>>Hello and welcome to the power of and where H P E Aruba and Pensando are changing the game the way customers scale at the cloud and what's next in the evolution in switching everyone. I'm john ferrier with the Cuban. I'm here with Shane Corbyn, Director of Technical Product management. Pensando Williams show vice president Product management, Aruba HP Gentlemen, thank you for coming on and doing a deep dive and and going into the big news. So the first question I want to ask you guys is um, what do you guys see from a market customer perspective that kicked this project off? Amazing results over the past year or so. Where did it all come from? >>It's a great question, John So when we were doing our homework, there were actually three very clear customer challenges. First, security threats were largely spawned with from within the perimeter. In fact, four star highlights that 80% of threats originate within the internal network. Secondly, workloads are largely distributed, creating a ton of east west traffic and then lastly, network services such as firewalls load balancers. VPN aggregators are expensive. They're centralized and then ultimately result in service changing complexity. So everyone, >>so go ahead. Change. >>Yeah. Additionally, when we spoke to our customers after launching initially the distributed services platform, these compliance challenges clearly became apparent to us and while they saw the architectural value of adopting what the largest public cloud providers have done by putting a smart making each compute note to provide these state full services. Enterprise customers were still were struggling with the need to upgrade fleets and Brownfield servers and the associated per node cost of adding a spark nick to every compute node. Typically the traffic volumes for on a personal basis within an enterprise data center are significantly lower than cloud. Thus we saw an opportunity here to in conjunction with Aruba developed a new category of switching product um, to share the crossing capabilities of our unique intellectual property around our DPU across a rack of servers that Net Net delivers the same set of services through a new category of platform, enabling a distributed services architecture and ultimately addressing the compliance and uh, TCO generating huge TCO and ri for customers. >>You know, one of the things that we've been reporting on with you guys as well as the cloud scale, this is the volume of data and just the performance and scale I think the timing of the, of this partnership and the product development is right on point. You got the edge right around the corner more, more distributed nature of cloud operations, huge, huge change in the marketplace. So great timing on the origination story there. Great stuff. Tell me more about the platform itself. The details what's under the hood, the hardware. Os, what are the specs? >>Yeah, so we started with a very familiar premise, Ruba customers are already leveraging C X with an edge to cloud, common operating model and deploying Leaf and spy networks. Plus we're excited to introduce the industry's first distributed services switch where the first configuration has 48 25 gig ports with 100 gig uplinks running Aruba C X cloud native operating system. Pensando A six and software inside enabling layer four through seven staple services you want to elaborate on. >>Let me elaborate on that a little further. Um, you know, as we spoke, existing platforms and how customers were seeking to address these challenges were inherently limited by the diocese and that thus limited their scale and performance and ability in traditional switching platforms to deliver truly stable functions in in a switching platform. This was, you know, architecturally from the ground up. When we developed our DPU 1st and 2nd generation, we delivered it or we we we built it with staples services in in mind from the Gecko. We we leverage to clean state designed with RP four program with GPU, we evolved to our seven nanometer based DPU right now, which is essentially enabling software and silicon and this has generated a new level of performance scale flexibility and capability in terms of services this serves as the foundation for or 200 gig card where we're taking the largest cloud providers into production for. And the DPU itself is designed inherently to process state track state connections and state will flow is a very, very large scale without impacting performance. And in fact, the two of these deep you component service, their services foundation of the C X 10-K And this is how we enable states of functions in a switching platform. Functions like stable network network fire walling, stable segmentation, enhance programmable telemetry. Which we believe will bring a whole lot of value to our customers. And this is a, a platform that's inherently programmable from the ground up. We can we can build and and leverages platform to build new use cases around encryption, enabling state for load balancing, stable nash to name a few. But the key message here is this is this is a platform with the next generation of architecture is in mind is programmed but at all levels of the stack and that's what makes it fundamentally different than anything else. >>I want to just double click on that if you don't mind before we get to the competitive question because I think you brought up the state thing, I think this is worth calling out if you guys don't mind commenting more on this state issue because this is big cloud. Native developers right now want speed, they're shifting left at the Ci cd pipeline with program ability. So going down and having the program ability and having state is a really big deal. Can you guys just expand on that a little bit more and why it's important and how hard it really is to pull off. >>I I can start I guess. Well um it's very hard to pull off because of the sheer amount of connections you need to track when you're developing something like a state, full firewall or state from load balancer. A key component of that is managing the connections at very, very large scale and understanding what's happening with those connections at scale without impacting application performance. And this is fundamentally different. A traditional switching platform regardless of how it's deployed today in a six don't typically process and manage state like this. Memory resources within the shape aren't sufficient. Um the policy scale that you can implement on a platform aren't sufficient to address and fundamentally enable deployable fire walling or load balancing or other state services. >>That's exactly right. So the other kind of key point here is that if you think about the sophistication of different security threats, it does really require you to be able to look at the entire packet and more so be able to look at the entire flow and be able to log that history so that you can get much better heuristics around different anomalies. Security threats that are emerging today. >>That's a great great point. Thanks for bringing that extra extra point out, I would just add to this, we're reporting this all the time when silicon angle in the cube is that you know, the you know, the the automation wave that's coming with around data, you know, it's the center of data now, not date as soon as we heard earlier on with the presentation data drives automation having that enabled with state is a real big deal. So I think that's really worth calling out now. I got to ask the competition question, how is this different? I mean this is an evolution, I would say it's a revolution you guys are being humble um but how is this different from what customers can deploy today >>architecturally, if you take a look at it? So we've, we've spoken about the technology and fundamentally in the platform, what's unique in the architecture but foundational e when customers deploy stable services, they're typically deployed leveraging traditional big box appliances for east west or workload based agents which seek to implement stable security for each East west architectural, what we're enabling is staples services like fire walling, segmentation can scale with the fabric and are delivered at the optimal point for east west which is through the Leaf for access their of the network and we do this for any type of workload. Being deployed on a virtualized compute node being deployed on a containerized, our worker node being deployed on bare metal agnostic of topology. It can be in the access layer of a three tier design and a data center. It can be in the leaf layer of the excellent VPN based fabric. But the goal is an all centrally managed to a single point of orchestration control which William we'll talk about shortly. The goal of this is to to drive down the TCO of your data center as a whole by allowing you to retire legacy appliances that are deployed in in east west role, not utilized host based agents and thus save a whole lot of money. And we've modeled on the order of 60 to 70% in terms of savings in terms of the traditional data center pod design of 1000 compute nodes which will be publishing and as as we go forward, additional services as we mentioned like encryption, this platform has the capability to terminate up to 800 gigs of line, right encryption, I P sec VPN per platform state will not load balancing and this is all functionality will be adding to this existing platform because it's programmable as we mentioned from the ground up. >>What are some of the use cases lead and one of the top use case. What's the low hanging fruit? And where does this go? Service providers enterprise, what are the types of customers you guys see implementing? >>Yeah, that's what's really exciting about the C X 10,000 we actually see customer interest from all types of different markets, whether it be higher education service providers to financial services, basically all enterprises verticals with private cloud or edge data centers for example, could be a hospital, a big box retailer or Coehlo. Such as an equity. It's so it's really the 6 10,000 that creates a new switching category enabling staple services in that leaf node, right at the workload, unifying network and security automation policy management. Second, the C X 10,000 greatly improved security posture and eliminates the need for hair pinning east west traffic all the way back to the centralized plants. Lastly, a Shane highlighted there's a 70% Tco savings by eliminating that appliance brawl and ultimately collapsing the network security operations. >>I love the category creation vibe here. Love it. And obviously the technical and the cloud line is great. But how do the customers manage all this? Okay. You got a new category. I just put the box in, throw away some other one. I mean how does this all get down? How does the customers manage all this? >>Yeah. So we're looking to build on top of the ribbon fabric composer. It's another familiar sight for our customers which already provides for compute storage and network automation with a broad ecosystem integrations such as being where the sphere be center as with Nutanix prison And so aligned with the c. x. 10,000 at G. A. now the aruba fabric composer unifies security and policy orchestration and management with the ability to find firewall policies efficiently and provide that telemetry to collectors such a slump. >>So the customer environments right now involve a lot of multi vendor and new frameworks cloud native. How does this fit into the customer's existing environment? The ecosystem. How do they get that get going here? >>Yeah, great question. Um our customers can get going is we we built a flexible platform that can be deployed in either Greenfield or brownfield. Obviously it's a best of breed architecture for distributed services were building in conjunction with the ruble but if customers want to gradually integrate this into their existing environments and they're using other vendors, spines or course this can be inserted seamlessly as a leaf or an access access to your switch to deliver the exact same set of services within that architecture. So it plugs seamlessly in because it supports all the standard control playing protocols, VX, Lenny, VPN and traditional attitude three tier designs easily. Now for any enterprise solution deployment, it's critical that you build a holistic ecosystem around it. It's clear that this will get customer deployments and the ecosystem being diverse and rich is very, very important and as part of our integrations with the controller, we're building a broad suite of integrations across threat detection application dependency mapping, Semen sore develops infrastructure as code tools like ants, Poland to answer the entire form. Um, it's clear if you look at these categories of integrations, you know XDR or threat detection requires full telemetry from within the data center. It's been hard to accomplish to date because you typically need agents on, on your compute nodes to give you the visibility into what's going on or firewalls for east west flaws. Now our platform can natively provide full visibility in dolphins, East west in the data center and this can become the source of telemetry truth that these Ml XT or engines required to work. The other aspects of ecosystem are around application dependency mapping the single core challenge with deploying segmentation. East West is understanding the rules to put in place right first, is how do you insert the service uh service device in such a way that it won't add more complexity. We don't add any complexity because we're in line natively. How do we understand that allow you to build the rules are necessary to do segmentation. We integrate with tools like guard corps, we provide our flow logs a source of data and they can provide rural recommendations and policy recommendations for customers around. We're building integrations around steve and soar with tools like Splunk and elastic elastic search that will allow net hops and sec ops teams to visualize, train and manage the services delivered by the C X 10-K. And the other aspect of ecosystem from a security standpoint is clearly how do I get policy from these traditional appliances and enforce them on this next generation architecture that you've built that can enable state health services. So we're building integrations with tools like toughen analgesic third party sources of policy that we can ingest and enforcing the infrastructure allowing you to gradually migrate to this new architecture over time >>it's really a cloud native switch, you solve people's problems pain points but yet positioned for growth. I mean it sounds that's my takeaway. But I gotta ask you guys both what's the takeaway for the customers because it's not that simple for that. We have a complicated >>Environment. I think, I think it's really simple every 10 years or so. We see major evolutions in the data center in the switching environment. We do believe we've created a new category with the distributed services, distributed services, switch, delivering cloud scale distribute services where the local where the workloads were side greatly simplifying network security provisions and operations with the Yoruba fabric composer while improving security posture and the TCO. But that's not all folks. It's a journey. Right. >>Yeah, it's absolutely a journey. And this is the first step in in a long journey with a great partner like Aruba, there's other platforms, 100 or four gig hardware platforms we're looking at and then there's additional services that we can enable over time allowing customers to drive even more Tco value out of the platform and the architectural services like encryption for securing the cloud on ramp services like state for load balancing to deploy east west in the data center and you know, holistically that's that's the goal, deliver value for customers and we believe we have an architecture and a platform and this is the first step in a long journey. It's >>a great way. I just ask one final final question for both of you. As product leaders, you've got to be excited having a category creation product here in this market, this big wave. What's what's your thoughts? >>Yeah, exactly. Right. It doesn't happen that often. And so we're all in, it's it's exciting to be able to work with a great team like Sandu and chain here. And so we're really excited about this launch. >>Yeah, it's awesome. The team is great. It's a great partnership between and santo and Aruba and you know, we we look forward to delivering value for john customers. >>Thank you both for sharing under the hood and more details on the product. Thanks for coming on. >>Thank you. Okay, >>the next evolution of switching, I'm john furrier here with the power of An HP, Aruba and Pensando, changing the game the way customers scale up in the cloud and networking. Thanks for watching. Mhm.

>>Mhm. >>The company Nutanix was founded as the world was coming out of the financial crisis in 2009 Cop Computing was still in its infancy but had shown the way for what was possible with automation and simplification of infrastructure provisioning and management at scale. Now what Nutanix did is it brought cloud concepts to data centers and created the market for hyper converged infrastructure, a software defined architecture that eliminated stovepipes in the heavy lifting Associated with traditional compute networking in storage management. Now in the first part of the next decade, Nutanix essentially set the standard for this new world, building a loyal customer base, reaching escape velocity and successfully going public in 2016. Fast forward to 2021 and much has changed. Cloud is no longer knew rather it's become a staple of the digital economy as we exit the isolation economy. The cloud is much different today. It's expanding to on prem and out to the edge. New connections are being made in hybrid and across cloud models and as such, connecting and managing infrastructure across these new clouds to create a facile experience for users irrespective of where the data lives. Has become a major priority for organizations. They don't want to waste time and money on making the plumbing work. But that's easier said than done as the market is evolving. So is Nutanix to meet these new customer challenges and opportunities and with me ahead of dot next the major event of the year for Nutanix customers is Monica Monica Kumar who is the senior vice president of marketing and cloud go to market for the company Monica always great to see you welcome back to the cube. >>Thank you so much. Dave I'm so happy to be here again. >>Okay, so you heard my little narrative upfront, what's your perspective on the cloud market and where your customers are in their journey? >>Well, as you said, Dave Cloud is a critical enabler for rapid growth for organizations now, it's no longer just uh you know, nice to have, it's become a must have for organizations to survive and thrive in this digital economy. Uh In fact I follow a lot of um surveys that are happening around cloud adoption and one of the key trends that's coming out is it's no longer just about I. T. Practitioners adopting cloud. In fact, 78% of C. X. O. S are looking to cloud to speed up transformation of the entire businesses. You know, 80% of business executives are looking to cloud to mitigate their risks of their companies and 87% of the executives view cloud as critical to achieving their corporate growth goals. So what we are now realizing is that hybrid multi cloud is becoming the preferred model Which means there is no one cloud that customers are using, they're using the right cloud for the right workload. In fact, according to Gartner Group, 81% of public cloud users are using more than two providers. So what's happening is increasingly businesses are relying on multiple public clouds and on premises to meet their needs and are looking for that flexibility and that's delivered by different cloud providers. Um We've done our own survey called Nutanix Enterprise cloud and that we do it every year and 86% of respondents in the last service said hybrid cloud is the ideal operating model. So the Net Net that we're hearing from our customers is cloud is not a destination, it's an operating model. Customers want the right cloud for the right workload and the right applications. >>Okay, awesome. So the world, great setup. Thank you. So the world is moving to multi cloud. I think there's not no debate on that and that is really the mainstream. That's the norm. Talk about where Nutanix fits into this new world. >>Absolutely. So we're at an inflection point as organizations are grappling with this complexity. Now, obviously you can imagine the more computing environments to use this complexity in running and managing those hybrid solutions across multiple clouds. When Nutanix is focused singularly on is making that cloud complexity invisible. So our customers can focus on their business outcomes. We are solving the complexity of running and managing multiple clouds, just like we did for infrastructure and data centers a decade ago when we first started as a company. Now with the Nutanix start platform enabling our customers to seamlessly connect their private and public clouds simply move applications, data licenses across any cloud, optimize the work replacement and costs all while leveraging a consistent set of services, tools and processes. So for us it's really, really crucial that we give customers the choice to pick the hardware. Of the choice, the cloud of their choice, the virtual machines, they want to deploy the containers and data and help them realize their entire hybrid multi cloud strategy. It's all about giving our customers that peace of mind to deploy and operate the apps and data across multiple clouds with ease and flexibility. >>All right, let's talk about dot next my I think I'm pretty sure my first dot next was the first one ever, which I think was 2015. It was pre I P O. The focus is obviously evolving what's the focus this year? >>Well, dot next has evolved to become the industry's leading hybrid multi cloud conference. It's almost here. It's taking place next week, september 28th, 23rd and this year's event will bring together it and cloud professionals from around the globe to explore the latest trends, solutions, best practices and hybrid, multi cloud technology. Now we're obviously gonna, you know, future a lot of thought leaders from within the industry as well as in general, you know, people that impact our lives in a positive manner. And we're going to really focus on topics around hybrid multi cloud hyper converged infrastructure, private cloud ABM organization, you know, kubernetes containers, how do you figure out which after deploy where? So you're gonna see a lot of focus on hybrid multi colored solutions this year we're going to have lots of real world stories, hands on labs, best practices for practitioners. And again as I said all the tools that attendees need to go back and then put to practice some of the hybrid multi cloud strategies that they would learn and dark next >>talk a little bit more Monica about the what's in it for me for for attendees, what can they expect? What are they going to be able to take away from from this conference? >>Well, so as I said, a conferences both for business leaders and I. T. Leaders and practitioners. So for the business leaders, as I said, they'll get to hear from the latest industry visionaries around where the world of cloud is moving to, what are the latest and greatest innovations and hybrid multi cloud technologies uh and how can they make the businesses more competitive? How can they, you know, create more business value for the organization by using these technologies. For the IOT practitioners, they will go away as I said, learning from their peers in how they are adopting cloud, what are some of the myths around cloud computing. Get some information on deployment details and the benefits some of the piers are realizing since they moved to new tenants for example, in general, since they've adopted, you know, hybrid multi cloud solutions, they will also be able to connect with their industry peers, access democrat pounds. Uh in fact one of the major uh spotlights and not next will be the test drive live uh practitioners can get hands on our technology and really test drive it during the event itself and learn how to create a hybrid cloud within an hour, learn how to deploy databases with a click of a button for example, so lots of great goodies there and oh by the way we have some amazing external speakers as well besides our own, you know engineers, executives and so on. We have a whole roster of third party speakers too. >>That's awesome. Now, you know, one of the other things too is one of the ways you were able to reach escape velocity as a company is you had a strong partner ecosystem I presume is going to be a partner network participating as well. >>Yes, absolutely, thank you for reminding me about that partnerships is very, very, very, very important in Nutanix. You know, it does take a village, we have a full day dedicated to our partners and partner technology and solutions. It's called the part exchange. It's on Monday September 20, so again we hope that you all will participate but also you'll see partners are embedded uh in our september 21st and 22nd agenda and programme as well which is the main two days of dot next. So partners are in our life and blood, they're part of our ecosystem. >>That's great. What's next for Nutanix as you head into 20, >>Well before I go there, I do want to focus on a couple more featured speakers. So for those of you who are interested in cybersecurity, we will have Theresa Patton, who is the first female white house C I O and a leading cybersecurity expert. She'll be speaking. I'm actually interviewing her as well. We have Rachel, so johnny who is the founder of Girls who code and marshall plan for moms. We have Gary Vaynerchuk who's the ceo of Winner Media who is an author and entrepreneur. So I do hope that folks will plan to join if not for the core hybrid, multi colored content but also for these amazing speakers and last but not least. Hey, if none of this excites you then we do have some amazing entertainment. We have john taylor of Duran, Duran and the electric fondue coke, Romeo also headlining our day to keynote. >>So fantastic. I love it. Okay, go ahead please. >>Well I was gonna say so now let me talk about So what's next? Well for us, what's next is really helping customers realize their full hybrid, multi cloud strategy and empower them to make the right cloud decisions. So in fact one of the things you're gonna see us launch next week is also a new brand campaign. It's called cloud on your terms and you'll see that all over plastered all over dot next and so on. We are fully invested in our customer success to help them build, run and operate anywhere to help them easily migrate to public cloud or stay on premises if they choose to. And ultimately to make cloud complexity invisible for our customers, >>you know uh cloud your way kind of thing. I love that. And I and I failed to mention one of the first conferences I went to next, I met some developers and I was like whoa, cool. Because you guys one of the first that really truly do infrastructure as a code and bring that on prem and now it's going across clouds. So September 20 you kick off the partner day, is that right? And then the big keynote start the 21st right >>And go through the 20 >>third. Yes, >>yes. And we have a lot of on demand content as well around the keynote. So it's gonna be a packed packed set of agenda and days and you can choose whatever content you want to attend and participate in. >>Excellent. You guys always put under great program so go there register, we'll see you there, Monica. Always a pleasure. Thanks so much. >>Thank you so much for having me. I really appreciate it. >>All right. And we'll see you at dot next. This is Dave Volonte for the cube. >>Mhm mm

>> From theCube Studios in Palo Alto in Boston, bringing you data driven insights from theCube and ETR, this is breaking analysis with Dave Vellante. >> As we reported in our last episode tech spending overall continues to be significantly muted relative to 2019. Now, our forecast continues to project a 4 to 5% decline in 2020 spending, and a tepid 2% increase in 2021. This is based on the latest data from ETR surveys of CIOs and other it buyers. Nonetheless, there continues to be some sectors and vendor bright spots in what is generally an overall challenging market. Hello everyone, and welcome to this week's Wikibon Cube Insights powered by ETR. My name is Dave Vellante, and in this breaking analysis, we welcome back Erik Bradley from ETR to provide added color from my solo flight from last time. Erik always a pleasure to see you, thanks so much for coming back in theCube. >> I always enjoy it. Happy Friday Dave, We're almost through. >> Happy Friday. They just blend together. Guys, if you would bring up the first slide, I just want to summarize the situation. This is from ETR's latest findings, I just extracted some. And I want to go down very quickly, Erik, and then get your take. As I said, technology buyers expect the downturn for 2020, but this quarter, coming into fourth quarter, minus 3.2% was ETR's forecast, that's year to year spending decline and a 2% uptick in 2021. Now, Erik this is slightly, what I call it slightly less bad, relative to last quarter. So sequentially it's less bad. >> Yeah, there's a couple of things to break down there. So first to begin with, beginning of the year, when we launched not only our spending attention surveys, we did a simultaneous COVID impact survey, and that's where we caught originally a 5% decline was expected. So although negative 3.2 was probably the worst quarter over quarter lapse we've seen, as a matter of fact it is the lowest drop we've had theory, going into 2021, the IT people that we've actually surveyed are actually expecting a 2% increase. So there is a reason for optimism, but if we're looking at the current data set, there is no doubt the picture remains a little bit bleak. We can go into different sectors and vendors where they are impacted, but I think maybe if you're willing, I think it might be worth just sort of breaking down the demographics of the survey a little bit and how we got to that 3.2% survey over survey decline. >> Yeah, and we have a chart on that. But before we get that, I just wanted to lay out some of the other key points of your analysis. The other one, which is we talked about this in the last episode, we call it a slow thawing. Hiring an IT project freezes are thawing, with fewer companies expecting layoffs. So that gives us some bright spots, but there are definitely a widening bifurcation between vendors gaining share and those who are donating share. And then, you know, again, relative to last quarter survey we're seeing government and education and fortune 100, you guys are showing the deepest cuts from the last survey. Where's IT Telco, retail and retail consumer are showing a little bit more stability. And then of course you talked about the work from home which we've covered doubling from pre pandemic. Pretty interesting findings from your COVID survey. >> Yeah, it's a fantastic, and this is the fourth iteration of this survey that we've done now. So we've been able to track it very quickly, launched it in the field when we realized the true impact of what was happening in early March. This is our fourth version, and we've been able to track it overall. Yes, without a doubt government, education are being the biggest impact, the biggest declines without a doubt. Now, clearly the caveat to that is if there's any sort of government policy maybe those could actually help a little bit, but for right now, those are getting hit the most. Retail consumer is fairing much, much better, and the IT companies, as generally, we're seeing in the market as well, they can, you know, are still spending money and still moving. But the reason for optimism actually comes from multiple metrics. And I will say, we have caught a bottom on all of the negative metrics at this point. Now, who knows what will happen the next time we do it, right? The world is always fluid. But based on this, this is our fourth iteration of this survey, whether it be IT projects being frozen, whether it be layoffs, whether it be just overall expected budget increase, everything looks like it is already bottomed and there is some optimism going into 2021. Of course, the January survey that we launched will be able to corroborate that hopefully, and we'll have much more granularity into those findings at that time. >> Great. Okay, now let's get into the demographics that you referenced for. This next slide shows those. The record number of respondents Erik, congratulations on that. And so take us through the makeup of the survey respondents guys, if you bring up this next slide. >> Yeah. So for the October 20, what we're really doing here is we're asking the it decision makers to update the survey responses they gave us in July. We're basically saying, okay, you thought you were going to spend this in the back half, what did you actually do? And in this particular survey we had 1,438 qualified IT decision makers get involved. That's 60% of the fortune 100 is represented, almost a quarter of the global 1000, and we had about 35% of the fortune 500. The industry breakdown is all across the board, whether it's financials/insurance, IT/Telco, we have industrials/manufacturing, we have energy/utilities, we have government. So it's really a great cross section. Now, geographically, that tends to be about 80% North America. We are heavily concentrated in that area, but we also have a 12% EMEA, 5% APAC and remainder is Latin AmErika. If there were any visibility concerns at all would probably be in China. It's just not that easy to get qualified IT decision makers from China to respond to us. But that's an area we are working on going forward, but overall a huge survey response, certainly meaningful end, and we're very happy with the data that we collected this time. >> Okay, thank you for that. Now, I want to go into the next graphic here, and I want to look at how net score has changed over time. And I want to remind people that, so this slide basically goes back to 2016, and shows some ebbs and flows and then some real strength coming in, 'cause you see 17 and 18, and you may forget going into Q4'19 and into 2020, the ETR data was telling us, hey, things are going to slow down a little bit. It's hard to remember that. And so, and the thinking back then was okay, last couple of years, people have spent a lot on digital transformation, and would a lot of experimentation, they were hanging on to their legacy stuff, and with all that technical debt and they were experimenting with a lot of the new technologies. And what we saw coming into Q4 2019 was people beginning to unplug some of that and making bets basically, unplugging some of the legacy stuff. Oh, and by the way, maybe saying hey, the new stuff that we tried didn't work, we're going to do less experimentation. So we saw a somewhat depressed next score, and you can see that in here coming into 2020, and then of course COVID hit and you can see the bottom fell out. But wow what a drop, I mean, that says it all, a lot different than what we're seeing in the stock market. >> Yeah, first of all, just a great recap on what we caught last year. Really well done. So at that time there was concurrent spending. There was a lot of proof of concepts being done. People weren't exactly sure how to transition off, how fast they were going to get into the cloud, how fast they could make that digital transformation. And they were kicking the tires on everything, and there was a ton of spend. It was the golden era of IT spending at the time. But we did catch that some of that was coming down. So what we will see now is obviously that spending was going to cool off either way, but now with the global pandemic impact hitting what we've caught, of course, is the biggest survey over survey decline. 