>> From theCUBE Studios in Palo Alto, and Boston bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> Microsoft CEO, Satya Nadella sees a different future for cloud computing over the coming decade. And as Microsoft Ignite keynote, he laid out the five attributes that will define the cloud in the next 10 years. His vision is a cloud platform that is decentralized, ubiquitous, intelligent, sensing, and trusted. One that actually tickles the senses and levels the playing field between consumers and creators by placing tools in the hands of more people around the world. Welcome to this week's wiki buns cube insights, powered by ETR. In this Breaking Analysis we'll review the highlights of Nadella's Ignite keynote share our thoughts on what it means for the future of cloud specifically, and the tech industry generally. We'll also give you a more tactical view of Microsoft and compare its performance within the ETR's dataset to its peers. Satya Nadella's forward-looking cloud attributes comprised five key vectors that he talked about. The first was ubiquitous and decentralized computing, Nadella made the statement that we've reached peak centralization today that we're witnessing radical changes in computing architecture from the materials used to semiconductors software, and that is going to serve a new frontier that's forming at the edge. Nadella envisions a world where there will be more sovereignty and decentralized control. We couldn't agree more. The cloud universe is expanding and the lines are blurring between what's being done on-prem, across public clouds and the cloud experience which is going to extend everywhere, including the edge. And of course, data is going to be flowing through this hyper decentralized system. Next was sovereign data and ambient intelligence. To us data sovereignty means that whatever the local laws are the system is going to have the intelligence to govern privacy, ensure data provenance, and adhere to corporate edicts. Ambient intelligence is a field of research that leverages pervasive sensor networks and AI to respond to and anticipate humans and machines. Nadella sees the future where a business logic will move from being code that is written to code that is actually learned from data, pretty interesting. He sees this autodidactic system if you will, as fundamental to tackling big problems like personalized medicine or even climate change. Third, he talked about empowered creators and communities everywhere. Nadella said, there'll be increasingly a balance between consumption and creation. His talking about an economic balance essentially he's predicting that creation will be democratized and his vision is to put tools in the hands of people to allow them to tip the scales toward knowledge workers, frontline employees, students, everyone, essentially creating content, applications, code, et cetera power to the people if you will. And underneath this vision is a new form of or emerging new forms of Silicon operating systems and entirely transformative digital experiences. Next was economic opportunity for the global workforce. So picking up on the accelerated themes of remote work that were catalyzed by COVID, Nadella emphasize that the future has to accommodate flexibility in how, when and where people work. He sees a new model of productivity emerging, not necessarily defined by corporate revenue per employee for example, but by the economic advantages that become accessible to everyone through better access to technology, collaboration tools, education, and healthy lifestyles, all enabled by this ubiquitous cloud. Finally, trust by design, Nadella said that ethical principles must govern the design, development and deployment of AI. The system he said must be secure by design with zero trust built in to protect business assets and personal privacy. So this was a big vision that Nadella put forth it, connects the dots between bits and atoms and sets up Microsoft to extend its reach well beyond office productivity tools and cloud infrastructure. He cited the Microsoft cloud as the underpinning of its future and specifically called out Teams, he mentioned 365, HoloLens 2 and the announcement of Microsoft Mesh, a new mixed reality platform. Nadella said Mesh will do for virtual reality what X-Box live did for gaming. Take the experience from single person to multi-person imagine holographic images with no screens, empowering advances in medicine, science, technology, and very importantly social interactions. Now, one of the things that we took away from his talk was this notion of Microsoft as a technology arm's dealer. No, we're not, Nadella avoided slamming the competition directly by name one statement that he made, stood out. He said, " No customer wants to be dependent on a provider that sells them technology on one end and competes with them on the other" And to us this was a direct shot at Amazon, Google and Apple. How so you ask? And what does it tell us? In his book "Seeing Digital" author David Moschella said, "that Silicon Valley broadly defined as a duel disruption agenda." What does that mean? Not only are large tech companies disrupting horizontal layers of the tech stack like compute, storage, networking, database, security, applications, and so forth. But they're also disrupting industries Amazon and media, grocery, logistics, for example. Google and Amazon on healthcare, Google and Apple on automobiles, all three in FinTech. And it's likely this is just the beginning but Nadella's posture suggests that Microsoft for now anyway, is content being mostly a horizontal technology provider, aka arms dealer. Now, there are some examples where you could argue that Microsoft sort of crosses the line maybe as a games developer or as a SAS competitor. Do you really want to, if you're a SAS player do you want to run your system on Azure and compete with Microsoft? Well, it depends if you're vertically oriented or maybe horizontal in their swim lanes, but anyway, these are more natural cohorts to technology than say for example, Amazon's retail business. So I thought that was something that was worth taking a look at. All right, let's take a quick look at how Microsoft compares to a couple of the great tech giants of the past several decades. Here's a financial snapshot of Microsoft compared to Oracle a highly profitable software company and IBM an industry legend. The first two things that jumped right out of Microsoft, size and it's growth rate. Microsoft is twice the revenue of IBM and nearly four extent of Oracle. And yet Microsoft is growing in the mid-teens compared to low single digits for Oracle and IBM continues to shrink so extensible you can grow. Microsoft's gross margin model has been pulled down by its hardware business but its operating margins are unbelievable. Meanwhile, the cash on its balance sheet is immense much larger than Oracles, which is very impressive. It's certainly dwarfs that of IBM, a company that had to take on a lot of debt to acquire Red Hat and has a balance sheet, that increasingly looks more like Dell's than it's historical self. And then on the last two rows Oracle and IBM, both owners of their own cloud have been lapped by Microsoft in terms of CapEx and research & development investment. Ironically, as we pointed out, IBM's R & D spend in 2007 the year after AWS launched the modern era of cloud was comparable to that of Microsoft. Let's now pivot it to some of the ETR survey data and see how Microsoft fares. We'll start by sharing a fundamental basis of the ETR methodology, that is the calculation of net score. Net score is a measure of spending momentum and here's how it's derived. This chart shows the components of Microsoft's net score. It comprises five parts and represents the percentage of customers within the ETR survey with specific spending profiles. The lime green is new adoptions, the forest green is increased spend of 6% or more for 2021 relative to 2020, the gray is flat spend, the pinkish slice is spend declining by more than 6% or 6% or more relative to last year and the bright red is replacing the platform. You subtract the reds from the greens and you get net score. As you can see, Microsoft's net score is 53% which is very high for $150 billion Company. Now let's put that in context and expand the scope here a little bit. This chart shows how Microsoft fares relative to its peers, the vertical axis shows net score against spending velocity and the horizontal axis shows market share. Market share measures pervasiveness in the survey. In the table insert, you can see the vendors they're sorted by net score and the shared end column is there as well, which represents the number of shared accounts in the dataset. On both accounts bigger is better. Now note the red dotted line, that's the 40% watermark which is my personal indicator of an elevated net score anything above that in our view is really solid. Microsoft is as usual off the charts strong well to the right with it's market presence and then an overall net score of 53% as we showed earlier. And then there's Azure, separate from Microsoft overall. We wanted to plot that specifically which of course it doesn't have the presence of Microsoft overall, no surprise, but it's still prominent on the x-axis and it has a net score approaching 70%, which is quite amazing. AWS not surprisingly is highly elevated with a presence that's even larger than Azure. And you can see Zoom, Salesforce and Google Cloud all above the 40% line. Google as we've reported is well off the pace in the horizontal axis and even though its net score is elevated, we would like to see it even higher, given its smaller size relative to AWS and Azure. You know, SAP always stands out because it's a large company and it's got a net score that's hovering just under 30%. It's not above that 40% line, but it's solid. And you can see IBM and Oracle now we're showing here IBM and Oracle overall so it's the whole kitchen sink comparable to Microsoft that turquoise dot, if you will. So you can see why those two are valued much lower Microsoft. The large base of its business that's declining is much, much larger than the pieces of their business that are growing. Now Oracle has some momentum, the Back Aaron's article on February 19th, which declared Oracle a cloud giant and it declared its stock a buy combined with some earnings upgrades including one today from Ramo Lyncho of Barclays has catapulted the stock to all time highs and a valuation over $200 billion. IBM is a different story as we've discussed frequently Arvind has a lot of work to do to get this national treasure back to what's prominent itself. Okay, let now unpack Microsoft's vast portfolio a bit and see where it's doing well and where it's making moves and maybe where it's struggling, some. This graphic shows Microsoft's net score across its entire product portfolio within the ETR taxonomy. And you can see it's pretty much killing it across the board. Microsoft plays in almost every sector in the ETR taxonomy and you can see the 40% red line and how many of its offerings are above that line. The yellow bar being the most recent survey and while there's quite a bit of gray, i.e. flat spend relative to 2020, we're talking about some very tough compares from last year. And yet there's still a huge chunk of the portfolio in the green meaning spending momentum is actually up from last year and some of Microsoft's most important sectors like Cloud and Teams and Analytics. Look only Skype and Microsoft Dynamics are lagging, so really nice story there in our view. Now let's come back and take a look at Microsoft's cloud business specifically as compared to its peers. So Satya basically said that Microsoft's future will build on top of its cloud and looking at this picture it's pretty encouraging for the company. This chart, again, shows net score or spending momentum inside specifically Fortune 500 customers and it's a key bellwether in the ETR dataset, and you can see Azure and Azure functions well above the 40% red line and extremely well positioned relative to AWS and GCP. Importantly, the yellow bar tells us that compared to previous surveys Microsoft's cloud business is actually gaining momentum in this very important sector. Now, other notable call-outs on this chart VMware Cloud, which, it's on-prem hybrid cloud and VMware Cloud on AWS, which is reportedly doing well but off from the momentum of its highs last spring. You can see Oracle jumped up indicating cloud momentum, but still well below the performance of the largest cloud players. The IBM Cloud appears to be a non-factor in the survey and as we previously stated, we'd like to see IBM recalibrate the financials for its cloud business and come up with a reporting framework that better represents the prevailing mental model of cloud computing. We think a cleaner number would allow IBM to build on the Red Hat momentum. I'm not sure what to make of the HPE boost, it looks significant, but in digging into the data it's only 17 data points, but look 17 within the Fortune 500 companies is not terrible. And HPE net score in that sector is more than double its overall cloud net score so that's positive we think. Okay, let's wrap by looking at how customers are thinking about multi-cloud adoption and really this data that we're about to show you simply asking customers about clouds they're using versus any type of long-term vision. So it's a good representation of what's happening today and what CIO is are thinking about in the near future particularly over the next 12 months. The survey asks customers to describe their cloud provider usage and strategy. You can see that only 14% of the survey respondents have exclusively a mono-cloud strategy, but now add in another 22% who were predominantly single cloud and you now have more than a third of the customer base gravitating toward mono-cloud. Another 14% say they're concentrating cloud providers more narrowly. Now on the flip side, you've got a big group, 29% that are moving toward multi-cloud and if you add in the additional 16% who say they are and will continue to be evenly spread, 45% of the survey is solidly headed in that direction so it's a mixed picture. What's the takeaway? Well, we think Andy Jassy is right when he says that while many customers use more than one cloud, they tend to have a primary provider and have something like a 70,30 or even 80,20 split between primary and secondary clouds. Now we think, however that this will change, but only to the extent that the vendor community is adding value on top of the existing hyperscale clouds. What we're saying and have been saying is that there is a real opportunity to create value on top of the cloud infrastructure that's being built out by AWS, Google and Microsoft. Instead of fearing cloud, the vendor community should be embracing it creating a layer on top, abstracting away the underlying complexities associated with cloud native, exploiting cloud native, and then building on top of that. Snowflake's data cloud vision is right on in my view, we can envision virtually every layer of the stack following suit. Even within database there are opportunities to identify more granular segments across clouds. For example, despite Snowflakes early multi-cloud lead you're seeing competitive firms like Teradata begin to architect a system across clouds that can query data warehouses from distributed locations, including on-prem as part of what they refer to as a data fabric, sounds kind of like Snowflakes global data mesh, or maybe better Zhamak Dehghani's data mesh. Yeah, sure but Teradata has capabilities that Snowflake doesn't for example, the ability to do complex joins and we can see plenty of market for both companies to differentiate. And why shouldn't similar vision extend from on-prem, across clouds to the edge for data protection, security, governance, hybrid compute ,analytics, federated applications, its a huge market that the hyperscale providers are likely too busy worrying about their own walled gardens to start building across on top of their competitors clouds. So Dell, HPE, VMware, Cisco, Palo Alto Fortunate, Zscaler or Cohesity, Veeam and hundreds of other tech companies, including by the way IBM and Oracle should be saying thank you to AWS, Google and Microsoft for spending all that money to build out great infrastructure on which they can build value, tap for future growth. And many of you will say, Hey, we're already doing this. Okay, I'll be watching to see the ratio of real versus slideware because generally today, in my opinion the denominator is much larger than the numerator. So when that ratio hits 1X we'll know it started to become real. Okay, that's it for today remember, all these episodes are available as podcasts wherever you listen so please subscribe. I publish weekly on wikibun.com and siliconangle.com. Please comment on my LinkedIn post or you can tweet me @DVellante or feel free to email me at David.Vellante@siliconangle.com. And don't forget to check out etr.plus for all the survey and data science action. This is Dave Vellante for the Cube Insights powered by ETR. Be well, thanks for watching and we'll see you next time. (relaxing music)

>>live from Las Vegas. It's the Q covering AWS executive. Something brought to you by extension. >>Welcome back, everyone to the cubes. Live coverage of the ex Censure Executive Summit here at AWS. Reinvent I'm your host, Rebecca Knight. We have two guests for this segment. We have Satya Adric, Carl Adder Gala. Sorry, He is the VP single family technology at Fannie Mae. Thanks so much for coming on the show. Satya >>glad to be here. >>And we have Dave Baldwin, VP Architecture, Cloud Engineering at Fannie Mae. Thank you so much for coming on the show D thanks >>for having us. >>So we're talking today about transforming the mortgage industry through through the cloud. Fannie Mae is obviously a foundational part of the US home mortgage industry, and it's been around for a long time. But at a time right now, where there is just so much tremendous change going on in the industry, particularly with the emergence of fintech and other push button mortgage providers, talk a little bit about the last 3 to 5 years. In terms of the changes, you've seen two to the business. You want to start? >>Yeah, I will. So So when we look at the industry changes. What Fannie Mae does is mostly in the secondary market, so our core business hasn't changed from the point of taking the lone synchronizing and selling. However, in the mortgage industry, when we talk about the bar or experience and then the lenders how they have improved the experience across the board, I think is it has been a huge shift right three years ago. The discussion has bean always about Hey, can we do more reliably? Can we do more faster? Right? Those were the conversations, but now the expectations off our lenders and bottles have significantly increased. Right now, they're talking about user experience. How can we meet our bar or where they are, Right. So the lenders have got a lot of expectations on us in terms of how do you feel? Feel that that is the first biggest change in the realm off several of these, right? The 2nd 1 ese, the data has become the currency now, right? It has significantly improved our posture around finding about, um, their assets that income, their employment. Right. So you guys may have seen a lot off David surgeon. It is a product that we have launched in that well, so data revolution has been a big change. And then how we're utilizing that to serve Margaret's industry, our lenders and borrowers, thereby we also reduce the risk within the industry. Right? So those two have bean huge changes. Then there is a technology revolution in terms off AP eyes, Microsurgery says. How do I plug and play? How do we reduce my cost when I'm locking a bottle or two alone? Right. And these are the things that are lenders have bean pushing us on right? Reduced the cycle from somebody coming to the application to taking a loan, closing alone and delivering to Fannie Mae. Shrink the timeline and in doing it, reduce our costs. Right? So these are being like more and more expectations Have bean really set from the border for a few from the lender point of view on Fanny me and all our innovation. Our transformation is all about meeting them and also setting standard for them. What is great in this industry and that's that's what has been going on in the last 3 to 5 years. >>Yes, and that you just laid out a tremendous number of trends and all this disruptive change when you were trying to meet these new expectations from your lenders and your borrowers. Dave. What? What are the in making this journey to, from to to say, I'm sorry from to the Cloud, How are you thinking about these challenges ahead at a time where the user experience is so important? Data is currency and this technology revolution, >>well, it's a big change and, you know, and it's a change across people, process and technology. So if you think about it, what we've done is we've started to trade a new operating model, which really is a lot more engaging, and and it requires an uptick, a scale and really ah, a new way of working right. We've even gone as far as to introduce lean management in a tools and processes. But if you think about it, the people definitely have to change. If you think about it from a process point of view, you're you're really looking at reimagining the way some of the mortgage industry works right, because there's a lot of demand for it. At the end of the day, the customer expectations and especially If you go all the way to the borrower, the customer expectations is very different. You know, they're very they they don't understand unnecessarily why they would have to fill out all this paperwork, right? When don't you already have the information? And to sati is point about data. That's why it's so important to get that data together. Because if we can harness it right, then we can truly start to re imagine these processes and make it so much easier for a borrower nor a lender to work together and eventually work with us. So and then finally, you know, from a tech point of view with the introduction of the cloud, you know, that new foundational sort of technology that really gives you something to pivot off, you can really you can really start to take advantage of the micro service architectures and the new technical capabilities that can help make this really right. And so that's That's generally how we look at our digital transformation and and as you start to think about prioritization, how do I move those? How do I think about the applications that are going to change and how they're gonna neither either Transformer moved to the cloud. You really start to think of you know what business value and I'm trying to achieve 1st 2nd 3rd right? And then what applications won't make it, You know, they're gonna be completely redone. And what applications? Frankly, we're gonna have to move along with it to manage some of the dependencies we're going. >>So I think one more point I wanted and Rebecca is that when we look at this B to B businesses, they're very tightly integrated, right? Our companies have been integrated when we are extending out information explained, extending the responses in the past. Anybody talks about experience, right? It is about Hey, there will be there are technological glitches, but you don't want to impact big. That's used to be the norm. Not anymore. I think when we look at now one of the top customer slate, if you blink from the infrastructure layer point of view, there is business loss. People are not just looking for resiliency anymore. People are looking for fault tolerance, especially when it comes to the top to your customers. Right. So I think we can see the underpinning off cloud and also how we architect our applications to meet that kind of need. It's not just about being resilient anymore. Gotta be. You cannot lose a transaction. But I think those things have bean more and more that we're hearing from our customer base, and we feel like the cloud journey is going to be underpinning for these types of expectations from our customers. >>So how do you work with partners like Accenture in AWS? When you embark on this journey and think through the your business imperatives and think through your strategy, >>I think when when we think about our partnership's. First of all, there are a lot of partners that we have and that we've had for years, as we as we really not only do digital transformation, but you got to run the business, too, while you're doing this transformation. And so you know, when you think about it, the way the wake centers worked with us is you know they number one have helped us with a cloud strategy. So that's a very hard thing to Dio because you think about all the different personalities in your organization and all the people that you have to bring together. You know what Accenture helped us with. It is to really level, said everyone and get everybody on the same page in terms of, you know, where we want to go on how we wanna head on this journey. The second thing that they helped us with was really the program management. So that's a huge undertaking to write and given the fact that it's very different and these are new things that we're doing in our firm. It's good to have that external expertise that that sort of done it with other companies and they can bring that to bear with eight of us. You know, eight of us is is one of one of the major providers that we're using. Thio post a lot of our business applications, and if you think about that there, you know we're taking advantage of their technology. We're leveraging some of their pro serve professional service is thio, help us get it right and help us sort of not only with the implementation, but in some cases the governance and control frameworks that are highly regulated. Organization like ours needs So >>and I think if you think about this from the scale point of view, right? Everybody knows there is war for talent, right? We use our partners in terms of how can we scale these things that are new operating models? New technological? Because there is a change curl in bringing up the entire employees based without extent, These guys can be catalyst. In addition to that, they can be scaled provided us, right. I think that's how we can I use these, But it is action generator B s. >>This morning during Andy Jassy fireside chat, he talked a lot about the importance of innovation and experimentation and trying different things. How What's the experience of innovation at Fannie Mae? How do you innovate with partners or just thinking about all of the changed expectations? How do you make sure you are trying to solve the right problems? Describe your process creative process >>again, I think, um, when we I think about this innovation process and how we do water in Fannie Mae right three years ago, it is about Hey, how do we get our employee base to think about the possibilities right on Veran bunch of hackathons innovation days so that you get excitement from the teams, but in the last one and 1/2 year. It's more about innovation that can reap benefits, right? So we call it as focused innovation. We have, ah, clear cut Enterprise Innovation team. And they're on some of these innovation days and whatever have you within the within the firm so that you get the ideas and we have a process called pitch. So all these ideas feeding to lack of a better time a funnel where we have this enterprise innovation groups actually scan through the I. D. S and then can identify what things we can use and where we want to put our innovation investments. Right. So there is, ah, set off funnel requirements and gates we go through to identify Hey, this is where we want to do. And how we do is that Fanny Me is a lot more design thinking shop, right? So customer is at the center of everything. So anything we do, we will have some sort of research first, right with the customers and then how that might push the needle such that it can reach different boundaries through innovation. Right? So our processes cultivated ideas from inside. Also, look at what is happening with the trends. We have a strong strategy group. They're gonna look at this and our innovation team is always on the hunt for Hey, what is happening in industry in the cutting edge, How do you bring these three dimensions and then come up with a bunch of ideas? And then we have a funnel process where we identified what moves? What's this? What stays? Because there are other things that are at play. Is this innovation ready for the market? Now? Does it have to wait that sort of There are so many dimensions that going to that. But we have a structure process, and we have AH, dedicated team who can manage is that yet uses the creativity of the employees to be able to participate in animation. I mean, that's how we have a wall this process from. Think of the possibilities, too focused innovation. >>I think there's one extra point as well, like when it comes to technology side of that, it's it's creating a safe place for people to experiment, right, So we have a sandbox, the environment that we've created, an Amazon there in eight of us, and what we're doing is we're actually releasing some of the controls. I mean, obviously there's security and compliance, but released some of the controls and and just put a few guard rails in place so that people can experiment safely and not impact our firm, you know, in a very negative way. So >>talk about your employees and how they received this, this major transformation, and how are you receiving feedback in terms of their productivity in their engagement with the process? Dave. >>So you know, I would say this. There are lots of different types of employees, right? And like I said earlier, we also have as we're building the new, we also have to continue to support what we're running. So So what we've done is we've actually rolled out on South. We'll talk about it more detail because his team rolled it out. But, you know, but we have rolled out some training. You know, we've created a change management process, an organization right. Working with our human resource is so that we can up left, you know, sort of skills. And that's what I think. What's important is you're not going to be able to find the people out there to do everything that you need to do right. What's really important is creating those opportunities to carry the people that you have in your organization along with you for the journey as they learn you benefit right as an organization. So but salty should talk about some >>of the training. Yeah, so I take your question in two parts one. Is that how the employee base is taking the message of this district transformation or don't have right again? We have a compelling vision and mission like people that fanny man, they what? They take pride in fulfilling the mission. That's that's the 1st 1 along the way, when we crafted our message around why we're doing this. That is a lot more compelling. It is meaningful for our customers, our employees, right? So I think the messaging has been very important. Then, when you look at the things that we're trying to do, our cutting edge right from the employee point, if you it is a lot of excitement, because that keeps them at the cutting edge of what is happening in the world that makes them more marketable, right? Naturally, people are excited about it, but like any transformation, right? There will be camps off who will come across the change car up front like they're catalyst. Right? And then there are some in the middle and summer can a lagging right? But when we look at the entire gambit off the employee base, majority off them are. Hey, we are on board with this. We want to do it. We want to learn, How do we get there? And the company has done several different things to help the employees through this kind of knowledge cover I would call rather than the change career. We have a whole bunch of training plans that we have laid out. People have been wall until early taking. I mean, maybe a classroom training, maybe a self, sir. Uh, type off, download this particular module and then kind of read upon it and then also provide them to practice them with the sandbox. Right? So all these things have been done. I think one challenge we had actually facing now is that we can train them up pretty easily if we haven't put them in a place to practice it. Then it kind of fades away. So we're now kind of trying to see. Okay, let's identify groups off people. Give them a tool where they can assess for them their own self. What I wanted to learn such that I can become that and then be eligible for doing that right so that now they learn. And then they're put in a role on a project that they can actually practice on. So we are in that posture of that right now. So I think, but employee base is really excited about this, >>So I want to. I want to end where we started where Sati described the myriad changes that are taking place in your industry and getting back to your your cause, which is helping the customer buy a home, get it, get it, get it more easily, qualify for a loan. Can you think about the customer experience of the home buying process 3 to 5 10 years from now? And how it will be different as Fannie Mae embarks on this on this cloud journey. Do you want to start David? Just think. Look into your crystal ball >>and it's great. I wish I had a crystal ball. That would be great, but but you know. Look, we're making significant advancements, you know, working, working with our customers, taking that customer first mentality. And, ah, and and, you know, the mortgage industry itself is right for a change. I mean, you know, and and we're in a good position to really help and drive a lot of that. So my expectation, if I were to look out, I would expect to see a world where you know that borrower experience gets a lot better. I mean, one of the things we've learned to our research is that you know what is it? 40% of people actually cry as they're going through the mortgage experience, >>and they're not tears of joy. No, it's actually, you >>know, tougher to get into a tougher to think through the mortgage process, you know, and really take that big leap than it is to, you know, our Cielo tells us all the time than it is to actually apply for college. It z, it's often on bigger life event our goal. How do we make that simpler? How do we make people have a much more pleasant experience? Right? Waken do that with our data. We can make sure that they don't have to fill out those amazing forms. Heck, find the information. Sometimes they don't have it. You know, we're in a better position, right? You know, really? Get Teoh. You know, I can't promise a single click experience, but we're all gonna try to aspire to that, because that's what the customers out there with their cell phones and their technology or used to right. So we've got to get at least somewhere close to being there. >>So in the bottle, it expedient sight. I think we can even now see one tap market. How do we get them right? I think that's probably not too far. It's probably within two or three years. That's if I were to think about that. But if you want to think about 5 to 6 years, 10 years, if I am an individual driving by a home and then take your phone and say, Hey, can I buy this home? That should be able to tell you this is your lender and then go. That's right. And again from Fannie Mae, a point if you re help the lenders and they helped the borrowers threat. So through this transformation, what we're doing is that set up an engine that can be nimble, that can move fast. That runs with the low investment so that if we were to pivot, do things testing, learn and then change your game. We are fully in the position to be able to do that, right So and however fast, fast, you can experiment, those many different ideas will come out, and then some of them will reap fruit. And all of these for two things, like for our customers. How do we benefit our company, Fannie Mae? And how do we move the needle in industry? I think these are the three things that we want to achieve through this transformation. And we're building an engine to be able to do those types of things. I wish I could say this is one thing we would do. That's not what we're trying to do. Being a position where we can move quickly, we can lead industry. We can set the standard and then make good for the good for the American house. So that's all stories. >>Exciting times. Thank you so much. Both for coming on the Cube. Satti on Dave. Thank you. I'm Rebecca night. Stay tuned for more of the cubes. Live coverage of the Ex Censure Executive Summit coming up in just a little bit.

