(gentle upbeat music) >> Hello, everyone, welcome to theCUBE's coverage of International Women's Day. I'm John Furrier host here in Palo Alto, California. theCUBE's second year covering International Women's Day. It's been a great celebration of all the smart leaders in the world who are making a difference from all kinds of backgrounds, from technology to business and everything in between. Today we've got a great guest, Dominique Bastos, who's the senior Vice President of Cloud at Persistent Systems, formerly with AWS. That's where we first met at re:Invent. Dominique, great to have you on the program here for International Women's Day. Thanks for coming on. >> Thank you John, for having me back on theCUBE. This is an honor, especially given the theme. >> Well, I'm excited to have you on, I consider you one of those typecast personas where you've kind of done a lot of things. You're powerful, you've got great business acumen you're technical, and we're in a world where, you know the world's coming completely digital and 50% of the world is women, 51%, some say. So you got mostly male dominated industry and you have a dual engineering background and that's super impressive as well. Again, technical world, male dominated you're in there in the mix. What inspires you to get these engineering degrees? >> I think even it was more so shifted towards males. When I had the inspiration to go to engineering school I was accused as a young girl of being a tomboy and fiddling around with all my brother's toys versus focusing on my dolls and other kind of stereotypical toys that you would give a girl. I really had a curiosity for building, a curiosity for just breaking things apart and putting them back together. I was very lucky in that my I guess you call it primary school, maybe middle school, had a program for, it was like electronics, that was the class electronics. So building circuit boards and things like that. And I really enjoyed that aspect of building. I think it was more actually going into engineering school. Picking that as a discipline was a little bit, my mom's reaction to when I announced that I wanted to do engineering which was, "No, that's for boys." >> Really. >> And that really, you know, I think she, it came from a good place in trying to protect me from what she has experienced herself in terms of how women are received in those spaces. So I kind of shrugged it off and thought "Okay, well I'm definitely now going to do this." >> (laughs) If I was told not to, you're going to do it. >> I was told not to, that's all I needed to hear. And also, I think my passion was to design cars and I figured if I enroll in an industrial engineering program I could focus on ergonomic design and ultimately, you know have a career doing something that I'm passionate about. So yeah, so my inspiration was kind of a little bit of don't do this, a lot of curiosity. I'm also a very analytical person. I've been, and I don't know what the science is around left right brain to be honest, but been told that I'm a very much a logical person versus a feeler. So I don't know if that's good or bad. >> Straight shooter. What were your engineering degrees if you don't mind sharing? >> So I did industrial engineering and so I did a dual degree, industrial engineering and robotics. At the time it was like a manufacturing robotics program. It was very, very cool because we got to, I mean now looking back, the evolution of robotics is just insane. But you, you know, programmed a robotic arm to pick things up. I actually crashed the Civil Engineering School's Concrete Canoe Building Competition where you literally have to design a concrete canoe and do all the load testing and the strength testing of the materials and basically then, you know you go against other universities to race the canoe in a body of water. We did that at, in Alabama and in Georgia. So I was lucky to experience that two times. It was a lot of fun. >> But you knew, so you knew, deep down, you were technical you had a nerd vibe you were geeking out on math, tech, robotics. What happened next? I mean, what were some of the challenges you faced? How did you progress forward? Did you have any blockers and roadblocks in front of you and how did you handle those? >> Yeah, I mean I had, I had a very eye-opening experience with, in my freshman year of engineering school. I kind of went in gung-ho with zero hesitation, all the confidence in the world, 'cause I was always a very big nerd academically, I hate admitting this but myself and somebody else got most intellectual, voted by the students in high school. It's like, you don't want to be voted most intellectual when you're in high school. >> Now it's a big deal. (laughs) >> Yeah, you want to be voted like popular or anything like that? No, I was a nerd, but in engineering school, it's a, it was very humbling. That whole confidence that I had. I experienced prof, ooh, I don't want to name the school. Everybody can google it though, but, so anyway so I had experience with some professors that actually looked at me and said, "You're in the wrong program. This is difficult." I, and I think I've shared this before in other forums where, you know, my