3.2% was matched at one other point in our survey's history, but that was at very elevated spendings, so that drop was not as meaningful. When we're seeing from a more baseline that drop right now is extremely seasonal, and extremely meaningful, my apologies. Now, I do want to make a quick caveat that usually the October survey catches some seasonality, because a lot of people have expected spend in the back half that doesn't always materialize. But make no mistake, this is way beyond our normal seasonality. This trough is a real metric. >> Yeah, and when I talk to buyers and I talk to even salespeople, for if you want the truth, you'll talk to salespeople, if you can get the truth out of them, which you usually can. Sales and engineering, that's really if we want to know what's happening in companies, but they will tell you that their visibility, same with the buyers, they're saying, look, I think I'm going to spend and I think I'm going to get approval on it, but the normal buying signals, you kind of have to take with a grain of salt because it's, the buyers don't know the sellers don't really know. I mean, they think they've got reasonable visibility but things change so fast as we know. So you have to be really, really careful. All right, let's drill in to some of the sectors, and that's really the next two slides, guys, if you bring up the first of the next two. So this shows the change from July to October. So the last survey to this survey, 2020, and the green bars of July, yellow bars are October. And you can see right away, jumps out at you, container orchestration and ML and AI, and we've got some other data on this jump right off the charts. They're still elevated levels, so that's a real positive. You can see AI actually, maybe waning a bit, and I think that's probably, Erik, is a lot of it is just, you don't even see it, it's just embedded. But take us through this first chart and then we'll dig into some of these sectors. What are you seeing? >> Yeah, certainly. So from a sector breakdown point of view, that lesson, none of them were spared, let's be honest, right? There's a slow down in spending. But containers and containerization were by far the most stable. So clearly this is a priority. People are recognizing that they need to go that route. Nobody wants to be tied to any particular cloud provider. So container and containers are moving the best, they are looking about as stable as they can be. When we drill down a little bit further in there, we're seeing Kubernetes of course, Microsoft and AWS really supporting in that sector. Now, when you talk about the ones that had the biggest survey over survey declines, we are looking at ML/AI, but like you said, still elevated spend. So even though there was a big survey over survey decline, the overall spending intentions are healthy. Nobody is getting away from it. Also to corroborate that in the COVID impact study, we asked people, given the current situation where their priorities are, and unfortunately in that area ML/AI and the RPA we're actually not positioned as well. So it actually corroborates the COVID impact survey, corroborates what we're seeing here in our larger intentions. Now, when you look at ML/AI, Microsoft is still very well suited in that area. Virtualization was another big area that dropped, which was interesting because I think the immediate COVID impact and the work from home, we saw a little spike there. I think we definitely saw companies like Citrix, right? F5 and Nutanix and AWS workspaces. They all had a really good impact, positive, when we first hit, but virtualization is dropping quite a bit there. And again, no surprise, Microsoft is well positioned as well. And then lastly, enterprise content management also had a big, big drop-off, and there you're looking at Adobe Box, Open Text, those are the type of companies that seem to be having the biggest survey over survey decline and ECM. >> Yeah. And I just want to make a comment on this first of the two slides. Is you see security, it's okay, there's a little bit of decline, but there's the story of the haves and the have nots. If you're an end point security, you're in cloud security, you're in identity access management, there's some real tailwinds for you right now. You're seeing that with Octa, CrowdStrike and Zscaler, SailPoint, you know, had a really good quarter. So that's the story of kind of the, a mixed bag. If you go to the next slide, guys, what jumps out here on the second sector breakdown, and Erik you alluded to this as RPA, very elevated, although down, somewhat still, again, very elevated and cloud computing. I mean, that's all everybody wants to talk about. This is a large market that continues to grow very, very fast. >> Yeah. It's a A2 cloud, right? I mean, even the cloud, we're kind of shocked and we saw that too. But, you know, again, it's still a healthy survey at 4Cloud. Spending is still there, but what we are seeing is a pretty big survey over-serving decline that is probably, if you had to translate that, it's going to show slower growth. Still double digit growth, but slower than we expected. And interestingly in the cloud, again, Microsoft is very steady, GCP steady. We saw AWS soften a little bit, and that's something that I think we need to keep an eye on there, we are seeing some softening trends. IBM and Oracle, unfortunately, no matter how hard they push, it doesn't really seem to be making a dent, at least with our it decision makers that respond to the survey. But one thing that was interesting was VMware on AWS actually looked much, much better than VMware alone. So on the cloud side, those are pretty interesting takeaways. >> Yeah, we talked about that a couple of episodes back as the, well, couple of things to pick up on your comments. You mentioned IBM and Oracle, they're just so large, they're growing businesses are not growing fast enough and they're not large enough to offset the decline and their declining businesses. Yet they're huge, they have, they throw off a lot of cash and so maybe their stock's not going through the roof, but they're pretty stable companies from that regard. I wonder, maybe AWS is starting to hit some of those, the law of large numbers. I mean, it's still growing very, very rapidly for a 45 plus billion dollar organization, still growing well into the double digits, so it just gets harder. And then, but the other thing I wanted to pick up on is you mentioned VMware cloud on AWS, we're seeing those hybrid solutions really start to pick up the multi-cloud solutions, which I was a real skeptic a couple of years ago 'cause it wasn't really real, now becoming real. And I think when you talk to, you know this well from your Ven discussions, people are looking at options for cloud. They want multiple clouds, the right horse for the right course, they want to reduce their risk, they want to ensure exit strategies and some clouds are just better at some things than others. >> Yeah, completely agree. And as you know, I do interview a lot of these IT decision makers that we survey to get a little more granularity and to dig into the details, and you and I just, great example. We did a session on Data Warehousing as a Service, we're at Snowflake. And the main reason that people love them is 'cause they have cloud portability. They can move across multiple clouds. Nobody wants to be tied to one cloud provider, they need to be agnostic. And if you look at, you know, something like Microsoft, right? Their Software Suite is fantastic. So most people are going to be aligned for them. They provide great active directory, the enterprise applications are absolutely incredible. But if you're looking to do straight ML/AI or straight data warehousing, maybe AWS Redshift, maybe Google Big Query might be a better fit for you. There's no reason to be tied into one. So what we're seeing more and more is those vendors that offer cloud portability or hybrid availability to do some on-prem for security, some cloud, they're really taking a step up in our recent surveys. Another comment you made Dave, if I can just backtrack to it is, you kind of mentioned how some of the vendors are taking more and more share. We are continuing to see this theme of a widening bifurcation, where although the overall spend that pie is shrinking, the leading vendors are taking much bigger slices from that pie. And that is continuing across the entire year. >> Yeah, definitely a time of disruption. So thank you for bringing that up. Okay, the next graphic I want to show you is actually a motion graphic, and what we're showing here is one of our favorite views. On the vertical axis you've got net score, remember, net score, essentially ETR, every quarter like clockwork asks customers are you spending more you're spending less, it's more granular than that, but essentially they subtract the red from the green and that leaves you with net score. So the higher the net score the better on the vertical axis, on the on the horizontal is axis is market share, its presence, its pervasiveness in the dataset. So you want to be up into the right, of course, like all these charts and XY's. And what we're showing here is, we go back to October, 2018. Remember this is the October survey and you can see the movement and what's happening. And a couple of points here really is one is container orchestration and container platforms, cloud, RPA, ML, they all stand out. And now we, you can see the the context of their "market share" as well, and you see that bunching, you see some of the Legacy stuff, the more mature markets like storage and PC tablets and laptops. They don't have a huge next or outsourcing, not a big net score, but they're there and they're kind of bunched up, down in the middle. But you can also see how they've slowly got depressed over time, even the elevated ones. Nobody in the recent survey is over a 60% net net score. I think you guys said that the overall net score was the lowest in history. So this is just a good way to visualize the various sectors and how spending, momentum and share is shifting. >> Yeah, that's a very good point, and you are right. The overall survey net score is actually 25.3% and it is the lowest ever we've captured. So that actually is translating into what we expect to be single digit declines in overall growth in IT budgets, which again is in line with what we've been saying. We caught early on about negative 5 1/2, that is improved now it's in this quarter to about negative 3 1/2, but if you look at the mid point here, we're very clearly in mid single digit declines, and the entire area is being impacted. Now, there are certainly some areas that are more important than others, there's no doubt about it. But yeah, outsourcing is one you mentioned, absolutely getting decimated. Nobody really has the money right now to be doing IT outsourcing, that's just not a priority. The priority is remote connectivity, remote security, how do I get identity access and governance to make sure that my employees are doing what they're supposed to be doing, even though they're not on my network anymore. All of those things are continuing. And as you saw on the COVID-19 Impact Survey, they're not going away. You had mentioned on a solo session you did, I think a week ago, where you have cited our data saying that permanent workforce is going to double from where it was in pre-pandemic levels. So that means a lot of the people that slapped a bandaid on their networking to get their employees to work from home, that bandaid solution is not going to work. They need to find one that's permanent now. So the areas of spend, although it is declining, there are very clear delineations of where that spend is going. >> Yeah, I want to just pick up on something you said about the work from home doubling, 'cause I've shared that data with some folks and had some discussions. We're talking about people that work from home, not come in a couple of times a week, this is the work from home component. And so I think the hybrid is going to increase as well, but the hardcore work from home, I think it was mid-teens, 16% or something doubling in the post pandemic was the expectation. And again, I just wanted to sort of clarify that I think your data there is quite good. How about some of the vendors? I think, now that's Snowflakes public, you guys may be doing some forecasts there. Let's start there. >> Sure, yeah. So it's fun to talk about the high level, right? And talk about the sector breakdown and where we're seeing things, but at the end of the day, people just love to talk about the individual vendors. So there's a few things that were interesting, yeah. We were able to finally come out with a real viewpoint on Snowflake now that they're out in public, and we kind of launched with a positive to neutral viewpoint. I don't think there's going to be anything here that shocks you. We're absolutely outstanding expansion rates. All the commentary we get from our CIOs are just incredible, the market share gains are about as high as you're going to see in the survey, they are extremely well positioned to continue executing, and this is not in the data set, but we also know that that management team is fantastic. I would think that they had set themselves up coming out as a public company not to completely disappoint. And everything in our data set shows absolutely no reason why they would disappoint. >> Well, and so you may be wondering folks, like, well, wait a minute, with all that great news, I mean, how could they be positive to neutral. Maybe it maybe neutral, the reason is because they have a 66, roughly $66 billion valuation. And what ETR is doing is they're taking that into consideration as well relative to, so they're looking at the street forecast, the consensus forecast and saying, okay, how does the data line up to that? And so a lot of people are asking the question, can Snowflake live up to its valuation. I don't think there's any lack of total available market here. I mean, it's very, very large, the data market, it's enormous. And as, just a plug for an event that we're doing on November 17th, it starts, we're doing a global event, and we're going to be looking at this issue very closely, interviewing customers and partners and executives and, you know, you can judge for yourself if you think the vision, they're putting out this vision of a data cloud. You see this, if this vision, you think is going to have a big enough term that they can grow into, and as Erik said, great management team, will they be able to execute? Decide for yourself, but very exciting IPO obviously that we've tracked quite closely. Elastic is another one that you guys have followed quite closely. I know you've got some data there that you want to share as well. >> Yeah, I certainly do. The APM spaces is really interesting. One last quick point on Snowflake. We don't have regression forecasts on them, because they haven't been out public long enough for us to be able to do that sort of back-testing. So without that data science behind us, we will never really go with a full positive. So to your point that saying positive to neutral is not negative or neutral stance whatsoever, it's just without that regression support behind our data, that's what we just tend to do. Because at the end of the day, we're a data science company, so.. >> Yeah. You need some some history there to really make those calls. But yeah, let's talk about Elastic. >> Yeah, sure, you got it. So recently I hosted a panel on the APM and monitoring space. It was incredibly enlightening. It's a very crowded space that our CIOs told us is right for disruption. And it ended up being a little bit of an avalanche in our data, because it wasn't just Elastic, but it was also Splunk and Dynatrace that we ended up putting ratings on. Now, Elastic as we know is an open source model, a freemium to pay type of model. And we normally try to stay away from open source models, 'cause it's kind of hard to predict how that converts to revenue, but the data was so strong that again, we came out with a positive to neutral rating on Elastic. It was based on just elevated spend levels across, there was almost no negativity, we weren't seeing any decrease or replacement indications, really solid positioning in the fortune 500 accounts, which I was a bit surprised about. And the other thing here is that Elastic tends to be really expanding in the information security. This is no longer just about monitoring and logging, they are becoming a very relevant infosec play and they are breathing down the necks of Splunk. They can do the same thing and they can do it much cheaper. The caveat being, you need to have the IT and the human skillset to run Elastic. So it really comes down to, are you sophisticated enough with the human capital management to run it? But everything we saw here just incredibly improved competitive positioning, they actually had the number one net score in all of information security in any vendor that had over 50 citations. It was just too hard to ignore, we had to come out with a positive neutral. >> That's super interesting Erik, and of course, yeah, we covered that space recently. Everybody wants a piece of Splunk and have for a number of years, but, you know, you see in Datadog come after it, then you see some startups getting into the space. Jeremy Burton launched his company, Observe, Honeycomb is in that, they kind of coined the term observability. Kakao Search is another one. Ed Wall's joined that company, and so you see a lot of folks really going after that space, why not? I mean, it's such a successful company. The pickup of SignalFX filling some holes, we talked about that on the Ven, and it's a very interesting space, and one I think has some somewhat depressed levels from a net score standpoint but as some of your Ven observers said, this market is here to stay and it becoming much more important as part of digital transformation, as part of a dashboard of digital transformation. >> Yeah. Coining that term observability really just hit it on the nail on the head. When we just talked about monitoring an application, that's not what it's about anymore, right? You need to have observability in multi hybrid cloud environments, whether it's your infrastructure or people actually writing code for your application. And so that single pane of glass, end-to-end is the holy grail of monitoring, and that's what these guys are pushing for. The New Relics, the Datadog's, the Elastics, they're getting there more quickly than Splunk and Dynatrace or AppDynamics from Cisco are. That's what the people are telling us, the ones I speak to, the CIOs that use it in the field. They're getting there more quickly and they're doing it more cheaply. Now, this is not to say Splunk is not a great company, we know it is. And also Splunk has more API integration into any ecosystem you want. They're not getting pulled or ripped out anytime soon, we're not saying that. But when we look at our data, we had no choice but to come out with a neutral to negative. They are deteriorating and their spending intentions, their customer growth is completely stalling, we're not seeing any more increased perversion in our dataset or among customers. There just wasn't really anything we could really do. Looking at the data set and that's what we do, we had no choice. There's a lot of skepticism heading into the back half of this year and next year, there's so much competition coming after them, and some of these people are just giving it away for free. It's pretty hard to compete with free. >> Yeah, free is very powerful. All right, speaking of skepticism, Rackspace had their IPO, what do you see in there? >> Oh man, I'm not really sure how to start there. But listen, I don't want to beat a company while it's down, but their net scores are actually negative. I think at the negative 20% range, if I could possibly recall that. But listen, Rackspace, when they were private, let's give them some credit, right? They decided to go out and buy a bunch of different managed service providers, they tried to align themselves with AWS, with Oracle. So they've got this whole bundle thing right now that isn't just straight cloud computing anymore. We'll see if that plays out. But clearly we saw that the IPO was not a very special IPO. In this environment the valuations in the technology stocks being very elevated, having a negative IPO was very telling. But sticking straight to the data, basically we're seeing negativity across several years, it's the worst position vendor in cloud computing that we even cover. We just had to take a look at it right now, and just be honest and say according to the data, this is a very negative data set, there just isn't much we can do about it. Wish them the best, I hope their MSP revenue starts kicking in, and hopefully it'll change. But for right now the snapshot of our data was quite dire. >> Okay, Erik, Well, thanks so much. So let's update folks, so the ETR is exiting, it's quiet, period, which I love, because that means I can have the data and share with you. So we'll be updating our cloud scenarios, security, automation, our infrastructure, and many other segments as well. Certainly the data piece, we've been tracking snowflake very closely. And of course, Erik, you guys are already gearing up for your January survey. So, you know... >> It never ends Dave. And I've... >> Well, I got a really... I've got a sizzle panel that I'm doing next week as well, where we got four sizzles talking about security threats and priorities for 2021. So as soon as I wrap that, you'll be the first one I get my summary to. >> Oh, those are great. I mean, there's such deep dives with practitioners, and it's just an open discussion. So Erik Bradley, thanks so much for coming back in theCube. >> Have a great weekend Dave. >> Yeah, you too. And thank you for watching everybody this episode of Cube Insights powered by ETR. Go to etr.plus, that's where all the survey action is. I publish every week on wikibon.com and siliconangle.com. All these episodes are available on podcast. Wherever you watch, you can DM me, I'm @DVelllante. I post on LinkedIn, you can comment there or email me @david.vellanteat, @siliconangle.com. This is Dave Vellante for Erik Bradley. Thanks for watching everybody, we'll see you next time. (upbeat music)

>>From around the globe. It's the cube with digital coverage of Veem on 2020 brought to you by beam. >>Hi buddy. Welcome back to Veem on 2020. My name is Dave Vellante and you're watching the cubes coverage of EMR. This is the first time we've done it. Virtual VIMANA. We've got the, the Veem power panel, bill large and CEO, Jim Kruger, the CMO, Danny Allen. Who's the CTO and senior vice president product strategy. All I have been on earlier guys. Great to see you. Thanks for coming back. digging out of the power panel. Appreciate it. Good. Thank you. Okay. I want to start off a bill. you're going to get a business update, you know we've so I talk a lot about COVID. We can go back to that, but you guys, Mmm. You know, as a private company, you divulge more information. Yeah. Then most private companies. And we appreciate that as an independent guys, if you would bring up that, that one slide, you know, you shared this publicly well earlier. >>I mean, you guys are in a, okay. Billion in revenue now, 21% annual recurring revenue growth. We're going to 75,000 customers, 97% year on year increase in your universal, uh, license bookings. Mmm. Everything seems to be happening. Bill. What, uh, what can you tell us? Well, we had eight. Yeah. We had a great first quarter also that we kicked off where we had, or a transaction with, um, insight venture partners, which, and written the middle of a right in the middle of that quarter. At the end of it, we had that activity that went on, I think would have disrupted, did the business. It didn't land for Q1, really excited about that. We announced our growth, so that here recently, uh, pumped into our row pumped into our second quarter. We, we managed to transition everybody out of offices. We probably add seven per cent of our work for 75% of our work course. >>It needs to move. Yeah, they did that. We had a fantastic April. We're having a very good may. So it's just a great start, uh, with a great customer base. So I'm really excited about it. Okay. You mentioned insight. We obviously covered that. Mmm. Boarded on that. Okay. Insight. They like growth, you know, not like the old school, private equity, you know, suck money out. They want growth options down the road, personality. Maybe it's a rule of 40 rule, you know, the type of company. So that's gotta be exciting, uh, for you guys and your employees. Yeah. I think it's pretty exciting. We've been around a few of us. Who've been around the insight team since 2002. So, uh, a very well known a group of individuals to us. Yeah. Uh, they are focused in the software space and know the infrastructure space really well. >>Uh, my triple that hour, um, our lead on the insight team and his, um, his staff is that's move into, as we move into it, stepping up and moving into our Andrew very revenue focus versus part of a total contract. Bye. Nice. A nice resource to have for things that we might want to do in the future related acquisitions. So we're really excited about it. I mean, if I'm in VC right now, I'm looking at SAS, I'm looking and the software I'm looking for companies that have a, uh, an annual recurring revenue model I'm looking for adoption then. Okay. Okay. And those kinds of cases. Yeah. Do you guys fit that bill? Yeah. There may be a larger size and obviously the early stage startup, but that's kind of the profile of the the company that you want to invest in, in the 2020s, isn't it? >>Absolutely. And I'd also say it's the kind of company we want to invest in, in the future as we go forward to bring in new technologies and expand markets, addressable market, uh, back to comments, we had discussions owner, what's it look like in 2030? And it's like, yeah. Places we're heading. Yeah. Okay. So Danny, Pat Gelsinger is famous on the cube for saying that, look, if you don't ride the waves, can it be yup. Driftwood. So what are the mega trends that you guys are riding, uh, today and that you're seeing in the future? Good. We'll keep you ahead of the pack. Well, we clearly talk a lot about cloud data management. So act two for us is not just moving from perpetual licensing to subscription and evolving with American at a business level. It's also at a technical level. And so we invested heavily, as you know, we demoed earlier today, Veeam backup for office three six, five version. >>Hi, an important point act two for us is not just product. There's also product delivery. That's version, hi of a relief of a product to chemo three years ago. So the backup profits, three 65, we showed you Veem backup for AWS. And you saw from Anton as well, uh, supporting Google cloud storage and supporting all of the major, um, providers. So for us to not just ride the wave, but actually be ahead of everyone else it's to embrace cloud data management and give the customers what they really need. Well, I think you guys are in a unique position too. I mean, you know, if you're, if you, you guys obviously sell on prem, but if you're, there are not prem infrastructure, the company that really living on box margins, um, you know, you can talk the cloud talk, but it's not necessarily a tailwind. Where are you guys? >>So Danny, how is cloud, wait, how cloud is it tailwind of, you know, versus some of the other legacy players? Well, Veem has always been, we always highlight simple, flexible, reliable, but one of the, the parts of flexible of course, is being software defined. And we've been software defined from the very beginning. And if you're in a world where you have to go take a box, plug it into the data center and rack and stack it and do hi, okay. Be there physically. You're not going to survive in this type of environment. So being software defined help desk, not only when the data center, but to help our customers as they go through that evolution. Okay. On prem too, maybe just storing backups in the cloud to actually running their workloads in the cloud. >>Well, so Jim, I want to, I want to turn it to you sort of, I'm thinking about the Veeam brand. Uh, I, we talked earlier about how you guys have always punched above your weight, famous parties and sofa, but now billion dollars now entering a new era. Oh, wait. Yeah. It's ironic that we're now doing virtual events. Okay. No big giant party this year, but I feel like, I mean, you guys are what 14 year old company now. Okay. Kind of growing up your three and your colleagues are bringing, you know, lots of adult supervision. How should we think about, okay. Okay. The or V brand going forward. Yeah, no, I think the, the beam brand is critically important because, uh, there's just a, such a strong affinity and connection with customers. And I think one of the challenges as you get larger and go from 1 billion to 2 billion, a lot of companies miss the beat relative to staying connected to their customers. >>And that's something that we're putting a tremendous amount of focused on that first slide that you see, you flashed up no 91% customer satisfaction, the 75 net promoter score, which is three and a half times industry average. I think our key to success is, is not only bringing great products, the market, but looking at the holistic picture relative to supporting customers and customer satisfaction, which is a key driver of the company. Uh, well, it will help us to continue to build on the brands and, and have, you know, the, the best brand in the market. Well, I w I want to come back to, is the good, the marketing was in the, the panel. I mean, you think about digital. We feel like the war is going to be one in digital in the next a decade. I take the, you pick the GNC example and you think about just even the term, like customer relationship management, you know, we all use CRM systems. >>Yeah. I'm not sure I want to a relationship. Okay. GNC, but I do know this, I want a good deal. Right. If they're going to make me an offer, I'm going to, I'm going to look at that. And, Oh, these other brands, uh, that's digital that is having infrastructure and data, that's obviously protected to be able to offer that at the right time. Awesome. Versus if they can take advantage of it and have the candles. I wonder if you could talk about it, what you see as a, a marketing pro just in terms of digital and, and that customer intimacy. Yeah. Yeah. So, so I think it it's a multifaceted, I think one of the key things that, that, again, Veeam does, that's different than other, uh, companies is that we, we have a direct connection with our customers. So yeah, in our head of product management sends out an update every Sunday, and it goes into quite a bit of detail around sort of how to deploy this, how to deploy that. >>Oh, really? Yeah. Creating a digital journey for the customer from a marketing perspective, because yeah. Like within any situation, no, you, you don't want to talk to a salesperson right off the bat because you know, they're going to try to sell you. Uh, so you want to do something investigation, you need the, the contents and information to help you move along that journey until you get to the point where, okay, now it's time, I've kind of narrowed it down and I need to talk to someone to give me some more information. So I look at, you know, one of the key differentiators of Veem is, is that digital promise, uh, which I think from the founding of the company that rattler put into place, uh, here it is as forward. And when we continue to put a lot of focus on that digital experience, which I think gives us definitely a leg up on the competition. >>So bill, you got to place bets as the CEO. I'm interested in where you're placing bets. I mean, you've yeah. Okay. Some pretty substantial investments in the, your partner, a network. Oh, you've got some big names partners that are okay, you're moving a lot of products, you know, through those guys, obviously your heritage as a company is, is okay. Technical development. Uh, you, you are very successful sales organization, but where are you placing your chips on the table these days? And maybe especially in the context of, of this pandemic, if anything changed in your thinking. Yeah. Well, the vets will always be placed on the product side of it. Yeah. That's a, that's a big products. You go partners and you go our employees and those are the big bets that will make, what are we doing on the partner side work, continuing yeah. Pretty aggressive activity and making sure these partners have a simpler place as I've discussed. >>Yeah. Before to do business with them. It's more challenging the larger unit. Yeah. Yeah. But yeah, we'll keep that focus on it. The product offering has been, again, always go back to any of our taglines. It just works, but it's in the lab, we're going to win. We're going to win that technical decision a process. And then we're putting it up pretty big bets on our employee base. We're all over the world. 