>> Live from Washington D.C., it's the CUBE covering dot next conference. Brought to you by Nutanix. >> Welcome back to Nutanix.next everybody. This is Dave Villante with Stu and this is the CUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise. Alan Cohen is here, he's the chief commercial officer of hot startup Illumio. Alan, friend of the CUBE, great to see you again. Always happy to be here. Wherever you guys are, I'm going to show up. >> It's nice not to be in Silicon Valley for a change, hanging out with the CUBE. >> Right, the real world, you'll have to talk to John Courier that things happen outside of Palo Alto. >> So the timing of this interview is perfect because we just had Stephen Hadley on, who's sort of a public policy expert. We were talking about basically how industry should really lead with this whole new era of cyber and he was talking about if we let government do it, they're probably going to mess it up. >> Right. >> So it's guys like yourselves and others in our industry that really have to lead, so, but before we do that, give us the update on Illumio. You guys did another big raise, you guys are smokin' hot, growing like crazy, what's the update? >> So I mean so since we spoke to you guys last we did have a little funding round. It was led by J.P. Morgan Chase. You might have heard of them, they have credit cards and branches and things like that. Actually, they're also a customer of Illumio's. Which is a really big deal. They are advanced, so we're growing very rapidly, lot of geographic expansion, lot of technology expansion and I think actually today and this morning Sineal and the technology roadmap talked about micro segmentation, the ability to create really smaller and smarter water tight compartments around your data, down even to the workload or the process level is just going to be a way that people are going to have to do their computing. And so as you look at the journey now from data center or enterprise cloud into public cloud, this approach to security that we're building is a key component allowing people to take advantage of cloud architectures. So that's also really led to our growth. >> So I think it's fair to say you guys are really the pioneer of this concept of micro segmentation. Others have sort of hopped on board. >> Well I got to give Vmware credit, they actually did break- >> They were first. >> Yeah, but they- >> To commercialize it. >> Yeah, they commercialized it in their environment, I would say Illumio is the first company through software to commercialize it in all environments. In a cloud, in a box, with a fox, in a house, with a mouse, bare metal virtual machines, containers, Amazon, Azure, Oracle, across all of those environments simultaneously. And I think we were talking earlier this morning about the idea of multi-cloud, right? So you're going to pick your cloud based on where the workload and the applications should live. So your security has to move with that. And that's really what we've focused on. >> Right, okay, so VMware's there, you know Cisco's in there as well, so- >> Yeah, I've heard of those guys. >> Duking it out, so how do you feel about our competitive position, talk about about that a little bit. >> Well, we feel good that our competitors have finally kind of woken up and started to amplify our message. About this, you know, at the end of the day, you have to make a decision whether your goal in building security is to drive the sale of your infrastructure, or is to make your customer's environment more secure wherever they run. So in their own environments they're clearly adding value. But at the end of the day they're dependent on maintaining server licenses or upgrading your switches. That's not a really good motivation for how to make your security decision. You should make your security decision based on what you're trying to do, not what infrastructure you're in. >> Okay, so, now what about the traditional security guys? Are they catching up, are they hopping on board, do they just think this is an itch that's not worth it, or they just missed the boat? >> Well, you know, with the I'm being respectful and aggressive at the same time, I think most of the firewall vendors have been primarily focused on the perimeter, and then they've looked at APT technologies, things like fire I have done and they've made a lot of their investments there, so they have not been as focused. Now, to also be fair, in the heart of the data center in the public cloud, you don't see firewall technology. Right? So people said I have this hard crunchy exterior, I protect the perimeter of my environment, and I assume once I protect the perimeter the inside is safe. So their traditional model didn't lend itself to that kind of introspection and focus on the interior. What's happened in the last couple of years, though, and you had Hadley on, is that the focus of cyber has shifted to the interior, right? So, Target, Sony, OPM, all the big breaches started with basically vulnerabilities on the inside that have then kind of spread and then ex-filtrated outside of the organization. So we started focusing on the inside out, not the outside in, I mean to say I think ultimately the large security venues and perimeters, they're partners of ours, because they're going to wind up working both sides of the equation. >> Yeah, because even an air gap doesn't protect you. >> You don't want an air gap, actually, you know, we have a partnership with F-five, we actually talked about it with the CUBE couple years ago, because you think about the consequence of something like a load balancer, it sits between tiers of applications, you don't want that to be a black box. So the basically the world is moving into the zero trust model, so trust nothing. And you know it's kind of like running it you know like in a mob, it's like the Sopranos, you've got to make sure everybody does the collections and everybody's got to check in everyday, everything's got to be part of the security fabric. >> Alan, so, bringing it back to the Nutanix discussion. We had Sue Neil on earlier in the keynote this morning I saw broad ecosystem, love our partners, saw Illumio, >> Huge logo, wasn't that great? They got me. >> Great glow man, they finally figured it out. >> Release the Krakken, yeah, you know what, up there. And I asked Neil, how do you balance the we're going to have broad ecosystem but seems a lot of that energy is being put into AHV. And one of the examples he brought up was like oh, if you buy, if you use AHV, you get micro segmentation for free included in there. What are you seeing, how does Nutanix fit into micro segmentation environment? >> Yeah, I mean I showed her the slides too, right, so? If you remember how he defined it, if I have ten workloads, and I want to segment them off, I will put it in what I call micro segmentation. And that to me is like a virtual network segment, but he said you don't have to use an FCN overlay, and that is not any different than what a security group does in Amazon or Azure and I assume Google has its own version of that. When you go into that couple of levels deeper, that's where Illumio lives. So we live inside public cloud security groups today and across them and to non-environment. So you got to remember a lot of people are going