(upbeat jazz music) >> Narrator: From our studios in the heart of Silicon Valley, Palo Alto, California, This is a Cube Conversation. >> Everyone welcome to this Cube Conversation here in Palo Alto, California. I'm John Furrier host of the Cube, here in the Cube Studios. We have Dom Wilde the CEO of SnapRoute, and Glenn Sullivan co-founder of SnapRoute hot startup. You guy are out there. Great to see you again, thanks of coming on. >> Good to see you. >> Appreciate it. >> Thanks. >> Your famous you got done at Apple, we talked about last time. You guys were in buildup mode, bringing your product to market. What is the update? You guys are now out there with traction. Dom give us the update. What's going on with the company? Quick update. >> Yeah, so if you remember we've built the sort of new generation of networking, targeted at the next generation of cloud around distributed compute networking. We have built Cloud Native microservices architecture from the ground up to reinvent networking. We now have the product out. We released the product back at the end of February of this year, 2019. So we're out with our initial POCs, we've got a couple of initial deals already done. And a couple customers of record and we deployed up and running with a lot of interest coming in. I think it's kind of one of the topics we want to talk about here is where is the interest coming from and where is this sort of new build out of networking, new build out of cloud happening. >> Yeah I want to get the detail on that traction but real quick what is the main motivator for some of these interest points? Obviously you got traction. What is the main traction points? >> So a couple things, number one, people need to be able to deploy apps faster. The network has always traditionally got in the way. It's been a inhibitor to the speed of business. So, number one, we enable people to deploy applications much faster because we're sort of integrating networking with the rest of the infrastructure operational model. We're also solving some of the problems around, or in fact, all of the problems around how do you keep your network compliant and security patched. And make it easier for operations teams to do those things and get security updates done really really quickly. So there's a whole bunch of operational problems that we're solving and then we're also looking at some of the issues around how do we have both a technology revolution in networking but also a economic revolution. Networking is just too expensive and always has been. So we've got quite a works of revolutionary model there in terms of bringing the cost of networking down significantly. >> Glenn, as the co-founder, as the baby starts to get out there and grow up, what's your perspective? Are you happy with things right now or how are things going on your end? >> Absolutely, the thing that I'm proudest of is the innovation that the team has been able to drive based on having folks that are real experts in Kubernetes, DevOps, and networking, all sitting in one room solving this problem of how you manage a distributed cloud using tool sets that are Cloud Native. That's really what I'm proudest of is the technology that we've been able to build and demonstrate to folks. Because nobody else can really do what we're doing with this mix of DevOps and Kubernetes, and Cloud Native engineering. Like general network protocol and systems people. >> You know it's always fun to interview the founders, and being an entrepreneur myself, sometimes where you get is not always where you thought you'd end up. But you guys always had a good line of sight on this Cloud Native shift in the modern infrastructure. >> Glenn: Right. >> You did work at Apple we talked about it in our last conversation. Really with obviously leading the win, they had pressure from the marketplace selling trillion dollar valuation company. But that was a early indicator. You guys had clear line of sight on this new modern architecture, kind of the cloud 2.0 we were talking about before we came on camera. This is now developing, right? So you guys are now in the market, you're riding that wave. It's a good wave to be on because certainly app developers are talking about microservices, or you talking about Kubernetes, talking about service meshes, stateful data. All these things are now part of the conversation but it's not siloed organizations doing it. So I want to dig into this topic of what is cloud 2.0. How do you guys define this cloud 2.0 and what is cloud 1.0? And then lets talk about cloud 2.0. >> Yeah, so cloud 1.0, huge success. The growth of the hyperscale vendors. You've got the success of Amazon, or Microsoft, Azure, and all of these guys. And that was all about the hyper-centralization of data, bringing all the desperate data centers that enterprises used to run and all that infrastructure into relatively a few locations. A few geographic locations and hyper-centralizing everything to support SaaS applications. Massively successful because really what cloud 1.0 did was it made infrastructure invisible. You could be an application developer and you didn't have to manage or understand infrastructure, you could just go and deploy your applications. So, the rise of SaaS with cloud 1.0. Cloud 2.0 is actually a evolution in our mind. It's not an alternative, it's actually an evolution that compliments what those vendors did with cloud 1.0. But it's actually... It's actually distributing data. So we pulled everything to central and now what we're seeing is that the applications themselves are developing such that we have new use cases. Things like enhanced reality and retail. We have massive sensor networks that are generating enormous amounts of data. We have self-driving cars where, you know, that need rapid response for safety things. And so what happens is you have to put compute closer to the devices that are generating that data. So you have to geographically now disperse and have edge compute and obviously the network that goes with that to support that. And you have to push that out into thousands of locations geographically. And so cloud 2.0 is this move of we've got this whole new class of cloud service providers and some regional telcos and things who are reinventing themselves, and saying, "Hey we can actually provide "the colos, we can provide the smaller locations "to host these edge compute capabilities." But what that creates is a huge networking problem. Distributed networking in massively distributed cases is a really big problem. What it does is it amplifies all of the problems that we coped with in networking for many years. I mean, Glenn, you can talk about this right? When you were at Apple one of the first realtime apps was Siri. >> Yeah, and I know it. Lets get back to the huge networking problem but I want to stay on the thread of cloud 2.0. Glenn, you were talking about that before we came on camera. He referenced that you worked for a time at Apple. Kind of a peak into the future around what cloud 2.0 was. Can you elaborate on this notion of realtime, latency, as an extension to the success of cloud 1.0? >> Right, so we saw this when we were deploying Siri. Siri was originally just a centralized application, just like every other centralized application. You know, iTunes. You buy a song, it doesn't really have to have that much data about you when you're buying that song. You go and you download it via the CDN and it gets it to you very quickly, and you're happy and everything's great. But Siri kind of changed that because now it has to know my voice, it has to know what questions I ask, it has to know things about me that are very personal. And it's also very latency sensitive, right? The quicker that it gets me a response the more likely I am to use it, the more data it gets about me the better the answers get. Everything about it drives that the data has to be close to the edge. So that means the network has to be a lot bigger than it was before. >> And this changes the architectural view. So just to summarize what you said is, iTunes needs to know a lot about the songs that it needs to deliver to. >> Glenn: Right. >> The network delivers it, okay easy. >> Glenn: Right. >> If you're clicking. But with the voice piece that kind of changed the paradigm a little bit because it had to be optimized and peaked for realtime, low latency, accuracy. Different problem set, than say, the iTunes. >> Glenn: Exactly. >> So they've networked together. >> Language specific, right? So, where is the user, what language are they speaking, how much data do we have to have for that language? It's all very very specific to the user. >> So cloud 2.0 is if I can piece this together is cloud 1.0 we get it, Amazon showcased there. It's kind of data, it's a data problem too. It's like AI, you seen the growth of AI validate that. It's about data personalization, Siri is a great example. Edge where you have data (chuckles) that needs to integrate into another application. So if cloud 1.0 is about making the infrastructure invisible, what is cloud 2.0 about? What's the main value proposition? >> To me it's about extracting the value from the data and personalizing it. It's about being able to provide more realtime services and applications while maintaining that infrastructure invisibility paradigm. That is still the big value of any cloud, any public cloud offering, is that I don't want to own the infrastructure, I don't want to know about it, I want to be able to use it and deploy applications. But it's the types of applications now and it's the value that the applications are delivering has changed. It's not just a standard SaaS application like Workday for instance, that is still a very static application-- >> John: It's a monolithic application, yeah. >> These are realtime apps, they're operating realtime. If you take an autonomous car, right? If I'm about to crash my car and the sensors are all going off, and it needs to brake and it needs to send information back and get a response. I want all that to happen in realtime, I don't want to sort of like have-- >> In any extraction layer of any layer of innovation 1.0, 2.0, as you're implying advancement. It's still an application developer opportunity, Glenn, right? >> Absolutely. >> Because at the end of the day the user expectations changed because of the experience that they're getting-- >> Yeah and it only gets worse right? Because the more network that I have the more distributed the network is, the harder it is to manage it. So if you don't take that network OS, the really really boring, not very exciting thing, and treat it the same way you always have. And try to take what you learned in the data center and apply to the edge, you lose the ability to really take advantage of all the things that we've learned from the Cloud Native era a from the public cloud 1.0, right? I mean just look at containers for instance, containers have taken over. But you still see this situation where most of the applications that are infrastructure based aren't actually containerized themselves. So how can they build upon what we've learned from pubic cloud 1.0 and take it to that next level, unless you start replacing the parts of the infrastructure with things that are containerized. >> This just is a side note, just going through my head right now. It's going to be a huge conflict between who leads the innovation in the future. >> Glenn: Absolutely. >> On premises or cloud. And that's going to be an interesting dynamic because you could argue that containerization and networking is a trend in mixed tense to be Cloud Native but now you got it on premises. It's going to be a dynamic we're going to have to watch. But you mentioned, Dom, about this huge networking problem that evolves out of cloud 2.0. >> Dom: Absolutely. >> What is that networking problem? And what specifically is a directionally correct solution for that problem? >> So I think the biggest problem is an operational one. In the cloud 1.0 era and even prior to that when we were in a hosted enterprise data centers, we've always built data centers and the applications running with them, with the assumption that there are physically expert resources there. That if something goes wrong, they can hands-on do something about it. With cloud 2.0 because it's so distributed, you can't have people everywhere. And one of the challenges that has always existed with networking technology and architecture is it is a very static thing. We set it, we forge it, we walk away, and try not to touch it again because it's pretty brittle. 'Cause we know that if we do touch it, it probably breaks and something goes wrong. And we see today a ton of outages, we were talking about a survey the other day that says the second biggest cause of outages in the cloud age is still the network. It's an operational problem whereby I want to be able to go and now touch these thousands of devices for... Usually I'm fixing a bug or I want to add a feature but more and more it's about security. It's more about security compliance, and I want to make sure that all my security updates are done. With a traditional network operating system, we call it The Monolith, all of the features are in big blob. You can turn them off but you can't remove them. So it's a big blob and all of those features are interdependent. When you have to do a security patch in a traditional model, what happens is that you actually are going to replace the blob. And so you're going to remove that and put a new blob in place. It's a rip and replace. >> And that's a hard enough operational problem all on it's own because when you do that you sort of down things and up things. So consequently-- >> And anyone who's done any location shifting on hardware knows it's a multi-day/week operation. >> It is but, ya know, and what people do is they overbuild the network, so they have two of everything. So it's when they down one, the other one stays up. When you're in thousands of geographic locations, that's really expensive to have two of everything. >> So the problem statement is essentially how do you have a functional robust network that can handle the kind of apps and IOT. Is that-- >> Yeah it is absolutely but as I said it's important to understand that you have this Monolith that is getting in the way of this robust network. What we've done is we've said, 'We'll apply Cloud Native technology in thinking.' Containerize the actual network operating system itself, not just the protocols, but the actually infrastructure services to the operating system. So if you have to security patch something or you have to fix something, you can replace an individual container and you don't touch anything else. So you maintain a known state for your network that devices is probably going to be way more reliable, and you don't have to interrupt any kind of service. So rather than downing and uping the thing you're just replacing a container. >> You guys built a service on top of the networks to make it manageable, make it more functional, is that-- >> We actually didn't build it. This is the beautiful part. If we built it then I would just be another network vendor that says, "Hey trust my propietary not-open solution. "I can do it better than everyone else." That would be what traditional vendors did with stuff like ISSU and things like that. We've actually just used Kubernetes to do that. So you've already trust Kubernetes, it came out of Google, everybody's adding to it, it's the best community project ever for distributed systems. So you don't have to trust that we've built the solution, you just trust in Kubernetes. So what we've done is we made the network native to that and then used that paradigm to do these updates and keep everything current. >> And the reason why you're getting traction is you're attractive to a network environment because you're not there to sell them more networking (laughs). >> Right. >> You're there to give them more network capability with Kubernetes. >> Yeah, well I mean-- Yeah we're attractive to a business for two reasons. We're attractive to the business because we enable you to move your business faster. You can deploy applications faster, more reliably, you can keep them up and running. So from a business perspective, we've taken away the pain of the network interrupting the business. From an operations perspective, from an IT operations network operations perspective, what we've done is we've made the network manageable. We've now, as you said, we've taken this paradigm and said what would've taken months of pretesting, and planning, and troubleshooting at two o'clock in the morning has now become a matter of seconds in order to replace a container. And has eased the burden operationally. And now those operational teams can do worthwhile work that is more meaningful than just testing a bunch of vendor fixes. >> Yeah, even though cloud 1.0 had networking in their computed storage, I think cloud 1.0 data would be about computing storage. cloud 2.0 is really about the network and all the data that's going around to help the app developers scale up their capability. >> Dom: Yeah, that's a great way to think about it. >> I was talking about the use cases. I think the next track that I'd love to dig in with you guys on is as you guys are pioneering this new modern approach, some of the use cases that you touch are probably also pretty modern. What specific use cases are you guys getting into or your customers are talking about. What are some of these cloud 2.0 use cases that you're seeing? >> Yeah, so one we already touched on was this sort of horizontally and generally was the security one. I mean security is everybody's business today. And it's a very very difficult networking problem, ya know, keeping things compliant. If you take for instance, recently Cisco announced that there was faulty vulnerabilities in their mainstream Nexus products. And that's not a terrible thing, it's normal course of business. And they put out the patches and the fixes and said, "Hey, here it is." But now when you think about the burden on any IT team. That comes out of the blue, they hadn't planned for it. Now they have to take the time to take a step back and what they have to do is say, well I've got this new code. I don't know what else was fixed or changed in there. So I now have to retest everything and retest all of my use cases, and I have to spend considerable time to do that to understand what else has changed. And then I have to have a plan to go out and deploy this. That's a hard enough problem in a centralized data center. Doing that across hundreds, if not thousands of geographically dispersed sights is a nightmare. But it's just, ya know, the new world we live in, this is going to happen more and more and more. And so being able to change that operational model to say actually this is trivial. And actually what you should be doing is doing these updates everyday to keep yourself compliant. >> Do the use cases Glenn, have certain characteristics? I mean, we're talking about latency and bandwidth that's a traditional networking kind of philosophy. Is there certain characteristics that these new use cases have? Is it latency and bandwidth, is there anything else? >> No it's mostly about bringing properties like CI/CD to networking, right? So the biggest thing we're seeing now is as people start to investigate disaggregated networking and new ways of doing things. They're not getting this free pass that they used to get for the network because the network isn't just an appliance anymore. When you had something that was from one of the three vendors you'd say, "Okay, that thing runs some version of Linux on it. "I don't know what it is. "Maybe it runs free SD in Juniper's case. "I don't understand what kernel it is, "I don't care just keep that thing up to date." But now it's like, "Oh I'm starting to "add more services to my network devices." Say in the remote sites I want to kickstart some servers with these network devices I install first, well that means that I have to start treating this thing like it's another server in my environment for my provisioning. That means that everything on that box has to be compliant just like it is in everything else. Lets not even get into personal credit card information, personal identifying information. Everything is becoming more and more heightened from a non-exemplary status. >> It's a surface area device, I mean it's part of the surface area. >> And if it's not inside a data center than it's even worse because you can't guarantee the physical security of that device as much as you could if it was inside a regular data center. >> So this is a new dynamic that's going on with the advent of security, regulatory issues, and also obviously the parameter being dismantled because of cloud. >> Glenn: Absolutely. >> Yeah, you also got specific use cases. There are multiple verticals and industries that are having these challenges. Retail is a good example, point-of-sale. Anywhere where you have the sort of a branch problem or mentality where you're running sophisticated applications, and by the way, people think of point-of-sale is not terribly sophisticated. It's incredibly sophisticated these days. Incredibly sophisticated. And there are thousands of these devices, hundreds of stores, thousands of devices, similar with healthcare. You know, again, distributed hospitals, medical centers, doctor's offices, etcetera. You have all running private mission critical data. I think one of the ones that we see coming is this kind of autonomous car thing. As we get IOT sensor networks, large amounts of data being aggregated from those. So there's lots of different use cases. We add on a lot of interest. And to be quite frankly, the challenge for us as a startup is keeping focused on just a few things today. But the number of things we're being asked to look at is just enormous. >> Well those tailwinds for you guys in terms of momentum, you have this cloud 2.0 trend. Which we talked about. But hybrid cloud and multi-cloud is essentially distributed cloud on edge? If you think about it. >> Yeah, yeah. >> And that's what most companies are going to do, they're going to keep there own premises and their going to treat it as either on their platform or an external remote location that's going to be everywhere, big surface area. So with that, what are some of the under the hood benefits of the OS? Can you go into more detail on that because I find that to be much more interesting to say the network architect or someone who's saying, "Hey you know what? "I got hybrid cloud right now. "I got Amazon, I know the future's coming on "to my front door step really fast. "I got to start architecting, I got to start hiring, "I got to start planning for distributed cloud "and distributed edge deployments." If not already doing it. So technical depth becomes an huge issue. I might try some things with my old gear or old stuff. They're in this mold, you know, a lot of people are in that mode. I'll do a little technical depth to learn but ultimately I got to build out this capability. What do you guys do for that? >> So the critical thing for us is that you have to standardize on an open non-proprietary orchestration layer, right? You can talk about containers and microservices all day long. We hear those terms all the time but what people really need to make sure that they focus on is that their orchestrator that managing those containers is open and non-proprietary. If you pull that from one of the current vendors it's going to be something that is network centric and it's going to be something that was developed by them for their use. Their basically saying here's another silo, keep feeding into it. Sure we give you API, sure we give you a way to programmatically configure the network but you're still doing it specifically to me. One of the smartest decisions we made besides just using Kubernetes as core infrastructure. We've also completely adapted their API structure. So if you already speak Kubernetes, if you understand how to configure network paradigms in Kubernetes, we just extend that. So now you can take somebody, who off the street might be a Cloud Native Kubernetes expert and say here's a little bit of networking, go to play the network, right? You just have to take the barrier down of what you have to teach them from this CLI and this API structure that's specific to this vendor, and then this CLI and this API structure. But the cool thing about what we're doing is we also don't leave the network engineers out in the cold, we've give them a fully Cloud Native network CLI that is just like everything else they're used to, but it's doing all this Cloud Native Kubernetes microservices containers stuff underneath to hide all that from them. So they don't have to learn it and that's powerful because we recognize because of our Ops experience, there's a lot of different people touching these boxes. Whether you put it in a ivory tower or not, you've got knocks that have to login and check 'em, you've got junior network admin, senior network engineers, architects. You've got Cloud Native folks, Kubernetes folks, everybody has to look at these boxes, so they all have to have ways that end of the switch, end of the routers that is native to what they understand. So that's very critical as to present data that makes sense to the audience. >> And also give them comfort to what they're used to like you said before. If they got whatever's running Linux on there, as long as it's operationally running, water's flowing through the pipes, your packets are moving through, their happy. >> Glenn: Right. >> But they got to have this new capability to please the people who need to touch the boxes and work with the network, and gives them some more capabilities. >> Right, it prevents you from building those silos which is really critical in the Cloud Native. And that's what public cloud 1.0 taught us, right? Is stop building these silos, these infrastructure silos and say okay, you look at AWS right now. There's AWS certified engineers, they're not network experts, they're not storage experts, their not compute experts, they're AWS experts. And you're going to see the same thing happen with Cloud Native. >> Cloud 3.0 is decimating the silos basically 'cause if this goes that next level, that's why horizontally scalable networks is the way to go, right? That's kind of what you were talking about about the use case. >> Yeah, I think all revolutionary ideas are all actually more transformational. Revolutions begin by taking something that is familiar and presenting it in a new way, and enabling somebody to do something different. So I think it's important as we approach this is to not just come in and go, 'Oh what you're doing is stupid, we have to replace it.' The answer is, what you're doing is obviously the right thing. But you've not been given the tools that enable you to take full advantage and achieve the full potential of the network as it relates to your business. >> And you guys know as well as we do is that the networking folks are, it's a high bar for them because you mentioned the security and the lockdown nature of networking. It's always been, you don't F with it because you think that thing is going to be, anyone who touches it, they need to be reviewed. So they're a hard customer to sell to. You got to align with their Ops mindset. >> I think the network operators have been, and Glenn, and our other co-founder have waxed theoretical about this. (laughter) But network operators have been forced to live in a world of no. Anytime the business comes to them and says, "Hey we need you to do X." The answer is no, because I know that if I touch my stuff it's going to break, or I'm limited in what I can do, or I can't achieve the timeframe that you're looking for. So the network has always been an inhibitor but the heroes of the moment are actually the network operations team. Because nobody knows that the network was an inhibitor. >> Well this is an interesting agile conversation we've been having this is our, here in our Cube Studios yesterday amongst our own team because we love agile content. Agile's different, agile is about getting to yes because iteration in a sense is about learning, right? So you have to say no, but you have to say no with the idea of getting to yes. Because the whole microservices is about figuring out through iteration and ultimately automation, what to tear down, what to. So I would see a trend where it's not the no Ops kind of guys, as they say, "No, no, no." It's no, don't mess with the current operational plumbing. >> Glenn: Right. >> But we got to get to yes for the new capabilities. So there's a shift in the Cloud Native. Your thoughts and reaction to that Glenn. >> Yeah, so it's basically like I set myself up so that I'm doing a whole drop the forklift with everything in there, like a crated replacement. Networking has always been this way. I'm not saying no to you, I'm just saying not right now. I do my maintenance three times a year on the third Sunday of the second month and the moon's in the right place, and I make sure that I've 50/60 changes. I've got 20 engineers on call, we do everything in order. We've got a rollback plan if something breaks. This is the problem. Network engineers don't do enough changes to build a muscle like the agile developers have seen or CI/CD developers have seen. Where it's like I do a little bit of changes everyday, if something breaks, I roll it back. I do a little bit of changes everyday, and if something breaks I roll it back. That's what we enable because you can do things without breaking the entire system, you can just replace a container, you can move on. In networking, the classic networking, you're stack modeling so many changes and so many new things that everything has to be a greenfield deployment. How many times have you heard that? Like, "Oh this thing would be perfect "for our Greenfield Data Center. "We're going to do everything different "in this Greenfield Data Center." And that doesn't work. >> You don't get a mulligan in network and you realize they say, look this is a good point, great conversation. I think that is a very good follow up topic because developing those muscles is an operational practice as well as understanding what you're building. You got to know what the outcome looks like, this is where we're starting to get into more of these agile apps. And you guys are at the front end of it, and I think this is a sea change, cloud 2.0. >> Yeah, it is. >> Quick plug for the company. Take the last minute to explain what you guys are up to, hiring, funding. What are you guys looking for? Give a quick plug for the company. >> Yeah, I mean, we're doing great. Always hiring, everybody always is if you're a cutting edge startup. We're always looking for great new talent. Yeah, we're moving forward with our next round of funding plans. We're looking at expanding the growth of the company or go to market. Doubling down on our engineering. We're just delivering now our Kubernetes fabric capabilities, so that's the next big functional release that we're actually already delivered the beta of. So taking Kubernetes and actually using it as a distributed fabric. So a lot of exciting things happening technology wise. A lot of customer engagements happening. So yeah, it's great. >> Glenn, what are you excited about now? Obviously Kubernetes, we know you're excited about. >> Oh yeah. >> But what's getting you excited. >> So the dual process that we have where we actually use, we're doing stuff in Kubernetes that nobody else is doing because we have a version that runs on the switch. And it manages all the containers local and then it also talks to a big controller. It's fixing that SDN issue, right? Where you have this SDN controller that manages everything in the data plane, and it controls my devices, and it uses open flow to do this. And it has a headless operation in case the controllers go away. Oh and if I need another controller, here's another one, so now I've got two controllers. It gets really messy, you got to buy a lot of gear to manage it. Now we're saying, 'Okay, you've got 'Kubernetes running local. 'You don't want to have a Kubernetes cluster, don't bother.' It just uses it autonomously. 'You want to manage it as a fabric like Dom says. 'Now you can use the Kubernetes fabric 'that you've already built. 'There are Kubernetes masters that 'you've already built for the applications.' And now we can start to really imbed some really neat operational stuff in there. Things that as a network engineer took me years of breaking stuff and then fixing it to learn, we can start putting those operational intelligence in the operating system itself to make it react to problems in the network and solve things before waking people up at three a.m.. >> This takes policy to a whole nother level. >> Absolutely. >> It's a whole nother intelligence layer. >> Yeah, if this is broken, do this, cut off the arm to save the rest of the animal. And don't wake people up and troubleshoot stuff, troubleshoot stuff during the day when everybody's there and happy and awake. >> Guys congratulations. SnapRoute, hot startup. Networking is the real area for cloud 2.0. You got realtime, you got data, you got to move packets from A to B, you got to store them, you got to move compute around, you need to (laughs) move stuff around the cloud to distribute to networks. Thanks for coming in. >> Thanks. >> Thank you. >> Appreciate it. >> Thanks for having us. >> I'm John Furrier for Cube Conversation here in Palo Alto which SnapRoute, thanks for watching. (upbeat jazz music)

