>> Narrator: From theCUBE's studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Hello everyone, this is Dave Vellante. Welcome to this CUBE conversation. We got a really cool company that we're going to introduce you to, and Anthony Brooks Williams is here. He's the CEO of that company, HVR. Anthony, good to see you. Thanks for coming on. >> Hey Dave, good to see you again, appreciate it. >> Yeah cheers, so tell us a little bit about HVR. Give us the background of the company, we'll get into a little bit of the history. >> Yeah sure, so at HVR we are changing the way companies routes and access their data. And as we know, data really is the lifeblood of organizations today, and if that stops moving, or stop circulating, well, there's a problem. And people want to make decisions on the freshest data. And so what we do is we move critical business data around these organizations, the most predominant place today is to the cloud, into platforms such as Snowflake, where we've seen massive traction. >> Yeah boy, have we ever. I mean, of course, last week, we saw the Snowflake IPO. The industry is abuzz with that, but so tell us a little bit more about the history of the company. What's the background of you guys? Where did you all come from? >> Sure, the company originated out of the Netherlands, at Amsterdam, founded in 2012, helping solve the issue that customer's was having moving data efficiently at scale across all across a wide area network. And obviously, the cloud is one of those endpoint. And therefore a company, such as the Dutch Postal Service personnel, where today we now move the data to Azure and AWS. But it was really around how you can efficiently move data at scale across these networks. And I have a bit of a background in this, dating back from early 2000s, when I founded a company that did auditing recovery, or SQL Server databases. And we did that through reading the logs. And so then sold that company to Golden Gate, and had that sort of foundation there, in those early days. So, I mean again, Azure haven't been moving data efficiently as we can across these organizations with it, with the key aim of allowing customers to make decisions on the freshest data. Which today's really, table stakes. >> Yeah, so, okay, so we should think about you, as I want to invoke Einstein here, move as much data as you need to, but no more, right? 'Cause it's hard to move data. So your high speeds kind of data mover, efficiency at scale. Is that how we should think about you? >> Absolutely, I mean, at our core, we are CDC trades that capture moving incremental workloads of data, moving the updates across the network, you mean, combined with the distributed architecture that's highly flexible and extensible. And these days, just that one point, customers want to make decisions on us as much as they can get. We have companies that we're doing this for, a large apparel company that's taking some of their not only their core sales data, but some of that IoT data that they get, and sort of blending that together. And given the ability to have a full view of the organization, so they can make better decisions. So it's moving as much data as they can, but also, you need to do that in a very efficient way. >> Yeah, I mean, you mentioned Snowflake, so what I'd like to do is take my old data warehouse, and whatever, let it do what it does, reporting and compliance, stuff like that, but then bring as much data as I need into my Snowflake, or whatever modern cloud database I'm using, and then apply whatever machine intelligence, and really analyze it. So really that is kind of the problem that you're solving, is getting all that data to a place where it actually can be acted on, and turned into insights, is that right? >> Absolutely, I mean, part of what we need to do is there's a whole story around multi-cloud, and that's obviously where Snowflake fit in as well. But from our point of views of supporting over 30 different platforms. I mean data is generated, data is created in a number of different source systems. And so our ability to support each of those in this very efficient way, using these techniques such as CDCs, is going to capture the data at source, and then weaving it together into some consolidated platform where they can do the type of analysis they need to do on that. And obviously, the cloud is the predominant target system of choice with something like a Snowflake there in either these clouds. I mean, we support a number of different technologies in there. But yeah, it's about getting all that data together so they can make decisions on all areas of the business. So I'd love to get into the secret sauce a little bit. I mean we've heard luminaries like Andy Jassie stand up at last year at Reinvent, he talked about Nitro, and the big pipes, and how hard it is to move data at scale. So what's the secret sauce that you guys have that allow you to be so effective at this? >> Absolutely, I mean, it starts with  how you going to acquire data? And you want to do that in the least obtrusive way to the database. So we'll actually go in, and we read the transaction logs of each of these databases. They all generate logs. And we go read the logs systems, all these different source systems, and then put it through our webs and secret sauce, and how we how we move the data, and how we compress that data as well. So, I mean, if you want to move data across a wide area network, I mean, the technique that a few companies use, such as ourselves, is change data capture. And you're moving incremental updates, incremental workloads, the change data across a network. But then combine that with the ability that we have around some of the compression techniques that we use, and, and then just into very distributed architecture, that was one of the things that made me join HVR after my previous experiences, and seeing that how that really fits in today's world of real time and cloud. I mean, those are table stakes things. >> Okay, so it's that change data capture? >> Yeah. >> Now, of course, you've got to initially seed the target. And so you do that, if I understand you use data reduction techniques, so that you're minimizing the amount of data. And then what? Do you use asynchronous methodologies, dial it down, dial it up, off hours, how does that work? >> Absolutely, exactly what you've said they mean. So we're going to we're, initially, there's an initial association, or an initial concept, where you take a copy of all of that data that sits in that source system, and replicating that over to the target system, you turn on that CDC mechanism, which is then weaving that change data. At the same time, you're compressing it, you're encrypting it, you're making sure it's highly secure, and loading that in the most efficient way into their target systems. And so we either do a lot of that, or we also work with, if there's a ETL vendor involved, that's doing some level of transformations, and they take over the transformation capabilities, or loading. We obviously do a fair amount of that ourselves as well. But it depends on what is the architecture that's in there for the customer as well. The key thing is that what we also have is, we have this compare and repair ability that's built into the product. So we will move data across, and we make sure that data that gets moved from A to B is absolutely accurate. I mean people want to know that their data can move faster, they want it to be efficient, but they also want it to be secure. They want to know that they have a peace of mind to make decisions on accurate data. And that's some stuff that we have built into the products as well, supported across all the different platforms as well. So something else that just sets us apart in that as well. >> So I want to understand the business case, if you will. I mean, is it as simple as, "Hey, we can move way more data faster. "We can do it at a lower cost." What's the business case for you guys, and the business impact? >> Absolutely, so I mean, the key thing is the business case is moving that data as efficiently as we can across this, so they can make these decisions. So our biggest online retailer in the US uses us, on the biggest busiest system. They have some standard vendors in there, but they use us, because of the scalability that we can achieve there, of making decisions on their financial data, and all the transactions that happen between the main E-commerce site, and all the third party vendors. That's us moving that data across there as efficiently as they can. And first we look at it as pretty much it's subscription based, and it's all connection based type pricing as well. >> Okay, I want to ask you about pricing. >> Yeah. >> Pricing transparency is a big topic in the industry today, but how do you how do you price? Let's start there. >> Yeah, we charge a simple per connection price. So what are the number of source systems, a connection is a source system or a target system. And we try to very simply, we try and keep it as simple as possible, and charge them on the connections. So they will buy a packet of five connections, they have source systems, two target systems. And it's pretty much as simple as that. >> You mentioned security before. So you're encrypting the data. So your data in motion's encrypted. What else do we need to know about security? >> Yeah, you mean, that we have this concept and how we handle, and we have this wallet concept, and how we integrate with the standard security systems that those customers have already, in the in this architecture. So it's something that we're constantly doing. I mean, there's there's a data encryption at rest. And initially, the whole aim is to make sure that the customer feels safe, that the data that is moving is highly secure. >> Let's talk a little bit about cloud, and maybe the architecture. Are you running in the cloud, are you running on prem, both, across clouds. How does that work? >> Yeah, all of the above. So I mean, what we see today is majority of the data is still generated on prem. And then the majority of the talks we see are in the cloud, and this is not a one time thing, this is continuous. I mean, they've moved their analytical workload into the cloud. You mean they have these large events a few times a year, and they want the ability to scale up and scale down. So we typically see you mean, right now, you need analytics, data warehouses, that type of workload is sitting in the cloud, because of the elasticity, and the scalability, and the reasons the cloud was brought on. So absolutely, we can support the cloud to cloud, we can support on prem to cloud, I think you mean, a lot of companies adopting this hybrid strategy that we've seen certainly for the foreseeable next five years. But yeah, absolutely. The source of target systems considered on prem or in the cloud. >> And where's the point of control? Is it wherever I want it to be? >> Absolutely. >> Is it in one of the clouds on prem? >> Yeah absolutely, you can put that point of control where you want it to be. We have a concept of agents, these agents search on the source and target systems. And then we have the, it's at the edge of your brain, the hub that is controlling what is happening. This data movement that can be sitting with a source system, separately, or on target system. So it's highly extensible and flexible architecture there as well. >> So if something goes wrong, it's the HVR brain that helps me recover, right? And make sure that I don't have all kinds of data corruption. Maybe you could explain that a little bit, what happens when something goes wrong? >> Yeah absolutely, I mean, we have things that are built into the product that help us highlight what has gone wrong, and how we can correct those. And then there's alerts that get sent back to us to the to the end customer. And there's been a whole bunch of training, and stuff that's taken place for then what actions they can take, but there's a lot of it is controlled through HVR core system that handles that. So we are working next step. So as we move as a service into more of an autonomous data integration model ourselves, whichever, a bunch of exciting things coming up, that just takes that off to the next levels. >> Right, well Golden Gate Heritage just sold that to Oracle, they're pretty hardcore about things like recovery. Anthony, how do you think about the market? The total available market? Can you take us through your opportunity broadly? >> Yeah absolutely, you mean, there's the core opportunity in the space that we play, as where customers want to move data, they don't want to do data integration, they want to move data from A to B. There's those that are then branching out more to moving a lot of their business workloads to the cloud on a continuous basis. And then where we're seeing a lot of traction around this particular data that resides in these critical business systems such as SAP, that is something you're asking earlier about, what are some core things on our product. We have the ability to unpack, to unlock that data that sits in some of these SAP environments. So we can go, and then decode this data that sits between these cluster pool tables, combine that with our CDC techniques, and move their data across a network. And so particularly, sort of bringing it back a little bit, what we're seeing today, people are adopting the cloud, the massive adoption of Snowflake. I mean, as we see their growth, a lot of that is driven through consumption, why? It's these big, large enterprises that are now ready to consume more. We've seen that tail wind from our perspective, as well as taking these workloads such as SAP, and moving that into something like these cloud platforms, such as a Snowflake. And so that's where we see the immediate opportunity for us. And then and then branching out from there further, but I mean, that is the core immediate area of focus right now. >> Okay, so we've talked about Snowflake a couple of times, and other platforms, they're not the only one, but they're the hot one right now. When you think about what organizations are doing, they're trying to really streamline their data pipeline to get to turn raw data into insights. So you're seeing that emerging organizations, that data pipeline, we've been talking about it for quite some time. I mean, Snowflake, obviously, is one piece of that. Where's your value in that pipeline? Is it all about getting the data into that stream? >> Yeah, you just mentioned something there that we have an issue internally that's called raw data to ready data. And that's about capturing this data, moving that across. And that's where we building value on that data as well, particularly around some of our SAP type initiatives, and solutions related to that, that we're bringing out as well. So one it's absolutely going in acquiring that data. It's then moving it as efficiently as we can at scale, which a lot of people talk about, we truly operate at scale, the biggest companies in the world use us to do that, across there and giving them that ability to make decisions on the freshest data. Therein lies the value of them being able to make decisions on data that is a few seconds, few minutes old, versus some other technology they may be using that takes hours days. You mean that is it, keeping large companies that we work with today. I mean keeping toner paper on shelves, I mean one thing that happened after COVID. I mean one of our big customers was making them out their former process, and making the shelves are full. Another healthcare provider being able to do analysis on what was happening on supplies from the hospital, and the other providers during this COVID crisis. So that's where it's a lot of that value, helping them reinvent their businesses, drive down that digital transformation strategy, is the key areas there. No data, they can't make those type of decisions. >> Yeah, so I mean, your vision really, I mean, you're betting on data. I always say don't bet against the data. But really, that's kind of the premise here. Is the data is going to continue to grow. And data, I often say data is plentiful insights aren't. And we use the Broma you said before. So really, maybe, good to summarize the vision for us, where you want to take this thing? Yeah, absolutely so we're going to continue building on what we have, making it easier to use. Certainly, as we move, as more customers move into the cloud. And then from there, I mean, we have some strategic initiatives of looking at some acquisitions as well, just to build on around offering, and some of the other core areas. But ultimately, it's getting closer to the business user. In today's world, there is many IT tech-savvy people sitting in the business side of organization, as they are in IT, if not more. And so as we go down that flow with our product, it's getting closer to those end users, because they're at the forefront of wanting this data. As we said that the data is the lifeblood of an organization. And so given an ability to drive the actual power that they need to run the data, is a core part of that vision. So we have some some strategic initiatives around some acquisitions, as well, but also continue to build on the product. I mean, there's, as I say, I mean sources and targets come and go, there's new ones that are created each week, and new adoptions, and so we've got to support those. That's our table stakes, and then continue to make it easier to use, scale even quicker, more autonomous, those type of things. >> And you're working with a lot of big companies, the company's well funded if Crunchbase is up to date, over $50 million in funding. Give us up right there. >> Yeah absolutely, I mean a company is well funded, we're on a good footing. Obviously, it's a very hot space to be in. With COVID this year, like everybody, we sat down and looked in sort of everyone said, "Okay well, let's have a look how "this whole thing's going to shake out, "and get good plan A, B and C in action." And we've sort of ended up with Plan A plus, we've done an annual budget for the year. We had our best quarter ever, and Q2, 193% year over year growth. And it's just, the momentum is just there, I think at large. I mean obviously, it sounds cliche, a lot of people say it around digital transformation and COVID. Absolutely, we've been building this engine for a few years now. And it's really clicked into gear. And I think projects due to COVID and things that would have taken nine, 12 months to happen, they're sort of taking a month or two now. It's been getting driven down from the top. So all of that's come together for us very fortunately, the timing has been ideal. And then tie in something like a Snowflake traction, as you said, we support many other platforms. But all of that together, it just set up really nicely for us, fortunately. >> That's amazing, I mean, with all the turmoil that's going on in the world right now. And all the pain in many businesses. I tell you, I interview people all day every day, and the technology business is really humming. So that's awesome to hear that you guys. I mean, especially if you're in the right place, and data is the place to be. Anthony, thanks so much for coming on theCUBE and summarizing your thoughts, and give us the update on HVR, really interesting. >> Absolutely, I appreciate the time and opportunity. >> Alright, and thank you for watching everybody. This is Dave Vellante for theCUBE, and we'll see you next time. (upbeat music)

la from Las Vegas it's the cube covering AWS reinvent 2019 brought to you by Amazon Web Services and Vinum care along with its ecosystem partners hello everyone welcome to the cube we're here live in Las Vegas for AWS reinvent 2019 I'm John Farrar your host is silicon Angles flagship the cube we're extract a signal noise leader in event coverage with day Volante my co-host and justin warren tech analysts Forbes contributor guru of cube host guys keynote for J&E jassie first of all I don't know how he does it he's just like continues hissing Marc loved the live music in there but a slew of announcements this is a reinvention of AWS you can tell that they're just essentially trying to go the next level on what the cloud means how they're gonna bring it to customers and you know they've been criticized for you know kind of nut I won't say falling behind I could say Microsoft's been probably praised more for catching up and it's been a lot of discussion around that the loss of the Jedi contract variety of enterprise wins Microsoft has the field Salesforce Google's just kind of retooling but Amazon clearly the leader with a little pressure for the first time in the rearview mirror they've got someone on their on their tail win and Microsoft's far back but this isn't a statement from from chassis and Amazon of okay you want to see the Jets we're gonna we're gonna turn on the Jets and blow pass everybody Jesse gets cocky self Justin what do you think yeah so a lot of signaling to enterprise that it's safe to come here it's this is where you can have everything that you need to get everything that you need done you can get all of it in one place so there there is a real signal there to say Enterprise if you want to do cloud there's only one place to do cloud enterprise customers they tried out some big names Goldman Sachs not a small enterprise they had all the classic born in the cloud but you know we put out this concept on I'm on our Silicon angle post called reborn in the cloud almost born-again enterprise you start to see the telegraphing of what their core message is which is transform just don't kick the tires and fall into the Microsoft trap go with em is on and transform your business model transform your miss not just run IT a better way than before well yeah I mean I'm impressed they got two CEOs the CEO of Goldman Sachs David Solomon the CEO of Cerner coming to the show it's kind of rare that the CEO of your customer comes to the show I guess the second thing I'd say is you know Amazon is not a rinse and repeat company at these shows although they are when it comes to shock and awe so they ticked the Box on shock and awe but you're right John they're talking a lot about transformation I sort of think of it as disruption here's what I would say to that Amazon has a dual disruption agenda one is its disrupting the horizontal technology stack and 2 its disrupting industries it wants to be the platform of which startups in particular but also incumbents can disrupt industries and it's in their DNA because it's in Amazon's DNA and I think it's the last thing I'll say as Amazon is the reach a Amazon retailers the you can buy anything here store and now to your point Justin Amazon Web Services is you can get AWS anywhere at the edge and a little mini data centers that they're built on outpost and of course in the cloud all right I want to get you guys reactions a couple things I saw and I want to just analyze the keynote one as we saw Jesse come out with the transformation message that's really more of their posture to the market you should be transforming we're gonna take Amazon as a center of gravity and push it out to the edge without post so kind of a customer company posture there on the industry then you had the announcements and I thought that the sage maker studio was pretty robust a lot of data and announcements so you had the transformation message a lot of core data and then they kind of said hey we're open we got open source databases we got kubernetes and multiple flavors a couple steers from the Twitter crowd on that one and then finally outpost with the edge where they're essentially you know four years ago Dave they said no more data centers in ten years now they're saying we're gonna push Amazon to the your datacenter so you know a posture for the company a lot of data centric data ops almost program and build I'm also DevOps feel to it what's your reaction to that I think the most interesting part for me was the change there was a bit of a shift there I think he made the statement of rather than bringing the data to the computer we want to bring the compute to the data and I think that's that's acknowledging reality that data has gravity and it's very difficult for enterprises particularly if you've already invested a lot in building a data Lake so being able to just pick that up and then move it to any cloud nothing let alone AWS just moving that around is is a big effort so if you're going to transform your business you have to kind of rethink completely how you address some of these issues and one of that would be well what if rather than let's just pick everything up and move it to cloud what if we could actually do something a little bit better than that and we can pick and choose what we want to suit our particular