from the cube studios in Palo Alto in Boston bringing you data-driven insights from the cube and ETR this is breaking analysis with Dave vellante over the past decade cloudflare has built a Global Network that has the potential to become the fourth us-based hyperscale class cloud in our view the company is building a durable Revenue model with hooks into many important markets these include the more mature DDOS protection space to other growth sectors such as zero trust a serverless platform for application development and an increasing number of services such as database and object storage and other network services in essence cloudflare could be thought of as a giant distributed supercomputer that can connect multiple clouds and act as a highly efficient scheduling engine at scale its disruptive DNA is increasingly attracting novel startups and established Global firms alike looking for Reliable secure high performance low latency and more cost-effective alternatives to AWS and Legacy infrastructure Solutions hello and welcome to this week's wikibon Cube insights powered by ETR in this breaking analysis we initiate our deeper coverage of cloudflare we'll briefly explain our take on the company and its unique business model we'll then share some peer comparisons with both the financial snapshot and some fresh ETR survey data finally we'll share some examples of how we think cloudflare could be a disruptive force with a super cloud-like offering that in many respects is what multi-cloud should have been cloudflare has been on our peripheral radar Ben Thompson and many others have written about their disruptive business model and recently a breaking analysis follower who will remain anonymous emailed with some excellent insights on cloudflare that prompted us to initiate more detailed coverage let's first take a look at how cloudflare seize the world in terms of its view of a modern stack this is a graphic from cloudflare that shows a simple three-layer Stack comprising Storage and compute the lower level and application layer and the network and their key message is basically that the big four hyperscalers have replaced the on-prem leaders apps have been satisfied and that mess of network that you see and Security in the upper left can now be handled all by cloudflare and the stack can be rented via Opex versus requiring heavy capex investment so okay somewhat of a simplified view is those companies on the the left are you know not standing still and we're going to come back to that but cloudflare has done something quite amazing I mean it's been a while since we've invoked Russ hanneman of Silicon Valley Fame on breaking analysis but remember when he was in a meeting one of his first meetings if not the first with Richard Hendricks it was the whiz kid on the show Silicon Valley and hanneman said something like if you had a blank check and you could build anything in the world what would it be and Richard's answer was basically a new internet and that led to Pied Piper this peer-to-peer Network powered by decentralized devices and and iPhones and this amazing compression algorithm that enabled high-speed data movement and low latency uh up to no low latency access across the network well in a way that's what cloudflare has built its founding premise reimagined how the internet should be built with a consistent set of server infrastructure where each server had lots of cores lots of dram lots of cash fast ssds and plenty of network connectivity and bandwidth and well this picture makes it look like a bunch of dots and points of presence on a map which of course it is there's a software layer that enables cloudflare to efficiently allocate resources across this Global Network the company claims that it's Network utilization is in the 70 percent range and it has used its build out to enter the technology space from the bottoms up offering for example free tiers of services to users with multiple entry points on different services and selling then more services over time to a customer which of course drives up its average contract value and its lifetime value at the same time the company continues to innovate and add new services at a very rapid cloud-like Pace you can think of cloudflare's initial Market entry as like a lightweight Cisco as a service the company's CFO actually he uses that term he calls it that which really must tick off Cisco who of course has a massive portfolio and a dominant Market position now because it owns the network cloudflare is a marginal cost of adding new Services is very small and goes towards zero so it's able to get software like economics at scale despite all this infrastructure that's building out so it doesn't have to constantly face the increasing infrastructure tax snowflake for example doesn't own its own network infrastructure as it grows it relies on AWS or Azure gcp and and while it gives the company obvious advantages it doesn't have to build out its own network it also requires them to constantly pay the tax and negotiate with hyperscalers for better rental rates now as previously mentioned Cloud Fair cloudflare claims that its utilization is very high probably higher than the hyperscalers who can spin up servers that they can charge for underutilized customer capacity cloudflare also has excellent Network traffic data that it can use to its Advantage with its Analytics the company has been rapidly innovating Beyond its original Core Business adding as I said before serverless zero trust offerings it has announced a database it calls its database D1 that's pretty creative and it's announced an object store called R2 that is S3 minus one both from the alphabet and the numeric I.E minus the egress cost saying no egress cost that's their big claim to fame and they've made a lot of marketing noise around about that and of course they've promised in our a D2 database which of course is R2D2 RR they've launched a developer platform cloudflare can be thought of kind of like first of all a modern CDN they've got a simpler security model that's how they compete for example with z-scaler that brings uh they also bring VPN sd-wan and DDOS protection services that are that are part of the network and they're less expensive than AWS that's kind of their sort of go to market and messaging and value proposition and they're positioning themselves as a neutral Network that can connect across multiple clouds now to be clear unlike AWS in particular cloudflare is not well suited to lift and shift your traditional apps like for instance sap Hana you're not going to run that in on cloudflare's platform rather the company started by making websites more secure and faster and it flew under the radar and much in the same way that clay Christensen described the disruption in the steel industry if you've seen that where new entrants picked off the low margin rebar business then moved up the stack we've used that analogy in the semiconductor business with arm and and even China cloudflare is running a similar playbook in the cloud and in the network so in the early part of the last decade as aws's ascendancy was becoming more clear many of us started thinking about how and where firms could compete and add value as AWS is becoming so dominant so for instance take an industry Focus you could do things like data sharing with snowflake eventually you know uh popularized you could build on top of clouds again snowflake is doing that as are others you could build private clouds and of course connect to hybrid clouds but not many had the wherewithal and or the hutzpah to build out a Global Network that could serve as a connecting platform for cloud services cloudflare has traction in the market as it adds new services like zero trust and object store or database its Tam continues to grow here's a quick snapshot of cloudflare's financials relative to Z scalar which is both a competitor and a customer fastly which is a smaller CDN and Akamai a more mature CDN slash Edge platform cloudflare and fastly both reported earnings this past week Cloud Fair Cloud flare surpassed a billion dollar Revenue run rate but they gave tepid guidance and the stock