>> From the CUBE Studios in Palo Alto in Boston, bringing you data driven insights from the Cube and ETR. This is Breaking Analysis with Dave Vellante. >> A better than expected earnings report in late August got people excited about Snowflake again, but the negative sentiment in the market is weighed heavily on virtually all growth tech stocks and Snowflake is no exception. As we've stressed many times the company's management is on a long term mission to dramatically simplify the way organizations use data. Snowflake is tapping into a multi hundred billion dollar total available market and continues to grow at a rapid pace. In our view, Snowflake is embarking on its third major wave of innovation data apps, while its first and second waves are still bearing significant fruit. Now for short term traders focused on the next 90 or 180 days, that probably doesn't matter. But those taking a longer view are asking, "Should we still be optimistic about the future of this high flyer or is it just another over hyped tech play?" Hello and welcome to this week's Wiki Bond Cube Insights powered by ETR. Snowflake's Quarter just ended. And in this breaking analysis we take a look at the most recent survey data from ETR to see what clues and nuggets we can extract to predict the near term future in the long term outlook for Snowflake which is going to announce its earnings at the end of this month. Okay, so you know the story. If you've been investor in Snowflake this year, it's been painful. We said at IPO, "If you really want to own this stock on day one, just hold your nose and buy it." But like most IPOs we said there will be likely a better entry point in the future, and not surprisingly that's been the case. Snowflake IPOed a price of 120, which you couldn't touch on day one unless you got into a friends and family Delio. And if you did, you're still up 5% or so. So congratulations. But at one point last year you were up well over 200%. That's been the nature of this volatile stock, and I certainly can't help you with the timing of the market. But longer term Snowflake is targeting 10 billion in revenue for fiscal year 2028. A big number. Is it achievable? Is it big enough? Tell you what, let's come back to that. Now shorter term, our expert trader and breaking analysis contributor Chip Simonton said he got out of the stock a while ago after having taken a shot at what turned out to be a bear market rally. He pointed out that the stock had been bouncing around the 150 level for the last few months and broke that to the downside last Friday. So he'd expect 150 is where the stock is going to find resistance on the way back up, but there's no sign of support right now. He said maybe at 120, which was the July low and of course the IPO price that we just talked about. Now, perhaps earnings will be a catalyst, when Snowflake announces on November 30th, but until the mentality toward growth tech changes, nothing's likely to change dramatically according to Simonton. So now that we have that out of the way, let's take a look at the spending data for Snowflake in the ETR survey. Here's a chart that shows the time series breakdown of snowflake's net score going back to the October, 2021 survey. Now at that time, Snowflake's net score stood at a robust 77%. And remember, net score is a measure of spending velocity. It's a proprietary network, and ETR derives it from a quarterly survey of IT buyers and asks the respondents, "Are you adopting the platform new? Are you spending 6% or more? Is you're spending flat? Is you're spending down 6% or worse? Or are you leaving the platform decommissioning?" You subtract the percent of customers that are spending less or churning from those that are spending more and adopting or adopting and you get a net score. And that's expressed as a percentage of customers responding. In this chart we show Snowflake's in out of the total survey which ranges... The total survey ranges between 1,200 and 1,400 each quarter. And the very last column... Oh sorry, very last row, we show the number of Snowflake respondents that are coming in the survey from the Fortune 500 and the Global 2000. Those are two very important Snowflake constituencies. Now what this data tells us is that Snowflake exited 2021 with very strong momentum in a net score of 82%, which is off the charts and it was actually accelerating from the previous survey. Now by April that sentiment had flipped and Snowflake came down to earth with a 68% net score. Still highly elevated relative to its peers, but meaningfully down. Why was that? Because we saw a drop in new ads and an increase in flat spend. Then into the July and most recent October surveys, you saw a significant drop in the percentage of customers that were spending more. Now, notably, the percentage of customers who are contemplating adding the platform is actually staying pretty strong, but it is off a bit this past survey. And combined with a slight uptick in planned churn, net score is now down to 60%. That uptick from 0% and 1% and then 3%, it's still small, but that net score at 60% is still 20 percentage points higher than our highly elevated benchmark of 40% as you recall from listening to earlier breaking analysis. That 40% range is we consider a milestone. Anything above that is actually quite strong. But again, Snowflake is down and coming back to churn, while 3% churn is very low, in previous quarters we've seen Snowflake 0% or 1% decommissions. Now the last thing to note in this chart is the meaningful uptick in survey respondents that are citing, they're using the Snowflake platform. That's up to 212 in the survey. So look, it's hard to imagine that Snowflake doesn't feel the softening in the market like everyone else. Snowflake is guiding for around 60% growth in product revenue against the tough compare from a year ago with a 2% operating margin. So like every company, the reaction of the street is going to come down to how accurate or conservative the guide is from their CFO. Now, earlier this year, Snowflake acquired a company called Streamlit for around $800 million. Streamlit is an open source Python library and it makes it easier to build data apps with machine learning, obviously a huge trend. And like Snowflake, generally its focus is on simplifying the complex, in this case making data science easier to integrate into data apps that business people can use. So we were excited this summer in the July ETR survey to see that they added some nice data and pick on Streamlit, which we're showing here in comparison to Snowflake's core business on the left hand side. That's the data warehousing, the Streamlit pieces on the right hand side. And we show again net score over time from the previous survey for Snowflake's core database and data warehouse offering again on the left as compared to a Streamlit on the right. Snowflake's core product had 194 responses in the October, 22 survey, Streamlit had an end of 73, which is up from 52 in the July survey. So significant uptick of people responding that they're doing business in adopting Streamlit. That was pretty impressive to us. And it's hard to see, but the net scores stayed pretty constant for Streamlit at 51%. It was 52% I think in the previous quarter, well over that magic 40% mark. But when you blend it with Snowflake, it does sort of bring things down a little bit. Now there are two key points here. One is that the acquisition seems to have gained exposure right out of the gate as evidenced by the large number of responses. And two, the spending momentum. Again while it's lower than Snowflake overall, and when you blend it with Snowflake it does pull it down, it's very healthy and steady. Now let's do a little pure comparison with some of our favorite names in this space. This chart shows net score or spending velocity in the Y-axis, an overlap or presence, pervasiveness if you will, in the data set on the X-axis. That red dotted line again is that 40% highly elevated net score that we like to talk about. And that table inserted informs us as to how the companies are plotted, where the dots set up, the net score, the ins. And we're comparing a number of database players, although just a caution, Oracle includes all of Oracle including its apps. But we just put it in there for reference because it is the leader in database. Right off the bat, Snowflake jumps out with a net score of 64%. The 60% from the earlier chart, again included Streamlit. So you can see its core database, data warehouse business actually is higher than the total company average that we showed you before 'cause the Streamlit is blended in. So when you separate it out, Streamlit is right on top of data bricks. Isn't that ironic? Only Snowflake and Databricks in this selection of names are above the 40% level. You see Mongo and Couchbase, they know they're solid and Teradata cloud actually showing pretty well compared to some of the earlier survey results. Now let's isolate on the database data platform sector and see how that shapes up. And for this analysis, same XY dimensions, we've added the big giants, AWS and Microsoft and Google. And notice that those three plus Snowflake are just at or above the 40% line. Snowflake continues to lead by a significant margin in spending momentum and it keeps creeping to the right. That's that end that we talked about earlier. Now here's an interesting tidbit. Snowflake is often asked, and I've asked them myself many times, "How are you faring relative to AWS, Microsoft and Google, these big whales with Redshift and Synapse and Big Query?" And Snowflake has been telling folks that 80% of its business comes from AWS. And when Microsoft heard that, they said, "Whoa, wait a minute, Snowflake, let's partner up." 'Cause Microsoft is smart, and they understand that the market is enormous. And if they could do better with Snowflake, one, they may steal some business from AWS. And two, even if Snowflake is winning against some of the Microsoft database products, if it wins on Azure, Microsoft is going to sell more compute and more storage, more AI tools, more other stuff to these customers. Now AWS is really aggressive from a partnering standpoint with Snowflake. They're openly negotiating, not openly, but they're negotiating better prices. They're realizing that when it comes to data, the cheaper that you make the offering, the more people are going to consume. At scale economies and operating leverage are really powerful things at volume that kick in. Now Microsoft, they're coming along, they obviously get it, but Google is seemingly resistant to that type of go to market partnership. Rather than lean into Snowflake as a great partner Google's field force is kind of fighting fashion. Google itself at Cloud next heavily messaged what they call the open data cloud, which is a direct rip off of Snowflake. So what can we say about Google? They continue to be kind of behind the curve when it comes to go to market. Now just a brief aside on the competitive posture. I've seen Slootman, Frank Slootman, CEO of Snowflake in action with his prior companies and how he depositioned the competition. At Data Domain, he eviscerated a company called Avamar with their, what he called their expensive and slow post process architecture. I think he actually called it garbage, if I recall at one conference I heard him speak at. And that sort of destroyed BMC when he was at ServiceNow, kind of positioning them as the equivalent of the department of motor vehicles. And so it's interesting to hear how Snowflake openly talks about the data platforms of AWS, Microsoft, Google, and data bricks. I'll give you this sort of short bumper sticker. Redshift is just an on-prem database that AWS morphed to the cloud, which by the way is kind of true. They actually did a brilliant job of it, but it's basically a fact. Microsoft Excel, a collection of legacy databases, which also kind of morphed to run in the cloud. And even Big Query, which is considered cloud native by many if not most, is being positioned by Snowflake as originally an on-prem database to support Google's ad business, maybe. And data bricks is for those people smart enough to get it to Berkeley that love complexity. And now Snowflake doesn't, they don't mention Berkeley as far as I know. That's my addition. But you get the point. And the interesting thing about Databricks and Snowflake is a while ago in the cube I said that there was a new workload type emerging around data where you have AWS cloud, Snowflake obviously for the cloud database and Databricks data for the data science and EML, you bring those things together and there's this new workload emerging that's going to be very powerful in the future. And it's interesting to see now the aspirations of all three of these platforms are colliding. That's quite a dynamic, especially when you see both Snowflake and Databricks putting venture money and getting their hooks into the loyalties of the same companies like DBT labs and Calibra. Anyway, Snowflake's posture is that we are the pioneer in cloud native data warehouse, data sharing and now data apps. And our platform is designed for business people that want simplicity. The other guys, yes, they're formidable, but we Snowflake have an architectural lead and of course we run in multiple clouds. So it's pretty strong positioning or depositioning, you have to admit. Now I'm not sure I agree with the big query knockoffs completely. I think that's a bit of a stretch, but snowflake, as we see in the ETR survey data is winning. So in thinking about the longer term future, let's talk about what's different with Snowflake, where it's headed and what the opportunities are for the company. Snowflake put itself on the map by focusing on simplifying data analytics. What's interesting about that is the company's founders are as you probably know from Oracle. And rather than focusing on transactional data, which is Oracle's sweet spot, the stuff they worked on when they were at Oracle, the founder said, "We're going to go somewhere else. We're going to attack the data warehousing problem and the data analytics problem." And they completely re-imagined the database and how it could be applied to solve those challenges and reimagine what was possible if you had virtually unlimited compute and storage capacity. And of course Snowflake became famous for separating the compute from storage and being able to completely shut down compute so you didn't have to pay for it when you're not using it. And the ability to have multiple clusters hit the same data without making endless copies and a consumption/cloud pricing model. And then of course everyone on the planet realized, "Wow, that's a pretty good idea." Every venture capitalist in Silicon Valley has been funding companies to copy that move. And that today has pretty much become mainstream in table stakes. But I would argue that Snowflake not only had the lead, but when you look at how others are approaching this problem, it's not necessarily as clean and as elegant. Some of the startups, the early startups I think get it and maybe had an advantage of starting later, which can be a disadvantage too. But AWS is a good example of what I'm saying here. Is its version of separating compute from storage was an afterthought and it's good, it's... Given what they had it was actually quite clever and customers like it, but it's more of a, "Okay, we're going to tier to storage to lower cost, we're going to sort of dial down the compute not completely, we're not going to shut it off, we're going to minimize the compute required." It's really not true as separation is like for instance Snowflake has. But having said that, we're talking about competitors with lots of resources and cohort offerings. And so I don't want to make this necessarily all about the product, but all things being equal architecture matters, okay? So that's the cloud S-curve, the first one we're showing. Snowflake's still on that S-curve, and in and of itself it's got legs, but it's not what's going to power the company to 10 billion. The next S-curve we denote is the multi-cloud in the middle. And now while 80% of Snowflake's revenue is AWS, Microsoft is ramping up and Google, well, we'll see. But the interesting part of that curve is data sharing, and this idea of data clean rooms. I mean it really should be called the data sharing curve, but I have my reasons for calling it multi-cloud. And this is all about network effects and data gravity, and you're seeing this play out today, especially in industries like financial services and healthcare and government that are highly regulated verticals where folks are super paranoid about compliance. There not going to share data if they're going to get sued for it, if they're going to be in the front page of the Wall Street Journal for some kind of privacy breach. And what Snowflake has done is said, "Put all the data in our cloud." Now, of course now that triggers a lot of people because it's a walled garden, okay? It is. That's the trade off. It's not the Wild West, it's not Windows, it's Mac, it's more controlled. But the idea is that as different parts of the organization or even partners begin to share data that they need, it's got to be governed, it's got to be secure, it's got to be compliant, it's got to be trusted. So Snowflake introduced the idea of, they call these things stable edges. I think that's the term that they use. And they track a metric around stable edges. And so a stable edge, or think of it as a persistent edge is an ongoing relationship between two parties that last for some period of time, more than a month. It's not just a one shot deal, one a done type of, "Oh guys shared it for a day, done." It sent you an FTP, it's done. No, it's got to have trajectory over time. Four weeks or six weeks or some period of time that's meaningful. And that metric is growing. Now I think sort of a different metric that they track. I think around 20% of Snowflake customers are actively sharing data today and then they track the number of those edge relationships that exist. So that's something that's unique. Because again, most data sharing is all about making copies of data. That's great for storage companies, it's bad for auditors, and it's bad for compliance officers. And that trend is just starting out, that middle S-curve, it's going to kind of hit the base of that steep part of the S-curve and it's going to have legs through this decade we think. And then finally the third wave that we show here is what we call super cloud. That's why I called it multi-cloud before, so it could invoke super cloud. The idea that you've built a PAS layer that is purpose built for a specific objective, and in this case it's building data apps that are cloud native, shareable and governed. And is a long-term trend that's going to take some time to develop. I mean, application development platforms can take five to 10 years to mature and gain significant adoption, but this one's unique. This is a critical play for Snowflake. If it's going to compete with the big cloud players, it has to have an app development framework like Snowpark. It has to accommodate new data types like transactional data. That's why it announced this thing called UniStore last June, Snowflake a summit. And the pattern that's forming here is Snowflake is building layer upon layer with its architecture at the core. It's not currently anyway, it's not going out and saying, "All right, we're going to buy a company that's got to another billion dollars in revenue and that's how we're going to get to 10 billion." So it's not buying its way into new markets through revenue. It's actually buying smaller companies that can complement Snowflake and that it can turn into revenue for growth that fit in to the data cloud. Now as to the 10 billion by fiscal year 28, is that achievable? That's the question. Yeah, I think so. Would the momentum resources go to market product and management prowess that Snowflake has? Yes, it's definitely achievable. And one could argue to $10 billion is too conservative. Indeed, Snowflake CFO, Mike Scarpelli will fully admit his forecaster built on existing offerings. He's not including revenue as I understand it from all the new stuff that's in the pipeline because he doesn't know what it's going to look like. He doesn't know what the adoption is going to look like. He doesn't have data on that adoption, not just yet anyway. And now of course things can change quite dramatically. It's possible that is forecast for existing businesses don't materialize or competition picks them off or a company like Databricks actually is able in the longer term replicate the functionality of Snowflake with open source technologies, which would be a very competitive source of innovation. But in our view, there's plenty of room for growth, the market is enormous and the real key is, can and will Snowflake deliver on the promises of simplifying data? Of course we've heard this before from data warehouse, the data mars and data legs and master data management and ETLs and data movers and data copiers and Hadoop and a raft of technologies that have not lived up to expectations. And we've also, by the way, seen some tremendous successes in the software business with the likes of ServiceNow and Salesforce. So will Snowflake be the next great software name and hit that 10 billion magic mark? I think so. Let's reconnect in 2028 and see. Okay, we'll leave it there today. I want to thank Chip Simonton for his input to today's episode. Thanks to Alex Myerson who's on production and manages the podcast. Ken Schiffman as well. Kristin Martin and Cheryl Knight help get the word out on social media and in our newsletters. And Rob Hove is our Editor in Chief over at Silicon Angle. He does some great editing for us. Check it out for all the news. Remember all these episodes are available as podcasts. Wherever you listen, just search Breaking Analysis podcast. I publish each week on wikibon.com and siliconangle.com. Or you can email me to get in touch David.vallante@siliconangle.com. DM me @dvellante or comment on our LinkedIn post. And please do check out etr.ai, they've got the best survey data in the enterprise tech business. This is Dave Vellante for the CUBE Insights, powered by ETR. Thanks for watching, thanks for listening and we'll see you next time on breaking analysis. (upbeat music)

(upbeat music) >> Welcome back to Boston, everybody. This is the birthplace of theCUBE. In 2010, May of 2010 at EMC World, right in this very venue, John Furrier called it the chowder and lobster post. I'm Dave Vellante. We're here at RE:INFORCE 2022, Ed Walsh, CEO of ChaosSearch. Doing a drive by Ed. Thanks so much for stopping in. You're going to help me wrap up in our final editorial segment. >> Looking forward to it. >> I really appreciate it. >> Thank you for including me. >> How about that? 2010. >> That's amazing. It was really in this-- >> Really in this building. Yeah, we had to sort of bury our way in, tunnel our way into the Blogger Lounge. We did four days. >> Weekends, yeah. >> It was epic. It was really epic. But I'm glad they're back in Boston. AWS was going to do June in Houston. >> Okay. >> Which would've been awful. >> Yeah, yeah. No, this is perfect. >> Yeah. Thank God they came back. You saw Boston in summer is great. I know it's been hot, And of course you and I are from this area. >> Yeah. >> So how you been? What's going on? I mean, it's a little crazy out there. The stock market's going crazy. >> Sure. >> Having the tech lash, what are you seeing? >> So it's an interesting time. So I ran a company in 2008. So we've been through this before. By the way, the world's not ending, we'll get through this. But it is an interesting conversation as an investor, but also even the customers. There's some hesitation but you have to basically have the right value prop, otherwise things are going to get sold. So we are seeing longer sales cycles. But it's nothing that you can't overcome. But it has to be something not nice to have, has to be a need to have. But I think we all get through it. And then there is some, on the VC side, it's now buckle down, let's figure out what to do which is always a challenge for startup plans. >> In pre 2000 you, maybe you weren't a CEO but you were definitely an executive. And so now it's different and a lot of younger people haven't seen this. You've got interest rates now rising. Okay, we've seen that before but it looks like you've got inflation, you got interest rates rising. >> Yep. >> The consumer spending patterns are changing. You had 6$, $7 gas at one point. So you have these weird crosscurrents, >> Yup. >> And people are thinking, "Okay post-September now, maybe because of the recession, the Fed won't have to keep raising interest rates and tightening. But I don't know what to root for. It's like half full, half empty. (Ed laughing) >> But we haven't been in an environment with high inflation. At least not in my career. >> Right. Right. >> I mean, I got into 92, like that was long gone, right?. >> Yeah. >> So it is a interesting regime change that we're going to have to deal with, but there's a lot of analogies between 2008 and now that you still have to work through too, right?. So, anyway, I don't think the world's ending. I do think you have to run a tight shop. So I think the grow all costs is gone. I do think discipline's back in which, for most of us, discipline never left, right?. So, to me that's the name of the game. >> What do you tell just generally, I mean you've been the CEO of a lot of private companies. And of course one of the things that you do to retain people and attract people is you give 'em stock and it's great and everybody's excited. >> Yeah. >> I'm sure they're excited cause you guys are a rocket ship. But so what's the message now that, Okay the market's down, valuations are down, the trees don't grow to the moon, we all know that. But what are you telling your people? What's their reaction? How do you keep 'em motivated? >> So like anything, you want over communicate during these times. So I actually over communicate, you get all these you know, the Sequoia decks, 2008 and the recent... >> (chuckles) Rest in peace good times, that one right? >> I literally share it. Why? It's like, Hey, this is what's going on in the real world. It's going to affect us. It has almost nothing to do with us specifically, but it will affect us. Now we can't not pay attention to it. It does change how you're going to raise money, so you got to make sure you have the right runway to be there. So it does change what you do, but I think you over communicate. So that's what I've been doing and I think it's more like a student of the game, so I try to share it, and I say some appreciate it others, I'm just saying, this is normal, we'll get through this and this is what happened in 2008 and trust me, once the market hits bottom, give it another month afterwards. Then everyone says, oh, the bottom's in and we're back to business. Valuations don't go immediately back up, but right now, no one knows where the bottom is and that's where kind of the world's ending type of things. >> Well, it's interesting because you talked about, I said rest in peace good times >> Yeah >> that was the Sequoia deck, and the message was tighten up. Okay, and I'm not saying you shouldn't tighten up now, but the difference is, there was this period of two years of easy money and even before that, it was pretty easy money. >> Yeah. >> And so companies are well capitalized, they have runway so it's like, okay, I was talking to Frank Slootman about this now of course there are public companies, like we're not taking the foot off the gas. We're inherently profitable, >> Yeah. >> we're growing like crazy, we're going for it. You know? So that's a little bit of a different dynamic. There's a lot of good runway out there, isn't there? >> But also you look at the different companies that were either born or were able to power through those environments are actually better off. You come out stronger in a more dominant position. So Frank, listen, if you see what Frank's done, it's been unbelievable to watch his career, right?. In fact, he was at Data Domain, I was Avamar so, but look at what he's done since, he's crushed it. Right? >> Yeah. >> So for him to say, Hey, I'm going to literally hit the gas and keep going. I think that's the right thing for Snowflake and a right thing for a lot of people. But for people in different roles, I literally say that you have to take it seriously. What you can't be is, well, Frank's in a different situation. What is it...? How many billion does he have in the bank? So it's... >> He's over a billion, you know, over a billion. Well, you're on your way Ed. >> No, no, no, it's good. (Dave chuckles) Okay, I want to ask you about this concept that we've sort of we coined this term called Supercloud. >> Sure. >> You could think of it as the next generation of multi-cloud. The basic premises that multi-cloud was largely a symptom of multi-vendor. Okay. I've done some M&A, I've got some Shadow IT, spinning up, you know, Shadow clouds, projects. But it really wasn't a strategy to have a continuum across clouds. And now we're starting to see ecosystems really build, you know, you've used the term before, standing on the shoulders of giants, you've used that a lot. >> Yep. >> And so we're seeing that. Jerry Chen wrote a seminal piece on Castles in The Cloud, so we coined this term SuperCloud to connote this abstraction layer that hides the underlying complexities and primitives of the individual clouds and then adds value on top of it and can adjudicate and manage, irrespective of physical location, Supercloud. >> Yeah. >> Okay. What do you think about that concept?. How does it maybe relate to some of the things that you're seeing in the industry? >> So, standing on shoulders of giants, right? So I always like to do hard tech either at big company, small companies. So we're probably your definition of a Supercloud. We had a big vision, how to literally solve the core challenge of analytics at scale. How are you going to do that? You're not going to build on your own. So literally we're leveraging the primitives, everything you can get out of the Amazon cloud, everything get out of Google cloud. In fact, we're even looking at what it can get out of this Snowflake cloud, and how do we abstract that out, add value to it? That's where all our patents are. But it becomes a simplified approach. The customers don't care. Well, they care where their data is. But they don't care how you got there, they just want to know the end result. So you simplify, but you gain the advantages. One thing's interesting is, in this particular company, ChaosSearch, people try to always say, at some point the sales cycle they say, no way, hold on, no way that can be fast no way, or whatever the different issue. And initially we used to try to explain our technology, and I would say 60% was explaining the public, cloud capabilities and then how we, harvest those I guess, make them better add value on top and what you're able to get is something you couldn't get from the public clouds themselves and then how we did that across public clouds and then extracted it. So if you think about that like, it's the Shoulders of giants. But what we now do, literally to avoid that conversation because it became a lengthy conversation. So, how do you have a platform for analytics that you can't possibly overwhelm for ingest. All your messy data, no pipelines. Well, you leverage things like S3 and EC2, and you do the different security things. You can go to environments say, you can't possibly overrun me, I could not say that. If I didn't literally build on the shoulders giants of all these public clouds. But the value. So if you're going to do hard tech as a startup, you're going to build, you're going to be the principles of Supercloud. Maybe they're not the same size of Supercloud just looking at Snowflake, but basically, you're going to leverage all that, you abstract it out and that's where you're able to have a lot of values at that. >> So let me ask you, so I don't know if there's a strict definition of Supercloud, We sort of put it out to the community and said, help us define it. So you got to span multiple clouds. It's not just running in each cloud. There's a metadata layer that kind of understands where you're pulling data from. Like you said you can pull data from Snowflake, it sounds like we're not running on Snowflake, correct? >> No, complimentary to them in their different customers. >> Yeah. Okay. >> They want to build on top of a data platform, data apps. >> Right. And of course they're going cross cloud. >> Right. >> Is there a PaaS layer in there? We've said there's probably a Super PaaS layer. You're probably not doing that, but you're allowing people to bring their own, bring your own PaaS sort of thing maybe. >> So we're a little bit different but basically we publish open APIs. We don't have a user interface. We say, keep the user interface. Again, we're solving the challenge of analytics at scale, we're not trying to retrain your analytics, either analysts or your DevOps or your SOV or your Secop team. They use the tools they already use. Elastic search APIs, SQL APIs. So really they program, they build applications on top of us, Equifax is a good example. Case said it coming out later on this week, after 18 months in production but, basically they're building, we provide the abstraction layer, the quote, I'm going to kill it, Jeff Tincher, who owns all of SREs worldwide, said to the effect of, Hey I'm able to rethink what I do for my data pipelines. But then he also talked about how, that he really doesn't have to worry about the data he puts in it. We deal with that. And he just has to, just query on the other side. That simplicity. We couldn't have done that without that. So anyway, what I like about the definition is, if you were going to do something harder in the world, why would you try to rebuild what Amazon, Google and Azure or Snowflake did? You're going to add things on top. We can still do intellectual property. We're still doing patents. So five grand patents all in this. But literally the abstraction layer is the simplification. The end users do not want to know