(upbeat music beginning) >> From the Cube Studios in Palo Alto and Boston, bringing you data-driven insights from the Cube and ETR, this is "Breaking Analysis" with Dave Vellante. >> Making predictions about the future of enterprise tech is more challenging if you strive to lay down forecasts that are measurable. In other words, if you make a prediction, you should be able to look back a year later and say, with some degree of certainty, whether the prediction came true or not, with evidence to back that up. Hello and welcome to this week's Wikibon Cube Insights, powered by ETR. In this breaking analysis, we aim to do just that, with predictions about the macro IT spending environment, cost optimization, security, lots to talk about there, generative AI, cloud, and of course supercloud, blockchain adoption, data platforms, including commentary on Databricks, snowflake, and other key players, automation, events, and we may even have some bonus predictions around quantum computing, and perhaps some other areas. To make all this happen, we welcome back, for the third year in a row, my colleague and friend Eric Bradley from ETR. Eric, thanks for all you do for the community, and thanks for being part of this program. Again. >> I wouldn't miss it for the world. I always enjoy this one. Dave, good to see you. >> Yeah, so let me bring up this next slide and show you, actually come back to me if you would. I got to show the audience this. These are the inbounds that we got from PR firms starting in October around predictions. They know we do prediction posts. And so they'll send literally thousands and thousands of predictions from hundreds of experts in the industry, technologists, consultants, et cetera. And if you bring up the slide I can show you sort of the pattern that developed here. 40% of these thousands of predictions were from cyber. You had AI and data. If you combine those, it's still not close to cyber. Cost optimization was a big thing. Of course, cloud, some on DevOps, and software. Digital... Digital transformation got, you know, some lip service and SaaS. And then there was other, it's kind of around 2%. So quite remarkable, when you think about the focus on cyber, Eric. >> Yeah, there's two reasons why I think it makes sense, though. One, the cybersecurity companies have a lot of cash, so therefore the PR firms might be working a little bit harder for them than some of their other clients. (laughs) And then secondly, as you know, for multiple years now, when we do our macro survey, we ask, "What's your number one spending priority?" And again, it's security. It just isn't going anywhere. It just stays at the top. So I'm actually not that surprised by that little pie chart there, but I was shocked that SaaS was only 5%. You know, going back 10 years ago, that would've been the only thing anyone was talking about. >> Yeah. So true. All right, let's get into it. First prediction, we always start with kind of tech spending. Number one is tech spending increases between four and 5%. ETR has currently got it at 4.6% coming into 2023. This has been a consistently downward trend all year. We started, you know, much, much higher as we've been reporting. Bottom line is the fed is still in control. They're going to ease up on tightening, is the expectation, they're going to shoot for a soft landing. But you know, my feeling is this slingshot economy is going to continue, and it's going to continue to confound, whether it's supply chains or spending. The, the interesting thing about the ETR data, Eric, and I want you to comment on this, the largest companies are the most aggressive to cut. They're laying off, smaller firms are spending faster. They're actually growing at a much larger, faster rate as are companies in EMEA. And that's a surprise. That's outpacing the US and APAC. Chime in on this, Eric. >> Yeah, I was surprised on all of that. First on the higher level spending, we are definitely seeing it coming down, but the interesting thing here is headlines are making it worse. The huge research shop recently said 0% growth. We're coming in at 4.6%. And just so everyone knows, this is not us guessing, we asked 1,525 IT decision-makers what their budget growth will be, and they came in at 4.6%. Now there's a huge disparity, as you mentioned. The Fortune 500, global 2000, barely at 2% growth, but small, it's at 7%. So we're at a situation right now where the smaller companies are still playing a little bit of catch up on digital transformation, and they're spending money. The largest companies that have the most to lose from a recession are being more trepidatious, obviously. So they're playing a "Wait and see." And I hope we don't talk ourselves into a recession. Certainly the headlines and some of their research shops are helping it along. But another interesting comment here is, you know, energy and utilities used to be called an orphan and widow stock group, right? They are spending more than anyone, more than financials insurance, more than retail consumer. So right now it's being driven by mid, small, and energy and utilities. They're all spending like gangbusters, like nothing's happening. And it's the rest of everyone else that's being very cautious. >> Yeah, so very unpredictable right now. All right, let's go to number two. Cost optimization remains a major theme in 2023. We've been reporting on this. You've, we've shown a chart here. What's the primary method that your organization plans to use? You asked this question of those individuals that cited that they were going to reduce their spend and- >> Mhm. >> consolidating redundant vendors, you know, still leads the way, you know, far behind, cloud optimization is second, but it, but cloud continues to outpace legacy on-prem spending, no doubt. Somebody, it was, the guy's name was Alexander Feiglstorfer from Storyblok, sent in a prediction, said "All in one becomes extinct." Now, generally I would say I disagree with that because, you know, as we know over the years, suites tend to win out over, you know, individual, you know, point products. But I think what's going to happen is all in one is going to remain the norm for these larger companies that are cutting back. They want to consolidate redundant vendors, and the smaller companies are going to stick with that best of breed and be more aggressive and try to compete more effectively. What's your take on that? >> Yeah, I'm seeing much more consolidation in vendors, but also consolidation in functionality. We're seeing people building out new functionality, whether it's, we're going to talk about this later, so I don't want to steal too much of our thunder right now, but data and security also, we're seeing a functionality creep. So I think there's further consolidation happening here. I think niche solutions are going to be less likely, and platform solutions are going to be more likely in a spending environment where you want to reduce your vendors. You want to have one bill to pay, not 10. Another thing on this slide, real quick if I can before I move on, is we had a bunch of people write in and some of the answer options that aren't on this graph but did get cited a lot, unfortunately, is the obvious reduction in staff, hiring freezes, and delaying hardware, were three of the top write-ins. And another one was offshore outsourcing. So in addition to what we're seeing here, there were a lot of write-in options, and I just thought it would be important to state that, but essentially the cost optimization is by and far the highest one, and it's growing. So it's actually increased in our citations over the last year. >> And yeah, specifically consolidating redundant vendors. And so I actually thank you for bringing that other up, 'cause I had asked you, Eric, is there any evidence that repatriation is going on and we don't see it in the numbers, we don't see it even in the other, there was, I think very little or no mention of cloud repatriation, even though it might be happening in this in a smattering. >> Not a single mention, not one single mention. I went through it for you. Yep. Not one write-in. >> All right, let's move on. Number three, security leads M&A in 2023. Now you might say, "Oh, well that's a layup," but let me set this up Eric, because I didn't really do a great job with the slide. I hid the, what you've done, because you basically took, this is from the emerging technology survey with 1,181 responses from November. And what we did is we took Palo Alto and looked at the overlap in Palo Alto Networks accounts with these vendors that were showing on this chart. And Eric, I'm going to ask you to explain why we put a circle around OneTrust, but let me just set it up, and then have you comment on the slide and take, give us more detail. We're seeing private company valuations are off, you know, 10 to 40%. We saw a sneak, do a down round, but pretty good actually only down 12%. We've seen much higher down rounds. Palo Alto Networks we think is going to get busy. Again, they're an inquisitive company, they've been sort of quiet lately, and we think CrowdStrike, Cisco, Microsoft, Zscaler, we're predicting all of those will make some acquisitions and we're thinking that the targets are somewhere in this mess of security taxonomy. Other thing we're predicting AI meets cyber big time in 2023, we're going to probably going to see some acquisitions of those companies that are leaning into AI. We've seen some of that with Palo Alto. And then, you know, your comment to me, Eric, was "The RSA conference is going to be insane, hopping mad, "crazy this April," (Eric laughing) but give us your take on this data, and why the red circle around OneTrust? Take us back to that slide if you would, Alex. >> Sure. There's a few things here. First, let me explain what we're looking at. So because we separate the public companies and the private companies into two separate surveys, this allows us the ability to cross-reference that data. So what we're doing here is in our public survey, the tesis, everyone who cited some spending with Palo Alto, meaning they're a Palo Alto customer, we then cross-reference that with the private tech companies. Who also are they spending with? So what you're seeing here is an overlap. These companies that we have circled are doing the best in Palo Alto's accounts. Now, Palo Alto went and bought Twistlock a few years ago, which this data slide predicted, to be quite honest. And so I don't know if they necessarily are going to go after Snyk. Snyk, sorry. They already have something in that space. What they do need, however, is more on the authentication space. So I'm looking at OneTrust, with a 45% overlap in their overall net sentiment. That is a company that's already existing in their accounts and could be very synergistic to them. BeyondTrust as well, authentication identity. This is something that Palo needs to do to move more down that zero trust path. Now why did I pick Palo first? Because usually they're very inquisitive. They've been a little quiet lately. Secondly, if you look at the backdrop in the markets, the IPO freeze isn't going to last forever. Sooner or later, the IPO markets are going to open up, and some of these private companies are going to tap into public equity. In the meantime, however, cash funding on the private side is drying up. If they need another round, they're not going to get it, and they're certainly not going to get it at the valuations they were getting. So we're seeing valuations maybe come down where they're a touch more attractive, and Palo knows this isn't going to last forever. Cisco knows that, CrowdStrike, Zscaler, all these companies that are trying to make a push to become that vendor that you're consolidating in, around, they have a chance now, they have a window where they need to go make some acquisitions. And that's why I believe leading up to RSA, we're going to see some movement. I think it's going to pretty, a really exciting time in security right now. >> Awesome. Thank you. Great explanation. All right, let's go on the next one. Number four is, it relates to security. Let's stay there. Zero trust moves from hype to reality in 2023. Now again, you might say, "Oh yeah, that's a layup." A lot of these inbounds that we got are very, you know, kind of self-serving, but we always try to put some meat in the bone. So first thing we do is we pull out some commentary from, Eric, your roundtable, your insights roundtable. And we have a CISO from a global hospitality firm says, "For me that's the highest priority." He's talking about zero trust because it's the best ROI, it's the most forward-looking, and it enables a lot of the business transformation activities that we want to do. CISOs tell me that they actually can drive forward transformation projects that have zero trust, and because they can accelerate them, because they don't have to go through the hurdle of, you know, getting, making sure that it's secure. Second comment, zero trust closes that last mile where once you're authenticated, they open up the resource to you in a zero trust way. That's a CISO of a, and a managing director of a cyber risk services enterprise. Your thoughts on this? >> I can be here all day, so I'm going to try to be quick on this one. This is not a fluff piece on this one. There's a couple of other reasons this is happening. One, the board finally gets it. Zero trust at first was just a marketing hype term. Now the board understands it, and that's why CISOs are able to push through it. And what they finally did was redefine what it means. Zero trust simply means moving away from hardware security, moving towards software-defined security, with authentication as its base. The board finally gets that, and now they understand that this is necessary and it's being moved forward. The other reason it's happening now is hybrid work is here to stay. We weren't really sure at first, large companies were still trying to push people back to the office, and it's going to happen. The pendulum will swing back, but hybrid work's not going anywhere. By basically on our own data, we're seeing that 69% of companies expect remote and hybrid to be permanent, with only 30% permanent in office. Zero trust works for a hybrid environment. So all of that is the reason why this is happening right now. And going back to our previous prediction, this is why we're picking Palo, this is why we're picking Zscaler to make these acquisitions. Palo Alto needs to be better on the authentication side, and so does Zscaler. They're both fantastic on zero trust network access, but they need the authentication software defined aspect, and that's why we think this is going to happen. One last thing, in that CISO round table, I also had somebody say, "Listen, Zscaler is incredible. "They're doing incredibly well pervading the enterprise, "but their pricing's getting a little high," and they actually think Palo Alto is well-suited to start taking some of that share, if Palo can make one move. >> Yeah, Palo Alto's consolidation story is very strong. Here's my question and challenge. Do you and me, so I'm always hardcore about, okay, you've got to have evidence. I want to look back at these things a year from now and say, "Did we get it right? Yes or no?" If we got it wrong, we'll tell you we got it wrong. So how are we going to measure this? I'd say a couple things, and you can chime in. One is just the number of vendors talking about it. That's, but the marketing always leads the reality. So the second part of that is we got to get evidence from the buying community. Can you help us with that? >> (laughs) Luckily, that's what I do. I have a data company that asks thousands of IT decision-makers what they're adopting and what they're increasing spend on, as well as what they're decreasing spend on and what they're replacing. So I have snapshots in time over the last 11 years where I can go ahead and compare and contrast whether this adoption is happening or not. So come back to me in 12 months and I'll let you know. >> Now, you know, I will. Okay, let's bring up the next one. Number five, generative AI hits where the Metaverse missed. Of course everybody's talking about ChatGPT, we just wrote last week in a breaking analysis with John Furrier and Sarjeet Joha our take on that. We think 2023 does mark a pivot point as natural language processing really infiltrates enterprise tech just as Amazon turned the data center into an API. We think going forward, you're going to be interacting with technology through natural language, through English commands or other, you know, foreign language commands, and investors are lining up, all the VCs are getting excited about creating something competitive to ChatGPT, according to (indistinct) a hundred million dollars gets you a seat at the table, gets you into the game. (laughing) That's before you have to start doing promotion. But he thinks that's what it takes to actually create a clone or something equivalent. We've seen stuff from, you know, the head of Facebook's, you know, AI saying, "Oh, it's really not that sophisticated, ChatGPT, "it's kind of like IBM Watson, it's great engineering, "but you know, we've got more advanced technology." We know Google's working on some really interesting stuff. But here's the thing. ETR just launched this survey for the February survey. It's in the field now. We circle open AI in this category. They weren't even in the survey, Eric, last quarter. So 52% of the ETR survey respondents indicated a positive sentiment toward open AI. I added up all the sort of different bars, we could double click on that. And then I got this inbound from Scott Stevenson of Deep Graham. He said "AI is recession-proof." I don't know if that's the case, but it's a good quote. So bring this back up and take us through this. Explain this chart for us, if you would. >> First of all, I like Scott's quote better than the Facebook one. I think that's some sour grapes. Meta just spent an insane amount of money on the Metaverse and that's a dud. Microsoft just spent money on open AI and it is hot, undoubtedly hot. We've only been in the field with our current ETS survey for a week. So my caveat is it's preliminary data, but I don't care if it's preliminary data. (laughing) We're getting a sneak peek here at what is the number one net sentiment and mindshare leader in the entire machine-learning AI sector within a week. It's beating Data- >> 600. 600 in. >> It's beating Databricks. And we all know Databricks is a huge established enterprise company, not only in machine-learning AI, but it's in the top 10 in the entire survey. We have over 400 vendors in this survey. It's number eight overall, already. In a week. This is not hype. This is real. And I could go on the NLP stuff for a while. Not only here are we seeing it in open AI and machine-learning and AI, but we're seeing NLP in security. It's huge in email security. It's completely transforming that area. It's one of the reasons I thought Palo might take Abnormal out. They're doing such a great job with NLP in this email side, and also in the data prep tools. NLP is going to take out data prep tools. If we have time, I'll discuss that later. But yeah, this is, to me this is a no-brainer, and we're already seeing it in the data. >> Yeah, John Furrier called, you know, the ChatGPT introduction. He said it reminded him of the Netscape moment, when we all first saw Netscape Navigator and went, "Wow, it really could be transformative." All right, number six, the cloud expands to supercloud as edge computing accelerates and CloudFlare is a big winner in 2023. We've reported obviously on cloud, multi-cloud, supercloud and CloudFlare, basically saying what multi-cloud should have been. We pulled this quote from Atif Kahn, who is the founder and CTO of Alkira, thanks, one of the inbounds, thank you. "In 2023, highly distributed IT environments "will become more the norm "as organizations increasingly deploy hybrid cloud, "multi-cloud and edge settings..." Eric, from one of your round tables, "If my sources from edge computing are coming "from the cloud, that means I have my workloads "running in the cloud. "There is no one better than CloudFlare," That's a senior director of IT architecture at a huge financial firm. And then your analysis shows CloudFlare really growing in pervasion, that sort of market presence in the dataset, dramatically, to near 20%, leading, I think you had told me that they're even ahead of Google Cloud in terms of momentum right now. >> That was probably the biggest shock to me in our January 2023 tesis, which covers the public companies in the cloud computing sector. CloudFlare has now overtaken GCP in overall spending, and I was shocked by that. It's already extremely pervasive in networking, of course, for the edge networking side, and also in security. This is the number one leader in SaaSi, web access firewall, DDoS, bot protection, by your definition of supercloud, which we just did a couple of weeks ago, and I really enjoyed that by the way Dave, I think CloudFlare is the one that fits your definition best, because it's bringing all of these aspects together, and most importantly, it's cloud agnostic. It does not need to rely on Azure or AWS to do this. It has its own cloud. So I just think it's, when we look at your definition of supercloud, CloudFlare is the poster child. >> You know, what's interesting about that too, is a lot of people are poo-pooing CloudFlare, "Ah, it's, you know, really kind of not that sophisticated." "You don't have as many tools," but to your point, you're can have those tools in the cloud, Cloudflare's doing serverless on steroids, trying to keep things really simple, doing a phenomenal job at, you know, various locations around the world. And they're definitely one to watch. Somebody put them on my radar (laughing) a while ago and said, "Dave, you got to do a breaking analysis on CloudFlare." And so I want to thank that person. I can't really name them, 'cause they work inside of a giant hyperscaler. But- (Eric laughing) (Dave chuckling) >> Real quickly, if I can from a competitive perspective too, who else is there? They've already taken share from Akamai, and Fastly is their really only other direct comp, and they're not there. And these guys are in poll position and they're the only game in town right now. I just, I don't see it slowing down. >> I thought one of your comments from your roundtable I was reading, one of the folks said, you know, CloudFlare, if my workloads are in the cloud, they are, you know, dominant, they said not as strong with on-prem. And so Akamai is doing better there. I'm like, "Okay, where would you want to be?" (laughing) >> Yeah, which one of those two would you rather be? >> Right? Anyway, all right, let's move on. Number seven, blockchain continues to look for a home in the enterprise, but devs will slowly begin to adopt in 2023. You know, blockchains have got a lot of buzz, obviously crypto is, you know, the killer app for blockchain. Senior IT architect in financial services from your, one of your insight roundtables said quote, "For enterprises to adopt a new technology, "there have to be proven turnkey solutions. "My experience in talking with my peers are, "blockchain is still an open-source component "where you have to build around it." Now I want to thank Ravi Mayuram, who's the CTO of Couchbase sent in, you know, one of the predictions, he said, "DevOps will adopt blockchain, specifically Ethereum." And he referenced actually in his email to me, Solidity, which is the programming language for Ethereum, "will be in every DevOps pro's playbook, "mirroring the boom in machine-learning. "Newer programming languages like Solidity "will enter the toolkits of devs." His point there, you know, Solidity for those of you don't know, you know, Bitcoin is not programmable. Solidity, you know, came out and that was their whole shtick, and they've been improving that, and so forth. But it, Eric, it's