosystem to consume Kubernetes and the variety of goodness around it and what's going on there? Can you give some color around that option? >> I think regardless of the industry buzzwords like multicloud and hybrid and all that, Kubernetes is good on its own. It solves a lot of problems that your previous tools didn't solve, so people are gravitating towards it regardless in that direction. When you start to talk about portability, yes, it's nice to have two different environments and have the same tools work in a similar way between those environments, that's working well. The people that started three years ago that were doing it themselves, they're finding value and treating that as a service. We saw this happen to DNS, e-mail, so people are saying maybe the value isn't running it myself, so now you kind of see the vendor ecosystem understand what the value is. For a lot of the cloud providers, it's running Kubernetes, patching it, updating it, upgrading it, so that you can go focus on the other parts on top. That's where I think we are as an industry, and then there's gaps to fill, so that's where you see things like native, people building CI-CD tools on top, that's just where the new opportunities are so I think we've kind of matured. People kind of know what Kubernetes is, they know where their value line is for Kubernetes, now they're looking for their partners or vendors or community to just layer the new stuff on top. >> Kelsey, you bring up a great point there because understanding that line of what I should do myself and what I have to do versus what I can buy, consume as a service, is really tough for people, you know. I always say, ask IT departments, what do you really suck at? Because there's somebody else that probably does it better. A year ago, when I talked to users at this show, they were really downloading stuff, putting their things together, and when you asked them why, it was well, the Azure stuff hasn't matured. It just released, Amazon, I'm not sure where they're going with it. It feels like a lot has changed in the last year. You did Amazon the hard way a little over a year ago. What has changed over the last year, you know. >> We saw this with Linux, right? >> Are we ready for that, yeah. >> In Linux everyone use to build their own Linux distro, you took pride in it, using Gentoo and Slackware, and then you're like, I'm tired of that so you go get Red Hat or Ubuntu and call it good, and then you go focus on the other things. Naturally, Kubernetes is early project, has lots of gaps, you can fill those gaps by gluing together open source yourself, but now most of the managed services fill in the gaps by default. You click a button in GKE and a thing comes up, it's secure, has most of the pieces you need, it's integrated, you're like alright, I'm done with that part. >> The other thing, we talked a year ago. There's lots of companies here that are involved in Kubernetes. We've got over 70 that are compliant, and then you've got the service providers. From what I hear, it's people aren't trying to differentiate with Kubernetes and that's probably a good thing. It's something that's going to be baked into the platform, it's something you're going to consume with the other services that I offer, what do you say? >> If you make it different, then it won't work. >> Right. >> It'll be a different thing, so if you make it too different then you lose most of the benefits that we're all talking about here. The ability to learn a set of abstractions once, kind of like we did on Linux, if you start changing the system calls on Linux, then it's not Linux anymore, it's a different thing. >> Just to clarify though, if I'm running in one cloud that has their Kubernetes and I want to go to another, is it similar enough? Can I make that move? Do I need a vendor-independent version? >> So I think up to this value line I've run this container, ship the log somewhere, give me a way to secure access, that's pretty standard. Give me a load balancer. What isn't standard is how do I do CI-DC on top of that, that's not standard. There's different opinions on how to do that. If I'm in Google Cloud, we have IEM one way, Azure has IEM a different way, and same thing for Amazon. There's things around networking, security, that are going to be different based on the environment you're in. Same for on-prem, and that's where you start to look for help. If I go to Google, I'm going to use GKE maybe instead of running it myself on just a bunch of VMs, so that's where you kind of see that little divide. >> Is that going to be custom work, that's a great point, security for instance, we'll just pull that out there. Is that going to automate and be seamless or is that going to be a work area that's always going to have to be differentiated or coded or? >> So for example, we have the big vulnerability recently in Kubernetes world, right? >> It's a big CVE, it affected everyone running Kubernetes. That's a thing, as a vendor, for us GKE people, we upgraded automatically for them and said hey, there's a CVE, it's going to be really scary when you read about it but hey, you're patched. We've taken care of you, so I think people will still look for that relationship. Will it always be custom? At the app level, that is a different story. When you run your container and you want to access the things in your environment, so if you're in Google Cloud you may want to talk to Spanner, you're going to need an IEM set of credentials. That's a little out of scope of Kubernetes, so that's going to be integration work that the provider will do. >> So the holy trinity of computing industry has always been storage, network, and compute, and it changes certainly with cloud and all the goodness that comes out from serverless and whatnot, so containers is interesting. We always love containers but I've heard conversations recently where it's like hey, I want to treat containers not as a first class citizen because it doesn't meet my security boundary. I'm going to put a VM around that and run that under the covers with say, Lambda. Is that feasible, is than an option? I've heard talk about it, is anyone doing that? Is that an alternative, is this going to introduce new elements? >> Let's put it right, in Kubernetes by defaults we chose to build on top of Docker. Industry momentum, great developer workflow, but you're right, it made a security trade off. We know VMs are a much tighter security boundary that people are comfortable with. In that world, at that time, they were too slow for what we needed to happen. Thanks to Intel and others who pulled the thread of let's make VMs faster. Recently you heard the announcement of Firecracker, right, it's part of a derivative from the Chrome VM and that thing is optimized for these kinds of workloads, containers and serverless workloads. Now we go from 10, 20 seconds to hundred milliseconds. Now it makes sense to probably have this become an underlying thing. Now that we have the speed, maybe people say hey, we can maybe take the security without sacrificing the performance. >> That's the trade off. >> Pulled on the thread, you mentioned Firecracker. There's still this tension between what's happening in Kubernetes and serverless. We saw Knative is a hot topic point. It's probably natural that there's some tension there because it's like oh wait, why do you need to learn any of this stuff because if serverless will just make it as a service and make it easy and you don't need to learn all that container stuff and everything, what do you say? >> If you're a Kubernetes user, if you really think about the very broad definition of serverless, meaning I'm not managing the database, I'm using a managed database, serverless database. Storage, I'm using S3 or Google Cloud storage, serverless. Your load balancer, also serverless. So most people in the Kubernetes ecosystem, networking, serverless, storage, serverless, their database, serverless. The only thing that you can say isn't serverless is this compute component, everything else is. Now people are looking at serverless as this spectrum. How serverless are you? If you're on-prem and you buy a server and you rack it and install Kubernetes, you're less serverless, you're probably not serverless at all, no matter what you do. Now, if you put a lot of work in, you can probably put a serverless interface on top. This is what native is designed to do for people. Maybe you have an organization that supports multiple businesses inside of your org. They may not know anything about Kubernetes. You just tell them hey, put your code here, it will run, oh, that feels serverless. You can provide a serverless experience. The delta then becomes what can we do between a container and a function, so the foundation of my keynote is exactly that. What does it mean to take a container and put it into Lambda? What do you have to change? In my presentation, I don't even read write the code. There's a small shim between the two worlds because you're already using managed services around it. We're not talking about throwing away Kubernetes and then starting over our entire architecture. We're swapping out the compute layer. One is a subset of the other. Lambda is about events and functions, Kubernetes is about container and run it however you want. You want to run it when an event comes in, that's native. You want to run it as a batch job, run it as a job. You want to run it as a long running service, run it as a deployment, so that's all we're really talking about here. When we break it down, you're just talking about compute. >> You talk a lot about automation in the CI-CD areas, that differentiation where the value is. In a world as automation goes faster, what does Kubernetes look like when it becomes automated away? Because I don't want to manage anything, why even have managed Kubernetes? It should just automatically, you mentioned the patching. In an automated world, is Kubernetes just running under the covers, how does Kubernetes look down the road in your mind, in terms of when automation comes in? >> I've been in this game maybe over 15 years and one thing holds true: most developers want to focus on the business logic. We hire them because that's their skillset. When they check in code, it would be really nice if you can take it from there and get it where it needs to be. That's been the holy grail. We see it in mobile, you build an app, you put it on the App Store, Apple gets it to every device on the planet, done. Now it's the server side turn to do this. Whether you're doing serverless functions, Kubernetes, VMWare, or Linux, if you have CI-CD in front of any of that, the developer can still have the same experience. I check in code and you're picking a different deploy target. If you did that five years ago, and you understood it, and you were using, let's say maybe Mesos or just VMs, you bring in Kubernetes, you don't even have to change this part of the equation. This is why I tell most people, just focus on this endgame. My keynote last year was about this is the endgame because this is your coacher, this is your change management process, this is your discipline, and this is just a target where that compute goes. >> Alright, we've got two minutes left. I want to get your thoughts and share with the audience who's not here, a big waiting list, I know there's some lobby con going on all around Seattle, people flew in. Great place too to actually have some good lobby con meetings around the lobby area. So what's happening here, in your mind's eye, now you're not in the throes of all the events, you're kind of in the wild here with us, everyone else. What's the top story, what's going on, what's the vibe, what are you extracting out of all this activity as a top story, top level stories here? >> I think everyone's finding their place. If you're a security vendor, you kind of know where your line is, right? I've got this Twistlock shirt on. They want to plan a world where they need to integrate closer to the developer workflow, not just on the infrastructure side. If you're selling load balancers, service mesh is a thing, where do you fit in? The lines are getting a lot clearer. Kubernetes is starting to say maybe we should stop here. Maybe service measures should take it from here and that's where Istio comes in. Traditional vendors can now play in this well-defined space. On the storage side, what are you integrating? Now we have the storage interface, like the container storage interface. Now, if you're a net app, you know where you fit into the puzzle. You don't need to have your own Kubernetes distro. Two years ago, everyone was trying to come out with their own Kubernetes distro so they can actually have an anchor. Now you're like, ah, now I know where to play and now we also know what's missing. After years of doing this, people look back and say there's a lot of stuff missing. It's OK now to go create something new. >> It's a clear visibility into the landscape. What about the impact to end users? What is notable in your mind in terms of highlights, impact to end user organizations really going through this quote digital transformation, which is very cloud-based of course, but they're certainly changing and impacting, what's your thoughts on the end user? >> We're using some of the same words now. Forget the technology piece, now we can all start to talk about the same things, so when we say container, we kind of now are talking about the same thing. When we start to talk about sidecars, whether that's a service mesh, Envoy sidecar, or something that adapts your existing code to the new world, now that we're using the same language, we can actually talk. Traditional enterprise can talk to the startups and have a meaningful conversation. >> That's awesome, any other observations here in terms of the size of the show? Got a lot more activity, feels a little bit like re:Invent, I'm bumping into people, swimming through the crowds, the swag's hot. >> It's 8,000 people here and it feels like there's more users that know nothing about Kubernetes so even though we're about five years in, it reminds me of when we were just getting started. >> Lot more work to do but great, congratulations on all the work you've done Kelsey. Really appreciate you taking the time every year to come on theCUBE. We love having you on, great commentary, great keynotes, very entertaining. Thanks for coming on, appreciate it. >> Awesome, thank you. >> I'm John Furrier, Cube here with Kelsey Hightower telling us about all the breakdown of KubeCon, CloudNativeCon, the beginning of the cloud tsunami is happening, certainly changing businesses, changing open source, it's changing, it's on a global scale. We're here with coverage for three days. We'll be right back with more after this short break.

(lively orchestral music) >> Hello, everyone. Welcome to this special CUBE Conversation. We're here in Palo Alto, California, theCUBE headquarters. I'm John Furrier, the cofounder of SiliconANGLE Media, cohost of theCUBE. We're here with fellow cloud influencer, friend of theCUBE, Sarbjeet Johal, who's always on Twitter. If you check out my Twitter stream, you'll find out we've always got some threads. He's always jumping in the CrowdChat and I think was in the leaderboard for our last CrowdChat on multi-cloud Kubernetes. Thanks for coming in. >> Yeah, thank you for having me here. >> Thanks for coming in. So you're very prolific on Twitter. We love the conversations. We're gettin' a lot of energy around some of the narratives that have been flowing around, obviously helped this week by the big news of IBM acquiring Red Hat for, what was it, 30, what was the number, 34? >> 34, yeah. >> $34 billion, huge premium, essentially changing the game in open source, some think, some don't, but it begs the question, you know, cloud obviously is relevant. Ginni Rometty, the CEO of IBM, actually now saying cloud is where it's at, 20% have been on the cloud, 80% have not yet moved over there, trillion-dollar market which we called, actually, I called, a few years ago when I wrote my Forbes story about Amazon, the Trillion Dollar Baby I called it. This is real. >> Yeah. So apps are moving to the cloud, value for businesses on the cloud, people are seeing accelerated timelines for shipping. Software. >> Yeah. >> Software offer is eating the world. Cloud is eating software, and data's at the center of it. So I want to get your thoughts on this, because I know that you've been talking a lot about technical debt, you know, the role of developer, cloud migration. The reality is, this is not easy. If you're doin' cloud native, it's pretty easy. >> Still pretty easy, yeah. >> If that's all you got, right, so if you're a startup and/or built on the cloud, you really got the wind at your back, and it's lookin' really good. >> Yeah. >> If you're not born in the cloud, you're an IT shop, they've been consolidating for years, and now told to jump to a competitive advantage, you literally got to make a pivot overnight. >> Yeah, actually, at high level, I think cloud consumption you can divide into two buckets, right? One is the greenfield which, as you said, it's not slam dunk, all these startups are born in cloud, and all these new projects, systems of innovation what I usually refer to those, are born in cloud, and they are operated in cloud, and at some point they will sort of fade away or die in cloud, but the hard part is the legacy applications sitting in the enterprise, right? So those are the trillion dollar sort of what IBM folks are talking about. That's a messy problem to tackle. Within that, actually, there are some low-hanging fruits. Of course, we can move those workloads to the cloud. I usually don't refer the application, the workloads as applications because people are sort of religiously attached to the applications. They feel like it's their babies, right? >> Yeah. >> So I usually say workload, so some workloads are ripe for the cloud. It's data mining, BI, and also the AI part of it, right? So but some other workloads which are not right for the cloud right now or they're hard to move or the ERP system, systems of record and systems of engagement or what we call CRMs and marketing sort of applications which are legacy ones. >> Yeah, hard-coded operationalized software frameworks and packages and vendors like Oracle. >> Yes. >> They're entrenched. >> Oracle SAP, and there's so many other software vendors that have provided tons of software to the data centers that they're sitting there, and the hard part is that nobody wants to pull the plug on the existing applications. I've seen that time and again. I have done, my team has done more than 100 data center audits from EMC and VMware days. We have seen that time and again. Nobody wants to pull the plug on the application. >> 'Cause they're runnin' in production! (laughs) >> They are running in production. And it's hard to measure the usage of those applications, also, that's a hard part of the sort of old stack, if you will. >> Yeah. So the reality is, this is kind of getting to the heart of what we wanted to talk about which is, you know, vendor hype and market realities. >> Yeah. >> The market reality is, you can't unplug legacy apps overnight, but you got a nice thing called containers and Kubernetes emerging, that's nice. >> Yeah. >> Okay, so check, I love that, but still, the reality is, is okay, then who does it? >> Yeah. >> Do I add more complexity? We just had Jerry Chen and hot startup Rockset on, they're trying to reduce the complexity by just having a more simple approach. This is a hard architectural challenge. >> It is. >> So that's one fundamental thing I want to discuss with you. And then there's the practical nature of saying assuming you get the architecture right, migrating and operating. Let's take those as separate, let's talk architecture, then we'll talk operating and migrating. >> Okay. >> Architecturally, what do people do, what are people doing, what you're seeing, what do you think is the right architecture for cloud architects, because that's a booming position. >> Yeah. >> There's more and more cloud architects out there, and the openings for cloud architects is massive. >> Yeah, I think in architecture, the microservices are on the rise. There are enabling technologies behind it. It doesn't happen sort of magically overnight. We have had some open source sort of development in that area the, the RESTful APIs actually gave the ports to the microservices. Now we can easily inter-operate between applications, right? So and our sort of, sorry I'm blanking out, so our way to divide the compute at the sort of micro-chunks from VM, virtual machine, to the container to the next level is the serverless, right? So that is giving ports to the microservices, and the integration technologies are improving at the same time. The problem of SEL lies in the data, which is the storage part and the data part and the network, and the network is closely associated with security. So security and network are two messy parts. They are in the architecture, even in the pure cloud architecture in the Kubernete world, those are two sort of hard parts. And Cisco is trying to address the network part. I speak, I spoke to some folks there, and what they are doing in that space, they are addressing the network and SCODI part, sort of deepening-- >> And it's a good time for them to do that. >> Yeah. >> Because, I mean, you go back, and you know, we covered DevNet Create, which is Susie Wee, she's a rising star at Cisco, and now she's running all of DevNet. So the developer network within Cisco's has a renaissance because, you know, you go back 20 years ago, if you were a network guy, you ran the show, I mean, everything ran the network. The network was everything. The network dictated what would happen. Then it kind of went through a funk of like now cloud native's hot and serverless, but now that programability's hitting the network because remember the holy trinity of transformation is compute, storage, and networking. (laughs) >> Yeah. >> Those aren't going away. >> Yeah, they aren't going away. >> Right, so networking now is seeing some, you know, revitalization because you can program it, you can automate it, you can throw DevOps to it. This is kind of changing the game a little bit. So I'm intrigued by the whole network piece of it because if you can automate some network with containers and Kubernetes and, say, service meshes, then it's become programmable, then you can do the automation, then it's infrastructure, it's code. >> Yeah, exactly. >> Infrastructure is code. It has to cover all three of those things. >> That is true, and another aspect is that we talk about multi-cloud all the time, which Cisco is focusing on also, like IBM, like VMware, like many other players who talk about multi-cloud, but problem with the multi-cloud right now is that you cannot take your security policies from one cloud provider to another and then just say, okay, just run there, right? So you can do the compute easy, containers, right, or Kubernetes are there, but you can't take the network as is, you cannot, you can still take the storage but not storage policies, so the policy-driven computing is still not there. >> Yeah. >> So we need, I think, more innovation in that area. >> Yeah, there's some technical issues. I talk a lot of startups, and they're jumpin' around from Azure to Amazon, and everyone comes back to Amazon because they say, and I'm not going to name names, but I'll just categorically say with what's going on is when they get to Microsoft and Oracle and IBM, the old kind of guards is they come in and they find that they check the boxes on the literature, oh, they do this, that, and that, but it's really just a lot of reverse proxies, there's a lot of homegrown stuff in there-- >> Yeah. >> That are making it work and hang together but not purely built from the ground up. >> Exactly, yeah, so they're actually sort of re-bottling the old sort of champagne kind of stuff, like they re-label old stuff and put layers of abstraction on top of it and that's why we're having those problems with the sort of legacy vendors. >> So let's get into some of the things that I know you're talking about a lot on Twitter, we're engaging on with with the community is migration, and so I want to kind of put a context to the questions so we can riff together on it. Let's just say that you and I were hired by the the CIO of a huge enterprise, financial services, pick your vertical. >> Yeah. >> Hey, Sarbjeet and John, fix my problems, and they give us the keys to the kingdom, bag of money, whatever it takes, go make it happen. What do we do, what's the first things that we do? Because they got a legacy, we know what it looks like, you got the networks, you're racking stack, top-of-rack switches, you got perimeter-based security. We got to go in and kind of level the playing field. What's our strategy, what do we what do we recommend? >> Yeah, the first thing first, right? So first, we need to know the drivers for the migration, right, what is it? Is it a cost-cutting, is it the agility, is it mergers and acquisitions? So what are the, what is the main driver? So that knowing that actually will help us like divvy up the problem, actually divide it up. The next thing, the next best practice is, I always suggest, I've done quite a few migrations, is that do the application portfolio analysis first. You want to find that low-hanging fruit which can be moved to the cloud first. The reason, main reason behind that is that your people and processes need to ease into using the cloud. I use consumption term a lot, actually on Twitter you see that, so I'm a big fan of consumption economics. So your people and processes need to adapt, like your change control, change management, ITSM, the old stuff still is valid, actually. We're giving it a new name, but those problems don't go away, right? How you log a ticket, how you how the support will react and all that stuff, so it needs to map to the cloud. SLA is another less talked about topic in our circles on Twitter, and our industry partners don't talk about, but that's another interesting part. Like what are the SLAs needed for, which applications and so forth. So first do the application profiling, find the low-hanging fruit. Go slow in the beginning, create the phases, like phase one, phase two, phase three, phase four. And it also depends number, on the number of applications, right? IBM folks were talking about that thousand average number of applications per enterprise. I think it's more than thousand, I've seen it. And that, just divvy up the problem. And then another best practice I've learned is migrate as is, do not transform and migrate, because then you're at, if something is not working over there or the performance problem or any latency problem, you will blame