>> Narrator: From around the globe it's theCUBE with digital coverage of AWS reinvent 2020. Sponsored by Intel, AWS and our community partners. >> All right, you're continuing coverage of AWS reinvent 2020 virtual event. We get the pleasure of covering this show like no other AWS reinvent. We are pulling in from the other side of the world Tomer Levy, CEO of Logz.io. First time Cuber so we're going to ease them into it but it's going to be a great conversation. I'm Keith Townsend at CTO advisor. Tomer, welcome to the show. >> Keith, thank you for having me. I'm super excited to be here. >> You know what? We love having founders here on theCUBE. We have a long history of having deep conversations with builders and we're probably the show for builders. AWS reinvent is virtual. However, I think the spirit of re-invent is highlighted in companies like this. We've seen a lot of observability companies sprout up around the industry. AWS is a big, big magnet for these types of solutions. What's the assets Logz.io and how are you guys differentiating yourselves in this crowded space? >> Yeah, absolutely Keith you see observability is so fundamental to building applications on AWS that as companies develop more applications, they have to have solid observability. And we have a mission and our mission is to enable develop engineers and any engineer out there to use open source to run their observability. So when we were developers we wanted to use open source but we had to compromise on a proprietary solution. We decided to build the company so engineers can use the observability tools they're already using for logging, for metrics, for tracing, Whatever they're already using we want to enable them to use that at scale on AWS. So it's easy to use, it's super smart and the data is coordinated. And I think fundamentally it's what we're doing very differently in the market. There is no other company in the market today that takes the best open sources and bring them together as one super strong platform and we're proud to be that company. >> Well, when you say there's no other company doing open source the way that you guys are doing it, that really intrigues me especially as we look at this from the angle of Cooper Netties, the CEO of the leading virtualization company called Kubernetes, the doubts home of the internet. How do you see the intersection of opensource observability in kubernetes especially in the public cloud? >> Yeah, for sure. People say that kubernetes is almost the operating system of the future and why do people use kubernetes? They use it to make sure they can run multiple microservices. They can take their application which used to be a monolith and put it in a distributed way. So it becomes so much harder to monitor or to troubleshoot even to secure applications. So the way we built Logz.io was really designed for companies that are moving into the cloud, companies moving into kubernetes, into microservices and by having logs and metrics and traces all work together through the best open sources. I think we can help customers really get the visibility and just accelerate the software delivery. Just provide better service to their customers. >> So Levy, walk me through that journey. What is it like for a developer to come from their traditional open source roots and enter the cloud where they're melding public cloud services in AWS alongside their tools that they're using in observability. How do you help ease that transition? >> Yeah, absolutely Keith because one of the main drivers for companies adopting tools like Logz.io is actually the migration to AWS. So imagine now migration to a new ground, what do you have to think about first? Do I have the glasses? Can I see what's going on? Like when I see what's going on, I feel more confident. So if I'm now using, let's call it elk or using the open-source Grafana or using tools like Jaeger, which are all open sources too that we offer as part of our platform. So when I use these tools I'm using them to get visibility into my own application, my own infrastructure. So Logz.io faster transition to Logz.io is super easy. This is the whole notion of having an open source compatible platform. So I want to move to Loz.io, everything that worked with my open source currently still works with Logz.io but now when you move to the cloud Logz.io on AWS, we have a very strong relationship so all the services are automatically monitored. You have pre-configured dashboard, everything is interconnected so just when I jump into the AWS platform I immediately get visibility of my existing apps and of the AWS infrastructure. And that eventually helped me become confident, grow and deliver faster on AWS. >> So again this is a conference full of builders but you used the term devOps. We're starting to see a bleeding of DevOps and builders or operations and builders come together. One of the big trans and DevOps and observability is AI and machine learning. What are some of the features of AI and Machine Learning you guys are bringing to bear to this market? >> Yeah, listen I'm a big believer in AI. You know, the amount of data that companies like Logz.io have to ingest and our customers have to process. It's just something a human being cannot possibly understand. It's like billions and millions of lines of data. So this is where we bring machines to help humans. I'll give you one example, right? If you're a DevOps engineer and you see an issue in your logs, what do you do? You usually copy that and putting it into Google and you'll end up on stack overflow, maybe on GitHub, maybe on another website. What we have done is we've scraped the web and we have learned from any user on our platform. So we actually know which log line is important and which one is not. So when companies send a log line, our AI automatically scans it and says, "Hey, here are the billion log lines. No one cares about but here is one that you should really look at right now because either you know half a million people that were searching for it. There are 7,000 alerts on this and it just happened to you. Keith look, maybe you should jump in and look at that". This is where AI makes us just better operate or better DevOp people and not kind of try to replace us. >> So I'm a technical founder, you're a technical founder, theCUBE loves supporting founders. One of the advantages of being the CEO of your company is that you get to decide the culture and the mission of your company. Talk to me about the people side of your organization and how you're making a change for the better. >> Yeah, absolutely. You know, it is a privilege and to the privilege to start and come with a mission that you want to change something in the world and we were just two developers, a staff, my co-founder and myself having to use a product we didn't want to use and you know still really wanted to use an open source product. So we said let's build the company around that and this is kind of set the mission for the company as the company evolved, so is our mission. It evolves from logging to monitoring, to tracing and we also added a cloud SIEM solution all based on open source. So we're going to DevOps engineers and any engineers and we tag any engineer we tell them, "Hey, you can use the best open source tools in the cloud is one platform without compromising". And that's something that really is very differentiated today and I'm very humbled and excited to be part of this journey and I think the team at Logz.io is as well. >> You know I'm always intrigued about this journey to the cloud. Security is one of these things that intrigues me especially as we look at something as mature in the way open source. We often associate open source with public cloud, cloud native but open source is as old as technology itself. So there is a lot of practices that we bring from legacy, traditional infrastructures into the public cloud. So talk to me about that transition of security and security models? How does observability help to either take our existing tools and migrate them to the public cloud or adopt all new cloud native tools in the public cloud? >> Yeah, for sure. I think security is probably together with observability. One of the top priority that when you think about CTOs and VP of Engineering and CSOs, they're concerned about. So we've taken the observability path and bringing better glasses to our users and then on the security side there's a whole market called the SIEM market where companies look at detecting threats, investigating them and most of these tools were that companies use our legacy, incumbents and for design on their own premises world. And are not really a fit for the dynamic world of kubernetes and the cloud. And this is when we decided a couple of years ago to launch a product in that space and today this product is extremely successful. We have customers protecting their AWS environments across the board. So basically with one product for observability, you can with a single checkbox enable security and then you can detect threats. You can look at kind of the common pitfalls of AWS environment and how you can avoid them. And eventually when you see a threat, you can use our tool to investigate and find the root cause in a tool which was designed on AWS for AWS. And it's really designed for the kind of the native cloud environment rather than the on-premise as well. >> Now, is there an integration between the AI ML law of management and the threat management solutions from our observability perspective? >> Yeah, for sure. This is the beauty, it's all one data platform. So customers ship their data, loads, metrics and traces into one place and then we start to look at how can we provide more value on the data, right? How can we look at the logs from an operational perspective and tell you, "Hey, your production might be going down because of a production risks or maybe we can provide you threat intelligence". We can enrich the data and tell you, "Hey, we think you're undergoing an attack right now". So this is all done by users and it is all enraged by AI that provides more visibility, more enrichment of the data and just advice on where to look. >> So Tomer levy, CEO, founder of Logz.io. You're now a few belong. Thank you for joining the show. I hope you have a very successful AWS reinvent. Speaking of AWS reinvent, theCUBE's nonstop coverage of AWS reinvent continues. Watch some of the world's greatest builders, innovators get challenged on their vision and for us to understand and appreciate the work that's been done in this dynamic community. Continue to watch this coverage and more. Talk to you next interview on the CUBE's coverage, of AWS reinvent 2020. (soft music)

>> Live from Barcelona, Spain, it's theCUBE. Covering KubeCon, CloudNativeCon, Europe 2019. Brought to you by Red Hat, the Cloud Native Computing Foundation and Ecosystem Partners. >> Welcome back to theCUBE here in Barcelona, Spain. This is KubeCon, CloudNativeCon 2019. I'm Stu Miniman, my co-host for two days of wall-to-wall coverage is Corey Quinn. Joining us on the program we have two gentleman from Red Hat. To my right is Josh Berkas who's the Kubernetes community manager and sitting to his right is Dejan Bosanac who's a senior software engineer and as I said, both with Red Hat. Gentlemen, thanks so much for joining us. >> Well thank you. >> Thank you. >> All right. So Josh, a community manager in the Kubernetes space, so what brings you here to KubeCon and maybe explain to us and give the clarification on the shirt so that we can be educated to properly call this city and residence by, how they should be. >> Oh, so many things, so. I mean obviously, I'm here because the community is here, right? A very large community. We had a contributor summit on Monday. They had a couple hundred people, three hundred people at it. The important thing, when we talk about community in Kubernetes there's the general ecosystem community and then there's the contributor community. >> Right. >> And the latter is more with what I'm concerned with. Because even the contributor community by itself is quite large. As for the t-shirt, speaking of community, so we like to actually do special t-shirts for the contributor summits. I designed this one. Despite my current career, my academic background is actually in art. This is obviously a Moreau pastiche, but one of things I actually learned by doing this was I did a different version first, It said Barca on it, and then one of the folks from here is like, "Well that's the football team." That when they abbreviate the city, it's actually Barna. >> It was news to me. I am today years old when I found that out. >> Yes. >> So thank you very much for that. >> Yes, that was an additional four hours of drawing for me. >> All right. Go ahead Corey. >> So a while back, I had a tweet that went out that I knew was going to be taken in two different ways and you were one of the first people to come back on that in the second way. Everyone first thought I was being a snarky jerk. >> Yeah. Which, let's be honest, fair. >> Yeah. >> But what I said was that in five years no one is going to care about Kubernetes. >> Right. >> And your response was yeah, that's a victory condition. If you don't have to think or care about this, >> Yeah. >> that means it won >> Right. >> in a similar way that a lot of things have slipped >> Yeah. >> beneath the level of awareness. And I'm curious as to what both of you think about the idea of Kubernetes not, I'm not saying it loses in the marketplace, I don't think that that is likely at all, but at what point do people not have to think about it any more and what does that future look like? >> Yeah, I mean one of our colleagues noticed yesterday that this conference particularly is not about Kubernetes any more. So, you hear more about all the ecosystem. A lot of projects around it. So it certainly grew up above the Kubernetes. And so you see all the talks about service meshes and things we try to do for the edge computing and things like that. So it's not just the Kubernetes any more. It's a whole ecosystem of the products and projects around it. I think, it's a big success. >> Yeah. And I mean I'll say, talking sort of a longer view is, I can remember compiling my own Linux kernels. I can remember doing it on a weekly basis. Because you honestly had to, right? If you wanted certain devices to work you had to actually compile your own kernel. Now on my various servers and stuff that I do for testing and demos and development, I can't even tell you what kernel version I'm running. Because I don't care, right? And for core Kubernetes, like I said, if we get to that point of not needing to care about it of only needing to care about it when we're developing something, then that looks like victory to me. >> Josh, is there anything in the core contributor team that they have milestones and say "Hey, by the time we get to 2.0 or 3.0, you know Kubernetes is invisible?" >> Yeah, well it's spoken of more in terms of GA and API stability >> Yeah. >> because really, if you're going to back off and you're going to say, "What is Kubernetes?" Well, Kubernetes is, what the definition of Kubernetes is, is a bag of APIs. A very large bag of APIs, we do a lot of APIs but a bag of APIs and the less those APIs change in the future the closer we're getting to maturity and stability, right? Because we want people building new stuff around the APIs, not modifying the APIs themselves. >> Yeah well, to that end, last night, here at Barcelona time, a blog post came out from AWS where they set out a formalized deprecation strategy for their EKS product to keep up with the releases of Kubernetes. Now, AWS generally does not turn things off ever, which means that 500 years from now, two trunkless legs of stone in a desert will be balanced by an ELB classic. And we're never going to be rid of anything they've ever built, but if nothing else, you've impacted them to formalize a deprecation strategy that follows upstream, which is awesome. It's great to start seeing a world where you don't have to support older versions of things as your user base and your community informs you. It's nice to see providers breaking from their model to respond to what the community has done. And I can't imagine, for you, that's anything other than an unqualified success. >> All right, so, Dejan. >> Yeah? >> When we talk about dispersion of technology, you know, there are few issues that get people as excited these days as edge computing. So, tell us a little bit about what you're doing and the community's doing in the IOTN edge space. >> Yeah. So, we noticed that more and more people want to try their workloads outside of the centralized, mon-centralized data clusters, so the big term for the last year was the hyper-cloud, but it's not just hyper-cloud. People coming also from the IOT user space wants to, you know, containerize their workloads, wants to put the processing closer and closer to the devices that they're actually producing and presuming those data in the users. And there's a lot of use cases which should be tackled in that way. And as you all said previously, like Kubernetes won developers' hearts and minds so APIs are stable, everybody's using them, it will be supported for decades so it's natural to try to bring all these tools and all these platforms that are already available to developers, try to tackle these new challenges. So that's why last year we formed Kubernetes IT edge working group, trying to, you know, start with simple questions because when people come to you and say edge, everybody thinks something different. For somebody it's an IOT gateway, for somebody it's a full blown, you know, Kubernetes cluster at some telco provider. So that's what they're trying to figure out, all these things, and try to form a community because as we saw in the previous sales for the IOT users space is that complex problems like this are never basically solved by a single company. You need open source, you need open standard, you need community around it so that people can pick and choose and build a solution to fit their needs. >> Yes, so as you said, right, there is that spectrum of offerings everything from that telco down to, you know, is this going to be something sitting on a tower somewhere or, you know, the vast proliferation of IOT which, you know, we spent lots of time. So are you looking at all of these or are you pointing "Okay, we already have a telco working group over here, and, you know, we're going to work on the IOT thing." You know, where are we? What are the answers and starting point for people today? >> Yes, so we have a single working group for now and we try to bring in to people that are interested in this topic in general. So it's, one of the guys said like "Edge is everything that's not running in the center crowd right, so, we have a couple of interesting things happening at a moment, so future way guys have a cubics project and there're presented at this conference. We have a couple of sessions on that. That's basically trying to tackle this device age kind of' space, how to, you know, put Kubernetes' workload on the constrained device and over to constrained network kind of' problem. And we have a people like coming from the rancher, which provide their own, again, resource-constrained Kubernetes deployments, and we see a lot of developments here, but it's still, I think, early age and that's why we have like a working group which is something that we can build our community and work over the time to shape things and find the appropriate reference, architectural blueprints for people that can follow in the future. >> Yeah, I think that there's been an awful lot of focus here on this show on Kubernetes, but it is KubeCon plus CloudNativeCon. I'm curious as far as what you're seeing with these conversations, something you eluded to as well is that there's now a bunch of other services that are factored in. I mean, it feels almost like this show is become, just from conversations, Kubernetes and friends; but, the level of attention that being paid to those friends is dramatically increasing. And I'm curious as to how you're seeing this evolve in the community particularly but also with customers and what you're seeing as this entire ecosystem continues to evolve. >> Yeah. Well, I mean part of it out of necessity, right, as when Kubernetes' move from Dev and experimental into production, you don't run Kubernetes by itself, right? And some of the things with Kubernetes is you can run with existing tooling, rank cloud providers, that sort of thing. But other things you discover that you want new tools. For example, one of the areas that we saw, expansion to start with, was the area of monitoring and telemetry because it turns out that monitoring telemetry that you build for a hundred servers does not work with twenty thousand pods. It's just a volume problem there. And so then we had new projects like Heapster and Prometheus and the new products from other companies like Sistic and that sort of thing, just looking at that space, right, in order to have that part of the tool because you can't be in production without monitoring and telemetry. One of my personal areas that I'm involved is storage, right, and so we've had the rook project here go from and pretty much a year and a half actually, go from being open sourced to being now a serious alternative solution if you don't want to be dependent on cloud provider storage. >> Please tell me you're giving that an award called Rookie of the Year. [laughs] >> I do not apologize for that one. One thing that does resonate with me though is the idea that you've taken, strategically, that instead of building all of this functionality into Kubernetes and turning it into, "You'll do it this way or you're going to be off in the wilderness somewhere," it's decoupled. I love that pattern. Was that always the design from day one or was this a contentious decision history? >> No, it wasn't. Kubernetes started out as kind of a monolith, right, because it was like the open source version of borg light, right, and, which was build as a monolith within Google 'cause there weren't options. They had to work with Google's stuff, right, if you're looking at borg, right, and so they're not worried about supporting all this other stuff, but from day one of Kubernetes being a project, it was a multi-company project, right, and if you look at, you know, open shift and open shift's users and open shift's stack, it's different from what Google uses for GKE. And, honestly, the easiest way to support sort of multiple stack layers is to decouple everything, right? And not how we started out, right? Cloud providers, like one of our problems cloud providers entry, storage entry, networking. Networking was the only thing that was separate from day one. You know but all this stuff was entry, and it didn't take very long for that to get unmaintainable, right? >> Well, I mean I think one of the, I've been following you and running into you in the conference circuit for years, and one of the talks I gave for a year and a half was Heresy in the Church of Docker where we don't know what your problem is but Docker, Docker, Docker, Docker, Docker, and I gave a list of twelve or thirteen different reasons and things that were not being handled by Docker. And now, I've sunset that talk largely because 1) no one talks about Docker and it feels a bit like punching down, but more importantly, Cooper Netties has largely solved almost all of those. There are still a few exceptions here and there 'cause it turns out "Sorry, nothing is perfect and we've not yet found containersation utopia. Surprise!" But it's really come a very long way in a very short period of time. >> Yeah, what a lot of it is is decoupling 'cause the thing is that you can take it two ways, right, one is that potentially as an ecosystem Kubernetes solves almost anything. Some things like IOT are, you know, a lot more alpha state than others. And then if you actually look at just core Kubernetes, it's like what you would get off the Kubernetes' Kubernetes repo if you compiled it yourself, Kubernetes solves almost nothing. Like by itself, you can't do much with it other than test your patches. >> Right, in isolation, the big problem it solves is "Room is limited to 'I want a buzz wort on my resume.'" >> Yes. >> There needs to be more to it than that. >> So, and I think that's true in general 'cause like, you know, if you look at "why did Linux become the default server OS, right?" It became the default server OS because it was adaptable, right, because you would compile in your own stuff because we define posics and kernel module API's to make it easy for people to build their own stuff without needing to commit to Lin EX Kernel. >> Alright, so I'd to get both your thoughts just on the storage piece there because, you know, 1) you know, storage is a complex, highly fragmented ecosystem out there. Red Hat has many options out there, and, boy, when I saw the key note this morning, I thought he did a really good job of laying out the options but, boy, there's, you know, it's a complex multi fragmented stack with a lot of different options out there, and edge computing, the storage industry as a whole without even Kubernetes is trying to figure out how that works, so Dejan, maybe we start with you, and yeah. >> So yeah. I don't have any particular answers for you for today in that area, but what I want, to emphasize what Josh said earlier is that these API's and these modelization that is done in Kubernetes, it's one of the big important things for edge's vow because people coming there and saying "We should do this. Should we invent things or should we just try to reuse what's a basically very good, very well designed system?" So that's a starting point, like why do we want to start using Kubernetes for the edge computing? But for the storage questions, I would hand over to Josh. >> So, your problem with storage is not anything to do with Kubernetes in particular, but the fact that, like you said, the storage sort of stack ecosystem is a mess. It's more vendor. Everything is vendor specific. Things don't work even semantically the same, let alone like the same by API. And so, all we can do in the world of Kubernetes is make enabling storage for Kubernetes not any harder than it would have been to do it in some other system. >> Right, and look, the storage industry'd say, "No no. It's not a mess. It's just that there's a prolifera of applications our there. There is not one solution to fit them all and that's why we have block, we have file, we have object, we have all these various ways of doing things, so you're saying storage is hard, but storage with Kubernetes is no harder today. We're getting to that point. >> I would say it's a little harder today. And we're working on making it not any harder. >> All right, excellent. Well, Josh and Dejan, thank you so much for the updates. >> Thank you guys. Always appreciative of the community contributions. Look forward to hearing more about the, of course, the contributors always and as the Edge and IOT groups mature. Look forward to hearing updates in the future. Thank you. >> Cool. >> Thank you guys. >> Alright, for Corey Quinn, I'm Stu Miniman back with lots more coverage hear from KubeCon CloudNativeCon 2019 in Barcelona, Spain. Thanks for watching theCube.