solution and your point Dave I think that's where Amazon strength comes from is it they are the everything store so you can buy whatever you want be at this tiny little piece that only five companies need or the same thing that everyone else on the planet needs you can come and buy everything from us and that's what I think they're trying to signal to an organization that says look if you want to transform and you're concerned that it'll be difficult to do we've got you we've got something here that will suit your needs and we will be able to work with you to transform your business and we're seeing you know Amazon years ago we wouldn't talk about hybrid and now they're going really all-in on hybrid and it's not outpost is no longer just this thing they're doing with VMware it's now a fundamental piece of their infrastructure for the edge and I think the key point there is the the edge is going to be one with developers and Amazon is essentially bringing its development platform to the edge without posts as the the underpinning and I like the strategy much much better than I like what I'm seeing from some of the guys like HP and Dell which is they're throwing boxes you know over the fence with really without a strong developer angle your thoughts I mean my my big takeaway was I think this is key knows about a next-generation shift on the business model but that's the transformation he didn't come out and say it I said it in my post but I truly believe if you're not born in the cloud or reborn in the cloud you'll probably be out of business and as a startup were to ask them of the VCS this question how do you go after and target some of those people who aren't gonna be reborn in the cloud to have the scale advantage but the data announcements was really the big story here because we look at DevOps infrastructure as code programming infrastructure we've seen that that that's of now an established practice now you start to see this new concept around data ops some people call it AI ops whatever but Dana now the new programmability it's almost a devops culture - data and I think what got my attention the most was the IDE for stage maker which kind of brings in this cool feature of what everyone was which is I want machine learning but I can't hire anybody and I got to make I got a democratized machine learning I got to make application developers get value out of the data because the apps need to tap the data it's got to be addressable so I think this is a stake in the ground for the next five to ten years of a massive shift from increasing the DevOps mission to add a layer making that manageable multiple databases he's totally right on that it's not one database if you want time series for real-time graph for you know network constructs it's pick your database you know that shouldn't be it inhibitor at all I think the data story is real that's the top story in my mind the data future what that's going to enable and then the outpost is just a continuation of Amazon realizing that the center of the cloud is not the end game it's just the center of gravity and I think you gonna start to see edge become really huge I mean I count ten into ten purpose-built databases now and jesse was unequivocal he said you gotta have the right database tool for the right job you're seeing the same thing with their machine learning and AI tools it's been shocking dozens and dozens of services each with their own sort of unique primitives that give you that flexibility and so where you can disagree with the philosophy but their philosophy is very clear we're gonna go very granular and push a lot of stuff out there I think there's two bits at play there that I can see you know I think you're right on the data thing and something that people don't quite realize is that modern data analysis is programming like it's code your data scientists know how to code so there was a lot of talk there about notebooks going in there like they love their notebooks they love using different frameworks to solve different problems and they need to be able to use for this one I need tens of flow for another one I might need MX net yeah so if you couple that that idea that we need to it's all about the data and you couple that with developers and AWS knows developers really really well so you've got modern enterprises lot wanting to do more with the data that they have the age or business problem of I've got all this information I need to process I need to do be out bi I need to do data analysis and you couple that with the Pala that iws has with developers I think it's a pretty strong story then you know in my interview with Jesse I asked him the question and I stole the line from Steve Moe Mulaney from aviatrix you take the tea out of cloud native it's cloud naive and I think what I've been seeing is a lot of customers have been naive about what cloud is and it's actually been buying IT and so they really don't are not sensitive to the capabilities message so I asked Jeff see I'm like you got these capabilities that's cool if you want to go to the store and buy everything or look at everything and buy what you want and construct and transform check no problem I buy that however some customers just want a package solution and Amazon has not always been great on having something packaged for customers so he kind of addressed that and this might be an Achilles heel for Amazon as Microsoft has such entrenched sales sales presence that they might be pushing a solution that frankly customers might not care about capabilities we did see one bit where there was a little bit of a nudge towards is fees and and systems integrators and I think that that really for me is there needs to be a lot more work done by Amazon there because that's what Enterprise me enterprise is used to dealing with systems integrators that will help them to use the raw materials that ados provides to solve that promote you said there are two segments of developers and customers one that wants all the low level building blocks and others want simpler faster results with abstractions aka packaging so they're going down the road but again they're not shy don't like hey we're just going to continue to build we're not going to try to move off our trajectory they're gonna stay with adding more power and frankly some digs at snowflake I fought with red shift and I thought the dig to the kubernetes community with we code our own stuff wink wink we don't have to slow down was a nice jab at the CN CF I thought because he's saying hey you know what we're not in committees deciding features which is the customers and implementing them so a kind of a jab well sure that's gonna rapid a I would say the snowflake is sort of a copycat separating compute from stores that's what snowflakes has been doing forever but he did take direct jabs at IBM Oracle and obviously Microsoft with with Windows so I like to see that you know usually Jessie doesn't do that it's good take the gloves so much so many announcements out there you got to go to silk and angled comm will have all the stories but one of the top stories coming into the reinvent that we didn't hear anything about but if you squint through and connect the dots on Jessie's keynote it is pretty evident what the strategy is and that's multi-cloud so I'll see multi-cloud is a word that Amazon is not using at all onstage as you can tell they don't really they're in well they're one cloud they don't really care about the other clouds but their customers do so guys multi cloud is a legit conversation how they get multi cloud is debatable acquisition sprawl by the end of the day multiple clouds is reality I think Jessie was kind of predicting and laying down some early narratives around the multi cloud story by saying hey we have more capabilities we're faster we're doing more stuff so I think he's trying to cede the base on the concept of hey if you want to go look at other clouds try to go apples to apples NIT that other than that he didn't really address at all multi-cloud what do you guys think about multi cloud yeah what it's pretty much that if you're gonna have multiple clouds at least one of them's gonna be AWS so they're gonna get some of your money if we came a bi can't get all your money I'll get at least get some of your money that's reasonable but I think part of the multi cloud conversation is that enterprises are actually trying to clarify their existing way of doing things so cloud isn't a destination it's not like a it's not a physical location it's a state of mind it's a way of operating things an enterprise that that's that's the transformation part that enterprises are trying to do so transform the way that they operate themselves to be more cloud like so part of the multi cloud piece I think that people are kind of missing is well it's not just Amazon or some of its competitors its existing on-site infrastructure and making that into a cloud which i think is where something like outpost becomes a really strong proposition and I've said a million times multiplied cloud is more of a symptom than it is a strategy that'll start to change they will see an equilibrium there you know right cloud for the right job but today it's a problem that CIOs are asked being asked to clean up the crime scene all right let's wrap up by summarizing the keynote each of you guys give me your take on I'll start I think this was a inflection point for AWS and Jesse in the sense of they now know they have to go the next gen loud it's Amazon enterprise it's data it's outpost it's all these things it's truly next-gen I think this is going to be all about data it's all gonna be about large-scale infrastructure and data scaling and with edge and outpost I think is really an amazing move for them in the sense that's gonna probably put in motion another five to ten years of continuing architectural reshipping and I think that if you're not born in the cloud or reborn in the cloud you're gonna be naive to the fact that you're not gonna have the capabilities to be success when I think that's going to be an opportunity for entrepreneurs and for companies pivoting into enterprises so I think this goes will go might go down as one of the most pax keynotes but I think it'll look back as one of the instrumental transitions for Amazon so I think he did a good job beginning and to rush 30 announcements in three hours marathon but overall I thought he did a great job I think I would agree Jesse always does a good job he's giving a message to you know CEOs as opposed to the CIO and he had two CEOs on stage I thought there was quite a gap between you know that message of transformation and then sort of geeking out on all the new services so there's still some work to be done there but I think it's a lot of developers in the audience I'm seeing them tell your boss to get on the train it's a very hard keynote to serve both audiences but so it's a start but there's a lot of work to be done there Justin yeah I agree with that I think this is probably one of the first keynotes maybe last year but certainly this year there's like AWS is very serious about enterprise and is trying to talk to enterprise a lot more than it ever has it still talks to developers but we didn't see anywhere near as much interesting in kind of the startup ecosystem it's like no no cloud is for serious companies doing serious work and I think that we're just going to see Amazon talking about that more and more and more because that's where all the money is yeah next-generation cloud new architectures all about the enterprise guys this is the cube opening day for three days of wall-to-wall coverage keynote analysis from Andy Jessie and Amazon Andy Jessie will be on Thursday at 3 o'clock we got a lot of top Amazon executives will who'll help us open and unpack all these to make mega announcements stay with us for more cube coverage and go to Silicon angle comm cube net for the videos be back back after this short break [Music]

live from Las Vegas it's the queue covering del technology's world 2019 brought to you by Dell technologies and it's ecosystem partners hey welcome back everyone cubes live coverage day three of three days of wall-to-wall coverage got two sets exploding the content out there the cube can and we've been calling it so much content coming in I'm John Fourier your host with mykos de Villante we're Tom sweet is the CFO of Dell Technologies he's the man who's making it all happen all the numbers are starting to come in we're starting to see some real big numbers and more welcome to the Q thanks for spending the time hey I'm happy to be here it's great to see you guys again and it's been a great three days here at Deltek world so I'm very excited about what we're seeing all of the enthusiasm by with our customers and partners and the receptivity to what we're doing as a company and the capabilities we're driving is pretty exciting it's kind of like the postgame show I guess the show's going to end today but I've been watching you and the analysts giving all the presentations you're what we call a Czech athlete you got a you got to hold the ship down make the numbers work you got a lot of great puzzle pieces that you know you guys have laid out here at the show across the portfolio aggressive new architecture around end-to-end operations a lot of moving parts being integrated in and the numbers are looking really good a scoreboard looks good give it take us through the highlights of inside the numbers up into the right give us the highlights well you know thank you for that but it's been we had a great fiscal 19 as you guys know by now right so 90 over 91 billion dollars of non-gaap revenue we added 11 billion dollars of revenue in the year or so if you think about that that's the equivalent of a couple of Fortune 500 companies coming into the company you know took share in all the categories that were focused on you know we took over 320 basis points of share and storage I mean over 200 basis points of share and main stream server revenue you know our PC client commercial clients you took over I think a couple hundred basis points this year so we're very pleased with the progress but I think what's most exciting as we think about value creation we're headed as a company is some of the things that we announced this week around the cloud platform and what you're beginning to see is the fill in of the capabilities and the tie together of the companies that are coming together with integrated solutions and capabilities and so you know I've been with the analyst and as you referenced and they had lots of good questions on how does this all fit together how does it then what's the acceleration point if you will how does this take off from here and you know so work and so we went through that in terms of let's put the platform out there let's begin to build on it you know customers are asking for that multi cloud capability this is what this does for them it ties this together and one single pane of glass from an orchestration and management perspective so we're really excited and then you know you saw Jeff introduce a bunch of new products the new latitude line some of the new server capabilities new storage arrays that are coming and so you know customer the buzz here is pretty strong so it's been pretty exciting this we congratulations on just a shareholder value I know from a numbers standpoint it's really been successful congratulations the question I want to ask you going back I remember the conversation you know HPE got smaller HP Enterprise got smaller Dell was getting bigger and the conversation at that time was scale as a competitive advantage and we were talking about how cloud was showing the way that scale actually has these synergies as you look back now and as the evolution started you guys start executing we was the the first sign of wow this is gonna be awesome well probably Michael was more optimistic about it than I was figure out how to pay for it come on that's a lot of money you know so but look I mean I think what we saw when we when we came together as with Dell and EMC was the fact that he come we needed each other right we had capabilities that didn't overlap they gave us great presence and technology in the data center and clearly they have brought VMware and pivotal with them we brought scale we brought maybe an execution framework and a focus and the combination of the has been pretty powerful and look I mean it's taken a couple of years of heavy lifting right but and we're not done and there's lots to go do but I think we're pretty excited about how this started to accelerate on us you know or pick up momentum I should say you know middle last year does it margin expansion or is it to go to market efficiency or supply chain all three I think it's all three right if you listen to us over the last couple years we talked about hey we needed to invest we had to invest in new capabilities from a solution perspective we had to invest in go to market coverage you know so we've spent a fair amount of investment dollars putting you know putting the pieces in place and so then it takes time for that to come together and coalesce and I think we're early innings on that you know you know lots of competition out there but we're excited about the positioning right now so the numbers are pretty remarkable I mean to be a 90 billion dollar company growing it you know 14 percent it's pretty amazing however you know this if you take VMware's market cap to multiply it by 0.8 which is your share subtract out your core debt you know subtract out your market cap you're left with like a billion dollars is that really how we should think about the core Danelle is worth about about a billion dollars you know it's you're now getting to where I spent all my last year talking about valuation right but look I we obviously think differently about the value of the core company you just think about free cash flow coming out of the core which is over you know two and a half to three and a half billion dollars sort of three and a half billion dollar range I mean how quo the valuation framework in some instances doesn't make a lot of sense we understand that you know we're a large-scale tech company and tech investors in general haven't been you know exposed to companies with tech companies with a lot of debt right and we have more debt than the average I think it's very manageable because what's the opposite side of of you know the other side of the conversation on debt is what your EBIT are right so you think about moldable and and so look we think look I can't art I can't win those arguments as you know right around I think what we have to do is continue to go execute the business over time and I think you've you know that will demonstrate the value creation opportunity that exists here and you know people will decide whether they want to invest in us and come along with it or not well I've said it's a really cheap way to own VMware I mean if you really look at no way don't do the EM we're so there is that play one of the things that I've been really impressed with this week is your emphasis on growth but profitable growth you're not just going for market share for market share sake you got but but you are going hard for market share it's an interesting balance how do you balance those two oh it's sort of this constant juggle right because look I mean you think about where we compete PC server external storage we can talk Software Defined and some of the other dynamics that are going on but those mark those areas are generally not double-digit growth areas right and so if you're going to grow you're generally taking share from somebody right and so we had this philosophy in these types of areas we got to grow and it's got to be profitable to your point and in these spaces you can go out and get a lot of market share that's doable but you can also spend a lot of money doing that right you can you can rent share so to speak if you want it and so there's this balance of pushing the team's on go grow I want it to be the right kind of growth which means what does that mean it means you go acquire customers that have a value stream associated with them and yes you may be aggressive to go get them but over time you build that cape you build the ecosystem around them in terms of the other solutions and capabilities they're buying and so it's this constant balance you know and so that's what we're we're trying to make sure we get right if you will yeah one more CFL question if I may and then we can talk about more fun stuff so it talks about the debt yeah I think you got that covered you've managing that very well you know we talked about the valuation fine one of the areas that that I have some concerns about I'd like your responses just the PC business itself it's a very important business for you guys yeah it's it's about half the revenue maybe it's not as profitable we know that but it also absorbs a lot of overhead of the company so big shifts in that business would have tectonic effects I would think on your business how do you think about that how do you manage that I wonder if I haven't heard much talk about that and I just wonder if you could you know educate CSG business which is our PC business we've got forty three billion dollar business last year so you're right it provides us great scale by the way and great supply chain scale but if you if you think about what's driving the PC Renaissance right now there's a Windows 10 refresh going on as you both know and you know Microsoft's estimate would be hey you got to probably another year or so that left and then you got through most of that refresh cycle and then the question I always get to your point is what's next yeah and then I'm good some let me pivot the conversation which is if you think about what's next is the feedback we're now getting when you think about the workforce and the generation that's in the workforce now wants good technology and so the days of let me give all of my employees and team members these $400 $500 thick pcs that wait eight nine ten pounds are gone companies want employees want technology that they can carry that they like that's usable you know the whole flexible workforce dynamic and so there's a whole conversation around workforce transformation that's happening the other thing is you you hear us talk about edge to quarter cloud that edge computing dynamic which is will include both data you know infrastructure and hard PC hardware at the edges an interesting dynamic so we think the evolution continues to evolve and the PC business stays healthy for us but yes you're right it's a big business but it's a great cash flow built at the same time if that if John if that edge becomes a tailwind for you guys I mean essentially there's an oligopoly Michael Michael is all Michael was saying the edges where the games going to be in ten years I would just iterate add one thing to your comment about the client businesses I think one i 100% agree I think the Alienware booth here is a canary in the coal mine if you talk to any of the younger generation gamers they have this phrase called pcmr which stands for PC master-race there's a shift back to the PC because of gaming mm-hm and they all want their rigs and they want horsepower they're into the tap yeah so the ease of use and simplifying the tech they want the best graph they want rate racing they want I mean they want all these new things so I think there's a whole nother generation to your point anyway back to my question on this a business model issue is that Michaels on yesterday said we're not in the headline in Silicon angle right now says we're not a conglomerate Michael Dell savers the integrated pieces of his growing company so I gotta ask you you know in in the intersection of innovation strategy business model innovation and financial and strategy you gotta have a financial strategy at overlays innovation strategy as well as the business model how would you describe the financial strategy of Dell technologies and how does that overlay directly on top of the innovation strategy and the business model look alright smile to man job is to help Michael to build his vision and fulfill his vision the subset of that is what's the job of a what what does a company do it's all about creating value and shareholder value so the overall a financial strategy and framework is shareholder value creation right and you step down from that you say how do you create value you create value these would be better capabilities better products and solutions how do you do that then you get into a capital allocation conversation on how much am I going to allocate of my capital to innovation to R&D how much a value creation is going to come through debt pay down to your point you know if you look at