>> Announcer: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. >> Hi, and welcome to this CUBE Conversation, from our Boston area studio, I'm Stu Miniman, happy to welcome to the program, first of all we have a first time guest, always love when we have a founder on the program, Anurag Goel is the founder and CEO of Render, and we've brought along a longtime friend of the program, Dr. Steve Herrod, he is a managing director at General Catalyst, a investor in Render. Anurag and Steve, thanks so much for joining us. >> Thank you for having me. >> Yeah, thanks, Stu. >> All right, so Anurag, Render, your company, the tagline is the easiest cloud for developers and startups. It's a rather bold statement, most people feel that the first generation of cloud has happened and there were certain clear winners there. The hearts and minds of developers absolutely has been a key thing for many many companies, and one of those drivers in the software world. Why don't you give us a little bit of your background, and as the founder of the company, what was it, the opportunity that you saw, that had you create Render? >> Yeah, so I was the fifth engineer at Stripe, and helped launch the company and grow it to five billion dollars in revenue. And throughout that period, I saw just how much money we were spending on just hiring DevOps engineers, AWS was a huge huge management headache, really, there's no other way to describe it. And even after I left Stripe, I was thinking hard about what I wanted to do next, and a lot of those ideas required some form of development and deployment, and putting things in production, and every single time I had to do the same thing over and over and over again, as a developer, so despite all the advancements in the cloud, it was always repetitive work, that wasn't just for my projects, I think a lot of my friends felt the same way. And so, I decided that we needed to automate some of these new things that have come about, as part of the regular application deployment process, and how it evolves, and that's how Render was born. >> All right, so Steve, remember in the early days, cloud was supposed to be easy and inexpensive, I've been saying on theCUBE it's like well, I guess it hasn't quite turned out that way. Love your viewpoint a little bit, because you've invested here, to really be competitive in the cloud, tens of billions of dollars a year, that need to go into this, right? >> Yeah, I had the fortunate chance to meet Anurag early on, General Catalyst was an investor in Stripe, and so seeing what they did sort of spurred us to think about this, but I think we've talked about this before, also, on theCUBE, even back, long ago in the VMware days, we looked very seriously at buying Heroku, one of the early players, and still around, obviously, at Salesforce in this PaaS space, and every single infrastructure conversation I've had from the start, I have to come back to myself and come back to everyone else and just say, don't forget, the only reason any infrastructure even exists is to run applications. And as we talked about, the first generation of cloud, it was about, let's make the infrastructure disappear, and make it programmatic, but I think even that, we're realizing from developers, that is just still way too low of an abstraction level. You want to write code, you want to have it in GitHub, and you want to just press go, and it should automatically deploy, automatically scale, automatically secure itself, and just let the developer focus purely on the app, and that's a idea that people have been talking about for 20 years, and should continue to talk about, but I really think with Render, we found a way to make it just super easy to deploy and run, and certainly it is big players out there, but it really starts with developers loving the platform, and that's been Anurag's obsession since I met him. >> Yeah, it's interesting, when I first was reading I'm like "Wait," reminds me a lot of somebody like DigitalOcean, cloud for developers who are, Steve, we walked through, the PaaS discussion has gone through so many iterations, what would containerization do for things, or serverless was from its name, I don't need to think about that underlying layer. Anurag, give us a little bit as to how should we think of Render, you are a cloud, but you're not so much, you're not an infrastructure layer, you're not trying to compete against the laundry list of features that AWS, Azure, or Google have, you're a little bit different than some of the previous PaaS players, and you're not serverless, so, what is Render? >> Yeah, it is actually a new category that has come about because of the advent of containers, and because of container orchestration tools, and all of the surrounding technologies, that make it possible for companies like Render to innovate on top of those things, and provide experiences to developers that are essentially serverless, so by serverless you could mean one of two things, or many things really, but the way in which Render is serverless is you just don't have to think about servers, all you need to do is connect your code to GitHub, and give Render a quick start command for your server and a build command if needed, and we suggest a lot of those values ourselves, and then every push to your GitHub repo deploys a new version of your service. And then if you wanted to check out pull requests, which is a way developers test out code before actually pushing it to deployment, every pull request ends up creating a new instance of your service, and you can do everything from a single static site, to building complex clusters of several microservices, as well as managed Postgres, things like clustered Kafka and Elasticsearch, and really one way to think about Render, is it is the platform that every company ends up building internally, and spends a lot of time and money to build, and we're just doing it once for everyone and doing it right, and this is what we specialize in, so you don't have to. >> Yeah, just to add to that if I could, Stu, what's I think interesting is that we've had and talked about a lot of startups doing a lot of different things, and there's a huge amount of complexity to enable all of this to work at scale, and to make it work with all the things you look for, whether it's storage or CDNs, or metrics and alerting and monitoring, all of these little startups that we've gone through and big companies alike, if you could just hide that entirely from the developer and just make it super easy to use and deploy, that's been the mission that Anurag's been on to start, and as you hear it from some of the early customers, and how they're increasing the usage, it's just that love of making it simple that is key in this space. >> All right, yeah, Anurag, maybe it would really help illustrate things if you could talk a little bit about some of your early customers, their use case, and give us what stats you can about how your company's growing. >> Certainly. So, one of our more prominent customers was the Pete Buttigieg campaign, which ran through most of 2019, and through the first couple of months of 2020. And they moved to us from Google Cloud, because they just could not or did not want to deal with the complexity in today's standard infrastructure providers, where you get a VM and then you have to figure out how to work with it, or even Managed Kubernetes, actually, they were trying to run on Managed Kubernetes on GKE, and that was too complex or too much to manage for the team. And so they moved all of their infrastructure over to Render, and they were able to service billions of requests over the next few months, just on our platform, and every time Pete Buttigieg went on stage during a debate and said "Oh, go to PeteForAmerica.com," there's a huge spike in traffic on our platform, and it scaled with every debate. And so that's just one example of where really high quality engineering teams are saying "No, this stuff is too complex, it doesn't need to be," and there is a simpler alternative, and Render is filling in that gap. We also have customers all over, from single indie hackers who are just building out their new project ideas, to late stage companies like Stripe, where we are making sure that we scale with our users, and we give them the things that they would need without them having to "mature" into AWS, or grow into AWS. I think Render is built for the entire lifecycle of a company, which is you start off really easily, and then you grow with us, and that is what we're seeing with Render where a lot of customers are starting out simple and then continuing to grow their usage and their traffic with us. >> Yeah, I was doing some research getting ready for this, Anurag, I saw, not necessarily you're saying that you're cheaper, but there are some times that price can help, performance can be better, if I was a Heroku customer, or an AWS customer, I guess what might be some of the reasons that I'd be considering Render? >> So, for Heroku, I think the comparison of course, there's a big difference in price, because we think Heroku is significantly overpriced, because they have a perpetual free tier, and so their paid customers end up footing the bill for that. We don't have a perpetual free tier that way, we make sure that our paid customers pay what's fair, but more importantly, we have features that just haven't been available in any platform as a service up until now, for example, you cannot spin up persistent storage, block storage, in Heroku, you cannot set up private networking in Heroku as a developer, unless you pay for some crazy enterprise tier which is 1500, 3000 dollars a month. And Render just builds all of that into the platform out of the box, and when it comes to AWS, again, there's no comparison in terms of ease of use, we'll never be cheaper than AWS, that's not our goal either, it's our goal to make sure that you never have to deal with the complexity of AWS while still giving you all of the functionality that you would need from AWS, and when you think about applications as applications and services as opposed to applications that are running on servers, that's where Render makes it much easier for developers and development teams to say "Look, we don't actually need "to hire hundreds of DevOps people," we can significantly reduce our DevOps team and the existing DevOps team that we have can focus on application-level concerns, like performance. >> All right, so Steve, I guess, a couple questions for you, number one is, we haven't talked about security yet, which I know is a topic near and dear to your heart, was one of the early concerns about cloud, but now often is a driver to move to cloud, give us the security angle for this space. >> Yeah, I mean the key thing in all of the space is to get rid of the complexity, and complexity and human error is often, as we've talked about, that is the number one security problem. So by taking this fresh approach that's all about just the application, and a very simple GitOps-based workflow for it, you're not going to have the human error that typically has misconfigured things and coming into there, I think more broadly, the overall notion of the serverless world has also been a very nice move forward for security. If you're only bringing up and taking down the pieces of the application as needed, they're not there to be hacked or attacked. So I think for those two reasons, this is really a more modern way of looking at it, and again, I think we've talked about many times, security is the bane of DevOps, it's the slowest part of any deployment, and the more we get rid of that, the more the extra value proposition comes safer and also faster to deploy. >> The question I'd like to hear both of you is, the role of the developer has changed an awful lot. Five years ago, if I talked to companies, and they were trying to bring DevOps to the enterprise, or anything like that, it seemed like they were doomed, but things have matured, we all understand how important the developer is, and it feels like that line between the infrastructure team and the developer team is starting to move, or at least have tools and communication happening between them, I'd love, maybe Steve if you can give us a little bit your macroview of it, and Anurag, where that plays for Render too. >> Yeah, and Anurag especially would be able to go into our existing customers. What I love about Render, this is a completely clean sheet approach to thinking about, get rid of infrastructure, just make it all go away, and have it be purely there for the developers. Certainly the infrastructure people need to audit and make sure that you're passing the certifications and make sure that it has acceptable security, and data retention and all those other pieces, but that becomes Anurag's problem, not the developer problem. And so that's really how you look at it. The second thing I've seen across all these startups, you don't typically have, especially, you're not talking about startups, but mid-sized companies and above, they don't convert all the way to DevOps. You typically have people peeling off individual projects, and trying to move faster, and use some new approach for those, and then as those hopefully go successful, more and more of the existing projects will begin to move over there, and so what Render's been doing, and what we've been hoping from the start, is let's attract some of the key developers and key new projects, and then word will spread within the companies from there, but so the answer, and a lot of these companies make developers love you, and make the infrastructure team at least support you. >> Yeah, and that was a really good point about developers and infrastructure, DevOps people, the line between them sort of thinning, and becoming more of a gray area, I think that's absolutely right, I think the developers want to continue to think about code, but then, in today's environment, outside of Render when we see things like AWS, and things like DigitalOcean, you still see developers struggling. And in some ways, Render is making it easy for smaller companies and developers and startups to use the same best practices that a fully fledged DevOps team would give them, and then for larger companies, again, it makes it much easier for them to focus their efforts on business development and making sure they're building features for their users, and making their apps more secure outside of the infrastructure realm, and not spending as much time just herding servers, and making those servers more secure. To give you an example, Render's machines aren't even accessible from the public internet, where our workloads run, so there's no firewall to configure, really, for your app, there's no DMZ, there's no VPN. And then when you want to make sure that you're just, you want a private network, that's just built into Render along with service discovery. All your services are visible to each other, but not to anyone else. And just setting those things up, on something like AWS, and then managing it on an ongoing basis, is a huge, huge, huge cost in terms of resources, and people. >> All right, so Anurag, you just opened your first region, in Europe, Frankfurt if I remember right. Give us a little bit as to what growth we should expect, what you're seeing, and how you're going to be expanding your services. >> Yeah, so the expansion to Europe was by far our most requested feature, we had a lot of European users using Render, even though our servers were, until now, based in the US. In fact, one of, or perhaps the largest recipe-sharing site in Italy was using Render, even though the servers were in the US, and all their users were in Italy, and when we moved to Europe, that was like, it was Christmas come early for them, and they just started moving over things to our European region. But that's just the start, we have to make sure that we make compute as accessible to everyone, not just in the US or Europe but also in other places, so we're looking forward to expanding in Asia, to expanding in South America, and even Africa. And our goal is to make sure that your applications can run in a way that is completely transparent to where they're running, and you can even say "Look, I just want my application to run "in these four regions across the globe, "you figure out how to do it," and we will. And that's really the sort of dream that a lot of platforms as service have been selling, but haven't been able to deliver yet, and I think, again, Render is sort of this, at this point in time, where we can work on those crazy crazy dreams that we've been selling all along, and actually make them happen for companies that have been burned by platforms as a service before. >> Yeah, I guess it brings up a question, you talk about platforms, and one of the original ideas of PaaS and one of the promises of containerization was, I should be able to focus on my code and not think about where it lives, but part of that was, if I need to be able to run it somewhere else, or want to be able to move it somewhere else, that I can. So that whole discussion of portability, in the Kubernetes space, it definitely is something that gets talked quite a bit about. And can I move my code, so where does multicloud fit into your customers' environments, Anurag, and is it once they come onto Render, they're happy and it's easy and they're just doing it, or are there things that they develop on Render and then run somewhere else also, maybe for a region that you don't have, how does multicloud fit into your customers' world? >> That's a great question, and I think that multicloud is a reality that will continue to exist, and just grow over time, because not every cloud provider can give you every possible service you can think of, obviously, and so we have customers who are using, say, Redshift, on AWS, but they still want to run their compute workloads on Render. And as a result, they connect to AWS from their services running on Render. The other thing to point out here, is that Render does not force you into a specific paradigm of programming. So you can take your existing apps that have been containerized, or not, and just run them as-is on Render, and then if you don't like Render for whatever reason, you can take them away without really changing anything in your app, and run them somewhere else. Now obviously, you'll have to build out all the other things that Render gives you out of the box, but we don't lock you in by forcing you to program in a way that, for example, AWS Lambda does. And when it comes to the future, multicloud, I think Render will continue to run in all the major clouds, as well as our own data centers, and make sure that our customers can run the appropriate workloads wherever they are, as well as connect to them from the Render services with ease. >> Excellent. >> And maybe I'll make one more point if I could, Stu, which is one thing I've been excited to watch is the, in any of these platform as a services, you can't do everything yourself, so you want the opensource package vendors and other folks to really buy into this platform too, and one exciting thing we've seen at Render is a lot of the big opensource packages are saying "Boy, it'd be easier for our customers to use our opensource "if it were running on Render." And so this ecosystem and this set of packages that you can use will just be easier and easier over time, and I think that's going to lead to, at the end of the day people would like to be able to move their applications and have it run anywhere, and I think by having those services here, ultimately they're going to deploy to AWS or Google or somewhere else, but it is really the right abstraction layer for letting people build the app they want, that's going to be future-proof. >> Excellent, well Steve and Anurag, thank you so much for the update, great to hear about Render, look forward to hearing more updates in the future. >> Thank you, Stu. >> Thanks, Stu, good to talk to you. >> All right, and stay tuned, lots more coverage, if you go to theCUBE.net you can see all of the events that we're doing with remote coverage, as well as the back catalog of what we've done. I'm Stu Miniman, thank you for watching theCUBE. (calm music)

