>>Welcome back to the cubes, continuous coverage of AWS reinvent 2021 live in Las Vegas. I'm Lisa Martin pleased to be here in person. We are actually with AWS and its massive ecosystem of partners running. One of the industry's largest and most important hybrid tech events of the year. We've got two life sets over a hundred guests to remote studios. I'm pleased to welcome two guests from Laos here with me. Next, Derek is here, the VP and director of digital modernization and David chow, the director of cloud capabilities, Derek and David. Welcome to the program. Thanks for having us great to be here in person. Isn't it? >>Absolutely. Last year we missed out. So if we've got to get it all in this week. >>Exactly and well, this is day one and the amount of people that are in here, there's a lot of noise in the background. I'm sure the audience can hear it is, is really nice. AWS has done such a great job of getting us all in here. Nice and safely. So let's go ahead and start. Light is coming off a very strong Q3. When we look at the things that have happened, nearly all defense and classified customers are engaged in digital modernization efforts. We've seen so much acceleration of that in the last 20 months, but let's talk about some of the current challenges Derek that customers are facing across operations sustainment with respect to the need to modernize. >>Sure, sure thing. Um, so over the past two years, we spent a better part of all that time, trying to really figure out what are our customers' hardest problems. And, you know, that's across the health vertical, the DOD vertical, uh, the Intel vertical, uh, you name it. We spent a lot of time trying to figure it out. And we kept coming up on three reoccurring themes, one, which is the explosion of data. There's so much data being generated across our customer's environments. Um, there's not enough human brain power to deal with it. All right. So we need to be able to apply technology in a way that reduces the cognitive burden on operators who must do operations and sustainment to get to a business outcome. Uh, the second one and most importantly for us is advanced cyber threats. We've all heard about the colonial pipeline hack. >>We've heard about solar winds. The scary part about that is what about the hacks that we don't know about? Right. And that's something that here at lighthouse, we're really focused on applying technology, cyber AIML in a way that we can detect when someone's in our environments or in our customer environments. And then we can opt out, obviously, um, do some remediation and get them out of our environment. So mission operations are not compromised. And then lastly, customer environments are heterogeneous. You have cloud, you have on-premise infrastructure. Uh, you have edge devices, IOT devices. It's very difficult to be able to do management and orchestration over all these different devices, all the different platforms that are out there. So working in concert with AWS, we build a solution to be able to do just that, which we'll talk about a little later, David, anything else that you want to, >>We talked about the explosion of data, the cybersecurity landscape changing dramatically, and the customers needing to be able to modernize and leverage the power of technology. Yeah, >>So our customers, uh, we have basically three areas that we see our customers having challenges in. And one of them, once they get to the cloud, they don't have the transparency on cost and usage, right. Uh, when you get the engineers are excited, the mission is exploded with extra activities. Um, but our customers don't have a sense on where the cost is going and how that relates to their mission, right? So we help them figure out, okay, your, your cost is going up, which is fine because it's applying to your mission and it's helping you actually be more successful than before. Right? And the other area is, uh, they need, uh, a multi-platform strategy that doesn't impact their existing conditions, right? They don't have the practicality or the funding that's required to just rip and replace everything. And you can't do that. You have to maintain your mission. >>If you have to maintain about a lot of critical capability that they already have, but at the same time, figure out how am I going to add the extensions and the new capabilities, right? And we have certain ways that we can do that to allow them to start getting into the cloud, leveraging a lot of additional capability that they never had before, but maintaining the investment that they've done in the past years to maintain their mission success. Right. Uh, and then the third is skill up-skilling. So we found that a lot of people have a hard time. Once we move them into AWS, specifically their operational duties and things change. And there's a big gap there in terms of training, uh, getting familiar with how that impacts their process and methodology, and that that's where we helped them a lot, uh, modify that revolution and how they do that stuff. >>That's excellent. That upskilling is critical, as things are changing so dramatically, we have, you talked about data and the cybersecurity changes Derek. And you know, every company, every branch of the federal is probably a data company or data organization, or if it's not, it has to become one. But the cyber