got absolutely crushed today which is Friday but the company's business model is sound it's growing close to 50 annually it has sas-like gross margins in the mid to high 70s and it's it it's got a very strong balance sheet and a 13x revenue run rate multiple in fact it's Financial snapshot is quite close to that of z-scaler which is kind of interesting which zinc sailor of course doesn't own its own network that's a pure play software company fastly is much smaller and growing more slowly than cloudflare hence its lower multiple well Akamai as you can see is a more mature company but it's got a nice business now on its earnings call this week cloudflare announced that its head of sales was stepping down and the company has brought in a new leader to take the firm to five billion dollars in sales I think actually its current sales leader felt like hey you know my work is done here bring on somebody else to take it to the next level the company is promising to be free cash flow positive by the end of the year and is working hard toward its long-term financial model or so working towards sorry it's a long-term financial model with gross margin Targets in the mid 70s it's targeting 20 non-gaap operating margins so so solid you know very solid not like completely off the charts but you know very good and to our knowledge it has not committed to a long-term growth rate but at that sort of operating profit level you would like to see growth be consistently at least in the 20 range so they could at least be a rule of 40 company or perhaps even even five even higher if they're going to continue to command a premium valuation okay let's take a look at the ETR data ETR is very positive on cloudflare and has recently published a report on the company like many companies cloudflare is seeing an across the board slowdown in spending velocity we've reported on this quite extensively using the ETR data to quantify the degree to that Slowdown and on the data set with ETR we see that many customers they're shifting their spend to Flat spend you know plus or minus let's say you know single digits you know two three percent or even zero or in the market we're seeing a shift from paid to free tiers remember cloudflare offers a lot of free services as you're seeing customers maybe turn off the pay for a while and going with the freebie but we're also seeing some larger customers in the data and the fortune 1000 specifically they're actually spending more which was confirmed on cloudflare's earnings call they did say everything across the board was softer but they did also indicate that some of their larger customers are actually growing faster than their smaller customers and their churn is very very low here's a two-dimensional graphic we'd like to share this view a lot it's got Net score or spending momentum on the vertical axis and overlap or pervasiveness in the survey on the horizontal axis and this cut isolates three segments in the etrs taxonomy that cloudflare plays in Cloud security and networking now the table inserted in that upper left there shows the raw data which informs the position of each company in the dots with Net score in the ends listed in that rightmost column the red dotted line indicates a highly elevated Net score and finally we posted the breakdown those colors in the bottom right of cloudflare's Net score the lime green that's new adoptions the forest green is we're spending more six percent or more the gray is flat plus or minus uh five percent and you can see that the majority of customers you can see that's the majority of the customers that gray area the pink is we're spending Less in other words down six percent or worse and the bright red is churn which is minimal one percent very good indicator for for cloudflare what you do to get etr's proprietary Net score and they've done this for many many quarters so we have that time series data you subtract the Reds from the greens and that's Net score cloudflare is at 39 just under that magic red line now note that cloudflare and zscaler are right on top of each other Cisco has a dominant position on the x-axis that cloudflare and others are eyeing AWS is also dominant but note that its Net score is well above the red dotted line it's incredible Palo Alto networks is also very impressive it's got both a strong presence on the horizontal axis and it's got a Net score that's pretty comparable to cloudflare and z-scaler to much smaller companies Akamai is actually well positioned for a reasonably mature company and you can see fastly ATT Juniper and F5 have far less spending momentum on their platforms than does cloudflare but at least they are in positive Net score territory so what's going to be really interesting to see is whether cloudflare can continue to hold this momentum or even accelerate it as we've seen with some other clouds as it scales its Network and keeps adding more and more services cloudflare has a couple of potential strategic vectors that we want to talk about and it'll be going to be interesting to see how that plays out Now One path is to compete more directly as a Cloud Player offering secure access Edge services like firewall as a service and zero Trust Services like data loss prevention email security from its area one acquisition and other zero trust offerings as well as Network Services like routing and network connectivity this is The Sweet Spot of the company load balancing many others and then add in things like Object Store and database Services more Edge services in the future it might be telecom like services such as Network switching for offices so that's one route and cloudflare is clearly on that path more services more cohorts at innovating and and growing the company and bringing in more Revenue increasing acvs and and increasing long-term value and keeping retention high now the other Vector is what we're just going to refer to as super cloud as an enabler of cross-cloud infrastructure this is new value uh relative to the former Vector that we were just talking about now the title of this episode is what multi-cloud should have been meaning cloudflare could be the control plane providing a consistent experience across clouds one that is fast and secure at global scale now to give you Insight on this let's take a look at some of the comments made by Matthew Prince the CEO and co-founder of cloudflare cloudflare put its R2 Object Store into public beta this past May and I believe it's storing around a petabyte of data today I think that's what they said in their call here's what Prince said about that quote we are talking to very large companies about moving more and more of their stored objects to where we can store that with R2 and one of the benefits is not only can we help them save money on the egress fees but it allows them to then use those object stores or objects across any of the different Cloud platforms they're that they're using so by being that neutral third party we can let people adopt a little bit of Amazon a little bit of Microsoft a little bit of Google a little bit of SAS vendors and share that data across all those different places so what's interesting about this in the super cloud context is it suggests that customers could take the best of each Cloud to power their digital businesses I might like AWS for in redshift for my analytic database or I love Google's machine learning Microsoft's collaboration and I'd like a consistent way to connect those resources but of course he's strongly hinting and has made many public statements that aws's egress fees are a blocker to that vision now at a recent investor event Matthew Prince added some color to this concept when he talked about one metric of success being how much R2 capacity was consumed and how much they sold but perhaps a more interesting Benchmark is highlighted by the following statement that he made he said a completely different measure of success for R2 is Andy jassy says I'm sick and tired of these guys meaning cloudflare taking our objects away we're dropping our egress fees to zero I would be so excited because we've then unlocked the ability to be the network that interconnects