>> Live from Orlando, Florida. It's the Cube. Covering Enterprise Connect 2019, brought to you by Five9. >> Hello from Orlando, Florida. I'm Lisa Martin with Stu Miniman on the Cube, at Enterprise Connect 2019. Stu and I are joined by a guest from Ribbon Communications. We've got Sacha Gera, the SVP of Cloud. Sacha welcome to the Cube. >> Thank you so much for having me. >> So we've had the opportunity to talk to one of your colleagues from Ribbon before but let's give our audience an opportunity to learn more about Ribbon, who you guys are, what you do and then of course we'll talk about some of the great new exciting announcements that you'll make here this week. >> Absolutely, so Ribbon Communications is a global leader in providing real-time communications. We provide piece parse technology to over a thousand carriers around the world and increasingly to independent software vendors and enterprise. So we came into existence about 18 months ago with the amalgamation of Sonus and GENBAND coming together and about 18 months old and doing some big things now so. >> And a lot of news coming out this week. Talk to us about some of the key announcements that Ribbon is making with some of your partners, AT&T for example. >> Absolutely, so our Kandy cloud communications business which is our SaaS brand, we're a white label platform as a service providing UCaaS and CPaaS services to independent software vendors and carriers around the world. And we're really excited about AT&T's announcement ahead of the conference here and AT&T, you know a lot of people have been saying, "We're waiting for the big tier one service providers to fire back at some of the more well-known CPaaS players out there." And so what we do is we helped AT&T with an end-to-end platform as a service play to help them launch their marketplace. And the key word there is marketplace. There is a lot of folks providing APIs and SDKs as you look around the conference here but when you think about the Fortune thousand looking for those low code, no code-type digital solutions that can have the easy button to launch and transform into the digital evolution that's going on, that's what we are helping AT&T to do. So it's been quite they announcement for us. >> Sacha, I love that. We've been saying for years you know, the enterprise really needs an upmarket place, just like we have on our phones, it'd be great to have that, you know when I came into the show. my first time coming here it was like okay, how much is it just API compatibility? And we were working amongst each other but as I walk around the show floor it's like, "Oh well yeah that (mumbles) makes sense." And then these kind of pieces, which ones come together and which ones would I, as an enterprise or service provider just be able to, you know, plug into. So can you speak a little a little of that maturation of the marketplace and what the reality out there is there today. >> Absolutely and think about that large enterprise that has an existing procurement vehicle with the large carriers. They're getting their data services, their telephony, their collaboration. It's an actual extension to want to sell use cases and digital solutions. And so with the carrier, you've got an existing bill. One bill. Now your adding APIs and SDKs, turn key digital solutions and an easy button that's more E-commerce centric. And that's really what we've been able to help AT&T do, to really move up the value chain, so. >> So when you're out talking with customers and I know one of your customers, Hertz was on the customer panel this morning during the general session. When you're out talking with customers, talk to us about real-time communication. It's this huge opportunity for customers. It's almost an imperative that they'll be able to have real-time communications with whoever they are transacting business with. How are you guys helping customers embrace and deliver real-time communications? >> Absolutely, so we were really pleased to hear Hertz give us the shout out this morning and you know our end customer is actually not Hertz. Hertz is a customer of IBM and we are helping IBM with their white label platform as a service for their UCaaS and collaboration services. And of course Hertz is transforming all of their rental car branches around the world into the cloud, using our hosted voice over IP and UCaaS services. So we're really pleased about the announcement. So when it comes to real-time communications, I mean this is, you got to think about the customer journey and we've heard this from a lot of folks. The consumer is more empowered than ever when it comes to the customer journey. Gone are the days of necessarily walking into a bricks and mortar shop, taking an hour to kind of learn about what's going on. People are making decisions like this because all the information is at the touch of their fingertips. And today it's about customer engagement and it's about making the best informed decisions as possible and customer engagement in especially the contact center is increasingly playing an important role. So we're helping customer like IBM transform their portfolios, fill in portfolio gaps where they can provide new hosting services but at the same time transform that contact center experience and really help drive new sales with engagement tools and new technologies like WebRTC and CPaaS are playing a really important role there. >> So Sacha, it's interesting you have for the most part a degree of separation between yourself and the end consumer. There's one of the press releases that caught my eye though, the scourge to the consumer today is robocalls. It's like most of all, I want to turn off my phone number because most of the calls that come through, even when it says it's somebody you think you know, often times it isn't. Can you talk about, there's an engagement that Ribbon has with a number of service providers, helping to attack this big challenge today. >> Absolutely. So we recently hosted a forum with a number of carriers coming down because there's some studies that show that upwards of 50% of calls in the next couple of years are going to be robocalls and they're annoying as heck, depending on the geography and where you live. So with our new kind of end-to-end portfolio which kind of mixes both analytics and our strategic positioning in the core and the edge. The enterprise edge as well as the core of the carrier. We're in a very strategic place to get that information, data mine it and proactively identify where we're not only getting robocalling but fraud and helping carriers and others to monetize that business and do proactive things with that data. So we have a new kind of solution coming out STIR-SHAKEN, you'll hear a little bit more about that and don't ask me to spell out that acronym. It does actually stand for something that's more technical but we're really excited about what's going on there. The robocalling industry is becoming quite annoying for a lot of folks. It's a big opportunity for us. >> Heck, John Oliver did a segment on it a couple of weeks ago. So, hopefully, your company can help solve that issue because that definitely holds us back today. >> Absolutely. >> So in terms of industry adoption, we mentioned Hertz as a customer of yours through IBM but talk to us about some of the verticals maybe that you're seeing as leading-edge. I think governments, health care, financial services. Are you really seeing those industries kind of lead in this real-time communications opportunity area? >> Absolutely, likes we like to think of ourselves more as of a horizontal player and specifically all verticals are kind of going towards frictionless real-time communications. And you know we have a great thing going on with Five 9s for example. Five 9s is a well-known Cloud contact, it's a center it's a service player and one of the things we're doing with Five 9s is they've got a bunch of end customers who are revolutionizing their contact center and so one of the things we were able to do with Five 9s for example is enable them with WebRTC services. And it was about this time last year, maybe a little bit before when WebRTC ubiquitously kind of got standardized in all the major web browsers. And what we're able to help do with Five 9s is introduce a new frictionless in context way of communicating into the contact center over WebRTC which is great for customers who want to save on the toll-free minutes. It's kind of over the top web toll-free but it's kind of in browser in context like again, contact center agents have that full contextual toolkit of engagement to be able to preserve customers and upsell and cross-sell and provide great customer service. And we're not really seeing any particular vertical that is necessarily adopting that more than the other. We like to think of ourselves as horizontal but certainly governments, financials, retails, telemedicine, we're seeing tremendous traction across all of those. >> See, oh go ahead Stu. >> Yeah I was just being in the cloud, can you talk about some of the relationships with the public cloud. No, no, there were some announcements with Microsoft, believe with Amazon also. How are you seeing, that the hyper-scale public clouds impacting your space? >> Absolutely. So you know in this day and age, you've got to be able to fire up new micro-services and new cloud services instantly and practically anywhere. And there's reasons for that. Some of that is data privacy, some of it's security, some