it on your newer architecture, if you will. Move as is, then then transform over there. And if you want me to elaborate a little more on the transformation part, I usually divide transformation into three buckets, actually this is what I tell the CIOs and CTOs and CEOs, that transformation is of three types. Well, after you move, transformation, first it is the infrastructure-led transformation. You can do the platforming and go from Windows to Linux and Linux to AIX and all that stuff, like you can go from VM to container kind of stuff, right? And the second is a process-led transformation, which is that you change your change control, change management, policy-driven computing, if you will, so you create automation there. The third thing is the application where you open the hood of the application and refactor the code and do the Web service enablement of your application so that you can weave in the systems of innovation and plug those into the existing application. So you want to open your application. That's the whole idea behind all this sort of transformation is your applications are open so you can bring in the data and take out the data as you weave. >> From your conversations and analysis, how does cloud, once migrations happen in cloud operations, how does that impact traditional network, network architecture, network security, and application performance? >> On the network side, actually, how does it, let me ask you a question, what do you mean by how does it-- >> In the old days, used a provisional VLAN. >> The older stuff? >> So I got networks out there, I got a big enterprise, okay, we know how to run the networks, but now I'm movin' to the cloud. >> Yeah. >> I'm off premises, I'm on premise, now I'm in the cloud. >> Yeah. >> How do I think about the network's differently? Whose provisioning the subnets, who's doing the VPNs? You know, where's the policy, all these policy-based things that we're startin' to see at Kubernetes. >> Yeah. >> They were traditionally like networks stuff-- >> You knew what it was. >> That's now happening at the microservices level. >> Yeah. >> So new paradigm. >> The new paradigm, actually, the whole idea is that your network folks, your storage folks, your server folks, like what they were used to be in-house, they need to be able to program, right? That's the number one thing. So you need to retrain your workforce, right? If you don't have the, you cannot retrain people overnight, and then you bring in some folks who know how to program networks and then bring those in. There's a big misconception about, from people, that the service, sorry, the service provider, which is called cloud service provider, is it responsible for the security of your applications or for the network, sort of segmentation of your network. They are not, actually, they don't have any liability over security if you read the SLAs. It's your responsibility to have the sort of right firewalling, right checks and balances in place for the network for storage, for compute, right policies in place. It's your responsibility. >> So let's talk about the, some tweets you've been doin' 'cause I've been wanting to pull the ones that I like. You tweeted a couple days ago, we don't know how to recycle failed startups. >> Yeah. (chuckles) >> Okay, and I said open source. And you picked up and brought up another image, is open source a dumping ground for failed startups? And it was interesting because what I love about open source is, in the old days of proprietary software, if the company went under, the code went under with it, but at least now, with open source, at least something can survive. But you bring up this dumping concept, that also came up in an interview earlier today with another guest which was with all this contribution coming in from vendors, it's almost like there's a dumping going on into open source in general, and you can't miss a beat without five new announcements per day that's, you know, someone's contributing their software from this project or a failed, even failed startup, you know, last hope, let's open source it. Is that good or bad, I mean, what's your take on that, what was your posture or thinking around this conversation? It is good, is it bad? >> Yeah, I believe it's, it's a economic problem, economics thing, right? So when somebody's like proprietary model doesn't work, they say, okay, let me see if this works, right? Actually, they always go first with like, okay let me sell-- >> Make money. >> Let me make money, right? A higher margin, right, everybody loves that, right? But then, if they cannot penetrate the market, they say, okay, let me make it open source, right? And then I will get the money from the support, or my own distro, like, distros are a big like open source killer, I said that a few times. Like the vendor-specific distributions of open source, they kill open source like nothing else does. Because I was at Rackspace when we open-sourced OpenStack, and I saw what happened to OpenStack. It was like eye-opening, so everybody kind of hijacked OpenStack and started putting their own sort of flavors in place. >> Yeah, yeah, we saw the outcome of that. >> Yeah. >> It niched into infrastructures of service, kind of has a special purpose-built view. >> And when I-- >> And that it comes cloud native didn't help either. Cloud grew at that time, too, talking about the 2008 timeframe. >> Yeah, yeah, and exactly. And another, why I said that was, it was in a different context, actually, I invested some money into an incubator in Berkeley, The Batchery, so we have taken what, 70-plus startups through that program so far, and I've seen that pattern there. So I will interview the people who want to bring their startup to our incubator and all that, and then after, most of them fail, right? >> Yeah. >> They kind of fade away or they leave, they definitely leave our incubator after a certain number of weeks, but then you see like what happens to them, and now also living in the Valley, you can't avoid it. I worked with 500 Startups a little bit and used to go to their demo days from the Rackspace days because we used to have a deal with them, a marketing deal, so the pattern I saw that was, there's a lot of innovation, there was a lot of brain power in these startups that we don't know what, these people just fade away. We don't have a mechanism to say, okay, hey you are doing this, and we are also doing similar stuff, we are a little more successful than, let's merge these two things and make it work. So we don't know how to recycle the startups. So that's what was on it. >> It's almost a personal network of intellectual capital. >> Yeah. >> Kind of, there needs to be a new way to network in the IP that's in people's heads. Or in this case, if it's open source, that's easy there, too, so being inaccessible. >> So there's no startup, there's no Internet of startups, if you will. >> Yeah, so there's no-- >> Hey, you start a CUBE group. (Sarbjeet laughing) You'll do it, start a CrowdChat. All right, I want to ask you about this consumption economics. >> Yeah. >> I like this concept. Can you take a minute to explain what you mean by consumption economics? You said you're all over it. I know you talk a lot about it on Twitter. >> Yes. >> What is it about, why is it important? >> Actually, the pattern I've seen in tech industry for last 25, 24 years in Silicon Valley, so the pattern I've seen is that everybody focuses on the supply side, like we do this, we like, we're going to change the way you work and all that stuff, but people usually do not focus on the consumption side of things, like people are consuming things. I'm a great fan of a theory called Jobs to Be Done theory. If you get a time, take a look at that. So what jobs people are trying to do and how you can solve that problem. Actually, if you approach your products, services from that angle, that goes a long way. Another aspect I talk about, the consumption economics, is age of micro-consumption, and again, there are reasons behind it. The main reason is there's so much thrown at us individually and and also enterprise-wise, like so much technology is thrown at us, if we try to batch, like if were ready to say, okay, we're not going to consume the technology now, and we're going to do every six months, like we're going to release every six months, or new software or new packages, and also at the same time, we will consume every six months, that doesn't work. So the whole notion when I talk about the micro-consumption is that you keep bringing the change in micro-chunks. And I think AWS has mastered the game of micro-supply, as a micro-supplier of that micro-change. >> Yeah. >> If you will. So they release-- >> And by the way, they're very customer-centric, so listening to the demand side. >> Exactly. So they kind of walk hand in hand with the customer in a way that customer wants this, so they're needing this, so let us release it. They don't wait for like old traditional model of like, okay, every year there's a new big release and there are service packs and patches and all that stuff, even though other vendors have moved along the industry. But they still have longer cycles, they still release like 10 things at a time. I think that doesn't work. So you have to give, as a supplier, to the masses of the workers of the world in HPs and IBMs, give the change in smaller chunks, don't give them monolithic. When you're marketing your stuff, even marketing message should be in micro-chunks, like or even if you created like five sort of features and sort of, let's, say in Watson, right, just give them one at a time. Be developer-friendly because developers are the people who will consume that stuff. >> Yeah, and then making it more supply, less supply side but micro-chunks or microservices or micro-supply. >> Yeah. >> Having a developer piece also plays well because they're also ones who can help assemble the micro, it's in a LEGO model of composeability. >> Yeah, exactly. >> And so I think that's definitely right. The other thing I wanted to get your thoughts on is validated by Jerry Chen at Greylock and his hot startups and a few others is my notion of stack overhaul. The changes in the stack are significant. I tweeted, and you commented on it, on the Red Hat IBM deal 'cause they were talkin' about, oh, the IBM stack is going to be everywhere, and they're talking about the IBM stack and the old full-stack developer model, but if you look at the consumption economics, you look at horizontally scalable cloud, native serverless and all those things goin' on with Kubernetes, the trend is a complete radical shifting of the stack where now the standardization is the horizontally scalable, and then the differentiations at the top of the stack, so the stack has tweaked and torqued it a little bit. >> Yeah. >> And so this is going to change a lot. Your thoughts and reaction to that concept of stack, not a complete, you know, radical wholesale change, but a tweak. >> Actually our CTO at Rackspace, John Engates, gave us a sort of speech at one of the kind of conferences here in Bay Area, the title of that was Stack, What Stack, right? So the point he was trying to make was like stack is like, we are not in the blue stack, red stack anymore, so we are a cross-stack, actually. There are a lot of the sort of small LEGO pieces, we're trying to put those together. And again, the reason behind that is because there's some enabling technology like Web services in RESTful APIs, so those have enabled us to-- >> And new kinds of glue layers, if you will. >> Yeah, yeah. >> Abstraction layers. >> Yeah, I call it digital glue. There's a new type of digital glue, and now we have, we are seeing the emergence of low code, no code sort of paradigms coming into the play, which is a long debate in itself. So they are changing the stack altogether. So everything is becoming kind of lightweight, if you will, again-- >> And more the level of granularity is getting, you know, thinner and thinner, not macro. So you know, macroservices doesn't exist. That was my, I think, my tweet, you know, macroservices or microservices? >> Yeah. >> Which one you think's better? And we know what's happening with microservices. That is the trend. >> That is the trend. >> So that is that antithesis of macro. >> Yeah. >> Or monolithic. >> Yeah, so there's a saying in tech, actually I will rephrase it, I don't know exactly how that is, so we actually tend to overestimate the impact of a technology in the short run and underestimate in the long term, right? So there's a famous saying somebody, said that, and that's, I think that's so true. What we actually wanted to do after the dot-com bust was the object-oriented, like the sort of black box services, it as, we called them Web services back then, right? >> Yeah. >> There were books written by IBM-- >> Service-oriented architecture-- >> Yeah, SOA. >> Web services, RSS came out of that. >> Yes. >> I mean, a lot of good things that are actually in part of what the vision is happening today. >> It's happening now actually, it just happening today. And mobile has changed everything, I believe, not only on the consumer side, even on the economic side. >> I mean, that's literally 16, 17 years later. >> Yes, exactly, it took that long. >> It's the gestation period. >> Yes. >> Bitcoin 10 years ago yesterday, the white paper was built. >> Yeah. >> So the acceleration's certainly happening. I know you're big fan of blockchain, you've been tweeting about it lately. Thoughts on blockchain, what's your view on blockchain? Real, going to have a big impact? >> I think it will have huge impact, actually. I've been studying on it, actually. I was light on it, now I'm a little bit, I'm reading on it this and I understand. I've talked to people who are doing this work. I think it will have a huge impact, actually. The problem right now with blockchain is that, the speed, right? >> It's slow, yeah. So yeah, it's very slow, doc slow, if you will. But I think that is a technical problem, we can solve that. There's no sort of functional problem with the blockchain. Actually, it's a beautiful thing. Another aspect which come into play is the data sovereignty. So blockchains actually are replicated throughout the world if you want the worldwide money exchange and all that kind of stuff going around. We will need to address that because the data in Switzerland needs to sit there, and data in the U.S. needs to stay in the U.S. That blockchain actually kind of, it doesn't do that. You have a copy of the same data everywhere. >> Yeah, I mean, you talk about digital software to find money, software to find data center. I mean, it's all digital. I mean, someone once said whatever gets digitized grows exponentially. (Sarbjeet laughing) Oh, that was you! >> Actually I-- >> On October 30th. >> That was, that came from a book, actually. It's called Exponential Organizations. Actually, they're two great books I will recommend for everybody to read, actually there's a third one also. So (laughs) the two are, one is Exponential Organizations. It's a pretty thin book, you should take, pick it up. And it talks about like whatever get digitized grows exponentially, but our organizations are not, like geared towards handling that exponential growth. And the other one is Consumption Economics. The title of the book is Consumption Economics, actually. I saw that book after I started talking about it, consumption economics myself. I'm an economics major, actually, so that's why I talk about that kind of stuff and those kind comments, so. >> Well, and I think one of the things, I mean, we've talked about this privately when we've seen each other at some of theCUBE events, I think economics, the chief economic officer role will be a title that will be as powerful as a CSO, chief security officer, because consumption economics, token economics which is the crypto kind of dynamic of gamification or network effects, you got economics in cloud, you got all kinds of new dynamics that are now instrumented that need, that are, they're throwin' off numbers. So there's math behind things, whether it's cryptocurrency, whether it's math behind reputation, or any anything. >> Yeah. >> Math is driving everything, machine learning, heavy math-oriented algorithms. >> Yeah, actually at the end of the day, economics matters, right? That's what we are all trying to do, right? We're trying to do things faster cheaper, right? That's what automation is all about. >> And simplifying, too. >> And simplifying service. >> You can't throw complexity in, more complexity. >> Yeah. >> That's exponential complexity. >> Sometimes while we are trying to simplify things, and I also said, like many times the tech is like medicine, right? I've said that many times. (laughs) Tech is like medicine, every pill has a side effect. Sometimes when we are trying to simplify stuff, we add more complexity, so. >> Yeah. What's worse, the pain or the side effects? Pick your thing. >> Yeah, you pick your thing. And your goal is to sort of reduce the side effects. They will be there, they will be there. And what is digital transformation? It's all about business. It's not, less about technology, technology's a small piece of that. It's more about business models, right? So we're trying to, when we talk about micro-consumption and the sharing economy, they're kind of similar concepts, right? So Ubers of the world and Airbnbs all over the world, so those new business models have been enabled by technology, and we want to to replicate that with the medicine, with the, I guess, education, autos, and you name it. >> So we obviously believe in microcontent at theCUBE. We've got the Clipper tool, the search engine. >> I love that. >> So the CUBEnomics. It's a book that we should be getting on right away. >> Yeah, we should do that! >> CUBEnomics. >> CUBEnomics, yeah. >> The economics behind theCUBE interviews. Sarbjeet, thank you for coming on. Great to see you, and thank you for your participation-- >> Thanks, John. >> And engagement online in our digital community. We love chatting with you and always great to see you, and let's talk more about economics and digital exponential growth. It's certainly happening. Thanks for coming in, appreciate it. >> It was great having, being here, actually. >> All right, the CUBE Conversation, here in Palo Alto Studios here for theCUBE headquarters. I'm John Furrier, thanks for watching. (lively orchestral music)

(enlightening music) >> Hello everyone, I'm John Furrier here at theCUBE headquarters in Palo Alto, California, for a special CUBE Conversation. I'm the host of theCUBE here with my special guest, Monica Kumar, vice president of Oracle Cloud platform. Monica, thanks for joining me today. >> Thank you so much for having me. >> So Oracle Cloud has got some great stuff goin' on, one of the things I'm most intrigued about, I've heard a lot about, is this autonomous database. I have a lot of questions, want to dig into it and really unpack that, so first take a minute to explain, what is the autonomous database? >> You know, before I do that, John, can I ask you a question? >> Sure! >> You use a smartphone, right? >> Yep. >> Do you know what happens every minute of when we use a smartphone and use the internet, how much data gets generated? >> No. >> Okay, I'm going to tell you. >> Alright, good. >> 16 million text messages happen every single minute, about four million Google searches, we're talking four million YouTube videos watched, about a million Facebook pages are open, and half a million Tweets. Now think about the impact of all this data in just one minute. Somebody, somewhere, is finding this data useful, and can actually extract some value out of it. Now, you might have heard this also, that in the last two years, the world's 90 percent of data has actually been created, and it's doubling every two years. >> So my kid's LTE bill, that's why, they're watching Netflix, that's why I'm paying all this extra bandwidth. (laughs) This is a real world. I mean, I can imagine my iPhone, I got multiple apps on there, lot of power being used, but that's just one piece, like when I'm buying with Apple Pay, or I'm doing things around, there's a lot of mobility involved, what's the value of all this? >> Well see, there's also a lot of devices, I mean we talk about IoT. By the year 2021, or in about the next five years, there'll be 50 billion devices that will be collecting data, analyzing data, sharing data. So what we're talking about is the sheer volume of the data that's being generated. And ultimately, every organization is trying to figure out how to extract insights from this data, how to make their businesses run better because of those insights. Whether create new revenue streams, maybe optimize for efficiency, deliver better customer services. So that is the problem we are dealing with today is, how do we get more value out of that data? >> So how does it all work, I mean autonomous driving, you see cars around, Uber's been trying to do it, other people have fleets, cars all over the place. Autonomous database, I mean it sounds like it's self-driving, which implies that's what cloud is all about, automation. How does the check work, what's goin' on under the hood? >> Yeah so let me explain to you, I mean this is where Oracle comes in. We've been in the data and information business for over four decades. This is what we've done. We've actually been solving the hard problem for our customers when it comes to data management, and using data. And now with this new whole deluge of more and more data, who better than Oracle to solve this problem? And one of the more important ways in which we can solve this problem is by automation, is by the use of machine learning. So that's where we're moving as a company, is you're moving to adopt and embed more and more machine learning across our entire cloud portfolio. And one of the biggest things we're doing is what you're talking about, autonomous database, which is exactly that, it's combining machine learning with the decades and decades of the database optimizations that we've been putting out in the industry. It's the power of that combination, which has culminated into what we call autonomous database today. >> Is autonomous database on-premises and Cloud, or both, how does that work? >> Yes, Oracle's always been about choice, so definitely it's both. And I'll explain to you the cloud offering, in fact, you eluded to self-driving cars. It's very similar to that. So there are three core attributes of autonomous database. It's self-driving, self-securing, and self-repairing, and let me explain to you what I mean by each of those. So self-driving is really the database provisioning itself, upgrading itself, patching, tuning, monitoring, backing up, all of the functions that are very manual today, are all done by autonomous database itself, so that's the self-driving part. Self-securing, applying all of the security patches by itself so the user doesn't have to worry about it. And the self-repairing is really focused on maximizing uptime, productivity. So today we offer with autonomous 99.995 percent uptime, which means 2.5 minutes of downtime or less per month, per month, which includes, by the way, both planned and unplanned downtime. So that's what autonomous database is, it's using the power of machine learning to automate all of the manual tasks that a human being is doing, which is really not of high value, which is really very administrative type of work. >> So I can see some of the time things are great for customers, what other benefits do those customers have in terms of having this, obviously automation takes away a lot of, makes free time, but what specific benefits do you guys see coming out of this for customers? >> Yeah, absolutely, I think for businesses it's all about outcome. So there are three major benefits of autonomous. The first one is reducing cost, it's making sure that the administrative times, I'll give you an example, we now with autonomous can cut off the administrative time by 80 percent, the cost of administering a database. So that's real hard savings for the customer, and they can then take that and put into something else that more strategic to them. It's about reducing risk. The risk of breeches, which could cause reputational damage to companies, which could cause, shareholder value loss. So the fact that we are reducing risk with autonomous technology is another big benefit. And the third, and the most important one, is really innovation, the time to innovation, the time to insights, more productivity for the customer. So those three, in my opinion, are the top three benefits >> To organizations. >> Now being agile, having flexibility, the cloud certainly brings that scale out mentality, that server list we hear things like that in the industry, so certainly very relevant, and machine learning makes that automation happen. Love that message. The question I would have for you is okay, in my mind, I'm trying to think, how would I buy this, how would I use it? What are some of the offerings that you guys have, is it turnkey box, is it software, how do you roll this out to customers, how do they consume it? Take us through the offering itself. >> Sure, today we offer autonomous in our cloud in two different offerings. One is autonomous data warehouse, which is purely for analytics, so you can actually create new data warehouses, or data mods to get insights from your data. The second one is transaction processing, it's autonomous transaction processing, which can be used to develop applications, to deploy applications, high-performance workloads, mission-critical workloads in the cloud. So those are the two ways we can do, in fact, we have many customers who are using our technology today in our cloud. But like I said, this is also going to be available in on-premises as well. >> That's awesome. So, when you get into the customer examples, who's using this now? Is it shipping? What's the status of it? I mean this gets a lot of attention, and the press articles are great. We covered it on SiliconANGLE, what are the customer examples? >> Absolutely, so of course it's shipping, and it's the first and only self-driving database in the industry. We have many, many customers for the last few months who are using it. I'll give you a few examples. We have a major Enterprise car rental company who is using it, and they were able to cut down their time to provision databases from two weeks to eight minutes. Now what does that mean? That means they can now roll out projects faster, and improve their customer services and offers they are making to customers. We have another customer who is in the shipping and oil industry, and they've cut down their time to querying complex data sets from 20 minutes to a few seconds. Again, which means they can get access