>> From the Regency Center in San Francisco, it's theCUBE, covering Serverlessconf, San Francisco, 2018. Brought to you by SiliconANGLE Media. >> Hi, I'm Stu Miniman, and you're watching theCUBE here at Serverlessconf, 2018 in San Francisco. Happy to welcome to the program Michael Garski, who's the director of platform engineering at Fender. Thanks so much for joining me. >> Thanks, Stu. Thanks for having me on. >> All right, so, luckily, I don't need to introduce Fender because I think most of our audience will be familiar with, you know, Fender, guitars, music, all that stuff, but we're going to talk a little bit about the tech side. >> Okay. >> Even though, let me ask, there's a question I usually ask. Most companies, you know, going through the digital transformation, lots of changes there. How does digital impact Fender? >> Digitally, Fender started a digital division in late 2015 and it was a focus on all-new digital products to complement our well-known physical products. Since then we've launched Fender Mod Shop, where a user can order a customized guitar online, have it delivered in a month. We have a single sign-on solution across all of our web and mobile applications, a guitar tuner, we have connected amplifiers, with companion apps to control amplifiers remotely. And our flagship product is Fender Play, which is an instructional app which allows the user to learn to play guitar, ukulele, and coming soon, bass. >> Love it. I'm guessing that has something to do with what you're involved with on the cloud and Serverless side to enable those technologies on the mobile side. >> Exactly. We've fully embraced AWS Lambda to support all of the services for the web and mobile applications. >> Okay, so A Cloud Guru's a training company and we've talked to them extensively as to why Serverless was a good fit for them, and enabled them to do it, but bring us through what led to your adoption of AWS Lambda, give us a little bit about what kind of technologies you were using before, and how you got to this solution. >> Well, we started out building services and go, just standard EC2 based microservices, and then we started tinkering a bit with Lambda. We had to adjust the product catalog from SAP. They could deliver a file, drop it into an S3 bucket, so it was simple enough to create a function that can process that file and ingest it into elastic search. From there, we used custom authorizers with API Gateway mapping templates to save custom tunings for users, and then as we started building for Tone and Play, Tone especially is a very limited audience. It's whoever buys the amplifiers. So we're not talking millions of people, it's going to be hundreds of thousands. So, it was a very good use case to go ahead and do that. Same thing with Play, we're starting a new business that's a great model for us, that we can just pay per usage. >> All right, so, yeah it sounds like you were using cloud and the usage model fit for what Serverless was built for, correct? >> Exactly, yes. >> All right, how much is management aware of, you know, kind of the underlying technology? Is your group, kind of just allowed free reign to kind of deal with this? Or are there anything you need to go to the CFO, and be like, well, you know our billings going to change a little bit compared to what you might have known in the past? >> It's, we pretty much have free reign. And our biggest AWS expense is actually what we pay for, in AWS Glacier for storage for the raw footage, of all the 4K footage from, instructional video shoots, and Lambda on top of that is simply a rounding error. >> Yeah, excellent. And the mobile apps that you've built, are there trials on there? Is everybody up to sign-up to be able to use it? Is it a freemium model or is it a paid model? >> The Tuner is a completely free application. There is an in-app purchase for cord and scale libraries, and some pro features of the tuner. Custom tunings are free. The Play application comes with a 30-day free trial, so user can sign up either on the web, or via the Google or Apple app stores on their mobile device. >> Okay, so, with that kind of model, I would think that Lambda would be nice. There's, you know, you said your expenses aren't that high using this kind of service. >> No, not at all, like I, in the month of June, we spent, I think it was like $132 for 68 million Lambda invocations. And to kind of put that in perspective a bit, it's what we pay for some EC2 services, EC2 instances that support our legacy authentication service, but we're also moving that over to Cognito now so we can get rid of all the EC2 instances. >> Okay, when you started using this technology, how'd you first learn about it? How'd you get up to speed on it? Tell us a little bit about kind of, training adoption. >> It was a lot of experimentation. So, we have it set up where we use one account for our QA and production environments and another account for our development environment. All the engineers on the team have free-reign to do whatever they want to in the development environment. They can spin up whatever they need to. So we just started playing around with things and experimenting. Like, let's hook up Lambda function to API Gateway, oh, this is going to work really well! And just kind of proceeded down that path. >> All right, great, and any learnings, anything that you tried playing with and said, like wow, this just isn't going to be a fit for what I need? Tell us, you know, what worked, what didn't? >> I would say about the only thing we found that really doesn't fit within Lambda and Serverless would be really very low latency applications. You're doing an auto complete for a search system. You want that snappy. It's, humans observe, I think it's about 100 milliseconds things seemed instantaneous, and that's going to be very challenging to get from API Gateway Lambda to get that consistently. >> Okay, great. And you're speaking here at the conference, how'd that end up happening, what are you looking to share with your peers? >> How it happened was I submitted a talk for a conference and then Drew from A Cloud Guru approached me and asked me to submit I had to tell him I already did, so they went ahead and approved it. And, I'm sharing what we've done and built at Fender Digital, and sort of what we found as far as tools for monitoring, performance optimization, as well as some things to really be cautious of when you're dealing with Lambda, especially with regards to concurrency controls. >> 'Kay, great and, how have you found the show so far? You were at the keynote, got about 500 people here. >> Yeah, it's really interesting. I'd really like the focus all on Serverless. You see, go to a lot of conferences, there might be one or two talks that kind of focus on that. It's nice to have something completely focused in that space. >> All right, and, you know, from a maturity standpoint, are there things that you're looking for in the roadmap from Amazon? They've been baking Serverless kind of into all of their services, so do you expect to stay on Lambda, or are there other services that kind of, you know FAZ or Serverless built into it that you might be using? >> We expect to stay on Lambda for the near term. I don't, we don't have any plans or looking at anything else like Azure or Google Cloud functions, our intention is to stay with AWS. They have a lot of other services, their new machine learning services, we use DynamoDB quite extensively, and so we're probably going to stick with them. >> Yeah, but inside Amazon, they've been expanding their Serverless portfolio as it was. >> Oh, yeah. >> And I remember, I was at the show when Lambda was announced, and then, you know it's Aurora with Serverless underneath and all those, so do you expect to adopt some of those other services that have AWS Serverless kind of baked into it as opposed to just using, kind of a Lambda tool. >> Absolutely, especially with, you just mentioned the Aurora Serverless model. That's one that we're taking a look at and evaluating as we've got some data in DynamoDB, but as requirements