>> Announcer: Live from San Francisco, celebrating 10 years of high tech coverage, it's theCUBE! Covering VMworld 2019. Brought to you by VMware and its ecosystem partners. >> Okay, welcome back everyone live CUBE coverage here in San Francisco at VMworld 2019 I'm Jon Furrier, my co-host this segment, Stu Miniman. 10 years Stu it's been a long run. A lot of CUBE alumnis around, we got two here. Honore LaBourdette Vice President go-to-market Telco Edge Cloud at VMware. And Lakshmi Mandyam, Vice President Product Manager, go-to-market Edge IoT at VMware. Great to see you, thanks for coming back. >> Thank you for having us. >> So, I think IoT's going to be a pretty big deal. 5G, jury's still out on 5G but it's looking good. Look, if Pat Gelsinger said it's going to be great, it's probably going to be great. What's new? Give us the update. >> Well, just a commentary on 5G, when you say you think it's going to be great, there is some skepticism in the marketplace because if you go back and look at all the different generations of cellular technologies, it's the odd numbers that have never been successful and the even numbers that have, from a monetary perspective for the telcos. Interesting thing about 5G is because it's such a system-oriented technology, that we do believe that it's going to enable a lot of the capabilities associated with IoT, right? So there's an interdependency between 5G and IoT and IoT and 5G that I think is going to make 5G more successful than any of its predecessors. >> All of us are nerds that geek out on RF and physics. I mean 5G has a lot of skeptics but they're deploying 5G, it's not like it's a vaporware. There are deployments going on in the United States, certainly outside of the United States. So it is real, it's actually happening. The question is what will be the impact to the network effect and what's it going to enable, which will certainly impact the industrial IoT and IoT markets. >> Well so one of the things that's happening with the deployments of 5G isn't just the innovation associated with the spectrum technology of five generations of mobile technology, right? There is an entire transformation happening with the core infrastructure of the telco network. And there's an interdependency there as well, right? So as the telco's software define the infrastructure on which they run all of their services, that then extends all the way through from the cloud to the core to the edge for all of the radio access and everything associated with 5G. >> And we're also seeing on the IoT side that there's a similar transformation going on, 'cause right now when you look at kind of example manufacturing, right? There's a real siloed infrastructure, siloed use cases and people are not able to scale and especially when you start to see the business impact that IoT's actually going to have, because most of the data that's being generated is actually being generated from the devices at the edge. And there's a viewpoint that a lot of the workloads that are actually being generated for the enterprise are actually going to be executed at the edge and when you take those things into consideration, it's really important to have an infrastructure that scales. And just like we've seen in other areas where a sprawl of infrastructure is really not going to be be effective in terms of delivering business value. That's the same problem that we see here. >> That brings up a good point. You mention systems view. I think this is interesting 'cause I think this business model innovation, as well as the architecture. I mean, you become what you're known for in the old infrastructure. You don't want that legacy to be dictating the new things, you mentioned backhaul. That's a topic that people talk about in the cellular business. You got the radios, you backhaul through a network, go to the core. But now you're getting at something different where if you're going to be backhauling, which implies moving packets around, moving data has become a really big problem or concern because the cost to move data, the physics involved, latency is a requirement. Processing at the edge becomes the new architecture. >> Yeah, I think the old paradigm was around moving data to the compute but the new paradigm is going to be moving compute to the data, especially on the edge and the IoT. And this is where managing that whole compute infrastructure is going to be really, really important. And that's what, you know, the VMware Telco Edge-- >> Well, we're going to ask Pat Gelsinger a question that riffs off what Dave asked years ago. Stu, I don't remember what year it was, 2012 or 2013, Dave Vellante asked Pat Gelsinger, "Is security a do-over?" You know Pat's very opinionated, he's like, "Absolutely a do-over." Really risky, bold take to say at that time, turns out he was right. The question I want to preview with you guys is, is the architecture a do-over? Because if you think about it, there's new capabilities, you mentioned the systems view. Is there an opportunity, not to throw it away, but like, just rethink it, get a second chance at deploying large scale edge, cloud, versus backhauling through the data center, maybe backhaul through the cloud. So, to me it's just kind of feels like a do-over. >> Well, there's very much an opportunity to, I'll say evolve rather than to do it over, right? 'Cause do-over kind of implies everybody's going to throw out everything that they have. But when you think about the beauty of software is that now we can have inherent security in all of the aspects of the software defined network all the way through the edge. So if you happened to hear Pat's keynote this morning, you know, he put up a slide of all the different security vendors across all of the different types of, the different areas of the clouds, the different cloud technologies and basically said that there is an opportunity now for us to do for security basically what we did for compute and networking and storage, by software defining that. And so that's the opportunity for security is to leverage all of what you can do with a software defined approach and have security be intrinsic to everything from the cloud to the core to the edge. And specifically for IoT. If you think about Lakshmi's comment about pushing the compute to the apps, and pushing the compute where the applications are going to be, or the user is going to be, I think there's going to be a greater requirement for security actually at the edge than even what we see in the cloud today. >> Lakshmi, you know, one of the comments we made is if you looked at the keynote this morning, the virtual machine is not the center of the the discussion. There's, you know, VMware, now plays a lot of places where that VM is not at the center. If you can bring us up to speed, when VMware looks at the edge architectures and how they're going to work with enterprises there, you know, what are the solutions that you're going to bring to bare out of the portfolio? >> Yeah so we have a, you know, when you think about IoT and there's all these things that are out there, oftentimes when someone installed it in the factory they didn't even update the factory settings, the threat surface of that is just expansive. And so, what we're doing with the product that I'm going to talk about, Pulse, we actually life cycle manage these devices, software updating, making sure that they're compliant with IT kind of security and other requirements. And so, what we see is the architecture, is we see kind of this managed infrastructure at the device level, that then feeds into kind of the thin edge, and you heard Pat talk about it this morning, right? Pulse and NSX and VeloCloud for the thin edge and that kind of, it's a continuum really. You can't define-- >> It's difficult to do. >> It's a continuum of compute ranging from very small footprint all the way up to our Dell EMC announcement. BMC on Dell EMC, sorry. >> We actually did some original research back when, you know, GE was putting together their industrial internet and one of the biggest stumbling blocks we saw is that huge gap between the IT and OT, they don't talk. You talk about the telco, that telco role doesn't tie in to the traditional data center world. It's at the edge and some expert comes in and does their piece but, you know, smashing these worlds together is a real challenge. >> What's interest-- >> Oh, I'm sorry. >> I was going to say 5G is the technology that I think is going to create the catalyst for those technologies to come together, right? So you have the enterprise edge, you have the industrial edge, and you have the telco edge. And over time, the more the telcos start pushing compute out to their edge, enterprise push compute out to their edge. And then you have all of these industrial IoT devices. The definition of the edge is going to begin to blur. >> I think this is, I think the IoT, industrial IoT, is probably the most important tech story this generation. It doesn't get as much play as AI, 'cause AI kind of sounds cooler, attracts young kids to be coders, but IoT is really the most important thing because think about the industrial IoT, the threats, cyber threats, cyber security. One hole, one hole and the attacker is in. Just to speak security and critical. >> I actually think it's beyond that because I don't know if you heard Pat talk about his definition of the edge, which is actually that merging of the digital and physical worlds. When you think about that, most of human problems can be solved by great technology, technology for good. And so you think about industries being pushed to produce more, 70% more food with just 5% extra land, or you know, carbon emissions, all of these problems which with good visibility control and management can be solved and that's really what we're trying to do-- >> Yeah, but good intentions, I understand where Pat's coming from. It's good, it's good marketing on the stage but the reality is, is when you roll out the tech to make that happen, if you don't have that security intrinsically pulled in, this means that you got to have the zero trust. But IoT is a different animal on a thin edge, than it is, say a data center. So like, it's just one of those things where we're watching 'cause it's just, there's so many, the service area is so large. >> Yeah, and in fact, one of the things that we're doing in terms of incorporating security in the management is looking at hardware Root of Trust right down to every device that's managed and being able to, you know, to attest whether something is legitimate or not. So we're rolling all of those things into our technologies. >> So, Pat brought up the telco. Earlier on, we were asking some of our guests about the business model on telco, because, you know, telcos have been struggling, they had owned infrastructure. So when you own infrastructure, it's hard to go out of business unless you actually run out of cash, but they had plenty of working capital, but they got to get their business model. You guys have any thoughts on as telco starts to modernize, whether they migrate and modernize or modernize and migrate with cloud, what's hopeful things that you can share that's showing business models for telco? Because 5G, someone's got to pay for it. It's not inexpensive to roll out 5G. >> So, what we're seeing with our telco customers is that they're finally beginning to realize that they can actually accelerate their time of revenue with new services, with a software defined infrastructure. So, I think when first we met, you know, we were in the early stages of developing the market for telco with software defined. But we've crossed the chasm now to where we have over a hundred discreet telcos that are in production on our platform. And so we have proof points that says, "Okay, now they can accelerate time to new revenue". What we're focused on now is helping them extend that out to the edge. And as you know, partners with Lakshmi, we see the telcos as a route to the enterprise market for our edge an IoT solutions. Right, so there's an opportunity for telcos to participate not just in the cloud economy but the edge economy. In terms of the business models, the change is driving the business model transformation. You know, the technology is driving business model transformation. But it's an excellent point. Its operating models are transforming, business models are transforming, and interestingly enough, commercial models are transforming as well. >> Lakshmi, you know the app side's going to be where the growth is now. Getting back to the good thing, once that infrastructure is stable, the apps can come out. So the application development, the microservices, that kind of to me connects that Kubernetes piece to it. That is an opportunity to telco providers, right? >> Yeah, absolutely. I mean again, it's all about deploying and managing applications right at the edge and so the infrastructure that we're building, with all of the announcements that you heard and the features that we're adding into the product profile is really about how do you deploy and manage these applications right down at the device level and that's really where I think it's going to transform. >> A lot of action. >> A study came out just yesterday that the edge market is targeted to be a $4.1 trillion market. >> Yeah, it's going to be huge. >> That's trillion with a T. >> Yeah, it's going to be huge. >> So, wondering what you can say about the ecosystem. Because, you know we've looked, VMware has always had ecosystems but it's many ecosystems, and you've got a cloud marketplace, and there's lots of different customers so will some of your existing partners go along with this, is it building out a new suite, you know, when you look at the edge and IoT? >> I think there will be a group of partners that come along, for sure, but, you know, IoT, especially when you think about industrial IoT, it is a new space of players and we're building that ecosystem and trying to figure out what customers want, right? Because, it's an ocean, you could boil it but that may not be the right approach. >> Yeah, I mean, it's like you said, there's a T on the TAM. It's a huge, huge TAM. It's going to be a huge application boom and IT culture's got to evolve from that perimeter-based security to a surface area that's out there, that's one light bulb on a factory, that IP enabled, could be a malware entry point. It could be something for a worm to get in there. >> Well, it's really like any device. What's that, any-- >> Any device, any application, any device, any Cloud. >> Any cloud, I think in IoT, it's anywhere. >> Anywhere, exactly. >> Totally, totally. >> And to your very accurate point about the security associated with that, right? In the telcos, actually owning that last mile. Right, so when we talk about $4.1 trillion of opportunity, and the need to develop an ecosystem that can support those edge and IoT solutions, the telcos really are in the cat seat to take advantage of that because they own that last mile of customer access, customer influence, they own the cell towers. Right, so as we push compute out to the radio access, telcos have an opportunity to participate. >> Honore, I want to get your thoughts while you're here and Lakshmi, if you can chime in, that's cool too. I'm doing a big editorial on industrial IoT national security. This all kind of leads into policy, potential regulation. You know, I mentioned tech for good, tech for bad is neutral how it's shaped. I'm assuming you guys are going to take a shape in some of those conversations. Any thoughts on regulatory things happening because with cyber security, cyber war that's happening on our digital turf, the telcos are in a prime position to assist and help shape that, you guys can do that. Any thoughts on how you see that, that conversation? Anything you'd like to add? >> So VMware is participating in consortiums associate with those very topics. And of course we are developing technology with an appreciation and understanding respect for the governing agencies across every country as it relates to privacy and security. And so I'm sure, you know and it varies from country to country. In terms of what data you have access to and how you deliver that data and what you do with that data, that's a really hot topic in Washington these days, right? >> And software helps too. >> Software does help, right? You have so much flexibility with software but at the same time you have so much risk that you have to prevent. What we've learned is, it's really about the individual's information. Whether that is a device or an industrial device or an end user or a potentially, a point of presence. It really does depend on what you do with that data, who touches the data, and where is that data going to be housed. And so each of the different countries, each of the different telcos, depending on their location are adhering to the governmental requirements for who does what with the data. >> Yeah, it's interesting, we just did a power panel in our studio, we had experts come in talking about called the "Cybergeddon" scenario, which is a hacker taking over not just malware and getting penetrated with worms and getting access to data, but actually taking over physical devices to harm people. So, this is kind of a nation threat thing. It's not so much a corporate thing, but you know, there is a shaping opportunity here when we're trying to identify where, you know, good governance, at least from a policy stand point, tech are coming together. More and more, it's happening. >> And of course, we participate very actively here in the U.S., right? Because we are a U.S. headquartered company. We try to participate where we can in some of the other countries for the regulatory agencies. And we're a part of the world economic forum. So through that vehicle, you know, through that consortium we're also trying to influence, for good, of course. We just recently, we announced this morning that we acquired Uhana and Uhana is an artificial intelligence machine learning and specific to telco, it will observe, analyze and report back on data all the way to the consumer level across a radio access network. And the one question we get asked from every telco that we do business with is, "What do you do with the data?" And of course, we don't do anything with the data. In that particular technology, we're observing it but we don't necessarily touch it. But you're exactly right, I think it's something that's going to be a hot topic for a time, awhile to come. >> It's an opportunity for tech for good. Guys, thanks for coming on, sharing your insights. Great to see you again, thanks for coming on. Great insights, a lot changing and certainly very relevant, the IoT Edge, telco, IoT's all happening, AI is a part of it. It's theCUBE, live coverage. I'm John Furrier with Stu Miniman. Be right back after this short break. (light techno music)

>> Live, from Las Vegas, it's theCUBE. Covering AWS re:Invent, 2018. Brought to you by Amazon Web Services, Intel, and, their ecosystem partners. >> Welcome back everyone, live here in Las Vegas, for AWS, Amazon Web Services, re:Invent, 2018. I'm John Furrier with Dave Vellante. Dave, our sixth year covering this event. We've been to all the re:Invents, except for the original one, watched the progress of cloud computing. And it's a lot of new things happening, more compute, more power. We're here with our special guest, RaeJeanne Skillern, who's also known as RJ inside Intel. Vice-President of Data Center Group and the General Manager of the Cloud Service Provider Platform Group at Intel. Good to see you again. >> Nice to see you again. >> The headline on silkenangle dot com right now, "In a blockbuster move, "Amazon jumps into data center with both feet". Which really validates kind of some of the commentary we've been seeing in the queue for many, many years. And our analysts and you guys are involved in the Data Center. Data Center's still going to be a big part of computing. It's not going away. That's your business. >> Yes. >> And the cloud service provider, which is also growing. So, take a minute. >> It is growing, I've been personally covering the public cloud at Intel for a decade. And, when I started I'm not sure I had any concept how big this was going to be. And the one thing that I'm positive about, is we're just still at the beginning. Because every use case you see, all the development, all the IOT, all the business transformation, we're just starting, right. This is a good place to be, but there's more coming. And, if I look at just 2018, I'm a little competitive at work, but we were to proud to announce earlier this year, the end of the summer, that the cloud is now 43% of the Data Center Group's revenue. So, coming from when I started, 10% or something like that little, now to be the number one contributor. And, we, in the first half of the year, had a 43% a year revenue growth. This industry is booming. And I wish I could say it was my hard doing, but I mean, if you come to an event like this, you know why it's growing. >> And the cham is increasing in the total market availability with the cloud, is requiring more and more horsepower. >> Yes. >> You've got IOT Edge, you've got the Data Center, you got the cloud, and software is being written, specifically to take advantage of something. So, huge market opportunity, still. >> Yes. >> What are some of the innovations? Take us through a little bit of your mindset on how you guys are attacking this growth, surface area of the market, starting to see specialized things, general purpose, compute is not going away, storage, networking, still very important. You've got FTGAs out there. I mean, amazing amount of opportunities, with innovations. >> You know, you hit so much of it, and I really agree with some of the comments you made. It started off for us, with silicon technology. But, what a lot of people don't know is, we have core computes, network, storage, FPGAs, purpose built accelerators, and we can create custom aesics for any one of our customers. We also have a unique ability to not only just customize, uniquely, but you talked about the many different use cases from Edge to Data Center, it's because every workload demands a different set of technology capability. If you want true optimization at the TCO, per TCO level. And so that's why it's so important for us to work with customers like Amazon, not just to customize one SKU, but many SKUs. We are, and I was surprised at this number, out of our latest Xeon processor, the Intel Xeon scalable processors, there's actually 54 instances, on just that one CPU generation alone, and 51 of those, are from a custom CPU, that were tailored for unique workloads and instance types. So, that's part of it, but you also talked about the software. And, that's another thing, I think people think Intel's the hardware company. OK, we make hardware, we're a huge software company, thousands of engineers. And, what I love about my job, is I built a team and call them the Cloud Ninjas, but they're software and hardware engineers, that go onsite with customers. They, whether it's performance tuning and optimization, or we are co-creating cloud services. New cloud services, with our customers, that innovation, up and down the stack, that's where real innovation can happen. Two heads together, not just one. (laughs) >> So the cloud is now the number one consumer of your technologies. >> Yes. >> There are a lot of misconceptions early on about the cloud. Everybody thought, okay, the cloud is going to be just one big cloud. It's actually quite diverse. It's global in scale, it's a services business, which has always been sort of fragmented and global, despite Amazon's dominance in infrastructure service. The Data Center itself, the players are kind of consolidating, which is kind of interesting. So, how has cloud affected the way in which you guys look at the market, go to market, everybody else thought everything was going to be standard off the shelf components, in the early days of cloud. >> No. >> Now you're driving towards customization. >> No. >> So what's happening there, what are the big ideas. >> I think we've learned a lot along the way, you're right. One of the things, I mean, these cloud service providers are pushing me off the road map. They want more than we can deliver, so that's where we bring so much at hand to do about it. But, I'd say while a lot of big players are getting bigger, the market is still really in a healthy way diversified. The Super Seven, as we call them, the world's largest, they're growing fast, about 35% around the world. The next wave around the world are growing almost as fast, about 25, 27%. Consumer SAS, has been, Twitters, and Facebooks, and Ubers, right, has been a large part of the cloud. It's now 50/50 with business. And they're both growing at the same categories going forwards, so you're going to see the diversity. Not just big players, but also small. Not just consumers, but business services. And then that's spanning a lot of global growth, and a lot of, if you see the wall of logos in any Amazon presentation, it's