the cloud together now of course it would be Adam solipski who would be saying that or maybe Andy Jesse you know still watching over AWS and I think it's highly unlikely that that's going to happen anytime soon and that of course but but in theory gets us closer to the super cloud value proposition and to further drive that point home and we're paraphrasing a little bit his comments here he said something the effect of quote customers need one consistent control plane across clouds and we are the neutral Network that can be consistent no matter which Cloud you're using interesting right that Prince sees the world that's similar to if not nearly identical to the concepts that the cube Community has been putting forth around supercloud now this vision is a ways off let's be real Prince even suggested that his initial vision of an application running across multiple clouds you know that's like super cloud Nirvana isn't what customers are doing today that's that's really hard to do and perhaps you know it's never going to happen but there's a little doubt that cloudflare could be and is positioning itself as that cross-cloud control plane it has the network economics and the business model levers to pull it's got an edge up on the competition at the edge pun intended cloudflare is the definition of Edge and it's distributed platform it's decentralized platform is much better suited for Edge workloads than these giant data centers that are you know set up to to try and handle that today the the hyperscalers are building out you know their Edge networks things like outposts you know going out to the edge and other local zones Etc now cloudflare is increasingly competitive to the hyperscalers and those traditional Stacks that it depositioned on an earlier slide that we showed but you know the likes of AWS and Dell and hpe and Cisco and those others they're not sitting in their hands they have a huge huge customer install bases and they are definitely a moving Target they're investing and they're building out their own Super clouds with really robust stacks as well let's face it it's going to take a decade or more for Enterprises to adopt a developer platform or a new database Cloud plus cloudflare's capabilities when compared to incumbent stacks and the hyperscalers is much less robust in these areas and even in storage you know despite all the great conversation that R2 generated and the buzz you take a specialist like Wasabi they're more mature they're more functional and they're way cheaper even than cloudflare so you know it's not a fake a complete that cloudflare is going to win in those markets but we love the disruption and if cloudflare wants to be the fourth us-based hyperscaler or join the the big four as the as the fifth if we put Alibaba in the mix it's got a lot of work to do in the ecosystem by its own admission as much to learn and is part of the value by the way that it sees in its area one acquisition it's email security company that it bought but even in that case much of the emphasis has been on reseller channels compare that to the AWS ecosystem which is not only a channel play but is as much an innovation flywheel filling gaps where companies like snowflake Thrive side by side with aws's data stores as well all the on-prem stacks are building hybrid connections to AWS and other clouds as a means of providing consistent experiences across clouds indeed many of them see what they call cross-cloud services or what we call super cloud hyper cloud or whatever you know Mega Cloud you want to call it we use super cloud they are really eyeing that opportunity so very few companies frankly are not going after that space but we're going to close with this cloudflare is one of those companies that's in a position to wake up each morning and ask who can we disrupt today and very few companies are in a position to disrupt the hyperscalers to the degree that cloudflare is and that my friends is going to be fascinating to watch unfold all right let's call it a wrap I want to thank Alex Meyerson who's on production and manages the podcast as well as Ken schiffman who's our newest addition to the Boston Studio Kristen Martin and Cheryl Knight help us get the word out on social media and in our newsletters and Rob Hof is our editor-in-chief over at silicon angle thank you to all remember all these episodes are available as podcasts wherever you listen all you're going to do is search breaking analysis podcasts I publish each week on wikibon.com and siliconangle.com you can email me at david.velante at siliconangle.com or DM me at divalante if you comment on my LinkedIn posts and please do check out etr.ai they got the best survey data in the Enterprise Tech business this is Dave vellante for the cube insights powered by ETR thank you very much for watching and we'll see you next time on breaking analysis

>>thank you very much for this opportunity to talk about Stamp with a bio design program, which is entrepreneurship education for the medical devices. My name is Julia Key Can. Oh, I am Japanese. I have seen the United States since two doesn't want on the more than half of my life after graduating from medical school is in the United States. I hope I can contribute to make them be reached between Japan that you were saying right I did the research in the period of medical devices with a patient all over the world today is my batteries met their country finished medication stamp of the city. Yeah, North Korea academia, but also a wrong. We in the industry sectors sometimes tried to generate new product which can generate revenue from their own research outward, it is explained by three steps. The first one is the debut river, which is the harbor Wrong research output to the idea which can be product eventually. That they are hard, though, is the best body, which is a hot Arboria. From idea to commercial for the other one is that we see which is a harder to make a martial hold up to become a big are revenue generating products for the academia that passed the heart is a critical on the essential to make a research output to the idea. Yeah, they're two different kind of squash for the developing process in the health care innovation, Why's bio and by all the farmer under the other one is medical device regarding the disciplining method is maybe in mechanical engineering. Electrical engineering on the medical under surgical by Obama is mainly chemical engineering, computer science, biology and genetics. However, very important difference off these to be the innovation process. Medic is suitable on these digital innovation and by Obama, is suitable discovery process needs. Yeah, in general transformation of medical research between the aroma academia output to the commercial product in the medical field is called bench to bed. It means from basically such to critical applications. But it is your bio on the path. Yeah, translation. Medical research for medical devices is better. Bench on back to bed, which means quicker Amit needs to bench on back to Greek application. The difference off the process is the same as the difference off the commercialization. Yeah, our goal is to innovate the newer devices for patient over the war. Yeah, yeah, there are two process to do innovation. One is technology push type of innovation. The other one is news, full type of innovation. Ignore the push stop Innovation is coming from research laboratory. It is suitable for the farm on the bios. Happy type of innovation. New, useful or used driven type of type of innovation is suitable for medical devices. Either Take this topic of innovation or useful type of innovation. It is important to have Mini's. We should think about what? It's waas Yeah, in 2001 stop for the Cube, API has started to stop with Bio Design program, which is on entrepreneurship education for medical devices. Our mission is educated on empowering helps technology, no based innovators on the reading, the transition to a barrier to remain a big innovation ecosystem. Our vision is to be a global leader in advancing Hearst technology innovation to improve lives everywhere. There are three steps in our process. Off