[Music] hi I'm Stu Mittleman and welcome to a cube conversation really excited to have to the program a first-time guest and a user Vinny Chopra is an IT engineer with Medallia Vinny thank you so much for joining us thank you and - Vinny's left we have Krishnan bad Rena Ryan in who's a director of product marketing with Nutanix Chris thanks so much for you here okay so we always love to be able to dig in with the customers understand the challenges they're facing Chris let's set the table first I'm very familiar with Nutanix we go to all the new tannic shows and the like but for customers what is Nutanix to them why do they turn to Nutanix okay absolutely so I think it's a great time to be in IT you see new businesses that are sprouting at all the last 10 years or so starting with uber Airbnb specifically the ones we've really heard of that have disrupted some really really big industries right so technology is making it happen while IT teams are the ones that help make that happen and helps those CEOs disrupt they're not in the best of positions to utilize infrastructure they have today the way it's set up to be able to get more done be more agile and truly serve the needs of the business and help create those competitive differentiation which is why neutronics is here to help our partners within companies such as yourself to be able to be those people to lean in and help CEOs really achieve what they're trying to get that yeah that's great yeah we definitely see it used to be okay IT was a cost center IT you know business would actually ask for something in IT would often be the no or be really slow and do they work with that so Vinnie before we dig into the IDE piece of it tell us a little bit about Medallia the business what's happening what's Sherma Delia's been around for about 15 years now we're located in it we're headquartered in San Mateo we used to be in Palo Alto moved last year we have a brand new building right off 101 a 92 we our analytics company and we and there's a lot of lots of fields in analytics we specialize in an area called CX which stands for customer experience and our goal is to make our customers customers happy which therefore makes our customers happy and we specialize in doing surveys and then especially in designing surveys for different types of companies and then and then we analyze that data you know surveys well Vinny I I find there's very few companies that I talked to whose industries are stagnant or not changing much the analytic space space that we cover heavily you know here here on the cube and with our research it's boy has that changed a lot I mean five years ago we were talking very much about Big Data today you know all the AI ml and and things like that what what give us a little bit about what's it like being in that business you know fast driving your silicon valley-based I have to imagine that the business is going through a lot of changes that put stresses and strains on IT oh definitely so I better the IT industry for many years and IT area different big companies Sun Microsystems Juniper Networks NetApp in the past excite calm which was a search engine way back when before Google days I remember excite you know because Microsoft didn't they buy that or things well there was an early cerulean at home there's a partnership with that on but yeah excited people would confuse as to wait excite calm what kind of site was that it's like no no it's a search engine back before by the way audience for those of you that haven't been around a while it wasn't all just being in Google there were a lot of predecessors that there was four or five big search engines at that time so most of my company had been out we've always been packaging stuff in a box and selling it in this is my first time at an analytics company and it's it's like you said it's a fast-moving field things are being the things there's no development staging production type of stuff things are just continuously being put into production changes are made you know customized you know customer's applications and their interface so it's it's a very fast-moving alright and Vinny you say IT engineers your job what does that encompass what your role how many people in the group what is your sure so we have basically two IT groups we have one that manages our production data centers which are which our customers interface with and we have one that supports our engineers so I'm part of that group and it's kind of a week up art of the IT system and engineering team and that involves traditional IT tasks like backups monitoring application install new server installs managing storage networking basically keeping infrastructure and applications running as efficiently as possible and therefore keeping our engineers happy because they can get their work done and their development done okay sounds like a you know pretty typical from from what I hear from companies is it what do you hear from customers structure-wise challenges they're facing absolutely so it's very much in line with what you were just talking about where there's these multiple needs from the business and customer expectations so how do you really help IT organizations be able to keep up with those needs infrastructure needs to be the big quittez data needs to be Vic witness application services need to be Vic Willis and you need to be able to scale out as your business needs needs to do so to be able to serve all those multiple requirements so whether it's standardizing internal applications that are delivered through virtual desktops or deploying databases are starting up customer websites you need to be able to do that and respond as quickly as possible and if you're spending cycles on acquiring infrastructure deploying it making sure it's well integrated and then once it's up and running figuring out what went wrong and enjoying those multiple nights of pizza right to figure out how to get this thing going back to the way it was it's it just distracts you from what's important so it's only when you make infrastructure invisible and truly scalable very much cloud-like and and make it your own as a process of doing so can you truly be that business partner and you and I hope we've done that with you definitely all right so Bennie let's go inside was there a specific project rollout that you would that led towards Nutanix was there a pain point you were having would give us kind of the before and what was the mature so traditionally an IT you would you want