because they have partners all over the world. >> RaeJeanne, I want to get your perspective. I talked about this a couple years ago on theCUBE, about the power law of distribution of cloud providers, the top of the head is the big guys, then kind of narrows down. But then I was predicting a cloud service provider market was going to expand and I want to get your thoughts cause that's kind of happening now, you're kind of saying. But I want to get specific on this. You got core cloud, Amazon's of the world. Then you've got hybrid cloud, kind of Data Center. Then you've got the business cloud, business SAS. >> Business SAS. >> Sales force, Twitter, you mentioned those guys. >> Uh huh. >> They run clouds. Enterprises are now going to be cloudified, with commonality. >> Multi-cloud road. >> This is changing the nature of the business. Do you see it that way, talk about this business cloud, it's not competing with core cloud, it's just an expansionary. >> It's so interesting because there is certainly some competition or cannibalization within the cloud. But what I tend to see is, whichever part of this, because you'll hear a Business SAS company, some of it's running in the cloud, some of it's running on their own premises. They're doing that for a reason and both are growing. And then you talk about infrastructure service, but what really happens, especially we another rise moves their business into the cloud, there is just some part of it, just moved A to B, but what we're finding is about 30% of it is TAM expansive, because there are things when you move to an Amazon, or you move to another cloud service provider, take a mature SAS provider, they're just things that they can do that you never would have been able to do in your own IT shop. So, that's driving TAM expansion on top of it. That's also creating a lot of new market entry points, for new businesses to come in and innovate around. Security offerings, verticalized offerings, geo-based specialized offerings. So, yes, there's some friendly competition, but even when I ask somebody who would say, they might be the little challenger to a big infrastructure service player, they say but you know what, we actually get so much business by working with them too, it's hard for me to say, are they competition or a partner, right. That's the industry we live in. >> Co-creation, you mentioned that earlier, a big part of it. >> And the other big TAM expander is you've got the data, you've got AI, machine learning. >> Yes. >> You've got the cloud for scale and then you've got Edge. >> Yeah. >> These are not, it's not a zero sum game, where you're moving stuff from the Data Center into the cloud, these are all incremental. >> New. All new. >> So what are you seeing there? >> Yeah, I'm really excited about the Edge. For me, it kind of feels like that next, uncharted frontier, everybody's investing, everybody's doing amazing things. We're getting the 5G out, we're getting better technologies, we're learning how to store data, and move it faster, quicker, and cheaper. We're getting set up, but the use cases are just yet to be really fully defined. And I'll be honest, when I look at my market modeling, over the next five to 10 years, I always put a little disclaimer, this does not comprehend what's going to happen when billions of devices come online, when we activate. So I think when people say, it's a cloud, it's been going so fast it's going to just slow down. Why? Because innovation's not stopping. >> I think you hit the nail on a point we try to clarify on theCUBE here, is that a lot of people are misunderstanding what a cloud is, and about cloud service providers. As it grows, it's a rising tide floats all boats, so everyone tries to squint through, they're winning and a market share there. It's a different game changing, so that's a great point. I want to, as we get ready to end this segment here, give you a chance to talk about the relationship with Intel. You guys, again, cloud service provider is growing. Big part of your business. But you guys have been working with Amazon, for a long time, talk about the relationship between Intel and AWS. >> Yeah it is, it's a privilege, to be able to. The folks at a company like Amazon, and specifically the ones at Amazon I work with, they have the ability, obviously, to track some of the most amazing talent in the industry. And these people move fast. And, they have a lot of choice. You can either be there with them, ahead of them, and do the customization and differentiate them, and give them what they need. Or, they're going to leave you in the dust. So, I'd like to say we have a great partnership, because they've given us the honor over 12 years. We have so many, from the Data Center, to the Edge, the car, the racer car, deep lines. So many things we're doing together, Stage Maker, Machine and Deep Learning. But it's a, if we slow down, even for a bit, we're going to get left behind. So my job is to just keep running and trying to get ahead of them. And every time I think I get there, they come and poof. But, we're working together. It's a great, challenging partnership. But one that I can guarantee there's better innovation, from Intel, coming out of it, because of getting the opportunity to work with Amazon. >> And you guys are contributing to them too. It's a good win, win scenario. >> I believe so. They've said some really nice things about us, so, about our processing technologies. Our products, seven generations of our products, we're in every availability zone, every instance frame. We've got a great position. >> Well, congratulations on the business performance, I love the Cloud Service Provider expansion, love the Data Center focus, that's really relevant. And acknowledging by Amazon, that's good news to see. And, just stuff. Thank you guys for your partnership with theCUBE. >> Yeah, thank you. >> Here at theCUBE, Intel Cube. Intel is a big sponsor of theCUBE, we really appreciate that. I'm John with Dave Vallante. Stay with us for more AWS coverage re:Invent, our sixth year in a row, covering all the action. All the value being created. Stay tuned for more after this short break. (techno music)

>> Live from Las Vegas, it's theCUBE. Covering AWS re:Invent 2018. Brought to you by Amazon Web Services, Intel, and their ecosystem partners. >> Hello Rod, we are here live in Las Vegas where Amazon Web Services' AWS re:Invent 2018. It's our sixth year covering re:Invent. We've been there from the beginning, as a customer using EC2 when it first launched in 2006, one of my first start-ups. What a scene it is here. Everyone in the industry is here full on, it's a Super Bowl of technology, Amazon is leading in the cloud game, and we're breaking it down for you in theCUBE. Our next guest is Holland Barry, Senior Vice President in Cybersecurity for Cyxtera, a hot company. Welcome to theCube, thanks for joining me. >> Thanks for having me. >> So, it's great to have a senior people, start-ups, technical people on theCube. Kind of extracting, kind of squint through the volume of data that's being announced here at the show. Huge set of announcements already out the door. More coming. I'm expecting to hear a big connectivity announcement at 11:30 involving satellite and remote coverage for IoT devices, VM containers, micro VMs, all this massive amount of tech. Putting it into reality is critical. This is what customers want to do, they want to lower their costs, they want more performance, lower cost, more capability. Ushering in a true programing model for DevOps. How do you guys fit here? What's your story? Why are you here? What's the value proposition? >> So we're really focused, especially at this show around the DevOps community, and enabling agility for those folks. Ten years ago, the word DevOps and the term DevOps came to life, and there was this tug-o-war going on between the development teams and the operations team. Where development team wanting to move fast, and have all the agility. And the operations team wanted to have stability, and then all these things. They came together in a matrimony, and 10 years later we're highly automated, everything looks great from a DevOpps perspective, but what we're seeing now is security, being a bit of a speed bump. They're having a hard time catching up with that. That's our focus on the show is unleashing the DevOps folks >> and letting security move at the speed of DevOps. >> Lets drill down on security. Obvious cyber security is a global issue. It's also a national security issue in the United States, but other countries too. It's a global policy thing. There's tech involved, right? Cyber warfare all those, we hear about the news. But for a basic enterprise, the perimeter's no longer there with cloud. You got to think differently around how you're going to secure things. Amazon is now seeing security, not a blocker. Used to be no cloud implementation, it's not secure at all. Now you're hearing people saying, it's actually pretty secure, but there's more things going on keep raising the bar on capabilities that are needed. Could you share your expert opinion on, state of security of the cloud. What are the key areas? Where are they kind of leveled out? What's the baseline now? How acceptable is that? And what are the gaps, what are people working on? >> I think we're seeing a lot more security components, move into that infrastructure as code conversations. Amazon is fantastic about launching stacks, via cloud formation template, or maybe using TerraForm And now we're seeing the need for security components to move into that as an extension, of that infrastructure type deployment. That's another are of deep focus for us. >> Is there a tech trend that's a tail win for this? Is there anything helping? Or is there more headwins then tailwins? What's the big focus? >> I think one of the big trends we're seeing, and we're getting a lot of analyst conformations on this trend too is, the whole thing around software to find perimeters. So a new approach to describing access, for the users, kind of getting away from the VPN model, where you have a central concentration entry point. And then having the traverse complicated, to maintain back haul lines right? We're seeing software define perimeter, allow users and DevOps professionals access multiple environments simultaneously, without the need of these more archaic architectures if you will. >> Now the way it works braided to VP is absolutely great. Very secure malware transmission to the inpoint. >> Absolutely, I mean you think about the old style of connectivity, and you've got a user, that has nearly unfettered access wants that VPN connection isn't created. They have way more access, they have way more ability to spread malware laterally, with a VPN connection. Software to find perimeter, greatly reduces that attack surface, by giving those users only access to those items, within the perpend infrastructure, that they're vetted to have access to, and nothing more. >> So hold on, I got to ask you a question around cloud architects, the hottest area that we're seeing from an educational, learning, progressionary, knowledge seeking area, what is a cloud architect? And what are the things that make up, how would you describe and ideal cloud architecture? So I'm enterprise, I realize I've got to straighten my data center down, I'm using the cloud, lot of great things about the cloud, lot of great things about having something around perimeters of low latency. Now we've got IOT Edge, I'm going to want to power that with power, and then have connectivity now, that's over the top. How do I architect this? 'Cause data is going to live there, human computes can move around from Amazon, that's the direction that they're going. How do I lay it all out? What's your view on Cloud architect these days, and how they should be thinking? >> Well the Cloud architect role I think has evolved a lot, So start off with right? It's no longer just being an infrastructure person, you've got to be sort of an expert on security, some of an expert on networking, and a lot of storage all these other components. I think it's different, the organization, I think there's a series of best practices. I think AWS does a fantastic job of delivering templatized best practices to folks who are looking to adopt a cloud architecture. I think that's a great guide post to go by. Is the recommendations. >> How about staffing? What are you seeing in the makeup of the kind of, you know, I don't want to sound....Ninja or pirate, or whatever metaphor you want to use. You see kind of a new bread of, DevOps engineering, >> Absolutely. >> Mixed with app developer emerging. >> Yeah I think you got it, I think that matrimony that happened between the develop and the operations team has continued to evolve, and we're seeing this new kind of combined specialty. Where you've got great programming chopped, You're a python or JavaScript ninja, and you also know a lot more about the infrastructure than traditionally, your development role would of necessitated in the past. >> What are the top security conversations are you having in a DevOps environment, because there's some really great DevOps shops, and DevOps thinking in a lot of companies. And then you've got the people who're now learning DevOps they're kind of getting cloud native. They see Kubernetes around the corner. They see.. they put containers around things. I could keep my work loads on premises. Okay I got some cloud. What is some of the thinking around that? What's your view on all this? >> So I think access is a big piece, I think, you know developers needing to get to heterogeneous set of hybrid environments. They might have some legacy, or new stuff on prem. They might have a couple of clouds they're working with, how do you have a single unified policy contract that talks about how it's users can interact with it. And we're also hearing a lot about DevSecOps to moving that detection of vulnerabilities, and code imperfections earlier on in that development cycle. And we're enabling a big compliment to that, we're not DevSecOps ourselves, but we're involved in that conversation from an access perspective. >> Can't you explain what you guys do I want to get that out there because board. What do you guys actually do? How do you make money? What's your business model? What's the product? >> Yeah, so Cyxtera is a cyber security company, that also happens to have a colocation data center footprint in 29 markets. We've got 50+ data centers. We're here focused on, once of our access products called Appgte STP Appgate is a secure access solution, that was really built with developers in mind, that allows that simultaneous secure access, to a multitude of environments. So if you're a native U.S customer, and you've got 20 or 30 accounts, we can seamlessly allow that connectivity with a very robust policy structure, to allow all those developers, those users, to interact with those environments, without having to do that VPN switching that we discussed earlier. A real real clean in sophisticated way to connect your users into your internal and sensitive infrastructure. >> And what're the...who's the buyer of the product? And why are they using you guys? >> It's typically going to be the security team, sometime we'll have the networking in the cloud, infrastructure teams involved in the conversations, but this is a security product. This is secured access product. And this is really a evolution, of what people are using for the VPN, and jumpboxes and things like that for these days. >> How dead is the VP if you had to put it on a scale? One being on life support, 10 being still state of the art. I mean VP is still around, people are using VPNs a lot. >> Totally. >> There's a role for VPNs. Is it a rip and replace? Or is it more of a functional, some spots VPNs are great, some spots they're not. What's the role of VPN? >> We're seeing them, and I think Gartner has a statistic, that 60% of VPNs will be dead by 2021, or something like that. We're seeing that evolution occur. Looking simple environment, A VPN might be a really appropriate approach. But when you have cloud workloads everywhere, you got on premise data, you've got your users everywhere. It simply can't keep up. That's really the problem space part of it. >> Where's the action for security in terms of good developing trends? Is it at the network layer? Is it the virtualization layer? The identity layer? Where are you seeing, security really advancing and excelling with cloud? What specifically, where's the action happening? >> I think it's at all airs. I mean, we've seen the identity access management, identity provider market explode. We're seeing great new technologies around, container security, virtual machine security. I can't pick any one category, I just wouldn't. I would argue though, that this access category in the software to find perimeter trend, is something. We're tuned into it obviously, maybe a little more than most. But we are seeing a huge uptake. >> Well what's the alternative? I mean most IT guys, obviously they're scared. I mean they're not... They're kind of running scared. They've been doing perimeter based security for years. Firewalls, routers, all classic all lock down. Now in comes API economy, and now they're like, "Okay." I got to figure out, buy them everything in the planet to figure it out. What are they doing now? What's state of the art for people who are moving off the perimeter completely? >> I think the adoption of, more cloud native controls. A lot folks right now, are very familiar with traditional firewall vendor, and they'll tend to take that, and implement a software version of that hardware box up in the cloud. And we're not arguing that, you need to get away from something, like a next generation firewall. This traffic exception is does a lot of things, that our solution specifically doesn't do on a lot of the SDP soluntions don't. Taking that layer approach, and seeking out the solutions that are, that are cloud native. Forcing an uptech on that, and it's really changing the way people think about the architecture in their environments too. We're familiar with one thing from OnFarm We try to shoehorn that, that methodology in the cloud >> So single sign on is critical >> SSO is critical, we're seeing a huge check up on that. Absolutely. >> How do I handle the sprawl of new environments, with IOT Edgefor instance, you'll see a lot more things connect in. How do you do that? Is it manual, was there any animation or machine learning? How are you guys bringing that to scale? Because that's a big challenge we hear a lot. >> Absolutely. One of the things we're doing, at Cyxtera, is allowing you to templatize what secured access should look like for these new environments. So just like you're deploying that infrastructure as code, we're just a secured access piece of that. All the connectivity has already been described, by the security team. So back to the comment about DevOps Where operations team needing to move fast. Thinking that would deploy a brand new environment, with that access me and you >> So you're splitting up the auto building, you're standing it up quickly. >> Yeah >> All built in a preconfigured policy just goes out. >> Absolutely. Data dog, one of our reg AWS customers a great example of someone who is highly automated everything. They don't even touch our UI They use APIs for everything. They've codeified all the elements of our platform, and so when they spin up a new environment, you know they'll actually check out, a configuration from their, whatever, get hub get lab they're using. And inject that into the spin up of the new environment. Super sophisticated, high level of automation. Really at the end of the day, what's it helping them do? Why are we doing any of this? Why are we doing DevOps? We can move faster to the live product and services, quicker to our customers. >> So you guys are basically DevOps version of security, you're instrumenting everything DevO.. Data Ghost is a great example. They're instrumenting every, all the application areas. You guys are taking the sim.... Devops approach to security. Is that your approach? >> DevOps approach to security and user access, yeah, very much so. >> And what's the big conversation you're having here, at reInvent? Obviously a lot going on, what's most exciting for you here? Every event. >> I think it's everything that we just talked about, we're hearing people finally get ready for this, message you know, we're practitioners and users of this platform ourselves, and the SDP speck. I use it everyday. I flip up my laptop in the morning, I get instantly connected from anywhere to seven and 10, what we call sites right? We're familiar with the power, we're leveraging the power internally. Now seeing other people come over, what people like Data Dog and Voicebase or tour AWS clients, seeing what they've done, seeing their story, and having them say, "Hey how did they do that, we want to do that too." >> And how 'about a global scale, you guys are agnostic on geography, so they play into it. >> Completely neutral to the underlying infrastructure, the geography our solution acts the same. It doesn't matter public, private, cloud, bare metal, it's a unified policy framework that allows you to, to whatever level of granularity you want. Just grab access from the user, even including, ingredient from a third party system. For instance, I may have a developer that's assigned to a task, or a story, or an epic. Inside a Jira project for instance. Popular development tool. I can dictate, his or her access, to the infrastructure. And the projects are working on, based on an API called the Jira saying, "Okay this person has access to these things." Now I have a conditional response to, should someone have access to this resource. It's well, it depends, are they working on this project? Are they in the office? Is there a machine patched? Who are they and the identity provider? All these things should feed in to.. >> And they're automated too. They're automating in? >> This is all completely automated, and all these checks that I just described, are actually done our system, preauthentication. So you're vetted first, and then you're handed an access passport, we call Live Entitlement. And that gets you to the infrastructure, and only the infrastructure and applications you're vetted to do. Based on that evaluation that happened preautentication >> How agile are you guys when new things have to change? There's a security threat, or something on the landscape or surface area changes. How do you guys respond to it from aj Jilly standpoint? >> Yeah so, our system can take hints VN and API as well, so if you have a, you know, a threat system or something giving you signals that something might be going on. You could come into our system for instance, and revoke everyone's accces, you could prompt someone, maybe for a step up authentication, to make the reprove who they are, they got a one time password. So lot of options. We want to take hints from third party systems, we're designed that way. We can adjust, network access and program the network, based on other things that are happening. >> Final question before we wrap up here. Let get a plug in for the company. How old is the company? How many people... So how about some of your customers? Give the plug for Cyxtera. >> 1500 employees, I think I mentioned, 50+ data centers across 29 markets, hundred and hundreds of customers on the security access product that I talk about. You know, many thousands of customers in our data center. >> So business is good? >> Business is good. Yeah. In terms of like focus areas for next year, we're all in on DevOps, we're investing heavily in this area. Expect to hear more about a richer API set. More prebundled integrations, and also a bigger focus on containers. >> Well I think you guys are a great example of, success with using cloud. Lot more work to do. >> Yep. >> I mean you've got, Global, you've got all kinds of new landscapes changes. Final question, What's the one problem you saw, summarize it in a sound bite, why do people buy Cyxtera? Why do they use you? >> For network platform access for your user with a single security contract. I can't stress that. It's a huge competitive differentiation, versus some of the web application proxys that are out there. I invite everyone to dig into the details about what we provide. You can go to appgateforaws.com if you want to test dive the product. Get a feel for the admin UI, the client setup all that stuff. It's really simple and I give ya real good taste. And please come by the booth and see a demo as well. >> Tell th em Johnathan, you get a 10% discount. Only kidding. Hey, thanks for sharing your insight on theCUBE. >> Thank you very much. >> We're here at reInvent, lot of action happening. Obviously a crowd of great people. Lot of great networking, but more importantly than industry continues to power forward, with cloud, on premise, in the world. It's cute bringing all the action her in Las Vegas. We'll be back with more after this short break.

