>>Hi, Oleg. So great of you to join us today. I'm really looking forward to our session. Eso Let's get started. So if I can get you to give a quick intro to yourself and then if you can share with us what you're going to be discussing today >>Hi, Jake. In my name is Oleg Elbow. I'm a product architect and the Doctor Enterprise Container Cloud team. Uh, today I'm going to talk about running kubernetes on bare metal with a container cloud. My goal is going to tell you about this exciting feature and why we think it's important and what we actually did to make it possible. >>Brilliant. Thank you very much. So let's get started. Eso from my understanding kubernetes clusters are typically run in virtual machines in clouds. So, for example, public cloud AWS or private cloud maybe open staff based or VM ware V sphere. So why why would you go off and run it on their mettle? >>Well, uh, the Doctor Enterprise container cloud already can run Coburn eighties in the cloud, as you know, and the idea behind the container clouds to enable us to manage multiple doctor enterprise clusters. But we want to bring innovation to kubernetes. And instead of spending a lot of resources on the hyper visor and virtual machines, we just go all in for kubernetes directly environmental. >>Fantastic. So it sounds like you're suggesting then to run kubernetes directly on their mettle. >>That's correct. >>Fantastic and without a hyper visor layer. >>Yes, we all know the reasons to run kubernetes and virtual machines it's in The first place is mutual mutual isolation off workloads, but virtualization. It comes with the performance, heat and additional complexity. Uh, another. And when Iran coordinated the director on the hardware, it's a perfect opportunity for developers. They can see performance boost up to 30% for certain container workloads. Uh, this is because the virtualization layer adds a lot off overhead, and even with things like enhanced placement awareness technologies like Numa or processor opinion, it's it's still another head. By skipping over the virtualization, we just remove this overhead and gained this boost. >>Excellent, though it sounds like 30% performance boost very appealing. Are there any other value points or positive points that you can pull out? >>Yes, Besides, the hyper visor over had virtual machines. They also have some static resource footprint. They take up the memory and CPU cycles and overall reintroduces the density of containers per host. Without virtual machines, you can run upto 16% more containers on the same host. >>Excellent. Really great numbers there. >>One more thing to point out directly. Use environmental makes it easier to use a special purpose hardware like graphic processors or virtual no virtual network functions for don't work interfaces or the field programmable gate arrays for custom circuits, Uh, and you can share them between containers more efficiently. >>Excellent. I mean, there's some really great value points you pulled out there. So 30% performance boost, 60% density boost on it could go off and support specialized hardware a lot easier. But let's talk about now. The applications. So what sort of applications do you think would benefit from this The most? >>Well, I'm thinking primarily high performance computations and deep learning will benefit, Uh, which is the more common than you might think of now they're artificial Intelligence is gripping into a lot off different applications. Uh, it really depends on memory capacity and performance, and they also use a special devices like F P G s for custom circuits widely sold. All of it is applicable to the machine learning. Really? >>And I mean, that whole ai piece is I mean, really exciting. And we're seeing this become more commonplace across a whole host of sectors. So you're telcos, farmers, banking, etcetera. And not just I t today. >>Yeah, that's indeed very exciting. Uh, but creating communities closer environmental, unfortunately, is not very easy. >>Hope so it sounds like there may be some challenges or complexities around it. Ondas this, I guess. The reason why there's not many products then out there today for kubernetes on their metal on baby I like. Could you talk to us then about some of the challenges that this might entail? >>Well, there are quite a few challenges first, and for most, there is no one way to manage governmental infrastructures Nowadays. Many vendors have their solutions that are not always compatible with each other and not necessarily cover all aspects off this. Um So we've worked an open source project called metal cube metal cooped and integrated it into the doctor Enterprise Container Cloud To do this unified bar middle management for us. >>And you mentioned it I hear you say is that open source? >>There is no project is open source. We had a lot of our special sauce to it. Um, what it does, Basically, it enables us to manage the hardware servers just like a cloud server Instances. >>And could you go? I mean, that's very interesting, but could you go into a bit more detail and specifically What do you mean? As cloud instances, >>of course they can. Generally, it means to manage them through some sort of a p I or programming interface. Uh, this interface has to cover all aspects off the several life cycle, like hardware configuration, operating system management network configuration storage configuration, Uh, with help off Metal cube. We extend the carbonated C p i to enable it to manage bare metal hosts. And aled these suspects off its life cycle. The mental que project that's uses open stack. Ironic on. Did it drops it in the Cuban. It s a P I. And ironic does all the heavy lifting off provisioned. It does it in a very cloud native way. Uh, it configures service using cloud they need, which is very familiar to anyone who deals with the cloud and the power is managed transparently through the i p my protocol on. But it does a lot to hide the differences between different hardware hosts from the user and in the Doctor Enterprise Container Cloud. We made everything so the user doesn't really feel the difference between bare metal server and cloud VM. >>So, Oleg, are you saying that you can actually take a machine that's turned off and turn it on using the commands? >>That's correct. That's the I. P M I. R Intelligent platform management interface. Uh, it gives you an ability to interact directly with the hardware. You can manager monitor things like power, consumption, temperature, voltage and so on. But what we use it for is to manage the food source and the actual power state of the server. So we have a group of service that are available and we can turn them on. And when we need them, just if we were spinning the VM >>Excellent. So that's how you get around the fact that while aled cloud the ends of the same, the hardware is all different. But I would assume you would have different server configurations in one environment So how would you get around that? >>Uh, yeah, that Zatz. Excellent questions. So some elements of the berm mental management the FBI that we developed, they are specifically to enable operators toe handle wider range of hardware configurations. For example, we make it possible to consider multiple network interfaces on the host. We support flexible partitioning off hard disks and other storage devices. We also make it possible thio boot remote live using the unified extended firmware interface for modern systems. Or just good old bias for for the legacy ones. >>Excellent. So yeah, thanks. Thanks for sharing that that. Now let's take a look at the rest of the infrastructure and eggs. So what about things like networking and storage house that managed >>Oh, Jakey, that's some important details. So from the networking standpoint, the most important thing for kubernetes is load balancing. We use some proven open source technologies such a Zengin ICS and met a little bit to handle. Handle that for us and for the storage. That's ah, a bit more tricky part. There are a lot off different stories. Solutions out. There s o. We decided to go with self and ah cooperator for self self is very much your and stable distributed stories system. It has incredible scalability. We actually run. Uh, pretty big clusters in production with chef and rock makes the life cycle management for self very robust and cloud native with health shaking and self correction. That kind of stuff. So any kubernetes cluster that Dr Underprice Container Cloud provision for environmental Potentially. You can have the self cluster installed self installed in this cluster and provide stories that is accessible from any node in the cluster to any port in the cluster. So that's, uh, called Native Storage components. Native storage. >>Wonderful. But would that then mean that you'd have to have additional hardware so mawr hardware for the storage cluster, then? >>Not at all. Actually, we use Converse storage architecture in the current price container cloud and the workloads and self. They share the same machines and actually managed by the same kubernetes cluster A. Some point in the future, we plan to add more fully, even more flexibility to this, uh, self configuration and enable is share self, where all communities cluster will use a single single self back, and that's that's not the way for us to optimize our very basically. >>Excellent. So thanks for covering the infrastructure part. What would be good is if we can get an understanding them for that kind of look and feel, then for the operators and the users of the system. So what can they say? >>Yeah, the case. We know Doc Enterprise Container Cloud provides a web based user interface that is, uh, but enables to manage clusters. And the bare metal management actually is integrated into this interface and provides provides very smooth user experience. A zone operator, you need to add or enrolled governmental hosts pretty much the same way you add cloud credentials for any other for any other providers for any other platforms. >>Excellent. I mean, Oleg, it sounds really interesting. Would you be able to share some kind of demo with us? It be great to see this in action. Of >>course. Let's let's see what we have here. So, >>uh, thank you. >>Uh, so, first of all, you take a bunch of governmental service and you prepare them, connect and connect them to the network is described in the dogs and bootstrap container cloud on top of these, uh, three of these bare metal servers. Uh, once you put through, you have the container cloud up and running. You log into the u I. Let's start here. And, uh, I'm using the generic operator user for now. Its's possible to integrate it with your in the entity system with the customer and the entity system and get real users there. Mhm. So first of all, let's create a project. It will hold all off our clusters. And once we created it, just switched to it. And the first step for an operator is to add some burr metal hosts of the project. As you see it empty, uh, toe at the berm. It'll host. You just need a few parameters. Uh, name that will allow you to identify the server later. Then it's, ah, user name and password to access the IBM. My controls off the server next on, and it's very important. It's the hardware address off the first Internet port. It will be used to remotely boot the server over network. Uh, finally, that Z the i p address off the i p m i n point and last, but not the least. It's the bucket, uh, toe Assign the governmental host to. It's a label that is assigned to it. And, uh, right now we offer just three default labels or buckets. It's, ah, manager, manager, hosts, worker hosts and storage hosts. And depending on the hardware configuration of the server, you assign it to one of these three groups. You will see how it's used later in the phone, so note that least six servers are required to deploy managed kubernetes cluster. Just as for for the cloud providers. Um, there is some information available now about the service is the result of inspection. By the way, you can look it up. Now we move. Want to create a cluster, so you need to provide the name for the cluster. Select the release off Dr Enterprise Engine and next next step is for provider specific information. You need to specify the address of the Class three guy and point here, and the range of feathers is for services that will be installed in the cluster. The user war close um kubernetes Network parameter school be changed as well, but the defaults are usually okay. Now you can enable or disable stack light the monitoring system for the Burnett's cluster and provide some parameters to eat custom parameters. Uh, finally you click create to create the cluster. It's an empty cluster that we need to add some machines to. So we need a least three manager notes. The form is very simple. You just select the roll off the community snowed. It's either manager of worker Onda. You need to select this label bucket from which the environmental hospital we picked. We go with the manager label for manager notes and work your label for the workers. Uh, while question is deploying, let's check out some machine information. The storage data here, the names off the disks are taken from the environmental host Harbor inspection data that we checked before. Now we wait for servers to be deployed. Uh, it includes ah, operating system, and the government is itself. So uh, yeah, that's that's our That's our you user interface. Um, if operators need to, they can actually use Dr Enterprise Container Container cloud FBI for some more sophisticated, sophisticated configurations or to integrate with an external system, for example, configuration database. Uh, all the burr mental tasks they just can be executed through the carbonated C. P. I and by changing the custom resources customer sources describing the burr mental notes and objects >>Mhm, brilliant. Well, thank you for bringing that life. It's always good. Thio See it in action. I guess from my understanding, it looks like the operators can use the same tools as develops or developers but for managing their infrastructure, then >>yes, Exactly. For example, if you're develops and you use lands, uh, to monitor and manage your cluster, uh, the governmental resources are just another set of custom resources for you. Uh, it is possible to visualize and configure them through lands or any other developer to for kubernetes. >>Excellent. So from what I can see, that really could bridge the gap, then between infrastructure operators on develops and developer teams. Which is which is a big thing? >>Yes, that's that's Ah, one of our aspirations is to unify the user experience because we've seen a lot of these situations when infrastructure is operated by one set of tools and the container platform uses agnostic off it end users and offers completely different set of tools. So as a develops, you have to be proficient in both, and that's not very sustainable for some developers. Team James. >>Sure. Okay, well, thanks for covering that. That's great. E mean, there's obviously other container platforms out there in the market today. It would be great if you could explain only one of some of the differences there and in how Dr Enterprise Container Cloud approaches bare metal. >>Yeah, that's that's a That's an excellent question, Jake. Thank you. So, uh, in container cloud in the container Cloud Burr Mental management Unlike another container platforms, Burr metal management is highly and is tightly integrated in the in the product. It's integrated on the U and the A p I, and on the back and implementation level. Uh, other platforms typically rely on the user to provision in the ber metal hosts before they can deploy kubernetes on it. Uh, this leaves the operating system management hardware configuration hardware management mostly with dedicated infrastructure greater steam. Uh, Dr Enterprise Container Cloud might help to reduce this burden and this infrastructure management costs by just automated and effectively removing the part of responsibility from the infrastructure operators. And that's because container cloud on bare metal is essentially full stack solution. It includes the hardware configuration covers, operating system lifecycle management, especially, especially the security updates or C e updates. Uh, right now, at this point, the only out of the box operating system that we support is you, Bhutto. We're looking to expand this, and, as you know, the doctor Enterprise engine. It makes it possible to run kubernetes on many different platforms, including even Windows. And we plan to leverage this flexibility in the doctor enterprise container cloud full extent to expand this range of operating systems that we support. >>Excellent. Well, Oleg, we're running out of time. Unfortunately, I mean, I've thoroughly enjoyed our conversation today. You've pulled out some excellent points you talked about potentially up to a 30% performance boost up to 60% density boost. Um, you've also talked about how it can help with specialized hardware and make this a lot easier. Um, we also talked about some of the challenges that you could solve, obviously, by using docker enterprise container clouds such as persistent storage and load balancing. There's obviously a lot here, but thank you so much for joining us today. It's been fantastic. And I hope that we've given some food for thoughts to go out and try and deployed kubernetes on Ben. It'll so thanks. So leg >>Thank you for coming. BJ Kim

(gentle pulsating music) >> Narrator: TheCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (light airy music) >> Good evening from Fira, Barcelona in Spain. It's Lisa Martin and Dave Vellante. We are covering with theCUBE MWC '23. This is day three. Three full days, almost, of coverage we've given you. And don't worry, we've got a great conversation next, and another day tomorrow. We're going to be talking with Singtel and Dell next about 5G network slicing. Sexy stuff. Please welcome Dennis Wong, VP Enterprise 5G and Platform from Singtel. And Douglas Lieberman is back with us. Our alumni, Global Senior Director, GTM and Co-Creation Services, Telecom Systems Business at Dell. Welcome, guys. Great to have you. >> Thank you very much. >> Thanks for having us. >> So Dennis, go ahead and start with you. Talk to the audience about Singtel. You've got a unique insight into some of the challenges that 5G brings and the opportunities. What is Singtel seeing there? >> I think from a Singtel perspective, I think 5G technology brings about a new era of opportunities for all the enterprises, you know, from big to small. I think that's one thing that we are aiming to do. How do we put technology together? And that's why I think that 5G brings about a lot more capabilities, a lot more parameters that, you know, for the new technology, new devices, new services that we can explore. I mean, we are giving ourself a new opportunity to try something that's better than Wi-Fi, that is better 4G. So I think that's something very exciting for me. >> What are some of the challenges that you see that are, that you look to partners like Dell to help wipe off the table? >> I think one of the things that Dell has been doing very closely with us, I think in terms of the network technology, in terms of the RAN, in terms of the, you know, kind of virtualization, in terms of marketplace, in terms of ecosystem, they are all over the place. So I think for them, they are not looking at just hardware, they are looking at how to support us as a whole ecosystem to work things together. >> You know, it's interesting because it's maybe an overused term, but everyone talks about 5G being the enterprise G. And really, what's interesting about 5G, and where Dell is really able to add value in working with partners like Singtel, is the disaggregation of 5G and the open side of it, and the ability to take different workloads and customize them because of the fact that the whole packet core and the CU and the DU and that architecture is not locked into a single proprietary architecture, allows for customization and injection of workloads, and allows enterprises to really tune the network to what their workloads need to be. >> So I wonder, Dennis, can you take us through the anatomy of a 5G deployment? How does it work? Do you start with a sort of greenfield, sort of test bed? How do you connect it to your 4G networks? Take us through the process. >> Maybe I will go through from a customer lens. What does the customer think, and what does the customer feels about when we approach them for 5G? I think for most of the customers who are thinking about 5G, they are usually already having some kind of a services that's running on the current technology. Could be 4G, could be Wi-Fi. And one very typical example that I can share with you is that one of the customers, he was saying that, "I'm having Wi-Fi already. Can you prove to me that 5G is better?" So, what we did was that we actually rolled out our, this little proprietary 5G in the box. We call it 5G GENIE. GENIE stands for Generating Instant Experience. You know, very interesting name. We pushed that to the customer place. Within 30 minutes, he set up a 5G connectivity in his area, and he tested his performance of his Wi-Fi with the GENIE on the spot. And immediately, wow, he see that there's a lot of difference in the performance. Now, so the first part, is really about getting the customer to feel that, why 5G is truly better. Let them experience it. Then after which, we went through with them, because of this performance, what does it do to your business? From a productivity perspective, security perspective, safety perspective. And they kind of look at it and say, "Wow." that is where the ROI comes from. Then after which, then is where I think, you know, where Dave says, you know, he comes in whereby then, we will design, if it's a factory, we are to design the coverage in the factory because robots are moving. You want to ensure that every part of them, of their factories have the coverage. So we are to design it, we are to build it, put in all the controls and put in all the devices. And then after which, you know, then all things will go. And of course, from a customer perspective, they will still need to run the application. We need to check that the performance is, you know, up to the mark. So I think in all, the 5G journey is not really just about putting the network and, "Here, customer, let's use it." There's a lot of conviction, there's a lot of testing, there's a lot of what we call trial and error with the customer. Yeah. >> So thank you for that explanation. So that's there, we're going to make a business case, and they're going to see immediate performance improvements. Then, I presume they're going to start building new applications on top. And then maybe that'll negatively affect the performance, but that's okay. It's like we were talking about the other day, there's so much data pumping, you get equivalent performance, but so much more capability. So how are you guys thinking about that ultimate layer, where that value is, the application, the workloads, that are going to be new to these networks? >> Well, let's, you know, we can take a step back and talk about, for example, the use case he just talked about, which was in, you know, autonomous vehicles or robots inside a factory. It's not that it's just more performance. It's reliable performance and consistent performance. Because the difference with a cellular solution, a mobile solution, a 5G solution, than a Wi-Fi, is the guaranteed spectrum and the isolated spectrum and the lack of competition for that space. I mean, I tell people this all the time, and you can see it right now. If you were to open your phone and look at all the Wi-Fi hotspots that exist right here, there is an enormous amount of contention for the exact same spectrum and we're all competing with each other. >> Dave: I can't get into the network. >> Right, and so the more people that walk past us in this cube, the more that there's going to be interference. And so the performance is not guaranteed. And if you have an automated factory, if you have machines that are moving around a factory, if you have robots that need to work together, you can't afford for it to be great one minute, and lousy the next minute. You need consistent high performance. And that's where these 5G networks and private 5G networks are really, really important. 'Cause it's not just about faster. Sometimes it's not all about can I get it there faster? I want it faster, but reliably and consistently, and make sure I get the same experience every time, so that I can then build more intricate and complicated applications. If you have a warehouse that's got autonomous robots, the closer I can have those robots get to each other, means the more packages I can move, or the more welds I can make, or the more machine parts I can get out the door because I don't have to build into the, "Oh my God, I lost Wi-Fi connectivity for 10 seconds," and I got, "And everything stops, until the connectivity comes back and they can resume." >> And anybody would choose consistent, predictable performance over spiky performance. >> Doug: Right. >> And you're saying the technology, you're able to better leverage the spectrum, isolate the spectrum for that specific use case. That is a technology enabler. >> Dennis: Maybe I can also give you another perspective. Together with the 5G technology is where the multi-edge computing comes into place. And that's where I think one of the things that we work very closely with Dell as well. Because that is very important. With that compute at the edge, means that your latency is low. And, like what you said, it's not just low latency, it's consistently low latency. Today, let's say in Singapore, Singapore is a very small city. You can travel from one end of the city to the other end in one and a half hour, and that's it. Singapore is so- >> If there's no traffic. >> And if there's no traffic. (all laugh) Now, so everyone was saying, "Singapore is such a small city, why would you need a edge?" So I explained to them, we did a test from a cloud gaming perspective. As we use 4G over the public cloud, it's true that you can get about 10, 15, 20 milliseconds, you know, on a good day, but it's, on average, it's about 15, 20 milliseconds. However, you will find that there are times, whereby it'll spike to 150, spike to 90, spike to 200. So you can see that it's not just about low latency, it's about consistent low latency. So that's where I think 5G and MEC come as a good pair to make sure that, you know, the performance of our, for those factories or what, you know, kind of Doug has mentioned, the high performance, you know, synchronized services is very important. Beside packing the, you know, the drones, or the robots who go close together, you want it to be synchronized. And you know, if you've seen some of those robots that work together, it's almost synchronized. That is the one thing that, our dreams that we going to make sure that we going to achieve, yeah. >> And then, of course, on top of all that, is security, which is really, really important on all these. I mean the vulnerabilities of Wi-Fi are well known. There is a hundred different tools that you can download for free to test the security of any Wi-Fi network. So there's- >> Dave: I got my VPN and it won't let me on the network. >> Right, exactly. (all laugh) You know, so the benefit of a 5G solution, a 4G solution, is the added layer of security. I'm not saying that it's perfect, you know, there are obviously ways to get around those as well, but every additional layer of security is one less attack factor that you have to worry about every single day. >> So Dennis, you're pro on the 5G adoption journey. You both have talked about the ostensible benefits there and then the capabilities. I want to understand, how is Dell actually helping, under the covers, Singtel, deliver this connectivity and this consistency and the reliability that your customers expect? >> Yeah. I think, you know, having all these services together, I think, other than just what we call the 5G connectivity, it's like what you mentioned about the RAN, the disaggregated kind of services, I think that gives us a lot of opportunity in terms of flexibility, in terms, of course. But I think one of the things that we also work closely together is about new technology. As I've mentioned also that, you know, the marketplace or the partners that Dell brings, that's very, very important for us. And then for me, I think that, if I look at it again from the customer lens again, right? Having the kind of right equipment, which we are working together with Dell, is important, but I think having the right ecosystem that use the equipment, is even more important. I will give you a very simple example. For any organization, for any services that you need to deploy, let's choose a SMB. You'll realize that, if I want to deploy an application in my office, there's a few things you need to consider. Networks, which could be provided by 5G, right? Then you talk about the public cloud. Then you talk about the, what we call the public cloud and you talk about the edge. Now, in order for you to deploy this, you'll realize that every one of them could be orchestrated and synchronized. And then, as well, Doug has mentioned, after you implemented three of them, you've still got to consider security across them. >> Lisa: Yeah, yeah. >> So what happens there for us, what we want to do is that, we actually build a platform that actually sits on top of all this. This platform actually controls the 5G network, the MEC, as well as the, what we call the public all together. And on top, sitting on top of that is all the applications. Why so? Because again, anytime you have an application, you know that you have to make sure that the VMs works, the hypervisor works, you know, connectivity works, the compatibility works. So, when we build this platform, we put all the ecosystem on board and then it makes it like, the customer can have a one stop shop, look at the equipment, look at the, what we call the equipment, look at the networks, look at the, you know, the cloud, the IaaS as well as the application, it works. And so, working together with Dell, we actually come up and look at some solution that's fit for the market. One of the opportunity that we are looking together with this Dell is in Singapore. How do we actually ship a really packaged bundle to SMEs that has a Dell equipment, our 5G network, plus the platform product ecosystem, that can ship to any restaurant around? So that, you know, we are thinking out loud. Like for example, as you move into the restaurant, you know, we always say that, please scan your barcode on the table for the menu. >> Lisa: Yeah. >> You can just go in, and by facial recognition, knowing that you are not a staff. So it's a reverse privacy. And then after that, push, you know, the menu to your phone directly. And so, therefore, it cuts again the stuff of me trying to scan the menu or waiting for it to load. And because with the on-prem equipment from Dell, let's say for example, there's things is pushed to the phone instantly. You know, sometimes we know that, when some of this goes to the public web or public cloud, and by the time it loads the menu, you are just waiting to avoid the load. So you can see that all these become a experience for the SMEs and the restaurant's staff. So I think these are some of these great use cases that we can foresee in the future. >> And I think, you know, something you just said is really a key part, right? As technologists, sometimes we get wrapped around the technology, and we forget about the fact that it's all about the outcome. To the enterprise, they're looking at a workload. They have a very specific thing they want to accomplish. And all this stuff, private 5G, and edge, and cloud, they're all really irrelevant. They're just means to get to what their outcome that they want to be is. And when we look at them atomically, and as independent little units, we end up with sprawl, and honestly, enterprises are telling us more and more and more, "I don't want that. I don't want a science project. I don't want to be responsible for figuring out how all these things are going to play together and have one rack of equipment for my network, and one rack of equipment for my private 5G, and another rack of equipment for my edge cloud and another rack of equipment for the MEC." And you start to get data centers inside of a pizza shop where there's no space to put a data center, right? And so the partnership we have with Singtel, and exactly what Dennis was just talking about, is how do we take all of those and start realizing that with virtualization and containerization and the open architecture that exists with function virtualization in networking today, in private 5G. We're able to utilize a common infrastructure stack, a common platform to be able to give you all those functions to run the 5G, to run your core applications, to run the MEC, to do all those things, so that we're minimizing the footprint, but also minimizing the complexity. And that's really the point. >> So how mature are we today? Where are we? When can we expect deployments? You know, are there any sort of early case examples you can share? >> Yeah, like I said, you know, in Singapore itself, we have already saw a little bit of success. Especially in Singapore, we have 5G SA already. So I think one of the few things that like I mentioned, some of these use cases that we did. So the company that I talked earlier about is a factory. They took the 5G GENIE, went there, and tested against the Wi-Fi, agree with it. They say, "Let's deploy." They have deployed it now, and it's running. So it's using the 5G for safety, you know, and safety inspection and remote assistance, for training, et cetera. We're using the VR goggles. So I think that's really a live use case. The other live use case is that in Singapore, one of the, you know, kind of automotive manufacturing plants is actually using the AGV that's controlled by our 5G, that's moving around in the factory in a very, what we call random manner. In a way that, in the past, whereby you would never conceive the automotive factories that is going to go on conveyor belts. But now, the AGV is moving as in where at in the ad hoc manner, yeah. >> Yeah, I mean we've got solutions. We've implemented with customers for mining, for example. For the autonomous vehicles in a mine where the, you know, after the mine explosion goes off and you got to gather the minerals and the ores, there's a lot of time that you have to wait before humans can go in. But with a 5G solution, we've been able to enable autonomous vehicles to go in there and start the process of collecting that ore without waiting for the humans, substantially improving safety, security, and the output and revenue of those mines. >> Dave: No, no canary necessary. (Dennis laughs) Is that correct that this capability is not really going to cannibalize Wi-Fi, right? It's going to go into use cases, or will it? Are there situations that overlap, where customers have sort of on the edge, no pun intended, tried to use Wi-Fi and then this will cannibalize some piece of the market? >> Look, there's a Venn diagram somewhere, right? (Lisa and Dennis chuckle) And at the end of the day, no one who's being honest is going to say that 5G is going to replace Wi-Fi, right? >> Yeah, yeah, sure. >> There are, and there's a lot of reasons for that. You know, challenges in adding new devices, you know, if you go to a store, and you want to get on their Wi-Fi, you don't want to necessarily add a new SIM to your phone. So there are places where Wi-Fi is still going to remain a very powerful long-term solution that's not going anywhere, especially at the moment because the cost of Wi-Fi, you know, the chips for Wi-Fi are pennies a piece to put in devices. So we're a long way away from 5G being at the same monetary scale as Wi-Fi. But, there are a lot of use cases where Wi-Fi is simply doesn't work. I talked about that mining solution, Wi-Fi doesn't work in a mine. It's got the wrong physics properties, it's got the wrong distance limitations, there's all sorts of problems. And so, what 5G has opened up, is where in the past, people tried to make Wi-Fi work and either gave up and ran wired, or just dealt with constant problems, like all their machines shutting down simultaneously. 5G is enabling them to now have a real solution that works. So it's carving out a niche for itself. In some places it's replacing Wi-Fi without a doubt 'cause it is a better solution. But there are some use cases that are going to remain Wi-Fi for a long time. >> And how flexible and mobile can that solution be? 'Cause we can't use Wi-Fi here. (Dennis chuckles) We have to use a hard line. >> Yep. >> Right? So, could we use 5G, our own private network on theCUBE? Or is it because we're going too many places? It's just just too complicated for us? >> That's where it comes from. >> Stick with fixed lines. >> That's where the next technology of 5G come from. >> Yeah. >> Slicing. >> Talk about that. >> You see that, you know, somebody ask me, "Why would somebody need slicing?" Then I'll ask you, "That if you are in US, or in any country in the world, there's always two way. You can use a highway and you pay toll. Or you use your small roads. Exactly, why do you have a highway, that you have to pay toll?" There is a highway, there's a path, there's a slice. So for operators, we can always say that based on your mission criticality, based on the speed you want, based on the kind of urgency you need, our works give you a slice, and that you have to pay a premium for it. So similarly, would be that 5G is going to be available here, and say that Cube will purchase a slice from Californica. And say that for Cube, this is your 5G, you have a freeway, green way, it's highly possible. >> Believe me, we're paying a premium for hard lines at Mobile World Congress or MWC. (all laugh) >> And to that point, right, you know, and those slicing gives you the opportunity to do profiling and, you know, setting up. When I say profiling, you know, different devices and different customers getting different metrics on how they use that network. So some of them will get a superhighway, some of them will get a medium size highway, somebody- >> Dennis: Somebody getting a secured highway. >> Right, so a more secure highway. So, there's a lot more flexibility with 5G, and that's why I said, you know, there's a lot of use cases, where it will replace Wi-Fi, and it will be very powerful. And that's the places where we're really seeing the adoption really taking off. >> You guys have done a great job explaining 5G, really. Why you're pro 5G, the opportunities of the use cases. Thank you so much for joining us today. >> Dennis: Thank you, Lisa. >> Also talking about what Dell and Singtel are doing together. I imagine the journey probably has just begun, but you've made tremendous amount of progress so far. It's a great use case. Thank you for sharing it with us today. >> Thank you very much. >> Thank you. Thank you, Dave. Thank you, Lisa. >> All right, our pleasure. For our guests and for Dave Vellante, I'm Lisa Martin. You're watching theCUBE, live at MWC '23 from Barcelona, Spain. Stick around. Dave comes up with a very cool wrap, after this. (light airy music)

