>> From the Cube Studios in Palo Alto in Boston bringing you data driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Is the glass half full or half empty? Well, it depends on how you want to look at it. CIOs are tapping the breaks on spending, that's clear. The latest macro survey data from ETR quantifies what we already know to be true, that IT spend is decelerating. CIOs and IT buyers forecast that their tech spend will grow by 5.5% this year. That's a meaningful deceleration from near year end 2021 expectations. But these levels are still well above historical norms. So while the feel good factor may be in some jeopardy, overall things are pretty good, at least for now. Hello and welcome to this week's Wikibon Cube Insights powered by ETR. In this Breaking Analysis, we update you in the latest macro tech spending data from Enterprise Technology Research, including strategies that organizations are employing to cut costs, and which project categories continue to see the most traction. Now, CIOs were much more optimistic at the end of last year than they are today. Back then they thought their aggregates spend would increase by more than 8%. Of course, at that time the expectation was that the economy was ready to make a semi ordered return to normal, and that didn't happen as you well know. And you can see here the expectation for spending this year is down to 5.5% growth, as we said, and this is based on the most recent ETR CIO and IT buyer survey, which includes more than 1100 responses. So we started the year above 8% then made a meaningful decline into the mid sixes and nine months into the year, we're now in the mid fives, but this is still two to 300 basis points above historical norms for IT spending. And looking ahead to next year, CIOs are expecting accelerated growth edging back up toward that 6% level. Now as noted here, the visibility on this is probably less clear than pre COVID years of course, but the bottom line is digital transformations are continuing to push it spending above historical levels. Now the problem as we know, is earning estimates are coming down and forecasts are being lowered every day. I mean, as the saying goes the first disappointment is rarely the last. Even the semiconductor industry is seeing softness. Just this past week we saw AMD lower its quarterly revenue forecast by more than a billion dollars, as PC demand in the second half has significantly softened. But again, that's relative to some pretty amazing PC growth in the past couple of years thanks to the isolation economy. So we do see CIOs tapping the brakes, and these data points here tell an interesting story. ETR asked respondents about various actions that they're taking and these two stood out. The top line is, "We're accelerating new IT projects," and the bottom line is, "We're freezing IT projects," and you can see the convergence of those two lines, which of course signals the down. But again, these are not alarming data points. If you think about history. If you go back to Q1 2020, for example, just before the pandemic, that top line that was at 12% versus where it is today at 25%. And if you look at project freezes, they were at 22% in Q1 of 2020, which is significantly higher than today. So relatively speaking the spending dynamic is still strong. It just doesn't feel that way because we're coming out of an historic anomaly. Now, ETR asked a follow up question to respondents that indicated that spending would be down this quarter relative to the same quarter last year. So they wanted to better understand the most common actions that organizations would take to save money, and that's what this chart shows. The most common approach is still to consolidate redundant vendors across the lines of business. That was over 30%, as you can see here in the first set of bars. So presumably CIOs now have the latitude to go after so-called shadow projects, shadow IT, and implement standards across the organization via vendor consolidation. As well, there's a big jump in the survey from 14% to 20% of respondents saying that they were going after the Cloud bill, and that relates to the fourth set of bars which is scrutinizing consumption based services. So combined, 45% of respondents are looking at reducing their on demand spend. Now, some of that may be SaaS related, but most of the SaaS spend is committed, so pre-committed, but we do see organizations doing more audits and trying to eliminate or reduce orphaned licenses. Now the last data point that we want to focus on is the technology sectors that are of the highest priority. You can see here on the set of bars on the left while cybersecurity remains the top technology area, even this sector is showing a little bit of softness. What's really notable is the uptick in data related areas, that second set of bars, this category is now the second most cited, taking over from Cloud, which as you can see, remain strong, and of course Cloud continues to be a key component of digital transformations. As we've previously reported, machine learning, AI, and RPA are somewhat more strategic and more discretionary, and they've dropped below the 40% mark in terms of net score in the overall survey. We're not showing that data here, but we covered this in our last Breaking Analysis ahead of our UI path event. Now you have to remember these are the top seven sectors, and there are dozens in the ETR taxonomy, so making this list is goodness from a spending perspective. So even though there's some softness in most of these categories, these are the ones CIOs are most focused on addressing. So the big takeaways of this data are spending targets are coming down to the mid 5% range, but this is meaningfully higher than historical norms. And while CIOs, they are pumping the brakes on projects, they're still moving forward at rates faster than pre COVID levels and they're freezing fewer projects. Remember, this as well, this could be a skill shortage in play, but the slowdown is more likely related to the economic uncertainty. You know, we're seeing the two-sided coin of pay by the drink consumption models, right? You can dial it up as as you need to but you can also dial it down, and that's one of the alluring features of on demand. And we're seeing firms give more scrutiny to the Cloud bill, why wouldn't they? And there's a bit of unsurprising backlash to the flaws in today's SaaS pricing model that locks you in for specified terms. So people, when their term comes up are really going to scrutinize whether or not they have orphan