true, it really hasn't found its home despite, you know, the potential for smart contracts. IBM's pushing it, VMware has had announcements, and others, really hasn't found its way in the enterprise yet. >> Yeah, and I got to be honest, I don't think it's going to, either. So when we did our top trends series, this was basically chosen as an anti-prediction, I would guess, that it just continues to not gain hold. And the reason why was that first comment, right? It's very much a niche solution that requires a ton of custom work around it. You can't just plug and play it. And at the end of the day, let's be very real what this technology is, it's a database ledger, and we already have database ledgers in the enterprise. So why is this a priority to move to a different database ledger? It's going to be very niche cases. I like the CTO comment from Couchbase about it being adopted by DevOps. I agree with that, but it has to be a DevOps in a very specific use case, and a very sophisticated use case in financial services, most likely. And that's not across the entire enterprise. So I just think it's still going to struggle to get its foothold for a little bit longer, if ever. >> Great, thanks. Okay, let's move on. Number eight, AWS Databricks, Google Snowflake lead the data charge with Microsoft. Keeping it simple. So let's unpack this a little bit. This is the shared accounts peer position for, I pulled data platforms in for analytics, machine-learning and AI and database. So I could grab all these accounts or these vendors and see how they compare in those three sectors. Analytics, machine-learning and database. Snowflake and Databricks, you know, they're on a crash course, as you and I have talked about. They're battling to be the single source of truth in analytics. They're, there's going to be a big focus. They're already started. It's going to be accelerated in 2023 on open formats. Iceberg, Python, you know, they're all the rage. We heard about Iceberg at Snowflake Summit, last summer or last June. Not a lot of people had heard of it, but of course the Databricks crowd, who knows it well. A lot of other open source tooling. There's a company called DBT Labs, which you're going to talk about in a minute. George Gilbert put them on our radar. We just had Tristan Handy, the CEO of DBT labs, on at supercloud last week. They are a new disruptor in data that's, they're essentially making, they're API-ifying, if you will, KPIs inside the data warehouse and dramatically simplifying that whole data pipeline. So really, you know, the ETL guys should be shaking in their boots with them. Coming back to the slide. Google really remains focused on BigQuery adoption. Customers have complained to me that they would like to use Snowflake with Google's AI tools, but they're being forced to go to BigQuery. I got to ask Google about that. AWS continues to stitch together its bespoke data stores, that's gone down that "Right tool for the right job" path. David Foyer two years ago said, "AWS absolutely is going to have to solve that problem." We saw them start to do it in, at Reinvent, bringing together NoETL between Aurora and Redshift, and really trying to simplify those worlds. There's going to be more of that. And then Microsoft, they're just making it cheap and easy to use their stuff, you know, despite some of the complaints that we hear in the community, you know, about things like Cosmos, but Eric, your take? >> Yeah, my concern here is that Snowflake and Databricks are fighting each other, and it's allowing AWS and Microsoft to kind of catch up against them, and I don't know if that's the right move for either of those two companies individually, Azure and AWS are building out functionality. Are they as good? No they're not. The other thing to remember too is that AWS and Azure get paid anyway, because both Databricks and Snowflake run on top of 'em. So (laughing) they're basically collecting their toll, while these two fight it out with each other, and they build out functionality. I think they need to stop focusing on each other, a little bit, and think about the overall strategy. Now for Databricks, we know they came out first as a machine-learning AI tool. They were known better for that spot, and now they're really trying to play catch-up on that data storage compute spot, and inversely for Snowflake, they were killing it with the compute separation from storage, and now they're trying to get into the MLAI spot. I actually wouldn't be surprised to see them make some sort of acquisition. Frank Slootman has been a little bit quiet, in my opinion there. The other thing to mention is your comment about DBT Labs. If we look at our emerging technology survey, last survey when this came out, DBT labs, number one leader in that data integration space, I'm going to just pull it up real quickly. It looks like they had a 33% overall net sentiment to lead data analytics integration. So they are clearly growing, it's fourth straight survey consecutively that they've grown. The other name we're seeing there a little bit is Cribl, but DBT labs is by far the number one player in this space. >> All right. Okay, cool. Moving on, let's go to number nine. With Automation mixer resurgence in 2023, we're showing again data. The x axis is overlap or presence in the dataset, and the vertical axis is shared net score. Net score is a measure of spending momentum. As always, you've seen UI path and Microsoft Power Automate up until the right, that red line, that 40% line is generally considered elevated. UI path is really separating, creating some distance from Automation Anywhere, they, you know, previous quarters they were much closer. Microsoft Power Automate came on the scene in a big way, they loom large with this "Good enough" approach. I will say this, I, somebody sent me a results of a (indistinct) survey, which showed UiPath actually had more mentions than Power Automate, which was surprising, but I think that's not been the case in the ETR data set. We're definitely seeing a shift from back office to front soft office kind of workloads. Having said that, software testing is emerging as a mainstream use case, we're seeing ML and AI become embedded in end-to-end automations, and low-code is serving the line of business. And so this, we think, is going to increasingly have appeal to organizations in the coming year, who want to automate as much as possible and not necessarily, we've seen a lot of layoffs in tech, and people... You're going to have to fill the gaps with automation. That's a trend that's going to continue. >> Yep, agreed. At first that comment about Microsoft Power Automate having less citations than UiPath, that's shocking to me. I'm looking at my chart right here where Microsoft Power Automate was cited by over 60% of our entire survey takers, and UiPath at around 38%. Now don't get me wrong, 38% pervasion's fantastic, but you know you're not going to beat an entrenched Microsoft. So I don't really know where that comment came from. So UiPath, looking at it alone, it's doing incredibly well. It had a huge rebound in its net score this last survey. It had dropped going through the back half of 2022, but we saw a big spike in the last one. So it's got a net score of over 55%. A lot of people citing adoption and increasing. So that's really what you want to see for a name like this. The problem is that just Microsoft is doing its playbook. At the end of the day, I'm going to do a POC, why am I going to pay more for UiPath, or even take on another separate bill, when we know everyone's consolidating vendors, if my license already includes Microsoft Power Automate? It might not be perfect, it might not be as good, but what I'm hearing all the time is it's good enough, and I really don't want another invoice. >> Right. So how does UiPath, you know, and Automation Anywhere, how do they compete with that? Well, the way they compete with it is they got to have a better product. They got a product that's 10 times better. You know, they- >> Right. >> they're not going to compete based on where the lowest cost, Microsoft's got that locked up, or where the easiest to, you know, Microsoft basically give it away for free, and that's their playbook. So that's, you know, up to UiPath. UiPath brought on Rob Ensslin, I've interviewed him. Very, very capable individual, is now Co-CEO. So he's kind of bringing that adult supervision in, and really tightening up the go to market. So, you know, we know this company has been a rocket ship, and so getting some control on that and really getting focused like a laser, you know, could be good things ahead there for that company. Okay. >> One of the problems, if I could real quick Dave, is what the use cases are. When we first came out with RPA, everyone was super excited about like, "No, UiPath is going to be great for super powerful "projects, use cases." That's not what RPA is being used for. As you mentioned, it's being used for mundane tasks, so it's not automating complex things, which I think UiPath was built for. So if you were going to get UiPath, and choose that over Microsoft, it's going to be 'cause you're doing it for more powerful use case, where it is better. But the problem is that's not where the enterprise is using it. The enterprise are using this for base rote tasks, and simply, Microsoft Power Automate can do that. >> Yeah, it's interesting. I've had people on theCube that are both Microsoft Power Automate customers and UiPath customers, and I've asked them, "Well you know, "how do you differentiate between the two?" And they've said to me, "Look, our users and personal productivity users, "they like Power Automate, "they can use it themselves, and you know, "it doesn't take a lot of, you know, support on our end." The flip side is you could do that with UiPath, but like you said, there's more of a focus now on end-to-end enterprise automation and building out those capabilities. So it's increasingly a value play, and that's going to be obviously the challenge going forward. Okay, my last one, and then I think you've got some bonus ones. Number 10, hybrid events are the new category. Look it, if I can get a thousand inbounds that are largely self-serving, I can do my own here, 'cause we're in the events business. (Eric chuckling) Here's the prediction though, and this is a trend we're seeing, the number of physical events is going to dramatically increase. That might surprise people, but most of the big giant events are going to get smaller. The exception is AWS with Reinvent, I think Snowflake's going to continue to grow. So there are examples of physical events that are growing, but generally, most of the big ones are getting smaller, and there's going to be many more smaller intimate regional events and road shows. These micro-events, they're going to be stitched together. Digital is becoming a first class citizen, so people really got to get their digital acts together, and brands are prioritizing earned media, and they're beginning to build their own news networks, going direct to their customers. And so that's a trend we see, and I, you know, we're right in the middle of it, Eric, so you know we're going to, you mentioned RSA, I think that's perhaps going to be one of those crazy ones that continues to grow. It's shrunk, and then it, you know, 'cause last year- >> Yeah, it did shrink. >> right, it was the last one before the pandemic, and then they sort of made another run at it last year. It was smaller but it was very vibrant, and I think this year's going to be huge. Global World Congress is another one, we're going to be there end of Feb. That's obviously a big big show, but in general, the brands and the technology vendors, even Oracle is going to scale down. I don't know about Salesforce. We'll see. You had a couple of bonus predictions. Quantum and maybe some others? Bring us home. >> Yeah, sure. I got a few more. I think we touched upon one, but I definitely think the data prep tools are facing extinction, unfortunately, you know, the Talons Informatica is some of those names. The problem there is that the BI tools are kind of including data prep into it already. You know, an example of that is Tableau Prep Builder, and then in addition, Advanced NLP is being worked in as well. ThoughtSpot, Intelius, both often say that as their selling point, Tableau has Ask Data, Click has Insight Bot, so you don't have to really be intelligent on data prep anymore. A regular business user can just self-query, using either the search bar, or even just speaking into what it needs, and these tools are kind of doing the data prep for it. I don't think that's a, you know, an out in left field type of prediction, but it's the time is nigh. The other one I would also state is that I think knowledge graphs are going to break through this year. Neo4j in our survey is growing in pervasion in Mindshare. So more and more people are citing it, AWS Neptune's getting its act together, and we're seeing that spending intentions are growing there. Tiger Graph is also growing in our survey sample. I just think that the time is now for knowledge graphs to break through, and if I had to do one more, I'd say real-time streaming analytics moves from the very, very rich big enterprises to downstream, to more people are actually going to be moving towards real-time streaming, again, because the data prep tools and the data pipelines have gotten easier to use, and I think the ROI on real-time streaming is obviously there. So those are three that didn't make the cut, but I thought deserved an honorable mention. >> Yeah, I'm glad you did. Several weeks ago, we did an analyst prediction roundtable, if you will, a cube session power panel with a number of data analysts and that, you know, streaming, real-time streaming was top of mind. So glad you brought that up. Eric, as always, thank you very much. I appreciate the time you put in beforehand. I know it's been crazy, because you guys are wrapping up, you know, the last quarter survey in- >> Been a nuts three weeks for us. (laughing) >> job. I love the fact that you're doing, you know, the ETS survey now, I think it's quarterly now, right? Is that right? >> Yep. >> Yep. So that's phenomenal. >> Four times a year. I'll be happy to jump on with you when we get that done. I know you were really impressed with that last time. >> It's unbelievable. This is so much data at ETR. Okay. Hey, that's a wrap. Thanks again. >> Take care Dave. Good seeing you. >> All right, many thanks to our team here, Alex Myerson as production, he manages the podcast force. Ken Schiffman as well is a critical component of our East Coast studio. Kristen Martin and Cheryl Knight help get the word out on social media and in our newsletters. And Rob Hoof is our editor-in-chief. He's at siliconangle.com. He's just a great editing for us. Thank you all. Remember all these episodes that are available as podcasts, wherever you listen, podcast is doing great. Just search "Breaking analysis podcast." Really appreciate you guys listening. I publish each week on wikibon.com and siliconangle.com, or you can email me directly if you want to get in touch, david.vellante@siliconangle.com. That's how I got all these. I really appreciate it. I went through every single one with a yellow highlighter. It took some time, (laughing) but I appreciate it. You could DM me at dvellante, or comment on our LinkedIn post and please check out etr.ai. Its data is amazing. Best survey data in the enterprise tech business. This is Dave Vellante for theCube Insights, powered by ETR. Thanks for watching, and we'll see you next time on "Breaking Analysis." (upbeat music beginning) (upbeat music ending)

>>Hello and welcome today's cube presentation of eight of us startup showcase. I'm john for your host highlighting the hottest companies and devops data analytics and cloud management lisa martin and David want are here to kick it off. We've got a great program for you again. This is our, our new community event model where we're doing every quarter, we have every new episode, this is quarter three this year or episode three, season one of the hottest cloud startups and we're gonna be featured. Then we're gonna do a keynote package and then 15 countries will present their story, Go check them out and then have a closing keynote with a practitioner and we've got some great lineups, lisa Dave, great to see you. Thanks for joining me. >>Hey guys, >>great to be here. So David got to ask you, you know, back in events last night we're at the 14 it's event where they had the golf PGA championship with the cube Now we got the hybrid model, This is the new normal. We're in, we got these great companies were showcasing them. What's your take? >>Well, you're right. I mean, I think there's a combination of things. We're seeing some live shows. We saw what we did with at mobile world Congress. We did the show with AWS storage day where it was, we were at the spheres, there was no, there was a live audience, but they weren't there physically. It was just virtual and yeah, so, and I just got pained about reinvent. Hey Dave, you gotta make your flights. So I'm making my flights >>were gonna be at the amazon web services, public sector summit next week. At least a lot, a lot of cloud convergence going on here. We got many companies being featured here that we spoke with the Ceo and their top people cloud management, devops data, nelson security. Really cutting edge companies, >>yes, cutting edge companies who are all focused on acceleration. We've talked about the acceleration of digital transformation the last 18 months and we've seen a tremendous amount of acceleration in innovation with what these startups are doing. We've talked to like you said, there's, there's C suite, we've also talked to their customers about how they are innovating so quickly with this hybrid environment, this remote work and we've talked a lot about security in the last week or so. You mentioned that we were at Fortinet cybersecurity skills gap. What some of these companies are doing with automation for example, to help shorten that gap, which is a big opportunity >>for the job market. Great stuff. Dave so the format of this event, you're going to have a fireside chat with the practitioner, we'd like to end these programs with a great experienced practitioner cutting edge in data february. The beginning lisa are gonna be kicking off with of course Jeff bar to give us the update on what's going on AWS and then a special presentation from Emily Freeman who is the author of devops for dummies, she's introducing new content. The revolution in devops devops two point oh and of course jerry Chen from Greylock cube alumni is going to come on and talk about his new thesis castles in the cloud creating moats at cloud scale. We've got a great lineup of people and so the front ends can be great. Dave give us a little preview of what people can expect at the end of the fireside chat. >>Well at the highest level john I've always said we're entering that sort of third great wave of cloud. First wave was experimentation. The second big wave was migration. The third wave of integration, Deep business integration and what you're >>going to hear from >>Hello Fresh today is how they like many companies that started early last decade. They started with an on prem Hadoop system and then of course we all know what happened is S three essentially took the knees out from, from the on prem Hadoop market lowered costs, brought things into the cloud and what Hello Fresh is doing is they're transforming from that legacy Hadoop system into its running on AWS but into a data mess, you know, it's a passionate topic of mine. Hello Fresh was scaling they realized that they couldn't keep up so they had to rethink their entire data architecture and they built it around data mesh Clements key and christoph Soewandi gonna explain how they actually did that are on a journey or decentralized data >>measure it and your posts have been awesome on data measure. We get a lot of traction. Certainly you're breaking analysis for the folks watching check out David Landes, Breaking analysis every week, highlighting the cutting edge trends in tech Dave. We're gonna see you later, lisa and I are gonna be here in the morning talking about with Emily. We got Jeff Barr teed up. Dave. Thanks for coming on. Looking forward to fireside chat lisa. We'll see you when Emily comes back on. But we're gonna go to Jeff bar right now for Dave and I are gonna interview Jeff. Mm >>Hey Jeff, >>here he is. Hey, how are you? How's it going really well. So I gotta ask you, the reinvent is on, everyone wants to know that's happening right. We're good with Reinvent. >>Reinvent is happening. I've got my hotel and actually listening today, if I just remembered, I still need to actually book my flights. I've got my to do list on my desk and I do need to get my >>flights. Uh, >>really looking forward >>to it. I can't wait to see the all the announcements and blog posts. We're gonna, we're gonna hear from jerry Chen later. I love the after on our next event. Get your reaction to this castle and castles in the cloud where competitive advantages can be built in the cloud. We're seeing examples of that. But first I gotta ask you give us an update of what's going on. The ap and ecosystem has been an incredible uh, celebration these past couple weeks, >>so, so a lot of different things happening and the interesting thing to me is that as part of my job, I often think that I'm effectively living in the future because I get to see all this really cool stuff that we're building just a little bit before our customers get to, and so I'm always thinking okay, here I am now, and what's the world going to be like in a couple of weeks to a month or two when these launches? I'm working on actually get out the door and that, that's always really, really fun, just kind of getting that, that little edge into where we're going, but this year was a little interesting because we had to really significant birthdays, we had the 15 year anniversary of both EC two and S three and we're so focused on innovating and moving forward, that it's actually pretty rare for us at Aws to look back and say, wow, we've actually done all these amazing things in in the last 15 years, >>you know, it's kind of cool Jeff, if I may is is, you know, of course in the early days everybody said, well, a place for startup is a W. S and now the great thing about the startup showcases, we're seeing the startups that >>are >>very near, or some of them have even reached escape velocity, so they're not, they're not tiny little companies anymore, they're in their transforming their respective industries, >>they really are and I think that as they start ups grow, they really start to lean into the power of the cloud. They as they start to think, okay, we've we've got our basic infrastructure in place, we've got, we were serving data, we're serving up a few customers, everything is actually working pretty well for us. We've got our fundamental model proven out now, we can invest in publicity and marketing and scaling and but they don't have to think about what's happening behind the scenes. They just if they've got their auto scaling or if they're survivalists, the infrastructure simply grows to meet their demand and it's it's just a lot less things that they have to worry about. They can focus on the fun part of their business which is actually listening to customers and building up an awesome business >>Jeff as you guys are putting together all the big pre reinvented, knows a lot of stuff that goes on prior as well and they say all the big good stuff to reinvent. But you start to see some themes emerged this year. One of them is modernization of applications, the speed of application development in the cloud with the cloud scale devops personas, whatever persona you want to talk about but basically speed the speed of of the app developers where other departments