[Music] thecube's coverage of red hat summit 2022 thecube has been covering red hat summit for a number of years of course the last two years were virtual coverage now the red hat summit is one of the industry's most premier events and and typically red hat summits are many thousands of people i think the last one i went to was eight or nine thousand people very heavy developer conference this year red hat has taken a different approach it's a hybrid event it's kind of a vip event at the westin in boston with a lot more executives here than we would normally expect versus developers but a huge virtual audience my name is dave vellante i'm here with my co-host paul gillin paul this is a location that you and i have broadcast from many times and um of course 2019 the summer of 2019 ibm acquired red hat and um we of course we did red hat summit that year but now we're seeing a completely new red hat and a new ibm and you wouldn't know ibm owned red hat for what they've been talking about at this conference we just came out of the keynote where uh in the in the hour-long keynote ibm was not mentioned once and only appeared the logo only appeared once on the screen in fact so this is uh very much red hat being red hat not being a subsidiary at ibm and perhaps that's justified given that ibm's track record with acquisitions is that they gradually envelop the acquired company and and it becomes part of the ibm board yeah they blue wash the whole thing right it's ironic because ibm think is going on right across the street arvin krishna is here but no presence here and i think that's by design i mean it reminds me of when you know emc owned vmware you know the vmware team didn't want to publicize that they had an ecosystem of partners that they wanted to cater to and they wanted to treat everybody equally even though perhaps behind the scenes they were forced to do certain things that they might not have necessarily wanted to because they were owned by another company and i think that you know certainly ibm's done a good job of leaving the brand separate but when they talk about the con the conference calls ibm's earnings calls you certainly get a heavy dose of red hat when red hat was acquired by ibm it was just north of three billion dollars in revenue obviously ibm paid 34 billion dollars for the company actually by today's valuations probably a bargain you know despite the market sell-off in the last several months uh but now we've heard public statements from arvind kushner that that red hat is a 5 billion plus revenue company it's a little unclear what's in there of course when you listen to ibm earnings you know consulting is their big business red hat's growing at 21 but when i remember paul when red hat was acquired stu miniman and i did a session and i said this is not about cloud this is about consulting and modernizing applications and sure there's some cloud in there with openshift but from a financial standpoint ibm was able to take red hat and jam it right into its application modernization initiatives so it's hard to tell how much of that 5 billion is actually you know legacy red hat but i guess it doesn't matter anymore it's working ibm mathematics is notoriously opaque they if the business isn't going well it'll tend to be absorbed into another number in the in the earnings report that that does show some growth so we've heard uh certainly ibm talks a lot about red hat on its earnings calls it's very clear that red hat is the growth engine within ibm i'd say it's a bit of the tail wagging the dog right now where red hat really is dictating where ibm goes with its hypercloud strategy which is the foundation not only of its technology portfolio but of its consulting business and so red hat is really in the driver's seat of of hybrid cloud and that's the future for ibm and you see that very much at this conference where uh red hat is putting out its uh series of announcements today about improvements to his hybrid cloud the new release of route 9 red hat enterprise linux 9 improvements to its hybrid cloud portfolio it very much is going its own way with that and i sense that ibm is going to go along with wherever red hat chooses to go yeah i think you're absolutely right if by the way if you go to siliconangle.com paul just published a piece on red hat reds hats their roll out of their parade which of course is as you pointed out led by enterprise linux but to your point about hybrid cloud it is the linchpin of of certainly ibm strategy but many companies hybrid cloud strategies if you think about it openshift in particular it's it's the modern application development environment for kubernetes you can get kubernetes you can buy eks you can get that for free in a lot of places but you have to do dozens and dozens of things and acquire dozens of services to do what openshift does to get the reliability the recoverability the security and that's really red hat's play and they're the the thing about red hat combining with linux their linux heritage they're doing that everywhere it's going to open shift everywhere red hat everywhere whether it's on-prem in aws azure google out to the edge you heard paul cormier today saying he expects that in the next several years hardware is going to become one of the most important you know factors i agree i think we're going to enter a hardware renaissance you've seen the work that we've done on arm i think 2017 was when red hat and arm announced kind of their initial collaboration could have even been before that today we're hearing a lot about intel and nvidia and so affinity with all of these alternative processes i think they did throw in today in the keynote power and so i think i heard that that was the other ibm branding they sort of tucked that in there but the point is red hat runs everywhere so it's fundamental to building out hybrid cloud and that is fundamental to a lot of company strategies and red hat has been all over kubernetes with openshift it's i mean it's a drum beat here uh the openshift strategy is what really makes hybrid cloud possible because kubernetes is what makes it possible to shift workloads seamlessly from platform to platform you make an interesting point about hardware we have seen kind of a renaissance in hardware these last couple of years as these specific chipsets and uh and even full-scale processors have come to market we're seeing several in the ai area right now where startups are developing full-blown chipsets and and systems uh just for ai processing and nvidia of course that's that's really kind of their stock and trade these days so uh a a company that can run across all of those different platforms a platform like like rel which can run all across those different platforms is going to have a leg up on on anybody else and the implications for application development are considerable when you when you think about we talk about a lot about these alternative processes when flash replaced the spinning disk that had a huge impact on how applications are developed developers now didn't have to wait for that that disc to spin even though it's spinning very fast it's mechanical compared to electrons forget it and and the second big piece here is how memory is actually utilized the x86 you know traditional x86 you know memory everything goes through that core processor intel for years grabbed more and more function and you're seeing now that function become dispersed in fact a lot of people think we're moving from a processor-centric world to a connect centric world meaning connecting all these piece parts alternative processors memory controllers you know storage controllers io network interface cards smartnics and things like that where the communication across those resources is now where a lot of the innovation is going you see you're seeing a lot of that and now of course applications can take advantage of that especially now at the edge which is just a whole new frontier the edge certainly is part of that equation when you look at machine learning at training machine learning models the cpu actually does relatively little work most of it is happening in gpus in these parallel processes that are going on and the cpu is kind of acting as a traffic cop and you see that in the edge as well it's the same model at the edge where more of the intelligence is going to be out in discrete devices spread across the network and the cpu is going to be less of a uh you know less of a engine of intelligence at the same time though we've got cpus with we've got 100 core cpus are on the horizon and there are even 200 and 300 core cpus that we may see in the next uh in the next couple of years so cpus aren't standing still they are evolving to become really kind of super traffic cops for all of these other processors out in the network and on the edge so it's a very exciting time to be in hardware because so much innovation is happening really at the microprocessor level well we saw this you and i lived through the pc era and we saw a whole raft of applications come about as a result of the microprocessor the shift of the microprocessor-based economy we're going to see so we are seeing something similar with mobile and the edge you know just think about some of the numbers if you think about the traditional moore's law doubling a number of transistors every let's call it two years 18 to 24 months pat gelsinger at intel promises that intel is on that pace still but if you look at the apple m1 ultra they increased the transistor density 6x in the last 15 months okay so where is this another data point is the historical moore's law curve is 40 that's moderating to somewhere down you know down in the low 30s if you look at the apple a series i mean that thing is on average increasing performance at 110 a year when you add up into the combinatorial factors of the cpu the neural processing unit the gpu all the accelerators so we are seeing a new era the thing i i i wanted to bring up paul is you mentioned ai much of the ai work that's done today is modeling that's done in the cloud and when we talk about edge we think that the future of ai is ai inferencing in real time at the edge so you may not even be persisting that data but you're going to create a lot of data you're going to be operating on that data in streams and it's going to require a whole new new architectural thinking of hardware very low cost very low power very high performance to drive all that intelligence at the edge and a lot of that data is going to stay at the edge and and that's we're going to talk about some of that today with some of the ev innovations and the vehicle innovations and the intelligence in these vehicles yeah and in talking in its edge strategy which it outlined today and the announcements that are made today red hat very much uh playing to the importance of being able to run red hat enterprise linux at the edge the idea is you do these big machine learning models centrally and then you you take the you take what results from that and you move it out to smaller processors it's the only way we can cope with it with the explosion of data that will be uh that these sensors and other devices will be generating so some of the themes we're hearing in the uh announcements today that you wrote about paul obviously rel9 is huge uh red hat enterprise linux version nine uh new capabilities a lot of edge a lot of security uh new cross portfolio capabilities for the edge security in