okay we're back here live ending up day one of IBM's information on demand exclusive coverage for SiliconANGLE and Wikibon and constellation research breaking down the day one analysis I'm John furrier and join my co-host E on the cube Dave vellante of course as usual and for this closing wrap up segment of day one we have analyst and founder of constellation research ray Wang former analyst big data guru software heading up the partner pavilion kicking off all the flying around the world your own event this month past month things going great how are you how are you doing we're going to great man there's a lot of energy in q3 q4 we've been watching people look at trying to spend down their budgets and I think people are just like worried that there's going to be nothing in 2014 right so they're just bending down we're seeing these big orders like tonight I've got to fly out to New York to close out a deal and help someone else that's basically it was a big day to deal that's going down this is how crazy it's going on and so it's been like this pretty much like for the last four or five weeks so flows budget flush I just wash this budget lunchtime what are you seeing for the deals out there give us some of the examples of some of the sizes and magnitude is it you know you know how are you up and run to get get some cash into secure what size scopes are you seeing up yeah i mean what we're seeing I mean it's anything from a quarter million into like five million dollar deals some of our platform we sing at all levels the one that's really hot we were talking about this that the tableau conference was the date of is right dative is is still really really hot but on the back end we're saying data quality pop-up we're seeing the integration piece play a role we also saw a little bit of content management but not the traditional content management that's coming in more about the text mining text analytics to kind of drive that I mean I'm not sure what are you guys seeing alone yeah so what we're seeing a lot of energy I've seen the budget flush we're not involved in the deals like you are Dave is but for me what I'm seeing is IT the cloud is being accepted I'll you know those has not talked about publicly is kind of a public secret is amazon is just destroying the value proposition of many folks out there with cloud they're just winning the developers hand over fist and you know i'm not sure pivotal with cloud family even catch up even OpenStack has really got some consume energy around we're following that so it opens stack yet amazon on the public cloud winning everything no money's pouring into the enterprise saying hey we got to build the infrastructure under the hood so you can't have the application edge if you don't have the engine so the 100 x price advantage and that's really a scary thing but I think softlayer gives IBM a shot here yeah we were talking about self leyva so you are seeing more I'm seeing it aight aight figure deals and big data right and it's starting to get up there so softly I'd love to get your take on soft layers we've been having a debate all day Oh softlayer jaws mckenna what do you what's your take you're saying it's a hosting I've been a look at first of all yeah I love putting a huge gap 9 million dollars per lock event data center hosting now if that's a footprint they can shave that and kind of give their customers some comfort I think that's the way i see it i mean just I haven't gone inside the numbers to see where it's going to be where this energy is but like we're software virtualization is going on where everyone's going on with virtualization the data center I'll give them a cloud play I just don't see ya didn't have one before I mean happy cloud I mean whistling private club Wow is their software involved I think it provides them with an option to actually deliver cloud services with a compression ratio on storage and a speed that they need to do to deliver mobile mobile data analytics right there's things that are there that are required so it gives them an option to be playing the cloud well I just saw I mean in the news coverage and the small inspection that we did I did was I just didn't reek of software innovation it's simply a data center large hosting big on you agree they didn't really have a northern wobblin driving him before this was brilliant on your Sun setting their previous all these chairs deal kind of musical chairs me for the music stops get something it was that kind of the deal no I think they are feel more like customers asking for something and they wanted IBM to have it yeah IBM works it's an irr play for IBM they're gonna make money on this team not a tuck under deal 900 million no I know but they'll make money on it that's IBM almost always does with it I'll leave it up to you guys to rip on I was your conference oh thanks hey constellation connecting enterprise was awesome we were at the half moon bay Ritz we had 220 folks that were there senior level individuals one of the shocking things for me was the fact that when we pulled the audience on day one two things happen that I would never imagine first thing as ninety percent of the folks downloaded our mobile app which was like awesome right so the network was with them the knowledge is with them when they leave the event and all the relationships the second thing that really shocked me we knew we had really good ratios but it was seventy-five percent of the audience that was line of business execs and twenty-five percent IT it was like we were we didn't have to preach to the choir it was amazing and the IT folks that were they were very very innovative on that end so it was awesome in that way so a lot like the mix the mix here is much more line of business execs the last week at hadoop world loose you know the t-shirt crowd right a lot of practitioners you know scoop I've flume hey we got the earth animals ever right oh but no this event is actually interesting IBM iod for me is like I didn't realize this when I didn't I looked at numbers when we're doing a partner event yesterday and there are thirteen thousand attendees here that actually makes that the biggest big data and analytics conference bigger than strata bigger than a whole bunch of other ones and so I mean this is pretty much the Nexus of what about open world big data over there but this is a big opera you see world any world cloud big data yeah hey the between no but so IBM's done a fantastic job of really transitioning this conference from sort of an eclectic swix db2 informix right I'm management routine fest right yeah and now it's like what are the business things I mean what are we trying to save around the world are they telling the story effectively it's a hard story to tell you got big data analytics cloud mobile in the middle and you got social business but then you got all this use case they have success stories if customers that creating business outcomes they telling the story effectively is it not enough speeds and fees is it too what's your take the stories are there we've seen like 122 case studies from the business partner side we just haven't seen them percolate out and I think they've got to do a better job evangelizing stories but what's interesting is like there's that remember we talked about this data to decision level there's that data level that was IBM right here's the database here's the structure here's the content management here's the unstructured stuff this is where it sets then there was that information management level which that they started to do which is really about cleaning the data connecting that data connecting to upstream and downstream systems getting into CRM and payroll and then they got to this level about insights which was all the Cognos stuff right so they've been building up the stat from data decisions so they got data information information to insight and then we're getting to this decision-making level which they haven't made a lot of the assets or acquisitions there but that's the predictive analytics that's the cognitive computing you can see how they're wrapping around there I mean there's a lot of vendors to buy there's a lot of opportunity out there's a lot to connect and they've been working on it for a while but I guess I got to ask you how they doing what's your report card from last year this year better better storytelling better messaging I think the stories are getting better but we're seeing them in more deals now right before we'd see a lot more SI p traditional SI p oracle you know kind of competes and a little bit of IBM Cognos now we're seeing them in a lot of end-to-end deals and what we're talking about it's not like I T deals these are line of business folks that say look I really need to change my shopping experience what do you guys have we see other things like you know the fraud examples that any was talking about those are hilarious I mean those are real I see em in every place right I mean even with Obamacare right there's gonna be massive amounts of fraud there any places that people going to want to go in and figure out how to connect or correct those kind of things yeah so so seeing the use cases emerge yeah and in particular me last week in a dupe world it was financial services you're talking risk you talk a marketing you're talking fraud protection to forecasting yep the big three and then underneath that is predicted predictive analytics so you know that's all sort of interesting what's your take on on Amazon these days you know they are crushing it on so many different unbelievable right on more billion this year maybe it's when you build a whole company which is basically on the premise of hey let's get people to offset our cost structure from November 15th to january first I mean it's pretty amazing what you can do it's like everyone's covering for it and even more funny it's like they're doing in the physical world with distribution centers I know if we talked about this before but what's really interesting is they've got last mile delivery UPS FedEx DHL can't cat can't handle their capacity so now the ability from digital to physical goods they've got that and beezus goes out and buys the post so he can make the post for example a national paper overnight again he can do home delivery things that they couldn't do before they can take digital ads bring that back in and so basically what they're doing on the cloud side they're also doing on the physical distribution side amazing isn't it they're almost the pushing towards sunday delivery right US Postal Service go into five day deliveries sort of the different directions amazon I'm Amazon's going to be the postal service by the time they're done we're all going to subsidize it so so I gotta get you take on the the Oracle early statement Larry Ellison said were the iphone for the data center that's his metaphor a couple of couple or global enrolls ago now you got open stack and though we kind of laugh at that but but amazon is like the iPhone you know it's disruptive its new its emerging like Apple was reading out of the ashes with Steve Jobs Oracle I think trying to shoehorn in an iphone positioning but if OpenStack if everyone's open and you got amazon here there is a plausible strategy scenario that says hey these guys can continue to to put the naysayers at the side of the road as they march forward to the enterprise and be the iphone they've turned the data center into an API so so we got the date as their lock in right so this sim lock in Apple has lock in so is that lock in what's your take of that scenario you think it's video in the open ecosystem world they're all false open because a walk-in also applies but but you've been even to this for a long time right and probably one of the things that you're seeing is that it's not about open versus closed it's about ubiquity right Microsoft was a closed evil empire back ten years ago now it's like oh the standard right it's like ok they're harmless Google was like open and now they're the evil empire right it just depends on the perception and the really is ubiquity Amazon's got ubiquity on it so i did is pushing their winning the developers the winning the developers they got the ecosystem they got ubiquity they've got a cost structure I mean I don't know what else could go wrong I think they could get s la's maybe and once that had I don't know what is Amazon's blind spot I mean s la's I think well a lumpy performance no one wants lumpy right they want the big Dayton who's got ever who's got better public as public cloud SL is denied well I think about what he just said us everybody no but here's think that's a public road statement not an amazon said let's crunch big data computation December fifteenth you tell me what this is all I want to know well I think I think an easy move is I mean this day you've got to do that on premise I just I just don't I just don't think that people are forecasting amazon the enterprise properly and you just set out the Washington Post that is a left-field move we can now look back and say okay I said makes sense amazon can continue to commoditize and disrupt and be innovative then shift and having some sort of on prem playing oh then it's over right then and then gets the stir days surrounded the castle but they really don't have a great arm tremblay have no on print but they could they could get one good I think they want to see well think they want to but I think with them what they figured out was let's go build some cool public service get everyone else to subsidize our main offerings right it's basically ultimate shared service everyone's subsidizing Amazon's destruction of their business right so if you're Macy is why the heck are you on amazon right you know if you're competing with them why the heck are you on Amazon you're basically digging your own grave I'm paying them to do it it's amazing I mean that's that's the brilliance of this goes invade they brag about it yeah digging your own brave like it's a you know put the compute power is great okay great but you're subsidizing Amazon's for the you know compute power so r a great shot great to have you here congratulations on your event constellation research awesome successful venues ahead last month top folks in you're doing a great job with your company and the end the day out today in the last word tell the folks what's happening with IBM what do you expect to hear from them tomorrow I know you're going to be another thing you had to fly to but what does IBM what's a trajectory coming out of the show for IBM what's your analysis I think the executives have figured out that the important audience here is really the line of business leaders and to figure out how to do couple things one democratize decision-making the second thing figure out how they can actually make it easy to consume IBM at different entry points and I think the third thing is really how can we focus on improving data visualization graphics I think you'll see something about that ray Wang on the cube cube alumni tech athlete entrepreneur new for his new firm not new anymore it's a couple years on his belt doing a great job but three years old congratulations we'll be back day two tomorrow stay with us here exclusive coverage of IBM information I'm John prairie with Dave vellante this is the cube will see you tomorrow the queue

(upbeat music) >> Morning guys and girls, welcome back to theCUBE's live coverage of Women in Data Science WIDS 2023 live at Stanford University. Lisa Martin here with my co-host for this segment, Tracy Zhang. We're really excited to be talking with a great female rockstar. You're going to learn a lot from her next, Jacqueline Kuo, solutions engineer at Dataiku. Welcome, Jacqueline. Great to have you. >> Thank you so much. >> Thank for being here. >> I'm so excited to be here. >> So one of the things I have to start out with, 'cause my mom Kathy Dahlia is watching, she's a New Yorker. You are a born and raised New Yorker and I learned from my mom and others. If you're born in New York no matter how long you've moved away, you are a New Yorker. There's you guys have like a secret club. (group laughs) >> I am definitely very proud of being born and raised in New York. My family immigrated to New York, New Jersey from Taiwan. So very proud Taiwanese American as well. But I absolutely love New York and I can't imagine living anywhere else. >> Yeah, yeah. >> I love it. >> So you studied, I was doing some research on you you studied mechanical engineering at MIT. >> Yes. >> That's huge. And you discovered your passion for all things data-related. You worked at IBM as an analytics consultant. Talk to us a little bit about your career path. Were you always interested in engineering STEM-related subjects from the time you were a child? >> I feel like my interests were ranging in many different things and I ended up landing in engineering, 'cause I felt like I wanted to gain a toolkit like a toolset to make some sort of change with or use my career to make some sort of change in this world. And I landed on engineering and mechanical engineering specifically, because I felt like I got to, in my undergrad do a lot of hands-on projects, learn every part of the engineering and design process to build products which is super-transferable and transferable skills sort of is like the trend in my career so far. Where after undergrad I wanted to move back to New York and mechanical engineering jobs are kind of few and fall far in between in the city. And I ended up landing at IBM doing analytics consulting, because I wanted to understand how to use data. I knew that data was really powerful and I knew that working with it could allow me to tell better stories to influence people across different industries. And that's also how I kind of landed at Dataiku to my current role, because it really does allow me to work across different industries and work on different problems that are just interesting. >> Yeah, I like the way that, how you mentioned building a toolkit when doing your studies at school. Do you think a lot of skills are still very relevant to your job at Dataiku right now? >> I think that at the core of it is just problem solving and asking questions and continuing to be curious or trying to challenge what is is currently given to you. And I think in an engineering degree you get a lot of that. >> Yeah, I'm sure. >> But I think that we've actually seen that a lot in the panels today already, that you get that through all different types of work and research and that kind of thoughtfulness comes across in all different industries too. >> Talk a little bit about some of the challenges, that data science is solving, because every company these days, whether it's an enterprise in manufacturing or a small business in retail, everybody has to be data-driven, because the end user, the end customer, whoever that is whether it's a person, an individual, a company, a B2B, expects to have a personalized custom experience and that comes from data. But you have to be able to understand that data treated properly, responsibly. Talk about some of the interesting projects that you're doing at Dataiku or maybe some that you've done in the past that are really kind of transformative across things climate change or police violence, some of the things that data science really is impacting these days. >> Yeah, absolutely. I think that what I love about coming to these conferences is that you hear about those really impactful social impact projects that I think everybody who's in data science wants to be working on. And I think at Dataiku what's great is that we do have this program called Ikig.AI where we work with nonprofits and we support them in their data and analytics projects. And so, a project I worked on was with the Clean Water, oh my goodness, the Ocean Cleanup project, Ocean Cleanup organization, which was amazing, because it was sort of outside of my day-to-day and it allowed me to work with them and help them understand better where plastic is being aggregated across the world and where it appears, whether that's on beaches or in lakes and rivers. So using data to help them better understand that. I feel like from a day-to-day though, we, in terms of our customers, they're really looking at very basic problems with data. And I say basic, not to diminish it, but really just to kind of say that it's high impact, but basic problems around how do they forecast sales better? That's a really kind of, sort of basic problem, but it's actually super-complex and really impactful for people, for companies when it comes to forecasting how much headcount they need to have in the next year or how much inventory to have if they're retail. And all of those are going to, especially for smaller companies, make a huge impact on whether they make profit or not. And so, what's great about working at Dataiku is you get to work on these high-impact projects and oftentimes I think from my perspective, I work as a solutions engineer on the commercial team. So it's just, we work generally with smaller customers and sometimes talking to them, me talking to them is like their first introduction to what data science is and what they can do with that data. And sort of using our platform to show them what the possibilities are and help them build a strategy around how they can implement data in their day-to-day. >> What's the difference? You were a data scientist by title and function, now you're a solutions engineer. Talk about the ascendancy into that and also some of the things that you and Tracy will talk about as those transferable, those transportable skills that probably maybe you learned in engineering, you brought data science now you're bringing to solutions engineering. >> Yeah, absolutely. So data science, I love working with data. I love getting in the weeds of things and I love, oftentimes that means debugging things or looking line by line at your code and trying to make it better. I found that on in the data science role, while those things I really loved, sometimes it also meant that I didn't, couldn't see or didn't have visibility into the broader picture of well like, well why are we doing this project? And who is it impacting? And because oftentimes your day-to-day is very much in the weeds. And so, I moved into sales or solutions engineering at Dataiku to get that perspective, because what a sales engineer does is support the sale from a technical perspective. And so, you really truly understand well, what is the customer looking for and what is going to influence them to make a purchase? And how do you tell the story of the impact of data? Because oftentimes they need to quantify well, if I purchase a software like Dataiku then I'm able to build this project and make this X impact on the business. And that is really powerful. That's where the storytelling comes in and that I feel like a lot of what we've been hearing today about connecting data with people who can actually do something with that data. That's really the bridge that we as sales engineers are trying to connect in that sales process. >> It's all about connectivity, isn't it? >> Yeah, definitely. We were talking about this earlier that it's about making impact and it's about people who we are analyzing data is like influencing. And I saw that one of the keywords or one of the biggest thing at Dataiku is everyday AI, so I wanted to just ask, could you please talk more about how does that weave into the problem solving and then day-to-day making an impact process? >> Yes, so I started working on Dataiku around three years ago and I fell in love with the product itself. The product that we have is we allow for people with different backgrounds. If you're coming from a data analyst background, data science, data engineering, maybe you are more of like a business subject matter expert, to all work in one unified central platform, one user interface. And why that's powerful is that when you're working with data, it's not just that data scientist working on their own and their own computer coding. We've heard today that it's all about connecting the data scientists with those business people, with maybe the data engineers and IT people who are actually going to put that model into production or other folks. And so, they all use different languages. Data scientists might use Python and R, your business people are using PowerPoint and Excel, everyone's using different tools. How do we bring them all in one place so that you can have conversations faster? So the business people can understand exactly what you're building with the data and can get their hands on that data and that model prediction faster. So that's what Dataiku does. That's the product that we have. And I completely forgot your question, 'cause I got so invested in talking about this. Oh, everyday AI. Yeah, so the goal of of Dataiku is really to allow for those maybe less technical people with less traditional data science backgrounds. Maybe they're data experts and they understand the data really well and they've been working in SQL for all their career. Maybe they're just subject matter experts and want to get more into working with data. We allow those people to do that through our no and low-code tools within our platform. Platform is very visual as well. And so, I've seen a lot of people learn data science, learn machine learning by working in the tool itself. And that's sort of, that's where everyday AI comes in, 'cause we truly believe that there are a lot of, there's a lot of unutilized expertise out there that we can bring in. And if we did give them access to data, imagine what we could do in the kind of work that they can do and become empowered basically with that. >> Yeah, we're just scratching the surface. I find data science so fascinating, especially when you talk about some of the real world applications, police violence, health inequities, climate change. Here we are in California and I don't know if you know, we're experiencing an atmospheric river again tomorrow. Californians and the rain- >> Storm is coming. >> We are not good... And I'm a native Californian, but we all know about climate change. People probably don't associate all of the data that is helping us understand it, make decisions based on what's coming what's happened in the past. I just find that so fascinating. But I really think we're truly at the beginning of really understanding the impact that being data-driven can actually mean whether you are investigating climate change or police violence or health inequities or your a grocery store that needs to become data-driven, because your consumer is expecting a personalized relevant experience. I want you to offer me up things that I know I was doing online grocery shopping, yesterday, I just got back from Europe and I was so thankful that my grocer is data-driven, because they made the process so easy for me. And but we have that expectation as consumers that it's going to be that easy, it's going to be that personalized. And what a lot of folks don't understand is the data the democratization of data, the AI that's helping make that a possibility that makes our lives easier. >> Yeah, I love that point around data is everywhere and the more we have, the actually the more access we actually are providing. 'cause now compute is cheaper, data is literally everywhere, you can get access to it very easily. And so, I feel like more people are just getting themselves involved and that's, I mean this whole conference around just bringing more women into this industry and more people with different backgrounds from minority groups so that we get their thoughts, their opinions into the work is so important and it's becoming a lot easier with all of the technology and tools just being open source being easier to access, being cheaper. And that I feel really hopeful about in this field. >> That's good. Hope is good, isn't it? >> Yes, that's all we need. But yeah, I'm glad to see that we're working towards that direction. I'm excited to see what lies in the future. >> We've been talking about numbers of women, percentages of women in technical roles for years and we've seen it hover around 25%. I was looking at some, I need to AnitaB.org stats from 2022 was just looking at this yesterday and the numbers are going up. I think the number was 26, 27.6% of women in technical roles. So we're seeing a growth there especially over pre-pandemic levels. Definitely the biggest challenge that still seems to be one of the biggest that remains is attrition. I would love to get your advice on what would you tell your younger self or the previous prior generation in terms of having the confidence and the courage to pursue engineering, pursue data science, pursue a technical role, and also stay in that role so you can be one of those females on stage that we saw today? >> Yeah, that's the goal right there one day. I think it's really about finding other people to lift and mentor and support you. And I talked to a bunch of people today who just found this conference through Googling it, and the fact that organizations like this exist really do help, because those are the people who are going to understand the struggles you're going through as a woman in this industry, which can get tough, but it gets easier when you have a community to share that with and to support you. And I do want to definitely give a plug to the WIDS@Dataiku team. >> Talk to us about that. >> Yeah, I was so fortunate to be a WIDS ambassador last year and again this year with Dataiku and I was here last year as well with Dataiku, but we have grown the WIDS effort so much over the last few years. So the first year we had two events in New York and also in London. Our Dataiku's global. So this year we additionally have one in the west coast out here in SF and another one in Singapore which is incredible to involve that team. But what I love is that everyone is really passionate about just getting more women involved in this industry. But then also what I find fortunate too at Dataiku is that we have a strong female, just a lot of women. >> Good. >> Yeah. >> A lot of women working as data scientists, solutions engineer and sales and all across the company who even if they aren't doing data work in a day-to-day, they are super-involved and excited to get more women in the technical field. And so. that's like our Empower group internally that hosts events and I feel like it's a really nice safe space for all of us to speak about challenges that we encounter and feel like we're not alone in that we have a support system to make it better. So I think from a nutrition standpoint every organization should have a female ERG to just support one another. >> Absolutely. There's so much value in a network in the community. I was talking to somebody who I'm blanking on this may have been in Barcelona last week, talking about a stat that showed that a really high percentage, 78% of people couldn't identify a female role model in technology. Of course, Sheryl Sandberg's been one of our role models and I thought a lot of people know Sheryl who's leaving or has left. And then a whole, YouTube influencers that have no idea that the CEO of YouTube for years has been a woman, who has- >> And she came last year to speak at WIDS. >> Did she? >> Yeah. >> Oh, I missed that. It must have been, we were probably filming. But we need more, we need to be, and it sounds like Dataiku was doing a great job of this. Tracy, we've talked about this earlier today. We need to see what we can be. And it sounds like Dataiku was pioneering that with that ERG program that you talked about. And I completely agree with you. That should be a standard program everywhere and women should feel empowered to raise their hand ask a question, or really embrace, "I'm interested in engineering, I'm interested in data science." Then maybe there's not a lot of women in classes. That's okay. Be the pioneer, be that next Sheryl Sandberg or the CTO of ChatGPT, Mira Murati, who's a female. We need more people that we can see and lean into that and embrace it. I think you're going to be one of them. >> I think so too. Just so that young girls like me like other who's so in school, can see, can look up to you and be like, "She's my role model and I want to be like her. And I know that there's someone to listen to me and to support me if I have any questions in this field." So yeah. >> Yeah, I mean that's how I feel about literally everyone that I'm surrounded by here. I find that you find role models and people to look up to in every conversation whenever I'm speaking with another woman in tech, because there's a journey that has had happen for you to get to that place. So it's incredible, this community. >> It is incredible. WIDS is a movement we're so proud of at theCUBE to have been a part of it since the very beginning, since 2015, I've been covering it since 2017. It's always one of my favorite events. It's so inspiring and it just goes to show the power that data can have, the influence, but also just that we're at the beginning of uncovering so much. Jacqueline's been such a pleasure having you on theCUBE. Thank you. >> Thank you. >> For sharing your story, sharing with us what Dataiku was doing and keep going. More power to you girl. We're going to see you up on that stage one of these years. >> Thank you so much. Thank you guys. >> Our pleasure. >> Our pleasure. >> For our guests and Tracy Zhang, this is Lisa Martin, you're watching theCUBE live at WIDS '23. #EmbraceEquity is this year's International Women's Day theme. Stick around, our next guest joins us in just a minute. (upbeat music)

>>From the Cube Studios in Palo Alto in Boston, bringing you data driven insights from the cube and etr. This is breaking analysis with Dave Ante. >>Have you ever been driving on the highway and traffic suddenly slows way down and then after a little while it picks up again and you're cruising along and you're thinking, Okay, hey, that was weird. But it's clear sailing now. Off we go, only to find out in a bit that the traffic is building up ahead again, forcing you to pump the brakes as the traffic pattern ebbs and flows well. Welcome to the Seesaw economy. The fed induced fire that prompted an unprecedented rally in tech is being purposefully extinguished now by that same fed. And virtually every sector of the tech industry is having to reset its expectations, including the cloud segment. Hello and welcome to this week's Wikibon Cube Insights powered by etr. In this breaking analysis will review the implications of the earnings announcements from the big three cloud players, Amazon, Microsoft, and Google who announced this week. >>And we'll update you on our quarterly IAS forecast and share the latest from ETR with a focus on cloud computing. Now, before we get into the new data, we wanna review something we shared with you on October 14th, just a couple weeks back, this is sort of a, we told you it was coming slide. It's an XY graph that shows ET R'S proprietary net score methodology on the vertical axis. That's a measure of spending momentum, spending velocity, and an overlap or presence in the dataset that's on the X axis. That's really a measure of pervasiveness. In the survey, the table, you see that table insert there that shows Wiki Bond's Q2 estimates of IAS revenue for the big four hyperscalers with their year on year growth rates. Now we told you at the time, this is data from the July TW 22 ETR survey and the ETR hadn't released its October survey results at that time. >>This was just a couple weeks ago. And while we couldn't share the specific data from the October survey, we were able to get a glimpse and we depicted the slowdown that we saw in the October data with those dotted arrows kind of down into the right, we said at the time that we were seeing and across the board slowdown even for the big three cloud vendors. Now, fast forward to this past week and we saw earnings releases from Alphabet, Microsoft, and just last night Amazon. Now you may be thinking, okay, big deal. The ETR survey data didn't really tell us anything we didn't already know. But judging from the negative reaction in the stock market to these earnings announcements, the degree of softness surprised a lot of investors. Now, at the time we didn't update our forecast, it doesn't make sense for us to do that when we're that close to earning season. >>And now that all the big three ha with all the big four with the exception of Alibaba have announced we've, we've updated. And so here's that data. This chart lays out our view of the IS and PAs worldwide revenue. Basically it's cloud infrastructure with an attempt to exclude any SaaS revenue so we can make an apples to apples comparison across all the clouds. Now the reason that actual is in quotes is because Microsoft and Google don't report IAS revenue, but they do give us clues and kind of directional commentary, which we then triangulate with other data that we have from the channel and ETR surveys and just our own intelligence. Now the second column there after the vendor name shows our previous estimates for q3, and then next to that we show our actuals. Same with the growth rates. And then we round out the chart with that lighter blue color highlights, the full year estimates for revenue and growth. >>So the key takeaways are that we shaved about $4 billion in revenue and roughly 300 basis points of growth off of our full year estimates. AWS had a strong July but exited Q3 in the mid 20% growth rate year over year. So we're using that guidance, you know, for our Q4 estimates. Azure came in below our earlier estimates, but Google actually exceeded our expectations. Now the compression in the numbers is in our view of function of the macro demand climate, we've made every attempt to adjust for constant currency. So FX should not be a factor in this data, but it's sure you know that that ma the the, the currency effects are weighing on those companies income statements. And so look, this is the fundamental dynamic of a cloud model where you can dial down consumption when you need to and dial it up when you need to. >>Now you may be thinking that many big cloud customers have a committed level of spending in order to get better discounts. And that's true. But what's happening we think is they'll reallocate that spend toward, let's say for example, lower cost storage tiers or they may take advantage of better price performance processors like Graviton for example. That is a clear trend that we're seeing and smaller companies that were perhaps paying by the drink just on demand, they're moving to reserve instance models to lower their monthly bill. So instead of taking the easy way out and just spending more companies are reallocating their reserve capacity toward lower cost. So those sort of lower cost services, so they're spending time and effort optimizing to get more for, for less whereas, or get more for the same is really how we should, should, should phrase it. Whereas during the pandemic, many companies were, you know, they perhaps were not as focused on doing that because business was booming and they had a response. >>So they just, you know, spend more dial it up. So in general, as they say, customers are are doing more with, with the same. Now let's look at the growth dynamic and spend some time on that. I think this is important. This data shows worldwide quarterly revenue growth rates back to Q1 2019 for the big four. So a couple of interesting things. The data tells us during the pandemic, you saw both AWS and Azure, but the law of large numbers and actually accelerate growth. AWS especially saw progressively increasing growth rates throughout 2021 for each quarter. Now that trend, as you can see is reversed in 2022 for aws. Now we saw Azure come down a bit, but it's still in the low forties in terms of percentage growth. While Google actually saw an uptick in growth this last quarter for GCP by our estimates as GCP is becoming an increasingly large portion of Google's overall cloud business. >>Now, unfortunately Google Cloud continues to lose north of 850 million per quarter, whereas AWS and Azure are profitable cloud businesses even though Alibaba is suffering its woes from China. And we'll see how they come in when they report in mid-November. The overall hyperscale market grew at 32% in Q3 in terms of worldwide revenue. So the slowdown isn't due to the repatriation or competition from on-prem vendors in our view, it's a macro related trend. And cloud will continue to significantly outperform other sectors despite its massive size. You know, on the repatriation point, it just still doesn't show up in the data. The A 16 Z article from Sarah Wong and Martin Martin Kasa claiming that repatriation was inevitable as a means to lower cost of good sold for SaaS companies. You know, while that was thought provoking, it hasn't shown up in the numbers. And if you read the financial statements of both AWS and its partners like Snowflake and you dig into the, to the, to the quarterly reports, you'll see little notes and comments with their ongoing negotiations to lower cloud costs for customers. >>AWS and no doubt execs at Azure and GCP understand that the lifetime value of a customer is worth much more than near term gross margin. And you can expect the cloud vendors to strike a balance between profitability, near term profitability anyway and customer attention. Now, even though Google Cloud platform saw accelerated growth, we need to put that in context for you. So GCP, by our estimate, has now crossed over the $3 billion for quarter market actually did so last quarter, but its growth rate accelerated to 42% this quarter. And so that's a good sign in our view. But let's do a quick little comparison with when AWS and Azure crossed the $3 billion mark and compare their growth rates at the time. So if you go back to to Q2 2016, as we're showing in this chart, that's around the time that AWS hit 3 billion per quarter and at the same time was growing at 58%. >>Azure by our estimates crossed that mark in Q4 2018 and at that time was growing at 67%. Again, compare that to Google's 42%. So one would expect Google's growth rate would be higher than its competitors at this point in the MO in the maturity of its cloud, which it's, you know, it's really not when you compared to to Azure. I mean they're kind of con, you know, comparable now but today, but, but you'll go back, you know, to that $3 billion mark. But more so looking at history, you'd like to see its growth rate at this point of a maturity model at least over 50%, which we don't believe it is. And one other point on this topic, you know, my business friend Matt Baker from Dell often says it's not a zero sum game, meaning there's plenty of opportunity exists to build value on top of hyperscalers. >>And I would totally agree it's not a dollar for dollar swap if you can continue to innovate. But history will show that the first company in makes the most money. Number two can do really well and number three tends to break even. Now maybe cloud is different because you have Microsoft software estate and the power behind that and that's driving its IAS business and Google ads are funding technology buildouts for, for for Google and gcp. So you know, we'll see how that plays out. But right now by this one measurement, Google is four years behind Microsoft in six years behind aws. Now to the point that cloud will continue to outpace other markets, let's, let's break this down a bit in spending terms and see why this claim holds water. This is data from ET r's latest October survey that shows the granularity of its net score or spending velocity metric. >>The lime green is new adoptions, so they're adding the platform, the forest green is spending more 6% or more. The gray bars spending is flat plus or minus, you know, 5%. The pinkish colors represent spending less down 6% or worse. And the bright red shows defections or churn of the platform. You subtract the reds from the greens and you get what's called net score, which is that blue dot that you can see on each of the bars. So what you see in the table insert is that all three have net scores above 40%, which is a highly elevated measure. Microsoft's net scores above 60% AWS well into the fifties and GCP in the mid forties. So all good. Now what's happening with all three is more customers are keep keeping their spending flat. So a higher percentage of customers are saying, our spending is now flat than it was in previous quarters and that's what's accounting for the compression. >>But the churn of all three, even gcp, which we reported, you know, last quarter from last quarter survey was was five x. The other two is actually very low in the single digits. So that might have been an anomaly. So that's a very good sign in our view. You know, again, customers aren't repatriating in droves, it's just not a trend that we would bet on, maybe makes for a FUD or you know, good marketing head, but it's just not a big deal. And you can't help but be impressed with both Microsoft and AWS's performance in the survey. And as we mentioned before, these companies aren't going to give up customers to try and preserve a little bit of gross margin. They'll do what it takes to keep people on their platforms cuz they'll make up for it over time with added services and improved offerings. >>Now, once these companies acquire a customer, they'll be very aggressive about keeping them. So customers take note, you have negotiating leverage, so use it. Okay, let's look at another cut at the cloud market from the ETR data set. Here's the two dimensional view, again, it's back, it's one of our favorites. Net score or spending momentum plotted against presence. And the data set, that's the x axis net score on the, on the vertical axis, this is a view of et r's cloud computing sector sector. You can see we put that magic 40% dotted red line in the table showing and, and then that the table inserts shows how the data are plotted with net score against presence. I e n in the survey, notably only the big three are above the 40% line of the names that we're showing here. The oth there, there are others. >>I mean if you put Snowflake on there, it'd be higher than any of these names, but we'll dig into that name in a later breaking analysis episode. Now this is just another way of quantifying the dominance of AWS and Azure, not only relative to Google, but the other cloud platforms out there. So we've, we've taken the opportunity here to plot IBM and Oracle, which both own a public cloud. Their performance is largely a reflection of them migrating their install bases to their respective public clouds and or hybrid clouds. And you know, that's fine, they're in the game. That's a point that we've made, you know, a number of times they're able to make it through the cloud, not whole and they at least have one, but they simply don't have the business momentum of AWS and Azure, which is actually quite impressive because AWS and Azure are now as large or larger than IBM and Oracle. >>And to show this type of continued growth that that that Azure and AWS show at their size is quite remarkable and customers are starting to recognize the viability of on-prem hi, you know, hybrid clouds like HPE GreenLake and Dell's apex. You know, you may say, well that's not cloud, but if the customer thinks it is and it was reporting in the survey that it is, we're gonna continue to report this view. You know, I don't know what's happening with H P E, They had a big down tick this quarter and I, and I don't read too much into that because their end is still pretty small at 53. So big fluctuations are not uncommon with those types of smaller ends, but it's over 50. So, you know, we did notice a a a negative within a giant public and private sector, which is often a, a bellwether giant public private is big public companies and large private companies like, like a Mars for example. >>So it, you know, it looks like for HPE it could be an outlier. We saw within the Fortune 1000 HPE E'S cloud looked actually really good and it had good spending momentum in that sector. When you di dig into the industry data within ETR dataset, obviously we're not showing that here, but we'll continue to monitor that. Okay, so where's this Leave us. Well look, this is really a tactical story of currency and macro headwinds as you can see. You know, we've laid out some of the points on this slide. The action in the stock market today, which is Friday after some of the soft earnings reports is really robust. You know, we'll see how it ends up in the day. So maybe this is a sign that the worst is over, but we don't think so. The visibility from tech companies is murky right now as most are guiding down, which indicates that their conservative outlook last quarter was still too optimistic. >>But as it relates to cloud, that platform is not going anywhere anytime soon. Sure, there are potential disruptors on the horizon, especially at the edge, but we're still a long ways off from, from the possibility that a new economic model emerges from the edge to disrupt the cloud and the opportunities in the cloud remain strong. I mean, what other path is there? Really private cloud. It was kind of a bandaid until the on-prem guys could get their a as a service models rolled out, which is just now happening. The hybrid thing is real, but it's, you know, defensive for the incumbents until they can get their super cloud investments going. Super cloud implying, capturing value above the hyperscaler CapEx, you know, call it what you want multi what multi-cloud should have been, the metacloud, the Uber cloud, whatever you like. But there are opportunities to play offense and that's clearly happening in the cloud ecosystem with the likes of Snowflake, Mongo, Hashi Corp. >>Hammer Spaces is a startup in this area. Aviatrix, CrowdStrike, Zeke Scaler, Okta, many, many more. And even the projects we see coming out of enterprise players like Dell, like with Project Alpine and what Pure Storage is doing along with a number of other of the backup vendors. So Q4 should be really interesting, but the real story is the investments that that companies are making now to leverage the cloud for digital transformations will be paying off down the road. This is not 1999. We had, you know, May might have had some good ideas and admittedly at a lot of bad ones too, but you didn't have the infrastructure to service customers at a low enough cost like you do today. The cloud is that infrastructure and so far it's been transformative, but it's likely the best is yet to come. Okay, let's call this a rap. >>Many thanks to Alex Morrison who does production and manages the podcast. Also Can Schiffman is our newest edition to the Boston Studio. Kristin Martin and Cheryl Knight helped get the word out on social media and in our newsletters. And Rob Ho is our editor in chief over@siliconangle.com, who does some wonderful editing for us. Thank you. Remember, all these episodes are available as podcasts. Wherever you listen, just search breaking analysis podcast. I publish each week on wiki bond.com at silicon angle.com. And you can email me at David dot valante@siliconangle.com or DM me at Dante or comment on my LinkedIn posts. And please do checkout etr.ai. They got the best survey data in the enterprise tech business. This is Dave Valante for the Cube Insights powered by etr. Thanks for watching and we'll see you next time on breaking analysis.