(upbeat music playing) >> Announcer: Live from San Diego, California, it's theCUBE! Covering KubeCon and CloudNativeCon, brought to you by Red Hat, the cloud native computing foundation and its ecosystem partners. >> Welcome back to theCUBE, here at KubeCon, CloudNativeCon 2019 in San Diego, I am Stu Miniman John Troyer is my co-host and joining us is one of our esteemed Cube alumni multi-time guests. Steve Herrod who is the managing director at General Catalyst. Steve, thanks so much for joining us. Always great to see you. >> It's good to see you again. >> Stu: All right I'm having >> And John. >> A flashback meeting with the two of you at a certain campus in Palo Alto and the like. But, you know it's interesting Steve, before we get into this technology, we kicked off this morning talking about a company, Docker. We knew Docker from the early on. I said, look Docker had the opportunity to be this generation's VM-ware. It has had a huge impact on the market. You know, we wouldn't have 12 thousand people here if it wasn't for them. Give us your take kind of as to, you know, this wave of technology and we'll start there. >> Yeah, well I guess I'll start with Docker the company. I mean, it just shows you boy, it's hard to build big companies these days and I think there will be plenty of people talking about why that didn't work out or did work out. Maybe there was too much stuff given to open source. Maybe not enough, maybe there isn't enough community. But I do think, I think that's the tale of just how hard it is to be out in this world. But on the flip side they certainly moved for the idea of containers and got things going. We always have a saying in the venture business, actually in the startup business, which is it's sometimes the second mouse that gets the cheese. Someone's got to break a little glass and then sometimes someone else comes in afterwards and gets some of the reward for it. >> Well Steve this is a sprawling ecosystem. We went from 8 thousand people last year, 4 thousand the year before to over 12 thousand, and this ecosystem keeps growing. You've got a portfolio company that launched this week. You're checking out the show floor. Maybe let's start with the new one coming out from your side. >> Yeah you know I have several startups that are here but I think what's been interesting is the opportunity to create new companies. If you look at the, I'm sure you've covered a lot of them. But if you look at the sponsor sheets here, there's literally hundreds of booths that you can go see and many of which are in similar areas, many of which are open source. So it's really a challenge, like as you all trained interviewers and me trained looking at the space. Think how complex it is to a customer right now. Do that, think about like which service mesh do I pull together with this and that and which command line and which API tool, so I think that's both the challenge and the opportunity you often see this early on. One company that we just had coming out is called Render and their idea is to build an application platform service kind of on top of all this and just to hide it all from the user which I think is, I think that's what always happens in these ecosystems. You get so many players and then someone will be the bundler and make a suite out of it. Or someone will write a service on top of it all and take it away from you. So I think it's sort of a healthy part of a rapidly changing ecosystem. And Render will be doing some interesting things, but they talk to Application developers, not to infrastructure people. App developers don't want to know about any of this. >> Well we're sitting here at KubeCon in the midst of kind of, right at that margin, right at that boundary between from one perspective it looks very developer-y, But from another perspective, this seems very operator-y here. How do you see, in the market in the place, with the buyers, the CIOs or the technical buyers out there. I mean how are you looking at infrastructure versus developers and cloud et cetera? >> It's funny, you know we're all infrastructure people for the most part. What I often say, I know you all know that as well, like at the end of the day infrastructure is only there to run applications. It has no other purpose in life except to be a great place to run applications. But it's also accountable for doing a lot of the things you need. It has to make it run fairly at a certain performance. It has to make sure it's safe from attack. It needs to make sure the data is backed up. So I always just try to think about that when I'm looking at these startups, and we were just talking about this before the show. When I go up to one of the booths and I ask, I usually ask, how do you make someone's life better? Sometimes you get someone who's not the most senior person at the company and they'll quickly go into the technology on how it's this or that. But if you can't frame it in the context of how some enterprises' applications are better, faster, safer then it's really not that interesting, I think, to a CIO that has all these decision making. So, anyway I keep coming back to that with what ever infrastructure or application companies out there and try to wonder what's going on. >> Yeah, no I do really like that as we often frame it, it's what is the business value? It's, you know, nobody really has a problem that I need to rub Kubernetes on. Yes, I need agility, I need you know, the result of what having a distributed architecture drives from my business is what I need. Not the niggling little details there. Um, so I love that piece of what you do better for a company. The other thing, I walk around and I talk to some of these companies and some of them, I scratch my head a little bit as to the oh well I created a cool project, and we've open sourced it and that's my business. And as you know we've talked about the cautionary tale of Docker. Where are we with open source and business model and what's your latest take on that? >> Boy, that is ever evolving. It's funny though, if you look at even just the last ten years since you've been covering things. The go to model for most open source companies has shifted from maybe supportive subscription to really, some of them are open core meaning that parts of it are closed source. But, more and more that the really well to do ones are running them as a service. So that tends to be what we look for now is, whether you're running it directly, or you're doing something with a Microsoft, Google, Amazon where you get some of the revenue from it, which is a big, a big if. That seems to be one of the better ways to consume it and the people who have control over the software should be the best at operationalizing it. So that's kind of the change that we've seen as of late. >> Yeah, quick follow up on that, when we look at the hyper scale, the public clouds. Their marketplaces are getting more and more, you know, it's just a big force in the marketplace. Especially AWS, but Azure's pushing that way and Google to some extent there. Do you give any advice to your portfolio customers? How they should think about their relationships with the big cloud players? >> Well yeah, I mean that's one of the biggest discussions, not even just for our tech companies, but our commerce companies and everywhere else. But I do think what's kind of interesting, in many cases we're seeing the companies talk about maybe Amazon or someone is running that software as a service and it's maybe it's a little older version or maybe it's not all the bells and whistles. So there's certainly a case where good enough is good enough and it kind of crushes the startup, but you also hear a fair amount of tales of where it introduces them to this concept for the first time and then they're going to move over to perhaps the best of breed case, so obviously getting that right is a big job for the founder as well as for an investor. But, um I really see it as a mixed bag. The notion of being introduced to a customer at a lower cost than ever before matters a lot if they then switch to you. >> Well Steve, another boundary that you're sitting at is the boundary between all these technology providers and the customer. Any particular observations on trends over in the customer side? Are people looking to save money, are people feeling good, are the techies really leading the adoption? Is CIO down? Digital transformation? I mean, you're sitting right there in the middle. >> Yeah I mean the good news for I think all startups are that software matters and the digital transformation that's been going on for many, many years continues in a broad way. I would say at the end of the day though, the one question that I almost ask just back to your point on business value. I ask any startup, tell me why you are at least 10 times better than everyone else in this space. And because it is, the bad news of so many startups and so many cool ideas is how's anyone to choose? So if you ask any of your CIOs, they're just massively confused. They try to look for a bigger vendor who could possibly bundle it all together and make it a suite. That's super enticing as you know to all these guys. But when you have this much churn and change going on, you know someone has to step into that role, so I would just say that the ideal thing is you have smaller number of vendors, that never works with a lot of rapid innovation so somewhere in the middle you need to have startups that are really good at bundling in with other folks and fitting into APIs and doing that. >> Alright, so Steve, we've had an interesting view on what's going on in the security industry this week and I know you've got a perspective on it. Our team did the AWS reinforce show in Boston and it was generally upbeat, talking about all the great things that cloud's doing and you know, modernize everything we're doing. Pat Gelsinger from VMware, you know, banging on the table at VMware saying you know, we need a do-over, we need to start over with security. Here at this show, if some people are very cautiously optimistic that we've solved a bunch of the problems of security. You know, where in your view are we, and where are we going? >> I think we'll never be done with security. However, I do think we've reached a maturity level, if you, well, you were here. A couple years ago, there were so many security companies just for containers and I think, you know that's interesting to some extent, but, every CIO is going to have a mixed environment. And so I think what you see this year and what you saw with Palo Alto's acquisitions, so my companies Alumio I know you've talked to. It's really saying let's have one master policy and have it actually then go out and talk to Amazon, talk to my local infrastructure, talk to containers, talk to server lists. That will be the next wave of things going on. But, um, I think whenever you see a maturing of a company like this, the management tools and the security tools that have to inter operate start to really make a showing. And I actually see that quite a bit in this show, so that's a sign of a little bit of maturity going on here. >> Okay, last thing, Steve, I guess, what's catching your eye? Anything interesting or spaces there that you'd call out that we haven't already touched on? >> Well, I spend a lot of time these days actually on, and I hesitate to say it, but on AI. And I mean specifically it is such a hyped term and it's used in many ways like cloud used to be used, so it's just sort of a marketing term in many ways. But specifically, the picks and shovels that are enabling that, many of which show up here too because it is being deployed in containers, that sort of thing. So certainly the tools, but more importantly the vertical applications that can have a meaningful benefit from it. And I'll say, same thing as with infrastructure. AI is a means to an end, it's not the actual thing you're trying to do. But there's real, there's been a real advance there and so I'm really enjoying watching where you get these 10x improvements because you're using the data and AI there. So I continue to love infrastructure and developer tools and I think especially as they get applied to some of these new areas, like AI. That's where I'm excited about what we'll be seeing. >> Well, Steve, really appreciate you coming by. Congrats to the Demon Render, definitely look to catch up there if we don't catch him this week, we'll get him to our Palo Alto studios sometime. >> Yeah, Render is cool. You can go try it out. Render.com >> All right. For John Troyer, I'm Stu Miniman. Getting towards the end of day 1 of 3 days. Wall to wall coverage. Check out theCUBE.net for all of the coverage, and as always, thanks for watching theCUBE. (upbeat music playing)

>> from our studios in the heart of Silicon Valley, Palo Alto, California It is a cute conversation. >> Hello and welcome to the Special Cube conversation with remote gas. Steve, harried managing director of General Catalyst, is he's a venture capitalist. >> Former >> CTO of the M. Where? Cube alumni. Steve, welcome to this special cube conversation coming in remote from Palo Alto. You're right across town, but still grab you big news happening. And also get your thoughts on the emerald 2019. Welcome to our remote conversation. >> Yeah, we were close. And yet this makes it even more convenient. We >> love the new format. Bring people into no matter where they are, no matter. Whatever it takes to get the stories we want to do that. And two important ones having. We know the emeralds coming next week. But congratulations. In order to you and your portfolio companies signal FX, another cube alumni from we've been covering since the beginning of their funding acquisition. Bye, Splunk today for over a billion dollars. 60% in cash and 40%. And stop. Congratulations. You've been on the board. You've known these guys from VM. We're quite a team. Quite an exit It's a win win for those guys. Congratulations. >> Yeah, Great group of guys. Several, which were at being where, as you as you mentioned, and as you've had on your show, that's great. They were doing a really good job of monitoring and getting metrics about applications and how they're doing it. And they're marrying it with spunk, stability to ingest logs and really understand operational >> data. And I think that combination will be very powerful. >> It brings kind of what we've been monitored. Calling Cloud 2.0, Suzie, monitoring 2.0, is really observe ability As the world starts moving into the kinds of service is we're seeing with Cloud on premises operations more than ever, that game has changed much more dynamic, and the security impact is significant. And certainly as as applications connect with its coyote or any I p device having that day, that scales really critical part of that. And I know signal left fax was one of those companies where you invested early, and I remember interviewing a couple of years ago in saying, Damn, these guys might be too early. I mean, they're so smart, they're so on it. But this is an example of skating to where the puck is As we increase, Key would say, These guys were just hitting their stride. Steve, can you Can you share any color commentary on on the deal and or you know why this is so important? >> Well, they've been at this for a long time, and they're a great team. I've been involved. Is investor less time? Obviously. But it was the really original team out of Facebook monitoring really at scale applications and then trying to take that technology that Facebook could use and applied it to our world. And, you know, as you discovered, we're in a world of micro service's and containers, and that is definitely hitting its stride right now. And so they were in the right place knowing how >> to monitor this very fast moving >> information and make some sense out of it. So you're a really good job on their part, and it was a pleasure to be >> along for part of the ride with him. >> It's great to me, great founders that have a vision and stay the course because, you know it's always it's always tricky when you're early to see the future especially around their top micro surfaces and containers way back before became the rage and now more relevant operationally for enterprises, it's easy to get distracted and man that fashion. We'll just jump on this trend of this way. They stayed the course. They stayed the nose to the grindstone and now observe ability. Which, to me is code word for monitoring. 2.0 is probably one of the hottest segments you saw Cummings going public companies filing the pager Duty dynatrace. Now you guys with your acquisition with Signal FX, This is an important sector this would normally be viewed in. I t. Rule is kind of list of white space, but it seems to be a much bigger landscape. Can you comment on your view on this and why it's so important? Why is observe ability so hot? Steve? >> Well, it's been this actually had a great market to be in for quite a while. They've been a large number of companies, continue to be both built up, and it's pretty simple. That amount of e commerce, or the amount of customer interactions you're having over applications and over the Web has gone up, and so anything that's not performing well or as downtime literally cost you a lot of money as a company. And so as these applications get more complex and they're being relied on >> Maur for revenue and for custom directions, >> you simply have to have better tools. And that's gonna be something that continues to evolve, that we got more complex, absent, more commerce is going >> to go through them. >> Complexity is actually something that people, a lot of people are talking about. I want to ask you something around today's marketplace, but I want you to compare and contrast it, similar to what your experience wasn't v m Where were you? The CTO virtual ization of all very, very quickly on ended up becoming a really critical component of the infrastructure, and a lot of people were pooh poohing that initially at first, then all sudden became. We've got to kill the M where you know so the resiliency of the M, where was such that they continue to innovate on virtualization, and so that's been a part of the legacy of V M wear, and the embers will cover next next week. But when you look at what's happening now with cloud computing and now some of the hybrid cloud up opportunities with Micro Service's and other other cool things. The role of the application is being is important part of the equation. It used to be the standup infrastructure, and that would enable the application to do things virtualization kind of change that game. Now you don't need to stand up. Any infrastructure could just deploy an application, and the infrastructure can be code and be self form, so you can have unique requirements. As infrastructure driven by the application, the whole world seemed to have flipped around. Do you see it that way? Is that accurate assessment? What's your thoughts on that? >> I think you're right on a bunch of fronts. People have been calling a different things, but the beauty of the, um where and you know this is a while ago now, but the reason it was successful is that you didn't have to change any of your software to use. It sort of slid him underneath an added value. But at the same time applications evolved. And so the that path of looking like hardware was something that was great for not changing applications. You have to think about a little differently when people are taking advantage of new application patterns or new service. Is that air in the cloud? And as you build up these as they're called cloud Native applications, it really is about the infrastructure. You know. It's job in life is to run applications. It sort of felt like the other way around. It used to be you wrote an application for what your infrastructure was. It shouldn't be like that anymore. It's about what you need to do to get the job done. And so we see the evolution of the clouds and their service. Is that air there? Certainly the notion of containers and a lot of the stuff that being where is now doing has been focused on those new applications and making sure Veum, where adds value to them, whatever type >> of application they are. >> It's interesting one of the exciting things in this way that we're on this year around multi cloud hybrid cloud in Public Cloud Now that we've kind of crossed over to the reality that public cloud has been there, done that succeeded I call that cloud 1.0, you saw the emergence of hybrid cloud. Even early on, around 2012 2013 we were talking about that of'em world instantly pad Kelsey here, but now you're seeing hybrid cloud validated. You got Outpost, you've got Azure stack, among other things. The reality is, if you are cloud native, you might not need to have anything on premise. Like companies like ours with 50 plus people. We don't have an I T department, but most enterprises have stuff on premise, so the nuance these days is around. You know, what's the architecture of of I T. These days, we add security into It's complicated. So these debates can there be a soul cloud for a workload? Certainly that's been something that we've been covering with the Amazon Jet I contract, where it's not necessarily a soul cloud for the entire Department of Defense. It's a soul cloud for the workload, the military application workload or app. The military. It's $10 million application, and it's okay to have one cloud, as we would say, But yet they're going to use Microsoft's cloud for other things. So the ODS having a multiple cloud approach, multiple environments, multiple vendors, if you will, but you don't have to split the cloud up. Her say This is kind of one of those conversations really evolving quickly because there's no real school of thought around this other than the old way, which was have a multi vendor environment split the things. What's your thoughts on the the workload relationship to the cloud? Is it okay to have a workload, have a single cloud for that workload and coexist with other clouds? >> It's funny. I've been thinking about this more lately. Where if you went back earlier in time, forgetting cloud, there used to be a lot of different type of servers that you >> can run on, whether it >> be a mainframe or a mini mainframe or Unix system or Olynyk system. And to some extent, people are choosing what would run where, based on the demands of the application, sometimes on price, sometimes on certifications or even what's been poured into the right one. So this is a beating myself, you know, that's that's a while ago. It's not too different to kind of think about the different kind of cloud service is there out there, whether you're running your own on your own data center or whether you're leveraging one from the other partners. I really do think in the ideal world you get your choice of the best possible platform for the application across a variety of characteristics. And it's kind of up to the vendors of management software and monitoring software at security software to give you more flexibility to choose where to run. And so for getting D'Amore exactly. But think of a virtualization layer that really tries to abstract out and let you more fluidly run things on different clouds. Do you think that's where a lot of the the core software is head of these days really >> enable that toe work better >> as a >> 1,000,000 other use cases, but with storage being moved around >> for disaster recovery or for whatever it else might >> be? But that quarter flexibility reminds me a lot of choosing what application >> would want. Run would run where within your own company >> and the kubernetes trend in containers certainly really makes that so much more flexible because you can still run VM. Where's viens beams under the covers over Put stuff on bare metal a lot of great opportunities that's exciting >> and you slap in a P I in front of them and micro service is sort of works in tandem with that so that you could really have your application composed >> across multiple environments. >> And I think the ob surveilling observe ability is so hot because it takes what network management was doing in the old way, which is monitoring. Make sure things are operating effectively and combining with data. And so when I heard about the acquisition of signal effects into Splunk, I'm like, There it is. We're back to data. So observe ability is really a data challenge and opportunity for using what would be a white space monitoring. But it's more than monitoring because it's about the data and the efficacy of that data and how it's being used, whether it's for security or whatever your thoughts >> s. So there's more data than ever, for sure, and so being able to stream that in being able to capture it at cost, all that is a big part of our environment still working. The key thing is turning that into some actionable insight, and whether you're using no interesting calculations for that or different forms of machine learning like that's where this really has to go is with all this data coming in. How do >> I avoid false false >> positives? How do I only alert people when needed, then that allows you to do what everyone's talked about for 30 years, which is automatic remediation. But for now, let's talk about it. Is how do I process all of this rich data and give me the right information to take action? >> Do you want to thank you for coming on this promote cube conversation? You've been with us at the Cube since 2010. I think our first cube event was A M C. World 2010. That show doesn't existing longer because that folded into Del Technologies world. So VM world next week is the last show standing that has been around since the Cube. You've been around? Of course, you guys had VM worlds had their 10th anniversary was 2013 as a show. But this is our 10th year. Well, thank you for being part of our community and being a contributor with your commentary and your friendship and referral. Appreciate all that. So I gotta ask you looking back over the 10 years since you been with Doug, you've vm world. What's the most exciting moments? What are moments that you can say? Hey, that was an amazing time. That was a grind, but we got through it. Funny moments. Your thoughts. >> Boy, that's a tough question. I've enjoyed working with you, John and the Cube. There's been somebody really interesting things for me. The sum of the big acquisitions that we went through a V Um, where? Where? I think the NSX exposition. When we get a syrah, I think that really pushed us an interesting spots. But we have gone through, uh, I pose an acquisition ourself by the emcee