to set up a new application at you in your infrastructure environment you would buy servers and you would buy storage you would buy HBA cards which helps you connect the servers to the storage you've got things like worldwide numbers to worry about getting the right cables getting the right cards and then you put it all together you get all the stuff delivered and then two weeks later you might have things working and but you having some permission issues security issues so it was always a big challenge to get things up and running so it was the fun of ideas let's roll up our sleeves let's turn those geek knobs and you know optimize everything and yeah within six months I'm sure everything's rocking in right everything's rocking rolling but you're still not quite confident that things are running you're worried that a card might go bad you're worried that a world-wide number might change somewhere or somebody might you know mess up your security so you would spend a lot of time just getting things up and running versus spending time on development and you know working with your people you're supporting and trying to try to enhance things versus just keeping things getting things up and running so Nutanix you know with the hyper-converged infrastructure you know what kind of we're not worried about those things anymore it has our storage needs it has our compute needs it has our memory needs so what was it a refresh cycle what was the impetus that led to looking at a new arc sugar as we were growing and entering base was growing an IT was growing and our requests and you know what we need to satisfy was increasing tremendously we before we were working with just individual desks like desktops or blade servers but each one was kind of working individually with its own storage its own applications not the notion things weren't being shared or anything and we were just growing fast so we needed some we need a new infrastructure where we could actually have everything working of most efficiently and be secure and fast and and easy to manage and so we did look at we did some analysis on a few products and Nutanix you know after some a few pocs Nutanix was our product of choice yeah I mean you described something we heard a lot is it used to be every application you would kind of build your own temple for it yeah let me build it let me get the performance I need let me optimize certain things let me forecast how it's gonna grow but I get islands out there as opposed to I want to be able to scale I don't want to worry about you know here's one of the challenges out there most people and across the board forecasting is really hard or impossible I either overestimated a bunch and then I bought stuff I didn't eat her right under missed it estimate it and then oh my gosh I need to look to a new architecture yeah and then things ended up burning like at 10% of you know you utilizing temperature of the resources that you're purchasing yeah I remain poor virtualization it was like you know six seven percent is usually what we were running awesome so challenges before and we had you know silos out there I couldn't share I couldn't do talk about that that role how did you get from that old environment to the new one there's something I said when you you look at this wave of really a distributed architecture in the old world migrations were really really tough yeah and you had to do it with every cycle hopefully moving to an architecture like this this is your last migration it was like you know my wife always said the last time that's the last time I never want to have to move well I T I'm sure those migrations were always painful what was the experience my heading to migrations was is one thing that we went through but also just now it's just setting up new VMs or new applications new servers it's you know within a few minutes versus hours as far as migration we were we were running a hypervisor before but like I said it was on individual servers so the migration was basically picking your VMs or your servers one at a time and just migrating over to Tenex once it was there and you know with the hypervisor tools that are available it's very easy to use it's like things like vmotion or different types of migration tools that Nutanix offers with their hv hypervisor so it was just it was pretty seamless it was just you just pick and choose and identify your destination host ons Nutanix node or Nutanix cluster and all your stories that you want to move it to and just go okay so so Vinnie you went through a bit of a bake-off to figure out the solution tell us when you finish the deployment how are you measuring what does success mean to in deployment of your stand point and give us the after what show does this change for your process your organization sure qualitatively success is when our engineers are smiling and not calling us too much and asking us go to lunch versus telling us about issues they're having so that's qualitatively quantitatively looking at performance CPU memory I ops performance on a storage how our applications responding that that's what we measured it quantitatively yeah did you know like what kind of utilization you're getting on your current infrastructure then with the Nutanix um also currently you meet as far as uh what you said you were lucky to get 10% in the old world do you measure that yeah we met her that week we kind of um you know we have our kind of have our choices of how much storage you want to use how much CPU remember you want to allocate to each VM and we we just monitor it and through the prism interface that Nutanix offers the image you can actually see performance of each VM and you can decide when to throttle things so but as far as you know how much we're utilizing we're you know we have it we have a structured where we have room to grow so yeah absolutely and if we do need to grow later we can easily add nodes or you know chassis wood notes yeah I think back to the early years of you know what we call hyper converge environments and it was like oh well they are monolithic blocks even if they're small and but you don't have flexibility there when I look at you know many of the solutions especially what Nutanix ups there's a lot of flexibility into how I can grow in scale and get the the utilization that I need but get the performance the ops and everything what I think from your customers how is that story play out today yeah I mean ultimately it's all about empowering people right it's about