>>Everyone, welcome to the cube here in Palo Alto, California for a special presentation on Cloud native at scale, enabling super cloud modern applications with Platform nine. I'm John Furry, your host of The Cube. We've got a great lineup of three interviews we're streaming today. Mattor Makki, who's the co-founder and VP of Product of Platform nine. She's gonna go into detail around Arlon, the open source products, and also the value of what this means for infrastructure as code and for cloud native at scale. Bickley the chief architect of Platform nine Cube alumni. Going back to the OpenStack days. He's gonna go into why Arlon, why this infrastructure as code implication, what it means for customers and the implications in the open source community and where that value is. Really great wide ranging conversation there. And of course, Vascar, Gort, the CEO of Platform nine, is gonna talk with me about his views on Super Cloud and why Platform nine has a scalable solutions to bring cloud native at scale. So enjoy the program, see you soon. Hello and welcome to the cube here in Palo Alto, California for a special program on cloud native at scale, enabling next generation cloud or super cloud for modern application cloud native developers. I'm John Forry, host of the Cube. Pleasure to have here me Makowski, co-founder and VP of product at Platform nine. Thanks for coming in today for this Cloudnative at scale conversation. >>Thank you for having >>Me. So Cloudnative at scale, something that we're talking about because we're seeing the, the next level of mainstream success of containers Kubernetes and cloud native develop, basically DevOps in the C I C D pipeline. It's changing the landscape of infrastructure as code, it's accelerating the value proposition and the super cloud as we call it, has been getting a lot of traction because this next generation cloud is looking a lot different, but kind of the same as the first generation. What's your view on Super cloud as it fits to cloud native as scales up? >>Yeah, you know, I think what's interesting, and I think the reason why Super Cloud is a really good and a really fit term for this, and I think, I know my CEO was chatting with you as well, and he was mentioning this as well, but I think there needs to be a different term than just multi-cloud or cloud. And the reason is because as cloud native and cloud deployments have scaled, I think we've reached a point now where instead of having the traditional data center style model, where you have a few large distributors of infrastructure and workload at a few locations, I think the model is kind of flipped around, right? Where you have a large number of micro sites. These micro sites could be your public cloud deployment, your private on-prem infrastructure deployments, or it could be your edge environment, right? And every single enterprise, every single industry is moving in that direction. And so you gotta rougher that with a terminology that, that, that indicates the scale and complexity of it. And so I think super cloud is a, is an appropriate term for >>That. So you brought a couple things I want to dig into. You mentioned Edge Notes. We're seeing not only edge nodes being the next kind of area of innovation, mainly because it's just popping up everywhere. And that's just the beginning. Wouldn't even know what's around the corner. You got buildings, you got iot, o ot, and it kind of coming together, but you also got this idea of regions, global infrastructures, big part of it. I just saw some news around cloud flare shutting down a site here, there's policies being made at scale. These new challenges there. Can you share because you can have edge. So hybrid cloud is a winning formula. Everybody knows that it's a steady state. Yeah. But across multiple clouds brings in this new un engineered area, yet it hasn't been done yet. Spanning clouds. People say they're doing it, but you start to see the toe in the water, it's happening, it's gonna happen. It's only gonna get accelerated with the edge and beyond globally. So I have to ask you, what is the technical challenges in doing this? Because it's something business consequences as well, but there are technical challenge. Can you share your view on what the technical challenges are for the super cloud across multiple edges and >>Regions? Yeah, absolutely. So I think, you know, in in the context of this, the, this, this term of super cloud, I think it's sometimes easier to visualize things in terms of two access, right? I think on one end you can think of the scale in terms of just pure number of nodes that you have, deploy number of clusters in the Kubernetes space. And then on the other access you would have your distribution factor, right? Which is, do you have these tens of thousands of nodes in one site or do you have them distributed across tens of thousands of sites with one node at each site? Right? And if you have just one flavor of this, there is enough complexity, but potentially manageable. But when you are expanding on both these access, you really get to a point where that skill really needs some well thought out, well-structured solutions to address it, right? A combination of homegrown tooling along with your, you know, favorite distribution of Kubernetes is not a strategy that can help you in this environment. It may help you when you have one of this or when you, when you scale, is not at the level. >>Can you scope the complexity? Because I mean, I hear a lot of moving parts going on there, the technology's also getting better. We we're seeing cloud native become successful. There's a lot to configure, there's a lot to install. Can you scope the scale of the problem? Because we're talking about at scale Yep. Challenges here. >>Yeah, absolutely. And I think, you know, I I like to call it, you know, the, the, the problem that the scale creates, you know, there's various problems, but I think one, one problem, one way to think about it is, is, you know, it works on my cluster problem, right? So, you know, I come from engineering background and there's a, you know, there's a famous saying between engineers and QA and the support folks, right? Which is, it works on my laptop, which is I tested this change, everything was fantastic, it worked flawlessly on my machine, on production, It's not working. The exact same problem now happens and these distributed environments, but at massive scale, right? Which is that, you know, developers test their applications, et cetera within the sanctity of their sandbox environments. But once you expose that change in the wild world of your production deployment, right? >>And the production deployment could be going at the radio cell tower at the edge location where a cluster is running there, or it could be sending, you know, these applications and having them run at my customer's site where they might not have configured that cluster exactly the same way as I configured it, or they configured the cluster, right? But maybe they didn't deploy the security policies or they didn't deploy the other infrastructure plugins that my app relies on all of these various factors at their own layer of complexity. And there really isn't a simple way to solve that today. And that is just, you know, one example of an issue that happens. I think another, you know, whole new ball game of issues come in the context of security, right? Because when you are deploying applications at scale in a distributed manner, you gotta make sure someone's job is on the line to ensure that the right security policies are enforced regardless of that scale factor. So I think that's another example of problems that occur. >>Okay. So I have to ask about scale because there are a lot of multiple steps involved when you see the success cloud native, you know, you see some, you know, some experimentation. They set up a cluster, say it's containers and Kubernetes, and then you say, Okay, we got this, we can configure it. And then they do it again and again, they call it day two. Some people call it day one, day two operation, whatever you call it. Once you get past the first initial thing, then you gotta scale it. Then you're seeing security breaches, you're seeing configuration errors. This seems to be where the hotpot is. And when companies transition from, I got this to, Oh no, it's harder than I thought at scale. Can you share your reaction to that and how you see this playing out? >>Yeah, so, you know, I think it's interesting. There's multiple problems that occur when, you know, the, the two factors of scale is we talked about start expanding. I think one of them is what I like to call the, you know, it, it works fine on my cluster problem, which is back in, when I was a developer, we used to call this, it works on my laptop problem, which is, you know, you have your perfectly written code that is operating just fine on your machine, your sandbox environment. But the moment it runs production, it comes back with p zeros and POS from support teams, et cetera. And those issues can be really difficult to try us, right? And so in the Kubernetes environment, this problem kind of multi folds, it goes, you know, escalates to a higher degree because yeah, you have your sandbox developer environments, they have their clusters and things work perfectly fine in those clusters because these clusters are typically handcrafted or a combination of some scripting and handcrafting. >>And so as you give that change to then run at your production edge location, like say you radio sell tower site, or you hand it over to a customer to run it on their cluster, they might not have not have configured that cluster exactly how you did it, or they might not have configured some of the infrastructure plugins. And so the things don't work. And when things don't work, triaging them becomes like ishly hard, right? It's just one of the examples of the problem. Another whole bucket of issues is security, which is, is you have these distributed clusters at scale, you gotta ensure someone's job is on the line to make sure that these security policies are configured properly. >>So this is a huge problem. I love that comment. That's not not happening on my system. It's the classic, you know, debugging mentality. Yeah. But at scale it's hard to do that with error prone. I can see that being a problem. And you guys have a solution you're launching, Can you share what our lawn is, this new product, What is it all about? Talk about this new introduction. >>Yeah, absolutely. I'm very, very excited. You know, it's one of the projects that we've been working on for some time now because we are very passionate about this problem and just solving problems at scale in on-prem or at in the cloud or at edge environments. And what arwan is, it's an open source project and it is a tool, it's a Kubernetes native tool for complete end to end management of not just your clusters, but your clusters. All of the infrastructure that goes within and along the sites of those clusters, security policies, your middleware plugins, and finally your applications. So what alarm lets you do in a nutshell is in a declarative way, it lets you handle the configuration and management of all of these components in at scale. >>So what's the elevator pitch simply put for what this solves in, in terms of the chaos you guys are reigning in. What's the, what's the bumper sticker? Yeah, >>What would it do? There's a perfect analogy that I love to reference in this context, which is think of your assembly line, you know, in a traditional, let's say, you know, an auto manufacturing factory or et cetera, and the level of efficiency at scale that that assembly line brings, right online. And if you look at the logo we've designed, it's this funny little robot. And it's because when we think of online, we, we think of these enterprise large scale environments, you know, sprawling at scale creating chaos because there isn't necessarily a well thought through, well structured solution that's similar to an assembly line, which is taking each components, you know, addressing them, manufacturing, processing them in a standardized way, then handing to the next stage. But again, it gets, you know, processed in a standardized way. And that's what Arlon really does. That's like the I pitch. If you have problems of scale of managing your infrastructure, you know, that is distributed. Arlon brings the assembly line level of efficiency and consistency >>For those. So keeping it smooth, the assembly on things are flowing. C C I CD pipelining. Exactly. So that's what you're trying to simplify that ops piece for the developer. I mean, it's not really ops, it's their ops, it's coding. >>Yeah. Not just developer, the ops, the operations folks as well, right? Because developers, you know, there is, the developers are responsible for one picture of that layer, which is my apps, and then maybe that middleware of application that they interface with, but then they hand it over to someone else who's then responsible to ensure that these apps are secure properly, that they are logging, logs are being collected properly, monitoring and observability integrated. And so it solves problems for both those >>Teams. Yeah. It's DevOps. So the DevOps is the cloud native developer. The OP teams have to kind of set policies. Is that where the declarative piece comes in? Is that why that's important? >>Absolutely. Yeah. And, and, and, and you know, Kubernetes really in introduced or elevated this declarative management, right? Because, you know, c communities clusters are Yeah. Or your, yeah, you know, specifications of components that go in Kubernetes are defined in a declarative way. And Kubernetes always keeps that state consistent with your defined state. But when you go outside of that world of a single cluster, and when you actually talk about defining the clusters or defining everything that's around it, there really isn't a solution that does that today. And so online addresses that problem at the heart of it, and it does that using existing open source well known solutions. >>Ed, do I wanna get into the benefits? What's in it for me as the customer developer? But I want to finish this out real quick and get your thoughts. You mentioned open source. Why open source? What's the, what's the current state of the product? You run the product group over at platform nine, is it open source? And you guys have a product that's commercial? Can you explain the open source dynamic? And first of all, why open source? Yeah. And what is the consumption? I mean, open source is great, People want open source, they can download it, look up the code, but maybe wanna buy the commercial. So I'm assuming you have that thought through, can you share open source and commercial relationship? >>Yeah, I think, you know, starting with why open source? I think it's, you know, we as a company, we have, you know, one of the things that's absolutely critical to us is that we take mainstream open source technologies components and then we, you know, make them available to our customers at scale through either a SaaS model on from model, right? But, so as we are a company or startup or a company that benefits, you know, in a massive way by this open source economy, it's only right, I think in my mind that we do our part of the duty, right? And contribute back to the community that feeds us. And so, you know, we have always held that strongly as one of our principles. And we have, you know, created and built independent products starting all the way with fi, which was a serverless product, you know, that we had built to various other, you know, examples that I can give. But that's one of the main reasons why opensource and also opensource because we want the community to really firsthand engage with us on this problem, which is very difficult to achieve if your product is behind a wall, you know, behind, behind a block box. >>Well, and that's, that's what the developers want too. I mean, what we're seeing in reporting with Super Cloud is the new model of consumption is I wanna look at the code and see what's in there. That's right. And then also, if I want to use it, I, I'll do it. Great. That's open source, that's the value. But then at the end of the day, if I wanna move fast, that's when people buy in. So it's a new kind of freemium, I guess, business model. I guess that's the way that, Well, but that's, that's the benefit. Open source. This is why standards and open source is growing so fast. You have that confluence of, you know, a way for helpers to try before they buy, but also actually kind of date the application, if you will. We, you know, Adrian Karo uses the dating me metaphor, you know, Hey, you know, I wanna check it out first before I get married. Right? And that's what open source, So this is the new, this is how people are selling. This is not just open source, this is how companies are selling. >>Absolutely. Yeah. Yeah. You know, I think, and you know, two things. I think one is just, you know, this, this, this cloud native space is so vast that if you, if you're building a close flow solution, sometimes there's also a risk that it may not apply to every single enterprises use cases. And so having it open source gives them an opportunity to extend it, expand it, to make it proper to their use case if they choose to do so, right? But at the same time, what's also critical to us is we are able to provide a supported version of it with an SLA that we, you know, that's backed by us, a SAS hosted version of it as well, for those customers who choose to go that route, you know, once they have used the open source version and loved it and want to take it at scale and in production and need, need, need a partner to collaborate with, who can, you know, support them for that production >>Environment. I have to ask you now, let's get into what's in it for the customer. I'm a customer, why should I be enthused about Arlo? What's in it for me? You know? Cause if I'm not enthused about it, I'm not gonna be confident and it's gonna be hard for me to get behind this. Can you share your enthusiastic view of, you know, why I should be enthused about Arlo customer? >>Yeah, absolutely. And so, and there's multiple, you know, enterprises that we talk to, many of them, you know, our customers, where this is a very kind of typical story that you hear, which is we have, you know, a Kubernetes distribution. It could be on premise, it could be public clouds, native es, and then we have our C I CD pipelines that are automating the deployment of applications, et cetera. And then there's this gray zone. And the gray zone is well before you can you, your CS CD pipelines can deploy the apps. Somebody needs to do all of their groundwork of, you know, defining those clusters and yeah. You know, properly configuring them. And as these things, these things start by being done hand grown. And then as the, as you scale, what typically enterprises would do today is they will have their home homegrown DIY solutions for this. >>I mean, the number of folks that I talk to that have built Terra from automation, and then, you know, some of those key developers leave. So it's a typical open source or typical, you know, DIY challenge. And the reason that they're writing it themselves is not because they want to. I mean, of course technology is always interesting to everybody, but it's because they can't find a solution that's out there that perfectly fits the problem. And so that's that pitch. I think Spico would be delighted. The folks that we've talked, you know, spoken with, have been absolutely excited and have, you know, shared that this is a major challenge we have today because we have, you know, few hundreds of clusters on s Amazon and we wanna scale them to few thousands, but we don't think we are ready to do that. And this will give us >>Stability. Yeah, I think people are scared, not sc I won't say scare, that's a bad word. Maybe I should say that they feel nervous because, you know, at scale small mistakes can become large mistakes. This is something that is concerning to enterprises. And, and I think this is gonna come up at co con this year where enterprises are gonna say, Okay, I need to see SLAs. I wanna see track record, I wanna see other companies that have used it. Yeah. How would you answer that question to, or, or challenge, you know, Hey, I love this, but is there any guarantees? Is there any, what's the SLAs? I'm an enterprise, I got tight, you know, I love the open source trying to free fast and loose, but I need hardened code. >>Yeah, absolutely. So, so two parts to that, right? One is Arlan leverages existing open source components, products that are extremely popular. Two specifically. One is Lon uses Argo cd, which is probably one of the highest rated and used CD open source tools that's out there, right? It's created by folks that are as part of Intuit team now, you know, really brilliant team. And it's used at scale across enterprises. That's one. Second is arlon also makes use of cluster api capi, which is a ES sub-component, right? For lifecycle management of clusters. So there is enough of, you know, community users, et cetera, around these two products, right? Or, or, or open source projects that will find Arlan to be right up in their alley because they're already comfortable, familiar with algo cd. Now Arlan just extends the scope of what Algo CD can do. And so that's one. And then the second part is going back to a point of the comfort. And that's where, you know, Platform nine has a role to play, which is when you are ready to deploy Alon at scale, because you've been, you know, playing with it in your DEF test environments, you're happy with what you get with it, then Platform nine will stand behind it and provide that sla. >>And what's been the reaction from customers you've talked to Platform nine customers with, with, that are familiar with, with Argo and then Arlo? What's been some of the feedback? >>Yeah, I, I, I think the feedback's been fantastic. I mean, I can give you examples of customers where, you know, initially, you know, when you are, when you're telling them about your entire portfolio of solutions, it might not strike a card right away. But then we start talking about Arlan and, and we talk about the fact that it uses Argo CD and they start opening up, they say, We have standardized on Argo and we have built these components, homegrown, we would be very interested. Can we co-develop? Does it support these use cases? So we've had that kind of validation. We've had validation all the way at the beginning of our line before we even wrote a single line of code saying this is something we plan on doing. And the customer said, If you had it today, I would've purchased it. So it's been really great validation. >>All right. So next question is, what is the solution to the customer? If I asked you, Look it, I have, I'm so busy, my team's overworked. I got a skills gap. I don't need another project that's, I'm so tied up right now and I'm just chasing my tail. How does Platform nine help me? >>Yeah, absolutely. So I think, you know, one of the core tenets of Platform nine has always been that we try to bring that public cloud like simplicity by hosting, you know, this in a lot of such similar tools in a SaaS hosted manner for our customers, right? So our goal behind doing that is taking away or trying to take away all of that complexity from customer's hands and offloading it to our hands, right? And giving them that full white glove treatment as we call it. And so from a customer's perspective, one, something like arlon will integrate with what they have so they don't have to rip and replace anything. In fact, it will, even in the next versions, it may even discover your clusters that you have today and, you know, give you an inventory and that, >>So customers have clusters that are growing, that's a sign correct call you guys. >>Absolutely. Either they're, they have massive large clusters, right? That they wanna split into smaller clusters, but they're not comfortable doing that today, or they've done that already on say, public cloud or otherwise. And now they have management challenges. So >>Especially operationalizing the clusters, whether they want to kind of reset everything and remove things around and reconfigure Yeah. And or scale out. >>That's right. Exactly. >>And you provide that layer of policy. >>Absolutely. >>Yes. That's the key value >>Here. That's right. >>So policy based configuration for cluster scale up >>Profile and policy based declarative configuration and life cycle management for clusters. >>If I asked you how this enables Super club, what would you say to that? >>I think this is one of the key ingredients to super cloud, right? If you think about a super cloud environment, there's at least few key ingredients that that come to my mind that are really critical. Like they are, you know, life saving ingredients at that scale. One is having a really good strategy for managing that scale, you know, in a, going back to assembly line in a very consistent, predictable way so that our lot solves then you, you need to compliment that with the right kind of observability and monitoring tools at scale, right? Because ultimately issues are gonna happen and you're gonna have to figure out, you know, how to solve them fast. And alon by the way, also helps in that direction, but you also need observability tools. And then especially if you're running it on the public cloud, you need some cost management tools. In my mind, these three things are like the most necessary ingredients to make Super Cloud successful. And, you know, alarm flows >>In one. Okay, so now the next level is, Okay, that makes sense. There's under the covers kind of speak under the hood. Yeah. How does that impact the app developers and the cloud native modern application workflows? Because the impact to me, seems the apps are gonna be impacted. Are they gonna be faster, stronger? I mean, what's the impact if you do all those things, as you mentioned, what's the impact of the apps? >>Yeah, the impact is that your apps are more likely to operate in production the way you expect them to, because the right checks and balances have gone through, and any discrepancies have been identified prior to those apps, prior to your customer running into them, right? Because developers run into this challenge to their, where there's a split responsibility, right? I'm responsible for my code, I'm responsible for some of these other plugins, but I don't own the stack end to end. I have to rely on my ops counterpart to do their part, right? And so this really gives them, you know, the right tooling for >>That. So this is actually a great kind of relevant point, you know, as cloud becomes more scalable, you're starting to see this fragmentation gone of the days of the full stack developer to the more specialized role. But this is a key point, and I have to ask you because if this Arlo solution takes place, as you say, and the apps are gonna be stupid, there's designed to do, the question is, what did, does the current pain look like of the apps breaking? What does the signals to the customer Yeah. That they should be calling you guys up into implementing Arlo, Argo, and, and, and on all the other goodness to automate, What are some of the signals? Is it downtime? Is it, is it failed apps, Is it latency? What are some of the things that Yeah, absolutely would be in indications of things are effed up a little bit. >>Yeah. More frequent down times, down times that are, that take longer to triage. And so you are, you know, the, you know, your mean times on resolution, et cetera, are escalating or growing larger, right? Like we have environments of customers where they, they have a number of folks on in the field that have to take these apps and run them at customer sites. And that's one of our partners. And they're extremely interested in this because the, the rate of failures they're encountering for this, you know, the field when they're running these apps on site, because the field is automating their clusters that are running on sites using their own script. So these are the kinds of challenges, and those are the pain points, which is, you know, if you're looking to reduce your, your meantime to resolution, if you're looking to reduce the number of failures that occur on your production site, that's one. And second, if you are looking to manage these at scale environments with a relatively small, focused, nimble ops team, which has an immediate impact on your, So those are, those are the >>Signals. This is the cloud native at scale situation, the innovation going on. Final thought is your reaction to the idea that if the world goes digital, which it is, and the confluence of physical and digital coming together, and cloud continues to do its thing, the company becomes the application, not where it used to be supporting the business, you know, the back office and the IIA terminals and some PCs and handhelds. Now if technology's running, the business is the business. Yeah. The company's the application. Yeah. So it can't be down. So there's a lot of pressure on, on CSOs and CIOs now and see, and boards is saying, how is technology driving the top line revenue? That's the number one conversation. Yeah. Do you see that same thing? >>Yeah. It's interesting. I think there's multiple pressures at the CXO CIO level, right? One is that there needs to be that visibility and clarity and guarantee almost that, you know, that the, the technology that's, you know, that's gonna drive your top line is gonna drive that in a consistent, reliable, predictable manner. And then second, there is the constant pressure to do that while always lowering your costs of doing it, right? Especially when you're talking about, let's say retailers or those kinds of large scale vendors, they many times make money by lowering the amount that they spend on, you know, providing those goods to their end customers. So I think those, both those factors kind of come into play and the solution to all of them is usually in a very structured strategy around automation. >>Final question. What does cloudnative at scale look like to you? If all the things happen the way we want 'em to happen, The magic wand, the magic dust, what does it look like? >>What that looks like to me is a CIO sipping at his desk on coffee production is running absolutely smooth. And his, he's running that at a nimble, nimble team size of at the most, a handful of folks that are just looking after things with things. So just >>Taking care of, and the CIO doesn't exist. There's no CSO there at the beach. >>Yeah. >>Thank you for coming on, sharing the cloud native at scale here on the cube. Thank you for your time. >>Fantastic. Thanks for having >>Me. Okay. I'm John Fur here for special program presentation, special programming cloud native at scale, enabling super cloud modern applications with Platform nine. Thanks for watching. Welcome back everyone to the special presentation of cloud native at scale, the cube and platform nine special presentation going in and digging into the next generation super cloud infrastructure as code and the future of application development. We're here at Bickley, who's the chief architect and co-founder of Platform nine b. Great to see you Cube alumni. We, we met at an OpenStack event in about eight years ago, or well later, earlier when opens Stack was going. Great to see you and great to see congratulations on the success of platform nine. >>Thank you very much. >>Yeah. You guys have been at this for a while and this is really the, the, the year we're seeing the, the crossover of Kubernetes because of what happens with containers. Everyone now was realized, and you've seen what Docker's doing with the new docker, the open source Docker now just a success Exactly. Of containerization, right? And now the Kubernetes layer that we've been working on for years is coming, bearing fruit. This is huge. >>Exactly. Yes. >>And so as infrastructure's code comes in, we talked to Bacar talking about Super Cloud, I met her about, you know, the new Arlon, our R lawn you guys just launched, the infrastructure's code is going to another level. And then it's always been DevOps infrastructure is code. That's been the ethos that's been like from day one, developers just code. Then you saw the rise of serverless and you see now multi-cloud or on the horizon, connect the dots for us. What is the state of infrastructures code today? >>So I think, I think I'm, I'm glad you mentioned it, everybody or most people know about infrastructures code. But with Kubernetes, I think that project has evolved at the concept even further. And these dates, it's infrastructure as configuration, right? So, which is an evolution of infrastructure as code. So instead of telling the system, here's how I want my infrastructure by telling it, you know, do step A, B, C, and D instead with Kubernetes, you can describe your desired state declaratively using things called manifest resources. And then the system kind of magically figures it out and tries to converge the state towards the one that you specify. So I think it's, it's a even better version of infrastructures code. >>Yeah, yeah. And, and that really means it's developer just accessing resources. Okay. Not declaring, Okay, give me some compute, stand me up some, turn the lights on, turn 'em off, turn 'em on. That's kind of where we see this going. And I like the configuration piece. Some people say composability, I mean now with open source, so popular, you don't have to have to write a lot of code. It's code being developed. And so it's into integration, it's configuration. These are areas that we're starting to see computer science principles around automation, machine learning, assisting open source. Cuz you got a lot of code that's right in hearing software, supply chain issues. So infrastructure as code has to factor in these new, new dynamics. Can you share your opinion on these new dynamics of, as open source grows, the glue layers, the configurations, the integration, what are the core issues? >>I think one of the major core issues is with all that power comes complexity, right? So, you know, despite its expressive power systems like Kubernetes and declarative APIs let you express a lot of complicated and complex stacks, right? But you're dealing with hundreds if not thousands of these yamo files or resources. And so I think, you know, the emergence of systems and layers to help you manage that complexity is becoming a key challenge and opportunity in, in this space that, >>That's, I wrote a LinkedIn post today was comments about, you know, hey, enterprise is the new breed, the trend of SaaS companies moving our consumer comp consumer-like thinking into the enterprise has been happening for a long time, but now more than ever, you're seeing it the old way used to be solve complexity with more complexity and then lock the customer in. Now with open source, it's speed, simplification and integration, right? These are the new dynamic power dynamics for developers. Yeah. So as companies are starting to now deploy and look at Kubernetes, what are the things that need to be in place? Because you have some, I won't say technical debt, but maybe some shortcuts, some scripts here that make it look like infrastructure is code. People have done some things to simulate or or make infrastructure as code happen. Yes. But to do it at scale Yes. Is harder. What's your take on this? What's your >>View? It's hard because there's a per proliferation of methods, tools, technologies. So for example, today it's very common for DevOps and platform engineering tools, I mean, sorry, teams to have to deploy a large number of Kubernetes clusters, but then apply the applications and configurations on top of those clusters. And they're using a wide range of tools to do this, right? For example, maybe Ansible or Terraform or bash scripts to bring up the infrastructure and then the clusters. And then they may use a different set of tools such as Argo CD or other tools to apply configurations and applications on top of the clusters. So you have this sprawl of tools. You, you also have this sprawl of configurations and files because the more objects you're dealing with, the more resources you have to manage. And there's a risk of drift that people call that where, you know, you think you have things under control, but some people from various teams will make changes here and there and then before the end of the day systems break and you have no idea of tracking them. So I think there's real need to kind of unify, simplify, and try to solve these problems using a smaller, more unified set of tools and methodologies. And that's something that we try to do with this new project. Arlon. >>Yeah. So, so we're gonna get into Arlan in a second. I wanna get into the why Arlon. You guys announced that at our GoCon, which was put on here in Silicon Valley at the, at the by intu. They had their own little day over there at their headquarters. But before we get there, Vascar, your CEO came on and he talked about Super Cloud at our inaugural event. What's your definition of super cloud? If you had to kind of explain that to someone at a cocktail party or someone in the industry technical, how would you look at the super cloud trend that's emerging? It's become a thing. What's your, what would be your contribution to that definition or the narrative? >>Well, it's, it's, it's funny because I've actually heard of the term for the first time today, speaking to you earlier today. But I think based on what you said, I I already get kind of some of the, the gist and the, the main concepts. It seems like super cloud, the way I interpret that is, you know, clouds and infrastructure, programmable infrastructure, all of those things are becoming commodity in a way. And everyone's got their own flavor, but there's a real opportunity for people to solve real business problems by perhaps trying to abstract away, you know, all of those various implementations and then building better abstractions that are perhaps business or application specific to help companies and businesses solve real business problems. >>Yeah, I remember that's a great, great definition. I remember, not to date myself, but back in the old days, you know, IBM had a proprietary network operating system, so to deck for the mini computer vendors, deck net and SNA respectively. But T C P I P came out of the osi, the open systems interconnect and remember, ethernet beat token ring out. So not to get all nerdy for all the young kids out there, look, just look up token ring, you'll see, you've probably never heard of it. It's IBM's, you know, connection for the internet at the, the layer too is Amazon, the ethernet, right? So if T C P I P could be the Kubernetes and the container abstraction that made the industry completely change at that point in history. So at every major inflection point where there's been serious industry change and wealth creation and business value, there's been an abstraction Yes. Somewhere. Yes. What's your reaction to that? >>I think this is, I think a saying that's been heard many times in this industry and, and I forgot who originated it, but I think the saying goes like, there's no problem that can't be solved with another layer of indirection, right? And we've seen this over and over and over again where Amazon and its peers have inserted this layer that has simplified, you know, computing and, and infrastructure management. And I believe this trend is going to continue, right? The next set of problems are going to be solved with these insertions of additional abstraction layers. I think that that's really a, yeah, it's gonna continue. >>It's interesting. I just really wrote another post today on LinkedIn called the Silicon Wars AMD Stock is down arm has been on rise, we've remember pointing for many years now, that arm's gonna be hugely, it has become true. If you look at the success of the infrastructure as a service layer across the clouds, Azure, aws, Amazon's clearly way ahead of everybody. The stuff that they're doing with the silicon and the physics and the, the atoms, the pro, you know, this is where the innovation, they're going so deep and so strong at ISAs, the more that they get that gets come on, they have more performance. So if you're an app developer, wouldn't you want the best performance and you'd wanna have the best abstraction layer that gives you the most ability to do infrastructures, code or infrastructure for configuration, for provisioning, for managing services. And you're seeing that today with service MeSHs, a lot of action going on in the service mesh area in, in this community of co con, which will be a covering. So that brings up the whole what's next? You guys just announced our lawn at ar GoCon, which came out of Intuit. We've had Maria Teel at our super cloud event, She's a cto, you know, they're all in the cloud. So they contributed that project. Where did Arlon come from? What was the origination? What's the purpose? Why our lawn, why this announcement? Yeah, >>So the, the inception of the project, this was the result of us realizing that problem that we spoke about earlier, which is complexity, right? With all of this, these clouds, these infrastructure, all the variations around and you know, compute storage networks and the proliferation of tools we talked about the Ansibles and Terraforms and Kubernetes itself, you can think of that as another tool, right? We saw a need to solve that complexity problem, and especially for people and users who use Kubernetes at scale. So when you have, you know, hundreds of clusters, thousands of applications, thousands of users spread out over many, many locations, there, there needs to be a system that helps simplify that management, right? So that means fewer tools, more expressive ways of describing the state that you want and more consistency. And, and that's why, you know, we built AR lawn and we built it recognizing that many of these problems or sub problems have already been solved. So Arlon doesn't try to reinvent the wheel, it instead rests on the shoulders of several giants, right? So for example, Kubernetes is one building block, GI ops, and Argo CD is another one, which provides a very structured way of applying configuration. And then we have projects like cluster API and cross plane, which provide APIs for describing infrastructure. So arlon takes all of those building blocks and builds a thin layer, which gives users a very expressive way of defining configuration and desired state. So that's, that's kind of the inception of, And >>What's the benefit of that? What does that give the, what does that give the developer, the user, in this case, >>The developers, the, the platform engineer, team members, the DevOps engineers, they get a a ways to provision not just infrastructure and clusters, but also applications and configurations. They get a way, a system for provisioning, configuring, deploying, and doing life cycle management in a, in a much simpler way. Okay. Especially as I said, if you're dealing with a large number of applications. >>So it's like an operating fabric, if you will. Yes. For them. Okay, so let's get into what that means for up above and below the, the, this abstraction or thin layer below the infrastructure. We talked a lot about what's going on below that. Yeah. Above our workloads at the end of the day, and I talk to CXOs and IT folks that, that are now DevOps engineers. They care about the workloads and they want the infrastructure's code to work. They wanna spend their time getting in the weeds, figuring out what happened when someone made a push that that happened or something happened. They need observability and they need to, to know that it's working. That's right. And here's my workloads running effectively. So how do you guys look at the workload side of it? Cuz now you have multiple workloads on these fabric, right? >>So workloads, so Kubernetes has defined kind of a standard way to describe workloads and you can, you know, tell Kubernetes, I want to run this container this particular way, or you can use other projects that are in the Kubernetes cloud native ecosystem, like K native, where you can express your application in more at a higher level, right? But what's also happening is in addition to the workloads, DevOps and platform engineering teams, they need to very often deploy the applications with the clusters themselves. Clusters are becoming this commodity. It's, it's becoming this host for the application and it kind of comes bundled with it. In many cases it is like an appliance, right? So DevOps teams have to provision clusters at a really incredible rate and they need to tear them down. Clusters are becoming more, >>It's coming like an EC two instance, spin up a cluster. We've heard people used words like that. That's >>Right. And before arlon you kind of had to do all of that using a different set of tools as, as I explained. So with AR loan you can kind of express everything together. You can say I want a cluster with a health monitoring stack and a logging stack and this ingress controller and I want these applications and these security policies. You can describe all of that using something we call the profile. And then you can stamp out your app, your applications and your clusters and manage them in a very, So >>It's essentially standard, like creates a mechanism. Exactly. Standardized, declarative kind of configurations. And it's like a playbook, just deploy it. Now what there is between say a script like I'm, I have scripts, I can just automate scripts >>Or yes, this is where that declarative API and infrastructure as configuration comes in, right? Because scripts, yes you can automate scripts, but the order in which they run matters, right? They can break, things can break in the middle and, and sometimes you need to debug them. Whereas the declarative way is much more expressive and powerful. You just tell the system what you want and then the system kind of figures it out. And there are these things are controllers which will in the background reconcile all the state to converge towards your desire. It's a much more powerful, expressive and reliable way of getting things done. >>So infrastructure as configuration is built kind of on, it's a super set of infrastructures code because it's >>An evolution. >>You need edge's code, but then you can configure the code by just saying do it. You basically declaring saying Go, go do that. That's right. Okay, so, alright, so cloud native at scale, take me through your vision of what that means. Someone says, Hey, what does cloud native at scale mean? What's success look like? How does it roll out in the future as you, not future next couple years. I mean people are now starting to figure out, okay, it's not as easy as it sounds. Kubernetes has value. We're gonna hear this year at CubeCon a lot of this, what does cloud native at scale >>Mean? Yeah, there are different interpretations, but if you ask me, when people think of scale, they think of a large number of deployments, right? Geographies, many, you know, supporting thousands or tens or millions of, of users there, there's that aspect to scale. There's also an equally important a aspect of scale, which is also something that we try to address with Arran. And that is just complexity for the people operating this or configuring this, right? So in order to describe that desired state, and in order to perform things like maybe upgrades or updates on a very large scale, you want the humans behind that to be able to express and direct the system to do that in, in relatively simple terms, right? And so we want the tools and the abstractions and the mechanisms available to the user to be as powerful but as simple as possible. So there's, I think there's gonna be a number and there have been a number of CNCF and cloud native projects that are trying to attack that complexity problem as well. And Arlon kind of falls in in that >>Category. Okay, so I'll put you on the spot rogue, that CubeCon coming up and now this'll be shipping this segment series out before. What do you expect to see at this year? It's the big story this year. What's the, what's the most important thing happening? Is it in the open source community and also within a lot of the, the people jockeying for leadership. I know there's a lot of projects and still there's some white space in the overall systems map about the different areas get run time and there's ability in all these different areas. What's the, where's the action? Where, where's the smoke? Where's the fire? Where's the piece? Where's