have been slowing things down, I won't say name names, but security group and I t I mean I shouldn't have said that but only kidding but no but seriously people want in minutes and seconds now not days or weeks. You know whether it's policy. What are some of the trends that you're seeing around this this year as we get into some of the new stuff coming out >>So Dave customers really do want speed and for we've actually encapsulate this for a long time in amazon in what we call the bias for action leadership principle >>where >>we just need to jump in and move forward and and make things happen. A lot of customers look at that and they say yes this is great. We need to have the same bias fraction. Some do. Some are still trying to figure out exactly how to put it into play. And they absolutely for sure need to pay attention to security. They need to respect the past and make sure that whatever they're doing is in line with I. T. But they do want to move forward. And the interesting thing that I see time and time again is it's not simply about let's adopt a new technology. It's how do we >>how do we keep our workforce >>engaged? How do we make sure that they've got the right training? How do we bring our our I. T. Team along for this. Hopefully new and fun and exciting journey where they get to learn some interesting new technologies they've got all this very much accumulated business knowledge they still want to put to use, maybe they're a little bit apprehensive about something brand new and they hear about the cloud, but there by and large, they really want to move forward. They just need a little bit of >>help to make it happen >>real good guys. One of the things you're gonna hear today, we're talking about speed traditionally going fast. Oftentimes you meant you have to sacrifice some things on quality and what you're going to hear from some of the startups today is how they're addressing that to automation and modern devoPS technologies and sort of rethinking that whole application development approach. That's something I'm really excited to see organization is beginning to adopt so they don't have to make that tradeoff anymore. >>Yeah, I would >>never want to see someone >>sacrifice quality, >>but I do think that iterating very quickly and using the best of devoPS principles to be able to iterate incredibly quickly and get that first launch out there and then listen with both ears just >>as much >>as you can, Everything. You hear iterate really quickly to meet those needs in, in hours and days, not months, quarters or years. >>Great stuff. Chef and a lot of the companies were featuring here in the startup showcase represent that new kind of thinking, um, systems thinking as well as you know, the cloud scale and again and it's finally here, the revolution of deVOps is going to the next generation and uh, we're excited to have Emily Freeman who's going to come on and give a little preview for her new talk on this revolution. So Jeff, thank you for coming on, appreciate you sharing the update here on the cube. Happy >>to be. I'm actually really looking forward to hearing from Emily. >>Yeah, it's great. Great. Looking forward to the talk. Brand new Premier, Okay, uh, lisa martin, Emily Freeman is here. She's ready to come in and we're going to preview her lightning talk Emily. Um, thanks for coming on, we really appreciate you coming on really, this is about to talk around deVOPS next gen and I think lisa this is one of those things we've been, we've been discussing with all the companies. It's a new kind of thinking it's a revolution, it's a systems mindset, you're starting to see the connections there she is. Emily, Thanks for coming. I appreciate it. >>Thank you for having me. So your teaser video >>was amazing. Um, you know, that little secret radical idea, something completely different. Um, you gotta talk coming up, what's the premise behind this revolution, you know, these tying together architecture, development, automation deployment, operating altogether. >>Yes, well, we have traditionally always used the sclc, which is the software delivery life cycle. Um, and it is a straight linear process that has actually been around since the sixties, which is wild to me um, and really originated in manufacturing. Um, and as much as I love the Toyota production system and how much it has shown up in devops as a sort of inspiration on how to run things better. We are not making cars, we are making software and I think we have to use different approaches and create a sort of model that better reflects our modern software development process. >>It's a bold idea and looking forward to the talk and as motivation. I went into my basement and dusted off all my books from college in the 80s and the sea estimates it was waterfall. It was software development life cycle. They trained us to think this way and it came from the mainframe people. It was like, it's old school, like really, really old and it really hasn't been updated. Where's the motivation? I actually cloud is kind of converging everything together. We see that, but you kind of hit on this persona thing. Where did that come from this persona? Because you know, people want to put people in buckets release engineer. I mean, where's that motivation coming from? >>Yes, you're absolutely right that it came from the mainframes. I think, you know, waterfall is necessary when you're using a punch card or mag tape to load things onto a mainframe, but we don't exist in that world anymore. Thank goodness. And um, yes, so we, we use personas all the time in tech, you know, even to register, well not actually to register for this event, but a lot events. A lot of events, you have to click that drop down. Right. Are you a developer? Are you a manager, whatever? And the thing is personas are immutable in my opinion. I was a developer. I will always identify as a developer despite playing a lot of different roles and doing a lot of different jobs. Uh, and this can vary throughout the day. Right. You might have someone who has a title of software architect who ends up helping someone pair program or develop or test or deploy. Um, and so we wear a lot of hats day to day and I think our discussions around roles would be a better, um, certainly a better approach than personas >>lease. And I've been discussing with many of these companies around the roles and we're hearing from them directly and they're finding out that people have, they're mixing and matching on teams. So you're, you're an S R E on one team and you're doing something on another team where the workflows and the workloads defined the team formation. So this is a cultural discussion. >>It absolutely is. Yes. I think it is a cultural discussion and it really comes to the heart of devops, right? It's people process. And then tools deVOps has always been about culture and making sure that developers have all the tools they need to be productive and honestly happy. What good is all of this? If developing software isn't a joyful experience. Well, >>I got to ask you, I got you here obviously with server list and functions just starting to see this kind of this next gen. And we're gonna hear from jerry Chen, who's a Greylock VC who's going to talk about castles in the clouds, where he's discussing the moats that could be created with a competitive advantage in cloud scale. And I think he points to the snowflakes of the world. You're starting to see this new thing happening. This is devops 2.0, this is the revolution. Is this kind of where you see the same vision of your talk? >>Yes, so DeVOps created 2000 and 8, 2000 and nine, totally different ecosystem in the world we were living in, you know, we didn't have things like surveillance and containers, we didn't have this sort of default distributed nature, certainly not the cloud. Uh and so I'm very excited for jerry's talk. I'm curious to hear more about these moz. I think it's fascinating. Um but yeah, you're seeing different companies use different tools and processes to accelerate their delivery and that is the competitive advantage. How can we figure out how to utilize these tools in the most efficient way possible. >>Thank you for coming and giving us a preview. Let's now go to your lightning keynote talk. Fresh content. Premier of this revolution in Devops and the Freemans Talk, we'll go there now. >>Hi, I'm Emily Freeman, I'm the author of devops for dummies and the curator of 97 things every cloud engineer should know. I am thrilled to be here with you all today. I am really excited to share with you a kind of a wild idea, a complete re imagining of the S DLC and I want to be clear, I need your feedback. I want to know what you think of this. You can always find me on twitter at editing. Emily, most of my work centers around deVOps and I really can't overstate what an impact the concept of deVOPS has had on this industry in many ways it built on the foundation of Agile to become a default a standard we all reach for in our everyday work. When devops surfaced as an idea in 2008, the tech industry was in a vastly different space. AWS was an infancy offering only a handful of services. Azure and G C P didn't exist yet. The majority's majority of companies maintained their own infrastructure. Developers wrote code and relied on sys admins to deploy new code at scheduled intervals. Sometimes months apart, container technology hadn't been invented applications adhered to a monolithic architecture, databases were almost exclusively relational and serverless wasn't even a concept. Everything from the application to the engineers was centralized. Our current ecosystem couldn't be more different. Software is still hard, don't get me wrong, but we continue to find novel solutions to consistently difficult, persistent problems. Now, some of these end up being a sort of rebranding of old ideas, but others are a unique and clever take to abstracting complexity or automating toil or perhaps most important, rethinking challenging the very premises we have accepted as Cannon for years, if not decades. In the years since deVOps attempted to answer the critical conflict between developers and operations, engineers, deVOps has become a catch all term and there have been a number of derivative works. Devops has come to mean 5000 different things to 5000 different people. For some, it can be distilled to continuous integration and continuous delivery or C I C D. For others, it's simply deploying code more frequently, perhaps adding a smattering of tests for others. Still, its organizational, they've added a platform team, perhaps even a questionably named DEVOPS team or have created an engineering structure that focuses on a separation of concerns. Leaving feature teams to manage the development, deployment, security and maintenance of their siloed services, say, whatever the interpretation, what's important is that there isn't a universally accepted standard. Well, what deVOPS is or what it looks like an execution, it's a philosophy more than anything else. A framework people can utilize to configure and customize their specific circumstances to modern development practices. The characteristic of deVOPS that I think we can all agree on though, is that an attempted to capture the challenges of the entire software development process. It's that broad umbrella, that holistic view that I think we need to breathe life into again, The challenge we face is that DeVOps isn't increasingly outmoded solution to a previous problem developers now face. Cultural and technical challenge is far greater than how to more quickly deploy a monolithic application. Cloud native is the future the next collection of default development decisions and one the deVOPS story can't absorb in its current form. I believe the era of deVOPS is waning and in this moment as the sun sets on deVOPS, we have a unique opportunity to rethink rebuild free platform. Even now, I don't have a crystal ball. That would be very handy. I'm not completely certain with the next decade of tech looks like and I can't write this story alone. I need you but I have some ideas that can get the conversation started, I believe to build on what was we have to throw away assumptions that we've taken for granted all this time in order to move forward. We must first step back. Mhm. The software or systems development life cycle, what we call the S. D. L. C. has been in use since the 1960s and it's remained more or less the same since before color television and the touch tone phone. Over the last 60 or so odd years we've made tweaks, slight adjustments, massaged it. The stages or steps are always a little different with agile and deVOps we sort of looped it into a circle and then an infinity loop we've added pretty colors. But the sclc is more or less the same and it has become an assumption. We don't even think about it anymore, universally adopted constructs like the sclc have an unspoken permanence. They feel as if they have always been and always will be. I think the impact of that is even more potent. If you were born after a construct was popularized. Nearly everything around us is a construct, a model, an artifact of a human idea. The chair you're sitting in the desk, you work at the mug from which you drink coffee or sometimes wine, buildings, toilets, plumbing, roads, cars, art, computers, everything. The sclc is a remnant an artifact of a previous era and I think we should throw it away or perhaps more accurately replace it, replace it with something that better reflects the actual nature of our work. A linear, single threaded model designed for the manufacturer of material goods cannot possibly capture the distributed complexity of modern socio technical systems. It just can't. Mhm. And these two ideas aren't mutually exclusive that the sclc was industry changing, valuable and extraordinarily impactful and that it's time for something new. I believe we are strong enough to hold these two ideas at the same time, showing respect for the past while envisioning the future. Now, I don't know about you, I've never had a software project goes smoothly in one go. No matter how small. Even if I'm the only person working on it and committing directly to master software development is chaos. It's a study and entropy and it is not getting any more simple. The model with which we think and talk about software development must capture the multithreaded, non sequential nature of our work. It should embody the roles engineers take on and the considerations they make along the way. It should build on the foundations of agile and devops and represent the iterative nature of continuous innovation. Now, when I was thinking about this, I was inspired by ideas like extreme programming and the spiral model. I I wanted something that would have layers, threads, even a way of visually representing multiple processes happening in parallel. And what I settled on is the revolution model. I believe the visualization of revolution is capable of capturing the pivotal moments of any software scenario. And I'm going to dive into all the discrete elements. But I want to give you a moment to have a first impression, to absorb my idea. I call it revolution because well for one it revolves, it's circular shape reflects the continuous and iterative nature of our work, but also because it is revolutionary. I am challenging a 60 year old model that is embedded into our daily language. I don't expect Gartner to build a magic quadrant around this tomorrow, but that would be super cool. And you should call me my mission with. This is to challenge the status quo to create a model that I think more accurately reflects the complexity of modern cloud native software development. The revolution model is constructed of five concentric circles describing the critical roles of software development architect. Ng development, automating, deploying and operating intersecting each loop are six spokes that describe the production considerations every engineer has to consider throughout any engineering work and that's test, ability, secure ability, reliability, observe ability, flexibility and scalability. The considerations listed are not all encompassing. There are of course things not explicitly included. I figured if I put 20 spokes, some of us, including myself, might feel a little overwhelmed. So let's dive into each element in this model. We have long used personas as the default way to do divide audiences and tailor messages to group people. Every company in the world right now is repeating the mantra of developers, developers, developers but personas have always bugged me a bit because this approach typically either oversimplifies someone's career are needlessly complicated. Few people fit cleanly and completely into persona based buckets like developers and operations anymore. The lines have gotten fuzzy on the other hand, I don't think we need to specifically tailor messages as to call out the difference between a devops engineer and a release engineer or a security administrator versus a security engineer but perhaps most critically, I believe personas are immutable. A persona is wholly dependent on how someone identifies themselves. It's intrinsic not extrinsic. Their titles may change their jobs may differ, but they're probably still selecting the same persona on that ubiquitous drop down. We all have to choose from when registering for an event. Probably this one too. I I was a developer and I will always identify as a developer despite doing a ton of work in areas like devops and Ai Ops and Deverell in my heart. I'm a developer I think about problems from that perspective. First it influences my thinking and my approach roles are very different. Roles are temporary, inconsistent, constantly fluctuating. If I were an actress, the parts I would play would be lengthy and varied, but the persona I would identify as would remain an actress and artist lesbian. Your work isn't confined to a single set of skills. It may have been a decade ago, but it is not today in any given week or sprint, you may play the role of an architect. Thinking about how to design a feature or service, developer building out code or fixing a bug and on automation engineer, looking at how to improve manual processes. We often refer to as soil release engineer, deploying code to different environments or releasing it to customers or in operations. Engineer ensuring an application functions inconsistent expected ways and no matter what role we play. We have to consider a number of issues. The first is test ability. All software systems require testing to assure architects that designs work developers, the code works operators, that infrastructure is running as expected and engineers of all disciplines that code changes won't bring down the whole system testing in its many forms is what enables systems to be durable and have longevity. It's what reassures engineers that changes won't impact current functionality. A system without tests is a disaster waiting to happen, which is why test ability is first among equals at this particular roundtable. Security is everyone's responsibility. But if you understand how to design and execute secure systems, I struggle with this security incidents for the most part are high impact, low probability events. The really big disasters, the one that the ones that end up on the news and get us all free credit reporting for a year. They don't happen super frequently and then goodness because you know that there are endless small vulnerabilities lurking in our systems. Security is something we all know we should dedicate time to but often don't make time for. And let's be honest, it's hard and complicated and a little scary def sec apps. The first derivative of deVOPS asked engineers to move security left this approach. Mint security was a consideration early in the process, not something that would block release at the last moment. This is also the consideration under which I'm putting compliance and governance well not perfectly aligned. I figure all the things you have to call lawyers for should just live together. I'm kidding. But in all seriousness, these three concepts are really about risk management, identity, data, authorization. It doesn't really matter what specific issue you're speaking about, the question is who has access to what win and how and that is everyone's responsibility at every stage site reliability engineering or sorry, is a discipline job and approach for good reason. It is absolutely critical that applications and services work as expected. Most of the time. That said, availability is often mistakenly treated as a synonym for reliability. Instead, it's a single aspect of the concept if a system is available but customer data is inaccurate or out of sync. The system is not reliable, reliability has five key components, availability, latency, throughput. Fidelity and durability, reliability is the end result. But resiliency for me is the journey the action engineers can take to improve reliability, observe ability is the ability to have insight into an application or system. It's the combination of telemetry and monitoring and alerting available to engineers and leadership. There's an aspect of observe ability that overlaps with reliability, but the purpose of observe ability isn't just to maintain a reliable system though, that is of course important. It is the capacity for engineers working on a system to have visibility into the inner workings of that system. The concept of observe ability actually originates and linear dynamic systems. It's defined as how well internal states of a system can be understood based on information about its external outputs. If it is critical when companies move systems to the cloud or utilize managed services that they don't lose visibility and confidence in their systems. The shared responsibility model of cloud storage compute and managed services require that engineering teams be able to quickly be alerted to identify and remediate issues as they arise. Flexible systems are capable of adapting to meet the ever changing needs of the customer and the market segment, flexible code bases absorb new code smoothly. Embody a clean separation of concerns. Are partitioned into small components or classes and architected to enable the now as well as the next inflexible systems. Change dependencies are reduced or eliminated. Database schemas accommodate change well components, communicate via a standardized and well documented A. P. I. The only thing constant in our industry is change and every role we play, creating flexibility and solutions that can be flexible that will grow as the applications grow is absolutely critical. Finally, scalability scalability refers to more than a system's ability to scale for additional load. It implies growth scalability and the revolution model carries the continuous innovation of a team and the byproducts of that growth within a system. For me, scalability is the most human of the considerations. It requires each of us in our various roles to consider everyone around us, our customers who use the system or rely on its services, our colleagues current and future with whom we collaborate and even our future selves. Mhm. Software development isn't a straight line, nor is it a perfect loop. It is an ever changing complex dance. There are twirls and pivots and difficult spins forward and backward. Engineers move in parallel, creating truly magnificent pieces of art. We need a modern model for this modern era and I believe this is just the revolution to get us started. Thank you so much for having me. >>Hey, we're back here. Live in the keynote studio. I'm john for your host here with lisa martin. David lot is getting ready for the fireside chat ending keynote with the practitioner. Hello! Fresh without data mesh lisa Emily is amazing. The funky artwork there. She's amazing with the talk. I was mesmerized. It was impressive. >>The revolution of devops and the creative