>>Hi, everyone. Good afternoon. Thank you for joining this session. I feel honored to be invited to speak here today. And I also appreciate entity research Summit members for organ organizing and giving this great opportunity. Please let me give a quick introduction. First, I'm a Takashi from Marvin American population, and I'm leading technology scouting and global ation with digital health companies such as Business Alliance and Strategically Investment in North America. And since we started to focus on this space in 2016 our team is growing. And in order to bring more new technologies and services to Japan market Thesis year, we founded the new service theories for digital health business, especially, uh, in medical diagnosis space in Japan. And today I would like to talk how health care has been transformed for my micro perspective, and I hope you enjoy reasoning it. So what's happened since the US identify the first case in the middle of January, As everyone knows, unfortunately, is the damaged by this pandemic was unequal amongst the people in us. It had more determined tal impact on those who are socially and economically vulnerable because of the long, long lasting structural program off the U. S. Society and the Light Charity about daily case rating elevator country shows. Even in the community, the infection rate off the low income were 4.5 times higher than, uh, those of the high income and due to czar straight off the Corvette, about 14 million people are unemployed. The unique point off the U. S. Is that more than 60% of insurance is tied with employment, so losing a job can mean losing access to health care. And the point point here is that the Corvette did not create healthcare disparity but, uh nearly highlighted the underlying program and necessity off affordable care for all. And when the country had a need to increase the testing capacity and geographic out, treat the pharmacies and retails joined forces with existing stakeholders more than 90% off the U. S Corporation live within five miles off a community pharmacy such as CVS and Walgreen, so they can technically provide the test to everyone in all the community. And they also have a huge workforce memory pharmacist who are eligible to perform the testing scale, and this very made their potential in community based health care. Stand out and about your health has provided on alternative way for people to access to health care. At affordable applies under the unusual setting where social distancing, which required required mhm and people have a fear of infection. So they are afraid to take a public transportacion and visit >>the doctor the same thing supplied to doctor and the chart. Here is a number of total visit cranes by service type after stay at home order was issued across the U. S. By Ali April patient physical visits to doctor's offices or clinics declined by ALAN 70%. On the other hand, that share, or telehealth, accounted for 25% of the total total. Doctor's visit in April, while many states studied to re opening face to face visit is gradually recovering. And overall Tele Health Service did not offset the crime. Physician Physical doctor's visit and telehealth John never fully replace in person care. However, Telehealth has established a new way to provide affordable care, especially to vulnerable people, and I don't explain each player's today. But as an example, the chart shows the significant growth of the tell a dog who is one of the largest badger care and tell his provider, I believe there are three factors off paradox. Success under the pandemic. First, obviously tell Doc could reach >>the job between those patients and doctors. Majority of the patients who needed to see doctors who are those who have underlying health conditions and are high risk for Kelowna, Bilis and Secondary. They showed their business model is highly scalable. In the first quarter of this year, they moved quickly to expand their physical physicians network to increase their capacity and catch up growing demand. To some extent, they also contributed to create flexible job for the doctors who suffered from Lydia's appointment and surgery. They utilized. There are legalism to maximize the efficiency for doctors and doing so, uh, they have university maintained high quality care at affordable applies Yeah, and at the same time, the government recognize the body of about your care and de regulated traditional rules to sum up she m s temporary automated to pay a wide range of tell Her services, including hospital visit and HHS temporarily waived hip hop minorities for telehealth cases and they're changed allowed provider to use communication tools such as facetime and the messenger. During their appointment on August start, the government issued a new executive order to expand tell his services beyond the pandemic. So the government is also moving to support about your health care. So it was a quick review of the health care challenges and somewhat advancement in the pandemic. But as you understand, since those challenges are not caused by the pandemic, problems will stay remain and events off this year will continuously catalyze the transformation. So how was his cherished reshaped and where will we go? The topic from here can be also applied to Japan market. Okay, I believe democratization and decentralization healthcare more important than ever. So what does A. The traditional healthcare was defined in a framework over patient and a doctor. But in the new normal, the range of beneficiaries will be expanded from patient to all citizens, including the country uninsured people. Thanks to the technology evolution, as you can download health management off for free on iTunes stores while the range of the digital health services unable everyone to participate in new health system system. And in this slide, I put three essential element to fully realize democratization and decentralization off health care, health, literacy, data sharing and security, privacy and safety in addition, taken. In addition, technology is put at the bottom as a foundation off three point first. Health stimulus is obviously important because if people don't understand how the system works, what options are available to them or what are the pros and cons of each options? They can not navigate themselves and utilize the service. It can even cause a different disparity. Issue and secondary data must be technically flee to transfer. While it keeps interoperability ease. More options are becoming available to patient. But if data cannot be shared among stakeholders, including patient hospitals in strollers and budget your providers, patient data will be fragmented and people cannot yet continue to care which they benefited under current centralized care system. And this is most challenging part. But the last one is that the security aspect more players will involving decentralized health care outside of conventional healthcare system. So obviously, both the number of healthcare channels and our frequency of data sharing will increase more. It's create ah, higher data about no beauty, and so, under the new health care framework, we needed to ensure patient privacy and safety and also re examine a Scott write lines for sharing patient data and off course. Corbett Wasa Stone Catalyst off this you saved. But what folly. Our drivers in Macro and Micro Perspective from Mark Lowe. The challenges in healthcare system have been widely recognized for decades, and now he's a big pain. The pandemic reminded us all the key values. Misha, our current pain point as I left the church shores. Those are increasing the population, health sustainability for doctors and other social system and value based care for better and more affordable care. And all the elements are co dependent on each other. The light chart explained that providing preventive care and Alan Dimension is the best way threes to meet the key values here. Similarly, the direction of community based care and about your care is in line with thes three values, and they are acting to maximize the number of beneficiaries form. A micro uh, initiative by nonconventional players is a big driver, and both CBS and Walmart are being actively engaged in healthcare healthcare businesses for many years. And CBS has the largest walking clinic called MinuteClinic, Ottawa 1100 locations, and Walmart also has 20 primary clinics. I didn't talk to them. But the most interesting things off their recent innovation, I believe, is that they are adjusted and expanded their focus, from primary care to community health Center to out less to every every customer's needs. And CBS Front to provide affordable preventive health and chronic health monitoring services at 1500 CBS Health have, which they are now setting up and along a similar line would Mark is deploying Walmart Health Center, where, utilizing tech driven solutions, they provide affordable one stop service for core healthcare. They got less, uh, insurance status. For example, more than 40% of the people in U. S visit will not every big, so liberating the huge customer base and physical locations. Both companies being reading decentralization off health care and consumer device company such as Apple and Fitbit also have helped in transform forming healthcare in two ways. First, they are growing the boundaries between traditional healthcare and consumer product after their long development airport available, getting healthcare device and secondary. They acted as the best healthcare educators to consumers and increase people's healthcare awareness because they're taking an important role in the enhancement, health, literacy and healthcare democratization. And based on the story so far, I'd like to touch to business concept which can be applied to both Japan and the US and one expected change. It will be the emergence of data integration plot home while the telehealth. While the healthcare data data volume has increased 15 times for the last seven years and will continuously increase, we have a chance to improve the health care by harnessing the data. So meaning the new system, which unify the each patient data from multiple data sources and create 360 degrees longitudinal view each individual and then it sensitized the unified data to gain additional insights seen from structure data and unable to provide personal lives care. Finally, it's aggregate each individual data and reanalyzed to provide inside for population health. This is one specific model I envision. And, uh, health care will be provided slew online or offline and at the hospital or detail store. In order to amplify the impact of health care. The law off the mediator between health care between hospital and citizen will become more important. They can be a pharmacy toe health stand out about your care providers. They provide wide range of fundamental care and medication instruction and management. They also help individuals to manage their health care data. I will not explain the details today, but Japan has similar challenges in health care, such as increasing healthcare expenditure and lack of doctors and care givers. For example, they people in Japan have physical physician visit more than 20 times a year on average, while those in the U. S. On >>the do full times it sounds a joke, but people say because the artery are healthy, say visit hospitals to see friends. So we need to utilize thes mediators to reduce cost while they maintained social place for citizens in Japan, the government has promoted, uh, usual family, pharmacist and primary doctors and views the community based medical system as a policy. There was division of dispensing fees in Japan this year to ship the core load or pharmacist to the new role as a health management service providers. And so >>I believe we will see the change in those spaces not only in the U. S, but also in Japan, and we went through so unprecedented times. But I believe it's been resulting accelerating our healthcare transformation and creating a new business innovation. And this brings me to the end of my presentation. Thank you for your attention and hope you could find something somehow useful for your business. And if you have any questions >>or comments, please for you feel free to contact me.

>>Hi, everyone. Good afternoon. Thank you for joining this session. I feel honored to be invited to speak here today. And I also appreciate entity research Summit members for organ organizing and giving this great opportunity. Please let me give a quick introduction. First, I'm a Takashi from Marvin American population, and I'm leading technology scouting and global ation with digital health companies such as Business Alliance and Strategically Investment in North America. And since we started to focus on this space in 2016 our team is growing. And in order to bring more new technologies and services to Japan market Thesis year, we founded the new service theories for digital health business, especially, uh, in medical diagnosis space in Japan. And today I would like to talk how health care has been transformed for my micro perspective, and I hope you enjoy reasoning it. So what's happened since the US identify the first case in the middle of January, As everyone knows, unfortunately, is the damaged by this pandemic was unequal amongst the people in us. It had more determined tal impact on those who are socially and economically vulnerable because of the long, long lasting structural program off the U. S. Society and the Light Charity about daily case rating elevator country shows. Even in the community, the infection rate off the low income were 4.5 times higher than, uh, those of the high income and due to czar straight off the Corvette, about 14 million people are unemployed. The unique point off the U. S. Is that more than 60% of insurance is tied with employment, so losing a job can mean losing access to health care. And the point point here is that the Corvette did not create healthcare disparity but, uh nearly highlighted the underlying program and necessity off affordable care for all. And when the country had a need to increase the testing capacity and geographic out, treat the pharmacies and retails joined forces with existing stakeholders more than 90% off the U. S Corporation live within five miles off a community pharmacy such as CVS and Walgreen, so they can technically provide the test to everyone in all the community. And they also have a huge workforce memory pharmacist who are eligible to perform the testing scale, and this very made their potential in community based health care. Stand out and about your health has provided on alternative way for people to access to health care. At affordable applies under the unusual setting where social distancing, which required required mhm and people have a fear of infection. So they are afraid to take a public transportacion and visit >>the doctor the same thing supplied to doctor and the chart. Here is a number of total visit cranes by service type after stay at home order was issued across the U. S. By Ali April patient physical visits to doctor's offices or clinics declined by ALAN 70%. On the other hand, that share, or telehealth, accounted for 25% of the total total. Doctor's >>visit in April, while many states studied to re opening face to face visit is gradually recovering. And overall Tele Health Service did not offset the crime. Physician Physical doctor's visit and telehealth John never fully replace in person care. However, Telehealth has established a new way to provide affordable care, especially to vulnerable people, and I don't explain each player's today. But as an example, the chart shows the significant growth of >>the tell a dog who is one of the largest badger care and tell his provider, I believe there are three factors off paradox. Success under the pandemic. First, obviously tell Doc could reach >>the job between those patients and doctors. Majority of the patients who needed to see doctors who are those who have underlying health conditions and are high risk for Kelowna, Bilis and Secondary. They showed their business model is highly scalable. In the first quarter of this year, they moved quickly to expand their physical physicians network to increase their capacity and catch up growing demand. To some extent, they also contributed to create flexible job for the doctors who suffered from Lydia's appointment and surgery. They utilized. There are legalism to maximize the efficiency for doctors and doing so, uh, they have university maintained high quality care at affordable applies Yeah, and at the same time, the government recognize the body of about your care and de regulated traditional rules to sum up she m s temporary automated to pay a wide range of tell Her services, including hospital visit and HHS temporarily waived hip hop minorities for telehealth cases and they're changed allowed provider to use communication tools such as facetime and the messenger. During their appointment on August start, the government issued a new executive order to expand tell his services beyond the pandemic. So the government is also moving to support about your health care. So it was a quick review of the health care challenges and somewhat advancement in the pandemic. But as you understand, since those challenges are not caused by the pandemic, problems will stay remain and events off this year will continuously catalyze the transformation. So how was his cherished reshaped and where will we go? The topic from here can be also applied to Japan market. Okay, I believe democratization and decentralization healthcare more important than ever. So what does A. The traditional healthcare was defined in a framework over patient and a doctor. But in the new normal, the range of beneficiaries will be expanded from patient to all citizens, including the country uninsured people. Thanks to the technology evolution, as you can download health management off for free on iTunes stores while the range of the digital health services unable everyone to participate in new health system system. And in this slide, I put three essential element to fully realize democratization and decentralization off health care, health, literacy, data sharing and security, privacy and safety in addition, taken. In addition, technology is put at the bottom as a foundation off three point first. Health stimulus is obviously important because if people don't understand how the system works, what options are available to them or what are the pros and cons of each options? They can not navigate themselves and utilize the service. It can even cause a different disparity. Issue and secondary data must be technically flee to transfer. While it keeps interoperability ease. More options are becoming available to patient. But if data cannot be shared among stakeholders, including patient hospitals in strollers and budget your providers, patient data will be fragmented and people cannot yet continue to care which they benefited under current centralized care system. And this is most challenging part. But the last one is that the security aspect more players will involving decentralized health care outside of conventional healthcare system. So obviously, both the number of healthcare channels and our frequency of data sharing will increase more. It's create ah, higher data about no beauty, and so, under the new health care framework, we needed to ensure patient privacy and safety and also re examine a Scott write lines for sharing patient data and off course. Corbett Wasa Stone Catalyst off this you saved. But what folly. Our drivers in Macro and Micro Perspective from Mark Lowe. The challenges in healthcare system have been widely recognized for decades, and now he's a big pain. The pandemic reminded us all the key values. Misha, our current pain point as I left the church shores. Those are increasing the population, health sustainability for doctors and other social system and value based care for better and more affordable care. And all the elements are co dependent on each other. The light chart explained that providing preventive care and Alan Dimension is the best way threes to meet the key values here. Similarly, the direction of community based care and about your care is in line with thes three values, and they are acting to maximize the number of beneficiaries form. A micro uh, initiative by nonconventional players is a big driver, and both CBS and Walmart are being actively engaged in healthcare healthcare businesses for many years. And CBS has the largest walking clinic called MinuteClinic, Ottawa 1100 locations, and Walmart also has 20 primary clinics. I didn't talk to them. But the most interesting things off their recent innovation, I believe, is that they are adjusted and expanded their focus, from primary care to community health Center to out less to every every customer's needs. And CBS Front to provide affordable preventive health and chronic health monitoring services at 1500 CBS Health have, which they are now setting up and along a similar line would Mark is deploying Walmart Health Center, where, utilizing tech driven solutions, they provide affordable one stop service for core healthcare. They got less, uh, insurance status. For example, more than 40% of the people in U. S visit will not every big, so liberating the huge customer base and physical locations. Both companies being reading decentralization off health care and consumer device company such as Apple and Fitbit also have helped in transform forming healthcare in two ways. First, they are growing the boundaries between traditional healthcare and consumer product after their long development airport available, getting healthcare device and secondary. They acted as the best healthcare educators to consumers and increase people's healthcare awareness because they're taking an important role in the enhancement, health, literacy and healthcare democratization. And based on the story so far, I'd like to touch to business concept which can be applied to both Japan and the US and one expected change. It will be the emergence of data integration plot home while the telehealth. While the healthcare data data volume has increased 15 times for the last seven years and will continuously increase, we have a chance to improve the health care by harnessing the data. So meaning the new system, which unify the each patient data from multiple data sources and create 360 degrees longitudinal view each individual and then it sensitized the unified data to gain additional insights seen from structure data and unable to provide personal lives care. Finally, it's aggregate each individual data and reanalyzed to provide inside for population health. This is one specific model I envision. And, uh, health care will be provided slew online or offline and at the hospital or detail store. In order to amplify the impact of health care. The law off the mediator between health care between hospital and citizen will become more important. They can be a pharmacy toe health stand out about your care providers. They provide wide range of fundamental care and medication instruction and management. They also help individuals to manage their health care data. I will not explain the details today, but Japan has similar challenges in health care, such as increasing healthcare expenditure and lack of doctors and care givers. For example, they people in Japan have physical physician visit more than 20 times a year on average, while those in the U. S. On the do full times it sounds a joke, but people say because the artery are healthy, say visit hospitals to see friends. So we need to utilize thes mediators to reduce cost while they maintained social place for citizens in Japan, the government has promoted, uh, usual family, pharmacist and primary doctors and views the community based medical system as a policy. There was division of dispensing fees in Japan this year to ship the core load or pharmacist to the new role as a health management service providers. And so I believe we will see the change in those spaces not only in the U. S, but also in Japan, and we went through so unprecedented times. But I believe it's been resulting accelerating our healthcare transformation and creating a new business innovation. And this brings me to the end of my presentation. Thank you for your attention and hope you could find something somehow useful for your business. And if you have any questions >>or comments, please for you feel free to contact me. Thank you.