the tension? >>Yeah, so I think one thing that has been happening over the past couple of coupon and I expect to continue and, and that is the, the word on the street is Kubernetes is getting boring, right? Which is good, right? >>Boring means simple. >>Well, well >>Maybe, >>Yeah, >>Invisible, >>No drama, right? So, so the, the rate of change of the Kubernetes features and, and all that has slowed but in, in a, in a positive way. But there's still a general sentiment and feeling that there's just too much stuff. If you look at a stack necessary for hosting applications based on Kubernetes, there are just still too many moving parts, too many components, right? Too much complexity. I go, I keep going back to the complexity problem. So I expect Cube Con and all the vendors and the players and the startups and the people there to continue to focus on that complexity problem and introduce further simplifications to, to the stack. >>Yeah. Vic, you've had an storied career VMware over decades with them within 12 years with 14 years or something like that. Big number co-founder here a platform. I you's been around for a while at this game, man. We talked about OpenStack, that project we interviewed at one of their events. So OpenStack was the beginning of that, this new revolution. I remember the early days it was, it wasn't supposed to be an alternative to Amazon, but it was a way to do more cloud cloud native. I think we had a Cloud Aati team at that time. We would joke we, you know, about, about the dream. It's happening now, now at Platform nine. You guys have been doing this for a while. What's the, what are you most excited about as the chief architect? What did you guys double down on? What did you guys pivot from or two, did you do any pivots? Did you extend out certain areas? Cuz you guys are in a good position right now, a lot of DNA in Cloud native. What are you most excited about and what does Platform Nine bring to the table for customers and for people in the industry watching this? >>Yeah, so I think our mission really hasn't changed over the years, right? It's been always about taking complex open source software because open source software, it's powerful. It solves new problems, you know, every year and you have new things coming out all the time, right? Opens Stack was an example and then Kubernetes took the world by storm. But there's always that complexity of, you know, just configuring it, deploying it, running it, operating it. And our mission has always been that we will take all that complexity and just make it, you know, easy for users to consume regardless of the technology, right? So the successor to Kubernetes, you know, I don't have a crystal ball, but you know, you have some indications that people are coming up of new and simpler ways of running applications. There are many projects around there who knows what's coming next year or the year after that. But platform will a, platform nine will be there and we will, you know, take the innovations from the the community. We will contribute our own innovations and make all of those things very consumable to customers. >>Simpler, faster, cheaper. Exactly. Always a good business model technically to make that happen. Yes. Yeah, I think the, the reigning in the chaos is key, you know, Now we have now visibility into the scale. Final question before we depart this segment. What is at scale, how many clusters do you see that would be a watermark for an at scale conversation around an enterprise? Is it workloads we're looking at or, or clusters? How would you, Yeah, how would you describe that? When people try to squint through and evaluate what's a scale, what's the at scale kind of threshold? >>Yeah. And, and the number of clusters doesn't tell the whole story because clusters can be small in terms of the number of nodes or they can be large. But roughly speaking when we say, you know, large scale cluster deployments, we're talking about maybe hundreds, two thousands. >>Yeah. And final final question, what's the role of the hyperscalers? You got AWS continuing to do well, but they got their core ias, they got a PAs, they're not too too much putting a SaaS out there. They have some SaaS apps, but mostly it's the ecosystem. They have marketplaces doing, doing over $2 billion billions of transactions a year and, and it's just like, just sitting there. It hasn't really, they're now innovating on it, but that's gonna change ecosystems. What's the role the cloud play in the cloud need of its scale? >>The, the hyper squares? >>Yeah, yeah. A's Azure Google, >>You mean from a business perspective, they're, they have their own interests that, you know, that they're, they will keep catering to, they, they will continue to find ways to lock their users into their ecosystem of services and, and APIs. So I don't think that's gonna change, right? They're just gonna keep well, >>They got great performance. I mean, from a, from a hardware standpoint, yes. That's gonna be key, >>Right? Yes. I think the, the move from X 86 being the dominant way and platform to run workloads is changing, right? That, that, that, that, and I think the, the hyper skaters really want to be in the game in terms of, you know, the, the new risk and arm ecosystems, the platforms. >>Yeah. Not joking aside, Paul Morritz, when he was the CEO of VMware, when he took over once said, I remember our first year doing the cube. Oh the cloud is one big distributed computer. It's, it's hardware and you got software and you got middleware and he kinda over, well he's kind of tongue in cheek, but really you're talking about large compute and sets of services that is essentially a distributed computer. Yes, >>Exactly. >>It's, we're back in the same game. Thank you for coming on the segment. Appreciate your time. This is cloud native at scale special presentation with Platform nine. Really unpacking super cloud Arlon open source and how to run large scale applications on the cloud, cloud native develop for developers. And John Furrier with the cube. Thanks for Washington. We'll stay tuned for another great segment coming right up. Hey, welcome back everyone to Super Cloud 22. I'm John Fur, host of the Cuba here all day talking about the future of cloud. Where's it all going? Making it super multi-cloud is around the corner and public cloud is winning. Got the private cloud on premise and Edge. Got a great guest here, Vascar Gorde, CEO of Platform nine, just on the panel on Kubernetes. An enabler blocker. Welcome back. Great to have you on. >>Good to see you >>Again. So Kubernetes is a blocker enabler by, with a question mark I put on on there. Panel was really to discuss the role of Kubernetes. Now great conversation operations is impacted. What's just thing about what you guys are doing at Platform nine? Is your role there as CEO and the company's position, kind of like the world spun into the direction of Platform nine while you're at the helm, right? >>Absolutely. In fact, things are moving very well and since they came to us, it was an insight to call ourselves the platform company eight years ago, right? So absolutely whether you are doing it in public clouds or private clouds, you know, the application world is moving very fast in trying to become digital and cloud native. There are many options for you to run the infrastructure. The biggest blocking factor now is having a unified platform. And that's what where we come into >>Patrick, we were talking before we came on stage here about your background and we were kind of talking about the glory days in 2000, 2001 when the first ASPs application service providers came out. Kind of a SaaS vibe, but that was kind of all kind of cloud-like >>It wasn't, >>And web services started then too. So you saw that whole growth. Now, fast forward 20 years later, 22 years later, where we are now, when you look back then to here and all the different cycles, >>In fact, you know, as we were talking offline, I was in one of those ASPs in the year 2000 where it was a novel concept of saying we are providing a software and a capability as a service, right? You sign up and start using it. I think a lot has changed since then. The tooling, the tools, the technology has really skyrocketed. The app development environment has really taken off exceptionally well. There are many, many choices of infrastructure now, right? So I think things are in a way the same but also extremely different. But more importantly now for any company, regardless of size, to be a digital native, to become a digital company is extremely mission critical. It's no longer a nice to have everybody's in the journey somewhere. >>Everyone is going digital transformation here. Even on a so-called downturn recession that's upcoming inflations sea year. It's interesting. This is the first downturn, the history of the world where the hyperscale clouds have been pumping on all cylinders as an economic input. And if you look at the tech trends, GDPs down, but not tech. Nope. Cause pandemic showed everyone digital transformation is here and more spend and more growth is coming even in, in tech. So this is a unique factor which proves that that digital transformation's happening and company, every company will need a super cloud. >>Everyone, every company, regardless of size, regardless of location, has to become modernize their infrastructure. And modernizing infrastructure is not just some, you know, new servers and new application tools. It's your approach, how you're serving your customers, how you're bringing agility in your organization. I think that is becoming a necessity for every enterprise to survive. >>I wanna get your thoughts on Super Cloud because one of the things Dave Alon and I want to do with Super Cloud and calling it that was we, I, I personally, and I know Dave as well, he can, I'll speak from, he can speak for himself. We didn't like multi-cloud. I mean not because Amazon said don't call things multi-cloud, it just didn't feel right. I mean everyone has multiple clouds by default. If you're running productivity software, you have Azure and Office 365. But it wasn't truly distributed. It wasn't truly decentralized, it wasn't truly cloud enabled. It didn't, it felt like they're not ready for a market yet. Yet public clouds booming on premise. Private cloud and Edge is much more on, you know, more, More dynamic, more unreal. >>Yeah. I think the reason why we think Super cloud is a better term than multi-cloud. Multi-cloud are more than one cloud, but they're disconnected. Okay, you have a productivity cloud, you have a Salesforce cloud, you may have, everyone has an internal cloud, right? So, but they're not connected. So you can say, okay, it's more than one cloud. So it's, you know, multi-cloud. But super cloud is where you are actually trying to look at this holistically. Whether it is on-prem, whether it is public, whether it's at the edge, it's a store at the branch. You are looking at this as one unit. And that's where we see the term super cloud is more applicable because what are the qualities that you require if you're in a super cloud, right? You need choice of infrastructure, you need, but at the same time you need a single pan or a single platform for you to build your innovations on, regardless of which cloud you're doing it on, right? So I think Super Cloud is actually a more tightly integrated orchestrated management philosophy we think. >>So let's get into some of the super cloud type trends that we've been reporting on. Again, the purpose of this event is as a pilot to get the conversations flowing with, with the influencers like yourselves who are running companies and building products and the builders, Amazon and Azure are doing extremely well. Google's coming up in third Cloudworks in public cloud. We see the use cases on premises use cases. Kubernetes has been an interesting phenomenon because it's become from the developer side a little bit, but a lot of ops people love Kubernetes. It's really more of an ops thing. You mentioned OpenStack earlier. Kubernetes kind of came out of that open stack. We need an orchestration. And then containers had a good shot with, with Docker. They re pivoted the company. Now they're all in an open source. So you got containers booming and Kubernetes as a new layer there. >>What's, >>What's the take on that? What does that really mean? Is that a new defacto enabler? It >>Is here. It's for here for sure. Every enterprise somewhere in the journey is going on. And you know, most companies are, 70 plus percent of them have 1, 2, 3 container based, Kubernetes based applications now being rolled out. So it's very much here. It is in production at scale by many customers. And it, the beauty of it is yes, open source, but the biggest gating factor is the skill set. And that's where we have a phenomenal engineering team, right? So it's, it's one thing to buy a tool and >>Just be clear, you're a managed service for Kubernetes. >>We provide, provide a software platform for cloud acceleration as a service and it can run anywhere. It can run in public private. We have customers who do it in truly multi-cloud environments. It runs on the edge, it runs at this in stores about thousands of stores in a retailer. So we provide that and also for specific segments where data sovereignty and data residency are key regulatory reasons. We also un on-prem as an air gap version. Can >>You give an example on how you guys are deploying your platform to enable a super cloud experience for your customer? Right. >>So I'll give you two different examples. One is a very large networking company, public networking company. They have hundreds of products, hundreds of r and d teams that are building different, different products. And if you look at few years back, each one was doing it on a different platforms, but they really needed to bring the agility. And they worked with us now over three years where we are their build test dev pro platform where all their products are built on, right? And it has dramatically increased their agility to release new products. Number two, it actually is a light out operation. In fact, the customer says like, like the Maytag service person, cuz we provide it as a service and it barely takes one or two people to maintain it for them. >>So it's kinda like an SRE vibe. One person managing a >>Large 4,000 engineers building infrastructure >>On their tools, >>Whatever they want on their tools. They're using whatever app development tools they use, but they use our platform. What >>Benefits are they seeing? Are they seeing speed? >>Speed, definitely. Okay. Definitely they're speeding. Speed uniformity because now they're building able to build, so their customers who are using product A and product B are seeing a similar set of tools that are being used. >>So a big problem that's coming outta this super cloud event that we're, we're seeing and we heard it all here, ops and security teams. Cause they're kind of part of one thing, but option security specifically need to catch up speed wise. Are you delivering that value to ops and security? Right? >>So we, we work with ops and security teams and infrastructure teams and we layer on top of that. We have like a platform team. If you think about it, depending on where you have data centers, where you have infrastructure, you have multiple teams, okay, but you need a unified platform. Who's your buyer? Our buyer is usually, you know, the product divisions of companies that are looking at or the CTO would be a buyer for us functionally cio definitely. So it it's, it's somewhere in the DevOps to infrastructure. But the ideal one we are beginning to see now many large corporations are really looking at it as a platform and saying we have a platform group on which any app can be developed and it is run on any infrastructure. So the platform engineering teams. So >>You working two sides to that coin. You've got the dev side and then >>And then infrastructure >>Side. >>Okay. Another customer that I give an example, which I would say is kind of the edge of the store. So they have thousands of stores. Retail, retail, you know food retailer, right? They have thousands of stores that are on the globe, 50,000, 60,000. And they really want to enhance the customer experience that happens when you either order the product or go into the store and pick up your product or buy or browse or sit there. They have applications that were written in the nineties and then they have very modern AIML applications today. They want something that will not have to send an IT person to install a rack in the store or they can't move everything to the cloud because the store operations has to be local. The menu changes based on it's classic edge. It's classic edge, yeah. Right? They can't send it people to go install rack access servers then they can't sell software people to go install the software and any change you wanna put through that, you know, truck roll. So they've been working with us where all they do is they ship, depending on the size of the store, one or two or three little servers with instructions that >>You, you say little servers like how big one like a box, like a small little box, >>Right? And all the person in the store has to do like what you and I do at home and we get a, you know, a router is connect the power, connect the internet and turn the switch on. And from there we pick it up. >>Yep. >>We provide the operating system, everything and then the applications are put on it. And so that dramatically brings the velocity for them. They manage thousands of >>Them. True plug and play >>Two, plug and play thousands of stores. They manage it centrally. We do it for them, right? So, so that's another example where on the edge then we have some customers who have both a large private presence and one of the public clouds. Okay. But they want to have the same platform layer of orchestration and management that they can use regardless of the locations. >>So you guys got some success. Congratulations. Got some traction there. It's awesome. The question I want to ask you is that's come up is what is truly cloud native? Cuz there's lift and shift of the cloud >>That's not cloud native. >>Then there's cloud native. Cloud native seems to be the driver for the super cloud. How do you talk to customers? How do you explain when someone says what's cloud native, what isn't cloud native? >>Right. Look, I think first of all, the best place to look at what is the definition and what are the attributes and characteristics of what is truly a cloud native, is CNC foundation. And I think it's very well documented, very well. >>Tucan, of course Detroit's >>Coming so, so it's already there, right? So we follow that very closely, right? I think just lifting and shifting your 20 year old application onto a data center somewhere is not cloud native. Okay? You can't put to cloud, not you have to rewrite and redevelop your application in business logic using modern tools. Hopefully more open source and, and I think that's what Cloudnative is and we are seeing a lot of our customers in that journey. Now everybody wants to be cloudnative, but it's not that easy, okay? Because it's, I think it's first of all, skill set is very important. Uniformity of tools that there's so many tools there. Thousands and thousands of tools you could spend your time figuring out which tool to use. Okay? So I think the complexity is there, but the business benefits of agility and uniformity and customer experience are truly being done. >>And I'll give you an example, I don't know how clear native they are, right? And they're not a customer of ours, but you order pizzas, you do, right? If you just watch the pizza industry, how dominoes actually increase their share and mind share and wallet share was not because they were making better pizzas or not, I don't know anything about that, but the whole experience of how you order, how you watch what's happening, how it's delivered. There were a pioneer in it. To me, those are the kinds of customer experiences that cloud native can provide. >>Being agility and having that flow to the application changes what the expectations >>Are >>For the customer. Customer, >>The customer's expectations change, right? Once you get used to a better customer experience, you learn. >>That's to wrap it up. I wanna just get your perspective again. One of the benefits of chatting with you here and having you part of the Super Cloud 22 is you've seen many cycles, you have a lot of insights. I want to ask you, given your career where you've been and what you've done and now let's CEO platform nine, how would you compare what's happening now with other inflection points in the industry? And you've been, again, you've been an entrepreneur, you sold your company to Oracle, you've been seeing the big companies, you've seen the different waves. What's going on right now put into context this moment in time around Super Cloud. >>Sure. I think as you said, a lot of battles. CARSs being been in an asb, being in a real time software company, being in large enterprise software houses and a transformation. I've been on the app side, I did the infrastructure right and then tried to build our own platforms. I've gone through all of this myself with lot of lessons learned in there. I think this is an event which is happening now for companies to go through to become cloud native and digitalize. If I were to look back and look at some parallels of the tsunami that's going on is a couple of paddles come to me. One is, think of it, which was forced to honors like y2k. Everybody around the world had to have a plan, a strategy, and an execution for y2k. I would say the next big thing was e-commerce. I think e-commerce has been pervasive right across all industries. >>And disruptive. >>And disruptive, extremely disruptive. If you did not adapt and adapt and accelerate your e-commerce initiative, you were, it was an existence question. Yeah. I think we are at that pivotal moment now in companies trying to become digital and cloudnative. You know, that is what I see >>Happening there. I think that that e-commerce is interesting and I think just to riff with you on that is that it's disrupting and refactoring the business models. I think that is something that's coming out of this is that it's not just completely changing the gain, it's just changing how you operate, >>How you think and how you operate. See, if you think about the early days of e-commerce, just putting up a shopping cart that made you an e-commerce or e retailer or an e e e customer, right? Or so. I think it's the same thing now is I think this is a fundamental shift on how you're thinking about your business. How are you gonna operate? How are you gonna service your customers? I think it requires that just lift and shift is not gonna work. >>Nascar, thank you for coming on, spending the time to come in and share with our community and being part of Super Cloud 22. We really appreciate, we're gonna keep this open. We're gonna keep this conversation going even after the event, to open up and look at the structural changes happening now and continue to look at it in the open in the community. And we're gonna keep this going for, for a long, long time as we get answers to the problems that customers are looking for with cloud cloud computing. I'm Sean Fur with Super Cloud 22 in the Cube. Thanks for watching. >>Thank you. Thank you. >>Hello and welcome back. This is the end of our program, our special presentation with Platform nine on cloud native at scale, enabling the super cloud. We're continuing the theme here. You heard the interviews Super Cloud and its challenges, new opportunities around solutions around like Platform nine and others with Arlon. This is really about the edge situations on the internet and managing the edge multiple regions, avoiding vendor lock in. This is what this new super cloud is all about. The business consequences we heard and and the wide ranging conversations around what it means for open source and the complexity problem all being solved. I hope you enjoyed this program. There's a lot of moving pieces and things to configure with cloud native install, all making it easier for you here with Super Cloud and of course Platform nine contributing to that. Thank you for watching.

>>Hello, welcome to the Cube here in Palo Alto, California for a special presentation on Cloud native at scale, enabling super cloud modern applications with Platform nine. I'm John Furr, your host of The Cube. We had a great lineup of three interviews we're streaming today. Meor Ma Makowski, who's the co-founder and VP of Product of Platform nine. She's gonna go into detail around Arlon, the open source products, and also the value of what this means for infrastructure as code and for cloud native at scale. Bickley the chief architect of Platform nine Cube alumni. Going back to the OpenStack days. He's gonna go into why Arlon, why this infrastructure as code implication, what it means for customers and the implications in the open source community and where that value is. Really great wide ranging conversation there. And of course, Vascar, Gort, the CEO of Platform nine, is gonna talk with me about his views on Super Cloud and why Platform nine has a scalable solutions to bring cloudnative at scale. So enjoy the program. See you soon. Hello everyone. Welcome to the cube here in Palo Alto, California for special program on cloud native at scale, enabling next generation cloud or super cloud for modern application cloud native developers. I'm John Furry, host of the Cube. A pleasure to have here, me Makoski, co-founder and VP of product at Platform nine. Thanks for coming in today for this Cloudnative at scale conversation. Thank >>You for having me. >>So Cloudnative at scale, something that we're talking about because we're seeing the, the next level of mainstream success of containers Kubernetes and cloud native develop, basically DevOps in the C I C D pipeline. It's changing the landscape of infrastructure as code, it's accelerating the value proposition and the super cloud as we call it, has been getting a lot of traction because this next generation cloud is looking a lot different, but kind of the same as the first generation. What's your view on super cloud as it fits to cloud native as scales up? >>Yeah, you know, I think what's interesting, and I think the reason why Super Cloud is a really good, in a really fit term for this, and I think, I know my CEO was chatting with you as well, and he was mentioning this as well, but I think there needs to be a different term than just multi-cloud or cloud. And the reason is because as cloud native and cloud deployments have scaled, I think we've reached a point now where instead of having the traditional data center style model where you have a few large distributions of infrastructure and workload at a few locations, I think the model is kind of flipped around, right? Where you have a large number of microsites, these microsites could be your public cloud deployment, your private on-prem infrastructure deployments, or it could be your edge environment, right? And every single enterprise, every single industry is moving in that direction. And so you gotta rougher that with a terminology that, that, that indicates the scale and complexity of it. And so I think supercloud is a, is an appropriate term for that. >>So you brought a couple of things I want to dig into. You mentioned edge nodes. We're seeing not only edge nodes being the next kind of area of innovation, mainly because it's just popping up everywhere. And that's just the beginning. Wouldn't even know what's around the corner. You got buildings, you got iot, ot, and IT kind of coming together, but you also got this idea of regions, global infras infrastructures, big part of it. I just saw some news around CloudFlare shutting down a site here. There's policies being made at scale, These new challenges there. Can you share because you can have edge. So hybrid cloud is a winning formula. Everybody knows that it's a steady state. Yeah. But across multiple clouds brings in this new un engineered area, yet it hasn't been done yet. Spanning clouds. People say they're doing it, but you start to see the toe in the water, it's happening, it's gonna happen. It's only gonna get accelerated with the edge and beyond globally. So I have to ask you, what is the technical challenges in doing this? Because there's something business consequences as well, but there are technical challenges. Can you share your view on what the technical challenges are for the super cloud or across multiple edges and regions? >>Yeah, absolutely. So I think, you know, in in the context of this, the, this, this term of super cloud, I think it's sometimes easier to visualize things in terms of two access, right? I think on one end you can think of the scale in terms of just pure number of nodes that you have deploy a number of clusters in the Kubernetes space. And then on the other axis you would have your distribution factor, right? Which is, do you have these tens of thousands of nodes in one site or do you have them distributed across tens of thousands of sites with one node at each site? Right? And if you have just one flavor of this, there is enough complexity, but potentially manageable. But when you are expanding on both these access, you really get to a point where that scale really needs some well thought out, well structured solutions to address it, right? A combination of homegrown tooling along with your, you know, favorite distribution of Kubernetes is not a strategy that can help you in this environment. It may help you when you have one of this or when you, when you scale, is not at the level. >>Can you scope the complexity? Because I mean, I hear a lot of moving parts going on there, the technology's also getting better. We we're seeing cloud native become successful. There's a lot to configure, there's a lot to install. Can you scope the scale of the problem? Because we're talking about at scale Yep. Challenges here. Yeah, >>Absolutely. And I think, you know, I I like to call it, you know, the, the, the problem that the scale creates, you know, there's various problems, but I think one, one problem, one way to think about it is, is, you know, it works on my cluster problem, right? So I, you know, I come from engineering background and there's a, you know, there's a famous saying between engineers and QA and the support folks, right? Which is, it works on my laptop, which is I tested this chain, everything was fantastic, it worked flawlessly on my machine, on production, It's not working. The exact same problem now happens and these distributed environments, but at massive scale, right? Which is that, you know, developers test their applications, et cetera within the sanctity of their sandbox environments. But once you expose that change in the wild world of your production deployment, right? >>And the production deployment could be going at the radio cell tower at the edge location where a cluster is running there, or it could be sending, you know, these applications and having them run at my customer site where they might not have configured that cluster exactly the same way as I configured it, or they configured the cluster, right? But maybe they didn't deploy the security policies, or they didn't deploy the other infrastructure plugins that my app relies on. All of these various factors are their own layer of complexity. And there really isn't a simple way to solve that today. And that is just, you know, one example of an issue that happens. I think another, you know, whole new ball game of issues come in the context of security, right? Because when you are deploying applications at scale in a distributed manner, you gotta make sure someone's job is on the line to ensure that the right security policies are enforced regardless of that scale factor. So I think that's another example of problems that occur. >>Okay. So I have to ask about scale, because there are a lot of multiple steps involved when you see the success of cloud native. You know, you see some, you know, some experimentation. They set up a cluster, say it's containers and Kubernetes, and then you say, Okay, we got this, we can figure it. And then they do it again and again, they call it day two. Some people call it day one, day two operation, whatever you call it. Once you get past the first initial thing, then you gotta scale it. Then you're seeing security breaches, you're seeing configuration errors. This seems to be where the hotspot is in when companies transition from, I got this to, Oh no, it's harder than I thought at scale. Can you share your reaction to that and how you see this playing out? >>Yeah, so, you know, I think it's interesting. There's multiple problems that occur when, you know, the two factors of scale, as we talked about, start expanding. I think one of them is what I like to call the, you know, it, it works fine on my cluster problem, which is back in, when I was a developer, we used to call this, it works on my laptop problem, which is, you know, you have your perfectly written code that is operating just fine on your machine, your sandbox environment. But the moment it runs production, it comes back with p zeros and pos from support teams, et cetera. And those issues can be really difficult to triage us, right? And so in the Kubernetes environment, this problem kind of multi folds, it goes, you know, escalates to a higher degree because you have your sandbox developer environments, they have their clusters and things work perfectly fine in those clusters because these clusters are typically handcrafted or a combination of some scripting and handcrafting. >>And so as you give that change to then run at your production edge location, like say your radio cell tower site, or you hand it over to a customer to run it on their cluster, they might not have not have configured that cluster exactly how you did, or they might not have configured some of the infrastructure plugins. And so the things don't work. And when things don't work, triaging them becomes nightmarishly hard, right? It's just one of the examples of the problem, another whole bucket of issues is security, which is, is you have these distributed clusters at scale, you gotta ensure someone's job is on the line to make sure that these security policies are configured properly. >>So this is a huge problem. I love that comment. That's not not happening on my system. It's the classic, you know, debugging mentality. Yeah. But at scale it's hard to do that with error prone. I can see that being a problem. And you guys have a solution you're launching. Can you share what Arlon is this new product? What is it all about? Talk about this new introduction. >>Yeah, absolutely. Very, very excited. You know, it's one of the projects that we've been working on for some time now because we are very passionate about this problem and just solving problems at scale in on-prem or at in the cloud or at edge environments. And what arlon is, it's an open source project, and it is a tool, it's a Kubernetes native tool for complete end to end management of not just your clusters, but your clusters. All of the infrastructure that goes within and along the site of those clusters, security policies, your middleware, plug-ins, and finally your applications. So what our LA you do in a nutshell is in a declarative way, it lets you handle the configuration and management of all of these components in at scale. >>So what's the elevator pitch simply put for what dissolves in, in terms of the chaos you guys are reigning in, what's the, what's the bumper sticker? Yeah, what >>Would it do? There's a perfect analogy that I love to reference in this context, which is think of your assembly line, you know, in a traditional, let's say, you know, an auto manufacturing factory or et cetera, and the level of efficiency at scale that that assembly line brings, right? Our line, and if you look at the logo we've designed, it's this funny little robot. And it's because when we think of online, we think of these enterprise large scale environments, you know, sprawling at scale, creating chaos because there isn't necessarily a well thought through, well structured solution that's similar to an assembly line, which is taking each component, you know, addressing them, manufacturing, processing them in a standardized way, then handing to the next stage. But again, it gets, you know, processed in a standardized way. And that's what arlon really does. That's like the deliver pitch. If you have problems of scale of managing your infrastructure, you know, that is distributed. Arlon brings the assembly line level of efficiency and consistency for >>Those. So keeping it smooth, the assembly on things are flowing. See c i CD pipe pipelining. Exactly. So that's what you're trying to simplify that ops piece for the developer. I mean, it's not really ops, it's their ops, it's coding. >>Yeah. Not just developer, the ops, the operations folks as well, right? Because developers, you know, there is, developers are responsible for one picture of that layer, which is my apps, and then maybe that middleware of applications that they interface with, but then they hand it over to someone else who's then responsible to ensure that these apps are secure properly, that they are logging, logs are being collected properly, monitoring and observability integrated. And so it solves problems for both >>Those teams. Yeah. It's DevOps. So the DevOps is the cloud needed developer's. That's right. The option teams have to kind of set policies. Is that where the declarative piece comes in? Is that why that's important? >>Absolutely. Yeah. And, and, and, and you know, ES really in introduced or elevated this declarative management, right? Because, you know, s clusters are Yeah. Or your, yeah, you know, specifications of components that go in Kubernetes are defined a declarative way, and Kubernetes always keeps that state consistent with your defined state. But when you go outside of that world of a single cluster, and when you actually talk about defining the clusters or defining everything that's around it, there really isn't a solution that does that today. And so Arlon addresses that problem at the heart of it, and it does that using existing open source well known solutions. >>And do I want to get into the benefits? What's in it for me as the customer developer? But I want to finish this out real quick and get your thoughts. You mentioned open source. Why open source? What's the, what's the current state of the product? You run the product group over at Platform nine, is it open source? And you guys have a product that's commercial? Can you explain the open source dynamic? And first of all, why open source? Yeah. And what is the consumption? I mean, open source is great, People want open source, they can download it, look up the code, but maybe wanna buy the commercial. So I'm assuming you have that thought through, can you share open source and commercial relationship? >>Yeah, I think, you know, starting with why open source? I think it's, you know, we as a company, we have, you know, one of the things that's absolutely critical to us is that we take mainstream open source technologies components and then we, you know, make them available to our customers at scale through either a SaaS model or on-prem model, right? But, so as we are a company or startup or a company that benefits, you know, in a massive way by this open source economy, it's only right, I think in my mind that we do our part of the duty, right? And contribute back to the community that feeds us. And so, you know, we have always held that strongly as one of our principles. And we have, you know, created and built independent products starting all the way with fision, which was a serverless product, you know, that we had built to various other, you know, examples that I can give. But that's one of the main reasons why opensource and also open source, because we want the community to really firsthand engage with us on this problem, which is very difficult to achieve if your product is behind a wall, you know, behind, behind a block box. >>Well, and that's, that's what the developers want too. And what we're seeing in reporting with Super Cloud is the new model of consumption is I wanna look at the code and see what's in there. That's right. And then also, if I want to use it, I'll do it. Great. That's open source, that's the value. But then at the end of the day, if I wanna move fast, that's when people buy in. So it's a new kind of freemium, I guess, business model. I guess that's the way that long. But that's, that's the benefit. Open source. This is why standards and open source is growing so fast. You have that confluence of, you know, a way for developers to try before they buy, but also actually kind of date the application, if you will. We, you know, Adrian Karo uses the dating met metaphor, you know, Hey, you know, I wanna check it out first before I get married. Right? And that's what open source, So this is the new, this is how people are selling. This is not just open source, this is how companies are selling. >>Absolutely. Yeah. Yeah. You know, I think, and you know, two things. I think one is just, you know, this, this, this cloud native space is so vast that if you, if you're building a close flow solution, sometimes there's also a risk that it may not apply to every single enterprises use cases. And so having it open source gives them an opportunity to extend it, expand it, to make it proper to their use case if they choose to do so, right? But at the same time, what's also critical to us is we are able to provide a supported version of it with an SLA that we, you know, that's backed by us, a SAS hosted version of it as well, for those customers who choose to go that route, you know, once they have used the open source version and loved it and want to take it at scale and in production and need, need, need a partner to collaborate with, who can, you know, support them for that production >>Environment. I have to ask you now, let's get into what's in it for the customer. I'm a customer. Yep. Why should I be enthused about Arla? What's in it for me? You know? Cause if I'm not enthused about it, I'm not gonna be confident and it's gonna be hard for me to get behind this. Can you share your enthusiastic view of, you know, why I should be enthused about Arlo? I'm a >>Customer. Yeah, absolutely. And so, and there's multiple, you know, enterprises that we talk to, many of them, you know, our customers, where this is a very kind of typical story that you hear, which is we have, you know, a Kubernetes distribution. It could be on premise, it could be public clouds, native Kubernetes, and then we have our C I C D pipelines that are automating the deployment of applications, et cetera. And then there's this gray zone. And the gray zone is well before you can you, your CS c D pipelines can deploy the apps. Somebody needs to do all of that groundwork of, you know, defining those clusters and yeah. You know, properly configuring them. And as these things, these things start by being done hand grown. And then as the, as you scale, what typically enterprises would do today is they will have their home homegrown DIY solutions for this. >>I mean, the number of folks that I talk to that have built Terra from automation, and then, you know, some of those key developers leave. So it's a typical open source or typical, you know, DIY challenge. And the reason that they're writing it themselves is not because they want to. I mean, of course technology is always interesting to everybody, but it's because they can't find a solution that's out there that perfectly fits the problem. And so that's that pitch. I think Ops FICO would be delighted. The folks that we've talk, you know, spoken with, have been absolutely excited and have, you know, shared that this is a major challenge we have today because we have, you know, few hundreds of clusters on ecos Amazon, and we wanna scale them to few thousands, but we don't think we are ready to do that. And this will give us the >>Ability to, Yeah, I think people are scared. Not sc I won't say scare, that's a bad word. Maybe I should say that they feel nervous because, you know, at scale small mistakes can become large mistakes. This is something that is concerning to enterprises. And, and I think this is gonna come up at co con this year where enterprises are gonna say, Okay, I need to see SLAs. I wanna see track record, I wanna see other companies that have used it. Yeah. How would you answer that question to, or, or challenge, you know, Hey, I love this, but is there any guarantees? Is there any, what's the SLAs? I'm an enterprise, I got tight, you know, I love the open source trying to free fast and loose, but I need hardened code. >>Yeah, absolutely. So, so two parts to that, right? One is Arlan leverages existing open source components, products that are extremely popular. Two specifically. One is Arlan uses Argo cd, which is probably one of the highest and used CD open source tools that's out there. Right's created by folks that are as part of into team now, you know, really brilliant team. And it's used at scale across enterprises. That's one. Second is Alon also makes use of Cluster api cappi, which is a Kubernetes sub-component, right? For lifecycle management of clusters. So there is enough of, you know, community users, et cetera, around these two products, right? Or, or, or open source projects that will find Arlan to be right up in their alley because they're already comfortable, familiar with Argo cd. Now Arlan just extends the scope of what City can do. And so that's one. And then the second part is going back to a point of the comfort. And that's where, you know, platform line has a role to play, which is when you are ready to deploy online at scale, because you've been, you know, playing with it in your DEF test environments, you're happy with what you get with it, then Platform nine will stand behind it and provide that >>Sla. And what's been the reaction from customers you've talked to Platform nine customers with, with that are familiar with, with Argo and then rlo? What's been some of the feedback? >>Yeah, I, I think the feedback's been fantastic. I mean, I can give you examples of customers where, you know, initially, you know, when you are, when you're telling them about your entire portfolio of solutions, it might not strike a card right away. But then we start talking about Arlan and, and we talk about the fact that it uses Argo adn, they start opening up, they say, We have standardized on Argo and we have built these components, homegrown, we would be very interested. Can we co-develop? Does it support these use cases? So we've had that kind of validation. We've had validation all the way at the beginning of our land before we even wrote a single line of code saying this is something we plan on doing. And the customer said, If you had it today, I would've purchased it. So it's been really great validation. >>All right. So next question is, what is the solution to the customer? If I asked you, Look it, I have, I'm so busy, my team's overworked. I got a skills gap. I don't need another project that's, I'm so tied up right now and I'm just chasing my tail. How does Platform nine help me? >>Yeah, absolutely. So I think, you know, one of the core tenets of Platform nine has always been been that we try to bring that public cloud like simplicity by hosting, you know, this in a lot of such similar tools in a SaaS hosted manner for our customers, right? So our goal behind doing that is taking away or trying to take away all of that complexity from customers' hands and offloading it to our hands, right? And giving them that full white glove treatment, as we call it. And so from a customer's perspective, one, something like arlon will integrate with what they have so they don't have to rip and replace anything. In fact, it will, even in the next versions, it may even discover your clusters that you have today and you know, give you an inventory. And that will, >>So if customers have clusters that are growing, that's a sign correct call you guys. >>Absolutely. Either they're, they have massive large clusters, right? That they wanna split into smaller clusters, but they're not comfortable doing that today, or they've done that already on say, public cloud or otherwise. And now they have management challenges. So >>Especially operationalizing the clusters, whether they want to kind of reset everything and remove things around and reconfigure Yep. And or scale out. >>That's right. Exactly. And >>You provide that