>> Narrator: From theCUBE Studios in Palo Alto, in Boston bringing you data-driven insights from theCUBE and ETR. This is "Breaking Analysis" with Dave Vellante. >> The next 10 years of cloud, they're going to differ dramatically from the past decade. The early days of cloud, deployed virtualization of standard off-the-shelf components, X86 microprocessors, disk drives et cetera, to then scale out and build a large distributed system. The coming decade is going to see a much more data-centric, real-time, intelligent, call it even hyper-decentralized cloud that will comprise on-prem, hybrid, cross-cloud and edge workloads with a services layer that will obstruct the underlying complexity of the infrastructure which will also comprise much more custom and varied components. This was a key takeaway of the guests from theCUBE on Cloud, an event hosted by SiliconANGLE on theCUBE. Welcome to this week's Wikibon CUBE Insights Powered by ETR. In this episode, we'll summarize the findings of our recent event and extract the signal from our great guests with a couple of series and comments and clips from the show. CUBE on Cloud is our very first virtual editorial event. It was designed to bring together our community in an open forum. We ran the day on our 365 software platform and had a great lineup of CEOs, CIOs, data practitioners technologists. We had cloud experts, analysts and many opinion leaders all brought together in a day long series of sessions that we developed in order to unpack the future of cloud computing in the coming decade. Let me briefly frame up the conversation and then turn it over to some of our guests. First, we put forth our view of how modern cloud has evolved and where it's headed. This graphic that we're showing here, talks about the progression of cloud innovation over time. A cloud like many innovations, it started as a novelty. When AWS announced S3 in March of 2006, nobody in the vendor or user communities really even in the trade press really paid too much attention to it. Then later that year, Amazon announced EC2 and people started to think about a new model of computing. But it was largely tire kickers, bleeding-edge developers that took notice and really leaned in. Now the financial crisis of 2007 to 2009, really created what we call a cloud awakening and it put cloud on the radar of many CFOs. Shadow IT emerged within departments that wanted to take IT in bite-sized chunks and along with the CFO wanted to take it as OPEX versus CAPEX. And then I teach transformation that really took hold. We came out of the financial crisis and we've been on an 11-year cloud boom. And it doesn't look like it's going to stop anytime soon, cloud has really disrupted the on-prem model as we've reported and completely transformed IT. Ironically, the pandemic hit at the beginning of this decade, and created a mandate to go digital. And so it accelerated the industry transformation that we're highlighting here, which probably would have taken several more years to mature but overnight the forced March to digital happened. And it looks like it's here to stay. Now the next wave, we think we'll be much more about business or industry transformation. We're seeing the first glimpses of that. Holger Mueller of Constellation Research summed it up at our event very well I thought, he basically said the cloud is the big winner of COVID. Of course we know that now normally we talk about seven-year economic cycles. He said he was talking about for planning and investment cycles. Now we operate in seven-day cycles. The examples he gave where do we open or close the store? How do we pivot to support remote workers without the burden of CAPEX? And we think that the things listed on this chart are going to be front and center in the coming years, data AI, a fully digitized and intelligence stack that will support next gen disruptions in autos, manufacturing, finance, farming and virtually every industry where the system will expand to the edge. And the underlying infrastructure across physical locations will be hidden. Many issues remain, not the least of which is latency which we talked about at the event in quite some detail. So let's talk about how the Big 3 cloud players are going to participate in this next era. Well, in short, the consensus from the event was that the rich get richer. Let's take a look at some data. This chart shows our most recent estimates of IaaS and PaaS spending for the Big 3. And we're going to update this after earning season but there's a couple of points stand out. First, we want to make the point that combined the Big 3 now account for almost $80 billion of infrastructure spend last year. That $80 billion, was not all incremental (laughs) No it's caused consolidation and disruption in the on-prem data center business and within IT shops companies like Dell, HPE, IBM, Oracle many others have felt the heat and have had to respond with hybrid and cross cloud strategies. Second while it's true that Azure and GCP they appear to be growing faster than AWS. We don't know really the exact numbers, of course because only AWS provides a clean view of IaaS and passwords, Microsoft and Google. They kind of hide them all ball on their numbers which by the way, I don't blame them but they do leave breadcrumbs and clues on growth rates. And we have other means of estimating through surveys and the like, but it's undeniable Azure is closing the revenue gap on AWS. The third is that I like the fact that Azure and Google are growing faster than AWS. AWS is the only company by our estimates to grow its business sequentially last quarter. And in and of itself, that's not really enough important. What is significant is that because AWS is so large now at 45 billion, even at their slower growth rates it grows much more in absolute terms than its competitors. So we think AWS is going to keep its lead for some time. We think Microsoft and AWS will continue to lead the pack. You know, they might converge maybe it will be a 200 just race in terms of who's first who's second in terms of cloud revenue and how it's counted depending on what they count in their numbers. And Google look with its balance sheet and global network. It's going to play the long game and virtually everyone else with the exception of perhaps Alibaba is going to be secondary players on these platforms. Now this next graphic underscores that reality and kind of lays out the competitive landscape. What we're showing here is survey data from ETR of more than 1400 CIOs and IT buyers and on the vertical axis is Net Score which measures spending momentum on the horizontal axis is so-called Market Share which is a measure of pervasiveness in the data set. The key points are AWS and Microsoft look at it. They stand alone so far ahead of the pack. I mean, they really literally, it would have to fall down to lose their lead high spending velocity and large share of the market or the hallmarks of these two companies. And we don't think that's going to change anytime soon. Now, Google, even though it's far behind they have the financial strength to continue to position themselves as an alternative to AWS. And of course, an analytics specialist. So it will continue to grow, but it will be challenged. We think to catch up to the leaders. Now take a look at the hybrid zone where the field is playing. These are companies that have a large on-prem presence and have been forced to initiate a coherent cloud strategy. And of course, including multicloud. And we include Google in this so pack because they're behind and they have to take a differentiated approach relative to AWS, and maybe cozy up to some of these traditional enterprise vendors to help Google get to the enterprise. And you can see from the on-prem crowd, VMware Cloud on AWS is stands out as having some, some momentum as does Red Hat OpenShift, which is it's cloudy, but it's really sort of an ingredient it's not really broad IaaS specifically but it's a component of cloud VMware cloud which includes VCF or VMware Cloud Foundation. And even Dell's cloud. We would expect HPE with its GreenLake strategy. Its financials is shoring up, should be picking up momentum in the future in terms of what the customers of this survey consider cloud. And then of course you could see IBM and Oracle you're in the game, but they don't have the spending momentum and they don't have the CAPEX chops to compete with the hyperscalers IBM's cloud revenue actually dropped 7% last quarter. So that highlights the challenges that that company facing Oracle's cloud business is growing in the single digits. It's kind of up and down, but again underscores these two companies are really about migrating their software install basis to their captive clouds and as well for IBM, for example it's launched a financial cloud as a way to differentiate and not take AWS head-on an infrastructure as a service. The bottom line is that other than the Big 3 in Alibaba the rest of the pack will be plugging into hybridizing and cross-clouding those platforms. And there are definitely opportunities there specifically related to creating that abstraction layer that we talked about earlier and hiding that underlying complexity and importantly creating incremental value good examples, snowfallLike what snowflake is doing with its data cloud, what the data protection guys are doing. A company like Loomio is headed in that direction as are others. So, you keep an eye on that and think about where the white space is and where the value can be across-clouds. That's where the opportunity is. So let's see, what is this all going to look like? How does the cube community think it's going to unfold? Let's hear from theCUBE Guests and theCUBE on Cloud speakers and some of those highlights. Now, unfortunately we don't have time to show you clips from every speaker. We are like 10-plus hours of video content but we've tried to pull together some comments that summarize the sentiment from the community. So I'm going to have John Furrier briefly explain what theCUBE on Cloud is all about and then let the guests speak for themselves. After John, Pradeep Sindhu is going to give a nice technical overview of how the cloud was built out and what's changing in the future. I'll give you a hint it has to do with data. And then speaking of data, Mai-Lan Bukovec, who heads up AWS is storage portfolio. She'll explain how she views the coming changes in cloud and how they look at storage. Again, no surprise, it's all about data. Now, one of the themes that you'll hear from guests is the notion of a distributed cloud model. And Zhamak Deghani, he was a data architect. She'll explain her view of the future of data architectures. We also have thoughts from analysts like Zeus Karavalla and Maribel Lopez, and some comments from both Microsoft and Google to compliment AWS's view of the world. In fact, we asked JG Chirapurath from Microsoft to comment on the common narrative that Microsoft products are not best-to-breed. They put out a one dot O and then they get better, or sometimes people say, well, they're just good enough. So we'll see what his response is to that. And Paul Gillin asks, Amit Zavery of Google his thoughts on the cloud leaderboard and how Google thinks about their third-place position. Dheeraj Pandey gives his perspective on how technology has progressed and been miniaturized over time. And what's coming in the future. And then Simon Crosby gives us a framework to think about the edge as the most logical opportunity to process data not necessarily a physical place. And this was echoed by John Roese, and Chris Wolf to experience CTOs who went into some great depth on this topic. Unfortunately, I don't have the clips of those two but their comments can be found on the CTO power panel the technical edge it's called that's the segment at theCUBE on Cloud events site which we'll share the URL later. Now, the highlight reel ends with CEO Joni Klippert she talks about the changes in securing the cloud from a developer angle. And finally, we wrap up with a CIO perspective, Dan Sheehan. He provides some practical advice on building on his experience as a CIO, COO and CTO specifically how do you as a business technology leader deal with the rapid pace of change and still be able to drive business results? Okay, so let's now hear from the community please run the highlights. >> Well, I think one of the things we talked about COVID is the personal impact to me but other people as well one of the things that people are craving right now is information, factual information, truth, textures that we call it. But here this event for us Dave is our first inaugural editorial event. Rob, both Kristen Nicole the entire cube team, SiliconANGLE on theCUBE we're really trying to put together more of a cadence. We're going to do more of these events where we can put out and feature the best people in our community that have great fresh voices. You know, we do interview the big names Andy Jassy, Michael Dell, the billionaires of people making things happen, but it's often the people under them that are the real Newsmakers. >> If you look at the architecture of cloud data centers the single most important invention was scale-out. Scale-out of identical or near identical servers all connected to a standard IP ethernet network. That's the architecture. Now the building blocks of this architecture is ethernet switches which make up the network, IP ethernet switches. And then the server is all built using general purpose x86 CPU's with DRAM, with SSD, with hard drives all connected to inside the CPU. Now, the fact that you scale these server nodes as they're called out was very, very important in addressing the problem of how do you build very large scale infrastructure using general purpose compute but this architecture, Dave is a compute centric architecture. And the reason it's a compute centric architecture is if you open this, is server node. What you see is a connection to the network typically with a simple network interface card. And then you have CPU's which are in the middle of the action. Not only are the CPU's processing the application workload but they're processing all of the IO workload what we call data centric workload. And so when you connect SSDs and hard drives and GPU is everything to the CPU, as well as to the network you can now imagine that the CPU is doing two functions. It's running the applications but it's also playing traffic cop for the IO. So every IO has to go to the CPU and you're executing instructions typically in the operating system. And you're interrupting the CPU many many millions of times a second. Now general purpose CPU and the architecture of the CPU's was never designed to play traffic cop because the traffic cop function is a function that requires you to be interrupted very, very frequently. So it's critical that in this new architecture where does a lot of data, a lot of these stress traffic the percentage of workload, which is data centric has gone from maybe one to 2% to 30 to 40%. >> The path to innovation is paved by data. If you don't have data, you don't have machine learning you don't have the next generation of analytics applications that helps you chart a path forward into a world that seems to be changing every week. And so in order to have that insight in order to have that predictive forecasting that every company needs, regardless of what industry that you're in today, it all starts from data. And I think the key shift that I've seen is how customers are thinking about that data, about being instantly usable. Whereas in the past, it might've been a backup. Now it's part of a data Lake. And if you can bring that data into a data lake you can have not just analytics or machine learning or auditing applications it's really what does your application do for your business and how can it take advantage of that vast amount of shared data set in your business? >> We are actually moving towards decentralization if we think today, like if it let's move data aside if we said is the only way web would work the only way we get access to various applications on the web or pages to centralize it We would laugh at that idea. But for some reason we don't question that when it comes to data, right? So I think it's time to embrace the complexity that comes with the growth of number of sources, the proliferation of sources and consumptions models, embrace the distribution of sources of data that they're not just within one part of organization. They're not just within even bounds of organizations that are beyond the bounds of organization. And then look back and say, okay, if that's the trend of our industry in general, given the fabric of compensation and data that we put in, you know, globally in place then how the architecture and technology and organizational structure incentives need to move to embrace that complexity. And to me that requires a paradigm shift a full stack from how we organize our organizations how we organize our teams, how we put a technology in place to look at it from a decentralized angle. >> I actually think we're in the midst of the transition to what's called a distributed cloud, where if you look at modernized cloud apps today they're actually made up of services from different clouds. And also distributed edge locations. And that's going to have a pretty profound impact on the way we go vast. >> We wake up every day, worrying about our customer and worrying about the customer condition and to absolutely make sure we dealt with the best in the first attempt that we do. So when you take the plethora of products we've dealt with in Azure, be it Azure SQL be it Azure cosmos DB, Synapse, Azure Databricks, which we did in partnership with Databricks Azure machine learning. And recently when we sort of offered the world's first comprehensive data governance solution and Azure overview, I would, I would humbly submit to you that we are leading the way. >> How important are rankings within the Google cloud team or are you focused mainly more on growth and just consistency? >> No, I don't think again, I'm not worried about we are not focused on ranking or any of that stuff. Typically I think we are worried about making sure customers are satisfied and the adding more and more customers. So if you look at the volume of customers we are signing up a lot of the large deals we did doing. If you look at the announcement we've made over the last year has been tremendous momentum around that. >> The thing that is really interesting about where we have been versus where we're going is we spend a lot of time talking about virtualizing hardware and moving that around. And what does that look like? And creating that as more of a software paradigm. And the thing we're talking about now is what does cloud as an operating model look like? What is the manageability of that? What is the security of that? What, you know, we've talked a lot about containers and moving into different, DevSecOps and all those different trends that we've been talking about. Like now we're doing them. So we've only gotten to the first crank of that. And I think every technology vendor we talked to now has to address how are they are going to do a highly distributed management insecurity landscape? Like, what are they going to layer on top of that? Because it's not just about, oh, I've taken a rack of something, server storage, compute, and virtualized it. I know have to create a new operating model around it in a way we're almost redoing what the OSI stack looks like and what the software and solutions are for that. >> And the whole idea of we in every recession we make things smaller. You know, in 91 we said we're going to go away from mainframes into Unix servers. And we made the unit of compute smaller. Then in the year, 2000 windows the next bubble burst and the recession afterwards we moved from Unix servers to Wintel windows and Intel x86 and eventually Linux as well. Again, we made things smaller going from million dollar servers to $5,000 servers, shorter lib servers. And that's what we did in 2008, 2009. I said, look, we don't even need to buy servers. We can do things with virtual machines which are servers that are an incarnation in the digital world. There's nothing in the physical world that actually even lives but we made it even smaller. And now with cloud in the last three, four years and what will happen in this coming decade. They're going to make it even smaller not just in space, which is size, with functions and containers and virtual machines, but also