making IT people truly successful broadening their skillset giving them greater control over the full stack if you will right so it's no longer siloed across functions you're no longer found helpless relying on a different team to deliver upon something that was promised based on a certain SLA so how do we do that how do we make evolved functional specialists into IT journalists would then become cloud engineers true cloud engineers right the world is changing technology is adapting businesses are a craving for more and the only way we can keep up is to adapt ourselves and utilize the best of breed technologies that gives us that power so as a result we hear that a lot where we find a lot of a customer's progressing from being either storage admins network specialists but most likely virtualization admins who then become these cloud engineers if you will they reorganize that way they tend to be in a position where they are a lot more infrastructure we're talking about 100x of what they used to do prior in the in the earlier days so the the number of the ratios just grow immensely as well as the quality of service provided the SAS are far reduced as they used to be so all of that goodness that our customers are able to deliver to their state goes in the organization makes us feel good about what we do if any would love we talked about you know this the engineers now they're smiling and going out to further then you know fighting bugs anything complaining about is yeah anything kind of when you look at skill set if they're you know I've talked to some entertainment customer he's like oh you know I had that security project that was sitting on my desk for years I can finally tackle that or there's I can be more responsive to the business so that they don't you know I can engage with them rather than just going off running it and do in stealth IT any anything along those lines that you can share I mean one thing like IT admins we typically want to know everything right so we all know what's happening behind the scenes with Nutanix we don't have to as much but we still like to and so we we take the opportunity to you know do trainings learn what's happening in an interface you support when needed so as far as yeah as far as skills go I think it's you know the skills you keep up with it's just different like Chris mentioned it's different different type of administration like we're managing virtualization or managing cloud you know you're not just managing loans and cables you know I love you sounds like you've got a team that's got that intellectual curiosity wants to understand what's going on how was the how was the on-ramp how was the kind of the cycle to understand the Nutanix piece how did you yeah so we learned a lot of the POC of course that's when you kind of you know you can play around with stuff and break stuff and try to break stuff if you want we use professional we used some freshly served since to help us get set up originally and after that it was just kind of learning day to day and just improving improving our knowledge in different areas like not if we're not used to having everything in one like in you know in one kind of a couple jassi's storage and you know compute so that was a networking as well so that was a little bit not challenged technically but just just you just need to reset the mindset these are the way I used to do things versus the the way now I can't do three and in troubleshooting um you know the great thing is when we have troubleshooting we're not calling three different vendors like a networking company a storage company in a compute company and having them point fingers oh it's networking now we if I ever have an issue or a question I call Nutanix supporting it so if any how long has it been since you the solution was deployed about two and a half years now awesome so it but you first of all I love your viewpoint as to how Nutanix has changed in those two those two years and along those lines too now that you look at things through the lens of 2018 if you could go back to peers of yours what would you tell them now that you wish you had known back when you rolled this out a couple of years ago I would you know how to tell them there's a much easier way to minute you know the deploy and manager infrastructure and you know this is this is one of the new techniques is definitely something you should look at alright Chris what what advice do you give to the IP people of the world that you know I'm sure most of them heard about this but you know what misconceptions might they have what what things do we want to make sure we open the door for sure so as a former developer myself you know several years ago I think it's very easy for us to forget the role we play in our organizations we're not all about the applications we're not all over the speeds and feeds we had a critical core part of how businesses go to market and achieve success right so let us recognize that and use the best approaches that are available out there to be able to deliver that value right if it means going where the good hyper-converged infrastructure solution if it means leaning in and building new disruptive technologies and such that can help your businesses do better the other thing that I want to highlight is just as you are in the the customer service business I believe we are as well we pride ourselves on our support so if you have if ask questions about how hyper-converged infrastructure can add value call us give support a call you would be put in touch with anyone who can speak about all the values we deliver to our customers and begin to get some of those ideas all right Vinnie uh want to ask you you you've got some experience works for some of the you know really well-known companies you not only here in the valley but in tech in general what's exciting you these days what do you look at either in the analytic space or an IT that that's getting you excited for me it's I like to get up without stress and so ease of management ease of deployment in the IT area is very that that's one of things I look forward to like you know being able to do other stuff than just focusing on data you know routine stuff yeah and one of those lines if I could give you you know the one wish to help make that goal even more either from Nutanix or you know the broad ecosystem out there what would what would make your job even easier you know it's it's I don't know I'm trying to think of a good answer but it's typically you know