begun Theo. It's a pretty vicious competition from Be Citrix Airs in or Microsoft. Yeah, that's just the joy of being a These companies is lots of ups and downs along the way that they almost kind of fit together to make an exciting life. >> What was some moments for you? I know you had left was the 2015 or 26 boys with your last day of >> the world. You go now, you know about six years. >> What do you miss about the end? Where >> the team is what everyone kind of cliche says. But it's totally true. The chance to kind of work with all those people at the executive staff all the way down to like these awesome engineers with Koi is so I definitely missed that Miss Shipping products. You don't get to do that as much directly as a venture capitalist. But on the flip side, this is a great world to be, and I get to see enthusiastic. You're very optimistic founders all day long, pushing the envelope. And while that was existing at the end where, uh, it's it's what I see every single day here. >> You've been on The Cube 10 times at the M World. That's the all time spot you're tied for. First congratulates on the leaderboard. It's been a great 10 years. Going forward. We've seen are so good. Looking back, I would say that you know Palmer, it's taking over from Diane Greene. Really set the table. He actually laid out. Essentially, what I think now is a clearly a cloud SAS architecture. I think he got that pretty much right again. Or maybe early in certain spots of what he proposed at that time. There's some things that didn't materialize is fast, but ultimately from core perspective. You guys got that right, Um, and then went in Try to do the cloud. But then and this year it comes in for suffered to find, you know, line with Amazon. And since that time, the stock has been really kind of it on the right. So, you know, some key moments there for Of'em. Where from Self >> Somali. More stuff. It's fun to see Pivotal now possibly coming back into after after getting started there. But I think you know, there's there's a hugely talented team of execs there. Pat L Singers come >> in and done a great job. I think, Greg, >> you and all these folks that Aaron, >> there are good thinkers. And so I >> think you'll consider just continue to see it evolved. Quite event and probably some cool announcements next week. >> Talk aboutthe roll Ragu and the team play because he doesn't really get a lot of the spotlight. He avoids it. I know he did talk to him privately that he won't come on the Q. I don't know what the other guys go on other guys in jail, so he's been instrumental. He was really critical in multiple deals. Could you share some insight into his role at bm bm were and why it's been so important. >> I'll push him to get on, especially now that you have remote. You can probably grab him now. He and Rajiv and Rayo Funeral Just all the guys air. I think he and Reggie basically split up half and half of the products. But Roger is very, very seminal in the whole cloud strategy that has clearly been working Well, he's a good friend in a very smart guy. >> Well, I want you to give me a personal word that you're gonna get me in a headlock and tell him to come on the Cube this year. We want him on. He's a great, great great guest. He's certainly knowledgeable going forward. Steve, 10 years out, we still got 10 more years of great change coming. If you look at the wee that's coming, you're out investing in companies again. You had one big exit today with the $1,000,000,000 acquisition that was happen by Splunk and signal effects. Ah, lot more action. You've been investing in security. What's your outlook? As you look at the next 10 years is a lot more action to happen. We seem to be early days in this new modern era. Historic time in the computer industry as applications without dictating infrastructure capabilities is still a lot more to do. What do you excited about? >> There's a million things I get to see every day, which are clearly where the world is headed. But I think at the end of the day there's there's infrastructure, which the job in life of infrastructure is to run applications. And so then you look at applications. How are they changing and what is the underlying fabric gonna need to do to support them? And if you look at the future of applications, it's clearly some amazing things around artificial intelligence and machine learning to actually make them smarter. It's all different factors form factors that they're running on and being displayed on. I think we clearly have a world where with the next generation of networking, you could do even more at the edge and communicate in a very different way with the back end. I kind of look at all these application patterns and really trying to think about what is the change to the underlying clouds and fabrics and compute that's gonna be needed to run them. I think we have plenty of head room of interesting ideas ahead. >> Stew, Dave and I were talks to Dave. Stupid Valenti student and I were talking about, you know, as infrastructure and cloud get automate as automation comes in, new waves are gonna be formed from it. What new waves do you see? Is it like R P ay, ay, ay, ay. Because as those things get sucked in and the ships and two new waves What? Oh, that's some of the key ways people should pay attention to. I'm not saying the industries is going away, but as it becomes automated, and as the shift happens, the value still is there. Where is those new waves? >> Well, then, today it looks like most applications they're gonna be composed of a lot of service is, um and I think they're gonna be able. They're going to need to be displaying on everything from big screens to small screens to purely as a headless 80. I front ends, and so again, I think at the end of the day, this this infrastructure is gonna have to have a lot of computation capability after crunch do tons of data but also have to stitch together these connections between components and provide really good experiences and predictability in the network and all those air very hard problems that we've been working on for a while. I think we'll keep working on them and new forms for the next 10 years at least. >> Awesome. Steve. Thanks for being a friend with us in the queue, but you're funny. Favorite moment of the Q. Can you share any observations about the cube and your experiences? Your observations over the 10 years we've come a long way, >> you go ugly, actually enjoyed it. I mean, it's a microcosm of all the other stuff going on, but I saw your first little box that you built and used for the Cube like that was that was really cool. But now the fact that I'm on my laptop, you doing this over the network and it's showing up is pretty awesome. So think you're following the same patterns of the other, have the other applications moving the cloud and having good user experiences. >> Cube native here software native Steve. Thank you so much for stating the time commenting on the acquisition. I know it's fresh on the press. Ah, lot more analysis and cut to come next week. It's certainly I'll be co hosting at Splunk dot com later in the year. So I'm looking forward to connect with a team there and again. Thanks for all your contribution into the cube community. We really appreciate one. Thank you for your time. >> Thanks. You guys are awesome. Thanks for chatting. >> Okay. Steve Herod, managing director at general counsel, Top tier VC From here in Silicon Valley and offices around the world, I'm John for breaking down the news as well as a V Emerald preview with the former CTO of'em. Were Steve hair now a big time venture capitalists. I'm John Ferrier. Thanks for watching.

our Studios in the heart of Silicon Valley Palo Alto California this is a cute conversation hello everyone welcome to the special cube conversation with a remote guest Steve Herod managing director of general kennel s he's a venture capitalist former CTO of VMware cube alumni Steve welcome to this special cube conversation coming in remote from Palo Alto you're right across town but still we're gonna grab you big news happening and also get your thoughts on the Emerald 2019 welcome to our remote conversation yeah hey Jon yeah we're close and yet this makes it even more convenient go we'd love the new format of bring people into no matter where they are no matter what whatever it takes to get the stories we want to do that and and two important ones to having we we know vm world's coming next week but congratulations in order to you and your portfolio companies signal FX another cube alumni firm we've been covering since the beginning of their funding acquisition by Splunk today for over a billion dollars sixty percent in cash and forty percent in stop congratulations you've been on the board you've known these guys from VMware quite a team quite an exit it's a win-win for those guys congratulations yeah great group of guys several of which were at VMware has you as you mentioned and as you've had on your show that's great they were doing a really good job of monitoring and getting metrics about applications and how they're doing it and they're marrying it with spunks ability to ingest logs and really understand operational data and I think the combination will be very powerful it brings kind of what we've been monitoring cloud 2.0 essentially monitoring 2.0 is really observability as the world starts moving into the the kinds of services we're seeing with cloud and on-premises operations more than ever that game has changes much more dynamic and the security impact is significant and certainly as applications connect whether it's IOT or any IP device having that data at scale is really a critical part of that and I know signal FX was one of those companies where you invested early and I remember interview them a couple years ago and saying damn these guys might be too early I mean they're so smart they're so on it but this is an example of skating to where the as Wayne Gretzky would say these guys were just hitting their stride Steve can you can you share any color commentary on on the deal and or you know why this is so important well they've been at this for a long time and they're a great team I've been involved as an investor less time obviously but yeah it was the really original team out of Facebook monitoring really at scale applications and then trying to take that technology that Facebook could use and applied it to our world and you know as you discovered we're in a world of micro services and containers and that is definitely hitting its stride right now and so they were in the right place knowing how to monitor this very fast moving information and and make some sense out of it so yeah really good job on their part and it was a pleasure to be along for part of the ride with them it's great to meet great founders that have a vision and stay the course because you know it's always tricky when you're early to see the future especially around ok we're talking micro services and containers way back before it became the rage and now more relevant operationally for enterprises it's easy to get distracted and it's fashion well just jump on this trend or this wave they stayed the course they stayed the nose to the grindstone and now observability which to me is code word for monitoring 2.0 is probably one of the hottest segments you saw companies going public companies filing the pager Duty dynaTrace now the you guys with your acquisition with signal FX this is an important sector this would normally be viewed in the IT world as kind of lists of white space but it seems to be a much bigger landscape can you comment on your view on this and why it's so important why is observability so hot Steve well it's been this actually been a great market to be in for quite a while they've been a large number of companies continuing to be both built up and it's pretty simple the amount of e-commerce or the amount of customer interactions you're having over applications and over the web has gone up and so anything is not performing well or house downtime literally cost you a lot of money as a company and so as these applications get more complex and they're being relied on more for revenue and for customer interactions you know simply you have to have better tools and that's gonna be something that continues to evolve we have more complex apps and more commerce is going to go through them complexity is obviously something that people a lot of people are talking about I want to ask you something around today's marketplace but I want you to compare and contrast it similarly to what your experience was at VMware when you the CTO you know virtualization evolved very very quickly and ended up becoming a really critical component of the infrastructure and a lot of people were pooh-poohing that initially at first and then all the sudden became we got to kill VMware and you know so the resiliency of VMware was such that they continued to innovate on virtualization and so that's been you know part of the legacy of VMware and VM roads will cover next next week but when you look at what's happening now with cloud computing and now some of the hybrid cloud opportunities with micro services and other other cool things the the role of the application is being is important part of the equation it used to be the stand up infrastructure and that would enable the application to do things virtualization kind of changed that game now you don't need to stand up any infrastructure you can just deploy an application then the infrastructure can be code and be self formed so you can have unique requirements as infrastructure driven by the application the whole world seems to have flipped around do you see it that way is that accurate assessment and what's your thoughts on that I think you're right on a bunch of fronts people have been calling it different things but the beauty of VMware and you know this is a while ago now but the reason it was successful is that you didn't have to change any of your software to use it sort of slid in underneath and added value but at the same time applications evolved and so the path of looking like hardware was something that was great for not changing applications you have to think about a little differently when people are taking advantage of new application patterns or new services that are in the cloud and as you build up these as they're called cloud native applications it really is about the infrastructure you know it's job and life as to run applications and it's it sort of felt like the other way around it needs to be you wrote an application for what your infrastructure was it shouldn't be like that anymore it's about what what you need to do to get the job done and so we see the evolution of the clouds and their services that are there certainly the notion of containers and a lot the stuff that VMware is now doing has been focused on those new applications and making sure VMware adds value to them whatever type of application they are it's interesting one of the exciting things in this wave that we're on this year around multi cloud hybrid cloud and public cloud now that we've kind of crossed over to the reality that public cloud has been there done that succeeded I call that cloud 1.0 you saw the emergence of hybrid cloud even early on around 2012-2013 we were talking about that at VMworld you know certainly Pat Kelson here but now you're seeing hybrid cloud validated you got outpost you got Azure stack among other things the reality is if you are cloud native you might not need to have anything on premise like companies like ours with 50 plus people we don't have an IT department but most enterprises have stuff on premise so the the nuance these days is around you know what's the architecture of IT these days when you add security into it's complicated so there's debates can there be a sole cloud for a workload certainly that's been something that we've been covering with the Amazon Jedi contract where it's not necessarily a sole cloud for the entire department of defense it's a sole cloud for the workload the military application workload or app the military it's 10 billion dollar application and it's okay to have one cloud as we would say but yet they're gonna use Microsoft's cloud for other things so the DoD's having a multiple cloud approach multiple environments multiple vendors if you will but you don't have to split the cloud up or say this is kind of one of those conversations really evolving quickly because there's no real school of thought around this other than the old way which was have a multi-vendor environment split two things what's your thoughts on the the workload relationship to the cloud is it okay to have a workload have a single clap for that workload and coexist with other clouds it's funny I've been thinking about this more lately where if you went back earlier in time forgetting cloud there used to be a lot of different type of servers that you could run on whether it be a mainframe or a mini mainframe or UNIX system or a Linux system and to some extent people are choosing what would run where based on the demands of the application sometimes on price sometimes on certifications or even what's been ported to the right one so this is I'm beating myself but you know that's that's a while ago it's not too different to kind of think about the different kind of cloud services are out there whether you're running your own on your own data center or whether you're leveraging one from the other partners I really do think in the ideal world you get your choice of the best possible platform for the application across a variety of characteristics and it's kind of up to the vendors of management software and monitoring software at security software to give you more flexibility to choose where to run and so forgetting VMware exactly but think of a virtualization layer that that really tries to abstract out and let you more fluidly run things on different clouds I do think that's where a lot of the you know the core software is head of these days to really enable that to work better and so a million other use cases with with you know storage being moved around for disaster recovery or for whatever it else might be but that core of flexibility reminds me a lot of you know choosing what application would one run would run where within your own company and the kubernetes trend in container certainly really makes that so much more flexible because you can still run VMware's on the ends beams under the covers or put stuff on bare metal a lot of great opportunities so it's exciting and you slap an API in front of them and and micro-services sort of works in tandem with that so that you you could really have your application composed across multiple environments and I think the observable observability is so hot because it takes what network management was doing in the old way which is monitoring making sure things are operating effectively and combining with data and so when I heard about the acquisition of signal FX into Splunk I'm like there it is we're back to data so observability is really a data challenge and opportunity for using what would be a white space monitoring but it's more than monitoring because it's about the data and the efficacy of that data and how it's being used whether it's for security or whatever your thoughts so there's more data than ever for sure and so being able to stream that in being able to capture it at cost all that is a big part of our you know the environments we all work and the key thing is turning that into some actionable insight and whether you're using you know interesting calculations for that or different forms of machine learning like that's where this really has to go is with all this data coming in do I avoid false false positives how do i only alert people when needed and then that allows you to do what everyone has talked about for 30 years which is automatic remediation but for now let's talk about it is how do i process all of this rich data and give me the right information to take action see we want to thank you for coming on this promote cube conversation you've been with us at the cube since 2010 I think our first cube event was EMC world 2010 that show doesn't exist any longer because that folded into Dell technologies world so VM world next week is the last show standing that has been around since the cube cubes been around of course you guys had the VM worlds had their 10th anniversary I think was 2013 as a show but this is our 10th year I want to thank you for being part of our community and being a contributor with your commentary and your friendship and referral appreciate all that so I gotta ask you looking back over the 10 years since you've been with the cube VMworld what's the most exciting moments what are moments that you can say hey that was an amazing time that was a grind but we got through it funny moments your thoughts yeah boy that's a tough question I've enjoyed you know working with you John and the cube there have been so many really interesting things for me the some of the big acquisitions that we went through at VMware where I think the nsx acquisition when we get nasarah I think that really pushed us in an interesting spot but we had gone through IPOs and acquisition ourselves by EMC and we've gone through some pretty vicious competition from whether it be Citrix or Zin or Microsoft yeah that's just the joy of being at these companies it's lots of ups and downs along the way but they all kind of fit together to make an exciting life what were some moments for you I know you had left was a twenty fifteen or twenty six point eight vs world you go down there yeah about six years what do you miss about VMware the team is what everyone kind of cliche says but it's totally true the chance to kind of work with all those people at the executive staff all the way down to like these awesome engineers with Co ideas so I definitely missed that miss shipping products you don't get to do that as much as a venture capitalist but but on the flip side this is a great world to be and I get to see enthusiastic you know very optimistic founders all day long pushing the envelope and while that was existing at the EM where it's it's what I see every single day here you've been on the cube ten times at vmworld that's the all time spot you're tied but first congratulations on the leaderboard well it's been a great ten years going forward we've seen more so go looking back I would say that you know Palmer it's taking over from Diane Greene really set the table he actually laid out essentially what I think now as a clearly a cloud SAS architecture I think he got that pretty much right again or maybe early in certain spots of what he proposed at that time though some things that didn't materialize as fast but ultimately from a core perspective you guys got that right and then went in try to do the cloud but then and this year it comes in for a software-defined you know line with Amazon and since that time the stock has been really kind of up to the right so you know some key moments there for VMware from small somalia more stuff it's fun to see pivotal now possibly coming back into after after getting started there but I think you know there's there's a hugely talented team of executives there Pat Yeltsin jurors come in and done a great job I think Raghu and all these folks that are in there are good thinkers and so I think you'll consider