foreign [Music] my name is Savannah Peterson and I am very excited to be coming to you today from the cube in Palo Alto we're going to be talking about kubecon giving a little preview of the hype and what you might be able to expect in Detroit with the one and only co-founder and CEO of the cube and siliconangle John ferriere John hello how are you today thanks for hosting and doing the preview with me my goodness a pleasure I we got acquainted this time last year how do you think the ecosystem has changed are you excited well first of all I missed kubecon Valencia because I had covid I was so excited to be there this big trip plan and then couldn't make it but so much has gone on I mean we've been at every kubecon the cube was there at the beginning when openstack was still going on kubernetes just started came out of Google we were there having beers with Lou Tucker and a bunch of The Luminaries when it all kind of came together and then watch it year by year progress through and how it's changed the industry and mainly how open source has been really the wave behind it combining with the Linux foundation and then cncf and then open source movement and good kubernetes has been amazing and under it all containers has been the real driver and all this so you know Docker containers Docker was a well-funded company they had to Pivot and were restructured now they're pure open source so containers have gone Supernova on top of that kubernetes and with that's a complete ecosystem of opportunity to create the next operating system in in software development so to me kubecon is at the center of software software 2030 what do you want to call it super cloud it's that it's really action it's not where the old school is it's where the new school is excellent so what has you most excited this year what's the biggest change from this time last year and now well two things I'm looking at this year uh carefully both from an editorial lens and also from a sponsorship lenses where is the funding going on the sponsorships because again a very diverse ecosystem of Builders but also vendors so I'm going to see how that Dynamics going on but also on the software side a lot of white space going on in the stack or in the map if you will you know the run times you've got observability you got a lot of competition maybe projects might be growing some Rising some falling maybe merge together I'm going to see how that but there's a lot of white spaces developing so I'm curious to see what's new on that area and then service meshes is a big deal this year so I'm looking for what's going on so it's been kind of a I won't say cold war but kind of like uh you know where is this going to go and because it's a super important part of of the of the orchestration and managing containers and so be very interested to see how service mesh does istio and other versions out there have been around for a while so that and also the other controversy is the number of stars on GitHub a project may have so sometimes that carries a lot of weight but we're going to look at which ones are rising which ones are falling again um which ones are getting the most votes by the developers vote with their code yeah absolutely well we did definitely miss you down in Los Angeles but it will be great to be in Detroit what has you most excited do you think that we're going to see the number of people in person that we have in the past I know you've seen it since the beginning so I think this year is going to be explosive from that psychology angle because I think it was really weird because La was on they were a bold to make that move we're all there is first conference back it was a lot a lot of like badges don't touch me only handshakes fist pumps but it was at the beginning of the covid second wave right so it was kind of still not yet released where everyone's was not worried about it so I think it's in the past year in the past eight months I mean I've been places with no masks people have no masks Vegas other places so I think it's going to be a year where it will be a lot more people in person because the growth and the opportunities are so big it's going to drive a lot of people in person just like Amazon reinvent those yeah absolutely and as the most important and prominent event in the kubernetes space I think everyone's very excited to to get back together when we think about this space do you think there that anyone's the clear winner yet or do you think it's still a bit of a open territory in terms of the companies and Partnerships I think Red Hat has done a great job and they're you know I think they're going to see how well they can turn this into gold for them because they've positioned themselves very well open shift years ago was kind of waffling I won't say it in a bad way but like but once they got view on containers and kubernetes red has done an exceptional job in how they position their company being bought by ibms can be very interesting to see how that influences change so if Red Hat can stay red hat I think IBM will win I think customers that's one company I like the startups we're seeing companies like platform nine Rafi systems young companies coming out in the kubernetes as a service space because I think whoever can make kubernetes easier because I think that's the hard part right now even though that the show is called kubecon is a lot more than kubernetes I think the container layer what docker's doing has been exceptional that's the real action the question is how does that impact the kubernetes layers so kubernetes is not a done deal yet I think it hasn't really crossed the chasm yet it's certainly popular but not every company is adopting it so we're starting to see that we need to see more adoption of kubernetes seeing that happen it's going to decide who the winners are totally agree with that if you look at the data a lot of companies are and people are excited about kubernetes but they haven't taken the plunge to shifting over their stack or fully embracing it because of that complexity so I'm very curious to see what we learn this week about who those players might be moving forward how does it feel to be in Detroit when was the last time you were here I was there in 2007 was the last time I was in that town so uh we'll see what's like wow yeah but things have changed yeah the lions are good this year they've got great hockey goalies there so you know all right you've heard that sports fans let John know what you're thinking your Sports predictions for this season I love that who do you hope to get to meet while we're at the show I want to meet more end user customers we're gonna have Envoy again on the cube I think Red Hat was going to be a big sponsor this year they've been great um we're looking for end user project most looking for some editorial super cloud like um commentary because the cncf is kind of the developer Tech Community that's powering in my opinion this next wave of software development Cloud native devops is now Cloud native developers devops is kind of going away that's killed I.T in my opinion data and security Ops is the new kind of Ops the new it so it's good to see how devops turns into more of a software engineering meet supercloud so I think you're going to start to see the infrastructure become more programmable it's infrastructure as code so I think if anything I'm more excited to hear more stories about how infrastructure as code is now the new standard so if when that truly happens the super cloud model be kicking into high gear I love that let's you touched on it a little bit right there but I want to dig in a bit since you've been around since the beginning what is it that you appreciate or enjoy so much about the kubernetes community and the people around this I think there are authentic people and I think they're they're building they're also Progressive they're very diverse um they're open and inclusive they try stuff and um they can be critical but they're not jerks about it so when people try something um they're open-minded of a failure so it's a classic startup mentality I think that is embodied throughout the Linux Foundation but CNC in particular has to bridge the entrepreneurial and corporate Vibe so they've done an exceptional job doing that and that's what I like about this money making involved but there's also a lot of development and Innovation that comes out of it so the next big name and startup could come out of this community and that's what I hope to see coming out here is that next brand that no one's heard of that just comes out of nowhere and just takes a big position in the marketplace so that's going to be interesting to see hopefully we have on our stage there yeah that's the goal we're going to interview them all a year from now when we're sitting here again what do you hope to be able to say about this space or this event that we might not be able to say today I think it's going to be more of clarity around um the new modern software development techniques software next gen using AI more faster silicon chips you see Amazon with what they're doing the custom silicon more processing but I think Hardware matters we've been talking a lot about that I think I think it's we're going to shift from what's been innovative and what's changed I think I think if you look at what's been going on in the industry outside of crypto the infrastructure hasn't really changed much except for AWS what they've done so I'm expecting to see more Innovations at the physics level way down in the chips and then that lower end of the stack is going to be dominated by either one of the three clouds probably AWS and then the middle layer is going to be this where the abstraction is around making infrastructure as code really happen I think that's going to be Clarity coming out of this year next year we should have some visibility into the vertical applications and of the AI and machine learning absolutely digging in on that actually even more because I like what you're saying a lot what verticals do you think that kubernetes is going to impact the most looking even further out than say a year I mean I think that hot ones Healthcare fintech are obvious to get the most money they're spending I think they're the ones who are already kind of creating these super cloud models where they're actually changed over their their spending from capex to Opex and they're driving top line revenue as part of that so you're seeing companies that wants customers of the I.T vendors are now becoming the providers that's a big super cloud Trend we see the other verticals are going to be served by a lot of men in Surprise oil and gas you know all the classic versus Healthcare I mentioned that one those are the classic verticals retail is going to I think be massively huge as you get more into the internet of things that's truly internet based you're going to start to see a lot more Edge use cases so Telecom I think it's going to be completely disrupted by new brands so I think once that you see see how that plays out but all verticals are going to be disrupted just a casual statement to say yeah yeah no doubt in my mind that's great I'm personally really excited about the edge applications that are possible here and can't wait to see can't wait to see what happens next I'm curious as to your thoughts how based given your history here and we don't have to say number of years that you've been participating in in Cape Cod but give them your history what's the evolution looked like from that Community perspective when you were all just starting out having that first drink did you anticipate that we would be here with thousands of people in Detroit you know I knew the moment was happening around um 2017-2018 Dan Coney no longer with us he passed away I ran into him randomly in China and it was like what are you doing here he was with a bunch of Docker guys so they were already investing in so I knew that the cncf was a great Steward for this community because they were already doing the work Dan led a great team at that time and then they were they were they were kicking ass and they were just really setting the foundation they dig in they set the architecture perfectly so I knew that that was a moment that was going to be pretty powerful at the early days when we were talking about kubernetes before it even started we were always always talking about if this this could be the tcpip of of cloud then we could have kind of a de facto interoperability and Lou Tucker was working for Cisco at the time and we were called it interclouding inter-networking what that did during the the revolution Cloud yeah the revolution of the client server and PC Revolution was about connectivity and so tcpip was the disruptive enable that created massive amounts of wealth created a lot of companies created a whole generation of companies so I think this next inflection point is kind of happening right now I think kubernetes is one step of this abstraction layer but you start to see companies like snowflake who's built on AWS and then moved to multiple clouds Goldman Sachs Capital One you're going to see insurance companies so we believe that the rise of the super cloud is here that's going to be Cloud 3.0 that's software 3.0 it's software three what do you want to call it it's not yesterday's Cloud lift and shift and run a SAS application it's a true Enterprise digital digital transformation so that's that's kind of the trend that we see riding in now and so you know if you're not on that side of the street you're going to get washed away from that wave so it's going to be interesting to see how how it all plays out so it's fun to watch who's on the wrong side it is very fun I hope you all are listening to this really powerful advice from John he's dropping some serious knowledge bombs on us well holding the back for kubecon because we've got we got all the great guests coming on and that's where all the content comes from I mean the best part of the community is that they're sharing yeah absolutely so just for old time's sake and it's because it's how I met your fabulous team last year Define kubernetes for the audience kubernetes is like what someone said it was a magical Christmas I heard that was a well good explanation with that when I heard that one um you mean the technical definition or like the business definition or maybe both you can give us an interpretive dance if you'd like I mean the simplest way to describe kubernetes is an orchestration layer that orchestrates containers that are containing applications and it's a way to keep things running and runtime assembly of like the of the data so if you've got you're running containers you can containerize applications kubernetes gives you that capability to run applications at scale which feeds into uh the development uh cycle of the pipelining of apps so if you're writing applications and you want to scale up it's a fast way to stand up massive amounts of scale using containers and kubernetes so a variety of other things that are in the in the in the system too so that was pretty good there's a lot more under the hood but that's the oversimplified version I think that's what we were going for I think it's actually I mean it's harder to oversimplify it sometimes in this case it connects it connects well it's the connective tissue between all the container applications yes last question for you John we are here at the cube we're very excited to be headed to Detroit very soon what can people expect from the cube at coupon this year so we'll be broadcasting Wednesday Thursday and Friday we'll be there early I'll be there Monday and Tuesday we'll do our normal kind of hanging around getting some scoop on the on the ground floor you'll see us there Monday and Tuesday probably in the in the lounge too um come up and say hi to us um again we're looking for more stories this year we believe this is the year that you're going to hear a lot more storytelling coming out of this community as people get more proof points so come up to us share your email your your handle give us yours give us your story we'll publish it we think we think this is going to be the year that cloud native developers start showing the signs of the of the rise of the supercloud that's going to come out of this this community so you know if you got something to say you know we're open to share stories so we're here all that speaking of John how can people say hi to you and the team on Twitter at Furrier at siliconangle at thecube thecube.net siliconangle.com LinkedIn Dave vellantis they were open on all channels all right signal Instagram WhatsApp perfect well pick your channel we really hope to hear from you John thank you so much for joining us for this preview session and thank you for tuning in my name is Savannah Peterson here in Palo Alto at thecube Studios looking forward to Detroit we can't wait to hear your thoughts do let us know in the comments and let us know if you're headed to Michigan cheers [Music] thank you

(upbeat music) >> theCUBE presents KubeCon and CloudNativeCon Europe 22, brought to you by the Cloud Native Computing Foundation. >> Valencia, Spain, a KubeCon, CloudNativeCon Europe 2022. I'm Keith Towns along with Paul Gillon, Senior Editor Enterprise Architecture for Silicon Angle. Welcome Paul. >> Thank you Keith, pleasure to work with you. >> We're going to have some amazing people this week. I think I saw stat this morning, 65% of the attendees, 7,500 folks. First time KubeCon attendees, is this your first conference? >> It is my first KubeCon and it is amazing to see how many people are here and to think of just a couple of years ago, three years ago, we were still talking about, what the Cloud was, what the Cloud was going to do and how we were going to integrate multiple Clouds. And now we have this whole new framework for computing that is just rifled out of nowhere. And as we can see by the number of people who are here this has become the dominant trend in Enterprise Architecture right now how to adopt Kubernetes and containers, build microservices based applications, and really get to that transparent Cloud that has been so elusive. >> It has been elusive. And we are seeing vendors from startups with just a few dozen people, to some of the traditional players we see in the enterprise space with 1000s of employees looking to capture kind of lightning in a bottle so to speak, this elusive concept of multicloud. >> And what we're seeing here is very typical of an early stage conference. I've seen many times over the years where the floor is really dominated by companies, frankly, I've never heard of that. The many of them are only two or three years old, you don't see the big dominant computing players with the presence here that these smaller companies have. That's very typical. We saw that in the PC age, we saw it in the early days of Unix and it's happening again. And what will happen over time is that a lot of these companies will be acquired, there'll be some consolidation. And the nature of this show will change, I think dramatically over the next couple or three years but there is an excitement and an energy in this auditorium today that is really a lot of fun and very reminiscent of other new technologies just as they requested. >> Well, speaking of new technologies, we have Dave Cole, CRO, Chief Revenue Officer. >> That's right. >> Chief Marketing Officer of Spectrum Cloud. Welcome to the show. >> Thank you. It's great to be here. >> So let's talk about this big ecosystem, Kubernetes. >> Yes. >> Solve problem? >> Well the dream is... Well, first of all applications are really the lifeblood of a company, whether it's our phone or whether it's a big company trying to connect with its customers about applications. And so the whole idea today is how do I build these applications to build that tight relationship with my customers? And how do I reinvent these applications rapidly in along comes containerization which helps you innovate more quickly? And certainly a dominant technology there is Kubernetes. And the question is, how do you get Kubernetes to help you build applications that can be born anywhere and live anywhere and take advantage of the places that it's running? Because everywhere has pluses and minuses. >> So you know what, the promise of Kubernetes from when I first read about it years ago is, runs on my laptop? >> Yeah. >> I can push it to any Cloud, any platforms. >> That's right, that's right. >> Where's the gap? Where are we in that phase? Like talk to me about scale? Is it that simple? >> Well, that is actually the problem is that today, while the technology is the dominant containerization technology in orchestration technology, it really still takes a power user, it really hasn't been very approachable to the masses. And so was these very expensive highly skilled resources that sit in a dark corner that have focused on Kubernetes, but that now is trying to evolve to make it more accessible to the masses. It's not about sort of hand wiring together, what is a typical 20 layer stack, to really manage Kubernetes and then have your engineers manually can reconfigure it and make sure everything works together. Now it's about how do I create these stacks, make it easy to deploy and manage at scale? So we've gone from sort of DIY Developer Centric to all right, now how do I manage this at scale? >> Now this is a point that is important, I think is often overlooked. This is not just about Kubernetes. This is about a whole stack of Cloud Native Technologies. And you who is going to integrate that all that stuff, piece that stuff together? Obviously, you have a role in that. But in the enterprise, what is the awareness level of how complex this stack is and how difficult it is to assemble? >> We see a recognition of that we've had developers working on Kubernetes and applications, but now when we say, how do we weave it into our production environments? How do we ensure things like scalability and governance? How do we have this sort of interesting mix of innovation, flexibility, but with control? And that's sort of an interesting combination where you want developers to be able to run fast and use the latest tools, but you need to create these guardrails to deploy it at scale. >> So where do the developers fit in that operation stack then? Is Kubernetes an AIOps or an ops task or is it sort of a shared task across the development spectrum? >> Well, I think there's a desire to allow application developers to just focus on the application and have a Kubernetes related technology that ensures that all of the infrastructure and related application services are just there to support them. And because the typical stack from the operating system to the application can be up to 20 different layers, components, you just want all those components to work together, you don't want application developers to worry about those things. And the latest technologies like Spectra Cloud there's others are making that easy application engineers focus on their apps, all of the infrastructure and the services are taken care of. And those apps can then live natively on any environment. >> So help paint this picture for us. I get AKS, EKS, Anthos, all of these distributions OpenShift, the Tanzu, where's Spectra Cloud helping me to kind of cobble together all these different distros, I thought distro was the thing just like Linux has different distros, Randy said different distros. >> That actually is the irony, is that sort of the age of debating the distros largely is over. There are a lot of distros and if you look at them there are largely shades of gray in being different from each other. But the Kubernetes distribution is just one element of like 20 elements that all have to work together. So right now what's happening is that it's not about the distribution it's now how do I again, sorry to repeat myself, but move this into scale? How do I move it into deploy at scale to be able to manage ongoing at scale to be able to innovate at-scale, to allow engineers as I said, use the coolest tools but still have technical guardrails that the enterprise knows, they'll be in control of. >> What does at-scale mean to the enterprise customers you're talking to now? What do they mean when they say that? >> Well, I think it's interesting because we think scale's different because we've all been in the industry and it's frankly, sort of boring old word. But today it means different things, like how do I automate the deployment at-scale? How do I be able to make it really easy to provision resources for applications on any environment, from either a virtualized or bare metal data center, Cloud, or today Edge is really big, where people are trying to push applications out to be closer to the source of the data. And so you want to be able to deploy it-scale, you want to manage at-scale, you want to make it easy to, as I said earlier, allow application developers to build their applications, but ITOps wants the ability to ensure security and governance and all of that. And then finally innovate at-scale. If you look at this show, it's interesting, three years ago when we started Spectra Cloud, there are about 1400 businesses or technologies in the Kubernetes ecosystem, today there's over 1800 and all of these technologies made up of open source and commercial all version in a different rates, it becomes an insurmountable problem, unless you can set those guardrails sort of that balance between flexibility, control, let developers access the technologies. But again, manage it as a part of your normal processes of a scaled operation. >> So Dave, I'm a little challenged here, because I'm hearing two where I typically consider conflicting terms. Flexibility, control. >> Yes. >> In order to achieve control, I need complexity, in order to choose flexibility, I need t-shirt, one t-shirt fits all and I get simplicity. How can I get both that just doesn't compute. >> Well, that's the opportunity and the challenge at the same time. So you're right. So developers want choice, good developers want the ability to choose the latest technology so they can innovate rapidly. And yet ITOps, wants to be able to make sure that there are guardrails. And so with some of today's technologies, like Spectra Cloud, it is, you have the ability to get both. We actually worked with dimensional research, and we sponsor an annual state of Kubernetes survey. We found this last summer, that two out of three IT executives said, you could not have both flexibility and control together, but in fact they want it. And so it is this interesting balance, how do I give engineers the ability to get anything they want, but ITOps the ability to establish control. And that's why Kubernetes is really at its next inflection point. Whereas I mentioned, it's not debates about the distro or DIY projects. It's not big incumbents creating siloed Kubernetes solutions, but in fact it's about allowing all these technologies to work together and be able to establish these controls. And that's really where the industry is today. >> Enterprise , enterprise CIOs, do not typically like to take chances. Now we were talking about the growth in the market that you described from 1400, 1800 vendors, most of these companies, very small startups, our enterprises are you seeing them willing to take a leap with these unproven companies? Or are they holding back and waiting for the IBMs, the HPS, the MicrosoftS to come in with the VMwares with whatever they solution they have? >> I think so. I mean, we sell to the global 2000. We had yesterday, as a part of Edge day here at the event, we had GE Healthcare as one of our customers telling their story, and they're a market share leader in medical imaging equipment, X-rays, MRIs, CAT scans, and they're starting to treat those as Edge devices. And so here is a very large established company, a leader in their industry, working with people like Spectra Cloud, realizing that Kubernetes is interesting technology. The Edge is an interesting thought but how do I marry the two together? So we are seeing large corporations seeing so much of an opportunity that they're working with the smaller companies, the latest technology. >> So let's talk about the Edge a little, you kind of opened it up there. How should customers think about the Edge versus the Cloud Data Center or even bare metal? >> Actually it's a... Well bare metal is fairly easy is that many people are looking to reduce some of the overhead or inefficiencies of the virtualized environment. But we've had really sort of parallel little white tornadoes, we've had bare metal as infrastructure that's been developing, and then we've had orchestration developing but they haven't really come together very well. Lately, we're finally starting to see that come together. Spectra Cloud contributed to open source a metal as a service technology that finally brings these two worlds together, making bare metal much more approachable to the enterprise. Edge is interesting, because it seems pretty obvious, you want to push your application out closer to your source of data, whether it's AI inferencing, or IoT or anything like that, you don't want to worry about intermittent connectivity or latency or anything like that. But people have wanted to be able to treat the Edge as if it's almost like a Cloud, where all I worry about is the app. So really, the Edge to us is just the next extension in a multi-Cloud sort of motif where I want these Edge devices to require low IT resources, to automate the provisioning, automate the ongoing version management, patch management, really act like a Cloud. And we're seeing this as very popular now. And I just used the GE Healthcare example of that, imagine a CAT scan machine, I'm making this part up in China and that's just an Edge device and it's doing medical imagery which is very intense in terms of data, you want to be able to process it quickly and accurately, as close to the endpoint, the healthcare provider is possible. >> So let's talk about that in some level of details, we think about kind of Edge and these fixed devices such as imaging device, are we putting agents on there, or we looking at something talking back to the Cloud? Where does special Cloud inject and help make that simple, that problem of just having dispersed endpoints all over the world simpler? >> Sure. Well we announced our Edge Kubernetes, Edge solution at a big medical conference called HIMMS, months ago. And what we allow you to do is we allow the application engineers to develop their application, and then you can de you can design this declarative model this cluster API, but beyond Cluster profile which determines which additional application services you need and the Edge device, all the person has to do with the endpoint is plug in the power, plug in the communications, it registers the Edge device, it automates the deployment of the full stack and then it does the ongoing versioning and patch management, sort of a self-driving Edge device running Kubernetes. And we make it just very easy. No IT resources required at the endpoint, no expensive field engineering resources to go to these endpoints twice a year to apply new patches and things like that, all automated. >> But there's so many different types of Edge devices with different capabilities, different operating systems, some have no operating system. I mean that seems, like a much more complex environment, just calling it the Edge is simple, but what you're really talking about is 1000s of different devices, that you have to run your applications on how are you dealing with that? >> So one of the ways is that we're really unbiased. In other words, we're OS and distro agnostic. So we don't want to debate about which distribution you like, we don't want to debate about which OS you want to use. The truth is, you're right. There's different environments and different choices that you'll want to make. And so the key is, how do you incorporate those and also recognize everything beyond those, OS and Kubernetes and all of that and manage that full stack. So that's what we do, is we allow you to choose which tools you want to use and let it be deployed and managed on any environment. >> And who's... >> So... >> I'm sorry Keith, who's responsible for making Kubernetes run on the Edge device. >> We do. We provision the entire stack. I mean, of course the company does using our product, but we provision the entire Kubernetes infrastructure stack, all the application services and the application itself on that device. >> So I would love to dig into like where pods happen and all that. But, provisioning is getting to the point that is a solve problem. Day two. >> Yes. >> Like you just mentioned HIMMS, highly regulated environments. How does Spectra Cloud helping with configuration management, change control, audit, compliance, et cetera, the hard stuff. >> Yep. And one of the things we do, you bring up a good point is we manage the full life cycle from day zero, which is sort of create, deploy, all the way to day two, which is about access control, security, it's about ongoing versioning in a patch management. It's all of that built into the platform. But you're right, like the medical industry has a lot of regulations. And so you need to be able to make sure that everything works, it's always up to the latest level have the highest level of security. And so all that's built into the platform. It's not just a fire and forget it really is about that full life cycle of deploying, managing on an ongoing basis. >> Well, Dave, I'd love to go into a great deal of detail with you about kind of this day two ops and I think we'll be covering a lot more of that topic, Paul, throughout the week, as we talk about just as we've gotten past, how do I deploy Kubernetes pod, to how do I actually operate IT? >> Absolutely, absolutely. The devil is in the details as they say. >> Well, and also too, you have to recognize that the Edge has some very unique requirements, you want very small form factors, typically, you want low IT resources, it has to be sort of zero touch or low touch because if you're a large food provider with 20,000 store locations, you don't want to send out field engineers two or three times a year to update them. So it really is an interesting beast and we have some exciting technology and people like GE are using that. >> Well, Dave, thanks a lot for coming on theCUBE, you're now KubeCon, you've not been on before? >> I have actually, yes its... But I always enjoy it. >> Great conversation. From Valencia, Spain. I'm Keith Towns, along with Paul Gillon and you're watching theCUBE, the leader in high tech coverage. (upbeat music)