>> Announcer: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> As you may recall, coming into the second part of 2019 we reported, based on ETR Survey data, that there was a narrowing of spending on emerging tech and an unplugging of a lot of legacy systems. This was really because people were going from experimentation into operationalizing their digital initiatives. When COVID hit, conventional wisdom suggested that there would be a flight to safety. Now, interestingly, we reported with Eric Bradley, based on one of the Venns, that a lot of CIOs were still experimenting with emerging vendors. But this was very anecdotal. Today, we have more data, fresh data, from the ETR Emerging Technology Study on private companies, which really does suggest that there's a notable decline in experimentation, and that's affecting emerging technology vendors. Hi, everybody, this is Dave Vellante, and welcome to this week's Wikibon Cube Insights, powered by ETR. Once again, Sagar Kadakia is joining us. Sagar is the Director of Research at ETR. Sagar, good to see you. Thanks for coming on. >> Good to see you again. Thanks for having me, Dave. >> So, it's really important to point out, this Emerging Tech Study that you guys do, it's different from your quarterly Technology Spending Intention Survey. Take us through the methodology. Guys, maybe you could bring up the first chart. And, Sagar, walk us through how you guys approach this. >> No problem. So, a lot of the viewers are used to seeing a lot of the results from the Technology Spending Intention Survey, or the TSIS, as we call it. That study, as the title says, it really tracks spending intentions on more pervasive vendors, right, Microsoft, AWS, as an example. What we're going to look at today is our Emerging Technology Study, which we conduct biannually, in May and November. This study is a little bit different. We ask CIOs around evaluations, awareness, planned evaluations, so think of this as pre-spend, right. So that's a major differentiator from the TSIS. That, and this study, really focuses on private emerging providers. We're really only focused on those really emerging private companies, say, like your Series B to Series G or H, whatever it may be, so, two big differences within those studies. And then today what we're really going to look at is the results from the Emerging Technology Study. Just a couple of quick things here. We had 811 CIOs participate, which represents about 380 billion in annual IT spend, so the results from this study matter. We had almost 75 Fortune 100s take it. So, again, we're really measuring how private emerging providers are doing in the largest organizations. And so today we're going to be reviewing notable sectors, but largely this survey tracks roughly 356 private technologies and frameworks. >> All right, guys, bring up the pie chart, the next slide. Now, Sagar, this is sort of a snapshot here, and it basically says that 44% of CIOs agree that COVID has decreased the organization's evaluation and utilization of emerging tech, despite what I mentioned, Eric Bradley's Venn, which suggested one CIO in particular said, "Hey, I always pick somebody in the lower left "of the magic quadrant." But, again, this is a static view. I know we have some other data, but take us through this, and how this compares to other surveys that you've done. >> No problem. So let's start with the high level takeaways. And I'll actually kind of get into to the point that Eric was debating, 'cause that point is true. It's just really how you kind of slice and dice the data to get to that. So, what you're looking at here, and what the overall takeaway from the Emerging Technology Study was, is, you know, you are going to see notable declines in POCs, of proof-of-concepts, any valuations because of COVID-19. Even though we had been communicating for quite some time, you know, the last few months, that there's increasing pressure for companies to further digitize with COVID-19, there are IT budget constraints. There is a huge pivot in IT resources towards supporting remote employees, a decrease in risk tolerance, and so that's why what you're seeing here is a rather notable number of CIOs, 44%, that said that they are decreasing their organization's evaluation and utilization of private emerging providers. So that is notable. >> Now, as you pointed out, you guys run this survey a couple of times a year. So now let's look at the time series. Guys, if you bring up the next chart. We can see how the sentiment has changed since last year. And, of course, we're isolating here on some of larger companies. So, take us through what this data means. >> No problem. So, how do we quantify what we just saw in the prior slide? We saw 44% of CIOs indicating that they are going to be decreasing their evaluations. But what exactly does that mean? We can pretty much determine that by looking at a lot of the data that we captured through our Emerging Technology Study. There's a lot going on in this slide, but I'll walk you through it. What you're looking at here is Fortune 1000 organizations, so we've really isolated the data to those organizations that matter. So, let's start with the teal, kind of green line first, because I think it's a little bit easier to understand. What you're looking at, Fortune 1000 evaluations, both planned and current, okay? And you're looking at a time series, one year ago and six months ago. So, two of the answer options that we provide CIOs in this survey, right, think about the survey as a grid, where you have seven answer options going horizontally, and then 300-plus vendors and technologies going vertically. For any given vendor, they can essentially indicate one of these options, two of them being on currently evaluating them or I plan to evaluate them in six months. So what you're looking at here is effectively the aggregate number, or the average number of Fortune 1000 evaluations. So if you look into May 2019, all the way on the left of that chart, that 24% roughly means that a quarter of selections made by Fortune 1000 of the survey, they selected plan to evaluate or currently evaluating. If you fast-forward six months, to the middle of the chart, November '19, it's roughly the same, one in four technologies that are Fortune 1000 selected, they indicated that I plan or am currently evaluating them. But now look at that big drop off going into May 2020, the 17%, right? So now one out of every six technologies, or one out of every selections that they made was an evaluation. So a very notable drop. And then if you look at the blue line, this is another answer option that we provided CIOs: I'm aware of the technology but I have no plans to evaluate. So this answer option essentially tracks awareness levels. If you look at the last six months, look at that big uptick from 44% to over 50%, right? So now, essentially one out of every two technologies, or private technologies that a CIO is aware of, they have no plans to evaluate. So this is going to have an impact on the general landscape, when we think about those private emerging providers. But there is one caveat, and, Dave, this is what you mentioned earlier, this is what Eric was talking about. The providers that are doing well are the ones that are work-from-home aligned. And so, just like a few years ago, we were really analyzing results based on are you cloud-native or are you Cloud-aligned, because those technologies are going to do the best, what we're seeing in the emerging space is now the same thing. Those emerging providers that enable organizations to maintain productivity for their employees, essentially allowing their employees to work remotely, those emerging providers are still doing well. And that is probably the second biggest takeaway from this study. >> So now what we're seeing here is this flight to perceive safety, which, to your point, Sagar, doesn't necessarily mean good news for all enterprise tech vendors, but certainly for those that are positioned for the work-from-home pivot. So now let's take a look at a couple of sectors. We'll start with information security. We've reported for years about how the perimeter's been broken down, and that more spend was going to shift from inside the moat to a distributed network, and that's clearly what's happened as a result of COVID. Guys, if you bring up the next chart. Sagar, you take us through this. >> No problem. And as you imagine, I think that the big theme here is zero trust. So, a couple of things here. And let me just explain this chart a little bit, because we're going to be going through a couple of these. What you're seeing on the X-axis here, is this is effectively what we're classifying as near term growth opportunity from all customers. The way we measure that effectively is we look at all the evaluations, current evaluations, planned evaluations, we look at people who are evaluated and plan to utilize these vendors. The more indications you get on that the more to the top right you're going to be. The more indications you get around I'm aware of but I don't plan to evaluate, or I'm replacing this early-stage vendor, the further down and on the left you're going to be. So, on the X-axis you have near term growth opportunity from all customers, and on the Y-axis you have near term growth opportunity from, really, the biggest shops in the world, your Global 2000, your Forbes Private 225, like Cargill, as an example, and then, of course, your federal agencies. So you really want to be positioned up and to the right here. So, the big takeaway here is zero trust. So, just a couple of things on this slide when we think about zero trust. As organizations accelerate their Cloud and Saas spend because of COVID-19, and, you know, what we were talking about earlier, Dave, remote work becomes the new normal, that perimeter security approach is losing appeal, because the perimeter's less defined, right? Apps and data are increasingly being stored in the Cloud. That, and employees are working remotely from everywhere, and they're accessing all of these items. And so what we're seeing now is a big move into zero trust. So, if we look at that chart again, what you're going to see in that upper right quadrant are a lot of identity and access management players. And look at the bifurcation in general. This is what we were talking about earlier in terms of the landscape not doing well. Most security vendors are in that red area, you know, in the middle to the bottom. But if you look at the top right, what are you seeing here? Unify ID, Auth0, WSO2, right, all identity and access management players. These are critical in your zero trust approach, and this is one of the few area where we are seeing upticks. You also see here BitSight, Lucideus. So that's going to be security assessment. You're seeing VECTRA and Netskope and Darktrace, and a few others here. And Cloud Security and IDPS, Intrusion Detection and Prevention System. So, very few sectors are seeing an uptick, very few security sectors actually look pretty good, based on opportunities that are coming. But, essentially, all of them are in that work-from-home aligned security stack, so to speak. >> Right, and of course, as we know, as we've been reporting, buyers have options, from both established companies and these emerging companies that are public, Okta, CrowdStrike, Zscaler. We've seen the work-from-home pivot benefit those guys, but even Palo Alto Networks, even CISCO, I asked (other speaker drowns out speech) last week, I said, "Hey, what about this pivot to work from home? "What about this zero trust?" And he said, "Look, the reality is, yes, "a big part of our portfolio is exposed "to that traditional infrastructure, "but we have options for zero trust as well." So, from a buyer's standpoint, that perceived flight to safety, you have a lot of established vendors, and that clearly is showing up in your data. Now, the other sector that we want to talk about is database. We've been reporting a lot on database, data warehouse. So, why don't you take us through the next graphic here, if you would. >> Sagar: No problem. So, our theme here is that Snowflake is really separating itself from the pack, and, again, you can see that here. Private database and data warehousing vendors really continue to impact a lot of their public peers, and Snowflake is leading the way. We expect Snowflake to gain momentum in the next few years. And, look, there's some rumors that IPOing soon. And so when we think about that set-up, we like it, because as organizations transition away from hybrid Cloud architectures to 100% or near-100% public Cloud, Snowflake is really going to benefit. So they look good, their data stacks look pretty good, right, that's resiliency, redundancy across data centers. So we kind of like them as well. Redis Labs bring a DB and they look pretty good here on the opportunity side, but we are seeing a little bit of churn, so I think probably Snowflake and DataStax are probably our two favorites here. And again, when you think about Snowflake, we continue to think more pervasive vendors, like Paradata and Cloudera, and some of the other larger database firms, they're going to continue seeing wallet and market share losses due to some of these emerging providers. >> Yeah. If you could just keep that slide up for a second, I would point out, in many ways Snowflake is kind of a safer bet, you know, we talk about flight to safety, because they're well-funded, they're established. You can go from zero to Snowflake very quickly, that's sort of their mantra, if you will. But I want to point out and recognize that it is somewhat oranges and tangerines here, Snowflake being an analytical database. You take MariaDB, for instance, I look at that, anyway, as relational and operational. And then you mentioned DataStax. I would say Couchbase, Redis Labs, Aerospike. Cockroach is really a... EValue Store. You've got some non-relational databases in there. But we're looking at the entire sector of databases, which has become a really interesting market. But again, some of those established players are going to do very well, and I would put Snowflake on that cusp. As you pointed out, Bloomberg broke the story, I think last week, that they were contemplating an IPO, which we've known for a while. >> Yeah. And just one last thing on that. We do like some of the more pervasive players, right. Obviously, AWS, all their products, Redshift and DynamoDB. Microsoft looks really good. It's just really some of the other legacy ones, like the Teradatas, the Oracles, the Hadoops, right, that we are going to be impacted. And so the claw providers look really good. >> So, the last decade has really brought forth this whole notion of DevOps, infrastructure as code, the whole API economy. And that's the piece we want to jump into now. And there are some real stand-outs here, you know, despite the early data that we showed you, where CIOs are less prone to look at emerging vendors. There are some, for instance, if you bring up the next chart, guys, like Hashi, that really are standing out, aren't they? >> That's right, Dave. So, again, what you're seeing here is you're seeing that bifurcation that we were talking about earlier. There are a lot of infrastructure software vendors that are not positioned well, but if you look at the ones at the top right that are positioned well... We have two kind of things on here, starting with infrastructure automation. We think a winner here is emerging with Terraform. Look all the way up to the right, how well-positioned they are, how many opportunities they're getting. And for the second straight survey now, Terraform is leading along their peers, Chef, Puppet, SaltStack. And they're leading their peers in so many different categories, notably on allocating more spend, which is obviously very important. For Chef, Puppet and SaltStack, which you can see a little bit below, probably a little bit higher than the middle, we are seeing some elevator churn levels. And so, really, Terraform looks like they're kind of separating themselves. And we've got this great quote from the CIO just a few months ago, on why Terraform is likely pulling away, and I'll read it out here quickly. "The Terraform tool creates "an entire infrastructure in a box. "Unlike vendors that use procedural languages, "like Ants, Bull and Chef, "it will show you the infrastructure "in the way you want it to be. "You don't have to worry about "the things that happen underneath." I know some companies where you can put your entire Amazon infrastructure through Terraform. If Amazon disappears, if your availability drops, load balancers, RDS, everything, you just run Terraform and everything will be created in 10 to 15 minutes. So that shows you the power of Terraform and why we think it's ranked better than some of the other vendors. >> Yeah, I think that really does sum it up. And, actually, guys, if you don't mind bringing that chart back up again. So, a point out, so, Mitchell Hashimoto, Hashi, really, I believe I'm correct, talking to Stu about this a little bit, he sort of led the Terraform project, which is an Open Source project, and, to your point, very easy to deploy. Chef, Puppet, Salt, they were largely disrupted by Cloud, because they're designed to automate deployment largely on-prem and DevOps, and now Terraform sort of packages everything up into a platform. So, Hashi actually makes money, and you'll see it on this slide, and things, Vault, which is kind of their security play. You see GitLab on here. That's really application tooling to deploy code. You see Docker containers, you know, Docker, really all about open source, and they've had great adoption, Docker's challenge has always been monetization. You see Turbonomic on here, which is application resource management. You can't go too deep on these things, but it's pretty deep within this sector. But we are comparing different types of companies, but just to give you a sense as to where the momentum is. All right, let's wrap here. So maybe some final thoughts, Sagar, on the Emerging Technology Study, and then what we can expect in the coming month here, on the update in the Technology Spending Intention Study, please. >> Yeah, no problem. One last thing on the zero trust side that has been a big issue that we didn't get to cover, is VPN spend. Our data is pointing that, yes, even though VPN spend did increase the last few months because of remote work, we actually think that people are going to move away from that as they move onto zero trust. So just one last point on that, just in terms of overall thoughts, you know, again, as we cover it, you can see how bifurcated all these spaces are. Really, if we were to go sector by sector by sector, right, storage and block chain and MLAI and all that stuff, you would see there's a few or maybe one or two vendors doing well, and the majority of vendors are not seeing as many opportunities. And so, again, are you work-from-home aligned? Are you the best vendor of all the other emerging providers? And if you fit those two criteria then you will continue seeing POCs and evaluations. And if you don't fit that criteria, unfortunately, you're going to see less opportunities. So think that's really the big takeaway on that. And then, just in terms of next steps, we're already transitioning now to our next Technology Spending Intention Survey. That launched last week. And so, again, we're going to start getting a feel for how CIOs are spending in 2H-20, right, so, for the back half of the year. And our question changes a little bit. We ask them, "How do you plan on spending in the back half year "versus how you actually spent "in the first half of the year, or 1H-20?" So, we're kind of, tighten the screw, so to speak, and really getting an idea of what's spend going to look like in the back half, and we're also going to get some updates as it relates to budget impacts from COVID-19, as well as how vendor-relationships have changed, as well as business impacts, like layoffs and furloughs, and all that stuff. So we have a tremendous amount of data that's going to be coming in the next few weeks, and it should really prepare us for what to see over the summer and into the fall. >> Yeah, very excited, Sagar, to see that. I just wanted to double down on what you said about changes in networking. We've reported with you guys on NPLS networks, shifting to SD-WAN. But even VPN and SD-WAN are being called into question as the internet becomes the new private network. And so lots of changes there. And again, very excited to see updated data, return of post-COVID, as we exit this isolation economy. Really want to point out to folks that this is not a snapshot survey, right? This is an ongoing exercise that ETR runs, and grateful for our partnership with you guys. Check out ETR.plus, that's the ETR website. I publish weekly on Wikibon.com and SiliconANGLE.com. Sagar, thanks so much for coming on. Once again, great to have you. >> Thank you so much, for having me, Dave. I really appreciate it, as always. >> And thank you for watching this episode of theCube Insights, powered by ETR. This Dave Vellante. We'll see you next time. (gentle music)

>>from the Cube Studios in Palo Alto and Boston connecting with thought leaders all >>around the world. This is a cube conversation, Everyone. Welcome to this week's Cube insights, powered by ET are My name is Dave Volante, and we've been reporting every week really on the code. 19. Impact on Budgets Docker Korakia is back in with me soccer. It's great to see you really >>again for having >>your very welcome. Soccer is, of course, the director of research, that we are our data partner and man. I mean, you guys have just been digging into the data or a court reiterate We're down, you know, roughly around minus 5% for the year. The thing about what we're doing here and where they want to stress in the audience that that's going to change. The key point is we don't just do ah, placeholder and update you in December. Every time we get new information, we're going to convey it to you. So let's get right into it. What we want to do today is you kind of part two from the takeaways that we did last week. So let's start with the macro guys. If you bring up the first chart, take us through kind of the top three takeaways. And just to reiterate where we're at >>Yeah, no problem. And look, as you mentioned, uh, what we're doing right now is we're collecting the pulse of CIOs. And so things change on and we continue to expect them to change, you know, in the next few weeks, in the next few months, as things change with it. So just kind of give a recap of the survey and then kind of going through some of our top macro takeaways. So in March mid March, we launched our Technology Spending Intention Survey. We had 1250 CIOs approximately. Take that survey. They provided their updated 2020 verse 2019 spending intentions, right? So effectively, they first Davis, those 20 21st 19 spending intentions in January. And then they went ahead and up state of those based on what happened with move it and then in tandem with that, we did this kind of over 19 drill down survey where we asked CEOs to estimate the budget impact off overnight in versus what they originally forecast in the year. And so that leads us to our first take away here, where we essentially aggregated the data from all these CIOs in that Logan 19 drill down survey. And we saw a revision of 900 basis points so down to a decline of 5%. And so coming into the year, the consensus was about 4% growth. Ah, and now you can see we're down about 5% for the year. And again, that's subject to change. And we're going again re measure that a Z kind of get into June July and we have a couple of months under our belt with the folks at night. The second big take away here is, you know, the industries that are really indicating those declines and spend retail, consumer airlines, financials, telco I key services in consulting. Those are the verticals, as we mentioned last week, that we're really seeing some of the largest Pullbacks and spend from consumers and businesses. So it makes sense that they are revising their budgets downwards the most. And then finally, the last thing we captured that we spoke about last week as well as a few weeks before that, and I think that's really been playing out the last kind of week in 1/2 earnings is CIOs are continuing to press the pedal on digital transformation. Right? We saw that with Microsoft, with service now last night, right, those companies continued the post good numbers and you see good demand, what we're seeing and where those declines that we just mentioned earlier are coming from. It's it's the legacy that's the on premise that your place there's such a concentration of loss and deceleration within some of those companies. And we'll kind of get into that more a Z go through more slides. But that's really what kind of here, you know, that's really what we need to focus on is the declines are coming from very select vendors. >>Yeah, and of course you know where we were in earning season now, and we're paying close attention to that. A lot of people say I just ignore the earnings here, you know, you got the over 19 Mulligan, but But that's really not right. I mean, obviously you want to look at balance sheets, you want to look at cash flows, but also we're squinting through some of the data your point about I t services and insulting is interesting. I saw another research firm put out that you know, services and consulting was going to be OK. Our data does, you know, different. Uh, and we're watching. For instance, Jim Kavanaugh on IBM's earnings call was very specific about the metrics that they're watching. They're obviously very concerned about pricing and their ability. The book business. There we saw the cloud guys announced Google was up in the strong fifties. The estimate is DCP was even higher up in the 80% range. Azure, you know, we'll talk about this killing it. I mean, you guys have been all over of Microsoft and its presence, you know, high fifties aws solid at around 34% growth from a larger base. But as we've been reporting, you know, downturns. They've been they've been good to cloud. >>That's right. And I think, you know, based on the data that we've captured, um, you know, it's people are really pressing the pedal on cloud and SAS with this much remote work, you need to have you know, that structure in place to maintain productivity. >>Okay, let's bring up the next slide. Now. We've been reporting a lot on this sort of next generation work loads Bob one Dato all about storage and infrastructures of service. Compute. There's an obviously some database, but there's a new analytics workload emerging. Uh, and it's kind of replacing, or at least disinter mediating or disrupting the traditional e d ws. I've said for years. CDW is failed to live up to its expectations of 360 degree insights and real time data, and that's really what we're showing here is some of the traditional CDW guys are getting hit on Some of the emerging guys, um, are looking pretty good. So take us through what we're looking at here. Soccer. >>Yeah, no problem. So we're looking at the database data warehousing sector. What you're looking at here is replacement rates. Um And so, as example, if you see up in with roughly 20% replacement, what that means is one out of five people who took the survey for that particular sector for that vendor indicated that they were replacing, and so you can see here for their data. Cloudera, IBM, Oracle. They have very elevated and accelerating replacement rates. And so when we kind of think about this space. You can really see the bifurcation, right? Look how well positioned the Microsoft AWS is. Google Mongo, Snowflake, low replacements, right low, consistent replacements. And then, of course, on the left hand side of the screen, you're really seeing elevated, accelerating. And so this space is It kind of goes with that theme that we've been talking about that we covered last week by application, right when you think about the declines that you're seeing and spend again, it's very targeted for a lot of these kind of legacy legacy vendors. And we're again. We're seeing a lot of the next gen players that Microsoft AWS in your post very strong data. And so here, looking within database, it's very clear as to which vendors are well positioned for 2020 and which ones look like they're being ripped out and swapped out in the next few months. >>So this to me, is really interesting. So you know, you you've certainly reported on the impact that snowflake is having on Terra data. And in some of IBM's business, the old man, he's a business. You can see that here. You know, it's interesting. During the Hadoop days, Cloudera Horton works when they realize that it didn't really make money on Hadoop. They sort of getting the data management and data database and you're seeing that is under pressure. It's kind of interesting to me. Oracle, you know, is still not what we're seeing with terror data, right, Because