(soft music) >> Announcer: TheCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (upbeat music) >> Welcome back to Spain, everybody. We're here at the Fira in MWC23. Is just an amazing day. This place is packed. They said 80,000 people. I think it might even be a few more walk-ins. I'm Dave Vellante, Lisa Martin is here, David Nicholson. But right now we have the Analyst Hot Takes with three friends of theCUBE. Chris Lewis is back again with me in the co-host seat. Zeus Kerravala, analyst extraordinaire. Great to see you, Z. and Sarbjeet SJ Johal. Good to see you again, theCUBE contributor. And that's my new name for him. He says that is his nickname. Guys, thanks for coming back on. We got the all male panel, sorry, but it is what it is. So Z, is this the first time you've been on it at MWC. Take aways from the show, Hot Takes. What are you seeing? Same wine, new bottle? >> In a lot of ways, yeah. I mean, I was talking to somebody this earlier that if you had come from like MWC five years ago to this year, a lot of the themes are the same. Telco transformation, cloud. I mean, 5G is a little new. Sustainability is certainly a newer theme here. But I think it highlights just the difficulty I think the telcos have in making this transformation. And I think, in some ways, I've been unfair to them in some degree 'cause I've picked on them in the past for not moving fast enough. These are, you know, I think these kind of big transformations almost take like a perfect storm of things that come together to happen, right? And so, in the past, we had technologies that maybe might have lowered opex, but they're hard to deploy. They're vertically integrated. We didn't have the software stacks. But it appears today that between the cloudification of, you know, going to cloud native, the software stacks, the APIs, the ecosystems, I think we're actually in a position to see this industry finally move forward. >> Yeah, and Chris, I mean, you have served this industry for a long time. And you know, when you, when you do that, you get briefed as an analyst, you actually realize, wow, there's a lot of really smart people here, and they're actually, they have challenges, they're working through it. So Zeus was saying he's been tough on the industry. You know, what do you think about how the telcos have evolved in the last five years? >> I think they've changed enormously. I think the problem we have is we're always looking for the great change, the big step change, and there is no big step change in a way. What telcos deliver to us as individuals, businesses, society, the connectivity piece, that's changed. We get better and better and more reliable connectivity. We're shunting a load more capacity through. What I think has really changed is their attitude to their suppliers, their attitude to their partners, and their attitude to the ecosystem in which they play. Understanding that connectivity is not the end game. Connectivity is part of the emerging end game where it will include storage, compute, connect, and analytics and everything else. So I think the realization that they are not playing their own game anymore, it's a much more open game. And some things they will continue to do, some things they'll stop doing. We've seen them withdraw from moving into adjacent markets as much as we used to see. So a lot of them in the past went off to try and do movies, media, and a lot went way way into business IT stuff. They've mainly pulled back from that, and they're focusing on, and let's face it, it's not just a 5G show. The fixed environment is unbelievably important. We saw that during the pandemic. Having that fixed broadband connection using wifi, combining with cellular. We love it. But the problem as an industry is that the users often don't even know the connectivity's there. They only know when it doesn't work, right? >> If it's not media and it's not business services, what is it? >> Well, in my view, it will be enabling third parties to deliver the services that will include media, that will include business services. So embedding the connectivity all the way into the application that gets delivered or embedding it so the quality mechanism deliver the gaming much more accurately or, I'm not a gamer, so I can't comment on that. But no, the video quality if you want to have a high quality video will come through better. >> And those cohorts will pay for that value? >> Somebody will pay somewhere along the line. >> Seems fuzzy to me. >> Me too. >> I do think it's use case dependent. Like you look at all the work Verizon did at the Super Bowl this year, that's a perfect case where they could have upsold. >> Explain that. I'm not familiar with it. >> So Verizon provided all the 5G in the Super Bowl. They provided a lot of, they provided private connectivity for the coaches to talk to the sidelines. And that's a mission critical application, right? In the NFL, if one side can't talk, the other side gets shut down. You can't communicate with the quarterback or the coaches. There's a lot of risk at that. So, but you know, there's a case there, though, I think where they could have even made that fan facing. Right? And if you're paying 2000 bucks to go to a game, would you pay 50 bucks more to have a higher tier of bandwidth so you can post things on social? People that go there, they want people to know they were there. >> Every football game you go to, you can't use your cell. >> Analyst: Yeah, I know, right? >> All right, let's talk about developers because we saw the eight APIs come out. I think ISVs are going to be a big part of this. But it's like Dee Arthur said. Hey, eight's better than zero, I guess. Okay, so, but so the innovation is going to come from ISVs and developers, but what are your hot takes from this show and now day two, we're a day and a half in, almost two days in. >> Yeah, yeah. There's a thing that we have talked, I mentioned many times is skills gravity, right? Skills have gravity, and also, to outcompete, you have to also educate. That's another theme actually of my talks is, or my research is that to puts your technology out there to the practitioners, you have to educate them. And that's the only way to democratize your technology. What telcos have been doing is they have been stuck to the proprietary software and proprietary hardware for too long, from Nokia's of the world and other vendors like that. So now with the open sourcing of some of the components and a few others, right? And they're open source space and antenna, you know? Antennas are becoming software now. So with the invent of these things, which is open source, it helps us democratize that to the other sort of skirts of the practitioners, if you will. And that will bring in more applications first into the IOT space, and then maybe into the core sort of California, if you will. >> So what does a telco developer look like? I mean, all the blockchain developers and crypto developers are moving into generative AI, right? So maybe those worlds come together. >> You'd like to think though that the developers would understand everything's network centric today. So you'd like to think they'd understand that how the network responds, you know, you'd take a simple app like Zoom or something. If it notices the bandwidth changes, it should knock down the resolution. If it goes up it, then you can add different features and things and you can make apps a lot smarter that way. >> Well, G2 was saying today that they did a deal with Mercedes, you know this probably better than I do, where they're going to embed WebEx in the car. And if you're driving, it'll shut off the camera. >> Of course. >> I'm like, okay. >> I'll give you a better example though. >> But that's my point. Like, isn't there more that we can do? >> You noticed down on the SKT stand the little helicopter. That's a vertical lift helicopter. So it's an electric vertical lift helicopter. Just think of that for a second. And then think of the connectivity to control that, to securely control that. And then I was recently at an event with Zeus actually where we saw an air traffic control system where there was no people manning the tower. It was managed by someone remotely with all the cameras around them. So managing all of those different elements, we call it IOT, but actually it's way more than what we thought of as IOT. All those components connecting, communicating securely and safely. 'Cause I don't want that helicopter to come down on my head, do you? (men laugh) >> Especially if you're in there. (men laugh) >> Okay, so you mentioned sustainability. Everybody's talking about power. I don't know if you guys have a lot of experience around TCO, but I'm trying to get to, well, is this just because energy costs are so high, and then when the energy becomes cheap again, nobody's going to pay any attention to it? Or is this the real deal? >> So one of the issues around the, if we want to experience all that connectivity locally or that helicopter wants to have that connectivity, we have to ultimately build denser, more reliable networks. So there's a CapEx, we're going to put more base stations in place. We need more fiber in the ground to support them. Therefore, the energy consumption will go up. So we need to be more efficient in the use of energy. Simple as that. >> How much of the operating expense is energy? Like what percent of it? Is it 10%? Is it 20%? Is it, does anybody know? >> It depends who you ask and it depends on the- >> I can't get an answer to that. I mean, in the enterprise- >> Analyst: The data centers? >> Yeah, the data centers. >> We have the numbers. I think 10 to 15%. >> It's 10 to 12%, something like that. Is it much higher? >> I've got feeling it's 30%. >> Okay, so if it's 30%, that's pretty good. >> I do think we have to get better at understanding how to measure too. You know, like I was talking with John Davidson at Sysco about this that every rev of silicon they come out with uses more power, but it's a lot more dense. So at the surface, you go, well, that's using a lot more power. But you can consolidate 10 switches down to two switches. >> Well, Intel was on early and talking about how they can intelligently control the cores. >> But it's based off workload, right? That's the thing. So what are you running over it? You know, and so, I don't think our industry measures that very well. I think we look at things kind of boxed by box versus look at total consumption. >> Well, somebody else in theCUBE was saying they go full throttle. That the networks just say just full throttle everything. And that obviously has to change from the power consumption standpoint. >> Obviously sustainability and sensory or sensors from IOT side, they go hand in hand. Just simple examples like, you know, lights in the restrooms, like in public areas. Somebody goes in there and just only then turns. The same concept is being applied to servers and compute and storage and every aspects and to networks as well. >> Cell tower. >> Yeah. >> Cut 'em off, right? >> Like the serverless telco? (crosstalk) >> Cell towers. >> Well, no, I'm saying, right, but like serverless, you're not paying for the compute when you're not using it, you know? >> It is serverless from the economics point of view. Yes, it's like that, you know? It goes to the lowest level almost like sleep on our laptops, sleep level when you need more power, more compute. >> I mean, some of that stuff's been in networking equipment for a long time, it just never really got turned on. >> I want to ask you about private networks. You wrote a piece, Athenet was acquired by HPE right after Dell announced a relationship with Athenet, which was kind of, that was kind of funny. And so a good move, good judo move by by HP. I asked Dell about it, and they said, look, we're open. They said the right things. We'll see, but I think it's up to HP. >> Well, and the network inside Dell is. >> Yeah, okay, so. Okay, cool. So, but you said something in that article you wrote on Silicon Angle that a lot of people feel like P5G is going to basically replace wireless or cannibalize wireless. You said you didn't agree with that. Explain why? >> Analyst: Wifi. >> Wifi, sorry, I said wireless. >> No, that's, I mean that's ridiculous. Pat Gelsinger said that in his last VMware, which I thought was completely irresponsible. >> That it was going to cannibalize? >> Cannibalize wifi globally is what he said, right? Now he had Verizon on stage with him, so. >> Analyst: Wifi's too inexpensive and flexible. >> Wifi's cheap- >> Analyst: It's going to embed really well. Embedded in that. >> It's reached near ubiquity. It's unlicensed. So a lot of businesses don't want to manage their own spectrum, right? And it's great for this, right? >> Analyst: It does the job. >> For casual connectivity. >> Not today. >> Well, it does for the most part. Right now- >> For the most part. But never at these events. >> If it's engineered correctly, it will. Right? Where you need private 5G is when reliability is an absolute must. So, Chris, you and I visited the Port of Rotterdam, right? So they're putting 5G, private 5G there, but there's metal containers everywhere, right? And that's going to disrupt it. And so there are certain use cases where it makes sense. >> I've been in your basement, and you got some pretty intense equipment in there. You have private 5G in there. >> But for carpeted offices, it does not make sense to bring private. The economics don't make any sense. And you know, it runs hot. >> So where's it going to be used? Give us some examples of where we should be looking for. >> The early ones are obviously in mining, and you say in ports, in airports. It broadens cities because you've got so many moving parts in there, and always think about it, very expensive moving parts. The cranes in the port are normally expensive piece of kits. You're moving that, all that logistics around. So managing that over a distance where the wifi won't work over the distance. And in mining, we're going to see enormous expensive trucks moving around trying to- >> I think a great new use case though, so the Cleveland Browns actually the first NFL team to use it for facial recognition to enter the stadium. So instead of having to even pull your phone out, it says, hey Dave Vellante. You've got four tickets, can we check you all in? And you just walk through. You could apply that to airports. You could do put that in a hotel. You could walk up and check in. >> Analyst: Retail. >> Yeah, retail. And so I think video, realtime video analytics, I think it's a perfect use case for that. >> But you don't need 5G to do that. You could do that through another mechanism, couldn't you? >> You could do wire depending on how mobile you want to do it. Like in a stadium, you're pulling those things in and out all the time. You're moving 'em around and things, so. >> Yeah, but you're coming in at a static point. >> I'll take the contrary view here. >> See, we can't even agree on that. (men laugh) >> Yeah, I love it. Let's go. >> I believe the reliability of connection is very important, right? And the moving parts. What are the moving parts in wifi? We have the NIC card, you know, the wifi card in these suckers, right? In a machine, you know? They're bigger in size, and the radios for 5G are smaller in size. So neutralization is important part of the whole sort of progress to future, right? >> I think 5G costs as well. Yes, cost as well. But cost, we know that it goes down with time, right? We're already talking about 60, and the 5G stuff will be good. >> Actually, sorry, so one of the big boom areas at the moment is 4G LTE because the component price has come down so much, so it is affordable, you can afford to bring it all together. People don't, because we're still on 5G, if 5G standalone everywhere, you're not going to get a consistent service. So those components are unbelievably important. The skillsets of the people doing integration to bring them all together, unbelievably important. And the business case within the business. So I was talking to one of the heads of one of the big retail outlets in the UK, and I said, when are you going to do 5G in the stores? He said, well, why would I tear out all the wifi? I've got perfectly functioning wifi. >> Yeah, that's true. It's already there. But I think the technology which disappears in front of you, that's the best technology. Like you don't worry about it. You don't think it's there. Wifi, we think we think about that like it's there. >> And I do think wifi 5G switching's got to get easier too. Like for most users, you don't know which is better. You don't even know how to test it. And to your point, it does need to be invisible where the user doesn't need to think about it, right? >> Invisible. See, we came back to invisible. We talked about that yesterday. Telecom should be invisible. >> And it should be, you know? You don't want to be thinking about telecom, but at the same time, telecoms want to be more visible. They want to be visible like Netflix, don't they? I still don't see the path. It's fuzzy to me the path of how they're not going to repeat what happened with the over the top providers if they're invisible. >> Well, if you think about what telcos delivers to consumers, to businesses, then extending that connectivity into your home to help you support secure and extend your connection into Zeus's basement, whatever it is. Obviously that's- >> His awesome setup down there. >> And then in the business environment, there's a big change going on from the old NPLS networks, the old rigid structures of networks to SD1 where the control point is moved outside, which can be under control of the telco, could be under the control of a third party integrator. So there's a lot changing. I think we obsess about the relative role of the telco. The demand is phenomenal for connectivity. So address that, fulfill that. And if they do that, then they'll start to build trust in other areas. >> But don't you think they're going to address that and fulfill that? I mean, they're good at it. That's their wheelhouse. >> And it's a 1.6 trillion market, right? So it's not to be sniffed at. That's fixed on mobile together, obviously. But no, it's a big market. And do we keep changing? As long as the service is good, we don't move away from it. >> So back to the APIs, the eight APIs, right? >> I mean- >> Eight APIs is a joke actually almost. I think they released it too early. The release release on the main stage, you know? Like, what? What is this, right? But of course they will grow into hundreds and thousands of APIs. But they have to spend a lot of time and effort in that sort of context. >> I'd actually like to see the GSMA work with like AWS and Microsoft and VMware and software companies and create some standardization across their APIs. >> Yeah. >> I spoke to them yes- >> We're trying to reinvent them. >> Is that not what they're doing? >> No, they said we are not in the business of a defining standards. And they used a different term, not standard. I mean, seriously. I was like, are you kidding me? >> Let's face it, there aren't just eight APIs out there. There's so many of them. The TM forum's been defining when it's open data architecture. You know, the telcos themselves are defining them. The standards we talked about too earlier with Danielle. There's a lot of APIs out there, but the consistency of APIs, so we can bring them together, to bring all the different services together that will support us in our different lives is really important. I think telcos will do it, it's in their interest to do it. >> All right, guys, we got to wrap. Let's go around the horn here, starting with Chris, Zeus, and then Sarbjeet, just bring us home. Number one hot take from Mobile World Congress MWC23 day two. >> My favorite hot take is the willingness of all the participants who have been traditional telco players who looked inwardly at the industry looking outside for help for partnerships, and to build an ecosystem, a more open ecosystem, which will address our requirements. >> Zeus? >> Yeah, I was going to talk about ecosystem. I think for the first time ever, when I've met with the telcos here, I think they're actually, I don't think they know how to get there yet, but they're at least aware of the fact that they need to understand how to build a big ecosystem around them. So if you think back like 50 years ago, IBM and compute was the center of everything in your company, and then the ecosystem surrounded it. I think today with digital transformation being network centric, the telcos actually have the opportunity to be that center of excellence, and then build an ecosystem around them. I think the SIs are actually in a really interesting place to help them do that 'cause they understand everything top to bottom that I, you know, pre pandemic, I'm not sure the telcos were really understand. I think they understand it today, I'm just not sure they know how to get there. . >> Sarbjeet? >> I've seen the lot of RN demos and testing companies and I'm amazed by it. Everything is turning into software, almost everything. The parts which are not turned into software. I mean every, they will soon. But everybody says that we need the hardware to run something, right? But that hardware, in my view, is getting miniaturized, and it's becoming smaller and smaller. The antennas are becoming smaller. The equipment is getting smaller. That means the cost on the physicality of the assets is going down. But the cost on the software side will go up for telcos in future. And telco is a messy business. Not everybody can do it. So only few will survive, I believe. So that's what- >> Software defined telco. So I'm on a mission. I'm looking for the monetization path. And what I haven't seen yet is, you know, you want to follow the money, follow the data, I say. So next two days, I'm going to be looking for that data play, that potential, the way in which this industry is going to break down the data silos I think there's potential goldmine there, but I haven't figured out yet. >> That's a subject for another day. >> Guys, thanks so much for coming on. You guys are extraordinary partners of theCUBE friends, and great analysts and congratulations and thank you for all you do. Really appreciate it. >> Analyst: Thank you. >> Thanks a lot. >> All right, this is a wrap on day two MWC 23. Go to siliconangle.com for all the news. Where Rob Hope and team are just covering all the news. John Furrier is in the Palo Alto studio. We're rocking all that news, taking all that news and putting it on video. Go to theCUBE.net, you'll see everything on demand. Thanks for watching. This is a wrap on day two. We'll see you tomorrow. (soft music)

