(upbeat music) >> Welcome back to re:Invent 2021. You're watching theCUBE. My name is Dave Vellante. We're really excited to have Anthony Lye here. He's the Executive Vice President and General Manager of Public Cloud at NetApp. And Jonsi Stefansson as the CTO and VP of cloud at NetApp. Guys, good to see you. >> Same to you. >> Likewise. >> It's great to be back. >> You know, Anthony. Well so, we saw each other virtually at the AWS Storage Day, the big announcement, we're going to talk about that. But I go back and I said this to you several years ago, we were sitting, you know, some after party and you said "We are going to transform NetApp. We are going all in on cloud." We've seen NetApp transform many, many times. This is probably the biggest in history. >> No, I think you're absolutely right. I think, you know, I can't believe it, but you know, it will be five years for me in February. And in those five years, I think we really have done things that nobody expected. And I think we've proven to our existing customers, to our competitors, and now with Amazon, to a whole new set of customers that our intellectual property that we build and the acquisitions that we've done have made a lot of sense. I think we've demonstrated this wonderful concept of symmetry. Customers now understand and believe that a dollar invested in an App, wherever it is on premise or in the cloud is a dollar that moves wherever they want it to move and progresses as their own businesses progress. >> So Jonsi, for the latest announcement that you guys made to integrate ONTAP into the AWS cloud, you had to do some deeper integration, right? It wasn't just wrap your stack and Kubernetes and shove it into the cloud. But can you just talk about what you had to do? What the collaboration was like? >> The collaboration with AWS has been fantastic. It literally took two and a half years, you know, from the point where we decided to agree on the design principles, how we were actually going to deliver this as a service, the integration into every single aspect of AWS, you know, whether it's the console, the FSx, API, the integrations, to all the additional services that AWS has, like RDS, like Aurora, like the SageMaker, like EKS and ECS. And I mean, we are just getting started with the integration points and the collaboration and the teamwork. I would call it teamwork more than a collaboration. The teamwork with all these teams and maybe especially at name who was the leader of the storage sort of a unit in AWS has been fantastic. >> Dave: Yeah. Well so, this is the 10th re:Invent. This is the 9th year we've been here. We've seen a dramatically different cloud than 10 years ago, 15 years ago, and a different storage business. I'm not even sure. I mean, I don't know. I didn't even think about it as the old storage business anymore. Essentially, you're building a cloud on top of clouds. A super cloud if you will. >> Anthony: Yeah, I mean. I think, look, the strategy was, as I said, very, very simple to us, which was, you know, fundamentally companies, you know, run their applications on the basic primitives of compute storage and networking. And the gold standard for file was always ONTAP. And I think what we did, which I think was unique was we didn't just, as you said, throw it onto a cloud, stick it in a virtual machine and tell you, the customer "There. It's ONTAP just as you remember it." We reimagined it. And we architected it to be a cloud service. So it's elastic, it goes up and down. You can change the performance at runtime. And what we really did with Amazon was we wanted to make it a fully managed service. We didn't want people to think about versioning and patching. We wanted to remove all of that and we wanted people to take as much or as little as they needed. And we, and Amazon, we chose that we should own the responsibility for the availability of the service. And we should maintain the service ourselves so that customers of ONTAP can benefit from the solution. But in many ways, customers who've never been ONTAP customers can now take advantage of an enterprise grade file system and all the great things that it does without having to understand how it works. >> And explain why that's important for customers because people, they go, "Wow, you got S3." but it's very simple. Get, put, right? You don't have the full stack of a mature ONTAP. Please explain what that means to customers a little bit. >> You know, file systems are very important things. You know, we basically use them in our work environments every single day, you know. Within your sort of, you know, your Mac book, you have a home directory and sub-directories and files, very elegantly layout applications and layout infrastructures in ways that object repositories cannot. You know, aside from block and file. Sorry, from file and object, you of course, have block storage. And so, file plays a very important role. IDC has