the software supply chain that's a big conversation especially post solar winds managed ansible when you think about red hat you really i think anyway about three things rel which is such as linux it powers the internet powers everything uh you think of openshift which is application development you think about ansible which is automation so itops so that's one of the announcements ansible on azure and then a lot of hybrid cloud talk and you're gonna hear a lot of talk this week about red hat's cloud services portfolio packaging red hat as services as managed services that's you know a much more popular delivery mechanism with clients because they're trying to make it easy and this is complicated stuff and it gets more complicated the more features they add and the more the more components of the red hat portfolio are are available it's it's gonna be complex to build these hybrid clouds so like many of these so thecube started doing physical events last summer by the way and so this is this is new to a lot of people uh they're here for the first time people are really excited we've definitely noticed a trend people are excited to be back together paul cormier talked about that he talked about the new normal you can define the new normal any way you want so paul cormier gave the uh the the intro keynote bidani interviewed amex stephanie cheris interviewed accenture both those firms are coming out stephanie's coming on with the in accenture as well matt hicks talked about product innovation i loved his reference to ada lovelace that was very cool he talked about uh serena uh ramyanajan a famous mathematician who nobody knew about when he was just a kid these were ignored individuals in the 1800s for years and years and years in the case of ada lovelace for a century even he asked the question what if we had discovered them earlier and acted on them and been able to iterate on them earlier and his point tied that to open source very brilliantly i thought and um keynotes which i appreciate are much shorter much shorter intimate they did a keynote in the round this time uh which i haven't seen before there's maybe a thousand people in there so a much smaller group much more intimate setting not a lot of back and forth but uh but there is there is a feeling of a more personal feel to this event than i've seen it past red hat summits yeah and i think that's a trend that we're going to see more of where the live audience is kind of the on the ground it's going to the vip audience but still catering to the virtual audience you don't want to lose them so that's why the keynotes are a lot tighter okay paul thank you for setting up red hat summit 2022 you're watching the cube's coverage we'll be right back wall-to-wall coverage for two days right after this short break [Music] you

(upbeat music) >> From around the globe, it's the CUBE with digital coverage of Postgres Vision 2021. Brought to you by EDB. >> Hello everyone, this is Dave Vellante for the CUBE. We're covering Postgres Vision 2021, the Virtual CUBE edition. Welcome to our conversation with the CEO, Ed Boyajian, the CEO of Enterprise DB. And we're going to talk about what's happening in open source and database and the future of tech. Ed, Welcome. >> Hi Dave, good to be here. >> Hey, several years ago at Postgres Vision event you put forth the premise that the industry was approaching a threshold moment, and digital transformation was the linchpin of that shift. Now, Ed, while you were correct, and I have no doubt the audience agreed, most people went back to their offices after that event and they returned to their hyper-focus of their day-to-day jobs. Yeah, maybe a few accelerated their digital initiatives but generally, pre COVID, we moved at a pretty incremental pace and then the big bang hit. And if you weren't digital business, you were out of business. So, that single event created the most rapid change that we've ever seen in the tech industry by far, nothing really compares. So, the question is, why is Postgres specifically and EDB generally the right fit for this new world? >> Yeah, I think, look a couple of things are happening Dave. You know, right along the bigger picture of digital transformation, we are seeing the database market in transformation. And, and I think the things that are driving that shift are the things that are resulting the success of Postgres and the success of EDB. I think first and foremost, we're seeing a dramatic re-platforming. And just like we saw in the world of Linux where I was at, Red Hat during that shift where people were moving from Unix-based systems to X86 systems, we're seeing that similar re-platforming happening whether that's from traditional infrastructures to cloud-based infrastructures or container-based infrastructures, it's a great opportunity for databases to be changed out. Postgres wins in that context because it's so easily deployed anywhere. I think the second thing that's changing is we're seeing a broad expansion of developers across the enterprise. They don't just live in IT anymore. And I think as developers take on more power and control, they're just defining the agenda. And it's another place where Postgres shines. It's been a priority of EDB's to make Postgres easier and that's coming to life. And I think the last stack overflow developer survey suggested that, I think they survey 65,000 developers, the second most loved and the second most used database by developers is Postgres. And so I think there again, Postgres shines in a moment of change. And then I think the third is kind of obvious. It's always an elephant in the room, no pun intended, but it's this relentless nagging burden of the expenses of the incumbent proprietary databases and the need. And we especially saw this in COVID. To start to change that, more dramatically change that economic equation, here again, Postgres shines. >> You know, I want to ask you, I'm going to jump ahead to the future for a second, because you're talking about the re-platforming and with your Red Hat shops I kind of want to pick your brain on this because you're right. You saw that with Red Hat and you're kind of seeing it again when you think about open shift and where it's going, my question is related to re-platforming around new types of workloads, new processing models at the edge, I mean, you've seen an explosion of processing power GPU's, NPUs, accelerators, DSPs and it appears that there this is happening at a very low cost. I'm inferring that you're saying Postgres can take advantage of that trend as well, that that broader re-platforming trend to the edge, is that correct? >> It is. And, and I think, you know this is the this has been one of the I think the most interesting things with Postgres. Now I've been here almost 13 years. So if you put that in some perspective, I've watched and participated in leading transformation in the category. You know, we've been squarely focused on Postgres so we've got 300 engineers who worry about making Postgres better. And as you look across that landscape a time, not only as Postgres gotten more performance and more scalable, it's also proven to be the right database choice in the world of not just legacy migrations but new application development. And I think that stack overflow developer survey is a good indicator of how developers feel about Postgres, but, you know over that timeframe, I think if you went back to 2008 when I joined EDB, Postgres was was considered a really good general purpose database. And today I think Postgres is a great general purpose database. General purpose isn't sexy in the market, broadly speaking but Postgres capabilities across workloads in every area is really robust. And let me just spend a second on it. We look at our customer base as deploying and what we think of as systems of record, which are the traditional ERP type apps, you know where there's a single source of truth. You might think of ERP apps there. We look at our customers deploying and systems of engagement, and those are apps that you might think of in the context of social media style apps or websites that are backed by a database. And the third area is systems of analytics where you would typically think of data warehouse style applications, interestingly, Postgres performs well. And our customers report using us across that whole landscape of application areas. And I think that is one of Postgres' hidden superpowers, is that ability to reach into each area of requirement on the workload side. >> Yeah. And as I was alluding to before. That, that itself is evolving as you now inject AI into the equation AI inferencing. And it's just a very exciting times ahead. There's no, there's no database, you know 20 years ago it was kind of boring. Now it's just exploding. I want to come back to that, the notion of of Postgres that maybe talk about other database models. I mean, you've mentioned that you've evolved from this, you know, system of record. You can take a system engagement on structured data, et cetera, Jason it's-. So how should we think about Postgres in relation to other databases and specifically other business models of companies that provide database services? Why is Postgres attractive? Where is it winning? >> Yeah, I think a couple of places. So, I mean, for first and foremost, Postgres, you know at its core, Postgres is a SQL relational database a trend in asset compliance, equal relational database. And that is inherently a strength of Postgres but it's also a multi-model database. Which means we handle a lot of other, you know database requirements, whether that's geospatial or, or JSON for documents or, or time series, things like that. And, so Postgres extensibility is one of its inherent strengths. And that's kind of been built in from the beginning of Postgres. So not surprisingly people use Postgres across a number of workloads because at the end of the day, there's still value in having a database that's able to do more. There are a lot of important specialty databases and I think they will remain important specialty databases, but Postgres thrives in its ability to crossover in that way. And I think that is, you know one of the different key differentiators in in how we've seen the market and the business develop. And, and that's the breadth of of workloads that Postgres succeeds in. But, but our growth if you kind of ventured it across vectors we see growth happening, you know, in a few dimensions. First, we see growth happening in new applications. About half of our customers have come to us today for new, new Postgres users are deploying us on new applications. The others are our second area migrating away from some existing legacy incumbent. Often Oracle, not always. The third area of growth we see is in cloud where we're Postgres is deployed very prolifically both in the traditional cloud platforms like EC2, but then again also in the database as a service environment and then the fourth area growth we're seeing now is around container deployment, Kubernetes deployment. >> Well, you mean Oracle's prominent because it's just, it's, it's, it's a big install base and it's expensive and people, you know they got to look at that. I mean, It's funny. I do a lot of TCO work and mostly, you know usually TCO is about labor costs when it comes to Oracle it's about license costs and maintenance costs. And so to the extent that you can reduce that at least for a portion of your state, you're going