>>The cube presents, Coon and cloud native con Europe 22 brought to you by the cloud native computing foundation. >>Lisia Spain, a cuon cloud native con Europe 2022. I'm Keith towns, along with Paul Gillon, senior editor, enterprise architecture for Silicon angle. Welcome Paul, >>Thank you, Keith pleasure to work >>With you. You know, we're gonna have some amazing people this week. I think I saw stat this morning, 65% of the attendees, 7,500 folks. First time Q con attendees. This is your first conference. >>It is my first cubic con and it is amazing to see how many people are here and to think of, you know, just a couple of years ago, three years ago, we were still talking about what the cloud was and what the cloud was gonna do and how we were gonna integrate multiple clouds. And now we have this whole new framework for computing that is just rifled out of, out of nowhere. And as we can see by the number of people who are here, this has become a, a, this is the dominant trend in enterprise architecture right now, how to adopt Kubernetes and containers, build microservices based applications, and really get to that, that transparent cloud that has been so elusive. >>It has been elusive. And we are seeing vendors from startups with just a, a few dozen people to some of the traditional players we see in the enterprise space with thousands of employees looking to capture kind of lightning in a bottle, so to speak this elusive concept of multi-cloud. >>And what we're seeing here is very typical of an early stage conference. I've seen many times over the years where the, the floor is really dominated by companies, frankly, I've never heard of that. Many of them are only two or three years old, and you don't see the big, the big dominant computing players with, with the presence here that these smaller companies have. That's very typical. We saw that in the PC age, we saw it in the early days of Unix and, and it's happening again. And what will happen over time is that a lot of these companies will be acquired. There'll be some consolidation. And the nature of this show will change, I think, dramatically over the next couple or three years, but there is an excitement and an energy in this auditorium today that is, is really a lot of fun and very reminiscent of other new technologies just as they press it. >>Well, speaking of new technologies, we have Dave Cole, CR O chief revenue officer that's right. Chief marketing officer that's right of spec cloud. Welcome to the show. Thank >>You. It's great to be here. >>So let's talk about this big ecosystem. Okay. Kubernetes. Yes. Solve problem. >>Well, you know, the, the dream is, well, first of all, applications are really the lifeblood of a company, whether it's our phone or whether it's a big company trying to connect with its customer, it's about applications. And so the whole idea today is how do I build these applications to build that tight relationship with my customers? And how do I reinvent these applications rapidly in, along comes containerization, which helps you innovate more quickly. And certainly a dominant technology. There is Kubernetes. And the, the question is how do you get Kubernetes to help you build applications that can be born anywhere and live anywhere and take advantage of the places that it's running, cuz everywhere has pluses and minuses. >>So you know what the promise of Kubernetes from when I first read about it years ago is runs on my laptop. Yep. I can push it to any cloud, any platform that's that's right. Where's the gap. Where are we in that, in that phase? Like talk to me about scale. Is that, is that, is it that simple? >>Well, that act is actually the problem is that date while the technology is the dominant containerization technology and orchestration technology, it really still takes a power user. It really hasn't been very approachable to the masses. And so it was these very expensive, highly skilled resources that sit in a dark corner that have focused on Kubernetes, but that, that now is trying to evolve to make it more accessible to the masses. It's not about sort of hand wiring together. What is a typical 20 layer stack to really manage Kubernetes and then have your engineers manually can reconfigure it and make sure everything works together. Now it's about how do I create these stacks, make it easy to deploy and manage at scale. So we've gone from sort of DIY developer centric to all right, now, how do I manage this at scale? >>Now this is a point that is important, I think is often overlooked. This is not just about Kubernetes. This is about a whole stack of cloud native technologies. Yes. And you who is going to, who is going to integrate that, all that stuff, piece that stuff together, right? Obviously you have a, a role in that. Yes. But in the enterprise, what is the awareness level of how complex this stack is and how difficult it is to assemble? >>We, we see a recognition of that, that we've had developers working on Kubernetes and applications, but now when we say, how do we weave it into our production environments? How do we ensure things like scalability and governance? How do we have this sort of interesting mix of innovation, flexibility, but with control. And that's sort of an interesting combination where you want developers to be able to run fast and use the latest tools, but you need to create these guardrails to deploy it at scale. >>So where do the developers fit in that operation stack then? Is this, is Kubernetes an AI ops or an ops a task, or is it sort of a shared task across the development spectrum? >>Well, I think there's a desire to allow application developers, to just focus on the application and have a Kubernetes related technology that ensures that all of the infrastructure and related application services are just there to support them. And because the typical stack from the operating system to the application can be up to 20 different layers components. You just want all those components to work together. You don't want application developers to worry about those things. And the latest technologies like spectra cloud there's others are making that easy application engineers focus on their apps, all of the infrastructure and the services are taken care of. And those apps can then live natively on any environment. >>So help paint this picture for us. You know, I get got AKs ETS and those, all of these distributions OpenShift, the tan zoo, where is spec cloud helping me to kind of cobble together all these different distros I thought distro was the, was the thing like, just like Lennox has different distros, you know, right. Randy said different distros >>That actually is the irony. Is that sort of the age of debating, the distros largely is over. There are a lot of distros and if you look at them, there are largely shades of gray in being different from each other. But the Kubernetes distribution is just one element of like 20 elements that all have to work together. So right now what's what's happening is that it's not about the distribution it's now, how do I, again, sorry to repeat myself, but move this into a, into scale. How do I move it into deploy at scale, to be able to manage ongoing at scale, to be able to innovate at scale, to allow engineers, as I said, use the coolest tools, but still have technical guardrails that the, the enterprise knows they'll be in control of what, >>What does at scale mean to the enterprise customers you're talking to now? What do they mean when they say that? >>Well, I think it's interesting cuz we think scale's different cuz we've all been in the industry and it's frankly sort of boring old wor word, but today it means different things. Like how do I automate the deployment at scale? How do I be able to make it really easy to provision resources for applications on any environment from either a virtualized or bare metal data center cloud or today edge is really big where people are trying to push applications out to be closer to this source of the data. And so you want to be able to deploy it scale you wanna manage at scale, you wanna make it easy to, as I said earlier, allow application developers to build their applications, but it ops wants the ability to ensure security and governance and all of that. And then finally innovate at scale. If you look at this show, it's interesting, three years ago, when we started spectra cloud, there are about 1400 businesses or technologies in the Kubernetes ecosystem today there's over 1800 and all of these technologies made up of open source and commercial, all versioning at different rates. It becomes an insurmountable problem unless you can set those guardrails sort of that balance between flexibility and control, let developers access the technologies. But again, manage it as a part of your normal processes of a, of a scale of operation. >>So, so Dave, I'm a little challenged here cuz I'm hearing two where I typically consider conflicting terms. Okay. Flexibility control. Yes. In order to achieve control, I need complexity in order to choose flexibility. I need t-shirt one t-shirt fits all right. To and I, and I, and I get simplicity. How can I get both that just doesn't you know, compute >>Well thus the opportunity and the challenge at the same time. So you're right. So developers want choice, good developers want the ability to choose the latest technology so they can innovate rapidly. And yet it ops wants to be able to make sure that there are guard rails. And so with some of today's technologies like spectral cloud, it is you have the ability to get both. We actually worked with dimensional research and we sponsor an annual state of Kubernetes survey. We found this last summer, that two out of three, it executives said you could not have both flexibility and control together, but in fact they want it. And so it is this interesting balance. How do I give engineers the ability to get anything they want, but it ops the ability to establish control. And that's why Kubernetes is really at its next inflection point. Whereas I mentioned, it's not debates about the distro or DIY projects. It's not big incumbents creating siloed Kubernetes solutions. But in fact it's about allowing all these technologies to work together and be able to establish these controls. And that's, that's really where the industry is today. >>Enterprise enterprise CIOs do not typically like to take chances. Now we were talking about the growth in the market that you described from 1400, 1800 vendors. Most of these companies, very small startups are, are enterprises. Are you seeing them willing to take a leap with these unproven companies or are they holding back and waiting for the IBMs, the HPS, the Microsofts to come in with the VMwares with whatever they solution they have? >>I, I think so. I mean, we sell to the global 2000. We had yesterday as a part of edge day here at the event, we had GE healthcare as one of our customers telling their story. And they're a market share leader in medical imaging equipment. X-rays MRIs, cat scans, and they're, they're starting to treat those as edge devices. And so here is a very large established company, a leader in their industry, working with people like spectral cloud, realizing that Kubernetes is interesting technology. The edge is an interesting thought, but how do I marry the two together? So we are seeing large corporations seeing so much of an opportunity that they're working with the smaller companies, the latest technology. >>So let's talk about the edge a little. You kind of opened it up there. Yeah. How should customers think about the edge versus the cloud data center or even bare metal? >>Actually it's a well bare bare metal is fairly easy is that many people are looking to reduce some of the overhead or inefficiencies of the virtualized environment. And, but we've had really sort of parallel little white tornadoes. We've had bare metal as infrastructure that's been developing and then we've had orchestration technology's developing, but they haven't really come together very well lately. We're finally starting to see that come together. Spectra cloud contributed to open source a metal as a service technology that finally brings these two worlds together. Making bare metal much more approachable to the inters enterprise edge is interesting because it seems pretty obvious. You wanna push your application out closer to your source of data, whether it's AI in fencing or O T or anything like that, you don't wanna worry about intermittent connectivity or latency or anything like that. But people have wanted to be able to treat the edge as if it's almost like a cloud where all I worry about is the app. >>So really the edge to us is just the next extension in a multi-cloud sort of motif where I want these edge devices to require low it resources to automate the provisioning, automate the ongoing version management patch management really act like a cloud. And we're seeing this as very, very popular now. And I just used the GE healthcare example of that. Imagine a cat scan machine, I'm making this part up in China and that's just an edge device. And it's, it's doing medical imagery, which is very intense in terms of data. You want to be able to process it quickly and accurately as close to the endpoint, the healthcare provider as possible. >>So let's talk about that in some level of detail, as we think about kind of edge and you know, these fixed devices such as imaging device, are we putting agents on there? Are we looking at something talking back to the cloud, where does special cloud inject and help make that simple, that problem of just having dispersed endpoints all over the world? Simpler? >>Sure. Well we announced our edge Kubernetes edge solution at a big medical conference called, called hymns months ago. And what we allow you to do is we allow the application engineers to develop their application. And then you can de you can design this declarative model, this cluster API, but beyond cluster profile, which determines which additional application services you need and the edge device, all the person has to do with the endpoint is plug in the power plug in the communications. It registers the edge device. It automates the deployment of the full stack. And then it does the ongoing versioning and patch management, sort of a self-driving edge device running Kubernetes. And we make it just very, very easy. No, it resources required at the endpoint, no expensive field engineering resources to go to these endpoints twice a year to apply new patches and things like that, all >>Automated, but there's so many different types of edge devices with different capabilities, different operating systems, some have no operating system. Yeah. I mean, what, that seems like a much more complex environment, just calling it, the edge is simple, but what you're really talking about is thousands of different devices, right? That you have to run your applications on how, how are you dealing with that? >>So one of the ways is that we're really unbiased. In other words, we're OS and distro agnostic. So we don't want to debate about which distribution you like. We don't want to debate about, you know, which OS you want to use. The truth is you're right. There's different environments and different choices that you'll wanna make. And so the key is, is how do you incorporate those and also recognize everything beyond those, you know, OS and Kubernetes and all of that and manage that full stack. So that's what we do is we allow you to choose which tools you want to use and let it be deployed and managed on any environment. >>And who's respo, I'm sorry, key. Who's responsible for making Kubernetes run on the edge device. >>We do. We provision the entire stack. I mean, of course the company does using our product, but we provision the entire Kubernetes infrastructure stack all the application services and the application itself on that device. >>So I would love to dig into like where pods happen and all that, but provisioning is getting to the point that it's a solve problem. Day two. Yes. Like we, you know, you just mentioned hymns, highly regulated environments. How does spec cloud helping with configuration management change control, audit, compliance, et cetera, the hard stuff. >>Yep. And one of the things we do, you bring up a good point is we manage the full life cycle from day zero, which is sort of create, deploy all the way to day two, which is about, you know, access control, security. It's about ongoing versioning and patch management. It's all of that built into the platform. And, but you're right. Like the medical industry has a lot of regulations. And so you need to be able to make sure that everything works. It's always up to the latest level, have the highest level of security. And so all that's built into the platform. It's not just a fire and forget it really is about that full life cycle of deploying, managing on an ongoing basis. >>Well, Dave, I'd love to go into a great deal of detail with you about kind of this day two option. I think we'll be covering a lot more of that topic, Paul, throughout the week, as we talk about just, you know, as we've gotten past, you know, how do I deploy Kubernetes pod to how do I actually operate it? >>Absolutely, absolutely. The devil is in the details as they say, >>Well, and also too, you have to recognize that the edge has some very unique requirements. You want very small form factors. Typically you want low it resources. It has to be sort of zero touch or low touch because if you're a large food provider with 20,000 store locations, you don't wanna send out field engineers two or three times a year to update them. So it really is an interesting beast and we have some exciting technology and people like GE are using that. >>Well, Dave, thanks a lot for coming on to Q you're now Cub Alon. You've not been on before. >>I have actually. Yes. Oh. But I always enjoy it. >>It's great conversation. Foria Spain. I'm Keith towns along with Paul Gillon and you're watching the cue, the leader in high tech coverage.

>>Yeah. Hello and welcome to the Cubes Presentation of Women in Tech Global Event Celebrating International Women's Day I'm John for a host of the Cube. We had a great guest in Cuba. Alumni Veranda re vice president. Commercial sales for Europe, Middle East and Africa. EMEA at AWS Amazon Web service to great to see you. Thank you for coming in all the way across the pond and the US to Palo Alto from London. >>Thank you, John. Great to see you again. I'm super excited to be part of this particularly special event. >>Well, this is a celebration of International Women's Day. It's gonna continue throughout the rest of the year, and every day is International Women's Day. But you're actually international. Your women in Tech had a great career. We talk that reinvent. Let's step back and walk through your career. Highlights to date. What have been some of the key things in your career history that you can share? >>Uh, thanks, John. It's always nice to reflect on this, you know? Look, I the way I would classify my career. First of all, it's very it's been very international. I was born and raised in India I went to study in the US It was always a dream to go do that. I did my masters in Boston University. I then worked in the U S. For a good 17 years across A number of tech, uh, tech companies in particular, started my career at McKinsey in the very early days and then moved on to work for E M. C. You'll you'll probably remember them, John. Very well, of course, There now, Del um And then I moved over to Europe. So I've spent the last 18 years here in Europe. Um, and that's been across a couple of different things. I I always classify. Half my career has been strategy, transformation, consulting, and the other half of my career is doing the real job of actually running operations. And I've been, you know, 12 15 years in the tech and telecom sector had the excitement of running Schneider Electric's business in the UK Denniston and Private Equity went back to McKinsey Boomerang, and then a W s called me, and how could I possibly refuse that? So it's been really exciting, I think the one big take away when I reflect on my career is. I've always had this Northstar about leading a business someday, and then I've sort of through my career master set of skills to be able to do that. And I think that's probably what you see. Very eclectic, very mobile, very international and cross industry. Uh, in particular. >>I love the strategy and operations comment because they're both fun, but they're different ones. Very execution, tactical operating. The business strategy is kind of figuring out the future of the 20 mile stare. You know, playing that chess match, so to speak, all great skills and impressive. But I have to ask you, what got you in the tech sector? Why technology? >>Well, so you know, in some ways I kind of fell into it, John, right? Because when I was growing up, my father was always in the tech space, so he had a business and fax machines and he was a reseller of cannon. If you remember Cannon, um, and microfilm equipment and I grew up around him, and he was a real entrepreneur. I mean, always super visionary about new things that were coming out. And so as I followed him around, I said, I kind of wanna be him. And it's a little bit about that sort of role model right early in your career. And then when I moved to the U. S. To study again, it wasn't like I thought I was gonna go to attack. I mean, I wasn't an engineer, you know. I grew up in India with economics degree. That's when women went into We didn't necessarily go into science. But when I joined McKinsey in the early days, I ended up working with, you know, the big companies of the days. You know, the IBMs, the E M. C. Is the Microsoft the oracles, etcetera. So I just then began to love, love the innovation, always being on the sort of bleeding edge. Um, and I guess it was a little bit just fascinating for me not being an engineer to learn how technology had all these applications in terms of how businesses advanced. So I guess, Yeah, that's kind of why I still think it around with it. It's interesting >>how you mentioned how you at that time you pipeline into economics, which is math. Of course. Uh, math is needed for economics, but also the big picture and This is one of the conversation we're having, Uh, this year, the breaking down the barriers for women in tech. Now there's more jobs you don't You don't need to have one pathway into into science or, you know, we're talking stem versus steam arts are super important, being creative. So the barriers to get in are being removed. I mean, if you think about the surface area for technology. So I got to ask you, what barriers do you think Stop girls and young women the most in considering a career in Tech? >>I've got to start with role models, John. Right? Because I think a number of us grew up, by the way, being the only not having the allies in the business, right? All of us, all the all the managers and hiring people are males rather than females. And the fact of the matter is, we didn't have this sort of he for she movement. And I think that's the biggest barrier is not having enough role models and positive role models in the business. I can tell you that research shows that actually, when you have female role models, you tend to hire more and actually what employees say is they feel more supportive when they have actually female managers. So I think there are lots of goodness, but we just need to accelerate how many role models we have. I think the other things I will say to you as well is, if you look at just the curriculum and the ability to get women into stem, right, I mean, we need to have colleges, universities, schools also encouraging women into stem. And you've probably heard about our programme. You know, it's something we do to encourage girls into stem. I think it's really important that teachers and others are actually encouraging girls to do math, for example, right? It's not just about science. Math is great. Logic is great, by the way. Philosophy is great. I just love what you said. I think increasingly, the EQ and EQ parts have to come together, and I think that's what women excel at. Um, so I think that's another very, very big carrier, and then the only other thing I will say is we're gonna watch the language we use, like when I think about job descriptions, they tend to be very male oriented languages we look at CVS now, if you haven't been a female in tech for a long time, your CV isn't going to show a lot of tech, is it? So for recruiters out there, look for competencies. Look for capabilities. You mentioned strategy and arts earlier. We have this leadership principles, As you know, John, really well, think big and dive deep, right? That strategy and operations. And so I think we we need to recruit for that. And we need to recruit for culture. And we need to recruit for people with ambition, an aspiration and not always Just look at 20 years of experience because you're not gonna find it. So I think those are some of the big barriers. Um, that I that I at least think, is stopping women from getting into town. But the biggest one is not enough women at the top hiring women. >>I think people want to see themselves, or at least an aspirational version of what they could be. And I think that's only gonna get better. Lots changed. A lot has happened over the years, but now, with technology in everyone's life, covid pulled forward a lot of realities. You know, the current situation in Europe where you're you are now has pulled forward a lot of realities around community, cyber, digital, our lives. And I think this opens up new positions, clearly cybersecurity. And I'm sure the job boards in every company is hiring people that didn't exist years ago, but also this new problems to solve. So the younger generation coming up, um, is gonna work on these problems, and they need to have role models. So what's your reaction to that? You know, new problems are opportunities their new so usually solved by probably the next generation. Uh, they need mentors. All this kind of works together. What's your reaction? >>Yeah, and, you know, let me pick up on something we're doing that I think is really important. I think you have to address age on the pipeline problem, you know, because they're just is a pipeline problem, you know, at the end of the day, And by that, what I mean is, we need to have more and more people with the and I'm not gonna use the word engineering or science. I'm going to use the word digital skills, right? And I think what we've we've committed to doing, John, you know, I'm very proud of this is we said we're gonna train 29 people 29 million people around this world on digital skills for free by 2025. Right, That's gonna help us get that pipeline going. The other thing we do is something called Restart where we actually do 12 weeks of training for the under, employed and under served right and underrepresented communities. And that means in 12 weeks we can get someone. And you know, this case I talk to you about this before I love it. Fast food operator to cloud, right? I mean, that's that's what I call changing the game on pipeline. But But here's the other stand. Even if the pipeline is good and we often see that the pipeline can be as much as 50% at the very early career women, by the time you get into the C suite, you're not a 50 anymore. You're less than 20%. So the other big thing John there, and this comes back to the types of roles you have an opportunities you create. We've got to pull women through the pipeline. We've really got to encourage that there are sponsors and not just mentors. I think women are sorry to say this over mentored and under sponsored. We need more people say I'm gonna open the door for you and create the opportunity I had that advantage. I hit people through my career. By the way, they were all men, right? Who actually stood out there and bang on the door and said, Okay, Tunisia is gonna go do this. And my first break I remember was having done strategy all my life when the CEO come into the room and you said, You're gonna better locks and you're gonna go run the P and L in Benelux and I almost fainted because I thought, Oh, my God, I've never run a PNR before But it's that type of risk taking that's going to be critical. And I think we've got to train our leaders and our managers to have those conversations be the sponsors, get that unconscious bias training. We all have it. Every single one of us has it. I think those are the combinations of things that are going to actually help open the door and make a see that Actually, it's not just about coding. It's actually about sales. It's about marketing. It's about product management. It's about strategy. It's about sales operations. It's about really, really thinking differently about your customers, right? And that's the thing that I think is attractive about technology. And you know what? Maybe that leads you to eventually become a coder. Or maybe not. Maybe you enter from coding, but those are all the range is available to you in technology, which is not good at advertising, >>that there's more applications than ever before. But I love your comment about over mentoring and under sponsored. Can you quickly just define the difference between those two support elements sponsoring versus, uh, mentoring sponsoring >>So mentors And by the way they can range from my son is my mentor, you know, is a great reverse mentor. By the way, I really encourage you to have the reverse mentoring going. So many mentors are people from all walks of your life, right? And you should have, you know, half a dozen of those. At least I think right who are going to be able to help you deal with situations, help coach you give you feedback respond to concerns You're having find ways for you to navigate all the stuff you need, by the way. Right? And feedback the gift we need that sponsors. It's not about the feedback. Necessarily. It's people who literally will create opportunities for you. Mentors don't necessarily do that. Sponsors will say you You know what? We got the phone. Call John and say, John, I've got the perfect person for you. You need to go speak to her. That's the big difference. John and a couple of sponsors. It's not about many, >>and that's where the change happens. I love that comment. Good call. I'm glad I could double down on that. Now that you have the environment, pipeline and working, you have the people themselves in the environment getting better sponsors and mentors, hopefully working more and more together. But once they're in the environment, they still got to be part of it. So as girls and young women and to the working sector for tech, what advice would you give them? Because now they're in the game there in the arena. So what advice would you give them? Because the environments they are now >>yeah, yeah. I mean, Gosh, John, it's you know, you've lived your career in this space. It's an exciting place to be right. Um, it's a growth opportunity. And I think that's a really important point because the more you enter sectors where there's a lot of growth and I would say hyper right growth, that's just gonna open the doors to so many more things. If you're in a place where it's all about cost cutting and restructuring, do you know what? It's super hard to really compete and have fun, right? And as we say, make history. So it's an exciting place. Today's world transformation equals digital transformation, right? So tech is the place to be, because tech is about transformation, Right? So coming in here, the one advice I would give you is Just do it because believe me, there's so much you can do, like take the risk, find someone is going to give you that entree point and get in the door right? And look, you know what's the worst that could happen? The worst that could happen is you don't like it. Fine. There's lots of other things than to go to. So my advice is, you know, don't take the mm. The really bad tips I've received in my career, right? Don't let people tell you you can't do it. You're not good enough. You don't have the experience, right? It's a male's world. You're a woman. It's all about you and not about EQ. Because that's just rubbish, Frankly, right. The top tip I was ever given was actually to take the risk and go for it. And that was my father. And then all these other sponsors I've had around the way. So that's that's the one thing I would say. The other thing I will say to you is the reason I advise it and the reason you should go for it. It's purposeful. Technology is changing our lives, you know, And we will all live to be no longer. 87 I think 100 right? And so you have the opportunity to change the course of the world by coming to technology. The vaccine deployment John was a great example, right? Without cloud, we couldn't have launch these vaccines as fast as we did. Right? Um, so I think there's a tonne of purpose. You've got to get in and then you've got to find. As I said, those sponsors, you've got to find those mentors. You've got to not worry about vertical opportunities and getting promoted. You gotta worry about horizontal opportunities, right? And doing the things that I needed to get the skills that you require, right? I also say one thing. Um, don't Don't let people tell you not to speak up, not to express your opinion. Do all of the above be authentic, Be authentic style. You will see more role models. Many, many more role models are gonna come out in tech that are going to be female role models. And actually, the men are really stepping up to the role models. And so we will be better together. And here's the big thing. We need you. We can do this without women. There's no possible way that we will be able to deliver on the absolute incredible transformation we have ahead of us without you. >>Inclusion, Diversity equity. These are force multipliers for companies. If applied properly, it's competitive advantage. And so breaking the bias. The theme this year is super super important. It sounds like common sense, but the reality is you break the bias It's not just women as men, as all of us. What can we do? Better to bring that force multiplier capabilities and competitive advantage of inclusion, diversity, equity to business. >>So the first thing I would say and my doctor used to always tell me this if it hurts, don't do it right. I would say to you just do it. Get diverse teams in place because if you have diverse teams, you have diversity of thought. You don't have to worry as much about bias because, you know, you've got the people around the table who actually represent the world. We also do something really cool. We have something called biassed busters. And so in meetings we have bias borders. People are going to, like, raise their hand and say, I'm not sure that that was really meant the way it was supposed to be, So I think that's just a nice little mechanism that we have here, Um, in a W s that helps. The other thing I would say to you is being your authentic self. You can't be a man and mentioned be women, and you're not gonna replicate somebody else because you're never gonna succeed if you do that, you know? So I would say be your authentic self all of the time, You know, we know. We know that women are sometimes labelled as aggressive when they're really not. Don't worry about it. It's not personal. I think the main thing you have to do is and I advise women all the time Is calibrate the feedback you're getting okay? Don't catastrophizing it right. Calibrate it. Taken in, you don't have to react to every feedback in the world, right? And make sure that you're also conscious of your own biases, right? So I think those are my Those are my two cents John for what they were for breaking device. I love the thing. >>Be yourself, You know, Don't take it too personal. Have some fun. That's life. That's a life lesson. Um, Final question, while I got you here, you're a great inspiration, and you're a great role model. You're running a very big business for Amazon web services. Europe, Middle East and Africa is a huge territory. It's its own thing. It's It's like you're bigger than some companies out there. Your role in your organisation. What's the hot area out there you were talking before camera. That's emerging areas that you're focused on. People are watching this young women, young ladies around the world. We're gonna look at this and say, What wave should I jump on? What's the hot things happening in in Europe? Middle Eastern Africa? >>I think the three things I would mention and I'm sure there's I'm sure, John, as we've spoken to my peers across the other gos, right, there are some similarities. The very, very hot thing right now is sustainability. Um, and you know, people are really building sustainability into their strategy. It's no longer sort of just an E S G goal in itself. It's actually very much part of changing the way they do business. So I think that's the hard part. And that's why again, I think it's a phenomenal place to be. I think the other big thing that we're absolutely talking about a lot is, and you know, this is getting even more complicated right now is just around security and cyber security and where that's going and how can we be really thinking about how we address some of these concerns that are coming out and I think there's There's something. There's a lot to be said about the way we build our infrastructure in terms of that context. So I think that's the second one. I think the third one is. People are really looking at technology to change the way businesses operate. So how does HR operate? How do you improve your employee value proposition? How do you do marketing in the next generation? How do you do finance in the next generation? So across the business is no longer the place of I t. It really is about changing the way we are as businesses and all of us becoming tech companies at the core. So the big thing there, John, is data data at the heart of everything we do data not because it's there in front of you, but data because you can actually make decisions on the back of it. So those are the things, Um, I seem to come across a lot more than anything else. >>It's always great to talk to you, your senior leader at AWS, um, inspirational to many. And thank you for taking the time to speak with us here on this great event. Women in text. Global Celebration of International Women's Day. Thank you so much for your time. >>Thank you, John. Always great to talk to you. >>We will definitely be keeping in touch More storeys to be had and we're gonna bring it to you. This is the cubes continuing presentation of women in tech. A global event celebrating International Women's Day. I'm John for your host. Thanks for watching. Yeah.