that complexity, even though they ask the questions. >> And I think too, the other attribute is it's ecosystem enablement. Whereas I think, >> Absolutely >> in general, in the Multicloud 1.0 era, the ecosystem wasn't thinking about, okay, how do I build on top and abstract that. So maybe it is Multicloud 2.0, We chose to use Supercloud. So I'm wondering, we're at the security conference, >> RE: INFORCE is there a security Supercloud? Maybe Snyk has the developer Supercloud or maybe Okta has the identity Supercloud. I think CrowdStrike maybe not. Cause CrowdStrike competes with Microsoft. So maybe, because Microsoft, what's interesting, Merritt Bear was just saying, look, we don't show up in the spending data for security because we're not charging for most of our security. We're not trying to make a big business. So that's kind of interesting, but is there a potential for the security Supercloud? >> So, I think so. But also, I'll give you one thing I talked to, just today, at least three different conversations where everyone wants to log data. It's a little bit specific to us, but basically they want to do the security data lake. The idea of, and Snowflake talks about this too. But the idea of putting all the data in one repository and then how do you abstract out and get value from it? Maybe not the perfect, but it becomes simple to do but hard to get value out. So the different players are going to do that. That's what we do. We're able to, once you land it in your S3 or it doesn't matter, cloud of choice, simple storage, we allow you to get after that data, but we take the primitives and hide them from you. And all you do is query the data and we're spinning up stateless computer to go after it. So then if I look around the floor. There's going to be a bunch of these players. I don't think, why would someone in this floor try to recreate what Amazon or Google or Azure had. They're going to build on top of it. And now the key thing is, do you leave it in standard? And now we're open APIs. People are building on top of my open APIs or do you try to put 'em in a walled garden? And they're in, now your Supercloud. Our belief is, part of it is, it needs to be open access and let you go after it. >> Well. And build your applications on top of it openly. >> They come back to snowflake. That's what Snowflake's doing. And they're basically saying, Hey come into our proprietary environment. And the benefit is, and I think both can win. There's a big market. >> I agree. But I think the benefit of Snowflake's is, okay, we're going to have federated governance, we're going to have data sharing, you're going to have access to all the ecosystem players. >> Yep. >> And as everything's going to be controlled and you know what you're getting. The flip side of that is, Databricks is the other end >> Yeah. >> of that spectrum, which is no, no, you got to be open. >> Yeah. >> So what's going to happen, well what's happening clearly, is Snowflake's saying, okay we've got Snowpark. we're going to allow Python, we're going to have an Apache Iceberg. We're going to have open source tooling that you can access. By the way, it's not going to be as good as our waled garden where the flip side of that is you get Databricks coming at it from a data science and data engineering perspective. And there's a lot of gaps in between, aren't there? >> And I think they both win. Like for instance, so we didn't do Snowpark integration. But we work with people building data apps on top of Snowflake or data bricks. And what we do is, we can add value to that, or what we've done, again, using all the Supercloud stuff we're done. But we deal with the unstructured data, the four V's coming at you. You can't pipeline that to save. So we actually could be additive. As they're trying to do like a security data cloud inside of Snowflake or do the same thing in Databricks. That's where we can play. Now, we play with them at the application level that they get some data from them and some data for us. But I believe there's a partnership there that will do it inside their environment. To us they're just another large scaler environment that my customers want to get after data. And they want me to abstract it out and give value. >> So it's another repository to you. >> Yeah. >> Okay. So I think Snowflake recently added support for unstructured data. You chose not to do Snowpark because why? >> Well, so the way they're doing the unstructured data is not bad. It's JSON data. Basically, This is the dilemma. Everyone wants their application developers to be flexible, move fast, securely but just productivity. So you get, give 'em flexibility. The problem with that is analytics on the end want to be structured to be performant. And this is where Snowflake, they have to somehow get that raw data. And it's changing every day because you just let the developers do what they want now, in some structured base, but do what you need to do your business fast and securely. So it completely destroys. So they have large customers trying to do big integrations for this messy data. And it doesn't quite work, cause you literally just can't make the pipelines work. So that's where we're complimentary do it. So now, the particular integration wasn't, we need a little bit deeper integration to do that. So we're integrating, actually, at the data app layer. But we could, see us and I don't, listen. I think Snowflake's a good actor. They're trying to figure out what's best for the customers. And I think we just participate in that. >> Yeah. And I think they're trying to figure out >> Yeah. >> how to grow their ecosystem. Because they know they can't do it all, in fact, >> And we solve the key thing, they just can't do certain things. And we do that well. Yeah, I have SQL but that's where it ends. >> Yeah. >> I do the messy data and how to play with them. >> And when you talk to one of their founders, anyway, Benoit, he comes on the cube and he's like, we start with simple. >> Yeah. >> It reminds me of the guy's some Pure Storage, that guy Coz, he's always like, no, if it starts to get too complicated. So that's why they said all right, we're not going to start out trying to figure out how to do complex joins and workload management. And they turn that into a feature. So like you say, I think both can win. It's a big market. >> I think it's a good model. And I love to see Frank, you know, move. >> Yeah. I forgot So you AVMAR... >> In the day. >> You guys used to hate each other, right? >> No, no, no >> No. I mean, it's all good. >> But the thing is, look what he's done. Like I wouldn't bet against Frank. I think it's a good message. You can see clients trying to do it. Same thing with Databricks, same thing with BigQuery. We get a lot of same dynamic in BigQuery. It's good for a lot of things, but it's not everything you need to do. And there's ways for the ecosystem to play together. >> Well, what's interesting about BigQuery is, it is truly cloud native, as is Snowflake. You know, whereas Amazon Redshift was sort of Parexel, it's cobbled together now. It's great engineering, but BigQuery gets a lot of high marks. But again, there's limitations to everything. That's why companies like yours can exist. >> And that's why.. so back to the Supercloud. It allows me as a company to participate in that because I'm leveraging all the underlying pieces. Which we couldn't be doing what we're doing now, without leveraging the Supercloud concepts right, so... >> Ed, I really appreciate you coming by, help me wrap up today in RE:INFORCE. Always a pleasure seeing you, my friend. >> Thank you. >> All right. Okay, this is a wrap on day one. We'll be back tomorrow. I'll be solo. John Furrier had to fly out but we'll be following what he's doing. This is RE:INFORCE 2022. You're watching theCUBE. I'll see you tomorrow.

>> From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from the cube and ETR, this is Breaking Analysis with Dave Vellante. >> Organizations have considerable room to improve their performance without making expensive changes to their talent, their structure, or their fundamental business model. You don't need a slew of consultants to tell you what to do. You already know. What you need is to immediately ratchet up expectations, energy, urgency, and intensity. You have to fight mediocrity every step of the way. Amp it up and the results will follow. This is the fundamental premise of a hard-hitting new book written by Frank Slootman, CEO of Snowflake, and published earlier this year. It's called "Amp It Up, Leading for Hypergrowth "by Raising Expectations, Increasing Urgency, "and Elevating Intensity." Hello and welcome to this week's Wikibon CUBE Insights, powered by ETR. At Snowflake Summit last month, I was asked to interview Frank on stage about his new book. I've read it several times. And if you haven't read it, you should. Even if you have read it, in this Breaking Analysis, we'll dig deeper into the book and share some clarifying insights and nuances directly from Slootman himself from my one-on-one conversation with him. My first question to Slootman was why do you write this book? Okay, it's kind of a common throwaway question. And how the heck did you find time to do it? It's fairly well-known that a few years ago, Slootman put up a post on LinkedIn with the title Amp It Up. It generated so much buzz and so many requests for Frank's time that he decided that the best way to efficiently scale and share his thoughts on how to create high-performing companies and organizations was to publish a book. Now, he wrote the book during the pandemic. And I joked that they must not have Netflix in Montana where he resides. In a pretty funny moment, he said that writing the book was easier than promoting it. Take a listen. >> Denise, our CMO, you know, she just made sure that this process wasn't going to. It was more work for me to promote this book with all these damn podcasts and other crap, than actually writing the book, you know. And after a while, I was like I'm not doing another podcast. >> Now, the book gives a lot of interesting background information on Slootman's career and what he learned at various companies that he led and participated in. Now, I'm not going to go into most of that today, which is why you should read the book yourself. But Slootman, he's become somewhat of a business hero to many people, myself included. Leaders like Frank, Scott McNealy, Jayshree Ullal, and my old boss, Pat McGovern at IDG, have inspired me over the years. And each has applied his or her own approach to building cultures and companies. Now, when Slootman first took over the reins at Snowflake, I published a Breaking Analysis talking about Snowflake and what we could expect from the company now that Slootman and CFO Mike Scarpelli were back together. In that post, buried toward the end, I referenced the playbook that Frank used at Data Domain and ServiceNow, two companies that I followed quite closely as an analyst, and how it would be applied at Snowflake, that playbook if you will. Frank reached out to me afterwards and said something to the effect of, "I don't use playbooks. "I am a situational leader. "Playbooks, you know, they work in football games. "But in the military, they teach you "situational leadership." Pretty interesting learning moment for me. So I asked Frank on the stage about this. Here's what he said. >> The older you get, the more experience that you have, the more you become a prisoner of your own background because you sort of think in terms of what you know as opposed to, you know, getting outside of what you know and trying to sort of look at things like a five-year-old that has never seen this before. And then how would you, you know, deal with it? And I really try to force myself into I've never seen this before and how do I think about it? Because at least they're very different, you know, interpretations. And be open-minded, just really avoid that rinse and repeat mentality. And you know, I've brought people in from who have worked with me before. Some of them come with me from company to company. And they were falling prey to, you know, rinse and repeat. I would just literally go like that's not what we want. >> So think about that for a moment. I mean, imagine coming in to lead a new company and forcing yourself and your people to forget what they know that works and has worked in the past, put that aside and assess the current situation with an open mind, essentially start over. Now, that doesn't mean you don't apply what has worked in the past. Slootman talked to me about bringing back Scarpelli and the synergistic relationship that they have and how they build cultures and the no BS and hard truth mentality they bring to companies. But he bristles when people ask him, "What type of CEO are you?" He says, "Do we have to put a label on it? "It really depends on the situation." Now, one of the other really hard-hitting parts of the book was the way Frank deals with who to keep and who to let go. He uses the Volkswagen tagline of drivers wanted. He says in his book, in companies there are passengers and there are drivers, and we want drivers. He said, "You have to figure out really quickly "who the drivers are and basically throw the wrong people "off the bus, keep the right people, bring in new people "that fit the culture and put them "in the right seats on the bus." Now, these are not easy decisions to make. But as it pertains to getting rid of people, I'm reminded of the movie "Moneyball." Art Howe, the manager of the Oakland As, he refused to play Scott Hatteberg at first base. So the GM, Billy Bean played by Brad Pitt says to Peter Brand who was played by Jonah Hill, "You have to fire Carlos Pena." Don't learn how to fire people. Billy Bean says, "Just keep it quick. "Tell him he's been traded and that's it." So I asked Frank, "Okay, I get it. "Like the movie, when you have the wrong person "on the bus, you just have to make the decision, "be straightforward, and do it." But I asked him, "What if you're on the fence? "What if you're not completely sure if this person "is a driver or a passenger, if he or she "should be on the bus or not on the bus? "How do you handle that?" Listen to what he said. >> I have a very simple way to break ties. And when there's doubt, there's no doubt, okay? >> When there's doubt, there's no doubt. Slootman's philosophy is you have to be emphatic and have high conviction. You know, back to the baseball analogy, if you're thinking about taking the pitcher out of the game, take 'em out. Confrontation is the single hardest thing in business according to Slootman but you have to be intellectually honest and do what's best for the organization, period. Okay, so wow, that may sound harsh but that's how Slootman approaches it, very Belichickian if you will. But how can you amp it up on a daily basis? What's the approach that Slootman takes? We got into this conversation with a discussion about MBOs, management by objective. Slootman in his book says he's killed MBOs at every company he's led. And I asked him to explain why. His rationale was that individual MBOs invariably end up in a discussion about relief of the MBO if the person is not hitting his or her targets. And that detracts from the organizational alignment. He said at Snowflake everyone gets paid the same way, from the execs on down. It's a key way he creates focus and energy in an organization, by creating alignment, urgency, and putting more resources into the most important things. This is especially hard, Slootman says, as the organization gets bigger. But if you do approach it this way, everything gets easier. The cadence changes, the tempo accelerates, and it works. Now, and to emphasize that point, he said the following. Play the clip. >> Every meeting that you have, every email, every encounter in the hallway, whatever it is, is an opportunity to amp things up. That's why I use that title. But do you take that opportunity? >> And according to Slootman, if you don't take that opportunity, if you're not in the moment, amping it up, then you're thinking about your golf game or the tennis match that's going on this weekend or being out on your boat. And to the point, this approach is not for everyone. You're either built for it or you're not. But if you can bring people into the organization that can handle this type of dynamic, it creates energy. It becomes fun. Everything moves faster. The conversations are exciting. They're inspiring. And it becomes addictive. Now let's talk about priorities. I said to Frank that for me anyway, his book was an uncomfortable read. And he was somewhat surprised by that. "Really," he said. I said, "Yeah. "I mean, it was an easy read but uncomfortable "because over my career, I've managed thousands of people, "not tens of thousands but thousands, "enough to have to take this stuff very seriously." And I found myself throughout the book, oh, you know, on the one hand saying to myself, "Oh, I got that right, good job, Dave." And then other times, I was thinking to myself, "Oh wow, I probably need to rethink that. "I need to amp it up on that front." And the point is to Frank's leadership philosophy, there's no one correct way to approach all situations. You have to figure it out for yourself. But the one thing in the book that I found the hardest was Slootman challenged the reader. If you had to drop everything and focus on one thing, just one thing, for the rest of the year, what would that one thing be? Think about that for a moment. Were you able to come up with that one thing? What would happen to all the other things on your priority list? Are they all necessary? If so, how would you delegate those? Do you have someone in your organization who can take those off your plate? What would happen if you only focused on that one thing? These are hard questions. But Slootman really forces you to think about them and do that mental exercise. Look at Frank's body language in this screenshot. Imagine going into a management meeting with Frank and being prepared to share all the things you're working on that you're so proud of and all the priorities you have for the coming year. Listen to Frank in this clip and tell me it doesn't really make you think. >> I've been in, you know, on other boards and stuff. And I got a PowerPoint back from the CEO and there's like 15 things. They're our priorities for the year. I'm like you got 15, you got none, right? It's like you just can't decide, you know, what's important. So I'll tell you everything because I just can't figure out. And the thing is it's very hard to just say one thing. But it's really the mental exercise that matters. >> Going through that mental exercise is really important according to Slootman. Let's have a conversation about what really matters at this point in time. Why does it need to happen? And does it take priority over other things? Slootman says you have to pull apart the hairball and drive extraordinary clarity. You could be wrong, he says. And he admits he's been wrong on many things before. He, like everyone, is fearful of being wrong. But if you don't have the conversation according to Slootman, you're already defeated. And one of the most important things Slootman emphasizes in the book is execution. He said that's one of the reasons he wrote "Amp It Up." In our discussion, he referenced Pat Gelsinger, his former boss, who bought Data Domain when he was working for Joe Tucci at EMC. Listen to Frank describe the interaction with Gelsinger. >> Well, one of my prior bosses, you know, Pat Gelsinger, when they acquired Data Domain through EMC, Pat was CEO of Intel. And he quoted Andy Grove as saying, 'cause he was Intel for a long time when he was younger man. And he said no strategy is better than its execution, which if I find one of the most brilliant things. >> Now, before you go changing your strategy, says Slootman, you have to eliminate execution as a potential point of failure. All too often, he says, Silicon Valley wants to change strategy without really understanding whether the execution is right. All too often companies don't consider that maybe the product isn't that great. They will frequently, for example, make a change to sales leadership without questioning whether or not there's a product fit. According to Slootman, you have to drive hardcore intellectual honesty. And as uncomfortable as that may be, it's incredibly important and powerful. Okay, one of the other contrarian points in the book was whether or not to have a customer success department. Slootman says this became really fashionable in Silicon Valley with the SaaS craze. Everyone was following and pattern matching the lead of salesforce.com. He says he's eliminated the customer service department at every company he's led which had a customer success department. Listen to Frank Slootman in his own words talk about the customer success department. >> I view the whole company as a customer success function. Okay, I'm customer success, you know. I said it in my presentation yesterday. We're a customer-first organization. I don't need a department. >> Now, he went on to say that sales owns the commercial relationship with the customer. Engineering owns the technical relationship. And oh, by the way, he always puts support inside of the engineering department because engineering has to back up support. And rather than having a separate department for customer success, he focuses on making sure that the existing departments are functioning properly. Slootman also has always been big on net promoter score, NPS. And Snowflake's is very high at 72. And according to Slootman, it's not just the product. It's the people that drive that type of loyalty. Now, Slootman stresses amping up the big things and even the little things too. He told a story about someone who came into his office to ask his opinion about a tee shirt. And he turned it around on her and said, "Well, what do you think?" And she said, "Well, it's okay." So Frank made the point by flipping the situation. Why are you coming to me with something that's just okay? If we're going to do something, let's do it. Let's do it all out. Let's do it right and get excited about it, not just check the box and get something off your desk. Amp it up, all aspects of our business. Listen to Slootman talk about Steve Jobs and the relevance of demanding excellence and shunning mediocrity. >> He was incredibly intolerant of anything that he didn't think of as great. You know, he was immediately done with it and with the person. You know, I'm not that aggressive, you know, in that way. I'm a little bit nicer, you know, about it. But I still, you know, I don't want to give into expediency and mediocrity. I just don't, I'm just going to fight it, you know, every step of the way. >> Now, that story was about a little thing like some swag. But Slootman talked about some big things too. And one of the major ways Snowflake was making big, sweeping changes to amp up its business was reorganizing its go-to-market around industries like financial services, media, and healthcare. Here's some ETR data that shows Snowflake's net score or spending momentum for key industry segments over time. The red dotted line at 40% is an indicator of highly elevated spending momentum. And you can see for the key areas shown, Snowflake is well above that level. And we cut this data where responses were greater, the response numbers were greater than 15. So not huge ends but large enough to have meaning. Most were in the 20s. Now, it's relatively uncommon to see a company that's having the success of Snowflake make this kind of non-trivial change in the middle of steep S-curve growth. Why did they make this move? Well, I think it's because Snowflake realizes that its data cloud is going to increasingly have industry diversity and unique value by industry, that ecosystems and data marketplaces are forming around industries. So the more industry affinity Snowflake can create, the stronger its moat will be. It also aligns with how the largest and most prominent global system integrators, global SIs, go to market. This is important because as companies are transforming, they are radically changing their data architecture, how they think about data, how they approach data as a competitive advantage, and they're looking at data as specifically a monetization opportunity. So having industry expertise and knowledge and aligning with those customer objectives is going to serve Snowflake and its ecosystems well in my view. Slootman even said he joined the board of Instacart not because he needed another board seat but because he wanted to get out of his comfort zone and expose himself to other industries as a way to learn. So look, we're just barely scratching the surface of Slootman's book and I've pulled some highlights from our conversation. There's so much more that I can share just even from our conversation. And I will as the opportunity arises. But for now, I'll just give you the kind of bumper sticker of "Amp It Up." Raise your standards by taking every opportunity, every interaction, to increase your intensity. Get your people aligned and moving in the same direction. If it's the wrong direction, figure it out and course correct quickly. Prioritize and sharpen your focus on things that will really make a difference. If you do these things and increase the urgency in your organization, you'll naturally pick up the pace and accelerate your company. Do these things and you'll be able to transform, better identify adjacent opportunities and go attack them, and create a lasting and meaningful experience for your employees, customers, and partners. Okay, that's it for today. Thanks for watching. And thank you to Alex Myerson who's on production and he manages the podcast for Breaking Analysis. Kristin Martin and Cheryl Knight help get the word out on social and in our newsletters. And Rob Hove is our EIC over at Silicon Angle who does some wonderful and tremendous editing. Thank you all. Remember, all these episodes are available as podcasts. Wherever you listen, just search Breaking Analysis podcast. I publish each week on wikibon.com and siliconangle.com. And you can email me at david.vellante@siliconangle.com or DM me @dvellante or comment on my LinkedIn posts. And please do check out etr.ai for the best survey data in enterprise tech. This is Dave Vellante for theCUBE Insights, powered by ETR. Thanks for watching. Be well. And we'll see you next time on Breaking Analysis. (upbeat music)

(upbeat music) >> Narrator: From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is theCUBE Coversation. >> All right everybody, this is Dave Vellante and welcome to this special CUBE Conversation. I first met Frank Slootman in 2007 when he was the CEO of Data Domain. Back then he was the CEO of a disruptive company and still is. Data Domain, believe or not back then, was actually replacing tape drives as the primary mechanism for backup. Yes, believe it or not, it used to be tape. Fast forward several years later, I met Frank again at VMworld when he had become the CEO of ServiceNow. At the time ServiceNow was a small company, about 100 plus million dollars. Frank and his team took that company to 1.2 billion. And Gartner, at the time of IPO said "you know, this doesn't make sense. "It's a small market, it's a very narrow help desk market, "it's maybe a couple billion dollars." The vision of Slootman and his team was to really expand the total available market and execute like a laser. Which they did and today, ServiceNow a very, very successful company. Snowflake first came into my line of sight in 2015 when SiliconANGLE wrote an article, "Why Snowflake is Better "Than Amazon Redshift, Re-imagining Data". Well last year Frank Slootman joined Snowflake, another disruptive company. And he's here today to talk about how Snowflake is really participating in this COVID-19 crisis. And I really want to share some of Frank's insights and leadership principles, Frank great to see you, thanks for coming on. >> Yeah, thanks for having us Dave. >> So when I first reported earlier this year on Snowflake and shared some data with the community, you reached back out to me and said "Dave, I want to just share with you. "I am not a playbook CEO, I am a situational CEO. "This is what I learned in the military." So Frank, this COVID-19 situation was thrown at you, it's a black swan, what was your first move as a leader? >> Well, my first move is let's not overreact. Take a deep breath. Let's really examine what we know. Let's not jump to conclusions, let's not try to project things that we're not capable of projecting. That's hard because we tend to have sort of levels of certainty about what's going to happen in the week, in the next month and so on and all of a sudden that's out of the window. It creates enormous anxiety with people. So in other words you got to sort of reset to okay, what do we know, what can we do, what do we control? And not let our minds sort of go out of control. So I talk to our people all the time about maintain a sense of normalcy, focus on the work, stay in the moment and by the way, turn the newsfeed off, right, because the hysteria you get fed through the media is really not helpful, right? So just cool down and focus on what we still can do. And then I think then everybody takes a deep breath and we just go back to work. I mean, we're in this mode now for three weeks and I can tell you, I'm on teleconferencing calls, whatever, eight, nine hours a day. Prospects, customers, all over the world. Pretty much what I was doing before except I'm not traveling right now. So it's not, >> Yeah, so it sounds clear-- >> Not that different than what it was before. (laughs) >> It sounds very Bill Belichickian, you know? >> Yeah. >> Focus on those things of which you can control. When you were running ServiceNow I really learned it from you and of course Mike Scarpelli, your then and current CFO about the importance of transparency. And I'm interested in how you're communicating, it sounds like you're doing some very similar things but have you changed the way in which you've communicated to your team, your internal employees at all? >> We're communicating much more. Because we can no longer rely on sort of running into people here, there and everywhere. So we have to be much more purposeful about communications. For example, I mean I send an email out to the entire company on Monday morning. And it's kind of a bunch of anecdotes. Just to bring the connection back, the normalcy. It just helps people get connected back to the mothership and like well, things are still going on. We're still talking in the way we always used to be. And that really helps and I also, I check in with people a lot more, I ask all of our leadership to constantly check in with people because you can't assume that everybody is okay, you can't be out of sight, out of mind. So we need to be more purposeful in reaching out and communicating with people than we were previously. >> And a lot of people obviously concerned about their jobs. Have you sort of communicated, what have you communicated to employees about layoffs? I mean, you guys just did a large raise just before all this, your timing was kind of impeccable. But what have you communicated in that regard? >> I've said, there's no layoffs on our radar, number one. Number two, we are hiring. And number three is we have a higher level of scrutiny on the hires that we're making. And I am very transparent. In other words I tell people look, I prioritize the roles that are closest to the direct train of the business. Right, it's kind of common sense. But I wanted to make sure that this is how we're thinking about it. There are some roles that are more postponable than others. I'm hiring in engineering without any reservation because that is the long term strategic interest of the company. One the sales side, I want to know that sales leaders know how to convert to yields, that we're not just sort of bringing capacity online. And the leadership is not convinced or confident that they can convert to yield. So there's a little bit finer level of scrutiny on the hiring. But by and large, it's not that different. There's this saying out there that we should suspend all non-essential spending and hiring, I'm like you should always do that. Right? I mean what's different today? (both laugh) If it's non-essential, why do it, right? So all of this comes back to this is probably how we should operate anyways, yep. >> I want to talk a little bit about the tech behind Snowflake. I'm very sensitive when CEOs come on my program to make sure that we're not, I'm not trying to bait CEOs into ambulance chasing, that's not what it's about. But I do want to share with our community kind of what's new, what's changed and how companies like Snowflake are participating in this crisis. And in particular, we've been reporting for awhile, if you guys bring up that first slide. That the innovation in the industry is really no longer about Moore's Law. It's really shifted. There's a new, what we call an innovation cocktail in the business and we've collected all this data over the last 10 years. With Hadoop and other distributed data and now we have Edge Data, et cetera, there's this huge trove of data. And now AI is becoming real, it's becoming much more economical. So applying machine intelligence to this data and then the Cloud allows us to do this at scale. It allows us to bring in more data sources. It brings an agility in. So I wonder if you could talk about sort of this premise and how you guys fit. >> Yeah, I would start off by reordering the sequence and saying Cloud's number one. That is foundational. That helps us bring scale to data that we never had to number two, it helps us bring computational power to data at levels we've never had before. And that just means that queries and workloads can complete orders of magnitude faster than they ever could before. And that introduces concepts like the time value of data, right? The faster you get it, the more impactful and powerful it is. I do agree, I view AI as sort of the next generation of analytics. Instead of using data to inform people, we're using data to drive processes and businesses directly, right? So I'm agreeing obviously with these strengths because