element was a really nice surprise there. But I love what she's doing. She's challenging the status quo. If we've learned nothing in the last year and a half, We need to challenge the status quo. A model from the 1960s that is no longer linear. What she's doing is revolutionary. >>And we hear this all the time. All the cube interviews we do is that you're seeing the leaders, the SVP's of engineering or these departments where there's new new people coming in that are engineering or developers, they're playing multiple roles. It's almost a multidisciplinary aspect where you know, it's like going into in and out burger in the fryer later and then you're doing the grill, you're doing the cashier, people are changing roles or an architect, their test release all in one no longer departmental, slow siloed groups. >>She brought up a great point about persona is that we no longer fit into these buckets. That the changing roles. It's really the driver of how we should be looking at this. >>I think I'm really impressed, really bold idea, no brainer as far as I'm concerned, I think one of the things and then the comments were off the charts in a lot of young people come from discord servers. We had a good traction over there but they're all like learning. Then you have the experience, people saying this is definitely has happened and happening. The dominoes are falling and they're falling in the direction of modernization. That's the key trend speed. >>Absolutely with speed. But the way that Emily is presenting it is not in a brash bold, but it's in a way that makes great sense. The way that she creatively visually lined out what she was talking about Is amenable to the folks that have been doing this for since the 60s and the new folks now to really look at this from a different >>lens and I think she's a great setup on that lightning top of the 15 companies we got because you think about sis dig harness. I white sourced flamingo hacker one send out, I oh, okay. Thought spot rock set Sarah Ops ramp and Ops Monte cloud apps, sani all are doing modern stuff and we talked to them and they're all on this new wave, this monster wave coming. What's your observation when you talk to these companies? >>They are, it was great. I got to talk with eight of the 15 and the amount of acceleration of innovation that they've done in the last 18 months is phenomenal obviously with the power and the fuel and the brand reputation of aws but really what they're all facilitating cultural shift when we think of devoPS and the security folks. Um, there's a lot of work going on with ai to an automation to really kind of enabled to develop the develops folks to be in control of the process and not have to be security experts but ensuring that the security is baked in shifting >>left. We saw that the chat room was really active on the security side and one of the things I noticed was not just shift left but the other groups, the security groups and the theme of cultural, I won't say war but collision cultural shift that's happening between the groups is interesting because you have this new devops persona has been around Emily put it out for a while. But now it's going to the next level. There's new revolutions about a mindset, a systems mindset. It's a thinking and you start to see the new young companies coming out being funded by the gray locks of the world who are now like not going to be given the we lost the top three clouds one, everything. there's new business models and new technical architecture in the cloud and that's gonna be jerry Chen talk coming up next is going to be castles in the clouds because jerry chant always talked about moats, competitive advantage and how moats are key to success to guard the castle. And then we always joke, there's no more moz because the cloud has killed all the boats. But now the motor in the cloud, the castles are in the cloud, not on the ground. So very interesting thought provoking. But he's got data and if you look at the successful companies like the snowflakes of the world, you're starting to see these new formations of this new layer of innovation where companies are growing rapidly, 98 unicorns now in the cloud. Unbelievable, >>wow, that's a lot. One of the things you mentioned, there's competitive advantage and these startups are all fueled by that they know that there are other companies in the rear view mirror right behind them. If they're not able to work as quickly and as flexibly as a competitor, they have to have that speed that time to market that time to value. It was absolutely critical. And that's one of the things I think thematically that I saw along the eighth sort of that I talked to is that time to value is absolutely table stakes. >>Well, I'm looking forward to talking to jerry chan because we've talked on the queue before about this whole idea of What happens when winner takes most would mean the top 3, 4 cloud players. What happens? And we were talking about that and saying, if you have a model where an ecosystem can develop, what does that look like and back in 2013, 2014, 2015, no one really had an answer. Jerry was the only BC. He really nailed it with this castles in the cloud. He nailed the idea that this is going to happen. And so I think, you know, we'll look back at the tape or the videos from the cube, we'll find those cuts. But we were talking about this then we were pontificating and riffing on the fact that there's going to be new winners and they're gonna look different as Andy Jassy always says in the cube you have to be misunderstood if you're really going to make something happen. Most of the most successful companies are misunderstood. Not anymore. The cloud scales there. And that's what's exciting about all this. >>It is exciting that the scale is there, the appetite is there the appetite to challenge the status quo, which is right now in this economic and dynamic market that we're living in is there's nothing better. >>One of the things that's come up and and that's just real quick before we bring jerry in is automation has been insecurity, absolutely security's been in every conversation, but automation is now so hot in the sense of it's real and it's becoming part of all the design decisions. How can we automate can we automate faster where the keys to automation? Is that having the right data, What data is available? So I think the idea of automation and Ai are driving all the change and that's to me is what these new companies represent this modern error where AI is built into the outcome and the apps and all that infrastructure. So it's super exciting. Um, let's check in, we got jerry Chen line at least a great. We're gonna come back after jerry and then kick off the day. Let's bring in jerry Chen from Greylock is he here? Let's bring him in there. He is. >>Hey john good to see you. >>Hey, congratulations on an amazing talk and thesis on the castles on the cloud. Thanks for coming on. >>All right, Well thanks for reading it. Um, always were being put a piece of workout out either. Not sure what the responses, but it seemed to resonate with a bunch of developers, founders, investors and folks like yourself. So smart people seem to gravitate to us. So thank you very much. >>Well, one of the benefits of doing the Cube for 11 years, Jerry's we have videotape of many, many people talking about what the future will hold. You kind of are on this early, it wasn't called castles in the cloud, but you were all I was, we had many conversations were kind of connecting the dots in real time. But you've been on this for a while. It's great to see the work. I really think you nailed this. I think you're absolutely on point here. So let's get into it. What is castles in the cloud? New research to come out from Greylock that you spearheaded? It's collaborative effort, but you've got data behind it. Give a quick overview of what is castle the cloud, the new modes of competitive advantage for companies. >>Yeah, it's as a group project that our team put together but basically john the question is, how do you win in the cloud? Remember the conversation we had eight years ago when amazon re event was holy cow, Like can you compete with them? Like is it a winner? Take all? Winner take most And if it is winner take most, where are the white spaces for Some starts to to emerge and clearly the past eight years in the cloud this journey, we've seen big companies, data breaks, snowflakes, elastic Mongo data robot. And so um they spotted the question is, you know, why are the castles in the cloud? The big three cloud providers, Amazon google and Azure winning. You know, what advantage do they have? And then given their modes of scale network effects, how can you as a startup win? And so look, there are 500 plus services between all three cloud vendors, but there are like 500 plus um startups competing gets a cloud vendors and there's like almost 100 unicorn of private companies competing successfully against the cloud vendors, including public companies. So like Alaska, Mongo Snowflake. No data breaks. Not public yet. Hashtag or not public yet. These are some examples of the names that I think are winning and watch this space because you see more of these guys storm the castle if you will. >>Yeah. And you know one of the things that's a funny metaphor because it has many different implications. One, as we talk about security, the perimeter of the gates, the moats being on land. But now you're in the cloud, you have also different security paradigm. You have a different um, new kinds of services that are coming on board faster than ever before. Not just from the cloud players but From companies contributing into the ecosystem. So the combination of the big three making the market the main markets you, I think you call 31 markets that we know of that probably maybe more. And then you have this notion of a sub market, which means that there's like we used to call it white space back in the day, remember how many whites? Where's the white space? I mean if you're in the cloud, there's like a zillion white spaces. So talk about this sub market dynamic between markets and that are being enabled by the cloud players and how these sub markets play into it. >>Sure. So first, the first problem was what we did. We downloaded all the services for the big three clowns. Right? And you know what as recalls a database or database service like a document DB and amazon is like Cosmo dB and Azure. So first thing first is we had to like look at all three cloud providers and you? Re categorize all the services almost 500 Apples, Apples, Apples # one number two is you look at all these markets or sub markets and said, okay, how can we cluster these services into things that you know you and I can rock right. That's what amazon Azure and google think about. It is very different and the beauty of the cloud is this kind of fat long tail of services for developers. So instead of like oracle is a single database for all your needs. They're like 20 or 30 different databases from time series um analytics, databases. We're talking rocks at later today. Right. Um uh, document databases like Mongo search database like elastic. And so what happens is there's not one giant market like databases, there's a database market And 30, 40 sub markets that serve the needs developers. So the Great News is cloud has reduced the cost and create something that new for developers. Um also the good news is for a start up you can find plenty of white speeds solving a pain point, very specific to a different type of problem >>and you can sequence up to power law to this. I love the power of a metaphor, you know, used to be a very thin neck note no torso and then a long tail. But now as you're pointing out this expansion of the fat tail of services, but also there's big tam's and markets available at the top of the power law where you see coming like snowflake essentially take on the data warehousing market by basically sitting on amazon re factoring with new services and then getting a flywheel completely changing the economic unit economics completely changing the consumption model completely changing the value proposition >>literally you >>get Snowflake has created like a storm, create a hole, that mode or that castle wall against red shift. Then companies like rock set do your real time analytics is Russian right behind snowflakes saying, hey snowflake is great for data warehouse but it's not fast enough for real time analytics. Let me give you something new to your, to your parallel argument. Even the big optic snowflake have created kind of a wake behind them that created even more white space for Gaza rock set. So that's exciting for guys like me and >>you. And then also as we were talking about our last episode two or quarter two of our showcase. Um, from a VC came on, it's like the old shelf where you didn't know if a company's successful until they had to return the inventory now with cloud you if you're not successful, you know it right away. It's like there's no debate. Like, I mean you're either winning or not. This is like that's so instrumented so a company can have a good better mousetrap and win and fill the white space and then move up. >>It goes both ways. The cloud vendor, the big three amazon google and Azure for sure. They instrument their own class. They know john which ecosystem partners doing well in which ecosystems doing poorly and they hear from the customers exactly what they want. So it goes both ways they can weaponize that. And just as well as you started to weaponize that info >>and that's the big argument of do that snowflake still pays the amazon bills. They're still there. So again, repatriation comes back, That's a big conversation that's come up. What's your quick take on that? Because if you're gonna have a castle in the cloud, then you're gonna bring it back to land. I mean, what's that dynamic? Where do you see that compete? Because on one hand is innovation. The other ones maybe cost efficiency. Is that a growth indicator slow down? What's your view on the movement from and to the cloud? >>I think there's probably three forces you're finding here. One is the cost advantage in the scale advantage of cloud so that I think has been going for the past eight years, there's a repatriation movement for a certain subset of customers, I think for cost purposes makes sense. I think that's a tiny handful that believe they can actually run things better than a cloud. The third thing we're seeing around repatriation is not necessary against cloud, but you're gonna see more decentralized clouds and things pushed to the edge. Right? So you look at companies like Cloudflare Fastly or a company that we're investing in Cato networks. All ideas focus on secure access at the edge. And so I think that's not the repatriation of my own data center, which is kind of a disaggregated of cloud from one giant monolithic cloud, like AWS east or like a google region in europe to multiple smaller clouds for governance purposes, security purposes or legacy purposes. >>So I'm looking at my notes here, looking down on the screen here for this to read this because it's uh to cut and paste from your thesis on the cloud. The excellent cloud. The of the $38 billion invested this quarter. Um Ai and ml number one, um analytics. Number two, security number three. Actually, security number one. But you can see the bubbles here. So all those are data problems I need to ask you. I see data is hot data as intellectual property. How do you look at that? Because we've been reporting on this and we just started the cube conversation around workflows as intellectual property. If you have scale and your motives in the cloud. You could argue that data and the workflows around those data streams is intellectual property. It's a protocol >>I believe both are. And they just kind of go hand in hand like peanut butter and jelly. Right? So data for sure. I. P. So if you know people talk about days in the oil, the new resource. That's largely true because of powers a bunch. But the workflow to your point john is sticky because every company is a unique snowflake right? Like the process used to run the cube and your business different how we run our business. So if you can build a workflow that leverages the data, that's super sticky. So in terms of switching costs, if my work is very bespoke to your business, then I think that's competitive advantage. >>Well certainly your workflow is a lot different than the cube. You guys just a lot of billions of dollars in capital. We're talking to all the people out here jerry. Great to have you on final thought on your thesis. Where does it go from here? What's been the reaction? Uh No, you put it out there. Great love the restart. Think you're on point on this one. Where did we go from here? >>We have to follow pieces um in the near term one around, you know, deep diver on open source. So look out for that pretty soon and how that's been a powerful strategy a second. Is this kind of just aggregation of the cloud be a Blockchain and you know, decentralized apps, be edge applications. So that's in the near term two more pieces of, of deep dive we're doing. And then the goal here is to update this on a quarterly and annual basis. So we're getting submissions from founders that wanted to say, hey, you missed us or he screwed up here. We got the big cloud vendors saying, Hey jerry, we just lost his new things. So our goal here is to update this every single year and then probably do look back saying, okay, uh, where were we wrong? We're right. And then let's say the castle clouds 2022. We'll see the difference were the more unicorns were there more services were the IPO's happening. So look for some short term work from us on analytics, like around open source and clouds. And then next year we hope that all of this forward saying, Hey, you have two year, what's happening? What's changing? >>Great stuff and, and congratulations on the southern news. You guys put another half a billion dollars into early, early stage, which is your roots. Are you still doing a lot of great investments in a lot of unicorns. Congratulations that. Great luck on the team. Thanks for coming on and congratulations you nailed this one. I think I'm gonna look back and say that this is a pretty seminal piece of work here. Thanks for sharing. >>Thanks john thanks for having us. >>Okay. Okay. This is the cube here and 81 startup showcase. We're about to get going in on all the hot companies closing out the kino lisa uh, see jerry Chen cube alumni. He was right from day one. We've been riffing on this, but he nails it here. I think Greylock is lucky to have him as a general partner. He's done great deals, but I think he's hitting the next wave big. This is, this is huge. >>I was listening to you guys talking thinking if if you had a crystal ball back in 2013, some of the things Jerry saying now his narrative now, what did he have a crystal >>ball? He did. I mean he could be a cuBA host and I could be a venture capital. We were both right. I think so. We could have been, you know, doing that together now and all serious now. He was right. I mean, we talked off camera about who's the next amazon who's going to challenge amazon and Andy Jassy was quoted many times in the queue by saying, you know, he was surprised that it took so long for people to figure out what they were doing. Okay, jerry was that VM where he had visibility into the cloud. He saw amazon right away like we did like this is a winning formula and so he was really out front on this one. >>Well in the investments that they're making in these unicorns is exciting. They have this, this lens that they're able to see the opportunities there almost before anybody else can. And finding more white space where we didn't even know there was any. >>Yeah. And what's interesting about the report I'm gonna dig into and I want to get to him while he's on camera because it's a great report, but He says it's like 500 services I think Amazon has 5000. So how you define services as an interesting thing and a lot of amazon services that they have as your doesn't have and vice versa, they do call that out. So I find the report interesting. It's gonna be a feature game in the future between clouds the big three. They're gonna say we do this, you're starting to see the formation, Google's much more developer oriented. Amazon is much more stronger in the governance area with data obviously as he pointed out, they have such experience Microsoft, not so much their developer cloud and more office, not so much on the government's side. So that that's an indicator of my, my opinion of kind of where they rank. So including the number one is still amazon web services as your long second place, way behind google, right behind Azure. So we'll see how the horses come in, >>right. And it's also kind of speaks to the hybrid world in which we're living the hybrid multi cloud world in which many companies are living as companies to not just survive in the last year and a half, but to thrive and really have to become data companies and leverage that data as a competitive advantage to be able to unlock the value of it. And a lot of these startups that we talked to in the showcase are talking about how they're helping organizations unlock that data value. As jerry said, it is the new oil, it's the new gold. Not unless you can unlock that value faster than your competition. >>Yeah, well, I'm just super excited. We got a great day ahead of us with with all the cots startups. And then at the end day, Volonte is gonna interview, hello, fresh practitioners, We're gonna close it out every episode now, we're going to do with the closing practitioner. We try to get jpmorgan chase data measures. The hottest area right now in the enterprise data is new competitive advantage. We know that data workflows are now intellectual property. You're starting to see data really factoring into these applications now as a key aspect of the competitive advantage and the value creation. So companies that are smart are investing heavily in that and the ones that are kind of slow on the uptake are lagging the market and just trying to figure it out. So you start to see that transition and you're starting to see people fall away now from the fact that they're not gonna make it right, You're starting to, you know, you can look at look at any happens saying how much ai is really in there. Real ai what's their data strategy and you almost squint through that and go, okay, that's gonna be losing application. >>Well the winners are making it a board level conversation >>And security isn't built in. Great to have you on this morning kicking it off. Thanks John Okay, we're going to go into the next set of the program at 10:00 we're going to move into the breakouts. Check out the companies is three tracks in there. We have an awesome track on devops pure devops. We've got the data and analytics and we got the cloud management and just to run down real quick check out the sis dig harness. Io system is doing great, securing devops harness. IO modern software delivery platform, White Source. They're preventing and remediating the rest of the internet for them for the company's that's a really interesting and lumbago, effortless acres land and monitoring functions, server list super hot. And of course hacker one is always great doing a lot of great missions and and bounties you see those success continue to send i O there in Palo alto changing the game on data engineering and data pipe lining. Okay. Data driven another new platform, horizontally scalable and of course thought spot ai driven kind of a search paradigm and of course rock set jerry Chen's companies here and press are all doing great in the analytics and then the cloud management cost side 80 operations day to operate. Ops ramps and ops multi cloud are all there and sunny, all all going to present. So check them out. This is the Cubes Adria's startup showcase episode three.