>>Welcome back to the cubes, continuous coverage of HP es latest Green Lake announcement firehose of innovation. We're seeing a >>cadence >>that HP is delivering in cloud services. Daniel Newman is here, he's the principal analyst at the tour, um, extraordinary research company. Daniel great to see you how you doing man. >>Dave Great to, great to be in person again six ft and safe. But it's good to be back. >>Yeah, it really is uh, been a blur. Right? So we're gonna talk about the pivot to cloud based services. We're seeing that everybody is sort of leaning in HP es all in. I want to talk about value and what this all means to investors. We talk about data, but let me start with the whole as a service move. As I said, everybody's doing it. You see it virtually every companies. Hp was certainly the first to say we're all in, It communicated very well to Wall Street. Everybody's in a debate. No, we were first. No, we were first, but you gotta evaluate based upon the actions that they're taking. How do you look at the trends in this space and how do you look at H. P. S performance? >>Yeah, I admired and Antonio's early pivot, you know, when he got on stage and he said, We're gonna move everything to as a service. I believe that was about two years ago now and the ambition was to have it by 2022. It immediately stood out to me because the momentum, the momentum was behind public cloud, you would have believed three years ago that every workload was going to be in the public cloud and unfortunately guys like us knew that wasn't true. But what we did know was the customers, the enterprise, we're all becoming very comfortable and preference was starting to be shown with that consumption of it meaning subscription based, moving from Capex to apex. That to me was a signal that the timing was right now. Once they got the timing right, it was really about how does this all happened right? It's not necessarily just, we're gonna flip a switch and we're going to start to offer everything as a subscription as a service. There's a lot of standing up those services, putting all that compute all that network, all that storage into a data center, making sure that you have a way to accurately price it and make it quickly consumable, which is something by the way I've admired over the past couple of years, watching the evolution of the software that HP has been rolling. Whether that's Green Lake Central as moral, is that, you know, whether that's kubernetes in the orchestration of hybrid cloud using containers or that's just the ability to spin up a single compute workload in a timely fashion. That's the attraction to public cloud. So, you know, take H P E and its strategy aside and what we have now is you have all of the traditional big iron I T O E M all moving in this direction concurrently. They all understand from both evaluation standpoint meeting Wall Street and also meeting the customer where they are, they have to step up. They had to, uh, whether that was what I was doing with apex Cisco with plus iBMS acquisition of red hat. All these companies were going from, you know, public to private, private to public and then of course you gotta go horizontal from edge to cloud as well. It's a lot to undertake Dave but it's an exciting time and knowing that hybrid is the answer the data is proving that it puts a lot of these companies in a good position to compete. >>Now you mentioned that is the customer preference for good reason. Right? That gives them more flexibility but there's also Wall Street's preference, right? You see that, you know, huge valuations companies like snowflake data, dog elastic. It's that annual recurring revenue that is appealing. They want that they want growth. We saw Q3 hp that did a beaten raise I think 1100 customers for green lake, they announced the orders were up well over 40%. I think revenue was up 30 30 plus percent. So those are the kind of metrics that Wall Street wants to see interestingly though Daniel of course the shift to an A. R. R. Model hurts the income statement but it makes it more predictable and that's what investors today want, what your thoughts. >>Absolutely. I had a chance to speak multiple times over the past few years with the leadership at HP. And it was the exact thing. David that I that I raised, I said you realize that it might be a sidestep or even a half a step backwards before you start to gain momentum. And the real problem with Wall Street is there's no patients. So you mentioned a couple of names like data dog and snowflake. These companies have exponential valuations to earnings because they don't earn anything yet. But most of the market is forward looking and the market tries to anticipate where growth is going to come and saAS companies tend to drive fast growth and fast multiples. This is also left for somewhat slow growth evaluation for companies like HP. Despite the fact that it's doing a lot of the right things you mentioned of course mid double digit growth in green lake, large customer growth numbers. You know, I believe you're serving a billion dollars in revenue or in subscription dollars. Um, fact check that on their >>way to a billion on their way to be honest. I think >>it's booked maybe over >>700 million in revenue that way. >>And so as all those, the confluence of all those events, the market has to be able to basically cherry pick though a part of the business. And I think that's been a little bit of a problem. Not just for HP, but just for all these companies that are, that are struggling with smaller multiples of their P. E ratios. This is true for Cisco? This is true for IBM this is true for for HP and I'll kind of close my thought here. But as the company continues to talk about green Lake and it continues to lean into this, this is the part that has to rise to the front front of the Wall Street investor of the business media to say that existing part of the business is stable, It's solid. They have great customers. However, concurrently the part of the business that is the future, the subscription part that attaches to the public cloud that is enabling companies to grow. That is where they're at. And that is why we see more value. There's a lot of value to unlock and it's because, you know, these small multiples and the business is heading in what I believe is the right >>direction. And HPV last quarter cited, they hit almost 35% gross margin, which is, which is a high mark, high water mark for them if you extract VM ware out of Dell there in the mid twenties. So these are two different businesses and I think that's a big reason why Dell's moving into the space. I almost think like the board conversation at HP was, hey, let's, let's not keep thinking about building boxes. Let's build services and let's add value to those services that are software based and then we can kind of control our own destiny as opposed to kind of intel getting all the margins and or M. D. Or whatever it is. So so that so how do you see as a service driving value for H. P. E. It's customers and ultimately what do they have to do to convince Wall street >>recurring revenue companies drive higher multiples? It's not even a debate and companies that have a large percentage of their business as recurring tend to drive much higher evaluation and tend to also be more beloved by shareholders. The performance of HP has been good, it's been solid, it's been in the right place especially given the circumstances of the pandemic and the impact of on prem it we all saw the explosion of SAS the explosion of cloud, you know, SAS and chips are hot, they're always hot. But everything that was sort of sandwiched in the middle became a little bit more murky throughout the pandemic times. And the ability for HP. And these companies that are in this space are operating to be able to bridge this gap. The companies have 25 or so percent of workload during the public cloud. That means the rest need services from companies like HP. So the tam is growing because the overall size of the workload, the volumes of data are all growing exponentially and that's an opportunity but the market wants to see fast growth. Dave I mean they're not going to accept the single digit overall growth if you want to get the kind of multiples of a, you know, even a Microsoft at a 40 or a sales force at 100. But HPV with its software is starting to play in those spaces where investors in the market maybe can start to recognize that it is undervalued. >>So we live in a data centric world, Antonio talks about this all the time and we're seeing HP makes some moves in terms of data data management, you see what they're doing with his moral and that's a big part of the software place. So to the extent that you can lean into that wave have a higher contribution from software, higher margin business obviously and a more predictable revenue stream. That seems to be the right direction in my view. Um it's gonna take some time to play out. They're not gonna overnight, you know, they don't have a green sheet of paper, they clean sheet of paper, they have a business that they have to manage and they have to service their customers. But to the extent that the majority of their business over time can become as a service, shouldn't that confer higher margins and and greater value to investors? Yeah, it's sticky >>for enterprise users when you move to that subscription model, it's not as easy as just lifting and shifting you build your entire business process around these investments in these technologies. Software. It's sticky, it's organizationally complex because where HP sits in the stack, where their analytic solutions and software help you more successfully deploy S. A. P type workloads. The entire company runs on that. So the involvement and the importance of the role that HP is playing is huge. The challenge for customers isn't as big customers get this, the enterprise users, the C I O. S. They get the importance Wall Street though it's a little harder for them sometimes to digest. Whereas they might be looking at something like a snowflake that you mentioned. That's fairly straightforward. Almost all of its revenue is pure subscription and it's looked at as 20 years in a perpetuity where people are still trying to wonder is HP gonna be sticky? Are these customers not only going to keep with HP but are they going to increase? Right. Is that net revenue expansion going to take place across the portfolio? And HP rolls out more services right. Started with storage and then it moves to compute and then it adds edge layer services. Are people going to buy the whole stack? Because that of course, also as we've seen with some of the bigger players can be an extremely attractive value proposition. >>Well, I also think as they move into cloud, HP has always been about optionality. So I feel as though with their day to play, for example, they can get deeper into data management but they can also partner with others, you're leaning into open source so that means you can expand your portfolio that's kind of what the cloud game is is you know, here's the cloud, we got all these different options, choose what you want, we'll manage it for you, charge you for that but we'll take away that headache. That's a good business, >>choose your own cloud adventure last week oracle reported. Um and I'm only pointing this out because you know, you look at the company and everybody was what's with their i as number? Why is it not big or smaller? Why don't we know right. But over the last couple of years we've realized that it's no longer little seeing big see little C which I would call infrastructure as a service no longer exists. Cloud is one big number. So H P E being in the cloud through its hybrid services, its software, its platform support is just as much about being in the cloud is a company that offers I. S. Or company that offers SAs however convincing the market that this is the case is the trick. We're starting to see companies because you you hear when IBM reports how their numbers are, you know, they're they're tying in all kinds of global business services and they're tying in you know, red hat numbers and they're telling in their public cloud numbers but what I'm saying is up to this point, a lot of these hybrid services are kind of not necessarily being bucket ID like this big sea of cloud but it really is the entire stack of of infrastructure platform software and then of course all those attached services for companies to deploy this that equal a cloud number. And so the subscription number grows. Green Lakes customer account grows. And I think convincing the street and everybody in between that this is a cloud number and not a on prem or a attached to the cloud number is going to really help boomer boom, the overall value that people see and what HP is doing. >>And I think not only H P E but I think others are I think finally they're starting to realize that wow, you know, we all know everything is not going to public cloud. We understand it's a hybrid world Public cloud spend a company's the hyper scale is collectively spent $100 billion dollars last year on Capex. That's like a gift to a company like HP that can connect the dots and create that abstraction layer that hides the underlying complexity. We'll take care of that for you will make everything cloud native. We can bring cloud native on prem and go out to the edge, which is like the Wild West that is a that's a trillion dollar opportunity that there's no limit to market potential for companies out there and HP specifically. >>Well the edges a massive opportunity and that's what I said, you know, a lot of us are and we do this ourselves as both analysts and sometimes media personalities is we like to debate how big the opportunity of cloud is. And of course there are some firms that try to market size this, but I actually think it's extraordinarily difficult to market sizes, especially because of the edge. You talk about data and analytics. I recently attended the a event. It's a car event in Munich and you just look at the amount of data that vehicles are going to be creating in the in the coming years. They're basically massive rolling data centers full of chips, compute networking storage. This is all going to take significant infrastructure investments at scale and it's creating this humongous opportunity at the edge and you look at five Gs impact and as we roll out five G it's scale. Every one of these things brings more data connects, more devices and all that intelligence needs infrastructure, It needs software, it needs services. So the overall tam Dave is going to continue to grow and I think if anything it tends to be underestimated because it's really hard to define just how big the data equation is actually going to be in the market. >>Digital changes the equation. It's not, it's no longer servers, storage, networking database, its cloud services that are enabling digital transformations. I'll give you one more >>thing that just crossed my mind. But I think is important is if you even look at the the S. G. And sustainability efforts that most companies are going to be taking the amount of investment in trying to capture, comprehend manage just the data and analytics to understand your footprint and understand how you are going to achieve carbon neutrality and how you're going to do this up and down. And I mean that's just one thing and of course that's a, I wouldn't call it table stakes at this point, the market expects every company to be making this kind of investment well, when you run a multi national global enterprise that has edge, that has data centers that has manufacturing facilities, there is just unbelievable requirements on technology. And again, we've got to connect that public cloud somehow. So we can't ignore the fact that those public cloud players are all addressing this, they're all bringing solutions out. But companies like HP, this is where their sweet spot is, and this is where I believe they're going to have to compete very aggressively and efficiently to show we are a great partner to the public cloud, but our legacy and our capabilities mean we understand this part of the business, we believe we're the right fit and trust me, the Azure and AWS are, they're not going to make this easy, they're going to be competitive but they're also going to going to be very cooperative >>well, and they're coming into the home court of the on prem vendors. So that's gonna be interesting to see how that plays out as an observer, as an analyst, what do you want to see from HP, Green Lake cloud services? What are the, what are the areas that you're gonna be watching that could serve as indicators of success and momentum? >>Well, we didn't even talk because we did talk about some of that, but we didn't even talk about aI and amount for instance, all this data itself has to be managed and processed. So the fact that you're getting to that data management at scale, the fact that you're building out orchestration for containers. Well this is because of that data delusion conundrum, whatever word we want to use for it. But the best companies in the world are going to find a way to extract more value from that data and that's going to be through the application of aI of ml of neural networks, deep learning and other important capabilities. Having a foot into that Dave is something I want to see HP and it already does, but I want to see the participation there. This is an area that I think public cloud is doing really well there. They really made big investments both with homegrown chips with partnering with the likes of videos and intel to, to offer a lot of enhancement acceleration, um Ml and AI services. I think this is gonna be an area that on prem and through hybrid offerings. We're gonna want to see the company compete. Uh and then of course, I think back to the one thing Dave, I'll just kind of wrap on this, is that that customer growth, I mean you talked about how to get evaluation, how to get the street up, people get excited about overall growth. They need to get that narrative carved out about green, like about the subscription growth, the service growth point next and all that stuff, but all that has to start to equate to overall growth. Um you know, I think it needs to be made at least single high digits, single overall percentage growth, especially because the whole portfolio supposed to be there. You know, companies get those big multiples are growing >>fast growth on, on that large of a base would get people's attention. You mentioned custom chips, H P >>E, you >>know, H P S H P S heritage and HP. They have chops in custom silicon. So be interesting to see if, if you know the future, you talk about ai inference at the edge, huge disruptive potential opportunities and I'm really curious as to see how that plays out because that is another trillion dollar market opportunity. Daniel, thanks so much for coming to the cubes. Great to have you looking forward to working with you in the future. >>Yeah, it's great to be here. And sorry, we didn't get to those chips earlier. We could have gone down a whole, another whole, another >>half hour. Great, great to talk to you. All right, thank you for watching everybody. This is the cubes, continuous coverage of HBs, Big Green Lake announcement. Keep it right there for more, great content. Mhm.

>>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 coverage of IBM Think 2021 virtual, I'm john for your host of the cube, had a great line up here talking sustainability. Kary musa ph d general manager of AI applications and block chains, career great to see you and wayne both the vice president of corporate environmental affairs and chief sustainability officer, among other things involved in the products around that. Wait and korean, great to see you. Thanks for coming on. >>Thank you for having us. >>Well, I'll start with you. What's driving? IBMS investment sustainability as a corporate initiative. We know IBM has been active, we've covered this many times, but there's more drivers now as IBM has more of a larger global scope and continues to do that with hybrid cloud, it's much more of a global landscape. What's driving today's investments in sustainability, >>you know, johN what drives IBM in this area has always been a longstanding, mature and deep seated belief in corporate responsibility. That's the bedrock foundation. So, you know, IBM is 100 10 year old company. We've always strived to be socially responsible, But what's not as well known is that for the last 50 years, IBM has truly regarded environmental sustainability is a strategic imperative. Okay, It's strategic because hey, environmental problems require a strategic fix. It's long term imperative because you have to be persistent with environmental problems, you don't necessarily solve them overnight. And it's imperative because business cannot succeed in a world of environmental degradation, that really is the main tenant of sustainable development. You can't have successful economies with environmental degradation, you can't solving environmental problems without successful economies. So, and IBM's case as a long standing company, We were advantaged because 50 years ago our ceo at the time, Tom Watson put in place the company's first policy for environmental, our stewardship and we've been at it ever since. And he did that in 1971 and that was just six months after the U. S. C. P. A. Was created. It was a year before the Stockholm Conference on the Environment. So we've been added for that long. Um in essence really it's about recognizing that good environmental management makes good business sense. It's about corporate responsibility and today it's the E of E. S. G. >>You know, wayne. That's a great call out, by the way, referencing thomas Watson that IBM legend. Um people who don't may not know the history, he was really ahead of its time and that was a lot of the culture they still see around today. So great to see that focus and great, great call out there. But I will ask though, as you guys evolved in today's modern error. How is that evolved in today's focus? Because you know, we see data centers, carbon footprint, global warming, you now have uh A I and analytics can measure everything. So I mean you can you can measure everything now. So as the world gets larger in the surface area of what is contributing to the sustainable equation is larger, what's the current IBM focus? >>So, you know, these days we continually look at all of the ways in which IBM s day to day business practices intersect with any matter of the environment, whether it's materials waste water or energy and climate. And IBM actually has 21 voluntary goals that drive us towards leadership. But today john as you know, uh the headline is really climate change and so we're squarely focused like many others on that. And that's an imperative. But let me say before I just before I briefly tell you our current goals, it's also important to have context as to where we have been because that helps people understand what we're doing today. And so again, climate change is a topic that the men and women of IBM have paid attention to for a long time. Yeah, I was think about it. It was back in 1992 that the U. S. C. P. A. Created something called Energy Star. People look at that and they say, well, what's that all about? Okay, that's all about climate change. Because the most environmentally friendly energy you can get is the energy that you don't really need to consume. IBM was one of eight companies that helped the U. S. C. P. A. Launched that program 1992. Today we're all disclosing C. 02 emissions. IBM began doing that in 1994. Okay. In 2007, 13 years ago, I'd be unpublished. Its position on climate change, calling for urgent action around the world. We supported the Paris agreement 2015. We reiterated that support in 2017 for the us to remain a partner. 2019, we became a founding member of Climate Leadership Council, which calls for a carbon tax and a carbon dividend. So that's all background context. Today, we're working on our third renewable electricity goal, our fifth greenhouse gas emissions reduction goal and we set a new goal to achieve net zero greenhouse gas emissions. Each of those three compels IBM to near term >>action. That's awesome wayne as corporate environmental affairs and chief sustainable, great vision and awesome work. Karim dr Karim use if I wanna. We leave you in here, you're the general manager. You you've got to make this work because of the corporate citizenship that IBM is displaying. Obviously world world class, we know that's been been well reported and known, but now it's a business model. People realize that it's good business to have sustainability, whether it's carbon neutral footprints and or intersecting and contributing for the world and their employees who want mission driven companies ai and Blockchain, that's your wheelhouse. This is like you're in the big wave, wow, this is happening, give us your view because you're commercializing this in real time. >>Yeah, look as you've already said and it's the way well articulated, this is a business imperative, right? Is key to all companies corporate strategies. So the first step when you think about operationalized in this is what we've been doing, is to really step back and kind of break this down into what we call five key needs or focus areas that we've understood that we work with our clients. Remember in this context, Wayne is indeed my clients as well. Right. And so when you think about it, the five needs, as we like to lay them out, we talk about the sustainability strategy first of all, how are you approaching it as you saw from Wayne, identifying your key goals and approaches right against that, you begin to get into various areas and dimensions. Climate risk management is becoming increasingly important, especially in asset heavy industries electrification, energy and emissions management, another key focus area where we can bring technology to bear resilient infrastructure and operations, sustainable supply chain, all of these kind of come together to really connect with our clients business operations and allows us to bring together the technologies and the context of ai Blockchain and the key business operations. We can support to kind of begin to address specific news cases in the context of those needs. >>You know, I've covered it in the past and written about and also talked about the cube about sustainability on the supply chain side with Blockchain, whether it's your tracking, you know, um you know, transport of goods with with Blockchain and making sure that that kind of leads your kind of philosophy works because this waste involved is also disruption to business a security issues. But when you really move into the Ai side, how does a company scale that Corinne? Because now, you know, I have to one operationalize it and then scale it. Okay, so that's transformed, innovate and scale. How do I take take me through the examples of how that works >>well, I think really key to that, and this is really key to our ethos, it's enabling ai for business by integrating ai directly into business operations and decision making. So it's not really how can I put this? We try to make it so that the client isn't fixating on trying to deploy ai, they're just leveraging Ai. So as you say, let's take some practical examples. You talked about sustainable supply chains and you know, the key needs around transparency and provenance. Right? So we have helped clients like a tear with their seafood network or the shrimp sustainability network, where there's a big focus on understanding where are things being sourced and how they're moving through the supply chain. We also have a responsible sourcing business network that's being used for cobalt in batteries as an example from mine to manufacturing and here our technologies are allowing us to essentially track, trace and prove the provenance Blockchain serves as kind of that key shared ledger to pull all this information together. But we're leveraging AI to begin to quickly assess based upon the data inputs, the actual state of inventory, how to connect dots across multiple suppliers and as you onboard them and off board them off the network. So that's how we begin to put A. I in action so that the client begins to fixate on the work and the decisions they need to make. Not the AI itself. Another quick example would be in the context of civil infrastructure. One of our clients son and Belt large, maximum client of ours, he uses maximum to really focus on the maintenance and sustainable maintenance of their bridges. Think about how much money is spent setting up to do bridge inspections right. When you think about how much they have to invest the stopping of the traffic that scaffolding. We have been leveraging AI to do things like visual inspection, actually fly drones, take pictures, assess those images to identify cracks and use that to route and prioritized work. Similar examples are occurring in energy and utilities focused on vegetation management where we're leveraging ai to analyse satellite imagery, weather data and bringing it together so that work can be optimally prior authorized and deployed um for our clients. >>It's interesting. One of the themes coming out of think that I'm observing is this notion of transformation is innovation and innovation is about scale. Right? So it's not just innovation for innovating sake. You can transform from whether it's bridge inspections to managing any other previous pre existing kind of legacy condition and bring that into a modern error and then scale it with data. This is a common theme. It applies to to your examples. Kareem, that's super valuable. Um how do you how do you tie that together with partnering? Because wayne you were talking about the corporate initiative, that's just IBM we learned certainly in cybersecurity and now these other areas like sustainability, it's a team sport, you have to work on a global footprint with other industries and other leaders. How was I being working across the industry to connect and work with other, either initiatives or companies or governments. >>Sure. And there have been john over the years and at present a number of diverse collaborations that we seek out and we participate in. But before I address that, I just want to amplify something Kareem said, because it's so important, as I look back at the environmental movement over the last 50 years, frankly, since the first earth day in 1970, I, you know, with the benefit of hindsight, I observed there have really been three different hair, It's in the very beginning, global societies had to enact laws to control pollution that was occurring. That was the late 60s 1970s, into the early 1980s and around the early 1980s through to the first part of this century, that era of let's get control of this sort of transformed, oh, how can we prevent stuff from happening given the way we've always done business and that area ran for a while. But now, thanks to technology and data and things like Blockchain and ai we all have the opportunity to move into this era of innovation, which differs from control in which differs from traditional prevention. Innovation is about changing the way you get the same thing done. And the reason that's enabled is because of the tools that you just spoke about with korean. So how do we socialize these opportunities? Well to your question, we interact with a variety of diverse teams, government, different business associations, NGos and Academia. Some examples. There's an organization named the Center for Climate and Energy Solutions, which IBM is a founding member of its Business Leadership Council. Its predecessor was the Q Centre on global climate change. We've been involved with that since 1998. That is a cross section of people from all these different constituencies who are looking for solutions to climate. Many Fortune 102000s in there were part of the green grid. The green grid is an organization of companies involved with data centers and it's constantly looking at how do you measure energy efficiency and data centers and what are best practices to reduce consumption of energy at data centers where a member of the renewable energy buyers alliance? Many Fortune 100 200 Zar in that trying to apply scale to procure more renewable electricity to actually come to our facilities I mentioned earlier were part of the Climate Leadership Council calling for a carbon tax were part of the United Nations Environment programs science policy business form that gets us involved with many ministers of environment from countries around the world. We recently joined the new MITt Climate and sustainability consortium. Mitt Premier Research University. Many key leaders are part of that. Looking at how academic research can supercharge this opportunity for innovation and then the last one, I'm just wrap up call for code. You may be familiar with IBM s involvement in call for code. Okay. The current challenge under Call for Code in 2021 calls for solutions targeted the climate change. So that's that's a diverse set of different constituents, different types of people. But we try to get involved with all of them because we learn and hopefully we contribute something along the way as well. >>Awesome Wayne. Thank you very much, Karim, the last 30 seconds we got here. How do companies partner with IBM if they want to connect in with the mission and the citizenship that you guys are doing? How do they bring that to their company real quick. Give us a quick overview. >>Well, you know, it's really quite simple. Many of these clients are already clients of ours were engaging with them in the marketplace today, right, trying to make sure we understand their needs, trying to ensure that we tune what we've got to offer both in terms of product and consulting services with our GPS brethren, you know, to meet their needs, linking that in as well to IBM being in what we like to turn clients zero. We're also applying these same technologies and capabilities to support IBM efforts. And so as they engage in all these associations, what IBM is doing, that also provides a way to really get started. It's really fixate on those five imperatives or needs are laid out, picked kind of a starting point and tie it to something that matters. That changes how you're doing something today. That's really the key. As far as uh we're concerned, >>Karim, we thank you for your time on sustainability. Great initiative. Congratulations on the continued mission. Going back to the early days of IBM and the Watson generation continuing out in the modern era. Congratulations and thanks for sharing. >>Thank you john. >>Okay. It's the cubes coverage. I'm sean for your host. Thanks for watching. Mhm. Mhm. Mhm.

>>mhm Yes. >>Welcome back to the Cube coverage of Red Hat summit 21 2021. I'm john for host of the Cubans virtual this year as we start preparing to come out of Covid a lot of great conversations here happening around technology. This is the emerging technology with Red hat segment. We've got three great guests steve watt manager, distinguished engineer at Red Hat hurl saying senior software engineer Red Hat and luke Hines, who's the senior software engineer as well. We got the engineering team steve, you're the the team leader, emerging tech within red hat. Always something to talk about. You guys have great tech chops that's well known in the industry and I'll see now part of IBM you've got a deep bench um what's your, how do you view emerging tech um how do you apply it? How do you prioritize, give us a quick overview of the emerging tech scene at Redhead? >>Yeah, sure. It's quite a conflated term. The way we define emerging technologies is that it's a technology that's typically 18 months plus out from commercialization and this can sometimes go six months either way. Another thing about it is it's typically not something on any of our product roadmaps within the portfolio. So in some sense, it's often a bit of a surprise that we have to react to. >>So no real agenda. And I mean you have some business unit kind of probably uh but you have to have first principles within red hat, but for this you're looking at kind of the moon shot, so to speak, the big game changing shifts. Quantum, you know, you got now supply chain from everything from new economics, new technology because that kind of getting it right. >>Yeah, I think we we definitely use a couple of different techniques to prioritize and filter what we're doing. And the first is something will pop up and it will be like, is it in our addressable market? So our addressable market is that we're a platform software company that builds enterprise software and so, you know, it's got to be sort of fit into that is a great example if somebody came up came to us with an idea for like a drone command center, which is a military application, it is an emerging technology, but it's something that we would pass on. >>Yeah, I mean I didn't make sense, but he also, what's interesting is that you guys have an open source D N A. So it's you have also a huge commercial impact and again, open sources of one of the 4th, 5th generation of awesomeness. So, you know, the good news is open source is well proven. But as you start getting into this more disruption, you've got the confluence of, you know, core cloud, cloud Native, industrial and IOT edge and data. All this is interesting, right. This is where the action is. How do you guys bring that open source community participation? You got more stakeholders emerging there before the break down, how that you guys manage all that complexity? >>Yeah, sure. So I think that the way I would start is that, you know, we like to act on good ideas, but I don't think good ideas come from any one place. And so we typically organize our teams around sort of horizontal technology sectors. So you've got, you know, luke who's heading up security, but I have an edge team, cloud networking team, a cloud storage team. Cloud application platforms team. So we've got these sort of different areas that we sort of attack work and opportunities, but you know, the good ideas can come from a variety of different places. So we try and leverage co creation with our customers and our partners. So as a good example of something we had to react to a few years ago, it was K Native right? So the sort of a new way of doing service um and eventing on top of kubernetes that was originated from google. Whereas if you look at Quantum right, ibms, the actual driver on quantum science and uh that originated from IBM were parole. We'll talk about exactly how we chose to respond to that. Some things are originated organically within the team. So uh luke talking about six law is a great example of that, but we do have a we sort of use the addressable market as a way to sort of focus what we're doing and then we try and land it within our different emerging technologies teams to go tackle it. Now. You asked about open source communities, which are quite interesting. Um so typically when you look at an open source project, it's it's there to tackle a particular problem or opportunity. Sometimes what you actually need commercial vendors to do is when there's a problem or opportunity that's not tackled by anyone open source project, we have to put them together to create a solution to go tackle that thing. That's also what we do. And so we sort of create this bridge between red hat and our customers and multiple different open source projects. And this is something we have to do because sometimes just that one open source project doesn't really care that much about that particular problem. They're motivated elsewhere. And so we sort of create that bridge. >>We got two great uh cohorts here and colleagues parole on the on the Quantum side and you got luke on the security side. Pro I'll start with you. Quantum is also a huge mentioned IBM great leadership there. Um Quantum on open shift. I mean come on. Just that's not coming together for me in my mind, it's not the first thing I think of. But it really that sounds compelling. Take us through, you know, um how this changes the computing landscape because heterogeneous systems is what we want and that's the world we live in. But now with distributed systems and all kinds of new computing modules out there, how does this makes sense? Take us through this? >>Um yeah john's but before I think I want to explain something which is called Quantum supremacy because it plays very important role in the road map that's been working on. So uh content computers, they are evolving and they have been around. But right now you see that they are going to be the next thing. And we define quantum supremacy as let's say you have any program that you run or any problems that you solve on a classical computer. Quantum computer would be giving you the results faster. So that is uh, that is how we define content supremacy when the same workload are doing better on content computer than they do in a classical computer. So the whole the whole drive is all the applications are all the companies, they're trying to find avenues where Quantum supremacy are going to change how they solve problems or how they run their applications. And even though quantum computers they are there. But uh, it is not as easily accessible for everyone to consume because it's it's a very new area that's being formed. So what, what we were thinking, how we can provide a mechanism that you can you don't connect this deal was you have a classical world, you have a country world and that's where a lot of thought process been. And we said okay, so with open shift we have the best of the classical components. You can take open shift, you can develop, deploy around your application in a country raised platform. What about you provide a mechanism that the world clothes that are running on open shift. They are also consuming quantum resources or they are able to run the competition and content computers take the results and integrate them in their normal classical work clothes. So that is the whole uh that was the whole inception that we have and that's what brought us here. So we took an operator based approach and what we are trying to do is establish the best practices that you can have these heterogeneous applications that can have classical components. Talking to our interacting the results are exchanging data with the quantum components. >>So I gotta ask with the rise of containers now, kubernetes at the center of the cloud native value proposition, what work clothes do you see benefiting from the quantum systems the most? Is there uh you guys have any visibility on some of those workloads? >>Uh So again, it's it's a very new, it's very it's really very early in the time and uh we talk with our customers and every customers, they are trying to identify themselves first where uh these contacts supremacy will be playing the role. What we are trying to do is when they reach their we should have a solution that they that they could uh use the existing in front that they have on open shift and use it to consume the content computers that may or may not be uh, inside their own uh, cloud. >>Well I want to come back and ask you some of the impact on the landscape. I want to get the look real quick because you know, I think security quantum break security, potentially some people have been saying, but you guys are also looking at a bunch of projects around supply chain, which is a huge issue when it comes to the landscape, whether its components on a machine in space to actually handling, you know, data on a corporate database. You guys have sig store. What's this about? >>Sure. Yes. So sick store a good way to frame six store is to think of let's encrypt and what let's encrypt did for website encryption is what we plan to do for software signing and transparency. So six Door itself is an umbrella organization that contains various different open source projects that are developed by the Six door community. Now, six door will be brought forth as a public good nonprofit service. So again, we're very much basing this on the successful model of let's Encrypt Six door will will enable developers to sign software artifacts, building materials, containers, binaries, all of these different artifacts that are part of the software supply chain. These can be signed with six door and then these signing events are recorded into a technology that we call a transparency log, which means that anybody can monitor signing events and a transparency log has this nature of being read only and immutable. It's very similar to a Blockchain allows you to have cryptographic proof auditing of our software supply chain and we've made six stores so that it's easy to adopt because traditional cryptographic signing tools are a challenge for a lot of developers to implement in their open source projects. They have to think about how to store the private keys. Do they need specialist hardware? If they were to lose a key then cleaning up afterwards the blast radius. So the key compromise can be incredibly difficult. So six doors role and purpose essentially is to make signing easy easy to adopt my projects. And then they have the protections around there being a public transparency law that could be monitored. >>See this is all about open. Being more open. Makes it more secure. Is the >>thief? Very much yes. Yes. It's that security principle of the more eyes on the code the better. >>So let me just back up, is this an open, you said it's gonna be a nonprofit? >>That's correct. Yes. Yes. So >>all of the code is developed by the community. It's all open source. anybody can look at this code. And then we plan alongside the Linux Foundation to launch a public good service. So this will make it available for anybody to use if your nonprofit free to use service. >>So luke maybe steve if you can way into on this. I mean, this goes back. If you look back at some of the early cloud days, people were really trashing cloud as there's no security. And cloud turns out it's a more security now with cloud uh, given the complexity and scale of it, does that apply the same here? Because I feel this is a similar kind of concept where it's open, but yet the more open it is, the more secure it is. And then and then might have to be a better fit for saying I. T. Security solution because right now everyone is scrambling on the I. T. Side. Um whether it's zero Trust or Endpoint Protection, everyone's kind of trying everything in sight. This is kind of changing the paradigm a little bit on software security. Could you comment on how you see this playing out in traditional enterprises? Because if this plays out like the cloud, open winds, >>so luke, why don't you take that? And then I'll follow up with another lens on it which is the operate first piece. >>Sure. Yes. So I think in a lot of ways this has to be open this technology because this way we have we have transparency. The code can be audited openly. Okay. Our operational procedures can be audit openly and the community can help to develop not only are code but our operational mechanisms so we look to use technology such as cuba netease, open ship operators and so forth. Uh Six store itself runs completely in a cloud. It is it is cloud native. Okay, so it's very much in the paradigm of cloud and yeah, essentially security, always it operates better when it's open, you know, I found that from looking at all aspects of security over the years that I've worked in this realm. >>Okay, so just just to add to that some some other context around Six Law, that's interesting, which is, you know, software secure supply chain, Sixth floor is a solution to help build more secure software secure supply chains, more secure software supply chain. And um so um there's there's a growing community around that and there's an ecosystem of sort of cloud native kubernetes centric approaches for building more secure software. I think we all caught the solar winds attack. It's sort of enterprise software industry is responding sort of as a whole to go and close out as many of those gaps as possible, reduce the attack surface. So that's one aspect about why 6th was so interesting. Another thing is how we're going about it. So we talked about um you mentioned some of the things that people like about open source, which is one is transparency, so sunlight is the best disinfectant, right? Everybody can see the code, we can kind of make it more secure. Um and then the other is agency where basically if you're waiting on a vendor to go do something, um if it's proprietary software, you you really don't have much agency to get that vendor to go do that thing. Where is the open source? If you don't, if you're tired of waiting around, you can just submit the patch. So, um what we've seen with package software is with open source, we've had all this transparency and agency, but we've lost it with software as a service, right? Where vendors or cloud service providers are taking package software and then they're making it available as a service but that operationalize ng that software that is proprietary and it doesn't get contributed back. And so what Lukes building here as long along with our partners down, Lawrence from google, very active contributor in it. Um, the, is the operational piece to actually run sixth or as a public service is part of the open source project so people can then go and take sixth or maybe run it as a smaller internal service. Maybe they discover a bug, they can fix that bug contributed back to the operational izing piece as well as the traditional package software to basically make it a much more robust and open service. So you bring that transparency and the agency back to the SAS model as well. >>Look if you don't mind before, before uh and this segment proportion of it. The importance of immune ability is huge in the world of data. Can you share more on that? Because you're seeing that as a key part of the Blockchain for instance, having this ability to have immune ability. Because you know, people worry about, you know, how things progress in this distributed world. You know, whether from a hacking standpoint or tracking changes, Mutability becomes super important and how it's going to be preserved in this uh new six doorway. >>Oh yeah, so um mutability essentially means cannot be changed. So the structure of something is set. If it is anyway tampered or changed, then it breaks the cryptographic structure that we have of our public transparency service. So this way anybody can effectively recreate the cryptographic structure that we have of this public transparency service. So this mutability provides trust that there is non repudiation of the data that you're getting. This data is data that you can trust because it's built upon a cryptographic foundation. So it has very much similar parallels to Blockchain. You can trust Blockchain because of the immutable nature of it. And there is some consensus as well. Anybody can effectively download the Blockchain and run it themselves and compute that the integrity of that system can be trusted because of this immutable nature. So that's why we made this an inherent part of Six door is so that anybody can publicly audit these events and data sets to establish that there tamper free. >>That is a huge point. I think one of the things beyond just the security aspect of being hacked and protecting assets um trust is a huge part of our society now, not just on data but everything, anything that's reputable, whether it's videos like this being deep faked or you know, or news or any information, all this ties to security again, fundamentally and amazing concepts. Um I really want to keep an eye on this great work. Um Pearl, I gotta get back to you on Quantum because again, you can't, I mean people love Quantum. It's just it feels like so sci fi and it's like almost right here, right, so close and it's happening. Um And then people get always, what does that mean for security? We go back to look and ask them well quantum, you know, crypto But before we get started I wanted, I'm curious about how that's gonna play out from the project because is it going to be more part of like a C. N. C. F. How do you bring the open source vibe to Quantum? >>Uh so that's a very good question because that was a plan, the whole work that we are going to do related to operators to enable Quantum is managed by the open source community and that project lies in the casket. So casket has their own open source community and all the modification by the way, I should first tell you what excuse did so cute skin is the dedicate that you use to develop circuits that are run on IBM or Honeywell back in. So there are certain Quantum computers back and that support uh, circuits that are created using uh Houston S ticket, which is an open source as well. So there is already a community around this which is the casket. Open source community and we have pushed the code and all the maintenance is taken care of by that community. Do answer your question about if we are going to integrate it with C and C. F. That is not in the picture right now. We are, it has a place in its own community and it is also very niche to people who are working on the Quantum. So right now you have like uh the contributors who who are from IBM as well as other uh communities that are specific specifically working on content. So right now I don't think so, we have the map to integrated the C. N. C. F. But open source is the way to go and we are on that tragic Torri >>you know, we joke here the cube that a cubit is coming around the corner can can help but we've that in you know different with a C. But um look, I want to ask you one of the things that while you're here your security guru. I wanted to ask you about Quantum because a lot of people are scared that Quantum is gonna crack all the keys on on encryption with his power and more hacking. You're just comment on that. What's your what's your reaction to >>that? Yes that's an incredibly good question. This will occur. Okay. And I think it's really about preparation more than anything now. One of the things that we there's a principle that we have within the security world when it comes to coding and designing of software and this aspect of future Cryptography being broken. As we've seen with the likes of MD five and Sha one and so forth. So we call this algorithm agility. So this means that when you write your code and you design your systems you make them conducive to being able to easily swap and pivot the algorithms that use. So the encryption algorithms that you have within your code, you do not become too fixed to those. So that if as computing gets more powerful and the current sets of algorithms are shown to have inherent security weaknesses, you can easily migrate and pivot to a stronger algorithms. So that's imperative. Lee is that when you build code, you practice this principle of algorithm agility so that when shot 256 or shot 5 12 becomes the shar one. You can swap out your systems. You can change the code in a very least disruptive way to allow you to address that floor within your within your code in your software projects. >>You know, luke. This is mind bender right there. Because you start thinking about what this means is when you think about algorithmic agility, you start thinking okay software countermeasures automation. You start thinking about these kinds of new trends where you need to have that kind of signature capability. You mentioned with this this project you're mentioning. So the ability to actually who signs off on these, this comes back down to the paradigm that you guys are talking about here. >>Yes, very much so. There's another analogy from the security world, they call it turtles all the way down, which is effectively you always have to get to the point that a human or a computer establishes that first point of trust to sign something off. And so so it is it's a it's a world that is ever increasing in complexity. So the best that you can do is to be prepared to be as open as you can to make that pivot as and when you need to. >>Pretty impressive, great insight steve. We can talk for hours on this panel, emerging tech with red hat. Just give us a quick summary of what's going on. Obviously you've got a serious brain trust going on over there. Real world impact. You talk about the future of trust, future of software, future of computing, all kind of going on real time right now. This is not so much R and D as it is the front range of tech. Give us a quick overview of >>Yeah, sure, yeah, sure. The first thing I would tell everyone is go check out next that red hat dot com, that's got all of our different projects, who to contact if you're interested in learning more about different areas that we're working on. And it also lists out the different areas that we're working on, but just as an overview. So we're working on software defined storage, cloud storage. Sage. Well, the creator of Cf is the person that leads that group. We've got a team focused on edge computing. They're doing some really cool projects around um very lightweight operating systems that and kubernetes, you know, open shift based deployments that can run on, you know, devices that you screw into the sheet rock, you know, for that's that's really interesting. Um We have a cloud networking team that's looking at over yin and just intersection of E B P F and networking and kubernetes. Um and then uh you know, we've got an application platforms team that's looking at Quantum, but also sort of how to advance kubernetes itself. So that's that's the team where you got the persistent volume framework from in kubernetes and that added block storage and object storage to kubernetes. So there's a lot of really exciting things going on. Our charter is to inform red hats long term technology strategy. We work the way my personal philosophy about how we do that is that Red hat has product engineering focuses on their product roadmap, which is by nature, you know, the 6 to 9 months. And then the longer term strategy is set by both of us. And it's just that they're not focused on it. We're focused on it and we spend a lot of time doing disambiguate nation of the future and that's kind of what we do. We love doing it. I get to work with all these really super smart people. It's a fun job. >>Well, great insights is super exciting, emerging tack within red hat. I'll see the industry. You guys are agile, your open source and now more than ever open sources, uh, product Ization of open source is happening at such an accelerated rate steve. Thanks for coming on parole. Thanks for coming on luke. Great insight all around. Thanks for sharing. Uh, the content here. Thank you. >>Our pleasure. >>Thank you. >>Okay. We were more, more redhead coverage after this. This video. Obviously, emerging tech is huge. Watch some of the game changing action here at Redhead Summit. I'm john ferrier. Thanks for watching. Yeah.