4,300. Yeah. The, uh, I think the decisions we have, like a lot of companies have moving forward are going to be, where are you going to work from? You're going to work from that home office. Are you're going to combine it back into the office or are you going to not, you're just going to do, you know, you're going to go back the way things are. I don't think that's going to happen at all. >>So, so best will always be on bringing good product to market technical decisions. So let's, let's talk to Andy about the product. Um, I mean, you've, by saying you've grown up, you've gone from yeah. Relatively narrow yup. Portfolio to now expanding a lot of different use cases, many, many, you know, several different clouds on prem hybrid. Yeah. Et cetera. Mmm. How do you ensure it, Danny, from, uh, from, uh, product stamp, right. That you don't just get a, a collection of point product that you actually have yep. Platform that even, you know, for instance, your licensing model very easily bored. Yeah. That notion, um, how, how do you ensure that you're more of a platform if you will, than just that a bunch of selection of product, the answer to that would be focused maniacal focus. So it's interesting that you brought up licensing. So one of the things that we're very focused on is making that licensing can move across all these different types of infrastructure. >>So no, the universal license allows you to do that. You can move a workload from physical to virtual, to cloud, to back, um, the application services call with, uh, with his hang the license. But we also do that product level too. One of the interesting things that we've been focused on is it's something internally, we call it the Veeam integration platform that enables you to have a central common control playing across the entire organization. But yet you can deploy in the need of environments that make the most sense. So if you think about what we showed you earlier today with beam backup rate Ws, you're running on a, an interface that you deploy out of the AWS marketplace, but that product actually integrate back into Veem availability suite. So that's true of being backup for AWS, Roger being backup from Nutanix. Every time we, we add a new one capability platform, whether it's fast or virtual or wow, we make sure that it's still cause that central connection to the main control plane. >>And that's why we call this five data management, because it gives you that data management cross all of these different infrastructures. Okay. It's clearly not easy to do, but the focus that we have put on this result, then our customers, the class. Okay. Ultimately, so I want to ask you guys about culture, Jim, a start with you. I mean, a lot of people obviously, sorry, averted or asking, I'm still going to have parties. Uh, you got your two founders and sort of, you know, set good, you know, rat mirror would always be right there in the mix lap. Last one to leave, uh, you know, very hard charging and that's kind of steep. the Veem culture, but I'm interested in, and if, if there's been any sort of discernible change, as you get bigger and bigger, how you're able to maintain that culture, you know, w what are some of the things that you want to, I want to keep, and maybe some of the things that you want to evolve. >>Yeah, no great question. And I think culture is, um, I'm a big believer. Yeah. That culture can really differentiate a company in the marketplace. And I think themes culture, uh, in the past has really done that effectively. And I think that's, you know, it shows in the success of the company. So I definitely see it as, you know, as my job, along with the rest of the executive team continued to, to carry that torch forward. Uh, one of the things that I learned coming to beam was, was really winning the hearts and minds of, of the, the, you know, the customers that you're serving. And so that, that can be anything from a party, uh, being totally open to your customers, listening to your customers. I've given them different channels to give you a feedback and just being a company that's easy to do business with. I think it's critically important. And those are some of the key things from a cultural perspective. Uh, that's how we want to carry forward. You mentioned car charging, absolutely being, being aggressive in the marketplace, uh, but bringing solutions to market that really hit the sweet spot. Oh. Relative to customer need, I think is again, one of the, the cultural pieces and that maniacal focus on customer satisfaction, which is absolutely key. >>So, uh, well, I, I wonder bill, if you could comment, maybe in this context, you know, part of your job of course, is Tam expansion traditionally been a, a European based company moving. So the U S I'm curious as to what effect that will have both culturally, you know, and on Tam as well. You're extremely successful, uh, in, in overseas. Oh, of course. So there's maybe even more penetration within the U S and obviously, you know, throughout the call, we've certainly talked a lot about cloud, but maybe your thoughts on it. Okay. Yeah, no, thanks very much. Hopefully you see no impact on culture, in the sense of our move from a European headquarters to a U S headquarters. We definitely felt it important to bring it and U S headquarters in place. We now have moved all us shareholders. Uh, so it's really our culture, but built on yeah. >>Core values back in 2012, that really the everything else branches off of innovate and iterate it's about everybody sells. We clearly add that yeah. A goal for everyone in the company and yeah. And the fact that we also want to win. So we'll fight hard to win bringing it to the U S okay. A lot of our competitors are based in the U S we think we can put up, uh, even though we've got great numbers against all our competitors, we'll even bring the fight much harder. Now that we're in the United States as a headquarter place, change nothing else internationally, globally. So Danny, every I'll five or seven years or so, you know, Gartner or IDC or whomever, but the service is that we just did a survey. Yeah. X percent of the customers are going to rethink their backup. That is in the next 24 months. >>You see that literally every half a decade. Um, so w w what's what's the driving that now, I mean, certainly cloud is a, is it which factor? Sure. Edge. We're going to be talking about the edge for the next many, many years. And then, and it's really going to start to drive revenue at some point kind of like the cloud was 10 years ago. Uh, but so talk about how you guys sort of stay relevant in that conversation and what customers should be about in terms of those transitions. Well, you know, every customer says I'm going to reevaluate my backup solution five or seven years, but the reality is what's happened. Yeah. Industry itself goes through transition. So we go from physical to virtual and as they go to virtual, for example, they say, Hey, I can't use my legacy providers. So I'm going to choose a new one. >>They choose Veeam. And then of course, we go to cloud and we're going to go to containers and we're going to go to edge. And every time he goes through those iterations, there is an opportunity four, the next generation of wow. Form, uh, to emerge. And so beam's focus here is to make sure that we're ahead of those trends to make sure we're thinking ahead of our customers. So right now, for example, you know, I, I spent an hour in order to, in the amount of time thinking about cloud and containers so that when the customer gets there, when they get the edge, when they get through all of these things, but they have a data management platform that protects them. And step one is always going to be the same. I always say the step one for, for every iteration of infrastructure is just ingest the data because you need to protect it. >>It's only after you protected and begin to manage it, be integrated into the business. Can you be into unleashed, but we go through this cycle over and over again. And ultimately it's the, it's the, the vendor, it's the partner that is most trusted, that wins as Jim alluded to our NPS scores for themselves, our customer base. Great, sorry, uh, self our, our intimacy with the customers. Great. Awesome. So, yeah, as long as we keep that close connection, then we think we're well positioned to the lead as we go through the next iteration of infrastructure. Okay. Let's talk about the competition, Danny. Let's stay with you. Okay. Okay. You've got some, well-funded not even startups anymore. Know the companies that are kind of going after the base. You've got a huge install base okay. Of legacy companies. I mean, I think it's easier for, for some of those guys to attack, you know, sort of a box space, the solution, you guys are more software, but I'm sort of interested in, in your take Danny on the shiny new toys and that have obviously have momentum in the marketplace. >>Yeah. You know, the, the shiny new toys, they come out with a solution that is very packaged up and black box. You can't actually, uh, customize it very much for the user need. And that's, we don't believe that that's going to work in the longterm. And the reason I say that, okay, the pandemic we're in, if you can't go into the data center to rack and stack a box, if you can't actually working with the infrastructure that's already in place, then you're not positioned to work well in the longterm. And, and so we have this unfair advantage we've been around for over a decade. We integrate with over 45 different it's storage vendors. That's not including the wild vendors, you know, all of our partners. And so we do have an unfair advantage with a history of all of these integrations, but, but that flexibility is really what our customers need. >>They don't want to be law into the data center. They don't know two, three years from now, their strategy might change. They might say, take the workload, moving to the cloud. And so if your whole focus is on selling your customers, something that I used them to their data center, that in itself is a challenge. And being software defined we're, we're well positioned to make future for any evolutions that happen in the market. Okay. So we're in a good place. I'm, you know, well, knock on wood, but I think we're going to keep going. Yeah. That's an interesting answer. Not one that I expected. Okay. Got it. Makes sense. In the context. Good QA we had with Andy Jassy a while ago. Yeah. Kind of pushing them on, you know, the zillion API APIs. And he basically had a similar answer. Obviously cloud services is different, but essentially saying, we don't know where the market's going. >>So we want to have very granular roll. Yeah. You're kind of a primitive level, uh, so that we have that flexibility and maybe there's trade off, you know, sometimes just in terms of what you called out of the box, but it's a very handy Jessie like answer, it sort of strikes me. Hm. Well, it's certainly true that the, you know, customers don't know a year from now, uh, they've been using that hardware, but a year from now two years from now, we run into another market impediment. They might want that money back. They might want, you might want flexibility to expand into it, different geography or take advantage of it, the advantage of the elasticity of the cloud and buying a piece of hardware. Just the very fact that you buy hardware that essentially ties you into that hardware, at least three years, probably being software defined. >>You can continue to reuse and leverage all the assets that you've already had committing to a lock-in okay. Period of time. So, so from a, from a marketing standpoint, Jim strategy, brand customer intimacy, what sure you're ready. Well, Dan, you already talked a little bit about it in terms of, uh, you know, kind of the, the three cornerstones of, of, of how we think our simplicity, flexibility and reliability. And, you know, as bill talked about, you know, when, when we get into now into a customer, and if they're testing us out trial in us out nine times out of 10, we're going to win, uh, because they see, they see those three key things and those three key things, uh, we hear on a daily basis from our customers and how important that is. So we continue to build out on each of those, uh, the challenges, keeping it simple. >>And that's an area that we have to continue to focus on. Uh, but I think those are the key differentiators for us going forward. I think the flexibility piece as the integration with all the storage, our ecosystem of partners, well, we have, I think, close to 40 partners that are sponsoring, uh, the on here. Uh, so that's a, that that's a key differentiator because we, we work with basically everybody we're agnostic, uh, and again, just easy to do business with an, a true partner. Okay. I got it. I got one more question for Danny and then I want to, I want to ask, well, it was, but okay. Guys, feel free to chime in on this one as well. But some of the things we haven't talked about, well, Danny, uh, containers protecting containers, uh, the edge, you know, these are all sort of emerging opportunities. >>I know you've got some, yes. You know, on the container side, the edge is early days. There's, you know, whole new models of, you know, potentially a lot of data going to be, we created unclear how much it's going to have to be persisted, but certainly would that much data, you know, the IDC forecasts, a lot of it's going to have to be. So your thoughts on some of those other emerging trends that we haven't talked. Okay. Well, the key to this segment of America are our partners. Trust us. We're thinking about this ahead of when they will actually need it. And you're right. I think we're early days in containers. I think we're early days in edge. We don't know, you know, we have a partner ducks unlimited where they're storing data for 60 years, use it from IOT sensors and they keep it for 60 years because they don't know in the future, if that data is going to be relevant. >>And so our focus is to make sure that we're ahead of our customer base in terms of thinking of it. And then yeah, making sure that our platform supports what they need as they need it. You want to be careful about going too far in advance sometimes in the industry to hear about, you know, people who are talking about magic 60 Dustin's solving, okay. Crazy problems that our customers don't actually have. We're very pragmatic. We want to make sure that problems that we're addressing that are platform fundamentally addresses where they are today. And then also be in those discussions with them about where they're going to be tomorrow. Well, maybe some of that magic pixie dust go, go into the COVID vaccine. That would be good. >>They'll bring us home. So, you know, the virtual forklifts are breaking down, came on 2220. What are the big takeaways from Europe? Your first Vivaan as CEO, we've been to many, um, you know, I know, but w what are the big takeaways as the, as the virtual trucks are pulling away? Yeah. Thanks very much for asking that question. We, uh, you know, we did do our first VM on, in 2014, and I can still remember when rat came, I mean said, let's, let's do this. And it's like, Oh, you've got it. Excuse me. This is going to cost a fortune. Why would we ever end? And then he's obviously right. It continues to be right. So, Hey, the story about Veem is gross. And when you're growing, you got funds available. People interested you to innovate. You mentioned containers. Danny did also at Kubernetes and, you know, we've got our forensic cast and that are here with us. >>And yeah, those are all important relationships and will continue to develop relationships. Yes. Cool., uh, we've supported, we've got great customers. we have a gross engine. We're going to continue that we don't plan on being comfortable with where we are. We'll continue to enter it in, go after it. Mmm. Additional Tam, but we'll also take care of that core base we came from. So I'm really excited about yeah. And a lot of great breakout sessions. Uh, I keep, um, right. Yeah. Coobernetti's was on, there was a lot of great ones. I did like the one though. And it was like, fall in love with tape all over again. So when I first saw that they brought it, I went running from my age, correct dates and my John Fogarty NCCR, I found one. Uh, so, uh, had to get readjusted to not. So in any event, I do think we like to have a lot of fun. >>You'll see that we get back. Yeah. Yeah. See where we go. As far as the virtual versus it, an onsite. Yeah. A in the future, we landing on site when, and if so, you'll and you're there. You'll cool. We'll be at the party. Yeah, indeed. And I, but I do think there's going to be some learnings that we carry forward and, you know, I think for awhile and maybe even perfect quite a long time, there'll be some kind of hybrid going on with the same deliver, delivering a hybrid world. Guys. Thanks so much for coming to the cube, making this a successful power panel. It was really a pleasure having you. Great. Thanks for having me. Thanks. Thank you for watching everybody. This is Dave Volante for the cube. Keep it right. There are tenuous coverage, the mom, 2024, right back.

>> From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. (intense music) >> Hi, everybody, this is Dave Vellante in theCUBE, and as you know, I've been doing a CEO series, and welcome to the isolation economy. We're here at theCUBE's remote studio, and really pleased to have Charlie Giancarlo, who is the CEO of PureStorage. Charlie, I wish we were face-to-face at Pure Accelerate, but this'll have to do. Thanks for coming on. >> You know, Dave, it's always fun to be face-to-face with you. At Pure Accelerate when we do it in person is great fun, but we do what we have to do, and actually, this has been a great event for us, so appreciate you coming on air with me. >> Yeah, and we're going to chat about that, but I want to start off with this meme that's been going around the internet. I was going to use the wrecking ball. I don't know if you've seen that. It's got the people, the executives in the office building saying, "Eh, digital transformation; "not in my lifetime," complacency, and then this big wrecking ball, the COVID-19. You've probably seen it, but as you can see here, somebody created a survey, Who's leading the digital transformation at your company? The CEO, the CTO, or of course circled is COVID-19, and so we've seen that, right? You had no choice but to be a digital company. >> Well, there's that, and there's also the fact that the CEOs who've been wanting to push a digital transformation against a team that wants to stick with the status quo, it gives the CEO now, and even within our own company in Pure, to drive towards that digital transformation when people didn't really take up the mantle. So no, it's a great opportunity for digital transformation, and of course, the companies that have been doing it all along have been getting ahead during this crisis, and the ones that haven't are having some real trouble. And you and I have had some really interesting conversations. Again, that's, I think, the thing I miss most, not only having you in theCUBE, but the side conversations at the cocktail parties, et cetera. And we've talked about IP, and China, and the history of the US, and all kinds of interesting things there, but one of the things I want to put forth, and I know you guys, Kix especially, has done a lot of work on Tech For Good, but the narrative pre-COVID, PC I guess we'd call it, was really a lot of vitriol toward big tech especially, but you know what? That tech lash... Without tech, where would we be right now? >> Well, just think about it, right? Where would we be without videoconferencing, without the internet, right? We'd be sheltered in place with literally nothing to do, and all business would stop, and of course many businesses that require in-person have, but thank God you can still get goods at your home. You can still get food, you can still get all these things that today is enabled by technology. We've seen this ourselves, in terms of having to make emergency shipments during our first quarter to critical infrastructure to keep things going. It's been quite a quarter. I was saying to my team recently that we had just gotten everyone together in February for our sales kickoff for the year, and it felt like a full year since I had seen them all. >> Well, I had interviewed, I think, is it Mike Fitzgerald, your head of supply chain. >> Yes. >> In March, and he was saying, "No. "We have no disruptions. "We're delivering for clients," and we certainly saw that in your results in the quarter. >> Yeah, no, we're very fortunate, but we had been planning for doing our normal business continuity disaster planning, and actually, once we saw COVID in Asia in January we started exercising all those muscles, including pre-shipping product around to depos around the world in case transportation got clogged, which it in fact did. So we were well-prepared, but we're also, I think, very fortunate in terms of the fact that we had a very distributed supply chain. >> Yeah, I mean you guys obviously did a good job. You saw in Dell's earnings they held pretty firm. HPE, on the other hand, really saw some disruption, so congratulations to you and the team on that. So as we think about exiting this isolation economy, we've done work that shows about 44% of CIOs see a U-shaped recovery, but it's very fragmented. It varies by industry. It varies by how digital the organizations are. Are they able to provide physical distancing? How essential are these organizations? And so I'm sure you're seeing that in your customer base as well. How are you thinking about exiting this isolation economy? >> Well, I've certainly resisted trying to predict a U- or a V-shape, because I think there are many more unknowns than there are knowns, and in particular, we don't know if there's a second wave. If there is a second wave, is it going to be more or less lethal than the first wave? And as you know, maybe some of your audience knows, I contracted COVID in March. So I've done a lot of reading on not just COVID, but also on the Spanish flu of 1918-1919. It's going to take a while before this settles down, and we don't know what it's going to look like the rest of the year or next year. So a lot of the recovery is going to depend on that. What we can do, however, is make sure that we're prepared to work from home, work in the office, that we make sure that our team out in the field is well-placed to be able to support our customers in the environment, and the way that we're incenting our overall team now has less to do with the macro than it does with our specific segment, and what I mean by that is we're incenting our team to continue to build market share, and to continue to outperform our competition as we go forward, and also on our customer satisfaction figure, which you know is our Net Promoter Score, which is the highest in the industry. So that's how we're incenting our team. >> Yeah, and we're going to talk about that, and by the way, yes, I did know, and it's great to see you healthy, and I'd be remiss if I didn't also express my condolences, Matt, the loss of Matt Danziger, your head of IR, terrible tragedy. Of course Matt had some roots in Boston, went to school in Maine. >> Yeah. >> Loved Cape Cod, and so really sad loss, I'm sure, for all of the Puritans. >> It's affected us all very personally, because Matt was just an incredible team member, a great friend, and so young and vital. When someone that young dies for almost unexplainable reasons. It turned out to be a congenital heart condition that nobody knew about, but it just breaks... It just breaks everyone's heart, so thank you for your condolences. I appreciate it. >> You're welcome. Okay, so let's get into the earnings a little bit. I want to just pull up one of the charts that shows roughly, I have approximately Q1 because some companies like NetApp, Dell, HPE, are sort of staggered, but the latest results you saw IBM growing at 19%. Now we know that was mainframe-driven in a very easy compare. Pure plus 12, and then everybody else in the negative. Dell, minus five, so actually doing pretty well relative to NetApp and HPE, who, as I said, had some challenges with deliveries. But let's talk about your quarter. You continue to be the one sort of shining star in the storage business. Let's get into it. What are your big takeaways that you want us to know about? >> Well, of course I'd rather see everybody in the black, right, everybody in the positive, but we continue to take market share and continue to grow 20 to 30% faster than the rest of the industry combined, and it's quarter after quarter. It's not just a peak in one quarter and then behind in another quarter. Every quarter we're ahead of the rest of the industry, and I think the reasoning is really quite straightforward. We're the one company that invests in storage as if it's high technology. You do hear quite often, and even among some customers, that storage is commoditized, and all of our competitors invest in it, or don't invest in it, as if it's a commoditized market. Our view is quite straightforward. The science and the engineering of computing and data centers continues to evolve, continues to advance, has to advance if we continue down this path of becoming more of a digital economy. As we all know, processors advance in speed and capability. Networking advances in terms of speed and capability. Well, data storage is a third of data center spend, and if it doesn't continue to advance at the same pace or faster than everything else, it becomes a major bottleneck. We've been the innovator. If you look at a number of different studies, year after year, now over six or seven years, we are the leader in innovation in the data storage market, and we're being rewarded for that by penetrating more and more of the customer base. >> All right, let's talk about that. And you mentioned in your keynote at Accelerate that you guys spend more on R&D as a percentage of revenue than anybody, and so I want to throw out some stats. I'm sorry, folks, I don't have a slide on this. HPE spends about 1.8 billion a year on R&D, about 6% of revenues. IBM, I've reported on IBM and how it's spending the last 10 years, spent a huge amount on dividends and stock buybacks, and they spent six billion perpetually on R&D, which is now 8% of revenue. Dell at five billion. Of course Dell used to spend well under a billion before the EMC acquisition. That's about 6% of revenue. And NetApp, 800 million, much higher. They're a pure play, about 13%. Pure spends 430 million last year on R&D, which is over 30% of revenue on R&D, to your point. >> Yeah, yeah, well, as I said, we treat it like it's high technology, which it is, right? If you're not spending at an appropriate level you're going to fall behind, and so we continue to advance. I will say that you mentioned big numbers by the other players, but I was part of a big organization as well with a huge R&D budget, but what matters is what percent of the revenue of a specific area are you spending, right? You mentioned Dell and VMware. A very large fraction of their spend is on VMware. Great product and great company, but very little is being spent in the area of storage. >> Well, and the same thing's true for IBM, and I've made this point. In fact, I made this point about Snowflake last week in my breaking analysis. How is Snowflake able to compete with all these big whales? And the same thing for you guys. Every dime you spend on R&D goes to making your storage products better for your customers. Your go-to-market, same thing. Your partner ecosystem, same thing, and so you're the much more focused play. >> Right, well I think it boils down to one very simple thing, right? Most of our competitors are, you might call them one-stop shops, so the shopping mall of IT gear, right? The Best Buy, if you will, of information technology. We're really the sole best of breed player in data storage, right, and if you're a company that wants two vendors, you might choose one that's a one-stop shop. If you have the one-stop shop, the next one you want is a best of breed player, right? And we fill that role for our customers. >> Look it, this business is a technology business, and technology and innovation is driven by research and development, period, the end. But I want to ask you, so the storage business generally, look, you're kind of the one-eyed man in the land of the blind here. I mean the storage business has been somewhat on the back burner. In part it's your fault because you put so much flash into the data center, gave so much headroom that organizations didn't have to buy spindles anymore to get to performance, the cloud has also been a factor. But look, last decade was a better decade for storage than the previous decade when you look at the exits that you guys had and escape velocity, Nutanix, if you can kind of put them in there, too. Much larger than say the Compellents or 3PARs. They didn't make it to a billion. So my question is storage businesses, is it going to come back as a growth business? Like you said, you wish everybody were in the black here. >> Right, well a lot of what's being measured, of course, is enterprise on-prem storage, right? If we add on-prem and cloud, it actually continues to be a big growth business, because data is not shrinking. In fact, data is still growing faster than the price reduction of the media underneath, right, so it's still growing. And as you know, more recently we've introduced what we call Pure as-a-Service and Cloud Block Store. So now we have our same software, which we call Purity, that runs on our on-prem arrays, also running on AWS, and currently in beta on Azure. So from our point of view this is a... First of all, it's a big market, about $30 to $40 billion total. If you add in cloud, it's another $10 to $15 billion, which is a new opportunity for us. Last year we were about 1.65 billion. We're still less than, as you know, less than 10% of the overall market. So the opportunity for us to grow is just tremendous out there, and whether or not total storage grows, for us it's less important right now than the market share that we pick up. >> Right, okay, so I want to stay on that for a minute and talk about... I love talking about the competition. So what I'm showing here with this kind of wheel slide is data from our data partner ETR, and they go out every quarter. They have a very simple methodology. It's like Net Promoter Score, and it's very consistent. They say relative to last year, are you adopting the platform, that's the lime green, and so this is Pure's data. Are you increasing spend by 6% or more? That's the 32%, the forest green. Is spending going to be flat? Is it going to decrease by more than 6%? That's the 9%. And then are you replacing the platform, 2%. Now this was taken at the height of the US lockdown. This last survey. >> Wow. >> So you can see the vast majority of customers are either keeping spending the same, or they're spending more. >> Yeah. >> So that's very, very strong. And I want to just bring up another data point, which is we like to plot that Net Score here on the vertical axis, and then what we call market share. It's not like IDC market share, but it's pervasiveness in the survey. And you can see here, to your point, Pure is really the only, and I've cited the other vendors on the right hand, that box there, you're the only company in the green with a 40% Net Score, and you can see everybody else is well below the line in the red, but to your point, you got a long way to go in terms of gaining market share. >> Exactly, right, and the reason... I think the reason why you're seeing that is really our fundamental and basic value is that our product and our company is easy to do business with and easy to operate, and it's such a pleasure to use versus the competition that customers really appreciate the product and the company. We do have a Net Promoter Score of over 80, which I think you'd be hard-pressed to find another company in any industry with Net Promoter Scores that high. >> Yeah, so I want to stay on the R&D thing for a minute, because you guys bet the company from day one on simplicity, and that's really where you put a lot of effort. So the cloud is vital here, and I want to get your perspective on it. You mentioned your Cloud Block Store, which I like that, it's native to AWS. I think you're adding other platforms. I think you're adding Azure as well, and I'm sure you'll do Google. >> Azure, Azure's in beta, yes. >> Yeah, Google's just a matter of time. Alibaba, you'll get them all, but the key here is that you're taking advantage of the native services, and let's take AWS as an example. You're using EC2, and high priority instances of EC2, as an example, to essentially improve block storage on Amazon. Amazon loves it because it sells Compute. Maybe the storage guys in Amazon don't love it so much, but it's all about the customer, and so the native cloud services are critical. I'm sure you're going to do the same thing for Azure and other clouds, and that takes a lot of investment, but I heard George Kurian today addressing some analysts, talking about they're the only company doing kind of that cloud native approach. Where are you placing your bets? How much of it is cloud versus kind of on-prem, if you will? >> Yeah, well... So first of all, an increasing fraction is cloud, as you might imagine, right? We started off with a few dozen developers, and now we're at many more than that. Of course the majority of our revenue still comes from on-prem, but the value is the following in our case, which is that we literally have the same software operating, from a customer and from a application standpoint. It is the same software operating on-prem as in the cloud, which means that the customer doesn't have to refactor their application to move it into the cloud, and we're the one vendor that's focused on block. What NetApp is doing is great, but it's a file-based system. It's really designed for smaller workloads and low performance workloads. Our system's designed for high performance enterprise workloads, Tier 1 workloads in the cloud. To say that they're both cloud sort of washes over the fact that they're almost going after two completely separate markets. >> Well, I think it's interesting that you're both really emphasizing cloud native, which I think is very important. I think that some of the others have some catching up to do in that regard, and again, that takes a big investment in not just wrapping your stack, and shoving it in the cloud, and hosting it in the cloud. You're actually taking advantage of the local services. >> Well, I mean one thing I'll mention was Amazon gave us an award, which they give to very few vendors. It's called the Well-Architected AWS Award, because we've designed it not to operate, let's say, in a virtualized environment on AWS. We really make use of the native AWS EC2 services. It is designed like a web service on EC2. >> And the reason why this is so important is just, again, to share with our audience is because when you start talking about multi-cloud and hybrid cloud, you want the same exact experience on-prem as you do in the cloud, whether it's hybrid or across clouds, and the key is if you're using cloud native services, you have the most efficient, the highest performance, lowest latency, and lowest cost solution. That is going to be... That's going to be a determinate of the winner. >> Yes, I believe so. Customers don't want to be doing... Be working with software that is going to change, fundamentally change and cause them to have to refactor their applications. If it's not designed natively to the cloud, then when Amazon upgrades it may cause a real problem with the software or with the environment, and so customers don't want that. They want to know they're cloud native. >> Well, your task over the next 10 years is something. Look it, it's very challenging to grow a company the size of Pure, period, but let's face it, you guys caught EMC off-guard. You were driving a truck through the Symmetrics base and the VNX base. Not that that was easy. (chuckling) And they certainly didn't make it easy for ya. But now we've got this sort of next chapter, and I want to talk a little bit about this. You guys call it the Modern Data Experience. You laid it out last Accelerate, kind of your vision. You talked about it more at this year's Accelerate. I wonder if you could tell us the key takeaways from your conference this year. >> Right, the key takeaway... So let me talk about both. I'll start with Modern Data Experience and then key takeaways from this Accelerate. So Modern Data Experience, for those that are not yet familiar with it, is the idea that an on-prem experience would look very similar, if not identical, to