>> Narrator: From New York City, it's theCUBE, covering New Relic FutureStack 2019, brought to you by New Relic. >> Hi, I'm Stu Miniman and this is theCUBE at New Relic FutureStack 2019 here in New York City. It's our first year of the event, but the event itself has been around for seven years and to help us end our coverage, no better person than the founder and CEO of New Relic, and the one who the name of the company came from, Lew Cirne. Of course, Lew Cirne is an anagram for New Relic. >> Indeed it is. >> Lew, thank you so much for having theCUBE at the event here and thanks for hosting us. >> I'm a huge fan of theCUBE. I've been watching it for a long time and it's such a pleasure to have you guys here. Thank you for coming. >> All right, so Lew, you're known as the coding CEO >> Lew: I am. >> And you come out with a vision of making software better. It's a great goal. Give us a little bit about the state of the industry. You know the internet challenge these days. It's going to fragment into a bunch of pieces and Open Source isn't what it used to be. There's so many changes going in the industry. Just kind of macro view before we get into New Relic. >> Yeah, from a macro view at New Relic we do this for the love of software. It's not just me, it's the whole company. We believe in software. We think it unquestionably is changing the world, transforming every industry. It's not enough just to build software that's great. You have to deliver more perfect software. That's now become almost obvious whereas when we first started out that was actually a bit of an evangelical sale where we had to convince people that they needed to observe their software. Now it's become a must-do thing, and that's why observability has become a household term. Everybody recognizes that anything that runs in production in internet scale needs to be observed, needs to be measured in real time. And so, that's been going on and has become a must-do thing for our customers. What we're so excited about is that we're delivering the first observability platform. What do we mean by that? Well, we see with this proliferation of tools, you might have metrics going to one place and logs going to another place and traces going to Zipkin or logs going to Elasticsearch. You want it all in one place, and more important, you want it to be connected so that you can see the relationship between the application and its server or infrastructure and the user experience all in one connected platform. That's what we're delivering with New Relic One today that's so exciting. >> Yeah. So, Lew, the IT industry in general is known for its fragmentation. >> Lew: Yeah, it is. >> When I want to build my application in the old days, I talk to the CIO. He's like, "Give me a million dollars and 18 months "and I will build you the Taj Mahal of my application." And we've got it beautifully designed and pull it out. Well, today things are moving much faster, but I've got everything from that Taj Mahal to the Kubernetes and Serverless, Microservice Architectures-- >> Lew: All that compartment-based stuff, yeah. >> There's usually a lot of different teams, and a lot of different tools in there. How does New Relic fit across that landscape and how are you helping to pull things together? >> Well, certainly the industry's moving from the monolithic application to the component-based application, often running in smaller and smaller services, usually running in something like Kubernetes or a containerized environment and with that comes a proliferation of things to monitor, and often a proliferation of tools. We have enterprise customers that have 20, 30 different monitoring and telemetry tools. It's not because they want it, it's because there might be one particular feature that one tool does that gives them the visibility they need. And what they want is a single platform. What people have historically used New Relic for is dropping our agents into their application or their infrastructure. Then our agents automatically put visibility in and then they report on the health of that system. We do that really well, but what we're announcing today is that we're opening up our platform to consume telemetry from Open Source, agentless sources. So that, if you've got something like Prometheus that's gathering data from Kubernetes, that can go straight into New Relic and be treated as first class data, so that you don't have to switch between a bunch of tools. None of our customers want that. They want it all in one place, but they need an open platform that's connected and most importantly programmable so that they can actually have one tool to see it all. And that's New Relic. >> A lot of the logging and tracing information out there isn't agent-led. What do you see as the future of agents, and what are some of the challenges of pulling all of these various data types together? >> Well, the most important thing for the future is that our customers have complete control in a choice. What we see particularly in large enterprises is they want both. They have a portfolio of more than a thousand applications. They want to observe them all. Most of them they'll want to drop an agent in because they don't have time to reinstrument them, but they still need to see them. Some of them they may want to manually instrument because they want a higher level of control or they want to adopt an Open Source API like OpenTelemetry. But then, if they're adopting that for some of their portfolio, when a transaction reaches across these different services, you don't want to lose visibility. We're delivering best of both worlds. You can manually instrument what you want. You can use OpenTelemetry in parts of your environment. And then you can also use our automatic instrumentation that comes from our agents. Our customers get to decide, and that's the future. >> So, Lew, you've laid out the case in a strong way as to why New Relic One should be the platform for the monitoring observability. I think you undersold a little bit the NRDB piece. When I look inside my business or I talk to customers, being able to see my data and act on my data can be challenging. You showed a demo of 10 terabytes and being able to change it in a snap. >> You know, NRDB is pretty magical. At some risk, let's see if this will show up on my phone right now. Just give you a sense of how fast NRDB is performing right now. Okay. One more time. So we've got-- >> Hold it up a little bit and show the camera this way. >> NRDB right at this moment is inserting 18 million events every second. Every second, 17.89 million pieces of data coming into NRDB in real time. And our customers are querying that in real time. Right now, in this moment, they're reading 24 billion pieces of data per second. Those pieces of data could be log messages. They could be someone pressing something on their app, could be a request going through a server. It's all in the same database. And the last one is a hundred millisecond response time on those queries, which is mind-blowing for these analytics queries. >> You actually showed the press an analyst this at lunch and it was over 20 million-- >> I think it was at 40 billion at that moment. >> 40 billion coming out and the same response time. A hundred milliseconds is Google good as to how fast I get a response. >> For this kind of data processing, it's mind-blowing. Now, the thing that our customers need to know is that all your metrics, all your events, all your logs, all your traces going into the same database with one query language. That's so much better than going to Elasticsearch and using its query language for logs, then using a totally different query language for getting at your metrics, and then trying to stitch it all together. We put it all not only in one cloud but in one database. That is the most powerful telemetry database in the world, which is NRDB. >> Lew, give us a little bit of the journey to the announcement today. Observability's been talked about in the industry for a while. VC money has been pouring into startups. There's been some acquisitions in this space already. Give us a little bit as to how we got to today. >> So how we got to today was when we started off as a company, we were championing the whole idea of observability, putting visibility into application code. As I said, that was a bit evangelical in the early days. People were wondering if they needed it. Now there's no question they need it. In fact, some people need it so badly they want complete control, and so they're manually instrumenting. OK, I've talked about that. Now where we see people going is now that all of this telemetry data is coming ideally into one place like New Relic, our customers are saying, "I need to go beyond dashboards. "Dashboards are good, but often dashboards are incomplete "to get the most out of the data we're collecting." That's why we're claiming we have the first and only platform for observability, with a capital P. What do I mean by that? It's only a platform if you can build software on it, and New Relic One is the first software development platform for observability applications. Our customers can take all this data and build real-time applications that leverage all the value out of it. When a customer buys something online, New Relic's database could be the first piece of, certainly, analytics database that sees that data. So you could a navigation that shows real-time sales for your business people all based on New Relic One. We can also solve all sorts of IT operations problems by building applications on this platform. And to prove it out, we're offering 12 free Open Source applications to anyone. They can download, they can clone them off of GitHub and push them into their New Relic account and they can use that as inspiration to build their own applications on top of our platform. >> Right. This is, if I understand, the first twelve, and you expect both New Relic and your customers will build many more. >> Yes, and actually it's thirteen already. We just added another one today. Some of those have been built by our customers already, and we're already seeing customers deploying these applications into their New Relic One accounts in production today. >> It really goes back to the promise of SaaS is that when customers need something and make a change or build on it, it's not just that customer that gets to be able to leverage that, but everybody else that is on the platform-- >> They can share and benefit. The way to think of it is, you're absolutely right, and without Force.com, Salesforce is just a CRM system. But with Force.com, companies could really leverage all the data inside Salesforce. Without programmability, ServiceNow is just a ticketing system, right? But how does ServiceNow become strategic? By allowing people to build applications