they've got a stranglehold on the marketplace That's right, hanging in there. Right? But that snowflake would no replacements is very impressive. Mongo consistent performer. And in Google aws, Microsoft AWS supports with Red Shift. They did a one time license with Park Cell, which was an MPP database. They totally retooled a thing. And now they're sort of interestingly copycatting snowflake separating compute from storage and doing some other moves. And yet they're really strong partners. So interesting >>is going on and even, you know, red shift dynamodb all. They all look good. All these all these AWS products continue screen Very well. Ah, in the data warehousing space, So yeah, to your point, there's a clear divergence of which products CIOs want to use and which ones they no longer want in their stack. >>Yeah, the database market is very much now fragment that it used to be in an Oracle db two sequel server. As you mentioned, you got a lot of choices. The Amazon. I think I counted, you know, 10 data stores, maybe more. Dynamodb Aurora, Red shift on and on and on. So a really interesting space, a lot of activity in that new workload that I'm talking about taking, Ah, analytic databases, bringing data science, pooling into that space and really driving these real time insights that we've been reporting on. So that's that's quite an exciting space. Let's talk about this whole workflow. I t s m a service now. Just just announced, uh, we've been consistently crushing it. The Cube has been following them for many, many years, whether, you know, from the early days of Fred Luddy, Bruce Lukman, the short time John Donahoe. And now Bill McDermott is the CEO, but consistent performance since the AIPO. But what are we actually showing here? Saga? Yeah, You bring up that slot. Thank you. >>So our key take away on kind of the i t m m i t s m i t workflow spaces. Look, it's best in breed, which is service now, or some of the lower cost providers. Right There's really no room for middle of the pack, so >>this is an >>interesting charts. And so what you're looking at here, there's a few directives, so kind of walk you through it and then I'll walk through. The actual results is we're looking within service now accounts. And so we're seeing how these companies are doing within or among customers that are using service. Now, today, where you're looking at on the ex, access is essentially shared market share our shared customers, and then on the Y axis you're seeing essentially the spend velocity off those vendors within service. Now's outs, right? So if the vendor was doing well, you would see them moving up into the right, right? That means they're having more customer overlap with service now, and they're also accelerating Spend, but you can see if you will get zendesk. If you look at BMC, it's a managed right. You can see there either losing market share and spend within service now accounts or they're losing spend right and zendesk is another example Here, Um, and what's actually interesting is, and we've had a lot of anecdotal evidence from CIOs is that look they start with service. Now it's best in breed, but a few of them have said, Look, it's got expensive, Um, and so they would move over Rezendes. And then they would look at it versus a conference that last year, and we had a few CEO say, Look at last quarter of the price of zendesk. Andi moved away from Zendesk and subsequently well, with last year. And so it's just it's interesting that, you know, during these times where you know CIOs are reducing their budgets on that look, it's either best of breed or low cost. There's really no room in the middle, and so it's actually kind of interesting. In this space, it's It's an interesting dynamic and being usually it's best of breed or low cost. Rarely do you kind of see both win, and I think that's what kind of makes the space interesting. >>I've been following service now for a number of years. I just make a few comments there. First of all, you know, workday was the gold standard in enterprise software for the longest time and, you know, company and and and I I always considered service now to be kind of part of that you know Silicon Valley Mafia with Frank's Loop. But what's happened is, you know, Sluman did a masterful job of identifying the total available market and executing with demand, and now you know, his successors have picking it beyond there. You know, service now has a market cap that's not quite double, but I mean, I think workday last I checked was in the mid thirties. Service now is market valuation is up in the 60 billion range. I mean, they announced, um uh, just recently, very interestingly, they be expectations. They lowered their guidance relative to consensus guide, but I think the street hose, first of all, they beat their numbers and they've got that SAS model, that very predictable model. And I think people are saying, Look there, just leaving meat on the bone so they can continue to be because that's been their sort of m o these last several years. So you got to like their positioning and you get to talk to customers. They are pricey. You do hear complaints about that, and they've got a strong lock spec. But generally I got my experiences. If people can identify business value and clear productivity, they work through the lock in, you know, they'll just fight it out in the negotiations with procurement. >>That's right, and two things on that. So with service now and and even Salesforce, right, they are a platform like approach type of vendors right where you build on them. And that's what makes them such break companies, right? Even if they have, you know, little nicks and knacks here and there. When they report people see past that right, they understand their best of breed. You build your companies on the service now's and the sales forces of the world. And to the second point, you're exactly right. Businesses want to maintain consistent productivity on, and I think that, you know, is it kind of resonates with the theme, right, doubling down on Cloud and sas. Um, as as you have all this remote work, as you have kind of, you know, questionable are curating marquee a macro environment organizations want to make sure that their employees continue to execute that they're generating consistent productivity. And using these kind of best of breed tools is the way to go. >>It's interesting you mentioned, uh, salesforce and service now for years I've been saying they're on a collision course we haven't seen yet because they're both platforms. I still, uh I'm waiting for that to happen. Let's bring up the next card and let's get into networking way talk. Um Ah. Couple of weeks ago, about the whole shift from traditional Mpls moving to SD win. And this sort of really lays it out. Take us through the data here, please. >>Yeah, no problem. So we're just looking at a handful of vendors here. Really? We're looking at networking vendors that have the highest adoption rates within cloud accounts. And so what we did was we looked inside of aws azure GCC, right. We essentially isolated just those customers. And then we said which networking vendors are seeing the best spend data and the most adoptions within those cloud accounts. And so you get you can kind of see some, uh, some themes here, right? SD lan. Right. You can see Iraqi their VM. Where nsx. You see some next gen load balance saying are they're on the cdn side right then. And so you're seeing a theme here of more next gen players on You're not really seeing a lot of the mpls vendors here, right? They're the ones that have more flattening, decreasing and replacing data. And so the reason just kind of going on this slide is you know, when you kind of think about the networking space as a whole, this is where adoptions are going. This is this is where spends billing and expanded, arise it. And what we just talked about >>your networking such a fascinating space to me because you got you got the leader and Cisco That has helped 2/3 of the market for the longest time, despite competitors like Arista, Juniper and others trying to get in the Air Force and NSX. And the big Neisseria acquisition, you know, kind of potentially disrupted that. But you can see, you know, Cisco, they don't go down without a fight. And ah, there, let's take a look at the next card on Cdn. You know, this is interesting. Uh, you know, you think with all this activity around work from home and remote offices, there's a hot area, But what are we looking at here? >>Yeah, no problem. And that's right, right? You would think. And so we're looking at Cdn players here you would think with the uptake in traffic, you would see fantastic. That scores right for all the cdn vendor. So what you're looking at here and again there's a few lenses on here, so I kind of walk. You kind of walk the audience through here is first we isolated only those individuals that were accelerating their budgets due to work from home. Right. So we've had this conversation now for a few weeks where support employees working from home. You did see a decent number of organizations. I think it was 20 or 30% of organizations at the per server that indicated they're actually accelerate instead. So we're looking at those individuals. And then what we're doing is we're seeing how are how's Cloudflare and aka my performing within those accounts, right? And so we're looking at those specific customers and you could just see within Cloudflare and we practice and security and networking which by more the Cdn piece, How consistent elevated the date is right? This is spend in density, right? Not overall market share is obviously aka my you know, their brand father CD ends. They have the most market share and if you look at optimized to the right. Now you can see the spend velocity is not very good. It's actually negative across boats sector. So you know it's not. We're not saying that. Look, there's a changing of the guard that's occurring right now. We're still relatively small compared talk my But there's just such a start on trust here and again, it kind of goes to what we're talking about. Our macro themes, right? CIOs are continuing to invest in next gen Technologies, and better technologies on that is having an impact on some of these legacy. And, you know, grandfather providers. >>Well, I mean, I think as we enter this again, I've said a number of times. It's ironic overhead coming into a new decade. And you're seeing this throughout the I T. Stack, where you've got a lot of disruptors and you've got companies with large install bases, lot of on Prem or a lot of historical legacy. Yeah, and it's very hard for them to show growth. They often times squeeze R and D because they gotta serve Wall Street. And this is the kind of dilemma they're in, and the only good news with a comma here is there is less bad security go from negative 20% to a negative 8% net score. Um, but wow, what a what a contrast, but to your point, much, much smaller base, but still very relevant. We've seen this movie before. Let's let's wrap with another area that we've talked about. What is virtualization? Desktop virtualization? Beady eye again. A beneficiary of the work from home pivot. Um, And we're focused here, right on Fortune 500 net scores. But give us the low down on this start. >>Yeah, So this is something that look, I think it's it's pretty obvious to into the market you're seeing an uptake and spend across the board versus three months ago in a year ago and spending, etc. Among your desktop virtualization players, there's FBI, right? So that's gonna be your VPN right now. Obviously, they reported pretty good numbers there, so this is an obvious slide, but we wanted to kind of throw it in there. Just say, look, you know, these organizations are seeing nice upticks incent, you know, within the virtualization sectors, specifically within Fortune 500 again, that's kind of, you know, work from home spend that we're seeing here, >>right? So, I mean, this is really a 100% net score in the Fortune 500 for workspaces is pretty amazing. And I think the shared in on this that the end was actually quite large. It wasn't like single digits, Many dozens. I remember when Workspaces first came out, it maybe wasn't ready for prime time. But clearly there's momentum there, and we're seeing this across the board saga. Thanks so much for coming in this week. Really appreciate it. We're gonna be in touch with with you with the TR. We're gonna continue to report on this, but start Dr stay safe. And thanks again. >>Thanks again. Appreciate it. Looking for to do another one. >>All right. Thank you. Everybody for watching this Cube insights Powered by ET are this is Dave Volante for Dr Sadaaki. Remember, all these episodes are available as podcasts. I published weekly on wiki bond dot com Uh, and also on silicon angle dot com Don't forget tr dot Plus, Check out all the action there. Thanks for watching everybody. We'll see you next time. Yeah, yeah, yeah, yeah, yeah

>> Narrator: From theCUBE Studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is theCUBE conversation. >> Hi everybody, this is Dave Vellante and welcome to this week's CUBE insights powered by ETR. In this breaking analysis, we're going to bring in Sagar Kadakia who's the Director of Research at ETR. He's been away for the last couple of weeks, he's really digging into the latest data set, ETR of course it was in it's quiet period. And today, what we want to do is give you three of the macro takeaways from that last two-week analysis and drill into to some of the sectors. So Sagar, that's for coming on, great to see you again. Let's get right into it. >> Let's do it, thanks for having me. >> You've been crazy busy, we started the year at a plus 4%, consensus IT spend. We reported for several weeks and ended up at minus 4%. We're now at minus 5%, after you've gone through and done some additional analysis. So bring us up to date the IT spend projection. >> Yeah no problem, and that's our first macro takeaway, is we're seeing declines in IT budget, a decline of 5%. And remember, coming into the year as you mentioned, consensus assessments were right around that 4% number. And so we've seen this kind of 900 basis point shift downward so that's kind of where we are today, if we kind of look at that chart that we've been tracking for the last few weeks. And then for those that have seen this chart before, you've kind of seen where we've been kind of going the last two, three weeks. And for those that haven't seen the chart, I'll kind of go through it now. So, as many of you know, kind of launched its COVID-19 drill down survey to measure the impact that the virus was going to have on total spend this year and so we kind of launched that drill down on March 11th and so if you kind of look at that blue line there, what you're looking at, is we asked individuals, estimate what percentage impact you think the virus is going to have on your budget versus your original expectations. And since we launched this on March 11th, on that blue line that you're looking at, we got a lot of positivity in the beginning. And so if you look at the blue line all the way through, you follow that, you get about zero percent growth. Now the issue is, as I just mentioned is, we launched on the 11th, and there wasn't a tremendous amount of information available as to how severe the virus was, and so we kind of did this in Venn analysis and we talked about this last time, on the last breaking analysis, where it's probably more appropriate to look at a start date closer to 3/17 or 3/23 when the market really understood the severity of COVID-19. NYC became the epicenter. And if we look at just those customers who indicated a spend impact after that date, you can see it's coming out to about four or 5% decline. And so that's kind of one of our big macro takeaways, and the other thing on this chart, kind of focus on is, and even though we're not looking at, some of the vendors here, is when you think about declines, it's not across the full IT stack, and I think that's really important for the audience to understand. We're seeing focused declines among on-prem legacy pure plays. You're still seeing CIO spend on cloud and SaaS. In fact, they're doubling down there. And so when you kind of think about how things are going to shape up the next three, six, nine months, there's going to be a lot of bifurcation. And we think cloud and SaaS are going to be well positioned with a lot of legacy and on-prem. That's where you're going to see a majority of those declines that you're seeing here kind of play out. >> I've made the case, statement many times that cloud is good, or downturns have been to cloud. You saw this in 2008, 2009 with the shift from CapEx to OpEx. We came out of 2009 into the decade of cloud. And very clearly we're seeing some similar things here as people shift to that work-from-home. We had one CIO on the recent Venns that I want to just delete my data centers. Unfortunately, he's not going to be able to do that overnight, but I think, as Eric Bradley pointed out last week, a lot of customers who weren't even thinking about cloud, or really were sort of reticent to go all in, really have flipped and changed their tune. Let's talk about some of the industries that are impacted by this COVID-19 and the stay-at-home. This slide really kind of underscores that. Why don't you take us through it? >> Yeah, no problem. So on the last slide, you were looking at kind of our COVID-19 drill-down study. On this slide, what we're now going to focus on is a study that we did in tandem, which is called our Technology Spending Intentions Survey. And specifically we conducted this in April. What we did is we asked CIOs to update their 2020 spending intentions versus how they spent in '19. So this survey was originally posed in January and then we're essentially asking for a three-month update now. So we're trying to get an understanding of how much has changed in the last three months because of COVID-19. And when we asked these CIOs, we give them essentially a list of 400 vendors. And they're able to then indicate which ones they're flattening on, decreasing on, maybe accelerating on. And so what you're looking at here is we've aggregated that data by industry. And if you look at the X-axis here, you're going to look at spend intensity versus three months ago. And the Y-axis will be spend intensity versus a year ago. And so what you're seeing here is over the last three months, look at how much verticals, like retail/consumer, airlines, delivery services, financials/insurance, IT/TelCo, services/consulting. Those have really seen some of the largest pullbacks in spend versus three months ago. And those are also some of the industries that have indicated the largest pullback in demand from consumers and businesses. And so this is where we think a lot of the declines that we showed you earlier really kind of focus on some of these verticals. And that's how, when you kind of think about which organization are going to be hurt, which ones might see the most impact, three, six months from now, this is a really good chart to view. >> Yeah, a couple of points I would make on this data. Retail and consumer, again, even that's bifurcated. Obviously the physical stores getting crushed. You see Amazon now trading at all-time highs. Target announced today, I think they said a 200% increase in online shopping, which, of course, is fulfilled. 85% of Target's demand is fulfilled by their stores. So that's kind of mixed. You're going to see an accelerated move toward digital transformation there. Airlines, it's really unclear what's going to happen there. IT/TelCo, on one of the last Venns we talked about MPLS, people trying to get off of MPLS, really moving toward a SD-WAN. Healthcare, pharma, healthcare doesn't have time to do anything right now. No time to take a breather. Financials is interesting. I mean, they're down right now, but they still have a lot of cash. Liquidity is good. And then energy, I mean oil, I've just never seen anything like it. We're concerned obviously about credit risk there and oil companies being able to pay off their debts. So it's really not a pretty picture, is it? >> Yeah, and if focus on energy, even though you're not seeing a huge pullback versus three months ago in energy, it's really important to understand when we did this survey in January, energy was all the way on the left side of that chart. And so it already looked really bad coming into the year. So it got worse. But because of the severity versus last year, like they're just not seeing that much more of a negative impact now. This was before, this survey closed before everything happened the last few days with oil prices. So it is very possible that that data is going to get worse. And we'll know if it gets really-- >> We're not laughing a lot these days, but if you haven't filled up your car in a while, I mean it's, Anyway, let's go into the security piece. We talked about, you guys were really the first to report this work-from-home pivot. Others have sort of more recently coming to that conclusion. And it wasn't just Zoom and WebEx and video collaboration, Teams, et cetera. It really was all kinds of infrastructure, including security. So we can bring up the next chart, guys. Let's sort of get into this. We're going to talk about the sector and some of the vendors in here. Let's go. >> Yeah, no problem, so if we kind of step away from the macro and really start getting into the sectors and vendors in here. If we start with security, what we're really saying is that, look, a remote workforce is really kind of revealing best-in-breed. And we think it's going to lead to the permanent changes. So what you're looking at here is these are the net scores for each individual vendor currently versus three months ago as well as a year ago levels. The yellow bars will be what's currently. And the way to think about net score is just kind of spend intensity. And so the higher your net score, the more spend intensity, the more spend velocity you're seeing from enterprise customers. And what we're really seeing here, if you kind of look at the vendors on the left, you're seeing a lot of acceleration among secure web gateway end point, mobile security, cloud SaaS application security, identity, and these make sense. As we mentioned earlier, as you really accelerate your cloud and SaaS spend, you're going to want to use vendors that best protect those areas. And so if you look to the left here, Okta and Zscaler, Cloudflare, CrowdStrike, some of these really look best positioned moving forward. Palo Alto looks good longer term. Splunk at this point also looked good longer term. And then the other thing to kind of hit on here is the other side in terms of, we talked about the bifurcation that we expect. We're seeing significant declines in net scores among a lot of these legacy vendors. Check points come down quite a bit. Juniper, Trend Micro, Broadcom, Barracuda Networks, SonicWALL, and so you can see the disparity here. It's pretty clear on the image. But we think there's some pretty clear winners and losers here. And I think we may see permanent changes moving forward. >> Yeah, so Twistlock, of course, is now owned by Palo Alto. CrowdStrike, they're a hot company in the sector. Okta, I have the Chief Product Officer coming on shortly here for part of my CXO series. We've talked about Palo Alto and how they sort of fell behind a little bit in the cloud. But you talk to customers, they really see Palo Alto as in the mix. Zscaler came up in the Venn as, to your point, securing gateways and doing a really good job in that space. And so I think the fragmentation, the fragmentation probably continues, but there's also bifurcation, as you pointed out. Let's talk about cloud. As you've said and I said, downturns have been good to cloud. People are obviously looking more toward cloud, whether it's SaaS or cloud type of consumption. Let's bring up the next slide, which looks at the big three, Azure, AWS, and GCP. First of all, all three have very strong net scores. Up in the 60% plus range. But you have Azure pulling away. I'd love to hear your thoughts on that. >> Yeah, that's right, and we've kind of been using this analogy of kind of a horse race. Just kind of as context, coming into January you see really GCP accelerating. And so one of the things we said in January was it's becoming more of a three-horse race. Even though GCP doesn't have the same type of market share as the other two, you are seeing the spend intensity increase. And now what you're seeing is Azure pulling away a little bit because of, we think, COVID-19. When you look at Azure's data set, it really looks robust and healthy across all verticals, across most regions. And that is what you're seeing here where it's continuing to kind of accelerate. It looks good. AWS, GCP, it also looks good here, but you're not seeing the same uniform strength. There's a couple verticals for AWS where we're seeing a little bit of a pullback in spend, like retail and industrials. For GCP we're seeing a pullback in mid-size and small enterprises. So that's causing a couple of cracks here and there. Even though they look overall healthy, but we did want to kind of indicate here on cloud where, look one vendor looks like they're pulling away when it comes to spend velocity. >> It's going to be interesting to see. I mean, we reported on the sort of deltas between Azure and AWS and the cloud, the quality of the cloud. I think we're going to carefully watch the quarterly reports. You always have to kind of squint through the Azure numbers to see what's in there. But there's no question that Microsoft, across the board, is really very, very strong. All right, let's talk about collaboration, productivity, video conferencing. I mean, we've certainly seen upticks. But as shown on this slide, you guys, if you could bring the next slide up. You know, it's not all rosy. Talk about this a little bit. >> Yeah, I think, look, there's been a lot of coverage around which vendors look best. And so I kind of want to take the opposite view on this chart for the audience, and say hey look, which vendors are not benefiting? And this is kind of like a hodgepodge sector of productivity and collaboration, video conferencing. What we're saying is it's now of never, so to speak. And you're looking at replacement rates. So if you look at, if you see something on this chart that says 20% replacement, that means one out of five customers indicated for that vendor in our survey, indicated a replacement for them, which is not good. And so you're seeing vendors here like Dropbox, Box and Slack having elevated or accelerating replacement levels. And these vendors, pitch themselves as collaboration tools. And if they're not doing well now and they're seeing elevated replacements, especially as everyone is working from home, that doesn't bode well for the future. >> I think people who know me know I'm not a huge fan of Box and Slack. They drive me crazy. And so this is interesting to see. I mean, we're a Zoom shop, so obviously you Zoom, you like Zoom. I had my first experience very recently with Microsoft teams. I was quite impressed. I thought it was easy to use. Skype, hell was just terrible. And so, much, much improved. Very interesting cut on that one. So again, it's a bifurcated story. Let's drill into teams a little bit. Guys, have you bring up the next slide, Movements reporting. And you guys are really again, first on this, how strong Microsoft is across the board. But really going after it and collaboration. >> On that previous slide you saw that, Dropbox and Slack, we're all seeing replacements. So again, a lot of customers like where was all that spend going? Well, it's going to Microsoft Teams. It's going to One Drive. This is a Slack drilled out, or sorry, a Slack and teams drill down. That we did, earlier this year. And what we're trying to do is measure, how these products were going to do in the next 12 months. And so what you're looking at here is Fortune 500 organizations. What we did is we asked them how much of your organization, is using Microsoft Teams today. What percentage of your organization is going to be using Microsoft Teams 12 months from now? That's going to be in the yellow bars. And you can see the big upticks in 12 months. And we took some mid point averages. Look at how much Microsoft Teams is going to grow, within Fortune 500 accounts in the next 12 months. And if we look at Slack on the next slide, you're really now seeing the exact opposite. Same question, how many folks in your Fortune 500 organization are using Slack today? And what does that look like in 12 months? And the mid point average is actually coming down. And so, it's like Slack is a seat-based model. And so when you have less users that's going to generate less revenue. And so again, this is amongst the existing Fortune 500 customers. This doesn't include new Fortune 500, but this spells problems for Slack, when you kind of think about the next six to 12 