(upbeat music) >> Live from Barcelona, Spain, it's theCUBE! Covering Cisco Live! Europe, brought to you by Cisco and it's eco system partners. >> Welcome back to theCUBE's live coverage of Cisco Live! 2019 here in Barcelona, Spain. I'm Stu Miniman, my co-host for this segment is Dave Vellante. Dave, myself, and John Furrier here, gettin' wall to wall coverage. Happy to welcome to the program, first time guest, Dave Stanford, who's the Customer Experience Cloud Product Management at Cisco, Dave thanks so much for joining us. >> Thanks for having me here. >> Alright. So, we've been digging into the whole multi-Cloud piece here, some real big announcements. A lot of their business solutions talking about being anywhere, it's the bridge-to-possible here at the show- >> Exactly. >> So, tell us exactly the customer experience there. Is this, the gooeys, much more than that, do you know? >> It is. >> What's that encompass? >> We really want to put a whole wrapper around all these products and solutions from a service perspective, and that includes everything from advisory, really guiding our customers, how do I get there, we see all these products and sometimes, it's like, well what do I use these for? So, we want to guide them, help them adopt it and then, support it, support's probably the most important piece. With all these multiple solutions, who can the customers call to get support for all of these? >> You know, I mean, I've worked with Cisco, partnered with Cisco my entire career, and the last few years, boy, things are changing so fast. >> Absolutely. >> A year ago kind of opened my eyes, and said, oh Cisco's movin' to be a software company? You really see the movement when I come to the show here, when I talk to people like the Cisco DNA Platform Solutions. >> Exactly. >> And all the things that customers need to change. Bring us inside how you're helping customers with that change, the services, and everything that you're wrapping around there. >> Sure. My role today is to develop the offers and scale them out and enable our other advanced services folks to deliver, but previously I was delivery myself. So, I understand the challenges that the customers have, so I know what they expect, they want the products to go out there and seamlessly work together, now they do. There's APIs, there's connectivity, but we have to actually show them what they can do with them, what are the use-cases. And from our perspective, when a product's released, a CX offer or service package should go out the door with that, too. QuickStarts are the biggest thing we have. >> Yeah and actually one of the keys things we talk about that move to software, with hardware it was inner-operability and how do all these things wire together? >> Exactly. >> Software, right, it needs to be seamless. >> It does. >> It should be platforms. And solutions in there, so give us the critical eye, a look internally, how's Cisco doing, what's the feedback you're hearing from the teams and partners? >> I think we're on the right track. We're well ahead with some of the solutions we're released with Cisco Container Platform, Cisco CloudCenter Suite. The biggest thing we hear from customers, a lot of, especially developers, application users, they don't care, they just want it to be up and running. So, with our integrated solutions, with things like the new HyperFlex 4.0, we build on top of that, they don't have to worry about connectivity to security or to load balancing, name the technology, they can bring it up and we can actually have the software do exactly what it needs to do. >> So, I've observed for decades the evolution and the services' business. >> Yeah. >> When I started in the business, it was all about break-fix. >> Yes. >> Right and then you had large software projects and ERPs. >> Yeah. >> And business process, re-engineering, a lot of consultative selling, internet came in. A lot of e-commerce activity. >> Yeah. >> How has the Cloud changed the service role, the organization, and how you go to market and scale, as you mentioned before. >> I think the biggest change with the Cloud, it's no longer just break-fix, let me go and install it and figure it out. It's, we really need to understand what our requirements are before we move to the Cloud, we hear about speed, cost-performance, but there's a lot more thought that has to go into it. We have to look across the IT infrastructure. So, that advisory upfront, that guidance, that wasn't necessarily always there, that's the biggest change, before we even think about using the product, we need to understand why we purchase this product. >> And so, what do you need from the customer? I mean, you obviously need data and participation and buy-in from the customer, what do you need to be successful there? >> Really from the customer we need to know, what are you trying to accomplish? What are the use-cases, and we have a lot of common use-cases we've seen, security is always a concern. How do I securely connect to the Cloud? How can I leverage Cisco's software to do that? And it's not just about connecting to Cisco's software, but how do we use Cisco's software to do that connectivity? So, it's over and over we see this constant pattern of, I want to build a manager hybrid Cloud securely, multi-Cloud network it and take the complexity out of what we do there. >> As the demographics of your buyer changes- >> Yes. >> How do you service them differently? How do you create a customer experience that's more focused on the way they want to interact with you? Whether it's chat or talk about that a little bit. >> So, you're not really talking to the IT infrastructure person anymore, you're talking to the lines of business or the application developers. So, you have to go in with the understanding of, I'm not going to go in and say, we're going to refresh the hardware, we're going to do this, we're going to give you new switches, new routers. You start the conversation at the application level now. What types of applications do you have? Are they traditional, do we have to re-factor them? Can't we just move them to the Cloud? Then, you go to the next level of, we understand this, now let's get our hardware in place to support this and then our infrastructure. But applications, that's the big shift. That's where the discussion is now. >> Alright, so we've talked about some of the impact of Cloud. >> Yeah. >> We've been hearing about how AI and ML are getting infused- >> Yes. >> Into all the products and that has to have a huge impact on how the customers interact and manage- >> It does. >> And there's got to be a little bit of the retraining that we talked about, too. >> Definitely, I mean, that's probably the biggest challenge, even hiring right now to find the right fit for Cloud or for Dev-Ops, AI, ML, it's a challenge. So, you have to have a plan in place with this background. And, what we've done within CX is we have a five tiered model. So, we start with the pre-requisites, where are you in this scale, we'll give you a rating based on what you have, but you really still have to train the folks, you have to give boot camps, cohorts, then code deliver on different engagements. But you still have to bring in folks with the right background, even if it's network route-switch, you can train them, but you have to have that program in place to be able to ramp them up. >> Yeah, we always said one of the biggest strengths Cisco has, is you've got those army of Cisco certified- >> Yes. >> The CCIEs out there. >> Yes. >> CCNPS and the like out there. Now, a lot of what they have to manage, it's either outside of their control, it's in the public Cloud >> It is, yeah. >> Or, right there's automation. I don't need to just get an alert and go do it, wait I need to make sure that the business rules are in place and- >> Exactly. >> The tooling's going to take care of that. So, help us understand what's the new, what's the new role inside the customers, that's got to change who you're negotiating with and who's involved in the conversations when you're putting this solution together, as well as, kind of the pre as well as the post deployments. >> Sure, sure I think the biggest difference is our customers now have customers. >> Yeah. >> Before we just managed their IT infrastructure. A good example, we have a healthcare comp, a healthcare corporation in Canada, the clinics are basically the clients of the overall organization, they don't care how long it takes to spend, they want speed. They can't go to the IT department and say, give me a VM and then three weeks later, they give it up or they provision it. And then, they'll go and say, well this is too slow. Here's my credit card, I'm going to buy Amazon Web Services and provision it, now we need to bring all of that together so, the route-switch folks need to become multi-Cloud architects. And when I talk about multi-Cloud, they need to know everything up the stack, infrastructure, connectivity with the CSR, security with our Cloud Protect Portfolio, and then the applications, not to mention the vast array of third party solutions, Cooper Netties is everywhere now. It's the defacto standard for containerization. This is really something that's come up over and over. And that's probably one of the biggest challenges is to get our folks to look at the overall stack rather than one piece. >> You challenge. I mean, Cisco and Hallmark, and Cisco has always been partner friendly. >> Yes. >> It's worked with all the different infrastructure that's out there. >> Yup. >> Now, you add in all the different Clouds. >> Exactly. >> And it's not just a cloud. >> It's an entire cloud stack, all the APIs. Your eyes bleed when you look at all the different APIs from Amazon- >> Yup. >> Data services, even. >> Exactly. >> There are dozens and dozens of them and so, so how do you manage (chuckles) that challenge? You can't just throw bodies at it? >> No, so we leverage the tools that we have. Cisco Container Platform's a good example. We use it in-house, but it's the biggest thing we position to our customers in the Cloud story because it's made deploying and managing containers or Cooper Netties simple. Before CCP, my team would deploy open source Cooper Netties which worked great, it was complex to set up, but then you had to look at, I need a tool for monitoring, I need one for logging, for load balancing, you ended up with 10 different applications. You thought you were moving to containers, but hey, there's much more to it. So, now with CCP, it's all packaged, everything's simple to manage. So, that's just the containers. And you mentioned governance before. I think this is a big thing, CloudCenter Suite, we can model our applications in there, deploy to any Cloud endpoint, so we support over 15 Clouds. And what my team does is bring this all together. So, it's not just a service, we want to show you how you can automatically provision those clusters and move it anywhere you want to go. >> Yeah, I wonder if you can put a point on that. The CloudCenter Suite, CloudCenter's been around for awhile. >> It has. >> But there's really been a re-architecture. It's built, Cloud native. >> It is. >> Cooper Netties' in there, but what, as a customer, is going to be like, oh wait, this isn't what I was used to in the past, help us understand what it is for the future. >> Absolutely, I think CloudCenter has been around for awhile, it's an amazing product. I took over this Cloud Portfolio and Services about a year ago and I'd heard all about it, started to ramp up on it, within four hours I couldn't believe this is really gooey-based. This is simple, so I can model the application and it's a simple as clicking deploy, and I can push it to any Cloud environment. And I think that's the biggest challenge, it's always been, how do I migrate my applications from the data center to the cloud or vice-versa. And CloudCenter's made it so simple within two minutes, you can actually migrate an application or deploy it, and they've added so many other features around cost and orchestration that it's everyday, I see customers starting to adopt CloudCenter Suite. >> I want to ask you about Swimlanes. >> Yeah. >> Cisco's a product company. >> Yes. >> You R&D. You build product, you ship products. >> You're not a services company. but you have a large services organization. How do you, what's your swim lane relative to some of the big SIs, what's your relationship with them? How does that work? >> Sure. So, I'm really closely partnered with all of the engineering teams, but at the same time, the partner organization, the systems integrators, they're still partners, especially in the new CX organization, we want to drive the solutions out to our customers, so we're actually taking some of our partners, bringing them on board, ramping them up on our services. And saying, hey you know what, you go deliver it, we'll support you, there's not a competition. I think, with CX now, we've combined everything together, the partners are just as important to us as the products that we sell. >> Will they private label those services or is- >> Yeah, absolutely, so our QuickStarts for example, these smaller packages, to turn up the solution stack quickly and drive adoption, we can hand that off to 'em, they can sell it themselves and label it. >> Yeah, so you're open that. And that drives their brand and their value. Their intimacy with their customers, yeah. >> I mean, we have a big market, but still the partners can reach them different spaces that we wouldn't traditionally be able to get to in professional services. >> Yeah, they have those relationships. Services has always been very local by nature. >> It has. >> The world's not just going to, we've talked about this, not just going to go to three clouds. I mean- >> That's right. >> Services, people want to meet people and they're in the same neighborhood. And there's trust. >> Yup. >> And that just doesn't disappear over night. >> And you have to build that, too. But you have to build the expertise before you get that trust. >> Yeah (chuckles). >> So, Dave, lot of customers here, you've been in meetings, giving presentations all week, give us a little bit of what's the buzz at the show? What are some of the top conversations? People are doing their planning for 2019. >> Yeah. >> You know, big hurdles and big opportunities that people are excited for. >> So, two common themes, security has come up over and over again, customers who haven't moved to Cloud they're concerned, how do I connect? And can I really put this in the Cloud? Or do I have to keep it in the data center? So, we talk about how we can secure and it- >> And I'm sorry, are they concerned about security, compliance, governance- >> They are. >> All of the above. >> One example. Yesterday, a customer said, I have a top secret application. And my company's pushing me towards the Cloud, can I really put this top secret application in a container in a public Cloud environment? So, that's just one conversation. It's the concern of, I don't own this anymore. It's not my data center, so how do I secure the application? How do I make sure there's no type of interference with that app, any type of interjection into damage it, right? And then, the other thing is, I see your stack, I see you have infrastructure, I see all the products, I don't think it's that simple to put together. It's great on a PowerPoint, but show me in the real world how this works together. And, that's what we've been doing, showing these demos, how we can build everything. >> Alright, so once you've shown them, walked through everything, they're feeling answered? >> They're feeling much better, but we go back to the whole CX lifecycle, advisory, implement, support, and that brings it all together. >> Yeah, and the top secret thing, Google, you've been highlighting partnerships with Google, Microsoft, Amazon, they've got specific Clouds, we've been watching this- >> They do. >> 'Specially, all the stuff happening at the government level. >> Yeah. >> And one of the great proof points about public Cloud adoption. >> Yeah, definitely. >> Alright, want to give you the final word as people come away from Cisco Live! 2019, when it comes to customer experience, what do you want them to understand? >> It's all about solutions, putting it together. So, you see all these products, it's not that complex, CX, our partners can help you build it, scale it out, and really adopt it. >> Alright, well Dave Stanford, really appreciate you helping us understand the CX experience here. >> Thank you. >> Definitely lots of opportunities here. Cloud, AI, ML, putting all the solutions together. For Dave Vallente, I'm Stu Miniman, back with more coverage here of Cisco Live! 2019. Thanks for watching theCUBE. (funky upbeat music)

For Las Vegas, it's the cube covering vm world 2018, brought to you by vm ware and its ecosystem partners. Ladies and gentlemen, Vm ware would like to thank it's global diamond sponsors and it's platinum sponsors for vm world 2018 with over 125,000 members globally. The vm ware User Group connects via vmware customers, partners and employees to vm ware, information resources, knowledge sharing, and networking. To learn more, visit the [inaudible] booth in the solutions exchange or the hemoglobin gene vm village become a part of the community today. This presentation includes forward looking statements that are subject to risks and uncertainties. Actual results may differ materially as a result of various risk factors including those described in the 10 k's 10 q's and k's vm ware. Files with the SEC. Ladies and Gentlemen, please welcome Pat Gelsinger. Welcome to vm world. Good morning. Let's try that again. Good morning and I'll just say it is great to be here with you today. I'm excited about the sixth year of being CEO. When it was on this stage six years ago were Paul Maritz handed me the clicker and that's the last he was seen. We have 20,000 plus here on site in Vegas and uh, you know, on behalf of everyone at Vm ware, you know, we're just thrilled that you would be with us and it's a joy and a thrill to be able to lead such a community. We have a lot to share with you today and we really think about it as a community. You know, it's my 23,000 plus employees, the souls that I'm responsible for, but it's our partners, the thousands and we kicked off our partner day yesterday, but most importantly, the vm ware community is centered on you. You know, we're very aware of this event would be nothing without you and our community and the role that we play at vm wares to build these cool breakthrough innovations that enable you to do incredible things. You're the ones who take our stuff and do amazing things. You altogether. We have truly changed the world over the last two decades and it is two decades. You know, it's our anniversary in 1998, the five people that started a vm ware, right. You know, it was, it was exactly 20 years ago and we're just thrilled and I was thinking about this over the weekend and it struck me, you know, anniversary, that's like old people, you know, we're here, we're having our birthday and it's a party, right? We can't have a drink yet, but next year. Yeah. We're 20 years old. Right. We can do that now. And I'll just say the culture of this community is something that truly is amazing and in my 38 years, 38 years in tech, that sort of sounds like I'm getting old or something, but the passion, the loyalty, almost a cult like behavior that we see in this team of people to us is simply thrilling. And you know, we put together a little video to sort of summarize the 20 years and some of that history and some of the unique and quirky aspects of our culture. Let's watch that now. We knew we had something unique and then we demonstrated that what was unique was also some reasons that we love vm ware, you know, like the community out there. So great. The technology I love it. Ware is solid and much needed. Literally. I do love Vmr. It's awesome. Super Awesome. Pardon? There's always someone that wants to listen and learn from us and we've learned so much from them as well. And we reached out to vm ware to help us start building. What's that future world look like? Since we're doing really cutting edge stuff, there's really no better people to call and Bmr has been known for continuous innovation. There's no better way to learn how to do new things in it than being with a company that's at the forefront of technology. What do you think? Don't you love that commitment? Hey Ashley, you know, but in the prep sessions for this, I thought, boy, what can I do to take my commitment to the next level? And uh, so, uh, you know, coming in a couple days early, I went to down the street to bad ass tattoo. So it's time for all of us to take our commitment up level and sometimes what happens in Vegas, you take home. Thank you. Vm Ware has had this unique role in the industry over these 20 years, you know, and for that we've seen just incredible things that have happened over this period of time and it's truly extraordinary what we've accomplished together. And you know, as we think back, you know, what vm ware has uniquely been able to do is I'll say bridge across know and we've seen time and again that we see these areas of innovation emerging and rapidly move forward. But then as they become utilized by our customers, they create this natural tension of what business wants us flexibility to use across these silos of innovation. And from the start of our history, we have collectively had this uncanny ability to bridge across these cycles of innovation. You know, an act one was clearly the server generation. You know, it may seem a little bit, uh, ancient memory now, but you remember you used to walk into your data center and it looked like the loove the museum of it passed right? You know, and you had your old p series and your z series in your sparks and your pas and your x86 cluster and Yo, it had to decide, well, which architecture or am I going to deploy and run this on? And we bridged across and that was the magic of Esx. You don't want to just changed the industry when that occurred. And I sort of called the early days of Esx and vsphere. It was like the intelligence test. If you weren't using it, you fail because Yup. Servers, 10 servers become one months, become minutes. I still have people today who come up to me and they reflect on their first experience of vsphere or be motion and it was like a holy moment in their life and in their careers. Amazing and act to the Byo d, You know, can we bridge across these devices and users wanted to be able to come in and say, I have my device and I'm productive on it. I don't want to be forced to use the corporate standard. And maybe more than anything was the power of the iphone that was introduced, the two, seven, and suddenly every employee said this is exciting and compelling. I want to use it so I can be more productive when I'm here. Bye. Jody was the rage and again it was a tough challenge and once again vm ware helped to bridge across the surmountable challenge. And clearly our workspace one community today is clearly bridging across these silos and not just about managing devices but truly enabling employee engagement and productivity. Maybe act three was the network and you know, we think about the network, you know, for 30 years we were bound to this physical view of what the network would be an in that network. We are bound to specific protocols. We had to wait months for network upgrades and firewall rules. Once every two weeks we'd upgrade them. If you had a new application that needed a firewall rule, sorry, you know, come back next month we'll put, you know, deep frustration among developers and ceos. Everyone was ready to break the chains. And that's exactly what we did. An NSX and Nice Sierra. The day we acquired it, Cisco stock drops and the industry realizes the networking has changed in a fundamental way. It will never be the same again. Maybe act for was this idea of cloud migration. And if we were here three years ago, it was student body, right to the public cloud. Everything is going there. And I remember I was meeting with a cio of federal cio and he comes up to me and he says, I tried for the last two years to replatform my 200 applications I got to done, you know, and all of a sudden that was this. How do I do cloud migration and the effective and powerful way. Once again, we bridged across, we brought these two worlds together and eliminated this, uh, you know, this gap between private and public cloud. And we'll talk a lot more about that today. You know, maybe our next act is what we'll call the multicloud era. You know, because today in a recent survey by Deloitte said that the average business today is using eight public clouds and expected to become 10 plus public clouds. And you know, as you're managing different tools, different teams, different architectures, those solution, how do you, again bridge across, and this is what we will do in the multicloud era, we will help our community to bridge across and take advantage of these powerful cycles of innovation that are going on, but be able to use them across a consistent infrastructure and operational environment. And we'll have a lot more to talk about on this topic today. You know, and maybe the last item to bridge across maybe the most important, you know, people who are profit. You know, too often we think about this as an either or question. And as a business leader, I'm are worried about the people or the And Milton Friedman probably set us up for this issue decades ago when he said, planet, right? the sole purpose of a business is to make profits. You want to create a multi-decade dilemma, right? For business leaders, could I have both people and profits? Could I do well and do good? And particularly for technology, I think we don't have a choice to think about these separately. We are permeating every aspect of business. And Society, we have the responsibility to do both and have all the things that vm ware has accomplished. I think this might be the one that I'm most proud of over, you know, w we have demonstrated by vsphere and the hypervisor alone that we have saved over 540 million tons of co two emissions. That is what you have done. Can you believe that? Five hundred 40 million tons is enough to have 68 percent of all households for a year. Wow. Thank you for what you have done. Thank you. Or another translation of that. Is that safe enough to drive a trillion miles and the average car or you could go to and from Jupiter just in case that was in your itinerary a thousand times. Right? He was just incredible. What we have done and as a result of that, and I'll say we were thrilled to accept this recognition on behalf of you and what you have done. You know, vm were recognized as number 17 in the fortune. Change the world list last week. And we really view it as accepting this honor on behalf of what you have done with our products and technology tech as a force for good. We believe that fundamentally that is our opportunity, if not our obligation, you know, fundamentally tech is neutral, you know, we together must shape it for good. You know, the printing press by Gutenberg in 1440, right? It was used to create mass education and learning materials also can be used for extremist propaganda. The technology itself is neutral. Our ecosystem has a critical role to play in shaping technology as a force for good. You know, and as we think about that tomorrow, we'll have a opportunity to have a very special guest and I really encourage you to be here, be on time tomorrow morning on the stage and you know, Sanjay's a session, we'll have Malala, Nobel Peace Prize winner and fourth will be a bit of extra security as you come in and you understand that. And I just encourage you not to be late because we see this tech being a force for good in everything that we do at vm ware. And I hope you'll enjoy, I'm quite looking forward to the session tomorrow. Now as we think about the future. I like to put it in this context, the superpowers of tech know and you know, 38 years in the industry, you know, I am so excited because I think everything that we've done over the last four decades is creating a foundation that allows us to do more and go faster together. We're unlocking game, changing opportunities that have not been available to any people in the history of humanity. And we have these opportunities now and I, and I think about these four cloud, you have unimaginable scale. You'll literally with your Amex card, you can go rent, you know, 10,000 cores for $100 per hour. Or if you have Michael's am ex card, we can rent a million cores for $10,000 an hour. Thanks Michael. But we also know that we're in many ways just getting started and we have tremendous issues to bridge across and compatible clouds, mobile unprecedented scale. Literally, your application can reach half the humans on the planet today. But we also know that five percent, the lowest five percent of humanity or the other half of humanity, they're still in the lower income brackets, less than five percent penetrated. And we know that we have customer examples that are using mobile phones to raise impoverished farmers in Africa, out of poverty just by having a smart phone with proper crop, the information field and whether a guidance that one tool alone lifting them out of poverty. Ai knows, you know, I really love the topic of ai in 1986. I'm the chief architect of the 80 46. Some of you remember what that was. Yeah, I, you know, you're, you're my folk, right? Right. And for those of you who don't, it was a real important chip at the time. And my marketing manager comes running into my office and he says, Pat, pat, we must make the 46 a great ai chip. This is 1986. What happened? Nothing an AI is today, a 30 year overnight success because the algorithms, the data have gotten so much bigger that we can produce results, that we can bring intelligence to everything. And we're seeing dramatic breakthroughs in areas like healthcare, radiology, you know, new drugs, diagnosis tools, and designer treatments. We're just scratching the surface, but ai has so many gaps, yet we don't even in many cases know why it works. Right? And we'll call that explainable ai and edge and Iot. We're connecting the physical and the digital worlds was never before possible. We're bridging technology into every dimension of human progress. And today we're largely hooking up things, right? We have so much to do yet to make them intelligent. Network secured, automated, the patch, bringing world class it to Iot, but it's not just that these are super powers. We really see that each and each one of them is a super power in and have their own right, but they're making each other more powerful as well. Cloud enables mobile conductivity. Mobile creates more data, more data makes the AI better. Ai Enables more edge use cases and more edge requires more cloud to store the data and do the computing right? They're reinforcing each other. And with that, we know that we are speeding up and these superpowers are reshaping every aspect of society from healthcare to education, the transportation, financial institutions. This is how it all comes together. Now, just a simple example, how many of you have ever worn a hardhat? Yeah, Yo. Pretty boring thing. And it has one purpose, right? You know, keep things from smacking me in the here's the modern hardhat. It's a complete heads up display with ar head. Well, vr capabilities that give the worker safety or workers or factory workers or supply people the ability to see through walls to understand what's going on inside of the equipment. I always wondered when I was a kid to have x Ray Vision, you know, some of my thoughts weren't good about why I wanted it, but you know, I wanted to. Well now you can have it, you know, but imagine in this environment, the complex application that sits behind it. You know, you're accessing maybe 50 year old building plants, right? You're accessing HVAC systems, but modern ar and vr capabilities and new containerized displays. You'll think about that application. You know, John Gage famously said the network is the computer pat today says the application is now a network and pretty typically a complicated one, you know, and this is the vm ware vision is to make that kind of environment realizable in every aspect of our business and community and we simply have been on this journey, any device, any application, any cloud with intrinsic security. And this vision has been consistent for those of you who have been joining us for a number of years. You've seen this picture, but it's been slowly evolving as we've worked in piece by piece to refine and extend this vision, you know, and for it, we're going to walk through and use this as the compass for our discussion today as we walk through our conversation. And you know, we're going to start by a focus on any cloud. And as we think about this cloud topic, you know, we see it as a multicloud world hybrid cloud, public cloud, but increasingly seeing edge and telco becoming clouds in and have their own right. And we're not gonna spend time on it today, but this area of Telco to the is an enormous opportunity for us in our community. You know, data centers and cloud today are over 80 percent virtualized. The Telco network is less than 10 percent virtualized. Wow. An industry that's almost as big as our industry entirely unvirtualized, although the technologies we've created here can be applied over here and Telco and we have an enormous buildout coming with five g and environments emerging. What an opportunity for us, a virgin market right next to us and we're getting some early mega winds in this area using the technologies that you have helped us cure rate than the So we're quite excited about this topic area as well. market. So let's look at this full view of the multicloud. Any cloud journey. And we see that businesses are on a multicloud journey, you know, and today we see this fundamentally in these two paths, a hybrid cloud and a public cloud. And these paths are complimentary and coexisting, but today, each is being driven by unique requirements and unique teams. Largely the hybrid cloud is being driven by it. And operations, the public cloud being driven more by developers and line of business requirements and as some multicloud environment. So how do we deliver upon that and for that, let's start by digging in on the hybrid cloud aspect of this and as we think about the hybrid cloud, we've been talking about this subject for a number of years and I want to give a very specific and crisp definition. You're the hybrid cloud is the public cloud and the private cloud cooperating with consistent infrastructure and consistent operations simply put seamless path to and from the cloud that my workloads don't care if it's here or there. I'm able to run them in a agile, scalable, flexible, efficient manner across those two environments, whether it's my data center or someone else's, I can bring them together to make that work is the magic of the Vm ware Cloud Foundation. The vm ware Cloud Foundation brings together computer vsphere and the core of why we are here, but combines with that networking storage delivered through a layer of management and automation. The rule of the cloud is ruthlessly automate everything. We laid out this vision of the software defined data center seven years ago and we've been steadfastly working on this vision and vm ware. Cloud Foundation provides this consistent infrastructure and operations with integrated lifecycle management automation. Patching the m ware cloud foundation is the simplest path to the hybrid cloud and the fastest way to get vm ware cloud foundation is hyperconverged infrastructure, you know, and with this we've combined integrated then validated hardware and as a building block inside of this we have validated hardware, the v Sand ready environments. We have integrated appliances and cloud delivered infrastructure, three ways that we deliver that integrate integrated hyperconverged infrastructure solution. And we have by far the broadest ecosystem of partners to do it. A broad set of the sand ready nodes from essentially everybody in the industry. Secondly, we have integrated appliances, the extract of vxrail that we have co engineered with our partners at Dell technology and today in fact Dell is releasing the power edge servers, a major step in blade servers that again are going to be powering vxrail and vxrack systems and we deliver hyperconverged infrastructure through a broader set of Vm ware cloud partners as well. At the heart of the hyperconverged infrastructure is v San and simply put, you know, be San has been the engine that's just been moving rapidly to take over the entire integration of compute and storage and expand to more and more areas. We have incredible momentum over 15,000 customers for v San Today and for those of you who joined us, we say thank you for what you have done with this product today. Really amazing you with 50 percent of the global 2000 using it know vm ware. V San Vxrail are clearly becoming the standard for how hyperconverge is done