threats are crazy. The things that have been going on in the last 20 months, the acceleration of ransomware, ransomware as a service, you talked about colonial, like we only hear about the big ones, but how many it's no longer a will we get hit by ransomware? Or will we be hacked? It's when, talk to me about some of those, about those challenges and also the need to be able to deliver real-time data as real-time missions are going on in that real-time is now no longer a nice to have. >>Right? So, um, it's a great question. And one of the things that I'll say is there's some studies out there that said 75% of the computing, uh, that will be happening over the next 10 years will be at the edge, right? So we're not going to be able to go at the edge, collect all this data, ship it back to a centralized way to process it. We're not going to be able to do that. What we have to do is take capability that may have been clouded, able push that capability to the edge. Where did that be? AI ML. It could be your mission applications, and we need to be able to exploit data in near real time, um, to which allows us to make mission critical decisions at the point of need. There's not going to be enough time to collect a big swath of data, move it back across a bandwidth that is temporarily constrained. In many cases, we just can't do it that way. So I think moving as much capability to the edge as possible in order for us to be able to make an impact in near real time, that's what we need to do across all of our verticals, not just DOD, but on the healthcare side to the Intel side, you name it. We gotta be able to move capability as far forward as >>Possible. And where Derek with you for a minute, where are those verticals with respect to embracing that, adopting that being ready to be able to take on those technologies? Because culturally, I can imagine, you know, legacy his story, history organizations to change his heart >>Change is hard. Um, and one of the strategies that we've tried to implement within that context is that the legacy systems, the culture that is already out there, we're not just going to be able to turn all of that off, right. We're going to have to make sure that the new capabilities and the legacy systems co-exist. So that's one of the reasons that we have an approach where we use microservices, very much API driven, such that, uh, you know, a mission critical system that may have been online for the last 20 years. We're not just going to turn it off, but what we can do is start to build sidecar capabilities, microservices, to extend that capability of that system without rebuilding it, we can't build our way out of all the technical debt. What we can do is figure out how do we need to extend this capability to get to a mission need and build a microservices. That's very thin. That's very lightweight. And that's how you start to connect the dots between your mission applications, the data, the data centricity that we talked about and other capabilities that need access to data, to be able to effectuate a decision. >>You make it sound so easy. Derek, >>It's certainly not easy, but in working with AWS, we really have taken this forward and we're really deploying, uh, similar capabilities today. Um, so it's really the way that we have to modernize. We have to be able to do it step by step strangle out the old as we bring in the new right. >>So David, let's talk about the AWS partnership, what you guys are doing as the critical importance of being able to help the verticals modernize at speed at scale in real time. Talk to me about what Leidos and AWS are doing together. >>So we work with Adobe very closely, um, for every engagement we have with our customers, we have AWS as our side, we do the reviews of, of their architecture and their approach. We take, we take into account the data strategy of the organization as long along with their cloud, uh, because we found that you have to combine their cloud and their data strategy because of the volumes of data that Derrick talked about, right. That they needed to integrate. And so we come up with a custom strategy and a roadmap for them to adopt that without like Derek said, um, deprecating any old capabilities that currently have any extending it out into, into the cloud so that those areas are what we strive to get them through. And we talk about a lot about the digital enterprise and how that is for us from light of this point of view, we see that as building an API ecosystem for our customer, right? Because the API is really the key. And if you look at companies like Twilio that have an API first approach, that's, what's allowed them to integrate very old technology like telephones into the new cloud, right? So that approach is really the unique approach that was taken with our customers for to see the success that we've seen. >>Well, can you tell me, David's sticking with you for a minute about upscaling. I know that AWS has a big focus on that. It's got a restart program for helping folks that were unemployed during the pandemic or underemployed, but the upskilling, as we talked about during this interview is incredibly important. As things change are changing so quickly, is there any sort of upskilling kind of partnerships that you're doing with AWS that you, >>Uh, so as a partner, we ourselves get a lot of