when issues once them all we have application issues it would just be some kind of self-healing type things you know maybe or maybe some automatic adjustments that could be done that maybe something in the future yeah like I just means as far as resources allocated to different types of yeah all right Chris sure I'll let you have the final word there cuz absolutely once we simplify modernize the platform modernizing the application some it's definitely something I've heard from many of your customers as to you know that role of infrastructure really is to serve up and support those applications and that seems to be where it's going that's right that's right the the business partners right partners the business CFO whoever on the other side of the fence they care about applications and services not so much about all the blood sweat and tears we put into the infrastructure so I think it's an opportunity for us to help us elevate beyond the infrastructure and focus on apps and services along with making sure we have some of those self-healing capabilities such that take care of us and not require us to pay heat to all those infrastructure speeds and feeds so it's a great opportunity to do and you know be truly strategic in the company right alright well Chris really appreciate you sharing the updates Vinny really appreciate you sharing your customer story it's our purpose here at the cube to always help bring out the information so make sure to check out the cube net if you actually go to the top there's a search we've got over five or six thousand interviews we've done including many customers including many of Nutanix go in search Nutanix you'll find a plethora of content out there if you ever have any question for us please reach out to us see us at any of the shows or in between so I'm Stu minimun and thanks again for watching the cube thank you

>> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE in ETR. This is Breaking Analysis with Dave Vellante. >> Every CEO is figuring out the right balance for new hybrid business models. Now, regardless of the chosen approach, which is going to vary, technology executives, they understand they have to accelerate their digital and build resilience as well as optionality into their platforms. Now, this is driving a dramatic shift in IT investments. And at the macro level, we expect total spending to increase at as much as 8% or even more in 2021, compared to last year's contraction. Investments in cybersecurity, cloud collaboration that are enabling hybrid work as well as data, including analytics, AI, and automation are at the top of the spending priorities for CXOs. Hello everyone. And welcome to this week's Wiki Bond Cube insights, powered by ETR. In this Breaking Analysis, we're pleased to welcome back Erik Bradley, who is the chief engagement strategist at our partner, ETR. Now in this segment, we're going to share some of the latest findings from ETR's surveys and provide our commentary on what it means for the markets, for sellers, and for buyers. Erik, great to see you, my friend. Welcome back to Breaking Analysis. >> Thank you for having me, always enjoy it. We've got some fresh data to talk about on this beautiful summer Friday, so I'm ready to go. >> All right. I'm excited too. Okay, last year we saw a contraction in IT spending by at least 5%. And now we're seeing a snapback to, as I said, at least 8% growth relative to last year. You got to go back to 2007 just before the financial crisis to see this type of top line growth. The shift to hybrid work, it's exposed us to new insidious security threats. And we're going to discuss that in a lot more detail. Cloud migration of course picked up dramatically last year, and based on the recent earnings results of the big cloud players, for now we got two quarters of data, that trend continues as organizations are accelerating their digital platform build-outs, and this is bringing a lot of complexity and a greater need for so-called observability solutions, which Erik is going to talk about extensively later on in this segment. Data, we think is entering a new era of de-centralization. We see organizations not only focused on analytics and insights, but actually creating data products. Leading technology organizations like JP Morgan, they're heavily leaning into this trend toward packaging and monetizing data products. And finally, as part of the digital transformation trend, we see no slow down in spending momentum for AI and automation, generally in RPA specifically. Erik, anything you want to add to that top level narrative? >> Yeah, there's a lot to take on the macro takeaways. The first thing I want to state is that that 8, 8.5% number that started off at just 3 to 4% beginning of the year. So as the year has continued, we are just seeing this trend in budgets continue to accelerate, and we don't have any reason to believe that's going to stop. So I think we're going to just keep moving on heading into 2021. And we're going to see a banner year of spend this year and probably next as well. >> All right, now we're going to bring up a chart that shows kind of that progression here of spending momentum. So Erik, I'm going to let you comment on this chart that tracks those projections over time. >> Erik: Yeah. Great. So thank you very much for pulling this up. As you can see in the beginning part of the year, when we asked people, "What do you plan to spend throughout 2021?" They were saying it would be about a 4% increase. Which we were happy with because as you said last year, it was all negative. That continues to accelerate and is only hyper accelerating now as we head into the back half of the year. In addition, after we do this data, I always host a panel of IT end users to kind of get their feedback on what we collected, to a man, every one of them expects continued increase throughout next year. There are some concerns and uncertainty about what we're seeing right now with COVID, but even with that, they're planning their budgets now for 2022 and they're planning for even further increases going forward. >> Dave: Great, thank you. So we circled that 8%. That's really kind of where we thought it was going to land. And so we're happy with that number, but let's take a look at where the action is by technology sector. This chart that we're showing you here, it tracks spending priorities back to last September. When I believe that was the point, Erik, that cyber became the top priority in the survey, ahead of cloud