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hello everyone, and welcome to this week's episode of theCUBE insights, powered by ETR. In this breaking analysis, I'm going to provide a little detail on the recent announcement that Insight Partners was acquiring Veeam for five billion dollars. There was a lot of information on the announcement in press releases and in news articles, so what I really want to focus on is what it means for the industry generally, and for the data protection community specifically. So, very briefly this was a five billion dollar exit for Veeam on top of a five hundred million dollar investment lead by the same Insight Partners last year. I think it had earlier investments, kind of a rent, with an option to buy. New management is being promoted from within, which I think is significant, to replace the two founders. Andrei Baronov and Ratmir Timashev are going to step down after the transition and give up their board seats. Veeam is a fascinating company. It started in the 2006, 2007 time frame, after the two founders, who met in college, formed and sold Aleta software to Quest. Then they started a company called AMUST Software, from which they created Veeam. You never hear about AMUST, but I believe it's the engineering and development arm of Veeam. Now the new CEO of Veeam, Bill Largent told theCUBE that AMUST is now a wholly owned subsidiary of Veeam and it won't effect any of the engineering assets that exist in Prague and in Russia. So this I the thing about Veeam, it's a very closely held company controlled by it's two founders, with a domicile in Switzerland. My understanding is Baronov is, well he's the technical guru, and he's a resident of that country in Switzerland, and the HQ there is very lean, the sizable engineering teams, as they say, is in Russia and Prague. Timashev resides in the US, and he's a marketing genius, who helped create this company, and it's always punched above it's weight class with, epic parties, and great products. Now interestingly, Veeam's rise, it coincided with the ascendancy of VMware. Veeam became the standard backup software for small to medium size companies within VMware shops. Their products are renowned for being simple, and working as advertised, and their customer support is outstanding by all accounts. But the US business lagged, despite the fact that most of VMware's business is in the Americas. You'd think you think if they super glued themself to VMware their Americas business would be higher. So a few years ago they decided to really go hard after the enterprise and they brought in Peter Mckay, from VMware, and he began to build up a US presence. But the enterprise business, it requires a lot of things that were kind of antithetical to Veeam. So think about long sales cycles, expensive sales people, belly to belly selling, with the expectations of, road maps, and clarity around enterprise feature sets. Now McKay was named CEO with Baronov, who continued to run engineering. So it was a bit of a culture clash. You got the sales oriented leader wanting the engineering team to turn on a dime and help close large deals, and satiate partners like HPE and Sysco, and you've got this genius co-leader, slash engineer, with an incredible track record of delivering features that the customer loves. So it really didn't work out and then Veeam scaled back on it's ambitions some what. At it's annual user conference in Miami last year, Ratmir came on theCUBE, and he talked about how Veeam's act one was all about dominance in virtualized environment. Let's listen to what he said about act two and then we'll come back and talk about it >> That was act one, we dominated it, we grew from zero to one billion within 10, 12 years. We added three hundred fifty thousand customers over that time frame, and now it's act two. What is act two? Act two is the, again, the new major industry transformation to a hybrid cloud. What are the similarities? Again, Veeam is in a great position because we're at the right time at the right place with a brilliant product. >> Now what we know is that act two is about a few things, one, as Ratmir said, hybrid cloud, multi cloud management, etcetera. But it's also about an awesome exit for it's two founders. Wow five billion dollars, five x revenue multiple, handing over the reigns is really the third thing this is about and creating more traditional governance structure for Veeam. Now they're moving from a governance structure that was closely held and opaque to one that is still going to be closely held, but ideally somewhat less opaque. Which brings me to inside partners. In the money world, you basically have a spectrum of investors. On the one side you've got banks, who are the most conservative. On the other side you've got VCs, now they're the most aggressive, of course. Now somewhere in the middle, you have private equity firms. Now they traditionally invest in companies, and they squeeze them for EBITDA, and they suck money out. But inside is more of a hybrid. They invest in a number of companies as VCs, they take a portion of the ownership. And to me they're more of a rule of forty PE, meaning it's not just about EBITDA, it's about growth plus EBITDA. So a rule of thirty or a rule of forty PE company, they can dial down EBITDA and go for growth, or dial up EBIT and moderate growth. So it's a great model. So I would expect Insight to bring structure and leadership to Veeam, with the goal of taking the company public at some point, because they like to sell to companies for all cash, I don't see a logical buyer at these kind of price points for this company in this market. It's growing market but it's still not a giant market. All right let's shift gears a little bit and get into some of the ETR data. Here's a narrative they put out recently that, to me, sums it up well. ETR said Veeam is one of the few vendors growing share among customers vs previous surveys in the storage sector. And that said, spending intentions are decelerating and continue to look poor in the largest sectors and Veeam trails Rubrik and Cohesity, although on a larger user base. So you can see by this statement that Veeam is of course doing well, but there are some cracks in the enterprise armor that I want to talk about and drill into a little bit. Now this now this Arline customer quote also, to me, sums up one of the reasons for Veeam's success. What this person said is if I want to do a Veeam back up to the cloud, it's basically point and click, very easy to use. Now I've talked to dozens, if not hundreds of Veeam customers, and they all say the same thing, it just works, that's kind of their motto. So this is the big reason why Veeam has steadily gained gained share over time. Now take a look at this chart, which shows the progression over time of Veeam's progress in terms of what ETR calls market share. Now remember, market share is a measure of pervasiveness in the ETR data set. And you can see, in the data, that Veeam has had a steady rise since ETR started tracking them at critical mass back in 2014. And you can see the steady decline in the survey for Veritas and Commvault and what appears to be, rapid momentum building for Rubrik and Cohesity, two companies that I said in my 2020 predictions breaking analysis that would continue to do well this year. Now notice I had to black out the January 2020 survey, which is ending shortly, so stay tuned for those results. But let's drill into Veeam's performance a little bit more. What this chart shows is a candlestick of net score and market share across all the respondents in the ETR survey for Veeam. Remember net score is a measure of spending momentum that subtracts customers that are spending less, the red, from those spending more, the greens. And it's represented over time by this blue line that you see. You can see that this blue line, it bounces around but it holds steady in the past couple of years pretty generally, and really in that thirty to forty percent range which you see on the left hand axis. Now that yellow line, is market share or pervasiveness, it also continues to climb steadily as I showed you in the previous chart. Now again this is amongst all respondents. Let's now take a look at this chart which isolates Veeam's performance in the largest companies, that enterprise push. Notice the pictures is somewhat choppier. Market share is okay, although unlike the previous chart, it's not steady. This is stunning. Peter McKay left in October 2018, and that's when Veeam really pulled back on it's big enterprise push, and you can see, there's a noticeable and steady drop there based on ETR data. So what's happening here is we are entering a new chapter for Veeam, act two so to speak. With new leadership and new governance. Danny Allen is taking over CTO, he previously ran strategy, Bill Largent is going to be CEO, the HQ is moving into the US. So in my opinon, Veeam's issues in the US have been more execution related than anything else. Veeam is a leader. So partnerships with Nutanix, Sysco, HPE, NetApp, should continue to improve and be somewhat productive, actually largely productive. Let's talk a little bit about Veeam's architecture, and a point of discussion that you often hear in the community. Veeam's a Window's based architecture. Now is that a blessing or is that a curse? Well the pros are that the Veeam team came out of a Windows world, and they know the platform very well. They are amazingly good at adding function, without screwing up performance somewhere else. You saw this a couple years back when they were making a big push on the enterprise and they increased the file sizes, and the number of objects that they could support. Another example is when Veeam added cloud back up, it was a really good product, version one. Unlink many products, when they first tried to port to the cloud, that wasn't the case. Recovery from the cloud is very tricky. Things are out of sync, you got a metadata challenge, and generally Veeam was able to achieve consistent levels of performance with it's cloud product. Now flip side of this, is that if you look at most, if not all, modern architectures today, are based on Linux. And once you start getting into mulit cloud, and cross cloud management, you're going to bump into and be interfacing with lots of Linux based systems. So Veeam is going to have migrate code, and maintaining consistent performance is going to be tougher. But as David Fourier, my colleague points out, there are many many ways to skin a cat, and Veeam's engineering team has really, based on it's track record, has proven that it can solve tough problems, and really deliver a great product consistently. I think the bigger issue and challenge for Veeam again, is execution in the US, and of course the enterprise. Customers in EBC's executive briefing centers, they want to see road maps, and enterprise features, and specials. And so we'll see, if that's something that Veeam has an appetite for. If they do, and I'm one of the incumbents, I'd be worried that Veeam could do a land and expand. Where Veeam isn't as strong in large enterprises, big companies they buy from Veeam. Maybe it's a smaller division, or remote location, but it's not like they don't do business in large accounts, they do. So in a way, they've already landed and they have an opportunity to expand, so that's something to pay attention to. If I'm an enterprise customer, I would be pressing Veeam on it's roadmap, and having them clarify their vision around hybrid and multi cloud management. Will Veeam be more transparent and willing to do specials for the enterprise, and their big partners, who expect them, when they say jump, they expect Veeam to say how high. How will Veeam's culture change, is the other thing I want to focus on. As the two founders step down, are they going to be able to main their engineering ethos, and customer loyalty, and can they figure out the enterprise. I'm a big fan of founder lead companies, when founders leave cultures often change. When founders stay, they're intensely committed, even beyond great CEOs who aren't founders. Look at Michael Dell. He went to the mat to keep his company against the great icon, now look at Dell technologies, after the EMC acquisition, it was completely transformed. Look at Oracle, look at the lengths that Larry Ellison goes to win. Compare that to a great CEO Joe Tucci, when he was at EMC, but you know when he was done, he was done, it was over. It wasn't his baby. So my point is how will this effect Veeam's culture and prospects in the long term. For me the bottom line is the big opportunity's in the US. And that's about execution. And I expect with the move to US HQ, new management, I expect they're going to see consistent market share gains, that's going to continue. The enterprise however, that's going to take longer, it's going to require more patience and more money. And with Veeam transitioning from essentially the two founder's lifestyle business into a company that's really built for an exit, they're going to have more money to invest, greater transparency, I hope, and a path to really build on their past successes. So this Dave Vellante signing out from the latest episode of theCUBE insights, powered by ETR. Thanks for watching everybody and we'll see you next time. (upbeat music)

>> From Boston, Massachusetts. It's theCUBE. Covering Actifio 2019 Data Driven. (upbeat techno music) Brought to you by Actifio. >> Hello everyone and welcome to Boston and theCUBE's special coverage of Actifio Data Driven 19. I'm Dave Vellante. Stu Miniman is here. We've got a special guest, John Furrier is in the house from from Palo Alto. Guys, theCUBE we love to go out on the ground, you know, we go deep. We're here at this data theme, right? We were there in the early days, John, you called me up and say, "Get your butt here, we're going to cover the first of Doop World". And since then things have moved quite fast. Everybody thought, you know, Hadoop Big Data was going to take over the world. Nobody even uses that term anymore, right? It's kind of, now it's AI, and machine intelligence, and block chain, and everything else. So what do you think is happening? Did the early Big Data days fail? You know, Frank Genus this morning called it The experimentation phase. >> I mean, I don't really think Frank has a good handle on what's going on in my opinion, cause I think it's not an experimentation, it's real. That was a wave that was essentially the beginning of, not an experimentation, of realization and reality that data, unstructured data in particular was real and relevant. Hadoop looked good off the tee, mill the fairway as we say, but the thing about the Hadoop ecosystem is that validated big data. Every financial institution jumped on it. Everyone who knew anything about data or had data issues or had a lot of data, knew the value. It's just that the apparatus to build via Hadoop was too expensive. In comes Cloud computing at scale, so, as Cloud was accelerating, you look at the Amazon Web Services Revenue Chart you can almost see the D mark where the inflection point is on the hockey stick of Amazon's revenue numbers. And that is the point in time where Hadoop was on the declining of failure. Hortonworks sold the Cloudera. Cloudera's earnings are at an all-time low. A lot of speculation of their entire strategy, and their venture back company went public, but bet the ranch to be the next data warehouse. That wasn't the business model. The data business was a completely new industry, completely being re-transformed, and, far from experimentation, it is real and definitely growing like a weed, but changing because of the underpinning infrastructure dynamics of Cloud Native, Microservices, and that's only going to get highly accelerated and the people who talk about context of industry like Frank, are going to be off. Their predictions will be off because they don't really see the new picture clear enough, in my opinion, >> So, >> I think he's off. >> So it's not so much of a structural change like it was when we went from, you know, mainframes to PCs, it's more of a sort of flow, evolution into this new area which is being driven, powered by new technologies, we talk about block chain machine intelligence and other things. >> Well, I mean, the make up of companies that were building quote, "Big Data Solutions", were trying to build an apparatus or mechanisms to solve big data problems, but none of them actually had the big data problem. None of them were full of data. None of them had a lot of data. The ones that had problems were the financial institutions, the credit card companies, the people who were doing a lot of large scale, um, with Google, Facebook, and some of the hyperscalers. They were actually dealing with the data tsunami themselves, so the practitioners ended up driving it. You guys at Wikibomb, we pointed this out on theCUBE many times, that the value was going to come from the practitioners not the suppliers of so called technology. So, you know, the Clouderas of the world who thought Hadoop would be relevant and growing as a technology were right on one side, on the other side of the coin was the Cloud decimation of that sector. The Cloud computer just completely blew away that Hadoop market because you didn't have to hire a PhD, you didn't have to hire specialty skills to stand up Hadoop clusters. You could actually throw it in the Cloud and get agile quickly, and get value out of data very very quickly. That has been real, it has not been an experiment. There's been new case studies, new companies born, new brands, so it's not an experiment, it is reality, and it's only going to get more real every day. >> And I add of course now you've got, you mentioned Cloudera and Hortenworks, you also got Matt Bar reeling Stu. Let's talk about Actifio. So they coined the term Copy Data Management, they created the category, of course they do a lot of backup, I mean, everybody in this space does a lot of backup. And then you saw the Silicon Valley companies come in. Particularly Cohesity and Rubric, you know, to a lesser extent he got some other guys like Zerto and Durva, but it was really those two companies, Cohesity and Rubric, they raised more money in their D round than Actifio has since inception. But yet Actifio keeps, you know, plodding along, growing, you know, word is they're profitable, you know, they're not like this really sectioned very East Coast versus kind of West Coast mentality. What's your take on what's going on? >> Yeah, so, Dave right, you look at the early days of Actifio and you say great, Copy Data Management, I have all these copies of data, how do I reduce my cost, get greater utilization than I have and leverage the data? I love the title of the show here, Data Driven. You know, we know at the center of digital transformation if you can't become data driven, like the CMO Brian Regan got up on stage talk about that industrialization of data. How am I going along that journey being this, I collected data versus now, you know, data, you know, is the reason that I make decisions, how I make decisions, I get smarter. The Cloud of course is a huge enabler of this, there's all these services that I can instantly access to be able to get greater insight, and move along with that environment, and if you look underneath all of these backup companies, it's really how I can change that data into business value and drive my business, the metadata underneath and all those pieces, not just the wonky storage and technical solutions that make things better, and I get a faster ROI. It's that data at the core of what we do and how do I get that as a business to accelerate. Because we know IT needs to be able to respond back to the business and data needs to be that rocket fuel. >> Is it the case of data haves and data have-nots? I mean, Amazon has data >> I mean, you're right-- >> and Facebook has data. >> We're talking about Actifio, you brought that up, okay, on this segment, on the inside segment, which is cool, they're here at the event, but they have a good opportunity but they also, they got some challenges. I mean, the thing about Actifio is, to my earlier point, which side of the wave are they on? Are they out too much out front with virtualization and Amazon, the Cloud will take them away, or are they riding the Cloud wave, making that an enabler? And I think what really I like about Actifio is because they have a lot of virtualization capabilities, the question is can they scale that Stu, to containers and microservices, because, the real opportunity in this market, in my opinion, is going to build on the virtualization trend, and make container aware, microservices capabilities because if they don't, then that would be a tell sign. Now either way it's a hot M&A market right now, so I think being in the market, horse on the track as you say. You look at the tableau sales force deal monster numbers we are in clearly a hot IPO market and a major roll up market on the M&A side. I think clearly there's two types of companies, old and new, and that is really what people are looking at, are they part of the old guard, are they the new guard. So, you know, this to me is going to be a tell sign of what they do next, can they make the data driven value proposition, you articulated Stu, actually a reality It's going to come from the technology underneath. >> Well I think it's a really interesting point you're making because, Stu as you probably know, that Amazon announced the Amazon backup service right, and you talked about the backup guys and they're like, "Ah yeah it's backup, but it really doesn't do recovery, it's really not that robust". It's part of me says, "Uh oh"... >> Watch out. >> You better move fast", because Amazon has stated, "Hey if you don't move fast we're going to just keep gobbling", and you've seen Amazon do this. What are your thoughts on that? Can these specialists, can they survive, John's talking about M&A. Can the market support all these guys along with the big, you know, traditional guys like Veritas, and