thermodynamic teacher basically told me "Cheerleading's down the hall," and it it was a very shocking thing to hear because it really made me wonder like, what am I up against here? Is this what it's going to be like going forward? And I decided not to pay attention to that. I think at the moment when you hear something like that you just, you absorb it and you also don't know how to react. And I decided immediately to just walk right past him and sit down front center in the class. In my head I was cursing him, of course, 'cause I mean, let's be real. And I was like, I'm going to show this bleep bleep. And proceeded to basically set the curve class crushed it and was back to be the teacher's assistant. So I think that was one. >> But you became his teacher assistant after, or another one? >> Yeah, I gave him a mini speech. I said, do not do this. You, you could, you could have broken me and if you would've done this to somebody who wasn't as steadfast in her goals or whatever, I was really focused like I'm doing this, I would've backed out potentially and said, you know this isn't something I want to experience on the daily. So I think that was actually a good experience because it gave me an opportunity to understand what I was up against but also double down in how I was going to deal with it. >> Nice to slay the misogynistic teachers who typecast people. Now you had a very technical career but also you had a great career at AWS on the business side you've handled 'em all of the big accounts, I won't say the names, but like we're talking about monster accounts, sales and now basically it's not really selling, you're managing a big account, it's like a big business. It's a business development thing. Technical to business transition, how do you handle that? Was that something you were natural for? Obviously you, you stared down the naysayers out of the gate in college and then in business, did that continue and how did you drive through that? >> So I think even when I was coming out of university I knew that I wanted to have a balance between the engineering program and business. A lot of my colleagues went on to do their PEs so continue to get their masters basically in engineering or their PhDs in engineering. I didn't really have an interest for that. I did international business and finance as my MBA because I wanted to explore the ability of taking what I had learned in engineering school and applying it to building businesses. I mean, at the time I didn't have it in my head that I would want to do startups but I definitely knew that I wanted to get a feel for what are they learning in business school that I missed out in engineering school. So I think that helped me when I transitioned, well when I applied, I was asked to come apply at AWS and I kind of went, no I'm going to, the DNA is going to be rejected. >> You thought, you thought you'd be rejected from AWS. >> I thought I'd be, yeah, because I have very much a startup founder kind of disruptive personality. And to me, when I first saw AWS at the stage early 2016 I saw it as a corporation. Even though from a techie standpoint, I was like, these people are insane. This is amazing what they're building. But I didn't know what the cultural vibe would feel like. I had been with GE at the beginning of my career for almost three years. So I kind of equated AWS Amazon to GE given the size because in between, I had done startups. So when I went to AWS I think initially, and I do have to kind of shout out, you know Todd Weatherby basically was the worldwide leader for ProServe and it was being built, he built it and I went into ProServe to help from that standpoint. >> John: ProServe, Professional services >> Professional services, right. To help these big enterprise customers. And specifically my first customer was an amazing experience in taking, basically the company revolves around strategic selling, right? It's not like you take a salesperson with a conventional schooling that salespeople would have and plug them into AWS in 2016. It was very much a consultative strategic approach. And for me, having a technical background and loving to solve problems for customers, working with the team, I would say, it was a dream team that I joined. And also the ability to come to the table with a technical background, knowing how to interact with senior executives to help them envision where they want to go, and then to bring a team along with you to make that happen. I mean, that was like magical for me. I loved that experience. >> So you like the culture, I mean, Andy Jassy, I've interviewed many times, always talked about builders and been a builder mentality. You mentioned that earlier at the top of this interview you've always building things, curious and you mentioned potentially your confidence might have been shaken. So you, you had the confidence. So being a builder, you know, being curious and having confidence seems to be what your superpower is. A lot of people talk about the confidence angle. How important is that and how important is that for encouraging more women to get into tech? Because I still hear that all the time. Not that they don't have confidence, but there's