have shifted in the business over time it's really, it's becoming very difficult to model in DynamoDB, so we're going to kind of take a look at that, and possibly move to Aurora Serverless. >> I'm curious, how does Fender, does Fender think of the data involved? Is that something that, you mentioned AI, some of these, is that something that you'll be able to take the data and leverage that potentially even make new business revenue streams out of that in the future? >> We're doing some of that already by just watching user, analyzing user behavior so we can improve our products internally. And we're looking at adding more features to where we can really understand what people are doing, and then make our products better. >> All right. Michael, want to give you the final word. For your peers out there that might be saying hey, I've heard of Serverless, I'm kind of thinking at it, what advice would you give them? >> Just dive in, get started, don't hesitate. It's, it doesn't cost you anything, really to experiment with it. That model works very, very nice. >> Yeah, and it's one of the things that's great. It used to be you would take a lot of period of time and some big investment to be able to try a technology out or maybe you would get some demo, but Serverless is pretty easy to get started on. >> Exactly. Especially if you're using a framework like say, Serverless framework, or maybe using AWS. Excuse me, AWS's Serverless application model, it really helps as far as setting up all the resources that your function needs as well. >> All right well, Michael really appreciate you riffing with us on your deployments with Serverless and hope your peers will definitely check it out. All right, lots more coverage here from The Serverless Conference here in San Fransisco. I'm Stu Miniman, and thanks for watching theCUBE. (electronic music)

>>from around the >>globe. It's the Cube with digital coverage of AWS reinvent 2020 sponsored by Intel and AWS. Yeah, >>Hi. We are the Cube live covering AWS reinvent 2020. I'm Lisa Martin, and I've got one of our cube alumni back with me. Mike Miller is here. General manager of A W s AI Devices at AWS. Mike, welcome back to the Cube. >>Hi, Lisa. Thank you so much for having me. It's really great to join you all again at this virtual reinvent. >>Yes, I think last year you were on set. We have always had to. That's at reinvent. And you you had the deep race, your car, and so we're obviously socially distance here. But talk to me about deepracer. What's going on? Some of the things that have gone on the last year that you're excited >>about. Yeah, I'd love to tell. Tell you a little bit about what's been happening. We've had a tremendous year. Obviously, Cove. It has restricted our ability to have our in person races. Eso we've really gone gone gangbusters with our virtual league. So we have monthly races for competitors that culminate in the championship. Um, at reinvent. So this year we've got over 100 competitors who have qualified and who are racing virtually with us this year at reinvent. They're participating in a series of knockout rounds that are being broadcast live on twitch over the next week. That will whittle the group down to AH Group of 32 which will have a Siris of single elimination brackets leading to eight finalists who will race Grand Prix style five laps, eight cars on the track at the same time and will crown the champion at the closing keynote on December 15th this year. >>Exciting? So you're bringing a reinforcement, learning together with with sports that so many of us have been missing during the pandemic. We talked to me a little bit about some of the things that air that you've improved with Deep Racer and some of the things that are coming next year. Yeah, >>absolutely so, First of all, Deep Racer not only has been interesting for individuals to participate in the league, but we continue to see great traction and adoption amongst big customers on dare, using Deep Racer for hands on learning for machine learning, and many of them are turning to Deep Racer to train their workforce in machine learning. So over 150 customers from the likes of Capital One Moody's, Accenture, DBS Bank, JPMorgan Chase, BMW and Toyota have held Deep Racer events for their workforces. And in fact, three of those customers Accenture, DBS Bank and J. P. Morgan Chase have each trained over 1000 employees in their organization because they're just super excited. And they find that deep racers away to drive that excitement and engagement across their customers. We even have Capital one expanded this to their families, so Capital One ran a deep raise. Their Kids Cup, a family friendly virtual competition this past year were over. 250 Children and 200 families got to get hands on with machine learning. >>So I envisioned some. You know, this being a big facilitator during the pandemic when there's been this massive shift to remote work has have you seen an uptick in it for companies that talking about training need to be ableto higher? Many, many more people remotely but also train them? Is deep Racer facilitator of that? Yeah, >>absolutely. Deep Racer has ah core component of the experience, which is all virtualized. So we have, ah, console and integration with other AWS services so that racers can participate using a three d racing simulator. They can actually see their car driving around a track in a three D world simulation. Um, we're also selling the physical devices. So you know, if participants want to get the one of those devices and translate what they've done in the virtual world to the real world, they can start doing that. And in fact, just this past year, we made our deep race or car available for purchase internationally through the Amazon Com website to help facilitate that. >>So how maney deep racers air out there? I'm just curious. >>Oh, thousands. Um, you know, And there what? What we've seen is some companies will purchase you, know them in bulk and use them for their internal leagues. Just like you know, JP Morgan Chase on DBS Bank. These folks have their own kind of tracks and racers that they'll use to facilitate both in person as well as the virtual racing. >>I'm curious with this shift to remote that we mentioned a minute ago. How are you seeing deepracer as a facilitator of engagement. You mentioned engagement. And that's one of the biggest challenges that so Maney teams develops. Processes have without being co located with each other deep Brister help with that. I mean, from an engagement perspective, I think >>so. What we've seen is that Deep Racer is just fun to get your hands on. And we really lower the learning curve for machine learning. And in particular, this branch called reinforcement Learning, which is where you train this agent through trial and error toe, learn how to do a new, complex task. Um, and what we've seen is that customers who have introduced Deep Racer, um, as an event for their employees have seen ah, very wide variety of employees. Skill sets, um, kind of get engaged. So you've got not just the hardcore deep data scientists or the M L engineers. You've got Web front end programmers. You even have some non technical folks who want to get their hands dirty. Onda learn about machine learning and Deep Racer really is a nice, gradual introduction to doing that. You can get engaged with it with very little kind of coding knowledge at all. >>So talk to me about some of the new services. And let's look at some specific use case customer use cases with each service. Yeah, >>absolutely. So just to set the context. You know, Amazon's got hundreds. A ws has hundreds of thousands of customers doing machine learning on AWS. No customers of all sizes are embedding machine learning into their no core business processes. And one of the things that we always do it Amazon is We're listening to customers. You know, 90 to 95% of our road maps are driven by customer feedback. And so, as we've been talking to these industrial manufacturing customers, they've been telling us, Hey, we've got data. We've got these processes that