layer of policy. >>Absolutely. >>Yes. That's the key value here. >>That's right. >>So policy based configuration for cluster scale up, >>Well profile and policy based declarative configuration and lifecycle management for clusters. >>If I asked you how this enables supercloud, what would you say to that? >>I think this is one of the key ingredients to super cloud, right? If you think about a super cloud environment, there's at least few key ingredients that that come to my mind that are really critical. Like they are, you know, life saving ingredients at that scale. One is having a really good strategy for managing that scale, you know, in a, going back to assembly line in a very consistent, predictable way so that our lot solves then you, you need to compliment that with the right kind of observability and monitoring tools at scale, right? Because ultimately issues are gonna happen and you're gonna have to figure out, you know, how to solve them fast. And arlon by the way, also helps in that direction, but you also need observability tools. And then especially if you're running it on the public cloud, you need some cost management tools. In my mind, these three things are like the most necessary ingredients to make Super Cloud successful. And you know, our alarm fills in >>One. Okay. So now the next level is, Okay, that makes sense. Is under the covers kind of speak under the hood. Yeah. How does that impact the app developers and the cloud native modern application workflows? Because the impact to me, seems the apps are gonna be impacted. Are they gonna be faster, stronger? I mean, what's the impact if you do all those things, as you mentioned, what's the impact of the apps? >>Yeah, the impact is that your apps are more likely to operate in production the way you expect them to, because the right checks and balances have gone through, and any discrepancies have been identified prior to those apps, prior to your customer running into them, right? Because developers run into this challenge to their, where there's a split responsibility, right? I'm responsible for my code, I'm responsible for some of these other plugins, but I don't own the stack end to end. I have to rely on my ops counterpart to do their part, right? And so this really gives them, you know, the right tooling for that. >>So this is actually a great kind of relevant point, you know, as cloud becomes more scalable, you're starting to see this fragmentation gone of the days of the full stack developer to the more specialized role. But this is a key point, and I have to ask you because if this RLO solution takes place, as you say, and the apps are gonna be stupid, they're designed to do, the question is, what did does the current pain look like of the apps breaking? What does the signals to the customer Yeah. That they should be calling you guys up into implementing Arlo, Argo and, and all the other goodness to automate? What are some of the signals? Is it downtime? Is it, is it failed apps, Is it latency? What are some of the things that Yeah, absolutely would be indications of things are effed up a little bit. Yeah. >>More frequent down times, down times that are, that take longer to triage. And so you are, you know, the, you know, your mean times on resolution, et cetera, are escalating or growing larger, right? Like we have environments of customers where they're, they have a number of folks on in the field that have to take these apps and run them at customer sites. And that's one of our partners. And they're extremely interested in this because they're the, the rate of failures they're encountering for this, you know, the field when they're running these apps on site, because the field is automating their clusters that are running on sites using their own script. So these are the kinds of challenges, and those are the pain points, which is, you know, if you're looking to reduce your meantime to resolution, if you're looking to reduce the number of failures that occur on your production site, that's one. And second, if you are looking to manage these at scale environments with a relatively small, focused, nimble ops team, which has an immediate impact on your budget. So those are, those are the signals. >>This is the cloud native at scale situation, the innovation going on. Final thought is your reaction to the idea that if the world goes digital, which it is, and the confluence of physical and digital coming together, and cloud continues to do its thing, the company becomes the application, not where it used to be supporting the business, you know, the back office and the maybe terminals and some PCs and handhelds. Now if technology's running, the business is the business. Yeah. Company's the application. Yeah. So it can't be down. So there's a lot of pressure on, on CSOs and CIOs now and boards is saying, How is technology driving the top line revenue? That's the number one conversation. Yep. Do you see that same thing? >>Yeah. It's interesting. I think there's multiple pressures at the CXO CIO level, right? One is that there needs to be that visibility and clarity and guarantee almost that, you know, that the, the technology that's, you know, that's gonna drive your top line is gonna drive that in a consistent, reliable, predictable manner. And then second, there is the constant pressure to do that while always lowering your costs of doing it, right? Especially when you're talking about, let's say retailers or those kinds of large scale vendors, they many times make money by lowering the amount that they spend on, you know, providing those goods to their end customers. So I think those, both those factors kind of come into play and the solution to all of them is usually in a very structured strategy around automation. >>Final question. What does cloudnative at scale look like to you? If all the things happen the way we want 'em to happen, The magic wand, the magic dust, what does it look like? >>What that looks like to me is a CIO sipping at his desk on coffee production is running absolutely smooth. And his, he's running that at a nimble, nimble team size of at the most, a handful of folks that are just looking after things, but things are >>Just taking care of the CIO doesn't exist. There's no ciso, they're at the beach. >>Yep. >>Thank you for coming on, sharing the cloud native at scale here on the cube. Thank you for your time. >>Fantastic. Thanks for >>Having me. Okay. I'm John Fur here for special program presentation, special programming cloud native at scale, enabling super cloud modern applications with Platform nine. Thanks for watching. Welcome back everyone to the special presentation of cloud native at scale, the cube and platform nine special presentation going in and digging into the next generation super cloud infrastructure as code and the future of application development. We're here with Bickley, who's the chief architect and co-founder of Platform nine Pick. Great to see you Cube alumni. We, we met at an OpenStack event in about eight years ago, or later, earlier when OpenStack was going. Great to see you and great to see congratulations on the success of platform nine. >>Thank you very much. >>Yeah. You guys have been at this for a while and this is really the, the, the year we're seeing the, the crossover of Kubernetes because of what happens with containers. Everyone now has realized, and you've seen what Docker's doing with the new docker, the open source Docker now just the success Exactly. Of containerization, right? And now the Kubernetes layer that we've been working on for years is coming, bearing fruit. This is huge. >>Exactly. Yes. >>And so as infrastructures code comes in, we talked to Bacar talking about Super Cloud, I met her about, you know, the new Arlon, our, our lawn, and you guys just launched the infrastructures code is going to another level, and then it's always been DevOps infrastructures code. That's been the ethos that's been like from day one, developers just code. Then you saw the rise of serverless and you see now multi-cloud or on the horizon, connect the dots for us. What is the state of infrastructure as code today? >>So I think, I think I'm, I'm glad you mentioned it, everybody or most people know about infrastructures code. But with Kubernetes, I think that project has evolved at the concept even further. And these dates, it's infrastructure is configuration, right? So, which is an evolution of infrastructure as code. So instead of telling the system, here's how I want my infrastructure by telling it, you know, do step A, B, C, and D instead with Kubernetes, you can describe your desired state declaratively using things called manifest resources. And then the system kind of magically figures it out and tries to converge the state towards the one that you specified. So I think it's, it's a even better version of infrastructures code. >>Yeah. And that really means it's developer just accessing resources. Okay. That declare, Okay, give me some compute, stand me up some, turn the lights on, turn 'em off, turn 'em on. That's kind of where we see this going. And I like the configuration piece. Some people say composability, I mean now with open source so popular, you don't have to have to write a lot of code, this code being developed. And so it's into integration, it's configuration. These are areas that we're starting to see computer science principles around automation, machine learning, assisting open source. Cuz you got a lot of code that's right in hearing software, supply chain issues. So infrastructure as code has to factor in these new dynamics. Can you share your opinion on these new dynamics of, as open source grows, the glue layers, the configurations, the integration, what are the core issues? >>I think one of the major core issues is with all that power comes complexity, right? So, you know, despite its expressive power systems like Kubernetes and declarative APIs let you express a lot of complicated and complex stacks, right? But you're dealing with hundreds if not thousands of these yamo files or resources. And so I think, you know, the emergence of systems and layers to help you manage that complexity is becoming a key challenge and opportunity in, in this space. >>That's, I wrote a LinkedIn post today was comments about, you know, hey, enterprise is a new breed. The trend of SaaS companies moving our consumer comp consumer-like thinking into the enterprise has been happening for a long time, but now more than ever, you're seeing it the old way used to be solve complexity with more complexity and then lock the customer in. Now with open source, it's speed, simplification and integration, right? These are the new dynamic power dynamics for developers. Yeah. So as companies are starting to now deploy and look at Kubernetes, what are the things that need to be in place? Because you have some, I won't say technical debt, but maybe some shortcuts, some scripts here that make it look like infrastructure is code. People have done some things to simulate or or make infrastructure as code happen. Yes. But to do it at scale Yes. Is harder. What's your take on this? What's your view? >>It's hard because there's a per proliferation of methods, tools, technologies. So for example, today it's very common for DevOps and platform engineering tools, I mean, sorry, teams to have to deploy a large number of Kubernetes clusters, but then apply the applications and configurations on top of those clusters. And they're using a wide range of tools to do this, right? For example, maybe Ansible or Terraform or bash scripts to bring up the infrastructure and then the clusters. And then they may use a different set of tools such as Argo CD or other tools to apply configurations and applications on top of the clusters. So you have this sprawl of tools. You, you also have this sprawl of configurations and files because the more objects you're dealing with, the more resources you have to manage. And there's a risk of drift that people call that where, you know, you think you have things under control, but some people from various teams will make changes here and there and then before the end of the day systems break and you have no idea of tracking them. So I think there's real need to kind of unify, simplify, and try to solve these problems using a smaller, more unified set of tools and methodologies. And that's something that we try to do with this new project. Arlon. >>Yeah. So, so we're gonna get into Arlan in a second. I wanna get into the why Arlon. You guys announced that at AR GoCon, which was put on here in Silicon Valley at the, at the community meeting by in two, they had their own little day over there at their headquarters. But before we get there, vascar, your CEO came on and he talked about Super Cloud at our in AAL event. What's your definition of super cloud? If you had to kind of explain that to someone at a cocktail party or someone in the industry technical, how would you look at the super cloud trend that's emerging? It's become a thing. What's your, what would be your contribution to that definition or the narrative? >>Well, it's, it's, it's funny because I've actually heard of the term for the first time today, speaking to you earlier today. But I think based on what you said, I I already get kind of some of the, the gist and the, the main concepts. It seems like super cloud, the way I interpret that is, you know, clouds and infrastructure, programmable infrastructure, all of those things are becoming commodity in a way. And everyone's got their own flavor, but there's a real opportunity for people to solve real business problems by perhaps trying to abstract away, you know, all of those various implementations and then building better abstractions that are perhaps business or applications specific to help companies and businesses solve real business problems. >>Yeah, I remember that's a great, great definition. I remember, not to date myself, but back in the old days, you know, IBM had a proprietary network operating system, so of deck for the mini computer vendors, deck net and SNA respectively. But T C P I P came out of the osi, the open systems interconnect and remember, ethernet beat token ring out. So not to get all nerdy for all the young kids out there, look, just look up token ring, you'll see, you've probably never heard of it. It's IBM's, you know, connection for the internet at the, the layer two is Amazon, the ethernet, right? So if T C P I P could be the Kubernetes and the container abstraction that made the industry completely change at that point in history. So at every major inflection point where there's been serious industry change and wealth creation and business value, there's been an abstraction Yes. Somewhere. Yes. What's your reaction to that? >>I think this is, I think a saying that's been heard many times in this industry and, and I forgot who originated it, but I think that the saying goes like, there's no problem that can't be solved with another layer of indirection, right? And we've seen this over and over and over again where Amazon and its peers have inserted this layer that has simplified, you know, computing and, and infrastructure management. And I believe this trend is going to continue, right? The next set of problems are going to be solved with these insertions of additional abstraction layers. I think that that's really a, yeah, it's gonna >>Continue. It's interesting. I just, when I wrote another post today on LinkedIn called the Silicon Wars AMD stock is down arm has been on a rise. We remember pointing for many years now that arm's gonna be hugely, it has become true. If you look at the success of the infrastructure as a service layer across the clouds, Azure, aws, Amazon's clearly way ahead of everybody. The stuff that they're doing with the silicon and the physics and the, the atoms, the pro, you know, this is where the innovation, they're going so deep and so strong at ISAs, the more that they get that gets come on, they have more performance. So if you're an app developer, wouldn't you want the best performance and you'd wanna have the best abstraction layer that gives you the most ability to do infrastructures, code or infrastructure for configuration, for provisioning, for managing services. And you're seeing that today with service MeSHs, a lot of action going on in the service mesh area in in this community of, of co con, which will be a covering. So that brings up the whole what's next? You guys just announced our lawn at Argo Con, which came out of Intuit. We've had Mariana Tessel at our super cloud event. She's the cto, you know, they're all in the cloud. So they contributed that project. Where did Arlon come from? What was the origination? What's the purpose? Why our lawn, why this announcement? >>Yeah, so the, the inception of the project, this was the result of us realizing that problem that we spoke about earlier, which is complexity, right? With all of this, these clouds, these infrastructure, all the variations around and, you know, compute storage networks and the proliferation of tools we talked about the Ansibles and Terraforms and Kubernetes itself. You can, you can think of that as another tool, right? We saw a need to solve that complexity problem, and especially for people and users who use Kubernetes at scale. So when you have, you know, hundreds of clusters, thousands of applications, thousands of users spread out over many, many locations, there, there needs to be a system that helps simplify that management, right? So that means fewer tools, more expressive ways of describing the state that you want and more consistency. And, and that's why, you know, we built our lawn and we built it recognizing that many of these problems or sub problems have already been solved. So Arlon doesn't try to reinvent the wheel, it instead rests on the shoulders of several giants, right? So for example, Kubernetes is one building block, GI ops, and Argo CD is another one, which provides a very structured way of applying configuration. And then we have projects like cluster API and cross plane, which provide APIs for describing infrastructure. So arlon takes all of those building blocks and builds a thin layer, which gives users a very expressive way of defining configuration and desired state. So that's, that's kind of the inception of, And >>What's the benefit of that? What does that give the, what does that give the developer, the user, in this case, >>The developers, the, the platform engineer, team members, the DevOps engineers, they get a a ways to provision not just infrastructure and clusters, but also applications and configurations. They get a way, a system for provisioning, configuring, deploying, and doing life cycle management in a, in a much simpler way. Okay. Especially as I said, if you're dealing with a large number of applications. >>So it's like an operating fabric, if you will. Yes. For them. Okay, so let's get into what that means for up above and below the the, this abstraction or thin layer below as the infrastructure. We talked a lot about what's going on below that. Yeah. Above our workloads. At the end of the day, you know, I talk to CXOs and IT folks that are now DevOps engineers. They care about the workloads and they want the infrastructures code to work. They wanna spend their time getting in the weeds, figuring out what happened when someone made a push that that happened or something happened. They need observability and they need to, to know that it's working. That's right. And is my workloads running effectively? So how do you guys look at the workload side of it? Cuz now you have multiple workloads on these fabric, >>Right? So workloads, so Kubernetes has defined kind of a standard way to describe workloads and you can, you know, tell Kubernetes, I want to run this container this particular way, or you can use other projects that are in the Kubernetes cloud native ecosystem like K native, where you can express your application in more at a higher level, right? But what's also happening is in addition to the workloads, DevOps and platform engineering teams, they need to very often deploy the applications with the clusters themselves. Clusters are becoming this commodity. It's, it's becoming this host for the application and it kind of comes bundled with it. In many cases it is like an appliance, right? So DevOps teams have to provision clusters at a really incredible rate and they need to tear them down. Clusters are becoming more, >>It's kinda like an EC two instance, spin up a cluster. We very, people used words like that. That's >>Right. And before arlon you kind of had to do all of that using a different set of tools as, as I explained. So with Armon you can kind of express everything together. You can say I want a cluster with a health monitoring stack and a logging stack and this ingress controller and I want these applications and these security policies. You can describe all of that using something we call a profile. And then you can stamp out your app, your applications and your clusters and manage them in a very, so >>Essentially standard creates a mechanism. Exactly. Standardized, declarative kind of configurations. And it's like a playbook. You deploy it. Now what's there is between say a script like I'm, I have scripts, I could just automate scripts >>Or yes, this is where that declarative API and infrastructures configuration comes in, right? Because scripts, yes you can automate scripts, but the order in which they run matters, right? They can break, things can break in the middle and, and sometimes you need to debug them. Whereas the declarative way is much more expressive and powerful. You just tell the system what you want and then the system kind of figures it out. And there are these things about controllers which will in the background reconcile all the state to converge towards your desire. It's a much more powerful, expressive and reliable way of getting things done. >>So infrastructure has configuration is built kind of on, it's as super set of infrastructures code because it's >>An evolution. >>You need edge's code, but then you can configure the code by just saying do it. You basically declaring and saying Go, go do that. That's right. Okay, so, alright, so cloud native at scale, take me through your vision of what that means. Someone says, Hey, what does cloud native at scale mean? What's success look like? How does it roll out in the future as you, not future next couple years? I mean people are now starting to figure out, okay, it's not as easy as it sounds. Could be nice, it has value. We're gonna hear this year coan a lot of this. What does cloud native at scale >>Mean? Yeah, there are different interpretations, but if you ask me, when people think of scale, they think of a large number of deployments, right? Geographies, many, you know, supporting thousands or tens or millions of, of users there, there's that aspect to scale. There's also an equally important a aspect of scale, which is also something that we try to address with Arran. And that is just complexity for the people operating this or configuring this, right? So in order to describe that desired state and in order to perform things like maybe upgrades or updates on a very large scale, you want the humans behind that to be able to express and direct the system to do that in, in relatively simple terms, right? And so we want the tools and the abstractions and the mechanisms available to the user to be as powerful but as simple as possible. So there's, I think there's gonna be a number and there have been a number of CNCF and cloud native projects that are trying to attack that complexity problem as well. And Arlon kind of falls in in that >>Category. Okay, so I'll put you on the spot road that CubeCon coming up and obviously this will be shipping this segment series out before. What do you expect to see at Coan this year? What's the big story this year? What's the, what's the most important thing happening? Is it in the open source community and also within a lot of the, the people jogging for leadership. I know there's a lot of projects and still there's some white space in the overall systems map about the different areas get run time and there's ability in all these different areas. What's the, where's the action? Where, where's the smoke? Where's the fire? Where's the piece? Where's the tension? >>Yeah, so I think one thing that has been happening over the past couple of cons and I expect to continue and, and that is the, the word on the street is Kubernetes is getting boring, right? Which is good, right? >>Boring means simple. >>Well, well >>Maybe, >>Yeah, >>Invisible, >>No drama, right? So, so the, the rate of change of the Kubernetes features and, and all that has slowed but in, in a, in a positive way. But there's still a general sentiment and feeling that there's just too much stuff. If you look at a stack necessary for hosting applications based on Kubernetes, there are just still too many moving parts, too many components, right? Too much complexity. I go, I keep going back to the complexity problem. So I expect Cube Con and all the vendors and the players and the startups and the people there to continue to focus on that complexity problem and introduce further simplifications to, to the stack. >>Yeah. Vic, you've had an storied career, VMware over decades with them obviously in 12 years with 14 years or something like that. Big number co-founder here at Platform. Now you guys have been around for a while at this game. We, man, we talked about OpenStack, that project you, we interviewed at one of their events. So OpenStack was the beginning of that, this new revolution. And I remember the early days it was, it wasn't supposed to be an alternative to Amazon, but it was a way to do more cloud cloud native. I think we had a cloud ERO team at that time. We would to joke we, you know, about, about the dream. It's happening now, now at Platform nine. You guys have been doing this for a while. What's the, what are you most excited about as the chief architect? What did you guys double down on? What did you guys tr pivot from or two, did you do any pivots? Did you extend out certain areas? Cuz you guys are in a good position right now, a lot of DNA in Cloud native. What are you most excited about and what does Platform nine bring to the table for customers and for people in the industry watching this? >>Yeah, so I think our mission really hasn't changed over the years, right? It's been always about taking complex open source software because open source software, it's powerful. It solves new problems, you know, every year and you have new things coming out all the time, right? OpenStack was an example when the Kubernetes took the world by storm. But there's always that complexity of, you know, just configuring it, deploying it, running it, operating it. And our mission has always been that we will take all that complexity and just make it, you know, easy for users to consume regardless of the technology, right? So the successor to Kubernetes, you know, I don't have a crystal ball, but you know, you have some indications that people are coming up of new and simpler ways of running applications. There are many projects around there who knows what's coming next year or the year after that. But platform will a, platform nine will be there and we will, you know, take the innovations from the the community. We will contribute our own innovations and make all of those things very consumable to customers. >>Simpler, faster, cheaper. Exactly. Always a good business model technically to make that happen. Yes. Yeah, I think the, the reigning in the chaos is key, you know, Now we have now visibility into the scale. Final question before we depart this segment. What is at scale, how many clusters do you see that would be a watermark for an at scale conversation around an enterprise? Is it workloads we're looking at or, or clusters? How would you, Yeah, how would you describe that? When people try to squint through and evaluate what's a scale, what's the at scale kind of threshold? >>Yeah. And, and the number of clusters doesn't tell the whole story because clusters can be small in terms of the number of nodes or they can be large. But roughly speaking when we say, you know, large scale cluster deployments, we're talking about maybe hundreds, two thousands. >>Yeah. And final final question, what's the role of the hyperscalers? You got AWS continuing to do well, but they got their core ias, they got a PAs, they're not too too much putting a SaaS out there. They have some SaaS apps, but mostly it's the ecosystem. They have marketplaces doing over $2 billion billions of transactions a year and, and it's just like, just sitting there. It hasn't really, they're now innovating on it, but that's gonna change ecosystems. What's the role the cloud play in the cloud native of its scale? >>The, the hyperscalers, >>Yeahs Azure, Google. >>You mean from a business perspective? Yeah, they're, they have their own interests that, you know, that they're, they will keep catering to, they, they will continue to find ways to lock their users into their ecosystem of services and, and APIs. So I don't think that's gonna change, right? They're just gonna keep, >>Well they got great I performance, I mean from a, from a hardware standpoint, yes, that's gonna be key, right? >>Yes. I think the, the move from X 86 being the dominant way and platform to run workloads is changing, right? That, that, that, that, and I think the, the hyperscalers really want to be in the game in terms of, you know, the the new risk and arm ecosystems and the platforms. >>Yeah, not joking aside, Paul Morritz, when he was the CEO of VMware, when he took over once said, I remember our first year doing the cube. Oh the cloud is one big distributed computer, it's, it's hardware and he got software and you got middleware and he kind over, well he's kind of tongue in cheek, but really you're talking about large compute and sets of services that is essentially a distributed computer. >>Yes, >>Exactly. It's, we're back on the same game. Vic, thank you for coming on the segment. Appreciate your time. This is cloud native at scale special presentation with Platform nine. Really unpacking super cloud Arlon open source and how to run large scale applications on the cloud Cloud Native Phil for developers and John Furrier with the cube. Thanks for Washington. We'll stay tuned for another great segment coming right up. Hey, welcome back everyone to Super Cloud 22. I'm John Fur, host of the Cuba here all day talking about the future of cloud. Where's it all going? Making it super multi-cloud clouds around the corner and public cloud is winning. Got the private cloud on premise and edge. Got a great guest here, Vascar Gorde, CEO of Platform nine, just on the panel on Kubernetes. An enabler blocker. Welcome back. Great to have you on. >>Good to see you >>Again. So Kubernetes is a blocker enabler by, with a question mark. I put on on that panel was really to discuss the role of Kubernetes. Now great conversation operations is impacted. What's interest thing about what you guys are doing at Platform nine? Is your role there as CEO and the company's position, kind of like the world spun into the direction of Platform nine while you're at the helm? Yeah, right. >>Absolutely. In fact, things are moving very well and since they came to us, it was an insight to call ourselves the platform company eight years ago, right? So absolutely whether you are doing it in public clouds or private clouds, you know, the application world is moving very fast in trying to become digital and cloud native. There are many options for you do on the infrastructure. The biggest blocking factor now is having a unified platform. And that's what we, we come into, >>Patrick, we were talking before we came on stage here about your background and we were gonna talk about the glory days in 2000, 2001, when the first as piece application service providers came out, kind of a SaaS vibe, but that was kind of all kind of cloudlike. >>It wasn't, >>And and web services started then too. So you saw that whole growth. Now, fast forward 20 years later, 22 years later, where we are now, when you look back then to here and all the different cycles, >>I, in fact you, you know, as we were talking offline, I was in one of those ASPs in the year 2000 where it was a novel concept of saying we are providing a software and a capability as a service, right? You sign up and start using it. I think a lot has changed since then. The tooling, the tools, the technology has really skyrocketed. The app development environment has really taken off exceptionally well. There are many, many choices of infrastructure now, right? So I think things are in a way the same but also extremely different. But more importantly now for any company, regardless of size, to be a digital native, to become a digital company is extremely mission critical. It's no longer a nice to have everybody's in the journey somewhere. >>Everyone is going digital transformation here. Even on a so-called downturn recession that's upcoming inflation's here. It's interesting. This is the first downturn in the history of the world where the hyperscale clouds have been pumping on all cylinders as an economic input. And if you look at the tech trends, GDPs down, but not tech. >>Nope. >>Cuz the pandemic showed everyone digital transformation is here and more spend and more growth is coming even in, in tech. So this is a unique factor which proves that that digital transformation's happening and company, every company will need a super cloud. >>Everyone, every company, regardless of size, regardless of location, has to become modernize their infrastructure. And modernizing Infras infrastructure is not just some new servers and new application tools, It's your approach, how you're serving your customers, how you're bringing agility in your organization. I think that is becoming a necessity for every enterprise to survive. >>I wanna get your thoughts on Super Cloud because one of the things Dave Ante and I want to do with Super Cloud and calling it that was we, I, I personally, and I know Dave as well, he can, I'll speak from, he can speak for himself. We didn't like multi-cloud. I mean not because Amazon said don't call things multi-cloud, it just didn't feel right. I mean everyone has multiple clouds by default. If you're running productivity software, you have Azure and Office 365. But it wasn't truly distributed. It wasn't truly decentralized, it wasn't truly cloud enabled. It didn't, it felt like they're not ready for a market yet. Yet public clouds booming on premise. Private cloud and Edge is much more on, you know, more, more dynamic, more real. >>Yeah. I think the reason why we think super cloud is a better term than multi-cloud. Multi-cloud are more than one cloud, but they're disconnected. Okay, you have a productivity cloud, you have a Salesforce cloud, you may have, everyone has an internal cloud, right? So, but they're not connected. So you can say okay, it's more than one cloud. So it's you know, multi-cloud. But super cloud is where you are actually trying to look at this holistically. Whether it is on-prem, whether it is public, whether it's at the edge, it's a store at the branch. You are looking at this as one unit. And that's where we see the term super cloud is more applicable because what are the qualities that you require if you're in a super cloud, right? You need choice of infrastructure, you need, but at the same time you need a single pain, a single platform for you to build your innovations on regardless of which cloud you're doing it on, right? So I think Super Cloud is actually a more tightly integrated orchestrated management philosophy we think. >>So let's get into some of the super cloud type trends that we've been reporting on. Again, the purpose of this event is to, as a pilots, to get the conversations flowing with with the influencers like yourselves who are running companies and building products and the builders, Amazon and Azure are doing extremely well. Google's coming up in third cloudworks in public cloud. We see the use cases on premises use cases. Kubernetes has been an interesting phenomenon because it's become from the developer side a little bit, but a lot of ops people love Kubernetes. It's really more of an ops thing. You mentioned OpenStack earlier. Kubernetes kind of came out of that open stack. We need an orchestration and then containers had a good shot with, with Docker. They re pivoted the company. Now they're all in an open source. So you got containers booming and Kubernetes as a new layer there. What's the, what's the take on that? What does that really mean? Is that a new defacto enabler? It >>Is here. It's for here for sure. Every enterprise somewhere else in the journey is going on. And you know, most companies are, 70 plus percent of them have won two, three container based, Kubernetes based applications now being rolled out. So it's very much here, it is in production at scale by many customers. And the beauty of it is, yes, open source, but the biggest gating factor is the skill set. And that's where we have a phenomenal engineering team, right? So it's, it's one thing to buy a tool >>And just be clear, you're a managed service for Kubernetes. >>We provide, provide a software platform for cloud acceleration as a service and it can run anywhere. It can run in public private. We have customers who do it in truly multi-cloud environments. It runs on the edge, it runs at this in stores are thousands of stores in a retailer. So we provide that and also for specific segments where data sovereignty and data residency are key regulatory reasons. We also un OnPrem as an air gap version. >>Can you give an example on how you guys are deploying your platform to enable a super cloud experience for your >>Customer? Right. So I'll give you two different examples. One is a very large networking company, public networking company. They have, I dunno, hundreds of products, hundreds of r and d teams that are building different, different products. And if you look at few years back, each one was doing it on a different platforms but they really needed to bring the agility and they worked with us now over three years where we are their build test dev pro platform where all their products are built on, right? And it has dramatically increased their agility to release new products. Number two, it actually is a light out operation. In fact the customer says like, like the Maytag service person cuz we provide it as a service and it barely takes one or two people to maintain it for them. >>So it's kinda like an SRE vibe. One person managing a >>Large 4,000 engineers building infrastructure >>On their tools, >>Whatever they want on their tools. They're using whatever app development tools they use, but they use our platform. >>What benefits are they seeing? Are they seeing speed? >>Speed, definitely. Okay. Definitely they're speeding. Speed uniformity because now they're building able to build, so their customers who are using product A and product B are seeing a similar set of tools that are being used. >>So a big problem that's coming outta this super cloud event that we're, we're seeing and we've heard it all here, ops and security teams cuz they're kind of too part of one theme, but ops and security specifically need to catch up speed wise. Are you delivering that value to ops and security? Right. >>So we, we work with ops and security teams and infrastructure teams and we layer on top of that. We have like a platform team. If you think about it, depending on where you have data centers, where you have infrastructure, you have multiple teams, okay, but you need a unified platform. Who's your buyer? Our buyer is usually, you know, the product divisions of companies that are looking at or the CTO would be a buyer for us functionally cio definitely. So it it's, it's somewhere in the DevOps to infrastructure. But the ideal one we are beginning to see now many large corporations are really looking at it as a platform and saying we have a platform group on which any app can be developed and it is run on any infrastructure. So the platform engineering teams, >>You working two sides of that coin. You've got the dev side and then >>And then infrastructure >>Side side, okay. >>Another customer like give you an example, which I would say is kind of the edge of the store. So they have thousands of stores. Retail, retail, you know food retailer, right? They have thousands of stores that are on the globe, 50,000, 60,000. And they really want to enhance the customer experience that happens when you either order the product or go into the store and pick up your product or buy or browse or sit there. They have applications that were written in the nineties and then they have very modern AIML applications today. They want something that will not have to send an IT person to install a rack in the store or they can't move everything to the cloud because the store operations has to be local. The menu changes based on, It's a classic edge. It's classic edge. Yeah. Right. They can't send it people to go install rack access servers then they can't sell software people to go install the software and any change you wanna put through that, you know, truck roll. So they've been working with us where all they do is they ship, depending on the size of the store, one or two or three little servers with instructions that >>You, you say little servers like how big one like a net box box, like a small little >>Box and all the person in the store has to do like what you and I do at home and we get a, you know, a router is connect the power, connect the internet and turn the switch on. And from there we pick it up. >>Yep. >>We provide the operating system, everything and then the applications are put on it. And so that dramatically brings the velocity for them. They manage >>Thousands of them. True plug and play >>Two, plug and play thousands of stores. They manage it centrally. We do it for them, right? So, so that's another example where on the edge then we have some customers who have both a large private presence and one of the public clouds. Okay. But they want to have the same platform layer of orchestration and management that they can use regardless of the location. So >>You guys got some success. Congratulations. Got some traction there. It's awesome. The question I want to ask you is that's come up is what is truly cloud native? Cuz there's lift and shift of the cloud >>That's not cloud native. >>Then there's cloud native. Cloud native seems to be the driver for the super cloud. How do you talk to customers? How do you explain when someone says what's cloud native, what isn't cloud native? >>Right. Look, I think first of all, the best place to look at what is the definition and what are the attributes and characteristics of what is truly a cloud native, is CNC foundation. And I think it's very well documented where you, well >>Con of course Detroit's >>Coming here, so, so it's already there, right? So, so we follow that very closely, right? I think just lifting and shifting your 20 year old application onto a data center somewhere is not cloud native. Okay? You can't put to cloud native, you have to rewrite and redevelop your application and business logic using modern tools. Hopefully more open source and, and I think that's what Cloudnative is and we are seeing a lot of our customers in that journey. Now everybody wants to be cloudnative, but it's not that easy, okay? Because it's, I think it's first of all, skill set is very important. Uniformity of tools that there's so many tools there. Thousands and thousands of tools you could spend your time figuring out which tool to use. Okay? So I think the complexities there, but the business benefits of agility and uniformity and customer experience are truly them. >>And I'll give you an example. I don't know how clear native they are, right? And they're not a customer of ours, but you order pizzas, you do, right? If you just watch the pizza industry, how dominoes actually increase their share and mind share and wallet share was not because they were making better pizzas or not, I don't know anything about that, but the whole experience of how you order, how you watch what's happening, how it's delivered. There were a pioneer in it. To me, those are the kinds of customer experiences that cloud native can provide. >>Being agility and having that flow to the application changes what the expectations of the, for the customer. >>Customer, the customer's expectations change, right? Once you get used to a better customer experience, you learn >>Best car. To wrap it up, I wanna just get your perspective again. One of the benefits of chatting with you here and having you part of the Super Cloud 22 is you've seen many cycles, you have a lot of insights. I want to ask you, given your career where you've been and what you've done and now the CEO platform nine, how would you compare what's happening now with other inflection points in the industry? And you've been, again, you've been an entrepreneur, you sold your company to Oracle, you've been seeing the big companies, you've seen the different waves. What's going on right now put into context this moment in time around Super >>Cloud. Sure. I think as you said, a lot of battles. Cars being been, been in an asp, been in a realtime software company, being in large enterprise software houses and a transformation. I've been on the app side, I did the infrastructure right and then tried to build our own platforms. I've gone through all of this myself with a lot of lessons learned in there. I think this is an event which is happening now for companies to go through to become cloud native and digitalize. If I were to look back and look at some parallels of the tsunami that's going on is a couple of paddles come to me. One is, think of it, which was forced to honors like y2k. Everybody around the world had to have a plan, a strategy, and an execution for y2k. I would say the next big thing was e-commerce. I think e-commerce has been pervasive right across all industries. >>And disruptive. >>And disruptive, extremely disruptive. If you did not adapt and adapt and accelerate your e-commerce initiative, you were, it was an existence question. Yeah. I think we are at that pivotal moment now in companies trying to become digital and cloudnative that know that is what I see >>Happening there. I think that that e-commerce was interesting and I think just to riff with you on that is that it's disrupting and refactoring the business models. I think that is something that's coming out of this is that it's not just completely changing the game, it's just changing how you operate, >>How you think, and how you operate. See, if you think about the early days of eCommerce, just putting up a shopping cart didn't made you an eCommerce or an E retailer or an e e customer, right? Or so. I think it's the same thing now is I think this is a fundamental shift on how you're thinking about your business. How are you gonna operate? How are you gonna service your customers? I think it requires that just lift and shift is not gonna work. >>Mascar, thank you for coming on, spending the time to come in and share with our community and being part of Super Cloud 22. We really appreciate, we're gonna keep this open. We're gonna keep this conversation going even after the event, to open up and look at the structural changes happening now and continue to look at it in the open in the community. And we're gonna keep this going for, for a long, long time as we get answers to the problems that customers are looking for with cloud cloud computing. I'm Sean Feer with Super Cloud 22 in the Cube. Thanks for watching. >>Thank you. Thank you, John. >>Hello. Welcome back. This is the end of our program, our special presentation with Platform nine on cloud native at scale, enabling the super cloud. We're continuing the theme here. You heard the interviews Super Cloud and its challenges, new opportunities around the solutions around like Platform nine and others with Arlon. This is really about the edge situations on the internet and managing the edge multiple regions, avoiding vendor lock in. This is what this new super cloud is all about. The business consequences we heard and and the wide ranging conversations around what it means for open source and the complexity problem all being solved. I hope you enjoyed this program. There's a lot of moving pieces and things to configure with cloud native install, all making it easier for you here with Super Cloud and of course Platform nine contributing to that. Thank you for watching.