to insights much faster to make decisions. And they've also eliminated downtime from patching because everything is done online, patching is done automatically on the database while it's running online. And then we have another customer who's a managed service provider. They're now able to provision their customers 10 times faster. So that means they can grow their business, they can provision more customers, their current customers can be happier because they are supporting them better and faster. >> What are some of the comments and messages, to kind of go off tangent for a second here but, I mean, they go "Wow, this is amazing"? What's some of the feedback you're getting? What are they saying, what are some the anecdotal comments? Share some color around that. >> Sure, I mean one of the big comments is "Wow! Me, I'm a DB, I thought this was "going to take my job away, but actually, "to the contrary, it's making my job easier." DBAs are now realizing they can actually manage many more databases efficiently in the same time that they were doing before. And secondly, they don't have to be involved in manual drudgery tasks, they can now offload all of that to autonomous database, and they can now focus on more strategic tasks. They can become a partner to the business, they can focus on application life-cycle management, on data security, on data architectures. So that's the one reaction we are getting is like "Wow, I didn't realize how much of my time "I was spending doing maintenance stuff, "which really adds no value to the organization." So customers are seeing a lot of productivity gains. I think the second thing is the speed of innovation. The fact that it would take them three months, six months, to deploy new projects, and now they can do it quickly within a few minutes is actually unbelievable to them. >> This is a real good point, I just want more double-down on that real quick, because one of the things we're seeing is, across all the events we go to, that message of the fear of "Oh my god, "I'm going to lose my job" or "I'm going to be automated away" actually isn't true. If they get re-deployed in other easier jobs, I don't want to say easier, but all the mundane tasks can be automated, that's a good thing. The security thing about the patching and self-updating, that's amazing. But the skill gaps is a huge problem CIOs face is that they need more people. And cloud architects are the number-one demand jobs, so I mean this must be really refreshing to hear that when you say "Hey, you were doing "a DBA job before, or something else, "now you're a cloud architect." Are you seeing the cloud architect role become important, and if so, what are they doing? What's the role of a cloud architect, and how does this fit into that? >> Yeah, I think the way we describe it, I think it's close to cloud architect, but think about it from administering data, or managing databases to actually using databases to mine insights, it's a different mindset. So you're becoming a data professional from a data administrator. So as opposed to having a job of managing a database, that's not important, what's important is you use the database to get insights and make your business smarter. So now we are working with, for example, our DBA stakeholders, which have been our Oracle family for four decades, to help them re-skill, to new ways of thinking, to becoming data professionals, to becoming data architects, and like I said, focusing on things like data life-cycle management, how do you work with application developers, how do you work with lines of businesses when your line of business comes to you and says "Hey, I want a database tag deployed for XYZ", the ability for them to say "Of course, I can give it to you in minutes." as opposed to saying "Oh, you'll have to wait two months." Imagine that. >> Yeah they're helping people, and they're also, more important, they're powerful. >> Right, right. >> Okay, Oracle OpenWorld is happening, and so one of the conversations we're hearing, and certainly this is consistent throughout the industry, the role of security. I put my skeptic hat on like okay Monica, tell me the truth, is it really self-updating the security patches? What about the phishing attacks? There's a real paranoia on the security. Take me through the security, while you guys are comfortable with the security, what's the big message and what's the big feature of why it's so secure? >> Right. But before I do that, let me paint a picture for you. We all know the opportunity that comes with Cloud, it presents huge opportunities to organizations. But with every opportunity, there comes a challenge that needs to be solved. And like you said, security is a big challenge. We are talking about massive scale of security breeches happening in the industry. We are talking about bad guys having access to very sophisticated technologies to wage this war against us, the organizations, to get access to core data. And we are talking about the number of security issues that are happening multiplying and compounding, and I'll give you some data points. There are 3.5 million cyber security jobs that are open in the next couple years. We don't have enough people to fill those jobs, even if we did, we can't keep pace with the amount of security threats and challenges that we need to navigate and address. >> And by the way, that's a data problem by the way, too. >> Back to your data is the central value proposition. >> Exactly, and also the other point I want to give you, which is equally important is of all the breeches that have happened, 85 percent actually had to fix available, and yet it wasn't applied and the breech happened. So again, we are talking about human beings who are very busy >> The human error on the patch side is huge. Spear phishing and also patches are the two number one areas of security. >> Right, but also people are busy. You kind of say "Okay, I'm going to do this later, "I have so many other 10 things to take care of first, "and I'm going to apply this patch later." Now what happens is, that's why we need to throw automation and machine learning at this problem. I don't think we can solve it by throwing just more and more human man-power on it. We need to combine the power of human and machine to tackle this security problem, and that's what we're doing with autonomous database. Not only can we predict a breech before it happens, we can actually fix it before it becomes an issue. And that's what I'm talking about with the whole self-securing notion. That's the power of autonomous database. >> A few Oracle OpenWorlds ago, Larry Ellison said on stage, I'll never forget this, I actually loved the line, other people kind of gave him some heat for it, but he said "Security should always be on. "Off is the exception." Has that view permeated through Oracle? >> Oh, Oracle was built on that view. We have, if you look again at our history, and our customer base, we are supporting the largest and the biggest governments in the world. We support from federal governments, to state governments, to public sector, to every organization who cares deeply about security, and it's not just a government issue, it's every organization has to safeguard the data of their customers. I mean that's the law. Every single organization cares about it. Oracle was built on that, that's the foundation that we are built on. So for us, security is very important, that's the first design principle of our data management, and all of our technology solutions. >> Well you guys are in the middle of all the cloud action, for sure, we're covering you guys, it's great to have you on theCUBE. Monica, thanks for coming and sharing your story. Where can people find out more information on the autonomous database, this awesome new product? >> Well, it's going to be all over oracle.com, so I'd say go there at first and from there you can navigate to a lot of great content on autonomous database. We have customer studies, we have free trials, so you can take us for a spin. It's like driving a self-driving car, it's self-driving database. >> It's a Tesla. >> Yeah, it's like the Tesla of databases, exactly. >> Monica, thanks for coming, I'm John Furrier here for CUBE Conversation, we are in Palo Alto at our headquarters, I'm John Furrier with theCUBE, thanks for watching. (enlightening music)

>> Live from Toronto, Canada, it's theCUBE, covering Global Cloud and Blockchain Summit 2018. Brought to you by theCUBE. >> Hello everyone, welcome to the live coverage here in Toronto for the Global Cloud and Blockchain Summit here put on as prior to the big event this week called the Futurist Conference. TheCUBE will be here all week with live coverage. I'm John Furrier with Dave Vellante as we expand our coverage with theCUBE into the blockchain and crypto token economics world. We're here on the ground. We're covering the best events. We started in 2018 initiating CUBE coverage on the sector. Of course we've been covering Bitcoin and blockchain going back to 2011 on SiliconANGLE.com. Dave, we're here to kick off what is the first inaugural event of its kind, combining cloud computing coverage with blockchain, and as we had on our fireside chat last night, we discussed this in detail. Cloud computing and blockchain, either going to be a collision course or it's going to be a nice integration. And we discussed that. This is what this show is all about, is it's really about connecting the dots to the future. The role that cloud computing will play with blockchain and token economics, a variety of different perspectives, but again, this is the first time we in the industry are starting to unpack the mega-trend of cloud computing, which we know is like a freight train powering and disrupting, and we cover it in detail. But blockchain is certainly transforming and reimagining business and process coming together. >> Well, we're here in Toronto, which of course is the birthplace of Ethereum, and it's interesting to see how Toronto has attracted so many developers in the software and engineering space, and there's a huge crypto community here. I'll give you my take on the cloud and blockchain. I don't see them on a collision course. I see blockchain, and we've talked about this, and crypto as a part of this other layer that's emerging. You had the internet, you had the web. On top of that you had cloud, mobile, social, big data, and it was essentially a cloud of remote services. What we're seeing now is this ubiquitous set of digital services of which blockchain is one. And to me it's all about automation, machine intelligence, blockchain being able to do things without middle man. You made that point last night on the fireside chat. And I think it's complementary. You need cloud for scale. Everything's digital, which means data. And you need machine intelligence for automation. And that is the new era that we're entering, and blockchain is playing a big part of that because of its inherent encryption, its immutability, and its ability to show proof of work. So it's a key component of a number of different digital services that are going to transform virtually every industry. >> Certainly, then, that's a tailwind for the industry, and certainly we see that. All the alpha entrepreneurs, alpha geeks, and a lot of the business pros see blockchain and token economics as a dynamic that will certainly change things. Today in Toronto this week, certainly not a good week for pricing of currencies. The crypto market is down, Ethereum and Ripple are at yearly lows. And communities are kind of getting scared. We talked with Matt Roszak, an early investor and founder of BloQ, last night about the price declines, and he said, "I've seen this pattern before. "These price selloffs also kick off "the next wave of growth." So there's a kind of a weeding out, was his perspective. But you can't deny that over the past 24 hours, 30 billion has been erased from the crypto market caps, and the greatest decline is happening under Bitcoin's dominance, and still increased over, still 56% over the year. So Bitcoin seems to be holding more value than, say, Ethereum. Ethereum and Ripple really under a lot of pressure. So the insiders, some are scared, some are like, hey, we've seen this movie before. Waves are a little bit rough right now, but they're in for the long game. So this is a long game going on and then there's also money being lost. >> Well, Matt was saying bet the farm now. He said he's seen this before. Take everything, the mortgage, the house. I'm not sure I would advise doing that, but this is the time, buy low. So just for the numbers, Bitcoin's high last November/December was 19,000, it's down at 6,000 now. So as you say, it's still up almost 50% for the year, but if you compress that timeframe to nine months, it's down 60%, so very, very volatile. Ethereum, on the other hand, last September was trading at around 240, 250, and today it's in the 260s. So back to where it was last September. The curve on Ethereum sort of looks like it did end of last summer, whereas Bitcoin is still almost 70% up from where it was last September. So quite a bit of difference between the two cryptocurrencies. And you mentioned Ripple, IOTA, many of the cryptocurrencies-- >> Ripple's dropping 90% from its 2018 highs. 90%. (both laugh) Some money was made and lost on that one, so again, we always say when the music stops you better be sitting in a chair. Otherwise this is bubble behavior, but you know Matt and others and the insiders are saying they're still bullish because of the pattern. Even though it's a selloff, it's a weeding out process and they see still good deals going on. And again, this is going to come fundamentally down to whose technology's going to be adopted, what kind of application can be written on blockchain, which is seeing some promise in the enterprise. Just yesterday Microsoft announced a blockchain as a service kind of thing with proof of authority and new concepts. IBM, we've been covering IBM with blockchain, their work with the Hyperledger standards. You've got the enterprises. Amazon has kind of telegraphed, they actually put a professional service note out where they are doing some blockchain. The big clouds are getting into the game, so the question is, will the clouds suck all the oxygen out of the blockchain room, and will there be room for other blockchains? Again, this is the big debate. Is it going to be a fragmentation of a series of blockchains, or will there be some sort of set of standards? Again, we don't know what the stack's going to look like because the best thing about blockchain is you could roll it out and implement a portion of the stack and still coexist with whatever standards emerge. So again, these are the questions. >> Well, one of the conversations that of course is going on is actually, the number of transactions that's occurring with Bitcoin is way down, it's probably down 20% year to date. The other conversation is we all know that Bitcoin and Ethereum, the transaction volumes can't really support what we do with Visa or even Amazon. There's a discussion in the industry going around about what if Amazon shows some other coin? Like Ripple, for example, which has much higher transaction volumes. Or what if Amazon tokenized its own business, came up its own cryptocurrency? What would that do to the price of Bitcoin, if all of a sudden you could transact in Prime using AmazonCoin or something like that? And we know that Amazon understands how to scale, it obviously understands cloud. That's why I do see cloud and blockchain as complementary. It's very difficult to predict the future. There are those who say Bitcoin is the standard, it's got the brand. There are those who say that Ethereum, because it's much more flexible and you can program distributed apps with it, have a great future. And then everybody points to the transaction volumes and says, this is just a Petri dish for the future where new technologies will emerge that scale better and can produce. >> What's interesting last night on the, we had a fireside chat with Al Burgio, serial entrepreneur, founder of DigitalBits, and Matt Roszak, obviously founder of BloQ and investor, he's on the Forbes billionaire list, super active, very engaged on a lot of advisors, Binance is one and many other deals he's done, it's interesting, you got two perspectives. Al is the networking guy who knows plumbing, knows how networks work, and Matt's a token economics genius. So the two have interesting perspectives and the battle royal going on right now, in my opinion, is two things. I think token economics is a wonderful thing that's going to happen no matter what the standards are, 'cause token economics really is the value to me of the cryptocurrency that can be applied to new business models and efficiencies. The blockchain is a land grab, and here's why. I think whoever can nail the plumbing and the pipes of the infrastructure reminds me of the early days of the dial-up web, when you had points of presence and you had the infrastructure had to be laid down. Although slow, people can dial up and get the internet, then obviously the internet got faster and faster. Blockchain's struggling from that scalability performance issues, and so the question is, on a public blockchain, you got to have the supernodes, you got to have the core infrastructure plumbing nailed. I think Al Burgio takes that perspective. Then everything else just will flourish from there. So the question is, what do those hurdles look like? And this is where the cloud guys could either be an enabler or they could be a foe against the core community. Like you said, Amazon could just snap their fingers tomorrow and take out the entire industry with one move. Just, we're going to do our own blockchain as a service. Everyone uses it, here's our token, and then a set of sub-tokens would have to be coexisting with that. And that could be a good thing, we don't know. This is the discussion. >> And governments around the world could do the same. US government could do Fedcoin, the Chinese government could do Chinacoin. I mean, what would that do to the prices of cryptocurrencies? I mean, it would send it into a tailspin, you would presume. And it was interesting. Matt Roszak on your panel last night, I asked the question, well, traditional banks lose control of the payment systems. And granted, he's biased, and he was definitive. Yes, absolutely. But the counterargument to that, John, and I'd love your thoughts on this, is the US government and the banks have a lot to lose. And they're kind in bed together and always have been. So one would think, with the backing of the US, its might, its military, et cetera, that they're not just going to let the banks lose control. Now, to his point is, why do you need to pay transaction fees to a bank? But you're paying transaction fees to somebody, even in crypto. >> I think our government in the United States is really asleep at the wheel on this one. And here's why. One of the beautiful things about the internet was it was started through collaboration in the universities in the United States. The United States enabled the internet to happen, and the Department of Commerce managed it. The Domain Name System was managed in a very community-oriented way. Again, community, keyword. As opposed to all this, that history is well-documented. If people aren't familiar with the history of the Domain Name System, DNS, go check out the Wikipedia, research it. It was run by a bunch of people who managed the database of website names. And that became sacred and was distributed. >> And funded by the US government. >> Funded by the US government, but the community managed it. The problem with the US government today is that they are meddling in areas that they actually shouldn't be even playing in. You got the SEC, it's shutting down everything right now just by the threat of subpoenas in the ICO market, which puts the overall country into a handicapped position, because now the innovation of blockchain and the entrepreneurial innovation that's happening is stunted, and it's just shifting outside the United States. So what's happening is the money flow and the energy and the activity is so high that incubation's not happening in the United States, although a lot of people are working on it. There's no funding mechanism. The capital formation of blockchain's different than venture. It's not super different, but somewhat different, but it's happening outside the United States. Certainly the Chinese will be in benefit of this. And if the Chinese wanted to shut down blockchain they would have done it by now. They're actually fostering it, and it's an opportunity for someone on the international stage to get a lever in the United States. So that's one. The second thing is they can enable crypto if they wanted to and I think they really should look at that and I think the banks are central organizations, the World Bank, they're under a lot of pressure. They don't know what to do. So when I talk to people, that's the same answer in so many words, is the government and the regulators really just don't know what to do. >> Well, and Matt made the point last night, Matt Roszak, that when he talks to these banks they're talking about using blockchain and they're very excited because they're going to take hundreds of millions of dollars of cost out of their, you know, infrastructure and their processes that are just not very efficient, and that's going to drop right to the bottom line. And of course they're in the money business, so that gets them very excited. His point was that's really not what it's about. Yeah, that's nice, but it's really about transforming the businesses, and that's why I asked the question about banks losing control of the payment systems. Opens up a whole new opportunities, whether it's financial services, healthcare, automotive. And again, to me, it comes back to digital, which is data, plus machine intelligence plus cloud for scale. You called it. I think at IBM Think, you coined it the innovation sandwich. Data plus machine intelligence plus cloud for scale. Put that together, that is the innovation engine for the next decade plus. >> The innovation sandwich, unlike a wish sandwich, where you wish you had some meat in the middle. You know, this is a good point. Let's end this kickoff and get into some of the interviews here with these really early thought leaders in this new conference. This is the first of its kind, cloud and blockchain, and we're going to certainly continue this in Silicon Valley with theCUBE summit coming up and our events that we do. But let's get some predictions out, because remember, this is theCUBE. Everything's going to be out there, it's going to be on the record, so we can look back and say, hey Dave, remember in 2018 when I asked you what's going to happen? So let's get into a prediction. What do you think's going to happen? I'll start and you can think up an answer. So here's my prediction on this whole blockchain world. Not so much crypto or token economics. It's really two predictions. With respect to blockchain, I think you're going to see an exact movement that the cloud market took, and I think it's going to happen in three phases. Phase one is all the energy's going to go into public blockchain, and public blockchain will be figured out first, and people are going to get excited by the new operation models of blockchain, specifically the decentralization of how that works and the benefits of decentralized blockchain, immutability, no central authority, and all the benefits of blockchain. I think it's going to be very rapid growth in the fixing of blockchain. Speed, scale, that's going to happen very quickly. And it's going to happen publicly. Then you're going to see private blockchains. You're going to see on premises kind of like blockchain. Kind of like the cloud, people have onsite, private. And then you're going to see a hybrid. The hybrid will look like multi-chain solutions. This is almost an exact trajectory that cloud computing took, because blockchain feels like a cousin of cloud or a brother or a sister. So it's related, but not exactly, but I think it's kind of the same trajectory. Public, private, hybrid, which is a multi-chain model, and I think that's going to be the standards. That's going to be the market track. On the token side, I think you're going to see a couple key tokens, like certainly Bitcoin's not going away. I'd be doubling down on Bitcoin under 6,000, like everything on that. That should hit 20,000, in my opinion, over the next timeframe. But there's going to be a lot of token integrations. My token integrates with your token and almost natives and secondary tokens kind of blending together where people with coexist tokens on one platform. So it's just too powerful not to have that happen. So that's my prediction. What do you think? >> I think as it relates to blockchain, I think blockchain becomes, in the enterprise I think it becomes an invisible component of virtually every industry. 'Cause every industry has waste, can improve efficiencies, and blockchain becomes a way to, whether it's supply chain or settlements or shared ledgers, I mean, there's dozens of applications for them and I think blockchain becomes a fundamental component of a digital infrastructure, and it's starting now and I think it's here to stay for many decades and beyond. And you won't even see it. It's just going to be there. It's going to become a fundamental part of how we do business. On the token side, very interesting, obviously, hard to predict. I think that you're going to see continued volatility, of course, I think that's a safe bet. But I also think it's potentially going to get worse before it gets better. I think there's going to be a shakeout. I think you're going to see, there continues to be pump and dump scams going on, the US government's getting more aggressive, a bunch of subpoenas went out, and people are still trying to understand what that all means. So I think it's going to be rocky roads for a while. I think you're going to see a big shakeout, like a big dip, and then I think it's going to power back. I think the crypto is here to stay. And it's very, very hard to time these markets, so my advice is just buy, trickle buys on the way down and hold. HODL, as they say in this world. And I think 10 years from now it's going to be worth a lot. >> Alright, you got it here, theCUBE. We are in Toronto for the first inaugural Global Cloud and Blockchain Summit. Of course, part of the big event here in Toronto, Futurist Conference, which we'll be there live. Wednesday and Thursday, the kickoff is Tuesday night for the opening reception. It's theCUBE coverage continuing for blockchain and crypto markets. I'm John Furrier with Dave Vellante. Stay with us for more live coverage here in Toronto.

