>> Live from Orlando, Florida, it's theCUBE covering Microsoft Ignite. Brought to you by Cohesity and theCUBE's ecosystem partners. >> Welcome back, everyone, to theCUBE's live coverage of Microsoft Ignite. I'm your host, Rebecca Knight, along with my cohost, Stu Miniman. We're joined by Patrick O'Reilly of O'Reilly Venture Partners based in San Francisco. Thanks so much for coming on theCUBE, Patrick. >> Thanks for having me. >> So, you are a serial entrepreneur now working as a VC, what are you doing here? Tell us why you came to Ignite. >> Yeah, well selfishly on the VC side we have a few of our portfolio companies here that have booths, and I wanted to kind of hear what people are asking, you know, why they're interested in the companies and how we're framing, you know, those companies to the end users. I think these type of events are really good to unlock hidden potential, or things that people can tell you that you wouldn't actually have thought about, yeah. >> Yeah, so Patrick, you know, I've known you for a number of years. Usually see you at the opensource shows. Microsoft, you know, publicly very embracing opensource. You know, they love Linux, partnering with Red Hat, even you know, partnering is a lot of things that Microsoft does. They were working with VMware. What's your viewpoint as to how you see Microsoft and the opensource world, and how about this ecosystem? Is this a vibrant ecosystem that, you know, VCs are investing in, or is it just that there's companies of yours that, you know, this is part of the story. >> No, and I think historically we've had the, you know, build versus buy, you know, kind of way of looking at it, but when I typically think of Microsoft, it's more people building glue, you know, code to kind of connect things together, and you tend to have blinders on and not think about what opensource components you can use. You know, you look for like what company has a solution you can buy, or license or OEM, and I think that's changing, you know, over time. You know, Microsoft does an amazing job with developers of giving them very easy to understand languages and amazing tooling, and along with that the documentation and the training, so I kind of felt like you came into development one of two ways. You either were like on the Microsoft track and using the cookie cutter approach, you know, to doing things and getting certified on something, or you were opensource, you learned the scripting language and you just looked at what you can cobble together in the opensource world, and there wasn't a lot of crosspollination, but now I see that those walls kind of dissolving. People are willing to mix and match. >> Yeah, it's interesting, you know, some places I've seen Microsoft, a lot in the Kubernetes show, so you know, first got to know you you were at Kismetic, you know, really the first company around Kubernetes that we knew. You know, I know you're doing a lot of different things but we love your viewpoint on, you know, anything on Microsoft in that space, as well as just what you've seen, you know, as a watcher of the Kubernetes space these days. >> Yeah, I mean I've been... You know, if I step back from Kubernetes, you know, back to like the Apache Mesos and the Mesosphere days, you know, if you rewind all the way back there you kind of had to do a lot of education of like, "What do you mean 'containerization?' "I have VMs, why do I need containers?" And now that we've gotten past that and people actually understand the value of containers, like having an orchestration system in place that works and works with everything, you know, is obviously more important than ever, and it's... I really credit the CNCF and the Linux Foundation for what they've done to kind of bring standards around Kubernetes and shepherd the project, and I think that, you know, the fairly recent announcement from Google that they're fully trusting, you know, CNCF to be the shepherd of that is huge, and it gives a framework for people, like Gabe at Microsoft, to work with, you know, some of the staff at Google, and like, in a collaborative way and move it forward for everyone, and I think, you know, historically containers made a ton of sense on Linux, but now that we have Windows server, you know, supporting containers and theCUBE working, you know, on Windows, I think in the 111... Or sorry, 113 release we'll have full Windows server, you know, support in Kubernetes, like that'll be huge. And just a quick aside, like the reason I even kind of honed in on containers and thought it was interesting is the average server utilization is still so low, but we're not really trained as technologists to care about that, and you know, we're really good at building data centers and tucking them off in places where no one sees, but when the average server's taking like... It's like running a hairdryer on high, you know, for electricity and then they run so hot you have to cool it. Like, we're really not helping the environment, so I think if we can move towards containerization, move towards efficient utilization of our hardware, you