to continue to see it evolve quite a bit and probably some cool announcements next week talk about the role Raghu and the team played because he doesn't really get a lot of the spotlight he avoids it I know he'd I've talked to him privately he won't come on the qoi let the other guys go on other guys and gals so he's been instrumental he was really critical in multiple deals could you share some insight into his role at VMware VMware and why it's been so important well I'll push them to get on especially now that you have remote you can probably grab him no he and Rajiv and andraia Ferrell just all the guys are I think he and regime basically split up half and half of the products but I know Raghu is very very similar in the whole cloud strategy that has clearly been working well he's good friend in a very smart guy well I want you to give me a personal word that you're gonna give him in a headlock and tell him to come on the cube this year we want him on he's a great great great guest he's certainly knowledgeable going forward Steve 10 years out we still got 10 more years of great change coming if you look at the wave that's coming you're out investing in companies again you had one big exit today with the billion dollar acquisition that was happening by Splunk and signal affects a lot more action you've been investing in security what's your outlook as you look at the next ten years there's a lot more action to happen we seem to be early days in this new modern era historic time in the computer industry has applications of now dictating infrastructure capabilities is still a lot more to do what are you excited about there's there's a million things I get to see everyday which are clearly where the world is headed but I think at the end of the day there's there's infrastructure which the job and life of infrastructure is to run applications and so then you look at applications how are they changing and and what is the underlying fabric gonna need to do to support them and if you look at the future of applications it's clearly some amazing things around artificial intelligence and machine learning to actually make them smarter it's all different factors form factors that they're running on and being displayed on I think we clearly have a world where with the next generation of networking you can do even more at the edge and communicate in a very different way with the backend so I kind of look at all these application patterns and really try to think about what is the change to the underlying clouds and fabrics and compute that's going to be needed to run them I think we have plenty of headroom of interesting ideas ahead stew Dave and I were talks to Dave Stuben they want this too many man died we're talking about you know as infrastructure and cloud get automated as automation comes in new waves are gonna be formed from it what new waves do you see is it's like RPAs a I I mean because as those things get sucked in and they ships in to new waves what are the some of the key ways people should pay attention to I'm not saying the inverse tress is going away but as it becomes automated and as the shift happens the value still is there where is those new waves well I think today it looks like most applications are going to be composed of a lot of services and I think they're gonna be able they're gonna need to be displaying on everything from big screens to small screens to purely as headless api friends and so again I think at the end of the day this this infrastructure is gonna have to have a lot of computation capability have to crunch through tons of data but also have to stitch together these connections between components and provide really good experiences and ability in the network and all those are very hard problems that we've been working on for a while I think we're gonna keep working on them and new forms for the next ten years at least awesome see thanks for being a friend with us in the cube what's your funny favorite moment of the Q can you share any observations about the cube and your experiences your observations over the 10 years we've come a long way you've come a long way actually I've enjoyed it I mean it's a microcosm of all the other stuff going on but I saw your first little box that you built and used for the cube like that was that was really cool but now the fact that I'm on my laptop you know doing this over the network and it's showing up is pretty awesome so I think you're following the same patterns of the other of the other applications moving to the cloud and having good user experience because cube native here software if the male native Steve thank you so much for staying the time commenting on the acquisition I know it's fresh on the press a lot more analysis and cut to come next week it's certainly I'll be co-hosting ATS plunks Kampf later in the year so I'm looking forward to connecting with the team there and again thanks for all your contribution into the cube community we really appreciate it one thank you for your time thanks John you guys are awesome thanks for chatting okay Steve Herod managing director at General Counsel top tier VC from here in Silicon Valley and they have offices around the world I'm Jean ferré breaking down the news as well as a VM real preview with the former CTO of VMware Steve hare now a big-time venture capitalist I'm John Ferrier thanks for watching [Music] you [Music]

>> Live from Seattle, Washington, it's theCUBE, covering KubeCon and Cloud Native Con North America 2018 brought to you by Red Hat, the Cloud Native Computing Foundation and it's ecosystem partners. >> Hey welcome back everyone, we are live here in Seattle. It's theCUBE's coverage of KubeCon, Cloud Native Con, a part of CNCF, Cloud Native Computing Foundation, the rise of Kubernetes, this is what the show is all about. Three days of wall to wall coverage. We've been there from the beginning covering this KubeCon effort from the beginning. I'm John Furrier with Stu Miniman, we're here to analyze and break down the event with our guest analyst for the segment, Steve Herrod, CUBE alumni, he was there the first day we ever did theCUBE in 2010. He's been a good friend of theCUBE. Now he's a venture capitalist, managing director at General Catalyst, a premiere VC in the industry. Steve, great to see you. >> Good to be here. >> Thanks for coming on. >> Feels like the early days of some of the other conferences, too, doesn't it? >> It feels like AWS, you know seven/eight years ago where it tips over, there's a tipping point. We see that doubling, so you know, it's kind of that tipping point where there's more demand for theCUBE and we can fill it so there's great content but it's a bigger picture, right? And I want to break through that, I want to get your thoughts and let's have a shared conversation around what's really going on here. You're talking about a disruption in the industry of cloud computing. You got Amazon, just a freight train just taking all the beach, the waves coming in and this is an opportunity, this is my opinion, for the industry to kind of say, hey, it's a multi cloud world so you're not going to take all of it. You got Google, you got Microsoft, you got start ups. This is a way to create an opensource way to fill the gap. Your thoughts? You agree? >> I totally agree and I think what's interesting, this conference does not have a corporate, at least an explicit corporate sponsor. It has four or five that are all trying to have their play in it. Microsoft's not one of them, which is sort of interesting. But it was, I think, a very bold thing this year to have this big of a venue and invite this many people and then hope that you're going to get the sponsorships and all the other stuff that follows. >> In Seattle. >> In Seattle. Yeah, our weather is a little bit-- >> It's very meta. (laughing) >> Interesting. But, just to your point, I do think this is really interesting because it is more open than a lot of these conferences where people are coming together. Both open source but also so much focus on how do you do functions in a way that works across places, how do you service meshes. Like everything is, it's both good and bad because there's so many choices that people are being seen right now. >> You were the CTO of VMware, Stu you worked in the CTO office at EMC back in the day, you're seeing a systems kind of vibe going on in cloud and you got application renaissance, kind of almost like the app server days, think WebSphere or whatever, that movement in the 90's and 2000's, that kind of grew quickly, all kind of being modernized. So you have cloud scale. >> Mm-hmm. >> AI has been around for a long time but because of the cloud, there's a renaissance. Video's been around for a long time but because of the cloud, things like theCUBE is happening. So the cloud is enabling a rebirth of a lot of things. >> Mm-hmm. >> And enabling a lot of new things, how do you guys view that systems view, application renaissance? Jassy talks about a reinvent as a new kind of persona developing. >> Mm-hmm. >> As a buyer and IT investments are changing, you're making start up investments, it's crazy. >> Yep. >> What do you think? >> Yeah, so first of all John, I like what you're saying about that systems view because too often we would kind of focus on a specific tool. So virtualization was great, but, you know, big thing, I took a bunch of servers and made it smaller servers but I took the same old application and I shoved it in there, and I left it running for another five or 10 years when I probably should have modernized it. Today, you know we just had Cheryl on talking about the ecosystem and customers and what I want to focus on is how the users get value. What are building on top of this? >> Right. >> Not the next cool thing to build, but how do I run my business? How do I do cool things with genomics? How do I improve healthcare? And in many ways we're seeing some of these top down things. I mean what's gotten me so excited about things like serverless and been really poking and teasing at how that fits in with this ecosystem is it's not just about a way to kind of turn the crank on making things a little bit more efficient or, you know, I can manage more machines with fewer people, but you know it moves up things and for someone like myself, a networking guy with an infrastructure background? >> Right. >> It's a little out of my comfort zone and that's okay. You know we talked to Lou Tucker, Lou's really excited about where AI's going and what's there, so I think we're in a real renaissance here and it's a big inflection point. >> Well I think to your point, what's interesting, whenever I do a teacher course to a college or when I'm talking to start ups or even in the old days it's really easy to forget that infrastructure is not a thing in it's own right. It's solely there to enable applications and to enable other things and so whenever you get really deep in the weeds on this is a new security model for this type of container or this, it's important and you're thinking about the best way to do it but, really you're right, you have to abstract it out to can I ship value faster? Can I save customers money? Can I do something safer? You really have to think about it in that context. And there's so much activity here you have to really make sure you're thinking about where it all fits together. >> And you know, the computer science conversations changes, too. The nature of what is computer science is evolving. I want to get to that in the next kind of discussion point but I want to just, Steve, ask you, you were on the VMware side when VMware kind of entered in with virtualization. It was a desktop, it was an app, it was like you loaded it on a machine and then that ended up transforming a massive industry and so a lot of people compare what VMware did in it's growth and it's impact but saying the cloud has got certainly more orders of magnitude, you mentioned security. >> Mm-hmm. >> Where's the VMware moment in this cloud transformation impact? Your thoughts there, just because you've been on both sides, one as a driver, CTO at VMware and now as an investor. Where do you see cloud-- >> Yeah, I kind of thought of it as two different angles. One is, appealing to developers and then that taking you all the way through operations which is, I mean that is, dev ops is sort of looking at that. VMware's first product was a workstation product that made developers have a bunch of environments right in front of them and we always had a vision for getting into the operations center but we knew we had to kind of come up through that path and I think likewise, a lot of this tooling that we see here is developer first and it's them saying, "I like this tool "and I can make my job be more enjoyable this way." But what you're really seeing, especially at this one is, how do you start in the developer tools and then not be detested by developers but then actually be paid for it by the operations side. So if you look at the type of vendors that are here? You start having venture capitalists here. You have a few people wearing suits here. It is about making this more enterprisey, more production ready and that's kind of the natural progression of any major impact like this. >> And Heptio, certainly Stu was reporting earlier, the number has been better than the filing of VMware. You know, a half a billion dollar acquisition for talent and a position in the marketplace. There's liquidity so there's investment opportunities. We talked to Jerry Chan about this at AWS, I want to get your thoughts, how is the investment thesis going on because what are you investing in? The notion of a stack, has kind of transformed into Lego blocks and services. >> Yep. >> So the notion of a stack is kind of changing although I've heard people say the, "Kubernetes stack." I'm like, well, what does that mean? (laughing) >> Which one? Yeah. >> So there's a lot of kind of stack derivatives. >> Mm-hmm. >> But how do you invest in this? What are you looking for? Where is the value? >> Yep. >> Where are sniffing out the deals? Where's the white spaces? And where should entrepreneurs go? >> Yeah, and I have several companies presenting here so I've certainly done some investments around this space, but I focus on a few things very specifically. I've been around this a little while. I really like to think about not tools that go to the new, hot new companies. I really try to think about what is more mainstream company going to adopt? And that usually means a few things. It has to have enterprise capabilities. It has to fit into the rest of the things. But I look at like how are you going to digest this with your other tools and the other processes that you have in place? If it's a security solution, I look at, I don't want really something that only protects the brave new world, I want it to fit in somehow with security policies and other things that are happening. >> So mainstream adoption? IT kind of impact? >> Yeah, just like a tool that actually works across environments and lets you go from here to there. You all have talked to Illumio several times? >> Yeah. >> They're trying to do micro segmentation for physical machines all the way through containers. The other thing I'm keeping a close eye on is, this is chaos, in terms of the number of start ups doing very specific point solutions and you have to really think about how does that grow into a big enough chunk of a budget or a big enough problem. So every single time I make an investment, I ask how does this do something 10 times better than something else and is that important to the company? And that's really hard to answer sometimes. >> Steve, and what's your take on the kind of opensource, open core, business model today? To be honest, I go around, I talked to some of the founders there, and everybody wants to contribute to opensource but maybe I don't want to build a business around it, because actually monetizing that is really tough. Is it just, I look to get acquired by one of the big players here? Or can I actually build a business with opensource at it's core? >> That's literally the billion dollar question. >> Yeah. >> But I do think, like on the positive side, the number of exits or big things recently with Magento, with Cloudera doing great, with, obviously, Red Hat, but we've seen, and Neilsoft, like a lot of big acquisitions and some good IPOs. But on the flip side, you definitely have to think about it differently now. There's a growing license that is very careful about allowing clouds to host your opensource project without contributing back. Hopefully that'll allow this hosted model to play out. I personally, I certainly look to opensource. You can see what's going on from traction but when you see it as a great lead generation engine which it often is for folks, I think that's a really healthy way to avoid spending a bunch of marketing money. >> Yeah, it's been fun. A lot of different shows we go to. Love your analysis, thanks for coming on, appreciate it. Just in general, as not a VC, but as a tech person and in the industry, I want to ask you and Stu what wave are we on? Obviously Kubernetes is now kind of front and center but we've still got cloud native. Is it the cloud? You got IoT and Amazon ARM, but we saw a lot of conversations around Edge. They had some interesting announcements around satellite telemetry coming in to regions. So you got Google, you got Microsoft, you got the big players. Is it the rich get richer? Is there going to be a new second tier? Cloud service provider? Where is this going? How is it going to reshape the industry? I mean, just big picture, what's your thoughts? >> Well, this is literally what I get paid to do is figure out where things are headed. I'd say, just at a top level, this is a super fun time to be in this lower level of the stack. You mentioned already AI gets, sort of AI washing goes on a lot right now but the very core of it is literally changing every application in interesting ways. And for me, I was a former hardware designer. The fact that you can now build and have really cool new hardware that's accelerating this stuff is really exciting. You saw Amazon's announcements, not only an ARM based server but Inferentia chips. Google has been doing this with TPUs-- >> Hundred gig networking in there, like, you know, high speed-- >> It is impressive. >> Cluster configurations, it's amazing stuff. >> So I love the fact that we can actually have very big innovation at each stage of the stack and it's because the combination of every company becoming an app, digital company coupled with the power of AI to transform things means you need dev ops to faster, you need these platforms that let you do more self service. And then I sprinkle on top of that is just the ridiculous demand for high quality engineers and if you don't give them an environment where they feel productive, they're just not going to stay at your company. And so all the mix comes together. I don't think they're going to be, there'll be some giant companies that already are, but I think the ability to create a new company that becomes large quickly or becomes small quickly if you screw up is bigger than ever. >> Yeah, I think it's total acceleration. >> Everything's faster. >> Values accelerated but it's also failure, too, right? >> Exactly, everything is accelerated. >> You have an option to abandon in you NPV calculations and IRRS (laughing) in your portfolio. >> Exactly, no it's-- >> The word pivot comes to mind. >> Everything is faster, that's the right way to think about it. >> Stu what's your take on this? >> Yeah, so we're at an interesting point in the industry. It's a bit of a paradox. On the one hand, the challenge of our time, we've been talking on theCUBE since the early days, John, is it's about distributed architectures and we're decomposing all of the pieces. Even Kubernetes itself, we're going to talk about how it's decomposing. On the other hand, everything is consolidating. >> That's right. >> I've seen more vertical stack integration from the chip and hardware level all the way through. You see Apple, Microsoft, Google-- >> That's right. >> And Amazon, all have chips companies and are going really interesting stuff there but it is such a complex individual. >> It is. >> That no one company can do it all, so there is opportunity for people to build on top of that. We have new marketplaces, we have new ways of doing it so it's, yes, there's going to be some really big winners and we have seen changes but there are still opportunities and yeah, John, keeps us busy always. >> Well here's my take on it, I want to get you guys' reaction to my view on this. So obviously we're in the media business, we're disrupting media with theCUBE so we look at the market and it's kind of matched the music industry. The power curve, the power law is very flat and straight and then a very long tail, with the head of the power law is the big players. But then when media came out, it kind of created a fatter tail and a bigger torso. I think that I see in the cloud, I see the rich getting richer. Amazon, Google, Microsoft, Alibaba, and maybe a couple players underneath there, IBM, Oracle, those big guys. And then it's going to be a second tier of cloud service providers. Someone who's going to package all these awesome sets of features in the long tail so you're going to start to see a growth because the big guys cannot be winning all the mid range business. I think, you're right, I think there's going to be a lot of solutions that are just exceptional. >> Mm-hmm. >> And I think the scale of the cloud is going to create an opportunity for new kinds of service providers. Someone who says, hey, you know what? I'm going to package this differently. I'm going to assemble-- >> I think so. >> A cloud solution, on either one of all of the clouds. Why wouldn't I use the accelerated Amazon, or the power of Google? >> I think that's well thought and I do think, we've talked about this for a while too, but I do believe there's going to be specialization by industry where you have certain algorithms and data that's unique to it, by geography. There's still going to be sovereignty issues. Even by just what type of things am I trying to build. So I do think simultaneously there's commonality on the platform but that allows you to do specialization and to really serve a specific industry quite well. >> And machine learning is a great specialty thing. The metadata to power machine learning. >> So Steve, do you have final questions you want to ask us before we run out of time? >> Well I would just say, you see a lot of these conferences. I actually like to show up at these and say, what in point time does this look like the AWS reinvent. For me, what point in time does this look like maybe the VMware event in my case, but I don't know, it just feels to me like we've jumped over, we're sort of at that point where this is going to keep going and growing. >> Yeah, how do we make sure we've hit the inflection point but not jumped the charts? >> Yeah, I mean, do you think we are here? And how does this feel versus some of the other events that you spend time on? >> Yeah, I mean, John you want me to? >> I mean, you know. >> So my take, first of all, is there's a little worry and there's some concern of us that have been through this before, is like, wait, did we just create another OpenStack? >> Yeah. >> And my resounding answer