Dell EMC, and IBM and Combol? >> Right, well so Actifio started very much in the data center. They were before this Could wave really took off. It's really only in the last year that they've been sassifying their product. So the question is, does that underlying IP, which wasn't tied to hardware, but, you know, sat at really more of, you know, reminded us of that storage virtualization battles that we talked about for years, Dave, but now they are going in the Cloud. They've got all the partnerships in the Cloud, but they are competing against those new vendors that you talked about like Cohesity and Rubric out there, and there's big money chasing this environment. So, you know, I want to talk to the customers here and find out, you know, where they are using them, and especially some of those first customers using this--. >> Well they clearly need a Cloud play cause that's clearly where the action is. But if you look at what's going on with Amazon, Azure, and Google you see a lot of on premises, Stu, because that's where the customers are. So just because the customers are currently not migrating their existing workloads to the Cloud doesn't mean it's not going to happen. So I think there's an opportunity for any company like Actifio, who may or may not be on the curve on the tech side, one little misfire on a tech bet could cripple the company and also make the company. There's a lot of high risk, reward ratio. How they handle containers. How they build on virtualizations. Virtualization going to to be part of the future with Cloud. These are the kind of the dynamics that are going to be in play, and they got some time on their hands because the on premises growth is because the clients are trying to figure out what to do and they're not going to be migrating, lifting, and shifting workloads all off to the Cloud. New will be Cloud based, but enterprises have proven why we are in multi-Cloud and hybrid-Cloud conversation, that... The enterprise on premises is not going away anytime soon. >> I want to ask you guys, John you specifically, about this sort of new Silicon Valley growth model and how companies are achieving escape velocity. When you and I made our first trip to Barcelona, I was having dinner with David Scott who was the CEO of 3PAR and he said to me, When I came to 3PAR the board said, "Hey we're willing to invest 30 million dollars in this company". And David Scott said to them, "I need way more, I need 80 million dollars". Today 80 million dollars is nothing. You saw, you know, Pure Storage hit escape velocity, was just throwing money, and growing at the problem. You're seeing Cohesity-- >> Well you can debate that. I mean, If you have to build a rocket ship, hit critical mass and you want to fund that, you're going to to need an enterprise. However, there's arguments on the south side that you can actually get fly wheel effect going early with less capital. So again, that's 3PAR-- >> But so that's my point. >> Well so that's 3PAR, that was 2009. >> So, yeah that was early days so that's ancient history. But software is generally supposed to be a capital efficient market, yet these companies are raising many hundreds and hundreds of millions, you know, half a billion dollar raises and they are putting it largely in promotion. Is that the new model, is that sustainable, in your view? >> Well I think you're conflating capital market dynamics with viable companies to invest in. I think there's a robust seed in series A market but the series A market and Silicon Valley is you know, 15 to 25 million, it used to be 3 to 5. So the dynamics are changing on funding. There's just not enough companies, horses on the track, to deploy capital at tranches of 30, 50, 80 million. So the capital markets are clearly going to have the money available so it's a market for the startups and the broke companies. That's separate from actually winning. So you've got slacks going public this weeks, you have other companies who have built business on a sass fly wheel, and then everything else is gravy in terms of the go to market, they got a couple hundred million. I think slack got close to a billion dollars in cash that they've raised. So they're flooded with cash, they'll never spend it all. So there are some companies that can achieve success like that. Others have to buy market share, they got to push and build out a sales force, and it's going to be a function of the role of customer, customization, specialism, and whatnot. But with AI machine leaning there's more efficiencies coming in so I think the modern company can do more with less. >> What do you think of the ride sharing on IPOs, Uber and Lift, do you abol? Do you like 'em or do you think it's just, they're losing too money and can't sustain it? >> I was thinking about that this morning after looking at the article in the Wall Street Journal in our coverage on Silicon angle. You look at Zoom communications, I like models that actually can take a simple concept and an existing mature market and disrupt it by being Cloud efficient and completely sass and data driven. That is an example of success. That to me, Zoom Communications and Zscaler, another company that we talk to, these are companies that were built with a specific value proposition that made the product and they were targeting mature markets with leaders in it. Video conferencing, Webex, Citrix, Zoom came out of nowhere, optimized on simple value proposition, used Cloud scale and data, and crushed it. Uber, Lift, little bit different issue. They're losing money but I would bet on the long term that that is going to be the used case for how people will have transportation. I think that's the long game and I think that without regulatory kind of pressure, without, there's regulatory issues that's really the big risk. But I believe that Uber and Lift absolutely will be long brands and just like Facebook was early on, although they threw off a lot of cash, those guys are building for penetration, and that's where the funding matters. Penetration is critical. Now they're the standard, and people really don't take taxis anymore, but they're really using the ride sharing. And you get the scooters, you get the bikes, they're all sequencing into these adjacent markets which drains more cash but builds the brand, builds the footprint. >> Well that's what I want to ask you. So people compare the early Uber, Lift, Taxi, Ride sharing to Amazon selling books, but there's all these other adjacencies. You have a thought on this? >> Well, just, you know, right, Uber Eats is a huge opportunity for that environment and autonomous vehicles everybody talks about, but it's still quite a ways out. So there are a lot of different- >> Scooters are the same, we're in San Diego, there are 8 gazillion scooters. >> San Diego had fun, you know, going around on their electronic scooters, boy, talk about the gig economy, they pay people at the night, to like go pay by the recharge you do on that, what is the future of work, >> Yeah, that's a great point. >> and how can we have that-- >> Uber going to look a lot like Amazon. You subsidize the front end retail side of the business, but look at the data that they throw up. Uber's data that they're gathering on, not only customer behavior, but just mapping services, 3-D mapping is going to be huge, so you've got these cars that are essentially bots on the road, providing massive mapping and traffic analysis. So you're going to start to see data driven, like Actifio slogan here, be a big part of all design decisions and value proposition from any company out there. And if they're not data driven I think they're going to be toast. >> Probably could because there's that data and that machine learning underneath, that can optimize, you know, where the people are, how I use the system, such a huge wave that we're watching. >> How about one last topic which is heavily data driven, it's Facebook. Facebook is obviously a data driven company, the Facebook crypto play, I love it, I love Facebook. I'm a bull on Facebook, I think it's been beat up. I think, two billion users is hard to replicate, but what's your thoughts on their crypto play? >> Well it's kind of a middle finger to the United States of America but it's a great catalyst for the international market because crypto needed a whale to come in and bring all those users in. Bad timing, in my mind, for Facebook, because given all the anti-trust and regulatory conversations, what better way to show your threat to the world order when you say we're going to run a banking system with a collection of international companies. I think the US is going to look at this and say, "Oh my God! They can't even be trusted to handle personal information and we're going to now let them run a banking system? Run monetary, basically World Bank equivalent infrastructure?" No frickin way! I think this is going to to be a major road to home. I think Facebook has to really make this an ecosystem play if they want to make it work, that's their telegraphic move they're saying, "Hey we want to do for the community but we got our own wallet and we got our own network". But they bring a lot to the table so it's going to be a really interesting dynamic to see the coalescing around Facebook because they could make the market. Look what Instagram did to Snapchat. They literally killed the company, took all their users. That is what's going to happen in the digital money economy when Facebook brings billions of users user experience with money. What happened with Snapchat with Instagram is going to happen to the World Bank if this continues. >> Where do you stand on the government breaking up big tech? >> So Dave, you know, you look in these companies, it's not easy to pull those apart. I don't think our government understands how most of big tech works. You know, take Amazon and AWS, that's one company underneath it. You know, Facebook, Microsoft. You know, Microsoft went through all these issues. Question Dave, we've had lots of debates on Twitter you know, are they breaking the law, are they not doing trust? I have some trust issues with Facebook myself, but most of the big companies up there I don't think the anti-trust kicks in, I don't think it makes sense to pull them apart. >> Stu, the Facebook story and the YouTube story are simply this, they have been hiding under the platform rules, of the Digital Millennium Copyright Act, and they are an editing platform so you can't sue them. Okay, once they become a publisher they could be sued. Just like CNN, Fox News, and everybody else. And we're publishers. So they've been hiding behind the platform. That gig is up. They're going to have to address are you a platform or are you a publisher? You're making editing decisions around what users can see with software, you are essentially editing the feed, that is a publisher role, with that becomes responsibility, and then obviously regulartory. >> Well Facebook is conflicted right now. They're trying to figure out which side of the fence to go on. >> No no no! They want one side! The platform side! They're make billions of dollars! >> Yeah but so they're making decisions about you know, which content to show and whether they monetize it. And when it's controversial content, they'll turn down the ads a little bit but they won't completely eliminate it sometimes. >> So, Dave, the only thing that the partisans in politics seem to agree on though is that big tech has too much power. You know, What's your take on that? >> Well so I think that if they are breaking the law then they should be moderated. But I don't think the answer is to go hard after Elizabeth Warren. Hard after them and break them up. I think you got to start with okay, because you break these companies up what's going to happen is they're going to be worth more, it's going to be AT&T all over again. >> While you guys were at Sysco Live, we covered this at Amazon Web Service and Public Sector Summit. The real issue in government, Stu, is there's too much tech for bad on the PR side, and there's not enough tech for good. Tech is not bad, tech is good. There's not enough promotion around the apps around there. There's real venture funds being created to promote tech for good. That's going to where the tide will turn. When does the tech industry start doing good stuff, not bad stuff. >> All right we've got to wrap. John, thanks for sitting in. Thank you for watching. Be right back, we're here at Actifio Data Driven 2019. From Boston this is theCUBE, be right back. (upbeat techno music)

>> Live from Orlando, Florida, it's theCUBE covering Microsoft Ignite. Brought to you by Cohesity and theCUBE's ecosystem partners. >> Welcome back everyone, we are wrapping up day three of Microsoft Ignite here in Orlando, Florida. CUBE's live coverage, I'm your host Rebecca Knight, along with Stu Miniman, my esteemed cohost for these past three days, it's been fun working with you, Stu. >> Rebecca, it's been a great show, real excited. Our first time at a Microsoft show and it's a big one. I mean, the crowds are phenomenal. Great energy at the show and yeah, it's been great breaking down this ecosystem with you. >> So, three days, what do we know, what did you learn, what is your big takeaway, what are you going to to go back to Boston with? >> You know, it's interesting, we've been all talking and people that I know that have been here a couple of years, I've talked to people that have been at this show for decades, this is a different show. There's actually a friend of mine said, he's like, "Well look, Windows pays the bills for a lot of companies." There's a lot of people that all the Windows components, that's their job. I mean, I think back through my career when I was on the vendor side, how many rollouts of Exchange and SharePoint and all these things we've done over the years. Office 365 been a massive wave that we watched. So Microsoft has a broad portfolio and they've got three anchor shows. I was talking with one of the partners here and he's like, "You know, there's not a lot of channel people "at this event, at VMworld there's a lot of channel people." I'm like, "Well yeah because there's a separate show "that Microsoft has for them." You and I were talking at an earlier analytics session with Patrick Moorhead and he said, "You know when I look at the buy versus build, "a lot of these people are buying and I don't "feel I have as many builders." Oh wait, what's that other show that they have in the Spring, it's called Microsoft Build. A lot of the developers have moved there so it's a big ecosystem, Microsoft has a lot of products. Everything from, my son's excited about a lot of the Xbox stuff that they have here. Heck, a bunch of our crew was pickin' up Xbox sweatshirts while they're here. But a lot has changed, as Tim Crawford said, this is a very, it feels like a different Microsoft, than it even was 12 or 24 months ago. They're innovating, so look at how fast Microsoft moves and some of these things. There's good energy, people are happy and it's still trying to, you know. It's interesting, I definitely learned a lot at this show even though it wasn't the most sparkly or shiny but that's not necessarily a bad thing. >> Right, I mean, I think as you made a great point about just how integral Microsoft is to all of our lives as consumers, as enterprise, the Xbox, the Windows, the data storage, there's just so much that Microsoft does that if we were to take away Microsoft, I can't even imagine what life would be like. What have been your favorite guests? I mean, we've had so many really, really interesting people. Customers, we've had partners, we're going to have a VC. What are some of the most exciting things you've heard? >> Yeah, it's interesting, we've had Jeffrey Snover on the program a couple of years ago and obviously a very smart person here. But at this show, in his ecosystem, I mean, he created PowerShell. And so many people is like, I built my career off of what he did and this product that he launched back in 2001. But we talked a little bit about PowerShell with him but then we were talking about Edge and the Edge Boxes and AI and all those things, it's like this is really awesome stuff. And help connecting the dots to where we hid. So obviously, big name guest star, always, and I always love talking to the customers. The thing I've been looking at the last couple of years is how all of these players fit into a multicloud world. And Microsoft, if you talk about digital transformation, and you talk about who will customers turn to to help them in this multicloud world. Well, I don't think there's any company that is closer to companies applications across the spectrum of options. Office 365 and other options in SaaS, all the private cloud things, you start with Windows Server, you've got Windows on the desktop, Windows on the server. Virtualization, they're starting to do hyperconversion everything, even deeper. As well as all the public cloud with Azure and developers. I talked to the Azure functions team while I was here. Such breadth and depth of offering that Microsoft is uniquely positioned to play in a lot of those areas even if, as I said, certain areas if the latest in data there might be some other company, Google, Amazon, well positioned there. We had a good discussion Bernard Golden, who's with Capital One, gave us some good commentary on where Alibaba fits in the global scheme. So, nice broad ecosystem, and I learned a lot and I know resonated with both of us, the "you want to be a learn it all, not a know it all." And I think people that are in that mindset, this was a great show for them. >> Well, you bring up the mindset, and that is something that Satya Nadella is really such a proponent of. He says that we need to have a growth mindset. This is off of the Carol Dweck and Angela Duckworth research that talks about how important that is, how important continual learning is for success. And that is success in life and success on the job and organization success and I think that that is something that we are also really picked up on. This is the vibe of Microsoft, this is a company, Satya Nadella's leadership, talking to so many of the employees, and these are employees who've been there for decades, these are people who are really making their career, and they said, "Yeah, I been here 20 years, if I had my way, "I'll be here another 30." But the point is that people have really recommitted to Microsoft, I feel. And that's really something interesting to see, especially in the tech industry where people, millennials especially, stay a couple years and then move on to the next shiny, new thing. >> Yeah, there was one of our first guests on for Microsoft said that, "Been there 20 years and what is different about "the Satya Nadella Microsoft to the others is "we're closer and listening even more to our customers." We talk about co-creation, talk about how do we engage. Microsoft is focusing even deeper on industries. So that's really interesting. An area that I wanted to learn a little bit more about is we've been talking about Azure Stack for a number of years, we've been talking about how people are modernizing their data center. I actually had something click with me this week because when I look at Azure Stack, it reminds me of solutions I helped build with converged infrastructure and I was a big proponent of the hyper-converged infrastructure wave. And what you heard over and over again, especially from Microsoft people, is I shouldn't think of Azure Stack in that continuum. Really, Azure Stack is not from the modernization out but really from the cloud in. This is the operating model of Azure. And of course it's in the name, it's Azure, but when I looked at it and said, "Oh, well I've got partners like "Lenovo and Dell and HPE and Sysco." Building this isn't this just the next generation of platform there? But really, it's the Azure model, it's the Azure operating stack, and that is what it has. And it's more, WSSD is their solution for the converged and then what they're doing with Windows Server 2019 is the hyper-converged. Those the models that we just simplify what was happening in the data center and it's similar but a little bit different when we go to things like Azure and Azure Stack and leads to something that I wanted to get your feedback on. You talk business productivity because when we talk to companies like Nutanix, we talk to companies like Cohesity who we really appreciate their support bringing us here, giving us this great thing right in the center of it, they talk about giving people back their nights and weekends, giving them back time, because they're an easy button for a lot of things, they help make the infrastructure invisible and allow that. Microsoft says we're going to try to give you five to ten percent back of your business productivity, going to allow you to focus on things like AI and your data rather than all the kind of underlying spaghetti underneath. What's your take on the business productivity piece of things? >> I mean, I'm in favor of it; it is a laudable goal. If I can have five to ten percent of my day back of just sort of not doing the boring admin stuff, I would love that. Is it going to work, I don't know. I mean, the fact of the matter is I really applaud what Cohesity said and the customers and the fact that people are getting, yes, time back in their day to focus on the more creative projects, the more stimulating challenges that they face, but also just time back in their lives to spend with their children and their spouse and doing whatever they want to do. So those are really critical things, and those are critical things to employee satisfaction. We know, a vast body of research shows, how much work life balance is important to employees coming to their office or working remotely and doing their best work. They need time to recharge and rest and so if Microsoft can pull that off, wow, more power to them. >> And the other thing I'll add to that is if you, say, if you want that work life balance and you want to be fulfilled in your job, a lot of times what we're getting rid of is some of those underlying, those menial tasks the stuff that you didn't love doing in the first place. And what you're going to have more time to do, and every end user that we talked to says, "By the way, I'm not getting put out of a job, "I've got plenty of other tasks I could