free upskilling and training, uh, as AWS from your partner. Um, but also with our customers, we're able to customize and build specific training plans and curriculums that is targeted specifically for the operators, right? They don't come from a technology background like we do, but they come from a mission background so we can modify and understand what they need to learn and what they don't really need to worry about so much and just target exactly what they need to do. So they can just do their day-to-day jobs and their duties for the mission. >>That's what it's all about. Derek, can you share an example that you think really speaks volumes to light us and AWS together to help customers modernize? >>One thing I like about AWS is that the partnership is what we describe as a deep technical partnership. It's not just transactional. It's not like, Hey, buy this X services and we'll, we'll do this. I have a great example of this year. We kicked off a pilot with an army customer and we actually leveraged AWS pro. So we were literally building a proof of concept together. So in 90 days, what we, what we did was get the customer to understand we're moving more to native AWS services, EMR, uh, to be more specific that you can save money on tons of licensing costs that you otherwise would have had to pay for it. After the pilot was over, we recognized that we will save the government $1.2 million and they have now said, yes, let's go AWS native, which is, uh, which is, uh, a methodology that we still want to stamp out and use continually because the more and more that you adopt that native services, you're going to be able to move faster. Because as soon as you deploy a system, it's already legacy. When you start to do the native services, as things more services come online, we're sort of their glue where to make sure those things that are coming, the services that are AWS are deploying out, we'd bring, we, we then bring that innovation into our customer environment. So saving a customer, the government $1.2 million at a big deal for us. >>It's huge. And I'm sure you there's, that's one of many examples of significant outcomes that you're helping the verticals achieve. Absolutely. >>Yeah. One of our >>Core focuses. That's excellent. And also to do it so quickly and 90 days to be able to show the army a significant savings is a, is a huge, uh, kudos to, to Linus and to AWS. David, talk to me a little bit about the, from a partnership perspective, how do you guys go into a joint organizations together? I imagine one of the most important things is that transparency from the verticals perspective, whether it's DOD or health or Intel, talk to me about that, that kind of unified partnership. And what is the customer and customer experience? I imagine one team. >>Yes. So we go into, we engage with our AWS counterparts at the very beginning of an engagement. So they have their dedicated teams. We have our dedicated teams and we are fully transparent with each other, what the customers are facing. And we both focus on the customer pain points, right? What was really going to drive the customer. Um, and that's how we sort of approach the customer. So the customer sees us as a single team. Uh, we do things like we'll build out what we call the well-architected framework or wafer for short, right. And that allows us to make sure that we're leveraging all the best practices from AWS, from their clients on the commercial side. And we can leverage that into the government, right. They can get a lot of learnings and lessons learned that they don't have to repeat because some of the commercial cupboard companies who are ahead of us have I've done the hard learning, right. And we can incorporate that into their mission and into their operations. >>That's critical because there isn't the time. Right? I think that's one of the things that Penn has taught us is that there isn't there, like we talked about real-time data, there is, it's no longer a nice to have, right. But even from a training and from a deployment perspective that needs to be done incredibly efficiently with, we're talking about probably large groups of people. I imagine with Leidos folks, AWS folks, and the verticals. So that coordination between, I imagine what are probably two fairly culturally aligned organizations is critical. No. >>Yeah. One of the things that we put in places, this idea of bachelors environment, so that means you could be a Leidos person. You could be an AWS person, there's no badge. We're just sitting there, we're here to do good work, to bring value to a customer. And that's something that's really fantastic about our relationship that we do have. So every week we are literally building things together and that's, that's what the government, that's what the public sector folks expect. No, one's not gonna own it all. You have to be able to work together to be able to bring value to our customers across all the verticals that >>I like. That badge list environment, that's critical for organizations to work together. Harmoniously given there's as the data explosion just continues as does the edge explosion and the IOT device explosion more and more complexity comes into the environment. So that Badger less environment I met David from your perspective is really critical to the success of every mission