to, you're going to drop right to the bottom line. But, but, I want to ask you about the kind of that spectrum that you think about the prevailing models for database you've got on the one hand, you've got the right tool for the right job approach. You know, it might be 10 or 12 data stores in the cloud. On the other hand, you've got kind of a converged approach. You know, Oracle is going that direction, clearly Postgres, with its open source innovation, is going that direction. And it seems to me yet that at scale that's a more, the latter is the more cost-effective model. How do you think about that? >> Well, you know, I think at the end of the day you kind of have to look at it. I mean, the, the business side of my brain looks at that as an addressable market question, right? And you heard me talk about three broad categories of workloads and, you know, people define workloads in different buckets, but that's how we do it. But if you look at just a system of record in the system of engagement market I think that's what would be traditionally viewed as the database market. And there that's, you know, let's just say for the sake of arguments, a 45 to $50 billion market. The third, the systems of analysis that market's an $18 billion market. And, and, you know, as we talk about that so all in it's still between 60 and $70 billion market. And I think what happens, there's so much heat and light poured on the valuation multiples of some of the specialty players that the market gets confused. But the reality is our customers don't get confused. I mean, if you look at those specialty players take that $48 billion market. I mean, add up Mongo, Reds, Cockroach, Neo, all of those. I mean, hugely valued companies all unicorn companies, but combined they add up to a billion bucks. Don't get me wrong, that's important revenue and meaningful in the workloads they support, but it's not, it doesn't define the full transformation of this category. Look at the systems of analysis again, another great, great market example. I mean, if you add up the consolidation of the Hadoop vendors, add in there, snowflake you're still talking to, you know $1.5 billion in revenue in an $18 billion market. So while those are all important technologies the question is in this transformation move did the database market fully transformed yet. And my view is, no, it didn't, we're in the first maybe second inning of a $65 billion transformation. And I think this is where Postgres will ultimately shine. I think this is how Postgres wins, because at the end of the day, the, the nature of the workloads fits with Postgres and the future tech that we're building in Postgres will serve that broader set of needs. I think more effectively. >> Well, and I love these tam expansion discussions because I think you're right on. And I think it comes back to the data and we all we all talk about the data growth, the data exposure and we see the IDC numbers. Well, you ain't seen nothing yet. And so at data by its very nature is distributed. That's why I get so excited about these new platform models. And I want to tie it back to developers and open source because to me, that is the linchpin of innovation in the next decade. It has been, I would even say for the last decade we've seen it, but it's gaining momentum. So, so in thinking about innovation and specifically Postgres in open source, you know, what can you share with us in terms of how we should think about your advantage and again where people are glomming, leaning in to that advantage? >> Yeah. So, I mean, I think, I think you bring up a really important topic for us as a company, Postgres, we think is an incredibly powerful community and, and when you step away from it, again, I, now you remember, I told you, I'd been at, I was at Red Hat before now here at EDB. And there's a common thread that runs through those two experiences. In, in both experiences the companies are attached and prominent alongside a strong, independent open-source community. And I think the notion of an independent community is really important to understand around Postgres. There are hundreds and thousands of people contributing to Postgres. Now EDB plays a big role in that about, you know approaching a third of the contributions in the last release, released 13 of Postgres came from EDB. Now you might look at that and say, gee, that sounds like a lot, but if you step away from it, you know at about 30% of those contributions, most of the contributions come from a universe around EDB and that's inherently healthy for the community's ability to innovate and accelerate. And I think that while we play a strong role there you can imagine that having, and there are other great companies that are contributing to Postgres. I think having those companies participating and contributing gets the best the best ideas to the front in innovation. So I think the inherent nature Postgres community makes it strong and healthy. I mean, and then contrast that to some of the other prominent high value open-source companies. Companies and the communities are intimately intertwined. They're one in the same. They're actually not independent open source communities. And I think that they're therein lies one of, one of the inherent weaknesses in those. But, Postgres thrives because, you know we bring all those ideas from EDB. We bring a commercial contingent with us and all the things we hope, we emphasize and focus on, in growth and Postgres. Whether that's in the areas of scalability, manageability, all hot topics, of course security, all of those areas. And then, you know, performance as always. All of those areas are informed to us by enterprise customers deploying Postgres at scale. And I think that's the heart of what makes a successful independent project. >> Common editorial powers of, of that ecosystem. They, they they're they're multiplicative as opposed to the, the resources of one. I want to talk about Postgres Vision 2021 sort of set up that a little bit. The theme this year is 'The Future is You'. What do you mean by that? >> So, if you think about what we just said, posts, the category is in Tran-, the database categories in transformation. And we know that many of our people are interested in Postgres are early in their journey. They're early in their experience. And so we want to focus this year's Postgres Vision on them. That we understand, as a company who's been committed to Postgres, as long as we have. And with the understanding we have of the technology and best practices, we want to share that view, those insights with, with those who are coming to Postgres. Some for the first time, some who are experienced. >> Postgres Vision 21 is June 22nd and 23rd go to enterprisedb.com and register. The CUBE's going to be there. We hope you will be too. Ed, thanks for coming to the CUBE and previewing the event. >> Thanks, Dave. >> And thank you. We'll see you at Vision 21. (upbeat music)

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 as we watch an historic election unfold before our eyes we look back at the early days of the millennium with the memorable presidential race of 2000 that decade of course was defined by 911 which permanently reshaped our thinking and we exited that decade at the tail end of a massive financial crisis only to enter the 2010s with the hope and the momentum of fiscal stimulus a flat globe job growth and very importantly the ascendancy of the cloud cloud computing unquestionably powered the innovation engine over the last 10 years and the pandemic marks a new era where adoption of cloud data and ai have been accelerated by at least two to three years and that's what's going to shape the future of the technology industry and frankly all businesses and organizations hello everyone and welcome to this week's episode of thecube insights powered by etr in this breaking analysis we're going to update you on our latest cloud market share and dig in to some fresh october survey data from our partners over at etr let me start just with a brief summary of the latest action that's going on in cloud now quite interestingly each of the big three cloud players they showed nearly identical year-on-year growth rates in q3 as they did in q2 now we're going to dig into that in a moment but our data suggests that these three companies combined will account for more than 75 billion dollars in infrastructure as a service and platform as a service revenue in 2020 and they're potentially on track to hit 100 billion in 2021. customer survey data indicates that cio's top two infrastructure priorities remain security and cloud migration now that said as we previously reported the cloud it's not immune to the pandemic the remote worker pivot well it's a positive for cloud hasn't completely eradicated certain headwinds now what i mean here is that because the cloud vendors are now so large they're somewhat exposed to the softness in the overall i.t spending climate and also industries that have been hit hardest by the pandemic now would the cloud growth have been better if the pandemic didn't hit we'll never know for sure but our data suggests no covet has definitely been a benefactor to cloud in our view cloud will remain at the center of technological innovation for the foreseeable future the economics of cloud are becoming so compelling that we think the power of the big cloud companies will only increase this decade now importantly we're talking about the costs of running hyper-distributed systems we're not commenting here on what they charge customers that's a different story we believe the cost structure for the hyperscalers is superior to alternative approaches and we believe this advantage will only accelerate over the next several years we also believe that competition is going to continue to drive competitive pricing and innovation all right let's look at our latest market share numbers for the big three this chart shows our estimates of aws azure and the google cloud platform now viewers of this program know that these are is and pass figures and you also know that aws is the only company that provides clean numbers on that sector whereas azure and gcp are estimates that we make based on tidbits of guidance that the companies give us and survey data that we capture and other modeling that we do now as we've said we'll end this year it's about 75 billion in revenue or maybe even a little bit more note that for these three note that we've we've slightly restated some of our earlier estimates for azure to reconcile some differences that we had between constant currency and actual growth we try to keep things in constant currency where possible sorry for that but sometimes that happens azure according to our estimates as we reported last week is now 18 of microsoft's overall revenue number we had it at 19 that last week but when i dug in we made some adjustments so we toned it down a bit aws represents a much smaller percentage of course of amazon's revenues at about 12 percent but it represents 56 percent of amazon's profits gcp on the other hand accounts for less than five percent of google's overall revenue which as we've stated a few weeks ago needs more attention from google but look at the growth rates for these three platforms and the respective size of their is and pass businesses hear all this talk about repatriation i.e that what i mean by that is people go to the cloud but they're unhappy or the bill is too high it's