(upbeat music) >> Live from Toronto, Canada, it's theCUBE. Covering Global Cloud and Blockchain Summit 2018. Brought to you by theCUBE. >> Hello everyone and welcome back to theCUBE's live coverage in Toronto for the Blockchain Cloud Summit, part of the Blockchain Futurist event happening tomorrow and Thursday here in Toronto. I'm John Furrier with Dave Vellante. We're here with Gabriel Abed who's the founder of Bitt and also the Digital Asset Fund. Great story he's been there from the beginning. President at creation in the movement that's now changing the world. Blockchain and cryptocurrency certainly. Infrastructure and token economics, changing how things are doing. And rolling out, reimagining everything from infrastructure to value exchanges. Gabriel welcome to theCUBE. >> Thank you it's great to be here. >> So we were just talking on camera, you like to go after the big changes. You're an entrepreneur, you have that fire in your belly. You've been very successful. Where are we? I mean, you've been part of the movement, we're now on the cusp of mainstream adoption, there's still work to do. >> Oh, plenty of work. Lots of infrastructure still to build, many regulators and legislators still to educate, lots of laws still to be amended and changed. And, at the end of the day, it's happening and it's happening quickly and beautifully right now. The entire industry is changing. >> One of the things that you've done, you've taken on some big projects and you've made change happen. Regulation is one of the hottest topics we're hearing certainly in the United States, it affects innovation and there's so much entrepreneurial activity happening right now. There's so many entrepreneurs, alpha entrepreneurs really want to do great things, and regulation is just a blocker. It's an antibody for innovation. And you've busted through that. And it's probably going to continue. The old guard is either going to be replaced or adapting to the technology. You've done that, and a lot of people want to do what you've done. What's the secret? What's the secret of your success? How have you taken on these big, incumbent positions and taken them over >> But you're not running from regulators, you're embracing them. >> No, no, I think regulators are important to a responsible and sophisticated market. When my partner and I started Bitt in 2013, 2014, we immediately realized that if we wanted to build a product for the monetary authorities around the world, we needed to have the buy-in from the regulators. So from day one we were regulator-friendly. And it's not to say that we don't believe in a decentralized future, I'm as big of an advocate for decentralization and the freedom of information as anyone else, but I'm also a big believer in if you're a product for a market in the traditional world you have to involve the regulators in order to ensure that product does its job, keeps the consumers safe, and ensures that the economy around it doesn't collapse. So regulators are critical in this field. >> Talk about what you guys have done. Take a minute to explain the project you did, how it worked out, the tenacity, but also, what was the outcome? What were you trying to do in the project and where is it right now? >> It depends on the project you're referring to >> Maybe start at the beginning >> The Caribbean >> Let's start at the beginning. >> Yeah, yeah. >> Okay, so, Gabriel Abed, born, raised, educated in Barbados, around the age of 19, I decided I was going to take my computer science education a bit further. I went to Canada, I did a Bachelor of IT, where I majored in network security. In Ontario, the University of Ontario. And, unlike the rest of of my peers, who usually stay in Canada, I decided to go back to my little nation with the education that I had just received. And I took that education home, and started one of the world's first blockchain companies, but at the time I didn't understand blockchain per se, I understood it as a commodity, as a cool investment, I didn't understand the true nature behind the protocol itself. It was only until 2013 that my partner and I ran one of the larger mining operations in the world, that we realized a commodity was actually a protocol. A network tool. A system that you could build on top of. So in 2014, we actually created one of the world's first blockchain assets, on Bitcoin's blockchain. And that a representation of a digital dollar for a central bank. And the notion behind Bitt.com in 2014 was, let's compete with cash, because it's inefficient, it's costly, and it slows down the movement of society. So what we wanted to do is create a digital version of that, that would save economies hundreds of millions of dollars. Cash is expensive to to create, that linen, plastic, paper money, it's easily forged, it can be counterfeited, it's hard to transport, it has an expense to transport, it has an expense to count, it has an expense to secure, and then it has overheads around the entire ecosystem of accountability. Whereas, a blockchain-based digital dollar eliminates all of those efficiencies, and increases the ability for a monetary authority to trace, track, and have a better form of anti-money laundering, counter-terrorism financing and a better overview of their entire society. So that all, we took that notion, went to the central bank of Barbados, who at the time was being led by Dr. DeLisle Worrell, and our very first meeting he had asked me to excuse his office. And 13 meetings later, and a whole two years, lots of development, building out infrastructure around compliance, around finance, around security, and around regulation, we finally got the nod of approval from Dr. DeLisle Worrell to operate a fiat example of a digital dollar in Barbados. And since then, we have been working with several central banks around the world, bitt.com today is the leading central bank provider for digital dollars. A lot has changed, I've developed other tools since, and other businesses, but bitt.com continues to be the best friend for central banks looking to move and transition into the digital arena. >> Why, I mean other than a closed mindset, why wouldn't every government around the world want to move in this direction? Initiate some kind of FedCoin, for example. >> Education, education, it's the fear that the system may not be scalable, it's the fear that the system could be hacked, it's the fear that they could be cut out, their control, at the end of the day, monetary authorities, like the Federal Reserve, they have a control on the money supply. Whereas, something like decentralized cryptographic currencies, there is nobody in control of the money supply. Hence, inflation versus deflation systems. Then there's the issue of hacking and the threat of digital and cybersecurity. Typically, the head of these monetary authorities are older gentlemen who are traditionally conservative. And who are not (mumbles) with cybersecurity. So the fear of hacking is very real for someone like them, whereas someone like me who is trained as a network security expert, those fears can be mitigated with good policy and procedure, cold wallets, and the right process, to ensuring the environment can run without the risk or the fear of malicious attacks. So it really boils down to education. The educated governors of central banks, like there's one, for example, Timothy Antoine. Dr. Antoine is the governor of the Eastern Caribbean Central Bank. And they govern and mandate the currency union of eight islands below them. St. Lucia, Grenada, Antigua, et cetera. Now, he's a governor that gets this and has wrapped his head around it, and understands that this is the future. He gets it so much that he signed an agreement with bitt.com to begin exploring a pilot for his currency union to have a digital dollar implemented in it. You also have governors and presidents like that of Curacao. Or the central bank of Curacao, where we've just signed an agreement to move forward with a phase of looking at the implications of rolling out a digital dollar in a society like Curacao and St. Maarten. What is the ramifications? What is the feasibility study behind that? So, to answer your question, it's not every single regulator, governor, and central bank manager is going to head toward this technology tomorrow. But with more education, and more lobbying, you will see more and more central bank governors moving in this direction, because it's better, cheaper, faster, makes their job easier, gives them more control, gives them more oversight, and provides all the things that they would want as a central bank to continue to do their job for their society. Which is to protect their dollar from alien threats. And to ensure that the dollar remains stable, and to just generally ensure that the society is functioning the way it should. >> Gabriel, what's your vision on what this will enable for the citizens? What's the impact that you see happening? If this continues down the trajectory, what is the adoption look like, impact to people's lives on a everyday basis. >> Well, for a very starting point, you democratize payment. Right now, if I want to make a payment, I have to go through a utility company called a bank. And this bank typically has frictional costs, and frictional overheads and time. That's one of the biggest problems, is that these monopolistic infrastructures hinder the ability for the average participation of a free-flowing payment system. So what you end up having is rather than me being able to make a digital payment in seconds, with no cost, I have to wait days, I have to use manual-based systems whether it's check, cash or the bank's Visa Mastercard system. And then it has frictional costs. So right off the bat, you democratize payment. What does that do for a society in a developing nation? It empowers people. And you're empowered because now as a developer, I can build on this payment system. As an entrepreneur, I can tap in to this payment system. As a merchant, I can utilize this low-cost payment system. As a society, I now have GDP growth because of financial inclusion. The underbanked, who do not have access to banking facilities for one reason or another, maybe they don't like the bank, maybe the banks don't like them. Maybe they don't have two proofs of ID. Maybe they don't have a fixed place of abode. Maybe they don't have the minimum deposit amount. All of these features keep the poor and the underbanked out of the system. Whereas, in developed nations, we have mobile penetration rates that are through the roof. In some cases, like Barbados, over 100 percent. So if you have 100 percent penetration rate of this mobile platform, this thing in my pocket, but I cannot access the banking system, well flip that around, democratize the payment system, allow payments to exist on this mobile phone, and watch how quickly society becomes banked. So what you end up having is full adoption. Why would we not have full adoption when it's cheaper, it's faster, it's more inclusive. >> And the data from that collective intelligence only creates a digital nation >> A more responsible environment. >> Wealth creation environment. >> It creates a more traced, tracked, and accountable society so that the monetary authorities in the government can now start making educated decisions on data. They now know who's buying milk, who's gambling, who's paying their taxes and who's not. >> The downstream benefits of this are massive. >> The downstream benefits are massive, enormous. They're disruptive. This is a brand new fiscal tool, a monetary tool, being given to central banks to start eroding the field of private e-money systems, and to start bringing about a uniform standard towards payments. Plain and simple. We're going to the central banks and introducing a new monetary instrument, that they're in control of. That now the commercial banks, the financial institutions, the corporatocracies, the citizens, and the merchants can all fall under one roof issued by their monetary authority. And this is not a cell phone company or a bank building their own private system that I have to jump through some hoops and some red tape and sign away my first born and give away my left arm to enter. This is a free and open source standard system. >> And it's networked, as you said, penetration is 100 percent on mobile or roughly that, it's a network society that now has digital fabric built into it. This is the future. >> But I played this out in terms of, when you talked about this in your panel, now every device, every thing, every physical asset will be instrumented. >> Yes. >> And as a result, theory can be coconuts. >> You're building the deep infrastructure. I remember we met with World Bank back in 2014 and they coined this term for me. Because they were saying we want to help entrepreneurs and it's important to help entrepreneurs in developing nations because they're the lifeblood of it. But what we are building is the deep infrastructure. And that's exactly what it is. It's the infrastructure that would allow the entrepreneur and the developer to now have a framework that they can build against to provide more uplift. So in essence, it's really going to be exponential growth once systems like this are implemented. The stock market can move digital, and people could buy stocks using digital dollars. E-commerce can occur because I can now buy things online or sell things online with digital dollars. I can now be part of a global, financial ecosystem, with my smartphone and my wallet. >> That's a great use case, congratulations on amazing success, so much is on your plate, you've had great success in this new era, what's on your plate now, what are you working on, what's happening in your world now? >> So in 2017, we realized Bitt was entering a new growth phase. It was no longer a battle of trying to convince regulators and central banks, our product had been proven. Our reputation had been proven. It was time now to scale the company into a professional level of dealing with these regulators around the world. At the end of the day, we would like to digitize cash, wherever cash exists. And to provide those tools for central banks around the world. That would require professional management, and that is not I. >> (laughs) >> So, our investors and shareholders were quite comfortable with our proposal of bringing on that professional management, so in 2017 I resigned as CEO, retained a board position and still single largest shareholder, but with the idea of what other types of infrastructure can I build, now that a deep infrastructure had been put in place. So I've been attacking three major markets, the banking sector, an actual commercial banking enterprise working with a group from the United States towards looking at deploying the future of where we think commercial banking is going. I think that the community, the crypto community in general, there's a lot of noise happening in the chats. And therefore we built a machine learning chat bot to start looking at market sentiments and aggregating market information and of course building common tools for community members. So we've launched a agent called Gabby, the form to gab. My name's Gabriel and my mom calls me Gabby, so it works out quite well. >> You have the gift of gab that's for sure. >> And then I launched a mutual fund with a very sophisticated former managing director of JPMorgan. A guy named Richard Galvin. And we launched the world's first protocol-only fund. We focus only on protocols. And that's called Digital Asset Fund. And we launched that in late 2017 and got full regulatory approval to become a professional fund, that handles 100 percent, solely crypto. And that's basically been my ride, and then outside of that, just your standard consulting, because everybody from World Bank, to IADB, to some government agency to some private organization wants to know about blockchain they want advice, and they need a team of people to give them that advice. So it's just been, all around, looking at how I can be an entrepreneur in this space, while finding great leaders, and partnering with those leaders to build out great companies. While still focusing on ensuring bitt.com becomes the solution for dollars, digital dollars, worldwide. >> Got a great mission, entrepreneur, builder, congratulations. >> Thank you. >> Industry's lucky to have you, congratulations. >> Thanks for coming on. >> Thanks for coming on theCUBE. >> Thank you guys. >> CUBE coverage here, live in Toronto for the first Global Cloud and Blockchain Summit in concert with the Blockchain Futures Conference happening in the next two days after today. More coverage from theCUBE we're live here, stay with us for more great coverage after this short break. (upbeat electronic music)

>> Live from Toronto, Canada, it's the theCUBE, covering Global Cloud and Blockchain Summit 2018. Brought to you by theCUBE. >> Hey, everyone. Welcome back to CUBE's coverage in Toronto for the Global Cloud and Blockchain Summit, part of the big event also happening for two days, Wednesday and Thursday, the Blockchain Futurist Conference, here in Canada. I'm John Furrier, Dave Vellante here. Next guest is the founder and CEO of DigitalBits.io as well as Fusechain and serial entrepreneur and also the mastermind behind this inaugural event. First time a cloud blockchain conference has come together, bringing the two communities together. Al, great to see you. Thanks for coming on. >> Thank you for having me. Thank you for coming to Toronto, Canada. >> It's our pleasure. Certainly as you know, we love cloud. We cover all the big cloud shows. We're dominating that market in terms of coverage and access. And we just started covering blockchain in 2018 with theCUBE, although on SiliconANGLE since 2011 with the written word in journalism. But this is interesting. You are the brainchild behind this event, and I want you to explain why you came up with this event idea because this is the first time that you got two worlds coming together. You're bringing in the cloud DNA, and that can go back to like, classic networking and think big hosting providers, the Exodus and the Equinox of the world. These guys are the same guys who built YouTube's back end and Facebook. Large scale network guys with this new emerging blockchain world because there's some connections points, and it's super important, and no one's ever done that before. What's the motivation behind a cloud and blockchain summit? >> Well, if you think of the internet, all that data, all that traffic, substantial majority of it is flowing through data centers, infrastructure providers globally. And within many of those data centers you have cloud providers, whether it's cloud computing, SaaS, Software as a Service, cloud providers, you name it. And now we have upon us this emerging blockchain technology. Many are referring to it as Web3.0. And I'm obviously a big believer in that this is the next evolution of the internet. We got Internet1.0 in the 90's. We had Web2.0 with social sharing economy and so forth, and along the way, each step you had your first movers, your willing followers, and then the unwilling followed. It's been that powerful the last two occurrences that we saw with the evolution of the internet. Web3.0 is that next thing. First movers, willing followers, the unwilling. Every time you have this something very innovative, obviously there's a big engineering initially starts amongst, you know, a community of engineers, and then it starts to go mainstream. Obviously a lot happens in between conception and going mainstream. And if we look at the 90's, Linux played a substantial role in the acceleration of innovation. It really extracted, you know, it took a different approach to software, really leading open-source. >> It took down some proprietary incumbents - Unix. >> Absolutely, absolutely. And free and open-source software, but it still needed to be supported. Which version of Linux should enterprises embrace? And at that time, it was very important with what we saw emerge with things like Intel, IBM, Dell, HP, and so forth getting behind organizations like Red Hat and their version of Linux, now known as Red Hat Enterprise Linux. >> IBM put in a billion dollars into it. >> Yeah, exactly. >> Steve Woz, yeah. >> So with regard to that, you know, it was all about the hardware validating, right? These trusted vendors to the enterprise. And them kind of validating a company, or endorsing a company, in effect, like Red Hat, really helped provide a guiding light to the enterprise. Now it's not about hardware, it's about the cloud, right? Cloud computing providers and so forth. And in that ecosystem, it's not just AWS. It's not just Microsoft. There are many data center providers that have built a cloud computing offering that are supporting substantial financial institutions, substantial organizations within healthcare space insurance, and many, many other industries. So they play a very important role in supporting an enterprise, whether implementation, integration, and consumption of technologies, including new and emerging technologies. And so as we have, sort of, before us, this emergence of blockchain, obviously having lived in the cloud and infrastructure community for a number of years with that last company I had founded, know a lot of the key stakeholders. And even though I'm all in on blockchain, you know, I pop in every now and then in that world. What I found was two different extremes. You have CTO's and even CEO's of cloud computing organizations, and others within those organizations, totally high "Get It" factor. And you had the other extreme, multi-billion dollar cloud computing organizations, you know, data center organizations, where again, the leadership is still trying to figure it out, in some respects, not fully paying attention yet. And I saw that this is definitely emerging. Again, you'll have first movers, willing followers, and the unwilling. They're all going to get there. But it hadn't gotten there yet. And so with regards to this event, I saw a huge opportunity to really put something out there, allow it to ultimately take a life of it's own. There's a new organizer that's going to be coming forward and driving the ship with this event. But ultimately, there needed to be a forum, not just here in North America, but in every corner of the world, the Global Cloud and Blockchain Summit, providing this opportunity for that convergence, and for both communities to really share knowledge and accelerate, fill that gap. And I saw it's there. It is there. There's amazing things being spoken on stage as we sort of are sitting here, with leading innovators, and so forth, from both sides. There was an amazing keynote today by Anthony Di Iorio, one of the co-founders of Ethereum and founder and CEO of Decentral and Jaxx, really helping support the event today and making a contribution. His talk was phenomenal. That's kind of the thought behind it, and it's, you know, here we are. >> I want to pick up on something you said, for our audience, you know. I mean, for guys like you, Al, that are deep into it, you understand this very well. But you talked about Linux, and how, essentially, the Web was built on Linux. So if you were a Linux developer back in the day, and you wanted to "invest" in Linux, you didn't have a vehicle to do that. You could put your time in, you know? You could maybe join a company and maybe get some stock. But there was no way to directly invest in Linux. Well today, there is. With blockchain and cryptoeconomics, you actually can, whether it's tokenize your business or participate, you can buy tokens. And so it's a whole different incentive structure. And many in our audience are sort of new to this, kind of the unwilling, if you will. >> Yeah. >> And that's an amazing new way to create capital structures. >> And very powerful. I mean, prior to this tokenized revolution we're seeing here, it was a cool open-source project that as an engineer you wanted to be part of this, contribute your time, and quite often you would ask your employer to permit you to have 10%, 20% of your time to commit to these projects. Maybe you would even ask for that in your job interview. And you'd maybe get the thumbs up, you know? And so, your employer's, in effect, subsidizing your time to really contribute to projects and code that you're very passionate about. But if they got busy, economic cycles and what have you, and it's like, "You know what? We need you at 100% focus on your day job." All of a sudden, that community, that open-source community is losing perhaps a very valuable contributor, right? And there's really no way for that direct incentive from that project. And that's really what that is now. Projects can be created. You think of, you know, some blockchain's like an operating system, you now have an, you know, to use the Linux comparison, now let's say an operating system can have it's own incentive, a reward or compensation structure to really help attract engineers and