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

(gentle music) >> Okay, welcome back to Supercloud 2, live here in Palo Alto, California for our live stage performance. Supercloud 2 is our second Supercloud event. We're going to get these out as fast as we can every couple months. It's our second one, you'll see two and three this year. I'm John Furrier, my co-host, Dave Vellante. A panel here to break down the Supercloud momentum, the wave, and the developer impact that we bringing back Vittorio Viarengo, who's a VP for Cross-Cloud Services at VMware. Sarbjeet Johal, industry influencer and Analyst at StackPayne, his company, Cube alumni and Influencer. Sarbjeet, great to see you. Vittorio, thanks for coming back. >> Nice to be here. >> My pleasure. >> Vittorio, you just gave a keynote where we unpacked the cross-cloud services, what VMware is doing, how you guys see it, not just from VMware's perspective, but VMware looking out broadly at the industry and developers came up and you were like, "Developers, developer, developers", kind of a goof on the Steve Ballmer famous meme that everyone's seen. This is a huge star, sorry, I mean a big piece of it. The developers are the canary in the coal mines. They're the ones who are being asked to code the digital transformation, which is fully business transformation and with the market the way it is right now in terms of the accelerated technology, every enterprise grade business model's changing. The technology is evolving, the builders are kind of, they want go faster. I'm saying they're stuck in a way, but that's my opinion, but there's a lot of growth. >> Yeah. >> The impact, they got to get released up and let it go. Those developers need to accelerate faster. It's been a big part of productivity, and the conversations we've had. So developer impact is huge in Supercloud. What's your, what do you guys think about this? We'll start with you, Sarbjeet. >> Yeah, actually, developers are the masons of the digital empires I call 'em, right? They lay every brick and build all these big empires. On the left side of the SDLC, or the, you know, when you look at the system operations, developer is number one cost from economic side of things, and from technology side of things, they are tech hungry people. They are developers for that reason because developer nights are long, hours are long, they forget about when to eat, you know, like, I've been a developer, I still code. So you want to keep them happy, you want to hug your developers. We always say that, right? Vittorio said that right earlier. The key is to, in this context, in the Supercloud context, is that developers don't mind mucking around with platforms or APIs or new languages, but they hate the infrastructure part. That's a fact. They don't want to muck around with servers. It's friction for them, it is like they don't want to muck around even with the VMs. So they want the programmability to the nth degree. They want to automate everything, so that's how they think and cloud is the programmable infrastructure, industrialization of infrastructure in many ways. So they are happy with where we are going, and we need more abstraction layers for some developers. By the way, I have this sort of thinking frame for last year or so, not all developers are same, right? So if you are a developer at an ISV, you behave differently. If you are a developer at a typical enterprise, you behave differently or you are forced to behave differently because you're not writing software.- >> Well, developers, developers have changed, I mean, Vittorio, you and I were talking earlier on the keynote, and this is kind of the key point is what is a developer these days? If everything is software enabled, I mean, even hardware interviews we do with Nvidia, and Amazon and other people building silicon, they all say the same thing, "It's software on a chip." So you're seeing the role of software up and down the stack and the role of the stack is changing. The old days of full stack developer, what does that even mean? I mean, the cloud is a half a stack kind of right there. So, you know, developers are certainly more agile, but cloud native, I mean VMware is epitome of operations, IT operations, and the Tan Zoo initiative, you guys started, you went after the developers to look at them, and ask them questions, "What do you need?", "How do you transform the Ops from virtualization?" Again, back to your point, so this hardware abstraction, what is software, what is cloud native? It's kind of messy equation these days. How do you guys grokel with that? >> I would argue that developers don't want the Supercloud. I dropped that up there, so, >> Dave: Why not? >> Because developers, they, once they get comfortable in AWS or Google, because they're doing some AI stuff, which is, you know, very trendy right now, or they are in IBM, any of the IPA scaler, professional developers, system developers, they love that stuff, right? Yeah, they don't, the infrastructure gets in the way, but they're just, the problem is, and I think the Supercloud should be driven by the operators because as we discussed, the operators have been left behind because they're busy with day-to-day jobs, and in most cases IT is centralized, developers are in the business units. >> John: Yeah. >> Right? So they get the mandate from the top, say, "Our bank, they're competing against". They gave teenagers or like young people the ability to do all these new things online, and Venmo and all this integration, where are we? "Oh yeah, we can do it", and then build it, and then deploy it, "Okay, we caught up." but now the operators are back in the private cloud trying to keep the backend system running and so I think the Supercloud is needed for the primarily, initially, for the operators to get in front of the developers, fit in the workflow, but lay the foundation so it is secure.- >> So, so I love this thinking because I love the rift, because the rift points to what is the target audience for the value proposition and if you're a developer, Supercloud enables you so you shouldn't have to deal with Supercloud. >> Exactly. >> What you're saying is get the operating environment or operating system done properly, whether it's architecture, building the platform, this comes back to architecture platform conversations. What is the future platform? Is it a vendor supplied or is it customer created platform? >> Dave: So developers want best to breed, is what you just said. >> Vittorio: Yeah. >> Right and operators, they, 'cause developers don't want to deal with governance, they don't want to deal with security, >> No. >> They don't want to deal with spinning up infrastructure. That's the role of the operator, but that's where Supercloud enables, to John's point, the developer, so to your question, is it a platform where the platform vendor is responsible for the architecture, or there is it an architectural standard that spans multiple clouds that has to emerge? Based on what you just presented earlier, Vittorio, you are the determinant of the architecture. It's got to be open, but you guys determine that, whereas the nirvana is, "Oh no, it's all open, and it just kind of works." >> Yeah, so first of all, let's all level set on one thing. You cannot tell developers what to do. >> Dave: Right, great >> At least great developers, right? Cannot tell them what to do. >> Dave: So that's what, that's the way I want to sort of, >> You can tell 'em what's possible. >> There's a bottle on that >> If you tell 'em what's possible, they'll test it, they'll look at it, but if you try to jam it down their throat, >> Yeah. >> Dave: You can't tell 'em how to do it, just like your point >> Let me answer your answer the question. >> Yeah, yeah. >> So I think we need to build an architect, help them build an architecture, but it cannot be proprietary, has to be built on what works in the cloud and so what works in the cloud today is Kubernetes, is you know, number of different open source project that you need to enable and then provide, use this, but when I first got exposed to Kubernetes, I said, "Hallelujah!" We had a runtime that works the same everywhere only to realize there are 12 different distributions. So that's where we come in, right? And other vendors come in to say, "Hey, no, we can make them all look the same. So you still use Kubernetes, but we give you a place to build, to set those operation policy once so that you don't create friction for the developers because that's the last thing you want to do." >> Yeah, actually, coming back to the same point, not all developers are same, right? So if you're ISV developer, you want to go to the lowest sort of level of the infrastructure and you want to shave off the milliseconds from to get that performance, right? If you're working at AWS, you are doing that. If you're working at scale at Facebook, you're doing that. At Twitter, you're doing that, but when you go to DMV and Kansas City, you're not doing that, right? So your developers are different in nature. They are given certain parameters to work with, certain sort of constraints on the budget side. They are educated at a different level as well. Like they don't go to that end of the degree of sort of automation, if you will. So you cannot have the broad stroking of developers. We are talking about a citizen developer these days. That's a extreme low, >> You mean Low-Code. >> Yeah, Low-Code, No-code, yeah, on the extreme side. On one side, that's citizen developers. On the left side is the professional developers, when you say developers, your mind goes to the professional developers, like the hardcore developers, they love the flexibility, you know, >> John: Well app, developers too, I mean. >> App developers, yeah. >> You're right a lot of, >> Sarbjeet: Infrastructure platform developers, app developers, yes. >> But there are a lot of customers, its a spectrum, you're saying. >> Yes, it's a spectrum >> There's a lot of customers don't want deal with that muck. >> Yeah. >> You know, like you said, AWS, Twitter, the sophisticated developers do, but there's a whole suite of developers out there >> Yeah >> That just want tools that are abstracted. >> Within a company, within a company. Like how I see the Supercloud is there shouldn't be anything which blocks the developers, like their view of the world, of the future. Like if you're blocked as a developer, like something comes in front of you, you are not developer anymore, believe me, (John laughing) so you'll go somewhere else >> John: First of all, I'm, >> You'll leave the company by the way. >> Dave: Yeah, you got to quit >> Yeah, you will quit, you will go where the action is, where there's no sort of blockage there. So like if you put in front of them like a huge amount of a distraction, they don't like it, so they don't, >> Well, the idea of a developer, >> Coming back to that >> Let's get into 'cause you mentioned platform. Get year in the term platform engineering now. >> Yeah. >> Platform developer. You know, I remember back in, and I think there's still a term used today, but when I graduated my computer science degree, we were called "Software engineers," right? Do people use that term "Software engineering", or is it "Software development", or they the same, are they different? >> Well, >> I think there's a, >> So, who's engineering what? Are they engineering or are they developing? Or both? Well, I think it the, you made a great point. There is a factor of, I had the, I was blessed to work with Adam Bosworth, that is the guy that created some of the abstraction layer, like Visual Basic and Microsoft Access and he had so, he made his whole career thinking about this layer, and he always talk about the professional developers, the developers that, you know, give him a user manual, maybe just go at the APIs, he'll build anything, right, from system engine, go down there, and then through obstruction, you get the more the procedural logic type of engineers, the people that used to be able to write procedural logic and visual basic and so on and so forth. I think those developers right now are a little cut out of the picture. There's some No-code, Low-Code environment that are maybe gain some traction, I caught up with Adam Bosworth two weeks ago in New York and I asked him "What's happening to this higher level developers?" and you know what he is told me, and he is always a little bit out there, so I'm going to use his thought process here. He says, "ChapGPT", I mean, they will get to a point where this high level procedural logic will be written by, >> John: Computers. >> Computers, and so we may not need as many at the high level, but we still need the engineers down there. The point is the operation needs to get in front of them >> But, wait, wait, you seen the ChatGPT meme, I dunno if it's a Dilbert thing where it's like, "Time to tic" >> Yeah, yeah, yeah, I did that >> "Time to develop the code >> Five minutes, time to decode", you know, to debug the codes like five hours. So you know, the whole equation >> Well, this ChatGPT is a hot wave, everyone's been talking about it because I think it illustrates something that's NextGen, feels NextGen, and it's just getting started so it's going to get better. I mean people are throwing stones at it, but I think it's amazing. It's the equivalent of me seeing the browser for the first time, you know, like, "Wow, this is really compelling." This is game-changing, it's not just keyword chat bots. It's like this is real, this is next level, and I think the Supercloud wave that people are getting behind points to that and I think the question of Ops and Dev comes up because I think if you limit the infrastructure opportunity for a developer, I think they're going to be handicapped. I mean that's a general, my opinion, the thesis is you give more aperture to developers, more choice, more capabilities, more good things could happen, policy, and that's why you're seeing the convergence of networking people, virtualization talent, operational talent, get into the conversation because I think it's an infrastructure engineering opportunity. I think this is a seminal moment in a new stack that's emerging from an infrastructure, software virtualization, low-code, no-code layer that will be completely programmable by things like the next Chat GPT or something different, but yet still the mechanics and the plumbing will still need engineering. >> Sarbjeet: Oh yeah. >> So there's still going to be more stuff coming on. >> Yeah, we have, with the cloud, we have made the infrastructure programmable and you give the programmability to the programmer, they will be very creative with that and so we are being very creative with our infrastructure now and on top of that, we are being very creative with the silicone now, right? So we talk about that. That's part of it, by the way. So you write the code to the particle's silicone now, and on the flip side, the silicone is built for certain use cases for AI Inference and all that. >> You saw this at CES? >> Yeah, I saw at CES, the scenario is this, the Bosch, I spoke to Bosch, I spoke to John Deere, I spoke to AWS guys, >> Yeah. >> They were showcasing their technology there and I was spoke to Azure guys as well. So the Bosch is a good example. So they are building, they are right now using AWS. I have that interview on camera, I will put it some sometime later on there online. So they're using AWS on the back end now, but Bosch is the number one, number one or number two depending on what day it is of the year, supplier of the componentry to the auto industry, and they are creating a platform for our auto industry, so is Qualcomm actually by the way, with the Snapdragon. So they told me that customers, their customers, BMW, Audi, all the manufacturers, they demand the diversity of the backend. Like they don't want all, they, all of them don't want to go to AWS. So they want the choice on the backend. So whatever they cook in the middle has to work, they have to sprinkle the data for the data sovereign side because they have Chinese car makers as well, and for, you know, for other reasons, competitive reasons and like use. >> People don't go to, aw, people don't go to AWS either for political reasons or like competitive reasons or specific use cases, but for the most part, generally, I haven't met anyone who hasn't gone first choice with either, but that's me personally. >> No, but they're building. >> Point is the developer wants choice at the back end is what I'm hearing, but then finish that thought. >> Their developers want the choice, they want the choice on the back end, number one, because the customers are asking for, in this case, the customers are asking for it, right? But the customers requirements actually drive, their economics drives that decision making, right? So in the middle they have to, they're forced to cook up some solution which is vendor neutral on the backend or multicloud in nature. So >> Yeah, >> Every >> I mean I think that's nirvana. I don't think, I personally don't see that happening right now. I mean, I don't see the parody with clouds. So I think that's a challenge. I mean, >> Yeah, true. >> I mean the fact of the matter is if the development teams get fragmented, we had this chat with Kit Colbert last time, I think he's going to come on and I think he's going to talk about his keynote in a few, in an hour or so, development teams is this, the cloud is heterogenous, which is great. It's complex, which is challenging. You need skilled engineering to manage these clouds. So if you're a CIO and you go all in on AWS, it's hard. Then to then go out and say, "I want to be completely multi-vendor neutral" that's a tall order on many levels and this is the multicloud challenge, right? So, the question is, what's the strategy for me, the CIO or CISO, what do I do? I mean, to me, I would go all in on one and start getting hedges and start playing and then look at some >> Crystal clear. Crystal clear to me. >> Go ahead. >> If you're a CIO today, you have to build a platform engineering team, no question. 'Cause if we agree that we cannot tell the great developers what to do, we have to create a platform engineering team that using pieces of the Supercloud can build, and let's make this very pragmatic and give examples. First you need to be able to lay down the run time, okay? So you need a way to deploy multiple different Kubernetes environment in depending on the cloud. Okay, now we got that. The second part >> That's like table stakes. >> That are table stake, right? But now what is the advantage of having a Supercloud service to do that is that now you can put a policy in one place and it gets distributed everywhere consistently. So for example, you want to say, "If anybody in this organization across all these different buildings, all these developers don't even know, build a PCI compliant microservice, They can only talk to PCI compliant microservice." Now, I sleep tight. The developers still do that. Of course they're going to get their hands slapped if they don't encrypt some messages and say, "Oh, that should have been encrypted." So number one. The second thing I want to be able to say, "This service that this developer built over there better satisfy this SLA." So if the SLA is not satisfied, boom, I automatically spin up multiple instances to certify the SLA. Developers unencumbered, they don't even know. So this for me is like, CIO build a platform engineering team using one of the many Supercloud services that allow you to do that and lay down. >> And part of that is that the vendor behavior is such, 'cause the incentive is that they don't necessarily always work together. (John chuckling) I'll give you an example, we're going to hear today from Western Union. They're AWS shop, but they want to go to Google, they want to use some of Google's AI tools 'cause they're good and maybe they're even arguably better, but they're also a Snowflake customer and what you'll hear from them is Amazon and Snowflake are working together so that SageMaker can be integrated with Snowflake but Google said, "No, you want to use our AI tools, you got to use BigQuery." >> Yeah. >> Okay. So they say, "Ah, forget it." So if you have a platform engineering team, you can maybe solve some of that vendor friction and get competitive advantage. >> I think that the future proximity concept that I talk about is like, when you're doing one thing, you want to do another thing. Where do you go to get that thing, right? So that is very important. Like your question, John, is that your point is that AWS is ahead of the pack, which is true, right? They have the >> breadth of >> Infrastructure by a lot >> infrastructure service, right? They breadth of services, right? So, how do you, When do you bring in other cloud providers, right? So I believe that you should standardize on one cloud provider, like that's your primary, and for others, bring them in on as needed basis, in the subsection or sub portfolio of your applications or your platforms, what ever you can. >> So yeah, the Google AI example >> Yeah, I mean, >> Or the Microsoft collaboration software example. I mean there's always or the M and A. >> Yeah, but- >> You're going to get to run Windows, you can run Windows on Amazon, so. >> By the way, Supercloud doesn't mean that you cannot do that. So the perfect example is say that you're using Azure because you have a SQL server intensive workload. >> Yep >> And you're using Google for ML, great. If you are using some differentiated feature of this cloud, you'll have to go somewhere and configure this widget, but what you can abstract with the Supercloud is the lifecycle manage of the service that runs on top, right? So how does the service get deployed, right? How do you monitor performance? How do you lifecycle it? How you secure it that you can abstract and that's the value and eventually value will win. So the customers will find what is the values, obstructing in making it uniform or going deeper? >> How about identity? Like take identity for instance, you know, that's an opportunity to abstract. Whether I use Microsoft Identity or Okta, and I can abstract that. >> Yeah, and then we have APIs and standards that we can use so eventually I think where there is enough pain, the right open source will emerge to solve that problem. >> Dave: Yeah, I can use abstract things like object store, right? That's pretty simple. >> But back to the engineering question though, is that developers, developers, developers, one thing about developers psychology is if something's not right, they say, "Go get fixing. I'm not touching it until you fix it." They're very sticky about, if something's not working, they're not going to do it again, right? So you got to get it right for developers. I mean, they'll maybe tolerate something new, but is the "juice worth the squeeze" as they say, right? So you can't go to direct say, "Hey, it's, what's a work in progress? We're going to get our infrastructure together and the world's going to be great for you, but just hang tight." They're going to be like, "Get your shit together then talk to me." So I think that to me is the question. It's an Ops question, but where's that value for the developer in Supercloud where the capabilities are there, there's less friction, it's simpler, it solves the complexity problem. I don't need these high skilled labor to manage Amazon. I got services exposed. >> That's what we talked about earlier. It's like the Walmart example. They basically, they took away from the developer the need to spin up infrastructure and worry about all the governance. I mean, it's not completely there yet. So the developer could focus on what he or she wanted to do. >> But there's a big, like in our industry, there's a big sort of flaw or the contention between developers and operators. Developers want to be on the cutting edge, right? And operators want to be on the stability, you know, like we want governance. >> Yeah, totally. >> Right, so they want to control, developers are like these little bratty kids, right? And they want Legos, like they want toys, right? Some of them want toys by way. They want Legos, they want to build there and they want make a mess out of it. So you got to make sure. My number one advice in this context is that do it up your application portfolio and, or your platform portfolio if you are an ISV, right? So if you are ISV you most probably, you're building a platform these days, do it up in a way that you can say this portion of our applications and our platform will adhere to what you are saying, standardization, you know, like Kubernetes, like slam dunk, you know, it works across clouds and in your data center hybrid, you know, whole nine yards, but there is some subset on the next door systems of innovation. Everybody has, it doesn't matter if you're DMV of Kansas or you are, you know, metaverse, right? Or Meta company, right, which is Facebook, they have it, they are building something new. For that, give them some freedom to choose different things like play with non-standard things. So that is the mantra for moving forward, for any enterprise. >> Do you think developers are happy with the infrastructure now or are they wanting people to get their act together? I mean, what's your reaction, or you think. >> Developers are happy as long as they can do their stuff, which is running code. They want to write code and innovate. So to me, when Ballmer said, "Developer, develop, Developer, what he meant was, all you other people get your act together so these developers can do their thing, and to me the Supercloud is the way for IT to get there and let developer be creative and go fast. Why not, without getting in trouble. >> Okay, let's wrap up this segment with a super clip. Okay, we're going to do a sound bite that we're going to make into a short video for each of you >> All right >> On you guys summarizing why Supercloud's important, why this next wave is relevant for the practitioners, for the industry and we'll turn this into an Instagram reel, YouTube short. So we'll call it a "Super clip. >> Alright, >> Sarbjeet, you want, you want some time to think about it? You want to go first? Vittorio, you want. >> I just didn't mind. (all laughing) >> No, okay, okay. >> I'll do it again. >> Go back. No, we got a fresh one. We'll going to already got that one in the can. >> I'll go. >> Sarbjeet, you go first. >> I'll go >> What's your super clip? >> In software systems, abstraction is your friend. I always say that. Abstraction is your friend, even if you're super professional developer, abstraction is your friend. We saw from the MFC library from C++ days till today. Abstract, use abstraction. Do not try to reinvent what's already being invented. Leverage cloud, leverage the platform side of the cloud. Not just infrastructure service, but platform as a service side of the cloud as well, and Supercloud is a meta platform built on top of these infrastructure services from three or four or five cloud providers. So use that and embrace the programmability, embrace the abstraction layer. That's the key actually, and developers who are true developers or professional developers as you said, they know that. >> Awesome. Great super clip. Vittorio, another shot at the plate here for super clip. Go. >> Multicloud is awesome. There's a reason why multicloud happened, is because gave our developers the ability to innovate fast and ever before. So if you are embarking on a digital transformation journey, which I call a survival journey, if you're not innovating and transforming, you're not going to be around in business three, five years from now. You have to adopt the Supercloud so the developer can be developer and keep building great, innovating digital experiences for your customers and IT can get in front of it and not get in trouble together. >> Building those super apps with Supercloud. That was a great super clip. Vittorio, thank you for sharing. >> Thanks guys. >> Sarbjeet, thanks for coming on talking about the developer impact Supercloud 2. On our next segment, coming up right now, we're going to hear from Walmart enterprise architect, how they are building and they are continuing to innovate, to build their own Supercloud. Really informative, instructive from a practitioner doing it in real time. Be right back with Walmart here in Palo Alto. Thanks for watching. (gentle music)