the levers we're pulling right now and how and simplified capital structures I should also say so the leaveners we're pulling right now are all those levers right we're pulling a let me build the innovation the integrated capabilities this concept of it we've got great capabilities across the family of Dell technologies how do we integrate them how do I create solutions that you customers want at the same point in time I'm pricing those effectively I'm creating cash generation that allows me to reinvest in the business and also pay down debt that ultimately drives shareholder value right yeah and this conglomerate come I thought was relevant because I don't see you as a conglomerate if you look at the success of say Amazon Web Services as part of Amazon almost half their revenues now that's one large distributed computer basically I mean it's integrated parts of a lot of things as an operating environment operating system so you've said on the cube that is a model you guys have a similar approach you're looking at the holistic picture of Dell technologies as an operating model with synergies and systems not this divisions pumping out all this cash they're siloed it's the integrations of key part comment on that piece yeah look I mean you know I've we've been we've been having this pushing on this conglomerate thing now for awhile right in the sense up we've got certain investors in certain analysts and that think about well you've got all these piece parts in you but these piece parts don't run independently they're integrated what we're using joint selling activity joint solution capability and development to sell to we sell technology right I'm not selling engines and lightbulbs and appliances right I'm selling technology to a set of buyers that are consuming that technology in an integrated fashion and that's how we're going to market and that's how we're building solutions to them and so look we're gonna you're going to continue to hear us push on that theme because I think it's an important theme that people need to understand about what we're trying to do but you know and so work that drives evaluation conversation which has been you know Andy jassie CEO of Amazon told me once on the queue you gotta be able to myth being misunderstood for a while before people figure it out but what's your free cash flow down to three billion you're throwing off what's the number there a lot of cash yeah I mean you're you're it's higher than that but when you throw in VMware thrown beware your your cash flow from ops is roughly riding around seven billion dollars right so you can't go on a business if you don't run out of cash all right that's why we talk about cash no word we're good but you know we're also thing about cash right so look I mean I think we're just going to continue to run the business right we've got to go execute the business it's a challenging you know it's always a competitive environment out there but you know that's our job is to go execute the business macro questions so I think I heard from you Tom this week that IDC has the IT market growing at 2x GDP and I'm thinking about the same hmm how is that you know are people gonna start spending more on AI technology as a percentage of revenue maybe but then I'm thinking what they're spending a lot today on labor yeah and I think what's happening is they're shifting a lot of those labor into technology and they're eliminating some of those labor costs and with that shift is that a plausible premise yeah I think I think it is but I also think that companies are thinking about their business model now and you've seen and you guys know this you're in the middle of all this you've seen a generational shift on IT used to be in the background that said hey go you know go roll up the numbers and pay the people and Peyton you know pay the bills and don't think about the business you know that's a simplification but now it's about how is technology used to differentiate my business model to capture new customers to give you a new experience to give you a competitive advantage and what's interesting for us is that these conversations are not just with CIOs there were Co CF CEO CFOs and so this investment cycle that's here is pretty interesting for us right and so look you asked me about the macro you know it's not a year ago what were we all talking about global synchronous growth right remember that a course we're not really talking about that right now there's you know there's pressure points around the globe depending upon where you are and and it's just a different environment so it is a bit choppier out there I mean I think the macro thing is to me is yeah I'm not as in the weeds as much you guys are but you got consolidation value creation and you guys saw with that big plan and then you got an exploding data ai business happening in the marketplace that's showing customers that they could actually reinvest and do new things drive new revenue source model expansions on the customer side as well as a massive tailwind of course cloud computing you could do it faster so between all these things that's a nice pop for you guys well the technology trends are clearly headed our way right you know there's data being created everywhere you got to do something with that data you got to store it you got to compute it if you want to get analytics and insight and so all of these things are sort of lining up now look I don't want to oversell that because we all know this this business is you know you got to go out and compete every day and to win but it's it's an interesting time are you increasing your spend on technology as a percentage of revenue or you know you know if you're talking about the R&D spend it's rough about four-and-a-half percent of my revenue right now so his revenues going up we're spending more money in IIT oh okay and might in my own tech we're up we're up right as a percentage yes okay digital transformation your premise is people are going to spend more as a percentage on tech because the return is higher but being a good CFO I'm also squeezing my guys in other you keep them in line right congratulations again on you your team Michael creating great shareholder value I still Dave still thinks it's undervalued he'll continue and I think he's right on that thanks for coming on spend your very valuable time sharing this summary of what's going on here at the Dell technology world thanks for being here guys and it's always fun to talk to you thanks great car tops we CFO chief financial officer of Dell technologies getting inside the numbers talking about the strategy how it all relates to customer impacts the cue bringing you all the action day three of coverage we'll be right back after this short break I'm sure for a devil on thing [Music]

live from Las Vegas it's the cube covering AWS reinvents 2018 brought to you by Amazon Web Services inhale and their ecosystem partners hey welcome back everyone this the cube live day 3 coverage of Amazon Web Services AWS reinvent 2018 we're here with two cents Dave six years we've been covering Amazon every single reinvent since they've had this event except for the first year and you know we've been following AWS really since its inception one of my startup said I was trying to launch and didn't ever got going years ago and he went easy to launch was still command-line and so we know all about it but what's really exciting is the global expansion of Amazon Web Services the impact that not only the commercial business but the public sector government changing the global landscape and the person who I've written about many times on Forbes and unhooking angle Theresa Carlson she's the chief a public sector vice president of Amazon Web Services public sector public sector great to see you hi hi John I checked great to be here again as always so the global landscape mean public sector used to be this a we talk to us many times do this do that yeah the digital environment and software development growth is changing all industries including public sector he's been doing a great job leading the charge the CIA one of the most pivotal deals when I asked Andy jassie directly and my one-on-one with them that this proudest moments one of them is the CIA deal when I talked to the top execs in sales Carla and other people in Amazon they point to that seminal moment with a CIA deal happen and now you got the DoD a lot of good stuff yeah what's do how do you top that how do you raise the bar well you know it still feels like day one even with all that work in that effort and those customers kind of going back to go forward in 2013 when we won the CIA opportunity they are just an amazing customer the entire community is really growing but there's so much more at this point that we're doing outside of that work which is being additive around the world and as you've always said John that was kind of a kind of a pivotal deal but now we're seeing so many of our government customers we now have customers at a hundred and seventy four countries and I have teams on the ground in 28 countries so we're seeing a global mood but you know at my breakfast this week we talked a lot about one of the big changes I've seen in the last like 18 months is state and local government where we're seeing actually states making a big move California Arizona New York Ohio Virginia so we're starting to see those states really make big moves and really looking at applications and solutions that can change that citizen services engagement and I achieve in these state local governments aren't real I won't say their course they're funded but they're not like funded like a financial services sector but that's women money they got to be very efficient clouds a perfect opportunity for them because they can be more productive I do a lot of good things I can and there's 20 new governor's coming on this year so we've had a lot of elections lots of new governors lots of new local council members coming in but governor's a lot of times you'll see a big shift when a governor comes in and takes over or if there's one that stays in and maintains you'll see kind of that program I was just in Arizona a couple weeks ago and the governor of Arizona has a really big fish toward modernization and utilization of information technology and the CIO of the state of Arizona is like awesome they're doing all this work transformative work with the government and then I was at Arizona State University the same day where we just announced a cloud Innovation Center for smart cities and I went around their campus and it's amazing they're using IOT everywhere you can go in there football stadium and you can see the movement of the people how many seats are filled where the parking spaces are how much water's been used where Sparky is their their backside I've got to be Sparky which was fed but you're seeing these kind of things and all of that revs on AWS and they're doing all the analytics and they're gonna continue to do that one for efficiency and knowledge but to also to protect their students and citizens and make them safer through the knowledge of data analytics you know to John's point about you know funding and sometimes constricted funding at state and local levels and even sometimes the federal levels yeah we talked about this at the public sector summit I wonder if you could comment Amazon in the early days help startups compete with big companies it gave them equivalent resources it seems like the distance between public sector and commercial is closing because of the cloud they're able to take advantage of resources at lower cost that they weren't able to before it's definitely becoming the new normal in governments for sure and we are seeing that gap closing this year 2018 for me was a year that I saw kind of big moves to cloud because in the early days it was website hosting kind of dipping their toes in this year we're talking about massive systems that are being moved to the cloud you know big re-architecting and design and a lot of people say well why do they do that that costs money well the reason is because they may have to Rio architect and design but then they get all the benefits of cloud through the things that examples this week new types of storage new types of databases at data analytics IOT machine learning because in the old model they're kind of just stagnated with where they were with that application so we're seeing massive moves with very large applications so that's kind of cool to see our customers and public sector making those big moves and then the outputs the outcome for citizens tax payers agencies that's really the the value and sometimes that's harder to quantify or justify in public sector but over the long term it's it's going to make a huge difference in services and one of the things I now said the breakfast was our work and something called helping out the agents with that ATO process the authority to operate which is the big deal and it cost a lot of money a lot of times long time and processes and we've been working with companies like smartsheet which we helped them do this less than 90 days to get go plow so now working with our partners like Talos and Rackspace and our own model that's one of the things you're also gonna see check and Jon you're taking your knowledge of the process trying to shrink that down could time wise excessive forward to the partners yes to help them through the journey these fast move fast that kind of just keep it going and that's really the goal because they get very frustrated if they build an application that takes forever to get that security that authority to operate because they can't really they can't move out into full production unless that's completed and this could make or break these companies these contracts are so big oh yeah I mean it's significant and they want to get paid for what they're doing and the good work but they also want to see the outcome and the results yeah I gotta ask you what's new on the infrastructure side we were in Bahrain for the region announcement exciting expansion there you got new clouds gov cloud east yeah that's up and running no that's been running announced customers are in there they're doing their dr their coop running applications we're excited yes that's our second region based on a hundred and eighty five percent year-over-year growth of DEFCON region west so it's that been rare at reading I read an article that was on the web from general Keith Alexander he wrote an op-ed on the rationale that the government's taking in the looking at the cloud and looking at the military look at the benefits for the country around how to do cloud yes you guys are also competing for the jet idea which is now it's not a single source contract but they want to have one robust consistent environment yeah a big advantage new analytics so between general Keith Alexander story and then the the public statement around this was do is actually outlined benefits of staying with one cloud how is that going what how's that Jedi deal going well there's there's two points I'd like to make them this first of all we are really proud of DoD they're just continuing to me and they're sticking with their model and it's not slowing them down everything happening around Jedi so the one piece yes Jedi is out there and they need to complete this transaction but the second part is we're just we're it's not slowing us down to work with DoD in fact we've had great meetings with DoD customers this week and they're actually launching really amazing cloud workloads now what's going to be key for them is to have a platform that they can consistently develop and launch new mission applications very rapidly and because they were kind of behind they their model right now is to be able to take rapid advantage of cloud computing for those warriors there's those war fighters out in the field that we can really help every day so I think general Alexander is spot on the benefits of the cloud are going to really merit at DoD I have to say as an analyst you know you guys can't talk about these big deals but when companies you know competitors can test them information becomes public so in the case of CI a IBM contested the judge wheeler ruling was just awesome reading and it underscored Amazon's lead at the time yeah at Forrest IBM to go out and pay two billion dollars for software the recent Oracle can contestant and the GAO is ruling there gave a lot of insights I would recommend go reading it and my takeaway was the the DoD Pentagon said a single cloud is more secure it's going to be more agile and ultimately less costly so that's that decision was on a very strong foundation and we got insight that we never would have been able to get had they not tested well and remember one of the points we were just talking earlier was the authority to operate that that ability to go through the security and compliance to get it launched and if you throw a whole bunch of staff at an organization if they they're struggling with one model how are they gonna get a hundred models all at once so it's important for DoD that they have a framework that they can do live in real first of all as a technical person and an operating system which is kind of my background is that it makes total sense to have that cohesiveness but the FBI gave a talk at your breakfast on Tuesday morning Christene Halverson yeah she's amazing and she pointed out the problems that they're having keep up with the bad actors and she said quote we are FBI is in a data crisis yes and she pointed out all the bad things that happened in Vegas the Boston Marathon bombing and the time it took to put the puzzle pieces together was so long and Amazon shrinks that down if post-event that's hard imagine what the DoD is to do in real time so this is pointing to a new model it's a new era and on that well and we you know one of the themes was tech4good and if you look at the FBI example it's a perfect example of s helping them move faster to do their mission and if they continue to do what they've always done which is use old technologies that don't scale buying things that they may never use or being able to test and try quickly and effectively test Belfast recover and then use this data an FBI I will tell you it is brilliant how they're the name of this program sandcastle one Evan that they've used to actually do all this data and Linux and she talked about time to mission time to catch the bad guys time to share that analysis and data with other groups so that they could quickly disseminate and get to the heart of the matter and not sit there and say weight on it weight on this bad guy while we go over here and change time to value completely being that Amazon is on whether it's commercial or government I talk about values great you guys could have a short term opportunity to nail all these workloads but in the Amazon fashion there's always a wild card no I was so excited Dave and I interviewed Lockheed Martin yesterday yeah and this whole ground station thing is so cool because it's kind of like a Christopher Columbus moment yeah because the world isn't flat doesn't have an edge no it's wrong that lights can power everything there's spaces involved there's space company yes space force right around the corner yep you're in DC what's the excitement around all this what's going on we surprised a lot of with that announcement Lockheed Martin and DigitalGlobe we even had DigitalGlobe in with Andy when we talked about AWS ground station and Lockheed Martin verge and the benefit of this is two amazing companies coming together a tub yes that knows cloud analytics air storage and now we're taking a really hard problem with satellites and making it almost as a service as well as Lockheed doing their cube stats and making sure that there is analysis of every satellite that moves that all points in time with net with no disruption we're going to bring that all together for our customers for a mission that is so critical at every level of government research commercial entities and it's going to help them move fast and that is the key move very fast every mission leader you talk to you that has these kind of predators will say we have to move faster and that's our goal bringing commercial best practices I know you got a run we got less than a minute left but I want you to do a quick plug in for the work you're doing around the space in general you had a special breakout ibrehem yours public sector summit not going on in the space area that your involvement give it quick yeah so we will have it again this year winner first ever at the day before our public sector summit we had an Earth and space day and where we really brought together all these thought leaders on how do we take advantage of that commercial cloud services that are out there to help both this programs research Observatory in any way shape app data sets it went great we worked with NASA while we were here we actually had a little control center with that time so strip from NASA JPL where we literally sat and watched the Mars landing Mars insight which we were part of and so was Lockheed Martin and so his visual globe so that was a lot of fun so you'll see us continue to really expand our efforts in the satellite and space arena around the world with these partnership well you're super cool and relevant space is cool you're doing great relevant work with Amazon I wish we had more time to talk about all the mentoring you're doing with women you're doing tech4good so many great things going on I need to get you guys and all my public sector summits in 2019 we're going to have eight of them around the world and it was so fantastic having the Cuban Baja rain this year I mean it was really busy there and I think we got to see the level of innovation that's shaping up around the world with our customers well thanks to the leadership that you have in the Amazon as a company in the industry is changing the cube will be global and we might see cube regions soon if Lockheed Martin could do it the cube could be there and they have cube sets yes thank you for coming on theresa carlson making it happen really changing the game and raising the bar in public sector globally with cloud congratulations great to have you on the cube as always more cube covers Andy Jasmine coming up later in the program statements for day three coverage after this short break [Music]