in the industry. Our cloud partner programs over 500 cloud partners are using ulv sand in their solution, you know, and finally the largest in Hci software revenue. Simply put the sand is the software defined storage technology of choice for the industry and we're seeing that customers are putting this to work in amazing ways. Vm Ware and Dell technologies believe in tech as a force for good and that it can have a major impact on the quality of life for every human on the planet and particularly for the most underdeveloped parts of the world. Those that live on less than $2 per day. In fact that this moment 5 billion people worldwide do not have access to modern affordable surgery. Mercy ships is working hard to change the global surgery crisis with greater than 400 volunteers. Mercy ships operates the largest NGO hospital ship delivering free medical care to the poorest of the poor in Africa. Let's see from them now. When the ship shows up to port, literally people line up for days to receive state of the art life, sane changing life saving surgeries, tumor site limbs, disease blindness, birth defects, but not only that, the personnel are educating and training the local healthcare providers with new skills and infrastructure so they can care for their own. After the ship has left, mercy ships runs on Vm ware, a dell technology with VX rail, Dell Isilon data protection. We are the it platform for mercy ships. Mercy ships is now building their next generation ship called global mercy, which were more than double. It's lifesaving capacity. It's the largest charity hospital ever. It will go live in 20 slash 20 serving Africa and I personally plan on being there for its launch. It is truly amazing what they are doing with our technology. Thanks. So we see this picture of the hybrid cloud. We've talked about how we do that for the private cloud. So let's look over at the public cloud and let's dig into this a little bit more deeply. You know, we're taking this incredible power of the Vm ware Cloud Foundation and making it available for the leading cloud providers in the world and with that, the partnership that we announced almost two years ago with Amazon and on the stage last year, we announced their first generation of products, no better example of the hybrid cloud. And for that it's my pleasure to bring to stage my friend, my partner, the CEO of aws. Please welcome Andy Jassy. Thank you andy. You know, you honor us with your presence, you know, and it really is a pleasure to be able to come in front of this audience and talk about what our teams have accomplished together over the last, uh, year. Yo, can you give us some perspective on that, Andy and what customers are doing with it? Well, first of all, thanks for having me. I really appreciate it. It's great to be here with all of you. Uh, you know, the offering that we have together customers because it allows them to use the same software they've been using to again, where cloud and aws is very appealing to manage their infrastructure for years to be able to deploy it an aws and we see a lot of customer momentum and a lot of customers using it. You see it in every imaginable vertical business segment in transportation. You see it with stagecoach and media and entertainment. You see it with discovery communications in education, Mit and Caltech and consulting and accenture and cognizant and dxc you see in every imaginable vertical business segment and the number of customers using the offering is doubling every quarter. So people were really excited about it and I think that probably the number one use case we see so far, although there are a lot of them, is customers who are looking to migrate on premises applications to the cloud. And a good example of that is mit. We're there right now in the process of migrating. In fact, they just did migrate 3000 vms from their data centers to Vm ware cloud native us. And this would have taken years before to do in the past, but they did it in just three months. It was really spectacular and they're just a fun company to work with and the team there. But we're also seeing other use cases as well. And you're probably the second most common example is we'll say on demand capabilities for things like disaster recovery. We have great examples of customers you that one in particular, his brakes, right? Urban in those. The brings security trucks and they all armored trucks coming by and they had a critical need to retire a secondary data center that they were using, you know, for Dr. so we quickly built to Dr Protection Environment for $600. Bdms know they migrated their mission critical workloads and Wallah stable and consistent Dr and now they're eliminating that site and looking for other migrations as well. The rate of 10 to 15 percent. It was just a great deal. One of the things I believe Andy, he'll customers should never spend capital, uh, Dr ever again with this kind of capability in place. That is just that game changing, you know, and you know, obviously we've been working on expanding our reach, you know, we promised to make the service available a year ago with the global footprint of Amazon and now we've delivered on that promise and in fact today or yesterday if you're an ozzie right down under, we announced in Sydney, uh, as well. And uh, now we're in US Europe and in APJ. Yeah. It's really, I mean it's very exciting. Of course Australia is one of the most virtualized places in the world and, and it's pretty remarkable how fast European customers have started using the offering to and just the quarter that's been out there and probably have the many requests customers has had. And you've had a, probably the number one request has been that we make the offering available in all the regions. The aws has regions and I can tell you by the end of 2019 will largely be there including with golf clubs and golf clap. You guys have been, that's been huge for you guys. Yeah. It's a government only region that we have that a lot of federal government workloads live in and we are pretty close together having the offering a fedramp authority to operate, which is a big deal on a game changer for governments because then there'll be able to use the familiar tools they use and vm ware not just to run their workloads on premises but also in the cloud as well with the data privacy requirements, security requirements they need. So it's a real game changer for government too. Yeah. And this you can see by the picture here basically before the end of next year, everywhere that you are and have an availability zone. We're going to be there running on data. Yup. Yeah. Let's get with it. Okay. We're a team go faster. Okay. You'll and you know, it's not just making it available, but this pace of innovation and you know, you guys have really taught us a few things in this respect and since we went live in the Oregon region, you know, we've been on a quarterly cadence of major releases and two was really about mission critical at scale and we added our second region. We added our hybrid cloud extension with m three. We moved the global rollout and we launched in Europe with m four. We really add a lot of these mission critical governance aspects started to attack all of the industry certifications and today we're announcing and five right. And uh, you know, with that, uh, I think we have this little cool thing you know, two of the most important priorities for that we're doing with ebs and storage. Yeah, we'll take, customers, our cost and performance. And so we have a couple of things to talk about today that we're bringing to you that I think hit both of those on a storage side. We've combined the elasticity of Amazon Elastic Block store or ebs with ware is Va v San and we've provided now a storage option that you'll be able to use that as much. It's very high capacity and much more cost effective and you'll start to see this initially on the Vm ware cloud. Native us are five instances which are compute instances, their memory optimized and so this will change the cost equation. You'll be able to use ebs by default and it'll be much more cost effective for storage or memory intensive workloads. Um, it's something that you guys have asked for. It's been very frequently requested it, it hits preview today. And then the other thing is that we've worked really hard together to integrate vm ware's Nsx along with aws direct neck to have a private even higher performance conductivity between on premises and the cloud. So very, very exciting new capabilities to show deep integration between the companies. Yeah. You know, in that aspect of the deep integration. So it's really been the thing that we committed to, you know, we have large engineering teams that are working literally every day. Right on bringing together and how do we fuse these platforms together at a deep and intimate way so that we can deliver new services just like elastic drs and the c and ebs really powerful, uh, capabilities and that pace of innovation continue. So next maybe. Um, maybe six. I don't know. We'll see. All right. You know, but we're continuing this toward pace of innovation, you know, completing all of the capabilities of Nsx. You'll full integration for all of the direct connect to capabilities. Really expanding that. You're only improving licensed capabilities on the platform. We'll be adding pks on top of for expanded developer a capabilities. So just. Oh, thank you. I, I think that was formerly known as Right, and y'all were continuing this pace of storage Chad. So anyway. innovation going forward, but I think we also have a few other things to talk about today. Andy. Yeah, I think we have some news that hopefully people here will be pretty excited about. We know we have a pretty big database business and aws and it's. It's both on the relational and on the nonrelational side and the business is billions of dollars in revenue for us and on the relational side. We have a service called Amazon relational database service or Amazon rds that we have hundreds of thousands of customers using because it makes it much easier for them to set up, operate and scale their databases and so many companies now are operating in hybrid mode and will be for a while and a lot of those customers have asked us, can you give us the ease of manageability of those databases but on premises. And so we talked about it and we thought about and we work with our partners at Vm ware and I'm excited to announce today, right now Amazon rds on Vm ware and so that will bring all the capabilities of Amazon rds to vm ware's customers for their on premises environments. And so what you'll be able to do is you'll be able to provision databases. You'll be able to scale the compute or the memory or the storage for those database instances. You'll be able to patch the operating system or database engines. You'll be able to create, read replicas to scale your database reads and you can deploy this rep because either on premises or an aws, you'll be able to deploy and high high availability configuration by replicating the data to different vm ware clusters. You'll be able to create online backups that either live on premises or an aws and then you'll be able to take all those databases and if you eventually want to move them to aws, you'll be able to do so rather easily. You have a pretty smooth path. This is going to be available in a few months. It will be available on Oracle sql server, sql postgresql and Maria DB. I think it's very exciting for our customers and I think it's also a good example of where we're continuing to deepen the partnership and listen to what customers want and then innovate on their behalf. Absolutely. Thank you andy. It is thrilling to see this and as we said, when we began the partnership, it was a deep integration of our offerings and our go to market, but also building this bi-directional hybrid highway to give customers the capabilities where they wanted cloud on premise, on premise to the cloud. It really is a unique partnership that we've built, the momentum we're feeling to our customer base and the cool innovations that we're doing. Andy, thank you so much for you Jordan Young, rural 20th. You guys appreciate it. Yeah, we really have just seen incredible momentum and as you might have heard from our earnings call that we just finished this. We finished the last quarter. We just really saw customer momentum here. Accelerating. Really exciting to see how customers are starting to really do the hybrid cloud at scale and with this we're just seeing that this vm ware cloud foundation available on Amazon available on premise. Very powerful, but it's not just the partnership with Amazon. We are thrilled to see the momentum of our Vm ware cloud provider program and this idea of the vm ware cloud providers has continued to gain momentum in the industry and go over five years. Right. This program has now accumulated more than 4,200 cloud partners in over 120 countries around the globe. It gives you choice, your local provider specialty offerings, some of your local trusted partners that you would have in giving you the greatest flexibility to choose from and cloud providers that meet your unique business requirements. And we launched last year a program called Vm ware cloud verified and this was saying you're the most complete embodiment of the Vm ware Cloud Foundation offering by our cloud partners in this program and this logo you know, allows you to that this provider has achieved the highest standard for cloud infrastructure and that you can scale and deliver your hybrid cloud and partnering with them. It know a particular. We've been thrilled to see the momentum that we've had with IBM as a huge partner and our business with them has grown extraordinarily rapidly and triple digits, but not just the customer count, which is now over 1700, but also in the depth of customers moving large portions of the workload. And as you see by the picture, we're very proud of the scope of our partnerships in a global basis. The highest standard of hybrid cloud for you, the Vm ware cloud verified partners. Now when we come back to this picture, you know we, you know, we're, we're growing in our definition of what the hybrid cloud means and through Vm Ware Cloud Foundation, we've been able to unify the private and the public cloud together as never before, but we're also seeing that many of you are interested in how do I extend that infrastructure further and farther and will simply call that the edge right? And how do we move data closer to where? How do we move data center resources and capacity closer to where the data's being generated at the operations need to be performed? Simply the edge and we'll dig into that a little bit more, but as we do that, what are the things that we offer today with what we just talked about with Amazon and our VCP p partners is that they can consume as a service this full vm ware Cloud Foundation, but today we're only offering that in the public cloud until project dimension of project dimension allows us to extend delivered as a service, private, public, and to the edge. Today we're announcing the tech preview, a project dimension Vm ware cloud foundation in a hyperconverged appliance. We're partnered deeply with Dell EMC, Lenovo for the first partners to bring this to the marketplace, built on that same proven infrastructure, a hybrid cloud control plane, so literally just like we're managing the Vm ware cloud today, we're able to do that for your on premise. You're small or remote office or your edge infrastructure through that exact same as a service management and control plane, a complete vm ware operated end to end environment. This is project dimension. Taking the vcf stack, the full vm ware cloud foundation stack, making an available in the cloud to the edge and on premise as well, a powerful solution operated by BM ware. This project dimension and project dimension allows us to have a fundamental building block in our approach to making customers even more agile, flexible, scalable, and a key component of our strategy as well. So let's click into that edge a little bit more and we think about the edge in the following layers, the compute edge, how do we get the data and operations and applications closer to where they need to be. If you remember last year I talked about this pendulum swinging of centralization and decentralization edge is a decentralization force. We're also excited that we're moving the edge of the devices as well and we're doing that in two ways. One with workspace, one for human optimized devices and the second is project pulse or Vm ware pulse. And today we're announcing pulse two point zero where you can consume it now as a service as well as with integrated security. And we've now scaled pulse to support 500 million devices. Isn't that incredible, right? I mean this is getting a scale. Billions and billions and finally networking is a key component. You all that. We're stretching the networking platform, right? And evolving how that edge operates in a more cloud and that's a service white and this is where Nsx St with Velo cloud is such a key component of delivering the edge of network services as well. Taken together the device side, the compute edge and rethinking and evolving the networking layer together is the vm ware edge strategy summary. We see businesses are on this multicloud journey, right? How do we then do that for their private of public coming together, the hybrid cloud, but they're also on a journey for how they work and operate it across the public cloud and the public cloud we have this torrid innovation, you'll want Andy's here, challenges. You know, he's announcing 1500 new services or were extraordinary innovation and you'll same for azure or Google Ibm cloud, but it also creates the same complexity as we said. Businesses are using multiple public clouds and how do I operate them? How do I make them work? You know, how do I keep track of my accounts and users that creates a set of cloud operations problems as well in the complexity of doing that. How do you make it work? Right? And your for that. We'll just see that there's this idea cloud cost compliance, analytics as these common themes that of, you know, keep coming up and we're seeing in our customers that are new role is emerging. The cloud operations role. You're the person who's figuring out how to make these multicloud environments work and keep track of who's using what and which data is landing where today I'm thrilled to tell you that the, um, where is acquiring the leader in this space? Cloudhealth technologies. Thank you. Cloudhealth technologies supports today, Amazon, azure and Google. They have some 3,500 customers, some of the largest and most respected brands in the, as a service industry. And Sasa business today rapidly span expanding feature sets. We will take cloudhealth and we're going to make it a fundamental platform and branded offering from the um, where we will add many of the other vm ware components into this platform, such as our wavefront analytics, our cloud, choreo compliance, and many of the other vm ware products will become part of the cloudhealth suite of services. We will be enabling that through our enterprise channels as well as through our MSP and BCPP partners as well know. Simply put, we will make cloudhealth the cloud operations platform of choice for the industry. I'm thrilled today to have Joe Consella, the CTO and founder. Joe, please stand up. Thank you joe to your team of a couple hundred, you know, mostly in Boston. Welcome to the Vm ware family, the Vm ware community. It is a thrill to have you part of our team. Thank you joe. Thank you. We're also announcing today, and you can think of this, much like we had v realize operations and v realize automation, the compliment to the cloudhealth operations, vm ware, cloud automation, and some of you might've heard of this in the past, this project tango. Well, today we're announcing the initial availability of Vm ware, cloud automation, assemble, manage complex applications, automate their provisioning and cloud services, and manage them through a brokerage the initial availability of cloud automation services, service. Your today, the acquisition of cloudhealth as a platform, the aware of the most complete set of multicloud management tools in the industry, and we're going to do so much more so we've seen this picture of this multicloud journey that our customers are on and you know, we're working hard to say we are going to bridge across these worlds of innovation, the multicloud world. We're doing many other things. You're gonna hear a lot at the show today about this year. We're also giving the tech preview of the Vm ware cloud marketplace for our partners and customers. Also today, Dell technologies is announcing their cloud marketplace to provide a self service, a portfolio of a Dell emc technologies. We're fundamentally in a unique position to accelerate your multicloud journey. So we've built out this any cloud piece, but right in the middle of that any cloud is the network. And when we think about the network, we're just so excited about what we have done and what we're seeing in the industry. So let's click into this a little bit further. We've gotten a lot done over the last five years. Networking. Look at these numbers. 80 million switch ports have been shipped. We are now 10 x larger than number two and software defined networking. We have over 7,500 customers running on Nsx and maybe the stat that I'm most proud of is 82 percent of the fortune 100 has now adopted nsx. You have made nsx these standard and software defined networking. Thank you very much. Thank you. When we think about this journey that we're on, we started. You're saying, Hey, we've got to break the chains inside of the data center as we said. And then Nsx became the software defined networking platform. We started to do it through our cloud provider partners. Ibm made a huge commitment to partner with us and deliver this to their customers. We then said, boy, we're going to make a fundamental to all of our cloud services including aws. We built this bridge called the hybrid cloud extension. We said we're going to build it natively into what we're doing with Telcos, with Azure and Amazon as a service. We acquired the St Wagon, right, and a Velo cloud at the hottest product of Vm ware's portfolio today. The opportunity to fundamentally transform branch and wide area networking and we're extending it to the edge. You're literally, the world has become this complex network. We have seen the world go from the old defined by rigid boundaries, simply put in a distributed world. Hardware cannot possibly work. We're empowering customers to secure their applications and the data regardless of where they sit and when we think of the virtual cloud network, we say it's these three fundamental things, a cloud centric networking fabric with intrinsic security and all of it delivered in software. The world is moving from data centers to centers of data and they need to be connected and Nsx is the way that we will do that. So you'll be aware of is well known for this idea of talking but also showing. So no vm world keynote is okay without great demonstrations of it because you shouldn't believe me only what we can actually show and to do that know I'm going to have our CTL come onstage and CTL y'all. I used to be a cto and the CTO is the certified smart guy. He's also known as the chief talking officer and today he's my demo partner. Please walk, um, Vm ware, cto ray to the stage. Right morning pat. How you doing? Oh, it's great ray, and thanks so much for joining us. Know I promised that we're going to show off some pretty cool stuff here. We've covered a lot already, but are you up to the task? We're going to try and run through a lot of demos. We're going to do it fast and you're going to have to keep me on time to ask an awkward question. Slow me down. Okay. That's my fault if you run along. Okay, I got it. I got it. Let's jump right in here. So I'm a CTO. I get to meet lots of customers that. A few weeks ago I met a cio of a large distribution company and she described her it infrastructure as consisting of a number of data centers troll to us, which he also spoke of a large number of warehouses globally, and each of these had local hyperconverged compute and storage, primarily running surveillance and warehouse management applications, and she pulls me four questions. The first question she asked me, she says, how do I migrate one of these data centers to Vm ware cloud on aws? I want to get out of one of these data centers. Okay. Sounds like something andy and I were just talking exactly, exactly what you just spoke to a few moments ago. She also wanted to simplify the management of the infrastructure in the warehouse as themselves. Okay. He's age and smaller data centers that you've had out there. Her application at the warehouses that needed to run locally, butter developers wanted to develop using cloud infrastructure. Cloud API is a little bit late. The rds we spoken with her in. Her final question was looking to the future, make all this complicated management go away. I want to be able to focus on my application, so that's what my business is about. So give me some new ways of how to automate all of this infrastructure from the edge to the cloud. Sounds pretty clear. Can we do it? Yes we can. So we're going to dive right in right now into one of these demos. And the first demo we're going to look at it is vm ware cloud on aws. This is the best solution for accelerating this public cloud journey. So can we start the demo please? So what you were looking at here is one of those data centers and you should be familiar with this product. It's a familiar vsphere client. You see it's got a bunch of virtual machines running in there. These are the virtual machines that we now want to be able to migrate and move the VMC on aws. So we're going to go through that migration right now. And to do that we use a product that you've seen already atx, however it's the x has been, has got some new cool features since the last time we download it. Probably on this stage here last year, I wanted those in particular is how do we do bulk migration and there's a new cool thing, right? Whole thing we want to move the data center en mass and his concept here is cloud motion with vsphere replication. What this does is it replicates the underlying storage of the virtual machines using vsphere replication. So if and when you want to now do the final migration, it actually becomes a vmotion. So this is what you see going on right here. The replication is in place. Now when you want to touch you move those virtual machines. What you'll do is a vmotion and the key thing to think about here is this is an actual vmotion. Those the ends as room as they're moving a hustler, migrating remained life just as you would in a v motion across one particular infrastructure. Did you feel complete application or data center migration with no dying town? It's a Standard v motion kind of appearance. Wow. That is really impressive. That's correct. Wow. You. So one of the other things we want to talk about here is as we are moving these virtual machines from the on prem infrastructure to the VMC on aws infrastructure, unfortunately when we set up the cloud on VMC and aws, we only set up for hosts, uh, that might not be, that'd be enough because she is going to move the whole infrastructure of that this was something you guys, you and Andy referred to briefly data center. Now, earlier, this concept of elastic drs. what elastic drs does, it allows the VMC on aws to react to the workloads as they're being created and pulled in onto that infrastructure and automatically pull in new hosts into the VMC infrastructure along the way. So what you're seeing here is essentially the MC growing the infrastructure to meet the needs of the workloads themselves. Very cool. So overseeing that elastic drs. we also see the ebs capabilities as well. Again, you guys spoke about this too. This is the ability to be able to take the huge amount of stories that Amazon have, an ebs and then front that by visa you get the same experience of v Sign, but you get this enormous amount of storage capabilities behind it. Wow. That's incredible. That's incredible. I'm excited about this. This is going to enable customers to migrate faster and larger than ever before. Correct. Now she had a series of little questions. Okay. The second question was around what about all those data centers and those age applications that I did not move, and this is where we introduce the project which you've heard of already tonight called project dementia. What this does, it gives you the simplicity of Vm ware cloud, but bringing that out to the age, you know what's basically going on here, vmc on aws is a service which manages your infrastructure in aws. We know stretch that service out into your infrastructure, in your data center and at the age, allowing us to be able to manage that infrastructure in the same way. Once again, let's dive down into a demo and take a look at what this looks like. So what you've got here is a familiar series of services available to you, one of them, which is project dimension. When you enter project dimension, you first get a view of all of the different infrastructure that you have available to you, your data centers, your edge locations. You can then dive deeply into one of these to get a closer look at what's going on here. We're diving into one of these The problem is there's a networking problem going on in this warehouse. warehouses and we see it as a problem here. How do we know? We know because vm ware is running this as a managed service. We are directly managing or sorry, monitoring your infrastructure or we discover there's something going wrong here. We automatically create the ASR, so somebody is dealing with this. You have visibility to what's going on, but the vm ware managed service is already chasing the problem for you. Oh, very good. So now we're seeing this dispersed infrastructure with project dementia, but what's running on it so well before we get with running out, you've got another problem and the problem is of course, if you're managing a lot of infrastructure like this, you need to keep it up to date. And so once again, this is where the vm ware managed service kicks in. We manage that infrastructure in terms of patching it and updating it for you. And as an example, when we released a security patch, here's one for the recent l, one terminal fault, the Vmr managed service is already on that and making sure that your on prem and edge infrastructure is up to date. Very good. Now, what's running? Okay. So what's running, uh, so we mentioned this case of this software running at the edge infrastructure itself, and these are workloads which are running locally in those age, uh, those edge locations. This is a surveillance application. You can see it here at the bottom it says warehouse safety monitor. So this is an application which gathers images and then stores those images He said my sql database on top there, now this is where we leverage the somewhere and it puts them in a database. technology you just learned about when Andy and pat spoke about disability to take rds and run that on your on prem infrastructure. The block of virtual machines in the moment are the rds components from Amazon running in your infrastructure or in your edge location, and this gives you the ability to allow your developers to be able to leverage and operate against those Apis, but now the actual database, the infrastructure is running on prem and you might be doing just for performance reasons because of latency, you might be doing it simply because this data center is not always connected to the cloud. When you take a look into under the hood and see what's going on here, what you actually see this is vsphere, a modified version of vsphere. You see this new concept of my custom availability zone. That is the availability zone running on your infrastructure which supports or ds. What's more interesting is you flip back to the Amazon portal. This is typically what your developers are going to do. Once again, you see an availability zone in your Amazon portal. This is the availability zone running on your equipment in your data center. So we've truly taken that already as infrastructure and moved it to the edge so the developer sees what they're comfortable with and the infrastructure sees what they're comfortable with bridging those two worlds. Fabulous. Right. So the final question of course that we got here was what's next? How do I begin to look to the future and say I am going to, I want to be able to see all of my infrastructure just handled in an automated fashion. And so when you think about that, one of the questions there is how do we leverage new technologies such as ai and ml to do that? So what you've got here is, sorry we've got a little bit later. What you've got here is how do I blend ai in a male and the power of what's in the data center itself. Okay. And we could do that. We're bringing you the AI and ml, right? And fusing them together as never before to truly change how the data center operates. Correct. And it is this introduction is this merging of these things together, which is extremely powerful in my mind. This is a little bit like a self driving vehicle, so thinking about a car driving down the street is self driving vehicle, it is consuming information from all of the environment around it, other vehicles, what's happening, everything from the wetter, but it also has a lot of built in knowledge which is built up to to self learning and training along the way in the kids collecting lots of that data for decades. Exactly. And we've got all that from all the infrastructure that we have. We can now bring that to bear. So what we're focusing on here is a project called project magna and project. Magna leverage is all of this infrastructure. What it does here is it helps connect the dots across huge datasets and again a deep insight across the stack, all the way from the application hardware, the infrastructure to the public cloud, and even the age and what it does, it leverages hundreds of control points to optimize your infrastructure on Kpis of cost performance, even user specified policies. This is the use of machine language in order to fundamentally transform. I'm sorry, machine learning. I'm going back to some. Very early was here, right? This is the use of machine learning and ai, which will automatically transform. How do you actually automate these data centers? The goal is true automation of your infrastructure, so you get to focus on the applications which really served needs of your business. Yeah, and you know, maybe you could think about that as in the past we would have described the software defined data center, but in the future we're calling it the self driving data center. Here we are taking that same acronym and redefining it, right? Because the self driving data center, the steep infusion of ai and machine learning into the management and automation into the storage, into the networking, into vsphere, redefining the self driving data center and with that we believe fundamentally is to be an enormous advance and how they can take advantage of new capabilities from bm ware. Correct. And you're already seeing some of this in pieces of projects such as some of the stuff we do in wavefront and so already this is how do we take this to a new level and that's what project magnet will do. So let's summarize what we've seen in a few demos here as we work in true each of these very quickly going through these demos. First of all, you saw the n word cloud on aws. How do I migrate an entire data center to the cloud with no downtime? Check, we saw project dementia, get the simplicity of Vm ware cloud in the data center and manage it at the age as a managed service check. Amazon rds and Vm ware. Cool Demo, seamlessly deploy a cloud service to an on premises environment. In this case already. Yes, we got that one coming in are in m five. And then finally project magna. What happens when you're looking to the future? How do we leverage ai and ml to self optimize to virtual infrastructure? Well, how did ray do as our demo guy? Thank you. Thanks. Thanks. Right. Thank you. So coming back to this picture, our gps for the day, we've covered any cloud, let's click into now any application, and as we think about any application, we really view it as this breadth of the traditional cloud native and Sas Coobernetti is quickly maybe spectacularly becoming seen as the consensus way that containers will be managed and automate as the framework for how modern APP teams are looking at their next generation environment, quickly emerging as a key to how enterprises build and deploy their applications today. And containers are efficient, lightweight, portable. They have lots of values for developers, but they need to also be run and operate and have many infrastructure challenges as well. Managing automation while patch lifecycle updates, efficient move of new application