(upbeat music) >> Good morning and welcome back to fabulous Las Vegas, Nevada. We're here at AWS re:Invent with wall-to-wall coverage all day long on theCUBE. My name is Savannah Peterson and I am joined this morning by the beautiful Lisa Martin. Lisa, good morning. >> Good morning. Good. >> How you feeling day three? >> Day three is we are going to be shot out of a cannon today. The amount of content coming at you from theCUBE today- >> Get ready, you all. >> Us two gals, is a lot. We're going to have some great conversations. >> And we're starting with a really great one with a Cube Alumni to the max. You've been on the show multiple times. >> John: Yeah. >> Very excited to welcome John, the CMO of Couchbase. Welcome. How you doing this morning? >> Thanks. I'm doing great. Great to be here with you. >> How do you feel about the show so far? What's your pulse? >> The show has been great. I say the energy is great. The traffic at our booth, the conversations that we're having, both with prospective customers and even just partners, right? They're all here. The ecosystem is here >> And everyone's finally back in person and it feels so good. >> John: It does. >> So, we're going to dig in a little bit but just in case the audience isn't familiar, tell us about Couchbase. >> Sure. Couchbase is a publicly traded database company. We have a cloud database platform called Capella which is hosted on AWS and GCP. It is used for building mission-critical applications. So, we have great customers, we're building apps that really matter and are using to drive their business. So, we're very excited about that. 30% of the Fortune 100 are Couchbase customers. >> Nice. Talk a little bit about the AWS relationship. >> Mm-hm. Yeah, so we have a great AWS relationship. In fact, yesterday we announced a deepening of that relationship, a strategic collaboration agreement. We're very excited. It's a multi-year agreement. It's focused on go-to market, from a sales and marketing standpoint. We're going to target, you know, various verticals and, you know, really generate joint business between the two of us. So, it's a deepening of a already strong relationship and we're really excited about that. >> Savannah: Yeah. Go ahead. >> What are some of the industry verticals that you're going to be tackling together? >> Well, gaming for one, right? Manufacturing, the workloads that Couchbase is good for are these mission-critical workloads are ones that are really suited for us to be used with AWS. So, we've done some work with them already in those areas and I'm sure we'll be digging in even deeper. >> That's exciting. Speaking of digging in deeper, tell us a little bit more about Capella. >> Capella. It's a cloud databases services I mentioned. We launched it last October and we are super excited by the uptake, the interest that we're seeing. We have a free 30 day trial, so, you know, people can come and try it and get their hands dirty just getting experience with the product and then, you know, become a customer after that. And we're seeing very strong interest from our existing customer base as well. So, we're really excited about how things are going. >> Talk about Capella and the latest release and how it's really enabling Couchbase to invest deeper into the developer experience. >> Yeah, so, at the end of October, we announced a revamp of our user interface, our user experience for Capella really focused on developers. And what we've done is make it so that it's familiar to developers, right? It's a GitHub-like experience. So, developer comes in, they're very familiar, of course, with GitHub, they are familiar with how the Couchbase Capella interface will work. And so that's something that, you know, we've really invested, in fact, we've invested in developers quite a bit. We announced a Couchbase community hub and a Couchbase ambassadors program, both focused on developers and getting out there and building our community. >> A community is a big topic that we've been talking about at all the conferences this year. We're all back in person, in community. How often are you communicating with your community to get feedback on what that experience should be like? >> Yeah, I mean, we actually have a Discord server, so we're in constant communication. (Savannah laughing) >> Savannah: Yes. (John laughing) 24/7. (laughing) >> Basically, you know, we have staff who's dedicated to making sure that the users on there are getting their answers and giving us feedback on the experience. The ambassadors are somebody who have a really strong relationship, who get early insight and give us feedback before we even release a product. So, it gives us a chance to really test-drive it with core developers and get the insight we need before we get it in the market. >> Yeah. It matters so much. You can build it, but they won't come if it's not fantastic. >> John: Exactly. >> Lisa: Right. >> Let's shift a little bit and talk about customers. How, and price, how do you guys compare? >> Customers and? >> And price, your price performance? >> Price, oh. So, customers, we also announced this week a joint customer Arthrex with AWS. Arthrex is a orthopedics medical devices company and they use our Edge capabilities along with running Couchbase on AWS. So, you think of the kinds of surgeries that orthopedic surgeons do, it's scopes and they are often inside. So, what it does is it collects the data, the video data and all of that on a medical devices and then brings it back to a centralized app for the doctors to use sort of in post when they're actually doing further medical recommendations. >> Savannah: It's so cool. >> So, it's cool, the thing about it is it can work whether it's online or offline, it's one of the reasons that Arthrex selected us because the fact that it can, you know, often sometimes there's not connectivity in the operating room, I'd say deep inside of a hospital. So, these devices work regardless and then when they get connectivity, it sinks back to that centralized service. So, it's one of the main reasons that they selected us. >> That's outstanding. You know, one of the things that John Furrier, you know, John, well, you guys go way back. >> John: Way back. >> He had a sit down with Adam Selensky, oh, about 10 days or so ago. He gets an exclusive with the CEO of AWS every pre re:Invent. And one of the things that Adam said is that the role or the title, data analyst, is going to go away, in that every role will have responsibilities of analyzing data. And I always think of that in terms of operations, marketing, finance, sales, but you just brought up physicians as data analysts in their jobs, right? Probably not, we're thinking about it in that way. >> Yeah. >> But it's so interesting how data is really being democratized. >> John: Yeah. >> And how Couchbase is an enabler of that in an operating room. >> John: Yeah, yeah, yeah. >> That's amazing. >> It's a great story. There's many others and I think, you know, we have embedded operational analytics in Couchbase Capella, and, you know, in our offerings in general. So, what that does is allows us to do real-time, highly personalized applications based on that analytics that are coming in real-time from the data from the applications. And so that's something that's actually driving a highly interactive user experience, one that's very personalized and customized. And that's one of the things that our customers really like about what we do. >> It's fascinating. I never thought about it from a medical device perspective. >> Lisa: No, no. >> John: No. >> My gosh is if doctors don't have enough cognitive burden load. >> John: I know. >> You know, right? Like, they don't need to be a data analyst. I would much rather they were just good at the surgery part. That's a piece of the puzzle I need them to do. Yeah, for sure. That's a fascinating customer example. Can you share any other joint AWS examples with us? >> Joint AW- I mean, there's many in the gaming area where, because Couchbase is memory-first architecture, we deliver very, very interactive user experiences and we're used a lot for session management, user ID management in the gaming space, specifically with AWS. It's an area we've done some joint work already and had a lot of success, you know, with small and large gaming companies. >> Yeah. It looks like you also, according to my notes here, we've got things in travel and hospitality as well. >> Yes. Also Carnival Cruises is a great example. We enable their on-ship, on-board experience, highly customized, everybody wears a device called a medallion, and as they move around the ship, it knows where they are and it's able to provide customized services. You walk up to a bar, you have your favorite drink, it can be hit the bar when you land there. >> I'll take that. >> How about that? (laugh) >> That's outstanding. >> Isn't that great? >> Can we carry that onto the AWS show floor? >> Exactly. >> Or Starbucks order? >> Yeah, yeah. Yes, please. Yes, please. Well, another thing that's so interesting these days, is that every company has to be a data company. Say they have to be a software company. They have to be a data company. You just gave some great examples. Hospitality, gaming, healthcare, where that data democratization has to happen. >> John: Yeah. >> Businesses has to transform. But one of the things that Adam also told John is that CIOs, CEOs are coming to him not wanting to talk about technology but about transformation. >> Yeah. >> Huge topic. >> And that's a journey where every customer is at different levels. >> Yeah. >> How is Couchbase helping businesses transform and where are your customer conversations these days? >> Yeah, yeah, yeah. So, I mean, the transformation of the business is a major topic of conversation. So, we completely agree with that. How Couchbase helps is, you know, in our database, one of the things we have is the SQL engine. And so as people are looking to move and modernize their infrastructure, if they're moving off of, or from like a technology that's principally based on SQL but doesn't give all the flexibility of a JSON database or document database like we do, we actually enable them to get more easily onto our platform so that they can start that transformation. And then it's a, you know, it's a journey of how they want to transform their business and it's really focused on how do they better serve their customers and clients, whether it's internal or external? >> It really matters. I mean, and that ease of use as well as the transformation journey. It takes a long time for people to adapt. So, every piece of that puzzle, every Lego being quicker or easier, more intuitive, like you said, with the user experience, we can tell you're very thoughtful. How does this improve the total cost of ownership for your customers? >> That's one of the things that we announced along with that developer changes, was a new storage engine underneath Couchbase Capella. And it's 10 X more dense storage. And what that means is fewer servers. So, fewer servers is a much better cost of ownership story. That plus just the performance of the platform itself, we find, you know, against competition, we can do things on say six nodes that take 18 nodes for others. >> Lisa: Oh wow. >> And we have a great consolidation story as well because we have, it's a multi-modal database, meaning that it has SQL engine, document database, full tech search, eventing and analytics, all these pieces on one common data layer. So, you can actually consolidate off of other technologies onto one, onto Couchbase, and that actually saves you money. So, that's a great story for us. >> There's got to be a sustainability element to that as well? >> Yeah, I mean it's, obviously, if you're using less, using fewer servers, there's a kind of power consumption aspect of it as well. Absolutely. >> Are you finding that a lot of customers and companies we talk to these days have in their RFPs, they must only work with vendors who have an actual ESG program? Are you finding more customers coming to you saying, how can you help us dial down our carbon emissions? >> John: Yeah. >> Savannah: Great question. >> We've got a sustainability program that we've got to meet, we've got commitments to our customers. >> John: Yeah. >> Is that something that's really now kind of a hard and fast requirement? >> We're hearing it, we're definitely hearing it. I wouldn't say it's, you know, massively pervasive but I would say it's a growing component of, as you said, RFPs. And it's something that we feel like we have a great story for. And so, you know, it's something that helps when we get into those conversations, we can clearly articulate how we can provide that value and how we meet some of those needs that they have. >> Yeah, that's awesome. So, we have a bit of a challenge, new to the show at re:Invent. >> John: Mm-hm. >> Where we are prompting you to give us your 30 second Instagram Reel sizzle highlight. Don't worry, I'm not actually timing you, but your thought leadership hot-take on the most important theme or takeaway from this year's show. >> From the conference here. I would say that, and I think this was talked about a little bit by AWS as well, but the convergence of analytics and operational data, you know, through the applications is one that we're certainly seeing as well. It's the reason we have analytics in our database. But as I walk around and look at it, I see that very much as a common theme as well, in terms of what other vendors are saying and just the conversations we're having. So for me, that's one of the things I think would be a takeaway from this show. >> Yeah. Embedded analytics, real-time, everybody wants to know what's going on, in context. >> Yeah. That's right. >> Right now, not last week, not what we're processing from last month. >> Exactly. >> I mean, right? (cross-talking) >> So, I can react and take advantage or take an action if I have to. >> Exactly. And then deliver that personalized experience that we all expect these days. >> Oh, yes. >> I'll take that medallion- >> It's about the medallion. I was like, okay. >> You up with that, John? >> We'll get right on it. >> Lisa: All right. (laughs) >> About this. So, what's next for Couchbase? >> John: Well- >> I know you got the partnership, you've got all this exciting momentum. >> So, we're excited heading into next year. We're going to continue to innovate on Capella, right? Continue to deliver more value, lean into our developer community that we have. We're investing heavily, not just from a product standpoint but from a company standpoint in terms of, you know, our community meetups and some of those things. We have a big community-focused event coming up in March called Connect, Couchbase Connect. So, that's something that we'll, you know, continue to drive. That'll be a major theme for us next year. Cloud and developers and, you know, continuing to enable that ecosystem. >> Lisa: Excellent. >> I just had a Microsoft moment where I saw you saying, "Cloud developers," on stage. (Lisa and Savannah laughing) >> I'm not going Steve Ballmer on you. (all laughing) >> Pardon. I was trying to get someone to sing yesterday. I was hoping you were my Ballmer dance. Oh, man. Well, this has been a really great way to start the day. John, thank you so much for being on the show with us, seriously. And it's great that you keep coming back. I'm glad we haven't scared you off. (John laughing) >> Never. >> Savannah: We will have you anytime. >> Thank you. >> And thank you all for tuning in for yet another fantastic day of all day live coverage here from AWS re:Invent. We are in Sin City, having a fabulous time with Lisa Martin. I'm Savannah Peterson. This is theCUBE and we are the leader in high-tech technology coverage. (upbeat music) (upbeat music fades)

(upbeat music) >> Hey, everyone. Welcome back to New York City. Lisa Martin and John Furrier with theCUBE here live covering the AWS Summit NYC 2022. There's about 15 different summits going on this year, John, globally. We're here with about 10,000 attendees. Just finished the keynote and two guests from SoftwareONE. Please welcome David Torres, the director of cloud services and Asim Khan, a North American AWS services delivery lead at SoftwareONE. Welcome, guys. >> Thank you for having us. >> Thank you for having us. >> Talk to us, David, kick us off. Give the audience an overview of SoftwareONE. What do you guys do? And then tell us a little bit about the AWS partnership. >> Sure, so SoftwareONE, we are one of Microsoft and VMware's largest resellers. We help customers with our IT asset management services, managing their on-premises license real estate, but we're definitely a company that's undergoing a transformation. And when I say that, essentially we're focused on three key pillars with our go to market, supporting the hyperscalers. So we do support AWS, Azure, GCP at modernization because we do see this with a lot of our customers, you know, they're moving from on premises to AWS. They have a lot of technical debt and they're looking at options to modernize that, and mission critical workloads like SAP, Windows, Oracle, and we offer, you know, a suite of professional services, managed services, migrations, quite quite a bit of services. >> Asim, can you kind of double click on the services that SoftwareONE delivers to customers? Maybe some key use cases? >> Yeah, sure. I think in the Amazon space, I would say we're currently focusing in the area of funding programs that Amazon currently has, for example, the Migration Acceleration Program, which is a map with supporting customers basically with the entire cloud journey that they might have, or helping them define that cloud journey. And then we can help the customer in any phase of that journey as well to basically take them a step step above. So that's what our area of focus is right now to basically help enable customers. >> So on the Microsoft, AWS, you mentioned Microsoft, I mean, they've had the enterprise business for years and, you know, developers was their, you know, ecosystem. Back in the day, "Developers, developers, developers" as Steve Ballmer once said, and that was their crown jewel. But then, you know, .NET now has Linux. They got a lot more open source. So those enterprises, their customers are changing. A lot of them are on AWS. So talk about that dynamic of the shift to AWS. And now that Azure's out there, what's the relationship of those hyperscale? How do you guys navigate those waters? >> Sure, I mean, it's always the concept of work backwards from the customer, right? What are the business outcomes they're trying to drive and, you know, define a strategy from that. And it's still a function of change management for a lot of customers, people, process and tools. So, you know, in a lot of cases, our customers are evaluating what's a skillset of our people, do we need to upskill them, the tools that we're using, how do we use those on the multiple clouds, right? And then the processes. So for us, you know, we have some customers that prefer one cloud over another. We have customers that run cross multiple clouds. They deploy different workloads. And then we have some customers that transformation and modernization are really big top of stack for them. So in some cases, those customers are going to AWS and, you know, we're helping them kind of with that journey. It's interesting, Amazon literally won the developer cloud market early on, going back 15 years. >> Absolutely. >> But not all developers, enterprise developers who, you know, in the enterprises, they're stuck in their ways, but are changing. This is a digital transformation moment 'cause cloud native applications, the modernization piece, is developer centric. >> Absolutely. >> That's key, the developers. So I'm interested in your perspective and reaction to what's going on in that developer market right now with DevOps exploding in a great way, the goodness of the cloud coming more and more to the table. >> Sure, no, absolutely, great question. So I think with enterprise developers, you know, we see just the businesses driving a lot of the outcomes, right? So the modernization aspect of needing to get to market faster, needing to deploy applications faster, having a more efficient operating model, more automation. And for your point on the .NET modernization, you know, we work with customers too as well. We made an acquisition a couple years ago, a company, InterGrupo. They actually specialize in this in .NET modernization. So we know we're seeing some customers that are moving to Linux, right? And they want to go .NET Core and, you know, they're kind of standardizing on Linux. So we kind of see a, you know, wide spectrum, but yeah, maybe. >> Where are your customer conversations as things have changed so much in accelerated dramatically in the last couple of years? >> Sure. >> Obviously we've talked about the developers, but talk to me about, you know, business imperatives for businesses in every industry to digitally transform, number one, to survive the last couple of years, but, two, to be at a competitive advantage. >> Sure, no, so I think with businesses, you know, obviously, 2017, innovation, 2022, it's a little bit different, right? There's obviously macro conditions, you have COVID. So, you know, we're seeing where customers are essentially really doing their due diligence, right, when they make their choices more than ever before. And they're trying to maximize, right, their spend and their ROI when they move to cloud and that involves, you know, the licensing advisory, what they can move, what they can modernize, migrations, and just the roadmap and what strategy. But what I see is, it's the business outcomes, what they're trying to drive, and, you know, we're seeing some trends too with maybe a more conservative segments like healthcare, public sector, right, utilities that they are really investing and moving towards the cloud. >> Asim, I got a question from Twitter, a DM, I want to ask. You guys are on the front line. So you see the customers, which is really great 'cause it's primary data. You guys are right there. And you're not biased. You work with whatever hyperscaler. So it's really good. So the question that came up was, "Can you ask them the following, 'What's going on in the data warehouse front, cloud warehouse front, you got Redshift competing with Synapse, Azure Synapse, Google BigQuery, and then you got Snowflake and Databricks out there?'" So you got this new data provider, but it's not a data warehouse. And you got data refactoring on AWS, for instance as well. So, you know, this whole new level of data analytics with how you're doing cloud data. And you call it a data warehouse, I guess for categorically, but it's really not a warehouse. It's a data lake and you got lake front foundation. What are you guys seeing on the front lines with customers as they try to squint through how to deal with the data and which cloud to work with? >> That is a good question. I mean, I've been in the industry a long time. I've worked for some major financial institutions as well and data or big data was big for that industry. (John chuckles) So I've seen how the trends have changed, but from our perspective, because we are an agnostic services company, as you mentioned, we basically can work with any hyperscaler, we initially see what the business needs are for the customer. If the customer is already, for example, using Amazon, we initially want to have the customer use native tooling available within that hyperscaler space. If the customer is open for us to give them any recommendations, of course, we look at the business needs. We look at what type of data is going to be stored. What the industry is. Based on all of those inputs is when we basically give the right recommendation, it could be a third party data warehousing solution. It could be an area one. It all depends on what the business needs of the customer are. >> So for example, and most companies do this they build on say AWS, who is one of the first big clouds. And then they go, "Hey, we got customers over there at Azure, that's Microsoft they got thousands and thousands of customers. Snowflake's done, and they have marketplaces as well." So you guys are kind of agnostic it sounds like. Whatever the architecture is on the stack that they choose. >> Correct, so that's what makes us special. I think we are one of those services companies which is quite unique in the industry. And I don't say that just because I work for SoftwareONE, (John chuckle) that is a fact that gives us a very unique perspective of giving the customer the right piece of advice because we've seen it all and we've done it all. So that's, I think what puts us unique and regarding technology, all the different hyperscalers, they might have a very similar backend technology stack, but what the front end services each hyperscaler is building are very unique. Amazon being the leader in this space, they've been ahead of the curb by a few years, they will always have certain solutions which are above the rest. So I mean, I've always been an Amazon person, so I'm slightly biased, but, hey, I mean, I'm not complaining about that. >> The good news is the customer has choices. >> Right, absolutely. And we do see customers that want to be agnostic, right, >> Yeah. >> With their technology choices. Actually, that's a good segue about our partnership with AWS. We recently signed a strategic collaboration agreement between both parties. So there's going to continue to be big investment from us, scaling out our professional services, our practice areas, and then also key focus area for a fin ops. >> Is that your number one area? >> It's one of the areas, yeah. >> Okay, what your top three practice areas? >> Top three, mission critical workloads. So enterprise workloads like SAP, Microsoft, Oracle, two, app modernization, and, three, definitely fin ops and the hyperscalers, right? Because we see a lot of customers that have already heavily adopted cloud, they're struggling with that cloud financial management aspect. >> So if they're struggling, what are some of the key business outcomes that they come to you, to SoftwareONE, and say, "Help us figure this out. We have to achieve A, B, C." >> Sure, so depending on the maturity of the customer and where they are in the journey, if they're already very heavily adopting cloud, you know, AWS or Azure, we see in a lot of cases that the customers are unsure if they're getting the most out of their cloud spend, and they're looking at their operations, and their governance, and, you know, they're coming to us and basically asking us, "Hey, we feel like our cloud spend is a little bit out of control. Can you help us?" And that's where we can come in, you know, provide the advice, the guidance, the advisory but also give them the tooling, right, to have visibility into their cloud spend and make those conditions. And we also offer a managed fin op service that will end to end do this for the customers to help to manage their resale, their invoicing, their marketplace buy, as well as their cloud spend. >> So obviously the engagement varies customer to customer. What's a typical timeframe? Like how long does it take you to really get in there with a customer, understand the direction they need to go, and create the right plan? >> Sure, again, comes back to the cloud journey. You know, if the customer is still, you know, very much on prem and maybe more, you know, conservative, it may start with licensing assessments just to give them an idea of what it would cost to move those workloads, right? Then it turns into migration modernization, you know, it can be an anywhere from one to six months, you know, of just consulting, right, to get the customer ready. And then we help 'em, you know, obviously with their migration plan. But if they're already heavily adopting cloud, you know, we do remediation work, we do optimization. Obviously, SAP, that's a longer cycle, so. (chuckles) >> So I got to ask you guys, what is the PyraCloud? SoftwareONE as a platform PyraCloud. What is that? >> I might want to answer that. >> Sure. (chuckles) >> It's pronounced PyraCloud. >> How do you pronounce it? >> PyraCloud. >> PyraCloud, okay. I like PyraCloud better. (chuckles) >> With the Y in there. It's basically our spend insight platform. It gives customers an a truly agnostic single pane of glass view into their entire cloud enterprise spend. What I mean by that is with a single login, the customer has access to looking at their enterprise spend on AWS, on Azure, as well as GCP. And in the future, of course, we're going to add other hyperscalers in there as well. Because of the single pin of glass view, the customer has a true or the customer leadership, or, for example, the CTO has a single pane of glass view into the entire spend. We allow the customer to basically have an enterprise level tagging strategy, which is across all the hyperscalers as well as then allowing a certain amount of automated cost management as well, which is again agnostic and enterprisewide. >> Can you share an example of a customer for whom you've given them this single pane of glass through PyraCloud, and by how much they've been able to reduce costs or optimize costs? >> Yes, mostly the customers who would be a very good fit for PyraCloud would be a slightly more mature customer who already has a large amount of spend, or who is already very mature in their different hyperscalers. And usually what we've seen once a customer is mature in the cloud over a certain period of time, controlling costs does become difficult, even though you might have automation in place, but to get to that automation, you have to go through a certain amount of time of basically things breaking and you fixing them. So this is where per cloud becomes very helpful to help control that. And building a strategy, which once in place is repetitive and helps you manage costs and spend in the cloud year after year then. >> One of the things I want to get your guys reaction before we wrap up is this show here has got 10,000 people which is a big number, post COVID, events are coming back but in the past five years, or six years, or seven years, since like 2015, a lot's changed. What's changed the most? Shared to the audience what you think is the biggest step function change that's happening right now? Is it that data's now prime time? Everyone's got a lot of data, hasn't figured out the consequences with it. Is it scale? Is it super cloud? Is it the ecosystem because this is not stopping ,the growth in the enterprise on the digital transformation is expanding, even though GDPs down, and gas prices are high, and inflation, this isn't stopping. Now, some of the unicorns might be impacted by the headwinds, the big overfunded valuations but not the ecosystem. What's changed? What's the big change? >> Well, I think what I see is this cloud is becoming the defacto operating model and customers are working backwards from that as their primary goal, right, to operate in the cloud. And as I mentioned before, they really are doing due diligence, right, to really understand the best approach for seeing kind of maybe some of the challenges other customers have had when they first moved to AWS, so. And I'm, you know, seeing industries that maybe five years ago, you know, were not about moving to cloud, like healthcare. I can tell you a lot of our healthcare customers, they're trying to get to cloud as fast as possible. >> It's a wake up call. >> It's a wake up call. >> Absolutely. Absolutely. >> Asim, what's your reaction? >> In my point of view with what's happened these last few years with a lot of companies having their employees work from home and being remotely, I think end user compute was one of the big booms which happened about two years ago. We support a lot of customer in that space as well. And then overall, I think we actually saw that there was much more business focus with employees working for home for some reason. And we saw that internally in our own organization as well. And with that focus, the whole area of being more lean and agile in the cloud space, I think became much more prevalent for all the enterprises. Everybody wanted to be spend conscious, availing the different tools available in the cloud arena, like autoscaling like using, for example, containerization, using such solutions to basically be more resilient and more lean to basic control costs. >> So necessity is the mother of all inventions >> It is. >> That got forced. So you got wake up call and then a forcing function to like, okay, but exposes the consequences of a modern application, modern environment because they didn't, they're out of business. So then it's like, okay, this is actually working, (chuckles) why don't we like kill that project that we've doubled down on, move it over here." So I see that same pattern. What do you guys see? >> Yeah, no, I mean, we see that pattern as well. Just modernization, efficiency. You could just move faster, more elasticity, you know, and, again, the wake up call, you know, for organizations that people couldn't go to data centers, right? (chuckles) >> Yeah. (chuckles) >> We actually have a customer, that was literally the reason they made the move, right, to AWS. >> And I would add one more thing to that particular point. With the time available, I think customers were able to actually now re-architect their applications slightly better to be able to avail, for example, no server type of solutions or using certain design principles which were much more cost lean in the cloud. That's what we saw. I think customers spent that time available over the past couple of years to be much more cloud centric, I would say. >> Yeah, the forced March was really an accelerant and a catalyst in a lot of ways for good, and there's definitely some silver linings there. Guys, we're out of time. But thank you so much for joining John >> Oh, awesome. >> And me talking about SoftwareONE, what you guys are doing, helping customers, what you're doing with AWS and the hyperscalers. We appreciate your time and your insights. >> Thank you. >> Awesome. Thank you for having us. >> Thanks for having us. >> Really appreciate it. >> All right, for our guests and John Furrier, I'm Lisa Martin. You're watching theCUBE live from New York City at AWS Summit at NYC. Stick around, John and I will be right back with our next guest. (upbeat music) (upbeat music continues)