do." And those new tasks are really tying back to what the business needs. Because business and IT, they need to tie together, they need to work together, it is a partnership there. Because if IT can't deliver what the business needs, there's other alternatives, that's what Stealth IT was and the public cloud could be. And Microsoft really positions things as we're going to help you work through that transition and get there to work on these environments. >> I want to bring up another priority of Microsoft's and that is diversity. So that is another track here, there's a lot of participants who are learning about diversity in tech. It's not a good place right now, we know that. The tech industry is way too male, way too white. And Satya Nadella, along with a lot of other tech industry leaders, has said we need more underrepresented minorities, we need more women, not only as employees but also in leadership positions. Bev Crair, who was on here yesterday, she's from Lenovo. She said that things are starting to change because women are buying a lot of the tech and so that is going to force changes. What do you think, do you buy it? >> And I do, and here's where I'd say companies like Lenovo and Microsoft, when you talk about who makes decisions and how are decisions made, these are global companies. Big difference between a multi-national company or a company that's headquartered in Silicon Valley or Seattle or anything versus a global company. You look at both of those companies, they have, they are working not just to localize but have development around the world, have their teams that are listening to requirements, understand what is needed in those environments. Going back to what we talked about before, different industries, different geographies, and different cultures, we need to be able to fit and work and have products that work in those environments, everything. I think it was Bev that talked about, even when we think about what color lights. Well, you know, oh well default will use green and red. Well, in different cultures, those have different meanings. So yeah, it is, it's something that definitely I've heard the last five to ten years of my career that people understand that, it's not just, in the United States, it can't just be the US or Silicon Valley creating great technology and delivering that device all the way around the world. It needs to be something that is globally developed, that co-creation, and more, and hopefully we're making progress on the diversity front. We definitely try to do all we can to bring in diverse voices. I was glad we had a gentleman from Italy shouting back to his daughters that were watching it. We had a number of diverse guests from a geography, from a gender, from ethnicity, on the program and always trying to give those various viewpoints on theCUBE. >> I want to ask you about the show itself: the 30,000 people from 5,000 different organizations around the globe have convened here at the Orange County Convention Center, what do you think? >> Yeah, so it was impressive. We go to a lot of shows, I've been to bigger shows. Amazon Reinvent was almost 50,000 last year. I've been to Oracle OpenWorld, it's like takes over San Francisco, 60 or 70,000. This convention center is so sprawling, it's not my favorite convention center, but at least the humidity is to make sure I don't get dried out like Las Vegas. But logistics have run really well, the food has not been a complaint, it's been good, the show floor has been bustling and sessions are going well. I was talking to a guy at breakfast this morning that was like, "Oh yeah, I'm a speaker, "I'm doing a session 12 times." I'm like, "You're not speaking on the same thing 12 times?" He's like, "No, no it's a demo and hands on lab." I'm like, "Oh, of course." So they make sure that you have lots of different times to be able to do what you want. There is so much that people want to see. The good news is that they can go watch the replays of almost all of them online. Even the demos are usually something that they're cloud enabled and they get on live. And of course we help to bring a lot of this back to them to give them a taste of what's there. All of our stuff's always available on the website of thecube.net. This one, actually, this interview goes up on a podcast we call theCUBE Insights. So please, our audience, we ask you, whether it's iTunes or your favorite podcast reader, go to Spotify, theCUBE Insights. You can get a key analysis from every show that we do, we put that up there and that's kind of a tease to let you go to thecube.net and see the hundreds and thousands of interviews that we do across all of our shows. >> Great, and I want to give a final, second shout out to Cohesity, it's been so fun having them, being in the Cohesity booth, and having a lot of great Cohesity people around. >> Yeah, absolutely, I mean, so much I wish we could spend a little more time even. AI, if we go back to the keynote analysis then, but you can watch that, I can talk about the research we've done, and said how the end user information that Microsoft can get access to to help people when you talk about what they have, the TouchPoint to Microsoft Office. And even things like Xbox, down to the consumer side, to understand, have a position in the marketplace that really is unparalleled if you look at kind of the breadth and depth that Microsoft has. So yeah, big thanks to Cohesity, our other sponsors of the program that help allow us to bring this great content out to our community, and big shout out I have to give out to the community too. First time we've done this show, I reached out to all my connections and the community reached back, helped bring us a lot of great guests. I learned a lot: Cosmos DB, all the SQL stuff, all the Office and Microsoft 365, so much. My brain's full leaving this show and it's been a real pleasure. >> Great, I agree, Stu, and thank you so much to Microsoft, thank you to the crew, this has been a really fun time. We will have more coming up from the Orange County Civic Center, Microsoft Ignite. I'm Rebecca Knight for Stu Miniman, we will see you in just a little bit. (digital music)

>> Live from New York, it's theCUBE, covering AWS Summit New York 2018. Brought to you by Amazon Web Services and its ecosystem partners. >> Hello, welcome back everyone. This is theCUBE live in New York City for AWS Amazon Web Services Summit 2018. I'm John Furrier with Jeff Frick here for wall-to-wall coverage here for the one day event. Our next guest is TK Keanini, distinguished engineer at Cisco. Great to have you on theCUBE. Thanks for joining us today. >> Thanks, great to be here. >> We had some chat on before they came on camera about protocols, deep-packet inspection, networking. I see Cisco now, moving up the stack. I'm sure, back in the day when you were there and recently, that's been the big debate for Sysco of the stack but the cloud has created a whole new stack, right, so a lot of action. Seems like the same movie from a couple generations ago happening out in real time at a much more accelerated rate, welcome to theCube, what's your toughs? >> Thank you so much, yeah, you know, anybody who's been in this business for the last 20-25 years, I always joke and say, you know, same circus, different clowns. You know, it's the same thing again and it's exciting because I mean, you saw the keynote, the people here, everybody's excited about doing develop on this new thing. It's got new economics, new scale, it's definitely got more security, I think, and yeah, we're just really moving aggressively with our customers towards the future. >> You know, TK, I want to get your thoughts 'cause one of the thing we've been saying on theCube, we've been covering Amazon reinvent since 2012, 2013 timeframe and so we've seen the growth but it's always been a developer haven, you know, cloud native, you were born in the cloud, like most startups were back in the day, you had great goodness and then you could become a drop box and be so big you had to do your own data so I get that but for the most part developers check small, medium sized businesses, check now large enterprises, great developers. Now, you're getting clear visibility on operators. So the confluence between operators of networks and infrastructure and IT operations merging together and having some synergy and cohesiveness with developers for applications, new work loads. What's your thoughts on that because this is really becoming the big ah-ha moment where I can now operate now at a level and have a developer haven going on, your thoughts? >> Yeah, no, so I think you heard it in the keynote today, security is everybody's problem, right? And it certainly is the developer's problem, it maybe even starts with the developer. You know, threat actors are clever, you could say that threat actors were the first to go cloud first and they're not ashamed of what they use, they're going to get what they want and so you know, the idea of providing security as a service to those developers is a new thing I will say. Usually I'm building product and service for the security expert. Now, it's this web app developer, right? And their first question to me is "where's the API?", right? "Where's my libraries", right? How can I treat you like I treat storage, like I treat networking? They don't want to grow up and become a networking expert, they just want to have their application scale and so that's the real focus is, understanding the customer and building that service at the highest quality. Much of the expertise, I have to mechanize inside of my algorithms and my machine learning but again, delivering them a service so that they can protect and become incredibly expensive for those threat actors to pursue. >> And the alternative in the old days was provision a lot of hardware, do a lot of configuration management, security audits, meeting, put up a perimeter, now you can create sets of services. >> Yeah, and a lot of automation, right? That's key. Like, you don't have enough people to test. You have to automate your tests. You don't have enough people to read over documents, you have to automate that acquisition. Everything's about augmentation and automation. Security, all aspects of security are following suit. >> Yeah. >> TK, I wonder, you talk a lot about the threat-act revolution, through some other interviews and that's really an recurring theme because it's kind of your way of saying how you have this kind of have this arms race but the other big thing that's happened in the threat act is that it's gone the hacker, maybe trying to cause a disruption to nation states and much more organize. Is that as evolved in the amount of resources that they now have to deploy versus just some stand alone hacker? Have have you seen that evolve, what are some of the responses? >> Yeah, I still get goosebumps thinking about it. 'Cause back when we started it was more like, you know, we were just sharing a craft, you know. It was a lot like amateur radio, you know? You broke into something, you shared that skill, not anymore. I mean these are real, a nation state, threat actors, criminals and they're running a real business, okay? >> Right. And if you do really good security, you're essentially adding to their cost of operation and they don't like that. So it is really a business against a business. And they think like a business. They're well resourced like a business, they're patient and sometimes you know, in certain cases going after the weak, in some cases they're incredibly targeted, they're coming after you because you are a center of excellence for that sector and it doesn't matter, you know, how high you build the wall. They're going to find a way to go under it (laughs) or go around it or find a way to declare no wall but yeah, it's fun because like I said, instead of waiting for something to fail, like a hard drive or you're just building IT systems for resiliency, in my world, these threat actors are talented. >> Right. Right? So everyday if intervene, I force them to intervene. If they intervene, they force me to intervene. That's funny you say they're running a business, so is that part of your defense is just increasing their cost of goods to hold in a major, major way? >> It really is, you know, we've seen a lot of trends shift. For instance, you know, Ransomware a little while ago, that was a big deal because you know, they'd hold your machine hostage, it'd cost you $200 maybe $300 to get out of it, okay? The problem with that is tomorrow their gig's up, okay? Now the shift has been to cryptomining or cryptojacking. If they compromise your machine and can get a quarter out of that machine just by doing Bitcoin mining, they will essentially make 25 cents tomorrow, so they've shifted to a recurring revenue stream, okay? This is important, okay? >> Right, right. >> Because tomorrow and the next day and the next day, they're still undetected, okay? And when I say about raising their cost of operations if you can find that cryptomining on your network, no matter where your network is and shut them down, you've just taken a little bit away from their recurring revenue stream, right? And that's the dynamics we're facing daily. >> Disruption is key. Making it complex and keeping disruption. >> Having more visibility than they do, having more detection than they do and basically knowing yourself better than they do. >> Right. >> Is absolutely critical. >> I want to hear your thoughts, TK, on a couple things. One observation is you know, during the Snowden era, you know, the mainstream population and world whether it's capital markets or IT, didn't talk much about "metadata", but then after Snowden, "metadata" became a big thing and we now know what metadata is and now obviously with the Russian involvement in the election, spearfishing is now, I mean its been out there, but you're seeing specifically what was done there with spearfishing, so easy to pull off. >> Yeah. >> How are we getting better at detecting, preventing, against the humans who just think oh hey, a job offer for you, or a real elegant bait and certainly with mobile, doesn't have that DNS visibility, mobile makes it easier to do some spearfishing. Spearfishing is a big deal. >> Yeah. >> Your thoughts on it? >> Yeah, and that's again, that big trend in shift is a long time ago, you know, we built security systems to watch for people breaking into networks. Today, the threat actors are logging into your network 'cause they've already gotten your credentials through some means, okay? So how do you detect somebody who's actually impersonating you on the network? The same sort of security bells are not going to ring. And this applies for a cloud or on pram, or anything. >> Right, right. >> It's the same game and really, you know, being able to do that detection from the telemetry that comes native from then environment is critical. >> And so really just more analytics, more telemetry, more instrumentation? >> It's not about the data, it really is about the analytics. I mean, yes the telemetry has to be necessary and sufficient but the analytical outcome has to be pointed at exactly that, you are trying to detect fraud, you are trying to detect. You know, it's like in the old days, if I gave you my general ledger, right, and you were an accountant, you would just be looking for errors. Okay, that's fine for operation but say you're trying to cath a crook. I hand you that same general ledger, you're going to come at it with a different pair of eyes. >> Right. >> A different mental model. You're trying to find the crook. >> Right. >> Who is actively hiding from you. That's the type of analytics we're focused on. >> So this is interesting, talk about machine learning, and AI could be assist you mention, automation, Stealthwatch Cloud is something that you've mentioned. What is that, what's going on around there, how do you get that lens to be turned on quickly in context? 'Cause real time is about contextual relevance. >> That's right. >> At any given moment you've got to be ready alert and looking for things. >> So the beauty of AWS is they can deploy in any one way. You can have your virtual servers, you can have the containerized, or you can be serverless. That's the thing, the cool kids are doing serverless, okay? >> Right, right. >> You have to provide the same level of threat analytics for all three, no matter what. The good news is, it's not about not having the data. AWS gives you a rich set of telemetry from many, many sources. What we do is first synthesize all that together, run our analytics on it and point out where you may be exposed or there are threat activities that's either, maybe even from the inside, not necessarily from the outside, you know, in your Snowden account but there's anonymous activity that requires attention. All of those things, all that developer wants to do is make sure that they you know, delivered to their customers. Business continuity. >> Right, right, yeah. >> They're not interested in security. >> TK, I've got to ask you the question around security around you know, can you see the papers, so you know, Pat Gelsinger, Cube alumni, now CEO of VMware, said on theCube, Dave Vellante co-host theCube, asked him years ago "is security a do-over with the cloud?". This was back when the cloud was being poo-pood as a security mod, oh it's not secure in the cloud, now it's looking damn good, right, so. >> And now it's more secure, I think, yeah. >> Now it's more secure, and yeah, that's pretty clear. >> Yeah. >> So there's a chance for people to get a mulligan, get a re-do, to rethink security. How do you engage conversations and how do you advise friends, colleagues, customers around if there's a chance to do security over, with a no-perimeter model, with a API microservices centric view. Whats the strategy, what's the architecture, what's the approach? >> Yeah, you know, I don't know, there's a couple of cases, it's not a one size fits all. We have a lot of successful businesses transitioning and they really can't turn their back on yesterday, you know, they have to bring that transition forward. >> Right. >> So there's that one crowd and they're going to have a different playbook because they have a set of skills and a set of things that are different. On the other end of the extreme, you have businesses that don't know on print, I mean, honestly, they were born in the cloud and their cloud made it. >> Yeah. >> And then you have most of everybody who is in between, you know, hybrid, multi-cloud, they're just doing, but functionally they're all trying to achieve the same thing which is, you're trying to get the elastic economics, you're tying to get parts of their business that elastic to that elastic compute, right? But all-in-all, the treat actor doesn't care whether they come in through your mobile device or through that cloud workload, they're after something very specific, which is, there's something in your organization, in your digital business that they want. >> So a couple of thing I want to follow up with. One is kind of the changing world of identity and security because of firewalls and you know, the walls have got to come down, they've got a lot of holes in them. You know, so much more focus on who are you? But to your point, oftentimes they're coming in as you, so the identity maybe not necessarily is a great way. >> That's right. >> Then you've got this other thing which is basically pattern detection, right, and online detection, right and we hear over and over that the average time to know that you've been breached is months and many, many days. So, how are you kind of factoring in those two things to do a better job? >> Yeah, and it is accretive, meaning there are net new ways of establishing identity. For instance, you know, if this thing is acting like a printer and its acted like a printer for the last ten years and one day that device gets up and starts checking out source code, that's a problem, (laughs) right? Okay, so there's all these sort of things around novelty and around the dimensions of novelty. It may be a volumetric novelty, it might be a protocol novelty, in serverless, I'll give you an example with serverless. We treat serverless as a first-class object, as if it actually was persistent and if it makes a very novel API call that it never did before, I think you should probably know about that. >> Yeah. >> If it starts to exfiltrate 20 gigs of data and never did that before, you probably should take a look at that, right? And these are all things from a DevOps standpoint, they want to know first, certainly. You know, there really is no excuse in cloud for you to be like "oh, I wouldn't have been able to know that", no, you can, 'cause it's all there. >> Right, right. >> And microservices in containers provide great value here. >> Incredible value, incredible value. And just again, that dynamic nature of that orchestration, you know, that orchestration brought us to basically a way where, you know, me as a developer, I used to know exactly where I was going to run and how long I was going to run and everything. I have no idea where my code runs anymore, right? And that's the case here and so security takes a completely different turn there because a lot of things that in your analytics were things that you needed to persist, those things are gone, everything's ephemeral now. So what if I wanted to run a report for ten years? Like what in that ten years stayed the same? Probably nothing, okay? So you actually have to use a lot of algorithms to say that heres a composite type of set of data features and if these things persist over time, it's kind of like the way humans work. >> Right, right. >> TK, great to have you on theCube, thanks for joining us, thanks for sharing your insight. Real quick, you're giving a talk for Cisco here? >> Yep. >> Which you're doing in a, working the hallway, give an update. >> Come join me at five o'clock, I think, it's going to be on self-launched clouds, so it will be a great talk. >> Self-launched cloud, again, thanks for coming out to Cisco Systems. >> Alright, thanks. >> And of course we're covering all the Cisco action at DevNet and Cisco Live just recently and DevNet create the cloud native portions of Cisco, and we're going to dissect TK here on theCube. Breaking it down, I'm John Furrier with Jeff Frick, stay with us, we'll be right back.

