>>You want us to >>Look at that camera? Okay. We're back in Boston, everybody. This is Dave ante for the cube, the leader in enterprise tech coverage. This is reinforce 2022 AWS's big security conference. We're here in Boston, the convention center where the cube started in 2010. Highend song is here. She's head of security and distributed cloud services at F five. And she's joined by Dan woods. Who's the global head of intelligence at F five. Great to see you again. Thanks for coming in the cube, Dan, first time I believe. Yeah. Happy to be here. All right. Good to see you guys. How's the, how's the event going for? Y'all >>It's been just fascinating to see all those, uh, new players coming in and taking security in a very holistic way. Uh, very encouraged. >>Yeah. Boston in, in July is, is good. A lot of, a lot of action to Seaport. When I was a kid, there was nothing here, couple mob restaurants and that's about it. And, uh, now it's just like a booming, >>I'm just happy to see people in, in person. Finally, is >>This your first event since? Uh, maybe my second or third. Third. Okay, >>Great. Since everything opened up and I tell you, I am done with >>Zoom. Yeah. I mean, it's very clear. People want to get back face to face. It's a whole different dynamic. I think, you know, the digital piece will continue as a compliment, but nothing beats belly to belly, as I like absolutely say. All right. Hi on let's start with you. So you guys do a, uh, security report every year. I think this is your eighth year, the app security report. Yeah. Um, I think you, you noted in this report, the growing complexity of apps and integrations, what did you, what are, what were your big takeaways this year? >>And so, like you said, this is our eighth year and we interview and talk to about 1500 of like companies and it decision makers. One of the things that's so prevalent coming out of the survey is complexity that they have to deal with, continue to increase. It's still one of the biggest headaches for all the security professionals and it professionals. And that's explainable in a way, if you look at how much digital transformation has happened in the last two years, right? It's an explosion of apps and APIs. That's powering all our digital way of working, uh, in the last two years. So it's certainly natural to, to see the complexity has doubled and tripled and, and we need to do something about it. >>And the number of tools keeps growing. The number of players keeps growing. I mean, so many really interesting, you know, they're really not startups anymore, but well funded new entrance into the marketplace. Were there any big surprises to you? You know, you're a security practitioner, you know, this space really well, anything jump out like, whoa, that surprised >>Me. Yeah. It's been an interesting discussion when we look at the results, right. You know, some of us would say, gosh, this is such a big surprise. How come people still, you know, willing to turn off security for the benefits of performance. And, and, and as a security professional, I will reflect on that. I said, it's a surprise, or is it just a mandate for all of us in security, we got to do better. And because security shouldn't be the one that prevents or add friction to what the business wants to do, right? So it's a surprise because we, how can, after all the breaches and, and then security incidents, people are still, you know, the three quarters of the, uh, interviewees said, well, you know, if we were given a choice, we'll turn off security for performance. And I think that's a call to action for all of us in security. How do we make security done in a way that's frictionless? And they don't have to worry about it. They don't have to do a trade off. And I think that's one of the things, you know, Dan in working our entire anti automation, uh, solution one is to PR protect. And the other thing is to enable. >>Yeah. You think about Dan, the, I always say the, the adversary is extremely capable. The ROI of cyber tech just keeps getting better and better. And your jobs really is to, to, to lower the ROI, right. It decrease the value, increase the cost, but you're, I mean, fishing continues to be prevalent. You're seeing relatively new technique island hopping, self forming malware. I mean, it's just mind boggling, but, but how are you seeing, you know, the attack change? You know, what what's the adversary do differently over the last, you know, several years maybe pre and post pandemic, we've got a different attack service. What are you seeing? >>Well, we're seeing a lot higher volume attacks, a lot higher volume and velocity. Mm-hmm, <affirmative> it isn't uncommon at all for us to go in line and deploy our client side signals and see, uh, the upper 90%, um, is automated, unwanted automation hitting the application. Uh, so the fact that the security teams continue to underestimate the size of the problem. That is something I see. Every time we go in into an enterprise that they underestimate the size of the problem, largely because they're relying on, on capabilities like caps, or maybe they're relying on two of a and while two of a is a very important role in security. It doesn't stop automated attacks and cap certainly doesn't stop automated >>Tax. So, okay. So you said 90% now, as high as 90% are, are automated up from where maybe dial back to give us a, a marker as to where it used to be. >>Well, less than 1% is typically what all of our customers across the F five network enjoy less than 1% of all traffick hitting origin is unwanted, but when we first go online, it is upper 90, we've seen 99% of all traffic being unwanted >>Automation. But Dan, if I dial back to say 2015, was it at that? Was it that high? That, that was automated >>Back then? Or, you know, I, I don't know if it was that high then cuz stuffing was just, you know, starting to kind take off. Right? No. Right. Um, but as pre stuffing became better and better known among the criminal elements, that's when it really took off explain the pays you're right. Crime pays >>Now. Yeah. It's unfortunate, but it's true. Yeah. Explain the capture thing. Cause sometimes as a user, like it's impossible to do the capture, you know, it's like a twister. Yeah. >>I >>Got that one wrong it's and I presume it's because capture can be solved by, by bots. >>Well, actually the bots use an API into a human click farming. So they're humans to sit around, solving captures all day long. I actually became a human capture solver for a short time just to see what the experience was like. And they put me to the training, teaching me how to solve, captures more effectively, which was fascinating, cuz I needed that training frankly. And then they tested to make sure I solve caps quickly enough. And then I had solved maybe 30 or 40 caps and I hadn't earned one penny us yet. So this is how bots are getting around caps. They just have human solve them. >>Oh, okay. Now we hear a lot at this event, you gotta turn on multifactor authentication and obviously you don't want to use just SMS based MFA, but Dan you're saying not good enough. Why explain >>That? Well, most implementations of two a is, you know, you enter in username and password and if you enter in the correct username and password, you get a text message and you enter in the code. Um, if you enter in the incorrect username and password, you're not sent to code. So the, the purpose of a credential stocking attack is to verify whether the credentials are correct. That's the purpose. And so if it's a two, a protected log in, I've done that. Admittedly, I haven't taken over the account yet, but now that I have a list of known good credentials, I could partner with somebody on the dark web who specializes in defeating two, a through social engineering or port outs or SIM swaps S so seven compromises insiders at telcos, lots of different ways to get at the, uh, two, a text message. >>So, wow, <laugh>, this is really interesting, scary discussion. So what's the answer to, to that problem. How, how have five approach >>It highend touched on it. We, we want to improve security without introducing a lot of friction. And the solution is collecting client side signals. You interrogate the users, interactions, the browser, the device, the network, the environment, and you find things that are unique that can't be spoof like how it does floating point math or how it renders emojis. Uh, this way you're able to increase security without imposing friction on, on the customer. And honestly, if I have to ever have to solve another capture again, I, I, I just, my blood is boiling over capture. I wish everyone would rip it out >>As a user. I, I second that request I had, um, technology got us into this problem. Can technology help us get out of the problem? >>It has to. Um, I, I think, uh, when you think about the world that is powering all the digital experiences and there's two things that comes to mind that apps and APIs are at the center of them. And in order to solve the problem, we need to really zero in where, you know, the epic center of the, the, uh, attack can be and, and had the max amount of impact. Right? So that's part of the reason from a F five perspective, we think of application and API security together with the multitier the defense with, you know, DDoS to bots, to the simple boss, to the most sophisticated ones. And it has to be a continuum. You don't just say, Hey, I'm gonna solve this problem in this silo. You have to really think about app and APIs. Think about the infrastructure, think about, you know, we're here at AWS and cloud native solutions and API services is all over. You. Can't just say, I only worry about one cloud. You cannot say, I only worry about VMs. You really need to think of the entire app stack. And that's part of the reason when we build our portfolio, there is web application firewall, there's API security there's bot solution. And we added, you know, application infrastructure protection coming from our acquisition for threat stack. They're actually based in Boston. Uh, so it's, it's really important to think holistically of telemetry visibility, so you can make better decisions for detection response. >>So leads me to a number of questions first. The first I wanna stay within the AWS silo for a minute. Yeah. Yeah. What do you, what's the relationship with AWS? How will you, uh, integrating, uh, partnering with AWS? Let's start there. >>Yeah, so we work with AWS really closely. Uh, a lot of our solutions actually runs on the AWS platform, uh, for part of our shape services. It's it's, uh, using AWS capabilities and thread stack is purely running on AWS. We just, uh, actually had integration, maybe I'm pre announcing something, uh, with, uh, the cloud front, with our bot solutions. So we can be adding another layer of protection for customers who are using cloud front as the w on AWS. >>Okay. So, um, you integrate, you worry about a APIs, AWS APIs and primitives, but you have business on prem, you have business, other cloud providers. How do you simplify those disparities for your customers? Do you kind of abstract all that complexity away what's F fives philosophy with regard then and creating that continuous experience across the states irrespective of physical >>Location? Yeah, I think you're spot on in terms of, we have to abstract the complexity away. The technology complexity is not gonna go away because there's always gonna be new things coming in the world become more disaggregated and they're gonna be best of brain solutions coming out. And I think it's our job to say, how do we think about policies for web application? And, you know, you're, on-prem, you're in AWS, you're in another cloud, you're in your private data center and we can certainly abstract out the policies, the rules, and to make sure it's easier for a customer to say, I want this particular use case and they push a button. It goes to all the properties, whether it's their own edge or their own data center, and whether it's using AWS, you know, cloud front as you using or web. So that is part of our adapt. Uh, we call it adaptive application. Vision is to think delivery, think security, think optimizing the entire experience together using data. You know, I come from, uh, a company that was very much around data can power so many things. And we believe in that too. >>We use a, we use a term called super cloud, which, which implies a layer that floats above the hyperscale infrastructure hides the underlying complexity of the primitives adds value on top and creates a continuous experience across clouds, maybe out to the edge even someday on prem. Is that, does that sound like, it sounds like that's your strategy and approach and you know, where are you today? And that is that, is that technically feasible today? Is it, is it a journey? Maybe you could describe >>That. Yeah. So, uh, in my title, right, you talked about a security and distribute cloud services and the distribute cloud services came from a really important acquisition. We did last year and it's about, uh, is called Wil Tara. What they brought to F five is the ability not only having lot of the SAS capabilities and delivery capabilities was a very strong infrastructure. They also kept have capability like multi-cloud networking and, you know, people can really just take our solution and say, I don't have to go learn about all the, like I think using super cloud. Yeah, yeah. Is exactly that concept is we'll do all the hard work behind the scenes. You just need to decide what application, what user experience and we'll take care of the rest. So that solutions already in the market. And of course, there's always more things we can do collect more telemetry and integrate with more solutions. So there's more insertion point and customer can have their own choice of whatever other security solution they want to put on top of that. But we already provide, you know, the entire service around web application and API services and bot solution is a big piece of that. >>So I could look at analytics across those clouds and on-prem, and actually you don't have to go to four different stove pipes to find them, is that >>Right? Yeah. And I think you'd be surprised on what you would see. Like you, you know, typically you're gonna see large amounts of unwanted automation hitting your applications. Um, it's, I, I think the reason so many security teams are, are underestimating. The size of the problem is because these attacks are coming from tens of thousands, hundreds of thousands, even millions of IP addresses. So, you know, for years, security teams have been blocking by IP and it's forced the attackers to become highly, highly distributed. So the security teams will typically identify the attack coming from the top hundred or 1500 noisiest IPS, but they missed the long tail of tens of thousands, hundreds of thousands of IPS that are only used one or two times, because, you know, over time we forced the attackers to do this. >>They're scaling. >>Yeah, they are. And, and they're coming from residential IPS now, uh, not just hosting IPS, they're coming from everywhere. >>And, and wow. I mean, I, we know that the pandemic changed the way that organization, they had to think more about network security, rethinking network security, obviously end point cloud security. But it sounds like the attackers as well, not only did they exploit that exposure, but yeah, yeah. They were working from home and then <laugh> >>The human flick farms. They're now distributor. They're all working from home. >>Now we could take advantage >>Of that when I was solving captures, you could do it on your cell phone just by walking around, solving, captures for money. >>Wow. Scary world. But we live in, thank you for helping making it a little bit safer, guys. Really appreciate you coming on the queue. >>We'll continue to work on that. And our motto is bring a better digital world to life. That's what we can set out >>To do. I love it. All right. Great. Having you guys. Thank you. And thank you for watching. Keep it right there. This is Dave ante from reinforce 2022. You're watching the cube right back after this short break.

(upbeat music) >> Welcome back. We're winding down theCUBE's coverage of Red Hat Summit 2022. We're here at the Seaport in Boston. It's been two days of a little different Red Hat Summit. We're used to eight, 9,000 people. It's much smaller event this year, fewer developers or actually in terms of the mix, a lot more suits this year, which is kind of interesting to see that evolution and a big virtual audience. And I love the way, the keynotes we've noticed are a lot tighter. They're pithy, on time, they're not keeping us in the hall for three hours. So we appreciate that kind of catering to the virtual audience. Dave Vellante here with my co-host, Paul Gillin. As to say things are winding down, there was an analyst event here today, that's ended, but luckily we have Jim Mercer here as a research director at IDC. He's going to share maybe some of the learnings from that event today and this event overall, we're going to talk about DevSecOps. And Kirsten Newcomer is director of security, product management and hybrid platforms at Red Hat. Folks, welcome. >> Thank you. >> Thank you. >> Great to see you. >> Great to be here. >> Security's everywhere, right? You and I have spoken about the supply chain hacks, we've done some sort of interesting work around that and reporting around that. I feel like SolarWinds created a new awareness. You see these moments, it's Stuxnet, or WannaCry and now is SolarWinds very insidious, but security, Red Hat, it's everywhere in your portfolio. Maybe talk about the strategy. >> Sure, absolutely. We feel strongly that it's really important that security be something that is managed in a holistic way present throughout the application stack, starting with the operating system and also throughout the life cycle, which is partly where DevSecOps comes in. So Red Hat has kind of had a long history here, right? Think SELinux and Red Hat Enterprise Linux for mandatory access control. That's been a key component of securing containers in a Kubernetes environment. SELinux has demonstrated the ability to prevent or mitigate container escapes to the file system. And we just have continued to work up the stack as we go, our acquisition of stack rocks a little over a year ago, now known as Red Hat Advanced Cluster Security, gives us the opportunity to really deliver on that DevSecOps component. So Kubernetes native security solution with the ability to both help shift security left for the developers by integrating in the supply chain, but also providing a SecOps perspective for the operations and the security team and feeding information between the two to really try and do that closed infinity loop and then an additional investment more recently in sigstore and some technologies. >> Interesting. >> Yeah, is interesting. >> Go ahead. >> But Shift Left, explain to people what you mean by Shift Left for people might not be familiar with that term. >> Fair enough. For many, many years, right, IT security has been something that's largely been part of an operations environment and not something that developers tended to need to be engaged in with the exception of say source code static analysis tools. We started to see vulnerability management tools get added, but even then they tend to come after the application has been built. And I even ran a few years ago, I ran into a customer who said my security team won't let me get this information early. So Shift Left is all about making sure that there are security gates in the app dev process and information provided to the developer as early as possible. In fact, even in the IDE, Red Hat code ready dependency analytics does that, so that the developers are part of the solution and don't have to wait and get their apps stalled just before it's ready to go into deployment. >> Thank you. You've also been advocating for supply chain security, software supply chain. First of all, explain what a software supply chain is and then, what is unique about the security needs of that environment? >> Sure. And the SolarWinds example, as Dave said, really kind of has raised awareness around this. So just like we use the term supply chain, most people given kind of what's been happening with the pandemic, they've started hearing that term a lot more than they used to, right? So there's a supply chain to get your groceries, to the grocery store, food to the grocery store. There's a supply chain for manufacturing, where do the parts come for the laptops that we're all using, right? And where do they get assembled? Software has a supply chain also, right? So for years and even more so now, developers have been including open source components into the applications they build. So some of the supplies for the applications, the components of those applications, they can come from anywhere in the world. They can come from a wide range of open source projects. Developers are adding their custom code to that. All of this needs to be built together, delivered together and so when we think about a supply chain and the SolarWinds hack, right, there are a couple of elements of supply chain security that are particularly key. The executive order from May of last year, I think was partly in direct response to the SolarWinds hack. And it calls out that we need a software bill of materials. Now again, in manufacturing that's something folks are used to, I actually had the opportunity to contribute to the software package data exchange format, SPDX when it was first started, I've lost track of when that was. But an S-bomb is all about saying, what are all of those components that I'm delivering in my solution? It might be an application layer. It might be the host operating system layer, but at every layer. And if I know what's in what I'm delivering, I have the opportunity to learn more information about those components to track where does Log4Shell, right? When the Log4j or Spring4Shell, which followed shortly thereafter. When those hit, how do I find out which solutions that I'm running have the vulnerable components in them and where are they? The software bill of materials helps with that but you also have to know where, right. And that's the Ops side. I feel like I missed a piece of your question. >> No, it's not a silver bullet though, to your point and Log4j very widely used, but let's bring Jim into the conversation. So Jim, we've been talking about some of these trends, what's your focus area of research? What are you seeing as some of the mega trends in this space? >> I mean, I focus in DevOps and DevSecOps and it's interesting just talking about trends. Kirsten was mentioning the open source and if you look back five, six, seven years ago and you went to any major financial institution, you asked them if they use an open source. Oh, no. >> True. >> We don't use that, right. We wrote it all here. It's all from our developers-- >> Witchcraft. >> Yeah, right, exactly. But the reality is, they probably use a little open source back then but they didn't realize it. >> It's exactly true. >> However, today, not only are they not on versed to open source, they're seeking it out, right. So we have survey data that kind of indicates... A survey that was run kind of in late 2021 that shows that 70% of those who responded said that within the next two years 90% of their applications will be made up of open source. In other words, the content of an application, 10% will be written by themselves and 90% will come from other sources. So we're seeing these more kind of composite applications. Not, everybody's kind of, if you will, at that 90%, but applications are much more composite than they were before. So I'm pulling in pieces, but I'm taking the innovation of the community. So I not only have the innovation of my developers, but I can expand that. I can take the innovation to the community and bring that in and do things much quicker. I can also not have my developers worry about things that, maybe just kind of common stuff that's out there that might have already been written. In other words, just focus on the business logic, don't focus on, how to get orders or how to move widgets and those types of things that everybody does 'cause that's out there in open source. I'll just take that, right. I'll take it, somebody's perfected it, better than I'll ever do. I'll take that in and then I'll just focus and build my business logic on top of that. So open source has been a boom for growth. And I think we've heard a little bit of that (Kirsten laughs) in the last two days-- >> In the Keynotes. >> From Red Hat, right. But talking about the software bill of materials, and then you think about now I taking all that stuff in, I have my first level open source that I took in, it's called it component A. But behind component A is all these transitive dependencies. In other words, open source also uses open source, right? So there's this kind of this, if you will, web or nest, if you want to call it that, of transitive dependencies that need to be understood. And if I have five, six layers deep, I have a vulnerability in another component and I'm over here. Well, guess what? I picked up that vulnerability, right. Even though I didn't explicitly go for that component. So that's where understanding that software bill of materials is really important. I like to explain it as, during the pandemic, we've all experienced, there was all this contact tracing. It was a term where all came to mind. The software bill of materials is like the contact tracing for your open source, right. >> Good analogy. >> Anything that I've come in contact with, just because I came in contact with it, even though I didn't explicitly go looking for COVID, if you will, I got it, right. So in the same regard, that's how I do the contact tracing for my software. >> That 90% figure is really striking. 90% open source use is really striking, considering that it wasn't that long ago that one of the wraps on open source was it's insecure because anybody can see the code, therefore anybody can see the vulnerabilities. What changed? >> I'll say that, what changed is kind of first, the understanding that I can leapfrog and innovate with open source, right? There's more open source content out there. So as organizations had to digitally transform themselves and we've all heard the terminology around, well, hey, with the pandemic, we've leapfrog up five years of digital transformation or something along those lines, right? Open source is part of what helps those teams to do that type of leapfrog and do that type of innovation. You had to develop all of that natively, it just takes too long, or you might not have the talent to do it, right. And to find that talent to do it. So it kind of gives you that benefit. The interesting thing about what you mentioned there was, now we're hearing about all these vulnerabilities, right, in open source, that we need to contend with because the bad guys realize that I'm taking a lot of open source and they're saying, geez, that's a great way to get myself into applications. If I get myself into this one open source component, I'll get into thousands or more applications. So it's a fast path into the supply chain. And that's why it's so important that you understand where your vulnerabilities are in the software-- >> I think the visibility cuts two ways though. So when people say, it's insecure because it's visible. In fact, actually the visibility helps with security. The reality that I can go see the code, that there is a community working on finding and fixing vulnerabilities in that code. Whereas in code that is not open source it's a little bit more security by obscurity, which isn't really security. And there could well be vulnerabilities that a good hacker is going to find, but are not disclosed. So one of the other things we feel strongly about at Red Hat, frankly, is if there is a CVE that affects our code, we disclose that publicly, we have a public CVE database. And it's actually really important to us that we share that, we think we share way more information about issues in our code than most other users or consumers of open source and we work that through the broad community as well. And then also for our enterprise customers, if an issue needs to be fixed, we don't just fix it in the most recent version of the open source. We will backport that fix. And one of the challenges, if you're only addressing the most recent version, that may not be well tested, it might have other bugs, it might have other issues. When we backport a security vulnerability fix, we're able to do that to a stable version, give the customers the benefit of all the testing and use that's gone on while also fixing. >> Kirsten, can you talk about the announcements 'cause everybody's wondering, okay, now what do I do about this? What technology is there to help me? Obviously this framework, you got to follow the right processes, skill sets, all that, not to dismiss that, that's the most important part, but the announcements that you made at Red Hat Summit and how does the StackRox acquisition fit into those? >> Sure. So in particular, if we stick with DevSecOps a minute, but again, I'll do. Again for me, DevSecOps is the full life cycle and many people think of it as just that Shift Left piece. But for me, it's the whole thing. So StackRox ACS has had the ability to integrate into the CI/CD pipeline before we bought them. That continues. They don't just assess for vulnerabilities, but also for application misconfigurations, excess proof requests and helm charts, deployment YAML. So kind of the big, there are two sort of major things in the DevSecOps angle of the announcement or the supply chain angle of the announcement, which is the investment that we've been making in sigstore, signing, getting integrity of the components, the elements you're deploying is important. I have been asked for years about the ability to sign container images. The reality is that the signing technology and Red Hat signs everything we ship and always have, but the signing technology wasn't designed to be used in a CI/CD pipeline and sigstore is explicitly designed for that use case to make it easy for developers, as well as you can back it with full CO, you can back it with an OIDC based signing, keyless signing, throw away the key. Or if you want that enterprise CA, you can have that backing there too. >> And you can establish that as a protocol where you must. >> You can, right. So our pattern-- >> So that would've helped with SolarWinds. >> Absolutely. >> Because they were putting in malware and then taking it out, seeing what happened. My question was, could sigstore help? I always evaluate now everything and I'm not a security expert, but would this have helped with SolarWinds? A lot of times the answer is no. >> It's a combination. So a combination of sigstore integrated with Tekton Chains. So we ship Tekton, which is a Kubernetes supply chain pipeline. As OpenShift pipelines, we added chains to that. Chains allows you to attest every step in your pipeline. And you're doing that attestation by signing those steps so that you can validate that those steps have not changed. And in fact, the folks at SolarWinds are using Tekton Chains. They did a great talk in October at KubeCon North America on the changes they've made to their supply chain. So they're using both Tekton Chains and sigstore as part of their updated pipeline. Our pattern will allow our customers to deploy OpenShift, advanced cluster manager, advanced cluster security and Quay with security gates in place. And that include a pipeline built on Tekton with Tekton Chains there to sign those steps in the pipeline to enable signing of the code that's moving through that pipeline to store that signature in Quay and to validate the image signature upon deployment with advanced cluster security. >> So Jim, your perspective on this, Red Hat's, I mean, you care about security, security's everywhere, but you're not a security company. You follow security companies. There's like far too many of them. CISOs all say my number one challenge is lack of talent, but I have all these tools to deal with. You see new emerging companies that are doing pretty well. And then you see a company that's highly respected, like an Okta screw up the communications on a pretty benign hack. Actually, when you peel the onion on that, it's just this mess (chuckles) and it doesn't seem like it's going to get any simpler. Maybe the answer is companies like Red Hat kind of absorbing that and taking care of it. What do you see there? I mean, maybe it's great for business 'cause you've got so many companies. >> There's a lot of companies and there's certainly a lot of innovation out there and unique ways to make security easier, right. I mean, one of the keys here is to be able to make security easier for developers, right. One of the challenges with adopting DevSecOps is if DevSecOps creates a lot of friction in the process, it's hard to really... I can do it once, but I can't keep doing that and get the same kind of velocity. So I need to take the friction out of the process. And one of the challenges a lot of organizations have, and I've heard this from the development side, but I've also heard it from the InfoSec side, right. Because I take inquiry for people on InfoSec, and they're like, how do I get these developers to do what I want? And part of the challenge they have is like, I got these teams using these tools. I got those teams using those tools. And it's a similar challenge that we saw on DevOps where there's just too many, if you will, too many dang tools, right. So that is a challenge for organizations is, they're trying to kind of normalize the tools. Interestingly, we did a survey, I think around last August or something. And one of the questions was around, where do you want your security? Where do you want to get your DevSecOps security from, do you want to get it from individual vendors? Or do you want to get it from like, your platforms that you're using and deploying changes in Kubernetes. >> Great question. What did they say? >> The majority of them, they're hoping they can get it built into the platform. That's really what they want. And you see a lot of the security vendors are trying to build security platforms. Like we're not just assess tool, we're desk, we're this, whatever. And they're building platforms to kind of be that end-to-end security platform, trying to solve that problem, right, to make it easier to kind of consume the product overall, without a bunch of individual tools along the way. But certainly tool sprawl is definitely a challenge out there. Just one other point around the sigstore stuff which I love. Because that goes back to the supply chain and talking about digital providence, right. Understanding where things... How do I validate that what I gave you is what you thought it was, right. And what I like about it with Tekton Chains is because there's a couple things. Well, first of all, I don't want to just sign things after I built the binary. Well, I mean, I do want to sign it, but I want to just sign things once, right. Because all through the process, I think of it as a manufacturing plant, right. I'm making automobiles. If I check the quality of the automobile at one stage and I don't check it to the other, things have changed, right. How do I know that I did something wasn't compromised, right. So with sigstore kind of tied in with Tekton Chains, kind of gives me that view. And the other aspect I like it about is, this kind of transparency in the log, right-- >> The report component. >> Exactly. So I can see what was going on. So there is some this kind of like public scrutiny, like if something bad happened, you could go back and see what happened there and it wasn't as you were expected. >> As with most discussions on this topic, we could go for an hour because it's really important. And thank you guys for coming on and sharing your perspectives, the data. >> Our pleasure. >> And keep up the good work. Kirsten, it's on you. >> Thanks so much. >> The IDC survey said it, they want it in platforms. You're up. >> (laughs) That's right. >> All right. Good luck to both you. >> Thank you both so much. >> All right. And thank you for watching. We're back to wrap right after this short break. This is Dave Vellante for Paul Gill. You're watching theCUBE. (upbeat music)