too expensive so then they come back on prem well you just don't see that in the numbers so you gotta be careful when vendor a vendor tries to sell you on that trend i don't buy it except for selective situations now let's bring in some of the etr data and compare the spending momentum for each of the big three you've seen these wheel graphs before they show the breakdown of net score for aws microsoft and google now one note these figures represent these three companies overall within the etr technology taxonomy so for example they don't include amazon's retail business of course but they do include for example microsoft's entire tech portfolio not just the cloud the green portion of the wheel represents increases in spending via new adoptions and increased spending whereas the red sections show decreases via lower spending and defections net score which i've highlighted in the orange is calculated by subtracting the two reds from the two true greens in other words adoptions and increase minus decrease and replacements the takeaway here is these are all pretty strong with aws leading the pack microsoft is exceptionally strong as we pointed out last last week because they're so huge and they still have net scores comparable to aws which is a pure play gcp is a laggard and is showing softness in the data despite a sanguine outlook that we had back in 2019 based on survey data i don't know perhaps google's smaller presence muted their customers ability to take advantage of the platform the thinking there is the customers maybe needed to pivot to the cloud so quickly and aws and azure were the incumbents and that was maybe the most expedient path hence the higher increases in the spend more category but you do see gcp um they had 13 new adoptions which is pretty good so we'll keep looking at that regardless again these are not pure play cloud comparisons but they give a good indication of spending momentum i'd also note that all three show very low defections well each is showing solid increases in new adoptions especially google as i mentioned so that's kind of interesting to see but again google much much smaller you would expect that now i want to turn our attention to one of the hottest areas in cloud which is serverless and this is a pure play comparison so serverless let me start there it's a strange term because it's not really accurate but it's stuck serverless computing is a model where the cloud platform dynamically delivers services as the application requires so so you don't have to configure the compute and the containers for example rather when an application needs resources it goes and gets them and you only pay for when the services are actually invoked and in use so it's really good for workloads that spin up and spin down very frequently it kind of reminds me in concept anyway of the component tree that we saw in the days of soa if you remember that services oriented architecture but now this is cloud it's cloud native it's a whole new world and it's increasingly a popular model and as we'll show in a moment there's a lot of spending momentum in this area but before we do that i want to share some comments made by andy jassy a while back about serverless take a listen it's a good question and you know i really the comment i made was really about um directionally what amazon would do you know in this in the very earliest days of aws jeff used to say a lot if i were starting amazon today i'd have built it on top of aws we didn't have all the capability and all the functionality at that very moment but he knew what was coming and he saw what people were still able to accomplish even with where the services were at that point i think the same thing is true here with lambda which is i think if amazon were starting today it's a given they would build it on the cloud and i think with a lot of the applications that comprise amazon's consumer business we would build those on on our serverless capabilities now now lambda of course jesse referring to lambda that's amazon's serverless offering and if you think about amazon's retail business and take for example the frequent spin up and spin down of resources for something like black monday serverless would be a much more cost effective approach same for a managed data warehouse service for example where you know you don't want to pay for the compute if it's idle the app just calls for the compute when it's needed so it's a very popular model and it's got increased momentum today and you see that in this slide it shows the net score breakdown for serverless for azure aws is lambda which is again is their serverless offering and google cloud functions again you're shipping functions to the application that's why it's called functions look at the net scores azure functions nearly 70 aws at 65 google again lagging and that's a bit of a concern because this is a really really hot space all right let's move on and look at the competitive landscape as we like to do often and update you on that this xy graph is one of our favorites and it shows net score or spending momentum on the vertical axis and market share on the horizontal market share is a measure of pervasiveness in the data set in the upper right you also see a table that ranks each vendor my net score and it includes the shared n in other words the number of mentions in this sector for each vendor now you can you can see up top in the middle i've selected on the cloud computing category so this represents only the cloud businesses for each of these players there's a little bit of nuance here and that we've selected on microsoft azure there's a category in the etr taxonomy for that and we're comparing that with aws overall so there's there are things in the aws overall number that fit into the other parts of the taxonomy like maybe ai collaboration etc whereas azures and gcp are just the cloud segments so i i know it's a bit strange because aws is all cloud but don't get caught up in the taxonomical nuance the point is it's good to be azure in aws it's shown there when you look at the upper right of the chart here they stand out and they stand alone in cloud leadership google cloud is they have nice elevated levels but they're much much smaller they don't have the presence in the market now look at that hybrid cloud zone emerging we've talked about this sometimes in the past and and i want to call it vmware cloud on aws red hat open shift and vmware cloud itself like vmware cloud foundation and their other cloud services all of these appear to be gaining traction and you can see in the number of occurrences in the upper right that shared end that i talked about we're starting to see real numbers that are meaningful in this space vmware cloud on aws for example has a net score of 53 percent with 116 accounts within that total respondent sample that you see there in the middle left of 1438 that's how many cios and technology buyers responded to the etr survey in october you look at open shift at 45 net score and that's with 82 accounts now openshift is in beta with what looked to be some really strong offerings on aws and you can see for context i've added dell emc's cloud offerings hpe's cloud offerings and the oracle cloud and ibm cloud and also rackspace dell actually pretty strong with a net score of 20 and 185 shared accounts much much higher than dell overall which is kind of in the red zone oracle ibm you see those rackspace you know organizing not killing it rackspace is kind of in the big negative so that's a concern but anyway we'd like for these guys we'd like to see the data match the marketing rhetoric for the the guys that are in the red and look alibaba is starting to to show up in the server there's only 26 shared ends but we thought we'd we'd put it in there those three key points again aws and microsoft keep on trucking google needs to do better hybrid is becoming real and that bodes well for multi-cloud and the legacy on-prem guys they got a lot of work to do they're under a lot of pressure the pivot to cloud has not been easy for them uh and it's still a case where they're i've talked about this a lot they're they're declines in their on-premises offerings they're not being offset by the new stuff the cloud momentum all right i want to close out by sharing some of the conversations and thoughts that we've had in the community around sas and its impact on cloud we really have been focusing on ias and pass of the sas layer obviously up the stack so let me first share that there's a lot of talk around and has been for years about aws they're slowing growth rates and whether or not they'll have to enter the sas market to expand their total available market and i've said consistently while i never say never about aws i don't think so at least not yet this chart plots the big three cloud players note aws is a bigger piece of this pie now that i've turned off the cloud computing filter and i know more nuances but the data wonks will will find you know see this and they'll ask me about it this is all of aws portfolio and again it's only the microsoft azure portfolio so you see it aws now overtakes azure on the x-axis i.e market share now we've plotted some of the major sas vendors and you can see servicenow and salesforce both very large and they have really strong spending momentum and servicenow's you know pushing 100 billion dollars in market value they've surpassed workday quite some time ago workday's got less presence but they've got really really solid net score and i got to say i'm impressed with sap despite some of the earnings challenges that they've been having they're right up there with splunk and tableau splunk has softened in recent surveys and i've i've also plotted in there netsuite and oracle fusion which are just okay and that is i think for now anyway aws is going to position as the best place and the most friendly and highest quality cloud in which to run your sas for example workday runs on aws aws is salesforce's preferred infrastructure platform so my premise here is just like retail companies might want not want to run on aws a number of sas companies that compete with microsoft they might think twice about running on azure so aws would be better off for now trying to attract those sas players and drive their services and sticking to infrastructure and the pass layer snowflake is actually kind of interesting and i've added them for context because their netscore is always kind of a bellwether it's really off the charts and they're an isv running on the cloud they're different from some of the other sas players and the snowflake is a database okay and most of snowflake's business runs on aws and aws competes with snowflake with redshift but aws has the best cloud and drives a lot of business for snowflake and vice versa so it's kind of interesting snow snowflake to redshift and a much smaller example is kind of like netflix to amazon prime video to compete they both thrive so i think aws is going to continue to grow by attracting sas players as the preferred platform and they'll also attract developers and try to disrupt sas players like servicenow which runs on its own cloud i remember years ago david floyer and i said that servicenow was it was awesome but at some point its infrastructure cost structure its infrastructure cost structure is going to be less competitive than those companies that are running on hyperscale clouds certainly the hyperscale clouds themselves and