innovation, identify invent on England. Yeah, yeah. The most important step is the cluster, which is I didn't buy. I didn't buy a well characterized needs is the Vienna off a grating vision. Most of the value off medical device development is due to Iraq Obina unmet needs. So we focused in this gated by creates the most are the mosque to find on the Civic on appropriate. Yeah, our barrels on the student Hickory World in March, disparate 19 that ideally include individual, which are background in many thing engineering on business. Yeah, how to find our needs. Small team will go to the hospital or clinic or environment to offer them the healthcare providers with naive eyes. The team focused. You look to keep all the um, it needs not technology. This method is senior CTO. It's a rocket car approach which can be applied all that design, thinking the team will generate at least 200 needs from economic needs. Next stick to identify Pace is to select the best. Amit Knees were used for different aspect, which can about it the nominees. These background current existing solutions market size on the stakeholders. Once we pick up ur madness from 200 nominees, they can move to the invention pates. Finally, they can't be the solution many people tend to invent on at the beginning base without carefree evaluating its unmet knees to result in a better tend to pouring love. Their whole idea, even amid NIS, is not what this is. Why most of the medical device innovation fail due to the lack off unmet needs. To avoid this Peter Hall, our approach is identify good needs. First on invention is the sex to generate the idea wrong. Unmet knees. We will use seven Rules off race Tony B B zero before judgment encourage wild ideas built on the ideas off. Others. Go Conte. One conversation time. Stay focused on the topic. The brainstorming is like association game. Somebody's idea can stimulate the others ideas. After generating many ideas, the next step is sleeping of idea whether use five different Dustin to embody the ideas. Intellectual property regulatory. Remember National Business Model on technology How, after this election step, we can have the best solution with system it needs, and finally team will go to the implementation pace. This place is more business oriented mothers. The strategy off business implementations on the business planning. Yeah, yeah, students want more than 50 starting up are spinning off from by design program. Let me show one example This is a case of just reputations. If patient your chest pain, most of that patient go to family doctor and trust. The first are probably Dr before the patient to General Securities. General Card, obviously for the patient Director, Geologist, Director, API geologist will make a reservation. Horta uses it. Test patient will come to the clinic people for devices in machine on his chest. Well, what? Two days? Right? That patient will visit clinic to put all the whole decency After a few days off. Analysis patient Come back to Dr to hear the result Each step in his money to pay. This is a minute, Knees. This is a rough sketch off the solutions. The product name is die. A patch on it can save about $620. Part maybe outpatient right here. >>Yeah, yeah. Life is stressful. We all depend on our heart with life source of our incredible machine. The body, however, sometimes are hard Need to check up. Perhaps you felt dizzy heart racing or know someone who has had a serious heart problem The old fashioned monitors that used to get from most doctors or bulky And you can't wear them exercising or in the shower. If appropriate for you, sudden life will provide you the eye rhythm. Zero patch to buy five inch band aid like patch would. You can apply to your chest in the comfort of your own home or in the gym. It will monitor your heart rate for up to 14 days. You never have to come into a doctor's office as you mail back. Patched us shortly after you were receiving. Easy to understand report of your heart activity, along with recommendations from a heart specialists to understand the next steps in your heart. Health sudden life bringing heart monitoring to you. >>This is from the TV broadcasting become Ah, this is a core value we can stamping on his breast. He has a connotation of the decent died. Now the company names Iris is in the public market cap off. This company is more than six billion di parts is replacing grasp all or that you see the examination. However, our main product is huge. The product lifecycle Very divisive, recent being it's. But if we can educate the human decision oil because people can build with other people beyond space and yeah, young broader stop on by design education is now runs the media single on Japan. He doesn't 15 PBS probably star visited Stamp of the diversity and Bang. He announced that Japan, by design, will runs with vampires. That problem? Yeah, Japan Barzan program has started a University of Tokyo Osaka University and we've asked corroborating with Japanese government on Japanese medical device Industry s and change it to that. Yeah, this year that it's batch off Japan better than parachute on. So far more than five. Starting up as being that's all. Thank you very much for your application.

>>from Santa Clara, California. In the heart of Silicon Valley, it's the queue covering altitude 2020. Brought to you by aviatrix. >>Next panel is the aviatrix certified engineers, also known as Aces. This is the folks that are certified their engineering. They're building these new solutions. Please welcome Toby Foster Informatica Stacy Linear from terror data. And Jennifer read with Victor Davis to the stage. >>So we're gonna show you a jacket. Yeah, I get it. >>I was just gonna I was just gonna really rib you guys. See? Where's your jackets? And Jen's got the jacket on. Okay. >>Good. Love. The aviators. Aces, Pilot gear. They're above the clouds. Storage to new heights. So guys, aviatrix pace is love the name. I think it's great. Certified. This is all about getting things engineered. So that level of certification I want to get into that. But first take us through the day in the life on a SAS. And just to point out, Stacy's a squad leader. So he's He's like Squadron leader, quadrant leader, quadrant leader. So it's got a bunch of pieces underneath him, but share your perspective day in the life. We'll start with you. >>Sure, So I have actually a whole team that works for me both in the in the North America, both in the U. S. And in Mexico. And so I'm eagerly working to get them certified as well, so I can become a squad leader myself. But it's important because one of the critical gaps that we found is people having the networking background. Because there you graduate from college and you have a lot of computer science background. You can program. We've got python, but now working and packets they just don't get. And so just taking them through all of the processes that it's really necessary to understand when you're troubleshooting is really critical. And, um, because you're going to get an issue where you need to figure out where, exactly is that happening on the network, you know, is by my issue just in a vpc is on the instant side is a security group or is it going on prim? And is this something actually embedded within Amazon itself? I mean, I trouble shot an issue for about six months going back and forth with Amazon, and it was the VW VPN because they were auto scaling on two sides, and we ended up having to pull out the Cisco's and put in aviatrix so I could just say OK, it's fixed and actually actually help the application teams get to that and get it solved. But I'm taking a lot of junior people and getting them through that certification process so they can understand and see the network The way I see the network, I mean, look, I've been doing this for 25 years, but I got out when I went in the Marine Corps. That's what I did and coming out The network is still the network, but people don't get the same training they get. They got >>just so he just write some software that takes care of itself, but we'll come back to that. I want to come back to that problem solve with Amazon, but I think the