>> Live from Orlando, Florida, it's theCUBE. Covering Microsoft Ignite brought to you by Cohesity and theCUBE's ecosystem partners. >> Welcome back everyone to day two of theCUBE's live coverage of Microsoft Ignite. We are coming at you from the Orange County Civic Center in Orlando, Florida. I'm your host Rebecca Knight along with my cohost Stu Miniman. We're joined by Patrick Moorhead, he is the founder and president and principal analyst at Moor Insights and Strategy. Thank you so much for coming back on theCUBE. You're an esteemed CUBE-alum. >> Gosh, this is great, can you introduce me on every show please? >> I would be happy to, delighted. So, Patrick, before the cameras were rolling, we were talking about how many, frankly, tech shows you go to a year, you said 40, 45. >> That's about right, I live in Austin but I actually live on a bunch of planes, kind of like you do, right. >> Right, sure, sure, yeah. So this is your 10th time at Ignite, or an Ignite like show, it used to be called Tech Ed, so what are your first quick takes on what this conference, what you're seeing, what you're hearing? >> So, Microsoft has a three layers, like a three-layered cake to their events, you have developers, you have customers, and you have channel. And this is their customer event, so what might seem like rehash or maybe build or inspire is if customers who haven't heard this content before. So it's really about getting them engaged and things like that and, what we've heard, first and foremost is we had 45 Azure announcements but I think the biggest news, was about the open data initiative that, I mean, how often do you have the three CEOs up on stage, where most corporate data sits, with Microsoft, SAP and Adobe, so it was impressive. And that's probably the number one thing so far. >> Okay, let's dissect that a little bit. What are your thoughts, I mean, we're sort of questioning, it's a big idea, >> Right. >> When will customers actually see the benefit and is there a benefit to customers? >> When I look at these big corporate announcements I'm thinking, is this thing paper or is this thing real? How far does it go? I think this is real, when I dug under the covers, in some, bendy NDA things, that I can't give details on, there's meat there for sure, but, where this all starts, is, is two things are going on here, first of all, to do machine learning correctly, you have to have a lot of data, right? Yesterday's big data, is today's machine learning. You have to have it all together, now you can pull in disparate data sources into your enterprise and work on that data, but it takes a lot of cleansing, you know most of the time in machine learning, is getting the data ready to be worked on. What having data interoperability standards means is you can bring it in, you don't have to cleanse it as much and you can do real time analytics and machine learning on it so it's agreement that says, we're all going to come in, if it's customer data, it's going to look like this, with different fields. Now you would think that something like XML could do this, but this is bigger and from a competitive standpoint, I have to ask the big question, where's Salesforce and where's Oracle, they're the two odd-companies out. >> Really interesting, you mention that there were a lot of Azure announcements here, something like 45. I was reading, Corey Sanders had a blog of list and lists and lists and it's typical of what we've seen in the cloud. You and I, we go to AWS re:invents, and it's like let's talk about all the compute instances, all the cool new storage, all the things, there's cheering and, you know, everything for every micro and macro thing that happens there but are there any things that jumped out at you? We had Jeffrey Silver on the program yesterday, he talked about the databoxes, like the Edge and the various versions of those, those seem kind of interesting when we talk about data and movement but anything in the Azure space that got your attention? >> So aside from the databoxes, I was really excited about AutoML. So, three ways you can do ML, you can do everything from scratch, you can take an off-the-shelf API and then you can use something in the middle, which says, kind of like the three bears, right in the middle, Google at GCP announced something like this and so did Azure. And essentially what this is, is it auto-tags your data. It's smart enough to know that this is an image as opposed to you having to start at the very beginning and hand code some data and that's not automatic because the key, so a good example might be an audio machine learning algorithm where, you might need it for an airplane versus a car, versus the factory floor, versus a smart-phone application. Those are all different environments and your algorithm's going to be different but, as an enterprise, you might not have the PhD on staff to be able to do that, but you can't live with the off-the-shelf API. >> There's another thing that kind of struck me, a little bit of dissonance I saw there, you've got a Microsoft surface sitting in front of you, Microsoft, it's gotten into hardware in a lot of places when they talked about their IoT Ps, they're like, we're going to put things out on the edge and then on the other stream it's like, well, but they're open and it's APIs and developers and software, not only Adobe and SAP but the announcement with Red Hat, talking about all they're doing with Linux, how do you reconcile the, I've heard people in Microsoft, we want to completely vertically integrate the stack and that's not something that I hear from the Googles and Amazons of the world, I thought we were kind of past that, no one company can do it all. On the other hand, they're very open and give you choice. How do you look at those pieces? >> This all stems with the slowdown of Moore's Law for general CPU compute. So, as Moore's Law is slowing down, we need to throw different kinds of accelerators at the same problem, to keep innovation going up and to the right at an increasingly faster pace. So people have gone to GPUs and CPUs and almost every one of the big infrastructure players has done that, whether it's Google, Apple, AWS, they all have their own hardware. Part of it is to accelerate time to market, the other is to get a lock-in, I'm still trying to figure out which one this is. Microsoft is saying very clearly in Azure IoT Edge that you can send your data, even if you have their hardware to AWS and GCP and I think enterprises are going to take a quick look. I've been doing this almost 30 years, I've gray hairs to show for it, but you just have to pick your lock-in, right? Enterprise AT always gets locked in and the question is, what you lock in on? If you go with Oracle and then build applications around it you're locked into Oracle. If you go with a certain hardware OEM, you could be locked into a certain OEM with converse infrastructures, so, I think it's just picking the poison, you're going to have some people who are very comfortable with going all Microsoft and you'll have some people who'll want to piece part it together and look to the future We still have people who were brought up on mainframes and they don't want to be there, they want to have flexibility and fluidity. >> One of the things you were talking about with the slow down of Moore's Law, Microsoft and frankly every other technology giant is really trying to stay ahead of the innovation curve. Microsoft, 42 years old, a middle-aged company, and really, in the tech world, a really old company. Is Microsoft effective at this? I mean, do you see, that this is a creative, an ingenuitive, an innovative company? >> Microsoft is one of the only companies that has been able to turn the corner from being aged and experienced, I guess like us, and moving into the new zone and everybody, in everybody's work has had to do that. Analysts used to, I remember getting Gartner and IDC reports on paper, but now it's very different. We're up here on theCUBE, we're on Twitter, we're doing research reports, so everything is changing and Microsoft has had to change too. Five years ago, when Azure hadn't really taken off, they had a billion dollar write-down on surface hardware, bought Nokia, shut Nokia down, you're wondering, wait a second, what really is happening but then Satya came in and, to the company's credit, has completely turned around. I will state though there is a difference between perception and reality, I think a lot of the things that Ballmer had in place were absolutely the right things, I think Satya takes a lot of credit for it, but these things just didn't magically appear when Satya came in. So, a lot of the things they did were right, and it was perceived to be new leadership and therefore they're looking good. >> I love it, 'cause, we had quite a few Microsoft people on the program and a lot of them, 10, 20 years with the company, and they said, it's still the vision that we had but, one articulated it really well, he said, we're even more focused on the customer than ever and that gets me really excited. I want to ask you, when people look at this show, 'cause it's such a broad ecosystem, so many different views, what will they be talking about later in the year? My initial take coming out of it is, I'm a little surprised that we're talking so much about things like Windows 2019 and the Office 365, Microsoft 365, Dynamics 365, obviously it's Microsoft's strength, it's where they've got the most customers but are they operating still relevant in the future? >> I met with the program manager of Windows 29 servers last night, Erin, and she had said that they had 1,300 people they had to turn away from the Windows 2019 server and there was 4,000 people and I flippantly said, oh my gosh, I didn't think Microsoft still did that, it's all as a service, but I was just kidding of course. But I think that that shows the, how long it takes for people to move but I think what we'll be talking about in a year is has Microsoft delivered on its IoT commitments in IoT Azure Central, how much of their business has moved to, I'll call it, on-prem software in a box, to as a service, so, Dynamics 365, Office 365, and then finally I think we're going to see the workflow, and here's something that my head finally went ding on, is, Microsoft's strategy to surround the data and then do workflow on it to supplant Oracle SAP applications around the data. That's what I think we'll be talking about in a year. >> One other specific I wanted to see if you've got some data on because it's something we wanted to understand, Azure Stack, the press, all agog on it for the last couple of years, I really haven't talked to, I've talked to the partners that are working in, you know, people like Intel, Lenovo, and the like that are doing it but I haven't talked to too many customers they've employed service providers, yes, but what are you hearing, what are you seeing, is Azure Stack a big deal or is it just one of the pieces in a multi-cloud data applications strategy that Microsoft has? >> So, Azure Stack is a big deal and I think that it's getting to it's a slow boil, to be honest with you, the company changed hardware strategies, it was first an ODM model and then it went to an OEM model and a very narrow OEM model. The compute requirements to Azure Stack were too big to some people so it's a slow boil, but I look at what has the competition done? Now to be even a public cloud player, you have to have an on-prem capability. With Google it's PKE On-Prem, you have Greengrasss, and Amazon DB that's on-prem sitting on top of Vmware, so hyper-cloud, multi-cloud is a real thing, I just think it's getting a little bit slower start than everybody had thought. >> Great, well Patrick, thank you so much for your insights. These were terrific, it's great having you on the show. >> Thanks for having me. >> I'm Rebecca Knight for Stu Miniman, we will have more from theCUBE's live coverage of Microsoft Ignite in just a little bit. (upbeat music)

(electronic music) >> Live from Orlando, Florida, it's theCUBE! Covering Microsoft Ignite. Brought to you by Cohesity, and theCUBE's ecosystem partners. >> Welcome back everyone to theCUBE's live coverage of Microsoft Ignite here in Orlando, Florida. I'm your host, Rebecca Knight, along with my cohost, Stu Miniman. We're joined by Jeffrey Snover. He is the technical fellow and chief architect for Azure Storage and Cloud Edge at Microsoft. Thanks so much for coming, for returning to theCUBE, I should say, Jeffrey, you're a CUBE alum. >> Yes, I enjoyed the last time. So can't wait to do it again this time. >> Well we're excited to have you. So before the camera's were rolling, we were talking about PowerShell. You invented PowerShell. >> Yeah, I did. >> It was invented in the early 2000's, it took a few years to ship, as you said. But can you give our viewers an update of where we are? >> Yeah, you know, it's 2018, and it's never been a better time for PowerShell. You know, basically the initial mission is sort of complete. And the mission was provide sort of general purpose scripting for Windows. But now we have a new mission. And that new mission is to manage anything, anywhere. So we've taken PowerShell, we've open sourced it. It's now running, we've ported it to macOS and Linux. There's a very large list of Linux distributions that we support it on, and it runs everywhere. And so, now, you can manage from anywhere. Your Windows box, your Linux box, your Mac box, even in the browser, you can manage, and then anything. You can manage Windows, you can manage Linux, you can manage macOS. So manage anything, anywhere. Any cloud, Azure, or AWS, or Google. Any hypervisor, Hyper-V or VMware, or any physical server. It's amazing. In fact, our launch partners, when we launched this, our launch partners, VMware, Google, AWS. Not Microsoft's traditional partners. >> That's great to hear. It was actually, one of the critiques we had, at the key note this morning, was partnerships are critically important. But felt that Satya gave a little bit of a jab towards, the kind of, the Amazon's out there. When we talk to customers, we know it's a heterogeneous, multi-cloud world. You know, you work all over the place, with your solutions that you had. There's not, like, Azure, Azure Stack, out to The Edge. The Edge, it is early, it's going to be very heterogeneous. So connect the dots for us a little. You know, we love having the technical fellows on, as to, you go from PowerShell, to now this diverse set of solutions that you work on today. >> Yeah, exactly. So basically, from PowerShell, they asked me to be the chief architect for Windows Server. Right, because if you think about it, an operating system is largely management, right? And, so, that's what I did, resource management. And, so, I was the chief architect for that, for many years, and we decided that, as part of that, we were developing cloud-inspired infrastructure. So, basically, you know, Windows Server had grown up. You know, sort of focused in on a machine. Azure had gone and needed to build a new set of infrastructure for the cloud. And we looked at what they were doing. And they say, hey, that's some great ideas. Let's take the ideas there, and put them into the general purpose operating system. And that's what we call our software-defined data center. And the reason why we couldn't use Azure's directly is, Azure's, really, design center is very, very, very large systems. So, for instance, the storage stamp, that starts at about 10 racks. No customer wants to start with 10 racks. So we took the inspiration from them and re-implemented it. And now our systems can start with two servers. Our Azure Stack systems, well, so, then, what we decided was, hey, this is great technology. Let's take the great cloud-inspired infrastructure of Windows Server, and match it with the Azure services themselves. So we take Azure, put it on top of Windows Server, package it as an appliance experience, and we call that Azure Stack. And that's where I have been mostly focused for the last couple of years. >> Right, can you help us unpack a little bit. There's a lot of news today. >> Yes. >> You know, Windows 2019 was announced. I was real interested in the Data Box Edge solution, which I'm sure. >> Isn't that crazy? >> Yeah, really interesting. You're like, let's do some AI applications out at the Edge, and with the same kind of box that we can transport data. Because, I always say, you got to follow customers applications and data, and it's tough to move these things. You know, we've got physics that we still have to, you know, work on until some of these smart guys figure out how to break that. But, yeah, maybe give us a little context, as to news of the show, things your teams have been working on. >> Yeah, so the Data Box Edge, big, exciting stuff. Now, there's a couple scenarios for Data Box Edge. First is, first it's all kind of largely centered on storage and the Edge. So Storage, you've got a bunch of data in your enterprise, and you'd like it to be in Azure. One flavor of Data Box Edge is a disk. You call us up, we send you a disk, you fill up that disk, you send it back to us, it shows up in Azure. Next. >> A pretty big disk, though? >> Well, it can be a small disk. >> Oh, okay. >> Yeah, no, it can be a single SSD, okay. But then you can say, well, no, I need a bunch more. And so we send you a box, the box is over there. It's like 47 pounds, we send you this thing, it's about 100 terabytes of data. You fill that thing up, send it to us, and we upload it. Or a Data Box Heavy. Now this thing has a handle and wheels. I mean, literally, wheels, it's specially designed so that a forklift can pick this thing up, right? It's like, I don't know, like 400 pounds, it's crazy. And that's got about a petabyte worth of storage. Again, we ship it to you, you fill it up, ship it back to us. So that's one flavor, Data Box transport. Then there's Data Box Edge. Data Box Edge, you go to the website, say, I'd like a Data Box Edge, we send you a 1u server. You plug that in, you keep it plugged in, then you use it. How do you use it? You connect it to your Azure storage, and then all your Azure storage is available through here. And it's exposed through SMB. Later, we'll expose it through NFS and a Blob API. But, then, anything you write here is available immediately, it gets back to Azure, and, effectively, it looks like near-infinite storage. Just use it and it gets backed up, so it's amazing. Now, on that box, we're also adding the ability to say, hey, we got a bunch of compute there. You can run IoT Edge platforms. So you run the IoT Edge platform, you can run gateways, you can run Kubernetes clusters on this thing, you can run all sorts of IoT software. Including, we're integrating in brainwave technology. So, brainwave technology is, and, by the way, we'll want to talk about this a little bit, in a second. It is evidence of the largest transformation we'll see in our industry. And that is the re-integration of the industry. So, basically, what does that mean? In the past, the industry used to be, back when the big key players were digital. Remember digital, from DEC? We're all Massachusetts people. (Rebecca laughs) So, DEC was the number one employer in Massachusetts, gone. IBM dominant, much diminished, a whole bunch of people. They were dominant when the industry was vertically integrated. Vertically integrated meant all those companies designed their own silicone, they built their own boards, they built their own systems, they built their OS, they built the applications, the serviced them. Then there was the disintegration of the computer industry. Where, basically, we went vertically integrated. You got your chips from Intel or Motorola. The operating system, you got from Sun or Microsoft. The applications you got from a number of different vendors. Okay, so we got vertically integrated. What you're seeing, and what's so exciting, is a shift back to vertical integration. So Microsoft is designing its own hardware, right? We're designing our own chips. So we've designed a chip specially for AI, we call it a brainwave chip, and that's available in the Data Box Edge. So, now, when you do this AI stuff, guess what? The processing is very different. And it can be very, very fast. So that's just one example of Microsoft's innovation in hardware. >> Wow, so, I mean. >> What do you do with that? >> One of the things that we keep hearing so much, at this conference, is that Microsoft products and services are helping individual employees tap into their own creativity, their ingenuity, and then, also, collaborate with colleagues. I'm curious about where you get your ideas, and how you actually put that into practice, as a technical fellow. >> Yeah. >> How do you think about the future, and envision these next generation technologies? >> Yeah, well, you know, it's one of those things, honestly, where your strength is your weakness, your weakness is your strength. So my weakness is, I can't deal with complexity, right. And, so, what I'm always doing is I'm taking a look at a very complex situation, and I'm saying, what's the heart of it, like, give me the heart of it. So my background's physics, right? And so, in physics, you're not doing, you're looking for the F equals M A. And if you have that, when you find that, then you can apply it over, and over, and over again. So I'm always