servicenow they have this multi-instance architecture which just can't easily port over to the cloud but it can charge a lot which it does now at some point some sharp developers are going to look at all this and say whoa see that service now i can build this for less and they'll attack servicenow and their seat base license model maybe with the consumption pricing model and a platform that's perhaps or a set of services that are perhaps less expensive you're seeing this to a you know a certain degree with like elastic inside the application performance management space so there's some some things to watch there but there are those who firmly believe that aws will and must enter the sas space directly we talked last week about how beneficial microsoft's application business is for azure and what a flywheel that is but for me i think we're not there yet let's give it some time i think maybe four to five years before aws may even start to think about filling some of the space up the stack now maybe they'll find some unique opportunities to do that for instance at the edge but i think that's way off okay so bottom line it's good to be in tech these days it's even better to be in the cloud and it's best if you're aws and microsoft and i don't see that changing for a while now remember these episodes are all available as podcasts wherever you listen i publish each week on wikibon.com and siliconangle.com you can get in touch with me through email it's david at siliconangle.com feel free to dm me on twitter at d vallante i post on linkedin love your comments there thank you and don't forget to check out etr plus for all the survey action thanks for watching this episode of thecube insights powered by etr this is dave vellante stay safe stay sane and we'll see you next time 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>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> As we reported last week, we believe that in the next decade, there will be changes in public policy that are going to restrict the way in which big internet companies are able to appropriate user data. Big tech came under fire again this week with the CEOs of Facebook, Twitter, and Google going toe to toe with several U.S. senators. Microsoft CEO Satya Nadella, however, was not one of those CEOs in the firing line. Microsoft doesn't heavily rely on ad revenues, rather, the company's momentum is steadily building around Azure, which by my estimates is now roughly 19% of Microsoft's overall revenues. It's surpassed, maybe nearly got to $7 billion for the first time on a quarterly basis. I'll come back to you on that. Hello everyone, and welcome to this week's Wikibon CUBE insights powered by ETR. In this Breaking Analysis, we'll respond to the many requests we've had to dig into the business of Microsoft a little bit deeper and provide a snapshot of how the company is faring in the ETR dataset. Let's take a quick look at Microsoft's financials, and the scope of Microsoft's business is actually mind-boggling. The company has roughly $150 billion in revenue, and it grew its top line 12% last quarter. It has more than $136 billion in cash on the balance sheet. Microsoft generates over $60 billion annually in operating cashflow. And last quarter alone threw off more than 19 billion in operating cash. Its gross margins are expanding across virtually all of its major business lines. So let's look at those business sectors. Microsoft, it doesn't suffer from the nagging problems that we've talked about with a lot of older tech companies. Companies like IBM and Dell and Cisco and Oracle and SAP, they struggle with growth sometimes because their growth businesses are not yet large enough to offset the declines in their traditional on-premises business segments. Now at the highest level, Microsoft breaks its business into three broad categories, and they're all growing quite nicely. Let me add some color here. Let's start with the productivity and business process line of business. LinkedIn, which is growing at 16%, is in this category as is Office. This business is shifting from one of on-prem licenses, which are really headwinds right now from Microsoft, to the cloud, in the form of SaaS with Office 365, which is growing at a 20% clip within its commercial market base. Even the consumer side of O365 is growing in the double digits. Dynamics is Microsoft's ERP and CRM business, and that falls into this slice of the pie, that's growing at 18%. And then the newer Dynamics 365, that's growing at 37%. So you can see, Microsoft is easily able to show growth despite the transitions from its legacy business. Intelligent cloud is the next segment. It's kind of the kitchen sink category, meaning there's stuff in there that includes a bit of cloud washing in my opinion, but Microsoft is not nearly as egregious as IBM with the liberties that it takes around its cloud categorization. For Microsoft it's a $13 billion quarterly business. And it's growing at 19%, as we show in the pie chart. Azure is an increasingly large portion of this segment. Azure is the most direct comparison with AWS. And I have said in the past quarter, I'd say it's around 50% of the intelligent cloud, and that it's approaching by my estimates around $7 billion a quarter. Azure grew at 47% annually this past quarter, the same growth rate as last quarter. Ironically, both AWS and Google Cloud grew at the same year over year rate this quarter as they did last quarter. AWS is 29% GCP in the high 50s by at my estimates. AWS revenue was 11.6 billion this past quarter, and I have GCP still well under 2 billion. We'll be updating our cloud numbers and digging deeper next week into this topic. So consider these estimates preliminary for Azure and GCP, which the respective companies don't break out for as Amazon, as you know, breaks out AWS explicitly. Now, back to Microsoft's intelligent cloud business. It includes on-prem server software, which is a managed decline business from Microsoft. They also include enterprise services in this category. So as you can see, it's not a clean cloud number for comparison purposes. Now finally, the third big slice of the pie is more personal computing. I know, it's kind of a dorky name, but nonetheless it's nearly a $12 billion business that's growing at 6% annually. The Windows OEM business is in here, as is Windows 10 and some security offerings. Surface is also in here as well and it's growing in the mid-thirties. Search revenue is in this category as well. It's declining per my earlier statements that it's not a main piece of Microsoft's business. Now, one of the most interesting areas of this sector is gaming. Microsoft's gaming business is growing at 21% and they just acquired ZeniMax Media for seven and a half billion dollars. Let me land on gaming for a minute. The gaming experts at theCUBE are really excited about Microsoft's XBox content services, which grew at about 30% this past quarter. Game Pass is essentially Microsoft's Netflix, or you can think of it as maybe like a Spotify model. You can get in for as low as $5 a month. I think you can pay as much as $15 a month and get access to a huge catalog of games that you can download. In November of last year, Microsoft launched its xCloud beta service, which allows you to download to a PC or a game box. Now eventually with 5G, the box goes away. All you'll need is a screen and you know, controller with the joysticks, no download. In fact, this is how it works today for Android. Now, interestingly, Apple is blocking Microsoft and some others like Google's Stadia, saying that they don't allow streaming game apps like Microsoft's xCloud service, because they don't follow the company's guidelines. What Apple's not telling you is that its adjacent offering, Apple Arcade, is considered subpar by hardcore gamers. And while Apple allows the streaming of movies and music from any service on the iPhone, it's decided not to allow streaming games. Now, the last thing I want to stress about Microsoft is its leverage point around developers. Developers is a big one here, we all remember the sweaty Steve Ballmer running around the stage like a mad man, screaming, "Developers, developers, developers!" Well, despite his obsession with Windows, he sure got that one right. The GitHub acquisition was Microsoft's way of buying more developer love. It does concentrate power with a tech giant, but you know what, if it wasn't Microsoft that bought GitHub, it would have been Facebook or Amazon or Google or one of the other tech giants. Now, despite some angst in the developer community over this, GitHub, it really is a linchpin for Microsoft to more tightly integrate GitHub with its pretty vast developer tool set. All right. Let's look deeper into the Microsoft data and focus on the enterprise. We'll bring in the ETR as we always do. We said last week that Google needed to look to the cloud and edge and get its head out of its ads. Well, Microsoft recovered from its Windows myopia after Satya Nadella took over in 2014, and by all accounts from the ETR survey data, Microsoft is killing it across the board. Let me start by putting Microsoft in context with some of the most prominent companies that both compete with, and sometimes partner with Microsoft. So this xy graph, it's one of our favorites. I show it all the time and it shows net score on the vertical axis, which is a measure of spending momentum from ETR, and the horizontal axis shows what we call market share, which is a measure of pervasiveness in the survey. Now in the upper right hand table, you can see the data for each of the companies. There's an ETR survey taken in October and it had more than 1400 completes. Several points stand out here. Microsoft is by far the most pervasive in the dataset, and yet its net score or spending velocity is right there with AWS, ServiceNow, Salesforce, and Workday. Only Snowflake, which I put in there for context, because of its consistently strong net scores, shows a meaningfully higher net score, of course from a much smaller base. Now what makes this so impressive is it represents a pan-Microsoft view across its entire portfolio. And you can see where companies like IBM and Oracle struggle from a momentum standpoint compared to Microsoft, which is a much, much larger company. It's that problem that I referred to earlier regarding the smaller size of their respective growth businesses. Also called Cisco and SAP, which despite some earnings challenges lately, are able to maintain net scores that while not in the green, they're not in the red, either. Green essentially means your overall install base is expanding. Red indicates contraction. Now let's look at the spending patterns for Microsoft customers. This chart shows the granularity of ETR's net score for Microsoft. The green represents increased spend and the red decreased spend. What's impressive is that Microsoft's red zone, I mean it's essentially negligible at 6%, when you add two reds up, the pink and the bright red. Their customers, they're all spending more, or the same, and very few are leaving the platform. Now I made the case last week that Google should double or triple its efforts and focus on cloud and the edge. Microsoft has already made that transition in its business and is the, that's the premise really of my discussion today. Specifically, Microsoft Azure is powering the company across all of its products and services. It's giving Microsoft tremendous operating leverage