licenses and try to reduce those. And it appears that the real savings can come from eliminating redundant vendors. That seems to be the biggest, you know, number one strategy, and that could favor some of the larger firms, think Oracle, Dell, Salesforce ServiceNow, IBM, HPE, Cisco, and others, you know, they may benefit from having more of larger footprint across the organization. You know, having that one throat to choke, you know one back to pat, as some like to say, but they could benefit those larger companies in least in the near term. Now having said that, we do see an uptick in data related areas as a priority for CIOs, and that could mean companies like Snowflake are in a strong position and can continue to thrive. You know, even though as we reported a couple of weeks ago, virtually all companies and sectors in the ETR data set are showing some softness related to spending a momentum from previous quarters. ETR will have its... will release its results next week and then we'll dig into the specific vendor action relative to previous quarters. So look, it feels like a meaningful slowdown but the sky is by no means falling. There are these kind of out of our control factors like interest rates, and Ukraine, and oil supply, and wages, et cetera, that are creating this uncertainty and causing firms to be more cautious. But generally we remain optimistic as leading tech companies are pretty well managed and have a lot of runway on the balance sheets, and can adjust costs to reflect the uncertain environment and remain flexible in their business models in doing so. Okay, that's it for today. Thanks to Alex Myerson who's on production and he also manages the podcast for Breaking Analysis. Ken Schiffman is also out of our Boston studio as well. Kristin Martin and Cheryl Knight, they help get the word out on social media and in our newsletters, and Rob Hof is our editor in chief over at Silicon Angle who posts our Breaking Analysis and does some great editing. So thank you to all. Remember all these episodes are available as podcasts. Wherever you listen all you got to do is search Breaking Analysis podcast. I publish each week on wikibon.com and siliconangle.com, and you can email me at david.vellante@siliconangle.com or DM me @dvellante, or feel free to comment on our LinkedIn posts. And please do check out etr.ai for the best survey data in the enterprise tech business. This is Dave for the theCUBE Insights powered by ETR. Thanks for watching and we'll see you next time on Breaking Analysis. (relaxing music)

(upbeat music) >> Hello and welcome to today's session, theCUBE's presentation of the AWS Startup Showcase, New Breakthroughs in DevOps, Data Analytics, Cloud Management Tools, featuring Ascend.io for the data and analytics track. I'm your host, John Furrier with theCUBE. Today, we're proud joined by Sean Knapp, CEO and founder of Ascend.io and Jason Robinson who's the VP of Data Science and Engineering at Steady. Guys, thanks for coming on and congratulations, Sean, for the continued success, loves our cube conversation and Jason, nice to meet you. >> Great to meet you. >> Thanks for having us. >> So, the session today is really kind of looking at automating analytics workloads, right? So, and Steady as a customer. Sean, talk about the relationship with the customer Steady. What's the main product, what's the core relationship? >> Yeah, it's a really great question. when we work with a lot of companies like Steady we're working hand in hand with their data engineering teams, to help them onboard onto the Ascend platform, build these really powerful data pipelines, fueling their analytics and other workloads, and really helping to ensure that they can be successful at getting more leverage and building faster than ever before. So we tend to partner really closely with each other's teams and really think of them even as extensions of each other's own teams. I watch in slack oftentimes and our teams just go back and forth. And it's like, as if we were all just part of the same company. >> It's a really exciting time, Jason, great to have you on as a person cutting your teeth into this kind of what I call next gen data as intellectual property. Sean and I chat on theCUBE conversation previous to this event where every company is a data company, right? And we've heard that cliche. >> Right. >> But it's true, right? It's going to, it's getting more powerful with the edge. You seeing more diverse data, faster data, small, big, large, medium, all kinds of different aspects and patterns. And it's becoming a workflow kind of intellectual property paradigm for companies, not so much. >> That's right. >> Just the tech it's the database is you can, it's the data itself, data in flight, it's moving around, it's got value. What's your take-- >> Absolutely. >> On this trend? >> Basically, Steady helps our members and we have a community of members earn more income. So we want to help them steady their financial lives. And that's all based on data, so we have a web app, you could go to the iOS Store, you could go to the Google Play Store, you can download the app. And we have a large number of members, 3 million plus, who are actively using this. And we also have a very exciting new product called income passport. And this helps 1099 and mixed wage earners verify their income, which is very important for different government benefits. And then third, we help people with emergency cash grants as well as awards. So all of that is built on a bedrock of data, so if you're using our apps, it's all data powered. So what you were mentioning earlier from pipelines that are running it real time to yeah, anything, that's a kind of a small data aggregation, we do everything from small to real-time and large. >> You guys are like a multiple sided marketplace here, you've got it, you're a FinTech app, as well as the future of work and with virtual space-- >> That's right. >> Happening now, this is becoming, actually encapsulates kind of the critical problems that people trying to solve right now, you've got multiple stakeholders. >> That's right. >> In the data. >> Yes, we absolutely do. So we have our members, but we also, within the company, we have product, we have strategy, we have a growth team, we have operations. So data engineering and data science also work with a data analytics organization. So at Steady we're very much a data company. And we have a data organization led by our chief data officer and we have data engineering and data science, which are my teams, but also