a cloud experience. That is to say that applications and orchestrators just use APIs to be able to call upon and have delivered the storage environment that they want to see instantaneously over a high speed network. The amazing thing about storage, even today, is that it's highly mechanical, it's highly hardware-oriented to where if you have a new application and you want storage, you actually have to buy an array and connect it. It's physical. Where we want to be is just like in the cloud. If you have a new application and you want storage or you want data services, you just write a few APIs in your application and it's delivered immediately and automatically, and that's what we're delivering on-prem with the Modern Data Experience. What we're also doing, though, is extending that to the cloud, and with Cloud Block Store as part of this, with that set of interfaces and management system exactly the same as on-prem, you now have that cloud experience across all the clouds without having to refactor applications in one or the other. So that's our Modern Data Experience. That's the vision that drives us. We've delivered more and more against it starting at the last Accelerate, but even more now. Part of this is being able to deliver storage that is flexible and able to be delivered by API. On this Accelerate we delivered our Purity 6.0 for Flash Array, which adds not only greater resiliency characteristics, but now file for the first time in a Flash Array environment, and so now the same Flash Array can deliver both file and block. Which is a unified experience, but all delivered by API and simple to operate. We've also delivered, more recently, Flash Array 3.0... I'm sorry, Purity 3.0 on FlashBlade that delivers the ability for FlashBlade now to have very high resiliency characteristics, and to be able to even better deliver the ability to restore applications when there's been a failure of their data systems very, very rapidly, something that we call Rapid Restore. So these are huge benefits. And the last one I'll mention, Pure as-a-Service allows a customer today to be able to contract for storage as a service on-prem and in the cloud with one unified subscription. So they only pay for what they use. They only pay for what they use when they use it, and they only pay for it, regardless of where it's used, on-prem or in the cloud, and it's a true subscription model. It's owned and operated by Pure, but the customer gets the benefit of only paying for what they use, regardless of where they use it. >> Awesome, thanks for that run through. And a couple other notes that I had, I mean you obviously talked about the support for the work from home and remote capabilities. Automation came up a lot. >> Yep. >> You and I, I said, we have these great conversations, and one of the ones I would have with you if we were having a drink somewhere would be if you look at productivity stats in US and Europe, they're declining-- >> Yes. >> Pretty dramatically. And if you think about the grand challenges we have, the global challenges, whether it's pandemics, or healthcare, or feeding people, et cetera, we're not going to be able to meet those challenges without automation. I mean people, for years, have been afraid of automation. "Oh, we're going to lose jobs." We don't have enough people to solve all these problems, and so I think that's behind us, right-- >> Yeah, I agree. >> The fear of automation. So that came up. Yeah, go ahead, please. >> I once met with Alan Greenspan. You may remember him. >> Of course. >> This is after he was the chairman, and he said, "Look, I've studied the economies now "for the last 100 years, "and the fact of the matter is "that wealth follows productivity." The more productive you are as a society, that means the greater the wealth that exists for every individual, right? The standard of living follows productivity, and without productivity there's no wealth creation for society. So to your point, yeah, if we don't become more productive, more efficient, people don't live better, right? >> Yeah, I knew you'd have some good thoughts on that, and of course, speaking of Greenspan, we're seeing a little bit of rational exuberance maybe in the market. (chuckling) Pretty amazing. But you also talked about containers, and persisting containers, and Kubernetes, the importance of Kubernetes. That seems to be a big trend that you guys are hopping on as well. >> You bet. It is the wave of the future. Now, like all waves of the future, it's going to take time. Containers work entirely differently from VMs and from machines in terms of how they utilize resources inside a data center environment, and they are extraordinarily dynamic. They require the ability to build up, tear down connections to storage, and create storage, and spin it down at very, very rapid rates, and again, it's all API-driven. It's all responsive, not to human operators, but it's got to be responsive to the application itself and to the orchestration environment. And again, I'll go back to what we talked about with our Modern Data Experience. It's exactly the kind of experience that our customers want to be able to be that responsive to this new environment. >> My last question is from John Furrier. He asked me, "Hey, Charlie knows a lot about networking." We were talking about multi-cloud. Obviously cross-cloud networks are going to become increasingly important. People are trying to get rid of their MPLS networks, really moving to an SD-WAN environment. Your thoughts on the evolution of networking over the next decade. >> Well, I'll tell you. I'm a big believer that even SD-WANs, over time, are going to become obsolete. Another way to phrase it is the new private network is the internet. I mean look at it now. What does SD-WAN mean when nobody's in the local office, right? No one's in the remote office; they're all at home. And so now we need to think about the fact... Sometimes it's called Zero Trust. I don't like that term. Nobody wants to talk about zero anything. What it really is about is that there is no internal network anymore. The fact of the matter is even for... Let's say I'm inside my own company's network. Well, do they trust my machine? Maybe not. They may trust me but not my machine, and so what we need to have is going to a cloud model where all communication to all servers goes through a giant, call it a firewall or a proxy service, where everything is cleaned before it's delivered. People, individuals only get, and applications, only get access to the applications that they're authorized to use, not to a network, because once they're in the network they can get anywhere. So they should only get access to the applications they're able to use. So my personal opinion is the internet is the future private network, and that requires a very different methodology for authentication for security and so forth, and if we think that we protect ourselves now by firewalls, we have to rethink that. >> Great perspectives. And by the way, you're seeing more than glimpses of that. You look at Zscaler's results recently, and that's kind of the security cloud, and I'm glad you mentioned that you don't like that sort of Zero Trust. You guys, even today, talked about near zero RPO. That's an honest statement-- >> Right. >> Because there's no such thing as zero RPO. (chuckling) >> Right, yeah. >> Charlie, great to have you on. Thanks so much for coming back in theCUBE. Great to see you again. >> Dave, always a pleasure. Thank you so much, and hopefully next time in person. >> I hope so. All right, and thank you for watching, everybody. This is Dave Vellante for theCUBE, and we'll see you next time. (smooth music)

>> Narrator: From around the globe, it's theCUBE. With digital coverage of VeeamON 2020. Brought to you by Veeam. >> Hi everybody, welcome back to VeeamON 2020. My name is Dave Vellante, and you're watching theCUBE's coverage of VeeamON. This is the first time we've done Virtual VeeamON. We've got the Veeam power panel, Bill Largent, CEO, Jim Krueger, the CMOs, Danny Allen who's the CTO and Senior Vice President Product Strategy. All have been on earlier, guys great to see you. Thanks for coming back and digging out of the power panel. Appreciate it. >> Good. >> Thank you Dave. >> I'm glad to be here. >> Thank you Okay, I want to start off, Bill, get a business update. We've so I talk a lot about COVID. We can go back to that, but you guys, as a private company, you divulge more information, than most private companies. And we appreciate that as an independent but guys, if you would bring up that one slide. You shared this publicly a little earlier. I mean, you guys are a billion in revenue now, 21% annual recurring revenue growth, 375,000 customers, 97% year on year increase in your universal license bookings. Everything seems to be happening, Bill. What what can you tell us? >> Well we had a great first quarter also that we kicked off where we had our transaction with insight venture partners, which right in the middle of that quarter, at the end of it, we had that activity that went on, that one might think would have disrupted the business, it didn't, we had our plan for Q1, really excited about that. We announced our growth saw that here recently. We're really pumped into our second quarter. We managed to transition everybody out of offices. We probably had 75% of our workforce move. Yeah, they did that. We had a fantastic April. We're having a very good May. So it's just a great start with a great customer base. So I'm really excited about it. >> Yeah, you mentioned insight. We obviously covered that and reported on that. Insight, they like growth, not like the old school private equity, suck money out. They want growth, they want options down the road (mumbles) Maybe it's a rule of 40 rule, the type of company. So that's got to be exciting for you guys and your employees. >> Yeah, I think it's pretty exciting. Few of us have been around the insight team since 2002. So a very well known group of individuals to us. They are focused in the software space and know the infrastructure space really well. My triple that hour our lead on the insight team and his his staff is that's a move into, as we move into it, stepping up and moving into our very revenue focus versus part of a total contract. But nice resource to have for things that we might want to do in the future related acquisitions. So we're really excited about it. >> I mean, if I'm in VC right now, I'm looking at SaaS, I'm looking and it's software, I'm looking for companies that have an annual recurring revenue model I'm looking for adopting of products and those kinds of of KPI's and you guys fit that bill Maybe a larger size and obviously in the early stage startup but that's kind of the profile of the the company that you want to invest in 2020s, isn't it? >> Absolutely, and I'd also say it's the kind of company we want to invest in, in the future as we go forward to bring in new technologies and expand markets. Addressable market back to comments, we had discussions on, what's it look like in 2030? And it's like, okay, those are we're heading. >> So Danny, Pat Gelsinger is famous on theCUBE for saying that, look, if you don't ride the waves, can it become driftwood. So what are the mega trends that you guys are riding today and that you're seeing in the future? We'll keep you ahead of the pack. >> Well, we clearly talk a lot about cloud data management. So act two for us is not just moving from perpetual licensing to subscription and evolving with American at a business level. It's also at a technical level. And so we invested heavily, as we demoed earlier today, Veeam backup for Office 365 version 5. An important point act two for us is not just product. There's also product delivery. That's version 5 of a release of a product to that came out three years ago. So the backup for office 365, we showed you Veeam backup for AWS. And you saw from Anton as well supporting Google cloud storage and supporting all of the major cloud providers. So for us to not just ride the wave, but actually be ahead of everyone else it's to embrace cloud data management and give the customers what they really need. >> Well, I think you guys are in a unique position too. I mean, if you guys obviously sell on-prem, but if you're they're an on-prem infrastructure company, really living on box margins you can talk the cloud talk, but it's not necessarily a tailwind for you guys? So Danny, how is cloud, right how cloud is it tailwind for Veeam versus some of the other legacy players, >> Well, Veeam has always been, we always highlight simple, flexible, reliable, but one of the, the parts of flexible of course, is where it's being software defined. And we've been software defined from the very beginning. And if you're in a world where you have to go take a box, plug it into the data center and rack and stack it and be there physically. You're not going to survive in this type of environment. So being software defined help us, not only when the data center, but to help our customers as they go through that evolution. On-prem too, maybe just storing backups in the cloud, actually running the workloads in the cloud and protecting there. >> Well, so Jim I want to turn it to you sort of thinking about the Veeam brand. we talked earlier about how you guys have always punched above your weight, famous parties and so forth, but now billion dollars now entering a new era. It's ironic that we're now doing virtual events. So no big giant party this year, but I feel like, I mean, you guys are what, 14-year old company now, and kind of grown up you three and your colleagues are bringing you lots of adult supervision. How should we think about the VeeamON or Veeam brand going forward? >> Yeah, no, I think the Veeam brand is critically important because there's just such a strong affinity and connection with customers. And I think one of the challenges as you get larger and go from 1 billion to 2 billion, a lot of companies miss the beat relative to staying connected to their customers. And that's something that we're putting a tremendous amount of focus on that first slide that you flashed up no 91% customer satisfaction, a 75 net promoter score, which is three and a half times industry average. I think our key to success is not only bringing great products, the market, but looking at the holistic picture relative to supporting customers and customer satisfaction, which is a key driver of the company. well, it will help us to continue to build on the brands and have the best brand in the market. >> Well, what I want to come back to is the marketing whiz in the panel. I mean, you think about digital. We feel like the world is going to be one in digital in the next a decade. I take the pick the GNC example. And you think about just even a term like customer relationship management, we all use CRM systems. I'm not sure I want a relationship GNC, but I do know this, I want a good deal, right. If they're going to make me an offer, I'm going to look at that and these other brands, that's digital that is having infrastructure and data That's obviously protected to be able to offer that at the right time, for the right customer, so that they can take advantage of it and have the right candles. I wonder if you could talk about what you see as a marketing pro just in terms of digital and that customer intimacy. >> Yeah so I think it it's a multifaceted, I think one of the key things that again Veeam does that's different than other companies is that we, we have a direct connection with our customers. So in our head of product management sends out an update every Sunday, and it goes into quite a bit of detail around sort of how to deploy this, how to deploy that. And really creating a digital journey for the customer from a marketing perspective, because yeah, like within any situation, you don't want to talk to a salesperson right off the back because you know, they're going to try to sell you. So you want to do something investigation, you need the contents and information to help you move along that journey until you get to the point where, okay, now it's time, I've kind of narrowed it down and I need to talk to someone to give me some more information. So I look at one of the key differentiators of Veeam is that digital experience which I think from the founding of the company that Rattler put into place has carried us forward. And when we continue to put a lot of focus on that digital experience, which I think gives us definitely a leg up on the competition. >> So bill, you got to place bets as the CEO. I'm interested in where you're placing bets. I mean, you've made some pretty substantial investments in your partner network. You've got some big names partners that are okay, you're moving a lot of products through those guys, obviously your heritage as a company is steep. And technical development you are very successful sales organization, but sir, where are you placing your chips on the table these days? And maybe especially in the context of this pandemic, if anything changed in your thinking. >> Yeah, well the bets will always be placed on the product side of it. That's a big, so your products. You go partners and you go our employees and those are the big bets that will make, what are we doing on the partner side we're continuing pretty aggressive activity and making sure these partners have a simpler place as I've discussed before to do business with them. It's more challenging the larger we get. But yeah, we'll keep that focus on. The product offering has been a again, always go back to any of our taglines. It just works, put us in the lab, we're going to win. We're going to win that technical decision a process. And then we're putting it up pretty big bets on our employee base, we're all over the world 4,300. The I think the decisions we have, like a lot of companies have moving forward are going to be, where are you going to work from? You're going to work from that home office. So you're going to combine it back into the office or are you going to not, you're just going to yeah. Do you're going to go back the way things are. I don't think that's going to happen at all. So take bets will always be on bringing good product to market like technical decisions. >> So let's, let's talk to Andy about the product. I mean, you've I saying you've grown up, you've gone from yeah relatively narrow portfolio to now expanding a lot of different use cases, many several different clouds on-prem hybrid, et cetera. How do you ensure it, Danny, from product standpoint That you don't just get a, a collection of point product, but you actually have a platform that even, for instance, your licensing model very easily. support that notion, how do you ensure that more of a platform, if you will, then just the, a bunch of selection of product, >> The answer to that would be focused maniacal focus. So it's interesting that you brought up licensing. So one of the things that we're very focused on is making that licensing can move across all these different types of infrastructure. So the universal license allows you to do that. You can move a workload from physical to virtual, to cloud, to back the application services call with a single license. But we also do that product level too. One of the interesting things that we've been focused on is it's something internally, we call it the Veeam integration platform that enables you to have a central common control playing across the entire organization. But yet you can deploy in the need of environments that make the most sense. So if you think about what we showed you earlier today with beam backup rate AWS, you're running on an interface that you deploy out of the AWS marketplace, but that product actually integrate back into Veeam availability suite. So that's true of being backup for AWS, Roger being backup from Nutanix. Every time we add a new one capability platform, whether it's fast or virtual or cloud, we make sure that it's still cause that central connection to the main control plane. And that's why we call this five data management, because it gives you that data management cross all of these different infrastructures. It's clearly not easy to do, but the focus that we have good on this result, then our customers, ultimately, >> So I want to ask you guys about culture, Jim, I start with you, I mean, a lot of people, obviously story averted, or asking this theme, still going to have parties you got your two founders and sort of set good. Ratt would always be right there in the mix lap. Last one to leave very hard charging and that's kind of steep in the Veeam culture, but I'm interested in, and if there's been any sort of discernible change, as you get bigger and bigger, how you were able to maintain that culture, what are some of the things that you want to keep, and maybe some of the things that you want to evolve. >> Yeah, no great question. And I think culture is I'm a big believer. Yeah. That culture can really differentiate a company in the marketplace and I think themes culture in the past has really done that effectively. And I think that's it shows in the success of the company. So I definitely see it as as my job, along with the rest of the executive team to continue to, to carry that torch forward. one of the things that I learned coming to Veeam was, was really winning the hearts and minds of the customers that you're serving. And so that can be anything from a party being totally open to your customers, listening to your customers, I've given them different channels to give you a feedback and just being a company that's easy to do business with. I think it's critically important. And those are some of the key things from a cultural perspective that's how we want to carry forward. You mentioned car charging, absolutely being aggressive in the marketplace. but bringing solutions to market really hit the sweet spot Relative to customer need, I think is again, one of the cultural pieces and that maniacal focus on customer satisfaction, which is absolutely key. >> So well, I wonder Bill, if you could comment, maybe in this context part of your job of course, is an expansion traditionally been a European based company moving So the US I'm curious as to what effect that will have both culturally and on Tam as well. You're extremely successful in, in overseas. Oh, of course, so there's maybe even more penetration within the US and obviously throughout the call, we've certainly talked a lot about cloud, but maybe your thoughts on it. >> Okay, Well, thanks very much. Hopefully you see no impact on culture, in the sense of our move from a European headquarters to a US headquarters. We definitely felt it important to bring it a us headquarters in place. We now have moved all us shareholders. our culture is really the built on core values that we develop back in 2012, that really the everything else branches off of innovate and iterate it's about everybody sells. We clearly add that yeah. A goal for everyone in the company and the fact that we also want to win. So we'll fight hard to win bringing it to the US okay. A lot of our competitors are based in the US we think we can even though we've got great numbers against all our competitors, we'll even bring the fight much harder. Now that we're in the United States as a headquarter place, change nothing else internationally, globally. >> So Danny, every I'll five or seven years or so Gartner or IDC or whomever without a service is that we just did a survey that yeah. X percent of the customers are going to rethink their backup strategies in the next 24 months. You see that literally every half a decade. so, well what's, what's the driving that now. I mean, certainly cloud is it which factor edge we're going to be talking about the edge for the how many years, and then, and it's really going to start to drive revenue at some point kind of like the cloud was 10 years ago. but so talk about how you guys sort of, are they relevant conversation and what customers should be thinking about in terms of those transitions? >> Well every customer says I'm going to reevaluate my backup solution every five or seven years, but the reality is what's happened. Yeah. Industry itself goes through transition. So we go from physical to virtual and as they go to virtual, for example, they say, Hey, I can't use my legacy providers. So I'm going to choose a new one. They choose Veeam. And then of course, we go to cloud and we're going to go to containers and we're going to go to edge. And every time he goes through those iterations, there is an opportunity for the next generation of platform to emerge. And so beam's focus here is to make sure that we're ahead of those trends to make sure we're thinking ahead of our customers. So right now, for example I spent an in order to in amount of time thinking about cloud and containers so that when the customer gets there, when they get the edge, when they get do all of these things, but they have a data management platform that protects them. And step one is always going to be the same. I always say the step one for every iteration of infrastructure is just ingest the data because you need to protect it. It's only after you protected and begin to manage it, be integrated into the business. Can you be into unleashed, but we go through this cycle over and over again. And ultimately it's the, the vendor, it's the partner that is most trusted, that wins as, as Jim alluded to our NPS scores for themselves, our customer base, right, sorry self our intimacy with the customers. Great. Awesome. So as long as we keep that close connection, then we think we're well positioned to the lead as we go through the next iteration of infrastructure. Okay. Let's talk about the competition, Danny. >> Let's stay with you. Okay. You've got some, well-funded not even startups anymore. Okay. Companies that are kind of going after the base, you've got a huge install base okay Of legacy companies. I mean, I think it's easier for, for some of those guys to attack sort of a box space, the solution, you guys are more software, but I'm sort of interested in take Danny on why the shiny new toys and that have obviously have momentum in the marketplace. >> Yeah, the shiny new toys, they come out with a solution that is very packaged up and black box. You can't actually customize it very much for the user need. And that's, we don't believe that that's going to work in the longterm. And the reason I say that, okay, the pandemic we're in, if you can't go into the data center to rack and stack a box, if you can't actually working with the infrastructure that's already in place, then you're not positioned to work well in the longterm. And, and so we have this unfair advantage we've been around for over a decade. We integrate with over 45 different storage vendors. That's not including the wild vendors all of our partners. And so we do have an unfair advantage with a history of all of these integrations, but that flexibility is really what our customers need. They don't want to be law into the data center. They don't know two, three years from now, their strategy might change. They might say, take the workload, moving to the cloud. And so if your whole focus is on selling your customers , something that I used them to their data center, that in itself is a challenge. And being software defined we're well positioned to make future for any evolutions that happened in America. Okay. So we're in a good place. I'm well, knock on wood, but I think we're going to keep going. >> Yeah. That's an interesting answer. Not one that I expected, but it's to make sense in the context with a QA we had with Andy Jassy a while ago. I was Kind of pushing them on the zillion APIs. And he basically had a similar answer. Obviously cloud services is different, but essentially saying, we don't know where the market's going. So we want to have very granular role at You're kind of a primitive level so that we have that flexibility and maybe there's a trade off sometimes just in terms of what you called out of the box, but it's a very handy Jessie like answer, it sort of strikes me. >> Well, it's certainly true that the customers don't know a year from now they've been using that hardware, but a year from now two years from now, we run into another market impediment. They might want that money back. They might want, you might want flexibility to expand into it, different geography or take advantage of the elasticity of the cloud and buying a piece of hardware. Just the very fact that you buy hardware that essentially ties you into that hardware, at least three years, probably being software defined, you can continue to reuse and leverage all the assets that you've already had committing to a lock-in period of time. >> So from a, from a marketing standpoint, Jim strategy, brand customer intimacy, what you're in. >> Well, Dan, you already talked a little bit about it in terms of kind of the, the three cornerstones, of how we think our simplicity, flexibility, and reliability. And as bill talked about when we get into now into a customer, and if they're testing us out trial and us out nine times out of 10, we're going to win because they see those three key things and those three key things we hear on a daily basis from our customers and how important that is. So we continue to build out on each of those the challenges, keeping it simple. And that's an area that we have to continue to focus on. but I think those are the key differentiators for us going forward. I think the flexibility piece is the integration with all the storage, our ecosystem of partners. Well, we have I think close to 40 partners that are sponsoring the Amman here. so that's a, that's a key differentiator because we work with basically everybody we're agnostic. and again, just easy to do business with an, a true partner. >> I got it. I got one more question for Danny, and then I want to ask bill to close, but okay. Guys, feel free to chime in on this one as well. But some of the things we haven't talked about about money , Danny containers, protecting containers the edge these are all sort of emerging opportunities. I know you've got some, yes, on the container side, the edge is early days. There's whole new models of computing potentially a lot of data going to be, we created, okay. Unclear how much is going to have to be persistent, but certainly would that much data the IDC forecasts, a lot of it's going to have to be. So your thoughts on some of those other emerging trends that we haven't talked. >> Well, the key to this segment of America are our partners Trust us. We're thinking about this ahead of when they will actually need it. And you're right. I think we're early days in containers. I think we're early days in edge. We don't know we have a partner ducks unlimited where they're storing data for 60 years. Use it from IOT sensors, keep it for 60 years because they don't know in the future, if that data is going to be relevant. And so our focus is to make sure that we're ahead of our customer base in terms of thinking of it, and then making sure that our platform supports what they need as they need it. You want to be careful about going too far in advance. Sometimes in the industry you hear about people who are talking about magic 60, Dustin's solving Crazy problems that our customers don't actually have. We're very pragmatic. We want to make sure that problems that we're addressing that are platform fundamentally addresses where they are today. And then also be in those discussions with them about where they're going to be tomorrow. >> Well, maybe some of that magic pixie dust go into the COVID vaccine. That would be good. They'll bring us home. So the virtual forklifts are breaking down, came 20, 20. What are the big takeaways from Europe? Your first VeeamON as CEO, but what are the big takeaways as the virtual trucks are pulling away? >> Yeah. Thanks very much for asking that question. We you know, we did do our first VM on, in 2014, and I can still remember when Ratner came to, I mean, let's do this. And it's like, Oh, you've got it. Excuse me. This is going to cost a fortune. So why would we ever end? And then he's obviously a right. It continues to be right. So I hate the story about Veeam is gross. And when you're growing, you got funds available. People interested you to innovate. You mentioned containers. Danny did also at Kubernetes and we've got our forensic cast and that are here with us. And yeah, those are all important relationships and will continue to develop relationships and . But why Veeam we've supported, we've got great customers for it. We have a gross engine, we're going to continue that we don't plan on being comfortable with where we are. We'll continue to enter in, go after it. Additional Tam, but we'll also take care of that core base we came from. So I'm really excited about, we had a lot of yep. A lot of great breakout sessions. I keep right. Okay. K was on, there was a lot of great ones. I did like the one though. And it was like, fall in love with tape all over again. So when I first saw that they brought it, I went running from my age, correct tapes and my John Fogarty NCCR I've found one. so had to get readjusted to not. So in any event, I do think, Nope. We like to have a lot of fun. You'll see that we get back See where we go as far as the virtual versus an onsite in the future, we landing on site when, and if so, you'll, and you're there you'll, you will be at the party. >> Yeah, indeed. And I, but I do think there's going to be some learnings that we carry forward and I think for awhile and maybe even perfect quite a long time, there'll be some kind of hybrid going on with the seem to live in a hybrid world. Guys thanks so much for coming to theCUBE and making this a successful power panel. It was really a pleasure having you. >> Great. >> Thanks for having me. >> Thanks. >> Thank you for watching everybody. This is Dave Vellante for theCUBE. Keep it right here. There are tenuous coverage, the VeeamON 2020, right back. (slow instrumental music)