looking at what are the essential things here. And so that's this, well, you see a whole bunch of confusing things, like, what's up with this? What's with this? That idea of there is this narrative about the reintegration of the computer industry. How very large vendors, be it Microsoft, or AWS, are, because we operate at such large scales, we are going to be vertically integrated. We're developing our own hardware, we do our own systems, et cetera. So, I'm always looking for the simple story, and then applying it. And, it turns out, I do it pretty accurately. And it turns out, it's pretty valuable. >> Alright, so that's a good set up to talk about Azure Stacks. So, the value proposition we heard, of course, is, you know, start everything in the cloud first, you know, Microsoft does Azure, and then lets, you know, have some of those services in the same operating model in your data center, or in your hosting service provider environment. So, first of all, did I get that right? And, you know, give us the update on Azure Stack. I've been trying to talk to customers that are using it, talking to your partners. There is a lot of excitement around it. But, you know, proof points, early use cases, you know, where is this going to be pointing towards, where the future of the data center is? >> So, it's a great example. So what I figured out, when I thought about this, and kind of drilled in, like what's really, what really matters here? What I realized was that what the gestalt of Azure Stack is different than everything we've done in the past. And it really is an appliance, okay? So, in the past, I just had a session the other day, and people were asking, well, when are you going to, when is Azure Stack going to have the latest version of the operating system? I said, no, no, no, no, no. Internals are internal, it's an appliance. Azure Stack is for people who want to use a cloud, not for people who want to build it. So you shouldn't be concerned about all the internals. You just plug it in, fill out some forms, and then you use it, just start using it. You don't care about the details of how it's all configured, you don't do the provisioning, we do all that for you. And so that's what we've done. And it turns out that that message resonates really well. Because, as you probably know, most private clouds fail. Most private clouds fail miserably. Why? And there's really two reasons. There's two flavors of failure. But one is they just never work. Now that's because, guess what, it's incredibly hard. There are so many moving pieces and, guess what, we learned that ourselves. The numbers of times we stepped on the rakes, and, like, how do you make all this work? There's a gazillion moving parts. So if any of your, you have a team, that's failed at private cloud, they're not idiots. It's super, super, super hard. So that's one level of failure. But even those teams that got it working, they ultimately failed, as well, because of lack of usage. And the reason for that is, having done all that, they then built a snowflake cloud. And then when someone said, well, how do I use this? How do I add another NIC to a VM? The team that put it together were the only ones that could answer that. Nope, there was no ecosystem around it. So, with Azure Stack, the gestalt is, like, this is for people who want to use it, not for people who want to build it. So you just plug it in, you pick a vendor, and you pick a capacity. This vendor, four notes, this vendor 12 or 16 notes. And that's it. You come in, we ask you what IP range is, how do I integrate with your identity? Within a day, it's up and running, and your users are using it, really using it. Like, that's craziness. And then, well what does it mean to use it? Like, oh, hey, how do I ad a NIC to a VM? It's Azure, so how does Azure do it? I have an entire Azure ecosystem. There's documentation, there's training, there's videos, there's conferences. You can go and put on a resume, I'd like to hire someone with Azure skills, and get someone, and then they're productive that day. Or, and here's the best part, you can put on your resume, I have Azure skills, and you knock on 10 doors, and nine of them are going to say, come talk to me. So, that was the heart of it. And, again, it goes back to your question of, like, the value, or what does a technical fellow do. It's to figure out what really matters. And then say, we're all in on that. There was a lot of skepticism, a lot of customers like, I must have my security agent on there. It's like, well, no, then you're not a good candidate. What do you mean? I say, well, look, we're not going to do this. And they say, well you'll never be able to sell to anyone in my industry. I said, no, you're wrong. They say, what do you mean, I'm wrong? I say, well, let me prove it to ya, do you own a SAN? They say, well, of course we own a SAN. I said, I know you own a SAN. Let me ask you this, a SAN is a general purpose server with a general purpose operating system. So do you put your security and managing agents on there? And they said, no, we're not allowed to. I said, right, and that's the way Azure Stack is. It's a sealed appliance. We take care of that responsibility for you. And it's worked out very, very well. >> Alright, you got me thinking. One of the things we want to do is, we want to simplify the environment. That's been the problem we've had in IT, for a long time, is it's this heterogeneous mess. Every group did their own thing. I worry a multi-cloud world has gotten us into more silos. Because, I've got lots of SAS providers, I've got multiple cloud providers, and, boy, maybe when I get to the Edge, every customer is going to have multiple Edge applications, and they're going to be different, so, you know. How do you simplify this, over time, for customers? Or do we? >> Here's the hard story, back to getting at the heart of it. Look, one of the benefits of having done this a while, is I've stepped on a lot of these rakes. You're looking at one of the biggest, earliest adopters of the Boolean cross-platform, Gooey Framework. And, every time, there is this, oh, there's multiple platforms? People say, oh, that's a problem, I want a technology that allows me to bridge all of those things. And it sound so attractive, and generates a lot of early things, and then it turned out, I was rocking with this Boolean cross-breed platform. I wrote it, and it worked on Mac's and Windows. Except, I couldn't cut and paste. I couldn't print, I couldn't do anything. And so what happens is it's so attractive, blah, blah, blah. And then you find out, and when the platforms aren't very sophisticated, the gap between what these cross-platform things do, and the platform is not so much, so it's like, eh, it's better to do this. But, over time, the platform just grows and grows and grows. So the hard message is, people should pick. People should pick. Now, one of the benefits of Azure, as a great choice, is that, with the other guys, you are locked to vendor. Right, there is exactly one provider of those API's. With Azure, you can get an implementation of Azure from Microsoft, the Azure Public Cloud. Or you can get an implementation from one of our hardware vendors, running Azure Stack. They provide that to you. Or you can get it from a service provider. So, you don't have to get, you buy into these API's. You optimize around that, but then you can still use vendor. You know, hey, what's your price for this? What's your price for that, what can you give me? With the other guys, they're going to give you whatcha give ya, and that's your deal. (Rebecca laughs) >> That's a good note to end on. Thank you so much, Jeffrey, for coming on theCUBE again. It was great talking to you. >> Oh, that was fast. (Rebecca laughs) Enjoyed it, this was great. >> Great. I'm Rebecca Knight, for Stu Miniman, stay tuned to theCUBE. We will have more from Microsoft Ignite in just a little bit. (electronic music)

>> Live from San Francisco, it's theCUBE covering Google Cloud Next 2018. Brought to you by Google Cloud and it's ecosystem partners. >> Welcome back everyone. This is theCUBE live coverage of Google Cloud Next '18 in San Francisco. I'm John Furrier with Jeff Frick. We're at day three of three days of wall-to-wall coverage. Go to SiliconANGLE dot com on theCUBE dot net. Check out the on demand videos and the Cloud series special journalism report that we have out there, tons of articles, tons of coverage of Google Next with the news, analysis and opinion, of course, SiliconANGLE. Our next guest is Indranil Chakraborty, Project Manager for IoT Google Cloud. Certainly IoT part of the network part of the Cloud, one of the hottest areas in Cloud is IoT. We've been seeing that. Welcome to theCUBE. >> Thank you. >> Thanks for joining us. IoT is certainly the intersection of a lot of things: Cloud, data center, A.I., soon to be, you know, cryptocurrency and blockchain coming down, not for you guys, but in general those are the big hottest areas. >> IOT is not like, you can't say it's an IoT category, so IoT has to kind of sit in the intersection of a lot of different markets that are kind of pure playing. >> So I first want you to explain to the folks out there watching, what is the Google IoT philosophy? What is the products trying to do? And what are guys announcing here? >> Absolutely. Thanks for having me here, it's really great to be here. And if you think about IoT, and if you think about what we have on Google Cloud, we already have a great set of service for data storage, processing, and machine intelligence. Right, so we have Cloud Machine Learning Engine, we have an on start ML. So most of those data processing and intelligence services are already there. What we announced last year was Cloud IoT Core, which is our fully-managed service for our customers and partners who easily and securely connect their IoT devices to Google Cloud, so they can start transmitting data and then ingest and store in the user downstream services for analysis and machine intelligence. >> I mean, IoT is a great use case of Cloud because one, Cloud shows that you can be incented to collect data. >> Right. >> Cuz now you have the lower cost storage, You've got machine learning, all these things are going on. It's great. >> Exactly. >> But Iot is now the Edge of the network. You've got sensors. You've got cars, like Teslas, people can relate to. So everything's coming online has, not just an IP connection, anything that's a sensor. The IoT's been just evolving. What is the Edge to you guys? What does that mean when I say IoT Edge? What is Google view of the Edge? >> Yeah absolutely, it's a great question. You know, we identified early on the emergent trend of moving compute and intelligence to the edge and close to the device itself. So this week, as you already know, we've announced two products for Edge. One is Cloud IoT Edge, which is a software stack which can run on your gateway device, cameras, or any connected device that has some compute capabilities, which extends that powerful AI and machine learning capabilities of Google Cloud to your Edge device. And we also announced Edge TPU, which is a Google designed high performing chip for to run machine learning inference on the Edge device itself. And so with the combination of Cloud IoT Edge as a software stack and with our Edge TPU, we think we have an integrated machine learning solution for on Google Cloud platform. >> How does that get rolled out? So the chip, I'm assuming, you're doing OEM or deals with manufacturers. Same with the software stack. Is the software stack portable? Explain how you roll those out. >> Yeah, you know we are big into working with our ecosystem and we really want to build a robust part of ecosystem. So we are working with semiconductor companies, such as NXP and Arm, who will build a system-on-module using our Google Edge TPU, which can then be used by gateway device makers. So we have partnership with Harting, Nokia, NEXCOM. We're going to take those SOM, add it to their gateway devices, so to take it to the market. We're also working with a lot of computing companies, such as ADLINK, Acton, and a couple of others, Olya. So they can build an analytic solution using our Cloud IoT Edge software and Edge TPU to combine with the rest of Cloud IoT platform. So we're pretty excited about the partners. >> But every coin has two sides, right? So the kind of knock on the Edge is, now you're attack surface on the security side is growing exponentially. So clearly, security is an important part of what you guys do. And now this is kind of a different challenge when you're now, your point to presence is not like our point to presence, but are going to expand exponentially to all these connected autonomous devices. >> Yep, that's a great point. And you know, we take security very seriously. In fact, last year when we announced Cloud IoT Core, we reject any connection that doesn't use TLS, number one, right? And number two, we individually authenticate each and every device using an asymmetry keypad. In addition to that, we've also announced partnership with Microchip. So Microchip has built this microcontroller crypto, which can have the private key inside the crypto, and we use JWT token that was signed by inside the chip itself. So your private key never leaves the chip at all. So that's one additional reinforcement for security. So we have end to end security. We make sure that the devices are connecting over TLS, but we also have hardware root of trust on the Edge device as well. >> The token model is interesting. Talk about blockchain because you know, David Floy on our analyst team, he and I are constantly riffing on that. IoT actually is interesting use case for blockchain and potentially token economics. How do you guys view that? I know that you just mentioned that this is kind of a thing there. Does it fit in your vision at all? What's your position on how that would work out? >> You know, we are closely looking at the blockchain technology. As of today, we don't have anything specific to announce in terms of a product perspective, but we do have, we do use JSON web token, which is standard on the web, use to sign those using our private keys. So that works beautifully, but we're closely monitoring and looking at it. We don't have anything to announce today. >> Not yet, but they're going to share that. Their research is working on it, interesting scenario. So in general, benefits to customers who're working with IoT, your team, cuz you have the core, you have the chip, you have the software stack. There's always an architectural discussion depending upon the environment. Do you move the compute to the data? Do you move the data to the Cloud? What's the role of data in all this cuz certainly you got the processing power. What's the architectural framework and benefits to the customers who are working with Google. >> Yeah, so let's make a specific example, LG CNS. They want to improve their productivity in the factory, and what they've done is they've built a machine learning model to detect defects on their assembly line using Cloud machine learning engine. And they've used this one engineer a couple of weeks and they would train the model on Cloud. Now with Cloud IoT Edge and the Edge TPU, they can run that train model locally on the camera itself, so they can do realtime defect analysis at a pretty fast moving assembly line. So that's the model which we are working on where you use Cloud for high compute for training, but you use the Edge TPU and the Cloud IoT Edge for local inference for real time detection as well. >> How do you guys look at the IoT market because depending on how you're looking at it, you can look at smart cities, you can look at self-driving cars? There's a huge aperture of different use cases. It could be humans with devices, also you guys have Android, so it's kind of a broad scope. You guys got to kind of have that core tech, which it sounds like you're putting in the center of all this. How do you guys look at that? How do you guys organize around that? I think Ann Green mentioned verticals, for instance, is there different verticals? I mean, how do you guys go at that mark with the product? >> IoT is a nation market. And what we offer as Google Cloud, is a horizontal platform, what we call it is Cloud IoT platform, which has got Cloud IoT core on the Cloud side, Cloud IoT Edge, the Edge TPU. And we really want to work with our partners our solution integrators and ISVs, to help build those vertical applications. And so we're working with partners on the healthcare side, manufacturing. We have Odin Technology as one of the partner to really build this vertical up. >> You guys are not going to be dogmatic, this is how our IoT sleeve. You're going to let a thousand flowers bloom kind of philosophy. Put it out there, connect, and let the innovation happen with the ecosystem. >> Yeah, we really believe in driving, moving the, having robust ecosystem. So we want to provide a horizontal platform, which really makes it easy for partners and customers to build vertical solutions. >> Another kind of unique IoT challenge, which you didn't have in the past, we've all seen great pictures of the inside of Google Data Centers. They're beautiful and tight and lots of pretty pictures, very different than out in a minefield or a lot of these challenging IT environments where power could be a challenge. The weather could be a challenge. Connectivity to the internet could be a challenge. Obviously, and then you need to power them. When you talk about how much store do you have locally, how much compute do you have locally. So as you look at that landscape, how has that shaped your guys' views? What are some of the unique challenges that you guys have faced? And how are you overcoming some of those? >> Yeah, that's a great question and this is one of the primary reasons why we announced Cloud IoT Edge, which is software stack, and Edge TPU. So that for use cases where you have limited connectivity, oil wells or farm field, windmills. Connectivity is limited, and you cannot rely on connectivity for reliable operations. But you can use Cloud IoT Edge with our partner device ecosystem to run some of the compute locally. You can store data locally. You can analyze locally, and then push some of the incremental data to the Cloud to further update your model in the Cloud. So that's how we were thinking about this. We have to have some compute locally for those reasons. >> Release the hard coupling, if you will. So it's really got to be a dynamic coupling based on the situation, based on the timing, maybe. >> Exactly. >> Schedule updates, and these type of things. So it's not just connected. >> Exactly. It doesn't need to be continuously connected, right? As long as there's enough connectivity to download some of the updated model, to download the latest firmware and the software. You can run local compute and local machine learning inference on the Edge itself. That's the model we're looking at. So you can train in Cloud, push down the updates to the Edge device, and you can run local compute and intelligence on the device itself. >> A lot of conscious we've been having lately has been about, how do you manage the Edge, has been an area of discussion. Why I want to have a multi-threaded computer, basically, on a device that could be attacked with malware, putting bounds around certain things. You need the IP there. You want to have as much compute, obviously, we'd agree. But there's going to be policies you're starting to think about. This is where I think it gets interesting when you look at what's going on at the abstractions up the stack that you guys are doing. How does that kind of thinking impact some rollouts of IoT because I'm looking to imagine that you won't have policies. Some might trickle data back. It might not be data intensive. Some might want more security. Containers, all this kind of tying in. Is that right? Am I getting that right? How do you see that happening? >> So when you think about Edge, there are different layers. There are different tiers. There are the gateway class devices, which has high compute, and all the way to sensors. Our focus really is on the Edge devices, which has some decent compute capabilities and you can scale up to high-end devices as well. And when you think about policies, on the Cloud side, we have IM policies, so you can define roles, and you can define policies, based on which you can decide which devices should get what software or which user should get access to particular data types as well. So we have the infrastructure already, and we're leveraging that for the IoT platform. >> Yeah, and automate a lot of those kind of activities as well. >> Exactly. >> Alright, so I got to ask you about the show. What's some of the cool things you're seeing, for the folks that couldn't make it that are watching this video live and on demand. What's happening here at Google? What's the phenomenon Google Cloud? What are some of the hot stories? What's the vibe? What are the cool things that you are seeing? >> Absolutely. So I'm biased, so I'm going to start with IoT. You know, we have an IoT showcase where we have a pedestal where we're showing the Edge TPU and the Edge TPU board as well. And there is a lot of work which is happening there. There's a maintenance team there as well, so I would highly encourage