(upbeat music) >> We're back. You're watching theCUBE's coverage of Red Hat Summit 2022 here in the Seaport in Boston. I'm Dave Vellante with my co-host, Paul Gillin. Justin Boitano is here. He's the Vice President of Enterprise and Edge Computing at NVIDIA. Maybe you've heard of him. And Tushar Katarki who's the Director of Product Management at Red Hat. Gentlemen, welcome to theCUBE, good to see you. >> Thank you. >> Great to be here, thanks >> Justin, you are a keynote this morning. You got interviewed and shared your thoughts on AI. You encourage people to got to think bigger on AI. I know it's kind of self-serving but why? Why should we think bigger? >> When you think of AI, I mean, it's a monumental change. It's going to affect every industry. And so when we think of AI, you step back, you're challenging companies to build intelligence and AI factories, and factories that can produce intelligence. And so it, you know, forces you to rethink how you build data centers, how you build applications. It's a very data centric process where you're bringing in, you know, an exponential amount of data. You have to label that data. You got to train a model. You got to test the model to make sure that it's accurate and delivers business value. Then you push it into production, it's going to generate more data, and you kind of work through that cycle over and over and over. So, you know, just as Red Hat talks about, you know, CI/CD of applications, we're talking about CI/CD of the AI model itself, right? So it becomes a continuous improvement of AI models in production which is a big, big business transformation. >> Yeah, Chris Wright was talking about basically take your typical application development, you know, pipeline, and life cycle, and apply that type of thinking to AI. I was saying those two worlds have to come together. Actually, you know, the application stack and the data stack including AI need to come together. What's the role of Red Hat? What's your sort of posture on AI? Where do you fit with OpenShift? >> Yeah, so we're really excited about AI. I mean, a lot of our customers obviously are looking to take that data and make meaning out of it using AI is definitely a big important tool. And OpenShift, and our approach to Open Hybrid Cloud really forms a successful platform to base all your AI journey on with the partners such as NVIDIA whom we are working very closely with. And so the idea really is as Justin was saying, you know, the end to end, when you think about life of a model, you've got data, you mine that data, you create models, you deploy it into production. That whole thing, what we call CI/CD, as he was saying DevOps, DevSecOps, and the hybrid cloud that Red Hat has been talking about, although with OpenShift as the center forms a good basis for that. >> So somebody said the other day, I'm going to ask you, is INVIDIA a hardware company or a software company? >> We are a company that people know for our hardware but, you know, predominantly now we're a software company. And that's what we were on stage talking about. I mean, ultimately, a lot of these customers know that they've got to embark on this journey to apply AI, to transform their business with it. It's such a big competitive advantage going into, you know, the next decade. And so the faster they get ahead of it, the more they're going to win, right? But some of them, they're just not really sure how to get going. And so a lot of this is we want to lower the barrier to entry. We built this program, we call it Launchpad to basically make it so they get instant access to the servers, the AI servers, with OpenShift, with the MLOps tooling, with example applications. And then we walk them through examples like how do you build a chatbot? How do you build a vision system for quality control? How do you build a price recommendation model? And they can do hands on labs and walk out of, you know, Launchpad with all the software they need, I'll say the blueprint for building their application. They've got a way to have the software and containers supported in production, and they know the blueprint for the infrastructure and operating that a scale with OpenShift. So more and more, you know, to come back to your question is we're focused on the software layers and making that easy to help, you know, either enterprises build their apps or work with our ecosystem and developers to buy, you know, solutions off the shelf. >> On the harbor side though, I mean, clearly NVIDIA has prospered on the backs of GPUs, as the engines of AI development. Is that how it's going to be for the foreseeable future? Will GPUs continue to be core to building and training AI models or do you see something more specific to AI workloads? >> Yeah, I mean, it's a good question. So I think for the next decade, well, plus, I mean not forever, we're going to always monetize hardware. It's a big, you know, market opportunity. I mean, Jensen talks about a $100 billion, you know, market opportunity for NVIDIA just on hardware. It's probably another a $100 billion opportunity on the software. So the reality is we're getting going on the software side, so it's still kind of early days, but that's, you know, a big area of growth for us in the future and we're making big investments in that area. On the hardware side, and in the data center, you know, the reality is since Moore's law has ended, acceleration is really the thing that's going to advance all data centers. So I think in the future, every server will have GPUs, every server will have DPUs, and we can talk a bit about what DPUs are. And so there's really kind of three primary processors that have to be there to form the foundation of the enterprise data center in the future. >> Did you bring up an interesting point about DPUs and MPUs, and sort of the variations of GPUs that are coming about? Do you see those different PU types continuing to proliferate? >> Oh, absolutely. I mean, we've done a bunch of work with Red Hat, and we've got a, I'll say a beta of OpenShift 4.10 that now supports DPUs as the, I'll call it the control plane like software defined networking offload in the data center. So it takes all the software defined networking off of CPUs. When everybody talks about, I'll call it software defined, you know, networking and core data centers, you can think of that as just a CPU tax up to this point. So what's nice is it's all moving over to DPU to, you know, offload and isolate it from the x86 cores. It increases security of data center. It improves the throughput of your data center. And so, yeah, DPUs, we see everybody copying that model. And, you know to give credit where credit is due, I think, you know, companies like AWS, you know, they bought Annapurna, they turned it into Nitro which is the foundation of their data centers. And everybody wants the, I'll call it democratized version of that to run their data centers. And so every financial institution and bank around the world sees the value of this technology, but running in their data centers. >> Hey, everybody needs a Nitro. I've written about it. It's Annapurna acquisition, 350 million. I mean, peanuts in the grand scheme of things. It's interesting, you said Moore's law is dead. You know, we have that conversation all the time. Pat Gelsinger promised that Moore's law is alive and well. But the interesting thing is when you look at the numbers, that's, you know, Moore's law, we all know it, doubling of the transistor densities every 18 to 24 months. Let's say that, that promise that he made is true. What I think the industry maybe doesn't appreciate, I'm sure you do, being in NVIDIA, when you combine what you were just saying, the CPU, the GPU, Paul, the MPU, accelerators, all the XPUs, you're talking about, I mean, look at Apple with the M1, I mean 6X in 15 months versus doubling every 18 to 24. The A15 is probably averaging over the last five years, a 110% performance improvement each year versus the historical Moore's law which is 40%. It's probably down to the low 30s now. So it's a completely different world that we're entering now. And the new applications are going to be developed on these capabilities. It's just not your general purpose market anymore. From an application development standpoint, what does that mean to the world? >> Yeah, I mean, yeah, it is a great point. I mean, from an application, I mean first of all, I mean, just talk about AI. I mean, they are all very compute intensive. They're data intensive. And I mean to move data focus so much in to compute and crunch those numbers. I mean, I'd say you need all the PUs that you mentioned in the world. And also there are other concerns that will augment that, right? Like we want to, you know, security is so important so we want to secure everything. Cryptography is going to take off to new levels, you know, that we are talking about, for example, in the case of DPUs, we are talking about, you know, can that be used to offload your encryption and firewalling, and so on and so forth. So I think there are a lot of opportunities even from an application point of view to take of this capacity. So I'd say we've never run out of the need for PUs if you will. >> So is OpenShift the layer that's going to simplify all that for the developer. >> That's right. You know, so one of the things that we worked with NVIDIA, and in fact was we developed this concept of an operator for GPUs, but you can use that pattern for any of the PUs. And so the idea really is that, how do you, yeah-- (all giggle) >> That's a new term. >> Yeah, it's a new term. (all giggle) >> XPUs. >> XPUs, yeah. And so that pattern becomes very easy for GPUs or any other such accelerators to be easily added as a capacity. And for the Kubernetes scaler to understand that there is that capacity so that an application which says that I want to run on a GPU then it becomes very easy for it to run on that GPU. And so that's the abstraction to your point about how we are making that happen. >> And to add to this. So the operator model, it's this, you know, open source model that does the orchestration. So Kubernetes will say, oh, there's a GPU in that node, let me run the operator, and it installs our entire run time. And our run time now, you know, it's got a MIG configuration utility. It's got the driver. It's got, you know, telemetry and metering of the actual GPU and the workload, you know, along with a bunch of other components, right? They get installed in that Kubernetes cluster. So instead of somebody trying to chase down all the little pieces and parts, it just happens automatically in seconds. We've extended the operator model to DPUs and networking cards as well, and we have all of those in the operator hub. So for somebody that's running OpenShift in their data centers, it's really simple to, you know, turn on Node Feature Discovery, you point to the operators. And when you see new accelerated nodes, the entire run time is automatically installed for you. So it really makes, you know, GPUs and our networking, our advanced networking capabilities really first class citizens in the data center. >> So you can kind of connect the dots and see how NVIDIA and the Red Hat partnership are sort of aiming at the enterprise. I mean, NVIDIA, obviously, they got the AI piece. I always thought maybe 25% of the compute cycles in the data center were wasted doing storage offloads or networking offload, security. I think Jensen says it's 30%, probably a better number than I have. But so now you're seeing a lot of new innovation in new hardware devices that are attacking that with alternative processors. And then my question is, what about the edge? Is that a blue field out at the edge? What does that look like to NVIDIA and where does OpenShift play? >> Yeah, so when we talk about the edge, we always going to start talking about like which edge are we talking about 'cause it's everything outside the core data center. I mean, some of the trends that we see with regard to the edges is, you know, when you get to the far edge, it's single nodes. You don't have the guards, gates, and guns protection of the data center. So you start having to worry about physical security of the hardware. So you can imagine there's really stringent requirements on protecting the intellectual property of the AI model itself. You spend millions of dollars to build it. If I push that out to an edge data center, how do I make sure that that's fully protected? And that's the area that we just announced a new processor that we call Hopper H100. It supports confidential computing so that you can basically ensure that model is always encrypted in system memory across the bus, of the PCI bus to the GPU, and it's run in a confidential way on the GPU. So you're protecting your data which is your model plus the data flowing through it, you know, in transit, wallet stored, and then in use. So that really adds to that edge security model. >> I wanted to ask you about the cloud, correct me if I'm wrong. But it seems to me that that AI workloads have been slower than most to make their way to the cloud. There are a lot of concerns about data transfer capacity and even cost. Do you see that? First of all, do you agree with that? And secondly, is that going to change in the short-term? >> Yeah, so I think there's different classes of problems. So we'll take, there's some companies where their data's generated in the cloud and we see a ton of, I'll say, adoption of AI by cloud service providers, right? Recommendation engines, translation engines, conversational AI services, that all the clouds are building. That's all, you know, our processors. There's also problems that enterprises have where now I'm trying to take some of these automation capabilities but I'm trying to create an intelligent factory where I want to, you know, merge kind of AI with the physical world. And that really has to run at the edge 'cause there's too much data being generated by cameras to bring that all the way back into the cloud. So, you know, I think we're seeing mass adoption in the cloud today. I think at the edge a lot of businesses are trying to understand how do I deploy that reliably and securely and scale it. So I do think, you know, there's different problems that are going to run in different places, and ultimately we want to help anybody apply AI where the business is generating the data. >> So obviously very memory intensive applications as well. We've seen you, NVIDIA, architecturally kind of move away from the traditional, you know, x86 approach, take better advantage of memories where obviously you have relationships with Arm. So you've got a very diverse set of capabilities. And then all these other components that come into use, to just be a kind of x86 centric world. And now it's all these other supporting components to support these new applications and it's... How should we think about the future? >> Yeah, I mean, it's very exciting for sure, right? Like, you know, the future, the data is out there at the edge, the data can be in the data center. And so we are trying to weave a hybrid cloud footprint that spans that. I mean, you heard Paul come here, talk about it. But, you know, we've talked about it for some time now. And so the paradigm really that is, that be it an application, and when I say application, it could be even an AI model as a service. It can think about that as an application. How does an application span that entire paradigm from the core to the edge and beyond is where the future is. And, of course, there's a lot of technical challenges, you know, for us to get there. And I think partnerships like this are going to help us and our customers to get there. So the world is very exciting. You know, I'm very bullish on how this will play out, right? >> Justin, we'll give you the last word, closing thoughts. >> Well, you know, I think a lot of this is like I said, it's how do we reduce the complexity for enterprises to get started which is why Launchpad is so fundamental. It gives, you know, access to the entire stack instantly with like hands on curated labs for both IT and data scientists. So they can, again, walk out with the blueprints they need to set this up and, you know, start on a successful AI journey. >> Just a position, is Launchpad more of a Sandbox, more of a school, or more of an actual development environment. >> Yeah, think of it as it's, again, it's really for trial, like hands on labs to help people learn all the foundational skills they need to like build an AI practice and get it into production. And again, it's like, you don't need to go champion to your executive team that you need access to expensive infrastructure and, you know, and bring in Red Hat to set up OpenShift. Everything's there for you so you can instantly get started. Do kind of a pilot project and then use that to explain to your executive team everything that you need to then go do to get this into production and drive business value for the company. >> All right, great stuff, guys. Thanks so much for coming to theCUBE. >> Yeah, thanks. >> Thank you for having us. >> All right, thank you for watching. Keep it right there, Dave Vellante and Paul Gillin. We'll be back right after this short break at the Red Hat Summit 2022. (upbeat music)

>> Welcome back to the Seaport in Boston and this is theCUBE's coverage of Red Hat Summit 2022. I'm Dave Vellante with my co-host Paul Gillin. Rob Belson is here as the Developer Relations Lead at Verizon. Robbie great to see you. Thanks for coming on theCUBE. >> Thanks for having me. >> So Verizon and developer relations. Talk about your role there. Really interesting. >> Absolutely. If you think about our mobile edge computing portfolio in Verizon 5G Edge, suddenly the developer is a more important persona than ever for actually adopting the cloud itself and adopting the mobile edge. So the question then quickly became how do we go after developers and how do we tell stories that ultimately resonate with them? And so my role has been spearheading our developer relations and experience efforts, which is all about meeting developers in the channels where they actually are, building content that resonates with them. Building out architectures that showcase how do you actually use the technology in the wild? And then ultimately creating automation assets that make their lives easier in deploying to the mobile edge. >> So, you know, telcos get a bad rap, when you're thinking it's amazing what you guys do. You put out all this capital infrastructure, big outlays. You know, we use our phones to drop a call. People like, "Ah, freaking Verizon." But it's amazing what we can actually do too. You think about the pandemic, the shift that the telcos had to go through to landlines to support home, never missed a beat. And yet at the same time you're providing all this infrastructure for people to come over the top, the cost forbid is going down, right? Your cost are going up and yet now we're doing this big 5G buildup. So I feel like there's a renaissance about to occur in edge computing that the telcos are going to lead new forms of monetization new value that you're going to be able to add, new services, new applications. The future's got to be exciting for you guys and it's going to be developer-led, isn't it? >> Absolutely. I mean it's been such an exciting time to be a part of our mobile edge computing portfolio. If you think back to late 2019 we were really asking the question with the advent of high speed 5G mobile networks, how can you drive more immersive experiences from the cloud in a cloud native way without compromising on the tools you know and love? And that's ultimately what caused us to really work with the likes of AWS and others to think about what does a mobile edge computing portfolio look like? So we started with 5G Edge with AWS Wavelength. So taking the compute and storage services you know and love in AWS and bringing it to the edge of our 4G and 5G networks. But then we start to think, well, wait a minute. Why stop at public networks? Let's think about private networks. How can we bring the cloud and private networks together? So you turn back to late 2021 we announced Verizon 5G Edge with AWS Outposts but we didn't even stop there. We said, "Well, interest's cool, but what about network APIs? We've been talking about the ability and the programmability of the 5G network but what does that actually look like to the developers? And one great example is our Edge Discovery Service. So you think about the proliferation of the edge 17 Wavelength Zones today in the US. Well, what edge is the right edge? You think about maybe the airline industry if the closest exit might be behind you absolutely applies to service discovery. So we've built an API that helps answer that seemingly basic question but is the fundamental building block for everything to workload orchestration, workload distribution. A basic network building block has become so important to some of these new sources of revenue streams, as we mentioned, but also the ability to disintermediate that purpose built hardware. You think about the future of autonomous mobile robots either ground and aerial robotics. Well, you want to make those devices as cheap as possible but you don't want to compromise on performance. And that mobile edge layer is going to become so critical for that connectivity, but also the compute itself. >> So I just kind of gave my little narrative up front about telco, but that purpose built hardware that you're talking about is exceedingly reliable. I mean, it's hardened, it's fossilized and so now as you just disaggregate that and go to a more programmable infrastructure, how are you able to and what gives you confidence that you're going to be able to maintain that reliability that I joke about? Oh, but it's so reliable. The network has amazing reliability. How are you able to maintain that? Is that just the pace of technology is now caught up, I wonder if you can explain that? >> I think it's really cool as I see reliability and sort of geo distribution as inextricably linked. So in a world where to get that best in class latency you needed to go to one place and one place only. Well, now you're creating some form of single source of failure whether it's the power, whether it's the compute itself, whether it's the networking, but with a more geo distributed footprint, particularly in the mobile edge more choices for where to deliver that immersive experience you're naturally driving an increase in reliability. But again, infra alone it's not going to do the job. You need the network APIs. So it's the convergence of the cloud and network and infra and the automation behind it that's been incredibly powerful. And as a great example, the work we've been doing in hybrid MEC the ability to converge within one single architecture, the private network, the public network, the AWS Outposts, the AWS Wavelength all in one has been such a fantastic journey and Red Hat has been a really important part in that journey. >> From the perspective of the developer when they're building a full cloud to edge application, where does Verizon pick up? Where do they start working primarily with you versus with their cloud provider? >> Absolutely. And I think you touched on a really important point. I think when you often think about the edge it's thought of as an either, or. Is it the edge? Is it the cloud? Is it both? It's an and I can't emphasize that enough. What we've seen from the customers greenfield or otherwise it's about extending an application or services that were never intended to live at the edge, to the edge itself, to deliver a more performant experience. And for certain control plane operations, metadata, backend operations analytics that can absolutely stay in the cloud itself. And so our role is to be a trusted partner in some of our enterprise customers' journeys. Of course, they can lean on the cloud provider in select cases, but we're an absolutely critical mode of support as you think about what are those architectures? How do you integrate the network APIs? And through our developer relations efforts, we've put a major role in helping to shape what those patterns really look like in the wild. >> When they're developing for 5G I mean, the availability of 5G of particularly you know, the high bandwidth 5G is pretty spotty right now. Mostly urban areas. How should they be thinking in the future developing an application roll out two years from now about where 5G will be at that point? >> Absolutely. I think one of the most important things in this case is the interoperability of our edge computing portfolio with both 4G and 5G. Whenever somebody asks me about the performance of 5G they ask how fast? Or for edge computing. It's always about benchmark. It's not an absolute value. It's always about benchmarking the performance to that next best alternative. What were you going to get if you didn't have edge computing in your back pocket? And so along that line of thought having the option to go either through 4G or 5G, having a mobile edge computing portfolio that works for both modes of connectivity even CAN-AM IoT is incredibly powerful. >> So it sounds like 4G is going to be with us for quite a while still? >> And I think it's an important part of the architecture. >> Yeah. >> Robert, tell us about the developer that's building these applications. Where does that individual come from? What's their persona? >> Oh, boy I think there's a number of different personas and flavors. I've seen everything from the startup in the back of a garage working hard to try to figure out what could I do for a next generation media and entertainment experience but also large enterprises. And I think a great area where we saw this was our 5G Edge Computing Challenge that we hosted last year. Believe it or not 100 submissions from over 22 countries, all building on Verizon 5G Edge. It was so exciting to see because so many different use cases across public safety, healthcare, media and entertainment. And what we found was that education is so important. A lot of developers have great ideas but if you don't understand the fundamentals of the infrastructure you get bogged down in networking and setting up your environment. And that's why we think that developer education is so important. We want to make it easy and in fact, the 5G Edge portfolio was designed in such a way that we'll abstract the complexities of the network away so you can focus on building your application and that's such a central theme and focus for how we approach the development. >> So what kind of services are you exposing via APIs? >> Absolutely, so first and foremost, as you think about 5G Edge with say AWS Wavelength, the infra there are APIs that are exposed by AWS to launch your infra, to patch your infrastructure, to automate your infrastructure. Specifically that Verizon has developed that's our network APIs. And a great example is our Edge Discovery Service. So think of this as like a service registry you've launched an application in all 17 edge zones. You would take that information, you would send it via API to the Edge Discovery Service so that for any mobile client say, you wake up one morning in Boston, you can ask the API or query, "Hey, what's the closest edge zone?" DNS isn't going to be able to figure it out. You need knowledge of the actual topology of the mobile network itself. So the API will answer. Let's say you take a little road trip 1,000 miles south to say Miami, Florida you ask that question again. It could change. So that's the workflow and how you would use the network API today. >> How'd you get into this? You're an engineer it's obvious how'd you stumble into this role? >> Well, yeah, I have a background in networks and distributed systems so I always knew I wanted to stay in the cloud somewhere. And there was a really unique opportunity at Verizon as the portfolio was being developed to really think about what this developer community looked like. And we built this all from scratch. If you look at say our Verizon 5G Edge Blog we launched it just along the timing of the actual GA of Wavelength. You look at our developer newsletter also around the time of the launch of Wavelength. So we've done a lot in such a short period and it's all been sort of organic, interacting with developers, working backwards from the customer. And so it's been a fairly new, but incredibly exciting journey. >> How will your data, architecture, data flow what will that look like in the future? How will that be different than it is sort of historically? >> When I think about customer workloads real time data architecture is an incredibly difficult thing to do. When you overlay the edge, admittedly, it gets more complicated. More places that produce the data, more places that consume data. How do you reconcile all of these environments? Maintain consistency? This is absolutely something we've been working on with the ecosystem at large. We're not going to solve this alone. We've looked at architecture patterns that we think are successful. And some of the things that we found that we believe are pretty cool this idea of taking that embedded mobile database, virtualizing it to the edge, even making it multi-tenant. And then you're producing data to one single source and simplifying how you organize and share data because all of the data being produced to that one location will be relevant to that topology. So Boston, as an example, Boston data being produced to that edge zone will only service Boston clients. So having a geo distributed footprint really does help data architectures, but at the core of all of this database, architectures, you need a compute environment that actually makes sense. That's performant, that's reliable. That's easy to use that you understand how to manage and that the edge doesn't make it any more difficult to manage. >> So are you building that? >> That's exactly what we're doing. So here at Red Hat Summit we've had the unique opportunity to continue to collaborate with our partners at Red Hat to think about how you actually use OpenShift in the context of hybrid MEC. So what have done is we've used OpenShift as is to extend what already exists to some of these new edge zones without adding in an additional layer of complexity that was unmanageable. >> So you use OpenShift so you don't have to cobble this together on your own as a full development environment and that's the role really that OpenShift plays here? >> That's exactly right. And we presented pieces of this at our re:Invent this past year and what we basically did is we said the edge needs to be inextricably linked with the cloud. And you want to be able to manage it from some seamless central pane of glass and using that OpenShift console is a great way. So what we did is we wanted to show a really geo-distributed footprint in action. We started with a Wavelength zone in Boston, the region in Northern Virginia, an outpost in the Texas area. We cobbled it all together in one cluster. So you had a whole compute mesh separated by thousands of miles all within a single cluster, single pane of glass. We take that and are starting to expand on the complexity of these architectures to overlay the network APIs we mentioned, to overlay multi-region support. So when we say you can use all 17 zones at once you actually can. >> So you've been talking about Wavelength and Outposts which are AWS products, but Microsoft and Google both have their distributed architectures as well. Where do you stand with those? Will you support those? Are you working with them? >> That's a great question. We have made announcements with Microsoft and Google but today I focus a lot on the work we do with AWS Wavelength and Outposts and continuing to work backwards from the customer and ultimately meet their needs. >> Yeah I mean, you got to start with an environment that the developers know that obviously a great developer community, you know, you see it at re:Invent. What was the reaction at re:Invent when you showed this from a developer community? >> Absolutely. Developers are excited and I think the best part is we're not the only ones talking about Wavelength not even AWS are the only ones talking about Wavelength. And to me from a developer ecosystem perspective that's when you know it's working. When you're not the one telling the best stories when others are evangelizing the power of your technology on your behalf that's when the ecosystem's starting to pick up. >> Speaking of making a bet on Outposts you know, it's somewhat limited today. I'll say it it's limited today in terms of we think it supports RDS and there's a few storage players. Is it your expectation that Outposts is going to be this essentially the cloud environment on your premises is that? >> That's a great question. I see it more as we want to expand customer choice more than ever and ultimately let the developers and architects decide. That's why I'm so bullish on this idea of hybrid MEC. Let's provide all of the options the most complicated geo distributed hybrid deployment you can imagine and automate it, make it easy. That way if you want to take away components of this architecture all you're doing is simplifying something that's already automated and fairly simple to begin with. So start with the largest problem to solve and then provide customers choice for what exactly meets their requirements their SLAs, their footprint, their network and work backwards from the customer. >> Exciting times ahead. Rob, thanks so much for coming on theCUBE. It's great to have you. >> Appreciate it, thanks for your time. >> Good luck. All right, thank you for watching. Keep it right there. This is Dave Vellante for Paul Gillin. We're live at Red Hat Summit 2022 from the Seaport in Boston. We'll be right back.

(gentle music) >> We're back at the Seaport in Boston. I'm Dave Vellante with my co-host, Paul Gillin. Tracie Zenti is here. She's the Director of Global Partner Management at Microsoft, and Tom Anderson is the Vice President of Ansible at Red Hat. Guys, welcome to theCube. >> Hi, thank you. >> Yep. >> Ansible on Azure, we're going to talk about that. Why do I need Ansible? Why do I need that kind of automation in Azure? What's the problem you're solving there? >> Yeah, so automation itself is connecting customers' infrastructure to their end resources, so whether that infrastructure's in the cloud, whether it's in the data center, or whether it's at the edge. Ansible is the common automation platform that allows customers to reuse automation across all of those platforms. >> And so, Tracie, I mean, Microsoft does everything. Why do you need Red Hat to do Ansible? >> We want that automation, right? We want our customers to have that ease of use so they can be innovative and bring their workloads to Azure. So that's exactly why we want Ansible. >> Yeah, so kind of loaded questions here, right, as we were sort of talking offline. The nature of partnerships is changing. It's about co-creating, adding value together, getting those effects of momentum, but maybe talk about how the relationship started and how it's evolving and I'd love to have your perspective on the evolving nature of ecosystems. >> Yeah, I think the partnership with Red Hat has been strong for a number of years. I think my predecessor was in the role for five years. There was a person in there for a couple years before that. So I think seven or eight years, we've been working together and co-engineering. Red Hat enterprised Linux. It's co-engineered. Ansible was co-engineered. We work together, right? So we want it to run perfectly on our platform. We want it to be a good customer experience. I think the evolution that we're seeing is in how customers buy, right? They want us to be one company, right? They want it to be easy. They want be able to buy their software where they run it on the cloud. They don't want to have to call Red Hat to buy and then call us to buy and then deploy. And we can do all that now with Ansible's the first one we're doing this together and we'll grow that on our marketplace so that it's easy to buy, easy to deploy, easy to keep track of. >> This is not just Ansible in the marketplace. This is actually a fully managed service. >> That's right. >> What is the value you've added on top of that? >> So it runs in the customer account, but it acts kind of like SaaS. So Red Hat gets to manage it, right? And it's in their own tenant. So they get in the customer's own tenant, right? So with a service principle, Red Hat's able to do that management. Tom, do you want to add anything to that? >> Yeah, the customers don't have to worry about managing Ansible. They just worry about using Ansible to automate their infrastructure. So it's a kind of a win-win situation for us and for our customers. We manage the infrastructure for them and the customer's resources themselves and they get to just focus on automating their business. >> Now, if they want to do cross-cloud automation or automation to their hybrid cloud, will you support that as well? >> 100%. >> Absolutely. >> Yeah. >> We're totally fine with that, right? I mean, it's unrealistic to think customers run everything in one place. That isn't enterprise. That's not reality. So yeah, I'm fine with that. >> Well, that's not every cloud provider. >> No (laughing) that's true. >> You guys over here, at Amazon, you can't even say multicloud or you'll get thrown off the stage. >> Of course we'd love it to all run on Azure, but we want our customers to be happy and have choice, yeah. >> You guys have all, I mean, you've been around a long time. So you had a huge on-prem state, brought that to the cloud, and Azure Stack, I mean, it's been around forever and it's evolved. So you've always believed in, whatever you call it, Hybrid IT, and of course, you guys, that's your call of mission. >> Yeah, exactly. >> So how do you each see hybrid? Where's the points of agreement? It sounds like there's more overlap than gaps, but maybe you could talk about your perspective. >> Yeah, I don't think there are any points of disagreement. I think for us, it's meeting our customers where their center of gravity is, where they see their center of management gravity. If it's on Azure, great. If it's on their data center, that's okay, too. So they can manage to or from. So if Azure is their center of gravity, they can use automation, Ansible automation, to manage all the things on Azure, things on other cloud providers, things in their data center, all the way out to their edge. So they have the choice of what makes the most sense to them. >> And Azure Arc is obviously, that's how Azure Stack is evolving, right? >> Yeah, and we have Azure Arc integration with Ansible. >> Yeah. >> So yeah, absolutely. And I mean, we also have Rell on our marketplace, right? So you can buy the basement and you could buy the roof and everything in between. So we're growing the estate on marketplace as well to all the other products that we have in common. So absolutely. >> How much of an opportunity, just go if we go inside? Give us a little peak inside Microsoft. How much of an opportunity does Microsoft think about multi-cloud specifically? I'm not crazy about the term multicloud, 'cause to me, multicloud, runs an Azure, runs an AWS, runs on Google, maybe runs somewhere else. But multicloud meaning that common experience, your version of hybrid, if you will. How serious is Microsoft about that as a business opportunity? A lot of people would say, well, Microsoft really doesn't want. They want everything in their cloud. But I'd love to hear from you if that is good. >> Well, we have Azure Red Hat OpenShift, which is a Microsoft branded version of OpenShift. We have Ansible now on our marketplace. We also, of course, we have AKS. So I mean, container strategy runs anywhere. But we also obviously have services that enhance all these things. So I think, our marketplace is a third party marketplace. It is designed to let customers buy and run easily on Azure and we'd want to make that experience good. So I don't know that it's... I can't speak to our strategy on multicloud, but what I can speak to is when businesses need to do innovation, we want it to be easy to do that, right? We want it to be easy to buy, defined, buy, deploy, manage, and that's what we're trying to accomplish. >> Fair to say, you're not trying to stop it. >> No, yeah, yeah. >> Whether or not it evolves into something that you heavily lean into or see. >> When we were talking before the cameras turned on, you said that you think marketplaces are the future. Why do you say that? And how will marketplaces be differentiated from each other in the future? >> Well, our marketplace is really, first of all, I think, as you said off camera, they're now. You can buy now, right? There's nothing that stops you. But to me, it's an extension of consumerization of IT. I've been in IT and manageability for about 23 years and full automation is what we and IT used to always talk about, that single pane of glass. How do you keep track of everything? How do you make it easy? How do you support? And IT is always eeking out that last little bit of funding to do innovation, right? So what we can do with consumerization of IT is make it easier to innovate. Make it cheaper to innovate, right? So I think marketplaces do that, right? They've got gold images you can deploy. You're also able to deploy custom images. So I think the future is as particularly with ours, like we support, I don't remember the exact number, but over a hundred countries of tax calculation. We've got like 17 currencies. So as we progress and customers can run from anywhere in the world and buy from anywhere in the world and make it simple to do those things that used to take maybe two months to spin up services for innovation and Ansible helps with that, that's going to help enterprises innovate faster. And I think that's what marketplaces are really going to bring to the forefront is that innovation. >> Tom, why did Ansible, I'm going to say one, I mean, you're never done. But it was unclear a few years ago, which automation platform was going to win in the marketplace and clearly, Ansible has taken a leading position. Why? What were the factors that led to that? >> Honestly, it was the strength of the community, right? And Red Hat leaning into that community to support that community. When you look out at the upstream community for Ansible and the number of participants, active participants that are contributing to the community just increases its value to everybody. So the number of integrations, the number of things that you can automate with Ansible is in the thousands and thousands, and that's not because a group of Red Hat engineers wrote it. That's because our community partners, like Microsoft wrote the user integrations for Ansible. F5 does theirs. Customers take those and expand on them. So the number of use cases that we can address through the community and through our partners is immense. >> But that doesn't just happen. I mean, what have you done to cultivate that community? >> Well, it's in Red Hat's DNA, right? To be the catalyst in a community, to bring partners and users together, to share their knowledge and their expertise and their skills, and to make the code open. So anybody can go grab Ansible from upstream and start doing stuff with it, if they want. If they want to mature on it and management for it and support all the other things that Red Hat provides, then they come to us for a subscription. So it's really been about sort of catalyzing and supporting that community, and Red Hat is a good steward of these upstream communities. >> Is Azure putting Ansible to use actually within your own platform as opposed to being a managed service? Are you adopting Ansible for automation of the Azure Platform? >> I'll let you answer that. >> So two years ago, Microsoft presented at AnsibleFest, our fall conference, Budd Warrack, I'm butchering his last name, but he came on and told how the networking team at Microsoft supports about 35,000 access points across hundreds of buildings, all the Microsoft campuses using Ansible to do that. Fantastic story if you want to go on YouTube and look up that use case. So Microsoft is an avid user of the Ansible technology in their environment. >> Azure is kind of this really, I mean, incredible strategic platform for Microsoft. I wonder if you could talk about Azure as a honeypot for partners. I mean, it seems, I mean, the momentum is unbelievable. I mean, I pay attention to their earnings calls every quarter of Azure growth, even though I don't know what the exact number is, 'cause they won't give it to me but they give me the growth rates and it's actually accelerating. >> No lie. (Tracie laughing) >> I've got my number. It's in the tens of billions. I mean, I'm north of 35 billion, but growing at the high 30%. I mean, it's remarkable. So talk about the importance of that to the ecosystem as a honey pot. >> Paul Satia said it right. Many times partners are essential to our strategy. But if you think about it, software solves problems. We have software that solves problems. They have software that solves problems, right? So when IT and customers are thinking of solving a problem, they're thinking software, right? And we want that software to run on Azure. So partners have to be essential to our strategy. Absolutely. It's again, we're one team to the customer. They want to see that as working together seamlessly. They don't want it to be hardware Azure plus software. So that's absolutely critical to our success. >> And if I could add for us, the partners are super important. So some of our launch partners are like F5 and CyberArk who have certified Ansible content for Ansible on Azure. We have service provider partners like Accenture and Kindra that are launching with us and providing our joint customers with help to get up to speed. So it really is a partner play. >> Absolutely. >> Where are you guys taking this? Where do you want to see it go? What are some of the things that observers should pay attention to as marketers of success and evolution? >> Well, certainly for us, it's obviously customer adoption, but it is providing them with patterns. So out of the box patterns that makes it easy for them to get up and running and solve the use cases and problems that they run into most frequently. Problems ain't the right word. Challenges or opportunities on Azure to be able to automate the things. So we're really leaning into the different use cases, whether it's edge, whether it's cloud, whether it's cloud to edge, all of those things. We want to provide users with out of the box Ansible content that allows 'em to just get up and automating super fast, and doing that on Azure makes it way easier for us because we don't have to focus on the install and the setting up and configuring it. It's all just part of the experience >> And Tracie, for Microsoft, it's world domination with a smile. (all laughing) >> Of course. No, of course not. No, I think it's to continue to grow the co-engineering we do across all of the Red Hat products. I can't even tell you the number of things we work on together, but to look forward strategically at what opportunities we have across our products and theirs to integrate like Arc and Ansible, and then making it all easy to buy, making it available so that customers have choice and they can buy how they want to and simplify. So we're just going to continue to do that and we're at that infancy right now and as we grow, it'll just get easier and easier with more and more products. >> Well, bringing the edge into the equation is going to be really interesting. Microsoft with its gaming, vector is amazing, and recent, awesome acquisitions. All the gamers are excited about that and that's a huge edge play. >> You'll have to bring my son on for that interview. >> Yeah. >> My son will interview. >> He knows more than all of us, I'm sure. What about Ansible? What's ahead for Ansible? >> Edge, so part of the Red Hat play at the Edge. We've getting a lot of customer pull for both industrial Edge use cases in the energy sector. We've had a joint customer with Azure that has a combined Edge platform. Certainly, the cloud stuff that we're announcing today is a huge growth area. And then just general enterprise automation. There's lots of room to run there for Ansible. >> And lots of industries, right? >> Yeah. >> Telco, manufacturing. >> Retail. >> Retail. >> Yeah. >> Yeah. There's so many places to go, yeah, that need the help. >> The market's just, how you going to count it anymore? It's just enormous. >> Yeah. >> It's the entire GDP the world. But guys, thanks for coming to theCUBE. >> Yeah. >> Great story. Congratulations on the partnership and the announcements and look forward to speaking with you in the future. >> Yeah, thanks for having us. >> Thanks for having us. >> You're very welcome. And keep it right there. This is Dave Vellante for Paul Gillin. This is theCUBE's coverage of Red Hat Summit 2022. We'll be right back at Seaport in Boston. (gentle music)