are happening in our industrial sites. Um, and we just need some help connecting the dots like, how do we really most effectively use machine learning to improve our processes in these industrial and manufacturing sites? And so we've come up with these five services. They're focused on industrial manufacturing customers, uh, two of the services air focused around, um, predictive maintenance and, uh, the other three services air focused on computer vision. Um, and so let's start with the predictive maintenance side. So we announced Amazon Monitor On and Amazon look out for equipment. So these services both enable predictive maintenance powered by machine learning in a way that doesn't require the customer to have any machine learning expertise. So Mono Tron is an end to end machine learning system with sensors, gateway and an ML service that can detect anomalies and predict when industrial equipment will require maintenance. I've actually got a couple examples here of the sensors in the gateway, so this is Amazon monitor on these little sensors. This little guy is a vibration and temperature sensor that's battery operated, and wireless connects to the gateway, which then transfers the data up to the M L Service in the cloud. And what happens is, um, the sensors can be connected to any rotating machinery like pump. Pour a fan or a compressor, and they will send data up to the machine learning cloud service, which will detect anomalies or sort of irregular kind of sensor readings and then alert via a mobile app. Just a tech or a maintenance technician at an industrial site to go have a look at their equipment and do some preventative maintenance. So um, it's super extreme line to end to end and easy for, you know, a company that has no machine learning expertise to take advantage of >>really helping them get on board quite quickly. Yeah, >>absolutely. It's simple tea set up. There's really very little configuration. It's just a matter of placing the sensors, pairing them up with the mobile app and you're off and running. >>Excellent. I like easy. So some of the other use cases? Yeah, absolutely. >>So So we've seen. So Amazon fulfillment centers actually have, um, enormous amounts of equipment you can imagine, you know, the size of an Amazon fulfillment center. 28 football fields, long miles of conveyor belts and Amazon fulfillment centers have started to use Amazon monitor on, uh, to monitor some of their conveyor belts. And we've got a filament center in Germany that has started using these 1000 sensors, and they've already been able to, you know, do predictive maintenance and prevent downtime, which is super costly, you know, for businesses, we've also got customers like Fender, you know, who makes guitars and amplifiers and musical equipment. Here in the US, they're adopting Amazon monitor on for their industrial machinery, um, to help prevent downtime, which again can cost them a great deal as they kind of hand manufacture these high end guitars. Then there's Amazon. Look out for equipment, which is one step further from Amazon monitor on Amazon. Look out for equipment. Um provides a way for customers to send their own sensor data to AWS in order to build and train a model that returns predictions for detecting abnormal equipment behavior. So here we have a customer, for example, like GP uh, E P s in South Korea, or I'm sorry, g S E P s in South Korea there in industrial conglomerate, and they've been collecting their own data. So they have their own sensors from industrial equipment for a decade. And they've been using just kind of rule basic rules based systems to try to gain insight into that data. Well, now they're using Amazon, look out for equipment to take all of their existing sensor data, have Amazon for equipment, automatically generate machine learning models on, then process the sensor data to know when they're abnormalities or when some predictive maintenance needs to occur. >>So you've got the capabilities of working with with customers and industry that that don't have any ML training to those that do have been using sensors. So really, everybody has an opportunity here to leverage this new Amazon technology, not only for predicted, but one of the things I'm hearing is contact list, being able to understand what's going on without having to have someone physically there unless there is an issue in contact. This is not one of the words of 2020 but I think it probably should be. >>Yeah, absolutely. And in fact, that that was some of the genesis of some of the next industrial services that we announced that are based on computer vision. What we saw on what we heard when talking to these customers is they have what we call human inspection processes or manual inspection processes that are required today for everything from, you know, monitoring you like workplace safety, too, you know, quality of goods coming off of a machinery line or monitoring their yard and sort of their, you know, truck entry and exit on their looking for computer vision toe automate a lot of these tasks. And so we just announced a couple new services that use computer vision to do that to automate these once previously manual inspection tasks. So let's start with a W A. W s Panorama uses computer vision toe improve those operations and workplace safety. AWS Panorama is, uh, comes in two flavors. There's an appliance, which is, ah, box like this. Um, it basically can go get installed on your network, and it will automatically discover and start processing the video feeds from existing cameras. So there's no additional capital expense to take a W s panorama and have it apply computer vision to the cameras that you've already got deployed, you know, So customers are are seeing that, um, you know, computer vision is valuable, but the reason they want to do this at the edge and put this computer vision on site is because sometimes they need to make very low Leighton see decisions where if you have, like a fast moving industrial process, you can use computer vision. But I don't really want to incur the cost of sending data to the cloud and back. I need to make a split second decision, so we need machine learning that happens on premise. Sometimes they don't want to stream high bandwidth video. Or they just don't have the bandwidth to get this video back to the cloud and sometimes their data governance or privacy restrictions that restrict the company's ability to send images or video from their site, um, off site to the cloud. And so this is why Panorama takes this machine learning and makes it happen right here on the edge for customers. So we've got customers like Cargill who uses or who is going to use Panorama to improve their yard management. They wanna use computer vision to detect the size of trucks that drive into their granaries and then automatically assign them to an appropriately sized loading dock. You've got a customer like Siemens Mobility who you know, works with municipalities on, you know, traffic on by other transport solutions. They're going to use AWS Panorama to take advantage of those existing kind of traffic cameras and build machine learning models that can, you know, improve congestion, allocate curbside space, optimize parking. We've also got retail customers. For instance, Parkland is a Canadian fuel station, um, and retailer, you know, like a little quick stop, and they want to use Panorama to do things like count the people coming in and out of their stores and do heat maps like, Where are people visiting my store so I can optimize retail promotions and product placement? >>That's fantastic. The number of use cases is just, I imagine if we had more time like you could keep going and going. But thank you so much for not only sharing what's going on with Deep Racer and the innovations, but also for show until even though we weren't in person at reinvent this year, Great to have you back on the Cube. Mike. We appreciate your time. Yeah, thanks, Lisa, for having me. I appreciate it for Mike Miller. I'm Lisa Martin. You're watching the cubes Live coverage of aws reinvent 2020.