that business insights and analytics. So a lot of what we're building on the data engineering side is powering those insights and analytics that the business stakeholders use every day to run the organization. >> Sean, I want to get your thoughts on this because we heard from Emily Freeman in the keynote about how this revolution in DevOps or for premiering her talk around how, it's not just one persona anymore, I'm a release engineer, I'm this kind of engineer, you're seeing now all engineering, all developers are developers. You have some specialty, but for the most part, the team makeups are changing. We touched on this in our cube conversation. The journey of data is not just the data people, the data folks. It's like there's, they're developers too. So the confluence of data science, data management, developing, is changing the team and cultural makeup of companies. Could you share your thoughts on this dynamic and how it impacts customers? >> Absolutely, I think the, we're finding a similar trend to what we saw a number of years ago, when we talked about how software was eating the world and every company was now becoming a software company. And as a result, we saw this proliferation and expansion of what the software roles look like and thought of a company pulled through this entire new era of DevOps. We were finding that same pattern now emerging around data as not only is every company a software company, every company is a data company and data really is that field, that oil that fuels the business and in doing so, we're finding that as Jason describes it's pervasive across the team, it is no longer just one team that is creating some insights and reports around operational analytics, or maybe a team over here doing data science or machine learning. It is expensive. And I think the really interesting challenges that start to come with this too, are so many data teams are so over capacity. We did a recent study that highlighted that 96% of data teams are at, or over capacity, only 4% had spare capacity. But as a result, the net is being cast even wider to pull in people from even broader and more adjacent domains to all participate in the data future of their organization. >> Yeah, and I think I'd love to get your guys react to this conversation with Andy Jassy, who's now the CEO of Amazon, but when he was the CEO of AWS last year, I talked with him about how the old guard and new guard are thinking around team formations. Obviously team capacity is growing and challenged when you've got the right formula. So that's one thing, right? But what if you don't have the right formula? If you're in the skills gap, problem, or team formation side of it, where you maybe there was two years ago where the mandate came down? Well, we got to build a data team even in two years, if you're not inquisitive. And this is what Andy and I were talking about is the thinking and the mindset of that mission and being open to discovering and understanding the changes, because if you were deciding what your team was two, three years ago, that might have changed a lot. So team capacity, Sean, to your point, if you got it right, and that's a challenge in and of itself, but what if you don't have it, right? What do you guys think about this? >> Yeah, I think that's exactly right. Basically trying to see, look and gaze into the crystal ball and see what's going to happen in a year or two years, even six months is quite difficult. And if you don't have it right, you do spend a lot of time because of the technical debt that you've amassed. And we certainly spend quite a bit of time with technical debt for things we wanted to build. So, deconvolving that, getting those ETLs to a runnable state, getting performance there, that's what we spend a bit of time on. And yeah, it's something that it's really part of the package. >> What do you guys see as the big challenge on teams? The scaling challenge okay. Formation is one thing, Sean, but like, okay, getting it right, getting it formed properly and then scaling it, what are the big things you're seeing? >> One of the, I think the overarching management themes in general, it is the highest out by the highest performing teams are those where the individual with the context and the idea is able to execute as far and as fast and as efficiently as possible, and removing a lot of those encumbrances and put it a slightly different way. If DevOps was all basically boiled down to, how do we help more people write more software faster and safely data ops would be very similarly, how do we enable more people to do more things with data faster and safely? And to do that, I think the era of these massive multi-year efforts around data are gone and hopefully in the not too distant future, even these multi-quarter efforts around data are gone and we get into a much more agile, nimble methodology where smaller initiatives and smaller efforts are possible by more diverse skillsets across the business. And really what we should be doing is leveraging technology and automation to ensure that people are able to be productive and efficient and that we can trust our data and that systems are automated. And these are problems that technology is good at. And so in many ways, how in the early days Amazon would described as getting people out of the muck of DevOps. I think we're going to do the same thing around getting people out of the muck of the data and get them really focused on the higher level aspects. >> Yeah, we're going to get into that complexity, heavy lifting side muck, and then the heavy lifting taking away from the customers. But I want to go back to real quick with Jason while we're on this topic. Jason, I was just curious, how much has your team grown in the recent year and how much could've, should've grown, what's the status and how has Ascend helped you guys? What's the dynamic there? ' Cause that's their value proposition. So, take us through that. >> Absolutely, so, since the beginning of the year data engineering has doubled. So, we're a lean team, we certainly use the agile mindset and methodologies, but we have gone from, yeah, we've essentially doubled. So a lot of that is there's just so much to do and the capacity problem is certainly there. So we also spend a lot of time figuring out exactly what the right tooling is. And I was mentioning the technical debt. So you have those, there's the big O notation of whatever that involves technical debt. And when you're building new things, you're fixing old things. And then you're trying