>> from Austin, Texas. It's Theo Cube, covering your storage. Accelerate 2019. Brought to you by pure storage. >> Welcome to Austin, Texas. This is the Cube. Live at the fourth annual pure accelerate. I'm Lisa Martin with David, Dante, Dave or in Texas, >> Texas again. >> Austin, Texas. Very interesting venue for this fourth annual hear stories. >> A lot of construction, >> music, a >> lot of music. >> So we just came from the keynote and news announcements, customers on stage. But the first thing to point out is, this is here is about to celebrate their 10th anniversary. Charlie Giancarlo, CEO and chairman who's coming on the program with us, and just a few minutes talking about what they have innovated and delivered these 10 X improvements and 10 years kind of this overnight success in 10 years and what's coming? What was with the things that really stuck out at you, Nicky Note. >> Well, first of all, ironically, this is the 10th year of the Cube, not our 10th anniversary, but it's the 10th year of doing the Cube. And so our fourth year, I think it's pure accelerate about what 3000 people here, >> you know, the keynotes >> pure was laying out what their vision is of the modern data experience and that I felt like the keynotes least there were sort of, ah, speed date of what's coming. There was a couple of major announcements that we'll talk about, >> Uh, but >> they really are trying to differentiate as the modern storage company turn a deep position. The competition, as the old guard is to use this term that Andy Jassy uses pure, didn't use that term. But they really talked about it's time to go Modern. And so they were an overnight success. It took him 10 years, was one of the comments that was on stage. So I think this is worth pointing out. A couple of things. I mean, let me lay out. Sort of my thoughts on Pure is a company. They were the only storage company Ah, in the past. Let's call a decade to reach what I'll call escape velocity. They achieved a billion dollars a couple years ago. They're doing their due about a billion and 1/2 on a trailing 12 month basis. They'll do 1.7 billion this year and evaluations about 4.5 billion. So they got a a three ex valuation in that fluctuates. That's pretty good for a storage company. Billy on Lee major storage company. That's really growing rapidly. They got 28% growth. I did a breaking analysis on Lincoln, and I'll just share with you some of the numbers. Dallas flat at 0%. So Del is actually gaining share with no growth has got a scary NetApp minus 16% in the quarter H P E minus 3% IBM minus 21%. And so it is pure A 28%. So they're really crushing it in terms of growth. They've also got a 69% gross gross margin, even if it's in its heyday. E emcees gross margins weren't that high, you know. They were in the sort of mid sixties, and so, and they've also got a good balance sheet. About a billion dollars in cash A little. A little more than that, they got some debt. They're shifting their model to a deferred revenue model. Now the only thing is, you know they're growing much, much faster than the competition. But they're throwing off a lot less cash because they're much smaller. Just as an example, they probably throw off 5 to 6% of their revenues in cash. Netapp probably throws about 23% of its revenues, often catch the big Delta there, so the point is long winded. But but pure storage is in growth mode. And until the market rewards more consistent with a cash flow, they're gonna, I think, stay in huge growth mode. >> There was a great analysis. Dave and I saw an analysis that you did with some spends data, just a couple of your reverence. A little bit of that. There's there seems to be a tailwind behind here you mention the 28% wrote that they announced in Q two, and some of the things that also they talked about were there. Adding about in Q two of F Y 2020 about seven net new customers every business day, adding about 450 new customers just in that quarter. Like you said, 3000 folks expected here today. The momentum is behind them, but they're also a company of firsts. You talked about this a number of times. The first, with all flashed the first with envy me on the back and a couple of additional firsts announced today. Talk about the as a service model and how that youth, in your opinion, you think might continue that trajectory that they're on. >> Yes, so basically pure laid out today, said that vast majority are Pouliot Portfolio is gonna be available as a service. That's the cloud consumption mall is important because pure has about $600 million in deferred revenue, largely coming from their evergreen service. But there they are, slowly shifting their model to a subscription model. It's gonna be very interesting to see how that plays out. Um, we've seen a number of companies do a tableau in Adobe kind of pulled the band Aid off and did it Splunk has taken years to do. It will be interesting to see how how pure goes. For that. I'll >> bring it >> back to the cloud up yours largely an on Prem storage company. That's where most of the revenues come from. But we heard the gentleman from Amazon today. I think it was E ethan whiner, not Ethan, anyway, Mr Whiner, he said. That gardener did A survey last year showed 88% of customers said they have a cloud for a strategy, but 86% of those customers continue to spend on prim. So here you have the cloud. Amazon gorilla wants everybody to go to the cloud pure would much rather they make much more money on Prem? But they realize customers air pulling them in. So they have to move to that as a service model. One of the interesting things that pure is done, which, you know, that's not really a first. But it certainly is for the large storage companies they've announced. Ah, block storage on AWS. So basically what they're doing is they're taking the pure experience. It all looks like pure software, and they're front ending cheap s3 storage from Amazon with E. C. To compute instances, and they've architected using Amazon service. Is this basically a block storage array in the cloud so Amazon gets paid, pure, gets paid? It's a little bit of a premium, but you get higher availability. You get great right performance and you get the pure cloud experience pretty interesting strategy, >> and they're talking about it really as this. This positioning it rather as a bridge, a bridge to hybrid cloud. This numbers that the Amazon gentlemen, share that you mentioned Gardner were really interesting both sides recognizing there's a forcing function there and that forcing function is the customers from the enterprise to the small business who need to have data available immediately wherever it is people to extract this insights from it quickly so that those companies, whether it's a capital one or a Delta Airlines or a smaller organization, can act on it quickly to Dr Competitive Advantage. Same kind of challenge that your storage has. But really that forcing function of the customer, clearly bringing the giant AWS together with yet another story >> so pure as they say reached escape velocity. They and Nutanix were the only on a new entrance that reached a billion dollars Nutanix. I really don't consider a storage company. They're kind of hyper converged. And the way they did that as they drove a truck through E emcees install base with flash. So they were the first within all flash array. Maybe maybe they weren't the first, but they were the first to really drive it. They hired a bunch of DMC sales reps. They knew where all the skeletons were buried and they really took out a lot of old Symmetric Se's and Claire eons and V. Max is and all the old sort of GMC install base, and that helped them catapult their way there 1st 10 years. Now they got to do that again. They got to get to get They're on their way to two billion. But how did they get to five billion? Um, and and so the way they do that is they have to expand their tam. I mean, we'll talk to Charlie Jean Carlo about this. My feeling is a big job of the CEO is to expand the Tamil. How do they do that? They go after new workloads like a i. They go for cloud. They go from multi cloud. These are all very large markets in which they don't participate. Data protection. They'll partner with Lex, Kohi City and Rubric and Beam to to have data protection software running on their flash. A raise with very, very fast restores. That's something that's taking off. It's gonna be really interested in seeing as they say, they've got this subscription model that's coming in. They've got all this deferred revenue that in a way, it's going to slow him down a little bit just from an accounting standpoint, cause when you recognize deferred revenue, you recognize that, you know over 12 months over 36 months, so that's a little bit of a transition. The other thing that pure is facing in a tactical basis is Nande pricing. It's like this countervailing effects nan pricing is coming down, which means lower prices, lower costs but also lower revenue. But at the same time, it becomes more competitive with spinning disk. This is something else. We'll talk to Charlie Jean. Cholera right about it opens up new markets. So this tam expansion is critical for pure in terms of driving this modern data experience into these new workloads and fighting the competition, the competition is not sitting still. All those companies that I mentioned the H P ease, the the Delhi emcees, et cetera, are basically taking a page out of your swords narrative, talking about the cloud experience, talking about, you know, flexible pricing models, building cloud products on prime and hybrid cloud and multi cloud. So it's hard sometimes for customers to squint through that. And really, no, I guess the bottom line, the last thing I'll say is pure. Doesn't have as many feet on the street is these other guys. So it's gotta leverage the channel increasingly, and that's how it gets beyond two billion on its way to five billion. >> And that was one of the factors that they attributed the second quarter. 28% year on year growth is to not just innovation, but also to the channel. So they've done a good job of really pivoting. There's large enterprise deals to be covered, direct and then bringing in the channel for those smaller mid size business customers. Adding a lot of momentum in cute to you mentioned the nan pricing that in some of the political climate with the start of China, most of their businesses in the Americas so they're not facing as many of those challenges. So they did lower guidance for the rest of it is >> the second time they've >> lowered 20. However, they kind of attributed that thio the nan supply oversupply and they say happy Matt to flatten out quickly, say they're >> not worried about the macro. I mean, look, if if the economy is good and is booming and people are spending money on cap ex. That's good for even a high growth company. They're basically positioning to the street that if if the economy does turn down and there's a softness at the macro, they'll actually gain share more rapidly. Which, by the way, is probably true. But look at the rising tide lifts all boats. Nobody wants to see Ah recession. Having said that, well, it's interesting. When you saw Pure Lower, its guidance stock took a hit, and then net app, I'd be him. All these other company you have to see a deli emcee they announced in the market said, Wow, pure must be doing really well compared to these other guys. So it's come back in a big way. My opinion pure is going to in the e. T. Our data shows this from a spending intentions Pure is going to continue to gain share at a much, much more rapid pace of the other. The other guys, from a product standpoint, delicacies consolidating its product portfolio, trying to lower its cost. H. P E is really focused on limbo. IBM needs a mainframe product cycle to get back going, Ned APS facing its challenges and its kind of tweaking its go to market model. So all these other companies air dealing with sort of some structural changes. Where is pure is like put the put the foot on the gas and accelerate no pun intended. And so I think they're gonna continue to gain share for quite quite a number of quarters. >> I want to talk about sustainability before we break. And one of the things that Charlie talked about on his keynote is in terms of the modern data experience, he said. It was three things. It was simple, seamless and sustainable, an inch sustainable. You really started talking about the evergreen model that they launched a while ago that seems to be really sticky with organizations. He also talked about sustainability is a lot of other organization I need to adjust in terms of, you know, waste and carbon emissions and things like that. But I'm just curious, since Pierre is much smaller than the competitors that you mentioned and a lot more focus, obviously all in on flash. Where does the evergreen model, in your opinion, give them that tail winter? That advantage? >> Well, the Evergreen model was first of all brilliant marketing strategy and a business strategy Because if you think about the traditional storage vendors, they make so much money on maintenance, they would never have done this unless pure force them to do it. Because they're making so much cash on the maintenance. You know, it's it's you. You put the storage array in and we're just gonna charge you maintenance. And if you're not on the maintenance contract, sorry. You don't get all the software upgrades, everything else. So it's just this, you know, this lock in strategy, which is work brilliantly for two decades pure, comes along and says, Hey, where? Software driven. We're gonna allow you to get all the modern software. As long as you're got a subscription with us, we'll swap out your controller for free. You know, the competitors hate that. There's all kinds of nuances and stuff, but it worked, and customers love it. And so it's very strong, and it's a fundamental as they said, they got $600 million in deferred revenue, largely from that evergreen model. So they, you know, Charlie mentioned first for non disruptive upgrades. First for cloud management, first for a I ops first for always on que Os first with always on encryption, and if they're really the first, we're probably the first big company. They got a lot of attention there. Last thing, it's it's a four big announcements today. There's a I ready infrastructure, airy. They're doing some stuff they were first to announce with video. You know, a year or so ago, they got cloud offerings. Ah, block storage for AWS. And they've got clout Snap for Azure, which is actually pretty hot. It's backup on Azure, and they got product extensions. They got cheaper flash with a flash or a C for capacity. And then they have extended their all flashy raise their flash played etcetera with storage class, memory and and storage memory. And in this, this as a service model. Those are really the four big announcements that were gonna dig into all this week. >> We are, and we're gonna be talking with This is a great event. Two days. The cube is going to be here. We have seven pure customers to talk to you that I think kind of a record, at least in my cube experience of the last >> AWS always puts a lot of customers up too. You know. All >> right, well, there's no better validation than the success of a brand, whether we're talking about Evergreen or their first or the reaction of the market to bringing flash down to satya prices. So excited to dig into customer stories with you, Dave. Course we'll talk to some partners who got c'mon slung Cisco somebody else and probably forgetting. And, of course, some of the pure, exactly gonna be exciting two days with you and looking for two days >> looking forward to at least a great >> all right stick around. Dave and I will be right back with our first guest, Charlie Giancarlo, chairman and CEO of Pier Storage. Stick around, come back Mawston in just a minute.

>> live from San Francisco, celebrating 10 years of high tech coverage. It's the Cube covering Veum World 2019. Brought to you by VM Wear and its ecosystem partners. >> Welcome back, everyone. Day three Q coverage here in San Francisco for V emerald. 2019. I'm just for a student, Um, in here with David Lan. Take days free kick off. We have two sets wall to wall coverage. Guys, this is the time where we get to take a deep breath two days under our belts look and reflect on all the news we've covered in a dark to last analysis sessions but also kind of riff on. We got two nights in hallway conversations we learned a lot of the party means do. I learned a lot last night. Dave. I know you. You learned a lots, do you, Thomas? When things that the chatter Certainly twittersphere hashtag the emerald. A lot of action on there, but it's the hallway conversations. It's the party that people have a few cocktails in them day that you start to hear the truth. The real deal comes out, >> No doubt. And and again Jon Stewart, there's real concern over from the from the practitioners we talked to about this acquisition spree. Are they going to be integrated? Are they going to just throw all this stuff at us and keep jamming products and service is down our throats? Or is this going to be a coherent set of solutions that solves our problem? We also had a little little interesting side conversation about, you know, Snowflake, Frank's lumens new company and how basically Frank is bringing back the Pirates from Data Domain and from service. Now Mike Scarpelli is over there. He's a rock star. CFO Beth White is eventually is back over there. And Frank's Lupin. He's the guy who takes companies from, you know, 100 million to a billion, so that's gonna be >> very serious money making him going on there. >> We have been following his career for a number of years now. We watched him take data domain. We watched him pull that that rabbit out of his hat with the sale with net app, and then the emcee swooped in. And then we saw what he did service. Now we've documented this is an individual to watch, you know, >> he's a world class management team member I mean, he's executes. >> Oh, yeah, no doubt. And >> he has >> a formula that's been proven and in time and time again. And to me, the biggest testament salute Min is the success of the continued success of Data Domain. After he left Hey, he really helped clean up the emcees data protection mess. Um, and then the second thing is, look at service now is performance after he left, I haven't missed a beat. And, yeah, John Donahoe, great executive and all, but it's because Frank's Lubin had everything in place and that was a really well run >> dry. And they got a nice little oracle like business model. >> Yeah. No, you're right. They kind of, you know, the big complaint now as well. Your price is too high that Oracle. >> What have you learned? What you hear in the hallways? I mean, a lot of chatter. >> Yes, John, we We've been reflecting back a lot. It's 10 years in 10th year of the Cube here and back here in San Francisco. The new Mosconi, our third show that I've been at this year in Mosconi and we always track year to year. But since it's been what 45 years since we were here for VM World. When I talked to the average vendor. When I talk to you know, the analysts here were like, Oh, thank goodness we're not in Vegas. When I talked to the average attendee, they're like, Oh my God, what happened to San Francisco since last time we were here? It is too expensive. And the experience walking around San Francisco has really not nearly as nice as it might have been five or 10 years ago. And many of them we were talking to, Ah, woman that runs an event that has been Vegas in San Francisco. And she said, Oh, we did in San Francisco and got tremendous feedback. Don't do it there again. Brings back to Vegas both for costs and the enjoyment of being around the environment. >> Where was a shit show here in San Francisco is horrible right now, I got to say to your right eye was walking this morning from my hotel. Literally. A homeless person passed out the middle of the sidewalk. Um, your smells like urine. It's P, and it's It's just I mean, it's really bad this tense now. I mean City of San Francisco is gonna do some. Mosconi, by the way, has been rebuilt. Awesome. So, you know, in terms of the new Mosconi stew, that's a serious upgrade. Hotel rooms are scarce and just the homeless problem. It's just ridiculous. I don't know what they're >> doing. So one of the other big things when I was reflecting coming into here two years ago when VM wear really started down right before the war on AWS announcement, they made a big announcement. IBM because they had sold off the cloud air toe Oh, VH And for two years Oh, VH was a big partner, Talked about that transition, said we handed off this great asset over h isn't here at the show. I was like, Oh, my gosh, you know, that was, you know, such a big story and other companies like New >> 12. That's good. One lets someone who's not at the show and why. Yeah, oh, VH wired to hear >> They aren't here because, well, they've got customers. More of them are in Europe That was supposed to be a big entry into the United States. Obviously, it wasn't as valuable for them to be here, even though I'm sure they're still part of that service provider ecosystem. They have other big one for us, and we've had on the Cube Nutanix. You know, we've had Dheeraj Pandey. First time we had him on was that this show is still the majority of Nutanix. Customers are VM where customers I've talked to lots of Nutanix customers at the event, even part of the analyst event. Some of the customers I talked to were like, Oh, yeah, my hardware stacks Nutanix and amusing NSX. And I'm using other things there. But they are not here. They're not allowed to be at the show. And I >> mean, they were blatantly told they can't come. >> They can't come here. They can't come to the regional things. They can't do the partner things. So that that that relationship is definitely >> from red hat. What kind of presence have you seen from Red s? >> So their number companies like red Hat that they're kept at a lower level of sponsorship. So they're here. They participate, you know. Open shift, of course, is you know, big enemy for cloud native. Lots of open shift runs on V sphere. So many of those companies that are part of the ecosystem, but not the ones that they want to celebrate and put front and forward. So it's always interesting kind of walk around on those. Even Microsoft is an interesting relationship for, you know, decades with the M wear. You know, of course, azure they partner with. But hyper V was long a competitors. So, you know, we understand those competitive relationships >> could be interesting. Stew and Dave on the ecosystem Jerry Chan Day when we just doing my interview yesterday on the other set mentioned that the ecosystem reinvents itself the community. The question now is with Delhi emceeing Del Technologies obviously heard Michael Dell essentially laying out his plan, which is he's got. He's trying to keep people distracted, but the bottom line is going to top people putting together the cloud right well service provider model. So you know, that's what he's gonna be a big impact. VM wear the crown jewel of Del Technologies certainly is looking more and more like It's >> well and yesterday remember the first VM world we did in 2010? It was It was del I mean course and see only the time Who's Del? It was H p Yes, the emcee was there, but it was net app. I mean, everybody could've had equal standing yesterday at the keynotes. It was Project Dimension of V M, where cloud on Delhi emcee and long keynotes >> data protection into the VM were >> also it's It's all very heavily, you know, Jeff Clarke has his his thumb on, you know, the the deli emcee folks pushing that through Veum where Michael is orchestrating the whole thing. Pat obviously is allowing it. I was sitting in the audience Next next, Some folks from Netapp they're like, you know, this kind of a bummer. Calvin Sito from h p e tweeted Wow how to stick it in the face of your ecosystem partners. He then later went on Facebook saying, Hey, I love this ecosystem, so sort of balancing it out because, you know, he wants to be a good, good citizen, but clearly the ecosystem partners who basically brought VM where you know, to the the position where it's in through distribution, our little ruffled. Right now you can't blame him, But at the same time, the mandate is clear. Michael Dell is driving his products and his solutions through VM were period the end. And, you know, if you don't like it, leave >> right. They had such great success with V San and VX rail in that joint product development and go to market. If they can replicate that with a number of other solutions, they get that the synergies. If >> you don't like it, don't leave. That leave is worse than that. They say you don't like it, you know, invited you. But >> how about what Pat said yesterday in the Cube about when they announced on Gwen heavily leaned into V san. He said publicly that Joe Tucci was pissed and I hate her. They were going at it so that so that shows you the change, right? I mean, so so so e m. C. When it owned VM where was very cautious about allowing Veum wears a software company to drive value somewhere Now is just acting like a software company. >> Well, I think I mean, I learned last night's do, um and you can appreciate this. I learned that the top executives of'em where are looking heavily and working hard at understanding and drive them kubernetes cloud native thing because this is not a throwaway deal. This is not a you know, far anything that they are investing. They get their top brass tech execs on kubernetes fto. Two big players job. Ada, Craig McCaw calumnies. We know interviews since day one, but I think the cloud native thing is going to be interesting. And I think it's gonna be evolution. I think there's gonna be a very dynamic road thing's gonna be a series, of course, corrections, but directionally they're all in on. They're going for it, they're not. >> And actually, I had a, you know, good discussion with Chad Attack. It's a good friend of the program now working at GM, where for the first time, but came from AMC worked at Pivotal. He said, culturally, such a gap between VM wear don't have to touch your app, you know, move everything along lifted shift is nice and easy versus pivotal, you know must go completely You know, dual programming, you know, agile everything there, so bridging those because there's multiple paths and the rail pharaoh announcement is that would be cloud native stuff that won't necessarily go to the EMS. We're going to retool V EMS to now be a platform for kubernetes so that they have a few passed to bridge or to build towards the future. Here's the >> answer strategy. Discussion That and Rayo Farrell was now running Cloud native. Think this is just really >> ties in the interesting discussion that I had with some folks was that you've essentially got well, Jerry Chen brought this up last time we had him on it and reinventing because >> we have >> a conversation all the time about this Amazon have to go up the stack. And Jerry Chen made a really he said, Look, it they're not They're not gonna become an e r peace offer company. What they're gonna do is give tools to the builders so that they can disrupt Europea. They can disrupt service. Now they can disrupt Oracle. That's their strategy, at least for now. Okay, so what does that say? I think the strategy discussion inside of'em were and and l is about by whatever clouds gonna be 35 to 50% of the market. Fine. And the cloud native abs. Great. But you got this mission critical. E r p is an example. Database saps that are on Prem. What we have to do is keep them there. So we're going to sell to the incumbents and we're going to give them cloud native tools, toe modernize. Those APS have build new acts on Prem, and that's the that is the collision course that's coming. So the big question is, can the cloud native guys and AWS disrupt that >> huge? I've always said I'm is on and like the way they're coming in, a tsunami is coming in. And who's gonna build that sea wall to stop it right? And that's essentially only hope that these guys have. You look at all the competitive strategy. Was Oracle. Whoever just gotta stop it? You can't like >> the sea >> wall. That's a great building. A sea wall I was, I would say, is Is that you know, they're only hope at this point is to, you know, get in the game because see Amazon is the stack. They're not really moving up the stack. You hear that from Cisco and Dale and other people? That's where it's a game of musical chairs. Right now, the music's you know, there's still a lot of shares left, but soon chairs getting pulled away and Cisco Deli emcee VM, where they're all fighting for these big chairs. And one >> thing >> we talked about yesterday is that VM wears very directional, product driven. Otherwise they pick a direction, is a statement of direction and don't really have a lot of meat on the bone. In the product side, Sister is actually in market with service providers there in market with NETWORKINGS to this no vapor there that's installed basis and incumbent business. You have developers Esso Baton talks about suffered to find data center, suffer defined networking. I mean, come on, Really. I mean, they're getting there, but it didn't have the complete solution. Cisco >> Coming into this week, I expected here a bit more about the progress and all the customers of'em wear on AWS and feel like Vienna actually downplayed the AWS. We know what a strong partnership it is at every Amazon show we go to, and we got a lot of them Now there's a big presence there, and I can talk to customers that are starting to roll out and move there, but it felt like it was David's. You pointed out there are some messaging differences when you talk about multi cloud and how they're positioning it. So, you know, put those >> here Amazon. If your Amazon you're not happy with Microsoft Dell Technologies World The big announcement that was positioned a cloud foundation Although it wasn't a joint engineering, But the press picked it up as though the Amazon deal has been replicated with Microsoft and Google. I mean, you gotta be gotta be hurt if your Amazon >> So I've I've just been taking notes this this event, there's I've noted at least five major points of difference between a W s what they're saying and their philosophy and the anywhere so eight of us. We know they they don't talk multi cloud. They've told their partners, If you're doing joint marketing with us, you cannot say multi cloud aws that reinforce John. We saw this. Steven Schmidt said that this narrative that security is broken doesn't help the industry. Security's not broken, you know, we're doing great. The state of the nation is wonderful. Aws Matt. Not really. I agree. By the way. Uh, that's not the case. I agree with Pat saying Security's broken. It's a do over VM where wants to be the best infrastructure and developer software company. Who's the best infrastructure and software development platform. Eight of us. The M one wants to be the security cloud. Who's the security cloud? Eight of us. And then, uh, they talked about 10,000 cloud data Listeners are those really cloud data centers at Vienna. And the last one was this was a little nuanced Veum was talking about We know about migrating, modernize, lifted ship shift and then modernize The empire's not talking about modernize and then migrate. If you want to. I totally in conflict >> as a collision course. That's got Look, look, look at the data center was Look, it looks like we're going. We're going away, right to the data center. Staying. That's music to Michael Dell's VM. Where's years they live in the Data City? Do you pointed out yesterday? Data Senate goes away. So does begin. Where's business? >> One of things. I'm surprised. I'm wondering you both have talked to some of the service fighter telco pieces of'em, where they're doing that project dimension, which is the VM where stack on del that looks just like outposts on. And I know they had deployments on this for months. If I was them, you know, it's everybody's hearing about Outpost to talk about it, being more like we're already doing it in. This has you in that Amazon ecosystem. It might be a little strong for the Amazon story, but have you been hearing any about that this week? >> I think they keep a lot of cards close to the chest, but it's clear from the announces that they're doing certainly del the VM, where on Delhi Emcee Cloud or whatever it's called, it's not a cloud but their their infrastructure that is essentially a managed service. That's gonna be really strong for I t. People, because I think that the value proposition of going toe i t and saying we have this, you don't need to do anything. It's very strong, I mean, because I didn't want him >> and justified because this the project to mention it is that single, that thinner stack like what we saw on Outpost in the Amazon video, as opposed to Veum, where cloud on AWS, which is the full C i r h d. I stack. >> I haven't heard anything still on >> well, but the conversation I had from from Vienna, where standpoint, they could make money on that manage service. That's why it's the preferred partnership, right? And so that's their part of their cloud play. If you don't have a public cloud, I said this yesterday, you have to redefine Cloud and you have to get into cloud service. And that's what's happening. And that's exactly what's happening. And what I like about what V M where is doing is they are transitioning their model to a sass based model. Now it's only 12 and 1/2 percent of the revenues today. But both pivotal and carbon black are gonna add, you know, ah, $1,000,000,000 next year to that subscription based $3 billion in year two. Um, and so you know, Pat said the other day, I think we could get to 50 50. I don't necessarily think in the near term we're gonna go beyond that. It's not the Adobe >> way could be critical. Critical of'em were in some areas, but I gotta tell you their core strength that they went to a software operators on the data center friend of prices. That's been a great strategy. Focusing on their core building from there is Jerry 10 point out adding other products so their software company, So I think they're really got a good solution. And you? The data shows that people are increasing their spending, John. Just one based on >> that. Because I had a couple of really good conversation with customers, customers that would deploy VCF So they've got the full stack on there. So using H C I, but not necessarily on Dell hardware, could be Cisco Hardware. Could be HB hardware in the like or they're buying NSX. But the virtual ization team owns it, and they get kind of put in. A box storage team says That's not the array I'm used to buy. Well, maybe I'll put a pure storage box and put it in between. The networking team says I'm refreshing my Cisco hardware. You know, we're like, but we have NSX, and it's great. Well, you can use NSX over there. We're going to use a C I over here. So the term I heard from a number of customers is organizations still have hardware to find roles, and they're trying to figure out how to move to that software world. Which hurts me, cause I spent years trying to get beyond silos and helping people you know, move through those environments. And still, in 2019 it's a big challenge. That organizational shift is we know how tough that is. >> So just couple points in the data, because you're right. There are some countervailing trends, though. So, yes, people are spending Maurin VM where in the second half. But at the same time, the data shows that cloud is hurting VM wear spend. So this that's kind of gets interesting. Our containers gonna kill VM where? No, there's no evidence that container's air hurting VM where spend. But there's clearly risks there, you know, as we've talked about who's best position of multi cloud. Well, it turns out three guys with the public cloud are best positioned in multi Google and Microsoft on, and so and then the pivotal thing is interesting, and ties ties all this in so that the data is actually really interesting. It's like you're seeing tugs at both sides, and I think your your notion about the seawall is dead on. That's exactly what they're doing. >> You see that with Oracle's trying to stop jet. I just want they can't win this one to stop Amazon just on the tracks gave great data. Great reporting, Stoop. Good observations. Get all the day that night and parties we're gonna certainly keep doing that. Day three of wall to wall coverage here. You bringing to the insights and interviews here live from the Emerald Twin 19. Stay with us for more after this short break.