collaboration, analytics, and data, and the other sectors that you see there. Now, Erik, we should explain. These areas, they're the top seven, and they outrank all the other sectors. ETR tracks many, many other sectors, but please weigh in here and share your thoughts on this data. >> Erik: Yeah. Security, security, security. It hasn't changed. It had really hasn't. The hybrid work. The fact that you're behind the firewall one day and then you're outside working from home the next, switching in and out of networks. This is just a field day for bad actors. And we have no choice right now, but to continue to spend, because as you're going to talk about in a minute, hybrid's here to stay. So we have to figure out a way to secure behind the firewall on-prem. We also have to secure our employees and our assets that are not in the office. So it is a main priority. One of the things that point out on this chart, I had a couple of ITN users talk to me about customer experience and automation really need to move from the right part of that chart to the left. So they're seeing more in what you were talking about in RPA and automation, starting to creep up heading into next year. As cloud migration matures, as you know, cybersecurity spending has been ramping up. People are going to see a little bit more on the analytics and a little bit more on the automation side going forward. >> Dave: Great. Now, this next data view- well, first of all, one of the great things about the ETR dataset is that you can ask key questions and get a time series. And I will tell you again, I go back to last March, ETR hit it. They were the first on the work from home trend. And so if you were on that trend, you were able to anticipate it. And a lot of investors I think took advantage of that. Now, but we've shown this before, but there's new data points that we want to introduce. So the data tracks how CIOs and IT buyers have responded to the pandemic since last March. Still 70% of the organizations have employees working remotely, but 39% now have employees fully returning to the office and Erik, the rest of the metrics all point toward positives for IT spending, although accelerating IT deployments there at the right peaked last year, as people realized they had to invest in the future. Your thoughts? >> Erik: Yeah, this is the slide for optimism, without a doubt. Of the entire macro survey we did, this is the most optimistic slide. It's great for overall business. It's great for business travel. This is well beyond just IT. Hiring is up. I've had some people tell me that they possibly can't hire enough people right now. They had to furlough employees, they had to stop projects, and they want to re accelerate those now. But talent is very hard to find. Another point to you about your automation and RPA, another underlying trend for there. The one thing I did want to talk about here is the hybrid workplace, but I believe there's another slide on it. So just to recap on this extremely optimistic, we're seeing a lot of hiring. We're seeing increased spending, and I do believe that that's going to continue. >> Yeah I'm glad you brought that up because a session that you and I did a while ago, we pointed out, it was earlier this year, that the skill shortage is one potential risk to our positive scenario. We'll keep an eye on that, but so I want to show another set of data that we've showed previously, but ETR again, has added some new questions in here. So note here that 60% of employees still work remotely with 33% in a hybrid model currently, and the CIO's expect that to land on about 42% hybrid workforce with around 30% working remotely, which is around, it's been consistent by the way on your surveys, but that's about double the historic norm, Eric. >> Erik: Yeah, and even further to your point Dave, recently I did a panel asking people to give me some feedback on this. And three of those four experts basically said to me, if we had greed run this survey right now, that even more people would be saying remote. That they believe that that number, that's saying they're expecting that number of people to be back in office, is actually too optimistic. They're actually saying that maybe if we had- cause as a survey launched about six, seven weeks ago before this little blip on the radar, before the little COVID hiccup we're seeing now, and they're telling me that they believe if we reran this now that it would be even more remote work, even more hybrid and less returned to the office. So that's just an update I wanted to offer on this slide. >> Dave: Yeah. Thank you for that. I mean, we're still in this kind of day to day, week to week, month to month mode, but I want to do a little double click on this. We're not going to share this data, but there was so much ETR data. We got to be selective. But if you double click on the hybrid models, you'll see that 50% of organizations plan to have time roughly equally split between onsite and remote with again around 30 or 31% mostly remote, with onsite space available if they need it. And Erik, very few don't plan to have some type of hybrid model, at least. >> Yeah, I think it was less than 10% that said it was going to be exclusively onsite. And again, that was a more optimistic scenario six, seven weeks ago than we're seeing right now throughout the country. So I agree with you, hybrid is here to stay. There really is no doubt about it. from everyone I speak to when, you know, I basically make a living talking to IT end users. Hybrid is here to stay. They're planning for it. And that's really the drive behind the spending because you have to support both. You have to give people the option. You have to, from an IT perspective, you also have to support both, right? So if somebody is in office, I need the support staff to be in office. Plus I need them to be able to remote in and fix something from home. So they're spending on both fronts right now. >> Okay. Let's get into some of the vendor performance data. And I want to start with the cloud hyperscalers. It's something that we followed pretty closely. I got some Wiki bond data, that we just had earnings released. So here's data that shows the Q2 revenue shares on the left-hand side in the pie and the growth rates for the big four cloud players on the right hand side. It goes back to Q1 2019. Now the first thing I want to say is these players generated just under $39 billion in the quarter with AWS capturing 50% of that number. I said 39, it was 29 