in time. >> So I think the right way to think about edges where can you reasonably process the data? And it obviously makes sense to process data at the first opportunity you have but much data is encrypted between the original device say and the application. And so edge as a place doesn't make as much sense as edge as an opportunity to decrypt and analyze it in the care. >> When I think of Shift-left, I think of that Mobius that we all look at all of the time and how we deliver and like plan, write code, deliver software, and then manage it, monitor it, right like that entire DevOps workflow. And today, when we think about where security lives, it either is a blocker to deploying production or most commonly it lives long after code has been deployed to production. And there's a security team constantly playing catch up trying to ensure that the development team whose job is to deliver value to their customers quickly, right? Deploy as fast as we can as many great customer facing features. They're then looking at it months after software has been deployed and then hurrying and trying to assess where the bugs are and trying to get that information back to software developers so that they can fix those issues. Shifting left to me means software engineers are finding those bugs as they're writing code or in the CIC CD pipeline long before code has been deployed to production. >> During this for quite a while now, it still comes down to the people. I can get the technology to do what it needs to do as long as they have the right requirements. So that goes back to people making sure we have the partnership that goes back to leadership and the people and then the change management aspects right out of the gate, you should be worrying about how this change is going to be how it's going to affect, and then the adoption and an engagement, because adoption is critical because you can go create the best thing you think from a technology perspective. But if it doesn't get used correctly, it's not worth the investment. So I agree, what is a digital transformation or innovation? It still comes down to understand the business model and injecting and utilizing technology to grow our reduce costs, grow the business or reduce costs. >> Okay, so look, there's so much other content on theCUBE on Cloud events site we'll put the link in the description below. We have other CEOs like Kathy Southwick and Ellen Nance. We have the CIO of UI path. Daniel Dienes talks about automation in the cloud and Appenzell from Anaplan. And a plan is not her company. By the way, Dave Humphrey from Bain also talks about his $750 million investment in Nutanix. Interesting, Rachel Stevens from red monk talks about the future of software development in the cloud and CTO, Hillary Hunter talks about the cloud going vertical into financial services. And of course, John Furrier and I along with special guests like Sergeant Joe Hall share our take on key trends, data and perspectives. So right here, you see the coupon cloud. There's a URL, check it out again. We'll, we'll pop this URL in the description of the video. So there's some great content there. I want to thank everybody who participated and thank you for watching this special episode of theCUBE Insights Powered by ETR. This is Dave Vellante and I'd appreciate any feedback you might have on how we can deliver better event content for you in the future. We'll be doing a number of these and we look forward to your participation and feedback. Thank you, all right, take care, we'll see you next time. (upbeat music)

>>from around the globe. It's the Cube presenting Cuban cloud brought to you by silicon angle, everybody to Cuban cloud. My name is Dave Volonte, and I'll be here throughout the day with my co host, John Ferrier, who was quarantined in an undisclosed location in California. He's all good. Don't worry. Just precautionary. John, how are you doing? >>Hey, great to see you. John. Quarantine. My youngest daughter had covitz, so contact tracing. I was negative in quarantine at a friend's location. All good. >>Well, we wish you the best. Yeah, well, right. I mean, you know what's it like, John? I mean, you're away from your family. Your basically shut in, right? I mean, you go out for a walk, but you're really not in any contact with anybody. >>Correct? Yeah. I mean, basically just isolation, Um, pretty much what everyone's been kind of living on, kind of suffering through, but hopefully the vaccines are being distributed. You know, one of the things we talked about it reinvent the Amazon's cloud conference. Was the vaccine on, but just the whole workflow around that it's gonna get better. It's kind of really sucky. Here in the California area, they haven't done a good job, a lot of criticism around, how that's rolling out. And, you know, Amazon is now offering to help now that there's a new regime in the U. S. Government S o. You know, something to talk about, But certainly this has been a terrible time for Cove it and everyone in the deaths involved. But it's it's essentially pulled back the covers, if you will, on technology and you're seeing everything. Society. In fact, um, well, that's big tech MIT disinformation campaigns. All these vulnerabilities and cyber, um, accelerated digital transformation. We'll talk about a lot today, but yeah, it's totally changed the world. And I think we're in a new generation. I think this is a real inflection point, Dave. You know, modern society and the geo political impact of this is significant. You know, one of the benefits of being quarantined you'd be hanging out on these clubhouse APS, uh, late at night, listening to experts talk about what's going on, and it's interesting what's happening with with things like water and, you know, the island of Taiwan and China and U. S. Sovereignty, data, sovereignty, misinformation. So much going on to talk about. And, uh, meanwhile, companies like Mark injuries in BC firm starting a media company. What's going on? Hell freezing over. So >>we're gonna be talking about a lot of that stuff today. I mean, Cuba on cloud. It's our very first virtual editorial event we're trying to do is bring together our community. It's a it's an open forum and we're we're running the day on our 3 65 software platform. So we got a great lineup. We got CEO Seo's data Practitioners. We got a hard core technologies coming in, cloud experts, investors. We got some analysts coming in and we're creating this day long Siri's. And we've got a number of sessions that we've developed and we're gonna unpack. The future of Cloud computing in the coming decade is, John said, we're gonna talk about some of the public policy new administration. What does that mean for tech and for big tech in General? John, what can you add to that? >>Well, I think one of the things that we talked about Cove in this personal impact to me but other people as well. One of the things that people are craving right now is information factual information, truth texture that we call it. But hear this event for us, Davis, our first inaugural editorial event. Robbo, Kristen, Nicole, the entire Cube team Silicon angle, really trying to put together Morva cadence we're gonna doom or of these events where we can put out feature the best people in our community that have great fresh voices. You know, we do interview the big names Andy Jassy, Michael Dell, the billionaires with people making things happen. But it's often the people under there that are the rial newsmakers amid savory, for instance, that Google one of the most impressive technical people, he's gotta talk. He's gonna present democratization of software development in many Mawr riel people making things happen. And I think there's a communal element. We're going to do more of these. Obviously, we have, uh, no events to go to with the Cube. So we have the cube virtual software that we have been building and over years and now perfecting and we're gonna introduce that we're gonna put it to work, their dog footing it. We're gonna put that software toe work. We're gonna do a lot mawr virtual events like this Cuban cloud Cuban startup Cuban raising money. Cuban healthcare, Cuban venture capital. Always think we could do anything. Question is, what's the right story? What's the most important stories? Who's telling it and increase the aperture of the lens of the industry that we have and and expose that and fastest possible. That's what this software, you'll see more of it. So it's super exciting. We're gonna add new features like pulling people up on stage, Um, kind of bring on the clubhouse vibe and more of a community interaction with people to meet each other, and we'll roll those out. But the goal here is to just showcase it's cloud story in a way from people that are living it and providing value. So enjoy the day is gonna be chock full of presentations. We're gonna have moderated chat in these sessions, so it's an all day event so people can come in, drop out, and also that's everything's on demand immediately after the time slot. But you >>want to >>participate, come into the time slot into the cube room or breakout session. Whatever you wanna call it, it's a cube room, and the people in there chatting and having a watch party. So >>when you're in that home page when you're watching, there's a hero video there. Beneath that, there's a calendar, and you'll see that red line is that red horizontal line of vertical line is rather, it's a linear clock that will show you where we are in the day. If you click on any one of those sessions that will take you into the chat, we'll take you through those in a moment and share with you some of the guests that we have upcoming and and take you through the day what I wanted to do. John is trying to set the stage for the conversations that folks are gonna here today. And to do that, I wanna ask the guys to bring up a graphic. And I want to talk to you, John, about the progression of cloud over time and maybe go back to the beginning and review the evolution of cloud and then really talk a little bit about where we think it Z headed. So, guys, if you bring up that graphic when a W S announced s three, it was March of 2000 and six. And as you recall, John you know, nobody really. In the vendor and user community. They didn't really pay too much attention to that. And then later that year, in August, it announced E C two people really started. They started to think about a new model of computing, but they were largely, you know, chicken tires. And it was kind of bleeding edge developers that really leaned in. Um what? What were you thinking at the time? When when you saw, uh, s three e c to this retail company coming into the tech world? >>I mean, I thought it was totally crap. I'm like, this is terrible. But then at that time, I was thinking working on I was in between kind of start ups and I didn't have a lot of seed funding. And then I realized the C two was freaking awesome. But I'm like, Holy shit, this is really great because I don't need to pay a lot of cash, the Provisional Data center, or get a server. Or, you know, at that time, state of the art startup move was to buy a super micro box or some sort of power server. Um, it was well past the whole proprietary thing. But you have to assemble probably anyone with 5 to 8 grand box and go in, and we'll put a couple ghetto rack, which is basically, uh, you know, you put it into some coasting location. It's like with everybody else in the tech ghetto of hosting, still paying monthly fees and then maintaining it and provisioning that's just to get started. And then Amazon was just really easy. And then from there you just It was just awesome. I just knew Amazon would be great. They had a lot of things that they had to fix. You know, custom domains and user interface Council got better and better, but it was awesome. >>Well, what we really saw the cloud take hold from my perspective anyway, was the financial crisis in, you know, 709 It put cloud on the radar of a number of CFOs and, of course, shadow I T departments. They wanted to get stuff done and and take I t in in in, ah, pecs, bite sized chunks. So it really was. There's cloud awakening and we came out of that financial crisis, and this we're now in this 10 year plus boom um, you know, notwithstanding obviously the economic crisis with cove it. But much of it was powered by the cloud in the decade. I would say it was really about I t transformation. And it kind of ironic, if you will, because the pandemic it hits at the beginning of this decade, >>and it >>creates this mandate to go digital. So you've you've said a lot. John has pulled forward. It's accelerated this industry transformation. Everybody talks about that, but and we've highlighted it here in this graphic. It probably would have taken several more years to mature. But overnight you had this forced march to digital. And if you weren't a digital business, you were kind of out of business. And and so it's sort of here to stay. How do you see >>You >>know what this evolution and what we can expect in the coming decades? E think it's safe to say the last 10 years defined by you know, I t transformation. That's not gonna be the same in the coming years. How do you see it? >>It's interesting. I think the big tech companies are on, but I think this past election, the United States shows um, the power that technology has. And if you look at some of the main trends in the enterprise specifically around what clouds accelerating, I call the second wave of innovations coming where, um, it's different. It's not what people expect. Its edge edge computing, for instance, has talked about a lot. But industrial i o t. Is really where we've had a lot of problems lately in terms of hacks and malware and just just overall vulnerabilities, whether it's supply chain vulnerabilities, toe actual disinformation, you know, you know, vulnerabilities inside these networks s I think this network effects, it's gonna be a huge thing. I think the impact that tech will have on society and global society geopolitical things gonna be also another one. Um, I think the modern application development of how applications were written with data, you know, we always been saying this day from the beginning of the Cube data is his integral part of the development process. And I think more than ever, when you think about cloud and edge and this distributed computing paradigm, that cloud is now going next level with is the software and how it's written will be different. You gotta handle things like, where's the compute component? Is it gonna be at the edge with all the server chips, innovations that Amazon apple intel of doing, you're gonna have compute right at the edge, industrial and kind of human edge. How does that work? What's Leighton see to that? It's it really is an edge game. So to me, software has to be written holistically in a system's impact on the way. Now that's not necessarily nude in the computer science and in the tech field, it's just gonna be deployed differently. So that's a complete rewrite, in my opinion of the software applications. Which is why you're seeing Amazon Google VM Ware really pushing Cooper Netease and these service messes in the micro Services because super critical of this technology become smarter, automated, autonomous. And that's completely different paradigm in the old full stack developer, you know, kind of model. You know, the full stack developer, his ancient. There's no such thing as a full stack developer anymore, in my opinion, because it's a half a stack because the cloud takes up the other half. But no one wants to be called the half stack developer because it doesn't sound as good as Full Stack, but really Cloud has eliminated the technology complexity of what a full stack developer used to dio. Now you can manage it and do things with it, so you know, there's some work to done, but the heavy lifting but taking care of it's the top of the stack that I think is gonna be a really critical component. >>Yeah, and that that sort of automation and machine intelligence layer is really at the top of the stack. This this thing becomes ubiquitous, and we now start to build businesses and new processes on top of it. I wanna I wanna take a look at the Big Three and guys, Can we bring up the other The next graphic, which is an estimate of what the revenue looks like for the for the Big three. And John, this is I asked and past spend for the Big Three Cloud players. And it's It's an estimate that we're gonna update after earning seasons, and I wanna point a couple things out here. First is if you look at the combined revenue production of the Big Three last year, it's almost 80 billion in infrastructure spend. I mean, think about that. That Z was that incremental spend? No. It really has caused a lot of consolidation in the on Prem data center business for guys like Dell. And, you know, um, see, now, part of the LHP split up IBM Oracle. I mean, it's etcetera. They've all felt this sea change, and they had to respond to it. I think the second thing is you can see on this data. Um, it's true that azure and G C P they seem to be growing faster than a W s. We don't know the exact numbers >>because >>A W S is the only company that really provides a clean view of i s and pass. Whereas Microsoft and Google, they kind of hide the ball in their numbers. I mean, I don't blame them because they're behind, but they do leave breadcrumbs and clues about growth rates and so forth. And so we have other means of estimating, but it's it's undeniable that azure is catching up. I mean, it's still quite distance the third thing, and before I want to get your input here, John is this is nuanced. But despite the fact that Azure and Google the growing faster than a W s. You can see those growth rates. A W s I'll call this out is the only company by our estimates that grew its business sequentially last quarter. Now, in and of itself, that's not significant. But what is significant is because AWS is so large there $45 billion last year, even if the slower growth rates it's able to grow mawr and absolute terms than its competitors, who are basically flat to down sequentially by our estimates. Eso So that's something that I think is important to point out. Everybody focuses on the growth rates, but it's you gotta look at also the absolute dollars and, well, nonetheless, Microsoft in particular, they're they're closing the gap steadily, and and we should talk more about the competitive dynamics. But I'd love to get your take on on all this, John. >>Well, I mean, the clouds are gonna win right now. Big time with the one the political climate is gonna be favoring Big check. But more importantly, with just talking about covert impact and celebrating the digital transformation is gonna create a massive rising tide. It's already happening. It's happening it's happening. And again, this shift in programming, uh, models are gonna really kinda accelerating, create new great growth. So there's no doubt in my mind of all three you're gonna win big, uh, in the future, they're just different, You know, the way they're going to market position themselves, they have to be. Google has to be a little bit different than Amazon because they're smaller and they also have different capabilities, then trying to catch up. So if you're Google or Microsoft, you have to have a competitive strategy to decide. How do I wanna ride the tide If you will put the rising tide? Well, if I'm Amazon, I mean, if I'm Microsoft and Google, I'm not going to try to go frontal and try to copy Amazon because Amazon is just pounding lead of features and scale and they're different. They were, I would say, take advantage of the first mover of pure public cloud. They really awesome. It passed and I, as they've integrated in Gardner, now reports and integrated I as and passed components. So Gardner finally got their act together and said, Hey, this is really one thing. SAS is completely different animal now Microsoft Super Smart because they I think they played the right card. They have a huge installed base converted to keep office 3 65 and move sequel server and all their core jewels into the cloud as fast as possible, clarified while filling in the gaps on the product side to be cloud. So you know, as you're doing trends job, they're just it's just pedal as fast as you can. But Microsoft is really in. The strategy is just go faster trying. Keep pedaling fast, get the features, feature velocity and try to make it high quality. Google is a little bit different. They have a little power base in terms of