(gentle synth music) (music ends) >> Welcome back to Supercloud 2, an open industry collaboration between technologists, consultants, analysts, and of course practitioners to help shape the future of cloud. At this event, one of the key areas we're exploring is the intersection of cloud and data. And how building value on top of hyperscale clouds and across clouds is evolving, a concept of course we call "Supercloud". And we're pleased to welcome our friends from Enterprise Technology research, Erik Bradley and Darren Brabham. Guys, thanks for joining us, great to see you. we love to bring the data into these conversations. >> Thank you for having us, Dave, I appreciate it. >> Yeah, thanks. >> You bet. And so, let me do the setup on what is Supercloud. It's a concept that we've floated, Before re:Invent 2021, based on the idea that cloud infrastructure is becoming ubiquitous, incredibly powerful, but there's a lack of standards across the big three clouds. That creates friction. So we defined over the period of time, you know, better part of a year, a set of essential elements, deployment models for so-called supercloud, which create this common experience for specific cloud services that, of course, again, span multiple clouds and even on-premise data. So Erik, with that as background, I wonder if you could add your general thoughts on the term supercloud, maybe play proxy for the CIO community, 'cause you do these round tables, you talk to these guys all the time, you gather a lot of amazing information from senior IT DMs that compliment your survey. So what are your thoughts on the term and the concept? >> Yeah, sure. I'll even go back to last year when you and I did our predictions panel, right? And we threw it out there. And to your point, you know, there's some haters. Anytime you throw out a new term, "Is it marketing buzz? Is it worth it? Why are you even doing it?" But you know, from my own perspective, and then also speaking to the IT DMs that we interview on a regular basis, this is just a natural evolution. It's something that's inevitable in enterprise tech, right? The internet was not built for what it has become. It was never intended to be the underlying infrastructure of our daily lives and work. The cloud also was not built to be what it's become. But where we're at now is, we have to figure out what the cloud is and what it needs to be to be scalable, resilient, secure, and have the governance wrapped around it. And to me that's what supercloud is. It's a way to define operantly, what the next generation, the continued iteration and evolution of the cloud and what its needs to be. And that's what the supercloud means to me. And what depends, if you want to call it metacloud, supercloud, it doesn't matter. The point is that we're trying to define the next layer, the next future of work, which is inevitable in enterprise tech. Now, from the IT DM perspective, I have two interesting call outs. One is from basically a senior developer IT architecture and DevSecOps who says he uses the term all the time. And the reason he uses the term, is that because multi-cloud has a stigma attached to it, when he is talking to his business executives. (David chuckles) the stigma is because it's complex and it's expensive. So he switched to supercloud to better explain to his business executives and his CFO and his CIO what he's trying to do. And we can get into more later about what it means to him. But the inverse of that, of course, is a good CSO friend of mine for a very large enterprise says the concern with Supercloud is the reduction of complexity. And I'll explain, he believes anything that takes the requirement of specific expertise out of the equation, even a little bit, as a CSO worries him. So as you said, David, always two sides to the coin, but I do believe supercloud is a relevant term, and it is necessary because the cloud is continuing to be defined. >> You know, that's really interesting too, 'cause you know, Darren, we use Snowflake a lot as an example, sort of early supercloud, and you think from a security standpoint, we've always pushed Amazon and, "Are you ever going to kind of abstract the complexity away from all these primitives?" and their position has always been, "Look, if we produce these primitives, and offer these primitives, we we can move as the market moves. When you abstract, then it becomes harder to peel the layers." But Darren, from a data standpoint, like I say, we use Snowflake a lot. I think of like Tim Burners-Lee when Web 2.0 came out, he said, "Well this is what the internet was always supposed to be." So in a way, you know, supercloud is maybe what multi-cloud was supposed to be. But I mean, you think about data sharing, Darren, across clouds, it's always been a challenge. Snowflake always, you know, obviously trying to solve that problem, as are others. But what are your thoughts on the concept? >> Yeah, I think the concept fits, right? It is reflective of, it's a paradigm shift, right? Things, as a pendulum have swung back and forth between needing to piece together a bunch of different tools that have specific unique use cases and they're best in breed in what they do. And then focusing on the duct tape that holds 'em all together and all the engineering complexity and skill, it shifted from that end of the pendulum all the way back to, "Let's streamline this, let's simplify it. Maybe we have budget crunches and we need to consolidate tools or eliminate tools." And so then you kind of see this back and forth over time. And with data and analytics for instance, a lot of organizations were trying to bring the data closer to the business. That's where we saw self-service analytics coming in. And tools like Snowflake, what they did was they helped point to different databases, they helped unify data, and organize it in a single place that was, you know, in a sense neutral, away from a single cloud vendor or a single database, and allowed the business to kind of be more flexible in how it brought stuff together and provided it out to the business units. So Snowflake was an example of one of those times where we pulled back from the granular, multiple points of the spear, back to a simple way to do things. And I think Snowflake has continued to kind of keep that mantle to a degree, and we see other tools trying to do that, but that's all it is. It's a paradigm shift back to this kind of meta abstraction layer that kind of simplifies what is the reality, that you need a complex multi-use case, multi-region way of doing business. And it sort of reflects the reality of that. >> And you know, to me it's a spectrum. As part of Supercloud 2, we're talking to a number of of practitioners, Ionis Pharmaceuticals, US West, we got Walmart. And it's a spectrum, right? In some cases the practitioner's saying, "You know, the way I solve multi-cloud complexity is mono-cloud, I just do one cloud." (laughs) Others like Walmart are saying, "Hey, you know, we actually are building an abstraction layer ourselves, take advantage of it." So my general question to both of you is, is this a concept, is the lack of standards across clouds, you know, really a problem, you know, or is supercloud a solution looking for a problem? Or do you hear from practitioners that "No, this is really an issue, we have to bring together a set of standards to sort of unify our cloud estates." >> Allow me to answer that at a higher level, and then we're going to hand it over to Dr. Brabham because he is a little bit more detailed on the realtime streaming analytics use cases, which I think is where we're going to get to. But to answer that question, it really depends on the size and the complexity of your business. At the very large enterprise, Dave, Yes, a hundred percent. This needs to happen. There is complexity, there is not only complexity in the compute and actually deploying the applications, but the governance and the security around them. But for lower end or, you know, business use cases, and for smaller businesses, it's a little less necessary. You certainly don't need to have all of these. Some of the things that come into mind from the interviews that Darren and I have done are, you know, financial services, if you're doing real-time trading, anything that has real-time data metrics involved in your transactions, is going to be necessary. And another use case that we hear about is in online travel agencies. So I think it is very relevant, the complexity does need to be solved, and I'll allow Darren to explain a little bit more about how that's used from an analytics perspective. >> Yeah, go for it. >> Yeah, exactly. I mean, I think any modern, you know, multinational company that's going to have a footprint in the US and Europe, in China, or works in different areas like manufacturing, where you're probably going to have on-prem instances that will stay on-prem forever, for various performance reasons. You have these complicated governance and security and regulatory issues. So inherently, I think, large multinational companies and or companies that are in certain areas like finance or in, you know, online e-commerce, or things that need real-time data, they inherently are going to have a very complex environment that's going to need to be managed in some kind of cleaner way. You know, they're looking for one door to open, one pane of glass to look at, one thing to do to manage these multi points. And, streaming's a good example of that. I mean, not every organization has a real-time streaming use case, and may not ever, but a lot of organizations do, a lot of industries do. And so there's this need to use, you know, they want to use open-source tools, they want to use Apache Kafka for instance. They want to use different megacloud vendors offerings, like Google Pub/Sub or you know, Amazon Kinesis Firehose. They have all these different pieces they want to use for different use cases at different stages of maturity or proof of concept, you name it. They're going to have to have this complexity. And I think that's why we're seeing this need, to have sort of this supercloud concept, to juggle all this, to wrangle all of it. 'Cause the reality is, it's complex and you have to simplify it somehow. >> Great, thanks you guys. All right, let's bring up the graphic, and take a look. Anybody who follows the breaking analysis, which is co-branded with ETR Cube Insights powered by ETR, knows we like to bring data to the table. ETR does amazing survey work every quarter, 1200 plus 1500 practitioners that that answer a number of questions. The vertical axis here is net score, which is ETR's proprietary methodology, which is a measure of spending momentum, spending velocity. And the horizontal axis here is overlap, but it's the presence pervasiveness, and the dataset, the ends, that table insert on the bottom right shows you how the dots are plotted, the net score and then the ends in the survey. And what we've done is we've plotted a bunch of the so-called supercloud suspects, let's start in the upper right, the cloud platforms. Without these hyperscale clouds, you can't have a supercloud. And as always, Azure and AWS, up and to the right, it's amazing we're talking about, you know, 80 plus billion dollar company in AWS. Azure's business is, if you just look at the IaaS is in the 50 billion range, I mean it's just amazing to me the net scores here. Anything above 40% we consider highly elevated. And you got Azure and you got Snowflake, Databricks, HashiCorp, we'll get to them. And you got AWS, you know, right up there at that size, it's quite amazing. With really big ends as well, you know, 700 plus ends in the survey. So, you know, kind of half the survey actually has these platforms. So my question to you guys is, what are you seeing in terms of cloud adoption within the big three cloud players? I wonder if you could could comment, maybe Erik, you could start. >> Yeah, sure. Now we're talking data, now I'm happy. So yeah, we'll get into some of it. Right now, the January, 2023 TSIS is approaching 1500 survey respondents. One caveat, it's not closed yet, it will close on Friday, but with an end that big we are over statistically significant. We also recently did a cloud survey, and there's a couple of key points on that I want to get into before we get into individual vendors. What we're seeing here, is that annual spend on cloud infrastructure is expected to grow at almost a 70% CAGR over the next three years. The percentage of those workloads for cloud infrastructure are expected to grow over 70% as three years as well. And as you mentioned, Azure and AWS are still dominant. However, we're seeing some share shift spreading around a little bit. Now to get into the individual vendors you mentioned about, yes, Azure is still number one, AWS is number two. What we're seeing, which is incredibly interesting, CloudFlare is number three. It's actually beating GCP. That's the first time we've seen it. What I do want to state, is this is on net score only, which is our measure of spending intentions. When you talk about actual pervasion in the enterprise, it's not even close. But from a spending velocity intention point of view, CloudFlare is now number three above GCP, and even Salesforce is creeping up to be at GCPs level. So what we're seeing here, is a continued domination by Azure and AWS, but some of these other players that maybe might fit into your moniker. And I definitely want to talk about CloudFlare more in a bit, but I'm going to stop there. But what we're seeing is some of these other players that fit into your Supercloud moniker, are starting to creep up, Dave. >> Yeah, I just want to clarify. So as you also know, we track IaaS and PaaS revenue and we try to extract, so AWS reports in its quarterly earnings, you know, they're just IaaS and PaaS, they don't have a SaaS play, a little bit maybe, whereas Microsoft and Google include their applications and so we extract those out and if you do that, AWS is bigger, but in the surveys, you know, customers, they see cloud, SaaS to them as cloud. So that's one of the reasons why you see, you know, Microsoft as larger in pervasion. If you bring up that survey again, Alex, the survey results, you see them further to the right and they have higher spending momentum, which is consistent with what you see in the earnings calls. Now, interesting about CloudFlare because the CEO of CloudFlare actually, and CloudFlare itself uses the term supercloud basically saying, "Hey, we're building a new type of internet." So what are your thoughts? Do you have additional information on CloudFlare, Erik that you want to share? I mean, you've seen them pop up. I mean this is a really interesting company that is pretty forward thinking and vocal about how it's disrupting the industry. >> Sure, we've been tracking 'em for a long time, and even from the disruption of just a traditional CDN where they took down Akamai and what they're doing. But for me, the definition of a true supercloud provider can't just be one instance. You have to have multiple. So it's not just the cloud, it's networking aspect on top of it, it's also security. And to me, CloudFlare is the only one that has all of it. That they actually have the ability to offer all of those things. Whereas you look at some of the other names, they're still piggybacking on the infrastructure or platform as a service of the hyperscalers. CloudFlare does not need to, they actually have the cloud, the networking, and the security all themselves. So to me that lends credibility to their own internal usage of that moniker Supercloud. And also, again, just what we're seeing right here that their net score is now creeping above AGCP really does state it. And then just one real last thing, one of the other things we do in our surveys is we track adoption and replacement reasoning. And when you look at Cloudflare's adoption rate, which is extremely high, it's based on technical capabilities, the breadth of their feature set, it's also based on what we call the ability to avoid stack alignment. So those are again, really supporting reasons that makes CloudFlare a top candidate for your moniker of supercloud. >> And they've also announced an object store (chuckles) and a database. So, you know, that's going to be, it takes a while as you well know, to get database adoption going, but you know, they're ambitious and going for it. All right, let's bring the chart back up, and I want to focus Darren in on the ecosystem now, and really, we've identified Snowflake and Databricks, it's always fun to talk about those guys, and there are a number of other, you know, data platforms out there, but we use those too as really proxies for leaders. We got a bunch of the backup guys, the data protection folks, Rubric, Cohesity, and Veeam. They're sort of in a cluster, although Rubric, you know, ahead of those guys in terms of spending momentum. And then VMware, Tanzu and Red Hat as sort of the cross cloud platform. But I want to focus, Darren, on the data piece of it. We're seeing a lot of activity around data sharing, governed data sharing. Databricks is using Delta Sharing as their sort of place, Snowflakes is sort of this walled garden like the app store. What are your thoughts on, you know, in the context of Supercloud, cross cloud capabilities for the data platforms? >> Yeah, good question. You know, I think Databricks is an interesting player because they sort of have made some interesting moves, with their Data Lakehouse technology. So they're trying to kind of complicate, or not complicate, they're trying to take away the complications of, you know, the downsides of data warehousing and data lakes, and trying to find that middle ground, where you have the benefits of a managed, governed, you know, data warehouse environment, but you have sort of the lower cost, you know, capability of a data lake. And so, you know, Databricks has become really attractive, especially by data scientists, right? We've been tracking them in the AI machine learning sector for quite some time here at ETR, attractive for a data scientist because it looks and acts like a lake, but can have some managed capabilities like a warehouse. So it's kind of the best of both worlds. So in some ways I think you've seen sort of a data science driver for the adoption of Databricks that has now become a little bit more mainstream across the business. Snowflake, maybe the other direction, you know, it's a cloud data warehouse that you know, is starting to expand its capabilities and add on new things like Streamlit is a good example in the analytics space, with apps. So you see these tools starting to branch and creep out a bit, but they offer that sort of neutrality, right? We heard one IT decision maker we recently interviewed that referred to Snowflake and Databricks as the quote unquote Switzerland of what they do. And so there's this desirability from an organization to find these tools that can solve the complex multi-headed use-case of data and analytics, which every business unit needs in different ways. And figure out a way to do that, an elegant way that's governed and centrally managed, that federated kind of best of both worlds that you get by bringing the data close to the business while having a central governed instance. So these tools are incredibly powerful and I think there's only going to be room for growth, for those two especially. I think they're going to expand and do different things and maybe, you know, join forces with others and a lot of the power of what they do well is trying to define these connections and find these partnerships with other vendors, and try to be seen as the nice add-on to your existing environment that plays nicely with everyone. So I think that's where those two tools are going, but they certainly fit this sort of label of, you know, trying to be that supercloud neutral, you know, layer that unites everything. >> Yeah, and if you bring the graphic back up, please, there's obviously big data plays in each of the cloud platforms, you know, Microsoft, big database player, AWS is, you know, 11, 12, 15, data stores. And of course, you know, BigQuery and other, you know, data platforms within Google. But you know, I'm not sure the big cloud guys are going to go hard after so-called supercloud, cross-cloud services. Although, we see Oracle getting in bed with Microsoft and Azure, with a database service that is cross-cloud, certainly Google with Anthos and you know, you never say never with with AWS. I guess what I would say guys, and I'll I'll leave you with this is that, you know, just like all players today are cloud players, I feel like anybody in the business or most companies are going to be so-called supercloud players. In other words, they're going to have a cross-cloud strategy, they're going to try to build connections if they're coming from on-prem like a Dell or an HPE, you know, or Pure or you know, many of these other companies, Cohesity is another one. They're going to try to connect to their on-premise states, of course, and create a consistent experience. It's natural that they're going to have sort of some consistency across clouds. You know, the big question is, what's that spectrum look like? I think on the one hand you're going to have some, you know, maybe some rudimentary, you know, instances of supercloud or maybe they just run on the individual clouds versus where Snowflake and others and even beyond that are trying to go with a single global instance, basically building out what I would think of as their own cloud, and importantly their own ecosystem. I'll give you guys the last thought. Maybe you could each give us, you know, closing thoughts. Maybe Darren, you could start and Erik, you could bring us home on just this entire topic, the future of cloud and data. >> Yeah, I mean I think, you know, two points to make on that is, this question of these, I guess what we'll call legacy on-prem players. These, mega vendors that have been around a long time, have big on-prem footprints and a lot of people have them for that reason. I think it's foolish to assume that a company, especially a large, mature, multinational company that's been around a long time, it's foolish to think that they can just uproot and leave on-premises entirely full scale. There will almost always be an on-prem footprint from any company that was not, you know, natively born in the cloud after 2010, right? I just don't think that's reasonable anytime soon. I think there's some industries that need on-prem, things like, you know, industrial manufacturing and so on. So I don't think on-prem is going away, and I think vendors that are going to, you know, go very cloud forward, very big on the cloud, if they neglect having at least decent connectors to on-prem legacy vendors, they're going to miss out. So I think that's something that these players need to keep in mind is that they continue to reach back to some of these players that have big footprints on-prem, and make sure that those integrations are seamless and work well, or else their customers will always have a multi-cloud or hybrid experience. And then I think a second point here about the future is, you know, we talk about the three big, you know, cloud providers, the Google, Microsoft, AWS as sort of the opposite of, or different from this new supercloud paradigm that's emerging. But I want to kind of point out that, they will always try to make a play to become that and I think, you know, we'll certainly see someone like Microsoft trying to expand their licensing and expand how they play in order to become that super cloud provider for folks. So also don't want to downplay them. I think you're going to see those three big players continue to move, and take over what players like CloudFlare are doing and try to, you know, cut them off before they get too big. So, keep an eye on them as well. >> Great points, I mean, I think you're right, the first point, if you're Dell, HPE, Cisco, IBM, your strategy should be to make your on-premise state as cloud-like as possible and you know, make those differences as minimal as possible. And you know, if you're a customer, then the business case is going to be low for you to move off of that. And I think you're right. I think the cloud guys, if this is a real problem, the cloud guys are going to play in there, and they're going to make some money at it. Erik, bring us home please. >> Yeah, I'm going to revert back to our data and this on the macro side. So to kind of support this concept of a supercloud right now, you know Dave, you and I know, we check overall spending and what we're seeing right now is total year spent is expected to only be 4.6%. We ended 2022 at 5% even though it began at almost eight and a half. So this is clearly declining and in that environment, we're seeing the top two strategies to reduce spend are actually vendor consolidation with 36% of our respondents saying they're actively seeking a way to reduce their number of vendors, and consolidate into one. That's obviously supporting a supercloud type of play. Number two is reducing excess cloud resources. So when I look at both of those combined, with a drop in the overall spending reduction, I think you're on the right thread here, Dave. You know, the overall macro view that we're seeing in the data supports this happening. And if I can real quick, couple of names we did not touch on that I do think deserve to be in this conversation, one is HashiCorp. HashiCorp is the number one player in our infrastructure sector, with a 56% net score. It does multiple things within infrastructure and it is completely agnostic to your environment. And if we're also speaking about something that's just a singular feature, we would look at Rubric for data, backup, storage, recovery. They're not going to offer you your full cloud or your networking of course, but if you are looking for your backup, recovery, and storage Rubric, also number one in that sector with a 53% net score. Two other names that deserve to be in this conversation as we watch it move and evolve. >> Great, thank you for bringing that up. Yeah, we had both of those guys in the chart and I failed to focus in on HashiCorp. And clearly a Supercloud enabler. All right guys, we got to go. Thank you so much for joining us, appreciate it. Let's keep this conversation going. >> Always enjoy talking to you Dave, thanks. >> Yeah, thanks for having us. >> All right, keep it right there for more content from Supercloud 2. This is Dave Valente for John Ferg and the entire Cube team. We'll be right back. (gentle synth music) (music fades)

>> From the Cube Studios in Palo Alto in Boston bringing you data-driven insights from the Cube and ETR. This is Breaking Analysis with Dave Vellante. >> The unraveling of market enthusiasm continued in Q4 of 2022 with the earnings reports from the US hyperscalers, the big three now all in. As we said earlier this year, even the cloud is an immune from the macro headwinds and the cracks in the armor that we saw from the data that we shared last summer, they're playing out into 2023. For the most part actuals are disappointing beyond expectations including our own. It turns out that our estimates for the big three hyperscaler's revenue missed by 1.2 billion or 2.7% lower than we had forecast from even our most recent November estimates. And we expect continued decelerating growth rates for the hyperscalers through the summer of 2023 and we don't think that's going to abate until comparisons get easier. Hello and welcome to this week's Wikibon Cube Insights powered by ETR. In this Breaking Analysis, we share our view of what's happening in cloud markets not just for the hyperscalers but other firms that have hitched a ride on the cloud. And we'll share new ETR data that shows why these trends are playing out tactics that customers are employing to deal with their cost challenges and how long the pain is likely to last. You know, riding the cloud wave, it's a two-edged sword. Let's look at the players that have gone all in on or are exposed to both the positive and negative trends of cloud. Look the cloud has been a huge tailwind for so many companies like Snowflake and Databricks, Workday, Salesforce, Mongo's move with Atlas, Red Hats Cloud strategy with OpenShift and so forth. And you know, the flip side is because cloud is elastic what comes up can also go down very easily. Here's an XY graphic from ETR that shows spending momentum or net score on the vertical axis and market presence in the dataset on the horizontal axis provision or called overlap. This is data from the January 2023 survey and that the red dotted lines show the positions of several companies that we've highlighted going back to January 2021. So let's unpack this for a bit starting with the big three hyperscalers. The first point is AWS and Azure continue to solidify their moat relative to Google Cloud platform. And we're going to get into this in a moment, but Azure and AWS revenues are five to six times that of GCP for IaaS. And at those deltas, Google should be gaining ground much faster than the big two. The second point on Google is notice the red line on GCP relative to its starting point. While it appears to be gaining ground on the horizontal axis, its net score is now below that of AWS and Azure in the survey. So despite its significantly smaller size it's just not keeping pace with the leaders in terms of market momentum. Now looking at AWS and Microsoft, what we see is basically AWS is holding serve. As we know both Google and Microsoft benefit from including SaaS in their cloud numbers. So the fact that AWS hasn't seen a huge downward momentum relative to a January 2021 position is one positive in the data. And both companies are well above that magic 40% line on the Y-axis, anything above 40% we consider to be highly elevated. But the fact remains that they're down as are most of the names on this chart. So let's take a closer look. I want to start with Snowflake and Databricks. Snowflake, as we reported from several quarters back came down to Earth, it was up in the 80% range in the Y-axis here. And it's still highly elevated in the 60% range and it continues to move to the right, which is positive but as we'll address in a moment it's customers can dial down consumption just as in any cloud. Now, Databricks is really interesting. It's not a public company, it never made it to IPO during the sort of tech bubble. So we don't have the same level of transparency that we do with other companies that did make it through. But look at how much more prominent it is on the X-axis relative to January 2021. And it's net score is basically held up over that period of time. So that's a real positive for Databricks. Next, look at Workday and Salesforce. They've held up relatively well, both inching to the right and generally holding their net scores. Same from Mongo, which is the brown dot above its name that says Elastic, it says a little gets a little crowded which Elastic's actually the blue dot above it. But generally, SaaS is harder to dial down, Workday, Salesforce, Oracles, SaaS and others. So it's harder to dial down because commitments have been made in advance, they're kind of locked in. Now, one of the discussions from last summer was as Mongo, less discretionary than analytics i.e. Snowflake. And it's an interesting debate but maybe Snowflake customers, you know, they're also generally committed to a dollar amount. So over time the spending is going to be there. But in the short term, yeah maybe Snowflake customers can dial down. Now that highlighted dotted red line, that bolded one is Datadog and you can see it's made major strides on the X-axis but its net score has decelerated quite dramatically. Openshift's momentum in the survey has dropped although IBM just announced that OpenShift has a a billion dollar ARR and I suspect what's happening there is IBM consulting is bundling OpenShift into its modernization projects. It's got a, that sort of captive base if you will. And as such it's probably not as top of mind to the respondents but I'll bet you the developers are certainly aware of it. Now the other really notable call out here is CloudFlare, We've reported on them earlier. Cloudflare's net score has held up really well since January of 2021. It really hasn't seen the downdraft of some of these others, but it's making major major moves to the right gaining market presence. We really like how CloudFlare is performing. And the last comment is on Oracle which as you can see, despite its much, much lower net score continues to gain ground in the market and thrive from a profitability standpoint. But the data pretty clearly shows that there's a downdraft in the market. Okay, so what's happening here? Let's dig deeper into this data. Here's a graphic from the most recent ETR drill down asking customers that said they were going to cut spending what technique they're using to do so. Now, as we've previously reported, consolidating redundant vendors is by far the most cited approach but there's two key points we want to make here. One is reducing excess cloud resources. As you can see in the bars is the second most cited technique and it's up from the previous polling period. The second we're not showing, you know directly but we've got some red call outs there. Reducing cloud costs jumps to 29% and 28% respectively in financial services and tech telco. And it's much closer to second. It's basically neck and neck with consolidating redundant vendors in those two industries. So they're being really aggressive about optimizing cloud cost. Okay, so as we said, cloud is great 'cause you can dial it up but it's just as easy to dial down. We've identified six factors that customers tell us are affecting their cloud consumption and there are probably more, if you got more we'd love to hear them but these are the ones that are fairly prominent that have hit our radar. First, rising mortgage rates mean banks are processing fewer loans means less cloud. The crypto crash means less trading activity and that means less cloud resources. Third lower ad spend has led companies to reduce not only you know, their ad buying but also their frequency of running their analytics and their calculations. And they're also often using less data, maybe compressing the timeframe of the corpus down to a shorter time period. Also very prominent is down to the bottom left, using lower cost compute instances. For example, Graviton from AWS or AMD chips and tiering storage to cheaper S3 or deep archived tiers. And finally, optimizing based on better pricing plans. So customers are moving from, you know, smaller companies in particular moving maybe from on demand or other larger companies that are experimenting using on demand or they're moving to spot pricing or reserved instances or optimized savings plans. That all lowers cost and that means less cloud resource consumption and less cloud revenue. Now in the days when everything was on prem CFOs, what would they do? They would freeze CapEx and IT Pros would have to try to do more with less and often that meant a lot of manual tasks. With the cloud it's much easier to move things around. It still takes some thinking and some effort but it's dramatically simpler to do so. So you can get those savings a lot faster. Now of course the other huge factor is you can cut or you can freeze. And this graphic shows data from a recent ETR survey with 159 respondents and you can see the meaningful uptick in hiring freezes, freezing new IT deployments and layoffs. And as we've been reporting, this has been trending up since earlier last year. And note the call out, this is especially prominent in retail sectors, all three of these techniques jump up in retail and that's a bit of a concern because oftentimes consumer spending helps the economy make a softer landing out of a pullback. But this is a potential canary in the coal mine. If retail firms are pulling back it's because consumers aren't spending as much. And so we're keeping a close eye on that. So let's boil this down to the market data and what this all means. So in this graphic we show our estimates for Q4 IaaS revenues compared to the "actual" IaaS revenues. And we say quote because AWS is the only one that reports, you know clean revenue and IaaS, Azure and GCP don't report actuals. Why would they? Because it would make them look even, you know smaller relative to AWS. Rather, they bury the figures in overall cloud which includes their, you know G-Suite for Google and all the Microsoft SaaS. And then they give us little tidbits about in Microsoft's case, Azure, they give growth rates. Google gives kind of relative growth of GCP. So, and we use survey data and you know, other data to try to really pinpoint and we've been covering this for, I don't know, five or six years ever since the cloud really became a thing. But looking at the data, we had AWS growing at 25% this quarter and it came in at 20%. So a significant decline relative to our expectations. AWS announced that it exited December, actually, sorry it's January data showed about a 15% mid-teens growth rate. So that's, you know, something we're watching. Azure was two points off our forecast coming in at 38% growth. It said it exited December in the 35% growth range and it said that it's expecting five points of deceleration off of that. So think 30% for Azure. GCP came in three points off our expectation coming in 35% and Alibaba has yet to report but we've shaved a bid off that forecast based on some survey data and you know what maybe 9% is even still not enough. Now for the year, the big four hyperscalers generated almost 160 billion of revenue, but that was 7 billion lower than what what we expected coming into 2022. For 2023, we're expecting 21% growth for a total of 193.3 billion. And while it's, you know, lower, you know, significantly lower than historical expectations it's still four to five times the overall spending forecast that we just shared with you in our predictions post of between 4 and 5% for the overall market. We think AWS is going to come in in around 93 billion this year with Azure closing in at over 71 billion. This is, again, we're talking IaaS here. Now, despite Amazon focusing investors on the fact that AWS's absolute dollar growth is still larger than its competitors. By our estimates Azure will come in at more than 75% of AWS's forecasted revenue. That's a significant milestone. AWS is operating margins by the way declined significantly this past quarter, dropping from 30% of revenue to 24%, 30% the year earlier to 24%. Now that's still extremely healthy and we've seen wild fluctuations like this before so I don't get too freaked out about that. But I'll say this, Microsoft has a marginal cost advantage relative to AWS because one, it has a captive cloud on which to run its massive software estate. So it can just throw software at its own cloud and two software marginal costs. Marginal economics despite AWS's awesomeness in high degrees of automation, software is just a better business. Now the upshot for AWS is the ecosystem. AWS is essentially in our view positioning very smartly as a platform for data partners like Snowflake and Databricks, security partners like CrowdStrike and Okta and Palo Alto and many others and SaaS companies. You know, Microsoft is more competitive even though AWS does have competitive products. Now of course Amazon's competitive to retail companies so that's another factor but generally speaking for tech players, Amazon is a really thriving ecosystem that is a secret weapon in our view. AWS happy to spin the meter with its partners even though it sells competitive products, you know, more so in our view than other cloud players. Microsoft, of course is, don't forget is hyping now, we're hearing a lot OpenAI and ChatGPT we reported last week in our predictions post. How OpenAI is shot up in terms of market sentiment in ETR's emerging technology company surveys and people are moving to Azure to get OpenAI and get ChatGPT that is a an interesting lever. Amazon in our view has to have a response. They have lots of AI and they're going to have to make some moves there. Meanwhile, Google is emphasizing itself as an AI first company. In fact, Google spent at least five minutes of continuous dialogue, nonstop on its AI chops during its latest earnings call. So that's an area that we're watching very closely as the buzz around large language models continues. All right, let's wrap up with some assumptions for 2023. We think SaaS players are going to continue to be sticky. They're going to be somewhat insulated from all these downdrafts because they're so tied in and customers, you know they make the commitment up front, you've got the lock in. Now having said that, we do expect some backlash over time on the onerous and generally customer unfriendly pricing models of most large SaaS companies. But that's going to play out over a longer period of time. Now for cloud generally and the hyperscalers specifically we do expect accelerating growth rates into Q3 but the amplitude of the demand swings from this rubber band economy, we expect to continue to compress and become more predictable throughout the year. Estimates are coming down, CEOs we think are going to be more cautious when the market snaps back more cautious about hiring and spending and as such a perhaps we expect a more orderly return to growth which we think will slightly accelerate in Q4 as comps get easier. Now of course the big risk to these scenarios is of course the economy, the FED, consumer spending, inflation, supply chain, energy prices, wars, geopolitics, China relations, you know, all the usual stuff. But as always with our partners at ETR and the Cube community, we're here for you. We have the data and we'll be the first to report when we see a change at the margin. Okay, that's a wrap for today. I want to thank Alex Morrison who's on production and manages the podcast, Ken Schiffman as well out of our Boston studio getting this up on LinkedIn Live. Thank you for that. Kristen Martin also and Cheryl Knight help get the word out on social media and in our newsletters. And Rob Hof is our Editor-in-Chief over at siliconangle.com. He does some great editing for us. Thank you all. Remember all these episodes are available as podcast. Wherever you listen, just search Breaking Analysis podcast. I publish each week on wikibon.com, at siliconangle.com where you can see all the data and you want to get in touch. Just all you can do is email me david.vellante@siliconangle.com or DM me @dvellante if you if you got something interesting, I'll respond. If you don't, it's either 'cause I'm swamped or it's just not tickling me. You can comment on our LinkedIn post as well. And please check out ETR.ai for the best survey data in the enterprise tech business. This is Dave Vellante for the Cube Insights powered by ETR. Thanks for watching and we'll see you next time on Breaking Analysis. (gentle upbeat music)