of it's just latency and so on And you know AWS, Azure we're kind of agnostic to the public cloud infrastructure but we're pretty excited about some of their announcements. We've been working with Amazon and Microsoft Azure for some time and increasingly with IBM SoftLayer as well. And so the ability to fire up some of our piece parts or Session Border Controllers. Our WebRTC gateways up in the public cloud and able to facilitate our channel partners to go to market in rapid time. It's an important part of our strategy. With Microsoft, obviously we're one of two certified vendors and with Microsoft and Teams, you know a lot of enterprises are going towards the Teams. We're able to help carriers play in that by having those interconnects to the carriers to provide the voice services and the carrier services and fire up practically instantly in the public cloud. So we're pretty excited about some of those announcements here as well. >> And what can some folks find out and learn about in your booth here at Enterprise Connect? >> Yeah, so I think at our booth you'll see a number of key topics being highlighted. Obviously the public cloud and the Microsoft as well as some of the other public cloud announcements we've had. In addition to that, we recently acquired a company called Edgewater and so our heritage, we've been known very much as kind of a carrier SBC player of choice but we've kind of extended that to the enterprise edge with the acquisition of Edgewater. And what Edgewater provides us is kind of that Enterprise SBC, but with SD-WANs. So SD-WANs, a growing part of our story, having that end-to-end quality of service, over the top with analytics and all the protection of security and all that kind of stuff. So it's a perfect fit into our portfolio and that's another area that you'd be able to see at our booth here this year at Enterprise Connect. >> Excellent last-- >> So if I understand that, I'm sorry. So you have an SD-WAN offering, is it something we've been watching quite a bit in the multi-cloud space and a lot of movement high growth in that area? >> Absolutely. So the SD-WAN offering with the Edgewater product offers a number of key services. Obviously the disaster recovery, having multiple broadband inputs and being able to switch from an LTE to another broadband input is part of that but the analytics in the end-to-end quality of service are equally important and you know for somebody who helps run our cloud communications business, when we go deploy to folks like Hertz, putting that Edgewater CPE box on the prem is an important part of our solution to have that end-to-end visibility for things like SD-WAN but also the analytics and inevitably security and protection as well. >> As we talk about at this event the evolution of communication, the evolution of this event and collaboration, I know we're only kind of halfway through day two here but I'm just curious, any key takeaways that you have gleaned so far from the event that you're looking forward to bringing back to HQ after this event is over? >> Absolutely. You know, every year is a little bit different. There's always a buzz word or two. I think this year what I'm starting to see is there's a lot more focus on the use cases as opposed to the technology. You know in the past, you come here, you talk a lot about the three-letter acronyms, SIP and UCaaS and CPaaS and WebRTC. This year, you're seeing a lot more about how can we actually monetize the business? What are the use cases? And you know as opposed to APIs being a big part of how you get there and the focus on the how, it's more about the what, like APIs are just kind of de-facto and you need them to help mask the complexity of the network and monetize and do things like creating new digital solutions and use cases. So you know it's just an example of how people are trying to talk about things this year as well as analytics and BI. People aren't just talking about how they're doing it, they're showing you what they can do with sentiment analysis. They're showing you how proactive policy can be applied. So that's pretty cool because we're now getting into the fun part of monetizing all of this great technology investment we've made for 10 years. >> And actually showing the business outcomes that it should be delivering, >> Absolutely. >> Right? That's the need, right? >> That's right, yeah. >> Well Sacha thank you so much for stopping by the Cube and chatting with Stu and me. We appreciate your time. >> Thank you so much for having me. >> Our pleasure. >> All right. >> Thank you for watching the Cube, Lisa Martin for Stu Miniman, you're watching the Cube. (upbeat music)

>> (announcer) Live from Las Vegas, it's the Cube. Covering Fortinet Accelerate '18. Brought to you by Fortinet. (upbeat music) >> Welcome back to the Cube. We are live at Fortinet Accelerate 2018. I'm Lisa Martin, with my co-host, Peter Burris. And we're excited to be joined by Myk Conrad, the VP of Product Management at Ribbon Communications. Myk, welcome to the Cube. >> Well, thank you very much, and it's great to be here. >> So tell us about Ribbon, your Technology Alliance's partner. Tell us about Ribbon Communications, and what you guys do with Fortinet. >> Okay, so a few things. Ribbon Communications, we basically are a security and cloud company, in the voice and video space. So what does that practically mean? That means we sell something called a session border controller, which is a voice and video firewall, into both service providers and into enterprises. So an example would be, when you make a mobile call, with AT&T, or Verizon, or Deutsche Tel, or British Talk, I mean, whoever your particular service provider is, that voice session becomes an IP packet, wends its way through the network, and as it's wending its way through the network, it has to be potentially encrypted, it has to be protected, denial service attacks, all of that stuff, that's what we do. Now how does that work into what Fortinet does? We are a part of their cloud security fabric, and we have the ability, with a new product that we're launching, or have launched this week, or announced this week. It will be actually GA and available in the summer. It will be included in passing information into the security fabric. So we protect voice and video, Fortinet protects data, web, email, you know, everything that they do very well. What we are, what this new product that we call Ribbon Protect is, is going to be a bridge between the voice and video world of IP communications, and the data world that Fortinet works with. And we're going to be passing information and talking between those two worlds, and therefore adding an extra layer of security to that. So that's how we work with them. >> (Peter) So voice and video have some certain special communications requirements, and basically, you're bringing the capacity to do voice video security, and the special requirements associated therein into the Fortinet ecosystem. >> (Mykola) Yeah, so a great example is, so let's use an enterprise as an example, alright? So let's say you're a big bank, somebody along the lines of a Bank of America, and I'm not saying it's Bank of America, or Wells Fargo. I'm not naming anyone, but just along those lines. Big bank. You probably have a SIP trunk, which is an IP trunk, and IP packets for communications coming into a data center, or multiple data centers around the world, and into individual branches of all your retail locations. And those are voice and video packets. And your tellers, or your contact center agents, are picking up the phone, and that's all IP audio and video. Or they might be using a handset, and again, that's all IP to the laptop, or to the handset. And they're having these conversations. You may want to encrypt those conversations. You definitely want to make sure, if a contact center is up, and it's doing mortgage calls, it's taking individual requests for checking account balances, that that contact center stays up. In the world of IP, especially in SIP communications, it's very easy to send a denial service attack against, for example, a contact center, and bring that down. So nothing keeps somebody from generating, from a single laptop, 20 gigabytes, 30 gigabytes, or petabytes worth of calls into a contact center. And that will bring down the infrastructure, unless you're protecting that infrastructure with a download service type of device. Similar, very analogous to what you would see is in a DDoS device that, for example, Fortinet sells, on the data side, to protect your web servers and your email servers, and all the other things, except on the voice side. So that's what we do. And now, with Ribbon Protect, we're going to be taking all the information that we're gleaning, as these ports are being opened and closed, and as we are getting attacked on the voice and video side. so an IP address comes in. We've decided that there's a lot of bad calls coming in from that side of the fence. We blacklist that. We will then pass that information over to the data side of the house. Through the security fabric, we will pass through, and then Fortinet can, on their side, say, "Hey, this is now blacklisted also." So any packets coming from that IP address that are doing something else, that have nothing to do with voice and video, because it's two separate networks, typically, will now be protected. So now the bank has an added level of security. >> (Peter) And Fortinet propagates that, cascades