their network of strong, and they have a lot of other big data capabilities, so they have to use those to their advantage. So there is. There is there is competitive strategy game application happening with these companies. It's not like apples, the apples, In my opinion, it never has been, and I think that's funny that people talk about it that way. >>Well, you're bringing up some great points. I want guys bring up the next graphic because a lot of things that John just said are really relevant here. And what we're showing is that's a survey. Data from E. T. R R Data partners, like 1400 plus CEOs and I T buyers and on the vertical axis is this thing called Net score, which is a measure of spending momentum. And the horizontal axis is is what's called market share. It's a measure of the pervasiveness or, you know, number of mentions in the data set. There's a couple of key points I wanna I wanna pick up on relative to what John just said. So you see A W S and Microsoft? They stand alone. I mean, they're the hyper scale er's. They're far ahead of the pack and frankly, they have fall down, toe, lose their lead. They spend a lot on Capex. They got the flywheel effects going. They got both spending velocity and large market shares, and so, but they're taking a different approach. John, you're right there living off of their SAS, the state, their software state, Andi, they're they're building that in to their cloud. So they got their sort of a captive base of Microsoft customers. So they've got that advantage. They also as we'll hear from from Microsoft today. They they're building mawr abstraction layers. Andy Jassy has said We don't wanna be in that abstraction layer business. We wanna have access to those, you know, fine grain primitives and eso at an AP level. So so we can move fast with the market. But but But so those air sort of different philosophies, John? >>Yeah. I mean, you know, people who know me know that I love Amazon. I think their product is superior at many levels on in its way that that has advantages again. They have a great sass and ecosystem. They don't really have their own SAS play, although they're trying to add some stuff on. I've been kind of critical of Microsoft in the past, but one thing I'm not critical of Microsoft, and people can get this wrong in the marketplace. Actually, in the journalism world and also in just some other analysts, Microsoft has always had large scale eso to say that Microsoft never had scale on that Amazon owned the monopoly on our franchise on scales wrong. Microsoft had scale from day one. Their business was always large scale global. They've always had infrastructure with MSN and their search and the distributive how they distribute browsers and multiple countries. Remember they had the lock on the operating system and the browser for until the government stepped in in 1997. And since 1997 Microsoft never ever not invested in infrastructure and scale. So that whole premise that they don't compete well there is wrong. And I think that chart demonstrates that there, in there in the hyper scale leadership category, hands down the question that I have. Is that there not as good and making that scale integrate in because they have that legacy cards. This is the classic innovator's dilemma. Clay Christensen, right? So I think they're doing a good job. I think their strategy sound. They're moving as fast as they can. But then you know they're not gonna come out and say We don't have the best cloud. Um, that's not a marketing strategy. Have to kind of hide in this and get better and then double down on where they're winning, which is. Clients are converting from their legacy at the speed of Microsoft, and they have a huge client base, So that's why they're stopping so high That's why they're so good. >>Well, I'm gonna I'm gonna give you a little preview. I talked to gear up your f Who's gonna come on today and you'll see I I asked him because the criticism of Microsoft is they're, you know, they're just good enough. And so I asked him, Are you better than good enough? You know, those are fighting words if you're inside of Microsoft, but so you'll you'll have to wait to see his answer. Now, if you guys, if you could bring that that graphic back up I wanted to get into the hybrid zone. You know where the field is. Always got >>some questions coming in on chat, Dave. So we'll get to those >>great Awesome. So just just real quick Here you see this hybrid zone, this the field is bunched up, and the other companies who have a large on Prem presence and have been forced to initiate some kind of coherent cloud strategy included. There is Michael Michael, multi Cloud, and Google's there, too, because they're far behind and they got to take a different approach than a W s. But as you can see, so there's some real progress here. VM ware cloud on AWS stands out, as does red hat open shift. You got VM Ware Cloud, which is a VCF Cloud Foundation, even Dell's cloud. And you'd expect HP with Green Lake to be picking up momentum in the future quarters. And you've got IBM and Oracle, which there you go with the innovator's dilemma. But there, at least in the cloud game, and we can talk about that. But so, John, you know, to your point, you've gotta have different strategies. You're you're not going to take out the big too. So you gotta play, connect your print your on Prem to your cloud, your hybrid multi cloud and try to create new opportunities and new value there. >>Yeah, I mean, I think we'll get to the question, but just that point. I think this Zeri Chen's come on the Cube many times. We're trying to get him to come on lunch today with Features startup, but he's always said on the Q B is a V C at Greylock great firm. Jerry's Cloud genius. He's been there, but he made a point many, many years ago. It's not a winner. Take all the winner. Take most, and the Big Three maybe put four or five in there. We'll take most of the markets here. But I think one of the things that people are missing and aren't talking about Dave is that there's going to be a second tier cloud, large scale model. I don't want to say tear to cloud. It's coming to sound like a sub sub cloud, but a new category of cloud on cloud, right? So meaning if you get a snowflake, did I think this is a tale? Sign to what's coming. VM Ware Cloud is a native has had huge success, mainly because Amazon is essentially enabling them to be successful. So I think is going to be a wave of a more of a channel model of indirect cloud build out where companies like the Cube, potentially for media or others, will build clouds on top of the cloud. So if Google, Microsoft and Amazon, whoever is the first one to really enable that okay, we'll do extremely well because that means you can compete with their scale and create differentiation on top. So what snowflake did is all on Amazon now. They kind of should go to azure because it's, you know, politically correct that have multiple clouds and distribution and business model shifts. But to get that kind of performance they just wrote on Amazon. So there's nothing wrong with that. Because you're getting paid is variable. It's cap ex op X nice categorization. So I think that's the way that we're watching. I think it's super valuable, I think will create some surprises in terms of who might come out of the woodwork on be a leader in a category. Well, >>your timing is perfect, John and we do have some questions in the chat. But before we get to that, I want to bring in Sargi Joe Hall, who's a contributor to to our community. Sargi. Can you hear us? All right, so we got, uh, while >>bringing in Sarpy. Let's go down from the questions. So the first question, Um, we'll still we'll get the student second. The first question. But Ronald ask, Can a vendor in 2021 exist without a hybrid cloud story? Well, story and capabilities. Yes, they could live with. They have to have a story. >>Well, And if they don't own a public cloud? No. No, they absolutely cannot. Uh hey, Sergey. How you doing, man? Good to see you. So, folks, let me let me bring in Sergeant Kohala. He's a He's a cloud architect. He's a practitioner, He's worked in as a technologist. And there's a frequent guest on on the Cube. Good to see you, my friend. Thanks for taking the time with us. >>And good to see you guys to >>us. So we were kind of riffing on the competitive landscape we got. We got so much to talk about this, like, it's a number of questions coming in. Um, but Sargi we wanna talk about you know, what's happening here in Cloud Land? Let's get right into it. I mean, what do you guys see? I mean, we got yesterday. New regime, new inaug inauguration. Do you do you expect public policy? You'll start with you Sargi to have What kind of effect do you think public policy will have on, you know, cloud generally specifically, the big tech companies, the tech lash. Is it gonna be more of the same? Or do you see a big difference coming? >>I think that there will be some changing narrative. I believe on that. is mainly, um, from the regulators side. A lot has happened in one month, right? So people, I think are losing faith in high tech in a certain way. I mean, it doesn't, uh, e think it matters with camp. You belong to left or right kind of thing. Right? But parlor getting booted out from Italy s. I think that was huge. Um, like, how do you know that if a cloud provider will not boot you out? Um, like, what is that line where you draw the line? What are the rules? I think that discussion has to take place. Another thing which has happened in the last 23 months is is the solar winds hack, right? So not us not sort acknowledging that I was Russia and then wish you watching it now, new administration might have a different sort of Boston on that. I think that's huge. I think public public private partnership in security arena will emerge this year. We have to address that. Yeah, I think it's not changing. Uh, >>economics economy >>will change gradually. You know, we're coming out off pandemic. The money is still cheap on debt will not be cheap. for long. I think m and a activity really will pick up. So those are my sort of high level, Uh, >>thank you. I wanna come back to them. And because there's a question that chat about him in a But, John, how do you see it? Do you think Amazon and Google on a slippery slope booting parlor off? I mean, how do they adjudicate between? Well, what's happening in parlor? Uh, anything could happen on clubhouse. Who knows? I mean, can you use a I to find that stuff? >>Well, that's I mean, the Amazons, right? Hiding right there bunkered in right now from that bad, bad situation. Because again, like people we said Amazon, these all three cloud players win in the current environment. Okay, Who wins with the U. S. With the way we are China, Russia, cloud players. Okay, let's face it, that's the reality. So if I wanted to reset the world stage, you know what better way than the, you know, change over the United States economy, put people out of work, make people scared, and then reset the entire global landscape and control all with cash? That's, you know, conspiracy theory. >>So you see the riches, you see the riches, get the rich, get richer. >>Yeah, well, that's well, that's that. That's kind of what's happening, right? So if you start getting into this idea that you can't actually have an app on site because the reason now I'm not gonna I don't know the particular parlor, but apparently there was a reason. But this is dangerous, right? So what? What that's gonna do is and whether it's right or wrong or not, whether political opinion is it means that they were essentially taken offline by people that weren't voted for that. Weren't that when people didn't vote for So that's not a democracy, right? So that's that's a different kind of regime. What it's also going to do is you also have this groundswell of decentralized thinking, right. So you have a whole wave of crypto and decentralized, um, cyber punks out there who want to decentralize it. So all of this stuff in January has created a huge counterculture, and I had predicted this so many times in the Cube. David counterculture is coming and and you already have this kind of counterculture between centralized and decentralized thinking and so I think the Amazon's move is dangerous at a fundamental level. Because if you can't get it, if you can't get buy domain names and you're completely blackballed by by organized players, that's a Mafia, in my opinion. So, uh, and that and it's also fuels the decentralized move because people say, Hey, if that could be done to them, it could be done to me. Just the fact that it could be done will promote a swing in the other direction. I >>mean, independent of of, you know, again, somebody said your political views. I mean Parlor would say, Hey, we're trying to clean this stuff up now. Maybe they didn't do it fast enough, but you think about how new parlor is. You think about the early days of Twitter and Facebook, so they were sort of at a disadvantage. Trying to >>have it was it was partly was what it was. It was a right wing stand up job of standing up something quick. Their security was terrible. If you look at me and Cory Quinn on be great to have him, and he did a great analysis on this, because if you look the lawsuit was just terrible. Security was just a half, asshole. >>Well, and the experience was horrible. I mean, it's not It was not a great app, but But, like you said, it was a quick stew. Hand up, you know, for an agenda. But nonetheless, you know, to start, get to your point earlier. It's like, you know, Are they gonna, you know, shut me down? If I say something that's, you know, out of line, or how do I control that? >>Yeah, I remember, like, 2019, we involved closing sort of remarks. I was there. I was saying that these companies are gonna be too big to fail. And also, they're too big for other nations to do business with. In a way, I think MNCs are running the show worldwide. They're running the government's. They are way. Have seen the proof of that in us this year. Late last year and this year, um, Twitter last night blocked Chinese Ambassador E in us. Um, from there, you know, platform last night and I was like, What? What's going on? So, like, we used to we used to say, like the Chinese company, tech companies are in bed with the Chinese government. Right. Remember that? And now and now, Actually, I think Chinese people can say the same thing about us companies. Uh, it's not a good thing. >>Well, let's >>get some question. >>Let's get some questions from the chat. Yeah. Thank you. One is on M and a subject you mentioned them in a Who do you see is possible emanate targets. I mean, I could throw a couple out there. Um, you know, some of the cdn players, maybe aka my You know, I like I like Hashi Corp. I think they're doing some really interesting things. What do you see? >>Nothing. Hashi Corp. And anybody who's doing things in the periphery is a candidate for many by the big guys, you know, by the hyper scholars and number two tier two or five hyper scholars. Right. Uh, that's why sales forces of the world and stuff like that. Um, some some companies, which I thought there will be a target, Sort of. I mean, they target they're getting too big, because off their evaluations, I think how she Corpuz one, um, >>and >>their bunch in the networking space. Uh, well, Tara, if I say the right that was acquired by at five this week, this week or last week, Actually, last week for $500 million. Um, I know they're founder. So, like I found that, Yeah, there's a lot going on on the on the network side on the anything to do with data. Uh, that those air too hard areas in the cloud arena >>data, data protection, John, any any anything you could adhere. >>And I think I mean, I think ej ej is gonna be where the gaps are. And I think m and a activity is gonna be where again, the bigger too big to fail would agree with you on that one. But we're gonna look at white Spaces and say a white space for Amazon is like a monster space for a start up. Right? So you're gonna have these huge white spaces opportunities, and I think it's gonna be an M and a opportunity big time start ups to get bought in. Given the speed on, I think you're gonna see it around databases and around some of these new service meshes and micro services. I mean, >>they there's a There's a question here, somebody's that dons asking why is Google who has the most pervasive tech infrastructure on the planet. Not at the same level of other to hyper scale is I'll give you my two cents is because it took him a long time to get their heads out of their ads. I wrote a piece of around that a while ago on they just they figured out how to learn the enterprise. I mean, John, you've made this point a number of times, but they just and I got a late start. >>Yeah, they're adding a lot of people. If you look at their who their hiring on the Google Cloud, they're adding a lot of enterprise chops in there. They realized this years ago, and we've talked to many of the top leaders, although Curry and hasn't yet sit down with us. Um, don't know what he's hiding or waiting for, but they're clearly not geared up to chicken Pete. You can see it with some some of the things that they're doing, but I mean competed the level of Amazon, but they have strength and they're playing their strength, but they definitely recognize that they didn't have the enterprise motions and people in the DNA and that David takes time people in the enterprise. It's not for the faint of heart. It's unique details that are different. You can't just, you know, swing the Google playbook and saying We're gonna home The enterprises are text grade. They knew that years ago. So I think you're going to see a good year for Google. I think you'll see a lot of change. Um, they got great people in there. On the product marketing side is Dev Solution Architects, and then the SRE model that they have perfected has been strong. And I think security is an area that they could really had a lot of value it. So, um always been a big fan of their huge network and all the intelligence they have that they could bring to bear on security. >>Yeah, I think Google's problem main problem that to actually there many, but one is that they don't They don't have the boots on the ground as compared to um, Microsoft, especially an Amazon actually had a similar problem, but they had a wide breath off their product portfolio. I always talk about feature proximity in cloud context, like if you're doing one thing. You wanna do another thing? And how do you go get that feature? Do you go to another cloud writer or it's right there where you are. So I think Amazon has the feature proximity and they also have, uh, aske Compared to Google, there's skills gravity. Larger people are trained on AWS. I think Google is trying there. So second problem Google is having is that that they're they're more focused on, I believe, um, on the data science part on their sort of skipping the cool components sort of off the cloud, if you will. The where the workloads needs, you know, basic stuff, right? That's like your compute storage and network. And that has to be well, talk through e think e think they will do good. >>Well, so later today, Paul Dillon sits down with Mids Avery of Google used to be in Oracle. He's with Google now, and he's gonna push him on on the numbers. You know, you're a distant third. Does that matter? And of course, you know, you're just a preview of it's gonna say, Well, no, we don't really pay attention to that stuff. But, John, you said something earlier that. I think Jerry Chen made this comment that, you know, Is it a winner? Take all? No, but it's a winner. Take a lot. You know the number two is going to get a big chunk of the pie. It appears that the markets big enough for three. But do you? Does Google have to really dramatically close the gap on be a much, much closer, you know, to the to the leaders in orderto to compete in this race? Or can they just kind of continue to bump along, siphon off the ad revenue? Put it out there? I mean, I >>definitely can compete. I think that's like Google's in it. Then it they're not. They're not caving, right? >>So But But I wrote I wrote recently that I thought they should even even put mawr oven emphasis on the cloud. I mean, maybe maybe they're already, you know, doubling down triple down. I just I think that is a multi trillion dollar, you know, future for the industry. And, you know, I think Google, believe it or not, could even do more. Now. Maybe there's just so much you could dio. >>There's