>> From "theCube" Studios in Palo Alto in Boston bringing you data-driven insights from "theCube" and ETR. This is "Breaking Analysis" with Dave Vellante. >> As an independent pure play company, Palo Alto Networks has earned its status as the leader in security. You can measure this in a variety of ways. Revenue, market cap, execution, ethos, and most importantly, conversations with customers generally. In CISO specifically, who consistently affirm this position. The company's on track to double its revenues in fiscal year 23 relative to fiscal year 2020. Despite macro headwinds, which are likely to carry through next year, Palo Alto owes its position to a clarity of vision and strong execution on a TAM expansion strategy through acquisitions and integration into its cloud and SaaS offerings. Hello and welcome to this week's "Wikibon Cube Insights" powered by ETR and this breaking analysis and ahead of Palo Alto Ignite the company's user conference, we bring you the next chapter on top of the last week's cybersecurity update. We're going to dig into the ETR data on Palo Alto Networks as we promised and provide a glimpse of what we're going to look for at "Ignite" and posit what Palo Alto needs to do to stay on top of the hill. Now, the challenges for cybersecurity professionals. Dead simple to understand. Solving it, not so much. This is a taxonomic eye test, if you will, from Optiv. It's one of our favorite artifacts to make the point the cybersecurity landscape is a mosaic of stovepipes. Security professionals have to work with dozens of tools many legacy combined with shiny new toys to try and keep up with the relentless pace of innovation catalyzed by the incredibly capable well-funded and motivated adversaries. Cybersecurity is an anomalous market in that the leaders have low single digit market shares. Think about that. Cisco at one point held 60% market share in the networking business and it's still deep into the 40s. Oracle captures around 30% of database market revenue. EMC and storage at its peak had more than 30% of that market. Even Dell's PC market shares, you know, in the mid 20s or even over that from a revenue standpoint. So cybersecurity from a market share standpoint is even more fragmented perhaps than the software industry. Okay, you get the point. So despite its position as the number one player Palo Alto might have maybe three maybe 4% of the total market, depending on what you use as your denominator, but just a tiny slice. So how is it that we can sit here and declare Palo Alto as the undisputed leader? Well, we probably wouldn't go that far. They probably have quite a bit of competition. But this CISO from a recent ETR round table discussion with our friend Eric Bradley, summed up Palo Alto's allure. We thought pretty well. The question was why Palo Alto Networks? Here's the answer. Because of its completeness as a platform, its ability to integrate with its own products or they acquire, integrate then rebrand them as their own. We've looked at other vendors we just didn't think they were as mature and we already had implemented some of the Palo Alto tools like the firewalls and stuff and we thought why not go holistically with the vendor a single throat to choke, if you will, if stuff goes wrong. And I think that was probably the primary driver and familiarity with the tools and the resources that they provided. Now here's another stat from ETR's Eric Bradley. He gave us a glimpse of the January survey that's in the field now. The percent of IT buyers stating that they plan to consolidate redundant vendors, it went from 34% in the October survey and now stands at 44%. So we fo we feel this bodes well for consolidators like Palo Alto networks. And the same is true from Microsoft's kind of good enough approach. It should also be true for CrowdStrike although last quarter we saw softness reported on in their SMB market, whereas interestingly MongoDB actually saw consistent strength from its SMB and its self-serve. So that's something that we're watching very closely. Now, Palo Alto Networks has held up better than most of its peers in the stock market. So let's take a look at that real quick. This chart gives you a sense of how well. It's a one year comparison of Palo Alto with the bug ETF. That's the cyber basket that we like to compare often CrowdStrike, Zscaler, and Okta. Now remember Palo Alto, they didn't run up as much as CrowdStrike, ZS and Okta during the pandemic but you can see it's now down unquote only 9% for the year. Whereas the cyber basket ETF is off 27% roughly in line with the NASDAQ. We're not showing that CrowdStrike down 44%, Zscaler down 61% and Okta off a whopping 72% in the past 12 months. Now as we've indicated, Palo Alto is making a strong case for consolidating point tools and we think it will have a much harder time getting customers to switch off of big platforms like Cisco who's another leader in network security. But based on the fragmentation in the market there's plenty of room to grow in our view. We asked breaking analysis contributor Chip Simington for his take on the technicals of the stock and he said that despite Palo Alto's leadership position it doesn't seem to make much difference these days. It's all about interest rates. And even though this name has performed better than its peers, it looks like the stock wants to keep testing its 52 week lows, but he thinks Palo Alto got oversold during the last big selloff. And the fact that the company's free cash flow is so strong probably keeps it at the one 50 level or above maybe bouncing around there for a while. If it breaks through that under to the downside it's ne next test is at that low of around one 40 level. So thanks for that, Chip. Now having get that out of the way as we said on the previous chart Palo Alto has strong opinions, it's founder and CTO, Nir Zuk, is extremely clear on that point of view. So let's take a look at how Palo Alto got to where it is today and how we think you should think about his future. The company was founded around 18 years ago as a network security company focused on what they called NextGen firewalls. Now, what Palo Alto did was different. They didn't try to stuff a bunch of functionality inside of a hardware box. Rather they layered network security functions on top of its firewalls and delivered value as a service through software running at the time in its own cloud. So pretty obvious today, but forward thinking for the time and now they've moved to a more true cloud native platform and much more activity in the public cloud. In February, 2020, right before the pandemic we reported on the divergence in market values between Palo Alto and Fort Net and we cited some challenges that Palo Alto was happening having transitioning to a cloud native model. And at the time we said we were confident that Palo Alto would make it through the knot hole. And you could see from the previous chart that it has. So the company's architectural approach was to do the heavy lifting in the cloud. And this eliminates the need for customers to deploy sensors on prem or proxies on prem or sandboxes on prem sandboxes, you know for instance are vulnerable to overwhelming attacks. Think about it, if you're a sandbox is on prem you're not going to be updating that every day. No way. You're probably not going to updated even every week or every month. And if the capacity of your sandbox is let's say 20,000 files an hour you know a hacker's just going to turn up the volume, it'll overwhelm you. They'll send a hundred thousand emails attachments into your sandbox and they'll choke you out and then they'll have the run of the house while you're trying to recover. Now the cloud doesn't completely prevent that but what it does, it definitely increases the hacker's cost. So they're going to probably hit some easier targets and that's kind of the objective of security firms. You know, increase the denominator on the ROI. All right, the next thing that Palo Alto did is start acquiring aggressively, I think we counted 17 or 18 acquisitions to expand the TAM beyond network security into endpoint CASB, PaaS security, IaaS security, container security, serverless security, incident response, SD WAN, CICD pipeline security, attack service management, supply chain security. Just recently with the acquisition of Cider Security and Palo Alto by all accounts takes the time to integrate into its cloud and SaaS platform called Prisma. Unlike many acquisitive companies in the past EMC was a really good example where you ended up with a kind of a Franken portfolio. Now all this leads us to believe that Palo Alto wants to be the consolidator and is in a good position to do so. But beyond that, as multi-cloud becomes more prevalent and more of a strategy customers tell us they want a consistent experience across clouds. And is going to be the same by the way with IoT. So of the next wave here. Customers don't want another stove pipe. So we think Palo Alto is in a good position to build what we call the security super cloud that layer above the clouds that brings a common experience for devs and operational teams. So of course the obvious question is this, can Palo Alto networks continue on this path of acquire and integrate and still maintain best of breed status? Can it? Will it? Does it even have to? As Holger Mueller of Constellation Research and I talk about all the time integrated suites seem to always beat best of breed in the long run. We'll come back to that. Now, this next graphic that we're going to show you underscores this question about portfolio. Here's a picture and I don't expect you to digest it all but it's a screen grab of Palo Alto's product and solutions portfolios, network cloud, network security rather, cloud security, Sassy, CNAP, endpoint unit 42 which is their threat intelligence platform and every imaginable security service and solution for customers. Well, maybe not every, I'm sure there's more to come like supply chain with the recent Cider acquisition and maybe more IoT beyond ZingBox and earlier acquisition but we're sure there will be more in the future both organic and inorganic. Okay, let's bring in more of the ETR survey data. For those of you who don't know ETR, they are the number one enterprise data platform surveying thousands of end customers every quarter with additional drill down surveys and customer round tables just an awesome SaaS enabled platform. And here's a view that shows net score or spending momentum on the vertical axis in provision or presence within the ETR data set on the horizontal axis. You see that red dotted line at 40%. Anything at or over that indicates a highly elevated net score. And as you can see Palo Alto is right on that line just under. And I'll give you another glimpse it looks like Palo Alto despite the macro may even just edge up a bit in the next survey based on the glimpse that Eric gave us. Now those colored bars in the bottom right corner they show the breakdown of Palo Alto's net score and underscore the methodology that ETR uses. The lime green is new customer adoptions, that's 7%. The forest green at 38% represents the percent of customers that are spending 6% or more on Palo Alto solutions. The gray is at that 40 or 8% that's flat spending plus or minus 5%. The pinkish at 5% is spending is down on Palo Alto network products by 6% or worse. And the bright red at only 2% is churn or defections. Very low single digit numbers for Palo Alto, that's a real positive. What you do is you subtract the red from the green and you get a net score of 38% which is very good for a company of Palo Alto size. And we'll note this is based on just under 400 responses in the ETR survey that are Palo Alto customers out of around 1300 in the total survey. It's a really good representation of Palo Alto. And you can see the other leading companies like CrowdStrike, Okta, Zscaler, Forte, Cisco they loom large with similar aspirations. Well maybe not so much Okta. They don't necessarily rule want to rule the world. They want to rule identity and of course the ever ubiquitous Microsoft in the upper right. Now drilling deeper into the ETR data, let's look at how Palo Alto has progressed over the last three surveys in terms of market presence in the survey. This view of the data shows provision in the data going back to October, 2021, that's the gray bars. The blue is July 22 and the yellow is the latest survey from October, 2022. Remember, the January survey is currently in the field. Now the leftmost set of data there show size a company. The middle set of data shows the industry for a select number of industries in the right most shows, geographic region. Notice anything, yes, Palo Alto up across the board relative to both this past summer and last fall. So that's pretty impressive. Palo Alto network CEO, Nikesh Aurora, stressed on the last earnings call that the company is seeing somewhat elongated deal approvals and sometimes splitting up size of deals. He's stressed that certain industries like energy, government and financial services continue to spend. But we would expect even a pullback there as companies get more conservative. But the point is that Nikesh talked about how they're hiring more sales pros to work the pipeline because they understand that they have to work harder to pull deals forward 'cause they got to get more approvals and they got to increase the volume that's coming through the pipeline to account for the possibility that certain companies are going to split up the deals, you know, large deals they want to split into to smaller bite size chunks. So they're really going hard after they go to market expansion to account for that. All right, so we're going to wrap by sharing what we expect and what we're going to probe for at Palo Alto Ignite next week, Lisa Martin and I will be hosting "theCube" and here's what we'll be looking for. First, it's a four day event at the MGM with the meat of the program on days two and three. That's day two was the big keynote. That's when we'll start our broadcasting, we're going for two days. Now our understanding is we've never done Palo Alto Ignite before but our understanding it's a pretty technically oriented crowd that's going to be eager to hear what CTO and founder Nir Zuk has to say. And as well CEO Nikesh Aurora and as in addition to longtime friend of "theCube" and current president, BJ Jenkins, he's going to be speaking. Wendy Whitmore runs Unit 42 and is going to be several other high profile Palo Alto execs, as well, Thomas Kurian from Google is a featured speaker. Lee Claridge, who is Palo Alto's, chief product officer we think is going to be giving the audience heavy doses of Prisma Cloud and Cortex enhancements. Now, Cortex, you might remember, came from an acquisition and does threat detection and attack surface management. And we're going to hear a lot about we think about security automation. So we'll be listening for how Cortex has been integrated and what kind of uptake that it's getting. We've done some, you know, modeling in from the ETR. Guys have done some modeling of cortex, you know looks like it's got a lot of upside and through the Palo Alto go to market machine, you know could really pick up momentum. That's something that we'll be probing for. Now, one of the other things that we'll be watching is pricing. We want to talk to customers about their spend optimization, their spending patterns, their vendor consolidation strategies. Look, Palo Alto is a premium offering. It charges for value. It's expensive. So we also want to understand what kind of switching costs are customers willing to absorb and how onerous they are and what's the business case look like? How are they thinking about that business case. We also want to understand and really probe on how will Palo Alto maintain best of breed as it continues to acquire and integrate to expand its TAM and appeal as that one-stop shop. You know, can it do that as we talked about before. And will it do that? There's also an interesting tension going on sort of changing subjects here in security. There's a guy named Edward Hellekey who's been in "theCube" before. He hasn't been in "theCube" in a while but he's a security pro who has educated us on the nuances of protecting data privacy, public policy, how it varies by region and how complicated it is relative to security. Because securities you technically you have to show a chain of custody that proves unequivocally, for example that data has been deleted or scrubbed or that metadata does. It doesn't include any residual private data that violates the laws, the local laws. And the tension is this, you need good data and lots of it to have good security, really the more the better. But government policy is often at odds in a major blocker to sharing data and it's getting more so. So we want to understand this tension and how companies like Palo Alto are dealing with it. Our customers testing public policy in courts we think not quite yet, our government's making exceptions and policies like GDPR that favor security over data privacy. What are the trade-offs there? And finally, one theme of this breaking analysis is what does Palo Alto have to do to stay on top? And we would sum it up with three words. Ecosystem, ecosystem, ecosystem. And we said this at CrowdStrike Falcon in September that the one concern we had was the pace of ecosystem development for CrowdStrike. Is collaboration possible with competitors? Is being adopted aggressively? Is Palo Alto being adopted aggressively by global system integrators? What's the uptake there? What about developers? Look, the hallmark of a cloud company which Palo Alto is a cloud security company is a thriving ecosystem that has entries into and exits from its platform. So we'll be looking at what that ecosystem looks like how vibrant and inclusive it is where the public clouds fit and whether Palo Alto Networks can really become the security super cloud. Okay, that's a wrap stop by next week. If you're in Vegas, say hello to "theCube" team. We have an unbelievable lineup on the program. Now if you're not there, check out our coverage on theCube.net. I want to thank Eric Bradley for sharing a glimpse on short notice of the upcoming survey from ETR and his thoughts. And as always, thanks to Chip Symington for his sharp comments. Want to thank Alex Morrison, who's on production and manages the podcast Ken Schiffman as well in our Boston studio, Kristen Martin and Cheryl Knight they help get the word out on social and of course in our newsletters, Rob Hoof, is our editor in chief over at Silicon Angle who does some awesome editing, thank you to all. Remember all these episodes they're available as podcasts. Wherever you listen, all you got to do is search "Breaking Analysis" podcasts. I publish each week on wikibon.com and silicon angle.com where you can email me at david.valante@siliconangle.com or dm me at D Valante or comment on our LinkedIn post. And please do check out etr.ai. They've got the best survey data in the enterprise tech business. This is Dave Valante for "theCube" Insights powered by ETR. Thanks for watching. We'll see you next week on "Ignite" or next time on "Breaking Analysis". (upbeat music)

(upbeat music) >> Hello everyone, welcome to this CUBE Showcase, accelerating business transformation with VMware Cloud on AWS. It's a solution innovation conversation with two great guests, Fred Wurden, VP of Commercial Services at AWS and Narayan Bharadwaj, who's the VP and General Manager of Cloud Solutions at VMware. Gentlemen, thanks for joining me on the showcase. >> Great to be here. >> Great. Thanks for having us on. It's a great topic. >> We've been covering this VMware cloud on AWS since the launch going back and it's been amazing to watch the evolution from people saying, Oh, it's the worst thing I've ever seen. What's this mean? And the press were not really on board with the vision, but as it played out as you guys had announced together, it did work out great for VMware. It did work out great for AWS and it continues two years later and I want to just get an update from you guys on where you guys see this has been going. I'll see multiple years. Where is the evolution of the solution as we are right now coming off VMware explorer just recently and going in to re:Invent, which is only a couple weeks away Feels like tomorrow. But as we prepare, a lot going on. Where are we with the evolution of the solution? >> I mean, first thing I want to say is October 2016 was a seminal moment in the history of IT. When Pat Gelsinger and Andy Jassy came together to announce this. And I think John, you were there at the time I was there. It was a great, great moment. We launched the solution in 2017 year after that at VMworld, back when we called it VMworld. I think we have gone from strength to strength. One of the things that has really mattered to us is we've learned from AWS also in the processes, this notion of working backwards. So we really, really focused on customer feedback as we built a service offering now five years old. Pretty remarkable journey. In the first years we tried to get across all the regions, that was a big focus because there was so much demand for it. In the second year, we started going really on enterprise great features. We invented this pretty awesome feature called Stretched Clusters, where you could stretch a vSphere cluster using vSAN and NSX-T across to AZs in the same region. Pretty phenomenal four nines of availability that applications started to get with that particular feature. And we kept moving forward, all kinds of integration with AWS Direct Connect, Transit Gateways with our own advanced networking capabilities. Along the way, Disaster Recovery, we punched out two new services just focused on that. And then more recently we launched our Outposts partnership. We were up on stage at re:Invent, again, with Pat and Andy announcing AWS Outposts and the VMware flavor of that, VMware Cloud and AWS Outposts. I think it's been significant growth in our federal sector as well with our federal and high certification more recently. So all in all, we are super excited. We're five years old. The customer momentum is really, really strong and we are scaling the service massively across all geos and industries. >> That's great, great update. And I think one of the things that you mentioned was how the advantages you guys got from that relationship. And this has been the theme for AWS, man, since I can remember from day one, Fred. You guys do the heavy lifting as you always say for the customers. Here, VMware comes on board. Takes advantage of the AWS and just doesn't miss a beat. Continues to move their workloads that everyone's using, vSphere, and these are big workloads on AWS. What's the AWS perspective on this? How do you see it? >> Yeah, it's pretty fascinating to watch how fast customers can actually transform and move when you take the skill set that they're familiar with and the advanced capabilities that they've been using on-prem and then overlay it on top of the AWS infrastructure that's evolving quickly and building out new hardware and new instances we'll talk about. But that combined experience between both of us on a jointly engineered solution to bring the best security and the best features that really matter for those workloads drive a lot of efficiency and speed for the customers. So it's been well received and the partnership is stronger than ever from an engineering standpoint, from a business standpoint. And obviously it's been very interesting to look at just how we stay day one in terms of looking at new features and work and responding to what customers want. So pretty excited about just seeing the transformation and the speed that which customers can move to while at VMC. >> That's a great value proposition. We've been talking about that in context to anyone building on top of the cloud. They can have their own supercloud, as we call it, if you take advantage of all the CapEx and investment Amazon's made and AWS has made and continues to make in performance IaaS and PaaS, all great stuff. I have to ask you guys both as you guys see this going to the next level, what are some of the differentiations you see around the service compared to other options in the market? What makes it different? What's the combination? You mentioned jointly engineered. What are some of the key differentiators of the service compared to others? >> Yeah. I think one of the key things Fred talked about is this jointly engineered notion. Right from day one we were the early adopters of the AWS Nitro platform. The reinvention of EC2 back five years ago. And so we have been having a very, very strong engineering partnership at that level. I think from a VMware customer standpoint, you get the full software-defined data center, compute storage networking on EC2, bare metal across all regions. You can scale that elastically up and down. It's pretty phenomenal just having that consistency globally on AWS EC2 global regions. Now the other thing that's a real differentiator for us, what customers tell us about is this whole notion of a managed service. And this was somewhat new to VMware. But we took away the pain of this undifferentiated heavy lifting where customers had to provision rack stack hardware, configure the software on top, and then upgrade the software and the security patches on top. So we took away all of that pain as customers transitioned to VMware cloud in AWS. In fact, my favorite story from last year when we were all going through the Log4j debacle. Industry was just going through that. Favorite proof point from customers was before they could even race this issue to us, we sent them a notification saying, we already patched all of your systems, no action from you. The customers were super thrilled. I mean, these are large banks. Many other customers around the world were super thrilled they had to take no action, but a pretty incredible industry challenge that we were all facing. >> Narayan, that's a great point. The whole managed service piece brings up the security. You kind of teasing at it, but there's always vulnerabilities that emerge when you are doing complex logic. And as you grow your solutions, there's more bits. Fred, we were commenting before we came on camera more bits than ever before and at the physics layer too, as well as the software. So you never know when there's going to be a zero-day vulnerability out there. It happens. We saw one with Fortinet this week. This came out of the woodwork. But moving fast on those patches, it's huge. This brings up the whole support angle. I wanted to ask you about how you guys are doing that as well, because to me, we see the value when we talk to customers on theCUBE about this. It was a real easy understanding of what the cloud means to them with VMware now with the AWS. But the question that comes up that we want to get more clarity on is how do you guys handle support together? >> Well, what's interesting about this is that it's done mutually. We have dedicated support teams on both sides that work together pretty seamlessly to make sure that whether there's a issue at any layer, including all the way up into the app layer, as you think about some of the other workloads like SAP, we'll go end-to-end and make sure that we support the customer regardless of where the particular issue might be for them. And on top of that, we look at where we're improving reliability in as a first order of principle between both companies. So from availability and reliability standpoint, it's top of mind and no matter where the particular item might land, we're going to go help the customer resolve that. It works really well. >> On the VMware side, what's been the feedback there? What are some of the updates? >> Yeah, I think, look, I mean, VMware owns and operates the service, but we work phenomenal backend relationship with AWS. Customers call VMware for the service or any issues. And then we have a awesome relationship with AWS on the backend for support issues or any hardware issues. The key management that we jointly do. All of the hard problems that customers don't have to worry about. I think on the front end, we also have a really good group of solution architects across the companies that help to really explain the solution, do complex things like cloud migration, which is much, much easier with the VMware Cloud in AWS. We're presenting that easy button to the public cloud in many ways. And so we have a whole technical audience across the two companies that are working with customers every single day. >> You had mentioned, I've got list here of some of the innovations. You mentioned the stretch clustering, getting the geos working, advanced network, Disaster Recovery, FedRAMP, public sector certifications, Outposts. All good, you guys are checking the boxes every year. You got a good accomplishments list there on the VMware AWS side here in this relationship. The question that I'm interested in is what's next? What recent innovations are you doing? Are you making investments in? What's on the list this year? What items will be next year? How do you see the new things, the list of accomplishments? People want to know what's next. They don't want to see stagnant growth here. They want to see more action as cloud continues to scale and modern applications cloud native. You're seeing more and more containers, more and more CI/CD pipelining with modern apps, put more pressure on the system. What's new? What's the new innovations? >> Absolutely. And I think as a five year old service offering, innovation is top of mind for us every single day. So just to call out a few recent innovations that we announced in San Francisco at VMware Explore. First of all, our new platform i4i.metal. It's isolate based. It's pretty awesome. It's the latest and greatest, all the speeds and feeds that we would expect from VMware and AWS at this point in our relationship. We announced two different storage options. This notion of working from customer feedback, allowing customers even more price reductions, really take off that storage and park it externally and separate that from compute. So two different storage offerings there. One is with AWS FSx with NetApp ONTAP, which brings in our NetApp partnership as well into the equation and really get that NetApp based really excited about this offering as well. And the second storage offering called VMware Cloud Flex Storage. VMware's own managed storage offering. Beyond that, we have done a lot of other innovations as well. I really wanted to talk about VMware Cloud Flex Compute where previously customers could only scale by hosts and a host is 36 to 48 cores, give or take. But with VMware Cloud Flex Compute, we are now allowing this notion of a resource defined compute model where customers can just get exactly the vCPU memory and storage that maps to the applications, however small they might be. So this notion of granularity is really a big innovation that we are launching in the market this year. And then last but not least, top of ransomware. Of course it's a hot topic in the industry. We are seeing many, many customers ask for this. We are happy to announce a new ransomware recovery with our VMware Cloud DR solution. A lot of innovation there and the way we are able to do machine learning and make sure the workloads that are covered from snapshots and backups are actually safe to use. So there's a lot of differentiation on that front as well. A lot of networking innovations with Project Northstar. Our ability to have layer four through layer seven, new SaaS services in that area as well. Keep in mind that the service already supports managed Kubernetes for containers. It's built in to the same clusters that have virtual machines. And so this notion of a single service with a great TCO for VMs and containers is sort at the heart of our (faintly speaking). >> The networking side certainly is a hot area to keep innovating on. Every year it's the same, same conversation, get better faster, networking more options there. The Flex Compute is interesting. If you don't mind me getting a quick clarification, could you explain the resource-defined versus hardware-defined? Because this is what we had saw at Explore coming out, that notion of resource-defined versus hardware-defined. What does that mean? >> Yeah, I mean I think we have been super successful in this hardware-defined notion. We we're scaling by the hardware unit that we present as software-defined data centers. And so that's been super successful. But customers wanted more, especially customers in different parts of the world wanted to start even smaller and grow even more incrementally. Lower the cost even more. And so this is the part where resource-defined starts to be very, very interesting as a way to think about, here's my bag of resources exactly based on what the customers request before fiber machines, five containers. It's size exactly for that. And then as utilization grows, we elastically behind the scenes, we're able to grow it through policies. So that's a whole different dimension. That's a whole different service offering that adds value and customers are comfortable. They can go from one to the other. They can go back to that host based model if they so choose to. And there's a jump off point across these two different economic models. >> It's cloud flexibility right there. I like the name. Fred, let's get into some of the examples of customers, if you don't mind, let's get into some of the, we have some time. I want to unpack a little bit of what's going on with the customer deployments. One of the things we've heard again on theCUBE is from customers is they like the clarity of the relationship, they love the cloud positioning of it. And then what happens is they lift and shift the workloads and it's like feels great. It's just like we're running VMware on AWS and then they start consuming higher level services. That adoption next level happens and because it's in the cloud. So can you guys take us through some recent examples of customer wins or deployments where they're using VMware cloud on AWS on getting started and then how do they progress once they're there? How does it evolve? Can you just walk us through a couple use cases? >> Sure. Well, there's a couple. One, it's pretty interesting that like you said, as there's more and more bits, you need better and better hardware and networking. And we're super excited about the i4 and the capabilities there in terms of doubling and or tripling what we're doing around lower variability on latency and just improving all the speeds. But what customers are doing with it, like the college in New Jersey, they're accelerating their deployment on onboarding over like 7,400 students over a six to eight month period. And they've really realized a ton of savings. But what's interesting is where and how they can actually grow onto additional native services too. So connectivity to any other services is available as they start to move and migrate into this. The options there obviously are tied to all the innovation that we have across any services, whether it's containerized and with what they're doing with Tanzu or with any other container and or services within AWS. So there's some pretty interesting scenarios where that data and or the processing, which is moved quickly with full compliance, whether it's in like healthcare or regulatory business is allowed to then consume and use things, for example, with Textract or any other really cool service that has monthly and quarterly innovations. So there's things that you just could not do before that are coming out and saving customers money and building innovative applications on top of their current app base in a rapid fashion. So pretty excited about it. There's a lot of examples. I think I probably don't have time to go into too many here. But that's actually the best part is listening to customers and seeing how many net new services and new applications are they actually building on top of this platform. >> Narayan, what's your perspective from the VMware side? 'Cause you guys have now a lot of headroom to offer customers with Amazon's higher level services and or whatever's homegrown where it's being rolled out 'cause you now have a lot of hybrid too. So what's your take on what's happening in with customers? >> I mean, it's been phenomenal. The customer adoption of this and banks and many other highly sensitive verticals are running production-grade applications, tier one applications on the service over the last five years. And so I have a couple of really good examples. S&P Global is one of my favorite examples. Large bank, they merge with IHS Markit, big conglomeration now. Both customers were using VMware Cloud and AWS in different ways. And with the use case, one of their use cases was how do I just respond to these global opportunities without having to invest in physical data centers? And then how do I migrate and consolidate all my data centers across the global, which there were many. And so one specific example for this company was how they migrated 1000 workloads to VMware Cloud and AWS in just six weeks. Pretty phenomenal if you think about everything that goes into a cloud migration process, people process technology. And the beauty of the technology going from VMware point A to VMware point B. The lowest cost, lowest risk approach to adopting VMware Cloud and AWS. So that's one of my favorite examples. There are many other examples across other verticals that we continue to see. The good thing is we are seeing rapid expansion across the globe, but constantly entering new markets with a limited number of regions and progressing our roadmap. >> It's great to see. I mean, the data center migrations go from months, many, many months to weeks. It's interesting to see some of those success stories. Congratulations. >> One of the other interesting fascinating benefits is the sustainability improvement in terms of being green. So the efficiency gains that we have both in current generation and new generation processors and everything that we're doing to make sure that when a customer can be elastic, they're also saving power, which is really critical in a lot of regions worldwide at this point in time. They're seeing those benefits. If you're running really inefficiently in your own data center, that is not a great use of power. So the actual calculators and the benefits to these workloads are pretty phenomenal just in being more green, which I like. We just all need to do our part there and this is a big part of it here. >> It's a huge point about the sustainability. Fred, I'm glad you called that out. The other one I would say is supply chain issue is another one. You see that constraints. I can't buy hardware. And the third one is really obvious, but no one really talks about it. It's security. I mean, I remember interviewing Steven Schmidt with that AWS and many years ago, this is like 2013 and at that time people were saying, the cloud's not secure. And he's like, listen, it's more secure in the cloud on-premise. And if you look at the security breaches, it's all about the on-premise data center vulnerabilities, not so much hardware. So there's a lot, the stay current on the isolation there is hard. So I think the security and supply chain, Fred, is another one. Do you agree? >> I absolutely agree. It's hard to manage supply chain nowadays. We put a lot of effort into that and I think we have a great ability to forecast and make sure that we can lean in and have the resources that are available and run them more efficiently. And then like you said on the security point, security is job one. It is the only P1. And if you think of how we build our infrastructure from Nitro all the way up and how we respond and work with our partners and our customers, there's nothing more important. >> And Narayan, your point earlier about the managed service patching and being on top of things is really going to get better. All right, final question. I really want to thank you for your time on this showcase. It's really been a great conversation. Fred, you had made a comment earlier. I want to end with a curve ball and put you eyes on the spot. We're talking about a new modern shift. We're seeing another inflection point. We've been documenting it. It's almost like cloud hitting another inflection point with application and open source growth significantly at the app layer. Continue to put a lot of pressure and innovation in the infrastructure side. So the question is for you guys each to answer is, what's the same and what's different in today's market? So it's like we want more of the same here, but also things have changed radically and better here. What's changed for the better and what's still the same thing hanging around that people are focused on? Can you share your perspective? >> I'll tackle it. Businesses are complex and they're often unique, that's the same. What's changed is how fast you can innovate. The ability to combine managed services and new innovative services and build new applications is so much faster today. Leveraging world class hardware that you don't have to worry about, that's elastic. You could not do that even five, 10 years ago to the degree you can today, especially with innovation. So innovation is accelerating at a rate that most people can't even comprehend and understand the set of services that are available to them. It's really fascinating to see what a one pizza team of engineers can go actually develop in a week. It is phenomenal. So super excited about this space and it's only going to continue to accelerate that. That's my take, Narayan. >> You got a lot of platform to compete on. With Amazon, you got a lot to build on. Narayan, your side. What's your answer to that question? >> I think we are seeing a lot of innovation with new applications that customers are constantly (faintly speaking). I think what we see is this whole notion of how do you go from desktop to production to the secure supply chain and how can we truly build on the agility that developers desire and build all the security and the pipelines to energize that production quickly and efficiently. I think we are seeing, we are at the very start of that sort of journey. Of course, we have invested in Kubernetes, the means to an end, but we're so much more beyond that's happening in industry and I think we're at the very, very beginning of this transformations, enterprise transformation that many of our customers are going through and we are inherently part of it. >> Well, gentlemen, I really appreciate that we're seeing the same thing. It's more the same here on solving these complexities with distractions, whether it's higher level services with large scale infrastructure. At your fingertips, infrastructure as code, infrastructure to be provisioned, serverless, all the good stuff happen and Fred with AWS on your side. And we're seeing customers resonate with this idea of being an operator again, being a cloud operator and developer. So the developer ops is kind of, DevOps is changing too. So all for the better. Thank you for spending the time and we're seeing again that traction with the VMware customer base and AWS getting along great together. So thanks for sharing your perspectives. >> We appreciate it. Thank you so much. >> Thank you John. >> This is theCUBE and AWS VMware showcase accelerating business transformation, VMware Cloud on AWS. Jointly engineered solution bringing innovation to the VMware customer base, going to the cloud and beyond. I'm John Furrier, your host. Thanks for watching. (gentle music)