so far, is no. While there might be 35 main projects here each one of those was started for a reason. They stand on their alone, they have, you know we've got Matt Klein on from Lyft, as our next guest here. >> Yeah. >> You know, Envoy, if Kubernetes didn't exist, Envoy would probably still exist. So there's a lot of these pieces that are good but it is complicated. >> It is very complicated. >> And there's all these pieces but that's a real opportunity for a lot of companies. The SIs, the big platforms, to be able to help put this together. >> Yeah. >> And the customers are thrilled with what is going on. >> That's well stated, yeah. >> There's interesting things there. Right, this ecosystem, the only ecosystem I've seen probably grow faster is the Amazon one so it is doing well and we've been looking for years as to like a nice, vendor independent ecosystem. >> Right. >> To grow because, you know, there's some of the ones in the storage industry and things like that. >> Yeah. >> All died. >> That's right. >> So there are vendor shows and this, you know the Lennox Foundation's done a nice job. >> Right, I agree. >> With it and it's been-- >> That's the unique part here for me. >> We bet early on it, so. >> Well we bet early on it, it was a good bet, but here's the challenge that they have; they have lightning in a bottle and it's definitely arrived so there's a little bit of jump to shark moment. You got some things happening that's kind of glam oriented but absolutely it's arrived. I think the challenge that they have is opensource community is a core constituency of this event, and the Lennox Foundation is structured to be kind of a very tight top, thin at the top period of management and the scale of this event and this movement is too big for them, I think, to handle. I think they either have to have sub brand or start segmenting out because if they lose the opensource community, the they're going to lose the vibe of the event and that's the core of what it is. >> Right. >> The downstream benefits, kind of a an opensource parlance, is the IT impact and the developer impact. And inherent in that is business benefits so you're going to start to see more suits coming in and you're going to start to have a melting pot and that is a risky proposition if they don't get out front on that. So yes, it's arrived, but there's so much time they're going to be doing it just to the projects. >> Right. >> Just to the innovation. >> You're going to have to wear these next time that you see them. >> There's a money making aspect of it, yes. >> Right. >> The money making aspect of this is huge. >> Yeah. >> And I think that's what we're watching. >> Yep. >> As the business people come in and say, look at this, this is billions and billions of dollars. >> Yeah. >> This is-- >> Maybe just one more thought on that. The notion is really important, this is a distributed, not really owned by one person, one company, and there's the chaos that comes with that and so how do you do the balance between these two things? >> Yeah, yeah. >> Its like when, I know, when Amazon announced their Blockchain thing, it's like, Blockchain's supposed to be distributed. Now we have a company running it in one cloud. It's like that balance between the push and pull of centralization that we're going to see. >> Well have to put some computer science architecture together and put an operating system around it. >> There ya go. >> We'll have some dev ops. Steve, thanks for coming on theCUBE, great to have you on. >> Good to see you guys. >> Well it's great to see you. A legend in the industry, Steve Herrod, CUBE alumni from 2010, been on every year. Now a venture capitalist, former CTO of VMware. With Stu Miniman, I'm John Furrier, analyst of KubeCon, stay with us for more coverage after this short break. (upbeat techno music)

[Music] [Applause] [Music] welcome to the special cube conversations here in Palo Alto cube studios I'm John Ferrier the founder of Silicon angle in the cube we're here with divest cargoes the founder and CEO of arcus Inc our curse com ar-are see us calm and Steve Herod General Partner at at General Catalyst VCU's funded him congratulations on your launch these guys launched on Monday a hot new product software OS for networking powering white boxes in a whole new generation of potentially cloud computing welcome to this cube conversation congratulations on your >> launch thank you John >> so today I should talk about this this >> startup when do you guys were founded let's get to the specifics date you were founded some of the people on the team and the funding and we were formally incorporated in February of 2016 we really got going in earnest in August of 2016 and have you know chosen to stay in stealth the the founding team consists of myself a gentleman by the name of Kop tell he's our CTO we also have a gentleman by the name of Derek Young he's our chief architect and our backgrounds are a combination of the semiconductor industry I spent a lot of time in the semiconductor industry most recently I was president of easy chip and we sold that company to Mellanox and Kher and Derek our networking protocol experts spent 20 plus years at places like Cisco and arguably some of the best protocol guys in the world so the three of us got together and basically saw an opportunity to to bring some of the insights and and architectural innovation you know we had in mind to the Mobius a pedigree in there some some top talent absolutely some of the things that they've done in the past from some notable yeah I mean you know some if you if you'd like some just high-level numbers we have 600 plus years of experience of deep networking expertise within the company our collective team has shipped over 400 products to production we have over 200 IETF RFC papers that have been filed by the team as well as 150 plus patents so we really can do something on the pedigree for sure yeah we absolutely focused on getting the best talent in the world because we felt that it would be a significant differentiation to be able to start from a clean sheet of paper and so really having people who have that expertise allowed us to kind of take a step back and you know reimagine what could be possible with an operating system and gave us the benefit of being able to you know choose >> best-in-class approaches so what's the >> cap the point that this all came >> together what was the guiding vision was it network os's are going to be cloud-based was it going to be more I owe t what was the some of the founding principles that really got this going because clearly we see a trend where you know Intel's been dominating we see what NVIDIA is doing competitively certainly on the GPU side you're seeing the white box has become a trend Google makes their own stuff apples big making their own silicon seeking the that's kind of a whole big scale world out there that has got a lot of hardware experience what was the catalyst for you guys when you found this kinda was the guiding principle yeah I would say there were three John and you hit you hit on a couple of them in your reference to Intel and NVIDIA with some of the innovation but if I start at the top level the market the networking market is a large market and it's also very strategic and foundational in a hyper-connected world that market is also dominated by a few people and there's essentially three vertically integrated OEM so that dominate that market and when you have that type of dominance it leads to ultimately high prices and muted innovations so we felt number one the market was going through tremendous change but at the same time it had been tightly controlled by a few people the other part of it was that there was a tremendous amount of innovation that was happening at the silicon component level coming from the semiconductor industry I was early at Broadcom very you know involved in some of the networking things that happened in the early stages of the company we saw tremendous amounts of innovation feature velocity that was happening at the silicon component level that in turn led to a lot of system hardware people coming into the market and producing systems based on this wide variety of choices for you know for the silicon but the missing link was really an operating system that would unleash all that innovation so Silicon Valley is back Steve you you know you're a VC now but you were the CTO at VMware one of the companies that actually changed how data centers operate certainly as it certainly as a pretext and cloud computing was seeing with micro services and the growth of cloud silicon's hot IT operations is certainly being decimated as we old knew it in the past everything's being automated away you need more function now there's a demand this is this penny how you see I mean you always see things are a little early as of technologist now VC what got you excited about these guys what's the what's the bottom line yeah maybe two points on that which so one silicon is is definitely become interesting again if you will in the in the Silicon Valley area and I think that's partly because cloud scale and web scale allows these environments where you can afford to put in new hardware and really take advantage of it I was a semiconductor I first austerity too so it's exciting for me to see that but um you know is the fish that it's kind of a straightforward story you know especially in a world of whether it's cloud or IOT or everything networking is you know like literally the core to all of us working going forward and the opportunity to rethink it in a new design and in software first mentality felt kind of perfect right now I think I I think device even sell the team a little short even is with all the numbers that are there kr for instance this co-founder was sort of everyone you talk to will call him mister BGP which is one of the main routing protocols in the internet so just a ridiculously deep team trying to take this on and there been a few companies trying to do something kind of like this and I think what do they say that the second Mouse gets the cheese and I think I think we've seen some things that didn't work the first time around and we can really I think improve on them and have a >> chance to make a major impact on the networking market you know just to kind of go on a tangent here for a second >> because you know as you're talking kind of my brain is kind of firing away because you know one of things I've been talking about on the cube a lot is ageism and if you look at the movement of the cloud that's brought us systems mindset back you look at all the best successes out there right now it's almost a old guys and gals but it's really systems people people who understand networking and systems because the cloud is an operating system you have an operating system for networking so you're seeing that trend certainly happened that's awesome the question I have for you device is what is the difference what's the impact of this new network OS because I'm almost envisioning if I think through my mind's eye you got servers and server list certainly big train seeing and cloud it's one resource pools one operating system and that needs to have cohesiveness and connectedness through services so is this how you guys are thinking about how are you guys think about the network os what's different about what you guys are doing with ARC OS versus what's out there today now that's a great question John so in terms of in terms of what we've done the the third piece you know of the puzzle so to speak when we were talking about our team I talked a little bit about the market opportunity I talked a little bit about the innovation that was happening at the semiconductor and systems level and said the missing link was on the OS and so as I said at the onset we had the benefit of hiring some of the best people in the world and what that gave us the opportunity was to look at the twenty plus years of development that had happened on the operating system side for networking and basically identify those things that really made sense so we had the benefit of being able to adopt what worked and then augment that with those things that were needed for a modern day networking infrastructure environment and so we set about producing a product we call it our Co s and the the characteristics of it that are unique are that its first of all its best-in-class protocols we have minimal dependency on open source protocols and the reason for that is that no serious network operator is going to put an open source networking protocol in the core of their network they're just not going to risk their business and the efficacy and performance of their network for something like that so we start with best-in-class protocols and then we captured them in a very open modular Services microservices based architecture and that allows us the flexibility and the extensibility to be able to compose it in a manner that's consistent with what the end-use case is going to be so it's designed from the onset to be very scalable and very versatile in terms of where it can be deployed we can deploy it you know in a physical environment we can deploy it visa via a container or we could deploy it in the cloud so we're agnostic to all of those use case scenarios and then in addition to that we knew that we had to make it usable it makes no sense to have the best-in-class protocols if our end customers can't use them so what we've done is we've adopted open config yang based models and we have programmable api's so in any environment people can leverage their existing tools their existing applications and they can relatively easily and efficiently integrate our Co s into their networking environment and then similarly we did the same thing on the hardware side we have something that we call D pal it's a data plane adaptation layer it's an intelligent how and what that allows us to do is be Hardware agnostic so we're indifferent to what the underlying hardware is and what we want to do is be able to take advantage of the advancements in the silicon component level as well as at the system level and be able to deploy our go S anywhere it's let's take a step back so you guys so the protocols that's awesome what's the value proposition for our Co S and who's the target audience you mentioned data centers in the past is a data center operators is it developers is it service providers who was your target customer yeah so so the the piece of the puzzle that wraps everything together is we wanted to do it at massive scale and so we have the ability to support internet scale with deep routing capabilities within our Co s and as a byproduct of that and all the other things that we've done architectural II were the world's first operating system that's been ported to the high-end Broadcom strata DNX family that product is called jericho plus in the marketplace and as a byproduct of that we can ingest a full internet routing table and as a byproduct of that we can be used in the highest end applications for network operators so performance is a key value public performance as measured by internet scale as measured by convergence times as measured by the amount of control visibility and access that we provide and by virtue of being able to solve that high-end problem it's very easy for us to come down so in terms of your specific question about what are the use cases we have active discussions in data center centric applications for the leaf and spine we have active discussions for edge applications we have active discussions going on for cloud centric applications arcus can be used anywhere who's the buyer those network operator so since we can go look a variety of personas network operator large telco that's right inner person running a killer app that's you know high mission-critical high scale is that Mike right yeah you're getting you're absolutely getting it right basically anybody that has a network and has a networking infrastructure that is consuming networking equipment is a potential customer for ours now the product has the extensibility to be used anywhere in the data center at the edge or in the cloud we're very focused on some of the use cases that are in the CDN peering and IP you know route reflector IP peering use cases great Steve I want to get your thoughts because I say I know how you invest you guys a great great firm over there you're pretty finicky on investments certainly team check pedigrees they're on the team so that's a good inside market tamp big markets what's the market here for you but how do you see this market what's the bet for you guys on the market side yeah it's pretty pretty straightforward as you look at the size of the networking market with you know three major players around here and you know a longer tail owning a small piece of Haitian giant market is a great way to get started and if you believe in the and the secular trends that are going on with innovation and hardware and the ability to take advantage of them I think we have identified a few really interesting starting use cases and web-scale companies that have a lot of cost and needs in the networking side but what I would love about the software architecture it reminds me a lot of things do have kind of just even the early virtualization pieces if you if you can take advantage of movement in advantages and hardware as they improve and really bring them into a company more quickly than before then those companies are gonna be able to have you know better economics on their networking early on so get a great layer in solve a particular use case but then the trends of being able to take advantage of new hardware and to be able to provide the data and the API is to programmatic and to manage it who one would that it's creative limp limitless opportunity because with custom silicon that has you know purpose-built protocols it's easy to put a box together and in a large data center or even boxes yeah you can imagine the vendors of the advances and the chips really love that there's a good company that can take advantage of them more quickly than others can so cloud cloud service refined certainly as a target audience here large the large clouds would love it there's an app coming in Broadcom as a customer they a partner of you guys in two parts first comes a partner so we we've ported arc OS onto multiple members of the Broadcom switching family so we have five or six of their components their networking system on chip components that we've ported to including the two highest end which is the jericho plus and you got a letter in the Broadcom buying CA and that's gonna open up IT operations to you guys and volge instead of applications and me to talk about what you just said extensibility of taking what you just said about boxes and tying applique and application performance you know what's going to see that vertically integrated and i think i think eloping yeah from from a semiconductor perspective since i spent a lot of time in the industry you know one of the challenges i had founded a high court count multi processor company and one of the challenges we always had was the software and at easy chip we had the world's highest and network processor challenge with software and i think if you take all the innovation in the silicon industry and couple it with the right software the combination of those two things opens up a vast number of opportunities and we feel that with our Co s we provide you know that software piece that's going to help people take advantage of all the great innovation that's happening you mentioned earlier open source people don't want to bring open source at the core the network yet the open source communities are growing really at an exponential rate you starting to see open source be the lingua franca for all developers especially the modern software developers wine not open sourcing the core the amino acids gotta be bulletproof you need security obviously answers there but that seems difficult to the trend on open source what's the what's the answer there on why not open source in the core yeah so we we take advantage of open source where it makes sense so we take advantage of open and onl open network Linux and we have developed our protocols that run on that environment the reason we feel that the protocols being developed in-house as opposed to leveraging things from the open source community are the internet scale multi-threading of bgp integrating things like open config yang based models into that environment right well it's not only proven but our the the the capabilities that we're able to innovate on and bring unique differentiation weren't really going back to a clean sheet of paper and so we designed it ground-up to really be optimized for the needs of today Steve your old boss Palmer rich used to talk about the harden top mmm-hmm similar here right you know one really no one's really gonna care if it works great it's under the under the harden top where you use open source as a connection point for services and opportunities to grow that similar concept yes I mean at the end of the day open source is great for certain things and for community and extensibility and for visibility and then on the flip side they look to a company that's accountable and for making sure it performs and as high quality and so I think I think that modern way for especially for the mission critical infrastructure is to have a mix of both and to give back to community where it makes sense to be responsible for hardening things are building them when they don't expense so how'd you how'd you how'd you land these guys you get him early and don't sit don't talk to any other VCS how did it all come together between you guys we've actually been friends for a while which has been great in it at one point we actually decided to ask hey what do you actually do I found that I was a venture investor and he is a network engineer but now I actually have actually really liked the networking space as a whole as much as people talk about the cloud or open source or storage being tough networking is literally everywhere and will be everywhere and whatever our world looks like so I always been looking for the most interesting companies in that space and we always joke like the investment world kind of San Francisco's applications mid here's sort of operating systems and the lower you get the more technical it gets and so well there's a vaccine I mean we're a media company I think we're doing things different we're team before we came on camera but I think media is undervalued I wrote just wrote a tweet on that got some traction on that but it's shifting back to silicon you're seeing systems if you look at some of the hottest areas IT operations is being automated away AI ops you know Auto machine learning starting to see some of these high-end like home systems like that's exactly where I was gonna go it's like the vid I I especially just love very deep intellectual property that is hard to replicate and that you can you know ultimately you can charge a premium for something that is that hard to do and so that's that's really something I get drugs in the deal with in you guys you have any other syndicates in the video about soda sure you know so our initial seed investor was clear ventures gentleman by the name of Chris rust is on our board and then Steve came in and led our most recent round of funding and he also was on the