and steadily improving marginal economics. You can see that in the gross margin lines this quarter, across all of its businesses. And here's a graphic showing its position within cloud computing in terms of net score. Microsoft Azure functions, which is the first bar on this chart, and Azure overall, which is the third set of bars, shows momentum that's as strong as any cloud category, including AWS Lambda, which as we've talked about many times is killing it. Now five over from the left, count them over, one, two, three, four, five, you can see AWS overall. So that's a really important reference point. And while its levels are still elevated, Azure overall, which again is number three from the left, has meaningfully more momentum with 65% net score versus 52% for AWS overall. Now reasonable people can debate the quality of these respective clouds and you could argue over feature sets, who's got the most features, who's got the most regions, which regions are most reliable, who's got the most data centers and all that stuff, but it's really hard to argue against Microsoft's "Good enough" strategy. It's working in the cloud, and it has been working for the company for decades. Now another Microsoft strategy has been to be a late comer to a category and then bundle multiple capabilities into one suite. We saw this at first, really in the late 1980s with Office, and it's continued in a number of areas. The latest example, Microsoft Teams. Teams combines features like meetings, phone, chat, collaboration, as well as business process workflows that leverage tools like SharePoint and PowerPoint. I mean, it's a killer strategy, and you can see the results in this chart. I mean, it's essentially competing with Zoom, it's competing with Slack and all the sort of productivity plays there in that space. And this graphic compares net scores from the year ago October survey for reference, the July survey from this year, and the most recent October survey, as I said, 1400 respondents. Look at the lead that Teams has relative to the competition. There's a story across Microsoft's portfolio. Look at Microsoft's products in the ETR taxonomy. Video conferencing with Teams, productivity apps, RPA, cloud, cloud functions, machine learning, artificial intelligence, containers, security, end point, analytics, mobile, even database. The only signs of softness are really seen in the company's legacy businesses like Skype or on-prem licenses business, which I said were a headwind for them. And while PCs and tablets are weaker, that's what you'd expect from this mature industry relative to some of these other categories. Now, again, the premise here today is that by pivoting to the cloud and going all in competing with infrastructure as a service, Microsoft has created a platform for innovation for its business, and its developer chops are really credible, so it's evolving its install base very successfully to Azure. It's got a very solid hybrid and multi-cloud strategy and story with Microsoft Arc, which eventually it can take to the edge. You know, we think its edge strategy needs some work, but nonetheless, the company is really, really well positioned. Microsoft has a huge partner ecosystem, heck, it even partners with Oracle and database, as well as using Azure to enter new markets, including vertical clouds like healthcare, which it talked about on its earnings call. I mean, there's really not much on which you can criticize Microsoft. You know, sure, they've had some high profile failures in the past. The Nokia acquisition, the Windows phone, you remember Zune? Mixer, you know, Bing. Is Bing a fail? I don't know. Maybe not really. I guess the fail is, you know, what I was talking about last week with antitrust, Microsoft was distracted by the DOJ and maybe that caused it to miss search, give it to Google, and in that sense, maybe it was a failure, but overall, pretty good track record from Microsoft. Yeah, maybe you can say Microsoft is somewhat of a copycat, you know, the graphical user interface that they copied from the Mac, but hey, even Steve Jobs stole that. Surface, okay. The cloud? But so what, ideas, they're plentiful, execution is the key, really. No matter how you slice it, the data doesn't lie. Microsoft's financial performance, its pivot to the cloud, and the success of its adjacent businesses, make it one of the most remarkable rebirths in the history of technology industry. Now I didn't use the word turnaround because the company was never really in trouble. It just became irrelevant and kind of boring. Today, Microsoft is far from immaterial. Okay. That's it for this week. Remember all these episodes are available as podcasts wherever you listen. So please subscribe. I publish weekly on Wikibon.com and Siliconangle.com. And don't forget to check out ETR.plus for all the survey data and analytics. I appreciate always the comments on my LinkedIn posts or you can DM me @DVellante, or email me at David.Vellante@SiliconAngle.com. This is Dave Vellante for theCUBE Insights powered by ETR. Thanks for watching everybody, be well, and we'll see you next time. 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from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hi everybody welcome to this special cube in size powered by ET our enterprise Technology Research our partner who's got this database to solve the spending data and what we're gonna do is a braking analysis on the analytic database market we're seeing that cloud and cloud players are disrupting that marketplace and that marketplace really traditionally has been known as the enterprise data warehouse market so Alex if you wouldn't mind bringing up the first slide I want to talk about some of the trends in the traditional EDW market I almost don't like to use that term anymore because it's sort of a pejorative but let's look at it's a very large market it's about twenty billion dollars today growing it you know high single digits low double digits it's expected to be in the 30 to 35 billion dollar size by mid next decade now historically this is dominated by teradata who started this market really back in the 1980s with the first appliance the first converged appliance or coal with Exadata you know IBM I'll talk about IBM a little bit they bought a company called mateesah back in the day and they've basically this month just basically killed the t's and killed the brand Microsoft has entered the fray and so it's it's been a fairly large market but I say it's failed to really live up to the promises that we heard about in the late 90s early parts of the 2000 namely that you were going to be able to get a 360 degree view of your data and you're gonna have this flexible easy access to the data you know the reality is data warehouses were really expensive they were slow you had to go through a few experts to to get data it took a long time I'll tell you I've done a lot of research on this space and when you talked to the the data warehouse practitioners they would tell you we always had to chase the chips anytime Intel would come out with a new chip we forced it in there because we just didn't have the performance to really run the analytics as we need to it's took so long one practitioner described it as a snake swallowing a basketball so you've got all those data which is the sort of metaphor for the basketball just really practitioners had a hard time standing up infrastructure and what happened as a spate of new players came into the marketplace these these MPP players trying to disrupt the market you had Vertica who was eventually purchased by HP and then they sold them to Micro Focus greenplum was buy bought by EMC and really you know company is de-emphasized greenplum Netezza 1.7 billion dollar acquisition by IBM IBM just this month month killed the brand they're kind of you know refactoring everything par Excel was interesting was it was a company based on an open-source platform that Amazon AWS did a one-time license with and created a redshift it ever actually put a lot of innovation redshift this is really doing well well show you some data on that we've also at the time saw a major shift toward unstructured data and read much much greater emphasis on analytics it coincided with Hadoop which also disrupted the market economics I often joked it the ROI of a dupe was reduction on investment and so you saw all these data lakes being built and of course they turned into the data swamps and you had dozens of companies come into the database space which used to be rather boring but Mike Amazon with dynamodb s AP with HANA data stacks Redis Mongo you know snowflake is another one that I'm going to talk about in detail today so you're starting to see the blurring of lines between relational and non relational and what was was what once thought of is no sequel became not only sequel sequel became the killer app for Hadoop and so at any rate you saw this new class of data stores emerging and snowflake was one of the more interesting and and I want to share some of that data with you some of the spending intentions so over the last several weeks and months we've shared spending intentions from ETR enterprise technology research they're a company that that the manages of the spending data and has a panel of about 4,500 end-users they go out and do spending in tension surveys periodically so Alex if you bring up this survey data I want to show you this so this is spending intentions and and what it shows is that the public cloud vendors in snowflake who really is a database as a service offering so cloud like are really leading the pack here so the sector that I'm showing is the enterprise data warehouse and I've added in the the analytics business intelligence and Big Data section so what this chart shows is the vendor on the left-hand side and then this bar chart has colors the the red is we're leaving the platform the gray is our spending will be flat so this is from the July survey expect to expectations for the second half of 2019 so gray is flat the the dark green is increase and the lime green is we are a new customer coming on to the platform so if you take the the greens and subtract out the red and there's two Reds the dark red is leaving the lighter red is spending less so if you subtract the Reds from the greens you get what's called a net score so the higher the net score the better so you can see here the net score of snowflake is 81% so that very very high you can also see AWS in Microsoft a very high and Google so the cloud vendors of which I would consider a snowflake at cloud vendor like at the cloud model all kicking butt now look at Oracle look at the the incumbents Oracle IBM and Tara data Oracle and IBM are in the single digits for a net score and the Terra data is in a negative 10% so that's obviously not a good sign for those guys so you're seeing share gains from the cloud company snowflake AWS Microsoft and Google at the expense of certainly of teradata but likely IBM and Oracle Oracle's little for animal they got Exadata and they're putting a lot of investments in there maybe talk about that a little bit more now you see on the right hand side this black says shared accounts so the N in this survey this July survey that ETR did is a thousand sixty eight so of a thousand sixty eight customers each er is asking them okay what's your spending going to be on enterprise data warehouse and analytics big data platforms and you can see the number