>> Announcer: Live from Copenhagen, Denmark, it's theCUBE! Covering KubeCon and CloudNativeCon Europe 2018. Brought to you by the Cloud Native Computing Foundation and it's ecosystem partners. >> Welcome back, everyone. This is theCUBE's exclusive live coverage here in Copenhagen, Denmark for KubeCon 2018. I'm John Furrier with my cohost this week, Lauren Cooney, and our next guest, Ed Warnicke, distinguished consulting engineer with Sysco Systems, CUBE alum. Great to see you, welcome back to theCUBE. >> Good to be back. >> So great developer action, end of day one. We're going to be here all day tomorrow. So day one's kind of coming into the books. Your thoughts on what's happening here. Different crowd but active. >> No extremely active. Actually, one of the things I've noticed, and this is sort of a subtle point when you've been around a lot of open source projects is you have a lot of people who are new to the Kubernetes community are coming in. And one of the things I found extremely heartening is, they've got a really organized approach to it. When they did their developer summit, they had an entire track for bringing new contributors on. They've just revamped their documentation to help people that are here, and they're finding better and better ways to articulate the things that people need to hear to help them make the leap to Cloud Native. 'Cause one of the underappreciated things about Cloud Native is that it's different from the move to Cloud 1.0 that we made a few years ago, is that Cloud Native is not a lift and shift behavior. You have to change the way you think about doing your job. >> And that's the global platform. This is not just a transformation process. It's a lifetime transformation. >> Absolutely. >> Huge personnel issue. People process technology, technology last one. >> Ed: Have you accepted Cloud Native into your heart? >> I have come to terms with my-- (Ed laughing) lift and shift problem that I have, and I'm now aware, self-aware of Cloud Native. >> The first step is to admit you have a problem. (John chuckling) The making amends to your infrastructure takes longer. >> I mean, look if-- >> And you would know, so. (laughing) Well, anyways. >> We're all working on it. >> So, I have a question for you here. As you were talking about how you're seeing a lot of new developers coming on in and things along those lines. I'm also running into a lot of new developers at the hotel, at dinner, just walking around and having discussions. Where do you see these guys coming from? I see them coming from banks, from large technology companies that are based in Europe. Where are you seeing these folks? >> So that ends up matching very closely with what I'm seeing as well. From all over the place. From people who finance large energy projects, right? From all areas of finance. Basically, all the sorts of people who have big compute problems are starting to turn up at the Cloud Native world because this is literally where you solve those problems. And I think that's part of what's driving the ecosystem is, the folks in Kubernetes made a number of incredibly intelligent decisions early on about how their architecture was built in terms of the modularity and expandability of it. And the result is that you get lots of people with lots of energy coming in saying, "I have a problem like this." There's an obvious well-worn path to try and put together a proposed solution for solving problems like this. And they engage with the community. One of the things that you're seeing just in terms of how the community grows itself is, they've got special interest groups, SIGs for various areas in Kubernetes. They've now had to spawn working groups that come under them. You're just seeing things like Kubernetes proposals for how you're going to do things coming to far. So there's a lot of the maturity process that you expect to deal with the scale of people who want to solve their problems this way. >> So you're actually not seeing sprawl. You're seeing highly organized groups coming together in a way that can make the platform more positive. >> Yeah, absolutely. Not only am I not seeing sprawl, but I'm starting to see highly intelligent things being said by the people who work at what we think of as the core of Kubernetes. So I've heard a number of people make the comment that they expect the Kubernetes core to actually shrink in terms of what it offers because the broader ecosystem is picking up so much of the slack. So this sort of core APIs of, this is what is Kubernetes without having picked out some options that meet your needs, is keeping itself very tight while having architected it in a way where you could have this broad ecosystem without the kinds of problems you sometimes get with sprawl in other communities. >> So whilst you want to get bigger, but you've got to get smaller to get bigger. >> In some sense, yeah. You have to decide what's really important to get right in the core and really nail it. >> What are they getting right, in your opinion? What's right about it that's going on? You mentioned some of the smart decisions that they're making. >> So, a couple of the things that they've gotten really, really right are our relentless focus on developer needs. So I see this particularly in networking, and I think we've talked about this before. Developers don't want to know about subnets. They don't want to know about L2 segments. They don't even want to know about IP addresses, frankly. What they really care about is two things. Reachability and isolation. Everybody can talk to everybody unless they decide you should be isolated. And service discovery and service running. Those are the only two things they care about, and wouldn't you know it! In Kubernetes, you have network policies that control the reachability and isolation and services that do services discovery and service routing for you. So they've absolutely nailed the fundamental developer needs. >> Made you pain point. >> Yeah. >> So what's your take on just the ecosystem. Obviously, we've commented, and this is always a dangerous game with communities, is logo farm, everyone's here, right? >> Yeah, I mean, they took the CNCF logos and probably, I think they broke them into three categories now. I'm not exactly sure what that means. >> John: A whole new sponsorship level for-- >> Architecture? I'm not sure. (John and Ed laughing) But, Ed, maybe you could provide some clarity here. >> Well, I mean, there is a certain risk in being loved to death, right? Kubernetes is full blown into what I will sometimes call crises of success, which is, you are succeeding so wildly that it's beginning to be a problem. And that's good to see. But I think you're starting to see certain categories of things that are emerging. And there was a good set of readouts from the various SIGs to Kubernetes yesterday in the developer summit. So you've got a bunch of stuff around networking. You have a bunch of things around storage. These are sort of fundamental infrastructure issues. But you have a bunch of things, literally, about how so we expand the Kubernetes platform. How does that work? How do we produce the constructs we need to solve the various problems that are arising, and those things are all sort of progressively moving forward. And we're getting to sort of the interesting point where the people who did the original turn of the APIs are being really blunt and honest saying, "Look! "These are the things we got right, "and these are the things we got wrong." And there's a lot to be said for having that level of honesty with yourself on stage in public, right? When you're the guy who wrote the code, it's unequivocally your mistake. And being able to stand up and say, "Look, "we got this one wrong." >> But that's the community trust that you have, and that's what makes the community. >> And that trust goes both ways. It's the trust of the community in that leader standing on the stage, but it's also the trust of that leader that we're going to move fast, we're going to do things right, but there's always a turn of the crank to do things better. And we got to be straightforward about that. >> And their self-awareness around the iteration is key. They're putting their egos at the door, checking it at the door, focusing on the advancement. I got to get your thoughts, from both of you guys, I want to ask you guys both a question. I know that you're doing a lot a work with some start-ups, and you with Cisco, the big company. What's interesting about this ecosystem is, the balance between the big players and the enablement for the small start-ups to be successful. We had a variety of start-ups here with news on theCUBE. This is the give get between sharing in projects where there's a balance and everyone can thrive and survive and grow together. Thoughts on that balance. Start-ups have needs, but they're not as big as the big guys. So what's your thoughts on-- >> Why don't you start, Ed. >> Well, to begin with, we can't do everything much as we would like to. Back to the self-honesty, you have to be honest with yourself about that. And nobody has a monopoly on the good ideas. And so you really have to engage with the ecosystem and figure out how different aspects of the problem knit together. I've had a lot of interesting conversations. I, personally, have some interest in what I sort of call unified IO. So converged networking storage. So I'm talking to a lot of folks who are doing storage stuff, lot a little start-ups that are doing really cool things with storage about things we can do to help them there from the network side, and they're excited about that, right? And it's that, that's the sort of open source spirit that makes it possible to have all these start-ups because, I'll be really frank, most of these start-ups, if they were having to try and build the thing themselves, they're simply not resourced to do it. But with so much support from the community in the broad, on a relatively thin start-up budget, you can move mountains. >> Yeah, if you tap the formula properly, that's the key. >> The start-ups are getting more and more sophisticate about tapping that formula because only... Getting a good product is only a very small part of the equation. You also have to get the connection with the community because you have to make sure, even if you're entirely self-interested, if you build a thing, there will be a thing in the open source that does that. And it is a fundamental truth in the modern era that 80% of the value or more of all software is its connection to everything else in the ecosystem. >> Lauren, I want to get your thoughts on this. You're doing this now as a new start-up, you're a founder of and running, but you've built programs. Modern architectures at play here. You're seeing microservices growth phenomenal. Cloud Native is just whole nother ball game, going to a whole nother level. As you're engaging out there, what are you seeing for this modern community formula playbook, whatever you want to call it. There's a way to do things now at a whole nother level that this is going. >> No, I-- >> Your thoughts. >> I definitely agree. I think the developer experience is really key, making it simple, making it just seamless, right? So folks don't have to wait to download something, or they don't have to wait for, you know. They can just click a couple buttons through a GUI and make it really, really simple, especially those on-boarding. What I see from the start-up side is a lot of... This is interesting because I think it's important. A lot of start-ups coming from companies that wouldn't allow them to do open source inside the companies. So they're leaving these larger companies, and they're doing start-ups. They're raising pretty good capital for seed rounds and A rounds. And I think, this is something that's pretty hot right now and we want to take a look at. And the VCs are definitely looking. >> What about the big companies that we all know, obviously Cisco, IBM, you see Amazon here. They have huge scale. Even Microsoft has had developer programs been successful over the years, we all know that. What's the modern tweak that they're making that you're seeing work? >> Oh, I think it's the small teams. Adrian was on here earlier talking about microservices and micro-teams, and I think he's absolutely right. You have to have teams that are building these services that are moving quite quickly and doing it in a way that's rapid enough to keep up or be ahead of the market. >> The micro-team point, I think, is actually really apropos because... This is going to sound very engineering propellor-head, but the management overhead gets to be quite steep when you try and do anything with big teams, right? So you got to have very loose coupling to everything else in the system, which is exactly what Cloud Native is about. And that's what you see not only in the start-ups but you see these sort of hybrid approaches emerge, where you have a start-up that has a small team and another start-up that has a small team that's nearby and a large company like Cisco that has a small team, and there's an interaction between all of these. And we're sort of operating as the growing up of this larger team completely across boundaries. It'll resolve actual user problems. >> I think it's a historic time. I think you guys are right on. This is such an exciting time for, if you're an engineer, software developer, or anyone in large-scale systems, and building applications is going to a whole nother level. Look at blockchain right around the corner, decentralized applications is coming soon. We won't go there in this interview 'cause it's KubeCon, but I got to get your take. What's your view so far of what's working here, hallway conversations you're having? What are some of the things going on here that someone who's not here might want to know about? >> I tend to be very focused on networking things, so the thing that I'm most excited about that's happening here is, the entire world seems to be getting meshy, right? So there's a huge excitement around service mesh and Istio, which I think is extremely well-placed. The fundamental thing that's really happening there is, they're progressively taking parts of the problem that you're not good at if you're writing a microservice, and they're pulling them out into a sidecar envoy so that you don't have to worry about service discovery and service routing. You don't have to worry about the policies for how you're going to figure out what things you do about getting to the next guy in the chain of the work. You don't have to worry about even things as simple as making sure that you respond to faults well, right? And there's a whole new set of ways that you think about problems in this space that's emerging there. One of the things that I'm actually really excited about that's also meshy is when you get to things like people who have less common network problems. So the operators with NFV, people who have more sophisticated network needs. We're starting to reimagine that stuff in the language of service mesh, right? So rather than trying to force all the legacy thinking about networking into Cloud Native where it's not wanted, we try and recast the problems we have into Cloud Native ways of thinking about them. And I think that ends up being intensely powerful. It's, frankly, almost overwhelming because there's so much conceptually going on in this space that you want to be able to draw on for the palette for the things that you're painting. >> Yeah, I mean, it's your point earlier about, and you were kind of joking but serious. This is a mind melt, you got to buy in to the philosophy of this new era of... (Ed laughing) Yeah, just kind of buy into, the Cloud Native is a global platform. It is a fundamental new thing. It's not just a methodology, it's a new way. >> It's a new way of thinking about things. The C in Cloud Native does not stand for container. Container is the smallest possible chunk of this. If you just slap all your applications into containers and try and do a lift and shift, you're going to fall on your face really hard. >> John: In what areas? Just like, what? >> Well, I'll give you a really simple example. Let's say that I have an application that I'm running in vApps, right? And I've got my big database VM. I've got my big web front VM. So I pick them up, I containerize them, I drop them into Kubernetes. So I've got one replica of my database VM and one replica of my web front VM, and that's going to break sometime in the first 24 hours. Because I need to, basically, pick them up and say, "OK, I need a bunch of replicas that are dynamically coming up for all of these things. I need the services to wire mesh them together." So for whatever reason, I lose some number of my replicas, that everything comes back up and goes forward and we never even notice, right? In some sense, the ideal situation is, you have a major bug in your code, right? Let's say you have a piece of code that's leaking memory and it dies every 24 hours. You want, if you think about it right and you deploy it 'cause you don't know you have this bug, you won't even notice that you screwed up that bug because the infrastructure will protect you from it. But if you just try and lift and shift, you're not going to have a happy experience because it's not going to work the way you expect it to. >> And then monitoring tools are getting better, too, and so if you're coming in on the other side you get that. Well, and thanks so much for the commentary. Great, great summary of the event. Any surprises here for you? Any ah-ha moments or revelations or epiphanies or any kind of surprises, good or bad or ugly? >> One of the things I was very impressed with is, I'm very impressed with what you can do with no code. I don't know if you saw that keynote this morning. >> Lauren: With Kelsey. >> In response to Dan Kohn's point about all the sort of total attack surface area. Kelsey got on stage and did the no code project, which has perfect security for whatever it is that you deploy it for. The fact that you can get on code, do something like that, move an entire audience of thousands of people, that's impressive. You don't see speakers who do that very often. That was, I wouldn't say shocking, but very much a pleasant surprise. And it speaks very much to the code of the community. The keynotes today were some of the best I've ever seen. I am not a keynote person, I seldom attend them. The keynotes today were extremely well-done. They had good energy and they were relevant. The walking through of the evolution of the community in brief punctuated explanations of what's going on and why they're important, I've never seen it done better. >> Yeah, they were hitting their marks well. Well, great, thanks for coming on, Ed. Great to see you. >> Yep. >> Thank you, Ed. >> This is commentary from Copenhagen, Denmark. It's theCUBE coverage of the CNCF, Cloud Native Compute Foundation, part of the Linux Foundation, KubeCon 2018 in Europe. I'm John Furrier, Lauren Cooney. Thanks for watching. Be right back. (electronic musical flourish)