it throughout. >> Cascades it throughout their entire partner ecosystem. >> Right. >> So that's what we do. And we have deep visibility into SIP. So one of the things, as an example, firewalls are very good at opening and closing ports. And the default for most firewalls is port closed. The problem is with SIP it's a phone call. Ports are typically closed. A call comes in, and it's ringing. You answer, and when you answer the UDP port has to be open, so that a media stream can come through and cut through the call, so you can actually have a conversation. Otherwise, the packets will get blocked, and there will be no conversation. You'll get one-way audio, or no audio. We have very good visibility into which ports are being assigned the duration of that call, so when somebody says, "Okay, bye." Hang up, click, and you kill that packet stream, that port will get closed automatically. A lot of firewalls don't do that. They keep the ports open, because they don't know at that SIP level that a call's coming through right this very second for Myk, open the port for three minutes because he's talking to his mom, conversation's over, close the port, because they don't go to that depth of information on the SIP application level. We do, because that's our job. And we then pass that information, say, "Listen, you should be closing this port, or opening this port." We have a lot of visibility that firewalls just don't have. And now, as part of the security fabric, we're going to be passing that information onwards. So now we're going to have a stronger security perimeter for enterprises as well as service providers that are using the combination of our session border controllers, Ribbon Protect, the new product that's coming out, and the Fortinet panoply of products. >> So if I'm a CSO at a bank, and we were speaking with Fortinet's CSO earlier today, and kind of talking about the evolution of that. We talked as well, I think with John Madison, about the security architect. If I'm the CSO at a bank, or a service provider, what is my material value that this technology alliance is going to give to my organization? >> (Mykola) That's a good question. So there's a couple different aspects of this. So let me talk about Ribbon Protect. We frame Ribbon Protect in three different value propositions: one is for telephony fraud, or communications fraud, another one is in cybersecurity threats, and a third one is network visibility. So I'm going to start with network visibility and work my way back up that chain. So there's a value proposition, not necessarily for the CSO, but for the CIO and the people running the communications network, in having really good visibility into the communications network, an end-to end view across multiple different disparate items. So let me give you an example. Typical bank will have Cisco, they might have Juniper, they might also have an Avia system, when it comes to communications, they might have an old Nortel system, they might have some cloud communications from a Vonage, or a Fuse, or Verizon. All these disparate systems, all under this one CIO, and a call comes in, and nothing works. For some reason it's not routing correctly, the contact center agent isn't getting the call. You know, have you ever called, and you get transferred, and you get dropped? That's the problem. And then when they try to troubleshoot that, it's very hard, because there's so many disparate elements. So the first thing you need is visibility. So from a CIO perspective this product, Ribbon Protect, will give you visibility into the network, and that will allow you to troubleshoot and bring the network up. Then you go into the next level. So once you have visibility. So you can't provide security until you have visibility into a network, so now that you've got this N10 visibility, now let's talk about security. Two different types of security threats that our customers are seeing when it comes to communications. One is sort of robo dialing, toll fraud. And I would even put denial service attacks sort of in there. Denial service attacks also go to the next level, which is cybersecurity. But robo dialing: how many of you are getting calls all the time now? I'm getting them on my mobile, literally, I get like three or four a day on my mobile phone from a different random number, because they know my area code and they think if they mask it, it's a friend of mine, and I'll answer the call. That's becoming more and more prevalent. Now think about if you're an enterprise, and if you're a CSO, and now you're tasked with keeping these employees productive, but they're starting to get all these random calls, your contact center agent. And we've actually had this happen to customers of ours, where they picked up the phone and they were getting random garbled noise on the other end. And you're a contact center agent, your job is to sit there, and you hear these weird noises in your earphone, you hang up, next one comes in, it's weird noises. Third one comes in, it's actually a person that is asking about their mortgage. Great. That's your job. But then the next one is some weird ... It brings productivity way down. So there's that one area. And then there's toll fraud, which is in the billions of dollars, now, of cost to both enterprises and service providers, where people are doing things like calling Zambia, or weird little countries, and routing through enterprise networks. So that's another aspect that a CSO would be worried about. And lastly, and the most important one, is the cybersecurity issue. Packet-based denial service attacks across your entire system, that can not only take down your web server and your email server, but also your communications, your real-time communications, but also exfiltration of data. So what we've seen is the following: a hacker comes in through the data side and understands the network typology, puts in some malware, but because they're using something from Fortinet or somebody else, they can't do anything with that information. There's no way out. But here's the SIP network, this UC network, sitting in the system, and it's sort of unguarded, not that there's no guards there in place, but the data side, if you look at everything that Fortinet and others have been putting out, that side of the fence is getting a lot of attention. And over the last few years even more attention, as hacks have taken place, and PII has been stolen. But on the SIP side of the fence, that hasn't really happened as much. And so we believe that's the weakest chain right now, or will soon be the weakest chain. And hackers will use the open ports, because if your just using a firewall, those ports are open. The range of UDP ports to put media through is wide open. It has to be, otherwise it won't work. And so they can exfiltrate data through that. So they use some other means to find the typology of the network, get in, and then they can pass data out through that. And it might look like a good media stream, like a video call, and we've actually seen examples where people have sent video and embedded, underneath that, data inside the video. >> They piggyback. >> And they piggyback it. So you're going to see, the value to the CSO is, listen, if you're concerned about people finding a different way into your network, you're protected against, or you think you're protected against malware, you're protected against email, you're protected against web server attacks. Well have you really thought about the UC side? So if I'm a CSO, I should be really worried about securing that side of my fence, because I haven't been worried about it for the last three or four years, and there's been an increase in attacks, or increasing amount of attacks on that side of the fence. And then there's these other values of Ribbon Protect that hit other aspects of the IT chain. So we believe that there's a, sort of three core value propositions, two that really affect the CSO, and one that's more of a CIO issue. >> Well, look, once a port's open it's open. >> Correct, yeah. >> And video and voice do have characteristics that if a device is set up to introspect it and understand it, then it can recognize it. But as you said, your general-purpose firewall typically is not looking at that. And you don't want to introduce an entirely distinct and separate management platform, and paying, if you don't have to. So the CSO gets to see the same paying, while the CIO gets to ensure that voice and video happens without being hit? >> (Myk) And works. Yes. >> And at the same time, that the CSO is getting the paying that they need, so they have some visibility into what's going on with the network. >> (Myk) Exactly, and that's the entire purpose of this product. We believe it meshes nicely with what Fortinet's talking about, in that they have their Fortiguard Artificial Intelligence product that they've been talking about, and how it's detecting what's going on in the network, and millions of nodes, and features, and really actually quite sophisticated stuff. I just sat through an entire presentation on it. We are doing the same thing with Ribbon Protect, where we have an artificial intelligence layer that would sit inside the company, but it's specifically looking at the communications pathways, what's normal communications, what's abnormal communications. what's normal packet flows on the communications side, and abnormal communication flows. And putting two and two together, and doing machine learning, similar