a lot of challenges with these company, especially Google. They're in Silicon Valley. We have a big Social Justice warrior mentality. Um, there's a big debate going on the in the back channels of the tech scene here, and that is that if you want to be successful in cloud, you have to have a good edge strategy, and that involves surveillance, use of data and pushing the privacy limits. Right? So you know, Google has people within the country that will protest contract because AI is being used for war. Yet we have the most unstable geopolitical seen that I've ever witnessed in my lifetime going on right now. So, um, don't >>you think that's what happened with parlor? I mean, Rob Hope said, Hey, bar is pretty high to kick somebody off your platform. The parlor went over the line, but I would also think that a lot of the employees, whether it's Google AWS as well, said, Hey, why are we supporting you know this and so to your point about social justice, I mean, that's not something. That >>parlor was not just social justice. They were trying to throw the government. That's Rob e. I think they were in there to get selfies and being protesters. But apparently there was evidence from what I heard in some of these clubhouse, uh, private chats. Waas. There was overwhelming evidence on parlor. >>Yeah, but my point is that the employee backlash was also a factor. That's that's all I'm saying. >>Well, we have Google is your Google and you have employees to say we will boycott and walk out if you bid on that jet I contract for instance, right, But Microsoft one from maybe >>so. I mean, that's well, >>I think I think Tom Poole's making a really good point here, which is a Google is an alternative. Thio aws. The last Google cloud next that we were asked at they had is all virtual issue. But I saw a lot of I T practitioners in the audience looking around for an alternative to a W s just seeing, though, we could talk about Mano Cloud or Multi Cloud, and Andy Jassy has his his narrative around, and he's true when somebody goes multiple clouds, they put you know most of their eggs in one basket. Nonetheless, I think you know, Google's got a lot of people interested in, particularly in the analytic side, um, in in an alternative, hedging their bets eso and particularly use cases, so they should be able to do so. I guess my the bottom line here is the markets big enough to have Really? You don't have to be the Jack Welch. I gotta be number one and number two in the market. Is that the conclusion here? >>I think so. But the data gravity and the skills gravity are playing against them. Another problem, which I didn't want a couple of earlier was Google Eyes is that they have to boot out AWS wherever they go. Right? That is a huge challenge. Um, most off the most off the Fortune 2000 companies are already using AWS in one way or another. Right? So they are the multi cloud kind of player. Another one, you know, and just pure purely somebody going 200% Google Cloud. Uh, those cases are kind of pure, if you will. >>I think it's gonna be absolutely multi cloud. I think it's gonna be a time where you looked at the marketplace and you're gonna think in terms of disaster recovery, model of cloud or just fault tolerant capabilities or, you know, look at the parlor, the next parlor. Or what if Amazon wakes up one day and said, Hey, I don't like the cubes commentary on their virtual events, so shut them down. We should have a fail over to Google Cloud should Microsoft and Option. And one of people in Microsoft ecosystem wants to buy services from us. We have toe kind of co locate there. So these are all open questions that are gonna be the that will become certain pretty quickly, which is, you know, can a company diversify their computing An i t. In a way that works. And I think the momentum around Cooper Netease you're seeing as a great connective tissue between, you know, having applications work between clouds. Right? Well, directionally correct, in my opinion, because if I'm a company, why wouldn't I wanna have choice? So >>let's talk about this. The data is mixed on that. I'll share some data, meaty our data with you. About half the companies will say Yeah, we're spreading the wealth around to multiple clouds. Okay, That's one thing will come back to that. About the other half were saying, Yeah, we're predominantly mono cloud we didn't have. The resource is. But what I think going forward is that that what multi cloud really becomes. And I think John, you mentioned Snowflake before. I think that's an indicator of what what true multi cloud is going to look like. And what Snowflake is doing is they're building abstraction, layer across clouds. Ed Walsh would say, I'm standing on the shoulders of Giants, so they're basically following points of presence around the globe and building their own cloud. They call it a data cloud with a global mesh. We'll hear more about that later today, but you sign on to that cloud. So they're saying, Hey, we're gonna build value because so many of Amazon's not gonna build that abstraction layer across multi clouds, at least not in the near term. So that's a really opportunity for >>people. I mean, I don't want to sound like I'm dating myself, but you know the date ourselves, David. I remember back in the eighties, when you had open systems movement, right? The part of the whole Revolution OS I open systems interconnect model. At that time, the networking stacks for S N A. For IBM, decadent for deck we all know that was a proprietary stack and then incomes TCP I p Now os I never really happened on all seven layers, but the bottom layers standardized. Okay, that was huge. So I think if you look at a W s or some of the comments in the chat AWS is could be the s n a. Depends how you're looking at it, right? And you could say they're open. But in a way, they want more Amazon. So Amazon's not out there saying we love multi cloud. Why would they promote multi cloud? They are a one of the clouds they want. >>That's interesting, John. And then subject is a cloud architect. I mean, it's it is not trivial to make You're a data cloud. If you're snowflake, work on AWS work on Google. Work on Azure. Be seamless. I mean, certainly the marketing says that, but technically, that's not trivial. You know, there are latent see issues. Uh, you know, So that's gonna take a while to develop. What? Do your thoughts there? >>I think that multi cloud for for same workload and multi cloud for different workloads are two different things. Like we usually put multiple er in one bucket, right? So I think you're right. If you're trying to do multi cloud for the same workload, that's it. That's Ah, complex, uh, problem to solve architecturally, right. You have to have a common ap ice and common, you know, control playing, if you will. And we don't have that yet, and then we will not have that for a for at least one other couple of years. So, uh, if you if you want to do that, then you have to go to the lower, lowest common denominator in technical sort of stock, if you will. And then you're not leveraging the best of the breed technology off their from different vendors, right? I believe that's a hard problem to solve. And in another thing, is that that that I always say this? I'm always on the death side, you know, developer side, I think, uh, two deaths. Public cloud is a proxy for innovative culture. Right. So there's a catch phrase I have come up with today during shower eso. I think that is true. And then people who are companies who use the best of the breed technologies, they can attract the these developers and developers are the Mazen's off This digital sort of empires, amazingly, is happening there. Right there they are the Mazen's right. They head on the bricks. I think if you don't appeal to developers, if you don't but extensive for, like, force behind educating the market, you can't you can't >>put off. It's the same game Stepping story was seeing some check comments. Uh, guard. She's, uh, linked in friend of mine. She said, Microsoft, If you go back and look at the Microsoft early days to the developer Point they were, they made their phones with developers. They were a software company s Oh, hey, >>forget developers, developers, developers. >>You were if you were in the developer ecosystem, you were treated his gold. You were part of the family. If you were outside that world, you were competitors, and that was ruthless times back then. But they again they had. That was where it was today. Look at where the software defined businesses and starve it, saying it's all about being developer lead in this new way to program, right? So the cloud next Gen Cloud is going to look a lot like next Gen Developer and all the different tools and techniques they're gonna change. So I think, yes, this kind of developer ecosystem will be harnessed, and that's the power source. It's just gonna look different. So, >>Justin, Justin in the chat has a comment. I just want to answer the question about elastic thoughts on elastic. Um, I tell you, elastic has momentum uh, doing doing very well in the market place. Thea Elk Stack is a great alternative that people are looking thio relative to Splunk. Who people complain about the pricing. Of course it's plunks got the easy button, but it is getting increasingly expensive. The problem with elk stack is you know, it's open source. It gets complicated. You got a shard, the databases you gotta manage. It s Oh, that's what Ed Walsh's company chaos searches is all about. But elastic has some riel mo mentum in the marketplace right now. >>Yeah, you know, other things that coming on the chat understands what I was saying about the open systems is kubernetes. I always felt was that is a bad metaphor. But they're with me. That was the TCP I peep In this modern era, C t c p I p created that that the disruptor to the S N A s and the network protocols that were proprietary. So what KUBERNETES is doing is creating a connective tissue between clouds and letting the open source community fill in the gaps in the middle, where kind of way kind of probably a bad analogy. But that's where the disruption is. And if you look at what's happened since Kubernetes was put out there, what it's become kind of de facto and standard in the sense that everyone's rallying around it. Same exact thing happened with TCP was people were trashing it. It is terrible, you know it's not. Of course they were trashed because it was open. So I find that to be very interesting. >>Yeah, that's a good >>analogy. E. Thinks the R C a cable. I used the R C. A cable analogy like the VCRs. When they started, they, every VC had had their own cable, and they will work on Lee with that sort of plan of TV and the R C. A cable came and then now you can put any TV with any VCR, and the VCR industry took off. There's so many examples out there around, uh, standards And how standards can, you know, flair that fire, if you will, on dio for an industry to go sort of wild. And another trend guys I'm seeing is that from the consumer side. And let's talk a little bit on the consuming side. Um, is that the The difference wouldn't be to B and B to C is blood blurred because even the physical products are connected to the end user Like my door lock, the August door lock I didn't just put got get the door lock and forget about that. Like I I value the expedience it gives me or problems that gives me on daily basis. So I'm close to that vendor, right? So So the middle men, uh, middle people are getting removed from from the producer off the technology or the product to the consumer. Even even the sort of big grocery players they have their APs now, uh, how do you buy stuff and how it's delivered and all that stuff that experience matters in that context, I think, um, having, uh, to be able to sell to thes enterprises from the Cloud writer Breuder's. They have to have these case studies or all these sample sort off reference architectures and stuff like that. I think whoever has that mawr pushed that way, they are doing better like that. Amazon is Amazon. Because of that reason, I think they have lot off sort off use cases about on top of them. And they themselves do retail like crazy. Right? So and other things at all s. So I think that's a big trend. >>Great. Great points are being one of things. There's a question in there about from, uh, Yaden. Who says, uh, I like the developer Lead cloud movement, But what is the criticality of the executive audience when educating the marketplace? Um, this comes up a lot in some of my conversations around automation. So automation has been a big wave to automate this automate everything. And then everything is a service has become kind of kind of the the executive suite. Kind of like conversation we need to make everything is a service in our business. You seeing people move to that cloud model. Okay, so the executives think everything is a services business strategy, which it is on some level, but then, when they say Take that hill, do it. Developers. It's not that easy. And this is where a lot of our cube conversations over the past few months have been, especially during the cova with cute virtual. This has come up a lot, Dave this idea, and start being around. It's easy to say everything is a service but will implement it. It's really hard, and I think that's where the developer lead Connection is where the executive have to understand that in order to just say it and do it are two different things. That digital transformation. That's a big part of it. So I think that you're gonna see a lot of education this year around what it means to actually do that and how to implement it. >>I'd like to comment on the as a service and subject. Get your take on it. I mean, I think you're seeing, for instance, with HP Green Lake, Dell's come out with Apex. You know IBM as its utility model. These companies were basically taking a page out of what I what I would call a flawed SAS model. If you look at the SAS players, whether it's salesforce or workday, service now s a P oracle. These models are They're really They're not cloud pricing models. They're they're basically you got to commit to a term one year, two year, three year. We'll give you a discount if you commit to the longer term. But you're locked in on you. You probably pay upfront. Or maybe you pay quarterly. That's not a cloud pricing model. And that's why I mean, they're flawed. You're seeing companies like Data Dog, for example. Snowflake is another one, and they're beginning to price on a consumption basis. And that is, I think, one of the big changes that we're going to see this decade is that true cloud? You know, pay by the drink pricing model and to your point, john toe, actually implement. That is, you're gonna need a whole new layer across your company on it is quite complicated it not even to mention how you compensate salespeople, etcetera. The a p. I s of your product. I mean, it is that, but that is a big sea change that I see coming. Subject your >>thoughts. Yeah, I think like you couldn't see it. And like some things for this big tech exacts are hidden in the plain >>sight, right? >>They don't see it. They they have blind spots, like Look at that. Look at Amazon. They went from Melissa and 200 millisecond building on several s, Right, Right. And then here you are, like you're saying, pay us for the whole year. If you don't use the cloud, you lose it or will pay by month. Poor user and all that stuff like that that those a role models, I think these players will be forced to use that term pricing like poor minute or for a second, poor user. That way, I think the Salesforce moral is hybrid. They're struggling in a way. I think they're trying to bring the platform by doing, you know, acquisition after acquisition to be a platform for other people to build on top off. But they're having a little trouble there because because off there, such pricing and little closeness, if you will. And, uh, again, I'm coming, going, going back to developers like, if you are not appealing to developers who are writing the latest and greatest code and it is open enough, by the way open and open source are two different things that we all know that. So if your platform is not open enough, you will have you know, some problems in closing the deals. >>E. I want to just bring up a question on chat around from Justin didn't fitness. Who says can you touch on the vertical clouds? Has your offering this and great question Great CP announcing Retail cloud inventions IBM Athena Okay, I'm a huge on this point because I think this I'm not saying this for years. Cloud computing is about horizontal scalability and vertical specialization, and that's absolutely clear, and you see all the clouds doing it. The vertical rollouts is where the high fidelity data is, and with machine learning and AI efforts coming out, that's accelerated benefits. There you have tow, have the vertical focus. I think it's super smart that clouds will have some sort of vertical engine, if you will in the clouds and build on top of a control playing. Whether that's data or whatever, this is clearly the winning formula. If you look at all the successful kind of ai implementations, the ones that have access to the most data will get the most value. So, um if you're gonna have a data driven cloud you have tow, have this vertical feeling, Um, in terms of verticals, the data on DSO I think that's super important again, just generally is a strategy. I think Google doing a retail about a super smart because their whole pitches were not Amazon on. Some people say we're not Google, depending on where you look at. So every of these big players, they have dominance in the areas, and that's scarce. Companies and some companies will never go to Amazon for that reason. Or some people never go to Google for other reasons. I know people who are in the ad tech. This is a black and we're not. We're not going to Google. So again, it is what it is. But this idea of vertical specialization relevant in super >>forts, I want to bring to point out to sessions that are going on today on great points. I'm glad you asked that question. One is Alan. As he kicks off at 1 p.m. Eastern time in the transformation track, he's gonna talk a lot about the coming power of ecosystems and and we've talked about this a lot. That that that to compete with Amazon, Google Azure, you've gotta have some kind of specialization and vertical specialization is a good one. But of course, you see in the big Big three also get into that. But so he's talking at one o'clock and then it at 3 36 PM You know this times are strange, but e can explain that later Hillary Hunter is talking about she's the CTO IBM I B M's ah Financial Cloud, which is another really good example of specifying vertical requirements and serving. You know, an audience subject. I think you have some thoughts on this. >>Actually, I lost my thought. E >>think the other piece of that is data. I mean, to the extent that you could build an ecosystem coming back to Alan Nancy's premise around data that >>billions of dollars in >>their day there's billions of dollars and that's the title of the session. But we did the trillion dollar baby post with Jazzy and said Cloud is gonna be a trillion dollars right? >>And and the point of Alan Answer session is he's thinking from an individual firm. Forget the millions that you're gonna save shifting to the cloud on cost. There's billions in ecosystems and operating models. That's >>absolutely the business value. Now going back to my half stack full stack developer, is the business value. I've been talking about this on the clubhouses a lot this past month is for the entrepreneurs out there the the activity in the business value. That's the new the new intellectual property is the business logic, right? So if you could see innovations in how work streams and workflow is gonna be a configured differently, you have now large scale cloud specialization with data, you can move quickly and take territory. That's much different scenario than a decade ago, >>at the point I was trying to make earlier was which I know I remember, is that that having the horizontal sort of features is very important, as compared to having vertical focus. You know, you're you're more healthcare focused like you. You have that sort of needs, if you will, and you and our auto or financials and stuff like that. What Google is trying to do, I think that's it. That's a good thing. Do cook up the reference architectures, but it's a bad thing in a way that you drive drive away some developers who are most of the developers at 80 plus percent, developers are horizontal like you. Look at the look into the psyche of a developer like you move from company to company. And only few developers will say I will stay only in health care, right? So I will only stay in order or something of that, right? So they you have to have these horizontal capabilities which can be applied anywhere on then. On top >>of that, I think that's true. Sorry, but I'll take a little bit different. Take on that. I would say yes, that's true. But remember, remember the old school application developer Someone was just called in Application developer. All they did was develop applications, right? They pick the framework, they did it right? So I think we're going to see more of that is just now mawr of Under the Covers developers. You've got mawr suffer defined networking and software, defined storage servers and cloud kubernetes. And it's kind of like under the hood. But you got your, you know, classic application developer. I think you're gonna see him. A lot of that come back in a way that's like I don't care about anything else. And that's the promise of cloud infrastructure is code. So I think this both. >>Hey, I worked. >>I worked at people solved and and I still today I say into into this context, I say E r P s are the ultimate low code. No code sort of thing is right. And what the problem is, they couldn't evolve. They couldn't make it. Lightweight, right? Eso um I used to write applications with drag and drop, you know, stuff. Right? But But I was miserable as a developer. I didn't Didn't want to be in the applications division off PeopleSoft. I wanted to be on the tools division. There were two divisions in most of these big companies ASAP. Oracle. Uh, like companies that divisions right? One is the cooking up the tools. One is cooking up the applications. The basketball was always gonna go to the tooling. Hey, >>guys, I'm sorry. We're almost out of time. I always wanted to t some of the sections of the day. First of all, we got Holder Mueller coming on at lunch for a power half hour. Um, you'll you'll notice when you go back to the home page. You'll notice that calendar, that linear clock that we talked about that start times are kind of weird like, for instance, an appendix coming on at 1 24. And that's because these air prerecorded assets and rather than having a bunch of dead air, we're just streaming one to the other. So so she's gonna talk about people, process and technology. We got Kathy Southwick, whose uh, Silicon Valley CEO Dan Sheehan was the CEO of Dunkin Brands and and he was actually the c 00 So it's C A CEO connecting the dots to the business. Daniel Dienes is the CEO of you I path. He's coming on a 2:47 p.m. East Coast time one of the hottest companies, probably the fastest growing software company in history. We got a guy from Bain coming on Dave Humphrey, who invested $750 million in Nutanix. He'll explain why and then, ironically, Dheeraj Pandey stew, Minuteman. Our friend interviewed him. That's 3 35. 