months ahead. >> Well it's one thing if you're competing with Microsoft and your AWS. I've not really not worried about AWS, Microsoft, take a note AWS. If you're one of these collaboration platforms, Microsoft, we've seen over the years, first of all, they got great developer affinity. They know how to bundle different products together. Now they got the cloud working so they got their flywheel effect in the cloud. There's just not a ton of room. The thing is they have such a huge software estate, such a giant customer install base and it's just makes it easy for them. The products are good enough or in some cases really good. So that's going to be something to watch, because there's a lot of high valuations going on right now in their collaboration space. >> That's right. And I think, it really hits on the previous slide, or the previous slides on collaboration that we saw, was when you think again about the declines, a lot of that is impacting some of these pure plays. So in security you saw a lot of the legacy names getting in. On the collaboration side, you saw a lot of these pure plays your getting in. And so this is kind of, again when you think about where budgets are going and which vendors are being impacted, it's really concentrated into some specific areas. >> So now, one of the hardest hit areas, and you guys reported on this earlier, was the IT consulting and outsourcing IT. You guys have you bring up that the chart, it's pretty ugly. Maybe you can explain what you're seeing here and why you think that is. >> Yeah, no problem. So again, this is from our technology spending intention survey. We're measuring spend velocity here. Spend intensity, and you can see across, these are just a handful of IT consulting firms. If you look at the blue bars to the yellow bar. So the blue bar is, 2020 spending intent that we captured in January and now we're asking for updated 2020 spending intentions. You can see the deceleration in just the last three months. If you look at our COVID-19 drill down side that we conducted, one of the questions in there we asked was, are you freezing new IT projects or deployments? Almost, 1/4 percentage of customers said they are. And so, that is going to spell problems for this space. When you think about, look, if you're going into uncertain times an easy way to reduce your budget is by, spending less with consulting vendors since you know, you can just less than the number of deliverables, these individuals get paid based on. How many deliverables they can complete. So this is another area that when you kind of think about where the declines are coming from, this is certainly an area to look at. >> A lot of the customers we've talked to have said, we've basically shut down spending on some of the large projects. We're still focusing on some digital transformation, but that's maybe a longer term priority. And then the IBM piece of this chart, guys, if you could bring it back is interesting to me because look, they paid 34 billion for Red Hat. I've always said a key to the Red Hat acquisition was being able to point it at the large consulting base and modernize those applications. IBM actually had a pretty good quarter in services. Although they did mention that respect especially in software that in the month of the quarter software spending shutdown. I don't think we got visibility that this piece of the business, but this could be, somewhat of a concern going forward. I think that's going to be one of the areas that gets slow rolled coming back, Sagar. I don't think it's going to come back tomorrow. So please your thoughts. >> Just to kind of quickly wrap up IBM. So yeah, one of the things we kind of saw in the data was not only eroding spending intention data on a lot of their SaaS portfolio but also eroding market share. And we saw big down takes on Red Hat products and IT services. Even in cloud. And I know they indicated pretty healthy numbers on Red Hat and cloud. But again, we're asking about 2020, forward-looking spending intentions. And of course they pulled their guidance. So we don't know how that's going to look. But in our data, things are really coming down versus three months ago. And so I think just overall, that is a data set that we're quite negative one. >> I think IBM has that sense. Like I said, March was not good for software. That's when the big deals come through. You're right. Red Hat, I think route 20% in the quarter and is now accredited from a cashflow basis, which is one of their targets. I think they beat their target there. Still good cashflow. But I think there's just so much uncertainty, And IBM have to be prepared for that and I'm sure will. That we're at minus 5% now. We're seeing cloud SaaS, we're seeing a bifurcation. We talked about some of the areas that are in trouble. That's kind of part one. Next week we'll be talking about part two. What can we expect? >> Yeah, we'll start going through networking, CDN, ITSM, IT workflows, database, data warehousing, and we'll kind of go through that as well. But again, you're going to see a lot of what we talked about today. Just the bifurcation span where, vendors that are more next gen, more work-from-home friendly like all of the SaaS guys, they're doing really well. And on the on-prem and the legacy, you're just seeing elevated replacements, elevated decreased rates. This is the most bifurcated, I've seen this data set and I've been doing this at ETR for, almost seven, probably going on eight years now. So I think that kind of says something about the environment that we're in and what to kind of expect in the next three to six months. >> And it's kind of like the stock market is right now. You're actually seeing, some great momentum in certain stocks and terrible in others. Those were great balance sheets and maybe COVID is a tailwind for them. Others, tons of uncertainty, a lot of concern. I know in poking around the data set, like you said, some of the analytics, the data warehouses, you see Snowflake, UiPath, Automation Anywhere. A lot of the automation, RPA, momentum is there. Security, we talked about that. There's some real bright spots there but a lot of the on-prem stuff. We'll see product cycles affect that, in the second half of of 2020. We'll continue to report on this Sagar. Thank you so much for we're coming on and we'll definitely see you next week. >> Thanks for having me again, Dave. Looking forward. >> All right, and thank you for watching, this CUBE insights powered by ETR. We will see you next time. Don't forget, all these episodes are available as podcasts, wherever you listen. Go to etr.plus, checkout what's happening there. Siliconangle.com has all the news I publish in there weekly. I also publish on wikibond.com. Thanks for watching this breaking analysis. This is Dave Vellante and Sagar Kadakia, we'll see you next time. (upbeat music)

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation CIOs and CISOs of industries that have been hard hit see significant near term and many permanent shifts to their IT and security strategies this was the consensus of four technology executives at leading companies that are feeling the brunt of the corona virus pandemic welcome to this week's cube insights powered by ETR my name is Dave Volante and in this breaking analysis we want to accomplish three things first we want to tap into a new piece of research from ETR it involves an intimate focus group like set up via an open discussion with leading technology executives we interviewed Eric Bradley the managing director of et ours then program and we'll bring him into this discussion the next thing we want to do is we want to drill in to the various sector commentaries from the four leaders third we're gonna comment an hour take try to add some color and then share with you some of the specific vendor commentary that was called out by the executives let's start by looking at what et our event is et our van is a roundtable discussion it applies a tried-and-true methodology similar to a focus group or in-depth interviews what we sometimes in the research business call ID is ETR invites execs in from its community to participate in a private but open conversation et our clients get to listen in the names of the execs and their companies are transparent but the cube is only allowed to refer to them generically as shown on this slide now we can validate these participants they are legit CIOs and CISOs some and very well-known firms now what I want to do is summarize the CIO and seaso sentiment from this then discussion the overall budget impact for these four organizations is very very severe essentially large project projects are being put on hold although digital transformation initiatives remain a priority there were really four significant areas of emphasis that were cited by these execs cloud-first on-prem is losing out to cloud SAS and of course remote access solutions in fact the best comment on the panel was as a service is saving our SAS traditional networking is shifting to SD win especially rigid MPLS networks securing endpoints and zero trust solutions are the winners and there are a number of vendors rising to the occasion that will talk about it let's see how Eric Bradley of ETR summarizes the venn to summarize what we're seeing here was the real winners and losers are clear not everyone was prepared to have it work from home strategy not everyone was prepared to send their workers out there VPN wasn't didn't have enough bandwidth so there was a real quick uptick in spending but longer-term we're starting to see that these changes will be become more permanent so the real winners and losers right now we're going to see on the losers side traditional networking the MPLS networking isn't a lot of trouble according to all the data and the commentary that we see it's expensive it's difficult to ramp up bandwidth as quickly as you need and it doesn't support remote ok what I want to do now is I want to take a look at some of the verbatim comments and I'll just I'll read them from this slide all spending is shut down 70% of big projects are cut all next-gen projects have been shelled the relationship with our SAS vendor has been a miracle we're accelerating from MPLS to sd when on top of secure gateway technologies these will win this was interesting our business continuity plans were way too DR focused essentially we weren't prepared now let's unpack the cloud first commentary and give you some additional color I feel like all we do around here sometimes is talk about the cloud but it's clear from the data in the ETR data set surveys and the venn that in other data from the cube that that the cloud is only going to be accelerated we said this in 2008 in the 2009 downturns have been good to cloud one of the execs literally said I would like to see my data centers completely deleted Wow let's listen to Erik Bradley's take on this comment I was also shocked about that comment that gentleman also stated that his executives outside of the eyeteeth area the CEO the CFO had never ever ever wanted to discuss cloud they did not want to discuss work from home they did not want to discuss remote access he said that conversation has changed immediately so we've been talking a lot about those aspects of people and process and technology that might be permanent post kovat and clearly you see c-level execs as having a bit of an awakening for things like cloud and work from home not that they didn't see them before but these things are gonna accelerate in our view I want to spend a minute talking about networks SAS and bring cloud again into the discussion I gotta say the panel members really trashed MPLS networks in a big way let me explain MPLS stands for multi-protocol label switching you find this type of infrastructure in big telecom networks and it's there to route traffic and pls is used to create dedicated and and essentially reliable connections it enables things like VPNs quality a service management traffic engineering or shaping but well MPLS is definitely cheaper than t1 it's more expensive than Ethernet now I came into prominence well before the cloud and these execs see it is as outdated and inflexible and this is where SD wind comes into play software-defined wide area networks they're gaining popularity especially with the Sassa fication of applications and of course the general trend toward cloud here's Eric Bradley again explaining what the panel members said from his perspectives winners there or in the SD web space it's gonna be impossible to ignore that going forward and some of our CIO and even CISO panelists said that change will be also we're seeing at the same time what they were calling a on on SAS and cloud now we know these trends obviously were already happening but there be they're being exacerbated they're happening even more quickly and more strong and I don't see that changing anytime soon that of course is at the expense of network sorry data centers whether it be your own or hosted which has huge ramifications on from on from Hardware even the firewall providers so and it really seems as if as networking refresh starts to come up and it's coming up with a lot of large in writes when your network refresh comes up people are going to do an RFP for SD web they are sick and tired of paying MPLS network vendors and they really want to look at something else that was even prior to this situation now what we're hearing is this is a permanent change I particularly had one person say I wanted to find this quote real quickly by then but basically they were basically saying that from a permanency perspective the freedom from MPLS will reduce our network spend by over half while more than doubling or tripling or bandwidth now the challenge of course is customers have multiple MPLS contracts with several different vendors and often they just rubber-stamp the renewal but what customers are gonna start doing is layering in SD win and letting those agreements expire ok I want to talk about secure endpoints in this notion of zero trust solutions as I've said in the cube many many times the idea of digging a moat around the castle doesn't protect your queen anymore because the Queen ie the data has left the castle so companies that can secure gateways and secure endpoints they are going to have more momentum during and post kovat now in the panel Z scalar came up a lot in this context as well as fortunate who as I've reported has done a good job in getting its cloud products to market and of course the et our data shows that fortunate and Z scalar both have strong net scores or spending momentum and fort net especially has really strong pervasiveness in the et our dataset as I've reported previously I've also analyzed that there's been evaluation divergence between Palo Alto Networks and fortunate and house II scalar as well is a disruptor in this space I want you to listen to what Eric Bradley said specifically about Z scalar in Palo Alto Networks roll the clip yes it is and I'm glad you brought up Z scalar to very recently by client request we did a very in-depth research on Z scale and versus Palo Alto charisma access and they were very interested this is before all this happened you know does Palo Alto have a chance of catching up taking share from Z scalar and I've had the pleasure myself personally hosting J the CEO of Z scalar at an event here at City and I have nothing but incredible respect for the company but what we found out through this research is Z scalar at the moment their technology is still ahead according to their and there is no doubt however there doesn't seem to be any real secret sauce that will stop palo alto from inching up so if I had to choose that in a year from now Palo Alto might have had a better chance so in this panel as you brought up Z scalar was mentioned numerous times as just the wave of the future along with Cosby brokers right whether you're talking about a net scope or a force point they're all those people that also play in The Cosby space to secure your access zero Trust is no longer a marketing hype term it is real and it is becoming more real by the week now I personally agree with Eric that palo alto is is definitely going to be in the mix customers that we've talked to they want to work with palo alto networks but there's a sea change going on and it's being driven by sass and cloud and now accelerating because a co vid of course that the trend of remote workers is we think here to stay now i want to end by talking about some specific vendor mentions in addition to the ones we've talked about already and this chart shows some of the vendors and their logos that were called out as either being really really helpful during the this pandemic or super important to the CIOs and CISOs these executives really stressed how thankful they are to these companies and that the fact that these companies have worked very closely with them they've been flexible on pricing and payments and they also specifically mentioned how off-put they were by you know this notion of ambulance-chasing for example trials that required them to make some kind of commitment or swipe a credit card they just don't have time for that right now and then of the patience for it now let me call out a few of the companies that were cited in a positive light look at microsoft is all for the ETR data set in so many sectors Microsoft teams security solutions cloud really came up a lot on on this ven IBM was mentioned as being a great partner as what's oracle many many times we talked about fortunate and Z scalar already Cisco was called out as a strategic vendor was very helpful both the networking and with Cisco teams for collaboration CrowdStrike came up a number of times from CISOs as did Trend Micro and carbon black got a mention that's the VMware acquisition insecurity of course MobileIron that makes sense as well because they're securing and managing remote worker devices now finally interesting Lee Salesforce was brought up many times as a critical vendor one exec said that before coronavirus multiple workers could share a Salesforce license by you know sharing passwords but with the spike and work from home they had to purchase more licenses now one last thing that I want to bring up is start ups I got this question the other day from a client who said how a start-ups fair you might think that in this climate especially among for hard-hit customers that there might be risk-averse as it pertains to using startups once cio however said the following paraphrasing you always hear about the guy that says we'll pick three companies in the upper right hand corner the Gartner Magic Quadrant will test them out and this C so said that one of the things that he's always done is picked two from the upper right and one from the lower left one of the emerging techs and he gives them a shot let's listen to how Eric Bradley describes this dynamic roll the clip it's a great comment and honestly if you're in charge of procurement you'd be stupid not to do that not only just to see what the technology is but now I can play you off the big guys because I have negotiating leverage and I could say oh well I could always just take their contract so it's silly not to do it from a business perspective so it's really interesting and somewhat non-intuitive these comments on startups which of course means despite all the consolidation and acquisitions that you see in the industry you know there's still gonna be a lot of fragmentations a fragmentation especially as I've said many many times in the security space people still want best to breed and innovation and if it can drive business value they're gonna they're gonna go for it ok so look I realize that these are narrow comments from for CIOs and CISOs but they give us some added texture and flavor and color to the core ETR data set and we're going to continue to report on these trends and share more details as they become available both from the ETR data set and from other vents and remember we're gonna be digging into the latest ETR survey over the over the coming weeks as ETR exits its self-imposed quiet period so you can always check out ETR dot plus I publish weekly on wiki bang calm and on Silicon angle calm and of course our YouTube library has all these videos that's youtube.com slash silicon angle by the way these segments are also available as podcasts you can DM me or tweet me at devil ante and please by all means comment on my LinkedIn posts or email me at David Galante at Silicon angle com always appreciate the feedback thanks for watching everybody this is breaking analysis brought to you by the cube powered by ETR this is Dave Volante and we'll see you next time thanks for watching [Music]

>> From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. >> Hello, everybody, this is Dave Vellante, and welcome to this breaking analysis. I'm here with Erik Bradley, who's the managing director of ETR and runs their VENN program. Erik, good to see you. >> Very nice to see you too, Dave. Hope you're doing well. >> Yeah, I'm doing okay, hanging in there. You know, you guys in New York are fighting the battle, looks like we're making some progress here, so all the best to you and your family and the wider community. I'm really excited to have you on today because I had the pleasure of sitting in on a CIO/CISO panel last week and we're going to explain sort of what that's all about but one of the things that ETR does that I really like is they go deeper with anecdotal information, and it's almost like in depth interviews in these round tables. So they compliment their quarterly surveys and their other drilldown surveys with other anecdotal information from people in their communities, so it's a tried and true survey practice that adds some color to the data set. So guys, if you'd bring up the agenda, I want to share with the audience what we're going to talk about today. So, we'll talk a little bit about, you know, we just did intros. I wanted to ask Erik what ETR VENN is and then we will go through some of the guests, but if we go back to Erik, explain a little bit about VENN and the whole process, and how you guys do that? >> Yes, sure we should hire you for marketing, you just did a great job actually describing that, but about three years ago, what we decided was, ETR does an amazing job collecting the data. It can tell you what's happening, who it's happening to, and when it's happening, but it can't always tell you why it's happening. So leveraging a lot of my background in 20 plus years in journalism and the institution of Wall Street research, we decided to take the ETR community, the people that actually take the surveys and start doing interviews with them, and start doing events with them. And in enable to doing that, we're basically just trying to complement the survey findings and the data. So what we always say is that ETR will give you the quantitative answer and VENN will give you the qualitative answer. >> Now guys, let's bring up the agenda slide again, let's take a look at the folks that participated in the round table, now, for ETR's clients, they actually know the names and the titles and well the company that these guys work for. We've anonymized it for the public, but you had a CIO of a global auto supplier, a CISO of a diversified holdings firm who actually had some hospitality exposure, but also some government contract manufacturing exposure, a chief architect of a software ISV, and a VP and CISO of a global hospitality resort chain. So you had three out of the four, Erik were really in industries that are getting hit hard, obviously you know the software company, may be a little bit better but, maybe you could add some color to that? >> Well actually the software company unfortunately was getting hit hard as well because they're a software ISV that actually plays into the manufacturing space as well so this particular panel of CIOs and CISOs were actually in a very hard hit industries and are going to make sure we do two more follow ups with different industry verticals to make sure we're getting a little bit of a wider berth and collect all of that information in a better way. But coming back to this particular call the whole reason we did this and as you know you spoke to my colleague and friend Sagar Kadakia who is the director of research for ETR. And we were nimble enough to actually change our survey while it was in the field to start collecting data on what the real time impact was on the COVID-19 pandemic. We were able to take that information, extrapolate it and then say, okay, let's start reaching out to these people and dig deeper, find out why it's happening and even more so is it permanent? And which vendors are going to win and which vendors might lose from it? So that was the whole reason we set up a series of calls, we've only conducted one so far, we have another one this coming Tuesday as well with four entirely new panelists that are going to be from different industry verticals 'cause as you astutely pointed out, these verticals were very hard hit and not all of them are as hard as others, so it's important to get a wider cross-section. >> So guys, let's take a look at some of the budget impacts, the anecdotal sort of evidence that we gathered here, so let me just scan through it and then Erik, I'll ask you to comment. So, I mean like Erik said, some hard hit industries. All major projects, anything sort of next-gen have been essentially shelved, that was the ISV and then another one we cut at least 70% of the big projects moving forward, he mentioned ServiceNow actually called him out, but ServiceNow is a SaaS company, probably you know weather the storm here, but he did say, we've put that on hold. The best comment you know As-a-Service has Saved our Saas, (laughs) that one's great. And then we're going to get into some of the networking commentary, some really interesting things about how to support the work from home, you know we're kind of shifting from a hardened top into users, remote workers and then a lot of commentary on security, so you know that's sort of a high level scan and there's just so much information here, Erik but maybe you could sort of summarize on some of those, that commentary? >> Yeah, we should definitely dig in to each of those sectors a little more, but to summarize what we're seeing here was the real winners and losers are clear. Not everyone was prepared to have a work from home strategy. Not everyone was prepared to send their workers out, their VPN didn't have enough bandwidth so there was a real quick uptake in spending, but longer term we're starting to see that these changes will become more permeant. So the real winners and losers right now, we're going to see on the losers side traditional networking, the MPLS networking is in a lot of trouble according to all the data and the commentary that we're seeing, it's expensive, it's difficult to ramp up bandwidth as quickly as you need and it doesn't support remote. So we're seeing that lose out and the winners there are in the SD-WAN space, it's going to be impossible to ignore that going forward and some of our CIO and even CISO panelists said that change will be permanent. Also we're seeing at the same time, what they were calling a run SaaS and cloud, now we know these trends obviously were already happening but they're being exacerbated, they're happening even more quickly and more strong and I don't see that changing any time soon. That of course is at the expense of data centers, whether it be your own or hosted. Which has huge ramifications on on-prem hardware, even the firewall providers. So what we're seeing here is obviously we know things are going to be impacted by this situation, we didn't necessarily expect all of our community members and IT decision makers to talk about them being possibly permanent, so that on a high level was something that was extremely interesting. And the last one that I would bring up is that as we make this shift towards working from home, towards remote access, you also have to align yourself with the security that can support that. And one of the things that we're seeing in our data side on ETR, is a widening bifurcation between the next-gen security vendors and the more traditional security or the legacy security players, that bifurcation just keeps getting wider and wider and this situation could be the last straw. >> So I want to follow up on a couple of those things, you talked about sort of the network shift and toward SD-WAN, what people have described to me is that they've got a hardened top, it's a hierarchal network, it's very well understood, and it's safe right, and now all of a sudden you got all these remote workers and so you've got to completely sort of rethink your whole network architecture, the other thing I want to grill into is your cloud commentary. There's a comment that I saw Erik, that really stood out, one of the folks said, I would like to see the data centers be completely deleted, if you will or closed down, I mean I think we're going to see you