>> We're back at the Seaport in Boston. Dave Vellante and Paul Gill. You're watching The Cubes coverage of Red Hat Summit, 2022. A little different this year, a smaller venue. Maybe a thousand people. Love the keynotes, compressed. Big virtual audience. So we're happy to be coming to you live, face to face. It's been a while since we've had these, for a lot of folks, this is their first in person event. You know, it's kind of weird getting used to that, but I think in the next few months, it's going to become the new, sort of quasi abnormal. Francis Chow is here. He's the Vice President and GM of In-Vehicle OS and Edge at Red Hat. Francis, welcome. That's the most interesting title we've had all week. So thanks for coming here. >> Thank you, Dave. Thank you, Paul, for having me here. >> So The Edge, I mean The Edge is, we heard about the International Space Station. We heard about ski boots, of course In-Vehicle. What's the Edge to you? >> Well, to me Edge actually could mean many different things, right? The way we look at Edge is, there is the traditional enterprise Edge, where this is the second tier, third tier data centers that this extension from your core, the network and your centralized data center, right to remote locations. And then there are like Telco Edge, right? where we know about the 5G network, right Where you deploy bay stations and which would have a different size of requirements right. Of traditional enterprise edge networks. And then there are Operational Edge where we see the line of business operating on those locations, right? Things like manufacturing for oil rigs, retail store, right? So very wide variety of Edge that are doing OT type of technology, and then last but not least there is the customer on or kind of device edge where we now putting things into things like cars, as you said, like ski booth, and have that interaction with the end consumers. >> Is this why? I mean, there's a lot of excitement at Red. I could tell among the Red hat people about this GM deal here is this why that's so exciting to them? This really encompasses sort of all of those variants of the edge in automotive, in automobile experience. Doesn't it? >> I think why this is exciting to the industry and also to us is that if you look at traditionally how automotive has designed, right the way the architect vehicle today has many subsystems, they are all purpose viewed, very tight cut, coupled with hardware and software. And it's very difficult to reuse, right? So their cause of development is high. The time to develop is long and adding to that there is a lengthy safety certification process which also kind of make it hard. Because every time you make a change in the system you have to re-certify it again. >> Right. >> And typically it takes about six to 12 months to do so. Every time you make a change. So very lengthy passes, which is important because we want to ensure occupants are safe in a vehicle. Now what we bring to the table, which I think is super exciting is we bring this platform approach. Now you can use a consistent platform that is open and you can actually now run multiple doming applications on the same platform which means automakers can reuse components across model years and brands. That will lower the development cost. Now I think one of the key things that we bring to the table is that we introduce a new safety certification approach called Continuous Safety Certification. We actually announced that in our summit last year with the intent, "Hey, we're going to deliver this functional certified Linux platform" Which is the first four Linux. And the way we do it is we work with our partner Excedr to try to define that approach. And at the high level the idea really is to automate that certification process just like how we automate software development. Right, we are adding that monitoring capabilities with functional safety related artifacts in our CI three pipeline. And we are able to aim to cut back that kind of certification time to a fraction of what is needed today. So what we can do, I think with this collaboration with GM, is help them get faster time to market, and then lower development costs. Now, adding to that, if you think about a modern Linux platform, you can update it over the air, right? This is the capability that we are working with GM as well. Now what customers can expect now, right for future vehicle is there will be updates on apps and services, just like your cell phone, right. Which makes your car more capable over time and more relevant for the long term. >> So there's some assumptions you're making at the edge. First of all, you described a spectrum retail store which you know, to me, okay, it's Edge, but you can take an X-86 box or a hyper converged infrastructure throw it in there. And there's some opportunities to do some stuff in real time, but it's kind of an extension natural extension of IT. Whereas in vehicle you got to make some assumptions spotty connectivity to do software download and you can't do truck rolls at the far edge, right? None of that is okay, and so there's some assumptions there and as you say, your role is to compress the time to market, but also deliver a better consumer >> Absolutely. >> Experience, so what can we expect? You started to talk about the future of in vehicle, you know, or EVs, if you will, what should we expect as consumers? You, you're saying over the year software we're seeing that with some of the EV makers, for sure. But what's the future look like? >> I think what consumers can expect is really over a period of time, right? A similar experience, like what you have with your mobile mobile device, right? If you look back 15, 20 years, right? You buy a phone, right? That's the feature that you have with your phone, right? No update, it is what it is right, for the lifetime of the product which is pretty much what you have now, if you buy a vehicle, right. You have those features capabilities and you allow it for the lifetime of the vehicle. >> Sometimes you have to drive in for a maintenance, a service to get a software update. >> We can talk about that too right. But as we make the systems, update-able right you can now expect more frequent and seamless update of both the operating system and the application services that sit on top of that. Right, so I think right in the future consumers can expect more capable vehicles after you purchase it because new developmental software can now be done with an update over the air. >> I assume this relationship with GM is not exclusive. Are you talking with other automakers as well? >> We are talking to auto makers, other auto makers. What we working with GM is really a product that could work for the industry, right? This is actually what we both believe in is the right thing to do right? As we are able to standardize how we approach the infrastructure. I think this is a good thing for the whole industry to help accelerate innovation for the entire industry. >> Well which is sort of natural next question. Are we heading toward an open automotive platform? Like we have an open banking platform in that industry. Do you see the possibility that there could be a single platform that all or most of the auto makers will work on? >> I wouldn't use the word single, but I definitely would use the word open. Right? Our goal is to build this open platform, right. Because we believe in open source, right. We believe in community, right. If we make it open, we have more contributors to come in and help to make the system better in a way faster. And actually like you said, right. Improve the quality, right, better. Right, so that the chance of recall is now lower with, with this approach. >> You're using validated patterns as part of this initiative. Is that right? And what is a validated pattern? How is it different from a reference architecture? Is it just kind of a new name for reference architecture? or what value does it bring to the relation? >> For automotive right, we don't have a validated pattern yet but they can broadly kind of speak about what that is. >> Yeah. >> And how we see that evolve over time. So validated pattern basically is a combination of Red Hat products, multiple Red Hat products and partner products. And we usually build it for specific use case. And then we put those components together run rigorous tests to validate it that's it going to work, so that it becomes more repeatable and deployable for those particular edge use cases. Now we do work with our partners to make it happen, right. Because in the end, right we want to make a solution that is about 80% of the way and allow our partners to kind of add more value and their secret sauce on top and deploy it. Right, and I'll give you kind of one example, right You just have the interview with the Veterans Affairs team, right. One of our patents, right? The Medical Diagnosis Pattern, right. Actually we work with them in the early development stage of that. Right, what it does is to help make assessments on pneumonia with chest X rates, right. So it's a fully automated data pipeline. We get the chest x-ray from an object store use AIML to diagnose whether there's new pneumonia. And then I'll put that in a dashboard automated with the validated pattern. >> So you're not using them today, but can we expect that in the future? It sounds like >> Yes absolutely it's in the works, yes. >> It would be a perfect vertical. >> How do you believe your work with GM? I mean, has implications across Red hat? It seems like there are things you're going to be doing with GM that could affect other parts of your own product portfolio. >> Oh, absolutely. I think this actually is, it's a pivotal moment for Red Hat and the automotive industry. And I think broadly speaking for any safety conscious industry, right. As we create this Proof-point right that we can build a Linux system that is optimized for footprint performance, realtime capabilities, and be able to certify it for safety. Right I think all the adjacent industry, right. You think about transportation, healthcare, right. Industry that have tight safety requirements. It's just opened up the aperture for us to adjust those markets in the future. >> So we talked about a lot about the consumerization of IT over the last decade. Many of us feel as though that what's going on at the Edge, the innovations that are going on at the Edge realtime AI inferencing, you know, streaming data ARM, the innovations that ARM and others are performing certainly in video until we heard today, this notion of, you know, no touch, zero touch provisioning that a lot of these innovations are actually going to find their way into the enterprise. Kind of a follow on fault of what you were just talking about. And there's probably some future disruptions coming. You can almost guarantee that, I mean, 15 years or so we get that kind of disruption. How are you thinking about that? >> Well, I think you company, right. Some of the Edge innovation, right. You're going to kind of bring back to enterprise over time. Right but the one thing that you talk about zero touch provisioning right. Is critical right? You think about edge deployments. You're going to have to deal with a very diverse set of environments on how deployments are happen. Right think about like tail code based stations, right. You have somewhere between 75,000 to 100,000 base stations in the US for each provider right. How do you deploy it? Right, if you let's say you push one update or you want the provision system. So what we bring to the table in the latest open shift release is that, hey we make provisioning zero touch right, meaning you can actually do that without any menu intervention. >> Yeah, so I think the Edge is going to raise the bar for the enterprise, I guess is my premise there. >> Absolutely. >> So Francis, thanks so much for coming on The Cube. It's great to see you and congratulations on the collaboration. It's a exciting area for you guys. >> Thank you again, Dave and Paul. >> Our pleasure, all right keep it right there. After this quick break, we'll be back. Paul Gill and Dave Vellante you're watching The Cubes coverage Red Hat Summit 2022 live from the Boston Seaport. Be right back.

(pulsing music) (digital music) >> Welcome back to the Seaport in Boston. You're watching theCUBE's coverage of Red Hat Summit 2022. A lot of bummed out Bruins fans, but a lot of happy Celtics fans. We're optimistic for tonight, Boston's crazy sports town, but we're talking tech, we're talking open source. Dr. Amanda Purnell is here. She's the director of data and analytics innovation at the US Department of Veteran Affairs, and Ben Cushing is the chief architect for federal health and life sciences at Red Hat. Folks, welcome to theCUBE, thank for coming on. >> Thank you for having us. >> So glad to be here. >> So we heard your keynote this morning, project Arches. Now you were telling us just briefly about your previous life as a clinician. >> That's right. >> That's really interesting, because you know what the outcome has to be. So talk about that project in your perspective. What the goals were and how you actually got it done. >> I could tell the long view. I'm a psychologist by training. I spent the first 10 years of my VA career providing care to veterans. So engaging in healthcare behavior change, providing training to providers and really trying to understand what is the care pathway for veterans, what's the experience of veterans along each of those touchpoints, and it became clear to me over time that there were opportunities for us to improve the transitions of care and provide better information at the right time to improve those decisions that are being made at the point of care. Ben and I were just talking before we began today, part of the core of the development of Arches was beginning with human-centered design. We wanted to interview and better understand what was the experience across the VA of many different stakeholders and trying to access meaningful information, understand in that moment what do I need to make a decision with a veteran or what do I need to make a decision with my care team and how can I improve the quality of care for veterans? And so, hundreds of interviews later, it became clear to us that we wanted to help those individuals already working for the VA to continue to improve excellence of care and one of those ways that we're trying to do that is using technology to make life easier for our veterans and for our clinicians. >> I always like to say, they say, "Follow the money." I like to follow the data. And you said something in your keynote about nurses have to have access to information and it just gets to an architectural question, because as a caregiver, you have to get insights and data and you need it fast, 'cause you're saving lives, but a lot of times, architectures are very centralized. They're monolithic and you have to beg, borrow, steal, break through blockers to get to the data that you need. How do you square that circle in today's world? Maybe you could talk about that, and then specific to Arches, how you dealt with that. >> I can dive into that a little bit. I have to say, Amanda had touched on this during the keynote, VA was one of the first, if not the first, healthcare organizations in the world to actually adopt electronic health records and because of that, they just have this incredibly rich amount of historical data and the challenge, as you pointed out, is gaining access to it. So there are a number of programs within VA designed specifically for that. And they are bringing data not just from the data warehouses, but also data from the electronic health records that are running inside of VA right now, and then also third party community data sets, as well as applications that run inside the VA. Now the value here really happens when you produce insights. Data by itself is useless. >> Lot of data out there. They're plentiful. >> You need to create knowledge and then you need that knowledge to inform your process that comes next. Those actions are really what matters. All of healthcare is process and activity and data is really just a historical record. I mean, all data that we look at is happening in the past and then as we're reading it, we're producing knowledge, again, to inform our process. Arches, the program itself, is right in that space at the knowledge layer of actually taking that data and turning it into actual insight and something that is usable and insightful for clinicians to affect the ability to deliver better care and also to actually improve their own working experience. A lot of the models that are getting built out are specifically designed to help their workflow, help them reach better outcomes for the veterans, but also for themselves, because if we can care for the providers, it'll certainly help them care for the patients even more so. >> So how does it work? I mean, from the provider's perspective, how was their life improved by Arches? >> That's a great question. We want to make it easier to access the information. So as Ben noted, the average person providing care in the field doesn't know how to code, doesn't know how to pull a unique request for an individual data point, and what we're trying to do with Arches is provide a user interface that allows for both a non-technical person and a very technical person to access information, and then what gets provisioned in front of a provider is something that is farther abstracted from the underlying data layer and more like here's a specific insight. So I use the example in my keynote of chronic kidney disease. So what's provisioned to the provider in that moment is this person is at higher risk for chronic kidney disease based on this basic information. So it's surfacing just the right amount of information to allow for that care pathway to be improved, but the physician doesn't need to see all of the layers of code underneath. They need to trust that it's worthwhile, but they don't need to know all the background abstractions. >> So it's a self-service, essentially, infrastructure in that sense. You're hiding the underlying complexities. You gave an example in your keynote of an individual who realized that they were under counting the probability of a potential disease for African Americans. >> Yes. >> I believe she just rewrote the algorithm. >> She did. >> Describe that process, because in a lot of organizations, injecting that new algorithm may have required new data sources, would take an act of the Pope to do. How did it work in Arches? >> This is what I get excited about with Arches is that we have the opportunity to empower enthusiastic people like Dr. Joshi to discover an insight and she's a talented informaticist, so she could do the technical work and provision a container for her to work in, for her to do the data analysis, the underground stuff that we're not letting the average provider have to cope with. We were able to provision the tools that she need, the environment that she needed to be able to test and develop the new insight, confirm that they're there and then begin to validate that and test it in other facilities. So our thinking is, how do we bring the resources to the users rather than saying to the users, "This is what's available. Good luck." (chuckles) >> So we've been talking a lot about, I'm sorry, go ahead. >> I want to add on to that. What we're actually experiencing inside of healthcare right now is the emergence of of learning health systems. >> Yes. >> And this is a great example of that. The terrifying number is, it takes 17 years for new knowledge that gets created with healthcare research, whether it's NIH or VA or elsewhere, it takes 17 years for those practices to make their way into practice. Generally the way that happens is through the education of new staff. And so the dissemination of that knowledge is just so freaking slow that we cannot move nimbly enough to take on that new knowledge and actually implement it in clinical space. What Amanda's describing is something that now happens in months. New knowledge getting produced and then actually getting disseminated out, both the insights, whether they are those probabilities, predictions and recommendations and the actual processes, which are getting automated, as well. So if you think about healthcare as just a process, you can automate a whole lot of that and we can move that needle really fast and actually take that 70-year number down to a couple months. >> In the early days when we were all talking about AI and getting excited about digital, I would often ask the question, will machines be able to make better diagnoses than doctors and to your point, Ben, that's not the right question. >> Exactly. >> It isn't the right question. >> The question is, how can machines compress the time to better patient outcomes- >> Yes. >> in concert with humans and that's what we're seeing now. >> That's right, it's surfacing those insights to start a conversation. >> We've been talking a lot about artificial intelligence for the last two days. As clinician or someone with a clinical background, how do you see the clinical experience changing as machines grow more intelligent? >> I think that there's a learning curve for people to feel confident in an artificial intelligence. It makes sense. So someone spent decades, perhaps, of their life obtaining medical training, doing fellowships, doing additional training that they have trust in that deep training. There are times, however, where a technology is able to surface something that we didn't know that we didn't know and it's important, as we make use of artificial intelligence, that we clearly validate it with independent means and that we clearly also bring in additional analysis to understand what are the elements and then test that new technology in an environment before we scale it widely, so that clinicians can see, yes, this was useful. If it wasn't useful, how can we make it even better? So it goes back to what we were talking about earlier that we have to bring in human-centered design to figuring out how do we make use of AI or machine learning models and make sure that there's trust in those models and that we can clearly articulate value for the clinicians and care teams on the ground. >> Is that a natural evolution of Arches? >> This is all built around it. Arches is the technology platform, but there's no magical technology that's going to change how humans interact. And so the way we think about each project is we think about what are the technological components and what are the human factors components? And we have to think about the entire care pathway. I'll go back to that example, the chronic kidney disease. She identified that we were under identifying African Americans for chronic kidney disease. So she changed the algorithm. Not only did she change the algorithm, we also had to think about who would be informed of those changes, how would that change, who would be connected to the veteran in that point of care and build out the care pathway in the care team and that's really how you actually influence an outcome. Surfacing an insight is important, but it's one part of a much larger picture. >> So what is Arches? You said it's a technology platform built on open source. At least, there's a lot of open source in there. And it's got API connectors to all the legacy technologies that you need it to. Can you describe, paint a picture of what it actually is? >> Arches is evolving as it should. So it's designed to meet the unique needs that aren't being met by other infrastructure in the VA. So we started first by identifying the need for cloud compute, so it's in the cloud, it has open source technology so that we're not stuck with any one provider and also has the ability to use containers to be able to move insights out of Arches to an enterprise solution. We're also bringing in multi-cloud strategy, which also something had been discussed quite a bit at this conference, to make sure that we're not saying only one cloud provider can be the solution for veterans' needs. Our mission is serving veterans and so we want to have access to all the technology and not just one and so we're looking at how do we expand the scope to make sure that we have the most variety possible so we can meet the needs of veterans. >> I can add a little bit to it, as well. Think of Arches as a program. It's an incubation space under the office of innovation. So it's a place where the governance allows for trying new ideas and really pushing the envelope for VA in general. There's not a lot of organizations, if any at VA, that allow for that type of incubation and so Arches is in a unique position to create new technologies and new novel approaches to solving big problems. And then the next step to that is moving the work from Arches out into the enterprise, as you called it out. So for instance, the system of engagement where the actual clinicians interact with patients, the model needs to find its way there and we can't do that in a way that disturbs the current workflow that the clinicians have. We need to be able to bring the model to where the clinician is, have those recommendations, probabilities and predictions surfaced to the clinician in a way that is precise to their existing workflow. They need it at the time they need it. Arches itself is not delivering that part of it. It's more like the place where the innovation happens and the incubation really occurs and then it's about taking this container, really, and moving out to other systems that are already deployed out to the hospitals, the edge, and in the cloud. >> And the federated governance occurs in Arches or elsewhere? >> It happens across the continuum. It's starting in Arches. the clinical validation that happens there is wickedly important, because the clinicians need to know that what they're working with is actually legit. And so when they know that the researchers and the clinicians who are involved in that incubation period have done their work, they can feel confident with the recommendations they're getting from the machine learning models that are getting deployed to one of them. >> So many questions, so little time. What's the business impact? How would you describe that? >> For me, it's an emotional impact. People have a sense of, "I have a place to develop a solution and I can get in there quick, and I can test out an idea. I could potentially partner with an external partner or if I have the talents and skills to do it myself." It's empowering all of those innovators who have great ideas to work together to test and develop and validate solutions, and they're not waiting years to get the idea off the ground. >> Amazing. >> Go ahead, bring it. >> Is Arches open source? >> Arches is a platform and it has open source component. So that the underlying infrastructure of technology is open source. >> Why was it important to you that this be built on an open source platform? >> It's important for us that we not marry ourself to any one technology and that we allow for, as much as possible, transparency and many different tools and the right tools for the right solution. So we didn't want to find ourselves connected to only one way of doing things. We want to have versatility to have the right tool for the right problem at the right time. >> I'm so sorry, we're out of time. This is so interesting and I really appreciate you here guys, coming on and sharing your insights for theCUBE audience. All right, keep it right there. This is Dave Vellante for Paul Gillin. We're in day two of Red Hat Summit 2022. You're watching theCUBE. (digital pulsing music) >> Due to the pandemic, the federal government declared a public health emergency, which created an urgency for healthcare coverage. >> One of the biggest-

(bright upbeat music) >> We're back at the Red Hat Summit at the Seaport in Boston, theCUBE's coverage. This is day two. Dave Vellante and Paul Gillin. Chris Wright is here, the chief technology officer at Red Hat. Chris, welcome back to theCUBE. Good to see you. >> Yeah, likewise. Thanks for having me. >> You're very welcome. So, you were saying today in your keynote. We got a lot of ground to cover here, Chris. You were saying that, you know, software, Andreessen's software is eating the world. Software ate the world, is what you said. And now we have to think about AI. AI is eating the world. What does that mean? What's the implication for customers and developers? >> Well, a lot of implications. I mean, to start with, just acknowledging that software isn't this future dream. It is the reality of how businesses run today. It's an important part of understanding what you need to invest in to make yourself successful, essentially, as a software company, where all companies are building technology to differentiate themselves. Take that, all that discipline, everything we've learned in that context, bring in AI. So, we have a whole new set of skills to learn, tools to create and discipline processes to build around delivering data-driven value into the company, just the way we've built software value into companies. >> I'm going to cut right to the chase because I would say data is eating software. Data and AI, to me, are like, you know, kissing cousins. So here's what I want to ask you as a technologist. So we have the application development stack, if you will. And it's separate from the data and analytics stack. All we talk about is injecting AI into applications, making them data-driven. You just used that term. But they're totally two totally separate stacks, organizationally and technically. Are those worlds coming together? Do they have to come together in order for the AI vision to be real? >> Absolutely, so, totally agree with you on the data piece. It's inextricably linked to AI and analytics and all of the, kind of, machine learning that goes on in creating intelligence for applications. The application connection to a machine learning model is fundamental. So, you got to think about not just the software developer or the data scientist, but also there's a line of business in there that's saying, "Here's the business outcomes I'm looking for." It's that trifecta that has to come together to make advancements and really make change in the business. So, you know, some of the folks we had on stage today were talking about exactly that. Which is, how do you bring together those three different roles? And there's technology that can help bridge gaps. So, we look at what we call intelligent applications. Embed intelligence into the application. That means you surface a machine learning model with APIs to make it accessible into applications, so that developers can query a machine learning model. You need to do that with some discipline and rigor around, you know, what does it mean to develop this thing and life cycle it and integrate it into this bigger picture. >> So the technology is capable of coming together. You know, Amanda Purnell is coming on next. >> Oh, great. >> 'Cause she was talking about, you know, getting, you know, insights in the hands of nurses and they're not coders. >> That's right. >> But they need data. But I feel like it's, well, I feel very strongly that it's an organizational challenge, more so. I think you're confirming. It's not really a technical challenge. I can insert a column into the application development stack and bring TensorFlow in or AI or data, whatever it is. It's not a technical issue. Is that fair? >> Well, there are some technical challenges. So, for example, data scientists. Kind of a scarce kind of skillset within any business. So, how do you scale data scientists into the developer population? Which will be a large population within an organization. So, there's tools that we can use to bring those worlds together. So, you know, it's not just TensorFlow but it's the entire workflow and platform of how you share the data, the data training models and then just deploying models into a runtime production environment. That looks similar to software development processes but it's slightly different. So, that's where a common platform can help bridge the gaps between that developer world and the data science world. >> Where is Red Hat's position in this evolving AI stack? I mean, you're not into developing tool sets like TensorFlow, right? >> Yeah, that's right. If you think about a lot of what we do, it's aggregate content together, bring a distribution of tools, giving flexibility to the user. Whether that's a developer, a system administrator, or a data scientist. So our role here is, one, make sure we work with our hardware partners to create accelerated environments for AI. So, that's sort of an enablement thing. The other is bring together those disparate tools into a workflow and give a platform that enables data scientists to choose which, is it PyTorch, is it TensorFlow? What's the best tool for you? And assemble that tool into your workflow and then proceed training, doing inference, and, you know, tuning and lather, rinse, repeat. >> So, to make your platform then, as receptive as possible, right? You're not trying to pick winners in what languages to work with or what frameworks? >> Yeah, that's right. I mean, picking winners is difficult. The world changes so rapidly. So we make big bets on key areas and certainly TensorFlow would be a great example. A lot of community attraction there. But our goal isn't to say that's the one tool that everybody should use. It's just one of the many tools in your toolbox. >> There are risks of not pursuing this, from an organization's perspective. A customer, they kind of get complacent and, you know, they could get disrupted, but there's also an industry risk. If the industry can't deliver this capability, what are the implications if the industry doesn't step up? I believe the industry will, just 'cause it always does. But what about customer complacency? We certainly saw that a lot with digital transformation and COVID sort of forced us to march to digital. What should we be thinking about of the implications of not leaning in? >> Well, I think that the disruption piece is key because there's always that spectrum of businesses. Some are more leaning in, invested in the future. Some are more laggards and kind of wait and see. Those leaning in tend to be separating themselves, wheat from the chaff. So, that's an important way to look at it. Also, if you think about it, many data science experiments fail within businesses. I think part of that is not having the rigor and discipline around connecting, not just the tools and data scientists together, but also looking at what business outcomes are you trying to drive? If you don't bring those things together then it sort of can be too academic and the business doesn't see the value. And so there's also the question of transparency. How do you understand why is a model predicting you should take a certain action or do a certain thing? As an industry, I think we need to focus on bringing tools together, bringing data together, and building better transparency into how models work. >> There's also a lot of activity around governance right now, AI governance. Particularly removing bias from ML models. Is that something that you are guiding your customers on? Or, how important do you feel this is at this point of AI's development? >> It's really important. I mean, the challenge is finding it and understanding, you know, we bring data that maybe already carrying a bias into a training process and building a model around that. How do you understand what the bias is in that model? There's a lot of open questions there and academic research to try to understand how you can ferret out, you know, essentially biased data and make it less biased or unbiased. Our role is really just bringing the toolset together so that you have the ability to do that as a business. So, we're not necessarily building the next machine learning algorithm or models or ways of building transparency into models, as much as building the platform and bringing the tools together that can give you that for your own organization. >> So, it brings up the question of architectures. I've been sort of a casual or even active observer of data architectures over the last, whatever, 15 years. They've been really centralized. Our data teams are highly specialized. You mentioned data scientists, but there's data engineers and there's data analysts and very hyper specialized roles that don't really scale that well. So there seems to be a move, talk about edge. We're going to talk about edge. The ultimate edge, which is space, very cool. But data is distributed by its very nature. We have this tendency to try to force it into this, you know, monolithic system. And I know that's a pejorative, but for good reason. So I feel like there's this push in organizations to enable scale, to decentralize data architectures. Okay, great. And put data in the hands of those business owners that you talked about earlier. The domain experts that have business context. Two things, two problems that brings up, is you need infrastructure that's self-service, in that instance. And you need, to your point, automated and computational governance. Those are real challenges. What do you see in terms of the trends to decentralize data architectures? Is it even feasible that everybody wants a single version of the truth, centralized data team, right? And they seem to be at odds. >> Yeah, well I think we're coming from a history informed by centralization. That's what we understand. That's what we kind of gravitate towards, but the reality, as you put it, the world's just distributed. So, what we can do is look at federation. So, it's not necessarily centralization but create connections between data sources which requires some policy and governance. Like, who gets access to what? And also think about those domain experts maybe being the primary source of surfacing a model that you don't necessarily have to know how it was trained or what the internals are. You're using it more to query it as a, you know, the domain expert produces this model, you're in a different part of the organization just leveraging some work that somebody else has done. Which is how we build software, reusable components in software. So, you know, I think building that mindset into data and the whole process of creating value from data is going to be a really critical part of how we roll forward. >> So, there are two things in your keynote. One, that I was kind of in awe of. You wanted to be an astronaut when you were a kid. You know, I mean, I watched the moon landing and I was like, "I'm never going up into space." So, I'm in awe of that. >> Oh, I got the space helmet picture and all that. >> That's awesome, really, you know, hat's off to you. The other one really pissed me off, which was that you're a better skier 'cause you got some device in your boot. >> Oh, it's amazing. >> And the reason it angered me is 'cause I feel like it's the mathematicians taking over baseball, you know. Now, you're saying, you're a better skier because of that. But those are two great edge examples and there's a billion of them, right? So, talk about your edge strategy. Kind of, your passion there, how you see that all evolving. >> Well, first of all, we see the edge as a fundamental part of the future of computing. So in that centralization, decentralization pendulum swing, we're definitely on the path towards distributed computing and that is edge and that's because of data. And also because of the compute capabilities that we have in hardware. Hardware gets more capable, lower power, can bring certain types of accelerators into the mix. And you really create this world where what's happening in a virtual context and what's happening in a physical context can come together through this distributed computing system. Our view is, that's hybrid. That's what we've been working on for years. Just the difference was maybe, originally it was focused on data center, cloud, multi-cloud and now we're just extending that view out to the edge and you need the same kind of consistency for development, for operations, in the edge that you do in that hybrid world. So that's really where we're placing our focus and then it gets into all the different use cases. And you know, really, that's the fun part. >> I'd like to shift gears a little bit 'cause another remarkable statistic you cited during your keynote was, it was a Forrester study that said 99% of all applications now have open source in them. What are the implications of that for those who are building applications? In terms of license compliance and more importantly, I think, confidence in the code that they're borrowing from open source projects. >> Well, I think, first and foremost, it says open source has won. We see that that was audited code bases which means there's mission critical code bases. We see that it's pervasive, it's absolutely everywhere. And that means developers are pulling dependencies into their applications based on all of the genius that's happening in open source communities. Which I think we should celebrate. Right after we're finished celebrating we got to look at what are the implications, right? And that shows up as, are there security vulnerabilities that become ubiquitous because we're using similar dependencies? What is your process for vetting code that you bring into your organization and push into production? You know that process for the code you author, what about your dependencies? And I think that's an important part of understanding and certainly there are some license implications. What are you required to do when you use that code? You've been given that code on a license from the open source community, are you compliant with that license? Some of those are reasonably well understood. Some of those are, you know, newer to the enterprise. So I think we have to look at this holistically and really help enterprises build safe application code that goes into production and runs their business. >> We saw Intel up in the keynotes today. We heard from Nvidia, both companies are coming on. We know you've done a lot of work with ARM over the years. I think Graviton was one of the announcements this week. So, love to see that. I want to run something by you as a technologist. The premise is, you know, we used to live in this CPU centric world. We marched to the cadence of Moore's Law and now we're seeing the combinatorial factors of CPU, GPU, NPU, accelerators and other supporting components. With IO and controllers and NICs all adding up. It seems like we're shifting from a processor centric world to a connect centric world on the hardware side. That first of all, do you buy that premise? And does hardware matter anymore with all the cloud? >> Hardware totally matters. I mean the cloud tried to convince us that hardware doesn't matter and it actually failed. And the reason I say that is because if you go to a cloud, you'll find 100s of different instance types that are all reflections of different types of assemblies of hardware. Faster IO, better storage, certain sizes of memory. All of that is a reflection of, applications need certain types of environments for acceleration, for performance, to do their job. Now I do think there's an element of, we're decomposing compute into all of these different sort of accelerators and the only way to bring that back together is connectivity through the network. But there's also SOCs when you get to the edge where you can integrate the entire system onto a pretty small device. I think the important part here is, we're leveraging hardware to do interesting work on behalf of applications that makes hardware exciting. And as an operating system geek, I couldn't be more thrilled, because that's what we do. We enable hardware, we get down into the bits and bytes and poke registers and bring things to life. There's a lot happening in the hardware world and applications can't always follow it directly. They need that level of indirection through a software abstraction and that's really what we're bringing to life here. >> We've seen now hardware specific AI, you know, AI chips and AI SOCs emerge. How do you make decisions about what you're going to support or do you try to support all of them? >> Well, we definitely have a breadth view of support and we're also just driven by customer demand. Where our customers are interested we work closely with our partners. We understand what their roadmaps are. We plan together ahead of time and we know where they're making investments and we work with our customers. What are the best chips that support their business needs and we focus there first but it ends up being a pretty broad list of hardware that we support. >> I could pick your brain for an hour. We didn't even get into super cloud, Chris. But, thanks so much for coming on theCUBE. It's great to have you. >> Absolutely, thanks for having me. >> All right. Thank you for watching. Keep it right there. Paul Gillin, Dave Vellante, theCUBE's live coverage of Red Hat Summit 2022 from Boston. We'll be right back. (mellow music)