to maintain everything. That scaling starts to hit hard. So even if we continue to double, I mean, we could easily add more data engineers. And a lot of that is, I mean, you know about the hiring cycles, like, a lot of of great talent, but it's difficult to make all of those hires. So, we do spend quite a bit of time thinking about exactly what tools data engineering is using day-to-day. And what I mentioned, were technologies on the streaming side all the way to like the small batch things, but, like something that starts as a small batch getting grow and grow and grow and take, say 15 hours, it's possible, I've seen it. But, and getting that back down and managing that complexity while not overburdening people who probably don't want to spend all their waking hours building ETLs, maintaining ETL, putting in monitoring, putting in alerting, that I think is quite a challenge. >> It's so funny because you mentioned 18 hours, you got to kind of being, you didn't roll your eyes, but you almost did, but this is, but people want it yesterday, they want real time, so there's a lot of demand-- >> Yes. >> On the minds of the business outcome side of it. So, I got to ask you, because this comes up a lot with technical debt, and now we're starting to see that come into the data conversation. And so I always curious, is there a different kind of technical debt with data? Because again, data is like software, but it's a little bit of more elusive in the sense it's always changing. So is there, what kind of technical debt do you see in the data side that's different than say software side? >> Absolutely, now that's a great question. So a lot of thinking about your data and structuring your data and how you want to use that data going into a particular project might be different from what happens after stakeholders have a new considerations and new products and new items that need to be built. So thinking about how that, let's say you have a document store, or you have something that you thought was going to be nice and structured, how that can evolve and support those particular products can essentially, unless you take the time and go through and say, well, let's architect it perfectly so that we can handle that. You're going to make trade-offs and choices, and essentially that debt builds up. So you start cutting corners, you start changing your normalization. You start essentially taking those implicit schema that then tend to build into big things, big implicit schema. And then of course, with implicit schema, you're going to have a lot of null values, you're going to have a lot of items to deal with. So, how do you deal with that? And then you also have the opportunity to create keys and values and oops, do we take out those keys that were slightly misspelled? So, I could go on for hours, but basically the technical debt certainly is there with on data. I see a lot of this as just a spectrum of technical debt, because it's all trade-offs that you made to build a product, and the efficiency has start to hit you. So, the 15 hour ETL, I was mentioning, basically you start with something and you were building things for stakeholders and essentially you have so much complex logic within that. So for the transforms that you're doing from if you're thinking of the bronze, silver, gold, kind of a framework, going from that bronze to a silver, you may have a massive number of transformations or just a few, just to lightly dust it. But you could also go to gold with many more transformations and managing that, managing the complexity, managing what you're spending for servers day after day after day. That's another real challenge of that technical debt stuff. >> That's a great lead into my next question, for Sean, this is the disparate system complexity, technical debt and software was always kind of the belief was, oh yeah, I'll take some technical debt on and work it off once I get visibility and say, unit economics or some sort of platform or tool feature, and then you work it off as fast as possible. I was, this becomes the art and science of technical debt. Jason, what you're saying is that this can be unwieldy pretty quickly. You got state and you got a lot of different inter moving parts. This is a huge issue, Sean, this is where it's, technical debt in the data world is much different architecturally. If you don't get it right, this is a huge, huge issue. Could you aluminate why that is and what you guys are doing to help unify and change some of those conditions? >> Yeah, absolutely. When we think about technical debt and I'll keep drawing some parallels between DevOps and data ops, 'cause I think there's a tremendous number of similarities in these worlds. We used to always have the saying that "Your tech debt grows manually across microservices, "but exponentially within services." And so you want that right level of architecture and composibility if you will, of your systems where you can deploy changes, you can test, you can have high degrees of competence and the roll-outs. And I think the interesting part in the data side, as Jason highlighted, the big O-notation for tech debt in the data ecosystem, is still fairly exponential or polynomial in nature. As right now, we don't have great decomposition of the components. We have different systems. We have a streaming system, we have a databases, we have documents, doors and so on, but how the whole data pipeline data engineering part works generally tends to be pretty monolithic in nature. You take your whole data pipeline and you deploy the whole thing and you basically just cross your fingers, and hopefully it's not 15 hours, but if it is 15 hours, you go to sleep, you wake up the next morning, grab a coffee and then maybe it worked. And that iteration cycle is really slow. And so when we think about how we can improve these things, right? This is combinations of intelligent systems that do instantaneous schema detection, and validation, excuse me, it's combinations of things that do instantaneous schema detection and validation. It's things like automated lineage and dependency tracking. So you know that when you deploy code, what piece of data it affects, it's things like automated testing on individual core parts of your data pipelines to validate that you're getting the expected output that you need. So it's pulling a lot of these same DevOps style principles into the data world, which is really designed to going back to how do you help more people build more things faster and safely really rapid iterations for rapid feedback. So you know if there's breaks in the system much earlier on. >> Well, I think Sean, you're onto something really big there. And I think this is something that's emerging pretty quickly in the cloud scale that I called, 2.0, whatever, what version we're in, is the systems thinking mindset. 