other valuable contributors to not just give birth to a project, but help make it sustainable. >> Yeah. >> And, you know, eventually maybe you're quitting the day job because it's able to be free, open-source, and providing an enlightening self-interest. >> I'm getting some messages here, direct messages, listening to you talk. So I want to share them with you. One guy says, "Hey, Al. What's the deal with the different blockchains? How do I tell?" So I'm not an unwilling. I'm a wanna-believe. I'm not the front-end, but what do I pay attention to? And there's so many different chains. You got people promoting certain things. I don't know whose stats are real. You got two kids in a garage, >> Yeah. >> who just did an ICS. So the question is essentially what's the difference between all these chains? What do I have to look for? Is it latency? Who's solving these problems? What's the big deal, and how do I determine better chain from another chain? Are they all going to work together? >> Yeah. >> What's your thoughts? >> Things are moving incredibly fast right now. And it is difficult to keep up to speed. You know, maybe it was just bitcoin at one time and one chain to focus on. Then there was Ethereum and all these others. Now there's many, many more. So ultimately, it is about information, staying current with that information, doing your due diligence. But you really need to have a community that you're a part of, that you can, kind of, share in your evaluation and monitoring of what's new and emerging. >> So community's important. >> Very important, very important. Just say trusted advisors, trusted peers, and you kind of take a collective approach at this. Nonetheless, we're in this pioneering era, mass innovation happening. What's winning today, you know, may not necessarily be continuing to win tomorrow. But you really need to maintain a discipline, and take a peer approach to staying current. In terms of public chain, private chain, they're all going to play a role, and they are playing a role, in different use cases. There's clearly a use case for private chain within enterprise, within say, you know, trusted circle of supply chain participants. Maybe you want to bring some efficiencies to all that. >> So use case drives the chain. >> Yeah, absolutely. But public chain is a phenomenal phenomenon. Among other things that we hear a lot about it, it's given birth to the ICO. The new way of capital formation that is unbelievably awesome. The world has never seen anything like this, where. >> Explain that. Capital formation dynamic that you're referring to. >> Yeah, so the traditional way, whether it's in Silicon Valley or any other part of the world, you have an entrepreneur that maybe they haven't had a big exit where they can fund their own next venture on their own. You know. Smart intelligent people with a brilliant idea, and they're doing that friends and family route, right? The due diligence checklist isn't that long. It's like, you know what? Love my son. He's the smartest kid on the planet. You know, you give him a few dollars and a few other friends and family, this new emerging entrepreneur. And if there's evolution there, things are picking up traction and so forth, then maybe you're doing an angel round. And there's this sort of structured process that history's sort of define for us. And then from an angel round, you know, you have this early stage company emerging, and new milestones being reached, and then maybe there's a Series A venture capital round, and what have you. And then you have the, you know, the Series A, Series B, and so forth, right? The typical approach to things. A very regimented Silicon Valley has been a dominating force of the venture capital community, and that form of competition >> But the dynamics are different than the venture capital. >> Yeah, so that's the way that we've always, sort of, known, right? Many early stage companies, the process they go through. Many, many meetings behind closed doors, and so forth. >> Cloak and dagger, black box. >> Yeah, so concept of crowdsourcing, still beholden to the financial systems that're up there. How do you really foster community up there? And raise maybe a few million dollars? >> So what you're saying is is that it's easier to raise money now? Easier? >> It absolutely is. You have this new meeting of exchange where you have cryptocurrencies like Ether. And you're basically sharing your idea with the world, and all of a sudden, saying, "Hey, here's our token economics. We'd like to reach some capital." And then whether it's minutes, hours, or even weeks, you have capital coming to you from different corners of the world, and it's coming to you in seconds. Highly efficient. You have these universal currencies now emerging, and it's an amazing sensation, and it's a new form of capital formation, and with capital formation, you have innovation. So I believe that, you know, we're just going to continue to see an acceleration of innovation, globally happening, and not just in certain pockets of the world now, in many, many corners of the world. I mean what's happening in Asia's absolutely phenomenal in the blockchain space as well. It's not just interesting here in North America. In fact, in some respects even more interesting, depending on how you look at it. >> Describe what's happening in Asia. You guys talked about this last night in the fireside chat. >> Well, I mean some of the publicly available information is that you can just simply see, on many of the cryptocurrency exchanges out there, an insane amount of volume, more so than in any other corner of the world. And so you have a very active investor community up there, a trading community, token-buyer community, what have you. >> And where are the pockets? >> Very healthy. >> So it was China, and then things sort of shifted to Japan. >> Well, >> Where do you see the action? >> maybe where the centralized exchange in happening, but I think it's still a lot of the same people. It's not like it got shut down in a country, and those people just lost their desire. They just found an alternative means to continue to participate. >> Right. >> You know, South Korea, it's phenomenal. You have Hong Kong. You have Japan. You have Singapore, among many of the pockets. But then it's everywhere. I mean, you're meeting people from Vietnam, Thailand, India. They're all very active investor communities and utility token buyer communities. And it's very healthy. Yes, you have, you know, a correction every now and then in this market. But you have that with any sort of new, exciting innovation. But it continues to thrive up there. It's phenomenal. >> Yeah, you're seeing one of the main uses of bitcoin to buy alternative currencies. >> Yep. >> That's sucking huge amounts of volume. >> It's an easier currency. I mean, in a matter of seconds or minutes, you can have a currency go from a bedroom in Florida, you know, here in Toronto, to a project in Singapore, or vice versa, without going through bank. >> So again some more couple questions from the crowd. If you want to reach us, tweet us, either direct message or tweet @Furrier @DVellante. Happy to take your questions for the guest. But one says, "Do we buy now?" >> (laughs) >> Second was, "Do this side step the tariffs of the China, Japan, U.S. thing?" Obviously outside of the United States, we're the world power in the United States. But now that power is shifting. You see China and here in Canada, a lot of crypto-DNA here. So interesting. Your thoughts on buying? (chuckles) On the dip? Or crash? Or however you look at it? And then the international dynamic with China and Japan and others? >> So many are seeing it as a dip. I mean, the reality is, if this is new form of capital formation, it does share similar characteristics, nonetheless still to traditional or early-stage investing and venture capital, in many respects. Not every start-up succeeds. In fact, you know, over 90% traditionally don't make it. Even if they make it to a Series A round, they may not make it to a B round, right? And so, the fact that you have, some people kind of are referring to the Wild Wild West. I don't necessarily see it that way. It's just finding it's way, right? And it's going to get to a mature state. >> Well I think people look at the bubble, and they think Wild Wild West, but the interesting thing about it, you know, we talked about it off camera last night, around international is, and no one really knows what the STEEMs will be. This is going to be a completely different landscape than anything we've seen before, whether it's standards or execution. And I hear the argument all the time of "Oh, it's unregulated!" It's really the United States that's taking a more regulatory approach, you know, the SEC is essentially scaring straight everybody and saying, >> Well they're trying to figure it out. >> Well they're trying to figure it out, but also they've kind of slows things down, the process. But that being said, it might not have to be formally regulated. Because you mentioned Linux. The role of self-governing communities is a very interesting dynamic. No one's actually said and analyzed what a regulatory regime, globally, would look like, if you factor in, kind of, the open source concepts, with self governance because communities are very efficient, and we got money involved. >> Yeah. >> It can be even more efficient. That's called a marketplace. >> You know, people have disposable income, and they decide what they want to do with that disposable income. You go to a restaurant, you go buy some groceries, you invest, you maybe buy some commodities, right? And where we put that money, the value we had that we wish we could exchange for something else, some of it goes into some regulatory worlds and some doesn't. I want to go buy some you commodities at the grocery store. I mean, it's a free and open transaction. There's no KYC or AML per se and that happens. >> But food has to get to the supermart. My point is. >> Marketplaces don't require regulation. >> Exactly my point. That's my point. >> Or additional red tape, right? But where we put other capital deaths. So whether you're buying share certificate, early stage investing. There's SEC filings, perhaps. >> Who regulated Linux? >> Who regulated Linux? I mean-- >> (laughs) >> It was self governing. >> Benevolent dictatorship with Torvalds. >> But the capital formation was different in the Linux industry. >> Yeah. >> It was the more traditional path that you just described, and so those were-- >> But I guess what I'm saying is that, you know, have a token. Some token could represent a commodity. Some token could represent a security. So there needs to be that distinction and a framework of clarity so that we understand what needs to be regulated and going on that path. And so I think that's, kind of, part of finding it's way over the past 12 months or so is this distinction. Some countries were very quick to say, "Here's a framework.", like Switzerland. That clarity here is taking some time here in Canada and the U.S. >> Yeah, and I think they should let things foster and incubate a bit because you don't know the gestation period of real technology, and I think I'm cool with community-oriented governance Because people will lose a boatload of case; some will gain. But that'll all sort itself out. And with good community involvement, it'll happen faster. I just find that a better path. I mean, some people can't stay with that tension. They overreact. Some people can't handle the risk. But you got to see how it plays out at some level. >> You definitely do. But there's also an opportunity for self-governance. You know, you have-- There's the regional internet registries, right? So you have ARIN RIPE in Europe and so forth. You know, if you want an IP address and so forth, there's a self-governing body that defines policy and how these things are going to be deseminated here in North America. The government, kind of, sets off with that. >> The DNS system. >> You know, absolutely. This is valuable-- >> Yeah. You know, you have national security with internet, but how IP's are deseminated, it's self-regulated. So at the end of the day, if the community doesn't decide to say, "Hey, some of these things, well let's define self-governing bodies." And if they can play a great role in it all, fanastic. Otherwise, then maybe the government steps in" If that's the type of country it is where they like to engage. >> Al, everyone's reimagining new opportunities with blockchain and crypto. You've certainly got good venture with DigitalBits. We'll certainly have a conversation later here this week about that. I know you got to get back for a panel that you're going to go on now. So thanks for coming on. And congratulations on the inaugural Global Cloud and Blockchain Summit. Looking forward to talking more about it. So theCUBE live in Toronto for coverage of the Global Blockchain event here with cloud. And then tomorrow kicks off the big show here, the Blockchain Futurist, about 2,000 attendees. That's really going to be connecting the dots of the future. TheCube will be there as well. Stay with us for more live coverage after this break.

>> Live from Toronto, Canada, it's theCUBE, covering Global Cloud and Block Chain Summit 2018. Brought to you by theCUBE. >> Hello everyone, welcome back to theCUBE live coverage in Toronto for the Block Chain-Cloud Convergence Show. This is the Global Cloud Block Chain Summit part of the Futurist Event that's going on the next two days after this. Our next guest is Kesem Frank, AION co-founder and CEO of MavenNet. Doing a lot of work in the enterprise and also block chain space around the infrastructure, making it really interoperable. Of course, Jenna Pilgrim, co-founder and COO of a new opportunity called Network Effects. Welcome to the cube, thanks for joining us. >> Thanks, thanks for having us. >> Thanks, John. >> You guys were just on a panel, The Real World Applications of Block Chain. IBM was on it, which, been doing a lot of work there. This is real world, low hanging fruit, block chain, everyone's pretty excited about. A lot of people get it, and some don't. Some are learning. So you've got the believers, the I want to believe, and then the nonbelievers. Let's talk about the I want to believe and the believers in block chain. Some real world applications going on. As it's evolving, so there's evolution of the standards, technology, but people are putting it to use. What's going on in the sector around some of the real world cases you guys talked about? >> I think we're seeing a lot of collaboration as far as real world applications go, because I think people are sort of starting to understand that if a distributed network is going to work or is going to be secure, it needs diversity and it needs mass scale. If lots of different parties can work together, then they can actually form a community that's really working. As far as real world applications, there's some really interesting one as far as supply chain. Kathryn Harrison at IBM talked about their pilot about shipping, bringing together the global supply chain of distribution. There's a bunch of interesting ones about food providence and bringing together different parties just to make sure that people know what they're eating and that they are able to keep themselves safe, so I think those are two definitely interesting ones. >> Kesem, block chain, supply chain, value chains, these are kind of key words that mean something together. >> Right. >> Making things work in a new way, making things more efficient, seems to be a trend. You're kind of in that world. Is it efficient? (laughing) How's the tech working? What are some of the core threshold issues that people have to get over? >> So you know, John, that's exactly the question to ask. A lot of folks out there are looking at block chain and the promise it represents, and the one big question that keeps echoing over and over is when is this going mainstream? When are we going to see something, a domain, a use case, that is actually natively on a block chain? I think that, essentially, we kind of owe it to ourselves and to everyone that cares about this stuff to ask what's working today, August 2018 and what is still kind of pending? I co-founded a project called AION. For us, interoperability is really one of the key facets that you need to be able to solve for to make block chains real. And again, here's the 60 second argument. If you're going to grow all these solutions that are centric around the use case, they solve for different pinpoints and different stakeholders care about them. They don't really create the cohesive kind of ecosystem until they can all talk to each other, and then you have to ask yourself is the original hypothesis where it's going to be one main net, one chain that's going to rule them all, and everybody gets to play on it and everybody deploys their Dapps on stuff like Fabric or R3 or Ethereum, or whatever it might be. That is absolutely not the way we're seeing enterprise actually shaping into this domain of block chain. What we're seeing is big consortiums that already have value, tangible today, out of doing stuff on chain, and the biggest thing to solve is how do I take, to Jenna's point around supply chain or food providence, whatever it is, how do I actually open it so I can now start writing insurance events, payment events, banking, underwriting, auditing, regulation? There's this gigantic ecosystem that needs to be enabled, and again we are actively saying it's not going to be by an organic model where you and I do everything on top of a single solution. There will be a multitude of solutions, and what we need to solve for is how do we convert them from disparate islands that don't talk to each other into a cohesive ecosystem? >> This is a great point. We were talking on our intro, and we talked last night on our panel, about standards. If you look at all the major inflection points where wealth was created and value was created around innovation and entrepreneurship and industry inflection points, there's always some sort of standard thing that happened. >> Right. >> Whether it's the OSI model during the early days of the internet to certain protocols that made things happen with the internet. Here, it's interesting because if you have one chain and rule the world, it's got to be up and running. >> Yeah. >> It's not. There's no one thing yet, so I see that trend the cloud has, private cloud, public cloud, but public cloud was first but people had data centers. >> Right. >> Both not compatible, now the trend is multi-cloud. You can almost connect the dots of saying multi-chain >> Right. >> Might be a big trend. >> Right. >> This is kind of what you're teasing out here. >> That's exactly what we're about, and I think it's very interesting, the point you're making about dissimilarities between the two domains. We are in a cloud convention, and to me it means two things. One, we absolutely see the mainstream people, the mainstream players in industry, starting to take this seriously. It used to be a completely disparate world where you guys are a bunch of crazies with your Bitcoin and ether and what not. They're definitely taking this seriously now. The second thing, when you think of cloud as a model, how cloud evolved, we used to have these conversations around are you crazy, you're telling me that my data is not going to be on premise? >> It's not secure, now it's the most secure. >> Oh my God! It's in the cloud, what's a cloud? (laughing) You think of the progression model that was applicable back then, right? 10 years, 15 years back, where we started privately and we tell them OK, we'll take this side step of hybrid and then fully public. Took them a while, took them almost 20 years to get their heads around it. >> There's no one trajectory. What's interesting about block chain and crypto with token economics, there's no one trend you can map an analog to, you can't say this is going to be like this trend of the past. It's almost developing it's own kind of trajectory. A lot of organic community involvement. Different tech involvement. >> Totally. >> Different engineering mindsets coming together. You're seeing an engineering-led culture big time going on. That's propelling it up to the conversations of let's lay down the pipes, let's start running apps, but I'll do it within a two year window (laughing). >> I think the big thing to understand about that is yes, you need a whole host of developer talent to build distributed systems, but at the end of the day those systems still have to be used by people. They still have to be used by society, you still have to understand how to talk to your chief executives about what's happening within your company or what your tech teams are doing. There's a growing need for marketers, for PR people, for people who speak, I don't want to say plain English, but people who understand how-- >> Translate it to the real world. >> Yeah, they need to translate it, and how to bridge the gap between legacy systems and how do you take what you were doing before and transform it to a distributed ledger system? How do you do that without just paving the cow path? >> It's interesting, it's almost intoxicating, 'cause you got two elements that get people excited. You got the token economics, which gets people to go, "Whoa," the economics and the liquidity of money and/or value creation capture equations completely changing some of the business model stuff, which could be translated to software and Dapps and software general stuff or SaaS, et cetera. Then you got the plumbing or the networking side of it where things like latency, interoperability, absolutely matter, so with all that going on in real time, it's kind of happening at 30,000 feet and trying to change the airplane engine out. People are failing, and so there's some false promises, there's also false hopes that have not been achieved, so this clouds up the real big picture which is this is an innovative environment. We're seeing that trend. But when you get to the end of the day, what are people working on, to me, is the tell sign. Kesem, what's your project, talk about AION and the work you're doing, specifically give some examples of some of the things that you're doing in the trenches. >> Sure. >> What are you trying to solve, what are some examples you're running into and how does that relate to how things might evolve going forward? >> Sure, so there is a multitude of different problems that we work on but if you want to stick just to the fundamentals? Let's take one gigantic issue that everyone's kind of tackling from different perspectives, let's talk about scale. Scale is, especially in block chains especially challenging just because of how the technology works. How decentralized can you get before you're faced with gigantic latencies and before transaction cost are kind of through the roof? When you think about it, that is all a result of how we kind of contemplate these early stage networks. It was always the one network that is going to scale to infinity. Absolutely not the way it's going to work out. So from my perspective, again, sticking to this one issue, if you could actually give me a decentralized rail that maintains consensus throughout two networks, I can now actually have two trusted kind of go-tos instead of always putting the full brunt of the throughput on one single network. For us, that's kind of a no brainer application to interoperability. If you could actually give me all these trusted networks that work in tandem, I could now start splicing throughputs across many different parallel kind of rails. Not to similar than how we can solve for super computing. We understood there is a limit on how fast can a single CPU go and we started going wide. >> That's an interesting point, I want to just double click on that for a second because if you think about it, why would I have multiple rails and multiple systems? Maybe the use cases are different for them. >> Correct. >> You don't want to have to pick one cloud or one chain to rule them all because it's not optimized. We saw that with monolithic systems and cloud is all about levels of granularity and micro service and micro everything, right? >> Correct. >> And I would also say that gets into a security issue as well, right? You're talking about multiple layers but you also will have multiple layers of permission. You'll have multiple layers of how much information someone can see and what I think is emerging, if data is the new oil, then what's emerging is for the first time we're now able to trust data that we do not own. For corporations who say, "I don't know to market to you "if I don't know everything about you." But at the end of the day, they want to be able to leverage your data but they don't need to secure it and I think that cybersecurity issue is a huge, huge thing that's definitely coming. >> I want to get both of your thoughts on this, because we were talking about this last