>>from >>around the >>globe, it's the cube >>with digital coverage of >>IBM think 2021 >>brought to >>you by IBM >>everybody welcome back to the cubes, continuous coverage of IBM think 2021 the virtual edition, my name is Dave Volonte and we're gonna talk about observe ability front and center for devops and developers, things are really changing. We're going from monitoring and logs and metrics and just this mess and now we're bringing in a I and machine intelligence and with us is Pablo Baron, who is the Ceo of inst ana, which is an IBM company that IBM acquired november of 2020. Pablo great to see you. Thanks for joining us from Munich. >>Thanks for having me. Thanks a lot. >>You're very welcome. So you know, I always love to talk to founders and co founders and try to understand sort of why they started their companies and congratulations on the exit. That's awesome. After 55 I'm sure grinding but relatively short years. Why did you guys start in stana? And what were some of the trends that you saw in that you're seeing now in the observe ability space? >>Yeah, that's a very good question. So, um, the journey began ah, as we worked in the company called code centric, the majority of the founders and uh, we actually specialized in troubleshooting uh, well, real hard customer performance problems. We used all different kinds of A PM solutions for that. You know, we, we've built expertise like collectively maybe 300 years in the whole company. So we would go from one um, adventure into the other and see customers suffer and help them, you know, overcome this trouble. At some point we started seeing architectures coming up that were not well covered by the classic KPM sellers, like people went after this. Sudha, Sudha, Sudha virtualization all in containers, you know, just dropping random workloads into container running this maybe in cabinet as well. Not not actually not 56 ago, but years ago. But you get the point, we started with the heavy continues container ization and we've seen that a classic A PM solution that is heavily, you know, like machinery rented and and some of them you've encountered by the number of CPU etcetera etcetera. They were very well suited for this. Plus all of the workloads are so dynamic. They keep coming and going. You cannot really, you know, place your agent there that is not adopting to change continuously. We've seen this coming and we really, we've seen the trouble that we cannot really support the customers properly. So after looking around, we just said, hey, uh, I think it's time to just implement a new one. Right? So we started that adventure with the idea of a constant change, with the idea of everything is containers, with idea of everything goes towards glove needed. People just run random uh workloads of all different versions that are linked altogether than this. Whole microservices trend came up where people would just break down their monoliths and resilience of literally very small components that could be deployed independently. Everything keeps changing all the time. The classic solution cannot keep up with that. >>So let me pick it up from there if I can. So it's interesting. Your timing is quite amazing because as you mentioned, it really wasn't kubernetes when you started in the middle part of last decade. You know, containers have been around for a long time, but kubernetes weren't, it wasn't mainstream back then. So you had some foresight uh and and the market has just come right into your vision but but maybe talk a little bit about the way A. P. M. Used to work. It was, I started to talk about this. It was metrics, it was traces, it was logs, it was make your eyes bleed type of type of stuff. Um, and maybe you can talk about how you guys are different and how you're accommodating the rapid changes in the market today. >>Right? So well there is very, very many um cases this. So first of all we always have seen that the work that you should not be doing by hand. I mean we already said that you should not be doing this and you should be automating as much as possible. We see this everywhere in the industry that everything gets more and more automated. We want to animate through the whole continuous delivery cycle. Unfortunately monitoring was the space that probably never was automated before installing a came into place. So our idea was, hey, just just get rid of the unnecessary work because you keep people busy with stuff they should not be doing like manually watching dashboards, setting up agents with every single software change, like adopting configuration etcetera, etcetera, etcetera. All of these things can be done automatically, you know, to very, very, very large extent. And that's what we did. We did this from the beginning, everything we approached, we, we, we think twice about can we automate, you know, the maximum out of it And only if we see that it's, it's, you know, too much an effort, etcetera. We will, we will probably not do this, but otherwise we're not, we don't do the same thing. You know, you can compromise the other right? The other aspect is, so this is different to the classic A PM world that is typically very expert heavy. The expert comes into, you know, into the project and really starts configuring etcetera, etcetera etcetera. This is this is a totally different approach the other approaches continuous change and you know, adapting to the continuous change, container comes up, you need to know what this kind of workload, what kind of work load this thing is, how it is connected to all the others. And then at some point probably it's gonna it's gonna go through the change and get a new versions etcetera etcetera. You need to capture this whole life cycle without really changing your monitoring system. Plus, if you move your workloads from the classic Monolith, through microservices on to cuba needs, you kind of transitioning, you know, it's a journey and this journey, you want to keep your business abstractions as stable as possible. The term application is nothing that you should be reconfiguring. Once you figure out what is payment in your system. This is a stable abstraction. It doesn't matter if you deliver it on containers. Doesn't matter if this is just a huge JBM that owns the whole box alone. It simply doesn't matter. So we we decoupled everything infrastructure from everything logic and uh the foundation for this is what we call the dynamic ground. It technically is pretty much a data structure. Regular graph data structure with, you know, connections in multiple directions from different notes. But the point is that we actually decompose the whole, I teach geography. This is the term I like to use because there is, there is no other its infrastructure, its topology, it is on the other hand, just, you know, same sides of the same thing. When you have a limits process, it can be HIV m it's just at the same time, it can be approached with an application, it's the same thing and given different names and this different faces of this thing can be linked with everything else in a totally different way. So we're decomposing this from the beginning of the product which allows us to to have a very deep and hierarchical understanding of problems when it appears. So we can nail it not down to a metric. That probably doesn't make sense to any user but really name the cause by look in this J. V. M, the drop wizard metric exercise that is misbehaving. This indicates that this particular piece of technology is broken and here's how it's broken. So there's a built in explanation to a problem. So um the the classic eight pm as I said, it is a very expert heavy um, territory we try to automate the expert. We have this guy called stan this is your you know, kind of virtual devoPS engineer has a I in there. It has some artificial brain, it never sleeps, it observes all of the problems. It really is an amazing guy because nobody likes him because he always tells you what's broken. You don't need to invite them to the party and give them a raise just there and conserving your systems. >>I like stand, I like stand better than fred, no offense to fred but friends of the guy in the lab coat that I have to call every time to help me fix my problems and what you're describing is end to end visibility or observe ability in terms that norm either normal people can understand or certainly stand, can understand and can automate. And that kind of leads me to this notion of anti patterns um getting software, we think of anti patterns as you know you have software hairballs and software bloat, you've got stovepipe systems, your your data guy by background and so you will understand stovepiped data systems, there's organizational examples of of of anti patterns like micromanagement or over an analysis by paralysis. If you will, how do anti patterns fit into this world? Of observe ability? What do you see? >>Oh there's many, I could write a whole book actually about that. Um let me just list a few. So first of all it is valid for any kind of automation, what you can automate you should not be doing by hand, this is a very common entire pattern. People are just doing work by hand just because the lazy word, you know like repetitive work or there is no kind of foundation to automate that whatever the reason, this is clearly an anti pattern. What we, what we also see in the monitoring space are very interesting things like normally since the problems in the observe ability monitoring space is so hard, You normally send your best people watching grants who want them to contribute to the business value rather than waste the time observing charts that like 99 of them are normal. The other aspect, of course, is what we also have seen is the other side of the spectrum where people just send total mobilizes into the, into the problem of observe ability and let them learn on the subject. Which is also not a good thing because you cannot really I mean there are so many unknown unknowns for people who are not experts in the space. They will not catch the problem. You will go through pain, right? So it's not the learning project, that's not the research from a project. This is very essential to the operation of humor, business and humanity. And there's many examples like that, >>right? Yeah. So I want to end by just sort of connecting the dots so this makes a lot of sense. And if you think about, you know, Ivan Kushner said that IBM has got to win the architectural battle for hybrid cloud. And when I think of Hybrid cloud, I think of on prem connecting to public cloud, not only the IBM public cloud but other public clouds going across clouds going to the edge, bringing open shift and kubernetes to the edge and developing new supporting new workloads. So as I. T. Is like the university keeps expanding and it gets more and more and more complicated. So to your point humans are not going to be able to solve the classic performance problems in the classic way. Uh they're gonna need automation. So it really does fit well into iBMS hybrid cloud strategy, your, your thoughts and I'll give you the last word. >>Yeah, totally. I mean, I'm IBM generally is of course very far ahead in regards to research AI and all these things this death, sorry, those could be combined with an stand a very, very, you know, natively right. We we are prepared to automate using AI all of the well, I would want to claim that all of the monitoring observe ability problems. Of course, there is manual work in some, you know, in some cases you simply don't know what people want to observe. So you kind of need to give them names and that's where people come in. But this is more creative work. Like you don't want to do the stupid work with people. It doesn't, you know, there is no, it doesn't make any sense. And IBM of course, um requiring in stana gets, you know, the foundation for all of the things that used to be done by hand. Now, fully automated, combined within standard, combined with Watson, the ions, This is, this is huge. This is like a real great story, like the best research of the world eating. Uh, probably the best a PMC. >>That's great Pablo, really appreciate you taking us through Astana and the trends and observe ability and what's going on at IBM. And congratulations on your, your success and thanks for hanging with us with all the craziness going on at your abode. And uh really, it was a pleasure having you on. Thank you. >>Thanks a lot. >>All right, and thank you for watching everybody says Dave Volonte and our ongoing coverage of IBM, think 2021 you're watching the Cube? Yeah. Mhm

>>from >>Around the globe. It's the cube with digital coverage of IBM think 2021 brought to you by IBM. Welcome to the cubes coverage of IBM Think 2021. I'm your host lisa martin today. Have a new guest new to the cube moderate Tabla, the director of strategic partnerships for enterprise application services is joining me moderate. It's nice to have you on the program. >>Thank you lisa. Very excited to be here and hello everyone. >>So different this year. Again Virtual like last year we're going to talk about digital transformation and we saw this huge acceleration in 2020. The massive adoption of SAS applications. We want to talk though about IBM managed services for S AP applications. So before we get into that I'd love for you to be able to describe what your role is to our audience. >>Absolutely lisa. So good day everyone. I've been with IBM for over 23 years and my current role, I run the strategic alliances for IBM basically in the E. R. P. Space S. A. P. Being our primary strategic partner, I have a global team of architects and we basically look at market requirements. Talk to a lot of customers, talk to our business partner S. A. P. Obviously um you know, try to help them would come up with a solution. Well the transformation journey to the cloud and hopefully today, you know, we'll elaborate a little bit more on the exact work that we do in this space. So very happy to be here. Thank you. >>Sure. So we're going to dissect the IBM s. A. P. Relationship. I think you even worked at S. A. P. Before your 23 year tenure at IBM. So we'll get to some of that as well. But help us understand customers have so much choice each day. There is more and more interest why should a customer choose IBM as their strategic partner for this digital transformation journey. >>Well really, IBM has been in this essay p business for many, many decades. As you know Um we have many many certified people in S. A. P. close to 40,000 people actually globally. Um And we can help the clients in various aspects of their journey. So you know the typical cloud journey has four different aspects to it. Um You need the advice so you need basically systems integration services to help customers actually define the scope on, you know what they actually want to either upgrade, bring it to current as well as you know what workloads they want to move to the cloud. We can help customers with our Systems integration services called the Global Business Business Services in IBM we can help them with their entire planning, we can help them with the actual move to the cloud. So IBM offers a whole different variety of services for migration or not only to see ASAP workloads. I mean ASAP typically ends up being the heart of the workloads that any of the major customers run but surrounding SCP, there's a lot of other applications so we can help plan that entire journey for advice and then move it as well as in the interim. You know, there's also another step which can be some customers. They need to build net new and you know upgrade their applications to the latest technologies so we can help them with that. And then once the building move is over, obviously customers need help with the actual steady state run state environment and that's where this key service that we have managed services for SCP applications helps them. So our certifications with S. A. P. And the fact that we have consultants that are certified and all these different aspects of the journey can really help your clients. The other part, I would say that IBM is really a hybrid cloud provider. So obviously we have our cloud service, the IBM cloud, but we can offer this service meeting the customer where they need to be. So we are a client centric service, so if the customer has a choice of AWS or Azure, uh we can meet them left. So this is how, you know, we can really help our customers with our expertise. I know the data point to note that, you know, 70 80 of the enterprise customers still have not moved their workloads to the cloud. So this is a space, especially with Covid, as you've seen what's happened, you know, customers now are really, really looking to accelerate the journey because it's become a necessity, It's no longer something that our Ceo and C I O can push to the right, right, this is something they have to act now. So I began with all these various services, you know, specifically good in the S A. P area. Um, and given that we've been managing these production workloads for a lot of these enterprise customers on our cloud services for many, many years, we have the experience, we can truly help them with their journey >>And as you said, that's so critical of these days. One of the things that I think we learned in 2020 is is there was no time like the present, it really became such a massive shift that for business survival, those that weren't digitized definitely were in some hot water. Talk to me. So you talked about the IBM s, a P relationship being longstanding, Can you talk to me about the different aspects of the alliance and how that helps you guys to meet customers where they are? >>Sure. Um so s. a. p. and idea, we've been strategic partners for over 46 years. That's a long time. The partnership obviously has evolved over the years and I'll talk about you know a few of the different aspects where we've been partners um you know, the alliance initially obviously started, you know, IBM is in multiple businesses as you know, we have our one of the largest systems integrators in the world from a global business services point of view as well as one of the largest application planet services providers. So that's uh you know part of the alliance then we have our server groups, the power systems that IBM has. So that's another dimension of the alliance where um you know 5 6000 plus ASAP clients even today are still running um there? S a the applications on the power systems, whether it's on premise or also in some of the cloud deployment models. Historically we also had obviously the Database DB two alliance, but now with the S. A. P. S moved to Hannah um that's kind of a little bit of a mute point. Obviously it still exists, but most of the clients are now obviously being encouraged really to adopt S. A. P. S latest S four hana from the services standpoint. The other facet, you know, is really around the cloud services. So that's really our topic today right. Um in the cloud services area we have alliances with S. A. P very very strong alliances that have existed for you know, almost a decade now. Um as I said we've been managing the production workloads for very very large customers in many different industries, their entire supply chains. HR financial systems are running on IBM either in the old traditional hosting models um or also in our cloud models for the past 10 plus years. Right as IBM has evolved, so we have made sure that we do a whole different types of certifications with S. A. P. To stay current. Um many of these certifications are done either you know every two years, some are done every year. And if anyone checks, you know, the S. A. P. Service marketplace website which is owned by S. A. P. You can see IBM listed in all these different angles as a certified provider. There isn't another provider that can claim this breath in terms of certifications that IBM has done and that's why customers can benefit either from one or two of these services that IBMS provides or obviously a combination is a single vendor if the customer needs. So, you know, we have the sex, we have the credibility, we have decades of, you know, Delivery excellence in these areas, servicing these clients. Lots of the Fortune, 100 customers actually are running. Um there? S a p workloads on the IBM systems, whether in traditional hosting or in a hybrid cloud deployment. Some cases were actually providing services for customers that run their SCP workloads on premise. So we cater to that, you know, sets of clients as well and then of course others that are purely on our cloud. Um IBM cloud as well as hyper scholars. Yeah, so long >>list of certifications, that seems to be one of the biggest differentiators that you talked about me a little bit about how things have evolved over the last 12 to 18 months. in terms of how is IBMS focus changed for hybrid cloud with S. A. P. >>Yeah, so the focus changed if you know, you know, until last year we will call the cloud and cognitive company. Um This year of course the whole company has changed and we're going through a major transformation at the moment. We are the hybrid cloud company now. And that that name change means a lot. It means a lot in the sense that it gives choices to the customer, that's what the whole mission is all about. We want to make sure that customers are consuming IBM services and the IBM wants to meet them where they want to be. So there's you know, flexibility of choices in terms of hybrid, another cloud deployment model. So most customers in the S. A. P. Area, you know, they're looking for either just a pure private cloud deployment or they're looking for public cloud deployment or a combination and some are because, you know, there? S A. P. S. Footprint sizes are so large. Think about the multinational global companies, you know, and then they operate in so many different regions of the world and their data sizes of their databases are so large. Perhaps, you know, the public cloud really isn't a good fit yet. These customers are looking to move some sort of their workloads to the cloud. So that's where this hybrid cloud helps them. Because customers, you know, 90 plus percent of the clients today are really not choosing one hyper Scaler as their deployment option. They're really looking at multiple. So because they're running their workloads not just ASAP, but everything else, you know, SCP always brings along a whole bunch of other applications like tax applications and other interfaces, homegrown applications analytics that the customers are using. So if you want to take advantage of the true hybrid cloud and the benefits of all the various um, deployments and hyper scale is available in that region. Really, the hybrid cloud strategy from IBM is a perfect fit because we give them choices of deployment. We're not saying that you have to deploy an IBM cloud. Um, we're saying you can deploy either on premise VWs as your idea of cloud. Really what makes sense? You know, best sense for the types of war clothes that the customer is looking at. So that's how the strategy for IBM has completely changed to meet the clients, you know, for what they're actually looking for. Talk to me a >>little bit about the go to market so I B M and S A P longstanding decades old relationship, A lot of certifications that you talked about. We're talking about business critical Applications, you mentioned supply chain a minute ago and I can't help but think it how supply chain has been affected in the last year. What is the good market approach with respect to providing consultation services to help customers determine? Should we migrate to what Hyper Scaler and how and when? >>Yeah, so we can help them with that? Um, so hyper hyper scale is obviously, you know, IBM has been listed for example, as the leader in Gartner 2020 and you know, there's lots of other stats that show them that IBM is a leader in application services, in consulting services, application management services as well as managed services. So these are all different, Right? And you can see us being listed as a leader either it's in Gartner or I. D. C. Or Horse or Wave. And for many reasons and you know, IBM actually has one series of pinnacle awards from S. A. P. Over the U. S. How this helps the clients really determined is that, you know, IBM obviously does a lot of studies externally. We have internal as well as external facing views of comparatives of the various hyper scholars, um you know, including Aws, Azure, G. C. P. And so on. So when a customer comes to us for asking for advice, um, and so on, we basically look at our own intellectual properties, all the analysis that has been done. And more importantly, we look at the full scope of services that the customer wants is doing. What sort of a business are there in. We have industry experts, there's E. R. P. Strategy, um, folks within IBM. So, you know, they go after a certain industry and when they, let's say, you know, they've gone after the oil and gas industry, for example, they will look at multiple customers in that particular space. So based on their experiences, we can actually define the right road map for the client to be able to help them to move their work clothes to this hybrid cloud strategy that I just mentioned. Right? So that's how we can help them because we have the expertise in that industry as well. >>And I'm curious moderate in the last year with so much flux and rapidly changing market conditions, Did you >>see any >>one or two industries in particular really leading the charge here and coming to IBM. S. A. P. For help on this transformation journey which has been accelerated by a couple of years. >>Suddenly the retail industry for sure, right. I mean in spite of the crisis, I think the retail industry did pretty well, right? Because people still have to buy stuff. Of course, the whole buying behavior change. No question. Um You and I don't know about two days of, but for me, you know, I was never a major online shopper. Oh yeah. You know, I just about everything. Um previously it used to be select things here and there, but now it's totally changed, right? So that industry certainly has accelerated. No question. We've had a lot of those coming. The other industries that I've seen. The change in the last 12, 18 months is really, for example, you know, the banking industry and so on. Um IBM basically, you know, launched a lot of services in the financial services sector for this reason. Um So those are of course transforming very fast to keep up with the market. Um and I'm sure there's others, right? But these are the two that come to mind. Yeah, >>two that have been most affected and needed to pivot so quickly. In addition to health care. Let me ask you one final question here. Before we wrap. Talk to me about the advantages of using the PMC partner managed cloud s a P license resale model. The advantages of using that and the benefits. >>Sure. Um so we, you know, so far our discussion was really focused around, you know, the various service capabilities that IBM has in terms of our capabilities for helping clients with hyper scholars and hybrid cloud. We also need to spend a little bit of time talking about the operations model. Right? So when they're running their production workloads on IBM PMC is yet another dimension. So what PMC partner managed cloud is really some very limited partnerships that s A P does And the IBM is the lead on that one in this base. What ASAP allows is the partner, which in this case is IBM to resell the ASAP software license to a customer. So IBM has the rights globally to resell the license and why is that beneficial to the client? Because now, um, IBM can actually turn around the S. A. P license and have the customer pay us in a SAS model. So it basically is now an apex model where the customer is basically paying, you know, a monthly fee as an example, so there's no upfront cost to the client and they basically pay IBM and IBM PS ASAP. So IBM is kind of holding the risk if you will on behalf of the customer, it gives customers more choices, more flexibilities, better pricing approach. So if the customer wants as an example to buy everything the full package, including systems implementation services, deployment models with choices on a cloud, whether it's IBM cloud or others as well as the license itself. IBM has this end to end capability today. We've been selling it to several clients for a few years in several geography is right. So that's the advantage behind it. >>Excellent. Thanks for breaking that down moderate and joining me today talking about what's new with I B M and S A P, the opportunities for customers to accelerate their digital transformation. We appreciate you stopping by. >>Thank you very much, lisa truly enjoyed it. Thank you. >>Good. Me too. For moderate Tabla. I'm lisa martin. You're watching the cubes coverage of IBM think 2021. >>Mm.