>> Announcer: Live from Washington DC, it's theCUBE covering .NEXT conference. Brought to you by Nutanix. >> Welcome back to DC everybody. Welcome back to Nutanix NEXTConf. This is the leader in live tech coverage. My name is Dave Vellante. I'm here with Stu Miniman. Rich Napolitano is here as the CEO of Plexxi. Good friend, long time CUBE alum. Great to see you. >> Great to see you guys. Pleasure to be here with you again. >> Yeah, so you know, I love the fact that you're back in startup land. I mean, you did unbelievable things at EMC, but really this is your real love, alright, runnin' startups, you know, eating glass as we call it. So, when we first heard about Plexxi, I have to admit, Rich, we were down at Strada that time and it was kind of heavy and really geeky. I'm not a networky guy. You've really done a great job of sort of transforming the messaging and the company's vision. Share with us what's up with Plexxi. >> Yeah, I know, again thank you for inviting me here and it's a pleasure. It's an exciting time for the company. You know, we're actually breaking out, right and so it's great to see the momentum. And, the team has done a fabulous job. The challenge in the early days is, you know, you have the technology and you're trying to establish your product market fit and we've done that now. And so, it's exciting to be at this important inflection point, you know, tremendous revenue growth this year. You know, we could probably be profitable if we want to be this year which there's not many startups that can say that. And, what's happened is fundamentally we really connected now what we have built, our technology to the ping points in the marketplace and we have, you know, deep deep clarity and understanding of that now. >> So, talk a little bit more about the sort of value proposition and kind of why you guys, why Dave started the company and why you joined, what you're all about. >> Yeah, so we're building the next generation networks. We're not building additional networks and so we're very focused on the next era of computing, you know, third platform, you know, and scaled down infrastructure, cloud, where the requirements on the infrastructure are very different. You need to just build a much more agile and flexible infrastructure. You know, the choice the public cloud is there and it's going to be there forever, but how do you build an agile infrastructure for private and for hybrid infrastructure? And, what we've realized, and Dave realized this early on, is that the networking architectures haven't fundamentally changed in a very, very long time. And, you know, there's an emergence now, and this is what we've really learned in the last two years, there's an emergence of this other data center network. You know, Sysco has been dominant and done a phenomenal job in traditional data sending networking, but there's this emergence of this other network and we now we call it by a name, which is the Hyper Converge Network, HCN. And so, in very simple terms, what is Plexxi? Plexxi builds the HCN for the HEI infrastructure. >> Okay, Rich, you're just going to have to unpack this a little bit so, you know, people in the networking world will be said, we understand that it was a lot of the east, west traffic, the traffic between those, but you know, architecturally you know, we kind of got rid of the sand and now we've got this distributed software model that I've got these nodes, so where was the gap that you were lookin' to fill and you know, does Nutanix understand that this was a challenge? >> Those are all great questions and very relevant to the challenge. So, when you really look at the problems we solved, we start, we pull it up to the top for a second and we've learned a lot about this the last couple of years. What people want is simplicity. They don't want complexity. And, we built a lot of complexity into every layer of the infrastructure. Everything from the applications to the operating environments, to compute, to the storage and to the network. And so, what we really bring to the marketplace is a much simpler approach to deploy infrastructure and we do that by simplifying the network dramatically. So, and we do that by having a software definable network that's built out of industry standard components. So, Plexxi really brings three things to the table. We figured out how to build this very elastic and agile fabric to allow you to compute storage, allow you to connect storaging a few things together. And, we do that on white box switches and that's dramatically reduced our cost point and is tremendously simple to deploy, but on top of that, we built our software abstractions. And, it really is the key to us is really our software control and our integrations into operating environments. So, what we bring to market is an integrated solution with a set of switches that build this fabric, but our software controller allows you to provision this network seamlessly in the same way that Nutanix talks about being the invisible infrastructure, we're the invisible network. >> So, when Nutanix first started they were like, we're going to kill that sand 'cause you don't need some of that complexity, so when do I need this you know, fabric as you call it, as that interconnected tissue, you know, what size customer, you know, what kind of challenges does that, you know, really knock down. And So, if you're living within a rack you don't have any of these problems really. Right, I mean our integration into Nutanix is so sophisticated now that even within the rack we dramatically simplify your network provisioning so even within a rack our value proposition of simplicity and ease of use is compelling. We make the network invisible in that context. So, as you provision your VM's or your storage in a Nutanix environment, the network comes along. The value proposition just is most compelling as you go to second, third or more racks. Some of our biggest customers deploy us in tremendous configurations, you know, 10 racks in 10 rows, thousands of servers. But, we can start as small as you know, one or two switches. And so, the value proposition really is, how seamlessly can you build your infrastructure, in other words, can you make the network invisible in these infrastructures? And, that's exactly what we do. >> You have this picture in your booth, these things that you're handing out, and it's really simple. You got the old way which is storage, server and networking all that complexity. Nutanix, really kind of attacked the server and storage piece, brought those together, connect to the network. What you guys are doing is collapsing that complexity even further. Is that right, so what does that mean for a customer from a scaling standpoint? >> So, if you look at the three tier architecture as you talked about, then we're maxing multiple networks. And, the first thing anyone does whey they deploy converged infrastructure, hyperconversions in particular, is they eliminate the SAD. So, that was another network, we just never really thought about it that way. And so, effectively what we do is we allow you to have the properties of a SAD on your network. So, for a storage guy, notions of like Fibre Channel zoning are inherent now in our IP oriented network. Our network is very low latency because of our architecture. So, as you scale your latency is constant as you would things like NVME, our latency is extremely low. It's not a multi tiered network, so you don't have the complexity of building a multi tiered network as you scale your converged infrastructure. The benefit of hyperconversion is that you can deploy these racks of infrastructure and easily deploy them. The challenge is that if you don't attack the networking problem you still bump into that as you deploy this infrastructure. >> That becomes your new bottleneck. >> It's your new bottleneck for performance, but it's really for administration. And so, our integration layer ties into Nutanix and makes us aware of Nutanix operating environment, its file system, when nodes are being added or removed, when you're doing STApps or backups, et cetera and the network is shaped in the context of that application called Nutanix. It'll do the same thing for VMware. >> And, when you say it's tied into Nutanix, is that you know, the Nutanix the kind of the software between nodes is also things like AHV. Do you have awareness of that? >> So, AHV or VMware and PRISM, so you know, our management console can be launched from PRISM now so you can seamlessly have an experience. You can't tell when you're really in Nutanix or when you're in Plexxi's management domain. But, more importantly, we're aware of when nodes are added. We understand if you're rebuilding your underlying file systems, et cetera, as the requirements on the network shift, as you add more workloads, as workloads move, as applications move on the infrastructure and you need more compute over here or more storage there, our network adapts to that. >> So, explain how this is different than, just say, Nutanix bringing its platform and partnering up with UCS, for example. What's different about what you're doing? >> So, we're, for one thing, we're only the network, right. And so, the compute infrastructure, we don't do that. We don't do storage. We don't compute. And so, we're just a network that is really, think about it as the fabric for compute and storage as opposed to a data center network where you connect, you know, your printers and your desktops and your infrastructure for your, you know, multiple sites, et cetera. That's the kind of Sysco, if you will, network. We're this embedded network in these hyperconvert solutions. Put one or two switches in your rack and as you pump out this converged infrastructure you just scale that fabric seamlessly. And, it's so well integrated inside of Nutanix you don't even realize it's another network. It's just embedded in the infrastructure. >> So, sorry Stu. From a buyer's standpoint, do I get to eliminate some other or limit my growth of my traditional network or do I have to throw that out and bring this in? >> So, we're totally compatible with existing networks. So, what you do is you do two or three things. We can insert into existing networks without modifying them, but you don't need to keep adding top rack switches and spines to your existing network because our, most of the traffic stays on this other network. The Nutanix guy, sales teams, are actually starting to call this the Nutanix Network or the Nutanix Fabric because it's embedded in their solution. So, most of the traffic between Nutanix and those goes on that network which minimizes your northbound traffic to your existing network which just frankly, removes a headache from traditional network admins to deal with this other stuff. And, that same way the network admin in the past didn't worry about sand traffic. You shouldn't have to worry about this other problems too. >> So, Rich, it's interesting, talking to Nutanix customers you're right, smaller customers don't have networking issues, some larger customers it depends on how good their network is. The thing coming on the horizon that's going to dramatically change this embedded network thing is got to be NVME over fabrics, so what does that mean for Nutanix standalone and you know, I got to think that that's a huge tie to bring you into a lot of accounts. >> I mean, it is clear that the next tsunami, I mean you know, we were all involved in the early days of Flash and we saw that coming when we were at EMC, you know, I probably saw more Flash than anybody in the world actually, in terms of petabytes actually. And, NVME is that next wave, right. So, whether it's embedded in Nutanix or it's standalone bricks, you know, it's going to elevate the, this east, west, this need for this other network and you know, to pitch Plexxi a little bit, there's no better network that's tuned for this. The nature of our network is it's flat, it's extremely low latency, so we're actually awaiting the day that, you know, NVME hits the market in a big way because it will blow apart every other network, every hierarchal network will just be blown apart because the latency characteristics of a multi tiered network are just, are just clear. You can measure it. Also, we're doing a lot of stuff like that. >> Are any of your solutions ready for this today? >> We're ready for it. >> And, when you simplify the network like that, the entire infrastructure, and you provide that infrastructure with virtually no latency impact, now you can start to see the way in which application development changes and, you know, everybody's talking about digital disruption and how they going to pay for it. They're going to pay for it by, I would think, shifting labor resource from non-differentiated infrastructure to some of these more exciting areas. We've just heard that from two CIOs. >> We see this a lot. Telecom Italia is here with us. Sparkle, one of our bigger customers, we have a session this afternoon at 3 o'clock and Sparkle's going to be in the session with us and I just met a good hour with them here. And, it's all about the operating expense. It's like, Nutanix plus Plexxi reduces my operating expense and he's going to repeatedly say that. And, it's just clear that people cannot afford the complexity associated with traditional networks anymore. They can't hire programmers to build out, you know, not to pick on ACI, but complicated scripts for ACI, they can't afford to build those programs. Our integration layer makes that seamless, it takes it away. >> So, what's your relationship with Nutanix? You're obviously doing some hardcore integration. How do you describe the partnership and do you have other partnerships that you can talk about? >> So, right now we have a number of large scale, service provider customers we sell through distribution and other partners. We're partnering a lot with Nutanix now, a little bit with SimpliVity, but we're going to go after all of the HCI vendors ultimately. But, pretty clearly Nutanix is the leader and we've been developing a relationship at the top and in the field and parallel we've been recruiting Nutanix partners. AERO's our master distributor, so we're recruiting AERO partners that sell Nutanix and we're building a set of solutions. We announce our reference architecture this week with Nutanix, so we're very focused on Nutanix. They're clearly the leader in this space and they get our value proposition. Invisible infrastructure meets the invisible network. I mean, it's perfect. >> You mentioned before you could be profitable if you wanted to be. It's kind of, it's not in vogue to be profitable, Rich. People want growth, but you know, hey, this booming market's not going to last forever. >> Timing's different, timing is different. I think, actually I think it plays to our strength that you know, I looked at our financials a couple of weeks ago and I realized some about 80% of all that we've spent has been in R and D, and that's not common. Most starters at this stage have invested a lot more in the go to market and now's our time to go do that, but we have, now we have the advantage that we have such tremendous revenue growth that we can fund a bunch of it ourselves and the capital markets are different than they were two or three years ago when Nutanix was growing. So, I think it's prudent for CEOs now to be just more, more capital efficient because the markets are different and I think we're in a unique position now given all of our growth. >> Well, Rich, congratulations on the early success. We know what you're capable of. We'll be watching. I really wish you the best. >> My pleasure, thank you. >> Alright, keep it right there everybody. We'll be back with our next guest. This is theCUBE. We're live from Nutanix, NEXTConf. Be right back.