>> Announcer: theCube presents HPE Discover 2022, brought to you by HPE. >> Hey, everyone. Welcome back to Las Vegas. This is Lisa Martin with Dave Vellante live at HPE Discover '22. Dave, it's great to be here. This is the first Discover in three years and we're here with about 7,000 of our closest friends. >> Yeah. You know, I tweeted out this, I think I've been to 14 Discovers between the U.S. and Europe, and I've never seen a Discover with so much energy. People are not only psyched to get back together, that's for sure, but I think HPE's got a little spring in its step and it's feeling more confident than maybe some of the past Discovers that I've been to. >> I think so, too. I think there's definitely a spring in the step and we're going to be unpacking some of that spring next with one of our alumni who joins us, Keith White's here, the executive vice president and general manager of GreenLake Cloud Services. Welcome back. >> Great. You all thanks for having me. It's fantastic that you're here and you're right, the energy is crazy at this show. It's been a lot of pent up demand, but I think what you heard from Antonio today is our strategy's changing dramatically and it's really embracing our customers and our partners. So it's great. >> Embracing the customers and the partners, the ecosystem expansion is so critical, especially the last couple of years with the acceleration of digital transformation. So much challenge in every industry, but lots of momentum on the GreenLake side, I was looking at the Q2 numbers, triple digit growth in orders, 65,000 customers over 70 services, eight new services announced just this morning. Talk to us about the momentum of GreenLake. >> The momentum's been fantastic. I mean, I'll tell you, the fact that customers are really now reaccelerating their digital transformation, you probably heard a lot, but there was a delay as we went through the pandemic. So now it's reaccelerating, but everyone's going to a hybrid, multi-cloud environment. Data is the new currency. And obviously, everyone's trying to push out to the Edge and GreenLake is that edge to cloud platform. So we're just seeing tons of momentum, not just from the customers, but partners, we've enabled the platform so partners can plug into it and offer their solutions to our customers as well. So it's exciting and it's been fun to see the momentum from an order standpoint, but one of the big numbers that you may not be aware of is we have over a 96% retention rate. So once a customer's on GreenLake, they stay on it because they're seeing the value, which has been fantastic. >> The value is absolutely critically important. We saw three great big name customers. The Home Depot was on stage this morning, Oak Ridge National Laboratory was as well, Evil Geniuses. So the momentum in the enterprise is clearly present. >> Yeah. It is. And we're hearing it from a lot of customers. And I think you guys talk a lot about, hey, there's the cloud, data and Edge, these big mega trends that are happening out there. And you look at a company like Barclays, they're actually reinventing their entire private cloud infrastructure, running over a hundred thousand workloads on HPE GreenLake. Or you look at a company like Zenseact, who's basically they do autonomous driving software. So they're doing massive parallel computing capabilities. They're pulling in hundreds of petabytes of data to then make driving safer and so you're seeing it on the data front. And then on the Edge, you look at anyone like a Patrick Terminal, for example. They run a whole terminal shipyard. They're getting data in from exporters, importers, regulators, the works and they have to real-time, analyze that data and say, where should this thing go? Especially with today's supply chain challenges, they have to be so efficient, that it's just fantastic. >> It was interesting to hear Fidelma, Keith, this morning on stage. It was the first time I'd really seen real clarity on the platform itself and that it's obviously her job is, okay, here's the platform, now, you guys got to go build on top of it. Both inside of HPE, but also externally, so your ecosystem partners. So, you mentioned the financial services companies like Barclays. We see those companies moving into the digital world by offering some of their services in building their own clouds. >> Keith: That's right. >> What's your vision for GreenLake in terms of being that platform, to assist them in doing that and the data component there? >> I think that was one of the most exciting things about not just showcasing the platform, but also the announcement of our private cloud enterprise, Cloud Service. Because in essence, what you're doing is you're creating that framework for what most companies are doing, which is they're becoming cloud service providers for their internal business units. And they're having to do showback type scenarios, chargeback type scenarios, deliver cloud services and solutions inside the organization so that open platform, you're spot on. For our ecosystem, it's fantastic, but for our customers, they get to leverage it as well for their own internal IT work that's happening. >> So you talk about hybrid cloud, you talk about private cloud, what's your vision? You know, we use this term Supercloud. This in a layer that goes across clouds. What's your thought about that? Because you have an advantage at the Edge with Aruba. Everybody talks about the Edge, but they talk about it more in the context of near Edge. >> That's right. >> We talked to Verizon and they're going far Edge, you guys are participating in that, as well as some of your partners in Red Hat and others. What's your vision for that? What I call Supercloud, is that part of the strategy? Is that more longer term or you think that's pipe dream by Dave? >> No, I think it's really thoughtful, Dave, 'cause it has to be part of the strategy. What I hear, so for example, Ford's a great example. They run Azure, AWS, and then they made a big deal with Google cloud for their internal cars and they run HPE GreenLake. So they're saying, hey, we got four clouds. How do we sort of disaggregate the usage of that? And Chris Lund, who is the VP of information technology at Liberty Mutual Insurance, he talked about it today, where he said, hey, I can deliver these services to my business unit. And they don't know, am I running on the public cloud? Am I running on our HPE GreenLake cloud? Like it doesn't matter to the end user, we've simplified that so much. So I think your Supercloud idea is super thoughtful, not to use the super term too much, that I'm super excited about because it's really clear of what our customers are trying to accomplish, which it's not about the cloud, it's about the solution and the business outcome that gets to work. >> Well, and I think it is different. I mean, it's not like the last 10 years where it was like, hey, I got my stuff to work on the different clouds and I'm replicating as much as I can, the cloud experience on-prem. I think you guys are there now and then to us, the next layer is that ecosystem enablement. So how do you see the ecosystem evolving and what role does Green Lake play there? >> Yeah. This has been really exciting. We had Tarkan Maner who runs Nutanix and Karl Strohmeyer from Equinix on stage with us as well. And what's happening with the ecosystem is, I used to say, one plus one has to equal three for our customers. So when you bring these together, it has to be that scenario, but we are joking that one plus one plus one equals five now because everything has a partner component to it. It's not about the platform, it's not about the specific cloud service, it's actually about the solution that gets delivered. And that's done with an ISV, it's done with a Colo, it's done even with the Hyperscalers. We have Azure Stack HCI as a fully integrated solution. It happens with managed service providers, delivering managed services out to their folks as well. So that platform being fully partner enabled and that ecosystem being able to take advantage of that, and so we have to jointly go to market to our customers for their business needs, their business outcomes. >> Some of the expansion of the ecosystem. we just had Red Hat on in the last hour talking about- >> We're so excited to partner with them. >> Right, what's going on there with OpenShift and Ansible and Rel, but talk about the customer influence in terms of the expansion of the ecosystem. We know we've got to meet customers where they are, they're driving it, but we know that HPE has a big presence in the enterprise and some pretty big customer names. How are they from a demand perspective? >> Well, this is where I think the uniqueness of GreenLake has really changed HPE's approach with our customers. Like in all fairness, we used to be a vendor that provided hardware components for, and we talked a lot about hardware costs and blah, blah, blah. Now, we're actually a partner with those customers. What's the business outcome you're requiring? What's the SLA that we offer you for what you're trying to accomplish? And to do that, we have to have it done with partners. And so even on the storage front, Qumulo or Cohesity. On the backup and recovery disaster recovery, yes, we have our own products, but we also partner with great companies like Veeam because it's customer choice, it's an open platform. And the Red Hat announcement is just fantastic. Because, hey, from a container platform standpoint, OpenShift provides 5,000 plus customers, 90% of the fortune 500 that they engage with, with that opportunity to take GreenLake with OpenShift and implement that container capabilities on-prem. So it's fantastic. >> We were talking after the keynote, Keith Townsend came on, myself and Lisa. And he was like, okay, what about startups? 'Cause that's kind of a hallmark of cloud. And we felt like, okay, startups are not the ideal customer profile necessarily for HPE. Although we saw Evil Geniuses up on stage, but I threw out and I'd love to get your thoughts on this that within companies, incumbents, you have entrepreneurs, they're trying to build their own clouds or Superclouds as I use the term, is that really the target for the developer audience? We've talked a lot about OpenShift with their other platforms, who says as a partner- >> We just announced another extension with Rancher and- >> Yeah. I saw that. And you have to have optionality for developers. Is that the way we should think about the target audience from a developer standpoint? >> I think it will be as we go forward. And so what Fidelma presented on stage was the new developer platform, because we have come to realize, we have to engage with the developers. They're the ones building the apps. They're the ones that are delivering the solutions for the most part. So yeah, I think at the enterprise space, we have a really strong capability. I think when you get into the sort of mid-market SMB standpoint, what we're doing is we're going directly to the managed service and cloud service providers and directly to our Disty and VARS to have them build solutions on top of GreenLake, powered by GreenLake, to then deliver to their customers because that's what the customer wants. I think on the developer side of the house, we have to speak their language, we have to provide their capabilities because they're going to start articulating apps that are going to use both the public cloud and our on-prem capabilities with GreenLake. And so that's got to work very well. And so you've heard us talk about API based and all of that sort of scenario. So it's an exciting time for us, again, moving HPE strategy into something very different than where we were before. >> Well, Keith, that speaks to ecosystem. So I don't know if you were at Microsoft, when the sweaty Steve Ballmer was working with the developers, developers. That's about ecosystem, ecosystem, ecosystem. I don't expect we're going to see Antonio replicating that. But that really is the sort of what you just described is the ecosystem developing on top of GreenLake. That's critical. >> Yeah. And this is one of the things I learned. So, being at Microsoft for as long as I was and leading the Azure business from a commercial standpoint, it was all about the partner and I mean, in all fairness, almost every solution that gets delivered has some sort of partner component to it. Might be an ISV app, might be a managed service, might be in a Colo, might be with our hybrid cloud, with our Hyperscalers, but everything has a partner component to it. And so one of the things I learned with Azure is, you have to sell through and with your ecosystem and go to that customer with a joint solution. And that's where it becomes so impactful and so powerful for what our customers are trying to accomplish. >> When we think about the data gravity and the value of data that put massive potential that it has, even Antonio talked about it this morning, being data rich but insights poor for a long time. >> Yeah. >> Every company in today's day and age has to be a data company to be competitive, there's no more option for that. How does GreenLake empower companies? GreenLake and its ecosystem empower companies to really live being data companies so that they can meet their customers where they are. >> I think it's a really great point because like we said, data's the new currency. Data's the new gold that's out there and people have to get their arms around their data estate. So then they can make these business decisions, these business insights and garner that. And Dave, you mentioned earlier, the Edge is bringing a ton of new data in, and my Zenseact example is a good one. But with GreenLake, you now have a platform that can do data and data management and really sort of establish and secure the data for you. There's no data latency, there's no data egress charges. And which is what we typically run into with the public cloud. But we also support a wide range of databases, open source, as well as the commercial ones, the sequels and those types of scenarios. But what really comes to life is when you have to do analytics on that and you're doing AI and machine learning. And this is one of the benefits I think that people don't realize with HPE is, the investments we've made with Cray, for example, we have and you saw on stage today, the largest supercomputer in the world. That depth that we have as a company, that then comes down into AI and analytics for what we can do with high performance compute, data simulations, data modeling, analytics, like that is something that we, as a company, have really deep, deep capabilities on. So it's exciting to see what we can bring to customers all for that spectrum of data. >> I was excited to see Frontier, they actually achieve, we hosted an event, co-produced event with HPE during the pandemic, Exascale day. >> Yeah. >> But we weren't quite at Exascale, we were like right on the cusp. So to see it actually break through was awesome. So HPC is clearly a differentiator for Hewlett Packard Enterprise. And you talk about the egress. What are some of the other differentiators? Why should people choose GreenLake? >> Well, I think the biggest thing is, that it's truly is a edge to cloud platform. And so you talk about Aruba and our capabilities with a network attached and network as a service capabilities, like that's fairly unique. You don't see that with the other companies. You mentioned earlier to me that compute capabilities that we've had as a company and the storage capabilities. But what's interesting now is that we're sort of taking all of that expertise and we're actually starting to deliver these cloud services that you saw on stage, private cloud, AI and machine learning, high performance computing, VDI, SAP. And now we're actually getting into these industry solutions. So we talked last year about electronic medical records, this year, we've talked about 5g. Now, we're talking about customer loyalty applications. So we're really trying to move from these sort of baseline capabilities and yes, containers and VMs and bare metal, all that stuff is important, but what's really important is the services that you run on top of that, 'cause that's the outcomes that our customers are looking at. >> Should we expect you to be accelerating? I mean, look at what you did with Azure. You look at what AWS does in terms of the feature acceleration. Should we expect HPE to replicate? Maybe not to that scale, but in a similar cadence, we're starting to see that. Should we expect that actually to go faster? >> I think you couched it really well because it's not as much about the quantity, but the quality and the uses. And so what we've been trying to do is say, hey, what is our swim lane? What is our sweet spot? Where do we have a superpower? And where are the areas that we have that superpower and how can we bring those solutions to our customers? 'Cause I think, sometimes, you get over your skis a bit, trying to do too much, or people get caught up in the big numbers, versus the, hey, what's the real meat behind it. What's the tangible outcome that we can deliver to customers? And we see just a massive TAM. I want to say my last analysis was around $42 billion in the next three years, TAM and the Azure service on-prem space. And so we think that there's nothing but upside with the core set of workloads, the core set of solutions and the cloud services that we bring. So yeah, we'll continue to innovate, absolutely, amen, but we're not in a, hey we got to get to 250 this and 300 that, we want to keep it as focused as we can. >> Well, the vast majority of the revenue in the public cloud is still compute. I mean, not withstanding, Microsoft obviously does a lot in SaaS, but I'm talking about the infrastructure and service. Still, well, I would say over 50%. And so there's a lot of the services that don't make any revenue and there's that long tail, if I hear your strategy, you're not necessarily going after that. You're focusing on the quality of those high value services and let the ecosystem sort of bring in the rest. >> This is where I think the, I mean, I love that you guys are asking me about the ecosystem because this is where their sweet spot is. They're the experts on hyper-converged or databases, a service or VDI, or even with SAP, like they're the experts on that piece of it. So we're enabling that together to our customers. And so I don't want to give you the impression that we're not going to innovate. Amen. We absolutely are, but we want to keep it within that, that again, our swim lane, where we can really add true value based on our expertise and our capabilities so that we can confidently go to customers and say, hey, this is a solution that's going to deliver this business value or this capability for you. >> The partners might be more comfortable with that than, we only have one eye sleep with one eye open in the public cloud, like, okay, what are they going to, which value of mine are they grab next? >> You're spot on. And again, this is where I think, the power of what an Edge to cloud platform like HPE GreenLake can do for our customers, because it is that sort of, I mentioned it, one plus one equals three kind of scenario for our customers so. >> So we can leave your customers, last question, Keith. I know we're only on day one of the main summit, the partner growth summit was yesterday. What's the feedback been from the customers and the ecosystem in terms of validating the direction that HPE is going? >> Well, I think the fantastic thing has been to hear from our customers. So I mentioned in my keynote recently, we had Liberty Mutual and we had Texas Children's Hospital, and they're implementing HPE GreenLake in a variety of different ways, from a private cloud standpoint to a data center consolidation. They're seeing sustainability goals happen on top of that. They're seeing us take on management for them so they can take their limited resources and go focus them on innovation and value added scenarios. So the flexibility and cost that we're providing, and it's just fantastic to hear this come to life in a real customer scenario because what Texas Children is trying to do is improve patient care for women and children like who can argue with that. >> Nobody. >> So, yeah. It's great. >> Awesome. Keith, thank you so much for joining Dave and me on the program, talking about all of the momentum with HPE Greenlake. >> Always. >> You can't walk in here without feeling the momentum. We appreciate your insights and your time. >> Always. Thank you you for the time. Yeah. Great to see you as well. >> Likewise. >> Thanks. >> For Keith White and Dave Vellante, I'm Lisa Martin. You're watching theCube live, day one coverage from the show floor at HPE Discover '22. We'll be right back with our next guest. (gentle music)

>> Welcome back to New York City everybody. This is The Cube's coverage of MongoDB World 2022, Dev Ittycheria, here is the president and CEO of MongoDB. Thanks for spending some time with us. >> It's Great to be here Dave, thanks for having me. >> You're very welcome. So your keynotes this morning, I was hearkening back to Steve Ballmer, running around the stage screaming, developers, developers, developers. You weren't jumping around like a madman, but the message was the same. And you've not deviated from that message. I remember when it was 10th Gen, so you've been consistent. >> Yes. >> Why is Mongo DB so alluring to developers? >> Yeah, because I would say the reason we're so popular Dave is that our whole business was founded on the ethos, so making developers incredibly productive. Just getting the infrastructure out of the way so that the developers is really focused on what's important and that's building great applications that transform their business. And the way you do that is you look at where they spend most of the time. and they spend most of the time working with data. How do you present data, the right data, the right time, at the right place, and the right way. And when you remove the friction of working with data, you unleash so much more productivity, which people just say, oh my goodness, I can move so much faster. Product leaders can get products out the door faster than the competitors. Senior level executives can seize new opportunities or respond to new threats. And that was so profound during COVID when everyone had to think about pivoting their business. >> When you came to MongoDB, why did you choose this company? What was it that excited you about it? >> I get that question a lot. I would say conventional wisdom would suggest that MongoDB was not a great choice. There weren't that many companies who were very successful in open source, Red Hat was the only one. No one had really built a deep technology company in New York city. They say, you got to do it in the valley. And database companies need a lot of capital. Now turns out that raising capital of this past decade was a lot easier, but it still takes a lot of time, and a lot of capitals, you have to have a lot of patience. When I did my diligence, I was actually a VC before I joined MongoDB. The whole next generation database segment was really taking off. And actually I looked at some competing investments to MongoDB, and when I did my diligence, it was clear even then. And this is circa 2012, that MongoDB is way ahead in terms of customer attraction, commercials, and even kind of developer mind share. And so I ended up passing those investments. and then lo and behold, I got a call from a very senior executive recruiter who said, Dev, you got to take a meeting with MongoDB, there's something really interesting going on. And they had raised a lot of capital and they had just not been able to kind of really execute in terms of the opportunity. And they realized they needed to make a change. And so one thing led to another. One of the things that really actually convinced me, is when I did my diligence, I realized the customers they had loved MongoDB. They just really weren't executing on all cylinders. And I always believe you never bet against a company whose customers love the product. And said, that's something here. The second thing I would say is open source. Yes, is true that open source was not very successful, but that was open source 1.0. Open source 2.0, the technology is much better than the commercial options. And so that convinced me. And then New York, I lived in New York a big part of my life. I think New York's a fabulous place to build a business. There's so much talent, your customers are right... You walk out the door, there's customers all over the place. And getting to Europe is very easy, Almost like flying to the west coast. So it's a very central place to build a business. >> And it's easier to fix execution, wouldn't you say? And maybe even go to market than it is to fix a product that customers really don't love. >> Correct, it's much easier to fix leadership issues, culture issues, execution issues. Nailing product market fit is very, very hard. And there were signs, there's still some issues, there's still some rough spots, but there a lot of signs that this company was very, very close, and that's why I took the bet. >> And this is before there was that huge influx of capital into the separating compute from storage and the whole cloud thing, which is interesting. Because you take a company like Cloudera, they got caught up in that and got kind of washed over. And I guess you could argue Hortonworks did too, and they could have dead ended