>> Live from Las Vegas, it's theCUBE! Covering AWS re:Invent 2018. Brought to you by Amazon web services, Intel, and their ecosystem partners. >> Hey welcome back everyone, here at AWS re:Invent 2018, their sixth year of theCUBE coverage, two sets wall-to-wall coverage here, two more sets in other locations, getting all the content, bringing it in, ingesting it into our video cloud service on AWS, ah, Dave, >> Lot of content, John. >> Lot of people don't know that we have that video cloud service, but we're going to have a lot of fun, ton of content, ton of stories, and a special analyst segment, Jerry Chen, guest here today, CUBE alumni, famous Venture Capitalist and Greylock partners, partnering with Reid Hoffman, the founder of LinkedIn, great set of partners at Greylock , great firm, tier one, doing a lot of great deals, Rockset, recent one. >> Thanks, yeah. >> You're also, on the record, these six years ago, calling the shot of Babe Ruth predicting the future. You've got a good handle on, you've got VM where you have the cloud business, now you're making investments, you're seeing a lot of stuff on the landscape, certainly, as a Venture Capitalist, you're funding projects, what better time now of innovation to actually put money to work, to hit market share, and then the big guys are getting bigger, they're creating more robust platforms, game is changing big-time, want to get your perspective, Dave, so, Jerry, what's your take on the announcements, slew of announcements, which ones jumped out at you? >> I think there's kind of two or three areas, there's definitely the hybrid cloud story with the Outpost, there's a bunch of stuff around ML and AI services, and a bunch of stuff on data and storage, and for me I think what they're doing around the ML services, the prediction, the personalization, the text OCR, what Amazon's doing at that app layer is now creating AI building blocks for modern application, so you want to do forecasts, you want to do personalization, you want to do text analysis, you have a simple API to basically build these modern apowered apps, he's doing to the app infrastructure layer what he's done to the cloud infrastructure layer, by deconstructing these services. >> And API is also the center, that's what web services are, so question for you is, do you see that the core cloud players, Aussie, Amazon, Bigly, Google, Microsoft, others, it's a winner take most, you called that six years ago, and that's true, but as they grow there's going to be now a new cloudification going on for business apps, new entrepreneurs coming to market, who's vulnerable, who wins, who loses, as this evolution continues because it's going to enable a lot of opportunity. >> Yeah, well I mean Amazon in cloud in general is going to create a lot of winners and losers, like you said, so I think you have a shift of dollars from on prem and old legacy vendors, databay storage, compute, to the cloud, so I think there's a shift of dollars, there are winner and losers, but I think what's going to happen is, with all these services around AI, ML, and Cloud as a distribution model, a lot of applications are going to be rebuilt. So I think that the entire application stack from all the big SaaS players to small SaaS companies, you're going to see this kind of a long tale of new SaaS applications being built on top of the Cloud that you didn't see in the past. >> And the ability to get to markets faster, so the question I have for you is, if you're an entrepreneur out there, looking for funding and I can to market quicker, what's the playbook, and two, Jassie talked on stage about a new persona, a new kind of developer, one that can rethink and reimagine and reinvent something that someone else has already done, so if you're an entrepreneur, you got to think to take someone else's territory, so how does an entrepreneur go out and identify whose lunch to eat, so if I want to take down a company, I got to have a strategy, how do I use the cloud to >> I think it's always a combination when a founder in a thing attacks your market it's a combination of where are the dollars, where can I create some advantage IP or advantage angle, and thirdly where do I have a distribution advantage, how can I actually get my product in the hands of the users differently? And so I think those are the three things, you find intersection of a great market, you have a unique angle, and you have a unique route to market, then you have a powerful story. So, you think about cloud changing the game, think about the mobile app you can consist of, for consumers, that is also a new platform, a new distribution method, the mobile app stores, and so what happened, you had a new category of developers, mode developers, creating this long tale, a thousand thousand apps, for everything from groceries to cars to your Fantasy Football score. So I think you're going to see distribution in the cloud, making it easy to get your apps out there, going to see a bunch of new markets open up, because we're seeing verticals like healthcare, construction, financial services, that didn't have special apps beforehand, be disrupted with technology. Autodesk just bought PlanGrid for 800 million dollars, I mean that's unheard of, construction software company. So you can see a bunch of new inverdics like that be opened up, and then I think with this cloud technology, with compute storage network becomes free and you have this AI layer on top of it, you can power these new applications using AI, that I think is pretty damn exciting. >> Yes, you described this sort of, we went from client server to the cloud, brought a whole bunch of new app providers, obviously Salesforce was there but Workday, Service Now, what you described is a set of composeable digital services running on top of a cloud, so that's ripe for disruption, so do I have to own my own data centers if I'm big SaaS company, what happens to those big guys? >> I don't think you have to, well, you don't have to own your own data center as a company, but you could if you wanted to, right, so at some point in scale, a lot of big players build their own data centers, like AirBNB is on Amazon, but Dropbox built their own storage on Amazon early, then their own data center later. Uber has their own data center, right, so you can argue that at some point of scale it makes sense to build your own, so you don't need to be on Amazon or Google as your start, but it does give you a head start. Now the question is, in the future, can you build a SaaS application entirely on Amazon, Azure, or Google, without any custom code, right, can you hide read write call private SaaS, like a single instance of my SaaS application for you, John, or for you, Dave, that's your data, your workflow, your information personalized for you, so instead of this multi-tenet CRM system like Salesforce, I have a custom CRM system just for Dave, just for Jeff, just for Jerry, just for theCUBE, right? >> I think yes, for that, I think that's definitely a trend I would see happening. >> It's what Infor is trying to do, right, Charles Phillips says "Friends don't let friends "build data centers," but they've still got a big loss in legacy there, but it's an interesting model, focused on verticals or microverticals or like the healthcare example that you're giving, and lot of potential for something. >> Well here's why I think I like this because, I think, and I said this before in theCUBE maybe it's not the best way to say it is that, if you look at the benefit of AI, data-driven, the quality of the data and the power of the compute has to be there. AI will work well with all that stuff, but it's also specialized around the application's use case. So you have specialism around the application, but you don't have to build a full stack to do that, you could use a horizontally scalable cloud distribution system in your word, and then only create custom unique workloads for the app, where machine learning's involved, and AI, that's unique to the app, that's differentiation, that could be the business model, or the utility. So, multitenancy could exist in theory, at the scalable level, but unique at the top of the level so yes I would say I'd want that hosted in the most customized, agile, flexible way. So I would argue that that's the scenario. >> I think that's the future, I mean one of my, I think you were saying, Dave, friends don't let friends build data centers anymore, it's you probably don't need to build a data center anymore because you can actually build your own application on top of one of the two or three large cloud providers. So it's interesting to see what happens the next three, four years, we're going to see kind of a thousand flowers bloom of different apps, not everyone's going to make it, not everyone's going to be a huge Salesforce-like outcome, but there'll be a bunch of applications out there. >> And the IoT stuff is interesting to me, so observing a lot of what the IT guys are doing, it reminds me of people trying to make the Windows mobile phone, they're just trying to force IT standards down the IoT, what I've seen from AWS today is more of a bottoms up approach, build applications for operations technology people, which I think is the right way to go, what do you see in an IoT, IoT apps, what's the formula there? >> I think what Amazon announced today with their time series database, right, their Timestream prediction engine, plus their Outpost offering with the Vmware themselves, you're really seeing a combination of IoT and Edge, right, it's the whole idea is, one, there's a bunch of use cases for time series in IoT, because sentry data, cameras, self-driving cars, drones, et cetera, there's more data coming at you, it adds all of that. >> And Splunk has proven that big-time. >> Correct, Splunk's let 18 billion Marcap company, all on time series data, but number two, what's happening is, it's not necessarily centralized data, right, it's happening at the edge, your self-driving car, your cell phone, et cetera, so Outpost is really a way for Amazon to get closer to the edge, by pushing their compute towards your data center, towards remote office, branch office, and get closer to where the data is, so I think that'll be super interesting. >> Well the Elastic Inference engine is critical, now we got elasticity around inference, and then they got the chip set that worked Inferentia, that can work with the elastic service. That's a powerful combination. >> The AI plumbing war between Google and TetraFlow as technology there's like PyTorch, Google TPUs versus what Amazon is doing with inference chips today, versus what I'm sure Microsoft and else is doing, is fascinating to watch in terms of how you had a kind of a Intel Nvidia duopoly for a long time, and now you have Intel, Nvidia, and then everyone from Amazon, Google, Microsoft doing their own soul again, it's pretty fascinating to watch. >> What was the stat, he said 85% of the TensorFlow, cloud TensorFlow's running on AWS? >> Makes a lot of sense, I think he said Aurora's customers logoslide doubled, but let's break down real quick, to end the segment with the key areas that we see going on, at least my perspective, I want to get your reaction. Storage, major disruption, he emphasized a lot of that in the keynote, spent a lot of time on stores, actually I think more than EC2 if you look at it, two, databases, database war, storage rate configuration, and a holy trinity of networking, storage, and compute, that's evolving, databases, SageMaker, machine learning. All there and then over the top, yesterday's announcement of satellite as a service, that essentially kills the edge of the network, cause there is no edge if we have space satellites shooting connectivity to any device the world is now, there's no more edge, it's everywhere. So, your thoughts, those areas. Which one pops out as the most surprising or most relevant? >> I think it's consistent Amazon strategy, on the lowest layer they're trying to draw the cost to zero, so on storage, cheaper cheaper cheaper, they're driving the bottom layer to zero to get all your data. I think the second thing, the database layer, it makes sense, it's not open-source, right, time scale or time series, it's not, Timestream's not their open-source database, it's their own, so open-source, low cost, the lowest layer, their database stuff is mostly their own, Aurora, Dynamo, Timestream, right, because there's some level lock in there, which I think customers are worried about, so that's clever, it's not by accident, that's all proprietary, and then ML Services, on top of that, that's all cares with developers, and it's API locking, so clearly low-cost open-source for the bottom, proprietary data services that they're trying to own, and then API's on top of it. And so the higher up in the stack, the more and more Amazon, you look, the more and more Amazon you have to adopt as kind of a lock in stack, so it's a brilliant strategy the guys have been executing for the past six, seven years as you guys have seen firsthand, I think the most exciting thing, and the most shocking thing to me is this move towards this battle for the AI front, this ML AI front, I think we saw ML's the new sequel, right, that's the new war, right, against Amazon, Google, and Microsoft. >> And that's the future of applications, cause this is >> But you're right on, it's a knife fight for the data, and then you layer on machine intelligence on top of that, and you get cloud scale, and that's the innovation engine for the next 10 years. >> Alright Jerry Chen just unpacked the State of the Union of cloud, of course as an investor I got to ask the final question, how are you investing to take advantage of this wave, versus being on the wrong side of history? >> I have framers for everything, there's a framer on how to attack the cloud vendors, and so I'm looking at a couple things, one, a seams in between the clouds, right, or in between services, because they can't do everything well, and there were kind of these large continents, Amazon, Google, Azure, so I'm looking for seams between the three of them, I'm looking for two, deep areas of IP that they're not going into that you actually have proprietary tap, and then verticals of data, like source of the data, or workflows that these guys aren't great, and then finally kind of cross-data cross-cloud solution, so, something that gives you the ability to run on prem, off prem, Microsoft, Google, Azure. >> Yeah, fill in the white spaces, there are big white spaces, and then hope that could develop into, good. Jerry Chen, partner in Greylock , partners formerly Vmware part of the V Mafia, friend of theCUBE, great guest analysis here, with Dave Vellante and John Furrier, thanks for watching us, stay with us, more live coverage, day two of three days of wall-to-wall coverage at re:Invent, 52,000 people, the whole industry's here, you can see the formations, we're getting all of the data, we're bringing it to you, stay with us.

(upbeat instrumental music) >> Narrator: Live from Las Vegas, it's the Cube. Covering AWS re:Invent 2017, presented by AWS, Intel, and our ecosystem of partners. >> Hey, welcome back everyone. This is the Cube, live here in Las Vegas for AWS re:Invent 2017. I'm John Furrier, the cohost of the cube. My cohost, Keith Townsend, here for our fifth year in a row, covering the thunderous growth of Amazon Web Services as they continue to not only nail the developers and the start ups, but continue to win the enterprise. Our next guest, Lew Cirne, who's the founder and CEO of publicly held New Relic, a very successful startup, one of the most admired places to work in the Bay area, and in tech. Lew, great to have you on the Cube, welcome. >> Hi. >> John: Hi, first time. >> I know, so great to be here. I can't believe it's the firs time. I've been such a fan for a long time. >> Now you're an alumni, the benefits. >> Here I am. >> All the benefits of being an alumni, all those season tickets to all of our games. I gotta, I want to just share something with the audience out there. You're the only public CEO that I know that's been on the Cube that writes software, has a GitHub account, and manages a publicly held company. So that's a unique thing and I want to just say it's awesome. >> It's a full plate, that's for sure, but I'm the luckiest guy in the world because I've always loved building software since my first computer I got in the Christmas of 82, what's that, 35 years ago now, and, and so, what an exciting time to be someone who's passionate about software and technology. Look what's going on in the cloud, and so I've been fortunate enough to start this company that's participating in this revolution in technology, so it's great. >> You guys are always in the cutting edge. I noticed, you guys get your hands dirty, you get in there, you're coding away, but you guys are very successful in a very important area right now, which is instrumentation of data. >> Lew: Absolutely. >> In applications, so I really want to get your, kind of your thoughts on the landscape. We were talking about on our intro analysis, that we're seeing a renaissance in software development, where with open source growing exponentially, a new software methodology's coming out, where there's just so much going on. Multiple databases within one app, IOT, so a new kind of thinking is evolving. What's your take on that? >> Well I think it's really important to understand why all of this is happening. So why are there 40,000 people here in Las Vegas for re:Invent? Why are people consuming the cloud at just a dizzying pace? It's not just for the sake of cloud computing, it's because there's this business imperative to compete on software, so if you look at where software was 15, 20 years ago, software was a tool to reduce costs and automate things in the back end. Now your software's your business. If you are a large global bank, your app has more to do with your customers' experience and satisfaction than the branch because nobody walks through a branch anymore, so now the best software developing bank is going to be the winner, so if you think about that's what's going on and that's why they're adopting new technologies to move faster, so where do we fit in? If you're going to compete on your software, and by competing you have to build the best stuff, the fastest as possible, so you have to get to market quickly, and that means you've got to change a lot. Anytime you're changing something rapidly, that introduces risk. New Relic de-risks all of that rapid movement by instrumentation, by measuring everything in the software. Those measurements help you move faster with confidence. >> And also I would say that you, not only does that create risks, but new software creates risks, so I'm doing server-less, I want to try the new service because it could A, add value, AKA Lamda or whatever, so a new, maybe time out is needed, so all kinds of new things or elements are going on inside the software stacks. >> Yes, and more complex than ever before, right, so you introduce things like Lambda server-less function computing, call it what you will, and you integrate it with, you know, microservice architecture, and so instead of one monolith, you might have hundreds, or even some of our customers have thousands of independent services, all supposed to be working in flawless concert in order to deliver a great customer experience. How on earth do you make sense of whether that's all working? Well it involves collecting an enormous amount of data about everything that's going on in real time, and then applying intelligence to that data using what we call at New Relic applied intelligence to tell our customers in real time, here's what's working well, and more importantly, here's what's going to be a problem if you don't take immediate action. And that's, you know, that's a hard problem to solve. We think we're the best at doing it. >> And that's critical too, because like you said, if it crashes, or there's some sort of breach hold that comes out there, all the stuff is at risk. >> And like, customers have just incredibly high expectations that only get higher and higher every day. Like, you know, one of our customers is Domino's and it's an amazing thing where you pre-order your pizza and you can see, second by second, how your order is doing, right? They put your pizza in the oven, then they took the pizza out of the oven, and I see that in phone, and that gives, that's that feedback that's valuable to me, right? So long as it's working, right? >> John: I'm hungry now. >> So we, we've ravished this word digital transformation all the time. >> Oh yeah, it's a little overused, but. >> It is a little overused. But melding that physical world with cold. I love it that you're a developer. First off, what's your favorite language? >> Oh geez, it really depends on the project. I'm really getting into, I love React right now on the front end. I'll still do Java when it needs some heavy lifting, Ruby for rapid prototyping. It really depends on the task at hand. >> So the value of reducing friction from a developer seeing a problem, needing to solve that problem, and getting the resources needed to solve a problem, AWS does a wonderful job of saying, you know what, developer, give me your credit card, we'll give you all the tools you need. Where is the first stumbling block because this is new capability, net new over the past few years? Where's the first set of stumbling blocks when developers reduce friction, get to that first level contact with the branch manager of the pizza store, where does it fall apart and New Relic comes in to help? >> Look, how many times have you ever had a developer or a tech or someone that works on my machine, right? >> Exactly, worked on my laptop. I don't know why it didn't deploy well in production, it worked perfectly fine on my laptop. >> I really, I started thinking about and solving this problem 20 years ago now. The notion of less instrument Java code because I was frustrated with the stuff that worked on my laptop. I couldn't understand why it didn't work when a customer used it, and everything prior to the customer using the software is nothing but sunk cost. There is no value in the software you're building until it runs in production. How well it runs in production is what determines the fate of the application. And that's where New Relic comes in, is we feel like alright, let me take you back to the ancient days of like turn of the century, 2000, nothing went to production without QA. Now nothing goes to production without instrumentation. >> Yeah, but now Agile's there, so the old days was a crab. You built a software product, but you didn't know if it was going to work until it went into production with QA. Now you're shipping stuff fast, so it's still. You've got that dev off mindset, but it's in QA. >> One of our customers, Airbnb, deploys more than a thousand times a day. And this is not a small, low load site. I mean like every deploy has to work, otherwise millions of people are impacted and it's the whole business, and it's a big business, so you're talking about a pace of innovation and change that cannot be managed with a traditional QA cycle. I've, of course testing's important, but instrumentation's more important than that. >> Lew, I want to ask you an important question because I asked Andy Jassie this last Monday when I had a one on one with him. A lot of people that are entering ecosystem for Amazon is new, that are new, or considerably, Amazon's the big, they're fearful, it's always going to be that way. He highlighted your company, New Relic, and said they're an amazing part, they do extremely well, even though they introduced Cloud Watch, which because some customers just wanted it, they have monitoring, but you guys are so much better. I said that, but if he implied it, obviously you're doing well. So the successful participation of the ecosystem is there. You can be successful in the Amazon ecosystem. >> Absolutely, it's a great partnership. >> So what's this formula for a new entry coming in or someone who's here that needs to find some white space? How do you read the tea leaves to know where not to play and where to play? >> You know, it just comes down to the fundamental good thought process you use when you're thinking about approaching your customer too. Don't think about what's in it for me, the Amazon partner. What's in it for Amazon? How do you make them more successful? And so when I imagine myself as Andy, who is like, what an incredible job he's done, but what Andy, what's top mind of Andy is how do I get more customers consuming more of Amazon faster, right? All of Amazon, all of Amazon's web services, and so we solve a problem for Andy and his team. We help our customers consume Amazon faster because we give them the confidence to consume more and move faster, and there's data to prove it. When Amazon asks their customers that aren't yet New Relic customers how much they're consuming and how fast, they get a slower rate of adoption than they do for the cohort that uses New Relic, and so it's in our mutual interest to go to market together because we help them consume more, and so I. >> John: Build a good product. >> Build a good product. >> John: Customer value. >> Think about how you help your partner be successful. Talk in that language, don't talk in language. >> Alright, so personal question. So you and I, pretend we're sitting here, having a beer, you're playing the guitar. >> A little light. >> I'm singing some tunes and Keith's our friend. He says I'm in trouble, I'm a CIO. I've got a transformation project. I don't know what to do. Which cloud do I use? How do I become data driven? Guys, help me out. Lew, what do you say? >> I say first of all, you have an instrumentation strategy. Everything, if you're a CIO in a large organization, you don't have one, two, three, or four projects. You have dozens, if not hundreds, sometimes thousands of applications and services that are all running, and you've got, I haven't met a CIO that doesn't say they've got too many monitoring tools. So you need an instrumentation strategy. Nothing should run in production without instrumentation. That's not just the service light stuff that runs on EC2, it's also every click that runs. You know, when Dunkin Donuts, which has been a longtime customer of ours, and they run in the Amazon Cloud, you know when you pre-order that doughnut, we track the tap, how long it takes from the phone all the way through the cloud services, all that's fully instrumented, so if you're a CIO, you say I can't be tactical with instrumentation. If I'm going to move fast and compete at my software, nothing should run in production without education. >> John: That's native. >> That's right. >> Foundational. >> Foundational. It's a core requirement to run in production if you're going to move at any level of speed, so establish that strategy, and then we think, we offer the best instrumentation, certainly the best value, the most ubiquitous, the easiest to use, the most comprehensive, and then we make the most sense of it, but you could pick another, you know you could pick another strategy. Some people do the heavy lifting of manually instrumenting all their code. We just don't think that's a good use of your developer time, so we automatically do that for you, but have a strategy and then execute to it. >> Awesome. Lew, congratulations on a blowout quarter. I won't even get you to comment on it, just say that you guys had a great quarter, stocks at an all time high, all because you guys are doing a great product. Congratulations and great to have you on the Cube. >> We're delighted to be here. I've honestly, I've been a longtime fan. It means a lot that you could have me on, and we really enjoy partnering with Amazon, and what a great show. >> Yeah, super successful ecosystem partner, one of the best, New Relic, based out of San Francisco, here with the founder and CEO, also musician, writes code, gets down and dirty, runs a publicly held company. He's Superman. Lew, thanks for coming on the Cube. More live data and action here on the Cube after this short break, stay with us. (upbeat instrumental music)