board what we've done beyond that institutional money is we have a group of very strategic individual investors two people I would maybe highlight amongst the vast number of advisers we have our gentleman by the name of Pankaj Patel punka JH was the chief development officer at Cisco he was basically number two at Cisco for a number of years deep operating experience across all facets of what we would need and then there's another gentleman by the name of Amarjeet Gill I've been friends with armored teeth for 30 years he's probably one of the single most successful entrepreneurs in the he's incubated companies that have been purchased by Broadcom by Apple by Google by Facebook by Intel by EMC so we were fortunate enough to get him involved and keep him busy great pedigree great investors with that kind of electoral property and those smart mines they're a lot of pressure on you as the CEO not to screw it up right I mean come on now get all those smart man come on okay you got it look at really good you know I I welcome it actually I enjoy it you know we look when you have a great team and you have as many capable people surrounding you it really comes together and so I don't think it's about me I actually think number one it's about I was just kidding by the way I think it's about the team and I'm merely a spokesperson to represent all the great work that our team has done so I'm really proud of the guys we have and frankly it makes my job easier you've got a lot of people to tap for for advice certainly the shared experiences electively in the different areas make a lot of sense in the investors certainly yeah up to you absolutely absolutely and it's not it's not just at the at the board it's just not at the investor level it's at the adviser level and also at you know at our individual team members when we have a team that executes as well as we have you know everything falls into place well we think the software worlds change we think the economics are changing certainly when you look at cloud whether it's cloud computing or token economics with blockchain and new emerging tech around AI we think the world is certainly going to change so you guys got a great team to kind of figure it out I mean you got a-you know execute in real time you got a real technology play with IP question is what's the next step what is your priorities now that you're out there congratulations on your launch thank you in stealth mode you got some customers you've got Broadcom relationships and looking out in the landscape what's your what's your plan for the next year what's your goals really to take every facet of what you said and just scale the business you know we're actively hiring we have a lot of customer activity this week happens to be the most recent IETF conference that happened in Montreal given our company launch on Monday there's been a tremendous amount of interest in everything that we're doing so that coupled with the existing customer discussions we have is only going to expand and then we have a very robust roadmap to continue to augment and add capabilities to the baseline capabilities that we brought to the market so I I really view the next year as scaling the business in all aspects and increasingly my time is going to be focused on commercially centric activities right well congratulations got a great team we receive great investment cube conversation here I'm John furry here the hot startup here launching this week here in California in Silicon Valley where silicon is back and software is back it's the cube bringing you all the action I'm John Fourier thanks for watching [Music]

>> Announcer: Live from Las Vegas, it's the Cube, covering VMworld 2017. Brought to you by VMware and its ecosystem partners. (bright music) >> Hi, I'm Stu Miniman, joined by Justin Warren, and you're watching SiliconANGLE's production of the Cube here at VMworld 2017. Three days of wall-to-wall coverage. Sometimes people ask me, "Stu, you guys are doing so many interviews, isn't it tiring?" I say well, but I get really good guests, and that makes my job really easy. We've had lots of customers on, I've been enjoying just as many others. One of the people that I've gotten to get to know through the VMware community, I'm thrilled to be able to bring back on the program, is Steve Herrod, who's now the managing director of General Catalyst. Steve, thanks so much for joining us. >> Thank you, I feel like a veteran of this program, I love being on it. >> Yeah, I remember back when we created one of our first what we called Sizzle Videos, we had B roll from you, and Pat Gelsinger before he was on the VMware side, so you are always welcome on our program. We're glad that we could find time that fit on both of our schedules. You made a guest appearance, a younger Steve Herrod maybe, in the keynote had a lot of us laughing, so. >> Yeah, that was fun to be back. I think the story's kind of interesting. I don't know if it got lost in the dialogue a little bit, but the idea was something seemed super novel at the time, and then it becomes kind of the new normal, right, and I think that was the point he was trying to make. And it was, it was truly the case back in the early years of VMware, trying to convince people to do these virtual machines was ridiculous. Now it's about all these other topics. >> I think back, you know, I've worked with VMware for 15 years, I think back to how many people I explained what is virtualization. When vMotion first came out, the awe and excitement on everybody's, but it's 2017, come on. Virtualization's like the legacy. Now it's cloud, and developers, and blockchain, and everything. >> Steve: Containers and serverless! >> Stu: Serverless. >> That's right. >> Well, I guess they brought up serverless before I did, so that's great. Steve, what's happening in your world these days, what are some of the big conversations? >> Yeah, this's obviously one of my favorite conferences to come back to also, just to really see what's going on at a top level. Mostly because of the customers that are here, and then, obviously the infrastructure vendors. But I don't know, I feel like as I get older and go through this industry longer, you see a lot of the new things that are popping up, and for me it's always been about heterogeneity. And when we started VMware, what actually mattered was you had different vendors of servers, and like, it caused chaos by having different server vendors. That's kind of tamed, yeah exactly, there's like the BIOS or the HAL, and Windows had to change, or something. And like, no one talks about that whatsoever now, but if you just kind of squint your eyes a little bit, the heterogeneity is now am I in a public cloud, or private cloud? Or maybe, do I put my software into a container versus a VM? So I just, I always like looking at what is the heterogeneity, and then what are the real customers supposed to do with it? How do they navigate it and what companies can be built to help you sort of smooth it out and use the different things. I've been doing that all my life, and continue to look for companies that do that. >> Yeah, that mix of different things in customers, particularly Enterprise customers, who have like nine of everything. It seems like with VMware and the AWS now being more, well, we're friends now. Whereas previously it was like, oh no, you have to pick one or the other. It's like the heterogeneous nature of things, is that well, actually no, we need to work with multiple of, you all need to play nicely with each other, otherwise we can't use you. Because even if I, you know, MNA, for example, I go and buy someone, they might have something different. And that seems to get lost a bit. The vendors seem to focus a lot on greenfields. So do you think that this kind of, we're friends and yes, you can use both of us, and it's all good, do you think that's the way it should always have been and that's going to be good for customers, they're going to adopt this and want more than they might have with something that was like, no, no, you have to choose. >> I think that's absolutely right. The way I've seen people doing things, the customer always wins. That's kind of, every time I have a startup who's gotten created and they have a great customer, and they say, you know, blank vendor won't work with us, I have them call the customer and tell them to tell their other vendor, work with this startup. And the good news is any company that's successful is super customer-centric and they do listen. I think in this case, it's really fascinating. If you think about it, it used to be, like, you've been covering this forever, it used to be VMware was about server consolidation. And that's like the furthest thing from anyone's mind now, right, now it's, the real limiter to doing these new things tends to be people and operational skills. And so the idea that you can use the same way you're used to working with infrastructure, the same way that you grade storage, and the same way you think about it, and then apply to a world that just kind of outsources all of the underlying goo that they used to do on the servers, it makes a ton of sense from a VMware customer standpoint. And yeah, obviously as you look at the relationships you have with Google or with Amazon, you know, they're very incented to have new cloud services that people are able to consume, and the number one problem for them is how do you get, like, real important apps to leverage these new services. So it's symbiotic in the sense that maybe some of these existing apps, as you start to morph them, they can leverage a Amazon or a Google service. And so it's helpful on the needs of the public clouds as well. >> One of the areas where the heterogeneity of the environment causes even more complexity is security. So I know that that's something you've looked at awhile, we've talked to some of the companies that you work with. Heck, I think, you know, IoT, the surface area, is just changing by orders of magnitude. Security, top issue being discussed here. You know, Pat Gelsinger got up on stage and says, hey, I need to apologize for the industry because we failed you. (laughing) So you know, Steve, why haven't your portfolio companies fixed all of this yet? (laughing) >> Why do you still have security issues? >> Stu: What's your take on what VMware is doing, and yeah. >> I mean, it's obviously something people, if there was the Cube in 1981, it would have been talking about security (laughing) as a challenge. But I do think, you know, things have changed quite a bit as of late. I think the number of really advanced attackers, you know, truly nation states or organized crime going after it, it's the same reason that robbers rob banks, cause it's where the money is. And so I think the sophistication has gone up. At the same time, when the complexity of the environment has gone up a ton as well. And so I would say if we were in the good old days of less sophisticated attackers and like, a closed-in data center with no roaming mobile phones or SaaS, like, we'd probably be in pretty good shape. But a combination of those has really made it take to the next level. I think, you know, I think you have to really look at the complexity of those changes right now. I think the fact that there is a public cloud and a private cloud and that you have a device that has certain characteristics and then you have your server, it leads to the heterogeneity that we were talking about before. And so I really obsess over companies that can come in, like VMware is certainly trying to do as well, but that really try and come in and make something where a single way of thinking about security applies wherever stuff is running. And I think it's just too complex to have to have different admins, different policies, different everything. And certainly, if nothing else, it'll keep you from moving faster and leveraging the full cloud models. >> Yeah, given that security is, has been, it's been an issue for forever. It seems like that's something that just doesn't change. Is that due to the fact that we haven't actually done anything about it the right way, or do you think that it's just an inherent situation that is not going away because the problem is humans? And the problem is always humans, everything is a people problem. But in this case, is security, is it just going to be something that we have to manage rather than solve? >> I personally think that, I'm pretty optimistic we can do so, so much better than we have. I think it's always been- >> Justin: We are coming off a pretty low bar, so. (laughing) >> I thrive under low expectations. (laughing) So it's really good. But on a serious note, I think that a lot of the way that people looked at security has always been the cat and mouse game, where it's, I'm trying to stay ahead of the other guy, whether it's zero days, or whether it's, I mean, now we're getting malware infected through ad networks that show up on your favorite websites and through emails, like, the sophistication of spam attacks, or phishing attacks, are just ridiculous now. I mean, it looks so realistic. So I'm just a big advocate of let's totally think a different way about how we do security. And one thing I talk about often and I'm really obsessed with is the notion of, okay, we're always going to try and stop the bad stuff from hitting, but now we actually have to stop it from doing damage once it's in. And that's whether it's the segmentation that goes on in the network or whether it's, I have companies that are really focused on doing it in web browsers, the notion that you really have to sandbox and keep things in place is something I think is going to be a big step forward. Even like a database level right now, whenever you hear, I broke into Anthem Health and stole like six million records, like maybe we have row by row encryption, or maybe we have ways that, again, try your best not to have them happen, but when they do, let's just stop the damage from being as big as it is. So a model like that I think will be a really important part of the security posture going forward, which just people haven't put enough effort into. >> Okay. >> Steve, we've talked to you the last few years about developers. This year, I know they've got a hackathon, but I don't see as many hoodies, there's no longer a developer track, even, Pivotal made an announcement this morning, I'm like, come on, they didn't bring James Waters out? Rob Mees like all dressed up, looking proper, with the blue shirt and you know, the blazer and everything, so, where are the developers for the community here? >> Well, I do know, like when we were first starting to introduce a developer track, the day we announced the spring acquisition, for those that were around for that, there was complete stares and just like, this audience is a great, great audience, mostly focused on infrastructure, and thus, you know, it really wasn't a good fit there. So I think part of it is just knowing your audience, knowing that the goal of this particular conference is to make IT-enabled development of apps in a new way. So I think it's very smart that it's changed the focus quite a bit. But I do think, you know, when you have this type of solution, you're trying to solve all the problems in the hypervisor layer or in the management tools layers that you have, I think, as you go and think, like, take the security model a little bit further, some interesting announcements and good things going on here, but I'm kind of obsessed also with how do we make developers do a better job of having the applications being protected in the first place? And so there's a lot of research and interesting startups that are around self-protecting software. And it's like really putting it at an even higher level in the stack. And that's something that you would do at an infrastructure layer. It's something you would actually do at a developer conference or a developer focus. So I think you got to just be careful that you know your audience, you're certainly talking about the right solutions, but you're aware of the different approaches to doing this. Especially for things like dev ops, you really need to really immerse yourself with how people are developing and shipping their software to get the solutions in place. >> Yeah, it does feel like VMware has stopped apologizing for existing, so, you know, sort of bringing developers and saying, you know, we have a developer track, it's sort of like, oh wait, no, no, no, we're cool, really, we're cool. Whereas letting that go feels more like, no, no, we know who we are, and this is our audience. We will be the best us we can be rather than trying to be someone else. >> I think the buzz I've gotten just from walking around as you all said as well, this has been a very positive VMworld, and again, it's not only not being apologetic, but it's also like real announcements and real partnerships that are shipping. You know, obviously the Amazon and Google being big ones, but just across the board. Yeah, there's a lot of positive, if you even look at like the top tracks that are going on, it's VMware on AWS. So there's like real progress, and I think there's real interest in that side of things that makes you not have to focus on some of the developer stuff that might have been focused on in the past. >> Yeah, well certainly they're doing well on things like NSX and VSAN, which just seem to be selling like hotcakes. >> Yeah, those are- >> So that helps. And customers love it. >> Very interesting, yeah. >> Yeah Steve, speaking of the public clouds, I mean, this year we're finally starting to see some of these things come together. For a few years, we were almost like, oh, you know, messaging was like, they don't exist, or they're book sellers, or you know, if they win, we all lose, and everything. I was at the AWS summit in New York City a couple of weeks ago, and there's a couple of sessions done by VMware, Amazon's in the booth, Andy Jassy gets a big applause here. Last year, I've been at re:Invent for a number of years, that big AWS show. I know you've been there for years, starting to see some of the people that, you know, were early in this community playing there, how do you see those worlds colliding, the landscape, the competition, the coopetition, you know, what interests you there these days? >> I think it's pretty clear, and people have been talking about this for a while, but it's more clear to me than ever that, you know, there's always a swing back and forth of decentralized, centralized, I think, I think what we're really trying to find out is what are the boundaries going to be between applications that live in the public cloud and applications that stay on premises. And it's usually tracking some level of certifications, some level of data movement, all the things that you all have talked about before. But I think, you know, whether it's 50% is in the public cloud or 80% or 20%, I think that's where these lines are being drawn now. And it's very obvious that customers who want some of the benefits of the public cloud are going to be using more, and VMware needs to be the guider to help them get there. And likewise, Amazon and Google, they'd love to have more of the on-premises workloads and have a way to really speak to those more valuable, in many cases, applications. So it makes perfect sense, this is like this, I guess, battle that'll be going on forever. And I don't want to forget this either. What I think is also fascinating is, we also have these, you know, people talk about edge computing, but whatever it is, there's increasingly powerful devices, network connected, even further from the data centers. So I think we're going to have, in the end we're going to have like these edge device things, you're going to have your own data center, and then you're going to have a plethora of public clouds and SaaS offerings. And I think, again, just getting back to the master theme, how do you tame and let people effectively use these different layers and protect them? That's going to be where I think a lot of interesting companies are born. >> Yeah, great point. Cause sometimes people conflate some of these things. Cause for me it was, the public cloud kind of pulled from the data center, and now you've got the edge kind of pulling, >> Steve: Yeah, the other way. >> You know, that relation from the public cloud and that interesting dynamic and, you know, where a customer lives. What's the role of IT in the future? What's the role of the CIO? Is there some of the things, did you look at those pieces? >> I try to, you know, I actually tried to create this, I tried to make this nerdy formula, like, the number one question for IT has traditionally been like, where should I run stuff to be most cost effective, most responsive from a time standpoint to my customers, that I can secure it, based on the type of data, that I can pass certain certifications. So in many ways, when we got started with VMware, it was all about, let's take inventory of all my applications and bucket them and choose which bucket could be virtualized, which had to stay native. Now they're bucketizing them and saying, which ones could run in the public cloud, which ones need to be rewritten? And I think at the end of the day, an IT, a good IT team will know the business value and the, like, the goal of these applications and then help provide the easiest way to run them and the right place for what they're trying to do. Again, whether it's these end devices or whether it is their own data centers or elsewhere, I think the idea that they're a broker of services, some of which they provide themselves and some of which they outsource, I think that's the modern IT role. >> Yeah, that's quite a substantial change from what IT has traditionally done. And there has been, talking to customers and service providers and vendors, there has been a shift in ability, I think. But it feels like it's still only just getting started, rather than it being, you know, well advanced. Is that what you're seeing as well? >> It's a real shift, like you're saying, I think it's, we used to say it's like moving from the builder of services to the broker or services. So I do think that's a good analogy, where it used to be, if I don't build it myself, I can't offer support for it, I can't do cost controls, I can't offer it quickly. And so now I think they're just realizing their job is to get you the best thing for what you need to do. And again, some percentage of that time, it is by building it themselves. >> Justin: Yeah, okay. >> Steve, I'll give the final word with a wildcard, you know, VR, AR, AI, ML, blockchain, Ethereum, you know, what's exciting you these days? What things are you looking, yeah, John Furrier's going to run up here and tell you about the ICO soon I think. (laughing) But you know, you're down from the Valley, what's real, what's interesting, especially from your technology standpoint? >> I have an awesome job, much like you, I get to meet interesting people all day long. And all of them have interesting ideas of where the world is going. All of them are optimists, they think they're going to be the one to deliver it, so I love that part of it. But cutting through what's real and what's hype versus not is really the core job. I guess for you as well. (laughing) So I would just say, as with the traditional Gartner cycle, things get so overblown, and then reality settles in, and then they go forward. I probably get five pitches a week on this is machine learning for blah, and if you even knew a little bit about AI and ML, you realize, no, you're using stats. Like, it's just being used to so many ways. And we used to do it with the cloud, cloud washing it was called at the time. So anyway, I do think there's a lot of really substantive things going on. I love the blockchain work. I think it's also been a little overinflated, but the idea that you can do distributive brokering and keep consistency is going to play out in all sorts of areas. Maybe John's ICO will be a sign of the future for the core piece there. But I'm a big fan of what's going on with the combination of proper machine learning that's successful by near-humans and that has cloud resources to back it. I think it's those two things, you have to have both of them to really just start attacking a lot of problems. And we look at, certainly I look at the ones as they apply to security and to things like that, but they apply across everything from medical to almost every other part of our life. So I see a lot of those right now, and I think it's going to be a pretty big change as we head forward. >> Awesome, well Steve Herrod, always a pleasure to have you on the program. Thanks so much for joining us. For Justin Warren, I'm Stu Miniman. The Cube will be back with lots more coverage from VMworld 2017. Thanks for watching the Cube. (bright music)