>> live from Boston, Massachusetts. It's the Cube covering A W s reinforce 2019 brought to you by Amazon Web service is and its ecosystem partners. >> Okay, welcome back. Everyone's two cubes Live coverage here in Boston, Massachusetts, for AWS reinforce. This is Amazon Web services Inaugural conference around Cloud security There first of what? Looks like we'll be more focused events around deep dive security to reinvent for security. But not no one's actually saying that. But it's not a summit. It's ah, branded event Reinforce. We're hearing Mark Ryland off director Office of the Sea. So at eight of us, thanks for coming back. Good to see you keep alumni. Yeah, I'm staying here before It's fun. Wait A great Shadow 80 Bucks summit in New York City Last year we talked about some of the same issues, but now you have a dedicated conference here on the feedback from the sea. So as we've talked to and the partners in the ecosystem is, it's great to have an event where they go deep dives on some of the key things that are really, really important to security. Absolutely. This is really kind of a vibe that how reinvents started, right? So reinventing was a similar thing for commercial. You're deep, not easy to us. Three here, deeper on Amazon. But with security. Yeah, security lens on some of the same issues. One thing that happened >> and kind of signal to us that we needed an event like this over the years with reinvent was consistently over the years, the security and compliance track became one of the most important tracks that was oversubscribed in overflow rooms and like, Hey, there's a signal here, right? And so, but at the same time, we wanted to be able to reach on audience. Maybe they wouldn't go to reinvent because they thought I'd say It's all the crazy Dale Ops guys were doing this cloud thing. But now, of course, they're getting the strong message in their security organizations like, Hey, we're doing cloud. Or maybe as a professional, I need to really get smart about this stuff. So it's been a nice transition from still a lot of the same people, but definitely the different crowd that's coming here and was a cross pollination between multiple and I was >> just at Public sector summit. They about cyber security from a national defense and intelligence standpoint. Obviously, threesome Carlson leads That team you got on the commercial side comes like Splunk who our data and they get into cyber. So you started to see kind of the intersection of all the kind of Amazon ecosystems kind of coming around security, where it's now part of its horizontal. It's not just these are the security vendors and partners writes pretty much everyone's kind of becoming native into thinking about security and the benefits that you guys have talk about that what Amazon has to have a framework, a posture. Yeah, they call it shared responsibility. But I get that you're sharing this with the ecosystem. Makes sense. Yeah, talk about the Amazon Web service is posture for this new security >> world. Well, the new security world is if you look at like a typical security framework like Mist 853 120 50 controls all these different things you need to worry about if you're a security professional. And so what eight obvious able to do is say, look, there's a whole bunch of these that we can take care of on your behalf. There's some that we'll do some things and you got to do some things and there's some There's still your responsibility, but we'll try to make it easy for you to do those parts. So right off the bat we can get a lot of wins from just hey, there's a lot of things will just take care of. And you could essentially delegate to us. And for the what remain, You'll take your expertise and you'll re focus it on more like applications security. There still may be some operating systems or whatever. If using virtual machine service, you still have to think about that. But even there, we'll use we have systems Manager will make it easy to do patch management, updating, et cetera. And if you're willing to go all the way to is like a lambda or some kind of a platform capability, make it super easy because all you gotta do is make sure your code is good and we'll take care of all the infrastructure automatically on your behalf so that share responsibility remains. There's a lot of things you still need to be careful about and do well, but your experts can refocus. They could be very you know like it's just a lot less to worry about it. So it's really a message for howto raise the bar for the whole community, but yet still have >> that stays online with the baby value properties, which is, you know, build stuff, ship fast, lower prices. I mazon ethos in general. But when you think about the core A. W. S what made it so great Waas you can reduce the provisioning of resource is to get something up and running. And I think that's what I'm taking away from the security peace you could say. We know Amazon Web service is really well, and we're gonna do these things. You could do that so us on them and then parts to innovate. So I get that. That's good. The other trend I want to get your reaction to is comments we've had on the Cube with si SOS and customers is a trend towards building in house coding security. Your point about Lambda some cool things air being enabled through a B s. There's a real trend of big large companies with security teams just saying, Hey, you know what? I wanna optimize my talent to code and be security focused on use cases that they care about. So you know, Andy Jazz talks about builders. You guys are about builders you got cos your customers building absolutely. Yet they don't want Tonto, but they are becoming security. So you have a builder mindset going on in the big enterprises. >> Yes, talk about that dynamic. That's a That's a really important trend. And we see that even in security organizations which historically were full of experts but not full of engineers and people that could write code. And what we're seeing now is people say, Look, I have all this expertise, but I also see that with a software defined the infrastructure and everything's in a P I. If I pair up in engineering team with a security professional team, then well, how good things will happen because the security specials will say, Gosh, I do this repetitive task all the time. Can you write code to do that like, Yeah, we can write code to do that. So now I can focus on things that require judgment instead of just more rep repetitive. So So there's a really nice synergy there, and our security customers are becoming builders as well, and they're codifying if you moment expression in code, a policy that used to be in a document. And now they write code this as well. If that policy is whatever password length or how often we rode a credentials, whatever the policy is where Icho to ensure that that actually happening. So it's a real nice confluence of security expertise with the engineering, and they're not building the full stack >> themselves. This becomes again Aki Agility piece I had one customer on was an SMS business. They imported to eight of US Cloud with three engineers, and they wrote all the Kuban aged code themselves. They could have used, you know, other things, but they wanted to make sure it's stable so they could bring in some suppliers that could add value. So, again, this is new. Used to be this way back in the old days, in House developers build the abs on the mainframe, build the APS on the mini computers and then on I went to outsourcing, so we're kind of back. The insourcing is the big trend now, >> right in with the smaller engineering team, I can do a lot that used to require so many more people with a big waterfall method and long term projects. And now I take all these powerful building blocks and put an engineering team five people or what we would call it to pizza team five or six people off to the side, given 34 weeks, and they can generate a really cool system that would have required months and not years before. So that's a big trend, and it applies across the board, including two security. >> I think there's a sea change, and I think it's clear what I like about this show is this cloud security. But it's also they have the on premises conversation, Mrs Legacy applications that have been secured and or need to be secured as they evolve. And then you got cloud native and all these things together where security has to be built in. Yeah, this is a key theme, so I want to get your thoughts on this notion of built in security from Day one. What's your what's your view on this? And how should customers start thinking >> about it? And >> what did you guys bringing to the table? Well, I think that's just a general say maturation that goes on in the industry, >> whether it's cloud or on Prem is that people realize that the old methods we used to use like, Hey, I'm gonna build a nap And then I'm gonna hand it to the security team and they're gonna put firewalls around it That's not really gonna have a good result. So security by design, having security is equal co aspect of If I'm getting doing an architecture, I look a performance. I look, it cost. I look at security. It's just part of my system designed. I don't think of it as like a bolt on afterwards, so that leads to things like, you know, Secure Dev ops and kind of integration teams through. This could be happening on premises to it's just part of I T. Modernization. But Cloud is clearly a driver as well, and cloud makes it easier because it's all programmable. So things that are still manual on premises, you can do in a more automated getting into a lot of conversations here under the covers, A lot of under the hood conversations here around >> security BC to one of the most popular service is you guys have obviously compute a big part of the mission Land, another of the feature VPC traffic flows, where mirroring was a big announcement. Like we talked about that a lot of talking about the E c two nitro. You gave a talk on that. Did you just unpacked it a little bit because this has been nuanced out there. It's out there people are interested in. What's that talk about inscription is, is in a popular conversation taking minutes? Explain your talk. Sure, So we've talked for now a year and 1/2 >> about how we've essentially rien. Imagine reinvented our virtual machine architecture, too. Go from a primarily soft defined system where you have a mainboard with memory and intel processor and all that kind of a coup treatments of a standard server. And then your virtual ization layer would run a full copy of an operating system, which we call a Dom zero privileged OS that would mediate access between the guest OS is in this and the outside world because it would maintain the device model like how do I talk to a network card? How I talked to a storage device. I talked through the hyper visor, but through also a dom zero Ah, copy of Lennox. A copy of Windows to do all that I owe. So what we just did over the past few years, we begin to take all the things we're running inside that privileged OS and move that into dedicated hardware software, harbor combination where we now have components we call nitro components their actual separate little computers that do dbs processing. They do vpc processing they do instance, storage. So at this point now, we've taken all of the components of that damn zero. We've moved it out into these You could call Cho processors. I almost think of them is like the Nitro controllers. The main processor and the Intel motherboard is a co processor where customer workloads run because the trust now is in these external all systems. And when you go to talk to the outside world from easy to now you're talking through these very trusted, very powerful co processors that do encryption. They do identity management for you. They do a lot of work that's off the main processor, but we can accelerate it. We could be more assured that it's trustworthy. It can it can protect itself from potential types of hacks that might have been exposed if that, say, an encryption key was in the and the main motherboard. Now it's not so it's a long story until one hour version and doing three minutes now. But overall we feel that we built a trustworthy system for virtual. What was the title of talk so people can find it online? So I was just called the night to architecture security implications of the night to architecture. So it's taking information that we had out there. But we're like highlighting the fact that if you're a security professional, you're gonna really like the fact that this system has it has no damn zero. It has no shell. You can't log into the system as a human being. It's impossible to log in. It's all software to find suffer driven, and all the encryption features air in these co processors so we can do like full line made encryption of 100 gigabits of network traffic. It's all encrypted like that's never been done before. Really, in the history of computing, what's the benefit of nitro architectural? Simply not shelter. More trust built into it a trusted root. That's not the main board encryption, off load and more isolation. Because even if I somehow we're toe managed to the impossible combination of facts to get sort of like ownership of that main board, I still don't have access to the outside world. From there, I have to go through a whole another layer of very secure software that mediates between the inner world of where customer were close run and the outside world where the actual cloud is. So it's just a bunch of layers that make things more secure, >> and I'm sure Outpost will have that as well. Can you waste on that? Seem to me to hear about that. Okay, Encryption, encrypt everything. Is it philosophy we heard in the keynote? You also talked about that as well. Um, encrypting traffic on the hour. I didn't talk about what that means. What was talked to you? What's the big conversation around? Encryption within a. W s just inside and outside. What's the main story there? >> There's a lot of pieces to the pie, but a big one that we were talking about this week is a pretty long term project we call Project lever. It was actually named after a ah female cryptographer. Eventually Park team that was help. You know, one of the major factors, including World War Two, are these mathematicians and cryptographers. So we we wanted to do a big scale encryption project. We had a very large scale network and we had, you know, all the features you normally have, but we wanted to make it so that we really encrypted everything when it was outside of our physical control. So we done that took a long time. Huge investment, really exciting now going forward, everything we build. So any time data that customers give to us or have traffic between regions between instances within the same region outside reaches, whenever that traffic leaves our physical control so kind of our building boundaries or gates and guards and going down the street on a fiber optic to another data center, maybe not far away or going inter continent intercontinental links are going sub oceanic links all those links. Now we encrypt all the traffic all the time. >> And what's the benefit of that? So the benefit of that is there. Still, you know, it's it's obscure, >> but there is a threat model where, you know, governments have special submarines that are known to exist that go in, sniff those transoceanic links. And potentially a bad guy could somehow get into one of those network junction points or whatever. Inspect traffic. It's not, I would say, a high risk, but it's possible now. That's a whole nother level of phishing attacks. Phishing attack, submarine You're highly motivated to sniff that line couldn't resist U. S. O. So that's now so people could feel comfortable that that protection exists and even things like here's a kind of a little bit of scare example. But we have customers that say, Look, I'm a European customer and I have a very strong sense of regional reality. I wanna be inside the European community with all my data, etcetera, and you know, what about Brexit? So now I've got all this traffic going through. A very large Internet peering point in London in London won't be part of Europe anymore according to kind of legal norms. So what are you doing in that case? Unless they Well, how about this? How about if yes, the packets are moving through London, but they're always encrypted all the time. Does that make you feel good? Yeah, that makes me feel good. I mean, I so my my notion of work as extra territorial extra additional congee modified to accept the fact that hey, if it's just cipher text, it's not quite the same as unscripted. >> People don't really like. The idea of encrypted traffic. I mean, just makes a lot of sense. Why would absolutely Why wouldn't you want to do that right now? Final question At this event, a lot of attendee high, high, high caliber people on the spectrum is from biz dab People building out the ecosystem Thio Hardcore check. He's looking under the hood to see SOS, who oversee the regime's within companies, either with the C i O or whatever had that was formed and every couple is different. But there's a lot of si SOS here to information security officers. You are in the office of the Chief Security Information officer. So what is the conversations they're having? Because we're hearing a lot of Dev ops like conversations in the security bat with a pretty backdrop about not just chest undead, but hack a phone's getting new stuff built and then moving into production operations. Little Deb's sec up So these kinds of things, we're all kind of coming together. What are you hearing from those customers inside Amazon? Because I know you guys a customer driven in the customers in the sea SOS as your customer. What are they saying? What are they asking for? So see, so's our first getting their own minds around >> this big technical transformations that are happening on dhe. They're thinking about risk management and compliance and things that they're responsible for. They've got a report to a board or a board committee say, Hey, we're doing things according to the norms of our industry or the regulated industries that we sit in. So they're building the knowledge base and the expertise and the teams that can translate from this sort of modern dev ops e thing to these more traditional frameworks like, Hey, I've got this oversight by the Securities Exchange Commission or by the banking regulators, or what have you and we have to be able to explain to them why our security posture not only is maintained, it in some ways improved in these in this new world. So they're they're challenge now is both developing their own understanding, which I think they're doing a good job at, but also kind of building this the muscle of the strength. The terminology translate between these new technologies, new worlds and more traditional frameworks that they sit within and people who give oversight over them. So you gotta risk. So there's risk committees on boards of these large publics organizations, and the risk committees don't know a lot about cloud computing. So s O they're part of what they do now is they do that translation function and they can say, Look, I've I've got assurance is based on my work that I do in the technology and my compliance frameworks that I could meet the risk profiles that we've traditionally met in other ways with this new technology. So it's it's a pretty interesting >> had translations with the C I A. Certainly in public sector, those security oriented companies, a cz well, as the other trend, they're gonna educate the boards and they're secure and not get hacked the obsolete. And then there's the innovation side of it. Yeah, we actually gotta build out. Yes. This is what we just talked about a big change for our C says. That we talk to and work with all the time is that hey, we're in engineering community now. We didn't used to write a lot of code, and now we do. We're getting strong in that way. Or else we're parting very closely with an engineering team who has dedicated teams that support our security requirements and build the tools. We need to know that things are going well from our perspective. So that's a really cool, I think, changing that. I think that is probably one >> of my favorite trends that I see because he really shows the criticality of security was pretty much all critically, only act. But having that code coding focus really shows that they're building in house use case that they care about and the fact that I can now get native network traffic. Yeah, and you guys are exposing new sets of service is with land and other things >> over the top. >> It just makes for a good environment to do these clouds. Security things. That seems to be the show >> in a nutshell. Yeah, I think that's one of the nice thing about this show. Is It's a very positive energy here. It's not like the fear and scary stuff sometimes hear it. Security conference is like a the sky's falling by my product kind of thing Here. It's much more of a collaborative like, Hey, we got some serious challenges. There's some bad guys out there. They're gonna come after us. But as a community using new tooling, new techniques, modern approaches, modernization generally like let's get rid of a lot of these crusty old systems we've never updated for 10 or 20 years. It's a positive energy, which is really exciting. Good Mark, get your insights out. So this is your wheelhouse Show. Congratulations. >> You got to ask you the question. Just take your see. So Amazon had off just as an industry participant riding this way, being involved in it. What is the most important story that needs to be told in the press? In the media that should be told what's as important. Either it's being told it, then should be amplified or not being told and be written out. What's the What's the top story? I don't think that even after all this time that you know when people >> hear public cloud computing. They still have this kind of instinctive reaction like, Oh, that sounds kind of scary or a little bit risky and, you know, way need to get to the point where those words don't elicit some sense of risk in people's minds, but rather elicit like, Oh, cool, that's gonna help me be secure instead of being a challenge. Now that's a journey, and people have to get there, and our customers who go deep, very consistently, say, And I'm sure you've had them say to you, Hey, I feel more confident in my cloud based security. Then I do my own premises security. But that's still not the kind of the initial reaction. And so were we still have a ways, a fear based mentality. Too much more >> of a >> Yeah. Modernization base like this is the modern way to get the results in the outcomes I want, and cloud is a part of that, and it doesn't not only doesn't scare me, I want to go there because it's gonna take a community as well. Yeah, Mark, thanks so much for coming back on the greatest. Be hearing great Mark Mark Riley, direct of the office of the chief information security at Amazon Web services here, sharing his inside, extracting the signal. But the top stories and most important things >> being being >> said and discussed and executed here, it reinforced on the Cube. Thanks for watching. We'll be right back with more after this short break.

>> Hello everyone. Welcome to this CUBE conversation. I'm John Furrier host like you here in our Palo Alto studio here in Palo Alto. Here with Dominic Wilde, known as Dom, CEO of SnapRoute, a hot new startup. A great venture. Backers don. Welcome to skip conversation. So love having to start ups. And so talk about Snape route the company because you're doing something interesting that we've been covering your pretty aggressively the convergence between Dev Ops and Networking. We've known you for many, many years. You were a former Hewlett Packard than you woodpecker enterprise running the networking group over there. You know, networking. And you're an operator. Snap rows. Interesting, because, um, great names back behind it. Big venture backers. Lightspeed Norwest, among others. Yes. Take a minute. Explain what? A SnapRoute. >> So SnapRoute was founded to really address one of the big, big problems we see in infrastructure, which is that, you know, essentially the network gets in the way of the deployment the rapid and angel deployment of applications. And so in the modern environment that we're in, you know, the business environment, highly competitive environment of disruption, continuous disruption going on in our industry, every company out there is constantly looking over their shoulder is, you know, making sure that they're moving fast enough there innovating fast enough that they don't want to be disrupted. They don't want to be overrun by, you know, a new upstart. And in order to do that, you know the application is is actually the work product that you really want to deploy, that you you want to roll out, and you want to be able to do that on a continuous basis. You want to be really agile about how you do it. And, quite frankly, when it comes to infrastructure, networking has been fifteen years behind the rest of the infrastructure and enabling that it's, ah, it's a big roadblock. It's obviously, you know, some of the innovations and developments and networking of lag behind other areas on what we snap Brown set out to do was to say, You know, look, if we're if we're going to bring networking forward and we're going to try and solve some of these problems, how do we do that? In a way, architecturally, that will enable networking to become not just a part of Ah, you know a cloud native infrastructure but actually enable those those organizations to drive forward. And so what we did was we took all of our sort of devops principles and Dev ups tools, and we built a network operating system from the ground up using devops principles, devops architectures and devops tools. And so what we're delivering is a cloud native network operating system that is built entirely on containers and is delivered is a micro services architecture on the big...one of the big value propositions that we deliver is what we call see a CD for networking, which is your continuous integration. Continuous deployment is obviously, you know, Big devops principal there. But doing that for networking, allowing a network to be constantly up enabling network Teo adapt to immutable infrastructure principles. You know we're just replacing pieces that need to be replaced. Different pieces of the operating system can be replaced If there's a security vulnerability, for instance, or if there's ah, bugger and you feature needed so you know we can innovate quicker. We can enable the network to be more reliable, allow it to be more agile, more responsive to the needs of the organization on all of this, fundamentally means that your Operation shins model now becomes ah, lot more unified. A lot more simple. You. Now, we now enable the net ox teams to become a sort of more native part of the conversation with devils. Reduce the tension there, eliminate any conflicts and everything. And we do that through this. You know, this innovative offices. >> Classically, the infrastructure is code ethos. >> Yeah, exactly right. I mean, it's you know, a lot of people have been talking about infrastructure is code for a long, long time. But what we really do, I mean, if if you deploy our network operating system you employ onto the bare metal switching, then you really enable Dev ops to hang have, you know, I take control and to drive the network in the way they want using their native tool chains. So, you know, Cuba Netease, for instance, ears. You know that the big growing dev ops orchestration to all of the moment. In fact, we think it's more than of the moment. You know, I've never seen in the industry that sort of, you know, this kind of momentum behind on open source initiative like there is behind Cuba. Netease. And we've taken communities and baked it natively into the operating system. Such that now our network operating system that runs on a physical switch can be a native part off that communities and develops tool >> Dom, I want to get to the marketplace, dynamics. Kind of what's different. Why now? But I think what's interesting about SnapRoute you're the chief of is that it's a venture back with big names? Yeah. Lightspeed, Norwest, among others. It's a signal of a wave that we've been covering people are interested in. How do you make developers deploy faster, more agility at scale, on premises and in clouds. But I want you to before we get there, want to talk about the origin story of company? Yeah. Why does it exist? How did it come to bear you mentioned? Operation is a big part of cloud to cloud is about operating model so much a company. Yes. This is the big trend. That's the big way. But how did it all get started? What's the SnapRoute story? >> Yeah, it's an interesting story. Our founders were actually operators at at Apple back in the day, and they were responsible for building out some of Apple's biggest. You know, data centers for their sort of customer facing services, like, you know, like loud iTunes, all those good things and you know they would. They were tasked with, sort of, you know, sort of modernizing the operational model with with those data centers and, you know, and then they, like many other operators, do you know, had a sense of community and worked with their peers. You know, another big organizations, even you know, other hyper scale organizations and wanted to learn from what they did on DH. What they recognised was that, you know, cos like, you know, Google and Facebook and Microsoft is urine things. They had done some incredible things and some incredible innovations around infrastructure and particularly in networking, that enabled them to Dr Thie infrastructure from A from a Devil ops perspective and make it more native. But those words that if you know, fairly tailored for there, if you know, for their organizations and so what they saw was the opportunity to say, Well, you know, there's there's many other organizations who are delivering, you know, infrastructure is a service or SAS, or you know, who are just very large enterprises who are acting as these new cloud service providers. And they would have a need to, you know, to also have, you know, tools and capabilities, particularly in the network, to enable the network to be more responsive, more to the devil apps like. And so, you know, they they they founded SnapRoute on that principle that, you know, here's the problem that we know we can solve. It's been solved, you know, some degree, but it's an architectural problem, and it's not about taking, You know, all of the, you know, the last twenty five years of networking knowledge and just incrementally doing a sort of, you know, dot upgrade and, you know, trying to sort of say, Hey, we're just add on some AP eyes and things. You really needed to start from the ground up and rethink this entirely from an architectural perspective and design the network operating system as on with Dev ups, tools and principles. So they started the company, you know, been around just very late two thousand fifteen early two thousand sixteen. >> And how much money have you read >> The last around. We are Siri's, eh? We took in twenty five million. >> And who were the venture? >> It was Lightspeed Ventures on DH Norwest. And we also had some strategic investment from Microsoft Ventures and from teams >> from great name blue chips. What was their interest? What was their thesis? Well, and you mentioned the problem. What was the core problem that you're solving that they were attracted to? Why would that why was the thirst with such big name VCs? >> Yeah, I mean, I think it was, you know, a zip said, I think it's the the opportunity to change the operational more. And I think one of the big things that was very different about our company is and, you know, we like to say, you know, we're building for effort. Operators, by operators, you know, I've found is, as I said, well, more operators from Apple, they have lived and breathed what it is to be woken up at three. A. M. On Christmas Eve toe. You know, some outage and have to, you know, try and figure that out and fight your way through a legacy kind of network and figure out what's going on. So you know, so they empathize with what that means and having that DNA and our company is incredibly meaningful in terms of how we build that you know the product on how we engage with customers. We're not just a bunch of vendors who you know we're coming from, you know, previous spender backgrounds. Although I do, you know, I bring to the table the ability to, you know, to deliver a package and you know, So there's just a cloud scale its clouds, Gail. It's it's but it's It's enabling a bridge if you like. If you look at what the hyper scales have done, what they're achieving and the operational models they have, where a if you like a bridge to enable that capability for a much broader set of operators and C. S. P s and as a service companies and dry forward a an aggressive Angela innovation agenda for companies, >> businesses. You know, we always discussing the Cuban. Everyone who watches the Kiev knows I'm always ranting about how cloud providers make their market share numbers, and lot of people include sass, right? I think everyone will be in the SAS business, so I kind of look at the SAS numbers on, say, it's really infrastructures service platform to service Amazon, Google, Microsoft and then, you know, Ali Baba in China. Others. Then you got IBM or one of it's kind of in the big kind of cluster there top. That is a whole nother set of business requirements that sass driven this cloud based. Yeah, this seems to be a really growing market. Is that what you're targeting? And the question is, how do you relate Visa? Visa Cooper? Netease trend? Because communities and these abstraction layers, you're starting to hear things like service mesh, policy based state Full application states up. Is that you trying to that trend explain. >> We're very complimentary, Teo. Those trends, we're, you know, we're not looking to replace any of that, really. And and my big philosophy is, if you're not simplifying something, then you're not really adding back here, you know, what you're doing is complicating matters or adding another layer on top. So so yeah, I mean, we are of value to those companies who are looking at hybrid approaches or have some on prime asset. Our operating system will land on a physical, bare metal switch So you know what? What we do is when you look at it, you know, service most is your message measures and all the other, You know, technologies you talked about with very, very complimentary to those approaches because we're delivering the on underlying network infrastructure on network fabric. Whatever you'd like to call it, that can be managed natively with class native tools, squeezing the alliteration there. But but, you know, it means that you don't need toe add overlays. We don't need to sort of say, Hey, look, the network is this static, archaic thing that's really fragile. And And I mean, if we touch it, it's going to break. So let's just leave it alone and let's let's put some kind of overlay over the top of it on do you know, run over the top? What we're saying is you can collapse that down. Now what you can say, what you can do is you can say, Well, let's make the network dynamic responsive. Let's build a network operating system out of micro services so you can replace parts of it. You can, you know, fix bugs. You can fix security vulnerabilities and you can do all that on the fly without having to schedule outage windows, which is, you know, for a cloud native company or a sass or infrastructure service company. I mean, that's your business. You can't take outage windows. Your business depends on being available all the time. And so we were really changing