both. And then that just didn't work. But it's interesting to see Mongo, the market kind of came to you. And that really does speak to the product. It wasn't a barrier for you. You guys have obviously a lot of work to get into the cloud with Atlas, but it seemed like a natural fit with the product. It wasn't like a complete fork. >> Well, I think the challenge that we had was we had a lot of adoption, but we had tough time commercializing the business. And at some point I had to tell the all employees, it's great that we have all these people who are using MongoDB, but if you don't start generating revenue, our investors are going to get tired of subsidizing this company. So I had to try and change the culture. And as you imagine, the engineers didn't really like the salespeople, the salespeople thought the engineers didn't really want to make any money. And what I said, like, let's all galvanize around customers and let's make them really excited and try and create a lot of value. And so we just put a lot more discipline in terms of how we prosecuted deals. We put a lot more discipline in terms of what are the problems we're trying to solve. And one thing led to another, we started building the business brick by brick. And one of the things that became clear for me was that the old open source model of trying to find that happy medium between what you give away and what you charge for, is always a tough game. Like because finding that where the paywall is, if you give away too much new features, you don't make any money. If you don't give away enough, you don't have any adoption. So you're caught in this catch-22. The best way to monetize open source, is open source as a service. And we saw Amazon do that frankly. We learned a lot from how Amazon did that. And one of the advantages that MongoDB had that I didn't fully appreciate when I joined the company, but I was very grateful. It is that they had a much more restrictive license. Which we ended up actually changing and made it even more restrictive, which allowed us to perfect ourselves from being cannibalized by the cloud providers, so that we could build our own business using our own IP that we had invested in and create a cloud service. >> That was a huge milestone. And of course you have great relationships with all the cloud providers, but it got contentious there for a while, but, you give the cloud providers an inch, they're going to take a mile. That's just the way, they're aggressive like that. But thank you for going through the history with me a little bit, because when you go back to the IPO, IPO was 2017, right? >> Correct. >> I always tell young investors, my kids especially, don't buy a stock at IPO, you're going to have a better chance, but the window from Mongo was very narrow. So, you didn't really get a much better chance a little bit. And then it's been a rocket ship since then. Sure, there's been some volatility, but you look at some of the big IPOs, like Facebook, or Snap, or even Snowflake, there was better opportunities. But you guys have executed really, really well. That's part of your ethos in your management team. And it came across on the earnings call recently. >> Yep. >> It was very optimistic, yet at the same time you set cautious tones and you got, I think high marks. >> Yes. >> For some of that caution but that execution. So talk about where you feel the business is today given the economic uncertainty? >> Well, what I'd say is we feel really good about the long term. We feel like the secular trends are really in our favor. Software's fundamentally transforming every industry. And people want to use modern software to either automate inefficient processes, enable new capabilities, drive better customer experiences. And the level of performance and scale you need for today's modern applications is profoundly different than applications yesterday. So we think we're well positioned for that. What we said on the earnings call was that we started seeing a moderation of growth, slight moderation of growth in our low end of the business in Europe. It was in our self-serve business and in the SMB space for the NQ1, towards the end of Q1. And we saw a little bit of that show up in the self-serve business in may in Q2. And that's why while we raised guidance, we basically quantified the impact, which is roughly about 30 to 35 million for the year, based on what we saw. And in that assumption, we assumed like... We just can't assume it's going to only be at the low in the market, probably some effect at the enterprise market. Maybe not as much, but there'll be some effect. So we need to factor that in. And we wanted to help kind of investors have some sort of framework to think about what the impact is. We don't want to be one of those companies that said absolutely nothing. And we don't want to be one of those companies that just waves the hand, but then it wasn't really that useful for investors. >> Yeah, I thought it was substantive. You talked about those market trends, you cited three things. The developers recognize that there are limits to legacy RDBMS. You talked about the, what I call point solutions creep. And then the document model is the best for developers. >> Great. >> And when the conversation turned to consumption, everybody's concerned about consumption obviously. You said... My take, somewhat insulated from that because you're running mission critical apps. It's not discretionary. My question to you is, should we rethink the definition of mission-critical? You think of Oracle mission critical running a bank. Mission -critical today in this digital world seems to be different, is that fair? >> Gosh, when's the last time you ever saw a website down? Like if you're running like any kind of digital channel, or engaging with the customers, or your partners, or your suppliers, you need to be up all the time. And so you need a very resilient, highly available data platform. It needs to be highly performance as you add more users, you need to be scale. And we saw a lot of that when COVID hit. Like companies had to completely repovit. And we talked about some examples where like a health and beauty retailer who was all kind of basically retail, had to suddenly pivot to e-commerce strategy. We've had streaming and gaming companies suddenly saw this massive influx of data that they scaled their operations very, very quickly. So I would say anytime you're engaging with customers, customers they're so used to the kind of the consumer facing applications. I almost joke like slow is the old down. If you're not performant, it doesn't matter. They're going to abandon you and go somewhere else. So if you're an e-commerce site and you're not performing well and not serving up the right skews, depending on what they're looking for, they're going to go somewhere else. >> So it's a click away. You talk about a hundred billion TAM, maybe that's even undercounted as you start to bring new capabilities in there. But there's no lack of market for you. >> Correct. >> How do you think about the market opportunity? >> Well, we believe... Again, software is transforming so many industries. IDC says that 715 million applications will be built over the next two to three years by 2025. To put that number of perspective, that's more apps that will be built the next three to four years than were built in the last 40. The rate and pace of innovation is as exploding. And people are building custom applications. Yes, Workday, Salesforce, other companies, commercial companies are great companies, but my competitors can use Workday or Salesforce, some of those commercial companies. That doesn't gimme a competitive advantage, what gives me a competitive advantage is building custom software that better engage my customers, that transforms my business in adding new capabilities or drives more efficiency. And the applications are only getting smarter. And so you're seeing that innovation explode and that plays to our strength. People need platforms like MongoDB to build the next generation of applications. >> So Atlas is now roughly 60% of your business, think is growing at 85%. So it's at least the midterm future. But my question to you is, is it the future? 'Cause when we start to think about the edge, it's not necessarily the cloud. You're not going to be able to go that round trip and the latency. And we had Verizon on earlier, talking about what they're doing with 5G, and the Mobile Edge. Is Mongo positioning for that edge? And is our definition of cloud changing? Where it's not just OnPrem and across clouds, but it's also out to the edge, this continuous experience. >> So I'll make two points. One, definitely we believe the applications of the future will be mobile first or purely mobile. Because one with the advent of 5G, the distinction between mobile and web is going to blur, with a hundred times faster networking speeds. But the second point I make is that how that shows up on our revenue on our income table will look like Atlas. Because we don't charge nothing for the end point, it's basically driving consumption of the back end. And so we've introduced a bunch of very, very sophisticated capabilities to synchronized data from the edge to the backend and vice versa with things like flexible sync. So we see so many customers now using that capability, whether you're field service technicians, whether you're a mobile first company, et cetera. So that will drive Atlas revenue. So on an income statement, it'll look like Atlas, but we're obviously addressing those broader set of mobile needs. >> You talk a lot about product market fit former VC, of course, Mark Andreen says, product market fit you kind of know when you see it, your hair's on fire, you can't buy a service. How do you know when you have product market fit? >> Well, one, we have the luxury of lots of customers. So they tell us pretty clearly when they're happy, and we can see that by usage behavior. Now the other benefit of a cloud service, is we can see the level of activity. We can see the level of engagement. We can see how much data they're consuming. We can see all the actions they're taking. So you get the fidelity of feedback you get from Atlas versus someone doing something behind their own firewall. And you kind of call 'em and check in on them is very, very different. So that level of insight gives us visibility in terms of what products and features have been used, gives us a sense how things going well, or is there something awry. Maybe they have misconfigured something or they don't know how to use some capabilities. So the level of engagement that we can have with a customer using a service is so much different. And so we've really invested in our customer success organization. So the byproduct of that is that our retention rates are also very, very strong. Because you have such better information about what's happening in terms of your customers. >> See retention in real time. You've been somewhat... Is just so hard to say this 'cause you're growing at 50% a year. But you're somewhat conservative about the pace of hiring for go to market. And I'm curious as to how you think about scaling, especially when you introduce new products. Atlas is several years ago. But as you extend your capabilities and add new products, how do you decide when to scale? >> So it's a constant process. We've been quite aggressive in scaling organization for a couple reasons. One, we have very low market share, so the market's vastly under penetrated. We still don't have reps in every NFL sitting in the United States, which just kind of crazy. There's other parts of the world that we are just still vastly under penetrated in. But we also look at how those organizations are doing. So if we see a team really killing it, we're going to deploy more resources. Because one, it tells us there's more opportunity there, and there's a strong team there. If we see a team that maybe is struggling a little bit, we'll try and uncover. Rather than just applying more resources in, we'll try and uncover what are the issues and make sure we stabilize the organization and then devote resources. It's all in the measure of like being very disciplined about where we deploy our resources, to get those kind of returns. And on the product side, we obviously go through a very iterative process and kind of do rank order all the projects and what we think the expected returns are. Obviously, we look at the customer feedback, we look at what our strategic priorities are. And that informs what projects we fund and what projects kind of are below the line. And we do that over and over again every quarter. So every quarter we revisit the business, we have a very QBR centric culture. So we're constantly checking in and seeing how the business is operating. And then we make those investment decisions. In general, we've been investing very aggressively in terms of expanding our reach around the world. >> It seems like, well, with Mongo, your product portfolios... From an outside observer standpoint, it seems like you've always had pretty good product market fit. But I was curious, in your VC days, would you ever encourage companies to scale go to market prior to having confidence in product market fit? Or did you always see those as sequential activities? >> Well, I think the challenge is this part it's analysis part is judgment. So you don't necessarily have to have perfect product market fit to start investing. But you also don't want to plow a bunch of resources and realize the product doesn't work and then how you're burning through a lot of cash. So there's a little bit of art to the process. When I joined MongoDB, I could tell that we had a strong engineering team. They knew how to build high quality products, but we just struggled with commercialization. The culture wasn't great across the company. And we had some leadership challenges. So that's when I joined, I kind of focused on those things and tried to bring the organization together. And slowly we started chipping away and making people feel like they were winners. And once you start winning, that becomes contagious. And then the nice thing is when you start winning, you get a lot more customer feedback. That feedback helps you refine your products even more, which then adds... It's like the flywheel effect that starts taking off. >> So it seems the culture's working now. Do you have a favorite product from the announcements today? >> Well, I really like our foray to analytics. And essentially what we're seeing is really two big trends. One you're seeing applications get smarter. What applications are doing is really automating a lot of processes and rather than someone having to press a button. Based on analytics, you can automate a lot of decision making. So that's one theme that we're seeing as applications get smarter. The second theme is that people want more and more insight in terms of what's happening. And the source of that is insights is your operational database. Because that's where you're having transactions, that's where you know what products are selling, that's where you know what customers are buying. So people want more and more real time data versus waiting to take that data, put it somewhere else and then run reports and then get some update at the end of the night or maybe at the week. So that's driving a lot of really interesting use cases. And especially when you marry in things like time series use cases where you're collecting a lot of data people want to see trend analysis what's happening. Which I think it's a very exciting area. We introduced a very cool feature called Queryable Encryption, which basically... The problem with encrypting data, is you can't really query it because my definition's encrypted. >> Yeah, you're right. >> But obviously data security is very important. What we announced, is we're using very sophisticated cryptography. People can query the data, but they don't have really access to the data. So it really protects you from like data breaches or malicious users accessing your data, but you still can kind of make that data usable. So that was a very interesting announcer that we made today. >> Sounds like magic without the performance hit. >> Yes. >> You can do that. Dev, thanks so much for coming in The Cube. Congratulations on all activity, bumper sticker on day one. >> Oh, it's super exciting. The energy was palpable, 3,300 people in the room, lots of customers, lots of users. We had lots of investors here as well for our investor day, have a dinner tonight with a bunch of senior execs, so it's been a busy day. >> Future is bright for MongoBD. Dev, thanks for so much for coming on The Cube. And thanks for watching, this is Dave Vellante and we'll see you next time. (upbeat music)

from the cube studios in palo alto in boston bringing you data driven insights from the cube and etr this is breaking analysis with dave vellante snowflake they love the stock at 400 and hated at 165 that's the nature of the business i guess especially in this crazy cycle over the last two years of lockdowns free money exploding demand and now rising inflation and rates but with the fed providing some clarity on its actions the time has come to really dig into the fundamentals of companies and there's no tech company that's more fun to analyze than snowflake hello and welcome to this week's wikibon cube insights powered by etr in this breaking analysis we look at the action of snowflake stock since its ipo why it's behaved the way it has how some sharp traders are looking at the stock and most importantly what customer demand looks like the stock has really provided some great theater since its ipo i know people who got in at 120 before the open and i know lots of people who kind of held their noses and bought the stock on day one at over 300 a day when it closed at around 240 that first day of trading snowflake hit 164 this week it's all-time low as a public company as my college roommate chip simonton a long time trader told me when great companies trade at all times time lows because of panic it's worth taking a shot he did now of course the stock could go lower there's geopolitical risk and the stock with a 64 billion market cap is expensive for a company that's forecast to do around 2 billion in product revenue this year and remember i don't recommend stocks you shouldn't take my advice and my comments you got to do your own research but i have lots of data and i have opinions and i'm willing to share that with you stocks like snowflake crowdstrike z-scaler octa and companies like this are highly volatile when markets are moving up they're going to move up faster than the mean when they're declining they're going to drop more severely and that's clearly what's happened to snowflake so with a company like this you when you see panic selling you'll also see panic buying sometimes like we we've seen with this name it went from 220 to 320 in a very short period earlier snowflake put in a short-term bottom this week and many traders feel the issue was oversold so they bought okay but not everyone felt this way and you can see this in the headlines snowflake hits low but cloud stocks rise and we're going to come back to that is it a buy don't buy the dip buy the dip and what snowflake investors can learn from microsoft and from the street.com snow stock is sliding on the back of ill-conceived guidance and to that i would say that conservative guidance these days is anything but ill-conceived now let's unpack all this a bit and to do so i reached out to ivana delevska who has been on this program before she's with spear invest a female-led etf that goes deep into understanding supply chains she came on breaking analysis and laid out her thesis to buy the dip on snowflake this is a while ago she told me currently spear still likes snowflake and has doubled its position let me share her analysis she called out two drivers for the downside interest rates you know rising of course in snowflakes guidance which my own publication called weak in that previous chart that i just showed you so let's dig into that a bit snowflake guided for product revenues of 67 year on year which was below buy side expectations but i believe within sell side consensus regardless the guide was nuanced and driven by snowflake's decision to pass along price efficiencies to customers from optimizing processor price performance predominantly from aws's graviton too this is going to hit snowflakes revenue a net of about a hundred million dollars this year but the timing's not precise because it's going to hit 165 million but they're going to make up 65 million in increased demand frank slootman on the earnings call made this very clear he said quote this is not philanthropy this stimulates demand classic slootman the point is spear and other bulls believe that this will result in a gain for snowflake over the medium term and we would agree price goes down roi gets better you throw more projects at snowflakes customers going to buy more snowflake and when that happens and it gives the company an advantage as they continue to build their moat it's a longer term bet on cloud and data which are good bets now some of this could also be competitive pressures there have been you know studies that are out there from competitors attacking snowflakes pricing and price performance and they make comparisons oracle's been pretty aggressive as have others but so far the company's customers continue to consume now at a very fast rate now on on this front what can we learn from microsoft that applies to snowflake that's the headline here from benzinga so the article quoted a wealth manager named josh brown talking about what happened to microsoft after the dot-com bubble burst and how they quadrupled earnings over the next decade and the stock went sideways suggesting the same thing could happen to snowflake now i'd like to make a couple of comments here first at the time microsoft was a 23 billion dollar company and it had a monopoly and was already highly profitable steve ballmer became the ceo of microsoft right after the dot-com bubble burst and he hugged onto windows for dear life and lived off of microsoft's pc software monopoly microsoft became an extremely profitable and remarkably uninteresting caretaker of a pc in on-prem software estate during balmer's tenure so i just don't see the comparison as relevant snowflake you know they're going to make struggle for other reasons but that one didn't really resonate with me what's interesting is this chart it poses the question do cloud and data markets behave differently it's a chart that shows aws growth rates over time and superimposes the revenue in the red in q1 2018 aws generated 5.4 billion dollars in revenue and that was growing at the time at nearly a 50 rate now that rate as you can see decelerated quite significantly as aws grew to a 50 billion dollar run rate company that down below where you see it bottoms now it makes sense right law of large numbers you can't keep growing that fast when you get that big well oops look what happened in 2021 aws's growth rate bottoms in the high 20s and then rockets back up to 40 this past quarter as aws surpasses a 70 billion dollar run rate so you have to ask is cloud different is data different is cloud data different or data cloud different let's put it in the snowflake parlance can cloud because of its consumption model and the speed of innovation and ecosystem depth and breadth enable snowflake to exhibit lots of variability in its growth rates versus a say progressive and somewhat linear decline as the company grows revenue which is what you would expect historically and part of the answer relates to its market size here's a chart we've shared before with some additions it's our version of snowflake's total available market they're tam which snowflake's version that that blue data cloud thing superimposed on the right it shows the various layers of market opportunity that we came up with that that snowflake and others we think have in front of them emerging from the disruption of legacy data lakes and data warehouses to what snowflake refers to as its data cloud we think about the data mesh concept and decentralized data architectures with domain ownership and data product and service builders as consistent with snowflake's data cloud vision where snowflake data stores are nodes they're just simply discoverable nodes on the mesh you could have you know data bricks data lakes you know s3 buckets on that mesh it doesn't matter they can be discovered they can be shared and of course they're governed in a federated model now in snowflake's model it's all inside the snowflake data cloud that's fine then you'll go to the out years it gets a little fuzzy you know from edge locations and ai inference it becomes massive and decision making occurs in real time where machines and machine data take over the world instead of you know clicks and keystrokes sounds out there but it's real and how exactly snowflake plays there at this point is unclear but one thing's for sure there'll be a lot of data and it's going to find its way into snowflake you know snowflake's not a real-time engine it's an analytical system it's moving into the realm of data science and you know we've talked about the need for you know semantic layer between those those two worlds of analytics and data science but expanding the scope further out we think that snowflake is a big role to play in this future and the future is massive okay check you got the big tam now as someone that looks at companies through a fundamentals prism you've got to look obviously at the markets in the tan which we just did but you also want to understand customers and it's not hard to find snowflake customers capital one disney micron alliance sainsbury sonos and hundreds of other companies i've talked to snowflake customers who have also been customers of oracle teradata ibm neteza vertica serious database practitioners and they tell me it's consistent soulflake is different they say it's simpler it's more agile it's less complicated to secure and it's disruptive to their traditional ways of doing data management now of course there are naysayers i've spoken to a number of analysts that feel snowflake is deficient in areas like workload management and course complex joins and it's too specialized in a world where we're seeing the convergence of analytics and transactional workloads our own david floyer believes that what oracle is doing with mysql heatwave is radically disruptive to many of the database architectures and blows away anything out there and he believes that snowflake and the likes of aws are going to have to respond now this the other criticism here is that snowflake is not architected for real-time inference where a lot of that edge activity is is going to happen it's a multi-hundred billion dollar market and so look snowflake has a ton of competition that's the other thing all the major cloud players have very capable and competitive database platforms even though they all partner with snowflake except oracle of course but companies like databricks and have garnered tons of vc other vc funded companies have raised billions of dollars to do this kind of elastic consumption based separate compute from storage stuff so you have to always keep an open mind and be aware of potential blind spots for these companies but to the criticisms i would say look snowflake they got there first and watch their ecosystem it's a real key to its continued success snowflake's not going to go it alone and it's going to use its ecosystem partners to expand its reach and accelerate the network effects and fill those gaps and it will acquire its stock is valuable so it should be doing that just as it did with streamlit a zero revenue company that it bought for 800 million dollars in stock and cash just recently streamlit is an open source python library that gets snowflake further deeper into that data science space that data brick space and look watch what snowflake is doing with snowpark it's an api library for processing data and building data intensive applications we've talked about snowflake essentially being becoming the super cloud and building this sort of path-like layer across clouds rather than trying to do it all themselves it seems snowflake is really staring at the api economy and building its ecosystem to plug those holes so let's come back to the customers here's a chart that shows snowflakes customer spending momentum or net score on the the top line that's the vertical axis and pervasiveness in the data or market share and that bottom brown line snowflake has unprecedented net scores and held them up for many many quarters as you can see here going back you know a couple years all leading to its expanded market penetration and measured as pervasiveness of so-called market share within the etr survey it's not like idc market share it's pervasiveness in the data set now i'll say this i don't see how this is sustainable i've been waiting for this to moderate i wouldn't be surprised to see snowflake come back to earth a little bit i think they'll clearly still be highly elevated based on the data that i've seen but but i could see in in one or more of the etr surveys this year this starting to moderate as they get they get big it's just it has to happen um but i would again expect them to have a high spending velocity score but i think we're going to see snowflake you know maybe porpoise a bit here meaning you know it moderates it comes back up it's just really hard to sustain this piece of momentum and higher train retain and scale without absorbing some some friction and some head woods that's going to slow you down but back to the aws growth example it's entirely possible that we could see a similar dynamic with snowflake that you saw with aws and you kind of see it with salesforce and servicenow very successful large entrenched entrenched companies and it's very possible that snowflake could pull back moderate and then accelerate that growth even though people are concerned about the moderated guidance of 80 percent growth yeah that's that's the new definition of tepid i guess i look i like to look at other some other metrics the one that really called you know my my my attention was the remaining performance obligations this last quarter rpo snowflakes is up to something like 2.6 billion and that is a forward-looking indicator of of future revenues so i want to i'd like to see that growing and it's growing at a fast pace so you're going to see some ups and downs with snowflake i have no doubt but i think things are still looking pretty solid for the company growth companies like snowflake and octa and z scalar those other ones that i mentioned earlier have probably been repriced and refactored by investors while there's always going to be market and of course geopolitical risk especially in these times fundamentals matter you've got huge market well capitalized you got a leadership position great products and strong customer adoption you also have a great team team is something else that we look for we haven't touched on that but i'll leave you with this thought everyone knows about frank slootman mike scarpelli and what they've accomplished in their years of working together that's why the stock you know in ipo was was so overvalued they had seen these guys do it before slootman just documented in all this in his book amp it up which gives great insight into the history of of that though you know that pair and and the teams that they've built the companies that they've built how he thinks about building companies and markets and and how you know total available markets super important but the whole philosophy and culture that that he's building in his management style but you got to wonder right how long is this guy going to keep going what keeps him motivated you know i asked him that one time here's what he said why i mean are you in this for the sport what's the story here uh actually that that's not a bad way of characterizing it i think i am in it uh you know for the sport uh you know the only way to become the best version of yourself is to be uh to be under the gun and uh you know every single day and that's that's certainly uh what we are it sort of has its own rewards building great products building great companies uh you know regardless of you know uh what the spoils may be uh it has its own rewards and i i it's hard for people like us to get off the field and uh you know hang it up so here we are so there you have it he's in it for the sport how great is that he loves building companies and that my opinion that's how frank slootman thinks about success it's not about money money's the byproduct of success as earl nightingale would say success is the progressive realization of a worthy ideal i love that quote building great companies building products that change the world changing people's lives with data and insights creating jobs creating life-altering wealth opportunities not for himself but for thousands of employees and partners i'd say that's a pretty worthy ideal and i hope frank slootman sticks with it for a while okay that's it for today thanks to stephanie chan for the background research she does for breaking analysis alex meyerson on production kristen martin and cheryl knight on social with rob hoff on siliconangle and thanks to ivana delevska of spear invest and my friend chip symington for the angles from the money side of things remember all these episodes are available as podcasts just search breaking analysis podcast i publish weekly on wikibon.com and siliconangle.com and don't forget to check out etr.plus for all the survey data you can reach me at devolante or david.velante siliconangle.com and this is dave vellante for cube insights powered by etrbsafe stay well and we'll see you next time [Music] you