>> live from New York. It's the Q covering AWS Global Summit 2019 brought to you by Amazon Web service, is >> welcome back here in New York City on stew Minimum. My co host is Corey Quinn. In the keynote this morning, Warner Vogel's made some new announcements what they're doing and also brought out a couple of customers who are local and really thrilled and excited to have on the program the C i O and E V P from Finn Ra here in New York City. Steve Randall, thanks so much for joining us. You're welcome. Thank you. All right, so, you know, quite impressive. You know when when I say one of those misunderstood words out there to talk about scale and you talk about speed and you know, you were you know, I'm taking so many notes in your keynote this 1 500,000 compute note. Seven terabytes worth of new data daily with half a trillion validation checks per day, some pretty impressive scale, and therefore, you know, it's I t is not the organ that kind of sits in the basement, and the business doesn't think about it business and I t need to be in lobster. So, you know, I think most people are familiar with in Rome. But maybe give us the kind of bumper sticker as Thio What dinner is today and you know, the >> the organization. Yeah, I started it Fender and 2013. I thought I was gonna come into a typical regulator, which is, as you alluded to technologies, kind of in the basement. Not very important, not strategic. And I realized very quickly two things. Number one, The team was absolutely talented. A lot of the people that we've got on her team came from start ups and other technology companies. Atypical financial service is and the second thing is we had a major big data challenge on our hands. And so the decision to go to the cloud S I started in March 2013. By July of that year, I was already having dialogue with our board of directors about having to go to the cloud in orderto handle the data. >> Yeah, so you know, big data was supposed to be that bit flip that turned that. Oh, my God. I have so much data to Oh, yea, I can monetize and do things with their data. So give us a little bit of that, That data journey And what? That that you talk about the flywheel? The fact that you've got inside Finneran. >> Yeah. So we knew that we needed the way were running at that time on data warehouse appliances from E, M. C. And IBM. And which a data warehouse appliance. You go back 10 15 years. That was where big data was running. But those machines are vertically scalable, and when you hit the top of the scale, then you've got to buy another bigger one, which might not be available. So public cloud computing is all about horizontal scale at commodity prices to things that those those data data warehouse appliance didn't have. They were vertical and proprietary, inexpensive. And so the key thing was to come up to select the cloud vendor between Google, IBM, You know, the usual suspects and architect our applications properly so that we wouldn't be overly vendor dependent on the cloud provider and locked in if you will, and that we could have flexibility to use commodity software. So we standardized in conjunction with our move to the public cloud on open source software, which we continue today. So no proprietary software for the most part running in the cloud. And we were just very smart about architect ing our systems at that point in time to make sure that those opportunities prevailed. And the other thing I would say, this kind of the secret of our success Is it because we were such early adopters we were in the financial service industry and a regulator toe boots that we had engineering access to the cloud providers and the big, big date open source software vendors. So we actually had the engineers from eight of us and other firms coming in to help us learn how to do it, to do it right. And that's been part of our culture ever since. >> One thing that was, I guess a very welcome surprise is normally these keynotes tend to fall into almost reductive tropes where first, we're gonna have some Twitter for pet style start up talking about all the higher level stuff they're doing, and then we're gonna have a large, more serious company. Come in and talk about how we moved of'em from our data center into the cloud gay Everyone clap instead, there was it was very clear. You're using higher level, much higher level service is on top of the cloud provider. It's not just running the M somewhere else in the same way you would on premise. Was that a transitional step that you went through or did you effectively when you went all in, start leveraging those higher service is >> okay. It's a great question. And ah, differentiator for us versus a lot. A lot of the large organizations with a legacy footprint that would not be practical to rewrite. We had outsourced I t entirely in the nineties E T s and it was brought back in source in in house early in this decade. And so we had kind of a fresh, fresh environment. Fresh people, no legacy, really other than the data warehouse appliances. So we had a spring a springboard to rewrite our abs in an agile way to be fully cloud enabled. So we work with eight of us. We work with Cloudera. We work with port works with all the key vendors at that time and space to figure out how to write Ah wraps so they could take most advantage of what the cloud was offering at that time. And that continues to prevail today. >> That that's a great point because, you know so often it's that journey to cloud. But it's that application modernization, that journey. Right. So bring us in little inside there is. You know how it is. You know, what expertise did Finn Ra have there? I mean, you don't want to be building applications. It is the open stuff source. The things wasn't mature enough. How much did they have toe help work, you know, Would you call it? You know, collaboration? >> Yeah. The first year was hard because I would have, you know, every high performance database vendor, and I see a number of them here today. I'm sure they're paddling their AWS version now, but they had a a private, proprietary database version. They're saying if you want to handle the volumes that you're seeing and predicting you really need a proprietary, they wouldn't call it proprietary. But it was essentially ah, very unique solution point solution that would cause vendor dependency. And so and then and then my architects internally, we're saying, No way, Wanna go open source because that's where the innovation and evolution is gonna be fastest. And we're not gonna have vendor Lock in that decision that that took about a year to solidify. But once we went that way, we never looked back. So from that standpoint, that was a good bad, and it made sense. The other element of your question is, how How much of this did we do on our own, rely on vendors again? The kind of dirty little secret of our beginnings here is that we ll average the engineer, you know, So typically a firm would get the sales staff, right. We got the engineers we insisted on in orderto have them teach our engineers how to do these re architectures to do it right. Um and we use that because we're in the financial service industry as a regulator, right? So they viewed us as a reference herbal account that would be very valuable in their portfolio. So in many regards, that was way scratch each other's back. But ultimately, the point isn't that their engineers trained our engineers who trained other engineers. And so when I when I did the, uh um keynote at the reinvented 2016 sixteen one of my pillars of our success was way didn't rely overly on vendors. In the end, we trained 2016 1 5 to 600 of our own staff on how to do cloud architectures