analogous things to what they're doing on the data side, and on the virus malware detection side, is what we're doing on the communications side, and putting together our own database, again, similar to what they have, where they have a database, and they apply that database of known bad, known good, to their ... And we're doing the same thing, and then we're going to share that information into the Fortinet fabric. >> So you're really collaborating and, it sounds like complimentary technologies. >> (Peter) Yeah, you're complimenting. >> That the customer benefits from. We've got about a minute left, but I'd love for you to share, maybe at a super high level, an example of a joint Fortinet/Ribbon customer, where the CIO and the CSO are being very happy with the technologies that you are delivering in this collaboration. >> I can't name any names, unfortunately, but we are talking with a large service provider right now, that is very enamored of Fortinet, and uses them extensively on the data side, to provide services to their customers, meaning: as a service provider, you're providing data and managed services to your enterprise customers. And they also use us today to provide voice services - >> (Peter) To secure voice. >> To secure voice services to the same set of customers. And so now what we're talking about is marrying the two, not sending data to Fortinet, and what is getting this service provider very excited is to be able to offer a differentiated service to their enterprise customer base, something that the other service providers can't, because they either aren't using Fortinet, or aren't using us. They need somebody that is using both, and this particular one happens to be using both of us, so we can put Ribbon Protect into their environment, into their network, and it'll start sharing their information, and what that will allow them to do is market to their customers at a higher level of security, and even to the point where they might be able to go out and say things like, "The most secure voice video system in the world today." >> (Peter) Yeah. They're expanding the scope of a common security footprint, and thereby allowing a new class of services to be provided to, whether CSO or CIO. >> And they view it as a differentiator for themselves. >> (Lisa) That's exactly what I was thinking - >> Which is why, when they're talking to the CSO or the CIO, why should you use us versus the other three guys you're probably talking to right now, well here's one reason. There's probably a few others, but here's at least one reason. >> Differentiation, a key fundamental for digital transformation. Well Myk, Mykola, thank you so much for joining us on the Cube. You're now a Cube alumni. >> Thank you very much, happy to be an alumni. >> (Lisa) Excellent. We want to thank you for watching the Cube's continuing coverage of Accelerate 2018. I'm Lisa Martin. For my co-host, Peter Burris, stick around. We've got great interviews coming up next. (upbeat music)

it's the cue now here's your host stool minimun hi this is Stu miniman with Wikibon with a special presentation of the cube here at the ribbon cutting at infinite at new briefing center in Waltham Massachusetts excited to have with me Brian Carmody who is the CTO of infinite at Brian thanks for joining me hey Stuart how you doing I'm doing great so we've talked to some of your team here got on the inside so here we're outside but we're going to be digging into some of the innards of what's going on in the industry so yeah Brian you know not much has been going on in the storage industry let me see in the last month we had the you know finalization of the largest kind of acquisition / merger in the industry of technology with Dell buying EMC and Newt annex just IP ode so you know when we've got the CTO we always want to kind of dig in you know what what's in your head what what are the big kind of mega trends that you're seeing and how's that impact what you're doing yeah so this was obviously it's been a crazy era of innovation for us I would even just looking back at the past two years you know 2016 or let's say 2015 was kind of the year that storage got fast it was the year that NAND flash at the knee of the adoption curve and every marketing person everywhere was hashtag AFA and then 2016 was kind of the year we think that storage got commoditized this was when software-defined in hyper converged technologies kind of hit the knee of the adoption curve it was capped just like 2015 was capped by the pure IPO 2016 was capped by the mechanics IPO telling is a really interesting question of what comes next like what's the next mountain that we're going to climb as an industry and we're hearing really interesting things from customers about what their priorities and what their challenges are so first off going into 2017 one of the really interesting phenomenon is that the requirements from traditional enterprise let's say a CTO of a bank that's building a next-generation data center versus a mega cloud provider those requirements are starting to converge so this idea that the cloud is one thing an enterprise is something else I think we're starting to kind of move past that obviously there's a huge trend still going on for compute heavy workloads to move off premise into into public clouds and kind of a net flow of storage heavy workloads tend to move on premise but I think we're at the point now where we're kind of reaching an equilibrium point between those two so that is certainly one trend another thing that we're hearing very much about is the the rise of new KPIs for measuring IT systems acquisition cost is still a big piece of the equation but new technologies are new new new metrics like power space and cooling are becoming very critically important because with the transition to the cloud even CIOs of very large fortune 500 companies their computations are often happening for the first time now in spaces where they are a tenant in someone else's get they are renting space or renting capacity so all this is putting a lot of pressure on systems designers to really focus on density of storage and density of computation and you know we see that this is contributing to the rise of a new class of storage technologies called hyper storage systems which are designed to to meet those goals all right so so Brian I'm I've tried to create different market categories before when I join Wikibon it was hyperscale invades the enterprise when people before were they were talking about hyper converged asthma much we talked about we called it server San actually because it was you know the benefits of ass and brought to the server but you know so you've got that term hyper in there is that hyper scales and hyper converge is it some other you know hyperness you know what what's what's the general idea you're trying to get food this new category it so let's take a look at kind of the existing commercially available technologies and it's kind of interesting to look at it and think about it on a two-dimensional axis of looking at the density and then the latency so you have the for example the traditional monoliths these are latency that's low enough for primary storage they do not tend to be very dense you know they're under a petabyte of storage per rack and that's where the industry began that's what a lot of us kind of cut our teeth on there being superseded by all-flash arrays these are higher density because they have data reduction technologies built-in natively into their data paths they have better latency so they're kind of moving up and to the right with respect to the monoliths but they come at a price they tend to be exceedingly expensive and relatively small systems then you have the SDS and the server storage and the scale out stuff they tend to be very close to the density of the monoliths again a half about half a petabyte to a petabyte per rack a regression on latency but they're being widely adopted because the costs are just so much better than the monoliths and the AFA is and that's the entire enterprise storage industry right in this area here now all the way down if you move to higher density you have systems like the Facebook open vault so this is you know an awesome open source storage system that I'm that Facebook developed it's the basis of haystack and f4 two of the largest storage systems in the world right now these are incredibly dense storage systems multiple petabytes per rack but they're very high latency they're used for cold data only and other things like Amazon glacier and whatnot are kind of all clustered down in that high latency but super dense so hyper storage is if you move around that two-dimensional chart is the upper right-hand quadrant it is storage technology that has the reliability of monoliths it has the cost structure the programmability and the the ability to run on any type of hardware that the SDS systems have but it has the density and the data center profile of the hyper scalar storage so this is completely uncharted territory this is where all of the R&D spend companies in like Google and Amazon everybody's racing to try to go figure this out and this is the kind of wild west where we operate we have a three year head start I'm a on-prem part of this but it's not going to last because this is you know it's the remaining uncharted territory in the industry really interesting so you've heard it first hyper storage definitely something I've been hearing for number of years is