know, a lot more of this, obviously. Not only from the standpoint of, and you heard this a lot the kind of pay by the drink, but just generally getting rid of all that sort of so called non-differentiated heavy lifting as we often hear about. >> That is a extreme comment, I don't think everyone feels that way, but yes, the comment was made and we've heard that comment from other people as you and I both know the larger the enterprise the harder that is to go completely SaaS, but yeah, when a situation like this happens and seeing the inflexibility of their on-prem infrastructure, yes it becomes something that really has to be addressed and it can become a permanent change, I was also shocked about that comment. That gentleman also stated that his executives outside of the IT area, the CEO, the CFO had never ever, ever wanted to discuss cloud, they did not want to discuss work from home, they did not want to discuss remote access. He said that conversation has changed immediately and to the credit of the actual IT companies out there, the technology companies, they're doing everything they can with this opportunity to make that happen. >> Yeah and so, right, I mean the whole work from home conversation that's to your point earlier, Erik, big chunks of COVID, you know the post COVID world are going to remain permanent, guys bring up the SaaS slide if you will, the SaaS commentary "As-a-Service-Saved our SaaS" as the wittiest quip award according to ETR, you know but you had, it was very interesting to hear folks, in fact I think somebody even called out, hey you know we expected Oracle to be auditing us but they're actually being very supportive as is IBM, SalesForce was an interesting comment Erik, one of the folks said they would share accounts you know on-prem but when they all do the work from home they had to actually buy some more. You also got Cisco with big props, Microsoft was called out, a lot of organizations actually allowing them to defer payments, so the SaaS vendors actually got very high marks, didn't they? >> They really did and even I wrote that summary and it was difficult to write that about Oracle because we all know that they're infamous for auditing their own customers in 2009, right after we we came out of the financial crisis. They have notoriously been a bad act, I don't know if they found religion and they decided to be nice to their customers, but every single person mentioned them as one of the vendors that was actually helping. That was very shocking. And then we all know that when bad situations happen people become opportunistic and right now it's really seeming that the SaaS vendors understand that they need a longterm relationship with these customers and they're being altruistic instead which is really nice to see. >> Yeah, I think the, I think anybody with a cloud realizes that hey, we have an opportunity here, the lifetime value of that customer whereas maybe in 2009 when Oracle didn't have a cloud they had to get people in a headlock to try to preserve their you know income statement. If we, let's go to the networking drilldown guys, that next slide, because Fortinet, some of the things that we've been reporting on is the sort of divergence in valuations between Fortinet and Palo Alto before this whole thing hit. Fortinet has done a really good job with it's cloud offerings, Palo Alto struggled a little bit with trying to figure out the sales compensation, is maybe a little bit behind, although both companies got strong props and I've talked to a number of customers and Palo Alto's going to be in the mix, but Fortinet from a cloud standpoint seems to be doing quite well, obviously networking, you know Cisco is the big gorilla there, but so and we also got call outs from guys like Trend Micro, which was interesting from some of the folks so your thoughts on this Erik? >> Yeah, I'll start in the networking side because this is something that I really, I've dug into quite amount in not only this panel but a lot of interviews and it really seems as if as networking refresh starts to come up and it's coming up with a lot of large importers, when your network refresh comes up, people are going to do an RFP for SD-WAN. They are sick and tired of paying MPLS network vendors and they really want to look at something else. That was even prior to this situation. Now what we're hearing is this is a permanent change, I particularly had one person say, I wanted to find this quote real quickly if I can, but basically they were basically saying that from a permanency perspective, the freedom from MPLS will reduce our network spend by over half, while more than doubling or tripling our bandwidth. You can't ignore that, you're going to save me money and triple my bandwidth. And hey, by the way, my refresh is due, it's something that's coming and it's going to happen. And yes you mentioned a few, right, there's Viptela, there's VeloCloud, there's some big players like Cisco. But Palo Alto just acquired CloudGenix in the midst of all of this. They just went and got an SD-WAN player themselves and they just keep acquiring a portfolio to shift from their on-prem to next-gen. It's going to take some time, 'cause 70% plus of their revenue is still on-prem hardware, but I do believe that their portfolio that they're creating is the way the world is moving and that's just one comment on the traditional networking versus the next-gen SD-WAN. >> And the customers have indicated you know it's not easy just to get off of their MPLS networks. I mean it takes time, it's like slowly pulling off the bandaid, but like many things COVID-19 is sort of accelerating that, we haven't talked about digital transformation, that came up. As a maybe more strategic initiative, but one that you know very clearly has legs. >> You know David, it's very simple, you just said it, people, when things are going well and they're comfortable they don't change and that's the same for an enterprise or a company, hey everything's great, our revenue's fine, why would we do this? We'll worry about that next year. Then something like this happens and you realize wow, we've been dragging our feet. That digital transformation that we've been talking about and we've been a little bit slow to accept, we need to accept it, we need to move now. And yes, it was another one of the major themes and it sounds silly for researchers like you and I, because we know this is a theme, we know cloud adoption is there, we know digital transformation is there, but there are still a lot of people that haven't moved as quickly as they should and this is going to be that final catalyst to get them there without a doubt. Quickly on your point of Fortinet, I was actually very impressed with the commentary that came from that because Fortinet is sometimes one of those names that you think of that maybe plays in a smaller pool or isn't as big as some of the 800 pound gorillas out there, but in other interviews besides this I heard the phrase point of 40 everything, so through our R&D and through acquisitions, Fortinet has really expanded their portfolio. And right now is their time to shine because when you have smaller satellite you know offices and branches that you need to connect, they're really, really good at it. And you don't always want to call a Palo Alto and pay that price, when you have smaller branch offices and I actually I was glad you brought up Fortinet because it's not a name that we get to herald that often and it was deserving from this panel. >> Yeah and you know companies that can secure gateways, secure endpoints are obviously going to have momentum, Zscaler came up, you know I think that's and I tell you looking at I've done a couple of breaking analysis on security, and Fortinet has been strong in two dimensions, you know ETR as our audience is I think getting to know, we really look at two key metrics, one is a net score which is a measure of spending momentum and the other is market share, which is a measure of pervasiveness, and companies like Fortinet in security, you know show up on both of those dimensions so it's notable. >> Yes, it certainly is, it is and I'm glad you brought up Zscaler too, very recently by strong request we did a very in depth research on Zscaler versus Palo Alto Prisma access. And they were very interested and this was before all this happened. You know does Palo Alto have a chance of catching up, taking share from Zscaler? And I've had the pleasure myself personally hosting Jay, the CEO of Zscaler at an event in New York City. And I have nothing but incredible respect for the company. But what we found out through this research is Zscaler at the moment their technology is still ahead according to their answers there is no doubt, however there doesn't seem to be any real secret sauce that will stop Palo Alto from catching up. So we do believe that parody of a feature set will shrink over time and then it'll come down to Palo Alto who obviously has a wider end-user interface. Now, what's happening today might change that because if I had to make a decision right now for my company on secure web gateway, I'm still probably going to got to Zscaler, it's the name. If I had to choose that in a year from now, Palo Alto might have had a better chance, so in this panel as you brought up, Zscaler was mentioned numerous times as just the wave of the future along with CASB Brokers, right, whether you're talking about a Netskope or Forcepoint, all those people that also play in the CASB space, to secure your access, zero trust is no longer a marketing hype term, it is real and it is becoming more real by the week. >> And so I want to kind of end on one of the other comments that really struck me because we're constantly talking about okay, do you go with a portfolio of a suite of services or do you go with best of breed, what about startups? Are startups more risky in a crisis like this? And one of your panelists, I just loved his comment, he said, one of the things that I've always done, he said, you always hear about the guy, oh we're going to to the garden, we're going to check out the magic water, we'll pick out three guys in the upper right hand corner and test them out, he says, one of the things that I've always liked to do, is I'll pick two from the upper right, and I'll take one from the lower left, one of the emerging techs and I'll give them a shot, they won't win every time but then he called out FireEye as one of the organizations that he found early that gave them competitive advantage. >> Right. >> Love that comment. >> It's a great comment and honestly if you're in charge of procurement, you'd be stupid not to do that. Not only just to see what the technology is, but now I can play you off the big guys because I have negotiation leverage and I can say, oh well I can always just take their contract. So it's silly not to do it from a business perspective, but from a technology perspective what we kept hearing from these people with the smaller vendors and my partner Peter Steube, my colleague and I we did the host together, we asked this question, really believing that the financial insecurity of the moment in the times would make smaller vendors not viable. We heard the exact opposite, what our panelists said was no, I'd be happy to work with a smaller vendor right now because they're going to give me pricing flexibility, they're going to work with me right now, I don't need to pay them upfront because we're seeing a permanent shift from CAPEX to OPEX and the smaller vendors are willing to work with me and I can pay them later. So we were actually surprised to hear that and glad to hear it because to connect to your other point, the other person who was talking about security in a platform approach versus best of breed, he said listen, platform approaches you're already with the vendor you can bundle a little bit, but the problem is if you're just going to acquire a new technology every time there's a new threat, the bad guys are just going to switch the threat and you can't acquire indefinitely so therefore best of breed with security will always beat platform and that's kind of a message to Palo Alto and Cisco in my opinion because they seem to be the ones fighting that out, even Microsoft now trying to say that they're a platform approach in security. >> Wow and it says to me the security business is going to as we predicted is going to stay fragmented because you're still going to get that best of breed, you know just like cloud is going to be fragmented and it's you know multiple vendors, ever since I've been in this business people are trying to consolidate the number of vendors but technology moves so quickly, it gives competitive advantage, Erik, awesome thank you so much for joining us, I'm looking forward to next Tuesday with the next VENN and love to have you back and talk about it any time, you're a great guest, thanks so much. >> Certainly! I'll do my best to get a better AV connection the next time guys, I apologize for that, but it was great talking to you guys. >> Hey, we're all learning you know, so thank you everybody for watching, this Dave Vellante for theCUBE and we'll see you next time. (upbeat music)

>>from the Cube Studios in Palo Alto and Boston connecting with thought leaders all around the world. This is a cube conversation. Hello, everyone, and welcome to this week's Cuban sites, powered by ET are in this breaking analysis, we want to accomplish three things. First thing I'll do is we'll recap the current spending outlook. Next, we want to share some of the priorities and sentiments and the outlook that we're hearing from leading tech execs that we've been interviewing in the past couple of weeks on the remote cube. And finally, we'll take a look at really what's going on in the market place, a little bit of a look forward and what we expect in the coming weeks and months ahead. Now, as you know, E. T. R was really the first to quantify with real survey data the impact of covert 19 on I t spend. So I just want to review that for a moment. This CTR graphic right here shows that results from more than 1200 CIOs and I T practitioners. That shows that they expect their I t spending how they're they're spending on the change in 2020 now, look at the gray bar shows a very large number of organizations that they're plowing ahead without any change. In overall, I spend about 35% now shown in the green bars before 21% of respondents are actually increase their budgets this year. And the red bars, of course, they show the carnage. Really, 28% of customers are expecting a decrease of more than 10% year on year. Now, as we've reported, the picture would look a lot worse were it not for the work from home infrastructure, offset by E spending on collaboration tools and related networking security. VPN, VD I interest infrastructure, etcetera. Now remember each year launched this survey on March 11th and ran it through early April. So it caught the change in sentiment literally in real time on a daily basis. And that's what I'm showing here in this graphic. What it does is it overlays key events that occurred during that time frame and what E. T. R did was they modeled and rear end the data excluding the responses prior to each event. So, of course, the forecast got progressively worse over time. But as you can see on the Purple Line. There was a little bit of an uptick in sentiment from the stimulus package, and it looked like, you know, there's another. It looks like there's another economic cash injection coming soon. Now, as we've reported, the card forecast calls for around 4% decline in I t spend from 2020. That's down from plus 4% prior to Corona virus. It's ER has now entered its self imposed quiet period for two weeks. But what we're doing here is showing some of the sectors that we're watching closely for big changes. We're gonna drill into these over the next several weeks. Now, of course, is we've reported we're seeing a substantial cut in I t spend across the board. Capex will be down. We would expect sectors like I t consulting and outsourcing to be way, way down as organizations put a lot of projects on the back burner. But there are bright spots is shown here in the green. One that we really haven't highlighted to date is cloud really haven't dug into that and also data center related services around Cloud Cloud, we think, is definitely going to remain strong and these related services to get connect clouds via Coehlo services and really reducing latency across clouds and on Prem, we think will remain strong. Now I want to shift gears a little bit and talk about some of the learnings and takeaways from our conversations with CSOs over the past couple of weeks. One of the great things about the Cube is we get to build relationships with many, many people. Over the past 10 years, I've probably personally interviewed close to 5000 people, so we've reached out to a number of those execs over the last couple of weeks to really try and understand how they're managing through this cove in 19 Crisis. So let me summarize just some of the things that we heard. And then I'll let the execs speak to you directly first, of course, like tech execs, are there half full people perpetual optimist, if you will. It was interesting to hear how many of the people that I spoke with, that they actually had early visibility on this crisis. Why? Because a lot of our operations, we're actually in China and other parts of Asia, so they saw this coming to an extent, and they saw it coming to the U. S. And so you know, there were somewhat ready and you're here. They all had on air of confidence about their long term viability and putting their put their employees ahead of profits. But the same time, once they see that their employees are okay, they want to get them focused and productive. Now what they've also done is they've increased the cadence and the frequency of their communications. Yeah, and most, if not all, are trying to get back with a free no strings attached software and other similar programs. But the bottom line is, they really don't know what's coming. They don't know when this thing will end. They don't know what a recovery really is gonna look like when people are going to feel safe traveling again what the overall economic impact is gonna be. So I think it's best summarized to say they're hoping for the best, but planning for the worst. But let's listen to this highlight clip that we put together of five execs that I talked to along with John Furrier Melissa DiDonato of Susa. Frank Sluman, who had snowflake and he's formerly the chairman and CEO of service. Now Jeremy Burton is the CEO of a company called Observe. He used to be the CMO of Dell and EMC. Before that, brand products Sanjay Poonam as the CEO of VM Ware and ST ST Vossen heads up Cisco's collaboration business. Roll the clip. >>What keeps me up at night now and how I wake up every morning is wondering about the health of my employees, that a couple of employees, one that was quite ill in Italy. We were phoning him and calling and emailing him from his hospital bed. And that's what's really keeping me going. What's inspiring me to leave this incredible company is the people and the culture that they built that I'm honoring and taking forward as part of the open source value system. My first movers, Let's not overreact. Take a deep breath. Let's really examine what we know. Let's not jump to conclusions. Let's not try to project things that were not capable of projecting death hard because, you know, we tend to have sort of levels off certainty about what's gonna happen in the next week in the next month, and so on. All of a sudden that's out of the window creates enormous anxiety with people. So, in other words, you've got a sort of a reset to Okay, what do we know? What can we do? What we control, Um, and and not let our minds sort of, you know, go out of control. So I talk to are people time of maintain a sense of normalcy focused on the work. Stay in the state in the moment. And ah, I don't turn the news feed off. Right, Because the hysteria you get through that through the media really not helpful. Just haven't been through, you know, a couple of recessions where, you know, we all went through 9 11 You know, the world just turn around and you come out the other side. And so the key thing is, you said it very much is a cliche, but you gotta live in the moment. What can I do right now? What can I affect right now? How can I make sure that you know what I'm working on is a value for when we come out the other side. And when you know more code balls come along. I think you'd better reason about that with the best information you have at the time. I always tell people the profits of VM Ware wheat. If you are not well, if your loved ones not well, if you take a picture of that first, we will be fine. You know this to show fast, but if you're healthy, let's turn our attention because we're not going to just sit in a little mini games. We're gonna so, customers, How do we do that? A lot of our customers are adjusting to this pool, and as a result they have to, you know, either order devices, but the laptop screens things were the kinds to allow work for your environment to be as close to productive as they're working today. I do see some, some things coming. Problem right? Do I expect the volumes off collaboration to go down? You know, it's never going to go back to the same level. The world as we know it is going to change forever. We are going to have a post code area, and that's going to be changed for the better. There's a number of employees who have been skeptical, reticent, working from home were suddenly going to say just work from home. Thing is not so bad after all. >>So you can hear from the execs who all either currently or one point of lead large companies in large teams. They're pretty optimistic now. The other thing that's Lukman told me, by the way, is he approves investments in engineering with no qualms because that's the future of the company. But he's much more circumspect with regard to go to market investments because he wants to see a high probability of yield from the sales teams before making investments there. I also want to share some perspectives that I've learned from small early stage companies, and we've all seen the Sequoia Black Swan memo and you might remember there onerous rest in peace, good times the alert that they put out in 2008. It basically they're essentially advising companies to stop spending on non essential items. By the way, another slew of society also somewhat scoffed at this advice, and he told me on the Cube, you should always stop spending money on non essential items. At any rate, I've talked to a number of early stage investors and portfolio companies, and I'll share a little bit of their play Bach playbook that they're using during this crisis, and it might have some value to the cut, cut cut narrative that you're hearing out there. I think the summary for these early stage startups is first focus on those customers that got you to where you are today. In other words, don't lose sight of your core. The second thing is, try to hone your go to market and align it with current conditions. In other words, paint a picture of the ideal customer and the value proposition that you deliver specifically in the context of the current market. The third thing is, they're updating their forecast more frequently and running sensitivity analysis much more often so that they can better predict outcomes. I e. Reset. You're likely best case and worst case models. The third is essentially reset your near term and midterm plans and those goals and re balance your expense portfolio to reflect these new targets. And this is important by the way, to communicate to your investors. When I've seen is those companies with annual recurring revenue there actually in pretty good shape, believe it or not, in almost all cases, I've seen targets lowered. But there are some examples of startups that are actually increasing their outlook. Think, Zoom, even those who is not a startup anymore. But generally I've seen resets of between 5 to 10% downward, which you know what often is in pretty much in line with the board level goals. And I've seen more drastic reductions as well of up to 50% now. So we've heard some pretty good stories from larger tech companies and some of these VC funded startups. Now I want to talk about small business broadly and what we're hearing from small business owners and also the banks that serve them. Look, I'm not going to sugar coat this many small businesses, as you well know, in deep trouble. They're gonna go out of business. They're laying off people on. There are a number of unemployed the aid package that the government's putting forth the small businesses. It's not working its way through the banking system. Not nearly fast enough, despite the Treasury secretaries efforts, The bottom line is banks don't want to make these loans to small businesses. Right now, there's too much that they don't understand. They're making no money on these loans they're being overwhelmed with. Volume will give you some examples. Bank of America, when the small business payroll program first hit signal that would Onley help companies with both ah banking relationship and an existing lending relationship with the bank UPS is another example said it was only gonna directly help companies with over 500 employees. And for small businesses, it was outsourcing that relationship to another firm, which, of course, meant you had to go through a new rectal exam, if you will, with that new firm. In a way, you can't blame the banks. They're being asked to execute on these programs without clear guidance on how they're supposed to enforce guidelines. And what happens if they make a mistake? Is the federal government gonna pull their guaranteed backing? What are those guidelines? They seem to be changing all the time. And what's the banks, liability and authority to enforce them? Why don't I spend time talking about this? Well, nearly half of US employees work for small businesses, and nearly 17 million workers as of this date have filed for unemployment, and I'll say the banks got bailed out in the financial crisis of 2008 and they need to step up, period, and the government needs to help them, all right. The other buzz kill data that I want to bring up is our national debt. Now many have invoked that there's no such thing as a free lunch, including the famous Milton Friedman, the Economist who I'm gonna credit. Others have said it, but I'll give it to him. Why? Because he espoused controlling the money supply and letting the market's fix themselves bailouts. The banks, airlines, Boeing, automakers, etcetera, those air antithetical to his underlying philosophy. Currently, the U. S national debt is $24 trillion. That's $194,000. Protects player Americans. Personal debt is now 20 trillion. Our unfunded liabilities, like Social Security, Medicare, etcetera now stands at a whopping 139 trillion. And that equates to about 422,000 per citizen. Think about this. The average liquid savings for US family is 15 K, and the U. S debt is now 111% of GDP. So we've been applying Kenzie and Economics for a while now. I'm gonna say it seems to have been working. Think about the predictions of inflation after the 8 4000 and nine crisis. They proved to be wrong. But my concern is I don't see how we grow our way out of this debt, and I worry about that. I've worried about this for a long time, but look, we're knee deep into it and it looks like there's no turning back so well, I'll try to keep my rhetoric to a minimum and stay positive here because I think there is light at the end of the tunnel. We're starting to see some some good opportunities emerging here just in terms of flattening the curve and the like. One of the things that pretty positive about is there gonna be some permanent changes from Cove it. It's kind of ironic that this thing hit as we're entering a new decade decade and as I said before, I expect digital transformations to be accelerated because of this crisis and the many companies that have talked digital from the corner office. But I haven't necessarily really walked the walk, I think will now I think is going to be more cloud more subscription less wasted labor, more automation, more work from home unless big physical events, at least in the next couple of years. So that's kind of the new expectation. As always, we're going to continue to report from our studios in Palo Alto and Boston, and we really welcome and appreciate your feedback. Remember, these segments are all available as podcasts, and we're publishing regularly on silicon angle dot com and on wiki bond dot com. Check out ctr dot plus for all the spending action, and you can feel free to comment on my LinkedIn post or DME at development or email me at David Volante Wiki. Sorry, David Vellante is silicon angle dot com. This is Dave Volante for the Cube Insights powered by CTR. Thanks for watching everyone. We'll see you next time. >>Yeah, yeah, yeah, yeah.