services, know can be accelerated with containers. We also have these infrastructure problems and you know, one thing we want to make clear is that the best way to run a container environment is on a virtual machine. You know, in fact, every leader in public cloud runs their containers and virtual machines. Google the creator and arguably the world leader in containers. They runs them all in containers. Both their internal it and what they run as well as G K, e for external users as well. They just announced gke on premise on vm ware for their container environments. Google and all major clouds run their containers and vms and simply put it's the best way to run containers. And we have solved through what we have done collectively the infrastructure problems and as we saw earlier, cool new container apps are also typically some ugly combination of cool new and legacy and existing environments as well. How do we bridge those two worlds? And today as people are rapidly moving forward with containers and Coobernetti's, we're seeing a certain set of problems emerge. And Dan cone, right, the director of CNCF, the Coobernetti, uh, the cloud native computing foundation, the body for Coobernetti's collaboration and that, the group that sort of stewards the standardization of this capability and he points out these four challenges. How do you secure them? How do you network and you know, how do you monitor and what do you do for the storage underneath them? Simply put, vm ware is out to be, is working to be is on our way to be the dial tone for Coobernetti's. Now, some of you who were in your twenties might not know what that means, so we know over to a gray hair or come and see me afterward. We'll explain what dial tone means to you or maybe stated differently. Enterprise grade standard for Cooper netties and for that we are working together with our partners at Google as well as pivotal to deliver Vm ware, pks, Cooper netties as an enterprise capability. It builds on Bosh. The lifecycle engine that's foundational to the pivotal have offerings today, uh, builds on and is committed to stay current with the latest Coobernetti's releases. It builds on Nsx, the SDN container, networking and additional contributions that were making like harbor the Vm ware open source contribution for the container registry. It packages those together makes them available on a hybrid cloud as well as public cloud environments with pks operators can efficiently deploy, run, upgrade their coopernetties environments on SDDC or on all public clouds. While developers have the freedom to embrace and run their applications rapidly and efficiently, simply put, pks, the standard for Coobernetti's in the enterprise and underneath that Nsx you'll is emerging as the standard for software defined networking. But when we think about and we saw that quote on the challenges of Kubernetes today, we see that networking is one of the huge challenge is underneath that and in a containerized world, things are changing even more rapidly. My network environment is moving more quickly. NSX provides the environment's easily automate networking and security for rapid deployment of containerized environments that fully supports the MRP chaos, fully supports pivotal's application service, and we're also committed to fully support all of the major kubernetes distribution such as red hat, heptio and docker as well Nsx, the only platform on the planet that can address the complexity and scale of container deployments taken together Vm Ware, pks, the production grade computer for the enterprise available on hybrid cloud, available on major public clouds. Now, let's not just talk about it again. Let's see it in action and please walk up to the stage. When di Carter with Ray, the senior director of cloud native marketing for Vm ware. Thank you. Hi everybody. So we're going to talk about pks because more and more new applications are built using kubernetes and using containers with vm ware pts. We get to simplify the deploying and the operation of Kubernetes at scale. When the. You're the experts on all of this, right? So can you take as true the scenario of how pks or vm ware pts can really help a developer operating the Kubernedes environment, developed great applications, but also from an administrator point of view, I can really handle things like networking, security and those configurations. Sounds great. I love to dive into the demo here. Okay. Our Demo is. Yeah, more pks running coubernetties vsphere. Now pks has a lot of cool functions built in, one of which is Nsx. And today what I'm going to show you is how NSX will automatically bring up network objects as quick Coobernetti's name spaces are spun up. So we're going to start with the fees per client, which has been extended to Ron pks, deployed cooper clusters. We're going to go into pks instance one, and we see that there are five clusters running. We're going to select one other clusters, call application production, and we see that it is running nsx. Now a cluster typically has multiple users and users are assigned namespaces, and these namespaces are essentially a way to provide isolation and dedicated resources to the users in that cluster. So we're going to check how many namespaces are running in this cluster and more brought up the Kubernetes Ui. We're going to click on namespace and we see that this cluster currently has four namespaces running wire. We're going to do next is bringing up a new name space and show that Nsx will automatically bring up the network objects required for that name space. So to do that, we're going to upload a Yammel file and your developer may actually use Ku Kata command to do this as well. We're going to check the namespace and there it is. We have a new name space called pks rocks. Yeah. Okay. Now why is that guy now? It's great. We have a new name space and now we want to make sure it has the network elements assigned to us, so we're going to go to the NSX manager and hit refresh and there it is. PKS rocks has a logical robber and a logical switch automatically assigned to it and it's up and running. So I want to interrupt here because you made this look so easy, right? I'm not sure people realize the power of what happened here. The developer, winton using Kubernetes, is api infrastructure to familiar with added a new namespace and behind the scenes pks and tardy took care of the networking. It combination of Nsx, a combination of what we do at pks to truly automate this function. Absolutely. So this means that if you are on the infrastructure operation, you don't need to worry about your developer springing up namespaces because Nsx will take care of bringing the networking up and then bringing them back down when the namespace is not used. So rate, but that's not it. Now, I was in operations before and I know how hard it is for enterprises to roll out a new product without visibility. Right, so pks took care of those dates, you operational needs as well, so while it's running your clusters, it's also exporting Meta data so that your developers and operators can use wavefront to gain deep visibility into the health of the cluster as well as resources consumed by the cluster. So here you see the wavefront Ui and it's showing you the number of nodes running, active parts, inactive pause, et cetera. You can also dive deeper into the analytics and take a look at information site, Georgia namespace, so you see pks rocks there and you see the number of active nodes running as well as the CPU utilization and memory consumption of that nice space. So now pks rocks is ready to run containerized applications and microservices. So you just get us a very highlight of a demo here to see a little bit what pks pks says, where can we learn more? So we'd love to show you more. Please come by the booth and we have more cool functions running on pks and we'd love to have you come by. Excellent. Thank you, Lindy. Thank you. Yeah, so when we look at these types of workloads now running on vsphere containers, Kubernedes, we also see a new type of workload beginning to appear and these are workloads which are basically machine learning and ai and in many cases they leverage a new type of infrastructure, hardware accelerators, typically gps. What we're going to talk about here is how in video and Vm ware have worked together to give you flexibility to run sophisticated Vdi workloads, but also to leverage those same gpu for deep learning inference workloads also on vsphere. So let's dive right into a demo here. Again, what you're seeing here is again, you're looking at here, you're looking at your standard view realized operations product, and you see we've got two sets of applications here, a Vdi desktop workload and machine learning, and the graph is showing what's happening with the Vdi desktops. These are office workers leveraging these desktops everyday, so of course the infrastructure is super busy during the daytime when they're in the office, but the green area shows this is not been used very heavily outside of those times. So let's take a look. What happens to the machine learning application in this case, this organization leverages those available gpu to run the machine learning operations outside the normal working hours. Let's take a little bit of a deeper dive into what the application it is before we see what we can do from an infrastructure and configuration point of view. So this machine learning application processes a vast number of images and it clarify or sorry, it categorizes these images and as it's doing so, it is moving forward and putting each of these in a database and you can see it's operating here relatively fast and it's leveraging some gps to do that. So typical image processing type of machine learning problem. Now let's take a dive in and look at the infrastructure which is making this happen. First of all, we're going to look only at the Vdi employee Dvt, a Vdi infrastructure here. So I've got a bunch of these applications running Vdi applications. What I want to do is I want to move these so that I can make this image processing out a application run a lot faster. Now normally you wouldn't do this, but pot insisted that we do this demo at 10:30 in the morning when the office workers are in there, so we're going to move older Vdi workloads over to the other cluster and that's what you're seeing is going on right now. So as they move over to this other cluster, what we are now doing is freeing up all of the infrastructure. The GPU that Vdi workload was using here. We see them moving across and now you've freed up that infrastructure. So now we want to take a look at this application itself, the machine learning application and see how we can make use of that. Now freed up infrastructure we've got here is the application is running using one gpu in a vsphere cluster, but I've got three more gpu is available now because I've moved the Vdi workloads. We simply modify the application, let it know that these are available and you suddenly see an increase in the processing capabilities because of what we've done here in terms of making the flexibility of accessing those gps. So what you see here is the same gps that youth for Vdi, which you probably have in your infrastructure today, can also be used to run sophisticated machine learning and ai type of applications on your vsphere infrastructure. So let's summarize what we've seen in the various demos here in this section. First of all, we saw how the MRPS simplifies the deployment and operating operation of Kubernetes at scale. What we've also seen is that leveraging the Nvidia Gpu, we can now run the most demanding workloads on vsphere. When we think about all of these applications and these new types of workloads that people are running. I want to take one second to speak to another workload that we're seeing beginning to appear in the data center. And this is of course blockchain. We're seeing an increasing number of organizations evaluating blockchains for smart contract and digital consensus solutions. So this tech, this technology is really becoming or potentially becoming a critical role in how businesses will interact each other, how they will work together. We'd project concord, which is an open source project that we're releasing today. You get the choice, performance and scale of verifiable trust, which you can then bring to bear and run in the enterprise, but this is not just another blockchain implementation. We have focused very squarely on making sure that this is good for enterprises. It focuses on performance, it focuses on scalability. We have seen examples where running consensus algorithms have taken over 80 days on some of the most common and widely used infrastructure in blockchain and we project conquered. You can do that in two and a half hours. So I encourage you to check out this project on get hub today. You'll also see lots of activity around the whole conference. Speaking about this. Now we're going to dive into another section which is the anti device section. And for that I need to welcome pat back up there. Thank you pat. Thanks right. So diving into any device piece of the puzzle, you and as we think about the superpowers that we have, maybe there are no more area that they are more visible than in the any device aspect of our picture. You know, and as we think about this, the superpowers, you know, think about mobility, right? You know, and how it's enabling new things like desktop as a service in the mobile area, these breadth of smartphones and devices, ai and machine learning allow us to manage them, secure them and this expanding envelope of devices in the edge that need to be connected and wearables and three d printers and so on. We've also seen increasing research that says engaged employees are at the center of business success. Engaged employees are the critical ingredient for digital transformation. And frankly this is how I run vm ware, right? You know, I have my device and my work, all my applications, every one of my 23,000 employees is running on our transformed workspace one environment. Research shows that companies that, that give employees ready anytime access are nearly three x more likely to be leaders in digital transformation. That employees spend 20 percent of their time today on manual processes that can be automated. The way team collaboration and speed of division decisions increases by 16 percent with engaged employees with modern devices. Simply put this as a critical aspect to enabling your business, but you remember this picture from the silos that we started with and each of these environments has their own tribal communities of management, security automation associated with them, and the complexity associated with these is mind boggling and we start to think about these. Remember the I'm a pc and I'm a Mac. Well now you have. I'm an Ios. I'm a droid and other bdi and I'm now a connected printer and I'm a connected watch. You remember citrix manager and good is now bad and sccm a failed model and vpns and Xanax. The chaos is now over at the center of that is vm ware, workspace one, get it out of the business of managing devices, automate them from the cloud, but still have the mentor price. Secure cloud based analytics that brings new capabilities to this critical topic. You'll focus your energy on creating employee and customer experiences. You know, new capabilities to allow like our airlift, the new capability to help customers migrate from their sccm environment to a modern management, expanding the use of workspace intelligence. Last year we announced the chromebook and a partnership with HP and today I'm happy to announce the next step in our partnerships with Dell. And uh, today we're announcing that Dell provisioning for Vm ware, workspace one as part of Dell's ready to work solutions Dallas, taking the next leap and bringing workspace one into the core of their client to offerings. And the way you can think about this as Literally a dell drop ship, lap pops showing up to new employee. day one, productivity. You give them their credential and everything else is delivered by workspace one, your image, your software, everything patched and upgraded, transforming your business, right beginning at that device experience that you give to your customer. And again, we don't want to talk about it. We want to show you how this works. Please walk to the stage with re renew the head of our desktop products marketing. Thank you. So we just heard from pat about how workspace one integrated with Dell laptops is really set up to manage windows devices. What we're broadly focused on here is how do we get a truly modern management system for these devices, but one that has an intelligence behind it to make sure that we're kept with a good understanding of how to keep these devices always up to date and secure. Can we start the demo please? So what we're seeing here is to be the the front screen that you see of workspace one and you see you've got multiple devices a little bit like that demo that patch assured. I've got Ios, android, and of course I've got windows renewal. Can you please take us through how workspace one really changes the ability of somebody an it administrator to update and manage windows into our environment? Absolutely. With windows 10, Microsoft has finally joined the modern management body and we are really excited about that. Now. The good news about modern management is the frequency of ostp updates and how quickly they come out because you can address all those security issues that are hitting our radar on a daily basis, but the bad news about modern management is the frequency of those updates because all of us in it admins, we have to test each and every one of our applications would that latest version because we don't want to roll out that update in case of causes any problems with workspace one, we saw that we simply automate and provide you with the APP compatibility information right out of the box so you can now automate that update process. Let's take a quick look. Let's drill down here further into the windows devices. What we'll see is that only a small percentage of those devices are on that latest version of operating system. Now, that's not a good thing because it might have an important security fix. Let's scroll down further and see what the issue is. We find that it's related to app compatibility. In fact, 38 percent of our devices are blocked from being upgraded and the issue is app compatibility. Now we were able to find that not by asking the admins to test each and every one of those, but we combined windows analytics data with APP intelligent out of the box and be provided that information right here inside of the console. Let's dig down further and see what those devices and apps look like. So knew this is the part that I find most interesting. If I am a system administrator at this point I'm looking at workspace one is giving me a key piece of information. It says if you proceed with this update, it's going to fail 84, 85 percent at a time. So that's an important piece of information here, but not alone. Is it telling me that? It is telling me roughly speaking why it thinks it's going to fail. We've got a number of apps which are not ready to work with this new version, particularly the Mondo card sales lead tracker APP. So what we need to do is get engineering to tackle the problems with this app and make sure that it's updated. So let's get fixing it in order to fix it. What we'll do is create an automation and we can do this right out of the box in this automation will open up a Jira ticket right from within the console to inform the engineers about the problem, not just that we can also flag and send a notification to that engineering manager so that it's top of mine and they can get working on this fixed right away. Let's go ahead and save that automation right here, ray UC. There's the automation that we just So what's happening here is essentially this update is now scheduled meeting. saved. We can go and update oldest windows devices, but workspace one is holding the process of proceeding with that update, waiting for the engineers to update the APP, which is going to cause the problem. That's going to take them some time, right? So the engineers have been working on this, they have a fixed and let's go back and see what's happened to our devices. So going back into the ios updates, what we'll find is now we've unblocked those devices from being upgraded. The 38 percent has drastically dropped down. It can rest in peace that all of the devices are compliant and on that latest version of operating system. And again, this is just a snapshot of the power of workspace one to learn more and see more. I invite you all to join our EOC showcase keynote later this evening. Okay. So we've spoken about the presence of these new devices that it needs to be able to manage and operate across everything that they do. But what we're also seeing is the emergence of a whole new class of computing device. And these are devices which are we commonly speak to have been at the age or embedded devices or Iot. And in many cases these will be in factories. They'll be in your automobiles, there'll be in the building, controlling, controlling, uh, the building itself, air conditioning, etc. Are quite often in some form of industrial environment. There's something like this where you've got A wind farm under embedded in each of these turbines. This is a new class of computing which needs to be managed, secured, or we think virtualization can do a pretty good job of that in new virtualization frontier, right at the edge for iot and iot gateways, and that's gonna. That's gonna, open up a whole new realm of innovation in that space. Let's dive down and taking the demo. This spaces. Well, let's do that. What we're seeing here is a wind turbine farm, a very different than a data center than what we're used to and all the compute infrastructure is being managed by v center and we see to edge gateway hose and they're running a very mission critical safety watchdog vm right on there. Now the safety watchdog vm is an fte mode because it's collecting a lot of the important sensor data and running the mission critical operations for the turbine, so fte mode or full tolerance mode, that's a pretty sophisticated virtualization feature allowing to applications to essentially run in lockstep. So if there's a failure, wouldn't that gets to take over immediately? So this no sophisticated virtualization feature can be brought out all the way to the edge. Exactly. So just like in the data center, we want to perform an update, so as we performed that update, the first thing we'll do is we'll suspend ft on that safety watchdog. Next, we'll put two. Oh, five into maintenance mode. Once that's done, we'll see the power of emotion that we're all familiar with. We'll start to see all the virtual machines vmotion over to the second backup host. Again, all the maintenance, all the update without skipping a heartbeat without taking down any daily operations. So what we're seeing here is the basic power of virtualization being brought out to the age v motion maintenance mode, et cetera. Great. What's the big deal? We've been doing that for years. What's the, you know, come on. What's the big deal? So what you're on the edge. So when you get to the age pack, you're dealing with a whole new class of infrastructure. You're dealing with embedded systems and new types of cpu hours and process. This whole demo has been done on an arm 64. Virtualization brought to arm 64 for embedded devices. So we're doing this on arm on the edge, correct. Specifically focused for embedded for age oems. Okay. Now that's good. Okay. Thank you ray. Actually, we've got a summary here. Pat, just a second before you disappear. A lot to rattle off what we've just seen, right? We've seen workspace one cross platform management. What we've also seen, of course esx for arm to bring the power of vfx to edge on 64, but are in platforms will go no. Okay. Okay. Thank you. Thanks. Now we've seen a look at a customer who is taking advantage of everything that we just saw and again, a story of a customer that is just changing lives in a fundamental way. Let's see. Make a wish. So when a family gets the news that a child is sick and it's a critical illness, it could be a life threatening illness. The whole family has turned upside down. Imagine somebody comes to you and they say, what's the one thing you want that's in your heart? You tell us and then we make that happen. So I was just calling to give you the good news that we're going to be able to grant jackson a wish make, which is the largest wish granting organizations in the United States. English was featured in the cbs 60 minutes episode. Interestingly, it got a lot of hits, but uh, unfortunately for the it team, the whole website crashed make a wish is going through a program right now where we're centralizing technology and putting certain security standards in place at our chapters. So what you're seeing here, we're configuring certain cloud services to make sure that they always are able to deliver on the mission whether they have a local problem or not is we continue to grow the partnership and work with vm ware. It's enabling us to become more efficient in our processes and allows us to grant more wishes. It was a little girl. She had a two year old brother. She just wanted a puppy and she was forthright and I want to name the puppy in my name so my brother would always have me to list them off a five year old. It's something we can't change their medical outcome, but we can change their spiritual outcome and we can transform their lives. Thank you. Working together with you truly making wishes come true. The last topic I want to touch on today, and maybe the most important to me personally is security. You got to fundamentally, when we think about this topic of security, I'll say it's broken today and you know, we would just say that the industry got it wrong that we're trying to bolt on or chasing bad, and when we think about our security spend, we're spending more and we're losing more, right? Every day we're investing more in this aspect of our infrastructure and we're falling more behind. We believe that we have to have much less security products and much more security. You know, fundamentally, you know, if you think about the problem, we build infrastructure, right? Generic infrastructure, we then deploy applications, all kinds of applications, and we're seeing all sorts of threats launched that as daily tens of millions. You're simple virus scanner, right? Is having tens of millions of rules running and changing many times a day. We simply believe the security model needs to change. We need to move from bolted on and chasing bad to an environment that has intrinsic security and is built to ensure good. This idea of built in security. We are taking every one of the core vm ware products and we are building security directly into it. We believe with this, we can eliminate much of the complexity. Many of the sensors and agents and boxes. Instead, they'll directly leverage the mechanisms in the infrastructure and we're using that infrastructure to lock it down to behave as we intended it to ensure good, right on the user side with workspace one on the network side with nsx and microsegmentation and storage with native encryption and on the compute with app defense, we are building in security. We're not chasing threats or adding on, but radically reducing the attack surface. When we look at our applications in the data center, you see this collection of machines running inside of it, right? You know, typically running on vsphere and those machines are increasingly connected. Through nsx and last year we introduced the breakthrough security solution called app defense and app defense. Leverages the unique insight we get into the application so that we can understand the application and map it into the infrastructure and then you can lock down, you could take that understanding, that manifest of its behavior and then lock those vms to that intended behavior and we do that without the operational and performance burden of agents and other rear looking use of attack detection. We're shrinking the attack surface, not chasing the latest attack vector, you know, and this idea of bolt on versus chasing bad. You sort of see it right in the network. Machines have lots of conductivity, lots of applications running and something bad happens. It basically has unfettered access to move horizontally through the data center and most of our security is north, south. MosT of the attacks are eastwest. We introduced this idea of microsegmentation five years ago, and by it we're enabling organizations to secure some networks and separate sensitive applications and services as never before. This idea isn't new, that just was never practical before nsx, but we're not standing still. Our teams are innovating to leap beyond 12. What's next beyond microsegmentation, and we see this in three simple words, learn, imagine a system that can look into the applications and understand their behavior and how they should operate. we're using machine learning and ai instead of chasing were to be able to ensure good where that that system can then locked down its behavior so the system consistently operates that way, but finally we know we have a world of increasing dynamic applications and as we move to more containerize the microservices, we know this world is changing, so we need to adapt. We need to have more automation to adapt to the current behavior. Today I'm very excited to have two major announcements that are delivering on this vision. The first of those vsphere platinum, our flagship vm ware vsphere product now has app defense built right in platinum will enable virtualization teams. Yeah, go ahead. Yeah, let's use it. Platinum will enable virtualization teams you to give an enormous contribution to the security profile of your enterprise. You could see whatever vm is for its purpose, its behavior until the system. That's what it's allowed to do. Dramatically reducing the attack surface without impact. On operations or performance, the capability is so powerful, so profound. We want you to be able to leverage it everywhere, and that's why we're building it directly into vsphere, vsphere platinum. I call it the burger and fries. You know, nobody leaves the restaurant without the fries who would possibly run a vm in the future without turning security on. That's how we want this to work going forward. Vsphere platinum and as powerful as microsegmentation has been as an idea. We're taking the next step with what we call adaptive microsegmentation. We are fusing Together app defense and vsphere with nsx to allow us to align the policies of the application through vsphere and the network. We can then lock down the network and the compute and enable this automation of the microsegment formation taken together adaptive microsegmentation. But again, we don't want to just tell you about it. We want to show you. Please welcome to the stage vj dante, who heads our machine learning team for app dispense. Vj a very good vj. Thanks for joining us. So, you know, I talked about this idea right, of being able to learn, lock and adapt. Uh, can you show it to us? Great. Yeah. Thank you. With vc a platinum, what we have done is we have put in everything you need to learn, lock and adapt, right with the infrastructure. The next time you bring up your wifi at line, you'll actually see a difference right in there. Let's go with that demo. There you go. And when you look at our defense there, what you see is that all your guests, virtual machines and all your host, hundreds of them and thousands of virtual machines enabling for that difference. It's in there. And what that does is immediately gets you visibility into the processes running on those virtual machines and the risk for the first time. Think about it for the first time. You're looking at the infrastructure through the lens of an application. Here, for example, the ecommerce application, you can see the components that make up that application, how they interact with each other, the specific process, a specific ip address on a specific board. That's what you get, but so we're learning the behavior. Yes. Yeah, that's very good. But how do you make sure you only learn good behavior? Exactly. How do we make sure that it's not bad? We actually verify me insured. It's all good. We ensured that everybody these reputation is verified. We ensured that the haven is verified. Let's go to svc host, for example. This process can exhibit hundreds of behaviors across numerous. Realize what we do here is we actually verify that failure saw us. It's actually a machine learning models that had been trained on millions of instances of good, bad at you said, and then automatically verify that for okay, so we said, you. We learned simply, learn now, lock. How does that work? Well, once you learned the application, locking it is as simple as clicking on that verify and protect button and then you can lock both the compute and network and it's done. So we've pushed those policies into nsx and microsegmentation has been established actually locked down the compute. What is the operating system is exactly. Let's first look at compute, protected the processes and the behaviors are locked down to exactly what is allowed for that application. And we have bacon policies and program your firewall. This is nsx being configured automatically for you, laurie, with one single click. Very good. So we said learn lock. Now, how does this adapt thing work? Well, a bad change is the only constant, but modern applications applications change on a continuous basis. What we do is actually pretty simple. We look at every change as it comes in determinant is good or bad. If it's good, we say allow it, update the policies. That's bad. We denied. Let's look at an example as asco dxc. It's exhibiting a behavior that they've not seen getting the learning period. Okay? So this machine has never behave this This hasn't been that way. But. way. But again, our machine learning models had seen thousands of instances of this process. They know this is normal. It talks on three 89 all the time. So what it's done to the few things, it's lowered the criticality of the alarm. Okay, so false positive. Exactly. The bane of security operations, false positives, and it has gone and updated. Jane does locks on compute and network to allow for that behavior. Applications continues to work on this project. Okay, so we can learn and adapt and action right through the compute and the network. What about the client? Well, we do with workplace one, intelligence protect and manage end user endpoint, but what's one intelligence? Nsx and actually work together to protect your entire data center infrastructure, but don't believe me. You can watch it for yourself tomorrow tom cornu keynote. You want to be there, at 1:00 PM, be there or be nowhere. I love you. Thank you veejay. Great job. Thank you so much. So the idea of intrinsic security and ensuring good, we believe fundamentally changing how security will be delivered in the enterprise in the future and changing the entire security industry. We've covered a lot today. I'm thrilled as I stand on stage to stand before this community that truly has been at the center of changing the world of technology over the last couple of decades. In it. We've talked about this idea of the super powers of technology and as they accelerate the huge demand for what you do, you know in the same way we together created this idea of the virtual infrastructure admin. You'll think about all the jobs that we are spawning in the discussion that we had today, the new skills, the new opportunities for each one of us in this room today, quantum program, machine learning engineer, iot and edge expert. We're on the cusp of so many new capabilities and we need you and your skills to do that. The skills that you possess, the abilities that you have to work across these silos of technology and enabled tomorrow. I'll tell you, I am now 38 years in the industry and I've never been more excited because together we have the opportunity to build on the things that collective we have done over the last four decades and truly have a positive global impact. These are hard problems, but I believe together we can successfully extend the lifespan of every human being. I believe together we can eradicate chronic diseases that have plagued mankind for centuries. I believe we can lift the remaining 10 percent of humanity out of extreme poverty. I believe that we can reschedule every worker in the age of the superpowers. I believe that we can give modern ever education to every child on the planet, even in the of slums. I believe that together we could reverse the impact of climate change. I believe that together we have the opportunity to make these a reality. I believe this possibility is only possible together with you. I asked you have a please have a wonderful vm world. Thanks for listening. Happy 20th birthday. Have a great topic.