especially the big financial guys have been they've had hyperscale Envy is really what it was there like you know we spent huge amounts of budgets on IT you know we know our stuff how dare you know a bunch of retail guys basically you know come in here and think that they understand this space so it sounds like you're bringing some of that back to them um you know is infinite out the only ones you know you mentioned some of the you know kind of Google and Facebook are there anybody else that's kind of packaging this for the enterprise other than infinite at not yet so the sum of the of our competitors that are building their systems out of all flash technologies are moving in the right direction but their their media itself has to become a lot more dense and the cost has to drop significantly until they can be realistic plays and until then it's going to be differentiated by scale when you want to do petabyte scale stuff you do it with art with hyper storage architectures and one you want to be small and tight and fast you do it with a FAS but I think those lines will be blurred over time great so it sounds like you've got a clear differentiation compared to kind of just the the software-defined pieces don't deliver on you know some of the density that you're talking about or some of the high level performance when we start getting things like nvme i hear is going to be a game changer for the the hyperscale pieces do we start to see the blurring of lines between some of these architectures or is this something that you know two years from now you're going to say ok here's the last wave and here's the next wave yeah so I mean if you take a longer view instead of two years I mean if we if we look at a five and a ten year view this is all there is going forward there's hyperscale architectures or disaggregated architectures which are for compute heavy storage light workloads and then you have hyper storage which is for storage heavy compute neutral workloads and going forward if you take a 10-year window that's all there is out there well Brian I'm hoping we can do a whiteboard with you sometime in the future or maybe there'll be some kind of you know thesis on you know the kind of the hyperscale the hyper storage category but appreciate you here sharing it with our audience here I want to give you the final word as to kind of you know that the hard work that still needs to be done in the storage industry over the next few years go Patriots alright well we'll drop the mic there thank you brian says is so much for joining us and thank you for watching the cube

(intense orchestral music) >> Hello and welcome to this special VMworld preview, I'm John Furrier, co-host of theCUBE, here in the Silicon Valley, Palo Alto offices for theCUBE. I'm here with Peter Burris, head of research at SiliconANGLE media and Wikibon team. We're hear kickin' off, what we're going to talk about at VMworld, what we expect to see at the event in Las Vegas; and what are some of the highlights from the news, what's going to be discussed. Peter, great to see you. >> Great to be here John. >> I know you've been workin' hard, we're going to talk about this new true private cloud report that you put out, very comprehensive, a lot to go through, so, we're going to digest that, we're going to unpack that. But first, we're going to have theCUBE there for you know three days. >> Two sets right? >> Two sets. So, second year in a row we have two sets at VMworld. 72 thought leaders and interviews in the middle of the hang space, if you're going to to to VMworld, go to the hang space and look for us, come say hello there's some little cough areas to hang out. Come visit us, say hello, check in if you're an influencer, we're going to come preview some new technology we're going to show there, so, don't forget to ask about that, take a look at the video or the variety of tools we have with theCUBE Digital Tooling and Video Services. But, most notably, there's going to be a lot of headline news, Andy Jassy's going to be giving a keynote, we've got that confirmed on Twitter; and a lot of discussion around the future of the data center, future of IT, certainly of how cloud and on-premises are going to intersect. This is has been a groundbreaking report from Wikibon for the third year of the true private cloud report. So let's unpack that, because I think this is a notable backdrop to VMworld is that as everyone's been saying hybrid cloud, now multi cloud, essentially the same thing. The cloud is a great resource, on-premises (laughs) is not going away. It used to be aspirational to have this notion of having cloud operations. Your report is now definitively saying it's no longer aspirational, it's actually happening. So take a minute to explain the report in it's third year some of the key findings. >> Well the, we might want to, we want to step back a little bit and say what's goin' on with VMware? Because VMware's progress and both what it's enabling, and what constraints it still faces, are going to have a lot to do with what happens in the report. But speaking about the report specifically, True private cloud was a concept that David Floyer, Stu Miniman, kind of devised a number of years ago, and the simple observation is that ultimately a lot of hardware vendors, a lot of system vendors, were just taking the word cloud and slapping it on their hardware and saying oh here's our replacement strategy, does it have anything to do with cloud? Well, kind of, yeah, but not really. And their observation was increasingly, customers are going to want that cloud experience and the basic notion of true private cloud, and what all of our research shows, is that inevitably what's going to happen is the customer's not going to move their data to the public cloud en mass; there's going to be certainly some important elements that are going to there, it's no question about that, but then increasingly they're going to try to bring cloud, the cloud operating model, the cloud experience, down to where the data resides; and that's going to be at the edge, and that's going to be at what others call the core, on-premises. And near premises, so, you know side-by-side with public cloud players in in a number of different hosting companies. So the very concept is the requirements or the attributes of the data are going to dictate where the workloads operate, and increasingly those, that's going to demand an on-premises capability that still satisfies the basic notions of cloud. >> Great, that's a great backdrop. Now let's talk about VMware, and let's, I have something that I want to talk about the direct cloud report, we'll get into that. VMware had two or three years ago, Pat Gelsinger was under the gun, you know with the pressure of the Dell merger looming, what the future is going to be in there. Since then the performance of VMware has been spectacular financially, he's really proud of that. Some new products pivoting, I want to get what you're hearing first, but what I'm hearing is and I want to give you something, give you a chance to respond, I want to get your reaction. VMware has seen some acceleration over the years around vSphere, around kind of good, stable, that haven't lost anything with vSphere, so, one of their core products, virtualization storage; but their large accounts are stable in the Fortune 500, losing some business maybe in the lower accounts, but as the AWS, Azures, and Google Cloud, cloud native players are growing, the emerging products are front and center for VMware. vSAN, NSX, obviously the driver which we'll want to double click on, and the vCHS, the VMware vCloud Hybrid Service. These are, specifically the vSAN getting momentum, and these emerging products, how important is that for VMware? Obviously their stability is IT footprint. But why is the cloud driving some of these new emerging behaviors? >> Look, every company wish they had the install base that VMware has, and that install base is predicated on VDI, or Video Desktop Integration, Virtual Desktop Integration. It's vSAN, which is the use of VMware as a basis for virtualizing storage, and obviously all the stuff that's associated with virtualizing hardware. You know, John, it's interesting, if you think about what made the cloud possible, certainly AWS took on the heavy duty the heavy lifting associated with actually creating a business, and it's obviously you know very successful, but it all started with the idea of virtualization, and the notion that you could in fact bring virtualization in on top of hardware sources and generate a lot of not only cost avoidance, but also increasing flexibilities; you can get better utilization but also increase your flexibility, and that's one of the things that made the cloud possible. And so if we think about the VMware install base, that's where it all starts. It's the ability to get greater utilization and greater flexibility on-premise, and now it's moving into the cloud. So we got three basic questions for for VMware that we're looking at. One, there's been a lot of chatter about the relationship between Dell EMC and VMware, and what does that mean? You know Dell EMC is carrying a pretty significant debt load these days, and, there is visibility in where it's going to go, but VMware, as a brand is worth an enormous amount of money. So how does Dell EMC better you know increasingly attach itself to VMware is an interesting question, and what does that mean for the ecosystem? >> Having perverse