>>Welcome back everyone to Cube's live coverage, VMware Explorer, 2022 formerly world. I've been saying now I gotta get that out. Dave, I've been sayingm world. It just kind of comes off the tongue when I'm tired, but you know, wall to wall coverage, again, back to back interviews all day two sets. This is a wrap up here with the analyst discussion. Got one more interview after this really getting the analyst's perspective around what we've been hearing and seeing, observing, and reporting on the cube. Again, two sets blue and green. We call them here on the show floor on Moscone west with the sessions upstairs, two floors of, of amazing content sessions, keynote across ed Moscone, north and south SBI here, cloud strategists with the cube. And of course, what event wouldn't be complete without SBE weighing in on the analysis. And, and, and I'm, you know, all kidding aside. I mean that because we've had great interactions around, you know, digging in you, you're like a roving analyst out there. And what's great about what you do is you're social. You're communicating, you're touching everybody out there, but you're also picking up the puzzle pieces. And we, you know, of course we recognize that cuz that's what we do, but you're out, we're on the set you're out on the floor and you know your stuff and, and you know, clouds. So how you, this is your wheelhouse. Great to see you. Good to >>See you. I'm good guys. Thank you. Thank you for having >>Me. So I mean, Dave and I were riffing going back earlier in this event and even before, during our super cloud event, we're reminded of the old OpenStack days. If you remember, Dave OpenStack was supposed to be the open source version of cloud. And that was a great ambition. And the cloud AATI at that time was very into it because it made a lot of sense. And the vision, all the infrastructure was code. Everything was lined up. Everything was religiously was on the table. Beautiful cloud future. Okay. 20 2009, 2010, where was Amazon? Then they just went off like a rocket ship. So cloud ended up becoming AWS in my opinion. Yeah. OpenStax then settled in, did some great things, but also spawns Kubernetes. Okay. So, you know, we've lived through thiss we've seen this movie. We were actually in the trenches on the front lines present at creation for cloud computing. >>Yeah. I was at Rackspace when the open stack was open sourced. I was there in, in the rooms and discussions and all that. I think OpenStack was given to the open source like prematurely. I usually like we left a toddler on the freeway. No, the toddler >>Got behind the wheel. Can't see over the dashboard. >>So we have learned over the years in last two decades, like we have seen the open source rise of open source and we have learned quite a few lessons. And one lesson we learned from there was like, don't let a project go out in the open, tell it mature enough with one vendor. So we did that prematurely with NASA, NASA and Rackspace gave the, the code from two companies to the open source community and then likes of IBM and HPE. No. Now HPE, they kind of hijacked the whole thing and then put a lot of developers on that. And then lot of us sort of second tier startup. >>But, but, but I remember not to interject, but at that time there wasn't a lot of pushback for letting them it wasn't like they infiltrated like a, the vendors always tried to worry about vendors coming in open source, but at that time was pretty people accepted them. And then it got off the rails. Then you remember the great API debate. You >>Called it a hail Mary to against AWS, which is, is what it was, what it was. >>It's true. Yeah. Ended up being right. But the, the battle started happening when you started seeing the network perimeters being discussed, you starting to see some of the, in the trenches really important conversations around how to make essentially cross cloud or super cloud work. And, and again, totally premature it continue. And, and what does that mean today? So, okay. Is VMware too early on their cross cloud? Are they, is multi-cloud ready? >>No >>For, and is it just vaporware? >>No, they're not too early, actually on, on, on, on that side they were premature to put that out there, but this is like very mature company, like in the ops area, you know, we have been using, we VMware stuff since 2000 early 2000. I, I was at commerce one when we started using it and yeah, it was for lab manager, you know, like, you know, put the labs >>Out desktop competition. >>Yeah, yeah. Kind of thing. So it, it matured pretty fast, but now it it's like for all these years they focused on the op site more. Right. And then the challenge now in the DevOps sort of driven culture, which is very hyped, to be honest with you, they have try and find a place for developers to plug in on the left side of the sort of whole systems, life cycle management sort of line, if you will. So I think that's a, that's a struggle for, for VMware. They have to figure that out. And they are like a tap Tansu application platform services. They, they have released a new version of that now. So they're trying to do that, but still they are from the sort of get ups to the, to the right, from that point to the right on the left side. They're lot more tooling to helpers use as we know, but they are very scattered kind of spend and scattered technology on the left side. VMware doesn't know how to tackle that. But I think, I think VMware should focus on the right side from the get ups to the right and then focus there. And then how in the multi-cloud cross cloud. >>Cause my sense is, they're saying, Hey, look, we're not gonna own the developers. I think they know that. And they think they're saying do develop in whatever world you want to develop in will embrace it. And then the ops guys, we, we got you covered, we got the standards, we have the consistency and you're our peeps. You tend then take it, you know, to, to the market. Is that not? I mean, it seems like a viable strategy. I >>Mean, look at if you're VMware Dave and start, you know, this where they are right now, the way they missed the cloud. And they had to reboot that with jazzy and, and, and Raghu to do the databases deal. It's essentially VMware hosted on AWS and clients love it cuz it's clarity. Okay. It's not vCloud air. So, so if you're them right now, you seeing yourself, wow. We could be the connective tissue between all clouds. We said this from day one, when Kubernetes was hitting in the scene, whoever can make this, the interoperability concept of inter clouding and connect clouds so that there could be spanning of applications and data. We didn't say data, but we said, you know, creating that nice environment of multiple clouds. Okay. And again, in concept, that sounds simple, but if you're VMware, you could own that abstraction layer. So do you own it or do you seed the base and let it become a defacto organization? Like a super layer, super pass layer and then participate in it? Or are you the middleware yourself? We heard AJ Patel say that. So, so they could be the middleware for at all. >>Aren't they? The infrastructure super cloud. I mean, that's what they're trying to be. >>Yeah. I think they're trying, trying to do that. It's it's I, I, I have said that many times VMware is bridged to the cloud, right? >>The sorry. Say bridge to >>The cloud. Yeah. Right. For, for enterprises, they have virtualized environments, mostly on VMware stacks. And another thing is I wanna mention touch on that is the number of certified professionals on VMware stack. There it's a huge number it's in tens of thousands. Right? So people who have got these certifications, they want to continue that sort of journey. They wanna leverage that. It's like, it's a Sunco if they don't use that going forward. And that was my question to, to during the press release yesterday, like are there new certifications coming into the, into the limelight? I, I think the VMware, if they're listening to me here somewhere, they will listen. I guess they should introduce a, a cross cloud certification for their stack because they want to be cross cloud or multi-cloud sort of vendor with one sort of single pane. So does actually Cisco and so do many others. But I think VMware is in a good spot. It's their market to lose. I, I, I call it when it comes to the multi-cloud for enterprise, especially for the legacy applications. >>Well, they're not, they have the enterprise they're super cloud enabler, Dave for the, for the enterprise, cuz they're not hyperscaler. Okay. They have all the enterprise customers who come here, we see them, we speak to them. We know them will mingle, but >>They have really good relationships with all the >>Hyperscale. And so those, those guys need a way to the cloud in a way that's cloud operation though. So, so if you say enterprises need their own super cloud, I would say VMware might wanna raise their hands saying we're the vendor to provide that. Yes, totally. And then that's the middleware role. So middleware isn't your classic stack middleware it's middle tissue. So you got, it's not a stack model anymore. It's completely different. >>Maybe, maybe my, my it's >>Not a stack >>Industry. Maybe my industry super cloud is too aspirational, but so let's assume for a second. You're not gonna have everybody doing their own clouds, like Goldman Sachs and, and capital one, even though we're seeing some evidence of that, even in that case, connecting my on-prem to the cloud and modernizing my application stack and, and having some kind of consistency between your on-prem and it's just call it hybrid, like real hybrid, true hybrid. They should dominate that. I mean, who is who, if it's not it's VMware and it's what red hat who else? >>I think red hat wants it too. >>Yeah. Well, red hat and red, hat's doing it with IBM consulting and they gotta be, they have great advantage there for all