1 of the sessions are most excited about today is John McD agony at 403 p. M. East Coast time, she's gonna talk about how to fix broken data architectures, really forward thinking stuff. And then that's the So that's the transformation track on the future of cloud track. We start off with the Big Three Milan Thompson Bukovec. At one oclock, she runs a W s storage business. Then I mentioned gig therapy wrath at 1. 30. He runs Azure is analytics. Business is awesome. Paul Dillon then talks about, um, IDs Avery at 1 59. And then our friends to, um, talks about interview Simon Crosby. I think I think that's it. I think we're going on to our next session. All right, so keep it right there. Thanks for watching the Cuban cloud. Uh huh.

>>Studios in Palo Alto in Boston, connecting with thought leaders all around the world. This is a cute conversation. >>Hello everyone. This is Dave Volante. Welcome to this cube conversation. This is a company that we've been following now for the last couple of years in a trend in robotic process automation, and then automation specifically, uh, it's a, it's a company in an area that we really like. Uh, we've been researching this and publishing and Daniel Dienes is here. He's the CEO of UI path. Yeah, it was great to see you again. Thanks for coming on. >>Thank you for inviting me, David. >>That's our pleasure. So let's, let's get an update in your business. You know, we covert obviously you sent everybody for a loop. We had been and have been following you guys quite, quite closely. How's how are things going for UI path? How has the pandemic affected your business? >>We we've designed this company from day one to work in a hybrid mode, local and under, obviously working from anywhere. And the transition to working from anywhere model was a really fast to implement for us. So COVID-19 itself. In the fact of the way we work on the business side, I would say that we are seeing, you know, mixed of events, some, uh, industries that was, that were mostly affected by COVID we're putting their budgets one hole while other industries were increasing 10 times. What I can tell you that in, um, in a nutshell, the numbers for us were really good. We are able to keep eating and beating the thought gets that we set pretty COVID and we focused quite a lot on helping our customers, not the gating through these murky waters. We have quite a lot of, um, involvement in healthcare and federal business. We worked with a few hospitals to help with accelerating the COVID test. In one case, we were able to save two hours a day for every nurse. So instead of filling up paperwork, they are able to focus on the patient. And that's not one isolated instance. We've done tremendous work across the, across the globe. And, uh, you know, we, uh, you know, that we raised our last round in, uh, June end of June. And that was a recognition of our accelerated business, >>Right? Yes. I mean, you raised it in the, of the pandemic, you know, I I've been saying that. I mean, everybody of course says the covert has accelerated a number of trends and I've been saying there's a, that there's now an increased mandate for automation, I think there was before, but yeah, maybe there was some complacency, although you didn't see it in your numbers, you guys obviously growing very right fast. You mentioned healthcare. I would think of banking and financial as well, which of course was a stronghold. But when you think about in the U S anyway, that the payroll protection act and the number of loans that had to be processed, you know, bank bankers would talk to me and say, we are volume, increased two orders of magnitude. We had, we had no way to do it. And they turn to automation to do that. So, so I've said that there is an automation mandate, and I think there, there, there has been because of the productivity gap, particularly in the U S in Europe, you don't see it so much in, in of course in China. Uh, but, but certainly the U S in the last couple of decades has declined in terms of productivity. So, you know, people are not going to be able to solve the world's biggest problems without automation. How are you thinking about that? Um, in, in this post COVID world, >>As you said, the awareness that we have to automate has increased 10 times compared to pre COVID the days. I would not say that yet automation is number one priority on the company's leader's agenda, not in the same way as conferencing and video conferencing, and all this directly affected, positively affected the software industries. But I believe that, uh, while automation is slower to adopt, and it requires a lot more investment to adopt it's, uh, it's gone, uh, dominate the agenda post COVID in the, in the sense that people will have to recoup, you know, all the losses that they had in the COVID, they learn their lessons. And, uh, you know, for instance, I talked to the few CEOs of watch, you know, fortune 500 businesses, and they are telling me, Daniel, I wish that we have started earlier. So now we are seeing, you know, an adoption that is more top down and adoption that is starting from the C level suite, even the CEO of large enterprises. >>Yeah. I mean, it seems to me that if a customer has tasted, you know, the benefits of, of RPA and automation, uh, and as realizes what it can do for their business, they're gonna maybe double down on it, especially in a time when revenues might be under pressure. Uh, and, and you're not hiring a, a no, a lot of people have put, you know, freezes on number of head layoffs. You've got to do more with less you guys. I wonder if you could bring up this, this chart, I want to share this and get Daniel's reaction. So we all were talking about land and expand. So what this is ETR data, and what it does is it asks customers where they're at. Do they know about a vendor in this case? It's it's UI path is on the left and automation anywhere, and then some others, but do you know about the vendor? >>And, and are you planning on, you know, are you evaluating it? Are you planning to implement it? Uh, and this chart shows those respondents that said, yes, we, we, we are a customer. And we, we plan to expand our usage and you can see over the last three surveys that the yellow is even an uptick. And so people, this essentially the takeaway here is that once people taste it, that you land, and then they expand and find new use cases, are you seeing that in your business? And maybe you can give us some, some high level examples we've seen quite the look >>We have today more than 60 customers with, uh, over a million dollars in spending with us, uh, more than, uh, like 800 customers that spend more than a hundred K we've lost. And our net expansion rate is more than 140% consistent over many past quarters that shows a very solid, uh, expansion desire from our customers. And it shows that our technology is very well suitable for large case automation, deployments, enterprise wide, especially with our, uh, program or robot for every person. We are seeing huge interest and way bigger deals. We are able to lend upfront work to upscale our existing customers. You know, in a way I don't believe that in five years from now on, we will ever have people just to mindlessly move data from one screen to the other. I think this is a thing of the past, as much as plowing the fields is a thing of the past. >>So I wonder if he could talk a little bit about the, where you've come from as a company. So, I mean, you started in 2005. So, I mean, I think of you as a startup, but you've been around for a long time. Uh, and, and my sense is you started as a product company, but, you know, recently you guys announced this end to end platform for what you call or maybe Gardner calls. I don't know their term of hyper automation, but, but you've gone from a product company to a platform company. I wonder if you could talk about how you think about that transition and, and, and the platform generally >>To become a platform requires of certain level. And it's in a way, a harder business to promote to one enterprise customer. They, uh, they are very likely to test water with the product, but when, uh, you know, bad thing, everything, automation, why don't a platform, it's a different game. So this is why we, uh, we had to go from the steps of products, you know, product then like a couple of products, and then putting everything together into a platform. The power of the platform in, uh, in this particular instance comes from, uh, the integration of all pieces in a platform and an automation, white platform will have a different sets of products that play from the discovery of the processes that you automated, the implementation and maintenance of the process into the analytics that helps you track your progress. And also you have technologies that addresses two different persona in an enterprise from, you know, software engineers, RPA developers into the citizen developers. >>So it's a, it's a, it's a huge offering. And, um, the, what is really important for us is that we give full fledged platform. So an enterprise customer knows we will be able to build everything on the top of this platform, and they will offer best in class where it matters. And we believe that best-in-class matters in few important areas like RPA, like process mining, like analytics, while they will offer good enough where they will offer integration with best-in-class products where, uh, it's, uh, it's not so important in the, in the grand scheme of deploying automation, but the integration is tremendously important piece, put yourself in the shoes of a big enterprise instead of buying 20 different products, different, a licensing agreement, different maintainers stuff, different teams to support them. You just have one and they, and you have the guarantee. They work very well together. It's a very big proposition. I did requires maturity of the platform when they are making, you know, big strides into having the credibility that you know is required to have such a big investment. >>Well, I have to bring you bring that up. I have to ask you, so you guys are obviously a RPA and automation specialist building out a platform, very focused on that. And we always talk about this best of breed versus, uh, versus integrated suites. And you're sort of talking about integration. Of course, we saw Microsoft come out and as, as well as others, IBM, I think SAP have announced sort of what I would consider one dot products, you know, not nearly as robust as you and some of your, your leading competition, but how do you think about that in terms of staying ahead of that? I mean, you know, we all know Microsoft, you used to work there, they come out with a one Datto and, you know, then the two dot O and it's just still, and then eventually they get it right? So you have to move fast. >>Yes, absolutely. And we, we proved that we can move fast. We've built this company from zero five years ago to, you know, we are almost half a billion dollar in era today. So wait, we are fast. This is one of the four tenants of our culture be fast. But speaking about what the strategy in, uh, I believe that the space of low code, no code business application development, and the hyper automation space will, uh, converge into one single space, a company like Microsoft started with, uh, a simple product like, uh, if TTT and, uh, that was dedicated only to citizen developer to build very, you know, small and quick integrations. Like if you look at, uh, if you look at the power automate use cases, you'll see one of the most common use cases to set on a lot for myself. Well, I understand the value of such use case, but it's a far cry from setting an alarm and to automating, you know, end to end, procure to pay or order to cash for a big enterprise or COVID testing. >>And basically where we are coming from two different angles. We are coming from the RPA angle that is putting computer vision at the center of the technology. And they are coming from weak API integration. And we are making, we are making progress, you know, towards each other. My belief, I believe that, um, we have an advantage here in a sense that, uh, RPA is a technology that can produce immediate returns, but the labs K Y LA while the anther type of technologies, first of all, traditional automation, and then all this new type of API economy, API integrations kind of largely failed to show scalability within big enterprises. They are nice to have, but they are not essential when you are choosing a platform. My, uh, take is that you are choosing a platform based on what you need the most. This is where you choose the best in class. And you need the certainty that you partner with a vendor that invest the most. Well, this is our bread and butter. This is where we start. And of course we are offering every piece that the other are doing while they are also getting into, into our world. But our advantage being cloud agnostic, being ERP, agnostic, being CRM agnostic, and having started from the most sensitive technology that offer you, you know, the most, uh, the most savings center, best productivity increases. It's a tremendous advantage. >>And of course, you know, I'm excited about this opportunity and I've talked to a number of your customers. And so, you know, to me, that's the proof in the pudding, but you mentioned your annual recurring revenue, you know, approaching half a billion. So I got add, and, you know, as well that in my breaking analysis, we took a look at the total available market for RPA. And then I think, well, we've extended that I think we kinda missed the broader automation agenda in the platform thinking, and we've, we've updated those figures. I mean, it's, uh, it's hundreds of billions of dollars of an opportunity at least. And so the reason I bring this up is of course, last week we saw the hottest software IPO in history, and snowflake is a company with $400 million ARR growing at 120%. The company went from, you know, early this year, $15 billion valuation went up to 20, went up to 30. >>They, they launched a 33 billion within five minutes. It was worth 80 billion. You know, of course it's settling down now in the 60 billion, but unbelievable. And I would argue that your total available market is perhaps even even larger. I would say it is larger because it has a deeper business impact, uh, than, than say a snowflake. And of course, people watching my programs know that I'm a very, very high on that company. So my question is, what do you think about that, that IPO? How are you thinking about your, your own IPO? It would seem that that UI path is in a great position to at some point become a public company. >>We, first of all, if you are speaking about the time way, nobody would argue that our team is not higher than a snowflake. Pam, I, we can argue that their market is maybe more consolidated. Everybody understands data market in a way, and our market might be way more scattered across different use cases, but in a way, it's the market of data versus the market of all data versus old processes in the world. It's way, way more people are tasked today with processes then to analyzing and working with data in the way we are going after a very large problem that we have to solve. And we have to empower people of doing what they are naturally built to do, like, you know, talking to other people, socially interact, being creative, making decision, instead of doing this numbing part of their daily jobs that aren't required by this state of the industry. >>So our time we talked with different bankers and I've seen various figures from like 200 BD, one, two way into like two, three years for something that it's happy with. So time is the problem. It's the way, the way we are. I think, uh, we, uh, what we want to build, it's a durable business and it's a, it's a durable growth. Why in the same time being a cashflow positive, and we are very close to achieve this goals. And that will look, I believe that will be a very compelling proposition for our own IPO. I don't know if we can get snowflake multiples or not, but this is the feeling not the more, the biggest thing when my agenda, my, my agenda is to build a longterm sustainable, durable business. I am looking to next five to 10 years of this business. And IPO is just the fundraising event in, in, you know, after all. >>Great. So yeah, that's good. I wanted to ask you kind of what the, what the parameters are and, you know, I think you answered it is you're not rushing to get in, to draft off of some event that you had no control over that that notion of cashflow positive is really interesting to me. I said about the snowflake. I feel they have plenty of Tam just like you guys. And I agreed somewhere between 200 billion and 3 trillion. That's about right. And so, and, but, but I think that the, what I said about Snowflake's IPO is that I'm not worried about their lack of profitability right now. At some point I'm really going to be focused on their operating cash flow. And if you can, if you can come out with the large Tam, your, your growth that you're at the large ARR and cashflow positive, I can't wait to see that IPO Daniel. That's going to be super exciting. So we'll, we'll, uh, we'll be patient, but Daniel Dienes thank you so much for coming back into QBR. I was a great guest. Really appreciate the update on your business. >>Thank you so much. I really appreciate the invitation. Thanks. You're welcome. And >>Keep it right there. Everybody we'll be back with our next guest. Run up to this short break. This is Dave Volante.