incentives possibly versus-- >> Possibly, possibly, but we want to get that, there has to be a constant promise from VMware that they're going to take care of the ecosystem first with Dell EMC as a big participant in that. So that's the first thing, especially these days with all the financial chatter. Second thing is, this AWS agreement is really really important, and a lot of people are questioning is it a one way street? Do you just, you know, sure we have virtualization in cloud, we got virtualization here, does it make it easy to bring stuff up to VMware? What happens once it, or up to AWS, what happens once workloads get up there? Is AWS going to try to you know facilitate a migration? That's still a very very challenging technical problem, but we'll see a lot more, Andy Jassy has the keynote as you said, about how that partnership is working and where it's actually going. Because there will be a requirement also to be able to take workloads out of AWS, and out of public clouds, and bring 'em down on-premise. >> Hence the two-way street that you're looking for. >> Got to be a two-way street. A simple example, we're going to see increasing, in the AI world, we're going to see more modeling occurring in cloud, more training occurring in cloud, and more inferencing learning out on the edge and the core. Well, we want to see, you know VMware certainly wants to see more of those workloads being virtualized. And that leads to the third question what's the VMware story with IOT, with the edge? That is very very unclear at this point in time, and there's a lot of work that's going to have to be required to put into. And so I think that those are the three things that we're really focusing on, and how does VMware answer those questions can have a lot to do with future architectures, future business models, and future partnerships. >> And it's important, I think the edge one is clearly obvious that the don't have much announced, but that have to put a stake in the ground at some point. >> Absolutely. And you know, the reality is, the edge has real-time, often is associated with real-time, high performance, every throughput, very lightweight execution. >> Uses the cloud, uses the data center. >> Uses the cloud, uses the cloud, uses you know servos computing is an example, containers, those things all don't require a virtualized machine. >> I want to get your reactions on something, I sent an email out to a bunch of buyers, of friends in the network of theCUBE alumni and our networks and I asked them a question, I said: what do you think about VMware's prospects going forward as a buyer of technology, as you're transforming your organization from the obvious on-premise operating model to hybrid? Which they're all doing pretty much, and are agreeing to it. So the aspirational aspect was confirmed, to your point. So they responded, (laughs) and they said look it, VMware remains largely flat across server, infrastructure, storage, and virtualization buying. >> In terms of growth? >> No, what they're buying and growth, growth, no they're not really paying much attention to that, they're saying it's pretty flat, we're not going anywhere it's not going down, it's not going up per se, in the core segments. They said the main thing is going to be the emerging technology so vSAN, NSX, and vCHS. Then I asked 'em I said: What do you like about VMware, what do you think they're strong in? They said: well, we like the fact that they got, that they have technology, okay, and if they can keep the technology lead we're interested, so that's a question also, I'll get that in a second, the relationships that they've had with VMware, the supplier relationships, rinse reset a feature of products, and then compatibility with their existing IT footprint. I then asked 'em what're you worried about? (laughs) And they said: well, if there's a discussion about replacing VMware, it's around price cost and technology lag. Your reaction to those two points? >> First point is, again, there's no question that VMware has a great install base of customers that are thinking about what it's going to mean, and I think the most important observation is that, and we'll learn more about how many enterprises really are starting to move their virtual machines up to AWS, for example, more than VMware next week. But I also think that it provides cover for you know a CIO or VP of infrastructure to say yeah I'm going to continue to invest here, and I'm going to, you know, have the option of moving to something else. And there will be a lot more options for what you do with a VMware virtual machine in the future. Regarding the question of whether it's flat or not, I think one of the reasons why that perception is there, is because the hardware business overall has been flat, and VMware is a derivative of play in the hardware business, so, at least until recently. In many respects now it's dragging some of it forward because VMware allows you to put off additional hardware purchases. So we'll see where that cycle ends up, we might be at the nadir of that cycle, but I certainly think that we're seeing-- >> It's mature for sure, I mean. >> It's mature. But it used to be that you'd buy new hardware and then you'd put VMware on top of it to virtualize it, so you could get more productivity out of it. But as hardware's slowed down, why would you buy more VMware? But I think what's happening now is people are thinking first in terms of buying VMware, and what workloads you need to put on there, how they want to set those workloads up, and then looking for hardware to do that, and increasingly looking through the cloud. The third thing I'd say is that look, the VMware cloud foundation, and NSX, are two incredibly important technologies. For example-- >> Well hold on before you go there, 'cause I want to drill down on this because, one of the things that I mentioned in there which is a key word is existing IT footprint; this is a reality, some call it legacy. Having an IT footprint with VMware is not going to get you in trouble because of the path of the cloud, 'cause you've got cloud native, things like Kubernetes down the road, but that footprint's the base foundation. So as NSX comes in, (laughs) and the cloud foundation, interesting new lever. How does those enabling components fit for the enterprise who's sittin' there sayin' I got an existing IT footprint, I got all these clouds on the horizon, why NSX, why is the vCloud foundation important? >> Yeah, so let's start with VCF, VCF provides, or is a, takes you maybe 75, 80% of the way there to that cloud experience on-premises; a VMware based cloud experience on-premises. So, it's a really nice bundling of technology, that provides a relatively simple way of deploying, configuring, maintaining, and ultimately retiring workloads. So, it's a nice package for a lot of enterprises that have that VMware experience. That's a different story from NSX, so, on the cloud foundation standpoint, if you need to demonstrate to your board and to your CXO, and to your line of business people, that you are not just have an option to go to the cloud, but you're actually bringing that experience more to the business, a lot of customers are kickin' the tires on VCF, and it's a good thing to do. NSX is a little bit different. NSX, if we think about the long term, there has always been a need to flatten networks in the enterprise. Having that network, and that network, and that network, and trying to inter-network them together through bridging and gateways, is extremely problematic, even at the network level. It requires-- >> In terms of sprawl and complexity, or both? >> In terms of complexity, in terms of the amount of processing, I mean the cost of doing address translation and takin' packets and re-formatting them for different workloads in the network; very, very difficult to do. Now, you add programmability atop of that, 'cause at the end of the day, cloud is effectively a network program model. Very, you know, hey, you got a big problem on your hands. Somebody at some point in time is going to make, is going to build a $50 billion company around the idea of inter-networking clouds. I don't know who it is. >> Cisco wants to do it. >> Cisco would like to do it, but Cisco, quite frankly, probablyyyy, you know they could have started this process five or six years ago, and they didn't get out there. VMware took some steps to do that. NSX is a pretty good candidate right now, if we're thinking about how we build inter-networked multi cloud environments. >> So, you used the example before you came on camera, that you have this segment that in the old world of network stacks SNA, DECnet, variety whether stacks had proprietary things and bridges happened, to your point, to your explanation. And then TCP/IP came up and flattened it, TCP/IP. >> Yeah, just flattened it all out, made 'em all go away. >> So clouds aren't networks, but they're cloud environments, same concept, but flattening 'em out. >> Well, they are networks, at the end of the day they really are networks. >> They're a network of machines. >> Yeah, they're a network of services, they're a network of machines. >> So, explain the flattening piece, is it, are we still in the early stages of that, are you seeing visibility? >> Very much so. >> What are some data points around this? >> So the, and you said earlier, that the multi cloud, hybrid cloud are really the same, well today they are. We might envision a day when they're not, here's