know, it'll be better for everyone, not just this ecosystem, so... >> So, talk to, tell our viewers a little bit about your portfolios and your portfolio companies that are here, and how they fit into the ecosystem. >> Yeah, so the one I'm most excited about, or shouldn't probably say it that way, I'll reframe that-- >> Can't have favorites, they're all your babies. (laughs) >> Yeah, they're all my babies. (laughs) >> But Ziften Technologies is great. I think their integration with the Windows, the vendor ATP, you know, advanced threat protection, you know, tool is great. They focus on the Mac and the Linux components and give you that same kind of pane of glass on the Microsoft side to see those endpoints, and like their utilization of AI, like they have an upcoming release where they're using AI to do things, and traditionally in that space it's been like the AB vendors, you know, doing everything and you had kind of, "Here's our signatures, "we're going to scan against those signatures," and it's a creative use of AI now to, like, look for just anomaly detections. These are the things we haven't seen before. Not sure what it is but it looks abnormal, and those are the kind of like spin-outs of companies that I'm looking for, too. Like I want to see people doing more meaningful things, you know, with AI. I think if we look at Azure and what they're offering now, like I don't need to have a bunch of data scientists at my startup. I can implement computer vision just using what off-the-shelf components, you know, from Microsoft and you know, Azure. I can do video indexing, you know, using their services. Like, if I rewind just back three years I would've had to have a team of like four data scientists. They'd be reading whitepapers, they'd be implementing code that like sort of half works, and they would probably take half a year to train some models to get, like, moderate results, and now in a matter of minutes, you know, I can use this off-the-shelf stuff. >> Yeah, it's fascinating, I think back to, you know, we were pretty early at theCUBE at watching the whole big data trend, and back then it was like, "Okay, we're going to "take that two-year project and you know, "drive it down to six months," and now we talk in the AI space is, you know, how can we drive that down even more. In big data there was concern, everything seemed to be custom. In AI we're starting to get to more templatized solutions, rolling out for a lot of industries, and it feels like it's taking off a lot faster than that space is, and I know there's a lot of investment going on in the space, and a lot there, so... Anything in particular, you know, what excites you, what makes a good, you know, AI investment versus, you know, there's just so much happening out there. >> Well, you know, I... I struggle with the name AI a little bit. >> Yeah, no, no, I understand, yeah. >> I'm working on a talk, and you know, I kind of like don't, I don't enjoy the artificial aspect of it because it's really just intelligence, and you know, right now it's a buzzword people are throwing into everything when really they mean, "We use an algorithm." (laughs) You know, it's not truly AI, but when we get to cognition we get, you know, to, you know, someday if we have quantum supremacy we'll have, you know, systems that actually can maybe have a consciousness, you know, and decide things. That's where I'm interested, I'm looking... Like on the devops side I'm looking for people using AI to get away with repetitive tasks. Like I would love to see, you know, someone have a system where it's like, "Hey, we've noticed, you know, 90 times "this week this guy's done this exact "same thing, you know, 99% the same way." Like, let's automate that away. You know, we've been really good in the space to kind of treat infrastructure like code, you know, and be able to tear things up. Like I mean, I've been incredibly excited to see, like just in my career, how we went from, "Okay, you're going to do something meaningful on the web. "You need to build a data center. "You need to, you know, get a bunch of servers, racks," and then you pay all this equipment and oh, by the way, 18 months from now it's going to be obsolete and you're going to have to spend money again, to where now I can just, you know, get some credits to start up in the cloud, you know, try things out and do like really meaningful things. So, just looking for anyone on AI that's going to do something that moves the needle. >> Yeah, now that, yeah, just on the terminology piece, I've lived through the cloud wars and the argument over what was and what isn't, so it's just, you know, the shorthand for this wave that we have there, where AI or ML, or you know, IBM has some interesting terms that they want to call it. We understand that there's intelligence that I can do with software, a lot of machine-to-machine things that are going on, and it's not a lot of, you know, shouldn't be a lot of heavy lifting by people to go in there. Oh, wait, I can train something, I can learn what's happening, so... >> Well, I wanted to ask when... I'm sure a lot