>>from around the globe, it's the cube with digital coverage of >>IBM. think 2021 >>brought to you by IBM. >>Welcome to the cubes coverage of IBM Think 2021. I'm lisa martin joined next by Peter morrow, the VP of sales and marketing at IBM partner TRM. Peter welcome to the program. >>I thank you. Happy to be here. >>Tell me a little bit about yourself and TRM before we dig in. >>Um Well Trn is a longtime business partner for IBM, we for about 30 years have specialized in helping IBM customers implement maximo and um have a lot of deep technology expertise and in maximo and and related um software and the enterprise asset management industry um On the VP of sales and marketing. I've been at TRM for about 10 years and I'm I'm proud to lead our talented sales teams and our sole mission is to help our customers get value out of their am solutions and and we're really excited about recent developments in Ai and and bringing value um to a lot of our customers and their organization and finally get our ally out of their longtime investments in the am. >>Let's dig in a bit more to the IBM relationship, I know TRM as a gold partner, but talk to me about that and how TRM has leveraged that partnership with IBM to help your customers be successful. >>Um sure, now, you know, we're a little bit of a unique partner with IBM for a long time, we've been pure resell and implementation services and and recently we've transitioned into an O E M relationship with IBM where we actually embed IBM products into broader TRM offerings. And I, you know, this, this relationship that we have with with IBM is really important as IBM is the, is the dominant player in the A, m and A I and and hybrid cloud. It's really a natural fit for us to leverage those really mature solutions and build on top of them. Uh, TRS deep expertise and the technology and the reliability side to offer more of an end to end solution to our customers. >>Got it. So the last year or so we've seen a lot of market dynamics. Talk to me about the E a M, market, what's going on there? What are some of the changes? >>Um well, there's a couple of key changes that that we see. Um one of the biggest changes I think that impacts our business and IBM is that customers really don't have an appetite for long expensive implementations of custom solutions. They're really looking for more turnkey solutions that have proven value already and and very mature. You know, they've already spent tens of millions of dollars implementing, you know, maximo or related E AM solution. They really don't want to embark on, you know, this really expensive long journey um to get to that next level. And so to me this requirement, we've been focused for the past couple years on developing much more turnkey solutions, one of which is is one that we call TRM maximo A. M solution and that's built on maximum, but it's also layered with IBM's new AI solution for maximo customers. And you know, we marry that with our deep reliability expertise and you know, we're really excited about being able to roll it out and in literally weeks instead of months or years for a lot of new customers and you know, that's a really short time to value. And our ally, it's something that's pretty much unheard of until now in this industry. >>Talk to me about some of the advantages that your customers are getting like on a general level from ai from hybrid cloud from data. >>Um I mean this is really groundbreaking. What we're finding is that there's, you know, until very recently, a I was really not embraced as a practical solution to a lot of maintenance problems. You know, you're looking at a community of of pretty old school mindsets and maintenance and reliability where you know, it's a very, you know, R. C. M is a very structured methodology for breaking down um equipment and failure types and and and solutions, you know, ways to predict those failures and you know, for a long time RCM specialists didn't really feel like a I was a solution that that was the answer. And what we're finding is that, you know, with the maturity level of IBMS products, it is now at a point where a I is a great fit and you take an experienced reliability specialist and you arm them with A. I tools like like IBM is asset monitor and maximum health and predict and you give them those tools and they can, they can roll out predictive solutions that scale like like really they've never had the chance to before >>and talk to me about some of the the adaptations that TRM has made in the last year or so as the market has been so much in flux and so many dynamics going on. How have you adapted to that to really help those customers take advantage of the latest technologies and for example use aI >>you know, well the big thing for us is recognizing that that customers really aren't interested in a long expensive, drawn out solution. You know, they recognize they have problems but until you can come to the table with something that they can digest in in small bites and that, is that a price point that isn't over the top there really happy staying with the status quo at least until the solutions, you know, can be delivered in like that, you know, very um bite sized um implementation program. So we've, we've spent a lot of time trying to make our solutions more turnkey, packaging up offerings in a way that you can start small, but all that effort you put in on a small scale, you can ramp up and scale enterprise wide without making a huge investment and it doesn't take years to roll it out. You can really do something and make an impact within a couple of weeks or months rather than many months and years down the road. >>That time to value is key, especially I think we've learned in the last year that that real time is so essential for so many things. I'm just curious of any industries in particular that TRM and IBM are really helping transform energy, for example, give me some examples of industries that are really moving forward with your technologies. >>It's really the classic asset intensive industries, utilities are really big maximum users and they're they're the ones that, you know, they um there embraced, they've embraced maximum for many, many years, they're hungry for innovative technology, but still, you know, cautious about moving forward on a large scale, but we're able to get them excited with the programs that we're offering and the same goes with oil and gas, that's another big user of maximum, you know, asset intensive organization and you know, manufacturing, you know, definitely big maximo users, all three have been, you know, very interested in moving forward with, you know, the ai for maintenance solutions that, you know, TRM and and IBM are together bringing to the market, >>You summed up, you know, across the oil and gas energy utilities, as you mentioned, what are some of the biggest things that you hear in terms of demands from customers when you're in sales meetings, what are they looking for problems they need you to help solve? >>You know, it's honestly, it's it's the classic problems that we've been working with them for 20 years and really have, they haven't been able to solve effectively, you know, where they're talking about, you know, critical assets that break down unexpectedly, you know, maintenance teams running around doing a lot of maintenance on assets that's in perfect health, um making big promises on transforming maintenance, you know, massively reducing maintenance budgets and it really hasn't happened. And there's really been until now no real solution that solves those problems directly. And we believe the combination of Ai and reliability engineering and in the key e A. M fundamental principles is what's going to help our customer base really get value and really solve the problems that they really suffered from all these years. >>It's interesting that you say that it really they haven't been able to solve those problems and but from a technological perspective, the technology is there now to help them do that. What's the time window when you're talking with customers, especially given the market dynamics that were still living in, are they coming to you saying help us? You know, within a week two weeks we've got to turn this around. >>I mean the ones that are approaching this with an open mind, you know, we can we can communicate to them that a huge undertaking is not required. They can they can get started on a small project, select one critical asset and then begin to plug in some data, um, you know, around that asset that they know is related to equipment failures. We can get that data connected with the maximum asset monitor and you know, within weeks they begin monitoring that asset health, They do some anomaly detection and it does not require a big long term investment. And so for somebody who is willing to keep an open mind about AI and and really wants to give it a try, you know, that sale cycle is very short. They're willing to get going relatively quickly. You know, we do find that many organizations want to step back, take it slow, assess other options. And for them, that's that aligns more with the classic, you know, big bang type of implementation project where that takes months of planning, you know, budget planning approvals and and that goes into that 12, 18 months sales cycle or project planning phase that, you know, that's fine. And at the end of that, you know, it's a big project but we really do recommend starting small, it is definitely possible to see some early quick winds and then roll out on a larger scale and you know, frankly you could have something deployed at scale within that entire period of planning that they would otherwise naturally do on their own. >>Take us out here peter with some predictions, some thoughts maybe a crystal ball on where you see the ea m market going the rest of this year and what TRM is planning to do to help customers really leverage opportunities and growth. >>You know, I really do believe we're at a tipping point where there's been a lot of anticipation leading up to um the release of maximo and the max maximum eight and the maximum application suite. There's the Ai apps that are in the sweet like asset monitor and health and predict that they really are mature products. There's not, you know, I think until now there's the customer base has, has viewed ai as more of like a fantasy or science fiction as it relates to two maintenance. But you know, these products are real and I think with a lot of spending having been on hold over the past year, there's a lot of interest in learning more, trying to test the waters. I really think that we're going to see a lot of interest in predictive solutions, a lot of interest in IOT projects and you know, we're in a position where we're ready to begin rolling these out and it's really exciting. >>Yeah, the maturation is there, the technology is the customer interest is there? Certainly the opportunities in there. Peter take us out with customers, go to learn more information about your solutions. >>I mean, the best places to check us out on our website, W W W dot TRM net dot com were also on linked in. We do a lot of blogs, we do a lot of webinars, you know, we're out in front and trying to make um, you know, the market aware of our thought leadership and deep expertise in, you know, maximo and e a M and and in predictive solutions. Um We've got a Youtube channel where we post demos and, you know, all of our webinars, so we're, you know, we're trying to push information out there, um you know, happy to, you know, we look forward to interacting with prospects and customers about how our solutions can impact them. >>Excellent. Peter thanks for stopping by and sharing with us more about the TRM IBM relationship, the opportunities in the A. M. Market and the appetite for AI that >>your customers and >>very big industries are having. We appreciate your time. >>Hey, thank you very much. I enjoyed it. >>Two for Peter Morrow. I'm Lisa Martin. You're watching the cubes coverage of IBM think 2021 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 coverage of IBM Think 2021 virtual, I'm john for your host of the cube. We had a great line up here talking sustainability, kary musa ph d general manager of AI applications and block chains going great to see you and wayne, both the vice president of corporate environmental affairs and chief sustainability officer, among other things involved in the products around that. Wait and korean, great to see you. Thanks for coming on. >>Thank you for having us. >>Well, I'll start with you what's driving? IBMS investment in sustainability as a corporate initiative. We know IBM has been active, we've covered this many times, but there's more drivers now as IBM has more of a larger global scope and continues to do that with hybrid cloud, it's much more of a global landscape. What's driving today's investments in sustainability, >>You know, jOHn what drives IBM in this area has always been a longstanding, mature and deep seated belief in corporate responsibility. That's the bedrock foundation. So, you know, IBM 110 year old company, we've always strived to be socially responsible, But what's not as well known is that for the last 50 years, IBM has truly regarded environmental sustainability is a strategic imperative. Okay, It's strategic because hey, environmental problems require a strategic fix. It's a long term imperative because you have to be persistent with environmental problems, you don't necessarily solve them overnight. And it's imperative because business cannot succeed in a world of environmental degradation that really is the main tenant of sustainable development. You can't have successful economies with environmental degradation, you can't solving environmental problems without successful economies. So, and IBM's case as a long standing company, We were advantaged because 50 years ago our ceo at the time, Tom Watson put in place the company's first policy for environmental a stewardship and we've been at it ever since. And he did that in 1971 and that was just six months after the U. S. E. P. A. Was created. It was a year before the Stockholm Conference on the Environment. So we've been added for that long. Um in essence, really it's about recognizing that good environmental management makes good business sense, It's about corporate responsibility and today it's the E of E. S. G. >>You know, wayne. That's a great call out, by the way, referencing thomas Watson, the IBM legend. Um people who don't may not know the history, he was really ahead of its time and that was a lot of the culture they still see around today. So great to see that focus and great, great call out there. But I will ask though, as you guys evolved in today's modern error, how has that evolved in today's focus? Because, you know, we see data centers, carbon footprint, global warming, you now have a I and analytics can measure everything. So I mean you can you can measure everything now. So as the world gets larger in the surface area of what is contributing to the sustainable equation is larger, what's the current IBM focus? >>So these days we continually look at all of the ways in which IBM s day to day business practices intersect with any matter of the environment, whether it's materials, waste water or energy and climate. And IBM actually has 21 voluntary goals that drive us towards leadership. But today john as you know, uh the headline is really climate change and so we're squarely focused like many others on that and that's an imperative. But let me say before I just before I briefly tell you our current goals, it's also important to have context as to where we have been because that helps people understand what we're doing today. And so again, climate change is a topic that the men and women of IBM have paid attention to for a long time. Yeah, I was think about it. It was back in 1992 that the U. S. C. P. A. Created something called Energy Star. People look at that and they said, well, what's that all about? Okay, that's all about climate change. Because the most environmentally friendly energy you can get is the energy that you don't really need to consume. IBM was one of eight companies that helped the U. S. C. P. A. Launched that program 1992. Today we're all disclosing C. 02 emissions. IBM began doing that in 1994. Okay. In 2007, 13 years ago, I'd be unpublished. Its position on climate change, calling for urgent action around the world. He supported the Paris Agreement 2015. We reiterated that support in 2017 for the us to remain a partner. 2019, we became a founding member of Climate Leadership Council which calls for a carbon tax and a carbon dividend. So that's all background context. Today, we're working on our third renewable electricity goal, our fifth greenhouse gas emissions reduction goal and we set a new goal to achieve net zero greenhouse gas emissions. Each of those three compels IBM to near term action. >>That's awesome wayne as corporate environmental affairs and chief sustainable, great vision and awesome work. Karim dr Karim use if I wanna we leave you in here, you're the general manager. You you got to make this work because of the corporate citizenship that IBM is displaying. Obviously world world class, we know that's been been well reported and known, but now it's a business model. People realize that it's good business to have sustainability, whether it's carbon neutral footprints and or intersecting and contributing for the world and their employees who want mission driven companies ai and Blockchain, that's your wheelhouse. This is like you're on the big wave, wow, this is happening, give us your view because you're commercializing this in real time. >>Yeah, look as you've already said and it's the way well articulated, this is a business imperative, right is key to all companies corporate strategies. So the first step when you think about operationalized in this is what we've been doing, is to really step back and kind of break this down into what we call five key needs or focus areas that we've understood that we work with our clients. Remember in this context, Wayne is indeed my clients as well. Right. And so when you think about it, the five needs, as we like to lay them out, we talk about the sustainability strategy first of all, how are you approaching it as you saw from Wayne, identifying your key goals and approaches right against that, you begin to get into various areas and dimensions. Climate risk management is becoming increasingly important, especially in asset heavy industries electrification, energy and emissions management, another key focus area where we can bring technology to bear resilient infrastructure and operations, sustainable supply chain, All of these kind of come together to really connect with our clients business operations and allows us to bring together the technologies and context of ai Blockchain and the key business operations. We can support to kind of begin to address specific news cases in the context of those >>needs. You know, I've covered it in the past and written about and also talked about on the cube about sustainability on the supply chain side with Blockchain, whether it's your tracking, you know, um you know, transport of goods with with Blockchain and making sure that that kind of leads your kind of philosophy works because there's waste involved is also disruption to business, a security issues, but when you really move into the Ai side, how does a company scale that Corinne, because now, you know, I have to one operationalize it and then scale it. Okay, so that's transformed, innovate and scale. How do I take take me through the examples of how that works >>well, I think really key to that, and this is really key to our ethos, it's enabling ai for business by integrating ai directly into business operations and decision making. So it's not really how can I put this? We try to make it so that the client isn't fixating on trying to deploy ai, they're just leveraging Ai. So as you say, let's take some practical examples. You talked about sustainable supply chains and you know, the key needs around transparency and provenance. Right. So we have helped clients like a tear with their seafood network or the shrimp sustainability network where there's a big focus on understanding where are things being sourced and how they're moving through the supply chain. We also have a responsible sourcing business network that's being used for cobalt in batteries as an example from mine to manufacturing and here our technologies are allowing us to essentially track, trace and prove the provenance Blockchain serves as kind of that key shared ledger to pull all this information together. But we're leveraging AI to begin to quickly assess based upon the data inputs, the actual state of inventory, how to connect dots across multiple suppliers and as you on board in an off board them off the network. So that's how we begin to put A I in action so that the client begins to fixate on the work and the decisions they need to make. Not the AI itself. Another quick example would be in the context of civil infrastructure. One of our clients son and Belt large, maximum client of ours he uses maximum too rarely focus on the maintaining sustainable maintenance of their bridges. Think about how much money is spent setting up to do bridge inspections right. When you think about how much they have to invest the stopping of the traffic that scaffolding. We have been leveraging AI to do things like visual inspection. Actually fly drones, take pictures, assess those images to identify cracks and use that to route and prioritized work. Similar examples are occurring in energy and utilities focused on vegetation management where we're leveraging AI to analyse satellite imagery, weather data and bringing it together so that work can be optimally prior authorized and deployed for our >>clients. It's interesting. One of the themes coming out of think that I'm observing is this notion of transformation is innovation and innovation is about scale. Right? So it's not just innovation for innovating sake. You can transform from whether it's bridge inspections to managing any other previous pre existing kind of legacy condition and bring that into a modern error and then scale it with data. This is a common theme. It applies to to your examples. Kareem, that's super valuable. Um how do you how do you tie that together with partnering? Because wayne you were talking about the corporate initiative, that's just IBM we learned certainly in cybersecurity and now these other areas like sustainability, it's a team sport, you have to work on a global footprint with other industries and other leaders. How was I being working across the industry to connect and work with other, either initiatives or companies or governments. >>Sure. And there have been john over the years and at present a number of diverse collaborations that we seek out and we participate in. But before I address that, I just want to amplify something Kareem said, because it's so important, as I look back at the environmental movement over the last 50 years, frankly, since the first earth day in 1970, I, you know, with the benefit of hindsight, I observed there have really been three different hair, it's in the very beginning, global societies had to enact laws to control pollution that was occurring. That was the late 60s 1970s, into the early 1980s and around the early 1980s through to the first part of this century, that era of let's get control of this sort of transformed, oh how can we prevent stuff from happening given the way we've always done business and that area ran for a while. But now thanks to technology and data and things like Blockchain and ai we all have the opportunity to move into this era of innovation which differs from control in which differs from traditional prevention. Innovation is about changing the way you get the same thing done. And the reason that's enabled is because of the tools that you just spoke about with Korean. So how do we socialize these opportunities? Well to your question, we interact with a variety of diverse teams, government, different business associations, Ngos and Academia. Some examples, there's an organization named the Center for Climate and Energy Solutions, which IBM is a founding member of its Business Leadership Council. Its predecessor was the Q Centre on global climate change. We've been involved with that since 1998. That is a cross section of people from all these different constituencies who are looking for solutions to climate. Many Fortune 102000s in there were part of the green grid. The green grid is an organization of companies involved with data centers and it's constantly looking at how do you measure energy efficiency and data centers and what are best practices to reduce consumption of energy at data centers where a member of the renewable energy buyers alliance? Many Fortune 100 200 Zarin that trying to apply scale to procure more renewable electricity to actually come to our facilities I mentioned earlier were part of the Climate Leadership Council calling for a carbon tax were part of the United Nations Environment Programs science Policy business form that gets us involved with many ministers of Environment from countries around the world. We recently joined the new MITt Climate and sustainability consortium. Mitt Premier Research University. Many key leaders are part of that. Looking at how academic research can supercharge this opportunity for innovation and then the last one, I'll just wrap up call for code. You may be familiar with IBM s involvement in call for code. Okay. The current challenge under call for code in 2021 calls for solutions targeted the climate change. So that's, that's a diverse set of different constituents, different types of people. But we try to get involved with all of them because we learn and hopefully we contribute something along the way as well. >>Awesome Wayne. Thank you very much Karim, the last 30 seconds we got here. How do companies partner with IBM if they want to connect in with the mission and the citizenship that you guys are doing? How do they bring that to their company real quick. Give us a quick overview. >>Well, you know, it's really quite simple. Many of these clients are already clients of ours were engaging with them in the marketplace today, right, trying to make sure we understand their needs, trying to ensure that we tune what we've got to offer, both in terms of product and consulting services with our GPS brethren, you know, to meet their needs, linking that in as well to IBM being and what we like to turn client zero. We're also applying these same technologies and capabilities to support IBM efforts. And so as they engage in all these associations, what IBM is doing that also provides a way to really get started. It's really fixate on those five imperatives or needs are laid out, picked kind of a starting point and tie it to something that matters. That changes how you're doing something today. That's really the key. As far as uh we're concerned, >>Karim, we thank you for your time on sustainability. Great initiative, Congratulations on the continued mission. Going back to the early days of IBM and the Watson generation continuing out in the modern era. Congratulations and thanks for sharing. >>Thank you john. >>Okay. It's the cubes coverage. I'm sean for your host. Thanks for watching. >>Mm. Mhm.

>>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 coverage of IBM Think 2021 virtual were not yet in real life. We're doing another remote interviews with two great guests cube alumni of course, I'm john for your host of the cube. We've got Jason McGee, IBM fellow VP and CTO of IBM cloud platform and octavian Tennessee. Senior Vice president Hybrid Cloud Engineering at Netapp. Both cube alumni. It's great to see you both. Thanks for coming on. Thank >>you. Great to be here. Thanks for having us. >>So we were just talking before we came on camera that you know what it feels like. We've had this conversation, you know, a long time ago we have Hybrid cloud has been on a trajectory for both of you guys many times on the cube. So now it's mainstream, it's here in the real world, everyone gets it. It's not, there's no real debate now. Multi cloud, that's that. People are debating that. Which means that's right around the corner. So Hybrid cloud is here and now, um, Jason this is really the focus and this is also brings together Netapp in your partnership and talk about the relationship first with hybrid cloud. >>Yeah, I mean, you know, look, we've talked to a number of times together I think in the industry, uh, maybe, maybe a few years ago people were debating whether Hybrid cloud was a real thing. We don't have that conversation anymore. I think, um, you know, enterprises today, especially maybe in the face of Covid and kind of how we work differently now realize that their cloud journey is going to be a mix of on prem and off premise systems. Probably going to be a mix of multiple public cloud providers, um, and what they're looking for now is how do I do that and how do I manage that hybrid environment? How do I have a consistent platform across the different environments I want to operate in. Um, and then how do I get more and more of my work into those environments? And it's been interesting. I think the first, the first waves of cloud, we're infrastructure centric and externally application focused, they were easier things. And now we're moving into more mission critical, more state fel more data oriented workloads. And that brings with it new challenges on where applications run and and how we leverage the club >>Octavia. You guys had a great relationship with IBM over the years, uh, data centric company that it has always been great engineering team. You're on the cloud. Hybrid cloud engineering. What's the current status of the relationship? Give us an update on how the it's vectoring into the hybrid clouds this year? Senior Vice President. Hybrid cloud engineering. >>Well, so first of all, I want to recognize 20 years of a successful partnership with IBM I think uh that happened. IBM have been companies that have embraced digital transformation and technology trends to enable that digital transformation for our customers. And we've been very successful. I think there is a very strong um joint hydrochloric value proposition for customers. Netapp storage and data services complement what IBM does in terms of products and solutions, both for on premise deployments in the cloud. I think together we can build more complete solutions solutions that span data mobility to the governance for the new workloads that Jason has talked about. >>And how are some of the customer challenges that you're seeing? Obviously software defined networking, software defined storage, uh, deVOps has now turned into Deb's sec ops. So you have now that program ability requirement with four dynamic applications, application driven infrastructure, all these buzzwords point to one thing the infrastructure has to be resilient and respond to the applications. >>Yeah, I would say uh infrastructure, you know, will continue to be uh you know, top of mind for everybody whether they're building a private uh you know, cloud or whether there um you know, trying to leverage, you know, something like IBM cloud, I think people want to consume, you know, infrastructure is an A P I I think they want simplicity, you know, security, I I think they want to manage their cost, you know very well. I think we're very proud to be partnering with IBM cloud to build such capabilities. >>Jason what's how are you guys help on some of these customers as they look at new things and sometimes retrofitting and re factoring previous stuff don't transforming but also innovating at the same time as a lot of that going on. What are you guys doing to help with the Hybrid challenges? >>Yeah, I mean, you know, there's a lot of dimensions of that problem, but the one that that I think has been kind of most interesting over the last year has been how um kind of the consumption model of public cloud, you know, api driven self service capabilities operated for you, how that consumption model is starting to spread because I think one of the challenges with hybrid and one of the challenges as customers are looking at these more mission critical data centric kind of workloads was well, I can't always move that applications of public cloud data center or I need that application to live out on the network closer to my end users out where data is being generated maybe in an IOT context. And when you had those requirements, you had to kind of switch operating models, you had to kind of move away from a public cloud service consumption model to a software deployment model. And you know, we have a common platform and things like open shift that can run everywhere. But the missing piece was how do I consume everything as a service everywhere. And so recently we launched this thing called have been brought satellite, which we've been working with the T V. And his team on on how we can actually extend the public cloud experience back into the data center out to the edge and allow people to kind of mix both locational flexibility with public consumption. When you do that, you of course running a much more diverse infrastructure environment. You have to integrate with different storage environments and you wind up with multi tier applications, you know, some stuff on the edge and some stuff in the core. And so data replication and data management start to become really interesting because you're kind of distributing your workloads across this. No complex environment. >>We've seen that relationship between compute and storage change a lot over the past decade. As the evolution goes okay, I gotta ask you this is critical path for companies. They want the storage ready infrastructure. You guys have been doing that for many, many decades party with IBM for sure. But now they're all getting a hybrid cloud big time and it's not it's attributed computing is what it is. It's an operating model. When someone asked you guys what your capabilities are, how do you answer that? In today's world? Because you have storage is well known. You got a great product, people know that, but what is net apps capabilities? When I say I'm going all in and hybrid cloud, complete changeover. >>So what we have been doing is basically rewriting a lot of our software with a few design points in mind. Um the software defined has been definitely, you know, one of the key design points. The second is the um, the hybrid cloud and the internalization of our operating system so they can run both in traditional environments as well as in the cloud. I think the last thing that we wanted to do, it's enabled the speed of scale and that has been by building um, you know, intrinsically in the, in the, in the product, both support or, and also using kubernetes as an infrastructure to achieve that agility that that scale >>talk about this data fabric vision because to me that comes up all the time in my conversations with practitioners. The number one problem that there is a problem that we're solving to solve and the conversation tends to I here was a control playing kubernetes horizontally scalable. This all points to data being available. So how do you create that availability? What does data fabric mean? What does all this mean in hybrid context? >>Well, if you if you think about it data fabric, it's a hybrid cloud, you know, concept, right. This is about enabling data governance, data mobility, data security in an environment where some of the applications will run on premises or at the edge of the smart edge and many of the, you know, perhaps data lakes and analytics, um, you know, and services rich services will be in a central locations or on many or perhaps some large, you know, data centers. So you need to have, you know, the type of, you know, capabilities, data services, you know, to enable that mobility, that governments governance, that that security across this continuum that spans the edge the core and the cloud, >>Jason, you mentioned satellite before. Cloud satellite. Can you go into more detail on it? I know it's kind of a new product, uh what is that about? And tell me what's the benefits and why does it exist and what problems does it solve? >>Yeah. So so in the most simple terms, cloud satellite is the capability to extend iBMS public cloud into on prem infrastructure infrastructure at the edge or in a multi cloud context to other public cloud infrastructures. And so you can consume all the services in the public cloud that you need to to build your application of open shift as a service databases. Deb tools, aI capabilities. Instead of being limited to only being able to consume those services in IBM's cloud regions, you can now add your private data center or add your metro provider or add your AWS or Azure account and now consume those services consistently across all those environments. Um and that really allows you to kind of combine the benefits of public ill with kind of location independence, you see in hybrid and let's solve new problems like, you know, it's really interesting, we're seeing like a I and data being a primary driver. I need my application to live in a certain country or to live next to my mainframe or to live like you know in a metro because all of my, I'm doing like video analytics on a bunch of cameras and I'm not going to stream all that data back to halfway across the country to some cloud region and so lets you extend out in that way and when you do that of course you now move the cloud into a more diverse infrastructure environment. And so like we've been working with Netapp on, how do we then expose um Netapp storage into this environment when I'm running in the data center where I'm running at the edge and I need to store that data replicate the data, secure it. Well how do I kind of plug those two things together? I think john at the beginning you kind of alluded to this idea of you know, things are becoming more application centric, Right? And we're trying to run an I. T. Architecture that's more centered around the application well by combining um clouds, knowledge of kind of where everything is running with a common platform like open shift with a kubernetes aware data fabric in storage layer, you really can achieve that. You can have an application centric kind of management that spans those environments. >>Yeah, I want to come back to that whole impact on I. T. Because this has come up as a major theme here. Think that the I. T. Transformation is going to be more about cloud scale but I want to get octavian on the satellite on Netapp role and how you complement that. How do you guys fit in? He just mentioned that you guys are playing with clouds satellite, obviously this was like an operating model, How does that fit in? >>Um simply put we extend and enable the capabilities that uh IBM satellite uh you know, platform provides, I think Jason referred to the storage aspects um and you know what we are doing, it's enabling not only storage but rich data services around tearing based on temperature or you know, replicated snapshots or you know, capabilities around, you know cashing, you know, high availability encryption and and so forth. So we believe that our our technology integrates very well with red hat open shift um and uh the kubernetes aspect enable the application mobility and in that translation of really distributed computing at scale, you know from you know from the traditional data center um to the edge and uh you know to the massive hubs that IBM is building, >>you know, I gotta say but watching you guys worked together for many decades now and and covering you with the queue for the past 10 years or 11 years now um been a great partnership. I gotta say one thing that's obviously too obvious to me and our team and mainly mainly the world is now you got a new Ceo over at IBM you have a cloud focus that's on unwavering Arvin loves the cloud. We all know that um ecosystems are changing with that. You have already had a big ecosystem and partnerships now it seems to be moving to a level where you gotta have that ecosystem really thrive in the cloud. So I guess we'll use the last couple of minutes if you guys don't mind explaining how the IBM Netapp relationship in the new context of this new partnership, new ecosystem or a new kind of world helps customers and how you guys are working together. >>Yeah, I mean I could start, I mean I think you're right that that cloud is all about platforms and about kind of the overall environment, people operating in the ecosystem is really critical and I think things like satellite have given us new ways to work together. I mean I'd be a minute up, as we said, I've been working together for a long time. We rely on them a lot in our public cloud, for example in our storage tiers but with with the kind of idea of distributed cloud and the boundaries of public cubs spreading to all these new environments. Those are just new places where we can build really interesting, valuable integrations for our clients so that they can deal with day to deal with these more complex apps, you know, in all the places that they exist. So I think it's gonna actually really exciting um to kind of leverage that opportunity to find new ways to work together and and uh and deliver solutions to our clients >>Octavia, >>I would say that data is the ecosystem and we all know that there is more data right now being created outside of the traditional data center, beat in the cloud or at the edge. Um so our mission is, you know, to enable that, you know, hybrid cloud or or that uh, you know, data mobility um and enable, you know, persistence rich data, you know, storage services, whatever data is being created. I think IBM's new satellite platform um you know, comes in and broadens the aperture of people being able to consume IBM services at the edge and or or the remote office. And I think that's very exciting. >>You guys are both experts and solely seasoned executives. Devops DEP sec ops, DEV data Ops whatever you wanna call, data's here. Ecosystems guys, thanks for coming on the key. Really appreciate the insight. >>Thank you. Thank >>you. Okay. IBM think cute coverage jOHN for your host. Thanks for watching. Mhm. Mhm. Mhm.