>> Announcer: Live from the Computer History Museum, in Mountain View, California, it's the Cube. Covering DevNet Create 2018, brought to you by Cisco. >> Hey, welcome back everyone, this is the Cube's live coverage here in Mountain View, Califonia, for Cisco's DevNet Create. It's their cloud native developer ecosystem. A new initiative, only a year and a half old, great, cloud native dev ops oriented. I'm John Furrier, your cost with my co-host Lauren Cooney, our next guest is Damon Edwards, Chief Product Officer of Rundeck. Welcome to the Cube, good to see you again. >> Yeah good to see you again as well. >> So, you were just on stage giving a talk. >> I was. >> About ops, dev ops. >> I was bumming people out, that's what I was doing, so all of the Cisco early stuff was about new products, new toys, new awesome stuff, and then my talk was about how silos and tickets ruin everything. Right that, we've got all these great advances on the dev side of the house and delivery side of the house and the new technologies we've got, and everything's high flying and going to be perfect, until it all hits operations and things tend to go wrong. So I walked through a bunch of names we changed to hide the not-so-innocent, we went through some incidents and tales of woe and how the disconnects, and basically the siloed way of working, number one, group like with like in operations, very siloed. But also, number two, that we run our lives through these ticket-driven request queues. Right and request queues or queues in general, if you look on the product side, and then the physics of the queuing, the queuing theory behind it, queues are economically very expensive things. You know, they add a lot of delays, they create a lot of bottlenecks. I ask you to do something, I write it down, you take it off the queue, you know, a week later, the context is all different, right? So you have all kinds of bottlenecks, all kinds of quality problems, all kinds of delays, and it's an expensive way to work. Yet that has become the defacto way that we run our lives. And studies and tickets for what they're good at, which is handling problems, we use tickets as the general work permission system for the entire operations organization, and it's no surprise that silos and ticket-driven request queues, that we get what we get. And so the talk was about how to say, well how can we stop using tickets as the primary way of doing things? How do we look at the organization and remove the need for hand-offs between the silos, and then replace, where we can't get rid of the hand-offs, with self-service, right? Pull-based self-service interfaces where people can get what they need to get done, do those operational tasks themselves, and then move on >> Lauren: Great. >> That's what it's all about. >> Tell us a little bit about what your company does and how you're solving this problem, 'cause it's definitely a problem that's out there right now, and people aren't talking about it a whole lot because it's kind of the ugly underbelly of development ops. You know, they're trying to solve it, but they don't really want to talk about it. >> It's less sexy because you get a promotion for delivering the next big project, right? Saying you fix how operations work, it generally doesn't- you know the board of directors doesn't know your name. So that's kind of problem number one. But how Rundeck factors into this is that we make tools for SREs and systems administrators to, number one, organize all their scripts and tools, connect all their scripts and tools, the platforms they currently have across those silos, create standard operating procedures, and then, probably most importantly use the access control features to start to give access to people who are traditionally outside of the operational boundaries. Let developers participate in operations. Let QA participate in operations. Let business analysts participate in operations. All those requests they normally have of operations, create those services, let them do them. By doing that, you're creating more capacity in operations to focus on issues you really need to be solved, and you're making everyone else happy because you're staying out of their way. They can move faster, have fast feedback, higher quality, all of that stuff. >> You know we've done a lot of crowd chats and we had the questions come up, Is it the culture, or is it the tooling, or is it the people? Thinking all of the above, culture, everyone goes to the (mumbles), yeah the culture's going to be there. You guys are doing tooling. Can you talk about some of the things that you've seen that works. How does someone go, "Hey, first it's self-awareness, "we got to change this." If someone's into that mindset, I want to move to the new model, to be more agile, to actually streamline those silos and that ticket system. What tool do they need to use? What are you guys providing? Where is the steps? What's the sequence of tooling and adoption, and picks and shovels. >> Number one, use what you have, right? So this idea that, okay we're going to solve this problem, we're going to teach everybody to use this one tool, so everyone's going to learn this DSL or this language, it just never works. I mean, you know, three years ago it was one tool, we all know the name. Couple of years ago is was another tool, we all know the name, you know, these configuration management tools. Now we're on to the new container world, I don't know if we need that or not. Everyone wants to do what they need to do, so let them do what they need to do. It's a very lean idea. Focus on how to connect those things. Focus on how to orchestrate and organize what you've got already. And then from there, focus on, you know, how do we two things? Limit those hand-offs, so that kind of is more of an organizational issue. And number two, all those hand-off points, Anything I need something from you John, you know, or you Lauren, I don't want to have to say, "do this for me, and you do this for me." I'm going to wait and you've got five other things you're working on. You should create services that I can pull from. I need something from you, I need something you normally do. Hit an automated service, sort of like, don't do the old Savist managed service way of doing things. Do it the Amazon way, right, which is I can hit an API and get what I want when I want it. And most importantly, it's not just a one way button I can push. But I can actually create those buttons myself. So I can give the thing that I need to do, you can look at it and say, yeah that's going to work, give me back permission to go and run it. Everybody's happy, you guys get more of the scenario, get more capacity and I get what I want without having- >> So is microservices going to impact operations in a way? Cause then what you're getting at is more of a microservices, more of the primitives are going to be in the ops side. So there's a development mindset anyway. Is that standard dev ops now is ops? >> Well you need to handle the operational concerns as early in the life-cycle as possible. Meaning developers have to build from- it's kind of like in the car world, you build a car for manufactureability. You have to build the services for operability, and so that's number one. And with the new microservices decoupled world, you have to move to this model of operations because the old model that did work balances across these silos, it just doesn't work in this decoupled world. It makes everything kind of grind back to a lumpen mass of who-knows-what. So if you want to let the organization decouple, you have to be able to decouple your operations to match. >> So how long is it taking for customers to realize the value of your solutions that you bring to the table? And how much time is it saving them? >> Yeah, I mean, for Rundeck specifically, because it doesn't force you to learn new languages, you can start with what you've got today. So literally it takes days, right? Start plugging in things that you have. You can set up the access control. You can set up the options interface, and next thing you know, I've got this self-service interface and I can turn around and let somebody use it. So, you know, Rundeck doesn't do the culture and the organization change for you. This becomes a tool that greases that, makes it a lot easier to get that. >> What specifically in the tool that works for customers that's resonating in your tool? What's the big impact when people engage with you guys? When do they know when to bring you in for the tool? Let's just say that the gurus can... hey, here's the culture, you know, you do some yoga, whatever you got to do culture-wise, make that happen. You come in, what do you do? >> Sure, so for us, we're kind of more the bottom-up, right? It's usually a team that says, "hey we're getting overrun with these requests." Or it's a team that's saying, we've got to get like- it could be as simple as our restarts are a mess. There's too many ways to do things across all these tools. And then it's, hey, these people keep bugging us to do this. Or, that team keeps bugging us to refresh this environment. Or, this team, we need to give them access to something that goes wrong in production, to run some health checks and see what's happening. Really, those kind of operational, support-type use cases. It's generally at the team-level, be brought in to solve these different problems. And then where, really, the gas gets poured on, is when the upper management is following all the dev ops and SREs conversations and realize that things need to change, then they usually see Rundeck as, ooh, we can use that, right? That's going to help us unlock things, and let's do more of that, and it spreads from team to team. >> So you're really not trying to come in and boil the ocean over. You come in on a very specific entry point, and then get momentum and scales. >> Yeah, we get organizations that aren't touching their culture at all. It's literally just, we're doing things the old, classic, off-shore, application operations call center model, and we're just going to get better at that, and use Rundeck to create more capacity, standardize things, bring some more people into this process, and that's it. And they're very successful as that. And then, the really exciting ones is when the coder gets caught up into larger organizational transformation. >> You mentioned SRE, site reliability engineers. Google uses that term. So I've got to ask you, we talked before we came on camera about "no ops", having a no ops culture because dev ops is more developer. And we were kind of pooh-poohing that, and you were kind of more aggressive. I won't say what you said to me because it's a children's show here. >> Damon: Yes I'm sure a lot of children watch the Cube. (laughs) >> The ops guys, no pun intended. So, Google is really hardcore on this. Do you have an opinion on this? Ops, no ops, dev ops, the role of ops? >> I mean it's ridiculous, ops happens, right? I mean, ops everyday. John Alspot was a formerly dexy, and now he's kind of a researcher, does this thing at conferences where he says, "Everybody raise your hand, if I locked everybody out, "so hands off the keyboard, you can't do anything. "How many of your companies "would still be in business tomorrow? "Or in a week? Or in a month? Or in a year?" And people's hands kind of going... You know, a day and a week, you know? And the reality is operations happens, right? These are complex, moving systems, interacting with complex things in the world, and you have to be able to operate them. So, you know, the original no ops idea was, oh I don't want to have a separate thing called operations, I want to distribute operations where it makes sense, have engineers everywhere. Google has an interesting view, which is, no we have a distinct organization. But they call it SRE and they use more software engineering discipline to do. We have a whole methodology behind it. But they're very much proving you can still have a separate engineering and operations organization and do it right. And then there's folks like Netflix and Amazon who are more like, no no we're going to distribute it within these cross-functional teams and organizations. >> And they're still ops no matter how you slice them. But here's the thing, my observation... People get confused automation and operations. Just because you're automating something doesn't mean it goes away. >> Damon: Right. >> You might automate some tasks and things- >> Damon: Or it could make it worse. >> Yeah so talk about that pull-push, that tug between that. Because it's the tension that's positive, because you want to automate things that you're doing multiple repetitive tasks on. But that eliminates some tasks but you're still operating. Talk about that dynamic. >> Well, there's certain things computers are very good at. Repetitive, no-end tasks, computers are great at. But it takes human creativity, or sort of the super complex connecting-the-dots. Humans are good at that. So how do you automate as much of the things as possible that the computers are good at? And that gives you the time and the cognitive bandwidth to focus on the creative. That's creative in building things, creative in "oh crap, we've got to solve this". Right, and the tool should be there to support that. The idea that you can automate all of that away, it just is not- >> Give me an example, if you look four or five years and think about how we're moving fast with the evolution with the cloud and everything else happening. (mumbles) IOG, AO, all this great stuff's happening. You got blog chain, you got cryptocurrent, a lot of things going on. That is super positive, it also could be detrimental. Where does the human piece come in? Where will always be the pieces where human creativity, human intuition, human judgment... Where is it always going to shine? What specific things do you see never going away? >> It's what you said, the intuition and the judgment, right? In the day-to-day work activities, you need to use that intuition and judgment to get things done, to see the different signals, and understand what they mean, to create new solutions on how to solve these new challenges. You know, that is where the human beings are needed. So, it's both in the delivery time, and in the idea of operations. If you think of an airplane, there's still pilots. You think of a nuclear power plant, there's still operators. Tons of automation, tons of alarms, tons of things to assist them, but it still comes down to the things that human brains are good at. So there's always a role- >> So categorically, how you see security, latency is one, multi-cloud, workload movement, is the areas that you start to see the categorical areas that are never going to go away. >> Yeah, and at a certain point you're going to have things where the platforms get better, and you kind of climb the stack, and more things that only human beings can do in the past you can start to automate things. Like deployment, deployment used to be a human task, now we start to standardize things, have standard parts, have virtualization, now the cloud, now the cloud native technology. That allows you to... Okay, you've standardized things, you've build the right tooling, now you can focus the humans on more important problems, and move at a higher velocity and better quality. >> Lauren: Great. >> Great stuff. Okay, what's going on for you? What are you up to now these days? What events are you going to? What are you working on? what are the cool things you're excited about right now? >> What am I excited about? The dev ops enterprise summit, I've been involved with that for a number of years, that is the best collection of enterprise, big corporation thinking around the whole sphere of transformation. >> John: And it's growing too. >> Yeah, it's growing. There's one now in London, one now going to be in Las Vegas, you know, 1000 to 2000 people. SREcon. SRE is a... It's like a specialized implementation of all the dev ops thinking. I think that's another great place to be. And then devopsdays, Velocity, all the traditional conferences. >> Great community. You've got to say being involved in the dev ops from day one, watching the pioneers, a few with arrows in their back, but now have gone mainstream, super exciting. I think Cooper Netties brings that mainstream, just highlights everything. >> Yeah, that's that platform I was talking about. A lot of the concerns that human beings had to struggle with on a day-to-day basis are now being put into the orchestration and scheduling and the containerization of things. >> Damon, great work. Congratulations on all the work you've done. You've been a real contribution to the industry. >> Thank you. >> Good luck with the business. Thanks for coming on the Cube. >> Yeah, thanks for having me. >> Alright, this Cube live coverage here in Mountain View for Cisco's DEVNET Create. Really the Cisco's foray into cloud native. Really getting at that dev ops culture, solving big problems, programming the networks. Cisco's bringing that together with their communities. Of course, Cube's here covering it. More live coverage after this short break. (electronic music)

>> Voiceover: Live from Las Vegas it's theCUBE covering AWS re:Invent 2017. Presented by AWS, Intel, and our ecosystem of partners. (upbeat techno music) >> Okay, welcome back, everyone. Live here in Las Vegas where Amazon Web Services re:Invent 2017. Our fifth year covering. We missed the first year by one year, 2012. We couldn't make it. We were here 2013 and going forward. Or was it 2012? I don't know. I'm John Furrier with Lisa Martin. Our next guest is CUBE alumni number five in all time on CUBE visits. Famous venture capitalist partner at Greylock, Jerry Chen, former head of cloud at VMware, industry legend. Great to see you. >> Thanks for having me. >> That's quite the intro. >> Always an important guest. >> Oh, no. It's always an important stop at any conference. Like I said, if theCUBE's not there, it's not an event. How's that? >> Well, you're one of our most famous CUBE alumni. So, you're gonna get the credit card in the mail, with the Affinity program and all the benefits the alumni get. >> Thank you. >> John: Almost as good as Stanford. >> Almost as good. >> Okay, Jerry, thanks for coming on. I wanna just reminisce a little bit. 2013, your first time on theCUBE. It was small. We were on the other side over there. >> Jerry: Yeah. >> You were kind of mingling around looking for your first deal at Greylock. >> Jerry: Yeah. And you said, "I'm looking for the next Amazon." There was never a next Amazon, they just kept growing and growing. What a ride it's been. Jerry, your thoughts looking back now. >> Thank you. Well, thanks for having me. Like Moore's Law says, you double every 18 months in compute power. So, the Amazon or the cloud conference is the number of people are tripling every single year we've been here. The number of expos, the number of ecosystem partners has just been doubling, tripling. The number of services on Amazon's cloud has to be more than doubling every single year. So, Moore's Law is taken to the cloud in a different exponential way. >> And scale certainly is a dynamic. I was commenting on my post leading up to here, and my exclusive with Jassy, talking to him, trying to look at him and read the tea leaves. And it's clear to me, this is not him, my observation, the competitive strategy for Amazon is more services, speed, scale. They're raising the bar on the number of services that could be used, thus increasing their total addressable market. As more people use the cloud, more services are available. That's their plan. It's pretty clear. And the speed. Is that a competitive opportunity that blocks out other people? We talked before. You said, it's not a winner take all. It's winner take most. >> Jerry: Yeah. And Amazon's looking good. But you got Microsoft and Google. So, okay, I get that. >> Jerry: Don't forget Alibaba. >> Alibaba, they're number four worldwide. Number seven ... >> Jerry: Yep. Well, number one in China. But here's the deal. There's specialty clouds, there's new intelligent clouds that something Atella talks about. So it's an interesting dynamic, right. And Google, which almost has very little presence outside of North America is considered a new guard. A lot of developers love Google. >> Jerry: Yeah. So, you've got this kind of developer cult going on, that's very like a renaissance. Then you've got the IT. Almost sitting there like, not wondering what to do. Or do they? What's your thoughts? >> I don't know if IT's wondering what to do. So, you said a couple of things that are interesting. It's not a winner take all, or winner take most market. But, Amazon's launching all these new services. And so, what it is, when you have that scale the cost to serve another customer, the cost to lanch an additional service, is low. The marginal cost for yet another API on Amazon is low. So what Amazon has done so well is, there's a long tail of developer features and services that everybody wants. And they just keep adding them. There's only like 1000 developers that care about the service. The cost for Amazon to launch that is so low they can do that and have a positive ROI. So, if you're going to attack Amazon right now, you can't do the breadth of services. You've got to figure out a different vector of attacking. And so, you asked about Google. So Google is definitely taking the approach of two things. One, win developer love. Write a bunch of features around performance, storage, speed, they're doing really well. And number two, they're really doing a concentrated attack around some of their data and ML services. TensorFlow, and what not, that's getting a lot of attention. In contrast, you're going to see, I think, a lot of announcements tomorrow by Amazon or on ML and data services tomorrow. Because they're going to try and win the hearts and minds of the next generation of apps which could be around AI and data. >> And that's not low level parts of the stack. That's around the database layer. I mean, a new kind of middleware ... >> Correct. >> Is developing. >> I think you're seeing Amazon really attack the market in three different ways. One, the lowest level platform, infrastructure. Like storage, security, compute. >> John: Check. >> Check. You know, we see what they're doing there. Next is what I call the system of intelligence, right. It's how do you build AI or data. How to build a system of intelligence on top of that data. And that's where the battle is. The third area for Amazon is really these verticals, right. Their FedCloud, go after healthcare, go after financial services. So there's kind of a good market angle for these guys. So you'll see, I think, Andy and his team announce core infrastructure, system of intelligence tools around AI and data, and then a different good markets around healthcare, Government, financials, et cetera. >> It's interesting, you know, the developer attraction is interesting now. We were debating this on our opening, Lisa, where you know, IT controls the budgets and the enterprise. Certainly Government's the same way. And the old developer model is, join my developer program, here's a bunch of goodness, go build, go in the corner, we're going to tell you what to do, make it work, run the IT pipes, lay down some software applications and we're done. Ship it. QA, done. Now with cloud, the developers are driving the sentiment and now the freedom and the democratization of developers is interesting. So, does developers, this new cult I'm calling it, the new renaissance, are they going to drive the buying decision? It used to be the sales guy from Oracle or Olgar would come in and say, "Hey, I got a deal for you. I'll discount it by a zillion percent." Well, the developers don't want that. So you got this new force with the scale. So, it's interesting to see what we'll see from Amazon. >> Yeah. >> Again, I don't think this is going to be this year, but, this seems to be the trend that we've kind of talked about. Win the developers. Interesting. If you win the developers ... >> The dollars will follow. >> The dollars will follow or be the the new influencer ... >> Correct. >> To the decision maker of the deal. >> Yeah. >> And they've done that so well, I mean, one of the interesting things we're seeing now is advertising from AWS ... >> Jerry: Sure. >> Which we haven't really seen before. There were digital ads at the airport yesterday. They have done such a great job building awareness in the developer community. Really haven't had to advertise. You mention, also, Google getting Stickier binding to developers. The TensorFlow, Cooper Netties. >> Jerry: Correct. >> But, the advertising as a marker kind of speaks to me that are they trying to now go stronger to the enterprise and up the stack of the C Suite, the corporate boards. >> Jerry: Correct. To John's question, where is the buying power? Are you seeing a shift towards up the stack or are the developers now becoming stronger influencers in that case? >> It's never either or. I think its where you start and where you grow to. So I think Amazon did so well and Google's doing now is, you start with the developers because they're going to build the apps, you're