>> Narrator: Live from Las Vegas, it's The Cube, covering AWS Re:Invent 2017, presented by AWS, Intel, and our ecosystem of partners. >> Hey, welcome back everyone. We're live here in Las Vegas for AWS Re:Invent 2017, Amazon Web Services Annual Conference. I'm John Furrier, the cohost of The Cube, and I'm here with Keith Townsend, my cohost. We got our next guest Mike Ferris, who's the Vice President of Business Architecture at Technical Business Development. Welcome to The Cube. >> Thank you. >> So, Red Hat has got the new Hat, it's called the new school, it's called cloud, you have been there for a long time. Red has been pioneering open source, and that's growing exponentially. That combined with the cloud was seeing developers really at the heart of the conversation of valued creation. So, what's the update? I mean, you're here at AWS, you got some things to announce, things to share. >> Oh yeah, it's been awesome. I've been with the Red Hat a long time. And it's been an amazing transition to see us go from a company that really innovated the business models around open source taking Linux from being really a hobbyist activity into production workloads, and really addressing system administrators and IT administrators in the early days. What's really happened, especially since Amazon started innovating the public cloud, as you were saying, this innovative focus around what happens with developers in this space? And how can you provide more tools, capabilities, and services for them so they can really accelerate the applications and capabilities of the customers that they serve and really move forward. And so, what we've been doing very aggressively is looking up what's been happening in the open source community, helping innovate in the technologies that both Amazon and Red Hat and everybody else has been maturing, and help building out a new framework for developers to do that. And that's really centered around first, the base that we built on Red Hat Enterprise, Linux, and now more aggressively into Open Shift and container application platforms, so certainly the hot topics being Kubernetes, and everything's happening there, we've been really focused on that next generation of applications for developers. >> Everyone who watches Cube knows I'm a huge Red Hat fan, I always give you guys props because you guys were the progressives back in the day. You worked Tier One, you getting in there to give the freedom of coding back in the old days. And that was really the beginning of this massive wave. And if you look at open source and what you guys have done with open source and connected that to business value, has really been well documented. Amazon's done the same with the cloud. They were laughed at for years. Oh, it's a developer cloud. And they're winning all these enterprise deals. So, the threat here is you're starting to see that really, if you have great software and you have great value creation you can connect the business dots with developer dots. So, that being said, the rage now is server-less. The idea that you could tie containers and orchestrate work loads. This is kind of a little bit Open Shift connects there. What is the Red Hat value there because more open source, more community. What is all this Kubernetes, containerization and server-less, where does it all come together? >> So there's multiple levels, and kind of the core one that I always go back to is the core principles that enterprises need in making sure that they have secure platforms, they maintain over a long period of time, and they have a robust ecosystem that surrounds that. Those are the things that customers will always value, regardless of what level of a stack that they're investing in, and so by starting at, you know, the open source level and helping innovate in the technologies there, but bringing that in a way that customers can consume, that our partners can work with, and also gives them the extra value of what's happening in the new generation technologies, like containers and like Kubernetes, where we're actively participating, leading a lot of the development projects in the community around. Our focus is very much on taking those same core principles and making them applicable to anything new that gets developed. >> So Mike, talk to us about these core principles a little bit more. Red Hat, developer driven organization. You guys are deep in open source, from Linux to Kubernetes, to projects people have never heard of. Talk about the value that you bring to businesses, being able to have that developer driven focus internally, and starting to shift the conversation from just infrastructure, Linux, traditional, just keeping the lights on types of technologies to these new technologies, like Open Shift. How has the conversations changed? >> So certainly, you know, the developers now are actively engaged in the design of the systems and the products, not just the application that they develop, but the tools that they need, and our experience in working in the Linux community, where we were dealing with, certainly, open source developers on the Colonel and all the surrounding infrastructure, the thousands of projects that are there, we're taking that and applying it to what's happening in this application and container application space, so being able to engage those developers and say, what frameworks do you need? What tools do you need? What reliability levels do you need in these types of frameworks? Certainly provides a mechanism for them to engage, both with the community, but come to Red Hat for working with a company that can actually make that something that we will support for a longer period of time, that they can build their applications for, and also trust that they will have a strong support path through Red Hat that works upstream in the community to take any innovations that they need and be able to put them in the community as well as the supported products that we provide. >> So developer driven organization, talking to developers. Where's the grown ups in the rooms? The infrastructure of guys. So Red Hat has been known to take open source projects that can move extremely fast, Linux Colonel is an example of it, and make them enterprise ready, enterprise stable. How are you guys doing that with these developer tools, such as Kubernetes, that I frankly can't keep up with all the innovation happening in that space. How do you guys make something like Kubernetes enterprise ready? >> So this is kind of the beauty of a lot of what we do, right? So we work with and we hire the best developers we can find in the market to own projects, to be key contributors to those. Kubernetes is a great example. It was the Colonel in the early days for Linux, now it's in the Kubernetes space, but just as importantly, being able to say, you continue that innovative work in the community, but also make sure that we have reliable products that are fully tested by our, and backed by our support staff, that customers can, when they purchase into this ecosystem, can absolutely rely on, and if you look at what we've done, starting with Red Hat Enterprise Linux, we leaned how to move in that bifurcated market, where you're dealing with open source innovation, but also having to answer to customers that want to make sure that things are always up, always secure, and always stable, and it's that bifurcated model that we've relied on, and this is why when we look at open source, we consider our development model, we don't consider our business model, and that's very important. >> Mike, I want to get your thoughts on business architecture and technical architecture. I was having a debate last night at the analyst happy hour with a couple analysts, and I won't say their names, protect the innocent. We made a joke that said if you had to pick a parachute in 10 seconds, Amazon, Microsoft, or Google, which one would you grab? And of course this one analyst said, well it depends, so of course it depends. Just a thought exercise. I mean no one's going to pick any cloud in 10 seconds, but it makes you think, but the depends conversation does matter. Legacy, whether it's open source software or preexisting conditions of the data center or cloud, plays into it, but cloud is a new architecture. There are no walls, there's no perimeter, so how are you guys advising your customers to lay out the business architecture, the technical architecture, what's the playbook? Because a lot of CXOs are like scratching their head. I need a parachute, I need, it needs to open when I need it. I need the cloud now. >> Yeah, our core message to all of our customers in the market at large is really around hybrid, and that applies to both on premise and off premise, but it also means multiple clouds, right, and certainly when we partner with somebody like Amazon, we're focused on how can we build the best possible relationship and the best possible technical and business environment for customers to engage with that partner? And we did this, back in May we announced working with Amazon on Open Shift and we just launched, I think it was last week, Open Shift 3.7 that has service brokers integrated into Open Shift container platform so customers can actually deploy on premise Open Shift and use Amazon services remotely through their Open Shift applications, but our focus in that is to make sure that they have an open environment, just like we did at the beginning with REL, to say it works on all OEMs, now our focus is REL, Open Shift. It's available on all public clouds. We have over 500 CCSPs, our certified cloud service providers, and make sure that it all works together very well and that customers have choice in the end, and that's really what our focus has been. >> And also, I talked to Andy Jassie last week for an exclusive interview. He said the ecosystem is very robust, but even though they might come out with something, people are standing on their own with value, and it's not like they're trying to compete with the ecosystems, which people have concerns about, so that's kind of cool, I get why he's saying that, but I got to ask you the question. Elastic container service has been doing well. Containers are obviously great architecture, agree. We're expecting to hear elastic Kubernetes service, EKS, coming out this week. Some are speculating. I'm not sure if that's going to be announced, but you can almost imagine a Kubernetes version coming out from Amazon. Google's got their hand in it. So is Kubernetes going to become a political hot potato or is it going to maintain its stability? >> We certainly believe that it was and certainly is being validated now as the standard orchestration platform for containers, right, so we chose. >> That's a general sentiment across the whole community? >> Absolutely. Docker had its support for Kubernetes in the last couple of months, right, and so Amazon, if they choose to do so, great, right, we welcome that and engage, just like when we were doing Linux as our primary product platform, we welcomed, you know, Intel, IBM, everyone else to engage in the community, mature the technologies, and frankly we welcome competition when it comes down to it because that's really what makes things better for customers, and choice is very important. >> So you would agree that Kubernetes had a flash point? It's all good right now. Don't meddle with it. So what do we have to look for to make sure that no one tinkers with it too much and take it off the rails? >> Well I certainly hope they do tinker with it, right. >> John: In a good way. >> In a good way, but the community, and what happens in the open source development realm are really, the bad stuff gets weeded out over time, and you know we work with customers in the community, we make sure that where the community's going, we can reflect that to our customer base, so as Kubernetes matures, as the surrounding technologies for orchestration matures, sorry, for containers matures, we want to make sure we're engaged in those projects and working with a customer. >> John: So competition's good for innovation? >> Absolutely, yeah, absolutely. >> John: I would agree with that. >> So let's talk UpStack a little bit. >> Okay. >> Linux Colonel is Linux Colonel arm, X86. My Linux experience is Linux no matter the platform. Kubernetes, I just heard the same thing. AWS, Google compute, in my own data center, Kubernetes, Kubernetes, Open Shift, helps us to do that. Let's talk about the rest of my applications, my monolithic applications that are not designed for traditional, funny I'm saying this term, traditional Kubernetes, okay. How does Red Hat help with this abundant choice in market across cloud providers outside of Kubernetes? >> Well, one, so I think you need to understand that you know, Linux is not Linux is not Linux, right. Anytime you deploy a platform, whether it's Linux or whether it's Kubernetes, you are committing to something that is on a specific release cycle, that may have specific support statements, that may follow specific open source paths, and you need to beware what you're buying into, and I don't mean that from a financial perspective as much as what are you committing your infrastructure? >> Keith: What's my support model, right? >> So absolutely, Kubernetes is the de facto technology in the same way that Linux is the de facto technology, but you have to make sure that the thing that you're buying is something that you're going to be able to support and support your customers for long term, and so that's why, when just as you were saying earlier, you know we look at what's happening upstream, we absolutely follow that path, but we also want to make sure that customers have a long term support model and we can maintain that in a fiscally responsible way over a period of, likely a decade as we do with REL, right, so when customers buy into that, they're buying into not just the core technologies, but they're buying into everything that surrounds it, and so when you look. >> And you guys vetted it too. A lot of vetting goes on. >> Oh yeah, so you know the release engineering that we do, the working with partners on the releases themselves, all surround that, so we test, you know, Open Shift on public clouds, we test it on hardware, on virtualization. >> John: Red Hat stamp of approval means something. That's the bottom line. >> Yeah, it's not lightweight, and having been there so long, I can tell you it takes a lot of people and effort to make sure that that's there, but surrounding Kubernetes, right, all the dev ops capabilities, all of the, you know, integration, with partners like Amazon, those are the things that make the platform sing and allow a developer to come into the platform and immediately start deploying applications, developing and deploying applications, but also with the knowledge that when they develop from the one, it's actually deployed everywhere, and one of the lines that we've actually matured because we believe it strongly is that, you know, containers are Linux and Linux is REL, right, so when you go down this path, you're not just looking at which Kubernetes or, you know, which platform you want to get into, you're actually looking at what Linux am I going to choose? Because it's all one and the same and our focus has been how do we maintain those core principles of security, reliability, scalability, across this for decades? >> Mike, congratulations. You guys have been a great company to watch over the years, going back decades. Now even more, the Red Hat stamp of approval means something. Final question for you. I wanted to ask, it's a personal question. Put your personal industry tech geek hat on. Your friend's a CIO, CXO in a company, he's a friend, runs development shop for the same company, you're best friends. They ask you, what's going on with this Amazon thing? It's scale, all this stuff. How do I make sense of it? What's your answer? >> So Amazon has, I've been working with Amazon since 2007, and the innovation is not just in the technology. It's in how they do the business, the business models that surround it, and to me that means they're building an entire IT environment, right? It's not just about the software or the service they provide. It's how do you interact with your partners, with your customers. So when you look at Amazon, you're looking at the whole environment about how can I best serve my customers through this entire ecosystem? >> John: Sounds like an operating system to me. >> You know, cloud operating system, you know multiple levels can really come in here. >> It's a holistic picture, basically what you're saying. >> Yeah, absolutely. >> Bigger picture. Okay Mike, thanks for coming on the Cube. Red Hat here, inside the Cube here for day one of live coverage of three days of AWS Re:Invent. I'm chatting with Keith Townsend, your host on set one here. Two sets, so much action, so many announcements, so much to talk about, so many great people here at Re:Invent 2017. We'll bring you more after this short break. (upbeat instrumental music)

(upbeat music) >> Announcer: Live from Las Vegas, it's the Cube. Covering VM World 2017 brought to you by VM ware and it's ecosystem partner. (upbeat music) >> Welcome back, we are here on the ground at the VM village live in Las Vegas at VMworld 2017. People buzzing around us here on the ground floor in the hang space, I'm John Ferrier, with my co-host Dave Vellante. Our next guest is Craig Nunez, Chief VP of Marketing at Datrium, Andre Lebosi? >> Lebosi. >> VP Solutions and Alliances at Datrium. Welcome to The Cube, great to see you. >> I've been looking forward to this since I arrived in Vegas, man. (laughter) >> You guys are the hottest start-up right now on the track in Silicon Valley. A lot of people talking about you guys. Want to get this out there. Give you a minute to just talk about Datrium. You guys are a new model emerging, some real pros. David Doman everyone knows about your success with that. Frank's Loop and that went that way. You guys have a great team of XVM guys. >> Craig: Yes. >> So you're working on a really compelling unique thing but it's getting traction so give a minute to explain what Datrium is. >> In simple terms, we are a very different take on conversions. We were conversing VM ware and Linux virtualization even bare metal container hosts with your primary storage we leveraged host Flash for that with secondary storage and archived to cloud. All in one super simple system. And I mean, what a lot of our customers kind of tell us, wow you are a simpler more scalable kind of nutanix that meets rubrik. You're like this love child of nutanix and rubrik. (laughter) They just love it 'cause it's one thing that does it all, super simple. >> A lot of free love going around this generation. (laughter) You got AWS and VM ware bonding together. Google playing in here, it's like the 60's all over again. (laughter) >> Yeah, yeah, not that I remember. >> Tech B generation.6 >> Dave: Summer love 2017. Summer of love, that I'm going to use that. >> Okay love child between rubrick and nutanix. What specifically does that look like? Just clarify one from a product p6erspective. >> First of all there is absolutely zero Call it, HCI cluster administration and so you know growing is as simple as adding a server. Adding capacity, you add those independently as you need it, so it's super economic. Everything runs fast 'cause it runs right out of Flash in your server adjacent to your VM. Again no back up silo, you take care all of your protection and archiving to the cloud with the same console that you're running your business on. So it's in a nutshell what you get. >> So contrast that Andre with the classical hyper-converged infrastructure in terms of how it's scales and how it's managed. >> Yeah I know that's a good question. So if you think about hyper-convergence. It was great, it really changed the years. In many ways it simplified, you remove the no silos that san was creating complexity around scalability or configuring rate, lunz, zoning. All the things that you'd specialize as skill to manage, right? And as you know, as you move along in your journey in the data center, you end up with multiple different vendors. They have different skill sets to manage. So HCI really changed the game in that way. But it also created different challenges for the data center. And we were lucky enough that HCI's only starting, right? This whole thing about converging is only getting started. So one of the first problems that we are dress is being able to scale performance, independent of capacity. So we've hyper-converged for the most part. You know, if you might want more capacity you need to have a computer, if you need a computer, you need more capacity. So we enable customers to go in different directions as needed. We also enable customers to bring their own existing environment into the solution. With HCI generally speaking, you need to buy that specific appliance or that specific HCL and sort of like pour everything in that specific solution. Which kind of becomes a silo as well. So we enable companies to leverage the existing environments and get the same benefits that you'd get from a performance perspective that HCI is bringing. Data locality and relook or read IO's with ...... But at the same time, with your existing hardware. And allows you to use whatever you want. There are other benefits on the resilience side as well. A primary and secondary bad cops so all the primary data, leaves in the nodes in the servers but we have the copy of the data or the back up in what we call a data cluster. So, what that really makes is the solution is stateless on the server side. I don't know if you remember, it's the same timeframe. All the servers were stateless. If a server went down, you would just, no move. You restart the VM's or the workload in a different server. And it's great. With hyper-convergence, now it's always stateful. All the data is actually living on the server. So when you lose a server, you actually putting data at risk and to be cost effective with ACI, you need to do what they call IFTT1 or replication factor two which means I have two copies of the data across the cluster. But it's not very uncommon to have avoid this failure and the read error and then you down to back up and have to restore. You want to rely on the backup as your insurance-- >> Dave: Not as your-- >> Not as then we use it for a day today. >> Yeah. >> So there are a number of different things that we solved that we believe we solved well. That hyper-convergence was not able to solve in its first instance. But you know what? That said, hyper-convergence started this whole journey to convergence is starting. I think I heard Chad Sakeet saying that, there's 440,000 VMX out there. Those are all coming for renewal, no refresh cycles. And now customers that have been able to see what HCI was doing the past three, four years. What worked and what was not working well and look at the use solutions and see how we are addressing those changes. >> Well what about the data protection side. You guys obviously have with Brian and Hugo, a lot of experience as a target. >> Voiceover: Yeah, yeah. >> But you're talking about more. You're talking about a software platform. >> Yeah from a data protection perspective, first of all you've got a platform that's totally unified with your primary storage environment. You then have this wonderful grandularity at VM and V dis level, container level. Great scale, I mean again the chops that the founders bring to that. But one of the things that you know, it think is really powerful. other platforms will talk about, hey we can snap VM's. We can replicate but then they will store them on expensive Flash in those nods and we have a separate device that