>> From theCUBE Studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> As we reported last week, we believe that in the next decade, there will be changes in public policy that are going to restrict the way in which big internet companies are able to appropriate user data. Big tech came under fire again this week with the CEOs of Facebook, Twitter, and Google going toe to toe with several U.S. senators. Microsoft CEO Satya Nadella, however, was not one of those CEOs in the firing line. Microsoft doesn't heavily rely on ad revenues, rather, the company's momentum is steadily building around Azure, which by my estimates is now roughly 19% of Microsoft's overall revenues. It's surpassed, maybe nearly got to $7 billion for the first time on a quarterly basis. I'll come back to you on that. Hello everyone, and welcome to this week's Wikibon CUBE insights powered by ETR. In this Breaking Analysis, we'll respond to the many requests we've had to dig into the business of Microsoft a little bit deeper and provide a snapshot of how the company is faring in the ETR dataset. Let's take a quick look at Microsoft's financials, and the scope of Microsoft's business is actually mind-boggling. The company has roughly $150 billion in revenue, and it grew its top line 12% last quarter. It has more than $136 billion in cash on the balance sheet. Microsoft generates over $60 billion annually in operating cashflow. And last quarter alone threw off more than 19 billion in operating cash. Its gross margins are expanding across virtually all of its major business lines. So let's look at those business sectors. Microsoft, it doesn't suffer from the nagging problems that we've talked about with a lot of older tech companies. Companies like IBM and Dell and Cisco and Oracle and SAP, they struggle with growth sometimes because their growth businesses are not yet large enough to offset the declines in their traditional on-premises business segments. Now at the highest level, Microsoft breaks its business into three broad categories, and they're all growing quite nicely. Let me add some color here. Let's start with the productivity and business process line of business. LinkedIn, which is growing at 16%, is in this category as is Office. This business is shifting from one of on-prem licenses, which are really headwinds right now from Microsoft, to the cloud, in the form of SaaS with Office 365, which is growing at a 20% clip within its commercial market base. Even the consumer side of O365 is growing in the double digits. Dynamics is Microsoft's ERP and CRM business, and that falls into this slice of the pie, that's growing at 18%. And then the newer Dynamics 365, that's growing at 37%. So you can see, Microsoft is easily able to show growth despite the transitions from its legacy business. Intelligent cloud is the next segment. It's kind of the kitchen sink category, meaning there's stuff in there that includes a bit of cloud washing in my opinion, but Microsoft is not nearly as egregious as IBM with the liberties that it takes around its cloud categorization. For Microsoft it's a $13 billion quarterly business. And it's growing at 19%, as we show in the pie chart. Azure is an increasingly large portion of this segment. Azure is the most direct comparison with AWS. And I have said in the past quarter, I'd say it's around 50% of the intelligent cloud, and that it's approaching by my estimates around $7 billion a quarter. Azure grew at 47% annually this past quarter, the same growth rate as last quarter. Ironically, both AWS and Google Cloud grew at the same year over year rate this quarter as they did last quarter. AWS is 29% GCP in the high 50s by at my estimates. AWS revenue was 11.6 billion this past quarter, and I have GCP still well under 2 billion. We'll be updating our cloud numbers and digging deeper next week into this topic. So consider these estimates preliminary for Azure and GCP, which the respective companies don't break out for as Amazon, as you know, breaks out AWS explicitly. Now, back to Microsoft's intelligent cloud business. It includes on-prem server software, which is a managed decline business from Microsoft. They also include enterprise services in this category. So as you can see, it's not a clean cloud number for comparison purposes. Now finally, the third big slice of the pie is more personal computing. I know, it's kind of a dorky name, but nonetheless it's nearly a $12 billion business that's growing at 6% annually. The Windows OEM business is in here, as is Windows 10 and some security offerings. Surface is also in here as well and it's growing in the mid-thirties. Search revenue is in this category as well. It's declining per my earlier statements that it's not a main piece of Microsoft's business. Now, one of the most interesting areas of this sector is gaming. Microsoft's gaming business is growing at 21% and they just acquired ZeniMax Media for seven and a half billion dollars. Let me land on gaming for a minute. The gaming experts at theCUBE are really excited about Microsoft's XBox content services, which grew at about 30% this past quarter. Game Pass is essentially Microsoft's Netflix, or you can think of it as maybe like a Spotify model. You can get in for as low as $5 a month. I think you can pay as much as $15 a month and get access to a huge catalog of games that you can download. In November of last year, Microsoft launched its xCloud beta service, which allows you to download to a PC or a game box. Now eventually with 5G, the box goes away. All you'll need is a screen and you know, controller with the joysticks, no download. In fact, this is how it works today for Android. Now, interestingly, Apple is blocking Microsoft and some others like Google's Stadia, saying that they don't allow streaming game apps like Microsoft's xCloud service, because they don't follow the company's guidelines. What Apple's not telling you is that its adjacent offering, Apple Arcade, is considered subpar by hardcore gamers. And while Apple allows the streaming of movies and music from any service on the iPhone, it's decided not to allow streaming games. Now, the last thing I want to stress about Microsoft is its leverage point around developers. Developers is a big one here, we all remember the sweaty Steve Ballmer running around the stage like a mad man, screaming, "Developers, developers, developers!" Well, despite his obsession with Windows, he sure got that one right. The GitHub acquisition was Microsoft's way of buying more developer love. It does concentrate power with a tech giant, but you know what, if it wasn't Microsoft that bought GitHub, it would have been Facebook or Amazon or Google or one of the other tech giants. Now, despite some angst in the developer community over this, GitHub, it really is a linchpin for Microsoft to more tightly integrate GitHub with its pretty vast developer tool set. All right. Let's look deeper into the Microsoft data and focus on the enterprise. We'll bring in the ETR as we always do. We said last week that Google needed to look to the cloud and edge and get its head out of its ads. Well, Microsoft recovered from its Windows myopia after Satya Nadella took over in 2014, and by all accounts from the ETR survey data, Microsoft is killing it across the board. Let me start by putting Microsoft in context with some of the most prominent companies that both compete with, and sometimes partner with Microsoft. So this xy graph, it's one of our favorites. I show it all the time and it shows net score on the vertical axis, which is a measure of spending momentum from ETR, and the horizontal axis shows what we call market share, which is a measure of pervasiveness in the survey. Now in the upper right hand table, you can see the data for each of the companies. There's an ETR survey taken in October and it had more than 1400 completes. Several points stand out here. Microsoft is by far the most pervasive in the dataset, and yet its net score or spending velocity is right there with AWS, ServiceNow, Salesforce, and Workday. Only Snowflake, which I put in there for context, because of its consistently strong net scores, shows a meaningfully higher net score, of course from a much smaller base. Now what makes this so impressive is it represents a pan-Microsoft view across its entire portfolio. And you can see where companies like IBM and Oracle struggle from a momentum standpoint compared to Microsoft, which is a much, much larger company. It's that problem that I referred to earlier regarding the smaller size of their respective growth businesses. Also called Cisco and SAP, which despite some earnings challenges lately, are able to maintain net scores that while not in the green, they're not in the red, either. Green essentially means your overall install base is expanding. Red indicates contraction. Now let's look at the spending patterns for Microsoft customers. This chart shows the granularity of ETR's net score for Microsoft. The green represents increased spend and the red decreased spend. What's impressive is that Microsoft's red zone, I mean it's essentially negligible at 6%, when you add two reds up, the pink and the bright red. Their customers, they're all spending more, or the same, and very few are leaving the platform. Now I made the case last week that Google should double or triple its efforts and focus on cloud and the edge. Microsoft has already made that transition in its business and is the, that's the premise really of my discussion today. Specifically, Microsoft Azure is powering the company across all of its products and services. It's giving Microsoft tremendous operating leverage and steadily improving marginal economics. You can see that in the gross margin lines this quarter, across all of its businesses. And here's a graphic showing its position within cloud computing in terms of net score. Microsoft Azure functions, which is the first bar on this chart, and Azure overall, which is the third set of bars, shows momentum that's as strong as any cloud category, including AWS Lambda, which as we've talked about many times is killing it. Now five over from the left, count them over, one, two, three, four, five, you can see AWS overall. So that's a really important reference point. And while its levels are still elevated, Azure overall, which again is number three from the left, has meaningfully more momentum with 65% net score versus 52% for AWS overall. Now reasonable people can debate the quality of these respective clouds and you could argue over feature sets, who's got the most features, who's got the most regions, which regions are most reliable, who's got the most data centers and all that stuff, but it's really hard to argue against Microsoft's "Good enough" strategy. It's working in the cloud, and it has been working for the company for decades. Now another Microsoft strategy has been to be a late comer to a category and then bundle multiple capabilities into one suite. We saw this at first, really in the late 1980s with Office, and it's continued in a number of areas. The latest example, Microsoft Teams. Teams combines features like meetings, phone, chat, collaboration, as well as business process workflows that leverage tools like SharePoint and PowerPoint. I mean, it's a killer strategy, and you can see the results in this chart. I mean, it's essentially competing with Zoom, it's competing with Slack and all the sort of productivity plays there in that space. And this graphic compares net scores from the year ago October survey for reference, the July survey from this year, and the most recent October survey, as I said, 1400 respondents. Look at the lead that Teams has relative to the competition. There's a story across Microsoft's portfolio. Look at Microsoft's products in the ETR taxonomy. Video conferencing with Teams, productivity apps, RPA, cloud, cloud functions, machine learning, artificial intelligence, containers, security, end point, analytics, mobile, even database. The only signs of softness are really seen in the company's legacy businesses like Skype or on-prem licenses business, which I said were a headwind for them. And while PCs and tablets are weaker, that's what you'd expect from this mature industry relative to some of these other categories. Now, again, the premise here today is that by pivoting to the cloud and going all in competing with infrastructure as a service, Microsoft has created a platform for innovation for its business, and its developer chops are really credible, so it's evolving its install base very successfully to Azure. It's got a very solid hybrid and multi-cloud strategy and story with Microsoft Arc, which eventually it can take to the edge. You know, we think its edge strategy needs some work, but nonetheless, the company is really, really well positioned. Microsoft has a huge partner ecosystem, heck, it even partners with Oracle and database, as well as using Azure to enter new markets, including vertical clouds like healthcare, which it talked about on its earnings call. I mean, there's really not much on which you can criticize Microsoft. You know, sure, they've had some high profile failures in the past. The Nokia acquisition, the Windows phone, you remember Zune? Mixer, you know, Bing. Is Bing a fail? I don't know. Maybe not really. I guess the fail is, you know, what I was talking about last week with antitrust, Microsoft was distracted by the DOJ and maybe that caused it to miss search, give it to Google, and in that sense, maybe it was a failure, but overall, pretty good track record from Microsoft. Yeah, maybe you can say Microsoft is somewhat of a copycat, you know, the graphical user interface that they copied from the Mac, but hey, even Steve Jobs stole that. Surface, okay. The cloud? But so what, ideas, they're plentiful, execution is the key, really. No matter how you slice it, the data doesn't lie. Microsoft's financial performance, its pivot to the cloud, and the success of its adjacent businesses, make it one of the most remarkable rebirths in the history of technology industry. Now I didn't use the word turnaround because the company was never really in trouble. It just became irrelevant and kind of boring. Today, Microsoft is far from immaterial. Okay. That's it for this week. Remember all these episodes are available as podcasts wherever you listen. So please subscribe. I publish weekly on Wikibon.com and Siliconangle.com. And don't forget to check out ETR.plus for all the survey data and analytics. I appreciate always the comments on my LinkedIn posts or you can DM me @DVellante, or email me at David.Vellante@SiliconAngle.com. This is Dave Vellante for theCUBE Insights powered by ETR. Thanks for watching everybody, be well, and we'll see you next time. 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>> [Narrator} From theCUBE studios in Palo Alto, in Boston, connecting with thought leaders all around the world. This is theCUBE conversation. >> Hi, I'm Stu Miniman and welcome back to theCUBE on cloud. We're talking about developers and well, so many people remember the meme from 2010 of Steve Ballmer jumping around on stage developer, developers and developers. Many people know what is really important about developers they probably read the 2013 book called "The New Kingmakers" by Stephen O'Grady. And I'm really happy to welcome to the program Rachel Stephens who's an industry analyst with RedMonk who was cofounded by the aforementioned Stephen O'Grady. Rachel great to see you. Thank you so much for joining us. >> Well, thank you so much for having me. I'm excited to be here. I've had the opportunity to read some of what you've done. We've interacted on social media. We've come to talk at events back when we used to do those in people. In person I don't- >> Busy times >> So glad that you get to come on the program, especially you were the ones that I reached out when we had this developer track. If you could just give our audience a little bit about your background that developer credit that you have because as I joke, I've got a closet full of hoodies but I'm an infrastructure guy by training. I've been learning about, containers and serverless and all this stuff for years but I'm not myself much a developer I've touched a thing or two in the years. >> Yeah. So happy to be here. RedMonk has been around since 2002 and have kind of been beating that developer drum ever since then kind of. As the company, I'm the founder. Stephen James noticed that the decision making the developers is really a driver for what was actually ending up in the enterprise. And as even more true as cloud came onto the scene as open source exploded. And I think it's become a lot more of a common view now but in those early days, it was probably a little bit more of a controversial opinion. But I have been with the firm for coming up on five years now. I work as an industry analyst. We kind of help people understand bottoms up technology adoption trends. So that that's where I spend my time focusing is what's getting used in the enterprise. Why, what kind of trends are happening? And so, yeah, that's where we all come from. That's the history of RedMonk in 30 seconds. >> Awesome. Rachel, you talk about the enterprise and developers. For the longest time I just said there was this huge gap. You talk about bottoms up. It's like, well, developers use the tools that they want. If they don't have to, they don't pay for anything. And the general IT and the business sides of the house were like, "We don't know what those people in the corner are doing, it's important." And things like that. But today it feels like that that's closed a bunch. Where are we in your estimation? Are our developers, do they have a clear seat at the table? The title we had for this is whether the enterprise developer is enterprise developer and oxymoron in 2020, in 2021? >> I think enterprise developers have a lot more practical authority than people give them credit for, especially if you're kind of looking at that old view of the world where everything is driven by a buyer decision or kind of this top down purchasing motion. And we've really seen that authority of what is getting used and why change a lot in the last year, And like last decade, even more of people who are able to choose the tools that meet the job and bring in tools, regardless of whether they may be have that official approval through the right channels. Because of the convenience of trying to get things up and running we are asking developers to do so much right now and to go faster and shifting things left. And so the things that they are responsible for incorporating into the way they are building apps is growing, and so as we are asking developers to do more and to do more quickly, the tools that they need to do those tasks to get these apps built, the decision making is falling to them. This is what I need. This is what needs to come in. And so we are seeing basically the tools that enterprise are using are the tools that developers want to be using and they kind of just find their way into the enterprise. >> Now, I want to key off what you were talking about. Just developers are being asked to do more and more. We see these pendulum swings in technology. There was a time where it was like, "Well, I'll outsource it because that'll be easier and maybe it'll be less expensive." And number one, we found it wasn't necessarily cheaper. Number two, I couldn't make changes and I didn't understand what was happening. So when I talked to enterprises today absolutely, I need to have skillsets internally. I need to be able to respond to things fast and therefore I need skills and I need people that can build what they have. What do you see? What are those skill sets that are so important today? we've talked so many times over the years there's the skills gap. We don't have enough data scientists. We don't have enough developers. We don't have any of these things. So what do we have? And where were things trending? >> Yeah, it's one of those things for developers where they both have probably the most full tool set that we've seen in this industry in terms of things that are available to them. But it's also really hard because it also indicates that there's just this fragmentation at every level of the stack. And there's this explosion of choice in decisions that is happening up and down the stack of how are we going to build things. And so it's really tricky to be a developer these days in that you are making a lot of decisions, and you are wiring a lot of things together, and you have to be able to navigate a lot of things. And I think one of the things that is interesting here is that we have seen the phrase like full stack developer really carried a lot of panache maybe earlier this decade and has kind of fallen away just because we've realized that it's impossible for anybody to be able to span this whole broad spectrum of all of the things we are asking people to do. So we're seeing this explosion of choice which is meaning that there is a little bit more focus in where developers, we're trying to actually figure out what is my niche, what is it that I'm supposed to focus on? And so it's really just this balancing of act of trying to see this big picture of how to get this all put together and also have this focused area realizing that you have to specialize at some point. >> Rachel is such a great point there we've absolutely seen that Cambrian explosion of developer tools that are out there. If you go to the CNCF as landscape and look at everything out there or go to any of your public cloud providers there's no way that anybody even working for those companies know a good portion of the tools that are out there. So nobody can be a master of everything. How about from a cloud standpoint? There's the discussion of, what do I shift left? Can I just say okay, this piece of it, it can be a managed service, I don't need to think about it versus what skills that I need to have in house? What is it that's important? And obviously, as analysts, we know it varies greatly across companies, but what are some of those top things that we need to make sure that enterprises have the skillset and the tools in house that they should understand and what can they push off to their platform of choice? >> Yeah, I think your comment about managed services is really prescient because one of the trends that we are watching closely it's just this rise of managed services. And it kind of ties back into the concept you had before about like what in NITMSA have like the Nicholas car, IT doesn't matter, and we're pushing this all away. And then we realized, "Oh, we got to bring that all back." But we also realized we really want as enterprises want to be spending our time doing differentiated work and why we're together your entire infrastructure isn't necessarily differentiated for a lot of companies. And so it's trying to find this mix of where can I push my abstraction higher or to find a managed service that can do something for me? And we're seeing that happen in all levels of the stack. And so what we're seeing is this rise of composite apps, where we're going to say, "Okay, I'm going to pull in back end APIs from a whole bunch of tools like Twilio or Stripe or Alsera, or Algolia all of those things are great tools that I can incorporate into my app, and I can have this great user interface that I can use. And then I don't have to worry quite so much about building it all myself but I am responsible for wiring it all together. So I think it's that wired together set of interests that is happening for developers has the tool set that they are spending a lot of time with. So we see the managed services being important playing an important role in how apps are composed. And it's the composition of that app sort of is happening internally. >> One of the regular research items that I see at a RedMonk is, what languages, where are the trends going? There's been some relative stability but then some things change. I look at the tool set, you mentioned full stack developer. I talked to a full stack developer a couple of years ago and he's like, "Like, ah." Like Terraform is my life and I love everything and I've used it forever. And that was 18 months. And I kind of laugh because it's like, okay, I measure a lot of the technologies that I use in the decades, not that, "Oh wait, this came out six months ago and it's kind of mature." And of course, CICD come on, if it's six weeks old it's probably gone through a lot of iterations. So what do you say, do you have any research that you can share as to looking forward? What are the skill sets we need? How should we be training our force? What do we need to be looking at in this kind of next decade of cloud? >> Yeah, so when you spoke about languages we do a semi-annual review of language usage as seen on GitHub and discussion as seen on Stack Overflow which we fully recognize is not a perfect representation of how these languages are used in the broader world but those are data sets that we have access to that are relatively large and open. So