that fundamentals of a principle of networking and saying, You know, networking is now dynamic, you know, in a very, very native way, but it also integrates very closely with Dev ops. Operational model >> is a lot of innovation that network. We're seeing that clearly around the industry. No doubt everyone sees late and see that comes into multi Cloud was saying that the trend moving the data to the compute coyote again that's a network issue network is now an innovation opportunity. So I gotta ask you, where do you guys see that happening? And I want to ask you specifically talking about the cloud architects out in the marketplace in these enterprises who were trying to figure out about the architecture of clowns. So they know on premises there, moving that into a cloud operations. We see Amazon, they see Google and Microsoft has clouds that might want to engage with have cloud native presence in a hybrid and multi cloud fashion for those cloud architects. What are the things that you like to see them doing? More of that relates to your value problems. In other words, if they're using containers or they're using micro services, is this good or bad? What? What you should enterprise to be working on that ties into your value proposition. >> So I think about this the other way around, actually, if I can kind of turn that turn that question. But on his head, I think what you know, enterprises, you know, organization C, S. P s. I think what they should be doing is focusing on their business and what their business needs. They shouldn't be looking at their infrastructure architecture and saying, you know, okay, how can we, you know, build all these pieces? And then you know what can the business and do on top of that infrastructure? You wanna look at it the other way around? I need to deploy applications rapidly. I need to innovate those applications. I need to, you know, upgrade, change whatever you need to do with those applications. And I need an infrastructure that can be responsive. I need an infrastructure that can be hybrid. I need infrastructure that can be, you know, orchestrated in the hybrid manner on DH. Therefore, I want to go and look for the building blocks out there of those those architectural and infrastructure building blocks out there that can service that application in the most appropriate way to enable the velocity of my business and the innovation from my business. Because at the end of the day, I mean, you know, when we talk to customers, the most important thing T customers, you know, is the velocity of their business. It is keeping ahead in the highly competitive environment and staying so far ahead that you're not going to be disrupted. And, you know, if any element of your infrastructure is holding you back and even you know, you know the most mild way it's a problem. It's something you should address. And we now have the capability to do that for, you know, for many, many years. In fact, you know, I would claim up to today without snap route that you know, you you do not have the ability to remove the network problem. The network is always going to be a boat anchor on your business. It introduces extra cycles. It introduces big security, of underplaying >> the problems of the network and the consequences that prior to snap her out that you guys saw. >> So I take the security issue right? I mean, everybody is very concerned about security today. One of the biggest attack vectors in the security world world today is the infrastructure. It's it's it's so vulnerable. A lot of infrastructure is is built on sort of proprietary software and operating systems. You know, it's very complex. There's a lot of, you know, operations, operational, moves out and change it. So there's there's a lot of opportunity for mistakes to be made. There's a lot of opportunity for, you know, for vulnerabilities to be exposed. And so what you want to do is you want to reduce the threat surface of, you know, your your infrastructure. So one of the things that we can do it SnapRoute that was never possible before is when you look at a traditional network operating system. Andreas, A traditional. I mean, any operating system is out there, other you know, Other >> than our own. >> It's basically a monolithic Lennox blob. It is one blob of code that contains all of the features. And it could be, you know, architect in in a way that it Sze chopped up nicely. But if you're not using certain features, they're still there. And that increases the threat surface with our sat proud plant native network operating system. Because it is a micro services are key picture. If you are not using certain services or features, you can destroy and remove the containers that contain those features and reduce the threat surface of the operating system. And then beyond that, if you do become aware ofthe vulnerability or a threat that you know is somewhere in there, you can replace it in seconds on the fly without taking the infrastructure. Damn, without having to completely replace that whole blob of software causing, you know, an outage window. So that's just one example of, you know, the things we can do. But even when it comes to simple things, like, you know, adding in new services or things because we're containerized service is a ll boot together. It's no, eh? You know it doesn't. It doesn't have a one after the other. It it's all in parallel. So you know this this operating system comes up faster. It's more reliable. It eliminates the risk factors, the security, you know, the issues that you have. It provides native automation capabilities. It natively integrates with, You know, your Dev Ops tool chain. It brings networking into the cloud. Native >> really, really isn't in frustrations. Code is an operating system, so it sounds like your solution is a cloud native operating system. That's correct. That's pretty much the solution. That's it. How do customers engage with you guys? And what do you say? That cloud architect this is Don't tell me what to do. What's the playbook, right? How you guys advice? Because I see this is a new solution. Talk about the solution and your recommendation to architects as they start thinking about building that elastic in that flexible environment. >> Yeah. I mean, I think you know, Ah, big recommendation is, you know, is to embrace, you know, that all the all of the cloud native principles and most of the companies that were talking to, you know, definitely doing that and moving very quickly. But, you know, my recommendation. You know, engaging with us is you should be looking for the network to in naval, your your goals and your you know your applications rather than limiting. I mean, that's that's the big difference that, you know, the people who really see the value in what we do recognize that, you know, the network should be Andi is an asset. It should be enabling new innovation, new capabilities in the business rather than looking at the network as necessary evil where we you know, where we have to get over its limitations or it's holding us back. And so, you know, for any organization that is, you know, is looking at deploying, you know, new switching infrastructure in any way, shape or form. I think, you know, you should be looking at Well, how am I going to integrate this into a dev ops? You know, world, how may going to integrate this into a cloud native world. So as my business moves forward, I'm actually servicing the application in enabling a faster time to service for the application for the business. At the end of the day, that's that's everybody's going, >> you know, we've been seeing in reporting this consistently, and it's even more mainstream now that cloud computing has opened up the aperture of the value and the economics and also the technical innovation around application developers coding faster having the kind of resource is. But it also created a CZ creating a renaissance and networking. So the value of networking and application development that collision is coming together very quickly. So the intersection you guys play. So I'm sure this will resonate well with customers Will as they try to figure out the role the network because against security number one analytics all the things that go into what Sadiq they care about share data, shared coat all this is kind of coming together. So if someone hears this story, they'll go, OK, love this snap around store. I gotta I gotta dig in. How do they engage you? What do you guys sell to them? What's the pitch? Give the quick plug for the company real >> quick. Engaging with us is, you know, is a simple issue. No, come to www snapper out dot com. And you know, you know contacts are up there. You know, we were currently obviously we're a small company. We sell direct, more engaged with, you know, our first customers and deploying our product, you know, right now, and it's going very, very well, and, you know, it's a PSE faras. You know how you know what and when to engage us. I would say you can engage us at any stage and and value whether or not your architect ing a whole new network deploying a new data center. Obviously. Which is, you know, it is an ideal is built from the ground up, but we add value to the >> data center preexisting data saying that wants >> the modernizing data centers. I mean, very want >> to modernize my data center, my candidate. >> So one of the biggest challenges in an existing data center in when one of the biggest areas of tension is at the top of rack switch the top of racks, which is where you connect in your you know, your your application assets, your servers are connected. You're connecting into the into the, you know, first leap into the network. One of the challenges there is. You know, Dev ops engineers, They want Teo, you know, deploy containers. They want to deploy virtual machines they wantto and stuff move stuff, change stuff and they need network engineers to help them to do that. For a network engineer, the least interesting part of the infrastructure is the top Arax. Which it is a constant barrage day in, day, out of request. Hey, can I have a villain? Can have an i p address. Can we move this? And it's not interesting. It just chews up time we alleviate that tension. What we enable you to do is network engineer can you know, deploy the network, get it up and running, and then control what needs to be controlled natively from their box from debits tool chains and allow the devil ups engineers to take control as infrastructure. So the >> Taelon is taking the stress out of the top of racks. Wedge, take the drama out of this. >> Take that arm around the network. Right. >> So okay, you have the soul from a customer. What am I buying? What do you guys offering? Is that a professional services package? Is it software? Is it a sad solution? Itself is the product. >> It is software, you know. We are. We're selling a network operating system. It lands on, you know, bare metal. He liked white box switching. Ah, nde. We offer that as both perpetual licenses or as a subscription. We also office, um, you know, the value and services around that as well. You know, Andre, right now that is, you know, that is our approach to market. You know, we may expand that, you know, two other services in the future, but that is what we're selling right now. It is a network operating >> system down. Thanks for coming and sharing this story of SnapRoute. Final question for you is you've been in this century. While we've had many conversations we'd love to talk about gear, speeds and feeds. I'll see softwares eating. The world was seeing that we're seeing cloud create massive amounts. Opportunity. You're in a big wave, right? What is this wave look like for the next couple of years? How do you see this? Playing out as Cloud continues to go global and you start to Seymour networking becoming much more innovative. Part of the equation with Mohr developers coming onboard. Faster, more scale. How do you see? It's all playing out in the industry. >> Yeah. So I think the next sort of, you know, big wave of things is really around the operational. But I mean, we've we've we've concentrated for many years in the networking industry on speeds and feeds. And then it was, you know, it's all about protocols and you know how protocol stacks of building stuff. That's all noise. It's really about How do you engage with the network? How do you how do you operate your network to service your business? Quite frankly, you know, you should not even know the network is there. If we're doing a really good job of network, you shouldn't even know about it. And that's where we need to get to is an industry. And you know that's that's my belief is where, where we can take >> it. Low latent. See programmable networks. Great stuff. SnapRoute Dominic. While no one is dominant industry friend of the Cube also keep alumni CEO of Snapper Out. Hot new start up with some big backers. Interesting signal. Programmable networks software Cloud Global all kind of big Party innovation equation. Here in Silicon Valley, I'm showing for with cube conversations. Thanks for watching

>> PA Announcer: Off the plastic tab, and we'll turn on the colors. Welcome to New Orleans. ♪ This is it ♪ ♪ The part when I say I don't want ya ♪ ♪ I'm stronger than I've been before ♪ ♪ This is the part when I set your free ♪ (New Orleans jazz music) ("When the Saints Go Marching In") (rock music) >> PA Announcer: Ladies and gentleman, would you please welcome state of Louisiana chief design officer Matthew Vince and Choice Hotels director of infrastructure services Stacy Nigh. (rock music) >> Well good morning New Orleans, and welcome to my home state. My name is Matt Vince. I'm the chief design office for state of Louisiana. And it's my pleasure to welcome you all to .Next 2018. State of Louisiana is currently re-architecting our cloud infrastructure and Nutanix is the first domino to fall in our strategy to deliver better services to our citizens. >> And I'd like to second that warm welcome. I'm Stacy Nigh director of infrastructure services for Choice Hotels International. Now you may think you know Choice, but we don't own hotels. We're a technology company. And Nutanix is helping us innovate the way we operate to support our franchisees. This is my first visit to New Orleans and my first .Next. >> Well Stacy, you're in for a treat. New Orleans is known for its fabulous food and its marvelous music, but most importantly the free spirit. >> Well I can't wait, and speaking of free, it's my pleasure to introduce the Nutanix Freedom video, enjoy. ♪ I lose everything, so I can sing ♪ ♪ Hallelujah I'm free ♪ ♪ Ah, ah, ♪ ♪ Ah, ah, ♪ ♪ I lose everything, so I can sing ♪ ♪ Hallelujah I'm free ♪ ♪ I lose everything, so I can sing ♪ ♪ Hallelujah I'm free ♪ ♪ I'm free, I'm free, I'm free, I'm free ♪ ♪ Gritting your teeth, you hold onto me ♪ ♪ It's never enough, I'm never complete ♪ ♪ Tell me to prove, expect me to lose ♪ ♪ I push it away, I'm trying to move ♪ ♪ I'm desperate to run, I'm desperate to leave ♪ ♪ If I lose it all, at least I'll be free ♪ ♪ Ah, ah ♪ ♪ Ah, ah ♪ ♪ Hallelujah, I'm free ♪ >> PA Announcer: Ladies and gentlemen, please welcome chief marketing officer Ben Gibson ♪ Ah, ah ♪ ♪ Ah, ah ♪ ♪ Hallelujah, I'm free ♪ >> Welcome, good morning. >> Audience: Good morning. >> And welcome to .Next 2018. There's no better way to open up a .Next conference than by hearing from two of our great customers. And Matthew, thank you for welcoming us to this beautiful, your beautiful state and city. And Stacy, this is your first .Next, and I know she's not alone because guess what It's my first .Next too. And I come properly attired. In the front row, you can see my Nutanix socks, and I think my Nutanix blue suit. And I know I'm not alone. I think over 5,000 people in attendance here today are also first timers at .Next. And if you are here for the first time, it's in the morning, let's get moving. I want you to stand up, so we can officially welcome you into the fold. Everyone stand up, first time. All right, welcome. (audience clapping) So you are all joining not just a conference here. This is truly a community. This is a community of the best and brightest in our industry I will humbly say that are coming together to share best ideas, to learn what's happening next, and in particular it's about forwarding not only your projects and your priorities but your careers. There's so much change happening in this industry. It's an opportunity to learn what's coming down the road and learn how you can best position yourself for this whole new world that's happening around cloud computing and modernizing data center environments. And this is not just a community, this is a movement. And it's a movement that started quite awhile ago, but the first .Next conference was in the quiet little town of Miami, and there was about 800 of you in attendance or so. So who in this hall here were at that first .Next conference in Miami? Let me hear from you. (audience members cheering) Yep, well to all of you grizzled veterans of the .Next experience, welcome back. You have started a movement that has grown and this year across many different .Next conferences all over the world, over 20,000 of your community members have come together. And we like to do it in distributed architecture fashion just like here in Nutanix. And so we've spread this movement all over the world with .Next conferences. And this is surging. We're also seeing just today the current count 61,000 certifications and climbing. Our Next community, close to 70,000 active members of our online community because .Next is about this big moment, and it's about every other day and every other week of the year, how we come together and explore. And my favorite stat of all. Here today in this hall amongst the record 5,500 registrations to .Next 2018 representing 71 countries in whole. So it's a global movement. Everyone, welcome. And you know when I got in Sunday night, I was looking at the tweets and the excitement was starting to build and started to see people like Adile coming from Casablanca. Adile wherever you are, welcome buddy. That's a long trip. Thank you so much for coming and being here with us today. I saw other folks coming from Geneva, from Denmark, from Japan, all over the world coming together for this moment. And we are accomplishing phenomenal things together. Because of your trust in us, and because of some early risk candidly that we have all taken together, we've created a movement in the market around modernizing data center environments, radically simplifying how we operate in the services we deliver to our businesses everyday. And this is a movement that we don't just know about this, but the industry is really taking notice. I love this chart. This is Gartner's inaugural hyperconvergence infrastructure magic quadrant chart. And I think if you see where Nutanix is positioned on there, I think you can agree that's a rout, that's a homerun, that's a mic drop so to speak. What do you guys think? (audience clapping) But here's the thing. It says Nutanix up there. We can honestly say this is a win for this hall here. Because, again, without your trust in us and what we've accomplished together and your partnership with us, we're not there. But we are there, and it is thanks to everyone in this hall. Together we have created, expanded, and truly made this market. Congratulations. And you know what, I think we're just getting started. The same innovation, the same catalyst that we drove into the market to converge storage network compute, the next horizon is around multi-cloud. The next horizon is around whether by accident or on purpose the strong move with different workloads moving into public cloud, some into private cloud moving back and forth, the promise of application mobility, the right workload on the right cloud platform with the right economics. Economics is key here. If any of you have a teenager out there, and they have a hold of your credit card, and they're doing something online or the like. You get some surprises at the end of the month. And that surprise comes in the form of spiraling public cloud costs. And this isn't to say we're not going to see a lot of workloads born and running in public cloud, but the opportunity is for us to take a path that regains control over infrastructure, regain control over workloads and where they're run. And the way I look at it for everyone in this hall, it's a journey we're on. It starts with modernizing those data center environments, continues with embracing the full cloud stack and the compelling opportunity to deliver that consumer experience to rapidly offer up enterprise compute services to your internal clients, lines of businesses and then out into the market. It's then about how you standardize across an enterprise cloud environment, that you're not just the infrastructure but the management, the automation, the control, and running any tier one application. I hear this everyday, and I've heard this a lot already this week about customers who are all in with this approach and running those tier one applications on Nutanix. And then it's the promise of not only hyperconverging infrastructure but hyperconverging multiple clouds. And if we do that, this journey the way we see it what we are doing is building your enterprise cloud. And your enterprise cloud is about the private cloud. It's about expanding and managing and taking back control of how you determine what workload to run where, and to make sure there's strong governance and control. And you're radically simplifying what could be an awfully complicated scenario if you don't reclaim and put your arms around that opportunity. Now how do we do this different than anyone else? And this is going to be a big theme that you're going to see from my good friend Sunil and his good friends on the product team. What are we doing together? We're taking all of that legacy complexity, that friction, that inability to be able to move fast because you're chained to old legacy environments. I'm talking to folks that have applications that are 40 years old, and they are concerned to touch them because they're not sure if they can react if their infrastructure can meet the demands of a new, modernized workload. We're making all that complexity invisible. And if all of that is invisible, it allows you to focus on what's next. And that indeed is the spirit of this conference. So if the what is enterprise cloud, and the how we do it different is by making infrastructure invisible, data centers, clouds, then why are we all here today? What is the binding principle that spiritually, that emotionally brings us all together? And we think it's a very simple, powerful word, and that word is freedom. And when we think about freedom, we think about as we work together the freedom to build the data center that you've always wanted to build. It's about freedom to run the applications where you choose based on the information and the context that wasn't available before. It's about the freedom of choice to choose the right cloud platform for the right application, and again to avoid a lot of these spiraling costs in unanticipated surprises whether it be around security, whether it be around economics or governance that come to the forefront. It's about the freedom to invent. It's why we got into this industry in the first place. We want to create. We want to build things not keep the lights on, not be chained to mundane tasks day by day. And it's about the freedom to play. And I hear this time and time again. My favorite tweet from a Nutanix customer to this day is just updated a lot of nodes at 38,000 feed on United Wifi, on my way to spend vacation with my family. Freedom to play. This to me is emotionally what brings us all together and what you saw with the Freedom video earlier, and what you see here is this new story because we want to go out and spread the word and not only talk about the enterprise cloud, not only talk about how we do it better, but talk about why it's so compelling to be a part of this hall here today. Now just one note of housekeeping for everyone out there in case I don't want anyone to take a wrong turn as they come to this beautiful convention center here today. A lot of freedom going on in this convention center. As luck may have it, there's another conference going on a little bit down that way based on another high growth, disruptive industry. Now MJBizCon Next, and by coincidence it's also called next. And I have to admire the creativity. I have to admire that we do share a, hey, high growth business model here. And in case you're not quite sure what this conference is about. I'm the head of marketing here. I have to show the tagline of this. And I read the tagline from license to launch and beyond, the future of the, now if I can replace that blank with our industry, I don't know, to me it sounds like a new, cool Sunil product launch. Maybe launching a new subscription service or the like. Stay tuned, you never know. I think they're going to have a good time over there. I know we're going to have a wonderful week here both to learn as well as have a lot of fun particularly in our customer appreciation event tonight. I want to spend a very few important moments on .Heart. .Heart is Nutanix's initiative to promote diversity in the technology arena. In particular, we have a focus on advancing the careers of women and young girls that we want to encourage to move into STEM and high tech careers. You have the opportunity to engage this week with this important initiative. Please role the video, and let's learn more about how you can do so. >> Video Plays (electronic music) >> So all of you have received these .Heart tokens. You have the freedom to go and choose which of the four deserving charities can receive donations to really advance our cause. So I thank you for your engagement there. And this community is behind .Heart. And it's a very important one. So thank you for that. .Next is not the community, the moment it is without our wonderful partners. These are our amazing sponsors. Yes, it's about sponsorship. It's also about how we integrate together, how we innovate together, and we're about an open community. And so I want to thank all of these names up here for your wonderful sponsorship of this event. I encourage everyone here in this room to spend time, get acquainted, get reacquainted, learn how we can make wonderful music happen together, wonderful music here in New Orleans happen together. .Next isn't .Next with a few cool surprises. Surprise number one, we have a contest. This is a still shot from the Freedom video you saw right before I came on. We have strategically placed a lucky seven Nutanix Easter eggs in this video. And if you go to Nutanix.com/freedom, watch the video. You may have to use the little scrubbing feature to slow down 'cause some of these happen quickly. You're going to find some fun, clever Easter eggs. List all seven, tweet that out, or as many as you can, tweet that out with hashtag nextconf, C, O, N, F, and we'll have a random drawing for an all expenses paid free trip to .Next 2019. And just to make sure everyone understands Easter egg concept. There's an eighth one here that's actually someone that's quite famous in our circles. If you see on this still shot, there's someone in the back there with a red jacket on. That's not just anyone. We're targeting in here. That is our very own Julie O'Brien, our senior vice president of corporate marketing. And you're going to hear from Julie later on here at .Next. But Julie and her team are the engine and the creativity behind not only our new Freedom campaign but more importantly everything that you experience here this week. Julie and her team are amazing, and we can't wait for you to experience what they've pulled together for you. Another surprise, if you go and visit our Freedom booths and share your stories. So they're like video booths, you share your success stories, your partnerships, your journey that I talked about, you will be entered to win a beautiful Nutanix brand compliant, look at those beautiful colors, bicycle. And it's not just any bicycle. It's a beautiful bicycle made by our beautiful customer Trek. I actually have a Trek bike. I love cycling. Unfortunately, I'm not eligible, but all of you are. So please share your stories in the Freedom Nutanix's booths and put yourself in the running, or in the cycling to get this prize. One more thing I wanted to share here. Yesterday we had a great time. We had our inaugural Nutanix hackathon. This hackathon brought together folks that were in devops practices, many of you that are in this room. We sold out. We thought maybe we'd get four or five teams. We had to shutdown at 14 teams that were paired together with a Nutanix mentor, and you coded. You used our REST APIs. You built new apps that integrated in with Prism and Clam. And it was wonderful to see this. Everyone I talked to had a great time on this. We had three winners. In third place, we had team Copper or team bronze, but team Copper. Silver, Not That Special, they're very humble kind of like one of our key mission statements. And the grand prize winner was We Did It All for the Cookies. And you saw them coming in on our Mardi Gras float here. We Did It All for Cookies, they did this very creative job. They leveraged an Apple Watch. They were lighting up VMs at a moments notice utilizing a lot of their coding skills. Congratulations to all three, first, second, and third all receive $2,500. And then each of them, then were able to choose a charity to deliver another $2,500 including Ronald McDonald House for the winner, we did it all for the McDonald Land cookies, I suppose, to move forward. So look for us to do more of these kinds of events because we want to bring together infrastructure and application development, and this is a great, I think, start for us in this community to be able to do so. With that, who's ready to hear form Dheeraj? You ready to hear from Dheeraj? (audience clapping) I'm ready to hear from Dheeraj, and not just 'cause I work for him. It is my distinct pleasure to welcome on the stage our CEO, cofounder and chairman Dheeraj Pandey. ("Free" by Broods) ♪ Hallelujah, I'm free ♪ >> Thank you Ben and good morning everyone. >> Audience: Good morning. >> Thank you so much for being here. It's just such an elation when I'm thinking about the Mardi Gras crowd that came here, the partners, the customers, the NTCs. I mean there's some great NTCs up there I could relate to because they're on Slack as well. How many of you are in Slack Nutanix internal Slack channel? Probably 5%, would love to actually see this community grow from here 'cause this is not the only even we would love to meet you. We would love to actually do this in a real time bite size communication on our own internal Slack channel itself. Now today, we're going to talk about a lot of things, but a lot of hard things, a lot of things that take time to build and have evolved as the industry itself has evolved. And one of the hard things that I want to talk about is multi-cloud. Multi-cloud is a really hard problem 'cause it's full of paradoxes. It's really about doing things that you believe are opposites of each other. It's about frictionless, but it's also about governance. It's about being simple, and it's also about being secure at the same time. It's about delight, it's about reducing waste, it's about owning, and renting, and finally it's also about core and edge. How do you really make this big at a core data center whether it's public or private? Or how do you really shrink it down to one or two nodes at the edge because that's where your machines are, that's where your people are? So this is a really hard problem. And as you hear from Sunil and the gang there, you'll realize how we've actually evolved our solutions to really cater to some of these. One of the approaches that we have used to really solve some of these hard problems is to have machines do more, and I said a lot of things in those four words, have machines do more. Because if you double-click on that sentence, it really means we're letting design be at the core of this. And how do you really design data centers, how do you really design products for the data center that hush all the escalations, the details, the complexities, use machine-learning and AI and you know figure our anomaly detection and correlations and patter matching? There's a ton of things that you need to do to really have machines do more. But along the way, the important lesson is to make machines invisible because when machines become invisible, it actually makes something else visible. It makes you visible. It makes governance visible. It makes applications visible, and it makes services visible. A lot of things, it makes teams visible, careers visible. So while we're really talking about invisibility of machines, we're talking about visibility of people. And that's how we really brought all of you together in this conference as well because it makes all of us shine including our products, and your careers, and your teams as well. And I try to define the word customer success. You know it's one of the favorite words that I'm actually using. We've just hired a great leader in customer success recently who's really going to focus on this relatively hard problem, yet another hard problem of customer success. We think that customer success, true customer success is possible when we have machines tend towards invisibility. But along the way when we do that, make humans tend towards freedom. So that's the real connection, the yin-yang of machines and humans that Nutanix is really all about. And that's why design is at the core of this company. And when I say design, I mean reducing friction. And it's really about reducing friction. And everything we do, the most mundane of things which could be about migrating applications, spinning up VMs, self-service portals, automatic upgrades, and automatic scale out, and all the things we do is about reducing friction which really makes machines become invisible and humans gain freedom. Now one of the other convictions we have is how all of us are really tied at the hip. You know our success is tied to your success. If we make you successful, and when I say you, I really mean Main Street. Main Street being customers, and partners, and employees. If we make all of you successful, then we automatically become successful. And very coincidentally, Main Street and Wall Street are also tied in that very same relation as well. If we do a great job at Main Street, I think the Wall Street customer, i.e. the investor, will take care of itself. You'll have you know taken care of their success if we took care of Main Street success itself. And that's the narrative