file growing at almost twice the pace of object now on the public cloud systems and, you know, file has about 13% of the overall storage market and it's growing. And I don't see any reason why file won't be as big on the Amazon cloud as the S3 has been. >> Dave: So you guys, go ahead, please. >> Yeah. I mean, you also have to take into account that the S3 object storage offerings of AWS is an integrated PaaS in our solution. So that's how we are actually doing automatic tiering. So you actually reap the best of both worlds, where you get the cost management of putting it in object storage, but you get the performance and the data management capabilities that is pretty unprecedented. You know, we are the first store that's offering that can actually do cross-region replication seamlessly by retaining deduplication and compression. But we also play a lot with, you know, block and object storage. So when Anthony was talking about how we've actually delivered this as a service, and this is sort of from our design principles, we are basically delivering this as a software, as a service, because more than an infrastructure as a service, because the stock that we are actually deploying, or the secret sauce of ONTAP, it's a very vast software stack that we are delivering, on top of AWS infrastructure. So I would always call it or categorize it a little bit more than software as a service, rather than infrastructure as a service. >> But it's even more than that, if I'm right, because it's cloud pricing, right? >> Jonsi: Yes. >> So it's not, you're not preying. I mean, when I buy Salesforce, I got to sign up for three-year deal. That's not a consumption-based model. >> Yeah. >> Oh, I think Amazon, you know what Amazon did uniquely and brilliantly was, it retailed technology and it's what makes Amazon so good, is that they choose to sort of simplify things. And when they find benefits as a retailer, they pass them on to the customer and, you know, there's this sort of pay-as-you-go business model, it's really good for the customer. It makes us work harder because, you know, you have to retain your customer sort of every 10 minutes. And that's something that, you know, as you said, with enterprise software and even some of the early SaaS vendors, that's not how it works. And so Amazon has forced us all to be very, very attentive to our customers. >> Dave: And I'd love to talk about what that means for the on-prem business, but if we have time. But you guys won Design Partner of the Year, what's that all about? First of all, congratulations. >> Anthony: Thank you. There's a lot of ISV design partners. You guys came out number one so congratulations on that. What's that all about? Explain what that entailed and how you got that. >> Yeah, I'll say a few words. Maybe Jonsi can add. I mean, the first thing of course is, you know, I S V stands for Independent Software Vendor. So, you know, it's always great because most people would say, "Well, NetApp is on-premise storage hardware." >> Dave: Of course, yeah. >> Which really, we've not really ever been an increasingly with demonstrating that we are a software company and we operate at cloud speed. You know, I can't really take the credit. I would give it to Jonsi and the engineering team. Maybe Jonsi, you can explain, you know, what moral about the award and why I think we were selected. >> So, I mean, I think it says a lot that this is the first time AWS has ever allowed a third party company to be this integrated into their console, into a support ability systems. You know, we make fun of this, me and Anthony all the time, because when we started this, down this path, everybody at NetApp said, "Guys, you're wasting your time." This is why AWS has the marketplace, but we didn't want to go. We already had the marketplace and we wanted to be able to connect to all these associated services and do it in the manner that, you know, this was a true collaboration of engineering teams for a long time to actually deliver the service on both sides so the credit, of course, will always go to the engineers on both sides, even though I designed it, I didn't code it. So, I think that, that alone, being the first to do it in AWS ever. I think we deserve that award. >> So just for our audience, to be clear, we're talking about FSx, ONTAP in the cloud, in the AWS cloud and kind of dance around that. But so that was announced, I guess, in September? >> Anthony: Yes. >> Right? >> Anthony: September, 2nd. >> What's the uptake been like? What's the reaction? >> Unbelievable. >> I'll bet. (laughing) >> No, no, I mean. >> No, I believe it. >> Better than we ever dreamed of. >> Yeah. >> The number of customers, I'm sure I'm not allowed to say the number of customers, but we asked and the fact that, you know, 60% of those customers have never been NetApp customers before, but they see the value in the data management capabilities that we are bringing to