correctly. >> I think at this point it's very clear that you're something of an extreme outlier in that you integrate by the nature of what you do with very large financial institutions. And these historically have not been firms that have embraced the cloud with speed and enthusiasm that Fenner has. Have you found yourself as you're going in this all in on the cloud approach that you're having trouble getting some of those other larger financial firms to meet you there, or is that not really been a concern based upon fenders position with an ecosystem? >> Um, I would say that five years ago, very rare, I would say, You know, we've had a I made a conscious effort to be very loud in the process of conferences about our journey because it has helped us track talent. People are coming to work for us as a senior financial service. The regulator that wouldn't have considered it five years ago, and they're doing it because they want to be part of this experience that we're having, but it's a byproduct of being loud, and the press means that a lot of firms are saying, Well, look what Fender is doing in the cloud Let's go talk to them So we've had probably at this 50.200 firms that have come defender toe learn from our experience. We've got this two hour presentation that kind of goes through all the aspects of how to do it right, what, what to avoid, etcetera, etcetera. And, um, you know, I would say now the company's air coming into us almost universally believe it's the right direction. They're having trouble, whether it's political issues, technology dat, you name it for making the mo mentum that we've made. But unlike 45 years ago, all of them recognize that it's it's the direction to go. That's almost undisputed at this point. And you're opening comment. Yeah, we're very much an outlier. We've moved 97 plus percent of our APS 99 plus percent of our data. We are I mean, the only thing that hasn't really been moved to the cloud at this point our conscious decisions, because those applications that are gonna die on the vine in the data center or they don't make sense to move to the cloud for whatever reason. >> Okay, You've got almost all your data in the cloud and you're using open source technology. Is Cory said if I was listening to a traditional financial service company, you know, they're telling me all the reasons that for governance and compliance that they're not going to do it. So you know, why do you feel safe putting your your data in the cloud? >> Uh, well, we've looked at it. So, um, I spent my first year of Finn run 2013 early, 2014 but mostly 2013. Convincing our board of directors that moving our most critical applications to the public cloud was going to be no worse from the information security standpoint than what we're doing in our private data centers. That presentation ultimately made it to other regulators, major firms on the street industry, lobbyist groups like sifma nephi. AP got a lot of air time, and it basically made the point using logic and reasoning, that going to the cloud and doing it right not doing it wrong, but doing it right is at least is secure from a physical logical standpoint is what we were previously doing. And then we went down that route. I got the board approval in 2015. We started looking at it and realizing, Wait a minute, what we're doing here encrypting everything, using micro segmentation, we would never. And I aren't doing this in our private data center. It's more secure. And at that point in time, a lot of the analysts in our industry, like Gardner Forrester, started coming out with papers that basically said, Hey, wait a minute, this perception the cloud is not as safe is on Prem. That's wrong. And now we look at it like I can't imagine doing what we're doing now in a private data center. There's no scale. It's not a secure, etcetera, etcetera. >> And to some extent, when you're dealing with banks and start a perspective now and they say, Oh, we don't necessarily trust the cloud. Well, that's interesting. Your regulator does. In other cases, some tax authorities do. You provided tremendous value just by being as public as you have been that really starts taking the wind out of the sails of the old fear uncertainty and doubt. Arguments around cloud. >> Yeah, I mean, doubts around. It's not secure. I don't have control over it. If you do it right, those are those are manageable risks, I would argue. In some cases, you've got more risk not doing it. But I will caution everything needs to be on the condition that you've got to do it right. Sloppy migration in the cloud could make you less secure. So there there are principles that need to be followed as part of >> this. So Steve doing it right. You haven't been sitting still. One of the things that really caught my attention in the keynote was you said the last four years you've done three re architectures and what I want. Understand? You said each time you got a better price performance, you know, you do think so. How do you make sure you do it right? Yet have flexibility both in an architect standpoint, and, you know, don't you have to do a three year reserves intense for some of these? How do you make sure you have the flexibility to be able to take advantage of you? Said the innovation in automation. >> Yeah. Keep moving forward with. That's Ah, that's a deep technical question. So I'm gonna answer it simply and say that we've architected the software and hardware stack such. There's not a lot of co dependency between them, and that's natural. I t. One on one principle, but it's easier to do in the cloud, particularly within AWS, who kind of covers the whole stacks. You're not going to different vendors that aren't integrated. That helps a lot. But you also have architect it, right? And then once you do that and then you automate your software development life cycle process, it makes switching out anyone component of that stack pretty easy to do and highly automated, in some cases completely automated. And so when new service is our new versions of products, new classes of machines become available. We just slip him in, and the term I use this morning mark to market with Moore's Law. That's what we aspire to do to have the highest levels of price performance achievable at the time that it's made available. That wasn't possible previously because you would go by ah hardware kit and then you'd appreciate it for five years on your books at the end of those five years, it would get kind of have scale and reliability problems. And then you go spend tens of millions of dollars on a new kit and the whole cycle would start over again. That's not the case here. >> Machine learning something you've been dipping into. Tell us the impact, what that has and what you see. Going forward. >> It's early, but we're big believers in machine learning. And there's a lot of applications for at Venera in our various investigatory and regulatory functions. Um, again, it's early, but I'm a big believer that the that the computer stored scale, commodity costs in the public cloud could be tapped into and lever it to make Aye aye and machine learning. Achieve what everybody has been talking about it, hoping to achieve the last several decades. We're using it specifically right now in our surveillance is for market manipulation and fraud. So fraudsters coming in and manipulating prices in the stock market to take advantage of trading early days but very promising in terms of what it's delivered so far. >> Steve want to give you the final word. You know, your thank you. First of all for being vocal on this. It sounds like there's a lot of ways for people to understand and see. You know what Fenner has done and really be