why. Hybrid cloud is I got this cloud, I got that cloud, it's more of a where is the data located, how am I going to run those environments together. Multi cloud is I got multiple clouds that I have to inter-network, and I have to bring together. I want to run a job in one of the Oracle application clouds, that also touches some of the machine learning that you get out of Google Cloud, and increase and include some of the retail capabilities you get out of AWS. That is a very very realistic scenario, it's going to happen, people are doing that kind of stuff right now. >> And that's the preferred outcome people are looking for? >> That's the preferred outcome that people are lookin' for. Well, each of those different environments are going to have an economic incentive to say yeah, that's great do that, but bring more of the workload into my cloud, 'cause I'm going to create interfaces that are a little bit better at working together than you know you can get from the inter-networking side. Well, they'll still have to stay open, but you know some of those environments are going to be better at that than others; but at the end of the day you want no penalty whatsoever, other than latency and where the data's located from amongst these different services. And so eventually what we're going to want to do is we're going to see the inter-networking itself flatten, where're the jobs, how the jobs are set up: flattened. Make it easier to move data, and jobs or workloads out of one cloud and be able to put it in another, because of any number of different reasons. And so, that's-- >> Yeah, competitive advantage, different economics, different product features >> Regulatory regimes change, you know what happens if if in Germany they decide to do something else from other than GDPR, what's it going to mean? >> So is NSX going to be that connector, you kind of think? >> NSX-- >> Has the opportunity. >> Has the potential to be that kind of connector. So an enterprise that's looking at how they can increase their set of options, their flexibility, their ability to bring networking closer to workload. NSX is as good of, that I know about, that we know about, as good an option out there as any. >> I want to ask you before we move onto the true private cloud versus private cloud and that whole report you did to private cloud in the third year. We're seeing a trend around the operating side, the personas are developing Google Cloud Next conference, the notion of an SRE, you know sight reliability engineer. Public cloud has always been known as developer friendly, very developer oriented, cloud native, all the developers love containers, Kubernetes, Istio, and a lot of cool services are coming out. But now with VMware, they kind of own the IT footprint from an operating model, operating the networks. The bridging of those two worlds are kind of coming together, right now we don't see a lot of cross over yet between pure cloud native developers in VMware ecosystem. Your thought on that connection to those personas, how it relates to how the ecosystem's rolling out, your thoughts? >> Yeah, you know John, I think that's going to be the big challenge for the next couple of years, literally, in the next couple of years. That ultimately, developers love the public cloud because they can avoid operations of people. Increasingly the public cloud players are going to have to provide platforms. And you know everybody talks about I, you know infrastructure as a service versus pass as a service, or platform as a service. But when, in Amazon, Google, Azure, Oracle, IBM Software, all of these guys are going to have to add capabilities that are that much more intriguing and interesting to developers. Bringing the enterprise developer into this ecosystem is the next big round of competition, 'cause those people aren't going to go away, they're too important to the future of business. And, to the degree that VMware can provide, and I think this is the best that they can do, a neutral platform for those guys as opposed to starting to introduce you know machine learning services on VMware or or, you know, anything beyond some of the platform stuff that Dell EMC has Pivotal, and what not, on VMware. Yeah, we can expect to see greater integration for that, but I think ultimately what VMware needs to be is a phenomenal target for stuff that's written over here, that needs to run over there, and have it run on VMware, I think that's ultimately what's going to happen. >> Alright Peter, great stuff, now let's talk about the true private cloud report, 'cause I think VMworld is always a beacon, always a bellwether for what's going on in IT, with respect to on-premises private cloud, or true private cloud, or hybrid cloud, IBM as well, and some others, they're always a leader in engineering. Before we get into the report, first describe the difference between what true private cloud is and what people have called private cloud. Because the term private cloud's been kicked around, going back I think 2012 I first heard-- >> Oh, private cloud, I first heard the term private cloud in probably 2005, 2006. >> But you guys have nailed this definition called true private cloud. What does it mean, what's the difference? >> So, the idea is, the cloud experience wherever the data requires it, and increasingly data is going to require it at the edge, in the core, in the data center, you know, local to the business; because of latency issues, because of cost of bandwidth issues, because of regulatory issues, because of IP control issues, any number of other issues, there's going to be an increasing distribution of data; workloads are going to follow that distribution of data, and the systems have to be there to run it. But we want to have a common vision of how those workloads are operated, and a common model for how we pay to run those workloads. So when you think about true private cloud, it's basically, we want the cloud experience, which includes, you know simplicity, the one throat to choke, the regular and non-invasive upgrades and enhancements to software; we want to add to it, kind of the management interfaces that we're associating with the cloud, but also the pay as you go, and the flexibility to scale up and the greater plasticity to be able to add services. We want all of that, but in a footprint on premise. >> And that's for true private cloud? >> And that's what we mean by true private cloud. Now if you go back a few years, companies would you know, you'd get a hardware company that'd say oh look, cloud is Linux plus some manned control interfaces, no problem, we can put that directly into our operating system or have a management interface on our platform, now we can go on cloud. >> And put it in your data center. >> And put it in your data center. But you still paid for everything up front, you have to deal with software patches and upgrades, because it's software that's installed. >> So it's an operating model, how you're consuming technology, how you're buying it. >> Operating model, how you consume the technology, and the flexibility, and the future of the modern application approach, which is services oriented, and networks and data. >> And so one of the findings obviously, you're pretty strong on this sayin' this is no long aspirational, it's realistic. What does the report show, what're the numbers, how did you break down the report? >> Sure. >> What are the categories, and what are some of the data? >> So the aspirational notion was that we kept talking about true private cloud, but, the hardware vendors were slow to actually deliver on it, especially on that service oriented approach as opposed to a product oriented approach. By that I mean product approach is, you buy it all upfront, and it's caviat after I'm a consumer, service oriented approach is you know we have enough belief in what we're selling that you're only paying for the services you consume, which is what AWS and Azure and others do. So we're seeing that actually happen. That's number one. You take a loot at what HPE's with a technology called GreenLake. IBM is advancing it's cause with software. Dell EMC is doing some interesting things with both VMware but also some related types of technologies. All of that is happening right now, so the server companies, or traditional server companies, are introducing true and honest to goodness capabilities that mimic the cloud, so that's happening. The second thing that's happening is you know the AWSs the Google Clouds, and the big hyper scalers, are also starting to introduce technology that allows at least elements of their platform to run on-premise. The big holdover was AWS, but now, through snowballs, through their their kind of ranked box, data box, you can now put a fair amount of processing on there, and a fair amount of AWS stuff, and you can actually run workloads down on this box. So it extends the AWS platform out to locations in a very novel way. So we're seeing on the one hand the server companies truly will introduce technology and services that actually do a better job of mimicking the cloud. We're seeing the cloud players come up with technologies that allow them to extend their footprint, their cloud presence, down to where data needs to reside, and that's where everybody's goin' right now, everybody's goin for that spot in the marketplace. >> So, you have categories here, on-premise-- >> We have on-premise, which is kind of the traditional true private cloud, and the