that you're working on. >>Yeah. I mean, I think the badge approaches is critical without it, the existing teams have a hard time building that trust and being, and feeling like we're part of that team, right? Trust is really important in, in mission success. And so when we enter a new arena, we try to get, build that trust as quickly as we can show them that, you know, we're there to help them with their mission. And we're not really there for anything else. So they feel comfortable to share, you know, the really deep pain points that they're not really sharing all the time. And that's what allows Leidos specifically to, to really be successful with them because they share all their skeletons and we don't judge them. Right. We've say, okay, here's your problems. Here's some solutions. And here are the pros and cons and we figure out a solution together, right. It's a really built together sort of mindset that makes us successful. Okay. >>Togetherness as key, last question, guys, what are some of the things that attendees can learn and feel and see, and smell from Leidos this week at reinvent? >>We want to take that one. >>Um, yeah. So with Leidos, um, we're around, we have, uh, various custom, uh, processes with AWS, uh, because of our peer partnership. We have the MSSP that we just got as a launch partner. So there's a lot of interaction that we have with AWS. Um, anytime that AWS sees that there is opportunity for us to talk to a customer and talk to potential vendor, they'll pull us in. So if you guys come by the booth and you need to talk to an SSI, they'll, they'll pull us in and we'll have those conversations. >>Excellent guys, thank you so much for joining me, talking about Leidos, AWS, what you guys are doing together and how you're helping transform government. You make it sound easy. Like I said, Derek, I know that it's not, but it's great to hear the transparency with which guys are all working. Thank you so much for your time. Thank you. Thank you. My pleasure for my guests. I'm Lisa Martin. You're watching the cube, the leader in global live tech coverage.

>> Live, from San Francisco. It's theCUBE. Covering IBM Think 2019. Brought to you by IBM. >> Welcome back to theCUBE's coverage of IBM Think 2019. Here in Moscone, we're talking so much multi clouds. It's been raining all day, really windy. To help us wrap up our third day, what we call theCUBE Insights, I have our co-CEO, Dave Vellante. I'm Stu Miniman and happy to welcome back to the program. It's been at least 15 times on the program, I think our counter is breaking as to how many you've been on, Ray Wang, who is the founder, chairman and analyst with Constellation Research, also the host of dDsrupTV who was gracious enough to have me on the podcast earlier this year, Ray. >> Little reciprocity there, Stu. >> Hey, we got to get you back on, this is awesome! Day three is wrap-up and this is going to be fun. >> Ray, as we say, theCUBE is everywhere, except it's really a subset of what you and the Constellation Research team do, we see you all over the place so thanks for taking time to join us. Alright, so tell us what's going on in your world, Ray. >> So what we're seeing here is actually really interesting, we've got a set of data-driven business models that are being lit up, and you see IBM everywhere in that network. And it's not about Cloud, it's not about AI, it's not about security, it's not about Blockchain. It's really about companies are actually building these digital networks, these business models, and they're lighting them up. IBM-Maersk, we saw things with insurance companies, you see it with food trust, you see it with healthcare. It's happening, and it's the top customers that are doing this. And so it's like we see a flicker of hope here at IBM that they're turning around, they're not just selling services, they're not just selling software, they're actually delivering these business models to executives and companies, and the early adopters are getting it. >> Ray that was one of the questions we had, is what's the theme of the show and-- >> There is no theme! >> You're giving us the theme here of what it should be because we talk digital, we talk cognitive, we talk all these other big thought-y words because we need to think while we're here, right? >> We need to think, we need to think! No, but the thing is this is a theme-less show, people can't figure it out but the main thing is, look, I've got a problem, this digital disruption is happening, my business models are changing. Help me be part of that shift, or I may go away! And people realize that and that's what they're starting to get, and you see that in all the reference customers the people that were on stage. The science slams were also really great. I don't know if you had a chance to catch those but the science slams were kind of a flicker into research, IBM research which is the heart of IBM, is coming up. They're going from concept to commercialization so much faster than they used to be, used to be research would do a project people are like, that's kind of cool, maybe I'll adopt it. They're now saying hey, let's get this into the market, let's get into academia, let's get early adopters on board. >> So Ray, what do you make of the Red Hat deal? What does it say about IBM's strategy? Do you like the deal? What does it