going to make the decisions on what technology they use. But, you and I both know that's where you start but it's not how you finish. To get Sticky, you need security, operations, IT. So eventually the CIO or the CFO is going to write that seven figure, 10 figure, eight figure, nine figure deal to Amazon or to Google or to Agger because they're going to standardize on this cloud, this technology. If your business is running on Amazon, you're depending on Amazon. You know the CEO is going to make the decision, not just the developers. So, I think you start with the developer because they're going to make the right choices and you have to offer them the right set of tools and technologies, the right weapons. But ultimately, you build a house but someones going to pay for it and that's going to be the C Suite. >> Jerry, you've been involved in one of the best deals, seminal deals in the history of this new generation, Docker Containers. Container madness now turns into Cooper Nettie's madness. So you start to see at the top of the stack ... >> Jerry: Yeah. >> The application, the orchestration really tease that multi-cloud. So that's, although a lot of meat on the bone in my mind, but still certainly customers want choice. So what's your investment thesis these days as you see if it's a renaissance of developers, which we believe. And this ecosystem is going to grow, by the way, not just Amazon, you've got Microsoft, you've got Google, you've got Alibaba in China. So now, new gateways outside of North America. How do you invest in that and market? What's the strategy for Greylock? How are you guys looking at the market? Are there things that are new? Can you share some color around what goes on in the board meetings with all the investors? >> I would say there's probably two themes I'm thinking about right now to ride this wave around cloud. Both around the infrastructure layer and the app layer on top of it. So, I would say, whenever you see a new platform shift around mainframe client server, client sever cloud mobile, cloud mobile where we're at now. The first shift is always, take what I'm doing now and move it to cloud, right. And so I think that a lot of the tools you see now, database migration, how to transpose my data from one cloud to the next cloud. But what you see the second wave is, this cloud needed developers, right. These guys coming out of college, good men and women, that never racked a server. They're building cloud native databases, cloud native applications. And what you can do now, is you'll see another generation of applications being built, they'll look nothing like the generations behind, right. So the way you think about data, AI and apps will look very different. So there is a new sub-straight around data and applications in the cloud that we're looking at. >> An certainly, I know we've gotta go, we're going to have to bring you back, but, decentralization ... >> Jerry: Sure. >> You guys, Greylock, invested in CoinBase ... >> Jerry: Yes. >> You did very well, BitCoin is at 10,000. Crypto is hot. Token economics, potentially you looking good? >> I think you're going to have >> John: Look at the board. >> Yeah, I think that all things a hype cycle. You have a trial of disillusionment where the garner guys say, before you have any expectations. We will hit a crypto winter. But then it'll come back in some realization. There's a bunch of great technologies, great companies out there in the crypto space. CoinBase being one of them, we're lucky enough to be investors in. A bunch of other ICO's that are legitimate. But a bunch of stuff that's just noise. >> There's a lot of junk. You can see the ICO's are down now. So it looks like it's a little bit cold, the leaves are coming off the tree. >> I'd say in three or four years, I think BitCoin and some of these other assets will do well. Some of these other token services will do well. And a bunch won't exist. But they paved the way for, I think, a new paradigm. >> Well the new paradigm certainly will be CUBE Coin's (laughter) so look out for those, for all the CUBE alumni. >> Where do I sign up? >> No, you already get them. You're fifth on the all-time list. >> Now sixth. >> Jerry Chen is a CUBE alumni here inside the CUBE. Venture capitalist with Greylock. Tier one, big time investors in Silicon Valley. Great friend of the CUBE. Thanks for coming on sharing your commentary. I'm John Furrier with Lisa Martin, we'll be back with more coverage at re:Invent 2017 after this break. (digital music)

>> Narrator: Live from Las Vegas, it's The Cube, covering VMworld 2017. Brought to you by VMware, and its ecosystem partners. (upbeat music) >> Hello everyone, welcome back to The Cube's three day coverage of VM World 2017. This is day two. I'm John Furrier, your host, with Wikibon analysts Peter Burris and Stu Miniman. Peter, head of research, Wikibon.com, Stu Miniman, analyst. Guys, and cohost too on stage two, we have two sets. Day one and we've got two more days, Stu. 27 videos, a lot of content, keynote is up. Gelsinger's on stage with Mike O'Dell. Your thoughts? >> Yes, so, John, first of all, last year, you know, we've been doing this show for a lot of years. Last year, the energy was a little off, you know? We talked about on the intro, there's rumors about management change, everything like that? Energy's up. The attendance isn't up much, but, there's a lot of good discussions. People are digging into, kind of this whole, hybrid cloud, multi-cloud world. The keynote this morning, they've got, you know, folks from Google Cloud, up on stage. It's supposed to be the biggest announcement in the platform, in the last four years. I think we'll dig into that some. I'm not sure if it's the biggest announcement. >> Was there an applause? >> There was actually a bigger applause when Andy Jassy got on stage yesterday, than there was when they announced that, you know, VMware and Pivotal are now part of the Cloud Native Container Foundation, so, you know. CNCF, you know, three weeks, a few weeks ago, Amazon joined the CNCF, Microsoft part of the CNCF. Good step. Cubernetti's absolutely hugely important. VM and Pivotal, they'll want to ride that wave, participate in that wave, but, I'm not sure that they're, you know, that the leading edge of it, I like NSX's plugging into it, they're starting to figure out all of those internetworking pieces. But it's not the one I think, you know, we'll come a year from now and say oh, jeez, remember when they announced PKS, That's the thing that really changed the landscape. >> Yeah, I think the Google announcement was a little bit, seemed desperate to me, although very important, I said it's more of a long game on my tweet stream. But I think they try to force that a little bit. Certainly, I personally don't think it was a good move for them to do that at this stage and try to hype it up given the impact that Jassy had. And also Jassy's jab, a little bit, at some of these optical deals, we used to call them Barney deals, named after the cartoon. Barney, you know, they love each other, but no real deal there. Jassy, he's hinting that most of these cloud deals are optical, not a lot of meat behind it, unlike their deal. >> You know, I'm going to be the contrarian in this one, guys. I'm not going to say it's the most important infrastructure deal in the last four years. I think that's very true, Stu. But I will say this: our research when the AWS VMware deal was announced last October, was that it was an important deal, and it was going to have a material impact on the industry. Because it promised a way for a lot of VM customers to get to the cloud. And now we're seeing that happen. But we also observed that it became pretty clear, it was kind of obvious, that AWS had a lot to gain in that. And VMware was, I don't want to say desperate, but VMware was holding on and trying to remain relevant as we go through these transitions. I think a great thing about this conference is that VMware is demonstrating, is transforming. But think about this Google deal. Who gets the most out of this deal? >> John: VMware. >> VMware, but Google needs this really bad. Google really needs that enterprise presence. And VMware is in a great position relative to the Google deal. So VMware has not got a couple of companies that it can kind of-- >> You're shaking your head. >> Yeah, so here's the thing I'd say: while Google Cloud is standing up there, this is not VMware saying use Google Cloud. This is Pivotal and VMware saying we're fully integrated with Cooper Netties, which means that if I have Pivotal and VMware using PKS, it is now fully compatible with GKE. But that is very different from what we're seeing with Amazon. I talked to a VMware and Amazon joint customer this morning and he said I've got my data center. We've been using AWS for four years. And my data center guys are kind of slow. VMware and AWS allows them to be agile. They have the operating model. They have the tools. They like to use this. As opposed to Cooper Netties. That changes. You don't talk to a lot of people at VMware that are like, oh yeah, hey, I'm ready for microservices. I'm going to refactor all my applications. VMware, from day one, was like I'm going to take my applications, I want to, without changing a lot of code, move it in there. So, we've been talking for years on this show. You know, where are the developers? Are they here? Cooper Netties, all about the developers. I didn't hear a strong developer push in the announcement this morning. So, that's where I think it's still very different. >> It's a good conversation. I think Pete is right. Google does need this. But here's the nuance that's kind of in this game. It came from the VMware Cloud Native group. So Cloud Native certainly is strategy for VMware to play. VMware doesn't want to have just Amazon. They need to be multicloud. So-- They need to be multicloud, but I don't think that they should be playing the cards. This is a long game. The Cooper Nettiers that you know and I know, it's really difficult. People want to make it simple. There needs to be cross compatibility on, with application workloads. Very strategic, very important. Not a lot of meat on the bone. Okay, they're shipping commercial version of Google. Big deal. >> Most container implementations are running in a virtual machine. They just are. >> John: Yeah, true. >> This is an important deal for users. And that's the most important thing. >> Potential users that are going to be in the evolution of where this is going. To Stu's point, I think that where this connects is, the conversation here is: I'm just trying to get my act together on the on prim true private cloud. >> We're seeing the industry start to reform. So, again, Stu, you're right. It's not the most important thing in four years. But it's not also something to be-- >> It's a strategic enchant. It's very important. >> But it's also got near term implications. That for anyone who's doing container-based development, is running that whole thing inside of VM, and along comes VMware that says, hey you know what, we're going to bring industrial strength to this. It's a good thing. >> It's a good thing. Again, we all have a good conversation. This is a frothy conversation. I love it. Which means it's relevant to you guys out there. I think its timing is interesting. Again, I would have done a strategic play on this one. I would have done a strategic intent. The shipping stuff, okay cool. But you guys are on it. We will be monitoring it. Peter, I've got to ask you the question, and let's kick off Day Two. You guys have been beavering away for two days now here in analyst sessions, meeting all the executives, what's your observation? What's your take away so far? >> Well, the thing that we talked about, we did the wrap up yesterday, and now the analyst day came a couple of things. The first thing I'll say is that: when you pull back the covers of any new VMware initiative, increasingly you find NSX staring back at you. And it didn't used to be that way. So, increasingly, you're finding that NSX is becoming that kind of crown jewel. And that plays into this notion of VMware wanting to be the multicloud orchestrator using NSX as kind of a cross-multicloud technology. The second thing is that it's always interesting to observe how software technology, we talk about software technology in abstraction or independent of hardware. But the two always do move together. And we talked about yesterday about how vSAN has become such an important technology industry, Stu. And the observation we made, and isn't it interesting, that vSAN's importance grew just as people started doing flash-based storage arrays. And so those two things are becoming much more important in the aggregate universe here. And the third thing here is VMware is trying to do more around simplification through the cloud foundation, but they have to make sure it doesn't just look like a new marketecture, a new set of marketing. >> I want to throw some controversy out there. Stu, I heard some hallway conversations all last night, and the theme pretty much was this. I'm kind of paraphrasing multiple conversations. Love the direction, love vSAN, love all this NSX stuff. I do agree NSX is looking like the crown jewel. Clouding over the top. Orchestration is going to be the battleground for middleware. Great, I love that. But now, I'm an operations guy. I have VMware and I've got to go to the cloud in a big way. I've got to manage all this stuff. I have operational stacks merging together that have not been tested into multiple configurations with VMs, hardware stacks, software stacks, jamming together untested. This is a new pain point, and a slow point. We're slowing people down. Stu, do you agree? >> Yeah, really interesting point, because let's look at vSAN and NSX. vSAN, I can hand that to a virtualization admin, and they can get running pretty fast on that. Actually, I have one of the executives from VMware, he's like, we save money for customers really fast. NSX, a little bit more of a longer game. A little bit more complicated. Especially when you start getting into it. This whole interfabric between clouds, this is not an easy button for multicloud or anything like that. But NSX is really cool. John, we've been watching since day one. I mean, I remember when you and I interviewed Martín Cansado right after the acquisition. You know, huge acquisition, and as Pat Gelsinger said in the keynote yesterday, what vsphere was in the last 20 years, NSX will be for the next decade or more. So, absolutely, we kind of understand where the battlegrounds are. The devil's always in the details. >> Is it stable, Stu. Is this stuff stable? >> No, none of it is stable. But we're in the midst of a significant transformation, so we shouldn't expect stability. >> You're implying the outcome for the customers is significantly there to make the investment? >> Stu's right. This isn't plug and play world. There's a lot of work going on and what users are looking for now is who in the technology companies are going to make and sustain the investments to drive simplification. And VMware is in the mix. One of the other things we said last night, John, is that, if you look back, there have been very few technology companies that have successfully made a major transformation. IBM did it in the early 1990s. Microsoft has done it a couple of times. We may be witnessing VMware making a pretty significant transformation here. >> This show's not a dud, that's for sure, no doubt. VMworld and reinvent will probably become the two most important shows in cloud, hands down. Obviously besides from the international stuff-- >> Peter: That's important. >> You know, Microsoft, I'm seeing not a lot of clarity around Microsoft. Google, they're trying to get that cloud event going. Again, it's a great cloud wars going on, guys. So this is going to be crazy. >> Peter: It's starting to take shape. >> Well, you mentioned simplicity. Michael Dell's coming on. One of things I'm going to ask him, and I'd love to get your thoughts on what we should ask him. I'm going to ask him how do you make this shit simple? That ultimately, in the era of all this stuff jamming together, stacks, hardware stacks, software stacks, seamless operational capability, new developers coming on board, edge of the network. >> One of the things, a critique I have for Dell the company, is they want to give you choice. You're going to talk to Michael, and he's going to say Azure Stack, I've got that solution. AWS, VMware's got that solution. We've got the VMware solutions. We've got virtu-stream over here and everything. Customers want opinionated offerings to help them through that. Because, oh my gosh, I figured out the virtualization stuff, and I'm figuring out some of the networking security fees, I've got containers and there's other stuff coming from the future, and oh my God, security is beating me over the head nonstop. And now you want to be a major player in that? Yeah, how can they help customers get in the right swim lanes, help customers get comfortable in the deep end? >> Peter just talked about what I think is kind of key, he just mentioned plug and play. I'll just go a step further. This general purpose computing market is over. Nothing is general purpose anymore. Those things that you need to bolt on, but you have a unique requirement by corporations and enterprises-- >> I'll push on that a second, and I'll give you the question I would ask. If we look at the big picture, the big picture goes like this, the first fifty years of the computing industry were dominated by an OLTP-oriented model of how you use computers. Highly imperative programming. The tool sets were set up that way. Single database manager. You serialize everything from the database manager. That is the model that drove the first 50 years. We're in the middle of something totally different right now. We really don't know what it is. We conceived the peace parts with the coming together. It's going to be more hunks of programming, more declarative, distributed data, we're not going to serialize the same way. We can see what it's going to look like. But it's unclear exactly what shape it's going to take. The question I would ask, and I think it kind of builds on what you said, is what is Dell's commitment to the cloud's experience on 2022? We know what the cloud experience is today. The cloud experience today is defined by Amazon. They've done an absolutely magnificent job. Nobody thought they could do it except for Amazon. And they did it. And they did an absolutely magnificent job of it. But what's the cloud experience of 2022? We say it's going to be true private cloud, hybrid cloud, and a set of methods and a computing model that starts with data and finishes with outcome. What is Michael Dell say it's going to be? >> I was just going to say, Peter, that is The Question you talk about. When we think about the mega-merger of Dell, EMZ, and Vmware, at the end of the day, Michael wants to pull through more servers. But it's that operating model that's going to drive things. So, will VMware really be able to fix their management stack. Peter, when I became an analyst seven years ago, I was like, well anytime I can say back security and management are broken and they still suck, right? And so the question is, five years from now, will we, you know, be able to day hey, VMware is really doing some awesome things, Pivotal is really bringing this together, Dell technology's really front and center to help that experience. >> I was going to ask him who he's voting for, Mayweather or McGregor, in the fight night. >> Mike Tyson, right? >> Put you over to Mike Tyson. All right, serious question to end this. Peter, I know this is something near and dear to your heart, and Stu, at Wikibon, you guys are really, there's a lot of end user conversations, how should end users start preparing themselves. Because Pat Gelsinger's still laying out the narrative of today is the last day, the shortest time, whatever his quote was, it's going to get faster. And to your point of all this work that needs to get done on the investment, the customer environment is going to get crazier and harrier and more complex. What are end user enterprise customers having to do? >> So if I'm a CIO I'm doing three things. The first thing I'm doing is I'm introducing the core principles that are related to Agile. So I'm telling my people, culturally, we're going to me empirical, we're going to use data to make decisions, we're going to be iterative, we're going to cycle, and we're going to be really opportunistic. We're going to be very willing to break down sacred cows. That's the first thing I'm doing. The second things I'm doing is I'm starting to introduce a set of etics that say if we can put it in the public cloud, we will put in in the public cloud. But we have to use iterative, empirical, and opportunistic to recognize that we won't always be able to put it in the public cloud. And we have to be prepared to be able to do stuff on-premise, because we are going to be doing things on-premise. The third thing that I'm going to do, and I think this is really important, is that IT, for the last n number of years, has been focused on taking costs out of the business. David Floyer talks about this a lot, the idea of automation. Well, increasingly IT is going to be asked to find ways to add revenue to the business. That's kind of where a lot of his digital engagement goes. What that boils down to, ultimately, is that the history of working, collaborating, has been based on taking costs out driven by procurement, and this notion of strategic relationships has been kind of a fraud, has been kind of something we just say. So the third thing is: you're going to have to start focusing on what it really means to be strategic. Vendor management, to truly partner, to transfer and control intellectual property boundaries and how that happens. So those are the three things I think CIOs absolutely must start doing. >> And that is what Andy Jassy's been hinting around is optical illusions, is whether its vendor. Where's the partnerships? Where's the coding? Great observation, Peter, I've got to say that was phenomenal. I would agree. I mean, this is ultimately coming to a new era with computing with AI, IOT Edge. I think Pat Gelsinger laid out the wave slide beautifully yesterday. >> We're throwing the computing industry up in the air right now and seeing where it's going to land. It's time to start shaping that into the new model of how we're going to think through problems and how we're going to solve problems with technology. >> And we had the CIO perspective yesterday with Bask Iyer, who's the CIO of VMware. He said, John, look it, some things in IT are recognizable. There are certain patterns. We know when retail has spiked. So, yeah, I'll do bursting of the cloud, but most things can be patternized, and that's okay. Some things will always be unrecognizable. But it's not always that dynamic. Once you get that nailed down, that's where the true private cloud report comes in. Congratulations, by the way, on the true private cloud report from Wikibon. It's going viral here on the show. >> Some great work from Stu and David Floyer for many years. >> Great work. It's going viral. Talk of the town here in Vegas. Congratulations, Stu. >> Well, thank you. It's something, we've been having this conversation in this community specifically at VMworld for years. Because it was that air gap between I virtualized and that helped utilization to I really need to get to that operating model of the cloud. I interviewed a consultant from Australia last year on the other set. And he said a lot of the companies he still talks to is IT is still a call center. And we've been talking for years about moving from just being a call center to really partnering with a business. Or, you know, Jeremy Burton, who I interview recently, he's like no It's driving the business. And it's great that there are some companies that fully transformed and they are engaging in that or at least they tell a good story. But there's a lot of customers that are still working on their own journey. And that's what shows like this are all about. >> So really quick John. So the way I describe that is when you think about cost benefit, when you think about productivity, it's how much work am I going to get done for how much cost? The cost is the denominator. What we like to say is that IT has to start taking on a numerator mentality. What benefits am I going to create? What opportunities am I going to create? What revenue am I going to help create? Got to think on the numerator side of the equation. >> You guys are doing some great work. You know, a lot of analysts are always pumping in reports: Oh, you got to see this. And then pushing out to the analyst relationship. If you're in this business, whether you're a CXO, an advisor, or you work for a company and you don't read that true private cloud report, you possibly could be fired. It's really game-changing. It's like the software reading the world memo. This is the marketplace that's hot right now. True Private Cloud Report by Wikibon. Check it out. The Cube Day Two Coverage continues. We'll be right back with more after this short break.