>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> This past week we saw two of the Big 3 cloud providers present the latest update on their respective cloud visions, their business progress, their announcements and innovations. The content at these events had many overlapping themes, including modern cloud infrastructure at global scale, applying advanced machine intelligence, AKA AI, end-to-end data platforms, collaboration software. They talked a lot about the future of work automation. And they gave us a little taste, each company of the Metaverse Web 3.0 and much more. Despite these striking similarities, the differences between these two cloud platforms and that of AWS remains significant. With Microsoft leveraging its massive application software footprint to dominate virtually all markets and Google doing everything in its power to keep up with the frenetic pace of today's cloud innovation, which was set into motion a decade and a half ago by AWS. Hello and welcome to this week's Wikibon CUBE Insights, powered by ETR. In this Breaking Analysis, we unpack the immense amount of content presented by the CEOs of Microsoft and Google Cloud at Microsoft Ignite and Google Cloud Next. We'll also quantify with ETR survey data the relative position of these two cloud giants in four key sectors: cloud IaaS, BI analytics, data platforms and collaboration software. Now one thing was clear this past week, hybrid events are the thing. Google Cloud Next took place live over a 24-hour period in six cities around the world, with the main gathering in New York City. Microsoft Ignite, which normally is attended by 30,000 people, had a smaller event in Seattle, in person with a virtual audience around the world. AWS re:Invent, of course, is much different. Yes, there's a virtual component at re:Invent, but it's all about a big live audience gathering the week after Thanksgiving, in the first week of December in Las Vegas. Regardless, Satya Nadella keynote address was prerecorded. It was highly produced and substantive. It was visionary, energetic with a strong message that Azure was a platform to allow customers to build their digital businesses. Doing more with less, which was a key theme of his. Nadella covered a lot of ground, starting with infrastructure from the compute, highlighting a collaboration with Arm-based, Ampere processors. New block storage, 60 regions, 175,000 miles of fiber cables around the world. He presented a meaningful multi-cloud message with Azure Arc to support on-prem and edge workloads, as well as of course the public cloud. And talked about confidential computing at the infrastructure level, a theme we hear from all cloud vendors. He then went deeper into the end-to-end data platform that Microsoft is building from the core data stores to analytics, to governance and the myriad tooling Microsoft offers. AI was next with a big focus on automation, AI, training models. He showed demos of machines coding and fixing code and machines automatically creating designs for creative workers and how Power Automate, Microsoft's RPA tooling, would combine with Microsoft Syntex to understand documents and provide standard ways for organizations to communicate with those documents. There was of course a big focus on Azure as developer cloud platform with GitHub Copilot as a linchpin using AI to assist coders in low-code and no-code innovations that are coming down the pipe. And another giant theme was a workforce transformation and how Microsoft is using its heritage and collaboration and productivity software to move beyond what Nadella called productivity paranoia, i.e., are remote workers doing their jobs? In a world where collaboration is built into intelligent workflows, and he even showed a glimpse of the future with AI-powered avatars and partnerships with Meta and Cisco with Teams of all firms. And finally, security with a bevy of tools from identity, endpoint, governance, et cetera, stressing a suite of tools from a single provider, i.e., Microsoft. So a couple points here. One, Microsoft is following in the footsteps of AWS with silicon advancements and didn't really emphasize that trend much except for the Ampere announcement. But it's building out cloud infrastructure at a massive scale, there is no debate about that. Its plan on data is to try and provide a somewhat more abstracted and simplified solutions, which differs a little bit from AWS's approach of the right database tool, for example, for the right job. Microsoft's automation play appears to provide simple individual productivity tools, kind of a ground up approach and make it really easy for users to drive these bottoms up initiatives. We heard from UiPath that forward five last month, a little bit of a different approach of horizontal automation, end-to-end across platforms. So quite a different play there. Microsoft's angle on workforce transformation is visionary and will continue to solidify in our view its dominant position with Teams and Microsoft 365, and it will drive cloud infrastructure consumption by default. On security as well as a cloud player, it has to have world-class security, and Azure does. There's not a lot of debate about that, but the knock on Microsoft is Patch Tuesday becomes Hack Wednesday because Microsoft releases so many patches, it's got so much Swiss cheese in its legacy estate and patching frequently, it becomes a roadmap and a trigger for hackers. Hey, patch Tuesday, these are all the exploits that you can go after so you can act before the patches are implemented. And so it's really become a problem for users. As well Microsoft is competing with many of the best-of-breed platforms like CrowdStrike and Okta, which have market momentum and appear to be more attractive horizontal plays for customers outside of just the Microsoft cloud. But again, it's Microsoft. They make it easy and very inexpensive to adopt. Now, despite the outstanding presentation by Satya Nadella, there are a couple of statements that should raise eyebrows. Here are two of them. First, as he said, Azure is the only cloud that supports all organizations and all workloads from enterprises to startups, to highly regulated industries. I had a conversation with Sarbjeet Johal about this, to make sure I wasn't just missing something and we were both surprised, somewhat, by this claim. I mean most certainly AWS supports more certifications for example, and we would think it has a reasonable case to dispute that claim. And the other statement, Nadella made, Azure is the only cloud provider enabling highly regulated industries to bring their most sensitive applications to the cloud. Now, reasonable people can debate whether AWS is there yet, but very clearly Oracle and IBM would have something to say about that statement. Now maybe it's not just, would say, "Oh, they're not real clouds, you know, they're just going to hosting in the cloud if you will." But still, when it comes to mission-critical applications, you would think Oracle is really the the leader there. Oh, and Satya also mentioned the claim that the Edge browser, the Microsoft Edge browser, no questions asked, he said, is the best browser for business. And we could see some people having some questions about that. Like isn't Edge based on Chrome? Anyway, so we just had to question these statements and challenge Microsoft to defend them because to us it's a little bit of BS and makes one wonder what else in such as awesome keynote and it was awesome, it was hyperbole. Okay, moving on to Google Cloud Next. The keynote started with Sundar Pichai doing a virtual session, he was remote, stressing the importance of Google Cloud. He mentioned that Google Cloud from its Q2 earnings was on a $25-billion annual run rate. What he didn't mention is that it's also on a 3.6 billion annual operating loss run rate based on its first half performance. Just saying. And we'll dig into that issue a little bit more later in this episode. He also stressed that the investments that Google has made to support its core business and search, like its global network of 22 subsea cables to support things like, YouTube video, great performance obviously that we all rely on, those innovations there. Innovations in BigQuery to support its search business and its threat analysis that it's always had and its AI, it's always been an AI-first company, he's stressed, that they're all leveraged by the Google Cloud Platform, GCP. This is all true by the way. Google has absolutely awesome tech and the talk, as well as his talk, Pichai, but also Kurian's was forward thinking and laid out a vision of the future. But it didn't address in our view, and I talked to Sarbjeet Johal about this as well, today's challenges to the degree that Microsoft did and we expect AWS will at re:Invent this year, it was more out there, more forward thinking, what's possible in the future, somewhat less about today's problem, so I think it's resonates less with today's enterprise players. Thomas Kurian then took over from Sundar Pichai and did a really good job of highlighting customers, and I think he has to, right? He has to say, "Look, we are in this game. We have customers, 9 out of the top 10 media firms use Google Cloud. 8 out of the top 10 manufacturers. 9 out of the top 10 retailers. Same for telecom, same for healthcare. 8 out of the top 10 retail banks." He and Sundar specifically referenced a number of companies, customers, including Avery Dennison, Groupe Renault, H&M, John Hopkins, Prudential, Minna Bank out of Japan, ANZ bank and many, many others during the session. So you know, they had some proof points and you got to give 'em props for that. Now like Microsoft, Google talked about infrastructure, they referenced training processors and regions and compute optionality and storage and how new workloads were emerging, particularly data-driven workloads in AI that required new infrastructure. He explicitly highlighted partnerships within Nvidia and Intel. I didn't see anything on Arm, which somewhat surprised me 'cause I believe Google's working on that or at least has come following in AWS's suit if you will, but maybe that's why they're not mentioning it or maybe I got to do more research there, but let's park that for a minute. But again, as we've extensively discussed in Breaking Analysis in our view when it comes to compute, AWS via its Annapurna acquisition is well ahead of the pack in this area. Arm is making its way into the enterprise, but all three companies are heavily investing in infrastructure, which is great news for customers and the ecosystem. We'll come back to that. Data and AI go hand in hand, and there was no shortage of data talk. Google didn't mention Snowflake or Databricks specifically, but it did mention, by the way, it mentioned Mongo a couple of times, but it did mention Google's, quote, Open Data cloud. Now maybe Google has used that term before, but Snowflake has been marketing the data cloud concept for a couple of years now. So that struck as a shot across the bow to one of its partners and obviously competitor, Snowflake. At BigQuery is a main centerpiece of Google's data strategy. Kurian talked about how they can take any data from any source in any format from any cloud provider with BigQuery Omni and aggregate and understand it. And with the support of Apache Iceberg and Delta and Hudi coming in the future and its open Data Cloud Alliance, they talked a lot about that. So without specifically mentioning Snowflake or Databricks, Kurian co-opted a lot of messaging from these two players, such as life and tech. Kurian also talked about Google Workspace and how it's now at 8 million users up from 6 million just two years ago. There's a lot of discussion on developer optionality and several details on tools supported and the open mantra of Google. And finally on security, Google brought out Kevin Mandian, he's a CUBE alum, extremely impressive individual who's CEO of Mandiant, a leading security service provider and consultancy that Google recently acquired for around 5.3 billion. They talked about moving from a shared responsibility model to a shared fate model, which is again, it's kind of a shot across AWS's bow, kind of shared responsibility model. It's unclear that Google will pay the same penalty if a customer doesn't live up to its portion of the shared responsibility, but we can probably assume that the customer is still going to bear the brunt of the pain, nonetheless. Mandiant is really interesting because it's a services play and Google has stated that it is not a services company, it's going to give partners in the channel plenty of room to play. So we'll see what it does with Mandiant. But Mandiant is a very strong enterprise capability and in the single most important area security. So interesting acquisition by Google. Now as well, unlike Microsoft, Google is not competing with security leaders like Okta and CrowdStrike. Rather, it's partnering aggressively with those firms and prominently putting them forth. All right. Let's get into the ETR survey data and see how Microsoft and Google are positioned in four key markets that we've mentioned before, IaaS, BI analytics, database data platforms and collaboration software. First, let's look at the IaaS cloud. ETR is just about to release its October survey, so I cannot share the that data yet. I can only show July data, but we're going to give you some directional hints throughout this conversation. This chart shows net score or spending momentum on the vertical axis and overlap or presence in the data, i.e., how pervasive the platform is. That's on the horizontal axis. And we've inserted the Wikibon estimates of IaaS revenue for the companies, the Big 3. Actually the Big 4, we included Alibaba. So a couple of points in this somewhat busy data chart. First, Microsoft and AWS as always are dominant on both axes. The red dotted line there at 40% on the vertical axis. That represents a highly elevated spending velocity and all of the Big 3 are above the line. Now at the same time, GCP is well behind the two leaders on the horizontal axis and you can see that in the table insert as well in our revenue estimates. Now why is Azure bigger in the ETR survey when AWS is larger according to the Wikibon revenue estimates? And the answer is because Microsoft with products like 365 and Teams will often be considered by respondents in the survey as cloud by customers, so they fit into that ETR category. But in the insert data we're stripping out applications and SaaS from Microsoft and Google and we're only isolating on IaaS. The other point is when you take a look at the early October returns, you see downward pressure as signified by those dotted arrows on every name. The only exception was Dell, or Dell and IBM, which showing slightly improved momentum. So the survey data generally confirms what we know that AWS and Azure have a massive lead and strong momentum in the marketplace. But the real story is below the line. Unlike Google Cloud, which is on pace to lose well over 3 billion on an operating basis this year, AWS's operating profit is around $20 billion annually. Microsoft's Intelligent Cloud generated more than $30 billion in operating income last fiscal year. Let that sink in for a moment. Now again, that's not to say Google doesn't have traction, it does and Kurian gave some nice proof points and customer examples in his keynote presentation, but the data underscores the lead that Microsoft and AWS have on Google in cloud. And here's a breakdown of ETR's proprietary net score methodology, that vertical axis that we showed you in the previous chart. It asks customers, are you adopting the platform new? That's that lime green. Are you spending 6% or more? That's the forest green. Is you're spending flat? That's the gray. Is you're spending down 6% or worse? That's the pinkest color. Or are you replacing the platform, defecting? That's the bright red. You subtract the reds from the greens and you get a net score. Now one caveat here, which actually is really favorable from Microsoft, the Microsoft data that we're showing here is across the entire Microsoft portfolio. The other point is, this is July data, we'll have an update for you once ETR releases its October results. But we're talking about meaningful samples here, the ends. 620 for AWS over a thousand from Microsoft in more than 450 respondents in the survey for Google. So the real tell is replacements, that bright red. There is virtually no churn for AWS and Microsoft, but Google's churn is 5x, those two in the survey. Now 5% churn is not high, but you'd like to see three things for Google given it's smaller size. One is less churn, two is much, much higher adoption rates in the lime green. Three is a higher percentage of those spending more, the forest green. And four is a lower percentage of those spending less. And none of these conditions really applies here for Google. GCP is still not growing fast enough in our opinion, and doesn't have nearly the traction of the two leaders and that shows up in the survey data. All right, let's look at the next sector, BI analytics. Here we have that same XY dimension. Again, Microsoft dominating the picture. AWS very strong also in both axes. Tableau, very popular and respectable of course acquired by Salesforce on the vertical axis, still looking pretty good there. And again on the horizontal axis, big presence there for Tableau. And Google with Looker and its other platforms is also respectable, but it again, has some work to do. Now notice Streamlit, that's a recent Snowflake acquisition. It's strong in the vertical axis and because of Snowflake's go-to-market (indistinct), it's likely going to move to the right overtime. Grafana is also prominent in the Y axis, but a glimpse at the most recent survey data shows them slightly declining while Looker actually improves a bit. As does Cloudera, which we'll move up slightly. Again, Microsoft just blows you away, doesn't it? All right, now let's get into database and data platform. Same X Y dimensions, but now database and data warehouse. Snowflake as usual takes the top spot on the vertical axis and it is actually keeps moving to the right as well with again, Microsoft and AWS is dominant in the market, as is Oracle on the X axis, albeit it's got less spending velocity, but of course it's the database king. Google is well behind on the X axis but solidly above the 40% line on the vertical axis. Note that virtually all platforms will see pressure in the next survey due to the macro environment. Microsoft might even dip below the 40% line for the first time in a while. Lastly, let's look at the collaboration and productivity software market. This is such an important area for both Microsoft and Google. And just look at Microsoft with 365 and Teams up into the right. I mean just so impressive in ubiquitous. And we've highlighted Google. It's in the pack. It certainly is a nice base with 174 N, which I can tell you that N will rise in the next survey, which is an indication that more people are adopting. But given the investment and the tech behind it and all the AI and Google's resources, you'd really like to see Google in this space above the 40% line, given the importance of this market, of this collaboration area to Google's success and the degree to which they emphasize it in their pitch. And look, this brings up something that we've talked about before on Breaking Analysis. Google doesn't have a tech problem. This is a go-to-market and marketing challenge that Google faces and it's up against two go-to-market champs and Microsoft and AWS. And Google doesn't have the enterprise sales culture. It's trying, it's making progress, but it's like that racehorse that has all the potential in the world, but it's just missing some kind of key ingredient to put it over at the top. It's always coming in third, (chuckles) but we're watching and Google's obviously, making some investments as we shared with earlier. All right. Some final thoughts on what we learned this week and in this research: customers and partners should be thrilled that both Microsoft and Google along with AWS are spending so much money on innovation and building out global platforms. This is a gift to the industry and we should be thankful frankly because it's good for business, it's good for competitiveness and future innovation as a platform that can be built upon. Now we didn't talk much about multi-cloud, we haven't even mentioned supercloud, but both Microsoft and Google have a story that resonates with customers in cross cloud capabilities, unlike AWS at this time. But we never say never when it comes to AWS. They sometimes and oftentimes surprise you. One of the other things that Sarbjeet Johal and John Furrier and I have discussed is that each of the Big 3 is positioning to their respective strengths. AWS is the best IaaS. Microsoft is building out the kind of, quote, we-make-it-easy-for-you cloud, and Google is trying to be the open data cloud with its open-source chops and excellent tech. And that puts added pressure on Snowflake, doesn't it? You know, Thomas Kurian made some comments according to CRN, something to the effect that, we are the only company that can do the data cloud thing across clouds, which again, if I'm being honest is not really accurate. Now I haven't clarified these statements with Google and often things get misquoted, but there's little question that, as AWS has done in the past with Redshift, Google is taking a page out of Snowflake, Databricks as well. A big difference in the Big 3 is that AWS doesn't have this big emphasis on the up-the-stack collaboration software that both Microsoft and Google have, and that for Microsoft and Google will drive captive IaaS consumption. AWS obviously does some of that in database, a lot of that in database, but ISVs that compete with Microsoft and Google should have a greater affinity, one would think, to AWS for competitive reasons. and the same thing could be said in security, we would think because, as I mentioned before, Microsoft competes very directly with CrowdStrike and Okta and others. One of the big thing that Sarbjeet mentioned that I want to call out here, I'd love to have your opinion. AWS specifically, but also Microsoft with Azure have successfully created what Sarbjeet calls brand distance. AWS from the Amazon Retail, and even though AWS all the time talks about Amazon X and Amazon Y is in their product portfolio, but you don't really consider it part of the retail organization 'cause it's not. Azure, same thing, has created its own identity. And it seems that Google still struggles to do that. It's still very highly linked to the sort of core of Google. Now, maybe that's by design, but for enterprise customers, there's still some potential confusion with Google, what's its intentions? How long will they continue to lose money and invest? Are they going to pull the plug like they do on so many other tools? So you know, maybe some rethinking of the marketing there and the positioning. Now we didn't talk much about ecosystem, but it's vital for any cloud player, and Google again has some work to do relative to the leaders. Which brings us to supercloud. The ecosystem and end customers are now in a position this decade to digitally transform. And we're talking here about building out their own clouds, not by putting in and building data centers and installing racks of servers and storage devices, no. Rather to build value on top of the hyperscaler gift that has been presented. And that is a mega trend that we're watching closely in theCUBE community. While there's debate about the supercloud name and so forth, there little question in our minds that the next decade of cloud will not be like the last. All right, we're going to leave it there today. Many thanks to Sarbjeet Johal, and my business partner, John Furrier, for their input to today's episode. Thanks to Alex Myerson who's on production and manages the podcast and Ken Schiffman as well. Kristen Martin and Cheryl Knight helped get the word out on social media and in our newsletters. And Rob Hof is our editor in chief over at SiliconANGLE, who does some wonderful editing. And check out SiliconANGLE, a lot of coverage on Google Cloud Next and Microsoft Ignite. Remember, all these episodes are available as podcast wherever you listen. Just search Breaking Analysis podcast. I publish each week on wikibon.com and siliconangle.com. And you can always get in touch with me via email, david.vellante@siliconangle.com or you can DM me at dvellante or comment on my LinkedIn posts. And please do check out etr.ai, the best survey data in the enterprise tech business. This is Dave Vellante for the CUBE Insights, powered by ETR. Thanks for watching and we'll see you next time on Breaking Analysis. (gentle music)

(upbeat music) >> Good afternoon, everyone. Welcome back to the CUBE's day one coverage of VMware Explorer 22, live from San Francisco. I'm Lisa Martin. Dave Nicholson is back with me. Welcome back to the set. We're pleased to welcome William Bell as our next guest. The executive vice president of products at Phoenix NAP. William, welcome to the CUBE. Welcome back to the CUBE. >> Thank you, thank you so much. Happy to be here. >> Talk to us a little, and the audience a little bit about Phoenix NAP. What is it that you guys do? Your history, mission, value prop, all that good stuff. >> Absolutely, yeah. So we're global infrastructures as a service company, foundationally, we are trying to build pure play infrastructure as a service, so that customers that want to adopt cloud infrastructure but maybe don't want to adopt platform as a service and really just, you know, program themselves to a specific API can have that cloud adoption without that vendor lock in of a specific platform service. And we're doing this in 17 regions around the globe today. Yeah, so it's just flexible, easy. That's where we're at. >> I like flexible and easy. >> Flexible and easy. >> You guys started back in Phoenix. Hence the name. Talk to us a little bit about the evolution of the company in the last decade. >> Yeah, 100%. We built a data center in Phoenix expecting that we could build the centralized network access point of Phoenix, Arizona. And I am super proud to say that we've done that. 41 carriers, all three hyperscalers in the building today, getting ready to expand. However, that's not the whole story, right. And what a lot of people don't know is we founded an infrastructure as a service company, it's called Secured Servers no longer exists, but we founded that company the same time and we built it up kind of sidecar to Phoenix NAP and then we merged all of those together to form this kind of global infrastructure platform that customers can consume. >> Talk to us about the relationship with VMware. Obviously, here we are at VMware Explore. There's about seven... We're hearing 7,000 to 10,000 people here. People are ready to be back to hear from VMware and it's partner ecosystem. >> Yeah, I mean, I think that we have this huge history with VMware that maybe a lot of people don't know. We were one of the first six, the SPPs in 2011 at the end of the original kind of data center, whatever, vCloud data center infrastructure thing that they did. And so early on, there was only 10 of us, 11 of us. And most of those names don't exist anymore. We're talking, Terramark, Blue Lock, some of these guys. Good companies, but they've been bought or whatnot. And here's plucky Phoenix NAP, still, you know, offering great VMware cloud services for customers around the globe. >> What are some of the big trends that you're seeing in the market today where customers are in this multi-cloud world? You know this... I love the theme of this event. The center of the multi-cloud universe. Customers are in that by default. How do you help them navigate that and really unlock the value of it? >> Yeah, I think for us, it's about helping customers understand what applications belong where. We're very, very big believers both in the right home. But if you drill down on that right home for right applicator or right application, right home, it's more about the infrastructure choices that you're making for that application leads to just super exciting optimizations, right. If you, as an example, have a large media streaming business and you park it in a public called hyperscaler and you just eat those egress fees, like it's a big deal. Right? And there are other ways to do that, right. If you need a... If your application needs to scale from zero cores to 15,000 cores for an hour, you know, there are hyperscalers for that, right. And people need to learn how to make that choice. Right app, right home, right infrastructure. And that's kind of what we help them do. >> It's interesting that you mentioned the concept of being a pure play in infrastructure as a service. >> Yeah. >> At some point in the past, people would have argued that infrastructure as a service only exists because SaaS isn't good enough yet. In other words, if there's a good enough SaaS application then you don't want IaaS because who wants to mess around with IaaS, infrastructures as a service. Do you have customers who look at what they're developing as so much a core of what their value proposition is that they want to own it? I mean, is that a driving factor? >> I would challenge to say that we're seeing almost every enterprise become a SaaS company. And when that transition happens, SaaS companies actually care a lot about the cost basis, efficiency, uptime of their application. And ultimately, while they don't want to be in the data center business anymore, it doesn't mean that they want to pay someone else to do things that they feel wholly competent in doing. And we're seeing this exciting transition of open source technologies, open source platforms becoming good enough that they don't actually have to manage a lot of things. They can do it in software and the hardware's kind of abstracted. But that actually, I would say is a boon for infrastructure as a service, as an independent thing. It's been minimized over the years, right. People talk about hyperscalers as being cloud infrastructure companies and they're not. They're cloud platform companies, right. And the infrastructure is high quality. It is easy to access and scale, right, but it's ultimately, if you're just using one of those hyperscalers for that infrastructure, building VMs and doing a bunch of things yourself, you're not getting the value out of that hyperscaler. And ultimately that infrastructure's very expensive if you look at it that way. >> So it's interesting because if you look at what infrastructure consists of, which is hardware and software-- >> Yeah. >> People who said, eh, IaaS as is just a bridge to a bright SaaS future, people also will make the argument that the hardware doesn't matter anymore. I imagine that you are doing a lot of optimization with both hardware and stuff like the VMware cloud stack that you deploy as a VCPP partner. >> Absolutely, yeah. >> So to talk about that. >> Absolutely. >> I mean, you agree. I mean, if I were to just pose a question to you, does hardware still matter? Does infrastructure still matter? >> Way more than people think. >> Well, there you go. So what are you doing in that arena, specifically with VCPP? >> Yeah, absolutely. And so I think a good example of that, right, so last VMworld in person, 2019, we showcased a piece of technology that we had been working with Intel on for about two years at the time which was Intel persistent memory DC, persistent memory. Right? And we launched the first VMware cloud offering to have Intel DC persistent memory onboard. So that customers with the VMs that needed that technology could leverage it with the integrations in vSphere 6.7 and ultimately in seven more, right. Now I do think that was maybe a swing and a miss technology potentially but we're going to see it come back. And that specialized infrastructure deployment is a big part of our business, right. Helping people identify, you know, this application, if you'd have this accelerator, this piece of infrastructure, this quality of network can be better, faster, cheaper, right. That kind of mentality of optimization matters a lot. And VMware plays a critical role in that because it still gives the customer the operational excellence that they need without having to do everything themselves, right. And our customers rely on that a lot from VMware to get that whole story, operationally efficient, easy to manage, automated. All those things make a lot of difference to our VMware customers. >> Speaking of customers, what are you hearing, if anything, from customers, VMware customers that are your joint customers about the Broadcom acquisition? Are they excited about it? Are they concerned about it? And how do you talk about that? >> Yeah, I mean, I think that everyone that's in the infrastructure business is doing business with Broadcom, all right. And we've had so many businesses that we've been engaged with that have ultimately been a acquiree. I can say that this one feels different only in the size of the acquisition. VMware carries so much weight. VMware's brand exceeds Broadcom's brand, in my opinion. And I think ultimately, I don't know anything that's not public, right-- >> Well, they rebranded. By the way, on the point of brand, they rebranded their software business, VMware. >> Yeah. I mean, that's what I was going to say. That was the word on the street. I don't know if there's beneficial. Is that a-- >> Well, that's been-- >> But that's the word, right? >> That's what they've said. Well, but when a Avago acquired Broadcom they said, "we'll call ourselves Broadcom." >> Absolutely. Why wouldn't you? >> So yeah. So I imagine that what's been reported is likely-- >> Likely. Yeah, I 100% agree. I think that makes a ton of sense and we can start to see even more great intellectual property in software. That's where, you know, all of these businesses, CA, Symantec, VMware and all of the acquisitions that VMware has made, it's a great software intellectual property platform and they're going to be able to get so much more value out of the leadership team that VMware has here, is going to make a world of difference to the Broadcom software team. Yeah, so I'm very excited, you know. >> It's a lot of announcements this morning, a lot of technical product announcements. What did you hear in that excites you about the evolution of VMware as well as the partnership and the value in it for your customers? >> You know, one of our fastest growing parts of our business is this metal as a service infrastructure business and doing very, very... Using very specific technologies to do very interesting things, makes a big difference in our world and for our customers. So anything that's like smartNICs, disaggregated hypervisor, accelerators as a first class citizen in VMware, all that stuff makes the Phoenix NAP story better. So I'm super excited about that, right. Yeah. >> Well, it's interesting because VCPP is not a term that people who are not insiders know of. What they know is that there are services available in hyperscale cloud providers where you can deploy VMware. Well, you know, VMware cloud stack. Well, you can deploy those VMware cloud stacks with you. >> Absolutely. >> In exactly the same manner. However, to your point, all of this talk about disaggregation of CPU, GPU, DPU, I would argue with it, you're in a better position to deploy that in an agile way than a hyperscale cloud provider would be and foremost, I'm not trying to-- >> No, yeah. >> I'm not angling for a job in your PR department. >> Come on in. >> But the idea that when you start talking about something like metal as a service, as an adjunct or adjacent to a standard deployment of a VMware cloud, it makes a lot of sense. >> Yeah. >> Because there are people who can't do everything within the confines of what the STDC-- >> Yes. >> Consists of. >> Absolutely. >> So, I mean... Am I on the right track? >> No, you are 100% hitting it. I think that that point you made about agility to deliver new technology, right, is a key moment in our kind of delivery every single year, right. As a new chip comes out, Intel chip or Accelerator or something like that, we are likely going to be first to market by six months potentially and possibly ever. Persistent memory never launched in public cloud in any capacity but we have customers running on it today that is providing extreme value for their business, right. When, you know, the discreet GPUs coming from the just announced Flex series GPU from Intel, you're likely not going to see them in public cloud hyperscalers quickly, right. Over time, absolutely. We'll have them day one. Isolate came out, you could get it in our metal as a service platform the morning it launched on demand, right. Those types of agility points, they're not... Because they're hyperscale by nature. If they can't hyperscale it, they're not doing it, right. And I think that that is a very key point. Now, as it comes in towards VMware, we're driving this intersection of building that VCF or VMware cloud foundation which is going to be a key point of the VMware ecosystem. As you see this transition to core based licensing and some of the other things that have been talked about, VMware cloud foundation is going to be the stack that they expect their customers to adopt and deliver. And the fact that we can automate that, deliver it instantaneously in a couple of hours to hardware that you don't need to own, into networks you don't need to manage, but yet you are still in charge, keys to the kingdom, ready to go, just like you're doing it in your own data center, that's the message that we're driving for. >> Can you share a customer example that you think really just shines a big flashlight on the value that you guys are delivering? >> We definitely, you know, we had the pleasure of working with Make-A-Wish foundation for the last seven years. And ultimately, you know, we feel very compelled that every time we help them do something unique, different or what not, save money, that money's going into helping some child that's in need, right. And so we've done so many things together. VMware has stepped up as the plate over the years, done so many things with them. We've sponsored stuff. We've done grants, we've done all kinds of things. The other thing I would say is we are helping the City of Hope and Translational Genomics Research Institute on sequencing single cell RNA so that they can fight COVID, so that they can build cure, well, not cures but build therapies for colon cancer and things like that. And so I think that, you know, this is a driving light for us internally is helping people through efficiency and change. And that's what we're looking for. We're looking for more stories like that. We're looking... If you have a need, we're looking for people to come to us and say, "this is my problem. This is what this looks like. Let us see if we can find a solution that's a little bit different, a little bit out of the box and doesn't have to change your business dramatically." Yeah. >> And who are you talking to within customers? Is this a C level conversation? >> Yeah, I mean, I would say that we would love it to be... I think most companies would love to have that, you know, CFO conversation with every single customer. I would say VPs of engineering, increasingly, especially as we become more API centric, those guys are driving a lot of those purchasing decisions. Five years ago, I would've said director of IT, like director of IT. Now today, it's like VP of engineering, usually software oriented folks looking to deliver some type of application on top of a piece of hardware or in a cloud, right. And those guys are, you know, I guess, that's even another point, VMware's doing so much work on the API side that they don't get any credit for. Terraform, Ansible, all these integrations, VMware doing so much in this area and they just don't get any credit for it ever, right. It's just like, VMware's the dinosaur and they're just not, right. But that's the thing that people think of today because of the hype of the hyperscaler. I think that's... Yeah. >> When you're in customer conversations, maybe with prospects, are you seeing more customers that have gone all in on a hyperscaler and are having issues and coming to you guys saying help, this is getting way too expensive? >> Yeah, I think it's the unexpected growth problem or even the expected growth problem where they just thought it would be okay, but they've suffered some type of competitive pressure that they've had to optimize for and they just didn't really expect it. And so, I think that increasingly we are finding organizations that quickly adopted public cloud. If they did a full digital transformation of their business and then transformation of their applications, a lot of them now feel very locked in because every application is just reliant on x hyperscaler forever, or they didn't transform anything and they just migrated and parked it. And the bills that are coming in are just like, whoa like, how is that possible? We are typically never recommending get out of the public cloud. We are just... It's not... If I say the right home for the right application, it's by default saying that there are right applications for hyperscalers. Parking your VMware environment that you just migrated to a hyperscaler, not the right application. You know, I would love you to be with me but if you want to do that, at least go to VMC on AWS or go to OCVS or GCVE or any of those. If that's going to go with a Google or an Amazon and that's just the mandate and you're going to move your applications, don't just move them into native. Move them into a VMware solution and then if you still want to make that journey, that full transformation, go ahead and make it. I would still argue that that's not the most efficient way but, you know, if you're going to do anything, don't just dump it all into cloud, the native hyperscaler stuff. >> Good advice. >> So what do typical implementations look like with you guys when you're moving on premises environments into going back to the VCPP, STDC model? >> Absolutely. Do you have people moving and then transforming and re-platforming? What does that look like? What's the typical-- >> Yeah. I mean, I do not believe that anybody has fully made up their mind if exactly where they want to be. I'm only going to be in this cloud. It's an in the close story, right. And so even when we get customers, you know, we firmly believe that the right place to just pick up and migrate is to a VCPP cloud. Better cost effectiveness, typically better technology, you know service, right. Better service, right. We've been part of VMware for 12 years. We love the technology behind VMC's, now AWS is fantastic, but it's still just infrastructure without any help at all right, right. They're going to be there to support their technology but they're not going to help you with the other stuff. We can do some of those things. And if it's not us, it's another VCPP provider that has that expertise that you might need. So yes, we help you quickly, easily migrate everything to a VMware cloud. And then you have a decision point to make. You're happy where you are, you are leveraging public cloud for a certain applications. You're leveraging VMware cloud offerings for the standard applications that you've been running for years. Do you transform them? Do you keep them? What do you do? All those decisions can be made later. But I stress that repurchasing all your hardware again, staying inside your colo and doing everything yourself, it is for me, it's like a company telling me they're going to build a data center for themselves, single tenant data center. Like no one's doing that, right. But there are more options out there than just I'm going to go to Azure, right. Think about it. Take the time, assess the landscape. And VMware cloud providers as a whole, all 17,000 of us or whatever across the globe, people don't know that group of individuals of the companies is the third or fourth potentially largest cloud in the world. Right? That's the power of the VMware cloud provider ecosystem. >> Last question for you as we wrap up here. Where can the audience go to learn more about Phoenix NAP and really start test driving with you guys? >> Absolutely. Well, if you come to phoenixnap.com, I guarantee you that we will re-target you and you can click on a banner later if you don't want to stay there. (Lisa laughs) But yeah, phoenixnap.com has all the information that you need. We also put out tons of helpful content. So if you're looking for anything technology oriented and you're just, "I want to upgrade to Ubuntu," you're likely going to end up on a phoenixnap.com website looking for that. And then you can find out more about what we do. >> Awesome, phoenixnap.com. William, thank you very much for joining Dave and me, talking about what you guys are doing, what you're enabling customers to achieve as the world continues to evolve at a very dynamic pace. We appreciate your insights. >> Absolutely, thank you so much >> For our guest and Dave Nicholson, I'm Lisa Martin. You've been watching the CUBE live from VMware Explorer, 2022. Dave and I will be joined by a guest consultant for our keynote wrap at the end of the day in just a few minutes. So stick around. (upbeat music)