>> from our studios in the heart of Silicon Valley, Palo Alto, California It is a cute conversation. >> Welcome to this Cube conversation here in Palo Alto, California. At the Cube Studios. I'm John for a host of the Cube. We're here for a company profile coming called De Monte. Here. Tom Barton, CEO. As V M World approaches a lot of stuff is going to be talked about kubernetes applications. Micro Service's will be the top conversation, Certainly in the underlying infrastructure to power that Tom Barton is the CEO of De Monte, which is in that business. Tom, we've known each other for a few years. You've done a lot of great successful ventures. Thehe Monty's new one. Your got on your plate here right now? >> Yes, sir. And I'm happy to be here, so I've been with the Amante GIs for about a year or so. Um, I found out about the company through a head turner. Andi, I have to admit I had not heard of the company before. Um, but I was a huge believer in containers and kubernetes. So has already sold on that. And so I had a friend of mine. His name is Brian Walden. He had done some massive kubernetes cloud based deployments for us at Planet Labs, a company that I was out for a little over three years. So I had him do technical due diligence. Brian was also the number three guy, a core OS, um, and so deeply steeped in all of the core technologies around kubernetes, including things like that CD and other elements of the technology. So he looked at it, came back and gave me two thumbs up. Um, he liked it so much that I then hired him. So he is now our VP of product management. And the the cool thing about the Amanti is essentially were a purpose built solution for running container based workloads in kubernetes on premises and then hooking that in with the cloud. So we believe that's very much gonna be a hybrid cloud world where for the major corporations that we serve Fortune 500 companies like banks like energy and utilities and so forth Ah, lot of their workload will maintain and be maintained on premises. They still want to be cloud compatible. So you need a purpose built platform to sort of manage both environments >> Yeah, we certainly you guys have compelling on radar, but I was really curious to see when you came in and took over at the helm of the CEO. Because your entrepreneurial career really has been unique. You're unique. Executive. Both lost their lands. And as an operator you have an open source and software background. And also you have to come very successful companies and exits there as well as in the hardware side with trackable you took. That company went public. So you got me. It's a unique and open source software, open source and large hardware. Large data center departments at scale, which is essentially the hybrid cloud market right now. So you kind of got the unique. You have seen the view from all the different sides, and I think now more than ever, with Public Cloud certainly being validated. Everyone knows Amazon of your greenfield. You started the cloud, but the reality is hybrid. Cloud is the operating model of the genesis. Next generation of companies drive for the next 20 to 30 years, and this is the biggest conversation. The most important story in tech. You're in the middle of it with a hot start up with a name that probably no one's ever heard of, >> right? We hope to change that. >> Wassily. Why did you join this company? What got your attention? What was the key thing once you dug in there? What was the secret sauce was what Got your attention? Yes. So to >> me again, the market environment. I'm a huge believer that if you look at the history of the last 15 years, we went from an environment that was 0% virtualized too. 95% virtualized with, you know, Vienna based technologies from VM Wear and others. I think that fundamentally, containers in kubernetes are equally as important. They're going to be equally as transformative going forward and how people manage their workloads both on premises and in the clouds. Right? And the fact that all three public cloud providers have anointed kubernetes as the way of the future and the doctor image format and run time as the wave of the future means, you know, good things were gonna happen there. What I thought was unique about the company was for the first time, you know, surprisingly, none of the exit is sick. Senders, um, in companies like Nutanix that have hyper converse solutions. They really didn't have anything that was purpose built for native container support. And so the founders all came from Cisco UCS. They had a lot of familiarity with the underpinnings of hyper converged architectures in the X 86 server landscape and networking, subsistence and storage subsystems. But they wanted to build it using the latest technologies, things like envy and me based Flash. Um, and they wanted to do it with a software stack that was native containers in Kubernetes. And today we support two flavors of that one that's fully open source around upstream kubernetes in another that supports our partner Red hat with open shift. >> I think you're really onto something pretty big here because one of things that day Volonte and Mine's too many men and our team had been looking at is we're calling a cloud to point over the lack of a better word kind of riff on the Web to point out concept. But cloud one daughter was Amazon. Okay, Dev ops agile, Great. Check the box. They move on with life. It's always a great resource, is never gonna stop. But cloud 2.0, is about networking. It's about securities but data. And if you look at all the innovation startups, we'll have one characteristic. They're all playing in this hyper converged hardware meat software stack with data and agility, kind of to make the original Dev ops monocle better. The one daughter which was storage and compute, which were virtualization planes. So So you're seeing that pattern and it's wide ranging at security is data everything else So So that's kind of what we call the Cloud two point game. So if you look at V m World, you look at what's going on the conversations around micro service red. It's an application centric conversation in an infrastructure show. So do you see that same vision? And if so, how do you guys see you enabling the customer at this saying, Hey, you know what? I have all this legacy. I got full scale data centers. I need to go full scale cloud and I need zero and disruption to my developer. Yeah, so >> this is the beauty of containers and kubernetes, which is they know it'll run on the premises they know will run in the cloud, right? Um and it's it is all about micro service is so whether they're trying to adopt them on our database, something like manga TB or Maria de B or Crunchy Post Grey's, whether it's on the operational side to enable sort of more frequent and incremental change, or whether it's on a developer side to take advantage of new ways of developing and delivering APS with C I. C. D. Tools and so forth. It's pretty much what people want to do because it's future proofing your software development effort, right? So there's sort of two streams of demand. One is re factoring legacy applications that are insufficiently kind of granule, arised on, behave and fail in a monolithic way. Um, as well as trying to adopt modern, modern, cloud based native, you know, solutions for things like databases, right? And so that the good news is that customers don't have to re factor everything. There are logical break points in their applications stack where they can say, Okay, maybe I don't have the time and energy and resource is too totally re factor a legacy consumer banking application. But at least I can re factor the data based here and serve up you know container in Kubernetes based service is, as Micro Service's database is, a service to be consumed by. >> They don't need to show the old to bring in the new right. It's used containers in our orchestration, Layla Kubernetes, and still be positioned for whether it's service measures or other things. Floor That piece of the shirt and everything else could run, as is >> right, and there are multiple deployments scenarios. Four containers. You can run containers, bare metal. Most of our customers choose to do that. You can also run containers on top of virtual machines, and you can actually run virtual machines on top of containers. So one of our major media customers actually run Splunk on top of K B M on top of containers. So there's a lot of different deployment scenarios. And really, a lot of the genius of our architecture was to make it easy for people that are coming from traditional virtualized environments to remap system. Resource is from the bm toe to a container at a native level or through Vienna. >> You mentioned the history lesson there around virtualization. How 15 years ago there was no virtualization now, but everything's virtualized we agree with you that containers and compares what is gonna change that game for the next 15 years? But what's it about VM? Where would made them successful was they could add virtualization without requiring code modification, right? And they did it kind of under the covers. And that's a concern Customs have. I have developers out there. They're building stacks. The building code. I got preexisting legacy. They don't really want to change their code, right? Do you guys fit into that narrative? >> We d'oh, right, So every customer makes their own choice about something like that. At the end of the day, I mentioned Splunk. So at the time that we supported this media customer on Splunk, Splunk had not yet provided a container based version for their application. Now they do have that, but at the time they supported K B M, but not native containers and so unmodified Splunk unmodified application. We took them from a batch job that ran for 23 hours down the one hour based on accelerating and on our perfect converged appliance and running unmodified code on unmodified K B m on our gear. Right, So some customers will choose to do that. But there are also other customers, particularly at scale for transaction the intensive applications like databases and messaging and analytics, where they say, You know, we could we could preserve our legacy virtualized infrastructure. But let's try it as a pair a metal container approach. And they they discovered that there's actually some savings from both a business standpoint and a technology tax standpoint or an overhead standpoint. And so, as I mentioned most of our customers, actually really. Deficiencies >> in the match is a great example sticking to the product technology differentiate. What's the big secret sauce describe the product? Why are you winning in accounts? What's the lift in your business right now? You guys were getting some traction from what I'm hearing. Yeah, >> sure. So look at the at the highest level of value Proposition is simplicity. There is no other purpose built, you know, complete hardware software stack that delivers coup bernetti coproduction kubernetes environment up and running in 15 minutes. Right. The X 86 server guys don't really have it. Nutanix doesn't really have it. The software companies that are active in this space don't really have it. So everything that you need that? The hardware platform, the storage infrastructure, the actual distribution of the operating system sent the West, for example. We distribute we actually distributed kubernetes distribution upstream and unmodified. And then, very importantly, in the combinations landscape, you have to have a storage subsystem in a networking subsystem using something called C s I container storage interface in C N I. Container networking interface. So we've got that full stack solution. No one else has that. The second thing is the performance. So we do a certain amount of hardware offload. Um, and I would say, Amazons purchase of Annapurna so Amazon about a company called Annapurna its basis of their nitro technology and its little known. But the reality is more than 50% of all new instances at E. C to our hardware assisted with the technology that they thought were offloaded. Yeah, exactly. So we actually offload storage and network processing via to P C I. D cards that can go into any industry server. Right? So today we ship on until whites, >> your hyper converge containers >> were African verge containers. Yeah, exactly. >> So you're selling a box. We sell a box with software that's the >> with software. But increasingly, our customers are asking us to unbundle it. So not dissimilar from the sort of journey that Nutanix went through. If a customer wants to buy and l will support Del customer wants to buy a Lenovo will support Lenovo and we'll just sell >> it. Or have you unbundled? Yetta, you're on bundling. >> We are actively taking orders for on bundling at the present time in this quarter, we have validated Del and Lenovo as alternate platforms, toothy intel >> and subscription revenue. On that, we >> do not yet. But that's the golden mask >> Titanic struggle with. So, yeah, and then they had to take their medicine. >> They did. But, you know, they had to do that as a public company. We're still a private company, so we can do that outside the limelight of the public >> markets. So, um, I'm expecting that you guys gonna get pretty much, um I won't say picked off, but certainly I think your doors are gonna be knocked on by the big guys. Certainly. Delic Deli and see, for instance, I think it's dirty. And you said yes. You're doing business with del name. See, >> um, we are doing as a channel partner and as an OM partner with them at the present time there, I wouldn't call them a customer. >> How do you look at V M were actually there in the V M, where business impact Gelsinger's on the record. It'll be on the Cube, he said. You know Cu Bernays the dial tone of the Internet, they're investing their doubling down on it. They bought Hep D O for half a billion dollars. They're big and cloud native. We expect to see a V M World tons of cloud Native conversation. Yes, good, bad for you. What's the take? The way >> legitimizes what we're doing right? And so obviously, VM, where is a large and successful company? That kind of, you know, legacy and presence in the data center isn't gonna go anywhere overnight. There's a huge set of tooling an infrastructure that bm where has developed in offers to their customers. But that said, I think they've recognized in their acquisition of Hep Theo is is indicative of the fact that they know that the world's moving this way. I think that at the end of the day, it's gonna be up to the customer right. The customer is going to say, Do I want to run containers inside? Of'em? Do I want to run on bare metal? Um, but importantly, I think because of, you know, the impact of the cloud providers in particular. If you think of the lingua franca of cloud Native, it's gonna be around Dr Image format. It's gonna be around kubernetes. It's not necessarily gonna be around V M, d K and BMX and E s X right. So these are all very good technologies, but I think increasingly, you know, the open standard and open source community >> people kubernetes on switches directly is no. No need, Right. Have anything else there? So I gotta ask you on the customer equation. You mentioned you, you get so you're taking orders. How you guys doing business today? Where you guys winning, given example of of why people while you're winning And then for anyone watching, how would they know if they should be a customer of yours? What's is there like? Is there any smoke signs and signals? Inside the enterprise? They mentioned batch to one hour. That's just music. Just a lot of financial service is used, for instance, you know they have timetables, and whether they're pulling back ups back are doing all the kinds of things. Timing's critical. What's the profile customer? Why would someone call you? What's the situation? The >> profile is heavy duty production requirements to run in both the developer context and an operating contact container in kubernetes based workloads on premises. They're compatible with the cloud right so increasingly are controlled. Plane makes it easy to manage workloads not just on premises but also back and forth to the public cloud. So I would argue that essentially all Fortune 500 companies Global 1000 companies are all wrestling with what's the right way to implement industry standard X 86 based hardware on site that supports containers and kubernetes in his cloud compatible Right? So that that is the number one question then, >> so I can buy a box and or software put it on my data center. Yes, and then have that operate with Amazon? Absolutely. Or Google, >> which is the beauty of the kubernetes standards, right? As long as you are kubernetes certified, which we are, you can develop and run any workload on our gear on the cloud on anyone else that's carbonated certified, etcetera. So you know that there isn't >> given example the workload that would be indicative. >> So Well, I'll cite one customer, Right. So, um, the reason that I feel confident actually saying the name is that they actually sort of went public with us at the recent Gardner conference a week or so ago when the customer is Duke Energy. So very typical trajectory of journey for a customer like this, which is? A couple years ago, they decided that they wanted re factor some legacy applications to make them more resilient to things like hurricanes and weather events and spikes in demand that are associated with that. And so they said, What's the right thing to do? And immediately they pick containers and kubernetes. And then he went out and they looked at five different vendors, and we were the only vendor that got their POC up and running in the required time frame and hit all five use case scenarios that they wanted to do right. So they ended up a re factoring core applications for how they manage power outages using containers and kubernetes, >> a real production were real. Production were developing standout, absolutely in a sandbox, pushing into production, working Absolutely. So you sounds like you guys were positioned to handle any workload. >> We can handle any workload, but I would say that where we shine is things that transaction the intensive because we have the hardware assist in the I o off load for the storage and the networking. You know, the most demanding applications, things like databases, things like analytics, things like messaging, Kafka and so forth are where we're really gonna >> large flow data, absolutely transactional data. >> We have customers that are doing simpler things like C I. C D. Which at the end of the day involves compiling things right and in managing code bases. But so we certainly have customers in less performance intensive applications, but where nobody can really touch us in morning. What I mean is literally sort of 10 to 30 times faster than something that Nutanix could do, for example, is just So >> you're saying you're 30 times faster Nutanix >> absolutely in trans actually intensive applications >> just when you sell a prescription not to dig into this small little bit. But does the customer get the hardware assist on that as well >> it is. To date, we've always bundled everything together. So the customers have automatically got in the heart >> of the finest on the hard on box. Yes. If I buy the software, I got a loaded on a machine. That's right. But that machine Give me the hardware. >> You will not unless you have R two p C I. D. Cards. Right? And so this is how you know we're just in the very early stages of negotiating with companies like Dell to make it easy for them to integrate her to P. C. I. D cards into their server platform. >> So the preferred flagship is the is the device. It's a think if they want the hardware sit, that they still need to software meeting at that intensive. It's right. If they don't need to have 30 times faster than Nutanix, they can just get the software >> right, right. And that will involve RCS. I plug in RCN I plug in our OS distribution are kubernetes distribution, and the control plane that manages kubernetes clusters >> has been great to get the feature on new company, um, give a quick plug for the company. What's your objectives? Were you trying to do. I'll see. Probably hiring. Get some financing, Any news, Any kind of Yeah, we share >> will be. And we will be announcing some news about financing. I'm not prepared to announce that today, but we're in very good shape with respected being funded for our growth. Um, and consequently, so we're now in growth mode. So today we're 55 people. I want to double back over the course of the next 4/4 and increasingly just sort of build out our sales force. Right? We didn't have a big enough sales force in North America. We've gotta establish a beachhead in India. We do have one large commercial banking customer in Europe right now. Um, we also have a large automotive manufacturer in a pack. But, um, you know, the total sales and marketing reach has been too low. And so a huge focus of what I'm doing now is building out our go to market model and, um, sort of 10 Xing the >> standing up, a lot of field going, going to market. How about on the biz, Dev side? I might imagine that you mentioned delicate. Imagine that there's a a large appetite for the hardware offload >> absolution? Absolutely. So something is. Deb boils down to striking partnerships with the cloud providers really on two fronts, both with respect the hardware offload and assist, but also supporting their on premises strategy. So Google, for example, is announced. Antos. This is their approach to supporting, you know, on premises, kubernetes workloads and how they interact with cool cloud. Right. As you can imagine, Microsoft and Amazon also have on premises aspirations and strategies, and we want to support those as well. This goes well beyond something like Amazon Outpost, which is really a narrow use case in point solution for certain markets. So cloud provider partnerships are very important. Exit E six server vendor partnership. They're very important. And then major, I s V. So we've announced some things with red hat. We were at the Red Hat Open summit in Boston a few months ago and announced our open ship project and product. Um, that is now G a. Also working with eyes, he's like Maria de be Mondo di B Splunk and others to >> the solid texting product team. You guys are solid. You feel good on the product. I feel very good about the product. What aboutthe skeptics are out there? Just to put the hard question to use? Man, it's crowded field. How do you gonna compete? What do you chances? How do you like your chances known? That's a very crowded field. You're going to rely on your fastballs, they say. And on the speed, what's the what's What's your thinking? Well, it's unique. >> And so part of the way or approve point that I would cite There is the channel, right? So when you go to the channel and channel is afraid that you're gonna piss off Del or E M. C or Net app or Nutanix or somebody you know, then they're not gonna promote you. But our channel partners air promoting us and talking about companies like Life Boat at the distribution level. Talking about companies like CD W S H. I, um, you know, W W t these these major North American distributors and resellers have basically said, Look, we have to put you in our line car because you're unique. There is no other purpose built >> and why that, like they get more service is around that they wrap service's around it. >> They want to kill the murder where they want to. Wrap service's around it, absolutely, and they want to do migrations from legacy environments towards Micro Service's etcetera. >> Great to have you on share the company update. Just don't get personal. If you don't mind personal perspective. You've been on the hardware side. You've seen the large scale data centers from racquetball and that experience you'll spit on the software side. Open source. What's your take on the industry right now? Because you're seeing, um, I talked a lot of sea cells around the security space and, you know, they all say, Oh, multi clouds a bunch of B s because I'm not going to split my development team between four clouds. I need to have my people building software stacks for my AP eyes, and then I go to the vendors. They support my AP eyes where you can't be a supplier. Now that's on the sea suicide. But the big mega trend is there's software stacks being built inside the premise of the enterprise. Yes, that not mean they had developers before building. You know, Kobol, lapse in the old days, mainframes to client server wraps. But now you're seeing a Renaissance of developers building a stack for the domain specific applications that they need. I think that requires that they have to run on premise hyper scale like environment. What's your take on it >> might take is it's absolutely right. There is more software based innovation going on, so customers are deciding to write their own software in areas where they could differentiate right. They're not gonna do it in areas that they could get commodities solutions from a sass standpoint or from other kinds of on Prem standpoint. But increasingly they are doing software development, but they're all 99% of the time now. They're choosing doctor and containers and kubernetes as the way in which they're going to do that, because it will run either on Prem or in the Cloud. I do think that multi cloud management or a multi multi cloud is not a reality. Are our primary modality that we see our customers chooses tons of on premises? Resource is, that's gonna continue for the foreseeable future one preferred cloud provider, because it's simply too difficult to to do more than one. But at the same time they want an environment that will not allow themselves to be locked into that cloud bender. Right? So they want a potentially experiment with the second public cloud provider, or just make sure that they adhere to standards like kubernetes that are universally shared so that they can't be held hostage. But in practice, people don't. >> Or if they do have a militant side, it might be applications. Like if you're running office 3 65 right, That's Microsoft. It >> could be Yes, exactly. On one >> particular domain specific cloud, but not core cloud. Have a backup use kubernetes as the bridge. Right that you see that. Do you see that? I mean, I would agree with by the way we agreed to you on that. But the question we always ask is, we think you Bernays is gonna be that interoperability layer the way T c p I. P was with an I p Networks where you had this interoperability model. We think that there will be a future state of some point us where I could connect to Google and use that Microsoft and use Amazon. That's right together, but not >> this right. And so nobody's really doing that today, But I believe and we believe that there is, ah, a future world where a vendor neutral vendor, neutral with respect to public cloud providers, can can offer a hybrid cloud control plane that manages and brokers workloads for both production, as well as data protection and disaster recovery across any arbitrary cloud vendor that you want to use. Um, and so it's got to be an independent third party. So you know you're never going to trust Amazon to broker a workload to Google. You're never going to trust Google to broker a workload of Microsoft. So it's not gonna be one of the big three. And if you look at who could it be? It could be VM where pivotal. Now it's getting interesting. Appertaining. Cisco's got an interesting opportunity. Red hats got an interesting opportunity, but there is actually, you know, it's less than the number of companies could be counted on one hand that have the technical capability to develop hybrid cloud abstraction that that spans both on premises and all three. And >> it's super early. Had to peg the inning on this one first inning, obviously first inning really early. >> Yeah, we like our odds, though, because the disruption, the fundamental disruption here is containers and kubernetes and the interest that they're generating and the desire on the part of customers to go to micro service is so a ton of application re factoring in a ton of cloud native application development is going on. And so, you know, with that kind of disruption, you could say >> you're targeting opening application re factoring that needs to run on a cloud operating >> model on premise in public. That's correct. In a sense, dont really brings the cloud to theon premises environment, right? So, for example, we're the only company that has the concept of on premises availability zones. We have synchronous replication where you can have multiple clusters that air synchronously replicated. So if one fails the other one, you have no service disruption or loss of data, even for a state full application, right? So it's cloud like service is that we're bringing on Prem and then providing the links, you know, for both d. R and D P and production workloads to the public Cloud >> block locked Unpack with you guys. You might want to keep track of humaneness. Stateville date. It's a whole nother topic, as stateless data is easy to manage with AP Eyes and Service's wouldn't GET state. That's when it gets interesting. Com Part in the CEO. The new chief executive officer. Demonte Day How long you guys been around before you took over? >> About five years. Four years before me about been on board about a year. >> I'm looking forward to tracking your progress. We'll see ya next week and seven of'em Real Tom Barton, Sea of de Amante Here inside the Cube Hot startup. I'm John Ferrier. >> Thanks for watching.