>>Live from Orlando, Florida It's the cue covering Microsoft Ignite Brought to you by Cohee City. >>Hello, everyone. And welcome to the Cubes live coverage of Microsoft Ignite. We're kicking off three days of live coverage here at the Orange County Civic Center Convention Center. Sorry, I'm your host. Rebecca Knight coasting along side of stew Minutemen. Do we have so much to cover? So many new products? So many new strategies. New Emphasis Head knew new buzzwords, tech intensity and democratization. Uh, you were here. You were in the hub. You heard Satya Nadella live on the main stage. I'd like to just get your initial impressions and initial thoughts of of his keynote, and we're gonna dig into all of >>them. Rebecca, it's great to be here second year doing it with you here. Your background, really on business. Productivity. Really enjoyed doing this one within you. Chew said Walter Wall. Three days of covered The place is just buzzing with activity. 26,000 in attendance for a show that's been called soft night for I think it's been about six years. It was tech head back in the day we talked about last year, you know, this was originally, you know, the windows and office. You know, administrators show and has really matured over time. Trust was a big topic of conversation. And you know what? With my general thing, they rearrange some of the logistics of it. I actually, you know, usually I'm sitting with the press and the analyst upfront. Actually, you know, when in the shoes of the attending here, which meant I stood in our for almost two hours waiting to be one of the 3000 out of 26,000 to go get a seat and communication was a little bit weird and we kind of move in. But I did get a nice seat. Such intel was up on front. I thought they covered a lot of ground and it ran well, logistically. For those of us that were watching from the main stage, I heard remotely, you know, as sometimes happens, you know, Internet or things that there could be some calendars. It is with all of these cloud shows that we go to you just get this barrage of so many different things, everything from you know, really interesting as your arc, which we're gonna spend a bunch of time talking about through all of the latest. Aye. Aye. And the power things that they're going on all the way down through dynamics and teams and devices and EJ and on DDE down to the browser and the search engine. So so many different things. You know, Microsoft, Of course. You know, one of the store words in technology, but clearly laying out Ah, lot of announcements, books worth of you work of all of the announcement that go out there. And you know, general, take that I get for most people is they definitely are impressed so far. And they're gonna spend all week digging in tow, learn more, >>So we're gonna We're gonna dig in right now. But But I also just want to say that setting the scene doll, this is October 25th. Microsoft was given the jet, announced it was announced it was given the jet I contract. This was a big surprise. And this is Microsoft, which is a distant number two to AWS. Did Sathya seem on a high from that still or what is your impression? >>Unless I missed it, I didn't catch anything about it. Absolutely. I've talked to some people around the show, Talk to somebody appears in the media and analyst community. That air talking about it absolutely was a big surprise. Anybody that's interested in this go check out John. For years written down on this, David Lantz has done a lot of analysis. We've been looking at this quite a bit. Amazon really had one this deal, and it went through courts and Oracle, you know, pushed against really hard to try to make for the Amazon, did it. General Mattis writes about it in his book that I think you came out recently, You know, from the president down to make sure that Amazon did not get this politics entry. The high level is it's $10 billion over 10 years, but when you look into it, number one is the minimum purchase. In the first years only like a 1,000,000. It's expected to be more like 202 150 million in the 1st 2 years, but it is a big deal. Microsoft really spent a lot of time the last couple of years going deeper into public sector, making sure they've got the governance and the compliance sergeant is Kino talked about the 54 azure regions and what they're doing. They're still work that Microsoft needs to do. They don't have the Level six security yet which Amazon does that They've been given less than a year to get that, to make sure that they can fulfill this. But a lot of pieces and there will be lots of other government contracts, but lots of intrigue there. I think it goes back to thing we mentioned trust. Can the government trust that Microsoft will allow them to do all they need to do? There's a lot of office 3 65 in the government. And, of course, Microsoft does. This other thing. There's a bunch of in the government is they use Oracle. We know that Oracle and Amazon are still butting heads. You don't expect to see Oracle on Amazon, you know, shaking hands on stage any time soon. At Oracle OpenWorld This year you saw Oracle allowing their solution to run on Azure in friendly licensing terms because you can run Oracle on AWS. But oracles gonna do everything you can to make sure that the licensing terms her onerous in that environment, they want you to do it on their infrastructure or on their environment and really opening up to Azure. Now, the government contrast that they can run it there. And for me, that trust resident. When I talk to the partner ecosystem, there definitely is some concern about Amazon's power in the marketplace and what they will do. Amazon, to their credit, has a big ecosystem there. Marketplace is phenomenal and they are open and give customers choice. But obviously, just like if you serve on amazon dot com, if it's a Amazon Basics or Amazon provider solution, they're probably going toe move that them in that way. Every company does this for, you know, Google makes sure that they optimize for their ads and everything like that. Microsoft in the past was known for optimizing their licensing revenue. Today they're more trusted. They're more open. I think Santa leaves that on the from the top. But you know so many things that they need to dig into. So Jet I not something I'd expect to spend a lot of time on this week, But thank you for bringing it up happily undertone. Because what the moral of the stories today cloud is AWS and Azure are the clear leaders. Yes, AWS still has a sizable lead. A measure is slowly eating into that lead. But as a as a user, as an enterprise, as any company out there, you can't be wrong by choosing either of those solutions. And one of Microsoft's embracing is that multi cloud environment going back to art will talk about how do I live in that multi cloud world? Eight of us still leads with their hybrid solution and use eight of us don't use other clouds. Azure is more embracing of a multi cloud world. >>So so let's talk about that now. But I just in terms of the trust at a time where there is such deep and tremendous skepticism, a big tech in government right now, the trust really is a crucial element. We're gonna We're gonna talk about that today with a lot of our guests two developments that you're most interested in. And I really want to dig into here as your ark. We're gonna start azure Arkin Power platform. But as your brand new today, uh, your thoughts, your impressions? >>Yes. So, as your ark, I can automate update with my policies across any environment, not just azure. So where I look at this and say, OK, do I manage azure with this? Absolutely. It's got kubernetes in it, so I should be able to move things around if need be. My my data center. In what? I'm putting their all of the azure stack and EJ hub all of these azure pieces in my data center. Can I manage that with us? Of course. The question is, what about if I'm using Google? Service is if I'm using A W S service is in the demo that they ran. They showed 80 was and said, Oh, we can manage that I said, That's great that they can. But will customers actually do that? There's a certain skill set. There's no way a program for it. And of course, AWS has its tooling that everybody uses their. So we've been trying to get that single pane of glass of, you know, for more than my entire career. And the techies I talked to is that pane of glass is nothing but P a. I n is the joke we always make. So it is great that they've done this by the way it's on Lee in Tech preview right now, so it's great that they have this. We've been saying for years that Microsoft, if you talk about hybrid, has the lead when you talk about thought, leadership and solutions. But really, that hybrid solution is azure and data center, and I've got my APs that live everywhere. So 03 65 or in my data center in there. What we're really hearing here is a comprehensive reimagining of hybrid, as we've been talking about it more recently is I really blur the lines between my data center, the public cloud and even the edge. So it's great to see Microsoft do this. I got a lot of friends that are at the V M World Europe Show in Barcelona this week. We've been talking about this in the V M where environment for last couple of years of the VM, where on AWS via where on Azure V M wear on Google, Oracle, IBM and more. So it's great that Microsoft has stepped up here. In some ways. It makes me really think how I thought about Microsoft because Microsoft has been, in my mind a leader and hybrid and realizing that they need to really, really make a significant change to the portfolio. To really deliver on the promise of hybrid and multi My definition of when we will have a true multi con solution is when the value that extract from the system is greater than the sum of the parts. And absolutely that's not where we are today. Microsoft has a lot of pieces. Absolutely. They have a right to be one of the leaders pulling those pieces together. And really, it is a place where you see Microsoft and IBM, where partnering, but also all going to be that leader in the management of my cloud native environment. And we're gonna spend a lot of time this week talking to the developers because that's another area that sought to spend a lot of time. Those two point 6,000,000 citizen developers, as he calls them. I'm sure you must have really loved Rebecca. 61% of job openings for developers are outside of the tech sector. >>Well, exactly, and that is that is such a huge point and that's what Sathya said. That's always been our sweet spot wear for the citizen developers and we want to democratize computing. We want to make sure that you can bring your best self to work and be your most productive self to work in. So many of the tools that they have introduced today are all about creativity, collaboration, time management, productivity, individual time productivity as well as team productivity. So there's a lot of exciting developments today. Let's talk about power platform. Speaking of the parts and pieces What what does it do? What most interests you and excites you about power platform >>boy. So you know, first, the last thing. The citizen developers. It's funny when most people do, you know, where do I start? And I started to excel. And of course, Microsoft is probably the company that most people I'm old enough now that I remember, you know, using the spreadsheets before Excel was the leader that it was there. But the power platform, The thing I've been looking at is way were here a year ago. There was no power platform. Did we talk a lot about a I Absolutely. We talk about data warehousing and business intelligence and all of these things. So I'm trying to understand how much of This is just the new umbrella. Platt, the new umbrella messaging around it and how much there's new products. I talked to a couple people that dig in straight here. I talked to a couple of Microsoft Mbps. Which way? There are lots of them here. I haven't mentioned it, Rebecca already. But the community at the show is excellent. It is welcoming. It is engaging. Diversity is front and center at this show and Microsoft Great kudos for that because it ties into that citizen developers. But when you talk about the power platform, it's about enabling the citizen developers. So a few announcements in their power automate is really there are p a solution. We've got power virtual agents, which is understanding natural language and conversations. Such actually did a cute little thing. He went toe like universal and fought the demi Gorgon from stranger things. Stranger things, fan. I thought it was really cute and everything. But, he explained, he's like, Okay, here's you know it's understanding my name and saying, Get back to me. It's understanding the movements that I'm doing and turning that into what what's happening so way. Understand that we're still relatively early into gaining the full benefits out of a I hear. But there's a lot of tooling, and from what the people I've talked to is the power platform absolutely is much more than just a rebranding. There are acquisitions that have come in. There are software launches and you know, Microsoft in the agile, continuously shipping code mode that everybody is in these days, you know, is going through a lot of veneration. So I believe that you know that the platform was announced back in the spring, and something that I've seen with Microsoft and many companies like Cisco, that air going heavily of software, a platform of software, actually could be a unifying factor forcing function between all of these groups. So rather than saying, Oh my gosh, Microsoft, you've got, you know, 1000 different software packages that I would by no, no, that's not the way you think about it. You know, they don't come on a CD or disk anymore. Instead, it's there's something that I plug into on it, cloud enabled. It's able to be, you know, purchase interruptible model. So we've got number of guests that that power platform absolutely is. You know, hearing good things in the ecosystem and absolutely, you know, you know, it is a strength of Microsoft when you talk about the leverage and use of data in a business environment, on is their legacy. >>And this is a company that is going from strength to strength right now, really firing on all four senators cylinders, azure office, 3 65 windows. We haven't talked about fortnight and the other gaming elements here, but in terms of, um, usage issues, I know there were There were a couple of hiccups last week. >>Yeah, so you know, outages or something. People are definitely worried about the cloud. There was reported last week that there was some availability and performance issues. They were throttling things back. They were saying you couldn't scale and we're like, Wait, you know, infinite compute, infinite storage on demand. That's what we need. And from some of the things I heard from the community, the gaming platforms actually were impacting this and actually gaming that run across both AWS and azure. So it definitely is a little bit of a red flag. You know, your azure, your your your microsoft, and you want to talk about that you are a leader in the face. You can trust them. We're gonna keep you going. Well, you know, cos have spent decades making sure that their data centers have the up time and reliability that we need. You know, when I talk to the big cloud providers, they have some of the same conversation we were having back in the infrastructure world, You know, 15 years ago about data availability and data loss, You know? D u D E l date on availability and data loss. It was a four letter word. You can't have it. You would have war rooms and make for the things you know. Don't go down so little bit of a red flag especially, you know, will there be any contesting of the government deal? You don't want something sitting there saying Oh, hey, wait. I have a critical you know d o d operation. That needs to happen. Wait, We can't speak out when we need it. You know that. That's a no No. >>Right. Exactly. Well, this is these air, all the topics we're going to get into and then some over the next three days, it's gonna be an action packed show. I'm looking forward to it. A lot of great guests to thanks >>so much. I can't wait. I >>hope you'll stay tuned for more of the cubes. Live coverage of Microsoft IC night coming up in just a little bit.

(upbeat music) >> Live from Orlando, Florida, it's theCUBE covering Microsoft Ignite. Brought to you by Cohesity and theCUBE's ecosystem partners. >> Welcome everyone to day one of theCUBE's live coverage of Microsoft Ignite here at the Orange County Civic Center. I'm here -- I'm Rebecca Knight -- my cohost, Stu Miniman. This is the first CUBE show ever at Microsoft. It's unbelievable! >> Yeah, Rebecca, it's a little surprising. You know, we started back in 2010 doing these events, we've done hundreds of shows, we've done thousands of interviews, we've had lots of Microsoft people, but the first time at a Microsoft show, there's plenty of people I've bumped into that don't know theCUBE. 30,000 people in attendance here, so really excited to dig into this community and ecosystem and show 'em what it's all about. >> We're making history. So today, we had Satya Nadella up there on the main stage. What is your big takeaway from his keynote, Stu? >> Yeah, so Rebecca, Satya Nadella, obviously has really helped turn around Microsoft's -- really, the way people think about Microsoft. 'Cause it's interesting, when I look at the people we're going to be talking this week, lots of them have been with Microsoft ten years, twenty years, or more, so. Microsoft is one of those stalwarts in technology, they are obviously critical in a lot of environments. Everything from the latest Windows 2019 got announced today, there's excitement there, but they're playing in the cloud, they're playing all over the environment but Satya has brought new energy, some change to the culture I know you're going to want to talk about, and really came out talking about the vision for the future and what was interesting to me compared to some other big tech shows that I go to, it wasn't product focused, it wasn't on the new widget. They touched on things like Azure and, of course, AI, and some future things but it was really business productivity at its core is what I think about. If you think about Microsoft, I mean, we've all used the Office Suite and watched that go from Microsoft getting into the apps to being the main apps to pushing people to Office 365, so. I hear things about like business productivity and when they put in the Intelligent Cloud and the Intelligent Edge, it wasn't product categories they went into, but really speaking to broader terms to the business, so. It was interesting and a little bit different from what I would hear at say the companies you compare them to. The Amazons of the world, the VMwares of the world. So, a slightly different messaging. >> I couldn't agree with you more, and just talking about the different kind of energy that Nadella brings to this company. Microsoft, as you said, a lot of the people here are veterans; they've been here ten or twenty years. Microsoft is pushing on forty-five years old. This is a company that's entering middle age in an industry that is all about the new, the fresh, the buzzy. And so, he really does bring that kind of fresh outlook to it. His catchword of the day is "tech intensity" and this is what he talked about how we not only need to be adopting the latest and greatest technology, we also need to be building it. Seems like he was really doubling down on this idea that industry leaders need to be pushing boundaries in whatever industry they may be in. >> And I did like that, 'cause it's interesting. The easy compare, and I hope I don't do it too much, but you look at Amazon: Amazon talks to those builders. That's like the core, what you say when you go to the airports that have their branding, it's all about the builders, so. To the cloud native piece, I want the developer, developer, developer - and Microsoft knows a thing about developers too - but they bridge that gap. When we first talked about the world hybrid cloud, Microsoft's one of the first companies that comes to mind when I think about because they have such a base in the legacy world, they're modernizing that world, and they are helping to build that next generation space. Microsoft isn't one to necessarily chase the new shiny. They've done lots of big acquisitions, I mean, you talk developers, they bought GitHub. That's the center, it's like, if you're a developer, "What's your resume?" "Oh, well just check me out on GitHub, see how many stars I have." That kind of stuff. So that's where Microsoft lives and as you said, right, "tech intensity" - that balance between what are you buying and what are you build. I like that commentary from Satya. What I liked about him is saying, "Look, there are things that have been commoditized out there and you probably shouldn't waste your time building." I always tell companies, "Look, there's things that you suck at, or things that other people do way better. Let them do that. Why are you spending your cycles reinventing the wheel?" The thing I didn't love as much is he was like, "Well, you got to be careful who you partner with, you don't want to necessarily partner with somebody that's going to be your competitor." Come on. When I talked to a couple users coming out and I'm like, "What'd you think of that?" And they're like, "Look, here's the thing: love Microsoft, use Microsoft, but we use Amazon, we're going to use both, it's a multi-cloud world." Lots of SAS, multiple public clouds, and I want to hear about how Microsoft lives in that world. They can't not partner with Amazon. Matter of fact, I was reading one of the press releases. Oh, Skype will be available on the new Amazon Echo Show. So, it's the world of co-opetition. You've got, look around this ecosystem: everybody -- you partner where you can, you try to overlook the places where you fight, and you got to help the customers, and I think Microsoft does a good job, but you can't just say, "Let's not talk about Amazon or AWS because oh, that's going to be competitive." You know, really. >> And also, it's sort of, what he says and what he does, which are two different things. Because he also brought up the CEO of Adobe and the CEO of SAP up there to talk about this new Open Data Initiative. He talked - all three CEOS - talked at length about this small data problem that companies have, which is that they have all of this vast amount of digital information that they are creating and storing and manipulating, but it's all kept in silos. And so, they know a lot, but this end isn't talking to this end. So they want to change that, they're setting out to change it. >> You know, three companies that, if you were to tell me, okay, who's helping and doing well with digital transformation, and understands my data? Well, you couldn't do much better than starting with Microsoft, Adobe, and SAP. Absolutely, great suite. Adobe and SAP both made acquisitions in this phase, they understand the data. And I have to give huge kudos to Microsoft on how they're doing in open source. I've got enough years in the industry that I think back to when things like Linux were going to help try to topple Microsoft. And you see, Microsoft embracing almost half of the workloads in Azure or Linux. They had announcements, they were talking up on stage about partnering with Red Hat. And Microsoft, working with developers, working in the cloud, open source is critically important there. Talk about AI, open source has to be a key piece of these. And the Open Data Initiative: I like what I saw. Big names, there were definitely some surprise out of it. It was kind of the biggest news out of Satya Nadella's keynote this morning. The thing I will drop back on and say okay, we've all seen some of these announcements out there. Would've loved to see a customer or an example. Satya Nadella did a good talking about some of the IOT solutions that are going to get to AI, and I think it was a utility that was like, here they have, they're trialing it out and everything. So how do we measure the success of this? It's extensible and they said absolutely, other partners and other customers can tie into this. But -- is this a year, two years, how long before this becomes reality? Hopefully, three years from now, we look back and say we were there with something really important to help customers own and take their data and take it to the next level, but as of right now, it's a good move by some very strong players. And, of course, Microsoft partnership's key to what they're doing. >> They've identified the problem and that's what today was about. Sort of, we know this is a problem, we're going to work on this together. And I think it's also, talking about the open source angle which you brought up, it really is emblematic of this kinder, gentler Microsoft, which is all about inclusivity, all about helping everyone do better at their job and in their lives. >> Rebecca, I love your take. You talk about diversity, you talk about the culture of change, I mean. Satya leading from the top. We covered a few years ago, he put his foot in his mouth at a Grace Hopper event. But very much a lot of women involved, we're going to have a number of women executives on the program here. What do you see from Microsoft in this space? >> So the incident you're referring to is when he was asked about how a woman should ask for a raise and he basically said, "Oh, you really shouldn't ask - just do your best work and the rewards will come to you." Well, any woman in any industry, regardless of technology, knows that's just not the way it works. And I think, particularly now, he can look back and say, "Oh my gosh, that was a gaff." But even then, he recognized it and he apologized immediately and said, "No, things have got to change and I need to be part of the solution." So he does have a lot of initiatives around diversity in tech and helping women reach leadership positions. In terms of the cultural transformation that you reference at the very beginning of the show, his book is called Hit Refresh and it really is all about the growth mindset. Which is the work that Carol Dweck has done, and Angela Duckworth too. So this is really about this constant learning, this constant curiosity, this constant "don't be a know it all, be a learn it all," be so willing to collaborate and hear other perspectives and don't dismiss other people's perspective out of hand. And that's really, that's the way they want to operate as a company and as a culture. And then they also want to push that out into how its products behave in the workplace and how they help teams work together. >> Yeah, and that "be a learn it all, not a know it all," not only resonates with me but it part of the mission of what we do here on theCUBE. Look, my first Microsoft show. Trust me, I've been studying hard on this. I mean, I've known Microsoft since my earliest days working in the tech community and the like, but first time coming in. We always know that people need to learn, they want to learn, and that's one of the things that we hope our three days of coverage is going to help people understand, get a taste for all the things that are going on in the show. There are hundreds if not thousands of sessions that are all recorded. How do I choose what to go dig into, what announcements mean the most, what am I going to want to dig into? So that's one of the things that I was excited to hear and excited to help bring to our community here. >> Right, so we're going to help our viewers do that and we're going to learn a lot from our great lineup of guests. So Stu, it's really exciting to be here. We're going to kick off three days of coverage in just a little bit. I'm Rebecca Knight for Stu Miniman. Stay tuned to theCUBE here at Microsoft Ignite.

(upbeat electronic music) >> Live from San Jose, in the heart of Silicon Valley, it's theCUBE. Covering Dataworks Summit 2018, brought to you by Hortonworks. (electronic whooshing) >> Welcome back to theCUBE's live coverage of Dataworks, here in San Jose, California. I'm your host, Rebecca Knight, along with my co-host, James Kobielus. We have two guests in this segment, we have Steve Wooledge, he is the VP of Product Marketing at Arcadia Data, and Satya Ramachandran, who is the VP of Engineering at Neustar. Thanks so much for coming on theCUBE. >> Our pleasure and thank you. >> So let's start out by setting the scene for our viewers. Tell us a little bit about what Arcadia Data does. >> Arcadia Data is focused on getting business value from these modern scale-out architectures, like Hadoop, and the Cloud. We started in 2012 to solve the problem of how do we get value into the hands of the business analysts that understand a little bit more about the business, in addition to empowering the data scientists to deploy their models and value to a much broader audience. So I think that's been, in some ways, the last mile of value that people need to get out of Hadoop and data lakes, is to get it into the hands of the business. So that's what we're focused on. >> And start seeing the value, as you said. >> Yeah, seeing is believing, a picture is a thousand words, all those good things. And what's really emerging, I think, is companies are realizing that traditional BI technology won't solve the scale and user concurrency issues, because architecturally, big data's different, right? We're on the scale-out, MPP architectures now, like Hadoop, the data complexity and variety has changed, but the BI tools are still the same, and you pull the data out of the system to put it into some little micro cube to do some analysis. Companies want to go after all the data, and view the analysis across a much broader set, and that's really what we enable. >> I want to hear about the relationship between your two companies, but Satya, tell us a little about Neustar, what you do. >> Neustar is an information services company, we are built around identity. We are the premiere identity provider, the most authoritative identity provider for the US. And we built a whole bunch of services around that identity platform. I am part of the marketing solutions group, and I head the analytics engineering for marketing solutions. The product that I work on helps marketers do their annual planning, as well as their campaign or tactical planning, so that they can fine tune their campaigns on an ongoing basis. >> So how do you use Arcadia Data's primary product? >> So we are a predictive analytics platform, the reporting solution, we use Arcadia for the reporting part of it. So we have multi terabytes of advertising data in our values, and so we use Arcadia to provide fast taxes to our customers, and also very granular and explorative analysis of this data. High (mumbles) and explorative analysis of this data. >> So you say you help your customers with their marketing campaigns, so are you doing predictive analytics? And are you during churn analysis and so forth? And how does Arcadia fit into all of that? >> So we get data and then they build an activation model, which tells how the marketing spent corresponds to the revenue. We not only do historical analysis, we also do predictive, in the sense that the marketers frequently done what-if analysis, saying that, what if I moved my budget from page search to TV? And how does it affect the revenue? So all of this modeling is built by Neustar, the modeling platform is built by the Neustar, but the last mile of taking these reports and providing this explorative analysis of the results, that is provided by the reporting solution, which is Arcadia. >> Well, I mean, the thing about data analytics, is that it really is going to revolutionize marketing. That famous marketing adage of, I know my advertising works, I just don't know which half, and now we're really going to be able to figure out which half. Can you talk a little bit about return on investment and what your clients see? >> Sure, we've got some major Fortune 500 companies that have said publicly that they've realized over a billion dollars of incremental value. And that could be across both marketing analytics, and how we better treat our messaging, our brand, to reach our intended audience. There's things like supply chain and being able to more realtime analyze what-if analysis for different routes, it's things like cyber security and stopping fraud and waste and things like that at a much grander scale than what was really possible in the past. >> So we're here at Dataworks and it's the Hortonworks show. Give us a sense of the degree of your engagement or partnership with Hortonworks and participation in their partner ecosystem. >> Yeah, absolutely. Hortonworks is one of our key partners, and what we did that's different architecturally, is we built our BI server directly into the data platforms. So what I mean by that is, we take the concept of a BI server, we install it and run it on the data nodes of Hortonworks Data Platform. We inherit the security directly out of systems like Apache Ranger, so that all that administration and scale is done at Hadoop economics, if you will, and it leverages the things that are already in place. So that has huge advantages both in terms of scale, but also simplicity, and then you get the performance, the concurrency that companies need to deploy out to like, 5,000 users directly on that Hadoop cluster. So, Hortonworks is a fantastic partner for us and a large number of our customers run on Hortonworks, as well as other platforms, such as Amazon Web Services, where Satya's got his system deployed. >> At the show they announced Hortonworks Data Platform 3.0. There's containerization there, there's updates to Hive to enable it to be more of a realtime analytics, and also a data warehousing engine. In Arcadia Data, do you follow their product enhancements, in terms of your own product roadmap with any specific, fixed cycle? Are you going to be leveraging the new features in HDP 3.0 going forward to add value to your customers' ability to do interactive analysis of this data in close to realtime? >> Sure, yeah, no, because we're a native-- >> 'Cause marketing campaigns are often in realtime increasingly, especially when you're using, you know, you got a completely digital business. >> Yeah, absolutely. So we benefit from the innovations happening within the Hortonworks Data Platform. So, because we're a native BI tool that runs directly within that system, you know, with changes in Hive, or different things within HDFS, in terms of performance or compression and things like that, our customers generally benefit from that directly, so yeah. >> Satya, going forward, what are some of the problems that you want to solve for your clients? What is their biggest pain points and where do you see Neustar? >> So, data is the new island, right? So, marketers, also for them now, data is the biggest, is what they're going after. They want faster analysis, they want to be able to get to insights as fast as they can, and they want to obviously get, work on as large amount of data as possible. The variety of sources is becoming higher and higher and higher, in terms of marketing. There used to be a few channels in '70s and '80s, and '90s kind of increased, now you have like, hundreds of channels, if not thousands of channels. And they want visibility across all of that. It's the ability to work across this variety of data, increasing volume at a very high speed. Those are high level challenges that we have at Neustar. >> Great. >> So the difference, marketing attribution analysis you say is one of the core applications of your solution portfolio. How is that more challenging now than it had been in the past? We have far more marketing channels, digital and so forth, then how does the state-of-the-art of marketing attribution analysis, how is it changing to address this multiplicity of channels and media for advertising and for influencing the customer on social media and so forth? And then, you know, can you give us a sense for then, what are the necessary analytical tools needed for that? We often hear about a social graph analysis or semantic analysis, or for behavioral analytics and so forth, all of this makes it very challenging. How can you determine exactly what influences a customer now in this day and age, where, you think, you know, Twitter is an influencer over the conversation. How can you nail that down to specific, you know, KPIs or specific things to track? >> So I think, from our, like you pointed out, the variety is increasing, right? And I think the marketers now have a lot more options than what they have, and that that's a blessing, and it's also a curse. Because then I don't know where I'm going to move my marketing spending to. So, attribution right now, is still sitting at the headquarters, it's kind of sitting at a very high level and it is answering questions. Like we said, with the Fortune 100 companies, it's still answering questions to the CMOs, right? Where attribution will take us, next step is to then lower down, where it's able to answer the regional headquarters on what needs to happen, and more importantly, on every store, I'm able to then answer and tailor my attribution model to a particular store. Let's take Ford for an example, right? Now, instead of the CMO suite, but, if I'm able to go to every dealer, and I'm able to personal my attribution to that particular dealer, then it becomes a lot more useful. The challenge there is it all needs to be connected. Whatever model we are working for the dealer, needs to be connected up to the headquarters. >> Yes, and that personalization, it very much leverages the kind of things that Steve was talking about at Arcadia. Being able to analyze all the data to find those micro, micro, micro segments that can be influenced to varying degrees, so yeah. I like where you're going with this, 'cause it very much relates to the power of distributing federated big data fabrics like Hortonworks' offers. >> And so it's streaming analytics is coming to forward, and it's been talked about for the past longest period of time, but we have real use cases for streaming analytics right now. Similarly, the large volumes of the data volumes is, indeed, becoming a lot more. So both of them are doing a lot more right now. >> Yes. >> Great. >> Well, Satya and Steve, thank you so much for coming on theCUBE, this was really, really fun talking to you. >> Excellent. >> Thanks, it was great to meet you. Thanks for having us. >> I love marketing talk. >> (laughs) It's fun. I'm Rebecca Knight, for James Kobielus, stay tuned to theCUBE, we will have more coming up from our live coverage of Dataworks, just after this. (upbeat electronic music)