(upbeat music) >> Welcome back everyone to theCUBEs live coverage in San Francisco for VMware Explorer. I'm John Furrier with my host, Dave Vellante. Two sets, three days of wall to wall coverage. This is day two. We got a great guest, Scott Baker, CMO at IBM, VP of Infrastructure at IBM. Great to see you. Thanks for coming on. >> Hey, good to see you guys as well. It's always a pleasure. >> ()Good time last night at your event? >> Great time last night. >> It was really well-attended. IBM always has the best food so that was good and great props, magicians, and it was really a lot of fun, comedians. Good job. >> Yeah, I'm really glad you came on. One of the things we were chatting, before we came on camera was, how much changed. We've been covering IBM storage days, back on the Edge days, and they had the event. Storage is the center of all the conversations, cyber security- >> ()Right? >> ... But it's not just pure cyber. It's still important there. And just data and the role of multi-cloud and hybrid cloud and data and security are the two hottest areas, that I won't say unresolved, but are resolving themselves. And people are talking. It's the most highly discussed topics. >> Right. >> ()Those two areas. And it's just all on storage. >> Yeah, it sure does. And in fact, what I would even go so far as to say is, people are beginning to realize the importance that storage plays, as the data custodian for the organization. Right? Certainly you have humans that are involved in setting strategies, but ultimately whatever those policies are that get applied, have to be applied to a device that must act as a responsible custodian for the data it holds. >> So what's your role at IBM and the infrastructure team? Storage is one only one of the areas. >> ()Right. >> You're here at VMware Explore. What's going on here with IBM? Take us through what you're doing there at IBM, and then here at VMware. What's the conversations? >> Sure thing. I have the distinct pleasure to run both product marketing and strategy for our storage line. That's my primary focus, but I also have responsibility for the mainframe software, so the Z System line, as well as our Power server line, and our technical support organization, or at least the services side of our technical support organization. >> And one of the things that's going on here, lot of noise going on- >> Is that a bird flying around? >> Yeah >> We got fire trucks. What's changed? 'Cause right now with VMware, you're seeing what they're doing. They got the Platform, Under the Hood, Developer focus. It's still an OPS game. What's the relationship with VMware? What are you guys talking about here? What are some of the conversations you're having here in San Francisco? >> Right. Well, IBM has been a partner with VMware for at least the last 20 years. And VMware does, I think, a really good job about trying to create a working space for everyone to be an equal partner with them. It can be challenging too, if you want to sort of throw out your unique value to a customer. So one of the things that we've really been working on is, how do we partner much stronger? When we look at the customers that we support today, what they're looking for isn't just a solid product. They're looking for a solid ecosystem partnership. So we really lean in on that 20 years of partnership experience that we have with IBM. So one of the things that we announced was actually being one of the first VMware partners to bring both a technical innovation delivery mechanism, as well as technical services, alongside VMware technologies. I would say that was one of the first things that we really leaned in on, as we looked out at what customers are expecting from us. >> So I want to zoom out a little bit and talk about the industry. I've been following IBM since the early 1980s. It's trained in the mainframe market, and so we've seen, a lot of things you see come back to the mainframe, but we won't go there. But prior to Arvind coming on, it seemed like, okay, storage, infrastructure, yeah it's good business, and we'll let it throw off some margin. That's fine. But it's all about services and software. Okay, great. With Arvind, and obviously Red Hat, the whole focus shift to hybrid. We were talking, I think yesterday, about okay, where did we first hear hybrid? Obviously we heard that a lot from VMware. I heard it actually first, early on anyway, from IBM, talking hybrid. Some of the storage guys at the time. Okay, so now all of a sudden there's the realization that to make hybrid work, you need software and hardware working together. >> () Right. So it's now a much more fundamental part of the conversation. So when you look out, Scott, at the trends you're seeing in the market, when you talk to customers, what are you seeing and how is that informing your strategy, and how are you bringing together all the pieces? >> That's a really awesome question because it always depends on who, within the organization, you're speaking to. When you're inside the data center, when you're talking to the architects and the administrators, they understand the value in the necessity for a hybrid-cloud architecture. Something that's consistent. On The Edge, On-Prem, in the cloud. Something that allows them to expand the level of control that they have, without having to specialize on equipment and having to redo things as you move from one medium to the next. As you go upstack in that conversation, what I find really interesting is how leaders are beginning to realize that private cloud or on-prem, multi cloud, super cloud, whatever you call it, whatever's in the middle, those are just deployment mechanisms. What they're coming to understand is it's the applications and the data that's hybrid. And so what they're looking for IBM to deliver, and something that we've really invested in on the infrastructure side is, how do we create bidirectional application mobility? Making it easy for organizations, whether they're using containers, virtual machines, just bare metal, how do they move that data back and forth as they need to, and not just back and forth from on-prem to the cloud, but effectively, how do they go from cloud to cloud? >> Yeah. One of the things I noticed is your pin, says I love AI, with the I next to IBM and get all these (indistinct) in there. AI, remember the quote from IBM is, "You can't have AI without IA." Information architect. >> () Right. >> () Rob Thomas. >> Rob Thomas (indistinct) the sound bites. But that brings up the point about machine learning and some of these things that are coming down the like, how is your area devolving the smarts and the brains around leveraging the AI in the systems itself? We're hearing more and more softwares being coded into the hardware. You see Silicon advances. All this is kind of, not changing it, but bringing back the urgency of, hardware matters. >> That's right. >> () At the same time, it's still software too. >> That's right. So let's connect a couple of dots here. We talked a little bit about the importance of cyber resiliency, and let's talk about a little bit on how we use AI in that matter. So, if you look at the direct flash modules that are in the market today, or the SSDs that are in the market today, just standard-capacity drives. If you look at the flash core modules that IBM produces, we actually treat that as a computational storage offering, where you store the data, but it's got intelligence built into the processor, to offload some of the responsibilities of the controller head. The ability to do compression, single (indistinct), deduplication, you name it. But what if you can apply AI at the controller level, so that signals that are being derived by the flash core module itself, that look anomalous, can be handed up to an intelligence to say, "Hey, I'm all of a sudden getting encrypted rights from a host that I've never gotten encrypted rights for. Maybe this could be a problem." And then imagine if you connect that inferencing engine to the rest of the IBM portfolio, "Hey, Qradar. Hey IBM Guardian. What's going on on the network? Can we see some correlation here?" So what you're going to see IBM infrastructure continue to do is invest heavily into entropy and the ability to measure IO characteristics with respect to anomalous behavior and be able to report against that. And the trick here, because the array technically doesn't know if it's under attack or if the host just decided to turn on encryption, the trick here is using the IBM product relationships, and ecosystem relationships, to do correlation of data to determine what's actually happening, to reduce your false positives. >> And have that pattern of data too. It's all access to data too. Big time. >> That's right. >> And that innovation comes out of IBM R&D? Does it come out of the product group? Is it IBM research that then trickles its way in? Is it the storage innovation? Where's that come from? Where's that bubble up? That partnership? >> Well, I got to tell you, it doesn't take very long in this industry before your counterpart, your competitor, has a similar feature. Right? So we're always looking for, what's the next leg? What's the next advancement that we can make? We knew going into this process, that we had plenty of computational power that was untapped on the FPGA, the processor running on the flash core module. Right? So we thought, okay, well, what should we do next? And we thought, "Hey, why not just set this thing up to start watching IO patterns, do calculations, do trending, and report that back?" And what's great about what you brought up too, John, is that it doesn't stay on the box. We push that upstack through the AIOPS architecture. So if you're using Turbonomic, and you want to look applications stack down, to know if you've got threat potential, or your attack surface is open, you can make some changes there. If you want to look at it across your infrastructure landscape with a storage insight, you could do that. But our goal here is to begin to make the machine smarter and aware of impacts on the data, not just on the data they hold onto, but usage, to move it into the appropriate tier, different write activities or read activities or delete activities that could indicate malicious efforts that are underway, and then begin to start making more autonomous, how about managed autonomous responses? I don't want to turn this into a, oh, it's smart, just turn it on and walk away and it's good. I don't know that we'll ever get there just yet, but the important thing here is, what we're looking at is, how do we continually safeguard and protect that data? And how do we drive features in the box that remove more and more of the day to day responsibility from the administrative staff, who are technically hired really, to service and solve for bigger problems in the enterprise, not to be a specialist and have to manage one box at a time. >> Dave mentioned Arvind coming on, the new CEO of IBM, and the Red Hat acquisition and that change, I'd like to get your personal perspective, or industry perspective, so take your IBM-hat off for a second and put the Scott-experience-in-the-industry hat on, the transformation at the customer level right now is more robust, to use that word. I don't want to say chaotic, but it is chaotic. They say chaos in the cloud here at VM, a big part of their messaging, but it's changing the business model, how things are consumed. You're seeing new business models emerge. So IBM has this lot of storage old systems, you're transforming, the company's transforming. Customers are also transforming, so that's going to change how people market products. >> () Right. >> For example, we know that developers and DevOps love self-service. Why? Because they don't want to install it. Let me go faster. And they want to get rid of it, doesn't work. Storage is infrastructure and still software, so how do you see, in your mind's eye, with all your experience, the vision of how to market products that are super important, that are infrastructure products, that have to be put into play, for really new architectures that are going to transform businesses? It's not as easy as saying, "Oh, we're going to go to market and sell something." The old way. >> () Right. >> This shifting happening is, I don't think there's an answer yet, but I want to get your perspective on that. Customers want to hear the storage message, but it might not be speeds and fees. Maybe it is. Maybe it's not. Maybe it's solutions. Maybe it's security. There's multiple touch points now, that you're dealing with at IBM for the customer, without becoming just a storage thing or just- >> () Right. >> ... or just hardware. I mean, hardware does matter, but what's- >> Yeah, no, you're absolutely right, and I think what complicates that too is, if you look at the buying centers around a purchase decision, that's expanded as well, and so as you engage with a customer, you have to be sensitive to the message that you're telling, so that it touches the needs or the desires of the people that are all sitting around the table. Generally what we like to do when we step in and we engage, isn't so much to talk about the product. At some point, maybe later in the engagements, the importance of speeds, feeds, interconnectivity, et cetera, those do come up. Those are a part of the final decision, but early on it's really about outcomes. What outcomes are you delivering? This idea of being able to deliver, if you use the term zero trust or cyber-resilient storage capability as a part of a broader security architecture that you're putting into place, to help that organization, that certainly comes up. We also hear conversations with customers about, or requests from customers about, how do the parts of IBM themselves work together? Right? And I think a lot of that, again, continues to speak to what kind of outcome are you going to give to me? Here's a challenge that I have. How are you helping me overcome it? And that's a combination of IBM hardware, software, and the services side, where we really have an opportunity to stand out. But the thing that I would tell you, that's probably most important is, the engagement that we have up and down the stack in the market perspective, always starts with, what's the outcome that you're going to deliver for me? And then that drags with it the story that would be specific to the gear. >> Okay, so let's say I'm a customer, and I'm buying it to zero trust architecture, but it's going to be somewhat of a long term plan, but I have a tactical need. I'm really nervous about Ransomware, and I don't feel as though I'm prepared, and I want an outcome that protects me. What are you seeing? Are you seeing any patterns? I know it's going to vary, but are you seeing any patterns, in terms of best practice to protect me? >> Man, the first thing that we wanted to do at IBM is divorce ourselves from the company as we thought through this. And what I mean by that is, we wanted to do what's right, on day zero, for the customer. So we set back using the experience that we've been able to amass, going through various recovery operations, and helping customers get through a Ransomware attack. And we realized, "Hey. What we should offer is a free cyber resilience assessment." So we like to, from the storage side, we'd like to look at what we offer to the customer as following the NIST framework. And most vendors will really lean in hard on the response and the recovery side of that, as you should. But that means that there's four other steps that need to be addressed, and that free cyber-resilience assessment, it's a consultative engagement that we offer. What we're really looking at doing is helping you assess how vulnerable you are, how big is that attack surface? And coming out of that, we're going to give you a Vendor Agnostic Report that says here's your situation, here's your grade or your level of risk and vulnerability, and then here's a prioritized roadmap of where we would recommend that you go off and start solving to close up whatever the gaps or the risks are. Now you could say, "Hey, thanks, IBM. I appreciate that. I'm good with my storage vendor today. I'm going to go off and use it." Now, we may not get some kind of commission check. We may not sell the box. But what I do know is that you're going to walk away knowing the risks that you're in, and we're going to give you the recommendations to get started on closing those up. And that helps me sleep at night. >> That's a nice freebie. >> Yeah. >> Yeah, it really is, 'cause you guys got deep expertise in that area. So take advantage of that. >> Scott, great to have you on. Thanks for spending time out of your busy day. Final question, put a plug in for your group. What are you communicating to customers? Share with the audience here. You're here at VMware Explorer, the new rebranded- >> () Right? >> ... multi-cloud, hybrid cloud, steady state. There are three levels of transformation, virtualization, hybrid cloud, DevOps, now- >> Right? >> ... multi-cloud, so they're in chapter three of their journey- >> That's right. >> Really innovative company, like IBM, so put the plugin. What's going on in your world? Take a minute to explain what you want. >> Right on. So here we are at VMware Explorer, really excited to be here. We're showcasing two aspects of the IBM portfolio, all of the releases and announcements that we're making around the IBM cloud. In fact, you should come check out the product demonstration for the IBM Cloud Satellite. And I don't think they've coined it this, but I like to call it the VMware edition, because it has all of the VMware services and tools built into it, to make it easier to move your workloads around. We certainly have the infrastructure side on the storage, talking about how we can help organizations, not only accelerate their deployments in, let's say Tanzu or Containers, but even how we help them transform the application stack that's running on top of their virtualized environment in the most consistent and secure way possible. >> Multiple years of relationships with VMware. IBM, VMware together. Congratulations. >> () That's right. >> () Thanks for coming on. >> Hey, thanks (indistinct). Thank you very much. >> A lot more live coverage here at Moscone west. This is theCUBE. I'm John Furrier with Dave Vellante. Thanks for watching. Two more days of wall-to-wall coverage continuing here. Stay tuned. (soothing music)

>>Hello, everyone. Welcome to the cubes coverage here. New York city for AWS Amazon web services summit 2022. I'm John furrier, host of the cube with Dave ante. My co-host. We are breaking it down, getting an update on the ecosystem. As the GDP drops, inflations up gas prices up the enterprise continues to grow. We're seeing exceptional growth. We're here on the ground floor. Live at the Summit's packed house, 10,000 people. Eric Bradley's here. Chief STR at ETR, one of the premier enterprise research firms out there, partners with the cube and powers are breaking analysis that Dave does check that out as the hottest podcast in enterprise. Eric. Great to have you on the cube. Thanks for coming on. >>Thank you so much, John. I really appreciate the collaboration always. >>Yeah. Great stuff. Your data's amazing ETR folks watching check out ETR. They have a unique formula, very accurate. We love it. It's been moving the market. Congratulations. Let's talk about the market right now. This market is booming. Enterprise is the hottest thing, consumers kind of in the toilet. Okay. I said that all right, back out devices and, and, and consumer enterprise is still growing. And by the way, this first downturn, the history of the world where hyperscalers are on full pumping on all cylinders, which means they're still powering the revolution. >>Yeah, it's true. The hyperscalers were basically at this two sun system when Microsoft and an AWS first came around and everything was orbiting around it. And we're starting to see that sun cool off a little bit, but we're talking about a gradient here, right? When we say cool off, we're not talking to shutdown, it's still burning hot. That's for sure. And I can get it to some of the macro data in a minute, if that's all right. Or do you want me to go right? No, go go. Right. Yeah. So right now we just closed our most recent survey and that's macro and vendor specific. We had 1200 people talk to us on the macro side. And what we're seeing here is a cool down in spending. We originally had about 8.5% increase in budgets. That's cool down is 6.5 now, but I'll say with the doom and gloom and the headlines that we're seeing every day, 6.5% growth coming off of what we just did the last couple of years is still pretty fantastic as a backdrop. >>Okay. So you, you started to see John mentioned consumer. We saw that in Snowflake's earnings. For example, we, we certainly saw, you know, Walmart, other retailers, the FA Facebooks of the world where consumption was being dialed down, certain snowflake customers. Not necessarily, they didn't have mentioned any customers, but they were able to say, all right, we're gonna dial down, consumption this quarter, hold on until we saw some of that in snowflake results and other results. But at the same time, the rest of the industry is booming. But your data is showing softness within the fortune 500 for AWS, >>Not only AWS, but fortune 500 across the board. Okay. So going back to that larger macro data, the biggest drop in spending that we captured is fortune 500, which is surprising. But at the same time, these companies have a better purview into the economy. In general, they tend to see things further in advance. And we often remember they spend a lot of money, so they don't need to play catch up. They'll easily more easily be able to pump the brakes a little bit in the fortune 500. But to your point, when we get into the AWS data, the fortune 500 decrease seems to be hitting them a little bit more than it is Azure and GCP. I >>Mean, we're still talking about a huge business, right? >>I mean, they're catching up. I mean, Amazon has been transforming from owning the developer cloud startup cloud decade ago to really putting a dent on the enterprise as being number one cloud. And I still contest that they're number one by a long ways, but Azure kicking ass and catching up. Okay. You seeing people move to Azure, you got Charlie bell over there, Sean, by former Amazonians, Theresa Carlson, people are going over there, there there's lift over at Azure. >>There certainly is. >>Is there kinks in the arm or for AWS? There's >>A couple of kinks, but I think your point is really good. We need to take a second there. If you're talking about true pass or infrastructure is a service true cloud compute. I think AWS still is the powerhouse. And a lot of times the, the data gets a little muddied because Azure is really a hosted platform for applications. And you're not really sure where that line is drawn. And I think that's an important caveat to make, but based on the data, yes, we are seeing some kinks in the armor for AWS. Yes. Explain. So right now, a first of all caveat, 40% net score, which is our proprietary spending metric across the board. So we're not like raising any alarms here. It's still strong that said there are declines and there are declines pretty much across the board. The only spot we're not seeing a decline at all is in container, spend everything else is coming down specifically. We're seeing it come down in data analytics, data warehousing, and M I, which is a little bit of a concern because that, that rate of decline is not the same with Azure. >>Okay. So I gotta ask macro, I see the headwinds on the macro side, you pointed that out. Is there any insight into any underlying conditions that might be there on AWS or just a chronic kind of situational thing >>Right now? It seems situational. Other than that correlation between their big fortune 500, you know, audience and that being our biggest decline. The other aspect of the macro survey is we ask people, if you are planning to decline spend, how do you plan on doing it? And the number two answer is taking a look at our cloud spend and auditing it. So they're kind say, all right, you know, for the last 10 years it's been drunken, sail or spend, I >>Was gonna use that same line, you know, >>Cloud spend, just spend and we'll figure it out later, who cares? And then right now it's time to tighten the belts a little bit, >>But this is part of the allure of cloud at some point. Yeah. You, you could say, I'm gonna, I'm gonna dial it down. I'm gonna rein it in. So that's part of the reason why people go to the cloud. I want to, I wanna focus in on the data side of things and specifically the database. Let, just to give some context if, and correct me if I'm, I'm a little off here, but snowflake, which hot company, you know, on the planet, their net score was up around 80% consistently. It it's dropped down the last, you know, quarter, last survey to 60%. Yeah. So still highly, highly elevated, but that's relative to where Amazon is much larger, but you're saying they're coming down to the 40% level. Is that right? >>Yeah, they are. And I remember, you know, when I first started doing this 10 years ago, AWS at a 70%, you know, net score as well. So what's gonna happen over time is those adoptions are gonna get less and you're gonna see more flattening of spend, which ultimately is going to lower the score because we're looking for expansion rates. We wanna see adoption and increase. And when you see flattening a spend, it starts to contract a little bit. And you're right. Snowflake also was in the stratosphere that cooled off a little bit, but still, you know, very strong and AWS is coming down. I think the reason why it's so concerning is because a it's within the fortune 500 and their rate of decline is more than Azure right >>Now. Well, and, and one of the big trends you're seeing in database is this idea of converging function. In other words, bringing transaction and analytics right together at snowflake summit, they added the capability to handle transaction data, Mongo DB, which is largely mostly transactions added the capability in June to bring in analytic data. You see data bricks going from data engineering and data science now getting into snowflake space and analytics. So you're seeing that convergence Oracle is converging with my SQL heat wave and their core databases, couch base couch base is doing the same. Maria do virtually all these database companies are, are converging their platforms with the exception of AWS. AWS is still the right tool for the right job. So they've got Aurora, they've got RDS, they've got, you know, a dynamo DV, they've got red, they've got, you know, going on and on and on. And so the question everybody's asking is will that change? Will they start to sort of cross those swim lanes? We haven't seen it thus far. How is that affecting the data >>Performance? I mean, that's fantastic analysis. I think that's why we're seeing it because you have to be in the AWS ecosystem and they're really not playing nicely with others in the sandbox right now that now I will say, oh, Amazon's not playing nicely. Well, no, no. Simply to your point though, that there, the other ones are actually bringing in others at consolidating other different vendor types. And they're really not. You know, if you're in AWS, you need to stay within AWS. Now I will say their tools are fantastic. So if you do stay within AWS, they have a tool for every job they're advanced. And they're incredible. I think sometimes the complexity of their tools hurts them a little bit. Cause to your point earlier, AWS started as a developer-centric type of cloud. They have moved on to enterprise cloud and it's a little bit more business oriented, but their still roots are still DevOps friendly. And unless you're truly trained, AWS can be a little scary. >>So a common use case is I'm gonna be using Aurora for my transaction system and then I'm gonna ETL it into Redshift. Right. And, and I, now I have two data stores and I have two different sets of APIs and primitives two different teams of skills. And so that is probably causing some friction and complexity in the customer base that again, the question is, will they begin to expand some of those platforms to minimize some of that friction? >>Well, yeah, this is the question I wanted to ask on that point. So I've heard from people inside Amazon don't count out Redshift, we're making, we're catching up. I think that's my word, but they were kind of saying that right. Cuz Redshift is good, good database, but they're adding a lot more. So you got snowflake success. I think it's a little bit of a jealousy factor going on there within Redshift team, but then you got Azure synapse with the Synap product synapse. Yep. And then you got big query from Google big >>Query. Yep. >>What's the differentiation. What are you seeing for the data for the data warehouse or the data clouds that are out there for the customers? What's the data say, say to us? >>Yeah, unfortunately the data's showing that they're dropping a little bit whose day AWS is dropping a little bit now of their data products, Redshift and RDS are still the two highest of them, but they are starting to decline. Now I think one of the great data points that we have, we just closed the survey is we took a comparison of the legacy data. Now please forgive me for the word legacy. We're gonna anger a few people, but we Gotter data Oracle on-prem, we've got IBM. Some of those more legacy data warehouse type of names. When we look at our art survey takers that have them where their spend is going, that spends going to snowflake first, and then it's going to Google and then it's going to Microsoft Azure and, and AWS is actually declining in there. So when you talk about who's taking that legacy market share, it's not AWS right now. >>So legacy goes to legacy. So Microsoft, >>So, so let's work through in a little context because Redshift really was the first to take, you know, take the database to the cloud. And they did that by doing a one time license deal with par XL, which was an on-prem database. And then they re-engineered it, they did a fantastic job, but it was still engineered for on-prem. Then you along comes snowflake a couple years later and true cloud native, same thing with big query. Yep. True cloud native architecture. So they get a lot of props. Now what, what Amazon did, they took a page outta of the snowflake, for example, separating compute from storage. Now of course what's what, what Amazon did is actually not really completely separating like snowflake did they couldn't because of the architecture, they created a tearing system that you could dial down the compute. So little nuances like that. I understand. But at the end of the day, what we're seeing from snowflake is the gathering of an ecosystem in this true data cloud, bringing in different data types, they got to the public markets, data bricks was not able to get to the public markets. Yeah. And think is, is struggling >>And a 25 billion evaluation. >>Right. And so that's, that's gonna be dialed down, struggling somewhat from a go to market standpoint where snowflake has no troubles from a go to market. They are the masters at go to market. And so now they've got momentum. We talked to Frank sluman at the snowflake. He basically said, I'm not taking the foot off the gas, no way. Yeah. We, few of our large, you know, consumer customers dialed things down, but we're going balls to the >>Wall. Well, if you look at their show before you get in the numbers, you look at the two shows. Snowflake had their summit in person in Vegas. Data bricks has had their show in San Francisco. And if you compare the two shows, it's clear, who's winning snowflake is blew away from a, from a market standpoint. And we were at snowflake, but we weren't at data bricks, but there was really nothing online. I heard from sources that it was like less than 3000 people. So >>Snowflake was 1900 people in 2019, nearly 10,000. Yeah. In 2020, >>It's gonna be fun to sort of track that as a, as an odd caveat to say, okay, let's see what that growth is. Because in fairness, data, bricks, you know, a little bit younger, Snowflake's had a couple more years. So I'd be curious to see where they are. Their, their Lakehouse paradigm is interesting. >>Yeah. And I think it's >>And their product first company, yes. Their go to market might be a little bit weak from our analysis, but that, but they'll figure it out. >>CEO's pretty smart. But I think it's worth pointing out. It's like two different philosophies, right? It is. Snowflake is come into our data cloud. That's their proprietary environment. They're the, they think of the iPhone, right? End to end. We, we guarantee it's all gonna work. And we're in control. Snowflake is like, Hey, open source, no, bring in data bricks. I mean data bricks, open source, bring in this tool that too, now you are seeing snowflake capitulate a little bit. They announce, for instance, Apache iceberg support at their, at the snowflake summit. So they're tipping their cap to open source. But at the end of the day, they're gonna market and sell the fact that it's gonna run better in native snowflake. Whereas data bricks, they're coming at it from much more of an open source, a mantra. So that's gonna, you know, we'll see who look at, you had windows and you had apple, >>You got, they both want, you got Cal and you got Stanford. >>They both >>Consider, I don't think it's actually there yet. I, I find the more interesting dynamic right now is between AWS and snowflake. It's really a fun tit for tat, right? I mean, AWS has the S three and then, you know, snowflake comes right on top of it and announces R two, we're gonna do one letter, one number better than you. They just seem to have this really interesting dynamic. And I, and it is SLT and no one's betting against him. I mean, this guy's fantastic. So, and he hasn't used his war chest yet. He's still sitting on all that money that he raised to your point, that data bricks five, their timing just was a little off >>5 billion in >>Capital when Slootman hasn't used that money yet. So what's he gonna do? What can he do when he turns that on? He finds the right. >>They're making some acquisitions. They did the stream lit acquisitions stream. >>Fantastic >>Problem. With data bricks, their valuation is underwater. Yes. So they're recruiting and their MNAs. Yes. In the toilet, they cannot make the moves because they don't have the currency until they refactor the multiple, let the, this market settle. I I'm, I'm really nervous that they have to over factor the >>Valuation. Having said that to your point, Eric, the lake house architecture is definitely gaining traction. When you talk to practitioners, they're all saying, yeah, we're building data lakes, we're building lake houses. You know, it's a much, much smaller market than the enterprise data warehouse. But nonetheless, when you talk to practitioners that are actually doing things like self serve data, they're building data lakes and you know, snow. I mean, data bricks is right there. And as a clear leader in, in ML and AI and they're ahead of snowflake, right. >>And I was gonna say, that's the thing with data bricks. You know, you're getting that analytics at M I built into it. >>You know, what's ironic is I remember talking to Matt Carroll, who's CEO of auDA like four or five years ago. He came into the office in ma bro. And we were in temporary space and we were talking about how there's this new workload emerging, which combines AWS for cloud infrastructure, snowflake for the simple data warehouse and data bricks for the ML AI, and then all now all of a sudden you see data bricks yeah. And snowflake going at it. I think, you know, to your point about the competition between AWS and snowflake, here's what I think, I think the Redshift team is, you know, doesn't like snowflake, right. But I think the EC two team loves it. Loves it. Exactly. So, so I think snowflake is driving a lot of, >>Yeah. To John's point, there is plenty to go around. And I think I saw just the other day, I saw somebody say less than 40% of true global 2000 organizations believe that they're at real time data analytics right now. They're not really there yet. Yeah. Think about how much runway is left and how many tools you need to get to real time streaming use cases. It's complex. It's not easy. >>It's gonna be a product value market to me, snowflake in data bricks. They're not going away. Right. They're winning architectures. Yeah. In the cloud, what data bricks did would spark and took over the Haddo market. Yeah. To your point. Now that big data, market's got two players, in my opinion, snow flicking data, bricks converging. Well, Redshift is sitting there behind the curtain, their wild card. Yeah. They're wild card, Dave. >>Okay. I'm gonna give one more wild card, which is the edge. Sure. Okay. And that's something that when you talk about real time analytics and AI referencing at the edge, there aren't a lot of database companies in a position to do that. You know, Amazon trying to put outposts out there. I think it runs RDS. I don't think it runs any other database. Right. Snowflake really doesn't have a strong edge strategy when I'm talking the far edge, the tiny edge. >>I think, I think that's gonna be HPE or Dell's gonna own the outpost market. >>I think you're right. I'll come back to that. Couch base is an interesting company to watch with Capella Mongo. DB really doesn't have a far edge strategy at this point, but couch base does. And that's one to watch. They're doing some really interesting things there. And I think >>That, but they have to leapfrog bongo in my >>Opinion. Yeah. But there's a new architecture emerging at the edge and it's gonna take a number of years to develop, but it could eventually from an economic standpoint, seep back into the enterprise arm base, low end, take a look at what couch base is >>Doing. They hired an Amazon guard system. They have to leapfrog though. They need to, they can't incrementally who's they who >>Couch >>Base needs to needs to make a big move in >>Leap frog. Well, think they're trying to, that's what Capella is all about was not only, you know, their version of Atlas bringing to the cloud couch base, but it's also stretching it out to the edge and bringing converged database analytics >>Real quick on the numbers. Any data on CloudFlare, >>I was, I've been sitting here trying to get the word CloudFlare out my mouth the whole time you guys were talking, >>Is this another that's innovated in the ecosystem. So >>Platform, it was really simple for them early on, right? They're gonna get that edge network out there and they're gonna steal share from Akamai. Then they started doing exactly what Akamai did. We're gonna start rolling out some security. Their security is fantastic. Maybe some practitioners are saying a little bit too much, cuz they're not focused on one thing or another, but they are doing extremely well. And now they're out there in the cloud as well. You >>Got S3 compare. They got two, they got an S3 competitor. >>Exactly. So when I'm listening to you guys talk about, you know, a, a couch base I'm like, wow, those two would just be an absolute fantastic, you know, combination between the two of them. You mean >>CloudFlare >>Couch base. Yeah. >>I mean you got S3 alternative, right? You got a Mongo alternative basically in my >>Opinion. And you're going and you got the edge and you got the edge >>Network with security security, interesting dynamic. This brings up the super cloud date. I wanna talk about Supercloud because we're seeing a trend on we're reporting this since last year that basically people don't have to spend the CapEx to be cloud scale. And you're seeing Amazon enable that, but snowflake has become a super cloud. They're on AWS. Now they're on Azure. Why not tan expansion expand the market? Why not get that? And then it'll be on Google next, all these marketplaces. So the emergence of this super cloud, and then the ability to make that across a substrate across multiple clouds is a strategy we're seeing. What do you, what do you think? >>Well, honestly, I'm gonna be really Frank here. The, everything I know about the super cloud I know from this guy. So I've been following his lead on this and I'm looking forward to you guys doing that conference and that summit coming up from a data perspective. I think what you're saying is spot on though, cuz those are the areas we're seeing expansion in without a doubt. >>I think, you know, when you talk about things like super cloud and you talk about things like metaverse, there's, there's a, there, there look every 15 or 20 years or so this industry reinvents itself and a new disruption comes out and you've got the internet, you've got the cloud, you've got an AI and VR layer. You've got, you've got machine intelligence. You've got now gaming. There's a new matrix, emerging, super cloud. Metaverse there's something happening out there here. That's not just your, your father's SAS or is or pass. Well, >>No, it's also the spend too. Right? So if I'm a company like say capital one or Goldman Sachs, my it spend has traditionally been massive every year. Yes. It's basically like tons of CapEx comes the cloud. It's an operating expense. Wait a minute, Amazon has all the CapEx. So I'm not gonna dial down my budget. I want a competitive advantage. So next thing they know they have a super cloud by default because they just pivoted their, it spend into new capabilities that they then can sell to the market in FinTech makes total sense. >>Right? They're building out a digital platform >>That would, that was not possible. Pre-cloud >>No, it wasn't cause you weren't gonna go put all that money into CapEx expenditure to build that out. Not knowing whether or not the market was there, but the scalability, the ability to spend, reduce and be flexible with it really changes that paradigm entire. >>So we're looking at this market now thinking about, okay, it might be Greenfield in every vertical. It might have a power law where you have a head of the long tail. That's a player like a capital one, an insurance. It could be Liberty mutual or mass mutual that has so much it and capital that they're now gonna scale it into a super cloud >>And they have data >>And they have the data tools >>And the tools. And they're gonna bring that to their constituents. Yes, yes. And scale it using >>Cloud. So that means they can then service the entire vertical as a service provider. >>And the industry cloud is becoming bigger and bigger and bigger. I mean, that's really a way that people are delivering to market. So >>Remember in the early days of cloud, all the banks thought they could build their own cloud. Yeah. Yep. Well actually it's come full circle. They're like, we can actually build a cloud on top of the cloud. >>Right. And by the way, they can have a private cloud in their super cloud. Exactly. >>And you know, it's interesting cause we're talking about financial services insurance, all the people we know spend money in our macro survey. Do you know the, the sector that's spending the most right now? It's gonna shock you energy utilities. Oh yeah. I was gonna, the energy utilities industry right now is the one spending the most money I saw largely cuz they're playing ketchup. But also because they don't have these type of things for their consumers, they need the consumer app. They need to be able to do that delivery. They need to be able to do metrics. And they're the they're, they're the one spending right >>Now it's an arms race, but the, the vector shifts to value creation. So >>It's it just goes back to your post when it was a 2012, the trillion dollar baby. Yeah. It's a multi-trillion dollar baby that they, >>The world was going my chassis post on Forbes, headline trillion dollar baby 2012. You know, I should add it's happening. That's >>On the end. Yeah, exactly. >>Trillions of babies, Eric. Great to have you on the key. >>Thank you so much guys. >>Great to bring the data. Thanks for sharing. Check out ETR. If you're into the enterprise, want to know what's going on. They have a unique approach, very accurate in their survey data. They got a great market basket of, of, of, of, of data questions and people and community. Check it out. Thanks for coming on and sharing with. >>Thank you guys. Always enjoy. >>We'll be back with more coverage here in the cube in New York city live at summit 22. I'm John fur with Dave ante. We'll be right back.