we're the principal beneficiaries and drivers of these platforms. >> Well when we talked about earlier this year about Snowflake, we really brought up the notion that you guys were one of the first if not the first. And guys, bring back Frank, I got to see him. (Frank chuckles) One of the first to really sort of separate the notion of being able to scale, compute independent of storage. And that brought not only economics but it brought flexibility. So you've got this Cloud-native database. Again, what caught my attention in that Redshift article we wrote is essentially for our audience, Redshift was based on ParAccel. Amazon did a great job of really sort of making that a Cloud database but it really wasn't born in the Cloud and that's sort of the advantage of Snowflake. So that architectural approach is starting to really take hold. So I want to give an example. Guys if you bring up the next chart. This is an example of a system that I've been using since early January when I saw this COVID come out. Somebody texted me this. And it's the Johns Hopkins dataset, it's awesome. It shows you, go around the map, you can follow it, it's pretty close to real time. And it's quite good. But the problem is, all right thank you guys. The problem is that when I started to look at, I wanted to get into sort of a more granular view of the counties. And I couldn't do that. So guys bring up the next slide if you would. So what I did was I searched around and I found a New York Times GitHub data instance. And you can see it in the top left here. And basically it was a CSV. And notice what it says, it says we can't make this file beautiful and searchable because it's essentially too big. And then I ran into what you guys are doing with Star Schema, Star Schema's a data company. And essentially you guys made the notion that look, the Johns Hopkins dataset as great as it is it's not sort of ready for analytics, it's got to be cleaned, et cetera. And so I want you to talk about that a little bit. Guys, if you could bring Frank back. And share with us what you guys have done with Star Schema and how that's helping understand COVID-19 and its progression. >> Yeah, one of the really cool concepts I've felt about Snowflake is what we call the data sharing architecture. And what that really means is that if you and I both have Snowflake accounts, even though we work for different institutions, we can share data optics, tables, schema, whatever they are with each other. And you can process against that in place if they are residing in a local, to your own platform. We have taken that concept from private also to public. So that data providers like Star Schema can list their datasets, because they're a data company, so obviously it's in their business interest to allow this data to be profiled and to be accessible by the Snowflake community. And this data is what we call analytics ready. It is instantly accessible. It is also continually updated, you have to do nothing. It's augmented with incremental data and then our Snowflake users can just combine this data with supply chain, with economic data, with internal operating data and so on. And we got a very strong reaction from our customer base because they're like "man, you're saving us weeks "if not months just getting prepared to start to do an al, let alone doing them." Right? Because the data is analytics ready and they have to do literally nothing. I mean in other words if they ask us for it in the morning, in the afternoon they'll be running workloads again. Right, and then combining it with their own data. >> Yeah, so I should point out that that New York Times GitHub dataset that I showed you, it's a couple of days behind. We're talking here about near realtime, or as close as realtime as you can get, is that right? >> Yep. Yeah, every day it gets updated. >> So the other thing, one of the things we've been reporting, and Frank I wondered if you could comment on this, is this new emerging workloads in the Cloud. We've been reporting on this for a couple of years. The first generation of Cloud was IS, was really about compute, storage, some database infrastructure. But really now what we're seeing is these analytic data stores where the valuable data is sitting and much of it is in the Cloud and bringing machine intelligence and data science capabilities to that, to allow for this realtime or near realtime analysis. And that is a new, emerging workload that is really gaining a lot of steam as these companies try to go to this so-called digital transformation. Your comments on that. >> Yeah, we refer to that as the emergence or the rise of the data Cloud. If you look at the Cloud landscape, we're all very familiar with the infrastructure clouds. AWS and Azure and GCP and so on, it's just massive storage and servers. And obviously there's data locked in to those infrastructure clouds as well. We've been familiar for it for 10, 20 years now with application clouds, notably Salesforce but obviously Workday, ServiceNow, SAP and so on, they also have data in them, right? But now you're seeing that people are unsiloing the data. This is super important. Because as long as the data is locked in these infrastructure clouds, in these application clouds, we can't do the things that we need to do with it, right? We have to unsilo it to allow the scale of querying and execution against that data. And you don't see that any more clear that you do right now during this meltdown that we're experiencing. >> Okay so I learned long ago Frank not to argue with you but I want to push you on something. (Frank laughs) So I'm not trying to be argumentative. But one of those silos is on-prem. I've heard you talk about "look, we're a Cloud company. "We're Cloud first, we're Cloud only. "We're not going to do an on-prem version." But some of that data lives on-prem. There are companies out there that are saying "hey, we separate compute and storage too, "we run in the Cloud. "But we also run on-prem, that's our big differentiator." Your thoughts on that. >> Yeah, we burnt the ship behind us. Okay, we're not doing this endless hedging that people have done for 20 years, sort of keeping a leg in both worlds. Forget it, this will only work in the public Cloud. Because this is how the utility model works, right? I think everybody is coming to this realization, right? I mean excuses are running out at this point. We think that it'll, people will come to the public Cloud a lot sooner than we will ever come to the private Cloud. It's not that we can't run on a private cloud, it just diminishes the potential and the value that we bring. >> So as sort of mentioned in my intro, you have always been at the forefront of disruption. And you think about digital transformation. You know Frank we go to all of these events, it used to be physical and now we're doing theCUBE digital. And so everybody talks about digital transformation. CEOs get up, they talk about how they're helping their customers move to digital. But the reality is is when you actually talk to businesses, there was a lot of complacency. "Hey, this isn't really going to happen in my lifetime" or "we're doing pretty well." Or maybe the CEO might be committed but it doesn't necessarily trickle down to the P&L managers who have an update. One of the things that we've been talking about is COVID-19 is going to accelerate that digital transformation and make it a mandate. You're seeing it obviously in retail play out and a number of other industries, supply chains are, this has wreaked havoc on supply chains. And so there's going to be a rethinking. What are your thoughts on the acceleration of digital transformation? >> Well obviously the crisis that we're experiencing is obviously an enormous catalyst for digital transformation and everything that that entails. And what that means and I think as a industry we're just victims of inertia. Right, I mean haven't understood for 20 years why education, both K through 12 but also higher ed, why they're so brick and mortar bound and the way they're doing things, right? And we could massively scale and drop the cost of education by going digital. Now we're forced into it and everybody's like "wow, "this is not bad." You're right, it isn't, right but we haven't so the economics, the economic imperative hasn't really set in but it is now. So these are all great things. Having said that, there are also limits to digital transformation. And I'm sort of experiencing that right now, being on video calls all day. And oftentimes people I've never met before, right? There's still a barrier there, right? It's not like digital can replace absolutely everything. And that is just not true, right? I mean there's some level of filter that just doesn't happen when you're digital. So there's still a need for people to be in the same place. I don't want to sort of over rotate on this concept, that like okay, from here on out we're all going to be on the wires, that's not the way it will be. >> Yeah, be balanced. So earlier you made a comment, that "we should never "be spending on non-essential items". And so you've seen (Frank laughs) back in 2008 you saw the Rest in Peace good times, you've seen the black swan memos that go out. I assume that, I mean you're a very successful investor as well, you've done a couple of stints in the VC community. What are you seeing in the Valley in regard to investments, will investments continue, will we continue to feed innovation, what's your sense of that? Well this is another wake up call. Because in Silicon Valley there's way too much money. There's certainly a lot of ideas but there's not a lot of people that can execute on it. So what happens is a lot of things get funded and the execution is either no good or it's just not a valid opportunity. And when you go through a downturn like this you're finding out that those businesses are not going to make it. I mean when the tide is running out, only the strongest players are going to survive that. It's almost a natural selection process that happens from time to time. It's not necessarily a bad thing because people get reallocated. I mean Silicon Valley is basically one giant beehive, right? I mean we're constantly repurposing money and people and talent and so on. And that's actually good because if an idea is not worth in investing in, let's not do it. Let's repurpose those resources in places where it has merit, where it has viability. >> Well Frank, I want to thank you for coming on. Look, I mean you don't have to do this. You could've retired long, long ago but having leaders like you in place in these times of crisis, but even when in good times to lead companies, inspire people. And we really appreciate what you do for companies, for your employees, for your customers and certainly for our community, so thanks again, I really appreciate it. >> Happy to do it, thanks Dave. >> All right and thank you for watching everybody, Dave Vellante for theCUBE, we will see you next time. (upbeat music)

>> We're back with Rob Emsley who's the director of product marketing for Dell EMC's data protection division. Rob, good to see you. >> Hi, Dave, good to be back. >> So we just heard from Beth about some of the momentum that you guys have. From your perspective, from a product angle, what is really driving this? >> Yeah, well, one of the things that we've definitely seen is as we talk to our customers, both existing and new customers, cloud journeys is top of mind for all of the CIOs. It's being driven by either the desire to drive efficiency, take out costs, and data protection is one of the most common use cases. One of the things that we find is there's four use cases for data protection that we see. Long term retention of data, cloud disaster recovery, backup to the cloud, and the emerging desire to stand up new applications in the cloud that need to be protected. So backup in the cloud really completes the four major use cases. >> Well, one of the things I think is really important in this market is that you deliver optionality to your customers. So how are customers enabling these use cases? >> Yeah, so the first two use cases of long terms retention and cloud disaster recovery is really driven by our software and our appliances. Both of those are really predicated based upon the assumption that customers are going to deploy data protection on premises to protect their on premises workloads and then tier to the cloud, or, which is becoming more common, use the cloud as a disaster recovery target. It's delivered by our data protection software and that's either in a software form factor or that software delivered and integrated appliance form factor. >> So let's talk about purpose built backup appliances. I think our friends at IDC I think coined that, they tracked that market for awhile, you guys have been a leader there, the acquisition of Data Domain obviously put you in a really strong position. Give us the update there. Is it still a vibrant market? Is it growing, what's the size? What's it look like? >> Yeah, so as we look at 2020, IDC forecasts the market size to be a little under $5 billion. So it's still a very large market. The overall market is growing at a little over 4%. But the interesting thing is that if you think about how the market is made up, it's made up of two different types of appliances. One is a target appliance, such as Data Domain and the new PowerProtect DD, and the other is integrated appliances where you integrate the target appliance architecture with data protection software. And it's the integrated appliance part of the market that is really growing faster than the other part of the PBBA market. It's actually growing at 8%. In fact, IDC's projection is that by 2022, half of the purpose built backup appliance market will be made up of integrated appliance solutions. >> So it's grown to twice the overall market rate, but you guys have two integrated appliances. Why two, how should people think about those? >> Yeah, so a little under three years ago, we introduced a new integrated appliance called the Integrated Data Protection Appliance. It was really the combination of our backup software with our Data Domain appliance architecture. And the Integrated Data Protection Appliance has been our work course for the last three years, really allowing us to support that fastest growing segment of the market. In fact, last year, the Integrated Data Protection Appliance grew by over 100%. So triple digit growth was great. It's something that allows us to address all market segments, all the way down to SMB all the way to the enterprise. But last year, one of the things you may remember at Dell Technologies World is we introduced our PowerProtect portfolio and that constituted PowerProtect Data Manager our new software defined platform as well as the delivery of PowerProtect Data Manager in an integrated appliance form factor with PowerProtect X400. So that's really our new scale out data protection appliance. We've never had a scale out appliance in the architecture before, in the portfolio before, and that gives us the ability to offer customers choice, scale up, or scale out, integrated and target, and with the X400, it's available as a hybrid configuration or it's also our first all Flash architecture. So really, we're providing customers with the existing software solutions that we've had in the market for a long time, an integrated form factor, with the Integrated Data Protection Appliance as well as the brand new software platform that will really be our innovation engine. That will be where we will be looking at supporting new workloads and certainly leaning into how we support cloud data protection in the hybrid cloud reality of the next decade. >> Okay, so one of the other things I want to explore, is we've heard a lot about your new agile development organization, Beth has talked about that a lot, and the benefit, obviously, is you're able to get products out more quickly, respond to market changes, but ultimately the proof is in translating that development into product. What can you tell us about how that's progressing? >> Yeah, so certainly with PowerProtect Data Manager and the X400, that really is the epicenter of our agile product development activities. We've moved to a three month cadence for software releases, so working to deliver small batch releases into the market much more rapidly than we've ever done before. In fact since we introduced PowerProtect Data Manager where we shipped a first release in July, we're now at the third iteration of PowerProtect Data Manager and therefore the third iteration of the X400 appliance. So there's three things that I'd like to highlight within the X400 appliance specifically. First is really the exciting news that we've introduced support for Kubernetes, so we're really the first large enterprise data protection vendor to lean into providing Kubernetes data protection. So that becomes vitally important especially with the developments over at our partner in VMware with vSphere 7, with the introduction of Tanzu, and the reality is that customers will have both vSphere virtual machines and Kubernetes containers working side by side and both of those environments need to be protected. So PowerProtect Data Manager and the X400 appliance has that support available now for customers to take advantage of. Second, we talk about long term retention of data in the cloud. The X400 appliance has just received the capabilities to also take part in long term retention to AWS. So those are two very important cloud capabilities that are brand new with the X400 appliance. And then finally we introduce the X400 appliance with a maximum configuration of four capacity cubes. Rough and tough that was 400 terabytes of usable capacity. We've just introduced support of 12 capacity cubes. So that gives the customers the ability to scale out the X400 appliance from 64 terabytes all the way to over a petabyte of storage. So now if you look at our two integrated appliances, we now cover the landscape from small numbers of terabytes all the way through to a petabyte of capacity whether or not you pick a scale up architecture or a scale out architecture. >> Yeah, so that really comes back to the point I was making about optionality. Kubernates is key. It's going to be a linchpin, obviously, a portability for multi cloud sets that up. As we've said, it's not the be-all end-all, but it's a really necessary condition to enable multi cloud which is fundamental to your strategy. >> Absolutely. >> All right, Rob, thanks very much for coming to theCUBE. It's great to have you. >> Thanks, Dave. >> And thank you for watching, everybody. This is Dave Vellante for theCUBE. We'll see you next time. (bright music)

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now here's your host, Dave Vellante. >> Hello everybody and welcome to this week's CUBE Insights, powered by ETR. It is Breaking Analysis, but first I'm coming to you from the floor of Cisco Live in Barcelona, and I want to talk about storage. Storage continues to be soft but there are some bright spots. I've been reporting on this for awhile now and I want to dig in and share with you some of the reasons why, maybe give you some forecasts as to what I think is going to happen in the coming months. And of course, we want to look into some of the ETR spending data, and try to parse through that and understand who's winning, who's losing, who's got the momentum, where are the tailwinds and headwinds. So the first thing I want to show you is let's get right into it. What this slide is showing here is a storage spending snapshot of net score. Now remember, net score in the ETR parlance is an indicator of momentum or spending velocity. Essentially every quarter, what ETR does is they go out to, in this case, 1100 respondents out of the 4500 dataset, and they ask them are you spending more or are you spending less. Essentially they subtract the less from the more and that constitutes net score. It's not that simple but for this purpose, that's what we're showing. Now you can see here on the left hand side, I'm showing all respondents out of 1161. You see the January survey net scores. You've got Rubrik, Cohesity, Nutanix, and Pure, and VMware vSAN are the top five. So Rubrik and Cohesity, very strong, and interesting, Rubrik was very strong last quarter. Cohesity not as strong but really shooting up. It kind of surprised me last quarter, Cohesity being a little low but they were early into the dataset and now they're starting to show what I think is really happening in the marketplace. That's a good indicator. But you can see 75 percent, 72 percent. Nutanix still very strong at 56 percent, driving that hyperconverge piece. You see Pure Storage at 44 percent, down a little bit, talk a little bit more about that in a moment. VMware vSAN, Veeam, et cetera, down the list. The thing about the left hand side and storage in general, you can see the softness. Only about one third of the suppliers are in the green, and that's a problem. If you compare this to security, probably three quarters are in the green. It's a much hotter segment. Now, look on the right hand side. The right hand side is showing what ETR calls GPP, giant, public, and private. You can see there's an N of 403. These are the largest, the very largest public and private companies, private company being a company like Mars Candy. And they say that they are the best indicators of spending momentum in the dataset. So really isolating on some of the large companies. Look what happens here. You can see Rubrik gets even stronger as does Cohesity, they're into the 80 percent range. That's really rarefied air, so very strong. You can see Nutanix drops down. It does better in the smaller companies, it appears. They drop down to 41 percent. Pure gets stronger in the GPP at 68 percent. You can see VMware's vSAN uptick to 45 percent. Nimble gets better, HPE's Nimble, to 54 percent. Dell drops down to 4.8 percent. HPE goes up to 33 percent. HPE was red in the left hand side. You can see Veeam drops, not surprising, Veeam in the biggest companies is not going to be as prevalent. We talked about that in our Breaking Analysis segment after the acquisition of Veeam. You can see NetApp bumps up a little bit but it's still kind of in that red zone. I also want to call your attention to Actifio. They're way down on the bottom in the left hand side, which kind of surprised me. And then I started digging into it because I know Actifio does better in the larger companies. In the right hand side, they pop up to 33 percent. It's only an N of three, but what I'm seeing in the marketplace is Actifio solving some really hard problems in database and copy data management. You're starting to see those results as well. But generally speaking, this picture is not great for storage, with the exception of a few players like Rubrik and Cohesity, Pure, Nutanix. And I'm going to get into that a little bit and try to explain what's going on here. The market's bifurcated. Primary storage has been on the back burner for awhile now, and I've been talking about that. The one exception to that is really been Pure. Little bit for Dell EMC coming back, we'll dig into that a little bit more but Pure has been the stand-out. They're even moderating lately, I'll talk about that some more. Secondary storage is where the market momentum is and you can see that with Rubrik and Cohesity. Again, we'll talk about that some more. Let me dig into the primary side. Cloud, as I've talked about in many Breaking Analysis segments is siphoning off demand from on-prem spend. The second big factor in storage has been there was such an injection of flash into the marketplace, it added headroom. Customers used to buy spindles to get performance, and they don't need to do that so much anymore because so much flash was pushed into the system. The third thing is you're still seeing in primary the consolidation dynamics play out with hyperconverge. So hyperconverge is the software defined bringing together of storage, compute, and networking into a single logical managed unit. That is taking share away from traditional primary storage. You're also seeing tactical NAND pricing be problematic for storage suppliers. You saw that with Pure again this past quarter. NAND pricing comes down, which you'd think would be a good thing from a component standpoint, which it is, but it also lowers prices of the systems. So that hurt Pure's revenue. Their unit volume was pretty good but you're seeing that sort of put pressure on prices, so ASPs are down, average system prices. Let's turn our attention to the secondary market for a moment. Huge injection of venture capital, like a billion dollars, half a billion dollars over the last year, and then another five billion just spent on the acquisition of Veeam. A lot of action going on there. You're seeing big TAM expansions where companies like Rubrik and Cohesity, who have garnered much of that VC spending, are really expanding the notion of data protection from back-up into data management, into analytics, into security, and things of that nature, so a much bigger emphasis on TAM expansion, of course as I talked about the M and A. Let's dig into each of these segments. The chart that I'm showing now really digs into primary storage. You can see here the big players, Pure, Dell EMC, HPE, NetApp, and IBM. And lookit, there's only company in the green, Pure. You can see they're trending down just a little bit from previous quarters but still far and away the company with most spending momentum. Again, here I'm showing net score measure of spending velocity back to the January '18 survey. You can see Dell EMC sort of fell and then is slowly coming back up. NetApp hanging in there, Dell EMC, HP, and NetApp kind of converging, and you can see IBM. IBM announced last quarter about three percent growth. I talked about that actually in September. I predicted that IBM storage would have growth because they synchronized their DS8000 high-end mainframe announcement to the z15, so you saw a little bit of uptick in IBM. Pure, as I said, 15 percent growth. I mean, if you're flat in this market or growing at three percent, you're doing pretty well, you're probably a share gainer. We'll see what happens in February when Dell EMC, HPE, and NetApp announce earnings. We'll update you at that time. So that's what you're seeing now. Same story, Pure outpacing the others, everybody else fighting for share. Let's turn our attention now to secondary storage. What I'm showing here is net score for the secondary storage players. I can't isolate on a drill down for secondary storage, last slide I could do on storage overall, but what I can show is pure plays. What's showing here is Rubrik, Cohesity, Veeam, Commvault, and Veritas. Five pure play, you can argue Veritas isn't a pure play, but I consider it a pure play data protection vendor. Look at Rubrik and Cohesity really shooting up to the right, 75 percent and 72 percent net scores, respectively. You see Veeam hanging in there. This is again, all respondents, the full 1100 dataset. Commvault announced last quarter it beat earnings but it's not growing. You can see some pressure there, and you can see Veritas under some pressure as well. You can see a net score really deep in the red, so that's cause for some concern. We'll keep watching that, maybe dig into some of the larger accounts to see how they're doing there. But you can see clear standouts with Rubrik and Cohesity. I want to look at hyperconverge now. Again, I can't drill into hyperconverge but what I can do is show some of the pure plays. So what this slide shows is the net score for some of the pure play hyperconverge vendors led by Nutanix. The relative newcomer here is vSAN with VMware. You can see Dell EMC, VxRail, and Simplivity. I would say this. A lot of the marketing push that you hear out of Dell and out of VMware says Nutanix is in big trouble, they're dying and so forth. Our data definitely shows something different. The one caution is, you can see Nutanix and larger accounts, not as strong. And you can see both vSAN and Dell EMC stronger in those larger accounts. Maybe that's kind of their bias and their observation space, but it's something that we've got to watch. But you can see the net scores here. Everybody's in the green because overall, this is a strong market. Everybody is winning. It's taking share as I said from primary. We're watching that very closely. Nutanix continues to be strong. Watching very carefully that competitive dynamic and the dynamics within those larger companies which are a bellwether. Now the big question that I want to ask here is can storage reverse the ten-year trend of the big cloud sucking sound that we have heard for the past decade. I've been reporting with data on how cloud generally has hurt that storage spend on-prem. So what I'm showing here in this slide is the net score for the cloud spenders. Many hundreds of cloud spenders in the dataset. What we're showing here is the net score, the spending velocity over the last 10 years for the leaders. You can see Dell EMC, the number one. NetApp, right there in terms of market share, IBM as well. I didn't show HPE because the slide got too busy but they'd be up there as well. So these are the big spenders, big on-prem players and you can see, well, it's up and down. The highs are lower and the lows tend to be lower. You can see on the latest surveys, maybe there's some upticks here in some of the companies. But generally speaking, the trend has been down. That siphoning away of demand from the cloud guys. Can that be reversed, and that's something that we're going to watch, so keeping an eye on that. Let me kind of summarize and I'll make some other comments here. One of the things we're going to watch here is Dell EMC, NetApp, and HPE earnings announcements in February. That's going to be a clear indicator. We'll look for what's happening with overall demand, what the growth trajectory looks like, and very importantly, what NAND pricing looks like. As a corollary to that, we're going to be watching elasticity. I firmly believe as prices go down, that more storage is going to bought. That's always been the case. Flash is still only about 20, 25, 30 percent of the market, about 30 percent of the spending, about 20 percent of the terabytes. But as prices come down, expect people to buy more. That's always been the case. If there's an elasticity of demand, it hasn't shown up in the earning statements, and that's a bit of a concern. But we'll keep an eye on that. We're also going to watch the cloud siphoning demand from on-prem spend. Can the big players and guys like Pure and others, new start-ups maybe, reverse that trend. Multi-cloud, there's an opportunity for these guys. Multi-cloud management, TAM expansion into new areas. Actually delivering services in the cloud. You saw Pure announce block storage in the cloud. So that's kind of interesting that we'll watch. Other players may be getting into the data protection space, but as it relates to the cloud, one of the things I'm watching very closely is the TAM expansion of the cloud players. What do I mean by that. Late last year, Amazon announced a broader set of products or services really in its portfolio. Let's watch for Amazon's moves and other big cloud players into the storage space. I fully expect they're going to want to get a bigger piece of that pie. Remember, much if not most of Amazon's revenue comes from compute. They really haven't awakened to the great storage opportunity that's out there. Why is that important. You saw this play out on-prem. Servers became a really tough market. Intel made all the money. Amazon is a huge customer of Intel, and Intel's getting a big piece of Amazon's EC2 business. That's why you see, in part, Amazon getting into its own chip design. I mean, in the server business, you're talking about low gross margin business. If you're in the 20s or low 30s, you're thrilled. Pure last quarter had 70 plus percent gross margins. It's been a 60 plus percent gross margin business consistently. You're going to see the cloud guys wake up to that and try to grab even more share. It's going to be interesting to see how the traditional on-prem vendors respond to that. Coming into last decade, you saw tons of start-ups but only two companies really reached escape velocity: Nutanix and Pure. At the beginning of the century, you saw Data Domain, Isilon, Compellent, 3PAR all went public. EqualLogic and LeftHand got taken out. There are a bunch of other companies that got acquired. Storage was really a great market. Coming into this decade, mid part of the decade, you had lots of VC opportunity here. You had Fusion and Violin, Intentury went public. They all flamed out. You had a big acquisition with SolidFire, almost a billion dollars, but really Pure and Nutanix were the only ones to make it, so the question is, are you going to see anyone reach escape velocity in the next decade, and where's that going to come from. The likely players today would be Cohesity and Rubrik. Those unicorns would be the opportunity. You could argue Veeam, I guess reached it, but hard to tell because Veeam's a private company. By escape velocity, we're talking large companies who go public, have a big exit in the public market and become transparent so we really know what's going on there. Will it come from a cloud or a cloud native play. We'll see. Are there others that might emerge, like a Nebulon or a Clumio. A company like Infinidat's doing well, will they hit escape velocity and do an IPO and again, become more transparent. That's again something that we're watching, but you're clearly seeing moves up the stack where there's a lot more emphasis in spending on cloud, cloud native. We clearly saw it with hyperconverge consolidation but up the stack towards the apps, really driving digital transformations. People want to spend less on heavy lifting like storage. They're always going to need storage. But is it going to be the same type of market it has been for the last 30 or 40 years, of great investment opportunities. We're starting to see that wane but we'll keep track of it. Thank you for watching this Breaking Analysis, this is CUBE Insights powered by ETR. This is Dave Vellante. We'll see you next time.