so many signals that potentially could shake confidence in industry >> Yeah, that's actually a really good point that you're making. A lot of signals that women get could shake their confidence and that needs to be, I mean, it's easy to say that it should be innate. I mean that's kind of like textbook, "Oh it has to come from within." Of course it does. But also, you know, we need to understand that in a population where 50% of the population is women but only 7% of the positions in tech, and I don't know the most current number in tech leadership, is women, and probably a smaller percentage in the C-suite. When you're looking at a woman who's wanting to go up the trajectory in a tech company and then there's a subconscious understanding that there's a limit to how far you'll go, your confidence, you know, in even subconsciously gets shaken a little bit because despite your best efforts, you're already seeing the cap. I would say that we need to coach girls to speak confidently to navigate conflict versus running away from it, to own your own success and be secure in what you bring to the table. And then I think a very important thing is to celebrate each other and the wins that we see for women in tech, in the industry. >> That's awesome. What's, the, in your opinion, the, you look at that, the challenges for this next generation women, and women in general, what are some of the challenges for them and that they need to overcome today? I mean, obviously the world's changed for the better. Still not there. I mean the numbers one in four women, Rachel Thornton came on, former CMO of AWS, she's at MessageBird now. They had a study where only one in four women go to the executive board level. And so there's still, still numbers are bad and then the numbers still got to get up, up big time. That's, and the industry's working on that, but it's changed. But today, what are some of the challenges for this current generation and the next generation of women and how can we and the industry meet, we being us, women in the industry, be strong role models for them? >> Well, I think the challenge is one of how many women are there in the pipeline and what are we doing to retain them and how are we offering up the opportunities to fill. As you know, as Rachel said and I haven't had an opportunity to see her, in how are we giving them this opportunity to take up those seats in the C-suite right, in these leadership roles. And I think this is a little bit exacerbated with the pandemic in that, you know when everything shut down when people were going back to deal with family and work at the same time, for better or for worse the brunt of it fell on probably, you know the maternal type caregiver within the family unit. You know, I've been, I raised my daughter alone and for me, even without the pandemic it was a struggle constantly to balance the risk that I was willing to take to show up for those positions versus investing even more of that time raising a child, right? Nevermind the unconscious bias or cultural kind of expectations that you get from the male counterparts where there's zero understanding of what a mom might go through at home to then show up to a meeting, you know fully fresh and ready to kind of spit out some wisdom. It's like, you know, your kid just freaking lost their whatever and you know, they, so you have to sort a bunch of things out. I think the challenge that women are still facing and will we have to keep working at it is making sure that there's a good pipeline. A good amount of young ladies of people taking interest in tech. And then as they're, you know, going through the funnel at stages in their career, we're providing the mentoring we're, there's representation, right? To what they're aspiring to. We're celebrating their interest in the field, right? And, and I think also we're doing things to retain them, because again, the pandemic affected everybody. I think women specifically and I don't know the statistics but I was reading something about this were the ones to tend to kind of pull it back and say well now I need to be home with, you know you name how many kids and pets and the aging parents, people that got sick to take on that position. In addition to the career aspirations that they might have. We need to make it easier basically. >> I think that's a great call out and I appreciate you bringing that up about family and being a single mom. And by the way, you're savage warrior to doing that. It's amazing. You got to, I know you have a daughter in computer science at Stanford, I want to get to that in a second. But that empathy and I mentioned Rachel Thornton, who's the CMO MessageBird and former CMO of AWS. Her thing right now to your point is mentoring and sponsorship is very key. And her company and the video that's on the site here people should look at that and reference that. They talk a lot about that empathy of people's situation whether it's a single mom, family life, men and women but mainly women because they're the ones who people aren't having a lot of empathy for in that situation, as you called it out. This is huge. And I think remote work has opened up this whole aperture of everyone has to have