that our CFO Dustin Williams actually went and painted to our Wall Street investors two months ago at our investor day conference. We talked about a $3 billion number. We said look as a company, as a software company, we can go and achieve $3 billion in billings three years from now. And it was a telling moment for the company. It was really about talking about where we could be three years from now. But it was not based on a hunch. It was based on what we thought was customer success. Now realize that $3 billion in pure software. There's only 10 to 15 companies in the world that actually have that kind of software billings number itself. But at the core of this confidence was customer success, was the fact that we were doing a really good job of not over promising and under delivering but under promising starting with small systems and growing the trust of the customers over time. And this is one of the statistics we actually talk about is repeat business. The first dollar that a Global 2000 customer spends in Nutanix, and if we go and increase their trust 15 times by year six, and we hope to actually get 17 1/2 and 19 times more trust in the years seven and eight. It's very similar numbers for non Global 2000 as well. Again, we go and really hustle for customer success, start small, have you not worry about paying millions of dollars upfront. You know start with systems that pay as they grow, you pay as they grow, and that's the way we gain trust. We have the same non Global 2000 pay $6 1/2 for the first dollar they've actually spent on us. And with this, I think the most telling moment was when Dustin concluded. And this is key to this audience here as well. Is how the current cohorts which is this audience here and many of them were not here will actually carry the weight of $3 billion, more than 50% of it if we did a great job of customer success. If we were humble and honest and we really figured out what it meant to take care of you, and if we really understood what starting small was and having to gain the trust with you over time, we think that more than 50% of that billings will actually come from this audience here without even looking at new logos outside. So that's the trust of customer success for us, and it takes care of pretty much every customer not just the Main Street customer. It takes care of Wall Street customer. It takes care of employees. It takes care of partners as well. Now before I talk about technology and products, I want to take a step back 'cause many of you are new in this audience. And I think that it behooves us to really talk about the history of this company. Like we've done a lot of things that started out as science projects. In fact, I see some tweets out there and people actually laugh at Nutanix cloud. And this is where we were in 2012. So if you take a step back and think about where the company was almost seven, eight years ago, we were up against giants. There was a $30 billion industry around network attached storage, and storage area networks and blade servers, and hypervisors, and systems management software and so on. So what did we start out with? Very simple premise that we will collapse the architecture of the data center because three tier is wasteful and three tier is not delightful. It was a very simple hunch, we said we'll take rack mount servers, we'll put a layer of software on top of it, and that layer of software back then only did storage. It didn't do networks and security, and it ran on top of a well known hypervisor from VMware. And we said there's one non negotiable thing. The fact that the design must change. The control plane for this data center cannot be the old control plane. It has to be rethought through, and that's why Prism came about. Now we went and hustled hard to add more things to it. We said we need to make this diverse because it can't just be for one application. We need to make it CPU heavy, and memory heavy, and storage heavy, and flash heavy and so on. And we built a highly configurable HCI. Now all of them are actually configurable as you know of today. And this was not just innovation in technologies, it was innovation in business and sizing, capacity planning, quote to cash business processes. A lot of stuff that we had to do to make this highly configurable, so you can really scale capacity and performance independent of each other. Then in 2014, we did something that was very counterintuitive, but we've done this on, and on, and on again. People said why are you disrupting yourself? You know you've been doing a good job of shipping appliances, but we also had the conviction that HCI was not about hardware. It was about a form factor, but it was really about an operating system. And we started to compete with ourselves when we said you know what we'll do arm's length distribution, we'll do arm's length delivery of products when we give our software to our Dell partner, to Dell as a partner, a loyal partner. But at the same time, it was actually seen with a lot of skepticism. You know these guys are wondering how to really make themselves vanish because they're competing with themselves. But we also knew that if we didn't compete with ourselves someone else will. Now one of the most controversial decisions was really going and doing yet another hypervisor. In the year 2015, it was really preposterous to build yet another hypervisor. It was a very mature market. This was coming probably 15 years too late to the market, or at least 10 years too late to market. And most people said it shouldn't be done because hypervisor is a commodity. And that's the word we latched on to. That this commodity should not have to be paid for. It shouldn't have a team of people managing it. It should actually be part of your overall stack, but it should be invisible. Just like storage needs to be invisible, virtualization needs to be invisible. But it was a bold step, and I think you know at least when we look at our current numbers, 1/3rd of our customers are actually using AHV. At least every quarter that we look at it, our new deployments, at least 35% of it is actually being used on AHV itself. And again, a very preposterous thing to have said five years ago, four years ago to where we've actually come. Thank you so much for all of you who've believed in the fact that virtualization software must be invisible and therefore we should actually try out something that is called AHV today. Now we went and added Lenovo to our OEM mix, started to become even more of a software company in the year 2016. Went and added HP and Cisco in some of very large deals that we talk about in earnings call, our HP deals and Cisco deals. And some very large customers who have procured ELAs from us, enterprise license agreements from us where they want to mix and match hardware. They want to mix Dell hardware with HP hardware but have common standard Nutanix entitlements. And finally, I think this was another one of those moments where we say why should HCI be only limited to X86. You know this operating systems deserves to run on a non X86 architecture as well. And that gave birth to this idea of HCI and Power Systems from IBM. And we've done a great job of really innovating with them in the last three, four quarters. Some amazing innovation that has come out where you can now run AIX 7.x on Nutanix. And for the first time in the history of data center, you can actually have a single software not just a data plane but a control plane where you can manage an IBM farm, an Power farm, and open Power farm and an X86 farm from the same control plane and have you know the IBM farm feed storage to an Intel compute farm and vice versa. So really good things that we've actually done. Now along the way, something else was going on while we were really busy building the private cloud, we knew there was a new consumption model on computing itself. People were renting computing using credit cards. This is the era of the millennials. They were like really want to bypass people because at the end of the day, you know why can't computing be consumed the way like eCommerce is? And that devops movement made us realize that we need to add to our stack. That stack will now have other computing clouds that is AWS and Azure and GCP now. So similar to the way we did Prism. You know Prism was really about going and making hypervisors invisible. You know we went ahead and said we'll add Calm to our portfolio because Calm is now going to be what Prism was to us back when we were really dealing with multi hypervisor world. Now it's going to be multi-cloud world. You know it's one of those things we had a gut around, and we really come to expect a lot of feedback and real innovation. I mean yesterday when we had the hackathon. The center, the epicenter of the discussion was Calm, was how do you automate on multiple clouds without having to write a single line of code? So we've come a long way since the acquisition of Calm two years ago. I think it's going to be a strong pillar in our overall product portfolio itself. Now the word multi-cloud is going to be used and over used. In fact, it's going to be blurring its lines with the idea of hyperconvergence of clouds, you know what does it mean. We just hope that hyperconvergence, the way it's called today will morph to become hyperconverged clouds not just hyperconverged boxes which is a software defined infrastructure definition itself. But let's focus on the why of multi-cloud. Why do we think it can't all go into a public cloud itself? The one big reason is just laws of the land. There's data sovereignty and computing sovereignty, regulations and compliance because of which you need to be in where the government with the regulations where the compliance rules want you to be. And by the way, that's just one reason why the cloud will have to disperse itself. It can't just be 10, 20 large data centers around the world itself because you have 200 plus countries and half of computing actually gets done outside the US itself. So it's a really important, very relevant point about the why of multi-cloud. The second one is just simple laws of physics. You know if there're machines at the edge, and they're producing so much data, you can't bring all the data to the compute. You have to take the compute which is stateless, it's an app. You take the app to where the data is because the network is the enemy. The network has always been the enemy. And when we thought we've made fatter networks, you've just produced more data as well. So this just goes without saying that you take something that's stateless that's without gravity, that's lightweight which is compute and the application and push it close to where the data itself is. And the third one which is related is just latency reasons you know? And it's not just about machine latency and electrons transferring over the speed light, and you can't defy the speed of light. It's also about human latency. It's also about multiple teams saying we need to federate and delegate, and we need to push things down to where the teams are as opposed to having to expect everybody to come to a very large computing power itself. So all the ways, the way they are, there will be at least three different ways of looking at multi-cloud itself. There's a centralized core cloud. We all go and relate to this because we've seen large data centers and so on. And that's the back office workhorse. It will crunch numbers. It will do processing. It will do a ton of things that will go and produce results for you know how we run our businesses, but there's also the dispersal of the cloud, so ROBO cloud. And this is the front office server that's really serving. It's a cloud that's going to serve people. It's going to be closer to people, and that's what a ROBO cloud is. We have a ton of customers out here who actually use Nutanix and the ROBO environments themselves as one node, two node, three node, five node servers, and it just collapses the entire server closet room in these ROBOs into something really, really small and minuscule. And finally, there's going to be another dispersed edge cloud because that's where the machines are, that's where the data is. And there's going to be an IOT machine fog because we need to miniaturize computing to something even smaller, maybe something that can really land in the palm in a mini server which is a PC like server, but you need to run everything that's enterprise grade. You should be able to go and upgrade them and monitor them and analyze them. You know do enough computing up there, maybe event-based processing that can actually happen. In fact, there's some great innovation that we've done at the edge with IOTs that I'd love for all of you to actually attend some sessions around as well. So with that being said, we have a hole in the stack. And that hole is probably one of the hardest problems that we've been trying to solve for the last two years. And Sunil will talk a lot about that. This idea of hybrid. The hybrid of multi-cloud is one of the hardest problems. Why? Because we're talking about really blurring the lines with owning and renting where you have a single-tenant environment which is your data center, and a multi-tenant environment which is the service providers data center, and the two must look like the same. And the two must look like the same is that hard a problem not just for burst out capacity, not just for security, not just for identity but also for networks. Like how do you blur the lines between networks? How do you blur the lines for storage? How do you really blur the lines for a single pane of glass where you can think of availability zones that look highly symmetric even though they're not because one of 'em is owned by you, and it's single-tenant. The other one is not owned by you, that's multi-tenant itself. So there's some really hard problems in hybrid that you'll hear Sunil talk about and the team. And some great strides that we've actually made in the last 12 months of really working on Xi itself. And that completes the picture now in terms of how we believe the state of computing will be going forward. So what are the must haves of a multi-cloud operating system? We talked about marketplace which is catalogs and automation. There's a ton of orchestration that needs to be done for multi-cloud to come together because now you have a self-service portal which is providing an eCommerce view. It's really about you know getting to do a lot of requests and workflows without having people come in the way, without even having tickets. There's no need for tickets if you can really start to think like a self-service portal as if you're just transacting eCommerce with machines and portals themselves. Obviously the next one is networking security. You need to blur the lines between on-prem and off-prem itself. These two play a huge role. And there's going to be a ton of details that you'll see Sunil talk about. But finally, what I want to focus on the rest of the talk itself here is what governance and compliance. This is a hard problem, and it's a hard problem because things have evolved. So I'm going to take a step back. Last 30 years of computing, how have consumption models changed? So think about it. 30 years ago, we were making decisions for 10 plus years, you know? Mainframe, at least 10 years, probably 20 plus years worth of decisions. These were decisions that were extremely waterfall-ish. Make 10s of millions of dollars worth of investment for a device that we'd buy for at least 10 to 20 years. Now as we moved to client-server, that thing actually shrunk. Now you're talking about five years worth of decisions, and these things were smaller. So there's a little bit more velocity in our decisions. We were not making as waterfall-ish decision as we used to with mainframes. But still five years, talk about virtualized, three tier, maybe three to five year decisions. You know they're still relatively big decisions that we were making with computer and storage and SAN fabrics and virtualization software and systems management software and so on. And here comes Nutanix, and we said no, no. We need to make it smaller. It has to become smaller because you know we need to make more agile decisions. We need to add machines every week, every month as opposed to adding you know machines every three to five years. And we need to be able to upgrade them, you know any point in time. You can do the upgrades every month if you had to, every week if you had to and so on. So really about more agility. And yet, we were not complete because there's another evolution going on, off-prem in the public cloud where people are going and doing reserved instances. But more than that, they were doing on demand stuff which no the decision was days to weeks. Some of these things that unitive compute was being rented for days to weeks, not years. And if you needed something more, you'd shift a little to the left and use reserved instances. And then spot pricing, you could do spot pricing for hours and finally lambda functions. Now you could to function as a service where things could actually be running only for minutes not even hours. So as you can see, there's a wide spectrum where when you move to the right, you get more elasticity, and when you move to the left, you're talking about predictable decision making. And in fact, it goes from minutes on one side to 10s of years on the other itself. And we hope to actually go and blur the lines between where NTNX is today where you see Nutanix right now to where we really want to be with reserved instances and on demand. And that's the real ask of Nutanix. How do you take care of this discontinuity? Because when you're owning things, you actually end up here, and when you're renting things, you end up here. What does it mean to really blur the lines between these two because people do want to make decisions that are better than reserved instance in the public cloud. We'll talk about why reserved instances which looks like a proxy for Nutanix it's still very, very wasteful even though you might think it's delightful, it's very, very wasteful. So what does it mean for on-prem and off-prem? You know you talk about cost governance, there's security compliance. These high velocity decisions we're actually making you know where sometimes you could be right with cost but wrong on security, but sometimes you could be right in security but wrong on cost. We need to really figure out how machines make some of these decisions for us, how software helps us decide do we have the right balance between cost, governance, and security compliance itself? And to get it right, we have introduced our first SAS service called Beam. And to talk more about Beam, I want to introduce Vijay Rayapati who's the general manager of Beam engineering to come up on stage and talk about Beam itself. Thank you Vijay. (rock music) So you've been here a couple of months now? >> Yes. >> At the same time, you spent the last seven, eight years really handling AWS. Tell us more about it. >> Yeah so we spent a lot of time trying to understand the last five years at Minjar you know how customers are really consuming in this new world for their workloads. So essentially what we tried to do is understand the consumption models, workload patterns, and also build algorithms and apply intelligence to say how can we lower this cost and you know improve compliance of their workloads.? And now with Nutanix what we're trying to do is how can we converge this consumption, right? Because what happens here is most customers start with on demand kind of consumption thinking it's really easy, but the total cost of ownership is so high as the workload elasticity increases, people go towards spot or a scaling, but then you need a lot more automation that something like Calm can help them. But predictability of the workload increases, then you need to move towards reserved instances, right to lower costs. >> And those are some of the things that you go and advise with some of the software that you folks have actually written. >> But there's a lot of waste even in the reserved instances because what happens it while customers make these commitments for a year or three years, what we see across, like we track a billion dollars in public cloud consumption you know as a Beam, and customers use 20%, 25% of utilization of their commitments, right? So how can you really apply, take the data of consumption you know apply intelligence to essentially reduce their you know overall cost of ownership. >> You said something that's very telling. You said reserved instances even though they're supposed to save are still only 20%, 25% utilized. >> Yes, because the workloads are very dynamic. And the next thing is you can't do hot add CPU or hot add memory because you're buying them for peak capacity. There is no convergence of scaling that apart from the scaling as another node. >> So you actually sized it for peak, but then using 20%, 30%, you're still paying for the peak. >> That's right. >> Dheeraj: That can actually add up. >> That's what we're trying to say. How can we deliver visibility across clouds? You know how can we deliver optimization across clouds and consumption models and bring the control while retaining that agility and demand elasticity? >> That's great. So you want to show us something? >> Yeah absolutely. So this is Beam as just Dheeraj outlined, our first SAS service. And this is my first .Next. And you know glad to be here. So what you see here is a global consumption you know for a business across different clouds. Whether that's in a public cloud like Amazon, or Azure, or Nutanix. We kind of bring the consumption together for the month, the recent month across your accounts and services and apply intelligence to say you know what is your spent efficiency across these clouds? Essentially there's a lot of intelligence that goes in to detect your workloads and consumption model to say if you're spending $100, how efficiently are you spending? How can you increase that? >> So you have a centralized view where you're looking at multiple clouds, and you know you talk about maybe you can take an example of an account and start looking at it? >> Yes, let's go into a cloud provider like you know for this business, let's go and take a loot at what's happening inside an Amazon cloud. Here we get into the deeper details of what's happening with the consumption of a specific services as well as the utilization of both on demand and RI. You know what can you do to lower your cost and detect your spend efficiency of a dollar to see you know are there resources that are provisioned by teams for applications that are not being used, or are there resources that we should go and rightsize because you know we have all this monitoring data, configuration data that we crunch through to basically detect this? >> You think there's billions of events that you look at everyday. You're already looking at a billon dollars worth of AWS spend. >> Right, right. >> So billions of events, billing, metering events every year to really figure out and optimize for them. >> So what we have here is a very popular international government organization. >> Dheeraj: Wow, so it looks like Russians are everywhere, the cloud is everywhere actually. >> Yes, it's quite popular. So when you bring your master account into Beam, we kind of detect all the linked accounts you know under that. Then you can go and take a look at not just at the organization level within it an account level. >> So these are child objects, you know. >> That's right. >> You can think of them as ephemeral accounts that you create because you don't want to be on the record when you're doing spams on Facebook for example. >> Right, let's go and take a look at what's happening inside a Facebook ad spend account. So we have you know consumption of the services. Let's go deeper into compute consumption, and you kind of see a trendline. You can do a lot of computing. As you see, looks like one campaign has ended. They started another campaign. >> Dheeraj: It looks like they're not stopping yet, man. There's a lot of money being made in Facebook right now. (Vijay laughing) >> So not only just get visibility at you know compute as a service inside a cloud provider, you can go deeper inside compute and say you know what is a service that I'm really consuming inside compute along with the CPUs n'stuff, right? What is my data transfer? You know what is my network? What is my load blancers? So essentially you get a very deeper visibility you know as a service right. Because we have three goals for Beam. How can we deliver visibility across clouds? How can we deliver visibility across services? And how can we deliver, then optimization? >> Well I think one thing that I just want to point out is how this SAS application was an extremely teachable moment for me to learn about the different resources that people could use about the public cloud. So all of you who actually have not gone deep enough into the idea of public cloud. This could be a great app for you to learn about things, the resources, you know things that you could do to save and security and things of that nature. >> Yeah. And we really believe in creating the single pane view you know to mange your optimization of a public cloud. You know as Ben spoke about as a business, you need to have freedom to use any cloud. And that's what Beam delivers. How can you make the right decision for the right workload to use any of the cloud of your choice? >> Dheeraj: How 'about databases? You talked about compute as well but are there other things we could look at? >> Vijay: Yes, let's go and take a look at database consumption. What you see here is they're using inside Facebook ad spending, they're using all databases except Oracle. >> Dheeraj: Wow, looks like Oracle sales folks have been active in Russia as well. (Vijay laughing) >> So what we're seeing here is a global view of you know what is your spend efficiency and which is kind of a scorecard for your business for the dollars that you're spending. And the great thing is Beam kind of brings together you know through its intelligence and algorithms to detect you know how can you rightsize resources and how can you eliminate things that you're not using? And we deliver and one click fix, right? Let's go and take a look at resources that are maybe provisioned for storage and not being used. We deliver the seamless one-click philosophy that Nutanix has to eliminate it. >> So one click, you can actually just pick some of these wasteful things that might be looking delightful because using public cloud, using credit cards, you can go in and just say click fix, and it takes care of things. >> Yeah, and not only remove the resources that are unused, but it can go and rightsize resources across your compute databases, load balancers, even past services, right? And this is where the power of it kind of comes for a business whether you're using on-prem and off-prem. You know how can you really converge that consumption across both? >> Dheeraj: So do you have something for Nutanix too? >> Vijay: Yes, so we have basically been working on Nutanix with something that we're going to deliver you know later this year. As you can see here, we're bringing together the consumption for the Nutanix, you know the services that you're using, the licensing and capacity that is available. And how can you also go and optimize within Nutanix environments >> That's great. >> for the next workload. Now let me quickly show you what we have on the compliance side. This is an extremely powerful thing that we've been working on for many years. What we deliver here just like in cost governance, a global view of your compliance across cloud providers. And the most powerful thing is you can go into a cloud provider, get the next level of visibility across cloud regimes for hundreds of policies. Not just policies but those policies across different regulatory compliances like HIPA, PCI, CAS. And that's very powerful because-- >> So you're saying a lot of what you folks have done is codified these compliance checks in software to make sure that people can sleep better at night knowing that it's PCI, and HIPA, and all that compliance actually comes together? >> And you can build this not just by cloud accounts, you can build them across cloud accounts which is what we call security centers. Essentially you can go and take a deeper look at you know the things. We do a whole full body scan for your cloud infrastructure whether it's AWS Amazon or Azure, and you can go and now, again, click to fix things. You know that had been probably provisioned that are violating the security compliance rules that should be there. Again, we have the same one-click philosophy to say how can you really remove things. >> So again, similar to save, you're saying you can go and fix some of these security issues by just doing one click. >> Absolutely. So the idea is how can we give our people the freedom to get visibility and use the right cloud and take the decisions instantly through one click. That's what Beam delivers you know today. And you know get really excited, and it's available at beam.nutanix.com. >> Our first SAS service, ladies and gentleman. Thank you so much for doing this, Vijay. It looks like there's going to be a talk here at 10:30. You'll talk more about the midterm elections there probably? >> Yes, so you can go and write your own security compliances as well. You know within Beam, and a lot of powerful things you can do. >> Awesome, thank you so much, Vijay. I really appreciate it. (audience clapping) So as you see, there's a lot of work that we're doing to really make multi-cloud which is a hard problem. You know think about working the whole body of it and what about cost governance? What about security compliance? Obviously what about hybrid networks, and security, and storage, you know compute, many of the things that you've actually heard from us, but we're taking it to a level where the business users can now understand the implications. A CFO's office can understand the implications of waste and delight. So what does customer success mean to us? You know again, my favorite word in a long, long time is really go and figure out how do you make you, the customer, become operationally efficient. You know there's a lot of stuff that we deliver through software that's completely uncovered. It's so latent, you don't even know you have it, but you've paid for it. So you've got to figure out what does it mean for you to really become operationally efficient, organizationally proficient. And it's really important for training, education, stuff that you know you're people might think it's so awkward to do in Nutanix, but it could've been way simpler if you just told you a place where you can go and read about it. Of course, I can just use one click here as opposed to doing things the old way. But most importantly to make it financially accountable. So the end in all this is, again, one of the things that I think about all the time in building this company because obviously there's a lot of stuff that we want to do to create orphans, you know things above the line and top line and everything else. There's also a bottom line. Delight and waste are two sides of the same coin. You know when we're talking about developers who seek delight with public cloud at the same time you're looking at IT folks who're trying to figure out governance. They're like look you know the CFOs office, the CIOs office, they're trying to figure out how to curb waste. These two things have to go hand in hand in this era of multi-cloud where we're talking about frictionless consumption but also governance that looks invisible. So I think, at the end of the day, this company will do a lot of stuff around one-click delight but also go and figure out how do you reduce waste because there's so much waste including folks there who actually own Nutanix. There's so much software entitlement. There's so much waste in the public cloud itself that if we don't go and put our arms around, it will not lead to customer success. So to talk more about this, the idea of delight and the idea of waste, I'd like to bring on board a person who I think you know many of you actually have talked about it have delightful hair but probably wasted jokes. But I think has wasted hair and delightful jokes. So ladies and gentlemen, you make the call. You're the jury. Sunil R.M.J. Potti. ("Free" by Broods) >> So that was the first time I came out from the bottom of a screen on a stage. I actually now know what it feels to be like a gopher. Who's that laughing loudly at the back? Okay, do we have the... Let's see. Okay, great. We're about 15 minutes late, so that means we're running right on time. That's normally how we roll at this conference. And we have about three customers and four demos. Like I think there's about three plus six, about nine folks coming onstage. So we'll have our own version of the parade as well on the main stage for the next 70 minutes. So let's just jump right into it. I think we've been pretty consistent in terms of our longterm plans since we started the company. And it's become a lot more clearer over the last few years about our plans to essentially make computing invisible as Dheeraj mentioned. We're doing this across multiple acts. We started with HCI. We call it making infrastructure invisible. We extended that to making data centers invisible. And then now we're in this mode of essentially extending it to converging clouds so that you can actually converge your consumption models. And so today's conference and essentially the theme that you're going to be seeing throughout the breakout sessions is about a journey towards invisible clouds, but make sure that you internalize the fact that we're investing heavily in each of the three phases. It's just not about the hybrid cloud with Nutanix, it's about actually finishing the job about making infrastructure invisible, expanding that to kind of go after the full data center, and then of course embark on some real meaningful things around invisible clouds, okay? And to start the session, I think you know the part that I wanted to make sure that we are all on the same page because most of us in the room are still probably in this phase of the journey which is about invisible infrastructure. And there the three key products and especially two of them that most of you guys know are Acropolis and Prism. And they're sort of like the bedrock of our company. You know especially Acropolis which is about the web scale architecture. Prism is about consumer grade design. And with Acropolis now being really mature. It's in the seventh year of innovation. We still have more than half of our company