say about the industry at large? >> It's a great question. The Red Hat deal to me was overpaid, however, at 20x multiples, that's what PE firms are paying. So every vendor is now competing with PE firms for assets. Red Hat, at about 9x, 10x? Makes a lot of sense, at 20x? It's kind of like, okay, is this the Hail Mary or is this the future strategy or is this basically what the new company is? I would have rather taken that money and put it into venture funds to continue what they're doing with these network models. That would have been a better strategy to me but Red Hat's a great company, you get a great team, you get great COs you get great tooling. >> So you would've rather seen tuck-ins to actually build that network effect that you've been alluding to. Of course that would have taken longer you know, wouldn't have solidified Ginni's legacy. So, it's a big move, a big move on the chessboard. >> Well the legacy's interesting, last year the stock was down some 20-some percent, it's up 20% since January so we're going to see what happens, but it's a doubt component. >> Well I've always said she inherited a bag of rocks from Palmisano at the peak of 2012 and then it got hit hard and she had to architect the transformation. It took, I don't know, five years plus, so, you know, she was dealt a tough hand, in my opinion. >> She had a bad hand, but we've had seven years to play this. I think that's what the market's saying. >> So it's on her, is what you're saying. >> It's now on her. She's got to turn this around, finish the legacy, but you've got a great CEO in waiting with the Red Hat guy. >> Jim Whitehurst you're saying? >> Yeah, he's good >> So she's what, Ginni is 60, 61? Is that about right? >> She's past the retirement age. Normally IBM CEOs would have gone through. >> 61 to 63 I think, is that range maybe, hey, women live longer so maybe they live longer as the CEO of IBM, I don't know. >> She did get a bad hand, but I think when you execute the strategy that money, here's the tough part. Investors are saying, hey, we'd rather take your money, back away from you through stock buybacks, dividends and mergers and acquisitions, and we don't trust you to do the innovation. That's happening to every company, including all of IBM's customers. The problem is if you do that, they're hedging against those companies too. The same investors are taking 50, 100 million, giving it to three kids in a start-up anywhere in the world and saying, hey, go disrupt these guys, so they're betting against their own investments and hedging. So that's the challenge she's up against. >> We talked about in our open for the show here. It's developers, though, that's the business model. We saw IBM struggle for years to get any real traction there, there's little pockets there, they've got great legacy in open source, but Red Hat's got developers. Ray, you go and see a lot of shows, who's doing well with developers out there? >> Microsoft redid their developer network by going younger with GitHub, whole bunch of other acquisitions, this is a great developer buy in that percent. But the other piece that we noticed here was it's the partner developers that are coming in in force. It's not your average developer. I'm going to build a coding and do a mobile app, it's people that work for large system integrators, large networks, small midsize VARs, those are where the developers are coming from and now they have a reason, right? Now they have a reason to build and I think that's been a good turnaround. >> How about Salesforce with the developer angle, what's your radar say there? >> It's not about the developer angle on the Salesforce side, what's interesting about the Salesforce side is Trailhead. This is, like, learning management meets gamification meets a whole LinkedIn training program in the back end. This is the way to actually take out LinkedIn without going after LinkedIn, by giving everyone a badge. There's a couple of million people actually on this thing. Think about this, all getting badges, all training each other, all doing customer support and experience, that's amazing! They crowd-source customer experience and learning right there. And they're building a community and they're building a movement. That's the thing, Salesforce is about a movement. >> Couple of others, SAP and Oracle, give us your update there. >> I think SAP's in the middle of trying to figure out what they have to do to make those investments. We see a lot of partnerships with Microsoft and IBM as they're doing the Cloud upgrades, that's an area. The acquisition of Qualtrics is another great example, 20x. 20x is the number people are now paying for for acquisitions and for assets on that end. And Oracle's going to be interesting to watch, post-Kurian to see how they come at it. They have a lot of the assets, they've got to put them together to get there, and then we've got all these interesting things like ServiceNow and Adobe on the other end. Like, ServiceNow is like, great platform! Awesome, people are building and extending the Cloud in ServiceNow, but no leadership! Right? I mean, you've got a consumer CEO trying to figure out enterprise, a consumer CMO trying to figure out enterprise, and they don't know if am I a platform or am I an app? You've got to figure that out now! People want to work with you! >> Well