(technology music) >> Announcer: Live from Las Vegas, it's theCUBE. Covering VMworld 2017. Brought to you by VMware and it's ecosystem partners. (upbeat music) >> Welcome back to VMworld, we are live on theCUBE, day two of our continuing coverage here. We've had a great day and half so far. I'm Lisa Martin, with my cohost Keith Townsend. We're excited to be joined by two guests from HPE, who are new to theCUBE. We have Leslie Maher, the VP of North American Enterprise Servers and Converged Systems. Welcome to theCUBE. >> Thank you. >> And Satya Vardharajan, Senior Director of Strategic Alliances, from HPE. Welcome to you as well. >> Oh thank you, Lisa. Thanks for inviting us here. >> Absolutely. So guys, let's talk to each of you, Leslie we'll start with you. Tell us about your role, especially in the converged side for HPE, and what you're doing with VMware. >> Great. So, my role at HPE is I'm responsible for enterprise servers and converged systems. What that means is, really our value products. A couple of my key responsibility, one is our HPE Synergy Composable Infrastructure, I'm you've probably heard, people talk about here at the event. We also have converged products around offerings like SAP Hana, and some of the more mission critical servers. So here a lot of the focus has been on Synergy, and our relationship once with VMware, but also solutions around vSan and vCloud Foundation, where Synergy provides some really unique capabilities. >> Yes. And Satya tell us about your role in alliances, and your GTM strategy with VMware. >> Sure, so I manage the VMware Alliance globally, at Hewlett Packard Enterprise, and this is a very strategic relationship for each HPE. We have a long history with VMware, over 15 years. We've had a great run with VMware. And we continue to innovate everyday. My role at HPE is to make sure that we keep the customer trends in our radar as we copartner and innovate together, with VMware. At VMworld 2017, we've got lots of great and exciting announcements. And we're more than happy to share with them as we get to the discussion today. >> Fantastic >> A big question around converged systems, you guys will have the hyper-converged guys on shortly, but converged systems have kind of gotten a bad rap over the past couple of years. Like, "Oh, that's the legacy." But as you mentioned, SAP Hana systems, what's the relationship between converged systems and Vmware? >> To your point, about seven years ago the industry tried to simplify IT operations by doing converged systems. And that was putting together servers, storage, and networking fabric; and putting it all together for our customers. Where the industry has moved to now, is more software defined capabilities, where not just putting those hardware pieces together but enabling them through software. So hyper-converged as one flavor of that, and we're hearing a lot about that here in the conference, and then at HPE, what we did is we innovated around the best of converged and hyper-converged. Put them together into a new category of infrastructure, called composable. Fully software defined, it does compute, storage, and fabric. And the essential idea here is that you can have any combinations of these elements, through a software defined capability. So it really extends the ability of hyper-converge to multiple workloads. We use this term Composable Infrastructure, in addition to supporting through other products we have hyper-converged. That's where we're seeing the market trend. >> So Leslie, that's a unique concept. This composable concept. It sounds a lot like virtualization. How does the two relate? Can I run virtualization on top of these Synergy systems? >> Great questions. Absolutely. In fact one of the key things with hyper-converged or composable, is the ability to really have virtualized workloads. In addition to that, with our composable infrastructure, we let you also run bare metal, as well as containerized workload. So you have a real range of workloads you can run in one set of infrastructure. And so we can support lots of workloads, different kinds of storage in the environment in fabric. So you have a real range of opportunity. >> Let's talk a little bit about composable and your target market. What is the key message? A lot of, sounds like, flexibility and agility within the technology. What's the key message to your VMware customers that are using the VMware software? >> Sue, with customers who are using VMware software, it's the flexibility. For example, with vSan, we've talked a lot about here at the conference, our relationship with VMware. And vSan is the ability to have software defined storage. And what our HP offerings allow you to do, is to have the ability to scale, compute, and storage independently. So giving you this very flexible environment, to grow your capacity. And then you manage it with this virtualized vSan, software defined storage from VMware. Very simple for our customers to really have a simple operations, and really flexible scale; is what these new applications are requiring. >> As you guys have been talking from a VMware and HPE perspective to customers. How are they receiving this message? >> From a customer standpoint it's very clear. They need to move to the hybrid IT model. And that's kind of the mandate that's coming. They see it on the horizon. But they also want to do it in a very cost effective manner. They want to do it in a very scalable, efficient, and automated manner. And that's when customers look to HPE and VMware to solve the problem for them. And that's where our flagship composable platform Synergy comes in to play. Marrying the benefits of Synergy with VMware's Cloud Foundation Software, which is a very seamless and automated way of consuming a software-defined stack. You bring those two together, what you get is industry's first composable platform, that lets you set up your private cloud, in less than minutes. There also gives you the ability to allocate and reallocate. Again, compute, storage, and networking resources independent of each other, at will. Creating this very flexible platform for traditional workloads, cloud native workloads, private cloud workloads. That's what we're hearing from the customers, they want us to step in, solve this problem. But also give them the visibility on top. We were at a partner panel earlier today, and one of the partners got up and said, "Look. This is all fantastic. You're making the right moves, "You're building the right solutions for us, "But help us understand how you're going to build "That uber layer of visibility, "and more detailed predicative analytics. "To help us get the whole picture. "Because I don't want to use third party tools." And those are the frontiers that HPE and VMworld will continue to work on together, and create new solutions for our customers. >> One of the things this morning that Michael Dell mentioned when he was onstage with Pat Gelsinger, was that Dell EMC and VMware where like peanut butter and chocolate. (Satya laughs) Such a good combination. (Leslie laughs) So one year post combination, has that strengthened the HP VMware partnership with this now umbrella under Dell Technologies? In the last minute or so, talk to us about how that's helped you maybe differentiate. >> Yeah, absolutely. Look, right from the beginning, as soon as the acquisition was announced, there was a lot of skepticism. And that was industry wide. Everybody said, "Hey. How is this going to impact "The rest of the ecosystem?" VMware made it a point, and Michael as well, made it a point to come outright and say, "Look. We don't want to mess with the ecosystem. "The neutrality is very important to us." To make VMware not only thrive, survive, all of the above. So we've seen that in the market. We don't see any material change in the relationship with VMware. Just a few proof points I want to throw out there, we are still the largest OEM for VMware from a product perspective. We have over 500,000 customers together, who make demands on running workloads. Our channel overlap is over 80%. All of this continues to be recognized. We won a lot of awards in the past, the last two years, we won the OEM Innovation Award of the Year. Partner of the Year Award. >> I saw it. I think I may have a photo with you. >> Yeah >> To talk about synergy, pun intended. (group laughs) >> No it is. >> It sounds like it's only a strengthening. >> It is strengthening. 'Cause we took it upon ourselves at HPE, as a challenge to say, "Hey, look. "I know there's a new owner. "But this shouldn't materially change your business, "Because there's so much business at stake." And we cannot ignore the customers. The demand for our joint products is stronger than ever. >> Absolutely. Great, you guys. Thank you so much for coming on and sharing what's new, what's going on, and the commitment to customers. Outstanding Leslie and Satya. Thank you so much. You're now in the category of CUBE alumni. >> Alright, thank you so much. >> That's great. >> We look forward to having you back. >> Thank you. >> And for my cohost, Keith Townsend, I am Lisa Martin. You've been watching live continuing coverage by theCUBE of VMworld 2017, day two. Stick around, we'll be right back. (technology music)

joined by satya nadella no tell us what about about your your your thoughts on this event in general you know last year was about Big Data this year it's a little bit more focused a little bit broader focus on the modern enterprise as they say what's your take on kind of >> this event it's a great event on this is my first time here as well and having a chance to even see a couple of panels and just participate i think this notion of a modern enterprise is for real i think that it is re-imagination of what does infrastructure mean what do applications mean inside of the enterprise and we're going through this kak tonic shift which we participate in and so to have a forum like this to >> discuss that was just great so let's dig into that a little bit what you know what makes the what makes the moderate enterprise it's it's certainly a cloud and virtualization you've got the Big Data piece kind of the DevOps model of application development how do you kind of define what all bring to bringing together all these different elements >> what makes a modern enterprise yeah one of the things that I like to sort of make sure we focus on I work on the infrastructure business at Microsoft so >> if you're in the infrastructure business the key thing is to be in touch with the applications and it turns out in our own case today we are building a pretty diverse set of applications both consumer and enterprise so we're building vein which is an applied machine learning application real in building office 365 which is an enterprise focus collaboration communication application we're building dynamics and another enterprise crm ERP in the cloud application and what have you so that diversity of applications makes you rethink what is the infrastructure needed from storage compute as well as the network and so we are building a new operating system for the modern enterprise to be able to deploy these modern applications so that's kind of how I conceptualize I would say there are four major elements to it the first one is it's inside of the data center you have much more of a software driven by descent where you're orchestrating your compute storage and network in support of your applications either at the data center or multi data center scale because there's not a single atom rise that's not using some public cloud provider or another service provider in addition to what they already are virtualizing inside their own private cloud so that is all a software control plane and so we are really thinking about what is the modern operating system that enables you to manage the data center a second dimension would be the what is driven through consumerization of IT I like to describe it as transforming IT to be much more people century so you want end-users to adopt the devices they want and still have access to all their applications and data and yet aighty needs to be able to set compliance and policy so how do you really reimagine that is another dimension big data is something you reference there's not going to be a single application that's not a big data application and so those are the major major teams and the last thing I would say is this DevOps so not only have you built the application but it's even the life cycle around the applications being reimagined how developers and operations professionals come together in support of an ongoing improvement and continuous integration these four megatrends I think constitute a modern enterprise >> infrastructure interesting so let's dig into a little bit about what you mentioned about the use of kind of public cloud infrastructure as well as your internal data center so you've got these hybrid environments they're starting to emerge again pretty much software lead a software led infrastructure is what we're calling it a wiki bond how do you go about actually making it possible for for CIOs and their teams and to actually manage those environments in as efficient way as possible you know making decisions about which applications are deployed in the public cloud which it deployed in your data center how they interact potentially applications that are drawing on data from both spots it's obviously can get very complex so you know Microsoft is one of those public cloud providers with windows so how do you approach that product so >> if you sort of take what you just described which is if you you sort of start with the design point that there will be a public cloud there will be a private cloud and a service provider cloud then how you think about the software control is going to be defined by that design so it's not going to be narrowly defined as bring everything into my data center and I'll help you manage it but it is actually distributed so I think of this is the true fruition of distributed computing and we believe in that so then what are the things that matter first is identity so anything whenever things get distributed the most important thing that brings back things together is actually identity of users and identity for resources so active directory was a great resource for many enterprises in terms of how they came the complexity of the previous generation of client server now we have replumbed and reimagined active directory with Azure Active Directory so this consistency in directories helps IT administrators manage this complexity the next one is virtualization so not only would you be able to virtualize on your private cloud you should be able to move the same work cloud workload which is virtualized to any of these other clouds so you need a degree of guarantee that the performance characteristics of a virtualized workload get maintained across all so that's another thing that with our hyper-v investments and our add your investments we are in a making sure that happens the other one would be management so with if you can be sitting on the system center management console in the orchestrator and looking at a workload which could be in fact in 11 of these clouds or in fact the tears of a single app could be split which is the front end is on azure the back end is back in on premise and so that's also very very important to have a management tier which is the control plane that allows you to manage this complexity and lastly it's the consistency of the application platform Excel so if you're building and development you never want to be in the state where you build a great app but you can never check out so if you build it in the public cloud in the case of azure you should be able to take it and run it on a private cloud or on a service provider so these four things are on identity management virtualization and application platform I think is the core investment you've got to make to help enterprises truly adopt the cloud while you know it's >> complex but you gotta tame the complexity and then of course be what you're talking about it really is a lot of data being generated companies of course want to want to start taking an end of that data they want to analyze it they want to actually take those insights and turn them into either applications or perhaps convey them to executives and others in terms of visualization and of course one of those underlying platforms is to do talk about Microsoft's approach to Hadoop I know you're working with Hortonworks you actually kind of discontinued working on your own Big Data technology when you realize I think that you know who Duke was gonna is going to become the de facto standard so talk about how you're making it possible to bring the dip into this environment where more and more companies are looking to ring that it may be as a big data hub kind of store a lot of data and then feeds out to applications different workloads what is your approach to actually making that I guess enterprise ready yep and making it easy to get it get started and then term you know maybe science projects into really production whether the quantity I >> mean this notion of being able to take data and convert it into insights in support of enterprise goals is sort of the holy grail of this moment and so one of the things that we are actively doing is to bring a lot of the traditional value we've always had if you think about the momentum we have with our self-service bi capabilities on the edge of data which is Excel SharePoint sequel analysis services is where all data goes to in order to be able to drive in sites within and you know with it with end users because at the end of the day humans will be involved to be able to drive inside out of all of this data so now the question is how do we take that edge loop and connected with the information production which is upstream and that is where we are completing the story with having HD inside haven't even a relational interface on top of HT insight for in-memory ad-hoc query analysis like a data warehouse on top of it which i think the Hadoop community itself is adopting which is a sequel interface on Hadoop is probably one of the more talked about things nowadays and so this notion of having a complete data platform everything from MapReduce to stream processing to sequel like query interactively and then empowering end-users and workflows with data around their users which share for in Excel where we've invested in things like a power pivot and Power View which are actually powerful in-memory databases in fact I would say the most powerful in-memory database now is power view inside of Excel from where you can issue a sequel I mean basically a hive query to HD inside and populate millions of rows in a tabular column form that you're very familiar with we think that that democratization of big data is going to be very very important to acceptance of it as you said it from science projects or just being in the data science department to bring ubiquitous so we've only got time for >> one more question so just love to get your kind of future outlook what are some of the key priorities for you and your group over the next day 6 to 12 >> months I mean the key thing for us is really bootstrapping our cloud business we've got some fantastic traction with office 365 it's really doing very well in the q3 earnings we talked about how we have known a run rate basis a billion dollars in revenue going to office 365 and many customers who are to office 365 never bought an exchange server from so we're even it's not even zero something really in the short run it please and so we're very glad with that and there is a sure is just a natural complement to any customer who's already got office 365 sharepoint extensions the end user bi Active Directory administration all of these are sort of very natural extensions but agile itself now has got very very significant momentum yesterday we talked about how as urine as your services with all of our service provider partners has also got a billion dollars in revenue so that means when it comes to the core of the enterprise and their move to the cloud which is going to be complimenting a lot of what they're already doing in on premise is something that we're a pretty major player on and if anything we want to be solving the here and now practical problems with a forward-looking vision around identity around consistency of the management plane around virtualization compatibility around the application platforms and I think that that's what we're really up to in the immediate future all right yeah I think you really hit on something there with these gonna be high route deployments they're going to you know just much like in big data you know dupe isn't going to come in and replace your database your relational database and neither is the cloud whenever place your internal data center they've got to work together it sounds like you guys are working hard to kind of make that as seamless of the proposal as possible for your clients so I slept in Delaware Microsoft appreciate you coming on the cube thanks very much well hope you come back and join us about 39 thank you so much we'll be right back from the excel at Stanford symposium with our next guest writing for this

hi everybody welcome back to the Q we're here live at the Stanford accel partners summit I should say event here at Stanford University I am joined by Satya Nadella who is the president of server and tools baby Scholars Program with the Q I thanks so much for coming on appreciate it I think first time here on the cube we've had of course lots of folks on Microsoft on in the past and always a great to get your your take so tell us a little bit about your your your thoughts on this event in general you know last year was about big data this year it's a little bit more focused a little bit broader focus on the modern enterprise as they say what's your take on kind of this events it's a great event down this is my first time here as well and um having a chance to even see a couple of panels and just participate I think this notion of a modern enterprise is for real I think that it is a reimagining of what does infrastructure mean what do applications mean inside of the enterprise and we're going through this tectonic shift which we participate in and so to have a forum like this to discuss that was just great so let's dig into that a little bit what you know what makes the what makes the modern enterprise it's it's certainly a cloud and virtualization you've got the big data piece kind of the DevOps model of application development how do you kind of define what all bring to bringing together all these different elements what makes a modern enterprise yeah one of the things that I like to sort of make sure we focus on I work on the infrastructure business at Microsoft so you're in the infrastructure business the key thing is to be in touch with the applique and it turns out in our own case today we are building a pretty diverse set of applications both consumer and enterprise so they're building Bane which is an applied machine learning application we learn building office 365 which is an enterprise focused collaboration communication application we're building dynamics and another Enterprise CRM ERP in the cloud application and what have you so that diversity of applications makes you rethink what is the infrastructure needed from storage compute as well as the network and so we are building a new operating system for the modern enterprise to be able to deploy these modern applications so that's kind of how I conceptualize I would say there are four major elements to it the first one is it's inside of the data center you have much more of a software driven data set where you're orchestrating your compute storage and network in support of your applications either at the data center or multi data center scale because there's not a single enterprise that's not using some public cloud provider or another service provider in addition to what they already are virtualizing inside their own private cloud so that is all a software control plane and so we are really thinking about what is the modern operating system that enables you to manage the data center a second dimension would be the what is driven through consumerization of IT I like to describe it as transforming IT to be much more people central so you want end-users to adopt the devices they want and still have access to all their applications and data and yet IT needs to be able to set compliance and policy so how do you really arean that is in another dimension big data is something you referenced there's not going to be a single application that's not a big data application and so those are the major Keane's and the last thing I would say is this DevOps so not only have you built the application but it's even the lifecycle around the application is being reimagined how developers and operations professionals come together in support of an ongoing improvement and continuous integration these four mega trends I think constitute a modern enterprise infrastructure matrix so let's dig into a little bit about what you mentioned about the use of kind of public cloud infrastructure as well as your internal data center so you've got these hybrid environments that are starting to emerge again pretty much software lead a software led infrastructure is what we're calling it a wiki bond how do you go about actually making it possible for for CIOs and their teams and to actually manage those environments in an efficient way as possible you know making decisions about which applications are deployed in the public cloud which are deployed in your data center how they interact potentially applications that are drawing on data from both spots it's obviously can get very complex so you know Microsoft is one of those public cloud providers with Windows Azure so how do you approach that problem so if you sort of take what you just described which is if you you sort of start with the design point that there will be a public cloud there will be a private cloud and a service provider cloud then how you think about the software control is going to be defined by that design so it's not going to be narrowly defined as bring everything into my data center and I'll help you manage it but it is actually distributed so if I think of this is the true fruition of distributed computing and we believe in that so then what are the things that matter first is identity so anything whenever things get distributed the most important thing that brings back things together is actually identity of users and identity for resources so Active Directory was a great resource for many enterprises in terms of how they came the complexity of the previous generation of client server now we've replumbed and we my Active Directory with Azure Active Directory so this consistency in directories helps IT administrators manage this complexity the next one is virtualization so not only will you be able to virtualize on your private cloud you should be able to move the same work cloud workload which is virtualized to any of these other clouds so you need a degree of guarantee that the performance characteristics of a virtualized workload get maintained across all so that's another thing that with our hyper-v investments and our agile investments we are making sure that happens the other one would be management so with if you can be sitting on the system center management console and the orchestrator and looking at a workload which could be in fact in one one of these clouds or in fact the tears of a single application could be split which is the front end is on Azure the back end is back in on-premise and so that's also very very important to have a management tier which is the control plane that allows you to manage this complexity and lastly it's the consistency of the application platform itself so if you're building a development you never want to be in the state where you build a great app but you can never check out so you if you build it in the public cloud in the case of azure you should be able to take it and run it on a private cloud or on a service provider cloud so these four things are on identity management virtualization and application platform I think is the core investment you've got to make to help enterprises truly adopt the cloud while you know it's complex but you gotta tame the complexity and then of course what you're talking about it really is a lot of data being generated companies of course want to want to start taking advantage of that data they want to analyze it they want to actually take those insights and turn them into either applications or perhaps convey them to executives and others in terms of visualization and of course one of those underlying platforms is to do talk about Microsoft's approach to Hadoop I know you're working with Hortonworks you actually kind of discontinued working on your own big data technology when you as I think that you know Hadoop was given is going to become the de facto standard so talk about how you're making it possible to bring the dupe into this environment where more and more companies are looking to bring that in maybe as a big data hub kind of store a lot of data and then feeds out to applications different workloads what is your approach actually making that I guess Enterprise ready yeah and making it easy to get and get started and then turn you know maybe science projects into really production whether the point is right I mean this notion of being able to take data and convert it into insights in support of enterprise goals is sort of the holy grail of this moment and so one of the things that we are actively doing is to bring a lot of the traditional value we've always had if you think about the momentum we have with our self-service bi capabilities on the edge of data which is Excel sharepoint sequel analysis services is where all data goes to in order to be able to drive insights within and you know with it with end users because at the end of the day humans will be involved to be able to drive inside out of all of this data so now the question is how do we take that edge loop and connected with the information production which is upstream and that is where we are completing the story with having HD inside having even a relational interface on top of HD insight for in-memory ad hoc query analysis like a data warehouse on top of it which I think the Hadoop community itself is adopting which is a sequel interface on Hadoop is probably one of the more talked about things nowadays and so this notion of having a complete data platform everything from MapReduce to stream processing to sequel like query interactively and then empowering end-users and workflows with data around end users which share or in Excel where we've invested in things like a power pivot and Power View which are actually powerful in-memory databases in fact I would say the most powerful in-memory database now is Power View inside of Excel from where you can issue a sequel I mean basically a hive query to HD inside and populate millions of in a tabular column form that you're very familiar with we think that that democratization of big data is going to be very very important to acceptance of it as you said it from science projects or just being in the data science department to bring ubiquitous so we've only got time for one more question so just love to get your kind of future outlook what are some of the key priorities for you and your group over the next say six to twelve months I mean the key thing for us is really bootstrapping our cloud business we've got some fantastic traction with office 365 it's really doing very well in the q3 earnings we talked about how we have a moving on a run rate basis of billion dollars a revenue going to office 365 and many customers who are coming to office 365 never bought an exchange server from so we're even it's not even 0 some really in the short run at least and so we're very glad with that and there is a j''r is just a natural complement to any customer who's already got office 365 SharePoint extensions the end user bi Active Directory administration all of these are sort of very natural extensions but Azure itself now has got very very significant momentum yesterday we talked about how Azure and Azure services with all of our service provider partners has also got a billion dollars of revenue so that means when it comes to the core of the enterprise and their move to the cloud which is going to be complementing a lot of what they're already doing in on-premise is something that we're a pretty major player on and if anything we want to be solving the here and now practical problems with a forward-looking vision around identity around consistency of the management plane around virtualization compatibility around the application platforms and I think that that's what we are up to in the immediate future alright yeah I think you really hit on something there with these gonna be hybrid deployments they're going to you know just much like in big data you know doop isn't going to come in and replace your database your relational database and neither is the cloud going to replace your internal data center they've got to work together it sounds like you guys are working hard to kind of make that as seamless of the proposal as possible for your clients so Satya Nadella for Microsoft we appreciate you coming on the queue thanks very much well hope you come back and join us about three thank you so much we'll be right back from the Excel Stanford symposium with our next guests ready for this