the banks. Awesome. But what, what about the other 500,000 customers that are >>Out there? If VMware could do what they did with the hypervisor, with virtualization and create the new thing for super cloud, AKA connecting clouds together. That's a, that's a holy grail move right >>There. But what about this PA layer? This Tansu and area which somebody on Twitter, there was a little SNAR come that's V realized just renamed, which is not. I mean, it's, it's from talking to Raghu unless he's just totally BSing us, which I don't think he is. That's not who he is. It's this new federated architecture and it's this, their super PAs layer and, and, and it's purpose built for what they're trying to do across clouds. This is your wheelhouse. What, what do you make of that? >>I think Tansu is a great effort. They have put in lot of other older products under that one umbrella Tansu is not a product actually confuses the heck out of the market. That it's not a product. It's a set of other products put under one umbrella. Now they have created another umbrella term with the newer sort of, >>So really is some yeah. >>Two >>Umbrella on there. So it's what it's pivotal. It's vRealize it's >>Yeah. We realize pivotal and, and, and older stack, actually they have some open source components in there. So, >>So they claim that this ragus claim, it's this new architecture, this new federated architecture graph database, low latency, real time ingestion. Well, >>AJ, AJ that's AJ's department, >>It sounded good. I mean, this is that >>Actually I think the newer, newer stuff, what they announced, that's very promising because it seems like they're building something from scratch. So, >>And it won't be, it won't be hardened for, but, but >>It won't be hardened for, but, >>But those, but they have a track record delivering. I mean, they gotta say that about yeah. >>They're engineering focus company. They have engineering culture. They're their software engineers are top. Not top not, >>Yes. >>What? >>Yeah. It's all relatives. If they, if the VMware stays the way they are. Well, >>Yeah, >>We'll get to that a second. What >>Do you mean? What are you talking >>About? They don't get gutted >>The elephant in the room if they don't get gutted and then, then we'll see it happens there. But right now I love, we love VMware. We've been covering them for 12 years and we've seen the trials, not without their own issues to work on. I mean, everyone needs to work on stuff, but you know, world class, they're very proud of their innovation, but I wanna ask you, what was your observations walking around the floor, talking to people? What was the sense of the messaging? Is it real in their minds? Are they leaning in, are they like enthused? Are they nervous, apprehensive? How would you categorize the attitude of the folks here that you've talked to or observed? >>Yeah. It at the individual product level, like the people are very confident what they're building, what they're delivering, but when it comes to the telling a cohesive story, if you go to all the VMware booth there, like it's hard to find anybody who can tell what, what are all the services under tens and how they are interconnected and what facilities they provide or they can't. They, I mean, most of the people who are there, they can are walking through the economic side of things, like how it will help you save money or, or how the TCR ROI will improve. They are very focused on because of the nature of the company, right. They're very focused on the technology only. So I think that that's the, that's what I learned. And another sort of gripe or negative I have about VMware is that they have their product portfolio is so vast and they are even spreading more thinly. And they're forced to go to the left towards developers because of the sheer force of hyperscalers. On one side on the, on the right side, they are forced to work with hyperscalers to do more like ops related improvements. They didn't mention AI or, or data. >>Yeah. Data storage management. >>That that was weak. That's true. During the, the keynote as well. >>And they didn't mention security and their security story, strong >>Security. I think they mentioned it briefly very briefly, very briefly. But I think their SCO story is good actually, but no is they didn't mention it properly, I guess. >>Yeah. There wasn't prominent in the keynote. It was, you know, and again, I understand why data wasn't P I, they wanted to say about data, >>Didn't make room for the developer story. I think this was very much a theatrical maneuver for Hawk and the employee morale and the ecosystem morale, Dave, then it had to do with the nuts bolt of security. They can come back to get that security. In my opinion, you know, I, I don't think that was as bad of a call as bearing the vSphere, giving more demos, which they did do later. But the keynote I thought was, was well done as targeted for all the negative sentiment around Broadcom and Broadcom had this, the acquisition agreement that they're, they are doing, they agree >>Was well done. I mean, >>You know, if I VMware, I would've done the same thing, look at this is a bright future. We're given that we're look at what we got. If you got this, it's on you. >>And I agree with you, but the, the, again, I don't, I don't see how you can't make security front and center. When it is the number one issue for CIOs, CSOs, CSOs boards or directors, they just, it was a miss. They missed it. Yeah. Okay. And they said, oh, well, there's only so much time, but, and they had to put the application development focus on there. I get that. But >>Another thing is, I think just keynote is just one sort of thing. One moment in this whole sort of continuous period, right. They, I think they need to have that narrative, like messaging done periodically, just like Amazon does, you know, like frequent events tapping into the practitioners on regional basis. They have to do that. Maybe it's a funding issue. Maybe it is some weakness on the, no, >>I think they planning, I talked to, we talked to the CMO and she said, Explorer is gonna be a road show. They're gonna go international with, it's gonna take a global, they're gonna have a lot of wood behind the arrow. They're gonna spend a lot of money on Explorer is what, they're, what we're seeing. And that's a good thing. You got a new brand, you gotta build it. >>You know, I would've done, I would've had, I would've had a shorter keynote on day one and doing, and then I would've done like a security day, day two. I would've dedicated the whole morning, day two keynote to security cuz their stories I think is that strong? >>Yeah. >>Yeah. And I don't know the developers side of things. I think it's hard for VMware to go too much to the left. The spend on the left is very scattered. You know, if you notice the tools, developers change their tools on freaking monthly basis, right? Yeah. Yeah. So it's hard to sustain that they on the very left side and the, the, the >>It's hard for companies like VMware to your point. And then this came up in super cloud and ins Rayme mentioned that developers drive everything, the patterns, what they like and you know, the old cliche meet them where they are. You know, honestly, this is kind of what AJ says is the right they're doing. And it's the right strategy meeting that develops where they are means give them something that they like. They like self-service they like to try stuff. They like to, they don't like it. They'll throw it away. Look at the success that comes like data, dog companies like that have that kind of offering with freemium and self-service to, to continue the wins versus jamming the tooling down their throat and selling >>Totally self-serve infrastructure for the, in a way, you know, you said they missed cloud, which they did V cloud air. And then they thought of got it. Right. It kind of did the same thing with pivotal. Right. It was almost like they forced to take pivotal, you know, by pivotal, right. For 2 billion or whatever it was. All right. Do something with it. Okay. We're gonna try to do something with it and they try to go out and compete. And now they're saying, Hey, let's just open it up. Whatever they want to use, let 'em use it. So unlike and I said this yesterday, unlike snowflake has to attract developers to build on their unique platform. Okay. I think VMware's taken a different approach saying use whatever you want to use. We're gonna help the ops guys. And that, to me, a new op >>Very sensitive, >>The new ops, the new ops guys. Yes. Yes. >>I think another challenge on the right right. Is on, on the op site is like, if, if you are cloud native, you are a new company. You just, when you're a startup, you are cloud native, right. Then it's hard for VMware to convince them to, Hey, you know, come to us and use this. Right. It's very hard. It is. They're a good play for a while. At least they, they can prolong their life by innovating along the way because of the, the skills gravity, I call it of the developers and operators actually that's their, they, they have a loyal community they have and all that stuff. And by the way, the name change for the show. I think they're trying to get out of that sort of culty kind of nature of the, their communities that they force. The communities actually can force the companies, not to do certain things certain way. And I've seen that happening. And >>Well, I think, I think they're gonna learn and they already walked back their messaging. Not that they said anything overtly, but you know, the Lori, the CMO clarified this significantly, which was, they never said that they wanted to replace VM world. Although the name change implies that. And what they re amplified after the fact is that this is gonna be a continuation of the community. And so, you know, it's nuanced, they're splitting hairs, but that's, to me walking back the, you