a view into how people are coming to the table at work. So, you know, props are bringing that up, and I recommend everyone look at check out Rachel Thornton. So how do you balance that, that home life and talk about your daughter's journey because sounds like she's nerding out at Stanford 'cause you know Stanford's called Nerd Nation, that's their motto, so you must be proud. >> I am so proud, I'm so proud. And I will say, I have to admit, because I did encounter so many obstacles and so many hurdles in my journey, it's almost like I forgot that I should set that aside and not worry about my daughter. My hope for her was for her to kind of be artistic and a painter or go into something more lighthearted and fun because I just wanted to think, I guess my mom had the same idea, right? She, always been very driven. She, I want to say that I got very lucky that she picked me to be her mom. Biologically I'm her mom, but I told her she was like a little star that fell from the sky and I, and ended up with me. I think for me, balancing being a single mom and a career where I'm leading and mentoring and making big decisions that affect people's lives as well. You have to take the best of everything you get from each of those roles. And I think that the best way is play to your strengths, right? So having been kind of a nerd and very organized person and all about, you know, systems for effectiveness, I mean, industrial engineering, parenting for me was, I'm going to make it sound super annoying and horrible, but (laughs) >> It's funny, you know, Dave Vellante and I when we started SiliconANGLE and theCUBE years ago, one of the things we were all like sports lovers. So we liked sports and we are like we looked at the people in tech as tech athletes and except there's no men and women teams, it's one team. It's all one thing. So, you know, I consider you a tech athlete you're hard charging strong and professional and smart and beautiful and brilliant, all those good things. >> Thank you. >> Now this game is changing and okay, and you've done startups, and you've done corporate jobs, now you're in a new role. What's the current tech landscape from a, you know I won't say athletic per standpoint but as people who are smart. You have all kinds of different skill sets. You have the startup warriors, you have the folks who like to be in the middle of the corporate world grow up through corporate, climb the corporate ladder. You have investors, you have, you know, creatives. What have you enjoyed most and where do you see all the action? >> I mean, I think what I've enjoyed the most has been being able to bring all of the things that I feel I'm strong at and bring it together to apply that to whatever the problem is at hand, right? So kind of like, you know if you look at a renaissance man who can kind of pop in anywhere and, oh, he's good at, you know sports and he's good at reading and, or she's good at this or, take all of those strengths and somehow bring them together to deal with the issue at hand, versus breaking up your mindset into this is textbook what I learned and this is how business should be done and I'm going to draw these hard lines between personal life and work life, or between how you do selling and how you do engineering. So I think my, the thing that I loved, really loved about AWS was a lot of leaders saw something in me that I potentially didn't see, which was, yeah you might be great at running that big account but we need help over here doing go to market for a new product launch and boom, there you go. Now I'm in a different org helping solve that problem and getting something launched. And I think if you don't box yourself in to I'm only good at this, or, you know put a label on yourself as being the rockstar in that. It leaves room for opportunities to present themselves but also it leaves room within your own mind to see yourself as somebody capable of doing anything. Right, I don't know if I answered the question accurately. >> No, that's good, no, that's awesome. I love the sharing, Yeah, great, great share there. Question is, what do you see, what do you currently during now you're building a business of Persistent for the cloud, obviously AWS and Persistent's a leader global system integrator around the world, thousands and thousands of customers from what we know and been reporting on theCUBE, what's next for you? Where do you see yourself going? Obviously you're going to knock this out of the park. Where do you see yourself as you kind of look at the continuing journey of your mission, personal, professional what's on your mind? Where do you see yourself going next? >> Well, I think, you know, again, going back to not boxing yourself in. This role is an amazing one where I have an opportunity to take all the pieces of my career in tech and apply them to building a business within a business. And that involves all the goodness of coaching and mentoring and strategizing. And I'm loving it. I'm loving the opportunity to work with such great leaders. Persistent itself is very, very good at providing opportunities, very diverse opportunities. We just had a huge Semicolon; Hackathon. Some of the winners were females. The