(techno music) >> Narrator: Live from San Francisco, it's theCUBE covering AWS Summit 2017. Brought to you by Amazon Web Services. >> Hi, welcome back to theCUBE. We are live in San Francisco at Moscone Center at the AWS Summit. And I'm Lisa Martin, joined with my co-host Jeff Frick. We're very excited to have the chief architect and co-founder of Nextdoor, Prakash Janakiraman, on the program, welcome. >> Thank you for having me. >> For those of you who missed the keynote this morning, Prakash, you did a really fantastic keynote in the session that Werner did, and I loved how you positioned what Nextdoor is. If there's anyone out there that actually doesn't know, give us for those who didn't see the keynote just how you positioned it and talk to us about what you guys are doing, how you've achieved 70% of US neighborhoods covered, over 135,000 neighborhoods in the US. You're expanding globally. Give us in a few minutes this back story on Nextdoor. >> Yeah, so we think of Nextdoor as sitting kind of alongside Facebook, Twitter and LinkedIn. People are using Facebook to communicate with their friends and family all over the world, and Twitter to connect with people with whom they share common interests. And despite having hundreds of Facebook friends and thousands of Twitter followers, in my own neighborhood I only knew a couple of my neighbors, and it's sort of unfortunate. Your neighbors are a great resource that you should know, right, in a local context. So we feel like Nextdoor is bringing back a sense of community to the neighborhood by connecting people in the medium that we use today, which is this virtual medium, online social networking. So we kind of sit alongside of those. And as you think about the difference between what Facebook has been able to do, or an Instagram or a SnapChat, they really leverage existing connections, and when most people don't know their neighbors we have our work cut out for us, because we need to go build those connections. And once those connections are built, they're really, really valuable, right? All of a sudden you didn't know how to find the local electrician or a handyman, or how to reunite with a lost pet, or what happened with this rash of break ins in the neighborhood. Or who do you go to if there's a natural disaster that's happening in your community? How do you band together? How do you even communicate with other people? And so we think we're bringing that basic connectivity to these neighborhoods. >> What was the secret sauce? Because obviously you can't just authorize integration to my contacts, because by definition they're not in my contacts. So how did you kind of crack that code? >> There were a couple of things. So number one was we made a very deliberate decision, we'll get to why this was important, to verify each of our members as being actual residents of a neighborhood community. In our parlance, a neighborhood is really a geographically bounded region. Every single neighborhood in the Nextdoor (mumbles) is started by one member. The member draws the neighborhood boundaries, and then subsequent members-- >> Jeff: They draw the boundaries. >> They do, they do. >> They define it. >> That's right. And so every member that joins has to actually prove that they're residents of the community, and that raises trust. And all these neighborhoods have grown because of word of mouth. People go out, they tell their neighbors, "Hey, you should come on to Nextdoor. "It's a great place for us to connect. "I just heard something interesting "that happened on Nextdoor." But then we also use a variety of different mechanisms to invite people that are a little unusual for internet companies. For example, we allow our members to send out postcard invitations, because again, they don't have phone numbers, they don't have emails or electronic correspondence. So we've had to resort to some non-traditional types of marketing to get the word out about Nextdoor. >> Don't share any secrets, but what percentage of new members come through a postcard sent by a neighbor? >> Well, not isolating postcards, the vast majority of our members are coming in because of a referral from another member, of which postcards are one of those mechanisms. >> Are one piece. >> Yeah. >> With all apps and stuff there's kind of the moment, right, the CNN moment, whatever, where things kind of catch. Is there a particular type of activity in the neighborhood that is the one that kind of catalyzes people where you get that little spike? >> Well, it depends. In a lot of different cases, I remember an example from really the early days of the company, a community in Woodside, California, which is just right down the road from here, a small child in that neighborhood had developed meningitis, and meningitis if you don't know is hugely contagious. It's really bad news. And so lots and lots of members got the word out about this, and that brought new members in because they were saying, "Well, wait a minute, what do I do about meningitis? "Do we need to get immunizations? "Do we need to do something else? "Do we need to quarantine our kids?" So sometimes it's bad news like that. In other cases it's good news, it's about neighborhood events, it's about bringing people together. One of our very first neighborhoods organized a Halloween party, a Halloween parade in their neighborhood, and they used Nextdoor to organize the entire thing, and they had like 50% participation in the neighborhood. It was a small neighborhood of 90 households, but to see all the kids, and them taking pictures and publishing them on Nextdoor, it created this connectivity that just didn't exist before, so. >> And that's such great point, because we are so used to be connecting with everything, and we think we're so connected, we all have over 500 LinkedIn connections, and Twitter followers and Facebook friends, but it's very abstracted. It actually can be very isolating. So it seems like it probably was like a no brainer from an investment perspective to go, this is the, as you said in your keynote, paraphrase, this is the original social network. So talk to us about how you built that on AWS, how you've leveraged the power of AWS, the technologies, to gain what you have done so far. >> It's interesting, because prior to starting this company I was at Google, and we always felt like one of our technology advantages at Google was that we had near infinite computing resources, and that the computing resources were abstracted away from the developers so that they could just go in and build applications and not need to worry about what actually powered those applications under the hood. You said, "I needed some RAM. "I needed some disk. "I need some CPU," and boom, you're off to the races. So coming out of Google, and this is a long time ago now in 2008, seeing that AWS was just getting started with EC2 and S3, and that the playing field was leveled for developers in such a way that you no longer had to rack and stack servers, you didn't need to have a physical data center, you didn't have to have people managing that data center, and that you could use hardware as software really, you could interface with it as software, was hugely powerful. So we started out on EC2 and S3, and over time, and as we fast forward to today, we're using almost 