know, the, the loyalty and, and look at let's face it. Anytime you have a loyal community, you do anything of change. People are gonna be bitching and moaning. Yeah. >>But I mean, knew, worked, explore, >>Work. It wasn't bad at all. It was not a bad look. It wasn't disastrous call. Okay. Not at all. I'm critical of the name change at first, but the graphics are amazing. They did an exceptional job on the branding. They did, did an exceptional job on how they handled the new logo, the new name, the position they, and a lot of people >>Showed >>Up. Yeah. It worked >>A busy busier than all time >>It worked. And I think they, they threaded the needle, given everything they had going on. I thought the event team did an exceptional job here. I mean, just really impressive. So hats up to the event team at, at VMware pulling off now, did they make profit? I don't know. It doesn't matter, you know, again, so much going on with Broadcom, but here being in Moscone west, we see people coming down the stairs here, Dave's sessions, you know, lot of people, a lot of buzz on the content sold out sessions. So again, that's the ecosystem. The people giving the talks, you know, the people in the V brown bag, you know, got the, the V tug. They had their meeting, you know, this week here, >>Actually the, the, the red hat, the, the integration with the red hat is another highlight of, of, they announced that, that you can run that style >>OpenShift >>And red hats, not here, >>Red hat now here, but yeah, but, but, but >>It was more developers, more, you know, >>About time. I would say, why, why did it take so long? That should >>Have happened. All right. Final question. So what's the bottom line. Give us the summary. What's your take, what's your analysis of VMware explore the event, what they did, what it means, what it's gonna mean when the event's over, what's gonna happen. >>I think VMware with the VMware Explorer have bought the time with the messaging. You know, they have promised certain things with newer announcements and now it, it, it is up to them to deliver that in a very sort of fast manner and build more hooks into other sort of platforms. Right? So that is very important. You cannot just be closed system people. Don't like those systems. You have to be part of the ecosystem. And especially when you are sitting on top of the actually four or four or more public clouds, Alibaba cloud was, they were saying that they're the only VMware is only VMware based offering in mainland China on top of the Alibaba. And they, they can go to other ones as well. So I think, especially when they're sitting on top of other cloud providers, they have to build hooks into other platforms. And if they can build a marketplace of their own, that'll be even better. I think they, >>And they've got the ecosystem for it. I mean, you saw it last night. I mean, all the, all the parties were hopping. I mean, there was, there's >>A lot of buzz. I mean, I pressed, I pressed them Dave hard. I had my little, my zingers. I wanted to push the buttons on one question that was targeted towards the answer of, are they gonna try to do much more highly competitive maneuvering, you know, get that position in the middleware. Are they gonna be more aggressive with frontal competitiveness or are they gonna take the, the strategy of open collaborative and every single data point points to collaborative totally hit Culbert. I wanna do out in the open. We're not just not, we're not one company. So I think that's the right play. If they came out and said, we're gonna be this, you know? >>Yeah. The one, the last thing, actually, the, the one last little idea I'm putting out out there since I went to the Dell world, was that there's a economics of creation of software. There's economics of operations of software. And they are very good on the operation economics of operations side of things that when I say economics, it doesn't mean money only. It also means a productivity practitioner, growth. Everything is in there. So I think these vendors who are not hyperscalers, they have to distinguish these two things and realize that they're very good on the right side economics of operations. And, and that will go a long way. Actually. I think they muddy the waters by when DevOps, DevOps, and then it's >>Just, well, I think Dave, we always we've had moments in time over the past 12 years covering VMware's annual conference, formally world now floor, where there were moments of that's pat Gelsinger, spinal speech. Yeah. And I remember he was under a siege of being fired. Yeah. There was a point in time where it was touch and go, and then everything kind of came together. That was a moment. I think we're at a moment in time here with VMware Dave, where we're gonna see what Broadcom does, because I think what hop 10 and Broadcom saw this week was an EBI, a number on the table that they know they can probably get or squeeze. And then they saw a future value and net present value of future state that you could, you gotta roll back and do the analysis saying, okay, how much is it worth all this new stuff worth? Is that gonna contribute to the EBITDA number that they want on the number? So this is gonna be a very interesting test because VMware did it, an exceptional job of laying out that they got some jewels in the oven. You >>Think about how resilient this company has been. I mean, em, you know, EMC picked them up for a song. It was 640 million or whatever it was, you know, about the public. And then you, another epic moment you'll recall. This was when Joe Tuchi was like the mafia Don up on stage. And Michael Dell was there, John Chambers with all the ecosystem CEOs and there was Tucci. And then of course, Michael Dell ends up owning this whole thing, right? I mean, when John Chambers should have owned the whole thing, I mean, it's just, it's been incredible. And then Dell uses VMware as a piggy bank to restructure its balance sheet, to pay off the EMC debt and then sells the thing for $60 billion. And now it's like, okay, we're finally free of all this stuff. Okay. Now Broadcom's gonna buy you. And, >>And if Michael Dell keeps all in stock, he'll be the largest shareholder of Broadcom and own it off. >>Well, and that's probably, you know, that's a good question is, is it's gonna, it probably a very tax efficient transaction. If he takes all stock and then he can, you know, own against it. I mean, that's, that's, >>That's what a history we're gonna leave it there. Start be great to have you Dave great analysis. Okay. We'll be back with more coverage here. Day two, winding down after the short break.

>> Narrator: Silicon Angle Media presents TheCUBE! Covering Alibaba Cloud's annual conference. Brought to you by Intel. Now, here's John Furrier.... >> Hi, I'm John Furrier of Silicon Angle Media based in the United States in Silicon Valley in Palo Alto, California. I'm also co-host of TheCUBE where we go out through the event and extract the signal from the noise. We're here in China, we are here with a business development director of America's for Alibaba Cloud International, Karen Lu. Thanks for taking the time. >> Karen: Sure, absolutely. >> So, it's exciting for us from the US to come to China to hear the (mumbles), but I'm blown away by the culture. It's not a B-to-B tech conference. It's not boring. It's exciting. Talk about the Alibaba Cloud. What's so special about Alibaba Cloud? >> Sure. Alibaba Cloud is actually the encumbered cloud provider in China, and further more we extend our reach into global market since two years ago, and our strategy for globalize our cloud services is really to bridge up the business communities from overseas to China, from US to China, from US to Asia-Pacific, and to connect the rest of the world as well. Our goal is set up the platform to enable our enterprise customers, our SMEs, small and medium customer base be able to utilize our platform to develop their applications, their vertical solutions to benefit their end users. >> Alibaba Cloud has come such a long way since 2009. So much has happened, Alibaba grew up as a company. It's not just e-commerce. It's intersecting e-commerce, entertainment and web services, which is the magical formula that consumers want. They don't want just a business solution or just do e-commerce. You guys have weaved that formula together. What's special about that formula, and why is Alibaba important to the folks in the United States? >> I think it's all about the ecosystem and what makes the people, the people's community, and business community benefit from the services we provided to the world, right? Not just the e-commerce platform that have been running for the past 18 years, but also entertaining, to the map services, location services, the data services like Ali Cloud is providing, and be able to put out those elements together, and benefit people's lives, and help to improve users' experience from globally. >> It's been impressive here in China. Now as you go outside of China in the globalization plan, what's the strategy, what's the tactics? What are you going to do? >> I think our value is to, as I mentioned earlier, bridge up the business communities, especially to enable the outside world benefit a huge market from Mainland China and rest of the world as well, so I think I think our key value is to enable the business communities and be able to help them reach out outside the world. That being said, one of our key globalization strategy is to be able to help the SME's, small and medium companies to benefit the new technologies to the level that they won't be able to get in the past. It's the old technologies. >> John: What's some of the statistics or facts, fun facts, or Alibaba stats in the US, North America, your presence there, can you share what the current situation is? >> Sure. I think things about two years ago, when we extend our reach in two your