only thing I have to >>add to that is that it's always the network as long as I've been in. Networking has always been the network's fault. If you're in the I'm even to this day, you know, still, networks fault, and part of being a network guy is that you need to prove when it is and when It's not your fault. And that means you need to know a little bit about 100 different things. Make that >>And now you got a full stack. Dev Ops, you know, a lot more time. Another 100 times are changing your squadron leader. I get that right. What is? What is the squadron leader first? Could you describe what it is? I think probably just leading off with network components of it. But they from my perspective when you think about what you asked them was it's about no issues and the escalations off my days like that. That's a good outcome. That's a good day. Is a good day's a good day for you. Mention the Amazon. This brings up a good point when you have these new waves come in. You have a lot of new things. New use cases, a lot of the finger point against that guy's problem that girls problems. So what? How do you solve that? And how do you get the young guns up to speed? Is there training is that this with a certification comes in, >>whatever the certification is really going to come in I know when we, uh, we got together at reinvent one of the questions that that we had with with Steven the team was What? What should our certification look like? You know, she would just be teaching about what aviatrix troubleshooting brings to bear. But what should that be like? And I think Toby and I was like, No, no, no, no, that's going a little too high. We need to get really low because the better someone can get actually understanding what's actually happening in the network and where to actually troubleshoot the problem, how to step back each of those processes. Because without that, it's just a big black box and they don't know, you know, because everything is abstracted in Amazon and a Net and Azure and Google, it's abstracted in there. These virtual gateways they have VPN is that you just don't have the logs on is you just don't know. And so then what tools can you put in front of them of where they can look because there are full logs? Well, as long as they turned on the flow logs when I built it, you know, and there's like each one of those little things that well, if they had decided to do that when they built it, it's there. But if you can come in later to really supplement that with training to actual troubleshoot and do a packet capture here as it's going through the teaching them how to read act. Even >>so, we were talking before we came on up on stage about your career. You've been networking all your time, and then, you know, you're no mentoring a lot of younger people. How is that going? Because the people who come in fresh, they don't have all the old war stories they don't talk about, You know, it's never fall. I walk in bare feet in the snow when I was your age, so easy now, right? They say, What's your take on how you train the young piece? >>So I've noticed two things. One is that they are up to speed a lot faster in generalities of networking. They can tell you what network is in high school level now where I didn't learn that until midway through my career, and they're learning it faster, but they don't necessarily understand why it's that way here, you know, everybody thinks that it's always slash 24 for a submit, and they don't understand why you can break it down. Smaller. What? It's really necessary. So the ramp up speed is much faster for these guys that are coming in, but they don't understand why. And they need some of that background knowledge to see where it's coming from. And why is it important? And that's old guys. That's where we thrive. >>Jennifer, you mentioned you got in from the Marines helps. But when you got into networking, how what was it like that? And compare it now? Almost like we heard earlier. Static versus Dynamic. Don't be static. And then you just set the network. You got a perimeter? >>Yeah. No, there was no such thing. Yeah, no. So, back in the day, I mean, yeah, I mean, we had banyan vines for email, you know, we had token ring and I had to set up token ring networks and figure out why that didn't work. Because how many of things were actually sharing it, But then actually, just cutting fiber and running fiber cables and dropping them over, you know, shelters to plug them in, and Oh, crap. They swung it too hard and shattered. And I got a great polish this thing and actually shoot like to see if it works. I mean, that was the network crypt. Five cat, five cables to run an Ethernet, you know? And then from that to set network switches. Dumb switches like those were the most common ones you had then, actually configuring routers and, you know, logging into a Cisco router and actually knowing how to configure that. And it was funny because I had gone all the way up. It was a software product manager for a while, So I've gone all the way up the stack. And then, ah, two and 1/2 3 years ago, I came across, too, to work with NTT Group that became Victor Davis. But we went to help one of our customers, Avis, and it was like, Okay, so we need to fix the network. Okay, I haven't done this in 20 years, but all right, let's get to it, you know, because it really fundamentally does not change. It's still the network. I mean, I've had people tell me Well, you know, when we go to containers, we will not have to worry about the network. And I'm like, Yeah, you don't I >>dio. And then with this with program ability is really interesting. So I think this brings up the certification. What are some of the new things that people should be aware of that come in with the aviatrix? A certification? What are some of the highlights? Can you guys share some of the highlights around certifications? >>I think some of the importance is that its it doesn't need to be vendor specific for network generality or basic networking knowledge. And instead of learning how Cisco does something or how Palo Alto does something, we need to understand how and why it works as a basic model and then understand how each vendor has gone about that problem and solve it in a general. That's true in Multi Cloud as well. You can't learn how cloud networking works without understanding how AWS and Measure and GC P r. All slightly the same, but slightly different and some things work and some things don't. I think that's probably the number one take. >>I think having a certification across clouds is really valuable because we heard the global outside of the business issues. What does it mean to do? That code is that networking is the configurations that aviatrix what is the state matrix is a certification, but what is it about the multi cloud that makes it multi networking and multi vendor? But the >>easy answer is yes, >>yes, it's >>all got to be a general. Let's get your hands and you have to be >>right. And it takes experience because it's every every cloud vendor has their own certification. Um, whether that stops and, um, advanced networking and events, security or whatever it might be. Yeah, they can take the test, but they have no idea how to figure out what's wrong with that system in the same thing with any certification. But it's really getting your hands in there. And actually having to troubleshoot the problems, you know, actually work the problem, you know, and calm down. It's going to be OK because I don't know how many calls I've been on or even had aviatrix join me on. It's like, Okay, so everyone calm down. Let's figure out what's happening. It's like we've looked at that screen three times looking at it again. It's not going to solve that problem, right, But at the same time, remaining calm. But knowing that it really is, I'm getting a packet from here to go over here. It's not working. So what could be the problem, you know, and actually stepping them through those scenarios. But that's like, you only get that by having to do it, you know, and and seeing it and going through it. And >>I have a question. So, you know, I just see it. We started this program maybe