>>Live from Las Vegas. It's the cube covering UI path forward Americas 2019 brought to you by UI path. >>Welcome back to Las Vegas. Everybody, you watching the cube, the leader in live tech coverage. We go out to the events, we extract the signal from the noise. Ahmed Zion, he is here, he's the chief automation officer at accelerate a specialist service provider in this area of RPA in Armando Lambert is the vice president of enterprise optimization governance and risk guys. Oh sorry. At Bayview asset management in Miami. Welcome to the cube criminal. Thank you for that. So Bayview, you've got a good view of the Bay and Miami, is that kinda where the name comes from or the beautiful place to work happening with UI path forward to was in Miami at the Fontainebleau back here in Vegas. But um, so let's get into it. I met um, chief automation officer. That's kind of a cool title. I don't see that a lot. What's that entail? And tell us about accelerate. >>So accelerate at accelerated where one of the largest nice providers is the only thing that we do a process automation and AI company. And our sole focus has been process automation since our inception and our past lives were generalists. We did well and wanted to do it again. Uh, so when we started accelerate, we wanted to make sure that we focused on a very specific vertical niche and process automation was just starting up the uptick about mid 2016 ish. >> So there's gonna be some interesting conversations around process automation is like had an analyst on yesterday, they predicted RPA is dead, you know, process automation lives. You know, it's kind of a tongue in cheek thing. So maybe we can talk about that a little bit, but Amando tell us about your role and a little bit about Bayview. So Bayview is an asset management company, primarily whole loans, mortgage back securities, mortgage servicing rights. >>We offer service advisory as well as investment vehicles. My role basically is to strategize, innovate, look at new technologies, new ways of streamlining the business. Um, and you know, about in 2016, you know, we were faced with the challenge and the challenge was we have a lot of road swiveled to chair type work, back office, operational work. Um, and I went in there just trying to look at people, processes and systems and trying to figure out a way to make things more efficient. And you know, RPA is one of those vehicles. Okay. So smart. You started with people in process, you didn't start with the technology. Yeah, absolutely. Right. So what did you learn? I mean, take us back to 2016 when you started to do the investigation, you started unpack the processes and the people. What did you see and then what led you to RPA? >>Yeah, I mean, I think inherently you're, you're, there's a lot of business processes that are just brought down through years of just being kind of entrepreneurial and doing a lot of business. So a, of these prices of processes early on we felt like we can just go in and automate and we realized that just needed a level of process optimization first. Um, so in doing that, it just kind of directs the vehicle right into what type of automation you need to do. It's not always RPA. RPA is big, a big component for us. Um, it works for us. Early on we wanted to put a strong governance structure. I strongly believe that, you know, and it's worked out so far for us. >> So you, you brought in accelerate, you brought in an outside firm to help you with that process automation, is that right? Absolutely. >>So tell us more about how that all went down. So that was, that was an interesting, um, interesting time, right? The, these products were coming up. Nobody really knew how well they work. And so we went in and we actually did proof of value, right? We said, Hey, this is all well and good. Let's do a proof of concept that a proof of value at that time, proof of concepts really were a thing. I don't, I don't think we should do them anymore. We should only do proof of values. But we went in, looked at the various systems they had, tried it out so he could demonstrate it to his management that this thing works. And as soon as that was over, I think I'd given to her, Armando, here we went all in, right? We said, all right, let's look at the highest value things. >>Let's deliver this. Um, let's figure out a governance model. Let's, let's not, let's not hold it back like we, like we have done in the past. It project spinning up. So let's get the infrastructure up and running very quickly. Let's get, let's get a few automations out there. Some of the business sees the value right away, right? Crawl, walk, run. We can do this. You know, what are we going to automate and what do we need from it and how are we going to govern this? These are the three pillars that I see that I suggest everybody look at it. And we did that in parallel parallel streams and all three of them. And within a few months he was able to return a significant value back to the business, which has led to adoption. I think, I think that has been a very big reason why he's been able to scale because he was able to show early value back to the business very quickly focusing on value rather than the technology or the underlying solution. >>Right? It's um, a lot of times we see folks going into RPA saying, what can RPA do for me? I think that is the wrong question. Um, the question really is what do you do? Let's classify what you do in manual mechanical work, intelligent work and wasteful work, right? And then look at your toolbox. I have RPA, I have AI, I have other technologies that within an enterprise folks are working on, and then apply those to it. RPA becomes the glue for most of these things. You have API as SDKs. You have AI technologies, be it cloud or on prem. RPA becomes the glue and it becomes easy to deploy once you figured out what all the different pieces are. But it's important to look at the process first and say, what? What do you do? So when the business comes back and say, what can you do for me with RPA? >>I said, no, I don't know. What can you do for, with the, I don't know. Tell me what you do and then I'll tell you what the solution is. So mono, given that you started with the value, did that ease some of those potential friction that you sometimes see with change management or change in general? Or did you still see that resistance? And I'm interested in where you started, what were some of those high value areas that you attack but, but the cultural piece first if you will. Yeah, I mean a lot of marketing, you know, it's really what it comes down to trying to prove to the Csuite and managing director areas. Like this is a value proposition. You know, early on, you know, we did a lot of presenting roundtables, luncheon learns with the business. You know, because there is some resistance early on. >>I think everybody has a misconception that it's going to take their jobs where I believe it's gonna create a lot more jobs in the future. Um, for me it was always a scalability play. You know, how can our business do more for less? And that's really what we really wanted to get to. Throughout that journey. We realized there's a lot of benefit, especially for companies that have a heavy back office operations. Um, and we just started, like I mentioned there, we started slow. I didn't want to boil the ocean. I knew I needed to prove to leadership that this works. And I think about three years ago, we all kind of felt, is this going to stick? You know, we've seen technology, I've been in technology for over 20 years and you know, some things fly, some things don't. Right? So we wanted to prove that it worked. >>And you know, the industry just kind of surrounded itself around that. And look where we are now. I think everybody's putting a lot of money in their budgets for, you know, intelligent automation, not just RPA. So the initiative was kind of middle up to the C suite and then top down. Is that how it, absolutely. I'm a firm believer the tone needs to come from the top. It has to come from the top. And you know, luckily for me, I have great leaders in our company. Um, they understood the vision, they understand what, what it could potentially mean for their business. They just needed someone to help execute it. So what kinds of things did you start with? There was a lot of sort of manual form filling out or some of that, uh, you know, data extraction from PDFs using, utilizing OCR, you know, RPAs great to gather and collect data so that they can put it in their models and make more informed decisions. >>Uh, claims processes, you know, dealing with different agencies. So, you know, early on in adopting UI path, there were some limitations. We worked around that. Now it's pretty much limitless and they could touch any system, any technology, any process. So yeah, it's growing tremendously. And in terms of just ensuring governance and compliance as you scale, you have robots doing that. Um, how do you tell me what we're working more and more. I mean, I think regulators now realize, okay, you're removing the human element, right? So, you know, that's a big value as well. Or sampling. Now you're not limited to what you can sample. You can sample 100%, you know, so those are big values and when you speak to regulators, they really understand that I would say five years ago, I'm not so sure. Um, but now they welcome it. And I think a lot of the government agencies now are, are adopting RPA. >>Uh, so it's, it's a good story. Well, automation kill sampling is that I think it is absolutely right. The point actually interesting point that you made, right? Uh, the regulators or the auditors or for that matter, the security and the compliance guys inside the enterprise have this. So this term of the bot, right has this connotation of Terminator and I keep telling him, no, this is that thing. You buy a target that does this. I press the right button, it goes right up, press the left button, mil goes left. It just doesn't think on its own. And I think that conversation is very important, right? Once you have that conversation with the security and the compliance guys to say, this is a bot, it only does what you ask it to do. You could put a social security number in front of this guy all day long in front of this user ID all day long. >>It just doesn't know what to do with it. Won't ever read it. And once they realize that they, the, the conversation changes, um, you know, especially when it in compliance and audit, right? Uh, the compliance officers would love this. Once you tell them there's a lot of decision making that happened in people's heads or Excel spreadsheets that never made it to systems and was never logged. So you'd get something in you massage that, you did that, and you put that in the system. That decision making is now auditable. So you can go back and say, here was the input, here was the massaging of it. Here's what went into the system of record after it came in. So that I think, I think those conversations early on really helped this scale in an age old problem and tribal knowledge. Exactly. You know, Joe has his spreadsheet and Fred knows the Joe has the spreadsheet. >>So when Joe leaves, he has to get the spreadsheet back. And that's kind of this perpetual thing. How much of what you guys did, Armando was processed re-engineering versus just applying automation at some low hanging fruit. Um, I think looking back now it's about a 50, 50 split. Um, you know, there are some areas that have robust processes and that makes our life easier. We can just kind of go in, map it out, look at the automation future state and deploy, develop and deployed. Uh, you know, some areas, you know, they inherit processes and they don't always just so busy doing their day jobs and they don't always realize there's, there's room for efficiency in their process. So, you know, early on when we priced out how much this would cost, how much development it would be, we didn't always factor in that it would be a 50, 50 split and doing a lot more process improvement in the beginning. >>Um, we've now counted for that. So absolutely. It's about a 50, 50 split. Craig LeClaire this morning said something that, you know, I was an analyst and he says, very, you know, very analyst's sort of savings. You've got to stop worrying about the ROI, you know, focus on the more strategic stuff. Every analyst sort of says that. But yeah, there weren't a lot of CFOs too. And they're like, where's the ROI? So you know, you're in the services business, you know, you have to have ROI dollars matter. Absolutely. So you obviously measure ROI. How do you look at it? You know what you said earlier, you're not cutting jobs, right? But so what do you tick? How do you measure kind of the, the value, the ROI? I mean, you know, giving the end user a little more to think about, right? Giving them the opportunity to, you know, do more, be more thoughtful in what their day to day job is rather than doing the swivel chair type work. >>So, you know, the measurement, the beauty around RPA is it's very quantifiable. You know, unlike some traditional it systems, you really can, the data doesn't always kick back. You know, all our, our, our own bots, all our processes kickback, they give us data that we can quantify, um, metrics on, on, on volume versus man hours. This is all information you capture early on. You need to do this at the discovery stage and we train. We have a robust training program for our business analysts and program managers and developers and they're always, that's the question they ask every time. It's not just about what is your process, your cute future, current state, future state, and it's like, how many limit? Let me look at your historical trending. What are their volumes look like? You know, our business is very cyclical. It goes up and down, and when I mentioned I want them to be scalable and have more capacity, that's really the play for me. >>For me, it's never been an FTE. I get it. It may come from the Csuite, but like I said, the tone from the top has been solid. Their vision is more about, Hey, when it's cyclical and it goes up and down, we need to be able to do more. We need to be able to scale. Have you been able to measure productivity improvement? Absolutely. Absolutely we have. If you had a Mulligan, what would you do differently? A good question. I mean, I think we factored early on, I mentioned this early on how much process improvement was needed. I think we undervalued that. And um, you know, every business faces the same challenges, right? They, you know, everyone feels like they're doing the right thing. These processes are inherited. You know, regulations change, investors change. There's new business rules every day, you know, and you kind of need to sit back as a business user every now and then and refresh that. >>And um, you know, we didn't account for that early on. We're helping the business do that. Our business is fantastic. They bought into the program and it's like having additional workforce working on your side. You know, Daniel Dienes in his keynote last night, basically sending them pick up on something you guys said is, is, um, he really appreciates those customers who took a chance early on. He goes, because frankly, our product wasn't, you know, fully, fully baked out. And I was like, wow, what an honest statement from a CEO. You don't usually hear that. My sense is that they got it right. You path. And I'd love your comments. In the sense that they attack, they went after simplicity and said, okay, make it easy to adopt and then we'll figure it out. And then, you know, bringing in the functionality is that, is that kind of what happened or picking up on Daniel? >>And by the way it was, it's amazing. Humility really comes through, right? So I saw him 2016 standing on stage and when my partner came to us for the idea of saying, Hey, we're going to do, we should do this RPA thing. Now I'm giving away my age. But 1998, my first job, I was sitting in front of the computer and Prudential and they put this software in front of me. It was called SQA robot. It was a test automation tool. It was called SQL robot. Uh, why that relates to Daniel is he's had a, came on the stage in the IRPA conference in 2016 if remember, I love this presentation just to blues black thing and few words on it. He goes, let's not kid ourselves. We have this very traditional, you know, QA automation technology that we think can do something really super. >>And I have built a product on top of that, but there's, there's not a lot of magic in here yet. Right. So that's, but, but I think the, the, the great thing about you I've had has been the vision, right? The vision has been, and if you saw yesterday they started with the core and unlike some of the other vendors, they said, we're just going to do RPA really well. We're not going to go into the OCR market. We're not going to try to build AI things. Let's make sure that our core RPA, so you know, you want to go, you're an enterprise, you want to do OCR, you're not going to buy it from an RPA company. You want to buy it from somebody who's been doing it for 30 years or we just has that sole focus. I think you'll have had had that sole focus. >>But as I've seen in the past three, four years, they've just done a great job with the, with the full vision, right. Starting from, they started with the middle of the core of the product and they said, okay, let's go towards the business and see what the business needs with, you know, planning of their, um, of their automations on and so forth and going further to the right to say, let us enable the technology guys who actually implement this to give them the tools and the integrations they need to, to actually make this routed to full product. Um, I think it's a very good question when people say, what can you do with RPA for me? So I said that answer was very different three years ago than it is today. Right? Some of the things are coming out of the box with these. So I, I, I predict that in the next few years, document understanding and natural language and all of that will just be built in today's still very sort of clunky in terms of how you do it. >>But I think those things are coming, coming together. So looking at processes that way is really important. It's a lot of runway for this. Margaret, Armando, I'll give you the last word. Where do you see are RPA or intelligent automation going in, in your organization? Is it still early days you had a lot more adoption or you're pretty much, you know, settled? No, definitely not settled. Um, I think it's, you know, RPA is just one of the tools in the spectrum of intelligent automation. So more integration, more API APIs, a lot of machine learning, uh, eventually some AI. Um, so yeah, we are not slowing down. There's a lot of opportunity. My mandate as I mentioned before, is just scale, scale, scale. So you know, the process is working. We have a good program in place. We'll continue marching forward. Great guys, thanks so much for coming. Thank you for sharing your story. Thank you for watching. From right back with the cube. Live from UI path forward three in Las Vegas. Right back.