a you know, an early indicator. So, you know, give us a little bit. Look forward, you know what more? Where's Finn Ra going next on their journey. And what do you want to see more from, You know, Amazon and the ecosystem around them to make your life in life, your peers better. >> Yes. So some of the kind of challenges that Amazon is working with us and partnering Assan is getting Ah Maur, automated into regional fell over our our industries a little bit queasy about having everything run with a relatively tight proximity in the East Coast region. And while we replicate our data to the to the other East region, we think AIM or co production environment, like we have across the availability zones within the East, would be looked upon with Maur advocacy of that architecture. From a regulatory standpoint, that would be one another. One would be, um, one of the big objections to moving to a public cloud vendor like Amazon is the vendor dependency and so making sure that we're not overly technically dependent on them is something that I think is a shared responsibility. The view that you could go and run a single application across multiple cloud vendors. I don't think anybody has been able to successfully do that because of the differences between providers. You could run one application in one vendor and another application in another vendor. That's fine, but that doesn't really achieve the vendor dependency question and then going forward for Finn or I mean, riel beauty is if you architected your applications right without really doing any work at all, you're going to continuously get the benefits of price performance as they go forward. You're not kind of locked into a status quo, So even without doing much of any new work on our applications, we're gonna continue to get the benefits. That's probably outside of the elastic, massive scale that we take advantage of. That's probably the biggest benefit of this whole journey. >> Well, Steve Randall really appreciate >> it. >> Thank you so much for sharing the journey of All right for Cory cleanups to minimum back with lots more here from eight Summit in New York City. Thanks for watching the cue

>> Hey, welcome back, everybody. Jefe Rick here with the Cube Were its roar subscribed in San Francisco. David, Jeez. Here. Last we saw you, David, I think was January when this was all building up. Now you said you have 1,500 of people passionate about subscriptions right here in downtown San Francisco. Congratulations. >> Thank you. It's great to be here, and it's great to be on Graham and on site. Like, last time we talked, we were at your office. Is you're getting ready to move? >> That's right. You have to come see the new spaces, like, way bigger >> we're looking forward to it would be great. >> So great selection of customer stories up here today. We love the customer stories and, you know, you think of classic subscriptions like Adobe Creative Cloud or you think of spotify and these things were used to You don't think about caterpillar. You don't necessarily think about Ford. So to see those guys up on stage with you and team this morning was pretty impressive. >> Yeah, So we're very excited about how the description economy is really expanded into the mainstream and large infrastructure companies who are changing the way people interact has really taken hold. I mean, a couple of examples. You mentioned So caterpillar here today, and they're showcasing today. They have all of this machinery out in the field, spin out terabytes and petabytes off telemetry data, and they're able to monetize those. They have autonomous vehicles, virtual reality drones over job sites. All of that is available now as a subscription. We have Ford here today who are talking about the next generation off the company, moving from a car and all my bill company to a transportation company. A meeting that customers where they need to be meeting met where, whether it's Van Services here in San Francisco, like chariot on bicycles and knowing their customer from the moment they pick up their vehicle from they call it from bed to bed from waking up in the morning till the lasting negative at night and having the whole transportation structure around them, enabling them to do some things like that. It's over exciting. >> I thought it was funny. Todd Buckler, who was up on stage from caterpillars, explicitly said, We're not going to be a software company. We like making big iron things, but man, oh man, listen to the description of the services that they're delivering to their customers that benefit the customers, get the benefits they get. As you said, with all the telemetry data, it's very different than just building a unit, shipping it to the dealer. The dealer sense. Tow the farmer, the construction worker. And maybe you get some data back when it comes in for maintenance down, then totally changing >> it totally changes. And what it does, is it. It helps predict downtime that helps predict offline activity, which could be in the hundreds of thousands or millions of dollars. In the case of aircraft engines with G We who we had, I stayed well today when those things go down in an unpredictable fashion that causes enormous impact from a revenue, profitability and forecasting standpoint, so that telemetry data can understand their stresses and strains based on environmental factors in Miami does it? I'm gonna call whether acclimate I'm a jet engine, doing short hops versus long harps that provides enormous insight and sophistication for a customer to enable them to plan. And it's all based on this data, which in turn is delivered this part of the subscription >> right and then take it to the next level. Right? This whole theme around democratization of data, democratization of the tools to the data. Yeah, obviously a plane operating in Alaska is going to have different characteristics and one operating in the desert. But what about pilot characteristics? You know, you could just you can You can leverage the power of all the people in your company to start developing hypothesis, testing those hypothesis and driving innovation around a much broader kind of front, if you will. >> Absolutely. And what we're seeing is that the senses air going into everything. So we think about senses and engines. But the aircraft frames themselves of now increasingly having sex, right? How many stresses and strains, we know how many takeoffs and landings. But are they short hop of a long? Are they going over the pole of the growing of the Atlanta They're going over the United States as an example? All of those have different implications for the service and the support, longevity and also the economics. And that data telemetry has intrinsic value that is now being monetized in ways that we've never seen before. >> So the other interesting thing to me that I don't think it's enough talk. David is, is thinking of your customers is either in a club or as a member with this recurring membership, as opposed to transactional customer we had in speech in sporadic on You know, they have a club we had, sir. Fair on. You know you're a member. It's a very different way to think about the people that are your customers. And because you have this ongoing repeat revenue process with them, you know you have to keep delivering value. You have to keep them subscribed, if you will, because it's a very different way to build a relationship on engagement. >> Yes, so we see that is this evolution of from ownership to being a subscriber. Whether it is a second vacation home is a great example. In the case of in Speranza Oh, they've gone from 0 0 to 15,000 members in just a few short years, and they're offering this