tailored to their business. We believe the world needs an observability platform and the only one of its kind is New Relic One. >> All right. So, Lew, it sounds like this should be something that should accelerate growth for the company going forward. I read through your last earnings report. You're growing at 30, 35%, which is reasonable but less than the overall cloud marketplace itself is growing. So, how come the AWS, Azure, GCP tailwind isn't pushing New Relic faster? >> Well, it is a good tailwind for us, and I can't go into too much detail. We're a public company in a quiet period so I can't speak to specifics. What I can tell you is history has shown that people tend to adopt platforms at a certain rate and then, a few years later, they adopt the management technologies for those platforms. So we tend to be a little bit behind the adoption of cloud but then when people standardize and they go all in on it, then they really increase their investment in New Relic. I believe that things like our platform capabilities take our customers that might be spending... We have 850 plus customers that spend more than 100,000 a year with New Relic, and I believe when they start to adopt our platform and go strategic with us, many of them will be million-dollar customers, and that ought to be the basis of durable growth for the company. >> All right. So, Lew, there was some news leading up to the event. Some management changes. Let you speak a little bit of that, and you've got some history with, of course, Mike was already on the board, but-- >> We're so thrilled about Mike Christenson joining the company as President and COO. I've known Mike since 2006, when he acquired my last company, Wily Technology, which was really the very first APM company. Mike was the President and COO of CA, and so he had a similar role there to what he has here. Mike is, I think, one of the most brilliant operational minds I've ever met. He's been involved with New Relic for nine years. He's been one of the first investors in the company. He's been on our board of directors, and he's always had a keen mind for how to think about growing our business. I've been thinking for a long time on how to get him more involved as a member of the team and finally I convinced him to come join. Mike joined us as our President and COO. He's going to be my partner in growing the business. I think those that know me know that I love technology and products and thinking about where we are five years from now. Mike will be my partner to help make sure we're operating the company and growing the business on a day-to-day basis. >> Lew, you and your team helped create and democratize this wave of APM, Application Performance Management. As you look at it today, we talked about microservices. You talk about the dispersed nature of everything going on. How would you reframe the market today and New Relic, where it needs to be today and going forward? >> Phase 0 was people-monitored servers, back in the Stone Ages. Monitoring was just "Is the server up or down "and does it have enough CPU?" >>Blinking lights. >> Right. Then came APM. APM really was the precursor to observability. It was the notion that these are complex systems. They need to be observed at high granularity. APM gave birth to observability, so when New Relic first came along, we're "Let's democratize APM." And as observability came along, we saw this as an opportunity to open up the platform. Now where we are, if you look at our track record, first of all, my first company created the category of APM. New Relic then democratized APM, and now we're delivering the first observability platform. I believe that the future is programmable, and that New Relic is the future. >> Lew, you've always been enthusiastic when it comes to the vision that you put out, but it's been noted by some of my peers that your energy level and enthusiasm is even higher today than usual. So many things that you talked about, some of the things that you highlight, maybe behind the scenes, or things that might get missed beyond the headlines that you want to share. >> The idea for New Relic One was born two years ago. I took some of the brightest people in New Relic offsite and we fleshed out the thinking and the early prototype of what's become this. This is my life's work. This company's my life's work. I believe so much in this platform. I believe in its capabilities. I'm seeing our customers ripping it out of our hands, saying, "This is going to enable us "to fully achieve our goal of complete visibility "and completely tailored to the needs of our business." Why I'm so fired up and passionate is when you put your heart and soul into something that's new, that no one else has done before... There's been a handful of times I've done that in my life. The first time became APM. The second time became New Relic. The third was when I created NRDB. And now the fourth is New Relic One. And we're just getting started. >> Well, Lew, I want to let you have the final word as to what you want your customers taking away here from FutureStack 2019. >> My belief is that the future of observability is you need a platform. That platform needs to be open, connected, and programmable. We have such a beautiful, easy... It's a Heroku-like developer experience. So within seconds, you can be building an application that takes the telemetry data in New Relic and turns it into actionable business insights for your company. And if you want inspiration, there's 13 applications now up on GitHub that you can install right into your New Relic account, and maybe modify and tailor to your needs and republish to share with our other customers. >> I know you and your team are making sure that New Relic doesn't become a relic of the past. Thank you so much for having us here-- >> We're always in the future. >> And congratulations. I look forward to watching the progress going forward. >> Thank you, I enjoyed it. Thank you. All right, bye-bye. >> Thank you so much. And that's a wrap theCUBE's coverage of New Relic FutureStack 2019. I'm Stu Miniman, of course. Go to theCUBE.net for all of the coverage. A big thanks to the team here and everyone supporting and as always, thank you for watching theCUBE. (Electronic Music)

Oh from Las Vegas it's the cube covering AWS reinvents 2018 brought to you by Amazon Web Services Intel and their ecosystem partners well good morning welcome back to AWS reinvent this is day three of our coverage here on the cube we made it we have survived the show here that been a great show and still a lot of energy out here on the show floor Justin Morin John wall's we're with loose Ernie who is the CEO and founder of New Relic and and Luffy look just over your left shoulder there's that really impressive New Relic Pavillion you've got there we've been admiring it all week so that's a great show for us and you know our our theme this yours is billed fast and break nothing because that's really the objective of moving to the cloud is building software that customers value as rapidly as possible when you're building stuff fast there's risk and so how do you build fast with breaking nothing it's measuring everything in real time everything in that environment seeing exactly what's going on so you can make sure the stuff you're building works for your customers and that's what we do for so many people were adopting the Amazon Cloud kind of reminds me of John Wooden yield UCLA basketball coach had said be quick but don't hurry that's all right so that's right so it was all about pace and I understand putting that culture in the team so how do you put that culture and into with your well I you know it's it's one of the great truths how can you manage what you can't measure so we're a company that makes it trivially easy to measure software infrastructure digital customer experience our customers come to us every day and say what I love about New Relic is within seconds of setting up my account and and deploying the agent all of a sudden production is lit up I can see what's going on that measurement helps our customers have more confidence moving to the cloud faster deploying more frequently delivering customer value more rapidly now one of the themes that we've had over the last couple of days and John and I were talking just before we came on this morning that complexity yeah we've been hearing that time and time the amount of change it's happening so quickly and we've got all of these different systems we got micro services we've got containers we've got serverless it's a really complicated environment yeah how do you help the humans understand how how do you get them to understand what's going on in this really complex environment that's moving so fast you're you're absolutely hitting on the key challenge and what we're great at what our customers tell us they love about us is we simplify that complexity and and there's how do we simplify it well we have a deep understanding of how these systems work and we've fought very hard about how do you surface the interesting information that's most relevant to understanding the health and application and really in that moment when there's a problem how do you make it as easy as possible to understand the cause that problem as rapidly as possible this is like our customers they're right in the you know right in the pit of the most high pressure situations when there's a production issue every second counts every second counts you got to find that issue as rapidly as possible and what our customers tell us is they're sick of having to juggle around between three four five many of our customers have dozens of tools that are intended to watch production they turned a new rally platform cause it's all in one platform and when seconds matter you don't want to be switching between tools and context to understand what the nature the problem is and that's that's super important it's kind of like we all become pack rats in a way right yeah we save things we just keep putting them in this room and this room in this room and it comes time to kind of clean up or yeah get our act together and that's what you're doing for people is helping them get their act together absolutely and once you've got an understanding of how the system provides you go from overly cautious and timid to confident and with that confidence you can start playing offense with software we talk about all the time 15 20 years ago IT leaders thought of software as a defensive mechanism when I say defense I mean it's a way to reduce costs how do I reduce the cost of billing how do I reduce the cost of handling a support call now it's offense it's the growth engine for these companies right the digital customer experience is driving top-line growth and so when you're confident your ability to move fast with your software you're