night. We were riffing on the notion that with cloud compute and data really drove scale. So Amazon is a great example and their value now is things like Kinesis and Aurora, some of their fastest growing services. You got SageMaker, probably will be announced at re:Invent coming up as the fastest growing service, right now it's Aurora. All data concepts. So the dataization really made cloud, great. >> True. >> Okay what's the analog for crypto and block chain? Tokenization is an interesting concept. There's almost an extension of cloud where you're saying, hey, with tokenization, the tokenization phase, how do you explain that to a common person? You say, is token going to be the token and the money aspect of and the economics the killer app? How's it transverse the infrastructures, plural? >> Yeah, or is the wallet going to be the browser? Or how are all of these things happening? >> How do you make sense of this? What's your reaction to that trend? >> So I actually get excited when I think about what token, on the most profound level, actually means. When you kind of think of where value happens in the context of these gigantic enterprises, right? You think of Apple, Amazon, Google, Facebook, any of them, and you kind of think of what the product is, it's all about the data and it's all about how do you convince people to give up data so they can monetize on it. And then you have two distinct, like literally gigantic groups of stakeholders at play. You have the users, that essentially get something free, right? I get to post on Facebook or I get to write an e-mail on Gmail. Then you have the stakeholders that actually extract all that value from my activities. A token, I think most profoundly represents, how do we actually get to a unified group where the user himself is the stakeholder that gets to extract the data? And again, the proposition is pretty straightforward. The more you use a network and the more the network becomes valuable and grows, the more value the token that drives at it. >> So it changes the value capture equation? >> Correct, different model altogether. >> The value creators get to capture the value and obviously network effects plays a big part in this? >> Yes. >> Which is your wheelhouse. (laughing) >> Yeah, definitely. I think it really comes down to core principles. Now you're able to really get down, to what Kesem was talking about, about when you're designing a token or if you're designing an incentive mechanism, you're really going down to the sort of deep game theory of why people do specific things and if we can financially incentivize people to do good rather than punish them or fine them for doing bad then we can actually create value for everyone. We're designing a new economy that now has the ability to propel itself in a fair and prosperous way, if done correctly, obviously that's the disclaimer afterwards, but. >> I love what you're saying there because if you look at collective intelligence a lot of the AI concepts came around from collective intelligence, predictive analytics, prescriptive analytics all came around using data to create value. I always talk about fake news because we have a cloud of media business that's kind of tokenized now but fake news it two things, it's payload, fake news, the fake content and then the infrastructure dynamics that they arbitraged, with network effects. They targeted specific people, fake payload, but the distribution was a network effect. Again, this was the perverse incentive that no one was monitoring, there was no- >> Well and I think in that case, yes there is news that is inherently false information but then there's also a whole spectrum of trueness, if you want to call it that so now we have this technology that allows us to overlay on top of that and say, "Well what is the providence of my information?" And with different layers of block chain systems you're actually able to prove the providence of your information without exposing the user's privacy and without exposing the whole supply chain of the media because there's like media buyers, go through all kinds of hands. >> And we believe the answer to fake news, frankly, is data access, collective intelligence and something like a block chain where you have incentive systems to filter out the fake news. >> Totally. >> Exactly. >> Reputation systems, these things are not new concepts. >> It's all about stake at the end of the day, right? It's how do you keep a stakeholder accountable for their action? You need backing so I think we're definitely on the same page. >> I love, I could talk about fake news all day because we think we can solve that with our CUBEcoin token coming out soon. I want to shift gears and talk about some of the examples we've seen with cloud. >> Sure. >> And try to map that to some navigation for people in how to get through the block chain token world. One of the key things about the cloud was something they called shadow IT. Shadow IT was people who said, hey, you know what? I could just put my credit card down and move this non core thing out in this cloud and prove to my boss, show them, not pitch 'em on the Power Point deck, to say look it, I just did this for that cost in this timeframe, and that started around 2009/2010 timeframe, the early digerati or the clouderati kind of did that but around 2012 it became, wow, this shadow IT is actually R and D practice. >> Mm-hmm. >> Right. >> You started to see that now, so the question that we see for people evaluating in the enterprise is how do you judge what's a good project? Certainly people are kicking the tires and doing a little bit, I won't call it shadow IT, but they're taking on some projects as you were talking about on the panel. How should they, the enterprises in general, the large companies, start thinking about how to enable a shadow IT-like dynamic and how should they evaluate the kind of projects? I think that's an area people just don't know what to look for. Your thoughts? >> I want to add a premise to that, because I think that's absolutely the right question to ask. We also need to add the why. Why should we, as people that do native crypto currency, even care about enterprises? A lot of people kind of theorized when Bitcoin was created to say it was anti institutional is an understatement, right? Aren't we meant to kill enterprise? The thing is, I don't think it's going to be a big bang. I don't think it's going be we wake up and nobody's using banking anymore or nobody's using the traditional healthcare or government and you know whatever insurance policies. We care about block chain in the context of enterprise because we think block chain is a fundamentally better model of doing things. It kind of does away with the black box where I need to be in business, I need to blindly trust you and it introduces a much more transparent and democratic model of doing things. We absolutely want to introduce and make block chain mainstream because that's important for us. When you think of how we do it, to your question, AION is all about interoperability, right? We create a solution that helps scale and helps different networks, decentralized networks, communicate to each other. What we also do with MavenNet, the company I run, is essentially make that enterprise friendly. It's extremely hard to do adoption and implementation within an enterprise, they're very immune to change. >> Antibodies as they say. >> Oh. >> The antibodies to innovation, they kill innovation. >> Totally, so going back to your original question, it all starts with a P and L. If somebody is going to authorize, you know, an actual production system in enterprise for block chain, it needs to create a tangible value, a tangible return, quickly and that's the key. The model that actually scales is you start by flushing out inefficiency plate. You show the enterprise how you could actually achieve, I don't know 20%/30%, that's the order of magnitude that they care about, efficiency by moving some part of your value chain on top of a block chain. >> It has to have an order of magnitude difference or so. I mean cloud was a great example, too, it changes the operating model. >> Yeah. >> They achieve what they wanted to achieve faster and more efficiently and operated it differently. >> Correct. >> And people were starting at it like a three headed monster like what is this thing, right? The cloud thing. And throwing all kinds of fud out there, but ultimately at the end of the day, it's a new operating model for the same thing that they're trying to do with the old stuff. >> Mm-hmm. >> I mean, it's almost that simple. >> Yeah, I think in some cases you need to really, in my previous life at the Block Chain Research Institute, we encouraged a lot of our clients to really take a step back and say, well will I actually, A, will I have this problem in eight years or seven years or 20 years or 50 years, if we're really fundamentally building a new financial system or a new way of doing things that is fundamentally different? Are we building it on old technology? We need to make sure that, and that's why you've seen banks were the first in the door to say, "Yeah, payments, that sounds great, that sounds great." But the real applications that we're seeing from banks are in loyalty, they're in AMLKYC, they're in the sort of fringe operations. Something like payments is going to take a really long time to push through because of those legacy systems because payments is the fundamentals of what banks do. >> This is an interesting point, I want to get your thoughts to end the segment because I think one of the things that we've certainly seen with cloud that over the generational shifts that have happened, the timeframe for innovation is getting shorter and shorter, so timeframe is critical so if the communities are fumbling around hitting that time to value, it seems to be trending to faster and we don't want to hear slower because these systems are inadequate, they're antiquated. >> Mm-hmm. >> These are the systems that are disrupted so the timing of, whether it's standards, or interoperability or business models, operating models, they got to be faster. >> Yeah. >> That's the table stakes. >> I think it all comes down to collaborative governance. >> People have to figure out block chain faster. >> Yeah. >> What's holding us back? Or what's accelerating us? What's the key for the community at large from the engineering community and the business community to make it go faster? Your thoughts? >> Right, so I think we're still searching for the next killer app. If Bitcoin is the reason we're all sitting here today and I profoundly believe that. >> Yeah. >> What is the next thing that drives change on a global scale? That's kind of what we're trying, collectively as an industry, to figure out. Sure, many kind of roadblocks on the way. Some of them educational, perceptional, regulation, technology, but the next big wave that's going to accelerate us to the next ten years of block chain is that next killer app. Organizations such as myself, Jenna, that's our day job, we wake up and that's what we do. >> I mean I've always said, and Dr. Wong, who's the founder of Alibaba Cloud agreed with me, I've been saying that the TCPIP protocol, that standard really enabled a lot of interoperability and created lots of diverse value up the stacks of the OSI model, Open Systems Interconnect, seven layer model, actually never got standardized. It's kind of stopped at TCPIP and that was good, everyone snapped at the line, that created massive value. >> But that's a collaborative governance thing. That's people coming together and saying that these are the standards that we wish to adhere to. >> We need the moment right now. >> Yeah, so you see organizations like the Enterprise Ethereum Alliance coming out with a prospective list of standards that they think the community should adhere here. You know you have the ERC20 standard, you have all these different organizations, the World Economic Forum is playing a role in that and the UN is playing a role, especially when it comes to identity and those kind of really big, societal issues but I think that it comes down to that everyone plays a role that I'm doing my best, I think it's going to be somewhere in the realm of data so that's where I've chosen to sort of make my course. >> I think this is a good conversation to have, and I think we could continue it. I mean, I read on Medium, everyone's reading these fat protocols, thin protocols but at the end of the day what does that matter if there's no like scale? >> Yeah. >> You can have all the fat protocols you want, more of a land grab I would say but there's certainly models but is that subordinate or is that the cart before the horse? This is the conversation I think is in the hallways. >> Totally agree, totally agreed. >> Guys, thanks so much for coming on theCUBE, really appreciate it. Breaking down real world applications of block chain we're at the Global Cloud and Block Chain Summit. It's an inaugural event and think it's going to be the kind of format we're going to see more of, cloud and block chain coming together. Collision course or is it going to come in nicely and land together and work together? We'll see, of course theCUBE's covering it. Thanks for watching. Stay with us for more all day coverage. Part of the Futurist Conference coming up the next two days. We're in Toronto, we'll be back with more after this short break. (theCUBE theme music)

>> Live from Toronto Canada, it's The Cube, covering Global Cloud and Blockchain Summit 2018, brought to you by The Cube. >> Hello, everyone welcome back to The Cube's live coverage here in Toronto for the first Global Cloud and Blockchain Summit in conjunction with the Blockchain futurist happening this week it's run. I'm John Fourier, my cohost Dave Vellante, we're here with Cube alumni, Bradley Rotter, pioneer Blockchain investor, seasoned pro was there in the early days as an investor in hedge funds, continuing to understand the impacts of cryptocurrency, and its impact for investors, and long on many of the crypto. Made some great predictions on The Cube last time at Polycon in the Bahamas. Bradley, great to see you, welcome back. >> Thank you, good to see both of you. >> Good to have you back. >> So I want to just get this out there because you have an interesting background, you're in the cutting edge, on the front lines, but you also have a history. You were early before the hedge fund craze, as a pioneer than. >> Yeah. >> Talk about that and than how it connects to today, and see if you see some similarities, talk about that. >> I actually had begun trading commodity futures contracts when I was 15. I grew up on a farm in Iowa, which is a small state in the Midwest. >> I've heard of it. >> And I was in charge of >> Was it a test market? (laughing) >> I was in charge of hedging our one corn contract so I learned learned the mechanisms of the market. It was great experience. I traded commodities all the way through college. I got to go to West Point as undergrad. And I raced back to Chicago as soon as I could to go to the University of Chicago because that's where commodities were trading. So I'd go to night school at night at the University of Chicago and listen to Nobel laureates talk about the official market theory and during the day I was trading on the floor of the the Chicago Board of Trade and the Chicago Mercantile Exchange. Grown men yelling, kicking, screaming, shoving and spitting, it was fabulous. (laughing) >> Sounds like Blockchain today. (laughing) >> So is that what the dynamic is, obviously we've seen the revolution, certainly of capital formation, capital deployment, efficiency, liquidity all those things are happening, how does that connect today? What's your vision of today's market? Obviously lost thirty billion dollars in value over the past 24 hours as of today and we've taken a little bit of a haircut, significant haircut, since you came on The Cube, and you actually were first to predict around February, was a February? >> February, yeah. >> You kind of called the market at that time, so props to that, >> Yup. >> Hope you're on the right >> Thank you. >> side of those shorts >> Thank you. >> But what's going on? What is happening in the capital markets, liquidity, why are the prices dropping? What's the shift? So just a recap, at the time in February, you said look I'm on short term bear, on Bitcoin, and may be other crypto because all the money that's been made. the people who made it didn't think they had to pay taxes. And now they're realizing, and you were right on. You said up and up through sort of tax season it's going to be soft and then it's going to come back and it's exactly what happened. Now it's flipped again, so your thoughts? >> So my epiphany was I woke up in the middle of the night and said oh my God, I've been to this rodeo before. I was trading utility tokens twenty years ago when they were called something else, IRUs, do you remember that term? IRU was the indefeasible right to use a strand of fiber, and as the internet started kicking off people were crazy about laying bandwidth. Firms like Global Crossing we're laying cable all over the ocean floors and they laid too much cable and the cable became dark, the fiber became dark, and firms like Global Crossing, Enron, Enron went under really as a result of that miss allocation. And so it occurred to me these utility tokens now are very similar in characteristic except to produce a utility token you don't have to rent a boat and lay cable on the ocean floor in order to produce one of these utility tokens, that everybody's buying, I mean it takes literally minutes to produce a token. So in a nutshell it's too many damn tokens. It was like the peak of the internet, which we were all involved in. It occurred to me then in January of 2000 the market was demanding internet shares and the market was really good at producing internet shares, too many of them, and it went down. So I think we're in a similar situation with cryptocurrency, the Wall Street did come in, there were a hundred plus hedge funds of all shapes and sizes scrambling and buying crypto in the fall of last year. It's kind of like Napoleon's reason for attacking Russia, seemed like a good idea at the time. (laughing) And so we're now in a corrective phase but literally there's been too many tokens. There are so many tokens that we as humans can't even deal with that. >> And the outlook, what's the outlook for you? I mean, I'll see there's some systemic things going to be flushed out, but you long on certain areas? What do you what do you see as a bright light at the end of the tunnel or sort right in front of you? What's happening from a market that you're excited about? >> At a macro scale I think it's apparent that the internet deserves its own currency, of course it does and there will be an internet currency. The trick is which currency shall that be? Bitcoin was was a brilliant construct, the the inventor of Bitcoin should get a Nobel Prize, and I hope she does. (laughing) >> 'Cause Satoshi is female, everyone knows that. (laughing) >> I got that from you actually. (laughing) But it may not be Bitcoin and that's why we have to be a little sanguine here. You know, people got a little bit too optimistic, Bitcoin's going to a hundred grand, no it's going to five hundred grand. I mean, those are all red flags based on my experience of trading on the floor and investing in hedge funds. Bitcoin, I think I'm disappointed in Bitcoins adoption, you know it's still very difficult to use Bitcoin and I was hoping by now that that would be a different scenario but it really isn't. Very few people use Bitcoin in their daily lives. I do, I've been paying my son his allowance for years in Bitcoin. Son of a bitch is rich now. (laughing) >> Damn, so on terms of like the long game, you seeing the developers adopted a theory and that was classic, you know the decentralized applications. We're here at a Cloud Blockchain kind of convergence conference where developers mattered on the Cloud. You saw a great developer, stakeholders with Amazon, Cloud native, certainly there's a lot of developers trying to make things easier, faster, smarter, with crypto. >> Yup. >> So, but all at the same time it's hard for developers. Hearing things like EOS coming on, trying to get developers. So there's a race for developer adoption, this is a major factor in some of the success and price drops too. Your thoughts on, you know the impact, has that changed anything? I mean, the Ethereum at the lowest it's been all year. >> Yup. Yeah well, that was that was fairly predictable and I've talked about that at number of talks I've given. There's only one thing that all of these ICOs have had in common, they're long Ethereum. They own Ethereum, and many of those projects, even out the the few ICO projects that I've selectively been advising I begged them to do once they raised their money in Ethereum is to convert it into cash. I said you're not in the Ethereum business, you're in whatever business that you're in. Many of them ported on to that stake, again caught up in the excitement about the the potential price appreciation but they lost track of what business they were really in. They were speculating in Ethereum. Yeah, I said they might as well been speculating in Apple stock. >> They could have done better then Ethereum. >> Much better. >> Too much supply, too many damn tokens, and they're easy to make. That's the issue. >> Yeah. >> And you've got lots of people making them. When one of the first guys I met in this space was Vitalik Buterin, he was 18 at the time and I remember meeting him I thought, this is one of the smartest guys I've ever met. It was a really fun meeting. I remember when the meeting ended and I walked away I was about 35 feet away and he LinkedIn with me. Which I thought was cute. >> That's awesome, talk about what you're investing-- >> But, now there's probably a thousand Vitalik Buterin's in the space. Many of them are at this conference. >> And a lot of people have plans. >> Super smart, great ideas, and boom, token. >> And they're producing new tokens. They're all better improved, they're borrowing the best attributes of each but we've got too many damn tokens. It's hard for us humans to be able to keep track of that. It's almost like requiring a complicated new browser download for every website you went to. We just can't do that. >> Is the analog, you remember the dot com days, you referred to it earlier, there was quality, and the quality lasted, sustained, you know, the Amazon's, the eBay's, the PayPal's, etc, are there analogs in this market, in your view, can you sniff out the sort of quality? >> There are definitely analogs, I think, but I think one of the greatest metrics that we can we can look at is that utility token being utilized? Not many of them are being utilized. I was giving a talk last month, 350 people in the audience, and I said show of hands, how many people have used a utility token this year? One hand went up. I go, Ethereum? Ethereum. Will we be using utility tokens in the future? Of course we will but it's going to have to get a whole lot easier for us humans to be able to deal with them, and understand them, and not lose them, that's the big issue. This is just as much a cybersecurity play as it is a digital currency play. >> Elaborate on that, that thought, why is more cyber security playing? >> Well, I've had an extensive background in cyber security as an investor, my mantra since 9/11 has been to invest in catalyze companies that impact the security of the homeland. A wide variety of security plays but primarily, cyber security. It occurred to me that the most valuable data in the world used to be in the Pentagon. That's no longer the case. Two reasons basically, one, the data has already been stolen. (laughing) Not funny. Two, if you steal the plans for the next generation F39 Joint Strike Force fighter, good for you, there's only two buyers. (laughing) The most valuable data in the world today, as we sit here, is a Bitcoin private key, and they're coming for them. Prominent Bitcoin holders are being hunted, kidnapped, extorted, I mean it's a rather extraordinary thing. So the cybersecurity aspect of if all of our assets are going to be digitized you better damn well keep those keys secure and so that's why I've been focused on the cybersecurity aspect. Rivets, one of the ICOs that I invested in is developing software that turns on the power of the hardware TPM, trusted execution environment, that's already on your phone. It's a place to hold keys in hardware. So that becomes fundamentally important in holding your keys. >> I mean certainly we heard stories about kidnapping that private key, I mean still how do you protect that? That's a good question, that's a really interesting question. Is it like consensus, do you have multiple people involved, do you get beaten up until you hand over your private key? >> It's been happening. It's been