(upbeat music) >> Welcome back to the Seaport in Boston. This is day two of theCUBES's coverage of Red Hat Summit 2022 different format this year for Red Hat Summit. You know we are used to the eight to 9,000 people big conferences, but this is definitely and a lot of developers this is definitely a smaller, more intimate, more abbreviated keynotes which I love that new style they've really catering to the virtual audience as well as the physical audience, a lot of good stuff going on last night in the Seaport, which a lot of fun Stephanie Chiras is here is the Senior Vice President of Partner Ecosystem Success at Red Hat. >> Yeah. >> On the move again, Stephanie love to see you. >> yeah. Thank you. It's great to be here with you and now in a little different bit of a role. >> Yeah, I'm happy that we're actually in Boston and we can meet face to face. >> Yes. >> We don't have to get in a plane, but you know we'll be on a lot of planes in the next few months. >> Yeah. >> But look, a new role for you in ecosystems. You are interviewing all the partners, which is very cool. So you get a big observation space as my friend Jeff Jonas would like to say. And so, but I'd like to observe the partner ecosystem in this new era is different. >> It's very different. >> I mean just press release is going back it's really deep engineering and really interesting flywheel approaches. How is the cloud and the hybrid cloud ecosystem and partner ecosystem different today? >> I think there's a couple of things, I think first of all cloud accelerating all the innovation, the whole cloud motion pulls in a cloud partner in addition to many of the other partners that you need to deploy a solution. So this makes almost every deployment a multi-partner deployment. So that creates the need not just for one on one partnerships between companies and vendors but really for a multi-partner experience. Right, how does an ISV work with a distributor work with a cloud vendor? How do you pull all of that together and I think at Red Hat, our view of being a platform company, we want to be able to span that and bring all of those folks together. So I see this transition going from a world of partnerships into a world of a networked ecosystem. And the real benefit is when you can pull together one ecosystem with another ecosystem, build that up and it really becomes an ecosystem of ecosystems. >> Well and I'm a fan, you're a multi tool star, so it may kind of makes you dangerous because you can talk tech in your technical roles. You've been a GM so you understand the business and that's really what it takes in the part of ecosystem. It can't be just technology and just engineering integration, it's got to be a business model associated with that. Talk about those two dimensions. >> And I think what we're seeing in the ecosystem is there are partners that you build with there are partners you service with, there are partners you sell with some do all three, some do two out of three. How do you work those relationships at the end of the day every partner in the ecosystem wants to bring their value to the customer. And their real goal is how do you merge those values together and I think as you know, right, I come from the technology and the product space. I love moving into this space where you look for those value and that synergy of value to bring better technology, a better procurement experience is often really important and simplicity of deployment to customers, but partners span everything we do. We develop with them, we build with them, we deploy with them, we service with them and all has to come together. >> So how do you make this simple for customers? I mean you're describing an increasingly complex environment. How do you simplify this? >> So a couple of things one, spot onto your point Paul, I think customer expectations now are more aggressive than they've ever been that the ecosystem has done pre-work before they show up. The customer doesn't want to be the one who's pulling together this from one vendor, this from another vendor and stitching it together themselves. So there's a number of things I think we've stepped in to try and do digital engagement for certification and deployment, the creation of operators on OpenShift is one way that technology from partners can be done and enabled more easily and quickly with Red Hat platforms. I think in addition, you've seen. >> Can you go a little deeper on that? >> Sure. >> Explain that a little bit more what does that mean? Yeah, First off, we have a digital experience where partners can come in, they can certify and test their applications to run it on Red Hat platforms themselves. So it's a bit of a come one, come all. We also have an engineering team and a developer team to work side by side with them to build those into solutions. We've done things again to supplement that with capabilities of what we call validated patterns things we've done in the market with customers, with partners, we pull together a validated pattern, we put it onto GitHub so anyone can get access to it. It becomes kind of a recipe for deployment that's available for partners to come in and augment on top of that or customers can come in and pull it up GitHub and build off of it. So I feel like there's different layers in the sort of build model that we work with partners and you want to be able to on-ramp any partner wherever they want to influence their value. It could be at the base certification level, it could be even with RHEL 9 was a good one, right. RHEL 9 was the first version of RHEL that we deployed based upon the CentOS Stream model. CentOS Stream is an upstream version of RHEL very tightly tied into the development model but it allowed partners to engage with that code prior to deployment everything from hardware partners to ISV partners, it becomes a much more open way for them to collaborate with us, so there's so much we can do. >> What's the pitch to partners. I mean I know hybrid cloud is fundamental to your value proposition. I mean most people want hybrid cloud even though the cloud guys might not admit it, right, but so what's the pitch, how do you approach partners there's got to be a common theme there pitch me. >> I think one of the things when it comes to the Red Hat ecosystem is the ecosystem itself has to bring value. Yes, we at Red Hat want to bring value, we want to come in and make it easy and simple for you to access our technology when want to make it easy and simple to engage side by side in front of a customer. But at the end of the day the value of the Red Hat ecosystem is not only Red Hat, it's our partnerships with others. It's our partnerships with the hyperscalers, it's our partnerships with ISVs, it's our work in open source communities. So it's not about Red Hat being this sort of epicenter of the ecosystem. The value comes from the collective ecosystem as it stands, and I think we've made a number of changes here at the beginning of the year in order to create a end to end team within Red Hat that does everything from the build to the sell with all the way from end to end. And I think that's bringing a new layer of simplicity for our engagement with their partners, and it's allowing us to stitch together and introduce partners to partners. >> But you are a dot connector in a sense. >> Absolutely. >> And you can't do it all, I mean nobody can. >> Yeah. But especially Red Hat your strategy is not to do it all by design, so where's the big white spaces where you feel as though your strengths need to be complimented by the partners? >> Oh, I think you caught it spot on. We don't think we can do it all, we're a platform company, we know the value of hybrid cloud is all about bringing a flexibility of an ecosystem together. I think the places where we're really doubling down on is simplicity. So the Ansible announcement that we did right with Ansible automation platform on Azure. With that announcement, it brings in certified collections of ecosystem partners on that deployment. We do the work with Azure in order to do that deployment of Ansible automation platform, and then it comes with a set of certified collections that have been done with other partners. And I think those are the pieces where we can really double down on bringing simplicity. Right, so if I look at areas of focus, that's a great space, and I think it is all about connecting the dots, right, it's about connecting our work with Azure with our work with other ISV partners to pull that together and show up to a customer with something that's fast time to value. >> With so many partners to manage, how do you make sure you're not playing favorites. I guess how do you treat all partners equally or do you even try? >> We absolutely try. I think any partnership is a relationship, right, so it is what Red Hat brings to the table, it's also what the partner brings to the table. Our goal is to understand what the value is the partner wants to deliver to the customer. We focus on that and bringing that to the forefront of what we deploy. We absolutely in a hybrid world it's about choice and flexibility. Certainly there are partners and we made some announcements of course, this week, right yesterday and today with some we're continued to deepen our partnerships with those folks who are doubling down with us where their strategy is very well aligned with us. But our goal is to bring a broad ecosystem that offers customers choice. That's what hybrid cloud's all about. >> I remember years ago, your colleague Bob Pitino, I went down and met him in his office and he schooled me, he was awesome and we did a white board on alternative processors. >> Yeah. >> You guys were doing combat duty in the power division at the time. But basically he helped me understand the trend that is absolutely come true which is alternative processors. It's not just about the CPU anymore, it's about all the CPU and GPU and NPU and accelerators and all these other connected parts. You guys obviously are in the middle of that, you've got relationships with ARM, NVIDIA, Intel, we saw on stage today. Explain the importance and the trends that you see of these alternative processors and accelerators and what that means for customers in terms of the applications that they're now going to be able to tap. >> Yeah, so you know I love this topic when it comes. So one of the spaces is edge, right, we talked about edge today. Edge to me is the epitome of kind of a white space and an opportunity where ecosystem is essential. Edge is pulling together unique hardware capabilities from an accelerator all the way out to new network capabilities and then to AI applications. I mean the number of ISVs building AI applications is just expanding. So it's really that top to bottom ecosystem story, and our work with the telco comes in, our work with the ARM partners, the NVIDIA of the world, the accelerators of the world comes in edge. And then you pull it up to the applications as well. And then to touch in, we're seeing edge be deployed a lot in industries and industry verticals, right. A lot of edge deployments are tailored for a retail market or for a financial services sector. Again, for us, we rely very much on the ecosystem to go into industry verticals where platform companies. So our goal is to find those key partners in those industry verticals who speak the speak, talk the language, and we partner with them in order to support them and so this whole edge space pulls all of that together I think even out to the go to market with industry alignment. >> It's interesting to partner, so we're talking about Silicon, we could talk about that all day long. >> Yes. >> And then it spans and that we had Accenture on we had Raj yesterday. And it was interesting 'cause you think Accenture's like deep vertical industry expertise which it is but Raj's role is really cross industry, and then to tap into that industry expertise you guys had an announcement yesterday with those guys and obviously the GSIs are a key player. >> Absolutely. >> We saw a bunch of 'em last night out and about. >> Yeah. >> So talk about the importance of those relationships. >> I think we are in the announcement with Accenture is a great one, right. We're really doubling down because customers are looking to them, they're looking to the Accentures of the world to help them move into this hybrid world. It's not simple, it's not simple to deploy and get that value of the flexibility. So Accenture has built a number of tools in order to help customers on that journey which we talked about yesterday it really is a continuum of how customers adopt for their cloud space. And so us partnering with them offers a platform underneath, give them technology capabilities and Accenture is able to help customers and guide them along that journey and add a new layer of simplicity. So I think the GSI are critical in this space. >> Yeah. >> You talked about the number of companies developing AI, new AI tools right now. And it seems like there's just the pace of innovation is amazing, the number of startups is unprecedented. How do you decide who makes it into your partner system? What bars do they have to jump over to become a Red Hat partner? >> I think our whole partner structure is layered out quite honestly a bit in tiering, depending upon how much the partner is moving forward with Red Hat, how strategically we aligned our et cetera. But there is definitely a tier that is a come one come all, get your technology to work with Red Hat. We do that digitally now in the world of digital it's much easier to do that to give accessibility but there is definitely a tier that is a come one come all and participate. And then above that, it comes into tierings. How deeply do we go to do joint building to do co-creation and how do we sort of partner even on things like we have ARO and ROSA as you know which is OpenShift built with AWS with Azure those provide very deep technical engagements to bring that level of simplicity, but I would say it spans all the layers, right. We do have a dedicated engineering team to work with the ecosystem partners. We have a dedicated digital team to reach out and proactively right, invite folks to participate and encourage them through the thing and through the whole path. And we've done some things on enablement, we just made early March, we made enablement free for all our partners in order to learn more and get more skilled in Red Hat. Skills and skill creation is just critical for partners, and we want to start there right. >> So we started this conversation with how cloud ecosystems are different. And I think AWS as the mother of all ecosystems, so does Microsoft too but they've had it for a while. And I got felt like last decade partners were kind of afraid, all right, we're going to partner with a cloud vendor, but they're going to eat our lunch. I noticed last year at Reinvent that whole dynamic is changing and I think the industry's realizing this is not a zero sum game. That there's just so much opportunity especially when you start thinking about the edge. So you guys use the term hybrid, right, and John and I wrote a piece prior to Reinvent last year, we said there's something new brewing, we've got on-prem connecting to the clouds, it's going across clouds. People call that multi-cloud, but multi-cloud has been like multi-vendor. It really hasn't been a sort of strategy or a technical layer. And now you're talking the edge and we see the hyperscaler spending a hundred billion dollars a year on infrastructure. And now we see companies like yours and your ecosystem building on top of that. They're not afraid of it anymore, they're actually looking at it as a gift and so we coined this term called Supercloud which is a abstraction layer, and it rises above highs all the complexity of the underlying primitives and APIs and people kind of wince at the term Ashesh called it Metacloud which I like it's kind of fun. But do you feel like that's happening in the ecosystem? Is that a real trend or is that just my imagination? >> I think it's definitely a real trend and it's coming from customers, right, that's what customers want. So customers want the ability to choose are they going to self-manage their applications within a public cloud. There's much more than just technology in the public cloud too right. There's a procurement experience that they provide a simplicity of our relationship. They may choose one of the hyperscalers. They pick a procurement experience, they deepen that relationship, they leverage the services. And I think now what you're seeing is customers are demanding it. They want to be a part of that, they want to run on multiple clouds. And now we're looking at cloud services you've seen our strategy double down on cloud services. I think that kind of comes back together to a customer wants simplicity. They expect the ecosystem to work together behind the scenes. That's what capabilities like ARO are or OpenShift on Azure and OpenShift on AWS. That's what we can provide. We have an SRV team, we jointly support it with those partners behind the scenes but as you said, it's no longer that fear, right. We've rolled up our sleeves together specifically because we wanted to show up to the customer as one. >> Yeah, and by the way, it's not just traditional technology vendors, it's insurance companies, it's banks, it's manufacturers who are building out these so-called super clouds. And to have a super cloud, you got to have a super PaaS and OpenShift is the supers of all PaaS So Stephanie cheers, thanks so much for coming back to theCUBE, >> Oh it's my pleasure. it great to see you again. >> Thank you for the time. >> All right, and thank you for watching keep it right there this is day two of Red Hat Summit 2022 from the Seaport in Boston. You're watching theCUBE. (upbeat music)

(upbeat music) >> Welcome back to Boston, Massachusetts. We're here at the Seaport. You're watching theCUBE's coverage of Red Hat Summit 2022. My name is Dave Vellante and Paul Gillin is here. He's my cohost for the next day. We are going to dig in to the famous RHEL, Red Hat Enterprise Linux. Gunnar Hellekson is here, he's the Vice President and General Manager of Red Hat Enterprise Linux. Gunnar, welcome to theCUBE. Good to see you. >> Thanks for having me. Nice to be here, Dave, Paul. >> RHEL 9 is, wow, nine, Holy cow. It's been a lot of iterations. >> It's the highest version of RHEL we've ever shipped. >> And now we're talking edge. >> Yeah, that's right. >> And so, what's inside, tell us. to keep happy with a new RHEL release. to keep happy with a new RHEL release. The first is the hardware partners, right, because they rely on RHEL to light up all their delicious hardware that they're making, then you got application developers and the ISVs who rely on RHEL to be that kind of stable platform for innovation, and then you've got the operators, the people who are actually using the operating system itself and trying to keep it running every day. So we've got on the, I'll start with the hardware side, So we've got on the, I'll start with the hardware side, which is something, as you know, RHEL success, and I think you talked about this with Matt, just in a few sessions earlier that the success of RHEL is really, hinges on our partnerships with the hardware partners and in this case, we've got, let's see, in RHEL 9 we've got all the usual hardware suspects and we've added, just recently in January, we added support for ARM servers, as general ARM server class hardware. And so that's something customers have been asking for, delighted to be shipping that in RHEL 9. So now ARM is kind of a first-class citizen, right? Alongside x86, PowerZ and all the other usual suspects. And then of course, working with our favorite public cloud providers. So making sure that RHEL 9 is available at AWS and Azure and GCP and all our other cloud friends, right? >> Yeah, you mentioned ARM, we're seeing ARM in the enterprise. We're obviously seeing ARM at the edge. You guys have been working with ARM for a long time. You're working with Intel, you're working with NVIDIA, you've got some announcements this week. Gunnar, how do you keep Linux from becoming Franken OS with all these capabilities? >> This is a great question. First is, the most important thing is to be working closely with, I mean, the whole point of Linux and the reason why Linux works is because you have all these people working together to make the same thing, right? And so fighting that is a bad idea. Working together with everyone, leaning into that collaboration, that's an important part of making it work over time. The other one is having, just like in any good relationship, having healthy boundaries. And so making sure that we're clear about the things that we need to keep stable and the places where we're allowed to innovate and striking the right balance between those two things, that allows us to continue to ship one coherent operating system while still keeping literally thousands of platforms happy. >> So you're not trying to suck in all the full function, you're trying to accommodate that function that the ecosystem is going to develop? >> Yeah, that's right. So the idea is that what we strive for is consistency across all of the infrastructures and then allowing for kind of optimizations and we still let ourselves take advantage of whatever indigenous feature might appear on, such an ARM chip or thus in a such cloud platform. But really, we're trying to deliver a uniform platform experience to the application developers, right? Because they can't be having, like there can't be kind of one version of RHEL over here and another version of RHEL over here, the ecosystem wouldn't work. The whole point of Linux and the whole point of Red Hat Enterprise Linux is to be the same so that everything else can be different. >> And what incentives do you use to keep customers current? >> To keep customers current? Well so the best thing to do I found is to meet customers where they are. So a lot of people think we release RHEL 9 at the same time we have Red Hat Enterprise Linux 8, we have Red Hat Enterprise Linux 7, all these are running at the same time, and then we also have multiple minor release streams inside those. So at any given time, we're running, let's say, a dozen different versions of RHEL are being maintained and kept up-to-date, and we do this precisely to make sure that we're not force marching people into the new version and they have a Red Hat Enterprise Linux subscription, they should just be able to sit there and enjoy the minor version that they like. And we try and keep that going for as long as possible. >> Even if it's 10 years out of date? >> So, 10 years, interesting you chose that number because that's the end of life. >> That's the end of the life cycle. >> Right. And so 10 years is about, that's the natural life of a given major release, but again inside that you have several 10-year life cycles kind of cascading on each other, right? So nine is the start of the next 10-year cycle while we're still living inside the 10-year cycle of seven and eight. So lots of options for customers. >> How are you thinking about the edge? how do you define, let's not go to the definition, but at high level. (Gunnar laughing) Like I've been in a conference last week. It was Dell Tech World, I'll just say it. They were sort of the edge to them was the retail store. >> Yeah. >> Lowe's, okay, cool, I guess that's edgy, I guess, But I think space is the edge. (Gunnar chuckling) >> Right, right, right. >> Or a vehicle. How do you think about the edge? All the above or but the exciting stuff to me is that far edge, but I wonder if you can comment. >> Yeah, so there's all kinds of taxonomies out there for the edge. For me, I'm a simple country product manager at heart and so, I try to keep it simple, right? And the way I think about the edge is, here's a use case in which somebody needs a small operating system that deploys on probably a small piece of hardware, usually varying sizes, but it could be pretty small. That thing needs to be updated without any human touching it, right? And it needs to be reliably maintained without any human touching it. Usually in the edge cases, actually touching the hardware is a very expensive proposition. So we're trying to be as hands off as possible. >> No truck rolls. >> No truck rolls ever, right, exactly. (Dave chuckling) And then, now that I've got that stable base, I'm going to go take an application. I'll probably put it in a container for simplicity's sake and same thing, I want to be able to deploy that application. If something goes wrong, I need to build a roll back to a known good state and then I need to set of management tools that allow me to touch things, make sure that everything is healthy, make sure that the updates roll out correctly, maybe do some AB testing, things like that. So I think about that as, that's the, when we talk about the edge case for RHEL, that's the horizontal use case and then we can do specializations inside particular verticals or particular industries, but at bottom that's the use case we're talking about when we talk about the edge. >> And an assumption of connectivity at some point? >> Yeah. >> Right, you didn't have to always be on. >> Intermittent, latent, eventual connectivity. >> Eventual connectivity. (chuckles) That's right in some tech terms. >> Red Hat was originally a one trick pony. I mean, RHEL was it and now you've got all of these other extensions and different markets that you expanded into. What's your role in coordinating what all those different functions are doing? >> Yes, you look at all the innovations we've made, whether it's in storage, whether it's in OpenShift and elsewhere, RHEL remains the beating heart, right? It's the place where everything starts. And so a lot of what my team does is, yes, we're trying to make all the partners happy, we're also trying to make our internal partners happy, right? So the OpenShift folks need stuff out of RHEL, just like any other software vendor. And so I really think about RHEL is yes, we're a platform, yes, we're a product in our own right, but we're also a service organization for all the other parts of the portfolio. And the reason for that is we need to make sure all this stuff works together, right? Part of the whole reasoning behind the Red Hat Portfolio at large is that each of these pieces build on each other and compliment each other, right? I think that's an important part of the Red Hat mission, the RHEL mission. >> There's an article in the journal yesterday about how the tech industry was sort of pounding the drum on H-1B visas, there's a limit. I think it's been the same limit since 2005, 65,000 a year. We are facing, customers are facing, you guys, I'm sure as well, we are, real skills shortage, there's a lack of talent. How are you seeing companies deal with that? What are you advising them? What are you guys doing yourselves? >> Yeah, it's interesting, especially as everybody went through some flavor of digital transformation during the pandemic and now everybody's going through some, and kind of connected to that, everybody's making a move to the public cloud. They're making operating system choices when they're making those platform choices, right? And I think what's interesting is that, what they're coming to is, "Well, I have a Linux skills shortage and for a thousand reasons the market has not provided enough Linux admins." I mean, these are very lucrative positions, right? With command a lot of money, you would expect their supply would eventually catch up, but for whatever reason, it's not catching up. So I can't solve this by throwing bodies at it so I need to figure out a more efficient way of running my Linux operation. People are making a couple choices. The first is they're ensuring that they have consistency in their operating system choices, whether it's on premise or in the cloud, or even out on the edge, if I have to juggle three, four different operating systems, as I'm going through these three or four different infrastructures, that doesn't make any sense, 'cause the one thing is most precious to me is my Linux talent, right? And so I need to make sure that they're consistent, optimized and efficient. The other thing they're doing is tooling and automation and especially through tools like Ansible, right? Being able to take advantage of as much automation as possible and much consistency as possible so that they can make the most of the Linux talent that they do have. And so with Red Hat Enterprise Linux 9, in particular, you see us make a big investment in things like more automation tools for things like SAP and SQL server deployments, you'll see us make investments in things like basic stuff like the web console, right? We should now be able to go and point and click and go basic Linux administration tasks that lowers the barrier to entry and makes it easier to find people to actually administer the systems that you have. >> As you move out onto these new platforms, particularly on the edge, many of them will be much smaller, limited function. How do you make the decisions about what features you're going to keep or what you're going to keep in RHEL when you're running on a thermostat? >> Okay, so let me be clear, I don't want RHEL to run on a thermostat. (everybody laughing) >> I gave you advantage over it. >> I can't handle the margins on something like that, but at the end. >> You're running on, you're running on the GM. >> Yeah, no that's, right? And so the, so the choice at the, the most important thing we can do is give customers the tools that they need to make the choice that's appropriate for their deployment. I have learned over several years in this business that if I start choosing what content a customer decide wants on their operating system I will always guess it wrong, right? So my job is to make sure that I have a library of reliable, secure software options for them, that they can use as ingredients into their solution. And I give them tools that allow them to kind of curate the operating system that they need. So that's the tool like Image Builder, which we just announced, the image builder service lets a customer go in and point and click and kind of compose the edge operating system they need, hit a button and now they have an atomic image that they can go deploy out on the edge reliably, right? >> Gunnar can you clarify the cadence of releases? >> Oh yeah. >> You guys, the change that you made there. >> Yeah. >> Why that change occurred and what what's the standard today? >> Yeah, so back when we released RHEl 8, so we were just talking about hardware and you know, it's ARM and X86, all these different kinds of hardware, the hardware market is internally. I tell everybody the hardware market just got real weird, right? It's just got, the schedules are crazy. We got so many more entrance. Everything is kind of out of sync from where it used to be, it used to be there was a metronome, right? You mentioned Moore's law earlier. It was like a 18 month metronome. Everybody could kind of set their watch to. >> Right. >> So that's gone, and so now we have so much hardware that we need to reconcile. The only way for us to provide the kind of stability and consistency that customers were looking for was to set a set our own clock. So we said three years for every major release, six months for every minor release and that we will ship a new minor release every six months and a new major release every three years, whether we need it or not. And that has value all by itself. It means that customers can now plan ahead of time and know, okay, in 36 months, the next major release is going to come on. And now that's something I can plan my workload around, that something I can plan a data center migration around, things like that. So the consistency of this and it was a terrifying promise to make three years ago. I am now delighted to announce that we actually made good on it three years later, right? And plan two again, three years from now. >> Is it follow up, is it primarily the processor, optionality and diversity, or as I was talking to an architect, system architect the other day in his premise was that we're moving from a processor centric world to a connect centric world, not just the processor, but the memories, the IO, the controllers, the nics and it's just keeping that system in balance. Does that affect you or is it primarily the processor? >> Oh, it absolutely affects us, yeah. >> How so? >> Yeah, so the operating system is the thing that everyone relies on to hide all that stuff from everybody else, right? And so if we cannot offer that abstraction from all of these hardware choices that people need to make, then we're not doing our job. And so that means we have to encompass all the hardware configurations and all the hardware use cases that we can in order to make an application successful. So if people want to go disaggregate all of their components, we have to let 'em do that. If they want to have a kind of more traditional kind of boxed up OEM experience, they should be able to do that too. So yeah, this is what I mean is because it is RHEL responsibility and our duty to make sure that people are insulated from all this chaos underneath, that is a good chunk of the job, yeah. >> The hardware and the OS used to be inseparable right before (indistinct) Hence the importance of hardware. >> Yeah, that's right. >> I'm curious how your job changes, so you just, every 36 months you roll on a new release, which you did today, you announced a new release. You go back into the workplace two days, how is life different? >> Not at all, so the only constant is change, right? And to be honest, a major release, that's a big event for our release teams. That's a big event for our engineering teams. It's a big event for our product management teams, but all these folks have moved on and like we're now we're already planning. RHEL 9.1 and 9.2 and 8.7 and the rest of the releases. And so it's kind of like brief celebration and then right back to work. >> Okay, don't change so much. >> What can we look forward to? What's the future look like of RHEL, RHEL 10? >> Oh yeah, more bigger, stronger, faster, more optimized for those and such and you get, >> Longer lower, wider. >> Yeah, that's right, yeah, that's right, yeah. >> I am curious about CentOS Stream because there was some controversy around the end of life for CentOS and the move to CentOS Stream. >> Yeah. >> A lot of people including me are not really clear on what stream is and how it differs from CentOS, can you clarify that? >> Absolutely, so when Red Hat Enterprise Linux was first created, this was back in the days of Red Hat Linux, right? And because we couldn't balance the needs of the hobbyist market from the needs of the enterprise market, we split into Red Hat Enterprise Linux and Fedora, okay? So then for 15 years, yeah, about 15 years we had Fedora which is where we took all of our risks. That was kind of our early program where we started integrating new components, new open source projects and all the rest of it. And then eventually we would take that innovation and then feed it into the next version of Red Hat Enterprise Linux. The trick with that is that the Red Hat Enterprise Linux work that we did was largely internal to Red Hat and wasn't accessible to partners. And we've just spent a lot of time talking about how much we need to be collaborating with partners. They really had, a lot of them had to wait until like the beta came out before they actually knew what was going to be in the box, okay, well that was okay for a while but now that the market is the way that it is, things are moving so quickly. We need a better way to allow partners to work together with us further upstream from the actual product development. So that's why we created CentOS Stream. So CentOS Stream is the place where we kind of host the party and people can watch the next version of Red Hat Enterprise get developed in real time, partners can come in and help, customers can come in and help. And we've been really proud of the fact that Red Hat Enterprise Linux 9 is the first release that came completely out of CentOS Stream. Another way of putting that is that Red Hat Enterprise Linux 9 is the first version of RHEL that was actually built, 80, 90% of it was built completely in the open. >> Okay, so that's the new playground. >> Yeah, that's right. >> You took a lot of negative pushback when you made the announcement, is that basically because the CentOS users didn't understand what you were doing? >> No, I think the, the CentOS Linux, when we brought CentOS Linux on, this was one of the things that we wanted to do, is we wanted to create this space where we could start collaborating with people. Here's the lesson we learned. It is very difficult to collaborate when you are downstream of the product you're trying to improve because you've already shipped the product. And so once you're for collaborating downstream, any changes you make have to go all the way up the water slide and before they can head all the way back down. So this was the real pivot that we made was moving that partnership and that collaboration activity from the downstream of Red Hat Enterprise Linux to putting it right in the critical path of Red Hat Enterprise Linux development. >> Great, well, thank you for that Gunnar. Thanks for coming on theCUBE, it's great to, >> Yeah, my pleasure. >> See you and have a great day tomorrow. Thanks, and we look forward to seeing you tomorrow. We start at 9:00 AM. East Coast time. I think the keynotes, we will be here right after that to break that down, Paul Gillin and myself. This is day one for theCUBE's coverage of Red Hat Summit 2022 from Boston. We'll see you tomorrow, thanks for watching. (upbeat music)

>>Welcome back to Boston. We're down in the Seaport. This is the Cube's coverage of red hat summit, 2022. I'm Dave ante with my co-host Paul Gillon, Sebastian Moes. Here he is a senior enterprise architect at bit mark Sebastian. Thanks for coming to the queue. Welcome to the United States. Good to have you in Boston. >>Thank you. Thank you for the invitation. It's uh, good to be on a live summit again after, uh, those, uh, testing two years >>Strange, isn't it? I mean, people kind of don't know what to do. Shake, bump this bump, >>And >>It's like, but where everybody wants to get out of the, the home, the lockdown and, you know, there's a real pent up demand. Tell us about bit mark. >>Um, bit mark is a managed service, uh, provider for, um, German statutory health insurance companies. Um, we manage about our software that we develop, um, is for about 85% of the, uh, German health insurance companies. Um, we have, uh, not only do we build the software, we also have data centers where we run software for, for our customers. Um, and it's everything that a health insurance company is, uh, mandatory to have to run their business, so to >>Speak what, what's the life of an enterprise architect like these days and how, how has it evolved? How has it changed? Uh, I mean, independent of the pandemic, will we get to that, but, but, you know, technology changes, organizational objectives of, of changed the public policy changes. How, how was your, the life of an enterprise architect changed? >>Um, well we, we have this, uh, big monolith JG E application that is, uh, run on JBO. Um, and now we want to, we want to change that into a more modern environment and using, uh, OpenShift to do that. Um, and yeah, there's, uh, there's a lot of reg regulatory things that come up that need to be, um, need to be figured in. Uh, there is new demands that our customers have that we need to figure out how to get to market, uh, and to be able to deliver software more faster and, you know, make the turnaround, uh, or have the turnaround be less. >>So kind of following the technology trends of going from big monolith to microservices and containerization and distributed data, the, the, >>The whole, the scalability, uh, you know, and quick turnaround, that is, that is the main focus. >>So the application that you're here talking about this pace to face in application, kind of a new market for you, a new direction, is this part of that overall shift to a more modular microservices based, uh, >>Structure? Um, well, we, we, we had applications like this before, but this is a new branch of it because, um, there's a strong drive in Germany too, for more digital digitalization. Um, and to have a new interacting model with the customer from basic things to more advanced features like medication services, vaccination status, um, managing your allergies, and that's an edit value that we want to give, uh, for our customers. So they can, their customers can benefit. >>I dunno what it's like in Germany, but in the United States used to call up the doctor and say, Hey, can I just, can we do this over the phone? No, you gotta come into the office. Mm-hmm <affirmative> and then of course, with the pandemic, it was like, you can't come into the office. It was just total flipping, cuz you could get 80% of what you needed done, and this is what your app enabled essentially. Right? >>Yeah. And, and some that and some added value as well, uh, to, to give, um, yeah, a benefit for using this, uh, online interaction for, um, the insured people, the, the patients, >>Essentially a digital gateway, including your data. Well, that's the other thing you can't get right. As a patient, you can't ever get through your data, it's like right. You >>Get it, but nobody else can >>Get it. <laugh> sometimes it's hard for you to get it cuz of again, in the United States, HIPAA and the, and the, and the requirements for privacy restrict often access to, to data, you have to go through hoops to get it. So, uh, so, so that experience is what you codified in your application. Yes. >>Um, yes, we have this, uh, unique data set of all health related information that people have to, uh, interact with in, in when they're sick or when they deal with their healthcare company. Um, and yeah, we wanna provide that data to the customers. So they're able to look at it. Um, there's also the, uh, electronic patient folder. You can say, um, where there's data like medical exams and stuff in there that they have access to. We provide that as well for, for our customers. Um, but, uh, yeah, it is about the interaction and that I can see when I put something in to my insurance company via email or the doctor put something in that I have the interaction on my phone and see when it was delivered, um, to them when it's active, when I get the money, stuff like that. >>Now this application is built on OpenShift, it's cloud native, uh, has all the constructs. How different was that for your development team from building something like you mentioned, the monolithic Jbos application that you already have, how different was building the cloud native, uh, >>Constructs. Um, it is quite different. I mean, it's building software, there's a lot of the same things involved. We've been, we've done agile and scrum, uh, before and so on, but we now have a, um, we're trying to be, or no, we're actually achieved to be faster in bringing this to market, um, deploying it in different data centers, doing it all automatically doing automatic tested, uh, right as part of the pipeline. Um, there's, there's a lot of huge steps that we can, we're able to take because of the technology. And that's why we did go there in the first place. That's why we said, okay, this is, it needs to be, uh, cloud native. >>You found that red, red hat had the full suite of tools that you needed. >>Um, yeah, I mean, we, there's some open source stuff that we've also integrated into the pipeline and everything, but there's a lot of, for example, we are using the, uh, three scale, uh, the API management from, from red hat, um, just to be able to, um, use the functionality that we build, that the customers can use the functionality in other products that they use that serve partner people, uh, uh, certain partner companies can, are able to use the services as well. >>Okay. So the, the, the dumb question is, but I'll ask it anyway is you could get this stuff for free Kubernetes, open source, you know, you get E Ks for free. Why didn't you just use the freebie? >>Why? Um, well, we're, we're on a scale with so many, um, uh, customers and data centers that we have to take that we do need support in, in a way. Um, and I usually say, so if we take software from whoever, whatever company it is, we're gonna break it. Yeah. <laugh> um, the, the, the transaction load that we have is, is quite, uh, intense and the performance that we need, uh, especially in the, in the business to business, um, market is, is so big that we do need the interaction with, with a vendor and that they're able to help us, uh, with certain escalations >>German Germans play rough. So <laugh>, um, you know, when a, when a vendor announces an innovation lab, I always go, okay, that's an EBC, like an executive briefing center. It's all gonna be used for sales. But my understanding is you actually leveraged the innovation labs. It was actually helpful in building this application. Is that true? >>I, I, I actually, uh, to part in the open innovation that we did with RA hat, and we knew we knew what we wanted to do. We, we knew the technology, we knew what we wanted to have done, um, but they helped us to, to get there step by step with the, with the tools they have, the, um, uh, you know, the ways of working and how this is, this is built. It really lends itself to, to build that step by step and worry about some stuff later and just do it. Um, yeah, piecemeal, >>This is Al is also a new market for you. It's your first real business to consumer facing application. That's that implies a very different approach to experience design, uh, to how you >>And performance yeah, >>Yeah. Perform exactly. Uh, how did your development team adapt to that? >>Um, well, there's, there's, you know, certain things that you build into the process, like integration, testing, automated integration testing, where the application just gets checked right after you check in your software. Um, we built in low testing to, you know, we have an idea of how many transactions per second, there will be. And so the low testing takes care of that as well. Um, and that is easier if you have a small piece of software instead of the whole monolith that we usually have. And so you, we are able to, to build it quicker and get it out quick in, in hours. >>How, how have you, um, accessed customer feedback, you do your, you know, net promoter score surveys, what, what's the been the customer reaction, your, your consumer >>Reaction? Um, they, they, I mean, I'm kind of the wrong guy to talk to, to, uh, about <laugh> to >>Talk about, come on the architected, the thing. >>Yeah, I, I did. And, and then the feedback has been, it's been very good so far, uh, and we are pretty happy with it. Uh, it's it's running, uh, very well. Um, I don't quite know how they got there. Our customer does, uh, you know, uh, questionnaires and, and stuff like that. Yeah. We have a, a different depart, uh, department to, to solicit feedback on that. But from what I hear, uh, it's, it's received very well. >>One of the cloud native features, I understand you used extensively with APIs, uh, for integrations. How are you making this application accessible to partners? What, I mean, what are you exposing? How will you use those APIs to enhance the value through, through an ecosystem of >>Partners? Um, well, we document them, um, and so they're out there to use. And as long as there's a, um, a security process within, um, em that we have in front of it, um, they're open source, um, APIs. So, uh, as I said, they have other programs that they wrote themselves or that they bought that are able to use those APIs, um, from an open API document. Uh, and, and just interact with that as long as the user is, uh, authenticated, they're able to, to get this data and show it in a different context and use it in a different context. >>Did you play golf? >>Um, I used to time ago, not anymore. >>Now, do you know what a Mulligan is? Yes, I did. Okay. If you had a Mulligan, you'd do this all over again. What, what would you do differently? >>Um, an interesting question. I, don't not sure. Um, you, you say you're smarter after, after you've done that. Yeah. And, and of course there's, uh, there's, there, there there's certainly were things that I didn't expect that would happen. Um, like how, how really you need to go modular and on, on everything and need your own resource and infrastructure. Um, because we came from a very centralized, um, uh, scope. We had a database that is a big DB database, um, and now we're going into smaller database and not decentralized a lot. Um, and that was something that the extent of it, I didn't expect, I, I wanted to use more smaller things. And, and that was something that we very quickly learned that no, we need really need to separate stuff out. >>Was that an organizational sort of mindset shift? Um, are you, are you rethinking or rearchitecting your data, um, your data architecture as part of that, or is that more, or is this more just sort of tactical for this app? >>Um, no, we're definitely need to need to do this because, uh, it really gets, um, or it really is a, um, something to handle a, a big pool of data is, is really a challenge or can be a challenge at times >>To scale, >>To, to, to scale that up. Right. Yeah. Um, and so, yeah, we are going to, to separate that out and double some data. That's, that's gonna be a thing it's gonna be more data at the end, but since it's scaled out and, and decentralized, that will >>Help a lot of organizations would say, well, we wanna keep it centralized monolithic, which is kind of a negative term, but I think it's true, uh, because it's more cost effective. We're not gonna duplicate things as much. We're gonna have roles that are dedicated, but it sounds like you're seeing a business advantage of distributing those functions, decentralizing those functions to a >>Extent, right, right. Because if you, if you have a centralized Mon monolith, then it, I, yeah, it might be negative, but it really is. It's a good working software. Um, but to have that, it's, um, it's really hard to release new features and new, new, you know, even buck fixes it, it just takes time. It, it is, uh, uh, a time consuming process. And if you have it decentralized and in smaller packages, you can just do, Afix run it through the pipeline, have the testing done and just put that out within hours. >>How important was it to bit more to build this application on an open source platform? >>Um, the open source didn't come so much in our perspective of things, or we didn't consider it that much. It was just, this is there. This works. We have a good support behind that. Um, we are, our, our coach is not open sourced, then we're not going to anytime soon tell about it. Um, we're actually thinking about having parts that might be, uh, a kind of open source dish, uh, just in the healthcare community kind of thing. Um, but, uh, yeah, no, that didn't F factor in as much. Um, it was just something that we had >>Experienced another architecture question. So you've got the application stack, right. If I can use that term, although application development tools that you build use to build the application, and then you've got the data that the application needs, how are those architected, are they sort of separate entities? Are they coming together? >>Um, we used to have, we used to have, uh, uh, data, um, net a, a, um, an MDA approach, a J hue. Um, so they're very strong connected. That is, there's just in the database. There are models and entities that we use in the, in the JBO. Um, and well, we're still gonna use hibernate to, to, uh, to do the G GPA, but it's, uh, yeah, it's something that needs to be restructured because it just takes a lot of resources to manage data from different parts of the application, bringing them together, um, that will, will need to change. >>And what about new data sources? If I came to and say, Sebastian, I need to inject new data into the, the app. I need to get this to how, how, how difficult or, or fast easy is that, >>Uh, now in the, in the world now, or actually we wanna >>Compare, can you compare before and now, I mean, it wouldn' have to happen before would be >>Like, in the time in the timeframe it's, it's, it's not, it's hard to say. I mean, but if you have a project right now, we're talking, uh, months, um, like a year to, to get it done, get it tested, and then it even takes, um, up to a month to before it's out to every customer. Yeah. The rollout process takes some time. Yeah. Um, and we're planning on, or we, we developed the new, uh, the new software we developed in a couple of months. Uh, and then it is deployed and then it's in production and it's in production for all the customers that wanted to use it for now. I mean, it's not deployed to all customers yet, uh, because they need to adapt it and in their way. Um, but they have it, you know, it's, it's right there. It's deployed. Yeah. When we fix it, it's in a, you know, hours, couple days it's out and it's out in production, in different data centers for different customers. >>And we've come full circle the life of a, of an architect. It's, uh, it sounds like it's much better today. Sebastian, thanks so much for coming to the cube. Appreciate your time and your insights. And thank you for watching. Keep it right there that you watching the Cube's coverage of red hat summit, 2022 from Boston, Dave Valante for Paul Gillon, we'll be right back.