30 different AWS services, including DynamoDB, ECS, Redshift, Kinesis, and so all of these components fit together in running our business. >> Right. Early lines, right, for AWS. It's a data center as an API is one of my favorites, just those little lines, but one of the, so security, all that stuff is kind of done talking about security for a publisher in the cloud, but one other thing that still is out there is at some point, you know, you rent, rent, rent, and at some point you pass a milestone where it's more economical to buy. Clearly you guys didn't buy. Netflix hasn't bought. There's plenty of cases, but from your point of view as a founder and a businessman, and also an operator, when you looked at that, has that ever come up in your discussion as your Amazon bills get bigger and bigger and bigger, and if so, kind of what's the internal discussion and why are you where you are today? >> So we, like a lot of startups, we really value speed and we want to focus on the things that we're really good at, and the things that we're good at are building great products. So we are so advantaged by the fact that we do not have to manage our own infrastructure, that we can use these component parts from which to build our applications, and nowhere is this more apparent than in prototyping new features, right? When you don't necessarily know if something is going to work, you don't want to go make a big investment in procuring resources for that. You want to just be able to spin something up on demand and try it out, and if it doesn't work you shut it back down. And so for us it's a TCO, total cost of ownership, type of question. And along with having on premises data centers and infrastructure comes overhead for maintenance and having teams that do that, and right now, for all of these neighborhoods that we support, 135,000 neighborhoods in the US, right, we only have two people that manage our underlying infrastructure, two dev-ops folks. >> And how many people do you have in the whole company? >> The entire company is about 150 people, and we have 60 of them in engineering, so we're a really, really, really lean team, and we're supporting massive scale with that small team because of the help of something like AWS. And this would've never been possible 10 years ago, so. >> And you'd rather spend that next marginal dollar on another developer, or marketing, or sales, or community, or something, than a piece of metal and a rack. >> We want to put that money towards making a better user experience for our users, and whether that means going into new communities, places where we aren't already, or improving engagement in communities where we already have the product, in either case that's a better dollar spent for us. >> Jeff: Right, right. >> So along those lines, how do you do that? How are you taking user feedback and determining kind of what the next steps are even within the US, but also is there, as Andy Jessie actually talked about in his fireside chat, the GOs that they're expending, they're in 16 now, is there maybe a model to kind of follow along where AWS has a footprint? I'd love to know what that customer engagement is to help really refine that user experience. >> Yeah, there's a few different ways that we can get customer feedback. One is sort of implicit. So we have lots of data that we collect and look at and trying to understand like what features are really popular, what features are taking off, what features aren't really as popular as others, and we do a lot of A/B and split testing to understand how these features perform. But the other way is just good old fashioned qualitative feedback from our users. So we have a couple of different ways that we do that. One, we have a neighborhood operations team that's always in contact with our communities. We have leads in our communities that serve as sort of moderators and the folks that manage the community's activity, and so we lean on them heavily for feedback. And then we have a national leads forum where they all come together and they exchange their own experiences building their community. And from that, it's a treasure trove of information where we communicate with them, we participate in those forums, and then we build the features that we think that they want. >> It's funny, this theme of competing for speed, you're competing against time has come up a number of times today, in Werner's keynote, you mentioned it, it came up again in Andy's fireside chat. I thought it was interesting in your keynote piece how the measure of speed and deployment has so radically changed. It used to be one push a day was crazy. And you talked about a concept of democratization of deployment, which I thought was interesting. Because in the big data world we're always talking about democratizing big data, get it out of the hands of data scientists, let everybody make better decisions based on data, but you talked about democratization of deployments which I've never heard before. Wondering if you could share that story, because again, one a day, that's no longer the measure of success. >> No. So the way that we think about this and the reason that I call it democratization of deployment is as you invest more in automation and you turn down the kind of batching of releases together, the batches of commits together, you can now isolate their impact, and you can move faster by doing more frequent, smaller releases. And part of that is each developer is responsible for their own code going out to production. So what we've invested in is a lot of automation that makes it possible for any one of our developers to push a button, a metaphorical button, and actually push code out to the site, observe how that code performs, and then we can move onto the next one. So in the old world people would often hire a release engineer, and the release engineer's job was really to coordinate all of the activities of the developers, build packages, get them staged and ready for QA, and the overhead on that just does not scale well as a company gets bigger and bigger. And so what we've said is, "Listen developers, "you guys are responsible. "You guys know how your code works. "Let's make it possible for you "to minimize the amount of time "between you committing a piece of code "and that code being live to our users." And so that's what I kind of was talking about in terms of democratization of the release process, making sure that everyone can do it. >> What I thought just was fascinating is on one end everybody is talking about smaller, marginal units of compute and store, etc., right, and yet on the other hand you were basically doing, basically duplicating your entire production environment in kind of this red black strategy, build it up, make that one go, crash the other one. Build up a fresh one, make that one go, crash the old one, and leveraging what are basically infinite resources behind the AWS screen in a really innovative way that you could never do that with your own hardware. >> Well, a lot of credit goes to Netflix. We saw a presentation that they did a few years ago at Reinvent that inspired us to build our own kind of version of the red black deployment system. But again, because these resources are ephemeral, you can spin them up and shut them down, that's what makes