'Cause you mentioned the model that that was essentially a silo or subsystem. It was cohesive in it's own way, but now it's been monolithic. Now you have a broken down set of decomposed sets of data pieces that have to work together. So Jason, this is the big challenge that everyone, not really people are talking about, I think most these guys are, and you're using them. What are you unifying? Because this is a systems operating systems thinking, this is not like a database problem. It's a systems problem applied to data where databases are just pieces of it, what's your thoughts? >> That's absolutely right. And I would, so Sean touched on composibility of ETL and thinking about reusable components, thinking about pieces that all fit together, because as you're building something as complex as some of these ETS are, we do think about the platform itself and how that lends to the overarching output. So one thing, being able to actually see the different components of an ETL and blend those in and you as the dry principal, don't repeat yourself. So you essentially are able to take pieces that one person built, maybe John builds a couple of our connectors coming in, Sean also has a bunch of transforms and I just want this stuff out, so I can use a lot of what you guys have already built. I think that's key, because a lot of engineering and data engineering is about managing complexity. So taking that complexity and essentially getting it out fast and getting out error free, is where we're going with all of the data products we're building. >> What are some of the complexity that you guys have that you're dealing with? Can you be specific and share what these guys are doing to solve that problem for you? That's, this is a big problem everyone's having, I'm seeing that all over the place. >> Absolutely, so I could start at a couple of places. So I don't know if you guys are on the three Vs, four Vs or five Vs, but we have all of those. And if you go to that five, four or five V model, there is the veracity piece, which you have to ask yourself, is it true? Is it accurate when? So change happens throughout the pipeline, change can come from web hooks, change can come from users. You have to make sure that you're managing that complexity and what we we're building, I mentioned that we are paying down a lot of tech debt, but we're also building new products. And one pretty challenging, quite challenging ETL that we're building is something going from a document store to an analytical application. So in that document store, we talked about flexible schema. Basically, you don't really know exactly what you're going to get day to day, and you need to be able to manage that change through the whole process in a way that the ultimate business users find value. So, that's one of the key applications that we're using right now. And that's one that the team at Ascend and my team are working hand in hand going through a lot of those challenges. And it's, I also watch the slack just as Sean does, and it's a very active discussion board. So it is essentially like they're just partnering together. It's fabulous, but yeah-- >> And you're seeing kind of a value on this too, I mean, in terms of output what's the business results? >> Yes, absolutely. So essentially this is all, so yes, the fifth V value. So, getting to that value is essentially, there were a few pieces of the, to the value. So there's some data products that we're building within that product and their data science, data analytics based products that essentially do things with the data that help the user. There's also the question of exactly the usage and those kinds of metrics that people in ops want to understand as well as our growth team. So we have internal and external stakeholders for that. >> Jason, this is a great use case, a great customer, Sean, you guys are automating. For the folks watching, who were seeing their peer living the dream here and the data journey, as we say, things are happening. What's the message to customers that you guys want to send because you guys are really cutting your teeth into a whole another level of data engineering, data platform. That's really about the systems view and about cloud. What's the pitch, Sean? What should people know about the company? >> Absolutely, yeah, well, so one, I'd say even before the pitch, I would encourage people to not accept the status quo. And in particular, in data engineering today, the status quo is an incredibly high degree of pain and discomfort. And I think the important part of why Ascend exists and why we're so helpful for our customers, there is a much more automated future of how we build data products, how we optimize those and how we can get a larger cohort of builders into the data ecosystem. And that helps us get out of the muck as we talked about before and put really advanced technology to work for more people inside of our companies to build these data products, leveraging the latest and greatest technologies to drive increased business value faster. >> Jason, what's your assessment of these guys, as people are watching might say, hey, you know what, I'm going to contact them, I need this. How would you talk about Ascend into your peers? >> Absolutely, so I think just thinking about the whole process has been a great partnership. We started with a POC, I think Ascend likes to start with three use cases, I think we came out with four and we went through the ones that we really cared about and really wanted to bring value to the company with. So we have roadmaps for some, as we're paying down technical debt and transitioning, others we can go directly to. And I think that thinking about just like you're saying, John, that systems view of everything you're building, where that makes sense, you can actually take a lot of that complexity and encapsulate it in a way that you can essentially manage it all in that platform. So the Ascend platform has the composibility piece that we touched on. It also, not only can you compose it, but you can drill into it. And my team is super talented and is going to drill into it. So basically loves to open up each of those data flows each of the components therein and has the control there with the