actually participating to growth your company that's why it's so strategic that's why the cloud is growing so rapidly so if you've got a customer who's not with you really clearly you want them to they should be going with you what if what does it feel like to go from not having New Relic in there and dealing with this complexity and having those struggles and then as you've put in New Relic for the first time what's what's that onboarding experience feel like I once was blind and now I see John Newton America it's truly that our customers tell us that before I discovered new relic I had no idea was going on production and it was opinions that we're telling us what was going on and when you've got a bunch of teams working on a complex system and there's a problem and it's like the loudest opinions gonna determine how you go forward that results in chaos and it results in organizational misalignment and with data all of a sudden people are lying on how you move forward yeah so with all that data that's there I mean that that can actually be complex itself if I'm trying to see everything all at once that that can be overwhelming so how do you help customers dial in on what's actually important within this this sea of information that they can now now look at well you know we have a variety of ways in which we approach that problem um the first is an opinionated user interface okay we have more experience in the realm you know my first company I founded in 1998 created the category of application performance management and so I've been thinking about this problem might ease the think about this problem for a long time we come to our customers with an opinion on what matters in the application environment but even then beyond that we're layering on well AI but we call it applied intelligence because artificial intelligence people overuse the term and honestly our customers don't care whether we're using a collaborative filter or good old-fashioned algorithms but they want to split more smarts in our platform to tell them what's anomalous tell them what's abnormal tell them what to pay attention to in this sea of data you really collects about 15 million data points every second off of our customers applications and infrastructure and digital customer experiences 15 million data points every second coming to the New Relic Cloud and we analyze all of it in real time to service to our customers what's important what's anomalous and what's interesting yeah so let's get into that let's go about what's anomalous and what's interesting yeah how do you differentiate that because as you said out of 15 million data points every second yeah I mean you're gonna develop trends but but it's by the time you evaluate it seems like one set of data you're off to a completely different set of data and you're right this is a very dynamic environment well the combination of an understanding of how applications work in general but then the flexibility to recognize you know how an e-commerce application might be very different from a Content application like USA Today networks is a big New Relic customer and so we need to provide enough of a platform that our customers can give New Relic some guidance on the nature of their application and and and we can discover its architecture and we can discover things about it but we we really can't discover its business purpose and so there's a combination of what we do out of the box with the customizability that that get our customers the point where the software's doing the work for them you're on so having been in the show now for three four days what have you seen around here what a customer's looking at that they're gonna bring it bring it on to their environment next what are some of the things I think you know lambda is coming mainstream right right and so when we think about where where the world is going you know micro services are going to be here for a while just like all the other technologies you said like the packrat analogy is true but future in the future when someone starts a brand new project they won't even think about infrastructure they'll just think about their code and new relics philosophy on visibility is you start with the software because the software is that the whole the business logic the whole point of all this infrastructure is to run software and so our most important starting point for visibility is the software itself we just made an announcement this week about delivering the first product that automatically instrument lambda to tell you if your lambda function is misbehaving exactly how is it doing that and so as the world continually moves from the old IT used to obsess on infrastructure and and and and new ideas is obsesses on how do we deliver more software faster and that that aligns very well with what we're great what our philosophy is on delivering his ability it starts and ends with the software and it feels like people are going into lambda really quite quickly because absolutely moving with some meetings this morning that they were saying that there's enterprises in particular may not have actually jumped onto the container bandwagon yet but they've looking at laminate is going you know what we're just gonna skip leapfrog to that yeah I'm seeing quite a bit of that containers still have an awful lot of value there they're wonderful lightweight ways to host what used to be on you know in a virtualized environment and get that isolation all that benefit kubernetes is also a big deal we made an acquisition of a company called coast scale that we announced last quarter that accelerates our capability to do work in kubernetes environments we're always inspired by what our customers are doing to accelerate how they build their software and that inspires us to make sure our platforms continually their tool a choice to make sure they can see the entire environment so you're getting as much for them as they're getting from you absolutely it's a great partnership we have with our customers we learn from them and then we provide them with thought leadership on how do you think about making sure you're seeing the entire environment so you can spend more time delivering great software and less time debugging it excellent well let's get back to that great booth of your awesome great for being with us we're sharing our a relic story and success on the the last day of the show all right well mate ok all right excellent right loser T joining us you from New Relic back with more here with AWS reinvent you're watching the cube from Las Vegas

(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)

>> Live, from Washington, D.C., it's theCUBE, covering AWS Public Sector Summit 2018, brought to you by Amazon Web Services and it's ecosystem partners. >> Welcome back to the District, everybody. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante, and I'm here with my cohost, Stu Miniman. Day two of the AWS Public Sector Summit. We saw Teresa Carlson yesterday, a lot of keynotes, we saw the CIA. Todd Osbourne is here, he's the Vice President of Alliances of New Relic, a company that's been smokin' hot, six billion dollar market cap, and really is takin' the world by storm. He's joined by Scott Drossos, who's the president of Infiniti, who is a public sector consultancy. Gentleman, welcome to theCUBE, good to see you. >> Thanks, good to be here. >> Thank you. >> So Todd, you heard me, I mean really, everybody's talkin' about New Relic, stocks been smoking, I read an article recently, "it's got to cool off, it's too hot." So why so hot, what's goin' on, why the appeal of New Relic? >> Well as our CEO Lew Cirne has been on a couple of times talking to you about, every business is becoming a software business in the public sector, which we're here representing at the Amazon public sector event. It's the same thing with agencies and all the digital experiences that are happening across all the government and whether it's education, higher ed, healthcare, any of the DOD or other agencies, there's always some sort of digital experience that folks are having with the citizens that all the agencies and organizations are tryin' to support, and New Relic's right there, right there at the forefront of every one of those digital experiences. Everyone's running software that's modern software, or shifting to that with modern software running microservices, running containers, shifting to the cloud, and anyone deploying that type of software needs to have New Relic as part of their engagement to monitor what's happening at the citizen or the customer level, what's going on in the back end, on through the infrastructure. And New Relic, whether it's a large enterprise that we're out there, like Dunkin' Donuts or Dominos, monitoring their applications and their eCommerce sites, or it's an agency in the public sector space, you got to have New Relic as part of those engagements. >> So Scott, when AWS services first came out, 2006 timeframe, we looked at it, we said okay, this is the future, but as much as it potentially simplifies lives, it brings a lot of new complexities. So you know, Stu and I used to talk about, look, the AWS is awesome, we're big fans, but the ecosystem has to grow. Consultancies have to come out of the woodworks, and help customers really, adopt. So that's really exactly what's happened. I presume that's how Infiniti got started, maybe you could tell us a little bit about the company, and what your value is. >> Sure, thanks Dave, so Infiniti is a 15 year old company. We're originally founded in public sector IT consulting, and we realized several years ago that the world was changing and that we needed to make the shift from IT consulting to cloud services. And so we dove in headfirst with AWS, and we really tried to move to the top of the curve very quickly, and so we were a little bit ahead of our market in public sector, being a public sector focused organization, but we felt it was important to get ahead of the market because now the market really is smokin' hot. But we thought it was important that if we're going to move into the cloud, we wanted to move to the top of the curve, and deal with things like DevOps, migrations, even machine learning, predictive analytics, so we kind of pride ourselves on having some of the largest public sector contracts in the US, even though we're, right now, predominantly California based, California focused. >> And what's your head count? >> We're about a hundred people. >> I mean this is the thing, we're seeing this trend toward a lot of, you know, smaller specialists, are really doing super. Why is that, or how are you able to differentiate from these big global SIs that have tens of thousands, hundreds of thousands of employees, vertical expertise, why are you guys winning? >> Well, first of all, I think