(upbeat intro music) >> Hello everyone. Welcome to theCUBE's coverage of International Women's Day. I'm your host, John Furrier, here in Palo Alto, California. Got a special remote guest coming in. Teresa Carlson, President and Chief Commercial Officer at Flexport, theCUBE alumni, one of the first, let me go back to 2013, Teresa, former AWS. Great to see you. Thanks for coming on. >> Oh my gosh, almost 10 years. That is unbelievable. It's hard to believe so many years of theCUBE. I love it. >> It's been such a great honor to interview you and follow your career. You've had quite the impressive run, executive level woman in tech. You've done such an amazing job, not only in your career, but also helping other women. So I want to give you props to that before we get started. Thank you. >> Thank you, John. I, it's my, it's been my honor and privilege. >> Let's talk about Flexport. Tell us about your new role there and what it's all about. >> Well, I love it. I'm back working with another Amazonian, Dave Clark, who is our CEO of Flexport, and we are about 3,000 people strong globally in over 90 countries. We actually even have, we're represented in over 160 cities and with local governments and places around the world, which I think is super exciting. We have over 100 network partners and growing, and we are about empowering the global supply chain and trade and doing it in a very disruptive way with the use of platform technology that allows our customers to really have visibility and insight to what's going on. And it's a lot of fun. I'm learning new things, but there's a lot of technology in this as well, so I feel right at home. >> You quite have a knack from mastering growth, technology, and building out companies. So congratulations, and scaling them up too with the systems and processes. So I want to get into that. Let's get into your personal background. Then I want to get into the work you've done and are doing for empowering women in tech. What was your journey about, how did it all start? Like, I know you had a, you know, bumped into it, you went Microsoft, AWS. Take us through your career, how you got into tech, how it all happened. >> Well, I do like to give a shout out, John, to my roots and heritage, which was a speech and language pathologist. So I did start out in healthcare right out of, you know, university. I had an undergraduate and a master's degree. And I do tell everyone now, looking back at my career, I think it was super helpful for me because I learned a lot about human communication, and it has done me very well over the years to really try to understand what environments I'm in and what kind of individuals around the world culturally. So I'm really blessed that I had that opportunity to work in healthcare, and by the way, a shout out to all of our healthcare workers that has helped us get through almost three years of COVID and flu and neurovirus and everything else. So started out there and then kind of almost accidentally got into technology. My first small company I worked for was a company called Keyfile Corporation, which did workflow and document management out of Nashua, New Hampshire. And they were a Microsoft goal partner. And that is actually how I got into big tech world. We ran on exchange, for everybody who knows that term exchange, and we were a large small partner, but large in the world of exchange. And those were the days when you would, the late nineties, you would go and be in the same room with Bill Gates and Steve Ballmer. And I really fell in love with Microsoft back then. I thought to myself, wow, if I could work for a big tech company, I got to hear Bill on stage about saving, he would talk about saving the world. And guess what my next step was? I actually got a job at Microsoft, took a pay cut and a job downgrade. I tell this story all the time. Took like three downgrades in my role. I had been a SVP and went to a manager, and it's one of the best moves I ever made. And I shared that because I really didn't know the world of big tech, and I had to start from the ground up and relearn it. I did that, I just really loved that job. I was at Microsoft from 2000 to 2010, where I eventually ran all of the U.S. federal government business, which was a multi-billion dollar business. And then I had the great privilege of meeting an amazing man, Andy Jassy, who I thought was just unbelievable in his insights and knowledge and openness to understanding new markets. And we talked about government and how government needed the same great technology as every startup. And that led to me going to work for Andy in 2010 and starting up our worldwide public sector business. And I pinch myself some days because we went from two people, no offices, to the time I left we had over 10,000 people, billions in revenue, and 172 countries and had done really amazing work. I think changing the way public sector and government globally really thought about their use of technology and Cloud computing in general. And that kind of has been my career. You know, I was there till 2020, 21 and then did a small stint at Splunk, a small stint back at Microsoft doing a couple projects for Microsoft with CEO, Satya Nadella, who is also an another amazing CEO and leader. And then Dave called me, and I'm at Flexport, so I couldn't be more honored, John. I've just had such an amazing career working with amazing individuals. >> Yeah, I got to say the Amazon One well-documented, certainly by theCUBE and our coverage. We watched you rise and scale that thing. And like I said at a time, this will when we look back as a historic run because of the build out. I mean as a zero to massive billions at a historic time where government was transforming, I would say Microsoft had a good run there with Fed, but it was already established stuff. Federal business was like, you know, blocking and tackling. The Amazon was pure build out. So I have to ask you, what was your big learnings? Because one, you're a Seattle big tech company kind of entrepreneurial in the sense of you got, here's some working capital seed finance and go build that thing, and you're in DC and you're a woman. What did you learn? >> I learned that you really have to have a lot of grit. You, my mom and dad, these are kind of more southern roots words, but stick with itness, you know. you can't give up and no's not in your vocabulary. I found no is just another way to get to yes. That you have to figure out what are all the questions people are going to ask you. I learned to be very patient, and I think one of the things John, for us was our secret sauce was we said to ourselves, if we're going to do something super transformative and truly disruptive, like Cloud computing, which the government really had not utilized, we had to be patient. We had to answer all their questions, and we could not judge in any way what they were thinking because if we couldn't answer all those questions and prove out the capabilities of Cloud computing, we were not going to accomplish our goals. And I do give so much credit to all my colleagues there from everybody like Steve Schmidt who was there, who's still there, who's the CISO, and Charlie Bell and Peter DeSantis and the entire team there that just really helped build that business out. Without them, you know, we would've just, it was a team effort. And I think that's the thing I loved about it was it was not just sales, it was product, it was development, it was data center operations, it was legal, finance. Everybody really worked as a team and we were on board that we had to make a lot of changes in the government relations team. We had to go into Capitol Hill. We had to talk to them about the changes that were required and really get them to understand why Cloud computing could be such a transformative game changer for the way government operates globally. >> Well, I think the whole world and the tech world can appreciate your work and thank you later because you broke down those walls asking those questions. So great stuff. Now I got to say, you're in kind of a similar role at Flexport. Again, transformative supply chain, not new. Computing wasn't new when before Cloud came. Supply chain, not a new concept, is undergoing radical change and transformation. Online, software supply chain, hardware supply chain, supply chain in general, shipping. This is a big part of our economy and how life is working. Similar kind of thing going on, build out, growth, scale. >> It is, it's very much like that, John, I would say, it's, it's kind of a, the model with freight forwarding and supply chain is fairly, it's not as, there's a lot of technology utilized in this global supply chain world, but it's not integrated. You don't have a common operating picture of what you're doing in your global supply chain. You don't have easy access to the information and visibility. And that's really, you know, I was at a conference last week in LA, and it was, the themes were so similar about transparency, access to data and information, being able to act quickly, drive change, know what was happening. I was like, wow, this sounds familiar. Data, AI, machine learning, visibility, common operating picture. So it is very much the same kind of themes that you heard even with government. I do believe it's an industry that is going through transformation and Flexport has been a group that's come in and said, look, we have this amazing idea, number one to give access to everyone. We want every small business to every large business to every government around the world to be able to trade their goods, think about supply chain logistics in a very different way with information they need and want at their fingertips. So that's kind of thing one, but to apply that technology in a way that's very usable across all systems from an integration perspective. So it's kind of exciting. I used to tell this story years ago, John, and I don't think Michael Dell would mind that I tell this story. One of our first customers when I was at Keyfile Corporation was we did workflow and document management, and Dell was one of our customers. And I remember going out to visit them, and they had runners and they would run around, you know, they would run around the floor and do their orders, right, to get all those computers out the door. And when I think of global trade, in my mind I still see runners, you know, running around and I think that's moved to a very digital, right, world that all this stuff, you don't need people doing this. You have machines doing this now, and you have access to the information, and you know, we still have issues resulting from COVID where we have either an under-abundance or an over-abundance of our supply chain. We still have clogs in our shipping, in the shipping yards around the world. So we, and the ports, so we need to also, we still have some clearing to do. And that's the reason technology is important and will continue to be very important in this world of global trade. >> Yeah, great, great impact for change. I got to ask you about Flexport's inclusion, diversity, and equity programs. What do you got going on there? That's been a big conversation in the industry around keeping a focus on not making one way more than the other, but clearly every company, if they don't have a strong program, will be at a disadvantage. That's well reported by McKinsey and other top consultants, diverse workforces, inclusive, equitable, all perform better. What's Flexport's strategy and how are you guys supporting that in the workplace? >> Well, let me just start by saying really at the core of who I am, since the day I've started understanding that as an individual and a female leader, that I could have an impact. That the words I used, the actions I took, the information that I pulled together and had knowledge of could be meaningful. And I think each and every one of us is responsible to do what we can to make our workplace and the world a more diverse and inclusive place to live and work. And I've always enjoyed kind of the thought that, that I could help empower women around the world in the tech industry. Now I'm hoping to do my little part, John, in that in the supply chain and global trade business. And I would tell you at Flexport we have some amazing women. I'm so excited to get to know all. I've not been there that long yet, but I'm getting to know we have some, we have a very diverse leadership team between men and women at Dave's level. I have some unbelievable women on my team directly that I'm getting to know more, and I'm so impressed with what they're doing. And this is a very, you know, while this industry is different than the world I live in day to day, it's also has a lot of common themes to it. So, you know, for us, we're trying to approach every day by saying, let's make sure both our interviewing cycles, the jobs we feel, how we recruit people, how we put people out there on the platforms, that we have diversity and inclusion and all of that every day. And I can tell you from the top, from Dave and all of our leaders, we just had an offsite and we had a big conversation about this is something. It's a drum beat that we have to think about and live by every day and really check ourselves on a regular basis. But I do think there's so much more room for women in the world to do great things. And one of the, one of the areas, as you know very well, we lost a lot of women during COVID, who just left the workforce again. So we kind of went back unfortunately. So we have to now move forward and make sure that we are giving women the opportunity to have great jobs, have the flexibility they need as they build a family, and have a workplace environment that is trusted for them to come into every day. >> There's now clear visibility, at least in today's world, not withstanding some of the setbacks from COVID, that a young girl can look out in a company and see a path from entry level to the boardroom. That's a big change. A lot than even going back 10, 15, 20 years ago. What's your advice to the folks out there that are paying it forward? You see a lot of executive leaderships have a seat at the table. The board still underrepresented by most numbers, but at least you have now kind of this solidarity at the top, but a lot of people doing a lot more now than I've seen at the next levels down. So now you have this leveled approach. Is that something that you're seeing more of? And credit compare and contrast that to 20 years ago when you were, you know, rising through the ranks? What's different? >> Well, one of the main things, and I honestly do not think about it too much, but there were really no women. There were none. When I showed up in the meetings, I literally, it was me or not me at the table, but at the seat behind the table. The women just weren't in the room, and there were so many more barriers that we had to push through, and that has changed a lot. I mean globally that has changed a lot in the U.S. You know, if you look at just our U.S. House of Representatives and our U.S. Senate, we now have the increasing number of women. Even at leadership levels, you're seeing that change. You have a lot more women on boards than we ever thought we would ever represent. While we are not there, more female CEOs that I get an opportunity to see and talk to. Women starting companies, they do not see the barriers. And I will share, John, globally in the U.S. one of the things that I still see that we have that many other countries don't have, which I'm very proud of, women in the U.S. have a spirit about them that they just don't see the barriers in the same way. They believe that they can accomplish anything. I have two sons, I don't have daughters. I have nieces, and I'm hoping someday to have granddaughters. But I know that a lot of my friends who have granddaughters today talk about the boldness, the fortitude, that they believe that there's nothing they can't accomplish. And I think that's what what we have to instill in every little girl out there, that they can accomplish anything they want to. The world is theirs, and we need to not just do that in the U.S., but around the world. And it was always the thing that struck me when I did all my travels at AWS and now with Flexport, I'm traveling again quite a bit, is just the differences you see in the cultures around the world. And I remember even in the Middle East, how I started seeing it change. You've heard me talk a lot on this program about the fact in both Saudi and Bahrain, over 60% of the tech workers were females and most of them held the the hardest jobs, the security, the architecture, the engineering. But many of them did not hold leadership roles. And that is what we've got to change too. To your point, the middle, we want it to get bigger, but the top, we need to get bigger. We need to make sure women globally have opportunities to hold the most precious leadership roles and demonstrate their capabilities at the very top. But that's changed. And I would say the biggest difference is when we show up, we're actually evaluated properly for those kind of roles. We have a ways to go. But again, that part is really changing. >> Can you share, Teresa, first of all, that's great work you've done and I wan to give you props of that as well and all the work you do. I know you champion a lot of, you know, causes in in this area. One question that comes up a lot, I would love to get your opinion 'cause I think you can contribute heavily here is mentoring and sponsorship is huge, comes up all the time. What advice would you share to folks out there who were, I won't say apprehensive, but maybe nervous about how to do the networking and sponsorship and mentoring? It's not just mentoring, it's sponsorship too. What's your best practice? What advice would you give for the best way to handle that? >> Well yeah, and for the women out there, I would say on the mentorship side, I still see mentorship. Like, I don't think you can ever stop having mentorship. And I like to look at my mentors in different parts of my life because if you want to be a well-rounded person, you may have parts of your life every day that you think I'm doing a great job here and I definitely would like to do better there. Whether it's your spiritual life, your physical life, your work life, you know, your leisure life. But I mean there's, and there's parts of my leadership world that I still seek advice from as I try to do new things even in this world. And I tried some new things in between roles. I went out and asked the people that I respected the most. So I just would say for sure have different mentorships and don't be afraid to have that diversity. But if you have mentorships, the second important thing is show up with a real agenda and questions. Don't waste people's time. I'm very sensitive today. If you're, if you want a mentor, you show up and you use your time super effectively and be prepared for that. Sponsorship is a very different thing. And I don't believe we actually do that still in companies. We worked, thank goodness for my great HR team. When I was at AWS, we worked on a few sponsorship programs where for diversity in general, where we would nominate individuals in the company that we felt that weren't, that had a lot of opportunity for growth, but they just weren't getting a seat at the table. And we brought 'em to the table. And we actually kind of had a Chatham House rules where when they came into the meetings, they had a sponsor, not a mentor. They had a sponsor that was with them the full 18 months of this program. We would bring 'em into executive meetings. They would read docs, they could ask questions. We wanted them to be able to open up and ask crazy questions without, you know, feeling wow, I just couldn't answer this question in a normal environment or setting. And then we tried to make sure once they got through the program that we found jobs and support and other special projects that they could go do. But they still had that sponsor and that group of individuals that they'd gone through the program with, John, that they could keep going back to. And I remember sitting there and they asked me what I wanted to get out of the program, and I said two things. I want you to leave this program and say to yourself, I would've never had that experience if I hadn't gone through this program. I learned so much in 18 months. It would probably taken me five years to learn. And that it helped them in their career. The second thing I told them is I wanted them to go out and recruit individuals that look like them. I said, we need diversity, and unless you all feel that we are in an inclusive environment sponsoring all types of individuals to be part of this company, we're not going to get the job done. And they said, okay. And you know, but it was really one, it was very much about them. That we took a group of individuals that had high potential and a very diverse with diverse backgrounds, held 'em up, taught 'em things that gave them access. And two, selfishly I said, I want more of you in my business. Please help me. And I think those kind of things are helpful, and you have to be thoughtful about these kind of programs. And to me that's more sponsorship. I still have people reach out to me from years ago, you know, Microsoft saying, you were so good with me, can you give me a reference now? Can you talk to me about what I should be doing? And I try to, I'm not pray 100%, some things pray fall through the cracks, but I always try to make the time to talk to those individuals because for me, I am where I am today because I got some of the best advice from people like Don Byrne and Linda Zecker and Andy Jassy, who were very honest and upfront with me about my career. >> Awesome. Well, you got a passion for empowering women in tech, paying it forward, but you're quite accomplished and that's why we're so glad to have you on the program here. President and Chief Commercial Officer at Flexport. Obviously storied career and your other jobs, specifically Amazon I think, is historic in my mind. This next chapter looks like it's looking good right now. Final question for you, for the few minutes you have left. Tell us what you're up to at Flexport. What's your goals as President, Chief Commercial Officer? What are you trying to accomplish? Share a little bit, what's on your mind with your current job? >> Well, you kind of said it earlier. I think if I look at my own superpowers, I love customers, I love partners. I get my energy, John, from those interactions. So one is to come in and really help us build even a better world class enterprise global sales and marketing team. Really listen to our customers, think about how we interact with them, build the best executive programs we can, think about new ways that we can offer services to them and create new services. One of my favorite things about my career is I think if you're a business leader, it's your job to come back around and tell your product group and your services org what you're hearing from customers. That's how you can be so much more impactful, that you listen, you learn, and you deliver. So that's one big job. The second job for me, which I am so excited about, is that I have an amazing group called flexport.org under me. And flexport.org is doing amazing things around the world to help those in need. We just announced this new funding program for Tech for Refugees, which brings assistance to millions of people in Ukraine, Pakistan, the horn of Africa, and those who are affected by earthquakes. We just took supplies into Turkey and Syria, and Flexport, recently in fact, just did sent three air shipments to Turkey and Syria for these. And I think we did over a hundred trekking shipments to get earthquake relief. And as you can imagine, it was not easy to get into Syria. But you know, we're very active in the Ukraine, and we are, our goal for flexport.org, John, is to continue to work with our commercial customers and team up with them when they're trying to get supplies in to do that in a very cost effective, easy way, as quickly as we can. So that not-for-profit side of me that I'm so, I'm so happy. And you know, Ryan Peterson, who was our founder, this was his brainchild, and he's really taken this to the next level. So I'm honored to be able to pick that up and look for new ways to have impact around the world. And you know, I've always found that I think if you do things right with a company, you can have a beautiful combination of commercial-ity and giving. And I think Flexport does it in such an amazing and unique way. >> Well, the impact that they have with their system and their technology with logistics and shipping and supply chain is a channel for societal change. And I think that's a huge gift that you have that under your purview. So looking forward to finding out more about flexport.org. I can only imagine all the exciting things around sustainability, and we just had Mobile World Congress for Big Cube Broadcast, 5Gs right around the corner. I'm sure that's going to have a huge impact to your business. >> Well, for sure. And just on gas emissions, that's another thing that we are tracking gas, greenhouse gas emissions. And in fact we've already reduced more than 300,000 tons and supported over 600 organizations doing that. So that's a thing we're also trying to make sure that we're being climate aware and ensuring that we are doing the best job we can at that as well. And that was another thing I was honored to be able to do when we were at AWS, is to really cut out greenhouse gas emissions and really go global with our climate initiatives. >> Well Teresa, it's great to have you on. Security, data, 5G, sustainability, business transformation, AI all coming together to change the game. You're in another hot seat, hot roll, big wave. >> Well, John, it's an honor, and just thank you again for doing this and having women on and really representing us in a big way as we celebrate International Women's Day. >> I really appreciate it, it's super important. And these videos have impact, so we're going to do a lot more. And I appreciate your leadership to the industry and thank you so much for taking the time to contribute to our effort. Thank you, Teresa. >> Thank you. Thanks everybody. >> Teresa Carlson, the President and Chief Commercial Officer of Flexport. I'm John Furrier, host of theCUBE. This is International Women's Day broadcast. Thanks for watching. (upbeat outro music)

(light music) >> Announcer: TheCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (upbeat music) >> Welcome back to the Fira in Barcelona. Dave Vellante with Dave Nicholson. Lisa Martin's been here all week. John Furrier is in our Palo Alto studio, banging out all the news. Don't forget to check out siliconangle.com, thecube.net. This is day four, our last segment, winding down. MWC23, super excited to be here. Wayne Duso, friend of theCUBE, VP of engineering from products at AWS is here with Iyad Tarazi, who's the CEO of Federated Wireless. Gents, welcome. >> Good to be here. >> Nice to see you. >> I'm so stoked, Wayne, that we connected before the show. We texted, I'm like, "You're going to be there. I'm going to be there. You got to come on theCUBE." So thank you so much for making time, and thank you for bringing a customer partner, Federated Wireless. Everybody knows AWS. Iyad, tell us about Federated Wireless. >> We're a software and services company out of Arlington, Virginia, right outside of Washington, DC, and we're really focused on this new technology called Shared Spectrum and private wireless for 5G. Think of it as enterprises consuming 5G, the way they used to consume WiFi. >> Is that unrestricted spectrum, or? >> It is managed, organized, interference free, all through cloud platforms. That's how we got to know AWS. We went and got maybe about 300 products from AWS to make it work. Quite sophisticated, highly available, and pristine spectrum worth billions of dollars, but available for people like you and I, that want to build enterprises, that want to make things work. Also carriers, cable companies everybody else that needs it. It's really a new revolution for everyone. >> And that's how you, it got introduced to AWS. Was that through public sector, or just the coincidence that you're in DC >> No, I, well, yes. The center of gravity in the world for spectrum is literally Arlington. You have the DOD spectrum people, you have spectrum people from National Science Foundation, DARPA, and then you have commercial sector, and you have the FCC just an Uber ride away. So we went and found the scientists that are doing all this work, four or five of them, Virginia Tech has an office there too, for spectrum research for the Navy. Come together, let's have a party and make a new model. >> So I asked this, I'm super excited to have you on theCUBE. I sat through the keynotes on Monday. I saw Satya Nadella was in there, Thomas Kurian there was no AWS. I'm like, where's AWS? AWS is everywhere. I mean, you guys are all over the show. I'm like, "Hey, where's the number one cloud?" So you guys have made a bunch of announcements at the show. Everybody's talking about the cloud. What's going on for you guys? >> So we are everywhere, and you know, we've been coming to this show for years. But this is really a year that we can demonstrate that what we've been doing for the IT enterprise, IT people for 17 years, we're now bringing for telcos, you know? For years, we've been, 17 years to be exact, we've been bringing the cloud value proposition, whether it's, you know, cost efficiencies or innovation or scale, reliability, security and so on, to these enterprise IT folks. Now we're doing the same thing for telcos. And so whether they want to build in region, in a local zone, metro area, on-prem with an outpost, at the edge with Snow Family, or with our IoT devices. And no matter where they want to start, if they start in the cloud and they want to move to the edge, or they start in the edge and they want to bring the cloud value proposition, like, we're demonstrating all of that is happening this week. And, and very much so, we're also demonstrating that we're bringing the same type of ecosystem that we've built for enterprise IT. We're bringing that type of ecosystem to the telco companies, with CSPs, with the ISP vendors. We've seen plenty of announcements this week. You know, so on and so forth. >> So what's different, is it, the names are different? Is it really that simple, that you're just basically taking the cloud model into telco, and saying, "Hey, why do all this undifferentiated heavy lifting when we can do it for you? Don't worry about all the plumbing." Is it really that simple? I mean, that straightforward. >> Well, simple is probably not what I'd say, but we can make it straightforward. >> Conceptually. >> Conceptually, yes. Conceptually it is the same. Because if you think about, firstly, we'll just take 5G for a moment, right? The 5G folks, if you look at the architecture for 5G, it was designed to run on a cloud architecture. It was designed to be a set of services that you could partition, and run in different places, whether it's in the region or at the edge. So in many ways it is sort of that simple. And let me give you an example. Two things, the first one is we announced integrated private wireless on AWS, which allows enterprise customers to come to a portal and look at the industry solutions. They're not worried about their network, they're worried about solving a problem, right? And they can come to that portal, they can find a solution, they can find a service provider that will help them with that solution. And what they end up with is a fully validated offering that AWS telco SAS have actually put to its paces to make sure this is a real thing. And whether they get it from a telco, and, and quite frankly in that space, it's SIs such as Federated that actually help our customers deploy those in private environments. So that's an example. And then added to that, we had a second announcement, which was AWS telco network builder, which allows telcos to plan, deploy, and operate at scale telco network capabilities on the cloud, think about it this way- >> As a managed service? >> As a managed service. So think about it this way. And the same way that enterprise IT has been deploying, you know, infrastructure as code for years. Telco network builder allows the telco folks to deploy telco networks and their capabilities as code. So it's not simple, but it is pretty straightforward. We're making it more straightforward as we go. >> Jump in Dave, by the way. He can geek out if you want. >> Yeah, no, no, no, that's good, that's good, that's good. But actually, I'm going to ask an AWS question, but I'm going to ask Iyad the AWS question. So when we, when I hear the word cloud from Wayne, cloud, AWS, typically in people's minds that denotes off-premises. Out there, AWS data center. In the telecom space, yes, of course, in the private 5G space, we're talking about a little bit of a different dynamic than in the public 5G space, in terms of the physical infrastructure. But regardless at the edge, there are things that need to be physically at the edge. Do you feel that AWS is sufficiently, have they removed the H word, hybrid, from the list of bad words you're not allowed to say? 'Cause there was a point in time- >> Yeah, of course. >> Where AWS felt that their growth- >> They'll even say multicloud today, (indistinct). >> No, no, no, no, no. But there was a period of time where, rightfully so, AWS felt that the growth trajectory would be supported solely by net new things off premises. Now though, in this space, it seems like that hybrid model is critical. Do you see AWS being open to the hybrid nature of things? >> Yeah, they're, absolutely. I mean, just to explain from- we're a services company and a solutions company. So we put together solutions at the edge, a smart campus, smart agriculture, a deployment. One of our biggest deployment is a million square feet warehouse automation project with the Marine Corps. >> That's bigger than the Fira. >> Oh yeah, it's bigger, definitely bigger than, you know, a small section of here. It's actually three massive warehouses. So yes, that is the edge. What the cloud is about is that massive amount of efficiency has happened by concentrating applications in data centers. And that is programmability, that is APIs that is solutions, that is applications that can run on it, where people know how to do it. And so all that efficiency now is being ported in a box called the edge. What AWS is doing for us is bringing all the business and technical solutions they had into the edge. Some of the data may send back and forth, but that's actually a smaller piece of the value for us. By being able to bring an AWS package at the edge, we're bringing IoT applications, we're bringing high speed cameras, we're able to integrate with the 5G public network. We're able to bring in identity and devices, we're able to bring in solutions for students, embedded laptops. All of these things that you can do much much faster and cheaper if you are able to tap in the 4,000, 5,000 partners and all the applications and all the development and all the models that AWS team did. By being able to bring that efficiency to the edge why reinvent that? And then along with that, there are partners that you, that help do integration. There are development done to make it hardened, to make the data more secure, more isolated. All of these things will contribute to an edge that truly is a carbon copy of the data center. >> So Wayne, it's AWS, Regardless of where the compute, networking and storage physically live, it's AWS. Do you think that the term cloud will sort of drift away from usage? Because if, look, it's all IT, in this case it's AWS and federated IT working together. How, what's your, it's sort of a obscure question about cloud, because cloud is so integrated. >> You Got this thing about cloud, it's just IT. >> I got thing about cloud too, because- >> You and Larry Ellison. >> Because it's no, no, no, I'm, yeah, well actually there's- >> There's a lot of IT that's not cloud, just say that okay. >> Now, a lot of IT that isn't cloud, but I would say- >> But I'll (indistinct) cloud is an IT tool, and you see AWS obviously with the Snow fill in the blank line of products and outpost type stuff. Fair to say that you're, doesn't matter where it is, it could be AWS if it's on the edge, right? >> Well, you know, everybody wants to define the cloud as what it may have been when it started. But if you look at what it was when it started and what it is today, it is different. But the ability to bring the experience, the AWS experience, the services, the operational experience and all the things that Iyad had been talking about from the region all to all the way to, you know, the IoT device, if you would, that entire continuum. And it doesn't matter where you start. Like if you start in region and you need to bring your value to other places because your customers are asking you to do so, we're enabling that experience where you need to bring it. If you started at the edge, and- but you want to build cloud value, you know, whether it's again, cost efficiency, scalability, AI, ML or analytics into those capabilities, you can start at the edge with the same APIs, with the same service, the same capabilities, and you can build that value in right from the get go. You don't build this bifurcation or many separations and try to figure out how do I glue them together? There is no gluing together. So if you think of cloud as being elastic, scalable flexible, where you can drive innovation, it's the same exact model on the continuum. And you can start at either end, it's up to you as a customer. >> And I think if, the key to me is the ecosystem. I mean, if you can do for this industry what you've done for the technology- enterprise technology business from an ecosystem standpoint, you know everybody talks about flywheel, but that gives you like the massive flywheel. I don't know what the ratio is, but it used to be for every dollar spent on a VMware license, $15 is spent in the ecosystem. I've never heard similar ratios in the AWS ecosystem, but it's, I go to reinvent and I'm like, there's some dollars being- >> That's a massive ecosystem. >> (indistinct). >> And then, and another thing I'll add is Jose Maria Alvarez, who's the chairman of Telefonica, said there's three pillars of the future-ready telco, low latency, programmable networks, and he said cloud and edge. So they recognizing cloud and edge, you know, low latency means you got to put the compute and the data, the programmable infrastructure was invented by Amazon. So what's the strategy around the telco edge? >> So, you know, at the end, so those are all great points. And in fact, the programmability of the network was a big theme in the show. It was a huge theme. And if you think about the cloud, what is the cloud? It's a set of APIs against a set of resources that you use in whatever way is appropriate for what you're trying to accomplish. The network, the telco network becomes a resource. And it could be described as a resource. We, I talked about, you know, network as in code, right? It's same infrastructure in code, it's telco infrastructure as code. And that code, that infrastructure, is programmable. So this is really, really important. And in how you build the ecosystem around that is no different than how we built the ecosystem around traditional IT abstractions. In fact, we feel that really the ecosystem is the killer app for 5G. You know, the killer app for 4G, data of sorts, right? We started using data beyond simple SMS messages. So what's the killer app for 5G? It's building this ecosystem, which includes the CSPs, the ISVs, all of the partners that we bring to the table that can drive greater value. It's not just about cost efficiency. You know, you can't save your way to success, right? At some point you need to generate greater value for your customers, which gives you better business outcomes, 'cause you can monetize them, right? The ecosystem is going to allow everybody to monetize 5G. >> 5G is like the dot connector of all that. And then developers come in on top and create new capabilities >> And how different is that than, you know, the original smartphones? >> Yeah, you're right. So what do you guys think of ChatGPT? (indistinct) to Amazon? Amazon turned the data center into an API. It's like we're visioning this world, and I want to ask that technologist, like, where it's turning resources into human language interfaces. You know, when you see that, you play with ChatGPT at all, or I know you guys got your own. >> So I won't speak directly to ChatGPT. >> No, don't speak from- >> But if you think about- >> Generative AI. >> Yeah generative AI is important. And, and we are, and we have been for years, in this space. Now you've been talking to AWS for a long time, and we often don't talk about things we don't have yet. We don't talk about things that we haven't brought to market yet. And so, you know, you'll often hear us talk about something, you know, a year from now where others may have been talking about it three years earlier, right? We will be talking about this space when we feel it's appropriate for our customers and our partners. >> You have talked about it a little bit, Adam Selipsky went on an interview with myself and John Furrier in October said you watch, you know, large language models are going to be enormous and I know you guys have some stuff that you're working on there. >> It's, I'll say it's exciting. >> Yeah, I mean- >> Well proof point is, Siri is an idiot compared to Alexa. (group laughs) So I trust one entity to come up with something smart. >> I have conversations with Alexa and Siri, and I won't judge either one. >> You don't need, you could be objective on that one. I definitely have a preference. >> Are the problems you guys solving in this space, you know, what's unique about 'em? What are they, can we, sort of, take some examples here (indistinct). >> Sure, the main theme is that the enterprise is taking control. They want to have their own networks. They want to focus on specific applications, and they want to build them with a skeleton crew. The one IT person in a warehouse want to be able to do it all. So what's unique about them is that they're now are a lot of automation on robotics, especially in warehousing environment agriculture. There simply aren't enough people in these industries, and that required precision. And so you need all that integration to make it work. People also want to build these networks as they want to control it. They want to figure out how do we actually pick this team and migrate it. Maybe just do the front of the house first. Maybe it's a security team that monitor the building, maybe later on upgrade things that use to open doors and close doors and collect maintenance data. So that ability to pick what you want to do from a new processors is really important. And then you're also seeing a lot of public-private network interconnection. That's probably the undercurrent of this show that haven't been talked about. When people say private networks, they're also talking about something called neutral host, which means I'm going to build my own network, but I want it to work, my Verizon (indistinct) need to work. There's been so much progress, it's not done yet. So much progress about this bring my own network concept, and then make sure that I'm now interoperating with the public network, but it's my domain. I can create air gaps, I can create whatever security and policy around it. That is probably the power of 5G. Now take all of these tiny networks, big networks, put them all in one ecosystem. Call it the Amazon marketplace, call it the Amazon ecosystem, that's 5G. It's going to be tremendous future. >> What does the future look like? We're going to, we just determined we're going to be orchestrating the network through human language, okay? (group laughs) But seriously, what's your vision for the future here? You know, both connectivity and cloud are on on a continuum. It's, they've been on a continuum forever. They're going to continue to be on a continuum. That being said, those continuums are coming together, right? They're coming together to bring greater value to a greater set of customers, and frankly all of us. So, you know, the future is now like, you know, this conference is the future, and if you look at what's going on, it's about the acceleration of the future, right? What we announced this week is really the acceleration of listening to customers for the last handful of years. And, we're going to continue to do that. We're going to continue to bring greater value in the form of solutions. And that's what I want to pick up on from the prior question. It's not about the network, it's not about the cloud, it's about the solutions that we can provide the customers where they are, right? And if they're on their mobile phone or they're in their factory floor, you know, they're looking to accelerate their business. They're looking to accelerate their value. They're looking to create greater safety for their employees. That's what we can do with these technologies. So in fact, when we came out with, you know, our announcement for integrated private wireless, right? It really was about industry solutions. It really isn't about, you know, the cloud or the network. It's about how you can leverage those technologies, that continuum, to deliver you value. >> You know, it's interesting you say that, 'cause again, when we were interviewing Adam Selipsky, everybody, you know, all journalists analysts want to know, how's Adam Selipsky going to be different from Andy Jassy, what's the, what's he going to do to Amazon to change? And he said, listen, the real answer is Amazon has changed. If Andy Jassy were here, we'd be doing all, you know, pretty much the same things. Your point about 17 years ago, the cloud was S3, right, and EC2. Now it's got to evolve to be solutions. 'Cause if that's all you're selling, is the bespoke services, then you know, the future is not as bright as the past has been. And so I think it's key to look for what are those outcomes or solutions that customers require and how you're going to meet 'em. And there's a lot of challenges. >> You continue to build value on the value that you've brought, and you don't lose sight of why that value is important. You carry that value proposition up the stack, but the- what you're delivering, as you said, becomes maybe a bigger or or different. >> And you are getting more solution oriented. I mean, you're not hardcore solutions yet, but we're seeing more and more of that. And that seems to be a trend. We've even seen in the database world, making things easier, connecting things. Not really an abstraction layer, which is sort of antithetical to your philosophy, but it creates a similar outcome in terms of simplicity. Yeah, you're smiling 'cause you guys always have a different angle, you know? >> Yeah, we've had this conversation. >> It's right, it's, Jassy used to say it's okay to be misunderstood. >> That's Right. For a long time. >> Yeah, right, guys, thanks so much for coming to theCUBE. I'm so glad we could make this happen. >> It's always good. Thank you. >> Thank you so much. >> All right, Dave Nicholson, for Lisa Martin, Dave Vellante, John Furrier in the Palo Alto studio. We're here at the Fira, wrapping out MWC23. Keep it right there, thanks for watching. (upbeat music)