of entrepreneurs ears are pricking up when they hear that you want to make these meaningful investments. What is it that you look for in a company, is it... In terms of the leadership team, in terms of any track record, what sort of makes your eyes light up? >> So, I try to go to as many conferences as I can, because I feel that's where, you know, the hallway track and I can meet people. I can see, you know, their talks, see what they're passionate about, so what I'm really looking for is investing more in the people than in the idea, because startups can always pivot, and you look at some of the greatest companies out there, they were pivots from, you know, a slightly different model and they realized that, "Oh, we should go chase down this other thing." So, to me, I'm looking for people that are doing something exciting where they are already, looking to make the leap. You know, for example, like you know, the Spinnaker team or people that do something, you know, like... You know, like if etcd wanted to move off and be a separate company, like things like that where they've done something, they've proven it, and now they want to go start a company around it, and I think right off the bat, like if you've built some interesting technology that people are starting to use you have a decent revenue stream just from support, you know, of that and helping those end users, and I think, you know, with O'Reilly we do something a little different than other people. Like I focus mostly on seed investment, very early stage. Our typical check size is around $500k, and I actually allow people to take us off the cap table and just pay us back. Like you know, I've done nine startups in my career, and it's... Fundraising is one of those things where you only get good at it once you don't need it anymore, (chuckles) and I felt the pain of being on that side of the desk and I want to be in the position where, you know, we can write the checks and not try to, like, have a lot of governance, not try to take a board seat, not give you down pressure, you know, on what you're doing but really be additive. I think moving forward I would love to be in the position where we can help incubate, you know, a lot of companies because we've found that, you know, you all kind of go through, every company goes through the same process like, "Now, we need a real CFO because "we need financial projections." Like, being able to, like, provide those services for portfolio companies where they don't have to go spend their resources chasing that down. >> I'm curious how much some of the big players, or just the gravity of what's happening in the space that you're looking at, so obviously we're here at the Microsoft show, but Google, Amazon, a lot of activity going on and we can call it AI or what you will, VMware even, Oracle, SalesForce, how much of the big players defining and you have to build around them, versus you know, we look at Kubernetes is supposed to make things independent, to be able to be opensource and be able to build solutions, you know, regardless of what platform they're on. >> Yeah, I mean, I think we're living in a world where people have a lot of choice, you know, and we look at even, like we take the example of cloud providers. Like, as long as I don't get vendor lock in and use, you know, their specific features, like I can move around to different cloud providers, I can now say I want to negotiate a better price here and migrate over, and I think just with any of the technologies, like trying to work in ways where companies can work together and be additive, I think that's where we actually move, you know, move down the field. I don't know what analogy's appropriate to use, but you know, I feel like there's a lot of really interesting stuff that we should be doing, and making... Every company doing a slightly different version of the same thing I don't think, you know, makes sense. Like, you know, even silly things like as we mature. Like, you know, back in the day everyone used to have broadcast television. We built all these antennas, we got all this range, you know, and then we moved to digital and we didn't need those antennas, we didn't need that range, so they started decommissioning them, but then companies came along and they're like, "Well, wait, now we have this "unlicensed spectrum we can use." So, now they're using it for internet. You know, you can get 20 megabit connectivity out to a rural farm where now they can put some cheap IoT sensors, and like, do really meaningful things with low cost technologies, like those are the things I'm interesting in. You know, so kids that want to cobble together, you know, IoT sensors and come up with a way to use, you know, what they have in rural areas, and like, and have technology actually help people in a meaningful way, and I think those are a lot of very viable startups, you know, in that space. I do think we live in a world where every company's going to end up graduating into one of the camps, be it, you know, SalesForce, Google, you know, Microsoft, but in that innovation spike, like when