turnout was amazing in the CTO's office. We have very strong women leading the charge for innovation. I think to answer your question about the future and where I may see myself going next, I think now that my job, well they say the job is never done. But now that Chloe's kind of settled into Stanford and kind of doing her own thing, I have always had a passion to continue leading in a way that brings me to, into the fold a lot more. So maybe, you know, maybe in a VC firm partner mode or another, you know CEO role in a startup, or my own startup. I mean, I never, I don't know right now I'm super happy but you never know, you know where your drive might go. And I also want to be able to very deliberately be in a role where I can continue to mentor and support up and coming women in tech. >> Well, you got the smarts but you got really the building mentality, the curiosity and the confidence really sets you up nicely. Dominique great story, great inspiration. You're a role model for many women, young girls out there and women in tech and in celebration. It's a great day and thank you for sharing that story and all the good nuggets there. Appreciate you coming on theCUBE, and it's been my pleasure. Thanks for coming on. >> Thank you, John. Thank you so much for having me. >> Okay, theCUBE's coverage of International Women's Day. I'm John Furrier, host of theCUBE here in Palo Alto getting all the content, check out the other interviews some amazing stories, lessons learned, and some, you know some funny stories and some serious stories. So have some fun and enjoy the rest of the videos here for International Women's Days, thanks for watching. (gentle inspirational music)

(bright music) >> Well, hey, everybody. John Walls here with theCUBE continuing coverage at AWS re:Invent '22. It has been three really fantastic days here at the Venetian in Las Vegas. And we still have more to come with us to talk about Persistent Systems, the Senior Vice President of Cloud at Persistent Dominique Bastos. Dominique, good to see you. >> Pleasure to see you. >> Thanks for joining us here on the queue. >> Thank you for having me. >> Oh, you bet. You bet. >> Thank you. All right. Tell us about Persistent Systems. So, first off, core focus, what you're up to and then we'll jump in from there. >> Sure, sure. So Persistent Systems is a digital engineering solutions and services provider. They've been around for 32 years doing software engineering, innovating in several areas within different verticals. There's over 22,500 people at Persistent now as of my last count. We're in 18 countries. >> Mm. >> And in October we hit the $1 billion annualized recurring revenue mark. >> Oh, that's a good number right there. >> It's a good number. It's a great company. It's been such an interesting journey. I was with AWS for almost seven years before recently joining Persistent, and it almost felt like a such a logical transition in terms of bringing what I've seen in my entire career of interacting with customers and businesses to what Persistent can provide as people are looking to make their journey to the cloud whatever stage they might be at so. >> Right. And we should point out is that SVP of Cloud, but your focus is AWS. >> My focus AWS. >> Other options, other opportunities. >> Right. >> But you're AWS all the way. >> Right. It's a multicloud company because, you know, we really don't believe in dictating to a customer what they need. I think the benefit, one of the differentiators for Persistent is the amount of legacy history that they have across these industries and customers. I mean, 32 years is a lot, and in terms of like software engineering. So it's like really doing the hard work, the heavy lifting. And then seeing what can actually be commoditized, repeatable building solutions within these verticals to help customers accelerate their transformations. >> Mm hmm. >> So... >> You know, when we talk about cloud, I mean, this has been something that's been on the forefront feel like a long time. Right? But yet there are still many and maybe you can help me out with that percentage, whatever of companies who are either haven't begun yet, are just beginning, they're really in a nascent stage of this transformation. And yeah, I found it curious this week as we've talked with different people about where are you in your journey and so and so forth. A lot of people are way back just starting pass go, and aren't as mature as I would've thought. I mean, do you find that to be the case? >> Absolutely. And there's many reasons for that. I mean, I think what I've started, I mean I've been seeing it over the years, but we all know IT and business back then was very much kept separate. >> Two separate animals. >> Two separate animals. >> Yeah. >> IT made the decisions, not in a vacuum, but almost in a vacuum, right? Now, obviously companies who know it's necessary and have embraced it, bring together the function of looking at the technological solutions that they're adopting to solve a business problem. Right? But that business problem really is dictated by the customer need. >> Mm hmm. >> So I think I have seen, you know, in terms of like the life cycle of a business