>> Announcer: Live from Las Vegas, it's theCUBE. Covering UiPath Forward Americas 2019. Brought to you by UiPath. >> We're back, UiPath Forward III from Las Vegas at the Bellagio, you're watching theCUBE, the leader in live tech coverage, my name is Dave Vellante. Marie Myers is here, she's the CFO of the rocket-ship known as UiPath. Welcome to theCUBE, thanks for coming on. >> Thank you. >> So, wow. You must be under a lot of pressure to keep the ship moving in a fast direction. But I was just talking to Daniel, he said, you know, when we started the company, we had basic finance systems, kind of like every other startup, but that obviously has changed, so. Well, congratulations, I know you got a lot more work to do but how are you spending your time these days? >> Doing a lot of work, is what I would say. So, as you've kind of seen, that tremendous growth, so huge pressure to just scale the company and ensure that the company has the ability to meet the growth that we're experiencing. So right now I've been really focused on building the operational backbone and actually building a lot of robots for UiPath, actually. That's something I wasn't expecting but came into the role and really help build our own ecosystem around robotics as well. >> I was asking Daniel how much dogfooding, champagne sipping you guys have done and, if it has contributed to the growth and it sounds like quite a bit, actually. >> Absolutely, I'd say we're really hitting the gas pedal right now in terms of building out our own competency and kind of to your point, eating the dog food, drinking the champagne and starting to push the envelope on how we actually use automation and AI to really scale our own business. You asked me where I was spending my time and where I was focused, I literally moved my family to Bucharest for the summer to really focus in on helping to scale the infrastructure. >> So, CFOs usually have a philosophy, a framework, that they like to work with. Obviously you got to stay flexible. How would you describe your philosophy as to how you'd like to manage this company? >> Well clearly, for us we're at an incredible stage of momentum in the market, and the ability for us to continue to build distance in terms of being number one is critical, so in terms of strategy, supporting that number one position, being agile. Able to scale for growth and ultimately do so profitably is certainly the ambition that we have in mind. And that requires turning a lot of different dials, right? And being able to turn them at the right time but at the same time ensure that we've got enough, let's just say, cushion underneath to scale that growth, because the growth is happening very very quickly. >> So CFOs, today's CFO is definitely, I would say more strategic than when I first got into the business, we used to joke that the cheap financial officer. But, I think of CFOs that I really admire, guys like Mike Scarpelli, who was at ServiceNow, now he's at Snowflake. I think he was at Data Domain too, Tom Sweet at Dell, whole different example, they're doing crazy financial engineering. But, much more of a strategic focus. Want to throw gasoline in the fire, and drive growth, but at the same time, thinking about efficiency, so. How have you seen that role evolving and how does that apply to what you guys are doing? >> So I think your comments about the role of the CFO are really right on, I mean, what's perhaps even more interesting, I think, for CFOs that are in software and maybe in a space like we're in is that you ultimately also get involved in being an advocate for your business. In robotics process automation, almost 40% of the first use cases are in finance. So, you're out there supporting the business case with other CFOs who want to understand how does efficiency really, why they should buy from us and what's the business proposition? So you've got to balance the demands of the business with running the business and so, I think that does give you the very unique lens because you understand how this product, to your point, drives operational efficiency. And obviously all CFOs really care, that's right on the list of the top three. >> You know, that's interesting, Marie, because the tech company CIOs are always being pulled in. Because they're early users of some technology. It's not common anyway, that the CFO is one of the lead sales go-to people but it sounds like it is in your case. How much time do you spend in the field? >> I try to balance my time, because you could get pulled very heavily I feel because of the nature of our business into that but I think because robotics process automation has been a key entry point into finance, there's a lot of work for CFOs to do there. So I try to balance my time, but it is, I think, a very important part of our own learning for our company, we get a lot of feedback from our customers. And, even helps me in my role because I get use cases from customers that I apply internally to drive our own efficiency. >> Well, plus, you know, you can see what's happening in the field, you can feel the pain of the sales reps, you can tell which ones are kind of sandbagging, >> You're right, absolutely! >> 'cause they're all sandbaggers! >> You're right about that, so it's been great being at this event, I know a lot of the great reps and so you really understand, you've got a good pulse on what's happening in terms of the business and where the risks are in the quarter. So that's one advantage. >> What're the metrics that you're driving? I mean, obviously the conventional ones, throw those in, but. >> Yeah, I mean obviously productivity, very important for us, we've got a lot of folks we've hired so really understanding what that productivity looks like. The usual cast of characters, AR. Customer acquisition costs, really focused on, what is that first customer costing and then how we're managing our land and expand. What our upsell looks like, so I think the usual cast of characters. >> And then eventually, as all these M and As happen, you'll get cohort sales coming in and the like. So, is everything that you guys sell recognized on a deferred revenue basis? >> No, we're in the midst of converting to 606 right now so we're kind of like subscription one year on prem. So pretty conventional software, red rack. >> Okay, but as you move to the cloud model. >> That gives us a different model, yeah. And we have it, we're just starting that journey. >> It seems like, you see different models. You know, Adobe bit the bullet, Splunk sort of peeled the Band-Aid off very slowly and they both can work. But it seems like a lot of the, I'll call it game, maybe it's the wrong word. But that's what came to mind, is educating the street. On that metric, on that transition. You certainly see it, for instance, in Oracle's case. Putting a lot of emphasis on helping the street understand that transition. That's not your primary focus right now, I'm sure you're spending some time with the analysts, I saw many buzzing around here. >> There was a lot here in the last few days. >> Dave: Yeah, they all want your business! >> (she laughs) They all want your business! I got a lot of texts in the last 48 hours. >> Well, it's an exciting time. And you know, eventually you guys are going to do an IPO and why wouldn't they? Be smart to be here, but what are your thoughts on that? Is that something that you really don't pay attention to right now, are you preparing for that? >> I'd say we're just getting total transparency, we're just moving through 606. So we're digesting that transition first and we're just starting down the whole cloud migration path. So as we start to think that through it's going to be I'd say a priority for 2020. And it's going to be important, I mean, for this business we expect, who's to say what the uptake rate is as customers move to the cloud? But I suspect it's going to be fairly aggressive in our business just because of the nature of bots and how customers think about bots. >> Yeah, so, Daniel said on the previous segment, he said, look, IPO's in our future, probably not 2020, we need at least a year to get our act together. So we're looking at 2021 but it depends on what the climate is, et cetera. My question is, and I've talked to, I see you orange here, Pure Storage is a high flyer in the infrastructure business, they're all orange, so they paint the town orange. >> Seems orange is very popular right now. >> It's a great color, recognizable. But I was talking about, they're all about growth. Not about optimizing profit right now and that's the right play because the street's rewarding growth. You guys, clearly, all about growth. >> We've got the growth story buttoned down, yeah. >> Yeah, you've got that down. But you still want to put gas on the fire, right? So, right now you're still optimized for growth. >> Absolutely, you see what's happening here, right? So, yeah, I think that kind of-- >> And you're well capitalized, so that's not the issue. So the strategy, I presume, is keep growing, get escape velocity, because, the company that gets escape velocity and is the leader in this business, you guys are the leader right now. You're not going to rest, you're going to stay paranoid, I'm sure. But the one that leads is going to make the most money. That always happens. >> Well, extending that leadership role is part of our core strategy, right? Maintaining number one, putting distance. I think you've seen the products that we announced here the last couple of days, adding to the portfolio or giving us incremental TAM so we can grow across the space. I think growing both down the stack and up the stack is critically important for us as we think forward to the future, too, right? We just don't want to be a pure robotics process automation company. We want to look across AI, down the stack into process mining. >> How do you think about your TAM? >> That's a great question. So I've been studying up a little over the last few days preparing for the board meeting tomorrow. I mean, robotics process automation, TAM next year is about two and a half, or two and change in terms of revenue, two billion. I've been looking at it a lot more broadly because I do believe that it is defined today quite narrowly in terms of very traditional RPE. And that started very much in the back office. As we've spread automation and kind of created that platform mentality, the TAM becomes additive. You've got now the process mining TAM which I think we can clearly start to play in that space. And then also the BPMs and now, obviously, AI. So, I was just doing our own back of the envelope in the last few days and you can get, easily, I think now, above that $10 billion mark and it depends on how you start to think about AI as you go forward and that just adds incremental TAM. >> Well, and you throw in services, you're already there. >> Yeah, exactly. >> Probably be there by next year. I think generally, I'll just give you my quick opinion. I think the market's undercounting the TAM potential. And I haven't done a detailed TAM analysis of the, I don't even want to say RPA 'cause that's the core. >> Exactly. >> But I could see this thing expanding dramatically, we talked about cohort sales. Just talking to customers, you're like one to 2% penetrated and there's so many more use cases. As you bring in AI, which, I really think of AI as a horizontal. But if you start applying AI and bringing in automation as an adjacency to you guys, I think that TAM are going to be many many tens of billions beyond what you're thinking. >> That's exactly how I like to think about it, of course, I go back to my IDC friends and try to use some of their benchmarks. But I think they're somewhat conservative. And I think as the market matures and people understand the breadth of the category, I just think that when RPA started it was kind of pigeonholed as a back office opportunity. >> Yeah, I mean, I was at IDC for a long time and we were really crappy at long-term TAM analysis. And you saw it with, Craig LeClair was awesome today. >> Yeah, I love Craig. >> Love him, fantastic. >> Very witty. >> His forecast, however, and same with IDC, we were there, we used to do these linear forecasts and that's not how these markets grow. It's an ogive and a steep S-curve and I think that's my prediction. >> Marie: I couldn't agree more with you. >> We heard predictions this morning, I summarized the predictions and gave my own. And that's one that I see. I'd like to see a longer-term forecast. Maybe we'll work on that. >> Well, we'd love that, I think that's going to be important. I think, part of it's just the maturity of this category. And as folks are starting to understand the breadth of the application, if you think about it, that's why there was so much early work in finance. Now you're starting to see the business spread across the enterprise, right? And I think as it spreads across the enterprise it just adds that incremental TAM and it becomes a gateway to AI. >> I've been using ServiceNow as an example, even though a totally different business, they had a much heavier lift, they started in IT, and went on, so it took longer for adoption. But there's a lot of similarities that I see just in terms of extending beyond just the core of the business, growing the ecosystem, I think is a critical part of that but as far as the customer adoption and the applicability of your technology, I think it's got a lot of legs, so. Like you say, Marie, we'll work on that a little bit. >> I'd love that, thank you. >> Dave: Appreciate you coming on, it was great to have you and wonderful to meet you. >> Enjoyed it. You too, thank you very much. >> You're welcome. Alright, keep right there, buddy, we'll be back to wrap up UiPath Forward III right after this short break. You're watching theCUBE. (electronic music)

>> live from San Francisco, celebrating 10 years of high tech coverage. It's the Cube covering Veum World 2019. Brought to you by VM Wear and its ecosystem partners. >> Welcome back, everyone. Day three Q coverage here in San Francisco for V emerald. 2019. I'm just for a student, Um, in here with David Lan. Take days free kick off. We have two sets wall to wall coverage. Guys, this is the time where we get to take a deep breath two days under our belts look and reflect on all the news we've covered in a dark to last analysis sessions but also kind of riff on. We got two nights in hallway conversations we learned a lot of the party means do. I learned a lot last night. Dave. I know you. You learned a lots, do you, Thomas? When things that the chatter Certainly twittersphere hashtag the emerald. A lot of action on there, but it's the hallway conversations. It's the party that people have a few cocktails in them day that you start to hear the truth. The real deal comes out, >> No doubt. And and again Jon Stewart, there's real concern over from the from the practitioners we talked to about this acquisition spree. Are they going to be integrated? Are they going to just throw all this stuff at us and keep jamming products and service is down our throats? Or is this going to be a coherent set of solutions that solves our problem? We also had a little little interesting side conversation about, you know, Snowflake, Frank's lumens new company and how basically Frank is bringing back the Pirates from Data Domain and from service. Now Mike Scarpelli is over there. He's a rock star. CFO Beth White is eventually is back over there. And Frank's Lupin. He's the guy who takes companies from, you know, 100 million to a billion, so that's gonna be >> very serious money making him going on there. >> We have been following his career for a number of years now. We watched him take data domain. We watched him pull that that rabbit out of his hat with the sale with net app, and then the emcee swooped in. And then we saw what he did service. Now we've documented this is an individual to watch, you know, >> he's a world class management team member I mean, he's executes. >> Oh, yeah, no doubt. And >> he has >> a formula that's been proven and in time and time again. And to me, the biggest testament salute Min is the success of the continued success of Data Domain. After he left Hey, he really helped clean up the emcees data protection mess. Um, and then the second thing is, look at service now is performance after he left, I haven't missed a beat. And, yeah, John Donahoe, great executive and all, but it's because Frank's Lubin had everything in place and that was a really well run >> dry. And they got a nice little oracle like business model. >> Yeah. No, you're right. They kind of, you know, the big complaint now as well. Your price is too high that Oracle. >> What have you learned? What you hear in the hallways? I mean, a lot of chatter. >> Yes, John, we We've been reflecting back a lot. It's 10 years in 10th year of the Cube here and back here in San Francisco. The new Mosconi, our third show that I've been at this year in Mosconi and we always track year to year. But since it's been what 45 years since we were here for VM World. When I talked to the average vendor. When I talk to you know, the analysts here were like, Oh, thank goodness we're not in Vegas. When I talked to the average attendee, they're like, Oh my God, what happened to San Francisco since last time we were here? It is too expensive. And the experience walking around San Francisco has really not nearly as nice as it might have been five or 10 years ago. And many of them we were talking to, Ah, woman that runs an event that has been Vegas in San Francisco. And she said, Oh, we did in San Francisco and got tremendous feedback. Don't do it there again. Brings back to Vegas both for costs and the enjoyment of being around the environment. >> Where was a shit show here in San Francisco is horrible right now, I got to say to your right eye was walking this morning from my hotel. Literally. A homeless person passed out the middle of the sidewalk. Um, your smells like urine. It's P, and it's It's just I mean, it's really bad this tense now. I mean City of San Francisco is gonna do some. Mosconi, by the way, has been rebuilt. Awesome. So, you know, in terms of the new Mosconi stew, that's a serious upgrade. Hotel rooms are scarce and just the homeless problem. It's just ridiculous. I don't know what they're >> doing. So one of the other big things when I was reflecting coming into here two years ago when VM wear really started down right before the war on AWS announcement, they made a big announcement. IBM because they had sold off the cloud air toe Oh, VH And for two years Oh, VH was a big partner, Talked about that transition, said we handed off this great asset over h isn't here at the show. I was like, Oh, my gosh, you know, that was, you know, such a big story and other companies like New >> 12. That's good. One lets someone who's not at the show and why. Yeah, oh, VH wired to hear >> They aren't here because, well, they've got customers. More of them are in Europe That was supposed to be a big entry into the United States. Obviously, it wasn't as valuable for them to be here, even though I'm sure they're still part of that service provider ecosystem. They have other big one for us, and we've had on the Cube Nutanix. You know, we've had Dheeraj Pandey. First time we had him on was that this show is still the majority of Nutanix. Customers are VM where customers I've talked to lots of Nutanix customers at the event, even part of the analyst event. Some of the customers I talked to were like, Oh, yeah, my hardware stacks Nutanix and amusing NSX. And I'm using other things there. But they are not here. They're not allowed to be at the show. And I >> mean, they were blatantly told they can't come. >> They can't come here. They can't come to the regional things. They can't do the partner things. So that that that relationship is definitely >> from red hat. What kind of presence have you seen from Red s? >> So their number companies like red Hat that they're kept at a lower level of sponsorship. So they're here. They participate, you know. Open shift, of course, is you know, big enemy for cloud native. Lots of open shift runs on V sphere. So many of those companies that are part of the ecosystem, but not the ones that they want to celebrate and put front and forward. So it's always interesting kind of walk around on those. Even Microsoft is an interesting relationship for, you know, decades with the M wear. You know, of course, azure they partner with. But hyper V was long a competitors. So, you know, we understand those competitive relationships >> could be interesting. Stew and Dave on the ecosystem Jerry Chan Day when we just doing my interview yesterday on the other set mentioned that the ecosystem reinvents itself the community. The question now is with Delhi emceeing Del Technologies obviously heard Michael Dell essentially laying out his plan, which is he's got. He's trying to keep people distracted, but the bottom line is going to top people putting together the cloud right well service provider model. So you know, that's what he's gonna be a big impact. VM wear the crown jewel of Del Technologies certainly is looking more and more like It's >> well and yesterday remember the first VM world we did in 2010? It was It was del I mean course and see only the time Who's Del? It was H p Yes, the emcee was there, but it was net app. I mean, everybody could've had equal standing yesterday at the keynotes. It was Project Dimension of V M, where cloud on Delhi emcee and long keynotes >> data protection into the VM were >> also it's It's all very heavily, you know, Jeff Clarke has his his thumb on, you know, the the deli emcee folks pushing that through Veum where Michael is orchestrating the whole thing. Pat obviously is allowing it. I was sitting in the audience Next next, Some folks from Netapp they're like, you know, this kind of a bummer. Calvin Sito from h p e tweeted Wow how to stick it in the face of your ecosystem partners. He then later went on Facebook saying, Hey, I love this ecosystem, so sort of balancing it out because, you know, he wants to be a good, good citizen, but clearly the ecosystem partners who basically brought VM where you know, to the the position where it's in through distribution, our little ruffled. Right now you can't blame him, But at the same time, the mandate is clear. Michael Dell is driving his products and his solutions through VM were period the end. And, you know, if you don't like it, leave >> right. They had such great success with V San and VX rail in that joint product development and go to market. If they can replicate that with a number of other solutions, they get that the synergies. If >> you don't like it, don't leave. That leave is worse than that. They say you don't like it, you know, invited you. But >> how about what Pat said yesterday in the Cube about when they announced on Gwen heavily leaned into V san. He said publicly that Joe Tucci was pissed and I hate her. They were going at it so that so that shows you the change, right? I mean, so so so e m. C. When it owned VM where was very cautious about allowing Veum wears a software company to drive value somewhere Now is just acting like a software company. >> Well, I think I mean, I learned last night's do, um and you can appreciate this. I learned that the top executives of'em where are looking heavily and working hard at understanding and drive them kubernetes cloud native thing because this is not a throwaway deal. This is not a you know, far anything that they are investing. They get their top brass tech execs on kubernetes fto. Two big players job. Ada, Craig McCaw calumnies. We know interviews since day one, but I think the cloud native thing is going to be interesting. And I think it's gonna be evolution. I think there's gonna be a very dynamic road thing's gonna be a series, of course, corrections, but directionally they're all in on. They're going for it, they're not. >> And actually, I had a, you know, good discussion with Chad Attack. It's a good friend of the program now working at GM, where for the first time, but came from AMC worked at Pivotal. He said, culturally, such a gap between VM wear don't have to touch your app, you know, move everything along lifted shift is nice and easy versus pivotal, you know must go completely You know, dual programming, you know, agile everything there, so bridging those because there's multiple paths and the rail pharaoh announcement is that would be cloud native stuff that won't necessarily go to the EMS. We're going to retool V EMS to now be a platform for kubernetes so that they have a few passed to bridge or to build towards the future. Here's the >> answer strategy. Discussion That and Rayo Farrell was now running Cloud native. Think this is just really >> ties in the interesting discussion that I had with some folks was that you've essentially got well, Jerry Chen brought this up last time we had him on it and reinventing because >> we have >> a conversation all the time about this Amazon have to go up the stack. And Jerry Chen made a really he said, Look, it they're not They're not gonna become an e r peace offer company. What they're gonna do is give tools to the builders so that they can disrupt Europea. They can disrupt service. Now they can disrupt Oracle. That's their strategy, at least for now. Okay, so what does that say? I think the strategy discussion inside of'em were and and l is about by whatever clouds gonna be 35 to 50% of the market. Fine. And the cloud native abs. Great. But you got this mission critical. E r p is an example. Database saps that are on Prem. What we have to do is keep them there. So we're going to sell to the incumbents and we're going to give them cloud native tools, toe modernize. Those APS have build new acts on Prem, and that's the that is the collision course that's coming. So the big question is, can the cloud native guys and AWS disrupt that >> huge? I've always said I'm is on and like the way they're coming in, a tsunami is coming in. And who's gonna build that sea wall to stop it right? And that's essentially only hope that these guys have. You look at all the competitive strategy. Was Oracle. Whoever just gotta stop it? You can't like >> the sea >> wall. That's a great building. A sea wall I was, I would say, is Is that you know, they're only hope at this point is to, you know, get in the game because see Amazon is the stack. They're not really moving up the stack. You hear that from Cisco and Dale and other people? That's where it's a game of musical chairs. Right now, the music's you know, there's still a lot of shares left, but soon chairs getting pulled away and Cisco Deli emcee VM, where they're all fighting for these big chairs. And one >> thing >> we talked about yesterday is that VM wears very directional, product driven. Otherwise they pick a direction, is a statement of direction and don't really have a lot of meat on the bone. In the product side, Sister is actually in market with service providers there in market with NETWORKINGS to this no vapor there that's installed basis and incumbent business. You have developers Esso Baton talks about suffered to find data center, suffer defined networking. I mean, come on, Really. I mean, they're getting there, but it didn't have the complete solution. Cisco >> Coming into this week, I expected here a bit more about the progress and all the customers of'em wear on AWS and feel like Vienna actually downplayed the AWS. We know what a strong partnership it is at every Amazon show we go to, and we got a lot of them Now there's a big presence there, and I can talk to customers that are starting to roll out and move there, but it felt like it was David's. You pointed out there are some messaging differences when you talk about multi cloud and how they're positioning it. So, you know, put those >> here Amazon. If your Amazon you're not happy with Microsoft Dell Technologies World The big announcement that was positioned a cloud foundation Although it wasn't a joint engineering, But the press picked it up as though the Amazon deal has been replicated with Microsoft and Google. I mean, you gotta be gotta be hurt if your Amazon >> So I've I've just been taking notes this this event, there's I've noted at least five major points of difference between a W s what they're saying and their philosophy and the anywhere so eight of us. We know they they don't talk multi cloud. They've told their partners, If you're doing joint marketing with us, you cannot say multi cloud aws that reinforce John. We saw this. Steven Schmidt said that this narrative that security is broken doesn't help the industry. Security's not broken, you know, we're doing great. The state of the nation is wonderful. Aws Matt. Not really. I agree. By the way. Uh, that's not the case. I agree with Pat saying Security's broken. It's a do over VM where wants to be the best infrastructure and developer software company. Who's the best infrastructure and software development platform. Eight of us. The M one wants to be the security cloud. Who's the security cloud? Eight of us. And then, uh, they talked about 10,000 cloud data Listeners are those really cloud data centers at Vienna. And the last one was this was a little nuanced Veum was talking about We know about migrating, modernize, lifted ship shift and then modernize The empire's not talking about modernize and then migrate. If you want to. I totally in conflict >> as a collision course. That's got Look, look, look at the data center was Look, it looks like we're going. We're going away, right to the data center. Staying. That's music to Michael Dell's VM. Where's years they live in the Data City? Do you pointed out yesterday? Data Senate goes away. So does begin. Where's