they're first starting improving out the companies I think they have a ton of choice, you know. >> You described a very beneficent approach to how you think about VC. Do you think, how would you describe the VC landscape right now? You said you want to be able to just incubate great ideas and help these young companies when they are not good at fundraising and they don't have the smooth, slick deck that will really impress the bigger VC firms. I mean, how, what's wrong with the VC landscape today and what else are you doing to make it better? >> Well, I think the incentives are a little off. You know, I can speak for myself, like when I was... You know, when I was looking to raise VC money and my previous companies, like you know, you get these great offers from people, but then you talk to other entrepreneurs and you're like, you know, I'm not going to call anyone out by name, but you're like, "Well, how is this VC's firm served you," and you start hearing of ways that it was additive, but also kind of put undue pressure on them, or they say things like, "Well, we really didn't "need to raise that round then. "We could've done bridge financing "or we could've figured out how to get a MVP product "out there and brought in some revenue." So, I just think it's the ultrahigh returns that VCs are looking for, and the promises that those VCs are making to their LPs, (chuckles) you know, in their funds to outperform everyone else, and you know, everyone talks to everyone, right? So, if anything's meaningful out there looking for investment kind of the back channel is very vibrant and it's dog-eat-dog, and some of it, I kind of reckon it to, you know, your alma mater, like where you went to school. Like, you know, if you're an MIT person, like MIT's the best place in the world. You know, if you're, you know, some other school, they're the best place in the world, and the VCs tend to kind of, like, fall in those camps, and what I'm looking to do-- >> And those are real biases that impact women and underrepresented minorities, to their detriment. >> Yeah, and you know, and that's the thing I've struggled with, too, when you look at the... Like, let's take Andreessen, you know, for example and you look at the portfolio companies, like you know, you kind of become locked into that ecosystem. Like if you want to go, you know, if I'm on Mesosphere and I want to go partner with someone that's not under that, or they have a company in that portfolio that does similar things, you're going to be pressured into working with the portfolio company over going off and maybe choosing the better, you know, choice for the industry, so I'd like to see, you know, those things change. >> Right, and so, Patrick, we talked a little bit about Ziften, security endpoint, you know, really hot space. I want to give the opportunity, other companies you have here that we should check out. >> Yeah, so we work closely with the team at Turbonomic. I think, you know, what they've done over time, you know, is amazing. I love products where you can just bolt it in and within a short period of time you're getting value. Like, you know, stepping back and just saying one thing about Ziften, like I think it's amazing, because I come from a software development, you know, background, and one thing as a software developer I've always found fascinating is like when you come in wearing the developer hat they give you the keys to the kingdom. They're like, "Oh, here's root access to the servers, "here's where all of our data is, "here's how you do a snapshot of production "to, you know, test it, you know, in staging," and I've always thought that it was a tremendous amount of risk, and you know, on average a company can be hacked for up to 100 days before they even realize that they've had a breach, and like, any kind of company, you know, be it Ziften or anyone in that space, that can showcase that to you. Like, you know, raise up things that you weren't aware of, you know, is really interesting, and then, you know, to the, like, Nico and Turbonomics and the things that they're doing there. Like, to actually get the most out of what you already have, like that's huge to me, because one of the, you know, one of the things I see in cloud computing that we didn't necessarily have, you know, directly owned physical infrastructure is it's almost too easy to spin things up. You know, you've got the guy clicking through the UIs like, "Oh, this instance looks great. "Oh, and it says it's only be $140 this month," and then they end up spinning up 1,000 of those, you know? (laughs) You get that first sticker shock of, like, here's that $250,000 bill that month, (chuckles) you know, for cloud, and companies like Turbonomics can, like, avoid you, you know, making those mistakes. >> Great, Patrick, thank you so much for coming on theCUBE. It was really fun talking. >> Yeah. >> We could talk to you for hours. >> Thanks for having me, I appreciate it. >> I'm Rebecca Knight for Stu Miniman. We will have more from theCUBE's live coverage of Microsoft Ignite coming up in just a little bit. (techy music)