in terms of R and D spend still on Acropolis and Prism. So our core product is still sort of where we think we have a significant differentiation on. We're not going to let our foot off the peddle there. You know every time somebody comes to me and says look there's a new HCI render popping out or an existing HCI render out there, I ask a simple question to our customers saying show me 100 customers with 100 node deployments, and it will be very hard to find any other render out there that does the same thing. And that's the power of Acropolis the code platform. And then it's you know the fact that the velocity associated with Acropolis continues to be on a fast pace. We came out with various new capabilities in 5.5 and 5.6, and one of the most complicated things to get right was the fact to shrink our three node cluster to a one node, two node deployment. Most of you actually had requirements on remote office, branch office, or the edge that actually allowed us to kind of give us you know sort of like the impetus to kind of go design some new capabilities into our core OS to get this out. And associated with Acropolis and expanding into Prism, as you will see, the first couple of years of Prism was all about refactoring the user interface, doing a good job with automation. But more and more of the investments around Prism is going to be based on machine learning. And you've seen some variants of that over the last 12 months, and I can tell you that in the next 12 to 24 months, most of our investments around infrastructure operations are going to be driven by AI techniques starting with most of our R and D spend also going into machine-learning algorithms. So when you talk about all the enhancements that have come on with Prism whether it be formed by you know the management console changing to become much more automated, whether now we give you automatic rightsizing, anomaly detection, or a series of functionality that have gone into it, the real core sort of capabilities that we're putting into Prism and Acropolis are probably best served by looking at the quality of the product. You probably have seen this slide before. We started showing the number of nodes shipped by Nutanix two years ago at this conference. It was about 35,000 plus nodes at that time. And since then, obviously we've you know continued to grow. And we would draw this line which was about enterprise class quality. That for the number of bugs found as a percentage of nodes shipped, there's a certain line that's drawn. World class companies do about probably 2% to 3%, number of CFDs per node shipped. And we were just broken that number two years ago. And to give you guys an idea of how that curve has shown up, it's now currently at .95%. And so along with velocity, you know this focus on being true to our roots of reliability and stability continues to be, you know it's an internal challenge, but it's also some of the things that we keep a real focus on. And so between Acropolis and Prism, that's sort of like our core focus areas to sort of give us the confidence that look we have this really high bar that we're sort of keeping ourselves accountable to which is about being the most advanced enterprise cloud OS on the planet. And we will keep it this way for the next 10 years. And to complement that, over a period of time of course, we've added a series of services. So these are services not just for VMs but also for files, blocks, containers, but all being delivered in that single one-click operations fashion. And to really talk more about it, and actually probably to show you the real deal there it's my great pleasure to call our own version of Moses inside the company, most of you guys know him as Steve Poitras. Come on up, Steve. (audience clapping) (rock music) >> Thanks Sunil. >> You barely fit in that door, man. Okay, so what are we going to talk about today, Steve? >> Absolutely. So when we think about when Nutanix first got started, it was really focused around VDI deployments, smaller workloads. However over time as we've evolved the product, added additional capabilities and features, that's grown from VDI to business critical applications as well as cloud native apps. So let's go ahead and take a look. >> Sunil: And we'll start with like Oracle? >> Yeah, that's one of the key ones. So here we can see our Prism central user interface, and we can see our Thor cluster obviously speaking to the Avengers theme here. We can see this is doing right around 400,000 IOPs at around 360 microseconds latency. Now obviously Prism central allows you to mange all of your Nutanix deployments, but this is just running on one single Nutanix cluster. So if we hop over here to our explore tab, we can see we have a few categories. We have some Kubernetes, some AFS, some Xen desktop as well as Oracle RAC. Now if we hope over to Oracle RAC, we're running a SLOB workload here. So obviously with Oracle enterprise applications performance, consistency, and extremely low latency are very critical. So with this SLOB workload, we're running right around 300 microseconds of latency. >> Sunil: So this is what, how many node Oracle RAC cluster is this? >> Steve: This is a six node Oracle RAC deployment. >> Sunil: Got it. And so what has gone into the product in recent releases to kind of make this happen? >> Yeah so obviously on the hardware front, there's been a lot of evolutions in storage mediums. So with the introduction of NVME, persistent memory technologies like 3D XPoint, that's meant storage media has become a lot faster. Now to allow you to full take advantage of that, that's where we've had to do a lot of optimizations within the storage stack. So with AHV, we have what we call AHV turbo mode which allows you to full take advantage of those faster storage mediums at that much lower latency. And then obviously on the networking front, technologies such as RDMA can be leveraged to optimize that network stack. >> Got it. So that was Oracle RAC running on a you know Nutanix cluster. It used to be a big deal a couple of years ago. Now we've got many customers doing that. On the same environment though, we're going to show you is the advent of actually putting file services in the same scale out environment. And you know many of you in the audience probably know about AFS. We released it about 12 to 14 months ago. It's been one of our most popular new products of all time within Nutanix's history. And we had SMB support was for user file shares, VDI deployments, and it took awhile to bake, to get to scale and reliability. And then in the last release, in the recent release that we just shipped, we now added NFS for support so that we can no go after the full scale file server consolidation. So let's take a look at some of that stuff. >> Yep, let's do it. So hopping back over to Prism, we can see our four cluster here. Overall cluster-wide latency right around 360 microseconds. Now we'll hop down to our file server section. So here we can see we have our Next A File Server hosting right about 16.2 million files. Now if you look at our shares and exports, we can see we have a mix of different shares. So one of the shares that you see there is home directories. This is an SMB share which is actually mapped and being leveraged by our VDI desktops for home folders, user profiles, things of that nature. We can also see this Oracle backup share here which is exposed to our rack host via NFS. So RMAN is actually leveraging this to provide native database backups. >> Got it. So Oracle VMs, backup using files, or for any other file share requirements with AFS. Do we have the cluster also showing, I know, so I saw some Kubernetes as well on it. Let's talk about what we're thinking of doing there. >> Yep, let's do it. So if we think about cloud, cloud's obviously a big buzz word, so is containers in Kubernetes. So with ACS 1.0 what we did is we introduced native support for Docker integration. >> And pause there. And we screwed up. (laughing) So just like the market took a left turn on Kubernetes, obviously we realized that, and now we're working on ACS 2.0 which is what we're going to talk about, right? >> Exactly. So with ACS 2.0, we've introduced native Kubernetes support. Now when I think about Kubernetes, there's really two core areas that come to mind. The first one is around native integration. So with that, we have our Kubernetes volume integration, we're obviously doing a lot of work on the networking front, and we'll continue to push there from an integration point of view. Now the other piece is around the actual deployment of Kubernetes. When we think about a lot of Nutanix administrators or IT admins, they may have never deployed Kubernetes before, so this could be a very daunting task. And true to the Nutanix nature, we not only want to make our platform simple and intuitive, we also want to do this for any ecosystem products. So with ACS 2.0, we've simplified the full Kubernetes deployment and switching over to our ACS two interface, we can see this create cluster button. Now this actually pops up a full wizard. This wizard will actually walk you through the full deployment process, gather the necessary inputs for you, and in a matter of a few clicks and a few minutes, we have a full Kubernetes deployment fully provisioned, the masters, the workers, all the networking fully done for you, very simple and intuitive. Now if we hop back over to Prism, we can see we have this ACS2 Kubernetes category. Clicking on that, we can see we have eight instances of virtual machines. And here are Kubernetes virtual machines which have actually been deployed as part of this ACS2 installer. Now one of the nice things is it makes the IT administrator's job very simple and easy to do. The deployment straightforward monitoring and management very straightforward and simple. Now for the developer, the application architect, or engineers, they interface and interact with Kubernetes just like they would traditionally on any platform. >> Got it. So the goal of ACS is to ensure that the developer ecosystem still uses whatever tools that they are you know preferring while at that same time allowing this consolidation of containers along with VMs all on that same, single runtime, right? So that's ACS. And then if you think about where the OS is going, there's still some open space at the end. And open space has always been look if you just look at a public cloud, you look at blocks, files, containers, the most obvious sort of storage function that's left is objects. And that's the last horizon for us in completing the storage stack. And we're going to show you for the first time a preview of an upcoming product called the Acropolis Object Storage Services Stack. So let's talk a little bit about it and then maybe show the demo. >> Yeah, so just like we provided file services with AFS, block services with ABS, with OSS or Object Storage Services, we provide native object storage, compatibility and capability within the Nutanix platform. Now this provides a very simply common S3 API. So any integrations you've done with S3 especially Kubernetes, you can actually leverage that out of the box when you've deployed this. Now if we hop back over to Prism, I'll go here to my object stores menu. And here we can see we have two existing object storage instances which are running. So you can deploy however many of these as you wanted to. Now just like the Kubernetes deployment, deploying a new object instance is very simple and easy to do. So here I'll actually name this instance Thor's Hammer. >> You do know he loses it, right? He hasn't seen the movies yet. >> Yeah, I don't want any spoilers yet. So once we specified the name, we can choose our capacity. So here we'll just specify a large instance or type. Obviously this could be any amount or storage. So if you have a 200 node Nutanix cluster with petabytes worth of data, you could do that as well. Once we've selected that, we'll select our expected performance. And this is going to be the number of concurrent gets and puts. So essentially how many operations per second we want this instance to be able to facilitate. Once we've done that, the platform will actually automatically determine how many virtual machines it needs to deploy as well as the resources and specs for those. And once we've done that, we'll go ahead and click save. Now here we can see it's actually going through doing the deployment of the virtual machines, applying any necessary configuration, and in the matter of a few clicks and a few seconds, we actually have this Thor's Hammer object storage instance which is up and running. Now if we hop over to one of our existing object storage instances, we can see this has three buckets. So one for Kafka-queue, I'm actually using this for my Kafka cluster where I have right around 62 million objects all storing ProtoBus. The second one there is Spark. So I actually have a Spark cluster running on our Kubernetes deployed instance via ACS 2.0. Now this is doing analytics on top of this data using S3 as a storage backend. Now for these objects, we support native versioning, native object encryption as well as worm compliancy. So if you want to have expiry periods, retention intervals, that sort of thing, we can do all that. >> Got it. So essentially what we've just shown you is with upcoming objects as well that the same OS can now support VMs, files, objects, containers, all on the same one click operational fabric. And so that's in some way the real power of Nutanix is to still keep that consistency, scalability in place as we're covering each and every workload inside the enterprise. So before Steve gets off stage though, I wanted to talk to you guys a little bit about something that you know how many of you been to our Nutanix headquarters in San Jose, California? A few. I know there's like, I don't know, 4,000 or 5,000 people here. If you do come to the office, you know when you land in San Jose Airport on the way to longterm parking, you'll pass our office. It's that close. And if you come to the fourth floor, you know one of the cubes that's where I sit. In the cube beside me is Steve. Steve sits in the cube beside me. And when I first joined the company, three or four years ago, and Steve's if you go to his cube, it no longer looks like this, but it used to have a lot of this stuff. It was like big containers of this. I remember the first time. Since I started joking about it, he started reducing it. And then Steve eventually got married much to our surprise. (audience laughing) Much to his wife's surprise. And then he also had a baby as a bigger surprise. And if you come over to our office, and we welcome you, and you come to the fourth floor, find my cube or you'll find Steve's Cube, it now looks like this. Okay, so thanks a lot, my man. >> Cool, thank you. >> Thanks so much. (audience clapping) >> So single OS, any workload. And like Steve who's been with us for awhile, it's my great pleasure to invite one of our favorite customers, CSC Karen who's also been with us for three to four years. And I'll share some fond memories about how she's been with the company for awhile, how as partners we've really done a lot together. So without any further ado, let me bring up Karen. Come on up, Karen. (rock music) >> Thank you for having me. >> Yeah, thank you. So I remember, so how many of you guys were with Nutanix first .Next in Miami? I know there was a question like that asked last time. Not too many. You missed it. We wished we could go back to that. We wouldn't fit 3/4s of this crowd. But Karen was our first customer in the keynote in 2015. And we had just talked about that story at that time where you're just become a customer. Do you want to give us some recap of that? >> Sure. So when we made the decision to move to hyperconverged infrastructure and chose Nutanix as our partner, we rapidly started to deploy. And what I mean by that is Sunil and some of the Nutanix executives had come out to visit with us and talk about their product on a Tuesday. And on a Wednesday after making the decision, I picked up the phone and said you know what I've got to deploy for my VDI cluster. So four nodes showed up on Thursday. And from the time it was plugged in to moving over 300 VDIs and 50 terabytes of storage and turning it over for the business for use was less than three days. So it was really excellent testament to how simple it is to start, and deploy, and utilize the Nutanix infrastructure. Now part of that was the delight that we experienced from our customers after that deployment. So we got phone calls where people were saying this report it used to take so long that I'd got out and get a cup of coffee and come back, and read an article, and do some email, and then finally it would finish. Those reports are running in milliseconds now. It's one click. It's very, very simple, and we've delighted our customers. Now across that journey, we have gone from the simple workloads like VDIs to the much more complex workloads around Splunk and Hadoop. And what's really interesting about our Splunk deployment is we're handling over a billion events being logged everyday. And the deployment is smaller than what we had with a three tiered infrastructure. So when you hear people talk about waste and getting that out and getting to an invisible environment where you're just able to run it, that's what we were able to achieve both with everything that we're running from our public facing websites to the back office operations that we're using which include Splunk and even most recently our Cloudera and Hadoop infrastructure. What it does is it's got 30 crawlers that go out on the internet and start bringing data back. So it comes back with over two terabytes of data everyday. And then that environment, ingests that data, does work against it, and responds to the business. And that again is something that's smaller than what we had on traditional infrastructure, and it's faster and more stable. >> Got it. And it covers a lot of use cases as well. You want to speak a few words on that? >> So the use cases, we're 90%, 95% deployed on Nutanix, and we're covering all of our use cases. So whether that's a customer facing app or a back office application. And what are business is doing is it's handling large portfolios of data for fortune 500 companies and law firms. And these applications are all running with improved stability, reliability, and performance on the Nutanix infrastructure. >> And the plan going forward? >> So the plan going forward, you actually asked me that in Miami, and it's go global. So when we started in Miami and that first deployment, we had four nodes. We now have 283 nodes around the world, and we started with about 50 terabytes of data. We've now got 3.8 petabytes of data. And we're deployed across four data centers and six remote offices. And people ask me often what is the value that we achieved? So simplification. It's all just easier, and it's all less expensive. Being able to scale with the business. So our Cloudera environment ended up with one day where it spiked to 1,000 times more load, 1,000 times, and it just responded. We had rally cries around improved productivity by six times. So 600% improved productivity, and we were able to actually achieve that. The numbers you just saw on the slide that was very, very fast was we calculated a 40% reduction in total cost of ownership. We've exceeded that. And when we talk about waste, that other number on the board there is when I saved the company one hour of maintenance activity or unplanned downtime in a month which we're now able to do the majority of our maintenance activities without disrupting any of our business solutions, I'm saving $750,000 each time I save that one hour. >> Wow. All right, Karen from CSE. Thank you so much. That was great. Thank you. I mean you know some of these data points frankly as I started talking to Karen as well as some other customers are pretty amazing in terms of the genuine value beyond financial value. Kind of like the emotional sort of benefits that good products deliver to some of our customers. And I think that's one of the core things that we take back into engineering is to keep ourselves honest on either velocity or quality even hiring people and so forth. Is to actually the more we touch customers lives, the more we touch our partner's lives, the more it allows us to ensure that we can put ourselves in their shoes to kind of make sure that we're doing the right thing in terms of the product. So that was the first part, invisible infrastructure. And our goal, as we've always talked about, our true North is to make sure that this single OS can be an exact replica, a truly modern, thoughtful but original design that brings the power of public cloud this AWS or GCP like architectures into your mainstream enterprises. And so when we take that to the next level which is about expanding the scope to go beyond invisible infrastructure to invisible data centers, it starts with a few things. Obviously, it starts with virtualization and a level of intelligent management, extends to automation, and then as we'll talk about, we have to embark on encompassing the network. And that's what we'll talk about with Flow. But to start this, let me again go back to one of our core products which is the bedrock of our you know opinionated design inside this company which is Prism and Acropolis. And Prism provides, I mentioned, comes with a ton of machine-learning based intelligence built into the product in 5.6 we've done a ton of work. In fact, a lot of features are coming out now because now that PC, Prism Central that you know has been decoupled from our mainstream release strain and will continue to release on its own cadence. And the same thing when you actually flip it to AHV on its own train. Now AHV, two years ago it was all about can I use AHV for VDI? Can I use AHV for ROBO? Now I'm pretty clear about where you cannot use AHV. If you need memory overcome it, stay with VMware or something. If you need, you know Metro, stay with another technology, else it's game on, right? And if you really look at the adoption of AHV in the mainstream enterprise, the customers now speak for themselves. These are all examples of large global enterprises with multimillion dollar ELAs in play that have now been switched over. Like I'll give you a simple example here, and there's lots of these that I'm sure many of you who are in the audience that are in this camp, but when you look at the breakout sessions in the pods, you'll get a sense of this. But I'll give you one simple example. If you look at the online payment company. I'm pretty sure everybody's used this at one time or the other. They had the world's largest private cloud on open stack, 21,000 nodes. And they were actually public about it three or four years ago. And in the last year and a half, they put us through a rigorous VOC testing scale, hardening, and it's a full blown AHV only stack. And they've started cutting over. Obviously they're not there yet completely, but they're now literally in hundreds of nodes of deployment of Nutanix with AHV as their primary operating system. So it is primetime from a deployment perspective. And with that as the base, no cloud is complete without actually having self-service provisioning that truly drives one-click automation, and can you do that in this consumer grade design? And Calm was acquired, as you guys know, in 2016. We had a choice of taking Calm. It was reasonably feature complete. It supported multiple clouds. It supported ESX, it supported Brownfield, It supported AHV. I mean they'd already done the integration with Nutanix even before the acquisition. And we had a choice. The choice was go down the path of dynamic ops or some other products where you took it for revenue or for acceleration, you plopped it into the ecosystem and sold it at this power sucking alien on top of our stack, right? Or we took a step back, re-engineered the product, kept some of the core essence like the workflow engine which was good, the automation, the object model and all, but refactored it to make it look like a natural extension of our operating system. And that's what we did with Calm. And we just launched it in December, and it's been one of our most popular new products now that's flying off the shelves. If you saw the number of registrants, I got a notification of this for the breakout sessions, the number one session that has been preregistered with over 500 people, the first two sessions are around Calm. And justifiably so because it just as it lives up to its promise, and it'll take its time to kind of get to all the bells and whistles, all the capabilities that have come through with AHV or Acropolis in the past. But the feature functionality, the product market fit associated with Calm is dead on from what the feedback that we can receive. And so Calm itself is on its own rapid cadence. We had AWS and AHV in the first release. Three or four months later, we now added ESX support. We added GCP support and a whole bunch of other capabilities, and I think the essence of Calm is if you can combine Calm and along with private cloud automation but also extend it to multi-cloud automation, it really sets Nutanix on its first genuine path towards multi-cloud. But then, as I said, if you really fixate on a software defined data center message, we're not complete as a full blown AWS or GCP like IA stack until we do the last horizon of networking. And you probably heard me say this before. You heard Dheeraj and others talk about it before is our problem in networking isn't the same in storage. Because the data plane in networking works. Good L2 switches from Cisco, Arista, and so forth, but the real problem networking is in the control plane. When something goes wrong at a VM level in Nutanix, you're able to identify whether it's a storage problem or a compute problem, but we don't know whether it's a VLAN that's mis-configured, or there've been some packets dropped at the top of the rack. Well that all ends now with Flow. And with Flow, essentially what we've now done is take the work that we've been working on to create built-in visibility, put some network automation so that you can actually provision VLANs when you provision VMs. And then augment it with micro segmentation policies all built in this easy to use, consume fashion. But we didn't stop there because we've been talking about Flow, at least the capabilities, over the last year. We spent significant resources building it. But we realized that we needed an additional thing to augment its value because the world of applications especially discovering application topologies is a heady problem. And if we didn't address that, we wouldn't be fulfilling on this ambition of providing one-click network segmentation. And so that's where Netsil comes in. Netsil might seem on the surface yet another next generation application performance management tool. But the innovations that came from Netsil started off at the research project at the University of Pennsylvania. And in fact, most of the team right now that's at Nutanix is from the U Penn research group. And they took a really original, fresh look at how do you sit in a network in a scale out fashion but still reverse engineer the packets, the flow through you, and then recreate this application topology. And recreate this not just on Nutanix, but do it seamlessly across multiple clouds. And to talk about the power of Flow augmented with Netsil, let's bring Rajiv back on stage, Rajiv. >> How you doing? >> Okay so we're going to start with some Netsil stuff, right? >> Yeah, let's talk about Netsil and some of the amazing capabilities this acquisition's bringing to Nutanix. First of all as you mentioned, Netsil's completely non invasive. So it installs on the network, it does all its magic from there. There're no host agents, non of the complexity and compatibility issues that entails. It's also monitoring the network at layer seven. So it's actually doing a deep packet inspection on all your application data, and can give you insights into services and APIs which is very important for modern applications and the way they behave. To do all this of course performance is key. So Netsil's built around a completely distributed architecture scaled to really large workloads. Very exciting technology. We're going to use it in many different ways at Nutanix. And to give you a flavor of that, let me show you how we're thinking of integrating Flow and Nestil together, so micro segmentation and Netsil. So to do that, we install Netsil in one of our Google accounts. And that's what's up here now. It went out there. It discovered all the VMs we're running on that account. It created a map essentially of all their interactions, and you can see it's like a Google Maps view. I can zoom into it. I can look at various things running. I can see lots of HTTP servers over here, some databases. >> Sunil: And it also has stats, right? You can go, it actually-- >> It does. We can take a look at that for a second. There are some stats you can look at right away here. Things like transactions per second and latencies and so on. But if I wanted to micro segment this application, it's not really clear how to do so. There's no real pattern over here. Taking the Google Maps analogy a little further, this kind of looks like the backstreets of Cairo or something. So let's do this step by step. Let me first filter down to one application. Right now I'm looking at about three or four different applications. And Netsil integrates with the metadata. So this is that the clouds provide. So I can search all the tags that I have. So by doing that, I can zoom in on just the financial application. And when I do this, the view gets a little bit simpler, but there's still no real pattern. It's not clear how to micro segment this, right? And this is where the power of Netsil comes in. This is a fairly naive view. This is what tool operating at layer four just looking at ports and TCP traffic would give you. But by doing deep packet inspection, Netsil can get into the services layer. So instead of grouping these interactions by hostname, let's group them by service. So you go service tier. And now you can see this is a much simpler picture. Now I have some patterns. I have a couple of load balancers, an HA proxy and an Nginx. I have a web application front end. I have some application servers running authentication services, search services, et cetera, a database, and a database replica. I could go ahead and micro segment at this point. It's quite possible to do it at this point. But this is almost too granular a view. We actually don't usually want to micro segment at individual service level. You think more in terms of application tiers, the tiers that different services belong to. So let me go ahead and group this differently. Let me group this by app tier. And when I do that, a really simple picture emerges. I have a load balancing tier talking to a web application front end tier, an API tier, and a database tier. Four tiers in my application. And this is something I can work with. This is something that I can micro segment fairly easily. So let's switch over to-- >> Before we dot that though, do you guys see how he gave himself the pseudonym called Dom Toretto? >> Focus Sunil, focus. >> Yeah, for those guys, you know that's not the Avengers theme, man, that's the Fast and Furious theme. >> Rajiv: I think a year ahead. This is next years theme. >> Got it, okay. So before we cut over from Netsil to Flow, do we want to talk a few words about the power of Flow, and what's available in 5.6? >> Sure so Flow's been around since the 5.6 release. Actually some of the functionality came in before that. So it's got invisibility into the network. It helps you debug problems with WLANs and so on. We had a lot of orchestration with other third party vendors with load balancers, with switches to make publishing much simpler. And then of course with our most recent release, we GA'ed our micro segmentation capabilities. And that of course is the most important feature we have in Flow right now. And if you look at how Flow policy is set up, it looks very similar to what we just saw with Netsil. So we have load blancer talking to a web app, API, database. It's almost identical to what we saw just a moment ago. So while this policy was created manually, it is something that we can automate. And it is something that we will do in future releases. Right now, it's of course not been integrated at that level yet. So this was created manually. So one thing you'll notice over here is that the database tier doesn't get any direct traffic from the internet. All internet traffic goes to the load balancer, only specific services then talk to the database. So this policy right now is in monitoring mode. It's not actually being enforced. So let's see what happens if I try to attack the database, I start a hack against the database. And I have my trusty brute force password script over here. It's trying the most common passwords against the database. And if I happen to choose a dictionary word or left the default passwords on, eventually it will log into the database. And when I go back over here in Flow what happens is it actually detects there's now an ongoing a flow, a flow that's outside of policy that's shown up. And it shows this in yellow. So right alongside the policy, I can visualize all the noncompliant flows. This makes it really easy for me now to make decisions, does this flow should it be part of the policy, should it not? In this particular case, obviously it should not be part of the policy. So let me just switch from monitoring mode to enforcement mode. I'll apply the policy, give it a second to propagate. The flow goes away. And if I go back to my script, you can see now the socket's timing out. I can no longer connect to the database. >> Sunil: Got it. So that's like one click segmentation and play right now? >> Absolutely. It's really, really simple. You can compare it to other products in the space. You can't get simpler than this. >> Got it. Why don't we got back and talk a little bit more about, so that's Flow. It's shipping now in 5.6 obviously. It'll come integrated with Netsil functionality as well as a variety of other enhancements in that next few releases. But Netsil does more than just simple topology discovery, right? >> Absolutely. So Netsil's actually gathering a lot of metrics from your network, from your host, all this goes through a data pipeline. It gets processed over there and then gets captured in a time series database. And then we can slice and dice that in various different ways. It can be used for all kinds of insights. So let's see how our application's behaving. So let me say I