>> Announcer: TheCube presents HPE Discover 2022, brought to you by HPE. >> Welcome back to HPE Discover 2022, theCube's continuous wall to wall coverage, Dave Vellante with John Furrier. Keith Basil is here as the General Manager for the Edge Business Unit at SUSE. Keith, welcome to theCube, man good to see you. >> Great to be here, it's my first time here and I've seen many shows and you guys are the best. >> Thanks you. >> Thank you very much. >> Big fans of SUSE you know, we've had Melissa on several times. >> Yes. >> Let's start with kind of what you guys are doing here at Discover. >> Well, we're here to support our wonderful partner HPE, as you know SUSE's products and services are now being integrated into the GreenLake offering. So that's very exciting for us. >> Yeah. Now tell us about your background. It's quite interesting you've kind of been in the mix in some really cool places. Tell us a little bit about yourself. >> Probably the most relevant was I used to work at Red Hat, I was a Product Manager working in security for OpenStack and OpenShift working with DOD customers in the intelligence community. Left Red Hat to go to Rancher, started out there as VP of Edge Solutions and then transitioned over to VP of Product for all of Rancher. And then obviously we know SUSE acquired Rancher and as of November 1st, of 2020, I think it was. >> Dave: 2020. >> Yeah, yeah time is flying. I came over, I still remained VP of Product for Rancher for Cloud Native Infrastructure. And I was working on the edge strategy for SUSE and about four months ago we internally built three business units, one for the Linux business, one for enterprise container management, basically the Rancher business, and then the newly minted business unit was the Edge business. And I was offered the role to be GM for that business unit and I happily accepted it. >> Very cool. I mean the market dynamics since the 2018 have changed dramatically, IBM bought Red Hat. A lot of customers said, "Hmm let's see what other alternatives are out there." SUSE popped its head up. You know, Melissa's been quite, you know forthcoming about that. And then you acquire Rancher in 2020, IPO in 2021. That kind of gives you another tailwind. So there's a new market when you go from 2018 to 2022, it's a completely changed dynamic. >> Yes and I'm going to answer your question from the Rancher perspective first, because as we were at Rancher, we had experimented with different flavors of the underlying OS underneath Kubernetes or Kubernetes offerings. And we had, as I said, different flavors, we weren't really operating system people for example. And so post-acquisition, you know, one of my internal roles was to bring the two halves of the house together, the philosophies together where you had a cloud native side in the form of Rancher, very progressive leading innovative products with Rancher with K3s for example. And then you had, you know, really strong enterprise roots around compliance and security, secure supply chain with the enterprise grade Linux. And what we found out was SUSE had been building a version of Linux called SLE Micro, and it was perfectly designed for Edge. And so what we've done over that time period since the acquisition is that we've brought those two things together. And now we're using Kubernetes directives and philosophies to manage all the way down to the operating system. And it is a winning strategy for our customers. And we're really excited about that. >> And what does that product look like? Is that a managed service? How are customers consuming that? >> It could be a managed service, it's something that our managed service providers could embrace and offer to their customers. But we have some customers who are very sophisticated who want to do the whole thing themselves. And so they stand up Rancher, you know at a centralized location at cloud GreenLake for example which is why this is very relevant. And then that control plane if you will, manages thousands of downstream clusters that are running K3s at these Edge locations. And so that's what the complete stack looks like. And so when you add the Linux capability to that scenario we can now roll a new operating system, new kernel, CVE updates, build that as an OCI container image registry format, right? Put that into a registry and then have that thing cascade down through all the downstream clusters and up through a rolling window upgrade of the operating system underneath Kubernetes. And it is a tremendous amount of value when you talk to customers that have this massive scale. >> What's the impact of that, just take us through what happens next. Is it faster? Is it more performant? Is it more reliable? Is it processing data at the Edge? What's the impact of the customer? >> Yes, the answer is yes to that. So let's actually talk about one customer that we we highlighted in our keynote, which is Home Depot. So as we know, Kubernetes is on fire, right? It is the technology everybody's after. So by being in demand, the skills needed, the people shortage is real and people are commanding very high, you know, salaries. And so it's hard to attract talent is the bottom line. And so using our software and our solution and our approach it allows people to scale their existing teams to preserve those precious human resources and that human capital. So that now you can take a team of seven people and manage let's say 3000 downstream stores. >> Yeah it's like the old SRE model for DevOps. >> Correct. >> It's not servers they're managing one to many. >> Yes. >> One to many clusters. >> Correct so you've got the cluster, the life cycle of the cluster. You already have the application life cycle with the classic DevOps. And now what we've built and added to the stack is going down one step further, clicking down if you will to managing the life cycle of the operating system. So you have the SUSE enterprise build chain, all the value, the goodness, compliance, security. Again, all of that comes with that build process. And now we're hooking that into a cloud native flow that ends up downstream in our customers. >> So what I'm hearing is your Edge strategy is not some kind of bespoke, "Hey, I'm going after Edge." It connects to the entire value chain. >> Yes, yeah it's a great point. We want to reuse the existing philosophies that are being used today. We don't want to create something net new, cause that's really the point in leverage that we get by having these teams, you know, do these things at scale. Another point I'm going to make here is that we've defined the Edge into three segments. One is the near Edge, which is the realm of the-- >> I was going to ask about this, great. >> The telecommunications companies. So those use cases and profiles look very different. They're almost data center lite, right? So you've had regional locations, central offices where they're standing up gear classic to you machines, right? So things you find from HPE, for example. And then once you get on the other side of the access device right? The cable modem, the router, whatever it is you get into what we call the far Edge. And this is where the majority of the use cases reside. This is where the diversity of use cases presents itself as well. >> Also security challenges. >> Security challenges. Yes and we can talk about that following in a moment. And then finally, if you look at that far Edge as a box, right? Think of it as a layer two domain, a network. Inside that location, on that network you'll have industrial IOT devices. Those devices are too small to run a full blown operating system such as Linux and Kubernetes in the stack but they do have software on them, right? So we need to be able to discover those devices and manage those devices and pull data from those devices and do it in a cloud native way. So that's what we called the tiny Edge. And I stole that name from the folks over at Microsoft. Kate and Edrick are are leading a project upstream called Akri, A-K-R-I, and we are very much heavily involved in Akri because it will discover the industrial IOT devices and plug those into a local Kubernetes cluster running at that location. >> And Home Depot would fit into the near edge is that correct? >> Yes. >> Yeah okay. >> So each Home Depot store, just to bring it home, is a far Edge location and they have over 2,600 of these locations. >> So far Edge? You would put far Edge? >> Keith: Far Edge yes. >> Far edge, okay. >> John: Near edge is like Metro. Think of Metro. >> And Teleco, communication, service providers MSOs, multi-service operators. Those guys are-- >> Near Edge. >> The near edge, yes. >> Don't you think, John's been asking all week about machine learning and AI, in that tiny Edge. We think there's going to be a lot of AI influencing. >> Keith: Oh absolutely. >> Real time. And it actually is going to need some kind of lighter weight you know, platform. How do you fit into that? >> So going on this, like this model I just described if you go back and look at the SUSECON 2022 demo keynote that I did, we actually on stage stood up that exact stack. So we had a single Intel nook running SLE Micro as we mentioned earlier, running K3s and we plugged into that device, a USB camera which was automatically detected and it loaded Akri and gave us a driver to plug it into a container. Now, to answer your question, that is the point in time where we bring in the ML and the AI, the inference and the pattern recognition, because that camera when you showed the SUSE plush doll, it actually recognized it and put a QR code up on the screen. So that's where it all comes together. So we tried to showcase that in a complete demo. >> Last week, I was here in Vegas for an event Amazon and AWS put on called re:Mars, machine learning, automation, robotics, and space. >> Okay. >> Kind of but basically for me was an industrial edge show. Cause The space is the ultimate like glam to edge is like, you're doing stuff in space that's pretty edgy so to speak, pun intended. But the industrial side of the Edge is going to, we think, accelerate with machine learning. >> Keith: Absolutely. >> And with these kinds of new portable I won't say flash compute or just like connected power sources software. The industrial is going to move really fast. We've been kind of in a snails pace at the Edge, in my opinion. What's your reaction to that? Do you think we're going to see a mass acceleration of growth at the Edge industrial, basically physical, the physical world. >> Yes, first I agree with your assessment okay, wholeheartedly, so much so that it's my strategy to go after the tiny Edge space and be a leader in the industrial IOT space from an open source perspective. So yes. So a few things to answer your question we do have K3s in space. We have a customer partner called Hypergiant where they've launched satellites with K3s running in space same model, that's a far Edge location, probably the farthest Edge location we have. >> John: Deep Edge, deep space. >> Here at HPE Discover, we have a business unit called SUSE RGS, Rancher Government Services, which focuses on the US government and DOD and IC, right? So little bit of the world that I used to work in my past career. Brandon Gulla the CTO of of that unit gave a great presentation about what we call the tactical Edge. And so the same technology that we're using on the commercial and the manufacturing side. >> Like the Jedi contract, the tactical military Edge I think. >> Yes so imagine some of these military grade industrial IOT devices in a disconnected environment. The same software stack and technology would apply to that use case as well. >> So basically the tactical Edge is life? We're humans, we're at the Edge? >> Or it's maintenance, right? So maybe it's pulling sensors from aircraft, Humvees, submarines and doing predictive analysis on the maintenance for those items, those assets. >> All these different Edges, they underscore the diversity that you were just talking Keith and we also see a new hardware architecture emerging, a lot of arm based stuff. Just take a look at what Tesla's doing at the tiny Edge. Keith Basil, thanks so much. >> Sure. >> For coming on theCube. >> John: Great to have you. >> Grateful to be here. >> Awesome story. Okay and thank you for watching. This is Dave Vellante for John Furrier. This is day three of HPE Discover 2022. You're watching theCube, the leader in enterprise and emerging tech coverage. We'll be right back. (upbeat music)

>> From theCUBE studios in Palo Alto in Boston, bringing you data driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> In the words of my colleague CTO David Nicholson, Broadcom buys old cars, not to restore them to their original luster and beauty. Nope. They buy classic cars to extract the platinum that's inside the catalytic converter and monetize that. Broadcom's planned 61 billion acquisition of VMware will mark yet another new era and chapter for the virtualization pioneer, a mere seven months after finally getting spun out as an independent company by Dell. For VMware, this means a dramatically different operating model with financial performance and shareholder value creation as the dominant and perhaps the sole agenda item. For customers, it will mean a more focused portfolio, less aspirational vision pitches, and most certainly higher prices. Hello and welcome to this week's Wikibon CUBE Insights powered by ETR. In this Breaking Analysis, we'll share data, opinions and customer insights about this blockbuster deal and forecast the future of VMware, Broadcom and the broader ecosystem. Let's first look at the key deal points, it's been well covered in the press. But just for the record, $61 billion in a 50/50 cash and stock deal, resulting in a blended price of $138 per share, which is a 44% premium to the unaffected price, i.e. prior to the news breaking. Broadcom will assume 8 billion of VMware debt and promises that the acquisition will be immediately accretive and will generate 8.5 billion in EBITDA by year three. That's more than 4 billion in EBITDA relative to VMware's current performance today. In a classic Broadcom M&A approach, the company promises to dilever debt and maintain investment grade ratings. They will rebrand their software business as VMware, which will now comprise about 50% of revenues. There's a 40 day go shop and importantly, Broadcom promises to continue to return 60% of its free cash flow to shareholders in the form of dividends and buybacks. Okay, with that out of the way, we're going to get to the money slide literally in a moment that Broadcom shared on its investor call. Broadcom has more than 20 business units. It's CEO Hock Tan makes it really easy for his business unit managers to understand. Rule number one, you agreed to an operating plan with targets for revenue, growth, EBITDA, et cetera, hit your numbers consistently and we're good. You'll be very well compensated and life will be wonderful for you and your family. Miss the number, and we're going to have a frank and uncomfortable bottom line discussion. You'll four, perhaps five quarters to turn your business around, if you don't, we'll kill it or sell it if we can. Rule number two, refer to rule number one. Hello, VMware, here's the money slide. I'll interpret the bullet points on the left for clarity. Your fiscal year 2022 EBITDA was 4.7 billion. By year three, it will be 8.5 billion. And we Broadcom have four knobs to turn with you, VMware to help you get there. First knob, if it ain't recurring revenue with rubber stamp renewals, we're going to convert that revenue or kill it. Knob number two, we're going to focus R&D in the most profitable areas of the business. AKA expect the R&D budget to be cut. Number three, we're going to spend less on sales and marketing by focusing on existing customers. We're not going to lose money today and try to make it up many years down the road. And number four, we run Broadcom with 1% GNA. You will too. Any questions? Good. Now, just to give you a little sense of how Broadcom runs its business and how well run a company it is, let's do a little simple comparison with this financial snapshot. All we're doing here is taking the most recent quarterly earnings reports from Broadcom and VMware respectively. We take the quarterly revenue and multiply by four X to get the revenue run rate and then we calculate the ratios off of the most recent quarters revenue. It's worth spending some time on this to get a sense of how profitable the Broadcom business actually is and what the spreadsheet gurus at Broadcom are seeing with respect to the possibilities for VMware. So combined, we're talking about a 40 plus billion dollar company. Broadcom is growing at more than 20% per year. Whereas VMware's latest quarter showed a very disappointing 3% growth. Broadcom is mostly a hardware company, but its gross margin is in the high seventies. As a software company of course VMware has higher gross margins, but FYI, Broadcom's software business, the remains of Symantec and what they purchased as CA has 90% gross margin. But the I popper is operating margin. This is all non gap. So it excludes things like stock based compensation, but Broadcom had 61% operating margin last quarter. This is insanely off the charts compared to VMware's 25%. Oracle's non gap operating margin is 47% and Oracle is an incredibly profitable company. Now the red box is where the cuts are going to take place. Broadcom doesn't spend much on marketing. It doesn't have to. It's SG&A is 3% of revenue versus 18% for VMware and R&D spend is almost certainly going to get cut. The other eye popper is free cash flow as a percentage of revenue at 51% for Broadcom and 29% for VMware. 51%. That's incredible. And that my dear friends is why Broadcom a company with just under 30 billion in revenue has a market cap of 230 billion. Let's dig into the VMware portfolio a bit more and identify the possible areas that will be placed under the microscope by Hock Tan and his managers. The data from ETR's latest survey shows the net score or spending momentum across VMware's portfolio in this chart, net score essentially measures the net percent of customers that are spending more on a specific product or vendor. The yellow bar is the most recent survey and compares the April 22 survey data to April 21 and January of 22. Everything is down in the yellow from January, not surprising given the economic outlook and the change in spending patterns that we've reported. VMware Cloud on AWS remains the product in the ETR survey with the most momentum. It's the only offering in the portfolio with spending momentum above the 40% line, a level that we consider highly elevated. Unified Endpoint Management looks more than respectable, but that business is a rock fight with Microsoft. VMware Cloud is things like VMware Cloud foundation, VCF and VMware's cross cloud offerings. NSX came from the Nicira acquisition. Tanzu is not yet pervasive and one wonders if VMware is making any money there. Server is ESX and vSphere and is the bread and butter. That is where Broadcom is going to focus. It's going to look at VSAN and NSX, which is software probably profitable. And of course the other products and see if the investments are paying off, if they are Broadcom will keep, if they are not, you can bet your socks, they will be sold off or killed. Carbon Black is at the far right. VMware paid $2.1 billion for Carbon Black. And it's the lowest performer on this list in terms of net score or spending momentum. And that doesn't mean it's not profitable. It just doesn't have the momentum you'd like to see, so you can bet that is going to get scrutiny. Remember VMware's growth has been under pressure for the last several years. So it's been buying companies, dozens of them. It bought AirWatch, bought Heptio, Carbon Black, Nicira, SaltStack, Datrium, Versedo, Bitnami, and on and on and on. Many of these were to pick up engineering teams. Some of them were to drive new revenue. Now this is definitely going to be scrutinized by Broadcom. So that helps explain why Michael Dell would sell VMware. And where does VMware go from here? It's got great core product. It's an iconic name. It's got an awesome ecosystem, fantastic distribution channel, but its growth is slowing. It's got limited developer chops in a world that developers and cloud native is all the rage. It's got a far flung R&D agenda going at war with a lot of different places. And it's increasingly fighting this multi front war with cloud companies, companies like Cisco, IBM Red Hat, et cetera. VMware's kind of becoming a heavy lift. It's a perfect acquisition target for Broadcom and why the street loves this deal. And we titled this Breaking Analysis taming the VMware beast because VMware is a beast. It's ubiquitous. It's an epic software platform. EMC couldn't control it. Dell used it as a piggy bank, but really didn't change its operating model. Broadcom 100% will. Now one of the things that we get excited about is the future of systems architectures. We published a breaking analysis about a year ago, talking about AWS's secret weapon with Nitro and it's Annapurna custom Silicon efforts. Remember it acquired Annapurna for a measly $350 million. And we talked about how there's a new architecture and a new price performance curve emerging in the enterprise, driven by AWS and being followed by Microsoft, Google, Alibaba, a trend toward custom Silicon with the arm based Nitro and which is AWS's hypervisor and Nick strategy, enabling processor diversity with things like Graviton and Trainium and other diverse processors, really diversifying away from x86 and how this leads to much faster product cycles, faster tape out, lower costs. And our premise was that everyone in the data center is going to competes, is going to need a Nitro to be competitive long term. And customers are going to gravitate toward the most economically favorable platform. And as we describe the landscape with this chart, we've updated this for this Breaking Analysis and we'll come back to nitro in a moment. This is a two dimensional graphic with net score or spending momentum on the vertical axis and overlap formally known as market share or presence within the survey, pervasiveness that's on the horizontal axis. And we plot various companies and products and we've inserted VMware's net score breakdown. The granularity in those colored bars on the bottom right. Net score is essentially the green minus the red and a couple points on that. VMware in the latest survey has 6% new adoption. That's that lime green. It's interesting. The question Broadcom is going to ask is, how much does it cost you to acquire that 6% new. 32% of VMware customers in the survey are increasing spending, meaning they're increasing spending by 6% or more. That's the forest green. And the question Broadcom will dig into is what percent of that increased spend (chuckles) you're capturing is profitable spend? Whatever isn't profitable is going to be cut. Now that 52% gray area flat spending that is ripe for the Broadcom picking, that is the fat middle, and those customers are locked and loaded for future rent extraction via perpetual renewals and price increases. Only 8% of customers are spending less, that's the pinkish color and only 3% are defecting, that's the bright red. So very, very sticky profile. Perfect for Broadcom. Now the rest of the chart lays out some of the other competitor names and we've plotted many of the VMware products so you can see where they fit. They're all pretty respectable on the vertical axis, that's spending momentum. But what Broadcom wants is that core ESX vSphere base where we've superimposed the Broadcom logo. Broadcom doesn't care so much about spending momentum. It cares about profitability potential and then momentum. AWS and Azure, they're setting the pace in this business, in the upper right corner. Cisco very huge presence in the data center, as does Intel, they're not in the ETR survey, but we've superimposed them. Now, Intel of course, is in a dog fight within Nvidia, the Arm ecosystem, AMD, don't forget China. You see a Google cloud platform is in there. Oracle is also on the chart as well, somewhat lower on the vertical axis, but it doesn't have that spending momentum, but it has a big presence. And it owns a cloud as we've talked about many times and it's highly differentiated. It's got a strategy that allows it to differentiate from the pack. It's very financially driven. It knows how to extract lifetime value. Safra Catz operates in many ways, similar to what we're seeing from Hock Tan and company, different from a portfolio standpoint. Oracle's got the full stack, et cetera. So it's a different strategy. But very, very financially savvy. You could see IBM and IBM Red Hat in the mix and then Dell and HP. I want to come back to that momentarily to talk about where value is flowing. And then we plotted Nutanix, which with Acropolis could suck up some V tax avoidance business. Now notice Symantec and CA, relatively speaking in the ETR survey, they have horrible spending momentum. As we said, Broadcom doesn't care. Hock Tan is not going for growth at the expense of profitability. So we fully expect VMware to come down on the vertical axis over time and go up on the profit scale. Of course, ETR doesn't measure the profitability here. Now back to Nitro, VMware has this thing called Project Monterey. It's essentially their version of Nitro and will serve as their future architecture diversifying off x86 and accommodating alternative processors. And a much more efficient performance, price in energy consumption curve. Now, one of the things that we've advocated for, we said this about Dell and others, including VMware to take a page out of AWS and start developing custom Silicon to better integrate hardware and software and accelerate multi-cloud or what we call supercloud. That layer above the cloud, not just running on individual clouds. So this is all about efficiency and simplicity to own this space. And we've challenged organizations to do that because otherwise we feel like the cloud guys are just going to have consistently better costs, not necessarily price, but better cost structures, but it begs the question. What happens to Project Monterey? Hock Tan and Broadcom, they don't invest in something that is unproven and doesn't throw off free cash flow. If it's not going to pay off for years to come, they're probably not going to invest in it. And yet Project Monterey could help secure VMware's future in not only the data center, but at the edge and compete more effectively with cloud economics. So we think either Project Monterey is toast or the VMware team will knock on the door of one of Broadcom's 20 plus business units and say, guys, what if we work together with you to develop a version of Monterey that we can use and sell to everyone, it'd be the arms dealer to everyone and be competitive with the cloud and other players out there and create the de facto standard for data center performance and supercloud. I mean, it's not outrageously expensive to develop custom Silicon. Tesla is doing it for example. And Broadcom obviously is capable of doing it. It's got good relationships with semiconductor fabs. But I think this is going to be a tough sell to Broadcom, unless VMware can hide this in plain site and make it profitable fast, like AWS most likely has with Nitro and Graviton. Then Project Monterey and our pipe dream of alternatives to Nitro in the data center could happen but if it can't, it's going to be toast. Or maybe Intel or Nvidia will take it over or maybe the Monterey team will spin out a VMware and do a Pensando like deal and demonstrate the viability of this concept and then Broadcom will buy it back in 10 years. Here's a double click on that previous data that we put in tabular form. It's how the data on that previous slide was plotted. I just want to give you the background data here. So net score spending momentum is the sorted on the left. So it's sorted by net score in the left hand chart, that was the y-axis in the previous data set and then shared and or presence in the data set is the right hand chart. In other words, it's sorted on the right hand chart, right hand table. That right most column is shared and you can see it's sorted top to bottom, and that was the x-axis on the previous chart. The point is not many on the left hand side are above the 40% line. VMware Cloud on AWS is, it's expensive, so it's probably profitable and it's probably a keeper. We'll see about the rest of VMware's portfolio. Like what happens to Tanzu for example. On the right, we drew a red line, just arbitrarily at those companies and products with more than a hundred mentions in the survey, everything but Tanzu from VMware makes that cut. Again, this is no indication of profitability here, and that's what's going to matter to Broadcom. Now let's take a moment to address the question of Broadcom as a software company. What the heck do they know about software, right. Well, they're not dumb over there and they know how to run a business, but there is a strategic rationale to this move beyond just doing portfolios and extracting rents and cutting R&D, et cetera, et cetera. Why, for example, isn't Broadcom going after coming back to Dell or HPE, it could pick up for a lot less than VMware, and they got way more revenue than VMware. Well, it's obvious, software's more profitable of course, and Broadcom wants to move up the stack, but there's a trend going on, which Broadcom is very much in touch with. First, it sells to Dell and HPE and Cisco and all the OEM. so it's not going to disrupt that. But this chart shows that the value is flowing away from traditional servers and storage and networking to two places, merchant Silicon, which itself is morphing. Broadcom... We focus on the left hand side of this chart. Broadcom correctly believes that the world is shifting from a CPU centric center of gravity to a connectivity centric world. We've talked about this on theCUBE a lot. You should listen to Broadcom COO Charlie Kawwas speak about this. It's all that supporting infrastructure around the CPU where value is flowing, including of course, alternative GPUs and XPUs, and NPUs et cetera, that are sucking the value out of the traditional x86 architecture, offloading some of the security and networking and storage functions that traditionally have been done in x86 which are part of the waste right now in the data center. This is that shifting dynamic of Moore's law. Moore's law, not keeping pace. It's slowing down. It's slower relative to some of the combinatorial factors. When you add up in all the CPU and GPU and NPU and accelerators, et cetera. So we've talked about this a lot in Breaking Analysis episodes. So the value is shifting left within that middle circle. And it's shifting left within that left circle toward components, other than CPU, many of which Broadcom supplies. And then you go back to the middle, value is shifting from that middle section, that traditional data center up into hyperscale clouds, and then to the right toward infrastructure software to manage all that equipment in the data center and across clouds. And look Broadcom is an arms dealer. They simply sell to everyone, locking up key vectors of the value chain, cutting costs and raising prices. It's a pretty straightforward strategy, but not for the fate of heart. And Broadcom has become pretty good at it. Let's close with the customer feedback. I spoke with ETRs Eric Bradley this morning. He and I both reached out to VMware customers that we know and got their input. And here's a little snapshot of what they said. I'll just read this. Broadcom will be looking to invest in the core and divest of any underperforming assets, right on. It's just what we were saying. This doesn't bode well for future innovation, this is a CTO at a large travel company. Next comment, we're a Carbon Black customer. VMware didn't seem to interfere with Carbon Black, but now that we're concerned about short term disruption to their tech roadmap and long term, are they going to split and be sold off like Symantec was, this is a CISO at a large hospitality organization. Third comment, I got directly from a VMware practitioner, an IT director at a manufacturing firm. This individual said, moving off VMware would be very difficult for us. We have over 500 applications running on VMware, and it's really easy to manage. We're not going to move those into the cloud and we're worried Broadcom will raise prices and just extract rents. Last comment, we'll share as, Broadcom sees the cloud data center and IoT is their next revenue source. The VMware acquisition provides them immediate virtualization capabilities to support a lightweight IoT offering. Big concern for customers is what technology they will invest in and innovate, and which will be stripped off and sold. Interesting. I asked David Floyer to give me a back of napkin estimate for the following question. I said, David, if you're running mission critical applications on VMware, how much would it increase your operating cost moving those applications into the cloud? Or how much would it save? And he said, Dave, VMware's really easy to run. It can run any application pretty much anywhere, and you don't need an army of people to manage it. All your processes are tied to VMware, you're locked and loaded. Move that into the cloud and your operating cost would double by his estimates. Well, there you have it. Broadcom will pinpoint the optimal profit maximization strategy and raise prices to the point where customers say, you know what, we're still better off staying with VMware. And sadly, for many practitioners there aren't a lot of choices. You could move to the cloud and increase your cost for a lot of your applications. You could do it yourself with say Zen or OpenStack. Good luck with that. You could tap Nutanix. That will definitely work for some applications, but are you going to move your entire estate, your application portfolio to Nutanix? It's not likely. So you're going to pay more for VMware and that's the price you're going to pay for two decades of better IT. So our advice is get out ahead of this, do an application portfolio assessment. If you can move apps to the cloud for less, and you haven't yet, do it, start immediately. Definitely give Nutanix a call, but going to have to be selective as to what you actually can move, forget porting to OpenStack, or do it yourself Hypervisor, don't even go there. And start building new cloud native apps where it makes sense and let the VMware stuff go into manage decline. Let certain apps just die through attrition, shift your development resources to innovation in the cloud and build a brick wall around the stable apps with VMware. As Paul Maritz, the former CEO of VMware said, "We are building the software mainframe". Now marketing guys got a hold of that and said, Paul, stop saying that, but it's true. And with Broadcom's help that day we'll soon be here. That's it for today. Thanks to Stephanie Chan who helps research our topics for Breaking Analysis. Alex Myerson does the production and he also manages the Breaking Analysis podcast. Kristen Martin and Cheryl Knight help get the word out on social and thanks to Rob Hof, who was our editor in chief at siliconangle.com. Remember, these episodes are all available as podcast, wherever you listen, just search Breaking Analysis podcast. Check out ETRs website at etr.ai for all the survey action. We publish a full report every week on wikibon.com and siliconangle.com. You can email me directly at david.vellante@siliconangle.com. You can DM me at DVellante or comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights powered by ETR. Have a great week, stay safe, be well. And we'll see you next time. (upbeat music)

>>mhm Yes, Welcome back to the cubes coverage of red hat summit 2021 virtual, which we were in person this year but we're still remote. We still got the Covid coming around the corner. Soon to be in post. Covid got a great guest here, Clayton Coleman architect that red hat cuba love and I've been on many times expanded role again this year. More cloud, more cloud action. Great, great to see you. Thanks for coming on. >>It's a pleasure >>to be here. So great to see you were just riffing before we came on camera about distributed computing uh and the future of the internet, how it's all evolving, how much fun it is, how it's all changing still. The game is still the same, all that good stuff. But here at Red had some and we're gonna get into that, but I want to just get into the hard news and the real big, big opportunities here you're announcing with red hat new managed cloud services portfolio, take us through that. >>Sure. We're continuing to evolve our open shift managed offerings which has grown now to include um the redhead open shift service on amazon to complement our as your redhead open shift service. Um that means that we have um along with our partnership on IBM cloud and open ship dedicated on both a W S and G C P. We now have um managed open shift on all of the major clouds. And along with that we are bringing in and introducing the first, I think really the first step what we see as uh huh growing and involving the hybrid cloud ecosystem on top of open shift and there's many different ways to slice that, but it's about bringing capabilities on top of open shift in multiple environments and multiple clouds in ways that make developers and operation teams more productive because at the heart of it, that's our goal for open shift. And the broader, open source ecosystem is do what makes all of us safer, more, uh, more productive and able to deliver business value? >>Yeah. And that's a great steak you guys put in the ground. Um, and that's great messaging, great marketing, great value proposition. I want to dig into a little bit with you. I mean, you guys have, I think the only native offering on all the clouds out there that I know of, is that true? I mean, you guys have, it's not just, you know, you support AWS as your and I B M and G C P, but native offerings. >>We do not have a native offering on GCPD offered the same service. And this is actually interesting as we've evolved our approach. You know, everyone, when we talk about hybrid, Hybrid is, um, you know, dealing with the realities of the computing world, We live in, um, working with each of the major clouds, trying to deliver the best immigration possible in a way that drives that consistency across those environments. And so actually are open shift dedicated on AWS service gave us the inspiration a lot of the basic foundations for what became the integrated Native service. And we've worked with amazon very closely to make sure that that does the right thing for customers who have chosen amazon. And likewise, we're trying to continue to deliver the best experience, the best operational reliability that we can so that the choice of where you run your cloud, um, where you run your applications, um, matches the decisions you've already made and where your future investments are gonna be. So we want to be where customers are, but we also want to give you that consistency. That has been a hallmark of um of open shift since the beginning. >>Yeah. And thanks for clarifying, I appreciate that because the manage serves on GCB rest or native. Um let me ask about the application services because Jeff Barr from AWS posted a few weeks ago amazon celebrated their 15th birthday. They're still teenagers uh relatively speaking. But one comment he made that he that was interesting to me. And this applies kind of this cloud native megatrend happening is he says the A. P. I. S are basically the same and this brings up the hybrid environment. You guys are always been into the api side of the management with the cloud services and supporting all that. As you guys look at this ecosystem in open source. How is the role of A PS and these integrations? Because without solid integration all these services could break down and certainly the open source, more and more people are coding. So take me through how you guys look at these applications services because many people are predicting more service is going to be on boarding faster than ever before. >>It's interesting. So um for us working across multiple cloud environments, there are many similarities in those mps, but for every similarity there is a difference and those differences are actually what dr costs and drive complexity when you're integrating. Um and I think a lot of the role of this is, you know, the irresponsible to talk about the role of an individual company in the computing ecosystem moving to cloud native because as many of these capabilities are unlocked by large cloud providers and transformations in the kinds of software that we run at scale. You know, everybody is a participant in that. But then you look at the broad swath of developer and operator ecosystem and it's the communities of people who paper over those differences, who write run books and build um you know, the policies and who build the experience and the automation. Um not just in individual products or an individual clouds, but across the open source ecosystem. Whether it's technologies like answerable or Terror form, whether it's best practices websites around running kubernetes, um every every part of the community is really involved in driving up uh driving consistency, um driving predictability and driving reliability and what we try to do is actually work within those constraints um to take the ecosystem and to push it a little bit further. So the A. P. I. S. May be similar, but over time those differences can trip you up. And a lot of what I think we talked about where the industry is going, where where we want to be is everyone ultimately is going to own some responsibility for keeping their services running and making sure that their applications and their businesses are successful. The best outcome would be that the A. P. R. S are the same and they're open and that both the cloud providers and the open source ecosystem and vendors and partners who drive many of these open source communities are actually all working together to have the most consistent environment to make portability a true strength. But when someone does differentiate and has a true best to bring service, we don't want to build artificial walls between those. I mean, I mean, that's hybrid cloud is you're going to make choices that make sense for you if we tell people that their choices don't work or they can't integrate or, you know, an open source project doesn't support this vendor, that vendor, we're actually leaving a lot of the complexity buried in those organizations. So I think this is a great time to, as we turn over for cloud. Native looking at how we, as much as possible try to drive those ap is closer together and the consistency underneath them is both a community and a vendor. And uh for red hat, it's part of what we do is a core mission is trying to make sure that that consistency is actually real. You don't have to worry about those details when you're ignoring them. >>That's a great point. Before I get into some architectural impact, I want to get your thoughts on um, the, this trends going on, Everyone jumps on the bandwagon. You know, you say, oh yeah, I gotta, I want a data cloud, you know, everything is like the new, you know, they saw Snowflake Apollo, I gotta have some, I got some of that data, You've got streaming data services, you've got data services and native into the, these platforms. But a lot of these companies think it's just, you're just gonna get a data cloud, just, it's so easy. Um, they might try something and then they get stuck with it or they have to re factor, >>how do you look >>at that as an architect when you have these new hot trends like say a data cloud, how should customers be thinking about kicking the tires on services like that And how should they think holistically around architect in that? >>There's a really interesting mindset is, uh, you know, we deal with this a lot. Everyone I talked to, you know, I've been with red hat for 10 years now in an open shift. All 10 years of that. We've gone through a bunch of transformations. Um, and every time I talked to, you know, I've talked to the same companies and organizations over the last 10 years, each point in their evolution, they're making decisions that are the right decision at the time. Um, they're choosing a new capability. So platform as a service is a great example of a capability that allowed a lot of really large organizations to standardize. Um, that ties into digital transformation. Ci CD is another big trend where it's an obvious wind. But depending on where you jumped on the bandwagon, depending on when you adopted, you're going to make a bunch of different trade offs. And that, that process is how do we improve the ability to keep all of the old stuff moving forward as well? And so open api is open standards are a big part of that, but equally it's understanding the trade offs that you're going to make and clearly communicating those so with data lakes. Um, there was kind of the 1st and 2nd iterations of data lakes, there was the uh, in the early days these capabilities were knew they were based around open source software. Um, a lot of the Hadoop and big data ecosystem, you know, started based on some of these key papers from amazon and google and others taking infrastructure ideas bringing them to scale. We went through a whole evolution of that and the input and the output of that basically let us into the next phase, which I think is the second phase of data leak, which is we have this data are tools are so much better because of that first phase that the investments we made the first time around, we're going to have to pay another investment to make that transformation. And so I've actually, I never want to caution someone not to jump early, but it has to be the right jump and it has to be something that really gives you a competitive advantage. A lot of infrastructure technology is you should make the choices that you make one or two big bets and sometimes people say this, you call it using their innovation tokens. You need to make the bets on big technologies that you operate more effectively at scale. It is somewhat hard to predict that. I certainly say that I've missed quite a few of the exciting transformations in the field just because, um, it wasn't always obvious that it was going to pay off to the degree that um, customers would need. >>So I gotta ask you on the real time applications side of it, that's been a big trend, certainly in cloud. But as you look at hybrid hybrid cloud environments, for instance, streaming data has been a big issue. Uh any updates there from you on your managed service? >>That's right. So one of we have to manage services um that are both closely aligned three managed services that are closely aligned with data in three different ways. And so um one of them is redhead open shift streams for Apache Kafka, which is managed cloud service that focuses on bringing that streaming data and letting you run it across multiple environments. And I think that, you know, we get to the heart of what's the purpose of uh managed services is to reduce operational overhead and to take responsibilities that allow users to focus on the things that actually matter for them. So for us, um managed open shift streams is really about the flow of data between applications in different environments, whether that's from the edge to an on premise data center, whether it's an on premise data center to the cloud. And increasingly these services which were running in the public cloud, increasingly these services have elements that run in the public cloud, but also key elements that run close to where your applications are. And I think that bridge is actually really important for us. That's a key component of hybrid is connecting the different locations and different footprints. So for us the focus is really how do we get data moving to the right place that complements our API management service, which is an add on for open ship dedicated, which means once you've brought the data and you need to expose it back out to other applications in the environment, you can build those applications on open shift, you can leverage the capabilities of open shift api management to expose them more easily, both to end customers or to other applications. And then our third services redhead open shift data science. Um and that is a, an integration that makes it easy for data scientists in a kubernetes environment. On open shift, they easily bring together the data to make, to analyze it and to help route it is appropriate. So those three facets for us are pretty important. They can be used in many different ways, but that focus on the flow of data across these different environments is really a key part of our longer term strategy. >>You know, all the customer checkboxes there you mentioned earlier. I mean I'll just summarize that that you said, you know, obviously value faster application velocity time to value. Those are like the checkboxes, Gardner told analysts check those lower complexity. Oh, we do the heavy lifting, all cloud benefits, so that's all cool. Everyone kind of gets that, everyone's been around cloud knows devops all those things come into play right now. The innovation focuses on operations and day to operations, becoming much more specific. When people say, hey, I've done some