happening. >> What about the security token versus utility tokens? A lot of tokens now, so there's yeah, too many tokens on the utility side, but now there's a surge towards security tokens, and Greg Bettinger wrote this morning that the market has changed over and the investor side's looking more and more like traditional in structures and companies, raising money. So security token has been a, I think relief for some people in the US for sure around investing in structures they understand. Is that a real dynamic or is that going to sustain itself? How do you see security tokens? >> And we heard in the panel this morning, you were in there, where they were predicting the future of the valuation of the security tokens by the end of the year doubling, tripling, what ever it was, but what are your thoughts? >> I think security tokens are going to be the next big thing, they have so many advantages to what we now regard as share certificates. My most exciting project is that I'm heavily involved in is a project called the Entanglement Institute. That's going to, in the process of issuing security infrastructure tokens, so our idea is a public-private partnership with the US government to build the first mega quantum computing center in Newport, Rhode Island. Now the private part of the public-private partnership by the issuance of tokens you have tremendous advantages to the way securities are issued now, transparency, liquidity. Infrastructure investments are not very liquid, and if they were made more liquid more people would buy them. It occurred to me it would have been a really good idea if grandpa would have invested in the Hoover Dam. Didn't have the chance. We think that there's a substantial demand of US citizens that would love to invest in our own country and would do so if it were more liquid, if it was more transparent, if the costs were less of issuing those tokens. >> More efficient, yeah. >> So you see that as a potential way to fund public infrastructure build-outs? >> It will be helpful if infrastructure is financed in the future. >> How do you see the structure on the streets, this comes up all the time, there's different answers to this. There's not like there's one, we've seen multiple but I'm putting a security token, what am i securing against, cash flow, equity, right to convert to utility tokens? So we're starting to see a variety of mechanisms, 'cause you have to investor a security outcome. >> Yeah, so as an investor, what do you look for? >> Well, I think it's almost limitless of what these smart securities, you know can be capable of, for example one of the things that were that we're talking with various parts of the government is thinking about the tax credit. The tax credit that have been talked about at the Trump administration, that could be really changed on its head if you were able to use smart securities, if you will. Who says that the tax credit for a certain project has to be the same as all other projects? The president has promised a 1.5 trillion dollar infrastructure investment program and so far he's only 1.5 trillion away from the goal. It hasn't started yet. Wilbur Ross when, in the transition team, I had seen the white paper that he had written, was suggesting an 82% tax credit for infrastructure investment. I'm going 82%, oh my God, I've never. It's an unfathomable number. If it were 82% it would be the strongest fiscal stimulus of your lifetime and it's a crazy number, it's too big. And then I started thinking about it, maybe an 82% tax credit is warranted for a critical infrastructure as important as quantum computing or cyber security. >> Cyber security. >> Exactly, very good point, and maybe the tax credit is 15% for another bridge over the Mississippi River. We already got those. So a smart infrastructure token would allow the Larry Kudlow to turn the dial and allow economic incentive to differ based on the importance of the project. >> The value of the project. >> That is a big idea. >> That is a big idea. >> That is what we're working on. >> That is a big idea, that is a smart contract, smart securities that have allocations, and efficiencies, and incentives that aren't perverse or generic. >> It aligns with the value of the society he needs, right. Talk about quantum computing more, the potential, why quantum, what attracted you to quantum? What do you see as the future of quantum computing? >> You know, you don't you don't have to own very much Bitcoin before what wakes you up in the middle of the night is quantum computing. It's a hundred million times faster than computing as we know it today. The reason that I'm involved in this project, I believe it's a matter of national security that we form a national initiative to gain quantum supremacy, or I call it data supremacy. And right now we're lagging, the Chinese have focused on this acutely and are actually ahead, I believe of the United States. And it's going to take a national initiative, it's going to take a Manhattan Project, and that's that's really what Entanglement Institute is, is a current day Manhattan Project partnering with government and three-letter agencies, private industry, we have to hunt as a pack and focus on this or we're going to be left behind. >> And that's where that's based out of. >> Newport, Rhode Island. >> And so you got some DC presence in there too? >> Yes lots of DC presence, this is being called Quantum summer in Washington DC. Many are crediting the Entanglement Institute for that because they've been up and down the halls of Congress and DOD and other-- >> Love to introduce you to Bob Picciano, Cube alumni who heads up quantum computing for IBM, would be a great connection. They're doing trying to work their, great chips to building, open that up. Bradley thanks for coming on and sharing your perspective. Always great to see you, impeccable vision, you've got a great vision. I love the big ideas, smart securities, it's coming, that is, I think very clear. >> Thank you for sharing. >> Thank you. The Cube coverage here live in Toronto. The Cube, I'm John Furrier, Dave Vellante, more live coverage, day one of three days of wall-to-wall coverage of the Blockchain futurist conference. This is the first global Cloud Blockchain Summit here kicking off the whole week. Stay with us for more after this short break.

>> Live, from Toronto, Canada, it's theCUBE! Covering Global Cloud and Blockchain Summit 2018, brought to you by theCUBE. >> So, welcome to the Global Cloud and Blockchain Summit. I'm about to hand you over to John Furrier, who is the Co-Founder and Co-CEO of SiliconANGLE Media and Executive Editor at theCUBE, he's about to do a Fireside Chat with Al and Mathew, I'll let him introduce you to them as well. He's also involved in a major blockchain project himself, so he's going to get into that with those guys as well. So, and tomorrow we start at nine, in the meantime, enjoy the evening, enjoy the food, enjoy the chat, and I'll let you go. >> Okay. Hello? Thank you Ruth, appreciate it, thanks everyone for being part of this panel, Fireside Chat, want to make it loose, but high impact for you guys, I know, having some cocktails, having a good time. If there's any questions during, then at the end we'll pass the mic around, but. We want to have a conversation, kind of like we always do down in the lobby bar, just talking about crypto and cloud, and we ended up talking about cloud computing and crypto a lot because those are two areas that are kind of converging, and the purpose of this event. So we really wanted to share some thoughts around those two massively growing markets, one is already growing, it's continuing to be great: the cloud, and blockchain certainly is changing everything. These two important topics, we want to flesh them out, Al Burgio is the Serial Entrepreneur/Founder of DigitalBits, he's founded companies both in cloud and blockchain, so he brings a great perspective. And Matt Roszak, leading crypto investor, entrepreneur and advocate, well known in the crypto space for goin' way back, I think you gave a couple bitcoins to some very famous people early on, we'll get into that a little bit later. So guys, thanks for being part of the panel and Fireside. First question is: we know how big the money is, I mean the money is crypto is is flowin' around the world, and cloud computing we've seen specifically, and certainly in coverage now with Amazon's success, Amazon Web Services, and Microsoft and others. Trillions of dollars being disrupted in the traditional kind of the enterprise, data center area, and blockchain is doing that too, so we want to get into that. But first, before we get into it, I want you guys to take a minute to explain for the folks, just to set the context, the kinds of projects you're working on. Now Al, you have DigitalBits, Matt you're investing and you're finding a lot of interesting token dynamics. So just take a minute. Al, start. >> (mic off) So-- Everybody hear me okay? Alright, perfect. Well thanks for that lovely intro. Yes, my name is Al Burgio, I'm, I've founded a few companies, as John mentioned. Before the cloud there was internet, (light laugh) and so it started for me in the late '90s in the e-commerce era. But more recently I pioneered what's known as Interconnection 2.0, and I did that with the company called Console, for those that may know PCCW, recently it was acquired by PCCW. And with that we disrupted the way networks at the core of the internet were connected together More recently I've founded the DigitalBits project, and now DigitalBits blockchain network, and with that, you can kind of think of that as the trading and transaction layer for the points economy and other digital assets, and you can do a lot of really interesting thing with that, it's really about bringing blockchain to the masses. >> Matt, what're you workin' on? >> So, Matthew Roszak, Co-Founder and Chairman of Bloq. Bloq is a enterprise software company, we do two things, the premise is the tokenization of things, so we think the money identity, new layers of the internet are going to be tokenized. And so, we go to market in two ways, one is through Bloq Enterprise, and these are all the software layers you need to to connect to tokenized networks, so think a wallet, a node, a router, etc. And then Bloq Labs we build, and partner with, some of the leading tokenize networks and applications, so we build a connective tissue and then we actually build these new networks. I started this space as an investor over five/six years ago, investing in some of the best entrepreneurs and technologists in the space build a great network. But I love building companies, and so my Co-Founder and I, Jeff Garzik, built Bloq two and a half years ago. And then lastly, also serve of Chairman of the Chamber of Digital Commerce, so, so if you believe in these new tokenized money layers, identity layers, etc, regulation comes into play. Certainly today from an institutional adoption level, and so if you care about this space, you need to spend time to kind of help that dialogue improve; this technology moves way faster than folks in DC and elsewhere, so. >> And the project that we're workin' on at SiliconANGLE, is we've tokenized our media platform, and we're opening it up to a token model, and have kind of changed the game. So all three of us have projects, want to put those in context, we build everything on Amazon Web Services, so, the view of the cloud, we also cover it. The cloud computing market is booming, we see that Amazon Web Services numbers empower the earnings for Amazon's company, obviously Apple's trillion dollar evaluation those are clear case studies; but blockchain could potentially disrupt it all, and Al, I want to get your thoughts, because even today in the news at Microsoft Azure, which is their big cloud provider, announced blockchain as a service. And folks that are in either the data center business or in cloud know the shift that's happening in the IT world, but no ones really connected the dots on where blockchain intersects, and also, is it an opportunity for the cloud guys, what's the landscape look like, so. What's your thoughts on that, how are they connected, what does it mean, how does a cloud company maintain their relevance and competitiveness with blockchain? >> Well, just pointing on the fact that, you know, today we had that new Microsoft, the Azure cloud, their support and evangelism for blockchain. You know, a company, I think it's very important that this isn't an ICO, two kids in a garage saying their doing something blockchain this is a massive, multi-billion dollar company; and making a decision like that is not trivial, it's many, many departments, a lot of resources, before such a thing's announced. So, that's, not only is it validation, but it's a leading indicator as to this trend, that this is clearly something that's important. And a lot of people, if you're not paying attention, you need to be paying attention, including if you're in the cloud industry, 'cause many companies obviously do compete with, with Microsoft and AWS, so. It may be still early, but it's not that early, in light of the news that we saw today. With that, I would say that, a lot of the parallels I like to kind of, if I was an infrastructure provider I'd look at this from the standpoint of the emergence of Linux when it first came on the scene. What was important for companies like Red Hat to be successful, they had competition at the time, and you had shortages of Linux, let's say engineers, and what have you. And so, a company like Red Hat built a business around that, and they did that by how they kind of surfaced and validated themselves to the enterprise of that era, was partnering with hardware companies, so, it was Intel, IBM, and then Dell, HP, and they all followed, and then all of a sudden, which version of Linux do you want to use? It's Red Hat, you're paying for that support, you're paying Red Hat. And, you know, then they had their hockey stick moment. Today, you know, it's not about hardware companies per se, it's about the cloud, right? So cloud is the new hardware per se, and many enterprises obviously are looking at cloud computing companies and cloud computing providers, infrastructure providers, as the company that they need to support them with the infrastructure that they use, or sorry the technologies that they use, right? Because they're not necessarily supporting these things and making sure that they're always on within the basement of that enterprise, they're depending, or outsourcing, to depending on these managed IT providers. This was very important that whatever technologies they're using in the lab, that ultimately their infrastructure partners are able to support the implementation, the integration, the ongoing support of these technologies. So if you think of blockchain like an operating system or a database technology, or whatever you want to call it, it's important that you're able to really identify these key trends, and be able to support your customer and what they're going to need, and ultimately for them, they can't have a clog in their digital supply chain, right? So, it's clearly emerging. Microsoft is validating that today, you know, clearly they have the data, that they're seeing for their existing enterprise customers, and they don't want to lose them. >> Yeah, but remember when cloud came out; you and I have talked about this many times Al that it wasn't easy to use, I remember when Amazon Web Services came out, it was just basically, it was hard to command line, basically you had to use it, so, it became easier now, it's so easy and consumable. Blockchain, similar growing pains, but, we don't want to judge it too early with the opportunity that it has, it's going to get easier, what're your thoughts? And it has to scale by the way, Amazon, at a large scale. >> Yeah, I mean-- >> So blockchain has to scale and be easier, your thoughts? >> Another kind of way to think of it is, to not necessarily think of cloud computing, but the evolution the internet went, you know, in Internet 1.0, you know, we went through this dial-up modem era, things were very raw back then; great visions we had of the future, like, it's going to be amazing for video one day! But, not during dial-up modem era, and eventually, you know, it eventually happened. And user interfaces improved, and tool sets improved and so forth. You know, fast forward to today, we have all of that innovation to leverage, so things will move a lot faster with blockchain, it did start very raw, but it's, it's moving much faster than anything we've seen definitely in the '90s and in the last decade, so. It's just, you know, it's a matter of moments, not years. >> And I think Al brings up a great point on leverage, because Amazon leverages infrastructure to a point where it's larger than Google, Azure, and IBM's public cloud combined, and so yeah, massive leverage there. And so, when these big cloud providers provide this blockchain as a service, it is instrumented and built on top of their existing infrastructure, not necessarily on blockchain infrastructure. So, it's an interesting dynamic where they're putting it on top of existing infrastructure that's there, but what's being build right now is the decentralized Amazon Web Services. So you have every layer of Amazon being re-imagined, like, and incentivized so you have distributed compute and access and storage and database. And so, what will be interesting to see is that, given this massive opportunity, will Amazon and some of these other incumbent cloud providers become the provisioning networks of the future? Of all this new decentralized resources that get, again, if you want storage, you have to start having smarts to say: if I'm going to go to Sia or Filecoin or Genaro or Storj, compute, etc; you have to start being a provisioning layer on top of that to kind of, you know, make that blockchain essentially work. So, it'll be interesting to see the transition 'cause today the lightweight versions to say yeah, I have a blockchain as a service strategy, and that's like, well done, and check the box. Now, the question is how far in this new world will they go down? And, as it gets more decentralized, as universities and governments, corporations, plug their access utility into these networks, and to see how that changes. That is much bigger than the Amazon of today. >> I think that's an interesting point, I want to just drill down on that if you don't mind, 'cause I think that's a fundamental observation that every layer's going to be decentralized. The questions I think I'm asking and I'm seeing is: How does it all work together? And then what's the priorities? And the old model was easy; got to get the infrastructure, got to get servers, (laughs lightly) and you know, work your way up to the top of the stack. What cloud brings also is that: a software developer can whip up an application, maybe a dApp on a test network and go viral, and the next thing you know they have a great opportunity, and then they got to build down. So the question is: What are you seeing in terms of priorities on stacks, portions of the stack that are being decentralized and tokenized, do you see patterns, trends, as an investor, is there a hotter (laughs) area than others, how do you look at that? >> Well, I think it's, it's in motion right now it's, like I said, every layer of AWS is getting thought through in how to create these digital cooperatives, I have excess storage, I'm going to contribute it to this network, and I'm going to get paid in tokens when a user uses that storage network, and pays for it in those native tokens and so that, coupled with all the other layers, is happening. From a user perspective, we may not want to be going to pick a database provider, a storage, a compute, etc, we're likely going to say: I want a provisioning layer, and provision this and execute this, much like if we, you know, there'll be new provisioning layers for moving money, I don't care if routes through Lightning or Litecoin or Doge or whatever, as long as the value gets across the pond or the app gets provisioned appropriately based on you know, time, security, and cost, and whatever other tendance are important, that's all I care about, but; given the depth and the market for all that, I think it'll be interesting to see how these are developed with the provisioning layers, and I would think Amazon or Azure, the future of that is, is more provisioning than actually going and doing all that at the end of the day. >> That's great. I want to get your thoughts guys on innovation. My good friend Andy Kessler wrote an op-ed in today's Wall Street Journal around, an article around the government, the US government getting involved. You know, there's Twitter, Facebook, the big platforms, in terms of how they're handling their media, but it brings up a good point that with more regulation, there's less innovation. You mentioned some things outside the United States, it's a global cloud, cloud's operating globally with regions, it's a global fabric. Startups are really hot in this area so; how do you view the ecosystems of startups, in terms of being innovative, things happening that you think that're good, and things that aren't good, obviously I'm not a big of the government getting involved, and managing startups, the ecosystems but, blockchain has a lot of alpha entrepreneurs jumping in, you've looked at all the top ventures, the legit ventures, they're all alpha entrepreneurs, multi-time serial entrepreneurs, they see the opportunity and they go for it. Is the startup environment good, is there enough innovation opportunities, what're you thoughts on the opportunity to be innovative? >> Yeah, Al and I were just talking about this before the panel here, and were talking about our travels in Asia, and when we go there it is 10, 100 X of energy and get-it factor, and capital, and the markets are just wildly more vibrant than you know, going to some typical markets here in San Fran and New York in North America, and, so it's interesting to see that when you heat map the world, what's really happening. And you know, people are always saying: oh well this, this FinTech, or InsurTech, or whatever tech, is going to make a dent in Silicon Valley or Wall Street. This technology, this new frontier, is definitely going to do that. I think some of that will get put into more focus based on regulation, and there's two things that will happen; there's obviously a lot of whippersnapper countries that are promoting a safe place to innovate with crypto, I think Malta, Gibraltar, Barbados, etc, and there were-- >> Even Bermuda's getting in on the mix now. >> Yeah! I mean so there's no shortage of that, and so, and obviously this ecosystem outpaces the pace of regulation and then we'll see like the US doing something, or you know, other fast followers to try and catch up, and say hey, we're going to do the cryptocurrency act of 2022, miners get free power, tax-free, you know crypto trading, you know just try and play catch up. 