of accounts out of that thousand sixty eight that are being cited so snowflake only had 52 and I'll show you some other data from from past surveys AWS 319 Microsoft the big you know whale here trillion dollar valuation 851 going down the line you see Oracle a number you know very large number and in Tara data and IBM pretty large as well certainly enough to get statistically valid results so takeaway here is snowflake you know very very strong and the other cloud vendors the hyper scale is AWS Microsoft and Google and their data stores doing very well in the marketplace and challenging the incumbents now the next slide that I want to show you is a time series for selected suppliers that can only show five on this chart but it's the spending intentions again in that EDW and analytics bi big data segment and it shows the spending intentions from January 17 survey all the way through July 19 so you can see the the period the periods that ETR takes this the snapshots and again the latest July survey is over a thousand n the other ones are very very large too so you can see here at the very top snowflake is that yellow line and they just showed up in the January 19 a survey and so you're seeing now actually you go back one yeah January 19 survey and then you see them in July you see the net score is the July next net score that I'm showing that's 35 that's the number of accounts out of the corpus of data that snowflake had in the survey back in January and now it's up to 52 you can see they lead the packet just in terms of the spending intention in terms of mentions AWS and Microsoft also up there very strong you see big gap down to Oracle and Terra data I didn't show I BM didn't show Google Google actually would be quite high to just around where Microsoft is but you can see the pressure that the cloud is placing on the incumbents so what are the incumbents going to do about it well certainly you're gonna see you know in the case of Oracle spending a lot of money trying to maybe rethink the the architecture refactor the architecture Oracle open worlds coming up shortly I'm sure you're gonna see a lot of new announcements around Exadata they're putting a lot of wood behind the the exadata arrow so you know we'll keep in touch with that and stay tuned but you can see again the big takeaways here is that cloud guys are really disrupting the traditional edw marketplace alright let's talk a little bit about snowflakes so I'm gonna highlight those guys and maybe give a little bit of inside baseball here but what you need to know about snowflakes so I've put some some points here just some quick points on the slide Alex if you want to bring that up very fast-growing cloud and SAS based data warehousing player growing that couple hundred percent annually their annual recurring revenue very high these guys are getting ready to do an IPO talk about that a little bit they were founded in 2012 and it kind of came out of stealth and hiding in 2014 after bringing Bob Moog Leon from Microsoft as the CEO it was really the background on these guys is they're three engineers from Oracle will probably bored out of their mind like you know what we got this great idea why should we give it to Oracle let's go pop out and start a company and that NIN's and as such they started a snowflake they really are disrupting the incumbents they've raised over 900 million dollars in venture and they've got almost a four billion dollar valuation last May they brought on Frank salute Minh and this is really a pivot point I think for the company and they're getting ready to do an IPO so and so let's talk a little bit about that in a moment but before we do that I want to bring up just this really simple picture of Alex if you if you'd bring this this slide up this block diagram it's like a kindergarten so that you know people like you know I can even understand it but basically the innovation around the snowflake architecture was that they they separated their claim is that they separated the storage from the compute and they've got this other layer called cloud services so let me talk about that for a minute snowflake fundamentally rethought the architecture of the data warehouse to really try to take advantage of the cloud so traditionally enterprise data warehouses are static you've got infrastructure that kind of dictates what you can do with the data warehouse and you got to predict you know your peak needs and you bring in a bunch of storage and compute and you say okay here's the infrastructure and this is what I got it's static if your workload grows or some new compliance regulation comes out or some new data set has to be analyzed well this is what you got you you got your infrastructure and yeah you can add to it in chunks of compute and storage together or you can forklift out and put in new infrastructure or you can chase more chips as I said it's that snake swallowing a basketball was not pretty so very static situation and you have to over provision whereas the cloud is all about you know pay buy the drink and it's about elasticity and on demand resources you got cheap storage and cheap compute and you can just pay for it as you use it so the innovation from snowflake was to separate the compute from storage so that you could independently scale those and decoupling those in a way that allowed you to sort of tune the knobs oh I need more compute dial it up I need more storage dial it up or dial it down and pay for only what you need now another nuance here is traditionally the computing and data warehousing happens on one cluster so you got contention for the resources of that cluster what snowflake does is you can spin up a warehouse on the fly you can size it up you can size it down based on the needs of the workload so that workload is what dictates the infrastructure also in snowflakes architecture you can access the same data from many many different houses so you got again that three layers that I'm showing you the storage the compute and the cloud services so let me go through some examples so you can really better understand this so you've got storage data you got customer data you got you know order data you got log files you might have parts data you know what's an inventory kind of thing and you want to build warehouses based on that data you might have marketing a warehouse you might have a sales warehouse you might have a finance warehouse maybe there's a supply chain warehouse so again by separating the compute from that sort of virtualized compute from the from the storage layer you can access any data leave the data where it is and I'll talk about this in more and bring the compute to the data so this is what in part the cloud layer does they've got security and governance they got data warehouse management in that cloud layer and and resource optimization but the key in in my opinion is this metadata management I think that's part of snowflakes secret sauce is the ability to leave data where it is and have the smarts and the algorithms to really efficiently bring the compute to the data so that you're not moving data around if you think about how traditional data warehouses work you put all the data into a central location so you can you know operate on it well that data movement takes a long long time it's very very complicated so that's part of the secret sauce is knowing what data lives where and efficiently bringing that compute to the data this dramatically improves performance it's a game changer and it's much much less expensive now when I come back to Frank's Luqman this is somebody that I've is a career that I've followed I've known had him on the cube of a number of times I first met Frank Sloot when he was at data domain he took that company took it public and then sold it originally NetApp made a bid for the company EMC Joe Tucci in the defensive play said no we're not gonna let Ned afgan it there was a little auction he ended up selling the company for I think two and a half billion dollars sloop and came in he helped clean up the the data protection business of EMC and then left did a stint as a VC and then took over service now when snoop and took over ServiceNow and a lot of people know this the ServiceNow is the the shiny toy on Wall Street today service that was a mess when saluteth took it over it's about 100 120 million dollar company he and his team took it to 1.2 billion dramatically increased the the valuation and one of the ways they did that was by thinking about the Tam and expanding that Tim that's part of a CEOs job as Tam expansion Steuben is also a great operational guy and he brought in an amazing team to do that I'll talk a little bit about that team effect uh well he just brought in Mike Scarpelli he was the CFO was the CFO of ServiceNow brought him in to run finance for snowflake so you've seen that playbook emerge you know be interesting Beth white was the CMO at data domain she was the CMO at ServiceNow helped take that company she's an amazing resource she kind of you know and in retirement she's young but she's kind of in retirement doing some advisory roles wonder if slooping will bring her back I wonder if Dan Magee who was ServiceNow is operational you know guru wonder if he'll come out of retirement how about Dave Schneider who runs the sales team at at ServiceNow well he you know be be lord over we'll see the kinds of things that Sluman looks for just in my view of observing his playbook over the years he looks for great product he looks for a big market he looks for disruption and he looks for off-the-chart ROI so his sales teams can go in and really make a strong business case to disrupt the existing legacy players so I one of the things I said that snoopin looks for is a large market so let's look at this market and this is the thing that people missed around ServiceNow and to credit Pat myself and David for in the back you know we saw the Tam potential of ServiceNow is to be many many tens of billions you know Gartner when they when ServiceNow first came out said hey helpdesk it's a small market couple billion dollars we saw the potential to transform not only IT operations but go beyond helpdesk change management at cetera IT Service Management into lines of business and we wrote a piece on wiki Vaughn back then it's showing the potential Tam and we think something similar could happen here so the market today let's call 20 billion growing to 30 Billy big first of all but a lot of players in here what if so one of the things that we see snowflake potentially being able to do with its architecture and its vision is able to bring enterprise search you know to the marketplace 80% of the data that's out there today sits behind firewalls it's not searchable by Google what if you could unlock that data and access it in query at anytime anywhere put the power in the hands of the line of business users to do that maybe think Google search for enterprises but with provenance and security and governance and compliance and the ability to run analytics for a line of business users it's think of it as citizens data analytics we think that tam could be 70 plus billion dollars so just think about that in terms of how this company might this company snowflake might go to market you by the time they do their IPO you know it could be they could be you know three four five hundred billion dollar company so we'll see we'll keep an eye on that now because the markets so big this is not like the