>> From the Cube studios in Palo Alto and Boston, bringing you data driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> While the precise direction of VMware's future is unknown, given the plan Broadcom acquisition, one thing is clear. The topic of what Broadcom plans will not be the main focus of the agenda at the upcoming VMware Explore event next week in San Francisco. We believe that despite any uncertainty, VMware will lay out for its customers what it sees as its future. And that future is multi-cloud or cross-cloud services, what we call Supercloud. Hello, and welcome to this week's Wikibon Cube Insights powered by ETR. In this breaking analysis, we drill into the latest survey data on VMware from ETR. And we'll share with you the next iteration of the Supercloud definition based on feedback from dozens of contributors. And we'll give you our take on what to expect next week at VMware Explorer 2022. Well, VMware is maturing. You can see it in the numbers. VMware had a solid quarter just this week, which was announced beating earnings and growing the top line by 6%. But it's clear from its financials and the ETR data that we're showing here that VMware's Halcion glory days are behind it. This chart shows the spending profile from ETR's July survey of nearly 1500 IT buyers and CIOs. The survey included 722 VMware customers with the green bars showing elevated spending momentum, ie: growth, either new or growing at more than 6%. And the red bars show lower spending, either down 6% or worse or defections. The gray bars, that's the flat spending crowd, and it really tells a story. Look, nobody's throwing away their VMware platforms. They're just not investing as rapidly as in previous years. The blue line shows net score or spending momentum and subtracts the reds from the greens. The yellow line shows market penetration or pervasiveness in the survey. So the data is pretty clear. It's steady, but it's not remarkable. Now, the timing of the acquisition, quite rightly, is quite good, I would say. Now, this next chart shows the net score and pervasiveness juxtaposed on an XY graph and breaks down the VMware portfolio in those dimensions, the product portfolio. And you can see the dominance of respondents citing VMware as the platform. They might not know exactly which services they use, but they just respond VMware. That's on the X axis. You can see it way to the right. And the spending momentum or the net score is on the Y axis. That red dotted line at 4%, that indicates elevated levels and only VMware cloud on AWS is above that line. Notably, Tanzu has jumped up significantly from previous quarters, with the rest of the portfolio showing steady, as you would expect from a maturing platform. Only carbon black is hovering in the red zone, kind of ironic given the name. We believe that VMware is going to be a major player in cross cloud services, what we refer to as Supercloud. For months, we've been refining the concept and the definition. At Supercloud '22, we had discussions with more than 30 technology and business experts, and we've gathered input from many more. Based on that feedback, here's the definition we've landed on. It's somewhat refined from our earlier definition that we published a couple weeks ago. Supercloud is an emerging computing architecture that comprises a set of services abstracted from the underlying primitives of hyperscale clouds, e.g. compute, storage, networking, security, and other native resources, to create a global system spanning more than one cloud. Supercloud is three essential properties, three deployment models, and three service models. So what are those essential elements, those properties? We've simplified the picture from our last report. We show them here. I'll review them briefly. We're not going to go super in depth here because we've covered this topic a lot. But supercloud, it runs on more than one cloud. It creates that common or identical experience across clouds. It contains a necessary capability that we call a superPaaS that acts as a cloud interpreter, and it has metadata intelligence to optimize for a specific purpose. We'll publish this definition in detail. So again, we're not going to spend a ton of time here today. Now, we've identified three deployment models for Supercloud. The first is a single instantiation, where a control plane runs on one cloud but supports interactions with multiple other clouds. An example we use is Kubernetes cluster management service that runs on one cloud but can deploy and manage clusters on other clouds. The second model is a multi-cloud, multi-region instantiation where a full stack of services is instantiated on multiple clouds and multiple cloud regions with a common interface across them. We've used cohesity as one example of this. And then a single global instance that spans multiple cloud providers. That's our snowflake example. Again, we'll publish this in detail. So we're not going to spend a ton of time here today. Finally, the service models. The feedback we've had is IaaS, PaaS, and SaaS work fine to describe the service models for Supercloud. NetApp's Cloud Volume is a good example in IaaS. VMware cloud foundation and what we expect at VMware Explore is a good PaaS example. And SAP HANA Cloud is a good example of SaaS running as a Supercloud service. That's the SAP HANA multi-cloud. So what is it that we expect from VMware Explore 2022? Well, along with what will be an exciting and speculation filled gathering of the VMware community at the Moscone Center, we believe VMware will lay out its future architectural direction. And we expect it will fit the Supercloud definition that we just described. We think VMware will show its hand on a set of cross-cloud services and will promise a common experience for users and developers alike. As we talked about at Supercloud '22, VMware kind of wants to have its cake, eat it too, and lose weight. And by that, we mean that it will not only abstract the underlying primitives of each of the individual clouds, but if developers want access to them, they will allow that and actually facilitate that. Now, we don't expect VMware to use the term Supercloud, but it will be a cross-cloud multi-cloud services model that they put forth, we think, at VMworld Explore. With IaaS comprising compute, storage, and networking, a very strong emphasis, we believe, on security, of course, a governance and a comprehensive set of data protection services. Now, very importantly, we believe Tanzu will play a leading role in any announcements this coming week, as a purpose-built PaaS layer, specifically designed to create a common experience for cross clouds for data and application services. This, we believe, will be VMware's most significant offering to date in cross-cloud services. And it will position VMware to be a leader in what we call Supercloud. Now, while it remains to be seen what Broadcom exactly intends to do with VMware, we've speculated, others have speculated. We think this Supercloud is a substantial market opportunity generally and for VMware specifically. Look, if you don't own a public cloud, and very few companies do, in the tech business, we believe you better be supporting the build out of superclouds or building a supercloud yourself on top of hyperscale infrastructure. And we believe that as cloud matures, hyperscalers will increasingly I cross cloud services as an opportunity. We asked David Floyer to take a stab at a market model for super cloud. He's really good at these types of things. What he did is he took the known players in cloud and estimated their IaaS and PaaS cloud services, their total revenue, and then took a percentage. So this is super set of just the public cloud and the hyperscalers. And then what he did is he took a percentage to fit the Supercloud definition, as we just shared above. He then added another 20% on top to cover the long tail of Other. Other over time is most likely going to grow to let's say 30%. That's kind of how these markets work. Okay, so this is obviously an estimate, but it's an informed estimate by an individual who has done this many, many times and is pretty well respected in these types of forecasts, these long term forecasts. Now, by the definition we just shared, Supercloud revenue was estimated at about $3 billion in 2022 worldwide, growing to nearly $80 billion by 2030. Now remember, there's not one Supercloud market. It comprises a bunch of purpose-built superclouds that solve a specific problem. But the common attribute is it's built on top of hyperscale infrastructure. So overall, cloud services, including Supercloud, peak by the end of the decade. But Supercloud continues to grow and will take a higher percentage of the cloud market. The reasoning here is that the market will change and compute, will increasingly become distributed and embedded into edge devices, such as automobiles and robots and factory equipment, et cetera, and not necessarily be a discreet... I mean, it still will be, of course, but it's not going to be as much of a discrete component that is consumed via services like EZ2, that will mature. And this will be a key shift to watch in spending dynamics and really importantly, computing economics, the things we've talked about around arm and edge and AI inferencing and new low cost computing architectures at the edge. We're talking not the near edge, like, Lowes and Home Depot, we're talking far edge and embedded devices. Now, whether this becomes a seamless part of Supercloud remains to be seen. Look, if that's how we see it, the current and the future state of Supercloud, and we're committed to keeping the discussion going with an inclusive model that gathers input from all parts of the industry. Okay, that's it for today. Thanks to Alex Morrison, who's on production, and he also manages the podcast. Ken Schiffman, as well, is on production in our Boston office. Kristin Martin and Cheryl Knight, they help us get the word out on social media and in our newsletters. And Rob Hoffe is our editor in chief over at Silicon Angle and does some helpful editing. Thank you, all. Remember these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis Podcast. I publish each week on wikibon.com and siliconangle.com. You can email me directly at david.vellante@siliconangle.com or DM me @Dvellante or comment on our LinkedIn posts. Please do check out etr.ai. They've got some great enterprise survey research. So please go there and poke around, And if you need any assistance, let them know. This is Dave Vellante for the Cube Insights powered by ETR. Thanks for watching, and we'll see you next time on Breaking Analysis. (lively music)

(upbeat music) >> Hello, welcome to this Cube Conversation here in Palo Alto, California. I'm John Furrier, host of theCube. We have a returning Cube alumni, Ramesh Prabagan, who is the co-founder and CEO of Prosimo.io. Great to see you, Ramesh. Thanks for coming in to our studio, and welcome to the new layout. >> Thanks for having me here, John. After a series of Zoom conversations, it's great to be live and in the flesh! >> Great to be in person. We also got a new stage for our Supercloud event, which we've been opening up to the community, looking forward to getting your perspective on that soon as well. But I want to keep the conversation really about you guys. I want to get the story down. You guys came out of stealth, Multicloud, Supercloud is right in your wheelhouse. >> Exactly. >> You got to love Supercloud. >> Yeah. As I walked in, I saw Supercloud all over the place, and it just gives you a jolt of energy. >> Well, you guys are in the middle of the action. Your company, I want you to explain this in a minute, is in the middle of this next wave. Because we had the structural change I called Cloud One. Amazon, use case, developers, no need to build a data center, all that goodness happens, higher level service of abstractions are happening, and then Azure comes in. More PaaS, and then more install base, now they're nipping at the heels. So full on hyperscale, Cap Backs growth, great for everybody. Now comes new use cases. Cloud to cloud, app to app, you see Databricks, Snowflake, MongoDB, all doing extremely well by leveraging the Cap Backs, now it's an ops problem. >> Exactly. >> Now ops and security. >> Yeah. It's speed of applications. >> How are you guys vectoring into that? Explain what you guys do. >> Absolutely. So let me take kind of the customer pain point first, right? Because it's always easier to explain that, and then we explain what is it that we do. So, it's no surprise. Applications are moving into the cloud, or people are building apps in the cloud in masses. The infrastructure that's sitting in front of these applications, cutting across networking, security, the operational piece associated with that, does not move at the same speed. The apps sometimes get upgraded two, three times a day, the infrastructure gets touched one time a week at best. And so increasingly, the cloud platform teams, the developers are all like, "Hey, why? Why? Why?" Right? "I thought things were supposed to move fast in the cloud." It doesn't. Now, if you double click on that, really, it's two reasons. One, those that won't have consistency across the stack that they hired in the data center, they bring a virtual form factor of that stack and line it up in the cloud, and before you know it, it's cost, it's operation complexity, there are multiple single panes of glass, all the fun stuff associated... >> Just to interject real quick. It is fast in the cloud if you're a developer. >> Exactly. >> So it's kind of like, hurry up, slow down, wait. >> Correct. >> So the developers are shifting left, open source is booming. Things are fine for developers right now. If you're a developer, things are good. >> But the guy sitting in front of that... >> The ops guys, they've got to deal with things like lock-in, choice, security. >> Exactly. And those are really the key challenges. We've seen some that actually said, "Hey, know what, I don't want to bring my data center stack into the cloud. Let me go cloud-native. And they start to build it up. 14 services from AWS, 15 from iGR, 14 more from GCP, even if you are in a single cloud. They just keep it to that. I need to know how to put this together. Because all these services are great, but how do I put this together. And enterprises don't have just one application, they have hundreds of these applications. So the requirements of a database is different than a service mesh, different than a serverless application, different than a web application. And before you know it, "How do I put all these things together?" And so we looked at this problem, and we said, "Okay. We subscribe to the fact that cloud-native is the way to go, right, but something needs to be there to make this simple." Right? And so, first thing that we did was bring all these cloud-native services together, we help orchestrate that, and we said, "okay, know what, Mr. Enterprise? We got you covered." Right? But now, it doesn't stop there. That's like, 10% of the value, right? What do you really need? What do you care about now? Because the apps are in the center of the universe, and who's talking to it? It's another application sitting either in the same cloud, or in a different cloud, or it's a user connecting into the application. So now, let's talk about what are the networking security operational requirements required for these apps to talk to each other, or the user to talk to the application. That's really what we focus on. >> Yeah. And I think one of the things that's driving this opportunity for you, and I want to get your reaction to this, is that the modern application movement is all about cloud-native. Okay, they're obviously doing great. Now, kind of the kumbaya moment in enterprise is that the security team and ops teams have to play ball and be friends with the developer, and vice versa. So harmony's coming there. So the little harmony. And two, the business is driving apps. IT is transforming over. This is why the Supercloud idea is interesting to Dave and I. Because when we coined that term, multi-cloud was not a market. Everyone has multiple clouds, 'cause they have Microsoft Office, that's now in the cloud, they got SQL Server, I mean it's really kind of Microsoft Cloud. >> Exactly. >> So you have a cloud. But do you have ops teams building on the stack? What about the network layer? This is where the rubber meets the road. >> Absolutely, yeah. And if you look at the challenges there, if you just focus on networking and security, right? When applications need to talk to each other, you have a whole bunch of underlying services, but somebody needs to put this thing on top. Because what you care about is "can these group of users talk to these class of applications." Or, "these group of applications, can they talk to each other," right? This whole notion of connectivity is just table stakes. Everybody just assumes it's there, right? It's the next layer up, which is, "how do I bring Zero Trust access? How do I get the observability?" And observability is not just a bunch of pretty donut chats. I have had people look to me in my previous company, the start-up, and said, "okay, give me all these nice donut chats, but so what? What do you want me to do with this?" And so you have to translate that into real actions, right? "How do I bring Zero Trust capabilities? How do I bring the observability capabilities? How do I understand cloud-native and networking and bring those things together so that you can help solve for the problem." >> It's interesting, one of the questions I had here to ask you was "what does it mean to be cloud-native, and why now?" And you brought up Zero Trust, trust and verify, these are security concepts. But if you look at what's going on at KubeKon and CNCF and Linux Foundation, software supply chain's a huge issue, where trust is the issue. They want trust there, so you got Zero Trust here. What is it? Zero Trust or trust? I mean, what's there? Is one hardware based, perimeter, networking? That kind of perimeter's dead, ton of... >> No, the whole- >> Trust or Zero Trust. >> The whole concept of Zero Trust is don't trust what is underlying, just trust what you're talking to. So if you and I talking to each other, John, you need to trust me, I need to trust you, and be able to have this conversation. >> You've been verified. >> Exactly, right? But in the application world, if you talk about two apps that are talking to each other, let's say there is a web application in one AWS region talking to a database in a different region, right? Now, do you want to make sure you are able to build that trust all the way from the application to the application? Or do you want to move the trust boundary to the two entities that are talking to each other so that irrespective of what they go on underneath the covers, you can be always sure that these two things are trusted. >> So, Ramesh, I was on LinkedIn yesterday, I wrote a comment, Dave Vallante wrote a post on Supercloud, we're talking about it, and I wrote, "Cloud as a commodity," question, and then a bunch of other stuff that we're going to talk about, and Keith Townsend jumped on that, and got on Twitter, put a poll, "Is cloud a commodity? Source: me." So, it started a big thread. And the reaction was interesting. And my point was to be provocative on "Cloud isn't commodity, but there's commodity elements." EC2 and S3, you can look at that and say, "that's commodity IaaS," but Amazon Web Services has done an amazing job for higher level services. Okay, so how does that translate into the use cases that you see that you guys are going after and solving, because it's the same kind of concept. IaaS and SaaS have to work together to solve problems, but that's in an integrated environment, say, in a native-cloud. How does that work across clouds? >> Yeah, no, you bring up a great point, John. So, let's take the simple use case, right? Let's keep the user to app thing to the side. Let us say two apps need to talk to each other, right? There are multiple ways in which you can solve this problem. You can build highways. That's what our customers call it. I'll build highways. I don't care what goes on those highways, I'll just build highways. You bring any kind of application workload on it, I just make sure that the highways are good, right? That's kind of the lowest common denominator. It's the path to least resistance. You can get stuff done, but it's not going to move the needle, right? Then you have really modern, kind of service networking, where, okay, I'm looking at every single HTTP, API, n:point, whatnot, and I'm optimizing for that. Right? Great if you know what you're doing, but, like, if you have thousands of these applications, it's not going to be really feasible to do that. And so, what we have seen customers do, actually, is employ a mixed approach, where they say, "I'm going to build these highways, the highways are going to make sure that I can go from one place to another, and maybe within regions, across clouds, whatnot, but then, I have specific requirements that my business needs, that actually needs tweaking, right? And so I'm going to tweak those things. That's why, what we call as like, full stack transit, is exactly that, right, which is, I'll build you the guts of it so that hey, you know what, if somebody screams at you, "Hey, why is my application not accessible?" You don't have that problem. It is always accessible. But then, the requirements for performance, the requirements for Zero Trust, the requirements for segmentation, and all of that are things that... >> That's a hard problem. >> That's a hard problem to solve. >> And you guys are solving that? >> Absolutely, exactly. >> So, let me throw this at you. So, okay, I get that. And by the way, that's exactly what we're seeing. Dave and I were also debating about multi-cloud as what it is. Now, the nirvana definition is, "Well, I have a workload, that's going to work the same, and just magically just shift to Azure." (Ramesh laughs) >> Like, 'cause there's better resources. >> There is no magic there. >> So, but this brings up the point of operations. Now, Databricks and Snowflake, they're building their software to run on multi-cloud seamlessly. Now they can do that, 'cause it's their application. What is the multi-cloud use case, so that's a Supercloud use case in your mind, because right now it's not yet there. What is the Supercloud use case that's going to allow this seamless management or workloads. What's your view? >> Yeah, so if you take enterprise, right? Large enterprise in particular. They invariably have some workloads that are on, let's say, if the primary cloud is AWS, there are some workloads in Azure. Maybe they have acquired a new company, maybe a start-up that uses GCP, whatnot. So they have sprinkles of workloads in other clouds. >> So that's the breed kind of thing. >> Yeah, exactly. That's not what causes anybody to wake up in the morning and say, "I need to have a Supercloud strategy." That's not the thing, right? But now, increasingly you're seeing "pick the right cloud for the appropriate workload." That is going to change quite a bit. Because I have my infrastructure heavy workloads in AWS. I have quite a bit of like, analytics and mining type of applications that are better on GCP. I have all of my package applications work well on Azure, right? How do I make sure all of this. And it's not apps of this kind. Even simple things like VDI. VDI always used to be, "I have this instance I run up" and whatnot. Now every single cloud provider is giving you their own flavor of virtual desktop. And so, how do you make sure all of these things work together, right? And once again, what we have seen customers do is they settle on one cloud as their primary, but then you always have sprinkles of workloads across all of the clouds. Now, you could also go down the path, and you're increasingly seeing this, you could go down the path of, "Hey, I'm using cloud as backbone," right? Cloud providers have invested massive amounts of dollars to make sure that the infrastructure reaches there. Literally almost to the extent that every user in a metro city is ten milliseconds from the public cloud. And so they have allowed for that. Now, you can actually use cloud backbones to get the availability, the liability and whatnot. So these are some new use cases that we have seen actually blew up in customers. I was just doing an interview, and the topic was the innovator's dilemma. And one of the panelists said, "It's not the innovator's dilemma, it's the integrator dilemma." Because if you have commodity, and you have choices on, say, backbones and whatnot for transit, the integration is the key glue now. What's your reaction to that? >> Absolutely. And we have seen, we used to spend quite a bit of time in kind of what is the day zero problem, right? Like, how do I put this together? Conversations are moved past that, because there are multiple ways in which you can do that right now, right? Conversations are moving to kind of, "this is more of an operational problem for me." It's not just operations in the form of "Hey, I need to find out where the problem is, troubleshoot it, and so forth. But I need to make like really high quality decisions." And those decisions are going to be guided by data. We have enterprise customers that acquire new companies. Or they have a new site that they open up. >> It's a mishmash. >> Yeah, exactly. It's a New York based company and they acquire a team out in Sidney, Australia, right? Does your cloud tell you today that you have new users, or new applications that are in Sidney, and naturally just extend? No, it doesn't. Somebody has to look at the macro problem, look at "Where are all my workloads?" Do a bunch of engineering to make that work, right? We took it upon ourselves to say "Hey, you know what, twenty-four hours later, you're going to get a recommendation in the platform that says, 'okay, you have new set of applications, a new set of users coming from Sidney, Australia, what have you done about it?' Click a button, and then you expand on it. >> It's kind of like how IT became the easy way to run the data center. Before IT you had to be a PhD, and roll out, I mean, you know how it was, right? So you're kind of taking that same approach. Okay, well, Ramesh, great stuff. I want to do a followup, certainly with you on this. 'Cause you're in the middle of where this wave is going, this structural change, and certainly can participate in that Supercloud conversation. But for your company, what's going on there? Give us an update, customer activity, what's it like, you guys came out of stealth, what's been the reaction, give a plug for the company, who you going to hire, take a minute to plug it. >> Oh, wonderful, thank you. So, primary use cases are really around cloud networking. How do you go within the cloud, and across clouds, and to the cloud, right? So those are really the key use cases. We go after large enterprises predominantly, but any kind of mid enterprise that is extremely cloud oriented, has lot of workloads in the cloud, equally applicable, applicable there. So we have about 60 of the Fortune 500s that we are engaged in right now. Many of them are paying customers as well. >> How are they buying, service? Is it... >> Yeah. So we provide software that actually sits inside the customer's own administrative control, delivered as a service, that they can use to go- >> So on-premise hosting or in the cloud? >> Entirely in the cloud, delivered as a service, so they didn't need to take care of the maintenance and whatnot, but they just consume it from the cloud directly, okay? And so, where we are right now is essentially, I have a branch of repeatable use cases that many customers are employing us for. So again, building highways, many different ways to build highways, at the same time take care of the micro-segmentation requirements, and then importantly, this whole NetDevOps, right? This whole NetDevOps is a cultural shift that we have seen. So if you are a network engineer, NetDevOps seems like it's a foreign term, right? But if you are an operational engineer, then NetDevOps, you know exactly what to do. So bringing all those principles together, making sure that the networking teams are empowered to essentially embrace the cloud that I created, the single biggest thing that we have done, I would say done well, is we have built very well on top of the cloud provider. So we don't go against cloud-native services. They have done that really, really well. It makes no sense to go say, "I have a better transit gateway than you." No. Hands down, an AWS transit gateway, or an Azure V1 and whatnot, are some of the best services that they have provided. But what does that mean? >> How do you build software into it? >> Exactly, right? And so how can you build a layer of software on top, so that when you attach that into the applications, right, that you can actually get the experience required, you can get the security requirements and so forth. So that's kind of where we are. We're also humbled by essentially some of the mega partners that have taken a bet on us, sometimes to the extent that, we're a 70% company, and some of the partners that we are talking to actually are quite humbling, right? >> Hey, lot more resource. >> Exactly, yeah. >> And how many rounds of financing have you done? >> So we have done two rounds of financing, we have raised about 55,000,000 in capital, again, really great set of investors backing us up, and a strong sense of conviction, on kind of where we are going. >> Do you think you're early, or not? 'Cause, that's always probably the biggest scary, I can see the smile, is that what keeps you up at night? >> So, yeah, exactly, I go through these phases internally in my head. >> The vision's right on the money, no doubt about it. >> So when you win an opportunity, and we have like, a few dozen of these, right, when you win an opportunity, you're like, "Yes, absolutely, this is where it is," right, and you go for a week and you don't win something, and you're like, "Hey man, why are we not seeing this?" Right, and so you go through these cycles, but I'll tell you with conviction, the fact that customers are moving workloads into the public cloud, not in dozens but in like, the hundreds and the thousands, essentially means that they need something like this. >> And the cloud-native wave is driving big time. >> Exactly, right. And so, when the customer as a conversation with AWS, Azure, GCP, and they are privy to all the services, and we go in after that and talk about, "How do I put this together and help you focus on your outcomes?" That mentally moves them. >> It's a day zero opportunity, and then you got headroom beyond that. >> Exactly. So that's the positive side of it, and enterprises certainly are sometimes a little cautious about when they're up new technologies and so forth. It's a natural cycle. Fortunately, again we are humbled by the fact that we have a few dozen of the pioneering customers that are using our platform. That gives you the legitimacy for a start-up. >> You got great pedigree on clients. Real quick, final question. 30 seconds. What's the pain point, for people watching, when do they call you in? What's their environment look like, what are some of the things that give the signals that you guys got to get the call? >> If you have more than, let's say five or ten VPCs in the cloud, and you have not invested in building a networking platform that gives you the connectivity, the security, the observability, and the performance requirements, you absolutely have to do that, right? Because we have seen many, many customers, it goes from 5 to 50 to 100 within a week, and so you don't want to be caught essentially in the midst of that. >> One more final final question. Since you're a seasoned entrepreneur, you've been there, done that previous times, >> Yeah, I've got scars. (laughs) >> Yes, we've all got scar tissue. We've been doing theCube for 12 years, we've seen a lot of stuff. What's the difference now in this market that's different than before? What's exciting you? What's the big change? What's, in your opinion, happening now that's really important that people should pay attention to? >> Absolutely. A lot of it is driven by one, the focus on the cloud itself, right? That's driving a sense of speed like never before. Because in the infrastructure world, yeah you do it today, oh, you do it six months from now, you had some leeway. Here, networking security teams are being yelled at almost every single day, by the cloud guy saying, "You guys are not moving fast enough, fast enough, fast enough." So that thing is different. So it helps, going to shrink the sale cycle for us. So second big one is, nobody knows, essentially, the new set of use cases that are coming about. We are seeing patterns emerge in terms of new use cases almost every single day. Some days it's like completely on the other end of the spectrum. Like, "I'm only serverless and service mesh." On the other end, it's like, "I have a package application, I'm moving it to the cloud." Right? And so, we're learning a lot as well. >> A great time for Supercloud. >> Exactly. >> Do the cloud really well, make it super, bring it to other use cases, stitch it all together, make it easy to use, reduce the complexity, it's just evolution. >> Yeah. And our goal is essentially, enterprise customers should not be focused so much on building infrastructure this way, right? They should focus on users, application services, let vendors like us worry about the nitty-gritty underneath. >> Ramesh, thank you for this conversation. It's a great Cube conversation. In the middle of all the action, Supercloud, multi-cloud, the future is going to be very much cloud-based, IaaS, SaaS, connecting environments. This is the cloud 2.0, Superclouds. And this is what people are going to be working on. I'm John Furrier with theCube, thanks for watching. (soft music)