market, we now have more than two thousand customers from individual to startup, to medium enterprises, and to some very large enterprises in the world as well. People are from the communities get to know Alibaba Cloud and get to know Alibaba not only provide to the e-commerce services, the EWTP platform to the world. We're also brought the data technologies. We also provided the technologies to the world that benefit their reach to the world. >> Everyone talks about data-driven. You guys have a very specific data formula, data fueling, not just getting the data from engagement data and user data, but fueling data in for user experience. The question is as you go outside of China into the US, certainly you have a developer ecosystem, you have a business ecosystem. >> Correct. >> How do the folks benefit locally in the US, to our business, do they have have access to China? Is it the services, is it the technology? Can you share the benefits to the developers and to the businesses? >> Sure absolutely. We ran a program called the China Connect, and that's the program we help the business communities you have, from the IVs, the independent after vendors, from the sales providers and developers' opportunity of communities to be able to develop their applications and software, and bring those benefits to China market. Through this process, it's hard to navigate a brand new market, especially in China, without knowing the people, the communities, the culture, the business practices here, right? We actually provide a platform, a program to help them to get to know the market, and help them to land their business in China through this program, and help them, of course, expertise their business roles in China. >> A lot of people want to know what's inside their cloud. It's one of those things where this mysterious cloud. The security's a concern, but partnerships are critical. Talk about what's inside your cloud. Intel's a big partner. What's the Alibaba-Intel partnership like? >> It's a fantastic partnership. We have been established over the past years, and Intel is one of our strategic alliance in the marketplace. They provide us a lot from hardware to technology, in terms of helping us to establish the platform with the business communities, not only China, but globally, so we really appreciate Intel's partnership, and moving forward we are looking for more reciprocal partnership with Intel to be able to form more strategic partnership to be able to benefit the business communities, and people's communities as well. >> For the folks in the US, I'll say that this is an amazing conference. It's got a million people here. I don't even know the numbers. I'm sure you have the numbers handy, but it's a mix of developers. You have a crowded house here with developers, but you also have some business people. You have key partners. I saw some US companies here. What's the vibe at the event? What's the feeling here? You got a music festival three nights. It's not a boring tech conference. Is that by design? Share the stats, how many people are here? >> I guess this is the excitement of this, the conference, annually, we actually invite a lot of our customers from US, and the rest of the world to join us to share the excitement from China, to share the experience from Alibaba. Just like Jack said, the vision for us is to make people's lives more healthier and happier. The 2H strategy from us, right, is not just the hardworking. It's also the fun. It's also the the excitement for us to share these technologies, to share this platform, and to enable people to enjoy this technology. >> The scene I see here is interesting. I've seen at Apple, in the late 90's when Steve Jobs transformed that company, he had the vision of technology meeting liberal arts. That became their calling card. You guys have art and science come in together. It's not just scientists and developers. You have artists here because user experience is super important >> exactly. >> Is that part of the culture as science and art comes together because Jack is a charismatic leader. He's a culptive personality. Young Company. >> Karen: It is. >> Share the culture. >> It is. Just like Jack and other topic executives has been sharing with the community, we want to make sure technology is inclusive elements to everyone in the community, not just for the programmers or developers, or the very high-tech companies, right? It should benefit the entire society, and fun, of course, always as part of it to make people's life happier, and to make users' experience more satisfied. >> You had a career in international technology industry for a while. You see how it's played out in the past. We're in a different now. It's a global world. The internet has opened up a lot of good things, and sometimes not so good things. The US have the selection in fake news, but as the culture starts connecting, a new kind of normal is evolving. How does Alibaba see themselves in this new world order? >> I think we see ourselves as the enabler and platform to bring the technology, and bring the people, and bring the happiness together to benefit everyone in the world, not just the tech sectors, or just the e-commerce sectors, or just one of the single verticals. We are trying to bring the technologies, and the enablement, the platform that everybody can enjoy. That's the core value for us as the inclusive technology provider. >> For the folks in the United States that will see this video, share something that they may not know about Alibaba. Might be the first time in getting to see some of the culture and some of the commentary, what should they know about Alibaba as you guys move in and become global? They're going to see some services. Is it the services, is it the people, the culture, what should they engage with Alibaba at cloud? How should they see Alibaba Cloud? >> First of all, we are one of the top three cloud providers in the world. If you look at the latest (speaks in foreign language) released a couple of weeks ago, and that's why globalization is critical for us, and we want to be able to reach out to the overseas communities, and we want to build up the trust and the confidence with the local business communities, like the rating, where in US market for instance. For us, become the global family is critical for us, and this is our vision to bring the values to them as well. >> That's fantastic, spectacular culture, and the ecosystem is just now growing, open-source software is growing exponentially, global fabric of communities developing. It is opportunities for US companies and developers to access China. Talk a little bit more about the potential that entrepreneurs and businesses could have in this global framework. >> Sure. The beauty of cloud is actually the ecosystem. It's not just one company or one vertical. For us, for instance, we try to enable the small business, especially those startup business by offering them the free resources from our infrastructure at global level, be able to enable those young peoples, especially, to create their own ideas, to be innovative, and to utilize our resources, be able to access the technologies like the way the big companies has been invested into. This is, I think, as an example for us to commit to this global market. I think for us to be part of that family, especially in Silicon Valley is critical because of the technologies, because of innovations, and because of the mindset in Silicon Valley. That's why we set up our R&D centers, we set up our frontend back office in Silicon Valley as well be able to part of that reach in, and not only to learn the technologies, but sense the mindset in our reach in. I think that's critical for us as well as the Chinese headquarter of the company, but with a global vision. >> And where in Silicon Valley is your office? >> We're headquartered in San Mateo, California for US operations. >> And entrepreneurship is changing, and it's global. It's exciting. What's the benefit to entrepreneurship? Certainly, ventured capitalists are highly interested in the China market. They've been in here for a while. Is it coming together? >> Yes, it is indeed. Actually, not only we funding a lot of the new tech companies, we also been able to help them to find their partners to build up a extended ecosystem. In Silicon Valley, in West Coast reach ins, as well as extend from the inner US, in mid-western reach in, Chicago for instance, to New York coastal areas as well. >> I noticed on the sponsorship list and partner list in your ecosystem, a logo that is new, but it's super important in the US. It's growing like crazy. The Cloud Native Compute Foundation's here, and that's the Linux Foundation. They're partnering with you. The cloud native developer market is evolving very, very quickly. They're different than the old classic IT developers. A new generation, it's not IT anymore. It's data that's driving it, and it's open-source. How do you guys engage with that community because, clearly, they win with you. >> Yes. We're actually working with a lot of open-source partners like Docker, (mumbles), and others, be able to help them to bring the communities to bring their customers onto our infrastructures and create this platform to help the developer communities to develop their applications. It's a lot of vertical focus, the solution department tasks right now. >> Excuse me, you mentioned small, medium size enterprises and business, but the big enterprises are transforming as well. How do you see Alibaba helping them because they're going cloud native? They're going private cloud on premise. You have quantum computing. You even have IOT. You have a lot of things. How's the digital transformation message for enterprises and for small businesses that don't want to pay the technology tax. >> I think for large enterprises, the most strategy you have been seeing from the marketplace, one