>>let's bring in jerry Chen from Greylock is he here? Let's bring him in there? He is. >>Hey john good to see you. >>Hey congratulations on an amazing talk and thesis on the castles on the cloud. Thanks for coming on. >>All right, well thanks for reading it. Um, always were being put a piece of work out out of the ether, not sure what the responses, but it seemed to resonate with a bunch of developers, founders, investors and folks like yourself. So smart people seem to gravitate to us. So thank you very much. >>Well, one of the benefits of doing the Cube for 11 years, Jerry's, we have videotape of many, many people talking about what the future will hold. You kind of are on this early, it wasn't called castles in the cloud, but you were all, I was, we had many conversations were kind of connecting the dots in real time, but you've been on this for a while it's great to see the work. I really think you nailed this. I think you're absolutely on point here. So let's get into it. What is castles in the cloud? New research come out from Greylock that you spearheaded? It's collaborative effort, but you've got data behind it. Give a quick overview of what is castle the cloud, The new modes of competitive advantage for companies. >>Yeah, it's as a group project that our team put together but basically john the question is how do you win in the cloud? Remember the conversation we had eight years ago when amazon re event was holy cow like can you compete with them? Like is it a winner? Take all, Winner take most. And if it is winner take most. Where are the white spaces for some starts to to emerge clearly the past eight years in the cloud this journey we've seen big companies data breaks, snowflakes, elastic mongo data robot. And so um they spotted the question is you know, why are the castles in the cloud? The big three cloud providers amazon google and as you're winning, you know, what advantage do they have? And then given their modes of scale network effects, how can you as a startup win? And so look, there are 500 plus services between all three cloud vendors but there are like 500 plus um startups, competing gets a cloud vendors and there's like almost 100 unicorn of private companies competing successfully against the cloud vendors, including public companies. So like Alaska Mongo snowflake, No data breaks. Not public yet. Hashtag or not public yet. These are some examples of the names that I think are winning and watch this space because you see more of these guys storm the castle if you will. >>Yeah. And you know one of the things that's a funny metaphor because it has many different implications. One, as we talk about security, the perimeter of the gates, the most being on land, but now you're in the cloud, you have also different security paradigm. You have a different um new kinds of services that are coming on board faster than ever before, not just from the cloud players, but from companies contributing into the ecosystem. So the combination of the big three making the market the main markets, you, I think you call it 31 markets that we know of that probably maybe more. And then you have this notion of sub market, which means that there's like, we used to call it white space back in the day. Remember how many whites? Where's the white space? I mean if you're in the cloud there's like a zillion white spaces. So talk about this sub market dynamic between markets and that are being enabled by the cloud players and how these sub markets play into it. >>Sure. So first, the first problem was what we did, we downloaded all the services for the big three clowns. Right. And you know what as recalls a database or database service, like a document dB and amazon is like Cosmo, dB and Azure. So first thing first is we had to like look at all three cloud providers and you? Re categorize all the services almost 500 Apples, Apples, Apples, # one. Number two, is you look at all these markets or sub markets and said, okay, how can we cluster these services into things that you know, you and I can rock. Right, That's what amazon as well. And google think about it is very different. And the beauty of the cloud is this kind of fat long tail of services for developers. So instead of like oracle as a single database for all your needs, they're like 20 or 30 different databases from time series um, analytics, databases we're talking rocks at later today, right? Um uh, document databases like mongo search database like elastic and so what happens is there's not one giant market like databases, there's a database market and 30 40 sub markets that serve the needs developers. So the Great News is cloud has reduced the cost and create something that new for developers. Um also the good uses for a start up, you can find plenty of white speech solving a pain point very specific to a different type of problem >>and you can sequence up the power law to this. I love the power of a metaphor, you know, used to be a very thin neck note no torso and then a long tail. But now as you're pointing out this expansion of the fat tail of services but also this big tam's and markets available at the top of the power law where you see coming like snowflake essentially take on the data warehousing market by basically sitting on amazon and re factoring with new services and then getting a flywheel completely changing the economic unit economics completely changing the consumption model completely changing the value proposition literally >>you snowflake has created like storm create a hole that mode or that castle wall against red shift. Then companies like rock set real time analytics, It's Russian right behind snowflakes saying, hey snowflake is great for data warehouse, but it's not fast enough for real time analytics. Let me give you something new to your, your parallel argument. Even the big optics snowflake have created kind of a wake behind them that created even more white space for Gaza rock set. So that's exciting for guys like media. >>And then also as we were talking about our last episode two or quarter two of our showcase, um, from a VC came on, it's like the old shelf where you didn't know if a company's successful until they had to return the inventory now with cloud. If you're not successful, you know it right away. It's like, it's like there's no debate. Like, I mean you're either winning or not. This is like that's so instrumented. So a company can have a good better mousetrap and win and fill the white space and then move up. >>It goes both ways. The cloud vendor, the big three amazon google and Azure for sure. They instrument their own class. They know john which ecosystem partners doing well in which ecosystems doing poorly and they hear from the customers exactly what they want. So it goes both ways they can weaponize that just as well as you started to weaponize that info >>and that's the big argument of do that snowflake still pays the amazon bills, they're still there. So again, repatriation comes back. That's a big conversation that's come up. Um, what's your quick take on that? Because if you're gonna have a castle in the cloud, then you're gonna bring it back to land. I mean, what's that dynamic? Where do you see that compete? Because on one hand is innovation, the other ones maybe cost efficiency. Is that a growth indicator? Slow down? What's your view on the movement from and to the cloud? >>I think there's probably three forces you're finding here. One is the cost advantage in the scale advantage of cloud. So that I think has been going for the past eight years. There's a repatriation movement for a certain subset of customers, I think for cost purposes makes sense. I think that's a tiny handful that believe they can actually run things better than a cloud. The third thing we're seeing around repatriation is not necessary against cloud, but you're gonna see more decentralized clouds and things pushed to the edge. Right? So you look at companies like Cloudflare Fastly or a company that we're investing in Cato networks. All ideas focus on secure access at the edge. And so I think that's not repatriation of my own data center, but it's kind of a disaggregated of cloud from one giant monolithic cloud, like AWS East or like a google region in europe to multiple smaller clouds for governance purposes, security purposes or legacy purposes. >>So I'm looking at my notes here, looking down on the screen here for this to read this because it's uh to cut and paste from your thesis on the cloud, the cloud. The of the $38 billion invested uh this quarter. Um uh Ai and ml number one um analytics number two, security number three. Actually security number one. But you can see the bubbles here. So all those are data problems I need to ask you. I see data is hot data as intellectual property. How do you look at that? Because we've been reporting on this and we just started the cube conversation around workflows as intellectual property. If you have scale and your motives in the cloud, you could argue that data and the workflows around those data streams is intellectual property, it's a protocol. >>I believe both are. And they just kind of go hand in hand like peanut butter and jelly. Right? So data for sure. I p So if you know people talk about days in the oil, the new resource. That's largely true because the powers a bunch. But the workflow to your point john is sticky because every company is a unique snowflake, right? Like the process used to run the cube and your business different how we run our business. So if you can build a workflow that leverages the data that's super sticky. So in terms of switching costs, if my work is very bespoke to your business then I think that's competitive advantage. >>Well certainly your workflow is a lot different than the cube. You guys. Just a lot of billions of dollars in capital. Uh, we're talking to all the people out here jerry. Great to have you on final thought on your thesis. Where does it go from here? What's been the reaction? Uh, no, you put it out there. Great, love the research. I think you're on point on this one. Where did, where's it go from here? >>We have to follow pieces. Um, in the near term one around, you know, deep diver on open source. So look out for that pretty soon. And how that's been a powerful strategy a second is this kind of disaggregated of the cloud be a Blockchain and you know, decentralized apps, be edge applications. So that's in the near term two more pieces of, of deep dive we're doing. And then the goal here is to update this on a quarterly and annual basis. So we're getting submissions from founders that wanted to say, hey, you missed us Or he screwed up here. We got the big cloud vendors saying, Hey jerry, we just lost his new things. So our goal here is to update this every single year and then probably do look back saying, okay, uh, were we wrong? We're right. And then let's say the castle clouds 2022 we'll see the difference were the more unicorns, were there more services were the IPO's happening. So look for some short term work from us on analytics, like around open source and clouds. And then next year we hope that all this forward saying, Hey, you have two year, what's happening? What's changing? >>Great stuff And, and congratulations on the Southern news. You guys put another half a billion dollars into early, early stage, which is your roots. Are you still doing a lot of great investments in a lot of unicorns? Congratulations that great luck on the team. Thanks for coming on And congratulations. You nailed this one. I think I'm gonna look back and say that this is a pretty seminal piece of work here. Thanks for for sharing. >>Thanks john, Thanks for having me as >>always.

>> From The Cube Studios in Palo Alto, in Boston, connecting with thought leaders around the globe. These are Cloud Native Insights. >> Hi, I'm Stu Miniman the host of Cloud Native Insights where we're talking to companies and practitioners about how they take advantage of the innovation and agility of the cloud. Happy to welcome to the program I have first time guests, you know, Ido Safruti he is the co-founder and CTO of Perimeter X going to talk him in a dual role, both as a practitioner and their adoption of Cloud Native Technologies serverless specifically as well as they are a Cloud Native supplier in the security realm. Ido thanks so much for joining us. Nice to have you on the program. >> Yeah, good to be here. Thanks. >> All right. So Ido, if you could, you're co founder of Perimeter X, give us just, if you would, a little bit of your background and you know, what Perimeter X does and we'll, go into it from there. >> Sure. So as CTO, I'm in charge of the research, engineering, and product team at Perimeter X, we are a vendor, a Cloud Native vendor of web application security protecting all kinds of different business logic abuses for our customers, mostly large websites that are in demand of web-scale. So not only doing the protection or the application, but also integrated into multiple infrastructure and running at scale. We're solving problems like account takeover, carding, a major card data skimming and so on. >> One of the conversations we've been having the last couple of years from security is, you know, there's no shortage of new threats, the surface area of attack, keep getting more here in 2020, everybody's working from home more, the people that are doing attacks didn't stop working. So if you could just, you know, how long has Perimeter X been around? And I want to lead up to the discussion of serverless, you know, what was the architecture considerations before? And what started leading you towards making a change architecturally? >> Yeah, so Perimeter X was founded almost six years ago, a little less than six years ago. And we were a Cloud Native Solution to begin with. We identified the challenges of where the gap security in native cloud application is. For in many cases, security solutions are not leveraging the breadth and the new architecture of where applications are built. And we're more of trying to slap in a standard enterprise security and on other cloud infrastructure. When we started, we wanted to integrate and adopt the cloud and adopt the flexibility of the specificity of the edge to help enhance our customer's infrastructure by adding security onto that versus forcing them to rearchitect it when they integrate security into it. >> Well, it's addressing, you say six years ago. I can't remember hearing the term Cloud Native that long ago. Obviously Cloud has been around for a while, but when I started this one of the discussions around Cloud Native was, Oh, people were talking about adopting containers and Kubernetes. And I said, they're great tools to help from, you know, the infrastructure standpoint, but you're talking about right, living in the Cloud, taking advantage of cloud services, you know. That's where we really see the opportunity in Cloud Native. So, you know, when you say you were built for the cloud, but you know, things like containers, server lists probably weren't doing those six years ago, maybe, or were you? >> Actually, yeah, so we started early versions of obviously all dockerized Grenades was not that great back then. So we were orchestrating some things on our own and gradually adopting other orchestration and mesh for our own service that is obviously running on multiple cloud vendors. But from us, from our point of view, the key for cloud was how can we enable our customers, and how can we integrate better with them in a way that enhance their infrastructure versus add friction? Because the challenge usually with security, is that security in most cases or traditionally, was adding friction and delays and complexity to developer process. And we're designing our solution to begin with on how can we leverage these new technologies? How can we leverage the fact that CDNs and edges are becoming smarter and can, you can start deploying your own payloads and logic to make our logic integrated with them and to partner with this cloud players in order to enable our customers to add these additional tiers. And I think this is from my point of view, one of the key capabilities of having the capabilities of computed edge and serverless, is making a lightweight integration and making your existing infrastructure smarter by making it easy to incorporate third party vendors or other solutions or more logic without forcing a wholly architectural solution. >> Yeah, no, no. You bring up some great points. I remember back the early days of Docker, it was, can we get the atomic unit to be closer to what the application is. But you know, my background is in infrastructure and it was okay, It went from the server to the VM, to the container. Yeah, there's an application that sits on top of it, but I don't think about it as opposed to serverless starts with the developer first and you know, how I build my application and then there are certain things that I have to worry about the platform. So, help us understand doing containers, looking at serverless, was it okay, we're going to completely overhaul and throw out what we had because there's something new and better. Are you doing still some containers and some serverless? Help us understand, you know, what drove that transition and what the outcomes were? >> Yeah, so our infrastructure our machine learning algorithms, the data processing that the heavy lifting that we're running on our own infrastructure, which is again, Cloud Native Infrastructure. But something that we're managing in many cases is using containers is using other environments because we were running heavy payloads. We're not fully relying on some other platform to run for us. We're leveraging a lot of these technologies to run it and run it in a more efficient way. Where we're adopting serverless is both in some of the front end decisions. So making smarter load balancing decision integrating with some other cloud vendors to help make sure that requests are coming in the right view, and things like this, but where it is more important even then is how can we make ourselves relevant for customers to adopt serverless and how can we help introduce security into these environments? Because, if you're looking at traditional security, if you're, if you're so it's more about, if I go to that one, how can I enable our customers adopt serverless? How can I enable our customers adopt new technologies into cloud? Because it could be a limitation if you're, if you're a security policy or if your architecture is such, that requires everything to go through a specific security proxy or some firewall, it may force you to utilize very limited architectures. If you want to deploy now with payload on some, on Lambda or on, on your CDN, it typically will be way in front of your traditional enterprise security solutions. How can you make that application smarter? How can you make that application sort, self-sufficient by connecting modules, by making sure that you're including modules that integrate security, and bring the security with you everywhere. So, so this is the motion that we're trying to define here. >> Well, and I'm sure you've got a really interesting viewpoint that I'd love to hear on this, Ido. So if you look at, you know, most new technologies, especially in the cloud space, serverless specifically, you know, costs that should be less expensive, you know, flexible. I should be able to, you know, make changes, and speed. I should be able to do more faster, but always when you look at those, you say, well, but what about security? Can I do all of those things, you know, be faster, better, cheaper, more agile, and not be less secure? So I'd love to hear any thoughts you have on kind of the, you know, the typical things, but also your security angle on them? >> Yeah. So one of the benefit of using serverless, and I think there are two types, initially thinking of serverless one is running your code in some, backend application, that may access different things, but you don't need to manage for scale because there is some platform that manage that. Which is one great option, what you're seeing more and more, and we're working in collaboration with Fastly and where you can see that on other edge platforms is having this notion of serverless, How can you deploy code to the edge? And the benefit there is that you can mitigate a lot of the risks outside your data center, outside of your cloud, that if there is, and this is where security plays so well with that, because you want to mitigate the risks and the attack as far away from your application as possible. So if you can deploy the logic that is doing that, or making decisions at the edge, it helps you improve your infrastructure cost. It helps you improve some of the applications that are still in the backend, so you can gradually forward deploy some of the logic that is relevant at the edge and getting the scalability, getting this ability to scale without limit, because a CDN or edge vendor, he has a lot of capacity and withhold if it's a denial of service attack, or if it's any other type of attack, weigh this logic in hand. Or even, sometimes it's just skill. Maybe you had a very good marketing campaign and you were having a lot of traffic. If you can deploy this skill somewhere that can handle that in a distributed, efficient way, you are having even better. >> Well, and it sounds like that that fits into what Perimeter X does. You know, when I think about edge, you know, scale concerns, security concerns are, you know, some of those top of mind as are just, you know, how. You know, can automation things like machine learning or AI help me? Cause usually that scale or a distributed nature of it means that it's not necessarily something that people alone could take care of themselves. Am I getting right, a little bit where Perimeter X is helping their customers? >> Yeah, yeah, yeah. And the idea is to connect, to help and to help offline offset some of the logic or some of the capabilities that, that you don't want your business to be an expert in. So if you're a retailer, you want to be able to sell the best to optimize accomodation for your customers and to handle that you don't want to be an expert in detecting bots or in identifying malicious code or things of that sort. And if you can offset that and with a lightweight, easy integration that does not limit your ability to innovate and adopt new technologies, this is what we're trying to help. Let us focus at this. But by integrating the edge by integrating with partners like Fastly and so that we can help