(upbeat music) >> Hello, and welcome to "theCUBE" conversation here in Palo Alto, California. I'm John Furrier, host of "theCUBE," got a great security conversation, Ed Casper who's the founder and CEO of Cloud Storage Security, the great Cloud background, Cloud security, Cloud storage. Welcome to the "theCUBE Conversation," Ed. Thanks for coming on. >> Thank you very much for having me. >> I got Lafomo on that background. You got the nice look there. Let's get into the storage blind spot conversation around Cloud Security. Obviously, reinforced has came up a ton, you heard a lot about encryption, automated reasoning but still ransomware was still hot. All these things are continuing to be issues on security but they're all brought on data and storage, right? So this is a big part of it. Tell us a little bit about how you guys came about the origination story. What is the company all about? >> Sure, so, we're a pandemic story. We started in February right before the pandemic really hit and we've survived and thrived because it is such a critical thing. If you look at the growth that's happening in storage right now, we saw this at reinforced. We saw even a recent AWS Storage Day. Their S3, in particular, houses over 200 trillion objects. If you look just 10 years ago, in 2012, Amazon touted how they were housing one trillion objects, so in a 10 year period, it's grown to 200 trillion and really most of that has happened in the last three or four years, so the pandemic and the shift in the ability and the technologies to process data better has really driven the need and driven the Cloud growth. >> I want to get into some of the issues around storage. Obviously, the trend on S3, look at what they've done. I mean, I saw my land at storage today. We've interviewed her. She's amazing. Just the EC2 and S3 the core pistons of AWS, obviously, the silicons getting better, the IaaS layers just getting so much more innovation. You got more performance abstraction layers at the past is emerging Cloud operations on premise now with hybrid is becoming a steady state and if you look at all the action, it's all this hyper-converged kind of conversations but it's not hyper-converged in a box, it's Cloud Storage, so there's a lot of activity around storage in the Cloud. Why is that? >> Well, because it's that companies are defined by their data and, if a company's data is growing, the company itself is growing. If it's not growing, they are stagnant and in trouble, and so, what's been happening now and you see it with the move to Cloud especially over the on-prem storage sources is people are starting to put more data to work and they're figuring out how to get the value out of it. Recent analysts made a statement that if the Fortune 1000 could just share and expose 10% more of their data, they'd have net revenue increases of 65 million. So it's just the ability to put that data to work and it's so much more capable in the Cloud than it has been on-prem to this point. >> It's interesting data portability is being discussed, data access, who gets access, do you move compute to the data? Do you move data around? And all these conversations are kind of around access and security. It's one of the big vulnerabilities around data whether it's an S3 bucket that's an manual configuration error, or if it's a tool that needs credentials. I mean, how do you manage all this stuff? This is really where a rethink kind of comes around so, can you share how you guys are surviving and thriving in that kind of crazy world that we're in? >> Yeah, absolutely. So, data has been the critical piece and moving to the Cloud has really been this notion of how do I protect my access into the Cloud? How do I protect who's got it? How do I think about the networking aspects? My east west traffic after I've blocked them from coming in but no one's thinking about the data itself and ultimately, you want to make that data very safe for the consumers of the data. They have an expectation and almost a demand that the data that they consume is safe and so, companies are starting to have to think about that. They haven't thought about it. It has been a blind spot, you mentioned that before. In regards to, I am protecting my management plane, we use posture management tools. We use automated services. If you're not automating, then you're struggling in the Cloud. But when it comes to the data, everyone thinks, "Oh, I've blocked access. I've used firewalls. I've used policies on the data," but they don't think about the data itself. It is that packet that you talked about that moves around to all the different consumers and the workflows and if you're not ensuring that that data is safe, then, you're in big trouble and we've seen it over and over again. >> I mean, it's definitely a hot category and it's changing a lot, so I love this conversation because it's a primary one, primary and secondary cover data cotton storage. It's kind of good joke there, but all kidding aside, it's a hard, you got data lineage tracing is a big issue right now. We're seeing companies come out there and kind of superability tangent there. The focus on this is huge. I'm curious, what was the origination story? What got you into the business? Was it like, were you having a problem with this? Did you see an opportunity? What was the focus when the company was founded? >> It's definitely to solve the problems that customers are facing. What's been very interesting is that they're out there needing this. They're needing to ensure their data is safe. As the whole story goes, they're putting it to work more, we're seeing this. I thought it was a really interesting series, one of your last series about data as code and you saw all the different technologies that are processing and managing that data and companies are leveraging today but still, once that data is ready and it's consumed by someone, it's causing real havoc if it's not either protected from being exposed or safe to use and consume and so that's been the biggest thing. So we saw a niche. We started with this notion of Cloud Storage being object storage, and there was nothing there protecting that. Amazon has the notion of access and that is how they protect the data today but not the packets themselves, not the underlying data and so, we created the solution to say, "Okay, we're going to ensure that that data is clean. We're also going to ensure that you have awareness of what that data is, the types of files you have out in the Cloud, wherever they may be, especially as they drift outside of the normal platforms that you're used to seeing that data in. >> It's interesting that people were storing data lakes. Oh yeah, just store a womp we might need and then became a data swamp. That's kind of like go back 67 years ago. That was the conversation. Now, the conversation is I need data. It's got to be clean. It's got to feed the machine learning. This is going to be a critical aspect of the business model for the developers who are building the apps, hence, the data has code reference which we've focused on but then you say, "Okay, great. Does this increase our surface area for potential hackers?" So there's all kinds of things that kind of open up, we start doing cool, innovative, things like that so, what are some of the areas that you see that your tech solves around some of the blind spots or with object store, the things that people are overlooking? What are some of the core things that you guys are seeing that you're solving? >> So, it's a couple of things, right now, the still the biggest thing you see in the news is configuration issues where people are losing their data or accidentally opening up to rights. That's the worst case scenario. Reads are a bad thing too but if you open up rights and we saw this with a major API vendor in the last couple of years they accidentally opened rights to their buckets. Hackers found it immediately and put malicious code into their APIs that were then downloaded and consumed by many, many of their customers so, it is happening out there. So the notion of ensuring configuration is good and proper, ensuring that data has not been augmented inappropriately and that it is safe for consumption is where we started and, we created a lightweight, highly scalable solution. At this point, we've scanned billions of files for customers and petabytes of data and we're seeing that it's such a critical piece to that to make sure that that data's safe. The big thing and you brought this up as well is the big thing is they're getting data from so many different sources now. It's not just data that they generate. You see one centralized company taking in from numerous sources, consolidating it, creating new value on top of it, and then releasing that and the question is, do you trust those sources or not? And even if you do, they may not be safe. >> We had an event around super Clouds is a topic we brought up to get bring the attention to the complexity of hybrid which is on premise, which is essentially Cloud operations. And the successful people that are doing things in the software side are essentially abstracting up the benefits of the infrastructures of service from HN AWS, right, which is great. Then they innovate on top so they have to abstract that storage is a key component of where we see the innovations going. How do you see your tech that kind of connecting with that trend that's coming which is everyone wants infrastructures code. I mean, that's not new. I mean, that's the goal and it's getting better every day but DevOps, the developers are driving the operations and security teams to like stay pace, so policy seeing a lot of policy seeing some cool things going on that's abstracting up from say storage and compute but then those are being put to use as well, so you've got this new wave coming around the corner. What's your reaction to that? What's your vision on that? How do you see that evolving? >> I think it's great, actually. I think that the biggest problem that you have to do as someone who is helping them with that process is make sure you don't slow it down. So, just like Cloud at scale, you must automate, you must provide different mechanisms to fit into workflows that allow them to do it just how they want to do it and don't slow them down. Don't hold them back and so, we've come up with different measures to provide and pretty much a fit for any workflow that any customer has come so far with. We do data this way. I want you to plug in right here. Can you do that? And so it's really about being able to plug in where you need to be, and don't slow 'em down. That's what we found so far. >> Oh yeah, I mean that exactly, you don't want to solve complexity with more complexity. That's the killer problem right now so take me through the use case. Can you just walk me through how you guys engage with customers? How they consume your service? How they deploy it? You got some deployment scenarios. Can you talk about how you guys fit in and what's different about what you guys do? >> Sure, so, we're what we're seeing is and I'll go back to this data coming from numerous sources. We see different agencies, different enterprises taking data in and maybe their solution is intelligence on top of data, so they're taking these data sets in whether it's topographical information or whether it's in investing type information. Then they process that and they scan it and they distribute it out to others. So, we see that happening as a big common piece through data ingestion pipelines, that's where these folks are getting most of their data. The other is where is the data itself, the document or the document set, the actual critical piece that gets moved around and we see that in pharmaceutical studies, we see it in mortgage industry and FinTech and healthcare and so, anywhere that, let's just take a very simple example, I have to apply for insurance. I'm going to upload my Social Security information. I'm going to upload a driver's license, whatever it happens to be. I want to one know which of my information is personally identifiable, so I want to be able to classify that data but because you're trusting or because you're taking data from untrusted sources, then you have to consider whether or not it's safe for you to use as your own folks and then also for the downstream users as well. >> It's interesting, in the security world, we hear zero trust and then we hear supply chain, software supply chains. We get to trust everybody, so you got kind of two things going on. You got the hardware kind of like all the infrastructure guys saying, "Don't trust anything 'cause we have a zero trust model," but as you start getting into the software side, it's like trust is critical like containers and Cloud native services, trust is critical. You guys are kind of on that balance where you're saying, "Hey, I want data to come in. We're going to look at it. We're going to make sure it's clean." That's the value here. Is that what I'm hearing you, you're taking it and you're saying, "Okay, we'll ingest it and during the ingestion process, we'll classify it. We'll do some things to it with our tech and put it in a position to be used properly." Is that right? >> That's exactly right. That's a great summary, but ultimately, if you're taking data in, you want to ensure it's safe for everyone else to use and there are a few ways to do it. Safety doesn't just mean whether it's clean or not. Is there malicious content or not? It means that you have complete coverage and control and awareness over all of your data and so, I know where it came from. I know whether it's clean and I know what kind of data is inside of it and we don't see, we see that the interesting aspects are we see that the cleanliness factor is so critical in the workflow, but we see the classification expand outside of that because if your data drifts outside of what your standard workflow was, that's when you have concerns, why is PII information over here? And that's what you have to stay on top of, just like AWS is control plane. You have to manage it all. You have to make sure you know what services have all of a sudden been exposed publicly or not, or maybe something's been taken over or not and you control that. You have to do that with your data as well. >> So how do you guys fit into the security posture? Say it a large company that might want to implement this right away. Sounds like it's right in line with what developers want and what people want. It's easy to implement from what I see. It's about 10, 15, 20 minutes to get up and running. It's not hard. It's not a heavy lift to get in. How do you guys fit in once you get operationalized when you're successful? >> It's a lightweight, highly scalable serverless solution, it's built on Fargate containers and it goes in very easily and then, we offer either native integrations through S3 directly, or we offer APIs and the APIs are what a lot of our customers who want inline realtime scanning leverage and we also are looking at offering the actual proxy aspects. So those folks who use the S3 APIs that our native AWS, puts and gets. We can actually leverage our put and get as an endpoint and when they retrieve the file or place the file in, we'll scan it on access as well, so, it's not just a one time data arrest. It can be a data in motion as you're retrieving the information as well >> We were talking with our friends the other day and we're talking about companies like Datadog. This is the model people want, they want to come in and developers are driving a lot of the usage and operational practice so I have to ask you, this fits kind of right in there but also, you also have the corporate governance policy police that want to make sure that things are covered so, how do you balance that? Because that's an important part of this as well. >> Yeah, we're really flexible for the different ways they want to consume and and interact with it. But then also, that is such a critical piece. So many of our customers, we probably have a 50/50 breakdown of those inside the US versus those outside the US and so, you have those in California with their information protection act. You have GDPR in Europe and you have Asia having their own policies as well and the way we solve for that is we scan close to the data and we scan in the customer's account, so we don't require them to lose chain of custody and send data outside of the accoun. That is so critical to that aspect. And then we don't ask them to transfer it outside of the region, so, that's another critical piece is data residency has to be involved as part of that compliance conversation. >> How much does Cloud enable you to do this that you couldn't really do before? I mean, this really shows the advantage of natively being in the Cloud to kind of take advantage of the IaaS to SAS components to solve these problems. Share your thoughts on how this is possible. What if there was no problem, what would you do? >> It really makes it a piece of cake. As silly as that sounds, when we deploy our solution, we provide a management console for them that runs inside their own accounts. So again, no metadata or anything has to come out of it and it's all push button click and because the Cloud makes it scalable because Cloud offers infrastructure as code, we can take advantage of that and then, when they say go protect data in the Ireland region, they push a button, we stand up a stack right there in the Ireland region and scan and protect their data right there. If they say we need to be in GovCloud and operate in GovCloud East, there you go, push the button and you can behave in GovCloud East as well. >> And with server lists and the region support and all the goodness really makes a really good opportunity to really manage these Cloud native services with the data interaction so, really good prospects. Final question for you. I mean, we love the story. I think it is going to be a really changing market in this area in a big way. I think the data storage relationship relative to higher level services will be huge as Cloud native continues to drive everything. What's the future? I mean, you guys see yourself as a all encompassing, all singing and dancing storage platform or a set of services that you're going to enable developers and drive that value. Where do you see this going? >> I think that it's a mix of both. Ultimately, you saw even on Storage Day the announcement of file cash and file cash creates a new common name space across different storage platforms and so, the notion of being able to use one area to access your data and have it come from different spots is fantastic. That's been in the on-prem world for a couple of years and it's finally making it to the Cloud. I see us following that trend in helping support. We're super laser-focused on Cloud Storage itself so, EBS volumes, we keep having customers come to us and say, "I don't want to run agents in my EC2 instances. I want you to snap and scan and I don't want to, I've got all this EFS and FSX out there that we want to scan," and so, we see that all of the Cloud Storage platforms, Amazon work docs, EFS, FSX, EBS, S3, we'll all come together and we'll provide a solution that's super simple, highly scalable that can meet all the storage needs so, that's our goal right now and where we're working towards. >> Well, Cloud Storage Security, you couldn't get a more a descriptive name of what you guys are working on and again, I've had many contacts with Andy Jassy when he was running AWS and he always loves to quote "The Innovator's Dilemma," one of his teachers at Harvard Business School and we were riffing on that the other day and I want to get your thoughts. It's not so much "The Innovator's Dilemma" anymore relative to Cloud 'cause that's kind of a done deal. It's "The Integrator's Dilemma," and so, it's the integrations are so huge now. If you don't integrate the right way, that's the new dilemma. What's your reaction to that? >> A 100% agreed. It's been super interesting. Our customers have come to us for a security solution and they don't expect us to be 'cause we don't want to be either. Our own engine vendor, we're not the ones creating the engines. We are integrating other engines in and so we can provide a multi engine scan that gives you higher efficacy. So this notion of offering simple integrations without slowing down the process, that's the key factor here is what we've been after so, we are about simplifying the Cloud experience to protecting your storage and it's been so funny because I thought customers might complain that we're not a name brand engine vendor, but they love the fact that we have multiple engines in place and we're bringing that to them this higher efficacy, multi engine scan. >> I mean the developer trends can change on a dime. You make it faster, smarter, higher velocity and more protected, that's a winning formula in the Cloud so Ed, congratulations and thanks for spending the time to riff on and talk about Cloud Storage Security and congratulations on the company's success. Thanks for coming on "theCUBE." >> My pleasure, thanks a lot, John. >> Okay. This conversation here in Palo Alto, California I'm John Furrier, host of "theCUBE." Thanks for watching.

(bright music) >> Welcome back to Supercloud 22. I'm John Furrier, host of "theCUBE" with Dave Vellante, with the opening keynote conversation with Vittorio Viarengo. He's the Vice President of Cross-Cloud at VMware, Cube Alumni. Vittorio, great to see you. Thanks for coming on. >> Ah, my pleasure. >> So you're kicking off the Supercloud event. Again, a pilot. Again, we were texting just a few months ago around some of the momentum. You identified this right away. You saw it, you saw the momentum. What's the reality around supercloud? What's your perspective? >> Well, I think that we have to go back to the history of IT, over the last ever. I feel like in IT, we're always running after the developers. The developers, they're smart. They go for the path of least resistance, and they create innovations, and then the entire stacks moves around, and if you look at developers over the last, you know, 15 years, they've been going to the cloud, right? And the reason they're going for the cloud is, you now, they say software is eating the world. Is really who builds software? Developers, so I think it's developers are eating the world, and so initially, there was one game in town, so they went with AWS, but eventually, we got the multiple clouds, and now, the reality is that the applications there, it's how we make money, how we save money. They're running on multiple cloud, the 75% of the companies running on multiple clouds today, and so, I think that creates the new computing platform for the next, you know, 10 years, 15 years, and I think that that multi-cloud world brings tremendous advantages, as we just talked, but also some challenges, and it's prime to a simplification, and that's where we're trying. >> One of the things we observe is this abstraction layer across clouds to create a consistent experience for customers, and very importantly, as you point out, developers. So when you think about the history of abstractions, we see another one sort of forming in the 2020s, which is really different, as you pointed out, that we had in the 2010s, where there was really, you know, one main cloud. Now, you have all these clouds. What are your thoughts on the history of abstractions? >> Well, if you look at IT, we always needed abstraction to unleash the next level of growth, right? I grew up as a... I started my career as a C++ developer. So initially, you know, on Windows, if you wanted to open a window on the screen, you had to write 200 lines of code. Then the MFC library came in, and now, you still have to be a C++ developer, but now, with a one line of code, you can initiate, open the yellow world and start to build your applications, but it's only when Visual Basic comes along, then now, we get five millions developers building applications that are 20 years later, we're still using, okay? And then the list goes on and on, and in the application integration, we used to look at the bytes on the bus and say, "Okay, this is the customers, and we're going to map it to SAP," and then we went one level higher with SOA and web services and the rest of history, and then unleashed tremendous, you know, growth and look at, you know, how we now, you know, we be able to throw APIs, integrate anything, and so then the ultimate example of abstraction is virtualization. We made all these different servers and networking and storage look like one, and now, you know, and the business never cares if you're running SAP back on-prem on HP or some other piece of hard drive. They care that it runs, right? And so I think that now, we need to bring a level of abstraction in the cloud that not only abstracts the low level APIs at the highest level, but also uniforms and unify the APIs and the way do management and security across multiple cloud. >> Let's unpack that because I think the virtualization angle is interesting 'cause with virtualization enabled AWS. If you look at AWS' success, virtualization, the Hypervisor, got them going, and that established that value. Now, the new structural change is happening. How do you define that specifically? What is supercloud in your mind? >> So in our mind, supercloud is a set of cloud native services that, first of all... Let's unpack that and go back to the virtualization. Virtualization was a great way to do it on-prem and is no wonder that AWS and Azure, they did it on their cloud, right? But the lingo franca of the cloud is not the virtualization layer. That's taken, it's hidden. It's down there, it just does its thing. The lingo franca of cloud is microservices, API, Kubernetes as the orchestration layer, and one would think, "Okay, now, we have Kubernetes, life is good. I just, you know, deploy on- Well, there are six, seven, eight Kubernetes distribution, and so to us, the supercloud is the ability to take, to factor out the common things that you can do across cloud and give you a single pane or glass to manage your application and single pipeline so you can build your application once and deploy it consistently across multiple clouds, and then, basically, factor out the other two important things with the security and observability of the application. >> One of the trade-offs of abstraction, you go back to the mainframe. They had to squeeze out the performance overheads. VMware had to do the same and done a tremendous job of it. So are we going to see that across clouds with multi-cloud or what we call supercloud. Are you going to see a trade-off? What trade-off do you see that the industry, technically, has to attack? >> Abstractions are always about trade-offs, right? You're trading off the speed. You know, I'm writing C++ code goes really fast for scale. You know, now, I have five million developers writing applications, but I think, eventually, what happens is that or you're trading off specialized skills for, you know, more valuable skills, and if I had a dollar every time I heard, "Oh, we cannot run Oracle Databases on virtualization," well, or the JVM is too slow, but guess what? How many Java developers, how many Java application are running out on the JVM? So I think, eventually, there will be trade-offs, but the technology catches up and it's a matter of like how much value are you getting in terms of scales and saving cost versus maybe the performance trade-off you were making on the lower level. >> On the evolution of hybrid cloud, 'cause right now, hybrid cloud is a steady state. People see that clearly, you know, on-premise and Edge, right around the corner. Public native cloud, there's benefits to be in the native cloud. How does multi-cloud fit? 'Cause by default, people have multiple clouds. If they run on Azure, they probably have some sort of productivity software with Microsoft or other Microsoft products, but it's best to breed. It's not yet connected. So multi-cloud has kind of become a default kind of thing. It's not yet a strategy in some people's minds, yet some people are thinking about it. So we think, and I think you might agree, that multi-cloud will happen, multiple clouds in the sense of workloads running seamlessly. Is that a pipe dream or is that near in our future? (men laugh) >> So there is a lot of unpack there. First of all, our definition of multi-cloud is that because most customers are operating their on-prem as the cloud, so the moment you have your on-prem cloud and AWS, your multi-cloud, so 75%, 85% going to 85%- >> You mean Private Cloud on-premise cloud operations? >> Yeah, and then you have another cloud, you're already multi-cloud. >> I'm assuming the experiences is identical, right? That's the assumption you- >> Well, initially, it's not identical, right? That's why you need a supercloud, right? >> Yeah, exactly. >> And most customers though are in denial, meaning that I see them being in five stages of acceptance or adoption of the multi-cloud. One is denial. We are on-prem and maybe we have one cloud. We're standardized. The second one is euphoria. Oh, look, you know, look how fast we go. All these developers are happy to do whatever they want, and then the third one is like, holy crap. They got the first bill. They realize that the security share responsibility model to deal with. They realize that somebody is to deploy this application and manage the application. Nobody does it for them, and then they go into like, (indistinct). Okay, now, we need to do something about this, right? It's a new normal, and then you end up with the enlightment, right? Now, we're really being productive and strategic about how we use multi-cloud. Very, very few customers are in that stage. Most customers are still within the denial and the new normal, and within the spectrum, you see multi-cloud as, "Okay, I have an application here, an application there. Okay, great, big deal." The next level is, "Okay, I have an application here that uses a pieces of a service of an application over there. Okay, now, I'm coordinating application. I'm using microservices," and then the third stage is like, "Okay, I am designing my application to use multiple services or multiple cloud because each uses differentiated features of that particular cloud." >> Is it part of the problem too, Vittorio, that the industry, the technology industry, you guys have not caught up. The cloud vendors aren't solving that problem. What's VMware doing to solve that problem? >> So we have seen this coming four or five years ago, right? That's why we acquired Pivotal, and then we made a number of acquisition around it because we saw that... Well, let's go back. What is VMware DNA? If you look, I've been running engineering, product management in the company then I moved to the dark side, more on the marketing side, but I've seen, and I sweat with those engineers, and when I look at those engineers, these people know how to make stuff that was not designed to work together work together and deliver value, and so if we go back to, you know, on-prem, we did it with virtualization. In the cloud, we did a new level of abstraction, which is, you know, at the APIs at the... And so over the last five years, we built what we believe is very comprehensive portfolio that unified how you build, you run, manage, secure, and access any application across any cloud. No Hypervisor required. >> So that's the game changer right there. So let me ask you a question. How does the choice factor come in because can VMware do all this or do they need to rely on partners? Because most customers have HashiCorp and other companies in there doing services for them as well. So how do you see the multi-partner strategy approach? Can you do it alone or are you going to need help from the ecosystem? >> First of all, if you look at the success of your event today, look how many vendors from multiple backgrounds and multiple level of the stack that are coming together to talk about the supercloud. So that to me is success already, and, of course, there are tremendous companies that are going to deliver fantastic value for, you know, management like HashiCorp or security and the development experience. Our approach is to bring them together as an integrated platform, and I think VMware has both the DNA and the muscles, the investment to be able to pull that off. >> Okay, you saw Keith Townsend. He had that very cool blackboard, and he called, this was maybe eight or nine months ago, he called the supercloud and VMware's multi-cloud vision aspirational. When is this going to be real? >> I think it's absolutely real today in some of the pieces. Right, there's always an aspiration. You have to look at a company like VMware as a company that looks out five, 10 years, right? You know, we have Raghu as our CEO, you know, which is a technical visionary, and so he saw five years ago, the advent of multi-cloud, and we invested in first part of the stack. What is it? How to build applications natively in the cloud using Tanzu. So with Tanzu, you can build application, manage Kubernetes cluster, secure, creating this service match, and so that's the reality today. Then on the next step is security. We recently announced our security approach. We have a very peculiar position in the stack to be able to see security, not just on the endpoint, not just, you know, in the application, but in between, right? By looking at all the Hypervisor, if you're using Hypervisor. You looking at East-West traffic with NSX and cross cloud networks, and so these are the three main places that are in place today, right? And then I cannot spoil our user conference coming in a couple of weeks where we're going to make more announcement around the supercloud, which we called cross-cloud services. >> Vittorio, I remember in 2016, I interviewed Andy Jassy and Raghu when they announced the deal with VMware. VMware and AWS had the relationship, and you're running on the cloud on AWS VMware, and you look at what's happened since, and this is where the supercloud conversation starts to kick in where Amazon's really good at moving bits around and optimizing the power and the silicon of the infrastructure, which means that the higher level services are going to be much more open for people to innovate around. So Dave calls it, the super pass. This area platform is a service to change the SaaS game. So I have to ask you, how do you see the SaaS game changing with supercloud? Because if you have a Private Cloud or Edge, you're now multiple clouds, technically, as you pointed out. How has that changed the SaaS configuration? Because SaaS and IaaS and PaaS had great relationships in native clouds to solve problems. Now, you have the multi-cloud. How do you see this platform as a service area changing or maybe enabling? >> So I think that that's where the innovation, the ability to aggregate common... Because look, there is a reason why people use multiple cloud, right? They choose it because they have differentiated features. So we don't want to ever hide those features, like if you're using Google, because you need AI capabilities, absolutely. We don't want to prevent that, right? But at the PaaS level, you know, when you are orchestrated these microservices, you don't want to do it in five different ways, right? So those are the areas where I think are prime for aggregation and simplification. How you, you know, look at all this Kubernetes environment and being able to monitor your application and force security policies, both from a resource consumption, this group of developers can only use this many resources, but also a run time that you don't run out of like, you know, you get that bill shock, and so those are the areas where I think there's this more ability for us to innovate and deliver value, not at the lower level which is taken by the- >> So you try to have your cake and eat it too, which is if you can pull that off it's game over, right? You have a specific set of cross-cloud services that are unique and value added that are differentiable in the industry, but at the same time, you're trying to give access to developers, if in fact, they want access to those primitives, right? >> Yeah. >> That's a bold aspiration. >> Well, we want to have the cake, eat it, and lose weight. (men laugh) But seriously, I think, going back to your point about the ecosystem, of course, we're not going to do it alone, right? If we were doing it alone, there is not a market, right? And so I think that the market is so big and the area of challenges for IT is so large that there's room for many companies to add value, and I think that, as I said, our approach is to, you know, we're a platform company, right? So you're going to find tremendous companies that will solve one problem for multiple clouds. You're going to find the hyperscaler that have a platform approach for one cloud. We like to think that we can position ourself in that two by two as the company that has a platform approach across multiple clouds. >> You know, it's great. That's where we've known each other for a long time. It's 12 years of "CUBE" coverage. Watching things like the CNCF emerge and do great work, watching cloud native kind of go that next level's been fun to watch, and the developers have had a great run. I mean, open sources booming, developer goodness is out there. People are shifting left, a lot of great stuff going with containers and Kubernetes. So looking good on the developer experience front right now, and I think it's only going to get better, but developers don't think about locking. They just want to get the job done. Move on to the next line of code. It's the ops teams that we're hearing from that are saying, "Hey, we love this, too, but we got to align with the developer." Level up, so to speak. So ops and security teams are saying, "Hey, I got to run this with automation with the higher level services." So there seems to be a focus around the supercloud conversation around ops teams. This is your wheelhouse, VMware. You guys do a lot of IT operations and things of that nature. How do you see that and what's the message cross-cloud brings to and supercloud brings to the development teams and the ops teams who are really going to be doing DevOps together and/or faster? >> I think if you go back to what where we started, right? Developers run the show, and I think there's been a little bit of inertia in IT organization on the op side and the security side in catching up to see how to catch up to where developers are, right? And with the DevOps revolution, if operators don't really understand what the developers need and get ahead of that, they're going to be left behind. So I'll give you an example, like SMB Global, one of our customers, their band runs their operation. Basically, told me I had to sit down and figure out what these developers were doing because I was being left behind and then or Cerner, one of our partners and customers, same thing they say, okay, we sat down. We realized that we needed to get ahead of the developers and set those guard rails, right? These are the Kubernetes environment you want to use? Okay, this is how we're going to set them up. This is want to make sure that we shift left security, that we have a single pipeline that feeds that, and Cerner, using our technology was able to... They made a business decision to move from one hyperscaler, was going to go unnamed to another hyperscaler, It was going to go unnamed, and they managed to change all the deployments in four hours. So that's the power of the supercloud, being able to say, "Hey, developers, do whatever you want, but these are the guard rails, and we're going to be able to like stay ahead of you and give you the flexibility, but also, make sure that operation and security, as a saying." >> Shift left shield right, basically. >> Awesome, awesome stuff. We've got 15 seconds. What is supercloud? What's the bumper sticker? >> The supercloud is a level of abstraction across any of the public clouds that allows developers to go fast, operators to make sense of what's happening, security to enforce security, and end users to access any application with a great user experience and security. >> And it's inclusive of on-prem. I'll just throw that in. (John laughs) >> All right, great stuff. Thanks for coming on. We're going to have a industry panel to talk about and debate Supercloud 22. We'll be right back after this break.