>>To the Seaport in Boston, Massachusetts, everybody's buzzing. The Bruins are playing tonight. They tied it up. The Celtics tied it up last night. We're excited. We don't talk about the red Sox. Red Sox are getting struggles, but you know, we have good distractions. Paul goer is here. He's the president and chief executive officer at red hat and also a Boston fan of great to see, of course, you too. >>Nice to see you guys, you know, it's been a, it's been a while. >><laugh> yeah, we saw you, you know, online and virtually for a couple of years there, but, uh, you know, we've been doing red hat summit for a long, long time. Yeah, of course we were talking earlier. It's just much more intimate, kind of a VIP event, a few more suit jackets here. You know, I got my tie on, so I don't get too much grief. I usually get grief when I wear a tie of red hat summit, but it's a different format this year. Compressed keynotes. Your keynote was great. The new normal, sometimes we call it the new abnormal <laugh>, uh, but you know, how do you feel? >>I, I, I, I feel great. First of all, you know, combination today, virtual audience in, in house audience here today. I think we're gonna see a lot of that in the future. I mean, we designed the event around that and I, I think it, I think it played pretty well. Kudos, kudos to our team. You're right. It's, it's, it's a bit more intimate even the way it was set up, but those are the conversations we like having with our customers and our partners, much more partner centric, uh, as well right now, as well. >>You know, we were talking about, you know, hybrid cloud. It was kind of, you know, it was a good marketing term. And, but now it's, it's, it's become the real thing. I've said many times the, the definition of cloud is changing. It's expanding it's no, the cloud is no longer this remote set of services, you know, somewhere up in the cloud, it's on prem connecting to a cloud across clouds, out to the edge and you need capabilities that work everywhere. And that's what red hat did. The market's just swimming toward you. >>Yeah. I mean, you look at it, you know, I was, uh, you know, if you look at it, you know, the clouds are powerful unto themselves, right? The clouds are powerful unto themselves. They're all different. Right? And that that's, I mean, hardware vendors were, were similar, but different, same thing. You need that connective tissue across, across the whole thing. I mean, as I said, in my keynote today, I remember talking to some of our CIOs and customers 10 years ago and they said, we're going 90% of our apps tomorrow to one cloud. And we knew that wasn't practical because of course the clouds are built from Linux. So we knew it was underneath the hood and, and what's happened. It's taken some time, but as they started to get into that, they started to see, well, maybe one cloud's more suited for one application than the other, these apps. You may have to keep on premise, but you know, what really exploded at the, the, the hybrid thing, the edge. Now they're putting things at the edge, the GM announcement tell you, I know you're gonna talk to Francis. Yeah, yeah. Later. I mean, that's, that's a mini data center in, in every cloud, but that's still under the purview of the CIO, you know? So, so, so that's what hybrid's all about is tying all those pieces together, cuz it got more powerful, but it also more complex. >>You mentioned being the connective tissue, but we don't hear as much talk about multi-cloud seems to me, as we used to this conference has been all about hybrid cloud. You don't really talk about multi-cloud. How important is that to the red hat strategy, being that consistent layer? >>It's probably my mistake or our mistake because multi's more prevalent and more important than just hybrid alone. I mean, hybrid hybrid started from on-premise to one part to any one particular cloud. That was the, the first thought of hybrid. But as I said, as, as, as um, some of the cloud providers became so big, um, every, every CIO I talked to, whether they know whether they know it or not most do are in a multi environment for a whole bunch of reasons, right. You know, one cloud provider might be better in a different part of the world. And another one cloud provider might have a better service than another. Some just don't like to be stuck to one it's it's really hybrid multi. We should, we should train ourselves to every time we say hybrid, say multi, because that's really, that's really what it is. It, I think that happened overnight with, with Microsoft, you know, with Microsoft they've, they've, they've really grown over the last few years, so has Amazon for that matter. But Microsoft really coming up is what really made it a, a high, a multi world. >>Microsoft's remarkable what, what they're doing. But I, I, I have a different thinking on this. I, I heard Chuck Whitten last week at, at the Dell conference he used, he said used the phrase a multicloud, uh, by default versus multi-cloud by design. And I thought that was pretty interesting because I've said that multi-cloud is largely multi-vendor, you know? And so hybrid has implications, right? We, we bring and a shesh came up with a new term today. Metacloud I use Supercloud I like Metacloud better because something's happening, Paul. It feels like there's this layer abstraction layer that the underlying complexity is hidden. Think about OpenShift. Yeah. I could buy, I could get OpenShift for free. Yeah. I mean, I could, and I could cobble together and stitch together at 13, 15 dozens of different services and replicate, but I don't, I don't want that complexity. I want you to hide that complexity. I want, I'd rather spend money on your R and D than my engineering. So something's changing. It feels like >>You buy that. I totally buy that. I mean, you know, I, I, I'm gonna try to not make this sound like a marketing thing because it's not, not fair enough. Right. I mean, I'm engineer at heart, you know that, so, >>Okay. >>I really look to what we're trying to do is we're building a hybrid multi cloud. I mean that we, I look at us as a cloud provider spanning the hybrid multi all the way out to the edge world, but we don't have the data centers in the back. Like the cloud providers do in and by that is you're seeing our products being consumed more like cloud services because that's what our customers are demanding. Our, our products now can be bought out of the various marketplaces, et cetera. You're seeing different business models from us. So, uh, you're seeing, uh, committed spend, for example, like the cloud providers where a customer will buy so much up front and sort of just work it down. You're seeing different models on how they're consumed, consumption, based pricing. These, these are all things that came from the cloud providers and customers buying like that. >>They now want that across their entire environment. They don't wanna buy differently on premise or in one cloud and they don't wanna develop differently. They don't wanna operate differently. They don't wanna have to secure it differently. Security's the biggest thing with, with our, with our customers, because hybrid's powerful, but you no longer have the, you know, your security per perimeter, no longer the walls of your data center. You know, you're, you're responsible as a CIO. You're responsible for every app. Yeah. No matter where it's running, if that's the break in point, you're responsible for that. So that's why we've done things like, you know, we cried stack rocks. We've, we've built it into the container Kubernetes platform that spans those various footprints because you no longer can just do perimeter security because the perimeter is, is very, very, very large right now >>Diffuse. One of the thing on the multi-cloud hyper skills, I, I, red hat's never been defensive about public cloud. You, I think you look at the a hundred billion dollars a year in CapEx spend that's a gift to the industry. Not only the entire it industry, but, but the financial services companies and healthcare companies, they can build their own hybrid clouds. Metacloud super clouds taking advantage of that, but they still need that connective tissue. And that's where >>We products come in. We welcome our customers to go to, to the public cloud. Um, uh, look, it's it's. I said a long time ago, we said a long time it was gonna be a hybrid. Well, I should have said multi anybody said hybrid, then it's gonna be a hybrid world. It is. And it doesn't matter if it's a 20, 80, 80, 20, 40, 60, 60, 40. It's not gonna be a hundred percent anywhere. Yeah. And, and so in that, in that definition, it's a hybrid multi world. >>I wanna change the tune a little bit because I've been covering IBM for 40 years and seen a lot of acquisitions and see how they work. And usually it follows the same path. There's a commitment to leaving the acquire company alone. And then over time that fades, the company just becomes absorbed. Same thing with red hat. It seems like they're very much committed to, to, to leaving you alone. At least they said that upon the acquisition, have they followed through on that promise? >>I have to tell you IBM has followed through on every commitment they've made, made to us. I mean, I, I owe it, I owe a lot of it to Arvin. Um, he was the architect of the deal, right. Um, we've known each other for a long time. Um, he's a great guy. Um, he, uh, he, he believes in it. It's not, he's not just doing it that way because he thinks, um, something bad will happen if he doesn't, he's doing it that way. Cuz he believes in that our ecosystem is what made us. I mean, I mean, even here it's about the partners in the ecosystem. If you look at what made REL people think what made red hat as a company was support, right. Support's really important. Small piece of the value proposition life cycle supports certainly their life cycle a 10 year life cycle just came out of a, a, a customer conference asking about the life cycle and could we extend it to 15 years? You know? Um, the ecosystem is probably the most important part of, of, of, of the, of the overall value proposition. And Arvin knows in IBM knows that, you know, we have to be neutral to be able to do everything the same for all of our ecosystem partners. Some that are IBM's competitors, even. So, >>So we were noticing this morning, I mean, aside from a brief mention of power PC and the IBM logo during, at one point, there was no mention of IBM during the keynote sessions this morning. Is that intentional? Or is that just >>No, no, it it's, it's not intentional. I mean, I think that's part of, we have our strategy to drive and we're, we're driving our, our strategy. We, we, we IBM great partner. We look at them as a partner just as we do our, our many other partners and we won't, you know, we wouldn't, we wouldn't do something with our products, um, for I with IBM that we wouldn't offer to our, our entire ecosystem. >>But there is a difference now, right? I don't know these numbers. Exactly. You would know though, but, but pre 2019 acquisition red hat was just, I think north of 3 billion in revenue growing at maybe 12% a year. Something like that, AR I mean, we hear on the earnings calls, 21% growth. I think he's publicly said you're north of 5 billion or now I don't know how much of that consulting gets thrown in. IBM likes to, you know, IBM math, but still it's a much bigger business. And, and I wonder if you could share with us, obviously you can't dig into the numbers, but have you hired more people? I would imagine. I mean, sure. Like what's been different from that standpoint in terms of the accelerant to your >>Business. Yeah. We've been on the same hiring cycle percentage wise as, as we, we always were. I mean, I think the best way to characterize the relationship and where they've helped is, um, Arvin, Arvin will say, IBM can be opinionated on red hat, but not the other way around <laugh>. So, so what that, what that means is they had a lot of, they had, they had a container based Linux platform. Yeah, right, right. They, they had all their, they were their way of moving to the cloud was that when we came in, they actually stopped that. And they standardized on OpenShift across all of their products. We're now the vehicle that brings the blue software products to the hybrid cloud. We are that vehicle that does it. So I think that's, that's how, that's how they, they look about it. I mean, I know, I mean in IBM consulting, I know, I know they have a great relationship with Microsoft of course. >>Right. And so, so that's, that's how to really look at it. They they're opinionated on us where we not the other way around, but that, but they're a great partner. And even if we're at two separate companies, we'd do be doing all the same things we're doing with them. Now, what they do do for us can do for us is they open a lot of doors in many cases. I mean, IBM's been around for over a hundred years. So in many cases, they're in, in, in the C-suite, we, we may be in the C suite, but we may be one layer down, one, two layers down or something. They, they can, they help us get access. And I think that's been a, a part of the growth as well as is them talking into their, into, into their >>Constituents. Their consulting's one of the FA if not the fastest growing part of their business. So that's kind of the tip of the spear for application modernization, but enough on IBM you said something in your keynote. That was really interesting to me. You said, you, you, you didn't use the word hardware Renaissance, but that my interpretation was you're expecting the next, you know, several years to be a hardware Renaissance. We, we certainly have done relationships with arm. You mentioned Nvidia and Intel. Of course, you've had relationships with Intel for a long time. And we're seeing just the spate of new hardware developments, you know, does hardware matter? I'll ask you, >>Oh, oh, I mean the edge, as I said, you're gonna see hardware innovation out in the edge, software innovation as well. You know, the interesting part about the edge is that, you know, obviously remade red hat. What we did with REL was we did a lot of engineering work to make every hardware architecture when, when it was, when, when the world was just standalone servers, we made every hardware architecture just work out of the box. Right? And we did that in such, because with an open source development model. So embedded in our psyche, in our development processes is working upstream, bringing it downstream 10 years, support all of that kind of thing. So we lit up all that hardware. Now we go out to the edge, it's a whole new, different set of hardware innovation out at the edge. We know how to do that. >>We know how to, we know how to make hardware, innovation safe for the customer. And so we're bringing full circle and you have containers embedded in, in Linux and REL right now as well. So we're actually with the edge, bringing it all full circle back to what we've been doing for 20 plus years. Um, on, on the hardware side, even as a big part of the world, goes to containers and hybrid in, in multi-cloud. So that's why we're so excited about, about, about the edge, you know, opportunity here. That's, that's a big part of where hybrid's going. >>And when you guys talk about edge, I mean, I, I know a lot of companies will talk about edge in the context of your retail location. Okay. That's fine. That's cool. That's edge or telco that that's edge. But when you talk about, um, an in vehicle operating system, right. You know, that's to me the far edge, and that's where it gets really interesting, massive volumes, different architectures, both hardware and software. And a lot of the data may stay. Maybe it doesn't even get persisted. May maybe some comes back to the club, but that's a new >>Ballgame. Well, think about it, right? I mean, you, if you listen, I think you, right. My talk this morning, how many changes are made in the Linux kernel? Right? You're running in a car now, right? From a safety perspective. You wanna update that? I mean, look, Francis talked about it. You'll talk to Francis later as well. I mean, you know, how many, how many in, in your iPhone world Francis talked about this this morning, you know, they can, they can bring you a whole new world with software updates, the same in the car, but you have to do it in such a way that you still stay with the safety protocols. You're able to back things out, things like that. So it's open source, but getting raw upstream, open source and managing itself yourself, I just, I'm sorry. It takes a lot of experience to be able to be able to do those kinds of things. So it's secure, that's insecure. And that's what that's, what's exciting about it. You look at E the telco world look where the telco world came from in the telco world. It was a hardware stack from the hardware firmware operating system, every service, whether it was 9 1, 1 or 4, 1, 1 was its own stack. Yep. In the 4g, 3g, >>4g >>Virtualized. Now, now it's all software. Yeah. Now it's all software all the way out to the cell tower. So now, so, so now you see vendors out there, right? As an application, as a container based application, running out, running in the base of a cell tower, >>Cell tower is gonna be a little mini data >>Center. Yeah, exactly. Because we're in our time here asking quickly, because you've been at red hat a long time. You, you, you, uh, architected a lot of the reason they're successful is, is your responsibility. A lot of companies have tried to duplicate the red hat model, the, the service and support model. Nobody has succeeded. Do you think anybody ever will or will red hat continue to be a unicorn in that respect? >>No, I, I, I think, I think it will. I think open source is making it into all different parts of technology. Now I have to tell you the, the reason why we were able to do it is we stayed. We stayed true to our roots. We made a decision a long time ago that we weren't gonna put a line, say everything below the line was open and above the line was closed. Sometimes it's hard sometimes to get a differentiation with the competition, it can be hard, but we've stayed true to that. And I, to this day, I think that's the thing that's made us is never a confusion on if it's open or not. So that forces us to build our business models around that as well. But >>Do you have a differentiated strategy? Talk about that. What's your what's your differentiation >>Are, are, well, I mean, with the cloud, a differentiation is that common cloud platform across I differentiate strategy from an open source perspective is to, to sort make open source consumable. And, and it's even more important now because as Linux Linux is the base of everything, there's not enough skills out there. So even, even a container platform like open source op like OpenShift, could you build your own? Certainly. Could you keep it updated? Could you keep it updated without breaking all the applications on top? Do you have an ecosystem around it? It's all of those things. It was, it was the support, the, the, the hardening the 10 year to predictability the ecosystem. That was, that was, that is the secret. I mean, we even put the secret out as open. >>Yeah, <laugh> right. Free, like a puppy, as they say. All right, Paul, thanks so much for coming back in the cubes. Great to see you face to face. Nice to see you guys get it. All right. Keep it right there. Dave Valante for Paul Gill, you're watching the cubes coverage of red hat summit, 2022 from Boston. Be right back.

welcome back to the seaport in boston massachusetts with cities crazy with bruins and celtics talk but we're here we're talking red hat linux open shift ansible and ashesh badani is here he's the senior vice president and the head of products at red hat fresh off the keynotes had amex up in the state of great to see you face to face amazing that we're here now after two years of of the isolation economy welcome back thank you great to see you again as well and you as well paul yeah so no shortage of announcements uh from red hat this week paul wrote a piece on siliconangle.com i got my yellow highlights i've been through all the announcements which is your favorite baby hard for me to choose hard for me to choose um i'll talk about real nine right well nine's exciting um and in a weird way it's exciting because it's boring right because it's consistent three years ago we committed to releasing a major well uh every three years right so customers partners users can plan for it so we released the latest version of rel in between we've been delivering releases every six months as well minor releases a lot of capabilities that are bundled in around security automation edge management and then rel is also the foundation of the work we announced with gm with the in-vehicle operating system so you know that's extremely exciting news for us as well and the collaboration that we're doing with them and then a whole host of other announcements around you know cloud services work around devsecops and so on so yeah a lot of news a lot of announcements i would say rel nine and the work with gm probably you know comes right up to the top i wanted to get to one aspect of the rail 9 announcement that is the the rose centos streams in that development now in december i think it was red hat discontinued development or support for for centos and moved to central streams i'm still not clear what the difference is between the two can you clarify that i think we go into a situation especially with with many customers many partners as well that you know didn't sort of quite exactly uh get a sense of you know where centos was from a life cycle perspective so was it upstream to rel was it downstream to rel what's the life cycle for itself as well and then there became some sort of you know implied notions around what that looked like and so what we decided was to say well we'll make a really clean break and we'll say centos stream is the upstream for enterprise linux from day one itself partners uh you know software partners hardware partners can collaborate with us to develop rel and then take it all the way through life cycle right so now it becomes a true upstream a true place for development for us and then rel essentially comes uh out as a series of releases based on the work that we do in a fast-moving center-os environment but wasn't centos essentially that upstream uh development environment to begin with what's the difference between centos stream yeah it wasn't wasn't um it wasn't quite upstream it was actually a little bit downstream yeah it was kind of bi-directional yeah and yeah and so then you know that sort of became an implied life cycle to it when there really wasn't one but it was just became one because of some usage and adoption and so now this really clarifies the relationship between the two we've heard feedback for example from software partners users saying hey what do i do for development because i used you know centervis in the past we're like yup we have real for developers available we have rel for small teams available we have rel available for non-profit organizations up and so we've made rail now available in various form factors for the needs that folks had and they were perhaps using centos for because there was no such alternative or rel history so language so now it's this clarity so that's really the key point there so language matters a lot in the technology business we've seen it over the years the industry coalesces around you know terminology whether it was the pc era everything was pc this pc that the internet era and and certainly the cloud we we learned a lot of language from the likes of you know aws two pizza teams and working backwards and things like that became common commonplace hybrid and multi-cloud are kind of the the parlance of the day you guys use hybrid you and i have talked about this i feel like there's something new coming i don't think my term of super cloud is the right necessary terminology but it signifies something different and i feel like your announcements point to that within your hybrid umbrella point being so much talk about the edge and it's we heard paul cormier talk about new hardware architectures and you're seeing that at the edge you know what you're doing with the in-vehicle operating system these are new the cloud isn't just a a bunch of remote services in the cloud anymore it's on-prem it's a cloud it's cross-clouds it's now going out to the edge it's something new and different i think hybrid is your sort of term for that but it feels like it's transcending hybrid are your thoughts you know really really great question actually since you and i talked dave i've been spending some time you know sort of noodling just over that right and you're right right there's probably some terminology something sort of you know that will get developed you know either by us or you know in collaboration with the industry you know where we sort of almost have the connection almost like a meta cloud right that we're sort of working our way towards because there's if you will you know the cloud right so you know on premise you know virtualized uh bare metal by the way you know increasingly interesting and important you know we do a lot of work with nvidia folks want to run specific workloads there we announced support for arm right another now popular architecture especially as we go out to the edge so obviously there's private cloud public cloud then the edge becomes a continuum now you know on that process we actually have a major uh uh shipping company so uh a cruise lines that's talking about using openshift on cruise lines right so you know that's the edge right last year we had verizon talking about you know 5g and you know ran in the next generation there to then that's the edge when we talk to retail the store front's the edge right you talk to a bank you know the bank environments here so everyone's got a different kind of definition of edge we're working with them and then when we you know announce this collaboration with gm right now the edge there becomes the automobile so if you think of this as a continuum right you know bare metal private cloud public cloud take it out to the edge now we're sort of almost you know living in a world of you know a little bit of abstractions and making sure that we are focused on where uh data is being generated and then how can we help ensure that we're providing a consistent experience regardless of you know where meta meta cloud because i can work in nfts i can work a little bit we're going to get through this whole thing without saying metaverse i was hoping i do want to ask you about about the edge and the proliferation of hardware platforms paul comey mentioned this during the keynote today hardware is becoming important yeah there's a lot of people building hardware it's in development now for areas like uh like intelligent devices and ai how does this influence your development priorities you have all these different platforms that you need to support yeah so um we think about that a lot mostly because we have engagements with so many partners hardware right so obviously there's more traditional partners i'd say like the dell and the hpes that we work with we've historically worked with them also working with them in in newer areas uh with regard to appliances that are being developed um and then the work that we do with partners like nvidia or new architectures like arm and so our perspective is this will be uh use case driven more than anything else right so there are certain environments right where you have arm-based devices other environments where you've got specific workloads that can take advantage of being built on gpus that we'll see increasingly being used especially to address that problem and then provide a solution towards that so our belief has always been look we're going to give you a consistent platform a consistent abstraction across all these you know pieces of hardware um and so you mr miss customer make the best choice for yourself a couple other areas we have to hit on i want to talk about cloud services we've got to talk about security leave time to get there but why the push to cloud services what's driving that it's actually customers they're driving right so we have um customers consistently been asking us say you know love what you give us right want to make sure that's available to us when we consume in the cloud so we've made rel available for example on demand right you can consume this directly via public cloud consoles we are now making available via marketplaces uh talked about ansible available as a managed service on azure openshift of course available as a managed service in multiple clouds um all of this also is because you know we've got customers who've got these uh committed spends that they have you know with cloud providers they want to make sure that the environments that they're using are also counting towards that at the same time give them flexibility give them the choice right if in certain situations they want to run in the data center great we have that solution for them other cases they want to procure from the cloud and run it there we're happy to support them there as well let's talk about security because you have a lot of announcements like security everywhere yeah um and then some specific announcements as well i i always think about these days in the context of the solar wind supply chain hack would this have you know how would this have affected it but tell us about what's going on in security your philosophy there and the announcements that you guys made so our secure announcements actually span our entire portfolio yeah right and and that's not an accident right that's by design because you know we've really uh been thinking and emphasizing you know how we ensure that security profile is raised for users both from a malicious perspective and also helping accidental issues right so so both matters so one huge amounts of open source software you know out of the world you know and then estimates are you know one in ten right has some kind of security vulnerability um in place a massive amount of change in where software is being developed right so rate of change for example in kubernetes is dramatic right much more than even than linux right entire parts of kubernetes get rewritten over over a three-year period of time so as you introduce all that right being able to think for example about you know what's known as shift left security or devsec ops right how do we make sure we move security closer to where development is actually done how do we ensure we give you a pattern so you know we introduced a software supply chain pattern uh via openshift delivers complete stack of code that you know you can go off and run that follows best practices uh including for example for developers you know with git ops and support on the pipelines front a whole bunch of security capabilities in rel um a new image integrity measurement architecture which allows for a better ability to see in a post install environment what the integrity of the packages are signing technology they're incorporating open shift as well as an ansible so it's it's a long long list of cables and features and then also more and more defaults that we're putting in place that make it easier for example for someone not to hurt themselves accidentally on security front i noticed that uh this today's batch of announcements included support within openshift pipelines for sigstor which is an open source project that was birthed actually at red hat right uh we haven't heard a whole lot about it how important is zig store to to you know your future product direction yeah so look i i think of that you know as you know work that's you know being done out of our cto's office and obviously security is a big focus area for them um six store's great example of saying look how can we verify content that's in uh containers make sure it's you know digitally signed that's appropriate uh to be deployed across a bunch of environments but that thinking isn't maybe unique uh for us uh in the container side mostly because we have you know two decades or more of thinking about that on the rel side and so fundamentally containers are being built on linux right so a lot of the lessons that we've learned a lot of the expertise that we've built over the years in linux now we're starting to you know use that same expertise trying to apply it to containers and i'm my guess is increasingly we're going to see more of the need for that you know into the edge as well i i i picked up on that too let me ask a follow-up question on sigstor so if i'm a developer and i and i use that capability it it ensures the provenance of that code is it immutable the the signature uh and the reason i ask is because again i think of everything in the context of the solar winds where they were putting code into the the supply chain and then removing it to see what happened and see how people reacted and it's just a really scary environment yeah the hardest part you know in in these environments is actually the behavior change so what's an example of that um packages built verified you know by red hat when it went from red hat to the actual user have we been able to make sure we verify the integrity of all of those when they were put into use um and unless we have behavior that you know make sure that we do that then we find ourselves in trouble in the earliest days of open shift uh we used to get knocked a lot by by developers because i said hey this platform's really hard to use we investigate hey look why is that happening so by default we didn't allow for root access you know and so someone's using you know the openshift platform they're like oh my gosh i can't use it right i'm so used to having root access we're like no that's actually sealed by default because that's not a good security best practice now over a period of time when we you know randomly enough times explained that enough times now behavior changes like yeah that makes sense now right so even just kind of you know there's behaviors the more that we can do for example in in you know the shift left which is one of the reasons by the way why we bought uh sac rocks a year right right for declarative security contain native security so threat detection network segmentation uh watching intrusions you know malicious behavior is something that now we can you know essentially make native into uh development itself all right escape key talk futures a little bit so i went downstairs to the expert you know asked the experts and there was this awesome demo i don't know if you've seen it of um it's like a design thinking booth with what happened how you build an application i think they were using the who one of their apps um during covet and it's you know shows the the granularity of the the stack and the development pipeline and all the steps that have to take place and it strikes me of something we've talked about so you've got this application development stack if you will and the database is there to support that and then over here you've got this analytics stack and it's separate and we always talk about injecting more ai into apps more data into apps but there's separate stacks do you see a day where those two stacks can come together and if not how do we inject more data and ai into apps what are your thoughts on that so great that's another area we've talked about dave in the past right um so we definitely agree with that right and and what final shape it takes you know i think we've got some ideas around that what we started doing is starting to pick up specific areas where we can start saying let's go and see what kind of usage we get from customers around it so for example we have openshift data science which is basically a way for us to talk about ml ops right and you know how can we have a platform that allows for different models that you can use we can uh test and train data different frameworks that you can then deploy in an environment of your choice right and we run that uh for you up and assist you in in uh making sure that you're able to take the next steps you want with with your machine learning algorithms um there's work that we've uh introduced at summit around databases service so essentially our uh a cloud service that allows for deep as an easy way for customers to access either mongodb or or cockroach in a cloud native fashion and all of these things that we're sort of you know experimenting with is to be able to say look how do we sort of bring the world's closer together right off database of data of analytics with a core platform and a core stack because again right this will become part of you know one continuum that we're going to work with it's not i'd like your continuum that's that's i think really instructive it's not a technical barrier is what i'm hearing it's maybe organizational mindset i can i should be able to insert a column into my my my application you know development pipeline and insert the data i mean kafka tensorflow in there there's no technical reason i can't can't do that it's just we've created these sort of separate stovepipe organizations 100 right right so they're different teams right you've got the platform team or the ops team and you're a separate dev team there's a separate data team there's a separate storage team and each of them will work you know slightly differently independently right so the question then is i mean that's sort of how devops came along then you're like oh wait a minute yeah don't forget security and now we're at devsecops right so the more of that that we can kind of bring together i think the more convergence that we'll see when i think about the in-vehicle os i see the the that is a great use case for real-time ai inferencing streaming data i wanted to ask you that about that real quickly because at the very you know just before the conference began we got an announcement about gm but your partnership with gm it seems like this came together very quickly why is it so important for red hat this is a whole new category of application that you're going to be working on yeah so we've been working with gm not publicly for a while now um and it was very clear that look you know gm believes this is the future right you know electric vehicles into autonomous driving and we're very keen to say we believe that a lot of attributes that we've got in rel that we can bring to bear in a different form factor to assist with the different needs that exist in this industry so one it's interesting for us because we believe that's a use case that you know we can add value to um but it's also the future of automotive right so the opportunity to be able to say look we can get open source technology we can collaborate out with the community to fundamentally help transform that industry uh towards where it wants to go you know that that's just the passion that we have that you know is what wakes us up every morning you're opening into that yeah thank you for coming on the cube really appreciate your time and your insights and uh have a great rest of rest of the event thank you for having me metacloud it's a thing it's a thing right it's it's it's kind of there we're gonna we're gonna see it emerge over the next decade all right you're watching the cube's coverage of red hat summit 2022 from boston keep it right there be right back you