business? >> One of things. I'm surprised. I'm wondering you both have talked to some of the service fighter telco pieces of'em, where they're doing that project dimension, which is the VM where stack on del that looks just like outposts on. And I know they had deployments on this for months. If I was them, you know, it's everybody's hearing about Outpost to talk about it, being more like we're already doing it in. This has you in that Amazon ecosystem. It might be a little strong for the Amazon story, but have you been hearing any about that this week? >> I think they keep a lot of cards close to the chest, but it's clear from the announces that they're doing certainly del the VM, where on Delhi Emcee Cloud or whatever it's called, it's not a cloud but their their infrastructure that is essentially a managed service. That's gonna be really strong for I t. People, because I think that the value proposition of going toe i t and saying we have this, you don't need to do anything. It's very strong, I mean, because I didn't want him >> and justified because this the project to mention it is that single, that thinner stack like what we saw on Outpost in the Amazon video, as opposed to Veum, where cloud on AWS, which is the full C i r h d. I stack. >> I haven't heard anything still on >> well, but the conversation I had from from Vienna, where standpoint, they could make money on that manage service. That's why it's the preferred partnership, right? And so that's their part of their cloud play. If you don't have a public cloud, I said this yesterday, you have to redefine Cloud and you have to get into cloud service. And that's what's happening. And that's exactly what's happening. And what I like about what V M where is doing is they are transitioning their model to a sass based model. Now it's only 12 and 1/2 percent of the revenues today. But both pivotal and carbon black are gonna add, you know, ah, $1,000,000,000 next year to that subscription based $3 billion in year two. Um, and so you know, Pat said the other day, I think we could get to 50 50. I don't necessarily think in the near term we're gonna go beyond that. It's not the Adobe >> way could be critical. Critical of'em were in some areas, but I gotta tell you their core strength that they went to a software operators on the data center friend of prices. That's been a great strategy. Focusing on their core building from there is Jerry 10 point out adding other products so their software company, So I think they're really got a good solution. And you? The data shows that people are increasing their spending, John. Just one based on >> that. Because I had a couple of really good conversation with customers, customers that would deploy VCF So they've got the full stack on there. So using H C I, but not necessarily on Dell hardware, could be Cisco Hardware. Could be HB hardware in the like or they're buying NSX. But the virtual ization team owns it, and they get kind of put in. A box storage team says That's not the array I'm used to buy. Well, maybe I'll put a pure storage box and put it in between. The networking team says I'm refreshing my Cisco hardware. You know, we're like, but we have NSX, and it's great. Well, you can use NSX over there. We're going to use a C I over here. So the term I heard from a number of customers is organizations still have hardware to find roles, and they're trying to figure out how to move to that software world. Which hurts me, cause I spent years trying to get beyond silos and helping people you know, move through those environments. And still, in 2019 it's a big challenge. That organizational shift is we know how tough that is. >> So just couple points in the data, because you're right. There are some countervailing trends, though. So, yes, people are spending Maurin VM where in the second half. But at the same time, the data shows that cloud is hurting VM wear spend. So this that's kind of gets interesting. Our containers gonna kill VM where? No, there's no evidence that container's air hurting VM where spend. But there's clearly risks there, you know, as we've talked about who's best position of multi cloud. Well, it turns out three guys with the public cloud are best positioned in multi Google and Microsoft on, and so and then the pivotal thing is interesting, and ties ties all this in so that the data is actually really interesting. It's like you're seeing tugs at both sides, and I think your your notion about the seawall is dead on. That's exactly what they're doing. >> You see that with Oracle's trying to stop jet. I just want they can't win this one to stop Amazon just on the tracks gave great data. Great reporting, Stoop. Good observations. Get all the day that night and parties we're gonna certainly keep doing that. Day three of wall to wall coverage here. You bringing to the insights and interviews here live from the Emerald Twin 19. Stay with us for more after this short break.

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hi everybody. This is Dave Vellante and welcome to this CUBE conversation. I've been following trends in backup and recovery and data protection for decades and I'll tell you right now is one of the most exciting eras that I've ever seen and with me here to talk about some of the trends and some hard news is Beth Phalen. She's the president and general manager of Dell EMCs data protection division. Beth it's great to see you again. Thanks for coming on. >> It's great to be here Dave. It's always good to talk to you. >> So, there's been a subtle change in IT. Even when you go to sort of the downturn in 2008 where IT was largely a support function. It's really now becoming a fundamental enabler. Are you seeing that with your customers? >> Absolutely. The vision of IT being some back office that is segregated from the rest of the company is no longer true. What we find is customers want their application owners to be able to drive data protection and then have that compared with the central oversight so they can still have that global overview. >> The other change is, for years data has been this problem that we have to manage. I got so much data. I got to back it up or protect it, move it. It's now become a source of value. Everybody talks about digital transformation. It's all about how you get value from data. >> Yeah. And it's so interesting because it was there all the time. Right? And suddenly people have realized, yes, this is an asset that has a huge impact on our business on our customers and again makes it even more important that they can rely on getting access to that data because they're building their business on it. >> So as the head of the data protection division, it's interesting. Even the palance has changed. It used to be, when it was just tape it was backup and now it's data protection. So the mindset is shifting. >> It is and it's continuing to shift with new threats like cyber recovery and other challenges that are out there, protecting data becomes the core of what we are offering our customers. >> So let's talk a little bit more about the catalysts for that change. You got tons of data, you are able to apply now machine intelligence like you never have before and you got cloud which brings scale. So this is changing the needs of customers in the way in which they protect data. >> As customers data becomes more and more distributed across multiple cloud providers, multiple locations, it's even more important that they can answer the question, where is my data and is it protected? And that they can recover it as quickly as possible. >> And you're seeing things like DevOps, data protection strategies and data management strategies, and so supporting DevOps and analytics applications. You also have new threats like ransomware. So it's a more fundamental component of cyber. >> Yeah and you will hear us talking a little bit about cyber recovery, the new product that we introduced last year. We can't just think about data protection as backup. We have to think about it as the comprehensive way that customers can get access to their data even if they're attacked. >> So much has changed. Everything has changed. >> The level of innovation that we've been doing has been keeping up with that change. And that's one of the things that I'm most excited about as the president of this division. We've been investing in enhancing the customer experience, and cyber recovery as I mentioned and expanding into new markets into driving a new level of reliability and resiliency, building on the duration that we have. And of course expanding into the cloud. So one of the things that hasn't changed is the fundamentals of I need to get my data back, I need to be trusted. Why is it, you guys make a big deal out of being number one. You're number one in all the Gartner Magic Quadrants and so forth. Why is leadership so important to customers and what are those fundamentals that haven't changed? >> So two questions there. First, leadership is so important because we have more experience protecting data around the globe than anybody else. And that means all environments right from the multi-petabyte, major corporations to the shops have maybe a terabyte. So 24 terabytes. We're involved in it all. So that experience is important. And then those fundamentals you talked about, lowest cost to protect, fastest performance, fastest backups and resiliency, those fundamentals have to be part of any data protection product. >> The way you guys are organized, you are in chare of R&D as well, you talked about innovation before. I wonder if you could talk a little bit more about how your R&D investments are translating into customer value in terms of price performance. So resiliency, speed, cost. What's going on there? >> The biggest thing that I wanna talk about and highlight here is how much our investment in cloud is enabling our customers to continue to have confidence that they can get the same level of digital trust that they've had with us on prem but now as they expand into the cloud for cloud disaster recovery, long-term retention, data protection in the cloud that that confidence comes with them. And we're doing it in a way that allows them to seamlessly expand into the cloud without having to introduce additional gateways, additional hardware. It becomes an extension of their data protection infrastructure. >> So the cloud operating model is very important here. What are you guys doing for instance, admins, application owners, in terms of enabling self-service for example. >> We have the broadest application support of any company. And what we're doing is we're integrating directly with those applications. Whether it be Oracle, SAP. You can go down the list. And then of course directly integrating with VMware for the VM admins. That's not enough though because if we just did that you wouldn't be able to have one view of how your data protection policies are working. And so we pair that with centralized governance to make sure that the person in charge of the data protection for that company still could have confidence that all the right things are happening. >> So what does the data protection portfolio look like? How should we think about that? >> Three simple things, Data Domain, our new integrated appliances and data protection suite. >> Okay. Follow up question on that is, how do you, for customers, obstruct the complexity? How are you simplifying their world especially in this cloud operating module. >> Simplifying comes in multiple stages. You have to simplify the first box to backup experience. We've cut that down to an hour and a half, two hours in max. From there, you have to make sure the day-to-day tasks are simple. So things like two clicks to do cloud failover, three clicks to failback. Things like a single step to restore a file in a VMware environment and then live movement of that VM to another primary storage array. That kind of targeted customer use case simple process is core to what we've been doing to enhance the customer experience. >> Now, you guys aren't really a public cloud provider so you gotta support multiple clouds. What are you doing there in terms of both cloud support and what are you seeing in multi-cloud. >> Most customers have more than one cloud provider that they're working with. So what we do is we allow the customers specific example right from within the data domain interface to select which cloud they wanna tier to and then they can also select other cloud providers through the same interface. So, it's not a separate experience. They can focus on the Data Domain but then interact with multiple clouds. >> Awesome. Beth, thanks for taking some time here to set this up. We're gonna hear about some hard news that you guys have today. We've got some perspectives from IDC on this but right now lets take a look at what the customer says. Keep it right there. (chilled piano music) >> Phoenix Children's is a healthcare organization for kids. Everything that we do is about the kids. So we wanna make sure that all our critical data that a doctor or a nurse needs on the floors to be able to take care of a sick kid, we need to make sure it's available at any time. The data protection software that we're using from Dell EMC with Data Domain give us that protection. Our critical data are well kept and we can easily recover them. Before we moved to Data Domain we were using Veritas NetBackup and some older technology. Our backup windows were taking upwards of 20 to 24 hours. Moving to Data Domain with de-duplication we can finish our full backups in less than seven hours. The user deployment for data protection software and Data Domain was very easy for us. Our engineers, they have never worked with data protection software or Data Domain before. They were able to do some research, walk a little bit with some Dell engineers and we were able to implement the technology within a month, a month and a half. ECS for Phoenix Children's Hospital is a great technology. Simple to use, easy to manage. The benefits from a user perspective are tremendous. From an IT perspective, I can extract terabytes of data in less than an hour. When we get into a critical situation, we can rely 100% on ECS that we will get the information that the doctor or the nurse needs to take care of the kid. The data protection software and the Data Domain benefits for Phoenix Children's Hospital are great. There is a solution that works seamlessly together. I have no worries that my backups will not run. I have no worries I will not be able to recover critical applications. (chilled piano music) >> We're back with Ruya Barrett who's the vice president of marketing for Dell EMC's Data Protection division. We got some hard news to get into. Ruya, let's get right into it. What are you guys announcing today? >> We are announcing a basically tremendous push with our data protection family both in Data Domain and Integrated Data Protection appliances and the software that basically makes those two rock. >> So, you've got a few capabilities that you're announcing. Cloud performance. Take us through sort of at a high level. What are the three areas that you're focused on this announcement? >> Exactly. You nailed it Dave. So three areas of announcement, exciting cloud capabilities and cloud expansion. We've been investing in cloud over the last three years and this announcement is just a furthering of those capabilities. Tremendous push around performance for an additional use cases and services that customers want. The last one but not least is basically expanded coverage and push into the mid-market space with our Data Domain 3300 and IDPA 4400. >> And this comes in the form of software that I can install on my existing appliances? >> It's all software value that really enables our appliances to do what they do best, to drive efficiency, performance but it's really the software layer that makes it sane. >> And if I'm a customer I get that software, no additional charges? >> If you have the capabilities, today you'll be able to get the expanding capabilities. No charge. >> Okay. So one of the important areas is cloud. Let's get into some of the cloud use cases. You're focused on a few of those. What are they? >> Cloud has become a really prevalent destination. So when we look at cloud and what customers wanna do with regards to data protection in the cloud, it's really a lot of use cases. The three we're gonna touch on today is really cloud tiering. Our capabilities are in cloud tiering with long time archival. So they're really trying to leverage cloud as a long time archival. The second one is really around cloud disaster recovery. To and from the cloud. So that's really important use case. That's becoming really important to our customers. And not, God forbid, for a disaster but just being able to test our disaster recovery capabilities and resiliency. And the last one is really in-cloud data protection. So those are the three use cases and we have enhancements across all three. >> Let's go deeper into those. So cloud tiering. We think of tiering. Often times you remember the big days of tiering, inbox tiering, hot data, cold data. What are you doing in cloud tiering? >> Well, cloud tiering is our way of really supporting object storage both on premises and in the cloud. And we introduced it about two years ago. And what we're really doing now is expanding that coverage, making it more efficient, giving customers the tools to be able to understand what the costs are gonna be. So one of the announcements is actually a free space estimator tool for our customers that really enables them to understand the impact of taking an application and using long-term retention using cloud tier both for their on-premise data protection capacity as well as what they need in the cloud and the cost associated. So that's a big question before customers wanna move data. Second is really broadest coverage. I mean, right now in addition to the usual suspects of AWS, Azure, Dell EMC Elastic Cloud Storage, we now support Ceph, we support Alibaba, we support Google Cloud. So really, how do you build out that multi-cloud deployment that we see our customers wanting to do with regards to their long-term archival needs? So really expanding that reach. So we now have the broadest coverage with regards to archiving in the cloud and using cloud for long-term retention. >> Great. Okay. Let's talk about disaster recovery. I'm really interested in this topic because the customers that we talk to they wanna incorporate disaster recovery and backup as part of a holistic strategy. You also mentioned testing. Not enough customers are able to test their DR. It's too risky, it's too hard, it's too complicated. What are you guys doing in the DR space. >> So one of the things that's I think huge and very differentiated with regards to how we approach, whether it's archive or whether it's DR or in-cloud is the fact that from an appliance standpoint you need no additional hardware or gateway to be able to leverage the capabilities. One of the things that we introduced, again cloud DR over a year ago, and we introduced it across our Data Domain appliances as well as our first entry to the mid-sized companies with IDPA DP 4400. And now what we're doing is making it available across all our models, all our appliances. And all of our appliances now have the ability to do fully orchestrated disaster recovery either for test use cases or actual disasters, God forbid, but what they are able to do. The three click failovers and the two click failbacks from the cloud. So both for failback from the cloud or in the cloud. So it's really big and important use cases for our customers right now. Again, with that, we're expanding use case coverage to now, we used to support AWS only, now we also support Azure. >> Great. Okay. The third use case you talked about was in-cloud data protection. What do you mean by that and what are you doing there? >> So one of, again, the really interesting things about our portfolio is our ability to run it as an integrated hardware-software platform or in the form of a software only deployment. So our data domain virtual addition is exactly that. You can run our Data Domain software in virtual machines. And what that allows our customers to do is whether they're running a software defined data center on prem or whether they want in-cloud capabilities and all that goodness they have been getting from Data Domain in the cloud, they now can do that very easily. And what we've done in that space with this announcement is expanded our capacity coverage. So now Data Domain Virtual Edition can cover 96 terabytes of in-cloud capability and capacity. And we've also, again, with that use case, expanded our coverage to include Google Cloud, AWS, Azure. So really expanded our coverage. >> Great. I'm interested in performance as well because everybody wants more performance but are we talking about backup performance, restore performance? What are you doing in that area? >> Perfect. And one of the things, when we talk about performance, one of the big use cases we're seeing that's driving performance is that customers wanna make their backup copies do more. They wanna use it for application test and development, they wanna use it for instant access to their VMs, instant access and restores for their VMs. So performance is being fueled by some additional services that customers wanna see on their backup copies. So basically one of the things that we've done with this announcement is improved our performance across all of these use cases. So for application test of test of development, you can have access to instant VMs. Up to 32 instant access and restore capabilities with VMs. We have improved our cash utilization. So now you can basically support a lot more IOPS, leveraging our cash, enhanced cash, four times as many IOPS as we were doing before. So up to 40,000 IOPS with almost no latency. So tremendous, again, improvement in use cases. Restores. Customers are always wanting to do restores faster and faster. So file restores is no exception to that. So with multi-streaming capability, we now have the opportunity and the capabilities to do file restores two times faster on premise and four times faster from cloud. So again, cloud is a big, everything we do, there's a cloud component to it. And that performance is no exception to that. >> The last thing I wanna touch on is mid-market. So you guys made an announcement this past summer. And so it sounds like you're doubling down on that space. Give us the update. >> Sure. So we introduced the Data Domain 3300 and our customers have been asking for a new capacity point. So one of the things we're introducing with this release is an eight terabyte version of Data Domain 3300 that goes and scales up to 32 terabytes. In addition to that, we're supporting faster networking with 10 gig E support as well as virtual tape libraries over Fiber Channels. So virtual tape libraries are also back and we're supporting with Data Domain 3300. So again, tremendous improvements and capabilities that we've introduced for mid-market in the form of Data Domain 3300 as well as the DP4400 which is our integrated appliance. So, again, how do we bring all that enterprise goodness to a much broader segment of the market in the right form factor and right capacity points. >> Love it. You guys are on a nice cadence. Last summer, we had this announcement, we got Dell Technologies World coming up in May, actually end of April, now May. So looking forward to seeing you there. Thanks so much for taking us through these announcements. >> Yeah, thank you. Thanks for having us. >> You're very welcome. Now, let's go Phil Goodwin. Phil Goodwin was an analyst at IDC. And IDC has done a ton of research on the economic impact of moving to sort of modern data protection environment, they've interviewed about a thousand customers and they had deep dive interviews with about a dozen. So let's hear from Phil Goodwin in IDC and we'll be right back. (chilled music) >> IDC research shows that 60% of organizations will be executing on a digital transformaion strategy by 2020, barely a year away. The purpose of digital transformation is to make the organization more competitive with faster, more accurate information and timely information driving driving business decisions. If any digital transformation effort is to be successful, data availability must be a foundational part in the effort. Our research also shows that 48.5% or nearly half of all digital transformation projects involve improvements to the organizations data protection efforts. Purpose-built backup appliances or PBBAs have been the cornerstone for many data protection efforts. PBBAs provide faster, more reliable backup with fewer job failures than traditional tape infrastructure. More importantly, they support faster data restoration in the event of loss. Because they have very high data de-duplication rates, sometimes 40 to one or more, organizations can retain data onsite longer at a lower overall cost thereby improving data availability and TCO. PBBAs may be configured as a target device or disk-based appliance that can be used by any backup software as a backup target or as integrated appliances that include all hardware and software needed for fast efficient backups. The main customer advantages are rapid deployment, simple management and flexible growth options. The Dell EMC line of PBBAs is a broad portfolio that includes Data Domain appliances and the recently introduced Integrated Data Protection Appliances. Dell EMC Data Domain appliances have been in the PBBA market for more than 15 years. According to IDC market tracker data as of December 20th, 2018, Dell EMC with Data Domain and IDPA currently holds a 57.5% market share of PBBA appliances for both target and integrated devices. Dell EMC PBBAs have support for cloud data protection including cloud long term retention, cloud disaster recovery and protection for workloads running in the cloud. Recently IDC conducted a business value study among Dell EMC data protection customers. Our business value studies seek to identify and quantify real world customer experiences and financial impact of specific products. This study surveyed more than 1000 medium-sized organizations worldwide as well as provided in-depth interviews with a number of them. We found several highlights in the study including a 225% five-year ROI. In numerical terms, this translated to $218,928 of ROI per 100 terabytes of data per year. We also found a 50% lower cost of operating a data protection environment, a 71% faster data recovery window, 33% more frequent backups and 45% more efficient data protection staff. To learn more about IDC's business value study of Dell EMC data protection and measurable customer impact, we invite you to download the IDC white paper titled, The Business Value of Data Protection in IT Transformation sponsored by Dell EMC. (bouncy techno music) >> We're back with Beth Phalen. Beth, thanks again for helping us with this session and taking us through the news. We've heard about, from a customer, their perspective, some of the problems and challenges that they face, we heard about the hard news from Ruya. Phil Goodwin at IDC gave us a great overview of the customer research that they've done. So, lets bring it home. What are the key takeaways of today? >> First and foremost, this market is hot. It is important and it is changing rapidly. So that's number one. Data protection is a very dynamic and exciting market. Number two is, at Dell EMC, we've been modernizing our portfolio over the past three years and now we're at this exciting point where customers can take advantage of all of our strenth put in multi-cloud environment, in a commercial environment, for cyber recovery. So we've expanded where people can take the value from our portfolio. And I would just want people to know that if they haven't taken a look at the Dell EMC data protection portfolio recently, it's time to take another look. We appreciate all of our customers and what they do for us. We have such a great relationship with our customer base. We wanna make sure that they know what's coming, what's here today and how we're gonna work with them in the future. >> Alright. Well, great. Congratulations on the announcement. You guys have been hard at work. It is a hot space. A lot of action going on. Where can people find more information? >> Go back to dellemc.com, it's all there. >> Great. Well, thank you very much Beth. >> Thank you Dave. >> And thank you for watching. We'll see you next time. This is Dave Vellante from theCUBE. (chilled music)