>>Live from Las Vegas. It's the cube covering UI path forward Americas 2019 brought to you by UI path. Hello. We've already welcome to Las Vegas. This is day two of the year. >>Path forward conference UI path forward three. So what UI Pat does is they named their events one two three last year we were at Miami in the year before was one. Their North American event, which was in New York city. Here is three at the Bellagio hotel in in Las Vegas. 3000 people here for this rocket ship company growing revenues, they've got over $300 million in annual recurring revenue. That's up from 25 million in 2017 so you're talking about greater than 12 X increase in annual recurring revenues over 3000 employees. Now, Daniel Dienes, the CEO just named the industries the tech industry's latest billionaire. He's now dressing like a billionaire last year. He's in a tee shirt this year. He looks more like a more like a CEO. So we're going to be interviewing him later on today, but let's get right into it. The keynotes today comprised God Kirkwood who gave some predictions and that's her. >>I'm going to go, I'm going to talk about his predictions. I'm going to make some comments on those predictions and give you some thoughts of my own. Maybe throw in a few predictions of from Dave Vellante and then Craig LeClaire from Forrester gave a keynote. He was on the QBs today. Very knowledgeable analysts, probably one of the industry's top analysts, and I'll make some comments on some of the things he said. So let me get right into it. You got Kirkwood when you do these predictions, you know I put 'em out there. Of course it is smart. He's going to do these things and make them somewhat self-serving for RPA and UI path. So I'll make some comments on that as first one. One those was, there'll be a global economic downturn. I can't remember if he actually pinned a date, but I think he said it's in paint pending. >>Let's let's say 2020 he said that's good for RPA. Why would that be good for RPA? Because if there's an economic downturn, people are gonna want to get more. For less, and they're going to want to automate. They're gonna want to spend money and get fast ROI. And RPA potentially is a way to do that. It's not necessarily good news for low wage workers. They're doing mundane tasks. But nonetheless, he made the statement that it's good for our RPA. I would say this, I think a lot of this is going to depend on 2020 and the election in the United States as to what happens. I think it's very unclear right now. You saw the democratic debates last night. It's very clear that there's a, there's a swing to the left. Elizabeth Warren is, is kind of appears to be the front runner. So I would, I would make this prediction. >>I actually think Trump was gonna win the election. You know, don't hate me for saying that all you Trump haters, but I think whatever happens, maybe, maybe doesn't win the election. Maybe he wins the election and then, and then the subsequent election goes to the Democrats. But I think there's going to be a major swing back to the left. And I think that what that's gonna do, it's gonna open up the checkbooks and put more pressure on debt and I don't think there's a real issue right now of too fast economic growth of inflation. It's obviously something that economists watch, but if interest rates start rising back to the Clinton era levels, that means big trouble for the economy. But I don't see that necessarily happening in 2020 I think 2020 we'll see some moderation. I definitely think we're seeing less tech spending expected for Q four and I think that'll spill into 2020 based on the ETR and enterprise technology research data that we see. >>But I think it's actually a healthy pullback. I kind of agree with guy on that front. I actually think it is good for RPA. I think RPA is one of those sectors that you see in the ETR surveys that is gaining share relative to other tech spending and I think that will continue in any downturn. So I expect softness. However you define downturn, I don't think it's going to be falling off the cliff or a disaster, but I definitely think spending will be more tepid. Second thing he said is RPA will become the YouTube for automations. Think of YouTube as a container. I am not going to spend a lot of time on this one. A YouTube and RPA. I think no one's a consumer, but his, his analogy was around a container for automations, just like YouTube was a container for for video. I think they have aspirations to scale like YouTube, but if you look at RPA is a right now a back office, B2B business function and I think it'll stay that way for a couple of years. >>I'll make some statements on that. Automations will move from snowflake to snowball. What does he mean by that? Well today automations are all unique. Every company, and he made this statement feels like it's automations are a snowflake there. Everyone is different and what he's predicting is that over time these automations will become, there'd be more commonality in those automations. I think that's true. I do think while there are definite business processes that are unique to companies that there are a lot of similarities. Things like the UI path marketplace will allow people to share automations and I think there will be much more commonality. I think it's critical for scale. Number four, he said students entering the workforce will force employers to use automation. He didn't give a timeframe on this, but I'll tell you one thing. At a 2020 I've got three kids in college with two kids in college, one that's recently, recently graduated, who does something. >>Most kids in college have no clue what robotic process automation is, let alone what the acronym RPA stands for. So this is going to take some time. asked a hundred college kids what RPA is and I bet you maybe one or two have heard of it, even know what it is. So that's not happening today. I think that'll take probably another two cycles of graduate's before that really hits. We heard from the college of William and Mary yesterday where Tom Clancy and the college have partnered to really push in RPA into the curriculum and I think that's great. I'm going to talk, Tom Clancy's, a expert in the area of training and education that's going to take some time to bake out. So I would put that again. Guy didn't give a timeframe, but I would, I would say that's, that's five to eight years away. Number five, we'll continue to be surprised by the intelligence of machines and the stupidity of humans. >>Well, what he meant by that was there are some things that humans do that are repetitive, that are mistakes. They make the same mistakes over and over and over again, and machines won't necessarily do that. I do think this, that the gap or the number of things, if you make a list between the number of things that humans can do versus what robots can do with a physical or software robots, that gap is closing. There's no question about it. It's, you know, short few years ago, robots couldn't even climb stairs and now they can and you're, you're seeing things like chatbots improving. There's still, you know, a lot of them are still crap frankly, but, but you're going to see a lot of money go into chatbots. And so I do think that that gap will, will close. And I think it's, it's gonna, it's gonna come down to education and creativity in terms of the impact on job loss. >>And I'll make some comments about that in a moment. The six prediction, there are seven overall, so bear with me here. Automation will be discussed in the United nations con and the context will be jobs, wages and global economics. That's already happened. It's already happening. People are concerned about the impact on productivity and, and so, you know, that's a lock. The last one was consolidation amongst RPA vendors and automation led services will accelerate. I totally agree with this. He mentioned work fusion and amp works as two companies that are gonna. We're going to where we're going to see consolidation. We've already seen it. SAP got bought Contexto so you see in the big whales come into this market in four talks a lot about RPA. Anytime there's a fast growing software segment like RPA and as a leader like UI path, would you other companies all you know on their tail automation anywhere and blue prism automation anywhere in UI path have a ton of dough. >>You're going to see the big software companies say, wait a minute, I need a piece of that pie. Because software companies generally feel like every dime that's spent on software should go to them. That's the mentality of an SAP or an Oracle or even IBM and so either, unquestionably, you're going to see some consolidation. You mentioned service providers as well. Companies like symphony. I've been making a lot of comparisons this week between what I see in the UI path ecosystem and what I saw way back in the early part of this decade in the service now ecosystem. You had a company with Fritz like cloud sharper, which nobody ever heard of. They were a service management ITSMs expert and Accenture eventually snapped them up and came in. You saw DXC or CSC at the time do the same thing. And so I think you'll see the same thing here in this ecosystem. >>This ecosystem here is happening. It's buzzing, but it's got to grow and, and you're already seeing Deloitte and cognizant and E Y and PWC. The big guys could have jump in here. I often say that SIS love to eat at the trough and they know where the money is and the money appears to be in RPA because really there's so many screwed up processes inside companies. RPA is actually can give them a quick ROI. Now let me turn to some of my thoughts on this. Let me talk about the job impact of automation the vendors would have. You believe that it's all good, that people love this and and when they bring in software robots, it makes their lives better because they're doing less money, less money, less of the mundane tasks, and they're able to focus on new, more strategic things to our customer that we've talked to here in the cube. >>And also privately. This is true, people do love your software. Robots. When we were Jean younger yesterday from security benefit. If you Civ most excited she's ever been, you know, having said that, Craig Le Claire's research shows that over the next 10 years we will see a 16% job loss of jobs will disappear, rolls will disappear, and by the way, foresters at the low end of the spectrum of that forecast. Most forecast say 30 40% of jobs are going to get disrupted. I tend to believe that Craig's number is probably a better one at the lower end of that spectrum, but that's still a huge number. You are going to see unquestionably job impact from automation. Absolutely. No question in my mind. I think you're already seeing it now. Look it. Humans have always been replaced by machines, but for the first time in history we're seeing Keith cognitive functions replacing humans and as going to have a big disruptive impact on the workforce. >>And the other piece of this I would predict we are going to see a productivity boost. I think a significant productivity boost. Let me share you some data with the Bureau of labor statistics, which you know, you may look at that, you know in question some of their methodologies, but over the longterm, I think it's a viable metric from 2007 to 2018 productivity grew at 1.3% that's an anemic rate from from 1947 to 2018 productivity grew at 2.1% so Oh seven to 18 half the longterm productivity gain, 2000 to 2007 2.7% and then from, and then what we saw in Q one of 19 3.4% uptick in productivity. Is that sustainable? I think it is. I think we're now entering a, a new phase of productivity growth and I think it's gonna be driven by things like RPA and other automation. So that is going to have an impact back to the earlier statements on job loss. >>Okay. The other thing is I want to talk about the forecast, the market. Last year at UI path two in Miami, I said that I thought that forecast was low. They had like $4 billion by 2020 and I sort of called out Craig LaClaire on that, you know, and so I said this could be 10 billion by 2020 now he clarified that today up on stage. I was including services in, in my prediction, correct. Declares follows this market much more closely than I do. So I'll defer to him on, on on that. But he put in the services number and he showed the services to license ratio of around, you know, three X or so. But he actually had this very serial number about 10 billion by 2020 so I felt, felt good about that. That kind of bat my back of napkin prediction. I used to do this stuff at IDC for a living. >>So you know, actually got a little knack for that on an analog basis. Then he showed sort of his, his forecast for the market, you know, growing at a very linear rate. Now I'll say this, I think hot markets like RPA, they generally don't grow at a, at a, at a linear steady rate. If you look at some of the emerging forecasts that I, you know, for instance, IDC had in my years there, we would always have these linear like smooth growth forecasts. You know, some of those big markets, you know, think, you know, early days of the PC, the, the, the, the internet flash storage, you know, things of that nature. They tend to, these disruptive technologies tend to grow in an curve or an S curve. So what you see is sort of this momentum building where the market is being seeded. Know Gardner has RPA now in the trough of disillusionment. >>So you're seeing some of this, okay, the little engine that could, and then what you see is this steep part of the S curve growing and then after it explodes and hits escape velocity, it's sort of stretches out into maturity. And I think that's what you're going to see with RPA. But some things have to happen before that happens. And one is specifically the RPA has to move from the back office to the front office. It has to move from only really dealing with pretty simple, mundane tasks to more complicated automations. It's got to be able to deal with unstructured data. It's gotta be able to handle on attended or rather attended bots where you're injecting humans into the equation and you're actually using machine learning and artificial intelligence to to learn and then identify other areas of automation and actually have systems of agency that can act. >>In other words, a bot will call another bot that actually can complete a transaction and so you're going to see a lot of money spent here. This is a big chasm. I think that RPA has to cross. We're going to talk to Daniel DNAs about this. He's a big ticker. He's a go big or go home guy, and so I think those things I would predict those things actually are going to happen because you're going to see so much effort and money and emphasis put into AI and for competitive advantage that I actually think that RPA can lead that and then again come back to the consolidation. I think you will see some consolidation. I think you're seeing UI path. Try to take the lead automation anywhere is kind of pressing the lead if you will. Both companies have raised a couple of billion dollars if you combine them and I think the way this market shakes out is any and you're going to have some of the big whales come in like SAP. >>I think the way this happened is you're going to see one or two specialists emerge. I think UI path is on its way there automation anywhere as well and and the number one player is going to make a lot of money. The number two players going to do two. OK the number three player is going to struggle and everybody else is kinda be either break even or they're going to bundle it in like SAP as part of their overall portfolio and compete on that basis. So I would predict that UI path will maintain its lead. I think its got the culture to do that. I think automation anywhere also could company is going to keep pressing that lead and those should are two companies you know that you need to watch me. Interesting to see. Blue prism, I think they are somewhat under capitalized. They went to the public markets. >>The spending data actually shows all three of these companies as well as some of the legacy companies like Pega systems actually gaining could have more share relative to other initiatives. So I think even some of these legacy companies are going to continue to chug along and actually do pretty well in the business. But, but the real darling, you know, I think it's going to be UI path. All the bankers are hovering around earlier on this week trying to get their business. They know there's an IPO coming at some point. Again, we'll ask Daniel Dienes about that today. You have it. That's my intro. Some of my predictions. Some a guy Kirkwood's predictions. Wall-to-wall coverage on the cube today, day two at UI path forward three from Las Vegas. We'll be right back right after this short break.