(upbeat music) >> Well, good day and welcome back to the Cube as we continue our segment, featuring AWS Startup Showcase and we're with now Mike Bilodeau who's in corporate development and operations at Kong. Mike, thank you for joining us here on the Cube and particularly on the Startup Showcase. Nice to have you and Kong represented here today. >> Thanks for having me, John. Great to be here. >> You better and first off let's just tell us about Kong a little bit and column cadet which I know is your feature program or service. I love the name by the way, but tell us a little bit about Kong and then what Kong is all about too? >> Sure, so Kong as a company really came about in the past five years. Our two co-founders came over from Italy in the late aughts early to 20 teens and had a company called Mashape. And so what they were looking at and what they were betting on at that time, was that APIs were going to be the future of how software was built and how developers interacted with software. And so what came from that was a piece of they were running Mashape as a marketplace at the time. So connecting developers to different APIs so they can consume them and use them to build new software. And what they found was that actually the most valuable piece of technology that they had created was the backbone for running that marketplace. And that backbone is what Kong is. And so they created it to be able to handle a massive amount of traffic, a massive amount of APIs, all simultaneously. This is a problem that a lot of enterprises have especially now that we've started to get some microservices, started to have more distributed technologies. And so what Kong is really is, it's a way to manage all of those different APIs. All of the connections between different microservices through a single platform which is Kong connect. And now that we've started to have Kubernetes the sort of the birth and the nascent space of service mesh. Kong connect allows all of those connections to be managed and to be secured and made reliable through a single platform. >> So what's driving this, right? I mean you mentioned microservices and Kubernetes and that environment which is kind of facilitating this, I guess transformation you might say. But what's the big driver in your opinion in terms of what's pushing this microservices phenomenon if you will or this revolution? >> Sure, and when I think it starts out at the simple active of technology acceleration in general. So when you look at just the real shifts that have come in enterprise to hack especially looking, you know start with that at the cloud but you could even go back to VMware and virtualization is it's really about allowing people to build software more rapidly. All of these different innovations that have happened with cloud, with virtualization, now with containers, Kubernetes, microservices they're really focused on making it so that developers can build software a lot more quickly. Develop the latest and greatest in a more rapid way. I think a huge driver out of this is just making it easier for developers, for organizations to bring new technologies to market. And we see that as a key driver in a lot of these decisions that are being made. I think another piece of it that's really coming about is looking at security as a really big component. You know we have a huge monolithic app. It can become very challenging to actually secure that. If somebody gets into the initial Ops space they're really past the point of no return and can get access to some things that you might not want them to. Similar for compliance and governance reasons, that becomes challenging. So I think you're seeing this combination of where people are looking at breaking things into smaller pieces, even though it does come with its own challenges around security that you need to manage. It's making it so that there's less ability to just get in and cause a lot of damage all at once from malicious attackers. >> Yeah, you bring up security and so, yeah to me it's almost in some cases it's almost counterintuitive. I think about if I got this model to gap and I've got a big parameter around it, right. And I know that I can confine this thing. I can contain this, this is is good. Now microservices, now got a lot of, it's almost like a lot of villages, right? They're all around. And I don't have the castle anymore. I've got all these villages. So I have to build walls around all these villages. But you're saying that that's actually easier to do or at least you're more capable of doing that now as opposed to maybe where we were two, three years ago. >> Well you can almost think of it as if you have those villages, right. And if you have one castle and somebody gets inside they're going to be able to find whatever treasure you may have you know, to extend the analogy here a bit. But now if you have 50 different villages that an attacker needs to look in it starts to become really time consuming and really difficult. And now when you're looking at, especially this idea of cybersecurity, the ability to secure a monolithic app is typically not all that different from what you can do with a microservice or once you get past that initial point. Instead of thinking of it as, you know I have my one wall around everything you now think of it almost as a series of walls where it gets more and more difficult. Again this all depends on that you're managing that security well which can get really time-consuming more than anything else and challenging from a pure management standpoint. But from an actual security posture it is a way of where you can strengthen it because you're you're creating more difficult ways of accessing information for attackers as well as just more layers potentially of security that they need to get them. >> But what do you do to lift that burden then from the customers because like you said that's a concern they really don't want to have. They want you to do that. They want somebody to do that before them. So what do you do to alleviate those kinds of stresses on their systems? >> Yeah, it's a great question. And this is really where the idea of API management in its infancy came from. Was thinking about, how do we abstract a way these different tasks that people don't really want to do when they're managing how people can interact with their APIs whether that be a device or another human? And part of that is just taking away. So what we do and what API game management tools have always done is abstract that into a new piece of software. So instead of having to kind of individually develop and write code for security, for logging, for routing logic, all these different pieces of how those different APIs will communicate with each other we're putting that into a single piece of software, And we're allowing that to be done in a really easy way. And so what we've done now with Kong connect and where we've extended that to is making it even easier to do that at a microservices level of scale. So if you're thinking about hundreds or thousands of different microservices that you need to understand and be able to manage that's what we're really building to allow people to do. And so that comes with being able to make it extremely easy to actually add policies like authentication, rate limiting whatever it may be as well as giving people the choice to use what they want to use. We have great partners looking at the Datadog's, the Okta's of the world who provide a pretty, pretty incredible product. We don't necessarily want to reinvent the wheel on some of these things that are already out there and that are widely loved and accepted by technology practitioners and developers. We just want to make it really easy to actually use those different technologies. And so that's a lot of what we're doing is providing a a way to make it easy to add these policies and this logic into each one of these different services. >> So what if you're providing these kinds of services and they're new and you're merging them sometimes with kind of legacy components? That transition or that interaction I would assume could be a little complex. And you've got your work cut out for you in some regards to kind of retrofit, right? In some respects to make this seamless, to make this smooth. So maybe you shine a little light on that process in terms of not throwing all the bath out with the baby or the water here, but just making sure it all works. And that it makes it simple and takes away that kind of complexity that people might be facing. >> Yeah, that's really the name of the game. We do not believe that there is a one size fits all approach in general to how people should build software. There are going to be instances of where building a monolithic app makes the most sense. There are going to be instances where building a Kubernetes makes the most sense. The key thing that we wonna solve is making sure that it works and that you're able to make the best technical decision for your products and for your organization. And so in looking at how we help to solve that problem, I think the first is that we have first-class support for everything. So we support everything down to kind of the oldest bare metal servers, to IBMs to containers across the board. And we've had that mindset with every product that we brought to market. So thinking about our service mesh for instance Kuma is the open-source project that all depends now on an enterprise one. But looking at Kuma, one of the first things that we did when we brought it out because we saw this gap in the space was to make sure that they have first-class support for virtual machines. At the time that wasn't something that was commonly done at all. Now more people are moving in that direction because they do see it as it need which is great for the space. But that's something where we understand that the important thing is making sure your point you said it kind of the exact way that we like to which is it needs to be reliable. It needs to work. So I have a huge estate of older applications, older potentially environments even I might have data centers, I might have cloud been trying to do everything all at once. Isn't really a pragmatic approach always. It needs to be able to support the journey as you move to a more modern way of building. So in terms of going from on-premise to the cloud, running in a hybrid approach, whatever it may be, all of those things shouldn't be an all-or-nothing proposition. It should be a phased approach and moving to really where it makes sense for your business and for the specific product. >> You've been talking about cloud deployments obviously. AWS comes into play there in a major way for you guys. Tell me a little bit about that. About how you're leveraging that relationship and how you're partnering with them and then bringing the value then to your customer base. And how long that's been going on and the kinds of work that you guys are doing together ultimately to provide this kind of exemplary product or at least options to your customers. >> Yeah, of course. I think the way that we're doing it first and foremost is that we know exactly who AWS is in the space. And great number of our customers are running on AWS. So again, I think that first-class support in general for AWS environments, services both from the container service, their Kubernetes services, everything that they can have and that they offer to their customers we wonna be able to support. One of the first areas really that comes to mind in terms of first-class integration and support is thinking about Lambda and serverless. So at the time when we first came out with that, again it was early for us or early in our journey as product and as company, but really early for the space. And so how we were able to support that and how we were able to see that it could support our vision and what we wanted to bring as a value proposition to the market has been really powerful. So I think in looking at how we work with AWS certainly on a partnership level of where we share a lot of the same customers we share a very similar ethos and wanting to help people do things in the most cost-effective rapid manner possible and to build the best software. And I mean for us we have a little bit of a backstory with AWS 'cause Jeff Bezos was an early investor in Kong. >> That didn't hurt really. Yeah exactly, I mean the whole memo that he wrote about build an API or you're fired was certainly an inspiration to us. And just it catalyzed so much change in the technology landscape in general about how everyone viewed APIs about building a software that could be reused and and was composable. And so that's something that we look at and kind of carry it forward and we've been building on that momentum ever since. >> So I'm going to just kind of take, again a high level. Look at this in terms of microservices and how that's changing in terms of cloud connectivity. Think you actually have a graphic too that maybe we can pull up and take a look at this and let's talk about this evolution. What's occurring here a little bit and as we take a look at this tell us what you think these impacts are at the end of the day for your customers and how they're better able to provide their services and satisfy their customer needs. >> Absolutely, so this is really the heart of the connect platform and of our vision in general. We've spoken just a minute ago about thinking how we can support the entire journey or the enterprise reality that is managing a relatively complex environment of monoliths, different services, microservices, serverless functions, whatever it may be as well as lots of different deployment methods and underlying tech platforms. If you have virtual machines and Kubernetes whatever it may be. But what we look at is just the different design patterns that can occur in thinking about a monolithic application. Okay, mainly that's an edge concern of thinking about how you going to handle connectivity coming in from the edge in looking at a Kubernetes environment of where you going to have many Kubernetes clusters that need to be able to communicate with each other. That's where we start to think about our ingress products and Kubernetes ingress that allows for that cross application communication. And then within the application itself and looking at service mesh which we talked a little bit about of just how do I make sure that I can instrument and secure every transaction that's happening in a truly microservices deployment within Kubernetes or outside of it? How do I make sure that that's reliable and secure? And so what we look at is part of it is evolution. And part of it is going to be figuring out what works best when. Certainly if you're building something from scratch it doesn't always make sense to build it. Your MDP as microservices running on Kubernetes it probably makes sense to go with the shortest path. At the same time if you're trying to run it at massive scale and big applications and make sure they're as reliable as possible it very well does make sense to spend the time and the effort to make Kubernetes work well for you. And I think that's the beauty of how the space is shifting is that it's going towards a way of the most practical solution to get towards business value to move software quicker to give customers the value that they want to delight them to use Amazon's phraseology if that's a word. It's something that is becoming more and more standard practice versus just trying to make sure that you're doing the latest and greatest for the sake of doing it. >> So we've been talking about customers in rather generic terms in terms of what you're providing them. We've talked about new services that are certainly providing added value and providing them with solutions to their problems. Can you give us maybe just a couple of examples of some real life success stories where you've had some success in terms of providing services that I assume people needed or at least maybe they didn't know they needed until you provided that kind of development. But give us an idea, maybe just shine a little light on some success that you've had so that people at home and are watching this can perhaps relate to that experience and maybe give them a reason to think a little more about Kong and Kong connect. >> Yeah, absolutely, there's a number that come to mind but certainly one of the customers that I have spent a lot of time with, become almost friends with a couple of the practitioners who work there, is company called Cargill. It's a shared one with us and AWS. It's one we've written about in the past but this is one of the largest companies in the world. And the way that they describe it as is that if you've ever eaten a McMuffin or eaten from McDonald's and had breakfast there, you've used a Cargill service because they provide so much of the food supply chain business and the logistics for it. You know, it's a century and a half old company. It has a really story and a legacy and it's grown to be an extremely large company that's still private. But they have some of the most unique challenges, I think that I've seen in the space in terms of needing to be able to ensure that they're able to kind of move quickly and build a lot of new services and software that touch so many different spaces. So the challenge that was put in front of them was looking at really modernizing a century and a half old company. Modernizing their entire tech stack. And we're certainly not all of that in any way shape or form but we are something that can help that process quite a bit. And so as they were migrating to AWS as they were looking at creating a CICB process for really being able to shape and deploy new software as quickly as possible. As they were looking at how they could distribute the new APIs and services that they were building, we were helping them with every piece of that journey by being able to to make sure that the services that they deployed performed in the way that they expected them to. We're able to give them a lot of confidence in being able to move more rapidly and move a lot of software over from these tried and true older or more legacy ways of doing things to a much more cloud native build. As they were looking at using Kubernetes in AWS and being able to support that handle scale, again we're something that was able to kind of bridge that gap and make sure that there weren't going to be disruptions. So there are a lot of great reasons of why their numbers really speak for themselves in terms of how much velocity they were able to get. Saying them out loud will sound fake in some cases because they were able to, you know, I think like something around the order of 20 X the amount of new APIs and services that they were building over a six month period. Really kind of crazy, crazy numbers. But it is something where, for us we got a lot out of them because they were open-source users. So Kong is first and foremost an open-source company. And so they were helping us before they even became paying customers. Just by testing the software, providing feedback, really putting it through its paces and using it at a scale that's really hard to replicate. You know the scale of a couple of hundred thousand person company, yeah. >> Talk about a win-win. That worked out well. Certainly the proof is in the pudding and I'm sure that's just one of many examples of success that you've had. We appreciate the time here and certainly the insights and I wish you well on down the road. Thanks for joining us Mike. >> Thanks John, thanks for having me. >> Been peaking with Mike Bilodeau from Kong. He is in corporate development and operations there. I'm John Walls and you're watching "On the Cube" the AWS Startup Showcase. (soft music)

>> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> In our 2020 predictions post, we said that organizations would begin to operationalize their digital transformation experiments and POCs. We also said that based on spending data that cybersecurity companies like CrowdStrike and Okta were poised to rise above the rest in 2020, and we even said the S&P 500 would surpass 3,700 this year. Little did we know that we'd have a pandemic that would make these predictions a virtual lock, and, of course, COVID did blow us out of the water in some other areas, like our prediction that IT spending would increase plus 4% in 2020, when in reality, we have a dropping by 4%. We made a number of other calls that did pretty well, but I'll let you review last year's predictions at your leisure to see how we did. Hello, everyone. This is Dave Vellante and welcome to this week's Wikibon CUBE Insights powered by ETR. Erik Bradley of ETR is joining me again for this Breaking Analysis, and we're going to lay out our top picks for 2021. Erik, great to see you. Welcome back. Happy to have you on theCUBE, my friend. >> Always great to see you too, Dave. I'm excited about these picks this year. >> Well, let's get right into it. Let's bring up the first prediction here. Tech spending will rebound in 2021. We expect a 4% midpoint increase next year in spending. Erik, there are a number of factors that really support this prediction, which of course is based on ETR's most recent survey work, and we've listed a number of them here in this slide. I wonder if we can talk about that a little bit, the pace of the vaccine rollout. I've called this a forced march to COVID, but I can see people doubling down on things that are working. Productivity improvements are going to go back into the business. People are going to come back to the headquarters and that maybe is going to spur infrastructure on some pent-up demand, and work from home, we're going to talk about that. What are your thoughts on this prediction? >> Well, first of all, you weren't wrong last year. You were just, (laughs) you were just delayed. Just delayed a little bit, that's all. No, very much so. Early on, just three months ago, we were not seeing this optimism. The most recent survey, however, is capturing 4%. I truly believe that still might be a little bit mild. I think it can go even higher, and that's going to be driven by some of the things you've said about. This is a year where a lot of spending was paused on machine learning, on automation, on some of these projects that had to be stopped because of what we all went through. Right now, that is not a nice to have, it's a must have, and that spending is going quickly. There's a rapid pace on that spending, so I do think that's going to push it and, of course, security. We're going to get to this later on so I don't want to bury the lede, but with what's happening right now, every CISO I speak to is not panicked, but they are concerned and there will definitely be increased security spending that might push this 4% even higher. >> Yeah, and as we've reported as well, the survey data shows that there's less freezing of IT, there are fewer layoffs, there's more hiring, we're accelerating IT deployments, so that, I think, 34% last survey, 34% of organizations are accelerating IT deployments over the next three months, so that's great news. >> And also your point too about hiring. I was remiss in not bringing that up because we had layoffs and we had freezes on hiring. Both of that is stopping. As you know, as more head count comes in, whether that be from home or whether that be in your headquarters, both of those require support and require spending. >> All right, let's bring up the next prediction. Remote worker trends are going to become fossilized, settling in at an average of 34% by year-end 2021. Now, I love this chart, you guys. It's been amazingly consistent to me, Erik. We're showing data here from ETR's latest COVID survey. So it shows that prior to the pandemic, about 15 to 16% of employees on average worked remotely. That jumped to where we are today and well into the 70s, and we're going to stay close to that, according to the ETR data, in the first half of 2021, but by the end of the year, it's going to settle in at around 34%. Erik, that's double the pre-pandemic numbers and that's been consistent in your surveys over the past six month, and even within the sub-samples. >> Yeah, super surprised by the consistency, Dave. You're right about that. We were expecting the most recent data to kind of come down, right? We see the vaccines being rolled out. We kind of thought that that number would shift, but it hasn't, it has been dead consistent, and that's just from the data perspective. What we're hearing from the interviews and the feedback is that's not going to change, it really isn't, and there's a main reason for that. Productivity is up, and we'll talk about that in a second, but if you have productivity up and you have employees happy, they're not commuting, they're working more, they're working effectively, there is no reason to rush. And now imagine if you're a company that's trying to hire the best talent and attract the best talent but you're also the only company telling them where they have to live. I mean, good luck with that, right? So even if a few of them decide to make this permanent, that's something where you're going to really have to follow suit to attract talent. >> Yeah, so let's talk about that. Productivity leads us to our next prediction. We can bring that up. Number three is productivity increases are going to lead organizations to double down on the successes of 2020 and productivity apps are going to benefit. Now, of course, I'm always careful to cautious to interpret when you ask somebody by how much did productivity increase. It's a very hard thing to estimate depending on how you measure it. Is it revenue per employee? Is it profit? But nonetheless, the vast majority of people that we talk to are seeing productivity is going up. The productivity apps are really the winners here. Who do you see, Erik, as really benefiting from this trend? This year we saw Zoom, Teams, even Webex benefit, but how do you see this playing out in 2021? >> Well, first of all, the real beneficiaries are the companies themselves because they are getting more productivity, and our data is not only showing more productivity, but that's continuing to increase over time, so that's number one. But you're 100% right that the reason that's happening is because of the support of the applications and what would have been put in place. Now, what we do expect to see here, early on it was a rising tide lifted all boats, even Citrix got pulled up, but over time you realize Citrix is really just about legacy applications. Maybe that's not really the virtualization platform we need or maybe we just don't want to go that route at all. So the ones that we think are going to win longer term are part of this paradigm shift. The easiest one to put out as example is DocuSign. Nobody is going to travel and sit in an office to sign a paper ever again. It's not happening. I don't care if you go back to the office or you go back to headquarters. This is a paradigm shift that is not temporary. It is permanent. Another one that we're seeing is Smartsheet. Early on it started in. I was a little concerned about it 'cause it was a shadow IT type of a company where it was just spreading and spreading and spreading. It's turned out that this, the data on Smartsheet is continuing to be strong. It's an effective tool for project management when you're remotely working, so that's another one I don't see changing anytime. The other one I would call out would be Twilio. Slightly different, yes. It's more about the customer experience, but when you look at how many brick and mortar or how many in-person transactions have moved online and will stay there, companies like Twilio that support that customer experience, I'll throw out a Qualtrics out there as well, not a name we hear about a lot, but that customer experience software is a name that needs to be watched going forward. >> What do you think's going to happen to Zoom and Teams? Certainly Zoom just escalated this year, a huge ascendancy, and Teams I look at a little differently 'cause it's not just video conferencing, and both have done really, really well. How do you interpret the data that you're seeing there? >> There's no way around it, our data is decelerating quickly, really quickly. We were kind of bullish when Zoom first came out on the IPO prospects. It did very well. Obviously what happened in this remote shift turned them into an absolute overnight huge success. I don't see that continuing going forward, and there's a reason. What we're seeing and hearing from our feedback interviews is that now that people recognize this isn't temporary and they're not scrambling and they need to set up for permanency, they're going to consolidate their spend. They don't need to have Teams and Zoom. It's not necessary. They will consolidate where they can. There's always going to be the players that are going to choose Slack and Zoom 'cause they don't want to be on Microsoft architecture. That's fine, but you and I both know that the majority of large enterprises have Microsoft already. It's bundled in in pricing. I just don't see it happening. There's going to be M&A out there, which we can talk about again soon, so maybe Zoom, just like Slack, gets to a point where somebody thinks it's worthwhile, but there's a lot of other video conferencing out there. They're trying to push their telephony. They're trying to push their mobile solutions. There's a lot of companies out there doing it, so we'll see, but the current market cap does not seem to make sense in a permanent remote work situation. >> I think I'm inferring Teams is a little different because it's Microsoft. They've got this huge software estate they can leverage. They can bundle. Now, it's going to be interesting to see how and if Zoom can then expand its TAM, use its recent largesse to really enter potentially new markets. >> It will be, but listen, just the other day there was another headline that one of Zoom's executives out in China was actually blocking content as per directed by the Chinese government. Those are the kind of headlines that just really just get a little bit difficult when you're running a true enterprise size. Zoom is wonderful in the consumer space, but what I do is I research enterprise technology, and it's going to be really, really difficult to make inroads there with Microsoft. >> Yep. I agree. Okay, let's bring up number four, prediction number four. Permanent shifts in CISO strategies lead to measurable share shifts in network security. So the remote work sort of hyper-pivot, we'll call it, it's definitely exposed us. We've seen recent breaches that underscore the need for change. They've been well-publicized. We've talked a lot about identity access management, cloud security, endpoint security, and so as a result, we've seen the upstarts, and just a couple that we called, CrowdStrike, Okta, Zscaler has really benefited and we expect them to continue to show consistent growth, some well over 50% revenue growth. Erik, you really follow this space closely. You've been focused on microsegmentation and other, some of the big players. What are your thoughts here? >> Yeah, first of all, security, number one in spending overall when we started looking and asking people what their priority is going to be. That's not changing, and that was before the SolarWinds breach. I just had a great interview today with a CISO of a global hospitality enterprise to really talk about the implications of this. It is real. Him and his peers are not panicking but pretty close, is the way he put it, so there is spend happening. So first of all, to your point, continued on Okta, continued on identity access. See no reason why that changes. CrowdStrike, continue. What this is going to do is bring in some new areas, like we just mentioned, in network segmentation. Illumio is a pure play in that name that doesn't have a lot of citations, but I have watched over the last week their net spending score go from about 30 to 60%, so I am watching in real time, as this data comes in in the later part of our survey, that it's really happening Forescout is another one that's in there. We're seeing some of the zero trust names really picking up in the last week. Now, to talk about some of the more established names, yeah, Cisco plays in this space and we can talk about Cisco and what they're doing in security forever. They're really reinventing themselves and doing a great job. Palo Alto was in this space as well, but I do believe that network and microsegmentation is going to be something that's going to continue. The other one I'm going to throw out that I'm hearing a lot about lately is user behavior analytics. People need to be able to watch the trends, compare them to past trends, and catch something sooner. Varonis is a name in that space that we're seeing get a lot of adoptions right now. It's early trend, but based on our data, Varonis is a name to watch in that area as well. >> Yeah, and you mentioned Cisco transitioning, reinventing themselves toward a SaaS player. Their subscription, Cisco's security business is a real bright spot for them. Palo Alto, every time I sit in on a VENN, which is ETR's proprietary roundtable, the CISOs, they love Palo Alto. They want to work, many of them, anyway, want to work with Palo Alto. They see them as a thought leader. They seem to be getting their cloud act together. Fortinet has been doing a pretty good job there and especially for mid-market. So we're going to see this equilibrium, best of breed versus the big portfolio companies, and I think 2021 sets up as a really interesting battle for those guys with momentum and those guys with big portfolios. >> I completely agree and you nailed it again. Palo Alto has this perception that they're really thought leaders in the space and people want to work with them, but let's not rule Cisco out. They have a much, much bigger market cap. They are really good at acquisitions. In the past, they maybe didn't integrate them as well, but it seems like they're getting their act together on that. And they're pushing now what they call SecureX, which is sort of like their own full-on platform in the cloud, and they're starting to market that, I'm starting to hear more about it, and I do think Cisco is really changing people's perception of them. We shall see going forward because in the last year, you're 100% right, Palo Alto definitely got a little bit more of the sentiment, of positive sentiment. Now, let's also realize, and we'll talk about this again in a bit, there's a lot of players out there. There will probably be continued consolidation in the security space, that we'll see what happens, but it's an area where spending is increasing, there is a lot of vendors out there to play with, and I do believe we'll see consolidation in that space. >> Yes. No question. A highly fragmented business. A lack of skills is a real challenge. Automation is a big watch word and so I would expect, which brings us, Erik, to prediction number five. Can be hard to do prediction posts without talking about M&A. We see the trend toward increased tech spending driving more IPOs, SPACs and M&A. We've seen some pretty amazing liquidity events this year. Snowflake, obviously a big one. Airbnb, DoorDash, outside of our enterprise tech but still notable. Palantir, JFrog, number of others. UiPath just filed confidentially and their CEO said, "Over the next 12 to 18 months, I would think Automation Anywhere is going to follow suit at some point." Hashicorp was a company we called out in our 2020 predictions as one to watch along with Snowflake and some others, and, Erik, we've seen some real shifts in observability. The ELK Stack gaining prominence with Elastic, ChaosSearch just raised 40 million, and everybody's going after 5G. Lots of M&A opportunities. What are your thoughts? >> I think if we're going to make this a prediction show, I'm going to say that was a great year, but we're going to even have a better year next year. There is a lot of cash on the balance sheet. There are low interest rates. There is a lot of spending momentum in enterprise IT. The three of those set up for a perfect storm of more liquidity events, whether it be continued IPOs, whether it could be M&A, I do expect that to continue. You mentioned a lot of the names. I think you're 100% right. Another one I would throw out there in that observability space, is it's Grafana along with the ELK Stack is really making changes to some of the pure plays in that area. I've been pretty vocal about how I thought Splunk was having some problems. They've already made three acquisitions. They are trying really hard to get back up and keep that growth trajectory and be the great company they always have been, so I think the observability area is certainly one. We have a lot of names in that space that could be taken out. The other one that wasn't mentioned, however, that I'd like to mention is more in the CDN area. Akamai being the grandfather there, and we'll get into it a little bit too, but CloudFlare has a huge market cap, Fastly running a little bit behind that, and then there's Limelight, and there's a few startups in that space and the CDN is really changing. It's not about content delivery as much as it is about edge compute these days, and they would be a real easy takeout for one of these large market cap names that need to get into that spot. >> That's a great call. All right, let's bring up number six, and this is one that's near and dear to my heart. It's more of a longer-term prediction and that prediction is in the 2020s, 75% of large organizations are going to re-architect their big data platforms, and the premise here is we're seeing a rapid shift to cloud database and cross-cloud data sharing and automated governance. And the prediction is that because big data platforms are fundamentally flawed and are not going to be corrected by incremental improvements in data lakes and data warehouses and data hubs, we're going to see a shift toward a domain-centric ownership of the data pipeline where data teams are going to be organized around data product or data service builders and embedded into