the market. >> Dave: So it exceeded expectations and your expectations were probably pretty enthusiastic. >> They were high. >> Yeah. >> I mean, Amazon is on the record. I was with Ed earlier on today, recording a piece and Ed, you know, was very clear that it's one of the fastest growing services now on AWS. You know, it turns out that, you know, the customer base, I think recognizes the, not just the need for a file system, but the uniqueness and capabilities that ONTAP provides, you know, to those customers in how they manage their business and transformations. And so, you know, to be sort of behind the console, to be sort of behind the Amazon CLI and the Amazon API, you see the world very, very differently, you know. I think the Amazon marketplace is a fantastic capability, but I'll tell you, you know, being a core part of the AWS service itself that they sell, that they support, that they bill for. It's a nice place to be. >> So, SaaS company. You're talking to the language of application development, Kubernetes, right? What do you think this means for the future of NetApp specifically, but also generally the on-prem storage business and the storage business in general? >> Well, we just announced our second quarter earnings today and what's happening is our cloud business is growing like crazy. We generated $388 million of ARR and the growth rates are, you know, astronomically high. That is increasingly helping our on-premise business to grow. You know, the nice thing about being in primarily, in the storage and data business is people aren't deleting many things. And the rate at which they're generating information is just accelerating. So, actually the confidence that we give the customer by demonstrating a sort of a cloud first, a sort of principles of all the cloud is actually giving customers to buy more on premise. So, we really don't mind. We are, our job much like Amazon's, is to have this customer obsession and you can't really go wrong, if you just keep asking them what they want. >> Yeah, if you can do so profitably, you're going to be reinvest in your business. Guys, we've got to go. >> Yeah. >> Love to have you back. >> Thank you. >> And you been quite a transformation. You said you're going to do it. You're doing it. So, well done to you. Five years in the making. Okay. This is Dave Vellante for theCUBE, the leader in high-tech coverage. Keep it right there. We'll be right back from AWS re:Invent 21. (upbeat music)

(upbeat music) >> Welcome back to re:Invent 2021. You're watching theCUBE. My name is Dave Vellante. We're really excited to have Anthony Lye here. He's the Executive Vice President and General Manager of Public Cloud at NetApp. And Jonsi Stefansson as the CTO and VP of cloud at NetApp. Guys, good to see you. >> Same to you. >> Likewise. >> It's great to be back. >> You know, Anthony. Well so, we saw each other virtually at the AWS Storage Day, the big announcement, we're going to talk about that. But I go back and I said this to you several years ago, we were sitting, you know, some after party and you said "We are going to transform NetApp. We are going all in on cloud." We've seen NetApp transform many, many times. This is probably the biggest in history. >> No, I think you're absolutely right. I think, you know, I can't believe it, but you know, it will be five years for me in February. And in those five years, I think we really have done things that nobody expected. And I think we've proven to our existing customers, to our competitors, and now with Amazon, to a whole new set of customers that our intellectual property that we build and the acquisitions that we've done have made a lot of sense. I think we've demonstrated this wonderful concept of symmetry. Customers now understand and believe that a dollar invested in an App, wherever it is on premise or in the cloud is a dollar that moves wherever they want it to move and progresses as their own businesses progress. >> So Jonsi, for the latest announcement that you guys made to integrate ONTAP into the AWS cloud, you had to do some deeper integration, right? It wasn't just wrap your stack and Kubernetes and shove it into the cloud. But can you just talk about what you had to do? What the collaboration was like? >> The collaboration with AWS has been fantastic. It literally took two and a half years, you know, from the point where we decided to agree on the design principles, how we were actually going to deliver this as a service, the integration into every single aspect of AWS, you know, whether it's the console, the FSx, API, the integrations, to all the additional services that AWS has, like RDS, like Aurora, like the SageMaker, like EKS and ECS. And I mean, we are just getting started with the integration points and the collaboration and the teamwork. I would call it teamwork more than a collaboration. The teamwork with all these teams and maybe especially at name who was