any of that possible. So it's really, really awesome for us, because we're moving fast. In fact, I don't even know how many deploys we've done today, but every time a deploy is done we get a message in a Slack channel that says, "Hey, somebody pushed." And it says who the conductor of the train that actually pushed out the commit is, and so you have full accountability in this like living log of what's going on in your production environment, and anyone can do it. Even our interns are allowed to do it, and so it's really, really empowering for our developers to be able to do that. >> I was going to say, that was the word that I heard when you were talking earlier. It's really this empowerment, which is huge for productivity. And speaking of productivity, you guys have really achieved some pretty significant technology achievements that are presumably in this feedback circle going back and making the experience for your mother in law, your mom, probably my mom, even better. What are some of those technology achievements? You mentioned a few of them on the keynote. I'd love for our guests to hear some of those big things that you've achieved. >> Yeah, I think when we think about the technology stack there are two things that we're trying to do. Number one is build for our developers so that they can push features out faster, but then the second and the most important is that we improve the user experience for our users. And most recently, we've done a few different things. Number one is we've introduced this concept around personalization, and it's very lightweight at this point where we can try and understand, what is your experience? If you're not a parent, do you really care about play dates and all of the information about kids? If you don't have a pet, do you care about what's going on with pets? Do you not like the classified ads? And so we're starting to look at data, this is where the big data stack becomes very interesting, and say, "Okay, let's see if we can "match the content in your neighborhood "to the things that you're interested in," and sort of making a lot of investments in that area. And then the second is we're making a lot of investments in search, because we think a lot of people will come to Nextdoor with an intent in mind. They'll say, "Hey, you know what? "I need to find a handyman or a plumber." And what's the natural way to do that is to go into a search box and say, "Handyman," right, and look for handymen in your local community. And so we're making a lot of investments on both fronts that will make it easier for our users to get connected to the information that's most important to them. >> That personalization is so key because we sort of, as consumers and as people who expect things immediately, we want what we want, we want what's relevant. And we know a lot of companies, whether they're banks or whatnot, retailers, spend a tremendous amount of time and dollars investing to know how do I make this experience unique to Jeff, or unique to Prakash, or unique to Lisa. And so I think that there's so much capabilities. I have to ask you though, you must have the most connected neighborhood. You must have the best block parties. (laughing) >> Me personally? >> Yeah. >> You know, it's interesting. The product takes on the identity of each of our communities. And so in an urban community like in San Francisco I'll say that I still don't know all of my neighbors, but it's really, really comforting to know that I know by name and by face who they are even if I haven't had in person interactions. But one of the things that we always talk about, which is pretty cool, and it's happened to me in my own community, is we talk about this concept of bits that move atoms, and using our platform, which is really exchanging information electronically, to facilitate in person interactions, and those are the atoms. And it's definitely happened to me where I've seen someone on the street and I just say, "Hello," right, because I'm like, "Oh yeah, I saw your post. "Did you get your dog back? "Were you able to sell that television?" And so it's really interesting that this is actually happening, and ultimately that's our goal is to bring back that sense of community to neighborhoods and to make neighborhoods stronger and safer, and the way you do that is by connecting people in the community. >> Right, right. >> Absolutely. >> It's a neighborhood watch on steroids kind of, right? >> Totally, yeah. >> Yeah. >> It's fantastic. And I'm sure they would be blown away if they knew they were talking to the guy behind Nextdoor. >> Prakash: One of them. >> One of them. >> One of them. >> Well Prakash, thank you so much for sharing your story with us on theCUBE. >> Thank you very much for having me. >> It's so exciting to get back to the original social network and really kind of, I love that. I think people might even be learning how to write again rather than type. >> My handwriting is terrible. >> We can only hope. >> Reaching, you're reaching there. >> Well Prakash, thank you so much. Continued success with Nextdoor. >> Thank you very much. >> We so much appreciate your time here. >> For my co-host Jeff Frick, I'm Lisa Martin. You've been watching theCUBE. Don't go anywhere. We'll be right back. (techno music)

>> Narrator: Live from Washington DC, it's theCube, covering AWS Public Sector Summit 2017. Brought to you by Amazon Web Services and its partner Ecosystem. >> Welcome back here to Washington, D.C. You're watching Cube Live here at Silicon Angle T.V. The flagship broadcast of Silicon Angle. We are at AWS Public Sector Summit 2017 wrapping up day one coverage here in the Walter Washington Convention Center. Along with John Furrier, we are now joined by our esteemed colleague Jeff Frick who's been alongside all day handling all the machinations behind the scenes. >> Behind the scenes, John. >> John: Doing an admirable job of that, Jeff. >> So what do you think, our first ever visit to your town. >> John: I love it, I love it. >> I sense something tableau at the Opry. The Opry's the other big convention center, here, or Graceland. >> International Harbor. >> It's the same company. >> National harbor, MGM. >> You're a D.C. guy. >> Gaylord. >> Gaylord, thank you. >> What's the connection? So we going to get some tickets for the Nationals game? >> We got Nats game tonight, Strasburg pitched last night, did not pitch well, but who knows? Maybe we'll get Gio tonight. >> Well the action certainly Amazon Web Services >> Yeah let's talk about what we have going on here today, Jeff. >> Well, I mean, we interviewed, you and I did some great interviews. Intel came on, which is obviously Bellwether in the tech business. Jeff, former Intel employee knows what it's like to march to the cadence of Moore's law and Intel is continuing to do well in platinum sponsor or diamond sponsor here at the event. Look it, the chips are getting smarter and smarter, security at the Silicon, powering 5G, a networks transmission, a lot of the plumbing that's going on in cloud and in cars and devices and companies, it's going to all be connected. So it's a connected world we're living in and Intel's going to be a key part of that so they're highly interested and motivated by all the people that are popping up in the cloud. >> We were just