>> From the SiliconANGLE Media office, in Boston, Massachusetts, it's the CUBE. Now, here's your host, Stu Miniman. >> Hi, I'm Stu Miniman and welcome to a special presentation of CUBE Conversation here from our Boston area studio. Welcome back to the program from ClearSky Data, Ellen Rubin the CEO and Laz Vekiarides who is the CTO. Laz and Ellen, thanks so much for joining us. >> Us too, nice to be back. >> Hi, thanks for having us. >> All right, so, always good to talk to a local company, we talked about technology, I was actually in the Seaport district earlier, recently, and you know there's a lot happening in this space, as we know, it doesn't all happen, in Seattle for the cloud, Silicon Valley for all the VCs, so Ellen I've been speaking with your company since its early days-- >> Stealth mode, yeah. >> Stealth mode. First time I met you in person was at the Amazon reinvent shows, so still one of the focal points of the cloud and everything that happening there. But give us the update, you've got some new fundings, some new partnerships, tell us what's happening with ClearSky. >> Absolutely, I'm really happy to be back. So yeah, we've been, last night been building this company together, we started in 2013 with the, you know, sitting in a room with a white board but the company has really been actively funded and kind of building customers and our service offering since 2014. And we've just seen a tremendous amount of growth especially in the last year. So we're excited to be able to share that we are raising a 20 million funding round, and it includes some new investors, strategic investors as well as some of our existing investors from General Catalyst and Highland and Polaris. So it's very important for us but it's also great for our customers because it gives us a chance now to be in more places and have more people on our team to really grow and add to the support the operation of what we're doing. So that's kind of part A. And we're really looking forward to doing that. We've added a head of our sales organization, our chief revenue officer, Roger Cummings, and so we've really kind of filled out our team and our growing as a company overall. So that's kind of part A. >> So yeah congratulations on the numbers. The other piece, I think back to the first discussions we had when you talked about living in lots of environments and how do you help customers, there was somebody that you're partnering with now that I believe came up in that first discussion because they've got one of the largest global foot print on the planet that I'm aware of. >> Indeed, so yeah, also today we're announcing our partnership with Equinex and we've actually been working, we've been talking with Equinex since we were in stealth mode and we've been working with them over the past several years already in a couple of locations. And we can talk in a lot of detail about sort of where the great alignment fit is, but the news for us is that we're now gonna be able to really expand the reach of our service across the rest of the United States. So we're gonna triple the number of locations, and we're gonna be basically anywhere our customers need us to be, as you know we are a metro-based service so it's very important from a latency and access that we be in more locations. And we see it as basically a great jumping off for filling out the initial vision of being across United States and now it's starting to expand that side. >> Yes that's great. Laz, let's pull you in here. If you look at the data piece of it, we understand that latency is clearly important. That's the conversation we've had back in the storage world for a long time. Data has gravity, it's tough to move it, and having some locality is super important. So what are your, for people who aren't as familiar with the company, just give us the thumbnail, architecturally, and tell us what you've been seeing update wise, from a technology standpoint. >> Sure, so, our technology is really metro-based network, so we deliver caching services on the edge to make all of the resources, specifically the data management resources that are far away appear as if they're nearby. Now one of the problem is, as you know with the cloud, is that they are only in certain locations. So unless your nation is in Virginia or you happen to be in the Pacific Northwest, you have a latency problem. And so as a result, some certain types of applications aren't gonna work well. What we've built is really an edge-based data management network. We provide high performance file and block services. To systems at the edge that leverage the cloud for their back ends. And so as a result, you get all of the economics of the cloud and the flexibility that you get with those type of services. But you get the experience of enterprise class functionality and capability's and it's nearby. So you don't miss any of the things that you are kind of used to. >> All right, Laz I want you to help explain something, when you say edge, what does that mean to you and your customers because there are server providers edges, there are kind of the IO key end devices edges, there are some things in between there, so what specifically are you helping with? >> So this is true it's actually really interesting. So we have a very specific definition of edge, we call it the data center edge. And hence our alignment with Equinix, they are in this metro facilities when you look at our architecture we're either putting an edge appliance either in an Equinix facility or in a customer's facility and then tethering that into the Equinix facility. So that last hundred or so miles around an Equinix facility is our edge and that is gonna be our definition now. That could change over time, just like everything else in the cloud changes, because we basically have built software that can run in any type of Linux environment with some monocom activity but in our current market push, our edge is really the data center edge. >> Okay, Ellen I love that that really fit in into the discussions I've been having a lot over the last year or so. People talk about hybrid cloud when they talk about multicloud. It's, they're using lots of SAS, they're usually using more than one public cloud provider and then they have their own resources, and their data center often times has a rack in Equinix and leveraging things like direct connect from Amazon, the equivalent for Google and Microsoft, or expanding those definitions. Bring us inside what are you hearing from customers. I love to hear what you can share about specific customers or in general what's the need that they have and where you fit in into all of it. >> Yeah, no, you're totally on point for what we see everyday which is we deal with medium and large enterprises. So our customers are in health care, they're in financial services, they're in legal services and also in managed service providers now as a newer market for us. So we have customers that include companies like Partners HealthCare, Mass General Hospital, Nuance Communications. We've just added Unitas Global as a managed service provider. Special Olympics is a customer and some regional hedge firms and law services, like Miles and Stockbridge. So what you can kind of see is that we have this really nice set of experiences that are not just what is Facebook doing or what is Stage3 doing but we kind of have a broad range of what CIO and heads of IT are really struggling with. And it's exactly what you're saying which is the edge to a customer very much depends on how they're thinking about where their application are gonna run, and our philosophy is don't worry about it, we've got you covered, your data is gonna be high performance, low latency, you're totally protected and you can access it from wherever you need to. But for a lot of customers honestly we've seen everything. I won't embarrass anybody specifically but there are still some kind of scary, old data centers out there. There are server closets that are acting as data centers. People still have things in their buildings. And then you've got everything to like world class, Equinix, Colo, that is in Ashburn, or whatever. And then people are obviously trying to adapt multiple shades and flavors of public clouds. And I was just out at a customer's yesterday where the CIO was talking to us about the fact that they have grown through a tremendous amount of acquisition. So they've got one of everything. And then the cloud for them was a bunch of people did a bunch of things in Amazon five years ago. Then they decided to standardize on Azure. They don't really know why they standardize on Azure. And they realized that that was not actually answer for all their problems and then they started to think about how Google might actually be a much better fit because of some of the analytics works they're trying to do, and by the way they've got data centers all over the world. That is a very typical scenario that we see everyday and for the customers hedging their bets and not being locked into anything is really, really important to them, because the application keep evolving and new things are getting in some ways built for the cloud, but sometimes the edge actually is still critical, right? In terms of where the actual physical source systems are. >> Yeah, so, I would say the elephant in the room is that kind of how do I get my arms around this multi cloud environment and there's not one company that's gonna solve all of these issues. I've had everything-- >> And even if they did, would you really put everything in one cloud? Probably you wouldn't? >> Right, but it's the, okay, I've got all of these clouds out there and all of these things, I have licensing issues I have to worry about, I have identity management I have to worry about, there's the overall management of it. And it seems primarily it's the networking piece that you're helping with, maybe explain a little bit more, Laz it probably comes to you as to that elephant there, it's ClearSky data, we solve your networking challenge for multicloud and it's more than just that. >> Right, so, it's sometimes embarrassingly I actually started my career in the networking space and so a lot-- >> It's okay, I did, too, it's a training. >> So when Ellen and I started talking about what we wanted to do, we were really focused on networking. Maybe I had enough of storage. And so a lot of what we discovered was that the network is an extremely sort of undersold part of the overall cloud strategy of any company. If you really want to go to the cloud this is really about moving huge amount of data back and forth from these locations. And so we've built a very, very high performance one-hub network from our pops right to all of the various regions of the public clouds. So what this basically means for our customers is that they don't have to worry about the internet, they don't have to worry about the security that they need to set up in order to get into the cloud, and the amount of throughput that we can get through is really astonishing. So we've really built a system that can maximize this network pipes. So even our smallest customers can move in excess of 20 terabytes a day back and forward from the cloud. So this becomes a really really interesting solution if you have a lot of source system or you have a lot of data to move. We can outrun that Amazon truck. >> So I want you to, I think back five years ago, I heard Equinix, some of the other large data centers, they were like, "Oh we're just gonna give you "a cloud market place and there'll be all these services "and if you need to access something, we'll just be able to "throw a 10 gig wire between somebody's connections." It sounded really good but it sounds like you're helping fill a gap. Maybe explain what that is. >> Well so most of the networking pieces are actually very expensive, very complicated to set up, first of all. So you also have port charges and all sorts of high availability issues that you need to resolve with each one of the clouds. Additionally, although they are sort of on demand, you're not using all those bandwidths all the time and you don't know when you're gonna need it. What we've done on the network is to make it possible for you to utilize 40 gigabytes of throughput, our 40 gigabytes of throughput, into the clouds pretty much whenever you need it. So for example, latency from Boston to Amazon niche, for us 11 milliseconds. For most people if they don't have direct connect at some exuberant price they're gonna end up experiencing in the hundreds of milliseconds if they're going over the internet. So that and the bandwidth guarantee is you think you have a one gigabyte internet connection but that's not really what all the elements along your path are gonna provide you. So there's a lot of variability and we make that all go away we make the management go away, the security issues go away, and so it's totally seamless. You just need to connect into our network with our edge, it's as if the cloud really isn't there. And if you need to access your resources in the cloud, we can bring your data to EC2 and you can connect instances to it. So the whole process of moving things back and forth is so seamless and transparent, you don't just manage it. It's all sort of a byproduct of the architecture. >> I was just gonna add, Equinix invested early and bet early on becoming a cloud hub. This idea of having a cloud exchange and a lot of the other services that are plugged in, is a tremendous value to customers. But what we do see is that there is still a lot of customers out there and I'm sure this will persist for a while where there's still even yet further distributed last mile issues, and customers are moving into Equinix and Colocation sites for all the benefits that they bring and we take full advantage of that and help drive that from our side. But we also see that there are things that are just not moving and need to stay put and it's either because of legacy reasons, compliance reasons, they don't want to invest to re-platform things. There are a lot of reasons that are out there and because we both come from the enterprise infrastructure world, that does not scare us. So we understand that what you have to do is you have to meet the customers where they live, right? And you have to make it easy and accessible and as Laz has described in kind of a turn key situation where however your application wants to run and be best situated, we're gonna make sure that your data is available to you. >> Yeah you bring out some great points there. A line I used many times recently is there was the promise that cloud was going to be simple and cheap and it turned out to be neither of those. What do you see some of the biggest challenges, Ellen, we start with you maybe, what are your customers facing, what do you excited about that's actually made progress the last few years, and what do we still need to do as an industry as a whole? >> Well I always have to say this and of course it makes me just feel completely so old but I've been in the clouds since 2008, right? My last company's cloud switch was kind of that early, okay, there's a thing it's called the cloud, it happens to be Amazon but there'll be other clouds too. So you have to say fast-forwarding 10 years, a lot of really good progress has been made and it is for sure the case that now when you talk to enterprise customers and to the CIOs they're in the cloud, they've adopted the cloud, the cloud is in their mental picture of where things are gonna be, they've accepted the fact that they have developer groups are already in the cloud and have been for a very long time and it's part of their portfolio now, to make sure it's protected and highly available and compliant. So I think that is progress. The best thing that ever happened was, I don't have to convince people the cloud is more secure than what they're doing on Prem, because everybody kinda knows that, so that's good news. We don't have to have that conversation 20 times again et cetera. But what I do see that's surprising to me is that still some of the fundamental problems are still problems. Getting my data into the cloud. You think, c'mon we've got lots of solutions, tools, and toolkits and stuff like that. But it's still a very major problem. Networking of course still being a key issue for customers. I don't want to rollout a bunch of new lines, I don't want to have to hire a snowmobile, I don't want to- you know, rebuild everything form scratch. So that is still I think shows up more than I would have guessed. Right now what we see is there's a lot of focus on operational things, in terms of how to optimize what turned out to be the high cost of the cloud. Every one of our customers knows if that pull data back from the cloud that's not good. So they've learned that, they've found that out and they were kind of a little surprised the first time the bill came in and it was really high. So this idea of having tools that allow optimization of using the cloud more cost-effectively and figuring out which cloud is going to be more cost-effective based on the access patterns. There's more awareness of it but there's still a lot of struggling with that. >> Laz, would love your comments on that. >> Well there are, the whole notion of cost-optimization is deeply embedded in our technology. Every time we have a conversation with a customer the first thing they ask, they ask about egress fees, is it really just the same price no matter how much I use it? And they think about all these different, like things about IOPS for example. Because the cloud providers have sort of indoctrinated the market to think about what their IOPS needs are. In order to get them to the appropriate price point. So there's a lot of optimization there, that I still don't think that the customers really got. How many people really understand how many IOPS a particular application really needs? And how many should I buy and if I buy the wrong number oh my god everything is messed up. So the ability to solve those types of problems for people. In a way that it becomes a non-issue is still. Certainly we're doing it for storage but there are all sorts of issues just like that for compute, there are all sorts of issues like that for networking as well. So anyone who's trying to build an application on top of this platform really needs to think about those things. Thankfully our customers don't have to worry about a whole slew of things because we've actually arbitrized out all of the unusual aspects of terrace of network providers versus cloud providers, access fees and transaction fees et cetera. Anyone whose doing this need to think about this in a very analytical way, which I don't think IT has been used to up until now. They overbuy as you know, and they continue to overbuy and as long as there's no complaints about performance, and there's no complaints about excesses in cost everything is fine. That's not how the cloud works. I think we're getting to the point now where any serious move to the cloud now is going to require a lot more thinking and a lot more analysis. There's still a mentality that the cloud is cheaper, and then when people try it, they quickly realize "Oh my god look at this bill." And it's forever, it's not like you can just shut everything off. It's every month. It's not just like you spent forty thousand dollars in a month and you can shut it off. So it's a difficult problem and I don't think IT's prepared, in general. >> I think one of the things we've seen at ClearSky over the last several years is the willingness that customers have to use the cloud for data protection. I think when we started it was sort of, you know, everything's going to the cloud, the whole thing. Damn the torpedoes full speed ahead, right? I think a lot of what people are actually doing is archival back-up DR, those are comfortable, state of the industry is sort of there should be a connection between the, wherever the Prem is for the customer and then out to the cloud for things that are longer tail kinds of things. The problem is, what if you have to pull the data back? So these are thing we think about everyday. >> Right, Ellen want to give me the final word, 20 million dollar phrase, the partnership with Equinex that's going to increase availability. What's this mean to your customers and to the company ClearSky as we look forward. >> Well I think one of the things that's true about the fact that we are a network centric kind of company is that the power of the network is in how many access points you have. So what this means is that customers who are national, and then global will have more opportunity now to be able to access things with ClearSky. And to grow and expand with us, which is great. We've seen tremendous expansion business this year. Really like a huge percentage has already expanded at least once if not multiple times with us. And that begs a lot of questions, well that's great you're here with us in this metro how do we get across the rest of our locations. So I think that's very valuable and also obviously from our side making sure we can handle the care and support that our customers are expecting. We're fully managed 24 by 7. So the bar is high, right? This is not the, here's a toolkit in the cloud go figure it out, this is we take care of everything we're SLAU and that's it. And obviously the customer wants to see that scale. >> Well Ellen and Laz, congratulations on all the progress you've made and always great to catch up with you on all the updates. >> Great to see you. >> Yeah, great to see you. >> Alright and thank you so much for watching and be sure to check out The Cube .net for all of our coverage including. We're at all the cloud shows. Huge show at Amazon Reinvent at the end of November be sure to tune into that and everything else. Feel free to reach out if you've got questions for our team or teams that you'd like us to cover other events we should be at. I'm Stu Miniman and thank you for watching the CUBE.