the leader of the storage sort of a unit in AWS has been fantastic. >> Dave: Yeah. Well so, this is the 10th re:Invent. This is the 9th year we've been here. We've seen a dramatically different cloud than 10 years ago, 15 years ago, and a different storage business. I'm not even sure. I mean, I don't know. I didn't even think about it as the old storage business anymore. Essentially, you're building a cloud on top of clouds. A super cloud if you will. >> Anthony: Yeah, I mean. I think, look, the strategy was, as I said, very, very simple to us, which was, you know, fundamentally companies, you know, run their applications on the basic primitives of compute storage and networking. And the gold standard for file was always ONTAP. And I think what we did, which I think was unique was we didn't just, as you said, throw it onto a cloud, stick it in a virtual machine and tell you, the customer "There. It's ONTAP just as you remember it." We reimagined it. And we architected it to be a cloud service. So it's elastic, it goes up and down. You can change the performance at runtime. And what we really did with Amazon was we wanted to make it a fully managed service. We didn't want people to think about versioning and patching. We wanted to remove all of that and we wanted people to take as much or as little as they needed. And we, and Amazon, we chose that we should own the responsibility for the availability of the service. And we should maintain the service ourselves so that customers of ONTAP can benefit from the solution. But in many ways, customers who've never been ONTAP customers can now take advantage of an enterprise grade file system and all the great things that it does without having to understand how it works. >> And explain why that's important for customers because people, they go, "Wow, you got S3." but it's very simple. Get, put, right? You don't have the full stack of a mature ONTAP. Please explain what that means to customers a little bit. >> You know, file systems are very important things. You know, we basically use them in our work environments every single day, you know. Within your sort of, you know, your Mac book, you have a home directory and sub-directories and files, very elegantly layout applications and layout infrastructures in ways that object repositories cannot. You know, aside from block and file. Sorry, from file and object, you of course, have block storage. And so, file plays a very important role. IDC has file growing at almost twice the pace of object now on the public cloud systems and, you know, file has about 13% of the overall storage market and it's growing. And I don't see any reason why file won't be as big on the Amazon cloud as the S3 has been. >> Dave: So you guys, go ahead, please. >> Yeah. I mean, you also have to take into account that the S3 object storage offerings of AWS is an integrated PaaS in our solution. So that's how we are actually doing automatic tiering. So you actually reap the best of both worlds, where you get the cost management of putting it in object storage, but you get the performance and the data management capabilities that is pretty unprecedented. You know, we are the first store that's offering that can actually do cross-region replication seamlessly by retaining deduplication and compression. But we also play a lot with, you know, block and object storage. So when Anthony was talking about how we've actually delivered this as a service, and this is sort of from our design principles, we are basically delivering this as a software, as a service, because more than an infrastructure as a service, because the stock that we are actually deploying, or the secret sauce of ONTAP, it's a very vast software stack that we are delivering, on top of AWS infrastructure. So I would always call it or categorize it a little bit more than software as a service, rather than infrastructure as a service. >> But it's even more than that, if I'm right, because it's cloud pricing, right? >> Jonsi: Yes. >> So it's not, you're not preying. I mean, when I buy Salesforce, I got to sign up for three-year deal. That's not a consumption-based model. >> Yeah. >> Oh, I think Amazon, you know what Amazon did uniquely and brilliantly was, it retailed technology and it's what makes Amazon so good, is that they choose to sort of simplify things. And when they find benefits as a retailer, they pass them on to the customer and, you know, there's this sort of pay-as-you-go business model, it's really good for the customer. It makes us work harder because, you know, you have to retain your customer sort of every 10 minutes. And that's something that, you know, as you said, with enterprise software and even some of the early SaaS vendors, that's not how it works. And so Amazon has forced us all to be very, very attentive to our customers. >> Dave: And I'd love to talk about what that means for the on-prem business, but if we have time. But