billion, sorry, with AWS capturing 50% of that in the quarter. As you're still tracking around a third in Alibaba and GCP in the, you know, eight or 9% range. But what's most interesting to me, Erik, is that AWS, which generated almost 15 billion in the quarter, was the only player to grow its revenue, both sequentially and year over year. And Erik, I think the street is missing the real story here on Amazon. Amazon announced earnings on Thursday night. The company had a 2% miss on the top line revenues and a meaningful 22% beat on earnings per share. So the retail side of the business missed its revenue targets, so that's why everybody's freaked out. But AWS, the cloud side, saw a 4% revenue beat. So the stock was off more than 70% after hours and into Friday. Now to me, a mix shift toward AWS, that's great news for investors. Now, tepid guidance is a negative, but the shift to a more profitable cloud business is a huge positive. >> Yeah, there's a lot that goes into stock price, right? I remember I was a director of research back in the day. One of my analysts said to me, "Am I crazy for putting a $1,000 target on Amazon?" And I laughed and I said, "No, you're crazy if you don't make it $2,000." (both chuckling) So, you know, at that time it was basically the mix shift towards AWS. You're a thousand percent right. I think the tough year over year comps had something to do with that reaction. That, you know, it's just getting really hard. What's that? The law of large numbers, right? It's really hard to grow at that percentage rate when you're getting this big. But from our data perspective, we're seeing no slowdown in AWS, in cloud, none whatsoever. The only slowdown we're seeing in cloud is GCP. But to, you know, to focus on AWS, extremely strong across the board and not only just in cloud, but in all their data products as well, data and analytics. >> Yeah and I think that the AWS, don't forget folks, that funds Amazon's TAM expansion into so many different places. Okay. As we said at the top, the world of digital and hybrid work, and multi-cloud, it's more complicated than it used to be. And that means if you need to resolve issues, which everybody does, like poor application performance, et cetera, what's happening at the user level, you have to have a better way to sort of see what's going on. And that's what the emergence of the observability space is all about. So Erik, let me set this up and you have a lot of comments here because you've recently had some, and you always have had a lot of round table discussions with CXOs on this topic. So this chart plots net score or spending momentum on the vertical axis, and market share or pervasiveness in the dataset on the horizontal axis. And we inserted a table that shows the data points in detail. Now that red dotted line is just sort of Dave Vellante's subjective mark in the sand for elevated spending levels. And there are three other points here. One is Splunk as well off is two-year peak, as highlighted in the red, but Signal FX, which Splunk acquired, has made a big move northward this last quarter. As has Datadog. So Erik, what can you share with us on this hot, but increasingly crowded space? >> Yeah. I could talk about the space for a long time. As you know, I've gotten some flack over the last year and a half about, you know, kind of pointing out this trend, this negative trend in Splunk. So I do want to be the first one to say that this data set is rebounding. Splunk has been horrific in our data for going back almost two years now, straight downward trend. This is the first time we're seeing any increase, any positivity there. So I do want to be fair and state that because I've been accused of being a little too negative on Splunk in the past. But I would basically say for observability right now, it's a rising tide lifts all boats, if I can use a New England phrase. The data across the board in analytics for these observability players is up, is accelerating. None more so than Datadog. And it's exactly your point, David. The complexity, the increased cloud migration is a perfect setup for Datadog, which is a cloud native. It focuses on microservices. It focuses on cloud observability. Old Splunk was just application monitoring. Don't get me wrong, they're changing, but they were on-prem application monitoring, first and foremost. Datadog came out as cloud native. They, you know, do microservices. This is just a perfect setup for them. And not only is Datadog leading the observability, it's leading the entire analytics sector, all of it. Not just the observability niche. So without a doubt, that is the strongest that we're seeing. It's leading Dynatrace new Relic. The only one that really isn't rebounding is Cisco App Dynamics. That's getting the dreaded legacy word really attached to it. But this space is really on fire, elastic as well, really doing well in this space. New Relic has shown a little bit of improvement as well. And what I heard when I asked my panelists about this, is that because of the maturity of cloud migration, that this observability has to grow. Spending on this has to happen. So they all say the chart looks right. And it's really just about the digital transformation maturity. So that's largely what they think is happening here. And they don't really see it getting, you know, changing anytime soon. >> Yeah, and I would add, and you see that it's getting crowded. You saw a service now acquired LightStep, and they want to get into the game. You mentioned, you know, last deck of the elk stack is, you know, the open source alternative, but then we see a company who's raised a fair amount of money, startup, chaos search, coming in, going after kind of the complexity of the elk stack. You've got honeycomb, which has got a really innovative approach, Jeremy Burton's company observes. So you have venture capital coming in. So we'll see if those guys could be disruptive enough or are they, you know, candidates to get acquired? We'll see how that all- you know that well. The M and A space. You think this space is ripe for M and A? >> I think it's ripe for consolidation, M and A. Something has to shake out. There's no doubt. I do believe that all of these can be standalone. So we shall see what's happened to, you mentioned the Splunk acquisition of Signal FX, just a house cleaning point. That was really nice acceleration by Signal FX, but it was only 20 citations. We'd looked into this a little bit deeper. Our data scientists did. It appears as