>> Announcer: Live from Boston, Massachusetts, it's The Cube covering Red Hat Summit 2017. Brought to you by Red hat. >> I'm joined by my co-host, Stu Miniman. Stu, this is day one of the conference: 20 keynotes, six general sessions, people from 70 countries gathered here in Boston, Massachusetts. You are a Red Hat Summit veteran. Thoughts, impressions of the first day. What has struck you really? >> So first of all, it's like Red Hat itself. The company just keeps growing. It's just one of those, you know, strong progress. We talked a little bit over the intro this morning with Dave Vellante as, what is it, 60 quarters consecutively that the company has had revenue growth. It's like, I've worked for a lot of tech companies. It's like, I remember when I worked for (mumbles) when they were doing it (mumbles). They have a miss and the stock kind of drops. IBM, you know, has had quarter and quarter and things like this, but with all of these waves and look, Red Hat's not the biggest company out there, but they are an important player in many changes in the ecosystem. This is one of my favorite developer shows that we cover at the show. Of course, Open Source, we used to say, okay, software's leaving the world and Open Source is eating software. Red Hat's right in the middle of this. I think most people agree. There is really only one way to Red Hat. There's not going to be a Red Hat of something else. There's no one else to really capture that. They got involved at a certain point in time where they could have that model, but they've extended it. They understand what they're doing. They're getting involved in a lot of interesting technologies and there's a lot of people, like most conferences that we go to, there's a lot of passionate people that are really interested, very tech savvy group here, going into all of these breakouts. Many came yesterday for some things. They're coming for a whole week to just dig in, do demos. Down on the show floor, they've got little coating challenges and VR things. I mean there's just a lot of pieces of the show and we only get to see a part of it, but I've enjoyed the customers, the executives, and only one day of three that we're covering so far. >> It is early days in the summit, but where would you say that we are in terms of the maturity of the cloud? We heard from Jim Whitehurst, the CEO, he's going to be on the program tomorrow. He talked about how cloud strategy really is the #1 thing on customers' mind. The cloud is not new and we are really evolving and is maturing, where are we? >> Right, a couple of stats from the keynote this morning. It was 84% of customers have a cloud strategy. Now those of us in the analyst world, we might say, "Well, let's see whether they really have a strategy "they understand," and 59% have a multi-cloud environment which doesn't surprise us. Most people, the joke we used to have was, you had two types of customers, those that were using Amazon and those that didn't realize that some group was using Amazon, reminds me of a comment I made earlier, about like Linux itself. There was always, 15 years ago, big companies would be like, "oh, no, we're a Unix shop," or "we're looking at windows." No, no, no, there's the guy in the corner. He's been using Linux for awhile and that's been a big driver, so cloud absolutely is maturing. I loved, it was an interesting discussion we had with Paul Cormier towards the end of the day. We were seeing Ramgji from Google talking about how we've got the infrastructure and we've got the applications. And I'm an infrastructure guy, but I knew from day one, the reason you build infrastructures is because of your application. If I can just buy SaaS, I don't care about the infrastructure underneath it. The SaaS provider sure does. We talked a lot to SaaS providers as to how they're building their solution. If I'm using infrastructure as a service, you know, there's some I need to understand the infrastructure and there's plenty of infrastructure here, everything from, there's the storage and networking teams, Open Source is permeating every corner of the environment, so it's maturing, but in many ways it's gotten more complex. Cloud was supposed to, many of us thought, simplify the environment, but boy, it seems that many of the things that we had in previous ways as it gets more mature, gets a little bit more complex. Red Hat tries to take those pieces together, build them into solutions. We've talked about there's Red Hat Linux. Enterprise Linux is the platform that can live in many environments. Open Shift is something that allows to encapsulate all of those services, things like containers, we're working with our cloud data applications, and how I want to build them, Open Shift's going to help and you know Cooper Netties goes into the mix so Red Hat is places strategic bets, and, you know, has a strong position in the number place and has big partners. It's really interesting to see. We've had a couple on already, and we'll have many on through the week from key providers in the infrastructure and cloud players out there. >> I think the theme of this year's conference is the power of the individual, and it really is. I mean, we heard from Sam Ramji who said, "This is the age of the developer." Developers have more respect, more veneration, than ever before and yet we also heard from Sandra Rivera, it is also harder than it has ever been before to be a developer because there is just so much data and it's hard to know the difference between the good data and the bad data and where you find the right insights to make decisions that drive the business on that data and if you're a developer, you might not have the business savvy to do that, so it's a real balance here that the companies and developers themselves are trying to strike. Are they doing a good job? I mean, is it still too early? >> It's funny. When you say that it makes me think of in the machine-learning space, it's how do we get the data to train the machine to understand what is good or not, and you know, I wish they'd done that for us when we all went to college because in my job, it's always like, okay, what data can we trust? Well, if you remember from Princess Bride, it was like, with Versini, it was like, well, I know a vendor told me information, so therefore, I know I can't trust that data, but if I take someone else's data, you know, it gets very confusing as it, what I'm saying, is any single piece of data a lot of times you know you can throw that out because maybe it's good, maybe it's not, but how do I get, understand the trends, understand what's going on. I love talking to practitioners here that when they're talking about their business and the impact it's had. We had one of the customers on today was like, "Look, I deployed this, and I have like $6 million "worth of savings in my business year every year. I mean, that's hard information, hard to argue with it. Now are there other solutions that might do that? Sure, but yeah, it's challenging to understand what's good data, what's not good data. As an industry, you know, whether that's the kind of the people or the machines themselves. >> I think the other question that we're all grappling with here is that, and you talked about this earlier, just talking about the evolution of Red Hat that you've seen in coming to this summit all these years. This is a company founded in 1993. Today it has a market cap of $15 billion, 2.4 billion in revenue, nearly 8,000 employees. Can a big company, and it's a big company now, can it innovate, can it truly innovate and we heard in the keynote one of the things that Jim Whitehurst was trying to do was to cultivate a startup mindset. Is that possible? >> Yeah, it's a great question, and I know, Rebecca, you and I've been talking about this throughout the week so far as to big companies have challenges because there are the structure and the organization and what drives the business. What's interesting about Red Hat, of course, is that sure they have products, but underneath it, it's all Open Source, so community is in their DNA. As Paul Cormier said, he's like "We couldn't "buy a company and do it closed-source again." They did that a couple years ago, it didn't go well. They were going to transition it, but it's been a case study that's been written up. (talking over each other) >> Me and Jim in the room alone, yes. >> Absolutely, so what's interesting is Red Hat is more like a community in many ways. As Jim Whitehurst spoke, is the open organizations so they act more like an Open Source community than they do a company, of course, that being said, they're profitable, they have employees, they have benefits, they have locations all around the world so it's been interesting to see how Red Hat adopts certain technologies, contributes to them. You know, it would be interesting to see who else Jim Whitehurst tomorrow and say okay, you know, what is a product that was developed by Red Hat versus a project that was taken in by Red Hat, something I've seen over the last three or four years, a lot of acquisitions they made, it was, let's take Open Stack for example. There is a big survey that's done twice a year that said what are people using and what are they interested in with Open Stack, and it felt like that was the buying guide for Red Hat because it was like, "Oh, okay, here's the sent-to-us stuff, "that was pretty interesting. "Well, we can't buy Konica, we'll buy Sento West," and that comes under the umbrella. "Oh, there's this storage management piece "that actually is open source that people "are using for Open Stack, well let me buy that one, too." So Red Hat has become inquisitive, but it's to get deeper engagement in the community. They are all Open Source so always there is that balance in big companies of what do I do with R & D and what do I do with M & A? And Red Hat has done both. I think they've done a good job of moving the industry forward. Innovation is a lot of times a buzz word, but they do some good stuff. They contribute a lot. People here are very positive about what's going on. Just because they haven't created the next flying car or things like that. >> But they're on that. We heard here that they're thinking about it. I mean, I think that's also, I didn't mean to ask the question insinuating that they're not innovating, but I do think that particularly at a time where we are seeing Microsoft years of no growth, Intel, stalled growth, you know, what is Red Hat's secret sauce, and also what is going to the breaking point for these other lagging enterprise companies? When will we see some new ideas and fresh perspective? >> Yeah, it's interesting 'cause we write this whole, the shift of what's happening with cloud, the wave of the machine-learning, the augmented intelligence or artificial intelligence, how much is that going to ding the traditional companies, especially the infrastructure companies. Red Hat touches it, but they're much broader. Their growth, they're an Open Source company. It's interesting. I've seen a lot of other companies, the Open Sourced-based ones, "Oh, we're not "an Open Source company. "We're an enterprise software company," or "software company." I'm sure we asked Red Hat if they were a software company, they will say well, of course, like everything we deliver is software, but at their DNA, they are Open Source, and that kind of sets them apart from the pack even though there are other examples Dave Vellante went through this morning of other companies that are heavily involved in Open Source, struggling with that how do we monetize Open Source. >> Well, is it a problem with the business model? Why is it so challenging? >> It's a great question. The first time I interviewed Jim Whitehurst, it's like "Jim, why aren't there more billion dollar Open Source companies," and his answer was, you know, Not being flippy," he's like, "Look, selling free is hard." >> Yeah, that's a great point, but I think that we should, we need to dig a little deeper and hopefully we can get to the bottom of that by day three. >> Absolutely, and I tell ya, I'm sitting here listening to, you know, we'll be doing the Cloud Foundry Summit in June there, which is pivotal as making a lot of money with that, but most of the other companies not doing so much. We were just a Docker Con. A couple weeks ago, Docker Company seems to be growing, doing well. They just changed their CEO today so hot news out on SiliconANGLE.com. Ben Golub, the CEO, I just interviewed him a couple weeks ago and now he's moving the board, but they're bringing the Chairman of the Board to be CEO, so we look at all these companies: Cloudera just IPO'd. Hortonworks is a public company. These companies that have Open Core or Open Source as a major piece of what they're doing, none have had the just measured growth and success that Red Hat does, so you know, Red Hat has a case study. It still seems to be one that stands alone category by themselves, but you know, partnering and growing and doing great, and it's exciting to cover. >> Day two, anything you're particularly excited about? >> Yeah, so I got a taste of the AWS-enhanced partnership talking about how Open Shift is going to have deeper integration and we talked a little bit with Paul Cormier so I suspect Jim Whitehurst will be talking to him about it. We have one of the main guys involved in that from Red Hat side will be on our program tomorrow. So the keynote tomorrow, I'll be watching here. Maybe there'll be a special guest during the keynote talk about that announcement some, but you know, obviously a space we watch real closely. We had Optum, one of the customers on today, he said, "I use Open Shift and I'm using Amazon and want to do it most and this is a game-changer for me," so we think this is really interest to watch, really, you talked about maturity early in this segment here, the maturity of hybrid cloud. If Amazon starts to get deeper into the data centers, partnering with companies like Red Hat and like VMware, that will help them to stave off some of the competition that's coming at them. (mumbles) to Microsoft and Google who's getting Cooper Netties everywhere. Lots more to dig in with. There's some announcements today but a lot more to come and you know, more customers, more partners, more Red Hatters. >> That's great, great. Well, we are looking forward to being back here tomorrow bright and early. Thank you for joining us. I'm Rebecca Knight for Stu Miniman. We'll see you back here tomorrow. (innovative tones)

>> Announcer: Live from Boston, Massachusetts it's the Cube, covering Red Hat Summit 2017. Brought to you by Red Hat. >> Welcome back to Boston, everybody. This is Red Hat Summit and this is the Cube, the leader in live tech coverage. I'm Dave Vellante, with my co-host, Stu Miniman and Matt Hicks is here. Is the Vice President of the software engineering for OpenShift and management, at Red Hat. Matt, welcome to the Cube. >> Thank you very much, good to be here. >> So this is where all the action is, is management and management of Clouds and inter Clouds and intra clouds, and it's the sort of next big battleground and you guys seem to be, doin really well there. Have a lot of momentum. >> It's been a good year. I think it's going to be a great year going forward, cause it, it adds a lot of customer value you know, they're seeing the drive to get applications across all these environments, and I think we've hit a good balance of what we can provide in OpenShift, or middle work portfolio management and you hear a lot of customers talking about it all through summits. >> Well we saw some pretty sick demos this morning. I got to ask ya, it was basically the reference model, was okay, got some web logic, and web sphere apps. You know, wink, wink. And you want to modernize them, and so you guys just showed like a five click modernization process. Is it really that simple? Are people really, really doing that? >> Yeah. We have customers that have moved thousands of applications like that, and they're all different sorts of applications. But going from, a proprietary EE stack to getting on something closer to EAP. To deploying it on OpenShift, that is our bread and butter. And it's great because EAP can take advantage of OpenShift, lets customers re-platform the apps that they have. And like we said on Key Net, it sort of frees up your time then to start building the fun stuff. Building the next apps, and you know we've had a ton of success with that. >> Matt so we had the opportunity to talk to some of the innovation award winners. What we haven't actually gotten to cover too much yet, is all the news. So there were a number of announcements in your space, wonder if you could help us, kind of unpack for our audience. >> Sure thing. So we, You will hear a lot about the, just the enterprise production adoption, of the new technologies. Because one of the things for us, it's easy to come up and talk about new technologies. We like actually bringing customers up that have taken that new technology to production. So that's one of the big themes you'll see here at Summit. We launched OpenShift IO. Which for us actually had great success of OpenShift as Hybrid Net platform, Prod. But as you heard from United Health Group, Optum this morning. They have 10,000 plus developers to roll that out to. And we knew we needed to close the gap on how to get empowered developers. So OpenShift IO was the new Cloud based services for that. We will also announce and talk about our container health index. So when you start really making the bed on containers, how do you know what's inside of em, how do you get a simple grading system to understand like A through F. How well maintained is this. As well as being able to look under the covers and understand what goes into that A or what goes into that F. >> And maybe explain that a little bit more, because I think about like, you know, okay, I remember like in the virtualization world, I understood that. So many of containers live a lot shorter life, so, is there, is this just a dashboard that rolls that up, because I want to know probably the general health of what's going on, because there's no way humans going to be able to keep track of it. And I mean, we're not all Google with two billion containers, being brought up and killed every week. But it tends to be, at least from what I've seen, tell me if you see otherwise, that most containers are still much shorter lived than OS's. Or you know, VM4B4. >> You know I think that's, it's one of the advantages. Is that they can be pretty volatile, like that effect. You know, we have capabilities, like in OpenShift, like Image Streams driven to say, "How do you respond and incorporate this?" At the end of the day, if you can grab a container that in our world has an A rating, no security vulnerabilities today, and in a week, you could have multiple critical CVE's, that have been open that now affect that container. And so the benefit of containers is, you can re-roll em, and you can consume that update, but if you don't know about it, and you stay on that old version, you carry the same risk as if you had an out of date OS, that was very static. >> Yeah, I think that answers back to, you know, Ben Gustav, that golden image. And they would pardon that, and they'd leave it that way for two to five years. Right. And we all laughed because my friends in the security space is like, that's the biggest problem we have, is you're not ready for that. So this is, understanding what you've got out there, being able to address that, remediate, you know, push out changes, or know like hey, if you haven't, this is what you're at risk of. >> Absolutely. And that creates for us, it creates this foundation of, both trust between our customers and Red Hat, with their consuming. But then also between Red Hat and our ISV's. Because most of out ISV's, they're not in the Linux business or they're building specialized middle work capabilities on our products. So it's equally important for them to understand that if they're on an out of date version of RHEL, and they've embedded that into their container, that can cause as many problems, and they need to apply the updates in their stack as our customers. >> But that kind of gets to the business model a little bit. And you're engineering, but so I have an engineering question. But, I think most people in our audience understands that you know, Red Hat is a company built on, open source. And you know people say, "Why buy the cows, the milk is free." Well you've perfected that model, you know, 2.4 billion dollars in revenue. Three billion dollars in bookings. So you're obviously doing something right, although, not many have been able to, actually nobody's been able to create a business model like this. My question is from an engineering stand point. When, you're built on open source, and you're not, driven toward a proprietary mindset of okay, let's lock them in to the next REV. How does that change, sort of the engineering mindset, the culture and the protocol going forward. >> I love it. I have been in Red Hat 11 plus years, and everyday you're not tied into, dropping a new feature and pushing customers to that new version for revenue. And so it changes our mindset of, how do we provide value across the entire range of supported offerings that we have. In the case of RHEL, you could stay on some versions of RHEL for quite a while, and we provide value there in keeping that thing working. But at the same point, we're constantly moving this along, adding new innovation. We're able to provide value there. And it, as an engineer, it is refreshing. Sorry. >> I'll chat for a minute. So you, you know, a lot of companies that are 20 plus years old, are criticized. Oh, they don't, innovate. You hear that all the time. They do incremental R and D. And it's true. They may spend a lot on R and D, but R and D is like a feature here, or another feature there. Design, to just keep putting the crumbs out. And what you're saying is, incremental is not, really fundamental part of your plan. >> Absolutely. We can, you know, we want to provide the same value for our customer if they're on RHEL six, or they're looking towards the next major version of RHEL. And they can move anywhere on that life cycle, and that's what they get as part of their subscription. Same thing with OpenShift. And that choice of customers, of being able to take a product, consume anywhere on the life cycle of it, it's good for customers and it's nice for us, because they're just different ways that you innovate. Of driving like, the next new great feature. Then you have other customers, that you are going to provide value through stability. >> So, when you, we go to a lot of these events, as you can imagine. And when you talk to the traditional, you know, software players, you get this massive dose, of well we do that too. We do containers, and, you know, we do Cloud, and we do Hybrid, and. So help us understand, the difference between how they do it and how you do Cloud. >> I think for us, if we picked containers, you know, I was talking to a group of customers this morning of every upstream technology we pick, that we're going to pull together into our products, We don't just pick em up and re-package em and give em to a customer, because we're a support business. So if it breaks at 3 a.m and I have to re-roll a kernel to be able to fix it, I have to understand every piece in the stack. So we start with, we're going to drive a contributor position in the technologies. We pick our bets and we go all in on those areas. So Cooper Netties will carry you know with Google as you know a great technical partner, we run the majority of the SIGs with them. We have a top contributor position, and that we invest really heavily in understanding that technology inside and out. And I think that's what shows in the customer value of we could certainly take stuff, repackage it and ship it. It doesn't carry the same value as being able to work with a customer, drive new features into the product and keep them running in PROD. >> Matt so you mentioned Cooper Netties. And I was actually a little surprised this morning in the key note, I didn't hear Cooper Netties. And I think the reason was, because I heard a lot about OpenShift, and that's just your mechanism for rolling that out there. I'm assuming your customers kind of understand that maybe you could help, you know, explain that a little bit more. >> Absolutely. And so, OpenShift is our enterprise, distribution Cooper Netties is, and that's sort of the business we're in. We have Linux and RHEL is our enterprise distribution of that. We now have Cooper Netties, this really popular community. OpenShift is our distribution of that, and for our customers. >> I was just saying, I guess you couldn't call it RECK. Which, Red Hat Enterprise, Cooper Nettie, probably wouldn't be a good idea. >> The world changes too fast. You pick names a long time ago. But it's a nice motto, because we know it. It's what we've done for a long time, and it builds on everything we've done with RHEL and it connects our middleware portfolio as well. So I've been on the op side, and I've been on the development side, and I love seeing us address stuff right in the gap there for customers. And I think that's why we're seeing so much customer traction. It's a sweet spot for where they've had pain, and it adds a lot of value for em. >> Could you speak a little bit of your customers. Where are they with containers, Cooper Netties, that whole adoption. >> A lot of them in production. Which is nice. It's nice from a support business, because if you have excitement, or if you have early traction, we're a subscription business, so we want to make sure you know, the more customers use it, the more you know, they're going to grow and actually utilize it. And when you hear customers like UHG saying, the 4000 projects built on OpenShift there. Those are, they have built up significant deployments on that, and Barkways, and I know we have a whole list of em that are here today. And so I like that fact of, it's not just a cool technology. Customers have taken all the way into production. And they're being really successful with it. which as an engineer you love. You want to see people using your products and solving problems with them. >> Absolutely. Matt you talked about the ethos of commitment and committers, to open source projects. One of the challenges for a company like yours, is you got to support a lot of different projects. So though, you saying, you make your bets. We've talked a lot about okay, will there ever be another Red Hat that emerges in the big data space. You see Cloud air, and Hortonworks, and they're always sort of lookin at those guys, as possibility. But they always sight the challenge of having to support so many projects. How do you manage that and did you, you've been with Red Hat for a while, did you hit a tipping point, at some point? Cause I mean certainly you have software margin, 80, 90% you know margins. You got a great operating you know margins. So you've crossed that chasm so to speak to pick a bromide, but, others have had such a challenge. Is it because they have to support those projects and it just takes a long time? And you guys baked over 20 years. I wonder if you can give us some insight there. >> You know, I think it's as much art as it is science, I would love to say. Like this is a you know, cold formula that we apply but, we have a good gut feeling for, if you're going to back a technology, or an upstream project, you want to make sure that it's going to expand beyond your own investment, and we've certainly made a lot of wrong bets that the technology doesn't evolve. But you've got to be able to change, and when we see some of the early indicators like in Cooper Netties. Those are the ones where, we like how it's governed, we like how it's structured, we like the other players that are in there, and that's just been one of the unique aspect of Red Hat, is we pick pretty well. >> So Matt, I'm wondering if you're willing to comment, we were at Dockercon a couple of weeks ago, they've done a shift to, how they're managing kind of, but the Moby project to do the open source stuff, what's your take on that? What's Red Hat's positioning there? It's been an interesting dynamic between Docker and Red Hat to watch the last couple of years. >> Yeah you know, I think Moby for us, it's one of, it's about 16 hundred different upstream projects that we pull in across our portfolios. And so, we're certainly watching it, and we're seeing them evolve. We've been involved for the technology for a while now, but we don't necessarily know where that's going to go right now. But we certainly look a it like we do, you know the whole, breath of open source projects we pull in. >> What else is on your horizon? What's exciting you these days? >> You know, I think just seeing the reality of Hybrid Cloud becoming, it's becoming real for our customers. Where they're able, you know, you probably saw some of the Amazon announcements today where, you're able to take services, that might be in the public Cloud and now pull them on Premise. You heard customers talk about taking OpenShift and running that all the way out to the public Cloud. And we love that aspect, because you know, being able to use infrastructure to power applications, I think it's going to change IT and, then all the pieces that emanate around that, it's exciting for ISV's, it's exciting you know, around our management products from Ansible to Cloud forms. It's just a lot that we can do there. >> On the management products, you know, what Dave said, one of the Bromides out there, when I became an analyst seven years ago, it's like we can say, well it's security and management are the biggest problems we have. I feel like I can go to that well anytime I need to do. How are we doing in industry and management. Obviously you've got your position, but you know, as the surface area of the landscape is just expanding exponentially, every. You talked about how many customers are multi Cloud today. So you know, we know there's not a single thing that can do everything but, how are we doing as an industry, in Red Hot specifically? >> I think form Red hat's position, we've had a lot of success with Ansible. Just becoming a core automation technology, cause I think the one common thread is, you have so many choices, you have so many pieces, you have to start automating them. How we did IT 15 years ago, just will not. It won't scale anymore. I think building up from that stack. How you move to policy based management, that's earlier in the space. But there is a ton of capabilities and we've seen customers using, you know from our perspective, it's combining Cloud forms on orchestration, and satellite for content, Ansible for automation. Because I describe it, so I have the operation teams that run our OpenShift online environments. That's a, a relatively small group of people that manages millions of applications. And they change faster than a human could push a button. And so, as customers get into that world, you know we're certainly not in the Google world yet, but when you get that 4A it changes how you have to manage it. It has to become automated, it has to become policy driven, and then it's fun. I like it. Like doing ops in the 90s versus how you do it today. It is refreshing as an operator to just have these tools are your fingertips. >> High frequency application development. Matt thanks very >> It really is! >> Much for coming on the Cube. It's great to see you, and congratulations and good luck going forward. >> Fantastic, thanks S. >> You're welcome. Alright keep it right there everybody. Stu and I will be right back with our next guest. This is Cube, we're live from Red Hat Summit in Boston. We'll be right back. (upbeat music)