you guys won Design Partner of the Year, what's that all about? First of all, congratulations. >> Anthony: Thank you. There's a lot of ISV design partners. You guys came out number one so congratulations on that. What's that all about? Explain what that entailed and how you got that. >> Yeah, I'll say a few words. Maybe Jonsi can add. I mean, the first thing of course is, you know, I S V stands for Independent Software Vendor. So, you know, it's always great because most people would say, "Well, NetApp is on-premise storage hardware." >> Dave: Of course, yeah. >> Which really, we've not really ever been an increasingly with demonstrating that we are a software company and we operate at cloud speed. You know, I can't really take the credit. I would give it to Jonsi and the engineering team. Maybe Jonsi, you can explain, you know, what moral about the award and why I think we were selected. >> So, I mean, I think it says a lot that this is the first time AWS has ever allowed a third party company to be this integrated into their console, into a support ability systems. You know, we make fun of this, me and Anthony all the time, because when we started this, down this path, everybody at NetApp said, "Guys, you're wasting your time." This is why AWS has the marketplace, but we didn't want to go. We already had the marketplace and we wanted to be able to connect to all these associated services and do within the manner that, you know, this was a true collaboration of engineering teams for a long time to actually deliver the service on both sides so the credit, of course, will always go to the engineers on both sides, even though I designed it, I didn't coat it. So, I think that, that alone, being the first to do it in AWS ever. I think we deserve that award. >> So just for our audience, to be clear, we're talking about FSx, ONTAP in the cloud, in the AWS cloud and kind of dance around that. But so that was announced, I guess, in September? >> Anthony: Yes. >> Right? >> Anthony: September, 2nd. >> What's the uptake been like? What's the reaction? >> Unbelievable. >> I'll bet. (laughing) >> No, no, I mean. >> No, I believe it. >> Better than we ever dreamed of. >> Yeah. >> The number of customers, I'm sure I'm not allowed to say the number of customers, but we asked and the fact that, you know, 60% of those customers have never been NetApp customers before, but they see the value in the data management capabilities that we are bringing to the market. >> Dave: So it exceeded expectations and your expectations were probably pretty enthusiastic. >> They were high. >> Yeah. >> I mean, Amazon is on the record. I was with Ed earlier on today, recording a piece and Ed, you know, was very clear that it's one of the fastest growing services now on AWS. You know, it turns out that, you know, the customer base, I think recognizes the, not just the need for a file system, but the uniqueness and capabilities that ONTAP provides, you know, to those customers in how they manage their business and transformations. And so, you know, to be sort of behind the console, to be sort of behind the Amazon CLI and the Amazon API, you see the world very, very differently, you know. I think the Amazon marketplace is a fantastic capability, but I'll tell you, you know, being a core part of the AWS service itself that they sell, that they support, that they bill for. It's a nice place to be. >> So, SaaS company. You're talking to the language of application development, Kubernetes, right? What do you think this means for the future of NetApp specifically, but also generally the on-prem storage business and the storage business in general? >> Well, we just announced our second quarter earnings today and what's happening is our cloud business is growing like crazy. We generated $388 million of ARR and the growth rates are, you know, astronomically high. That is increasingly helping our on-premise business to grow. You know, the nice thing about being in primarily, in the storage and data business is people aren't deleting many things. And the rate at which they're generating information is just accelerating. So, actually the confidence that we give the customer by demonstrating a sort of a cloud first, a sort of principles of all the cloud is actually giving customers to buy more on premise. So, we really don't mind. We are, our job much like Amazon's, is to have this customer obsession and you can't really go wrong, if you just keep asking them what they want. >> Yeah, if you can do so profitably, you're going to be reinvest in your business. Guys, we've got to go. >> Yeah. >> Love to have you back. >> Thank you. >> And you been quite a transformation. You said you're going to do it. You're doing it. So, well done to you. Five years in the making. Okay. This is Dave Vellante for theCUBE, the leader in high-tech coverage. Keep it right there. We'll be right back from AWS re:Invent 21. (upbeat music)