it is a company in transition at the top, for sure. >> But they can do nothing and still make a ton of money on the way out. >> And they've kicked butt since Donahoe came on, I mean just from a performance standpoint, amazing. >> Oh yeah, performance? You can do nothing and I think it's still going to coast but the thing is at some point it's going to come bite you, you got to figure that out. >> How do you think that Kurian will fit at Google, what's your take there? >> You know, early reactions on Kurian at Google is good, right? The developers are embracing him, he understands what the problems are. Let's be honest, I've said this many times to you guys in private and also in public, you know. It was a mess, it was a cluster before. I mean, you had three years, and you lost traction in the market, right? And it's because you didn't get enterprise, you couldn't figure out partners and, I mean, you paid sales people on consumption! Who does that? You're a sales rep, you're like, I'm not going to do this on consumption! Makes no sense! >> Ray, Kurian had been quoted that no acquisition is off the table, you know, they didn't buy GitHub, they didn't buy Red Hat, do you see them making a 10, 20 million dollar acquisition to get them into the enterprise space? >> Billion. >> Yeah, sorry, 20 billion. >> I think there's a lot that they go after. I know there's rumors about ServiceNow, there's a couple of other things. I think the first acquisition, if I were to make it would be Looker. I mean I love that thing that's on there and buy Snowflake too while you're at it. But we'll see what they do. I think the strategy is they've got to win back the trust of enterprises. People need to know, I'm buying your relationship, I have a relationship, I can count on you to be successful as opposed to, hey, you know, you can get this feature for less and if you do this on a sustained unit or, I want to know I can trust you and build that relationship and I think that's what they're going to focus on. >> Well, come on, isn't Google's business still ads? I mean, that's still where all their revenue is. >> It is, but the other category is $10 billion. That other category of devices and Cloud and all that? That's still a big category and that's where all the growth is. I mean look at this, it's a full frontal assault between Amazon and Google, Amazon Alexa versus Google Home, right? Amazon in ads, $10 billion in ads, going after Google's ad business. Amazon doing an AWS versus Google Cloud. Google's under assault right now! >> Give us the update on Constellation, your conference is really taking off, you've got great buzz in the industry, and congratulations on getting that off the ground. >> And the Tech for Good stuff, loved it. >> Thank you. We had great event, December 10th, talking about the future of the Internet. What it means in terms of, you know, digital rights, human rights in a digital age, was really that conference. Our big flagship conference is November 4th through 7th, it's at Half Moon Bay. We get about 250 CXOs together, about 100 vendors and tech folks that are visionaries and bring them together, that's doing well, and we do our healthcare summits. We brought on a new analyst, David Chou. David Chou, and if you've seen him before, he's like one of the top analysts for CIOs and chief data officers in the healthcare space, he's at HIMSS right now. >> He's awesome, we know him from Twitter. He's been on, he's great. >> Yeah, so we do healthcare summits twice a year and that's been picking up, some of the top thinkers in healthcare. We bring them in to Las Vegas, we do a brainstorming session, we work with them. They think about ideas and then we meet again, so. >> Alright, Ray, we want to give you the final word. We're halfway through IBM Think, what have you been thinking about this and any final musings on the industry? >> So I was very upset last year at how it was run. And I think this has run much better than last year. I think they did a good job. February in San Francisco? Never again, don't do that. I know it's May next year, is when this event's going to be. But I think the main thing is IBM's got to do more events than once a year. If you get enterprise marketing you realize it's at the beginning of the year, it's still sales kick-off and partners. March? March is like closing the quarter, so you do an event in April or May, and you do it in April or May but you have multiple events that are more targeted. This theme-less approach is not working. Right, partners are a little confused but they're here because it's once a year. But more importantly, build that pipeline over the quarters, don't just stop at a certain set of events, and I think they'll get very successful if they do that. >> Alright well, Ray, next time you come on the program, can you please bring a little bit of energy? We'll try to get you on early in the show when you're not so worn down. >> I know. >> Thanks as always. >> Appreciate you coming back on, man. >> Hey thanks, man, it's theCUBE! I love being on this thing.. >> Always a pleasure. >> Alright and, yeah, we always love helping you extract the signal from the noise. We're Dave Vellante, John Furrier, Lisa Martin. I'm Stu Miniman. Thanks for watching day three of theCUBE at IBM Think. Join us tomorrow, thanks for watching. (light music)