attendees to go check it out. >> What are people saying about that? The demos and the sessions, what are some of the feedback? Share some color commentary around reactions. >> Yeah, we've been getting a lot of positive reactions. In fact, we just had a couple of breakout sessions, and a lot of interest from partners across the board to engage with us. So we are pretty excited with our announcement on the Edge side. The whole orchestration of training model in the Cloud and then pushing it down and then sending updates, that's where it really makes it easy for a lot of the partners. So they're excited about it as well. >> They're going to make some good money with it too. You guys are making the mark, and not trying to go too far. Laying the foundational work, the horizontal scale. >> Yes, exactly. And we really focused, for the Edge TPU, we really focused on performance per dollar and performance per watt. And so that has been what we are striving to really have high performance for lower cost. So that's what we're targeting. And a couple of other things, the whole server-less capabilities, and the fact that Cloud functions have become GA, is pretty exciting. And Cloud IoT Core is also a fully managed server-less architecture in a machine. The AI and auto ML which we announced with NLP and text and speech is pretty exciting as well. And that works very well with some of our IoT use cases as well. So I think those are a couple of announcements, which I'm pretty excited about. >> Yeah, I think the automation theme too, really resonated well on all that. Cuz what comes out of that is, humans still got to be more proficient in doing the new stuff, but also they got to run this. And you've got developers enough to build apps that drives value, so you got the value development with the applications, and then also the operational side, which is, I don't want to say becoming generic, but it's not specialized as used to be. Network operator, this guys does this, this gal does that. I mean, it used to be very stove piped. Now it's much more of a how do you run the environment? >> Exactly, and to your point, even on the IoT space, it's also very relevant. I mean there are a lot of overlaps between what used to be just devops and OTE and IT. There are a lot of overlaps there. And so we're looking at it closely as well to make sure that we can really simplify the overall requirement and the tooling which is needed for building an IoT solution. >> For the people that are not following Google as closely as say we are, for instance, they're not inside the ropes, inside the baseball, if you will, in the industry. See Google Cloud, they know Google as Gmail, search, et cetera. They look a couple years ago, Google Cloud had app engine, the OG of Google Cloud, as it's called. What would you say to the folks now that are watching? What's different about Google Cloud now, and what should they know about Google Cloud that they may not know about. What would you say to that person? >> Absolutely, and the first thing is we are very serious about enterprise. You can see here the number of attendees who have come here and how we have multiple buildings where we organized the conference. We're very serious over enterprise. Second, back in the days, two years back, we were really focused on building products, which works for specific use cases. We didn't think about end to end solution, but now the focus has changed. And we're really thinking about, we always had the technology with packaging the products, and now we're thinking about providing end to end solutions, the framework where for a business user, enterprise user, they can just take the solution, and they know it will work. Alright, so there's been a lot of focus on that. And our key differentiator is about machine intelligence and AI, right? That's where Google thrives. We've been spending a lot of time on it, and now we're focused on democratizing AI. Not just on the Cloud, but also on the Edge with the announcement of HTPU. >> And I really think you guys have done a good job with the mindset of making it consumable. In an end to end framework with the option. We've got Kubernetes, and Container's been around for a while, but it's working with multiple environments. I think that is a real mindset shift. >> Exactly. >> So congratulations. >> Thank you. >> Thanks for coming on, appreciate it. >> Absolutely, was great having you guys. >> Google IoT, just plug into the Google Cloud. It'll suck all your data in. Give you some compute at the Edge. Open it up to partners, really focusing on the ecosystem and enabling new types of functionality. It's theCUBE, bringing you the data here on day three at Google Cloud Next '18. We'll be right back with more coverage. Stay with us after this short break. (modern music)

>> (dramatic orchestral music) >> Announcer: Live from San Francisco. It's the Cube. Covering Red Hat Summit 2018. Brought to you by Red Hat. >> Hello welcome back everyone. Day three of wall-to-wall coverage here at Red Hat Summit 2018 live in San Francisco, California, here at Moscone West. I'm John Furrier, your co-host of The Cube with John Troyer, analyst, co-host this week. He's the co-founder of TechReckoning, and advisory and community development firm. Our next guest is our (mumble) of the senior Vice President General Manager of Hewlett Packard Enterprises Pointnext HPE. Great to see you. >> Great to see you as well. Thank you. >> So there's not secret HPE been partnering with companies for many generations. And Red Hat is one of the big strategic partners. Lot of services opportunity, a lot of transformation happening, and the biggest thing is that true Private Cloud and Hybrid Cloud, and Public Clouds all happening an IOT Edge is kind of seeing pretty clearly what's happening. On-Premise isn't going away. >> No! >> It'll look like Cloud is going to run like a Cloud. >> Yeah. >> Has to work with the Cloud or Clouds plural, and then you got the IOT Edge out there-- >> That's right. >> All kind of coming together with software Kubernetes containers all kind of being glue layers in here. So, you know, must be good for you guys okay, customers can now see what you guys have been promoting. So what is HP doing with their ad? How's that tie into that-- >> Sure, sure >> You know, transformation with the cloud? >> You said it very well John. In fact when we talked to our customers weather they realized it or not, it's the Hybrid world, and the environments are hybrid, and like you said, probably private (mumble) are not going anywhere. In fact we did the CTPF acquisition, Red Pexia acquisition, and this is really all to help clients on the Cloud journey. Doesn't really matter to us whether the workload ends up in AWS, Google, Azure, on Prime or dedicated infrastructure. So, that's actually been a huge plus for us to really have a seat at the table, to have a discussion on the customers workload strategy. Now a partner like Red Hat, who have been together working together for probably 18 years now, and it's been a long steady partnership. Who they're number one OAM partner but also the point you made I think from a services standpoint that's just a huge opportunity you know, customers tell us anyone can do infrastructure service or they're looking for platforming service. So in jointly with our consumption capabilities, and Red Hat Open Shift. Now who giving them true Container Product Service. >> Containerization, how we were talking yesterday in our wrap-up. You can bring in the new without killing the old and but it's really fundamental because people want Cloud scale, they want the horizontal scalable application, devops and programing infrastructures code. But they can't just throw out their legacy stuff. Containers which allows them to nurture those applications and workload, and let it take it's natural course. This is actually good for services cause you can take-- there's a solution there. >> That's right! There's absolutely. In fact customers tell us when they looking for the platform, it's not just to help them on their new build. They're looking for help also to run the existing environment and most of the times it's not practical to re-factor, re-architect every single of the Legacy applications, and cause some of them applications, as you know, they were done to leverage the performance optimization on the underlying infrastructure piece of it, and so one of the things we're doing join to the Red Hat is leverage Containerization to provide the portability for the applications. To move between the different environments and whether it's Private Cloud, Public Cloud, but the key thing is portability, and mobility and that's sweet spot for containerization. >> Give some use cases of customers. Take us through a day-in-the-life of maybe a couple different examples where you guys are engaging with Red Hat where you coming in the customer is like, "Okay, here's my situation". What are some of the trends and patterns that you see with customers? What specifically are you, is it workload, moving it to the mobile clouds? Is it more re-platforming On-Premise. >> Yeah! >> What are some of the things that you guys are doing? >> I would say that the bulk of our engagement, and that's one thing that we feel really good about joining Red Hat. We have really shifted our engagement model to be much more outcome driven. So the discussions with the client is always start off with like a workshop, and within that workshop we're actually understanding where the customer is really trying to go, what business outcomes they're trying to achieve? Before we start we going to push a specific technology or stack with specific solution set, and by having that alignment, in in fact, we talk about that IT means to be embedded with the business. Not alignment, embedded with the business, and because the role of IT has changed. So when we talk about workload, right, it's about no longer, and I talked about this earlier today, you no longer running workload just within the Forward Data Center, and the traditional view of that IT owns and operates the Forward Data Center, that's just dead. So, it's really more about managing the supply chain. We talk about the overall workload strategy. Which workloads make the most sense to go on Public Cloud, Private Cloud, and then the discussion also centers around their application portfolio and really understanding which applications truly need to be Cloud Native. Which ones really need to be left in shift, and this whole portability concept comes into play and that's one thing joining with Red Hat because Red Hat is really good joining with us on driving this kind of innovation workshops. Then you heard this earlier today as well, and that's just the fun of if. When no longer you talking about PowerPoint presentation, this and that. It's getting in a room, getting on a White Board and talking about what kind of journey really make sense for that party-- >> That's been really notable here, this week at this conference, right. There a lot of tech, a lot of software talked about, but also on the keynote a lot of people talking about culture, transformation, getting beyond your process, and the places you get stuck as IT professionals. So that's a great way to approach it. Right, nobody starts with a list of skews-- >> No! And absolutely, the other point is that one of the things that always gets missed is the focus on the management of change, and that's one of the key pieces we emphasize that not just the business process, but the culture, the people. How you going to bring them along the change journey. So, we actually put lot of emphasis on the whole area around management of change. We actually have a practice that this is one of the keys areas they focus on. So, you're absolutely right. Key focus area. >> I did want to flip to the products for a second. There was an announcement here now and talk a little bit about HP Synergy, Composable Infrastructure, with Open Shift. Maybe if you have a headline on exactly how you guys describe Synergy and then maybe how we working with Open Shift. >> So the HP Synergy the best way I can describe it is it is truly industry first composable infrastructure, and it gives you the ability to pull fluid resources and with software intelligence built in, and Unified API. It really gives you the ability to pull the resource that you need for specific applications. In fact, I use the analogy, it's kind of like building Legos and you can pull together based on what you going to do at a given moment, and then you decompose it and build something new. So it's all done via a software and truly gives you that flexibility that customers have been seeking. So it's just to me its got a great market traction across the globe and we'll just see continued momentum when joining with the Red Hat. What we've done is now with the announcing new solutions like the one you referenced to, to support ansible automation of the Red Hat Open Shift on the Synergy platform from the three part and the Nimble product lines and it just helps scale the Open Shift and while making container operation simple, scalable and more importantly repeatable. >> I want to make sure that I get this out there, because you guys were early with composable. Dave Valata and I had a debate on this at one of your HP Discovers where, I was really lov'n the composable message. Although it was kind of for a different massage but at that time Devos was really picking up steam. But, it's actually happening now three years later the level of granularity to services level as microservices as it comes the architecture of the future. The services model is literally, "What do you want?" it's not, "Here's the solution", it's like< "What do you need?" so, you're buying off the menu, if you will, so that changes the game. So congratulations on having that composable method first. I got to ask you, the impact to the engagements. So you now have menu of services. Does that change how you guys go to market? You mention that you do kick of meeting, you do the needs assessment, so I get that. Check! good approach. But the customers now, they just want to make sure that it's custom for them. How does that change your engagement? >> At the CXO level, the discussion, no mater which way you start the discussion it tends to kind of follow into a few buckets. Rather it's about generating additional revenue, going to market quicker, or it's about safe to invest, reducing their operating expenses, or it's about securing their information network. One of the thing we find is especially if you take a look at even the containers, applications deploying it. It's one thing to deploy in the corporate environment but if you're trying to scale that with an enterprise. If the enterprises look for added features for their security, whether it's persistent storage and again the focus always turns into what can you do to help drive the total cost of ownership down. I think with Red Hat this is one thing that works great with Open standards. The focus is really much more around not just the simplicity, reducing costs, it's also about improving performance. Rather it's the physical virtual environment. So, you're right, the menu of services. Whether it's you talking about IOT Use Scape and I think you going to see more and more of that with the user experience, the focus that we talked about. Context of our apps. I use the example of going to the airport, getting into whatever transportation you using these days, but the point from point A to point B, you're no longer fumbling through cash or credit cards. It's a very easy experience, much more personalized much more usable and a lot of what some of the hospitality franchises are doing, whether you look at Starwood Properties, Marriott. Now you use a mobile device to access your room, and as soon as you get into some of the hotel property, as soon as you access their Wifi coverage all of a sudden you can actually, the hotel property picks you up. They can provide you with the navigation, how to get to your room and depending on your profile, and whether you opted in or opted out, they will push and their partners will push some specific services to you. So, how you are able to create that kind of experience and drive additional revenue and all that is possible to the point he just make, it's truly a flourishing eco-system of micro services and apps driven by the-- >> I think that business now seeing that which is great about that having a clear line of site that these new apps and new experiences is going to drive top line revenue for your customers. I got to ask you about the services now. With more services comes more delivery, right? So, options, ecosystems, you guys have a pretty big ecosystem right as a lot of other providers. You guys always worked will with multiple companies. How are you guys engaging with Pointnext with now new sets of service providers and your network. You got Cloud Service and you have someone actually maybe could be an intergrater, could be a software developer. How do you deal with this new stake holder in your equation? >> After all the spin mergers have been completed now and I think after DXC1 it really open up the door to get a lot of the system (mumble) back on the table because they don't really view us as competitor anymore. Because we no longer have a large the EDS acquisition that we had now the DXE. So whether you look at Accenture or whether you look at Deloitte and the other (mumble) we're actually partnering with them very well both in joint submission creation but also when we talk about true additions transformation for our client a lot of expertise they bring to us is very complimentary to what we have. So one of the thing we do very well is really around the technology advisor services. (mumble) bring more of the business advisory services as well as the specific vertical depth around the specific vertical whether it's emphasized retail. So when somebody talking about retail of the future or something like that. You marry the two together and you have a strong value proposition. I think the area that we have to put a lot more emphasis upon is more around program management, and because now you actually are trying to show that one outcome for the client, so it's very important whether you working with the ISB or whet ever you working with DSI or whether you working with the other intergraters, and your own resources how you going to bring that pool together around specific tracks and deliver a one common objective for the clients? The Program Manager plays a huge role in this process. >> For the folks watching. What should they know about HP Pointnext that they many or may not know about or should know about that that highlights what you guys are doing. Can you simplify, what is the value proposition that Pointnext is bring to customers? >> As the brand itself states, the Pointnext, it's really about working with the clients finding what's next in their journey. One of the thing I would say and a lot of people get surprised by this, even with after all the spin merge. We are twenty-five thousand people plus strong and we have a lot of great and deep appreciation when it comes to some of these solution and one thing we do very well is partner. Whether it's Red Hat and other SI and bring some unique innovative solution to the market and one of the thing Jim talked about here is all about accelerating user driven innovation, and when you take a look at some of the use cases we're rolling out and I talked about the analytics and the one AI project and how we're helping manufacturing clients or other use cases to truly analyze patterns and predict failures and increase productivity. These discussions customers truly trust us. With the (mumble) and CTP acquisitions we no longer just having On-Premise discussions. We have a strong public hard knowledge. It doesn't matter whether you cloud journey involves AWS, Google, Azure and what not. We are able to actually provide a very objective road map for the workload strategy and the transmission journey. >> The users in the communities as Jim pointed out in the meeting yesterday. The communities in Open Source are now also your customers. >> Right. >> So your customers are also participating in these projects upstream. Are you guys doing an Open Source work? What Pointnext doing? Are you guys relying on that community? Is there a crossover between your customers and those users in the Open Source community? >> Yeah, we always had a very strong (mumble) with the Open Source community. We contributed a lot to the Open Source communities and if you take a look at now as we working with the number of this next generation of partners, whether it's darker, scale it and Red Hat and others it's truly opened up the boundaries as to what can we push to drive new kind of solution there. I love what some of the speakers said yesterday. You remember the example from the Boston Children's Hospital where they talked about they didn't want to deal with the complexity, they'd rather focus on what they do best and so one of the thing we're focused on in the Open Source Continuity is the driving more standardization and automation. So you can run applications as scale. You can run analytics as scale. I think those are somethings we can bring to the table. >> Great! You know the thing about what's going on now with these abstraction layers is an opportunity to create new services and accelerate the services, and congratulations. Great to have you on the program. Thanks for sharing the update. >> Absolutely! >> Congratulation on your deep partnership with Red Hat. Go to see HP Pointnext doing well. Thanks for coming on. >> Thank you so much. >> Live coverage here in San Francisco California. Red Hat Summit 2018 will continue. I'm John Furrier John Troyer. Stay with us more coverage after this short break. >> (electronic music) >> Often times a communities all ready know about facilities that are problematic, because they smell it, they see it but