want to go into the API layer over here. And I instantly get a variety of metrics on how the application's behaving. I get the most requested endpoints. I get the average latency. It looks reasonably good. I get the average latency of the slowest endpoints. If I was having a performance problem, I would know exactly where to go focus on. Right now, things look very good, so we won't focus on that. But scrolling back up, I notice that we have a fairly high error rate happening. We have like 11.35% of our HTTP requests are generating errors, and that deserves some attention. And if I scroll down again, and I see the top five status codes I'm getting, almost 10% of my requests are generating 500 errors, HTTP 500 errors which are internal server errors. So there's something going on that's wrong with this application. So let's dig a little bit deeper into that. Let me go into my analytics workbench over here. And what I've plotted over here is how my HTTP requests are behaving over time. Let me filter down to just the 500 ones. That will make it easier. And I want the 500s. And I'll also group this by the service tier so that I can see which services are causing the problem. And the better view for this would be a bar graph. Yes, so once I do this, you can see that all the errors, all the 500 errors that we're seeing have been caused by the authentication service. So something's obviously wrong with that part of my application. I can go look at whether Active Directory is misbehaving and so on. So very quickly from a broad problem that I was getting a high HTTP error rate. In fact, usually you will discover there's this customer complaining about a lot of errors happening in your application. You can quickly narrow down to exactly what the cause was. >> Got it. This is what we mean by hyperconvergence of the network which is if you can truly isolate network related problems and associate them with the rest of the hyperconvergence infrastructure, then we've essentially started making real progress towards the next level of hyperconvergence. Anyway, thanks a lot, man. Great job. >> Thanks, man. (audience clapping) >> So to talk about this evolution from invisible infrastructure to invisible data centers is another customer of ours that has embarked on this journey. And you know it's not just using Nutanix but a variety of other tools to actually fulfill sort of like the ambition of a full blown cloud stack within a financial organization. And to talk more about that, let me call Vijay onstage. Come on up, Vijay. (rock music) >> Hey. >> Thank you, sir. So Vijay looks way better in real life than in a picture by the way. >> Except a little bit of gray. >> Unlike me. So tell me a little bit about this cloud initiative. >> Yeah. So we've won the best cloud initiative twice now hosted by Incisive media a large magazine. It's basically they host a bunch of you know various buy side, sell side, and you can submit projects in various categories. So we've won the best cloud twice now, 2015 and 2017. The 2017 award is when you know as part of our private cloud journey we were laying the foundation for our private cloud which is 100% based on hyperconverged infrastructure. So that was that award. And then 2017, we've kind of built on that foundation and built more developer-centric next gen app services like PAS, CAS, SDN, SDS, CICD, et cetera. So we've built a lot of those services on, and the second award was really related to that. >> Got it. And a lot of this was obviously based on an infrastructure strategy with some guiding principles that you guys had about three or four years ago if I remember. >> Yeah, this is a great slide. I use it very often. At the core of our infrastructure strategy is how do we run IT as a business? I talk about this with my teams, they were very familiar with this. That's the mindset that I instill within the teams. The mission, the challenge is the same which is how do we scale infrastructure while reducing total cost of ownership, improving time to market, improving client experience and while we're doing that not lose sight of reliability, stability, and security? That's the mission. Those are some of our guiding principles. Whenever we take on some large technology investments, we take 'em through those lenses. Obviously Nutanix went through those lenses when we invested in you guys many, many years ago. And you guys checked all the boxes. And you know initiatives change year on year, the mission remains the same. And more recently, the last few years, we've been focused on converged platforms, converged teams. We've actually reorganized our teams and aligned them closer to the platforms moving closer to an SRE like concept. >> And then you've built out a full stack now across computer storage, networking, all the way with various use cases in play? >> Yeah, and we're aggressively moving towards PAS, CAS as our method of either developing brand new cloud native applications or even containerizing existing applications. So the stack you know obviously built on Nutanix, SDS for software fine storage, compute and networking we've got SDN turned on. We've got, again, PAS and CAS built on this platform. And then finally, we've hooked our CICD tooling onto this. And again, the big picture was always frictionless infrastructure which we're very close to now. You know 100% of our code deployments into this environment are automated. >> Got it. And so what's the net, net in terms of obviously the business takeaway here? >> Yeah so at Northern we don't do tech for tech. It has to be some business benefits, client benefits. There has to be some outcomes that we measure ourselves against, and these are some great metrics or great ways to look at if we're getting the outcomes from the investments we're making. So for example, infrastructure scale while reducing total cost of ownership. We're very focused on total cost of ownership. We, for example, there was a build team that was very focus on building servers, deploying applications. That team's gone down from I think 40, 45 people to about 15 people as one example, one metric. Another metric for reducing TCO is we've been able to absorb additional capacity without increasing operating expenses. So you're actually building capacity in scale within your operating model. So that's another example. Another example, right here you see on the screen. Faster time to market. We've got various types of applications at any given point that we're deploying. There's a next gen cloud native which go directly on PAS. But then a majority of the applications still need the traditional IS components. The time to market to deploy a complex multi environment, multi data center application, we've taken that down by 60%. So we can deliver server same day, but we can deliver entire environments, you know add it to backup, add it to DNS, and fully compliant within a couple of weeks which is you know something we measure very closely. >> Great job, man. I mean that's a compelling I think results. And in the journey obviously you got promoted a few times. >> Yep. >> All right, congratulations again. >> Thank you. >> Thanks Vijay. >> Hey Vijay, come back here. Actually we forgot our joke. So razzled by his data points there. So you're supposed to wear some shoes, right? >> I know my inner glitch. I was going to wear those sneakers, but I forgot them at the office maybe for the right reasons. But the story behind those florescent sneakers, I see they're focused on my shoes. But I picked those up two years ago at a Next event, and not my style. I took 'em to my office. They've been sitting in my office for the last couple years. >> Who's received shoes like these by the way? I'm sure you guys have received shoes like these. There's some real fans there. >> So again, I'm sure many of you liked them. I had 'em in my office. I've offered it to so many of my engineers. Are you size 11? Do you want these? And they're unclaimed? >> So that's the only feature of Nutanix that you-- >> That's the only thing that hasn't worked, other than that things are going extremely well. >> Good job, man. Thanks a lot. >> Thanks. >> Thanks Vijay. So as we get to the final phase which is obviously as we embark on this multi-cloud journey and the complexity that comes with it which Dheeraj hinted towards in his session. You know we have to take a cautious, thoughtful approach here because we don't want to over set expectations because this will take us five, 10 years to really do a good job like we've done in the first act. And the good news is that the market is also really, really early here. It's just a fact. And so we've taken a tiered approach to it as we'll start the discussion with multi-cloud operations, and we've talked about the stack in the prior session which is about look across new clouds. So it's no longer Nutanix, Dell, Lenova, HP, Cisco as the new quote, unquote platforms. It's Nutanix, Xi, GCP, AWS, Azure as the new platforms. That's how we're designing the fabric going forward. On top of that, you obviously have the hybrid OS both on the data plane side and control plane side. Then what you're seeing with the advent of Calm doing a marketplace and automation as well as Beam doing governance and compliance is the fact that you'll see more and more such capabilities of multi-cloud operations burnt into the platform. And example of that is Calm with the new 5.7 release that they had. Launch supports multiple clouds both inside and outside, but the fundamental premise of Calm in the multi-cloud use case is to enable you to choose the right cloud for the right workload. That's the automation part. On the governance part, and this we kind of went through in the last half an hour with Dheeraj and Vijay on stage is something that's even more, if I can call it, you know first order because you get the provisioning and operations second. The first order is to say look whatever my developers have consumed off public cloud, I just need to first get our arm around to make sure that you know what am I spending, am I secure, and then when I get comfortable, then I am able to actually expand on it. And that's the power of Beam. And both Beam and Calm will be the yin and yang for us in our multi-cloud portfolio. And we'll have new products to complement that down the road, right? But along the way, that's the whole private cloud, public cloud. They're the two ends of the barbell, and over time, and we've been working on Xi for awhile, is this conviction that we've built talking to many customers that there needs to be another type of cloud. And this type of a cloud has to feel like a public cloud. It has to be architected like a public cloud, be consumed like a public cloud, but it needs to be an extension of my data center. It should not require any changes to my tooling. It should not require and changes to my operational infrastructure, and it should not require lift and shift, and that's a super hard problem. And this problem is something that a chunk of our R and D team has been burning the midnight wick on for the last year and a half. Because look this is not about taking our current OS which does a good job of scaling and plopping it into a Equinix or a third party data center and calling it a hybrid cloud. This is about rebuilding things in the OS so that we can deliver a true hybrid cloud, but at the same time, give those functionality back on premises so that even if you don't have a hybrid cloud, if you just have your own data centers, you'll still need new services like DR. And if you think about it, what are we doing? We're building a full blown multi-tenant virtual network designed in a modern way. Think about this SDN 2.0 because we have 10 years worth of looking backwards on how GCP has done it, or how Amazon has done it, and now sort of embodying some of that so that we can actually give it as part of this cloud, but do it in a way that's a seamless extension of the data center, and then at the same time, provide new services that have never been delivered before. Everyone obviously does failover and failback in DR it just takes months to do it. Our goal is to do it in hours or minutes. But even things such as test. Imagine doing a DR test on demand for you business needs in the middle of the day. And that's the real bar that we've set for Xi that we are working towards in early access later this summer with GA later in the year. And to talk more about this, let me invite some of our core architects working on it, Melina and Rajiv. (rock music) Good to see you guys. >> You're messing up the names again. >> Oh Rajiv, Vinny, same thing, man. >> You need to back up your memory from Xi. >> Yeah, we should. Okay, so what are we going to talk about, Vinny? >> Yeah, exactly. So today we're going to talk about how Xi is pushing the envelope and beyond the state of the art as you were saying in the industry. As part of that, there's a whole bunch of things that we have done starting with taking a private cloud, seamlessly extending it to the public cloud, and then creating a hybrid cloud experience with one-click delight. We're going to show that. We've done a whole bunch of engineering work on making sure the operations and the tooling is identical on both sides. When you graduate from a private cloud to a hybrid cloud environment, you don't want the environments to be different. So we've copied the environment for you with zero manual intervention. And finally, building on top of that, we are delivering DR as a service with unprecedented simplicity with one-click failover, one-click failback. We're going to show you one click test today. So Melina, why don't we start with showing how you go from a private cloud, seamlessly extend it to consume Xi. >> Sounds good, thanks Vinny. Right now, you're looking at my Prism interface for my on premises cluster. In one-click, I'm going to be able to extend that to my Xi cloud services account. I'm doing this using my my Nutanix credential and a password manager. >> Vinny: So here as you notice all the Nutanix customers we have today, we have created an account for them in Xi by default. So you don't have to log in somewhere and create an account. It's there by default. >> Melina: And just like that we've gone ahead and extended my data center. But let's go take a look at the Xi side and log in again with my my Nutanix credentials. We'll see what we have over here. We're going to be able to see two availability zones, one for on premises and one for Xi right here. >> Vinny: Yeah as you see, using a log in account that you already knew mynutanix.com and 30 seconds in, you can see that you have a hybrid cloud view already. You have a private cloud availability zone that's your own Prism central data center view, and then a Xi availability zone. >> Sunil: Got it. >> Melina: Exactly. But of course we want to extend my network connection from on premises to my Xi networks as well. So let's take a look at our options there. We have two ways of doing this. Both are one-click experience. With direct connect, you can create a dedicated network connection between both environments, or VPN you can use a public internet and a VPN service. Let's go ahead and enable VPN in this environment. Here we have two options for how we want to enable our VPN. We can bring our own VPN and connect it, or we will deploy a VPN for you on premises. We'll do the option where we deploy the VPN in one-click. >> And this is another small sign or feature that we're building net new as part of Xi, but will be burned into our core Acropolis OS so that we can also be delivering this as a stand alone product for on premises deployment as well, right? So that's one of the other things to note as you guys look at the Xi functionality. The goal is to keep the OS capabilities the same on both sides. So even if I'm building a quote, unquote multi data center cloud, but it's just a private cloud, you'll still get all the benefits of Xi but in house. >> Exactly. And on this second step of the wizard, there's a few inputs around how you want the gateway configured, your VLAN information and routing and protocol configuration details. Let's go ahead and save it. >> Vinny: So right now, you know what's happening is we're taking the private network that our customers have on premises and extending it to a multi-tenant public cloud such that our customers can use their IP addresses, the subnets, and bring their own IP. And that is another step towards making sure the operation and tooling is kept consistent on both sides. >> Melina: Exactly. And just while you guys were talking, the VPN was successfully created on premises. And we can see the details right here. You can track details like the status of the connection, the gateway, as well as bandwidth information right in the same UI. >> Vinny: And networking is just tip of the iceberg of what we've had to work on to make sure that you get a consistent experience on both sides. So Melina, why don't we show some of the other things we've done? >> Melina: Sure, to talk about how we preserve entities from my on-premises to Xi, it's better to use my production environment. And first thing you might notice is the log in screen's a little bit different. But that's because I'm logging in using my ADFS credentials. The first thing we preserved was our users. In production, I'm running AD obviously on-prem. And now we can log in here with the same set of credentials. Let me just refresh this. >> And this is the Active Directory credential that our customers would have. They use it on-premises. And we allow the setting to be set on the Xi cloud services as well, so it's the same set of users that can access both sides. >> Got it. There's always going to be some networking problem onstage. It's meant to happen. >> There you go. >> Just launching it again here. I think it maybe timed out. This is a good sign that we're running on time with this presentation. >> Yeah, yeah, we're running ahead of time. >> Move the demos quicker, then we'll time out. So essentially when you log into Xi, you'll be able to see what are the environment capabilities that we have copied to the Xi environment. So for example, you just saw that the same user is being used to log in. But after the use logs in, you'll be able to see their images, for example, copied to the Xi side. You'll be able to see their policies and categories. You know when you define these policies on premises, you spend a lot of effort and create them. And now when you're extending to the public cloud, you don't want to do it again, right? So we've done a whole lot of syncing mechanisms making sure that the two sides are consistent. >> Got it. And on top of these policies, the next step is to also show capabilities to actually do failover and failback, but also do integrated testing as part of this compatibility. >> So one is you know just the basic job of making the environments consistent on two sides, but then it's also now talking about the data part, and that's what DR is about. So if you have a workload running on premises, we can take the data and replicate it using your policies that we've already synced. Once the data is available on the Xi side, at that point, you have to define a run book. And the run book essentially it's a recovery plan. And that says okay I already have the backups of my VMs in case of disaster. I can take my recovery plan and hit you know either failover or maybe a test. And then my application comes up. First of all, you'll talk about the boot order for your VMs to come up. You'll talk about networking mapping. Like when I'm running on-prem, you're using a particular subnet. You have an option of using the same subnet on the Xi side. >> Melina: There you go. >> What happened? >> Sunil: It's finally working.? >> Melina: Yeah. >> Vinny, you can stop talking. (audience clapping) By the way, this is logging into a live Xi data center. We have two regions West Coat, two data centers East Coast, two data centers. So everything that you're seeing is essentially coming off the mainstream Xi profile. >> Vinny: Melina, why don't we show the recovery plan. That's the most interesting piece here. >> Sure. The recovery plan is set up to help you specify how you want to recover your applications in the event of a failover or a test failover. And it specifies all sorts of details like the boot sequence for the VMs as well as network mappings. Some of the network mappings are things like the production network I have running on premises and how it maps to my production network on Xi or the test network to the test network. What's really cool here though is we're actually automatically creating your subnets on Xi from your on premises subnets. All that's part of the recovery plan. While we're on the screen, take a note of the .100 IP address. That's a floating IP address that I have set up to ensure that I'm going to be able to access my three tier web app that I have protected with this plan after a failover. So I'll be able to access it from the public internet really easily from my phone or check that it's all running. >> Right, so given how we make the environment consistent on both sides, now we're able to create a very simple DR experience including failover in one-click, failback. But we're going to show you test now. So Melina, let's talk about test because that's one of the most common operations you would do. Like some of our customers do it every month. But usually it's very hard. So let's see how the experience looks like in what we built. >> Sure. Test and failover are both one-click experiences as you know and come to expect from Nutanix. You can see it's failing over from my primary location to my recovery location. Now what we're doing right now is we're running a series of validation checks because we want to make sure that you have your network configured properly, and there's other configuration details in place for the test to be successful. Looks like the failover was initiated successfully. Now while that failover's happening though, let's make sure that I'm going to be able to access my three tier web app once it fails over. We'll do that by looking at my network policies that I've configured on my test network. Because I want to access the application from the public internet but only port 80. And if we look here under our policies, you can see I have port 80 open to permit. So that's good. And if I needed to create a new one, I could in one click. But it looks like we're good to go. Let's go back and check the status of my recovery plan. We click in, and what's really cool here is you can actually see the individual tasks as they're being completed from that initial validation test to individual VMs being powered on as part of the recovery plan. >> And to give you guys an idea behind the scenes, the entire recovery plan is actually a set of workflows that are built on Calm's automation engine. So this is an example of where we're taking some of power of workflow and automation that Clam has come to be really strong at and burning that into how we actually operationalize many of these workflows for Xi. >> And so great, while you were explaining that, my three tier web app has restarted here on Xi right in front of you. And you can see here there's a floating IP that I mentioned early that .100 IP address. But let's go ahead and launch the console and make sure the application started up correctly. >> Vinny: Yeah, so that .100 IP address is a floating IP that's a publicly visible IP. So it's listed here, 206.80.146.100. And that's essentially anybody in the audience here can go use your laptop or your cell phone and hit that and start to work. >> Yeah so by the way, just to give you guys an idea while you guys maybe use the IP to kind of hit it, is a real set of VMs that we've just failed over from Nutanix's corporate data center into our West region. >> And this is running live on the Xi cloud. >> Yeah, you guys should all go and vote. I'm a little biased towards Xi, so vote for Xi. But all of them are really good features. >> Scroll up a little bit. Let's see where Xi is. >> Oh Xi's here. I'll scroll down a little bit, but keep the... >> Vinny: Yes. >> Sunil: You guys written a block or something? >> Melina: Oh good, it looks like Xi's winning. >> Sunil: Okay, great job, Melina. Thank you so much. >> Thank you, Melina. >> Melina: Thanks. >> Thank you, great job. Cool and calm under pressure. That's good. So that was Xi. What's something that you know we've been doing around you know in addition to taking say our own extended enterprise public cloud with Xi. You know we do recognize that there are a ton of workloads that are going to be residing on AWS, GCP, Azure. And to sort of really assist in the try and call it transformation of enterprises to choose the right cloud for the right workload. If you guys remember, we actually invested in a tool over last year which became actually quite like one of those products that took off based on you know groundswell movement. Most of you guys started using it. It's essentially extract for VMs. And it was this product that's obviously free. It's a tool. But it enables customers to really save tons of time to actually migrate from legacy environments to Nutanix. So we took that same framework, obviously re-platformed it for the multi-cloud world to kind of solve the problem of migrating from AWS or GCP to Nutanix or vice versa. >> Right, so you know, Sunil as you said, moving from a private cloud to the public cloud is a lift and shift, and it's a hard you know operation. But moving back is not only expensive, it's a very hard problem. None of the cloud vendors provide change block tracking capability. And what that means is when you have to move back from the cloud, you have an extended period of downtime because there's now way of figuring out what's changing while you're moving. So you have to keep it down. So what we've done with our app mobility product is we have made sure that, one, it's extremely simple to move back. Two, that the downtime that you'll have is as small as possible. So let me show you what we've done. >> Got it. >> So here is our app mobility capability. As you can see, on the left hand side we have a source environment and target environment. So I'm calling my AWS environment Asgard. And I can add more environments. It's very simple. I can select AWS and then put in my credentials for AWS. It essentially goes and discovers all the VMs that are running and all the regions that they're running. Target environment, this is my Nutanix environment. I call it Earth. And I can add target environment similarly, IP address and credentials, and we do the rest. Right, okay. Now migration plans. I have Bifrost one as my migration plan, and this is how migration works. First you create a plan and then say start seeding. And what it does is takes a snapshot of what's running in the cloud and starts migrating it to on-prem. Once it is an on-prem and the difference between the two sides is minimal, it says I'm ready to cutover. At that time, you move it. But let me show you how you'd create a new migration plan. So let me name it, Bifrost 2. Okay so what I have to do is select a region, so US West 1, and target Earth as my cluster. This is my storage container there. And very quickly you can see these are the VMs that are running in US West 1 in AWS. I can select SQL server one and two, go to next. Right now it's looking at the target Nutanix environment and seeing it had enough space or not. Once that's good, it gives me an option. And this is the step where it enables the Nutanix service of change block tracking overlaid on top of the cloud. There are two options one is automatic where you'll give us the credentials for your VMs, and we'll inject our capability there. Or manually you could do. You could copy the command either in a windows VM or Linux VM and run it once on the VM. And change block tracking since then in enabled. Everything is seamless after that. Hit next. >> And while Vinny's setting it up, he said a few things there. I don't know if you guys caught it. One of the hardest problems in enabling seamless migration from public cloud to on-prem which makes it harder than the other way around is the fact that public cloud doesn't have things like change block tracking. You can't get delta copies. So one of the core innovations being built in this app mobility product is to provide that overlay capability across multiple clouds. >> Yeah, and the last step here was to select the target network where the VMs will come up on the Nutanix environment, and this is a summary of the migration plan. You can start it or just save it. I'm saving it because it takes time to do the seeding. I have the other plan which I'll actually show the cutover with. Okay so now this is Bifrost 1. It's ready to cutover. We started it four hours ago. And here you can see there's a SQL server 003. Okay, now I would like to show the AWS environment. As you can see, SQL server 003. This VM is actually running in AWS right now. And if you go to the Prism environment, and if my login works, right? So we can go into the virtual machine view, tables, and you see the VM is not there. Okay, so we go back to this, and we can hit cutover. So this is essentially telling our system, okay now it the time. Quiesce the VM running in AWS, take the last bit of changes that you have to the database, ship it to on-prem, and in on-prem now start you know configure the target VM and start bringing it up. So let's go and look at AWS and refresh that screen. And you should see, okay so the SQL server is now stopping. So that means it has quiesced and stopping the VM there. If you go back and look at the migration plan that we had, it says it's completed. So it has actually migrated all the data to the on-prem side. Go here on-prem, you see the production SQL server is running already. I can click launch console, and let's see. The Windows VM is already booting up. >> So essentially what Vinny just showed was a live cutover of an AWS VM to Nutanix on-premises. >> Yeah, and what we have done. (audience clapping) So essentially, this is about making two things possible, making it simple to migrate from cloud to on-prem, and making it painless so that the downtime you have is very minimal. >> Got it, great job, Vinny. I won't forget your name again. So last step. So to really talk about this, one of our favorite partners and customers has been in the cloud environment for a long time. And you know Jason who's the CTO of Cyxtera. And he'll introduce who Cyxtera is. Most of you guys are probably either using their assets or not without knowing their you know the new name. But is someone that was in the cloud before it was called cloud as one of the original founders and technologists behind Terremark, and then later as one of the chief architects of VMware's cloud. And then they started this new company about a year or so ago which I'll let Jason talk about. This journey that he's going to talk about is how a partner, slash customer is working with us to deliver net new transformations around the traditional industry of colo. Okay, to talk more about it, Jason, why don't you come up on stage, man? (rock music) Thank you, sir. All right so Cyxtera obviously a lot of people don't know the name. Maybe just give a 10 second summary of why you're so big already. >> Sure, so Cyxtera was formed, as you said, about a year ago through the acquisition of the CenturyLink data centers. >> Sunil: Which includes Savvis and a whole bunch of other assets. >> Yeah, there's a long history of those data centers, but we have all of them now as well as the software companies owned by Medina capital. So we're like the world's biggest startup now. So we have over 50 data centers around the world, about 3,500 customers, and a portfolio of security and analytics software. >> Sunil: Got it, and so you have this strategy of what we're calling revolutionizing colo deliver a cloud based-- >> Yeah so, colo hasn't really changed a lot in the last 20 years. And to be fair, a lot of what happens in data centers has to have a person physically go and do it. But there are some things that we can simplify and automate. So we want to make things more software driven, so that's what we're doing with the Cyxtera extensible data center or CXD. And to do that, we're deploying software defined networks in our facilities and developing automations so customers can go and provision data center services and the network connectivity through a portal or through REST APIs. >> Got it, and what's different now? I know there's a whole bunch of benefits with the integrated platform that one would not get in the traditional kind of on demand data center environment. >> Sure. So one of the first services we're launching on CXD is compute on demand, and it's powered by Nutanix. And we had to pick an HCI partner to launch with. And we looked at players in the space. And as you mentioned, there's actually a lot of them, more than I thought. And we had a lot of conversations, did a lot of testing in the lab, and Nutanix really stood out as the best choice. You know Nutanix has a lot of focus on things like ease of deployment. So it's very simple for us to automate deploying compute for customers. So we can use foundation APIs to go configure the servers, and then we turn those over to the customer which they can then manage through Prism. And something important to keep in mind here is that you know this isn't a manged service. This isn't infrastructure as a service. The customer has complete control over the Nutanix platform. So we're turning that over to them. It's connected to their network. They're using their IP addresses, you know their tools and processes to operate this. So it was really important for the platform we picked to have a really good self-service story for things like you know lifecycle management. So with one-click upgrade, customers have total control over patches and upgrades. They don't have to call us to do it. You know they can drive that themselves. >> Got it. Any other final words around like what do you see of the partnership going forward? >> Well you know I think this would be a great platform for Xi, so I think we should probably talk about that. >> Yeah, yeah, we should talk about that separately. Thanks a lot, Jason. >> Thanks. >> All right, man. (audience clapping) So as we look at the full journey now between obviously from invisible infrastructure to invisible clouds, you know there is one thing though to take away beyond many updates that we've had so far. And the fact is that everything that I've talked about so far is about completing a full blown true IA stack from all the way from compute to storage, to vitualization, containers to network services, and so forth. But every