>> Announcer: theCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (upbeat music) >> Hi everybody. Welcome back to Barcelona. We're here at the Fira Live, theCUBE's ongoing coverage of day two of MWC 23. Back in 2021 was my first Mobile World Congress. And you know what? It was actually quite an experience because there was nobody there. I talked to my friend, who's now my co-host, Chris Lewis about what to expect. He said, Dave, I don't think a lot of people are going to be there, but Danielle Royston is here and she's the CEO of Totoge. And that year when Erickson tapped out of its space she took out 60,000 square feet and built out Cloud City. If it weren't for Cloud City, there would've been no Mobile World Congress in June and July of 2021. DR is back. Great to see you. Thanks for coming on. >> It's great to see you. >> Chris. Awesome to see you. >> Yeah, Chris. Yep. >> Good to be back. Yep. >> You guys remember the narrative back then. There was this lady running around this crazy lady that I met at at Google Cloud next saying >> Yeah. Yeah. >> the cloud's going to take over Telco. And everybody's like, well, this lady's nuts. The cloud's been leaning in, you know? >> Yeah. >> So what do you think, I mean, what's changed since since you first caused all those ripples? >> I mean, I have to say that I think that I caused a lot of change in the industry. I was talking to leaders over at AWS yesterday and they were like, we've never seen someone push like you have and change so much in a short period of time. And Telco moves slow. It's known for that. And they're like, you are pushing buttons and you're getting people to change and thank you and keep going. And so it's been great. It's awesome. >> Yeah. I mean, it was interesting, Chris, we heard on the keynotes we had Microsoft, Satya came in, Thomas Curian came in. There was no AWS. And now I asked CMO of GSMA about that. She goes, hey, we got a great relationship with it, AWS. >> Danielle: Yeah. >> But why do you think they weren't here? >> Well, they, I mean, they are here. >> Mean, not here. Why do you think they weren't profiled? >> They weren't on the keynote stage. >> But, you know, at AWS, a lot of the times they want to be the main thing. They want to be the main part of the show. They don't like sharing the limelight. I think they just didn't want be on the stage with the Google CLoud guys and the these other guys, what they're doing they're building out, they're doing so much stuff. As Danielle said, with Telcos change in the ecosystem which is what's happening with cloud. Cloud's making the Telcos think about what the next move is, how they fit in with the way other people do business. Right? So Telcos never used to have to listen to anybody. They only listened to themselves and they dictated the way things were done. They're very successful and made a lot of money but they're now having to open up they're having to leverage the cloud they're having to leverage the services that (indistinct words) and people out provide and they're changing the way they work. >> So, okay in 2021, we talked a lot about the cloud as a potential disruptor, and your whole premise was, look you got to lean into the cloud, or you're screwed. >> Danielle: Yeah. >> But the flip side of that is, if they lean into the cloud too much, they might be screwed. >> Danielle: Yeah. >> So what's that equilibrium? Have they been able to find it? Are you working with just the disruptors or how's that? >> No I think they're finding it right. So my talk at MWC 21 was all about the cloud is a double-edged sword, right? There's two sides to it, and you definitely need to proceed through it with caution, but also I don't know that you have a choice, right? I mean, the multicloud, you know is there another industry that spends more on CapEx than Telco? >> No. >> Right. The hyperscalers are doing it right. They spend, you know, easily approaching over a $100 billion in CapEx that rivals this industry. And so when you have a player like that an industry driving, you know and investing so much Telco, you're always complaining how everyone's riding your coattails. This is the opportunity to write someone else's coattails. So jump on, right? I think you don't have a choice especially if other Telco competitors are using hyperscalers and you don't, they're going to be left behind. >> So you advise these companies all the time, but >> I mean, the issue is they're all they're all using all the hyperscalers, right? So they're the multi, the multiple relationships. And as Danielle said, the multi-layer of relationship they're using the hyperscalers to change their own internal operational environments to become more IT-centric to move to that software centric Telco. And they're also then with the hyperscalers going to market in different ways sometimes with them, sometimes competing with them. What what it means from an analyst point of view is you're suddenly changing the dynamic of a market where we used to have nicely well defined markets previously. Now they're, everyone's in it together, you know, it's great. And, and it's making people change the way they think about services. What I, what I really hope it changes more than anything else is the way the customers at the end of the, at the end of the supply, the value chain think this is what we can get hold of this stuff. Now we can go into the network through the cloud and we can get those APIs. We can draw on the mechanisms we need to to run our personal lives, to run our business lives. And frankly, society as a whole. It's really exciting. >> Then your premise is basically you were saying they should ride on the top over the top of the cloud vendor. >> Yeah. Right? >> No. Okay. But don't they lose the, all the data if they do that? >> I don't know. I mean, I think the hyperscalers are not going to take their data, right? I mean, that would be a really really bad business move if Google Cloud and Azure and and AWS start to take over that, that data. >> But they can't take it. >> They can't. >> From regulate, from sovereignty and regulation. >> They can't because of regulation, but also just like business, right? If they started taking their data and like no enterprises would use them. So I think, I think the data is safe. I think you, obviously every country is different. You got to understand the different rules and regulations for data privacy and, and how you keep it. But I think as we look at the long term, right and we always talk about 10 and 20 years there's going to be a hyperscaler region in every country right? And there will be a way for every Telco to use it. I think their data will be safe. And I think it just, you're going to be able to stand on on the shoulders of someone else for once and use the building blocks of software that these guys provide to make better experiences for subscribers. >> You guys got to explain this to me because when I say data I'm not talking about, you know, personal information. I'm talking about all the telemetry, you know, all the all the, you know the plumbing. >> Danielle: Yeah. >> Data, which is- >> It will increasingly be shared because you need to share it in order to deliver the services in the streamline efficient way that needs to be deliver. >> Did I hear the CEO of Ericsson Wright where basically he said, we're going to charge developers for access to that data through APIs. >> What the Ericsson have done, obviously with the Vage acquisition is they want to get into APIs. So the idea is you're exposing features, quality policy on demand type features for example, or even pulling we still use that a lot of SMS, right? So pulling those out using those APIs. So it will be charged in some way. Whether- >> Man: Like Twitter's charging me for APIs, now I API calls, you >> Know what it is? I think it's Twilio. >> Man: Oh, okay. >> Right. >> Man: No, no, that's sure. >> There's no reason why telcos couldn't provide a Twilio like service itself. >> It's a horizontal play though right? >> Danielle: Correct because developers need to be charged by the API. >> But doesn't there need to be an industry standard to do that as- >> Well. I think that's what they just announced. >> Industry standard. >> Danielle: I think they just announced that. Yeah. Right now I haven't looked at that API set, right? >> There's like eight of them. >> There's eight of them. Twilio has, it's a start you got to start somewhere Dave. (crosstalk) >> And there's all, the TM forum is all the other standard >> Right? Eight is better than zero- >> Right? >> Haven't got plenty. >> I mean for an industry that didn't really understand APIs as a feature, as a product as a service, right? For Mats Granryd, the deputy general of GSMA to stand on the keynote stage and say we partnered and we're unveiling, right. Pay by the use APIs. I was for it. I was like, that is insane. >> I liked his keynote actually, because I thought he was going to talk about how many attendees and how much economic benefiting >> Danielle: We're super diverse. >> He said, I would usually talk about that and you know greening in the network by what you did talk about a little bit. But, but that's, that surprised me. >> Yeah. >> But I've seen in the enterprise this is not my space as, you know, you guys don't live this but I've seen Oracle try to get developers. IBM had to pay $35 billion trying to get for Red Hat to get developers, right? EMC used to have a thing called EMC code, failed. >> I mean they got to do something, right? So 4G they didn't really make the business case the ROI on the investment in the network. Here we are with 5G, same discussion is having where's the use case? How are we going to monetize and make the ROI on this massive investment? And now they're starting to talk about 6G. Same fricking problem is going to happen again. And so I think they need to start experimenting with new ideas. I don't know if it's going to work. I don't know if this new a API network gateway theme that Mats talked about yesterday will work. But they need to start unbundling that unlimited plan. They need to start charging people who are using the network more, more money. Those who are using it less, less. They need to figure this out. This is a crisis for them. >> Yeah our own CEO, I mean she basically said, Hey, I'm for net neutrality, but I want to be able to charge the people that are using it more and more >> To make a return on, on a capital. >> I mean it costs billions of dollars to build these networks, right? And they're valuable. We use them and we talked about this in Cloud City 21, right? The ability to start building better metaverses. And I know that's a buzzword and everyone hates it, but it's true. Like we're working from home. We need- there's got to be a better experience in Zoom in 2D, right? And you need a great network for that metaverse to be awesome. >> You do. But Danielle, you don't need cellular for doing that, do you? So the fixed network is as important. >> Sure. >> And we're at mobile worlds. But actually what we beginning to hear and Crystal Bren did say this exactly, it's about the comp the access is sort of irrelevant. Fixed is better because it's more the cost the return on investment is better from fiber. Mobile we're going to change every so many years because we're a new generation. But we need to get the mechanism in place to deliver that. I actually don't agree that we should everyone should pay differently for what they use. It's a universal service. We need it as individuals. We need to make it sustainable for every user. Let's just not go for the biggest user. It's not, it's not the way to build it. It won't work if you do that you'll crash the system if you do that. And, and the other thing which I disagree on it's not about standing on the shoulders and benefiting from what- It's about cooperating across all levels. The hyperscalers want to work with the telcos as much as the telcos want to work with the hyperscalers. There's a lot of synergy there. There's a lot of ways they can work together. It's not one or the other. >> But I think you're saying let the cloud guys do the heavy lifting and I'm - >> Yeah. >> Not at all. >> And so you don't think so because I feel like the telcos are really good at pipes. They've always been good at pipes. They're engineers. >> Danielle: Yeah. >> Are they hanging on to the to the connectivity or should they let that go and well and go toward the developer. >> I mean AWS had two announcements on the 21st a week before MWC. And one was that telco network builder. This is literally being able to deploy a network capability at AWS with keystrokes. >> As a managed service. >> Danielle: Correct. >> Yeah. >> And so I don't know how the telco world I felt the shock waves, right? I was like, whoa, that seems really big. Because they're taking something that previously was like bread and butter. This is what differentiates each telco and now they've standardized it and made it super easy so anyone can do it. Now do I think the five nines of super crazy hardcore network criteria will be built on AWS this way? Probably not, but no >> It's not, it's not end twin. So you can't, no. >> Right. But private networks could be built with this pretty easily, right? And so telcos that don't have as much funding, right. Smaller, more experiments. I think it's going to change the way we think about building networks in telcos >> And those smaller telcos I think are going to be more developer friendly. >> Danielle: Yeah. >> They're going to have business models that invite those developers in. And that's, it's the disruption's going to come from the ISVs and the workloads that are on top of that. >> Well certainly what Dish is trying to do, right? Dish is trying to build a- they launched it reinvent a developer experience. >> Dave: Yeah. >> Right. Built around their network and you know, again I don't know, they were not part of this group that designed these eight APIs but I'm sure they're looking with great intent on what does this mean for them. They'll probably adopt them because they want people to consume the network as APIs. That's their whole thing that Mark Roanne is trying to do. >> Okay, and then they're doing open ran. But is it- they're not really cons- They're not as concerned as Rakuten with the reliability and is that the right play? >> In this discussion? Open RAN is not an issue. It really is irrelevant. It's relevant for the longer term future of the industry by dis aggregating and being able to share, especially ran sharing, for example, in the short term in rural environments. But we'll see some of that happening and it will change, but it will also influence the way the other, the existing ran providers build their services and offer their value. Look you got to remember in the relationship between the equipment providers and the telcos are very dramatically. Whether it's Ericson, NOKIA, Samsung, Huawei, whoever. So those relations really, and the managed services element to that depends on what skills people have in-house within the telco and what service they're trying to deliver. So there's never one size fits all in this industry. >> You're very balanced in your analysis and I appreciate that. >> I try to be. >> But I am not. (chuckles) >> So when Dr went off, this is my question. When Dr went off a couple years ago on the cloud's going to take over the world, you were skeptical. You gave a approach. Have you? >> I still am. >> Have you moderated your thoughts on that or- >> I believe the telecom industry is is a very strong industry. It's my industry of course I love it. But the relationship it is developing much different relationships with the ecosystem players around it. You mentioned developers, you mentioned the cloud players the equipment guys are changing there's so many moving parts to build the telco of the future that every country needs a very strong telco environment to be able to support the site as a whole. People individuals so- >> Well I think two years ago we were talking about should they or shouldn't they, and now it's an inevitability. >> I don't think we were Danielle. >> All using the hyperscalers. >> We were always going to need to transform the telcos from the conservative environments in which they developed. And they've had control of everything in order to reduce if they get no extra revenue at all, reducing the cost they've got to go on a cloud migration path to do that. >> Amenable. >> Has it been harder than you thought? >> It's been easier than I thought. >> You think it's gone faster than >> It's gone way faster than I thought. I mean pushing on this flywheel I thought for sure it would take five to 10 years it is moving. I mean the maths comp thing the AWS announcements last week they're putting in hyperscalers in Saudi Arabia which is probably one of the most sort of data private places in the world. It's happening really fast. >> What Azure's doing? >> I feel like I can't even go to sleep. Because I got to keep up with it. It's crazy. >> Guys. >> This is awesome. >> So awesome having you back on. >> Yeah. >> Chris, thanks for co-hosting. Appreciate you stay here. >> Yep. >> Danielle, amazing. We'll see you. >> See you soon. >> A lot of action here. We're going to come out >> Great. >> Check out your venue. >> Yeah the Togi buses that are outside. >> The big buses. You got a great setup there. We're going to see you on Wednesday. Thanks again. >> Awesome. Thanks. >> All right. Keep it right there. We'll be back to wrap up day two from MWC 23 on theCUBE. (upbeat music)

>> Narrator: theCUBE's live coverage is made possible by funding from Dell Technologies, creating technologies that drive human progress. (upbeat music) >> Welcome back to the Fira in Barcelona. This is Dave Vellante with David Nicholson. Lisa Martin is also here. This is day two of our coverage of MWC 23 on theCUBE. We're super excited. We're in between hall four and five. Stop by if you're here. Dennis Hoffman is here. He's the senior vice president and general manager of the Telecom systems business at Dell Technologies, and he's joined by Yousef Khalidi, who's the corporate vice president of Azure for Operators from Microsoft. Gents, Welcome. >> Thanks, Dave. >> Thank you. >> So we saw Satya in the keynote. He wired in. We saw T.K. came in. No AWS. I don't know. They're maybe not part of the show, but maybe next year they'll figure it out. >> Indeed, indeed. >> Lots of stuff happened in the Telecom, but the Azure operator distributed service is the big news, you guys got here. What's that all about? >> Oh, first of all, we changed the name. >> Oh, you did? >> You did? >> Oh, yeah. We have a real name now. It's called the Azure Operator Nexus. >> Oh, I like Nexus better than that. >> David: That's much better, much better. >> Dave: The engineers named it first time around. >> I wish, long story, but thank you for our marketing team. But seriously, not only did we rename the platform, we expanded the platform. >> Dave: Yeah. >> So it now covers the whole spectrum from the far-edge to the public cloud as well, including the near-edge as well. So essentially, it's a hybrid platform that can also run network functions. So all these operators around you, they now have a platform which combines cloud technologies with the choice where they want to run, optimized for the network. >> Okay and so, you know, we've talked about the disaggregation of the network and how you're bringing kind of engineered systems to the table. We've seen this movie before, but Dennis, there are differences, right? I mean, you didn't really have engineered systems in the 90s. You didn't have those integration points. You really didn't have the public cloud, you didn't have AI. >> Right. >> So you have all those new powers that you can tap, so give us the update from your perspective, having now spent a day and a half here. What's the vibe, what's the buzz, and what's your take on everything? >> Yeah, I think to build on what Yousef said, there's a lot going on with people still trying to figure out exactly how to architect the Telecom network of the future. They know it's got to have a lot to do with cloud. It does have some pretty significant differences, one of those being, there's definitely got to be a hybrid component because there are pieces of the Telecom network that even when modernized will not end up centralized, right? They're going to be highly distributed. I would say though, you know, we took away two things, yesterday, from all the meetings. One, people are done, I think the network operators are done, questioning technology readiness. They're now beginning to wrestle with operationalization of it all, right? So it's like, okay, it's here. I can in fact build a modern network in a very cloud native way, but I've got to figure out how to do that all. And another big part of it is the ecosystem and certainly the partnership long standing between Dell and Microsoft which we're extending into this space is part of that, making it easier on people to actually acquire, deploy, and importantly, support these new technologies. >> So a lot of the traditional carriers, like you said, they're sort of beyond the technology readiness. Jose Maria Alvarez in the keynote said there are three pillars to the future Telecom network. He said low latency, programmable networks, and then cloud and edge, kind of threw that in. You agree with that, Yousef? (Dave and Yousef speaking altogether) >> I mean, we've been for years talking about the cloud and edge. >> Yeah. >> Satya for years had the same graphic. We still have it. Today, we have expanded the graphic a bit to include the network as one, because you can have a cloud without connectivity as well but this is very, very, very, very much true. >> And so the question then, Dennis, is okay, you've got disruptors, we had Dish on yesterday. >> Oh, did you? Good. >> Yeah, yeah, and they're talking about what they're doing with, you know, ORAN and all the applications, really taking account of it. What I see is a developer friendly, you know, environment. You got the carriers talking about how they're going to charge developers for APIs. I think they've published eight APIs which is nowhere near enough. So you've got that sort of, you know, inertia and yet, you have the disruptors that are going to potentially be a catalyst to, you know, cross the chasm, if you will. So, you know, put on your strategy hat. >> Yeah. >> Dave: How do you see that playing out? >> Well, they're trying to tap into three things, the disruptors. You know, I think the thesis is, "If I get to a truly cloud native, communications network first, I ought to have greater agility so that I can launch more services and create more revenue streams. I ought to be lower cost in terms of both acquisition cost and operating cost, right, and I ought to be able to create scale between my IT organization, everything I know how to do there and my Telecom network." You know, classic, right? Better, faster, cheaper if I embrace cloud early on. And people like Dish, you know, they have a clean sheet of paper with which to do that. So innovation and rate of innovation is huge for them. >> So what would you do? We put your Clay Christensen hat on, now. What if you were at a traditional Telco who's like, complaining about- >> You're going to get me in trouble. >> Dave: Come on, come on. >> Don't do it. >> Dave: Help him out. Help him out, help him out. So if, you know, they're complaining about CapEx, they're highly regulated, right, they want net neutrality but they want to be able to sort of dial up the cost of those using the network. So what would you do? Would you try to disrupt yourself? Would you create a skunkworks? Would you kind of spin off a disruptor? That's a real dilemma for those guys. >> Well for mobile network operators, the beauty of 5G is it's the first cloud native cellular standard. So I don't know if anybody's throwing these terms around, but 5G SA is standalone, right? >> Dave: Yeah, yeah. >> So a lot of 'em, it's not a skunkworks. They're just literally saying, "I've got to have a 5G network." And some of 'em are deciding, "I'm going to stand it up all by itself." Now, that's duplicative expense in a lot of ways, but it creates isolation from the two networks. Others are saying, "No, it's got to be NSA. I've got to be able to combine 4G and 5G." And then you're into the brownfield thing. >> That's the hybrid. >> Not hybrid as in cloud, but hybrid as in, you know. >> Yeah, yeah. >> It's a converge network. >> Dave: Yeah, yeah. >> So, you know, I would say for a lot of them, they're adopting, probably rightly so, a wait and see attitude. One thing we haven't talked about and you got to get on the table, their high order bit is resilience. >> Dave: Yeah, totally. >> David: Yeah. >> Right? Can't go down. It's national, secure infrastructure, first responder. >> Indeed. >> Anytime you ask them to embrace any new technology, the first thing that they have to work through in their minds is, you know, "Is the juice worth the squeeze? Like, can I handle the risk?" >> But you're saying they're not questioning the technology. Aren't they questioning ORAN in terms of the quality of service, or are they beyond that? >> Dennis: They're questioning the timing, not the inevitability. >> Okay, so they agree that ORAN is going to be open over time. >> At some point, RAN will be cloud native, whether it's ORAN the spec, open RAN the concept, (Yousef speaking indistinctly) >> Yeah. >> Virtual RAN. But yeah, I mean I think it seems pretty evident at this point that the mainframe will give way to open systems once again. >> Dave: Yeah, yeah, yeah. >> ERAN, ecosystem RAN. >> Any RAN. (Dave laughing) >> You don't have to start with the ORAN where they're inside the house. So as you probably know, our partner AT&T started with the core. >> Dennis: They almost all have. >> And they've been on the virtualization path since 2014 and 15. And what we are working with them on is the hybrid cloud model to expand all the way, if you will, as I mentioned to the far-edge or the public cloud. So there's a way to be in the brownfield environment, yet jump on the new bandwagon of technology without necessarily taking too much risk, because you're quite right. I mean, resiliency, security, service assurance, I mean, for example, AT&T runs the first responder network for the US on their network, on our platform, and I'm personally very familiar of how high the bar is. So it's doable, but you need to go in stages, of course. >> And they've got to do that integration. >> Yes. >> They do. >> And Yousef made a great point. Like, out of the top 30 largest Telcos by CapEx outside of China, three quarters of them have virtualized their core. So the cloudification, if you will, software definition run on industry standard hardware, embraced cloud native principles, containerized apps, that's happened in the core. It's well accepted. Now it's just a ripple-down through the network which will happen as and when things are faster, better, cheaper. >> Right. >> So as implemented, what does this look like? Is it essentially what we used to loosely refer to as Azure stacked software, running with Dell optimized Telecom infrastructure together, sometimes within a BBU, out in a hybrid cloud model communicating back to Azure locations in some cases? Is that what we're looking at? >> Approximately. So you start with the near-edge, okay? So the near-edge lives in the operator's data centers, edges, whatever the case may be, built out of off the shelf hardware. Dell is our great partner there but in principle, it could be different mix and match. So once you have that true near-edge, then you can think of, "Okay, how can I make sure this environment is as uniform, same APIs, same everything, regardless what the physical location is?" And this is key, key for the network function providers and the NEPs because they need to be able to port once, run everywhere, and it's key for the operator to reduce their costs. You want to teach your workforce, your operations folks, if you will, how to manage this system one time, to automation and so forth. So, and that is actually an expansion of the Azure capabilities that people are familiar with in a public cloud, projected into different locations. And we have technology called Arc which basically models everything. >> Yeah, yeah. >> So if you have trained your IT side, you are halfway there, how to manage your new network. Even though of course the network is carrier graded, there's different gear. So yes, what you said, a lot of it is true but the actual components, whatever they might be running, are carrier grade, highly optimized, the next images and our solution is not a DIY solution, okay? I know you cater to a wide spectrum here but for us, we don't believe in the TCO. The proper TCO can be achieved by just putting stuff by yourself. We just published a report with Analysys Mason that shows that our approach will save 36 percent of the cost compared to a DIY approach. >> Dave: What percent? >> 36 percent. >> Dave: Of the cost? >> Of, compared to DIY, which is already cheaper than classical models. >> And there's a long history of fairly failed DIY, right, >> Yeah. >> That preceded this. As in the early days of public cloud, the network operators wrestled with, "Do I have to become one to survive?" >> Dave: Yeah. Right. >> So they all ended up having cloud projects and by and large, they've all dematerialized in favor of this. >> Yeah, and it's hard for them to really invest at scale. Let me give you an example. So, your biggest tier one operator, without naming anybody, okay, how many developers do they have that can build and maintain an OS image, or can keep track of container technology, or build monitoring at scale? In our company, we have literally thousands of developers doing it already for the cloud and all we're doing for the operator segment is customizing it and focusing it at the carrier grade aspects of it. But so, I don't have half a dozen exterior experts. I literally have a building of developers who can do that and I'm being literal, here. So it's a scale thing. Once you have a product that you can give to multiple people, everybody benefits. >> Dave: Yeah, and the carriers are largely, they're equipment engineers in a large setting. >> Oh, they have a tough job. I always have total respect what they do. >> Oh totally, and a lot of the work happens, you know, kind of underground and here they are. >> They are network operators. >> They don't touch. >> It's their business. >> Right, absolutely, and they're good at it. They're really good at it. That's right. You know, you think about it, we love to, you know, poke fun at the big carriers, but think about what happened during the pandemic. When they had us shift everything to remote work, >> Dennis: Yes. >> Landline traffic went through the roof. You didn't even notice. >> Yep. That's very true. >> I mean, that's the example. >> That's very true. >> However, in the future where there's innovation and it's going to be driven by developers, right, that's where the open ecosystem comes in. >> Yousef: Indeed. >> And that's the hard transition for a lot of these folks because the developers are going to win that with new workloads, new applications that we can't even think of. >> Dennis: Right. And a lot of it is because if you look at it, there's the fundamental back strategy hat back on, fundamental dynamics of the industry, forced investment, flat revenues. >> Dave: Yeah. Right. >> Very true. >> Right? Every few years, a new G comes out. "Man, I got to retool this massive thing and where I can't do towers, I'm dropping fiber or vice a versa." And meanwhile, most diversification efforts into media have failed. They've had to unwind them and resell them. There's a lot of debt in the industry. >> Yousef: Yeah. >> Dennis: And so, they're looking for that next big, adjacent revenue stream and increasingly deciding, "If I don't modernize my network, I can't get it." >> Can't do it. >> Right, and again, what I heard from some of the carriers in the keynote was, "We're going to charge for API access 'cause we have data in the network." Okay, but I feel like there's a lot more innovation beyond that that's going to come from the disruptors. >> Dennis: Oh yeah. >> Yousef: Yes. >> You know, that's going to blow that away, right? And then that may not be the right model. We'll see, you know? I mean, what would Microsoft do? They would say, "Here, here's a platform. Go develop." >> No, I'll tell you. We are actually working with CAMARA and GSMA on the whole API layer. We actually announced a service as well as (indistinct). >> Dave: Yeah, yeah, right. >> And the key there, frankly, in my opinion, are not the disruptors as in operators. It's the ISV community. You want to get developers that can write to a global set of APIs, not per Telco APIs, such that they can do the innovation. I mean, this is what we've seen in other industries, >> Absolutely. >> That I critically can think of. >> This is the way they get a slice of that pie, right? The recent history of this industry is one where 4G LTE begot the smartphone and app store era, a bevy of consumer services, and almost every single profit stream went somewhere other than the operator, right? >> Yousef: Someone else. So they're looking at this saying, "Okay, 5G is the enterprise G and there's going to be a bevy of applications that are business service related, based on 5G capability and I can't let the OTT, over the top, thing happen again." >> Right. >> They'll say that. "We cannot let this happen." >> "We can't let this happen again." >> Okay, but how do they, >> Yeah, how do they make that not happen? >> Not let it happen again? >> Eight APIs, Dave. The answer is eight APIs. No, I mean, it's this approach. They need to make it easy to work with people like Yousef and more importantly, the developer community that people like Yousef and his company have found a way to harness. And by the way, they need to be part of that developer community themselves. >> And they're not, today. They're not speaking that developer language. >> Right. >> It's hard. You know, hey. >> Dennis: Hey, what's the fastest way to sell an enterprise, a business service? Resell Azure, Teams, something, right? But that's a resale. >> Yeah, that's a resale thing. >> See, >> That's not their service. >> They also need to free their resources from all the plumbing they do and leave it to us. We are plumbers, okay? >> Dennis: We are proud plumbers. >> We are proud plumbers. I'm a plumber. I keep telling people this thing. We had the same discussion with banks and enterprises 10 years ago, by the way. Don't do the plumbing. Go add value on the top. Retool your workforce to do applications and work with ISVs to the verticals, as opposed to either reselling, which many do, or do the plumbing. You'd be surprised. Traditionally, many operators do around, "I want to plumb this thing to get this small interrupt per second." Like, who cares? >> Well, 'cause they made money on connectivity. >> Yes. >> And we've seen this before. >> And in a world without telephone poles and your cables- >> Hey, if what you have is a hammer, everything's a nail, right? And we sell connectivity services and that's what we know how to do, and that both build and sell. And if that's no longer driving a revenue stream sufficient to cover this forced investment march, not to mention Huawei rip and government initiatives to pull infrastructure out and accelerate investment, they got to find new ways. >> I mean, the regulations have been tough, right? They don't go forward and ask for permission. They really can't, right? They have to be much more careful. >> Dennis: It is tough. >> So, we don't mean to sound like it's easy for these guys. >> Dennis: No, it's not. >> But it does require a new mindset, new skillsets, and I think some of 'em are going to figure it out and then pff, the wave, and you guys are going to be riding that wave. >> We're going to try. >> Definitely. Definitely. >> As a veteran of working with both Dell and Microsoft, specifically Azure on things, I am struck by how you're very well positioned in this with Microsoft in particular. Because of Azure's history, coming out of the on-premises world that Microsoft knows so well, there's a natural affinity to the hybrid nature of Telecom. We talk about edge, we talk about hybrid, this is it, absolutely the center of it. So it seems like a- >> Yousef: Indeed. Actually, if you look at the history of Azure, from day one, and I was there from day one, we always spoke of the hybrid model. >> Yeah. >> The third point, we came from the on-premises world. >> David: Right. >> And don't get me wrong, I want people to use the public cloud, but I also know due to physics, regulation, geopolitical boundaries, there's something called on-prem, something called an edge here. I want to add something else. Remember our deal on how we are partner-centric? We're applying the same playbook, here. So, you know, for every dollar we make, so many of it's been done by the ecosystem. Same applies here. So we have announced partnerships with Ericson, Nokia, (indistinct), all the names, and of course with Dell and many others. The ecosystem has to come together and customers must retain their optionality to drum up whatever they are on. So it's the same playbook, with this. >> And enterprise technology companies are, actually, really good at, you know, decoding the customer, figuring out specific requirements, making some mistakes the first time through and then eventually getting it right. And as these trends unfold, you know, you're in a good position, I think, as are others and it's an exciting time for enterprise tech in this industry, you know? >> It really is. >> Indeed. >> Dave: Guys, thanks so much for coming on. >> Thank you. >> Dave: It's great to see you. Have a great rest of the show. >> Thank you. >> Thanks, Dave. Thank you, Dave. >> All right, keep it right there. John Furrier is live in our studio. He's breaking down all the news. Go to siliconangle.com to go to theCUBE.net. Dave Vellante, David Nicholson and Lisa Martin, we'll be right back from the theater in Barcelona, MWC 23 right after this short break. (relaxing music)