talking and Jeff, I know, you're able to listen on the last interview that we did, but a point that you made, that, you know, a point that you raised, about four years ago, when the CIA deal came down and AWS is ON one side and IBM's on the other, and AWS wins that battle. You called it the shot heard round the cloud. And that, now four years later, has turned out to be a hugely pivotal moment. >> Yeah, I mean this is like moments in time history here, again, documenting it on the Cube for the first time. I don't think anything was written about this I'll say it since we're going to be analyzing it. The shot heard around the cloud was 2013 when AWS public sector under Teresa Carlton's team and her leadership, beat IBM for the Central Intelligence Agency, CIA, contract. Guaranteed lots of spec for IBM. Amazon comes out of the woodwork and wins it. And they won it because essentially the sales motion and the power of IBM had this thing lopped in. But at that time the marketplace was booming with what we call Shadow IT, where you could put your credit card down and go into Amazon cloud and get some instants. What happened was someone actually cut a little prototype, showed their boss, and they said, "I like that better than that, let's do a bake-off." So what happened was at the last minute, new opportunity comes in and then they do what they call a bake-off. Bake-offs and RAPs come in and they won. Went to court and the judge in the ruling actually said Amazon has a better product. So they ruled in favor of Amazon Web Services. That was what I called the shot heard around the cloud. Since that point on, the cloud has become more legitimate every single day for not only startups, enterprises, as well as now public sector. So shot heard around the cloud fast forward to today, this show's on a trajectory to take on the pace of re:Invent, which as their core Amazon Web Services show, then of course which is why we're here chronicalizing this moment in history. This is where we believe, Jeff you and I talked about this, and Dave Alante and I talked about the research team, this is where the influction point kicks up. This is a new growth pillar unpredicted by Wall Street, new growth predictor for revenue for Amazon, they're already a cash machine. They're already looking like a hockey stick this way. You add on public sector, it's going to be phenomenal. So, a lot of people are seeing it but this is just growing like a weed. >> Jeff, follow up on that. >> I was going to say, the two mega trends, John, that we've talked about time and time again, and Teresa Carlson and team have done a terrific job here in the public sector, but I always go back to the James, Tuesday night in the James Hamilton at re:Invent, and if you've never gone you got to go, and he talks about just all these big iron infrastructure investments that Amazon continues to make because they have such scale behind them. Whether it's in chips, whether it's in networking, whether it's in new fibers that they're running across the oceans. They can invest so much money to the benefit of their customers, whether it be security, you know, in all the areas of compute, that is fascinating to me. The other thing we always hear about, about cloud, right, is at some point, it's cheaper to own rather than rent. We just keep coming back to Netflix, like at nighttime, I think Netflix owns whatever the number, 45 percent of all internet traffic in the evening is Netflix, whatever the number is. They're still on Amazon. So, it's not necessarily better to rent than buy. You have to know what you're doing and we were at another show the other day, it was Gannet, the newspaper company. When they're using a lot of servers, they use hundreds, but he said there are sometimes, using AWS, that they actually turn all the servers off. You cannot do that in a standard infrastructure world. You can't turn everything off and then on. Which again, you got to manage it. You don't want the expensive bill. But to me, being able to leverage such scale to the benefit of every customer whether it's Netflix or a startup, it's pretty tough. >> And this is the secret, and this is something again, shared with the Cube audience, here, is not new to us, but we're going to re-amplify it because the people make a mistake with the cloud, it's in one area, they don't match the business model to their variable cost expenses. If you get into the cloud business, and you can actually ratchet your revenue coming in and then manage that cost delta redline, blackline, know where those lines are, as long as you're in the black, and revenue, and you then have the cost variable step up with your revenue, that is the magical formula. It's not that hard, it's back of an envelope. >> Right, right. >> Red line cost, black line revenue. >> The other great story, it was from summit, actually, in San Francisco earlier this year, at they keynote, they had Nextdoor, everybody knows Nextdoor it's the social media for your mom, my mom. They love it, right, people are losing dogs, and looking for a plumber, but the guy talked from about Nextdoor. >> John: Don't knock Nextdoor. >> I don't knock Nextdoor, the Nextdoor CEO gets up and he said, well, I laugh because the Nextdoor guy's mom didn't know what he did until he did Nextdoor. Anyway, he said, you know, we have the entire production system for Nextdoor. And then we would build production plus one on a completely separate group of hardwares inside of Amazon. When that was tested out and ready to run, guess what, we just turn off the first one. You can't, you can't, you can't do that in an owned infrastructure world. You can't build N and N plus one and N plus two and turn off N, you just can't do that. >> Well, the Fugue CEO, Josh, everyone should check out on Youtube.com/siliconangle, he was awesome. He basically saw a throwaway infrastructure mindset to your point about Nextdoor. You build it up and then you bring your new stuff in, you digitally throw it away. >> Right, right. >> That's the future. And this is the business model aspect. And public sector, we were joking, look it, let's just be honest with ourselves, it is a glacier antiquated old systems, people trying hard, you know, government servants, you know, that, employees of the government, not appointees, they don't have a lot of budget and they're always under scrutiny for cost. So the cost benefits always there and they have old systems. So they want new systems. So the demand is there. The question is, can they pull it off. >> So, talk about the government mindset or the shift. We've heard a little bit about that today. About how, to the point that you just made there, John, that you know, very reluctant, some foot-dragging going on, that's historical, that's what happens. But now, maybe the CIA deal, whatever it was, we hit that tipping point, and all the sudden, the minds are opening, and some people are embracing, or being more engaging, with new mousetraps, with better ways to do things. >> We've got the speakers coming on here, so we should wrap it up real quick. Final thoughts, from Day One. >> I was just going to say that the other thing is that before there was so much fat, in not only government in general, but in infrastructure purchasing, 'cause you had to, you better not run out of hardware