if the majority of people are just signaling spunk and not FX separately. So moving forward for our data set, we're going to combine those two, so we don't have those anomalies going forward. But that type of acquisition does show what we should expect to see more of in this group going forward. >> Well that's I want to mention. That's one of the challenges that any data company has, and you guys do a great job of it. You're constantly having to reevaluate. There's so much M and A going on in the industry. You've got to pick the right spots in terms of when to consolidate. There's some big, you know, Dell and EMC, for example. You know, you've beautifully worked through that transition. You're seeing, you know, open shift and red hat with IBM. You just got to be flexible. And that's where it's valuable to be able to have a pipeline to guys like Erik, to sort of squint through that. So thank you for that clarification. >> Thank you too, because having a resource like you with industry knowledge really helps us navigate some of those as well for everyone out there. So that's a lot to do with you do Dave, >> Thank you. It's going to be interesting to watch Splunk. Doug Merritt's made some, you know, management changes, not the least of which is bringing in Teresa Carlson to run go to market. So if you know, I'd be interested if they are hitting, bouncing off the bottom and rising up again. They have a great customer base. Okay. Let's look at some of the same dimensions. Go ahead. You got a comment? >> A few of ETR's clients looked at our data and then put a billion dollar investment into it too. So obviously I agree. (Dave laughing) Splunk is looking like it's set for a rebound, and it's definitely something to watch, I agree. >> Not to rat hole in this, but I got to say. When I look back, cause theCUBE gives us kind of early visibility. So companies with momentum and you talk to the customers that all these shows that we go to. I will tell you that three companies stood out last decade. It was Splunk. It was Service Now and Tableau. And you could tell just from just discussions with their customers, the enthusiasm in that customer base. And so that's a real asset, and that helps them build them a moat. So we'll see. All right, let's take a look at the same dimensions now for cyber. This is cybersecurity net score in the vertical, and market share in the horizontal. And I filtered by in greater than a hundred shared in because just gets so crowded. Erik, the only things I would point out here is CrowdStrike and Zscaler continue to shine, CyberArk also showing momentum over that 40% line. Very impressively, Palo Alto networks, which has a big presence in the market. They've bounced back. We predicted that a while back. Your round table suggested people like working with Palo Alto. They're a gold standard. You know, we had reported earlier on that divergence with four to net in terms of valuation and some of the challenges they had in cloud, clearly, you know, back with the momentum. And of course, Microsoft in the upper, right. It's just, they're literally off the charts and obviously a major player here, but your thoughts on cyber? >> Erik: Yeah. Going back to the backdrop. Security, security, security. It has been the number one priority going back to last September. No one sees it changing. It has to happen. The threat vectors are actually expanding and we have no choice but to spend here. So it is not surprising to see. You did name our three favorite names. So as you know, we look at the dataset, we see which ones have the most positive inflections, and we put outlooks on those. And you did mention Zscaler, Okta and CrowdStrike, by far the three standouts that we're seeing. I just recently did a huge panel on Okta talking about their acquisition of Auth Zero. They're pushed into Sale Point space, trying to move just from single sign on and MFA to going to really privileged account management. There is some hurdles there. Really Okta's ability to do this on-prem is something that a little bit of the IT end users are concerned about. But what we're seeing right now, both Okta and Auth Zero are two of the main adopted names in security. They look incredibly well set up. Zscaler as well. With the ZTNA push more towards zero trust, Zscaler came out so hot in their IPO. And everyone was wondering if it was going to trail off just like Snowflake. It's not trailing off. This thing just keeps going up into the right, up into the right. The data supports a lot of tremendous growth for the three names that you just mentioned. >> Yeah. Yeah. I'm glad you brought up Auth Zero. We had reported on that earlier. I just feel like that was a great acquisition. You had Okta doing the belly to belly enterprise, you know, selling. And the one thing that they really lacked was that developer momentum. And that's what Auth Zero brings. Just a smart move by Todd McKinnon and company. And I mean, so this, you know, I want to, I want to pull up another chart show a quick snapshot of some of the players in the survey who show momentum and have you comment on this. We haven't mentioned Snowflake so far, but they remain again with like this gold standard of net score, they've consistently had those high marks with regard to spending velocity. But here's some other data. Erik, how should we interpret this? >> Erik: Yeah, just to harp on Snowflake for a second. Right, I mean the rich get richer. They came out- IPO was so hyped, so it was hard for us as a research company to say, "Oh, you know, well, you know, we agree." But we did. The data is incredible. You can't beat the management team. You can't beat what they're doing. They've got so much cash. I can't wait to see what they do with it. And meanwhile, you would expect something that debuted with that high of a net score, that high of spending velocity to trail off. It would be natural. It's not Dave, it's still accelerating. It's gone even higher. It's at all time highs. And we just don't see it stopping anytime soon. It's a really interesting space right now. Maybe another name to look at on here that I think is pretty interesting, kind of a play on return to business is Kupa. It's a great project expense management tool that got hit really hard. Listen, traveling stopped, business expense stopped, and I did a panel on it. And a lot of our guys basically said, "Yeah, it was the first thing I cut." But we're seeing a huge rebound in spending there in that space. So that's a name that I think