adopting technology, post cloud, there's a lot of enterprises that are still, they've made such big investments in their legacy infrastructure. >> Mm hmm. >> And in actually, you know, the developers and the people that are maintaining those systems, and the different connections to put it in layman's terms between their systems and their customers systems, right? So, that entire scenario makes it very difficult for them to move. >> Mm hmm. >> It's like moving a mountain. So, I would say there's like three ways of looking at it. You have those that kind of want to revitalize their technology, right? Their backend systems, they want to optimize costs, they want to, and my background in technology is specifically in data, kind of I came up as a DBA and built data models, and I've always loved data before it was a thing to love data. (John chuckles) So... >> You were so far ahead of the curve. >> I was ahead of the curve. I was a trendsetter. >> What a trendsetter? >> I'm a trendsetter. (Dominique chuckles) So I think from that perspective they're looking at, you know, these enormous of amounts of data that they've been capturing in these legacy systems that they're so heavily invested in, but they're not able to derive the insights to better serve their customers or to even innovate new revenue streams from that data. But, they're taking the first step to say, look, you know, we can actually operate more smoothly at a lower cost by moving to the cloud. >> Mm hmm. >> So there's that. Then there are those that are looking to actually innovate and create new revenue streams, monetize their data, look at opportunities to integrate feedback that they've been getting from their customers to provide new services. So they're using the cloud journey, they've probably already moved into the cloud. They're starting to look at analytics, and potentially using AIML to facilitate creating these solutions and services. And then there's those that, you know, want to pioneer, and break into new inventions and ways of solving the big world problems. >> Mm hmm. >> Right? I mean, I think that's one thing I noticed in this re:Invent that I thought was so special is there's like a really big focus on humanity, on humans, on you know, as we were talking earlier everything and I myself have like holding books and I don't like people being on their phone when we're having a conversation. (John chuckles) >> Right. But I think, you know, we are where we are. The reality is the world has evolved in such a way that community is no longer, it takes a small village, all, you know everybody knows each other. You have face to face interactions. You're not doing that with your customers either. There's digitally native businesses that have for a long time cropped up in the FinTech space in you know, you name the space, there's a startup that was born in the cloud that can reach customers immediately, and can provide a service that an enterprise that's kind of like weighed down with their legacy systems. They can't pivot fast enough. So, I think, you know, the pioneers think beyond that. How do we use quantum computing? You know, how do we use 3D simulation to anticipate solving big world problems? Whether it's, you know, people no longer, I don't know what the statistics are, but it's very sad. That elderly people, you know, the amount of human contact that they have is very little. You know, and if you could provide, I don't know, an experience, an immersive experience where their memories are triggered, you know, to help them with dementia, or Alzheimer's. >> Sure. >> I mean, those types of things, those are the things that I think that's what excites me about the launches that I see at re:Invent. And I think the innovation, you know, you have to take that journey. Unless you're born in the cloud, you do have to kind of take that journey. >> You got to get there. >> You have to get there. >> Right. Sure. >> But it's so worth it. >> So how about, let's just say, if I'm a health sciences company, or I'm a pharmaceutical or whatever, and so I've got this desire to create this new opportunity you know, with a human, I say, but yeah, but if you're also Persistent Systems and you're working with you know, somebody in FinTech, or somebody in EEG or whatever, you can't really understand my challenges or my problems. I mean, how do you wear those different hats so you can identify not only what the focus of that client is, but also their technology and how you're going to get them to marry up so they can achieve their goals? >> Well, the beauty of being, you know, in a company with teams of people that you work with, I cut across industries. Right? So we have vertical leaders that have very deep subject matter expertise in any number of those areas. You know, we're working with genomics for example. So, for example, you know, we engage with a customer that we've been helping over the past 32 years use technology to bring services to their customers. And now we are seeing an opportunity to help them innovate to keep up for their business for obvious reasons, but also to supply their customers with the new innovative solutions within that industry, right? 