lines of business. And in this scenario, the technology details and complexity will become abstracted. You've got hyper-specialized data teams today. They serve multiple business owners. There's no domain context. Different data agendas. Those, we think, are going to be subsumed within the business lines, and in the future, the primary metric is going to shift from the cost and the quality of the big data platform outputs to the time it takes to go from idea to revenue generation, and this change is going to take four to five years to coalesce, but it's going to begin in earnest in 2021. Erik, anything you'd add to this? >> I'm going to let you kind of own that one 'cause I completely agree, and for all the listeners out there, that was Dave's original thought and I think it's fantastic and I want to get behind it. One of the things I will say to support that is big data analytics, which is what people are calling it because they got over the hype of machine learning, they're sick of vendors saying machine learning, and I'm hearing more and more people just talk about it as we need big data analytics, we need 'em at the edge, we need 'em faster, we need 'em in real time. That's happening, and what we're seeing more is this is happening with vendor-agnostic tools. This isn't just AWS-aligned. This isn't just GCP-aligned or Azure-aligned. The winners are the Snowflakes. The winners are the Databricks. The winners are the ones that are allowing this interoperability, the portability, which fully supports what you're saying. And then the only other comment I would make, which I really like about your prediction, is about the lines of business owning it 'cause I think this is even bigger. Right now, we track IT spending through the CIO, through the CTO, through IT in general. IT spending is actually becoming more diversified. IT spending is coming under the purview of marketing, it's coming under the purview of sales, so we're seeing more and more IT spending, but it's happening with the business user or the business lines and obviously data first, so I think you're 100% right. >> Yeah, and if you think about it, we've contextualized our operational systems, whether it's the CRM or the supply chain, the logistics, the business lines own their respective data. It's not true for the analytics systems, and we talked about Snowflake and Databricks. I actually see these two companies who were sort of birds of a feather in the early days together, applying Databricks machine learning on top of Snowflake, I actually see them going in diverging places. I see Databricks trying to improve on the data lake. I see Snowflake trying to reinvent the concept of data warehouse to this global mesh, and it's going to be really interesting to see how that shakes out. The data behind Snowflake, obviously very, very exciting. >> Yeah, it's just, real quickly to add on that if we have time, Dave. >> Yeah, sure. >> We all know the valuation of Snowflake, one of the most incredible IPOs I've seen in a long time. The data still supports it. It still supports that growth. Unfortunately for Databricks, their IPO has been a little bit more volatile. If you look at their stock chart every time they report, it's got a little bit of a roller coaster ride going on, and our most recent data for Databricks is actually decelerating, so again, I'm going to use the caveat that we only have about 950 survey responses in. We'll probably get that up to 1,300 or so, so it's not done yet, but right now we are putting Databricks into a category where we're seeing it decelerate a little bit, which is surprising for a company that's just right out of the gate. >> Well, it's interesting because I do see Databricks as more incremental on data lakes and I see Snowflake as more transformative, so at least from a vision standpoint, we'll see if they can execute on that. All right, number seven, let's bring up number seven. This is talking about the cloud, hybrid cloud, multi-cloud. The battle to define hybrid and multi-cloud is going to escalate in 2021. It's already started and it's going to create bifurcated CIO strategies. And, Erik, spending data clearly shows that cloud is continuing its steady margin share gains relative to on-prem, but the definitions of the cloud, they're shifting. Just a couple of years ago, AWS, they never talk about hybrid, just like they don't talk about multi-cloud today, yet AWS continues now to push into on-prem. They treat on-prem as just another node at the edge and they continue to win in the marketplace despite their slower growth rates. Still, they're so large now. 45 billion or so this year. The data is mixed. This ETR data shows that just under 50% of buyers are consolidating workloads, and then a similar, in the cloud workloads, and a similar percentage of customers are spreading evenly across clouds, so really interesting dynamic there. Erik, how do you see it shaking out? >> Yeah, the data is interesting here, and I would actually state that overall spend on the cloud is actually flat from last year, so we're not seeing a huge increase in spend, and coupled with that, we're seeing that the overall market share, which means the amount of responses within our survey, is increasing, certainly increasing. So cloud usage is increasing, but it's happening over an even spectrum. There's no clear winner of that market share increase. So they really, according to our data, the multi-cloud approach is happening and not one particular winner over another. That's just from the data perspective that various do point on AWS. Let's be honest, when they first started, they wanted all the data. They just want to take it from on-prem, put it in their data center. They wanted all of it. They never were interested in actually having interoperability. Then you look at an approach like Google. Google was always about the technology, but not necessarily about the enterprise customer. They come out with Anthos which is allowing you to have interoperability in more cloud. They're not nearly as big, but their growth rate is much higher. Law of numbers, of course. But it really is interesting to see how these cloud players are going to approach this because multi-cloud is happening whether they like it or not. >> Well, I'm glad you brought up multi-cloud in a context of what the data's showing 'cause I would agree we're, and particularly two areas that I would call out in ETR data, VMware Cloud on AWS as well as VM Cloud Foundation are showing real momentum and also OpenStack from Red Hat is showing real progress here and they're making moves. They're putting great solutions inside of AWS, doing some stuff on bare metal, and it's interesting to see. VMware, basically it's the VMware stack. They want to put that everywhere. Whereas Red Hat, similarly, but Red Hat has the developer angle. They're trying to infuse Red Hat in throughout everybody's stack, and so I think Red Hat is going to be really interesting to, especially to the extent that IBM keeps them, sort of lets them do their own thing and doesn't kind of pollute them. So, so far so good there. >> Yeah, I agree with that. I think you brought up the good point about it being developer-friendly. It's a real option as people start kicking a little bit more of new, different developer ways and containers are growing, growing more. They're not testing anymore, but they're real workloads. It is a stack that you could really use. Now, what I would say to caveat that though is I'm not seeing any net new business go to IBM Red Hat. If you were already aligned with that, then yes, you got to love these new tools they're giving you to play with, but I don't see anyone moving to them that wasn't already net new there and I would say the same thing with VMware. Listen, they have a great entrenched base. The longer they can kick that can down the road, that's fantastic, but I don't see net new customers coming onto VMware because of their alignment with AWS. >> Great, thank you for that. That's a good nuance. Number eight, cloud, containers, AI and ML and automation are going to lead 2021 spending velocity, so really is those are the kind of the big four, cloud, containers, AI, automation, And, Erik, this next one's a bit nuanced and it supports our first prediction of a rebound in tech spending next year. We're seeing cloud, containers, AI and automation, in the form of RPA especially, as the areas with the highest net scores or spending momentum, but we put an asterisk around the cloud because you can see in this inserted graphic, which again is preliminary 'cause the survey's still out in the field and it's just a little tidbit here, but cloud is not only above that 40% line of net score, but it has one of the higher sector market shares. Now, as you said, earlier you made a comment that you're not necessarily seeing the kind of growth that you saw before, but it's from a very, very large base. Virtually every sector in the ETR dataset with the exception of outsourcing and IT consulting is seeing meaningful upward spending momentum, and even those two, we're seeing some positive signs. So again, with what we talked about before, with the freezing of the IT projects starting to thaw, things are looking much, much better for 2021. >> I'd agree with that. I'm going to make two quick comments on that, one on the machine learning automation. Without a doubt, that's where we're seeing a lot of the increase right now, and I've had a multiple number of people reach out or in my interviews say to me, "This is very simple. These projects were slated to happen in 2020 and they got paused. It's as simple as that. The business needs to have more machine learning, big data analytics, and it needs to have more automation. This has just been paused and now it's coming back and it's coming back rapidly." Another comment, I'm actually going to post an article on LinkedIn as soon as we're done here. I did an interview with the lead technology director, automation director from Disney, and this guy obviously has a big budget and he was basically saying UiPath and Automation Anywhere dominate RPA, and that on top of it, the COVID crisis greatly accelerated automation, greatly accelerated it because it had to happen, we needed to find a way to get rid of these mundane tasks, we had to put them into real workloads. And another aspect you don't think about, a lot of times with automation, there's people, employees that really have friction. They don't want to adopt it. That went away. So COVID really pushed automation, so we're going to see that happening in machine learning and automation without a doubt. And now for a fun prediction real quick. You brought up the IT outsourcing and consulting. This might be a little bit more out there, the dark horse, but based on our data and what we're seeing and the COVID information about, you said about new projects being unwrapped, new hiring happening, we really do believe that this might be the bottom on IT outsourcing and consulting. >> Great, thank you for that, and then that brings us to number nine here. The automation mandate is accelerating and it will continue to accelerate in 2021. Now, you may say, "Okay, well, this is a lay-up," but not necessarily. UiPath and Automation Anywhere go public and Microsoft remains a threat. Look, UiPath, I've said UiPath and Automation Anywhere, if they were ready to go public, they probably would have already this year, so I think they're still trying to get their proverbial act together, so this is not necessarily a lay-up for them from an operational standpoint. They probably got some things to still clean up, but I think they're going to really try to go for it. If the markets stay positive and tech spending continues to go forward, I think we can see that. And I would say this, automation is going mainstream. The benefits of taking simple RPA tools to automate mundane tasks with software bots, it's both awakened organizations to the possibilities of automation, and combined with COVID, it's caused them to get serious about automation. And we think 2021, we're going to see organizations go beyond implementing point tools, they're going to use the pandemic to restructure their entire business. Erik, how do you see it, and what are the big players like Microsoft that have entered the market? What kind of impact do you see them having? >> Yeah, completely agree with you. This is a year where we go from small workloads into real deployment, and those two are the leader. In our data, UiPath by far the clear leader. We are seeing a lot of adoptions on Automation Anywhere, so they're getting some market sentiment. People are realizing, starting to actually adopt them. And by far, the number one is Microsoft Power Automate. Now, again, we have to be careful because we know Microsoft is entrenched everywhere. We know that they are good at bundling, so if I'm in charge of automation for my enterprise and I'm already a Microsoft customer, I'm going to use it. That doesn't mean it's the best tool to use for the right job. From what I've heard from people, each of these have a certain area where they are better. Some can get more in depth and do heavier lifting. Some are better at doing a lot of projects at once but not in depth, so we're going to see this play out. Right now, according to our data, UiPath is still number one, Automation Anywhere is number two, and Microsoft just by default of being entrenched in all of these enterprises has a lot of market share or mind share. >> And I also want to do a shout out to, or a call out, not really a shout out, but a call out to Pegasystems. We put them in the RPA category. They're covered in the ETR taxonomy. I don't consider them an RPA vendor. They're a business process vendor. They've been around for a long, long time. They've had a great year, done very, very well. The stock has done well. Their spending momentum, the early signs in the latest survey are just becoming, starting to moderate a little bit, but I like what they've done. They're not trying to take UiPath and Automation Anywhere head-on, and so I think there's some possibilities there. You've also got IBM who went to the market, SAP, Infor, and everybody's going to hop on the bandwagon here who's a software player. >> I completely agree, but I do think there's a very strong line in the sand between RPA and business process. I don't know if they're going to be able to make that transition. Now, business process also tends to be extremely costly. RPA came into this with trying to be, prove their ROI, trying to say, "Yeah, we're going to cost a little bit of money, but we're going to make it back." Business process has always been, at least the legacies, the ones you're mentioning, the Pega, the IBMs, really expensive. So again, I'm going to allude to that article I'm about to post. This particular person who's a lead tech automation for a very large company said, "Not only are UiPath and AA dominating RPA, but they're likely going to evolve to take over the business process space as well." So if they are proving what they can do, he's saying there's no real reason they can't turn around and take what Appian's doing, what IBM's doing and what Pega's doing. That's just one man's opinion. Our data is not actually tracking it in that space, so we can't back that, but I did think it was an interesting comment for and an interesting opportunity for UiPath and Automation Anywhere. >> Yeah, it's always great to hear directly from the mouths of the practitioners. All right, brings us to number 10 here. 5G rollouts are going to push new edge IoT workloads and necessitate new system architectures. AI and real-time inferencing, we think, require new thinking, particularly around processor and system design, and the focus is increasingly going to be on efficiency and at much, much lower costs versus what we've known for decades as general purpose workloads accommodating a lot of different use cases. You're seeing alternative processors like Nvidia, certainly the ARM acquisition. You've got companies hitting the market like Fungible with DPAs, and they're dominating these new workloads in the coming decade, we think, and they continue to demonstrate superior price performance metrics. And over the next five years they're going to find their way, we think, into mainstream enterprise workloads and put continued pressure on Intel general purpose microprocessors. Erik, look, we've seen cloud players. They're diversifying their processor suppliers. They're developing their own in-house silicon. This is a multi-year trend that's going to show meaningful progress next year, certainly if you measure it in terms of innovations, announcements and new use cases and funding and M&A activity. Your thoughts? >> Yeah, there's a lot there and I think you're right. It's a big trend that's going to have a wide implication, but right now, it's there's no doubt that the supply and demand is out of whack. You and I might be the only people around who still remember the great chip famine in 1999, but it seems to be happening again and some of that is due to just overwhelming demand, like you mentioned. Things like IoT. Things like 5G. Just the increased power of handheld devices. The remote from work home. All of this is creating a perfect storm, but it also has to do with some of the chip makers themselves kind of misfired, and you probably know the space better than me, so I'll leave you for that on that one. But I also want to talk a little bit, just another aspect of this 5G rollout, in my opinion, is we have to get closer to the edge, we have to get closer to the end consumer, and I do believe the CDN players have an area to play in this. And maybe we can leave that as there and we could do this some other time, but I do believe the CDN players are no longer about content delivery and they're really about edge compute. So as we see IoT and 5G roll out, it's going to have huge implications on the chip supply. No doubt. It's also could have really huge implications for the CDN network. >> All right, there you have it, folks. Erik, it's great working with you. It's been awesome this year. I hope we can do more in 2021. Really been a pleasure. >> Always. Have a great holiday, everybody. Stay safe. >> Yeah, you too. Okay, so look, that's our prediction for 2021 and the coming decade. Remember, all these episodes are available as podcasts. All you got to do is search Breaking Analysis podcast. You'll find it. We publish each week on wikibon.com and siliconangle.com, and you got to check out etr.plus. It's where all the survey action is. Definitely subscribe to their services if you haven't already. You can DM me @dvellante or email me at david.vellante@siliconangle.com. This is Dave Vellante for Erik Bradley for theCUBE Insights powered by ETR. Thanks for watching, everyone. Be well and we'll see you next time. (relaxing 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 June of this year, Snowflake filed a confidential document suggesting that it would do an IPO. Now of course, everybody knows about it, found out about it and it had a $20 billion valuation. So, many in the community and the investment community and so forth are excited about this IPO. It could be the hottest one of the year, and we're getting a number of questions from investors and practitioners and the entire Wiki bond, ETR and CUBE community. So, welcome everybody. This is Dave Vellante. This is "CUBE Insights" powered by ETR. In this breaking analysis, we're going to unpack five critical questions around Snowflake's IPO or pending IPO. And with me to discuss that is Erik Bradley. He's the Chief Engagement Strategists at ETR and he's also the Managing Director of VENN. Erik, thanks for coming on and great to see you as always. >> Great to see you too. Always enjoy being on the show. Thank you. >> Now for those of you don't know Erik, VENN is a roundtable that he hosts and he brings in CIOs, IT practitioners, CSOs, data experts and they have an open and frank conversation, but it's private to ETR clients. But they know who the individual is, what their role is, what their title is, et cetera and it's a kind of an ask me anything. And I participated in one of them this past week. Outstanding. And we're going to share with you some of that. But let's bring up the agenda slide if we can here. And these are really some of the questions that we're getting from investors and others in the community. There's really five areas that we want to address. The first is what's happening in this enterprise data warehouse marketplace? The second thing is kind of a one area. What about the legacy EDW players like Oracle and Teradata and Netezza? The third question we get a lot is can Snowflake compete with the big cloud players? Amazon, Google, Microsoft. I mean they're right there in the heart, in the thick of things there. And then what about that multi-cloud strategy? Is that viable? How much of a differentiator is that? And then we get a lot of questions on the TAM. Meaning the total available market. How big is that market? Does it justify the valuation for Snowflake? Now, Erik, you've been doing this now. You've run a couple VENNs, you've been following this, you've done some other work that you've done with Eagle Alpha. What's your, just your initial sort of takeaway from all this work that you've been doing. >> Yeah, sure. So my first take on Snowflake was about two and a half years ago. I actually hosted them for one of my VENN interviews and my initial thought was impressed. So impressed. They were talking at the time about their ability to kind of make ease of use of a multi-cloud strategy. At the time although I was impressed, I did not expect the growth and the hyper growth that we have seen now. But, looking at the company in its current iteration, I understand where the hype is coming from. I mean, it's 12 and a half billion private valuation in the last round. The least confidential IPO (laughs) anyone's ever seen (Dave laughs) with a 15 to $20 billion valuation coming out, which is more than Teradata, Margo and Cloudera combined. It's a great question. So obviously the success to this point is warranted, but we need to see what they're going to be able to do next. So I think the agenda you laid out is a great one and I'm looking forward to getting into some of those details. >> So let's start with what's happening in the marketplace and let's pull up a slide that I very much love to use. It's the classic X-Y. On the vertical axis here we show net score. And remember folks, net score is an indicator of spending momentum. ETR every quarter does like a clockwork survey where they're asking people, "Essentially are you spending more or less?" They subtract the less from the more and comes up with a net score. It's more complicated than, but like NPS, it's a very simple and reliable methodology. That's the vertical axis. And the horizontal axis is what's called market share. Market share is the pervasiveness within the data set. So it's calculated by the number of mentions of the vendor divided by the number of mentions within that sector. And what we're showing here is the EDW sector. And we've pulled out a few companies that I want to talk about. So the big three, obviously Microsoft, AWS and Google. And you can see Microsoft has a huge presence far to the right. AWS, very, very strong. A lot of Redshift in there. And then they're pretty high on the vertical axis. And then Google, not as much share, but very solid in that. Close to 60% net score. And then you can see above all of them from a vertical standpoint is Snowflake with a 77.5% net score. You can see them in the upper right there in the green. One of the highest Erik in the entire data set. So, let's start with some sort of initial comments on the big guys and Snowflakes. Your thoughts? >> Sure. Just first of all to comment on the data, what we're showing there is just the data warehousing sector, but Snowflake's actual net score is that high amongst the entire universe that we follow. Their data strength is unprecedented and we have forward-looking spending intention. So this bodes very well for them. Now, what you did say very accurately is there's a difference between their spending intentions on a net revenue level compared to AWS, Microsoft. There no one's saying that this is an apples-to-apples comparison when it comes to actual revenue. So we have to be very cognizant of that. There is domination (laughs) quite frankly from AWS and from Azure. And Snowflake is a necessary component for them not only to help facilitate a multi-cloud, but look what's happening right now in the US Congress, right? We have these tech leaders being grilled on their actual dominance. And one of the main concerns they have is the amount of data that they're collecting. So I think the environment is right to have another player like this. I think Snowflake really has a lot of longevity and our data is supporting that. And the commentary that we hear from our end users, the people that take the survey are supporting that as well. >> Okay, and then let's stay on this X-Y slide for a moment. I want to just pull out a couple of other comments here, because one of the questions we're asking is Whither, the legacy EDW players. So we've got in here, IBM, Oracle, you can see Teradata and then Hortonworks and MapR. We're going to talk a little bit about Hortonworks 'cause it's now Cloudera. We're going to talk a little bit about Hadoop and some of the data lakes. So you can see there they don't have nearly the net score momentum. Oracle obviously has a huge install base and is investing quite frankly in R&D and do an Exadata and it has its own cloud. So, it's got a lock on it's customers and if it keeps investing and adding value, it's not going away. IBM with Netezza, there's really been some questions around their commitment to that base. And I know that a lot of the folks in the VENNs that we've talked to Erik have said, "Well, we're replacing Netezza." Frank Slootman has been very vocal about going after Teradata. And then we're going to talk a little bit about the Hadoop space. But, can you summarize for us your thoughts in your research and the commentary from your community, what's going on with the legacy guys? Are these guys cooked? Can they hang on? What's your take? >> Sure. We focus on this quite a bit actually. So, I'm going to talk about it from the data perspective first, and then we'll go into some of the commentary and the panel. You even joined one yesterday. You know that it was touched upon. But, first on the data side, what we're noticing and capturing is a widening bifurcation between these cloud native and the legacy on-prem. It is undeniable. There is nothing that you can really refute. The data is concrete and it is getting worse. That gap is getting wider and wider and wider. Now, the one thing I will say is, nobody's going to rip out their legacy applications tomorrow. It takes years and years. So when you look at Teradata, right? Their market cap's only 2 billion, 2.3 billion. How much revenue growth do they need to stay where they are? Not much, right? No one's expecting them to grow 20%, which is what you're seeing on the left side of that screen. So when you look at the legacy versus the cloud native, there is very clear direction of what's happening. The one thing I would note from the data perspective is if you switched from net score or adoptions and you went to flat spending, you suddenly see Oracle and Teradata move over to that left a little bit, because again what I'm trying to say is I don't think they're going to catch up. No, but also don't think they're going away tomorrow. That these have large install bases, they have relationships. Now to kind of get into what you were saying about each particular one, IBM, they shut down Netezza. They shut it down and then they brought it back to life. How does that make you feel if you're the head of data architecture or you're DevOps and you're trying to build an application for a large company? I'm not going back to that. There's absolutely no way. Teradata on the other hand is known to be incredibly stable. They are known to just not fail. If you need to kind of re-architect or you do a migration, they work. Teradata also has a lot of compliance built in. So if you're a financials, if you have a regulated business or industry, there's still some data sets that you're not going to move up to the cloud. Whether it's a PII compliance or financial reasons, some of that stuff is still going to live on-prem. So Teradata is still has a very good niche. And from what we're hearing from our panels, then this is a direct quote if you don't mind me looking off screen for one second. But this is a great one. Basically said, "Teradata is the only one from the legacy camp who is putting up a fight and not giving up." Basically from a CIO perspective, the rest of them aren't an option anymore. But Teradata is still fighting and that's great to hear. They have their own data as a service offering and listen, they're a small market cap compared to these other companies we're talking about. But, to summarize, the data is very clear. There is a widening bifurcation between the two camps. I do not think legacy will catch up. I think all net new workloads are moving to data as a service, moving to cloud native, moving to hosted, but there are still going to be some existing legacy on-prem applications that will be supported with these older databases. And of those, Oracle and Teradata are still viable options. >> I totally agree with you and my colleague David Floyd is actually quite high on Teradata Vantage because he really does believe that a key component, we're going to talk about the TAM in a minute, but a key component of the TAM he believes must include the on-premises workloads. And Frank Slootman has been very clear, "We're not doing on-prem, we're not doing this halfway house." And so that's an opportunity for companies like Teradata, certainly Oracle I would put it in that camp is putting up a fight. Vertica is another one. They're very small, but another one that's sort of battling it out from the old NPP world. But that's great. Let's go into some of the specifics. Let's bring up here some of the specific commentary that we've curated here from the roundtables. I'm going to go through these and then ask you to comment. The first one is just, I mean, people are obviously very excited about Snowflake. It's easy to use, the whole thing zero to Snowflake in 90 minutes, but Snowflake is synonymous with cloud-native data warehousing. There are no equals. We heard that a lot from your VENN panelist. >> We certainly did. There was even more euphoria around Snowflake than I expected when we started hosting these series of data warehousing panels. And this particular gentleman that said that happens to be the global head of data architecture for a fortune 100 financials company. And you mentioned earlier that we did a report alongside Eagle Alpha. And we noticed that among fortune 100 companies that are also using the big three public cloud companies, Snowflake is growing market share faster than anyone else. They are positioned in a way where even if you're aligned with Azure, even if you're aligned with AWS, if you're a large company, they are gaining share right now. So that particular gentleman's comments was very interesting. He also made a comment that said, "Snowflake is the person who championed the idea that data warehousing is not dead yet. Use that old monthly Python line and you're not dead yet." And back in the day where the Hadoop came along and the data lakes turned into a data swamp and everyone said, "We don't need warehousing anymore." Well, that turned out to be a head fake, right? Hadoop was an interesting technology, but it's a complex technology. And it ended up not really working the way people want it. I think Snowflake came in at that point at an opportune time and said, "No, data warehousing isn't dead. We just have to separate the compute from the storage layer and look at what I can do. That increases flexibility, security. It gives you that ability to run across multi-cloud." So honestly the commentary has been nothing but positive. We can get into some of the commentary about people thinking that there's competition catching up to what they do, but there is no doubt that right now Snowflake is the name when it comes to data as a service. >> The other thing we heard a lot was ETL is going to get completely disrupted, you sort of embedded ETL. You heard one panelist say, "Well, it's interesting to see that guys like Informatica are talking about how fast they can run inside a Snowflake." But Snowflake is making that easy. That data prep is sort of part of the package. And so that does not bode well for ETL vendors. >> It does not, right? So ETL is a legacy of on-prem databases and even when Hadoop came along, it still needed that extra layer to kind of work with the data. But this is really, really disrupting them. Now the Snowflake's credit, they partner well. All the ETL players are partnered with Snowflake, they're trying to play nice with them, but the writings on the wall as more and more of this application and workloads move to the cloud, you don't need the ETL layer. Now, obviously that's going to affect their talent and Informatica the most. We had a recent comment that said, this was a CIO who basically said, "The most telling thing about the ETL players right now is every time you speak to them, all they talk about is how they work in a Snowflake architecture." That's their only metric that they talk about right now. And he said, "That's very telling." That he basically used it as it's their existential identity to be part of Snowflake. If they're not, they don't exist anymore. So it was interesting to have sort of a philosophical comment brought up in one of my roundtables. But that's how important playing nice and finding a niche within this new data as a service is for ETL, but to be quite honest, they might be going the same way of, "Okay, let's figure out our niche on these still the on-prem workloads that are still there." I think over time we might see them maybe as an M&A possibility, whether it's Snowflake or one of these new up and comers, kind of bring them in and sort of take some of the technology that's useful and layer it in. But as a large market cap, solo existing niche, I just don't know how long ETL is for this world. >> Now, yeah. I mean, you're right that if it wasn't for the marketing, they're not fighting fashion. But >> No. >> really there're some challenges there. Now, there were some contrarians in the panel and they signaled some potential icebergs ahead. And I guarantee you're going to see this in Snowflake's Red Herring when we actually get it. Like we're going to see all the risks. One of the comments, I'll mention the two and then we can talk about it. "Their engineering advantage will fade over time." Essentially we're saying that people are going to copycat and we've seen that. And the other point is, "Hey, we might see some similar things that happened to Hadoop." The public cloud players giving away these offerings at zero cost. Essentially marginal cost of adding another service is near zero. So the cloud players will use their heft to compete. Your thoughts? >> Yeah, first of all one of the reasons I love doing panels, right? Because we had three gentlemen on this panel that all had nothing but wonderful things to say. But you always get one. And this particular person is a CTO of a well known online public travel agency. We'll put it that way. And he said, "I'm going to be the contrarian here. I have seven different technologies from private companies that do the same thing that I'm evaluating." So that's the pressure from behind, right? The technology, they're going to catch up. Right now Snowflake has the best engineering which interestingly enough they took a lot of that engineering from IBM and Teradata if you actually go back and look at it, which was brought up in our panel as well. He said, "However, the engineering will catch up. They always do." Now from the other side they're getting squeezed because the big cloud players just say, "Hey, we can do this too. I can bundle it with all the other services I'm giving you and I can squeeze your pay. Pretty much give it a waive at the cost." So I do think that there is a very valid concern. When you come out with a $20 billion IPO evaluation, you need to warrant that. And when you see competitive pressures from both sides, from private emerging technologies and from the more dominant public cloud players, you're going to get squeezed there a little bit. And if pricing gets squeezed, it's going to be very, very important for Snowflake to continue to innovate. That comment you brought up about possibly being the next Cloudera was certainly the best sound bite that I got. And I'm going to use it as Clickbait in future articles, because I think everyone who starts looking to buy a Snowflake stock and they see that, they're going to need to take a look. But I would take that with a grain of salt. I don't think that's happening anytime soon, but what that particular CTO was referring to was if you don't innovate, the technology itself will become commoditized. And he believes that this technology will become commoditized. So therefore Snowflake has to continue to innovate. They have to find other layers to bring in. Whether that's through their massive war chest of cash they're about to have and M&A, whether that's them buying analytics company, whether that's them buying an ETL layer, finding a way to provide more value as they move forward is going to be very important for them to justify this valuation going forward. >> And I want to comment on that. The Cloudera, Hortonworks, MapRs, Hadoop, et cetera. I mean, there are dramatic differences obviously. I mean, that whole space was so hard, very difficult to stand up. You needed science project guys and lab coats to do it. It was very services intensive. As well companies like Cloudera had to fund all these open source projects and it really squeezed their R&D. I think Snowflake is much more focused and you mentioned some of the background of their engineers, of course Oracle guys as well. However, you will see Amazon's going to trot out a ton of customers using their RA3 managed storage and their flash. I think it's the DC two piece. They have a ton of action in the marketplace because it's just so easy. It's interesting one of the comments, you asked this yesterday, was with regard to separating compute from storage, which of course it's Snowflakes they basically invented it, it was one of their climbs to fame. The comment was what AWS has done to separate compute from storage for Redshift is largely a bolt on. Which I thought that was an interesting comment. I've had some other comments. My friend George Gilbert said, "Hey, despite claims to the contrary, AWS still hasn't separated storage from compute. What they have is really primitive." We got to dig into that some more, but you're seeing some data points that suggest there's copycatting going on. May not be as functional, but at the same time, Erik, like I was saying good enough is maybe good enough in this space. >> Yeah, and especially with the enterprise, right? You see what Microsoft has done. Their technology is not as good as all the niche players, but it's good enough and I already have a Microsoft license. So, (laughs) you know why am I going to move off of it. But I want to get back to the comment you mentioned too about that particular gentleman who made that comment about RedShift, their separation is really more of a bolt on than a true offering. It's interesting because I know who these people are behind the scenes and he has a very strong relationship with AWS. So it was interesting to me that in the panel yesterday he said he switched from Redshift to Snowflake because of that and some other functionality issues. So there is no doubt from the end users that are buying this. And he's again a fortune 100 financial organization. Not the same one we mentioned. That's a different one. But again, a fortune 100 well known financials organization. He switched from AWS to Snowflake. So there is no doubt that right now they have the technological lead. And when you look at our ETR data platform, we have that adoption reasoning slide that you show. When you look at the number one reason that people are adopting Snowflake is their feature set of technological lead. They have that lead now. They have to maintain it. Now, another thing to bring up on this to think about is when you have large data sets like this, and as we're moving forward, you need to have machine learning capabilities layered into it, right? So they need to make sure that they're playing nicely with that. And now you could go open source with the Apache suite, but Google is doing so well with BigQuery and so well with their machine learning aspects. And although they don't speak enterprise well, they don't sell to the enterprise well, that's changing. I think they're somebody to really keep an eye on because their machine learning capabilities that are layered into the BigQuery are impressive. Now, of course, Microsoft Azure has Databricks. They're layering that in, but this is an area where I think you're going to see maybe what's next. You have to have machine learning capabilities out of the box if you're going to do data as a service. Right now Snowflake doesn't really have that. Some of the other ones do. So I had one of my guest panelist basically say to me, because of that, they ended up going with Google BigQuery because he was able to run a machine learning algorithm within hours of getting set up. Within hours. And he said that that kind of capability out of the box is what people are going to have to use going forward. So that's another thing we should dive into a little bit more. >> Let's get into that right now. Let's bring up the next slide which shows net score. Remember this is spending momentum across the major cloud players and plus Snowflake. So you've got Snowflake on the left, Google, AWS and Microsoft. And it's showing three survey timeframes last October, April 20, which is right in the middle of the pandemic. And then the most recent survey which has just taken place this month in July. And you can see Snowflake very, very high scores. Actually improving from the last October survey. Google, lower net scores, but still very strong. Want to come back to that and pick up on your comments. AWS dipping a little bit. I think what's happening here, we saw this yesterday with AWS's results. 