ITSM the the market that ServiceNow was going after they crushed BMC HP was there but really not paying attention to it IBM had a product it had all these products that were old legacy products they weren't designed for the cloud and so you know ServiceNow was able to really crush that market and caught everybody by surprise and just really blew it out there's a similar dynamic here in that these guys are disrupting the legacy players with a cloud like model but at the same time so the Amazon with redshift so is Microsoft with its analytics platform you know teradata is trying to figure it out they you know they've got an inertia of a large install base but it's a big on-prem install base I think they struggle a little bit but their their advantages they've got customers locked in or go with exudate is very interesting Oracle has burned the boats and in gone to cloud first in Oracle mark my words is is reacting everything for the cloud now you can say Oh Oracle they're old school they're old guard that's fine but one of the things about Oracle and Larry Ellison they spend money on R&D they're very very heavy investor in Rd and and I think that you know you can see the exadata as it's actually been a very successful product they will react attacked exadata believe you me to to bring compute to the data they understand you can't just move all this the InfiniBand is not gonna solve their problem in terms of moving data around their architecture so you know watch Oracle you've got other competitors like Google who shows up well in the ETR survey so they got bigquery and BigTable and you got a you know a lot of other players here you know guys like data stacks are in there and you've got you've got Amazon with dynamo DB you've got couch base you've got all kinds of database players that are sort of blurring the lines as I said between sequel no sequel but the real takeaway here from the ETR data is you've got cloud again is winning it's driving the discussion and the spending discussion with an IT watch this company snowflake they're gonna do an IPO I guarantee it hopefully they will see if they'll get in before the booth before the market turns down but we've seen this play by Frank Sluman before and his team and and and the spending data shows that this company is hot you see them all over Silicon Valley you're seeing them show up in the in the spending data so we'll keep an eye on this it's an exciting market database market used to be kind of boring now it's red-hot so there you have it folks thanks for listening is a Dave Volante cube insights we'll see you next time

>> Hey, welcome back, everybody. Jeff Frick here with theCUBE. We're at Node Summit 2017 in downtown San Francisco at the Mission Bay Convention Center. About 800 hardcore developers talkin' about Node and really the crazy growth and acceleration in this community as well as the applications. We're excited to have our next quest. He's Nick O'Leary, Developer Advocate from IBM for Watson IoT, and you're workin' on somethin' kind of cool called Node-REDS. First off, welcome. >> Thank you, thank you very much for havin' me. >> Absolutely, so what is Node-RED? >> So, Node-RED is an open source project we started working on about four years ago now in the Emerging Technologies group in the UK parts of IBM, and it's a Node.js application that gives you a visual programming tool for Internet of Things-type applications. So when you run it, you point your web browser at it, and it gives you this visual workspace to start dragging in nodes into your canvas that represent some sort of functionality, like connect to Twitter and get some tweets or save something to a database or read some sensor data, whatever it might be, and you start drawing wires between those nodes to express how you want your application to flow, how you want data to flow through your application. So it's quite a lightweight tool and really accessible to a wide range of developers whether sort of seasoned, experienced Node developers or your kids just learning how to program because it hides complexity. And, yeah, it's Node.js-based, so it runs down on a Raspberry Pi, it runs up in the cloud like IBM Bluemix, wherever you want to run it. So really flexible developer platform. >> Pretty interesting 'cause we just had Monica on from Intel, and she was talking about one of the interesting things in this development world of Node.js is so much of the code was written by somebody else. I think she said in a lot of projects the actual original code may be 2% because you're using all these other stuff, and libraries have already been created. And it sounds like you're really kind of leveraging that infrastructure to be able to do something like this. >> Absolutely, so, one of the key things we enabled very early on was to, 'cause we recognized the power of our tool, is those nodes in our palette that you drag on. So we built the system so that people could write their own nodes and extend the palette, and we used the same node packaging as the standard MPM ecosystem. And as of a couple weeks ago, we have over a thousand third party nodes people have written, so there's probably already a module for most hardware devices, online APIs, databases, whatever you want. People are creating and extending the platform in all sorts of ways just building on top of that incredible ecosystem that Node.js has. >> And then how does that tie back to Watson? You said you're involved in Watson. So Watson people don't think of necessarily a simple, simple interface but not necessarily a simple application. So what's the tie between Watson and Node.js and Node-RED? >> So, Node-RED is a development tool. I say it all hinges on those nodes and what they connect to, so we have got nodes for the Watson IoT platform, so that's great for getting, if you're running node-RED on a Raspberry Pi, connected up to our IoT platform, connect to applications in the Bluemix space. But we also have nodes for the Watson cognitive services, like the machine learning things, visual recognition, text to speech, all of those services we have nodes for. So, again, it allows people to start playing with the rich capabilities of the Watson platform without having to dive straight into understanding lines of code and you can start being productive and create real meaningful solutions without having to understand whether it's Node.js or Java, whatever language you would normally write to access low-level APIs. >> And can the visual tool connect to things that are not necessarily Node specific? >> So, anything that provides some sort of API. If it's got a programmatic API, then it's easier to do with Node 'cause we are in a Node ecosystem. But we've got established patterns for talking to other languages but also things often provides like a rest API, HTTP, MQTT, many other protocols, and we have all of that support built straight into the platform. >> Right, and so what was the motivation to build this, just to have an easier development interface? >> Yeah, it was twofold really. One was in the Emerging Technologies where I was, we do proof of concepts for clients we have to turn around really quickly, so whereas we're more than capable of writing individual lines of code, having that tool that lets us experiment much quicker and solve real client problems much quicker was a great value to us. But then we also saw the advantage for the developers who don't understand individual lines of code for educational purposes, whatever it might be. Those great motivators there in the various communities we're involved with, in IoT home hobbyists, all that sort of space as well, it's found a real incredible user community across the board. >> And when it started, was it designed to be an open source project or that kind of realization, if you will, kind of came along the way? >> I think on day one it wasn't the first thing to mind. You know, we were just experimenting with technology, which is kind of how we operated. But we very quickly got to the point where we realized we didn't have the time and resource to write all the nodes that could be written, and there was a much broader audience than just us doing our day job that this tool could tap into. So, maybe not on day one but maybe on a month in we thought this has to be open source. So, it was about six months after we started it we moved to an open source project, and that was September 2013. And then in October last year, IBM contributed the project to be a founding project of the JavaScript Foundation. Whereas it's a project that has come from IBM, it's now a project that is independently governed. It's not owned by IBM, it's part of the foundation. So, look at the wide range of other companies getting involved, making use of it, contributing back, and really good to see that ecosystem build. >> Oh, that's great, so I'm just curious, you said you deal with a lot of customer prototyping. Obviously you're involved in Watson, which is kind of the pointy end of the spear right now with IBM, with the cognitive and the IoT. As you kind of look at the landscape and stuff you're workin' on over the next, I would never say multiple years 'cause that's way too long, six months, nine months, what are some of your priorities, what are some of the things you're seeing, kind of that customers are doing today that they couldn't do before that gets you excited to get up out of bed and go to work every day? >> From my perspective, with our focus on Node-RED, which is kind of where my focus is right now, it's really that developer experience. We've gone so far with our really intuitive to use tooling, but we recognize there's more to do. So, how can we enable better collaboration, better basic workflows within our particular tooling, because there are people using Node-RED, in particular happily in production today, but it's funny 'cause we don't have a 1.0 version number because, for us, that wasn't interesting to us because we are delivering meaningful function. But in the project, we have just published our road map to a one point zero to really give that firm statement to people who are unsure about it as a technology that this is good for production. And we've got a wealth of use cases of companies who are using it today, so, that's very much our focus, my focus within Node-RED, and all of it does then tie back to yes, it's a JS foundation project, but then with my developer advocate hat on, making sure that draw from Node-RED into the Watson platform is as seamless and intuitive as possible because that helps everyone. >> Right, right, okay, so before I let you go, two things: One begs the question what version are you on, and where can people go to find more information so they can see when that 1.0 and obviously contribute? >> So as a Node project, we've stuck to Symantec versioning, so we are currently version naught dot 17. So we've done 17 major releases over the last about three and a bit years, and that's where we're moving forward. We've got this road map to get to 1.0 first quarter of next year. And if you want to find out more, nodered.org is where we're based, or you can find us through links by the JS Foundation as well. >> Alright, well, Nick, thanks for takin' a little bit of your time and safe travels home at the end of the show. >> Thank you very much. >> Alright, he's Nick O'Leary from IBM. I'm Jeff Frick, you're watchin' theCUBE. Thanks for watchin', see ya next time. (bubbly electronic music)