is cost optimized, globally dedupped compressed on very low cost capacity. That is ideal for all that capacity you need to keep to protect the business. And so bringing that together with the great performance of Flash, this thing really does it all end to end And so it's a different way to think about it. And when we go in, we typically solving problems on the compute primary storage side. >> Voiceover: Uh huh. >> But when we then describe what we do from a backup or archived to cloud perspective, the lights go on and oh my gosh, I simply don't need-- >> John: I got a two for one here. >> Yes exactly. >> Your file system basically you're saying eliminates the need for any separate backup software, is that right, or? >> We do, I would say 80 or 90% of what most people need because the convenience of having your virtualization engineer do it all is so good. Now what I would say is, there are a lot of requirements in the world that we absolutely are going to turn to our pals at Zerto for and Cool Replication. Our friends at Veem, Rubert Cohesidi. All of those guys, we'll team up with because if you want you know back up off platform you know we're daydream to daydream. >> Voiceover: Yeah, right. >> We're not, going to sugar coat that. But there are specific requirements that those guys do that you need. We're going to give them a ring and bring them in. But what we're finding is, most of our customers are looking for ways to just do it all in one spot with a guy running the business, so. >> So I want to back up for a second. We had Brian's founder on Monday and this is an interesting story. I want you to take a minute to describe why you're doing this, because a lot of people, you come in, okay primary storage compute and then that's how I used to operate and then the next guy comes in with his solution. You guys have an interesting perspective with the data domain backup side. Why are guys taking this approach? Explain the uniqueness, why you guys are engaging in this way and what does it mean for the person the customer on the other end. >> Craig: Yeah. >> Is it all in one, is it optional? I mean, the approach is unique 'cause of the founder. >> Craig: Yeah. Just take a minute to explain that. >> Here's the world, the world is hard and getting harder, right? I mean it's just a morning, noon, night and weekend job to keep businesses running with the pace of this economy we're in, right? >> John: The economists are pulling their hair out, basically. >> And the, exactly and so the winner in the market is the one who can bring the simplest approach that gets the job done. And the problem is the bolt on, peace meal solution's that folks are tasked to live with, if you sit down and just draw all of the software stacks and consoles, then you need to put together to go from your virtualization environment. Flash, your backup environment. Replication DR, security, you want to blow your brains out. (laughter) >> John: Hang from the raftors. And again guys, they're trying to get the job done. They're forced to move fast and they're tight on budget. And so if you Ycan bring them the simplest possible solution that solves the problem today and future proofs it going forward, that's what folks are looking for. And there's a lot of nuanced edges to a lot of different solutions out there but at the end of the day show me simple and that wins. >> Alright so, now give me the reactions. That's important to buyers to understand what the (mumbles) is, thank you very much for that. Now the reactions. So you walk into that buyer and say, hey don't blow your brains out. Don't hang from the rafters, we got you here. This is beautiful for you, simple works. Cleans those lines up. What are they reacting to? Are they skeptical, they say you're full of you know what? Do they test the hell out of it? What goes on? >> When you walk them through it, and I'm going to let you take this too. You've talked to a ton of people already. When you walk them through it, they totally get it. Where should Flash be? Right next to the VM on the host. Makes perfect since, it's cheaper there, right? How should you scale, well stateless host. You know, servers that aren't storage nods. You know you lose two and you cluster down. That's not a great situation. >> Voiceover: No problem. >> Voiceover: Yeah. (laughter) >> And so stateless hosts. Any number of servers can fail, you're still going. People love that, they get that. Bringing all the backup capability into that one console. If you've got it, people get it and by the way, a quick demo is kind of icing on the cake. But I mean-- >> Share some color. >> Yeah, no, I've been traveling the last few weeks and talking to customers. I joined Datrium four months ago, and customers understand the proposition and they like. They like that we bring performers. They like that we bring resiliency. They like that it re-utilize the existing investments in the data center. And they like that we do primary and secondary backup. The customers that we're talking to they get it and they understand it and they want to do POC's and move on. >> So you're talking about a lot of VMX's out there. 400,00 plus, obviously that's been a target for hyper-connected verge. Clearly a target for your guys.6 But you're also talking about stateless. And when you think about these emerging cloud native apps, these stateless apps, certain IOT apps that are being developed. Do you see the emergence within your customer base yet? Of those type of emerging applications that aren't staple. >> Absolutely, I mean well first of all. If you look at the public cloud world. Architecturally what those guys have had to do to kind of get latency low and scalable, they think EC2 and S3, you know think of how Google cloud is architected with Kolassas. They have separated that persistent capacity from what's going on, effectively on the nods, the compute nods. And they've done that for exactly for that reason. To scale, low latency workloads as you need as you grow on demand. >> And to make that infrastructure invisible to the developer. >> Absolutely, absolutely and so the approach we're taking is fundamentally to give customers in kind of this hybrid world a way to bring that kind of infrastructure with the simplicity, scale, performance you need and kind of on prim. >> Dave: Yeah. >> And then it's a wonderful map when you take that in hybrid way to public cloud, 'cause you can very easily map that capacity layer to capacity layer, compute to compute. Instead of this kind of crazy dance you have to do with traditional infrastructure. >> That was actually part of it. You look at the VM ware and nowadays there's keynotes and embracing double ups and container. It's all over the place now. Now we're counting the days for how many store engineers or infrastructural engineers who actually need the data center moving forward. But the way system that we said was the architecture while in mind just support very medal containers and provide all of the performance benefits. And really finding a way to run containers and native apps, called native apps across data centers, across clouds. And we're moving in that direction more and more to support (mumbles) integrated and a few other architectural solutions. >> So I want to follow up with that. I mean, everybody talks about cloud. The show it's cloud, cloud, cloud and obviously the big wave. But the, you know this well John being all the time you spent with AWS, Reinvent and Jassie and so forth. The (mumbles) cloud is not VM's. >> Voiceover: Right. >> Right, and so is the conversation beginning to change? And your customer base around more of a developer mindset and what does that conversation look like. >> For the customers that I've been talking they still are very VM centric. There are some discussions about containers and developing, developers embracing containers. Off brand on the &cloud and on premise but they know VM is still pervasive in the prize. >> Dave: So that's where the money is? (laughter) >> That's where the money is, at least for the large majority of -- >> I'm sorry now on premise. And so cloud is just a different vernacular true but-- >> But the reality is though folks have that've got a VM environment. A lot of people we talk to are they have mason container development work going on. >> John: Right. >> And the challenge is though that those kinds of customers wind up having to silo out the infrastructure that supports those. You just don't have the bridge. >> Dave: And with you, you're saying-- >> And the point is yeah, you can have your ESX, VM's, your Linux VM's, your containers running in those VM's or you can have those containers running bare metal. >> Yeah. >> It's all one shared pool of resources like it ought to be. >> And to some extent when I talk to customers, what I figured out is they all starting using containers running VM's. But as soon as they figured out their frame of work, their management, their orchestration, they wanted to move to bare metal 'cause they wanted to have is that additional 10, 15% performance that they get running bare metal. And that I see constantly and talking to Docker and other companies, that's what they see on their customer base as well. >> Voiceover: Yeah. >> So you know where all that is going, I don't believe everything is going to be running in the cloud. I don't believe everything is going to be running in the data center. There'll be a mix of everything. You talk to two customers, they have different hyper-visors, they had red hat visualization, they have VM ware, they have hyperV. And large customers are embracing everything to some extent. >> Yeah, and you want to set it up in a way that you know, you set your policies and you don't care where it is, right? You set it up, and economical way that is lined with you service levels and who care if it's you know, a different prim site, the cloud, which cloud it doesn't matter. It's all your cloud, one cloud, right? >> Guys, thanks for coming on. Andre Leibovici. >> Andre: Yeah. (laughter) >> Got it right? >> Andre: You, got it. >> Greg Nunez, good friend congratulations on the start-up. >> Craig: Thanks. >> Quick, I want to give you the last word here. Talk about the company's status, what you guys are hiring for, where you guys are in the start-up journey. I see great validation with multiple rounds of funding. How many employees? How much revenue are you doing? Tell me the product cost? (laughter) Share! >> We are growing rapidly, 130% quarter of a quarter. We are hiring literally across the board. We can't hire fast enough to keep up with the demand. And for us the number one goal is just getting in front of customers looking for a way out from personal infrastructure. >> John: Sales people, field organization, channel? >> Channel we have a wonderful channel network and absolutely hiring guys to partner up with our channel. Both sales and marketing and yeah we just-- >> Alright, I'll put you guys on the spot because we love big fan of start-ups, certainly ones that have great pedigree in product that's unique again like Utonics in the early days, no one understood it, founders had stayed on course. You guys are on a similar track where it doesn't look like everything else but it's game changing so. Each of you take a minute to explain to the buyer, a potential customer out there, why they should work with Datrium and what you can bring to the table. We'll start with you. >> So first of all, if you are on a ray based infrastructure now, you're dealing with your performance constraints, managing lines, you've looked at a modern approach to convergence and it just doesn't scale, it's not right for your infrastructure, and enterpriser service provider has to take a look at this new approach to convergence we've got. It will change your world, literally. Your business and your personal world. And if you don't take a look, you're missing out. It is different from hyper-convergence. But fundamentally brings your that wonderful X86 based infrastructure that the whole planet is moving to. Got to take a look. >> Andre you can't say the same thing he's said but in your own words what would you say to the potential buyers that are out there. Potential customers, why should they look at you guys. >> Sure, I'll let you all in on the HCI in the simplicatiion of the data center. You know HCI was great simplying data center, removing a lot of the complexity. We do the same things. We do it in a different way. We remove all the nobs and buttons that you have in the data center as an example our infrastructure doesn't require any tuning on performance. So enable this duplication, enable compression, disable original recording. All those features that people, that when you're managing hundreds or thousands of yams, there's no way you know what needs to be enabled and disabled for each one of your workloads. So we lack from simplicity and that's where I met my pace CI peg, it's simplicity. And we do the same thing but we now solve different challenges that HCI also brought into the market. >> Datrium start-up, hot start-up in Silicon Valley and all around the world. Congratulations. It's The Cube coverage here at VMWorld 2017. I'm John Ferrier and Dave Vellante. We'll be be back with more coverage after this short break. (upbeat music)

why from Las Vegas Nevada it's the queue covers AWS reinvent 2016 brought to you by AWS and its ecosystem partners now here your host John Fourier and Stu Mittleman he welcome back everyone we are here live in Las Vegas for Amazon Web Services AWS reinvent 2016 their annual user developer conference I'm John furry with silicon angle Joe and Mike Coast give me a minute with boogie bond it's the cube our flagship program when we go out to the events and extract the signal noise and right now we have some really hot signal it's Andy jassie CEO of Amazon Web Services welcome back to the cube great to see you cube alumni three years in a row now you've been on the cube great to have you back keep the tradition going thanks for coming on it's great to be here and I wanted to congratulate you on your 29th birthday today I wish I'm eighteen actually you're gonna go that way I'll never get over eighteen okay appreciate that appreciate the merry Cammarata bringing the cake out for the team but what a birthday present for us to be at the cube this year because you guys have celebrate your 10 year birthday a little bit younger than I am but the world has changed in the past five years we sat down at your house and in your sports bar talked about the future and that's all on Silk'n angle comm and Forbes magazine calm but you guys have to set the agenda and 32,000 people up from 19,000 it's a significant uptick in attendance the enterprise cloud market is changing you guys are disrupting yeah your thoughts and on what's happened since Tuesday night with James Hamilton laying up a secret sauce of silicon brows back it's not being touched by anybody else efficiencies scale yeah well you know for us it's it's unbelievable to see how many people are here a reinvent I as I said in the keynote yesterday we weren't sure the first year that we could get 4,000 people to come so to have 32,000 people here and 50,000 more on our live streams for the keynotes it's just it's really inspiring and you know our teams spend most their time thinking about new new customer experiences new features new capabilities that enable our customers to build more for their customers and then operating the services and for our team to have a chance to be here with all of our customers for a week and just see how excited people are about what we're doing the platform I mean you really feel it when you're here it's a movement and it's a movement because it allows builders to build customer experiences much quicker than ever before and change their businesses you guys got a spy nose juice got some specific questions on some specific points but I want to get your thoughts on the Amazon what I call spring in your step for the first time at reinvent have seen some bravado but more you know confidence around thinking a position Vernor Vogel said a Mediate that sometimes doesn't understand things or hey why do I want to get a lower price by doubling upfront enough seeing the sales guy you mentioning a little bit of Oracle and but mainly it's the themes around the old garden and a new way so I want you to take a minute to explain your view on this new way this new environment because you're comparing interesting old ways of doing things how people buy from IP suppliers how technology is coded deployed and this new way where the game is all new ballgame everywhere scale changes in how people buy our changing it can you share your thoughts on this new way yeah well that's a I mean there's so much that we could share in that area but I you know I think that if you think about what's different about a company like Amazon and a business like AWS relative to the companies who've been providing infrastructure for the last few decades there are a lot of differences but I'll list a few you know the first is I think many companies talk about being customer focused very few walk and I think Amazon in every business including AWS is extraordinarily customer focused everything we do starts with the customer moves backwards from there 90% of our roadmap but what we build is driven by what customers tell us matters and the other 10% we try to listen to a customer's of trying to articulate and then read in between the lines and invent on their behalf I'd say most of the big technology companies the old guard our competitor focused and that could be a successful strategy they can wait and see what others are gonna do and then try to one-up them it's just not ours we tend to be customer focused second thing is we are pioneers you know we we hire builders who look at customer experiences and see what's wrong with them and then figure out how to reinvent them most of the old guard technology companies have lost their will and their DNA to invent and so they acquire most their innovation and that can work too but I think in a space as dynamic as the cloud which is the biggest technology shift in our lifetime you are much better off with the partner that has the most functionality that's iterating the fastest the most amount of customers the biggest ecosystem who's had the vision for how these things fit together from the start and then the third thing I'd say is that we are unusually long-term oriented you know I think one of the standard old guard tactics is that when a deal is to be done at the end of the quarter or the end of the year they show up at your doorstep and they harass you till you sign a deal only to be heard from again a few years from now well you actually need to sign a new deal that is not the way that we pursue our business we're trying to build a business and instead of customer relationships that lasts all of us and so we operate we treat customers we think long term and we iterate in a different way than you see the old guard do and you wrote the business case for creating AWS I think if somebody you know wrote the case study today they you talk about the flywheel you talk about the effect that scale has on your business I think many look at it is your scale and that flywheel allowed you to kind of compress margins in the industry overall well you know you know right the next business case that was scale let's kind of say if margin and you know you talked about how the race to zero wasn't it beyond kind of ancho piece of scale what is the advantage that you have with the experience and the scale and you know is there a new flywheel that goes beyond what we've been talking about well you know I think that there will be multiple successful players in this space because the market segments is something like AWS addresses are trillions of dollars worldwide but there are gonna be 30 it's gonna be a small handful and it's in part because scale really matters and in part because the amount of functionality that you need for people to choose you as their primary infrastructure technology platform is massive and we have a lot more functionality by a large amount than anybody else now I think that if you look at a couple of the key criteria and reasons that we've been successful one of them is that we just have iterated so quickly I mean I think that the rate at which we deliver new capabilities for customers is pretty unusual I mean every day on average customers wake up and they have three new capabilities they can take advantage of just by virtue of being on the platform but we're also on top of just delivering quickly we're innovating at a really rapid rate I mean look at what we did in building the no sequel database DynamoDB they would build look at what we did in building our own database engineer Aurora which is the fastest growing service in the history of AWS we just made Postgres compatible yesterday look at what we announced on the IOT side yesterday with green grass and with snowball edge look at what we did even with snowmobile where it's been impossible for companies to move large amounts of data look at how many instances we have and then look at us bringing FPGA instances to the client the pace of raw innovation on the AWS platform is very unusual and I think what that does that creates its own flywheel where because you don't have to spend a hundred million dollars upfront to buy an infrastructure platform you only pay for what you use when you make the choice of who you're gonna partner with is your primary infrastructure platform you want the platform the the most capability because it allows you not just to move your existing apps but to be able to launch new ones and any any imaginable business idea you have so one of the advantages Amazon has had both on that the dot-com side and now in the it beside it your data you've got a lot of information I think about what actually said that's part of a new flywheel that you're gonna be doing how much of that data is just what Amazon's gonna be able to drive and how much will that kind of spread to the ecosystem and your customers is there data exchanges or how do you look at data well we certainly have a lot of data and a lot of models and a lot of deep learning capabilities and we expose several of those to the AI services we housed yesterday but I think one of the significant flywheels you'll see over times that so many customers are storing their data inside of AWS because they love our storage services and our data stores that they're gonna want to use that data and they're gonna want to layer on top of it all kinds of analytics services whether it's batch whether it's you know various hadoop applications whether it's real-time processing of streaming data they're gonna want to run their data warehouse off of it and they're gonna want to run machine learning models as well as their AI models on top of it and even though I think loads and loads of companies will use the AI services that we've released yesterday I think a lot of the biggest machine learning that's gonna happen is company's own data companies have huge amounts of data that they want to get better signal from and a lot of that data lives on AWS and they're gonna use a lot of the analytics and machine learning tools that we have to get more value from it and you want to ask you specifically around the cloud competition we've said on the queue I think for you so at the first main event that we were here it's not a winner-take-all to winner take most the multi cloud conversations been going around and that's been kind of confusing people as well one of my goals this year at the reinvent was to look at the VCS dig deep once all the parties talk to entrepreneurs I wanted to find out from the canary in the coalmine the startups the developers what their their sense was they all love AWS because you you had a great service for them but now as the competition comes in Microsoft in particular spending a lot of dough trying to lure them in through their ecosystem Google mean they just have some tech not a lot of Salesforce these terms want to build their own sales forces and might not want to compete with Oracle or or Microsoft together monsters Salesforce massive commission incentives all kinds of mechanics that they're doing in the day and that product may or may not be as strong as you guys what's your message to that group of people that want to win with you what do you say to those guys on how do you look at that and what are the how do you respond to their feedback and what's the outlook for them because that's a big question of people's mind is I love Amazon I want to win with them but I might be lured by well you know I think if you look at the startup market segment the vast majority of startups continue you