>> Narrator: Live from Las Vegas, it's The Cube, covering VMworld 2017. Brought to you by VMware, and its ecosystem partners. (upbeat music) >> Hello everyone, welcome back to The Cube's three day coverage of VM World 2017. This is day two. I'm John Furrier, your host, with Wikibon analysts Peter Burris and Stu Miniman. Peter, head of research, Wikibon.com, Stu Miniman, analyst. Guys, and cohost too on stage two, we have two sets. Day one and we've got two more days, Stu. 27 videos, a lot of content, keynote is up. Gelsinger's on stage with Mike O'Dell. Your thoughts? >> Yes, so, John, first of all, last year, you know, we've been doing this show for a lot of years. Last year, the energy was a little off, you know? We talked about on the intro, there's rumors about management change, everything like that? Energy's up. The attendance isn't up much, but, there's a lot of good discussions. People are digging into, kind of this whole, hybrid cloud, multi-cloud world. The keynote this morning, they've got, you know, folks from Google Cloud, up on stage. It's supposed to be the biggest announcement in the platform, in the last four years. I think we'll dig into that some. I'm not sure if it's the biggest announcement. >> Was there an applause? >> There was actually a bigger applause when Andy Jassy got on stage yesterday, than there was when they announced that, you know, VMware and Pivotal are now part of the Cloud Native Container Foundation, so, you know. CNCF, you know, three weeks, a few weeks ago, Amazon joined the CNCF, Microsoft part of the CNCF. Good step. Cubernetti's absolutely hugely important. VM and Pivotal, they'll want to ride that wave, participate in that wave, but, I'm not sure that they're, you know, that the leading edge of it, I like NSX's plugging into it, they're starting to figure out all of those internetworking pieces. But it's not the one I think, you know, we'll come a year from now and say oh, jeez, remember when they announced PKS, That's the thing that really changed the landscape. >> Yeah, I think the Google announcement was a little bit, seemed desperate to me, although very important, I said it's more of a long game on my tweet stream. But I think they try to force that a little bit. Certainly, I personally don't think it was a good move for them to do that at this stage and try to hype it up given the impact that Jassy had. And also Jassy's jab, a little bit, at some of these optical deals, we used to call them Barney deals, named after the cartoon. Barney, you know, they love each other, but no real deal there. Jassy, he's hinting that most of these cloud deals are optical, not a lot of meat behind it, unlike their deal. >> You know, I'm going to be the contrarian in this one, guys. I'm not going to say it's the most important infrastructure deal in the last four years. I think that's very true, Stu. But I will say this: our research when the AWS VMware deal was announced last October, was that it was an important deal, and it was going to have a material impact on the industry. Because it promised a way for a lot of VM customers to get to the cloud. And now we're seeing that happen. But we also observed that it became pretty clear, it was kind of obvious, that AWS had a lot to gain in that. And VMware was, I don't want to say desperate, but VMware was holding on and trying to remain relevant as we go through these transitions. I think a great thing about this conference is that VMware is demonstrating, is transforming. But think about this Google deal. Who gets the most out of this deal? >> John: VMware. >> VMware, but Google needs this really bad. Google really needs that enterprise presence. And VMware is in a great position relative to the Google deal. So VMware has not got a couple of companies that it can kind of-- >> You're shaking your head. >> Yeah, so here's the thing I'd say: while Google Cloud is standing up there, this is not VMware saying use Google Cloud. This is Pivotal and VMware saying we're fully integrated with Cooper Netties, which means that if I have Pivotal and VMware using PKS, it is now fully compatible with GKE. But that is very different from what we're seeing with Amazon. I talked to a VMware and Amazon joint customer this morning and he said I've got my data center. We've been using AWS for four years. And my data center guys are kind of slow. VMware and AWS allows them to be agile. They have the operating model. They have the tools. They like to use this. As opposed to Cooper Netties. That changes. You don't talk to a lot of people at VMware that are like, oh yeah, hey, I'm ready for microservices. I'm going to refactor all my applications. VMware, from day one, was like I'm going to take my applications, I want to, without changing a lot of code, move it in there. So, we've been talking for years on this show. You know, where are the developers? Are they here? Cooper Netties, all about the developers. I didn't hear a strong developer push in the announcement this morning. So, that's where I think it's still very different. >> It's a good conversation. I think Pete is right. Google does need this. But here's the nuance that's kind of in this game. It came from the VMware Cloud Native group. So Cloud Native certainly is strategy for VMware to play. VMware doesn't want to have just Amazon. They need to be multicloud. So-- They need to be multicloud, but I don't think that they should be playing the cards. This is a long game. The Cooper Nettiers that you know and I know, it's really difficult. People want to make it simple. There needs to be cross compatibility on, with application workloads. Very strategic, very important. Not a lot of meat on the bone. Okay, they're shipping commercial version of Google. Big deal. >> Most container implementations are running in a virtual machine. They just are. >> John: Yeah, true. >> This is an important deal for users. And that's the most important thing. >> Potential users that are going to be in the evolution of where this is going. To Stu's point, I think that where this connects is, the conversation here is: I'm just trying to get my act together on the on prim true private cloud. >> We're seeing the industry start to reform. So, again, Stu, you're right. It's not the most important thing in four years. But it's not also something to be-- >> It's a strategic enchant. It's very important. >> But it's also got near term implications. That for anyone who's doing container-based development, is running that whole thing inside of VM, and along comes VMware that says, hey you know what, we're going to bring industrial strength to this. It's a good thing. >> It's a good thing. Again, we all have a good conversation. This is a frothy conversation. I love it. Which means it's relevant to you guys out there. I think its timing is interesting. Again, I would have done a strategic play on this one. I would have done a strategic intent. The shipping stuff, okay cool. But you guys are on it. We will be monitoring it. Peter, I've got to ask you the question, and let's kick off Day Two. You guys have been beavering away for two days now here in analyst sessions, meeting all the executives, what's your observation? What's your take away so far? >> Well, the thing that we talked about, we did the wrap up yesterday, and now the analyst day came a couple of things. The first thing I'll say is that: when you pull back the covers of any new VMware initiative, increasingly you find NSX staring back at you. And it didn't used to be that way. So, increasingly, you're finding that NSX is becoming that kind of crown jewel. And that plays into this notion of VMware wanting to be the multicloud orchestrator using NSX as kind of a cross-multicloud technology. The second thing is that it's always interesting to observe how software technology, we talk about software technology in abstraction or independent of hardware. But the two always do move together. And we talked about yesterday about how vSAN has become such an important technology industry, Stu. And the observation we made, and isn't it interesting, that vSAN's importance grew just as people started doing flash-based storage arrays. And so those two things are becoming much more important in the aggregate universe here. And the third thing here is VMware is trying to do more around simplification through the cloud foundation, but they have to make sure it doesn't just look like a new marketecture, a new set of marketing. >> I want to throw some controversy out there. Stu, I heard some hallway conversations all last night, and the theme pretty much was this. I'm kind of paraphrasing multiple conversations. Love the direction, love vSAN, love all this NSX stuff. I do agree NSX is looking like the crown jewel. Clouding over the top. Orchestration is going to be the battleground for middleware. Great, I love that. But now, I'm an operations guy. I have VMware and I've got to go to the cloud in a big way. I've got to manage all this stuff. I have operational stacks merging together that have not been tested into multiple configurations with VMs, hardware stacks, software stacks, jamming together untested. This is a new pain point, and a slow point. We're slowing people down. Stu, do you agree? >> Yeah, really interesting point, because let's look at vSAN and NSX. vSAN, I can hand that to a virtualization admin, and they can get running pretty fast on that. Actually, I have one of the executives from VMware, he's like, we save money for customers really fast. NSX, a little bit more of a longer game. A little bit more complicated. Especially when you start getting into it. This whole interfabric between clouds, this is not an easy button for multicloud or anything like that. But NSX is really cool. John, we've been watching since day one. I mean, I remember when you and I interviewed Martín Cansado right after the acquisition. You know, huge acquisition, and as Pat Gelsinger said in the keynote yesterday, what vsphere was in the last 20 years, NSX will be for the next decade or more. So, absolutely, we kind of understand where the battlegrounds are. The devil's always in the details. >> Is it stable, Stu. Is this stuff stable? >> No, none of it is stable. But we're in the midst of a significant transformation, so we shouldn't expect stability. >> You're implying the outcome for the customers is significantly there to make the investment? >> Stu's right. This isn't plug and play world. There's a lot of work going on and what users are looking for now is who in the technology companies are going to make and sustain the investments to drive simplification. And VMware is in the mix. One of the other things we said last night, John, is that, if you look back, there have been very few technology companies that have successfully made a major transformation. IBM did it in the early 1990s. Microsoft has done it a couple of times. We may be witnessing VMware making a pretty significant transformation here. >> This show's not a dud, that's for sure, no doubt. VMworld and reinvent will probably become the two most important shows in cloud, hands down. Obviously besides from the international stuff-- >> Peter: That's important. >> You know, Microsoft, I'm seeing not a lot of clarity around Microsoft. Google, they're trying to get that cloud event going. Again, it's a great cloud wars going on, guys. So this is going to be crazy. >> Peter: It's starting to take shape. >> Well, you mentioned simplicity. Michael Dell's coming on. One of things I'm going to ask him, and I'd love to get your thoughts on what we should ask him. I'm going to ask him how do you make this shit simple? That ultimately, in the era of all this stuff jamming together, stacks, hardware stacks, software stacks, seamless operational capability, new developers coming on board, edge of the network. >> One of the things, a critique I have for Dell the company, is they want to give you choice. You're going to talk to Michael, and he's going to say Azure Stack, I've got that solution. AWS, VMware's got that solution. We've got the VMware solutions. We've got virtu-stream over here and everything. Customers want opinionated offerings to help them through that. Because, oh my gosh, I figured out the virtualization stuff, and I'm figuring out some of the networking security fees, I've got containers and there's other stuff coming from the future, and oh my God, security is beating me over the head nonstop. And now you want to be a major player in that? Yeah, how can they help customers get in the right swim lanes, help customers get comfortable in the deep end? >> Peter just talked about what I think is kind of key, he just mentioned plug and play. I'll just go a step further. This general purpose computing market is over. Nothing is general purpose anymore. Those things that you need to bolt on, but you have a unique requirement by corporations and enterprises-- >> I'll push on that a second, and I'll give you the question I would ask. If we look at the big picture, the big picture goes like this, the first fifty years of the computing industry were dominated by an OLTP-oriented model of how you use computers. Highly imperative programming. The tool sets were set up that way. Single database manager. You serialize everything from the database manager. That is the model that drove the first 50 years. We're in the middle of something totally different right now. We really don't know what it is. We conceived the peace parts with the coming together. It's going to be more hunks of programming, more declarative, distributed data, we're not going to serialize the same way. We can see what it's going to look like. But it's unclear exactly what shape it's going to take. The question I would ask, and I think it kind of builds on what you said, is what is Dell's commitment to the cloud's experience on 2022? We know what the cloud experience is today. The cloud experience today is defined by Amazon. They've done an absolutely magnificent job. Nobody thought they could do it except for Amazon. And they did it. And they did an absolutely magnificent job of it. But what's the cloud experience of 2022? We say it's going to be true private cloud, hybrid cloud, and a set of methods and a computing model that starts with data and finishes with outcome. What is Michael Dell say it's going to be? >> I was just going to say, Peter, that is The Question you talk about. When we think about the mega-merger of Dell, EMZ, and Vmware, at the end of the day, Michael wants to pull through more servers. But it's that operating model that's going to drive things. So, will VMware really be able to fix their management stack. Peter, when I became an analyst seven years ago, I was like, well anytime I can say back security and management are broken and they still suck, right? And so the question is, five years from now, will we, you know, be able to day hey, VMware is really doing some awesome things, Pivotal is really bringing this together, Dell technology's really front and center to help that experience. >> I was going to ask him who he's voting for, Mayweather or McGregor, in the fight night. >> Mike Tyson, right? >> Put you over to Mike Tyson. All right, serious question to end this. Peter, I know this is something near and dear to your heart, and Stu, at Wikibon, you guys are really, there's a lot of end user conversations, how should end users start preparing themselves. Because Pat Gelsinger's still laying out the narrative of today is the last day, the shortest time, whatever his quote was, it's going to get faster. And to your point of all this work that needs to get done on the investment, the customer environment is going to get crazier and harrier and more complex. What are end user enterprise customers having to do? >> So if I'm a CIO I'm doing three things. The first thing I'm doing is I'm introducing the core principles that are related to Agile. So I'm telling my people, culturally, we're going to me empirical, we're going to use data to make decisions, we're going to be iterative, we're going to cycle, and we're going to be really opportunistic. We're going to be very willing to break down sacred cows. That's the first thing I'm doing. The second things I'm doing is I'm starting to introduce a set of etics that say if we can put it in the public cloud, we will put in in the public cloud. But we have to use iterative, empirical, and opportunistic to recognize that we won't always be able to put it in the public cloud. And we have to be prepared to be able to do stuff on-premise, because we are going to be doing things on-premise. The third thing that I'm going to do, and I think this is really important, is that IT, for the last n number of years, has been focused on taking costs out of the business. David Floyer talks about this a lot, the idea of automation. Well, increasingly IT is going to be asked to find ways to add revenue to the business. That's kind of where a lot of his digital engagement goes. What that boils down to, ultimately, is that the history of working, collaborating, has been based on taking costs out driven by procurement, and this notion of strategic relationships has been kind of a fraud, has been kind of something we just say. So the third thing is: you're going to have to start focusing on what it really means to be strategic. Vendor management, to truly partner, to transfer and control intellectual property boundaries and how that happens. So those are the three things I think CIOs absolutely must start doing. >> And that is what Andy Jassy's been hinting around is optical illusions, is whether its vendor. Where's the partnerships? Where's the coding? Great observation, Peter, I've got to say that was phenomenal. I would agree. I mean, this is ultimately coming to a new era with computing with AI, IOT Edge. I think Pat Gelsinger laid out the wave slide beautifully yesterday. >> We're throwing the computing industry up in the air right now and seeing where it's going to land. It's time to start shaping that into the new model of how we're going to think through problems and how we're going to solve problems with technology. >> And we had the CIO perspective yesterday with Bask Iyer, who's the CIO of VMware. He said, John, look it, some things in IT are recognizable. There are certain patterns. We know when retail has spiked. So, yeah, I'll do bursting of the cloud, but most things can be patternized, and that's okay. Some things will always be unrecognizable. But it's not always that dynamic. Once you get that nailed down, that's where the true private cloud report comes in. Congratulations, by the way, on the true private cloud report from Wikibon. It's going viral here on the show. >> Some great work from Stu and David Floyer for many years. >> Great work. It's going viral. Talk of the town here in Vegas. Congratulations, Stu. >> Well, thank you. It's something, we've been having this conversation in this community specifically at VMworld for years. Because it was that air gap between I virtualized and that helped utilization to I really need to get to that operating model of the cloud. I interviewed a consultant from Australia last year on the other set. And he said a lot of the companies he still talks to is IT is still a call center. And we've been talking for years about moving from just being a call center to really partnering with a business. Or, you know, Jeremy Burton, who I interview recently, he's like no It's driving the business. And it's great that there are some companies that fully transformed and they are engaging in that or at least they tell a good story. But there's a lot of customers that are still working on their own journey. And that's what shows like this are all about. >> So really quick John. So the way I describe that is when you think about cost benefit, when you think about productivity, it's how much work am I going to get done for how much cost? The cost is the denominator. What we like to say is that IT has to start taking on a numerator mentality. What benefits am I going to create? What opportunities am I going to create? What revenue am I going to help create? Got to think on the numerator side of the equation. >> You guys are doing some great work. You know, a lot of analysts are always pumping in reports: Oh, you got to see this. And then pushing out to the analyst relationship. If you're in this business, whether you're a CXO, an advisor, or you work for a company and you don't read that true private cloud report, you possibly could be fired. It's really game-changing. It's like the software reading the world memo. This is the marketplace that's hot right now. True Private Cloud Report by Wikibon. Check it out. The Cube Day Two Coverage continues. We'll be right back with more after this short break.