public cloud, a true cloud in that sense, has a full blown layer of services that's set on top either for traditional workloads or for new workloads, whether it be machine-learning, whether it be big data, you know name it, right? And in the enterprise, if you think about it, many of these services are being provisioned or provided through a bunch of our partners. Like we have partnerships with Cloudera for big data and so forth. But then based on some customer feedback and a lot of attention from what we've seen in the industry go out, just like AWS, and GCP, and Azure, it's time for Nutanix to have an opinionated view of the past stack. It's time for us to kind of move up the stack with our own offering that obviously adds value but provides some of our core competencies in data and takes it to the next level. And it's in that sense that we're actually launching Nutanix Era to simplify one of the hardest problems in enterprise IT and short of saving you from true Oracle licensing, it solves various other Oracle problems which is about truly simplifying databases much like what RDS did on AWS, imagine enterprise RDS on demand where you can provision, lifecycle manage your database with one-click. And to talk about this powerful new functionality, let me invite Bala and John on stage to give you one final demo. (rock music) Good to see you guys. >> Yep, thank you. >> All right, so we've got lots of folks here. They're all anxious to get to the next level. So this demo, really rock it. So what are we going to talk about? We're going to start with say maybe some database provisioning? Do you want to set it up? >> We have one dream, Sunil, one single dream to pass you off, that is what Nutanix is today for IT apps, we want to recreate that magic for devops and get back those weekends and freedom to DBAs. >> Got it. Let's start with, what, provisioning? >> Bala: Yep, John. >> Yeah, we're going to get in provisioning. So provisioning databases inside the enterprise is a significant undertaking that usually involves a myriad of resources and could take days. It doesn't get any easier after that for the longterm maintence with things like upgrades and environment refreshes and so on. Bala and team have been working on this challenge for quite awhile now. So we've architected Nutanix Era to cater to these enterprise use cases and make it one-click like you said. And Bala and I are so excited to finally show this to the world. We think it's actually Nutanix's best kept secrets. >> Got it, all right man, let's take a look at it. >> So we're going to be provisioning a sales database today. It's a four-step workflow. The first part is choosing our database engine. And since it's our sales database, we want it to be highly available. So we'll do a two node rack configuration. From there, it asks us where we want to land this service. We can either land it on an existing service that's already been provisioned, or if we're starting net new or for whatever reason, we can create a new service for it. The key thing here is we're not asking anybody how to do the work, we're asking what work you want done. And the other key thing here is we've architected this concept called profiles. So you tell us how much resources you need as well as what network type you want and what software revision you want. This is actually controlled by the DBAs. So DBAs, and compute administrators, and network administrators, so they can set their standards without having a DBA. >> Sunil: Got it, okay, let's take a look. >> John: So if we go to the next piece here, it's going to personalize their database. The key thing here, again, is that we're not asking you how many data files you want or anything in that regard. So we're going to be provisioning this to Nutanix's best practices. And the key thing there is just like these past services you don't have to read dozens of pages of best practice guides, it just does what's best for the platform. >> Sunil: Got it. And so these are a multitude of provisioning steps that normally one would take I guess hours if not days to provision and Oracle RAC data. >> John: Yeah, across multiple teams too. So if you think about the lifecycle especially if you have onshore and offshore resources, I mean this might even be longer than days. >> Sunil: Got it. And then there are a few steps here, and we'll lead into potentially the Time Machine construct too? >> John: Yeah, so since this is a critical database, we want data protection. So we're going to be delivering that through a feature called Time Machines. We'll leave this at the defaults for now, but the key thing to not here is we've got SLAs that deliver both continuous data protection as well as telescoping checkpoints for historical recovery. >> Sunil: Got it. So that's provisioning. We've kicked off Oracle, what, two node database and so forth? >> John: Yep, two node database. So we've got a handful of tasks that this is going to automate. We'll check back in in a few minutes. >> Got it. Why don't we talk about the other aspects then, Bala, maybe around, one of the things that, you know and I know many of you guys have seen this, is the fact that if you look at database especially Oracle but in general even SQL and so forth is the fact that look if you really simplified it to a developer, it should be as simple as I copy my production database, and I paste it to create my own dev instance. And whenever I need it, I need to obviously do it the opposite way, right? So that was the goal that we set ahead for us to actually deliver this new past service around Era for our customers. So you want to talk a little bit more about it? >> Sure Sunil. If you look at most of the data management functionality, they're pretty much like flavors of copy paste operations on database entities. But the trouble is the seemingly simple, innocuous operations of our daily lives becomes the most dreaded, complex, long running, error prone operations in data center. So we actually planned to tame this complexity and bring consumer grade simplicity to these operations, also make these clones extremely efficient without compromising the quality of service. And the best part is, the customers can enjoy these services not only for databases running on Nutanix, but also for databases running on third party systems. >> Got it. So let's take a look at this functionality of I guess snapshoting, clone and recovery that you've now built into the product. >> Right. So now if you see the core feature of this whole product is something we call Time Machine. Time Machine lets the database administrators actually capture the database tape to the granularity of seconds and also lets them create clones, refresh them to any point in time, and also recover the databases if the databases are running on the same Nutanix platform. Let's take a look at the demo with the Time Machine. So here is our customer relationship database management database which is about 2.3 terabytes. If you see, the Time Machine has been active about four months, and SLA has been set for continuously code revision of 30 days and then slowly tapers off 30 days of daily backup and weekly backups and so on, so forth. On the right hand side, you will see different colors. The green color is pretty much your continuously code revision, what we call them. That lets you to go back to any point in time to the granularity of seconds within those 30 days. And then the discreet code revision lets you go back to any snapshot of the backup that is maintained there kind of stuff. In a way, you see this Time Machine is pretty much like your modern day car with self driving ability. All you need to do is set the goals, and the Time Machine will do whatever is needed to reach up to the goal kind of stuff. >> Sunil: So why don't we quickly do a snapshot? >> Bala: Yeah, some of these times you need to create a snapshot for backup purposes, Time Machine has manual controls. All you need to do is give it a snapshot name. And then you have the ability to actually persist this snapshot data into a third party or object store so that your durability and that global data access requirements are met kind of stuff. So we kick off a snapshot operation. Let's look at what it is doing. If you see what is the snapshot operation that this is going through, there is a step called quiescing the databases. Basically, we're using application-centric APIs, and here it's actually RMAN of Oracle. We are using the RMan of Oracle to quiesce the database and performing application consistent storage snapshots with Nutanix technology. Basically we are fusing application-centric and then Nutanix platform and quiescing it. Just for a data point, if you have to use traditional technology and create a backup for this kind of size, it takes over four to six hours, whereas on Nutanix it's going to be a matter of seconds. So it almost looks like snapshot is done. This is full sensitive backup. You can pretty much use it for database restore kind of stuff. Maybe we'll do a clone demo and see how it goes. >> John: Yeah, let's go check it out. >> Bala: So for clone, again through the simplicity of command Z command, all you need to do is pick the time of your choice maybe around three o'clock in the morning today. >> John: Yeah, let's go with 3:02. >> Bala: 3:02, okay. >> John: Yeah, why not? >> Bala: You select the time, all you need to do is click on the clone. And most of the inputs that are needed for the clone process will be defaulted intelligently by us, right? And you have to make two choices that is where do you want this clone to be created with a brand new VM database server, or do you want to place that in your existing server? So we'll go with a brand new server, and then all you need to do is just give the password for you new clone database, and then clone it kind of stuff. >> Sunil: And this is an example of personalizing the database so a developer can do that. >> Bala: Right. So here is the clone kicking in. And what this is trying to do is actually it's creating a database VM and then registering the database, restoring the snapshot, and then recoding the logs up to three o'clock in the morning like what we just saw that, and then actually giving back the database to the requester kind of stuff. >> Maybe one finally thing, John. Do you want to show us the provision database that we kicked off? >> Yeah, it looks like it just finished a few seconds ago. So you can see all the tasks that we were talking about here before from creating the virtual infrastructure, and provisioning the database infrastructure, and configuring data protection. So I can go access this database now. >> Again, just to highlight this, guys. What we just showed you is an Oracle two node instance provisioned live in a few minutes on Nutanix. And this is something that even in a public cloud when you go to RDS on AWS or anything like that, you still can't provision Oracle RAC by the way, right? But that's what you've seen now, and that's what the power of Nutanix Era is. Okay, all right? >> Thank you. >> Thanks. (audience clapping) >> And one final thing around, obviously when we're building this, it's built as a past service. It's not meant just for operational benefits. And so one of the core design principles has been around being API first. You want to show that a little bit? >> Absolutely, Sunil, this whole product is built on API fist architecture. Pretty much what we have seen today and all the functionality that we've been able to show today, everything is built on Rest APIs, and you can pretty much integrate with service now architecture and give you your devops experience for your customers. We do have a plan for full fledged self-service portal eventually, and then make it as a proper service. >> Got it, great job, Bala. >> Thank you. >> Thanks, John. Good stuff, man. >> Thanks. >> All right. (audience clapping) So with Nutanix Era being this one-click provisioning, lifecycle management powered by APIs, I think what we're going to see is the fact that a lot of the products that we've talked about so far while you know I've talked about things like Calm, Flow, AHV functionality that have all been released in 5.5, 5.6, a bunch of the other stuff are also coming shortly. So I would strongly encourage you guys to kind of space 'em, you know most of these products that we've talked about, in fact, all of the products that we've talked about are going to be in the breakout sessions. We're going to go deep into them in the demos as well as in the pods. So spend some quality time not just on the stuff that's been shipping but also stuff that's coming out. And so one thing to keep in mind to sort of takeaway is that we're doing this all obviously with freedom as the goal. But from the products side, it has to be driven by choice whether the choice is based on platforms, it's based on hypervisors, whether it's based on consumption models and eventually even though we're starting with the management plane, eventually we'll go with the data plane of how do I actually provide a multi-cloud choice as well. And so when we wrap things up, and we look at the five freedoms that Ben talked about. Don't forget the sixth freedom especially after six to seven p.m. where the whole goal as a Nutanix family and extended family make sure we mix it up. Okay, thank you so much, and we'll see you around. (audience clapping) >> PA Announcer: Ladies and gentlemen, this concludes our morning keynote session. Breakouts will begin in 15 minutes. ♪ To do what I want ♪

(upbeat electronic. music) >> Announcer: Live from Las Vegas, it's theCUBE covering VMworld 2017 brought to you by VMware and it's Ecosystem partners. >> Hi, I'm Stu Miniman here with Keith Townsend and you're watching theCUBE's broadcast of VMworld 2017. One of our guests earlier this week called this set the punk rock set and one of my guests here in a preview said that this is going to be the battle of the baldies (laughter) so I'm really happy to bring two leaders of two of the hottest topics being discussed this week, welcoming back to the program Dom Delfino of course representing NSX and Security at NSBU and Lee Caswell from the vSAN Team. Gentlemen, thanks so much for joining us. >> Stu, how are you, buddy? >> I'm doing phenomenal. Dom, are you making network great again, yet? >> It's fantastic again now. We're making network fantastic again. >> Yeah and I expected you to show up a little more bling because we were talking Silicon Valley. Your group is reaching the three commas of a billion dollars. >> Dom: That's right. >> So let's start there, NSE when it was bought a few years back, over a million dollars. SDN was something that we all in the networking world was talking about and things have changed. I don't hear SDN talked at this show, it's real customers, real deployments, pretty good scale. The interconnected fabric if you will for VM's cloud strategy. >> Yep, absolutely. So Stu, these major transformational shifts in the industry take time, right? You know, you're not going to undo what you've done for the last 25, 30 years in a month or a quarter or a year and I think what you saw initially was adoption of NSX or automation of network provisioning. Then what you saw second to that was microsegmentation as a defense in depth strategy for our customers and now you see the multi data center moving into the hybrid cloud. vRNI is a service, NSX is a service, App Defense, layering additional security capabilities on top of that and as our production customers sort of adopted it in the beachhead methodology operationalized it, you see additional follow on adoptions. We've got one customer running 18 data centers on NSX today so this is becoming more and more mainstream and as you look at our approach moving forward in terms of where we are and the software defines us in our journey, how that connects to our strategy for VMC on AWS or VMC on Blue Mix. You saw Agredo Apenzeller yesterday demonstrate crossed into Microsoft Azure. When was the last time you thought you'd see that at VMworld, huh? >> Hey Lee, I got to bring you in here. (laughter) It's funny, I've lived in the storage world. >> I thought this was a storage show. >> And now we're tech people throwing all these acronyms. >> I know, they're so excited. >> And you know because come on, NSX is not simple. Who's the one that's saving customers money so that they can buy all of these? >> NSX is a great value, but vSAN pays for the ride, right? >> Here we go, right? >> They do. We'll happily accept it. >> I mean, we're consolidating storage in a way that basically brings back the magic of consolidation, right? The first time you consolidated, people called it magic because you consolidated servers, bought shared storage and had money left over, right? Now we're doing the same thing again, right, with now storage, right? What's interesting is is this is a huge career path gain for the virtualization administrator. >> Wow, so talking about being disruptive, vSAN. You know, I've got to rib you guys a little bit at the dodge ball tournament benefiting Unoria, the vSAN team lost to the Dell EMC team, so. >> Can you imagine? And did you see how valiant we were? >> Dom: You guys fall hard. >> You fall hard. (laughter) >> You looked like you could have used a little youth on that team, by the way, Lee. >> So a lot of competition, you walked the show floor. >> Lee: Yeah. >> This, we usually call this storage world. I think it's fair to say it's HCI world now. >> Lee: It's amazing, right? >> How is vSAN fitting into the larger ecosystem? >> You know, we announced, Pat said we have over 10,000 customers now, right? And yet VMware has hundreds of thousands of customers right? So we're just getting started here and what you're finding is the two assets to bring to this party are a hypervisor or a server. >> Keith: Right. >> Right, you don't have either one of those, it's going to be very difficult because if you go back and you'll appreciate this, right? You remember a Type 2 hypervisor? >> Yep, vaguely. I almost wrote about it, like wait, they don't even exist anymore, do they? >> Well, Workstation still, right? If you start thinking, right, that was a hypervisor on a guest, right? And so what happened though, as soon as these XI came out, right, integrated the compelling performance advantages, the resource utilization and then the idea that hey, I got a common management through vCenter, right? That's what's playing right now is users are trying to find leverage and scale, how do I do that and that's where we've just seen a massive adoption of ECM. >> Alright, one of the reasons we brought the two of you together though is because while peanut butter and chocolate are great on their own, the cloud foundation. >> Dom: I have the whole sandwich now, Stu. >> Yes, yes, so you know Cloud Foundation, NSX might be the interconnective fabric between all of them. Cloud Foundation is that solution, there's a whole business unit, put that together and drive that, so talk about how you feed that solution, how that changes the way you think about it. >> Probably the most interesting thing and I've only had the vSAN team for six months but I think the most interesting thing for me and vSAN is it scales downmarket very well as well, so we have massive enterprise customers, right, who have large global deployments of vSAN but you can take vSAN, put it on three nodes and see value out of that, right? And I think when you look at, you know, this is the year of cloud reality I'm calling it now, Stu, right? That's what's happened here this weekend at VMworld. When you look at that I think the most fundamental thing the customers are taking out of this week is my private cloud has to be as good as the public cloud offering, okay? Now if you're a Fortune 1,000 customer you certainly have a lot of resources, a lot of talent, a lot of expertise, a lot of history, and potentially a lot of budget to throw at that problem. But if you're a mid-market customer, right? And you look at I need to build a private cloud that's fast and easy, right? Which was the two primary reasons to adopt public cloud, you have a good place to start with Cloud Foundation and I think it's just the beginning so you get vSphere, you get NSX, you get vSAN, and you get SDDC Manager to do life cycle management, certainly you could layer vRealize on top of that for automation, orchestration, provisioning and self service as well and it really allows everybody to start to take advantage of the capabilities that only existed in the major cloud providers before on-prem and their own data center so I think as you look at Cloud Foundation and I'm working very closely with John Gilmartin on this, moving forward, it is going to become the basic foundational element, pun intended, right, for many of the VMware offerings moving forward as we turn into next year, that we'd look at this very closely and we have a lot of plans as that being the base to build off of in terms of how we help our customers get to this private cloud. >> Lee, I need to hear your perspective because some of this Cloud Foundation, there's got to be some differences when you talk about some of the deployment models whether where I'm doing it, how I'm doing it, VMC, the VMware managed cloud I guess on AWS, VMware on AWS something getting a lot of buzz. You know, everybody's digging into to it. What's it do today, what's it going to do in the future? >> Well, you know I thought it was really impressive when Andy Jassy got up and basically said, "We've been faced with a minor choice." Customers want these to be integrated, right? And the second day was Google, right? Talking about how we're taking developer tools, right, and making them common, so that element. Now storage people think that the strategic engagement with the cloud is about data, right? >> Stu: Right. >> Putting a VM in the cloud, I mean that's a credit card transaction, but once you put your first byte of data into the cloud, now you take on sovereignty issues, you think about performance and where you're going to get guaranteed ihovs out of it. You start thinking about how am I going to move that data? It's not fast or free or as anyone who has emailed a video knows, right, so you start thinking that it's the data elements and now what's really powerful and we saw some of this in the demos in general session. Once you have a common data structure, we call it dSAN, right, all the way from the edge into the data center of virtual private cloud then into the public cloud, now I've got the opportunity to have this really flexible fluid system, right? All virtualized, it's so powerful, right? About how I can manage that and we think, it'll be interesting, does the virtualization administrator then become the cloud administrator, right? >> So then, let's expand that one, vSAN everywhere. vSAN in the AWS, vSAN in vCAN, vSAN in my own data center. How do I protect that data? That seems just, is this where NSX comes in? How do I protect that data? >> Can we let Lee talk the security first? >> Where's the security, is the security in vSAN? >> Cause I know Dom >> We'll let Lee go first and then I'll correct him, okay? (laughter) >> Well, I mean you start with a security like encryption on the data, right? I mean one of the things why vSAN's so portable is because there is no hardware dependency. I mean, we're using like all, we support all different servers, there's no proprietary cards or anything, right, to stick in these servers so we can go run that software wherever. Now, we're also then as a result doing software encryption with our latest release on 6.6 software encryption allows us to use common key management partners, right, and so we use those partners including iTrust, Vales, FlowMetric, and others and now you can have key management regardless of where your data resides, so we start there but then what customers say really quickly, right, is if I start moving something, they say, "NSX help me out, right?" >> So I think Lee took to a very critical part of it, the ability to encrypt that data at rest and you know, as it transits, there's really three elements to this, it's the data itself, which we say that 6.6 introduced, right, the ability to encrypt that data, microsegmentation and upcoming DNE to both protect and encrypt that data while it's in flight and now if you look at that App Defense strategy, right, it's to secure that data while it's being processed as well at the host level up at the application layer, so I think Stu this just continues to be a huge challenge for our customers. Particularly with the breeches, we saw what happened with Wannacry, with Pedia, with non-Pedia, the different versions of that, Electric Blue and all. >> Stop, you know, your boss who's on theCUBE on the other set right now said, "As an industry, we have failed you." Pat Gelson gave the keynote, so when we're solving it, you know we're going to have like next year I expect both of you to have this all fixed. >> One of these, you asked like with all the HCI enthusiasts that are out there in many companies, you know, how do we differentiate? Well, part of it is this is not just a drop in a little box, right, someplace, right? This is how do you go and modernize your data center, basically tie into the complete software stack and regardless of the timing in which you're going to go and deploy that, right, if you're going to deploy the full stack today, that's a VMware cloud foundation, awesome, if you want to go start with vSAN, great, and then add in other pieces, or you can start with NSX. In any event, the common management is the piece that we really think is going to go and set us apart, right, as a part of it's an infrastructure play, not just a point component. >> So? >> Hold on I want to let Don finish. >> Stu, I think three years ago if we sat down here and told you you're going to encrypt your software defined storage, in software, no hardware requirements, I probably would have said I was nuts for saying that and you definitely would have said I was nuts for saying that so this is critical and we are hyper-focused on solving this problem and what customers have to recognize is that you have to make some foundational architectural changes in order to fix this problem and if you don't it's not going away, it's only going to get worse. >> So, I took a peep in at FUTURE:NET. First off, VMware does an awesome job of this conference within a conference. >> Isn't it fun? >> It is fun, a little bit over my head at times, which we have to be getting that same reaction from the CIOs that this stuff even when we're taking stuff that we know very well, Vmware or vSphere, starting with that, adding on vSAN, again the conversation, Dom, we can encrypt at both network and compute and storage? That's a little deep, but now we're talking about this crosscloud conversation that FUTURE:NET is most definitely addressing. How is that conversation going with customers? Are they finally starting to get their arms around the complexity of the situation? >> Absolutely Keith, because when you look at our multi-data center functions of NSX that we introduced back in NSX 6.2 at VMworld two years ago, three years ago, I'm getting long in the tooth here, so I can't remember times anymore. Those were the foundational elements for the components of crosscloud today so many customers who started the NSX journey with one use case and one data center and expanded it horizontally and then down through a number of use cases and then across to another data center are already taking advantage of those crosscloud functionalities from private data center to private data center. Now we've just taken them and extended them into Google Cloud, Azure, and AWS as well. So the customers who've been on this journey with us from the beginning have seen this step by step and it doesn't really seem like a big leap to them already. Now obviously if you haven't been on that journey it seems like you know, hey can you guys really do this and yeah, we've been doing it from private data center to private data center, now we're just bringing that capability to public data center and certainly the partnership with Amazon is a tremendous help to that as well. >> Yeah, when customers are buying into these solutions, and I know you like to look at it as a platform, so let's look out a little bit. I want you to talk a little bit about what we should expect from the future, if it makes edge computing kind of IoT is a big one, I have to expect that both of you have a play there, so? >> I guess I'll touch on that in two pieces so you sort of see us extending this up a little bit initially with PKS with pivotal container services, with Kubernetes on BOSH and the ability to do rolling upgrades and NSX is embedded in that solution, right, it's not a built-on offering, it's natively part of that for all the reasons that we talked about earlier and we see a lot of opportunities as it relates to edge computing, right, and I think this is something that, wasn't it file computing like seven years ago, Stu? >> Your former employer was one that was pushing that. >> Dom: Oh okay, yeah what happened to that? >> Yeah I have heard it come back from data center to cloud. >> I'm just needling you Stu, we didn't need to get into that. >> But you know, terminology does matter, but I hear your point. >> So I think A. IoT is the biggest security challenge that we face, right? >> Stu: Yep. >> That's number one. If you think it's bad now it's about to get a lot worse with the wholesale adoption of IoT. I think that when you look at the remote office, the branch office, what's going on with the transition with wide area networking right now, I think there's a tremendous opportunity there. Clearly we have a play where you can provide sort of a branch in a box with our technology but I think there's a lot of things you'll see coming from us in the near term as far as innovation that we can do there to really enhance edge computing as it relates to IoT and certainly our user computing platform with Horizon Air of the Legacy AirWatch venture, is an important part of securing those edge devices as well. >> Lee? >> On the vSAN side, this week we announced the HDI Acceleration Kit and that's basically a way to take advantage of single socket servers, right? And one of the things we're seeing for bandwidth reasons and economics you don't want to have everything centralized so the ability, particularly in an IoT environment, but also in retail or robo, if you've got hundreds of stores there's no way to put a sandbox and a fiber channel switch in separate storage and scale that, right? So what we're doing is we've got a very cost-effective license, right, incredible where you can get with hardware now, you can go and drop in a three node fully configured vSAN plus vSphere for under 25K. Drop it in, now you've got a virtualized environment, unlimited VMs, this sort of thing where we're helping basically bring the accelerating the adoption using HDI of enterprise modern infrastructure outside the data center. >> So last question around customer adoption and again, assessments of this model. The push, I think 816Z said that the edge is going to eat loud computing. Where do you guys see in the real world, the ground, is it a push towards the cloud or is it this combination of doing? >> In my experience, right and this is like an accordion, right, it goes in, it goes out it goes in, it goes out, why? Well it goes in and out based on economics and bandwidth. Right, so you start looking and saying, now until HDI came out, it just wasn't really feasible to put enterprise infrastructure at the edge, right? >> Keith: Right. >> So things were centralized, right? Well now, right, now we start distributing again, right? The cloud is an example of more centralized, right? But I think we're going to see both, right? And you're going to see this what's particularly interesting right now is right, the new advances in media, CPUS, low-latency networks makes it possible to use these I call it the serverization of storage, but really it's a serverization of the modern data center, right, and which by the way is common to how clouds are built. >> But does that mean the overall IT management or complex, as I build it out that control plane. >> I'll give you an example from this morning. I was meeting with one of the largest banks, right? And they were looking at HDI, they've used a lot of stance ORKS in the past and do you know what he asked at the end? "Could you give me the ORK charts of customers "in my scale who are using HDI?" >> Stu: Yeah. >> Because I want to go figure out how I hyper-converge my team. We'll never be fast until we go and get teams that are working more closely together where they start from the VM level and then they look at the network attributes and the storage attributes and the compute attributes. That's going to speed up everything. >> And I think Lee is 100% spot on there and every customer I've talked to this week, you have to make the transition to an infrastructure team, not a network team, a storage team, a security team, you're an infrastructure team, and this is why the app developers have been going around you, right? And this is why you have Shadow IT, it's because they want fast and simple and they don't want to have to deal with four different people, right? They don't want to have to deal with a serialization of a deployment that they're left waiting for the lag for and I think in terms of the edge computing, I think you related it to one of the conversations by Andreessen Horowitz. I think that might differ a little bit in the consumer space and in the enterprise space as well so it may be the case in the consumer space that it erodes some functionality from the cloud, particularly on the IoT side of things as well, driverless cars and things of that nature where it makes sense that if you get disconnected that you still need to have some computing capacity so you don't crash, right Lee? Crashing is not good. But I think the behavioral change, the people change, the mindset change is much more challenging than the technological change. Everything you haven't done before seems complicated until you actually do it, right? >> Alright well, we talked a lot to customers. Actually some of that organizational change is helping them to tackle things like those new architectures. Security is one that is I've been leaving it for too long and now absolutely front of the table. Don Delfino, Lee Caswell, always a pleasure to catch up with both you. >> Always a pleasure. >> Hope it lived up to your expectations that we brought the heat. Keith Townsend, I'm Stu Miniman. You're watching theCUBE, back with lots more coverage here from VMworld 2017. Thank you for watching the CUBE. (light electronic music)