>> Narrator: Live from the Bill Graham Auditorium in San Francisco, it's theCUBE, covering Pure Storage Accelerate, 2018, brought to you by Pure Storage. >> Welcome back to theCUBE's coverage of Pure Storage Accelerate 2018. I'm Lisa Martin. Been here all day with Dave Vellante. We're joined by David Floyer now. Guys, really interesting, very informative day. We got to talk to a lot of puritans, but also a breadth of customers, from Mercedes Formula One, to Simpson Strong-Tie to UCLA's School of Medicine. Lot of impact that data is making in a diverse set of industries. Dave, you've been sitting here, with me, all day. What are some of the key takeaways that you have from today? >> Well, Pure's winning in the marketplace. I mean, Pure said, "We're not going to bump along. "We're going to go for it. "We're going to drive growth. "We don't care if we lose money, early on." They bet that the street would reward that model, it has. Kind of a little mini Amazon, version of Amazon model. Grow, grow, grow, worry about profits down the road. They're eking out a slight, little positive free cashflow, on a non-gap basis, so that's good. And they were first with All-Flash, really kind of early on. They kind of won that game. You heard David, today. The NVMe, the first with NVMe. No uplifts on pricing for NVMe. So everybody's going to follow that. They can do the Evergreen model. The can do these things and claim these things as we were first. Of course, we know, David Floyer, you were first to make the call, back in 2008, (laughs) on Flash and the All-Flash data center, but Pure was right there with you. So they're winning in that respect. Their ecosystem is growing. But, you know, storage companies never really have this massive ecosystem that follow them. They really have to do integration. So that's, that's a good thing. So, you know, we're watching growth, we're watching continued execution. It seems like they are betting that their product portfolio, their platform, can serve a lot of different workloads. And it's going to be interesting to see if they can get to two billion, the kind of, the next milestone. They hit a billion. Can they get to two billion with the existing sort of product portfolio and roadmap, or do they have to do M&A? >> David: You're right. >> That's one thing to watch. The other is, can Pure remain independent? David, you know well, we used to have this conversation, all the time, with the likes of David Scott, at 3PAR, and the guys at Compellent, Phil Soran and company. They weren't able, Frank Slootman at Data Domain, they weren't able to stay independent. They got taken out. They weren't pricey enough for the market not to buy them. They got bought out. You know, Pure, five billion dollar market cap, that's kind of rich for somebody to absorb. So it was kind of like NetApp. NetApp got too expensive to get acquired. So, can they achieve that next milestone, two billion. Can they get to five billion. The big difference-- >> Or is there any hiccup, on the way, which will-- >> Yeah, right, exactly. Well the other thing, too, is that, you know, NetApp's market was growing, pretty substantially, at the time, even though they got hit in the dot-com boom. The overall market for Pure isn't really growing. So they have to gain share in order to get to that two billion, three billion, five billion dollar mark. >> If you break the market into the flash and non flash, then they're in the much better half of the market. That one is still growing, from that perspective. >> Well, I kind of like to look at the service end piece of it. I mean, they use this term, by Gartner, today, the something, accelerated, it's a new Gartner term, in 2018-- >> Shared Accelerated Storage >> Shared Accelerated Storage. Gartner finally came up with a category that we called service end. I've been joking all day. Gartner has a better V.P. of naming than we do. (chuckles) We're looking' at service end. I mean, I started, first talking about it, in 2009, thanks to your guidance. But that chart that you have that shows the sort of service end, which is essentially Pure, right? It's the, it's not-- >> Yes. It's a little more software than Pure is. But Pure is an awful lot of software, yes. And showing it growing, at the expense of the other segments, you know. >> David: Particularly sad. >> Particularly sad. Very particularly sad. >> So they're really well positioned, from that standpoint. And, you know, the other thing, Lisa, that was really interesting, we heard from customers today, that they switched for simplicity. Okay, not a surprise. But they were relatively unhappy with some of their existing suppliers. >> Right. >> They got kind of crummy service from some of their existing suppliers. >> Right. >> Now these are, maybe, smaller companies. One customer called out SimpliVity, specifically. He said, "I loved 'em when they were an independent company, "now they're part of HPE, meh, "I don't get service like the way I used to." So, that's a sort of a warning sign and a concern. Maybe their, you know, HPE's prioritizing the bigger customers, maybe the more profitable customers, but that can come back to bite you. >> Lisa: Right. >> So Pure, the point is, Pure has the luxury of being able to lose money, service, like crazy, those customers that might not be as profitable, and grow from it's position of a smaller company, on up. >> Yeah, besides the Evergreen model and the simplicity being, resoundingly, drivers and benefits, that customers across, you know, from Formula One to medical schools, are having, you're right. The independence that Pure has currently is a selling factor for them. And it's also probably a big factor in retention. I mean, they've got a Net Promoter Score of over 83, which is extremely high. >> It's fantastic, isn't it? I think there would be VMI, that I know of, has even higher one, but it's a very, very high score. >> It's very high. They added 300 new customers, last quarter alone, bringing their global customer count to over 4800. And that was a resounding benefit that we were hearing. They, no matter how small, if it's Mercedes Formula One or the Department of Revenue in Mississippi, they all feel important. They feel like they're supported. And that's really key for driving something like a Net Promoter Score. >> Pure had definitely benefited from, it's taken share from EMC. It did early on with VMAX and Symmetrix and VNX. We've seen Dell EMC storage business, you know, decline. It probably has hit bottom, maybe it starts to grow again. When it starts to grow again, I think, even last quarter, it's growth, in dollars, was probably the size of Pure. (chuckles) You know, so, but Pure has definitely benefited from stealing share. The flip side of all this, is when you talk to you know, the CxOs, the big customers, they're doing these big digital transformations. They're not buying products, you know, they're buying transformations. They're buying sets of services. They're buying relationships, and big companies like Dell and IBM and HPE, who have large services arms, can vie for certain business that Pure, necessarily, can't. So, they've got the advantage of being smaller, nimbler, best of breed product, but they don't have this huge portfolio of capabilities that gives them a seat at the CxO table. And you saw that, today. Charlie Giancarlo, his talk, he's a techie. The guys here, Kicks, Hat, they're techies. They're hardcore storage guys. They love storage. It reminds me of the early days of EMC, you know, it's-- >> David: Or NetApp. Yeah. Yeah, or NetApp, right. They're really focused on that. So there's plenty of market for them, right now. But I wonder, David, if you could talk about, sort of architecturally, people used to criticize the two controller, you know, approach. It obviously seems to be doing very well. People take shots at their, the Evergreen model, saying "Oh, we can do that too." But, again, Pure was first. Architecturally, what's your assessment of Pure? >> So, the Evergreen, I think, is excellent. They've gone about that, well. I think, from a straighforward architecture, they kept it very simple. They made a couple of slightly, odd decisions. They went with their own NAND chips, putting them into their own stuff, which made them much smaller, much more compact, completely in charge of the storage stack. And that was a very important choice they made, and it's come out well for them. I have a feeling. My own view is that M.2 is actually going to be the form factor of the future, not the SSD. The Ssd just fitted into a hard disk slot. That was it's only benefit. So, when that comes along, and the NAND vendors want to increase the value that they get from these stacks, etc., I'm a little bit nervous about that. But, having said that, they can convert back. >> Yeah, I mean, that seems like something they could respond to, right? >> Yeah, absolutely. >> I was at the Micron financial analysts' meeting, this week. And a lot of people were expecting that, you know, the memory business has always been very cyclical, it's like the disk drive business. But, it looks like, because of the huge capital expenses required, it looks like supply, looks like they've got a good handle on supply. Micron made a good strong case to the street that, you know, the pricing is probably going to stay pretty favorable for them. So, I don't know what your thoughts are on that, but that could be a little bit of a head wind for some of the systems suppliers. >> I take that with a pinch of salt. They always want to have the market saying it's not going to go down. >> Of course, yeah. And then it crashes. (chuckles) >> The normal market place is, for any of that, is go through this series of S-curves, as you reach a certain point of volume, and 3D NAND has reached that point, that it will go down, inevitably, and then cue comes in,and then that there will go down, again, through that curve. So, I don't see the marketplace changes. I also think that there's plenty of room in the marketplace for enterprise, because the biggest majority of NAND production is for consumer, 80% goes to consumer. So there's plenty of space, in the marketplace, for enterprise to grow. >> But clearly, the prices have not come down as fast as expected because of supply constraints And the way in which companies like Pure have competed with spinning disks, go through excellent data reduction algorithms, right? >> Yes. >> So, at one point, you had predicted there would be a crossover between the cost per bit of flash and spinning disk. Has that crossover occurred, or-- >> Well, I added in the concept of sharing. >> Raw. >> Yeah, raw. But, added in the cost of sharing, the cost-benefit of sharing, and one of the things that really impresses me is their focus on sharing, which is to be able to share that data, for multiple workloads, in one place. And that's excellent technology, they have. And they're extending that from snapshots to cloud snaps, as well. >> Right. >> And I understand that benefit, but from a pure cost per bit standpoint, the crossover hasn't occurred? >> Oh no. No, they're never going to. I don't think they'll ever get to that. The second that happens, disks will just disappear, completely. >> Gosh, guys, I wish we had more time to wrap things up, but thanks, so much, Dave, for joining me all day-- >> Pleasure, Lisa. >> And sporting The Who to my Prince symbol. >> Awesome. >> David, thanks for joining us in the wrap. We appreciate you watching theCUBE, from Pure Storage Accelerate, 2018. I'm Lisa Martin, for Dave and David, thanks for watching.

>> Narrator: Live, from the Bill Graham Auditorium in San Francisco, it's theCUBE! Covering, Pure Storage Accelerate, 2018! Brought to you by: Pure Storage. (upbeat electronic music) >> Welcome back to theCUBE, we are live at Pure Storage Accelerate 2018. I am Lisa Martin, supporting the Prince look today. We're at the Bill Graham Civic Auditorium, this is a super cool building, 1915 it was built, and is the home of so many cool artists, so got to represent today. Dave Vellante's my co-host for the day. >> Well, I got to tell you, Charlie, thank you for wearing a tie. >> Yeah, well-- >> My tie's coming off. >> Okay, well, hey, look, you and me both. >> You have to wear yours-- >> Well, I do, I still have investors later. >> I'm not the only one who's representing musicians today. >> I got my tee shirt underneath here, all right. >> Oh, oh oh! >> Ladies and gentlemen, you will not want to miss this. >> Bill Graham, right, I'm on a Who, Lisa. >> "I'm on a Who", oh he said The Who! >> The Who! >> We got Roger Daltrey-- >> Charlie: Oh, that's fantastic. >> (laughing) >> Pete Townshend-- >> The Who! >> That's my deal. >> He's being so careful not to ruin his shirt with the buttons. >> The Who. >> I got to say-- >> Well done. >> Tower of Power was really my band. >> Oh, wow. >> They didn't play here, but Bill Graham was the first to sign him. >> Wow, representing. >> Well, I was an East Coast boy, so it was all the New York concerts and venues for me, but it was fantastic, I used to watch, you remember, Bill Graham presents? That was-- >> Yes! >> Yeah! >> I always thought if I found myself on stage, there'd be a couple of security guys dragging me off. >> Love that line! >> Nobody today, and you got a lot of applause, a lot of confetti. So Charlie, kick things off this morning at the Third Annual Accelerate, packed house, orange as far as the eye can see, but just a couple days ago-- >> Sea of orange. >> Exactly, sea of orange, a proud sea of orange. >> Right. >> Just two days ago, on the 21st of May, you guys announced your fiscal 19 first quarter results. Revenue up 40%, year over year, you added 300 new customers, including the U.S. Department of Energy, Paige.ai, and the really amazing transformational things they're doing for cancer research. You also shared today your NPS score: over 83! >> Correct. >> Big numbers shared today. >> These are big numbers. >> You've been the CEO for about nine months or so now, tell us what's going on, how are you sustaining this? Stocks going up? >> Right, right, stock's up about 80% year over year right now, so that's very good, but really I think it's a recognition that Pure is playing a very important role in the data processing, in the high-tech landscape, right? I think, you know, storage was really, I think up until now, really viewed as maybe an aging technology, something that was becoming commoditized, something where innovation wasn't really important, and Pure was the one company that actually thought that storage was important. As I mention in my keynote talk, you know, I really view technology as being a three-legged stool. That is, it's comprised as three elements: compute, networking, and storage. If any of one of them falls behind, you know, it becomes unbalanced, and frankly, you know, computers has advanced 10X over the last 10 years, networking has advanced more than 10X over the last 10 years, and storage didn't keep up at the same time that data was exploding, right? Pure is the one company that actually believes that there's real innovation to be had in storage. Paige.ai is a great example of that, I know it tugs on all of our heartstrings, but Paige.ai took lots of analog data, what was it, we're talking about cancer samples that were on slides, okay, they took literally millions of samples, digitized it, and fed it into an AI machine learning engine. Now, if you understand the way machine learning operates, it has to practice on thousands, or actually tens of thousands, millions, of samples. It could take all year, or it can take hours. What you want it to do is take minutes or hours, and if the data can't be fed fast enough into that engine, you know, it's going to take all year. You want your cancer pathology to be analyzed, you know, really quickly. >> Immediately. >> Immediately, right? That's what this engine can do, and it can do it because we can feed the data at it fast, at the rate it needs to be able to analyze that cancer. Data is just becoming the core of every company's business, it's becoming, if you will, the currency, it's becoming the gold mine, where companies now want to analyze their data. Right now, only about a half of 1% of the data that companies have can even be analyzed, because it's being kept in cold storage, and at Pure, we believe in no cold storage, you know, it's all got to be hot, it's all got to be available, able to be analyzed, able to be mined. >> Do you think, I got to ask you this, do you think that percentage will rise faster than the amount of data that's going to be created? Especially when you're thinking things at the edge. >> It's a great question, and I think absolutely! The reason is because it's not only the data that's being generated, or saved now, that's important. If you really want to analyze trends and get to know your customers, you know, the last five years, the last 10 years of data, is just as important. Increasingly, I think you may know this just from online banking, right, it used to be that maybe you'd have last month's checks available to you, but now you want to go back a year, you want to go back five years, and see, you know, you get audited by the IRS, they say: "Well, prove to us you did this," you need to find those checks and banks are being expected to have that information available to you. >> I got to ask you, you're what we call a tech-athlete, you were showing your tech-chops on stage, former CTO, but you've been a CEO, a board member of many prominent companies, why, Charlie, did you choose to come back in an operating role? You know, why at Pure, and why in an operating role? >> You know, I love being part of a team, it's really that. You know, I've had great fun throughout my career, but being part of a team that is focused on innovation, and is enabling, you know, not just our industry but frankly, allowing the world's business to do a better job. I mean, that's what gets me thrilled. I like working with customers every day, with our sales people, with our engineers. It's just a thrilling life! >> You did say in your keynote this morning that you leave the office, at the end of the day, with a smile, and you get to the office in the morning with a smile, that's pretty cool. >> I do, and if you asked my wife she'd tell you the same thing right, so I really enjoy being part of the team. >> Dave: So, oh, go ahead, please >> Oh, thank you sir. One of the things that Pure has done well is: partners, partnerships. We're going to be talking with NVIDIA later today, so this is going to be on, you guys just announced the new AIRI mini, and I was just telling Dave: I need to see that box, cause it looks pretty blinged out on the website. Talk to us about, though, what you guys are doing with your partnerships and how you've seen that really be represented in the successes of your customers. >> Right, well there are several different types of partnerships that we could talk about. First of all, we're 100% channel lead in our organization. We believe in the channel. You know, this is ancient history now, but when I arrived at Cisco, they were 100% direct at that time, no partners whatsoever. >> Belly to belly. >> Belly to belly, and I was very much apart of driving Cisco to be 100% partner over that period of time. So, you know, my history and belief in utilizing a channel to go to market is very well known, and my view is: the more we make our partners successful, the more we make our customers successful, the more successful we will be. But then, there are other types of partnerships as well. There are technology partnerships, like what we have with Cisco and NVIDIA, and again, we need to do more with other companies to make the solutions that we jointly provide, easier for our customers to be able to use. Then, there are system integration partners, because, let's face it, with as much technology as we build, customers often need help from experts of system integrators, to be able to pull that all together, to solve their business problems. Again, the more we can work with these system integrators, have them understand our products, train them to use them better, the better off our customers will be. >> Charlie, Pure has redefined, in my opinion, escape velocity in the storage business, it used to be getting to public, you saw that with 3PAR, Compel, Isilon, Data Domain, you guys are the first storage to hit one billion dollars since NetApp-- >> Right, 20 years ago. >> Awesome milestone, I didn't think it was possible eight years ago, to be honest, so now, okay, what's next? Can you remain an independent company? In order to remain independent, you got to grow, NetApp got to five billion in a faster growing market, you guys got to gain-share, how do you continue to do that? >> Well, you're right, each and every day we have to compete. We have to, you know, kill for what we eat. Our European sales lead calls it, our competition, on an account basis, a: knife fight in a phone booth. So the competition is tough out there, but we are bringing innovations to market, and more importantly, we're investing in the technology at a rate that I think our competitors are not going to be able to keep up with. We invest close to 20% of our revenue every year in R&D. Our competitors are in single-digits, okay, and this is a technology business, you know, eventually, if you don't keep up with the technology, you're going to lose, and so, that I think is going to allow us to continue growing and scaling. You're right, growth is important for us to be able to stay independent, but I looked very deeply at the entire industry before joining, and you know, I was in private equity for awhile, so we know how to analyze an industry, right? My view was that all of the other competitors are either no longer investing, and that's either internally, or in terms of large acquisitions, or they've already made their beds, and so I didn't really see a likely acquirer for Pure, and that was going to give us, if you will, the breathing room to be able to grow to a scale where we can continue to be independent. >> Almost by necessity! >> Almost by necessity, yeah. >> It's good to put the pressure on yourselves. >> So, in terms of where you are now, how is Pure positioned to lead storage growth in infrastructure for AI-based apps? There's this explosion of AI, right, fueled by deep-learning, and GPUs, and big data. How are you positioned to lead this charge is storage growth there? >> That's such a great question, you know, to get to the part of, you know, I started hearing about AI when I graduated college, which is a really long time ago now, and yet why is it exploding now? Well, computing has done its job, right, we're here today with NVIDIA, with GPUs that are just, you know, we're talking about, you know, giga-flops, you know, just incredible speeds of compute. Networking has done its job, we're now at 100 gigabits, and we're starting to talk about 400 gigabit per second networks, and storage hadn't kept up, right, even though data is exploding. So, we announced today, as you know, our data-centric architecture, and we believe this is an architecture that really sets our customers' data free. It sets it free in many ways. One of which, it allows it to always be hot, at a price that customers can afford, not only can afford, it's cheaper than what they're doing today, because we're collapsing tiers. No longer a hot tier, warm tier, cold tier, it's all one tier that can serve many, many needs at the same time, and so all of your applications can get access to real-time data, and access it simultaneously with the other applications, and we make sure that they get the quality of service they need, and we protect the data from being, you know, either corrupted or changed when other applications want it to be the same. So, we do what is necessary now, to allow the data to be analyzed for whether it's analytics, or AI, or machine learning, or simply to allow DEV-ops to be able to operate on real-time data, on live data, you know, without upsetting the operation's environment. >> I want to make sure I understand this, so you're democratizing tiering, essentially-- >> Charlie: Democratizing tiering. >> So how do you deal with, you know, different densities, QLC, et cetera, is that through software, is that? >> Well, so we hide that from the customer, right, so we're able to take advantage of the latest storage because we speak directly to the storage chips themselves. All of our competitors use what are called SSDs, solid state drives. Now, think about that for a moment. There's no drive in a solid state drive, these things are designed to allow Flash to mimic hard disk, but hard disk has all these disadvantages, why do you want Flash to mimic hard disk? We also set Flash free. We're able to use Flash in parallel, okay, we're able to take low quality Flash and make it look like high quality Flash, because our software adapts to whatever the specific characteristics of the flash are. So we have this whole layer of software that does nothing other than allow Flash to provide the best possible performance characteristics that Flash can provide. It allows us to mix and match, and completely hide that from the customer. >> With MVME, you're taking steps to eliminate what I call: the horrible storage stack. >> Charlie: That's exactly right. >> So, you talked earlier about the disparity between storage and the other two legs of the stool, so as you attack that bottle neck, what's the new bottle neck? Is it networking, and do you see that shaking out? >> It's a great question, I think the new bottle neck, I would actually put it at a higher layer, it's the orchestration layer that allows all this stuff to work together, in a way that requires less human interaction. There are great new technologies on the horizon, you know, Kubernetes, and Spark, and Kafka, a variety of others that will allow us to create a cloud environment, if you will, both for the applications and for the data, within private enterprises, similar to what they can get in the cloud, in many cases. >> You also talked about, innovation, and I want to ask you about the innovation equation, as both a technologist and a CEO who talks to a lot of other CEOS. We see innovation as coming from data, and the application of machine intelligence on that data, and cloud economics at scale, do you buy that? And where do you guys fit in that? >> We do buy that, although cloud economics, we believe, that we can create an environment where customers and their private data centers can also get cloud economics, and in fact, if you look at cloud economics, they're very good for some workloads, not necessarily good for other workloads. They're good at low scale, but not initially good at high scale. So, how do we allow customers to be able to easily move workloads between these different environments, depending on what their specific needs are, and that's what we view as our job, but also point something else out as well. About 30% of our sales are in the cloud providers themselves. They're in softwares that service, infrastructures that service, platforms as a service. These vendors are using our systems, so as you can see, we are already designed for cloud economics. We also already get to see how these leading-edge, very high scale customers construct their environments, and then we're able to bring that into the enterprise environment as well. >> I mean, I think we buy that. You're an arm's dealer to the cloud, you know, maybe not the tier zero to use that term, which is, but also, you're helping your On-Prem customers bring the cloud operating model to their data, cause they can't just stuff it into the cloud. >> It won't always be the right solution for everyone, now, it'll be the right solution for many, and we're doing more and more to allow the customers to bridge that, but we think that it's a multi-cloud environment, including private data centers, and we want to create as much flexibility as we can. >> Would you say Pure is going to be an enabler of companies being able to analyze way more than a half a percent of their data? >> If we don't do that, then there's no good reason for us to be in business. That is exactly what we're focused on. >> Last question for you Charlie, you've been the CEO about nine months now; cultural observations of Pure Storage? >> Oh, you know, you've seen the sea of orange that's here, and by the way, the orange is being sported not just by Puritans, not just by our employees, but by our partners and our customers as well. It's a bit infections, I have to be honest, I had one piece of orange clothing when I started this job, and you know, my mother's into it, she's sending me orange, you know, all sorts of orange clothing, some of which I'll wear, some of which I won't. My wife, everyone, there's a lot of enthusiasm about this business, it has a bit of a cult-like following, and Puritans are really very, very dedicated, not just to the customer, I mean, people become dedicated, you know, not to an entity, they become dedicated to a cause, and the cause for Pure is really to make our customers successful, and our employees feel that it's what drives them every day, it's what brings them to work, and hopefully it's what puts a smile on their face when they go home at night. >> Charlie Giancarlo, CEO of Pure Storage, thanks so much for joining us on theCUBE today! >> Thank you, thank you. >> For The Who Vallante, I'm Prince Martin, and we are live at Pure Accelerate 2018, in San Francisco, stick around, Who and I will be right back. (upbeat electronic music)