>> Narrator: Live from Austin, Texas, it's The Cube covering DockerCon 2017 brought to you by Docker and support from its ecosystem partners. (upbeat tech music) >> Hi, I'm Stu Miniman and this is SiliconANGLE Media's The Cube. We're the worldwide leader in enterprise tech coverage. Happy to be coming to you from DockerCon 2017 here in the Austin Convention Center of course in Austin, Texas. My host for the next few days will be Jim Kobielus, Jim thank you so much for joining us. >> It's great to join the team. >> Alright, so we'll get to you in a second, Jim, but first of all, it is the fourth year of the DockerCon show Docker The Company, just celebrated its fourth year of existence, CEO Ben Golub started off the keynote Founder, CTO, Chief Product Guy, Solomon Heights, introduced a bunch of opensource initiatives, did a bunch of demos, the first DockerCon event back in 2014, I actually had the pleasure of attending, was my favorite show of that year, I got to hear some of these HyperScale guys talk about how they were using containers, how Google spins up and spins down two billion containers in a week and there were about 400 people there and Docker, the company, was 42 people. Fast forward to where we are today in 2017, Docker, the company, I believe is 320 people, there is over 5,500 people here, you can see 'em all streaming in behind me here as the Keynote just let out, so, we've got two full days here of coverage. This morning, we're going to go through a little bit of the news, talk about who we're going to cover, but first of all, I want to introduce you to Jim Kobielus, so John Furrier sends his regards to the community, he's real sorry he couldn't make it out, just had some things came up at the last minute, so he couldn't come, but stepping in for him with lots of knowledge and experience is Jim, so Jim, please, for our audience that hasn't gotten chance to see, you did some intro videos with our crew out in our 4,500 square foot Palo Alto studio at the beginning of the month, but why don't you tell 'em what brought you to the SiliconANGLE Media team, your background, and what you're going to be doing. >> Great, yeah, thanks Stu. Yeah, I've joined just recently in the last few weeks, I am Wikibon's lead analyst for application development as well as data science and deep learning. I create data science and the development of artificial intelligence as a huge and really one of the predominant developer themes now in the business world and really much of that that's going on in business in terms of development of the AI applications is in the form of microservices in containerized format for deployment out to multiclouds and increasingly serverless computing environments. So, I am totally pumped and excited to be at DockerCon and there were some great announcements this morning, I was very impressed that this community is making great progress, both on the sheer complexity and sophistication of the ecosystem, but on just the amount of support for Docker technology, for Kubernetes and so forth for the full range of technologies that enable containerized application development. Hot stuff. >> Yeah, Jim, and you talked about things like community and ecosystem and that was definitely the theme here day one. Docker did some changing in their packaging since we were at the show last year. They now have Docker CE which is the community edition. Focus on the developers and today was developer day. I'm pretty sure everything that was announced today is opensourced, it's in there, it's in the free version. I expect tomorrow we'll probably hear more about EE, it's the Enterprise Edition >> Enterprise, yes. >> A question I know we all have is how is the monetization of what Docker's doing progressing, the press and analyst dinner last night, I heard from a Docker employee and said look, we all understand, we are the early days of the monetization of Docker, but Solomon, this morning, said really, the success of Docker the company is tied directly to the ecosystem. We've got Microsoft coming on today, we've got Sysco, Oracle, lots of partners coming on this week talk about what Docker's doing, what's happened in opensource is going to help a broad ecosystem and all, not just the developers, but enterprises and the companies, so, what are you looking at this week, what are you hoping to come out of, what grabbed you from the Keynotes this morning? >> Well, grabbing from the Keynotes this morning is the maturation of the containerized Docker ecosystem in the form of greater portability, in terms of the LinuxKit announcement, we'll get to that later, as well as great customization capabilities to the Moby project. This is just milestones in the development and maturation of a truly robust ecosystem of innovation, really, what Docker's all about now that it's a real platforms company, is helping its partners to be raving successes in this rapidly expanding marketplace, so, that's what I see, the chief themes so far of this today. >> Yeah and it's interesting, one of the things we've always looked at Docker is like what does the opensource community do, what does the company do, what's the co-opetition play? Two years ago at the show in San Francisco, there was taking the container run time and really making sure that's opensource. You had the CoreOS guys and the Docker guys hugging. I got a picture of Ben Golub and Alex Polvi standing together and it was like oh, okay, that little cold war was over. LinuxKit is something we're going to look at, they lined up some really good partners. We got Intel, Microsoft, HPE, and IBM, but, we're going to talk to Red Hat and Canonical and see what they think about this because from the Linux guys, I've been hearing for the last couple of years, well, Linux really is containers. It's all just something that sits on top and containers, of course, is the Windows variant now, too, but you just buy your Linux and Containers comes with it and now, we say oh, we've got LinuxKit which is, I'm going to have a distribution that's fast, optimized, four containers that Docker and that ecosystem they're building's going to do. >> Same as everywhere, I mean Ben Golub laid it out maybe with Solomon this morning. Containers are really the predominant packaging of applications large and small across increasingly not just traditional enterprise and consumer applications but also the internet of things, so, but internet of things and the development of AI for the IOT is a huge theme that I'm focusing on in my coverage for Wikibon. I see a fair amount of enablers for that here. >> Great, and Jim, and absolutely, there was a big slide with Docker will be where you need to be, so, whether you're in the public cloud, of course, there's container services from, we've got Amazon ECS right here. You've got what's going on with Google and their containers. Microsoft Badger of course, so, there's so many pieces, so, a lot we're going to go through, we've got a full slate of interviews, of course, everybody can watch here at SiliconANGLE TV. If you want to participate in social conversation, John Furrier's actually been banging away, it's CrowdChat.net/DockerCon is where we're having some of the social conversations, of course, you can always reach out, I'm just @Stu on Twitter, Jim is @JamesKobielus which you'll see on the lower third when we put him up here is where he is on Twitter, if you're at the Expo Hall, you'll see the Expo Hall's behind us, we're just in the corner of the Expo Hall, going to be here for two days. Jim, I want to give you the final word on our intro here, come to the end of the day, what do you hope to have walked away with? >> Well, I hope to walk away with a more rich and nuance understanding of this ecosystem and the differentiators among the dozen upon dozens of companies here. Partners of Docker. Really what I see is a huge growth of the Kubernetes segment in terms of orchestration, scaling, of cluster management for all things to do with, not just Docker, but really Container D, which, of course, Docker recently opensourced, it's core container engine. I think this is totally exciting to see just the vast range of specialty vendors in the area providing tools to help you harden your containerized microservices environment for your CloudNative computing environments, that's what I hope to take away. I'm going to walk these halls when I'm not physically on The Cube and talk to these vendors here, exciting stuff, innovation. >> Yeah, absolutely, and you gave us so many pieces there, Jim. You mentioned Kubernetes, of course. There is that little bit of do I use Dockers Forum or do I use Kubernetes? Docker, of course, would like you to use Forum, that's what they're >> And in fact, that was an excellent discussion this morning about swarms advantages as well. I don't want to make it sound like I'm totally shifting towards Kubernetes in terms of my preferences. I mean, clearly, it's a highly innovative and dynamic space, so, Docker is making some serious investments and beefing up their entire enterprise stack including Swarm. >> Where I wanted to go, actually, with that is the Moby project actually is one of those things I saw as a nice maturation of what we hear from Docker. For the first couple of years, Docker said batteries are included but swapable, which means things like Swarm are going to make it in there, but you could use an alternative, so you want to use Kubernetes, go ahead and that's fine and Moby has allowed them to take all the components that are opensource. People inside Docker can work on them, people outside can collaborate them, much more modular. Reminds me of how when we talk about how development teams work, it's those two pizza teams, Docker has them internal, they're pulling more people in, how is that opensource collaboration going to expand? Scalability, I think, is the word that I heard over and over again in the Keynote. Scaling of the company, scaling of the products, scaling of the ecosystem, so something more interesting, say, we've been scaling our operations and we got two full days here of coverage so make sure to stay with The Cube for everything we've got here and thank you for watching The Cube. (upbeat tech music)

>> It's a pleasure to be here with you and to tell you about something I've been dreaming about and working for for many years and now is coming to the surface quite powerfully and quite usefully in many areas. I apologize, sometimes this flickers for some reason but I hope it doesn't disturb the story. I'd like to give you a little touch of history since I was there at the beginning of this journey and give you a brief introduction to what we mean for Fog Computing. And then go quickly to three powerful application spaces for this technology, together with industrial internet and one is industrial automation. That's the focus of our activity as Nebbiolo Technologies. The other one is one of my favorite ones and we'll get there is the automotive that caught fire here in Silicone Valley in the last years, the autonomous car, the connected vehicle and so on. And this is related to also to intelligent transportation and Smart Cities. And then a little touch on what Fog Computing means for Smart grid energy but many, many other sectors will find the same usefulness, the same architecture dimensions of Fog Computing applicable. So this is the story that comes back hopefully, here, the day in 2010 when Fog Computing, the word started here, oh God, is this jumping around? I think it's the connector, this is the age of the connector, this is the age of the Dongles. This is not an Apple Dongle and so we are having troubles. And this is not yet one of the last machines that are out. Let's hope for, I never had this problem, okay. Alright, this date 2010 at the Aquarium Research Center in Monterey where I gave a talk about robots going down deep in the bottom of those big valleys under the ocean and when I finished, the lady, Ginny in the middle approached me and told me, look, why don't you call what you're talking about fog computing? Because it's cloud computing brought too close to the ground and I protested for about 15 minutes. And on the drive home, I thought that's really a good name for what we are doing, what we have been doing in the last years and I started trying it out and using it and more and more I found good response and so seven years later, I'm still here talking about the same thing. What's happening is Fog, the edge of the metric zone was very important but it was always very important in IT, is still very important in IT in mobile, in content distribution but when IOT came to the surface, it became even more relevant to understand the need of resources, virtualized real time capable, secure, trusted with storage computing and networking coming together at the edge. At the edge of the IT network, now they are calling this mobile edge, they realize we are realizing that mobile can benefit from local resources at the edge, powerful real time capable resources but also and more importantly for what we are doing in this space of operational technologies, this is the space, the other and the other side of the boundary between information technologies and operational technologies and here is where we are living with Fog Computing these days so, apologize, I apologize for this behavior that is, maybe I have another Dongle, Apple Dongle. Maybe I could look at that, maybe Morris can help me out here, anyway, so what is Fog Computing? Fog Computing is really the platform that brings modern, Cloud inspired Computing storage here is important here for our friends at Western Digital and networking functions closer to the data producing sources. In our case, machines, things, but not just bringing Cloud down, it's also bringing functions up from the machine world, the real time, the safety functions, the trusting and reliability functions required in that area and this is a unified solution at the edge that really brings together communication, device management, data harvesting, analysis and control. So this is kind of new except for our friends in Wall Street. The real time part was not as sensitive. Now we are realizing how important it is and how important the position of resources is in the future of solutions in this space and so it's not boxes. It's a distributed layer of resources, well managed at the edge of the network and really has a lot of potential across multiple industries. Here we see the progress also in the awareness of this topic with the open fog control room that is now a very active and even the Vcs. Peter Levine here is talking about the importance of the edge. What is really happening is the the convergence. I think we should probably stop and use a different Dongle. Is this the one, no, no, this is not the right Dongle. The world of Dongles, sorry. Oh boy. Oh you have the computer with the, okay, is the right Dongle with the right computer, okay. Here we are, okay. Alright, we're getting back there. This is the new Apple. Okay, we are here, this looks better, thank you. Alright, so this is to be understood. This is the convergence of IT functionality, the modern IT functionality with the OT requirements and this is fundamentally the powerful angle that Fog Computing brings to IOT and machine world so all the nice things that happened in the Cloud come down but meet the requirements of resources, the needs and the timing of the Edge. And so when you look at what is brought into particularly the world of operations, you see these kind of functions that are not usually there. In fact, when you meet this operational world, you find microprocessors, you find Windows machines, industrial Pcs and so on, not so much Linux, not so much the modern approaches to computing. These are the type of dimensions that you'll see have a particular impact on the pain points seen in the wold of applications. So now we go to the Use cases in, use cases in the internet of things. I think it's on your side, I'm sorry. Because it's the second machine. Okay, well, maybe here's the solution. So we have seen this picture of IOT multiple times. A lot of verticals, we are concentrating on this tree, one is the industrial, the second one is the autonomous vehicle in intelligent transportation, the third one, just touched upon is the Smart Grid. This is the area of activity for Nebbiolo Technologies. Those kind of body shops and industrial floors with large robots with a lot of activity around those robots with cells protecting the activities within each working space, this is the world PLCs, industrial Pcs controlling robots, very fragmented. Here we are really finding even more critical this boundary between operational and informational technologies. This is a fire wall, also a mental fire wall between the two worlds and best practice is very different in one place than the other particularly also in the way we handle data, security, and many other areas. In this space, which is also a little more characterized here with this kind of machines that you see in this ISA 99 or ISA 95 type of picture, you see the boundary between the two spaces, once more when we come back. And alright, so the key message here, very tough to go across, it's very complex, the interaction between the two worlds. And there is where deeply we find a number of pain points at the security level, at the Hardware architecture level, at the data analytics and storage level, at the networking, software technologies and control architecture. There's a lot happening there that is old, 1980's time frame, very stable but in need of new approaches. And this is where Fog Computing has a very strong impact And we'll see, sorry, this is a disaster here. Alright, what do we do, alright. Maybe I should go around with this computer and show it to you. Okay, now it's there for a moment. Now, this is, maybe you have to remember one picture of all this talk, look at this, what is this? This is a graphical image of a body shop of a an important car company, you see the dots represent computers within boxes, industrial Pcs, PLCs, controllers for welding machines, tools and so on. That is, if you sum up the numbers, it's thousands of computers, each one of them is updated through a UPC, USB stick, sorry and is not managed remotely. It's not secure because there's a trust that the whole area is enclosed and protected through a fire wall on the other side but it's very stable but very rigid. So this is the world that we are finding with dedicated, isolated, not secure computing, this is Edge Computing. But it's not what we hope to be seeing soon as Fog Computing in action there so this is the situation. Very delicate, very powerful and very motivating. And now comes IOT and this is not the solution. It's helping, IOT tries to connect this big region, the operational region to the back end to the Clouds, to the power of computing that is there, very important, predicting maintenance, many other things can be done from there but it's still not solving the problem. Because now you have to put little machines, gateways into that region, one more machine to manage, one more machine to secure and now you're taking the data out. You are not solving a lot of the pain points. There's some important benefits, this is very, very good. But it's not the story, the story is sold once you really go one step deeper, in fact, from connectivity between information technologies and informational technologies to really Convergence and you see it here where you're starting to replace those machines supporting each cell with a fog node, with a powerful convergent point of computing, real time computing that can allow control, analytics and storage and networking in the same nodes so now these nodes are starting to replace all the objects controlling a cell. And offer more functions to the cell itself. And now, you can imagine where this goes, to a convergent architecture, much more compact, much more homogeneous, much more like Cloud. Much more like Cloud brought down to the Edge. When this comes back, okay, almost there. So this is okay, this is now the image that you can image leads to this final picture that is now even not, okay, do you see it, okay. Now you're seeing the operational space with the fabric of computing storage and networking that is modern, that is virtualized, that supports an application store, now you have containers there. You can imagine virtual machines and dockers living the operational space. At the same time, you have it continuing from the Cloud to the network, the modern network, moving to the Edge into the operational space. This is where we are going and this is where the world wants us to go and the picture representing this transition and this application of Fog Computing in this area is the following, the triangle, the pyramid is now showing a layer of modern computing that allows communications analysis control application hosting and orchestration in a new way. This is cataclysmic, really is a powerful shift, still not fully understood but with immense consequences. And now you can do control, tight, close to the machines, a little slower through the Fog and a little slower through the Cloud, this is where we are going. And there's many, many used cases, I don't dwell on those. But we are proceeding with some of our partners exactly in this direction. Now the exciting topics if I can have five more minutes making up the time wasted. What's going on here, the connected vehicle, the autonomous vehicle, the electrification of automobile are all converging and I think it's very clear that the para dime of Fog Computing is fundamental here. And in fact, imagine the equivalent of a manufacturing cell with a converging capabilities into the Fog and compare it with what's going on with the autonomous vehicle. This is a picture we used a Sysco seven years ago. But this is now, a car is a set of little control loops, ECUs, little dispersed, totally connected computers. Very difficult to program, same as the manufacturing cell. And now where are we going, we are going towards a Fog node on wheels, data center on wheels but better a Fog node on wheels with much better networking between, with a convergence of the intelligence, the control, the analytics, the communications in the middle and a modern network deterministic internet called TSN is going to replace all these CAN boxes and all these flakey things of the past. Same movement in industrial and in the automobile and then you look at what's going on in the intelligent transportation, you can imagine Fog Computing at the edge, controlling the junctions, the traffic lights, the interactions with cars, cars to cars and you see it here, this is the image, again where you have the operational space of transportation connected to the Clouds in a seamless way which these nodes of computing storage and networking at the junctions inside the cars talking to each other, so this is the beautiful movement coming to us and it requires the distribution of resources with real time capabilities, here you see it. And now, the Smart Grid, again, it cannot continue to go the same way with a utility data center controlling everything one way, it has to have and this is from Duke and a standardization body, you can see that there's a need of intelligence in the middle, Fog nodes, distributed computing that are allowing local decisions. Energy coming from a microcell into the grid and out, a car that wants to sell it's energy or buy energy doesn't need to go slowly to a utility data center to make decisions so again, same architecture, same technologies needed, very, very, very powerful. And we could go on and on and on, so what are we doing? We won't advertise here but the name has to be remembered. The name comes from a grape that grows in the Fog in Northern Italy, it's in Piedmont, my home town is behind that 13th century castle you see there. Out there is Northern Italy close to Switzerland. That vineyard is from my cousin, it's a good Nebbiolo, starting to be sold in California too. So this is the name Nebbia Fog comes to, Nebbiolo Technologies, we are building a platform for this space with all the features that we feel are required and we are applying it to industrial automation. And our funders are not so much from here, are from Germany, Austria, KUKA Robotics, TTTech, GiTV from Japan and a few bullets to complete my presentation. Fog Computing is really happening. There's a deep need for this converged infrastructure for IOT including Fog or Edge as someone calls it. But we need to continue to learn, demonstrate, validate through pilots and POCs and we need to continue to converge with each other and with the integrators because these solutions are big and they are not from a little start up. They are from integrators, customers, big customers at the other end, an ecosystem of creative companies. No body has all the pieces, no Sisco, no GE and so on. In fact, they are all trying to create the ecosystem. And so let's play, let's enjoy the Cloud, the Fog and the machines and try to solve some of the big problems of this world. >> Okay, Flavio, well done. >> Sorry for that. Sorry for the hiccups. >> Now we do that on purpose to see how you'd react and you're a pro, thank you so much for the great presentation. >> Alright. >> Alright, now we're going to get into panel one, looking at the data models and putting data to work.