choose AWS as their provider and in fact you could argue an even larger share than before and the reasons are a few fold number one at the end of the day what startups want is they're trying to build incredible businesses and they're often trying to build businesses where the idea never existed before and to do that well you need the broadest functionality you can get Native US has much broader functionality with anybody else there's also a much larger ecosystem around our platform so if you actually want to use other software in your business you want to be able to use it on the infrastructure technology platform that you choose and again many more info system providers in the ad avails platform but they also are building applications where even though they're startups these security and the availability those applications are a big deal and there's just a lot more maturity in the AWS platform because we've been at it a lot longer you can't learn some of those lessons until you get two different elbows of the curve and as Gardner has said because AWS has several times the aggregate size so the next 14 providers combined we just have a different scale on a different set of lessons now we also help our startups and we go to market with our startups and we have get in front of our customers we have a lot of enterprise customers on the platform we're super interested in the new technology and the new offerings that our startups have and we continue to put them in front of saying at obviously Google obviously that's on the cube actually this morning Google doesn't really have a sales force now not known for customer engagement they're known for technology and I kind of hinted that Amazon doesn't have many sales guys but you do apparently a lot of simple you talk about the number how many sales people what's the field organization look like and he clarified that potential misconception that Amazon is just a self-service cloud well when we launched AWS in 2006 we had two sales people and in fact one of the first calls our first sales person made was to Tom McCaskill is the CEO SmugMug who has been just an incredible customer of AWS and provided so much valuable feedback and the ten and a half years we've been to the market but since then we have a very large field team I mean this is this is not a small team it's a very large field team with a lot of sellers and a lot of solutions architects and a large process yeah I mean it's it's it's you know we don't disclose the exact number but it's thousands it's it's a significant team sellers solutions architects professional services training certification it's a big team and we're continuing to grow at a very rapid rate yeah Andy you know that rapid rate is amazing to watch because you know you've spoken to us before about you look for builders you look for people that you know want challenges and keep learning I've talked to you know a few friends this week that have joined Amazon and they said the culture is different in a good way and I want you to talk about kind of that Amazon ethos there's you know a lot of companies have like mission statements you guys have leadership principles that are up on your website I hear they are you know quoted quite regularly you know in in daily life and it's you know very different can maybe there's a little bit of insight on that well 14 leadership principles and I think they've been the single most important reason that we have been able to scale as fast as we have and scale across the world the way we have without losing our culture and you know there are so many of the leadership principles that I think are really interesting you know one of them has to do with hiring and developing the best and we are really vigilant about not lowering the bar when you're trying to hire as many people as we are at Amazon and AW is a big temptation is just a lower the bar to allow you to move quickly and that's always a mistake when you're trying to build great products for customers I like you know I'll give you a couple the leadership principles I like one is the leadership principle that's being right a lot and when we first started when we rolled out the leadership principles people thought being right a lot meant that it had to be their idea they had at the start that she went with the people would get dug in and argue for their idea but being a leader and being write a lot means that you get to the right answer regardless of whose idea was at the beginning and regardless of how many times you change your mind along the way great leaders change their minds when they get new information so I really like that leadership principle I also really like have backbone disagreeing commit and so what that leadership principle is about is we don't just make it an option we expect employees if they disagree with the direction we're headed regardless of seniority of anybody in the room that they speak up and say we're going the wrong direction we're doing the wrong thing for customers even if we end up making the same decision we're gonna make before we end up with more rigor and the decision and people can argue too you know as long as they want as respectfully as they as they can in making the point and we're at the end of the day a truth-seeking culture so you know that old adage about two people look at a ceiling and one says it's ten feet and the other says it's 14 feet and they say okay let's compromise it's 12 feet what's very rarely twelve feet and so when you have a truth-seeking culture like we have it encourages people to disagree and debate with one but then once we make a decision yeah the disagreeing commit means that even if it's not the direction you were advocating everybody has to get him seeking argument you could say well if the customers not involve which version of the truth the customer has to calibrate that right I mean from here Stanfill ultimately the cut I mean we try to get customers involved the decisions we're making and we we speak to cus for input from customers yeah and we get input all the time but there are also times when you're making these decisions where you can't perfectly know we're trying to make what we think is the right decision for customers we get it right a lot of the time and sometimes we don't and if we don't then we'll learn from it sign here I gotta get this in but I gotta ask you a personal question do you get worried that you guys might get too cocky I mean right now you're on a great run rate the traction is amazing for me personally see it it's pretty stuff you know proud about you guys do this I'm a big fan as you know we're customer but you do a great work how do you guys not get too cocky what's that ethos what do you guys what do you say the customers would say it a little too big for your britches and Ian team how do you calibrate that I think that a lot of that has to do with the culture of the team and I think if you look at the culture of this team it is not a cocky team it's not an arrogant team it's a customer focused team and we I mean I think we're pretty thrilled with how things have gone the first 10 and a half years I don't think any of us would have had the audacity to predict yeah that would be where we are but I think we all know that the next 10 years are gonna have even more innovation and changed in the first 10 years so that's what we're really focused on and you know one another one of our leadership principles says that you know great leaders don't believe that their body odor doesn't stink you know and that's really intended to say that we recognize that there's all kinds of things that we can be doing better yeah and we have to be a constantly learning organization and that's the way we think about our business we have a lot of management style content on silca Daniel my third part of my three-part series with Andy final question I want you to summarize your you know really well done you had some nice clever confident in there the whole superpowers a bombastic claim with some that validated with some meat good very clever I like how you did that how would you summarize the keynote did the boy look down to what you were trying to accomplish what were you trying to convey what was the core theme of your keynote yesterday morning yeah the core theme really is that with the cloud with AWS builders have capabilities that were never before available to them on premises or elsewhere and with those capabilities or superpowers it allows them really to take on any technical challenge that they're facing and to build and implement any idea they can dream up and you know that was really the theme and then you know sprinkled in there we had a few announcements the 14 to be precise yesterday and then some customers who I think you know I think are really vivid illustrations of really reinventing their businesses and building customer experiences that weren't easily possible before doing it on top of AWS well congratulations on all your success I know it's still early I know I know you don't get to coffee knowing knowing you firstly after after the little sitting down with you and reinventing is about pioneering so you got to be humble and congratulations Andy Jesse the CEO of Amazon Web Services here in the cube I'm Sean for Ace to many are you watching Silicon angles the cube we right back with more live coverage of ABS 2016 reinvent after this short break

>> Narrator: Live from Las Vegas, Nevada, it's theCUBE covering AWS re:Invent 2016. Brought to you by AWS and its ecosystem partners. Now here is your host, John Furrier. >> Hey, welcome back everyone. We are here live in Las Vegas for AWS Amazon Web Services re:Invent 2016, their annual industry conference. The center of the universe in the tech world, 32,000 attendees, broke all records. It grew from 16,000 last year, almost double. I'm John Furrier with theCUBE. We are here getting all of the signal from the noise. Three days of wall-to-wall coverage. Our next guest Ramin Sayar, who's the President and CEO of Sumo Logic. Welcome to theCube, welcome back. >> Very well, thank you much. Nice to be here. >> So, when did you move over to Sumo Logic? >> So interestingly enough, it's two years this Friday. >> Okay so give us a quick update and then I want to dive into the relationship with Amazon. You guys clearly doing big data early. In the wave of the Hadoop is big data, but those other methodologies. Quick history of what you guys are doing now and status of the company. >> Sure. So the company is about seven years old. We were founded, born, actually bred on AWS. We don't have a single server in our place and interesting enough, the premise of founding Sumo, seven and a half years ago, actually was to build a multi-tenant SAAS-based machine data analytics platform to start to address a lot of the security, but also the operational issues that customers were facing. Our founders actually came from a security background and realized that rear-view mirror technologies and looking at historical aspects wasn't good enough. So low and behold, they made a big bet at that time, six years, almost seven years ago, to build exclusively on AWS and today, on an average day, we're ingesting about 70 terabytes of data, we're analyzing over 100 petabytes of data on AWS. >> So talk about the specific implementations. Obviously using all of the services, is there any particular ones, obviously storage, Glacier, you must be using some Glacier, but is it mostly S3, is it ElasticBox Storage? >> S3, C2, we use, obviously, some of the other services, but more importantly, we enable all of the services that AWS provides for their customers to be seamlessly supported by Sumo. So when you log into Sumo or you create a brand new account you give us your credentials, everything from Kinesis to Lambda, to EC2, to ElasticBox Storage, all of those are out-of-the-box that are supported. >> And you guys had a great booth last year. This huge booth, right in the front, with sumo wrestlers. I mean that stole the show in the age of Twitter and Instagram. The share of voice on that was pretty significant. >> Yeah I think there's an underpinning tone there, which is we want to wrangle your data, right. And no one knows big data more than a sumo. And we have earned the right now, after seven years in with 100 petabytes of data that we're analyzing every single day, to be a lot more prescriptive for customers in terms of how to approach the way they build, run, and secure these modern apps. >> We've been following you guys in context of the big data space. I don't think we've had a lot of briefings on the analysis side. I think we should get you guys certainly plugged-in with George Gilbert, our analyst, but what's interesting is the predictive marketing and then a lot of certain verticals were really in early on big data and you guys were there. What's evolved since then? Because now you're seeing, with AWS certainly, you've got streaming, you got redshift doing very well, the services that they've added on over the past few years has been pretty significantly and kind of right in your wheelhouse. >> Yeah. >> John: So what new use-cases are popping up now? What are you guys doing for business? What's some of the profile customers? How are they using Sumo and what's the value for them? >> Great question. So a few things we're seeing. One is with the availability of all these services that Amazon is providing, the cycle time for releasing new code and overall applications is becoming much less. And as a result there's not just a need to move to continuous integration or continuous deployment, it's about continuous updates. So the challenge that brings for a lot of our customers they need real-time visibility. We refer to that as continuous intelligence. So our platform is predicated on the fact that we have near real-time analytics streaming engine that as data is coming in, you can get visibility for your developers, you can get visibility for your operations teams, and you can get visibility for your security compliance teams. So let me give you a couple of examples. You asked for customers, Huddle is one of the customers they spoke about today. >> John: Jeff Frick and I love Huddle. >> Football videos, but you know they support Premier League, they support Aussie rule football, I mean there's a lot of sports right? And so they're uploading video and there's a great service not for just college or high school athletes, but professional athletes to understand their game and analyze their games. So underpinning that, actually Huddle's using Sumo to run their service, to manage their service. Not too distinct from Domo or Qualtrics or other customers like SalesForce, Adobe. We have customers like Land-O-Lakes. We do a lot in media and entertainment, gaming, online retailers. So what do they all have in common? They're either migrating to the cloud, one. Two, they're doing digital transformation or some sort of digital application initiative. Three, they need some way to get visibility real-time into their applications and services from a security perspective, but also an operational perspective. >> What's the driver for customers right now? Because one of the things we hear all the time is people are trying to account for their data. So analytics is kind of like this, well data warehouse was this old mentality, but now smart people started putting into mainstream, but now there's more of a data accountability aspect. The metadata, really valuable. How are customers doing that with you guys? 'Cause I can see them getting their toes wet with Sumo and then getting up and saying "Wow I can use some prescriptive analytics, predictive marketing", whatever the use-case could be, but now you gotta start thinking where's the data coming from and where's it accounted for. Is there a data economy? >> So what's interesting about that, you mentioned metadata, and that's what it's about. Our system, we ingest any type of structured or unstructured data. And we actually analyze a lot of the metadata. In fact, like I mentioned earlier, we're analyzing over 100 petabytes every single day on AWS. And so what we're able to actually help our customers do now is be much more prescriptive and provide insights as to the 1300 customers that are on Sumo, the 74% of them that run on AWS, about a quarter of them are using things like Lambda. Another two-thirds are using EC2, but how? And what types of queries are they doing? And what types of services are they building with Docker containers, or Mesosphere, or others of that type of services? So now we've actually entered a position where we're actually the trusted advisor for a lot of these companies in moving to the cloud, building new, modern apps because we've been doing it for seven and a half years. >> Yeah. >> Ramin: And so the metadata starts to become important because we actually put out a recent survey we called "The state of the modern app". And that whole report was premised on the 100 plus petabytes every single day over a six month period, how are customers using AWS, what services are they using and not using, and what should you consider? The number one thing we found in that report was only half of the customers, of which 74% of the 1300 run on AWS, were actually doing anything with CloudTrail with respect to security. That means the other half are potentially vulnerable to breach. >> John: Yeah. >> John: What percentage? >> 50%. >> So half were exposed. >> Half are exposed >> John: No audit at all. >> Ramin: No audit at all. So now we're actually proactively notifying them saying, "Hey listen for your type of deployment you're using these types of common services. Others similar to you should use the following." >> That brings up a good point. So let's unpack that because what that brings up is a lot of people get into data and they hear all this stuff in the news. Oh big data driven and you know they can drink the Kool-Aid and go "Okay I buy that vision." But there's some pretty urgent issues on the table that people got to deal with in the enterprise and or if they're cloud native and that is security. You mentioned it. I mean that has become such the low-hanging fruit for data analytics. So Splunk being very successful with that. Cyber, we talked to Teresa Carlson earlier. Their public-sector business is exploding, certainly with the CIA and others. I'm sure you guys got some of those clients. But that highlights that yeah that's all fine and dandy to do some nice stuff over here to figure out recommendation engine for this or that, when you got security holes out there. Are you seeing that on your end too? >> Well interestingly enough, that's how we started. We started with the goal of providing analytics and more importantly we wanted to democratize analytics initially for security in the cloud. And so, we actually before Amazon Web Services really built things like PKI or public key encryption or things around encrypting data transfer, we had built that into our system and service. So what we actually are able to do now is not only show how we can encrypt the data and do all this services, but show them how they should actually start to use CloudTrail and how they should architect these modern apps, and what things they should be concerned about from a vulnerability and risk point of view. One of the newest products that we just announced is in early-access around threat vulnerability and threat intelligence because now we're getting a 360 degree view for a lot of our customers because you saw today the hybrid announcement right? That's going to be there for a while. What Sumo allows a lot of our customers to do is from their on-premise data center to their CDNs to all their SAAS applications like SalesForce, or WorkDay, or DropBox, or Box to all those things running on ASH or Amazon and the like, we provide a whole 360 view. And we can actually now >> John: So you get real-time >> John: as well on that? >> Real-time. >> Ramin: So our system and service is predicated on a real-time data streaming engine. >> Yeah so you guys can coexist in multi-cloud world. >> Absolutely. >> John: That's your premise. >> Ramin: No pun intended right? (laughing) >> All right, let's talk about contextual data and what companies should do and why they should get you guys involved in the use-cases of going forward, planning. A lot of conversation here at re:Invent is AWS 2.0. They go on to the next level, Enterprise, a little bit more complicated than say Cloud Native greefield apps. How should they be thinking about their data? You've been doing this for seven years in AWS and you probably have clients that aren't on AWS some are, some aren't, that's the makeup. But generally what's the architecture? What should be holistic concept for CIO, CXO, or down to the practitioner level, what's the guiding principles? >> It starts with a fundamental principle of form follows function. And you know this is a sports analogy, but if you're not formed right, you're not going to function right. So a lot has to do with a conscious decision customers need to make in terms of how they're going to structure their teams and whether they're going to move to a true dev-ops model where they're pushing hourly, daily, weekly, and whether they need to or not for certain applications versus others. And then it goes into function in terms of how they start to architect their applications. What services they need to use. And we've actually learned that over seven and a half, eight years ourselves, seven which years were running on AWS. And so the advice often times we give to a lot of our customers is understand where the mission critical workloads that you need to migrate, categorize those. Second is, which of the greenfield apps you're building and why. And what type of retention and security policies do you need and these are the common services you should probably consider with AWS. And then third is, the other set of applications you don't really care about, leave them for now. Focus on your expertise here. >> It's really triaging the sequence or order of app rollout, basically. Well thanks for coming on theCube. Really appreciate Ramin. I want you to take a minute to close us out and talk about for the folks watching, what's new with Sumo Logic? Why should they be working with you? What's the pitch? What's new? What's relevant for you guys? >> Great, so obviously we're a big data company, but more specifically our service and our strategy was predicated on democratizing analytics. And so we refer to that as continuous intelligence. And so as this digital transformation is taking place, and we're seeing it here, we're seeing it across every part of the businesses, we are well suited for every company that's got either a migration effort or an active, new project going on AWS. And so we can provide a simple, secure, highly scalable machine data analytics platform as a service and that's what Sumo is all about. >> And your business plan for the next year is what? Knock down more customers? Do more product development? All of the above? Channel? What's the strategy? >> So good question. So on one hand we're introducing a new product. We've kind of hinted to some of that today with some threat intelligence. Second is, we just introduced a new product about a month ago that we're starting to monetize. It's about semi-structured data. And third is, we're gonna start to really expand our routes to market and channels. One of the things that we participated in recently with Amazon is the new Amazon SAAS marketplace program. We're in with a handful of companies that participate in design and development there. And so that allows very seamlessly for customers to come try, buy, and decide whether they go month-to-month, semi-annually, or year. >> Well that will accelerate the operational nature of your product. >> Absolutely, but that's the way we sell today. In fact, our whole business model is predicated on land and expand. You're probably familiar with this whole notion of cohorts. >> Yup. >> And that dollar retention. Well the median, if you look at PACCrest and Morgan Stanely and the other firms, tend to be 103 to 105. Best in class tends to be 110 to 115. We've been well north of 160 for 19 straight quarters. >> Well Jassie said that on his keynote today. The bombastic days of handwaving are over. If you don't see it right there, the value, in front of you, don't buy it. >> Don't buy it. >> It's really the marketplace's vision. >> That's marketplace vision and that's what we're all about at Sumo Logic. >> Ramir Sayar, President and CEO of Sumo Logic. Congratulations on your success. Continued success. This is theCube bringing you all the action live in Las Vegas for re:Invent 2016, I'm John Furrier. Be right back with more after this short break. You're watching theCube.