>> Live from Seattle, Washington. It's theCUBE. Covering KubeCon and CloudNativeCon North America 2018. Brought to you by Red Hat. The cloud-native computing foundation and it's ecosystem partners. [Techno Music] >> Hey welcome back everyone. We're here live in Seattle for KubeCon and CloudNativeCon. It's theCUBE's three-days coverage live, I'm John Furrier, your host, with Stu Miniman. Our next guest is Greg Muscurella who's the Vice President of products at Nutanix. Welcome to theCUBE. >> Thanks for having me John. >> Good to see you. CUBE alumni. So you guys are doing Kubernetes. You're in the throws of all the enterprise. You've got the hyper converged action. A lot of that happening here. >> Yeah. >> So what's new, what's the update? What's going on with Kubernetes and CNCF? >> Well we're using this as an opportunity to talk about the cloud data stack that we've built on top of our core HCF platform. So all the goodness that you get with the easy management. You have storage availability etc. We've layered on top of that a couple things. Certainly, we have our own Kubernetes distribution called Karbon. Very easy to play. >> With a K. >> Karbon with a K. Of course we've got to keep with the theme, right? And, get a high availability production-ready cluster going in a matters of 10 minutes or so. Five minutes... Or two minutes to fill out the form and a few more minutes for it to deploy. That's the easy piece. But really we're designing this for enterprise applications. So it's about persistence as well. So we have our database management services, right? So Arrow which is the other product which manages everything from your oracle databases to MySQL post threads that you'd see more developers using to your object storage with our Buckets product. And then going on to our Epoch monitoring and management. >> You guys have had great success with the product. What's the use case? Why are customers looking for? What is the use case for your customers? Obviously, you got a great infrastructure positioning. You have network storage and compute all keys to the enterprise. Where's the Kubernetes fit into it? Developer? What's the use case? >> So first of all, Kubernetes and cloud-native is a mode of developing applications to create really scalable distributed systems. We are, I mean, at our core, we are distributed systems from compute and storage. This is a way of building on top of that. And letting enterprises really build out a cloud-native application using these new types of tooling. >> Yeah, Greg, one of the things that struck me in the keynote this morning is the stuff that they said that "40% of applications that are being run in "Kubernetes are statefull." Which I remember is one of those things we've struggled with for a bit and people are wondering oh where does state? >> Yeah >> Does it belong there or do I do something different with storage? I'm curious, what you're hearing from your customers and how that fits into what you're doing? >> Right. So Kubernetes and the ecosystem is evolving so quickly. If you look at where we are with Pet sets to Stateful sets to all the things you are going to do to actually manage or talk to storage underneath it, it's evolved very rapidly over the last couple years. So I think what we're seeing is people who are very comfortable running their compute inside and maybe still wanting to talk to storage outside. Whether it be object storage or database that lives outside maybe on virtual machines. We're seeing some of those services migrate to be more native within Kubernetes. So like using a CSI or something to talk to the storage. And now we have some customers that are putting databases inside as well, right? So it's a matter of how mature you are, how adventurous you are and how much you really need that reliability out of your database or whether you need the speeded deployment and ease. >> Yeah. So Greg we talked some at the dot net show in London just a couple of weeks ago. When you talk to your customers, how do they look at Kubernetes? Is this something that there's an oh well I'm going to be using Amazon and Microsoft and therefore it's there? How much does this fit into their hybrid cloud environment? I would think that would be a big piece of your story. >> It absolutely is. And there's obviously a lot of news around multi cloud and hybrid cloud and that's what's really special about Kubernetes and containers as well as the standard interfaces we have for storage and object and databases is that you now have this sort of portability. And so I can actually run the same thing in the Cloud. I can take that and run the exact same load down in my own data center without changing anything out. And the key to that is of course open and standard APIs, right? Of course my data has to be there as well and that can be difficult to move and migrate. But the same application structure, the same development and paradigm supply both in the Cloud and as well as on-prem. And that's what I'm seeing is a lot of excitement to be able to repurpose that as well as an answer to multi cloud or hybrid cloud. >> What's the workload means in terms of data? Because data becomes the critical asset in Cloud. Stateful data has been a big discussion. Where is that here in CNCF? What's your take on the status of how that's playing out? The need in the marketplace? Ready for primetime? What's the evolution of that piece in the Stateful applications? >> Yeah, I think that with the CSI and going GA and 1.13, I think we're seeing some maturity for that. Not everything will be... Not all storage will be addressed over HTTP. A lot of it is going to be through traditional storage implications or interfaces. And I think what's interesting is seeing the move to try to meet enterprise developers or application developers. Kind of where they are. Like if you have an existing app and you need to move it to containerized application, it's hard to eradicate NFS. It's hard to eradicate block storage and go to something complete out of that. And also I think there's some good reasons to use those types of things, especially if you're running a database itself. So if you want to run a database in Kubernetes you're going to need something more robust than object storage, right? So, that evolution, that maturity has been really fast and it's been interesting to see the Kubernetes community adopt that and then customers take advantage of it. >> It's been a top conversation. >> Greg, I wonder if we can sort of zoom out for a little bit here. >> Sure. >> We're talking about Kubernetes. What does cloud-native mean in the Nutanix context and what you're hearing from your customers? >> What does cloud-native mean? Well I don't think it's unique from our perspective. I think it, again, it comes back to for some people it's going to be a 12 factor application. It's going to be using very standard and open APIs to build those applications. And then being pretty smart about how you address things that might tie you into any particular or any particular operating procedure, right? So we see, for instance some good examples around pop-ups or streaming data. We see a lot of people are very rigorous about adopting Kafka, all right. They want to use Kafka APIs. Even though there's a whole bunch of other services that we use and their favorite cloud file or whatever because they are so interested in that multi cloud or hybrid cloud then they are going to chose their APIs pretty carefully. So I think that's maybe the only thing that's a little bit unique in terms of our customer base. Is it's not a lot of start ups that are like, "I don't care, I'm worried about survival. "It's all product market fix. Let me go fast "and if I get locked into any particular vendor, "that's fine, I don't care. "That's tomorrow's problem." Right? We are enterprises, right? And these are guys who are jaded, have experienced the contract renewals with some of their favorite vendors, right? And they don't want to relive those mistakes again. And so they are very interested in having a very open ecosystem to play in. And we support that fully. >> Yeah. >> And stability, too, with the workload. They want mission-critical workloads to run. >> Absolutely. >> Quickly. >> It's interesting. I hear you talk about APIs and we look at something might be good for a bit but we get a sprawl of every technology. >> Sure. >> We have server sprawl. We had VM sprawl. And many ways we get API sprawl. >> Absolutely. >> Every single environment I work into. What's Nutanix's position on how do you manage APIs? How do you make sure you're just not creating something completely separately? >> Well I think, first of all, we really focus on the core APIs, right? So there's certain things that you just have to get these primitives absolutely right. And I applaud the Kubecon community saying the similar thing. So we do that. Right? We've got to get identity right. You got to get your data access layers right. And you have to get a lot of your provisioning things right. Once you start getting beyond that, you're into more esoteric lands and things don't tend to be as tight in, so we can be a little bit more exploratory on other APIs that aren't as core to the surface. So that's the attitude we take, which I think is similar to what we see in the community as well. I mean if you look at how many projects we got over this morning in the keynotes, it's just like a... >> The CNCF is up to 35 projects, I'm told. So. >> Right, and then tons of things that are not in CNCF that are also being used. Right? So it's a proliferation of things that all hope to be successful and kind of become the standard. >> So what's the update with Nutanix? Give us a quick company overview. Get the plug-in. What's going on with Nutanix? What's the big focus? >> Well focus continues to be just modernizing the data center. Right? Making all these applications easier to run, easier to manage and easier to operate. And that's what we're built on, right? That's the core. Again, for us it's going up the stack. It's going into the networking layer. Making sure micro segmentation can happen quickly and easily. We're not needing a Phd. or heavy lifting of things without taking over your entire network. And going up the stack with our cloud-native application stack. >> One of the things that's been clear in the industry in the past six months, certainly hardcore, we saw it come in before with hybrid, the validation of the on-premises. Right? So on-premises had at least low latency, any mission-critical workloads, aren't always going to the Cloud that fast, so the on-premises and on Cloud dynamic is super important for enterprises that are big enterprises. Not like the small, medium sized enterprises. But like the big ones have legacy and containers are nice fit there. So kind of a nice situation for you guys. How does that all play out? Do you agree with that, or? >> Yeah, so I think there's a lot of work loads that are going to, if they're not already in the public Cloud, they're going to go back, they're going to be built in the public Cloud. I mean if I have a gaming application and world-wide customers, I need to be in a presences where they can get me quickly. But similarly there's a lot of applications that are best on-prem. Whether it be because I have regulatory constraints or just that's where my data is and that's where my systems kind of come back together. I need to build my application where my data is because it's a lot easier to move the app in many cases than to move the data. And a lot of people don't want to give up that ownership and that kind of control. They are uncomfortable with moving their data that's not in their four walls. And so we've seen if you look at the CNCF survey data and you look at where Kubernetes is actually being run you'll find that a lot of Kubernetes is being run on-prem. Like some 60% of respondents are actually running Kubernetes on-prem. Now 89% are running in the Cloud which makes sense. As you start looking at folks who are much more mature, so they've been running Kubernetes for a little bit longer, their fleet size is 1,000 machines or more, we actually see them increasing their running on-prem as well. So it's the idea of having the same workloads, the same APIs that can work, start developing in the Cloud, move that application or the exact same application on-prem, work with my on-prem data, I think is very attractive. >> It's interesting, too, we hear a lot of people talk, "Hey, I'm running Kubernetes." Well, great. That's cool. Like what are you running it for? >> Yeah. >> So this gets down to the what is Kubernetes good for? >> Right. >> You're thoughts. >> Yeah, I think it started where people are comfortable with are really Stateless applications. Right? So it's a lot of filter on a pipe. It's a lot of things that are going through a line of some sort. We certainly see a lot of our IoT applications being built on that which is essentially that, right? So there's some intelligence at the edge. We're gathering the data but we're doing some intelligent things with it. Doing some inference there. Filtering the data. Bring it back to the data center. And then doing additional things on that front. So there's both data gathering as well as execution happening on the edge. So that's a big piece of it in our market. And then back to pipeline just kind of core data services. >> We've been following you guys at Nutanix. You guys are doing great. A great product. Now cloud-native is here. What's on the portfolio roadmap for SaaS and cloud-native for you guys? What's the priorities? >> So continuing to fill out the portfolio so that customers can really easily run whatever application they want. So we want those primitives to be there for them. So database storage we've filled out. The monitoring piece and the observability piece is actually really interesting. And so we have a SaaS service that lets you monitor your clusters no matter where they may be. So if you're running them in your favorite cloud provider, fantastic. You can monitor those as well as what you might be running in whatever your on-prem data center is. We have plans to actually let that be run on-prem as well because again some of our customers, especially who are running dark sites, don't want to have any of there information, even observability data go out. So we are trying to serve that customer that has pretty robust needs both around their computer environemnet but also around their data and how they manage it and protect their data. And that's really our critical customer. >> Great. Thanks for coming on theCUBE. We really appreciate the time and the insight. Nutanix here on theCUBE. John Furrier with Stu Minium. Three days of live coverage of KUBECON, and CloudNativeCon here in Seattle 2018. 8,000 people. Getting larger every time. It's a global conference. Back with more coverage after this short break. [Techno Music]

(energetic music) >> Live from Miami Beach, Florida. It's theCUBE covering UiPathForward Americas. Brought to you by UiPath. >> Welcome to Miami everybody. This is theCUBE the leader in live tech coverage. We're here covering the UiPathForward Americas conference. UiPath is a company that has come out of nowhere, really. And, is a leader in robotic process automation, RPA. It really is about software robots. I am Dave Vellante and I am here with Stu Miniman. We have one day of coverage, Stu. We are all over the place this weekend. Aren't we? Stu and I were in Orlando earlier. Flew down. Quick flight to Miami and we're getting the Kool-Aid injection from the RPA crowd. We're at the Fontainebleau in Miami. Kind of cool hotel. Stu you might remember, I am sure, you do, several years ago we did the very first .NEXT tour. .NEXT from Nutanix at this event. About this same size, maybe a little smaller. This is a little bigger. >> Dave, this is probably twice the size, about 1,500 people here. I remember about a year ago you were, started buzzing about RPA. Big growth in the market, you know really enjoyed getting into the keynote here. You know, you said we were at splunk and data was at the center of everything, and the CEO here for (mumbles), it's automation first. We talked about mobile first, cloud first, automation first. I know we got a lot of things we want to talk about because you know, I think back through my career, and I know you do too, automation is something we've been talking about for years. We struggle with it. There's challenges there, but there's a lot of things coming together and that's why we have this new era that RPA is striking at to really explode this market. >> Yeah, so I made a little prediction that I put out on Twitter, I'll share with folks. I said there's a wide and a gap between the number of jobs available worldwide and the number for people to fill them. That's something that we know. And there's a productivity gap. And the numbers aren't showing up. We're not seeing bump-ups in productivity even though spending on technology is kind of through the roof. Robotic Process Automation is going to become a fundamental component of closing that gap because companies, as part of the digital process transformation, they want to automate. The market today is around a billion. We see it growing 10 x over the next five to seven years. We're going to have some analysts on today from Forester, we'll dig into that a little bit, they cover this market really, really closely. So, we're hearing a lot more about RPA. We heard it last week at Infor, Charles Phillips was a big proponent of this. UiPath has been in this business now for a few years. It came out of Romania. Daniel Dines, former Microsoft executive, very interesting fellow. First time I've seen him speak. We're going to meet him today. He is a techy. Comes on stage with a T-shirt, you know. He's very sort of thoughtful, he's talking about open, about culture, about having fun. Really dedicated to listening to customers and growing this business. He said, he gave us a data point that they went from nothing, just a couple of million dollars, two years ago. They'll do 140 million. They're doing 140 million now in annual reccurring revenue. On their way to 200. I would estimate, they'll probably get there. If not by the end of year, probably by the first quarter next year. So let's take look at some of the things that we heard in the keynote. We heard from customers. A lot of partners here. Seen a lot of the big SIs diving in. That's always a sign of big markets. What did you learn today at the keynotes? >> Yeah, Dave, first thing there is definitely, one of the push backs about automation is, "Oh wait what is that "going to do for jobs?" You touched on it. There's a lot of staff they threw out. They said that RPA can really bring, you know, 75% productivity improvement because we know productivity improvement kind of stalled out over all in the market. And, what we want to do is get rid of mundane tasks. Dave, I spent a long time of my career helping to get, you know, how to we get infrastructure simpler? How do we get rid of those routine things? The storage robe they said if you were configuring LUNs, you need to go find other jobs. If you were networking certain basic things, we're going to automate that with software. But there are things that the automation are going to be able to do, so that you can be more creative. You can spend more time doing some higher level functions. And that's where we have a skills gap. I'm excited we're going to have Tom Clancy, who you and I know. I've got his book on the shelf and not Tom Clancy the fiction author, but you know the Tom Clancy who has done certifications and education through storage and cloud and now how do we get people ready for this next wave of how you can do people and machines. One of my favorite events, Dave, that we ever did was the Second Machine Age with MIT in London. Talking about it's really people plus machines, is really where you're going to get that boom. You've interviewed Garry Kasparov on this topic and it's just fascinating and it really excites me as someone, I mean, I've lived with my computers all my life and just as a technologist, I'm optimistic at how, you know, the two sides together can be much more powerful than either alone. >> Well, it's an important topic Stu. A lot of the shows that we go to, the vendors don't want to talk about that. "Oh, we don't want to talk about displacing humans." UiPath's perspective on that, and we'll poke them a little on that is, "That's old news. "People are happy because they're replacing their 'mundane tasks.'" And while that's true, there's some action on Twitter. (mumbles name) just tweeted out, replying to some of the stuff that we were talking about here, in the hashtag, which is UiPathForward, #UiPathForward, "Automation displaces unskilled workers, "that's the crux of the problem. "We need best algorithms to automate re-training and "re-skilling of workers. "That's what we need the most for best socio-economic "outcomes, in parallel to automation through "algorithm driven machines," he's right. That gap, and we talked about this at 2MA, is it going to be a creativity gap? It's an education issue, it's an education challenge. 'Cause you just don't want to displace, unskilled workers, we want to re-train people. >> Right, absolutely. You could have this hollowing out of the market place otherwise, where you have really low paid workers on the one end, and you have really high-end creative workers but the middle, you know, the middle class workers could be displaced if they are not re-trained, they're not put forward. The World Economic Forum actually said that this automation is going to create 60-million net new jobs. Now, 60-million, it sounds like a big number, but it is a large global workforce. And, actually Dave, one of the things that really struck me is, not only do you have a Romanian founder but up on stage we had, a Japanese customer giving a video in Japanese with the subtitles in English. Not something that you typically see at a U.S. show. Very global, in their reach. You talked about the community and very open source focus of something we've seen. This is how software grows very fast as you get those people working. It's something I want to understand. They've got, the UiPath that's 2,000 customers but they've got 114,000 certified RPA developers. So, I'm like, okay, wait. Those numbers don't make sense to me yet, but I'm sure our guests are going to be able to explain them. >> And, so you're right about the need for education. I was impressed that UiPath is actually spending some of it the money that it's raised. This company, just did a monster raise, 225-million. We had Carl Ashenbach on in theCUBE studio to talk about that. Jeff Freck interviewed him last week. You can find that interview on our YouTube play list and I think on out website as well. But they invested, I think it was 10-million dollars with the goal of training a million students in the next three years. They've hired Tom Clancy, who we know from the old EMC education world. EMC training and education world. So they got a pro in here who knows to scale training. So that's huge. They've also started a 20-million investment fund investing in start ups and eco-system companies, so they're putting their money where their mouth is. The company has raised over 400-million dollars to date. They've got a 3-billion dollar evaluation. Some of the other things we've heard from the keynote today, um, they've got about 1,400 employees which is way up. They were just 270, I believe, last year. And they're claiming, and I think it's probably true, they're the fastest growing enterprise software company in history, which is kind of astounding. Like you said, given that they came out of Romania, this global company maybe that's part of the reason why. >> I mean, Dave, they said his goal is they're going to have 4,000 employees by 2019. Wait, there are a software company and they raised huge amounts of money. AS you said, they are a triple unicorn with a three billion dollar valuation. Why does a software company need so many employees? And 3,000, at least 3,000 of those are going to be technical because this is intricate. This is not push button simplicity. There's training that needs to happen. How much do they need to engage? How much of this is vertical knowledge that they need to get? I was at Microsoft Ignite two weeks ago. Microsoft is going really deep vertically because AI requires specialized knowledge in each verticals. How much of that is needed from RPA? You've got a little booklet that they have of some basic 101 of the RPA skills. >> I don't know if you can see this, but... Is that the right camera? So, it's this kind of robot pack. It's kind of fun. Kind of go through, it says, you got to reliable friend you can automate, you know, sending them a little birthday wish. They got QR codes in the back you can download it. You know, waiters so you can order online food. There's something called Tackle, for you fantasy football players who help you sort of automate your fantasy football picks. Which is kind of cool. So, that's fun. There's fun culture here, but really it's about digital transformation and driving it to the heart of process automation. Daniel Dines, talked about taking things from hours to minutes, from sort of accurate to perfectly accurate. You know, slow to fast. From very time consuming to automated. So, he puts forth this vision of automation first. He talked about the waves, main frames, you know the traditional waves client server, internet, etc. And then, you know I really want to poke at this and dig into it a little bit. He talked about a computer vision and that seemed to be a technical enabler. So, I'm envisioning this sort of computer vision, this visual, this ability to visualize a robot, to visualize what's happening on the screen, and then a studio to be able to program these things. I think those are a couple of the components I discerned. But, it's really about a cultural shift, a mind shift, is what Daniel talked about, towards an automation first opportunity. >> And Dave, one of the things you said right there... Three things, the convergence of computer vision, the Summer of AI, and what he meant by that is that we've lived through a bunch of winters. And we've been talking about this. And, then the business.. >> Ice age of a, uh... >> Business, process, automation together, those put together and we can create that automation first era. And, he talked about... We've been talking about automation since the creation of the first computer. So, it's not a new idea. Just like, you know we've been talking on theCUBE for years. You know, data science isn't a new thing. We sometimes give these things new terms like RPA. But, I love digging into why these are real, and just as we've seen these are real indicators, you know, intelligence with like, whether you call it AI or ML, are doing things in various environments that we could not do in the past. Just borders of magnitude, more processing, data is more important. We could do more there. You know, are we on the cusp of really automation. being able to deliver on the things that we've been trying to talk about a couple of generations? >> So a couple of other stats that I thought were interesting. Daniel put forth a vision of one robot for every person to use. A computer for every person. A chicken for every pot, kind of thing (laughs) So, that was kind of cool. >> "PC for every person," Bill Gates. >> Right, an open and free mind set, so he talked a about, Daniel talked about of an era of openness. And UiPath has a market place where all the automations. you can put automations in there, they're all free to use. So, they're making money on the software and not on the automation. So, they really have this... He said, "We're making our competitors better. "They're copying what we're doing, "and we think that's a good thing. "Because it's going to help change the world." It's about affecting society, so the rising tides lift all boats. >> Yeah Dave, it reminds me a lot of, you know, you look at GitHub, you look at Docker Hub. There's lots of places. This is where code lives in these open market places. You know, not quite like the AWS or IBM market places where you can you can just buy software, but the question is how many developers get in there. They say they got 250,000 community members already there. So, and already what do they have? I think hundreds of processes that are built in there, so that will be a good metric we can see to how fast that scales. >> We had heard from a couple of customers, and Wells Fargo was up there, and United Health. Mr. Yamomoto from SNBC, they have 1,000 robots. So, they are really completely transforming their organization. We heard from a partner, Data Robot, Jeremy Atchins, somebody who's been on theCUBE before, Data Robot. They showed an automated loan processing where you could go in, talk to a chat bot and within minutes get qualified for a loan. I don't know if you noticed the loan amount was $7,000 and the interest rate was 13.6% so the applicant, really, must not of had great credit history. Cause that's kind of loan shark rates, but anyway, it was kind of a cool demo with the back end data robot munging all the data, doing whatever they had to do, transferring through a CSV into the software robot and then making that decision. So, that was kind of cool, those integrations seemed to be pretty key. I want to learn more about that. >> I mean it reminds me of chat box have been hot in a lot of areas lately, as how we can improve customer support and automate things on infrastructure in the likes of, we'll see how those intersections meet. >> Yeah, so we're going to be covering this all day. We got technologists coming on, customers, partners. Stu and I will be jamming. He's @Stu and I'm @Dvellante. Shoot us any questions, comments. Thanks for the ones we've had so far. We're here at the Fontainebleau in Miami Beach. Pretty crazy hotel. A lot of history here. A lot of pictures of Frank Sinatra on the wall. Keep it right there, buddy. You're watching theCUBE. We'll be right back after this short break. (energetic music)

>> Live from Las Vegas, it's theCUBE, covering VMworld 2018. Brought to you by VMware and its ecosystem partners. >> Hey, welcome back everyone, this is the live CUBE coverage here in Las Vegas for VMworld 2018. Two sets, nine years of coverage, this is our ninth year. Lot of games changed, we've seen the movie play over and over again. Infrastructure's supposed to be dead, it never goes away. Storage is supposed to be dead, never goes away. Data protection, recovery, never going away. It's only getting better, the cloud is here. I'm John Furrier with Dave Vellante. Next guest, Peter McKay, Co-CEO and President of Veeam. Big party, tonight. Massive success story in the industry, year over year. They kind of kept it quiet, I don't know why, but then the past two years the numbers started to come out. >> Yeah. >> The chart is up and to the right, competition is going down, congratulations. >> Thank you. >> Where's the growth coming from, what's the success? >> You know, I mean, we've been on a trajectory, as you guys know, for many years. Because we're not public, because we're not looking to go public any time soon, we never published the numbers. But, when we realized: look we got a lot of success going, the momentum's going, we think people should know what's happening, especially our customers who invested. So, we've just continued to execute really well on a multi-segmented approach from the large enterprise, the medium-mid-market, and the SMV. All of those three segments are growing double digits. You know, different value prop, different message, different solution in each one. Kind of the way we package. But they're all going really well. Europe, Americas, and now APJ is growing faster than any other region. >> Well, it's interesting, you said this morning, was people have the perception you guys were SMB and you said, oh, we just went after the-- >> The virtual buyer. >> The VMware guys, the virtual buyer. I think you said about a third of your business is small, about a third is commercial, and about a third is what? >> A third is the breakdown of our revenue. It is true that we didn't focus on a partiular market. We focused on whoever bought Vsphere should buy Veeam. And so whoever sold it, whatever the channel partner sold it we wanted them to sell Veeam. Whoever bought it, we wanted them to buy Veeam. It wasn't that complex, it was fairly straightforward. Just execute on following wherever VMware went, we went. We became the number one backup vendor, virtual backup. Number one VMware backup, now we added Hyper-V, and now we're in a crop-o-lis with Nutanix, which is the latest. >> Is the type of buyer now changing as you sort of enter some of these new markets, go more deeper into the larger enterprises? >> Yeah, it's gotten a lot more complicated, today. You remember we bought this company N2WS, which is really interesting. It's native backup for AWS. >> Right. >> And that was fantastic. We started as an investment, we bought it, and this business just keeps doubling and doubling. And really what it taught us when we had an event that we would go to, all the people, our customers were going to the booth, and they didn't know who Veeam was. So we we're like, wait a minute, you have Veeam in your business, well we didn't know that. So they were totally different buyers. They were looking to back up for the cloud offering than traditional backup or even your virtual backup. And so it really expanded an opportunity that we never knew. Hey, this is a whole group of people we weren't talking to. So that has expanded, you've got that group. You know, your traditional backup buyers, your virtual. But now it's line of business, it's much more complicated than ever before. >> So you're sharing some numbers. You mind sharing how many customers you have, the kind of renewals and what the booking numbers look like? >> Yeah, we ended the year at 300, we passed 300,000 customers and we're up to what, 320 or so, now. We added about 133, on average over the last two years, 133 per day, 4,000 a month. >> Customers? >> Customers. >> New Customers. >> New customers. That has been our kind of trajectory. It all goes back to, we have a 73 Net Promoter score, we do a really good job making our customers successful, making it easy to buy, easy to deploy, easy to manage, and we constantly just stay ahead in the roadmap, in what we're doing, and you know, it's-- >> Nice business. >> It's not that complex. >> What's the booking, what's the booking? >> The last year we ended at 827 on our goal of 766, so we blew away our goal last year. This year we put a stretch goal, get to a billion, we're well on our way to do that. I think there's only 34 companies that have got there, got over a billion, but that's our goal. >> And as a Co-CEO, one of your jobs is to sort of identify opportunities for TAM expansion, you've done that. Now, you've up-leveled the messaging big-time. So that's been great, to see that progress. And then, talk about the TAM. People think, okay, back up, tiny little five, six, seven billion dollar market. But your TAM is much larger, talk about your market. >> So we call what we're doing intelligent data management, so data management, managing your data, protecting your data, but doing it in an intelligent way, right? Not, you know, reactive, more proactive, more from policy based to behavior based. So that message is really resonating in the market. And so, I think there's a lot of, when we looked at the space, backup and recovery is really just one piece of it. There's email backup, right? Office 365, SAS applications, more and more eDiscovery, there's endpoint backup. So when we look at that and then back up in the cloud from a cloud infrastructure, when you add up all of that addressable market, it's about a 39, just, the high $30s billion market opportunity growing at almost 10%. So, some of that we'll do organically, we'll build ourselves, some of which we'll buy like N2WS, and some of it we'll just partner where it makes sense to do that, but that's the market we're going after intelligent data management. >> How are you using machine intelligence and leveraging that to go after intelligent data management? >> Well, you think of, we call it five stages of intelligent data management, so there's a journey that people go from backup to aggregation of all the data, to visibility, orchestration, and automation. When you get to orchestration and automation, it's around doing things smarter and getting more insight from what you've been doing in the past, like learning how you've been able to managing your backup to the cloud, from the cloud, between clouds, but now when you start adding things like security, like hey, there's a ransomware that you found, find a clean backup or restore to a better version of your data to the environment. Or a weather pattern, something's happened and back up to a different location versus. So you can start feeding in external, different third party data into our machine that allows us to be able to protect and manage your data far better. So, that's a huge opportunity. >> I mean, this is a very competitive space, you've been as a company, so successful, while others are declining or flattening out. Why, what specifically is the driver? Is it simplicity, was it just the product itself? I mean, it's hard to break into this market and kind of have the numbers you guys have. >> Yeah, I've been amazed early on. I mean, it is, the product is that good. We used to have a tagline that it just works, and that came from our customers. Veeam: it just works, and it does. I mean, I would say first and foremost, the technology is that good. I love to say it was sales, the execution, and everything else, but you know it is the product. >> Easy to sell a product that's just good. >> It makes it so much easier when the product is that good. >> So, that, I think the way we approach the ecosystem, it's a channel model, it's a very leveraged model, we added alliances into the mix, so we have, we just announced our Cisco Hyperflex. So Hyperflex, we're the first and only solution, intelligent data management solution, that is bundled with Cisco Hyperflex, that we announced, today. But, Cisco can now resell as one skew, HP can now sell as one bundled skew, NetApp can sell as one bundled skew, and we've got others that are coming. We've been hardware and software, hardware agnostic, cloud agnostic. And when other companies like Commvault and Veritas and Dell all have an appliance solution, Cohesity, Ruberik, and others, it's really driven the rest of the ecosystem to the company that has been Switzerland of all of it, because a lot of these companies have hardware that they already have. So we leverage, hey, we'll work with what you have, and you know we're going to work with what you're going to have, because we're not locking you into any hardware. >> That's what you always down. And it's been, so good product, easy-- >> Common sense approach. >> Common sense, and then focus. We haven't tried to do more than what we're, I mean, we want to be best in the world, started with virtual, cloud was the next, physical we added physical component that we were missing in. So virtual, physical, and cloud. Single pane of glass, orchestration, automation. It's not that hard. >> On the product side, as you got a couple minutes left. I want to get your thoughts on the growth strategy. Obviously, machine learning, if you're doing intelligent data, you've got to be using ML and AI, it's going to be core to the product. How is that looking, what's the story there? >> You know it's almost vertical dependent, right? Because what we're finding is in certain verticals, the ecosystem is different, and how we learn from, a lot of the channel partners are driving us in this direction, alliance partners are driving us to this direction, and moving from this kind of reactive mode to proactive mode. And so that's kind of opening up a broader ecosystem for us on how do we leverage more of the knowledge that's outside of our world and into making what we do in the managing of data, because, you know, the accumulation of data, as you guys know, it's doubling every two years, right? It's everywhere, data is all at endpoints and edge devices, it's coming from all over the place, and it's far more critical. And so, we're kind of in the middle of all that. And so now, how do we better manage that data for you, and adding more machine learning into that is critical. >> Well, thanks for taking the time to stop by theCUBE, congratulations on your success, just works, your product excellence, it's pretty nice to have that. Lot of companies don't have that luxury. Congratulations and thanks for coming by. >> Thanks, John. >> Peter McKay here on theCUBE, Veeam, very popular product in the VMware ecosystem, of course they run one of the best parties here, some say the best. >> Tonight. >> We'll be checking out, tonight. Peter, thanks for coming on. Stay with us for more coverage after this short break. (digital music)