just before anyone writes me, angry letters I said that's not the way that we should be doing it (laughs) but one of the things that we've seen over time is that there is a lot of relative stability in those top tier languages in terms of how they are used. And there's some movement at the bottom but the trends we're seeing where the languages are moving is type safety and having a safer language and the communities that are building upon other communities. So things like we're seeing Kotlin, that is able to kind of piggyback off of being a JVM based language and having that support from Google or we're seeing TypeScript where it can piggyback off of the breadth of deployment of JavaScript, things like that. So those things where we're combining together multiple trends that developers are interested in the same time, combined with an ecosystem that's already rich and full. And so we're seeing that there's definitely still movement in languages that people are interested in but also language on its own is probably pretty stable. So as you start to make language choices as a developer that's not where we're seeing a ton of like turnover. Language frameworks on the other hand, like if you're a JavaScript developer and all of a sudden, there's just explosion of frameworks that you need to choose from. That's maybe a different story, a lot more turnover there and harder to predict, but language trends are a little bit more stable over time. >> There's a lot change. Changing over time. Boy, I got to dig into, relatively recently I went down like the JAMStack ecosystem I've been digging into serverless for a number of years. What's your take on that? There's certain people I talked to and they're like, "I don't even need to be a coder. I can be a marketing person, and I can get things done." When I talked to some developers they're like, "Citizen developers, they're not developers, come on. I really need to be able to do this." So I'll give you your choice as to, serverless and some of these trends to kind of expand who can code and develop. >> Yeah, so for both trans like JAMstack and serverless, one of the things that we see kind of early in the iteration of a technology is that it is definitely not going to be the right tool for every app. And the number of apps that they approach will fit for, will grow as the tool develops and that you add more functionality over time. And all of these platforms expand the capability but definitely not the correct tool choice in every case. That said we do watch both of those areas with extreme interest in terms of what this next generation of apps can look like and probably will look like in a lot of cases. And I think that it is super interesting to think about who gets to build these apps, because I think one of the things that we probably haven't landed on the right language yet is what we should call these people because I don't think anyone associates themselves as a low code person, like if you're someone from marketing and all of a sudden you can build something technical that's really cool. And you're excited about that nobody else on your team can build. You're not walking around saying, "I am a low code marketing person" Like that's demeaning. Like I know I'm a technical marketer. Look what I just did. And if you're someone who codes professionally for a living and you use a low code tool to get something out the door quickly and you don't want to demean or say, "oh hi, I did a low code, that in a sec." Everybody is just trying to solve problems. And everybody is trying to figure out how to do things in the most effective way possible and making trade offs all the time. And so I don't think that the language of low code really is anything that resonates with any of the actual users of low code tools. And so I think that's something that we as an industry need to work on finding the correct language because it doesn't feel like we've landed there yet. >> Yeah, quick Rachel, what want to get your take on just careers for developers now to think about in 2020, everyone is distributed lots of conversations about where do we work? Can we bring your remote? Many of the developers I talked to already were remote. I had a chance to interview the head of remote for GitHub there were over a thousand people and they're fully remote. So, remote absolutely a thing for developers. But if you talk about careers it's no longer, "Oh, Hey, here's my CV." It's, "I'm on GitHub. You can see the code I've done." We haven't talked about open source yet. So give us your take on kind of developers today, career paths and kind of the online community there. >> Yeah. Oh, this could be its whole own conversation. (laughs) I'll try to figure it out the, my points. So I think one of the things that we are trying to figure out in terms of balance is how much are we expecting people to have done on the side? It's like a side project hustle versus doing exclusively getting your job done and not worrying too much about how many green squares you have on your GitHub profile. And I think it's a really emotional and fraught discussion in a lot of quarters because it can be exclusionary for people saying that you need to be spending your time on the side, working on this open source project because there are people who have very different life circumstances. Like if you're someone who already has kids or you're doing elder care or you are working another job and trying to transition into becoming a developer, it's a lot to ask these people to also have a side hustle. That said, it is probably working on open source having an understanding of how tools are done, having this experience and skills that you can point to and contributions you can point to, is probably one of the cleaner ways that you can start to move in the industry and break through to the industry because you can show your skills to other employers. You can kind of maybe make your way in as a junior developer because you've worked on a project and you make those connections. And so it's really still, again, it's one of those balancing act things where there's not a perfect answer because there really is two correct sides of this argument. And both of the things are true at the same time where it's it's hard to figure out what that early career path maybe looks like or even advancing in a career path if you're already a developer, it's, it's tricky. >> Well, I want to get your take on something too. I go back a decade or two, when I started working with Linux about 20 years ago back in the crazy days where it was just kind of lot of work and patches everywhere, and lots of different companies trying to figure out what they would be doing. And most of the people contributing to the free software before we even were calling it open source most of the time it was their side hustle. It was the thing they're doing. It was their passion project. I've seen some research in the last year or so that says the majority of people that are contributing to open source are doing it for their day job. Obviously there's lots of big companies. There's plenty of small companies. When I go to the Linux Foundation shows I mean, you've got whole companies that, that's their whole business. So I want to get your take on governance, contribution from the individual versus companies there's a lot of change going on there. Heck the public clouds, their impact on what's happening open source. What are you seeing there? And what's good, what's bad? What do we need to do better as a community? >> Yeah, I think the governance of opensource projects is definitely a live conversation that we're having right now about what does this need to look like? What role do companies need to be having, and how things are put together is a contribution or leadership position in the name of the individual or the name of the company. Like all of these are live conversations that are ongoing in a lot of communities. I think one of the things that is interesting overall though is just watching if you're taking a really zoomed out view of what open source looks like, where it was at one point deemed at cancer by one of the vendors in this space, and now it is something that is just absolutely, an inherent part of most tech vendors and end users is an important part of how they are building and using software today. Like open source is really an integral tool in what is happening in the enterprise and what's being built in the enterprise. And so I think that it is a natural thing that this conversation is evolving in terms of what is the enterprise's role here and how are we supposed to govern for that? And I don't think that we have landed on all the correct answers yet but I think that just looking at that long view it makes sense that this is an area where we are spending some time focusing. >> So Rachel, without giving away state secrets we know RedMonk, you do lots of consulting out there. What advice do you give to the industry? We said, we're making progress. There's good things there. But if we say, okay, I want to at 2030, look back and say, "Boy, this is wonderful for developers, everything's going good." What things have we've done along the way, where have we made progress? >> Yeah, so I think it kind of ties back to the earlier discussion we were having around composite apps and thinking about what that developer experience looks like, I think that right now it is incredibly difficult for developers to be wiring everything together. And there's just so much for developers to do to actually, get all of these apps from source to production. So when we talk with our customers, a lot of our time is spent thinking, how can you not only solve this individual piece of the puzzle, but how can you figure out how to fit it into this broader picture of what it is the developers are trying to accomplish? How can you think about where you're art fits not only your tool or your project whatever it is that you are working on, how does this fit? Not only in terms of your one unique problem space but where does this problem space fit in the broader landscape? Because I think that's going to be a really key element of what the developer experience looks like in the next decade, is trying to help people actually, get everything wired together in a coherent way. >> Rachel, no shortage of work to do there, really appreciate you joining us thrilled to have you finally as a CUBE alumni. Thanks so much for joining. >> Thank you for having me. I appreciate it. >> All right. Thank you for joining us. This is the Developer Content for theCUBE on cloud. I'm Stu Miniman. And as always, thank you for watching theCUBE. (upbeat music)

(upbeat music) >> From Santa Clara, in the heart of Silicon Valley, it's the Cube, covering the Churchills, 2019. Brought to you by Silicon Angle Media. >> Welcome back here Jeff Frick here with the Cube. We're at the Chuchill's, it's the 9th annual award celebration put on by the Churchill club and the theme is all about leadership this year. We're really excited to have a very special guest John W. Thompson, chairman of Microsoft, a partner at Lightspeed Ventures, he's been around a long time. He's known and talks to a lot of leaders. So john, great to have you on. >> Nice to be here, thank you very much for having me. >> So leadership is such an interesting topic right? You go everything from, um, West point and trying to train young men to be leaders in a military situation to a start up that starts as some small company that had some interesting idea that grows to a huge corporate thing that's changing the world. Ya know, what are some of your thoughts as Silicon Valley is going through some hiccups right now and when you look, >> [John W. Thompson] We are? >> Just a couple little ones. >> I did recognize any of those. >> Well maybe not looking at the stock market. I don't know when that thing is coming back down. But you know when you think about leaders, what are somethings people maybe don't think about and really more interestingly how should people grow or what do you look for in a board member when you're talking to some CEO of a hot rising company? >> Well I think leadership is is as much about your personality and the business that use chose to go run is anything else. And the skills and experiences that someone might need to run a, pick a business, a business the size of Microsoft are fundamentally different than what you might need to run Rubrik, which is a company whose board I serve on. But that being said, leadership has some core principles that are critical independent of the size of the company or organization you're on. First of which is, integrity, second of which is focus, third of which is follow through and execution. There is lots of things that fundamental do and do well. And those who don't do well, don't become or stay leaders very long, that's for sure. >> It's interesting to look at Microsoft cause, ya know, three big personalities. Obviously Bill got it started as a young kid, I mean he was literally a kid in college. Um, then you had Steve Ballmer come in, completely different personalities and ya know, interesting for Bill to be willing to give up their reigns and then ya know, some tough times at Microsoft little bit stagnant and then Satya came in and just has supercharged and really driven a huge transformation in a giant big company. What are some of the attributes when you look at those three as leaders and you've worked with them, that make them so successful? >> Well, I think each of them brought something fundamentally different to the table when they were in the leadership role. In the case of Bill, he clearly was a visionary. He defined a point of view about the technology industry. That had he not done that, we wouldn't be where we are in the world today. And so, Bills role was unique. In the case of Steve, the company had hit a significant bump in the road all around the anti-trust activity. And candidly, it's my impression that Bill really didn't want to be involved in that, so he turned to Steve and says tag you're it. And Steve had a very fundamental view about execution. He was very much focus on execute, execute, execute. And if you look at the way the company preformed, its revenue grew from roughly ten, fifteen billion to almost eighty billion dollars during his term as CEO. However, the stock did not perform very well. So people weren't very happy with that. Ironically enough Satya come in, Satya had run the search business, had run the cloud business, had even run the enterprise software business. So he had a very fundamental view about of what he thought the company needed to do. And there were two issues, issues number one was strategy around cloud. And on the day of his announcement, he announced mobile first, cloud first are the strategies of Microsoft. And then he quickly, quickly made it clear that the number two issue, for the company, was about its culture. And while I am unbelievably fascinated by how much progress we've made on the product front, I'm even more encouraged by what has happened on the, candidly, on the cultural front. >> Right. So on the cultural front that is, are you a harder thing to impact especially on a large global company with hundreds of thousands of employees distributed all over the world, so what are the secrets that change culture like that? >> Its fundamental, it's about openness and honesty and candor. Um, one of the things that happens here in the valley, often for some companies is when they do their quarterly or monthly employee all hands meetings, guess what? They screen and filter all of the questions. Well, we don't do that at Microsoft office. Satya does not do that. He wants to be open and honest and candid with his employees with what's going on. My gosh! That's what real leaders do. And so I think what he has done is nothing that is unique, it's just consistent. He has been very very consistent and predictable in his execution of what openness, listening rather than talking, all of the things that good leaders are able to do. >> Right, its funny the one word you haven't said since we have been sitting here, you keep saying execution of focus, which I love focus execute and delight the customer. You haven't said strategy one single time. you said vision, but not strategy. Its interesting because I think a lot of people don't put enough emphasis on, its just work, you just got to execute. >> Its one thing to have a strategy, but if you can't execute the strategy, of what value is it? So I have always had a view in my roles as leader that it's about focus and executing. Yes, you have to come up with a vision and yes you have to create ideas that employees, and partners, and customers can become excited about. But ultimately it's about execution day in and day out. 368 days of the years, not 365. >> Alright, final question I know you've got a busy night. As you look as some leaders that you look up to, maybe not of this generation that you've been working with, but maybe of a past generation, who are some of the folks that you look to for your inspiration on the leadership side? >> Well, I would have to say the first one was the former vice chairman of IBM, who I was the chief of staff to many many many years ago. His name was Paul Rizzo. Paul was probably one of the most influential people in the company during that period of time, but you'd never know it. He had a level of humility about himself. He had a level of openness and candor in his interaction with employees at all levels up and down the line. And a company of IBM's size back in those days, it was two, three hundred thousand people big. And so he would be the first leader that comes to my mind as someone who was impactful on me. Another one would have been, a guy who created Akamai. He's on the board of Oracle and he's an awesome awesome friend of mine. He was the guy that ran the America's and gave me my first really really big job. And the fact that he was willing to give a guy like me a job like that, was a pretty important move. George Conrades is his name by the way. And so those two people were very very influential as leaders. As I would look at them and try to determine whether or not can I, can I pattern myself after that? Or are there things that they do and say and execute that I should consider as I think about my evolving leadership. >> Right so important to have people that you can look up to, learn from, and to take care of ya and help you along the way. >> [John W. Thompson] I agree >> John, thanks for spending some time it's always great to sit down with you >> Nice to see you as well. >> And continue success. We'll hopefully see you next time not to long from now. >> Lets hope not. >> Alright, he's John W. Thompson and I'm Jeff Frick. You're watching the Cube, were at the Churchill's in Santa Clara California. Thanks for watching we'll see you next time. (upbeat music)

(techno music) >> From Cambridge, Massachusetts, it's theCUBE. Covering MIT Chief Data Officer and Information Quality Symposium 2019, brought to you by SiliconANGLE Media. >> Welcome back to MIT CDOIQ. The CDO Information Quality Conference. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante. I'm here with my co-host, Paul Gillin. This is our day two of our two day coverage. Jean Ross is here. She's the principle research scientist at MIT CISR, Jean good to see you again. >> Nice to be here! >> Welcome back. Okay, what do all these acronyms stand for, I forget. MIT CISR. >> CISR which we pronounce scissor, is the Center for Information Systems Research. It's a research center that's been at MIT since 1974, studying how big companies use technology effectively. >> So and, what's your role as a research scientist? >> As a research scientist, I work with both researchers and with company leaders to understand what's going on out there, and try to present some simple succinct ideas about how companies can generate greater value from information technology. >> Well, I guess not much has changed in information technology since 1974. (laughing) So let's fast forward to the big, hot trend, digital transformation, digital business. What's the difference between a business and a digital business? >> Right now, you're hoping there's no difference for you and your business. >> (chuckling) Yeah, for sure. >> The main thing about a digital business is it's being inspired by technology. So in the past, we would establish a strategy, and then we would check out technology and say, okay, how can technology make us more effective with that strategy? Today, and this has been driven a lot by start-ups, we have to stop and say, well wait a minute, what is technology making possible? Because if we're not thinking about it, there sure are a lot of students at MIT who are, and we're going to miss the boat. We're going to get Ubered if you will, somebody's going to think of a value proposition that we should be offering and aren't, and we'll be left in the dust. So, our digital businesses are those that are recognizing the opportunities that digital technologies make possible. >> Now, and what about data? In terms of the role of digital business, it seems like that's an underpinning of a digital business. Is it not? >> Yeah, the single biggest capability that digital technologies provide, is ubiquitous data that's readily accessible anytime. So when we think about being inspired by technology, we could reframe that as inspired by the availability of ubiquitous data that's readily accessible. >> Your premise about the difference between digitization and digital business is interesting. It's more than just a sematic debate. Do companies now, when companies talk about digital transformation these days, in fact, are most of them of thinking of digitization rather than really transformative business change? >> Yeah, this is so interesting to me. In 2006, we wrote a book that said, you need to become more agile, and you need to rely on information technology to get you there. And these are basic things like SAP and salesforce.com and things like that. Just making sure that your core processes are disciplined and reliable and predictable. We said this in 2006. What we didn't know is that we were explaining digitization, which is very effective use of technology in your underlying process. Today, when somebody says to me, we're going digital, I'm thinking about the new value propositions, the implications of the data, right? And they're often actually saying they're finally doing what we thought they should do in 2006. The problem is, in 2006, we said get going on this, it's a long journey. This could take you six, 10 years to accomplish. And then we gave examples of companies that took six to 10 years. LEGO, and USAA and really great companies. And now, companies are going, "Ah, you know, we really ought to do that". They don't have six to 10 years. They get this done now, or they're in trouble, and it's still a really big deal. >> So how realistic is it? I mean, you've got big established companies that have got all these information silos, as we've been hearing for the last two days, just pulling their information together, knowing what they've got is a huge challenge for them. Meanwhile, you're competing with born on the web, digitally native start-ups that don't have any of that legacy, is it really feasible for these companies to reinvent themselves in the way you're talking about? Or should they just be buying the companies that have already done it? >> Well good luck with buying, because what happens is that when a company starts up, they can do anything, but they can't do it to scale. So most of these start-ups are going to have to sell themselves because they don't know anything about scale. And the problem is, the companies that want to buy them up know about the scale of big global companies but they don't know how to do this seamlessly because they didn't do the basic digitization. They relied on basically, a lot of heroes in their company to pull of the scale. So now they have to rely more on technology than they did in the past, but they still have a leg up if you will, on the start-up that doesn't want to worry about the discipline of scaling up a good idea. They'd rather just go off and have another good idea, right? They're perpetual entrepreneurs if you will. So if we look at the start-ups, they're not really your concern. Your concern is the very well run company, that's been around, knows how to be inspired by technology and now says, "Oh I see what you're capable of doing, "or should be capable of doing. "I think I'll move into your space". So this, the Amazon's, and the USAA's and the LEGO's who say "We're good at what we do, "and we could be doing more". We're watching Schneider Electric, Phillips's, Ferovial. These are big ole companies who get digital, and they are going to start moving into a lot of people's territory. >> So let's take the example of those incumbents that you've used as examples of companies that are leaning into digital, and presumably doing a good job of it, they've got a lot of legacy debt, as you know people call it technical debt. The question I have is how they're using machine intelligence. So if you think about Facebook, Amazon, Microsoft, Google, they own horizontal technologies around machine intelligence. The incumbents that you mentioned, do not. Now do they close the gap? They're not going to build their own A.I. They're going to buy it, and then apply it. It's how they apply it that's going to be the difference. So do you agree with that premise, and where are they getting it, do they have the skill sets to do it, how are they closing that gap? >> They're definitely partnering. When you say they're not going to build any of it, that's actually not quite true. They're going to build a lot around the edges. They'll rely on partners like Microsoft and Google to provide some of the core, >> Yes, right. >> But they are bringing in their own experts to take it to the, basically to the customer level. How do I take, let me just take Schneider Electric for an example. They have gone from being an electrical equipment manufacturer, to a purveyor of energy management solutions. It's quite a different value proposition. To do that, they need a lot of intelligence. Some of it is data analytics of old, and some of it is just better representation on dashboards and things like that. But there is a layer of intelligence that is new, and it is absolutely essential to them by relying on partners and their own expertise in what they do for customers, and then co-creating a fair amount with customers, they can do things that other companies cannot. >> And they're developing a software presumably, a SAS revenue stream as part of that, right? >> Yeah, absolutely. >> How about the innovators dilemma though, the problem that these companies often have grown up, they're very big, they're very profitable, they see disruption coming, but they are unable to make the change, their shareholders won't let them make the change, they know what they have to do, but they're simply not able to do it, and then they become paralyzed. Is there a -- I mean, looking at some of the companies you just mentioned, how did they get over that mindset? >> This is real leadership from CEO's, who basically explain to their boards and to their investors, this is our future, we are... we're either going this direction or we're going down. And they sell it. It's brilliant salesmanship, and it's why when we go out to study great companies, we don't have that many to choose from. I mean, they are hard to find, right? So you are at such a competitive advantage right now. If you understand, if your own internal processes are cleaned up and you know how to rely on the E.R.P's and the C.R.M's, to get that done, and on the other hand, you're using the intelligence to provide value propositions, that new technologies and data make possible, that is an incredibly powerful combination, but you have to invest. You have to convince your boards and your investors that it's a good idea, you have to change your talent internally, and the biggest surprise is, you have to convince your customers that they want something from you that they never wanted before. So you got a lot of work to do to pull this off. >> Right now, in today's economy, the economy is sort of lifting all boats. But as we saw when the .com implosion happened in 2001, often these breakdown gives birth to great, new companies. Do you see that the next recession, which is inevitably coming, will be sort of the turning point for some of these companies that can't change? >> It's a really good question. I do expect that there are going to be companies that don't make it. And I think that they will fail at different rates based on their, not just the economy, but their industry, and what competitors do, and things like that. But I do think we're going to see some companies fail. We're going to see many other companies understand that they are too complex. They are simply too complex. They cannot do things end to end and seamlessly and present a great customer experience, because they're doing everything. So we're going to see some pretty dramatic changes, we're going to see failure, it's a fair assumption that when we see the economy crash, it's also going to contribute, but that's, it's not the whole story. >> But when the .com blew up, you had the internet guys that actually had a business model to make money, and the guys that didn't, the