>> Announcer: Live from Las Vegas, it's the Cube, covering VMworld 2017, brought to you by VMware and its ecosystem partners. >> Welcome back everyone live, here in Las Vegas from VMworld 2017, I'm John Furrier of the Cube, live coverage of VMworld 2017 with my cohost Dave Vellante, next guest Dom Delfino, senior vice president of sales and systems engineering, Cube alum, great to see you, welcome back. >> Thanks guys, good to be here again. >> RAC are covering VMworld, the ecosystem has been a little tide goes out, tide comes in, real clarity this year, cloud, you want it on private cloud, public to private cloud or Amazon. >> Dom: Right. >> Any questions? >> Dom: Exactly. Clear. >> This is the vision coming to fruition. This is what you're seeing this year at VMworld. I think in particular when you talk to the customers, they're now in a state of cloud reality. There was sort of this big rush, I'm going to try to move as much to the public cloud as possible and then in terms of the scale they got there, they start to have then challenges on that side, they realize, I need to have a dual strategy. I need to have a private, a public, a hybrid strategy. I think you see all the announcements that we've made today, with DFC on AWS going live now, with more coming around the world in different zones as we progress throughout the rest of the year and into next year, as well as all the service offerings we just announced, Wave Run is a service, VRNI is a service, NSX is a service, app defense, which is our latest security strategy as well. Customers really see how it comes together now and they want to go down that journey with VMware. >> It's important too to clarify, I call the high level messaging, so it's got clarity, but also VMware and ecosystems has a lot under the hood and it can get very technical, so you got to balance the speeds and feeds to feed the red meat to all the practitioners and then the high level. I got to ask you the question because people that are sitting out there on this cloud reality that you mentioned, they don't have a lot of people sometimes. Someone's got to implement this stuff, automation's coming, okay I get that, but getting to the cloud is not easy. I still got to run my shop, what is that operational reality right now because cloud reality, okay I get it, but now I got to turn my on premise into a true private cloud with a new operating model, new practices, how are the VMware customers dealing with that? >> I think that's part of moving away from the legacy as fast as you can or at least where you have to keep it, you've got to sort of isolate it and put it in a corner because it's the legacy that's holding most of us back, right? Because I got to understand how to run the legacy, keep the lights on, that takes 20, 30, 40, 50% of my time, depending on the customer, depending on their infrastructure at the same time I've got to retool my skills, I've got to retool my tool kits that I use, my run books, my operational processes, but now they at least have a direction to build to. All the customer meetings we're having here today it's about software defined. How do I build this abstraction layer? Okay we've been doing this with VMware for years on the compute side, many of them have ventured down the journey with us on the NSX side, we see 10,000 customers roughly on the VSAN side as well and that's about putting together, putting the automation tool set around it and really building that same experience that they can get in the public cloud, which it's fast and it's easy on their on prem data centers as well. Sometimes there's many reasons to retain on the private side, data sovreignty, intellectual property, all of those things as well. I think that's where the customers are in the journey right now and it's now they feel comfortable with the direction and they're going to adopt quickly. >> I like this idea of cloud realities. We've been talking on the Cube today about configuring the cloud to the realities of your organization's data. You're talking about governance, security, data locality, etc. so it really comes back to a data challenge. You can't just take all your data and shove it up into the cloud. What are you seeing from customers in that regard? >> I think there's a regulatory component to that as well, particularly if you go overseas, to Europe and Asia, there's a lot more challenges around that as well. I think what you're seeing is that customers recognize the fact that not everything is going to go into the public cloud at this point, so they're really prioritizing, burstable work loads, temporary work loads, definitely a prime opportunity to put in the public cloud. New application development, definitely a primary opportunity to put in the cloud. If I'm in the health care business and I have to retain health care records for x number of years and I'm responsible for HIPPA compliance around them, maybe not something that I'm just going to shove up into the cloud today. It's use case specific depending on and application specific, depending on the vertical industry, the customer resides in and depending on where they are in their journey to the cloud as well. >> You've got a lot of momentum in your business right now. Basically you're on fire. We talked about the cloud realities, that's part of it. The AWS announcement last year, even though it was a year ahead of time, gave a lot of clarity to people. How much of the momentum is due to those factors? Again, the cloud reality, the fact that people are now more comfortable with your cloud strategy and saying okay, I'm willing to make maybe a multi-year commitment with VMware. Is that a factor? >> It is a factor, it is a factor and I think the two remaining components, accelerating and capturing momentum in the market of our SCDC strategy being VCN and NSX has also helped that reality come to fruition for customers as well. It is software defined, we've been talking about software defined data center for a long time, like everybody else in the industry, we talk about things sometimes a lot sooner than they come to fruition, but now that they put together VC ware with NSX with VSAN, and they say hey, I can actually build a private cloud that's fast and easy, which is the reason a lot of my IT people or my application developers were going around me, because the public cloud was faster and easier. Wasn't necessarily cheaper, but it was definitely faster and easier, now customers who've been on that journey with us for the last year realize they can offer the same thing on prem as well and take advantage of both. Does that make sense? >> Yeah. What's the biggest walk away for you right now, looking at VMware, if you had to talk to customers that are not here and looking at the online coverage, certainly Twitter you'll bump into a lot of Cube coverage and lot of pictures, lot of architectural slides. What's the big walk away so far, day one? >> I think tremendous innovation is the big walk away. In many different categories coming forward, you'll hear another big announcement tomorrow coming up in terms of what we'll be doing in conjunction with one of our sister companies in the application development world. But also about taking security to the next level with app defense, so microsegmentation has become fairly ubiquitously known within the industry now, how do I take that into the guest, into the operating system, into the application layer? How do I secure those things as well? You see a lot of customers getting hit with ransomware attacks this year, those are big reality checkers for you if you're the one sitting behind the keyboard that's got to defend your environment against that and rebuild it and I think they really see VMware continue to push the envelope to develop very innovative solutions to these approaches that are very cost effective and that are also very high performance. >> Personal question, as you're out in the field talking to customers, you've been in the industry for a while, you've seen the waves. What's the biggest thing that you notice, observe out there right now? What's happening? Share some color with the landscape in the marketplace. >> I think there's some good recognition from customers around the type of operational transformation that they're going to have to go through in this journey. It's not about the network independent from storage independent from security independent from computer anymore. Infrastructure is one entity, that's the way the application owners and the application developers view it and want to consume it, that's the way that infrastructure teams are going to have to deliver it. I think there's a lot of recognition of that. I think there's recognition that the security problem is bigger and badder and worse than ever and it's not going away any time soon and there's sort of no magic box. If there was, you'd pay a lot of money for it to make your problems go away, but it's really something that has to be ubiquitous. Infosect policy has to be aligned with infrastructure security implementation. I could have the greatest policy in the world, if I can't actually implement it, I'm not going to get the benefit to that security there. I think those are some of the things as well. I think sort of the container world is going through a little bit of the post high upcycle, what's the reality check of that environment as well right now, we saw this with open flow and SDN five and six years ago. >> John: Saw it on big data with Hadoub. It's so expensive to run, why even do it? At some point, it can be total cost ownership and ease of use, old school topics. >> We're well into production ready phase of software defined networking. We're well into the production ready phase of software defined storage and hyperconverge infrastructure we need to take containers into that next phase as well. >> Bottom line, what does cloud ready mean to an enterprise these days? >> Cloud ready means that application, that work load is portable and I can deliver the same level of availability, service and agility, whether it's in the public cloud or whether it's in my private data center. Or I move it back and forth between both. We're certainly excited about the momentum we see with our customers, I think you can see and hear the buzz around VMware going on this year and I think it's the best it's been in a few years. >> You run the SE team as well right? >> Dom: Yes I do. >> How does that work? SE's are like the Navy SEALS John always talks about on the beach, they, >> I like to call them the conscience of the sales force. >> There you go, right. Customer trusts them, but at the same time, they understand the customer requirements at a very deep level. How are they organized? How do they fit into the partner ecosystem, maybe you could explain that a little bit. >> Yeah I think traditionally we've organized our SE's, aligned them with product categories, so I've got networking and security SE's, I've got cloud management, automation, orchestration SE's and software defined storage SE's, but I think that sort of is the base line and then you start to build their skill sets toward solution, towards a solution. What types of solution? Is it containers on open stack? Is it VMware's STDC stack? Is it around particular vertical solutions? If you're an SE on my health care team, you're probably very focused on electronic health records and EPIC and Medtronic and different applications like that. How do you solve those customers' problems at the higher level and be able to drill down at the same time with the domain experts from those customers when they want to understand how OSPF works and NSX or they want to understand how lund creation works in VSAN. It's sort of an evolution in terms of building skills. You've got to start at the deepest levels and then you got to build to how those products and those technologies integrate together to provide the customer with a solution. >> So as you move toward this multi cloud word, throwing another buzz word, but is this cloud architect like SE role emerging? >> We'll call them a solution architect. That solution may be a cloud solution, it may be a vertical solution targeted at a specific customer base and make sure that we do what's appropriate to serve our customers. >> John: What's the coolest thing you've worked on this year? >> I've got to think that app defense is the coolest thing that we've got out this year. I think that we've solved a lot of problems with microsegmentation from a network security perspective. I think now going up into the guest and into the application layer and providing an analogous functionality there is going to be really a very very prevalent way of preventing breaches, malware, malware propagation, ransomware in the future as well. I'm a little bit of a security geek, it's attractive to me. I really see that as just an ongoing, it's not even a battle anymore, it's a war now for our customers. We want to help them win that war. >> John: Ransomware has been so brutal. >> Ransomware's been brutal and I mean, see customers almost going out of business. >> Well it's become a board-level topic overnight. It is a serious board-level topic, not just lip service. You're seeing that right? >> You will see in some circumstances boards actually pulling the chief information security officer out of IT and having them report directly to the board. >> Well it makes a lot of sense. >> John: The pressure is unbelievable. >> The pressure is unbelievable right? >> In a lot of regards you would think that the CSO certainly should not report to the CIO, it's kind of like the fox watching the hen house dynamic. Maybe that's not the best analogy, but there should be an inherent tension there number one, but number two is what's the right regime? Why is it IT's problem? It shouldn't be. >> Yeah I think it goes back to information security policy versus actual implementation and the gap that's existed between those two for years for many reasons, networking being a flagrant issue in that context, where I could say oh, this application, this user needs to talk to this application, this application needs to this set of data. How do we implement that? That's not the easiest thing with the tool set that customers who run legacy networks have had historically. I think now that we have some of those things, you'll see the scenario I just described where a few organizations are pulling the CSO out of IT and reporting to the board or some, we've seen board level mandates for segmentation initiatives within the technology area as well so I think this is going to be an ongoing battle that we face moving forward. >> This is the biggest problem I would say at the Cube all day long because part of the value proposition of cloud and dev ops and apps is having data in real time. To be liberal with the data, you run the risk of opening it up so you can't do it the old way. >> Part of the cloud adoption and the new wave of applications about moving these businesses forward, the security is one of those things that will move you backwards from where you are today. I think it's important that we be able to tackle all these battles on all different fronts at the same time. >> If I may, I know we got to go, but there's another dynamic as well which is the recognition that we are going to get penetrated and yet I think it was the third leg of Pat's slide today was response. Boards are saying it's not if, it's when. How do we respond? That's a critical part of the implementation. >> I think it's, we talk about IOT. Think about the number of new entry points you create into your infrastructure, every device you connect to the network itself. Keeping them out is a huge challenge. The question is what can you do as the owner/operator once they are inside? How do you limit, how do you restrict the level of risk that you have and exposure you have to your data, to your applications to your customer information, so on and so forth and I think that's what we've brought to the table in a substantial way with microsegmentation with NSX and I think you'll see that continue to really raise the game with app defense as well. >> Dom Delfino, great to have you, great color, great commentary, you're like a pro. He's just like a anchor with us, SportsCenter >> If Pat fires me am I in? No? >> John: You're in. >> All right. >> Pat fire him so we can hire him. >> John: Don't fire me, Pat, I like my job. >> Dom, thanks so much, good coverage, always great. >> Dave: Thank you, pleasure. >> Bringing a great attitude to the Cube, great energy. More come, day one as we continue down, wind down day one and three days of wall to wall coverage with the Cube VMworld two sets, double barrel shotgun of content here at the Cube, we'll be back with more after this short break. (electronic music)

>> Announcer: Live, from Las Vegas, it's The Cube covering Interconnect, 2017. Brought to you by, IBM. >> Hey welcome back everybody, live here in Las Vegas at the Mandalay Bay IMB Interconnect 2017, it's The Cube's exclusive coverage, I'm Jon Furrier, my co-host Dave Vellante, our next guest is Ramesh Gopinath who's the VP of Block Chain Solutions and Research, welcome to The Cube. >> Thank you. >> Block chain front and center, super exciting, it's been trending pretty much throughout the conference, really is an amazing story, big props from the CEO and (mumbles) and a variety of the executives. Watching is instrumental in the future of business, we had Don Tapscott on yesterday really talking about the revolution of what this is all about and he's the author of the book, The Blockchain Revolution, but if blockchain is a game changer shift to how the business will be operating in the future, so just to level step, just give us the one on one blochchain, versus bitcoin, and why IBM is going in this direction and where it came from. >> So blockchain is all about increasing a trust in business transactions. This is something we recognize about a couple of years ago when a small team of us started playing around with, you know, the technology behind bitcoin, right. And we look at it and said hey look, here's an opportunity for the first time for companies to share some information in a secure fashion with each other and, in addition, run some workflows or business processes on top. That was an eye opener for us, it immediately told us this could have applications in all industries, right. And so what do we do first? So we said let's play around with this a little bit. We looked at existing technologies out there for blockchain and to pick the platform you tried a few use cases and realize, oh my god, there is a whole lot to be done to get a blockchain for business, right. And that's how we started this journey, almost a year and a half, two years ago. And we decided to explore that. >> And the key distinction Ramesh, and we know from just highlighting it here for the folks, is bitcoin is a currency that has a blockchain, so it's powering bitcoin. You're talking about something more fundamental for business which is using the blockchain technology for businesses and what bitcoin is to blockchain, business is to blockchain from your standpoint. >> That's right, and also I think the blockchain is really, the inspiration for it comes from bitcoin perhaps, that's a good way of thinking about it. But today for example, the hyperledger version one that was announced earlier this week at this conference is dramatically different from the underlying blockchain and bitcoin in other platforms out there, right. Because it's really built primarily based on requirements that we have gathered by working with hundreds of clients in financial services and supply chain, in public sector, et cetera, and realizing what levels of confidentiality, what levels of privacy, what level of permissioning, you know, who participates in the transaction. All of that is what has led to, what we call the (mumbles)- >> John: Okay somebody's got a question. >> John: I got a follow up on that, but go ahead. >> Uh, just one more point on this but you can follow up on my point. Give us the status of blockchain today for IBM. Lay out the solution because you move from research now to the exclusions group, you have customer action going on, sales motions, solutions motions. What is the architecture, what does it look like, what is the solution today from a blockchain standpoint? >> So, just, you asked what are you doing at a high level, essentially we have three broad, big investments. One is everything to do with you know, opensource in a hyperledger project, I mentioned that. Then there is you package that into a platform, IBM blockchain, high security business network, that was also announced earlier this week. And the third layer is again what you asked about solutions. What we have been doing over the last year, year plus is, in fact, it's an interesting journey, we started out with what I call blockchain tourism, there were a whole bunch of POC's if you want to call it that, starting with financial services initially, but in gradually other areas, like supply chain, in healthcare, et cetera. Towards the middle of 2016 we saw a transition, at least on the financial service side people were started to talk about, hey now I understand this technology and what it's capable of, let's talk about production deployments, right now I'll give you a few examples as we go along. >> Dave: So, I want to go back if I can a little bit and just get somewhat didactic for a moment. My understanding is there's three attributes, I'm sure there are many more of blockchain which are really relevant, and especially as it relates to the security if I may, it's distributed obviously, and it's been said it's virtually unhackable unless 50% of the stakeholders agree to collude, and then there's no need for a trusted third party so it reduces the threat space. Are those sort of accurate statements and when somebody says, well it's virtually unhackable, you know you tweet that and somebody says, well everything's hackable, help us understand sort of those fundaments of blockchain and why they're relevant. >> That's right, so the way I think about it is a blockchain is a trusted database. Now why is it trusted? There are three properties, I'll get to it, kind of overlaps with what you mentioned. The first one is, any transaction you do onto the database, anything that goes in it basically is done in a nonreputiable fashion. If I do something I can't say, "I didn't do that," so that helps. What goes in, you know you have that property. The second piece is, whatever goes in goes in through a vetting process, we will call it the consensus. There is some sort of a chat between parties before something goes in. Therefore, I can't unilaterally do something onto the blockchain, right, I can't, somebody else vetted what I did, that increases trust. And the third piece is, once it gets in there it cannot be tampered with. We say it's immutable sometimes, and what is that based on? There's a whole lot of topographic math behind it, but at a high level there are two aspects to it. One is, there are multiple copies. So if I change something, if I hack into mine, I'm inconsistent with what others have, so that's one. The second is, the transactions are chained together, blocks of transactions are chained together where a fingerprint of one block is put into the next. What that means is, if I tamper with the block say 15, a long blockchain, all transactions after that are invalid, I have to do a lot of work to fix it, so it's very very hard to tamper with. Of course, as with security, there's no such thing as nothing that is hackable, right, so collusions et cetera, potentially can happen. But the key is, significant increase in the level of trust is the way I would put it. >> Dave: Great, okay, and so now if we can get into sort of how people are specifically applying this technology, you guys started with the hyperledger, you know, open project, but can we get more specific in terms of how say organizations are actually deploying blockchain? >> Ramesh: So we are still running a blockchain in productions since September 6th, right, so it's been only four months. In fact that blockchain is more than a half a million blocks today, so let me tell you what that solution is so you get a sense of, and it's very prototypical in terms of, you know, all solutions that I've dealt with so far across industries. The use case is a following, so you have a buyer, you have a seller and you have a financer, that's IBM. We basically finance, shotgun financing of, think of it as channel financing or inventory finance. What happens typically is, the buyer basically orders something and the seller essentially gets approval from us to say, okay, yeah we can basically send it to the buyer. A few days go by, IBM has already paid the seller basically, just like credit cards (mumbles) consumers. A month later basically we go in, say hey look, guys, time for you to pay up and they say, look, we didn't even receive the goods. So this entire process, what I just described you can think of as a workflow where these three parties are sending messages back and forth. The way we do it in a blockchain is, this entire workflow is captured as a sequence of transactions that are registered on the blockchain. Now how does this help us? Take the example I gave, proof of delivery. If when the logistics company delivers it at the buyer's site, it's recorded on the blockchain. There is no need for a dispute. And typically disputes, basically puts a lot of capital, you know, it holds up a lot of capital right. Capital inefficiency is the problem we're after. In fact, after six months of deployment I can tell you essentially a significant improvement in terms of the time savings as well as elimination of disputes. >> John: That's a great efficiency. Who's buying, who's actually implementing it customers-wise. Can you name names? >> Ramesh: Yeah, so, examples are the, let me give you a few in financial services. So we are working with Salus Bank which does, you now, five trillion dollars worth of foreign transactions every day. They are building a netting engine called Salusnet a solution called Salusnet, and we're working with them on that. Another example is the work that we are doing with Northern Trust, where basically they have a private equity administration blockchain. In fact, it's a very interesting one because it also involves the regulator as a part of the blockchain, so that's a second example. A third one is the one we announced in January with the Depository, Trading and Clearing Corporation DTCC, and that one is for credit debitors, life cycle management, in fact all the examples if you notice, there is a life cycle like I gave in that example earlier of buying till all your goods are delivered, payment is made, those life cycles, those processes are captured as trusted processes on a trusted data store. That's basically blockchain for you, right, that's financial services. Maybe I'll touch upon two more examples to complete the story. Supply chain. I walk into a store and buy some sliced mangos at Walmart, is it safe to eat? To answer that question you need to know the provinence. Which farm in Mexico did it come from, who all touched it, who washed it, who processed it, et cetera, all the way till it got to the store. That sort of information sharing does not happen today in the supply chain. We believe with the block chain that is possible, that allow us to get a good sense of where things came from, making consumers more comfortable. Similar story can deal with pharma too. I pop a pill, I want to be sure that it's safe to have. In fact, as you know the World Health Organization says in Africa, every year a hundred thousand kids die of counterfeit malaria drugs alone, right, so imagine if you could capture these sorts of supply chain flows on a blockchain you could make dramatic improvements. >> Dave: Diamonds provenience is another one, and it's not just blood diamonds. >> Ramesh: I'm more excited by the providence of food and pharma, but diamonds- >> But there's tons of fraud in the diamond supply chain. >> Ramesh: Absolutely. >> And that's really where they're, you know- >> John: Well this brings up the whole business model disruptions, so, what are you guys seeing for the kids of conversations? Because you're getting at the business model impact significantly one, you're reducing costs of transactional costs for new measurement systems, aka blockchain, and you have all the methodology behind it, but everything from music to art to content, I mean, payments, this is like a game changer. >> Absolutely, and I think from the point of view, you know, in all of the use cases I've seen, the sort of value to the ecosystem is clean and obvious, and so you can immediately say, aha, this is going to happen overnight. But the reality is basically, it's a complex ecosystem play though. So, for example, in the supply chain use case, food safety, you need to have the farmers, the entire value chain involved, participating in some fashion on the blockchain. That is not easy to do. So there is, how do you sort of set up ecosystems is a key part of- >> John: What's your strategy there? I'm going to ask Marie when she comes on, but what's the strategy with ecosystem? Because you want to jump start this, you got to prime the pump big time. >> Ramesh: Absolutely, so there are many ways to solve this, but one approach we have taken so far, and it's obvious in all the sort of partnerships that we're working on. Take for example food safety. One way to start with it is to start with a big retailer, like a Walmart. They bring in the suppliers, and the suppliers bring in the farmers. Take the case of what we are doing in container shipping. So basically, movement of containers from point A to point B, we're trying to completely digitize that process, this is a project that we're doing with Maersk. Why Maersk? They are 20% of the container shipping market, right? But in all of these cases I got to be very clear, we are not building a solution for Maersk or for Walmart. We're really building something for the industry, because food safety, you want to solve it for the industry. Just by helping Walmart along. >> John: That's why the open source thing is critical here. >> That's right. >> John: And the update on that, it's all open source on which components, or is it all open source? >> Ramesh: So the open source is all about at the platform layer. The solution itself, you know not everything in the solution is going to be open source. But the key point I was trying to make is that you go off the sort of significant anchor tenants in the ecosystem that draws others into the picture, but that's still not enough, you need to make sure there are economic incentives for others to join in. >> John: So to put it together, tie it together, the ecosystem strategy is, take an industry scope and try the rising tides floats all boats kind of approach. So adoption's critical. >> Absolutely correct, absolutely correct, and I think again I can use food safety to make that point. Think about it, right? So there is, let's say, a spinach problem, we had it in 2006. So you find a problem, you trace it back to a source. Let's say Walmart is the store in which somebody bought it and it was traced from there. That's not good enough. From the source it went to many other retailers. So you need to be able to track down and pull all of them off the shelves. Therefore you have to go for an industry solution. >> John: I can imagine the healthcare thing would be even more impactful too, I mean, financial services pretty obvious, transactional stuff there, but healthcare, so many different variations of supply chain and transactions. >> Ramesh: Absolutely, so in a way, the way I think about it is in a financial service everybody had a hunch this could be big, but supply chain, we've come a really long way, I think this is going to be the space which will have the most destruction, and its interesting considering when we started my first conversation with folks, whether it be a Walmart or Maersk, first question is, "what is blockchain?" We've come a long way in the last say eight, nine months. >> John: You guys get so excited where you're kind of pinching yourselves because you can get kind of euphoric about some of the disruption impact. It's just mind blowing to think when you're talking about food, the food industry and healthcare. You got to get tampered down a little bit in some realism, is there that IBM excitement internally share some color internally within IBM the excitement, and then you got to be getting realistic, a lot of the clients rolling it out to kind of got to walk before they can run. >> Ramesh: Yeah, so, the way I would state it is if you had asked me a year ago do you expect to be in the shape we are in today, I would have said no way. I've been shocked at the pace at which this has been moving both from the point of view of the technology itself, maturing of the technology, and in fact when we say blockchain is here now, so that's at the technology layer level, but in terms of use cases, think about it, there are a number of financial services institutions that are talking about production deployments late this year, early next year. In fact, when we did our own IBM Institute for Business Values survey, came back with fully 15% of those who were surveyed, there were like 400-odd banks plus capital market institutions are going to be in production by end of this year. When I heard that in September I still didn't believe it, but I am beginning to believe it now. >> Well it's interesting I think, the cultural shift is that technologists from computer scientists to practitioners that are technologists, they get it. They can see what blockchain does, so I think as people get more and more momentum, that's the fly wheel that you guys are open for and it's happening. >> That's right, in fact I'm also a techie at heart, but in terms of conversation (mumbles) I never talk about technology anymore because the thing is, there are only two concepts in blockchain. It's trusted data across companies, trusted business process. Everything else is detail. >> John: Got it, Ramesh, thanks so much for sharing, great conversation, formerly with IBM research, now Vice-President of Blockchain Solutions at IBM, great to interview, great insight, blockchain revolution is here, check out our interview yesterday with Dom Tapscott yesterday on YouTube, The Blockchain Revolution, his book really kind of lays out some of the big disruptive game changers. This is The Cube, doing our share of blockchain right now, bringing content in blocks and chunks, not yet blockchain enabled. I'm John Furrier, Dave Vellante, be back with more after this short break. (synthesized music)