>> Live from Washington D.C. It's theCUBE, covering the AWS Public Sector Summit 2018. Brought to you by Amazon Web Services, and its eco-system partners. (upbeat music) >> Welcome back to the nation's capitol. I'm Stu Miniman and you're watching theCUBE's coverage of AWS Public Sector Summit 2018. Joining me for the wrap-up of day one, John Furrier, Dave Vellante. So John, thanks for bringing us down. So you were here last year. We've interviewed Teresa Carlson a number of times at Reinvent, but we've got to start with you. Since you were here last year, watching this explode. I said, this reminds me of Reinvent three years ago, how big it is, 14,500 people, wow. >> Yeah, so you're right on. This is definitely a Reinvent kind of vibe, in a way to describe what happened with Amazon Reinvent, their annual conference which we were at the 2nd year, 2013, and have been every year. Reinvent got bigger every year, and just became more prominent, and the solutions scaled, the number of announcements, as we know Amazon today is packed, it's bigger than ever. The public sector market, which is defined as government, education, and global public sector countries like Bahrain and other countries, are really the target. They have unique requirements. So what's happening is that that market is being disrupted, and there's been similar moments in the public sector here in the United States, as well known. The fail of the website that Obama. You know, the health care sight was one. The government initiatives that have been going on. The government is not modern and people are frustrated. The IT workers are living in cages, they're strapped in. It's like, not good. The tooling's old, old client server, old vendors like Oracle and IBM and others that are trying to keep that business, and they're not modernizing. So, this modernization wave has hit the public sector across the board, and what's happening is they can actually build newer systems faster, and get lower cost, more efficiency, done faster. And this is disrupting not only their business model, but how they buy technology, the role of the supplier in that piece of the equation, and also just overall faster innovation. So, this is driving it. The shocker of all of it is the security conversation has been up leveled, meaning it's not a real issue. Certainly the security is a real issue, but in terms of a barrier that stops everything, that's not the case anymore. The CIA is really the most notable that came on and said the worst day in cloud security is better than anything we got working today. So that's a really interesting thing and the Department of Defense Jedi project is billions of dollars that would have gone to say, an Oracle, IBM, and all the incumbents, or, beltway bandits, as they've been called. Those days are over. So that to me is a really exciting thing for the country. But, Amazon is running the tables too. So again, this year, more of the same, bigger. Big agencies. Small partners and big, all riding the wave of growth. And, it's a new operating model, and again, we'll predict it here in theCUBE, as we always say, and then we'll be right again. This is going to be a special market for Amazon going forward. >> I think government market is definitely a microcosm of the overall marketplace as John said. It's very bureaucratic, they're slower to move, you got to regime change every four or eight years, so a lot of turnover. It's really hard to get. Okay, we're going to go with strategy, cause the strategy as they start stop, it's a near to mid term strategies are affected in the government. Obviously, there's a greater focus on security. Cloud addresses a lot of those. We certainly heard that from the CIA. I don't think you can talk about cloud and federal, without talking about that milestone CIA deal. That really was a watershed moment. It was a wake up call to the old guard. IBM, as you might recall, tried to fight the government, because the CIA awarded the contract to Amazon. IBM lost that case, they were eviscerated by the judge. It forced IBM to go out and pay two billion dollars for software. It was years later that Oracle really got in. So, Amazon, to an earlier guest's point, has a huge lead. The estimate was five to 10 years, I heard, over some of the legacy suppliers. Interesting, not sure exactly where Microsoft fits in there. Stu, I'd love to get your thoughts. The thing about cloud that we've, John, you talk about being right, for years, we've talked about the economics of cloud, the scale of cloud, the marginal economics, looking much more like software. That's clearly been to Amazon's advantage. And, they're mopping the floor with guys who can't keep pace. And so, that's played out in a big way, and this seems to be a winner take all market. Or, a few companies take all market. >> Yeah, the thing that I actually wanted to comment on that's really interesting to dig in here, is if you talk about application modernization. Yes, it is super challenging, and it's not happening overnight, but, have heard universities, non profits, they're moving. It's not just mobility, moving to the web, but talking about how they are decoupling and creating cloud native microservices environments. So, was talking to a large, government healthcare organization that was super excited to show me how he was going to take his really old application, and start pulling together services at a time. And, he's like, I've got 130 services. And here's how I'll stick a router in here and I'll start pulling them off to the cloud. Talked to a big university and said, how are they going from, my data center, which I'm out of power, I'm out of capacity. I'm going to use the VMWare thing, but over time, I'm moving to containers, I'm moving to serverless. That modernization, we know it's not moving all of it to the public cloud, but that migration is happening. It is challenging and as I've said many times in many of these Amazon shows, Dave and John, it's the companies that come here. They're the ones that are trying cool stuff. They're are able to play in some of these environments and they make progress. So, the thing that really excites me too, is when you hear government agencies that are doing innovative, cool things. It's like, how do I leverage my data and give back to the communities I serve. Help charities, help our communities, and do it in cost effective ways. >> Stu, I got to say, Dave, Theresa Carlson just came by theCUBE, we gave her a wave. She's the CEO of Public Sector, as I call her, she's the chief, she's in charge. Andy Jackson's the CEO of AWS, but again, public sector's almost its own little pocket of AWS. Her leadership, I think, is a real driving force of why it was successful so fast. Theresa Carleson is hard charging, she knows the government game. She's super nice, but she can fight. And she motivates her team. But she listens to the customers, and she takes advantage of that Amazon vibe, which is solve a problem, lower prices, make things go faster, that's the flywheel of the culture. And she brings it to a whole nother level. She's brought together a group of people that are succeeding with her. She leans on her partners, so partners are making money. She's bringing in cloud native kind of culture. I mean, CrowdStrike, you can't get any better than seeing guys like CrowdStrike raise 200 million dollars, Dave, today announced, worth over three billion dollars, because they built their system to work for cloud scale. CloudChecker, another company. Purpose built for the cloud and is extremely successful because they're not trying to retrofit an enterprise technology and make it cloudified. They actually built it for the cloud. This, to me, is a signal of what has to happen on successful deployments, from a customer standpoint. And I think that's what attracting the customers and they will change their operations 'cause the benefits are multifold and they're pretty big. Financially, operationally, culturally, it's disruptive. So I think that's a key point. >> Yeah, and I think again, this a microcosm of the larger AWS, which is a microcosm of the larger Amazon, but, some of the things we heard today, some of the benchmarks and milestones from Theresa on the keynote. 60 consultancies that she put up on the slide, 200 ISVs ans SAAS companies, 950 third-party software providers, this is all GovCloud. And then Aurora now in GovCloud, which is, you know, you see here, it lags. >> Database. >> Amazon and Specter, you've heard a lot about database. Amazon and Specter, which manages security configurations. We heard about the intent to go forward with the VMWare partnership, the VMWare cloud in GovCloud. So, a little bit behind where you see the Amazon web services in commercial. But, taking basically the same strategy as John said. The requirements are different. I also think, Stu and John, it's important to point out just the progress of AWS. We're talking about tracking to 22 billion dollars this year. They're growing still at 15 percent, that massive number. 26 percent operating income. Their operating income is growing at 54 percent a year. So, just to compare Amazon web services to other so called infrastructure providers, HPE's operating income is eight percent, IBM's is nine percent, VMWare, which is a software company, is at 19 percent, Amazon's at 26 percent. It's Cisco level of profitability. Only companies like Oracle and Microsoft are showing better operating income. This is that marginal economics, that we've talked about for years. And Amazon is crushing it, just in terms of the economic model. >> Yeah, and they bring in the public sector. Can you imagine that disruption for that incumbent mindset of these government kind of agencies that have been the frog in boiling water for so many years around IT. It's like Boom, what a wake up call. If you know IT, you know what it's like. Older tools, huge budget cycles, massive amounts of technology trends in terms of time to value. I mean, Stu, you've seen this buoy before. >> Yeah, absolutely, and it's interesting. Some of the things we heard is there's challenge in the government sometimes, moving from capex to opex. The way that government is used to buying is they buy out of the GSA catalog, they are making that move. We actually had on the federal CTO for Cohesity, came from the GSA, and he said we're making progress as an industry on this. Dave, you mentioned a whole lot of stats here. I mean, year after year, Q1 Amazon was up 49 percent revenue growth. So, you know, you always hear on the news, it's like, oh well, market share is shifting. Amazon is still growing at such a phenomenal pace, and in the GovCloud, one of the things I thought Kind of interesting that gets overlooked is the GovCloud is about five years, no it launched in August of 2011, so it's coming up on seven years. It's actually based out of the West Coast. They have GovCloud, US East is coming later this year. And we talked in the VMWare interview that we did today about why some of the lag and you need to go through the certification and you need to make sure there's extra security levels. Because, there's not only GovCloud, then they've got the secret region, the top secret region, so special things that we need to make sure that you're FedRAMP compliant and all these things. Amazon is hitting it hard, and definitely winning in this space. >> Yeah, and they have a competitive advantage, I mean, they're running the table, literally. Because no body else has secret cloud, right? So, Amazon, Google, others, they don't have what the spec requires on these big agencies, like the DOD. So, it's not a sole source deal. And we saw the press that President Trump had dinner with Safra Catz, the CEO of Oracle. And, that Amazon, that people are crying foul. Making a multicloud, multivendor kind of, be fair, you know fairness. Amazon's not asking for sole source, they're just saying we're responding to the bid. And, we're the only ones that actually can do it. You know, John Wood, the CEO of Telos, said it best on theCUBE today, Amazon is well down the road, five years advantage over any cloud, five years he said. >> There's no compression algorithm for experience, right? >> Right, right, but this is a real conundrum for the government buyers, the citizens, and the vendors. So, typically, let's face it, technology, IBM, HPE, Oracle, Dell, they can all pretty much do the same thing. Granted, they got software, Cisco, whatever. They got their different spaces, but head to head, they all pretty much can do what the RFP requires. But what you just pointed out John, is Amazon's the only one that can do a lot of this stuff, and so, when they say, okay let's make it fair, what they're really saying is, let's revert back to the mean. Is that the right thing for the citizens? That's the kind of question that's on the table now. As a citizen, do you want the government pushing the envelope... >> That's what he said from CrowdStrike, why go backwards? >> Right, right, but that's essentially what the old guard is saying. Come back to us, make it fair, is that unfair? >> You're too successful, let the competition catch up, so it can be fair. No, they've got to match up the value proposition. And that fundamentally is going to put the feet to fire of government and it's going to be a real critical tell sign on how much teeth to the mission that the government modernization plan is. If that mission to be modernizing government has teeth, they will stay in the course. Now, if they have the way to catch up, that's great. I can already hear it on Twitter, John, you don't really know what you're talking about. Microsoft's right there. Okay, you can say you're doing cloud, but as they teach you in business school, there's diseconomies of scale, to try to match a trajectory of an experienced cloud vendor. Stu, you just mentioned that, let's explore that. If I want to match Amazon's years of experience, I can say I'm up there with all these services, but you can't just match that overnight. There's diseconomies of scale, reverse proxies, technical debt, all kinds of stuff. So, Microsoft, although looking good on paper, is under serious pressure and those diseconomies of scales creates more risk. That more risk is more downtime. They just saw 11 hours of downtime on Microsoft Azure in Europe, 11 hours. That's massive, it's not like, oh, something just happened for a day. >> Here's the behind the scenes narrative that you hear from certain factions. Is, hey, we hire people, let's say I'm talkin' about Microsoft, we hire people out of Amazon too, we know where they're at. We think we've narrowed that lead down to six months. You and I have both heard that. When you talk to people on the other side of the table, it's like, no way, there's no way. We're movin' faster, in fact, our lead is extended. So, the proof is in the pudding. In the results that you see in the marketplace. >> Well, and just to build on that, the customers. Amazon has the customers, you talk to anybody that's in these agencies, you know, like any industry, they're all moving around. Not only the federal, but, I had a great interview with Nutanix this morning, he said this was the best collection of state and local government that I ever had. It's like I got to meet all my customers in person last year when they came here. So, the fed kind of sets the bar, and then state, local, education, they all learn there. So, as you said, John, Theresa and her team have really built a flywheel of customers, and those customers, they understand the product. They're going deeper on that. >> But look, Microsoft has success where it has a software state. Clearly there are a lot of Microsoft customers in the government, and they're going to do very well there. But it's really different. We're talkin' about the inventor, essentially, of infrastructure as a service in Public Cloud and Amazon with a clean sheet of paper. >> Microsoft, Google and the others, they have to catch up. So, really if you look at, let's compare and contrast. Amazon, first mover, they did the heavy lifting up front. They win the CIA deal three, four years ago. Now they're going to win the DOD deal and more. So, they've got the boiler plate, and they've got scale, economies of scale. Microsoft's got to catch up, so, they've got diseconomies of scale. Google is kind of backing out, we heard. Some Google employees revolting cause they don't want to work on these AI projects for drones or what not. But, Google's approach is not tryin' to match Amazon speed for speed, they're thing is they have leverage. Their Android, their security, the data. So, Google's staying much more pragmatic. And they're humble, they're saying, look, we're not tryin' to match Amazon. But we're going to have a badass cloud from a Google perspective. Microsoft hasn't yet said that, they just try to level up. I think if Microsoft takes that approach, they will do well. >> Well, you got to give Microsoft a lot of credit, obviously for the transformation that's occurred. Again it's still tied to the company's software estate, in my view anyway. >> All right Stu, what's your impression, what's your take? >> So, John, like every Amazon show I've been to, I'm impressed, it set a high bar. We go to a lot of shows and not only are there more people here, but the quality of people, the energy, the passion, the discussion of innovation and change, is just super impressive. >> You and I cover cloud data pretty deep. We go to all the shows, obviously the Lennox Foundation and Amazon Reinvent, and others. Does the Public Sector have that vibe in your opinion? What's your sense of it? >> Oh, yeah, no, I've already had a couple of conversations about Kubernetes and Lambda, you know, more serverless conversations at this show than almost any show I go to, other than probably KubeCon or the Serverless conf. So, no, advanced users, these are not the ones, a couple of years ago, oh I'm checking what this is. No, no, no, they're in, they're deep, they're using. >> Yeah, I notice also, near the press room, they had the certification stickers, now levels of certifications. So, they're just movin' the ball down the field at Amazon. Dave, I want to go to you and ask you what your impression is. Obviously, you know, we've done shows like HPE Reinvent, which we didn't do this year. That's goin' down its own path. We've got other shows. >> HPE Discover you mean. >> What did I say? >> You said Reinvent. >> Okay, every year they break. >> There's two ends of the spectrum. >> You know, there's is going to try to transform. What's your take of this show, Public Sector? What's your view? >> Well, first of all, it's packed. And, the ecosystem here is really robust. I mean, you see the consultancies, you see every technology vendor, I mean, it's quite amazing. They got to figure out the logistics, right? I've never seen a line so long. The line to get into registration was longer than Disney lines this morning. I mean, really, it was amazing. >> It's a Disneyland for Public Sector. >> It really is, and people are excited here. I think you were touching upon it before. They've sort of been hit with this bureaucratic, you know, cemented infrastructure. And now, it's like they're takin' the gloves off and they're really excited. >> Stu and Dave, I really got to say, I'm not a big federal person, over the years in my career but my general impression over the past couple years, diggin' in here, is that most of the people in the agency want to do a good job. I saw that last year, it's like, these are real innovators. And finally they can break away, right, and do some real, good. Not do shadow IT, do it legit with a cloud. So, good stuff. Guys, thanks for commentating, Stu? >> Yeah, so let me bring it on home. I just want to say, this goes up in a podcast, if you go to your favorite podcast player and look for theCUBE Insights, you'll find this as well as the key analysis from our team from all of the shows. Of course, as always, go to theCube dot net to get all the research. If you want the exclusive, more detail on Theresa Carlson, just search John Ferrier in Forbes and you'll find that article. This is the end of Day One of two days live coverage from AWS Public Sector. Of course, theCUBE dot net, come find us, we've got stickers if you're at the show. For Dave Vellante, John Furrier, I'm Stu Miniman. And as always, thanks so much for watching theCUBE. (techno music)

>> Announcer: Live, from New Orleans, Louisiana. It's theCUBE! Covering .NEXT conference 2018, brought to you by Nutanix! >> Welcome back to theCUBE! This is SiliconANGLE Media's live production of Nutanix .NEXT 2018. If you've eaten a lot of the cuisine here in New Orleans, you might want to do something to help burn those calories, and joining us for this segment, happy to welcome Sarah Robb O'Hagan, who's the CEO of Flywheel Sports and also the author of Extreme You. Sarah, welcome to our program. >> Thanks for having me! >> Tell us a little bit about your company and what brings your group to the show? >> Yeah, we're very excited to be here, this is a whole new experience for us. Flywheel is an indoor cycling business We started off as basically bricks and mortar, indoor cycling classes, and we were the first company to put technology on the bike, so have either of you done spinning before ever? >> I've seen them in a gym. >> Seen them in a gym. >> I take my bike out on the trails and get my kids out a bunch, but not indoors so much. >> So in the old days if you did a spinning class and the instructor was like turn up your resistance, you'd maybe kind of pretend but you didn't do it, whereas we put tech on the bike so it's like, oh, you have to hit this number and you've got to get this output, and so it makes it much more athletic and accountable, and then we just recently launched a streaming platform, so now you can stream the classes into one of our bikes in your home, it's for flight anywhere, so we ended up coming here 'cause I was speaking at the conference with regards to my book and we were like these are fun people, they're going to want to check out our bikes and our techs, so let's do it. >> Wait, so the tech people, do they get engaged, are they trying it out? >> Oh it's amazing, yeah. We've seen people riding to the leaderboard wearing jeans, it's fantastic. >> I'm a runner, so-- >> Yeah, me too! >> But, you know there's certain runners and there's certain cyclists that there's this built-in competition like, you know, cycling is for the hardcore folks that really like the workout, and then you have guys like me. I can't stream a app to say, hey, you know what, you need to pick up your pace and keep it moving. That is an amazing kind of innovation, especially for that market, there's an awful lot of competition. How are you differentiating yourself between the competition? >> That's a great question. So it starts with who we're serving, who we're doing it for, right, so if there's about a hundred million in America that work out maybe between zero and six times a week. Our consumers are the ones that are like five to six times a week, they are hardcore, they're intense, they like competition, they are, like, I can't let the kids win at Monopoly kind of people, and so how we differentiate is everything in the product has been designed with them in mind, so allowing them to really push their own performance in a big way and the metrics, every time you do a ride, particularly on the streaming platform, you can pace against yourself last time you rode, so you can see am I keeping up, am I doing better, so it's basically about really focusing on one kind of athlete, as we call them, and meeting their needs as best as we can. >> Digital transformation is hitting your industry hard. >> Totally. >> You're streaming now, you've been through some big brands in the past, how's this impacting? How does your company deal with the pace of change? >> Well, you know, it's funny. I have been lucky in that my career, I've journeyed through some very big iconic brands. I was at Virgin Megastores when we used to buy music, do you remember on things that went round and round from retail store, right? And then along came Napster and totally disrupted that industry. I was at Gatorade when we had to transform that, and what I've learned along the way is that you just have to commit yourself to constantly innovating and disrupting yourself. If you let the environment do it to you it's too late, and so I think that's how we think about it, like we soar not so much from the market, because certainly streaming is taking off, like health and fitness apps in the app store are always the top category on both Android and iPhone. Also boutique fitness was exploding, so that's where you do one kind of modality as opposed to going to a full service gym, and so we saw these trends happening, but then you speak to the consumer, it's like what are you looking for? And what we kept hearing was I love being at Flywheel, but I wish I could get it when I was on the road, when I'm in the hotel, when I'm, you know, and so we're like how do we bring out content to you wherever you need it at any time? So that was really what led to it. >> So, I would like to talk to you about discoverability, like as you said, go to the app store, Google fitness app, going to get 10,000 results. How do you guys rise to the top? How do you find new customers? >> Interestingly enough, we, I think, are lucky because of our existing business, so we have a footprint of 42 studios, we have 600,000 people that have ridden with Flywheel over the years, and what's neat about having that in-person experience is you really build brand evangelists, so a lot of our early sales of the streaming platform have come from those people who are telling their friends about it, who are not in communities where our studios exist, and then from obviously a paid digital ad standpoint, we can get very very specific in to look-alike types to the kinds of consumer we have because they have pretty standard typical behaviors, in terms of they happen to do a lot of marathons, they happen to do Tough Mudders and stuff like that. They're runners, they're doing strength workouts, so we can see what these kinds of people are online to really be focused on how we target them. >> So what about the monetization? You know there's the freemium models, there's all different things, how is this move impacted that? >> That's a great question. We're doing our streaming as a subscription model and actually we look for a one year commitment, 'cause we really believe that, particularly 'cause we're going after someone who's very engaged in the category. We want them to sign up and be with the program and basically get that loyalty to, not only the programming, the instructors they love, but the data, like once they've got data in the system that becomes a method of loyalty, because it keeps them wanting to know what their previous results were, so for us we're not really doing free leading in. I mean, certainly we do trial classes in our studios, but we know that people, basically, if they make a commitment, that's how they become really loyal to our brand and our category. >> So talk to us as a leader and someone who's, you know there's probably nothing more personal, more critical to me than my running data, like I completely trust it to my cloud provider, and if it was to ever go away I'd be devastated if I have a big running goal. As you pick technology partners and you have that weight like someone may look at it from the outside, oh, what's the big deal if you're cycling data is gone? That's very serious. How do you pick technology partners that help you to extend the trust that your users put in to you, to your technology partner? >> It's so profoundly important to the relationship with our consumer, that when we're picking technology partners we're always going to go for best in class, and we're always going to make sure those are the people that we know are treating the data with the same kind of importance, I guess, that we are. For example, we're actually doing a lot with Apple right now, not surprisingly with the Apple Watch because that's the kind of partner we see so many of our riders are using Apple Watches in the experience anyway, and we want to be able to take the data that's coming through that device, add it to what we're getting off the bike, and make it more meaningful for that particular consumer. It's very important to us, we would not ever go with some fly-by-night tech partner if they didn't have the kind of credentials that we were looking for. >> Alright. So Sarah, tell us about the book. Step Up, Stand Out, Kick Ass, Repeat? >> Kick ass, people. That's what it's about. So I wrote the book about a couple years ago, it's interesting how it came about, you're a runner so I think you'll appreciate this. I have three kids, and my kids were going and playing new sports, and coming home with participation trophies, and I'm like what the hell is that? Like why did you get a trophy just for showing up, you know? And then at the same time I noticed in the workforce, younger employees that were coming in who were like, where's my promotion? I'm here. It's connected, right? And so I started to do a lot of research, and I realized that for 20, 30 years we have been raising kids from a self-empowerment standpoint, to not expose them to risks and failing and all of these things, yet the most successful people in the world have gone through really tough times to get there, and so I went down this journey of interviewing some really incredible people, like from Condoleezza Rice through to Bode Miller, the skier, through to Mister Cartoon who's a tattoo artist, like all people who are top of their game at what they do. To basically weave together what were the commonalities that got them there to help educate another generation of how to do the same for themselves, and then also applied it to business, so take those themes and how do you bring that to life as a leader within your team to get the most results out of your organization. >> Well it was surprising, well I guess it's not surprising how many people in our industry that are high performers, executives, that are also extreme athletes, whether they're extreme cyclists. Ran into a group of people the other day, one of the cycler's says, "You know what "my biggest complaint about the iPhone is? "It only lasts three hours." >> Yeah, yeah, I get that. >> That same attitude extends out. One question about innovation. How do you guys consider or approach innovation in a market that, like cycling is pretty straight forward, get on a bike and you run, or if you're not directly creating equipment, how do you guys consider innovation, is it just physical, is it data, is it services, what's the approach? >> All of the above, right? And what I love about being in this category, I've been in sports and fitness for 20 years. I was at Nike, I was at Gatorade, and now I'm at Flywheel, and what I love is innovation is all about are we making the athlete better, period. And so it's such a clear filter and that may be through data that gives you insights of how you rode today versus yesterday, what did you eat, did that make the ride better or worse, or it may be, in the case of Nike and Gatorade, the products you put on your body, in your body, like they're all in service of helping you be better and I think it enables us to sort of not get distracted by the sort of, oh, this is the cool hip thing right now that everyone's doing in every category, and instead go is that helping to make an athlete better, is it motivating them, is it helping them physically, is it essentially getting them better results? >> Alright. Sarah Robb O'Hagan, thank you so much for joining us. >> It's been fun. >> We definitely have to check out your area before we wrap up. We'll be back with lots more coverage here from Nutanix .NET's 2018 in New Orleans, for Keith Townsend. I'm Stu Miniman, thanks for watching theCUBE! (light electro music)