guys that didn't went away, and then you also had the incumbents that embrace the internet, so when we came out of that .com downturn, you had the survivors, who was Google and eBay, and obviously Amazon, and then you had incumbent companies who had online retailing, and e-tailing and e-commerce etc, who thrived. I would suspect you're going to see something similar, but I wonder what you guys think. The street today is rewarding growth. And we got another near record high today after the rate cut yesterday. And so, but companies that aren't making money are getting rewarded, 'cause they're growing. Well when the recession comes, those guys are going to get crushed. >> Right. >> Yeah. >> And you're going to have these other companies emerge, and you'll see the winners, are going to be those ones who have truly digitized, not just talking the talk, or transformed really, to use your definition. That's what I would expect. I don't know, what do you think about that? >> I totally agree. And, I mean, we look at industries like retail, and they have been fundamentally transformed. There's still lots of opportunities for innovation, and we're going to see some winners that have kind of struggled early but not given up, and they're kind of finding their footing. But we're losing some. We're losing a lot, right? I think the surprise is that we thought digital was going to replace what we did. We'd stop going to stores, we'd stop reading books, we wouldn't have newspapers anymore. And it hasn't done that. Its only added, it hasn't taken anything away. >> It could-- >> I don't think the newspaper industry has been unscathed by digital. >> No, nor has retail. >> Nor has retail, right. >> No, no no, not unscathed, but here's the big challenge. Is if I could substitute, If I could move from newspaper to online, I'm fine. You don't get to do that. You add online to what you've got, right? And I think this right now is the big challenge. Is that nothing's gone away, at least yet. So we have to sustain the business we are, so that it can feed the business we want to be. And we have to make that transition into new capabilities. I would argue that established companies need to become very binary, that there are people that do nothing but sustain and make better and better and better, who they are. While others, are creating the new reality. You see this in auto companies by the way. They're creating not just the autonomous automobiles, but the mobility services, the whole new value propositions, that will become a bigger and bigger part of their revenue stream, but right now are tiny. >> So, here's the scary thing to me. And again, I'd love to hear your thoughts on this. And I've been an outspoken critic of Liz Warren's attack on big tech. >> Absolutely. >> I just think if they're breaking the law, and they're really acting like monopolies, the D.O.J and F.T.C should do something, but to me, you don't just break up big tech because they're good capitalists. Having said that, one of the things that scares me is, when you see Apple getting into payment systems, Amazon getting into grocery and logistics. Digital allows you to do something that's never happened before which is, you can traverse industries. >> Yep. >> Yeah, absolutely >> You used to have this stack of industries, and if you were in that industry, you're stuck in healthcare, you're stuck in financial services or whatever it was. And today, digital allows you to traverse those. >> It absolutely does. And so in theory, Amazon and Apple and Facebook and Google, they can attack virtually any industry and they kind of are. >> Yeah they kind are. I would certainly not break up anything. I would really look hard though at acquisitions, because I think that's where some of this is coming from. They can stop the overwhelming growth, but I do think you're right. That you get these opportunities from digital that are just so much easier because they're basically sharing information and technology, not building buildings and equipment and all that kind of thing. But I think there all limits to all this. I do not fear these companies. I think there, we need some law, we need some regulations, they're fine. They are adding a lot of value and the great companies, I mean, you look at the Schneider's and the Phillips, yeah they fear what some of them can do, but they're looking forward to what they provide underneath. >> Doesn't Cloud change the equation here? I mean, when you think of something like Amazon getting into the payments business, or Google in the payments business, you know it used to be that the creating of global payments processing network, just going global was a huge barrier to entry. Now, you don't have nearly that same level of impediment right? I mean the cloud eliminates much of the traditional barrier. >> Yeah, but I'll tell you what limits it, is complexity. Every company we've studied gets a little over anxious and becomes too complex, and they cannot run themselves effectively anymore. It happens to everyone. I mean, remember when we were terrified about what Microsoft was going to become? But then it got competition because it's trying to do so many things, and somebody else is offering, Sales Force and others, something simpler. And this will happen to every company that gets overly ambitious. Something simpler will come along, and everybody will go "Oh thank goodness". Something simpler. >> Well with Microsoft, I would argue two things. One is the D.O.J put some handcuffs on them , and two, with Steve Ballmer, I wouldn't get his nose out of Windows, and then finally stuck on a (mumbles) (laughter) >> Well it's they had a platform shift. >> Well this is exactly it. They will make those kind of calls . >> Sure, and I think that talks to their legacy, that they won't end up like Digital Equipment Corp or Wang and D.G, who just ignored the future and held onto the past. But I think, a colleague of ours, David Moschella wrote a book, it's called "Seeing Digital". And his premise was we're moving from a world of remote cloud services, to one where you have to, to use your word, ubiquitous digital services that you can access upon which you can build your business and new business models. I mean, the simplest example is Waves, you mentioned Uber. They're using Cloud, they're using OAuth.in with Google, Facebook or LinkedIn and they've got a security layer, there's an A.I layer, there's all your BlockChain, mobile, cognitive, it's all these sets of services that are now ubiquitous on which you're building, so you're leveraging, he calls it the matrix, to the extent that these companies that you're studying, these incumbents can leverage that matrix, they should be fine. >> Yes. >> The part of the problem is, they say "No, we're going to invent everything ourselves, we're going to build it all ourselves". To use Andy Jassy's term, it's non-differentiated heavy lifting, slows them down, but there's no reason why they can't tap that matrix, >> Absolutely >> And take advantage of it. Where I do get scared is, the Facebooks, Apples, Googles, Amazons, they're matrix companies, their data is at their core, and they get this. It's not like they're putting data around the core, data is the core. So your thoughts on that? I mean, it looks like your slide about disruption, it's coming. >> Yeah, yeah, yeah, yeah. >> No industry is safe. >> Yeah, well I'll go back to the complexity argument. We studied complexity at length, and complexity is a killer. And as we get too ambitious, and we're constantly looking for growth, we start doing things that create more and more tensions in our various lines of business, causes to create silos, that then we have to coordinate. I just think every single company that, no cloud is going to save us from this. It, complexity will kill us. And we have to keep reminding ourselves to limit that complexity, and we've just not seen the example of the company that got that right. Sooner or later, they just kind of chop them, you know, create problems for themselves. >> Well isn't that inherent though in growth? >> Absolutely! >> It's just like, big companies slow down. >> That's right. >> They can't make decisions as quickly. >> That's right. >> I haven't seen a big company yet that moves nimbly. >> Exactly, and that's the complexity thing-- >> Well wait a minute, what about AWS? They're a 40 billion dollar company. >> Oh yeah, yeah, yeah >> They're like the agile gorilla. >> Yeah, yeah, yeah. >> I mean, I think they're breaking the rule, and my argument would be, because they have data at their core, and they've got that, its a bromide, but that common data model, that they can apply now to virtually any business. You know, we're been expecting, a lot of people have been expecting that growth to attenuate. I mean it hasn't yet, we'll see. But they're like a 40 billion dollar firm-- >> No that's a good example yeah. >> So we'll see. And Microsoft, is the other one. Microsoft is demonstrating double digit growth. For such a large company, it's astounding. I wonder, if the law of large numbers is being challenged, so. >> Yeah, well it's interesting. I do think that what now constitutes "so big" that you're really going to struggle with the complexity. I think that has definitely been elevated a lot. But I still think there will be a point at which human beings can't handle-- >> They're getting away. >> Whatever level of complexity we reach, yeah. >> Well sure, right because even though this great new, it's your point. Cloud technology, you know, there's going to be something better that comes along. Even, I think Jassy might have said, If we had to do it all over again, we would have built the whole thing on lambda functions >> Yeah. >> Oh, yeah. >> Not on, you know so there you go. >> So maybe someone else does that-- >> Yeah, there you go. >> So now they've got their hybrid. >> Yeah, yeah. >> Yeah, absolutely. >> You know maybe it'll take another ten years, but well Jean, thanks so much for coming to theCUBE, >> it was great to have you. >> My pleasure! >> Appreciate you coming back. >> Really fun to talk. >> All right, keep right there everybody, Paul Gillin and Dave Villante, we'll be right back from MIT CDOIQ, you're watching theCUBE. (chuckles) (techno music)

San Francisco it's the Red Hat summit 2018 brought to you by Red Hat okay welcome back everyone this is the cube live in San Francisco for Red Hat summit 2018 I'm John for the co-host of the cube and this week for three days of wall-to-wall coverage my co-host analyst is John Tory the co-founder of check reckoning and advisory and community development services firm industry legend formerly VMware's Bentley he was at the Q in 2010 our first ever cube nine years ago John Day one wrap up let's analyze what we heard and dissect and and put Red Hat into day one in the books but you know clearly it's a red-letter day for red hat so to speak your thoughts big day for open shift I think and hybrid cloud right we just saw a lot of signs here that we'll talk about that it's real there's real enterprises here real deployments in the cloud multi-cloud on-site hybrid cloud and i think there's really no doubt about that they really brought a brought the team out and you know red hat's become a bellwether relative to the tech industry because if you look at what they do there's so many irons on the fires but more the most important is that they have huge customer base in the enterprise which they've earned over a decades of work being the open source renegade to the open source darling and Tier one citizen they got a huge install basin they got to manage this so they can't just throw you know spaghetti at the wall they gotta have big solutions they're very technical company very humble but they do make some good tech bets absolutely we'll be talking with the folks from core OS tomorrow they have a couple of other action you know things we'll be talking about a lot of interesting partnerships the the most you know the thing here Linux is real and it's is the 20-year growth and that it's real in the enterprise and I mean the top line think the top line slowed and John is is is kubernetes than the gnu/linux for the cloud and I got to say there's some reality there yeah it's there's no doubt about it I mean then I've got my notes here just my summary for the day is on that point the new wave is here okay the glue layer that kubernetes and containers provide on top of say Linux in this case OpenShift a you know alternative past layer just a few years ago becomes the centerpiece of red hats you know architecture really providing some amazing benefits so I think what's clear is that this new shift this new wave is massive and we've heard on the cube multiple references to tcp/ip HTTP these are seminal moments where there's a massive inflection point where the games just radically changes for the better wealth creation happens startups boom new brands emerged that we've never heard of that just come out of the woodwork entrepreneurial activity hits an all-time high and they all these things are coming yeah I said John I was really impressed if we talk to a number of folks who are involved with technologies that some people might call legacy right we the Java programmers the IBM WebSphere folks they've been you you look at these technologies solid proven tested but yet still over here and adapted for today right and they talked about how they're fitting into openshift how they're fitting into modern application development and you're not leaving those people behind they're really here and you know the old joke going back to say Microsoft when Steve Ballmer was the CEO hell will freeze over when Linux isn't in in Microsoft ecosystem look today no further than what's going on in their developer Commerce called Microsoft build where Linux is the centerpiece of their open-source strategy and Microsoft has transformed themselves into a total open-source world so you know now you got Oracle with giving up Java II calling a Jakarta essentially bringing Java into an the Eclipse community huge move it's a kind of a nuance point but that's another signal of the shifts going on out in the open where communities aren't just yesterday's open source model a new generation of open source actors are coming in a new model I think the CNC F is showing it the Linux Foundation proves that you can have commercialization downstream with open source projects as that catalyst point as a big deal and I think that is happening at a new new level and it's super exciting to see yeah I mean open source is the new normal sure that that works it's in the enterprise but that doesn't mean that open source disappears it actually means that open source and communities and companies coming together to drive innovation actually gets more and more important I kind of thought well you know it's open source well everybody does open source but actually the the dynamics we're seeing of these both large companies partnering with small companies foundations like you talked about the Linux cutlasses various parts the Linux Foundation cloud boundary foundation etc right are really making a big impact well we had earlier on assistant general counsel David Levine and bringing about open source I think one key thing that's notable is this next generation of open source wave comes is the business model of open source and operationalizing it in not just server development lifecycle but in the business operation so for example spending resources on managing proprietary products with that have open source components separate from the community is a resource that you don't have to spend anymore if you just contribute everything to open source that energy can go away so I think open source projects and the product monetization component not new concepts is now highlighted as a bonafide competitive advantage across the company not just proven but like operationally sound legally verified certified and I think also you have to look at the distribution of open source versus the operation and management of open source we see a lot of management managed kubernetes coming out and in fact we didn't talk about today Microsoft big announcement here at the show Microsoft is on Azure is running a managed open ship not not kubernetes they already have kubernetes they're running a managed open ship another way of adding value to an open open source platforms to date directly to the IT operator honestly do you think these kind of deals would happen if you go back four years three years ago oh no way as you're running an open shift absolutely I mean were you crazy the you know the kingdom is turned upside down absolutely this is a notable point I want to get your reaction is because I see this absolutely as validation to the new wave being here with kubernetes containers as a de facto rallying point an inflection point big deals are happening IBM and Red Hat big deal we just talked about them with the players here two bellwether saying we're getting behind containers and two bays in a big way from that relationship essentially it changes the game literally overnight for IBM changes the game for Red Hat I think a little bit more for IBM than Red Hat already gets a ton of benefit but IBM instantly gets a cloud strategy that has a real scalable product market to it Arvind the the head of research laid that out and IBM now can go and compete with major players on deals with the private cloud more deals are coming absolutely this is the beginning now that everyone snapped into place is saying okay kubernetes and containers we now understand this the rallying cry a de facto standard I think a formation is going to happen in the next six to 12 months of major major major players now I mean we are in a not one size does not fit all world John so I mean we will continue to see healthy ecosystems I mean mesosphere and DT cos is still out there Dockers still out there right you will see very functional communities and and functioning application platforms and cloud platforms but you got to say the momentum is here I mean look at amine docker mace those fears look at when things like this happened this is my opinion so I'm just gonna say it out there when you have de facto standards that happen like this it's an opportunity to differentiate so I think what's gonna happen is docker meso sphere and others including the legacy guys like IBM and in others they have to differentiate their products they have to compete software companies so I think docker I think is come tonight at docker con but my opinion looking at from the outside is I think Dockers realized looking we can't make money from containers kubernetes is happening we're a great standard in that let's be a software company let's differentiate around kubernetes so this is just more pressure or more call-to-action to deliver good software hey it's never been of somebody said it's never been a better time to be an IT and IT infrastructure right this is a you think that the tools we have available to us super-powerful another key point I want to get your reaction on with kubernetes and containers this kind of de facto standardization is breathing new life into good initiatives and legacy projects so you think about OpenStack okay OpenStack gets a nice segmented approach is now clear with a where the swim lanes are you're an app developer you go over here and if you are a network and infrastructure guy you're going here but middleware a from talk to the Red Hat guys here we talk to IBM those legacy and apps can put a container around it and don't have to be thrown away and take their natural course now I think it's gonna be a three line through this holy a second life is for legacy and stuff and then to cloud is and it's in second inning because now you have the enablement for cloud your reaction the enablement of cloud Ibn iBM has cloud and then the market shares of nm who you believe they're not in that they're in the top three but they're not double digits according to synergy research and he bought us a little bit higher but still if you compare public cloud they're small they look at IBM's and tire and small base and saying if they have a specialty cloud that can be assembled quit Nellie yeah and scaled and maybe instantly successfully overnight yeah I think a few years ago you know there was a lot different always a few years back it always looks confusing right a few years back we were still arguing public cloud private cloud as private cloud ed is what is a true private cloud is that even valuable I still see people on Twitter making fun of everything anybody who's not 100% into the full public cloud which means they must not have talked to you know a lot of IT folks who have to business to run today so I think you're saying it's a it's a it's a multivalent world multi-cloud there's going to be differentiated clouds there's going to be operational clouds there's gonna be financial clouds and just it's it seems clear that you know from the perspective of right now here in San Francisco and 2018 that that you know the purpose of public-private hybrid seems pretty clear just like the purpose of like I said we're gonna in two weeks we'll be an openstack summit I mean the purpose of that seems pretty clear it's it's funny it's like I had this argument and each Assateague he thinks everything should go the public cloud goes eaten has one of the public clouds but he's kind of right and I and I and we talked about this way I with him I said if everything is running cloud operation we're talking about cloud ops we're talking about how its managed how its deployed code bases across the board if everything is clarified from an OP raishin standpoint the Dearing on Prem and cloud and IOT edge is there's no difference stuffs moving around so you almost treats a data center as an edge network so now it's sexually all cloud in my mind so then and also you do have to keep in mind time time horizons right anybody who has to do work the today this quarter right has to keep in mind what's what what portfolio of business deeds and tools do I have right now versus what it's gonna look like in a few years all right so I want to get your thoughts on your walk away from today I'll start my walk away from day one was talking some of the practitioners Macquarie Bank and Amadeus to me they're a tell signed the canary in the coalmine what's happening horizontally scalable synchronous infrastructure the new model is here now we're seeing them saying things like it's a streaming world not just Kafka for streaming data streaming services levels of granularity that at workers traded with containers and kubernetes up and down the stack to me architects who think that way will have a preferred advantage over everybody else that to me was like okay we're seeing it play out I guess I totally agree right the future isn't evenly distributed my takeaway though is there's certainly a future here and the people we talked to today are doing real-world enterprise scale multi-cloud micro services and modern architectures incorporating their legacy applications and components and that and they're just doing it and they're not even breaking a sweat so I think IT has really changed ok day one coverage continues day two tomorrow we have three days of wall-to-wall coverage day two and then finally day three Thursday here in San Francisco this is the cubes live coverage go to the cube dotnet to check out all the videos they're gonna be going up as soon as they are done live here and check out all the cube alumni and check out Silicon angle comm for all news coverage then of course you got tech reckoning Jon's company's the co-founder of for John Fourier and John Shroyer that's day one in the books thanks for watching see you tomorrow

>> Announcer: Live from Las Vegas it's The Cube covering HPE Discover 2017 brought to you by Hewlett Packard Enterprise. (electronic music) >> Welcome back everyone, we're live here in Las Vegas for HPE, Hewlett Packard Enterprise, Discover 2017 SiliconAngle Media's program The Cube where we go out to the events and extract the signal from the noise. I'm John Furrier, my co-host Dave Vellante, my Co-CEO and Co-Founder SiliconAngle Media which is part of siliconangle.com, The Cube, SiliconAngle.tv, thecube.net, and wikibon.com. Go to wikibon.com and seek out all the great research, and a lot of the stuff they're talking about here at HPE Discover has a lot to do with what's happening at Wikibon and around big data and IoT. Dave, summary of day one wrap-up, kind of our take if you will on HPE's messaging, what they're showing and the debate. We were at Dell EMC World. We heard Michael Dell and his team say bigger is better. HP is saying agile, nimble, but they've got a confederation, federation, all these little kind of HP companies. It's still a conglomerate. It's not small, as you said in our opening. Meg's keynote today was all about the future of computing in a new way, if you will, data, IoT center of it. Your thoughts and analysis of day one keynote, our guests, your thoughts. >> John, I opened up this morning's segment saying that five years ago we talked on The Cube about, and I made the statement, HP's got to shrink to grow. The other thing I said about HP, now HPE, was it's got to get back to its roots of invent, and it has not gotten back to those roots, and now it is reinventing itself, and it's opportunity to get back to its roots of invention is through a partner ecosystem. That's very clear, kind of point number one. The second point I want to make is that these transformations that HPE and companies have gone through, I mean I've never seen anything this large, splitting a company up of 100 billion dollar company, changing all the IT systems, doing all these spin merges, these are not trivial exercises. So when Meg says we're sort of at the end of that transformation, that five year process, in many respects they've now got to create a new transformation. They finally got this, they have this smaller company that's more focused, and they've really got to still sharpen the edges on that sword in my opinion. The software business is still part of HPE, so that's got to happen. The cash coming in from the CSC spin-merge still has to come in, so the balance sheet is still being restructured. But essentially the message that you're hearing from HP is we're going to help you keep the lights on. We're going to make hybrid IT simple which is a good sort of tagline, but it's a very, again, nontrivial thing to do. We've got this new partner ethos, and we've got this fourth piece which is a moonshot on IoT, and that's our big growth opportunity, and we're going to put all our muscle behind that. I like the strategy. I mean if you're going to go smaller and more focused, you've got to have some kind of moonshot like that. You've got to have a partner ecosystem as they've described, but as I say, there's still some more work to be done. They're still shaking off the embers of the exit of the cloud business, trying to reshape that whole thing, so there's, as I say, more work to be done. >> You know it's interesting, good points, I agree 100%. I would add that my observation and what I came into HPE looking at was what will leadership, and specifically Meg Whitman and Antonio Neri, mainly Meg Whitman, and the team articulate to the customers, because they've been getting pounded in the press on financial performance, the journey. I mean if I'm Meg Whitman, I got to be saying hey, enough with the backbiting on, the five-year journey and trying to peg me to a milestone, because the market's changing. You go back five years and say oh, it's going to be a five year journey, let's say Meg Whitman says that. What that really means is that's just kind of an estimate, based on her opinion execute but what I think, well, she mighta seen but what happened was: the cloud just came in and completely decimated the landscape relative to disruption opportunity so a five-year journey, pegged at that time, becomes essentially maybe longer. And so they're executing a turbulent marketplace that's good for them but it could be wind at their back too. So I think they had to come out and talk to their customers. The customers need to hear from HP, and saying, "Look, we got your back. "We're going to be delivering. "We understand the transformation. "We understand what's going on." They've been in the IT consumption business, serving customers in IT. They're a big company. They got to calm the customers down and give them confidence. So to me, I saw confidence in the simplicity message, hybrid IT message, and the IoT with the headroom. I didn't see any game-changing, futuristic, vapor. I didn't see a lot of AI washing, I didn't see a lot of machine learning, which is, I think we're seeing the trend. But they didn't lead with that. They led with the meat and potatoes of HP: Storage, talking about the acquisitions: Simplicity.. >> Dave: Services.. >> Nimble, the messaging with partners, I thought that's very much a meat-and-potatoes, it wasn't like a lights-out keynote by Meg Whitman in the sense of standing ovation on, yeah rah-rah. But it was meat-and-potatoes, aggressive, assertive, "we're here for the long haul" and I thought that was positive. >> I think the partner-friendly ethos is really, really important, and you see it around the show, I mean look at, Veeam is a Platinum Sponsor, right? That never would've happened two years ago because of HP Protector, HP's backup software. Never would've happened