>> Announcer: From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR. This is "Breaking Analysis" with Dave Vellante. >> The rapid pace of cloud adoption has changed the way organizations approach cybersecurity. Specifically, the cloud is increasingly becoming the first line of cyber defense. As such, along with communicating to the board and creating a security aware culture, the chief information security officer must ensure that the shared responsibility model is being applied properly. Meanwhile, the DevSecOps team has emerged as the critical link between strategy and execution, while audit becomes the free safety, if you will, in the equation, i.e., the last line of defense. Hello, and welcome to this week's, we keep on CUBE Insights, powered by ETR. In this "Breaking Analysis", we'll share the latest data on hyperscale, IaaS, and PaaS market performance, along with some fresh ETR survey data. And we'll share some highlights and the puts and takes from the recent AWS re:Inforce event in Boston. But first, the macro. It's earning season, and that's what many people want to talk about, including us. As we reported last week, the macro spending picture is very mixed and weird. Think back to a week ago when SNAP reported. A player like SNAP misses and the Nasdaq drops 300 points. Meanwhile, Intel, the great semiconductor hope for America misses by a mile, cuts its revenue outlook by 15% for the year, and the Nasdaq was up nearly 250 points just ahead of the close, go figure. Earnings reports from Meta, Google, Microsoft, ServiceNow, and some others underscored cautious outlooks, especially those exposed to the advertising revenue sector. But at the same time, Apple, Microsoft, and Google, were, let's say less bad than expected. And that brought a sigh of relief. And then there's Amazon, which beat on revenue, it beat on cloud revenue, and it gave positive guidance. The Nasdaq has seen this month best month since the isolation economy, which "Breaking Analysis" contributor, Chip Symington, attributes to what he calls an oversold rally. But there are many unknowns that remain. How bad will inflation be? Will the fed really stop tightening after September? The Senate just approved a big spending bill along with corporate tax hikes, which generally don't favor the economy. And on Monday, August 1st, the market will likely realize that we are in the summer quarter, and there's some work to be done. Which is why it's not surprising that investors sold the Nasdaq at the close today on Friday. Are people ready to call the bottom? Hmm, some maybe, but there's still lots of uncertainty. However, the cloud continues its march, despite some very slight deceleration in growth rates from the two leaders. Here's an update of our big four IaaS quarterly revenue data. The big four hyperscalers will account for $165 billion in revenue this year, slightly lower than what we had last quarter. We expect AWS to surpass 83 billion this year in revenue. Azure will be more than 2/3rds the size of AWS, a milestone from Microsoft. Both AWS and Azure came in slightly below our expectations, but still very solid growth at 33% and 46% respectively. GCP, Google Cloud Platform is the big concern. By our estimates GCP's growth rate decelerated from 47% in Q1, and was 38% this past quarter. The company is struggling to keep up with the two giants. Remember, both GCP and Azure, they play a shell game and hide the ball on their IaaS numbers, so we have to use a survey data and other means of estimating. But this is how we see the market shaping up in 2022. Now, before we leave the overall cloud discussion, here's some ETR data that shows the net score or spending momentum granularity for each of the hyperscalers. These bars show the breakdown for each company, with net score on the right and in parenthesis, net score from last quarter. lime green is new adoptions, forest green is spending up 6% or more, the gray is flat, pink is spending at 6% down or worse, and the bright red is replacement or churn. Subtract the reds from the greens and you get net score. One note is this is for each company's overall portfolio. So it's not just cloud. So it's a bit of a mixed bag, but there are a couple points worth noting. First, anything above 40% or 40, here as shown in the chart, is considered elevated. AWS, as you can see, is well above that 40% mark, as is Microsoft. And if you isolate Microsoft's Azure, only Azure, it jumps above AWS's momentum. Google is just barely hanging on to that 40 line, and Alibaba is well below, with both Google and Alibaba showing much higher replacements, that bright red. But here's the key point. AWS and Azure have virtually no churn, no replacements in that bright red. And all four companies are experiencing single-digit numbers in terms of decreased spending within customer accounts. People may be moving some workloads back on-prem selectively, but repatriation is definitely not a trend to bet the house on, in our view. Okay, let's get to the main subject of this "Breaking Analysis". TheCube was at AWS re:Inforce in Boston this week, and we have some observations to share. First, we had keynotes from Steven Schmidt who used to be the chief information security officer at Amazon on Web Services, now he's the CSO, the chief security officer of Amazon. Overall, he dropped the I in his title. CJ Moses is the CISO for AWS. Kurt Kufeld of AWS also spoke, as did Lena Smart, who's the MongoDB CISO, and she keynoted and also came on theCUBE. We'll go back to her in a moment. The key point Schmidt made, one of them anyway, was that Amazon sees more data points in a day than most organizations see in a lifetime. Actually, it adds up to quadrillions over a fairly short period of time, I think, it was within a month. That's quadrillion, it's 15 zeros, by the way. Now, there was drill down focus on data protection and privacy, governance, risk, and compliance, GRC, identity, big, big topic, both within AWS and the ecosystem, network security, and threat detection. Those are the five really highlighted areas. Re:Inforce is really about bringing a lot of best practice guidance to security practitioners, like how to get the most out of AWS tooling. Schmidt had a very strong statement saying, he said, "I can assure you with a 100% certainty that single controls and binary states will absolutely positively fail." Hence, the importance of course, of layered security. We heard a little bit of chat about getting ready for the future and skating to the security puck where quantum computing threatens to hack all of the existing cryptographic algorithms, and how AWS is trying to get in front of all that, and a new set of algorithms came out, AWS is testing. And, you know, we'll talk about that maybe in the future, but that's a ways off. And by its prominent presence, the ecosystem was there enforced, to talk about their role and filling the gaps and picking up where AWS leaves off. We heard a little bit about ransomware defense, but surprisingly, at least in the keynotes, no discussion about air gaps, which we've talked about in previous "Breaking Analysis", is a key factor. We heard a lot about services to help with threat detection and container security and DevOps, et cetera, but there really wasn't a lot of specific talk about how AWS is simplifying the life of the CISO. Now, maybe it's inherently assumed as AWS did a good job stressing that security is job number one, very credible and believable in that front. But you have to wonder if the world is getting simpler or more complex with cloud. And, you know, you might say, "Well, Dave, come on, of course it's better with cloud." But look, attacks are up, the threat surface is expanding, and new exfiltration records are being set every day. I think the hard truth is, the cloud is driving businesses forward and accelerating digital, and those businesses are now exposed more than ever. And that's why security has become such an important topic to boards and throughout the entire organization. Now, the other epiphany that we had at re:Inforce is that there are new layers and a new trust framework emerging in cyber. Roles are shifting, and as a direct result of the cloud, things are changing within organizations. And this first hit me in a conversation with long-time cyber practitioner and Wikibon colleague from our early Wikibon days, and friend, Mike Versace. And I spent two days testing the premise that Michael and I talked about. And here's an attempt to put that conversation into a graphic. The cloud is now the first line of defense. AWS specifically, but hyperscalers generally provide the services, the talent, the best practices, and automation tools to secure infrastructure and their physical data centers. And they're really good at it. The security inside of hyperscaler clouds is best of breed, it's world class. And that first line of defense does take some of the responsibility off of CISOs, but they have to understand and apply the shared responsibility model, where the cloud provider leaves it to the customer, of course, to make sure that the infrastructure they're deploying is properly configured. So in addition to creating a cyber aware culture and communicating up to the board, the CISO has to ensure compliance with and adherence to the model. That includes attracting and retaining the talent necessary to succeed. Now, on the subject of building a security culture, listen to this clip on one of the techniques that Lena Smart, remember, she's the CISO of MongoDB, one of the techniques she uses to foster awareness and build security cultures in her organization. Play the clip >> Having the Security Champion program, so that's just, it's like one of my babies. That and helping underrepresented groups in MongoDB kind of get on in the tech world are both really important to me. And so the Security Champion program is purely purely voluntary. We have over 100 members. And these are people, there's no bar to join, you don't have to be technical. If you're an executive assistant who wants to learn more about security, like my assistant does, you're more than welcome. Up to, we actually, people grade themselves when they join us. We give them a little tick box, like five is, I walk on security water, one is I can spell security, but I'd like to learn more. Mixing those groups together has been game-changing for us. >> Now, the next layer is really where it gets interesting. DevSecOps, you know, we hear about it all the time, shifting left. It implies designing security into the code at the dev level. Shift left and shield right is the kind of buzz phrase. But it's getting more and more complicated. So there are layers within the development cycle, i.e., securing the container. So the app code can't be threatened by backdoors or weaknesses in the containers. Then, securing the runtime to make sure the code is maintained and compliant. Then, the DevOps platform so that change management doesn't create gaps and exposures, and screw things up. And this is just for the application security side of the equation. What about the network and implementing zero trust principles, and securing endpoints, and machine to machine, and human to app communication? So there's a lot of burden being placed on the DevOps team, and they have to partner with the SecOps team to succeed. Those guys are not security experts. And finally, there's audit, which is the last line of defense or what I called at the open, the free safety, for you football fans. They have to do more than just tick the box for the board. That doesn't cut it anymore. They really have to know their stuff and make sure that what they sign off on is real. And then you throw ESG into the mix is becoming more important, making sure the supply chain is green and also secure. So you can see, while much of this stuff has been around for a long, long time, the cloud is accelerating innovation in the pace of delivery. And so much is changing as a result. Now, next, I want to share a graphic that we shared last week, but a little different twist. It's an XY graphic with net score or spending velocity in the vertical axis and overlap or presence in the dataset on the horizontal. With that magic 40% red line as shown. Okay, I won't dig into the data and draw conclusions 'cause we did that last week, but two points I want to make. First, look at Microsoft in the upper-right hand corner. They are big in security and they're attracting a lot of dollars in the space. We've reported on this for a while. They're a five-star security company. And every time, from a spending standpoint in ETR data, that little methodology we use, every time I've run this chart, I've wondered, where the heck is AWS? Why aren't they showing up there? If security is so important to AWS, which it is, and its customers, why aren't they spending money with Amazon on security? And I asked this very question to Merrit Baer, who resides in the office of the CISO at AWS. Listen to her answer. >> It doesn't mean don't spend on security. There is a lot of goodness that we have to offer in ESS, external security services. But I think one of the unique parts of AWS is that we don't believe that security is something you should buy, it's something that you get from us. It's something that we do for you a lot of the time. I mean, this is the definition of the shared responsibility model, right? >> Now, maybe that's good messaging to the market. Merritt, you know, didn't say it outright, but essentially, Microsoft they charge for security. At AWS, it comes with the package. But it does answer my question. And, of course, the fact is that AWS can subsidize all this with egress charges. Now, on the flip side of that, (chuckles) you got Microsoft, you know, they're both, they're competing now. We can take CrowdStrike for instance. Microsoft and CrowdStrike, they compete with each other head to head. So it's an interesting dynamic within the ecosystem. Okay, but I want to turn to a powerful example of how AWS designs in security. And that is the idea of confidential computing. Of course, AWS is not the only one, but we're coming off of re:Inforce, and I really want to dig into something that David Floyer and I have talked about in previous episodes. And we had an opportunity to sit down with Arvind Raghu and J.D. Bean, two security experts from AWS, to talk about this subject. And let's share what we learned and why we think it matters. First, what is confidential computing? That's what this slide is designed to convey. To AWS, they would describe it this way. It's the use of special hardware and the associated firmware that protects customer code and data from any unauthorized access while the data is in use, i.e., while it's being processed. That's oftentimes a security gap. And there are two dimensions here. One is protecting the data and the code from operators on the cloud provider, i.e, in this case, AWS, and protecting the data and code from the customers themselves. In other words, from admin level users are possible malicious actors on the customer side where the code and data is being processed. And there are three capabilities that enable this. First, the AWS Nitro System, which is the foundation for virtualization. The second is Nitro Enclaves, which isolate environments, and then third, the Nitro Trusted Platform Module, TPM, which enables cryptographic assurances of the integrity of the Nitro instances. Now, we've talked about Nitro in the past, and we think it's a revolutionary innovation, so let's dig into that a bit. This is an AWS slide that was shared about how they protect and isolate data and code. On the left-hand side is a classical view of a virtualized architecture. You have a single host or a single server, and those white boxes represent processes on the main board, X86, or could be Intel, or AMD, or alternative architectures. And you have the hypervisor at the bottom which translates instructions to the CPU, allowing direct execution from a virtual machine into the CPU. But notice, you also have blocks for networking, and storage, and security. And the hypervisor emulates or translates IOS between the physical resources and the virtual machines. And it creates some overhead. Now, companies like VMware have done a great job, and others, of stripping out some of that overhead, but there's still an overhead there. That's why people still like to run on bare metal. Now, and while it's not shown in the graphic, there's an operating system in there somewhere, which is privileged, so it's got access to these resources, and it provides the services to the VMs. Now, on the right-hand side, you have the Nitro system. And you can see immediately the differences between the left and right, because the networking, the storage, and the security, the management, et cetera, they've been separated from the hypervisor and that main board, which has the Intel, AMD, throw in Graviton and Trainium, you know, whatever XPUs are in use in the cloud. And you can see that orange Nitro hypervisor. That is a purpose-built lightweight component for this system. And all the other functions are separated in isolated domains. So very strong isolation between the cloud software and the physical hardware running workloads, i.e., those white boxes on the main board. Now, this will run at practically bare metal speeds, and there are other benefits as well. One of the biggest is security. As we've previously reported, this came out of AWS's acquisition of Annapurna Labs, which we've estimated was picked up for a measly $350 million, which is a drop in the bucket for AWS to get such a strategic asset. And there are three enablers on this side. One is the Nitro cards, which are accelerators to offload that wasted work that's done in traditional architectures by typically the X86. We've estimated 25% to 30% of core capacity and cycles is wasted on those offloads. The second is the Nitro security chip, which is embedded and extends the root of trust to the main board hardware. And finally, the Nitro hypervisor, which allocates memory and CPU resources. So the Nitro cards communicate directly with the VMs without the hypervisors getting in the way, and they're not in the path. And all that data is encrypted while it's in motion, and of course, encryption at rest has been around for a while. We asked AWS, is this an, we presumed it was an Arm-based architecture. We wanted to confirm that. Or is it some other type of maybe hybrid using X86 and Arm? They told us the following, and quote, "The SoC, system on chips, for these hardware components are purpose-built and custom designed in-house by Amazon and Annapurna Labs. The same group responsible for other silicon innovations such as Graviton, Inferentia, Trainium, and AQUA. Now, the Nitro cards are Arm-based and do not use any X86 or X86/64 bit CPUs. Okay, so it confirms what we thought. So you may say, "Why should we even care about all this technical mumbo jumbo, Dave?" Well, a year ago, David Floyer and I published this piece explaining why Nitro and Graviton are secret weapons of Amazon that have been a decade in the making, and why everybody needs some type of Nitro to compete in the future. This is enabled, this Nitro innovations and the custom silicon enabled by the Annapurna acquisition. And AWS has the volume economics to make custom silicon. Not everybody can do it. And it's leveraging the Arm ecosystem, the standard software, and the fabrication volume, the manufacturing volume to revolutionize enterprise computing. Nitro, with the alternative processor, architectures like Graviton and others, enables AWS to be on a performance, cost, and power consumption curve that blows away anything we've ever seen from Intel. And Intel's disastrous earnings results that we saw this past week are a symptom of this mega trend that we've been talking about for years. In the same way that Intel and X86 destroyed the market for RISC chips, thanks to PC volumes, Arm is blowing away X86 with volume economics that cannot be matched by Intel. Thanks to, of course, to mobile and edge. Our prediction is that these innovations and the Arm ecosystem are migrating and will migrate further into enterprise computing, which is Intel's stronghold. Now, that stronghold is getting eaten away by the likes of AMD, Nvidia, and of course, Arm in the form of Graviton and other Arm-based alternatives. Apple, Tesla, Amazon, Google, Microsoft, Alibaba, and others are all designing custom silicon, and doing so much faster than Intel can go from design to tape out, roughly cutting that time in half. And the premise of this piece is that every company needs a Nitro to enable alternatives to the X86 in order to support emergent workloads that are data rich and AI-based, and to compete from an economic standpoint. So while at re:Inforce, we heard that the impetus for Nitro was security. Of course, the Arm ecosystem, and its ascendancy has enabled, in our view, AWS to create a platform that will set the enterprise computing market this decade and beyond. Okay, that's it for today. Thanks to Alex Morrison, who is on production. And he does the podcast. And Ken Schiffman, our newest member of our Boston Studio team is also on production. Kristen Martin and Cheryl Knight help spread the word on social media and in the community. And Rob Hof is our editor in chief over at SiliconANGLE. He does some great, great work for us. Remember, all these episodes are available as podcast. Wherever you listen, just search "Breaking Analysis" podcast. I publish each week on wikibon.com and siliconangle.com. Or you can email me directly at David.Vellante@siliconangle.com or DM me @dvellante, comment on my LinkedIn post. And please do check out etr.ai for the best survey data in the enterprise tech business. This is Dave Vellante for theCUBE Insights, powered by ETR. Thanks for watching. Be well, and we'll see you next time on "Breaking Analysis." (upbeat theme music)

(upbeat music) >> Okay, welcome back everyone. CUBE's coverage of re:MARS, here in Las Vegas, in person. I'm John Furrier, host of theCUBE. This is the analyst panel wrap up analysis of the keynote, the show, past one and a half days. We got two great guests here. We got Andy Thurai, Vice President, Principal Consultant, Constellation Research. Larry Carvalho, Principal Consultant at RobustCloud LLC. Congratulations going out on your own. >> Thank you. >> Andy, great to see you. >> Great to see you as well. >> Guys, thanks for coming out. So this is the session where we break down and analyze, you guys are analysts, industry analysts, you go to all the shows, we see each other. You guys are analyzing the landscape. What does this show mean to you guys? 'Cause this is not obvious to the normal tech follower. The insiders see the confluence of robotics, space, automation and machine learning. Obviously, it's IoTs, industrials, it's a bunch of things. But there's some dots to connect. Let's start with you, Larry. What do you see here happening at this show? >> So you got to see how Amazon started, right? When AWS started. When AWS started, it primarily took the compute storage, networking of Amazon.com and put it as a cloud service, as a service, and started selling the heck out of it. This is a stage later now that Amazon.com has done a lot of physical activity, and using AIML and the robotics, et cetera, it's now the second phase of innovation, which is beyond digital transformation of back office processes, to the transformation of physical processes where people are now actually delivering remotely and it's an amazing area. >> So back office's IT data center kind of vibe. >> Yeah. >> You're saying front end, industrial life. >> Yes. >> Life as we know it. >> Right, right. I mean, I just stopped at a booth here and they have something that helps anybody who's stuck in the house who cannot move around. But with Alexa, order some water to bring them wherever they are in the house where they're stuck in their bed. But look at the innovation that's going on there right at the edge. So I think those are... >> John: And you got the Lunar, got the sex appeal of the space, Lunar Outpost interview, >> Yes. >> those guys. They got Rover on Mars. They're going to have be colonizing the moon. >> Yes. >> I made a joke, I'm like, "Well, I left a part back on earth, I'll be right back." (Larry and Andy laugh) >> You can't drive back to the office. So a lot of challenges. Andy, what's your take of the show? Take us your analysis. What's the vibe, what's your analysis so far? >> It's a great show. So, as Larry was saying, one of the thing was that when Amazon started, right? So they were more about cloud computing. So, which means is they try to commoditize more of data center components or compute components. So that was working really well for what I call it as a compute economy, right? >> John: Mm hmm. >> And I call the newer economy as more of a AIML-based data economy. So when you move from a compute economy into a data economy, there are things that come into the forefront that never existed before, never popular before. Things like your AIML model creation, model training, model movement, model influencing, all of the above, right? And then of course the robotics has come long way since then. And then some of what they do at the store, or the charging, the whole nine yards. So, the whole concept of all of these components, when you put them on re:Invent, such a big show, it was getting lost. So that's why they don't have it for a couple of years. They had it one year. And now all of a sudden they woke up and say, "You know what? We got to do this!" >> John: Yeah. >> To bring out this critical components that we have, that's ripe, mature for the world to next component. So that's why- I think they're pretty good stuff. And some of the robotics things I saw in there, like one of them I posted on my Twitter, it's about the robot dog, sniffing out the robot rover, which I thought was pretty hilarious. (All laugh) >> Yeah, this is the thing. You're seeing like the pandemic put everything on hold on the last re:Mars, and then the whole world was upside down. But a lot of stuff pulled forward. You saw the call center stuff booming. You saw the Zoomification of our workplace. And I think a lot of people got to the realization that this hybrid, steady-state's here. And so, okay. That settles that. But the digital transformation of actually physical work? >> Andy: Yeah. >> Location, the walk in and out store right over here we've seen that's the ghost store in Seattle. We've all been there. In fact, I was kind of challenged, try to steal something. I'm like, okay- (Larry laughs) I'm pulling all my best New Jersey moves on everyone. You know? >> Andy: You'll get charged for it. >> I couldn't get away with it. Two double packs, drop it, it's smart as hell. Can't beat the system. But, you bring that to where the AI machine learning, and the robotics meet, robots. I mean, we had robots here on theCUBE. So, I think this robotics piece is a huge IoT, 'cause we've been covering industrial IoT for how many years, guys? And you could know what's going on there. Huge cyber threats. >> Mm hmm. >> Huge challenges, old antiquated OT technology. So I see a confluence in the collision between that OT getting decimated, to your point. And so, do you guys see that? I mean, am I just kind of seeing mirage? >> I don't see it'll get decimated, it'll get replaced with a newer- >> John: Dave would call me out on that. (Larry laughs) >> Decimated- >> Microsoft's going to get killed. >> I think it's going to have to be reworked. And just right now, you want do anything in a shop floor, you have to have a physical wire connected to it. Now you think about 5G coming in, and without a wire, you get minute details, you get low latency, high bandwidth. And the possibilities are endless at the edge. And I think with AWS, they got Outposts, they got Snowcone. >> John: There's a threat to them at the edge. Outpost is not doing well. You talk to anyone out there, it's like, you can't find success stories. >> Larry: Yeah. >> I'm going to get hammered by Amazon people, "Oh, what're you're saying that?" You know, EKS for example, with serverless is kicking ass too. So, I mean I'm not saying Outpost was wrong answer, it was a right at the time, what, four years ago that came out? >> Yeah. >> Okay, so, but that doesn't mean it's just theirs. You got Dell Technologies want some edge action. >> Yeah. >> So does HPE. >> Yes. >> So you got a competitive edge situation. >> I agree with that and I think that's definitely not Amazon's strong point, but like everything, they try to make it easy to use. >> John: Yeah. >> You know, you look at the AIML and they got Canvas. So Canvas says, hey, anybody can do AIML. If they can do that for the physical robotic processes, or even like with Outpost and Snowcone, that'll be good. I don't think they're there yet, and they don't have the presence in the market, >> John: Yeah. >> like HPE and, >> John: Well, let me ask you guys this question, because I think this brings up the next point. Will the best technology win or will the best solution win? Because if cloud's a platform and all software's open source, which you can make those assumptions, you then say, hey, they got this killer robotics thing going on with Artemis and Moonshot, they're trying to colonize the moon, but oh, they discovered a killer way to solve a big problem. Does something fall out of this kind of re:Mars environment, that cracks the code and radically changes and disrupts the IoT game? That's my open question. I don't know the answer. I'd love to get your take on what might be possible, what wild card's out there around, disrupting the edge. >> So one thing I see the way, so when IoT came into the world of play, it's when you're digitizing the physical world, it's IoT that does digitalization part of that actually, right? >> But then it has its own set of problems. >> John: Yeah. >> You're talking about you installing sensor everywhere, right? And not only installing your own sensor, but also you're installing competitor sensors. So in a given square feet how many sensors can you accommodate? So there are physical limitations on liabilities of bandwidth and networking all of that. >> John: And integration. >> As well. >> John: Your point. >> Right? So when that became an issue, this is where I was talking to the robotic guys here, a couple of companies, and one of the use cases they were talking about, which I thought was pretty cool, is, rather than going the sensor route, you go the robot route. So if you have either a factor that you want to map out, you put as many sensors on your robot, whatever that is, and then you make it go around, map the whole thing, and then you also do a surveillance in the whole nine yards. So, you can either have a fixed sensors or you can have moving sensors. So you can have three or four robots. So initially, when I was asking them about the price of it, when they were saying about a hundred thousand dollars, I was like, "Who would buy that?" (John and Larry laugh) >> When they then explained that, this is the use case, oh, that makes sense, because if you had to install, entire factory floor sensors, you're talking about millions of dollars. >> John: Yeah. >> But if you do the moveable sensors in this way, it's a lot cheaper. >> John: Yeah, yeah. >> So it's based on your use case, what are your use cases? What are you trying to achieve? >> The general purpose is over. >> Yeah. >> Which you're getting at, and that the enablement, this is again, this is the cloud scale open question- >> Yep. >> it's, okay, the differentiations isn't going to be open source software. That's open. >> It's going to be in the, how you configure it. >> Yes. >> What workflows you might have, the data streams. >> I think, John, you're bringing up a very good point about general purpose versus special purpose. Yesterday Zoox was on the stage and when they talked about their vehicle, it's made just for self-driving. You walk around in Vegas, over here, you see a bunch of old fashioned cars, whether they're Ford or GM- >> and they put all these devices around it, but you're still driving the same car. >> John: Yeah, exactly. >> You can retrofit those, but I don't think that kind of IoT is going to work. But if you redo the whole thing, we are going to see a significant change in how IoT delivers value all the way from the industrial to home, to healthcare, mining, agriculture, it's going to have to redo. I'll go back to the OT question. There are some OT guys, I know Rockwell and Siemens, some of them are innovating faster. The ones who innovate faster to keep up with the IT side, as well as the MLAI model are going to be the winners on that one. >> John: Yeah, I agree. Andy, your thoughts on manufacturing, you brought up the sensor thing. Robotics ultimately is, end of the day, an opportunity there. Obviously machine learning, we know what that does. As we move into these more autonomous builds, what does that look like? And is Amazon positioned well there? Obviously they have big manufacturers. Some are saying that they might want to get out of that business too, that Jassy's evaluating that some are saying. So, where does this all lead for that robotics manufacturing lifestyle, walk in, grab my food? 'Cause it's all robotics and AI at the end of the day, I got sensors, I got cameras, I got non-humans moving heavy lifting stuff, fixing the moon will be done by robots, not humans. So it's all coming. What's your analysis? >> Well, so, the point about robotics is on how far it has come, it is unbelievable, right? Couple of examples. One was that I was just talking to somebody, was explaining to them, to see that robot dog over there at the Boston Dynamics one- >> John: Yeah. >> climbing up and down the stairs. >> Larry: Yeah. >> That's more like the dinosaur movie opening the doors scene. (John and Larry laugh) It's like that for me, because the coordinated things, it is able to go walk up and down, that's unbelievable. But okay, it does that, and then there was also another video which is going on viral on the internet. This guy kicks the dog, robot dog, and then it falls down and it gets back up, and the sentiment that people were feeling for the dog, (Larry laughs) >> you can't, it's a robot, but people, it just comes at that level- >> John: Empathy, for a non-human. >> Yeah. >> But you see him, hey you, get off my lawn, you know? It's like, where are we? >> It has come to that level that people are able to kind of not look at that as a robot, but as more like a functioning, almost like a pet-level, human-level being. >> John: Yeah. >> And you saw that the human-like walking robot there as well. But to an extent, in my view, they are all still in an experimentation, innovation phase. It doesn't made it in the industrial terms yet. >> John: Yeah, not yet, it's coming. >> But, the problem- >> John: It's coming fast. That's what I'm trying to figure out is where you guys see Amazon and the industry relative to what from the fantasy coming reality- >> Right. >> of space in Mars, which is, it's intoxicating, let's face it. People love this. The nerds are all here. The geeks are all here. It's a celebration. James Hamilton's here- >> Yep. >> trying to get him on theCUBE. And he's here as a civilian. Jeff Barr, same thing. I'm here, not for Amazon, I bought a ticket. No, you didn't buy a ticket. (Larry laughs) >> I'm going to check on that. But, he's geeking out. >> Yeah. >> They're there because they want to be here. >> Yeah. >> Not because they have to work here. >> Well, I mean, the thing is, the innovation velocity has increased, because, in the past, remember, the smaller companies couldn't innovate because they don't have the platform. Now Compute is a platform available at the scale you want, AI is available at the scale. Every one of them is available at the scale you want. So if you have an idea, it's easy to innovate. The innovation velocity is high. But where I see most of the companies failing, whether startup or big company, is that you don't find the appropriate use case to solve, and then don't sell it to the right people to buy that. So if you don't find the right use case or don't sell the right value proposition to the actual buyer, >> John: Mm hmm. >> then why are you here? What are you doing? (John laughs) I mean, you're not just an invention, >> John: Eh, yeah. >> like a telephone kind of thing. >> Now, let's get into next talk track. I want to get your thoughts on the experience here at re:Mars. Obviously AWS and the Amazon people kind of combined effort between their teams. The event team does a great job. I thought the event, personally, was first class. The coffee didn't come in late today, I was complaining about that, (Larry laughs) >> people complaining out there, at CUBE reviews. But world class, high bar on the quality of the event. But you guys were involved in the analyst program. You've been through the walkthrough, some of the briefings. I couldn't do that 'cause I'm doing theCUBE interviews. What would you guys learn? What were some of the key walkaways, impressions? Amazon's putting all new teams together, seems on the analyst relations. >> Larry: Yeah. >> They got their mojo booming. They got three shows now, re:Mars, re:inforce, re:invent. >> Andy: Yeah. >> Which will be at theCUBE at all three. Now we got that coverage going, what's it like? What was the experience like? Did you feel it was good? Where do they need to improve? How would you grade the Amazon team? >> I think they did a great job over here in just bringing all the physical elements of the show. Even on the stage, where they had robots in there. It made it real and it's not just fake stuff. And every, or most of the booths out there are actually having- >> John: High quality demos. >> high quality demos. (John laughs) >> John: Not vaporware. >> Yeah, exactly. Not vaporware. >> John: I won't say the name of the company. (all laugh) >> And even the sessions were very good. They went through details. One thing that stood out, which is good, and I cover Low Code/No Code, and Low Code/No Code goes across everything. You know, you got DevOps No Low-Code Low-Code. You got AI Low Code/No Code. You got application development Low Code/No Code. What they have done with AI with Low Code/No Code is very powerful with Canvas. And I think that has really grown the adoption of AI. Because you don't have to go and train people what to do. And then, people are just saying, Hey, let me kick the tires, let me use it. Let me try it. >> John: It's going to be very interesting to see how Amazon, on that point, handles this, AWS handles this data tsunami. It's cause of Snowflake. Snowflake especially running the table >> Larry: Yeah. >> on the old Hadoop world. I think Dave had a great analysis with other colleagues last week at Snowflake Summit. But still, just scratching the surface. >> Larry: Yeah. >> The question is, how shared that ecosystem, how will that morph? 'Cause right now you've got Data Bricks, you've got Snowflake and a handful of others. Teradata's got some new chops going on there and a bunch of other folks. Some are going to win and lose in this downturn, but still, the scale that's needed is massive. >> So you got data growing so much, you were talking earlier about the growth of data and they were talking about the growth. That is a big pie and the pie can be shared by a lot of folks. I don't think- >> John: And snowflake pays AWS, remember that? >> Right, I get it. (John laughs) >> I get it. But they got very unique capabilities, just like Netflix has very unique capabilities. >> John: Yeah. >> They also pay AWS. >> John: Yeah. >> Right? But they're competing on prime. So I really think the cooperation is going to be there. >> John: Yeah. >> The pie is so big >> John: Yeah. >> that there's not going to be losers, but everybody could be winners. >> John: I'd be interested to follow up with you guys after next time we have an event together, we'll get you back on and figure out how do you measure this transitions? You went to IDC, so they had all kinds of ways to measure shipments. >> Larry: Yep. >> Even Gartner had fumbled for years, the Magic Quadrant on IaaS and PaaS when they had the market share. (Larry laughs) And then they finally bundled PaaS and IaaS together after years of my suggesting, thank you very much Gartner. (Larry laughs) But that just performs as the landscape changes so does the scoreboard. >> Yep. >> Right so, how do you measure who's winning and who's losing? How can we be critical of Amazon so they can get better? I mean, Andy Jassy always said to me, and Adam Salassi same way, we want to hear how bad we're doing so we can get better. >> Yeah. >> So they're open-minded to feedback. I mean, not (beep) posting on them, but they're open to critical feedback. What do you guys, what feedback would you give Amazon? Are they winning? I see them number one clearly over Azure, by miles. And even though Azure's kicking ass and taking names, getting back in the game, Microsoft's still behind, by a long ways, in some areas. >> Andy: Yes. In some ways. >> So, the scoreboard's changing. What's your thoughts on that? >> So, look, I mean, at the end of the day, when it comes to compute, right, Amazon is a clear winner. I mean, there are others who are catching up to it, but still, they are the established leader. And it comes with its own advantages because when you're trying to do innovation, when you're trying to do anything else, whether it's a data collection, we were talking about the data sensors, the amount of data they are collecting, whether it's the store, that self-serving store or other innovation projects, what they have going on. The storage compute and process of that requires a ton of compute. And they have that advantage with them. And, as I mentioned in my last article, one of my articles, when it comes to AIML and data programs, there is a rich and there is a poor. And the rich always gets richer because they, they have one leg up already. >> John: Yeah. >> I mean the amount of model training they have done, the billion or trillion dollar trillion parametrization, fine tuning of the model training and everything. They could do it faster. >> John: Yeah. >> Which means they have a leg up to begin with. So unless you are given an opportunity as a smaller, mid-size company to compete at them at the same level, you're going to start at the negative level to begin with. You have a lot of catch up to do. So, the other thing about Amazon is that they, when it comes to a lot of areas, they admit that they have to improve in certain areas and they're open and willing and listen to the people. >> Where are you, let's get critical. Let's do some critical analysis. Where does Amazon Websters need to get better? In your opinion, what criticism would you, in a constructive way, share? >> I think on the open source side, they need to be more proactive in, they are already, but they got to get even better than what they are. They got to engage with the community. They got to be able to talk on the open source side, hey, what are we doing? Maybe on the hardware side, can they do some open-sourcing of that? They got graviton. They got a lot of stuff. Will they be able to share the wealth with other folks, other than just being on an Amazon site, on the edge with their partners. >> John: Got it. >> If they can now take that, like you said, compute with what they have with a very end-to-end solution, the full stack. And if they can extend it, that's going to be really beneficial for them. >> Awesome. Andy, final word here. >> So one area where I think they could improve, which would be a game changer would be, right now, if you look at all of their solutions, if you look at the way they suggest implementation, the innovations, everything that comes out, comes out across very techy-oriented. The persona is very techy-oriented. Very rarely their solutions are built to the business audience or to the decision makers. So if I'm, say, an analyst, if I want to build, a business analyst rather, if I want to build a model, and then I want to deploy that or do some sort of application, mobile application, or what have you, it's a little bit hard. It's more techy-oriented. >> John: Yeah, yeah. >> So, if they could appeal or build a higher level abstraction of how to build and deploy applications for business users, or even build something industry specific, that's where a lot of the legacy companies succeeded. >> John: Yeah. >> Go after manufacturing specific or education. >> Well, we coined the term 'Supercloud' last re:Invent, and that's what we see. And Jerry Chen at Greylock calls it Castles in the Cloud, you can create these moats >> Yep. >> on top of the CapEx >> Yep. >> of Amazon. >> Exactly. >> And ride their back. >> Yep. >> And the difference in what you're paying and what you're charging, if you're good, like a Snowflake or a Mongo. I mean, Mongo's, they're just as big as Snow, if not bigger on Amazon than Snowflake is. 'Cause they use a lot of compute. No one turns off their database. (John laughs) >> Snowflake a little bit different, a little nuanced point, but, this is the new thing. You see Goldman Sachs, you got Capital One. They're building their own kind of, I call them sub clouds, but Dave Vellante says it's a Supercloud. And that essentially is the model. And then once you have a Supercloud, you say, great, I'm going to make sure it works on Azure and Google. >> Andy: Yep. >> And Alibaba if I have to. So, we're kind of seeing a playbook. >> Andy: Mm hmm. >> But you can't get it wrong 'cause it scales. >> Larry: Yeah, yeah. >> You can't scale the wrong answer. >> Andy: Yeah. >> So that seems to be what I'm watching is, who gets it right? Product market fit. Then if they roll it out to the cloud, then it becomes a Supercloud, and that's pure product market fit. So I think that's something that I've seen some people trying to figure out. And then, are you a supplier to the Superclouds? Like a Dell? Or you become an enabler? >> Andy: Yeah. >> You know, what's Dell Technologies do? >> Larry: Yeah. >> I mean, how do the box movers compete? >> Larry: I, the whole thing is now hybrid and you're going to have to see just, you said. (Larry laughs) >> John: Hybrid's a steady-state. I don't need to. >> Andy: I mean, >> By the way we're (indistinct), we can't get the chips, cause Broadcom and Apple bought 'em all. (Larry laughs) I mean there's a huge chip problem going on. >> Yes. I agree. >> Right now. >> I agree. >> I mean all these problems when you attract to a much higher level, a lot of those problems go away because you don't care about what they're using underlying as long as you deliver my solution. >> Larry: Yes. >> Yeah, it could be significantly, a little bit faster than what it used to be. But at the end of the day, are you solving my specific use case? >> John: Yeah. >> Then I'm willing to wait a little bit longer. >> John: Yeah. Time's on our side and now they're getting the right answers. Larry, Andy, thanks for coming on. This great analyst session turned into more of a podcast vibe, but you know what? (Larry laughs) To chill here at re:Mars, thanks for coming on, and we unpacked a lot. Thanks for sharing. >> Both: Thank you. >> Appreciate it. We'll get you back on. We'll get you in the rotation. We'll take it virtual. Do a panel. Do a panel, do some panels around this. >> Larry: Absolutely. >> Andy: Oh this not virtual, this physical. >> No we're live right now! (all laugh) We get back to Palo Alto. You guys are influencers. Thanks for coming on. You guys are moving the market, congratulations. Take a minute, quick minute each to plug any work you're doing for the people watching. Larry, what are you working on? Andy? You go after Larry, what you're working on. >> Yeah. So since I started my company, RobustCloud, since I left IDC about a year ago, I'm focused on edge computing, cloud-native technologies, and Low Code/No Code. And basically I help companies put their business value together. >> All right, Andy, what are you working on? >> I do a lot of work on the AIML areas. Particularly, last few of my reports are in the AI Ops incident management and ML Ops areas of how to generally improve your operations. >> John: Got it, yeah. >> In other words, how do you use the AIML to improve your IT operations? How do you use IT Ops to improve your AIML efficiency? So those are the- >> John: The real hardcore business transformation. >> Yep. >> All right. Guys, thanks so much for coming on the analyst session. We do keynote review, breaking down re:Mars after day two. We got a full day tomorrow. I'm John Furrier with theCUBE. See you next time. (pleasant music)