(uplifting music) >> Hello, welcome back to theCUBE's coverage of CloudNativeSecurityCon, the inaugural event, in Seattle. I'm John Furrier, host of theCUBE, here in the Palo Alto Studios. We're calling it theCUBE Center. It's kind of like our Sports Center for tech. It's kind of remote coverage. We've been doing this now for a few years. We're going to amp it up this year as more events are remote, and happening all around the world. So, we're going to continue the coverage with this segment focusing on the data stack, entrepreneurial opportunities around all things security, and as, obviously, data's involved. And our next guest is a friend of theCUBE, and CUBE alumni from 2013, entrepreneur himself, turned, now, venture capitalist angel investor, with his own firm, Opher Kahane, Managing Director, Sonoma Ventures. Formerly the founder of Origami, sold to Intuit a few years back. Focusing now on having a lot of fun, angel investing on boards, focusing on data-driven applications, and stacks around that, and all the stuff going on in, really, in the wheelhouse for what's going on around security data. Opher, great to see you. Thanks for coming on. >> My pleasure. Great to be back. It's been a while. >> So you're kind of on Easy Street now. You did the entrepreneurial venture, you've worked hard. We were on together in 2013 when theCUBE just started. XCEL Partners had an event in Stanford, XCEL, and they had all the features there. We interviewed Satya Nadella, who was just a manager at Microsoft at that time, he was there. He's now the CEO of Microsoft. >> Yeah, he was. >> A lot's changed in nine years. But congratulations on your venture you sold, and you got an exit there, and now you're doing a lot of investments. I'd love to get your take, because this is really the biggest change I've seen in the past 12 years, around an inflection point around a lot of converging forces. Data, which, big data, 10 years ago, was a big part of your career, but now it's accelerated, with cloud scale. You're seeing people building scale on top of other clouds, and becoming their own cloud. You're seeing data being a big part of it. Cybersecurity kind of has not really changed much, but it's the most important thing everyone's talking about. So, developers are involved, data's involved, a lot of entrepreneurial opportunities. So I'd love to get your take on how you see the current situation, as it relates to what's gone on in the past five years or so. What's the big story? >> So, a lot of big stories, but I think a lot of it has to do with a promise of making value from data, whether it's for cybersecurity, for Fintech, for DevOps, for RevTech startups and companies. There's a lot of challenges in actually driving and monetizing the value from data with velocity. Historically, the challenge has been more around, "How do I store data at massive scale?" And then you had the big data infrastructure company, like Cloudera, and MapR, and others, deal with it from a scale perspective, from a storage perspective. Then you had a whole layer of companies that evolved to deal with, "How do I index massive scales of data, for quick querying, and federated access, et cetera?" But now that a lot of those underlying problems, if you will, have been solved, to a certain extent, although they're always being stretched, given the scale of data, and its utility is becoming more and more massive, in particular with AI use cases being very prominent right now, the next level is how to actually make value from the data. How do I manage the full lifecycle of data in complex environments, with complex organizations, complex use cases? And having seen this from the inside, with Origami Logic, as we dealt with a lot of large corporations, and post-acquisition by Intuit, and a lot of the startups I'm involved with, it's clear that we're now onto that next step. And you have fundamental new paradigms, such as data mesh, that attempt to address that complexity, and responsibly scaling access, and democratizing access in the value monetization from data, across large organizations. You have a slew of startups that are evolving to help the entire lifecycle of data, from the data engineering side of it, to the data analytics side of it, to the AI use cases side of it. And it feels like the early days, to a certain extent, of the revolution that we've seen in transition from traditional databases, to data warehouses, to cloud-based data processing, and big data. It feels like we're at the genesis of that next wave. And it's super, super exciting, for me at least, as someone who's sitting more in the coach seat, rather than being on the pitch, and building startups, helping folks as they go through those motions. >> So that's awesome. I want to get into some of these data infrastructure dynamics you mentioned, but before that, talk to the audience around what you're working on now. You've been a successful entrepreneur, you're focused on angel investing, so, super-early seed stage. What kind of deals are you looking at? What's interesting to you? What is Sonoma Ventures looking for, and what are some of the entrepreneurial dynamics that you're seeing right now, from a startup standpoint? >> Cool, so, at a macro level, this is a little bit of background of my history, because it shapes very heavily what it is that I'm looking at. So, I've been very fortunate with entrepreneurial career. I founded three startups. All three of them are successful. Final two were sold, the first one merged and went public. And my third career has been about data, moving data, passing data, processing data, generating insights from it. And, at this phase, I wanted to really evolve from just going and building startup number four, from going through the same motions again. A 10 year adventure, I'm a little bit too old for that, I guess. But the next best thing is to sit from a point whereby I can be more elevated in where I'm dealing with, and broaden the variety of startups I'm focused on, rather than just do your own thing, and just go very, very deep into it. Now, what specifically am I focused on at Sonoma Ventures? So, basically, looking at what I refer to as a data-driven application stack. Anything from the low-level data infrastructure and cloud infrastructure, that helps any persona in the data universe maximize value for data, from their particular point of view, for their particular role, whether it's data analysts, data scientists, data engineers, cloud engineers, DevOps folks, et cetera. All the way up to the application layer, in applications that are very data-heavy. And what are very typical data-heavy applications? FinTech, cyber, Web3, revenue technologies, and product and DevOps. So these are the areas we're focused on. I have almost 23 or 24 startups in the portfolio that span all these different areas. And this is in terms of the aperture. Now, typically, focus on pre-seed, seed. Sometimes a little bit later stage, but this is the primary focus. And it's really about partnering with entrepreneurs, and helping them make, if you will, original mistakes, avoid the mistakes I made. >> Yeah. >> And take it to the next level, whatever the milestone they're driving with. So I'm very, very hands-on with many of those startups. Now, what is it that's happening right now, initially, and why is it so exciting? So, on one hand, you have this scaling of data and its complexity, yet lagging value creation from it, across those different personas we've touched on. So that's one fundamental opportunity which is secular. The other one, which is more a cyclic situation, is the fact that we're going through a down cycle in tech, as is very evident in the public markets, and everything we're hearing about funding going slower and lower, terms shifting more into the hands of typical VCs versus entrepreneur-friendly market, and so on and so forth. And a very significant amount of layoffs. Now, when you combine these two trends together, you're observing a very interesting thing, that a lot of folks, really bright folks, who have sold a startup to a company, or have been in the guts of the large startup, or a large corporation, have, hands-on, experienced all those challenges we've spoken about earlier, in turf, maximizing value from data, irrespective of their role, in a specific angle, or vantage point they have on those challenges. So, for many of them, it's an opportunity to, "Now, let me now start a startup. I've been laid off, maybe, or my company's stock isn't doing as well as it used to, as a large corporation. Now I have an opportunity to actually go and take my entrepreneurial passion, and apply it to a product and experience as part of this larger company." >> Yeah. >> And you see a slew of folks who are emerging with these great ideas. So it's a very, very exciting period of time to innovate. >> It's interesting, a lot of people look at, I mean, I look at Snowflake as an example of a company that refactored data warehouses. They just basically took data warehouse, and put it on the cloud, and called it a data cloud. That, to me, was compelling. They didn't pay any CapEx. They rode Amazon's wave there. So, a similar thing going on with data. You mentioned this, and I see it as an enabling opportunity. So whether it's cybersecurity, FinTech, whatever vertical, you have an enablement. Now, you mentioned data infrastructure. It's a super exciting area, as there's so many stacks emerging. We got an analytics stack, there's real-time stacks, there's data lakes, AI stack, foundational models. So, you're seeing an explosion of stacks, different tools probably will emerge. So, how do you look at that, as a seasoned entrepreneur, now investor? Is that a good thing? Is that just more of the market? 'Cause it just seems like more and more kind of decomposed stacks targeted at use cases seems to be a trend. >> Yeah. >> And how do you vet that, is it? >> So it's a great observation, and if you take a step back and look at the evolution of technology over the last 30 years, maybe longer, you always see these cycles of expansion, fragmentation, contraction, expansion, contraction. Go decentralize, go centralize, go decentralize, go centralize, as manifested in different types of technology paradigms. From client server, to storage, to microservices, to et cetera, et cetera. So I think we're going through another big bang, to a certain extent, whereby end up with more specialized data stacks for specific use cases, as you need performance, the data models, the tooling to best adapt to the particular task at hand, and the particular personas at hand. As the needs of the data analysts are quite different from the needs of an NL engineer, it's quite different from the needs of the data engineer. And what happens is, when you end up with these siloed stacks, you end up with new fragmentation, and new gaps that need to be filled with a new layer of innovation. And I suspect that, in part, that's what we're seeing right now, in terms of the next wave of data innovation. Whether it's in a service of FinTech use cases, or cyber use cases, or other, is a set of tools that end up having to try and stitch together those elements and bridge between them. So I see that as a fantastic gap to innovate around. I see, also, a fundamental need in creating a common data language, and common data management processes and governance across those different personas, because ultimately, the same underlying data these folks need, albeit in different mediums, different access models, different velocities, et cetera, the subject matter, if you will, the underlying raw data, and some of the taxonomies right on top of it, do need to be consistent. So, once again, a great opportunity to innovate, whether it's about semantic layers, whether it's about data mesh, whether it's about CICD tools for data engineers, and so on and so forth. >> I got to ask you, first of all, I see you have a friend you brought into the interview. You have a dog in the background who made a little cameo appearance. And that's awesome. Sitting right next to you, making sure everything's going well. On the AI thing, 'cause I think that's the hot trend here. >> Yeah. >> You're starting to see, that ChatGPT's got everyone excited, because it's kind of that first time you see kind of next-gen functionality, large-language models, where you can bring data in, and it integrates well. So, to me, I think, connecting the dots, this kind of speaks to the beginning of what will be a trend of really blending of data stacks together, or blending of models. And so, as more data modeling emerges, you start to have this AI stack kind of situation, where you have things out there that you can compose. It's almost very developer-friendly, conceptually. This is kind of new, but kind of the same concept's been working on with Google and others. How do you see this emerging, as an investor? What are some of the things that you're excited about, around the ChatGPT kind of things that's happening? 'Cause it brings it mainstream. Again, a million downloads, fastest applications get a million downloads, even among all the successes. So it's obviously hit a nerve. People are talking about it. What's your take on that? >> Yeah, so, I think that's a great point, and clearly, it feels like an iPhone moment, right, to the industry, in this case, AI, and lots of applications. And I think there's, at a high level, probably three different layers of innovation. One is on top of those platforms. What use cases can one bring to the table that would drive on top of a ChatGPT-like service? Whereby, the startup, the company, can bring some unique datasets to infuse and add value on top of it, by custom-focusing it and purpose-building it for a particular use case or particular vertical. Whether it's applying it to customer service, in a particular vertical, applying it to, I don't know, marketing content creation, and so on and so forth. That's one category. And I do know that, as one of my startups is in Y Combinator, this season, winter '23, they're saying that a very large chunk of the YC companies in this cycle are about GPT use cases. So we'll see a flurry of that. The next layer, the one below that, is those who actually provide those platforms, whether it's ChatGPT, whatever will emerge from the partnership with Microsoft, and any competitive players that emerge from other startups, or from the big cloud providers, whether it's Facebook, if they ever get into this, and Google, which clearly will, as they need to, to survive around search. The third layer is the enabling layer. As you're going to have more and more of those different large-language models and use case running on top of it, the underlying layers, all the way down to cloud infrastructure, the data infrastructure, and the entire set of tools and systems, that take raw data, and massage it into useful, labeled, contextualized features and data to feed the models, the AI models, whether it's during training, or during inference stages, in production. Personally, my focus is more on the infrastructure than on the application use cases. And I believe that there's going to be a massive amount of innovation opportunity around that, to reach cost-effective, quality, fair models that are deployed easily and maintained easily, or at least with as little pain as possible, at scale. So there are startups that are dealing with it, in various areas. Some are about focusing on labeling automation, some about fairness, about, speaking about cyber, protecting models from threats through data and other issues with it, and so on and so forth. And I believe that this will be, too, a big driver for massive innovation, the infrastructure layer. >> Awesome, and I love how you mentioned the iPhone moment. I call it the browser moment, 'cause it felt that way for me, personally. >> Yep. >> But I think, from a business model standpoint, there is that iPhone shift. It's not the BlackBerry. It's a whole 'nother thing. And I like that. But I do have to ask you, because this is interesting. You mentioned iPhone. iPhone's mostly proprietary. So, in these machine learning foundational models, >> Yeah. >> you're starting to see proprietary hardware, bolt-on, acceleration, bundled together, for faster uptake. And now you got open source emerging, as two things. It's almost iPhone-Android situation happening. >> Yeah. >> So what's your view on that? Because there's pros and cons for either one. You're seeing a lot of these machine learning laws are very proprietary, but they work, and do you care, right? >> Yeah. >> And then you got open source, which is like, "Okay, let's get some upsource code, and let people verify it, and then build with that." Is it a balance? >> Yes, I think- >> Is it mutually exclusive? What's your view? >> I think it's going to be, markets will drive the proportion of both, and I think, for a certain use case, you'll end up with more proprietary offerings. With certain use cases, I guess the fundamental infrastructure for ChatGPT-like, let's say, large-language models and all the use cases running on top of it, that's likely going to be more platform-oriented and open source, and will allow innovation. Think of it as the equivalent of iPhone apps or Android apps running on top of those platforms, as in AI apps. So we'll have a lot of that. Now, when you start going a little bit more into the guts, the lower layers, then it's clear that, for performance reasons, in particular, for certain use cases, we'll end up with more proprietary offerings, whether it's advanced silicon, such as some of the silicon that emerged from entrepreneurs who have left Google, around TensorFlow, and all the silicon that powers that. You'll see a lot of innovation in that area as well. It hopefully intends to improve the cost efficiency of running large AI-oriented workloads, both in inference and in learning stages. >> I got to ask you, because this has come up a lot around Azure and Microsoft. Microsoft, pretty good move getting into the ChatGPT >> Yep. >> and the open AI, because I was talking to someone who's a hardcore Amazon developer, and they said, they swore they would never use Azure, right? One of those types. And they're spinning up Azure servers to get access to the API. So, the developers are flocking, as you mentioned. The YC class is all doing large data things, because you can now program with data, which is amazing, which is amazing. So, what's your take on, I know you got to be kind of neutral 'cause you're an investor, but you got, Amazon has to respond, Google, essentially, did all the work, so they have to have a solution. So, I'm expecting Google to have something very compelling, but Microsoft, right now, is going to just, might run the table on developers, this new wave of data developers. What's your take on the cloud responses to this? What's Amazon, what do you think AWS is going to do? What should Google be doing? What's your take? >> So, each of them is coming from a slightly different angle, of course. I'll say, Google, I think, has massive assets in the AI space, and their underlying cloud platform, I think, has been designed to support such complicated workloads, but they have yet to go as far as opening it up the same way ChatGPT is now in that Microsoft partnership, and Azure. Good question regarding Amazon. AWS has had a significant investment in AI-related infrastructure. Seeing it through my startups, through other lens as well. How will they respond to that higher layer, above and beyond the low level, if you will, AI-enabling apparatuses? How do they elevate to at least one or two layers above, and get to the same ChatGPT layer, good question. Is there an acquisition that will make sense for them to accelerate it, maybe. Is there an in-house development that they can reapply from a different domain towards that, possibly. But I do suspect we'll end up with acquisitions as the arms race around the next level of cloud wars emerges, and it's going to be no longer just about the basic tooling for basic cloud-based applications, and the infrastructure, and the cost management, but rather, faster time to deliver AI in data-heavy applications. Once again, each one of those cloud suppliers, their vendor is coming with different assets, and different pros and cons. All of them will need to just elevate the level of the fight, if you will, in this case, to the AI layer. >> It's going to be very interesting, the different stacks on the data infrastructure, like I mentioned, analytics, data lake, AI, all happening. It's going to be interesting to see how this turns into this AI cloud, like data clouds, data operating systems. So, super fascinating area. Opher, thank you for coming on and sharing your expertise with us. Great to see you, and congratulations on the work. I'll give you the final word here. Give a plugin for what you're looking for for startup seats, pre-seeds. What's the kind of profile that gets your attention, from a seed, pre-seed candidate or entrepreneur? >> Cool, first of all, it's my pleasure. Enjoy our chats, as always. Hopefully the next one's not going to be in nine years. As to what I'm looking for, ideally, smart data entrepreneurs, who have come from a particular domain problem, or problem domain, that they understand, they felt it in their own 10 fingers, or millions of neurons in their brains, and they figured out a way to solve it. Whether it's a data infrastructure play, a cloud infrastructure play, or a very, very smart application that takes advantage of data at scale. These are the things I'm looking for. >> One final, final question I have to ask you, because you're a seasoned entrepreneur, and now coach. What's different about the current entrepreneurial environment right now, vis-a-vis, the past decade? What's new? Is it different, highly accelerated? What advice do you give entrepreneurs out there who are putting together their plan? Obviously, a global resource pool now of engineering. It might not be yesterday's formula for success to putting a venture together to get to that product-market fit. What's new and different, and what's your advice to the folks out there about what's different about the current environment for being an entrepreneur? >> Fantastic, so I think it's a great question. So I think there's a few axes of difference, compared to, let's say, five years ago, 10 years ago, 15 years ago. First and foremost, given the amount of infrastructure out there, the amount of open-source technologies, amount of developer toolkits and frameworks, trying to develop an application, at least at the application layer, is much faster than ever. So, it's faster and cheaper, to the most part, unless you're building very fundamental, core, deep tech, where you still have a big technology challenge to deal with. And absent that, the challenge shifts more to how do you manage my resources, to product-market fit, how are you integrating the GTM lens, the go-to-market lens, as early as possible in the product-market fit cycle, such that you reach from pre-seed to seed, from seed to A, from A to B, with an optimal amount of velocity, and a minimal amount of resources. One big difference, specifically as of, let's say, beginning of this year, late last year, is that money is no longer free for entrepreneurs, which means that you need to operate and build startup in an environment with a lot more constraints. And in my mind, some of the best startups that have ever been built, and some of the big market-changing, generational-changing, if you will, technology startups, in their respective industry verticals, have actually emerged from these times. And these tend to be the smartest, best startups that emerge because they operate with a lot less money. Money is not as available for them, which means that they need to make tough decisions, and make verticals every day. What you don't need to do, you can kick the cow down the road. When you have plenty of money, and it cushions for a lot of mistakes, you don't have that cushion. And hopefully we'll end up with companies with a more agile, more, if you will, resilience, and better cultures in making those tough decisions that startups need to make every day. Which is why I'm super, super excited to see the next batch of amazing unicorns, true unicorns, not just valuation, market rising with the water type unicorns that emerged from this particular era, which we're in the beginning of. And very much enjoy working with entrepreneurs during this difficult time, the times we're in. >> The next 24 months will be the next wave, like you said, best time to do a company. Remember, Airbnb's pitch was, "We'll rent cots in apartments, and sell cereal." Boy, a lot of people passed on that deal, in that last down market, that turned out to be a game-changer. So the crazy ideas might not be that bad. So it's all about the entrepreneurs, and >> 100%. >> this is a big wave, and it's certainly happening. Opher, thank you for sharing. Obviously, data is going to change all the markets. Refactoring, security, FinTech, user experience, applications are going to be changed by data, data operating system. Thanks for coming on, and thanks for sharing. Appreciate it. >> My pleasure. Have a good one. >> Okay, more coverage for the CloudNativeSecurityCon inaugural event. Data will be the key for cybersecurity. theCUBE's coverage continues after this break. (uplifting music)