might be worth being called out on a positive side. Negative, If you look down to the bottom right of that chart, unfortunately we're seeing some issues in RingCentral and Zoom. Anything that's sort of playing in this next, you know, video conferencing, IP telephony space, they seem to be having really decelerating spending. Also now with Zoom's acquisition of five nine. I'm not really sure how RingCentral's going to compete on that. But yeah, that's one where we debuted for the first time with a negative outlook on that name. And looking and asking to some of the people in our community, a lot of them say externally, you still need IP telepany, but internally you don't. Because the You Cast communication systems are getting so sophisticated, that if I have Teams, if I have Slack, I don't need phones anymore. (chuckling) That you and I can just do a Slack call. We can do a Teams call. And many of them are saying I'm truly ripping out my IP Telepany internally as soon as possible because we just don't need it. So this whole collaboration, productivity space is here to stay. And it's got wide ranging implications to some of these more legacy type of tools. >> You know, one of the other things I'd call out on this chart is Accenture. You and I had a session earlier this year, and we had predicted that that skill shortage was going to lead to an uptick in traditional services. We've certainly seen that. I mean, IBM beat its quarter on the strength of services largely. And seeing Accenture on that is I think confirmation. >> Yeah that was our New Year prediction show, right Dave? When we made top 10 predictions? >> That's right. That was part of our predictions show. Exactly, good memory. >> The data is really showing that continue. People want the projects, they need to do the projects, but hiring is very difficult. So obviously the number one beneficiary there are going to be the Accentures of the world. >> All right. So let's do a quick wrap. I'm going to make a few comments and then have you bring us home, Erik. So we laid out our scenario for the tech spending rebound. We definitely believe last year tracked downward, along with GDP contraction. It was interesting. Gardner doesn't believe, at least factions of Gardner don't believe there's a correlation between GDP and tech spending. But, you know, I personally think there generally is some kind of relatively proportional pattern there. And I think we saw contraction last year. People are concerned about inflation. Of course, that adds some uncertainty. And as well, as you mentioned around the Delta variant. But I feel as though that the boards of directors and CEOs, they've mandated that tech execs have to build out digital platforms for the future. They're data centric. They're highly automated, to your earlier points. They're intelligent with AI infused, and that's going to take investment. I feel like the tech community has said, "Look, we know what to do here. We're dealing with hybrid work. We can't just stop doing what we're doing. Let's move forward." You know, and as you say, we're flying again and so forth. You know, getting hybrid right is a major priority that directly impacts strategies. Technology strategies, particularly around security, cloud, the productivity of remote workers with collaboration. And as we've said many times, we are entering a new era of data that's going to focus on decentralized data, building data products, and Erik let's keep an eye on this observability space. Lot of interest there, and buyers have a number of choices. You know, do they go with a specialist, as we saw recently, we've seen in the past, or did they go with the generalist like Service Now with the acquisition of LightStep? You know, it's going to be interesting. A lot of people are going to get into this space, start bundling into larger platforms. And so as you said, there's probably not enough room for all the players. We're going to see some consolidation there. But anyway, let me give you the final word here. >> Yeah, no, I completely agree with all of it. And I think your earlier points are spot on, that analytics and automation are certainly going to be moving more and more to that left of that chart we had of priorities. I think as we continue that survey heading into 2022, we'll have some fresh data for you again in a few months, that's going to start looking at 2022 priorities and overall spend. And the one other area that I keep hearing about over and over and over again is customer experience. There's a transition from good old CRM to CXM. Right now, everything is digital. It is not going away. So you need an omni-channel support to not only track your customer experience, but improve it. Make sure there's a two way communication. And it's a really interesting space. Salesforce is going to migrate into it. We've got Qualtrics out there. You've got Medallia. You've got FreshWorks, you've got Sprinkler. You got some names out there. And everyone I keep talking to on the IT end user side keeps bringing up customer experience. So let's keep an eye on that as well. >> That's a great point. And again, it brings me back to Service Now. We wrote a piece last week that's sort of, Service Now and Salesforce are on a collision course. We've said that for many, many years. And you've got this platform of platforms. They're just kind of sucking in different functions saying, "Hey, we're friends with everybody." But as you know Erik, software companies, they want to own it all. (both chuckling) All right. Hey Erik, thank you so much. I want to thank you for coming back on. It's always a pleasure to have you on Breaking Analysis. Great to see you. >> Love the partnership. Love the collaboration. Let's go enjoy this summer Friday. >> All right. Let's do. Okay, remember everybody, these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis Podcast, click subscribe to the series. Check out ETR's website at etr.plus. They've just launched a new website. They've got a whole new pricing model. It's great to see that innovation going on. Now remember we also publish a full report every week on WikiBond.com and SiliconAngle.com. You can always email me, appreciate the back channel comments, the metadata insights. David.Vellante@SiliconAngle.com. DM me on Twitter @DVellante or comment on the LinkedIn posts. This is Dave Vellante for Erik Bradley and theCUBE insights powered by ETR. Have a great week, a good rest of summer, be well. And we'll see you next time. (inspiring music)