(pleasant music) >> We're back at Veeamon 2022. We're here at the Aria hotel in Las Vegas. This is theCube's continuous coverage. We're in day two. Welcome to the CXO session. We have CEO, CTO, CSO, chief strategy officer. Brett Diamond is the CEO, Justin Giardina is the CTO, and Dante Orsini is the chief strategy officer for 11:11 Systems recently named, I guess today, the impact cloud service provider of the year. Congratulations, guys. Welcome to theCube. Welcome back to theCube. Great to see you again. >> Thank you. >> Great. >> Likewise. >> Thanks for having us. Okay, Brett, let's start with you. Give us the overview of 11:11, your focus area, talk about the Island acquisition, what that's all about, give us the setup. >> Yeah, so we started 11:11, really, with a focus on taking the three core pillars of our business, which are cloud, connectivity, and security, bring them together into one platform, allowing a much easier way for our customers and our partners to procure those three solution sets through a single company and really focus on the three main drivers of the business, which, you know, have a litany of other services associated with them under each platform. >> Okay, so Justin, cloud connectivity and security, they all dramatically changed in March of 2020. Everybody had to go to the cloud, had to rethink the network, had to secure remote workers. So what did you see, from a CTO's perspective, what changed and how did 11:11 respond? >> Sure, so early on, when we built our cloud, even back into 2008, we really focused on enterprise grade features, one of which being very flexible in the networking. So we found early on was that we would be able to architect solutions for customers that were dipping their toe in the cloud and set ourselves apart from some of the vendors at the time. So if you fast forward from 2008 until today, we still see that as a main component for IaaS and DRaaS and the ability to start taking into some of the things Brett talked about, where customers may need a point to point circuit to offload data connectivity to us, or develop SD-WAN and multi-cloud solutions to connect to their resources in the cloud. In my opinion, it's just the natural progression of what we set out to do in 2008. And to couple that with the security, if you think about what that opens up from a security landscape, now you have multiple clouds, you have different ingress and egress points, you have different people accessing workloads in each one of these clouds, so the idea or our idea is that we can layer a comprehensive security solution over this new multi-cloud networking world and then provide visibility and manageability to our customer base. >> So what does that mean specifically for your customers? Because, I mean, we saw obviously a rapid move toward end point, cloud security, identity access. You know, people really started rethinking that as opposed to trying to just, you know, build a moat around the castle. >> Right. >> What does that mean for your customer? You take care of all that? You partner with whomever you need to partner in the ecosystem and then you provide the managed service? How does that work? >> Right. It does and that's a great analogy. You know, we have a picture of a hamburger in our office, exploded with all the components and they say, a good security policy has all the pieces and it's really synonymous with what you said. So to answer your question, yes. We have all that baked in the platform. We can offer managed services around it, but we also give the consumer the ability to access that data, whether it's a UI or API. >> So Dante, I know you talked to a lot of customers. All you do is watch the stock market go like this and like that and you say, okay, the pandemic drove all these, but when you talk to CISOs and customers, a lot of things are changing permanently. First of all, they were forced to march to digital when previously, they were like, eh, we'll get there. I mean, a lot of customers were. Let's face it. I mean, some were serious about it, but many weren't. Now, if you're not a digital business, you're out of business. What have you seen when you talk to customers in terms of the permanence of some of these changes? What are they telling you? >> Well, I think, you know, we go through this ourselves, right? The business continues to grow. You've got tons of people that are working remotely and they are going to continue to work remotely, right? As much as we'd like to offer up hybrid workspace and things like that, some folks are like, hey, I've worked it out. I'm working out great from home, right? And also, I think what Justin was saying also is, as we've seen time go on, that operating environment has gotten much more complex. You've got stuff in the data center, stuff in somebody's, you know, endpoint, you've got various different public clouds, different SAS services, right? That's why it's been phenomenal to work with Veeam because we can protect that data regardless of where it exists. But when you start to look at some of the managed security services that we're talking about, we're helping those CSOs, you know, get better visibility, better control, and take proactive action against the infrastructure when we look at threat mitigation and how to actually respond when something does happen, right? And I think that's the key because there's no shortage of great security vendors, right? But how do you tie it all together into a single solution, right, with a vendor that you can actually partner with to help secure the environment while you go focus on the things that are more strategic to the business? >> I was talking to Jim Mercer at Red Hat Summit last week. He's an IDC analyst and we did a survey, I think it was last summer, and we asked customers to your point about, there's no shortage of security tools. How do you want to buy your security? And, you know, do you want, you know, best to breed bespoke tools and you sort of put it together or do you kind of want your platform provider to do it? Now surprisingly, they said platform provider. The problem is, that's aspirational for a lot of platform providers, so they got to look to a managed service provider. So Brett, talk about the Island acquisition, what Green Cloud is, how that all fits together. >> So we acquired Island and Green Cloud last year and the reality is, the people at both of those companies and the technology is what drove us to making those acquisitions. They were the foundational pieces to 11:11. Obviously, the things that Justin has been able to create from an automation and innovation perspective at the company is transforming this business in a litany of different ways, as well. So, those two acquisitions allow us at this point to take a cloud environment on a geographic footprint, not only throughout the US but globally, have a security product that was given to us from the Green Cloud acquisition of Cascade, and add on connectivity to allow us to have all three platforms in one, all three pillars in one. >> So I like 11:11. 11:11 is near and dear to my heart. So where'd the name come from? >> Everybody asked me this question, I think, five times a day. So growing up as a kid, everyone in my family would always say 11:11 make a wish whenever you'd see it on the clock. And during COVID, we were coming up with a new name for the business. My daughter looked at the microwave, said, dad, it's 11:11, make a wish. The reality was though, I had no idea why I'd been doing it for all that time and when you look up kind of the background origination, derivation of the word, it means the time of day when everything's in line and when things are complex, especially with running all the different businesses that we have, aligning them so that they're working together, it seemed like the perfect thing >> So when I had the big corner office at IDC, I had my staff meetings at 11:11. >> Yep. >> Because the universe was aligned and then the other thing was, nobody could forget the time. So they gave me 11 minutes to be there, so they were never late. >> And now you'll see it all the time, even when you don't want to. (chuckles) >> So Justin, we've been talking a lot about ransomware and not just backup, but recovery. My friend, Fred Moore, who, you know, coined the phrase backup is one thing, recovery is everything, and recovery time, network speeds and the like are critical, especially when you're thinking cloud. How are you architecting recovery for your clients? Maybe you could dig into that a little bit. >> Sure. So it's really a multitude of things. You know, you mention ransomware. Seeing the ransomware landscape evolve over time, especially in our business with backup NDR, is very singular, you know, people protecting against host nodes. Now we're seeing ransomware be able to get into an environment, land and expand, actually delete backups, target backup vendors. So the ransomware point, I guess, trying to battle that is a multi-step process, right? You need to think about how data flows into the organization from a security perspective, from a networking perspective, you need to think about how your workloads are protected, and then when you think about backups, I know we're at Veeamon now talking about Veeam, there's a multitude of ways to protect that data, whether it's retention, whether it's immutability, air gapping data. So, while I know we focus a lot sometimes on protecting data, it's really that hamburger analogy where the sum of the parts make up the protection. >> So how do you provide services? I mean, do you say, okay, do you want immutability? There's a line item for that. You want low RPO, fast RTO? How does that all work as a customer? What am I buying from you? Is it just a managed service? We'll take care of everything, platinum, gold, silver, or is it? >> If you don't mind, so I'm glad you asked that question because this is something that's very unique about us. Years ago, his team actually built the IP because we were scaling at such an incredible rate globally through all our joint partners with Veeam that, how do we take all the intelligence that we have and his team and all of our solution architects and scale it? So they actually developed a tool called Catalyst, and it's a pre-sales tool. It's an application. You download it, you install it. It basically takes a snapshot of your environment. You start to manipulate the data. What are you trying to do, Dave? Are you trying to protect that data? Are you backing up to us? Are you trying to replicate it for DR purposes? You know, what are you doing for production, or maybe it's a migration? It analyzes the network. It analyzes all your infrastructure. It helps the SEs know immediately if we're a feasible solution based on what you are trying to do. So, nobody in the space is doing this and that's been a huge key to our growth because the channel community, as well as the customer, they're working with real data. So we can get past all the garbage, you get right to what's important for them for the outcome. >> Yeah, that's huge. Who do you guys sell to? Is it more mid-size businesses that maybe don't have the large teams? Is it larger enterprises who want to compliment to their business? Is it both? >> Well, I would say with the two acquisitions that we made to go to market sales strategies and the clientele were very different, when you look at Green Cloud, they're selling predominantly wholesale through MSPs and those MSPs are mostly selling to SMBs, right? So we covered that SMB market for the most part through our acquisition of Green Cloud. Island, on the other hand, was more focused on selling direct, inbound, through VARs through the channel, mid-enterprise, big enterprise. So really, those two acquisitions outside of the IP that we got from the systems, we have every single go to market sales strategy and we're aligned from SMB all the way up to the Fortune 500. >> I heard a stat a couple months ago that less than 50% of enterprises have a SAQ. That blew me away. And, you know, even small businesses need one. They may not be able to afford, but there's certainly a medium size or a larger business should have some kind of SAQ. Does that stat jive with what you're seeing in the marketplace? >> A hundred percent. >> If that's true, the need for a managed service like this, it's going to explode. It is exploding, I mean. >> Yeah, I mean, a hundred percent, right? There is zero unemployment in the cyberspace, right? Just North America alone, there's about a million or so folks in that space and right now you've got about 600,000 open recs just in North America, right? So earlier, we talked about no shortage of tools, right? But the shortage of headcount is a significant challenge, big time, right? Most importantly, the people that you do have on staff, they've got alert fatigue from the tools that they do have. That's why you're seeing this massive surgence in the managed security services provider. >> Lack of talent is number one challenge for CISOs. That's what they'll tell you and there's no end in sight to that. And it's, you know, another tool and it's amazing 'cause you see security companies popping up all the time. I mean, billion dollar valuations, I mean, Lacework did a billion dollar raise. And so, there's no shortage of funding. Now, maybe that'll change, you know, with the market but I wanted to turn our attention to the keynotes this morning. You guys got some serious love up on stage. There was a demo. It was a pretty cool demo, fast recovery, very tight RPO, as I recall. It was, I think, four minutes of, of data loss? Is that right? Is that the right stat? I was happy it wasn't zero data loss 'cause there's really, you know, no such thing, but so you got to feel good about that. Tell us about how that all came about, your relationship with Veeam. Who wants to take it? >> Sure, I can take a stab at it. So two of the things that I'm most excited about, at least with this Veeamon, is our team was able to work with Veeam on that demo, and what that demo was showing was some CDP based features for cloud providers. So we're really happy to see that and the reason why we're happy to see that is that with the Veeam platform, it's now given the customers the ability to do things like snapshot replication, CDP replication, on-prem backup, cloud backup, immutability air gap, the list goes on and on. And in our opinion, having a singular software vendor that can provide all that, you know, with a cloud provider on-prem or not is really like, the icing on the cake. So for us, it's very exciting to see that, and then also coupled with a lot of the innovation that's Veeam's doing in the SAS space, right? So again, having that umbrella product that can cover all those use cases. >> I'll tell you, that was a very cool demo. If you can get a YouTube of that demo, I'll make sure we put it in the show notes of this video or maybe pop it into one of the blogs that we write about it. So, how do you guys feel? I mean, this is a new chapter for you. Very cool, with a couple of acquisitions that are now the main spring of your strategy, so the first Veeamon in a couple years. So what's the vibe been like for you? What's the nighttime activity, the customer interaction? I know you guys are running a lot of the backend demos, so you're everywhere. What's the vibe like at Veeamon and how does it feel to be back? >> I'll give that one to Dante as far as the vibes, so far. >> Yeah, yeah, you got a lot of experience. >> Yeah, let me loose on this one, Dave. I'm like, so excited about this, right? It's been far too long to get face to face again and Veeam always does it right. And I think that for years, we've been back ending like, all the hands on lab infrastructure here, but forget about that. I think the part that's really exciting is getting face to face with such a great team, right? We have phenomenal architects that we work with at Veeam day in and day out. They put up with us, pushing them, pushing them, pushing them and together, we've been able to create a lot of magic together, right? But I think you can't replace the human interaction that we've all been starving for, for the last two years. But the vibe's always fantastic at Veeam. If you're going to be around tonight, I'll be looking forward to enjoying some of that Veeam love with you at the after party. >> Yeah, well, famous after parties. We'll see if that culture continues. I have a feeling it will. Brett, where do you want to take 11:11? New phase in all of your careers. You got a great crew out here, it looks like. I love that you're all out and, make some noise here, people. Let's hear it! (audience cheering) You see, this is the biggest audience we've had all week. Where do you want to take 11:11? >> I think, you know, if you look at what we've done so far in the short six months since the acquisitions of Green Cloud and Island, obviously the integration is a key piece. We're going to be laser focused on growing organically across those three pillars. We've got to put more capital and resources into the incredible IP, like I said earlier, that Justin and his team have created on those front ends, the user experience. But, you know, we made two large acquisitions, obviously M and A is a key piece for us. We're going to be diligent and we're probably going to be very aggressive on that front as well, to be able to grow this business into the global leader of cloud connectivity and security. And I think we've really hit a void in the industry that's been looking for this for a very long time and we want to be the first ones to be able to collaborate and combine those three into one. >> When the cloud started to hit the steep part of the S-curve, kind of early part of last decade, people thought, oh wow, these managed service providers are toast. The exact opposite happened. It created such a tailwind and need for consistent services and integration and managed services. We've seen it all across the stacks. So guys, wish you best of luck. Congratulations on the acquisitions, >> Thank you. >> And hope to have you back soon. >> Absolutely, thanks for having us. >> All right, keep it right there everybody. Dave Vellante for theCube's coverage of Veeamon 2022. We'll be right back after this short break. (pleasant music)

>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Despite a mixed bag of earnings reports from tech companies, negative GDP growth this past quarter, and rising inflation, the cloud continues its relentless expandtion on the IT landscape. AWS, Microsoft, and Alphabet of all reported earnings, and when you include Alibaba Cloud in the mix, the Big 4 hyperscalers are on track to generate 167 billion in revenue this year based on our projections. But as we said many times on theCUBE, the definition of cloud is expanding and hybrid environments are becoming the norm at major organizations. We're seeing the largest enterprise tech companies focus on solving for hybrid, and every public cloud company now has a strategy to bring their environments closer to where customers workloads live, at data centers, and at the edge. Hello, and welcome to this week's Wikibon CUBE Insights powered by ETR. In this Breaking Analysis will update you on our latest cloud projections and outlook. We'll share some fresh ETR data and commentary on what's happening in the hybrid zone of cloud. Let's start with the market data for the Big 4 hyperscalers. In this chart, we share our Big 4 cloud share for IaaS and PaaS for 2020, 2021, and the first quarter of 2022, and our estimate for 2022 full year and growth. Remember, only AWS and Alibaba report relatively clean IaaS and PaaS figures, whereas Microsoft and Google, they bundled their cloud infrastructure in with their SaaS numbers. We both firms, however, they do give guidance and we use survey data and other tidbits to create an apples to apples comparison, and that's what we show here. For the quarter, the Big 4 approach to 37 billion in revenue as a group. Azure's growth rate is reported by Microsoft but the absolute revenue is not. Azure growth accelerated sequentially by 49% to just over 13 billion in the quarter by our estimates while AWS's growth moderated, sequentially, but revenue still hit 18.4 billion. Azure, by our estimates, now is more than 2/3 the size of AWS's cloud business. Google and Alibaba are fighting for the bronze medal, but well behind the two leaders. Microsoft's Azure acceleration is quite remarkable for such a large revenue base, but it's not unprecedented as we've seen this pattern before with AWS. Nonetheless, the fact that Azure is growing at the same rate as GCP is quite impressive. Now, a couple of other tidbits of information. Amazon, its stock is getting hammered today because of inflation and slowing growth rates at the top line. But AWS continues to beat Wall Street's expectations. A look at Amazon's operating income this quarter tells the story. Amazon overall had operating income of -3.66 billion and AWS's operating income with 6.5 billion. AWS's operating margin grew sequentially from nearly 30% last quarter to 35.3%. That's an astoundingly profitable figure. This is comparable to insanely profitable companies like Oracle and Microsoft. These are software companies with software marginal economics. Is that level of sustainable? Probably not for AWS, but it's eye opening, nonetheless. ETR survey data shows why these companies are doing so well with customers. This chart shows the net score granularity for the Big 4 cloud players. Net score, remember, measures spending momentum by asking customers, are you adopting new? That's the lime green. Increasing spend by 6% or more, that's the forest green. Flats spend is the gray. Spending dropping by 6% or worse is the light pink. And the red is decommissioning the platform. Subtract the reds from the greens and you get a net score which is shown on the right. Anything, by the way, over 40% we consider highly elevated. Now some key points here. Microsoft includes its entire business in this chart, we are including, ETR is including Microsoft's entire business, not just its cloud. Its Azure-only net score is 67%, higher than even AWS's, and that's huge. Google Cloud, on the other hand, while still elevated is well behind the two leaders. Alibaba's data sample in the ETR survey is small and China has had its foot on the neck of Big Tech for a while so we can't read too much into a net score of 26. But notice the replacements in red across the boards single digits for all and low single digits for the two giants, 1% for Amazon and Azure. Very impressive. Now the other really telling reality check is CapEx spending on cloud. CapEx spend tends to be a pretty good indicator of scale. And Charles Fitzgerald who runs the Platformonomics blog spends a fair amount of his time on this topic and we borrowed this chart from a recent post he did, and then we put in some estimates of our own. It shows CapEx spend over time for five cloud companies, the Big 3 US firms that we just talked about, plus IBM and Oracle. And it's always astounding to me to go back to the pre-cloud era and look at IBM. They were in a great position prior to 2006 to really dominate this notion of as a service and the transition to what is now known as cloud. But they really couldn't get their head out of professional services and their outsourcing business. There was some conflicts there as well. And so, you know, IBM you see is that dark blue or black line and spent significantly more than the others way back when, not anymore. Charles is kind of a snark. He loves to make fun of our super cloud concept even though I'm confident it's evolving and is real. But his point above in this chart is right on, the Big 3 US players spend far more on CapEx than IBM and Oracle. He states that Oracle's uptick in CapEx spend puts them past IBM, but the two of them are battling to distance themselves and differentiate from the X-axis. Funny guy, Charles. In its recent earnings report, Amazon stated that around 40% of its CapEx goes to infrastructure and most of that goes to AWS. It expects CapEx to grow this year and around 50% will go toward infrastructure. So we've superimposed our rough estimate of where AWS lands when you subtract out all of Amazon's warehouses for retail. And once again, Microsoft is notable because unlike Amazon, it doesn't have a zillion warehouses to ship products to consumers. And while Google spending is massive, it's mostly on servers to power its ad network. But there's no question that GCP can leverage that infrastructure and the tech behind it, and it does. And by the way, so can everyone else, by the way, leverage all this CapEx spend. We're going to come back to that and talk about super cloud in a moment. Okay, let's close by looking at the ever-expanding cloud landscape. This chart shows a two-dimensional view of the ETR data for cloud computing. On the vertical-axis is net score or spending momentum, and in the horizontal-axis is pervasiveness in the data set. It's like market share within the survey, if you will. The chart insert shows the data for how the dots are plotted on each axis. The red dotted line at 40%, remember, indicates a highly elevated position with net score and significant spending momentum. And the green arrows show the movement for some companies relative to three months ago. Okay, so Microsoft and AWS, they're kind of circled way up in the right-hand corner, very impressive. Just to reduce the clutter, we're not showing AWS Lambda here and some other highly elevated services which would push up, ticked up AWS's net score but it's still really, really good. As is azure, they're both moving solidly to the right relative to last quarters survey. So gaining presence in the data set and presumably in the market as well. Google is, as we've said, well behind and has much work to do. It was announced this past week that the head of sales at Google Cloud, Rob Enslin, is leaving to join UiPath, so some interesting news there. We've highlighted the hybrid zone. Now to the theme of this Breaking Analysis, the ever-expanding cloud, AWS announced that it's completed the launch of 16 local zones in the US and there are 32 more coming across 26 countries. Local zones basically bring cloud infrastructure to regions where there's a lot of IT that isn't going to move. And for proximity and latency reasons, they have to move closer, move the cloud closer, the cloud operating model if you will, closer to the customers. And there's that CapEx build out showing its head again. Now the reason this hybrid zone becomes interesting is you're seeing the large enterprise players finally go after the hybrid cloud in Earnest. It's almost like the AWS outposts announcement in 2018 was a wake up call to infrastructure players like Dell, HPE, and IBM. It took a while, but Oracle is kind of skipping to its own tune, but they're in that hybrid zone as well. IBM had a really good quarter and the Red Hat acquisition seems to be working to support its hybrid cloud strategy. Now VMware several years ago clean up its fuzzy cloud strategy and partnered up with AWS and everyone else. And you see VMware Cloud on AWS doing well as is VMware Cloud, its on-prem offering. Even though it's somewhat lower on the X-axis, based on that green arrow was showing relative to last quarter. It's moving to the right with a greater presence in the data set so that we see that as a positive sign. Now, Dell and HP are interesting. Both companies are going hard after as a service with APEX and GreenLake, respectively. HPE, based on the survey data from ETR, seems to have a lead in spending momentum while Dell has a larger presence in the market, naturally, as a much bigger company. HPE is climbing up on the X-axis, as is Dell, although, not as quickly. And the point we come back to often is the definition of cloud is in the eye of the customer. AWS can say, "No, no that's not cloud." And the on-prem crowd can say, "Ooh, we have cloud too." It really doesn't matter. What matters is what the customer thinks and which platforms they choose to invest. And I'll close by circling back to the idea of super cloud. You are seeing it evolve and you're going to hear more and more about it. Yeah, maybe not the term, many don't like it. We're going to continue to use it as a metaphor for a layer that leverages the CapEx build, the gift that the hyperscalers are providing the industry. This is a real opportunity for the likes of Dell, HPE, IBM, Cisco, and dozens of other companies providing compute and storage infrastructure, networking, security, database, and other parts of the stack. By hiding the underlying complexity of the cloud, dealing with all the API and primitive muck, creating singular experience across on-prem, across clouds, and out to the edge is a definite need from customers. This is a new battle that's shaping up and it's going to be expensive to build and it require an ecosystem cooperating across this API economy, as some like to call it. It's going to have to do that to make it a reality. Now there's a definite, as I say, customer need for this common experience, and in our view, we're seeing it manifest in pockets today and in strategies and in R&D projects, both within startups and established players. Okay, that's it for today. Thanks to Stephanie Chan who helps research Breaking Analysis topics. Alex Myerson is on production and he also manages the Breaking Analysis podcast. Kristen and Martin and Cheryl Knight get the word out on social. Thanks to all, including Rob Hof, our editor in chief at SiliconANGLE. Remember these episodes are all available as podcast wherever you listen. All you got to do is search Breaking Analysis podcast. Check out ETR website at etr.ai. We publish a full report every week on wikibon.com and siliconangle.com. You can email me directly at david.vellante@siliconangle.com, or DM me @dvellante or comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights powered by ETR. Have a great week, stay safe, be well and we'll see you next time. (upbeat music)