at Q3 when you're running the numbers. So everything was so over provision, so much expense and over provisioning. With Amazon you don't need to over provision. You can tap it when you need it and turn it off so there's a huge amount of budget that should actually be released. >> I want to ask you guys, we'll wrap up here, final, since you're emceeing, final thoughts. What is your impression of day one? I'll start here and you guys can have time to think of an answer. My takeaway for public sector is Teresa Carlson has risen up as a prime executive for Amazon Web Services. She went from knocking doors eight years ago to full on blown growth strategy for Amazon. And it's very clear, they're not there yet. They only have 10,000 people here, so the conference isn't that massive. But it's on its way to becoming massive. Here's their issue. They have to start getting the cadence of re:Invent launches into the public sector. And that's the big story here. They are quickly shortening the cycles between what they launch at Amazon re:Invent and what they roll out of the public sector. The question is how fast can they do that? And that's what we're going to be watching. And then the customer behaviors starting to procure. So greenlight for Amazon. But they got to get those release cycles. Stuff gets released at Amazon re:Invent, they got to roll them with government, shorten that down to almost zero, they'll win. >> Yeah, my just quick impression is, I like to look at the booth action, because we've all had booth duty, right. What's going on in the booths? Did the people that paid for a booth here feel like they got their money's worth? And the traffic in the booths has been good, they've been three deep, four deep. So the people that are here are curious they're interested, they're spending time going booth to booth to booth, and that's a very good sign. >> This is a learning conference. Alright your thoughts. >> I would say, the only thing that is, I wouldn't say it's a red light by any means, but it's like a caution light, it's about budgets, you know, when you run government, you're always, you are vulnerable to somebody else's budget decision. I'm, you know, whether it's Congress, whether it's a city council, whether it's a state legislation, whatever it is, that's always just kind of a, a little hangup you have to deal with because you might have the best mousetrap in the world, but if somebody says nah, you can't write that check this year, maybe next year. We're going to put our money somewhere else. That's the only thing. >> I got my Trump joke in, I don't know if you heard that, but my Trump joke is, I'll say it at the end, there's a lot of data lakes in D.C., and they've turned into data swamps. So Amazon's here to drain the data swamp. >> Jeff: He got it in. He's been practicing that all week. >> I've heard it three times, are you kidding? Funny every time. >> Well you know our Cube, you know we talk about data swamps. I hate the word data lake, as everyone knows, I just hate that word, it's just not. >> Well, there is value in that swamp. >> Hated the word data lake. >> For Jeff Rick, John Furrier, I'm John Walsh. Thank you for joining us here at the AWS Public Sector Summit 2017. Back tomorrow with more coverage, live here on the Cube.

>> Narrator: Live from San Francisco, it's The Cube! Covering AWS Summit 2017, brought to you by Amazon Web Services. (upbeat music) >> Hi, welcome back to The Cube. We are live in San Francisco at the AWS Summit at Moscone Center. Really excited to be here. A tremendous amount of buzz going on. I'm Lisa Martin with my cohost George Gilbert and we're very excited to have Lowell Anderson, product marketing guru at AWS. Welcome back, Cube alumni! >> Lowell: It's great to be here, Lisa, thank you. >> Great to have you here as well. The keynote this morning was so energetic with Werner and Nextdoor is going to be on the program in a little bit. Over a thousand product launches last year. Not only are there superpowers now that AWS, I like that. You don't have a T-shirt, but maybe next time. But I think the word that I heard most today so far is customer. And I think that it's such a, and as AWS really talks about, it's a really differentiated way of thinking, of doing business. I'd love to understand what the products that were announced today. Walk us through some of the key highlights there. Customer logos were everywhere. So talk to us about how customers are influencing the development of the new services and products coming from AWS. >> Yeah, well, you know, for us, customers are always core to what drives our innovation. It's how we start, we start with what our customers want, and we work backwards from that to try to deliver a lot of the new features and services that we talked about today. And Werner covered a huge breadth of things, but they really fall into maybe four or five categories. He started talking about, directly for developers, talking about what we're doing with a product called CodeStar, which is designed to really help developers build and deploy software applications in the Cloud. He also then went and talked about our new marketplace, SaaS Contracts' capability, which makes it super easy for customers to sign up and purchase SaaS applications using multi-year contracts on AWS, but it also makes it easier for ISVs to make their offerings available for our customers. So again, really trying to make that easy for customers. We talked a lot about what we're doing in artificial intelligence, with the general availability of Amazon Lex today, and then a really entertaining video with Polly, where we saw that avatar speaking and the new whispering capability, so adding a lot more value to our suite of artificial intelligence services. Some exciting stuff in analytics, where we talked about Redshift Spectrum, which is the new search capability on Amazon Redshift that allows customers to search not just the data in their Redshift database, but also search all the unstructured data they have in S3. And then some really exciting announcements here on the database space with DynamoDB DAX, which is an accelerator for DynamoDB. And we also talked about the availability of a new version of Aurora for Postgres. So a lot of new capabilities, both in databases, big data, analytics, machine learning and artificial intelligence, and our offerings for SaaS Contracts as well. >> And that was all before lunch. (laughs) >> Lowell: Yeah, a lot of stuff. >> Lowell, following up on, in order of, let's say the comments on AI and the announcements made there. Microsoft, Google, Amazon all have gone beyond frameworks and tools to fully trained services that a normal developer can get their hands around. But in the areas of conversational user interface, natural language understanding, image recognition. Why do you think that those three vendors, the three vendors have been able to make such progress in those areas, to make that capability accessible, and there's so many other areas where we're still down in the weeds? >> I think there's, we sort of see it in, sort of focusing in maybe three different areas that are really targeted at what our customers are asking for. We have some very sophisticated customers who really want to build their own deep learning and machine learning