we're able to be nimble and shift our focus pretty quickly to serve our market, to serve our customers, I think more successfully. But one of the thing's that's changed when the cloud arrived, is the cloud really let smaller organizations like us, act like big organizations, so we didn't need to go deploy millions of dollars of capital to go set up a massive data center, we can build an environment on the fly, as you know, in the cloud, and we can have access to world-class platform tools like New Relic, and we can help a customer, a large customer, perform just as well as if we were a large multi-billion dollar services organization. >> Todd, one of the interesting things to talk to customers about is their journey, and where are they, and the cloud migration and how do they do this, reinvent? A year ago or two I heard there were like seven or nine ARS to get there, anything from the full refactoring and building cool new stuff with server lists and things like that, to just the re-platforming. Lift and shift, is that a good thing, isn't that? Walk us through how New Relic with Infiniti, how are you involved in some of those migrations? There's no typical customer, but give us some examples. >> Yeah absolutely, so Infiniti, just like many of the integrators that we work with are all delivering services generally in a couple different areas. One is typically a cloud adoption, or cloud migration practice. So working with Amazon, how do we get more and more of customer's workloads shifted to the cloud? Usually those projects are also going on with something in the refactoring world or application space. Usually they're also developing or shifting to some sort of DevOps practice, and that's also part of our sweet spot, what's happening in the application there, whether it's on the cloud yet or not, we're going to provide that visibility to that. And then the third piece is, there's usually something else happening with that, as I was mentioning before, the customer experience or the citizen experience, so what's the browser impact, what's the user experience on that, what's the, if it's on a mobile app, what's the user experience on there? So while Infiniti's delivering all those services for the clients, New Relic's part of all those services, so our whole model that we're tryin' to do with all of our partners is embed ourselves into all of those services, such that we can help Infiniti be more successful, deliver those projects on time, and really resolve any issues that may come up during those migration issues. >> Scott, I'd love to hear especially, I know I hear DevOps talked about a lot in New Relic's customers, is it pervasive around the agencies that you work with and please do add some color there too. >> So in the public sector, it's a range of readiness, but we're seeing a real wave building, we believe. We worked with New Relic on a very large DevOps, SysOps, very complex cloud services engagement, largest higher education cloud services engagement in the US, and in that case, just like Todd was referencing, when we implemented the migration of the legacy platform to the cloud, first of all we had to do, make choices around refactory, host, rearchitect and so forth, but then when we're managing that environment, and there's millions of users hitting that environment, we need to be able to make sure that we can monitor the application to make sure the application's performing well, and if there's an issue, we want to see the line of code that's causing the problem as quickly as possible so we can keep the environment up all the time. Even though public sector may not be driven by the same financials as say, commercial, they still expect to be up all the time. They still want to take advantage of the benefits of the cloud and so New Relic allows us to do that, but then, as we're looking at the users interface with the application environment, New Relic's browser and mobile, they let us monitor how that experience is going, and we can proactively get at the performance issues there that the application may not tell us, if there's an issue there. And then, we can do things like test middleware with synthetics and make sure that the whole environment's working, and then obviously on the infrastructure side, it lets us make sure that we're optimizing the environment for our clients. One of the cool thing is, when you in the past, you'd set up an EC2 instance, you may not see that you don't need as much CPU as you're using, and so you can size that appropriately, and allow your environment to still run at a high performance, 100% up time, but give them the cost efficiencies at the same time. So we use New Relic across board to help support the entire environment. >> I wonder if we could talk about the marketplace a little bit, generally and then specifically, the public sector? So Scott, I presume you're obviously public sector focused, but are you exclusive to AWS, no, you probably do some other stuff, is that right, is that fair? >> Well we are both AWS and Azure Gold, in terms of partner, but we do more of our work in AWS for sure. >> Okay, so we'll come back to that. And New Relic, of course you're a software company, so you want everybody to love your software, so if there's a cloud that a customer wants to use, you want your software to be on that cloud, fair enough? >> Sure, and also on PRIM, I mean a lot of our... >> On PRIM too. >> A lot of our applications we monitor are still on PRIM, and there's a tremendous amount of value there regardless of... >> I would just add, Infiniti is a trusted advisor, we like to see ourselves as a trusted advisor, so we do feel like we have to be multi-cloud and have an objective perspective. >> And New Relic is presumably the same way, I mean let the customers decide, so, and it's a hybrid world, folks, despite what Amazon wants, it's a hybrid world, and they even recognize that. My question is, there's a lot of discussion in the industry about Amazon as an infrastructure service provider and their lead or relative lead on the competition. It's our sense that there's still a lead there, what's your sense? >> Well AWS is still the leading cloud services provider in the marketplace. They lead in innovation, they lead in disruption, they lead in market share, they lead in so many metrics, and because they have that lead, and that's where we started, we've benefited from that, and we've invested heavily, and in the same way, we see New Relic, when we made a choice around who we were going to pick as a platform to support our customers, we wanted something that was cloud-born, didn't come out of on-premise and get sort of bootstrapped into the cloud, and we wanted something that was a complete platform. So New Relic was really a clear choice for us. It was not a, we looked at the entire market when we made that choice. >> So the narrative in the market used to be, oh, security in the cloud, now we hear the CIA say hey, security on the worst day in Amazon's cloud is way better than I ever saw with client server. It was a pretty powerful statement, so let's assume security, people are relatively comfortable with security these days, even though I'm sure there's still some issues with regard to corporate edicts, and flexibility, and audits, let's put that aside. SLAs is another big one. People often criticize the public cloud SLAs, and cost, oh it's so expensive, I can do it cheaper on PRIM. Are those myths, are those realities, is it a it depends? What's your sense? >> I mean they're all, they're all factors that all of our customers are looking into. I would say what we're hearing a lot about right now, is how do we help provide more visibility to everything that's happening, so if you've got a developer now that has the ability to write code, put it on any cloud they want, spin up containers, spin down containers, go try out server-less base of architectures, they've got a lot of flexibility to do what they want. Government agencies, as well as customers, one of the things they're looking for is what's actually happening? Who's doing what? The governance piece is a big piece and I think New Relic plays right into that in terms of helping control all that. One of the things that we're, is one of our sweet spots, is as you move to DevOps and a truly microservices architecture, one of the whole values of that is speed, keeping up with how fast the whole market is moving, and customers and agencies, what they want out of that, is to deploy applications where they're releasing multiple times a day. You have to have visibility into everything you're doing across the stack to be successful in that, and that's really New Relic's sweet spot in terms of doing that. So providing that visibility, instrumenting the applications in the infrastructure before, and then helping provide visibility to things like governance, things that other, not necessarily our sweet spot, but other companies in the industry are doing things throughout the DevOps life cycle in the governance realm, things like that. So we're part of that ecosystem that's helping Amazon and the other cloud providers be very successful, helping customers and agencies be very successful deploying modern applications. >> It's all about that visibility. >> Scott, one of the things, when we look at any rollout of new technology or migration, once it's up and running, then what, so wondering how your firm's involved in, you know, is there re-training, is there things go on, once this is in place, now what? >> Well Infiniti, what we found in public sector is that everybody wants to take advantage of the cost efficiencies and the benefits, and most public sector isn't going to reduce cost, they're just going to want to re-use cost more wisely. So some of the confusion around cost savings is that they're getting way more for their dollar in the future state, and the choices you have to make around how fast you want to get to the cloud, and what you want to get out of the cloud when you're there, those all effect the equation in terms of what you're actually outcomes are immediately and in the long term. So we often see that in public sector, some of the legacy applications, they may not naturally or easily move all at once, and so you have to make a choice, are you going to do some refactory and architecting before you get it there, are you going to get in the cloud now, and then do it afterwards. Either way, there's benefits, but you have to make choices about what, how you want to approach it. >> Yeah, when you talk about, after I've rolled this in, I've heard from some customers, they're like, after I've gotten a cloud, I love it, but I had to dedicate an engineer for financial architecting because there's all of these things we need to do. Are we still in that state? And once again, do you help with some of