enhance the infrastructure and add more capabilities, where you can focus on doing your own business and we can help allow and enable additional technologies. >> Along your serverless journey, what partners, what other vendors were helpful along the way? As I've looked at it, it's a relatively young ecosystem, but it's robust. So, you know, I'm curious who, some of the companies that have helped along the way? >> Yep. I think Fastly is definitely one that is from their earlier infrastructure. They always had the component of exposing their edge and making it more programmable via configuration and setting logic. And now rolling out a computed edge that is giving even more flexibility. Other CDNs are opening their edge as well with all kinds of tools, again, Lambda from AWS and other services. So this is one component of how do you manage that? How do you always read that? There are issues of how much state can you manage their access to data? And there are different services that allows that. Other platforms, which are more of the platform as a service that are not traditionally considered serverless. And you can think of it as eCommerce platforms helps you deploy your logic and some sometimes go to application into their ecosystem and helps you focus on again, managing your application. So think of Magento, think of a Salesforce cloud, these kind of commerce applications that you can deploy your logic. They're all fit into that ecosystem of help you. You want to write your code to that, your key on and let someone else manage the scale, let someone else manage some of the things that are common tool. >> Well, yeah, that's definitely one you see diversity of solutions at edge. You know, very different from if you were thinking kind of their traditional enterprise data center. Any, you know, as a CTO, when you look at edge, you know, where we were the maturation of this whole solution, or are there areas specifically that you expect in the next, you know, six, 12, 18 months that we will see some things solidify, mature down the line. >> Yeah. Yeah. So I think that the state where the edge compute is at now is more about deploying logic that is remote from the data center. So there is a limit. And if you look across different vendors to the more IO or data access capabilities of these loads. So if you can write the code and make it self sufficient, it's easier and it's more common to find platforms that will love it. What you're starting to see is how you add the data layer into that tier and making it more accessible. And that opens the gate for many more reach an interesting reputation, because once you can have a key value store, and once you can manage a state and modify configuration, you can then start deploying more complex applications and make more decisions. Do I see the billing system running entirely on the edge? probably not. There are things where you want to store it in the database. There are things that make sense to have it in some backend infrastructure, but a lot of payloads more and more environments are going there. And I think these additional services of queuing services, data services, database like services. So can, can I run a transaction on the edge? These kinds of technologies are currently emerging and you can see them in different levels for different vendors. And they will definitely open the gate even further for more and more patrons will be adopted at the edge. >> All right. Well, Ido last question I have for you, What advice would you give for your peers out there? as you said, you know, you were early in Docker adoption. You've done serverless adoption, you know, Edge is something that is gaining a lot of attention. What advice would you give to people here in 2020 as they look at, you know, the variety of Cloud Native options out there? >> I think the easy one is anything new that you build look around and figure out what is the best technology that can help you get there faster? And how can you build in a more strategic way for C-suite executive, if it's the CTO, CIO, CSO, think on how can you enable your team to move faster? How can you enable your team by the solutions and technologies that you select to have the flexibility of moving faster? how can you enable them to, to adopt new technologies and make it available? How can, and this is, you need some practices because you need to make sure that you are getting the right metrics. So whenever that you're using vendors that will help you collect and monitor the services and get the insights, because suddenly if anyone can deploy anything anywhere, then there is some concern about loss of control. So finding the right vendors that can help you or adopting the right processes that helps you gain this visibility while still enabling them to go anywhere. This is key. At least for us, it was key. And this is from wearing my product hat when we're building our services, this is what we're trying to enable our customers to do with this security. >> Well, Ido Safruti, thank you so much for sharing your journey, really appreciate you having on the program. >> Sure, thanks. >> And if you have people we should talk to, I would love hearing the stories of Cloud Native, how those adjustments are going and sharing your information with your peers. I'm Stu Miniman and look forward to hearing more your Cloud Native sites. (Calming music)

>> Live, from Toronto, Canada, it's theCUBE! Covering Global Cloud and Blockchain Summit 2018, brought to you by theCUBE. >> So, welcome to the Global Cloud and Blockchain Summit. I'm about to hand you over to John Furrier, who is the Co-Founder and Co-CEO of SiliconANGLE Media and Executive Editor at theCUBE, he's about to do a Fireside Chat with Al and Mathew, I'll let him introduce you to them as well. He's also involved in a major blockchain project himself, so he's going to get into that with those guys as well. So, and tomorrow we start at nine, in the meantime, enjoy the evening, enjoy the food, enjoy the chat, and I'll let you go. >> Okay. Hello? Thank you Ruth, appreciate it, thanks everyone for being part of this panel, Fireside Chat, want to make it loose, but high impact for you guys, I know, having some cocktails, having a good time. If there's any questions during, then at the end we'll pass the mic around, but. We want to have a conversation, kind of like we always do down in the lobby bar, just talking about crypto and cloud, and we ended up talking about cloud computing and crypto a lot because those are two areas that are kind of converging, and the purpose of this event. So we really wanted to share some thoughts around those two massively growing markets, one is already growing, it's continuing to be great: the cloud, and blockchain certainly is changing everything. These two important topics, we want to flesh them out, Al Burgio is the Serial Entrepreneur/Founder of DigitalBits, he's founded companies both in cloud and blockchain, so he brings a great perspective. And Matt Roszak, leading crypto investor, entrepreneur and advocate, well known in the crypto space for goin' way back, I think you gave a couple bitcoins to some very famous people early on, we'll get into that a little bit later. So guys, thanks for being part of the panel and Fireside. First question is: we know how big the money is, I mean the money is crypto is is flowin' around the world, and cloud computing we've seen specifically, and certainly in coverage now with Amazon's success, Amazon Web Services, and Microsoft and others. Trillions of dollars being disrupted in the traditional kind of the enterprise, data center area, and blockchain is doing that too, so we want to get into that. But first, before we get into it, I want you guys to take a minute to explain for the folks, just to set the context, the kinds of projects you're working on. Now Al, you have DigitalBits, Matt you're investing and you're finding a lot of interesting token dynamics. So just take a minute. Al, start. >> (mic off) So-- Everybody hear me okay? Alright, perfect. Well thanks for that lovely intro. Yes, my name is Al Burgio, I'm, I've founded a few companies, as John mentioned. Before the cloud there was internet, (light laugh) and so it started for me in the late '90s in the e-commerce era. But more recently I pioneered what's known as Interconnection 2.0, and I did that with the company called Console, for those that may know PCCW, recently it was acquired by PCCW. And with that we disrupted the way networks at the core of the internet were connected together More recently I've founded the DigitalBits project, and now DigitalBits blockchain network, and with that, you can kind of think of that as the trading and transaction layer for the points economy and other digital assets, and you can do a lot of really interesting thing with that, it's really about bringing blockchain to the masses. >> Matt, what're you workin' on? >> So, Matthew Roszak, Co-Founder and Chairman of Bloq. Bloq is a enterprise software company, we do two things, the premise is the tokenization of things, so we think the money identity, new layers of the internet are going to be tokenized. And so, we go to market in two ways, one is through Bloq Enterprise, and these are all the software layers you need to to connect to tokenized networks, so think a wallet, a node, a router, etc. And then Bloq Labs we build, and partner with, some of the leading tokenize networks and applications, so we build a connective tissue and then we actually build these new networks. I started this space as an investor over five/six years ago, investing in some of the best entrepreneurs and technologists in the space build a great network. But I love building companies, and so my Co-Founder and I, Jeff Garzik, built Bloq two and a half years ago. And then lastly, also serve of Chairman of the Chamber of Digital Commerce, so, so if you believe in these new tokenized money layers, identity layers, etc, regulation comes into play. Certainly today from an institutional adoption level, and so if you care about this space, you need to spend time to kind of help that dialogue improve; this technology moves way faster than folks in DC and elsewhere, so. >> And the project that we're workin' on at SiliconANGLE, is we've tokenized our media platform, and we're opening it up to a token model, and have kind of changed the game. So all three of us have projects, want to put those in context, we build everything on Amazon Web Services, so, the view of the cloud, we also cover it. The cloud computing market is booming, we see that Amazon Web Services numbers empower the earnings for Amazon's company, obviously Apple's trillion dollar evaluation those are clear case studies; but blockchain could potentially disrupt it all, and Al, I want to get your thoughts, because even today in the news at Microsoft Azure, which is their big cloud provider, announced blockchain as a service. And folks that are in either the data center business or in cloud know the shift that's happening in the IT world, but no ones really connected the dots on where blockchain intersects, and also, is it an opportunity for the cloud guys, what's the landscape look like, so. What's your thoughts on that, how are they connected, what does it mean, how does a cloud company maintain their relevance and competitiveness with blockchain? >> Well, just pointing on the fact that, you know, today we had that new Microsoft, the Azure cloud, their support and evangelism for blockchain. You know, a company, I think it's very important that this isn't an ICO, two kids in a garage saying their doing something blockchain this is a massive, multi-billion dollar company; and making a decision like that is not trivial, it's many, many departments, a lot of resources, before such a thing's announced. So, that's, not only is it validation, but it's a leading indicator as to this trend, that this is clearly something that's important. And a lot of people, if you're not paying attention, you need to be paying attention, including if you're in the cloud industry, 'cause many companies obviously do compete with, with Microsoft and AWS, so. It may be still early, but it's not that early, in light of the news that we saw today. With that, I would say that, a lot of the parallels I like to kind of, if I was an infrastructure provider I'd look at this from the standpoint of the emergence of Linux when it first came on the scene. What was important for companies like Red Hat to be successful, they had competition at the time, and you had shortages of Linux, let's say engineers, and what have you. And so, a company like Red Hat built a business around that, and they did that by how they kind of surfaced and validated themselves to the enterprise of that era, was partnering with hardware companies, so, it was Intel, IBM, and then Dell, HP, and they all followed, and then all of a sudden, which version of Linux do you want to use? It's Red Hat, you're paying for that support, you're paying Red Hat. And, you know, then they had their hockey stick moment. Today, you know, it's not about hardware companies per se, it's about the cloud, right? So cloud is the new hardware per se, and many enterprises obviously are looking at cloud computing companies and cloud computing providers, infrastructure providers, as the company that they need to support them with the infrastructure that they use, or sorry the technologies that they use, right? Because they're not necessarily supporting these things and making sure that they're always on within the basement of that enterprise, they're depending, or outsourcing, to depending on these managed IT providers. This was very important that whatever technologies they're using in the lab, that ultimately their infrastructure partners are able to support the implementation, the integration, the ongoing support of these technologies. So if you think of blockchain like an operating system or a database technology, or whatever you want to call it, it's important that you're able to really identify these key trends, and be able to support your customer and what they're going to need, and ultimately for them, they can't have a clog in their digital supply chain, right? So, it's clearly emerging. Microsoft is validating that today, you know, clearly they have the data, that they're seeing for their existing enterprise customers, and they don't want to lose them. >> Yeah, but remember when cloud came out; you and I have talked about this many times Al that it wasn't easy to use, I remember when Amazon Web Services came out, it was just basically, it was hard to command line, basically you had to use it, so, it became easier now, it's so easy and consumable. Blockchain, similar growing pains, but, we don't want to judge it too early with the opportunity that it has, it's going to get easier, what're your thoughts? And it has to scale by the way, Amazon, at a large scale. >> Yeah, I mean-- >> So blockchain has to scale and be easier, your thoughts? >> Another kind of way to think of it is, to not necessarily think of cloud computing, but the evolution the internet went, you know, in Internet 1.0, you know, we went through this dial-up modem era, things were very raw back then; great visions we had of the future, like, it's going to be amazing for video one day! But, not during dial-up modem era, and eventually, you know, it eventually happened. And user interfaces improved, and tool sets improved and so forth. You know, fast forward to today, we have all of that innovation to leverage, so things will move a lot faster with blockchain, it did start very raw, but it's, it's moving much faster than anything we've seen definitely in the '90s and in the last decade, so. It's just, you know, it's a matter of moments, not years. >> And I think Al brings up a great point on leverage, because Amazon leverages infrastructure to a point where it's larger than Google, Azure, and IBM's public cloud combined, and so yeah, massive leverage there. And so, when these big cloud providers provide this blockchain as a service, it is instrumented and built on top of their existing infrastructure, not necessarily on blockchain infrastructure. So, it's an interesting dynamic where they're putting it on top of existing infrastructure that's there, but what's being build right now is the decentralized Amazon Web Services. So you have every layer of Amazon being re-imagined, like, and incentivized so you have distributed compute and access and storage and database. And so, what will be interesting to see is that, given this massive opportunity, will Amazon and some of these other incumbent cloud providers become the provisioning networks of the future? Of all this new decentralized resources that get, again, if you want storage, you have to start having smarts to say: if I'm going to go to Sia or Filecoin or Genaro or Storj, compute, etc; you have to start being a provisioning layer on top of that to kind of, you know, make that blockchain essentially work. So, it'll be interesting to see the transition 'cause today the lightweight versions to say yeah, I have a blockchain as a service strategy, and that's like, well done, and check the box. Now, the question is how far in this new world will they go down? And, as it gets more decentralized, as universities and governments, corporations, plug their access utility into these networks, and to see how that changes. That is much bigger than the Amazon of today. >> I think that's an interesting point, I want to just drill down on that if you don't mind, 'cause I think that's a fundamental observation that every layer's going to be decentralized. The questions I think I'm asking and I'm seeing is: How does it all work together? And then what's the priorities? And the old model was easy; got to get the infrastructure, got to get servers, (laughs lightly) and you know, work your way up to the top of the stack. What cloud brings also is that: a software developer can whip up an application, maybe a dApp on a test network and go viral, and the next thing you know they have a great opportunity, and then they got to build down. So the question is: What are you seeing in terms of priorities on stacks, portions of the stack that are being decentralized and tokenized, do you see patterns, trends, as an investor, is there a hotter (laughs) area than others, how do you look at that? >> Well, I think it's, it's in motion right now it's, like I said, every layer of AWS is getting thought through in how to create these digital cooperatives, I have excess storage, I'm going to contribute it to this network, and I'm going to get paid in tokens when a user uses that storage network, and pays for it in those native tokens and so that, coupled with all the other layers, is happening. From a user perspective, we may not want to be going to pick a database provider, a storage, a compute, etc, we're likely going to say: I want a provisioning layer, and provision this and execute this, much like if we, you know, there'll be new provisioning layers for moving money, I don't care if routes through Lightning or Litecoin or Doge or whatever, as long as the value gets across the pond or the app gets provisioned appropriately based on you know, time, security, and cost, and whatever other tendance are important, that's all I care about, but; given the depth and the market for all that, I think it'll be interesting to see how these are developed with the provisioning layers, and I would think Amazon or Azure, the future of that is, is more provisioning than actually going and doing all that at the end of the day. >> That's great. I want to get your thoughts guys on innovation. My good friend Andy Kessler wrote an op-ed in today's Wall Street Journal around, an article around the government, the US government getting involved. You know, there's Twitter, Facebook, the big platforms, in terms of how they're handling their media, but it brings up a good point that with more regulation, there's less innovation. You mentioned some things outside the United States, it's a global cloud, cloud's operating globally with regions, it's a global fabric. Startups are really hot in this area so; how do you view the ecosystems of startups, in terms of being innovative, things happening that you think that're good, and things that aren't good, obviously I'm not a big of the government getting involved, and managing startups, the ecosystems but, blockchain has a lot of alpha entrepreneurs jumping in, you've looked at all the top ventures, the legit ventures, they're all alpha entrepreneurs, multi-time serial entrepreneurs, they see the opportunity and they go for it. Is the startup environment good, is there enough innovation opportunities, what're you thoughts on the opportunity to be innovative? >> Yeah, Al and I were just talking about this before the panel here, and were talking about our travels in Asia, and when we go there it is 10, 100 X of energy and get-it factor, and capital, and the markets are just wildly more vibrant than you know, going to some typical markets here in San Fran and New York in North America, and, so it's interesting to see that when you heat map the world, what's really happening. And you know, people are always saying: oh well this, this FinTech, or InsurTech, or whatever tech, is going to make a dent in Silicon Valley or Wall Street. This technology, this new frontier, is definitely going to do that. I think some of that will get put into more focus based on regulation, and there's two things that will happen; there's obviously a lot of whippersnapper countries that are promoting a safe place to innovate with crypto, I think Malta, Gibraltar, Barbados, etc, and there were-- >> Even Bermuda's getting in on the mix now. >> Yeah! I mean so there's no shortage of that, and so, and obviously this ecosystem outpaces the pace of regulation and then we'll see like the US doing something, or you know, other fast followers to try and catch up, and say hey, we're going to do the cryptocurrency act of 2022, miners get free power, tax-free, you know crypto trading, you know just try and play catch up. 