leaders from a hardware packaging standpoint are Dell EMC, HPE are two of the big leaders. Then we have-- >> Cisco's right behind them. >> Cisco's right behind 'em. We've got what we call the near-premise, or the host of true private cloud, and this is where you have AWS right next to your private cloud box so that they can communicate really fast, or it's hosted. IBM is very big here, but there is a number of other players-- >> IBM's got a sizable lead, it's 12% by your numbers, and Rackspace coming second and four-- >> Rackspace is good. And then you've got some very interesting and very important smaller players, like Expedient for example. And then-- >> So there's two main categories, there's hosted, >> Correct. >> And then on-premise. >> On-premise. >> And then there's another category >> So near premise, and on-premise. >> Near premise and on-premise or hosted. >> And there's the ecosystem side, there's a software that's actually utilized to do this, this is where VMware excels in. >> Explain what the ecosystem, so you called true private cloud ecosystem pull through shares, what is that? >> So, we have, so, VMware as we've been talking about, is one of those technologies that allows one to devise a true private cloud platform. Increasingly that's what they're doing, with some of the technologies that we're talking about. And so ultimately they are putting the software out to customers and customers are defaulting to that software, as their approach to building that true private cloud, and then pulling hardware through as a second decision. So the first decision is I'm going to build my cloud, my private cloud, my true private cloud with VMware, and I'll find hardware that doesn't get in the way. >> So it's leaders who are pulling hardware sales. >> It's the software leaders that are putting the software for building true private clouds out there, and then through partnerships dragging hardware in. >> And so there, they're there and everyone wants to talk to them. So that's VMware (laughs) 24% >> That's VMware, Nutanix is moving along. >> HPE, Microsoft, IBM. >> HPE's in there. >> Interesting, that's awesome. And any other findings that you've found, in terms of growth? Number sizes I think this year you had 21 billion roughly 2017. >> Yeah, it's just over 20, it's 20.3 billion, it's going to go to, you know over 260 billion in 10 years, it's going to be bigger than the infrastructure as a service marketplace, it is the true private cloud segment, the on-premise segment for the first time exceeded the size of the near premise segment as the software matures, as you figure out how to make these business models go. But this is going to be, you know Diane Greene said something very very interesting at Google Next. And she said look, nobody really understands how this business is going to work in 10 years, and she's right. Some companies clearly have a better understanding than others. >> So do you think your numbers are short or over? >> I think-- >> But that implies you know. (laughs) >> Well no, I don't know if it's short or over, but let me give you an example. That our numbers presume a relatively constant approach in thinking about how we price and how we generate exchange for this stuff. But how fast the cloud operating model, that pay as you go moves into the true private space, is going to have an enormous implication on what those revenues look like. The degree to which companies demand a three year commitment like Salesforce is starting to do with SaaS. It's going to have an enormous implication on how those revenues actually get realized. >> Well, we've debated this, you and I have debated this before with Dave as well, Dave this it's a trillion, Dave Vellante, so, you know I think you're sure, I think you took a conservative approach, and you know just my personal observation. >> Well we think the overall cloud market's going to be, if we add SaaS in there, it's going to be 260 to 300, probably a total of 700 billion, something like that, and so it's pretty sizable. So we're just talking about that on-premise true private cloud. >> Yeah, the true private cloud you know, $250 billion by 2027. Okay, so I got to ask you a question, since, I like that Diane Greene quote by the way, just kidding you about the forecast numbers, but, I think she's right. So I got to ask you, what is your observation around what this report says vis-a-vis the buyer market out there who are squinting through the fud, and, all these rankings around who's got the most market share. We hear, you know there was a post on Forbes from my friend Bob Evans that said: oh, Microsoft's number one in cloud! So, how you define cloud is a function of how you define cloud. Someone defines it by bundling an office and apps and, eventually, the level of granularity is going to have to be at least segmented a bit. How do you view how customers should keep a score card for market share, leadership, and besides customers, and number of services, I mean is there an approach that anything coming out of this data you would see and saying maybe the market might want to be sized this way, maybe we should be thinking about not so much market share numbers on some graph on some analyst firm. Is there any thoughts on that? Because it's a big thing, and true private cloud's just one sector. >> Yeah, yeah. >> You've got SaaS, and you've got PaaS, and you've got-- >> So I think John, there've been at least, you know we could probably say there're more, but just making it up off the top of my head, there have been at least three eras that users focused on. Era number one is the hardware as the asset, how do we get the most out of our hardware. That dominated probably until the late '80s or so. And then it became the application as the asset, and then we bought into the application, and we bought hardware and all the other stuff underneath that application, and that was pretty much the 2000's, up until maybe 2010. And now we're thinking of data as the asset, and what does that mean? What it means is that ultimately, I think that the way that, we think that the way that architecture is going to be thought of, is not on application architecture, but around data architecture; I don't mean data architecture like a DBA, I mean what is your brand promise, what, what activities do you have to deliver that brand promise, what data and services do you need to perform those activities. Get that data in as close as you possibly can to those activities, wherever they have to be performed, so that you can perform them predictably, reliably, at the lowest cost, and in the greatest, shortest period of time. So I would start with the idea, you know what I'm going to focus on where my data's going to be located to run my business, that's where I would focus. The second thing, as I think when we think about market shares, and we think about a lot of these other questions, it's okay which, this is a transformative period of time, which of these companies is going to be most likely to deliver a product now, but also create better options for how I do stuff in the future; and we like to talk to our clients about the idea of buy the stuff that provides the best portfolio of options on future data value. And so, data today, and helping think about architecture, work with companies that are demonstrating that they're going to be able to create the options that you need in the future, 'cause this is going to change a lot over the next five, six, eight years. And so, you want to work with companies that are demonstrating that they're able to create new technology, through IP, through things like opensource, >> Okay so the question is-- >> Are sharing it appropriately too. >> So, who's number one? Again, I don't think this is going to be one score, I think it's going to be level of services, how many services you're using. There was one angle I wanted to do, but I can't, I'm still having a hard time. But I guess I'll ask ya, to put ya on the spot. If I'm a customer, Peter, who's the number one in cloud, gimme the top three players. >> AWS, Azure, Google. >> Okay, (claps once) there ya go. (laughs) The top three clouds. Well we're going to keep an eye on it-- >> Let's go to four though, so AWS, Azure, Google, and then again, from that true private cloud-- >> IBM. >> Because that's a, no, no, it's got to be Vmware; because that's, that's where the pull through is right now, right. But when you think about it, the big question is is AWS and Google Cloud going to come down to the edge, and down to the true private cloud as fast as some of these other cloud players are going to go up to the bigger cloud? If I were to pick the one that's most likely to win, it's located somewhere near ribbon. So Microsoft or... In Seattle area AWS. Again, again, it's so early, I think if people, going to have to figure out what to do, that's going to determine the winners and losers. Certainly a true private cloud report, great report. Check out the true private cloud report from Wikibon.com, go to wikibon.com and check it out, preview for VMworld. I'm John Furrier with Peter Burris, a lot of exciting news, two large sets, 72 interviews, three days, come visit theCUBE team, we got to full team down there, we're going to have a lot of our team down there lookin' to talk to you. Join our community, join our network, we're going to have a lot of fun, and also learn a lot at VMworld, talk to some really smart people. Thanks for watching. (intense orchestral music)