'Cause it's kind of hard in the last year or 18 months we've seen this ecosystem go from this groundswell to this now institutional discussion; and how do you back end the the banking, the custody, all these form factors that are still relatively absent. And so, you know, we're right in the middle of it. >> It's a whole new way, you got to follow the money, right? Al, you and I talked about this; capital markets, you know entrepreneurs need to raise money and that's a good thing, you need to get capital to do stuff. >> Yeah, this is a new phenomenon that the world has never experienced before, it's awesomeness when it comes to capital formation; you know, without capital formation there is no innovation. And so the fact that more capital can be raised, it's the ultimate crowd sourcing in such an efficient period of time, capital being able, the ability to track capital from various different corners of the world, and deploy that capital to try to fuel innovation. Of course, you know, not all startups or what have you succeed, but that was true yesterday, right? You know, 90% of startups fail, but they all will give it some meaningful amounts of checks, people were employed and innovation was tried; and every once in a while something emerges that's amazing. If you can do that faster, right, when you have the opportunity to produce more and more innovation. And, of course with something so new as cryptocurrency, things like ICOs and what have you, people may kind of refer to it as the wild wild West, it's not, it's an evolution. And you have-- >> It's still the wild west though, you got to admit. (laughs) >> Well, it is but, we're getting better at it, right? As a world, this isn't the Silicon Valley community getting better at venture capital or some other part of the United States or Canada getting better at venture capital; this is the world as a whole getting better at capital formation. >> Yeah, that's a great point. >> In the new way of capital formation. >> And I wanted to just get an observation on that. I moved to Silicon Valley 20 years ago, and I love it there, for venture capital and new startups, it's the best place in the world. And I've seen people try to replicate Silicon Valley, we're the Silicon Valley of Canada, we're the Silicon Valley of the East or Europe, and it's always been hard to replicate, because it was a venture model, and you needed venture capitalists and you need money, you need a community, the culture, the failure, the starting over, and just, you know, gettin' back on the horse kind of thing. Crypto is the first time that I've seen the replica of that Silicon Valley dynamic, in a new way, because the money's flowing, (laughs) and there's community involved in crypto, crypto has a big community aspect to it. Do you guys see that as well? I mean I'm seeing, outside the United States, a lot of activity. Is that something that you're seeing? >> So, the first time we saw, well, last time we saw everybody trying to replicate Silicon Valley was first internet, you know, there was Silicon Swamp, there was Silicon Alley, there was silicon this-- >> Prairie. >> Every city was >> Silicon Beach. >> A silicon version of something, and then the capital evaporated, right? We had a mass correction happen. What wasn't being disrupted was value exchange, right, and so this is being created now, it is now possible for this to happen, and it's happening, we're seeing amazing things, Matt said, you know, in Asia. It's a truly awesome force, if anybody has an opportunity to go, they should go, it's unbelievable to experience it, and it really opens your eyes. >> And you've lived through a lot of investments during those .com days and through history now, you've seen a lot of different things. Your observations with the current state of the capital formation, startup landscapes, the global ecosystem around crypto and how it's different from say venture or classic rolling up companies and those kinds of things? >> Yeah, you hear a lot of this, you know, we're in a bubble, it's speculative, etc. And I think that when you look back at history of infrastructure, whether it's railroads, telephony, internet, and now crypto and blockchain, it's interesting, like, if you said: it would take this amount of money to innovate and come out the other end of internet with this kind of infrastructure, these kinds of applications, with these kinds of lessons learned, nobody would sign up for that number, right? It needs this fear, and greed, and all the other effervescence of markets to kind of come out the other end and have innovation. I think we're going through a very similar dynamic here with crypto and blockchain where you know, everything's getting tokenized, everything's getting decentralized. We're talking about fundamental things like money, you know, it's not like we're talking about pet food and women's shoes and airline tickets, we are talking about money, identity, things that will enable like other curves to really come into focus like in and out of things and the kind of compounding of intersections when some of these things get right is pretty extraordinary. And so, but I like what Al said in terms of capital formation and that friction to get from, you know, idea to capital to building, is getting compressed Yes, there will be edge cases of people taking advantage of that, but at the other end of this flow will be some amazing innovation. >> What do you guys think about the, if you had to answer the question with one answer, of what is the high order bit of why blockchain's so important? For me, I see it, from my standpoint, I'll just start, I see it making inefficient things more efficient for any use case, and that's being re-imagined, which is everything from IOT or whatever. Efficiency is a big thing, at least I see that. What do you guys see as a high order bit in terms of you know, the one thing that you'd say blockchain really impacts the world in terms of you know, impact, financial, etc? >> Well, I think with decentralization and all these things that we're seeing it's kind of evened the playing field. It's allowing for participation where parts of the world were unable to participate. And it's doing a whole lot of things in that area. And that's truly awesome, to really grow the economy, grow the global market, and the number of participants in that market in all areas. That's the ultimate trend at what's happening here. >> And your information? >> Absolutely, and I think there's two things, there's this blockchain dialogue, and then there's this crypto decentralization, tokenization dialogue, and on the blockchain side you have lots of companies engaging in blockchain and trying to figure out how it applies to their business, and you hear everything from McKinsey and Goldman saying financial services will save 100 billion dollars in operating expenses by applying blockchain technology, and that's great. That is probably low in terms of what they'll save, it's, to me, is just not the point of the technology, I think that when you kind of distill that down to say hey, for a group of folks to use this technology as a shared services thing to lower opex a trading settlement and decrease that, that's great, that is a step stone to creating these tokenized economies, these digital cooperatives. Meaning you contribute something and then you get something back, and it's measured in the value that this token is, like a barometric kind of value of how healthy that ecosystem is. And so, regulated public enterprises, and EC consortiums around insurance and financial services and banking, that is all fantastic, and that gets them in the pool, gets them exercising on what blockchain is, what it isn't, how they apply it, but it's, at the end of the day for them it's cost reduction The minute there's growth or IP, or disruption on the table, they're all going back to their boardrooms to say: hey let's do this, this, or that, but, if there's a way, my favorite class in college was industrial organization, and it sounds weird but, it was, it kind of told ya like how to dissect an industry, you know, what makes them competitive, who the market leaders are, and then, if you overlay like blockchain networks with tokens, with incentives, interesting things could happen, right? And so that future is going to be real interesting to see how market leaders think about how to tokenize their network, how to be, how to say: no I don't want to own this whole industrial network, I have to engage with some other participants and make sure everybody is incentivized to climb on board. So that I think is going to be more of the interesting part than just blockchain-ifying a workflow. >> Well let's just quickly drill down on that, token economics, what you're getting to. So let's assume blockchain just happens, as evolution of technology, let's just assume for a second that it's going to happen in a big way, it's private, public, hybrid chains, with all that good stuff happening, but the token economics is where the business value starts to be extracted, so the question for you is: How do you describe that to someone to look for, what are the key elements of token economics? When does it matter, when is it in play, and how should they be thinking about it? >> Yeah, I mean token economic design and getting a flywheel going to create a network and network effects is really important. You could have great technology, but Al could be a better marketer, and he gets tokens adopted better, and his network will do better because, you know, he was better able to get people to adopt and market a particular, you know, layer application. And so, it's really important to think about how you get that flywheel going, and how you get that kindling going on a particularly new ecosystem, and get users adoption and growth. That is really hard to do these days because some people don't even know what Bitcoin is, let alone to say I'm going to tokenize this layer, and every time you contribute, every time you take an action, you're going to get rewarded for it, and you're share the value of this network. >> Can you give me a good example of what's happening today that you can point to and say: that's a great example of token economics? >> Well, you see, I mean the most basic one is shared file storage, right? You know, it's like the Filecoin, Sia, Genaro model where, you know, you contribute you know, the unused storage in your laptop or your university data center or a corporate data center, and you say I'm going to contribute this, and when it's used I get these tokens and, you know at the end of the day or week or year you see what these tokens are worth, and was that worth your contribution? And so as these markets develop, and as utility develops, we'll see what that holds. >> Al, you got an example you could share? DigitalBits is a good use case obviously. >> Actually, I'm not going to use DigitalBits (John laughs) just to be neutral. This is one that Matt will know very well, definitely better than I, but one that I've-- the simpler something is, the easier it is for people to understand, and its like oh that makes sense, you know. You know, Binance is one that's very simple, you know it's a payment token, if you pay with some other currency, you pay, you know, Pricex, if you pay in the next few years with their token, you'll get the service at a discount. And in addition to that, they're using a percentage of profits, I think it's every quarter, to buy back up to, ultimately up to, 50% of tokens that are in circulation. So, you know, it's driving value, and driving return, in essence, if I can use that word. So for a user it's simple to understand, for someone that likes to speculate it's easy for someone to understand in terms of how the whole model works, so it's not some insanely complicated mathematical equation, that we can yes we can trust the math. And so in some cases, some adoption is going to just be, you know, attract participants based on simplicity. In other cases the math is important, and people will care about that, so, you know not all things are necessarily equal, and not necessarily one method is right, but there are some simple examples out there that that have proven to be successful. >> That's awesome, one last question, before we open it up if anyone has any questions. If anyone has any questions, if they want to come up, grab the microphone, and ask the three of us if you've got anything on your mind. And while you're thinking about that I'll get the final question for these guys is: A lot of people ask me hey, I want to be on the right side of history, what side of the street should I be on when the reality comes down that decentralization, blockchain, token economics, decentralized applications, becomes the norm, and that re-imagining actually happens? I don't want to be on the wrong side of history. What should I be doing, how should I be thinking differently, who should I be following, what should I be paying attention to? How do you answer that question? >> I think, at the basic level, you know, turn off your phone, lock your door, and study this technology for a day, it's the best advice I could give. Two: buy some crypto. Once you kind of have crypto on your phone, in your wallet, something changes in your brain, I think you just feel like you-- >> You check the prices every day. (all laugh) >> You lose a lot of sleep. And then after that, you know, I think you start engaging in this space in a very different way. So I think starting small, starting basic, is an important tenet. And then, what's amazing about this space is that it attracts the best and brightest out of industry, and law, and government, and technology, and you name it, and I'm always fascinated the people that show up and they're like yeah, I'm in a 20 year, you know, veteran in this space and I want to get into blockchain, it just attracts some of the best and brightest. And, I think we're going to see a lot of experience coming into the space, you know, this has been a, what I'd say a bottoms up groundswell of crypto and blockchain and the evolution of the space. And I think we're starting to see more some more mature folks come in the space to to add some history and perspective and helpin' the build out of this, and to build a lot of these networks. I think that the kind of intersection of both is going to be very healthy for the space. >> Al, your thoughts? >> Definitely agree with Matt. Definitely to lock yourself up and just try to absorb information, everyone has access to the internet, there's plenty of information. If you don't like to read go watch a few YouTube videos, just people explaining the stuff, it's really fascinating, the various different use cases and so forth. You definitely have to buy some, and, you know, whether it's five dollars worth, just go through the whole experience of being able to trade something of value that a few years ago didn't exist, and be able to trade it for something else of value is a pretty phenomenal experience. Then trying to go buy something with it, it's even more of a fascinating experience, I just bought something that used, again, something that didn't exist a few years ago. But, what I would add to that as well, you really have to get out there; if you keep surrounding yourself with people saying aw, this is, eh, whatever, >> It's never going to work. >> It's crazy, it's for criminals, and all that fun stuff. You're going to be last place. So coming to conferences, obviously future's conference you're going to meet a lot of interesting, great people, and that consistent experience, you'll learn something every time. You know, at the end of the day, I remember, I'm sure all three of us remember, with the birth of the internet there was many people that said you know the internet thing, it's crap, it's for kids, you know. And we had first movers, we had willing followers, and then the unwilling followed, you don't want to end up being-- >> The unwilling followers. >> Yeah, the unwilling. >> Alright. Does anyone have any questions they'd like to ask? Come on up. Yeah. We're recording, so we want to get it on film. >> So I have two questions. The first one is for you, Al: Two years ago I interviewed with IIX before it was Console, and I want to know why you didn't hire me? (Sparse laughs) No I'm kidding! That was a joke. Actually, I thought each of you brought up some good points, minus you Al. (chuckles) I'm just kidding. But what I really wanted to ask you guys is: so you talk a lot about this, the tokenized economy and kind of the roadmap and the things to get there, you talk about sediment layer, right, Fiat to crypto, sediment layer, your identity protocols, your dApps, X, Y, Z, right? The whole web 3.0 stack, I want each of you, or I want at least input from both of you or all of you, what are the hurdles to getting to a full adoption of web 3.0 stack, and make a bold prediction on the timing before we have a full web 3.0 stack that we use every day. >> That is a awesome question actually, timelines. You could be, being in technology, being in venture, you could be right, and you could be off by three, five, seven, 10 years, and be so wrong, right? And then at your retirement dinner you could say: I was right, but Tommy wasn't right. So, this is really hard technology, in terms of building systems that are distributed, creating the economic models, the incentive models, it takes a lot to go right in the intersection of all this. But it's not a question like is this happening? No, this is happening, this is like, it's in motion. The timelines are going to be a little elusive, I'm way more pragmatic, I was one of the early guys in the early internet, and you know everything was going to be .com and awesome and fantastic. But the timelines were a little elusive then, right? You know, it's like when was, people are thinking of today's Amazon was going to be the 2005 Amazon, you know, it's like, that took about another decade to get there, right? And people could easily just buy stuff and a drone or a UPS guy would just deliver it, and so, similar things apply today. And you know at the same time we all have a super computer in our pocket, and so it's a lot different. At the same time we're dealing with trusted mediums right? The medium of money, the medium of identity, all these different things they're, they're things that you know if I say download Instagram, and let's share cat pictures or whatever, it's not a big deal, our trust is really low for that, let's do it. For money, it's a different mental state, it's a different dynamic, especially if you're an individual, a government, or an enterprise, you go through a whole different adoption curve on that, so, you know, it is at grand scale five to 10 years, right? In any meaningful way. And so we still have a lot of work to do. >> My answer to that question, it's a good one, your question was a good one, my answer's a little bit weird because it's multi-generational. The first generation pivot was when the internet was born was because of standards, right? The government had investment. The OSI model, open system interconnect, actually never happened, the seven layers didn't get standardized, only a few key ones did; that created a lot of great things. And then when the we came out, that was very interesting protocol development there, the TCP/IP stuff, I mean HTP stuff. I don't see the standardization happening, because cloud flipped the stack model upside down because Amazon and these guys let the software developers drive the value. It used to be infrastructure drove the value of what software could do, then software became so proliferated that that drove the value of the infrastructure, so the whole cloud computing equation is making the infrastructure programmable for the first time, not the other way around, so. The cloud phenomenon's all about software driving the value, and that's happening, so. It's interesting because with blockchain you can almost do levels of services in a cloud-like way with crypto, I mean with blockchain and token economics, and have a partial stack. So think that this whole web 3.0 might be something that no one's every seen before. So, that's kind of my answer, I don't really know if that's going to be right or not, but just looking at the future, connecting the dots, it's probably not going to look like what we've seen before, and if the cloud's an indicator it's probably going to be some weird looking stack where certain sections are working, and then evolution might fill in the other ones, so. I mean, that's my take, I mean, but standards will play a role, the communities will have to get involved around certain things, and I think that's a timeless concept. >> Timing. >> Oh, timing. I think it's going to be pretty quick, I think if you look at the years it took for internet, and then the web, everything's being compressed down, but I think it's going to be much shorter. If it was a 20 year cycle in the past, that gets shortened down to 15 with the internet, and this could be five years. So five to 10 years, that could be the impact in my mind. The question I always ask is: what year will banks no longer be involved in anything? Is that 20 years or 10 years? (laughs) Exactly, so, yeah, follow the money. >> So I would say that in terms of trying to keep your finger on the pulse with things and how you kind of things, see things evolve; things are definitely moving a lot faster, you know in the past you would probably say seven to 10, I'm not sure if I would say five, sorry five to 10, it definitely feels to me that it's five max til we could start to see some of these key things fall into place, so. >> So could you answer the first question? >> What was the first question? >> Why didn't you hire me? (audience cringes) >> We've met before? Sorry. (all laugh) >> I have a question, this is Dave Vellante, Co-Host of theCUBE. And I want to pick up on something John you just said, and Matt you were talking about Goldman Sachs and Morgan Stanley, it's not about them saving hundreds of millions of dollars, it's really about them transforming business, so. And John, you just asked the question about banks, I want to actually get your answer to this: Will traditional banks, in your opinion, lose control of payment systems? Not withstanding your bias. (laughter) >> Yeah, I am definitely biased on this. But, I mean, I've been in front of the C-suite of banks, credit card companies, etc, and I said, you know, in about a decade, the center of what you do and how you make money is going to be zero. And, 'cause there'll be networks, and ways to transmit money that'll be by far cheaper, or will be subsidized by other networks, meaning, and those networks are Apple, Amazon, Alibaba, you know, Tencent, whatever networks that're out there, that're engaging in collaboration and commerce and everything else, they will give away payments as just a courtesy, like people give away messaging or email or something, as a courtesy to that network, and will harden that network, and it'll be built and based on blockchain technology and cryptocurrencies, so they don't necessarily have to worry about, you know, kind of subtle payments. But these new networks will start to encroach on banks, the banks are not worried about other banks today, the banks should be worried about these new networks that're being developed. >> How many people still have a home phone line? >> That was elegant, I like that. >> You know, I mean there's a generation of people that still like going to banks, they'll keep them in business for a while. But I think that comes to an end. >> I mean, when we covered a lot of the big data market when it started, the argument was mobile will kill the banks outlets, and now with ATMs there's more bank, more baking branches than ever before, so I think the services piece is interesting. >> And also, if you look at even the cloud basis, the software as a service, SaaS space, a decade, decade and a half ago, you would ask SAP, Oracle, what have you, what's your cloud strategy? And they'd be like cloud? That's just more efficient delivery model, not interested. 90 some billion dollars of M and A later, SAP, Oracle, etc, are cloud companies, right? And so, if banks kind of get into that same mode to say well, yeah, we need to play catch up and buy digital currency exchanges and multi-currency wallets, and this infrastructure and plumbing to be relevant in the next world, that would be interesting. But I think technology companies have as much an advantage to do that as as financial services companies, so it'll be interesting to see who kind of goes into that, goes into the crypto ecosystem to make that their own. >> It's interesting. We were talking before we came on and the OSS market, operational support systems is booming, and that's traditionally been these big operational outsource companies would manage big projects, but, if you look at in the first half of 2018, there's been a greater than 20 billion dollar commercial exits of companies through private equity merchants, IPOs, around OSS, and that's where we see operational things happening, CoreOS, Alfresco, MuleSoft, Pivotal went public, Magneto, GitHub, Treasure Data, Fastly, Elastic, DataStax, they're all in the pipeline. These are all companies that aren't cloud, they're like running stuff in cloud, so, this could be a tell sign that potentially the the blockchain operating market is going to be potentially a big one. >> Yeah, and then even look at BitMate, the world's largest miner in crypto. So, they did about a billion dollars in profit last year, did about a billion dollars in profit just in the first quarter going public, just raised a billion dollars last month, at a reportedly 50 to 70 billion dollar evaluation in Hong Kong in the next month, and the amount of money they'll raise will eclipse what Facebook raised. And so I think the institutional, the hardware, the cloud computing, the whole ecosystem starts to like resonate and think about this space a lot differently, and we need these milestones, we need these, whether they're room huddles or data points to kind of like think about how this is going to affect your business and what you do tomorrow morning. >> Any more questions from the crowd? Audience? Okay, great, well thanks for attending, appreciate you guys watching and listening, and guys thanks for the conversation; cloud and blockchain convergence. Collision course, or is it going to happen nicely, Al? >> Yeah, I think it's going to be a convergence, I don't see it necessarily as a collision course. >> And a lot of money to be made on this opportunity these days, and cloud convergence with blockchain. >> I concur with Al, I think there's going to be convergence, I think us most smarter players will engage and figure out their models in this new crypto and tokenized era. >> Thanks so much guys, appreciate it, give these guys a round of applause. (audience applause) Thank you very much. (bubbly music)