(digital 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. >> The storage business as we know it has changed forever. On-prem storage was once a virtually unlimited and untapped bastion of innovation, VC funding and lucrative exits. Today it's a shadow of its former self and the glory days of storage will not return. Hello everyone, and welcome to this week's Wikibon CUBE Insights Powered by ETR. In this breaking analysis, we'll lay out our premise for what's happening in the storage industry, and share some fresh insights from our ETR partners, and data that supports our thinking. We've had three decades of tectonic shifts in the storage business. From the simplified history of this industry shows us there've been five major waves of innovation spanning five decades. The dominant industry model has evolved from what was first the mainframe centric vertically integrated business, but of course by IBM and it became a disintegrated business that saw between like 70 or 80 Winchester disk drive companies that rose and then fell. They served a booming PC industry in this way it was led by the likes of Seagate. Now Seagate supplied the emergence of an intelligent controller based external disc array business that drove huge margins for functions that while lucrative was far cheaper than captive storage from system vendors, this era of course was led by EMC and NetApp. And then this business was disrupted by a flash and software defined model that was led by Pure Storage and also VMware. Now the future of storage is being defined by cloud and intelligent data management is being led by AWS and a three letter company that we'll just call TBD, otherwise known as Jump Ball Incorporated. Now, let's get into it here, the impact of AWS cannot be overstated now while legacy storage players, they're sick and tired of talking about the cloud, the reality cannot be ignored. The cloud has been the most disruptive force in storage over the past 10 years, and we've reported on the spending impact extensively. But cloud is not the only factor pressuring the on-prem storage business, flash has killed what we call performance by spindles. In other words, the practice of adding more disk drives to keep performance from tanking. So much flash has been injected into the data center that that no longer is required. But now as you drill down into the cloud, AWS has been by far the most significant factor in our view. Lots of people talked about object storage before AWS, but there sure wasn't much spending going on, S3 changed that. AWS is getting much more aggressive about expanding its storage portfolio and its offerings. S3 came out in 2006 and it was the very first AWS service and then Elastic Block Service EBS came out a couple of years later, nobody really paid much attention. Well last fall at storage day, we saw AWS announce a number of services, many fire-related and this year we saw four new announcements of Amazon at re:Invent. We think AWS' storage revenue will surpass 8 billion this year and could be as high as 10 billion. There's not much data out there, but this would mean that AWS' storage biz is larger than that of a NetApp, which means AWS is larger than every traditional storage player with the exception of Dell. Here's a little glimpse of what's coming at the legacy storage business. It's a clip of the vice-president of AWS storage, her name is Mahlon Thompson Bukovec, watch this. Okay now, you may say Dave, what the heck does that have to do with anything? Yeah, I don't know, but as an older white guy, that's been in this business for awhile, I just think it's badass that this woman boxes and runs a business that we think is approaching $10 billion. Now let's take a quick look at the storage announcements AWS made at re:Invent. The company made four announcements this year, let me try to be brief, the first is EBS io2 Block Express Volumes, got to love the names. AWS was claims this is the first storage area network or sand for the cloud and it offers up to 256,000 IOPS and 4,000 megabytes per second throughput and 64 terabytes of capacity. Hey, sounds pretty impressive right, Well let's dig in a little bit okay, first of all, this is not the first sand in the cloud, at least in my view there may be others but Pure Storage announced cloud block store in 2019 at its annual accelerate customer conference and it's pretty comparable here. Maybe not so much in the speeds and feeds, but the concept of better block storage in the cloud with higher availability. Now, as you may also be saying, what's the big deal? The performance come on, we can smoke that we're on-prem vendor We can bury that. Compared to what we do, AWS' announcement is really not that impressive okay, let me give you a point of comparison there's a startup out there called VAST Data. Just there for you and closure with bundled storage and compute can do 400,000 IOPS and 40,000 megabytes per second and that can be scaled, so yeah, I get it. And AWS also announced that io2 two was priced at 20% less than previous generation volumes, which you might say is also no big deal and I would agree 20% is not as aggressive as the average price decline per gigabyte of any storage technology. AWS loves to make a big deal about its price declines, it's essentially following the industry trends but the point is that this feature will be great for a lot of workloads and it's fully integrated with AWS services meaning for example, it will be very convenient for AWS customers to invoke this capability for example Aurora and other AWS databases through its RDS service, just another easy button for developers to push. This is specially important as we see AWS rapidly expanding its machine learning in AI capabilities with SageMaker, it's embedding ML into things like Redshift and driving analytics, so integration is very key for its customers. Now, is Amazon retail going to run its business on io2 volumes? I doubt it. I believe they're running on Oracle and they need much better performance, but this is a mainstream service for the EBS masses to tap. Now, the other notable announcement was EBS Gp3 volumes. This is essentially a service that lets let you programmatically set SLAs for IOPS and throughput independently without needing to add additional storage. Again, you may be saying things like, well atleast I remember when SolidFire let me do this several years ago and gave me more than 3000 IOPS and 125 megabytes per a second performance, but look, this is great for mainstream customers that want more consistent and predictable performance and that want to set some kind of threshold or floor and it's integrated again into the AWS stack. Two other announcements were made, one that automatically tiers data to colder storage tiers and a replication service. On the former, data migrates to tier two after 90 days of inaccess and tier three, after 180 days. AWS remember, they hired a bunch of folks out of EMC years ago and they put them up in the Boston Seaport area, so they've acquired lots of expertise in a lot of different areas I'm not sure if tiering came out of that group but look, this stuff is not rocket science, but it saves customers money. So these are tried and true techniques that AWS is applying but the important thing is it's in the cloud. Now for sure we'd like to see more policy options than say for example, a fixed 90 day or 180 day policy and more importantly we'd like to see intelligent tiering where the machine is smart enough to elevate and promote certain datasets when they're needed for instance, at the end of a quarter for comparison purposes or at the end of the year, but as NFL Hall of Fame Coach Hank Stram would have said, AWS is matriculating the ball down the field. Okay, let's look at some of the data that supports what we're saying here in our premise today. This chart shows spending across the ETR taxonomy. It depicts the net score or spending velocity for different sectors. We've highlighted storage, now don't put too much weight on the January data because the survey was just launched, but you can see storage continues to be a back burner item relative to some other spending priorities. Now as I've reported, CIOs are really focused on cloud, containers, container orchestration, automation, productivity and other key areas like security. Now let's take a look at some of the financial data from the storage crowd. This chart shows data for eight leading names in storage and we put storage in quotes because as we said earlier, the market is shifting and for sure companies like Cohesity and Rubrik, they're not positioning as storage players in fact, that's the last thing they want to do. Rather they're category creators around data management or intelligent data management but their inadjacency to storage, they're partnering with all the primary storage companies and they're in the ETR taxonomy. Okay, so as you can see, we're showing the year over year, quarterly revenue growth for the leading storage companies. NetApp is a big winner, they're growing at a whopping 2%. They beat expectations, but expectations were way down so you can see in the right most column upper right, we've added the ETR net score from October and net score of 10% says that if you ask customers, are you spending more or less with a company, there are 10% of the customers that are essentially spending more than are spending less, get into that a little further later. For comparison, a company like Snowflake, it has a net score approaching 70% Pure Storage used to be that high several years ago or high sixties anyway. So 10% is in the red zone and yet NetApp, is the big winner this quarter. Now Nutanix isn't really again a storage company, but they're an adjacency and they sell storage and like many of these companies, it's transitioning to a subscription pricing model, so that puts pressure on the income statement, that's why they went out and did a deal with Bain, Bain put in $750 million to help Bridge that transition so that's kind of an interesting move. Every company in this chart is moving to an annual recurring revenue model and that as a service approach is going to be the norm by the end of the decade. HPE's doing it with GreenLake, Dell has announced Apex, virtually every company is headed in this direction. Now speaking of HPE, it's Nimble business that has momentum, but other parts of the storage portfolio are quite a bit softer. Dell continues to see pressure on its storage business although VxRail is a bright spot. Everybody's got a bright spot, everybody's got new stuff that's growing much faster than the old stuff, the problem is the old stuff is much much bigger than the new stuff. IBM's mainframe storage cycle, well that's seems to have run its course, they had been growing for the last several quarters that looks like it's over. And so very very cyclical businesses here now as you can see, The data protection data management companies, they are showing spending momentum but they're not public so we don't have revenue data. But you got to wonder with all the money these guys have raised and the red hot IPO and tech markets, why haven't these guys gone public? The answer has to be that they're either not ready or maybe their a numbers weren't where they want them to be, maybe they're not predictable enough, maybe they don't have their operational act together or maybe they need to you get that in order, some combination of those factors is likely. They'll tell you, they'll give other answers if you ask them, but if they had their stuff together they'd be going out right now. Now here's another look at the spending data in terms of net score, which is again spending velocity. The ETR here is measuring the percent of respondents that are adopting new, spending more, spending flat, spending less or retiring the platform. So net score is adoptions, which is the lime green plus the spending more, which is the forest green. Add those two and then subtract spending less, which is the pink and then leaving the platform, which is the bright red, what's left over is net score. So, let's look at the picture here, Cohesity leads all players in the storage taxonomy, the ETR storage taxonomy, again they don't position that way, but that's the way the customers are answering. They've got 55% net score which is really solid and you can see the data in the upper right-hand corner, it's followed by Nutanix. Now they're really not again in the scope of Pure play storage play but speaking of Pure, its net score has come down from its high of 73% in January, 2016. It's not going to climb back up there, but it's going to be interesting to see if Pure net scorecard rebound in a post COVID world. We're also watching what Pure does in terms of unifying file and object and how it's fairing in cloud and what it does with the Portworx acquisition which is really designed to bring forth a new programming model. Now, Dell is doing fine with VxRail, but VSAN is well off its net score highs which we're in the 60% plus range a couple of years ago, VSAN is definitely been a factor from VMware, but again that's come off its highs, HPE with Nimble still has some room to improve, I think it actually will I think that these figures that we're showing here they're are somewhat depressed by the COVID factor, I expect Nimble is going to bounce back in future surveys. Dell and NetApp are the big leaders in terms of presence or market share in the data other than VMware, 'cause VMware has a lot of instances, it's software defined that's why they're so prominent. And with VMware's large share you'd expect them to have net scores that are tepid and you can see a similar pattern with IBM. So Dell, NetApp, tepid net scores as is IBM because of their large market share VMware, kind of a newer entry into the play and so doing pretty well there from a net score standpoint. Now Commvault like Cohesity and Rubrik is really around intelligent data management, trying to go beyond backup into business recovery, data protection, DevOps, bringing that analytics, bringing that to the cloud, we didn't put Veeam in here and we probably should have. They had pre-COVID net scores well in to the thirties and they have a steadily increasing share of the market, so we expect good things from Veeam going forward. They were acquired earlier this year by Insight, capital private equity firm. So big changes there as well, that was their kind of near-term exit maybe more to come. But look, it's all relative, this is a large and mature market that is moving to the cloud and moving to other adjacencies. And the core is still primary storage, that's the main supreme prerequisite and everything else flows from there, data protection, replication, everything else. This chart gives you another view of the competitive landscape, it's that classic XY chart it plots net score in the vertical axis and market share on the horizontal axis, market share remember is a measure of presence in the dataset. Now think about this from the CIO's perspective, they have their on-prem estate, got all this infrastructure and they're putting a brick wall around their core systems. And what do they want out of storage for that class of workload? They want it to perform consistently, they want it to be efficient and they want it to be cost-effective, so what are they going to do? they're going to consolidate, They're going to consolidate the number of vendors, they're going to consolidate the storage, they're going to minimize complexity, yeah, they're going to worry about the blast radius, but there's ways to architect around that. The last thing they want to worry about is managing a zillion storage vendors this business is consolidating, it has been for some time, we've seen the number of independent storage players that are going public as consolidated over the years, and it's going to continue. so on-prem storage arrays are not giving CIOs the innovation and strategic advantage back when things like storage virtualization, space efficient snapshots, data de-duplication and other storage services were worth maybe taking a flyer on a feature product like for example, a 3PAR or even a Data Domain. Now flash gave the CIOs more headroom and better performance and so as I said earlier, they're not just buying spindles to increase performance, so as more and more work gets pushed to the cloud, you're seeing a bunkering in on these large scale mission-critical workloads. As you saw earlier, the legacy storage market is consolidating and has been for a while as I just said, it's essentially becoming a managed decline business where RnD is going to increasingly get squeezed and go to other areas, both from the vendor community and on the buy-side where they're investing on things like cloud, containers and in building new layers in their business and of course the DX, the Digital Transformation. I mentioned VAST Data before, it is a company that's growing and another company that's growing is Infinidat and these guys are traditional storage on-prem models they don't bristle If I say traditional they're nexgen if you will but they don't own a cloud, so they were selling to the data center. Now Infinidat is focused on petabyte scale and as they say, they're growing revenues, they're having success consolidating storage that thing that I just talked about. Ironically, these are two Israeli founder based companies that are growing and you saw earlier, this is a share shift the market is not growing overall the part of that's COVID, but if you exclude cloud, the market is under pressure. Now these two companies that I'm mentioning, they're kind of the exception to the rule here, they're tiny in the grand scheme of things, they're really not going to shift the market and their end game is to get acquired so they can still share, but they're not going to reverse these trends. And every one on this chart, every on-prem player has to have a cloud strategy where they connect into the cloud, where they take advantage of native cloud services and they help extend their respective install bases into the cloud, including having a capability that is physically proximate to the cloud with a colo like an Equinix or some other approach. Now, for example at re:Invent, we saw that AWS has hybrid strategy, we saw that evolving. AWS is trying to bring AWS to the edge and they treat the data center as just another edge note, so outposts and smaller versions of outposts and things like local zones are all part of bringing AWS to the edge. And we saw a few companies Pure, Infinidant, Veeam come to mind that are connecting to outpost. They saw the Qumulo was in there, Clumio, Commvault, WekaIO is also in there and I'm sure I'm missing some so, DM me, email me, yell at me, I'm sorry I forgot you but you get the point. These companies that are selling on-prem are connecting to the cloud, they're forced to connect to the cloud much in the same way as they were forced to join the VMware ecosystem and try to add value, try to keep moving fast. So, that's what's going on here, what's the prognosis for storage in the coming year? Well, where've of all the good times gone? Look, we would never bet against data but the days of selling storage controllers that masks the deficiencies of spinning disc or add embedded hardware functions or easily picking off a legacy install base with flash, well, those days are gone. Repatriation, it ain't happening it's maybe tiny little pockets. CIOs are rationalizing their on-premises portfolios so they can invest in the cloud, AI, machine learning, machine intelligence, automation and they're re-skilling their teams. Low latency high bandwidth workloads with minimal jitter, that's the sweet spot for on-prem it's becoming the mainframe of storage. CIOs are also developing a cloud first strategy yes, the world is hybrid but what does that mean to CIOs? It means you're going to have some work in the cloud and some work on-prem, there's a hybrid We've got both. Everything that can go to the cloud, will go to the cloud, in our opinion and everything that can't or shouldn't won't. Yes, people will make mistakes and they'll "repatriate" but generally that's the trend. And the CIOs they're building an abstraction layer to connect workloads from an observability and manageability standpoint so they can maintain control and manage lock-in risk, they have options. Everything that doesn't go to the cloud will likely have some type of hybridicity to it, the reverse won't likely be the case. For vendors, cloud strategies involve supporting your install basis migration to the cloud, that's where they're going, that's where they want to go, they want your help there's business to be made there so enabling low latency hybrids in accommodating subscription models, well, that's a whole another topic, but that's the trend that we see and you rethink the business that you're in, for instance, data management and developing an edge strategy that recognizes that edge workloads are going to require new architecture and that's more efficient than what we've seen built around general purpose systems, and wow, that's a topic for another day. You're seeing this whole as a service model really reshape the entire cultures in the way in which the on-prem vendors are operating no longer is it selling a box that has dramatically marked up controllers and disc drives, it's really thinking about services that could be invoked in the cloud. Now remember, these episodes are all available as podcasts, wherever you listen, just search Breaking Analysis podcasts and please subscribe, I'd appreciate that checkout etr.plus for all the survey action. We also publish a full report every week on wikibon.com and siliconangle.com. A lot of ways to get in touch. You can email me at david.vellante@siliconangle.com. you could DM me @dvellante on Twitter, comment on our LinkedIn posts, I always appreciate that. This is Dave Vellante for theCUBE Insights Powered by ETR. Thanks for watching everyone stay safe and we'll see you next time. (upbeat music)