>> From theCUBE studios in Palo Alto in Boston, connecting with our leaders all around the world, this is theCUBE Conversation. >> Hello everyone, and welcome to this week's Wiki Bond CUBE Insights powered by ETR. In this breaking analysis, we're changing the format a little bit, we're going right to the new data from ETR. You might recall that last week, ETR received survey results from over 1000 CIOs and IT practitioners. And they made a call at that time, which said that actually surprisingly, a large number of respondents about 40% said they didn't expect a change in their 2020 IT spending. At the same time about 20% of the survey said they're going to spend more largely related to Work From Home infrastructure. ETR was really the first to report on this. And it wasn't just collaboration tool like zoom and video conferencing. It was infrastructure around that security, network bandwidth and other types of infrastructure to support Work From Home like desktop virtualization. ETR made the call at that time, that it looked like budgets, were going to be flat for 2020. Now, you also might recall consensus estimates for 2020 came into the year at about 4%, slightly ahead of GDP. Obviously, that's all is changed. Last week, ETR took the forecast down, and we're going to update you today. We're now gone slightly negative. And with me to talk about that again, is Sagar Kadakia, who's the Director of Research at ETR. Sagar, great to see you again, thank you for coming on. >> Thanks for having me again David, really appreciate it. >> Let's get right into it. I mean, if you look at the time series chart that we showed last week, you can see how sentiment changed over time. That blue line was basically people who responded to the survey starting at 3/11. Now you've updated that, that forecast, really tracking after the COVID-19 really kicked in. Can you explain what we're seeing here in this chart? >> Yeah, no problem. The last time we spoke, we were around an N or sample size of about 1000. And we were right around that zero percent growth rate. One of the unique things that we've done is we've left this survey open. And so what that allows us to do is really track the impact on annual IP growth, essentially daily. And so as things have progressed, as you look at that blue line, you can really see the growth rate has continued to trend downwards. And as of just a day or two ago, we're now below zero. And so I think because of what's occurring right now, the overall current climate continues to slightly deteriorate. You're seeing that in a lot of the CIOs responses. >> If you bring that slide back up Andrew, I want to just sort of stay on this for a second. What I really like about what you guys are doing is you're essentially bringing event analysis in this. So if you see that blue line, you see on 3/13, a national emergency was declared and that's really when the blue line started to decline. What ETR has done is kind of reset that, reset the data since 3/13. Because it's now a more accurate reflection of what's actually happening happening in the market. Notice in the upper right, it says the US approved... The Senate last night approved a stimulus package. Actually, they're calling it an Aid Package. It's really not a stimulus package. It's an aid package that they're injecting to help. A number of our workers actually sounds like existing workers and small businesses and even large businesses like Boeing. Boeing was up significantly yesterday powering the Dow and potentially airlines. As you can see ETR is going to continue to monitor the impact, and roll this out. Really ETR is the only company that I know of anyway, that can track this stuff on a daily basis. So Sagar, that event analysis is really key, and you're going to be watching the impact of this stimulus slash aid packet. >> Yeah, so here's what we're doing on that chart. If you look at that yellow line again, effectively what you're seeing is, if we remove the first I think six or seven 100 respondents that took the survey and start tracking how budgets are changing as a 3/13, that's when the US declared a national emergency. We can recalculate the growth rate. And we can see it's around... It's almost negative one and a half. And so the beauty of doing this, really polling daily, is it allows us to be just as dynamic, as a lot of these organizations are. I think one of the things we talked about the last time was some of these budget changes are going to be temporary. And organizations are figuring out what they're doing day by day. And a lot of that is dictated based on government actions. And so uniquely here, what we're able to do is kind of give people a range and also say, "based on these events, "this is how things are changing."" And so I think we think the first biggest event was on 3/13, where the US effectively declared a national emergency over COVID-19. And now what we're going to start tracking between today and over the weekend, and Monday is: Are people getting more positive? Is there no change? Or is there further deterioration because of this aid package that got passed this morning? >> Now I want to share with our audience. I've been down to ETR's headquarters in New York, it's staffed with a number of data scientists and statistical experts. The ends here are well over 1000. I think we're over 1100 now, is that correct? What is the end that we're at today? >> That's right. Yeah, we're we're pushing right over 1200. And we're going to expect a few more hundred respondents. The good thing is it's balanced, which is important. All these events that are occurring, we want to make sure that we have at least a few hundred more CIOs and IT executives answering. And so every week as we kind of continue to do some of these breaking analysis, there are going to be a few more hundred CIOs. And we'll really be able to zero in or hone in on what they're saying. The growth rate on the IT side, it's going to continue to fluctuate. It's going to continue to be dynamic over the next few weeks, but right now versus (murmurs). We are in negative territory now. >> I want to also explain I mean, the end is important. But in and of itself, it's not the be all end all, what's important about the end, the larger it is, the more cuts you can make. And I want to share... You guys have been doing this for the better part of a decade. And so you have firm level data. And you've got indicators and markers that you've tracked over the years. For example, one of the things that ETR tracks is Giant Public and Private GDP we call it. And that's for example, I'm not saying that, that Mars is one of the companies but Mars is a huge private company, UPS before they went public, huge private company. ETR tracks firm level data, they of course anonymize that, but they can see markers and trackers and trends, and probably have, I don't know dozens of those types of segments. So the bigger the end is, the more... The higher the end within those buckets, and the better the confidence interval. And you guys are experts at really digging into that in trying to understand and read the tea leaves. >> That's right. The key to this survey is, it's not anonymous, we know who is taking the survey. Now to your point, we do anonymize and aggregate it when we display those results. But one of the unique capabilities is we're able to see all of these trend lines. The entire drill down survey that we did on COVID-19 through the lenses of different verticals so we can take a look at industrials materials manufacturing, healthcare, pharma, airlines, delivery services, health, and all these other verticals and get a feel for which ones are deteriorating the most, which ones look stable. And, we talked about last week and it continues to remain true this week. And again, the ends have gone up on all these verticals on the supply chain side. Industrials, materials manufacturing, healthcare, pharma, they continue and they also anticipate to see these things in the next few months, broken supply chains and on the demand side, it's really retail consumer airlines delivery services. That's coming down quite substantial. And I think, based on what United and some of these other airlines have done these last few days in terms of cutting capacity, that's just a reflection of what we're seeing. >> Let's dig into the data a little bit more and bring up the next chart. Last week, we're about 40% actually, exactly 40% where that gray line that said: CIOs and IT practitioners said, "no change." They're like the budget of the green. The green was actually at about 20 21%. So it's slightly up now at 22%. And you can see, most of the the green is in that one to 10% range. And you can see in the left hand side, it's obviously changing. Now we're at 37% in the gray line, slightly up in the green, and a little bit more down and in the red. So take us through what's changed Sagar. >> Yeah, to reiterate what we were talking about last week, and then I'll kind of talk about some of the change is, I think the market and a lot of our clients, they were expecting the growth rate to be more negative. Last week when we talked about zero percent. The reason that, it wasn't more negative is because we saw all these organizations accelerating spend because they had to keep employees productive. They don't want to catastrophe in productivity. And so you saw this acceleration, as you mentioned earlier in the interview around Work From Home tools, like collaboration tools, increasing bandwidth on the VPN networking side, laptops, MDM, so forth and so on. That continues to hold true today. Again, if we use the same example that we talked about last week, (mumbles) organizations, they have 40 50 60,000 employees or more working from home. You have to be able to support these individuals and that's why we're actually seeing some organizations accelerate spend and the majority organizations even though they are declining spend, some of that is still being offset by having to spend more on what we're calling kind of this Work From Home infrastructure. But I will say this: you are seeing more organizations versus last week, which is why the growth rate has come down, moving more and more towards the negative buckets. Again, there is some offset there. But the offset we talked about last week, Work From Home infrastructure is not a one-for-one when it comes to taking down your IT budget, and that continues to hold true. >> Let's talk a little bit about some of the industries retail, airlines, industrials, pharma, healthcare, what are you seeing in terms of the industry impact, particularly when it relates to supply chains, but other industry data that went through? >> I think the biggest takeaway is that healthcare pharma, industry materials, manufacturing organizations, they've indicated the highest levels of broken supply chains today. And they think in three months from now, it's actually going to get worse. And so we spoke about this last time, I don't think this is going to be a V shaped recovery from the standpoint of things are going to get better in the next few weeks or the next month or two. CIOs are indicating that they expect conditions to worsen over the next three months on the supply chain side and even demand the ones that are getting hit the hardest on the retail consumer side airlines, delivery services, they are again indicating that they anticipate demand to be worse three months from now. The goal is to continue serving and pulling these individuals over the next few weeks and months and to see if we can get a better timeline as we get into two edge but for the next few months, conditions look like they're going to get worse. >> I want to highlight some of the industries and let's make some comments here. Retail... You guys called out retail airlines, delivery services, industrials, materials, manufacturing, pharma and healthcare, there's some of the highest impact. I'll just make a few comments here. I think retail really, this accelerates the whole digital transformation. We already saw this starting, I think you'll see further consolidation and some permanence in the way in which companies are pivoting to digital. Obviously, the big guys like Walmart and the like are competing very effectively with Amazon. But, there's going to be some more consolidation there. I would say potentially the same thing in airlines that really are closely watching what the government is going to do. But, do we need this this many airlines? Do we need all this capacity? Maybe yes, maybe no. So watching that. And of course, healthcare right now, as I said last week in the braking analysis, they're just too distracted right now to buy anything. And they're overwhelmed. Now, of course, pharma, they're manufacturing, so they've got disruptions in supply chain and obviously the business. But there could be an upside down the road as COVID-19 vaccines come to the market. >> On the upside, I think you kind of hit it, right on the nail. When you get these type of events that occur. Sometimes it speeds up digital transformation. one of the things that the team and I have been talking about internally is: this is not your father's Keep The Lights On strategy so to speak. Organizations are very focused on maintaining productivity versus significantly cutting costs. What does that mean? Maybe three to five years ago, if this had occurred, you would have seen a lot of infrastructure as a service platform, as a service... A lot of these cloud providers, you'd have seen those projects decline as organization spent more on on plan. And we're not seeing that. We're seeing continued elevated budgets on the Cloud side and Micron just reported this morning and again, cited strong demand on the Cloud and data center side. That just goes to show that organizations are trying to maintain productivity. They want to continue these IT roadmaps and they're going to cut budgets where they can, but it's not going to be on the Cloud side. >> You know what, that's a really important point. This is not post Y2K, not 2008, 2007, 2008, 2009 because we've, pretended but a 10 year bull market, companies are doing pretty well, balance sheets are generally strong. They somewhat in whether, it was used to stronger companies, whether they're so they're not focused right now anyway, on cut cut cut as it was in the last few downturns. Let's go into some of the vendor data and some of the sector data, Andrew if you'd bring up the next chart. What we're showing here is really comparing the the blue is the January survey to the current survey in the yellow, and you're seeing some of the sectors that are up taking. You've identified mobile device management, big data and Cloud, some of the productivity, you mentioned DocuSign, Adobe zoom, Citrix, even VMware with the desktop virtualization. We've talked about security, you've got marketing and LinkedIn, my LinkedIn inbound is going through the roof as people are probably signing up for a LinkedIn premium. Let's talk about this a little bit. What you're seeing... Help us interpret this data. >> Yeah, sure. One of the things that everybody wants to know is, okay, so Work From Home infrastructures getting more spend for the vendors that are benefiting the most. One of the unique things that we can do is because we're kind of collecting all the DNA, from a tech stack aside from these organizations, we can overlap, how they're spending on these vendors. And also with the data that they provide in terms of whether they are increasing or decelerating their IT budgets because of COVID-19. What you're looking at here, is we isolated to all of those organizations and customers that indicated that they're increasing their budgets because of COVID-19. Because of the Work From Home infrastructure. And what we're doing is we're then isolating to vendors that are getting the most upticks in spend. This actually really nicely aligns with a lot of the themes that we were talking about collaboration tools. You see that VMware, they're all right on the virtualization side, MDM with Microsoft. And you're seeing a lot of other vendors with Citrix and Zoom and Adobe. These are the ones that we think are going to benefit from this kind of Work From home infrastructure movement. And again, it's all very... It's not just the qualitative and the commentary. This is all analytics, we really went in and analyzed every single one of these organizations that were increasing their budgets and tried to pinpoint using different data analysis techniques, and to see which vendors were really getting the majority or the largest, pie of that span. >> We had Sanjay Poonen, who's the CEO of VMware on yesterday and he was very sensitive but not trying to hear as your ambulance chasing because obviously they do desktop virtualization and VDI big workload. At the same time. I think he was also being cautious because there's probably portions of their business that are going to get hit, Michael Dell similarly, I think he was quoted in CRN as saying, "hey, are we seeing momentum in our laptop "business in our mobile business?" But as you guys pointed out, the flip side of that is their on prem business is probably going to suffer somewhat. It's a kind of like the Work From Home is a partial offset, but it's not a total offset. You're seeing that with a lot of these companies. Obviously, Microsoft, AWS, a lot of the cloud companies are very well positioned, how about some of the guys that are going to get impacted? Obviously, as I said that the on-prem folks, you guys talked about earlier it's not your father's Keep Your Lights On strategy. Okay but this... You asked the question, is this a reprieve for the legacy guys? Not quite, was your conclusion. What did you mean by that? >> I think a lot of times when you have these sub-events, the clients a lot of the market think okay, "some of the legacy vendors are going to do well "because, we're in malicious times, "and we don't want to keep on this kind "of next generation strategy." We're not seeing that and to the point that you highlighted earlier. There are... Even though these companies like Dell, like Cisco, where they're seeing some products accelerate, there are products to your point that are not doing as well The desktops, right? As an example for Dell or the storage. On the negative side or the legacy side where we're just not seeing any traction, the IBM's the Oracle on-prem, Symantec, which got acquired by Broadcom, checkpoint MicroStrategy. And there's another half dozen other vendors that we're seeing where they are not capitalizing. There is no reprieve for these legacy names. And we don't anticipate them getting additional spend, because of this Work From Home infrastructure kind of movement. >> Let's unpack that a little bit. It's interesting Symantec and checkpoint in security, security you think would get an uplift there, but what you're seeing here is... Let me just tell the audience who you called out. Symantec Teradata MicroStrategy, NET app Checkpoint Oracle and IBM, and I know there are others. But I would say this: These are companies that are getting impacted in a big way by the Cloud. Particularly like Symantec and checkpoint. That's a Cloud security companies are actually probably still doing pretty well. You take Teradata, their data is getting impact by the Cloud from folks like Snowflake and Redshift, MicroStrategy a lot of modern BI coming out. NetApp here's a company that's embraced the Cloud, but the vast majority of the business changess to be on-prem. I think IBM and Oracle are interesting. They're somewhat different. Actually a lot different IBM has services exposure, and you guys call that out, particularly around outsourcing. At the same time, it's going to be interesting to see IBM is going to get a lot of resources. Going to be interesting to see if they start coming out with corona virus related services. So watching for that, and then Oracle, their whole story is, "okay, we got Gen 2 Cloud and Mission Critical in the Cloud, but they're on-prem businesses, I think clearly going to be affected here is kind of what you guys pointed out, and I would agree with your thoughts. >> I think what we're seeing is organizations they had a Cloud roadmap, and that roadmap is continuing. The one thing that is changing in some of that roadmap is we need to be able to support employees as they work from home as we achieve this roadmap. And so that's why we're not seeing a reprieve on the legacy side. But we are seeing upticks and spin where we just wouldn't anticipate them right on maybe on Citrix, on Dell laptops, Adobe and a few other areas. Now, in terms of security side, some of the next gen security vendors like CrowdStrike APi, which is an MFA, those vendors are doing well. It makes sense, where you have more people working from home, you have more devices that are connecting to data applications. Just a component itself. And so you would expect spend to continue going up as you need more authentication, more Endpoint Protection. Cisco Meraki they do Cloud Networking. That piece is looking very good, even though Hardware networking is not looking very good at all. The Cloud Networking is looking good, which again makes sense, as you're increasing bandwidth on that side. >> Definitely stories of two sides of that coin. >> That's right >> I want to... Andrew, if you want to... If you wouldn't mind bringing up the next job, we're going to go back to the first one that we showed you with the time series. This is a very important point. Again, we can't stress it enough. We want to understand the impact of the stimulus or aid package. And ETR is going to continue to track that. What can we expect from you guys over the next week or so? >> The goal is to determine whether or not the stimulus is having an impact on how people are responding to our survey as a relates to how they're changing their budgets. The next four or five days, if we start seeing an uptick in this yellow and blue lines here, I think that's a positive. I think that shows that people are kind of wrapping their heads around, great government is taking action here. There is a roadmap in place to help us get out of this. But if the line continues coming down, it just may be that the last few weeks or the last month or so, there was just so much damage. There's not really... There's no coming back from this at least in the near term. So we are kind of watching out for that. >> Well, the Fed is definitely active. >> They're doing right what they can, they're pushing liquidity into the marketplace. People think out of bullets. I don't agree with the Fed. Fed has a quite a bit of of headroom and some dry powder, (murmurs) which is awesome. But the Fed itself, can't do it. You needed to have this fiscal stimulus. So we're excited to see that come to market. I think what I would say to our audiences, my concern is uncertainty. The markets don't like uncertainty and right now there's a lot of uncertainty. If you saw the piece on medium of The Hammer And The Dance it lays out some scenarios about what could happen to the healthcare system. You see people who say, "hey, we should shut down for 10 weeks." The president saying, "hey, we want "to get back to work by by April." The big concern that I have is: okay, maybe we can stamp it out in the near term and get back to work by late April, early May. But then what happens? Are people going to start traveling again? Are people going to start holding events again? And I think there's going to be some real question marks around that. That uncertainty I think, is something that we obviously have to watch. I think there is light at the end of the tunnel, when you look at China and some of the other things that are happening around the world, but we still don't know how long that tunnel is. I'll give you final thoughts before we wrap. >> I think and that's the biggest thing here is the uncertainty, which is why we're doing a lot of this event analysis. We're trying to figure out: after each one of these big events, is there more certainty in people's responses? And just we were talking about, sectors and verticals and vendors that are not doing well. Because the uncertainty we're seeing a lot of down ticks and spend amongst outsource IT and IT consulting vendors. And as long as the uncertainty continues, you're going to see more and more IT projects frozen, less and less spend on those outsource IT and IT consulting vendors and others. And until there's something really in place here where people feel comfortable, you're going to probably see budgets remain where they are, which right now they're negative. >> Folks as we said last week, Sagar and I, ETR is committed, theCUBE is committed to keep you updated on a regular basis. Right now on a weekly cadence. As we have new information, we will bring it to you. Sagar, thanks so much for coming on and supporting us. >> You're welcome and thanks for having me again. >> You're welcome. Thank you for watching this CUBE Insights powered by ETR. And remember all these breaking analysis available on podcast, go to etr.plus that's where all the action is in terms of the survey work. siliconangle.comm covers these breaking analysis and I published weekly on wikibond.com. Thanks for watching everybody. Stay safe. And we'll see you next time.