'Cause it's kind of hard in the last year or 18 months we've seen this ecosystem go from this groundswell to this now institutional discussion; and how do you back end the the banking, the custody, all these form factors that are still relatively absent. And so, you know, we're right in the middle of it. >> It's a whole new way, you got to follow the money, right? Al, you and I talked about this; capital markets, you know entrepreneurs need to raise money and that's a good thing, you need to get capital to do stuff. >> Yeah, this is a new phenomenon that the world has never experienced before, it's awesomeness when it comes to capital formation; you know, without capital formation there is no innovation. And so the fact that more capital can be raised, it's the ultimate crowd sourcing in such an efficient period of time, capital being able, the ability to track capital from various different corners of the world, and deploy that capital to try to fuel innovation. Of course, you know, not all startups or what have you succeed, but that was true yesterday, right? You know, 90% of startups fail, but they all will give it some meaningful amounts of checks, people were employed and innovation was tried; and every once in a while something emerges that's amazing. If you can do that faster, right, when you have the opportunity to produce more and more innovation. And, of course with something so new as cryptocurrency, things like ICOs and what have you, people may kind of refer to it as the wild wild West, it's not, it's an evolution. And you have-- >> It's still the wild west though, you got to admit. (laughs) >> Well, it is but, we're getting better at it, right? As a world, this isn't the Silicon Valley community getting better at venture capital or some other part of the United States or Canada getting better at venture capital; this is the world as a whole getting better at capital formation. >> Yeah, that's a great point. >> In the new way of capital formation. >> And I wanted to just get an observation on that. I moved to Silicon Valley 20 years ago, and I love it there, for venture capital and new startups, it's the best place in the world. And I've seen people try to replicate Silicon Valley, we're the Silicon Valley of Canada, we're the Silicon Valley of the East or Europe, and it's always been hard to replicate, because it was a venture model, and you needed venture capitalists and you need money, you need a community, the culture, the failure, the starting over, and just, you know, gettin' back on the horse kind of thing. Crypto is the first time that I've seen the replica of that Silicon Valley dynamic, in a new way, because the money's flowing, (laughs) and there's community involved in crypto, crypto has a big community aspect to it. Do you guys see that as well? I mean I'm seeing, outside the United States, a lot of activity. Is that something that you're seeing? >> So, the first time we saw, well, last time we saw everybody trying to replicate Silicon Valley was first internet, you know, there was Silicon Swamp, there was Silicon Alley, there was silicon this-- >> Prairie. >> Every city was >> Silicon Beach. >> A silicon version of something, and then the capital evaporated, right? We had a mass correction happen. What wasn't being disrupted was value exchange, right, and so this is being created now, it is now possible for this to happen, and it's happening, we're seeing amazing things, Matt said, you know, in Asia. It's a truly awesome force, if anybody has an opportunity to go, they should go, it's unbelievable to experience it, and it really opens your eyes. >> And you've lived through a lot of investments during those .com days and through history now, you've seen a lot of different things. Your observations with the current state of the capital formation, startup landscapes, the global ecosystem around crypto and how it's different from say venture or classic rolling up companies and those kinds of things? >> Yeah, you hear a lot of this, you know, we're in a bubble, it's speculative, etc. And I think that when you look back at history of infrastructure, whether it's railroads, telephony, internet, and now crypto and blockchain, it's interesting, like, if you said: it would take this amount of money to innovate and come out the other end of internet with this kind of infrastructure, these kinds of applications, with these kinds of lessons learned, nobody would sign up for that number, right? It needs this fear, and greed, and all the other effervescence of markets to kind of come out the other end and have innovation. I think we're going through a very similar dynamic here with crypto and blockchain where you know, everything's getting tokenized, everything's getting decentralized. We're talking about fundamental things like money, you know, it's not like we're talking about pet food and women's shoes and airline tickets, we are talking about money, identity, things that will enable like other curves to really come into focus like in and out of things and the kind of compounding of intersections when some of these things get right is pretty extraordinary. And so, but I like what Al said in terms of capital formation and that friction to get from, you know, idea to capital to building, is getting compressed Yes, there will be edge cases of people taking advantage of that, but at the other end of this flow will be some amazing innovation. >> What do you guys think about the, if you had to answer the question with one answer, of what is the high order bit of why blockchain's so important? For me, I see it, from my standpoint, I'll just start, I see it making inefficient things more efficient for any use case, and that's being re-imagined, which is everything from IOT or whatever. Efficiency is a big thing, at least I see that. What do you guys see as a high order bit in terms of you know, the one thing that you'd say blockchain really impacts the world in terms of you know, impact, financial, etc? >> Well, I think with decentralization and all these things that we're seeing it's kind of evened the playing field. It's allowing for participation where parts of the world were unable to participate. And it's doing a whole lot of things in that area. And that's truly awesome, to really grow the economy, grow the global market, and the number of participants in that market in all areas. That's the ultimate trend at what's happening here. >> And your information? >> Absolutely, and I think there's two things, there's this blockchain dialogue, and then there's this crypto decentralization, tokenization dialogue, and on the blockchain side you have lots of companies engaging in blockchain and trying to figure out how it applies to their business, and you hear everything from McKinsey and Goldman saying financial services will save 100 billion dollars in operating expenses by applying blockchain technology, and that's great. That is probably low in terms of what they'll save, it's, to me, is just not the point of the technology, I think that when you kind of distill that down to say hey, for a group of folks to use this technology as a shared services thing to lower opex a trading settlement and decrease that, that's great, that is a step stone to creating these tokenized economies, these digital cooperatives. Meaning you contribute something and then you get something back, and it's measured in the value that this token is, like a barometric kind of value of how healthy that ecosystem is. And so, regulated public enterprises, and EC consortiums around insurance and financial services and banking, that is all fantastic, and that gets them in the pool, gets them exercising on what blockchain is, what it isn't, how they apply it, but it's, at the end of the day for them it's cost reduction The minute there's growth or IP, or disruption on the table, they're all going back to their boardrooms to say: hey let's do this, this, or that, but, if there's a way, my favorite class in college was industrial organization, and it sounds weird but, it was, it kind of told ya like how to dissect an industry, you know, what makes them competitive, who the market leaders are, and then, if you overlay like blockchain networks with tokens, with incentives, interesting things could happen, right? And so that future is going to be real interesting to see how market leaders think about how to tokenize their network, how to be, how to say: no I don't want to own this whole industrial network, I have to engage with some other participants and make sure everybody is incentivized to climb on board. So that I think is going to be more of the interesting part than just blockchain-ifying a workflow. >> Well let's just quickly drill down on that, token economics, what you're getting to. So let's assume blockchain just happens, as evolution of technology, let's just assume for a second that it's going to happen in a big way, it's private, public, hybrid chains, with all that good stuff happening, but the token economics is where the business value starts to be extracted, so the question for you is: How do you describe that to someone to look for, what are the key elements of token economics? When does it matter, when is it in play, and how should they be thinking about it? >> Yeah, I mean token economic design and getting a flywheel going to create a network and network effects is really important. You could have great technology, but Al could be a better marketer, and he gets tokens adopted better, and his network will do better because, you know, he was better able to get people to adopt and market a particular, you know, layer application. And so, it's really important to think about how you get that flywheel going, and how you get that kindling going on a particularly new ecosystem, and get users adoption and growth. That is really hard to do these days because some people don't even know what Bitcoin is, let alone to say I'm going to tokenize this layer, and every time you contribute, every time you take an action, you're going to get rewarded for it, and you're share the value of this network. >> Can you give me a good example of what's happening today that you can point to and say: that's a great example of token economics? >> Well, you see, I mean the most basic one is shared file storage, right? You know, it's like the Filecoin, Sia, Genaro model where, you know, you contribute you know, the unused storage in your laptop or your university data center or a corporate data center, and you say I'm going to contribute this, and when it's used I get these tokens and, you know at the end of the day or week or year you see what these tokens are worth, and was that worth your contribution? And so as these markets develop, and as utility develops, we'll see what that holds. >> Al, you got an example you could share? DigitalBits is a good use case obviously. >> Actually, I'm not going to use DigitalBits (John laughs) just to be neutral. This is one that Matt will know very well, definitely better than I, but one that I've-- the simpler something is, the easier it is for people to understand, and its like oh that makes sense, you know. You know, Binance is one that's very simple, you know it's a payment token, if you pay with some other currency, you pay, you know, Pricex, if you pay in the next few years with their token, you'll get the service at a discount. And in addition to that, they're using a percentage of profits, I think it's every quarter, to buy back up to, ultimately up to, 50% of tokens that are in circulation. So, you know, it's driving value, and driving return, in essence, if I can use that word. So for a user it's simple to understand, for someone that likes to speculate it's easy for someone to understand in terms of how the whole model works, so it's not some insanely complicated mathematical equation, that we can yes we can trust the math. And so in some cases, some adoption is going to just be, you know, attract participants based on simplicity. In other cases the math is important, and people will care about that, so, you know not all things are necessarily equal, and not necessarily one method is right, but there are some simple examples out there that that have proven to be successful. >> That's awesome, one last question, before we open it up if anyone has any questions. If anyone has any questions, if they want to come up, grab the microphone, and ask the three of us if you've got anything on your mind. And while you're thinking about that I'll get the final question for these guys is: A lot of people ask me hey, I want to be on the right side of history, what side of the street should I be on when the reality comes down that decentralization, blockchain, token economics, decentralized applications, becomes the norm, and that re-imagining actually happens? I don't want to be on the wrong side of history. What should I be doing, how should I be thinking differently, who should I be following, what should I be paying attention to? How do you answer that question? >> I think, at the basic level, you know, turn off your phone, lock your door, and study this technology for a day, it's the best advice I could give. Two: buy some crypto. Once you kind of have crypto on your phone, in your wallet, something changes in your brain, I think you just feel like you-- >> You check the prices every day. (all laugh) >> You lose a lot of sleep. And then after that, you know, I think you start engaging in this space in a very different way. So I think starting small, starting basic, is an important tenet. And then, what's amazing about this space is that it attracts the best and brightest out of industry, and law, and government, and technology, and you name it, and I'm always fascinated the people that show up and they're like yeah, I'm in a 20 year, you know, veteran in this space and I want to get into blockchain, it just attracts some of the best and brightest. And, I think we're going to see a lot of experience coming into the space, you know, this has been a, what I'd say a bottoms up groundswell of crypto and blockchain and the evolution of the space. And I think we're starting to see more some more mature folks come in the space to to add some history and perspective and helpin' the build out of this, and to build a lot of these networks. I think that the kind of intersection of both is going to be very healthy for the space. >> Al, your thoughts? >> Definitely agree with Matt. Definitely to lock yourself up and just try to absorb information, everyone has access to the internet, there's plenty of information. If you don't like to read go watch a few YouTube videos, just people explaining the stuff, it's really fascinating, the various different use cases and so forth. You definitely have to buy some, and, you know, whether it's five dollars worth, just go through the whole experience of being able to trade something of value that a few years ago didn't exist, and be able to trade it for something else of value is a pretty phenomenal experience. Then trying to go buy something with it, it's even more of a fascinating experience, I just bought something that used, again, something that didn't exist a few years ago. But, what I would add to that as well, you really have to get out there; if you keep surrounding yourself with people saying aw, this is, eh, whatever, >> It's never going to work. >> It's crazy, it's for criminals, and all that fun stuff. You're going to be last place. So coming to conferences, obviously future's conference you're going to meet a lot of interesting, great people, and that consistent experience, you'll learn something every time. You know, at the end of the day, I remember, I'm sure all three of us remember, with the birth of the internet there was many people that said you know the internet thing, it's crap, it's for kids, you know. And we had first movers, we had willing followers, and then the unwilling followed, you don't want to end up being-- >> The unwilling followers. >> Yeah, the unwilling. >> Alright. Does anyone have any questions they'd like to ask? Come on up. Yeah. We're recording, so we want to get it on film. >> So I have two questions. The first one is for you, Al: Two years ago I interviewed with IIX before it was Console, and I want to know why you didn't hire me? (Sparse laughs) No I'm kidding! That was a joke. Actually, I thought each of you brought up some good points, minus you Al. (chuckles) I'm just kidding. But what I really wanted to ask you guys is: so you talk a lot about this, the tokenized economy and kind of the roadmap and the things to get there, you talk about sediment layer, right, Fiat to crypto, sediment layer, your identity protocols, your dApps, X, Y, Z, right? The whole web 3.0 stack, I want each of you, or I want at least input from both of you or all of you, what are the hurdles to getting to a full adoption of web 3.0 stack, and make a bold prediction on the timing before we have a full web 3.0 stack that we use every day. >> That is a awesome question actually, timelines. You could be, being in technology, being in venture, you could be right, and you could be off by three, five, seven, 10 years, and be so wrong, right? And then at your retirement dinner you could say: I was right, but Tommy wasn't right. So, this is really hard technology, in terms of building systems that are distributed, creating the economic models, the incentive models, it takes a lot to go right in the intersection of all this. But it's not a question like is this happening? No, this is happening, this is like, it's in motion. The timelines are going to be a little elusive, I'm way more pragmatic, I was one of the early guys in the early internet, and you know everything was going to be .com and awesome and fantastic. But the timelines were a little elusive then, right? You know, it's like when was, people are thinking of today's Amazon was going to be the 2005 Amazon, you know, it's like, that took about another decade to get there, right? And people could easily just buy stuff and a drone or a UPS guy would just deliver it, and so, similar things apply today. And you know at the same time we all have a super computer in our pocket, and so it's a lot different. At the same time we're dealing with trusted mediums right? The medium of money, the medium of identity, all these different things they're, they're things that you know if I say download Instagram, and let's share cat pictures or whatever, it's not a big deal, our trust is really low for that, let's do it. For money, it's a different mental state, it's a different dynamic, especially if you're an individual, a government, or an enterprise, you go through a whole different adoption curve on that, so, you know, it is at grand scale five to 10 years, right? In any meaningful way. And so we still have a lot of work to do. >> My answer to that question, it's a good one, your question was a good one, my answer's a little bit weird because it's multi-generational. The first generation pivot was when the internet was born was because of standards, right? The government had investment. The OSI model, open system interconnect, actually never happened, the seven layers didn't get standardized, only a few key ones did; that created a lot of great things. And then when the we came out, that was very interesting protocol development there, the TCP/IP stuff, I mean HTP stuff. I don't see the standardization happening, because cloud flipped the stack model upside down because Amazon and these guys let the software developers drive the value. It used to be infrastructure drove the value of what software could do, then software became so proliferated that that drove the value of the infrastructure, so the whole cloud computing equation is making the infrastructure programmable for the first time, not the other way around, so. The cloud phenomenon's all about software driving the value, and that's happening, so. It's interesting because with blockchain you can almost do levels of services in a cloud-like way with crypto, I mean with blockchain and token economics, and have a partial stack. So think that this whole web 3.0 might be something that no one's every seen before. So, that's kind of my answer, I don't really know if that's going to be right or not, but just looking at the future, connecting the dots, it's probably not going to look like what we've seen before, and if the cloud's an indicator it's probably going to be some weird looking stack where certain sections are working, and then evolution might fill in the other ones, so. I mean, that's my take, I mean, but standards will play a role, the communities will have to get involved around certain things, and I think that's a timeless concept. >> Timing. >> Oh, timing. I think it's going to be pretty quick, I think if you look at the years it took for internet, and then the web, everything's being compressed down, but I think it's going to be much shorter. If it was a 20 year cycle in the past, that gets shortened down to 15 with the internet, and this could be five years. So five to 10 years, that could be the impact in my mind. The question I always ask is: what year will banks no longer be involved in anything? Is that 20 years or 10 years? (laughs) Exactly, so, yeah, follow the money. >> So I would say that in terms of trying to keep your finger on the pulse with things and how you kind of things, see things evolve; things are definitely moving a lot faster, you know in the past you would probably say seven to 10, I'm not sure if I would say five, sorry five to 10, it definitely feels to me that it's five max til we could start to see some of these key things fall into place, so. >> So could you answer the first question? >> What was the first question? >> Why didn't you hire me? (audience cringes) >> We've met before? Sorry. (all laugh) >> I have a question, this is Dave Vellante, Co-Host of theCUBE. And I want to pick up on something John you just said, and Matt you were talking about Goldman Sachs and Morgan Stanley, it's not about them saving hundreds of millions of dollars, it's really about them transforming business, so. And John, you just asked the question about banks, I want to actually get your answer to this: Will traditional banks, in your opinion, lose control of payment systems? Not withstanding your bias. (laughter) >> Yeah, I am definitely biased on this. But, I mean, I've been in front of the C-suite of banks, credit card companies, etc, and I said, you know, in about a decade, the center of what you do and how you make money is going to be zero. And, 'cause there'll be networks, and ways to transmit money that'll be by far cheaper, or will be subsidized by other networks, meaning, and those networks are Apple, Amazon, Alibaba, you know, Tencent, whatever networks that're out there, that're engaging in collaboration and commerce and everything else, they will give away payments as just a courtesy, like people give away messaging or email or something, as a courtesy to that network, and will harden that network, and it'll be built and based on blockchain technology and cryptocurrencies, so they don't necessarily have to worry about, you know, kind of subtle payments. But these new networks will start to encroach on banks, the banks are not worried about other banks today, the banks should be worried about these new networks that're being developed. >> How many people still have a home phone line? >> That was elegant, I like that. >> You know, I mean there's a generation of people that still like going to banks, they'll keep them in business for a while. But I think that comes to an end. >> I mean, when we covered a lot of the big data market when it started, the argument was mobile will kill the banks outlets, and now with ATMs there's more bank, more baking branches than ever before, so I think the services piece is interesting. >> And also, if you look at even the cloud basis, the software as a service, SaaS space, a decade, decade and a half ago, you would ask SAP, Oracle, what have you, what's your cloud strategy? And they'd be like cloud? That's just more efficient delivery model, not interested. 