>> Live from San Francisco, it's theCUBE covering Google Cloud Next 2018, brought to you by Google Cloud and its ecosystem partners. (techy music) >> Hello everyone, welcome back to theCUBE's live coverage here. We're in San Francisco for Google Cloud's major conference, Next 2018. I'm John Furrier, here for three days. Wall to wall coverage on day one. We've got two great guests from SignalFX, Karthik Rau, founder and CEO, and Rajesh Raman, who's the chief architect. Signal's a hot startup in the area. Way ahead of its time, but now as the world gets more advanced, the solution is front and center as the value proposition if cloud moves into the mainstream, devops going to a world at large scale. Not just networking, monitoring, applications, you've got service meshes booming, great topic. Karthik, great to see you, Rajesh, thanks for joining us. >> Thank you. >> John, great to be on. >> So, first of all let's just get it out of the way, you guys have some fresh funding in May, so just quickly give an update on the company. You guys raised-- >> Yeah >> A series... >> A series D. >> Series D, give us, but how much? >> Yeah, so we raised $45 million from General Catalyst leading the round back in May, been building a ton of momentum as a company, close to a couple hundred people today. We're using a lot of that to expand internationally. We've got a team in Europe now, just opened up a team in Australia. So, things have been going great. >> Congratulations, we've had chats before, always been impressed. You guys have a great stable of awesome engineers and talent in the company doing some great work, but it begs the question, I always like to get into the what ifs. What if I could have large scale application development environments with programmable infrastructure, how does that change things? So, Karthik, what's... How as that what if changes, now that is what's happening you're starting to see the cloud at scale for the common masses of enterprises, where old ways of doing things are kind of moving away. It's like horse and buggy versus having a car for the first time-- >> Yeah. >> Jobs are changing, but the value doesn't necessarily change. You still go from point A to point B, you still got an engine, people who care about fixing cars, so people just want to drive the cloud, some people want to get under the hood, whole new architecture. >> Yeah. >> What's the what if of if I could have all these resources, what's the challenges and what do you guys solve. >> Well, I think there are a couple of challenges in this new environment. One is the number of components are just orders of magnitude more than they used to be in a cloud environment, right? We went from having physical machines that live for three years in a data center, divide it up into VMs 10 years ago, now divided up into containers for every process. Not only that, but these containers get spun up and spun down every few minutes or every few hours, and so it's just the number of components in the churn is just massive. So, that in and of itself requires a far more analytics-based approach to understand patterns rather than what's happening on an individual component. The second thing that's changed is the operating model's fundamentally different, because now you're building and running web services, and when you're running web services the people who build the software are the ones who technically are responsible for operating it. And so, you know, you have more updates, you've got more people involved, you've got lots of different components that all need to interact with one another, and so having a communication framework across all of these disparate teams become really, really, really critical. So, those are the two fundamental changes as you move from, you know, for operating these modern, massively distributed-- >> Yes. >> Applications. >> And I'll just add just some observation data that we've seeing in theCUBE is those same folks building aren't necessarily operators, so they want to be in and out fast, right? (laughs) >> They don't want to be running and operating all the time, they want to push some code. Melody Meckfessel here at Google ran a survey with developers and said, you know, "What makes you happy," and it was two things that bothered developers: technical debt and speed for deployments, commits, and the commit number was around minutes. If you can't get something done in minutes then they're onto something else, so the mind share attention of developers and technicos. So, this is a challenge at scale when you have technical debt, which we've seen companies come out of the woodwork, "Oh, yeah, "I'm going to automate something, "I'm going to throw some compute at it with the cloud "with the best monitoring package on the planet "and look how great it is," but all they did was just code some instrumentation and that's it. >> Mm-hmm. >> They weren't dealing with a lot of moving parts. Now as more things come in this is a challenge that a lot of companies face. You guys kind of solved this problem... >> Yeah, absolutely, so maybe Rajesh was a part of the team at Facebook that built the Facebook monitoring system, and that's actually what gave us a lot of the vision to start SignalFX five-and-a-half years ago, so maybe-- >> Tell about the protection, the vision-- >> Yeah. >> And what you guys are doing. >> Yeah, so CICD, you know, it kind of, like, underlies a lot of this vision of, like, moving fast. You mentioned that people wanted, like, you know, push their code in a few minutes... The thing that makes that possible is for you to have observability into what's happening while that push happens, because it's one thing to push very fast, it's another thing to recognize that you might have pushed something bad and to be able to revert it very quickly, too. And so, you'd only need, like, you know, good observability into all the things that matter that characterize the health of your system to be able to quickly recognize patterns, to be able to quickly recognize anomalies, and to be able to maybe push forward or even roll back very quickly. So, I think, like, observability is like a very key aspect of this entire CICD story. >> That's great, and that's great to know that you were over at Facebook because obviously Facebook built, at scale from the ground up, a lot of opensource. Obviously they contributed a lot to opensource, but it's interesting, as they matured and you start to see their philosophy change. It used to be move fast, break stuff. >> Yeah. >> To move fast, be reliable. >> Yeah. >> This is now the norm that's the table stakes in cloud. You have to move fast, you got to push code, but you got to maintain an operational integrity. This is, like, not like an option. This is, like, standard. >> Absolutely. >> How do you guys help solve that problem? >> So, I think there are a few different aspects to it. So, the first is to, you know, people need to ensure that they have observability into their application, so this is ensuring that you have the right kind of instrumentation in place. Thankfully this is kind of becoming commoditized right now and getting metrics from your system. The second part, and the more key part, is then being able to process this data in a real time way. You know, have high resolution, very low latency, and then to be able to do real time streaming analytics on this data. In highly elastic environments when things come and go very quickly, the identity of any individual, like, component is less important than the aggregate system behavior, and so you really need the analytics capability to kind of, like, go across this data, do various kinds of aggregations, compare it against past data, do predictive analytics, that sort of thing. So, analytics becomes the very key concept of, you know, how you operate these environments. >> It sounds so easy. >> Yeah, well one thing I'll add to that, so you know, to your point a lot of big companies sometimes are scared by this. You know, "How do we," you know... "We can't move quickly and break things," and everything that they've designed is around having process and structure to check and make sure everything is clean before they push changes out, and now we're in this world where, you know, an intern or a developer can push directly on a production, how do you manage that? The key thing in this modern world when you're trying to release software quickly, Rajesh hit on this earlier, you need the magic undo button. >> Yeah. >> That is the key to this entire process. You need to design your software, you need to design your process, and you need to design your tools so that if you introduce something bad you catch it immediately and you can roll it back. So, lots of devops practices are oriented around this, right? The idea of a canary release, I'm going to roll out an update to one percent of my systems and users, test it out, observe all the metrics, make sure everything is clean before I roll it out to everyone else, and the ability to roll back quickly is also important. But in order to do all of this you need the visibility, you need the metrics, and you need to be able to do analytics on it quickly to identify the patterns as they emerge. >> That's a great point and I'd love to just double down on that and get your thoughts because some of the Google Cloud people who are operating at this scale, I put them on this whole service-centric architecture, because they're services. We're talking about services, managing sets of services, having analytics, observation space, the reverting back and the undo button, the magic button do-over, whatever you want to call it, but the interesting thing is clean. Having a clean service whether it's an API, message queue, or an event, this stuff's happening all over the place in the new services world. How do you guys help there, is that where you guys get involved? Do you see up in that layer, how far up are you guys looking at some of the instrumentation and the insights? >> Yeah, you want to take that? >> Yeah, sure, so you know, the one thing that we really like about SignalFX and we were very keen on when we built the platform is that we are very agnostic about metrics. We're happy to accept metrics from anywhere, we'll take instrumentation-- >> (chuckles) You don't discriminate against metrics. >> We'll take instrumentation from cloud environment, we'll take, you know, metrics from opensource systems and premier applications, so you know, some of these systems are already kind of built in to get metrics from. You know, we talk to the Kafkas and Cassandras of the world, for example. We can also talk to GCP and AWS and grab metrics from their system. I think the interesting question is like when people really are taking the devops philosophy of, like, so how do you instrument your own application, what questions do you want to ask from your environment that answer the critical questions that you kind of have, and so you know, that's the one, that's the next step in the hierarchy of needs is for people to ask the right kinds of questions, and you know, instrument their applications properly. But like having done that, we can go up and down the stack in terms of, like, insight into whether all the way from your cloud environment through opensource systems, all the way up-- >> So, you guys'll take data from anyone, just stream it in-- >> Yeah. >> Normal mechanisms there, what's the value added, where's the secret sauce on SignalFX? >> So, I think value, it's all about analytics. We are all about analytics, so we are able to look at patterns of the data, we can go up and down the stack and correlate across different layers of software, look at interactions across components in your microservice, for example. You know, one really interesting thing that's happening, as you might be aware, like the whole service mesh aspect of it, which lets us, gives us insight into interactions between components-- >> Yeah. >> In a microservices architecture, so you know, we are able to get all that data and give you insight into how your whole system is working. >> So, you guys, you can see in the microservices layer? >> Absolutely. >> Yeah. >> That's powerful. >> And the key point is monitoring really has become an analytics problem, that's what we keep saying, right, because what's happening on an individual component is no longer as interesting as what's happening across the entire service, so you have to aggregate the information and look at the trend across the entire service, but the second thing that's really important is you need to be able to do it quickly, and this is where our streaming real time system really mattes. And people might ask, "Why does it "matter to do something real time." Like, "Seconds versus minutes, can a human actually "process something in seconds versus minutes?" Perhaps not, but everyone's moving towards automation, right? >> Yeah. >> So, if you want to move to a system where you have a closed loop, you have automation, and guess what, all of these modern systems, all the stuff that Google's talking here is all about automation. >> Yeah. >> And in that world seconds versus minutes, it means a tremendous amount of difference, right, where if you can find signals that will tell you there's an emerging problem within seconds and then you can revert a bad code push or you can auto-scale a cluster or you can, you know, change your load balancing algorithms all within seconds, that is what enables you to deliver, you know, 4.9s, 5.9s type of availability. >> And the consequences of not having that is outages-- >> Yeah, outages. >> Performance. >> Performance degradations, unhappy customers. I mean the cost to a brand now of having any kind of a performance issue is enormous, right? People are on Twitter before your team knows about it. (chuckles) >> Actually, you guys have a lot of the things you're solving, what is the core problem that you solve, what's the value proposition if you narrow it down that's high order bit for SignalFX? What's the corporate problem you solve? >> Well, we're solving the monitoring and observation problem for people operating cloud applications, so what happens is when you use SignalFX you have the confidence to move quickly, right? It gives you the safety net to be able to deploy changes on a daily basis, to have the shared context across a distributed team, so if you've got hundreds of two pizza box teams working together we give you that framework, the communication framework and the proactive intelligence to find issues as they emerge and proactively address them. And bottom line what that means is you can move as quickly as a Google or a Facebook or a Netflix even if you're a traditional Fortune 500 company that's regulated, and you know, you think you may not be able to do it but you really can. >> You give them the turbo charge, basically, for the analytics. All right, here's a question for you, what are the core guiding principles for the company? You guys obviously have a lot going on so you've got a core tech team, I mentioned it earlier. >> Mm-hmm. >> What are some of the guiding principles as you guys hire, build product, talk to customers, what's the key DNA of SignalFX? >> Yeah, I would say we are a very impact-driven company, so I'm, you know, very, very proud of all the people that we have on the team. We've got a lot of entrepreneurs who are focused on solving big problems, solving problems that customers may not necessarily know they need at the time, but as the market evolves we're there to solve it for them. So, we're a very customer-centric company. We have fantastic, we invest aggressively in technology, so it's not just about wrapping a pretty UI around, you know, Bolton Tech. We have real differentiated technology that solves real problems for people, and you know, I think we've in general just tried to skate to where the puck is and understand where the market's headed as a company. >> What are some of the customer feedback that you're getting? For folks that don't know SignalFX, what are some of the things that you're hearing from customers, why are you winning, what are some of the examples, can you share some color commentary? >> Yeah, I'll give one example, a Fortune 500 company that has been very aggressively investing in cloud the past, you know, four or five years, built an entire digital team, and their entire initiative is, like a lot of people in the Fortune 500 now, is to have a direct-to-consumer type of a relationship, and one of the things that they struggled with early was how do they move quickly, support product launches that might have massive load, and have the visibility to know that they can do that and catch issues as they emerge, and they didn't have a solution that could give that visibility to them until they leveraged SignalFX. And so now, if you talk to people there they'll say that they've essentially gone from defense every time they did one of these product launches to being on offense and really understanding what it takes to successfully launch a product and they're doing way more of these, so-- >> Moving the needle on time to market. >> Moving their business forward, you know, and digital transformation just by-- >> Yeah. >> Having SignalFX as a core enabler. >> It's the cloud version of putting out fires, so to speak, when you do product launches, right? >> Yeah. >> I got to ask you guys a question. You guys are both industry veterans, obviously Facebook has a storied history. We know all the great things that happen on the infrastructure side. Karthik, you've been in VM where you've seen the movie before where VM, where it made the market, changed IT for the better, still talk about the VMwares now. Now as we see cloud taking that next transformational push, describe the wave we're on right now, because it's kind of an interesting time in tech history where the talent that's coming in is pretty amazing. The young guns coming in with opensource the way it's flourishing is pretty phenomenal. Some of the smartest computer science and/or engineering talent is really solving what was old school B2B problems that really no one really wanted to solve. I mean, it was people were buying IT. Now you're talking about building operating systems, so the computer science kind of mojo in the enterprise has upped a bit. >> Mm-hmm. >> What's this wave about, how would you describe the wave of this time in history of the tech industry? >> Do you want to... (laughs) I'll add my take but why don't you go first. >> I think the thing that I find striking is just like, you know, when people used to talk about big data, you know, a few years ago, and now that is like, that's just normal. >> Yeah. >> And like, the amount of compute and the amount of storage that people are able to, you know, bring to command at-- >> Yeah. >> On any problem, it's just incredible, and that's just going to, I think, like continue to grow, right? That's going to be an amazing thing to watch. I think, you know, what this means... It also has interesting implications for, you know, companies like SignalFX who are trying to be in the monitoring space because the mojo used to be you had to have all this complicated software to do the instrumentation. Well, the instrumentations part is easy, but now all the value that's going to come about monitoring is in what you do with all that data, how you analyze it and look for, like, you know, so the whole AI ops and all that is going to be the key of the whole monitoring problem going forward, you know, five, 10 years from now, but we already see that analytics is such a key aspect of the whole thing, so... >> Yeah, I'm very, I think we're at the beginning, still at the beginning of a massive 30 to 40 year cycle, and this hasn't happened since the PC revolution in the 1970s, right, so the smartphone comes out 2007, massively opens up the market for software-based services to several billion people who are connected all the time now, drives a massive refresh of the backend infrastructure, drives the adoption of opensource, and so we're at this magical point now where the market for software-based services is just exploding, and every enterprise, you know, is becoming a software company, and you know, I think the volume of data that we're accumulating is just growing exponentially and what you can do with AI at this point, it's just... We're just beginning to see the benefit of it, so I think this is a really, really exciting time and I think we're just at the beginning. Most of the enterprises, and even the tech companies, are just beginning to capitalize on what is in store for us in the industry. >> I find it to be intoxicating, fun, and just great people coming in. To your point about the beginning of a 40 year run, also the nature of software development is being modernized at an extremely accelerated pace, so as people in the enterprise start re-imagining how they do software, because if they're a software company they've never had product managers. I mean, so the notion of what is a product, how do you launch a product, is all kind of first generation problems and opportunities, so I think to me it's really the enablement... And this is really what I think people are looking for is who can take the burden off my shoulders, help me move faster, more gas, less brake. >> Mm-hmm. >> Go faster, drive value, and then ultimately compete, because competitive advantage with technology... What does that mean to you guys, because how do you react to that because what you essentially are doing is creating instrumentation for enabling companies to create new value faster with technology and software, in some cases at a level that they've never seen before. What do you, how do you react to that? >> Well, I think that's exactly what we do, right, I mean, every company, I think most companies realized that they had to invest in software and focus on all these new opportunities at the early part of this decade. First thing they had to do was figure out who's going to build all this software, so most of them had to go hire engineers or build digital teams. They had to decide where are they going to run, the cloud wars of, you know, the early part of this decade. Do we build a private cloud, do we use a public cloud, I think both of those things have happened and people are now comfortable with those decisions. The third leg, which is squarely in the space that we're in, which is how do you operationalize this new model, and I think people are working through that now. As they get through that in the next few years, the companies like SignalFX helping every company, operationalize it very quickly, I think that's when the true promise of this new digital era will be realized where you'll start to see all of these fantastic applications, mobile apps, web service apps, direct-to-consumer streamlined supply chains. We're just beginning to see the benefit of that, and we'll see when that happens then the volume of data that they're collecting will increase exponentially and then the promise of machine learning and AI will take an altogether nother step. >> You got to know how to automate it before you can automate it, basically. What's next, final question for you guys, what's going on with SignalFX, what are you guys going to conquer, what's the next major milestones for you guys, what are you looking to do? >> Yeah, well we're continuing to focus on driving value for our customers, so we're expanding our geographic presence, so we're doing a lot of international expansion at this point. We're hiring a lot of engineers, so if anyone is interested in a development job, reach out to us. >> What kind of engineers are you looking to hire? >> Rajesh, you want to take that, sorry. (chuckles) What kind of engineers... >> What kind of engineers you looking to hire? >> Everything. (chuckles) >> I mean, all kinds of engineers, especially distributed systems engineers, front end engineers, full stack engineers, like real tech, all the good engineers we can get. >> (chuckles) Awesome. >> A lot of product development, there's a lot of interesting things happening in this space, and so we're, you know, continuing to invest very aggressively. >> Large scale distributed systems. >> Yep. >> You've got decentralized right around the corner, so you've got a lot of stuff happening. >> Yeah. >> Yeah. >> Great job to have you coming on, thanks for coming on, Karthik. >> Great, great to be on. >> Rajesh, thank you so much. >> My pleasure. >> SignalFX here in the cloud of Google here at Next, it's theCUBE, theCUBE cloud, CUBE data, we're bringing it all to you. I'm John Furrier, thanks for watching. More coverage, stay with us, we'll be back after this short break. (techy music)