>>from around the globe. It's the Cube presenting innovation for good, brought to you by on shape. >>Hello, everyone, and welcome to Innovation for Good Program, hosted by the Cuban. Brought to You by on Shape, which is a PTC company. My name is Dave Valentin. I'm coming to you from our studios outside of Boston. I'll be directing the conversations today. It's a very exciting, all live program. We're gonna look at how product innovation has evolved and where it's going and how engineers, entrepreneurs and educators are applying cutting edge, cutting edge product development techniques and technology to change our world. You know, the pandemic is, of course, profoundly impacted society and altered how individuals and organizations they're gonna be thinking about an approaching the coming decade. Leading technologists, engineers, product developers and educators have responded to the new challenges that we're facing from creating lifesaving products to helping students learn from home toe how to apply the latest product development techniques and solve the world's hardest problems. And in this program, you'll hear from some of the world's leading experts and practitioners on how product development and continuous innovation has evolved, how it's being applied toe positive positively affect society and importantly where it's going in the coming decades. So let's get started with our first session fueling Tech for good. And with me is John Hirschbeck, who is the president of the Suffers, a service division of PTC, which acquired on shape just over a year ago, where John was the CEO and co founder, and Dana Grayson is here. She is the co founder and general partner at Construct Capital, a new venture capital firm. Folks, welcome to the program. Thanks so much for coming on. >>Great to be here, Dave. >>All right, John. >>You're very welcome. Dana. Look, John, let's get into it for first Belated congratulations on the acquisition of Von Shape. That was an awesome seven year journey for your company. Tell our audience a little bit about the story of on shape, but take us back to Day zero. Why did you and your co founders start on shape? Well, >>actually, start before on shaping the You know, David, I've been in this business for almost 40 years. The business of building software tools for product developers and I had been part of some previous products in the industry and companies that had been in their era. Big changes in this market and about, you know, a little Before founding on shape, we started to see the problems product development teams were having with the traditional tools of that era years ago, and we saw the opportunity presented by Cloud Web and Mobile Technology. And we said, Hey, we could use Cloud Web and Mobile to solve the problems of product developers make their Their business is run better. But we have to build an entirely new system, an entirely new company, to do it. And that's what on shapes about. >>Well, so notwithstanding the challenges of co vid and difficulties this year, how is the first year been as, Ah, division of PTC for you guys? How's business? Anything you can share with us? >>Yeah, our first year of PTC has been awesome. It's been, you know, when you get acquired, Dave, you never You know, you have great optimism, but you never know what life will really be like. It's sort of like getting married or something, you know, until you're really doing it, you don't know. And so I'm happy to say that one year into our acquisition, um, PTC on shape is thriving. It's worked out better than I could have imagined a year ago. Along always, I mean sales are up. In Q four, our new sales rate grew 80% vs Excuse me, our fiscal Q four Q three. In the calendar year, it grew 80% compared to the year before. Our educational uses skyrocketing with around 400% growth, most recently year to year of students and teachers and co vid. And we've launched a major cloud platform using the core of on shape technology called Atlas. So, um, just tons of exciting things going on a TTC. >>That's awesome. But thank you for sharing some of those metrics. And of course, you're very humble individual. You know, people should know a little bit more about you mentioned, you know, we founded Solid Works, co founded Solid where I actually found it solid works. You had a great exit in the in the late nineties. But what I really appreciate is, you know, you're an entrepreneur. You've got a passion for the babies that you you helped birth. You stayed with the salt systems for a number of years. The company that quiet, solid works well over a decade. And and, of course, you and I have talked about how you participated in the the M I T. Blackjack team. You know, back in the day, a zai say you're very understated, for somebody was so accomplished. Well, >>that's kind of you, but I tend to I tend Thio always keep my eye more on what's ahead. You know what's next, then? And you know, I look back Sure to enjoy it and learn from it about what I can put to work making new memories, making new successes. >>Love it. Okay, let's bring Dana into the conversation. Hello, Dana. You look you're a fairly early investor in in on shape when you were with any A And and I think it was like it was a serious B, but it was very right close after the A raise. And and you were and still are a big believer in industrial transformation. So take us back. What did you see about on shape back then? That excited you. >>Thanks. Thanks for that. Yeah. I was lucky to be a early investment in shape. You know, the things that actually attracted me. Don shape were largely around John and, uh, the team. They're really setting out to do something, as John says humbly, something totally new, but really building off of their background was a large part of it. Um, but, you know, I was really intrigued by the design collaboration side of the product. Um, I would say that's frankly what originally attracted me to it. What kept me in the room, you know, in terms of the industrial world was seeing just if you start with collaboration around design what that does to the overall industrial product lifecycle accelerating manufacturing just, you know, modernizing all the manufacturing, just starting with design. So I'm really thankful to the on shape guys, because it was one of the first investments I've made that turned me on to the whole sector. And while just such a great pleasure to work with with John and the whole team there. Now see what they're doing inside PTC. >>And you just launched construct capital this year, right in the middle of a pandemic and which is awesome. I love it. And you're focused on early stage investing. Maybe tell us a little bit about construct capital. What your investment thesis is and you know, one of the big waves that you're hoping to ride. >>Sure, it construct it is literally lifting out of any what I was doing there. Um uh, for on shape, I went on to invest in companies such as desktop metal and Tulip, to name a couple of them form labs, another one in and around the manufacturing space. But our thesis that construct is broader than just, you know, manufacturing and industrial. It really incorporates all of what we'd call foundational industries that have let yet to be fully tech enabled or digitized. Manufacturing is a big piece of it. Supply chain, logistics, transportation of mobility or not, or other big pieces of it. And together they really drive, you know, half of the GDP in the US and have been very under invested. And frankly, they haven't attracted really great founders like they're on in droves. And I think that's going to change. We're seeing, um, entrepreneurs coming out of the tech world orthe Agnelli into these industries and then bringing them back into the tech world, which is which is something that needs to happen. So John and team were certainly early pioneers, and I think, you know, frankly, obviously, that voting with my feet that the next set, a really strong companies are going to come out of the space over the next decade. >>I think it's a huge opportunity to digitize the sort of traditionally non digital organizations. But Dana, you focused. I think it's it's accurate to say you're focused on even Mawr early stage investing now. And I want to understand why you feel it's important to be early. I mean, it's obviously riskier and reward e er, but what do you look for in companies and and founders like John >>Mhm, Um, you know, I think they're different styles of investing all the way up to public market investing. I've always been early stage investors, so I like to work with founders and teams when they're, you know, just starting out. Um, I happened to also think that we were just really early in the whole digital transformation of this world. You know, John and team have been, you know, back from solid works, etcetera around the space for a long time. But again, the downstream impact of what they're doing really changes the whole industry. And and so we're pretty early and in digitally transforming that market. Um, so that's another reason why I wanna invest early now, because I do really firmly believe that the next set of strong companies and strong returns for my own investors will be in the spaces. Um, you know, what I look for in Founders are people that really see the world in a different way. And, you know, sometimes some people think of founders or entrepreneurs is being very risk seeking. You know, if you asked John probably and another successful entrepreneurs, they would call themselves sort of risk averse, because by the time they start the company, they really have isolated all the risk out of it and think that they have given their expertise or what they're seeing their just so compelled to go change something, eh? So I look for that type of attitude experience a Z. You can also tell from John. He's fairly humble. So humility and just focus is also really important. Um, that there's a That's a lot of it. Frankly, >>Excellent. Thank you, John. You got such a rich history in the space. Uh, and one of you could sort of connect the dots over time. I mean, when you look back, what were the major forces that you saw in the market in in the early days? Particularly days of on shape on? And how is that evolved? And what are you seeing today? Well, >>I think I touched on it earlier. Actually, could I just reflect on what Dana said about risk taking for just a quick one and say, throughout my life, from blackjack to starting solid works on shape, it's about taking calculated risks. Yes, you try to eliminate the risk Sa's much as you can, but I always say, I don't mind taking a risk that I'm aware of, and I've calculated through as best I can. I don't like taking risks that I don't know I'm taking. That's right. You >>like to bet on >>sure things as much as you sure things, or at least where you feel you. You've done the research and you see them and you know they're there and you know, you, you you keep that in mind in the room, and I think that's great. And Dana did so much for us. Dana, I want to thank you again. For all that, you did it every step of the way, from where we started to to, you know, your journey with us ended formally but continues informally. Now back to you, Dave, I think, question about the opportunity and how it's shaped up. Well, I think I touched on it earlier when I said It's about helping product developers. You know, our customers of the people build the future off manufactured goods. Anything you think of that would be manufacturing factory. You know, the chair you're sitting in machine that made your coffee. You know, the computer you're using, the trucks that drive by on the street, all the covert product research, the equipment being used to make vaccines. All that stuff is designed by someone, and our job is given the tools to do it better. And I could see the problems that those product developers had that we're slowing them down with using the computing systems of the time. When we built solid works, that was almost 30 years ago. If people don't realize that it was in the early >>nineties and you know, we did the >>best we could for the early nineties, but what we did. We didn't anticipate the world of today. And so people were having problems with just installing the systems. Dave, you wouldn't believe how hard it is to install these systems. You need toe speck up a special windows computer, you know, and make sure you've got all the memory and graphics you need and getting to get that set up. You need to make sure the device drivers air, right, install a big piece of software. Ah, license key. I'm not making this up. They're still around. You may not even know what those are. You know, Dennis laughing because, you know, zero cool people do things like this anymore. Um, and it only runs some windows. You want a second user to use it? They need a copy. They need a code. Are they on the same version? It's a nightmare. The teams change, you know? You just say, Well, get everyone on the software. Well, who's everyone? You know, you got a new vendor today? A new customer tomorrow, a new employee. People come on and off the team. The other problem is the data stored in files, thousands of files. This isn't like a spreadsheet or word processor, where there's one file to pass around these air thousands of files to make one, even a simple product. People were tearing their hair out. John, what do we do? I've got copies everywhere. I don't know where the latest version is. We tried like, you know, locking people out so that only one person can change it At the time that works against speed, it works against innovation. We saw what was happening with Cloud Web and mobile. So what's happened in the years since is every one of the forces that product developers experience the need for speed, the need for innovation, the need to be more efficient with their people in their capital. Resource is every one of those trends have been amplified since we started on shape by a lot of forces in the world. And covert is amplified all those the need for agility and remote work cove it is amplified all that the same time, The acceptance of cloud. You know, a few years ago, people were like cloud, you know, how is that gonna work now They're saying to me, You know, increasingly, how would you ever even have done this without the cloud. How do you make solid works work without the cloud? How would that even happen? You know, once people understand what on shapes about >>and we're the >>Onley full SAS solution software >>as a service, >>full SAS solution in our industry. So what's happened in those years? Same problems we saw earlier, but turn up the gain, their bigger problems. And with cloud, we've seen skepticism of years ago turn into acceptance. And now even embracement in the cova driven new normal. >>Yeah. So a lot of friction in the previous environments cloud obviously a huge factor on, I guess. I guess Dana John could see it coming, you know, in the early days of solid works with, you know, had Salesforce, which is kind of the first major independent SAS player. Well, I guess that was late nineties. So his post solid works, but pre in shape and their work day was, you know, pre on shape in the mid two thousands. And and but But, you know, the bet was on the SAS model was right for Crick had and and product development, you know, which maybe the time wasn't a no brainer. Or maybe it was, I don't know, but Dana is there. Is there anything that you would invest in today? That's not Cloud based? >>Um, that's a great question. I mean, I think we still see things all the time in the manufacturing world that are not cloud based. I think you know, the closer you get to the shop floor in the production environment. Um e think John and the PTC folks would agree with this, too, but that it's, you know, there's reliability requirements, performance requirements. There's still this attitude of, you know, don't touch the printing press. So the cloud is still a little bit scary sometimes. And I think hybrid cloud is a real thing for those or on premise. Solutions, in some cases is still a real thing. What what we're more focused on. And, um, despite whether it's on premise or hybrid or or SAS and Cloud is a frictionless go to market model, um, in the companies we invest in so sass and cloud, or really make that easy to adopt for new users, you know, you sign up, started using a product, um, but whether it's hosted in the cloud, whether it's as you can still distribute buying power. And, um, I would I'm just encouraging customers in the customer world and the more industrial environment to entrust some of their lower level engineers with more budget discretionary spending so they can try more products and unlock innovation. >>Right? The unit economics are so compelling. So let's bring it, you know, toe today's you know, situation. John, you decided to exit about a year ago. You know? What did you see in PTC? Other than the obvious money? What was the strategic fit? >>Yeah, Well, David, I wanna be clear. I didn't exit anything. Really? You >>know, I love you and I don't like that term exit. I >>mean, Dana had exit is a shareholder on and so it's not It's not exit for me. It's just a step in the journey. What we saw in PTC was a partner. First of all, that shared our vision from the top down at PTC. Jim Hempleman, the CEO. He had a great vision for for the impact that SAS can make based on cloud technology and really is Dana of highlighted so much. It's not just the technology is how you go to market and the whole business being run and how you support and make the customers successful. So Jim shared a vision for the potential. And really, really, um said Hey, come join us and we can do this bigger, Better, faster. We expanded the vision really to include this Atlas platform for hosting other SAS applications. That P D. C. I mean, David Day arrived at PTC. I met the head of the academic program. He came over to me and I said, You know, and and how many people on your team? I thought he'd say 5 40 people on the PTC academic team. It was amazing to me because, you know, we were we were just near about 100 people were required are total company. We didn't even have a dedicated academic team and we had ah, lot of students signing up, you know, thousands and thousands. Well, now we have hundreds of thousands of students were approaching a million users and that shows you the power of this team that PTC had combined with our product and technology whom you get a big success for us and for the teachers and students to the world. We're giving them great tools. So so many good things were also putting some PTC technology from other parts of PTC back into on shape. One area, a little spoiler, little sneak peek. Working on taking generative design. Dana knows all about generative design. We couldn't acquire that technology were start up, you know, just to too much to do. But PTC owns one of the best in the business. This frustrated technology we're working on putting that into on shaping our customers. Um, will be happy to see it, hopefully in the coming year sometime. >>It's great to see that two way exchange. Now, you both know very well when you start a company, of course, a very exciting time. You know, a lot of baggage, you know, our customers pulling you in a lot of different directions and asking you for specials. You have this kind of clean slate, so to speak in it. I would think in many ways, John, despite you know, your install base, you have a bit of that dynamic occurring today especially, you know, driven by the forced march to digital transformation that cove it caused. So when you sit down with the team PTC and talk strategy. You now have more global resource is you got cohorts selling opportunities. What's the conversation like in terms of where you want to take the division? >>Well, Dave, you actually you sounds like we should have you coming in and talking about strategy because you've got the strategy down. I mean, we're doing everything said global expansion were able to reach across selling. We got some excellent PTC customers that we can reach reach now and they're finding uses for on shape. I think the plan is to, you know, just go, go, go and grow, grow, grow where we're looking for this year, priorities are expand the product. I mentioned the breath of the product with new things PTC did recently. Another technology that they acquired for on shape. We did an acquisition. It was it was small, wasn't widely announced. It, um, in an area related to interfacing with electrical cad systems. So So we're doing We're expanding the breath of on shape. We're going Maura, depth in the areas were already in. We have enormous opportunity to add more features and functions that's in the product. Go to market. You mentioned it global global presence. That's something we were a little light on a year ago. Now we have a team. Dana may not even know what we have. A non shape, dedicated team in Barcelona, based in Barcelona but throughout Europe were doing multiple languages. Um, the academic program just introduced a new product into that space that z even fueling more success and growth there. Um, and of course, continuing to to invest in customer success and this Atlas platform story I keep mentioning, we're going to soon have We're gonna soon have four other major PTC brands shipping products on our Atlas Saas platform. And so we're really excited about that. That's good for the other PTC products. It's also good for on shape because now there's there's. There's other interesting products that are on shape customers can use take advantage of very easily using, say, a common log in conventions about user experience there, used to invest of all they're SAS based, so they that makes it easier to begin with. So that's some of the exciting things going on. I think you'll see PTC, um, expanding our lead in SAS based applications for this sector for our our target, uh, sectors not just in, um, in cat and data management, but another area. PTC's Big and his augmented reality with of euphoria, product line leader and industrial uses of a R. That's a whole other story we should do. A whole nother show augmented reality. But these products are amazing. You can you can help factory workers people on, uh, people who are left out of the digital transformation. Sometimes we're standing from machine >>all day. >>They can't be sitting like we are doing Zoom. They can wear a R headset in our tools, let them create great content. This is an area Dana is invested in other companies. But what I wanted to note is the new releases of our authoring software. For this, our content getting released this month, used through the Atlas platform, the SAS components of on shape for things like revision management and collaboration on duh workflow activity. All that those are tools that we're able to share leverage. We get a lot of synergy. It's just really good. It's really fun to have a good time. That's >>awesome. And then we're gonna be talking to John MacLean later about that. Let's do a little deeper Dive on that. And, Dana, what is your involvement today with with on shape? But you're looking for you know, which of their customers air actually adopting. And they're gonna disrupt their industries. And you get good pipeline from that. How do you collaborate today? >>That sounds like a great idea. Um, Aziz, John will tell you I'm constantly just asking him for advice and impressions of other entrepreneurs and picking his brain on ideas. No formal relationship clearly, but continue to count John and and John and other people in on shaping in the circle of experts that I rely on for their opinions. >>All right, so we have some questions from the crowd here. Uh, one of the questions is for the dream team. You know, John and Dana. What's your next next collective venture? I don't think we're there yet, are we? No. >>I just say, as Dana said, we love talking to her about. You know, Dana, you just returned the compliment. We would try and give you advice and the deals you're looking at, and I'm sort of casually mentoring at least one of your portfolio entrepreneurs, and that's been a lot of fun for May on, hopefully a value to them. But also Dana. We uran important pipeline to us in the world of some new things that are happening that we wouldn't see if you know you've shown us some things that you've said. What do you think of this business? And for us, it's like, Wow, it's cool to see that's going on And that's what's supposed to work in an ecosystem like this. So we we deeply value the ongoing relationship. And no, we're not starting something new. I got a lot of work left to do with what I'm doing and really happy. But we can We can collaborate in this way on other ventures. >>I like this question to somebody asking With the cloud options like on shape, Wilmore students have stem opportunities s Oh, that's a great question. Are you because of sass and cloud? Are you able to reach? You know, more students? Much more cost effectively. >>Yeah, Dave, I'm so glad that that that I was asked about this because Yes, and it's extremely gratified us. Yes, we are because of cloud, because on shape is the only full cloud full SAS system or industry were able to reach. Stem education brings able to be part of bringing step education to students who couldn't get it otherwise. And one of most gratifying gratifying things to me is the emails were getting from teachers, um, that that really, um, on the phone calls that were they really pour their heart out and say We're able to get to students in areas that have very limited compute resource is that don't have an I T staff where they don't know what computer that the students can have at home, and they probably don't even have a computer. We're talking about being able to teach them on a phone to have an android phone a low end android phone. You can do three D modeling on there with on shape. Now you can't do it any other system, but with on shape, you could do it. And so the teacher can say to the students, They have to have Internet access, and I know there's a huge community that doesn't even have Internet access, and we're not able, unfortunately to help that. But if you have Internet and you have even an android phone, we can enable the educator to teach them. And so we have case after case of saving a stem program or expanding it into the students that need it most is the ones we're helping here. So really excited about that. And we're also able to let in addition to the run on run on whatever computing devices they have, we also offer them the tools they need for remote teaching with a much richer experience. Could you teach solid works remotely? Well, maybe if the student ran it had a windows workstation. You know, big, big, high end workstation. Maybe it could, but it would be like the difference between collaborating with on shape and collaborate with solid works. Like the difference between a zoom video call and talking on the landline phone. You know, it's a much richer experience, and that's what you need. And stem teaching stem is hard, So yeah, we're super super. Um, I'm excited about bringing stem to more students because of cloud yond >>we're talking about innovation for good, and then the discussion, John, you just had it. Really? There could be a whole another vector here. We could discuss on diversity, and I wanna end with just pointing out. So, Dana, your new firm, it's a woman led firm, too. Two women leaders, you know, going forward. So that's awesome to see, so really? Yeah, thumbs up on that. Congratulations on getting that off the ground. >>Thank you. Thank you. >>Okay, so thank you guys. Really appreciate It was a great discussion. I learned a lot and I'm sure the audience did a swell in a moment. We're gonna talk with on shaped customers to see how they're applying tech for good and some of the products that they're building. So keep it right there. I'm Dave Volonte. You're watching innovation for good on the Cube, the global leader in digital tech event coverage. Stay right there. >>Oh, yeah, it's >>yeah, yeah, around >>the globe. It's the Cube presenting innovation for good. Brought to you by on shape. >>Okay, we're back. This is Dave Volonte and you're watching innovation for good. A program on Cuba 3 65 made possible by on shape of PTC company. We're live today really live tv, which is the heritage of the Cube. And now we're gonna go to the sources and talkto on shape customers to find out how they're applying technology to create real world innovations that are changing the world. So let me introduce our panel members. Rafael Gomez Furberg is with the Chan Zuckerberg bio hub. A very big idea. And collaborative nonprofit was initiative that was funded by Mark Zuckerberg and his wife, Priscilla Chan, and really around diagnosing and curing and better managing infectious diseases. So really timely topic. Philip Tabor is also joining us. He's with silver side detectors, which develops neutron detective detection systems. Yet you want to know if early, if neutrons and radiation or in places where you don't want them, So this should be really interesting. And last but not least, Matthew Shields is with the Charlottesville schools and is gonna educate us on how he and his team are educating students in the use of modern engineering tools and techniques. Gentlemen, welcome to the Cuban to the program. This should be really interesting. Thanks for coming on. >>Hi. Or pleasure >>for having us. >>You're very welcome. Okay, let me ask each of you because you're all doing such interesting and compelling work. Let's start with Rafael. Tell us more about the bio hub and your role there, please. >>Okay. Yeah. So you said that I hope is a nonprofit research institution, um, funded by Mark Zuckerberg and his wife, Priscilla Chan. Um, and our main mission is to develop new technologies to help advance medicine and help, hopefully cure and manage diseases. Um, we also have very close collaborations with Universe California, San Francisco, Stanford University and the University California Berkeley on. We tried to bring those universities together, so they collaborate more of biomedical topics. And I manage a team of engineers. They by joining platform. Um, and we're tasked with creating instruments for the laboratory to help the scientist boats inside the organization and also in the partner universities Do their experiments in better ways in ways that they couldn't do before >>in this edition was launched Well, five years ago, >>it was announced at the end of 2016, and we actually started operation with at the beginning of 2017, which is when I joined, um, So this is our third year. >>And how's how's it going? How does it work? I mean, these things take time. >>It's been a fantastic experience. Uh, the organization works beautifully. Um, it was amazing to see it grow From the beginning, I was employee number 12, I think eso When I came in, it was just a nem P office building and empty labs. And very quickly we had something running about. It's amazing eso I'm very proud of the work that we have done to make that possible. Um And then, of course, that's you mentioned now with co vid, um, we've been able to do a lot of very cool work attire being of the pandemic in March, when there was a deficit of testing, uh, capacity in California, we spun up a testing laboratory in record time in about a week. It was crazy. It was a crazy project, Um, but but incredibly satisfying. And we ended up running all the way until the beginning of November, when the lab was finally shut down. We could process about 3000 samples a day. I think at the end of it all, we were able to test about 100 on the order of 100 and 50,000 samples from all over the state. We were providing free testing toe all of the Department of Public Health Department of Public Health in California, which at the media pandemic, had no way to do testing affordably and fast. So I think that was a great service to the state. Now the state has created that testing system that would serve those departments. So then we decided that it was unnecessary to keep going with testing in the other biopsy that would shut down. >>All right. Thank you for that. Now, Now, Philip, you What you do is mind melting. You basically helped keep the world safe. Maybe describe a little bit more about silver sod detectors and what your role is there and how it all works. >>Tour. So we make a nuclear bomb detectors and we also make water detectors. So we try and do our part thio keep the world from blowing up and make it a better place at the same time. Both of these applications use neutron radiation detectors. That's what we make. Put them out by import border crossing places like that. They can help make sure that people aren't smuggling. Shall we say very bad things. Um, there's also a burgeoning field of research and application where you can use neutrons with some pretty cool physics to find water so you could do things. Like what? A detector up in the mountains and measure snowpack. Put it out in the middle of the field and measure soil moisture content. And as you might imagine, there's some really cool applications in, uh, research and agronomy and public policy for this. >>All right, so it's OK, so it's a It's much more than, you know, whatever fighting terrorism, it's there's a riel edge or I kind of i o t application for what you guys >>do. We do both its's to plowshares. You might >>say a mat. I I look at your role is kind of scaling the brain power for for the future. Maybe tell us more about Charlottesville schools and in the mission that you're pursuing and what you do. >>Thank you. Um, I've been in Charlottesville City schools for about 11 or 12 years. I started their teaching, um, a handful of classes, math and science and things like that. But Thescore board and my administration had the crazy idea of starting an engineering program about seven years ago. My background is an engineering is an engineering. My masters is in mechanical and aerospace engineering and um, I basically spent a summer kind of coming up with what might be a fun engineering curriculum for our students. And it started with just me and 30 students about seven years ago, Um, kind of a home spun from scratch curriculum. One of my goals from the outset was to be a completely project based curriculum, and it's now grown. We probably have about six or 700 students, five or six full time teachers. We now have pre engineering going on at the 5th and 6th grade level. I now have students graduating. Uh, you know, graduating after senior year with, like, seven years of engineering under their belt and heading off to doing some pretty cool stuff. So it's It's been a lot of fun building a program and, um, and learning a lot in the process. >>That's awesome. I mean, you know, Cuba's. We've been passionate about things like women in tech, uh, diversity stem. You know, not only do we need more, more students and stem, we need mawr underrepresented women, minorities, etcetera. We were just talking to John Herstek and integrate gration about this is Do you do you feel is though you're I mean, first of all, the work that you do is awesome, but but I'll go one step further. Do you feel as though it's reaching, um, or diverse base? And how is that going? >>That's a great question. I think research shows that a lot of people get funneled into one kind of track or career path or set of interests really early on in their educational career, and sometimes that that funnel is kind of artificial. And so that's one of the reasons we keep pushing back. Um, so our school systems introducing kindergartners to programming on DSO We're trying to push back how we expose students to engineering and to stem fields as early as possible. And we've definitely seen the first of that in my program. In fact, my engineering program, uh, sprung out of an after school in Extracurricular Science Club that actually three girls started at our school. So I think that actually has helped that three girls started the club that eventually is what led to our engineering programs that sort of baked into the DNA and also our eyes a big public school. And we have about 50% of the students are under the poverty line and we e in Charlottesville, which is a big refugee town. And so I've been adamant from Day one that there are no barriers to entry into the program. There's no test you have to take. You don't have to have be taking a certain level of math or anything like that. That's been a lot of fun. To have a really diverse set of kids enter the program and be successful, >>that's final. That's great to hear. So, Philip, I wanna come back to you. You know, I think about maybe some day we'll be able to go back to a sporting events, and I know when I when I'm in there, there's somebody up on the roof looking out for me, you know, watching the crowd, and they have my back. And I think in many ways, the products that you build, you know, our similar. I may not know they're there, but they're keeping us safe or they're measuring things that that that I don't necessarily see. But I wonder if you could talk about a little bit more detail about the products you build and how they're impacting society. >>Sure, so There are certainly a lot of people who are who are watching, trying to make sure things were going well in keeping you safe that you may or may not be aware of. And we try and support ah lot of them. So we have detectors that are that are deployed in a variety of variety of uses, with a number of agencies and governments that dio like I was saying, ports and border crossing some other interesting applications that are looking for looking for signals that should not be there and working closely to fit into the operations these folks do. Onda. We also have a lot of outreach to researchers and scientists trying to help them support the work they're doing. Um, using neutron detection for soil moisture monitoring is a some really cool opportunities for doing it at large scale and with much less, um, expense or complication than would have been done. Previous technologies. Um, you know, they were talking about collaboration in the previous segment. We've been able to join a number of conferences for that, virtually including one that was supposed to be held in Boston, but another one that was held out of the University of Heidelberg in Germany. And, uh, this is sort of things that in some ways, the pandemic is pushing people towards greater collaboration than they would have been able to do. Had it all but in person. >>Yeah, we did. Uh, the cube did live works a couple years ago in Boston. It was awesome show. And I think, you know, with this whole trend toward digit, I call it the Force march to digital. Thanks to cove it I think that's just gonna continue. Thio grow. Rafael. What if you could describe the process that you use to better understand diseases? And what's your organization's involvement? Been in more detail, addressing the cove in pandemic. >>Um, so so we have the bio be structured in, Um um in a way that foster so the combination of technology and science. So we have to scientific tracks, one about infectious diseases and the other one about understanding just basic human biology, how the human body functions, and especially how the cells in the human body function on how they're organized to create tissues in the body. On Ben, it has this set of platforms. Um, mind is one of them by engineering that are all technology rated. So we have data science platform, all about data analysis, machine learning, things like that. Um, we have a mass spectrometry platform is all about mass spectrometry technologies to, um, exploit those ones in service for the scientist on. We have a genomics platform that it's all about sequencing DNA and are gonna, um and then an advanced microscopy. It's all about developing technologies, uh, to look at things with advanced microscopes and developed technologies to marry computation on microscopy. So, um, the scientists set the agenda and the platforms, we just serve their needs, support their needs, and hopefully develop technologies that help them do their experiments better, faster, or allow them to the experiment that they couldn't do in any other way before. Um And so with cove, it because we have that very strong group of scientists that work on have been working on infectious disease before, and especially in viruses, we've been able to very quickly pivot to working on that s O. For example, my team was able to build pretty quickly a machine to automatically purified proteins on is being used to purify all these different important proteins in the cove. It virus the SARS cov to virus Onda. We're sending some of those purified proteins all over the world. Two scientists that are researching the virus and trying to figure out how to develop vaccines, understand how the virus affects the body and all that. Um, so some of the machines we built are having a very direct impact on this. Um, Also for the copy testing lab, we were able to very quickly develop some very simple machines that allowed the lab to function sort of faster and more efficiently. Sort of had a little bit of automation in places where we couldn't find commercial machines that would do it. >>Um, eso Matt. I mean, you gotta be listening to this and thinking about Okay, So someday your students are gonna be working at organizations like like, like Bio Hub and Silver Side. And you know, a lot of young people they're just don't know about you guys, but like my kids, they're really passionate about changing the world. You know, there's way more important than you know, the financial angles and it z e. I gotta believe you're seeing that you're right in the front lines there. >>Really? Um, in fact, when I started the curriculum six or seven years ago, one of the first bits of feedback I got from my students is they said Okay, this is a lot of fun. So I had my students designing projects and programming microcontrollers raspberry, PiS and order we nose and things like that. The first bit of feedback I got from students was they said Okay, when do we get to impact the world? I've heard engineering >>is about >>making the world a better place, and robots are fun and all, but, you know, where is the real impact? And so um, dude, yeah, thanks to the guidance of my students, I'm baking that Maurin. Now I'm like day one of engineering one. We talk about how the things that the tools they're learning and the skills they're gaining, uh, eventually, you know, very soon could be could be used to make the world a better place. >>You know, we all probably heard that famous line by Jeff Hammer Barker. The greatest minds of my generation are trying to figure out how to get people to click on ads. I think we're really generally generationally, finally, at the point where young students and engineering a really, you know, a passionate about affecting society. I wanna get into the product, you know, side and understand how each of you are using on shape and and the value that that it brings. Maybe Raphael, you could start how long you've been using it. You know, what's your experience with it? Let's let's start there. >>I begin for about two years, and I switched to it with some trepidation. You know, I was used to always using the traditional product that you have to install on your computer, that everybody uses that. So I was kind of locked into that. But I started being very frustrated with the way it worked, um, and decided to give on ship chance. Which reputation? Because any change always, you know, causes anxiety. Um, but very quickly my engineers started loving it, Uh, just because it's it's first of all, the learning curve wasn't very difficult at all. You can transfer from one from the traditional product to entree very quickly and easily. You can learn all the concepts very, very fast. It has all the functionality that we needed and and what's best is that it allows to do things that we couldn't do before or we couldn't do easily. Now we can access the our cat documents from anywhere in the world. Um, so when we're in the lab fabricating something or testing a machine, any computer we have next to us or a tablet or on iPhone, we can pull it up and look at the cad and check things or make changes. That's something that couldn't do before because before you had to pay for every installation off the software for the computer, and I couldn't afford to have 20 installations to have some computers with the cat ready to use them like once every six months would have been very inefficient. So we love that part. And the collaboration features are fantastic, especially now with Kobe, that we have to have all the remote meetings eyes fantastic, that you can have another person drive the cad while the whole team is watching that person change the model and do things and point to things that is absolutely revolutionary. We love it. The fact that you have very, very sophisticated version control before it was always a challenge asking people, please, if you create anniversary and apart, how do we name it so that people find it? And then you end up with all these collection of files with names that nobody ever remembers, what they are, the person left. And now nobody knows which version is the right one. A mess with on shape on the version ING system it has, and the fact that you can go back in history off the document and go back to previous version so easily and then go back to the press and version and explore the history of the part that is truly, um, just world changing for us, that we can do that so easily on for me as a manager to manage this collection of information that is critical for our operations. It makes it so much easier because everything is in one place. I don't have to worry about file servers that go down that I have to administer that have to have I t taken care off that have to figure how to keep access to people to those servers when they're at home, and they need a virtual private network and all of that mess disappears. I just simply give give a person in accounting on shape and then magically, they have access to everything in the way I want. And we can manage the lower documents and everything in a way that is absolutely fantastic. >>Feel what was your what? What were some of the concerns you had mentioned? You had some trepidation. Was it a performance? Was it security? You know some of the traditional cloud stuff, and I'm curious as to how, How, whether any of those act manifested really that you had to manage. What were your concerns? >>Look, the main concern is how long is it going to take for everybody in the team to learn to use the system like it and buy into it? Because I don't want to have my engineers using tools against their will write. I want everybody to be happy because that's how they're productive. They're happy, and they enjoyed the tools they have. That was my main concern. I was a little bit worried about the whole concept of not having the files in a place where I couldn't quote unquote seat in some server and on site, but that That's kind of an outdated concept, right? So that took a little bit of a mind shift, but very quickly. Then I started thinking, Look, I have a lot of documents on Google Drive. Like, I don't worry about that. Why would I worry about my cat on on shape, right? Is the same thing. So I just needed to sort of put things in perspective that way. Um, the other, um, you know, the concern was the learning curve, right? Is like, how is he Will be for everybody to and for me to learn it on whether it had all of the features that we needed. And there were a few features that I actually discussed with, um uh, Cody at on shape on, they were actually awesome about using their scripting language in on shape to sort of mimic some of the features of the old cat, uh, in on, shaped in a way that actually works even better than the old system. So it was It was amazing. Yeah, >>Great. Thank you for that, Philip. What's your experience been? Maybe you could take us through your journey within shape. >>Sure. So we've been we've been using on shaped silver side for coming up on about four years now, and we love it. We're very happy with it. We have a very modular product line, so we make anything from detectors that would go into backpacks. Two vehicles, two very large things that a shipping container would go through and saw. Excuse me. Shape helps us to track and collaborate faster on the design. Have multiple people working a same time on a project. And it also helps us to figure out if somebody else comes to us and say, Hey, I want something new how we congrats modules from things that we already have put them together and then keep track of the design development and the different branches and ideas that we have, how they all fit together. A za design comes together, and it's just been fantastic from a mechanical engineering background. I will also say that having used a number of different systems and solid works was the greatest thing since sliced bread. Before I got using on shape, I went, Wow, this is amazing and I really don't want to design in any other platform. After after getting on Lee, a little bit familiar with it. >>You know, it's funny, right? I'll have the speed of technology progression. I was explaining to some young guns the other day how I used to have a daytime er and that was my life. And if I lost that daytime, er I was dead. And I don't know how we weigh existed without, you know, Google maps eso we get anywhere, I don't know, but, uh but so So, Matt, you know, it's interesting to think about, you know, some of the concerns that Raphael brought up, you hear? For instance, you know, all the time. Wow. You know, I get my Amazon bill at the end of the month that zip through the roof in, But the reality is that Yeah, well, maybe you are doing more, but you're doing things that you couldn't have done before. And I think about your experience in teaching and educating. I mean, you so much more limited in terms of the resource is that you would have had to be able to educate people. So what's your experience been with With on shape and what is it enabled? >>Um, yeah, it was actually talking before we went with on shape. We had a previous CAD program, and I was talking to my vendor about it, and he let me know that we were actually one of the biggest CAD shops in the state. Because if you think about it a really big program, you know, really big company might employ. 5, 10, 15, 20 cad guys, right? I mean, when I worked for a large defense contractor, I think there were probably 20 of us as the cad guys. I now have about 300 students doing cat. So there's probably more students with more hours of cat under their belt in my building than there were when I worked for the big defense contractor. Um, but like you mentioned, uh, probably our biggest hurdle is just re sources. And so we want We want one of things I've always prided myself and trying to do in this. Programs provide students with access two tools and skills that they're going to see either in college or in the real world. So it's one of the reason we went with a big professional cad program. There are, you know, sort of K 12 oriented software and programs and things. But, you know, I want my kids coding and python and using slack and using professional type of tools on DSO when it comes to cat. That's just that That was a really hurt. I mean, you know, you could spend $30,000 on one seat of, you know, professional level cad program, and then you need a $30,000 computer to run it on if you're doing a heavy assemblies, Um and so one of my dreams And it was always just a crazy dream. And I was the way I would always pitcher in my school system and say, someday I'm gonna have a kid on a school issued chromebook in subsidized housing, on public WiFi doing professional level bad and that that was a crazy statement until a couple of years ago. So we're really excited that I literally and you know, March and you said the forced march, the forced march into, you know, modernity, March 13th kids sitting in my engineering lab that we spent a lot of money on doing cad March 14th. Those kids were at home on their school issued chromebooks on public WiFi, uh, keeping their designs going and collaborating. And then, yeah, I could go on and on about some of the things you know, the features that we've learned since then they're even better. So it's not like this is some inferior, diminished version of Academy. There's so much about it. Well, I >>wanna I wanna ask you that I may be over my skis on this, but we're seeing we're starting to see the early days of the democratization of CAD and product design. It is the the citizen engineer, I mean, maybe insulting to the engineers in the room, But but is that we're beginning to see that >>I have to believe that everything moves into the cloud. Part of that is democratization that I don't need. I can whether you know, I think artists, you know, I could have a music studio in my basement with a nice enough software package. And Aiken, I could be a professional for now. My wife's a photographer. I'm not allowed to say that I could be a professional photographer with, you know, some cloud based software, and so, yeah, I do think that's part of what we're seeing is more and more technology is moving to the cloud. >>Philip. Rafael Anything you Dad, >>I think I mean, yeah, that that that combination of cloud based cat and then three d printing that is becoming more and more affordable on ubiquitous It's truly transformative, and I think for education is fantastic. I wish when I was a kid I had the opportunity to play with those kinds of things because I was always the late things. But, you know, the in a very primitive way. So, um, I think this is a dream for kids. Teoh be able to do this. And, um, yeah, there's so many other technologies coming on, like Arduino on all of these electronic things that live kids play at home very cheaply with things that back in my day would have been unthinkable. >>So we know there's a go ahead. Philip, please. >>We had a pandemic and silver site moved to a new manufacturing facility this year. I was just on the shop floor, talking with contractors, standing 6 ft apart, pointing at things. But through it all, our CAD system was completely unruffled. Nothing stopped in our development work. Nothing stopped in our support for existing systems in the field. We didn't have to think about it. We had other server issues, but none with our, you know, engineering cad, platform and product development in support world right ahead, which was cool, but also a in that's point. I think it's just really cool what you're doing with the kids. The most interesting secondary and college level engineering work that I did was project based, taken important problem to the world. Go solve it and that is what we do here. That is what my entire career has been. And I'm super excited to see. See what your students are going to be doing, uh, in there home classrooms on their chromebooks now and what they do building on that. >>Yeah, I'm super excited to see your kids coming out of college with engineering degrees because, yeah, I think that Project based experience is so much better than just sitting in a classroom, taking notes and doing math problems on day. I think it will give the kids a much better flavor. What engineering is really about Think a lot of kids get turned off by engineering because they think it's kind of dry because it's just about the math for some very abstract abstract concept on they are there. But I think the most important thing is just that hands on a building and the creativity off, making things that you can touch that you can see that you can see functioning. >>Great. So, you know, we all know the relentless pace of technology progression. So when you think about when you're sitting down with the folks that on shape and there the customer advisor for one of the things that that you want on shape to do that it doesn't do today >>I could start by saying, I just love some of the things that does do because it's such a modern platform. And I think some of these, uh, some some platforms that have a lot of legacy and a lot of history behind them. I think we're dragging some of that behind them. So it's cool to see a platform that seemed to be developed in the modern era, and so that Z it is the Google docks. And so the fact that collaboration and version ing and link sharing is and like platform agnostic abilities, the fact that that seems to be just built into the nature of the thing so far, That's super exciting. As far as things that, uh, to go from there, Um, I don't know, >>Other than price. >>You can't say >>I >>can't say lower price. >>Yeah, so far on P. D. C. S that work with us. Really? Well, so I'm not complaining. There you there, >>right? Yeah. Yeah. No gaps, guys. Whitespace, Come on. >>We've been really enjoying the three week update. Cadence. You know, there's a new version every three weeks and we don't have to install it. We just get all the latest and greatest goodies. One of the trends that we've been following and enjoying is the the help with a revision management and release work flows. Um, and I know that there's more than on shape is working on that we're very excited for, because that's a big important part about making real hardware and supporting it in the field. Something that was cool. They just integrated Cem markup capability. In the last release that took, we were doing that anyway, but we were doing it outside of on shapes. And now we get to streamline our workflow and put it in the CAD system where We're making those changes anyway when we're reviewing drawings and doing this kind of collaboration. And so I think from our perspective, we continue to look forward. Toa further progress on that. There's a lot of capability in the cloud that I think they're just kind of scratching the surface on you, >>right? I would. I mean, you're you're asking to knit. Pick. I would say one of the things that I would like to see is is faster regeneration speed. There are a few times with convicts, necessities that regenerating the document takes a little longer than I would like. It's not a serious issue, but anyway, I I'm being spoiled, >>you know? That's good. I've been doing this a long time, and I like toe ask that question of practitioners and to me, it It's a signal like when you're nit picking and that's what you're struggling to knit. Pick that to me is a sign of a successful product, and and I wonder, I don't know, uh, have the deep dive into the architecture. But are things like alternative processors. You're seeing them hit the market in a big way. Uh, you know, maybe helping address the challenge, But I'm gonna ask you the big, chewy question now. Then we maybe go to some audience questions when you think about the world's biggest problems. I mean, we're global pandemics, obviously top of mind. You think about nutrition, you know, feeding the global community. We've actually done a pretty good job of that. But it's not necessarily with the greatest nutrition, climate change, alternative energy, the economic divides. You've got geopolitical threats and social unrest. Health care is a continuing problem. What's your vision for changing the world and how product innovation for good and be applied to some of the the problems that that you all are passionate about? Big question. Who wants toe start? >>Not biased. But for years I've been saying that if you want to solve the economy, the environment, uh, global unrest, pandemics, education is the case. If you wanna. If you want to, um, make progress in those in those realms, I think funding funding education is probably gonna pay off pretty well. >>Absolutely. And I think Stam is key to that. I mean, all of the ah lot of the well being that we have today and then industrialized countries. Thanks to science and technology, right improvements in health care, improvements in communication, transportation, air conditioning. Um, every aspect of life is touched by science and technology. So I think having more kids studying and understanding that is absolutely key. Yeah, I agree, >>Philip, you got anything to add? >>I think there's some big technical problems in the world today, Raphael and ourselves there certainly working on a couple of them. Think they're also collaboration problems and getting everybody to be able to pull together instead of pulling separately and to be able to spur the ideas on words. So that's where I think the education side is really exciting. What Matt is doing and it just kind of collaboration in general when we could do provide tools to help people do good work. Uh, that is, I think, valuable. >>Yeah, I think that's a very good point. And along those lines, we have some projects that are about creating very low cost instruments for low research settings, places in Africa, Southeast Asia, South America, so that they can do, um, um, biomedical research that it's difficult to do in those place because they don't have the money to buy the fancy lab machines that cost $30,000 an hour. Um, so we're trying to sort of democratize some of those instruments. And I think thanks to tools like Kahn shape then is easier, for example, to have a conversation with somebody in Africa and show them the design that we have and discuss the details of it with them on. But it's amazing, right to have somebody, you know, 10 time zones away, Um, looking really life in real time with you about your design and discussing the details or teaching them how to build a machine, right? Because, um, you know, they have a three D printer. You can you can just give them the design and say like, you build it yourself, uh, even cheaper than and, you know, also billing and shipping it there. Um, so all that that that aspect of it is also super important. I think for any of these efforts to improve some of the hardest part was in the world for climate change. Do you say, as you say, poverty, nutrition issues? Um, you know, availability of water. You have that project at about finding water. Um, if we can also help deploy technologies that teach people remotely how to create their own technologies or how to build their own systems that will help them solve those forms locally. I think that's very powerful. >>Yeah, the point about education is right on. I think some people in the audience may be familiar with the work of Erik Brynjolfsson and Andrew McAfee, the second machine age where they sort of put forth the premise that, uh, is it laid it out. Look, for the first time in history, machines air replacing humans from a cognitive perspective. Machines have always replaced humans, but that's gonna have an impact on jobs. But the answer is not toe protect the past from the future. The answer is education and public policy that really supports that. So I couldn't agree more. I think it's a really great point. Um, we have We do have some questions from the audience. If if we could If I can ask you guys, um, you know, this one kind of stands out. How do you see artificial intelligence? I was just talking about machine intelligence. Um, how do you see that? Impacting the design space guys trying to infuse a I into your product development. Can you tell me? >>Um, absolutely, like, we're using AI for some things, including some of these very low cost instruments that will hopefully help us diagnose certain diseases, especially this is that are very prevalent in the Third World. Um, and some of those diagnostics are these days done by thes armies of technicians that are trained to look under the microscope. But, um, that's a very slow process. Is very error prone and having machine learning systems that can to the same diagnosis faster, cheaper and also little machines that can be taken to very remote places to these villages that have no access to a fancy microscope. To look at a sample from a patient that's very powerful. And I we don't do this, but I have read quite a bit about how certain places air using a Tribune attorneys to actually help them optimize designs for parts. So you get these very interesting looking parts that you would have never thought off a person would have never thought off, but that are incredibly light ink. Earlier, strong and I have all sort of properties that are interesting thanks to artificial intelligence machine learning in particular >>yet another. The advantage you get when when your work is in the cloud I've seen. I mean, there's just so many applications that so if the radiology scan is in the cloud and the radiologist is goes to bed at night, Radiologist could come in in the morning and and say, Oh, the machine while you were sleeping was using artificial intelligence to scan these 40,000 images. And here's the five that we picked out that we think you should take a closer look at. Or like Raphael said, I can design my part. My, my, my, my, my you know, mount or bracket or whatever and go to sleep. And then I wake up in the morning. The machine has improved. It for me has made it strider strider stronger and lighter. Um And so just when your when your work is in the cloud, that's just that's a really cool advantage that you get that you can have machines doing some of your design work for you. >>Yeah, we've been watching, uh, you know, this week is this month, I guess is AWS re invent and it's just amazing to see how much effort is coming around machine learning machine intelligence. You know Amazon has sage maker Google's got, you know, embedded you no ML and big query. Uh, certainly Microsoft with Azure is doing tons of stuff and machine learning. I think the point there is that that these things will be infused in tow R and D and in tow software product by the vendor community. And you all will apply that to your business and and build value through the unique data that your collecting, you know, in your ecosystems. And and that's how you add value. You don't have to be necessarily, you know, developers of artificial intelligence, but you have to be practitioners to apply that. Does that make sense to you, Philip? >>Yeah, absolutely. And I think your point about value is really well chosen. We see AI involved from the physics simulations all the way up to interpreting radiation data, and that's where the value question, I think, is really important because it's is the output of the AI giving helpful information that the people that need to be looking at it. So if it's curating a serious of radiation alert, saying, Hey, like these air the anomalies. You need to look at eyes it, doing that in a way that's going to help a good response on. In some cases, the II is only as good as the people. That sort of gave it a direction and turn it loose. And you want to make sure that you don't have biases or things like that underlying your AI that they're going to result in less than helpful outcomes coming from it. So we spend quite a lot of time thinking about how do we provide the right outcomes to people who are who are relying on our systems? >>That's a great point, right? Humans air biased and humans build models, so models are inherently biased. But then the software is hitting the market. That's gonna help us identify those biases and help us, you know? Of course. Correct. So we're entering Cem some very exciting times, guys. Great conversation. I can't thank you enough for spending the time with us and sharing with our audience the innovations that you're bringing to help the world. So thanks again. >>Thank you so much. >>Thank you. >>Okay. Welcome. Okay. When we come back, John McElheny is gonna join me. He's on shape. Co founder. And he's currently the VP of strategy at PTC. He's gonna join the program. We're gonna take a look at what's next and product innovation. I'm Dave Volonte and you're watching innovation for good on the Cube, the global leader. Digital technology event coverage. We'll be right back. >>Okay? Okay. Yeah. Okay. >>From around >>the globe, it's the Cube. Presenting innovation for good. Brought to you by on shape. >>Okay, welcome back to innovation. For good. With me is John McElheny, who is one of the co founders of On Shape and is now the VP of strategy at PTC. John, it's good to see you. Thanks for making the time to come on the program. Thanks, Dave. So we heard earlier some of the accomplishments that you've made since the acquisition. How has the acquisition affected your strategy? Maybe you could talk about what resource is PTC brought to the table that allowed you toe sort of rethink or evolve your strategy? What can you share with us? >>Sure. You know, a year ago, when when John and myself met with Jim Pepperman early on is we're we're pondering. Started joining PTC one of things became very clear is that we had a very clear shared vision about how we could take the on shape platform and really extended for, for all of the PTC products, particular sort of their augmented reality as well as their their thing works or the i o. T business and their product. And so from the very beginning there was a clear strategy about taking on shape, extending the platform and really investing, um, pretty significantly in the product development as well as go to market side of things, uh, toe to bring on shape out to not only the PTC based but sort of the broader community at large. So So So PTC has been a terrific, terrific, um, sort of partner as we've we've gonna go on after this market together. Eso We've added a lot of resource and product development side of things. Ah, lot of resource and they go to market and customer success and support. So, really, on many fronts, that's been both. Resource is as well a sort of support at the corporate level from from a strategic standpoint and then in the field, we've had wonderful interactions with many large enterprise customers as well as the PTC channels. So it's been really a great a great year. >>Well, and you think about the challenges of in your business going to SAS, which you guys, you know, took on that journey. You know, 78 years ago. Uh, it's not trivial for a lot of companies to make that transition, especially a company that's been around as long as PTC. So So I'm wondering how much you know, I was just asking you How about what PCP TC brought to the table? E gotta believe you're bringing a lot to the table to in terms of the mindset, uh, even things is, is mundane is not the right word, but things like how you compensate salespeople, how you interact with customers, the notion of a service versus a product. I wonder if you could address >>that. Yeah, it's a it's a really great point. In fact, after we had met Jim last year, John and I one of the things we walked out in the seaport area in Boston, one of things we sort of said is, you know, Jim really gets what we're trying to do here and and part of let me bring you into the thinking early on. Part of what Jim talked about is there's lots of, you know, installed base sort of software that's inside of PTC base. That's helped literally thousands of customers around the world. But the idea of moving to sass and all that it entails both from a technology standpoint but also a cultural standpoint. Like How do you not not just compensate the sales people as an example? But how do you think about customer success? In the past, it might have been that you had professional services that you bring out to a customer, help them deploy your solutions. Well, when you're thinking about a SAS based offering, it's really critical that you get customers successful with it. Otherwise, you may have turned, and you know it will be very expensive in terms of your business long term. So you've got to get customers success with software in the very beginning. So you know, Jim really looked at on shape and he said that John and I, from a cultural standpoint, you know, a lot of times companies get acquired and they've acquired technology in the past that they integrate directly into into PTC and then sort of roll it out through their products, are there just reached channel, he said. In some respects, John John, think about it as we're gonna take PTC and we want to integrate it into on shape because we want you to share with us both on the sales side and customer success on marketing on operations. You know all the things because long term, we believe the world is a SAS world, that the whole industry is gonna move too. So really, it was sort of an inverse in terms of the thought process related to normal transactions >>on That makes a lot of sense to me. You mentioned Sharon turns the silent killer of a SAS company, and you know, there's a lot of discussion, you know, in the entrepreneurial community because you live this, you know what's the best path? I mean today, You see, you know, if you watch Silicon Valley double, double, triple triple, but but there's a lot of people who believe, and I wonder, if you come in there is the best path to, you know, in the X Y axis. If if it's if it's uh, growth on one and retention on the other axis. What's the best way to get to the upper right on? Really? The the best path is probably make sure you've nailed obviously the product market fit, But make sure that you can retain customers and then throw gas on the fire. You see a lot of companies they burn out trying to grow too fast, but they haven't figured out, you know that. But there's too much churn. They haven't figured out those metrics. I mean, obviously on shape. You know, you were sort of a pioneer in here. I gotta believe you've figured out that customer retention before you really, You know, put the pedal to the >>metal. Yeah, and you know, growth growth can mask a lot of things, but getting getting customers, especially the engineering space. Nobody goes and sits there and says, Tomorrow we're gonna go and and, you know, put 100 users on this and and immediately swap out all of our existing tools. These tools are very rich and deep in terms of capability, and they become part of the operational process of how a company designs and builds products. So any time anybody is actually going through the purchasing process. Typically, they will run a try along or they'll run a project where they look at. Kind of What? What is this new solution gonna help them dio. How are we gonna orient ourselves for success? Longer term. So for us, you know, getting new customers and customer acquisition is really critical. But getting those customers to actually deploy the solution to be successful with it. You know, we like to sort of, say, the marketing or the lead generation and even some of the initial sales. That's sort of like the Kindle ing. But the fire really starts when customers deploy it and get successful. The solution because they bring other customers into the fold. And then, of course, if they're successful with it, you know, then in fact, you have negative turn which, ironically, means growth in terms of your inside of your install. Bates. >>Right? And you've seen that with some of the emerging, you know, SAS companies, where you're you're actually you know, when you calculate whatever its net retention or renew ALS, it's actually from a dollar standpoint. It's up in the high nineties or even over 100%. >>So >>and that's a trend we're gonna continue. See, I >>wonder >>if we could sort of go back. Uh, and when you guys were starting on shape, some of the things that you saw that you were trying to strategically leverage and what's changed, you know, today we were talking. I was talking to John earlier about in a way, you kinda you kinda got a blank slate is like doing another startup. >>You're >>not. Obviously you've got installed base and customers to service, but But it's a new beginning for you guys. So one of the things that you saw then you know, cloud and and sas and okay, but that's we've been there, done that. What are you seeing? You know today? >>Well, you know, So So this is a journey, of course, that that on shape on its own has gone through it had I'll sort of say, you know, several iterations, both in terms of of of, you know, how do you How do you get customers? How do you How do you get them successful? How do you grow those customers? And now that we've been part of PTC, the question becomes okay. One, There is certainly a higher level of credibility that helps us in terms of our our megaphone is much bigger than it was when we're standalone company. But on top of that now, figuring out how to work with their channel with their direct sales force, you know, they have, um, for example, you know, very large enterprises. Well, many of those customers are not gonna go in forklift out their existing solution to replace it with with on shape. However, many of them do have challenges in their supply chain and communications with contractors and vendors across the globe. And so, you know, finding our fit inside of those large enterprises as they extend out with their their customers is a very interesting area that we've really been sort of incremental to to PTC. And then, you know, they they have access to lots of other technology, like the i o. T business. And now, of course, the augmented reality business that that we can bring things to bear. For example, in the augmented reality world, they've they've got something called expert capture. And this is essentially imagine, you know, in a are ah, headset that allows you to be ableto to speak to it, but also capture images still images in video. And you could take somebody who's doing their task and capture literally the steps that they're taking its geo location and from their builds steps for new employees to be, we'll learn and understand how todo use that technology to help them do their job better. Well, when they do that, if there is replacement products or variation of of some of the tools that that they built the original design instruction set for they now have another version. Well, they have to manage multiple versions. Well, that's what on shape is really great at doing and so taking our technology and helping their solutions as well. So it's not only expanding our customer footprint, it's expanding the application footprint in terms of how we can help them and help customers. >>So that leads me to the tam discussion and again, as part of your strategist role. How do you think about that? Was just talking to some of your customers earlier about the democratization of cat and engineering? You know, I kind of joked, sort of like citizen engineering, but but so that you know, the demographics are changing the number of users potentially that can access the products because the it's so much more of a facile experience. How are you thinking about the total available market? >>It really is a great question, You know, it used to be when you when you sold boxes of software, it was how many engineers were out there. And that's the size of the market. The fact that matter is now when, When you think about access to that information, that data is simply a pane of glass. Whether it's a computer, whether it's a laptop, UH, a a cell phone or whether it's a tablet, the ability to to use different vehicles, access information and data expands the capabilities and power of a system to allow feedback and iteration. I mean, one of the one of the very interesting things is in technology is when you can take something and really unleash it to a larger audience and builds, you know, purpose built applications. You can start to iterate, get better feedback. You know there's a classic case in the clothing industry where Zara, you know, is a fast sort of turnaround. Agile manufacturer. And there was a great New York Times article written a couple years ago. My wife's a fan of Zara, and I think she justifies any purchases by saying, You know, Zara, you gotta purchase it now. Otherwise it may not be there the next time. Yet you go back to the store. They had some people in a store in New York that had this woman's throw kind of covering Shaw. And they said, Well, it would be great if we could have this little clip here so we can hook it through or something. And they sent a note back toe to the factory in Spain, and literally two weeks later they had, you know, 4000 of these things in store, and they sold out because they had a closed loop and iterative process. And so if we could take information and allow people access in multiple ways through different devices and different screens, that could be very specific information that, you know, we remove a lot of the engineering data book, bring the end user products conceptually to somebody that would have had to wait months to get the actual physical prototype, and we could get feedback well, Weaken have a better chance of making sure whatever product we're building is the right product when it ultimately gets delivered to a customer. So it's really it's a much larger market that has to be thought of rather than just the kind of selling A boxes software to an engineer. >>That's a great story. And again, it's gonna be exciting for you guys to see that with. The added resource is that you have a PTC, Um, so let's talk. I promise people we wanna talk about Atlas. Let's talk about the platform. A little bit of Atlas was announced last year. Atlas. For those who don't know it's a SAS space platform, it purports to go beyond product lifecycle management and you You're talking cloud like agility and scale to CAD and product design. But John, you could do a better job than I. What do >>we need to know about Atlas? Well, I think Atlas is a great description because it really is metaphorically sort of holding up all of the PTC applications themselves. But from the very beginning, when John and I met with Jim, part of what we were intrigued about was that he shared a vision that on shape was more than just going to be a cad authoring tool that, in fact, you know, in the past these engineering tools were very powerful, but they were very narrow in their purpose and focus. And we had specialty applications to manage the versions, etcetera. What we did in on shape is we kind of inverted that thinking. We built this collaboration and sharing engine at the core and then kind of wrap the CAD system around it. But that collaboration sharing and version ING engine is really powerful. And it was that vision that Jim had that he shared that we had from the beginning, which was, how do we take this thing to make a platform that could be used for many other applications inside of inside of any company? And so not only do we have a partner application area that is is much like the APP store or Google play store. Uh, that was sort of our first Stan Shih ation of this. This this platform. But now we're extending out to broader applications and much meatier applications. And internally, that's the thing works in the in the augmented reality. But there'll be other applications that ultimately find its way on top of this platform. And so they'll get all the benefits of of the collaboration, sharing the version ing the multi platform, multi device. And that's an extremely extremely, um, strategic leverage point for the company. >>You know, it's interesting, John, you mentioned the seaport before. So PTC, for those who don't know, built a beautiful facility down at the Seaport in Boston. And, of course, when PTC started, you know, back in the mid 19 eighties, there was nothing at the seaport s. >>So it's >>kind of kind of ironic, you know, we were way seeing the transformation of the seaport. We're seeing the transformation of industry and of course, PTC. And I'm sure someday you'll get back into that beautiful office, you know? Wait. Yeah, I'll bet. And, uh and but I wanna bring this up because I want I want you to talk about the future. How you how you see that our industry and you've observed this has moved from very product centric, uh, plat platform centric with sass and cloud. And now we're seeing ecosystems form around those products and platforms and data flowing through the ecosystem powering, you know, new innovation. I wonder if you could paint a picture for us of what the future looks like to you from your vantage point. >>Yeah, I think one of the key words you said there is data because up until now, data for companies really was sort of trapped in different applications. And it wasn't because people were nefarious and they want to keep it limited. It was just the way in which things were built. And, you know, when people use an application like on shape, what ends up happening is there their day to day interaction and everything that they do is actually captured by the platform. And, you know, we don't have access to that data. Of course it's it's the customer's data. But as as an artifact of them using the system than doing their day to day job, what's happening is they're creating huge amounts of information that can then be accessed and analyzed to help them both improve their design process, improve their efficiencies, improve their actual schedules in terms of making sure they can hit delivery times and be able to understand where there might be roadblocks in the future. So the way I see it is companies now are deploying SAS based tools like on shape and an artifact of them. Using that platform is that they have now analytics and tools to better understand and an instrument and manage their business. And then from there, I think you're going to see, because these systems are all you know extremely well. Architected allow through, you know, very structured AP. I calls to connect other SAS based applications. You're gonna start seeing closed loop sort of system. So, for example, people design using on shape, they end up going and deploying their system or installing it, or people use the end using products. People then may call back into the customers support line and report issues, problems, challenges. They'll be able to do traceability back to the underlying design. They'll be able to do trend analysis and defect analysis from the support lines and tie it back and closed loop the product design, manufacture, deployment in the field sort of cycles. In addition, you can imagine there's many things that air sort of as designed. But then when people go on site and they have to install it. There's some alterations modifications. Think about think about like a large air conditioning units for buildings. You go and you go to train and you get a large air conditioning unit that put up on top of building with a crane. They have to build all kinds of adaptors to make sure that that will fit inside of the particulars of that building. You know, with on shape and tools like this, you'll be able to not only take the design of what the air conditioning system might be, but also the all the adapter plates, but also how they installed it. So it sort of as designed as manufactured as stalled. And all these things can be traced, just like if you think about the transformation of customer service or customer contacts. In the early days, you used to have tools that were PC based tools called contact management solution, you know, kind of act or gold mine. And these were basically glorified Elektronik role in Texas. It had a customer names and they had phone numbers and whatever else. And Salesforce and Siebel, you know, these types of systems really broadened out the perspective of what a customer relationship? Waas. So it wasn't just the contact information it was, you know, How did they come to find out about you as a company? So all of the pre sort of marketing and then kind of what happens after they become a customer and it really was a 3 60 view. I think that 3 60 view gets extended to not just to the customers, but also tools and the products they use. And then, of course, the performance information that could come back to the manufacturer. So, you know, as an engineer, one of the things you learn about with systems is the following. And if you remember, when the CD first came out CDs that used to talk about four times over sampling or eight times over sampling and it was really kind of, you know, the fidelity the system. And we know from systems theory that the best way to improve the performance of a system is to actually have more feedback. The more feedback you have, the better system could be. And so that's why you get 16 60 for example, etcetera. Same thing here. The more feedback we have of different parts of a company that a better performance, The company will be better customer relationships. Better, uh, overall financial performance as well. So that's that's the view I have of how these systems all tied together. >>It's a great vision in your point about the data is I think right on. It used to be so fragmented in silos, and in order to take a system view, you've gotta have a system view of the data. Now, for years, we've optimized maybe on one little component of the system and that sometimes we lose sight of the overall outcome. And so what you just described, I think is, I think sets up. You know very well as we exit. Hopefully soon we exit this this covert era on John. I hope that you and I can sit down face to face at a PTC on shape event in the near term >>in the seaport in the >>seaport would tell you that great facility toe have have an event for sure. It >>z wonderful >>there. So So John McElhinney. Thanks so much for for participating in the program. It was really great to have you on, >>right? Thanks, Dave. >>Okay. And I want to thank everyone for participating. Today we have some great guest speakers. And remember, this is a live program. So give us a little bit of time. We're gonna flip this site over toe on demand mode so you can share it with your colleagues and you, or you can come back and and watch the sessions that you heard today. Uh, this is Dave Volonte for the Cube and on shape PTC. Thank you so much for watching innovation for good. Be well, Have a great holiday. And we'll see you next time. Yeah.