90 some billion dollars of M and A later, SAP, Oracle, etc, are cloud companies, right? And so, if banks kind of get into that same mode to say well, yeah, we need to play catch up and buy digital currency exchanges and multi-currency wallets, and this infrastructure and plumbing to be relevant in the next world, that would be interesting. But I think technology companies have as much an advantage to do that as as financial services companies, so it'll be interesting to see who kind of goes into that, goes into the crypto ecosystem to make that their own. >> It's interesting. We were talking before we came on and the OSS market, operational support systems is booming, and that's traditionally been these big operational outsource companies would manage big projects, but, if you look at in the first half of 2018, there's been a greater than 20 billion dollar commercial exits of companies through private equity merchants, IPOs, around OSS, and that's where we see operational things happening, CoreOS, Alfresco, MuleSoft, Pivotal went public, Magneto, GitHub, Treasure Data, Fastly, Elastic, DataStax, they're all in the pipeline. These are all companies that aren't cloud, they're like running stuff in cloud, so, this could be a tell sign that potentially the the blockchain operating market is going to be potentially a big one. >> Yeah, and then even look at BitMate, the world's largest miner in crypto. So, they did about a billion dollars in profit last year, did about a billion dollars in profit just in the first quarter going public, just raised a billion dollars last month, at a reportedly 50 to 70 billion dollar evaluation in Hong Kong in the next month, and the amount of money they'll raise will eclipse what Facebook raised. And so I think the institutional, the hardware, the cloud computing, the whole ecosystem starts to like resonate and think about this space a lot differently, and we need these milestones, we need these, whether they're room huddles or data points to kind of like think about how this is going to affect your business and what you do tomorrow morning. >> Any more questions from the crowd? Audience? Okay, great, well thanks for attending, appreciate you guys watching and listening, and guys thanks for the conversation; cloud and blockchain convergence. Collision course, or is it going to happen nicely, Al? >> Yeah, I think it's going to be a convergence, I don't see it necessarily as a collision course. >> And a lot of money to be made on this opportunity these days, and cloud convergence with blockchain. >> I concur with Al, I think there's going to be convergence, I think us most smarter players will engage and figure out their models in this new crypto and tokenized era. >> Thanks so much guys, appreciate it, give these guys a round of applause. (audience applause) Thank you very much. (bubbly music)

>> Announcer: Live, from Boston, Massachusetts, it's The Cube, covering OpenStack Summit 2017. Brought to you by the OpenStack Foundation, Red Hat, and additional ecosystem support. (upbeat techno music) >> Welcome back, I'm Stu Miniman, joined by my co-host for the week, John Troyer. We've been talking this week about how OpenStack, there's real clouds, there's real deployments. I'm happy to welcome to the program two people that have done this with Adobe Advertising Cloud. We have Joseph Sandoval, who is the engineering manager at Adobe Advertising Cloud, and Nicolas Brousse, who is director of operations engineering. Gentlemen, thanks so much for joining us. >> Thank you for letting us join. >> Thank you. >> Nicolas, I'm sorry Joseph, we actually had you on the program at the Silicon Valley OpenStack Days a little while ago. Refresh our audience, though, a little bit, your background, how OpenStack fits in with your role, and what you do. >> Sure. Now, I've been in, a long time, in the OpenStack community, at that time when I was at the Silicon Valley event, I was with Lithium Technologies, so we also were an OpenStack user, but we were also kind of going through some transformation, I think, I would say we kind of really pushed the Kubernetes button for the community at that time. So I think I kind of got a little rep about being kind of like an agitator in this community to try to make the product really, you know, work for people who are actually consuming it. >> Right, so not only have you deployed OpenStack, you've done it at two different jobs now already. >> Joseph: Yes. >> People think we're still so early there, but we're already seeing that progression. Alright, Joseph, a little bit of background, yourself, what brought you to the current role in interaction with OpenStack? >> Yeah, so it's Nicolas. >> I'm sorry, yeah Nicolas, sorry, yeah. >> It's okay. >> I come from this startup company called TubeMogul that got acquired by Adobe last year, and one of our challenges as a startup was to be able to scale our cloud infrastructure and our infrastructure in general. We were a newer user of a public cloud at that time, but over the years we faced multiple challenges, not only as a cost challenge, where it gets like easily out of control with public clouds, but also technical challenge. We were in like an IP goals environment with very lean team operation. So we had to figure out a way where we can scale some of our technology and some of our platforms. And so my first technical prime was to have a reasonable cost control. And so we started to look at different cloud solutions. At the time it was like Eucalyptus, CloudStack, Open Nebula, and we tried many of these to get control, to get some time to figure out what was the solution. And we moved quickly to OpenStack and started to implement and get like some known, couple of here a journey to implement that and scale a little faster too. >> Stu, I want to point out something. In that story, at least what I took away from it, usually when you have a problem state of a lean team and you're trying to hyper growth >> Stu: In scaling. >> In scaling, the answer is public cloud. Oh, we'll just go to the public cloud, that'll solve all that problem. You chose a different way and chose a different architecture. >> Nicholas: Correct. >> Anything that brought you to that decision? >> Yeah, so there was a few factors. First one was like, well cost growth on public clouds was growing faster than the revenue in some ways, so that doesn't line up. You need to have a story that makes more sense. And the second one was really like technical. We had some very specific challenge where we're in the real-time bidding advertising, so we have a huge amount of traffic. We do want to try billions, HTTP request on the platform. All of those need to be answered in a few milliseconds, so the proximity of our partner, you can always see that as a smaller stock exchange for advertising. So we need to be close to our partner so all this auction process is happening very quickly. And we have to store huge amount of data. Any of the solution you will find on the public cloud will end up having like 50 minutes ago that's 50 milliseconds that doesn't necessarily fit our use case. >> Yeah, just maybe you can bring us inside the architecture a little bit. >> Joseph: Sure. >> Talk about, look, public cloud isn't simple, obviously costs people, you know, we understand that and there's the debate as to where those pieces fit. But you know, OpenStack, speak a little bit to how it is to put that together. Simplicity is not usually what we hear when we talk, but what worked, what didn't work, what did you have to kind of customize to kind of get things working? >> You know, I think the one thing is just coming through like, you know, two different implementations is that, yeah there is complexity. And what I really got out of this was that you know, you really just have to consume the things that you need, so we've been very lean about the APIs that we consume, what services that we think are meaningful to our business. Instead of taking really all as a service type parts of this framework, we really narrowed it down to what matched our business requirements. I think as well as kind of like how you're consuming, and I think if you noticed the keynote on Monday, all of a sudden we're seeing this new pivot of like, let us manage your cloud. And it still kind of speaks to some of the challenges that you know, the end users of OpenStack have. And I think the part that's really important for anyone that's really going on this journey is that, you know, it's how you decide to consume it, like can you start really running it within like a CICD model so that you're really getting into that dev-ops aspect of it. Even within Amazon, I think in my journey, that's one thing that I think a lot of people miss is that when they try to lift and shift, like they want to race to the public cloud, you're going to still be challenged because you haven't really fundamentally changed how you're consuming the cloud product. You're not making yourself cloud native. And I think in my journey, I've made those same mistakes. I've learned from it enough. I'm actually really realizing that it's almost bigger than OpenStack. It's almost like how as business you operate and how your teams fundamentally build their tools and how they kind of like make open source a true strategy. >> I'd love to hear about the applications that you're using in this environment. We hear it in some of the keynotes on some of the users, you know, rapid move from where they started to adding applications. You mentioned cloud native. What are the class of applications, what percentage of your business runs on that? >> Sure, yeah so the code name we've given our platform is CloudMogul. And really it comprises bare metal, primarily OpenStack, and yet we still also use Amazon, so we have all different frameworks in there, depending on the type of, you know, workload that's there. As far as like OpenStack specifically, we really just consume the court. It's compute, storage, and network. Storage is probably a little bit secondary for us, the way we have designed our platform. Network is the really key thing. And as Nicholas mentioned earlier, I mean, that's the thing that in Amazon, you'll see great choices for compute, great choices for memory, but if you try to find an affordable network, you know, intensive instance, and that's what you know, we have decided why we're doing the data center. So we really have stuck really with just the core OpenStack services. Currently our developers are looking at now rolling out Kubernetes, and they're kind of doing it in a more, you know, dev POC. And as well as we're trying to balance out like the broader Adobe strategies, like they want to move to multi-cloud, they want to use Azure. So there's quite a bit that we're trying to consume, but with the lean team, we have to really be judicious about what we decide to roll in. >> Nicholas, can you comment maybe on the applications you mentioned some of the costs. The keynote, cost compliance capabilities, does that resonate with you, and how do you choose between the public and >> I think it's more like to get back to this lean operation, it would drive like some of our info on it, like we're a technology company in some way. I mean, we are building software, we are building certain solutions. You know, our goal is to develop like an advertising solution and trend solutions at several customer. So we're on a tier to be like a storage solution for OpenStack or compute solution for OpenStack or public cloud. So we really had to focus on what is selling or best use case or solve one problem, as that's where we had like to really look at cutting the fat in some way on OpenStack and really just looking at what is going to be the best use case for us. So we liberate OpenStack for most of our bidding system and manage all those calculating for the VMs, but we also integrate that very easily with like a flat network designed with open maker, so we are about to really like get the best of both worlds, between like Permital, OpenStack, and virtualization, and know we are also like implementing like reverting on the, be able to offload some of the workload back to Amazon in Ozone, we are starting to look at Ozone like a cloud provider but for trying to revert like what's the best and consider like all the terms we have. >> Can you give us a little insight to that cloud bursting is a term that, you know, gets attention because data's tough to move, you know, where the application lives, is that you know, container, Kubernetes stuff that you're doing, expand that a little for us. >> So it's definitely challenging. It's not something that, and then we got a very quick iteration and we have been able to liberate it easily first because we are like a very simple design on the way we were managing our kernel environment on OpenStack prime mount. So it was to very easily integrate, have a direct connect to a VPC on Amazon and just offload some of the compute of these onto this VPC. So a challenge we had to learn is we are trying to understand we're in the workload and that was in iteration, when we did move back to in house, understanding like the network traffic you are getting and understanding like the back and forth between your backend and your frontend. That's something you don't really see or understand easily on public cloud. When you move back in house, then you start to see the bottlenecks and you start to learn about what is really your workload, and we are to do this again, like with cloud bursting, okay, what kind of back and forth are going between our compute services and all the backend service that it needs to access. And latency being very critical for us, we had to really measure that. >> Yeah, you never know til you try it, right? >> Exactly. >> You crawl, walk, run. Hey Joseph, you talked about CICD and rate of change. I'm kind of curious how you're seeing the rate of change of your infrastructure stack, so OpenStack, versus you said you're now kind of experimenting with Kubernetes containers in the talk. A lot of talk about containers here at the show. For me, it's becoming a little more clear where in the architectural pie, layer cake, that that, pie, layer cake, that that fits in. Can you talk about rate of change? Are you looking at, does your infrastructure need to change at the same rate as the application on top of it, or how are you all looking at it? >> You know, in just beginning this journey, the one thing that I've really took away and that was one guy on my team when I was at Lithium, where he would always talk about like really meeting your developers where they're at. And yes, there's so much change, and you have to really kind of balance it. And you know, some of these companies we've been with, we've had some software stacks that are almost a decade old. They're just not made with cloud nativeness in mind. And that's where, you know, I've always been a really like let's move forward, and that was one of the early individuals saying, you know, I was at OpenStack Prague and we were doing, you know, Kubernetes under the control plane. In hindsight I was like, well, it was a little kind of premature. It was almost a little reckless. But I think that the thing that I'm trying to do now is really just try to leverage like where our product's at. Can I help evolve the platform so that, are we 12-factored, can we get there? You know, we have big data kind of workloads. How do we like start taking frameworks that allow us so that you know, we can be in this multi-cloud world. So I think there is a challenge, you know, you're hearing all these new great things that are happening. You know, you're coming to these summits, and you're getting all this hype. But then you really got to walk away. And I just kind of do that sniff test, testing something out to see like, is it really ready? And especially with where we're at in enterprise, you know, we really have to map to security compliance. And I think those are some of the gates that we're challenged with, as well as like, is the workload that we're bringing in, have we adapted it enough so that we can really kind of push what we're doing. Cause I'd love to see us get to the point where we have the frameworks of containers and Kubernetes. But not everything for us can get there. You know, so like on the edge, we're doing billions of requests per second. Bare metal is the key thing for us. And we're running HA proxy on the edge. So the key thing for us is like, run it as code, let's count how much can we do to get this so that we can fully automate this and make it repeatable. And I think that's kind of the core ethos for the team. >> You talked about coming to different summits over the years, kind of the sniff test. What's the mood of the attendees here at OpenStack summit here in Boston this year in 2017 and is it different from previous years? >> You know, I think we seen kind of some interesting ebb and flows. I think when I was in Barcelona, it was definitely different. I was kind of like surprised, it just felt like it was a little bit less energy. Austin I thought was tremendous, it was a great event. And I kind of feel like, I think there's a little bit more pragmatism that set in, which I think is really healthy and a sign of maturity that you know, people are really kind of understanding instead of getting caught up in that, the cloud hype, you know, public versus private and all these things. I think now we're starting to see a more mature audience. I think OpenStack foundation and the community has also kind of adapted as well. I know they try to be everything for everybody under the cloud in a data center. And I think now we're actually seeing a more healthy approach, so for me I think there's still a lot of energy there. Maybe it's getting a little boring, which to me in my world, that's a good thing. >> Nicholas, I'm curious, do you either at this show or at other events, how are you working with your peers in the industry to understand that kind of hybrid multi-cloud model and sort that out, you know, resources you go to, conversations you have, you know, how do you create that learning? >> So, first it's I come from the culture that's from the startup to Mogul that got a prior where we're ready for costs on the customer and the end goal of what we are trying to build. And we are not necessarily driven by the technology itself, we really try to devise technology to solve a problem. We have a lot of geek on our team, and that's what drives some of our discussion. But we're really more trying to look at how we drive the product for our world. And that's really like most of the discussion, even with our product, like we started a year ago to use the Fastly file pen to sort some specific problem where we can't have like a global footprint as much as the city and provider. And they were able to address like some of a specific use case, where they can do like a synchronous looking for us. And that was something like a specific business case for us, and every time we go like to an event or technology, we are trying to see like what are we trying to solve? And that's what drives most of our discussions. >> Joseph, sounds like you've given feedback and been on some of the leading edge of some of the activities. Is there anything you look at where you're hoping for a little bit more maturity, either OpenStack in general or the vendor community out there, you know, what are you hoping to see, you know, as we mature this even further? >> Sure, I mean I would say one thing about, you know, the OpenStack community. And I know this was always kind of one of my early beefs about it. It felt so vendor-centric, and very vendor-influenced that it just didn't really for me feel like the actual consumers, the individuals who really are using these platforms are really being heard. So I think they need to still kind of really force it, really listen to that feedback from the community, what's working, what's not working. As far as what I'd love to see, is you know, I think there's been a little bit more of like a correction I guess in a sense of like all the kind of like services that were out there, these side projects. I think there was a lot of messaging about like let's all work together, which I think is kind of, I just kind of wince a little bit. But I'm like, it's good, I'm glad that they've kind of come to this recognition. I'd love to see more and more of that. But I also want to make sure that the OpenStack community, like stay distinct. I'm not sure if I 100% think like, leveraging off the Kubernetes community, like yes, work together, let's make these things, you know, coexist and stuff. But I do hear some things where like, hey, we should just make this service be the backend for Kubernetes. I'm like, hmm. I don't think you've really looked at the framework of some of these APIs and how they're going to integrate in that environment. And I actually would like to see them develop, you know, distinctly, but you know, find some really friendly integration points so that me as a consumer, I can like easily use these as we evolve and our platform evolves, I can easily kind of start roadmapping these into our platform. >> Alright, Nicholas and Justin, really appreciate you giving us the update, and we'd love to get that real practitioner viewpoint. John and I will be back with more coverage here from OpenStack 2017 in Boston. You're watching The Cube. (upbeat techno music)