applications, and they want services like MXNet, which is a highly scalable deep learning framework, that they can do and build these deep learning models. So there's a very sophisticated, targeted customer who wants that. But we also have customers that want to build and train and create prediction algorithms, and they use Amazon Machine Learning, which is a managed service which allows them to look at their past transactional data and build prediction models from it. And then the third piece is kind of what you mentioned, which is services that are really designed for the average developer, so they can really easily add capabilities like chatbots and speech and visual recognition to their applications with a simple API interface. And I think what you touched on is, why did we focus here, Well I think, as Andy also talked about today, that it's really early days in this space. And we're going to see a really, really strong amount of innovation here. And Amazon, which has been doing this for many, many years, and thousands of developers focused on this in our retail side, we're really working hard to bring that technology out, so that our customers can use it. And Lex, which is based on Alexa, which we're all familiar with from using the Echo. Bringing that out and making that type of capability available for average developers to use is a piece of that. So I think you're just going to continue to see that and over the course of the next year you're going to see continued new services coming from us on machine learning and artificial intelligence, across all those three spectrums. >> So let me jump to another subject which is really a hot button for our customers, both on the vendor side and the enterprise side, which is the hybrid cloud, I don't know whether we should call it migration or journey or endpoint. But let's take a couple scenarios. Let's say you're a Hadoop customer, and you've got Cloudera on-prem, you're a big bank, you've put an instance of it on Amazon and on Azure so that you can move your data around and you're relatively free. >> Lowell: Sure. >> Now the big use case has been data warehouse offload. So all of a sudden you have two really great data warehouses that are best in class on Amazon. With Redshift, with now the significant expansion of it, and Snowflake, and then you have Teradata, which now can take their on-prem capabilities and put them on the Cloud. How does the customer weigh the cost/benefit of lowest common denominator versus-- >> Yeah, yeah, sure. I think for us and for our customers it's not a one-size-fits-all. Every customer approaches this differently, and so what our focus has been on is to give them the range of choice. So if you want to use Cloudera, you can deploy it on EC2 and you can manage that yourself, and that's going to work great for you. But if you want a more managed service where maybe you don't want to have to manage the scalability of that Cloudera deployment, maybe you want to use EMR and deploy your Hadoop applications on EMR which manages that scalability for you. And so you make those tradeoffs and each of our customers makes those tradeoffs for different reasons and in different ways and at different times. And so our focus has always been to really try to give them that flexibility, to give them services where they can make the choice themselves about which direction they want to go for their individual applications, and maybe mix it up and try different ways of running these types of applications. And so we have a full range of those types of, from the ability to deploy those directly onto EC2 and manage it themselves, all the way to fully managed services that we maintain all the scalability and management and monitoring ourselves. >> One of the interesting things that Andy Jassy said in his fireside chat just in the last hour or so about HyperCloud was that most enterprises are going to operate in HyperCloud for the next several years, and there are those customers that are going to have to, or want to have their own data centers for whatever type of application. But something also that he brought up in that context, and I know you know a lot about this, George, is VMware. So when I was looking at the announcement that was made in the last six months or so about VMware, vSphere-based cloud services, VMware has just sold off their vCloud Air, kind of competing product, wondering with the VMware Cloud on Amazon, how does that... what are really the primary drivers there? Is that sort of a way to take those VMware customers eventually towards hybrid cloud, or is that an opportunity to maybe compete with some of the other guys who might have more traction in the legacy application migration space? >> I think for us, it's again, it comes back to our customers saying, some of our workloads that maybe for a long period of time have been deployed on VMware and we've been using VMware ESX for many, many years on-premise, and we have these applications that have been deployed for many years there, and they're highly integrated, they use specific features of VMware, and maybe we also like using VMware's management tools, we like using vCloud to manage all of these different instances of our VMware virtualization platform, but we just want to run it in the Cloud, because we want that scalability. When you deploy that stuff on-premise, you're still kind of locked in. Every time you want to expand, you've got to go out and you've got to buy more hardware. You really don't have the agility to expand that business, both as it grows, or as it declines. So you're paying for that hardware to power it and run it no matter what. And so they're telling us we'd like to get some of this up into the Cloud, but we don't want necessarily to have to, we've built these apps, we're comfortable with how they're running them, but we want to run them up in the Cloud and we want to do it with low risk. And that's what this VMware relationship is about, is letting those enterprises that have spent years building and maintaining and using VMware and their various management tools, to do that up in the Cloud. That's really what it's about. >> So let's switch gears to another topic that Andy talked about, since all his topics were topical. Edge computing and IIoT. That's another big shift that's coming along and changing the architecture so we have more computing at the edge again, and huge amounts of data. Obviously there's many scenarios, but how do you think customers will basically think through this, or how should they think through how much analytics and capability is at the edge, that issue of should it look like what is in the Cloud? Or should it be really tight and light and embedded? >> I think we're seeing just an increasing range. And also a really interesting mix, where you have some very intelligent devices, your laptop and so on, that is connected to the Cloud and it has a pretty significant amount of processing power, and so there can be applications that run on that machine that are very sophisticated. But if we're going to start to expand that universe of edge devices out to simple sensors for pipelines, and simple ways to monitor the thermostat in your home, and simple ways to measure and monitor and track all sorts of, you know, automobiles and so on, that there's going