hello everyone and welcome to this week's wiki Bond cube insights powered by ETR in this breaking analysis we're going to share fresh data from etrs latest spending survey in particular ETR added a drill down question on the impact of coronavirus now yesterday I had the pleasure of hosting ETRS director of research Sagar khadiyah who took us through the details of that survey and we're gonna bring his comments in to this discussion so today I want to accomplish three things first I want to summarize the macro where are we at this point on the second day of spring in Massachusetts second I want to assess the impact from Co vid 19 on i.t spend for 2020 and the third thing I want to do is drill down into the findings from ET ARS latest survey after we do this I'll summarize and talk about what the outlook it looks like so where are we today you know we've gone from the fear of missing out in the stock market to basically fall out fear now as you well know the economic impact is not pretty I gotta say this is the first time I've ever seen a government imposed recession rightly so to save lives but I've also never seen such an escrow the board doubled downward shift in both supply and demand this creates uncertainty and ambiguity in pricing which makes forecasting anything really really difficult the liquidity shock and the credit risks are really of primary concern right now the price of oil is a huge issue why it's because energy companies account for a very sizable portion of the high-yield credit market over 10% so as prices fall it's going to be harder for oil companies to repay loans this creates default risk so this is the markets freaked out and functioning very very poorly now a poorly functioning market signals that we are not at the bottom everybody wants to know where the bottom is I'm not a stock picker and I'm not a market technician but I've seen a lot of downturns I'll share a quick story when I was at IDC we had an exclusive deal with Goldman Sachs two of the Goldman analysts were embedded into our Framingham offices now in 1987 on Black Monday and the following weeks I would stand at their real-time terminal there was no internet back then kids nobody had access to real-time trades but I did and I would watch the market in freefall and I would see it bounce back and then I would see it freefall again what I will tell you is this bottoms are impossible to protect everybody says that why because bottoms are not technical their psychological their emotional and in 1987 and then after the dot-com bust and after the financial crisis each time you saw the S&P with rally sometimes it would rally as high as 10% it would suck people back into the market and then pull back and that's going to happen here the markets not just gonna be fine any day now now if you're looking for some positives there is some silver linings that the canals in Venice are running clear which is amazing to see nitrous oxide levels over China are way way down okay let's shift and take a look at what this all means for IT spending what are the industries that are being most affected right now now as I show here there are some obvious sectors like energy and transportation retail etc but let's listen to Sagar from ETR what he told me yesterday now pay particular attention to what he says about supply chains roll the clip yeah industrials materials manufacturing retail consumer you know the healthcare pharma they you know those are the verticals from a supply chain perspective that are in you know elevated levels of broken supply chains and what's actually interesting is we in this survey we actually asked not only whether your supply chains were broken today but do you anticipate or do you continue or do and just they continue getting experiencing broken supply chains in three months from now and those percentages were up and I think that really tells us that this is not a one or two month type of recovery we're gonna see supply chains and demand continuing to be broken continuing to come down over the next three four months that I think is probably one of the biggest takeaways from the drill-down study so you see in the EGR survey it really underscores that we are not likely to see a quick snap back it's not a 1 or a two-month fix now in my own research I go out to the field I talked to people on the cube within our network I can add some excuse me some comments and some color here what we see is that healthcare right now is so swamped that they're not buying anything I mean they just they just are how many cycles most customers are taking they're skunkworks put anyone hold they're narrowing the capital spend and really focusing only on mission-critical items banks even though banks are down they have capital and they're still buying they got cash thanks they're smart and they're negotiating very hard for big discounts the other thing is a lot of customers have no choice but to buy many are on an AR are in your recurring revenue or annual current contract and have compliance edicts like we got to send out monthly statements if they don't renew they can't use their software to do that it's different but somewhat similar with maintenance contracts so you're seeing that sales teams are clearly bringing down their forecasts but they're not cutting them in half mmm not yet anyway all right but here's what's somewhat counterintuitive and you really you can really only quantify this with data some companies actually believe it or not they're spending more why because they try to preserve productivity would their work from home solutions they need infrastructure to do that so they're pivoting their budget to work from home they also have to secure that infrastructure so that means the cyber cyber security is seeing a little bit of momentum now let's take a look at the EGR data this is from more than a thousand CIOs and IT buyers it's fresh data right from March 40% of the survey said they see no current impact on their IT budget that is surprisingly high and look at all the green to the right-hand side you know most are showing five to ten percent increase but more than 20% of the respondents are actually expecting to increase budget in 2020 for things like work from home infrastructure let's take a listen to saga kadia who explains this further roll the clip yeah I think that's I think the the positive spent or the no change in spend I think that is what a lot of the market right now is missing and I haven't seen a lot of research on that because no one else has really been able to quantify how budgets are changing and so as you noted we're actually seeing people accelerate spend because of Kovan 19 and the reason is you know they're trying to avoid a catastrophe in productivity they are ramping up all this work from home infrastructure right not just collaboration tools virtualization infrastructure increasing VPN networking bandwidth mobile devices laptops security desktop support right you're a fortune 500 organization and you have 40 50 60 thousand employees working from home all the sudden you have to be able to support those employees and as a result you're actually seeing a large number of organizations accelerating spend and even the ones that are being hurt by the broken supply chains the demand coming down you're seeing some of their spendy seller ation being offset by spending a little bit more kind of what we're calling this kind of work from home infrastructure so sada went on to explain that consensus consensus expectations for global IT spend they were roughly at four percent before coronavirus and the pullback takes us now to flat or zero percent but what's not been reported is really the offset to the declines particularly from the work from home infrastructure now obviously this could all change in a likely will but this next chart really underscores that uncertainty and really the dynamic nature of the risk here what this track charts is the daily impact of the expected retraction so earlier this month in the et our survey you saw about a two percent retraction and exceed by March seventeenth it's down to flat so as we heard from Sagar the et our thesis is currently at 0% IT spend for growth in 2020 because of some of the offset now if the news continues to worsen the outlook is going to follow alright I want to wrap up by summarizing and and talking about what what's next and what you can expect so the current call as I said is for flat IT spend in 2020 it would be worse if not for the uptick in work from home and corollaries security infrastructure now it's not just collaboration and video tools it's virtualization solutions it's VPNs network upgrades mobile devices laptops and and the software to to secure all this stuff and make it work now despite the work from home offset we fully expect this picture or worsen over the next three months you got a watch for the duration of the the remote work at home mandates the travel bans the the no meeting policies there's a little doubt that productivity is going to be heard as we discussed yesterday with Sagar you can't just flick a switch and scale remote worker productivity you know that's a real challenge now having said that the expectation from CIOs is that this spending decline is going to be temporary what's unclear is the shape of the recovery is it going to be a v-shaped or a slow slog you can see the distant rim on the other side of the canyon it's there we just don't know how far away it is and we don't know how deep the canyon really is now there will be changes in our opinion that are going to be permanent as we said on a last braking analysis over the next several months organizations they're going to learn new things and that is going to shape their thinking in the future I personally expect accelerated digital transformations and a sustained viability of the work from home options you're gonna see new capabilities from distant learning with all the college shutdowns you're also going to see new risk mitigation paradigms you know the list goes on and on and on in terms of what we're going to see here as I said earlier there seemed to be some environmental benefits you know if you're looking for some positives here I think this next generation is much more in tune with that and you have my word and my promise and our team's promise that the cube and ETR is going to be here to keep you up to date et our survey data keeps rolling in you can check that out at ETR dot plus they are vigilant on this issue as are we from our remote studios look this is the new normal our skeleton crews are in studio and we're keeping the content flowing as many folks on our team they're working from home and they're on the grid currently our Palo Alto studio is fully operational four days a week each week and we're capturing remote guests on camera and Boston is open as well so get in touch if you need anything we are here to help and we're here to serve you okay this is Dave Villante for wiki bones cube insights powered by ETR thanks for watching this breaking analysis remember these episodes they're available on podcasts wherever you listen please connect with me emails David Galante at Silicon angle dot-com comment on my LinkedIn post I always appreciate that from the community thanks for watching everybody wishing good health and safety for you and your families we'll see you next time [Music]

>> Announcer: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. >> Hello everybody, welcome to this special CUBE Conversation. You know, as the COVID-19 pandemic grips the world, our friends at Enterprise Technology Research have been hard at work to really try to understand and quantify the impact on IT spending, and with me is Sagar Kadakia, who is the director of research at ETR. Sagar, great to see you again, thanks for coming on. >> Great to see you too, Dave, yeah, great to see you, Dave, thank you so much for having me on. >> So you guys just dropped your first look at the latest survey, and you specifically went out and asked about the impact of coronavirus on spending. Can you share with our audience your working thesis? >> Yeah, no problem. And just to give some context, there was so much internal interest, so much interest from clients, not to just understand how many organizations were being impacted, but what are going to be the budget impacts on 2020, when you think about IT, and so that's really how we structured the drill down, that, and really getting to the bottom of why are these budgets changing. And so our thesis right now and what we're seeing based on the data is that budgets have come down to about 0% or flat, for 2020. I think coming into the year, Incentis was right around 4%, so you've seen a retraction from that, and if the environment continues to go south, if we continue to see actions taken at the federal and state level, where more people are going to be quarantined, working from home, I think technology spend will inevitably continue to come down. But there is some positives that we are seeing, but right now we're right around 0%. >> And we should explain, so this is, currently a little over 1000 respondents, and you'll continue to collect data for the next several days, or even weeks, correct? >> That's right, exactly, so we launched a survey on Wednesday, and right now we've got about 1100 CIOs, IT executives, it's a really global sample, the goal was, across different job titles, across different regions, across different verticals, ones that are being impacted significantly, ones that are being impacted less. Let's try to gauge overall what's going on, with IT budgets, and why people are making the decisions they are making right now. And so that was really the focus of this study. >> Okay, so there's obviously some negatives in the data, and there's a high degree of uncertainty, but there are some bright spots that we see, particularly the shift to work from home, and I want to ask you about a chart that you guys put out. It showed a large portion of the survey, about 40% of the respondents, indicated really no impact to spending, and another, 20% are actually accelerating their spend, as a result of COVID-19, can you add some color to that? >> Yeah, I think the positive spend, or the no change in spend, I think that is what a lot of the market right now is missing, and I haven't seen a lot of research on that, 'cause no one else has really been able to quantify how budgets are changing, and so, as you noted, we're actually seeing people accelerate spend because of COVID-19, and the reason is, they're trying to avoid a catastrophe in productivity. They are ramping up all this work from home infrastructure, not just collaboration tools, virtualization infrastructure, increasing VPN networking bandwidth, mobile devices, laptops, security, desktop support, right? You're a Fortune 500 organization, and you have 40, 50, 60,000 employees working from home all of a sudden, you have to be able to support those employees, and as a result, you're actually seeing a large number of organizations accelerating spend, and even the ones that are being hurt by the broken supply chains, the demand coming down, they're seeing some of their spend acceleration being offset by spending a little bit more on what we're calling this work from home infrastructure. >> Yeah, so in the chart you put out, there's a lot of red, but there's also quite a bit of green, and then a big midpoint of no change. The midpoint average is a negative 3.8%, can you explain what that means, how we should interpret that? >> Yeah, I think the easiest way I think about it is, consensus expectations coming into the year were that there was going to be a growth of roughly 4% in global IT spend. What we're seeing at the midpoint average right now is roughly a 4% pullback, and so that's how we're getting back to effectively flat, or 0% growth, and I think a lot of organizations, a lot of clients that we've been talking to, their expectations were, it was going to be a lot worse, just if you're following what's going on in the news, the markets and stuff like that, and rightfully so. But I think a lot of people are missing the fact that there is some of this offset that is occurring from people who are not changing their spend, because even though on one side they are reducing IT budgets, and they're having to accelerate their work from home infrastructure, and of course, the bucket of organizations where, "Look, I'm not being as impacted "by the broken supply chains or the demand, "but because I have so many employees working from home, "I need to be able to allow them to be productive." >> Sagar, you know, we've been working with ETR now for the better part of six or seven months, and what I look for in the data is I try to identify some of the macro trends that I see when we talk to theCUBE guests, and try to see if your data confirms that, and the other data point you put out was anticipated IT budget growth rate, and this chart to me was amazing, because it started in early to mid March, early March 12th, sort of the starting point, and then you can see the sentiment that just declines, to almost exactly the way in which, just daily, you saw coronavirus news just really impact the markets, and so, can you just explain what you're seeing here in terms of the growth rate of that IT spend, in terms of how people were responding, over the course of March? >> Yeah, one of the things we knew going into, before we launched this drill down was, this is going to be a very dynamic environment. Even before we launched the study last Wednesday, every single day another shoe is dropping in terms of government actions being taken, what people were doing, and so we made the decision up front that when we launch this drill down, we need to be able to track the daily impact over the next three to four weeks, because we don't frankly know how it's going to change, and so in that chart, what you're seeing is, when we launched the survey just last Wednesday, you did see a little bit of a retraction, I think maybe five or 600 CIOs had taken just in the first day or so, you saw about a 2% retraction in annual budget growth, and just over a few days, by last Thursday, Friday, where they really, everyone was working from home, they put a lot of different mandates in place, again, at the state and federal level. You can see that was dropping almost daily, and so I think our thesis again is, right now we're at 0%, and again, some of that, the reason we're not more negative is because there is some offset occurring from the rampant work from home infrastructure, but ultimately if the environment continues to sour, we expect growth rates to continue coming down, and ultimately to be a decline in spend versus last year. >> And you made the point that is somewhat counterintuitive, but like you said before, I've not seen any other research on this, certainly not as fresh as the ETR data, the other thing that I really like about your data set is that you can drill into the industries and try to identify what's going on within sectors, within industries, certainly you can drill down with the specific vendors within those industries, but what are you seeing in terms of industries that are being affected, obviously those that are exposed to the supply chain are susceptible, but can you share with our audience what your findings are there? >> Yeah, industrials, materials, manufacturing, retail, consumer, healthcare, pharma, those are the verticals from a supply chain perspective that are indicating elevated levels of broken supply chains, and what's actually interesting is we, in this survey we actually asked, not only whether your supply chains were broken today, but do you anticipate continuing experiencing broken supply chains in three months from now, and those percentages were up, and I think that really tells us that this is not a one or two month type of recovery, we're going to see supply chains and demand continuing to be broken, continuing to come down over the next three, four months, that, I think, is probably one of the biggest takeaways from the drill down study. >> Now, one of the things that struck me, and if you think about the post-9/11 world, we've seen permanent changes as a result of 9/11, and many people are thinking that COVID-19 will also cause some permanent changes. Perhaps people find that work from home actually drives some additional benefits, and it really reframes their thinking. Do you have any thoughts on that? >> I think based on the data that we're seeing so far, a lot of CIOs did indicate, I think it was right around 70% of the 1000 CIOs that took the survey, did indicate that the budget changes that they indicated were going to be temporary, and I think that's actually a pretty positive takeaway. Again, I think everything is very dynamic right now. Organizations are scaling their work from home infrastructure, that is priority number one, that's taking away from other IT projects, so we do expect emerging and next-generation vendors to get impacted, we're moving towards a keep the lights on strategy right now. And so when we look at it, I think, the changes that are being made are temporary, but if things continue to worsen, I think you may see organizations start going into those contingency plans and making some of these budget reductions permanent, so yes, there are some parallels to 9/11, but this one, we don't quite know how things are going to end up, because every week, we find something different out in the news, we don't really know how this virus is going to impact us moving forward, and there's a lot of lack of testing and things of that nature, so I think in the next few weeks, we should get a better idea of whether or not these budget reductions are going to become permanent, more so than we're seeing right now. >> Yeah, I think you're right, I mean there is, the watch word is uncertainty, which makes it all that much more important that you keep a pulse on the market, and thank goodness you guys are doing that. I'm interested in, if you have any data on the focus on productivity, how organizations are finding their ability to adapt, and really of course they want to drive that productivity, but are they able to scale it? >> I think that's one of the other big issues that the media hasn't addressed yet. Imagine again, you're a Fortune 100, Fortune 500 organization, you're not used to having 50, 60, 100,000 employees working from home. Forget the infrastructure component, just the productivity, the collaboration, a lot of the commentary that we got from CIOs was, "We're not ready to scale an entire workforce from home." You're seeing a lot of IT companies that rely on very large conferences to generate revenue, that rely on client meetings to generate revenue. You're seeing a lot of business trips getting canceled, I think something around 70 or 80% of organizations, out of 1000 indicated that they are canceling business trips, so the productivity is coming down, because organizations are just not capable, many of them, of scaling a work from home type of infrastructure. And so, you are going to see productivity come down, and I think that probably has the most relevant impact when you think about GDP growth, right? Organizations are coming forward and saying "We're not going to be able to produce or service as much, "and we're not going to be able to prospect, "or maintain client relationships as much, "because of travel." And so I think those are going to be some of the bigger impacts that we end up seeing. Some business can work from home, and look, if you're in manufacturing, or you have employees that work on a rig, there's no work from home option for that, and so, I think in the next few months we are going to start seeing some of the declines on those ends. >> You noted in your analysis that things would likely worsen over the next three months, that's not surprising. Financial experts, we're seeing a variety of scenarios, some are saying it's a self-fulfilling recession, and others are actually calling for V-shaped recovery, but nobody really knows, and so just to make sure we understand ETR's thinking, you're calling right now for 0% IT budget growth this year, declines offset by some of the investment in work from home, that's kind of the summary on the outlook today, and we know that can change. >> That's right, and I think it's important to state the work from home infrastructure, it is not a one for one offset on IT budget declines. That rate is definitely going down faster, which is why we went from 4% to what we're forecasting now at 0%. If things continue to worsen, which based on the data that we collected, the next three months, we don't see a recovery in the next three months, because more organizations indicated, more broken supply chains, less demand on the consumer or the business side, and so it's tough to say what's going to happen six to 12 months from now, but at the very least, we do know for the next three months, things are going to continue worsening, and if we continue taking very strict actions just across the board, we would expect that 0% number to go into a decline, and so that's really what we're looking for now, is because this model is dynamic, because we do continue, we do want to continue polling individuals for the next four to six to eight weeks, as to how their budgets are changing, we should have a better idea, 'cause I think right now, everyone's watching, are we going back to work in the next week or two, or are we working from home, and the longer we are quarantined, the less meetings, the less that we're getting on flights, the more that's going to add to technology spend coming down, and eventually, as I mentioned earlier, organizations, they're going to go into contingency plans, those temporary changes that they're making right now, those are going to become permanent changes, because now they're going to have issues where they're just not generating enough revenue because of productivity, there's a downturn, layoffs, and then you kind of see everything spiral out of control. >> I meant to ask you, when you talked about infrastructure, and we were talking about work from home, cybersecurity was another area that is showing some momentum, is that because people are trying to adjust their work from home infrastructure and secure that? >> That's exactly it. You're an organization, let's say again, same example, Fortune 100, Fortune 500 organization. The number of endpoints you now have, all these employees are accessing data, emails, applications from home, mobile devices, laptops, right? iPads, things that they may have not used historically, and so yes, organizations are more exposed, and I think a lot of organizations are worried about employees working from home, just from a security perspective, so you are going to see, and we're already seeing this in the data as we're looking at some individual companies and things of that nature, endpoints, access points, those areas are critical, and you are going to see more spend in those areas, no question. >> So let's share with our audience what they can expect in the coming weeks and months, so folks, just so you understand, so ETR has a dataset based on a panel of about 4500 CIOs and IT buyers, about 1000, more than 1000 every quarter answer, ETR, very consistent survey, so you can do time series analysis, and what happens is, ETR clients get access to the data, early access, and then ETR drops a webcast, each quarter, where it updates its clients on the results. So where are we at in that process, you guys go into a self-imposed quiet period, and then you release to the markets, can you explain that a little bit, and what we can expect over the next couple of weeks. >> Yeah, sure, so we launched a survey last Wednesday, we're already at about 1100 CIOs and IT executives. Now it's interesting, we're actually doing this COVID drill down, as well as our technology spending intention survey. That survey captures spending intent on about 350 vendors across about 28 or 29 different technology sectors, so security, networking, storage. So, all that data is coming through, in the next few days we're actually going to release what we call thoughts in the field. It's kind of short narratives, think like a sentence or two, on each vendor, how they're trending, and what we're doing uniquely this time is stating which vendors are being impacted the most positively and negatively, by COVID-19, and so expect that in the next few days, and then around, probably around April first or so, we will close the survey, again, we're expecting like you said 13, 14, 1500 CIOs, IT executives globally, to take the survey. We'll really go into the trenches at that point, the entire team, we'll spend a solid week going through all the data, and then mid-April, before companies, or a large number of companies start reporting on the IT side, we will release a large amount of research, we'll have some final COVID takeaways, though that will continue being dynamic for the next three to six months, but at least we'll try to take a balance sheet type of look at it and say "Look, here's where we are, "here's where the impact is, whether we're at a decline "or growth or whatever it is," so we'll have a better picture in a few weeks on that as well, and then we'll really be able to dive into the sectors and vendors that we think are best positioned for the rest of 2020. >> Yeah, we're barely scratching the surface here, as I said, this is a first look. So check out, it's ETR.plus is where you can get updates on what's going on here, and we'll obviously keep you updated as well, Sagar, thanks so much for coming on theCUBE and sharing this very important information. >> Yeah, thanks Dave, I really appreciate having me on. >> All right, stay safe my friend, we'll talk to you, and thank you for watching everybody. This is Dave Vellante for theCUBE, and we will see you next time. (calm music)