the training as to, okay, or is it plugging them into the Amazon ecosystem and how do they get certified and ready to use all of this. >> So Infiniti works with clients differently, we work with some in a more episodic, lighter capacity, and we work with some in a wholistic capacity where we are that engine for them, where we provide them the complete cloud services team to do everything from migrations, architecture, DevOps, SysOps, SecOps, machine learning and all the way through. And so when we're providing those services, we're doing those kind of things, we're making sure that the next improvement is worked into the architecture. Last year, the customer I was referencing earlier, we did just under a hundred releases, so that's a hundred releases that we're using the New Relic platform and our architectural solution, our solution architects, rather, to make sure that it's faultless, that the process is efficient, it's effective, it's secure, and that we're driving efficiencies wherever possible. So it really depends on what the customer wants. If the customer wants to hone the environment, they may have to go a little slower to account for their learning, their learning curve, and we'll help them, if that's what they want, but if they want to go faster, and they want to take advantage of our expertise, we make that available, and we're happy to do that. >> We had the former CTO of the NSA on yesterday, who now works for Accenture, and we were asking about sort of, federal versus commercial, are we sort of still taking, learning lessons from commercial and bringing it to federal, or is it because federal has so much interesting technology around analytics, does it go the other way, and he said, "it's funny, when you're on the inside, you think all the innovation is goin' on outside, now that I'm on the outside I say wow, there's a lot of interesting stuff going on in federal." We heard Teresa yesterday talk about Aurora, she talked about the VM wear partnership, so things that were announced a while ago and actually being adopted in commercial coming in to federal. So how does it work? Is it more of a two-way than it used to be 20 years ago and I wonder if you could comment? >> Yeah, from Infiniti's perspective, absolutely. We work with clients to understand the problems and where they want to get to, and then we innovate with them. You're pretty dependent on the subject matter expertise of the organization. I think our customers like that, they like that they're part of the solution, but then they need the expertise that we bring to create the next generation solution. We just created something in the higher ed space called, a college called Architecture Builder, and it was after teaming with a specific college, and working in that space for a long time, but we wanted to create a way for colleges to rapidly implement a complete architecture integrated with all the different things, including New Relic, quickly and successfully, and that was done in partnership with them, so we did the work, but we couldn't have done it without them. >> Todd, New Relic obviously, you're a believer, you drink the Koolaid every day. Why New Relic relative to the competition? How do you guys differentiate? Pitch me. >> So it's really all about being successful in that modern software space, again, as I've mentioned, and so New Relic is the only SAS only platform, so we're not going to put anything on PRIM. We've got ourselves one of the biggest and best DevOps team that develops our software, we roll code everyday, and our customers get the benefit of us being a pure SAS platform. Part of that is scalability. What we can do at scale is unbelievable. There was a customer that was just talked about on the news today that I can't mention, but they just went from basically zero to $100 million on an application just in the past 90 days. It's one of our customers and we've scaled, we have no problem scaling with customers that are doing things like that, and again, the full platform value that we have now, looking at everything from the front end on the browser and mobile applications, through the application, which is core to us, it's where we provide that code-level visibility, the ability to trace across all the different microservices that are happening, connected back to that infrastructure. That full platform now provides such tremendous value up and down the stack, but not only to the technology leaders but also to those folks that are business leaders, chief marketing officers, heads of practices at the consultants we work with, all these folks are all getting value out of New Relic. >> What would that customer who should not be named say about the value contribution of New Relic to that scale? >> The value's unbelievable. That's a commercial customer, but their business is taking off like so many of our customer's businesses are at an unbelievable scale. They can't be hamstrung by having to do a server upgrade, or having to go back, working with a release of code from a couple weeks ago, they have to be as fast as possible 'cause their business is moving so fast, their agencies are moving so fast, they need a provider that's going to provide that visibility to that at the speed with which they're moving. >> Awesome so, you got one more? >> No, we've got to run. >> Yeah, we've got to go. So this is the last question, so impressions of AWS Public Sector Summit? I presume you guys, like we did, had to register yesterday. There were some logistic issues, but other than that, maybe you could give us your last word on the summit? >> Well Infiniti is very committed to public sector, so we really enjoy coming to the Public Sector Summit. It's great to connect with our partners, like New Relic and others, and it's great to see the latest innovations coming out from AWS. >> Yeah and I've been to, I don't know, 10 or so summits around the world so far this year. It is unbelievable the excitement and the amount of people that are now excited about what's happening in the clouded option world, and Amazon's piece in that, and what's happening here in D.C. this week is no exception. >> I would second that. It's been a while since I've been at summits. Stu, you go all the time, and they are just exploding and growing, and this is one of the best that's out there. So thanks guys, for comin' on theCUBE, we really appreciate it. >> Thanks very much. >> Thank you for the opportunity. >> You're welcome. Alright, keep it right there everybody, Stu and I will be back with our next guest after this short break. John Furrier's here, you're watchin' theCUBE live, from AWS Public Sector Summit. We'll be right back. (upbeat music)

(techno music) >> Announcer: Live, from the Moscone Center it's theCUBE. Covering AWS Summit, San Francisco 2018. Brought to you by Amazon Web Services. >> Hello everyone, welcome back to theCUBE's exclusive coverage here in San Francisco, I'm John Furrier with Stu Miniman. This is Amazon Web Services, AWS Summit 2018. We got two great guests, Dave McCann the vice president general manager of AWS Marketplace and Service Catalog and Matthew Scullion is a CEO of Matillion, partner of Marketplace. Guys thanks for coming on good to see you again >> Thank you. >> Thanks for havin' us. >> Alright, so Dave, Marketplace is doing phenomenal, well, we talked with Lew Cirne from New Relic at Reinvent, and was talking about how successful they've been on the Marketplace, so clearly it's working, 170 thousand active customers on stage, we saw the keynote today, What's going on with the Marketplace? Take a minute to explain how the Marketplace is set up now and how it's evolved to this point. >> Thank you, so, great to be back. Can't believe it's four months since Reinvent. So Marketplace is a digital library, of software. You know the cloud is helping our customers innovate faster but you need to be able to innovate with the software not just with the compute and the storage, and so our purpose is to stand up a digital library of software for our customers to subscribe and launch, and we're continuing to grow on multiple dimensions. We've deployed out to all the new standard regions, so we're now up in Korea, we're clearly in LHR so in all the standard regions we've fit Marketplace. And then we continue to expand the library of software, so more and more companies, like a Matillion, publish into the library. We're over 1,300 software companies now, and we're over 4,000 different software titles and you know, our customers show up, they're typically a developer or a manager, with a project with a budget, and they're looking for the best tool that they can keep the project going on schedule. >> And just to make clarification nuances, I know it's commercial and is there a public sector version or is it all one? >> That's a really good question. We actually launched Marketplace last August in our GovCloud Region, so we do actually operate a GovCloud Region for our US government customers and we actually offer a separate Marketplace for the US intelligence agencies. So that's the library of what were doing and we continue tho grow and as Werner said this morning, bunch of new stats. >> The business, the business model obviously people see, um, two things happening. I want to get your reaction to, one is Werner Vogels laid out how services are going to be laid out all over the place and it's not, you know, monolithic as he says. They're all a bunch of services. Scale is a huge factor in enabling that, and also the business model changes are going on, we're seeing people be successful. How are your customers and partners using Marketplace today, how does it work, I mean, do they just call up and say, "Hey! Dave I want to get in the Marketplace." I mean what, I mean, obviously downloading services, enabling services makes sense. How is it working? Like what do they do? Like what's the model? >> So, let's start from the customer and walk backwards. You know Amazon talks about working backwards from the customer. So typically in a company will be a set of developers who are building on us and they'll have a set of architects very often they've a few cloud architects and across the set of software, networking, security, database, dealer analytics, BI, DevOps, all the way to business apps. There'll be a set of architects saying, "What's the best software as we move to the cloud? "Do we bring what we had, or do we buy new?" So the architects are recommending to the developers, "Hey, for your project, here's a good tool." So in the buyer, architects are recommending, and then the developer gets told you can use these vendors. On the seller side of things, software companies like Matillion have to decide "How do we reach the AWS customer?" and then they have to package up their software, put it in our library, and make a bunch of