'Cause you need that vehicle to kind of deploy and deliver what customers need. The way we do it is from end to end, right? So, we have in the partnership with AWS, we're a partner of AWS, and as such we are able to collaborate with AWS and their customers or bring our customers to the cloud for all the way from assessment to planning to execution. And even within Persistent, we have ways to main operationalize the maintenance of these solutions. So it's really very easy managed services type framework that we work under. In terms of like migration planning, we have competencies within AWS. For looking at migrations we have AIML, we have DevOps. So we have the various competencies aligned with AWS to be able to execute at whatever stage the customer is. But also in terms of like the accelerators that we provide or the frameworks to look at total cost, that cuts across, right? And then we don't kind of like, here's what you needed and buy, never speak to us again. (John chuckles) I mean, I think the beauty of this company and what I really loved when I was first speaking to them is the depth of the relationships with their customers and the longevity of them. So they've really seen their customers grow. And you can only do that if you're there for the long run. >> You've got to be present. >> You have to be present. >> Sure. So how do you handle if people are making this transformation and they're moving into the cloud, but the people they have on staff might not be familiar with it, right? They have great expertise in what they've been doing on these legacy systems, but now you're moving, you're migrating to a new world, new culture, new environment, and you got to get 'em up to speed. And that's not easy. >> No. >> Right? So what do you do, or what does Persistent suggest or what are you doing and with regard to closing that gap into making that bridge so that they can maintain a little bit on their own. >> Yeah. >> They can execute and implement on their own. >> Yep. >> A little bit. They don't need somebody there to stand over their shoulder the whole time. >> I won't geek out on having joined AWS in professional services way back when to migrate a major company to the cloud, and having lived through painstakingly all those problems and blockers and adoption roadblocks that you speak of. >> Mm hmm. >> You know, I think the way Persistent handles it is what I would've done myself, right? If I were to start a company and say how do we help customers simplify their cloud journey, and remove the complexity? I think that's what Persistent Systems does. We, there's training programs that we are aligned to with AWS. So there's up-skilling of development teams, application developers. We collaborate from the top down with executives to look at the resources that they have available. Obviously mission critical systems that cannot sacrifice having engineers pulled away for a new project. You know, you take that into account. I think, you know, when I spoke earlier about assessments, you're not just assessing what needs to be lifted and shifted or refactored or rearchitected, you're looking at, you know, all these applications that are going to move to the cloud. Who owns them? >> Mm hmm. >> You know, do you have a CI/CD pipeline, or a data pipeline built? Well, we're going to need that, right? So, the continuous integration, continuous development of applications, that type of DevOps, obviously security also DevSecOps, we look at it from end to end as well. We have a very strong security practice. So, all those advisory pieces we have, but we also have the capability to execute on it. Where we're not just coming in and saying well this is what you should do. We're kind of in there saying, this is what you should do, here's how we can get you started. And then, you know, it's a collaborative effort with our customers to see how much they still want us to stay versus how much they want to take over. >> Right. It's nice to have a friend. >> Yeah. (John laughs) Who doesn't need a friend. (Dominique laughs) And Persistent Systems is your friend. Dominique, thanks for the time. >> Oh, my pleasure. >> I appreciate it. >> Thanks again for having me. >> Thanks for being here on theCUBE. You bet. >> Absolutely. >> You are watching theCUBE as you well know the leader in high tech coverage. (soft music)

>>Okay, welcome back everyone. This is the Cube's coverage of S reinve rein Mars. I said reinvent all my VES months away. Re Mars machine learning, automation, robotics, and space. I'm John feer, host of the cube, an exciting guest here, bringing on special guest more robot robots are welcome on the cube. We're gonna have that segment here. Mike Dooley co-founder and CEO of Labrador systems. Mike, welcome to the cube. Thanks. >>Coming on. Thank, thank you so much. Yeah. Labrador systems. We're a company is developing a new type of assistive robot for people in the home. And you know, our mission is really to help people live independently. And so we're about to show a robot that's it looks like my, what used to be in a warehouse or other places, but it's being designed to be both robust enough to operate in real world settings, help people that may be aging and using a Walker