>> Narrator: From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now here's your host, Dave Vellante. >> Hello, everyone and welcome to this week's episode of theCUBE InsightsPpowered by ETR. In this Breaking Analysis, I want to do some explanation. For the past four months, I've been sharing data from a company called Enterprise Technology Research, ETR. I've worked with the SiliconANGLE team to create a pure editorial product that blends the ETR dataset with insights that we've gleaned from theCUBE. We've been getting great engagement and I've been getting some questions that I wanted to address in today's episode. Let me first say that as a long time industry analyst, I've always valued data-based opinions, so when I met the folks at ETR, I became really intrigued and I thought working with them might be a good way to share some really awesome survey data and then blend it with context from theCUBE's huge observation space where we do, you know, 100 shows per year. Today I want to cover six things. The first thing I want to do is answer the question that I get most often which is who the heck are these guys? And I think it's really important to understand how and where ETR gets its data so I want to spend a little time on their methodology and dig into that a bit. And then next, I want to talk about this thing called net score. I refer to net score all the time. It's one of my favorite metrics and I'll show some examples and explain what it means and how I use it and I'll use real and current data on containers, VMware, I got some data on Oracle, AWS and HPE who just announced its earning. So there's actually content in this episode. It's not just a tutorial so stick with me here. And then I want to talk about the term market share and what that means in the parlance of ETR. I'm often asked what is the relationship between ETR and theCUBE so I obviously want to address that and if that doesn't answer all your questions, I can give you some ways to get more information. So first, who is ETR? Well ETR is a research company. Actually, it's a platform or a product that was built by a company called Aptiviti. The key advantage is they do primary market research, first party data, and they have a community of survey respondents that give them spending intentions data and they survey this base on a fairly regular basis. Currently, there are about 4,500 buyers in this survey base and in my experience, each quarter, about 1,000 or so respond to their requests for spending data. This group collectively represents nearly a trillion dollars in annual IT spending on enterprise tech and you can see here there's a nice mix of C-level execs, VPs, IT Management, but the respondents, they like to participate because those that do, well, they get access to the data in exchange for their information. Now there's no incentive for them to exaggerate their spending intentions. I mean it's not like, remember the old days of computer pubs where if you spend over a threshold, you get a free magazine? This is legit spending data, spending patterns that ETR vets with historical data. They also pay close attention to the income statements of public companies, attune their data and forecasts in a way that I'll address later and you can also see here that the data is global and it comprises a very strong mix of large organizations across virtually all industries and geographies. I mean it's North America heavy, but they've got representation all over the world and these guys have been at it for 10 years and they're serious data geeks. They have a team of stats folk, aka data scientists in today's terms who do some really cool things with the data like using regression analysis to compare their spending data with Wall Street consensus. Now they primarily, ETR serves Wall Street customers who are trying to gain an advantage, you know, ahead of earnings news coming out and they want to squint through the noise which is kind of what I'm trying to do here. ETR's founder, his name is Thomas Delvecchio and he's essentially created a survey panel on steroids. You know, when I worked at IDC, our Holy Grail was to create a panel and use it to track spending data. We never got there. It was too hard so what we did was we did spot surveys on hot topics like you know, data duplication last decade, to see where all the action was and then periodically, we do broader spending intention surveys. You know, but they weren't conducted on a formal quarterly cadence and what Delvecchio did is he flipped this model on its head. What I mean by that is ETR does regular quarterly broad-based spending surveys and then periodically, they drill down into the hot areas. The great thing about this model from my perspective is that you can run the analytics and do time series across the data. It's a way, way more powerful approach. Now there are other panels out there that you can tap into, but ETR's built a platform on top of what in my opinion is the best spending intentions data that I've ever seen and they've got a really nice SaaS product that allows me to cut the data by size of company, geography, market segment and I can answer questions like are containers killing VMware? And I can answer that question by slicing and dicing the data rather than having to field a completely separate survey. So what I want to do here is I want to take that example and drill into a key TR, key ETR metric that I use a lot which is called net score. Now net score represents the intensity of spend for a company. Higher net scores indicate a positive spend trajectory, and a lower net score indicates a flat or negative spend trajectory. So what I'm showing here is a cut from the ETR dataset and what I'm actually doing to answer that question that I just proposed, look at, so you see number one in the red, I'm filtering the ETR data by container platforms. So this is organizations that are spending on containers and you can see the number two there, the N is 541 organizations spending on containers and then number three, I cut the sample by VMware mentions. So out of the folks answering the survey for a given period, I want to isolate on those doing business with VMware and evaluate their spending. Notice number four, which is the net score. That's what I want you to focus on. Net score's a measure of spending momentum, as I said. So specifically for each ETR survey, ETR asks about spending. Are you adopting the platform as new? Are you spending more, spending the same or spending less? Or are you leaving the platform? And they essentially subtract the spending less from the spending more and calculate a net score and you can see in number five, the net score's over time and I superimpose these numbers with shared accounts that are mentioning VMware. Now remember, ETR allows for multiple responses of various VMware solutions so again, there are multiple responses in that shared end, but you can see that VMware's net score has hailed up around 33-34% over you know, a two-year period. So there's zero evidence that containers are hurting VMware today in this data. Now prior to 2018, by the way, I kind of ignore those spikes because the shared end is too low. It's like 12 mentions, but the rising number of shared accounts over time is yet another clear indicator of adoption between those container costumers and VMware spend. Now I can cut this by size of company, industry, a zillion different ways, but this is everyone in the dataset for the October survey. What I want to do now is take a look at what ETR calls market share. Market share in ETR language is a measure of pervasiveness. So they calculate this by taking the number of mentions of a vendor within a sector, they exclude replacements and they divide by the number of respondents within that sector. So what I'm showing here is an example using market share data for analytic databases. So focus on number one which takes the entire sample from the October survey and then number two and an N of 1,336 respondents. So we choose in number three, the data warehousing software segment and then select from the pull down AWS Redshift and compare that with Oracle within that sector. So you can see in the last two years that AWS has rapidly gained share. You can see in number four that the net scores where AWS has a way stronger spending momentum with 62% and negative 3% for Oracle. What I love about this dataset is the ease with which I can either call BS or validate a vendor's claim and get ahead of the market by combining the data that we collect on theCUBE and that we hear all the time with the ETR survey data. And remember, in last week's Breaking Analysis, I put up a view showing Snowflake which claims it continues to do well despite its apparent overlap with AWS Redshift and as you may recall, the ETR data clearly confirmed that Snowflake was thriving along with Redshift and eating away at Teradata's business. So it confirms their narrative. Let me share another example of how I use ETR market share. HPE just reported earnings yesterday and it missed its revenue targets and here's a chart that HPE presented as part of its earning package. Now at the highest level, HPE reports revenue across three major lines: intelligent edge, hybrid IT and financial services. Not picking on HPE, but you know, I can make this argument with pretty much any legacy computer company or any hardware company and now the narrative from these companies is we're investing in the new hot areas like edge and the world is hybrid and that's our opportunity and we are uniquely positioned and we see lots of repatriation from the cloud where people have moved to the cloud but have sort of cloud regrets and now are moving back to us. You hear this all the time from execs at these companies, but you sure don't see it in numbers. Look at the growth rate year over year in HPE's business. Edge and Hybrid IT are both shrinking in this example. Even when you adjust for currency and take out what HPE refers to as tier one sales to the big hyperscalers which is a business that HPE exited last year. Meanwhile, when you watch and you're looking at AWS and Azure numbers, they're growing at 35% for AWS, 59% year over year for Azure last quarter. Now the HPE narrative is we're focusing on margins and exiting low-value businesses and to be fair, that's true and it shows up in HPE's gross margins and operating profit and free cash flow. But I have an addition to the narrative: which is the cloud is eating away at that business and while repatriation most certainly happens, it's a figure that's not showing up on the income statement. So I look at the ETR data to answer the question how is the cloud impacting HPE's market share? So here's what I do. To answer that question, I filter the data, that I'm showing on this chart, and I select the cloud computing filter in the upper left from the pull down. I do a second filter right below, pulling down and selecting AWS, Azure and Google Cloud Platform. So there's 818 respondents in the ETR October survey that fit that criteria, cloud spenders, and then I click on the market share radio button and pull data in from January 2010 to the October '19 survey. In the October 2019 survey, you can see that the shared end shows 495 respondents that are also spending on HPE. So nearly 500 HPE responses within 800 cloud accounts. Look at the story. Like many, HPE came out of the downturn with a pent up demand. It announced the public cloud in 2011 which froze the market a little bit and by late 2014, the market clearly understood that that offering was a fail and HP exited the business in 2015 and you can see how the cloud is eating away at spending on HPE's products and you can see the net score of 10.9% in the red underscoring the headwinds that HPE is facing. Now of course, Antonio Neri, who's HP's CEO, he's doing what he has to do: cutting costs, focusing on higher margin opportunities, adopting an Azure service model, doing stock buy backs, but as I like to say, the data does not lie. Now where it really gets mind-blowing is when ETR runs regression models using Wall Street's estimates for a public company as an outcome variable and test that against the covariates and independent variables in its dataset. Now these act as predictors so not only using the data that tell the story of what happened in the past, but using it as a forecasting tool. Okay, so that's most of what I wanted to share with you today. There's a lot more, but let's leave it there for now. I want to address a relationship between theCUBE and ETR. We're essentially just friendlies. We currently have no commercial relationship. There's no money exchanging hands. There's no other incentives other than we're birds of a feather, so to speak. They give me access to their data and I use it weekly in these Breaking Analysis segments and we co-brand the content, theCUBE Insights Powered by ETR. So it's a beautiful fit between what we learn in theCUBE and this awesome dataset. Look, if you find this stuff useful, I encourage you, reach out to ETR. Their website is ETR.plus or just Google Enterprise Technology Research or you can hit me up on LinkedIn or Twitter. I'm @dvellante and I'd be happy to put you in touch. This is Dave Vellante signing out from this episode of Cube Insights Powered by ETR. Thanks for watching, everybody, and we'll see you next time. (upbeat music)

(upbeat music) >> From New York, it's the Cube covering escape nineteen. (upbeat music) >> Hello, welcome back to the cube coverage here in New York city for the first inaugural multi-cloud conference called escape 2019, I'm John Furrier host of the Cube, we're here with Natalie Gholmieh who's the data manager of data and integration services at the university of California, San Diego campus, office, >> sprawling data center, >> Yes (laughing) >> tons of IT, a lot of challenges. Welcome. >> Yeah, thank you for having me. >> So, thanks for taking the time out, you're a practitioner, you're here. Why are you at this conference, what are you hoping to gain from here? What interests you here at the multi-cloud escape conference. >> This conference is very much within the spirit of what we're trying to do. Uh- we- our CIO has directives which is, to avoid locking and to do multi-vendor orchestration um, an, uh, to go with containers first and open source wherever possible. So- and, I, this conference pretty much speaks to all of that. >> So, this is a really interesting data point because it seems the common thread is data and cloud is an integration thing so people are trying to find that integration point so they can have multiple vendors, multiple clouds. It seems like the multi-vendor were all back in the old days where you had multiple vendors, had a regimeous environment, data seems to be the lynch pin in all this. That's what you do- >> Right. >> How do you think about this because it used to be the big database ran the world, now you have lots of databases. You have applications, >> Right. >> they're everywhere now. >> Yeah, data is born in multiple systems but the data is also an asset right now, to all of the organizations including the university so, um, what we want to try to accomplish is to, uh, get all of this data possibly in one place or in multiple places and to be able to, to do analytics on top of this and this is what the value added processing over the data. >> What's exciting to you these days in the university? You guys try to change the business, what, what- it could be technology. What are the cool things that you like that you're working with right now or that you envision emerging? >> Yeah, so my team is currently building a platform to do an integrat- um, all of the data integration and we are planning to offer, this platform as a service to Developers to streamline and standardize, application development as well as integration development within the central IT of university. So this is pretty much the most exciting thing that we're doing is putting together this platform that is quite complex It is a journey that we're taking Together with the people who are already operating existing systems, and so we are putting this new thing that we're operating in parallel and we will be migrating to that new platform over time. >> I'm sure containers are involved >> Troupernetties >> Yes >> To be part of it >> Mhm, Mhm, yeah so the platform has two parts There is the application, publishing with Gooddoctrine troupernetties And we have also the streaming side of it Where to build the data pipeline with open source tools like ApacheNinefive and Apache kafka. So um yes So this is going to be wiring the data pipelines from source to target and moving the data in real time In order to- >> And you see that as a nice way to keep uh an option to move from cloud to cloud >> Potentially since the platforms role is to decouple the infrastructure from devolepment that way you could spin a portion of the platform on any cloud pretty much and run your workload. Anywhere you want. >> So classic Dev ops, Separate infrustracture as code provide a codified layer >> Yeah, Yeah >> So let me ask you a question, How did you get into all this data business? I mean what attracted you to the data field? What's your story? Tell us your story. >> Ah, so the data, you know, I personally started I mean I was I had more of a networking background and then I became a sys Admin and then I got into the business of logging and log aggregation for machine data And then I was you know using that Data to create Dashboards of system health and you know data correlation and this is what exposed me, personally, first to the data world. And then I saw the value in, in doing all of this With data and the value is even more impactful to the business, when you're working with actual business data. And then Right so I'm very excited about that. >> So you were swimming in the first data lake before data lakes were data lakes. >> Yeah, right, for machine data >> And once you're in there you see value Data exhaust comes in as we used to say back in the day. During the Hedupe days. Data exhaust. So now that you're doing the business value is the conversations the same, or are they different conversations? Or is it still the same kind of data conversation? What's, or is the, job the same? Because you still have machine data applications are throwing off data. >> Right >> You have infrastructure data being thrown off You have new abstrac-New software layers >> Yes >> Is it the same or is it different? Describe the current situation. >> Eh, you know, maybe the concepts are the same Uh, but I think the, the logging machine data has more value to IT to give incites on how to improve your, uh SLA's and your you know within the scope of IT. But the business data really will impact the business, the whole entire University for us. So, One of the things we're doing on the business side with the business data is to provide some analytics on students um, the student data in order to um, increase their chances for success so getting all of that data. Doing some reports and pattern analytics. And then yeah, and then coaching students. >> Not a bad place to live in San Diego. >> Oh It's excellent >> Isn't it, the weather's always perfect >> Oh yeah. >> The marine layers not as bad L.A. you know, or is it? >> Yeah we do have a good. University- >> The marine layer. >> University is right on the coast. So yeah, sometimes its gloomy the whole entire day. = [John] Yeah, I love it there I wish I could have gone to school at the university of San Diego >> It is great, It's a great place to be >> Love to go see my friends at Lajolla Del mar. >> Yeah >> Beautiful areas, >> Yup >> Great country. Well thank you for coming on, and sharing your insights into multi-cloudism and that thinking. It seems you're very foundational right now. In this whole thinking there's no master plan yet. People are really having good conversations around how to set it all up. >> Yup >> The architecture, >> Right >> The role, >> Yup >> You see the same thing? >> Yes architecture is actually a very essential piece of it because you need to plan before you go if you go without planning I think your bill is going be Up the roof, so it yeah >> So you'll sink in the quicksand of the data lake And get sucked into the data swamp >> Yeah, Right, yeah so, architecture is a big piece of it Design, and then build and then continuous improvement That's a huge thing at UC of San Diego >> You know what I get excited about, Is I get excited about real time, how real time, time series data is becoming a big part of the application development and understanding the context between good data and bad data, is always a hard problem a hard tech problem6. >> Yeah that is true, yeah their are a lot of processes that, uh should be set around the data to make sure that data is clean, and it's, a good data set and all that >> If data's an asset then does it have a value? Does it have a balance sheet? Should we value the data? Is some data more valuable then others? That's a good question, huh >> That is a good question, but I don't know the answer to that. >> No one knows it's like we always ask the question I think that's going to, I think that's a future state where at some point data can be recognized but right now it's hard to tell what's valuable or not. >> I think the value is in the return services And the value added services, that you As an organization, can bring to your customer base. This is where the value is and if you want to put a dollar amount on that, eheh, I don't know It's not my job >> And of course multiden here, Multi-clouds All have it and of course thank you so much for coming on Special time conversation. Keep conversation here theCube coverage. Of the first inaugural multi-cloud conference call to escape nineteen. Where the industry best are coming together practitioners, entrepenures, founders, executives and thought leaders, talking about what multi-cloud really can be and foundationally what it needs to be in place and this is what happens here at these conferences Tons of hallway conversations Natalie thank you for spending the time. Cube coverage. I'm John Furrier, thanks for watching. (simple upbeat music)