>> Okay welcome back everyone to our special live presentation for cloud and IT analytics for the hybrid cloud. I'm John Furrier, your host. We just had an interview with Peter Burris, keynote presenter. Our second one-on-one conversation is with our second keynote, Sudip Datta is the Vice President of Product Manager for CA Technologies. Sudip, great to see you. Great keynote. >> Good to see you. Thank you. >> A lot of information on your keynote so folks can check it out online and on demand, but I wanted to ask you, you mentioned evolving infrastructure, so it's the first thing that you kind of set the table with. What do you mean by that? >> Sure. So first of all, as I mentioned in my keynote, the infrastructure today is intimately connected with business operations and the user experience, right? So how is the infrastructure evolving and catering to this ongoing demand of app economy? Before we get there, let's define what infrastructure means to CA, right? Infrastructure is servers, storage, network. Could be running on prem, could be running on public cloud, right? So let's look at what's happening on each layer, right. In the server layer, we are seeing bi-directional, somewhat antithetical movement, right? One on the consolidation side of things and the other on expansion to multiple clouds, right? On the consolidation side of things, of course there are re-amps and now we see more and more containers getting adopted like I was looking at a survey. The container growth between 2016 and 2017 is more than 40%. So we are also hearing about serverless compute, stateless compute, and so on and so forth. So that's on the server side of things, right? Storage, we are hearing about object storage. Network is getting more and more abstracted with software defined networking, right? Another survey portrayed that between 2014 and 2020, the SDN market is anticipated to grow at a CAGR of 53% and that's huge. Huge. So the infrastructure is evolving, getting more dynamic, getting more abstract, right? And therefore there are challenges to monitoring and management. >> And you're seeing growth in Kubernetes just to throw a cherry on top of that conversation because that's orchestrating the apps which require programmable infrastructure. >> Absolutely. >> I want to just make a comment, I was just talking with Peter Burris and I want to highlight one of your pieces of your keynote that you mentioned that there's four pillars of modern analytics and monitoring and Peter and I were talking about the digital business requirement for a modern infrastructure and I was kind of teasing it out, I want to see where he wanted to go with it, I kind of put him on the spot, but I was saying hey, data's been a department, analytics has kind of been a department, but now it's kind of holistic. He kind of slapped me around, said "no no, it's still going to be a department." Although technically right, I was trying to say there's a bigger picture. >> Sudip: Sure. >> This is kind of a mindset shift. People are are re-imagining their analytics as a strategic asset just like data's becoming a strategic asset. My question is, if you don't monitor it, how do you even understand it? So you need these four pillars, and they are policy based configuration that's dynamic, unified monitoring, contextual intelligence, and collaboration integration. With the trend of the true private cloud report, you're starting to see the shift in labor from non-differentiated to differentiated. And those kind of four pillars as kind of a breeding ground for innovation. Are they connecting, do you see that connecting into this new IT role? >> Absolutely. As you rightly pointed out, the non-differentiated labor is being replaced by automation, by machine learning, by scripts, whatever it is. It's whole-scale automation. So that itself lends to the fact that there is a different shade of labor which is the value-added labor. So how does labor create value? And that's related to the four pillars that we talked about. How to manage these dynamic environments and glean data out of these environments to provide valuable insights and intelligence. We talked about contextual intelligence. So when it comes to contextual intelligence, IT can be intimately involved with the business to provide the IT context to the business or the business context to the IT and vice versa and add value to the business. Giving a specific example... In prior times, IT used to be reactive. When business runs out of, runs a camping, they run out of capacity and they say we need to add servers and they're rolling a server and so on and so forth. Now, of course the automation side of server provisioning has been taken care of. There are a lot of APIs out there, there are Amazon cloud formations and all that, but you still need a policy that is going to proactively detect, perform a what-if analysis that if there is a 2x ramp in business, there is going to be corresponding pressure on infrastructure and act proactively. That way, I can get to be the friend of business. It's not really acting after the fact, but acting proactively. >> I was talking with Umar Kahn, one of your colleagues yesterday. We talked about cars. I love Teslas 'cause it's a great example of innovation and you got old cars and you got Teslas. Really we're seeing kind of a move in IT where modern looks like the Tesla of IT where things are just different but work much better. So I got to ask you a question, Tesla's a great cool car, there's a lot of hype and buzz around it, but it's still got to drive, right? It's still got to be great. So you mentioned faults, fault detection and machine learning in your presentation, but IT ops still needs to run. And you got IOT Edge that Peter pointed out that needs to be figured out. So you got to figure out these new things and you got to run stuff, so you need the fault detection with the machine but you still got to be cool. Like the Tesla of IT. How are you guys becoming the Tesla of IT? >> Absolutely. I will touch upon a few points. First of all, as I mentioned right at the beginning, that data is important but we focused on the three Vs of data, which is velocity, volume and variety. But there is also the veracity of data and CA has been in the business of monitoring, capturing this data from various systems. From mobiles to mainframes, right? For the last few decades, right? So we have the true data, we are collecting the data, and now we are building a data analytics platform on which the data will be ingested and we will give insights. So that's going to be a big differentiator. The other is, we have all the tools from application management to infrastructure management tools, net ops tools, and we are connecting all of them to cover the entire digital chain. The reason is important, and I will highlight only one particular aspect of it. Network, the most neglected compliment in the infrastructure-- >> And the most important. Everyone complains about the network the most. >> Most important. Even when a kid plays a video game, it's an app. Most of us tend to forget that it's an app and the most important element in that app is the network. And we are in the business of network management so we are not only server and storage and app, we are also tying network management into this overall analytics platform. And within network management, it's tacit management, flow management. These are all important things because today's world, if your network betrays on you, then your user experience-- >> So I got to ask you, the products are in the company. And this is kind of important because most people who think about monitoring analytics would have kind of a different view based on what they're instrumenting. You're kind of talking about network and apps. You're kind of looking at the big picture. Are you tying that together? >> Absolutely. >> Can you explain how? >> Absolutely. So CA has been a market leader in application performance management and in network management and in server and cloud management. So we are tying all this together, the whole digital chain, as I said we are ingesting all the data into an open standard space, open source-based analytics platform, and we are collating the data so you can see what are the networks elements that preceded before a server got choked? Or before the application became inaccessible? We can tie it all together, all the units together, and perform assisted create and root cause analysis. >> Well I wanted to put you on the spot today because we are live, so I got to ask you as the VP of Product Management, what's your favorite product? Do you have a favorite child? (laughing) >> I mean, all of them are my favorite. >> There it is! Of course you can't pick a favorite, everyone's watching. >> Yeah, so yeah. >> As a parent you can't pick a favorite child. They're all good in their own way, right? >> They're all kind of horses for courses. Really, they do fabulous things. At the same time, we don't want the proliferation of tools. We are trying to rationalize tools like the net ops, the cloud ops and application performance management and tie them all together into our analytics platform. You can say like the analytics is my favorite word today because that's the new kid on the block but as I said, all of them are very very important. >> Well I always say, whoever could be the Tesla for IT is going to win it all. So with that, serious question, as VP of Product Management, do want to ask a serious question around that. What's your North Star? When you talk to your product teams, they're specking out products, they're talking to customers, and the engineers are building it out. What is the North Star? What is the ethos of CA these days? 'Cause you guys are pushing the envelope while maintaining that install base of customers. What is the North Star? What is the ethos? What's the guiding principles for CA Technologies? >> Absolutely. Customers, customers and customers, right? And the reason being, and I will give you... Of course, the user experience matters, but there is also an empirical reason. We are a market leader in the MSP space, for example. MSP and and just the space, and not only do we care about our customers but the customers of our customers as well. MSPs like ONE-NET, and Bespin Global, that you see is monitoring tools for managing their customers. So our allegiance goes all the way to our customers and their customers. So that's a guiding principle. But at the same time, we try to innovate beyond what our customers have been asking for. That's where the intuitive integration between application performance management, infrastructure management, network management, comes. And we want to be absolutely a leader in this end-to-end management. >> We talk with our WebOn team all the time and Peter and I talk about with Dave Alante all the time about how important IT operations are going to be right now because all the market research shows, Peter mentioned it, private cloud, true private cloud, hybrid cloud, massive growth area. Lot of opportunities for ops to really deliver value because the dev-ops momentum, because of the things like containers and Kubernetes, the programmable infrastructure has to be there. So I got to ask you the question, from a customer standpoint, and folks watching. What's the most important thing that your customers need to know when they start to re-think the architecture and ultimately make that 10 to 20 year investment in this new modern IT operations with CA? >> Sure. The first thing is, and I will re-visit the four pillars, right? That the dynamic, discovery, policy-based management is very very important because discovery, a lot of times we neglect discovery because it's always there. But the thing is, that's the starting point. That's the cradle where the overall monitoring takes birth. So that's the first point. The second is bring everything into, if not a single but minimal panes of glass. Maybe net ops has a tool and cloud ops has a tool and of course you have a tool for applications performance management. So those are the building blocks of monitoring. And then, overlay it with contextual intelligence and analytics. As I said, we are ingesting all the data, not only from CA tools, but using open APIs from other tools into our analytics framework and provide contextual intelligence. And last but not the least, collaboration and integration. We are integrating with frameworks such as Slack to provide collaboration between dev ops and IT ops, between storage admins and server admins, and so on and so forth, right? So those are the building blocks. So if you are thinking about what you are going to do in 10 years timeframe, first of all, hybrid cloud is a reality. So for managing the overall, entire spectrum of hybrid cloud, you need a tool that's unified, that can do dynamic policy-based management, that can provide intelligence, and that can encourage collaboration. >> Sudip, thank you so much for sharing this one-on-one conversation. For the folks watching, there's a great slide that outlines that operational intelligence. It was a beautiful eye candy, it's like an architecture slide, I was geekin' out on it. Check it out on the keynote on the on demand. Sudip, thank you so much for sharing your insight here on the future of modern analytics and monitoring strategies. This is a special presentation. One-on-one drill-down with keynote presenter Sudip Datta who is the Vice President of Product Management, part of the cloud and IT analytics digital business. We'll be right back with more one-on-one interviews after this short break.