six months ago. We're seeing a huge amount of interest. I mean, where oversubscribed on all the training sessions, we've got people flying from around the country, even with Corona virus flying to go to Seattle to go to these events were over >>subscribed. Good is that originally they would put their Yeah. Is >>that something that you see in your organizations? Are you recommending that two people do you see? I mean, I'm just I guess I'm surprised. I'm not surprised, but I'm really surprised by the demand, if you would of this multi cloud network certification. Is there really isn't anything like that? Is that something you guys could comment on? That do you see the same things in your organization I see from >>my side Because we operate in a multi cloud environments that really helps. It's beneficial. Yeah, >>I think I would add that, um, networking guys have always needed to use certifications to prove that they know what they know. It's not good enough to say. Yeah, I know. I p addresses are I know how the network works and a couple little check marks. Our little letters by your helps give you validity. So even in our team, we can say, Hey, you know, we're using these certifications to know that you know enough of the basics and enough of the understandings that you have the tools necessary, >>right? So I guess my final question for you guys is why and a certification is relevant. And then second part is share with Livestream folks who aren't yet a certified or might want to jump in to be aviator certified engineers. Why is it important? So why is it relevant? And why should someone want to be a certified engineer? >>I think my V is a little different. I think certification comes from proving that you have the knowledge not proving that you get a certification to get. I mean, they're backwards. So when you've got the training and the understanding in the you use that to prove and you can, like, grow your certification list with it versus studying for a test to get a certification and have no understanding of >>that. So that who is the right person that look at this and saying I'm qualified is a network engineer. Is that a Dev ops person? What your view? Is it a certain >>you know, I think Cloud is really the answer. It's the as we talked like the edge is getting eroded. So is the network definition getting eroded? We're getting more and more of some network. Some develop some security lots and lots of security. Because network is so involved in so many of them, that's just the next progression. >>You want to add something there, I would say expand that to more automation engineers because we have those now, so I'm probably extended >>Well, I think the training classes themselves are helpful, especially the entry level ones for people who maybe quote unquote cloud architects. But I've never done anything in networking for them to understand why we need those things to really work, Whether or not they go through it. Eventually get a certification is something different. But I really think fundamentally understanding how these things work. It makes them a better architect. Make some better application developer, but even more so as you deploy more of your applications into the cloud. Really getting an understanding even from our people have tradition down on Prem networking. They can understand how that's gonna work in the cloud. >>I know we've got just under 30 seconds left. I want to get one more question than just one more for the folks watching that are maybe younger than I don't have. The networking training from your experience is, each of you can answer. Why should they know about networking? What's the benefit? What's in it for them? Motivate them, share some insights and why they should go with the deeper and networking space we'll start with. You know, I would say it's probably fundamental right after delivery solutions networking. Use the very top. I >>would say. If you fundamental of an operating system running on a machine, how those machines talk together, um, is a fundamental change is something that starts from the base and work your way up. >>Well, I think it's a challenge because you've come from top down. Now you're going to start looking from bottom up, and you want those different systems to cross, communicate and say you built something and your overlapping eyepiece space. Not that that doesn't happen. But how can I actually make that still operate without having to re? I re platform? It's like those challenges, like those younger developers or Cisco engineers can really start to get their hands around and understand those complexities and bring that forward in their careers. >>And, you know, the pipes are working plumbing. >>That's right. >>And they know how it works. How to code it. >>That's right. >>Awesome. Thank you, guys for great insights. Ace certified engineers, also known as aces, give a round of applause. >>Yeah, Yeah, that's great. Thank you. Okay, alright, that >>concludes my portion. Thank you, Steve. Thanks for having >>on. Thank you very much. That was fantastic. Everybody >>running with John Furrier. Yeah. So Great event. Great event. I'm >>not gonna take along with that. We got lunch outside for the people here. Just a couple of things. I just called action, right? So we saw the aces. You know, for those of you out of the stream here, become a certified. It's great for your career. Is great for not knowledge is is fantastic. It's not just an aviatrix thing. It's going to teach you about cloud networking, multi cloud networking with a little bit of aviatrix, exactly what the Cisco CC IE program was for I p Network. That type of the thing that's number one second thing is, is is learn, right? So there's a There's a link up there for the for to join the community, get like I started this. This is a community. This is the kickoff to this community, and it's a movement. So go to what may be community dot IBM dot com. Starting a community of multi cloud. So you get trained learn. I'd say the next thing is we're doing over 100 seminars in across the United States and also starting into Europe. Soon we will come out and we'll actually spend a couple hours and talk about architecture and talk about those beginning things. For those of you on the you know, on the live stream in here as well. You know, we're coming to a city near you. Go to one of those events. It's a great way to network with other people that are in the industry as well is to start to learn and get on that multi cloud journey. And then I'd say the last thing is, you know, we haven't talked a lot about what aviatrix does here, and that's intentional. We want you, you know, leaving with wanting to gnome or and schedule get with us and schedule a multi our architecture workshop sessions. So we we sit down with customers and we talk about where they're at in that journey and, more importantly, where they're going and define that end state architecture from networking, compute storage, everything and everything you've heard. Today. Every panel kept talking about architecture, talking about operations. Those are the types of things that we saw. We help. You could define that canonical architecture that system architecture, that's yours. So for so many of our customers, they have three by five plotted lucid charts, architecture, drawings, and it's the customer name slash aviatrix our network architecture, and they put it on the whiteboard that's what we and that's the most valuable thing they get from us. So this becomes there 20 year network architecture, drawing that. They don't do anything without talking us. And look at that architecture. That's what we do in these multi hour workshop sessions with customers. And that's super super powerful. So if you're interested, definitely call us. And let's schedule that with our team. So anyway, I just want to thank everybody on the livestream. Thank everybody here. Hopefully it was It was very useful. I think it waas and join the movement. And for those of you here, join us for lunch and thank you very much. >>Yeah, >>yeah, yeah.