>> Announcer: Live from the Bill Graham Auditorium in San Francisco, it's theCUBE covering Pure Storage Accelerate 2018, brought to you by Pure Storage. (bright music) >> Welcome to theCUBE. We are live at Pure Storage Accelerate 2018. I'm Lisa Martin also known as Prince for today with Dave Vellante. We're at the Bill Graham Civic Auditorium, really cool, unique venue. Dave, you've been following Pure for a long time. Today's May 23rd, they just announced FY19 Q1 earnings a couple days ago. Revenue up 40% year over year, added 300 new customers this last quarter including the Department of Energy, Paige.ai, bringing their customer tally now up to about 4800. We just came from the keynote. What are some of the things that you've observed over the last few years of following Pure that excite you about today? >> Well Lisa, Pure's always been a company that is trying to differentiate itself from the pack, the pack largely being EMC at the time. And what Pure talked about today, Matt Kixmoeller talked about, that in 2009, if you go back there, Fusion-io was all the rage, and they were going after the tip of the pyramid, and everybody saw flash, as he said, his words, as the tip of the pyramid. Now of course back then David Floyer in 2008 called that flash was going to change the world, that is was going to dominate. He'd forecast that flash was going to be cheaper than disk over the long term, and that is playing out in many market segments. So he was one of the few that didn't fall into that trap. But the point is that Pure has always said, "We're going to make flash cheaper than "or as cheap as spinning disk, "and we're going to drive performance, "and we're going to differentiate from the market, "and we're going to be first." And you heard that today with this company. This company is accelerated to a billion dollars, the first company to hit a billion dollars since NetApp. Eight years ago I questioned if any company would do that. If you look at the companies that exited the storage market, that entered and exited the storage market that supposedly hit escape velocity, 10 years ago it was 3PAR hit $250 million. Isilon, Data Domain, Compellent, these companies sold for between $1 and $2.5 billion. None of them hit a billion dollars. Pure is the first to do that. Nutanix, which is really not a storage company, they're hyper-converged infrastructure, they got networking and compute, sort of, hit a billion, but Pure is the the first pure play, no pun intended, storage company to do that. They've got a $5 billion evaluation. They're growing, as you said, at 40% a year. They just announced their earnings they beat. But the street reacted poorly because it interpreted their guidance as lower. Now Pure will say that we know we raised (laughs) our guidance, but they're lowering the guidance in terms of growth rates. So that freaks the street out. I personally think it's pure conservativism and I think that they'll continue to beat those expectations so the stock's going to take a hit. They say, "Okay, if you want to guide lower growth, "you're going to take the hit," and I think that's smart play by Pure because if and when they beat they'll get that updraft. But so that's what you saw today. They're finally free cash flow positive. They've got about a billion dollars in cash on the balance sheet. Now half a billion of that was from a convertible note that they just did, so it's really not coming from a ton of free cash flow, but they've hit that milestone. Now the last point I want to make, Lisa, and we talked about this, is Pure Storage at growing at 40% a year, it's like Amazon can grow even though they make small profit. The stock price keeps going up. Pure has experienced that. You're certainly seeing that with companies like Workday, certainly Salesforce and its ascendancy, ServiceNow and its ascendancy. These companies are all about growth. The street is rewarding growth. Very hard for a company like IBM or HPE or EMC when it was public, when they're not growing to actually have the stock price continue to rise even though they're throwing off way more cash than a company like Pure. >> Also today we saw for the first time the new CEO's been Charlie Giancarlo, been the CEO since August of 2017, sort of did a little introduction to himself, and they talked about going all in on shared accelerated storage, this category that Gartner's created. Big, big focus there. >> Yeah, so it's interesting. When I look at so-called shared accelerated storage it's 2018, Gartner finally came up with a new category. Again, I got to give credit to the Wikibon guys. I think David Floyer in 2009 created the category. He called it Server SAN. You don't know if that's David, but I think maybe shared accelerated storage's a better name. Maybe Gartner has a better V.P. of Naming than they do at Wikibon, but he forecast this notion of Server SAN which really it's not DAS, it's not SAN, it's this new class of accelerated storage that's flash-based, that's NVMe-based, eliminates the horrible storage stack. It's exactly what Pure was talking about. Again, Floyer forecast that in 2009, and if you look at the charts that he produced back then it looks like you see the market like this going shoom, the existing market and the new market just exploding. So Pure, I think, is right on. They're targeting that wide market. Now what they announced today is this notion of their flash array for all workloads, bringing NVMe to virtually their entire portfolio. So they're aiming their platform at the big market. Remember, Pure's ascendancy to a billion really came at the expense of EMC's VMAX and VNX business. They aimed at that and they hit it hard. They positioned flash relative to EMC's either spinning disk or flash-based systems as better, easier, cheaper, et cetera, et cetera, and they won that battle even though they were small. Pure's a billion, EMC at the time was $23, $24 billion, but they gained share very rapidly when you see the numbers. So what they're doing is basically staking a claim, Lisa, saying, "We can point our platform "at the entire $30, $40, $50 billion storage TAM," and their intention, we're going to ask Charlie Giancarlo and company, their aspiration is to really continue to gain share in that marketplace and grow significantly faster than the overall market. >> So they also talked about the data-centric architecture today and gave some great examples of customers. I loved the Domino's Pizza example that they talked about, I think he was here last year, and how they're actually using AI at Domino's to analyze the phone calls using this AI engine to identify accurate order information and get you your pizza as quickly as you want. So not only do we have pizza but we were showered with confetti. Lot of momentum there. What is your opinion of Pure, what they're doing to enable companies to utilize and maximize AI-based applications with this data-centric architecture? >> So Pure started in the what's called block storage, really going after the high-volume, the transaction OLTP business. In the early days of Pure you'd see them at Oracle OpenWorld. That's where the high-volume transactions are taking place. They were the first really, by my recollection, to do file-based flash storage. Back in the day it was you would buy EMC for a block, you'd buy NetApp for file. What Pure did is said, "Okay, let's go after "the biggest market player, EMC, "which we'll gain share there in block, "and then now let's go after NetApp space and file." They were again the first to do that. And now they're extending that to AI. Now AI is a small but growing market, so they want to be the infrastructure for artificial intelligence and machine intelligence. They've struck a partnership with Nvidia, they're using the example of Domino's. It's clearly not a majority of their business today, but they're doing some clever things in marketing, getting ahead of the game. This is Pure's game. Be first, get out in the lead, market it hard, and then let everybody else look like they're following which essentially they are and then claim leadership position. So they are able to punch above their weight class by doing that, and that's what you're seeing with the Domino's example. >> You think they're setting the bar? >> Do I think they're setting the bar? Yeah, in many respects they are because they are forcing these larger incumbents to respond and react because they're in virtually all accounts now. The IT practitioners, they look at the Gartner Magic Quadrant, who's in the upper right, I got to call them in for the RFP. They get a seat at that table. I would say it was interesting hearing Charlie speak today and the rest of the executives. These guys are hardcore storage geeks, and I mean that with all due respect. They love storage. It kind of reminds me of the early days of EMC. They are into this stuff. Their messaging is really toward that storage practitioner, that administrator. They're below the line but those are the guys that are actually making the decisions and affecting transactions. They're touching above the line with AI messages and data growth and things like that, but it's really not a hardcore CIO, CFO, CEO message yet. I think that will come later. They see a big enough market selling to those IT practitioners. So I think they are setting the bar in that IT space, I do. >> One of the things I thought that they did well is kind of position the power of data where, you know people talk about data as fuel. Data's really a business catalyst that needs to be analyzed across multiple areas of a business simultaneously to really be able to extract value. They talked about the gold rush, oh gee, of 1849 and now kind of in this new gold rush enabling IT with the tools. And interestingly they also talked about a survey that they did with the SEE Suite who really believe that analyzing data is going to be key to driving businesses forward, identifying new business models, new products, new services. Conversely, IT concern do we have the right tools to actually be able to evaluate all of these data to extract the value from it? Because if you can't extract the value from the data, is it, it's not useful. >> Yeah, and I think again, I mean to, we give Pure great marketing, and a lot of what they're doing, (laughs) it's technology, it's off-the-shelf technology, it's open source components. So what's their differentiation? Their differentiation is clearly their software. Pure has done a great job of simplifying the experience for the customer, no question, much in the same way that 3PAR did 10 or 15 years ago. They've clearly set the bar on simplicity, so check. The other piece that they've done really well is marketing, and marketing is how companies differentiate (laughs) today. There's no question about it that they've done a great job of that. Now having said that I don't think, Lisa, that storage, I think storage is going to be table stakes for AI. Storage infrastructure for AI is going to have to be there, and they talked about the gold rush of 1849. The guys who made all the money were the guys with the picks and the axes and the shovels supplying them, and that's really what Pure Storage is. They're a infrastructure company. They're providing the pickaxes and the shovels and the basic tools to build on top of that AI infrastructure. But the real challenges of AI are where do I apply and how do I infuse it into applications, how do I get ROI, and then how do I actually have a data model where I can apply machine intelligence and how do I get the skillsets applied to that data? So is Pure playing a fundamental catalyst to that? Yes, in the sense that I need good, fast, reliable, simple-to-use storage so that I don't have to waste a bunch of time provisioning LUNs and doing all kinds of heavy lifting that's nondifferentiated. But I do see that as table stakes in the AI game, but that's the game that Pure has to play. They are an infrastructure company. They're not shy about it, and it's a great business for them because it's a huge market where they're gaining share. >> Partners are also key for them. There's a global partner summit going on. We're going to be speaking, you mentioned Nvidia. We're going to be talking with them. They also announced the AIRI Mini today. I got to get a look at that box. It looks pretty blinged out. (laughing) So we're going to be having conversations with partners from Nvidia, from Cisco as well, and they have a really diverse customer base. We've got Mercedes-AMG Petronas Motorsport Formula One, we've got UCLA on the CIO of UCLA Medicine. So that diversity is really interesting to see how data is being, value, rather, from data is being extracted and applied to solve so many different challenges whether it's hitting a race car around a track at 200 kilometers an hour to being able to extract value out of data to advance health care. They talked about Paige.ai, a new customer that they added in Q1 of FY19 who was able to take analog cancer pathology looking at slides and digitize that to advance cancer research. So a really cool kind of variety of use cases we're going to see on this show today. >> Yeah, I think, so a couple thoughts there. One is this, again I keep coming back to Pure's marketing. When you talk to customers, they cite, as I said before, the simplicity. Pure's also done a really clever thing and not a trivial thing with regard to their Evergreen model. So what that means is you can add capacity and upgrade your software and move to the next generation nondisruptively. Why is this a big deal? For decades you would have to actually shut down the storage array, have planned downtime to do an upgrade. It was a disaster for the business. Oftentimes it turned into a disaster because you couldn't really test or if you didn't test properly and then you tried to go live you would actually lose application availability or worse, you'd lose data. So Pure solved that problem with its Evergreen model and its software capability. So its simplicity, the Evergreen model. Now the reality is typically you don't have to bring in new controllers but you probably should to upgrade the power, so there are some nuances there. If you're mixing and matching different types of devices in terms of protocols there's not really tiering, so there's some nuances there. But again it's both great marketing and it simplifies the customer experience to know that I can go back to serial number 00001 and actually have an Evergreen upgrade is very compelling for customers. And again Pure was one of the first if not the first to put that stake in the ground. Here's how I know it's working, because their competitors all complain about it. When the competitors are complaining, "Wow, Pure Storage, they're just doing X, Y, and Z, "and we can do that too," and it's like, "Hey, look at me, look at me! "I do that too!" And Pure tends to get out in front so that they can point and say, "That's everybody following us, we're the leader." And that resonates with customers. >> It does, in fact. And before we wrap things up here a lot of the customer use cases that I read in prepping for this show all talked about this simplicity, how it simplified the portability, the Evergreen model, to make things much easier to eliminate downtime so that the business can keep running as expected. So we have a variety of use cases, a variety of Puritans on the program today as well as partners who are going to be probably articulating that value. >> You know what, I really didn't address the partner issue. Again, having a platform that's API-friendly, that's simple makes it easier to bring in partners, to integrate into new environments. We heard today about integration with Red Hat. I think they took AIRI. I think Cisco's a part of that partnership. Obviously the Nvidia stuff which was kind of rushed together at the last minute and had got it in before the big Nvidia customer show, but they, again, they were the first. Really made competitors mad. "Oh, we can do that too, it's no big deal." Well, it is a big deal from the standpoint of Pure was first, right? There's value in being first and from a standpoint of brand and mindshare. And if it's easier for you to integrate with partners like Cisco and other go-to-market partners like the backup guys you see, Cohesity and Veeam and guys like Catalogic are here. If it's easier to integrate you're going to have more integration partners and the go-to-market is going to be more facile, and that's where a lot of the friction is today, especially in the channel. >> The last thing I'll end with is we got a rain of confetti on us during the main general session today. The culture of Pure is one that is pervasive. You feel it when you walk into a Pure event. The Puritans are very proud of what they've done, of how they're enabling so many, 4800+ customers globally, to really transform their businesses. And that's one of the things that I think is cool about this event, is not just the plethora of orange everywhere but the value and the pride in the value of what they're delivering to their customers. >> Yeah, I think you're right. It is orange everywhere, they're fun. It's a fun company, and as I say they're alpha geeks when it comes to storage. And they love to be first. They're in your face. The confetti came down and the big firecracker boom when they announced that NVMe was going to be available across the board for zero incremental cost. Normally you would expect it to be a 15 to 20% premium. Again, a first that Pure Storage is laying down the gauntlet. They're setting the bar and saying hey guys, we're going to "give" this value away. You're going to have to respond. Everybody will respond. Again, this is great marketing by Pure because they're >> Shock and awe. going to do it and everybody's going to follow suit and they're going to say, "See, we were first. "Everybody's following, we're the leader. "Buy from us," very smart. >> There's that buy. Another first, this is the first time I have actually been given an outfit to wear by a vendor. I'm the symbol of Prince today. I won't reveal who you are underneath that Superman... >> Okay. >> Exterior. Stick around, you won't want to miss the reveal of the concert tee that Dave is wearing. >> Dave: Very apropos of course for Bill Graham auditorium. >> Exactly, we both said it was very hard to choose which we got a list of to pick from and it was very hard to choose, but I'm happy to represent Prince today. So stick around, Dave and I are going to be here all day talking with Puritans from Charlie Giancarlo, David Hatfield. We've also got partners from Cisco, from Nvidia, and a whole bunch of great customer stories. We're going to be right back with our first guest from the Mercedes-AMG Petronas Motorsport F1 team. I'm Lisa "Prince" Martin, Dave Vellante. We'll be here all day, Pure Storage Accelerate. (bright music)

(upbeat electronic music) >> Announcer: Live from Las Vegas, it's theCUBE, covering ServiceNow Knowledge 2018. Brought to you by ServiceNow. (crowd chattering) >> Hello everybody and welcome to theCUBE's live coverage of ServiceNow. We are here in Las Vegas, Nevada at The Venetian. I'm your host, Rebecca Knight. Co-hosting with Dave Vellante and Jeff Frick. It's great to be here with you-- >> Hey, Rebecca. >> doing the show. >> Busy week. >> Very busy week and we are only-- >> Busy month. (laughs) >> And it's only day one. So we just heard John Donahoe who is the new CEO, he's been CEO for a year, he was at eBay for a decade. He got up on stage and he said, "When I came "to this job I could barely spell IT." But I want to talk to you first, Dave, and say how's John doing, how's the company doing? What's your take on this? >> Well, the company's doing great. It's the fastest growing software company over a billion dollars. It's got consistent growth. 35-40% growth each quarter, year over year. It's growing sequentially, it's throwing off, it's free cash flow is actually growing faster than it's revenue, which is quite impressive. Company's got a 29 billion dollar market cap. Couple years ago ServiceNow, when Frank Slootman was running the company said, we're going to put the stake in the ground and we're going to be a four billion dollar company, I think this company's going to do four billion dollars in its sleep. I think the next milestone is how they get to 10 billion. And beyond that, how they get to 15 billion, how they take their market value from where it is today in the high 20's, low 30's, up to 100 billion. This company wants to be the next great enterprise software company. Basically automating manual tasks you wouldn't think there's that many manual left, but when you think about whether it's scheduling meetings, or scheduling travel or keeping track of medical leave, and all this other stuff that's manual, they want to automate that process. >> Right, exactly, that's what he talked, the tagline this year and really for the brand identity is making more work work better for people. He said that people are at the heart of this brand. Jeff, does this strike you as a new idea? Is this going to work for ServiceNow? >> It's not really a new idea but their kind of changing their shift. It's interesting when we saw Frank Slootman on he was always, the IT guys are my homies, right? He was very specifically focused on going after IT. And Fred's great kind of early intro was, remember the copier room with all the colored pieces of paper. (Rebecca laughs) Vacation requests, new laptop request, etc. How does he make that automated. And more importantly how does he let the people responsible for that be able to code and build a workflow. So I think the vision is consistent, they're obviously expanding beyond just, the IT are my homies, 'cause it's still ultimately workflow. And I think at the end of the day it's competition for how do you work. What screen or what app is on your screen as you go through your day to day workflow. And they're obviously trying to grab more of those processes so that you're doing them inside of ServiceNow versus one of the many other applications that you might be trying to do. >> Just to follow up on that, when Jeff and I first started covering this show it was 2013, less than 5% of ServiceNow's business was outside of the IT department. Today it's about 35% is outside the IT department. So they have their strategy of, they call it, land and expand. Christian Chabot from Tableau I think was the first I heard use that term. These guys are executing on that. Starting with IT and then moving into HR, moving into maybe facilities, moving into marketing, other parts of the organization, customer service management, security, I don't know if they count that as IT, but cohort businesses. So if you look at their financials their up-selling is phenomenal. Huge percentage of their business comes from existing customers. If you look at the anatomy of a typical ServiceNow customer, they might start with a 50 or 75 thousand dollar deal. That quickly jumps to a multi-hundred thousand dollar deal, then up to a multi-million dollar deal. And then up into the high eight figures. So it's really a tremendous story and the reason is, and Jeff you and I have talked about this a lot, is because when Fred Luddy started the company he developed a platform. He took that platform to the venture capital community and they said well what do you do with this? He said you can do anything with it. They said, yeah, get out. So he said all right I'm going to write an app. He worked at Peregrine so he wrote and IT service management app. And when ServiceNow went public, I remember Gartner Group came out and said, eh, it's a tiny little market, help desk is a dying market, flat, billion dollar TAM. Well this company's TAM, it's almost immeasurable. I mean it's, the TAM is literally in the half a trillion dollars in my view. I mean it's enormous. >> It's workflow, right, so again it's just that competition for the screen. And as everyone goes from their specialty and tries to expand, right? Sales force is trying to expand more into marketing. You've got Zendesk and other kinds of help desk platforms that are trying to get into more workflow. What they were smart is they went into IT 'cause IT controls the applications that are in shop. And so to use that as a basis, and IT touches whether it's an HR process where I need to get the person a new laptop. Or it's facilities where I need to open up a new building or etc., IT touches it all. So a really interesting way to try to grab that screen and application space via the IT systems. >> And that's where John Donahoe comes is. As you said Jeff, Frank Slootman, Data Domain, EMC, you know, IT guy. And now John Donahoe, not an IT guy, came from the consumer world, he's trying to take the ServiceNow brand into the C suite. So we have him on a little later, we're going to talk to him about sort of how he's doing that. But this is a company that's transforming, they're constantly transforming. Really trying to become a brand name, the next great enterprise software company. >> I think another thing that really came out in the keynote and also just on the main stage this morning is this idea of change is not just about the technology. In fact, the technology is the easy part. One of the things he kept saying, and he brought up other people and customers and partners to talk about his too, is that it really is a culture shift. And it really is about a different way of leading. It's a different way of bringing in the right kind of talent who are not just these IT guys, let's be honest. >> Right. >> But they are data scientists, they are creative people, they integrate design thinking into the way they do their jobs, with this over-arching goal of how do I make the employee experience better and how do I make the candidate experience better too. Because that's another part of this. It's not just the people who are already working for you. In the period where there is a war for talent-- >> Jeff: Right, right. >> you also have to be thinking about okay, how do the people that we want to get-- >> Jeff: Right. >> What's their experience like when we're trying to attract them. >> So question for you, Rebecca, 'cause you cover this space-- >> Rebecca: I do, yes. >> a lot, right, and you write for MIT and-- >> Rebecca: HBR. >> HBR and the new way to work and the good, I'm trying to remember-- >> Rebecca: It's called Best Practices, yeah. >> book that you did, that interview. So as it is competition for talent, how did it strike you? 'Cause at the end of the day that's really what it's all about. How do you get and retain the best people when there just aren't enough people for all the jobs that are out there. >> It's interesting because I do feel as though, obviously, you want to be able to enjoy your workday and that's what Andrew Wilson at Accenture was talking about, really it's about having fun. And it's about having it be a great experience. At the same time I do think the human part of work is so essential. As we've talked about before, you don't quit jobs you quit bosses. And it really is about who is your manager and who is the person who is leading this change. >> Jeff: Right. And how are they interacting with employees and with you personally. >> But should it be fun, I mean, they're still paying you to show up. (Rebecca laughs) >> And I think sometimes we get confused. Clearly the mundane still takes-- >> Yes. >> a ridiculously too high percentage-- >> Rebecca: True. >> of time to do the routine, where there's this automation opportunity. But the other piece is the purpose piece and they brought up purpose early on in the keynote, right? >> Rebecca: Yes. >> People want to work for purpose driven organizations and the millennial workers have said they want to be involved in that. It's not just about shareholders and stakeholders and customers. So there is a bigger calling that they need to deliver on to attract and maintain the best people. >> A couple words about the show. So we do a lot of shows. This is a legit 18,000 person show, we're at the Sands Convention Center. It's crowded, the line at the Starbucks coffee the morning-- >> Rebecca: (laughs) Around the block. >> was about 60 to 65 deep, I mean that's a lot of people waiting for coffee. The other thing I want to stress is the ecosystem. When Jeff and I first started this show the ecosystem was very thin, Jeff, as you recall, and that's one of the things we said is watch the ecosystem as an indicator of progress. Well the ecosystem's exploding. You've seen acquisitions where companies like CXC and Accenture have got into the business big time. You see E&Y, Deloitte coming in as big partners now of ServiceNow and as we've often joked, the system integrators like to eat at the trough. So there's a lot of business going on in this ecosystem. >> Right, and that was part of the keynote too. The software's the easy part. It's are you investing in the change management for your people, are you investing in best practices. And if you're not then you're probably wasting some of your money. >> Great. Well it's going to be a great show, this is just segment one, we've got a lot of great guests so I'm excited to get going with both of you. >> Jeff: All right. >> Dave: All-righty. >> I'm Rebecca Knight for Dave Allante and Jeff Frick, we will have more from ServiceNow Knowledge18 coming up just after this. (electronic music)