30% growth. Awesome. Slight miss on the revenue side for AWS, but look, I mean massive. And they're so exposed to so many industries. So some of their industries have been pretty hard hit. Microsoft pretty interesting. A little softness there. But one of the things I wanted to pick up on Erik, when you're talking about Google and BigQuery and it's ML out of the box was what we heard from a lot of the VENN participants. There's no question about it that Google technically I would say is one of Snowflake's biggest competitors because it's cloud native. Remember >> Yep. >> AWS did a license one time. License deal with PowerShell and had a sort of refactor the thing to be cloud native. And of course we know what's happening with Microsoft. They basically were on-prem and then they put stuff in the cloud and then all the updates happen in the cloud. And then they pushed to on-prem. But they have that what Frank Slootman calls that halfway house, but BigQuery no question technically is very, very solid. But again, you see Snowflake right now anyway outpacing these guys in terms of momentum. >> Snowflake is out outpacing everyone (laughs) across our entire survey universe. It really is impressive to see. And one of the things that they have going for them is they can connect all three. It's that multi-cloud ability, right? That portability that they bring to you is such an important piece for today's modern CIO as data architects. They don't want vendor lock-in. They are afraid of vendor lock-in. And this ability to make their data portable and to do that with ease and the flexibility that they offer is a huge advantage right now. However, I think you're a hundred percent right. Google has been so focused on the engineering side and never really focusing on the enterprise sales side. That is why they're playing catch up. I think they can catch up. They're bringing in some really important enterprise salespeople with experience. They're starting to learn how to talk to enterprise, how to sell, how to support. And nobody can really doubt their engineering. How many open sources have they given us, right? They invented Kubernetes and the entire container space. No one's really going to compete with them on that side if they learn how to sell it and support it. Yeah, right now they're behind. They're a distant third. Don't get me wrong. From a pure hosted ability, AWS is number one. Microsoft is yours. Sometimes it looks like it's number one, but you have to recognize that a lot of that is because of simply they're hosted 365. It's a SAS app. It's not a true cloud type of infrastructure as a service. But Google is a distant third, but their technology is really, really great. And their ability to catch up is there. And like you said, in the panels we were hearing a lot about their machine learning capability is right out of the box. And that's where this is going. What's the point of having this huge data if you're not going to be supporting it on new application architecture. And all of those applications require machine learning. >> Awesome. So we're. And I totally agree with what you're saying about Google. They just don't have it figured out how to sell the enterprise yet. And a hundred percent AWS has the best cloud. I mean, hands down. But a very, very competitive market as we heard yesterday in front of Congress. Now we're on the point about, can Snowflake compete with the big cloud players? I want to show one more data point. So let's bring up, this is the same chart as we showed before, but it's new adoptions. And this is really telling. >> Yeah. >> You can see Snowflake with 34% in the yellow, new adoptions, down yes from previous surveys, but still significantly higher than the other players. Interesting to see Google showing momentum on new adoptions, AWS down on new adoptions. And again, exposed to a lot of industries that have been hard hit. And Microsoft actually quite low on new adoption. So this is very impressive for Snowflake. And I want to talk about the multi-cloud strategy now Erik. This came up a lot. The VENN participants who are sort of fans of Snowflake said three things: It was really the flexibility, the security which is really interesting to me. And a lot of that had to do with the flexibility. The ability to easily set up roles and not have to waste a lot of time wrangling. And then the third was multi-cloud. And that was really something that came through heavily in the VENN. Didn't it? >> It really did. And again, I think it just comes down to, I don't think you can ever overstate how afraid these guys are of vendor lock-in. They can't have it. They don't want it. And it's best practice to make sure your sensitive information is being kind of spread out a little bit. We all know that people don't trust Bezos. So if you're in certain industries, you're not going to use AWS at all, right? So yeah, this ability to have your data portability through multi-cloud is the number one reason I think people start looking at Snowflake. And to go to your point about the adoptions, it's very telling and it bodes well for them going forward. Most of the things that we're seeing right now are net new workloads. So let's go again back to the legacy side that we were talking about, the Teradatas, IBMs, Oracles. They still have the monolithic applications and the data that needs to support that, right? Like an old ERP type of thing. But anyone who's now building a new application, bringing something new to market, it's all net new workloads. There is no net new workload that is going to go to SAP or IBM. It's not going to happen. The net new workloads are going to the cloud. And that's why when you switch from net score to adoption, you see Snowflake really stand out because this is about new adoption for net new workloads. And that's really where they're driving everything. So I would just say that as this continues, as data as a service continues, I think Snowflake's only going to gain more and more share for all the reasons you stated. Now get back to your comment about security. I was shocked by that. I really was. I did not expect these guys to say, "Oh, no. Snowflake enterprise security not a concern." So two panels ago, a gentleman from a fortune 100 financials said, "Listen, it's very difficult to get us to sign off on something for security. Snowflake is past it, it is enterprise ready, and we are going full steam ahead." Once they got that go ahead, there was no turning back. We gave it to our DevOps guys, we gave it to everyone and said, "Run with it." So, when a company that's big, I believe their fortune rank is 28. (laughs) So when a company that big says, "Yeah, you've got the green light. That we were okay with the internal compliance aspect, we're okay with the security aspect, this gives us multi-cloud portability, this gives us flexibility, ease of use." Honestly there's a really long runway ahead for Snowflake. >> Yeah, so the big question I have around the multi-cloud piece and I totally and I've been on record saying, "Look, if you're going looking for an agnostic multi-cloud, you're probably not going to go with the cloud vendor." (laughs) But I've also said that I think multi-cloud to date anyway has largely been a symptom as opposed to a strategy, but that's changing. But to your point about lock-in and also I think people are maybe looking at doing things across clouds, but I think that certainly it expands Snowflake's TAM and we're going to talk about that because they support multiple clouds and they're going to be the best at that. That's a mandate for them. The question I have is how much of complex joining are you going to be doing across clouds? And is that something that is just going to be too latency intensive? Is that really Snowflake's expertise? You're really trying to build that data layer. You're probably going to maybe use some kind of Postgres database for that. >> Right. >> I don't know. I need to dig into that, but that would be an opportunity from a TAM standpoint. I just don't know how real that is. >> Yeah, unfortunately I'm going to just be honest with this one. I don't think I have great expertise there and I wouldn't want to lead anyone a wrong direction. But from what I've heard from some of my VENN interview subjects, this is happening. So the data portability needs to be agnostic to the cloud. I do think that when you're saying, are there going to be real complex kind of workloads and applications? Yes, the answer is yes. And I think a lot of that has to do with some of the container architecture as well, right? If I can just pull data from one spot, spin it up for as long as I need and then just get rid of that container, that ethereal layer of compute. It doesn't matter where the cloud lies. It really doesn't. I do think that multi-cloud is the way of the future. I know that the container workloads right now in the enterprise are still very small. I've heard people say like, "Yeah, I'm kicking the tires. We got 5%." That's going to grow. And if Snowflake can make themselves an integral part of that, then yes. I think that's one of those things where, I remember the guy said, "Snowflake has to continue to innovate. They have to find a way to grow this TAM." This is an area where they can do so. I think you're right about that, but as far as my expertise, on this one I'm going to be honest with you and say, I don't want to answer incorrectly. So you and I need to dig in a little bit on this one. >> Yeah, as it relates to question four, what's the viability of Snowflake's multi-cloud strategy? I'll say unquestionably supporting multiple clouds, very viable. Whether or not portability across clouds, multi-cloud joins, et cetera, TBD. So we'll keep digging into that. The last thing I want to focus on here is the last question, does Snowflake's TAM justify its $20 billion valuation? And you think about the data pipeline. You go from data acquisition to data prep. I mean, that really is where Snowflake shines. And then of course there's analysis. You've got to bring in EMI or AI and ML tools. That's not Snowflake's strength. And then you're obviously preparing that, serving that up to the business, visualization. So there's potential adjacencies that they could get into that they may or may not decide to. But so we put together this next chart which is kind of the TAM expansion opportunity. And I just want to briefly go through it. We published this stuff so you can go and look at all the fine print, but it's kind of starts with the data lake disruption. You called it data swamp before. The Hadoop no schema on, right? Basically the ROI of Hadoop became reduction of investment as my friend Abby Meadow would say. But so they're kind of disrupting that data lake which really was a failure. And then really going after that enterprise data warehouse which is kind of I have it here as a 10 billion. It's actually bigger than that. It's probably more like a $20 billion market. I'll update this slide. And then really what Snowflake is trying to do is be data as a service. A data layer across data stores, across clouds, really make it easy to ingest and prepare data and then serve the business with insights. And then ultimately this huge TAM around automated decision making, real-time analytics, automated business processes. I mean, that is potentially an enormous market. We got a couple of hundred billion. I mean, just huge. Your thoughts on their TAM? >> I agree. I'm not worried about their TAM and one of the reasons why as I mentioned before, they are coming out with a whole lot of cash. (laughs) This is going to be a red hot IPO. They are going to have a lot of money to spend. And look at their management team. Who is leading the way? A very successful, wise, intelligent, acquisitive type of CEO. I think there is going to be M&A activity, and I believe that M&A activity is going to be 100% for the mindset of growing their TAM. The entire world is moving to data as a service. So let's take as a backdrop. I'm going to go back to the panel we did yesterday. The first question we asked was, there was an understanding or a theory that when the virus pandemic hit, people wouldn't be taking on any sort of net new architecture. They're like, "Okay, I have Teradata, I have IBM. Let's just make sure the lights are on. Let's stick with it." Every single person I've asked, they're just now eight different experts, said to us, "Oh, no. Oh, no, no." There is the virus pandemic, the shift from work from home. Everything we're seeing right now has only accelerated and advanced our data as a service strategy in the cloud. We are building for scale, adopting cloud for data initiatives. So, across the board they have a great backdrop. So that's going to only continue, right? This is very new. We're in the early innings of this. So for their TAM, that's great because that's the core of what they do. Now on top of it you mentioned the type of things about, yeah, right now they don't have great machine learning. That could easily be acquired and built in. Right now they don't have an analytics layer. I for one would love to see these guys talk to Alteryx. Alteryx is red hot. We're seeing great data and great feedback on them. If they could do that business intelligence, that analytics layer on top of it, the entire suite as a service, I mean, come on. (laughs) Their TAM is expanding in my opinion. >> Yeah, your point about their leadership is right on. And I interviewed Frank Slootman right in the heart of the pandemic >> So impressed. >> and he said, "I'm investing in engineering almost sight unseen. More circumspect around sales." But I will caution people. That a lot of people I think see what Slootman did with ServiceNow. And he came into ServiceNow. I have to tell you. It was they didn't have their unit economics right, they didn't have their sales model and marketing model. He cleaned that up. Took it from 120 million to 1.2 billion and really did an amazing job. People are looking for a repeat here. This is a totally different situation. ServiceNow drove a truck through BMCs install base and with IT help desk and then created this brilliant TAM expansion. Let's learn and expand model. This is much different here. And Slootman also told me that he's a situational CEO. He doesn't have a playbook. And so that's what is most impressive and interesting about this. He's now up against the biggest competitors in the world: AWS, Google and Microsoft and dozens of other smaller startups that have raised a lot of money. Look at the company like Yellowbrick. They've raised I don't know $180 million. They've got a great team. Google, IBM, et cetera. So it's going to be really, really fun to watch. I'm super excited, Erik, but I'll tell you the data right now suggest they've got a great tailwind and if they can continue to execute, this is going to be really fun to watch. >> Yeah, certainly. I mean, when you come out and you are as impressive as Snowflake is, you get a target on your back. There's no doubt about it, right? So we said that they basically created the data as a service. That's going to invite competition. There's no doubt about it. And Yellowbrick is one that came up in the panel yesterday about one of our CIOs were doing a proof of concept with them. We had about seven others mentioned as well that are startups that are in this space. However, none of them despite their great valuation and their great funding are going to have the kind of money and the market lead that Slootman is going to have which Snowflake has as this comes out. And what we're seeing in Congress right now with some antitrust scrutiny around the large data that's being collected by AWS as your Google, I'm not going to bet against this guy either. Right now I think he's got a lot of opportunity, there's a lot of additional layers and because he can basically develop this as a suite service, I think there's a lot of great opportunity ahead for this company. >> Yeah, and I guarantee that he understands well that customer acquisition cost and the lifetime value of the customer, the retention rates. Those are all things that he and Mike Scarpelli, his CFO learned at ServiceNow. Not learned, perfected. (Erik laughs) Well Erik, really great conversation, awesome data. It's always a pleasure having you on. Thank you so much, my friend. I really appreciate it. >> I appreciate talking to you too. We'll do it again soon. And stay safe everyone out there. >> All right, and thank you for watching everybody this episode of "CUBE Insights" powered by ETR. This is Dave Vellante, and we'll see you next time. (soft music)

>>Yeah, >>from The Cube Studios in Palo Alto and Boston. It's the Cube covering IBM. Think brought to you by IBM. >>Everybody welcome back. This is Dave Vellante, and you're watching the Cube's coverage of IBM. Think 2020 the digital version of IBM, thinking the Cube is pleased to be providing the wall to wall coverage, as we have physically. You know, so many years at big IBM events Spaces. Man test is here. He's the managing partner for global strategy for IBM and the Global Business Services. Jesus, great to see you. Thanks for coming on. >>Great to be here, Dave. >>So every guest that we've talked to this week really? We've talked about Cove it, but just briefly Ah, here. We're going to do a big drill down and really try to get Jesus, your perspectives and IBMs Point of view on what's going on here. So let me start with We've never seen anything like this before, Obviously. I mean, there are some examples going back to 1918. Try to get some similarities. But in 1918 was a long, long time ago. So So what's different about this? What are the similarities? >>Yeah, it's Ah, >>you know what Mark Point used to say? That history doesn't repeat, but it often rights, I think that are similar interests off what we're experiencing right now in this pandemic with Father from that makes like Spanish blue. I think the situation is unique in terms off the I'm the synchronicity of that impact. Right? So we can go back while they're everyone economic crisis or our society crisis where you have either one country of one aspect being disrupted. But this is really a society being disrupted, you know, on a global scale. So it impact is unprecedented in that in that perspective, in more than time. And I think all of us are adjusting to it. We upgrade 170 countries, so we've been able to see if you want every element of the curve off this convenient right? So from from getting back to a new normal, that is happening already in China and some of the countries in Asia Pacific to being just kind of like coming over the peat in Europe, North America, to some of the emerging countries where they're coming up. So so it gives the thing, gives us up what business continuity means and the importance of being prepared for this. I think it gives us a perspective on the health aspect of it as well as the economic impact. And most importantly, we've been very focused on aside the end. I don't have a lot of clients is figuring out what are they going to return back to when we say we want to return to work? I think is, what are we returning to? What are going to be the permanent changes? Where's the adaptation that is gonna be systemic and permanent? >>I want to ask you about digital transformation because I've made the point that, you know, while a lot of people talk digital transformation, there's been a lot of complacency. >>Digital transformation five months ago was about obtaining our competitive advantage on digital transformation. Today, in many industries, it's about survival, That is, that is how big of a change it is, the the need for efficiency and cost savings. We need local resiliency that we have talked about. They need to be able to drive agility, to be able to switch and about. They need to make hyper local decisions right to use data none of that can be done unless you have fully digitize processes. You are consuming local data and you have to train the people to really, um, operate in those new, more intelligent processes. So it has gone from Optionality is okay. You can do okay, But if you digitize your going to do better to, unless you digitize >>your business may not access next year. >>I've been just change the changes. I think now is widely understood that the majority of our digital digitization processes have to be accelerated. And I would say that is ah, great statistic that when we go back in history, Andi has been many. As I mentioned off this crisis, you can look back. The two >>behaviors that businesses have one is to play defense funding. What happens two years later on the other one is okay, you defense. But you immediately switched to offense and then what happens? Uh, two years later, those companies that use this time to just defend and hunker down history said in a couple of years later, 21% of them out there, But those businesses that they shift from defense to offense and actually accelerate in this case is, um, uh, programs like digitalization. 37% outperform. So very sad screaming for businesses that right now actually immediately switched to offense. Focus on this set of digitalization and empowering cloud managing data, ensuring the skills of the people. They're more likely not only to survive but thrive in the next three years. That don't just use this time >>to your point. It's about survival. It's not about, you know, not getting disrupted because you're going to get disrupted. It's almost a certainty. And so, in order to survive, you've got to digitally transform your final thoughts on digital transformation that I want to ask you. If there's a silver lining and all this, >>I think what we do, we can't change the conference. Um, but we cannot let the conflicts define who we are. Either It's individuals for this company. Well, we can do is to choose How do we act on that? I would say, um, those organizations and those individuals that take advantage of inspiration to understand that some of these behaviors are going to change, understand that the more that we should technology to the cloud, the more that we should workloads to the cloud, the more that we use technologies like artificial intelligence on Dr Nonlinear decisions that massively optimize everything we do from the way that we deliver healthcare to the way that we have managed supply change to the way that we secure food, frankly, to the way that we protect the environment that is a silver lining, that technology. It is one of those solutions that help in all of these areas, and the silver lining of this is is hopefully, let's use this time to get better, prepare for the next academia to get better, prepare for the next crisis. To implement technologies that drive efficiency faster. They create new jobs, they protect the environment. And what we cannot change The fact that we have 19 we can change. What happens after the 19. So we return to is something better than what we enter before. >>Very thoughtful commentary. Jesus, Thank you so much for coming on the cube. A blessing steer to your family and yourself. >>Appreciate it, Dave. Thank you. And thank you for everything You do too Well. Kept everybody informed. >>Really? Our pleasure. And thank you for watching everybody. This is Dave Vellante. you're watching the Cube's coverage of IBM. Think 2020. The digital event Right back. Right after this. Short break. >>Yeah, yeah, yeah, yeah.

>>Yeah, >>from The Cube Studios in Palo Alto and Boston. It's the Cube covering IBM. Think brought to you by IBM. >>Everybody welcome back. This is Dave Vellante, and you're watching the Cube's coverage of IBM. Think 2020 the digital version of IBM, thinking the Cube is pleased to be providing the wall to wall coverage, as we have physically. You know, so many years at big IBM events Spaces. Man test is here. He's the managing partner for global strategy for IBM and the Global Business Services. Jesus, great to see you. Thanks for coming on. >>Great to be here, Dave. >>So every guest that we've talked to this week really? We've talked about Cove it, but just briefly Ah, here. We're going to do a big drill down and really try to get Jesus, your perspectives and IBMs Point of view on what's going on here. So let me start with We've never seen anything like this before, Obviously. I mean, there are some examples going back to 1918. Try to get some similarities. But in 1918 was a long, long time ago. So So what's different about this? What are the similarities? >>Yeah, it's Ah, >>you know what Mark Point used to say? That history doesn't repeat, but it often rights, I think that are similar interests off what we're experiencing right now >>in this pandemic with father from that makes like Spanish blue. I think the situation is unique in terms off the I'm the synchronicity of that impact. Right? So we can go back while they're everyone economic crisis or our society crisis >>where you have either one country of one aspect being disrupted. But this is really a society being disrupted, you know, on a global scale. So it impact is unprecedented in that in that perspective, in more than time. And I think all of us are adjusting to it. Um, one of the points of view. Um, we've been able to if you want curate this. IBM is we upgrade 170 countries, so we've been able to see if you want every element of the curve off these convenient, right? So from from getting back to a new normal, that is happening already in China and some of the countries in Asia Pacific to being just kind of like coming over the peat in Europe, North America to some of the emerging countries where they're coming up. So so it gives thing gives us up what business continuity means and the importance of being prepared for this. I think it gives us a perspective on the health aspect of it as well as the economic impact. And most importantly, we've been very focused. Nous ous IBM. I don't have a lot of clients is figuring out What are they going to return back to when we say we want to return to work? I think is, what are we returning to? What are going to be the permanent changes? Where's the adaptation that is gonna be systemic and permanent? I'm not going to be just like, you know, we're going to get through this way. >>Whenever we had a CIO tell us that they weren't ready from a business resiliency business continuity standpoint, they said, we're we were all d are focused, very narrow. Uh, and wow, we really need to rethink that kind of another myth. Your thoughts on that? >>Correct. I think you go back the last three years. Business continuity in most of the decisions that binds would do, I would say I check on the box, right? So he was assumed that you needed to have a business. Continuity was heavily focused on disaster recovery that it was. He must evaluate it under the expectation that it decides there really happens that has now changed permanently, or at least for the foreseeable future, where business continuity is not a check on the box is actually a differentiating feature. And the differentiating feature comes from the fund that on now every one of our fines were prepared. Now every one of our competitors was prepared to the changes, the agility, the efficiency on if you want. The cloud ification of your business is the ability to provide the services in the face of a crisis that forces people to be socially distant, forces people to have to deliver from home. So that has actually become a much >>more important criterion buying decision. So So we, uh, fortunately, we have support very well in that we have 95% of IBM employees. I work from home in 99% of our global delivery centres on network is work from home. And we made that shit even before some of the country's declare that it was a stay at home or so. So that has Bean a feature that now our clients are appreciated. We've been able to to deliver those services so our clients could continue to deliver their services and going forward. I think that's gonna be a much more important if you want. A feature is how cloud ified is your delivery. How prepare are you? Not for just one crisis, but to make, probably subsequent crisis something normal, that one disrupt your operation? You just adapt. >>It's interesting. I had a conversation earlier with Ed Walsh, was one of your GM, said one of your hardware divisions. And and And he was explaining to me that, you know, across your 170 plus countries, you know, it was really the local supply chain. And he actually made the point detection really good quarter in Italy, which surprised me and he said, but they were sort of micro managing at the local level to your to your point. I want I want to ask you about digital transformation because I've made the point that, you know, while a lot of people talk digital transformation, there's been a lot of complacency because they're not in my lifetime where we're a bank. We're making a lot of money. We're doing okay. How do you think over 19 will sort of change that complacency and really accelerate digital transformation is a mindset and actually turn it into action? >>Yeah, I think the best way to put it is, um, digital transformation. Five months ago, it was about obtaining a competitive advantage on digital transformation. Today, in many industries, it's about survival. That is, that is how big of a change car it is. The the need for efficiency and cost savings, the need for resiliency that we have talked about. They need to be able to, um, to drive agility, to be able to switch and about. They need to make hyper local decisions right to use data that none of that can be done unless you have fully digitize processes. You are consuming local data and you have to train the people to really, um, operate in those new, more intelligent processes. So it has gone from Optionality is okay. You can do okay, but if you digitize, you're gonna do better to. Unless you digitize your business may not access next year. I think just change the changes. I think now is widely understood that the majority of our digital digitization processes have to be accelerated. And I would say that is, ah, great statistic that when we go back in history, Andi has been many. As I mentioned off this crisis, you can look back. The two behaviors >>that businesses have one is to play defense funding. What happens two years later on the other one is you defense. But you immediately switched to offense. And then what happens two years later? Those companies that use this time to just defend and hunker down history said in a couple of years later, 21% of them out there for But those businesses that they shift from defense to offense and actually accelerate in this case is, um uh, programs like digitalization. 37% of perform so very sad premium for businesses that right now actually immediately switched to offense. Focus on this set of digitalization and empowering cloud managing data, ensuring the skills of the people. They're more likely not only to survive but thrive in the next three years that don't just use this thanks >>to your point. It's about survival. It's not about, you know, not getting disrupted because you're going to get disrupted. It's almost a certainty. And so, in order to survive, you've got to digitally transform your final thoughts on digital transformation that I want to ask you if there's a silver lining and all this. >>No, I think I mean, um, I'd say the final thoughts is this a sigh said is, I don't think anybody anybody would say that government in and the Christ World crisis that that comes, is is anything that anybody would wish for or would help for. But we can change. I mean, that is the reality it is here. It's impact. It's devastation. Um, I think the human toll that comes from that many families that are being impacted for that, um, you know, I think my my my heart goes to roll those families, my own family. It's in the Spain, one of the worst countries in the world that is being impacted for this. Um so it's ah, it's clearly a tragedy. I think what we do we can't change the company. Um, but we cannot let the conflicts define who we are. Either it's individuals for this company. Well, we can do is to choose How do we act on that pump it? I would say, um, those organizations and those individuals that take advantage of inspiration to understand that some of these behaviors are going to change on this time, that the more that we should technology to the cloud, the more that we should Workloads to the cloud the more that we use technologies like artificial intelligence on Dr Nonlinear decisions that massively optimize everything we do from the way that we deliver healthcare. So the way that we manage supply change to the way that we secure food, frankly, to the way that we protect the environment that is a silver lining, that technology. It is one of those solutions that help in all of these areas, and the silver lining of this is is hopefully, let's use this time to get better, prepare for the next academia to get better, prepare for the next crisis, to implement technologies that drive efficiency faster, they create new jobs, they protect the environment and what we cannot change the fund that we have 19. We can change what happens after the 19 So we return to there's something better than what we enter before. >>Very thoughtful commentary. Jesus. Thank you so much for coming on the cube. A blessing Steer to your family and yourself. >>Appreciate it, Dave. Thank you. And thank you for everything. You do too well, Keep everybody informed. >>Really? Our pleasure. And thank you for watching everybody. This is Dave Volante. You're watching the Cube's coverage of IBM. Think 2020. The digital event. Right back. Right after this. Short break. >>Yeah, yeah, yeah.