is multi-cloud strategy. People need redundancy. People want to reduce the dependencies for one or two cloud providers, and we work with other cloud providers in the community to provide interval qualities to support this multi-cloud strategies. On the other side, couple years back, people didn't know what's in a cloud. And then, people rush to cloud for everything. And now, people come back and review the strategies and find out hybrid-cloud strategy is more suitable for large enterprises. They have their on-prem architect and infrastructure. Meanwhile, they move some of their applications to cloud. It's a good combination of on-prem physical infrastructure cloud topology. We have been seeing a trend for both for large enterprise clients. For small business, especially for small business, they don't have the upfront huge investment paying to the infrastructure, and we provide them the instant access to the infrastructure, not only from computing storage network and the database perspective, more importantly from security perspective. >> The Alibaba Infrastructure services, I saw a part of the display here, very prominent in that equation. You guys have the scale. What can you share about the under-the-hood? What's the technology look like? What's the engine of Alibaba Cloud? How mature is it? What's to do? Where's the strategic direction? Block-chain is important, but now, that's changing everything It's all this new wave's coming. >> Just like the (speaks in foreign language) indicated two months ago, if you look at the overall qualifications to be a world lead cloud provider, we're number four, after AWS, Microsoft Azure, and Google Cloud, but if you look at market share and revenue, we're number three. That being said, we actually provide a very comprehensive technology, and the infrastructure to the business communities, and people's communities. For instance, from the global footprint perspective, right now, we have 14 reach ins, pretty much cover all the major market in the world. By end of this year into beginning of next year, we're going to activate two to three reach ins, make it 16 to 17 reach ins globally, that we can offer the global cloud solutions for the big and small businesses. >> That's exciting, and Silicon Valley certainly import our home base. Are you guys hiring, is there expanding? Share a little bit of a public service announcement on what's going on in the Silicon Valley area. You guys hiring, looking for engineers, what kind of people are you looking for? >> Yes, (laughs) great question. Actually, we are hiring, and we're looking for talented professionals join us from those marketing, business development, to cloud architect, to technical account management, to marketing premises, so we want to build up a business that we can truly build up the trust towards the local business communities. That's why we hire a lot of local talented young professionals, and to help them to be able to fit in to the culture, the unique culture of Alibaba, and also be able to contribute to this journey, very exciting journey... >> China has always been big. Everyone in the United States knows. The numbers are big here in terms of mobile deployment, app size. A lot of the people in the US look at China and say, "Wow, we can collaborate with China." It's a very nice distribution system, but they got to take care of their needs at home. >> Exactly. >> This is a big part of the undercurrent we're hearing. How do you guys help? >> Globalization is always critical for any business, even for some small business. Just like Jack Ma said this morning at his speech, even for small business, they need to globalize. They need to reach out to more business communities, and more customers. For us, because of the huge market in China, because of the EWTP platform we set up globally, because Alibaba Cloud Infrastructure and our global footprint, we're actually being able to help our customers, not only access the infrastructure from cloud perspective, but also help them to leverage our ecosystem from different business unit, and more partnership, to be able to help them to expertise their business in China and globally. >> That's exciting. Finally, developers are a big hot button. Everyone always says, I hear comments like, "We have to own the developer community," not that you could own the developer. No one wants to be owned, but what they mean is they want to win over the hearts and minds of developers. A lot of competition, and developers want programmable infrastructure. In dev ops world, that's called dev ops. That is really the new normal in developer community. How do you guys attack that developer market? >> We actually want to enable the developers community, not own or just win over. We want constantly enable them with the new platform, the new business models, the new programs that we can bring them together. That's our mission, enablement. >> Congratulations on a spectacular formula. Thanks for having us here, TheCUBE and Silicon Angle, and thanks for your time. >> Thank you so much for the opportunity. >> Karen Lu here in China with TheCUBE. Exclusive coverage in China, bringing the stories of the most important trends and tech in Alibaba Cloud. Really changing the game with their formula of e-commerce, entertainment, and entertainment. This is not B-to-B, boring to boring. It's exciting, in a music festival. 60 thousand people are here at this conference. Developers in the world watching, I'm John Furrier with Silicon Angle. Thanks for watching. (techno music)

>> SiliconANGLE Media presents theCUBE! Covering the Alibaba Cloud annual conference. Brought to you by Intel. Now, here's John Furrier... >> Hello everyone, welcome to exclusive coverage with SiliconANGLE, Wikibon, and theCUBE here in Hangzhou, China for Alibaba Cloud's annual event here in Cloud City, the whole town is a Cloud. This is their event with developers, music festivals, and again, theCUBE coverage. Our next guest is Dhiraj Mallick, who is the Vice President of the Data Center Group, and the General Manager of Innovation, Pathfinding, and Architecture Group. That's a mouthful. Basically the CTO of the Data Center Group, trying to figure out the next big thing. >> That's right, John. >> Thanks for spending the time. >> It's my pleasure. >> We're here in China, it's-- You know in the U.S., we're looking at China, and we say okay, the fourth largest Cloud, Alibaba Cloud? >> Yes. >> Going outside of Mainland China, going global. You guys are strategic partners with them. >> Yes. >> They need a lot of compute, they need a lot of technology. Is this the path that you're finding for Intel? >> Yeah, so we've been collaborators with Alibaba for over 10 years, and we view them as a very strategic partner. They're one of the Super Seven, which is our top seven Cloud providers, and certainly in China, they're a very relevant customer for many years. We engage with them on a variety of fronts. On the technology side, we engage with them on what their key pinpoints are, what is the problems they want to be solving three to five years out, and then we co-develop, or co-architect solutions with them. >> So, I want to get your take on the event here in China, and how it relates to the global landscape, because I, it's my first time here, and I was taken back by the booth. I walked through Alibaba's booth, and obviously Jack Ma is inspirational. Steve Jobs like the culture, and artistry and science coming together, but I walked through the booth, it's almost too good to be true. They've got Quantum Computing, a Patent Wall, they've got Hybrid Cloud, they got security, they have IoT examples with The City Brain, a lot of great tech here at Alibaba Cloud. >> So I think the technologies that they're investing in are very, very impressive. Most cloud companies are probably not as far along as them, and looking at such a broad range of technologies, the Brain Project is really exciting, because it's going to be the Nexus of smart cities, both in China, as well as globally. The second thing that's very interesting is their research and investments in Quantum. While Quantum is not here today, it's certainly on the frontier, and Intel also has significant investments in sort of unpacking where Quantum will go, and what promises it offers to address. >> What I find interesting is that also hearing the positioning of, I kind of squint through the positioning, they're almost talking Cloud-native, DevOps, but they have all this goodness under the hood, and they're kind of talking IT-transitioning to Data Technology. Everything's about data to these guys, not just collecting data, using data with software. Now, that's really critical, because isn't that software-defined, data-driven is a hot trend? >> Yes, software-defined and data-driven is a very hot trend, in fact at Intel our CEO and us all believe that we've entered the data economy, and that the explosion in data is, and the thirst for analyzing that data to be able to drive smart business analytics is really the key to this digital revolution. I was reading an industry report by one of the analysts that said by 2019 there would have been over 100 billion dollars spent on business intelligence. And so, the real key is this data economy. >> The intersection of things, and even industrial internet, IIot, Industrial Iot, with artificial intelligence AI, intelligence Intel inside that word, interesting play on words-- >> Yes. >> Is coming together, and we've covered what you guys were doing on Mobile World Congress this year, where 5G was clearly an end-to-end architecture. You got FPGAs, all this goodness here going on. So that's 5G, and that's going to fuel a lot of IoT if you think of it like that way, but now AI. >> Yes. >> It's Software. How does that connect? Because that's the path we see forward on the Wikibon analyst side, we see software eating the world, but