>> Announcer: Live from Las Vegas, it's the Cube, covering Dell Technologies World, 2018, brought to you by Dell EMC and it's ecosystem partners. >> Well welcome back to Las Vegas, the Cube, continuing our coverage here of Dell Technologies World 2018, with some 14 thousand strong in attendance. This is day two by the way, of three days of coverage that you'll be seeing here live on the Cube. Along with Keith Townsend, I'm John Walls and we're now joined by Alex Almeida, who is the consultant of product marketing at Dell EMC, and Bob Bender who is the CTO of Founders Federal Credit Union, Bob, good to see you as well, sir. >> Thank you, thank you for having me. >> You bet, thanks for being here to both of you. First off, let's just set the table for what you do at Founders and what Founders is all about and then why Dell, and how Dell figures into your picture. >> Sure, so Founders Federal Credit Union established in 1950 we're a regional financial institution providing basic services for that area in South and North Carolina. We now service over 32 areas and we have about 210 thousand plus members. So I'm Chief Technology Officer and we're looking to Dell EMC to really give us a lift in the cyber resilience of our data, what we're trying to protect today. >> Keith and I were talking too, and said we always like hearing on the customer side of this, especially on the financial side, right? Because your concerns are grave concerns, right? We all care about our money, right? And obviously that's first and foremost for you, having trust, credibility, liability. So tell us a little bit about that thought process in general, what drives your business and how that then transfers over to DIT. >> Sure, and as a member, you look at us, big or small, you expect the same cyber resilience, protection for your personal information, you don't think there's going to be a difference there. So if you look at the Carolina's, you're going to see a significant, or the southeast, we've been picked on with malware, with that data extortion of what the name, ransomware, so we had to find a solution quickly and we looked at Dell EMC for data protection and cyber recovery to really help us in that area and really protect our data. >> So let's talk about some of the threats faced. Outside of malware, typically the line of thought is, you know what, don't assume that you can prevent getting hacked, assume that you are hacked, what personas do you guys wear as a bank, or as a credit union? >> Well, we looked at that and what we did is we get really involved and we go out and we see that event, the breach, the malware, the ransomware, and so we really thought, we lack the ability of bringing assets under governance, so how do we really roll that up so that everybody knows at any point in time, we can recover, that we have kind of a isolated recovery, an air gap, or a data bunker, and then a clean room to bring that up, a Sandbox. And we really saw that our tape media backup recovery was not going to recover for the events that were happening, the old days, you're looking at one or two critical systems that are being recovered. Today, they're locking 500, 1500 servers in a matter of minutes. So, when you rehydrate that data, you know, the deduplication, we're seeing 72 to one and that's done very fast, through the product lines of Dell EMC, significant, but when you want to rehydrate that, the data's gone, it's just not there. Well, if you take away that air gap situation, what're you left with? And if they're smart enough to figure out where your backups are, you're left with no protection, so we really needed to isolate and put off network all that critical data. And because of that 72 to one dedupe rate, and I realize we may be unique, there's others that may have to choose what those critical systems are, we're not going to have to, we're going to protect everything, every day, and so that we have a recovery point that we can point to and show management and our board and our members, such as you guys, that we can recover, that you're going to have trust in us handling your financial responsibilities. >> So what specific technologies are you guys using from Dell to create this environment in which you can recover within these isolated bubbles? >> You know, I'll let Alex talk more specific, but we really looked at the data protection solution, and a cyber solution, we said phase one, we want to stand this up very quickly because it's any minute this could happen to us. It's happening to very smart establishments. We really picked what was going to optimize our first iteration of this, and we did it quickly, so we're talking a roll out in 45 days. We used Data Domain, Avamar, DD Boost, we've got Data Protection Advisor, which gives me, whether I'm here or I'm off at another conference, or I'm showing up at the office, I get instant results of what we did the day before for that recovery. I know that we're in the petabyte storage business, I don't know when we crossed that line, but now we store you know, a huge amount of data very quickly. I mean, we took their product line and went from hours down to seconds and I can move that window any which way I want, and so it's just empowering to be able to use that product line to protect our data the way we are today. >> Yeah, I think the Dell EMC cyber recovery solution really is kind of looking at solving the problem, most people look at it from solving it as a preventative thing, how do I prevent malware from happening, how do I stop ransomware from attacking me? The thing is is that it's all about really, how are you going to recover from that? And having plan to be able to recover. And with the way we approached it, we started talking to customers like Bob, and they were really coming to us and saying, you know, this is increasing, this is an increasing problem that we're seeing and it's inevitable, we feel we're going to be attacked at some point. And you see on the news today, you know, we're only a little bit through the year and there's been a lot of news on cyber attacks and things like that. The key thing is how do you recover? So we took at that in conversations with our customers and went specifically back and designed a solution that leverages the best in industry technology that we have with our data protection portfolio. So when you look at data deduplication, you look at Data Domain, that technology in the industry provides the fastest recovery possible. And from there, that makes it realistic for companies to really say, yeah, I can recover from a ransomware attack. And the more important thing is, we look at this as the isolation piece of the solution is really where the value comes in. Not only is it to get a clean copy of the data, but you can use that for analysis of that data in that clean room to be able to detect early on problems that may be happening in your production environment. And it's really important that that recovery aspect be stressed and really the Data Domain solution is kind of the enabler there. >> It's still a really tough spot to be in, right? Because on one hand you're protecting, you're trying to prevent, so you're building the fortress as best you can, and at the same time, you're developing a recovery solution so that if there is a violation, an intrusion, you're going to be okay, but the fact is the data's gone, you know, it went out the door, and so I'm just curious psychologically, you know, how do you deal with that, with your board, with your ownership, with your customers? How do you deal with it, Alex, to your customer, just saying we're going to do all we can to keep this safe, >> Absolutely. >> But so that but is a big caviada, right? How do both of you deal with that? >> Yeah. >> First off... >> I'll say this, working with the Dell EMC engineers and their business partners, I'm sleeping better at night, and I'm not just saying that being here, what I mean is that they've shrunk my backup window, they've guaranteed me reporting and a infrastructure IQ of that environment that I have more insight, integrated, so across, holistically, my enterprise. So no longer am I adding on different components to complete backups, this backup, this company, this... I never get that insight, and I never really have the evidence that we're restoring, I can do the store and the restore at the same time and see that next day in reporting, that we're achieving that. I hear that but, but that but is a little quieter because you know, it's just a little less impactful because I'm confident now that I've got a very efficient window. I'm not effecting again, with those add on, ad hoc products, not condemning 'em, but, they're impactful to critical applications, I can see response time during peak times, the product doesn't have that effect. And it's really exciting because now I can, you know, I've got to rip and replace, I got to lift and shift, you decide what the acronyms you want to add to it, but we... The big thing I want to add, and sorry to ramble here a little, >> You're fine. >> Yep, yep. Our run books are becoming smaller. And this is, the less complex, now we're taking keep the lights on people that are very frustrated with our acronyms and our terminology and the way we're going and I'm starting to bring them into the cyber resilience, cyber security environment and they're feeling empowered and I'm getting more creative ideas and that means, more creative ideas means we're back as a business solving problems, not worrying if our backups are done at two in the morning. >> And from a Dell EMC perspective, I think we're really uniquely positioned in the industry, in that, not just from Dell EMC, but we look at all of Dell technologies, right? When we incorporate the fact that we have best in class data protection solutions to do operational recovery, disaster recovery, the next logical step is to really augment that and really start looking at cyber recovery, right? And then when you look at that and you look at the power of Dell technologies, it's really a layered approach, how do I layer my data protection solutions to do operational recovery, to do disaster recovery? And then at the same time, throw in a little RSA and SecureWorks in there into the picture and we're really uniquely positioned as a vendor in the industry, no other vendor can really handle that breadth in the industry from a cyber recovery standpoint when you throw in the likes of RSA and SecureWorks. >> So, Alex, let's drill down in the overall capability versus the rest of the industry. There's been a ton of investment in data protection, 90 million, 100 million, we're seeing unicorns pop up over just this use case of data protection. And they're making no qualms at it, they're going right at the Data Domain business. What is the message that you're going out and telling any users like Bob, that, you know what, stay the course, Data Domain, the portfolio of data protection at Dell is the best way to recover your environment in case of a breach. >> Yeah, absolutely. So in terms of that, what I say to customers I talk to every day around this, that are maybe doubting you know, going forward and what they're going to do, is that we are continuing to innovate, that Data Domain platform continues to innovate, you see that in our cloud scenarios, in the cloud, you know, use cases that we're talking about, and really kind of working together with our customers as a partner on how we apply things like cyber recovery for their workloads that go into the cloud, right? And that's really through that working relationship with customers and that very strong investment that we're making on the engineering side with our roadmaps is really what customers, at the end of the day become convinced that Data Domain is here to stay. >> So, Bob I'd love to follow up on-- >> Bob: Can I add on to that? >> Please. >> You know, I think the couple things you pointed on that I probably missed, is one, you've given me options, I can be on pram or off pram or back to on pram, and that is with the product line. And again, that integration across that, I have to have that insight, but at the end of the day, Dell EMC's product line delivers and that's what we experienced in our relationship. We're not talking about... 72 to one dedupe rate, I know that's, I triple checked the facts, it's like really, we're achieving that? That's impactful to my project lines, right? I'm no longer a bottle neck because I'm back at the projects and we're getting stuff moving and we're just not confused by the technology or the way we have to, you know, kind of bandaid them together, it's just one place to go and it delivers. And we see that delivery, especially with the growth of the Data Domain and the addition of the Sandbox, it's very exciting, we're seeing some great performance on our new systems. >> Yeah, and we hear that a lot about the flexibility of the portfolio and the data protection, the fact that, Bob mentioned it many times, making the backup window disappear is really where the heart of it is. And now Bob's team an all the customers that I've talked to and their teams can go off and actually move the business forward with more innovation and bringing more value back to the business. >> Part of security is disaster recovery. Do you guys integrate your disaster recovery practice as part of your Data Domain implementation? >> I think that's a great question. We've challenged our DR group, external also, we saw incident response component, just a big empty hole, it's missing. And I think that's a change in mindset people have to implement, as you pointed out, incident response is going to be before the disaster. And if you don't stand up, you're, look our data's gone mobile, that means it's everywhere, and we have to follow it everywhere with the same protection in the end of the day, no matter where we sit, we own it, we're responsible for it, so we have to go after it in the same protection. So I think it is part of that, we're integrating it, I think we confused a couple companies with that, but you got to stand up those foundation services, the cyber security, the data life cycle has made the cyber security become much more complex. And the use, the business use of that data is becoming more demanding, so we had to make it available, so we had to be transparent with these products and Kudos to Dell EMC and all the engineers making this happen. I don't know what I would be doing if it wasn't there for me. >> Keith: Well thank you, Bob. >> You know, and I'll tell you what strikes me a little bit about this, as we have just a final moment here, is that we think about cyber invasions and violations, what have you, we think about it on a global or a national scale. I mean, you are a very successful regional business, right? And you are just as prime of a target for malfeasance as any and you need to take these prophylactic measures just as aggressively as any enterprise. >> Right, right. If you look at the names, I mean, you just go down the list, Boeing, Mecklenburg County, City of Atlanta, you know, not to name 'em and pick on 'em but they're still recovering. And our business resilience, our reputation is all we have, we're there, you know, our critical asset is your data, that is what we say, you know, the story we tell is how we protect that and that's our services and if at the end of the day you don't trust our services, what are we? >> Alex: That's right. >> Not enough just to protect and prevent, you have to be able to recover. >> So to have a business partner that really understands, and I know I'm a little, maybe a little smaller than some of your others, but you still treat me like I'm... And you still listen to me, I bring you ideas, you say this fits, let's see what we can do. Your engineers go back and they say, you know, we can't say yes, but we can say we're going to take a different approach and come back with a solution. So it's very, very exciting to have a partner that does that with you. >> No, it's a great lesson, it is, it's great. Although, as I say goodbye here, I am a little disappointed when I heard you're from South Carolina I was expecting this wonderful southern accent to come out. (laughing) it just, Bob, what happened? >> You know, I'm an Iowa boy. >> John: You got a little yankee in ya'. >> There you go. Maybe they'll say a little more than a little. >> Alright, gentlemen, thanks for being with us. >> Thank you very much for having us. >> Thanks for sharing the Founders Federal story. Back with more from Las Vegas, you're watching the Cube, we're in Dell Technologies World 2018.

>> Announcer: Live from Las Vegas, it's the Cube, covering AWS re:Invent 2017. Presented by AWS, Intel, and our ecosystem of partners. (soft electronic music) >> Back on the Cube we are live here in Las Vegas at re:Invent, AWS putting on a show for about 45,00 of its closest friends. You might hear some of the cheering behind us. It's happy hour here, lot of happy folks having a good time. John Walls along with Justin Warren and we're now joined by a couple of fellows from Datrium. We have Sazzala Reddy who is the co-founder of Datrium and Craig Nunes who is VP of marketing. Gentlemen, thanks for being with us here on the Cube. We appreciate the time. >> Thanks for having us here. >> First off, let's talk about Datrium for those who are watching might not be familiar with your particular offering. If you would, Sazzala, give us a little thumbnail of what you guys are doing. >> Yeah, so we're kind of a new breed of unifying compute, primary storage, and backup all built in to the same product so that it becomes convenient for the end user so they don't have to manage multiple pieces of infrastructure. It's a unifying way of managing it. It's a new way of doing convergence. It's the next evolution of hyperconvergence and now in this particular AWS event, we are here to announce that our backup extends beyond the data center to be having it as a service running in Amazon. That's our new offering today as of this event. >> Yeah, so a little bit more about the announcement, then, because this was, again, why you're here in terms of becoming even more enjoined with AWS, that offering. I mean, if you would Craig, run through that a little bit and the prominence of that announcement, why you think this is a significant moment for you all. >> So we have seen, first of all, a huge attraction with our customers to bring the backup or data protection function into their Tier 1 environment. One individual can do it all, manage it all. At the same time we talk to a lot of folks who've got an AWS strategy and they might even have some developers doing stuff with AWS but they haven't, broadly, been able to take full advantage of backup DR in the cloud because when they do the math the numbers just haven't been there in terms of the economics of that. We felt like we could do something about that with some innovative technology that Sazzala and his guys put together around what we call Global Cloud De-duplication. Might want to talk a little bit about that. >> Yeah, so before Datrium I was a CT of a company called Data Domain, you probably heard of it. So being there, what we did there was being they're one of the pioneers in doing the global de-dup. So we learned a few things there and the other thing we learned about being in that company was that I learned that many people ignore backup. Backup seems to be one of the like-- If you have a car, you don't think of the insurance you pay for it, but it's an important part. Your family jewels are there. You gotta make it too. And if you look at the backup administrators, their life is not very happy, because everybody ignores them but we didn't want to do that. >> We were just talking about that in our last segment, too, weren't we buddy? Nobody wants to be the backup guy, right? >> Actually we want to solve that problem. >> It's great until that one mistake. >> Exactly, exactly, so we want to solve that problem very nicely which is why we have converged backup into our product because it's not another thing just to the side, it is your main family jewels so that's what we've tried to do. But to make it really work well you must have the fundamentals of storage and that's a little bit of a inf-- Like, you know, the details but details do matter in how we do this. So dedupe is a old thing, but still a lot of people don't have it. If you don't have dedupe and compression, all the other data reduction features, backup, you really can't do backup. And then how do you extend it beyond the data center. So if you're gonna do like tape, you do fulls and every weeek in incrementals. If you do the same thing to the cloud, you know the expense of that story, it's a thing. So it's not really practical anymore. What we wanted to do was bring two things to the cloud. One is that we know that AWS is expensive and secondly, AWS is hard to use. It's like Lego pieces, right? If you're a developer, you can put it together, but if I want to just use it, consume it, how do you bring that to the market? So we did two things. One is that we extended the global dedupe all the way to the cloud so everything ends up there. It's all globally deduped. We got like five to like 15X dedupe over there. If you have multiple sites going into a offering, it all gets deduped. Very convenient. Over the wire transfer is very, very convenient, very, very cheap. And also the other thing we have done is that we made it as a SAS offering. See the world is moving towards a SAS offering so in the near future you'll see some of our new announcements, which I can't talk about it right now, it's still secret, but that's what the conception model is gonna be. It's a SAS model. There is developers who want Lego, right, for Amazon, but there is a lot of other people who want to run a business, not just build pieces so for that we want to build as a SAS offerings. Convenient to use, it runs in the cloud, don't have to manage it, don't have to run all these things in your data center. So this backup offering is our first entry, a backup as a service. It's very unique. It's all this global dedupe and it's a service, nothing to do. You don't have to upgrade it. You don't have to manage it. You just have to use it, consume it as a product. >> The other thing that I was gonna say is when we've introduced this to our customers, pretty much everyone has said, "Yeah, we have a strategy "to incorporate public cloud in what we're doing," but almost to an individual none of them had done it yet. I mean, certain people in their company may have accounts, but for a lot of these guys it was their first ever engagement with AWS and so for them, they understood our product. They just wanted that experience to just kind of extend to AWS and not have to figure out how much EC-2, how much Dynamo DB, how much S3 bucket size, whatever. They didn't want any of that. Just help me do what I need to do on your platform leveraging public cloud. >> Yeah, they want to run a business, not manage Lego pieces. >> John: They don't care how the watch works, just what time is it? >> Exactly. >> Yeah, yeah, right. >> And we are very good at what we do. >> So you've taken compute and storage and you've convert, you put all of that together, and you've added backup and you're basically making it a one-stop shop for people to do something so as you say, I want to tell the time, just give me a watch. You've added this remote backup capability all in there. It's like, what's left for me to do? Do I just buy some of your stuff and say, "Okay, I'm done"? There isn't anything else. >> Actually, we have customers. They haven't talked to us for six months. We call them back, "Are you okay?" They're like, "Nothing to do. "I forgot about it because it just works and it runs." That's what you get with us. >> John: Don't tell my boss. >> Yeah sure, there is that. I mean, I think there are other things to do. >> John: But still, yeah. >> Other pieces to develop which don't work as well. So they were managing those. >> And by the way, the strategic stuff that's on their plate that they've never been able to get to in the past, maybe they're managing LUNS on the storage side or dealing with backup stuff that would give them headaches. That is out and they can focus on things that accelerate the business, drive revenue, top line, and make IT a hero again. >> Yeah, making something that's simple and easy to use like that, that takes a lot of engineering and in a lot of ways people underestimate how much work goes into making something easy to use. Now you've been working on this for a little while and you've change-- Like, people might be familiar with hyperconversion, but you guys are doing things in a slightly different way, which is clearly a much better way of doing things, so could you maybe explain a little bit more about how that global dedupe works in conjunction with the stuff that's onsite which makes it a really good fit to go and expand out into the cloud. >> Sure, so firstly we believe in the philosophy of not one click but zero click. One click is too hard. You gotta read the manual to know what the one click is. So that's where our design thinking has come from. If we can eliminate that click, that's even better. Why give a choice to the customer because it means that we have not thought about it. That's kind of what the design philosophy is of our company. For the first three years, we didn't ship our product because we spent the time to build the fundamentals of the product. We can't build this later on. Like global dedupe, it was harder to build later on. It just, it's not possible. So global dedupe is this concept that if something is there already, you can avoid sending it there. You negotiate from Site A to Site B or whatever it is. It's a multi-cloud world. Wherever it is, you can negotiate and say, "Do you have this?" "Yes and No." You don't have it, then they can send you the copy and keep it there so you tend to have this massive reduction of data that also, remember, is not just that global dedupe is gonna save you cost. Ultimately, backup is about recovery. You also need a sufficient amount of tools and workflows to be able to recover what you want efficiently and also, ultimately, backup is useful if you can recover it. If you don't check it, you're gonna-- If you ever have a problem at the time of recovery you're gonna lose your job so we also do the other thing of, okay, we saved your costs but also we check it regularly to make sure that the backup data is recoverable when you need to recover it. That's also an important aspect of it. So global dedupe is like block chain. Think of it like block chain. So how do you know, for example, if you have a piece of data here, you send it somewhere else. How do you know that it all went there? Somebody said so, but how do you verify that? Fundamentally, as architecture, so our global dedupe is like block chain a little bit. We know that they sent all these pieces over there. We can verify at the high level, yes, this is the signature of the data. It's all there and say, "okay, they're good." So now you can send the data anywhere you want and you can be sure that the data you send is what you're supposed to send. >> And Justin, you mentioned kind of the difference between what we're doing and hyperconverge and if you think of hyperconverge. It has brought compute, storage, network all in the box. Our approach is different. It's more like the modern hyper-scalers in that we split that compute and active data from durable capacity. >> I like to think of it as taking all the great advantages that you got from hyperconverge but then getting rid of some of the limitations where it's like we can scale compute and storage independently of each other but we still get all the great benefits from an integrated platform. >> Yeah and the interesting proof point is when we did the cloud-native port, not a code, not a lick of code was changed in the underlying file system that users don't ever see, but that just kind of shows you that kind of approach works in a world that's gotta embrace public cloud as part of your IT strategy. >> Well before we say goodbye, I just want to get your take on the show in general. Knowing that you both probably have some history with what AWS has been up to in the past, but this is not the same as in the past. At least, that's what we're hearing from people. What's your take on what you're seeing here, what you're feeling here? >> Fair enough. So I'm a computer science kind of guy so I kind of enjoy the show because it's all familiar stuff a little bit. So what they've done is an amazing job. It's a amazing business, to be honest, how they've built all these pieces and they've executed pretty well. Their service model is pretty good. I mean, sometimes things don't work as well, the pieces, but they're willing to spend the time to work with you, which to me is pretty awesome. They're willing to have the service level agreement to call you and they're willing to forgive you. I mean, they're willing to do all these things for you. This is why people like Amazon because of the service model. So they have a lot of building blocks so I'm talking to people, I'm going to some of the sessions. What I found is that there are two kinds of people. There is the developers. They love some of the things here because it's a building block. I mean, Lego. Who doesn't wanna play Legos? >> You love your Legos, don't you, Sazzala, yeah you do. >> But I think a lot of companies don't have the time, luxury to spend time with this. They want a simpler higher-level constructs so SAS applications for example. You can build it in Amazon, so the SAS people who are building the product can build it using Lego pieces but the higher level businesses want to use SAS model. They want to use more simpler model so that's the difference between VM Ware and Amazon. I think there's a lot of developers here. In VM Ware it was mostly I think the IT folks were there because it's about operating the business, right? So I think it's interesting to see as the future goes where is that shift? Is everybody gonna be a developer? I don't think so. It's very complicated. I think as I've used some of the Amazon API's, they're actually not trivial. Have to think about what happens if it fails, what happens if this dies? I mean, they're thinking about all these things. It's pretty complicated model. >> Craig: Well, it's a good formula though and it's working for them, obviously. >> Yeah totally. >> It's all the show here, we just had Black Friday, Cyber Monday. You look around here, this is like AWS Tuesday, Wednesday, Thursday. I mean, everyone is here, everyone is kind of shopping the new tech that's integrated with their favorite public cloud. It's a huge mixer of technology and AWS is after all, they probably learn a lot from the e-commerce side, the store front, and they have kind of worked that in to their show and their partnership bringing in companies like Datrium to really leverage their infrastructure as a service. It's awesome. It's great for us. >> Well it's been a great show and thank- We appreciate the time here. Good luck with the Legos. >> Sazzala: Thank you. >> No, no, no, all right. Back with more live. We are in Las Vegas. We'll continue and almost coming down the home stretch of our live coverage here on the Cube. Back with a little bit more in just a moment. (electronic music)