to have Nutanix workloads, but then they're going to have workloads sitting in Azure and they're not going to have anything to do with each other for awhile from a software point of view. So illumio is really that bridge. So I mean I think it's actually a fairly synergystic kind of relationship to do that. Actually for me, that recognition, and that communication and micro segmentation into their base, is really good. So, you're always going to have a little bit of overlap. I mean they're smart and they really build great software. >> So it sounds like you're saying the definitions of micro segmentation are a little bit complementary and you're also going to help with that heterogeneous mess that everybody has and gives them consistent security across those environments. >> Right, we don't define micro segmentation that way. I might want to say I want to micro segment off one workload or I want to segment processes or I'm going to have a Kubernetes application running someplace and then I'm going to have the core database someplace else. How do I move across that? >> So it's granularity and flexibility of the use case that you provide. >> Yeah, we have this thing we call the wheel of cheese, from the segmentation. So there's like rough front use segmentation, and then there's micro and then there's nano, so over time, people are going to basically close the gates tighter and tighter. Because the challenge in cyber is lateral spread. Like you guys you have these fast high speed networks. So if I compromise one server, one workload, today it flies through the environment, so you actually have to keep closing those doors from a security point of view. So, I mean I think it was a great first move for them. And I mean, we like it, it works really well. We work with other vendors, cloud vendors, today that do some form of segmentation. >> So I know we're super tight on time, everybody wants to talk security, and your schedule's packed John Furry is watching, no surprise. >> Oh, hey John. >> So when he has to give up the mic there's always crowd chat, so he's got a question on crowd share for you. Ask Alan about the economics of the cyber security business models with all this stuff going on with cyber war and ransom ware and- >> Yes, so here are some stats. You guys are great analysts you focus on this. So cyber security is about a hundred billion dollar business somewhere between 80 and 100, depending on who's counting on that. But think about the scheme of overall IT. How much is IT? Three trillion dollars? >> Trillions, yeah. >> Right, so a hundred billion dollars is a fairly small segment. Now, I would be disingenuous as a vendor, but I'll go for it, I would say people are highly underinvested in security relative ... Stu's laughing his head off, right? >> Well, is that not a big enough pie for you, come on. >> No, it's not, I think the pie should be like five times bigger, I mean. >> You don't want to make that comparison with health insurance, do you? >> You have health insurance, you have life insurance, you insurance on your car, you have insurance on your home. You guys are high net worth individuals, you probably have policies so you don't get sued. You probably spend ten percent of your total income on forms of insurance, things that protect you and your family. >> So you're saying it should be triple the spend. >> Why are you only spending two or three percent of your IT given the criticality of the data that's sitting in those environments? >> Okay, so we know we only pay for insurance when we need it, in marketing the joke's always I waste half of money, I just don't know which half. You know, how much are we wasting in security vs. >> Well, I mean I think if you're buying infrastructure based models you're spending, you're building, you're wasting a lot. Illumio is a consumption-based model based on how much you use. So I mean we look more like you know, it's a per operating system instance that you pay a yearly license for. So I think we're closer to the Amazon consumption model for security, and we've led with that four years ago, when we started the company. So I think if security became more like you pay as you go, and less pay for just having it, just as we talk about the different models for infrastructure, where I own it, where I rent it, where I pay as I go, I think you will get better spends. I mean, we effectively sell security the way Uber sells or Lyft sells car, when you need to pay for it, use it, you pay for it. There's probably a whole lot of efficiency that could be there, but I'd argue it's under invested. >> Well, the other dimension that is inside out vs. outside in, I mean, you're building more moats. We know still more money is spent over here. >> Well here's a stat. So the vast bulk of data center security, so the perimeter firewall market's about a ten billion dollar market. Only about Cisco just sent out their announcement this week about their cloud index. 17 percent of the traffic, net traffic that goes in and out of the data center and about 80 percent of it's inside, and a little bit of it goes to the co-load, right? So you are putting all your investment on 17 percent of your traffic. So that's like buying all the cable channels. You watch the cooking channel? You're paying for it. You're watching rugged outdoor fishermen channel? You're paying for it. So I think you're going to have to, just like you're making infrastructure investments are moving to paying for what you use, your security investments have to go the same way. So why would you put all your money only guarding 17% of your network traffic? >> Okay, we're out of time, but so, last question, what are you guys going to do, what are you doing with this big bag of money that you just got? Where are you directing it? What's your strategy? >> Well, I mean we're probably going to have to hire the CUBE to come to like Illumio. >> Fantastic, let's do that. >> Yeah, we're totally going to do that but ... >> Oh really, well, what's the show, Illumio World? >> Well there's going to be an Illumio World when we launch it you guys are going to be there. >> Fantastic, I'd love to be there. >> So, there's no doubt. You have that in writing, you have that on video, like testimony. >> Yeah, even better. >> Yeah, like I can't even say I didn't tweet it, like you'll have a record of it. >> We can shame you into it. >> You can totally shame me into it. I think you're going to see a lot of geographic expansion of the company. We're about to expand down under and other places we've been mostly in North America and parts of Europe. And a lot of investments going into the channels, strategic partnerships and I mean a lot like Nutanix, I mean our company's half R&D, we're going to just as heavily a year from now we'll still be half R&D. Even with growth, because we've got a lot of platform build, and we're building a platform that's going to be around for decades. So there's still a lot of engineering to do too. >> Al, we love having you on, you're plugged in, great Silicon Valley friend, really appreciate you coming back. >> Appreciate you having me today. >> You're welcome. Okay, keep it right there everybody, we're back with our next guest after this short break. This is the CUBE here live from next.conf. We'll be right back.