(lively music) >> Narrator: Live from Las Vegas, it's the CUBE covering Oracle Modern Customer Experience 2017. Brought to you by Oracle. >> Okay, welcome back everyone. We are here live in Las Vegas, the Mandalay Bay for Oracle's Modern CX conference, hashtag Modern CX. This is the CUBE. I'm John Furrier Silicone Angle. My cost, Peter Burch with us for two days. Our next guest is Ron Corbisier. Owner and CEO of Relationship One. Back again, from last year. It was one of my memorable interviews last year. Welcome back-- >> Ron: Thank you for having me. >> to the cube. We went down and dirty last year. I remember we were having a great conversation about ad tech. If you've taken that video, it's on YouTube and look at it, I guarantee you, it's going to play right into what happened this year. Again, we predicted it. We didn't say AI but we did say we're going to see data really driving. That's what Oracle ended up locking in on daily. >> Yeah, absolutely. Data is going to be the underlying conversation for the next few years. We spoke, a lot, last year about martech stack. Actually, martech and ad tech colliding, coming together. All of that is being fueled by the mass quantities of data that we have as sales and marketing folks out there, to leverage and how do you use it. It's never about, do I have enough data? A lot of times you feel you, almost, have too much. But it's, now how can you use it appropriately? >> We were talking, before we came on camera here about that dynamic of ad tech and marteh collision which we talked about last year. It's interesting. If you just say digital, end-to-end, as a fabric, then you can still talk about these pillars of solutions but they're not silos. If you look at the holistic data approach and say, hey, if we're going to have horizontally scalable data which we want, frictionless less than 150 milliseconds responses they want to promote. You can still do your pillars but be open to data sharing versus here's my silent stack. I do this, I do this, that's shifted and that's what Oracle's main news is here. >> Yeah, absolutely. I think what you're seeing, even in, not only Oracle, that organizational level, people are taking a more holistic view of data that they own and data that they can enrich with external information, right? How does that information, then, fuel all of these other areas within customer experience within the CX world? How do you use that to provide better service? How do you use that information to optimize your sales efforts and from a marketing standpoint, obviously, my background, it's how do we leverage that to optimize our spend, optimize our communication, our orchestration, all of those pieces. It all comes down to that common language of data that we have access to. >> Tell me about the real time aspect cause we teased on it last time and we did talk about how to leverage some of the advertising opportunities and the role of data in real time. That's been a message here from batch to real time. The consumer's in motion all the time depending upon their context. How does real time fit into this? >> Yeah, this is the evolution of what we're seeing in the technology, right? Historically, you've built a campaign. You've, maybe, created some type of journey or persona. You're building content around very specific elements within a life cycle structure. Life cycles are not linear any longer. They never really were but they're, definitely, not now and you have to adapt very quickly. Leverage technology, to say, one of my saying, communicating and what channel but in more in a real time thing. You have to look at what was the last thing that individual did, the activity, all of that. Historically, you haven't had that depth or degree of real time lists. It's been more of a structured candance. That doesn't exist, right? That's not going to exist going forward. That's where things like AI which I always hesitate to use that term because it's the buzz word now of today. But tools that are more of that augmentation of how we do things. Leveraging the power of technology. That's going to change how we orchestrate things and how we communicate. >> I'm just looking at your tweet here. I want to bring this up because you mentioned AI and we were talking about it. Thanks to all who stopped by my MME 17 Modern Marketing Experience 17. A little bit of a jab at the messaging that's cool like that. Session on artificial intelligence. Loved all the support from my fellow modern marketers. What do you mean by that? You make a bold statement. Did you have courage? Did you stand tall? Did you call out AI? What was the conversation there? >> Well I called out the silliness of the term AI. I picked on that the marketers but I picked on the term We, as marketers, I call them the squirell moments that, as marketers, we're on to the next thing. I reviewed the past eight some years of these conferences and what were the topics, right? There were some topics that were transformational topics like how does marketing automation or organizational change or those type of things. Those are things that stick with you. There is things that are more timely things. Like predictive scoring and their tactics. There more things that I use as a marketer or sales person. What I was picking on with AI is that it's the buzz word. It gets you funding. It gets you people in a room for a conference, that's great. But it doesn't do anything by itself. It's really an enabler. It's a pervasive thing that combines machine cycle and data but you have to teach it, you have to incorporate it into your applications. As marketers, ultimately, it's going to change our tool set to make it better. It's more poking fun at the term-- >> We always say AI. I've said it on the CUBE, AI's BS. Although, I'm a software guy. I love AI because it really promotes software that has been very nuance. So, IOT, machine learning, this is very geeky computer science stuff that's super cool. Anything that can take that mainstream in the software world, I'm a big fan of. That being said, I think the augmentation is the real message which is, you can use machine learning, you can use software, use some technical things, to make things better. You said it on our earlier segment this morning which is there's a variety of things that you can automate away. >> The thing that's, and you mentioned earlier, it's the ability that we now have the ability to collect an enormous amount of data, that's relevant and important. And we now have the technology to, actually, do something with that data. But we still have to apply it and there's a lot of change that has to happen. The way AI is different from other systems is that, historically, financial systems, software would deliver and answer. It was highly stylized. It was rarely, a clear correspondence with the real world. We closed the books. How much money did we make? There was an answer and it came from some data structures that were defined within the system. Now we're trying to bring in the real world and have these technologies focus on the real world. And they're giving ranges of possible options. That is new. It's good and it's useful but it does not take the requirement for discretion out of the system. That's why it's the augmentation. >> Ron and I were talking last year about this, Peter and I. I think you're getting a trajectory that, I've been saying for a while and this is developing in real time here on the CUBE and also some of our commentary is the role of software development and DevOps that we've seen in Cloud, is moving into the front lines of business. Meaning their techniques. You're seeing Agile, already, being talked about. You're seeing standing up campaigns. Language, you can go to the Cloud stack and say, building blocks, EC2, S3, Cooper Netties, containers, micro services and apply that to marketing because there's a lot of parallels going on to the characteristics of the infrastructure. Certainly critical infrastructure to enabling infrastructure. It's interesting that you're seeing marketers being more savvy and inadative. What's your thoughts on that, a reaction? >> Yeah, it's the evolution though. If you go back to, we as marketers have been using rules engines, we've been using tools like collaborative filtering. You go back to late 90's, early 2000's when we were building recommendation engines in simple. That's algorithmic stuff, right? No different than we're doing today with pricing rules and all that stuff. The difference it that you now have more power to do it. You have the ability to do it more real time and on the fly. You use far more data. More computing power and more data. Not only your data that you own but data that you leverage from third party to really understand people. You have a wider lens. Historically, you're making recommendations based on what you had in a cart or some other things that people have bought that also had that in the cart, that's different now, right? With this type of technology, this enabling kind of world, you an look at a lot more data points to give you that. The problem is that anything around AI requires a couple of things. It is a dumb system so AI. (laughs) >> Still a computer. >> It's still a computer. Everyone forgets that for it to work, it has to learn. I have some friends who have built marketing tools on top of Watson, for example. It takes hundreds and hundreds of hours for it to start doing something. You have to train it. You have to, not only, give it the data, you have to train it. >> Even the word learning and training is misleading in may respects. At the end of the day it's software but what is new is it's being applied in richer, more complex domains. The recommendation engine used to be just for recommendation. Now we're using those same models and we're combining them and applying them to richer more complex domains. Yet, ideally, the software's not getting more difficult to use. And I think what really makes this compelling, as a software engineer, is that we're doing all this more complexity but we're packing it and making it simpler. >> I think that's the point of where Oracle's going and why they don't call it AI. They're using it more the adaptive. Because they're thinking of it at the micro service level. They're thinking of how can they make these widgets of functionality to better the tools we have. To incorporate it into not make it so a jump forward in our tool set. It's just now, an augmented component of what we do today. >> It's, almost, a stack approach. You got foundational building blocks and at the top is high velocity, highly dynamic apps and you could argue, we were talking that the CMO's going to be an app shop, some day. This banks the question and I'd like to get both of you guys to weigh in on this. Because this is a question that I'd like to get on the record. What is modern marketing these days? Define modern marketing because what we're getting at here is, to your point of the evolution is we've seen this movie before. Is it a replatforming? Is it a building block approach? What is a modern marketer? What is a modern marketer mean? How do you execute that? >> I think it's quick and nimble and adaptive. The whole point of modern marketing is that you're always looking at how you can rethink, how you can optimize, how you can leverage technology to do things. It's not about replacing head count with a machine or a tool or a tech. It's really about how do you leverage that head count more effectively? How can you focus on optimization using those technologies. Modern marketing is, again, probably another buzz word but just like modern sales, modern commerce, all of that. It's really about how do you enable it with that stack do better. >> So, is it fashion or is it like hey, there's a modern marketer over there, look at what he or she is wearing. Or is it more technology based that's got some fundamental foundational shifts that are being worked on or both? >> It's leveraging technology and it's leveraging data more effectively and creatively. It's not being stuck with a prescriptive approach on campaign and orchestration and building. It still requires strategy and all of that but it's really how you approach it. >> So, how you think of it. What's your angle on this? >> That's a great question. And that's why I giggled about it. I think you gave a great answer. The three key precepts of Agile are, iterative, opportunistic and empirical and it's nimble quick and you change. But to me, I'll answer the question this way. Modern marketing focuses on delivering value to the customer not back into the business. It used to be that you would deliver into the business. He'd say, oh, we give you a whole bunch of new leads. We give you a whole bunch of this. If along the way, it created value for the customer, that's okay. But more often that not, it was annoying. As customer's can share their experience and share information about how (mumbles) engaged them, that's amplified. Annoying gets amplified. I think if you focus on are you creating value for the customer, you also end up with the derivative element that you're accelerating leads, they are in the process and where they are in the journey. The way I'd answer it. It's not distinct from yours but the idea of modern marketing focuses on creating value for the customer. The only way you, consisting do that is by being nimble and blah-blah-blah-blah-blah. >> I agree, in the same thing though. A core tenant, if you will, of modern marketing is absolutely. It is the value proposition. It's also making sure you understand the impact of the value of proposition The velocity of the pipeline, the impact on revenue, all of those things right? Because it's all about that value which it has to be, from a customers perspective but you're not doing all of the other pieces. You're not going to justify the spend. You're not going to get all of those together. >> Let me see if I can thread the two points together. Cause what I'm seeing, by listening is, you mentioned, the main thing in my mind was the data. That's different right? You're saying okay, thing differently, talk to the customer and the value to the enterprise value is being created through a different mechanism versus just serving it. >> Not really, not really. The fundamental focus, historically, of marketing has been what are we doing for the business? What are we doing for sales? Now, if we focus on, now you say well no. We have to created value for the customer in every thing we do, then we get permission to do things differently. We get more data out of the customer because the trust is there. We're allowed to bias the customer to the next, best option. >> I'm trying to answer my questions. I can see your point. My point is this, the modern marketer is defined by doing it. The business practices it a little bit differently to achieve the same thing. >> By focusing or creating value they have to do things differently and now they can because technology allows them to do it. >> We saw Time Warner, they weren't using data prior. That's a little different. If you go outward to go in, it's a great value while doing the table stake stuff. >> It's changing strategically thinking different of how you do it. Creating that value proposition's very different and also being able to measure and optimize are you doing it correctly? Is it having impact on the business? Most of my customers are not for profits They, actually, have to show, bottom line an impact. All of that requires data and speed and velocity in which we have to run requires tech. >> They got gestures in the market with customers. They have that touch point. They can leverage that. >> Here's (mumbles) modern marketing is not speeding up and increasing the rate and lowering the cost of doing bad marketing. >> No, no, I mean that's exactly. >> It was marketers point. >> That's right. (laughing) You can spend a lot of money to do bad marketing. >> Let's double down on our bad marketing. Ron, thanks so much for coming on the CUBE again. Thanks for sharing the insights. It's always a pleasure to get down and dirty and peel back the onion on some of these things. Final question for you. What do you expect for the evolution for this next year. >> I think AI's going to be with us for awhile just because it's the new buzz word. We've got a couple cycles on that. >> John: It reminds me of Web 2.0, what is it? >> And that lasted for a few years as well. I think over the next year or so, we're going to see the benefits of that augmentation. We're going to, actually, see some of these micro services as people start fueling some of the tools that we already have. You're also going to see some of that further collision of ad tech and mertech. Cause everything's digital and the impact of what that means for us as marketers. >> I can't wait of the hashtag, marketing native. Cause Cloud Native is coming. Someone's going to make it up, I hope not. >> Peter: You did. >> Ron: You just did. >> Okay, Marketing Native. What does that mean? We'll do a whole segment on that. We'll get Ron to come in. Hey, thanks for coming on the CUBE. >> Thanks for having me. >> Great to see you. I'm John Furrier. Peter Burris here inside the CUBE getting all the action. Straight from the data and sharing it with you. Thank you Ron, for coming on again twice in a row, two years in a row. This is the CUBE. We'll be back with more after this short break. (lively music) >> Narrator: Robert Herjavec. >> People, obviously, know you from Shark Tank. But the Herjavec group has been, really, laser folks in cyber security. >> Cause I, actually, helped bring a product called Check Point to Canada, firewalls, URI filtering, that kind of stuff. >> But you're also an entrepreneur? And you know the business. You've been in software, in the tech business. (mumbles) you get a lot of pitches as entertainment meets business. >> On our show, we're a bubble. We don't get to do a lot of tech.

>> Commentator: Live from Las Vegas. It's theCUBE. Covering InterConnect 2017. Brought to you by IBM. >> Hello everyone. Welcome to theCUBE special broadcast here at the Mandalay Bay in Las Vegas for IBM InterConnect 2017. This is IBM's big Cloud show. I'm John Furrier. My co-host, David Vellante for the next three days will be wall-to-wall coverage of IBM's Cloud Watson. All the goodness from IBM. The keynote server finishing up now but this morning was the kickoff of what seems to be IBM's Cloud strategy here with Dave Vellante. Dave, you're listed in the keynote, we are hearing the presentation. We had the General Manager/Vice President of Data from Twitter on there, Chris Moody, talkin' about everything from the Trump presidential election being the avid tweeter that he is and got a lot of laughs on that. To the SVP of Cloud talking about DevOps and this is really IBM is investing 10 million dollars plus into more developer stuff in the field. This is IBM just continuing to pound the ball down the field on cloud. Your take? >> Well IBM's fundamental business premise is that cognitive, which includes analytics, John plus cloud plus specific industry solutions are the best way to solve business problems and IBM's trying to differentiate from the other cloud guys who David Kenny was on stage today saying, you know, they started with a retail business or the other guys started with search, we started with business problems, we started with data. And that's fundamental to what IBM is doing. The other point, I think is-- the other premise that IBM is putting forth is that the AI debate is over. The Artificial Intelligence, you know, wave of excitement in the 70s and 80s and then, you know, nothing is now back in full swing. An AI on the Cloud is a key differentiator from IBM. In typical IBM fashion for the last several Big Shows, IBM brought out not an IBMer but a customer or and or a partner. And today it brought out Chris Moody from Twitter talking about their relationship with IBM but more specifically the fact that Twitter's 11 years old. Some of the things you're doing with Twitter obviously connected into March Madness and then Arvind Krishna who has taken over for Robert LeBlanc as the head of the Cloud group, talked about IBM, AI, IBM's Cloud, blocked chain, trusted transactions, IoT, DevOPs, all the buzz words merged into IBM's Cloud Strategy. And of course, we reported several years ago at this event about Bluemix as the underpinning of IBM's developer strategy. And as well it showcased several partners. Indiegogo was a crowdfunding site and others. Some of those guys are going to be in theCUBE. So. You know as they say, this AI debate is over. It's real and IBM's intent is to the platform for business. >> Dave, the thing I want to get your thoughts on is IBM's on a 19 consecutive quarters of revenue problems with the business on general but they've been on a steady course and they kind of haven't wavered. So it's as if they know they got to shrink to grow approach but we just came off the heels of Google Next which is their Cloud Show. How the Amazon is on re-invent as the large public cloud but the number one question on the table that's going to power IoT, that's going to power AI, is the collision between cloud computing and IoT, cloud computing in big data I should say is colliding with IoT at the center which is going to fuel AI and so, it brings up the question of enterprise readiness. Okay? So this is the number one conversation in the hallways here at Las Vegas and every single Cloud Show in the enterprise is, can I move to the cloud? Obviously it's a hybrid world, multi-cloud world. IBM's cloud play. They had a Cloud. They're in the top four as we put them in there. Has to be enterprise ready but yet it as to spawn the development side. So again, your take on enterprise readiness and then really fueling the IoT because IoT is a real conversation at an architectural level that is shifting the-- tipping the scales if you will for where the action will be. >> Well John, you and I have talked in theCUBE for years now. Going on probably five years that IBM had to shrink to grow. They've got the shrink part down. They've divested some of its business like the x86 business and the microelectronics business. They have not solved the grow problem. Let's just say 19 straight quarters of declining revenue. But here's the question. Is IBM stronger today than it was a year ago? And I would argue yes and why is that? One is its focus. Its got a much clearer focus on its strategy around cognitive, around data and marrying that to Cloud. I think the other is as an 80 billion dollar company even though it's shrinking, its free cash flow is still 11.6 billion. So it's throwing off a lot of cash. Now of course, IBM made those numbers, made its earnings numbers by with through expense control, its got lower tax right. Some of the new ones of the financial engineering. Its got some good IP revenue. But nonetheless, I would still argue that IBM is stronger this year than it was a year ago. Having said that, IBM's service as business is still 60% of the company. The software business is still only about 30% into it but 10% is hardware. So IBM-- people say IBM has exited the hardware business. It hasn't exited completely the hardware business but it's only focusing on those high value areas like mainframe and they're trying to sort of retool power. Its got a new leader with Bob Picciano but it's still 60% of the company's business is still services and it's shifting to a (mumbles) model. An (mumbles) model. And that is sometimes painful financially. But again John, I would argue that it is stronger. It is better positioned. And now its got some growth potential in place with AI and with, as you say, IoT. We're going to have Harriet Green on. We're going to have Deon Newman on. Focusing on the IoT opportunity. The weather company acquisition as a foundation for IoT. So the key for IBM is that it's strategic imperatives are now over 40% of its business. IBM promised that it would be a 40 billion dollar business by 2018 and it's on track to do that. I think the question John is, is that business as profitable as its old business? And can it begin growing to offset the decline in things like storage, which has been seeing double digit declines and its traditional hardware business. >> So Dave, this is to my take on IBM. IBM has been retooling for multiple years. At least a five year journey that they have to do because let's just go down the enterprise cloud readiness matrix that I'm putting together and let's just go through the components and then think about what was old IBM and what's new. Global infrastructure. Compute networking, storage and content delivery, databases, developer tools, security and identity, management tools, analytics, artificial intelligence, Internet of Things, mobile services, enterprise applications, support, hybrid integration, migration, governance and security. Not necessarily in that order. That is IBM, right? So this is a company that has essentially (mumbles) together core competencies across the company and to me, this is the story that no one's talking about at IBM is that it's really hard to take those components and decouple them in a fashion that's cloud enabled. This is where, I think, you're going to start to see the bloom on the rose come out of IBM and this is what I'm looking at because IBM had a little bit here, they had a little bit here, then a little stove pipe over here. Now bringing that together and make it scalable, it's elastic infrastructure. It's going to be really the key to success. >> Well, I think, if again if you breakdown those businesses into growth businesses, the analytics business is almost 20 billion. The cloud business is about 14 billion. Now what IBM does is that they talk about as a service runway of you know, 78 billion so they give you a little dimensions on you know, their financials but that cloud business is growing at 35% a year. The as a service component, let's call it true cloud, is growing over 60% a year. Mobile growing, 35%. Security, 14%. Social, surprisingly is down actually year on year. You would thought that would be a growth theory for them but nonetheless, this strategic initiatives, this goal of being 40 billion by 2018 is fundamental to IBM's future. >> Yeah and the thing too about the enterprise rate is in the numbers, it speaks to them where the action is. So right now the hottest conversations in IT are SLA's. I need SLA's. I have a database strategy that has to be multi-database. So (mumbles) too. Database is a service. This is going to be very very important. They're going to have to come in and support multiple databases and identity and role-based stuff has to happen because now apps, if you go DevOps and you go Watson Data Analytics, you're going to have native data within the stack. So to me, I think, one of the things that IBM can bring to the table is around the enterprise knowledge. The SLA's are actually more important than price and we heard that at Google Next where Google tried it out on their technologies and so, look at all the technology, buy us 'cause we're Google. Not really. It's not so much the price. It's the SLA and where Google is lacking as an example is their SLA's. Amazon has really been suring up the SLA's on the enterprise side but IBM's been here. This is their business. So to me, I think that's going to be something I'm going to look for. As well as the customer testimonials, looking at who's got the hybrid and where the developer actually is. 'Cause I think IoT is the tell sign in the cloud game and I think a lot of people are talking about infrastructures of service but the actual B-platform as a service and the developer action. And to me, that's where I'm looking. >> Well comparing and contrasting, you know, those two companies. Google and Amazon with IBM, I think completely different animals. As you say, you know, Google kind of geeky doesn't really have the enterprise readiness yet although they're trying to talk that game. Diane Green hiring a lot of new people. AWS arguebly has, you know, a bigger lead on the enterprise readiness. Not necessarily relative to IBM but relative to where they were five years ago. But AWS doesn't have the software business that IBM has yet. We'll see. Okay so that's IBM's ace in the hole is the software business. Now having said that, David Kenny got on stage today. So he came out and he's doing his best Jeremy Burton impression. Came out in sort of a James Bond, you know, motif and guys with sunglasses and he announced the IBM Cloud Object Storage Flex. And he said, yes we have a marketing department and they came up with that name. You know, this to me is their clever safe objects tour to compete with S3, you know several years late. After Amazon has announced S3. So they're still showing up some of that core infrastructure but IBM's-- the (mumbles) of IBM strategy is the ability to layer cognitive and their SAS Portfolio on top of Cloud and superglue those things together. Along, of course, with its analytics packages. That's where IBM gets the margin. Not in volume infrastructure as a service. >> I want to get your take on squinting through the marketing messages of IBM and get down to the meat and the bone which is where is the hybrid cloud? Because if you look at what's going on in the cloud, we hear the new terms, lift and shift. Which to me is rip and replace. That's one strategy that Google has to take is if you run (mumbles) and Google, you're kind of cloud native. But IBM is dealing a lot at pre-existing enterprise legacy stuff. Data center and whatnot so the lift and shift is an interesting strategy so the question is, for you is, what does it take for them to be successful? With the data platform, with Watson, with IoT, as enterprise extend from the data center with hybrid. >> Well I think that, you know, again IBM's (mumbles) is the data and the cognitive platform. And what IBM is messaging to your question is that you own your data. We are not going to basically take your data and form our models and then resell your IP. That's what IBM's telling people. Now why don't we dig into that a little bit? 'Cause I don't understand sort of how you separate the data from the models but David Kenny on stage today was explicit. That the other guys, he didn't mention Google and Amazon, but that's who he was talkin' about, are essentially going to be taking your data into their cloud and then informing their models and then essentially training those models and seeping your IP out to your competitors. Now he didn't say that as explicitly as I just did but that's something as a customer that you have to be really careful of. Yes, it's your data. But if data trains the models, who owns the model? You own the data but who owns the model? And how do you protect your IP and keep it out of the hands of the competitors? And IBM is messaging that they are going to help you with the compliance and the governance and the (mumbles) of your organization to protect your IP. That's a big differentiator if in fact there's meat in the bone there. >> Well you mentioned data, that's a key thing. I think whether doing it really quickly is getting the hybrid equation nailed so I think that's going to like just pedal as fast as you can. Get that going. But data first enterprise is really speaks to the IoT opportunity and also the new application developers. So to me, I think, for IBM to be successful, they have to continue to nail this data as value concept. If they can do that, they're going to drive (mumbles) and I think that's their differentiation. You look at, you know, Oracle, Azure, Microsoft Azure and IBM, they're all playing their cards to highlight their differentiation. So. Table stakes infrastructures of service, get some platform as a service, cloud native, open source, all the goodness involved in all the microservices, the containers, Cooper Netties, You're seeing that marker just develop as it's developing. But for IBM to get out front, they have to have a data layer, they have to have a data first strategy and if they do that well, that's going to be consistent with what I think (mumbles). And so, you know, to me I'm going to be poking at that. I'm going to be asking all the guests. What do you think of the data strategy? That's going to be powering the AI, you're seeing artificial intelligence, and things like autonomous vehicles. You're seeing sensors, wearables. Edge of the network is being redefined so I'm going to ask the quests really kind of how that plays out in hybrid? What's your analysis going to be for the guests this week? >> Well, I think the other thing too is the degree to-- to me, a key for IBM success and their ability to grow and dominate in this new world is the degree to which they can take their deep industry expertise in health care, in financial services and certain government sectors and utilities, et cetera. Which comes from their business process, you know, the BPO organization and they're consulting and the PWC acquisition years ago. The extent to which they can take that codifier, put it in the software, marry it with their data analytics and cognitive platforms and then grow that at scale. That would be a huge differentiator for IBM and give them a really massive advantage from a business model standpoint but as I said, 60% of the IBM's business remains services so we got a ways to go. >> Alright. We're going to be drilling into it again. There's a collision between cloud and big data markets coming together that's forming the IoT. You can see machine learning. You can see artificial intelligence. And I'm really a forcing function in cloud acceleration with data analytics being the key thing. This is theCUBE. We'll be getting the data for you for the next three days. I'm John Furrier. With Dave Vellante. We'll be back with more coverage. Kicking off day one of IBM InterConnect 2017 after the short break.