data eating software. And now you got 5G creating more data. >> Yeah, so the way we look at it at Intel is, we have data-center technologies that are fueled by the growth at the Edge by IoT devices, because they're creating demand for more processing capability to be able to unpack and analyze that information, and it's a self-fulfilling circle. We call it the virtual cycle of growth, because the data center feeds IoT demand and then IoT feeds the data center. And so it's the combination of those. What 5G does, is 5G forms the connectivity fabric between the data center and the Edge. It allows data to be pre-positioned at the correct places in the network, so that you minimize latencies through the network, and can process or do the analytics on it as quickly as you possibly can. >> So we were talking before we came on camera about Jack Ma, they call him Jackie Ma here, keynote being very inspirational, and talking moving to a new industrial era, a digital economy, all that good stuff, very, very inspirational. Let's translate that into the data center transformation, because we're seeing the data center and the Cloud with Hybrid Cloud become really critical to support what you were just talking about which is, how do you put it all together? It sounds so easy, but it really is difficult. >> It is, and so our vision is that in order to be able to fulfill this data economy, we will need to have five key innovations in the data center. The first innovation, in no particular order, is that the data center will be frictionless. And what I mean by frictionless, is that there will be zero to low latencies in order to provide that real-time experience at the Edge. So latency is extremely critical, and the way we believe that that can be achieved is by moving from copper to light. And Intel has significant investments in leadership products and silicon photonics that will enable switches to be based on photonics. It'll enable CPUs, and server hosts to be based on light. So we believe that light is a critical aspect to this success. The second aspect of frictionless is the need for liquid cooling and that was in the keynotes from Simon Hu this morning, that the liquid cooling is going to be essential to be able to enable a lot more horsepower in these data centers to be able to handle the volume of data that's coming. >> So you guys obviously with the photonics and the liquid cooling, you guys have been working on this in your labs for a long time, it's great R&D, but you need the connective tissue because with 5G you're now talking about a ubiquitous RF cloud, powering autonomous vehicles. We're seeing the Brain Project here, ET Brain, the City Brain-- >> Yes. >> Which is essentially IoT and big data being a big application that they're showcasing. What's the connective tissue? How does that work, from the data center, to the Edge? What's Intel's position? How do you see it? And what's going to unfold in front of our eyes? >> Yeah, so two things, so number one, I believe that the data center is boundary-less. It's not based on four physical walls. It's a connected link between the data center, and all the Edge devices that you called IoT. In order to fulfill this, you have to have 5G technology. We're invested in Silicon, in radio technologies, as well as in driving the 5G industry in consortia, to be able to bring 5G solutions to market. We think that 5G, as well as a tiered architecture between the Edge to the center, where you do some processing at the Edge, the radio stations, some in intermediate data centers, and then some in the back end Cloud data center, is what's going to be essential, and Intel has significant investments, both in developing this distributed hierarchical architecture, as well as in 5G. >> That's a great point. I want to just unpack that, and double-click on it a little bit, because you mentioned data at the Edge, and you also said earlier, low latency. Okay, a lot of people have been talking about, it costs you speed and time to move data around. So there's no real one general architecturing, where you have to kind of decide the architecture for the use case. >> Yes. >> So, the beauty is in the eye of the beholder, whoever has the workloads or the equipment. >> Yes. >> How do you look at that, because now you're thinking about, if I don't want to move data around, maybe you shouldn't, maybe you want to move data around. How does that fit with the Cloud of model, because we're seeing Cloud being a great use case for IoT in one instance, and maybe not in another. How do you think about that? How should practitioners think about the data architecture? >> Yeah, so our vision is that the Cloud changes from a centralized Cloud, to a distributed Cloud, and is amorphoused between the Edge where the IoT devices are, and the backend, and the way to think about it perhaps, is to say that storage as people have envisioned it, as being centralized, that paradigm has to change, and storage has to become distributed, such that data is available at different points in the network, and my vision is that you don't want to move data around, you want to minimize data movement for most use cases, and you want to have it pre-positioned on the 5G network, and you want to move the compute to the data, that's more energy-efficient. >> So I got to ask you, as someone who's doing the path-finding, which is the future path for Intel, and innovation and architecture. I was talking with some practitioners recently at another event, and trying to find someone, because I don't speak Chinese very well. But they asked me the same question. It matters what's in my Cloud. And what they mean by their Cloud, either on-premise private Cloud that they're putting together, operating model of their business, now going Cloud-like. But also as they pick their Cloud provider, they want to have multi-Cloud, and so what's in their Cloud, and their Cloud provider's matters. You guys are the inside of the Cloud across many spectrums, Intel. >> Yes. >> How should a customer think about that question? What's in my Cloud? Why should it matter, and it should matter. What's your take on that, and what should they look for? >> Yeah, so my take is that for years we've had the debate of whether it's public Cloud, or private Cloud, or on-prem Cloud. Our view is that the world is Hybrid, which is why we are big supporters of Alibaba, and the Hybrid Cloud movement, and as such, if it's Hybrid, it sort of suggests that the end state is that there'll be about an equal amount of applications that run on public versus private, and so I think the number of applications have an affinity to move into the public Cloud, like mail, and then there's other applications that you might care more about the compliance and security that you would say have an affinity to being on-prem. >> Also you mentioned that there's no walls, it's boundary-less in the data center. Okay, there's no door, there's no mote, you can't put a firewall on that door, unlimited access surface area for security. Obviously security hacks are big. We found out today that Israel had hacked, and notified the NSA. Hacking is a huge problem. Equifax is going to be another one. How should customers protect themselves? >> It's a very fair question John. This is one of the side-effects of saying that the data center will be boundary-less. We now have to have security technologies that can, we've effectively expanded the attacks of security in a significant way, but I don't think the answer is to say we need to move backwards and not adopt this boundary-less Cloud. I think we want to adopt it, and we want to develop technologies. So at Intel, we are developing multiple isolation technologies that allow different VM and container tenants to be isolated from other tenants. >> And this was your point earlier, making the device more intelligent, whether that's more on-board memory, and more chips. >> Yes. >> That's what you were kind of referring to, is that right? >> That's correct. >> Okay great, so I want to get one kind of off-the-wall question, since I have you on here. It's just a brain trust here from Intel, which it's great to have him here. Distributed computing has been around for awhile, we know all about that. Network effects, distributed computing, the computer industry. But now we're seeing a trend with decentralization. Blockchain is one shining example. Russia just banned cryptocurrency. This poses a architectural challenge. What's your thoughts on the decentralization, and distributed architectures that are emerging? Opportunity is scary. How should customers think about decentralization? >> Well certainly there's a security challenge, as we just spoke, related to this. But I think the computer industry has oscillated, depending on the era and the needs between centralized and decentralized a number of times now. And we're going through an era where decentralization makes sense, because we expect 30 to 50 billion devices at the Edge, and so you can't handle that with a centralized model, primarily due to three reasons, number one, just moving that volume of data would be very expensive to do over the network. Second there'll be a number of applications that are latency-sensitive. And third, you might care about data federation, and crossing country boundaries in a number of cases. So I think for the use case that we have with IoT, we have to adopt decentralized and distributed. >> So, if The Brain is processing and data, and you've got plenty of it at Intel with more compute power, what's the central nervous system, the metadata? >> Well, actually look at the central nervous system as the 5G distributed network that enables the end-points, or the nerve endings if you will, to be connected to the spinal cord. >> Okay so a final question for you, I really appreciate you spending the time. >> Sure, it's been a pleasure. >> Intel's been a wave company in