combination of Spark Sequel, PI Spark SQL Scala and so on. And I think that the variety of connections is also quite helpful. So thinking about the dry principle from a systems perspective is extremely useful because it's dry, you often get that in a code review, right? I think you can be a little bit more dry here. >> Yeah. >> But you can really do that in the way that you're composing your systems as well. >> That's a great, great point. One quick thing for the folks that they're watching that are trying to figure this out, and a lot of architecture is going on. A lot of people are looking at different solutions. What things have you learned that you could give them a tip like to avoid like maybe some scar tissue or tips of the trade, where you can say, hey, this way, be careful, what's some of the learnings? Could you give a few pointers to folks out there, if they're kicking tires on the direction, what's the wrong direction? What's the right direction look like? >> Absolutely, I think that, I think it through, and I don't know how much time we have that, that feels like a few days conversation as far as ways to go wrong. But absolutely, I think that thinking through exactly where want to be is the key. Otherwise it's kind of like when you're writing a ticket on Jarrah, if you don't have clear success criteria, if you don't know where you going to go, then you'll end up somewhere building something and it might work. But if you think through your exact destination that you want to be at, that will drive a lot of the decisions as you think backwards to where you started. And also I think that, so Sean also mentioned challenging the status quo. I think that you really have to be ready to challenge the status quo at every step of that journey. So if you start with some particular service that you had and its legacy, if it's not essentially performing what you need, then it's okay to just take a step back and say, well, maybe that's not the one. So I think that thinking through the system, just like you were saying, John, and also I think that having a visual representation of where you want to go is critical. So hopefully that encapsulates a lot of it, but yes, the destination is key. >> Yeah, and having an engineering platform that also unifies the multiple components and it's agile. >> That's right. >> It gets you out of the muck and on the last day and differentiate heavy lifting is a cloud plan. >> Absolutely. >> Sean, wrap it up for us here. What's the bumper sticker for your vision, share your founding principles of the company. >> Absolutely, for us, we started the company as a former in recovery and CTO. The last company I founded, we had nearly 60 people on our data team alone and had invested tremendous amounts of effort over the course of eight years. And one of the things that I've learned is that over time innovation comes just as much from deciding what you're no longer going to do as what you're going to do. And focusing heavily around, how do you get out of that muck? How do you continue to climb up that technology stack? Is incredibly important. And so really we are excited to be a part of it and taking the industry is continuing to climb higher and higher level. We're building more and more advanced levels of automation and what we call our data awareness into the automated engine of the Ascend platform that takes us across the entire data ecosystem, connecting and automating all data movement. And so we have a very exciting vision for this fabric that's emerging over time. >> Awesome, Sean, thank you so much for that insight, Jason, thanks for coming on customer of Ascend.io. >> Thank you. >> I appreciate it, gentlemen, thank you. This is the track on automating analytic workloads. We here at the end of us showcase, startup showcase, the hottest companies here at Ascend.io, I'm John Furrier, with theCUBE, thanks for watching. (upbeat music)

>> Announcer: Live from Las Vegas, it's The Cube, covering AWS re:Invent 2019 brought to you by Amazon Web Services and Intel along with its ecosystem partners. >> Welcome back to Las Vegas, everybody. You're watching The Cube. We go out to the events and we extract the signal from the noise. My name is Dave Velante and I'm excited to have Veeam on the program. Good friend Rick Vanover is here. Rick, it's great to see you again. >> Thanks, Dave. >> He's the Senior Director of Product Strategy at Veeam, and Jim Kruger is the newly minted CMO. Jim, good to see you, thank for coming on. >> Great, thank you Dave. Thanks for having us. >> All right, so, let's talk about re:Invent. You guys are well known in the VMware community of course. Now the cloud comes in, you guys rose like a rocket ship with virtualization. Now cloud's here. How's the show going for you? What are the conversations like? >> Yeah, it's great. I mean, this is a continuation of the relationship that we have with AWS. We were a global sponsor and one of five companies represented in the global summit so that was a lead up to this. >> Which was today, this morning the partner summit, or the earlier partner summit. >> No, throughout the whole year. There's 30 different locations throughout the world that we sponsored and so that was a really good entry into this new audience for us in terms of new buyers and so forth. And re:Invent is huge. I mean, you can't even walk in the hallways out there. Our booth has been packed and just some really good conversations. We had a great announcement as a part of the show, so it's going great. >> Let's talk about that for sure. So, give us the update on 2019. You guys hit the billion dollar milestone. We covered you at VeeamON. We've been there for the last couple years, so congratulations on that. >> Jim: Thank you. Which of course is challenging because you're doing a lot more annual recurring revenue. You're still able to break through that billion dollar mark but give us an update on 2019. >> Yeah, so far so good, it's going well. We're going through a transition here. We call it act one to act two. And act one was really the foundation of the company focusing on virtual environments. Act two is really moving into the cloud and also moving from perpetual to subscription. And so we're going through that transition as we speak and we're finding really good success. We're really letting the market dictate that transition. We're not really forcing things on customers, but we had a really good Q3. We grew our annual recurring revenue by 24%. Our enterprise business is actually the fastest growing business