[Voiceover] Live from the Mandalay Bay Convention Center in Las Vegas it's The Cube. Covering VMworld 2016. Brought to you by Vmware and it's ecosystems sponsors. Now, here are your hosts, John Furrier and Stu Miniman. >> Welcome back everyone we are here live in Las Vegas for VMworld 2016 at the Mandalay Convention Center. We're in the hang space where The Cube is located. I'm John Furrier with Stu Miniman. We're here with Chad Sakac the President of EMC's Converged Platform division formerly known as VCE. Welcome back. Great to see you. Fist pump. >> It's good to see you. >> Seven years we've been doing The Cube you've been on it every single year. >> I can't believe it. >> We love having you on. >> The Cube has become a fixture of VMworld for me. Seeing you guys. Your good looking faces. It puts a smile on my face. But I can't believe it's been seven years. That's insane. >> Yeah. The seven year itch as they say in VMworld. So I got to ask you. You're always candid and colorful. But you've seen the transition. You've been in the trenches. Coding. Now you're president of a division. Big division doing great. >> It's terrifying isn't it? (laughs) >> It's interesting. The Cube is bigger. We're all getting bigger. What's your take right now? You've seen the journey. Seven years. Where are we? >> VMworld has always had a huge community. One of the things that's been defining about VMware's whole journey has been the community. And that's one thing that has stayed pretty constant. Right? There's a lot of people here. This time in Vegas. Previously in San Fran. They share a passion and a love for all things that Vmware is doing. That said. It's a very different show. It's a very different context. It's a very different ecosystem. Literally at the beginning it was one product. Right? Now if you look at the keynotes they have to struggle to get all of the awesome into an hour and a half and do it in two days. Right? And they can only hit certain highlights. Sanjay did a great job today. Kit did a great job. My favorite, Yanbing. Yanbing Li has got passion, energy and loves her baby vSAN. But imagine trying to cram all of that stuff in previously in years past. If you go back seven years that would've been all of Vmworld would it had just been on just one thing. Right? And then obviously the other thing that's going on is the entire ecosystem has changed. So we're seeing consolidation in the ecosystem. But we're also seeing, I think Pat actually did the best job I've ever seen of that realistic balance of what's happening in traditional IT, private, public hybrid cloud models. And how that's going to play out over the next few years. But there' no question that public clouds are a huge part of the landscape for here. For now. For tomorrow. Forever. >> Pat got some criticism on Twitter. Also, some blog posts out there said that the keynote was a snoozer. But it was straight talk. And that's what the ecosystem wants and we're hearing. Stu might have his own opinion on this but what I'm hearing is I want to see the path. I want to see where VMware is going to be going so I can get behind that train. Clarify. Show me the straight and narrow roadways so I can turn up the gas a little bit. >> There's the expression that basically says the customer is always right. Or the people are always right. You can trust the people. Sometimes the customer is wrong. And sometimes the people are wrong. So last year they went bananas over vMotioning of VM between two clouds. Because it plays to the base. It plays to the audience who are like I love vMotion. Why wouldn't vMotion between clouds make sense? The reality of it is that while that was cool and technically accurate. This year's demonstration of basically saying no, you're not going to motion vm between on prem and public clouds very often, if at all. But you will need to be able to do things that bridge public clouds. Is actually a much more correct and relevant answer for the market. Now the difficulty is is that sometimes you're telling people things before there ready to fully internalize it. >> Embrace it. (laughs) It's shock of the system almost. Really. So you play the base. It's a lot like politics in that way. But I got to ask you the question. >> By the way. Just like in politics if you constantly play to the base you never move forward. >> Yeah. And this has always been a diverse ecosystem. So let's start with the cloud things. Obviously ecosystem is back on the table, I'd say. It's front and center. It's always been front and center but as it consolidates we're seeing its straight path. The question that people want to know is. Will everyone have fair access to the VMware as an independent company visa the new big mega merger was announced by Michael Dell just minutes ago that September seventh will be the close date. >> What are you talking about? >> Dell Technologies. >> What? (laughter) >> You can talk about it. Dell announced it. Michael tweeted about it. >> We're not bait and switching you. We'll show you his tweets if you want. >> I'm joking. I'm joking. And by the way, I'm so pumped and so excited. Frankly, I think not everybody understands exactly what's going on inside the industry. The server storage and networking ecosystems as stand alones are actually shrinking. As workloads move to SAS. As workloads move to public cloud IOS. The parts of the ecosystem that are growing are customers that are basically saying they want converged, hyper-converged and turnkey software stacks and that's they way they want to consume. They want to simplify stuff down. To be able to pull that off you have to have all the ingredients inside the stack. Increasingly, you will not be able to be competitive without having all the those components in the stack. And this is why I am passionate that convergence hyper-convergence and convergence and also turnkey software stacks will be at the center of Dell Technologies. And I keep telling Michael and he keeps agreeing which is a good thing. Right? The reality of it is is that we cannot, in spite of that statement being true, it is also true that people will continue to want variability. That may a be a declining set but it's a bigger set of customers. And the customers are like I'm all in on turnkey. So this one is smaller but growing faster this one's a much bigger ecosystem of, I'll mix and match whatever I want and put it together. Alright? So if you look at Yanbing's section. So she said HP with vSAN. Then she went VxRail and Yanbing thanks for the shout out during the session. That was awesome. They were powering basically some great events with Di data and powerful things in small packages. That's a highly integrated system. And then they brought up a customer that was totally building it themselves. Right? So it literally in a span of two minutes you had the continuum of build it yourself, a turnkey thing and it build it yourself. So will it be sustained? Yeah. Can you expect that we are going to lean in like crazy on our integrated stack? Yeah. But will we do it in exclusion of the ecosystem? No. >> There's just different use cases. >> Yeah. VxRail is winning in the marketplace because it's a highly opinionated vSphere HCIA. If you don't have vSphere. You don't like VMware it's not the HCIA for you. Right? However, more customers say yes than they say no. And that's awesome. But we know that we're going to need to create a next generation of the Microsoft Azure stack. On prem HCIA. It won't be built by the VxRail team. But there customers want it that way. And we're not talking about it a lot this week. But last week we launched VxRack new treno which is a turnkey open stack KVM SUSE based thing. Choice baby. >> So Chad, first of all the Dell deal is announced. So this is the final nail in the coffin of VCE, correct? >> Absolutely. Of course not. The reason that we are shifting the way we talk about VCE is something really simple. If I say VCE what's the first thing that appears in your brain? >> Stu: vBlock. >> Va-blah vBlock. And that's a good thing in a sense. >> How much revenue did you do last year, Chad? >> Three point five plus billion dollars. Almost entirely in vBlock and VxBlock. >> That would be a nice a public company on it's own. >> On it's own. Right. And growing at 40% cumulative annual growth rates. That is amazing. Right? >> It's not a fail. >> And by the way the thing that's interesting is that hasn't slowed down one iota in spite of the fact that everyone knows the Dell deal is going to close. However, the difficult it is is that we are no longer just he vBlock group. We have these hyper converged appliances that are growing like sync and customers are voting with their feet and their dollars. I think in a short amount of time we'll be the number one by customer, by revenue HCIA player in the market. But furthermore, we also do these turnkey cloud stacks. So realistically VCE is more of a product brand than it is a company brand. And we're no longer a separate company. We're a part of VMC and on the seventh we'll be part of Dell EMC. >> Chad, can you help us connect the dots? We've got the converged infrastructure. The platform. You've got some SUSE team. Talk about SAS and public cloud. How does Dell, EMC, VMware stay relevant going forward and play a part in that whole story? >> So it's a great question. I'm going to try to see if I can do this in an uncharacteristically concise way. Do you believe that hybrid cloud models will win? >> Stu: Sure. >> Chad: Do you really believe it? >> I mean what we have today isn't really good hybrid cloud but that's where we need to go. >> So, by the way, we need to make the on premise clouds as simple and easy to consume in utilized modes as the public clouds are. >> Stu: Love that. >> Chad: Right. However, I think that it is inherent that economics, governance, data gravity will always balance out some workloads biasing toward public. Some biasing towards private. Furthermore, do you think that there will be one cloud model that will win? Will it all be the VMware SDDC cloud? Will it all be Azure? Will it all be Amazon? Will it all be cloud foundry? Will it all be SoftLayer? >> Well Andy Jassy has an answer for you but many people will differ with that. Including Satcha and Michael and everybody else. >> I think that there's never been in the history of all time any sustained period where there's a singularity of a stack. >> VMware has done pretty good for a while. >> Yep. But, by the way, there's never been in all of history any extended period of time when there's been a singularity of a stack. Right? So our point of view is very simple. My mission in the converged platform division today is basically to build turnkey CI and HCI to power VMware powered clouds and Cloud Foundry power clouds. Tomorrow, meaning on the seventh, immediately my strategic posture toward Microsoft pivots. EMC has always had a partnership with Microsoft but nothing like Dell's. Right? So immediately, I'm going to go. Well we must have the best on and off premises version of the Microsoft Azure stack. Dell currently leads in that market but it's very early days of that. We go from having two clouds both on and off premises. To a third one that we add. And then of course there's a fourth one which says if you want to run your most mission critical, business critical, classic apps. Virtustream is the way to go for an SAP legacy landscape. That you want to put in the cloud. That needs to have an on premise variant too. So, four clouds. Each one on and off premises. Each one available in Capex or utilitized models. If we can pull that off we can be the strongest cloud player on the market bar none. I think that's cool. >> With the choice as the key sales pitch to the client which is pick the cloud that does the best job. >> The thing that's interesting is that sometimes choice is a euphemism for blah. Like I have no strategy. I have no opinion. It's just pick whatever you want and assemble it. What I'm describing is something a little different. Which is a choice between four highly opinionated turnkey offers. >> Okay. >> Right? Now of course, we'll enable customers to build there own things but I think that over time less and less customers are going to want to do that. >> And Chad, I think that points to what we've seen in the wave of converged infrastructure and cloud is we need to get out of that heterogenous mess where I've got the poor guy buried in wires. Running around. Trouble tickets and everything else like that. It needs to be simpler. We need to have the management tools. Chad, I want to get your viewpoint on VMware. One of the criticisms I've heard is kind of the cloud management stack. We've been swinging a bunch at this and we don't yet have a solution that customers are happy with. Where do you think we are? Where do we need to go? >> So, you've been around the block on this and customers who are watching this have been around the block on this. Cloud management platforms are tough. Its actually a very, very fragmented market. With very little consolidation in the past or even looking forward. Now inside that space vRealize is actually the strongest. And it's the most deployed. It's the most widely used. But again, I don't want to make it sound like ahh we're number one. Right? Clearly there's a lot of work to be done. Last night I was talking with Sajay who heads up the vRealize suite team. And what we've seen is that the team has done a lot of work out of the 6.x, 6.5 dot and you know 6.X days into the 7.X days. And customer feedback is that it's much closer to the mark. A in terms of core product workflow, upgrade-ability. All of those sorts of things. But also in the fact that it actually has extended out to be able to automate and deploy on top of Azure and AWS. In the beginnings of the extended cloud connects vision. Now that said. In those four opinionated cloud stacks. Now this is my personal opinion, here Stu. So I always have to safe harbor all that jazz. (laughs) I think that what you see is you see those highly opinionated cloud stacks. The CMP layers, the top part of it, being able to speak to each other but always favoring their own ecosystem. Right? I think that we're going to be in that mode for a long time. >> So Chad, some people might not be aware that in addition to the VCE products in there that the solutions piece and the cloud that you have. The progress that you've made. We've talked to some of your team. I think we've got Peter coming on today. Can you talk about the EHC NHC maybe even share a bit of revenue if you can. >> Yeah. Sure. First things first, it's important to understand this at its core. The original idea of VCE, which is now eight years old, was a basic premise that says we have a pile of giblets that are all awesome. However, customers struggled to assemble them. And they want to have a turnkey offer that they can lean on us to not only deploy but sustain, support as a single offering. That was the origination story. Replace server networking compute with hypervisor, IT business operations a CMP all of those things and you have the enterprise hybrid cloud. We started getting lots of feedback from customers. We love vSphere. We love vRealize. We love vRealize automation and operations. We love all of this log-in sites stuff. We're all in with Vmware can you guys give us the easy button? Right? And so we started on version one. Then on version two, version three, 3.5 and this week we announced version 4.0. Right? We're now up to hundreds of customers so it's still in the hundreds. But it is the most curated. The most turnkey way to get the VMware SDDC deployed. Now, I still think we have a long ways to go. Because we need to make it so push button, easy. And cloud foundations that Pat announced on Monday. Is a core part of that. Think of cloud foundations turning to validated designs and the enterprise hybrid cloud being the ultimate manifestations. >> Chad, just a clarification. Hundreds of customers but from a revenue standpoint that's probably bigger than the hyper-converged market. >> So you know what's fascinating. That's actually a fact. So I hadn't really thought about it. But we're currently on a revenue run rate that we don't disclose publicly, but I'm like, how do I tiptoe around this? It is larger than the largest HCIA players by a good market margin. >> Right. >> So you're talking about hundreds of millions of dollars worth of annual revenue. And customers are saying, look I'm in. I saw the keynote. I'm aligned with VM where I want to go. Right? And enterprise hybrid cloud is designed to do that. We keep reiterating on it. On virtual geek there's a whole slew of details on the 4.0 lease. And then the other thing that we started to see is we started to see customers say, I get it. With the enterprise hybrid cloud you've made my IT operations for classic IT better. How do you help my developers build the digital enterprise? Which doesn't start with infrastructure. And it doesn't start with IAS. It starts with the way developers see the world. Which is the platform layer. And we're on version 1.1 now of the native hybrid cloud which is targeted at how do we build a platform for building cloud native apps? And that starts not with infrastructure. Not with VMware. Not with EMC. Not with servers or network. It starts with cloud foundry. >> Chad, we got to wrap. I want to get one final point in and I want to get your thoughts on it. It's more of a historical perspective but also kind of a futuristic. Take your EMC hat off and put the personal Chad hat on. The ecosystem. Where is it going to go? Obviously it's consolidating. Which means it's shifting. So the old ecosystem was great and robust as you mentioned. It's not necessarily dying. It's just shifting. It's consolidating. So that means it's shifting to something else where there will be growth. Where is it moving? Where is that puck going so people can skate to where the puck will be? >> That's a great question, John. I'm always a geek at heart. I'm always going to run that vSphere cluster in my basement. It gives me joy and gratitude on cool new intel NUC. Great stuff. But in my new job. (laughs) as the leader of a big business. The broad landscape picture is fascinating. This isn't actually rocket science. You can decode it remarkably and quickly. In industries that are declining or under pressure. Secular pressure. Consolidation is inevitable and you have to pick your partners wisely. I think people underestimate how much giants that they would think of as safe and secure bets are under pressure. Michael was wise enough to take first mover advantage. Because in those periods no one has shrunk themselves to success. Right? Conversely, you see very diversified ecosystems. When you see a very diversified ecosystem ergo cloud management platforms. Ergo security, like oh my goodness, the number of security startups and players. A hyper converged startups. I count 39 of them at the last turn. Right? They go through a life cycle of explosion of ecosystems and then inevitable consolidation phase. And people look at that consolidation phase and say oh, the fun is all over. No that means that the fun has begun because your actually starting to really move the needle at customers. Right? So you can expect to see consolidation and security space. You can expect to see by the way very disruptive point technologies occur. The container ecosystem is going to explode and then consolidate. And when you see that consolidation happening the container act Sysco acquisition is one of the earlier indications in that space but just one of them. It means that it's moving from sizzle to steak. Again, look at the open stack ecosystem. About a year ago everyone was like, all the fun is over. All of them have consolidated down into the big massive players. It's because people are now getting down- >> John: Rubber is hitting the road. >> Rubber is hitting the road. >> So where is it going now? Where is the fun going to be? >> The fun is definitely going to be very much in new data fabrics and new applications. There's no rocket science there. The space that you saw the tip of the iceberg on the cloud. Cloud connection of how you can bridge. Bridge doesn't mean migrate it means create connective tissue between on premises and off premises clouds. It's going to be really, really interesting. I think one thing that is fascinating is roles for human beings that span functions. That is the new magic mojo. When I find someone who is a developer. Who understands infrastructure they've got mojo. When you find someone who understands the span of what's going on inside the ecosystem that person's got a bright future. >> As they say in baseball, the players have to have multiple tools in their bag. Chad, we got to break but great conversation. Thanks for coming on. Really appreciate it. Good seeing you. Congratulations on all your business success and September seventh is going to be the big close date for the mega transaction. >> It's going to be awesome and by the way guys, congrats to you. Seven years of this is great. I can't wait for next year. It'll be a lot of fun. >> Thanks. Chad Sakac here inside The Cube. Where all the things are happening at VMworld inside the Hang Space at the Mandalay Bay this year for VMworld 2016. I'm John Furrier with Stu Miniman. We'll be right back. You're watching The Cube. (upbeat music)