decisions that he can talk about, and then they make it available. >> Yeah Dave it's been interesting to watch kind of the maturation in the Marketplace. It's been large for a number of years but how your partners have changed how they package software, last year there was a discussion that you know, it changed how billing is done, so that Amazon can help make it just seamless for customers, whether they buy service from, you know, AWS or beyond. You know, give us, you used to talk about the customer and the partner, walk us through a little bit of that maturation and how that's that's gone. >> So, we're a six year old service and so we you know we're agile, we keep releasing features. So last year in April, at San Francisco, with Splunk we launched something called SaaS Contracts, which was a new API for SaaS vendors and now we have over 300 SaaS companies in the last year that have developed to that API. So a software vendor can decide they want to deliver as a software package or as an AMI so it could be SaaS or AMI. And we also provision APIs. So we're constantly introducing flexibility on how that vendor can price and package and the more we innovate, the more software companies use our features. >> Yeah, I'm sure you get asked, you know, what's the concern, is there concern, from some of the SaaS players that, "Oh, I'm going to go in there, "I'm going to price and package the way Amazon does, "what's to stop them from just kind of "duplicating what I'm doing and becoming a competitor?" >> You know, that question comes up a lot, and you know look, the software industry is $550 billion. It's growing at 6% a year which is $30 billion and AWS all late last year did about $18 billion. So the software industry is growing by an AWS a year, and the reality is there's so much innovation going on that whatever innovation we're doing, you know, there's lots of room for other software vendors to innovate on top of our stack, 'cause we live in an expanding universe. >> Stu and I always joke, it's like so funny, we look at the, we watch all the cloud, of your competition, you Google Microsoft and Oracle, IBM, whatever, and they all quote numbers. If you factored in the ecosystem, in your number, the cloud revenues would be, I mean trillions. So you know, you guys I know you don't include that, in the numbers and like Microsoft does put Office in there, so it's kind of apples and oranges and so you know, Matthew I want to ask you, 'cause you're a partner. You're doing business on that, so, this is the formula we've been seeing that's been working where, the ecosystem growth, rising tide floats all boats, clearly that's Amazon's strategy. And they're opening up their platform to partners. So talk about what you guys are doing. First, take a minute to explain your company and then talk about your relationship to the Marketplace, and how that's working, and the relationship, how you make money, and the business model behind it. >> Yeah sure, and thanks for the question and for having me. So first of all Matillion, we're a software company, an ISV we make cloud-native data integration technology, purpose-built for this new generation of cloud data warehouses. For us that's Amazon Redshift, it's also Snowflake, and we sell both of those products on the AWS Marketplace, So customers are using us any time when they want to compete with data, so drive product development, or service their customers better, or in fact, become more efficient in the way they run their IT infrastructure. Perhaps migrating an on-premise warehouse into the cloud. So we developed that product through 2014-15, and we were looking for a route to market. Being honest, originally we were going to set it up as a SaaS business, and I saw a pitch from one of Dave's reports, a guy called Barry Russell, talking about AWS marketplace. We're like, okay here's a platform that's going to allow me to deliver my software anywhere in the world to any AWS customer pretty much instantly. More to the point, it's going to deliver my customer a really excellent experience around doing that, from a performance point of view, my software's going to go to go into their VPC sat right next to their data sources, in their Redshift cluster. From a security point of view, that question, very important in data integration, just taken totally off the table, so inside that firewall inside their VPC and of course super convenient and simple to buy. You just access AWS Marketplace, pay with Genuine Cloud Economics by the hour and stand it up pay a few AWS bills. So a really compelling way to deliver the software. >> Was there a technical integration required on your end? I mean like, there's some clients that are born in the cloud Amazon, some are, have built their own stuff. Do you have to, I mean, where are you guys fit into that? One, are you using Amazon? If not, was there any integration piece that you had to do? And if so, what was the level of work required to integrate? >> Yeah, and to be honest, I think this is, you know, the key question on how to be successful selling in this this kind of landscape of public cloud vendor marketplaces and, and the public cloud. So, I mean we're a born on AWS and in fact are born on AWS Marketplace products, and that intersection of product engineering with the route to market, and it's not just the software, it's also the things you surround it with, like great quality content, online support portals, videos, a really great launch experience, that means you're going to be clicked to running our software, commercial-grade ETL tool in under five minutes, free for the first 14 days and then by the hour billing, you know, there's a lot of different angles that go into that and you've absolutely got to be thinking about it. Other people are being successful just kind of sticking their products on the Marketplace and using it just as a billing mechanism but I think for us one of the reasons we've been able to drive great customer resonance and growth, is having that intersection of engineering, content and the Marketplace, together. >> Matthew I wanted have you talk to me a little bit about Matillion, 'cause when I think about kind of customer acquisition, you know Data Warehousing Market's been around for a long time. Redshift's been doing phenomenal, I mean for a while it was the largest, you know, fastest growing product in the AWS you know, portfolio. Being only through the Marketplace, does that, you know, how does that help you get customers, how do they learn about you? Do you ever worry about, like, oh well they just think I'm an Amazon service? Maybe that's a good thing. You know, I'm just curious about kind of that whole go-to-market and relationship with the customers being, you know, super tight, with AWS, you said Snowflake's in there too, so yeah, I'm just curious about that dynamic. >> Yeah, I mean the, the AWS only service thing that historically was a pro and a con. So back in the day we were just Redshift. We're now a couple of other data warehouses as well, you mentioned Snowflake, that's quite right. So that's allowed us to kind of move up the value chain with our customers and give them some choice, which they wanted. Yeah, I think in terms of the go-to-market economics, I mean, we all say this, sometimes its glib, here I think it's authentic. You want to start with what's best for the customer, right. And so we're delivering with genuine cloud economics. Our product starts at $1.37 an hour and yet it'll scale to the world's largest enterprises, and if they don't like it they can turn it off. Typical SaaS products, you're actually signing up for 12 months. So you're not that focused on keeping your customer happy for 11 of those months. Me, I need to keep that customer happy 100% of the time, because he can turn it off any time he likes. >> Yeah, yeah, I always wonder sometimes as an analyst, you know, should it be called a SaaS product if I'm signed into a year or multi-year contract. >> Yeah, so really interesting dynamic of our business is our entire revenue drops by 15% Saturday, Sunday, and it's cause people are turning off dev instances. They come back on Monday morning. Now, as a CEO I could worry about that and say, "Where's my 15% gone Saturday, Sunday?" Actually I'm delighted, 'cause it means my customers are only paying for value they're getting out of the product. >> And then, so about the business model, I wanted to drive into that. I want you to explain and give some color commentary to what your choice was if you didn't have the Marketplace. Hire a sales force? That's going to cost you some money. First you got to find people. >> Yeah. >> Push it to about a thousand customers, run ad campaign. Did you guys do the analysis and say, "Whoa, this is like A,B"? >> Well, so when we launched this product, we were a 12 man company, so I'm not going to say that we rolled in a management consultancy to work that stuff out for us, being honest. But we took a view. I think there have been two big things. First of all, in those very early days when you're trying to find some product market fit, you're trying to find some customers. That global reach instantly delivered by the Marketplace is amazing. So I'm from Manchester UK, apologies for the accent, that's where a good part of our business is still based, although we have offices now in New York and Denver and Seattle as well. If you drill a vertical hole downwards from Manchester, UK, you pop out in Melbourne, Australia that's the first customer we picked up on AWS Marketplace, still a customer today. So in those early guerrilla days, >> No travel, instant global footprint. >> And they were spending money with us before we spoke to them for the first time as well. Now today, we do have a sales force, of course, but it's not a sales force that's closing big deals. They're being value-added, and additive, they are escorting customers through the buying journey, and we've got just as many pre-sales guys as we have sales guys just helping the customer 'cause that's what we want to do. They're going to use the products and consume it 'cause it's easy to do and to turn it off. >> So you focus the high-value activities with the high value employees on the right customer mix, while the rest is just kind of working through the cloud economics. >> Yeah, that's it. Hey, we have to do marketing, of course. We're here doing an event, it's going great. We were lucky enough to be mentioned in the, in the keynote this morning, so our booth's been swamped, >> And now you're on theCUBE, you're a CUBE alumni. >> Exactly. >> The world's going to see, going public next. >> One of the things we do on the marketing front, is when you come into Marketplace and you talk about how we onboard a seller, we have a whole team who we call category managers and so there's an expert over