>>Live from Las Vegas. It's the cube covering UI path forward Americas 2019 brought to you by UI path. >>Hello everyone and welcome to the cubes live coverage of UI path forward here at the Bellagio. I'm your host hosting alongside of Dave Volante. David's so great to be here with you. I'm so excited to get into this. See Rebecca, so we were, we would use came from the keynote. A lot of high profile UI path executives and important customers were on there too, but then this is the message is it's time to reboot work. It's time to reboot your business, transformed the customer experience, transform the employee experience. I'm wondering as someone who spent a lot of time at these kinds of conferences, and here's a lot of this, these, this kind of messaging, especially in this age of digital transformation, how compelling do you find this value proposition, this, this idea that RPA, robotics, processing automation can do these things? >>The first thing I would mention, Rebecca, is to me it's all about the customers. And you know, it's rare that you see a tech show start with the customers to actually do in the intro. I've seen it before. Nutanix actually does it at his shows, but it's, but it's quite rare because you know, the vendors want to put their message out, they want to control everything, and so they're very, very cautious about that. But, so we had three customers up on stage today doing the intro, which I thought was kind of cool. Tech shows, you know, a lot of smoke, a lot of mirrors and so forth. So you have to try to squint through that. I would say this, it's very clear that the age of automation is here. You know, people have been always concerned about automation for good reason. They're afraid that automation is gonna take away their jobs. >>Having said that, machines have always replace humans. We've talked about this a lot on the cube, but this is the first time in history that machines are replacing humans with cognitive tasks. So that's got to be scaring people a little bit. But when you come back and answer your question, when you talk to customers, they're really happy about software robots because they're doing, they're automating mundane tasks that these folks don't want to do on a day to day basis and they want to do other things. They want to get their weekends back. They don't want to just manually enter data from spreadsheets into applications and back and forth. And so from that standpoint, I think it is real and it is unique. You know, the big question is how much of this is transformational and is it really a path to AI something that UI path and others are really pointing towards and we're going to explore that, >>right? I mean in what you were just saying too is that that that the company's pitch is that we are freeing people. We are liberating them from the mundane, from the drudgery, from the data entry. And as you, as you pointed out, rightfully, a lot of the customers are saying, Oh no, it's giving our time. It's giving our employees time back to focus on the higher level tasks, the more creative aspects of their job. But, but I wonder if it is in fact a w what it really is doing. Two jobs. I mean I think that there was a really telling line in that Forbes profile of uh, Daniel Dina's who is the, the CEO of this company is founder of this company. The first ever bought billionaire exactly. Um, where it was an MIT professor quoted saying, you know, we always say to the companies that we say, give, give us your data and we'll tell you if it is in fact, uh, having this job killing effect. And he said, the companies don't want to give, give that up. >>Right? So now just look at the why is Daniel didn't as a billionaire, it will here, here, here's why. >>Yeah, walk, walk us through this. >>So UI path is up to 3,400 employees. 34 50 is the actual number. Now back in 2017, two years ago, this company did $25 million in annual recurring revenue. Now, ARR is a metric that's very important because you know, even though you book, let's say you book a $12,000 deal, you recognize that $1,000 a month over the 12 month period. So ARR is a very really important metric. So 25 million in 2017 my sources indicate that they'll do over 300 million this year in ARR. So we're talking about a 12 X plus increase in a two year period. They've raised $1 billion. One of their key competitors, automation anywhere has raised similar amounts of money. So they're talking about a couple of billion dollars raised just in the last couple of years. UI past valuation in March was $7 billion. So at that kind of back of napkin, and we're talking about a $10 billion valuation, Daniel obviously owns a lot of that. >>So 20% yeah. So it's, it's pretty substantial in terms of the market impact. Now valuations, as you all know, it's a fleeting metric, right? It comes in, it goes, but so the, but the landscape is very strong right now. It's really interesting to see how much customers are glomming onto this automation tailwind. The other comment I would make is let's lay out the sort of competitive landscape. UI path has gone from kind of a clear third in the marketplace to clear number one. I mean they're kind of separating from the pack, but there are others automation anywhere, blue prism and there are a number of legacy customers as well >>that that's what I wanted to ask you too, is that we have seen a few Microsoft and Google of course are, are, are partnered in their, in their customers, but they also are moving into this area themselves. So I mean will you will let UI path be able to maintain its competitive position as these very established and frankly very smart companies move into this area. Safety's >>another one. SAP bought an RPA company. It's a good question, but, so if you look at, let me start with this sort of underlying trend. If you look at the spending data, so we have access to the enterprise technology, research spending data and it shows the entire space is gaining share relative to other technology initiatives. So when you look at the data for UI path automation, anywhere blue prism, even legacy process automation companies like Pega systems, they're all actually from a spending standpoint attracting a lot of attention. So it's this rising tide lifts all ships. It's still somewhat early in terms of this next generation RPA if you will, you I-PASS advantage is simplicity. They are totally focused on this. You see this all the time. Do we go best of breed or do we go with a suite? So if Oracle comes up with an RPA solution, they throw it in for free, you know, does a customer take that? >>I think it comes down to what the business value is and that's something we're going to explore. It's not uncommon in detect industry that there's a first mover advantage or maybe it's a second mover advantage. You know, Facebook wasn't really first mover, but the one who really gets it right is kind of a winner take most. And so that's where a UI path is going like crazy right now. Trying to scale the company, raise a bunch of money. We saw this week a bunch of bankers sort of sniffing around. All the bankers are here cause they want their business. So I would expect there's some kind of IPO on the horizon, which I think they need to do to be, to your point to be able to compete with the big guys. So bottom line is they have to do it on a better product, more openness, moving faster and getting to scale. And I think they'll be able to reach escape velocity. I don't know if there's enough room for the big three. I would expect that given the spending climate is very good for everybody right now. I would expect within the next two to three years, some consolidation in this space. >>Well. So one of the things that you had just talked about with this next generation RPA, and that is exactly where we're going because these bots have got to become more durable, more smarter and more capable of handling complex tasks. We saw a number of new product announcements today. Oh, I might to get your thoughts and what you think about them and just whether or not they will have this transformational effect. Um, so, so yes, we have some new product announcements, some, some that democratize automation building that all you have to do is know how to run an Excel spreadsheet and you too can build an automation in your company. >>Yeah. It'll take a little bit of training though. >>I know. I think a better idea for those those demos is they should just pluck someone out of the audience and say, okay, you're going to do this. >>No, they would fail. I mean, let's say said, I remember the first time you learned Excel, I'm old enough to remember slash file, retrieve, paste, copy, whatever. You had to go through some training and we went through classes back in the eighties I think it's a similar here. I mean it's not overly complex. It's gonna have a low code theme, but you're right, UI path announced the number of new products. You know, we looked at this a couple of years ago, we went, we went out and we took the big three from the Forrester wave blue prism automation anywhere in UI path and we said, Hey, let's download them and start building some, some, some automations. While the only software we could get ahold of was UI path. Because as they say, they had kind of a simpler or more open model. The other guys were like, well, talk to a reseller is spend some money. >>And we were like, no, we just want to try it before we buy it. And we weren't able to get the other guy software. Now I think automation anywhere has made some strides in that regard in terms of simplification. You know, it's a copycat industry like the NFL. But so let's remember here we're talking about automating mundane tasks. Relatively simple automations. The customers are asking for things like more complex automations. How do we prioritize the automations? How do we figure out where, what's the best bang for the buck? How do we actually have attended bots because many of these are unintended. They'd like to have the human injected into the equation and that's pretty interesting because it brings forth this augmentation scenario that's everybody's talking about in AI and that starts to move us from sort of this tactical, I'm going to save some time on a use case specific or a technology specific automation to something that's more strategic that I can scale across my organization but right now people are saving money on this as a super hot space. As I say, all the bankers are trying to get in because they know some other ideas are coming down the road and the VCs I'm sure are gonna want the air exits. >>I want to talk to you about the leadership of this company. This is Daniel Dienes and you have interviewed him many times. Do minimun has as well. He he, he seems like a different kind of CEO. I mean, first of all, he is, he's a Romanian. Uh, he grew up, uh, behind the iron curtain. Uh, he was a professional bridge player for awhile, at least play competitive bridge player play competitive bridge and now he is a company headquartered in New York city. He still spends a lot of time in Bucharest but I'm curious to hear your thoughts about his leadership style and the kind of culture he's created at UI path and whether or not, because he's made some key hires from AWS, from Google, some, some of the more established tech players, whether or not he is, whether or not he'll be able to keep that startup culture, that startup mindset as the company becomes so much bigger. Well >>I think it's a concern and something that we want to ask about when you ask Daniel about, you know, how have you been able to do this? He'll talk about the mistakes that they made, how they sort of, they had a build it and you and they shall come mentality, which is kind of kind of old thinking these days and they sort of lucked into this RPA space. He also emphasize, emphasize as humble, and he's a very humble guy. I mean, you'll, you'll, you'll meet him I think last year he came on and you know, he's a developer. He had a tee shirt on. He's a coder right now. He's a billionaire coder. So maybe, maybe he'll, he'll dress up a little bit, but you know, maybe a fancy tee shirt, I don't know. Or maybe a collared shirt that says UI path on it. We'll see. >>But so they end, they want to move fast. They believe in openness there. They believe in transparency. I think those things worked in today's marketplace. People love the guy. I mean the customers love them. The employees love them. As you said, they're pulling people in from the hottest companies. Google, AWS. We, I got a on the shoulder today from, from a gentleman and I know from Google, he was in sales at Google. It's not me. There's no, Oh, I'm day three. And so people want to be part of this, this rocket ship. And I think it's gonna move very, very fast. Like I say, I think you're going to see some moves in the marketplace. I think you're going to see some exits and consolidations. We saw some M and a today UI path announced the acquisition of company called process gold that actually competes with a partner of UI path. So it's again, people are going to be on collision courses and they recently made another acquisition of a company called step shots and we're seeing some M and a, you know, relatively small MNA, but it's all about how can they transform from this little startup to this major player. To your point that can compete with the Microsofts and the SAP and the big whales of the world. >>And what do you think is his bigger selling point? Is it that it is transforming the employee experience, which as we know that that should not be discounted because an employee who is doing less mundane tasks able to focus on the more creative interesting parts of his or her job is a happier employee, happier your employees, more productive employee. A more productive employee means a healthier bottom line. So that's now funding to discount. Also the customer experience, as you said, which is clearly a huge top priority for this company. But, but I think the question is, is this technology now is a transformative enough? >>You know, as you asked that question, it kind of reminds me in a different way of a company that we've followed for years service now. When service now first came out, it was kind of doing what people saw as help desk, improving help desk, and they disrupted an industry and they made it better, which is kind of boring. It's kind of mundane, but actually having good it where you're not constantly down and you're not complaining and stuff's not falling through the cracks actually can be somewhat transformative. Kind of boring, but really important. And I see a similar sort of pattern here now the vision is, you know, a robot for every worker and the path to AI and we'll see. But right now the trans, the transformation is we're going to take away all this crap that you hate doing all these crap locations or mundane tasks and we're going to make your life better. >>And people workers want that and it's going to be in theory, a productivity boost as a result of that. That in and of itself, I think Rebecca can be transformative because it'll, it'll help with morale, it'll help with culture, it'll allow people to shift their emphasis on more strategic work and drive more value for the companies. And so, and I think companies that invest in RPA are, are seeing returns in terms of quality, just in terms of employee morale. You'll hear that from the customers that we talked to today. So I think in that sense it can be transformative like service now was now can it take the next step or is this really just paving the cow path? Is it just taking mundane known processes, automating them as opposed to really rethinking what process automation should look like. And that's some of the criticism of RPA and the RPA hype. And you know, we're going to talk about that. We're going to talk to customers about that. We've got analysts from HFS coming on, Kathy from Gartner's coming on. So excited to hear their perspectives as well. >>Exactly. And I, I want to reiterate that point that you're absolutely right. Their question is should we actually think about redesigning the process itself rather than automating the, the the flawed process? >>Yeah, and I mean I guess part of me says yes strategically we should be doing that, but another part of me says, look, I don't have to change anything. And I think that's the big advantage of UI path and these other players is you can basically automate what you have today. You don't have to redesign the process because process redesign is a heavy lift. So if I don't have to do a heavy lift, if I can improve what I'm doing today and it works, yeah, it's the old, if it ain't broke, why fix it, but just improve it. I think that's a very powerful, I think the big question I have is, is that like a big hit of a step function or is it really transformative? I feel like today's tech is a step function, which is important. You're going to get that step function, but I think you're going to absorb that benefit fast and then people are going to say, okay, now what? >>Another good example is virtualization. When I first saw virtualization and the ability to spin up a server, my jaw dropped and went, Oh my God, I could spin up a server in five minutes and it used to take weeks, months to spin up a server. That's game changing. Nobody talks about virtualization anymore. It was a, you know, a five year absorption of productivity for it and now it's like, yeah, I've been there, done that. That's yesterday's news. I think the same thing is going to happen with today's RPA and the big question is can they cross that strategic chasm into what the gentleman from Pepsi, the executive from Pepsi was saying, this automation fabric across the enterprise as a, as a platform for automation and artificial intelligence. That's a big leap. These guys get big plans. Daniel Dienes is a big thinker, go big or go home. So I don't, I don't have the crystal ball on that, I think, but I think there's a decent opportunity given that there's enough attention on this business right now that it, that it could be transformed. >>All right, well, hopefully we'll know more at the end of these two days. Dave, I've, I'm looking forward to getting into with you. I'm Rebecca Knight for Dave Volante. Stay tuned for more. You're watching the cube.