>> From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> OpenAI The company, and ChatGPT have taken the world by storm. Microsoft reportedly is investing an additional 10 billion dollars into the company. But in our view, while the hype around ChatGPT is justified, we don't believe OpenAI will lock up the market with its first mover advantage. Rather, we believe that success in this market will be directly proportional to the quality and quantity of data that a technology company has at its disposal, and the compute power that it could deploy to run its system. Hello and welcome to this week's Wikibon CUBE insights, powered by ETR. In this Breaking Analysis, we unpack the excitement around ChatGPT, and debate the premise that the company's early entry into the space may not confer winner take all advantage to OpenAI. And to do so, we welcome CUBE collaborator, alum, Sarbjeet Johal, (chuckles) and John Furrier, co-host of the Cube. Great to see you Sarbjeet, John. Really appreciate you guys coming to the program. >> Great to be on. >> Okay, so what is ChatGPT? Well, actually we asked ChatGPT, what is ChatGPT? So here's what it said. ChatGPT is a state-of-the-art language model developed by OpenAI that can generate human-like text. It could be fine tuned for a variety of language tasks, such as conversation, summarization, and language translation. So I asked it, give it to me in 50 words or less. How did it do? Anything to add? >> Yeah, think it did good. It's large language model, like previous models, but it started applying the transformers sort of mechanism to focus on what prompt you have given it to itself. And then also the what answer it gave you in the first, sort of, one sentence or two sentences, and then introspect on itself, like what I have already said to you. And so just work on that. So it it's self sort of focus if you will. It does, the transformers help the large language models to do that. >> So to your point, it's a large language model, and GPT stands for generative pre-trained transformer. >> And if you put the definition back up there again, if you put it back up on the screen, let's see it back up. Okay, it actually missed the large, word large. So one of the problems with ChatGPT, it's not always accurate. It's actually a large language model, and it says state of the art language model. And if you look at Google, Google has dominated AI for many times and they're well known as being the best at this. And apparently Google has their own large language model, LLM, in play and have been holding it back to release because of backlash on the accuracy. Like just in that example you showed is a great point. They got almost right, but they missed the key word. >> You know what's funny about that John, is I had previously asked it in my prompt to give me it in less than a hundred words, and it was too long, I said I was too long for Breaking Analysis, and there it went into the fact that it's a large language model. So it largely, it gave me a really different answer the, for both times. So, but it's still pretty amazing for those of you who haven't played with it yet. And one of the best examples that I saw was Ben Charrington from This Week In ML AI podcast. And I stumbled on this thanks to Brian Gracely, who was listening to one of his Cloudcasts. Basically what Ben did is he took, he prompted ChatGPT to interview ChatGPT, and he simply gave the system the prompts, and then he ran the questions and answers into this avatar builder and sped it up 2X so it didn't sound like a machine. And voila, it was amazing. So John is ChatGPT going to take over as a cube host? >> Well, I was thinking, we get the questions in advance sometimes from PR people. We should actually just plug it in ChatGPT, add it to our notes, and saying, "Is this good enough for you? Let's ask the real question." So I think, you know, I think there's a lot of heavy lifting that gets done. I think the ChatGPT is a phenomenal revolution. I think it highlights the use case. Like that example we showed earlier. It gets most of it right. So it's directionally correct and it feels like it's an answer, but it's not a hundred percent accurate. And I think that's where people are seeing value in it. Writing marketing, copy, brainstorming, guest list, gift list for somebody. Write me some lyrics to a song. Give me a thesis about healthcare policy in the United States. It'll do a bang up job, and then you got to go in and you can massage it. So we're going to do three quarters of the work. That's why plagiarism and schools are kind of freaking out. And that's why Microsoft put 10 billion in, because why wouldn't this be a feature of Word, or the OS to help it do stuff on behalf of the user. So linguistically it's a beautiful thing. You can input a string and get a good answer. It's not a search result. >> And we're going to get your take on on Microsoft and, but it kind of levels the playing- but ChatGPT writes better than I do, Sarbjeet, and I know you have some good examples too. You mentioned the Reed Hastings example. >> Yeah, I was listening to Reed Hastings fireside chat with ChatGPT, and the answers were coming as sort of voice, in the voice format. And it was amazing what, he was having very sort of philosophy kind of talk with the ChatGPT, the longer sentences, like he was going on, like, just like we are talking, he was talking for like almost two minutes and then ChatGPT was answering. It was not one sentence question, and then a lot of answers from ChatGPT and yeah, you're right. I, this is our ability. I've been thinking deep about this since yesterday, we talked about, like, we want to do this segment. The data is fed into the data model. It can be the current data as well, but I think that, like, models like ChatGPT, other companies will have those too. They can, they're democratizing the intelligence, but they're not creating intelligence yet, definitely yet I can say that. They will give you all the finite answers. Like, okay, how do you do this for loop in Java, versus, you know, C sharp, and as a programmer you can do that, in, but they can't tell you that, how to write a new algorithm or write a new search algorithm for you. They cannot create a secretive code for you to- >> Not yet. >> Have competitive advantage. >> Not yet, not yet. >> but you- >> Can Google do that today? >> No one really can. The reasoning side of the data is, we talked about at our Supercloud event, with Zhamak Dehghani who's was CEO of, now of Nextdata. This next wave of data intelligence is going to come from entrepreneurs that are probably cross discipline, computer science and some other discipline. But they're going to be new things, for example, data, metadata, and data. It's hard to do reasoning like a human being, so that needs more data to train itself. So I think the first gen of this training module for the large language model they have is a corpus of text. Lot of that's why blog posts are, but the facts are wrong and sometimes out of context, because that contextual reasoning takes time, it takes intelligence. So machines need to become intelligent, and so therefore they need to be trained. So you're going to start to see, I think, a lot of acceleration on training the data sets. And again, it's only as good as the data you can get. And again, proprietary data sets will be a huge winner. Anyone who's got a large corpus of content, proprietary content like theCUBE or SiliconANGLE as a publisher will benefit from this. Large FinTech companies, anyone with large proprietary data will probably be a big winner on this generative AI wave, because it just, it will eat that up, and turn that back into something better. So I think there's going to be a lot of interesting things to look at here. And certainly productivity's going to be off the charts for vanilla and the internet is going to get swarmed with vanilla content. So if you're in the content business, and you're an original content producer of any kind, you're going to be not vanilla, so you're going to be better. So I think there's so much at play Dave (indistinct). >> I think the playing field has been risen, so we- >> Risen and leveled? >> Yeah, and leveled to certain extent. So it's now like that few people as consumers, as consumers of AI, we will have a advantage and others cannot have that advantage. So it will be democratized. That's, I'm sure about that. But if you take the example of calculator, when the calculator came in, and a lot of people are, "Oh, people can't do math anymore because calculator is there." right? So it's a similar sort of moment, just like a calculator for the next level. But, again- >> I see it more like open source, Sarbjeet, because like if you think about what ChatGPT's doing, you do a query and it comes from somewhere the value of a post from ChatGPT is just a reuse of AI. The original content accent will be come from a human. So if I lay out a paragraph from ChatGPT, did some heavy lifting on some facts, I check the facts, save me about maybe- >> Yeah, it's productive. >> An hour writing, and then I write a killer two, three sentences of, like, sharp original thinking or critical analysis. I then took that body of work, open source content, and then laid something on top of it. >> And Sarbjeet's example is a good one, because like if the calculator kids don't do math as well anymore, the slide rule, remember we had slide rules as kids, remember we first started using Waze, you know, we were this minority and you had an advantage over other drivers. Now Waze is like, you know, social traffic, you know, navigation, everybody had, you know- >> All the back roads are crowded. >> They're car crowded. (group laughs) Exactly. All right, let's, let's move on. What about this notion that futurist Ray Amara put forth and really Amara's Law that we're showing here, it's, the law is we, you know, "We tend to overestimate the effect of technology in the short run and underestimate it in the long run." Is that the case, do you think, with ChatGPT? What do you think Sarbjeet? >> I think that's true actually. There's a lot of, >> We don't debate this. >> There's a lot of awe, like when people see the results from ChatGPT, they say what, what the heck? Like, it can do this? But then if you use it more and more and more, and I ask the set of similar question, not the same question, and it gives you like same answer. It's like reading from the same bucket of text in, the interior read (indistinct) where the ChatGPT, you will see that in some couple of segments. It's very, it sounds so boring that the ChatGPT is coming out the same two sentences every time. So it is kind of good, but it's not as good as people think it is right now. But we will have, go through this, you know, hype sort of cycle and get realistic with it. And then in the long term, I think it's a great thing in the short term, it's not something which will (indistinct) >> What's your counter point? You're saying it's not. >> I, no I think the question was, it's hyped up in the short term and not it's underestimated long term. That's what I think what he said, quote. >> Yes, yeah. That's what he said. >> Okay, I think that's wrong with this, because this is a unique, ChatGPT is a unique kind of impact and it's very generational. People have been comparing it, I have been comparing to the internet, like the web, web browser Mosaic and Netscape, right, Navigator. I mean, I clearly still remember the days seeing Navigator for the first time, wow. And there weren't not many sites you could go to, everyone typed in, you know, cars.com, you know. >> That (indistinct) wasn't that overestimated, the overhyped at the beginning and underestimated. >> No, it was, it was underestimated long run, people thought. >> But that Amara's law. >> That's what is. >> No, they said overestimated? >> Overestimated near term underestimated- overhyped near term, underestimated long term. I got, right I mean? >> Well, I, yeah okay, so I would then agree, okay then- >> We were off the charts about the internet in the early days, and it actually exceeded our expectations. >> Well there were people who were, like, poo-pooing it early on. So when the browser came out, people were like, "Oh, the web's a toy for kids." I mean, in 1995 the web was a joke, right? So '96, you had online populations growing, so you had structural changes going on around the browser, internet population. And then that replaced other things, direct mail, other business activities that were once analog then went to the web, kind of read only as you, as we always talk about. So I think that's a moment where the hype long term, the smart money, and the smart industry experts all get the long term. And in this case, there's more poo-pooing in the short term. "Ah, it's not a big deal, it's just AI." I've heard many people poo-pooing ChatGPT, and a lot of smart people saying, "No this is next gen, this is different and it's only going to get better." So I think people are estimating a big long game on this one. >> So you're saying it's bifurcated. There's those who say- >> Yes. >> Okay, all right, let's get to the heart of the premise, and possibly the debate for today's episode. Will OpenAI's early entry into the market confer sustainable competitive advantage for the company. And if you look at the history of tech, the technology industry, it's kind of littered with first mover failures. Altair, IBM, Tandy, Commodore, they and Apple even, they were really early in the PC game. They took a backseat to Dell who came in the scene years later with a better business model. Netscape, you were just talking about, was all the rage in Silicon Valley, with the first browser, drove up all the housing prices out here. AltaVista was the first search engine to really, you know, index full text. >> Owned by Dell, I mean DEC. >> Owned by Digital. >> Yeah, Digital Equipment >> Compaq bought it. And of course as an aside, Digital, they wanted to showcase their hardware, right? Their super computer stuff. And then so Friendster and MySpace, they came before Facebook. The iPhone certainly wasn't the first mobile device. So lots of failed examples, but there are some recent successes like AWS and cloud. >> You could say smartphone. So I mean. >> Well I know, and you can, we can parse this so we'll debate it. Now Twitter, you could argue, had first mover advantage. You kind of gave me that one John. Bitcoin and crypto clearly had first mover advantage, and sustaining that. Guys, will OpenAI make it to the list on the right with ChatGPT, what do you think? >> I think categorically as a company, it probably won't, but as a category, I think what they're doing will, so OpenAI as a company, they get funding, there's power dynamics involved. Microsoft put a billion dollars in early on, then they just pony it up. Now they're reporting 10 billion more. So, like, if the browsers, Microsoft had competitive advantage over Netscape, and used monopoly power, and convicted by the Department of Justice for killing Netscape with their monopoly, Netscape should have had won that battle, but Microsoft killed it. In this case, Microsoft's not killing it, they're buying into it. So I think the embrace extend Microsoft power here makes OpenAI vulnerable for that one vendor solution. So the AI as a company might not make the list, but the category of what this is, large language model AI, is probably will be on the right hand side. >> Okay, we're going to come back to the government intervention and maybe do some comparisons, but what are your thoughts on this premise here? That, it will basically set- put forth the premise that it, that ChatGPT, its early entry into the market will not confer competitive advantage to >> For OpenAI. >> To Open- Yeah, do you agree with that? >> I agree with that actually. It, because Google has been at it, and they have been holding back, as John said because of the scrutiny from the Fed, right, so- >> And privacy too. >> And the privacy and the accuracy as well. But I think Sam Altman and the company on those guys, right? They have put this in a hasty way out there, you know, because it makes mistakes, and there are a lot of questions around the, sort of, where the content is coming from. You saw that as your example, it just stole the content, and without your permission, you know? >> Yeah. So as quick this aside- >> And it codes on people's behalf and the, those codes are wrong. So there's a lot of, sort of, false information it's putting out there. So it's a very vulnerable thing to do what Sam Altman- >> So even though it'll get better, others will compete. >> So look, just side note, a term which Reid Hoffman used a little bit. Like he said, it's experimental launch, like, you know, it's- >> It's pretty damn good. >> It is clever because according to Sam- >> It's more than clever. It's good. >> It's awesome, if you haven't used it. I mean you write- you read what it writes and you go, "This thing writes so well, it writes so much better than you." >> The human emotion drives that too. I think that's a big thing. But- >> I Want to add one more- >> Make your last point. >> Last one. Okay. So, but he's still holding back. He's conducting quite a few interviews. If you want to get the gist of it, there's an interview with StrictlyVC interview from yesterday with Sam Altman. Listen to that one it's an eye opening what they want- where they want to take it. But my last one I want to make it on this point is that Satya Nadella yesterday did an interview with Wall Street Journal. I think he was doing- >> You were not impressed. >> I was not impressed because he was pushing it too much. So Sam Altman's holding back so there's less backlash. >> Got 10 billion reasons to push. >> I think he's almost- >> Microsoft just laid off 10000 people. Hey ChatGPT, find me a job. You know like. (group laughs) >> He's overselling it to an extent that I think it will backfire on Microsoft. And he's over promising a lot of stuff right now, I think. I don't know why he's very jittery about all these things. And he did the same thing during Ignite as well. So he said, "Oh, this AI will write code for you and this and that." Like you called him out- >> The hyperbole- >> During your- >> from Satya Nadella, he's got a lot of hyperbole. (group talks over each other) >> All right, Let's, go ahead. >> Well, can I weigh in on the whole- >> Yeah, sure. >> Microsoft thing on whether OpenAI, here's the take on this. I think it's more like the browser moment to me, because I could relate to that experience with ChatG, personally, emotionally, when I saw that, and I remember vividly- >> You mean that aha moment (indistinct). >> Like this is obviously the future. Anything else in the old world is dead, website's going to be everywhere. It was just instant dot connection for me. And a lot of other smart people who saw this. Lot of people by the way, didn't see it. Someone said the web's a toy. At the company I was worked for at the time, Hewlett Packard, they like, they could have been in, they had invented HTML, and so like all this stuff was, like, they just passed, the web was just being passed over. But at that time, the browser got better, more websites came on board. So the structural advantage there was online web usage was growing, online user population. So that was growing exponentially with the rise of the Netscape browser. So OpenAI could stay on the right side of your list as durable, if they leverage the category that they're creating, can get the scale. And if they can get the scale, just like Twitter, that failed so many times that they still hung around. So it was a product that was always successful, right? So I mean, it should have- >> You're right, it was terrible, we kept coming back. >> The fail whale, but it still grew. So OpenAI has that moment. They could do it if Microsoft doesn't meddle too much with too much power as a vendor. They could be the Netscape Navigator, without the anti-competitive behavior of somebody else. So to me, they have the pole position. So they have an opportunity. So if not, if they don't execute, then there's opportunity. There's not a lot of barriers to entry, vis-a-vis say the CapEx of say a cloud company like AWS. You can't replicate that, Many have tried, but I think you can replicate OpenAI. >> And we're going to talk about that. Okay, so real quick, I want to bring in some ETR data. This isn't an ETR heavy segment, only because this so new, you know, they haven't coverage yet, but they do cover AI. So basically what we're seeing here is a slide on the vertical axis's net score, which is a measure of spending momentum, and in the horizontal axis's is presence in the dataset. Think of it as, like, market presence. And in the insert right there, you can see how the dots are plotted, the two columns. And so, but the key point here that we want to make, there's a bunch of companies on the left, is he like, you know, DataRobot and C3 AI and some others, but the big whales, Google, AWS, Microsoft, are really dominant in this market. So that's really the key takeaway that, can we- >> I notice IBM is way low. >> Yeah, IBM's low, and actually bring that back up and you, but then you see Oracle who actually is injecting. So I guess that's the other point is, you're not necessarily going to go buy AI, and you know, build your own AI, you're going to, it's going to be there and, it, Salesforce is going to embed it into its platform, the SaaS companies, and you're going to purchase AI. You're not necessarily going to build it. But some companies obviously are. >> I mean to quote IBM's general manager Rob Thomas, "You can't have AI with IA." information architecture and David Flynn- >> You can't Have AI without IA >> without, you can't have AI without IA. You can't have, if you have an Information Architecture, you then can power AI. Yesterday David Flynn, with Hammersmith, was on our Supercloud. He was pointing out that the relationship of storage, where you store things, also impacts the data and stressablity, and Zhamak from Nextdata, she was pointing out that same thing. So the data problem factors into all this too, Dave. >> So you got the big cloud and internet giants, they're all poised to go after this opportunity. Microsoft is investing up to 10 billion. Google's code red, which was, you know, the headline in the New York Times. Of course Apple is there and several alternatives in the market today. Guys like Chinchilla, Bloom, and there's a company Jasper and several others, and then Lena Khan looms large and the government's around the world, EU, US, China, all taking notice before the market really is coalesced around a single player. You know, John, you mentioned Netscape, they kind of really, the US government was way late to that game. It was kind of game over. And Netscape, I remember Barksdale was like, "Eh, we're going to be selling software in the enterprise anyway." and then, pshew, the company just dissipated. So, but it looks like the US government, especially with Lena Khan, they're changing the definition of antitrust and what the cause is to go after people, and they're really much more aggressive. It's only what, two years ago that (indistinct). >> Yeah, the problem I have with the federal oversight is this, they're always like late to the game, and they're slow to catch up. So in other words, they're working on stuff that should have been solved a year and a half, two years ago around some of the social networks hiding behind some of the rules around open web back in the days, and I think- >> But they're like 15 years late to that. >> Yeah, and now they got this new thing on top of it. So like, I just worry about them getting their fingers. >> But there's only two years, you know, OpenAI. >> No, but the thing (indistinct). >> No, they're still fighting other battles. But the problem with government is that they're going to label Big Tech as like a evil thing like Pharma, it's like smoke- >> You know Lena Khan wants to kill Big Tech, there's no question. >> So I think Big Tech is getting a very seriously bad rap. And I think anything that the government does that shades darkness on tech, is politically motivated in most cases. You can almost look at everything, and my 80 20 rule is in play here. 80% of the government activity around tech is bullshit, it's politically motivated, and the 20% is probably relevant, but off the mark and not organized. >> Well market forces have always been the determining factor of success. The governments, you know, have been pretty much failed. I mean you look at IBM's antitrust, that, what did that do? The market ultimately beat them. You look at Microsoft back in the day, right? Windows 95 was peaking, the government came in. But you know, like you said, they missed the web, right, and >> so they were hanging on- >> There's nobody in government >> to Windows. >> that actually knows- >> And so, you, I think you're right. It's market forces that are going to determine this. But Sarbjeet, what do you make of Microsoft's big bet here, you weren't impressed with with Nadella. How do you think, where are they going to apply it? Is this going to be a Hail Mary for Bing, or is it going to be applied elsewhere? What do you think. >> They are saying that they will, sort of, weave this into their products, office products, productivity and also to write code as well, developer productivity as well. That's a big play for them. But coming back to your antitrust sort of comments, right? I believe the, your comment was like, oh, fed was late 10 years or 15 years earlier, but now they're two years. But things are moving very fast now as compared to they used to move. >> So two years is like 10 Years. >> Yeah, two years is like 10 years. Just want to make that point. (Dave laughs) This thing is going like wildfire. Any new tech which comes in that I think they're going against distribution channels. Lina Khan has commented time and again that the marketplace model is that she wants to have some grip on. Cloud marketplaces are a kind of monopolistic kind of way. >> I don't, I don't see this, I don't see a Chat AI. >> You told me it's not Bing, you had an interesting comment. >> No, no. First of all, this is great from Microsoft. If you're Microsoft- >> Why? >> Because Microsoft doesn't have the AI chops that Google has, right? Google is got so much core competency on how they run their search, how they run their backends, their cloud, even though they don't get a lot of cloud market share in the enterprise, they got a kick ass cloud cause they needed one. >> Totally. >> They've invented SRE. I mean Google's development and engineering chops are off the scales, right? Amazon's got some good chops, but Google's got like 10 times more chops than AWS in my opinion. Cloud's a whole different story. Microsoft gets AI, they get a playbook, they get a product they can render into, the not only Bing, productivity software, helping people write papers, PowerPoint, also don't forget the cloud AI can super help. We had this conversation on our Supercloud event, where AI's going to do a lot of the heavy lifting around understanding observability and managing service meshes, to managing microservices, to turning on and off applications, and or maybe writing code in real time. So there's a plethora of use cases for Microsoft to deploy this. combined with their R and D budgets, they can then turbocharge more research, build on it. So I think this gives them a car in the game, Google may have pole position with AI, but this puts Microsoft right in the game, and they already have a lot of stuff going on. But this just, I mean everything gets lifted up. Security, cloud, productivity suite, everything. >> What's under the hood at Google, and why aren't they talking about it? I mean they got to be freaked out about this. No? Or do they have kind of a magic bullet? >> I think they have the, they have the chops definitely. Magic bullet, I don't know where they are, as compared to the ChatGPT 3 or 4 models. Like they, but if you look at the online sort of activity and the videos put out there from Google folks, Google technology folks, that's account you should look at if you are looking there, they have put all these distinctions what ChatGPT 3 has used, they have been talking about for a while as well. So it's not like it's a secret thing that you cannot replicate. As you said earlier, like in the beginning of this segment, that anybody who has more data and the capacity to process that data, which Google has both, I think they will win this. >> Obviously living in Palo Alto where the Google founders are, and Google's headquarters next town over we have- >> We're so close to them. We have inside information on some of the thinking and that hasn't been reported by any outlet yet. And that is, is that, from what I'm hearing from my sources, is Google has it, they don't want to release it for many reasons. One is it might screw up their search monopoly, one, two, they're worried about the accuracy, 'cause Google will get sued. 'Cause a lot of people are jamming on this ChatGPT as, "Oh it does everything for me." when it's clearly not a hundred percent accurate all the time. >> So Lina Kahn is looming, and so Google's like be careful. >> Yeah so Google's just like, this is the third, could be a third rail. >> But the first thing you said is a concern. >> Well no. >> The disruptive (indistinct) >> What they will do is do a Waymo kind of thing, where they spin out a separate company. >> They're doing that. >> The discussions happening, they're going to spin out the separate company and put it over there, and saying, "This is AI, got search over there, don't touch that search, 'cause that's where all the revenue is." (chuckles) >> So, okay, so that's how they deal with the Clay Christensen dilemma. What's the business model here? I mean it's not advertising, right? Is it to charge you for a query? What, how do you make money at this? >> It's a good question, I mean my thinking is, first of all, it's cool to type stuff in and see a paper get written, or write a blog post, or gimme a marketing slogan for this or that or write some code. I think the API side of the business will be critical. And I think Howie Xu, I know you're going to reference some of his comments yesterday on Supercloud, I think this brings a whole 'nother user interface into technology consumption. I think the business model, not yet clear, but it will probably be some sort of either API and developer environment or just a straight up free consumer product, with some sort of freemium backend thing for business. >> And he was saying too, it's natural language is the way in which you're going to interact with these systems. >> I think it's APIs, it's APIs, APIs, APIs, because these people who are cooking up these models, and it takes a lot of compute power to train these and to, for inference as well. Somebody did the analysis on the how many cents a Google search costs to Google, and how many cents the ChatGPT query costs. It's, you know, 100x or something on that. You can take a look at that. >> A 100x on which side? >> You're saying two orders of magnitude more expensive for ChatGPT >> Much more, yeah. >> Than for Google. >> It's very expensive. >> So Google's got the data, they got the infrastructure and they got, you're saying they got the cost (indistinct) >> No actually it's a simple query as well, but they are trying to put together the answers, and they're going through a lot more data versus index data already, you know. >> Let me clarify, you're saying that Google's version of ChatGPT is more efficient? >> No, I'm, I'm saying Google search results. >> Ah, search results. >> What are used to today, but cheaper. >> But that, does that, is that going to confer advantage to Google's large language (indistinct)? >> It will, because there were deep science (indistinct). >> Google, I don't think Google search is doing a large language model on their search, it's keyword search. You know, what's the weather in Santa Cruz? Or how, what's the weather going to be? Or you know, how do I find this? Now they have done a smart job of doing some things with those queries, auto complete, re direct navigation. But it's, it's not entity. It's not like, "Hey, what's Dave Vellante thinking this week in Breaking Analysis?" ChatGPT might get that, because it'll get your Breaking Analysis, it'll synthesize it. There'll be some, maybe some clips. It'll be like, you know, I mean. >> Well I got to tell you, I asked ChatGPT to, like, I said, I'm going to enter a transcript of a discussion I had with Nir Zuk, the CTO of Palo Alto Networks, And I want you to write a 750 word blog. I never input the transcript. It wrote a 750 word blog. It attributed quotes to him, and it just pulled a bunch of stuff that, and said, okay, here it is. It talked about Supercloud, it defined Supercloud. >> It's made, it makes you- >> Wow, But it was a big lie. It was fraudulent, but still, blew me away. >> Again, vanilla content and non accurate content. So we are going to see a surge of misinformation on steroids, but I call it the vanilla content. Wow, that's just so boring, (indistinct). >> There's so many dangers. >> Make your point, cause we got to, almost out of time. >> Okay, so the consumption, like how do you consume this thing. As humans, we are consuming it and we are, like, getting a nicely, like, surprisingly shocked, you know, wow, that's cool. It's going to increase productivity and all that stuff, right? And on the danger side as well, the bad actors can take hold of it and create fake content and we have the fake sort of intelligence, if you go out there. So that's one thing. The second thing is, we are as humans are consuming this as language. Like we read that, we listen to it, whatever format we consume that is, but the ultimate usage of that will be when the machines can take that output from likes of ChatGPT, and do actions based on that. The robots can work, the robot can paint your house, we were talking about, right? Right now we can't do that. >> Data apps. >> So the data has to be ingested by the machines. It has to be digestible by the machines. And the machines cannot digest unorganized data right now, we will get better on the ingestion side as well. So we are getting better. >> Data, reasoning, insights, and action. >> I like that mall, paint my house. >> So, okay- >> By the way, that means drones that'll come in. Spray painting your house. >> Hey, it wasn't too long ago that robots couldn't climb stairs, as I like to point out. Okay, and of course it's no surprise the venture capitalists are lining up to eat at the trough, as I'd like to say. Let's hear, you'd referenced this earlier, John, let's hear what AI expert Howie Xu said at the Supercloud event, about what it takes to clone ChatGPT. Please, play the clip. >> So one of the VCs actually asked me the other day, right? "Hey, how much money do I need to spend, invest to get a, you know, another shot to the openAI sort of the level." You know, I did a (indistinct) >> Line up. >> A hundred million dollar is the order of magnitude that I came up with, right? You know, not a billion, not 10 million, right? So a hundred- >> Guys a hundred million dollars, that's an astoundingly low figure. What do you make of it? >> I was in an interview with, I was interviewing, I think he said hundred million or so, but in the hundreds of millions, not a billion right? >> You were trying to get him up, you were like "Hundreds of millions." >> Well I think, I- >> He's like, eh, not 10, not a billion. >> Well first of all, Howie Xu's an expert machine learning. He's at Zscaler, he's a machine learning AI guy. But he comes from VMware, he's got his technology pedigrees really off the chart. Great friend of theCUBE and kind of like a CUBE analyst for us. And he's smart. He's right. I think the barriers to entry from a dollar standpoint are lower than say the CapEx required to compete with AWS. Clearly, the CapEx spending to build all the tech for the run a cloud. >> And you don't need a huge sales force. >> And in some case apps too, it's the same thing. But I think it's not that hard. >> But am I right about that? You don't need a huge sales force either. It's, what, you know >> If the product's good, it will sell, this is a new era. The better mouse trap will win. This is the new economics in software, right? So- >> Because you look at the amount of money Lacework, and Snyk, Snowflake, Databrooks. Look at the amount of money they've raised. I mean it's like a billion dollars before they get to IPO or more. 'Cause they need promotion, they need go to market. You don't need (indistinct) >> OpenAI's been working on this for multiple five years plus it's, hasn't, wasn't born yesterday. Took a lot of years to get going. And Sam is depositioning all the success, because he's trying to manage expectations, To your point Sarbjeet, earlier. It's like, yeah, he's trying to "Whoa, whoa, settle down everybody, (Dave laughs) it's not that great." because he doesn't want to fall into that, you know, hero and then get taken down, so. >> It may take a 100 million or 150 or 200 million to train the model. But to, for the inference to, yeah to for the inference machine, It will take a lot more, I believe. >> Give it, so imagine, >> Because- >> Go ahead, sorry. >> Go ahead. But because it consumes a lot more compute cycles and it's certain level of storage and everything, right, which they already have. So I think to compute is different. To frame the model is a different cost. But to run the business is different, because I think 100 million can go into just fighting the Fed. >> Well there's a flywheel too. >> Oh that's (indistinct) >> (indistinct) >> We are running the business, right? >> It's an interesting number, but it's also kind of, like, context to it. So here, a hundred million spend it, you get there, but you got to factor in the fact that the ways companies win these days is critical mass scale, hitting a flywheel. If they can keep that flywheel of the value that they got going on and get better, you can almost imagine a marketplace where, hey, we have proprietary data, we're SiliconANGLE in theCUBE. We have proprietary content, CUBE videos, transcripts. Well wouldn't it be great if someone in a marketplace could sell a module for us, right? We buy that, Amazon's thing and things like that. So if they can get a marketplace going where you can apply to data sets that may be proprietary, you can start to see this become bigger. And so I think the key barriers to entry is going to be success. I'll give you an example, Reddit. Reddit is successful and it's hard to copy, not because of the software. >> They built the moat. >> Because you can, buy Reddit open source software and try To compete. >> They built the moat with their community. >> Their community, their scale, their user expectation. Twitter, we referenced earlier, that thing should have gone under the first two years, but there was such a great emotional product. People would tolerate the fail whale. And then, you know, well that was a whole 'nother thing. >> Then a plane landed in (John laughs) the Hudson and it was over. >> I think verticals, a lot of verticals will build applications using these models like for lawyers, for doctors, for scientists, for content creators, for- >> So you'll have many hundreds of millions of dollars investments that are going to be seeping out. If, all right, we got to wrap, if you had to put odds on it that that OpenAI is going to be the leader, maybe not a winner take all leader, but like you look at like Amazon and cloud, they're not winner take all, these aren't necessarily winner take all markets. It's not necessarily a zero sum game, but let's call it winner take most. What odds would you give that open AI 10 years from now will be in that position. >> If I'm 0 to 10 kind of thing? >> Yeah, it's like horse race, 3 to 1, 2 to 1, even money, 10 to 1, 50 to 1. >> Maybe 2 to 1, >> 2 to 1, that's pretty low odds. That's basically saying they're the favorite, they're the front runner. Would you agree with that? >> I'd say 4 to 1. >> Yeah, I was going to say I'm like a 5 to 1, 7 to 1 type of person, 'cause I'm a skeptic with, you know, there's so much competition, but- >> I think they're definitely the leader. I mean you got to say, I mean. >> Oh there's no question. There's no question about it. >> The question is can they execute? >> They're not Friendster, is what you're saying. >> They're not Friendster and they're more like Twitter and Reddit where they have momentum. If they can execute on the product side, and if they don't stumble on that, they will continue to have the lead. >> If they say stay neutral, as Sam is, has been saying, that, hey, Microsoft is one of our partners, if you look at their company model, how they have structured the company, then they're going to pay back to the investors, like Microsoft is the biggest one, up to certain, like by certain number of years, they're going to pay back from all the money they make, and after that, they're going to give the money back to the public, to the, I don't know who they give it to, like non-profit or something. (indistinct) >> Okay, the odds are dropping. (group talks over each other) That's a good point though >> Actually they might have done that to fend off the criticism of this. But it's really interesting to see the model they have adopted. >> The wildcard in all this, My last word on this is that, if there's a developer shift in how developers and data can come together again, we have conferences around the future of data, Supercloud and meshs versus, you know, how the data world, coding with data, how that evolves will also dictate, 'cause a wild card could be a shift in the landscape around how developers are using either machine learning or AI like techniques to code into their apps, so. >> That's fantastic insight. I can't thank you enough for your time, on the heels of Supercloud 2, really appreciate it. All right, thanks to John and Sarbjeet for the outstanding conversation today. Special thanks to the Palo Alto studio team. My goodness, Anderson, this great backdrop. You guys got it all out here, I'm jealous. And Noah, really appreciate it, Chuck, Andrew Frick and Cameron, Andrew Frick switching, Cameron on the video lake, great job. And Alex Myerson, he's on production, manages the podcast for us, Ken Schiffman as well. Kristen Martin and Cheryl Knight help get the word out on social media and our newsletters. Rob Hof is our editor-in-chief over at SiliconANGLE, does some great editing, thanks to all. Remember, all these episodes are available as podcasts. All you got to do is search Breaking Analysis podcast, wherever you listen. Publish each week on wikibon.com and siliconangle.com. Want to get in touch, email me directly, david.vellante@siliconangle.com or DM me at dvellante, or comment on our LinkedIn post. And by all means, check out etr.ai. They got really great survey data in the enterprise tech business. This is Dave Vellante for theCUBE Insights powered by ETR. Thanks for watching, We'll see you next time on Breaking Analysis. (electronic music)