before. You see Fortunet out in the show, basically a competitor with HP, HP's security business. And then this whole new partnership around the large SI's, right, I mean that's a big deal. You were saying "India, SI's." The CEO of Wipro, standing up today, I thought he was one of the more impressive parts of the keynote. So, a much more aggressive posture with partnerships, a much cleaner story for partners. Yesterday, the partner conference got pretty high marks. People, I think, are fairly excited about that, because HP has got enough muscle to put resources in, and John you know. What's your take on the whole channel and partnership thing? I mean, you lived that for a decade. >> Well, I mean, I think the channel thing is a great opportunity for them. It's about making money together and I think that's going to be a key thing. My thoughts, just from trying to read the tea leaves, and I'm going to put this out there, it's, I would say, not half-baked but my observation from today, and in the interviews, things came together for me around something that I was thinking about but I could see it now with a little bit of a clarity, and that is I think we're going to see a hardware renaissance. And what I mean by that is, I think the message of computing is changing. We've been predicting, with Open Compute, that we've been covering, which is an open source project, where Facebook and now others are donating reference and imitations after which, Antonio Neri was supporting that project. It's not a lot of funding, there's a lot of open source projects going on. There's a lot of disruption happening. It's almost just like, small little, not real well-reported marketplace. Not a lot of money's being made yet, cuz there's some new things happening. I think, what's clear to me today is that a new business model of hardware is coming. And I think HP, if smart, could change their business model. Instead of being a hardware box supplier, which they know is a declining market, to a TAM, a Total Addressable Market, true private cloud, of $260 billion, and be a supplier of hardware business model, rather than hardware product, where they bring their systems expertise in, use open source, bring the stuff out of HP Labs, and not try to be hardcore about productising it in a hardcore way, meaning another SKU. I think they got to have some core products, but the growth, I think's going to come from a hardware renaissance, where a new developer's going to come out of hardware, you're going to start to see hardware being in the game. Just last week at the Recode Conference, you had Steve Ballmer with Kara Swisher, saying "We should have got in the hardware business a long time ago. Everyone's making their own phones," in reference to the consumer market. So, I think the enterprise market, you're going to see real opportunity around service providers and enterprises, essentially getting the best of what Amazon and Google does, which is build their own boxes, in a new hardware development way. That, to me, is absolutely clear and I think that's going to open up, essentially, that long tail of compute. Cloud-like, true private cloud, and hybrid. And I think if HP's smart, they should jump on that and double down on that trend. >> So, the things I'm looking for between, say now and the next Discover in Madrid in December. The post-spin-merge balance sheet. Let's take a look at that, 'cause I think it's going to look a lot better. And that's going to cause people to go "Whoa, look at that, now HP's got even more leverage "to go out and do deals." The second is, when does IoT actually become a meaningful and measurable component of HPE's business? Talking a lot about it, building up the ecosystem, talking about some use cases, a lot of blue-sky types of things, but not a lot of hardcore, concrete examples at the customer level. So when does that become a meaningful revenue generator? And then, I think from credibility's standpoint, margins. Meg said, "This is it, margins have bottomed. "They're going to bounce off the bottom "and grow from here." We've got to see that, and I think the keys are services, really executing on the services side, leveraging their acquisitions, let's see what they can do with, I mean Aruba looks good, Nimble, SimpliVity. Can they turn those into billion dollar businesses like they did with 3Par? And then the partnerships, I don't expect any head-fakes, you remember HP used to always head-fake the channel and head-fake the partnerships. I don't expect that now. >> They've never had fake partners. Partners would call them out on the carpet on that. I think they have been groping with the partners, and hoping to have a flagship. >> Dave: I dunno, I mean.. >> I don't think they've, now you're trying to be critical of HP, but they've never had fake partners. >> When they, say head-fake. They would buy a company like EDS, and their partners Ecosystem would go "Whoa, wait a minute, I'm not sure "I want to partner with these guys." >> I'd debate that with you, but I think HP's always had great partnerships. I think where they've misfired, if you want to be critical, is that they mismatched where the growth was, with throwing an outsource for instance, that's a complete mismatch to where the growth is. Now, to your point about IoT, I think that's their big opportunity because IoT is a beachhead setup. I think it's a great opportunity as a flagship message to take the portfolio of HP into a partner-friendly world that's going beyond swim lanes, this is like the Grand Canyon, the Panama Canal. And none of them more than swim lanes. So I think having the portfolio with more M&A activity, with Aruba and some of the hardware they have, they can go in and get the beachhead in IoT and use that as a driver, a flagship with their partnerships to start engaging customers and holding the ground. And then, moving the services in, that could hold them for a good couple years. And then, as the margins shift from the declining hardware business, I think that's an opportunity, and we're going to look at that. >> And the other big opportunity, beyond IoT, is this intercloud management. Will HP participate in earnest in building up some software capabilities to manage cross-cloud? On-prem, off-prem, everything in between, Sass, et cetera. You don't hear anything about that now. So is that part of the HPE strategy? Will it use its new balance sheet to go after some of those emerging software companies, and rebuild its software business? >> Well, we always will analyze. We've got all day tomorrow. We've got some great guests. But Dave, Information Technology, known as IT, is not going away. It's changing, certainly, for sure. Information and technology's really going to be a great opportunity for HP. If they stick in their old ways, they'll be dead. If they can transform over themselves, I think it's a winner. Of course we've got live coverage, three days, tomorrow and Thursday This is theCUBE. Go to SiliconAngle.com, check out all the latest reporting and journalism. Go to Wikibon.com for all the great research. The best research is behind a subscription. You got to pay for that, I would definitely do that. The true private cloud report you guys did, I thought was killer, really that's groundbreaking, and IoT stuff's fantastic. Of course, go to SiliconAngle.tv to check out all the great stuff. And of course, go to CrowdChat.net, and we have a new CUBE 365 product coming out of the oven from SiliconAngle labs, lot of great stuff. Stay with us for more coverage tomorrow and check out YouTube.com/SiliconAngle for all the videos in replay. We'll be back tomorrow, stay with us. Have a great day. (electronic music)

>> Announcer: Live from San Francisco, it's theCUBE, covering DevNet Create 2017, brought to you by Cisco. >> Okay, welcome back, everyone. We're here live in San Francisco for theCUBE's exclusive coverage of Cisco's new inaugural event called DevNet Create, an extension, an augmentation, a community-focused event of their DevNet community, which is a Cisco developer community, now out in the wild. Our next guest is Steven Pousty, lead developer and evangelist at Red Hat, I'm John Furrier, and my co-host Peter Burris. Steven, welcome to theCUBE. >> Thank you, thank you very much. It's exciting to be here. >> Great to have you on. We were just talking before on camera, getting all animated like, "Hey, turn the cameras on. "We got to get this conversation." We're talking about open source and really looking at some of the trends, but more importantly, the impact. >> Steven: Right. >> Also, we've had you guys on many times on theCUBE. We covered Red Hat Summit, Jim Whitehurst. So, abstractions layers in software, open source ecosystems, you have a background in nature. >> Steven: Yeah. I- >> And ecosystems, literally. >> Steven: Yeah. Yeah, yeah. Yeah, actually I have my PhD in ecology. I'm actually a conservation biologist by training, but IT and computer programming pays the bills a lot better than-- >> Hey, anthropologists and ecologists do very well in the tech world, believe it or not. >> Steven: Yeah, I love big data. >> Peter: And philosophers. >> Yeah, and philosophers. Yeah, with all that logic and the ontologies and all that. >> Ontologies and symbiotics. >> Steven: Yep, yep. >> John: Okay, so I got to ask you, obviously Red Hat has been really the poster child for open source companies going public. We've heard since over the past generation, "The Red Hat of blank, The Red Hat of," and that got played. Certainly we downplayed that. People were trying to call Cloudera the Red Hat of Hadoop (mumbles) realizing that that's never going to happen. You were a once in a generational company, but Red Hat was a tier two company back in those days. Now, open source is certainly tier one software across the board, and I think this event at Cisco kind of amplifies that. Look at it, open source has gone a whole nother generation. A lot of young kids coming in. It's tier one software. The business model is open source. Four new companies just went public recently. So, done deal. >> Right, I mean, I think if you look in the technology ecosystem as a whole, if you don't start with open source you either have some incredibly magic sauce that no one else has or you're done. You couldn't even look at the movies... The arch enemy when I was growing up in software was Microsoft of open source, right? If you look at them now with Satya, they've made great strides to be part of the open source ecosystem at a real level, not like just lip service like they used to do sometimes. Like when I interact with some of our Microsoft partners, you can tell that there's a different change and they really believe in that open source-- >> Microsoft used to be known as lip service and vaporware and they used to kind of freeze the market with their monopoly power as some would say, but more recently they've... Back in the old days, Linux was a cancer. Steve Ballmer said, "Linux is the cancer to the industry." >> Steven: And so-- >> John: Now they're doing Linux with .NET. >> And so at the Red Hat Summit just recently I did the Microsoft keynote, I was the Red Hat person on the Microsoft keynote, and we demonstrated .NET Core running in OpenShift on Linux machines, we demonstrated SQL Server running in containers on OpenShift, and then for the end we showed some of the community work, because both of us are involved in Kubernetes. We actually showed a Windows container spinning up IIS being orchestrated from a Linux OpenShift. So, it was actually the Linux server, the Linux OpenShift server, was talking to Windows containers and spinning up Windows containers on the fly. So, I never thought that would've happened. So, it's definitely a sea change. >> And boy was that partly the sea change, we can encapsulate it, is that we used to think in terms of winners and losers in the tech industry, and now it's big winners and less big winners, but the question is how is, I think the realization Microsoft had, is that open source does not demarcate winners from losers. It demarcates, or rather suggests, a new way of thinking about how software gets developed, how software gets integrated and packaged, and ultimately how software gets diffused. So, talk a little bit about this notion of the new world of winners and winners and how this thing moves together, almost in an ecosystem type of way, so that the capabilities overall improve over time, because that's really where we're going is digital business being able to do more for customers. >> Right, and I think that's one of the things that you're seeing coming out from the open source world now is it's becoming less and less about I have this technology versus this is the technology, this open source technology, that we use to help solve your business problems. I gave a talk about this a couple times. There's a concept in ecology called, now I'm blocking on the word, but you probably came across it in school, probably even elementary school. It's the idea that you have bare earth, and then a few plants show up and they start breaking it up, and those plants create a condition where new trees come in, and then it just keeps going and going and going, and then you finally have a rainforest at the end, right? >> Peter: Diversity? >> No, it's-- >> Anyway, we don't want to put you out. >> Yeah, I'm stuck on the word and I can't remember-- >> Here's an ecology question. I saw a Facebook thing where in Yellowstone National Park they introduced four wolves to the ecosystem, and all of a sudden the rivers are no longer wide, they're tighter, there's pools. So four wolves create dynamics. So there's a coexistence, but there's still wolves. >> Right, and so the-- >> John: Who's the wolves in the industry? >> See, that's the thing, it's not that. Just because there are wolves in the industry doesn't mean that they control the entire ecosystem. So I think what I say at the end of this talk is there is no right or wrong about where you are in the ecosystem or in your evolution as an ecosystem, right? There is what is right for your business problem. So, we have this in our, especially in the United States, we have this idea of you're either the winner in this space, you're the cloud solution and you're the winner, or you're not, you're nothing. It's like the Talladega Nights, "If you're not first, you're last!" >> He runs around in his underwear. That's your outcome if you have that strategy. >> Great strategy. >> It was such a good movie. But so the point that I was trying to make in this talk is there's lots of different... So like with bird species, when they need to share a tree, there can be six different species all in the same tree, and what they do is what's called niche differentiation. That means, "Oh, I'm going to specialize "in the tops of the trees "and I'm going to only eat this type of caterpillar." And the one on the bottom says, "I specialize on beetles and I do this." And I think what you're seeing with the open source stuff is all these things can coexist. Like GNOME versus KDE. Everybody was claiming GNOME or KDE was the winner for forever. They're still around for forever. So, what I think with this cloud software as well where everybody is like, "Oh, this is the one winning," or this is the, there's a whole host of places for them all to live, and with open source I think things just live forever. >> John: What's your ecosystem analogy that coexistence is actually a better philosophy looking at the big picture than some dominant wolf or whatever. >> That's right, it's the diversity, it's the mutualism, it's the coevolution, it's the right diversity. Like a desert is actually a beautiful place if you go to it. Like we like to pick on the desert, but if you actually spend time in the desert it's gorgeous. There's nothing wrong with the desert. So, if you're some company who doesn't need Kubernetes and all the other pieces in this huge cloud environment, don't feel like that's something you have to take on. >> Peter: But they are the desert. >> That's right, but they are the desert. But, all my PhD research was in the desert, and I used to hate it, because I started this little rolly polly in the desert, and by the time I left I was like, "Oh, I miss the desert when I don't have it." >> John: The sunrises are beautiful. >> Sunrises are beautiful. You can see forever. If you actually pay attention to the small things... All I'm trying to point out is people live in Kansas, people live in New York, people live all over, and they usually find where they live, unless it's some disgusting dump, they say this is a beautiful-- >> Peter: They find beauty in it. >> Yeah, and I think it shouldn't necessarily be everybody has to get to the same place and use all the same technology. There's technology reasons for everything. >> So, I want to pick up on that concept. So the industry used to be pretty much structured around asset specificity. This asset does this for you. As we move more to a software orientation that notion of asset specificity starts to blend away. I think that's one of the seminal features of digital business and digital business transformation is the reduction of asset specificity, but it does mean that increasingly we need to focus on what I'll call value specificity, that we're moving away from the asset being the dominant determinant of structure and how you do things to the value that's being generated and the value that's being presented in any number of different fashions, and that becomes what dictates or describes who you are, what you do, both as an individual, also as a company, as well as a piece of software data. So talk a bit about kind of this notion of niche specialization being more tied to the value that you create as opposed to the asset that you bring. >> That's right, and we're seeing this a lot with our customers, who... You know, OpenShift is based off of Kubernetes and Docker and all that stuff, and containers, and so what we're seeing is a lot of companies come to us and say, "Well, I want to use OpenShift for this. "I want to use OpenShift for that." It's no more that we go to customers and say, "Here's OpenShift and you will use it "for purposes X, Y, and Z." What it is is well, that IT group might say well I've got three different business groups that I have to produce stuff for them that they can use. And they'll say, "Can I use Kubernetes for this? "Can I use, oh, I can't? "Well, then I'll get something else for this, or can we adapt-- >> Or complement it. >> Yeah, it's about creating value for the business unit, and it's becoming more and more that now. I think it's an evolution that we've seen, again, this evolution of stuff with the shadow IT and all that stuff. It became less about you're some sort of specialized high priest with this special asset that only you know how to control, I know how to do GIS software, I know how to do big data, no, what value do you produce for me? I don't care that you can buy these kinds of servers and provision them. If I can't use them, what does that do for me, right? So I think we see that at Red Hat a lot where we were the enterprise Linux company, and I think our leaders have done a really good job of saying, "Yeah, that's a good place "where the puck is right now, "but that's not where the puck is staying. "It's moving towards value, "it's moving towards integrated solutions." Go ahead. >> Let me extend this a little bit. So one of the things that we've observed within (mumbles) SiliconAngle, and we've talked to some other people today specifically about this, was the idea that open source has done a really good job of looking at a thing, a convention, that's well defined and well established and then building an open source variant of it. Open source has not been as successful, for example, in the big data world, where the use case or the definition of where we're going is amorphous. Instead, a lot of open source development ends up looking at each other saying, "Well, I'll fix your problem and you'll fix my problem, kind of. Nothing wrong with that, but the vision of where the industry is going to go. How are different companies, what will be open source leadership at redefining where this industry goes so that the open source developers can both be free to do what they need to do, create value as they need to, but at the same time, share a common understanding of where this ends up? >> So I think this goes back to what you were talking about with value, right? So I think what ends up... I'll use the example of big data. So I did a lot of statistical analysis for my PhD, and back then you used SAS or S-PLUS, both proprietary solutions. I think what has caused some of the explosion in big data is that you had these data scientists, the statisticians, intermingling, fertilizing with the computer science people who were handling these other really big problems. So what comes out of that, this is that margin thing again, right? You have statistics and-- >> Peter: Diversity and interesting things happen in the margin. >> At the margin. So what you have is these two groups come together, and suddenly you have the computer science people saying, "Oh, well I know a lot about algorithms "and I'm going to help you figure out "how to get value of what... "You're trying to solve this statistical algorithm, "I'm going to help you build distributed software that does that and that's where we get that happening. >> So the collaboration at the edge, the fringe, the lunatic fringe, or whatever you want to call it, the margin, is where the innovation is. >> I think that's where the innovation is because that helps avoid the navel gazing, right? Like, "Oh, I'm looking at what you exactly built, "and I'm going to build a slight variation on it." Well no, I actually need some, when you bring other disciplines in they say, "Well, this is the problem I'm going to solve," and the computer science person or the other side will say, "Well, that sounds "kind of like this thing, but let's try," and then suddenly new ideas come up and new ways to handle things. So I think, again, switching to value rather than what technology am I going to build is what's going to actually drive like, we need something to handle our big data. That's what's going to drive the vision. So you see in the big data world you see Spark, you see Zeppelin, you see all these different things competing, but what they're all doing is trying to drive how do I analyze big data efficiently? So you get some competing solutions. Then over time I think that's the vision that they're driving. >> I got to ask you, so like naval gazers is one dimension, but also there's the rearranging the deck chairs, like someone says, "Let's move things around "and magic will happen." Well you're pushing a whole nother concept, which I think is legit, which is as you put people together it might be uncomfortable, but then innovation can come out of it. Okay, so here's the ways. Computer and science and cloud computing, all that great stuff is happening, compute, storage, algorithm, etc., data, now society. So now society has issues, because what's the societal impact? These are first generation problems that we're facing, which side of the street does the cards drive on? Who gets hit first? They have to make these decisions. You see all these new issues, from even younger kids, cyber bullying, online behavior, across the board, societal impact. We are those margins. >> So I think for me tools... I thought about this a lot, right, because in the college I was kind of a tools person, and I think tools are value neutral. Any tool can be used for good or for bad. So, what we're doing right now in the open source world is develop, and in IT in general, is developing new tools, and what usually ends up happening is society develops norms after the tools have been created. In some ways, I think... I some ways, I kind of... It's a hard one. This is a much longer discussion and probably would involve some sort of alcoholic liquid or something to draw it out. >> It's a double edged sword, or tool, depending on how you look at it. We got to see it first before you can problem solve it. >> But the problem is-- >> You can't problem solve vapor. >> That's right, but on the other hand, sometimes you can see if you stopped and aren't so enamored with the latest and greatest tool without thinking about like, "Oh, well what are actually the implications of it?" I was going to say, I think the Europeans do a little bit of a better job of putting a little bit of foresight into tools when they come out saying, "Hold on, let's take a look at this." >> John: At the impact? >> Yeah, at the impact. >> So let me add one more thing to the conversation, because I think you're spot on, that the tools may be value neutral, but the impact, the transaction cost, of doing certain types of work in a different ways, and some work, and work is not necessarily value neutral. We may look at some tools and say, "That work is not good. "This tool reduces the transaction cost "of performing that work faster "or more completely than that work, "so that tool is going to have a less positive impact--" >> Impact on society as a whole >> "Than some other tool." And I think we can start introducing that kind of an analysis into it. >> I think so. I think that was... I live in this area, like I'm in Santa Cruz, so when I want to I say I'm not in the Valley, but when I want to I say I am in the Valley, I think the Valley is particularly enamored with the toys, or the tools, that it produces, and how technology will solve all our problems, and technology is great, and it is inherently good, and I like to say, "No, it's a tool, "and so a tool could be used for good or for bad." Like one example is ride sharing. Everybody was like, "Oh, this is the best! "This is awesome!" One of the things I thought of, my father is an immigrant, so I'm first generation on my father's side, and he wasn't a taxi driver, but I know how hard it is for first generation immigrants if you don't speak the language really well. So what used to happen with those ride shares is you had to have the capital to acquire a car before you could actually do ride sharing. So what you were basically doing was disenfranchising people who didn't have the capital from actually having this as a source of income when they came to the country. So, I was very conflicted about it to start with. Now, I'm less conflicted. I actually don't think ride share, given the economics I've seen actually play out I actually think ride sharing is not as big of a market and as game changing as everybody was making it. It was just some funny economics. >> Well Steven, certainly the conversation is very awesome. We should have you at the studio in Palo Alto next time you're in the Valley. >> Sounds great. >> You have plenty of tools and shiny new toys. >> Go by the Baylands and then go birding together at the Baylands, or maybe some fishing. >> Let's bring theCube over to Santa Cruz for a couple days. >> We should go down. >> That's great. >> Chill in Santa Cruz. Surf those waves, cloud, data, society. >> There you go. >> theCube on the boardwalk. >> Final question for you. Cisco is trying to push the margin with this event. It's a new event. It's an extension. It's outside their comfort zone. They had some projects that were kind of dismissed, interclouding, other things, this is a statement. Your thoughts on this show, because they have DevNet, why DevNet Create? Your thoughts. >> I think DevNet Create is a great opportunity for Cisco. I've been to the Cisco, is it Cisco Live, the huge gazillion people event? And there's a lot of energy around that, but that's mostly like network engineers and people who were bread and butter Cisco people. I really like that Cisco, that blurring between software and hardware means that Cisco really should be pushing people more in the, "We're going to help you create really interesting solutions." The more they make that easy for the developers... I think some developers are hardware hackers and love it. I am not one of those, and there's a lot of us who are not, and the more you make it easy for me to use software to create really interesting hardware things, the better it is for us. >> It's a classic case, the data scientists meets the algorithm guy. >> Steven: Exactly. >> So they're trying to bring these margins together where it might be awkward at first, but magic can happen. >> If I got to sit with some hardware people and like, "You need to make it so that I can write in Python "and do a whole bunch of neat networking and stuff "so at my house I can keep track "of how many birds are coming to my bird feeder "because I want to do this really cool experiment, "make that easy for me." >> By the way, you got camera, so you got bird recognition software. >> Steven: Exactly, exactly. >> A new feature on AWS. >> Yeah, I've seen demos of that. It's incredible what they can actually pull out now. >> Steven Pousty, Lead Developer at Red Hat, thanks for coming on theCube. Great conversation. >> Thank you very much. >> We'll have to continue it in Palo Alto. More live coverage here at Cisco Systems' DevNet Create. It's their inaugural event for developers. It's where IoT and app developers meet infrastructure, application infrastructure (mumbles). I'm John Furrier, Peter Burris with theCube. We'll be right back. Stay with us. (techno music) >> Hi, I'm April Mitchell, and I'm the Senior Director of Strategy & Planning for Cisco DevNet.