its generation, and obviously Moore's law, it's not well documented. It seems that Moore's law is every year some journalist claims Moore's law is dead, and that it never goes away, so we expect more and more innovation coming from Intel. You guys have surfed many waves. In your opinion, what waves are coming? Because it feels like the waves are big now, but a lot of people think that there's bigger waves coming. That the big wave set is coming in. What's the technology wave that you're looking at from a path-finding, innovation standpoint, that customers should look for, maybe prepare for. It could be further out coming in. What's the big wave coming in, obviously AI was seeing these things. What's your focus on that? >> So, a number of them. I think, you know distributed computing is not a solved problem yet. But certainly it needs to be solved to be able to address these end-point challenges. Another great example I think, is around visual computing. So in the past, most of the type of data that people handled, was textual. But that's moving to visual very rapidly, and there's so many examples. You brought up the City Brain Project as an example. But video and analyzing images, requires a different kind of art. Different compression techniques. If a human doesn't need to see it, you perhaps don't have to have as high a resolution, and so there's a number of ships in the assumption space. And so I think for me, visual computing is a great opportunity, as well as a wave, that's coming at us. >> And the software too. So the final question, final, final question. Alibaba here, are connecting the dots. You can see where it's going. How do you see the Cloud service provider opportunity, because obviously they're a Cloud service provider on paper, but they're big, they're a Native Cloud now, like with the big guys like Amazon, Google, Microsoft. But we're seeing an emergence of new class of Cloud service provider. Certainly our research is showing that what was a very thin neck in the power laws, now expanding into a much bigger range, where VARs and value-edited software developers are going to start doing their own Cloud-like solutions with the Native Clouds, because they need horizontally scalable data infrastructure, connective tissue, and Edge devices from Intel, but they're going to provide software expertise that's vertically specialized, whether it's traffic, IoT, or oil and gas, or financial, Fintech. The specialism of application developers combined with horizontally scalable Cloud, it seems like a renaissance in the Cloud service provider market. Do you see that as well, and how should the industry think about this potential renaissance? >> So I think there's two possibilities. One is for the vast majority of functions that people run in the public Cloud, I think one possibility is that there's a consolidation amongst a few players. But I think your point's a very good one. That they are specialized services that companies are able to provide, where they're able to carve out a niche, and become a Cloud provider for that particular set of functions, as well as there's a second reason that motivates regional Cloud providers to succeed, again, because of data federation requirements, as well as local proximal, proximity to the end-points. I think these two phenomena are likely to drive the emergence of regional Clouds, as well as specialized Clouds, like you described to perform certain functions. >> And potentially a new kind of ecosystem development. >> Yes. >> And this is, then you guys are all about ecosystems, so is Alibaba. >> That's right. >> Dhiraj, thanks so much for coming on theCUBE, this is exclusive CUBE coverage with SiliconANGLE, and Wikibon here in China with Intel's booth here. Talking about AI, and the future of the data center and Cloud. I'm John Furrier, thanks for watching.

but cute at servicenow knowledge 14 is sponsored by service now here are your hosts Dave vellante and Jeff trick okay we're back this is Dave vellante with Jeff Frick were here live at moscone south and this is the knowledge 14 conference 6600 people here growing was about 4,000 last year you seen this conference grow and about the same pace as a services service now stop line they're growing at sixty percent plus on pace to do over 600 million in revenue this year on pace to be a billion-dollar company and we have the CFO here Mike Scarpelli cube alum Mike great to see you again thank you so this is amazing I mean Moscone is a great venue of the aria last year's kind of intimate you know and now you're really sort of blowing it out I would expect next year you're going to be in the into the big time of conferences well I got a budget for that Tiffany I'm a budget I know it's going to cost more just like the attendance is going up fifty sixty percent the costs are going up as well too but our partners are really important and our partners offset a lot of those costs will get over eight million in sponsorship revenue to offset that so when we expect next year will see a corresponding increase in the sponsorship revenue as well well it's impressive you have a lot of strong partners particularly the system integrator consultancy types you know we saw I hope it will miss somebody definitely saw sent you there last night we start Ernie young giving a presentation k p.m. ET le is about so cloud sherpas yeah the cloud shippers and so we had them on earlier she have a lot of these facilitators which is a great sign for you and they're realizing okay there's there's money to be made around the ServiceNow ecosystem helping customers implement so that's going to make you really happy no you know one of the things that's really important for us with the system integrators is today they haven't really brought us any deals but they've been very influential in accelerating deals and we think that theme is going to continue and based upon what they're seeing they're able to do in the ServiceNow ecosystem in terms of professional service consulting engagement we think that's going to start to motivate them to now bring us into deals that we were never in before but what they have been able to do as well besides just accelerate is have the deals grow beyond IT and we see that numerous on global 2000 accounts for us and you're not trying to land grab the professional services business that's clear effect when you talk to some of your customers when I've ever last year when your customer scoop is complaining that your your price is real high on the surface of suck which it probably makes you happy because it leaves more room for you for your partners and that's really not a long-term piece of your revenue II think you've said publicly you want to be less than fifteen percent of your business right yes yes we have a little bit of a ongoing debate internally my preference is not to see the professional service organization grow in terms of headcount with the pure implementation people the area that I would like to see it grow is more on the training side unfortunately some of our customers they insist that we are part of the professional service engagement so those are more the ones that we're going to be involved and if a customer is looking for a lower-cost alternative we want to make it fair for our partner so that we're not competing with them so they can come up with a lower price to offer a good quality service is important though that it's not going for the lowest price our partners need to make investment so it can be a quality implementations this is a number of early implementations that were done by partners that were some of our smaller partners where they really didn't meet the the expectations of those customers that we've had to go in and fix some of those engagements so the number one goal for our professional service is to ensure we have happy customers because happy customers renew and buy more which are two of the key drivers for our growth so you keep growing like crazy blew it out last quarter to get a 181 million in Billings revenues up 60-plus percent you're throwing off cash hitting all your metrics of course the stock went down oh there you go not much more you could do but you got to really be pleased with the consistent performance and really predictability it seems of the company yeah no I'm since I've been the CFO company it's going to be coming on three years suit in the summer the one thing that I will say about this business model is it's extremely predictable in terms of the the forecasting and what helps with that is the fact that we have such high renewal rates that really helps because we really since I've been here we've never lost any major accounts I think our renewal rate has been averaging north of ninety-five percent and in terms of our upsells or up sells have been very consistent on average they run about a third of our business every quarter and that was Frank has made comments before too that if we don't sign on another customer we can still grow twenty-five percent per year plus just based upon the upsell business opportunity that we have within our existing installed base of customers that's penetrating accounts deeper more seats more licenses more processes and applications yeah the main grower of our upsells are the main contributor to our upsells within our customers really has been additional seat licenses because many of our customers we still have even fully penetrated IT and as we roll out more applications or make our applications more feature-rich as we talked about as Frank his keynote he talked a little bit today aitee costing we've always had that as an application but that's going to be coming out as a much more feature-rich application it's going to be a lot more usable to some of our customers when that goes live that's going to drive more licenses because many times it's different people with an IT that are the process users behind