>> Announcer: Live from Las Vegas, it's the CUBE covering HPE Discover 2017. Brought to you by Hewlett Packard Enterprise. >> Hello, everyone, and welcome to the CUBE's special presentation of HPE Hewlett Packard Enterprise Discover 2017. I'm John Furrier and my cohost Dave Vellante. For three days of wall to wall coverage. This is our intro section of our three days of Hewlett Packard Enterprises transformation and coverage. This is our seventh year covering HPE Discover, formerly HP Discover after the split. Lot of commentary today. We have seen HP over the years transform. We've been watching this, sort of a front row seat to HP, now HPE, really getting hammered in stock market their last earnings again didn't meet expectations, but this is not a quick turn around. I mean, this is a market place that's shifting. HP's had their plan now for multiple years. We're going to cover it for three days. But interesting. The world is turning. You had tweeted this morning on a Twitter storm you put together @dvellante, twitter.com. So it's Dvellante. Everyone should check it out. But it really highlights it. True private cloud, or private cloud, cloud has impacted everything. HP's kind of shifted their cloud strategy. It's becoming clear what they're doing, but private cloud, true private cloud, is legit. It's a 250 plus billion dollar market opportunity, as you guys have put it out on wikibond. Hybrid cloud is very relevant, and on the horizon is multi-cloud, the ability for customers to use multiple clouds. And on top of that we have machine learning, AI, and a myriad of things. Marketplace is shifting significantly, HP has been transforming significantly over the past five plus years. Your thoughts this year at HPE Discover and marketplace conditions and are they poised for success? >> Well, John, we're in the fifth year now of the turnaround that Meg Whitman initiated, and I think it's the light at the end of the tunnel year. HPE-- We've said many times at theCUBE that HP has the strength to grow. Well, it's certainly shrunk. They're about a 50 billion dollar company with a 26 billion dollar market cap, and there's a way to eek out some growth. If you separate all-- Call it Remain Co. Like the remaining company. Take out the software, take out EDS, take out actually tier one, tier one customer who's-- who's not buying as many servers as possible, or as they had previously, and the company grew about one percent. So what you're seeing, John, is some quarters HP grows a little bit, some companies it shrinks a little bit, but essentially it's facing what most legacy hardware companies are facing. Legacy hardware's down, everybody's scrambling to what we call true private cloud, which is essentially hybrid IT, trying to mimic the public cloud. And then HP adds in a dose of IOT at the edge, and then, really importantly, services. Services have never been more important for this company, and that is what I called earlier Remain Co. The remaining HP. Once it jettisons the software business this fall, that's what will be left, basically a 50 billion dollar company with about 55,000 employees. >> I was looking at a-- some IOT stories just last night, and a Business Insider article came up. It was an image, and it had listed the companies that-- by average age. And you had, obviously, Facebook, average age like 28. HP was at the highest end, like 39. And I want to bring up this notion of changing market because HP has always been customer focused, so the question is, if they are truly customer focused, as is Amazon, for instance, we talked to Andy Chasey, he talks about that all the time. And the context of where you've been and where you're going, historical legacy, declining markets, say servers for instance. And where you're going. It brings up an interesting point. And notable is recently Amazon web services hired Gosling, the founder of Java, which had a big conversation on the internet around age. A lot of the winners are older systems guys. So what's interesting is I actually look at that Business Insider article and saying actually age is a wisdom point now, because right now HP's got to solve customer problems. In addition to transforming themselves, they're looking at a customer base that's changing their requirements, so having experience is actually a good thing, as pointed out by some of the big leaders right now in hyperscale are old m systems guys. This is an opportunity for HP, and I think that's where I want to get your thoughts on. Are they customer focused in your mind, and if they are going to be, continue to be, what should their customer focus be? >> Let's talk about what customers are doing. So, first and foremost, customers are deinvesting in non-differentiated, you know, hardware maintenance and provisioning, okay. So they're shifting IT labor from provisioning luns and servers into digital transformation initiatives, so that's sort of one piece. The other pieces there as they're shifting those resources in places up the value stack. So it's applications; it's, as you say, digital transformation services; it's new IOT activity. So they're only investing-- from the HP standpoint, HP's an infrastructure company. They're only investing in infrastructure that looks like public cloud and can focus on hybrid. So are they customer focused? Yes. And what are they doing there? So they're investing in MMA, they're doing some MMA tuck ins. They're focused on develop-- delivering platforms with an API that are essentially programmable infrastructure. And very importantly, they're in a low margin business now. It's sort of low 30 percent gross margin business. So they have to get volume. How do they get volume? How do they reach those customers? Partners. So you are seeing a new partner emphasis. You know, are they customer focused? Yes, but they're really right now partner focused to reach those customers and increase their scale and coverage. That is a critical difference between the new HP, not that they always didn't have partners, now partners are critical to their success. >> One of the things that's the theme here is simplifying hybrid IT and I think from a customer standpoint, simplifying that is going to be critical. At the same time, creating new services opportunities. So I want to get your thoughts on the top story, at least from my perspective, here at the show at HPE Discover, and that is, is it better to be big or small? And HP has a strategy of a collection of small, nimble, agile business units. Dell EMC, for instance, has a strategy of being big and using leverage and supply chain and what not. Two different strategies. We pointed that out on the web. Certainly we've heard a lot of different approaches. Your thoughts on HP's strategy vis a vis bigger and better, or smaller and nimbler is better. >> Well, HP's not small. Hewlett Packard Enterprises is still big. I mean, it's a, it's a company that's twice the size, or more, than EMC was at its peak. So it's still a very, very large company. The difference is, John, I think they're focused. So they really are focused on hardware and infrastructure, the support, you know, the digital transformation, whatever you want to call it. The big question I have, John, is now that HP is getting rid of its software business, its outsourcing and EDS business, what is HP going to do with regard to software and services. So, they reinvented the whole services organization. The big question mark for me is software. Will they get into this, what you call inter-clouding business? Software to manage multiple clouds. It's a wide open space, everybody's going after it, and I haven't heard much from HP there. So what is their software strategy? Now, the other thing I'll add, is the good thing about being smaller is that it's going to generate cash for them. So they're going to get, going to get cash out of the spin merge with CSC. They're going to get cash out of the spin merge with MicroFocus. And you've already seen HP become more aquisitive with the Simplivity acquisition, certainly with Nimble recently, previously the Aruba acquisition, and some other tuck ins. That's critical in order for HP to reposition and continue to grow. >> Yeah, and my take on HP right now is they got to be more assertive. Their voice in the marketplace, at an industry level, has to be very assertive and relevant. I think that's something you've got to put the stake in the ground and hammer that home. I think we got the piece parts, and I think the spin merge is not a "they're getting out of that business." They're just decoupling from the monolithic entity that was HPE and creating kind of cohesive entities. And I think there's a strategy, in my opinion, that looks really strong there in the sense that, hey, at the end of the day, it's going to be a services game. And if you look at the IOT Edge, to me that's the tell sign of the marketplace. As the value shifts from IT-- So, simplifying IT, having true private cloud, having some hybrid pathways for IT, maybe a declining market from a service perspective, but simplifying that and operationalizing that and shifting the value to the Edge with services is a huge opportunity for HP. This is something that not a lot of people on Wall Street are kind of rocking at this point. But the value shift from IT, centralized IT, to a distributed kind of network effect is a really interesting play. And I think this a bet I think HP's making from my standpoint, and that's where the intelligent Edge piece comes in. If they could nail that, and layer on the services, and bring real value paths for customers with outcomes that are, not pie in the sky-- Sure, they throw some AI in there, machine learning, it's all relevant. Getting into open source. Taking that labs machine and memster technology and bringing that out at an appropriate timing. With the services in place. I think that's a good strategy for HP. >> Well, you mentioned Wall Street. Look, Wall Street is very tactically focused on the quarter and the margin decline, and, you know, D-Ram prices doubled in January, okay? So a company like HPE is going to get hurt by that. So that's head winds for these guys, these currency head winds. The stock, the price will go up and down. But the point I want to make, John, is there's a new competitive reality. CIOs have woken up to open source and cloud. And as a result, we've emerged into a new competitive dynamic where HPE is competing with Dell. It's competing with China, and it's competing with AWS. And it's one different-- Two differentiable advantages or services, you know, clearly HP's doubling down on services. I'll actually add a third. The second is partnerships, and the third big one, which is green field, is an ecosystem around IOT and what they call the intelligent edge. >> Well, Dave, great commentary. My, again, my feeling is customer focus at an industry level, having the right product mix that's relevant in the, for the solutions customers want. And also their partners. Leveraging that partner network. Really going to be a two pivot points for me. I see that as great leverage for HP. At the end of the day, everyone talking about declining market of servers and storage. I actually don't see that. There's more computers available now, more storage available. The key is can that shift to true private cloud, which again is a 250 billion dollar market, partly declining. And hybrid cloud is certainly growing. So, declining and growing, I mean they're all different perspectives, and I think HP's messaging here-- Come the end of the show, we're going to look at that and understand and impact and unpack that, that analysis. So, I'm Jeff Furrier, Dave Vellante. Day one of coverage, of three days of wall to wall coverage at HPE Discover 2017. More live coverage after this short break. (upbeat music)

(lively music) >> [Announcer] Live from Boston, Massachusetts, this is the Cube, covering Sparks Summit East 2017. Brought to you by Databricks. Now, here are your hosts, Dave Vellante and George Gilbert. >> Welcome back to Sparks Summit in Boston, everybody. This is the Cube, the worldwide leader in live tech coverage. We've been here two days, wall-to-wall coverage of Sparks Summit. George Gilbert, my cohost this week, and I are going to review part two of the Wikibon Big Data Forecast. Now, it's very preliminary. We're only going to show you a small subset of what we're doing here. And so, well, let me just set it up. So, these are preliminary estimates, and we're going to look at different ways to triangulate the market. So, at Wikibon, what we try to do is focus on disruptive markets, and try to forecast those over the long term. What we try to do is identify where the traditional market research estimates really, we feel, might be missing some of the big trends. So, we're trying to figure out, what's the impact, for example, of real time. And, what's the impact of this new workload that we've been talking about around continuous streaming. So, we're beginning to put together ways to triangulate that, and we're going to show you, give you a glimpse today of what we're doing. So, if you bring up the first slide, we showed this yesterday in part one. This is our last year's big data forecast. And, what we're going to do today, is we're going to focus in on that line, that S-curve. That really represents the real time component of the market. The Spark would be in there. The Streaming analytics would be in there. Add some color to that, George, if you would. >> [George] Okay, for 60 years, since the dawn of computing, we have two ways of interacting with computers. You put your punch cards in, or whatever else and you come back and you get your answer later. That's batch. Then, starting in the early 60's, we had interactive, where you're at a terminal. And then, the big revolution in the 80's was you had a PC, but you still were either interactive either with terminal or batch, typically for reporting and things like that. What's happening is the rise of a new interaction mode. Which is continuous processing. Streaming is one way of looking at it but it might be more effective to call it continuous processing because you're not going to get rid of batch or interactive but your apps are going to have a little of each. So, what we're trying to do, since this is early, early in its life cycle, we're going to try and look at that streaming component from a couple of different angles. >> Okay, as I say, that's represented by this Ogive curve, or the S-curve. On the next slide, we're at the beginning when you think about these continuous workloads. We're at the early part of that S-curve, and of course, most of you or many of you know how the S-curve works. It's slow, slow, slow. For a lot of effort, you don't get much in return. Then you hit the steep part of that S-curve. And that's really when things start to take off. So, the challenge is, things are complex right now. That's really what this slide shows. And Spark is designed, really, to reduce some of that complexity. We've heard a lot about that, but take us through this. Look at this data flow from ingest, to explore, to process, to serve. We talked a lot about that yesterday, but this underscores the complexity in the marketplace. >> [George] Right, and while we're just looking mostly at numbers today, the point of the forecast is to estimate when the barriers, representing complexities, start to fall. And then, when we can put all these pieces together, in just explore, process, serve. When that becomes an end-to-end pipeline. When you can start taking the data in on one end, get a scientist to turn it into a model, inject it into an application, and that process becomes automated. That's when it's mature enough for the knee in the curve to start. >> And that's when we think the market's going to explode. But now so, how do you bound this. Okay, when we do forecasts, we always try to bound things. Because if they're not bounded, then you get no foundation. So, if you look at the next slide, we're trying to get a sense of real-time analytics. How big can it actually get? That's what this slide is really trying to-- >> [George] So this one was one firm's take on real-time analytics, where by 2027, they see it peaking just under-- >> [Dave] When you say one firm, you mean somebody from the technology district? >> [George] Publicly available data. And we take it as as a, since they didn't have a lot of assumptions published, we took it as, okay one data point. And then, we're going to come at it with some bottoms-up end top-down data points, and compare. >> [Dave] Okay, so the next slide we want to drill into the DBMS market and when you think about DBMS, you think about the traditional RDBMS and what we know, or the Oracle, SQL Server, IBMDB2's, etc. And then, you have this emergent NewSQL, and noSQL entrance, which are, obviously, we talked today to a number of folks. The number of suppliers is exploding. The revenue's still relatively small. Certainly small relative to the RDBMS marketplace. But, take us through what your expectations is here, and what some of the assumptions are behind this. >> [George] Okay, so the first thing to understand is the DBMS market, overall, is about $40 billion of which 30 billion goes to online transaction processing supporting real operational apps. 10 billion goes to Orlap or business intelligence type stuff. The Orlap one is shrinking materially. The online transaction processing one, new sales is shrinking materially but there's a huge maintenance stream. >> [Dave] Yeah which companies like Oracle and IBM and Microsoft are living off of that trying to fund new development. >> We modeled that declining gently and beginning to accelerate more going out into the latter years of the tenure period. >> What's driving that decline? Obviously, you've got the big sucking sound of a dup in part, is driving that. But really, increasingly it's people shifting their resources to some of these new emergent applications and workloads and new types of databases to support them right? But these are still, those new databases, you can see here, the NewSQL and noSQL still, relatively, small. A lot of it's open source. But then it starts to take off. What's your assumption there? >> So here, what's going on is, if you look at dollars today, it's, actually, interesting. If you take the noSQL databases, you take DynamoDB, you take Cassandra, Hadoop, HBase, Couchbase, Mongo, Kudu and you add all those up, it's about, with DynamoDB, it's, probably, about 1.55 billion out of a $40 billion market today. >> [Dave] Okay but it's starting to get meaningful. We were approaching two billion. >> But where it's meaningful is the unit share. If that were translated into Oracle pricing. The market would be much, much bigger. So the point it. >> Ten X? >> At least, at least. >> Okay, so in terms of work being done. If there's a measure of work being done. >> [George] We're looking at dollars here. >> Operations per second or etcetera, it would be enormous. >> Yes, but that's reflective of the fact that the data volumes are exploding but the prices are dropping precipitously. >> So do you have a metric to demonstrate that. We're, obviously, not going to show it today but. >> [George] Yes. >> Okay great, so-- >> On the business intelligence side, without naming names, the data warehouse appliance vendors are charging anywhere from 25,000 per terabyte up to, when you include running costs, as high as 100,000 a terabyte. That their customers are estimating. That's not the selling cost but that's the cost of ownership per terabyte. Whereas, if you look at, let's say Hadoop, which is comparable for the off loading some of the data warehouse work loads. That's down to the 5K per terabyte range. >> Okay great, so you expect that these platforms will have a bigger and bigger impact? What's your pricing assumption? Is prices going to go up or is it just volume's going to go through the roof? >> I'm, actually, expecting pricing. It's difficult because we're going to add more and more functionality. Volumes go up and if you add sufficient functionality, you can maintain pricing. But as volumes go up, typically, prices go down. So it's a matter of how much do these noSQL and NewSQL databases add in terms of functionality and I distinguish between them because NewSQL databases are scaled out version of Oracle or Teradata but they are based on the more open source pricing model. >> Okay and NoSQL, don't forget, stands for not only SQL, not not SQL. >> If you look at the slides, big existing markets never fall off a cliff when they're in the climb. They just slowly fade. And, eventually, that accelerates. But what's interesting here is, the data volumes could explode but the revenue associated with the NoSQL which is the dark gray and the NewSQL which is the blue. Those don't explode. You could take, what's the DBMS cost of supporting YouTube? It would be in the many, many, many billions of dollars. It would support 1/2 of an Oracle itself probably. But it's all open source there so. >> Right, so that's minimizing the opportunity is what you're saying? >> Right. >> You can see the database market is flat, certainly flattish and even declining but you do expect some growth in the out years as part of that evasion, that volume, presumably-- >> And that's the next slide which is where we've seen that growth come from. >> Okay so let's talk about that. So the next slide, again, I should have set this up better. The X-axis year is worldwide dollars and the horizontal axis is time. And we're talking here about these continuous application work loads. This new work load that you talked about earlier. So take us through the three. >> [George] There's three types of workloads that, in large part, are going to be driving most of this revenue. Now, these aren't completely, they are completely comparable to the DBMS market because some of these don't use traditional databases. Or if they do, they're Torry databases and I'll explain that. >> [Dave] Sure but if I look at the IoT Edge, the Cloud and the micro services and streaming, that's a tail wind to the database forecast in the previous slide, is that right? >> [George] It's, actually, interesting but the application and infrastructure telemetry, this is what Splunk pioneered. Which is all the torrents of data coming out of your data center and your applications and you're trying to manage what's going on. That is a database application. And we know Splunk, for 2016, was 400 million. In software revenue Hadoop was 750 million. And the various other management vendors, New Relic, AppDynamics, start ups and 5% of Azure and AWS revenue. If you add all that up, it comes out to $1.7 billion for 2016. And so, we can put a growth rate on that. And we talked to several vendors to say, okay, how much will that work load be compared to IoT Edge Cloud. And the IoT Edge Cloud is the smart devices at the Edge and the analytics are in the fog but not counting the database revenue up in the Cloud. So it's everything surrounding the Cloud. And that, actually, if you look out five years, that's, maybe, 20% larger than the app and infrastructure telemetry but growing much, much faster. Then the third one where you were talking about was this a tail wind to the database. Micro server systems streaming are very different ways of building applications from what we do now. Now, people build their logic for the application and everyone then, stores their data in this centralized external database. In micro services, you build a little piece of the app and whatever data you need, you store within that little piece of the app. And so the database requirements are, rather, primitive. And so that piece will not drive a lot of database revenue. >> So if you could go back to the previous slide, Patrick. What's driving database growth in the out years? Why wouldn't database continue to get eaten away and decline? >> [George] In broad terms, the overall database market, it staying flat. Because as prices collapse but the data volumes go up. >> [Dave] But there's an assumption in here that the NoSQL space, actually, grows in the out years. What's driving that growth? >> [George] Both the NoSQL and the NewSQL. The NoSQL, probably, is best serving capturing the IoT data because you don't need lots of fancy query capabilities for concurrency. >> [Dave] So it is a tail wind in a sense in that-- >> [George] IoT but that's different. >> [Dave] Yeah sure but you've got the overall market growing. And that's because the new stuff, NewSQL and NoSQL is growing faster than the decline of the old stuff. And it's not in the 2020 to 2022 time frame. It's not enough to offset that decline. And then they have it start growing again. You're saying that's going to be driven by IoT and other Edge use cases? >> Yes, IoT Edge and the NewSQL, actually, is where when they mature, you start to substitute them for the traditional operational apps. For people who want to write database apps not who want to write micro service based apps. >> Okay, alright good. Thank you, George, for setting it up for us. Now, we're going to be at Big Data SV in mid March? Is that right? Middle of March. And George is going to be releasing the actual final forecast there. We do it every year. We use Spark Summit to look at our preliminary numbers, some of the Spark related forecasts like continuous work loads. And then we harden those forecasts going into Big Data SV. We publish our big data report like we've done for the past, five, six, seven years. So check us out at Big Data SV. We do that in conjunction with the Strada events. So we'll be there again this year at the Fairmont Hotel. We got a bunch of stuff going on all week there. Some really good programs going on. So check out siliconangle.tv for all that action. Check out Wikibon.com. Look for new research coming out. You're going to be publishing this quarter, correct? And of course, check out siliconangle.com for all the news. And, really, we appreciate everybody watching. George, been a pleasure co-hosting with you. As always, really enjoyable. >> Alright, thanks Dave. >> Alright, to that's a rap from Sparks. We're going to try to get out of here, hit the snow storm and work our way home. Thanks everybody for watching. A great job everyone here. Seth, Ava, Patrick and Alex. And thanks to our audience. This is the Cube. We're out, see you next time. (lively music)