>>from around the globe. It's the Cube presenting innovation for good. Brought to >>you by on shape. Okay, welcome back to innovation. For good. With me is John McElheny, who is one of the co founders of on Shape and is now the VP of strategy at PTC. John, good to see you. Thanks for making the time to come on the program. Thanks, Dave. So we heard earlier some of the accomplishments that you've made since the acquisition. How has the acquisition affected your strategy? Maybe you could talk about what resource is PTC brought to the table that allowed you toe sort of rethink or evolve your strategy? What can you share with us? >>Sure. You know, a year ago when John and myself met with Jim Hempleman early on is we're we're pondering started joining PTC. One of things became very clear is that we had a very clear shared vision about how we could take the on shape platform and really extended for for all of the PTC products, particular sort of their augmented reality as well as their their thing works or the i o. T business and their product. And so from the very beginning, there was a clear strategy about taking on shape, extending the platform and really investing, um, pretty significantly in the product development as well as go to market side of things, uh, toe to bring on shape out to not only the PTC based but sort of the broader community at large. So So So PTC has been terrific. Terrific, um, sort of partner as we've we've gonna go on after this market together. Eso we've added a lot of resource and product development side of things. Ah, lot of resource and to go to market and customer success and support. So really, on many fronts, that's with both resource is, as well a sort of support at the corporate level from from a strategic standpoint and then in the field, we've had wonderful interactions with many large enterprise customers as well as the PTC channels. So it's been really a great a great year. >>Well, and you think about the challenges of your business going to sas what you guys, you know, took on that journey, you know, 78 years ago. Uh, it's not trivial for a lot of companies to make that transition, especially company. That's been around as long as PTC. So So I'm wondering how much you know, I was just asking you what PC PTC brought the table. E gotta believe you're bringing a lot to the table to in terms of the mindset, uh, even things is, is mundane is not the right word. But things like how you compensate sales people, how you interact with customers, the notion of a service versus a product. I wonder if you could address >>that. Yeah, it's a It's a really great point. In fact, after we had met Jim last year, John and I one of the things we walked out in the seaport area in Boston one of things we sort of said is you know, Jim really gets what we're trying to do here and and part of let me bring you into the thinking early on. Part of what Jim talked about is there's lots of, you know, installed base sort of software that's inside of PTC base. That helped literally thousands of customers around the world. But the idea of moving to sass and all that it entails both from a technology standpoint, but also a cultural standpoint, like how do you not not just compensate the sales people as an example? But how do you think about customers? Success? In the past, it might have been that you had professional services that you bring out to a customer, help them deploy your solutions. Well, when you're thinking about a SAS based offering, it's really critical that you get customers successful with it. Otherwise, you may have turned, and you know it will be very expensive in terms of your business long term. So you've got to get customers success with software in the very beginning. So you know, Jim really looked at on shape and he said that John and I from a cultural standpoint, you know, a lot of times companies get acquired and they've acquired technology in the past that they integrate directly into into PTC and then sort of roll it out through their products or their distribution channels, he said. In some respects, John John, think about it as we're gonna take PTC and we want to integrate it into on shape because we want you to share with us both on the sales side and customer success on marketing on operations, you know, all the things because long term, we believe the world is a SAS world, that the whole industry is gonna move too. So, really, it was sort of an inverse in terms of the thought process related to normal transactions >>on that makes a lot of sense to me. You mentioned Sharon turns the silent killer of a SAS company. And you know, there's a lot of discussion, you know, in the entrepreneurial community because you live this, you know, what's the best path? I mean, today, you see, you know, you you watch Silicon Valley double, double, triple triple. But but there's a lot of people who believe, and I wonder, if you come in there is the best path to, you know, in the X Y axis. If if it's if it's, uh, growth on one and retention on the other axis, what's the best way to get to the upper right on? Really, the the best path is probably make sure you've nailed obviously the product market fit, but make sure that you can retain customers and then throw gas on the fire. You see a lot of companies they burn out trying to grow too fast, but they haven't figured out, you know that. But there's too much churn. They haven't figured out those metrics. I mean, obviously on shape. You know, you were sort of a pioneer in here. I gotta believe you've figured out that customer retention before you really? You know, put the pedal to the >>metal. Yeah. And you know, growth growth can mask a lot of things, but getting getting customers, especially the engineering space. Nobody goes and sits there and says, Tomorrow we're gonna go and and, you know, put 100 users on this and and immediately swap out all of our existing tools. These tools are very rich and deep in terms of capability, and they become part of the operational process of how a company designs and builds products. So any time anybody is actually going through the purchasing process, typically they will run a try along or they'll run a project where they look at Kind of What? What is this new solution gonna help them dio. How are we gonna orient ourselves for success? Longer term. So for us, you know, getting new customers and customer acquisition is really critical. But getting those customers to actually deploy the solution to be successful with it. You know, we like to sort of, say, the marketing or the lead generation and even some of the initial sales. That's sort of like the Kindle ing. But the fire really starts when customers deploy it and get successful with the solution because they bring other customers into the fold. And then, of course, if they're successful with it, you know, then in fact, you have negative turn which, ironically, means growth in terms of your inside of your install Bates. >>Right? And you've seen that with some of the emerging, you know, SAS companies, where you're you're actually you know, when you calculate whatever its net retention or renew ALS, it's actually from a dollar standpoint that's up in the high nineties or even over 100% >>so and >>that's a trend we're gonna continue. See, I wonder if we could sort of go back. Uh, and when you guys were starting on shape, some of the things that you saw that you were trying to strategically leverage and what's changed, you know, today we were talking. I was talking to John earlier about in a way, you kinda you kinda got a blank slate is like doing another startup. You're not. Obviously you've got installed base and customers to service, but but it's a new beginning for you guys. So one of the things that you saw then you know, cloud and and sas and okay, but that's we've been there, done that. What are you seeing? You know, today? >>Well, you know, So So this is a journey, of course, that that on shape on its own has gone through. And had, I'll sort of say, you know, several iterations, both in terms of of of, you know, how do you How do you get customers? How do you How do you get them successful? How do you grow those customers? And now that we've been part of PTC, the question becomes okay, One, there is certainly a higher level of credibility that helps us in terms of our our megaphone is much bigger than it was when we're standalone company. But on top of that now, figuring out how to work with their channel with their direct sales force, you know, they have, um, for example, you know, very large enterprises. Well, many of those customers are not gonna go in forklift out their existing solution to replace it with with on shape. However, many of them do have challenges in their supply chain and communications with contractors and vendors across the globe. And so, you know, finding our fit inside of those large enterprises as they extend out with their their customers is a very interesting area that we've really been sort of incremental to to PTC. And then, you know, they they have access to lots of other technology, like the i O. T business. And now, of course, the augmented reality business that that we can bring things to bear. For example, in the augmented reality world they've they've got something called expert capture. And this is essentially imagined, you know, in a are, ah, headset that allows you to be ableto to speak to it but also capture images, still images in video, and you could take somebody who's doing their task and capture literally the steps that they're taking its geo location and from their builds steps for new employees. We'll learn and understand how todo use that technology to help them do their job better. Well, when they do that if there is replacement products or variation of of some of the tools that that they built the original design instruction set for they now have another version. Well, they have to manage multiple versions. Well, that's what on shape is really great at doing and so taking our technology and helping their solutions as well. So it's not only expanding our customer footprint, it's expanding the application footprint in terms of how we can help them and help customers. >>So that leads me to the tam discussion. And again, it was part of your strategist role. How do you think about that? Was just talking to some of your customers earlier about the democratization of cat and engineering. You know, I kind of joked, sort of like citizen engineering, but but so that, you know, the demographics are changing the number of users potentially that can access the products because the it's so much more of a facile experience. How are you thinking about the total available market? >>It really is a great question, you know, It used to be when you when you sold boxes of software, it was how many engineers were out there, and that's the size of the market. The fact that matter is now when, When you think about access to that information, that data is simply a pane of glass. Whether it's a computer, whether it's a laptop, uh, a cell phone or whether it's a tablet, the ability to to use different vehicles, access information and data expands the capabilities and power of a system to allow feedback and iteration. I mean, one of the one of the very interesting things is in technology is when you can take something and really unleash it to a larger audience and builds, you know, purpose built applications. You can start to iterate, get better feedback. You know, there's a classic case in the clothing industry where Zara, you know, is a fast, sort of turnaround agile manufacturer. And there was a great New York Times article written a couple years ago. My wife's a fan of Zara, and I think she justifies any purchases by saying, you know, was Are you gotta purchase it now. Otherwise it may not be there the next time. Yet you go back to the store. They had some people in the store in New York that had this woman's throw kind of covering Shaw, and they said, Well, it would be great if we could have this little clip here so we could hook it through or something. And they sent a note back toe to the factory in Spain and literally two weeks later they had, you know, 4000 of these things in store, and they sold out because they had a closed loop and iterative process. And so if we could take information and allow people access in multiple ways through different devices and different screens, that could be very specific information that, you know, we remove a lot of the engineering data book, bring the end user products conceptually to somebody that would have had to wait months to get the actual physical prototype, and we could get feedback. Well, Weaken have a better chance of making sure whatever product we're building is the right product when it ultimately gets delivered to a customer. So it's really it's a much larger market that has to be thought of rather than just the kind of selling a boxes off where to an engineer, >>that's a great story, and and again, it's gotta be exciting for you guys to see that on day with the added resource is that you have a PTC eso. Let's talk. I promise people we want to talk about Atlas. Let's talk about the platform. A little bit of Atlas was announced last year. Atlas. For those who don't know it's a SAS space platform, it purports to go beyond product lifecycle management and you you're talking cloudlike agility and scale to CAD and product design. But, John, you could do a better job than I. What do >>we need to know about Atlas? Well, I think Atlas is a great description because it really is metaphorically, sort of holding up all of the PTC applications themselves. But from the very beginning, when John and I met with Jim, part of what we were intrigued about was that he shared a vision that on shape was more than just going to be a cad authoring tool that, in fact, you know, in the past, these engineering tools were very powerful, but they were very narrow in their purpose and focus, and we had specialty applications to manage diversions, etcetera. What we did in on shape is we kind of inverted that thinking we built this collaboration and sharing engine at the core and then kind of wrap the CAD system around it. But that collaboration sharing and version ING engine is really powerful. And it was that vision that Jim had that he shared that we had from the beginning, which was, how do we take this thing to make a platform that could be used for many other applications inside of inside of any company? And so not only do we have a partner application area that is is much like the APP store or Google play store. Uh, that was sort of our first misty initiation of this this this platform. But now we're extending out to broader applications and much meatier applications. And internally, that's the thing works in the in the augmented reality. But there'll be other applications that ultimately find its way on top of this platform, and so they'll get all the benefits of of the collaboration, sharing the version ing the multi platform multi device. And that's an extremely extremely, um, strategic leverage point for the company. >>You know, it's interesting, John, you mentioned the seaport before, So PTC For those who don't know built a beautiful facility down at the seaport in Boston. And of course, when PTC started back in the mid 19 eighties, this there was nothing at the seaport s. >>So it's >>kind of kind of ironic, you know, we were way seeing the transformation of the seaport. We're seeing the transformation of industry and of course, PTC. And I'm sure someday you'll get back into that beautiful office, you know? Wait. Yeah, I'll Bet. And, uh and but I wanna bring this up because I want I want you to talk about the future. How you how you see that our industry and you've observed this has moved from very product centric, uh, plat platform centric with sass and cloud. And now we're seeing ecosystems form around those products and platforms and in data flowing through the ecosystem, powering you new innovation. I wonder if you could paint a picture for us of what the future looks like to you from your vantage point. >>Yeah, I think one of the key words you said there is data because up until now, data for companies really was sort of trapped in different applications. And it wasn't because people with nefarious and they want to keep it limited. It was just the way in which things were built, and you know, when people use an application like on shape, what ends up happening is there their day to day interactions and everything that they dio is actually captured by the platform. And you know, we don't have access to that data. Of course it's it's the customer's data. But as as an artifact of them using the system than doing their day to day job, what's happening is they're creating huge amounts of information that can then be accessed and analyzed to help them both improve their design process, improve their efficiencies, improve their actual schedules in terms of making sure they can hit delivery times and be able to understand where there might be roadblocks in the future. So the way I see it is, companies now are deploying SAS based tools like an shape and an artifact of them. Using that platform is that they have now analytics and tools to better understand and an instrument and manage their business. And then from there, I think you're going to see, because these systems are all you know extremely well. architected allow through, you know, very structured AP. I calls to connect other SAS based applications. You're gonna start seeing closed loop sort of system. So, for example, people design using on shape. They end up going and deploying their system or installing it, or people use the end using products. People then may call back into the customers support line and report issues problems, challenges. They'll be able to do traceability back to the underlying design. They'll be able to do trend analysis and defect analysis from the support lines and tie it back and closed loop the product design, manufacture, deployment in the field sort of cycles. In addition, you can imagine there's many things that air sort of as designed. But then when people go on site and they have to install it, there's some alterations modifications. Think about think about like a large air conditioning units for buildings. You go and you go to train and you get a large air conditioning unit that put up on the top of building with a crane. They have to build all kinds of adaptors to make sure that that will fit inside of of of the particulars of that building. You know, with on shape and tools like this, you'll be able to not only take the design of what the air conditioning system might be, but also the all the adapter plates, but also how they installed it. So it sort of as designed as manufactured as stalled. And all these things can be traced just like if you think about the transformation of customer service or customer contacts. In the early days, you used to have tools that were PC based tools called contact management solution, you know, kind of act or gold mine. And these were basically glorified Elektronik role in Texas. It had a customer names, and they had phone numbers and whatever else. And Salesforce and Siebel, these types of systems really broadened out the perspective of what a customer relationship waas. So it wasn't just the contact information it was, you know, How did they come to find out about you as a company? So all the pre sort of marketing and then kind of what happens after they become a customer and it really was a 3 60 view. I think that 3 60 view gets extended to not just to the customers, but also tools and the products they use. And then, of course, the performance information that could come back to the manufacturer. So, you know, as an engineer, one of the things you learn about with systems is the following. And if you remember, when the 501st came out CDs that used to talk about four times over sampling or eight times over sampling and it was really kind of, you know, the fidelity the system. And we know from systems theory that the best way to improve the performance of a system is to actually have more feedback. The more feedback you have, the better system could be. And so that's why you got 16 60 for example, etcetera. Same thing here. The more feedback we have of different parts of a company that a better performance. The company will be better customer relationships, better overall financial performance as well. So that's that's the view I have of how these systems all tied together. >>The great vision in your point about the data is, I think, right on. It used to be so fragmented in silos, and in order to take a system view, you've gotta have a system view of the data. Uh, for years we've optimized maybe on one little component of the system and that sometimes we lose sight of the overall outcome. And so what you just described, I think is, I think sets up. You know very well as we exit. Hopefully soon we exit this this covert era on John. I hope that you and I can sit down face to face at a PTC on shape event in the near term. Who's >>in the seaport in the >>seaport Would tell you that great facility toe have have an event for sure. It >>z wonderful >>there. So So, John McElhinney. Thanks so much for for participating in the program. It was really great to have you on. >>Right. Thanks, Dave. >>Okay. And I want to thank everyone for participating. Today. We have some great guest speakers. And remember, this is a live program, so give us a little bit of time. We're gonna flip this site over to on demand mode so you can share it with your colleagues and you, or you can come back and and watch the sessions that you heard today. Uh, this is Dave Volonte for the Cube and on shape PTC. Thank you so much for watching innovation for good. Be well, have a great holiday and we'll see you next time.