highly curated, personalized luxury vacation experience that is very individual, very individual and curated. That's a whole new market place, and it's disrupting high end hotels. It's disrupting whether you want a second vacation home, but you always have to go back to write, but also on the show floor. Here we have companies like 11 James. So if you're a watch fanatic and you have a fancy watch, guess what? When you have one fancy watch you pretty one another one right instead of owning them and putting those assets in the safe or in the drawing for months at a time, once you have a new one sent you every single month or every quarter and just change them out for variety. So we see that time and time again as we move from ownership to subscription, you see it in cause you said an asset. Music is part of the case that most people are familiar with. You've gone from your case full of CDs, your case full of DVDs to your streaming services and you're seeing with entertainment. >> Right? Is interesting. Teen in the Kino talked about being free of the shackles of time ownership obsolescence. So when you do consume these things as a service, it really changes the week consume because as we all know, once you get stuff and they get a garage full of stuff, stuff all breaks, it gets out of date, so it's a really an interesting way to think of it. Now. It's supports this whole kind of experience based economy. I want to share a funny story waiting with Esperanza. Oh, is that they see your commitment to subscribing. To there Club is really a demonstrated commitment to your family that you now have put on the dotted line. You're going to take quality vacation time with your family, and if you could afford it, you're probably pretty busy person, so really interesting twist on what their value proposition is. A wide support of their members. >> And actually what they said this morning was really interesting. And you think about a vacation club on a you know, a luxury curated experience. Maybe that's a week or two weeks a year. They're also filling in the gaps for the other 50 weeks a year with all kinds of local events as well. I'm building this lifestyle so it's fascinating, you know, physical experience off this description economy, and they're very sophisticated how they look at the data and looking who their subscribers, their customers are on this subscribes and customs. By definition, I suspect very demanding, >> right. So you've been doing the emcee job did a great job this morning. I'm just curious as you're walking around the show now that the keynotes air done and you can kind of walk around the exhibit hall and bumping into people any surprising stories. What are you hearing? What kind of the buzz that you that you're hearing a lot of hard work? A lot of teams. >> So So first, what? We have an amazing group here and we're so proud of of the work that we do bring the subscription economy to a physical life. You know, we had this vision some months ago when you and I talked about having a showcase and having our customers tell their stories. And you can see from the energy that we have on the show floor today there are hundreds. We have 1,500 people here this week who are experiencing lots and lots of different customers and companies. Subscription economy experiences. Tomorrow we'll hear from Andy Mooney, who is the CEO of Fender Guitar. So you think about you walk into a store, you buy a fender guitar, they're fabulous. The shadow casters and you leave. They never hear from you again. They want to turn that into a life long music experience and really change the way from learning how to play an instrument to being part of a community and having a long term relationship first is just walking out the store with a guitar >> I love. I love the fender story because again, you know it's easy to think of spotify and digital assets that you're subscribing to and deliver digitally. But they're really redefine your relationship with your customer and then to get the lifetime value. The benefits of that. Because they claim or they buy more sheet music, they buy another guitar. You know, they hang out at the store and becomes a hobby and part of a community engagement. What a brilliant, brilliant move >> exactly. And I would say if if I leave you with one final closing thought, you know the other bigger heart is that there is a looming financial accounting change that's coming where the way subscription economy cos any company with recurring revenue is going to have to change the way they account for their revenue and their expenses. It's something called 606 If you're in the financial community. You're having sleepless nights right now because it's as important as socks. Sarbanes Oxley White. Okay, right on. That's an accounting standard that's coming down the line. We'll be mandatory in December 17 or December 18. Dependent, whether you're a private or a public company. And we just acquired a company that is the market leader in automated revenue recognition. So educating the market in what is a very compelling value proposition on a compelling event that's going to hit almost everybody, >> right? All right, we'll leave that there. We'll pick it up next time, and we'll have a little bit more accounting talk. >> Sounds great. >> All right, well, thanks for taking a few minutes out of your busy day. And again, congratulations on to prevent >> we appreciate you coming. Thanks for having us. >> Absolutely. Alright. He's David GM Jefe Rick. You're watching the cue from Zor subscribed 2017 in San Francisco. Thanks for watching

(can opening) >> Hey, welcome back everybody. Jeff Frick here with theCUBE. We are live in downtown San Francisco at Zuora Subscribe 2017. 2,000 people talking about the subscription economy and subscription equals freedom, and coming right off the keynote, we're excited to have the founder and CEO, Tien Tzuo, founder of Zuora. >> Great to be here. >> Jeff: Well first of all, great job on the keynote. >> Oh, thanks. Thanks for having me on the show. >> Great energy. You know, we hear a lot of about subscription economy. Obviously, a lot of people have Amazon Prime, a lot of us subscribe at Costco. We've got streaming music services, like Spotify. But I don't think people think of companies like Caterpillar, or Fender Guitar, as companies that have a subscription-based relationship with their customer. So before we get into the specifics, I want to talk to you, how is the subscription relationship different than a regular, one-off transactional relationship in the way that you are connected to your customer? >> Right, well, we all know that the world has changed. And we're even evangelizing at this event. This is the sixth year we're having this event. There's over 7,000 people that actually come to these events around the world. That the world is moving to a subscription economy. Starting two years ago, people said, "You know what, we get it. "This is a subscription economy. "I can feel myself, I don't buy products anymore. "I simply tap into services that I use." And the great thing about these services is the provider of these services really care about you. They want you to come back and use their services. They're constantly updating it. And it really frees us all from the shackles of product ownership when we want to get from point A to point B today. We don't have to worry about cars. We pull out our phone, tap into our service, and we're able to get what we need when we want it. >> Yeah, you have that as a really big theme. Kind of shackles of ownership, shackles of obsolescence. This idea that if you have a subscription to a service, you don't have to worry about the oil