within Veeam. It's growing at, it grew 20% year over year. And our alliances are really on fire. Year over year for our alliances, for our resellers, we have four of them, grew 92%. So, we're outgrowing the market significantly, continuing to gain market share. We're still number one in Europe and number four globally but catching up quick. >> So, Rick, when I first was introduced to Veeam I think it was at some VeeamUG somewhere, like "It's an interesting name, who are these guys?" And then saw you guys take off and it coincided with a big simplification theme and better resource allocation. We got all this wasted server capacity. But the problem was when we consolidated all those servers we now had less utilization or less capacity to drive things like backup which was a compute-hungry workload. You guys figured that out from a product standpoint. You simplified things and you took off. So, check, great job. Now there's cloud, so what's different about cloud? You guys have some announcements. What are you doing to take advantage of the cloud? >> Well so, our cloud journey, Dave, is starting but it's actually evolving from some technologies that have been out for a while. So, actually earlier this year, this isn't new, but we implemented a technology that puts data into the cloud which is a very important first step. Back up data into the cloud, very transparent, very easy to do with Veeam, but everything is different in the cloud. I think the plumbing is different. The use cases are different. The expectations of customers are different. So, when we look at how we're going to go into a market from a product standpoint, my team works with Jim's team as well as the product management team on this very purposefully, but the thought is we need to put in the right platform and the right capabilities for the cloud. So, that's the big news today here at AWS re:Invent and yesterday. We had a great session today where we showed off the new product being back up for AWS. And we have been through a lot of iterations on how we're going to get to this milestone. And I'm really stoked that it was available for this event, live in the marketplace. And I think about why we're going to go with this new product now this way. Ratmir, our co-founder, likes to say he wants to capture the hearts and minds of IT pros, and this product will do it. File level recovery, free edition, easy, it just works. Whatever you want to save, we've got it in this product. So, I'm really hoping that this will be the year of an additional disruption as we kick off act two that Jim mentioned. >> You guys have always been feature-rich. I was sharing with your audience the spending data that I have access to and when you look at it, when you look at spending momentum it shows some of the new guys, obviously you wouldn't be surprised. You're seeing some people experimenting, and okay, that's cool. And then some of the legacy guys you see, they're hanging on to the install base. Veeam interestingly is right there with the leaders but really consistent spending momentum for years. And so my question is, how is that, why are you able to sustain that momentum over time? What is your unique approach? >> Yeah, I mean I think there's a couple of key factors there that we've done as a business. One of the key strategies of the company is to remain agnostic and to build partnerships. And so one of the key strategies that we've had over the past few years is to work with partners. And so we've done go to markets, some engineering work, and as I mentioned in Q3 alone we saw 92% year over year growth and so that's helping us to drive growth. We've added some new products and so we have backup for Microsoft Office 365, which is a whole new market for us. And we're seeing tremendous growth there year over year, so that's helping us to keep steady. And then just the innovation engine. The development team that we have is one of the reasons why I joined Veeam, is because of the innovation and the development team and how they approach the market in terms of really focusing on the user and building products that aren't just a check box but they're products that add a tremendous amount of value. And so, we have a new, we made announcements here with specifically with AWS, but to continue our innovation track we have a new release that's coming out in the January timeframe called Version 10 which adds another 150 plus capabilities. And so, I think that's one of the biggest reasons we continue to add value to the system and to our customers. We're adding between three to four thousand new customers a month and our customer count is continuing to, we're at 365 thousand customers today and growing fast. >> So, Rick, I wonder if you can talk from a product standpoint. I said virtualization, I'm generalizing in cloud. There's specific things for VMware obviously that you do and I presume the same thing for cloud. What's unique about, well, first of all your relationship with AWS and what's unique about making your software work in the AWS ecosystem? >> Well, the unique part is really our go to market of partnering first. I like to say that partnership is in Veeam's DNA. We sell through the channel and we have the alliance relationships. We have the platform relationships like AWS as well as other clouds. And the thought here is that by going in software only I am actually completely convinced we're very well positioned in the market to come in with a solution that will work for literally everybody no matter what their preference, what brands of technology they use, what clouds they use. And so I think about what becomes interesting, what becomes unique with that. And I'll give you an Amazon example and this is something that's coming in the Version 10 that Jim alluded to. Amazon has a capability called object lock which can be used for immutable backups or immutable data. We're using it for backups and that's something that we're going to leverage in our upcoming release that is actually going to be a huge thing, a huge amount of capabilities where organizations can have their backup data resilient against ransomware, resilient against malicious admins, insider threats or accidental deletion. And that is only possible in the cloud. So, we're walking into a situation where Veeam, if we're going to leverage S3 and some of these capabilities provided by Amazon, along with our laser-focused approach for backups, we're going to give the market some things that honestly it'd be really hard to say no to. >> So, can you talk more