(upbeat music) >> Good morning everybody. Welcome back to Las Vegas. This is day four of theCUBE's wall-to-wall coverage of our Super Bowl, aka AWS re:Invent 2022. I'm here with my co-host, Paul Gillin. My name is Dave Vellante. Sanjay Poonen is in the house, CEO and president of Cohesity. He's sitting in as our guest market watcher, market analyst, you know, deep expertise, new to the job at Cohesity. He was kind enough to sit in, and help us break down what's happening at re:Invent. But Paul, first thing, this morning we heard from Werner Vogels. He was basically given a masterclass on system design. It reminded me of mainframes years ago. When we used to, you know, bury through those IBM blue books and red books. You remember those Sanjay? That's how we- learned back then. >> Oh God, I remember those, Yeah. >> But it made me think, wow, now you know IBM's more of a systems design, nobody talks about IBM anymore. Everybody talks about Amazon. So you wonder, 20 years from now, you know what it's going to be. But >> Well- >> Werner's amazing. >> He pulled out a 24 year old document. >> Yup. >> That he had written early in Amazon's evolution about synchronous design or about essentially distributed architectures that turned out to be prophetic. >> His big thing was nature is asynchronous. So systems are asynchronous. Synchronous is an illusion. It's an abstraction. It's kind of interesting. But, you know- >> Yeah, I mean I've had synonyms for things. Timeless architecture. Werner's an absolute legend. I mean, when you think about folks who've had, you know, impact on technology, you think of people like Jony Ive in design. >> Dave: Yeah. >> You got to think about people like Werner in architecture and just the fact that Andy and the team have been able to keep him engaged that long... I pay attention to his keynote. Peter DeSantis has obviously been very, very influential. And then of course, you know, Adam did a good job, you know, watching from, you know, having watched since I was at the first AWS re:Invent conference, at time was President SAP and there was only a thousand people at this event, okay? Andy had me on stage. I think I was one of the first guest of any tech company in 2011. And to see now this become like, it's a mecca. It's a mother of all IT events, and watch sort of even the transition from Andy to Adam is very special. I got to catch some of Ruba's keynote. So while there's some new people in the mix here, this has become a force of nature. And the last time I was here was 2019, before Covid, watched the last two ones online. But it feels like, I don't know 'about what you guys think, it feels like it's back to 2019 levels. >> I was here in 2019. I feel like this was bigger than 2019 but some people have said that it's about the same. >> I think it was 60,000 versus 50,000. >> Yes. So close. >> It was a little bigger in 2019. But it feels like it's more active. >> And then last year, Sanjay, you weren't here but it was 25,000, which was amazing 'cause it was right in that little space between Omicron, before Omicron hit. But you know, let me ask you a question and this is really more of a question about Amazon's maturity and I know you've been following them since early days. But the way I get the question, number one question I get from people is how is Amazon AWS going to be different under Adam than it was under Andy? What do you think? >> I mean, Adam's not new because he was here before. In some senses he knows the Amazon culture from prior, when he was running sales and marketing prior. But then he took the time off and came back. I mean, this will always be, I think, somewhat Andy's baby, right? Because he was the... I, you know, sent him a text, "You should be really proud of what you accomplished", but you know, I think he also, I asked him when I saw him a few weeks ago "Are you going to come to re:Invent?" And he says, "No, I want to leave this to be Adam's show." And Adam's going to have a slightly different view. His keynotes are probably half the time. It's a little bit more vision. There was a lot more customer stories at the beginning of it. Taking you back to the inspirational pieces of it. I think you're going to see them probably pulling up the stack and not just focused in infrastructure. Many of their platform services are evolved. Many of their, even application services. I'm surprised when I talk to customers. Like Amazon Connect, their sort of call center type technologies, an app layer. It's getting a lot. I mean, I've talked to a couple of Fortune 500 companies that are moving off Ayer to Connect. I mean, it's happening and I did not know that. So it's, you know, I think as they move up the stack, the platform's gotten more... The data centric stack has gotten, and you know, in the area we're working with Cohesity, security, data protection, they're an investor in our company. So this is an important, you know, both... I think tech player and a partner for many companies like us. >> I wonder the, you know, the marketplace... there's been a big push on the marketplace by all the cloud companies last couple of years. Do you see that disrupting the way softwares, enterprise software is sold? >> Oh, for sure. I mean, you have to be a ostrich with your head in the sand to not see this wave happening. I mean, what's it? $150 billion worth of revenue. Even though the growth rates dipped a little bit the last quarter or so, it's still aggregatively between Amazon and Azure and Google, you know, 30% growth. And I think we're still in the second or third inning off a grand 1 trillion or 2 trillion of IT, shifting not all of it to the cloud, but significantly faster. So if you add up all of the big things of the on-premise world, they're, you know, they got to a certain size, their growth is stable, but stalling. These guys are growing significantly faster. And then if you add on top of them, platform companies the data companies, Snowflake, MongoDB, Databricks, you know, Datadog, and then apps companies on top of that. I think the move to the Cloud is inevitable. In SaaS companies, I don't know why you would ever implement a CRM solution on-prem. It's all gone to the Cloud. >> Oh, it is. >> That happened 15 years ago. I mean, begin within three, five years of the advent of Salesforce. And the same thing in HR. Why would you deploy a HR solution now? You've got Workday, you've got, you know, others that are so some of those apps markets are are just never coming back to an on-prem capability. >> Sanjay, I want to ask you, you built a reputation for being able to, you know, forecast accurately, hit your plan, you know, you hit your numbers, you're awesome operator. Even though you have a, you know, technology degree, which you know, that's a two-tool star, multi-tool star. But I call it the slingshot economy. This is like, I mean I've seen probably more downturns than anybody in here, you know, given... Well maybe, maybe- >> Maybe me. >> You and I both. I've never seen anything like this, where where visibility is so unpredictable. The economy is sling-shotting. It's like, oh, hurry up, go Covid, go, go go build, build, build supply, then pull back. And now going forward, now pulling back. Slootman said, you know, on the call, "Hey the guide, is the guide." He said, "we put it out there, We do our best to hit it." But you had CrowdStrike had issues you know, mid-market, ServiceNow. I saw McDermott on the other day on the, on the TV. I just want to pay, you know, buy from the guy. He's so (indistinct) >> But mixed, mixed results, Salesforce, you know, Octa now pre-announcing, hey, they're going to be, or announcing, you know, better visibility, forward guide. Elastic kind of got hit really hard. HPE and Dell actually doing really well in the enterprise. >> Yep. >> 'Course Dell getting killed in the client. But so what are you seeing out there? How, as an executive, do you deal with such poor visibility? >> I think, listen, what the last two or three years have taught us is, you know, with the supply chain crisis, with the surge that people thought you may need of, you know, spending potentially in the pandemic, you have to start off with your tech platform being 10 x better than everybody else. And differentiate, differentiate. 'Cause in a crowded market, but even in a market that's getting tougher, if you're not differentiating constantly through technology innovation, you're going to get left behind. So you named a few places, they're all technology innovators, but even if some of them are having challenges, and then I think you're constantly asking yourselves, how do you move from being a point product to a platform with more and more services where you're getting, you know, many of them moving really fast. In the case of Roe, I like him a lot. He's probably one of the most savvy operators, also that I respect. He calls these speedboats, and you know, his core platform started off with the firewall network security. But he's built now a very credible cloud security, cloud AI security business. And I think that's how you need to be thinking as a tech executive. I mean, if you got core, your core beachhead 10 x better than everybody else. And as you move to adjacencies in these new platforms, have you got now speedboats that are getting to a point where they are competitive advantage? Then as you think of the go-to-market perspective, it really depends on where you are as a company. For a company like our size, we need partners a lot more. Because if we're going to, you know, stand on the shoulders of giants like Isaac Newton said, "I see clearly because I stand on the shoulders giants." I need to really go and cultivate Amazon so they become our lead partner in cloud. And then appropriately Microsoft and Google where I need to. And security. Part of what we announced last week was, last month, yeah, last couple of weeks ago, was the data security alliance with the biggest security players. What was I trying to do with that? First time ever done in my industry was get Palo Alto, CrowdStrike, Wallace, Tenable, CyberArk, Splunk, all to build an alliance with me so I could stand on their shoulders with them helping me. If you're a bigger company, you're constantly asking yourself "how do you make sure you're getting your, like Amazon, their top hundred customers spending more with that?" So I think the the playbook evolves, and I'm watching some of these best companies through this time navigate through this. And I think leadership is going to be tested in enormously interesting ways. >> I'll say. I mean, Snowflake is really interesting because they... 67% growth, which is, I mean, that's best in class for a company that's $2 billion. And, but their guide was still, you know, pretty aggressive. You know, so it's like, do you, you know, when it when it's good times you go, "hey, we can we can guide conservatively and know we can beat it." But when you're not certain, you can't dial down too far 'cause your investors start to bail on you. It's a really tricky- >> But Dave, I think listen, at the end of the day, I mean every CEO should not be worried about the short term up and down in the stock price. You're building a long-term multi-billion dollar company. In the case of Frank, he has, I think I shot to a $10 billion, you know, analytics data warehousing data management company on the back of that platform, because he's eyeing the market that, not just Teradata occupies today, but now Oracle occupies or other databases, right? So his tam as it grows bigger, you're going to have some of these things, but that market's big. I think same with Palo Alto. I mean Datadog's another company, 75% growth. >> Yeah. >> At 20% margins, like almost rule of 95. >> Amazing. >> When they're going after, not just the observability market, they're eating up the sim market, security analytics, the APM market. So I think, you know, that's, you look at these case studies of companies who are going from point product to platforms and are steadily able to grow into new tams. You know, to me that's very inspiring. >> I get it. >> Sanjay: That's what I seek to do at our com. >> I get that it's a marathon, but you know, when you're at VMware, weren't you looking at the stock price every day just out of curiosity? I mean listen, you weren't micromanaging it. >> You do, but at the end of the day, and you certainly look at the days of earnings and so on so forth. >> Yeah. >> Because you want to create shareholder value. >> Yeah. >> I'm not saying that you should not but I think in obsession with that, you know, in a short term, >> Going to kill ya. >> Makes you, you know, sort of myopically focused on what may not be the right thing in the long term. Now in the long arc of time, if you're not creating shareholder value... Look at what happened to Steve Bomber. You needed Satya to come in to change things and he's created a lot of value. >> Dave: Yeah, big time. >> But I think in the short term, my comments were really on the quarter to quarter, but over a four a 12 quarter, if companies are growing and creating profitable growth, they're going to get the valuation they deserve. >> Dave: Yeah. >> Do you the... I want to ask you about something Arvind Krishna said in the previous IBM earnings call, that IT is deflationary and therefore it is resistant to the macroeconomic headwinds. So IT spending should actually thrive in a deflation, in a adverse economic climate. Do you think that's true? >> Not all forms of IT. I pay very close attention to surveys from, whether it's the industry analysts or the Morgan Stanleys, or Goldman Sachs. The financial analysts. And I think there's a gluc in certain sectors that will get pulled back. Traditional view is when the economies are growing people spend on the top line, front office stuff, sales, marketing. If you go and look at just the cloud 100 companies, which are the hottest private companies, and maybe with the public market companies, there's way too many companies focused on sales and marketing. Way too many. I think during a downsizing and recession, that's going to probably shrink some, because they were all built for the 2009 to 2021 era, where it was all about the top line. Okay, maybe there's now a proposition for companies who are focused on cost optimization, supply chain visibility. Security's been intangible, that I think is going to continue to an investment. So I tell, listen, if you are a tech investor or if you're an operator, pay attention to CIO priorities. And right now, in our business at Cohesity, part of the reason we've embraced things like ransomware protection, there is a big focus on security. And you know, by intelligently being a management and a security company around data, I do believe we'll continue to be extremely relevant to CIO budgets. There's a ransomware, 20 ransomware attempts every second. So things of that kind make you relevant in a bank. You have to stay relevant to a buying pattern or else you lose momentum. >> But I think what's happening now is actually IT spending's pretty good. I mean, I track this stuff pretty closely. It's just that expectations were so high and now you're seeing earnings estimates come down and so, okay, and then you, yeah, you've got the, you know the inflationary factors and your discounted cash flows but the market's actually pretty good. >> Yeah. >> You know, relative to other downturns that if this is not a... We're not actually not in a downturn. >> Yeah. >> Not yet anyway. It may be. >> There's a valuation there. >> You have to prepare. >> Not sales. >> Yeah, that's right. >> When I was on CNBC, I said "listen, it's a little bit like that story of Joseph. Seven years of feast, seven years of famine." You have to prepare for potentially your worst. And if it's not the worst, you're in good shape. So will it be a recession 2023? Maybe. You know, high interest rates, inflation, war in Russia, Ukraine, maybe things do get bad. But if you belt tightening, if you're focused in operational excellence, if it's not a recession, you're pleasantly surprised. If it is one, you're prepared for it. >> All right. I'm going to put you in the spot and ask you for predictions. Expert analysis on the World Cup. What do you think? Give us the breakdown. (group laughs) >> As my... I wish India was in the World Cup, but you can't get enough Indians at all to play soccer well enough, but we're not, >> You play cricket, though. >> I'm a US man first. I would love to see one of Brazil, or Argentina. And as a Messi person, I don't know if you'll get that, but it would be really special for Messi to lead, to end his career like Maradonna winning a World Cup. I don't know if that'll happen. I'm probably going to go one of the Latin American countries, if the US doesn't make it far enough. But first loyalty to the US team, and then after one of the Latin American countries. >> And you think one of the Latin American countries is best bet to win or? >> I don't know. It's hard to tell. They're all... What happens now at this stage >> So close, right? >> is anybody could win. >> Yeah. You just have lots of shots of gold. I'm a big soccer fan. It could, I mean, I don't know if the US is favored to win, but if they get far enough, you get to the finals, anybody could win. >> I think they get Netherlands next, right? >> That's tough. >> Really tough. >> But... The European teams are good too, but I would like to see US go far enough, and then I'd like to see Latin America with team one of Argentina, or Brazil. That's my prediction. >> I know you're a big Cricket fan. Are you able to follow Cricket the way you like? >> At god unearthly times the night because they're in Australia, right? >> Oh yeah. >> Yeah. >> I watched the T-20 World Cup, select games of it. Yeah, you know, I'm not rapidly following every single game but the World Cup games, I catch you. >> Yeah, it's good. >> It's good. I mean, I love every sport. American football, soccer. >> That's great. >> You get into basketball now, I mean, I hope the Warriors come back strong. Hey, how about the Warriors Celtics? What do we think? We do it again? >> Well- >> This year. >> I'll tell you what- >> As a Boston Celtics- >> I would love that. I actually still, I have to pay off some folks from Palo Alto office with some bets still. We are seeing unprecedented NBA performance this year. >> Yeah. >> It's amazing. You look at the stats, it's like nothing. I know it's early. Like nothing we've ever seen before. So it's exciting. >> Well, always a pleasure talking to you guys. >> Great to have you on. >> Thanks for having me. >> Thank you. Love the expert analysis. >> Sanjay Poonen. Dave Vellante. Keep it right there. re:Invent 2022, day four. We're winding up in Las Vegas. We'll be right back. You're watching theCUBE, the leader in enterprise and emerging tech coverage. (lighthearted soft music)

>>Hello everyone and welcome back to Motor City, Michigan. We're live from the Cube and my name is Savannah Peterson. Joined this afternoon with my co-host John Ferer. John, how you doing? Doing >>Great. This next segment's gonna be awesome about application modernization, scaling pluses. This is what's gonna, how are the next generation software revolution? It's gonna be >>Fun. You know, it's kind of been a theme of our day today is scale. And when we think about the complex orchestration platform that is Kubernetes, everyone wants to scale faster, quicker, more efficiently, and our guests are here to tell us all about that. Please welcome to Char and Andy, thank you so much for being here with us. You were on the Red Hat OpenShift team. Yeah. I suspect most of our audience is familiar, but just in case, let's give 'em a quick one-liner pitch so everyone's on the same page. Tell us about OpenShift. >>I, I'll take that one. OpenShift is our ES platform is our ES distribution. You can consume it as a self-managed platform or you can consume it as a managed service on on public clouds. And so we just call it all OpenShift. So it's basically Kubernetes, but you know, with a CNCF ecosystem around it to make things more easier. So maybe there's two >>Lights. So what does being at coupon mean for you? How does it feel to be here? What's your initial takes? >>Exciting. I'm having a fantastic time. I haven't been to coupon since San Diego, so it's great to be back in person and see old friends, make new friends, have hallway conversations. It's, it's great as an engineer trying to work in this ecosystem, just being able to, to be in the same place with these folks. >>And you gotta ask, before we came on camera, you're like, this is like my sixth co con. We were like, we're seven, you know, But that's a lot of co coupons. It >>Is, yes. I mean, so what, >>Yes. >>Take us status >>For sure. Where we are now. Compare and contrast co. Your first co con, just scope it out. What's the magnitude of change? If you had to put a pin on that, because there's a lot of new people coming in, they might not have seen where it's come from and how we got here is maybe not how we're gonna get to the next >>Level. I've seen it grow tremendously since the first one I went to, which I think was Austin several years ago. And what's great is seeing lots of new people interested in contributing and also seeing end users who are trying to figure out the best way to take advantage of this great ecosystem that we have. >>Awesome. And the project management side, you get the keys to the Kingdom with Red Hat OpenShift, which has been successful. Congratulations by the way. Thank you. We watched that grow and really position right on the wave. It's going great. What's the update on on the product? Kind of, you're in a good, good position right now. Yeah, >>No, we we're feeling good about it. It's all about our customers. Obviously the fact that, you know, we have thousands of customers using OpenShift as the cloud native platform, the container platform. We're very excited. The great thing about them is that, I mean you can go to like OpenShift Commons is kind of a user group that we run on the first day, like on Tuesday we ran. I mean you should see the number of just case studies that our customers went through there, you know? And it is fantastic to see that. I mean it's across so many different industries, across so many different use cases, which is very exciting. >>One of the things we've been reporting here in the Qla scene before, but here more important is just that if you take digital transformation to the, to its conclusion, the IT department and developers, they're not a department to serve the business. They are the business. Yes. That means that the developers are deciding things. Yeah. And running the business. Prove their code. Yeah. Okay. If that's, if that takes place, you gonna have scale. And we also said on many cubes, certainly at Red Hat Summit and other ones, the clouds are distributed computer, it's distributed computing. So you guys are focusing on this project, Andy, that you're working on kcp. >>Yes. >>Which is, I won't platform Kubernetes platform for >>Control >>Planes. Control planes. Yes. Take us through, what's the focus on why is that important and why is that relate to the mission of developers being in charge and large scale? >>Sure. So a lot of times when people are interested in developing on Kubernetes and running workloads, they need a cluster of course. And those are not cheap. It takes time, it takes money, it takes resources to get them. And so we're trying to make that faster and easier for, for end users and everybody involved. So with kcp, we've been able to take what looks like one normal Kubernetes and partition it. And so everybody gets a slice of it. You're an administrator in your little slice and you don't have to ask for permission to install new APIs and they don't conflict with anybody else's APIs. So we're really just trying to make it super fast and make it super flexible. So everybody is their own admin. >>So the developer basically looks at it as a resource blob. They can do whatever they want, but it's shared and provisioned. >>Yes. One option. It's like, it's like they have their own cluster, but you don't have to go through the process of actually provisioning a full >>Cluster. And what's the alternative? What's the what's, what's the, what's the benefit and what was the alternative to >>This? So the alternative, you spin up a full cluster, which you know, maybe that's three control plane nodes, you've got multiple workers, you've got a bunch of virtual machines or bare metal, or maybe you take, >>How much time does that take? Just ballpark. >>Anywhere from five minutes to an hour you can use cloud services. Yeah. Gke, E Ks and so on. >>Keep banging away. You're configuring. Yeah. >>Those are faster. Yeah. But it's still like, you still have to wait for that to happen and it costs money to do all of that too. >>Absolutely. And it's complex. Why do something that's been done, if there's a tool that can get you a couple steps down the path, which makes a ton of sense. Something that we think a lot when we're talking about scale. You mentioned earlier, Tohar, when we were chatting before the cams were alive, scale means a lot of different things. Can you dig in there a little bit? >>Yeah, I >>Mean, so when, when >>We talk about scale, >>We are talking about from a user perspective, we are talking about, you know, there are more users, there are more applications, there are more workloads, there are more services being run on Kubernetes now, right? So, and OpenShift. So, so that's one dimension of this scale. The other dimension of the scale is how do you manage all the underlying infrastructure, the clusters, the name spaces, and all the observability data, et cetera. So that's at least two levels of scale. And then obviously there's a third level of scale, which is, you know, there is scale across not just different clouds, but also from cloud to the edge. So there is that dimension of scale. So there are several dimensions of this scale. And the one that again, we are focused on here really is about, you know, this, the first one that I talk about is a user. And when I say user, it could be a developer, it could be an application architect, or it could be an application owner who wants to develop Kubernetes applications for Kubernetes and wants to publish those APIs, if you will, and make it discoverable and then somebody consumes it. So that's the scale we are talking about >>Here. What are some of the enterprise, you guys have a lot of customers, we've talked to you guys before many, many times and other subjects, Red Hat, I mean you guys have all the customers. Yeah. Enterprise, they've been there, done that. And you know, they're, they're savvy. Yeah. But the cloud is a whole nother ballgame. What are they thinking about? What's the psychology of the customer right now? Because now they have a lot of choices. Okay, we get it, we're gonna re-platform refactor apps, we'll keep some legacy on premises for whatever reasons. But cloud pretty much is gonna be the game. What's the mindset right now of the customer base? Where are they in their, in their psych? Not the executive, but more of the the operators or the developers? >>Yeah, so I mean, first of all, different customers are at different levels of maturity, I would say in this. They're all on a journey how I like to describe it. And in this journey, I mean, I see a customers who are really tip of the sphere. You know, they have containerized everything. They're cloud native, you know, they use best of tools, I mean automation, you know, complete automation, you know, quick deployment of applications and all, and life cycle of applications, et cetera. So that, that's kind of one end of this spectrum >>Advanced. Then >>The advances, you know, and, and I, you know, I don't, I don't have any specific numbers here, but I'd say there are quite a few of them. And we see that. And then there is kind of the middle who are, I would say, who are familiar with containers. They know what app modernization, what a cloud application means. They might have tried a few. So they are in the journey. They are kind of, they want to get there. They have some other kind of other issues, organizational or talent and so, so on and so forth. Kinds of issues to get there. And then there are definitely the quota, what I would call the lag arts still. And there's lots of them. But I think, you know, Covid has certainly accelerated a lot of that. I hear that. And there is definitely, you know, more, the psychology is definitely more towards what I would say public cloud. But I think where we are early also in the other trend that I see is kind of okay, public cloud great, right? So people are going there, but then there is the so-called edge also. Yeah. That is for various regions. You, you gotta have a kind of a regional presence, a edge presence. And that's kind of the next kind of thing taking off here. And we can talk more >>About it. Yeah, let's talk about that a little bit because I, as you know, as we know, we're very excited about Edge here at the Cube. Yeah. What types of trends are you seeing? Is that space emerges a little bit more firmly? >>Yeah, so I mean it's, I mean, so we, when we talk about Edge, you're talking about, you could talk about Edge as a, as a retail, I mean locations, right? >>Could be so many things edges everywhere. Everywhere, right? It's all around us. Quite literally. Even on the >>Scale. Exactly. In space too. You could, I mean, in fact you mentioned space. I was, I was going to >>Kinda, it's this world, >>My space actually Kubernetes and OpenShift running in space, believe it or not, you know, So, so that's the edge, right? So we have Industrial Edge, we have Telco Edge, we have a 5g, then we have, you know, automotive edge now and, and, and retail edge and, and more, right? So, and space, you know, So it's very exciting there. So the reason I tag back to that question that you asked earlier is that that's where customers are. So cloud is one thing, but now they gotta also think about how do I, whatever I do in the cloud, how do I bring it to the edge? Because that's where my end users are, my customers are, and my data is, right? So that's the, >>And I think Kubernetes has brought that attention to the laggards. We had the Laed Martin on yesterday, which is an incredible real example of Kubernetes at the edge. It's just incredible story. We covered it also wrote a story about it. So compelling. Cuz it makes it real. Yes. And Kubernetes is real. So then the question is developer productivity, okay, Things are starting to settle in. We've got KCP scaling clusters, things are happening. What about the tool chains? And how do I develop now I got scale of development, more code coming in. I mean, we are speculating that in the future there's so much code in open source that no one has to write code anymore. Yeah. At some point it's like this gluing things together. So the developers need to be productive. How are we gonna scale the developer equation and eliminate the, the complexity of tool chains and environments. Web assembly is super hyped up at this show. I don't know why, but sounds good. No one, no one can tell me why, but I can kind of connect the dots. But this is a big thing. >>Yeah. And it's fitting that you ask about like no code. So we've been working with our friends at Cross Plain and have integrated with kcp the ability to no code, take a whole bunch of configuration and say, I want a database. I want to be a, a provider of databases. I'm in an IT department, there's a bunch of developers, they don't wanna have to write code to create databases. So I can just take, take my configuration and make it available to them. And through some super cool new easy to use tools that we have as a developer, you can just say, please give me a database and you don't have to write any code. I don't have to write any code to maintain that database. I'm actually using community tooling out there to get that spun up. So there's a lot of opportunities out there. So >>That's ease of use check. What about a large enterprise that's got multiple tool chains and you start having security issues. Does that disrupt the tool chain capability? Like there's all those now weird examples emerging, not weird, but like real plumbing challenges. How do you guys see that evolving with Red >>Hat and Yeah, I mean, I mean, talking about that, right? The software, secure software supply chain is a huge concern for everyone after, especially some of the things that have happened in the past few >>Years. Massive team here at the show. Yeah. And just within the community, we're all a little more aware, I think, even than we were before. >>Before. Yeah. Yeah. And, and I think the, so to step back, I mean from, so, so it's not just even about, you know, run time vulnerability scanning, Oh, that's important, but that's not enough, right? So we are talking about, okay, how did that container, or how did that workload get there? What is that workload? What's the prominence of this workload? How did it get created? What is in it? You know, and what, what are, how do I make, make sure that there are no unsafe attack s there. And so that's the software supply chain. And where Red Hat is very heavily invested. And as you know, with re we kind of have roots in secure operating system. And rel one of the reasons why Rel, which is the foundation of everything we do at Red Hat, is because of security. So an OpenShift has always been secure out of the box with things like scc, rollbacks access control, we, which we added very early in the product. >>And now if you kind of bring that forward, you know, now we are talking about the complete software supply chain security. And this is really about right how from the moment the, the, the developer rights code and checks it into a gateway repository from there on, how do you build it? How do you secure it at each step of the process, how do you sign it? And we are investing and contributing to the community with things like cosign and six store, which is six store project. And so that secures the supply chain. And then you can use things like algo cd and then finally we can do it, deploy it onto the cluster itself. And then we have things like acs, which can do vulnerability scanning, which is a container security platform. >>I wanna thank you guys for coming on. I know Savannah's probably got a last question, but my last question is, could you guys each take a minute to answer why has Kubernetes been so successful today? What, what was the magic of Kubernetes that made it successful? Was it because no one forced it? Yes. Was it lightweight? Was it good timing, right place at the right time community? What's the main reason that Kubernetes is enabling all this, all this shift and goodness that's coming together, kind of defacto unifies people, the stacks, almost middleware markets coming around. Again, not to use that term middleware, but it feels like it's just about to explode. Yeah. Why is this so successful? I, >>I think, I mean, the shortest answer that I can give there really is, you know, as you heard the term, I think Satya Nala from Microsoft has used it. I don't know if he was the original person who pointed, but every company wants to be a software company or is a software company now. And that means that they want to develop stuff fast. They want to develop stuff at scale and develop at, in a cloud native way, right? You know, with the cloud. So that's, and, and Kubernetes came at the right time to address the cloud problem, especially across not just one public cloud or two public clouds, but across a whole bunch of public clouds and infrastructure as, and what we call the hybrid clouds. I think the ES is really exploded because of hybrid cloud, the need for hybrid cloud. >>And what's your take on the, the magic Kubernetes? What made it, what's making it so successful? >>I would agree also that it came about at the right time, but I would add that it has great extensibility and as developers we take it advantage of that every single day. And I think that the, the patterns that we use for developing are very consistent. And I think that consistency that came with Kubernetes, just, you have so many people who are familiar with it and so they can follow the same patterns, implement things similarly, and it's just a good fit for the way that we want to get our software out there and have, and have things operate. >>Keep it simple, stupid almost is that acronym, but the consistency and the de facto alignment Yes. Behind it just created a community. So, so then the question is, are the developers now setting the standards? That seems like that's the new way, right? I mean, >>I'd like to think so. >>So I mean hybrid, you, you're touching everything at scale and you also have mini shift as well, right? Which is taking a super macro micro shift. You ma micro shift. Oh yeah, yeah, exactly. It is a micro shift. That is, that is fantastic. There isn't a base you don't cover. You've spoken a lot about community and both of you have, and serving the community as well as your engagement with them from a, I mean, it's given that you're both leaders stepping back, how, how Community First is Red Hat and OpenShift as an organization when it comes to building the next products and, and developing. >>I'll take and, and I'm sure Andy is actually the community, so I'm sure he'll want to a lot of it. But I mean, right from the start, we have roots in open source. I'll keep it, you know, and, and, and certainly with es we were one of the original contributors to Kubernetes other than Google. So in some ways we think about as co-creators of es, they love that. And then, yeah, then we have added a lot of things in conjunction with the, I I talk about like SCC for Secure, which has become part security right now, which the community, we added things like our back and other what we thought were enterprise features needed because we actually wanted to build a product out of it and sell it to customers where our customers are enterprises. So we have worked with the community. Sometimes we have been ahead of the community and we have convinced the community. Sometimes the community has been ahead of us for other reasons. So it's been a great collaboration, which is I think the right thing to do. But Andy, as I said, >>Is the community well set too? Are well said. >>Yes, I agree with all of that. I spend most of my days thinking about how to interact with the community and engage with them. So the work that we're doing on kcp, we want it to be a community project and we want to involve as many people as we can. So it is a heavy focus for me and my team. And yeah, we we do >>It all the time. How's it going? How's the project going? You feel good >>About it? I do. It is, it started as an experiment or set of prototypes and has grown leaps and bounds from it's roots and it's, it's fantastic. Yeah. >>Controlled planes are hot data planes control planes. >>I >>Know, I love it. Making things work together horizontally scalable. Yeah. Sounds like cloud cloud native. >>Yeah. I mean, just to add to it, there are a couple of talks that on KCP at Con that our colleagues s Stephan Schemanski has, and I, I, I would urge people who have listening, if they have, just Google it, if you will, and you'll get them. And those are really awesome talks to get more about >>It. Oh yeah, no, and you can tell on GitHub that KCP really is a community project and how many people are participating. It's always fun to watch the action live to. Sure. Andy, thank you so much for being here with us, John. Wonderful questions this afternoon. And thank all of you for tuning in and listening to us here on the Cube Live from Detroit. I'm Savannah Peterson. Look forward to seeing you again very soon.