change. You don't have to worry about whether it's last year's model. You've pulled up some funny pictures of CDs and the CD wasn't even in the CD case. >> The CD, and that wasn't that long ago that we had these CD cases. >> I have empty CD cases all over my garage. I'm guilty as charged. Let's dive into this specific example. So Caterpillar is a cool example. Already having autonomous vehicles driving these big mining. That's all right, but let's talk about the Fender example, 'cause I think that's a really interesting one. What is Fender doing in terms of a subscription relationship with their customers to change who they are and what they are as a business? >> Well, we talk to companies that are going through this transformation. What they bring it down to is the shift in mindset of selling a product to thinking about customers. And so when Fender did this, an amazing transformation happened, right? They sell a lot of guitars. And when they look at shipping products out, how do I sell more guitars? And they said, "Let's not look at it that way. "Let's look at our customers." And what they found is that over 40% of their customers, guitar purchases, are first-time customers. And then 90% of the customers quit after about three months because it's just too hard. It's just too hard. And so when they look at it that way, they say, "Gosh, we have a 10% retention rate "for our customers after 90 days. "Now, if we can just extend that, "extend that out," and, oh, by the way, the 10% of customers that stay, they stay for life. They buy additional guitars. They buy additional amps. They buy sheet music. They buy picks. And so that's how we have to think. We have to not think about selling more guitars. We have to think about how to hold on to our customers for life. If we could just go from 10% to 15% to 20%, we are going to find so much more revenue and we're going to double or triple the size of our company. >> So how do they execute that with your guys' software. >> So what they need to do is they need to establish a subscriber ID. So when you buy a Fender now, there's a whole set of digital technologies that they draw you into. There's a tuning app that you can use, 'cause it's hard to tune your guitar. There's applications that teach you how to play a guitar. There's applications that you can use to play like The Edge, or play like Flea, or play like your favorite guitarist so they draw you into the process that creates social community, social networks. And what we do is we help them turn a guitar purchase into a subscription service that the customers opt into for life. >> So interesting, right? 'Cause this is not a transaction; it's an experience. And it's an engagement. And what are the other things you said in the keynote that got my attention? That there's all these other transactions now. You can buy, you can upgrade, you can pause, you can turn off, you can turn on, you can change the level. So it's this much more dynamic, engaged process and relationship between person selling the service and, arguably, guitar enjoyment, not a Fender Guitar versus an actual piece of wood and some metal strings and everything else. >> Right, what we try to talk about is this whole world of subscriptions. Ultimately, when you're successful is when you deliver freedom to customers, right? Freedom to customers that didn't have it before, right? The story of Netflix is if you have, or let's say Spotify, so you have $20 to spend, you don't have to buy one song, one album, one CD. You can access the whole library of music ever created. And there's a freedom to that. Now, what that means for businesses to react to that is that puts a lot of constraints on businesses, right? Before, they just simply take orders, give me a guitar; give me a song; give me five units of this Widget. Now they have to react to what customers want. I want this; I want this now; I want it like this; I want to upgrade; I want to downgrade. And so this creates all these constraints on businesses and what we want to talk about today was in this new world, businesses need freedom too, right? Businesses need freedom to price, to experiment, to design customer experiences, to get the information they need and what's holding them back is their IT architectures are the past. These ERP systems, and so what we presented this morning was an alternative view. A post-CR view, P, ERP view, of a new set of systems that we provide that help companies be successful and grow in this new subscription economy. >> That's a linear. Basically, that was your theme, right? Not because it's linear. >> That's right. >> It's those transaction types. >> These linear systems passed, they don't work anymore. >> Well the other thing I think is really compelling that I think needs more attention is now, if I have to pay $20 a month to Spotify, which I do. We're on the family plan. I love the service. But they have to keep delivering new value, because for me to keep paying every month, it's a much deeper relationship because they got to keep keeping me on the hook. They got to keep innovating. They got to keep delivering new things and so that's what I think is really interesting about this is the relationship between the buyer and the seller when you have an ongoing touch point every single month versus that one-time transaction. >> Well the keyword there is relationships, right? In the old model, which I'll call an asset transfer model, let me convince you to buy my product. Now you own it. I've gotten your money and I'm going to go focus on the next customer. This new model really requires me to care about the relationship, to care about the value that I'm creating, to continue to add to it to make sure that there's not an alternative out there that's moving faster and delivering things that I'm not. That relationship becomes really, really important. And that's why this model is better and that's why when you use services like a Salesforce, like an Uber, a Spotify, a Netflix, an Amazon Prime, you get the feeling that the other person, the vendor on the other side, really cares about you because, of course, they do. >> All right, so I know you're super busy. You got a lot to do but before you leave, just give your impression, you've been at this for a while, how this has grown. Has it grown faster than you expected? Is it about the same line? As you've seen the subscription economy grow from your initial vision six, seven years ago, what's your, kind of, takeaway as you sit here amongst 2,000 people that are in, arguably, the center of this universe right now? >> Gosh, when you look at this subscribed event, when you look at the energy here, And then when you look at the companies here, I would say five, six, seven years ago, we had a lot of software as service companies here. Box, they're great customers. They continue to be customers. But did we think that we would have Ford, right? Showcasing their electric bikes here? Or Caterpillar showcasing their autonomous vehicles? And these are gigantic vehicles that are carrying 200 cars in what they talked about on stage. And the world's clearly being transformed. Did I think it was going to happen? You know, we always knew the subscription economy was going to be here. We always knew the size and scope. But once you hear the stories, right, you can really tell how much our world is going to change and how much it's going to become just, simply, a better place. >> All right Tien, well congratulations to you and thanks for taking a few minutes to stop by the table. >> Thanks a lot. Thanks for having me. >> All right, he's Tien, I'm Jeff. You're watching theCUBE from Zuora Subscribe. Thanks for watching. (can opening)