>> Announcer: Live from Copenhagen Denmark, it's theCUBE covering Kubecon and CloudnativeCon Europe 2018. Brought to you by the Cloud Native Computing Foundation and its ecosystem partners. >> Welcome back everyone, live here at Copenhagen, Denmark, Cube's coverage of Kubecon 2018 in Europe, this is all about the Kubernetes the future of cloud native, CloudNativeCon part of the CNCF Cloud Native Foundation, I'm John Furrier and my co-host Lauren Cooney, founder of Spark Labs industry expert of open source. So, we have two end user customers of Kubernetes and Cloud Native, Zach Arnold, software engineer Ygenre energy fund, and Austin Adams software development manager, same company. You guys are doing really interesting business model around energy and equity in buildings and homes, but you're writing code, so you have to make all this stuff work, so I'm sure you're cloud native, why have a data center when you can have the cloud >> Austin : We were born in the cloud. >> You were born in the cloud. So take us through, explain the business real quick, and then what's your back end, technical scaling situation look like in terms of infrastructure, software and what's the make up of the systems. >> Zach: You know the business best. >> Yeah, so Ygrene operates under something called PACE, property assess clean energy. We operate in a couple of different states. We work with local governments to create a PACE program that is accepted in different counties or jurisdictions within the state, and then we allow homeowners and contracting companies to provide financing for home improvements that are specifically within the domain of renewable energy or energy efficiency. >> So, you basically finance a solar panel that I put on my house or building if there's benefits there, and then you guys get the financing and you tie in with the government so the property taxes, the leverage the security is the building right, or the asset. >> Yeah, and the way that we're chartered is basically we can put a tax on the property which gives us some guarantees on repayment and things like that, and it's a great model so far. >> It's a new financial engineering around energy efficiancy so you've got to build systems, so you're working with government, so now we all know how government systems work, so you've got to be agile and nimble. Take us through how the back end works, what's it look like, what's the system look like, you're hosted in the cloud, is it Amazon, Google? >> So everything that we have is in a cloud provider that starts with an A, and ends with an S, it's AWS I don't know if I can say that, I think I can say that, AWS all the way-- >> Yes, it's good. >> And we have tons of services, we have Kubernetes running most of our main services. Within our migration we actually started with our main service. A lot of people start with, you know, their smallest microservice, we just went whole-hog and just went in for it, so they system is mainly a lone-management system. Underwriting data aggregation and underwriting processing, so every application that comes in we have to underwrite it and make sure every little thing checks out, and our underwriting system has won awards for how accurate it is and how high quality it is as well. >> So, I'm doing a mental white board in my mind, just kind of graphing this so just help me out here and take us through this. So, you guys are a cutting edge company, new progressive business model, real innovative, great stuff. Cloud native, so you're born in the cloud no data center, cool, check, it's what everyone does, and now you're like okay, now I've got to deal with these legacy systems. So, you're putting containers around things, so you have to interface, you build your own system so that's cool, but you're dealing with other systems and then how are you handling that, you are just containerizing it, so take us through some of those linkages. >> Yeah, so where we're creating, a lot of times when we have to integrate with another system, we'll create a small service that is code that we own, and we'll reach out to those integrations, those vendors and we'll do aggregation within our system and provide an interface back to our systems. You know, like everyone, we're breaking up the monolith or whatever, maybe in 10 years we'll go back to a monolith, who knows but you know we're slicing out things, making microservices, it looks like a mess on the back end, just tons of microservices going everywhere and that's why we're using all these Cloud Native tools to be able to manage that. So, in order to move quickly, we're wanting to containerize everything, everything runs in a container at this point. >> Lauren: Great. >> A lot of our services follow this kind of we're kind of calling the container adaptor pattern, it follows the software adaptor pattern where, just like Austin was saying, let's say for example we're interfacing with a credit vendor, we create a service where we talk to our own service that has a well defined interface that we know will always get a credit report back with the following fields, but then where that information actually comes from, whether it's one of the big three credit vendors or someone else who has a well defined API, that's largely not the concern of the main loan management system, it's the concern of the microservice that's responsible for reaching out to that other entity there. So, that's how we've kind of gotten to beat around the legacy interfacing of all these other different financial services and tools that help to aggregate data.. >> It's super clever you can optimize on a service basis but now you have to orchestrate and kind of conduct everything through-- >> And keep everything secure. >> That's really interesting, I mean I think what I'm looking at here is a huge ecosystem of partners and companies and end users coming together and one of the questions, beyond why you are here, what are you looking at here, what is interesting to you, what do you want to learn about that you might bring into your, you know, architecture essentially? >> Austin and I were talking about this, we kind of tend to look at the CNCF list of projects as a dinner menu. (laughs) >> We're refreshing that page frequently, because we're adding projects at an alarming rate, but one project we're using FluentD, Notary, Kubernetes, of course, Prometheus, things like that, we want to start using those things more extensively. One's that we're really excited about are Spire and Spiffy, the identity, kind of a new take, not necessarily new but new for cloud native take on identity of services and authentication, as well as the open policy agent to provide a single DSL to do all of your policy and authorization-- >> Lauren: That's a lot of work, load and management and identity correct? >> Yeah, yes. >> Authorization and authentication are two of the most important things that happen in our system and we have so many different ways that it happens right now, it can tend to look a little clogy, just from the sense of the fact that we need a little more coordination or standardization around it, I mean we have well written policies that are documented but the way that those actually get enforced are, it's individualized based on the service, you know, if it's a cloud based policy, then it's AWS IAM, if it's Kubernetes based policy it's RBAC using Kubernetes RBAC, so it kind of looks like if we can abstact a lot of that functionality out of the services, the containers, the orchestration tool or the cloud, to making those decisions, that would really, really simplify things for us. >> So, you guys are end users, so are you part of like an end user group that gives feedback directly into the community or how does that work, and do you contribute to that? >> Yes, so we're on the fringes of the contributor community as well, and we're definitely on GitHub on all these projects posting issues and in some cases providing our own PR's or whatever. None of us are within the Kubernetes orb but that's definitely something we all are achieving or aspiring to be is jumping into some of these projects, especially some of the smaller projects that we're using on a daily basis on our build servers like, Portheurs or Notary, some of