about that immutability capability? Timestamp that and then go across the old stuff? >> It's smarter than a timestamp. Actually the thought here is that there's this governance and compliance mode that comes with AWS S3 storage which is a property of a bucket that's set at the top level. And from a API standpoint when an ISV like Veeam wants to put data into S3, that along with a lot of other elements of the consumption of the storage can be set. And what we're doing is we're actually working backwards into the user interface, and if I want to put my backup data into S3, I'm actually going to say make this data immutable, meaning unable to be deleted or changed. Or actually you can't change in S3, it's only a delete. But anyways, you can't delete it. So, the thought is I'm going to put, I'm just going to make up an example, Dave, seven days into S3, mark it as immutable. No matter what, that data can not be removed. >> You got a policy on it. >> Yeah, and it's there, it will not be deleted. No ransomware, no malicious admin, no insider threat. And then we're doing it with a lot of API intelligence so it's very efficient on how it goes in there and shared metadata. We just did a session on part of that today and we're going to have a huge splash event in January where we take it to the market. So, if anybody listening is going to be concerned about ransomware, Veeam has a technology that's evolving for you. >> So, I can set my RPO to whatever I want based on my objectives for the business, the cost equation. >> Yeah, and it's actually transparent to that. To me, it's a restore point but I have this ability to sleep at night because I know that it's in Amazon and it's object locked and I can't do anything to it. >> Yeah, but that was seven days ago, so I now want to update it. So, you've set a policy to say, okay. >> So, yeah, so that the eighth day the backup will go and day one will drop and then we'll be at two through eight. And then the next day three through nine. It will just, it will be a window of sorts. And the best part is, Dave, it's going to be transparent. It's in the user interface. It's a restore point and the ease of use. I look at the product team and we really have this mantra. Simple, reliable, flexible, and who doesn't want those types of capabilities in a product today? And actually it works backwards. So, one of our co-founders, Andre, like's to say, his expectation is somebody can download the product and do their first backup within ten minutes without using the manual. The ease of use has to be like that and with the newest product from Monday we're doing it again. >> So, Jim, I wonder if I could ask you about messaging. It's interesting, it was interesting to see at VeeamON. You guys got back to basics. There's a lot of money flowing into the data protection industry. You're still seeing new startups. Storage overall is a little soft right now because the cloud's eating away at the big guys, but data protection is still pretty hot as evidenced by some of the spending data that I talked about. A lot of guys talking about data management. You talk about data management, too, but you got back to the basics at VeeamON. You talked about it starts with backup. I wonder if you can talk about that messaging and then how that does relate to some of the new use cases. And you mentioned some, but what's your point of view there? >> Yeah, absolutely, so, yeah so, that is a key initiative for us in 2020 is to shift the pure speeds and feeds and features and talk more about use cases. As you'll see that come out and across our portfolio, that's one of our key marketing initiatives, but yeah. The messaging we did back in 2018, I think we over-rotated a little bit and focused a little bit too much on the enterprise and as you know our business is very spread across multiple segments. From SMB to commercial to enterprise. And enterprises is of course the key market that we want to go after but we have this great business at the lower end of the market which I think is unique and a differentiator for Veeam in terms of the number of customers that we have and the customer base that we have. So, what we've done is gone back to using words like backup because there's budget for backup. And that's a word that people automatically know what it means. You don't want to get too cute about it. So, we've come out with a new campaign around cloud data management, "Backup for what's next", and we're pushing that really hard because I think a lot of people know Veeam as the virtual leader and now we're moving into the cloud area so it's important for us to position the company to not only virtual but virtual, physical and cloud. And so you're going to see a lot more push into the cloud with the new solutions we're launching and pushing that hard in 2020. >> Now, Veeam's always had strong no BS engineering. You know the tagline, "It just works." It's true, you talk to your customers. And it's interesting, when you go to VeeamON, I've been to several, you're right. I mean, you've got guys there that are loyal to Veeam. They may not be huge buyers just in terms of ASPs, but there's a zillion of them and they're very loyal. And I think it's very smart strategy. You just keep moving up markets. You guys are like Steady Eddie. Give us, last question is 2020, what should we expect from you guys? You got VeeamON, The Cube is going to be there. We're excited, it's always a fun show. You get a passionate crowd. >> Yeah, so we have some exciting announcements that we're going to be making in the first of the year and in the mid part of the year which we think are going to be game changers and continue us on the trajectory of growth. So, we're very excited about that and yeah, continuing to focus on satisfying our customers. We're super proud of our net promoter score of 75, which is three times, three and a half times the industry and so keeping that momentum going with our customers is critically important. >> Well, guys, congratulations on all your success. Great, you mentioned your NPS. Great customer loyalty, the billion dollar milestone. Ratmir is on, he's on the record last year at VeeamON saying, "Hey, no, we're open to IPO." So, we'll be watching that and we'll ask him. We won't hit you with that. But guys, thanks so much for coming on. >> All right, thank you, Dave. >> Dave: Jim, Rick, good to see you. >> Thank you. >> And thank you, everybody, for watching. This is The Cube, live from AWS re:Invent 2019 from Las Vegas. We'll be right back right after this short break.