>> Announcer: Live from Las Vegas! It's theCUBE. Covering Edge 2016. Brought to you by IBM. Here's your host, Dave Vellante. >> Welcome back to IBM Edge everybody. This is theCUBE's fifth year covering IBM Edge. We were at the inaugural Edge five years ago in Orlando. Marc Linster is here and he's joined by Lenley Hensarling. Marc is the Senior Vice President of Product Development. And Lenley is the Senior Vice President of Product Management and Strategy at EDB, Enterprise Database. Gentlemen, welcome to theCUBE. Thanks for coming on. >> Male Voice: Thank you. >> Okay, who wants to start. Enterprise Database, tell us about the company and what you guys are all about. >> Well the company has been around for little over 10 years now. And our job is really to give companies the ability to use Postgres as the platform for their digital business. So think about this, Postgres is a great open source database. Great capabilities for transactional management of data. But also multi-model data management. So think about standard SQL data but think also about document oriented, think about key-value pair. Think about GIS. So a great capability that is very, very robust. Has been around for quite a few years. And is really ready to allow companies to build on them for the new digital business but also to migrate off their existing commercial databases that are too expensive. >> What's the history of Postgres? Can you sort of educate me on that? >> Sort of the same roots back with System R, where DB2 came from, Oracle came from. So Berkeley, that's where the whole thing started out. Postgres is really the successor to Ingres. >> Dave: Umhmm. >> And then it turned into PostgreSQL. And it has been licensed under open source license, the Postgres license since 1996. And it's a very, very vibrant open source community that has been driving forward for many years now. And our view is the best available relational and multi-model database today. >> It's the mainspring of relational database management systems essentially >> Marc: Yeah. >> is what you're saying. And Lindley, from a product standpoint, how do you productize that, open source. >> Open source really, companies that have a distribution of open source for database and operating system, whatever the open source company most people are acquainted with, is Red Hat and Linux right. And so, we do the same thing that they do but for Postgres database. We take the distribution, we add testing, we add some other functionality around it so you can run Postgres responsively as Marc likes to say. So high availability, capability, fail-over management, replication, a backup solution. And instead of leaving it as an exercise for a customer, who wants to use open source, we test all this together. And then we validate it and we give them a complete package with documentation and services that they can access to help them be successful it. >> So if Michael Stonebraker were sitting right here, I say Michael, what do you think about Postgres? I'd say I had to start Vertica because we needed a new way. Yet, sort of PostgreSQL, is the killer remains the killer platform in the industry, doesn't it? >> Male Voice: Umhmm. Why is that? It's interesting when you talk to guys like Stonebraker, it's sort of dogma almost. But yet, customers, talk with their wallet. >> And it is, >> He did a very, very nice job of architecting it. It is a database that is extensible. The reason we add the first JSONB or document oriented implementation in the relational database space is because it was designed to make it easy to add new capabilities, new datatypes, new indexes, et cetera, into the same transactional model. That's why we have JSONB. That's why we have PostGIS. That's why we have key-value pair. So it was really well architected. And when you think about who else, not just Vertica has taken this engine >> Dave: Yeah. >> It is in Netezza, it is in a bunch of other. >> Dave: Master Data. >> Lenley: Greenplum. >> Greenplum yes. So it's a really robust architecture. Very, very nicely designed. It just does the job and it does it really well. Which is, what you want a database to do, right. It's not that exciting but it's really stable. It really works. The data is still there tomorrow. That's what really the requirements are. >> And to translate a little bit, Marc mentioned PostGIS, which is geo spacial capability for the Postgres database. And so we distribute that along with Postgres and test it so that you know it works. And he mentioned H-Store, so that's how you can actually store internet of things data really well into Postgres. And we talk about SQL, noSQL databases, so they're document databases. And the ability to have personalization at the same level you can in a document oriented database but in a structured SQL database are the kinds of things that have been added to Postgres over the years. Again, it's because of the basic architecture that Stonebraker put in place as an object relational database. >> It's so interesting to look at the history of database. Talk about Stonebraker, he's been on a number of times. It's just fascinating to listen to one of the fathers of this industry. But 10 years ago, database was like such a boring topic. And now it's exploded. Now you got Amazon going after Oracle. Oracle fighting the good fight. So many noSQL databases coming in. SQL becoming the killer big data app if you will. >> Male Voice: Umhmm. >> Why all of a sudden did database get so interesting? >> What happened was, application models changed. Led by Facebook, led by Amazon and Google. They said, let's refactor the applications and let's refactor the way we handle storage. >> Dave: Umhmm. >> And that led to the rise of the polyglot of databases is what a lot of people are saying. You have fit for purpose solutions and you may have three or four or five of them in your overall architecture. One thing about Postgres is, we're able to, because of the datatypes support that Marc mentioned, fit into that well. We don't try and do everything so if somebody says, I'm going to use Mongo for data capture, or I'm going to use Cassandra for capturing my internet of things data. We have what we call foreign data wrappers in the Postgres world. We call them just Enterprise DB Adapters but to Mongo, to Casandra, to Hadoop and can do bidirectional data there and just keep that data at rest over there in the other world. But be able to project relational schema onto it. We can push our data into those. We've got a great use case we've been talking about with a customer who had over a petabyte of data. And in the past what you do is, you'd go buy an expensive archiving solution and add that to it. Now, you just use Hadoop distributed file system. Push the data off there as it ages and have a foreign data wrapper that allows you to still query that data when it's out of your basic operational dataset. And move forward. >> Can I call that a connector or? >> Lenley: Yeah, a connector, that's not a bad idea. >> And it's interesting because If you guys remember Hadapt, probably. [Male Voices] Yeah. Yes. >> They came out, they were the connector killer. >> Male Voice: Umhmm. >> And it failed. >> Male Voice: Yeah. >> Seems like connectors are just fine. >> Male Voice: Yeah. >> And one of the really interesting things is, we call it data federation right. With philosophy here is, leave the data where it is. There are some data that should live in Hadoop or Cassandra. If I'm doing an e-commerce site with transactions and click streams, well, the click streams really should live in Hadoop. That the night natural place for them. The transactions should be in a transactional database. With the foreign data wrapper, I can run queries without moving the data, that will allow me to say, well, before you bought the brown teddy bear, which pages did you look at? >> Dave: Yeah. >> And I can do that integrated system and I can do a fit for purpose architecture. And that's what we think is really exciting. >> And that's fundamental to this new sort of programming or application models. >> Male Voice: That's right. >> The one that you were talking about is moving five megabytes of code to a petabyte of data. As opposed to moving data which we know has gravity and speed of light issues and so forth. >> Thank you for that little brief education. Appreciate it. So let's get into your business now, your relationship with IBM. What customers are doing. You mentioned IoT data so talk more about your business and your relationship with IBM and what you guys are doing for customers. >> There are a couple of things. We mentioned Oracle. And there are all the new databases. And then there's your, dare we say, legacy, proprietary databases as well. And people are looking to become more efficient in how they spend. We've done another thing with Postgres. We've added Oracle compatibility in terms of datatypes. So we support all the datatypes that Oracle does. And we support PL/SQL, they're sort of variant of stored procedure language. And implemented a lot of the packages that they have as well. So we can migrate workloads from Oracle over into an open source based solution. And give a lot cost effectiveness options to customers. >> Dave: Steal. This is a way that I can sort of have Oracle licensed database licensed and maintenance avoidance. >> Lenley: Yes. Yeah. >> Where possible, right. >> Where it makes sense. Where it makes sense. >> Obvious my quorum, I keep, but let's face it, the number one cost component of a TCO analysis of an Oracle customer is the database license and maintenance cost. >> Male Voice: That's right. >> It's not the people. One of the few examples I can think of where that's the case. There's always the people cost. [Male Voice] That's right, that's right. IT is very labor intensive. But for an Oracle customer, it's the database license. Cuz they license by Core. >> Male Voice: Yup. Cores are going through the roof. >> Male Voice: That's right. It's been great for Oracle's business. Although, wouldn't you agree, Oracle sees the writing on the wall that the SAS is really sort of the new control point for the industry. You see the acquisition of NetSuite and competition with Workday >> Male Voice: Yup. >> and the like. >> But the database remains the heart of the business. >> And really it's movement to the cloud, both private cloud and public cloud. And so we've been doing work there. We've had public cloud database as a service solution on Amazon for, what, [Marc] Four years. >> Four years, Marc. And have gained a lot experience with that. And were running that sort of running a retail, you can license the database and we'll provision it there. And so what we've done recently is change our perspective and said, let's put this into hands of customers. And let them standup their own database as a service. But also do it in a way that they can choose what workload should go to Amazon and what workload might go to their private cloud, built on open stack. And be able to arbitrage that if you will. Because they now have a way to provision the databases and make a choice about where to put it. >> So that's a bring your own license model that you just talked about? >> Bring your own license model or >> Are you in the Marketplace and, >> We're in the Marketplace in Amazon, where we can supply it that way. But customers have shown a preference for bring your own license. They want to make the best enterprise deal they can with a vendor like us or whomever else. And then have control over it. >> Amazon obviously wants you to be in the Marketplace. I won't even mention but I talked to some CEOs of database companies and they say, you know, we're in the Marketplace but we get in the Marketplace, next thing you know, Amazon is pushing them towards DynamoDB or you know. >> Male Voice: That's right, that's right. >> Now Amazon's come out with Aurora and Oracle migration and you know the intent to go after that business. Amazon's moving up the stack and you got to be careful. >> They are. But the thing about Amazon is that, they're a pure play in the cloud company. >> Dave: Yup. >> And all of the data shows that it's like a mix, it's going to be a hybrid cloud. Half the company in this world [Dave] Not Angie Jassie's data >> Eighty percent of the people in the cloud are going to be on-prem, still continuing their journey through virtualization. >> Dave: Yeah, that's right. >> Let along going to the cloud. But we want to be something that let's them put what they want in the public cloud and let's them manage on the private cloud in the same manner. So they can provision databases with a few clicks. Just like they do on Amazon. But do it in their data center. >> You doing that with Softlayer as well or not yet? >> Lenley: Not yet. >> Marc: Not yet. >> We've built this provisioning capability ourselves. And it came out of the work we did putting up databases on Amazon. >> So what are you guys doing here at Edge. Edge is kind of infrastructure show. Database is infrastructure. >> We're talking about our work with Power. >> Power is a big partner for us. Power is I think very, very interesting for our database customers. Because of the much higher clock speeds and the capabilities that the Power processor has. When I'm looking at Power, I get more oomph out of a single core which really for a database customer is very, very interesting. Because all databases are licensed by Core. >> Dave: Right. >> So it's a much better deal for the customer. And specifically for Postgres, Postgres scales very well with higher clock speeds. So by having, let's say, by growing performance, not by adding more cores but by making the individual cores faster, that plays very, very well to the Postgres capabilities. >> Okay, so you are a Power partner, part of that ecosystem that IBM is appealing to to grow the OpenPOWER base. And what kind of workloads are you seeing your customers demand and where you're having success? >> Across the board. Database is mostly infrastructure capabilities so there's a lot of interest that we're seeing that, for all kinds of applications really. >> What's the typical Power customer look like these days? You got some Oracle, you got some DB2, you guys are running on there, what's the mix? Paint the picture for us. >> I think the typical Power customer is the typical enterprise company. And, [Dave] Little bit of everything. >> It's a little bit of everything. But one of the key things is that, people are also looking at what they've got and the skills they have in place. You were talking about people cost right. [Dave] Yeah. >> And their understanding of management. Their understanding of how to manage the relationship with the vendor even. And then saying, look, how can I move into the new world of digital transformation and start my own private cloud options and things like that in an efficient way. That makes efficient use of hardware I have in place and has a growth curve and new hardware that's coming out that fits my workloads. >> Dave: Umhmm. >> And the profiles that Marc was talking about. >> And also the resources. Which is very interesting when we look at these new digital applications with Postgres. Because you can do so much in Postgres from geographic information systems to document oriented to key-value. But you can do that with your existing developers through existing DBAs. They don't need to go to school to learn a new database. And that's also a very, very, interesting capability. So you can use your existing team to do new stuff. [Male Voice] Yup. >> What's happening in IoT, what problems are you solving there and where's the limit? >> Sensor data collection. >> Lenley: Yeah. Real interesting because sensor data tends to come in all different forms. We have customer who collects temperature sensor, temperature data. But the sensors are all sending different data packets. So because we can do document oriented or key-value, we can easily accommodate that. In the old days with the relational model, I had to do all kinds of tricks to sort of stuff all that into a relational table. My table would be almost empty at the end because I'd have to add columns for every vendor et cetera. Here, now I can use put all that into the same format and provide it for analysis. So that's a real interesting capability. >> And it's interesting too because we've got really strong geo spacial data support. And the intersection of that, with IoT is a big deal. They track your iPhone, they know where we are. They know what's going on. That's sensor data. They know which lights in which building, which you know, louvers that are controlling HVAC are malfunctioning or not. They want to know specifically where it is, not just what the sensor is. And some of that stuff moves around. And it gets replaced in a new place in the building and such. So we're well setup to handle those types of workloads. >> What's interesting, when IBM bought the weather company, [Lenley] Yeah. >> And they thought okay great, they're getting all these data scientists and weather data, that's cool. They can monetize that but it's an IoT play, isn't it? [Male Voice] Right. Right. >> Talk about sensor. >> It's reference data. It's reference data for other company specific IoT plays. To have a broader set of sensors out there in their region and understand what's happening with weather and things. And then play that against what their experience is, managing new building or manufacturing processes, everything. >> So what's the engagement model. I'm a customer, I want to do business with you. How do I do it, how do I engage? >> Well, a lot of our businesses direct with us. Others through partners. And then a lot of customers come to us because they want to get off legacy systems. But really, what they do is, once they understand the database and the capabilities, they say, okay yeah, you can do the Oracle stuff. But what I'm really going to do with you is my new things. Because that's really exciting and it helps me kind of put a lid on the commercial license growth. So maybe I'm not going to get off it, but I will stop growing it. So I will start doing my new stuff on Postgres. Whenever I modernize something, Postgres is going to be my database of choice. If I already open up an application with its whole stack, this is one of the changes I'm going to make. And then the database as service, is very, very interesting. So these four entry vectors and what happens is, quite a few customers after a short time when they started with project or applications, they end up making Postgres as one of their database standards. Not the only one. But they make it one of the database standards so it gets into the catalog and every new project then has to consider Postgres. >> It's interesting, there's a space created as Microsoft sort of put all their wood behind the era of becoming a competitor to high end Oracle. And with this last release, they probably are on there, arguable. But they've also raised their prices too. And they've made the solution more complex. So there's this space that was vacated for like a ton of workloads and Postgres fits in there just about perfectly. We see enterprise after enterprise come to us with a sheet that says, now we're going to get some of this noSQL stuff. We're going to keep Oracle or DB2 over here for these really high end things. Run my financials, run my sales order processing, my manufacturing. And then we got this space in here. We got a slot for relational database and we want to go open source. Because of the cost savings. Because of other factors. It's ability to grow and not be bound to, hey, what if the vendor decides they're going to go for a new cooler thing and make me upgrade. >> Dave: Right. >> And I want to stay there and know that there's still being an investment made. And so there's a vibrant community around it. And it just fits that slot perfectly. >> You got to pay for that digital transformation and all these IoT initiates. You can't just keep pouring [Male Voice] Somehow. >> down to database licenses. [Male Voice] That's right. >> Tell me, we have to leave it there. >> Thanks very much >> Male Voice: Alright. >> for coming to theCUBE. >> Thanks so much. >> We appreciate the time. You welcome. [Male Voice] Enjoy it. Keep it right there buddy. We'll be right back with our next guest. This is theCUBE. We're live from IBM Edge 2016, be right back. (upbeat music)