that and then it's going outside of IT as well with the adoption of people enterprise service management concept that Frank's been talking about that will drive incremental users as well too we do have some additional products such as orchestration discovery with a vast majority of our growth and customers is additional licensing so very consistent performance like I say the stock pull back a little bits interesting you guys worked a Splunk tableau smoking hot stocks of all pullback obviously it's almost like you trade as a groupie even though completely different companies completely different business models you don't compete really at all but so you kind of got to be flattering to be in that yeah obviously but it's I looked at as X this is good in a way this is a healthy you know pull back it's maybe a buying opportunity for people that wanted to get in and there are a lot of folks that I'm sure they're looking at that do you I mean how much attention do you even pay for it i know most CFOs i took a say look we can't control it all we can control is you know what we can control and that's what we focus on but you even look at things like that you order your thoughts on you know and unfortunately there is a little bit of a psychology going on here with some of our employees and they're always asking and my comment to them is the only price that matters is the day you sell and this pullback that we've seen recently this is not uncommon was I expecting it to happen right now you know I don't if I if I could predict those things a lot of different line of business but what I will say history is the best indicator of the future and even a company like salesforce com one of our large investors last week he sent me an email and said you do realize that in the first five years of sales force being a public it had forgot if it was four or five fifty percent pullbacks in the stock price so this this happens it will happen I guarantee it will happen again sometime in the future but not just with us with all the other companies I'd be more concerned if it was we were the only company that traded down and everyone stayed up but we're all trading down we all came back today it's interesting and you kind of burned the shorts last year and they've made some money now but but you know Peter Lynch they don't ever short great companies and it's very hard to too short great companies your timing has to be perfect so and your core business you know like for instance a workday is is fundamentally very profitable or you know it should be right and because you're spending like crazy on sales and marketing you're expanding into into AP you're expanding your total available market and you're still throwing off cash what if you can talk about that a little bit you had said off camera your goal is to really be you know so throw off little cash basically be cash flow breakeven yes yes so you know you can only grow at a certain pace last quarter we added 150 new people into our sales and marketing organization that was the the largest number that we've ever added in one quarter we actually added 273 net new employees in q1 that was the most we've ever added in a quarter and even with all those ads we still had very good positive cash flow so it's pretty hard to add at any faster pace than what we're doing right now and so you know I just I don't see us being cashflow negative anytime in the future right now unless something happened and write it have to be a pretty major catastrophe thing and it's not going to be specific to service now it will be kind of across the board we're all CIOs stop spending and the other thing I learned here I thought maybe I just wasn't paying attention to earlier conference calls but the AP focus a large percentage of the global 2000 is in asia-pacific so you're out nation-building right I won't if he could talk about that sure so in two thousand and from March 31st 2013 till March 31st 2014 we open up in 10 new countries most of those were in asia-pacific there's still more countries we're going to be going into an asia-pacific and why are we going into these countries we're going into these countries because that's where the global 2000 accounts are that is our strategy because we focus on quality of customers not quantity of customers what I mean by quality of quality customers one that can grow over time to be a very large customer and even in 2013 we went into Italy and people said at the time well why are you going into Italy we went to Italy because they have global 2000 have 30-something global 2000 accounts even though the Italian economy wasn't doing well global 2000 customers still spend it's not specific to that country their global we signed to global 2000 counts in Italy last quarter so we have a history of showing that if we go into those countries we will be successful in winning those global 2000 and will continue there are some global 2000 so in geographies where it's going to take some time before we actually have a physical presence such as mainland China we do not have any sales people in mainland China today Russia we did not have any people in Russia today how about Ukraine you know we have no one in Ukraine today good thing about Hitler you get to go visit there that's your country I wanted to talk about the TAM yesterday last year we had I kind of watched it but but I was asking Colombo questions about the team because it was you know very interesting I saw a lot of potential want to try to understand how big it could be you and I talked about you had said its north eight billion of course the the stock took off i think it probably 10 billion from a value standpoint I didn't my own tam of mid year I did a blog post I had it up to 30 billion so I started to understand it was a top down it wasn't a bottom up but you guys are starting to sort of communicate to him a little bit differently you got had the help desk and then beyond that the IT Service Management and then you you've essentially got the operations strike the operations management and even now sort of enterprise and business management so I wonder if you could talk about how you look at the the tam and any attempts that you've made to quantify it sure so there's really four markets we play in that really intersect with one another in the core of our market is the IT Service Management that's kind of our beachhead and how we go into accounts in that market right now when historically when we went public gartner groups of the world they looked at it as a helpdesk replacement market they were saying as a 1.4 to 1.6 billion dollar market what they were missing is there's many other things in that space IT service management such as ppm such as our cmdb such as asset management a lot of these things aren't in your traditional help desk we think based upon the rate at which we've been extracting from the market that somewhere we can afford a six billion dollar market opportunity just IT Service Management and then IT Service Management is a subset of the overall enterprise service management market that Frank has been talking about we talked about in our analyst state we think that is potentially as high as 10x the size of our IT Service Management so that can get you up to say that 40 billion dollar plus and then you as well have the IT operations management space IT Service Management you just have the legacy vendors down there nothing innovative happening down there service relationship a lot of white space a lot of stuff that's being done in email lotus notes microsoft access sharepoint those are the markets were going after there really are no true systems in and that's in that space it's those one-off custom apps IT operations management there is a lot of innovation happening down that in that space it is very crowded with some new vendors as well as the legacy vendors the area that will plan might be the whole 18 billion dollar market at IDC talks about you know it's still early innings but it's at least two billion of that market 24 billion will be going after and then Frank brought up this concept of the whole business analytics as well too we talked about we did our acquisition in mirror 42 in 2013 and the business analytics kind of sits at the top of enterprise service relationship management the market we can go after in there that's a that's a whole market into itself at least as big as the enterprise service management but we're not going after that whole market it's just the business analytics to the extent it relates to enterprise service management so that's at least a couple billion more unfortunately this is what we believe there is no published reports out there and times going to is going to tell it similar to when Salesforce went public no one believed the opportunity in front of it and now look how big that come have a 30 billion dollar plus company valuations are depends on what time of year it is what the markets doing but over the long term you know you can sort of do valuation analysis it in the CFO world is there some kind of thought in terms of the ratio between an organization's tan and it's in its valuation you know I mean these other things raid obviously the leadership etc but but for the top companies there a relationship I personally don't get wrapped up in valuation you know I can't control that I can't control public company multiples the only thing we have control over is running our own business and we're going to stay very focused on running our business and let other we'll take care of the valuation good business you picked a good one yes no I I'm very pleased with this one excellent all right Mike well listen thanks very much for coming on the cube we're up against the clock and I always appreciate you thank you Dave time up alrighty bryce bravely request with our next guest we're live from tony south this is dave vellante with jeff record right back