each subject area such as data analytics or networking or security and we not only give them the engineering advice on how to package, on how to onboard and by the way we didn't curate manage so we publish his AMI and he tells us what regions he wants it to go to. And so he may say, clone to Korea, but I don't want it over here, so the seller could decide geography but then we lay on a business go-to-market plan and we actually develop a joint go-to-market. And so we'll do co-marketing with our sellers, and they can choose whether it's by country, by territory, is it large enterprise, is it small business. So there's a set of business advice that we lend. >> So you apply some best practices and some market intelligence on the portfolio side. >> Exactly. >> And the sector. And then we have all the data right? We provide these guys with a real time API they're pulling data off the API every day and what's happening, and so were monitoring that data and everything's measured so this is a digital channel. And then of course the ultimate thing we do when I ran my last SaaS company, we provide the billing platform. And so the buyer comes in on the AWS account, uses the AWS account, so now we bill on behalf of, we do the collection from the buyer, and then we disperse the funds back to the vendor. >> You're making the market for 'em, and they're still doing their blocking and tackling. >> The customer gets a really good experience on their bill and then the customer spend actually becomes visible in Cost Explorer, so we've tagged everything, so we also tagged it so that it's "this is Matillion", and so the customer knows "I'm spending X much on, "X amount of dollars on Matillion on that stack." >> So you're a sales channel and you're adding more value, Matthew, if someone asks you, just say I say, "Hey Matthew, look I got a great product and it's kickin' ass, I want to get into Marketplace" what do I do, what advice would you give me, what would you say? "Oh, I'm skeptical of Amazon's Marketplace" or, "Hey, I really want it". How would you talk to those two tubes of audiences? >> Yeah, so I think the first thing, and we alluded to it earlier, is I think really hard about that 360 experience of packaging the product and how it's launched, that's engineering in the software itself. You need to think about how the customer's going to interact with it, but you also need to clothe that software with great quality content and support, and finally the right type of go-to-market motion around that. And one of the big benefits for us in terms of the AWS Marketplace has been the efficiency of the sales model. So we've got really efficient go-to-market economics and also the types of customers that we sell to and we've, for a company of our stage, you know, we're a post series B, high-growth software company, but for a company of that stage, we are, have a disproportionately high number of global 8,000 global 2,000 customers, that are because Marketplace takes away the barrier of selling into those guys. So as advice on how to be successful, I'd focus on that packaging side and advice as to why to do it, you've got instant worldwide reach into the traditional stomping ground of the the startup other tech vendors but also into the world's biggest software users. >> A virtuous circle, faster to the customers, at a lower cost structure, you still make money, everyone's happy, sounds like a, the Amazon business model. >> It is. >> Great customer experience, great selection, and you know, adoption by the customer, and then continued innovation. Another thing that we do is we have a portal where these guys are publishing new versions, so it's not a one-and-done model. So as these guys update their models, their engineers just publish into seller portal and then that new version comes in, and then we publish that new version out to the customer. So there's a refreshing of the AMI so the latest version is up there. >> And Werner's keynote today really highlighted it's not just about developers anymore, it's about the business teams coming together, pushing stuff real time to the Marketplace is now a business ops model and it's really kind of coming together with entrepreneurial traction and the footprint's a gateway to the world. You have a world footprint. >> Yes, it's 21st century software distribution and really the buyer gets the ultimate choice and you know the buyer can go for an annual contract or for by the hour, so economically, lots of choice. >> Alright, so I'll put you on the spot to end this segment. I'll be a naysayer. Dave you got competition out there, what, what's in it for me? How do you compare vis-a-vis the competition? >> Dave: You're a software vendor? >> Yeah. >> As, you're playin' the persona? >> Yeah, I'm a software guy, I'm looking at marketplaces, you know, why you guys? >> You know, you have to go where the customer is, ultimately you have to decide who your customer is. You know, Werner talked this morning about the tens of thousands of companies that are up on AWS, and so, if I've got 170 thousand buyers showing up on my marketplace, and they're intentional on their budget, and you're a software vendor you get reach, and given what Gartner says on where we are, on fulfilling share in cloud, is where the customer is. >> And if you're a service too, software service APIs, it's even better goodness there. >> Yeah we have thousands of consulting partners also use Marketplace as a library so if you're an SI, and we have tens of thousands of SIs, those SIs also view Marketplace as a good place to find software for the project. >> You've been in this business for a while. I mean, we've always talked about this on theCUBE, I want to ask you real quick, I mean more than ever now, ecosystems and communities are paramount, priority. Especially with this kind of dynamic 'cause that ecosystem is that fabric to enable, you know, go-to-markets that are seamless with economic scale, visibility into the numbers, what's your reaction when someone says that comment to you about community and an ecosystem? >> Well you know, an ecosystem is a collection of software companies that inter-operate. And the reality is that our customers are rewriting all the software. The world is rewriting its software portfolio. You know, a large customer I went to see recently has a thousand software applications. Now as they move them all to the cloud, they're either rewriting or they're modernizing, but as they rewrite them, they're going to use distributed services, they're going to use micro-services. And so they're refreshing their entire stack. >> Yeah, it's a re-platforming of the internet. >> Transformational. >> Dave McCann, who runs the Marketplace for AWS. Really kickin' butt out there. Congratulations on all your success, and I know there's a lot more to do, I wish we had more time, I'd love to do a follow-up with you and find out what's going on the Marketplace. and Matthew a partner, congratulations, hyper-growth, hittin' that trajectory. Congratulations, we'll come visit you in Manchester and then we'll drill a hole, we'll go to Melbourne right down there. Appreciate, thanks for coming on theCUBE, thanks. >> Thank you. >> I'm John Furrier and Stu Miniman. More live coverage after this short break. We are in San Francisco, live for AWS Summit 2018. We'll be right back. (techno music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering AWS Reinvent 2017, presented by AWS, intel, and our ecosystem of partners. >> Welcome back everyone, live here in Las Vegas. We're at AWS Reinvent. Day one coverage of three days of theCUBE, I'm John Furrier, the host this week. >> We've got two sets, our fifth year covering Reinvent. It's been great to watch. Every year we try to get in the VC panels. We just had Jerry Chen on from Greylock. We've got two more awesome friends of theCUBE in the community here. We've got Sunil Dhaliwal who is the founder of Amplify Ventures and Nick Sturiale with Ignition Partners. Guys, great to see you. >> Great to see you, John. >> Good to see you, John. >> Boy what a lineup it's been over the past three years, four years with Amazon, just watching them tear. Now it's all steamed ahead. Microsoft is totally gearing up. You can see them playing, what they're doing, they're pedaling as fast as they can. Google Play and the (mumbles) we're gonna compete on TensorFlow and other, little goodness, a lot more to go. You got Alibaba Cloud. Intel behind us is making (mumbles) chips. Good market on paper. >> Yeah. >> But we're seeing startups kind of get bought, not for what they wanted. Didn't go public. Skyhigh from Greylock. You see Barracuda going private. A lot of money to be made. Maybe the investment thesis of 200 million dollar fundings, that's over, is it over? Get a little bit of cash and get the critical mass and... >> Well, here's a question. Do you invest in these companies thinking every one of them is going to go public? Or do you think that a good number of them are gonna get acquired? And I think the investors that have done this for a while, and Nick's done this for what, like 45 years? >> I started when I was two, so. >> I've done this like two years less than you have, so I don't pretend I'm dramatically younger. But the reality is, these companies get acquired. And pretending that you're gonna pile into a company late and expect every single thing to go public I think is kind of crazy. And the people that are getting caught in that trap, I think they're gonna be in for a rude awakening. But look, you've got a billion six outcome for Barracuda, right? >> John: That was pretty damn good. >> And you know Skyhigh number hasn't been printed, but it wasn't a small one. Like, those are good outcomes. Those are good venture returns, if you were smart about where you got in. >> So I have a slightly different perspective, which is the real issue is that so much money moved into the late stage, and these companies thought that growth would always be linear even asymptotic. And so what happens is that their growth rate slows down and the cost of growth goes up, and suddenly the company's not quite as hot as it was a year ago, and so now the options for what they do have shrunk dramatically, and so you get exits like you just mentioned. And so part of the problem is is that entrepreneurs and investors really have to have a sober view of what is a business model that's durable over time and which ones really are gonna start to leak in their later phases. >> Well it's kind of a planted question for you guys, because you're early stage in Amplify. I've been following you guys, do a great job. You guys do a range of early, end growth. >> Mostly early though. >> The days of just laying back and kicking your feet up and throwing cash at stuff is over. You actually gotta do the work. It sounds like old