to be a range of different on-premise or edge types of compute, that we need to support in the Cloud. And so I think what Andy's saying is that we want to build the Cloud to be the system that can act as the, has the analytics power to ingest data from these maybe tens of millions of different devices, which will have a range of different compute power, and support those applications on a case by case basis. >> We've got to wrap things up here, and I know this conversation could continue for many hours. I think what we've heard here today is a tremendous amount of innovation, and I made the joke, all announced before lunch, but really it was. We're seeing the flexibility, we're seeing the customers really drive the innovation. Also the fact that AWS starting in the startup space with the developers, that's still a very key target market for you, even as things go up to the enterprise. So continued best luck with everything going forward. We're excited to be at re:Invent in just, what, five or six months from now, and with many, many more thousands of people and hearing the great things that continue to come from the leader in public cloud. >> Lowell: All right. Thank you, Lisa. >> Thanks for joining us, Lowell, we appreciate it. Next time I want the superpower T-shirt. (laughs) >> (laughs) Okay, I'll take you up on that. >> All right. I'm Lisa Martin for my cohost George Gilbert. Thanks so much for watching, stick around. We are live at the AWS Summit in San Francisco, and we will be right back. (upbeat music)

>> Announcer: Live from San Francisco, it's the Cube, covering AWS Summit 2017. Brought to you by Amazon Web Services. >> Hi, welcome to the Cube. We are live in San Francisco, at the Amazon Web Services Summit, 2017 AWS Summit. I'm Lisa Martin, with my co-host Jeff Frick. We've got George Gilbert here, as well. Packed house here. We all just came from the keynote, where there were some fantastic announcements. Lot of passion, Dr. Werner Vogels, the CTO and VP at AWS did a fantastic keynote, and some of the themes that I heard, guys, were really customers, customers, customers. We know how obsessed AWS is with customers. A lot of great announcements, all really substantiated by phenomenal customers from enterprise, startups, public sector. We've obviously seen how quickly they've been innovating. They've done a fantastic job turning this first mover status into sustained market leadership. What are some of the things, Jeff, that really kind of caught your eye in the CTO's keynote this morning? >> Lisa, the thing that I was actually taken back to Tuesday night with James Hamilton at AWS re:Invent, which if you are not going to re:Invent, you should register just for that. And really, the idea is that scale just trumps everything. And because Amazon has so many customers in so many areas, they can apply such scale to all their infrastructure, across such a broad array of services. I mean, all the slides that Werner kept popping up had so many little squares, 'cause they have so many services, so if you need fast I/O, you need fast compute, you want facial recognition, you want machine learning, they have a set of services for you. So a lot of people talk about the application-centric view of the world, but Amazon is actually delivering that to people, and they had Nextdoor app as kind of their showcase customer where they focus on the application, because Amazon does the rest, and now I thought it was interesting now they're moving into the development sphere. So now you can do your native development in AWS. Again, use that set of services that most apply to the applications you're building, and focus on your application and your customer. I mean, how do you compete with the scale? And who wants to compete in infrastructure scale if you're a company that's building a web-centric or native application? The other thought I think was interesting, at the beginning, he had his NASCAR slides, his logo slides, went through the startups, great, went through the enterprises, great, went through public sector, great, went through ISVs, great, went through system integrators, great. I mean, the ecosystem is phenomenal. So again, James Hamilton, I just love his talks, but the amount of resources he can apply to his business problems, compared to any individual company, it's just, you can't even compare. What'd you think, George? >> I look at the capabilities, the top three vendors are providing. You know, Amazon, Azure, and Google. And they each bring some different strengths to bear. Google is still building out for commercial access to services that they built internally for their own use. So you have what's a spectacular relational database that's globally distributed, called Spanner, but it's not actually something that commercial customers are used to. That's was built really for Google internal gurus. Now, it's in many ways better than anything that commercial developers have access to, but it's a bit of a migration hurdle in terms of learning. So, now, Amazon took, they took their internal infrastructure, but they built it so much differently. It wasn't meant to sort of stretch the capabilities of their internal developers and external developers. But they've been getting richer over time. Let's just use an example of a product that got significantly enhanced today. Redshift, which with, they called it Spectrum. Redshift used to be a traditional MPP data warehouse, and its data was tied into the same servers, or nodes, as the compute analytic functions. And so it was not that elastic, it was almost like a on PRIM product ported to the cloud, but they've been improving it, and today, there was a huge step forward where they put the storage on S3, which is completely separate from the sequel, Compute. And so now they go from what was essentially data warehouse that can max out at two petabytes to something that can go to the exabyte range. And because the data's on a cheap S3 storage, you can spend the compute down, and then you're just essentially paying for archive. So that's something that now looks more like Snowflake which was the best in class cloud data warehouse up until this point. Now there, I'm sure, are many other differences. But Amazon has that iteration to taking more and more advantage of taking what were conventional products and turning them into, you know, cloud ready services. >> You mention the re:Invent show last November. 