lift and shift, I've done some Greenfield born in the cloud now, it's like, whoa, this stuff, I haven't seen this before. As you start scaling. So this brings up that concept and then you add in multi cloud and hybrid cloud, you gotta have a unified experience. So these are the hot areas right this year, I would say, you know, that day to operate has been around for a while, but this idea of unification around environments to be fully distributed for developers is huge. >>How do you >>architect for that? This is the number one question I get. And I tease out when people are kind of talking about their environments that challenges their opportunities, they're really trying to architect, you know, the foundation that building to be um future proof, they don't want to get screwed over when they have, they realize they made a decision, they weren't thinking about day to operation or they didn't think about the unified experience across clouds across environments and services. This is huge. What's your take on this? >>So this is um, this is probably one of the hardest questions I think I could get asked, which is uh looking into the crystal ball, what are the aspects of today's environments that are accidental complexity? That's really just a result of the slow accretion of technologies and we all need to make bets when, when the time is right within the business, um and which parts of it are essential. What are the fundamental hard problems and so on. The accidental complexity side for red hat, it's really about um that consistent environment through open shift bringing capabilities, our connection to open source and making sure that there's an open ecosystem where um community members, users vendors can all work together to um find solutions that work for them because there's not, there's no way to solve for all of computing. It's just impossible. I think that is kind of our that's our development process and that's what helps make that accidental complexity of all that self away over time. But in the essential complexity data is tied the location, data has gravity data. Lakes are a great example of because data has gravity. The more data that you bring together, the bigger the scale the tools you can bring, you can invest in more specialized tools. I've almost do that as a specialization centralization. There's a ton of centralization going on right now at the same time that these new technologies are available to make it easier and easier. Whether that's large scale automation um with conflict management technologies, whether that's kubernetes and deploying it in multiple sites in multiple locations and open shift, bringing consistency so that you can run the apps the same way. But even further than that is concentrating, mhm. More of what would have typically been a specialist problem, something that you build a one off around in your organization to work through the problem. We're really getting to a point where pretty soon now there is a technology or a service for everyone. How do you get the data into that service out? How do you secure it? How do you glue it together? Um I think of, you know, some people might call this um you know, the ultimate integration problem, which is we're going to have all of this stuff and all of these places, what are the core concepts, location, security, placement, topology, latency, where data resides, who's accessing that data, We think of these as kind of the building blocks of where we're going next. So for us trying to make investments in, how do we make kubernetes work better across lots of environments. I have a coupon talk coming up this coupon, it's really exciting for me to talk about where we're going with, you know, the evolution of kubernetes, bringing the different pieces more closely together across multiple environments. But likewise, when we talk about our managed services, we've approached the strategy for managed services as it's not just the service in isolation, it's how it connects to the other pieces. What can we learn in the community, in our services, working with users that benefits that connectivity. So I mentioned the open shift streams connecting up environments, we'd really like to improve how applications connect across disparate environments. That's a fundamental property of if you're going to have data uh in one geographic region and you didn't move services closer to that well, those services I need to know and encode and have that behavior to get closer to where the data is, whether it's one data lake or 10. We gotta have that flexibility in place. And so those obstructions are really, and to >>your point about the building blocks where you've got to factor in those building blocks, because you're gonna need to understand the latency impact, that's going to impact how you're gonna handle the compute piece, that's gonna handle all these things are coming into play. So, again, if you're mindful of the building blocks, just as a cloud concept, um, then you're okay. >>We hear this a lot. Actually, there's real challenges in the, the ecosystem of uh, we see a lot of the problems of I want to help someone automate and improved, but the more balkanize, the more spread out, the more individual solutions are in play, it's harder for someone to bring their technology to bear to help solve the problem. So looking for ways that we can um, you know, grease the skids to build the glue. I think open source works best when it's defining de facto solutions that everybody agrees on that openness and the easy access is a key property that makes de facto standards emerged from open source. What can we do to grow defacto standards around multi cloud and application movement and application interconnect I think is a very, it's already happening and what can we do to accelerate it? That's it. >>Well, I think you bring up a really good point. This is probably a follow up, maybe a clubhouse talk or you guys will do a separate session on this. But I've been riffing on this idea of uh, today's silos, tomorrow's component, right, or module. If most people don't realize that these silos can be problematic if not thought through. So you have to kill the silos to bring in kind of an open police. So if you're open, not closed, you can leverage a monolith. Today's monolithic app or full stack could be tomorrow's building block unless you don't open up. So this is where interesting design question comes in, which is, it's okay to have pre existing stuff if you're open about it. But if you stay siloed, you're gonna get really stuck >>and there's going to be more and more pre existing stuff I think, you know, uh even the data lake for every day to lake, there is a huge problem of how to get data into the data lake or taking existing applications that came from the previous data link. And so there's a, there's a natural evolutionary process where let's focus on the mechanisms that actually move that day to get that data flowing. Um, I think we're still in the early phases of thinking about huge amounts of applications. Microservices or you know, 10 years old in the sense of it being a fairly common industry talking point before that we have service oriented architecture. But the difference now is that we're encouraging and building one developer, one team might run several services. They might use three or four different sas vendors. They might depend on five or 10 or 15 cloud services. Those integration points make them easier. But it's a new opportunity for us to say, well, what are the differences to go back to? The point is you can keep your silos, we just want to have great integration in and out of >>those. Exactly, they don't have to you have to break down the silos. So again, it's a tried and true formula integration, interoperability and abstracting away the complexity with some sort of new software abstraction layer. You bring that to play as long as you can paddle with that, you apply the new building blocks, you're classified. >>It sounds so that's so simple, doesn't it? It does. And you know, of course it'll take us 10 years to get there. And uh, you know, after cloud native will be will be galactic native or something like that. You know, there's always going to be a new uh concept that we need to work in. I think the key concepts we're really going after our everyone is trying to run resilient and reliable services and the clouds give us in the clouds take it away. They give us those opportunities to have some of those building blocks like location of geographic hardware resources, but they will always be data that spread. And again, you still have to apply those principles to the cloud to get the service guarantees that you need. I think there's a completely untapped area for helping software developers and software teams understand the actual availability and guarantees of the underlying environment. It's a property of the services you run with. If you're using a disk in a particular availability zone, that's a property of your application. I think there's a rich area that hasn't been mined yet. Of helping you understand what your effective service level goals which of those can be met. Which cannot, it doesn't make a lot of sense in a single cluster or single machine or a single location world the moment you start to talk about, Well I have my data lake. Well what are the ways my data leg can fail? How do we look at your complex web of interdependencies and say, well clearly if you lose this cloud provider, you're going to lose not just the things that you have running there, but these other dependencies, there's a lot of, there's a lot of next steps that we're just learning what happens when a major cloud goes down for a day or a region of a cloud goes down for a day. You still have to design and work around those >>cases. It's distributed computing. And again, I love the space where galactic cloud, you got SpaceX? Where's Cloud X? I mean, you know, space is the next frontier. You know, you've got all kinds of action happening in space. Great space reference there. Clayton, Great insight. Thanks for coming on. Uh, Clayton Coleman architect at red Hat. Clayton, Thanks for coming on. >>Pretty pleasure. >>Always. Great chat. I'm talking under the hood. What's going on in red hats? New managed cloud service portfolio? Again, the world's getting complex, abstract away. The complexities with software Inter operate integrate. That's the key formula with the cloud building blocks. I'm john ferry with the cube. Thanks for watching. Yeah.

>>Mhm Yes. Hello and welcome back to the cubes coverage of red hat summit 2021 virtual. I'm john for your host of the cube we're here with Hillary Hunter, the VP and CTO and IBM fellow of IBM cloud at IBM. Hillary, Great to see you welcome back, You're no stranger to us in the cube your dentist few times. Thanks for coming on. >>Thanks so much for having me back. Great to talk more today >>I believe I B M is the premier sponsor for red hat summit this year. No, I mean I think they're somewhat interested in what's happening. >>Yeah, you know, somebody is such a great event for us because it brings together clients that, you know, we work together with red head on and gives us a chance to really talk about that overall journey to cloud and everything that we offer around cloud and cloud adoption um, and around redheads capabilities as well. So we look forward to the summit every year for sure. >>You know, the new IBM red hat relationship obviously pretty tight and successful seeing the early formations and customer attraction and just kind of the momentum, I'll never forget that Red hat something was in SAN Francisco. I sat down with Arvin at that time, uh, Red hat was not part of IBM and it was interesting. He was so tied into cloud native. It was almost as if he was dry running the acquisition, which he announced just moments later after that. But you can see the balance. The Ceo at IBM really totally sees the cloud. He sees that experience. He sees the customer impact. This has been an interesting year, especially with Covid and with the combination of red hat and IBM, this cloud priority for IT leaders is more important than ever before. What's your, what's your take on this? Because clearly you guys are all in on cloud, but not what people think, what's your, what's your view on this? >>Yeah. You know, from, from the perspective of those that are kind of data oriented IBM Institute for Business Value, did lots of studies over the last year, you know, saying that over 60% of leaders feel, you know, increased urgency to get to the cloud, um they're intending to accelerate their program to the cloud, but I think, you know, just even as consumers where each very conscious that our digital behaviors have changed a lot in the last year and we see that in our enterprise client base where um everything from, you know, a bank, we work that that that had to stand up their countries equivalent of the payroll protection program in a matter of weeks, which is just kind of unheard of to do something that robust that quickly or um, you know, retail obviously dealing with major changes, manufacturing, dealing with major changes and all consumers wanting to consume things on an app basis and such, not going into brick and mortar stores and such. And so everything has changed and months, I would say have sort of timeframes of months have been the norm instead of years for um, taking applications forward and modernizing them. And so this journey to cloud has compressed, It's accelerated. And as one client I spoke with said, uh, in the midst of last year, you know, it is existential that I get to cloud with urgency and I think That's been that has been the theme of 2020 and now also 2021. And so it is, it is the core technology for moving faster and dealing with all the change that we're all experiencing. >>That's just so right on point. But I got I want to ask you because this is the key trend enterprises are now realizing that cloud native architecture is based on open source specifically is a key architectural first principle now. >>Yeah. >>What's your, what, what would you say to the folks out there who were listening to this and watching this video, Who were out in the enterprise going, hey, that's a good call. I'm glad I did it. So I don't have any cognitive dissidence or I better get there faster. >>Yeah. You know, open source is such an important part of this conversation because I always say that open source moves at the rate and pays a global innovation, which is kind of a cute phrase that I really don't mean it in anyways, cute. It really is the case that the purpose of open sources for people globally to be contributing. And there's been innovation on everything from climate change to you know, musical applications to um things that are the fundamentals of major enterprise mission critical workloads that have happened is everyone is adopting cloud and open source faster. And so I think that, you know this choice to be on open source is a choice really, you know, to move at the pace of global innovation. It's a choice too um leverage capabilities that are portable and it's a choice to have flexibility in deployment because where everyone's I. T is deployed has also changed. And the balance of sort of where people need the cloud to kind of come to life and be has also changed as everyone's going through this period of significant change. >>That's awesome. IBM like Red has been a long supporter and has a history of supporting open source projects from Lenox to kubernetes. You guys, I think put a billion dollars in Lenox way back when it first started. Really power that movement. That's going back into the history books there. So how are you guys all collaborating today to advance the open source solutions for clients? >>Yeah, we remain very heavily invested in open source communities and invested in work jointly with Red Hat. Um you know, we enabled the technology known as um uh Rackham the short name for the Red Hat advanced cluster management software, um you know, in this last year, um and so, you know, provided that capability um to to become the basis of that that product. So we continue to, you know, move major projects into open source and we continue to encourage external innovators as well to create new capabilities. And open source are called for code initiatives for developers as an example, um have had specific programs around um uh social justice and racial issues. Um we have a new call for code out encouraging open source projects around climate change and sustainable agriculture and all those kind of topics and so everything from you know, topics with developers to core product portfolio for us. Um We have a very uh very firm commitment in an ongoing sustained contribution on an open source basis. >>I think that's important. Just to call out just to kind of take a little sidebar here. Um you guys really have a strong mission driven culture at IBM want to give you props for that. Just take a minute to say, Congratulations call for code incredible initiative. You guys do a great job. So congratulations on that. Appreciate. >>Thank you. Thank you. >>Um as a sponsor of Red Hat Summit this year, I am sponsoring the zone Read at um you have you have two sessions that you're hosting, Could you talk about what's going on? >>Yeah, the the two sessions, so one that I'm hosting is around um getting what we call 2.5 x value out of your cloud journey. Um and really looking at kind of how we're working with clients from the start of the journey of considering cloud through to actually deploying and managing environments and operating model on the cloud um and where we can extract greater value and then another session um that I'm doing with Roger Primo, our senior vice President for strategy at IBM We're talking about lessons and clouded option from the Fortune 500, so we're talking there about coca cola european bottling partners, about lumen technologies um and um also about wonderman Thompson, um and what they're doing with us with clouds, so kind of two sessions, kind of one talking a sort of a chalkboard style um A little bit of an informal conversation about what is value meaning cloud or what are we trying to get out of it together? Um And then a session with roger really kind of focused on enterprise use cases and real stories of cloud adoption. >>Alright so bottom line what's going to be in the sessions, why should I attend? What's the yeah >>so you know honest honestly I think that there's kind of this um there's this great hunger I would say in the industry right now to ascertain value um and in all I. T. Decision making, that's the key question right? Um not just go to the cloud because everyone's going to the cloud or not just adopt you know open source technologies because it's you know something that someone said to do, but what value are we going to get out of it? And then how do we have an intentional conversation about cloud architecture? How do we think about managing across environments in a consistent way? Um how do we think about extracting value in that journey of application, modernization, um and how do we structure and plan that in a way? Um that results in value to the business at the end of the day, because this notion of digital transformation is really what's underlying it. You want a different business outcome at the end of the day and the decisions that you take in your cloud journey picking. Um and open hybrid, multi cloud architecture leveraging technologies like IBM cloud satellite to have a consistent control plan across your environments, um leveraging particular programs that we have around security and compliance to accelerate the journey for regulated industries etcetera. Taking intentional decisions that are relevant to your industry that enable future flexibility and then enable a broad ecosystem of content, for example, through red hat marketplace, all the capabilities and content that deploy onto open shift, et cetera. Those are core foundational decisions that then unlock that value in the cloud journey and really result in a successful cloud experience and not just I kind of tried it and I did or didn't get out of it what I was expecting. So that's really what, you know, we talk about in these in these two sessions, um and walk through um in the second session than, you know, some client use cases of, of different levels and stages in that cloud journey, some really core enterprise capabilities and then Greenfield whitespace completely new capabilities and cloud can address that full spectrum. >>That's exciting not to get all nerdy for a second here, But you know, you bring up cloud architecture, hybrid cloud architecture and correct me if I'm wrong if you're going to address it because I think this is what I'm reporting and hearing in the industry against the killer problem everyone's trying to solve is you mentioned, um, data, you mentioned control playing for data, you mentioned security. These are like horizontally scalable operating model concepts. So if you think about an operating system, this is this is the architecture that becomes the cloud model hybrid model because it's not just public cloud cloud native or being born in the cloud. Like a startup. The integration of operating at scale is a distributed computing model. So you have an operating system concept with some systems engineering. Yeah, it sounds like a computer to me, right. It sounds like a mainframe. Sounds like something like that where you're thinking about not just software but operating model is, am I getting that right? Because this is like fundamental. >>Yeah, it's so fundamental. And I think it's a great analogy, right? I think it's um you know, everyone has kind of, their different description of what cloud is, what constitutes cloud and all that kind of thing, but I think it's great to think of it as a system, it's a system for computing and what we're trying to do with cloud, what we're trying to do with kubernetes is to orchestrate a bunch of, you know, computing in a consistent way, as, you know, other functions within a single server do. Um What we're trying to do with open shift is, you know, to enable um clients to consume things in a consistent way across many different environments. Again, that's the same sort of function um conceptually as, you know, an operating system or something like that is supposed to provide is to have a platform fundamentally, I think the word platform is important, right? Have a platform that's consistent across many environments and enables people to be productive in all those environments where they need to be doing their computing. >>We were talking before we came on camera about cloud history and we were kind of riffing back and forth around, oh yeah, five years ago or six years ago was all the conversations go to the cloud now, it's like serious conscience around the maturity of cloud and how to operate that scale in the cloud, which is complex, it's complex system and you have complexity around system complexity and novelty complexity, so you have kind of all these new things happening. So I want to ask you because you're an IBM fellow and you're on the cloud side at IBM with all this red hat goodness you've got going on, Can you give us a preview of the maturity model that you see the IBM season, that red hats doing so that these architectures can be consistent across the platforms, because you've got def sec ops, you've got all these new things, you've got security and data at scale, it's not that obviously it's not easy, but it has to be easier. What's what's the preview of the maturity model? >>Yeah, you know, it really is about kind of a one plus one equals three conversation because red hats approach to provide a consistent platform across different environments in terms of Lennox and Kubernetes and the open shift platform um enables that first conversation about consistency and maturity um in many cases comes from consistency, being able to have standards and consistency and deployment across different environments leads to efficiency. Um But then IBM odds on that, you know, a set of conversations also around data governance, um consistency of data, cataloguing data management across environments, machine learning and ai right bringing in A. I. For I. T. Operations, helping you be more efficient to diagnose problems in the IT environment, other things like that. And then, you know, in addition, you know, automation ultimately right when we're talking about F. R. I. T. Ops, but also automation which begins down at the open shift level, you know with use of answerable and other things like that and extends them up into automation and monitoring of the environment and the workloads and other things like that. And so it really is a set of unlocking value through increasing amounts of insight, consistency across environments, layering that up into the data layer. Um And then overall being able to do that, you know efficiently um and and in a consistent way across the different environments, you know, where cloud needs to be deployed in order to be most effective, >>You know, David Hunt and I always talk about IBM and all the years we've been covering with the Cube, I mean we've pretty much been to every IBM events since the Cube was founded and we're on our 11th year now watching the progression, you guys have so much expertise in so many different verticals, just a history and the expertise and the knowledge and the people. They're so smart. Um I have to ask you how you evolved your portfolio with the cloud now um as it's gone through, as we are in the 2021 having these mature conversations around, you know, full integration, large scale enterprise deployments, Critical Mission Mission Critical Applications, critical infrastructure, data, cybersecurity, global scale. How are you evolve your portfolio to better support your clients in this new environment? >>Yeah, there's a lot in there and you hit a lot of the keywords already. Thank you. But but I think that you know um we have oriented our portfolio is such that all of our systems support Red hat um and open shift, um our cloud, we have redhead open shift as a managed service and kubernetes is at the core of what we're doing as a cloud provider and achieving our own operational efficiencies um from the perspective of our software portfolio, our core products are delivered in the form of what we refer to as cloud packs on open shift and therefore deploy across all these different environments where open shift is supported, um products available through Red hat marketplace, you know, which facilitates the billing and purchasing an acquisition and installation of anything within the red hat ecosystem. And I think, you know, for us this is also then become also a journey about operational efficiency. We're working with many of our clients is we're kind of chatting about before about their cloud operating model, about their transformation um and ultimately in many cases about consumption of cloud as a service. Um and so um as we, you know, extend our own cloud capabilities, you know, out into other environment through distributed cloud program, what we refer to as as IBM cloud satellite, you know, that enables consistent and secure deployment of cloud um into any environment um where someone needs, you know, cloud to be operated. Um And that operating model conversation with our clients, you know, has to do with their own open shift environments that has to do with their software from IBM, it has to do their cloud services. And we're really ultimately looking to partner with clients to find efficiency in each stage of that journey and application modernization in deployment and then in getting consistency across all their environments, leveraging everything from uh the red hat, you know, ACM capabilities for cluster management up through a i for beauty shops and automation and use of a common console across services. And so it's an exciting time because we've been able to align our portfolio, get consistency and delivery of the red half capabilities across our full portfolio and then enable clients to progress to really efficient consumption of cloud. >>That's awesome. Great stuff there. I got to ask you the question that's on probably your customers minds. They say, okay, Hillary, you got me sold me on this. I get what's going on, I just gotta go faster. How do I advance my hybrid cloud model faster? What are you gonna do for me? What do you have within the red hat world and IBM world? How are you gonna make me go faster? That's in high quality way? >>Yeah. You know, we often like to start with an assessment of the application landscape because you move faster by moving strategically, right? So assessing applications and the opportunity to move most quickly into a cloud model, um, what to containerized first, what to invest in lift and shift perspective, etcetera. So we we help people look at um what is strategic to move and where the return on investment will be the greatest. We help them also with migrations, Right? So we can help jump in with additional skills and establish a cloud center of competency and other things like that. That can help them move faster as well as move faster with us. And I think ultimately choosing the right portfolio for what is defined as cloud is so important, having uh, an open based architecture and cloud deployment choice is so important so that you don't get stuck in where you made some of your initial decisions. And so I think those are kind of the three core components to how we're helping our clients move as quickly as possible and at the rate and pace that the current climate frankly demands of everyone. >>You know, I was joking with a friend the other night about databases and how generations you have an argument about what is it database, what's it used for. And then when you kind of get to that argument, all agree. Then a new database comes along and then it's for different functions. Just the growth in the internet and computing. Same with cloud, you kind of see a parallel thing where it's like debate, what is cloud? Why does he even exist? People have different definitions. That was, you know, I mean a decade or so ago. And then now we're at almost another point where it's again another read definition of, okay, what's next for cloud? It's almost like an inflection point here again. So with that I got to ask you as a fellow and IBM VP and Cto, what is the IBM cloud because if I'm going to have a discussion with IBM at the center of it, what does it mean to me? That's what people would like to know. How do you respond to that? >>Yeah. You know, I think two things I think number one to the, to the question of accelerating people's journeys to the cloud, we are very focused within the IBM cloud business um on our industry specific programs on our work with our traditional enterprise client base and regulated industries, things like what we're doing in cloud for financial services, where we're taking cloud, um and not just doing some sort of marketing but doing technology, which contextualize is cloud to tackle the difficult problems of those industries. So financial services, telco uh et cetera. And so I think that's really about next generation cloud, right? Not cloud, just for oh, I'm consuming some sauce, and so it's going to be in the cloud. Um but SAS and I SV capabilities and an organization's own capabilities delivered in a way appropriate to their industry in in a way that enables them to consume cloud faster. And I think along those lines then kind of second thing of, you know, whereas cloud headed the conversation in the industry around confidential computing, I think is increasingly important. Um It's an area that we've invested now for several generations of technology capability, confidential computing means being able to operate even in a cloud environment where there are others around um but still have complete privacy and authority over what you're doing. And that extra degree of protection is so important right now. It's such a critical conversation um with all of our clients. Obviously those in things like, you know, digital assets, custody or healthcare records or other things like that are very concerned and focused about data privacy and protection. And these technologies are obvious to them in many cases that yes, they should take that extra step and leverage confidential computing and additional data protection. But really confidential computing we're seeing growing as a topic zero trust other models like that because everyone wants to know that not only are they moving faster because they're moving to cloud, but they're doing so in a way that is without any compromise in their total security, um and their data protection on behalf of their clients. So it's exciting times. >>So it's so exciting just to think about the possibilities because trust more than ever now, we're on a global society, whether it's cyber security or personal interactions to data signing off on code, what's the mutability of it? I mean, it's a complete interplay of all the fun things of uh of the technology kind of coming together. >>Absolutely, yeah. There is so much coming together and confidential computing and realizing it has been a decade long journey for us. Right? We brought our first products actually into cloud in 2019, but its hardware, it's software, it services. It's a lot of different things coming together. Um but we've been able to bring them together, bring them together at enterprise scale able to run entire databases and large workloads and you know um pharmaceutical record system for Germany and customer records for daimler and um you know what we're doing with banks globally etcetera and so you know it's it's wonderful to see all of that work from our research division and our developers and our cloud teams kind of come together and come to fruition and and really be real and be product sizable. So it's it's very exciting times and it's it's a conversation that I think I encourage everyone to learn a little bit more about confidential computing. >>Hillary hunter. Thank you for coming on the cube. Vice President CTO and IBM fellow which is a big distinction at IBM. Congratulations and thanks for coming on the Cuban sharing your insight. Always a pleasure to have you on an expert always. Great conversation. Thanks for coming on. >>Thanks so much for having me. It was a pleasure. >>Okay, so cubes coverage of red Hat Summit 21 of course, IBM think is right around the corner as well. So that's gonna be another great event as well. I'm john Feehery, a host of the cube bringing all the action. Thanks for watching. Yeah.

>>from >>around the >>globe, it's the >>Cube with digital coverage of IBM, think 2020 >>one brought to you by IBM. >>Welcome back to the cubes coverage of IBM think 2021 we're gonna talk about the Edge like what is the Edge, how it's going to evolve? And we're gonna take a look at an autonomous vessel use case, which is quite interesting with me is rob high and IBM fellow VP and Cto, IBM edge computing rob. Welcome. It's great to see you again. >>Thanks. Dave appreciate that. Good seeing you too. >>Yeah, So let's start with the basic question here, you know, people are like, well what is the Edge? Like it's one big thing and it's not, it's, it's many things, but how should we think about the edge and why should enterprises, you know, feel like it's necessary to begin to lean in? >>Well, let's just start with the use cases. Uh, you know, what edge means is the ability to put a camera on the manufacturing floor, you know, perhaps juxtaposed with a robot monitoring the work that the robot is doing using ai visual recognition to detect whether what that robot is doing is producing high quality parts or not. And to be able to do that in real time to be able to use that analytic then too, you know, quickly remediate any kind of quality issues, helps lower cost, it helps increase your yield and it helps increase the overall efficiency of your production processes. Or if not that, then putting it in something that's perhaps a bit more familiar to us. The idea of an autonomous vehicle, you know, be able to, you know, dr and do driver assistance to driver safety kinds of features, you know, all of that requires compute and having that compute where people are actually performing these tasks based on the data that they're receiving at the moment they receive it be able to process that real time, give them the feedback that allows them to make better decisions to be able to do that not only with lower latency, but actually with better protection of their data, better protection of their personal information or private information. If you're thinking about the business in which they operate, you know, be able to do that even when the network fails to be able to do that without necessarily have to transmit tons and tons of data back to the cloud, especially if you end up not actually using that anywhere. That's what as computing really means. >>Yeah. So it sounds like the edges, maybe we shouldn't think of it as a place, but the most logical place to process the data of, depending on late and see and other factors. It's that's a good way to look at it. So it's >>yeah, just where we do our work. >>Yeah. Well you do the work, right. That that makes a lot of sense. Thank you for that. So you know, we always we're talking about the pandemic, changing the way we think about things. And I wonder if you can comment on the the edge context as we come back From we work from home or remote work. You know, I think 2022, we hope it's going to be face to face. Uh good edge play a part in that. Has the pandemic uh made you think differently about the opportunities that edge? >>Yeah. And in fact what we've seen is the pandemic is actually beginning to accelerate digital transformation. If you think about it, you know any store they wanted to survive. This pandemic could only do so by basically introducing a digital presence, you know, the ability to buy online. And even if you're picking up at the store, picking up the curbside, you know you can't go into a restaurant without getting that Q. R. Code that gives you your digital menu. Um Trying to get workers back into factories as well as the warehouses and offices. And to do so safely be able to ensure that they're wearing their face masks and socially distancing properly. All of these things I think have driven digital transformation. And if you think about the task of buying online and picking up the store well stories better have a pretty good idea of where their inventory is. Um They need to know exactly where that product is. So they can quickly pick it and get it available to the client before they arrive at the store. Um And so that's edge computing. We need edge computing to be able to to automate the processes of inventory tracking down to individual items and where they're located throughout the store. To be able to do the recognition for whether people are or not maintaining social distancing or wearing the PP. E. Um to be able to ensure that our processes or as automated as possible to limit the amount of human interaction that's required in order to perform these processes. All of that I think has accelerated both digital transformation as well as particularly the use of edge computing uh in all of our businesses. >>I think about, you know, the force marched to digital in 2020 and if you weren't a digital business you were out of business. But you're my big takeaway from what you just said is a digital transformation is just starting. And now people really have some time to think about that, that digital strategy and and as we think about doing things you know more safely, maybe with less human intervention, we love autonomous vehicles. Examples, just because they're technically they're challenging. But I wonder if you could tell us the story of the Mayflower autonomous ship, its upcoming journey, it's going to be cruelest across the atlantic, unbelievable collecting data. You know, talk about how edge relates to that story. What can you tell us? >>Well, first of all, this is simply talk about the task of navigating a ship from one port on one side of the world too, another port across the ocean, across the atlantic. Um you know, the ocean is a dangerous place. Yes, it's wide open, it's you know, lots of water, but the reality is it's full of barriers. Of course, you've got land barriers, you've got other ships, you've got marine life, you've got debris that gets dropped in the ocean. And so the task of navigating is actually quite difficult. And again, to the same point that we made earlier, you have to have local compute in order to really be able to make those decisions fast enough with enough acuity with enough clarity to be able to be able to safely safely navigate around those kinds of obstacles. So we have to put compute in the ship. So the may fire ship is as I sort of implied a ship that will be autonomous. There are no human beings involved in in operating the ship. It has to be able to on its own. Both recognize these obstacles, recognizing the ship, recognize about, recognize um, you know, that cargo, uh, container that happened to have fallen off some other ships and floating through the ocean, recognize, you know, rain life, uh, whales and other other fish and birds that might be, uh, in the way. Um, and, and, and to be able to um, do all that, you know, entirely without any human invention. So that compute power is really a prime example of an edge computer. It is compute in the, in the business of navigation, making decisions about the things that it sees and making decisions about how best to circumvent those issues. Um, Now along the way, I should also say part of what the Mayflower ship that's going to do is not only exercise the task of navigation and prove that these algorithms can efficiently and effectively bring that shit from one side of the world to the other side safely. But along the way, it's going to conduct science is going to collect water samples for the chemical makeup of the oceans. At various points along the way it's going to be sampling for microplastics are examining phytoplankton for its health and liveliness. It's going to be the detecting wave motions and the wave energy that might be indicative of how the world is transforming in the presence of global climate change. Um These science packages that are going to be formed are also being performed autonomously without inhuman invention. And that actually opens up a very exciting potential future, which is the idea of these autonomous ships navigating the oceans, collecting data that can then be brought back for the scientists to examine so that they the scientists are not having to go out and spend weeks and months at a time in these perilous conditions, these potentially lonely conditions um collecting that data, but rather they can remain safely on land. The ship will collect the data and they can analyze that data from their home labs. So this is actually a really exciting project, but one that I think will demonstrate not only the idea that computing, but also the advances in navigation and marine science. >>Yeah, because I mean the ship has to navigate itself. Not only is it bringing back data, but there's a great, great example. I mean a lot of the work in machine intelligence today is uh in the modeling side. This is this is this is inference going on in near real time, uh which we think is where the action is. That's why we love the autonomous because there's a lot of IBM tech involved in here as well. Is there not? I mean, you've got to have software and you've got your edge devices, you've got, you know, automation capabilities. I mean, it's not all right. This is like serious technical challenge. >>Yeah. Well, we were approached by the primary team on this project and it didn't take us long to realize the utility that some of our technology would have to dancing their project. And so you're right. I mean, we have things like operations, decision and ODM which typically is used in the things of the services industry, but now it's being applied to the rules of navigation would call the cold cold rags. Um We've got our Ai services that do visual recognition because obviously we've got to be able to detect and identify um, the things that the ship is seeing along the way and be able to distinguish what those things are. Uh we have our imagine application manager which is being used to manage deployment of these kinds of workloads and frankly all of the workloads that are hosted in the ship, getting that managed and deployed onto the ship. Uh and and of course, you know, all these things have to be integrated. And so that's just a small sampling of the kinds of technologies. But it's a good example of where I think the edge kind of represents the culmination of what we have all been working within this industry, which is how do we bring technologies together to solve a problem as an integrated solution? >>You mentioned financial services. So I wonder if we could, you know, think beyond shipping, maybe what, what are you seeing in other industries? Are there any patterns that are developing, where clients are saying, hey, we need this sort of this capability? What can you tell us? >>So, I think it is, it's probably greatest demand right now in manufacturing, uh, in industrial 4.0, uh, kinds of environments where, you know, most of the industry, the industrial industries and markets have grown up largely dependent upon operations technology. Ot but one of the things that people need in these kind of environments is the additional benefits that come from A. I and we talked about using ai to do visual recognition on manufacturing processes, looking at quality inspection, for example, but there's other aspects of production optimization of workers safety. We talked a little bit about that around uh, predictive maintenance and asset management. Uh, you know, these kinds of additional things that are necessary to really to run your factory efficiently or you're you're drilling rig or your energy production systems. All these kinds of industrial processes can benefit from the advances that are occurring in analytics. And um, and, and then of course, having localized compute to do that with, to both do these kinds of decisions in real time, but also to offload the amount of transmission that we end up transmitting back to the cloud. So industry 40 or manufacturing is one big area retail. We talked about that, but you think about point of sale terminals and the idea of being able to do offers at point of sale to be able to do price checking to help you navigate the stores, digital signage. Um, you know, all the user experiences, spillage and spoilage and loss prevention. These are all kinds of use cases that will benefit retail retailers. Um, lot demand, of course. Again, the need to be able to do that locally within the store. We talked to touch a little bit on automotive. The whole automotive industry right now is going through a really fundamental transformation where virtually every automobile now is being imbued with more and more compute capacity and localized processing for doing driver safety and car maintenance and, and, and even short of, you know, full autonomy, which is of course is another topic in its own right. Uh lots of experiences that can be brought there as well. So lots of opportunity and distribution, manufacturing, retail banking. Virtually every industry that we've looked at has some opportunity for leveraging the benefits of the computer. Yeah, >>it's hard to get cars right now because the chip shortest. But I wonder real quick if you could talk about five G, you hear a lot about five Gs tons of hype there. How should we be thinking about 5G? How real is it? What's your take in terms of its impact on the edge? >>So a couple of thoughts here, one is 5G obviously is accelerating And it has the effect of accelerating edge computing because one of the benefits of 5G of course is lower latency and higher bandwidth. And that opens people's minds. The potential to leverage the network connectivity of equipment that otherwise is hard to connect. If you think about the factory floor for a moment and all the kinds of equipment you have on the factory floor. If you had to hardwire all that equipment to get access to the compute power on that, that could be a very expensive proposition. You'd like to kind of wirelessly connect that equipment and that's one of things that five day brings to the table because some of the spectrum five take uses has less potential to interfere with that equipment than than you would otherwise. So I think that what we're going to see is 5G will disproportionately benefit. I'll call him industrial or commercial use cases as compared to four G. And L. T. Which were very much centered on consumer use case five Gs accelerating edge computing in many ways Five G actually depends on edge computing doesn't mean that we can't do edge computing without five do we can we can certainly do it for dlt even wire line But I think 5G is going to have a very symbiotic effect on edge computing. >>Yeah just like wifi was enabler mobile but this is much much much larger potential rob. We gotta go. Thanks so much for coming on and sharing your insights. I'd love to have you back, awesome. Thanks. >>Alright appreciate it. Thank >>you for watching everybody's Day Volonte for the cubes coverage of IBM. Think 2020 21 2021 will be right back. >>Yeah. >>Yeah.