school VCs. Greg Sands and I talk about this all the time. You gotta go in and be venturing. You gotta actually make it work. >> And that sucks, I was just told I put my feet up, I put some money in and then I get a distribution check at the end of it. >> That's what everyone thinks you guys do. What do you guys do every day? Take us through your day. >> It looks a lot like that except... >> It's so easy to be a VC, all you do is okay, yes, no, okay that's good. >> We got a dartboard. >> All you gotta do is bet on the good ones. >> Yeah. >> That's so easy. >> So there are what, 14,000 startups in the bay area, how many of them are worthwhile you think? >> It's a lot of work. Well old school, let's go back to the old school tactics, because you're seeing a couple things going on. You guys essentially pointing it out, you gotta do the work and pick the winners. But now that the business models are changing, right? You're seeing Amazon just ignoring conventional wisdom, and they're winning. The game is changing a bit in the business model side. How are you guys looking at that as you make investments? So you got the classic venture, bet on a good team, do all that stuff. What do you guys look at now in the marketplace for fit, scale, longevity, durability? >> I mean the stuff we care about the most is are you going after a big problem? Because I think a lot of the stuff we see, even with your great teams and great technologies, but you step back and you actually think, you know, that isn't a company, that's a product, or that's not even a product, that's a feature. And I think that's the natural outgrowth of what happens when you got 14,000 startups in the bay area, is there aren't 14,000 products that are companies worth having. What you have is, probably 12,000 features, 1500 products, and then like 500 real companies. And that's probably the biggest filter that you gotta apply on the way in, and it's maybe the hardest one to solve for, which is, roll this out seven years, nine years, because that's really what you're talking about when you're talking about building a public durable company is, what does this market look like way down the road? And is that a thing that can stand alone? And that's really, I think, the difference between the companies and the investors that do really well and the ones that can kind of squeeze by, knocking out a couple interesting outcomes. >> My favorite thing is that when you say we just pick the winners, is that nobody knows who the winner is a priori. If you knew that, that market would be gone already. And most successful companies that you read about, and they talk about the (mumbles) investors that were in it early, that's all BS. It's a million good things happen along the way, serendipity, a ton of hard work on the management team and the employees. So this idea that things are preordained is just silly. And I would tell you that you look at most really successful companies today, their business model is completely different than the one that the venture person backed. >> I mean it's always the classic, because I remember when I first started an entrepreneur in the 90s, the question was what's your exit strategy? It was a legitimate question at that time, and it was kind of a peg mark, okay, when I build a growing company and have an exit. Now the exits are, as you mentioned, buyers. And that's not necessarily a bad thing. If Microsoft's in a race to fill in their white spaces, man, I would crop up and get the crops growing, right? So you can say, okay, Microsoft. So you guys gotta kind of do a little bit of homework there, do some relationship work, and you guys are close to Microsoft, so. >> Yes. >> I mean, is that kind of the new playbook? >> Yes. >> How should entrepreneurs posture to this? I mean obviously they're gonna try to build a durable venture, but they don't want to be zig-zagging too much or pivoting. >> No. >> I mean Nick made the point earlier, which I think is absolutely the one to focus on, which is when you raise a ton of capital your options start to shrink. The more money you raise at the higher and higher price, there's somebody you gotta serve who's thinking about the even bigger pot of gold at the end of the rainbow. And honestly, when we look at, I'll take one company in our portfolio for example, and I think the Splunk story is right up there with it, If you look at Datadog, Datadog's huge here at this show. There's purple shirts everywhere and a massive booth, and they've been here for five years running or four years running. That business has barely touched the last round of capital they raised, let alone the round of capital before that. The capital efficiency of that business, not only is it gonna make it a great outcome, but it's gonna give them tons of options of things that they can do. And, you know, they'll get to make every single decision they make, whether it's going to new product or whatever, position of strength. And not a lot of companies do that. >> So Splunk started in 2004. Guess how much total the company raised before it went public? >> How much? >> Forty million. Guess how much it spent up to the time it went public? >> John: How much? >> John: Twenty five. >> So it went public... >> So very capital efficient? >> John: Think about that. >> Yes, and it's worth 9 billion now. So you had several hundred millionaires created out of Splunk, and I would submit to you if Splunk was started today, the investor community would have killed it. >> John: Why? >> Because 18 Brinks trucks would have backed up and dumped a billion dollars on top of it, and buried it in too much money without allowing the company to get the time to become a fully viable system. >> Sunil: Yeah. >> So the too much cash can create toxicity for the startup? >> Money rarely makes the company. Money rarely makes the company. >> Lew Cirne was on earlier, founder of New Relic. Another capital efficient company. >> Great company. >> Went public all time high. Love that guy. He's such a strong, he wrote some code last week. He said, if you can help your partners be successful, in referring to Amazon. >> Man: Amazon. >> Then you can be a great ecosystem partner. So the question now is that's not a bad deal for a company to jump into the Cloud game and be a really good partner and build a kick-ass product. >> Yes. >> And look like a feature maybe on paper, and then sequence to an opportunity. Thoughts on that? It's certainly lucrative if you can get the flywheel going. Right? >> So you don't want to build a company whose basic thesis is helping Amazon or Azure or Google. That is a dead company. If, however, you pull revenue for one of those three in a way that's interesting to them, they will support you all day long. We have two companies in particular, Icertis and KenSci that are pulling a lot of revenue for Azure right now. And Microsoft gives them extraordinary support. >> That's the nuance right there. That's the nuance. Pulling revenue, value, creation. >> Yes. >> Well, they've created Amazon and Microsoft and Google, to a degree, as they get going. They've created a really interesting model, which is unlike your traditional ecosystem, hub-and-spoke model, where someone's gonna capture (mumbles) control of the sale, etc., etc. The smart thing that Amazon's done is they say, you use whatever you want, we're gonna bill you for the primitives until the cows come home, and as long as you're not standing in between Amazon and their primitives revenue, you're gonna do great. >> All right, final question for you guys. First of all, great conversation on the capital markets, certainly it's crazy. We always try to cover it, but here's a thought exercise. Last night we were at the analyst summit. We were talking to some analysts, and the question was, the airplane's going down, and you're in a board meeting, I gotta pick a parachute. There are only three parachutes, Amazon, Microsoft, and Google, which one do you grab? You got 10 seconds. >> To sell to or? >> No, just grab a parachute, and you hope that it opens and you live. Pick a parachute. >> Amazon, >> I'm going with Amazon. This one isn't hard. >> Microsoft and Google. The only person who's gonna grab the Microsoft parachute is the guy who's been with Microsoft for 30 years and knows they're not gonna let him down. If you're a forward-facing company you're going with Amazon, and if you're nuts, you're gonna grab Google right now. No offense to my friends at Google. >> So we're sitting here at Reinvent, so I feel like that's a trick question. (laughing) >> Well, that's good. If you're in the Microsoft ecosystem, they do take care of their own. >> They do. >> Their DNA is tuned to ISVs, they're very good at it. >> and that's their track record. Well, the one guys says, well it depends. By the time you argue with the parachute the planes (mumbles). But it does depend on your business. >> Sunil: Yes. >> Nick: Yes. >> But it is hard not to look at this show and say this is what electricity was in 1920. >> Final question, obviously Amazon is looking at all steam ahead, business models are changing, you're starting to see the top of the stack develop nicely, moving up the stacks seems to be the trend. You got this decentralized market up there. Bitcoin hit 10,000. A lot of smart alpha geeks, including some of the guys here at theCUBE team, is looking at ways to kind of leverage this decentralization trend in a way that's productive. Yet there's a lot of scams out there with these ICOs. Decentralization good or just another infrastructure dynamic? Thoughts on this whole decentralized token economics wave? Also the FCC has regulations now in it. Is it disrupting VC? Your thoughts, Nick. >> Do remember what H.L. Mencken said? "A fool and his money are soon parted." so I think anyone who sits there and says I understand completely what an ICO is and what I'm buying and doesn't view it as something that'll be a tax deduction for next year, I think is gonna be in for a bumpy ride. >> Get out your Gartner Hype Cycle. And if you don't know what it is, go look it up, and there's a spot right now of where we are in the hype cycle, and I think the movement my finger tells you where we are, but this is coming, but this comes afterwards. >> I heard this argument, the web is just for kids. No one will ever use the web. Browsers is a toy. >> A K memory is all you'll ever need. >> Yeah, but guess what, guess what, 2001 happened before we got to 2017, so let's never forget where we are at that kind of hype. >> ICOs are like subprime mortgages, and I speak Spanish and I can't even read the thing. That is what an ICO is. >> So certainly hyped up. Winter's coming, we'll see. All right, we got the VCs here, Nick and Sunil. We got Amplify and Ignition Partners here in theCUBE. More live coverage day one after this short break.