those things we're actively contributing to those. >> So, you've traded on mastery of product but being active on the project is the key, the balance there. >> Yeah, I mean typically what you find in the fiance industry is when they go for a solution, they lead with their wallet as for what we can purchase, or what we can sponsor, but Ygrene has been, our managers and management have been incredibly empowering this way, they say well what can we give, we lead with our hands. >> Yeah, and this is interesting, if you have a good business model innovation, which you guys have, you can be a completely clean sheet of paper to build it. >> Right >> So, that's the best thing about the cloud. You can really move fast and go from, you know, point A to point B, move the needle. >> Yeah, with it at the same time there's kind of a clean slate, there's even a clean slate in terms of best practices within our industry. Now if we were in mortgage, there's a lot of rules, there's a lot of clear guidelines on how to do security and auditing and things that you need, where in our industry that's all emerging, so we have a chance to also set the pace, set the tone for what security might look like, or what cloud usage might look like within the PACE industry. But at the same time, we're getting increasing government regulations, so we're having to make these decisions around, what are the tools that are going help us achieve maximum customer protection and audit-ability while maintaining our business model without totally-- >> And you're going to need flexibility because you don't know what's going to come next you've got to be ready for anything, and that is what leads to my next question, two points, how do you guys prepare for what's next, what's the main ethos around, technical architecture around being prepared for that, ready state that's coming to you, and then two, what have you learned over the, what's the scar tissue look like, what's the moments of joy and despair going on because you're reiterating, your learning, you're always constantly getting knocked down, standing back up. so this is what innovation is, it can be fun and also grueling at the same time. >> Yeah, so how we deal with what's new beyond our like software process, we have a well-defined process that everything gets churned into. Government is really good about giving us notice about when stuff's going into effect, so we always have target dates that we're going toward. But, in terms of what's next in terms of our software, we have this interesting culture within our organization, everyone wants to improve everything, I think it's called a Kaizen culture, just people are looking at stuff they want to improve it, and so our process allows for anyone to throw something on the backlog. It will get prioritized and put around, but we're allowing all of our engineers to say, hey we want to do this, and you know, putting it into an open forum where, you know, we might not do it but we have the discussion, and we have all the channels to have those discussions and, like most technology companies or technology focused companies, we spend a lot of time talking about technologies, and making those decisions. >> You guys really have the cultural ethos but the people to bate and then commit. >> And that's one of my, you know, recommendations for any company trying to move to cloud native or Kubernetes is, always, you have to have your evangelists, on your team, because you can't expect people who have been doing it one way forever to instantly be onboard. You need some sort of technical evangelist whether that's outside company, it works best, I think, if it's someone you've hired, or someone in your organization who's preaching the gospel of Kubernetes or cloud native. >> Spark Labs, Lauren's company's doing a lot of that work, but that really nails it, I mean, you got to just, it's not a technical issue, per se-- >> Exactly. >> We're hearing that all through the show here. What's on your wish list, what is the holiday's want to bring for you? If you could throw your wish list out there, and you can, a magic wand, crystal ball >> EKS, if Amazon would respond to our request. >> Okay, we just had AG on yesterday, he said it's coming >> It's coming. >> He said, months, >> Did he say months, I thought it was a few months, So maybe >> We'll check the transcripts. >> Alright >> Yeah, it wasn't tomorrow. >> That's alright. >> And that's one of our, that's our scar tissue right? We're doing this ourself, you know, there's this huge control board and we got people, you know, doing the knobs and things and we're relatively small, you know, we're a small engineering organization so we're doing a lot of this ourselves where we can abstract a lot of that work out to a cloud provider that we are already on. >> Well it's going to be good reps for you guys as this thing gets abstracted away, you're going to have a great core competencies in Kubernetes, I think that is a notable thing there. >> Austin: For sure. >> One of the things on my wish list, I was speaking to Jace and Josh Burkus and a lot of the core contributors in Kubernetes at the Contributors Summit, I kind of realized that I would love to see a coordinated cross cutting after, either on part of the CNCF or on part of The Kubernetes Project proper, to have a proactive security, I wouldn't call it a working group, I guess a SIG, a Special Interest Group. It would be, I know that we can deal with zero day issues really, really quickly. For example, the Azure host path mapping issue that was a few months ago, but right now it's kind of on the responsibility of each SIG to implement whatever security looks like to them individually, which is great, it means there are people thinking about security, that makes me sleep better at night. But, seeing some coordination around that and kind of driving towards, okay we have this tool that seems to be changing the game, how are we going to change the game with security? Like is there a way to look at that and even, 'cause authentication and authorization have been around since more than one user used a terminal in the 1960's and 70's. But, even with this new step of admission controllers, where we have more fine grain control around how stuff gets into the cluster. I think it would be great to look at what a coordinated cloud native security effort would look like. >> I think that's great, I mean we've been talking to a lot of vendors here and a lot of folks that have projects, and we bring security every single time and they kind of have an answer, but they really don't. >> They body swerve you, we've got this we've got that. >> Or you're the developer and you have to build it in yourself, so I totally agree with that recommendation I think it's fabulous. >> Yeah, Kubernetes is making so many things simpler at certain levels. Now, if we can focus those efforts at making security simple for people, because they're security experts, they can put their two cents in >> Lauren: Let's build it in and not block it on. >> Build it in and not expect every developer to know. >> Zach: Don't bolt it on, build it in. >> Build it from the beginning, there are all kinds of new ways. The fact there is no perimeter with the cloud brings up, really kind of throws everyone for a loop because you have to go to the chipset down, I mean what Google got, I think is a very interesting approach, they're trying to push forward this multilayer approach from chip to kernel to OS to app, interesting. They've got, managing through all their security, they've got android, I mean spear phishing is a huge problem right now, we're seeing and a lot of enterprises we talk to are like, well, it's like the firewalls and VPN's like that's old school, they need to modernize that so this is going to get them thinking about that. So great, hey guys, thank you for coming on and sharing your feedback-- >> Thank you. >> And your data and your place and how you are architected on AWS and your work with Kubernetes. Congratulations. >> Thank you. >> Cube coverage here in Copenhagen. It's theCUBE's coverage at Kubecon 2018. We'll be back with more after this short break.