>>from >>Around the globe. It's the cube with digital coverage of IBM think 2021 brought to you by IBM. >>Welcome back to the cubes ongoing coverage of IBM Think 2021 virtual cube, you know, the pandemic has caused us to really rethink this this whole concept of operational resilience and we're gonna dig into that and talk about the importance of constructing a holistic resilience plan and get the perspective of some really great domain experts. Alan Downs is the vice president, global Cloud security and resiliency services at IBM and he's joined by MS Michelle what? Weston who is the director of cloud security and resiliency offerings at IBM folks. Welcome to the cube. Thanks for coming on. >>Thank you. >>Now before we get into it, I said IBM but I want to ask you, alan about an announcement you made last month about Kendrell new spin out from IBM. What can you tell us? >>Very excited about the name? I think there's a lot of meaning in the name centered around new growth and censored around partnership and relationship. So if you look at the name that was announced I think it really does typify what we set out to be as a trusted partner in the industry. All born around new growth centered around strong partnership and relationship. So very pleased and excited and look forward to the opportunity we have going forward. >>Yeah congratulations on that. Had some clarity martin schroder. New ceo Cubillan. Great executive love it. So good luck. Um Alan let me stay with you for a second. I mean operational resilience it means different things to different people and we know from speaking with C. IOS in our community during the pandemic. It doesn't just mean disaster recovery. In fact a lot of C. I. O. Said that their business continuing strategy were too focused on on D. R. Ellen. What does operational resilience mean from your perspective? >>So I'll answer it this way. Operational resiliency risk is defined as the quantifiable steps that any client needs to take in order to respond, recover from an unplanned outage. It sits squarely within operational risk. And if you think about it, operational risk is the kind of non financial element of risk. And defined within that category, operational resiliency risk is trying to identify those steps both pre active and reactive that a client needs to consider that they would have to take in the event of an unplanned disruption or an unplanned outage that would impact their ability to serve their clients or to serve their organization. That's how I define operational resiliency risk. >>Great and I wonder Michelle if you can add to that but I think you know I sometimes say that the pandemic was like a forced march to digital and part of that was business resilience. But You know, where do we go from here? You know, we had 14 months shoved into our face and now we have some time to think about. So how should clients think about evolving their strategies in this regard? >>Yeah, Well, certainly with respect to what was called Newco now, Kendrell, um our approach has been advisory led. Uh we will help clients along this journey. Uh, one thing that I'd like to point out in one of the journeys that we've been taking over the last couple of years is it really is about security and resiliency together. If you think of that planning and how to mitigate your operational risk, the security and resiliency go hand in hand through the same people within the organization that are planning for that and worried about it. And so we had already started about three years ago to pull the two together and to have a unified value proposition for clients around security and resiliency, both being advisory lead, doing everything for a client from project based to the digital consumption world which we know clients live in today to a fully managed service all around security and resiliency together. >>Yeah, so I mean it's really important topic. I mean you heard Chair Powell last month. He was he was on 60 minutes saying well yeah worried about inflation, were way more worried about security. So so alan you know, were let's say you're in the virtual, you know, conference room with the board of directors. What's that conversation like? Uh where does it start? >>I think there is a huge concern right now with regard to security and obviously resiliency as well. But if you just think about what we've all been through and what's transpired in the last 12 months, the what we call the threat landscape has broadened significantly and therefore clients have had to go through a rapid transformation not just by moving employees to home base, but also their clients having a much higher expectation in terms of access to systems, access to transactions which are all digital. So you referred to it earlier. But the transformation, our clients have had to go on driving a higher dependence on those systems that enable them to serve their clients digitally and enable them to allow the employees to work remotely in this period has increased the dependencies that they have across the environment that are running many of the critical business processes. So the discussion in the boardroom is very much are we secure? Are we safe? How do we know how safe and secure and resilient should we be? And based on that fact about how safe and secure should we be? Where are we today as an organization? And I think these are the questions that are at the boardroom is basically from a resiliency security perspective, where should we be that supports our strategy vision and our client expectation? And then the second question is very much where are we today? How do we know that we are secure? How do we know that we can recover from any unplanned or unforeseen disruption to our environments? >>So Michelle, I mean I just mentioned the threat surface is expanding and we're just getting started, everybody's like crazy about five G leaning in the edge Iot and that's just uh this could be orders of magnitude by the end of the decade compared to where it is today. So how do you think about the key steps that organizations should should take to ensure operational resilience, you know, not only today, but also putting in a road map. >>Yeah, yeah. And and one thing that we do know from our clients is those that have actually planned for resiliency and security at the forefront. They tend to do that more effectively and more efficiently. Um It's much better to do that than to try to do that after an outage. You certainly learn a lot. Um but that's not the experience that you want to go through. You want to have that planning and strategy in the forefront. As Alan said in terms of the threat vector, the pandemic brought that on as well. We saw surgeons Of cyberattacks, opportunistic attacks. Um you know, we saw the best of people in the pandemic as well as the worst in people. Some of those attacks were on agencies that we're trying to recover. We're trying to treat the public with respect to the COVID-19 pandemic. So none of us can let our guard down here. I think we can anticipate that that's only going to increase. And with the emergence of these new technologies like cloud, we know that there's been such a massive benefit to clients. In fact those that were cloud enabled to sustain their businesses during the pandemic full stop. But with that comes a lot more complexity. Those threat vectors increase five G. I expect to be the same. So again, resilience and security have never been more relevant. More important, we see a lot of our clients putting budget there and those that plan for it with a strategic mindset and understand that whatever they have today may be good enough, but in the future they're going to have to invest and continue to evolve that strategy. Are those that have done the best. >>Yeah, the bolt on strategy doesn't doesn't really work that well, but and I wonder if you think about when we talk to CSOS for example, and you ask them what's your biggest challenge? They'll say things like lack of talent. We got too many tools. It's just as we're on the hamsters on wheels. So I would think that's, you know, unfortunately for some, but it's good for your, your business. That's that's a dynamic that you can help with. I mean you're a services organization, you got deep expertise in this. So I wonder if you could, could talk a little bit about that, that lack of talent, that skills gap and how you guys address that. >>I think this is really the fit for managed services providers like Kendrell, um, certainly with some of our largest clients, if we look at Peta as an example, that notion of phone a friend is really important when it starts to go down and you're not sure what you're gonna do next. You want the expertise, you want to be able to phone someone and you want to be able to rely on them to help you recover your most critical data. One of the things clients have also been asking us for is a vaulted capability, almost like the safe deposit box for your data and your critical applications. Being able to put them somewhere and then in the event of needing to recover, um, you certainly could call someone to help you do exactly that >>Ellen. I wonder if you can address this. I mean, I like IBM I was I'm a customer. I trust IBM. What's your relationship? Are you still gonna, you know, be able to allow me to tap the pieces that that I like and maybe you guys can be more agile in some respects, maybe you can talk about that a little bit. >>She has Sure, Dave and many of our clients, we have a long history with a very positive experience of delivering, you know, market leading and high high quality of services and product the relationship continue. So we will remain very close to IBM and we will continue to work with many of IBM's customers as will IBM work with our customers going forward. So the relationship, I believe whilst a different dynamic will continue and I believe engenders an opportunity for growth and you know, we mentioned earlier the very name signifies the fact that it's new growth and I do think that that partnership will continue and we'll continue together to deliver the type of service, the quality of products and services that our clients have, you know, enjoyed from IBM over the last number of years, >>Michelle my, one of my takeaway from your earlier comments as you guys are hands on consultative in nature. Um, and I think about the comment I made about a lot of Ceo said we were way too d our focus. But when I think about d are a lot of times it was a checkbox to the board. Hey, we got it. But it was last time you tested it. Well, we don't test it because it's too risky to test. You know, we, we do fail over, but we don't fail back because it's just too risky. Can I stress test, you know, my environment, we, at the point now where technology and expertise will allow us to do that is that part of what you bring to the table? >>It is exactly exactly what we bring to the table. So from a first of all, from a compliance and regulatory perspective, you no longer have that option. A lot of the auditors are asking you to demonstrate your d our plan. We have technology and I think we've talked about this before about the automation that we have in our portfolio with resiliency orchestration that allows you to see the risk in your environment on a day to day basis. Proactively manage it. I tried to recover this, there's a there's a failure and then you're able to proactively address it. I also give the example from a resiliency orchestration perspective in this very powerful software automation that we have for D. R. We've had clients that have come in scheduled A. D. R. Test, it was to be all day they've ordered in lunch And the D. R. test fail over failed back took 22 minutes and lunch was canceled. >>I love >>it. Very powerful and very powerful with an auditor. >>That's awesome. Okay guys, we've got to leave it there. Really great to get the update. Best of luck to you and congratulations. Thanks for coming on. >>Thank you so much >>and thank you for watching. This is Dave Volonte for the cubes continuous coverage of IBM think 2021 right back. >>Mhm.

>>From around the globe. It's the Cube with digital coverage of IBM think 2021 brought to you by >>IBM. Welcome back to IBM Think 2021. This is the cubes ongoing coverage where we go out to the events, we extract the signal from the noise of course, virtually in this case now we're going to talk about ecosystems, partnerships in the flywheel, they deliver in the technology business and with me or Jason kelly, general manager, global strategic partnerships, IBM global business services and Mani Das Gupta, who is the vice president of marketing for IBM Global Business services folks. It's great to see you again in which we're face to face. But this will have to do >>good to see you Dave and uh same, I wish we were face to face but uh we'll we'll go with this >>soon. We're being patient, Jason. Let's start with you. You have a partner strategy. I wonder if you could sort of summarize that and tell us more about it. >>So it's interesting that we start with the strategy because you said we have a partner strategy dave and I'd say that the market has dictated back to us a partner strategy something that we it's not new and we didn't start it yesterday. It's something that we continue to evolve and build even stronger. This thought of a partner strategy is it nothing is better than the thought of a partner ship. And people say oh well you know you got to work together as one team and as a partner And it sounds almost as a 1-1 type relationship. Our strategies is much different than that. David our execution is even better and that that execution is focused on now. The requirement that the market our clients are showing to us and our strategic partners that one player can't deliver all their needs, they can't Design solution and deliver that from one place. It does take an ecosystem to the word that you called out. This thought of an ecosystem and our strategy and execution is focused on that. And the reason why I say it evolves is because the market will continue to evolve and this thought of being able to look at a client's let's call it a a workflow, let's call it a value chain from one end to the other, wherever they start their process to wherever it ultimately hits that end user. It's going to take many players to cover that. And then we, as IBM want to make sure that we are the general contractor of that capability with the ability to convene the right strategic partners, bring out the best value for that outcome, not just technology for technology's sake, but the outcome that the incline is looking for so that we bring value to our strategic partners and that in client. >>I think about when you talk about the value chain, you know, I'm imagining, you know, the business books years ago you see the conceptual value chain, you can certainly understand that you can put processes together to connect them and now you've got technology, I think of a P. I. S. It's it's really supports that everything gets accelerated and and uh money. I wonder if you could address some of the the go to market how this notion of of ecosystem which is so important, is impacting the way in which you go to market. >>Absolutely. So modern business, you know, demands a new approach to working the ecosystem. Thought that Jason was just alluding to, it's a mutual benefit of all these companies working together in the market, it's a mutual halo of the brands, so as responsible for the championship of the IBM and the global business services brand. I am very, very interested in this mutual working together. It should be a win win win, as we say in the market, it should be a win for our clients, first and foremost, it should be a win for our partners and it should be a win for IBM and we are working together right now on an approach to bring this, go to market strategy to life. >>So I wonder if we could maybe talk about how this actually works and and pull in some examples, uh you must have some favorites that that we can touch on. Uh is that, is that fair? Can we, can we name some names, >>sure names, always working debut, right. And it's always in context of reality that we can talk about, as I said, this execution and not just a strategy. And I'll start with probably what's right in the front of many people's minds as we're doing this virtually because of what because of an unfortunate pandemic, um, this disastrous loss of life and things that have taken us down a path. We go well, how do we, how do we address that? Well, any time there's a tough task, IBM raises its hand first. You know, whether it was putting a person on the moon and bringing them home safely or standing up a system behind the current Social Security Administration, you know, during the Depression, you pick it well here we are now. And why not start with that as an example? Because I think it calls out just what we mentioned here first day, this thought of a, of an ecosystem because the first challenge, how do we create uh and address the biggest data puzzle of our lives, which is how do we get this vaccine created in record time, which it was the fastest before that was four years. This was a matter of months. Visor created the first one out and then had to get it out to distribution. Behind. That is a wonderful partner of R. S. A. P. Trying to work with that. So us working with S. A. P. Along with Pfizer in order to figure out how to get that value chain. And some would say supply chain, but I'll address that in a second. But there's many players there. And so we were in the middle of that with fires are committed to saying, how do we do that with S. A. P. So now you see players working together as one ecosystem. But then think about the ecosystem that that's happening where you have a federal government agency, a state, a local, you have healthcare, life science industry, you have consumer industry. Oh wait a second day. This is getting very complicated, Right? Well, this is the thought of convening an ecosystem and this is what I'm telling you is our execution and it has worked well. And so it's it's it's happening now. We still it's we see it's still developing and being, being, you know, very productive in real time. But then I said there was another example and that's with me, you mani whomever you pick the consumer. Ultimately we are that outcome of of the value chain. That's why I said, I don't want to just call it a supply chain because at the end is a someone consuming and in this case we need a shot. And so we partnered with Salesforce, IBM and Salesforce saying, wait a minute, that's not a small task. It's not just get the content there and put it in someone's arm instead they're scheduling that must be done. There's follow up an entire case management like system sells force is a master at this, so work dot com team with IBM, we sit now let's get that part done for the right type of UI UX capability that the user experience, user interaction interface and then also in bringing another player in the ecosystem, one of ours Watson health along with our block changing, we brought together something called a Digital Health pass. So I've just talked about two ecosystems work multiple ecosystems working together. So you think of an ecosystem of ecosystems. I called out Blockchain technology and obviously supply chain but there's also a I I O T. So you start to see where look this is truly an orchestration effort. It has to happen with very well designed capability and so of course we master and design and tying that that entire ecosystem together and convening it so that we get to the right outcome you me money all getting into shot being healthy. That's a real time example of us working with an ecosystem and teeming with key strategic partners, >>you know, money, I mean Jason you're right. I mean pandemics been horrible, I have to say. I'm really thankful it didn't happen 20 years ago because it would have been like okay here's some big pcs and a modem and go ahead and figure it out. So I mean the tech industry has saved business. I mean with not only we mentioned ai automation data, uh even things basic things like security at the end point. I mean so many things and you're right, I mean IBM in particular, other large companies you mentioned ASAP you have taken the lead and it's really I don't money, I don't think the tech industry gets enough credit, but I wonder if there's some of your favorite, you know, partnerships that you can talk about. >>Yeah, so I'm gonna I'm gonna build on what you just said. Dave IBM is in this unique position amongst this ecosystem. Not only the fact that we have the world leading most innovative technologies to bring to bear, but we also have the consulting capabilities that go with it now to make any of these technologies work towards the solution that Jason was referring to in this digital health pass, it could be any other solution you would need to connect these disparate systems, sometimes make them work towards a common outcome to provide value to the client. So I think our role as IBM within this ecosystem is pretty unique in that we are able to bring both of these capabilities to bear. In terms of you know, you asked about favorite there are this is really a coop petition market where everybody has products, everybody has service is the most important thing is how how are we bringing them all together to serve the need or the need of the hour in this case, I would say one important thing in this. As you observe how these stories are panning out in an ecosystem in in part in a partnership, it is about the value that we provide to our clients together. So it's almost like a cell with model from from a go to market perspective, there is also a question of our products and services being delivered through our partners. Right? So think about the span and scope of what we do here. And so that's the sell through. And then of course we have our products running within our partner companies and our partner products, for example. Salesforce running within IBM. So this is a very interesting and a new way of doing business. I would say it's almost like the modern way of doing business with modernity. >>Well. And you mentioned cooperation. I mean you're you're part of IBM that will work with anybody because your customer first, whether it's a W. S. Microsoft oracle is a is a is a really tough competitor. But your customers are using oracle and they're using IBM. So I mean as a those are some good examples. I think of your point about cooper Titian. >>Absolutely. If you pick on any other client, I'll mention in this case. Delta, Delta was working with us on moving, being more agile. Now this pandemic has impacted the airline sector particularly hard, right With travel stopping and anything. So they are trying to get to a model which will help them scale up, scale down, be more agile will be more secure, be closer to their customers, try and understand how they can provide value to their customers and customers better. So we are working with Delta on moving them to cloud on the journey to cloud. Now that public cloud could be anything. The beauty of this model and a hybrid cloud approach is that you are able to put them on red hat open shift, you're able to do and package the services into a microservices kind of a model. You want to make sure all the applications are running on a portable, almost platform. Agnostic kind of a model. This is the beauty of this ecosystem that we are discussing is the ability to do what's right for the end customer at the end of the day, >>how about some of the like sass players, like some of the more prominent ones and we watched the ascendancy of service now and and, and work day, you mentioned Salesforce. How do you work with those guys? Obviously there's an Ai opportunity, but maybe you could add some, you know, color there. >>So I like the fact that you call out the different hyper scholars for example, uh whether it's a W. S, whether it's Microsoft, knowing that they have their own cloud instances, for example. And when you, when you mentioned, he had this happened a long time ago, you know, you start talking about the heft of the technology, I started thinking of all the truckloads of servers or whatever they have to pull up. We don't need that now because it can happen in the cloud and you don't have to pick one cloud or the other. And so when people say hybrid cloud, that's what comes out, you start to think of what I I call, you know, a hybrid of hybrids because I told you before, you know, these roles are changing. People aren't just buyers or suppliers, they're both. And then you start to say what we're different people supplying well in that ecosystem, we know there's not gonna be one player, there's gonna be multiple. So we partner by doing just what monty called out is this thought of integrating in hybrid environments on hybrid platforms with hybrid clouds, Multi clouds, maybe I want something on my premises, something somewhere else. So in giving that capability that flexibility we empower and this is what's doing that cooperation, we empower our partners are strategic partners, we want them to be better with us. And this is this thought of being able to actually bring more together and move faster which is almost counterintuitive. You're like wait a minute you're adding more players but you're moving faster. Exactly because we have the capability to integrate those those technologies and get that outcome that monty mentioned, >>I would add to this one. Jason you mentioned something very very interesting. I think if you want to go just fast you go alone but if you want to go further, you go together. And that is the core of our point of view in this case is that we want to go further and we want to create value that is long lasting. >>What about like so I get the technology players and there may be things that you do that others don't or vice versa. So the gap fillers etcetera. But what about how to maybe customers that they get involved? Perhaps government agencies, may they be they be customer or an N. G. O. As another example, Are they part of this value chain? Part of this ecosystem? >>Absolutely. I'll give you I'll stick with the same example when I mentioned a digital health past that Digital Health Pass is something that we have as IBM and it's a credential Think of it as a health credential not a vaccine passport because it could be used for a test for a negative test on Covid, it could be used for antibiotics. So if you have this credential, it's something that we, as IBM created years back and we were using it for learning. When you think of getting people uh certifications versus a four year diploma, how do we get people into the workforce? That was what was original. That was a jenny Rometty thought, let's focus on new collar workers. So we had this asset that we'd already created and then it's wait, there's a place for it to work with, with health, with validation verification on someone's option, it's optional. They choose it. Hey, I want to do it this way. Well, the state of new york said that they wanted to do it that way and they said, listen, we are going to have a digital health pass for all of our, all of our new york citizens and we want to make sure that it's equitable, it could be printed or on a screen and we want it to be designed in this way and we wanted to work on this platform and we want to be able to, to work with the strategic Partners, a Salesforce and ASAP and work. I mean, I can just keep and we said okay let's do this. And this is the start of collaboration and doing it by design. So we haven't lost that day but this only brings it to the forefront just as you said, yes, that is what we want. We want to make sure that in this ecosystem we have a way to ensure that we are bringing together convening not just point products or different service providers but taking them together and getting the best outcome so that that end user can have it configured in the way that they want it >>guys, we got to leave it there but it's clear you're helping your customers and your partners on this this digital transformation journey that we already we all talk about. You get this massive portfolio of capabilities, deep, deep expertise, I love the hybrid cloud and AI Focus, Jason and money really appreciate you coming back in the cubes. Great to see you both. >>Thank you so much. Dave Fantastic. All >>Right. And thank you for watching everybody's day Vigilante for the Cuban. Our continuous coverage of IBM, think 2021, the virtual edition. Keep it right there. Yeah. Mhm. Mhm. >>Mhm.

>>from >>around the globe. It's the cube with digital coverage >>of IBM. Think 20 >>21 brought to you by IBM. >>Hello, I want to welcome back to IBM think 2021 the virtual edition. The cubes continuous coverage. And we're excited to talk about people. How do you align people and technology? Of course there's a lot of process in between. Those are the hard, hard things technology sometimes easy amy right is here. She's managing partner of talent transformation at IBM Amy great to see you. >>Thanks Great to be here Dave >>Yeah. You know we love to talk tech and sometimes we kind of sweep the really hard stuff under the rug and we talk about transformation. I mean it's it's ongoing. I mean you think about the pandemic last year was sort of this forced march to digital, we had to transform overnight. You know the vast majority of leaders I think that figures like close to 95 96 say that they've accelerated their digital transformation by half a half a decade. And of course that was a lot of it was like I say, it's a forced march, so it wasn't really planned fel but now they've got time to plan about a digital first approach and how to deal with remote workers. I wonder if you could talk about the role that people play in that digital transformation. >>All right, thanks. Dave I'm happy to, you know, a lot of people think of digital transformation about being technology oriented. It's a total shift in tech and it is but it really can't be successful with just tech. So you're right with the pandemic has done for digital transformation, Is it really it pushed us to these technology extremes more than anyone could have anticipated, particularly with our ways of working being remote. It also pushed us to extremes and highlighted the role that humanity played place, it will continue to play. So we've been pushed to reimagine jobs, pushed to reimagine workplaces, push to reimagine how technology can deliver this connected enterprise. Um you know, through through virtuality. Um and virtual working wasn't really something that was accepted before, but now we've been forced to accept it, which is which is really great for the digital transformation because it accelerated that. So the connected enterprise though isn't really just working virtually. It's these new levels of productivity and decision making that are enabled by intelligent workflows and cloud and data. And so technology is absolutely critically important. But automation doesn't have empathy. So it takes people to turn these insights that are brought to us through technology and automation. It takes people to turn them into action. And it's that human technology partnership that's required for the digital transformation to get to that desired impact. So when you think about, when we think about people in the role they play, and, you know, it's the pivotal role they play. It's really multi part, it's kind of three parts. one is people are the ones that build the tech and so they influence whether or not the automation is going to work, whether it meets the needs of the enterprise, if it takes advantage of the latest thinking, um and if it's, you know, it's irresistible if you will. The second is the people use the technology to gain this meaningful insight and turn into action. And then the third is the people are the ones that embed this tech change into culture, so that's actually sustainable. So to be able to drive this sustainable digital transformation the people, it requires the people to make it happen. So, if you look at health care, Dave think about the dramatic shift in health care in the past year, where doctors have shifted to telemedicine, nurses have shifted to using ipads as caregivers at the, you know, with their patients that not only required to shift in the tech, but an adoption of caregivers of a new way of working that again, could have been successful unless they adopted and embedded, embedded a different way of working in a different culture and everything that they do. >>You know what you said is really important. Especially we talk a lot about what machines can do that people can what people can do that machines can you just nailed it with empathy. And and when you think about to the remote work, I think prior to the pandemic, it was probably around 15 16% of workers were remote. And when you when we do we do surveys with the partner E. T. R. In new york. And the They project based on these surveys that that that's gonna double somewhere between you know, 33 35%. But people don't really know when when you talk to people like I kind of like working at home, other people say I can't wait to get back to the office. So people obviously critical part of the digital transformation. But how do you think about creating those meaningful experiences at work? Whether that's remote? Part time, remote? Full time back at work? >>So this is a really great great question because I think our point of view on this has changed. So first of all, most enterprises we talked to will move back to some hybrid kind of environment. We're never going to be everybody back in the office again. That's that's that's not who we will be moving forward. But the expectations of employees have changed. Um We all know that, you know, think about your consumer lives and and how we experience that personalized that that that personalization when we go to buy something online that's now bled over into the workplace. So the employees expect that exact same personalized experience at work. But it's now so much more than that now. It's not only personalization which you know, obviously tech enables quite dramatically, but the experience is broader to look at a holistic relationship between the employer and employee. That's a little bit less, it's less transactional. Like I do my job and my company pays me for doing this set of activities, but it's more supportive and integrated with their personal cells. So, you know, we did a recent study in which we looked at consumers and employees and their highest priority areas for the expectations that they now have for their employers is career and skill advancement opportunities with speed. Second is work life balance is that might take the form of what hours they work. Their ability to um you know, manage with what they're doing in their home with their families and Children, uh you know, their ability to be camera ready or not at all times of day and night and actually where they work from. So people are now working not only at home, but they're moving to different cities and want that flexibility. And then third, hi, area of priority now is ethics and values. So not only diversity, equity, inclusion, obviously critically important, but ways of working and meaningful and purposeful work. So when you look at all of those together, the employee experience has grown to be not only that of personalization, like we have in our consumer world, that is that is critically important, but now um it's all of these other things as well as a matter of fact, they become so important dave that in our recent research, it shows that one in four Employees will change employers in 2021, 1 and 41 and four will also change professions in 2021. And while about 75 of employers, companies believe that they are doing a good job of meeting the needs, these expanded needs of their employees, less than half of employees feel the same way. So there's a lot of work to be done. So you ask the question why is this? People experience so important? It's important because it's required for the digital transformation and it's so much broader than what we used to think that it's now a competitive differentiator for employers as they try to not only achieve their digital transformation but as their organizations disrupt over and over again. Um It's a requirement in order to meet their meet their enterprises objectives. >>So it was a great great stats and you just put out there in the career advancement. I think I feel like it's always been there but it's now much more front and center employees are more vocal about it. The work like balance, same thing. I mean you're seeing some organizations in 100 hour weeks were revolting and and then you know, the ethics and values piece to me is one of the most interesting I often joke Milton Friedman rolling over in his grave because he was, the economist said uh it's just about shareholder value, that's it and that's not anymore. In fact there's clearly a relationship between shareholder value and E. S. G. And and ethics and young people are very very concerned about it. So here's the question who's accountable for making sure that you have a positive employee experiences occur. >>Yeah. Really really really good question. And the thing is this is what makes it so hard. There's not one group or one person it's actually all of us. And I know that answer sounds like a little bit like a cop out. But this is why it makes it so hard. Every leader is responsible for the employee experience, every manager is responsible for the employee experience. Every employee is actually not responsible for the experience of their teammates. And actually speaking up if the experience isn't using inclusiveness as an example if it's not inclusive. Every experience every employee has the responsibility to speak up. So some companies actually have employee experienced leaders. Some companies have digital transformation leaders that embodies that that that includes that employee experience. But most actually start this journey through the through the partnership between I. T. And H. R. So I. T. Is responsible for this technology architecture, the cloud strategy, the data strategy architectural framework. All those pieces that put together the foundation and the building blocks and the security that helped to um modernize this employee experience and by the way they're doing this at the same time with their modernizing their entire way in which the function operates. Um So you got I. T. That's kind of setting the stage and the foundation for what's possible. And then you have HR. Who's operating as the steward of the employee experience that those people experiences um and putting them in place in a consistent and consistent in a positive way across the entire enterprise. So things like design thinking um that puts the employee at the center of the way we um architect and create these experiences using rapid iterative design principles. With again with this with the employee at the centre making that the cultural norm across the enterprise is a really big deal. So HR is usually in the lead on making that happen. But again this is a cultural shift, not just I have a problem, you know kind of a project plan and here's here's what I'm going to execute on leadership roles. So HR is the steward of leadership and those characteristics of leaders now are changing very dramatically to be more even in a big enterprise large global enterprise entrepreneurial transparent co creation really at the core of everything. So being transplant transparent with your teams and be able to co create um you know co create for the future. So data and ai we can use data and I ai now to actually in uh predict the impact that the workforce and the cultural will have on business results, predict attrition, predict what different work workforce design scenarios will look like to the supply chain um uh predict the speed of hiring and how that will impact literally bottom line business results. So you said it right when when when you talked about shareholder value, the people is at the center of shareholder value now. So our functions need to be modernized. But it's really this partnership between HR. And I. T. That's going to be able to make it happen in a big way. >>It's interesting. I'm just thinking that Ai as well can be a canary in a coal mine when there's potential problems. And I love this transparency. That's critical co creation. So, okay, so tech is a key part of that, especially in terms of when you go from analog to digital, taking friction out of the system shows the employees that we're investing in in your experience. But it's more than that you're saying it's it's cultural and as it makes its kind of fun cultural, it takes a village. So that's that's part of what makes it so hard. How do you think about, you know the journey, where do you start and and how do you keep iterating? You're you're never done in this this world, are you? >>Yeah, that's a question uh everybody's asking now is where do I start? So as you said, this is very hard and and and it's hard. One of the reasons it's hard, it's because it revolves culture. Um it's not only about technology, they are hard. Technologies are hard in their own right. It's not just about data that's hard in its own right. But once you involve technology it makes it makes it even even harder. And of course the people aspect unless done very pro actively and meaningfully, it can be kind of a wild card right on who's gonna adopt what. So where do you start? So um the way we like to think about um giving advice to enterprises regarding where this is, we've seen this work well is to pick a business problem. So what's a business problem that if you solved you can actually make an impact not only for your people but for your people but for the enterprise. So if you could pick a business problem and and actually fix it using data using cloud using people, experiences using a cultural shift, then you'll get that. Buy in, you get the buy in that. Yes we can do this, this is this this is very doable. We can repeat it, repeat peat, repeatable over and over again and it has an impact on our culture. That's a great place to start. Okay so then you say if that's a place to start, how do we actually, there's got to be foundational things that have to be in place to make that work. So one of them is a consistency in data and the use of AI and the ability to make insights meaningful, you know that come through data and AI. And the other part that's really important once you pick your business problem is the shift in the way of working the shift so that it can impact cultural, a cultural change, a shift so that there's co creation with your people and there's transparency so each one of these business problems and the way companies pick to fix them, they won't all work. And the way you get that trust and transparency with your people is as scary as it is to share with them what you're attempting to do and share with them, how you're doing along the journey. And if it fails, okay fails, you know, pick yourself back up and start again that trust and transparency with your people. That's the way that's the way we all make this cultural impact. So, you know, kind of the none of this is to be to make sustainable change. We can all make short term change, we can do projects but to make sustainable change, the humanity aspect has to come to life in these digital transformations and that only comes to life with this cultural shift. >>Amy right? You've thought about this a lot, deep expertise in the area, really appreciate your sharing it with our audience and thanks for coming on the cube. >>Dave my pleasure. >>All right, keep it right there. But this is Dave Volonte. You're watching IBM think 2021 the virtual edition from the Cube. >>Yeah. Mhm.