32,000 attendees, sold out. >> Right, right. >> Lisa: And then 50,000 watching the livestream of the keynote. Andy Jassy was on the Cube talking with John and one of the things that I found interesting about that and also, some recent press that Andy has done is talking about how, which they're normally very customer focused, and the theme today was customer obsession, which I think we saw with all those logos up there. But they talk about, they don't really talk about competition. What, one of the things that I found interesting was that Andy has talked recently about them being six to seven years ahead of their competition. We see them continue to innovate. Add capabilities, add technology integrations. Jeff, you mentioned the ecosystem partners growing. We've had a number of them on the show today. They're so far ahead of competitors. And kind of going off what you said about Google, George. Amazon is now starting to productize some of the technologies like Amazon Connect that was announced last month, a virtual call center, that they use in-house, which is something we hadn't seen from a Google yet. >> That's a great point. And that was actually one of the differences, that I didn't get to sort of talking database. But both companies or all, Amazon, Azure, Google, IBM, all have really advanced machine learning, essentially engines and algorithms. But what makes machine learning really useful as the data is when you combine those with the data that trains those algorithms. And that's what makes essentially application ready services. Otherwise it's just tooling. And Google can leverage its data for, from search, from voice search, from video and image recognition with YouTube. So it has a bunch of machine learning services that are good for a conversational user interface and a visual user interface, but what Amazon is going... Amazon is leveraging the Alexa and Echo product to get, to train their natural language understanding and speech to text, text to speech. So that was added to today. But the thing that they're doing that's really interesting that Google and Microsoft can't yet is they're taking the machine learning capabilities that they use for fashion merchandising, price optimization, fulfillment, and they're going to be taking those and putting them out on AWS for developers to use just the way they their compute and basic software middleware and put them out for other companies to use. So in other words, they're going to take some of their core, most core mission critical, machine learning capabilities and open them up for others. But the key thing is they're trained on Amazon data so that they're immediately useful by corporate developers, not data scientists. And that's something in those areas where Amazon's unique. Every cloud vendor will have their, you know, areas of data where they can make it accessible to corporate developers. But Amazon has a unique set. >> And the other thing we talk often about, founder-led companies. And I think the culture thing, it just can't be overstated. Recently, Jeff Bezos says day one, you know, kind of internal memo is making the rounds again on social media. So I took a minute to reread it and you know, we talk often on the key of are we in the first inning, are we in the second inning or the third inning of whatever trend we happen to be covering, and I think his attitude that it's always day one is pretty significant. And you can't bet against the guy. That's why I love to say never bet against Bezos, 'cause he's got a vision, he's got to execute it. And the team that he's put in place with Andy, you know, it's just a quiet execution. Like you said, they don't really look at the competition. That's not who they're competing against. Werner said it today. They're competing against time. And their customers are competing against time. And I thought the examples again, from the keynote of next door about the time compression for all the various processes in their company were giant, which allow again, better application development. It allows their customers to better serve their customers. And I don't think that can be really overstated. And you don't get that as much in Google, where you know, Google Cloud is a different thing and they brought in new leadership. Obviously Satya has done a hell of a job turning Microsoft around from what it was before. But you know, you just see this quiet, confident execution within AWS team that I think is pretty special. >> There's one thing... Oh, sorry Lisa, let me just add on that execution point and the lead that they have over the competition. Internally, Andy Jassy tells his team there's no compression algorithm for a lead time of six years. It's not like just because Azure got started a little bit later, and they know what things are going to look like sooner because they can see the future before Amazon had to wait ten years to get there. That, you still have to go through that learning curve. And in other words what he's trying to say is their lead is, it's not, they can maintain their lead just by continuing to execute that flywheel affect that Jeff was talking about. >> Right and they continue to innovate. One of the things that I know that Jeff, you and John, George, have been following AWS since symphysis ten years ago. And they continue to innovate, they continue to add integrations. One thing that I was particularly interested in and just doing some prep for today's event is what they announced with VMware a few months ago. VMware vSphere base cloud services. Is that a... Couple things. Is that a foray to be able to bring VMware legacy customer applications into the cloud? Is that maybe a step towards saying hey, we're ready to start taking our customers to hybrid cloud? I'm curious to hear from some of our guests today what they think the next steps are. It wasn't talked about in the keynote but if you talk about competition, or rather growth, one of the areas that they've really excelled in obviously with the developer community and the start-ups, where they started is in greenfield, right. They have a great rich set of application developmentals, ideal for cloud development, ideal for greenfield. If you look at the legacy application space, you might think Microsoft, IBM, do they have an advantage there. But now what Amazon's doing in hopefully later this year with VMware is that, a bat signal. That hey, we're ready to take these customers and their legacy applications into the cloud as a competitive signal or really as a signal to hey, customers, we're ready to take you to the hybrid cloud. What are your thoughts on that? >> I guess that they started with start-ups. They were the ones who were the most demanding on the infrastructure because they were greenfield apps. And so there was, you know, they needed to go beyond the constraints of legacy systems. And in fact, Satya Nadella said of Azure, we need our Netflix, which was, you know the lighthouse customer for Amazon that was always pushing the envelope of what was possible. What's happening now though is that there was this journey that I just want to touch on that there was a pre-brief yesterday about the sort of the typical customer journey where they start with dev test workloads, then they go to new greenfield apps, then digital experience and user experience, then analytics and mobile. And what's now happening is that we're getting to the mission critical systems. And that's why like we heard a lot on database issues. 'Cause that's where, application databases are the foundation of mission critical apps. >> Speaking of that, I think, well we're really excited. We have a great guest line up today. We've got Splunk's CMO on the show. We've got a number of ecosystem partners. Datadog as well, so guys I think it's going to be a fantastic day. A lot to talk about. Really excited to hear about a lot of the innovation, the evolution that's going on and where these partners are going to be able to take their customers next. So, you're watching the Cube. Again, we're live at the Amazon Web Services Summit in San Francisco for George Gilbert and Jeff Frick, I'm Lisa Martin. Stick around, we'll be right back. (techno music)