wheelchair. A cane could have early onset health conditions like Parkinson's and things like that. So >>Let me, let me set this up first, before you get into the, the demo, because I think here at re Mars, one of the things that's coming outta the show besides the cool vibe, right? Is that materials handling? Isn't the only thing you've seen with robotics. Yeah. You're seeing a lot more life industrial impact. And this is an example of one of that, isn't >>It? Yeah. We just actually got an award. It's a Joseph EGL Bergo was the first person to actually put robots in factories and automation. And in doing that, um, he set up grant for robots going beyond that, to help people live in it. So we're the first recipient of that. But yeah, I think that robots, they're not the, what you think about with Rosie yet. We're the wrong way from that, but they're, they can do really meaningful things. >>And before we get the demo, your mission hearing, what you're gonna show here is a lot of hard work and we know how hard it is. What's the mission. What's the vision. >>The mission is to help people live more independently on their own terms. Uh, we're, there's, it's an innate part of the human condition that at some point in our lives, it becomes more difficult to move ourselves or move things around it. And that is a huge impact on our independence. So when we're putting this robot in pilots, we're helping people try to regain degrees of independence, be more active deal with whatever situation they want, but under their terms and have, have control over their life. >>Okay, well, let's get into it. May I offer you a glass of water? Well, you >>Know, I have a robot that just happens to be really good at delivering things, including water. Um, we just actually pulled these out of our refrigerator on our last demo. So why don't we bring over the retriever? And so we're gonna command it to come on in. So this is a Labrador retriever. These robots have been in homes. This robot itself has been in homes, helping people do activities like this. It's able to sort of go from place to place it automatically navigates itself. Uh, just like we've been called a self-driving shelf, um, as an example, but it's meant to be very friendly, can come to a position like this could be by my armchair and it would automatically park. And then I could do something like I can pick up, okay, I want some water and maybe I want to drink it out of a cup and I can do this. And if I have a cough or something else, cough drops. My phone, all sorts of things can be in there. Um, so the purpose of the retriever is really to be this extra pair of hands, to keep things close by and move things. And it can automatically adjust to any hide or position. And if I, even if I block it like a safety, it, it >>Stops. And someone who say disabled or can't move is recovering or has some as aging or whatever the case is. This comes to them. It's autonomous in it sense. Is that that what works or yeah. Is it guided? How does >>It, it works on a series of bus stops. So the in robotics, we call those way points. But when we're talking to people, the bus stops are the places you want it to go. You have a bus stop by the front door, your kitchen sink, the refrigerator, your armchair, the laundry machine, you won't closet it. <laugh>. And with that simple metaphor, we, we train the robot in a couple hours. We create all these routes, just like a subway map. And then the robot is autonomous. So I can hit a button. I can hit my cell phone, or I can say Alexa ass lab, one to come to the kitchen. The robot will autonomously navigate through everything, go around the pets park itself. And it raises and lowers to bring things with and reach. So I'm sitting and it might lower itself down. So I can just comfortably get something at the kitchen. I, it could just go right to the level of the countertop. So it's very easy for someone that has an issue to move things with with limited, uh, challenges. >>And this really illustrates to this show again. Yeah. Talk about the impact here. Cause we're at a historic moment in robotics. >>We are. Yeah. >>What's your reaction to that? Tell your, share your vision >>On that. I've been in robotics for 25 years. Um, and I started, I actually started working actually at Lego and launching Lego Mindstorms, the end of the nineties. So I have like CEO just last night again, they gush over like you did that. Yeah. <laugh> and again, I'm pretty old school. And so we've my career. If I've been working through from toys onto like robotic floor cleaners, the algorithms that are on Roomba today came from the startup that we were all part of. We're, we're moving things to be bigger and bigger and have a bigger >>Impact. What's it feel like? I mean, cuz I mean I can see the experience and by the way, it's hardcore robotics communities out there, but now it's still mainstream. It's opening up the aperture of robotics. Yeah. It's the prime time is right now and it's an inflection point. >>Well, and it's also a point where we desperately need it. So we have incredible work for shortages <laugh> and it's not that we're, these robots are not to take people jobs away it's to do the work that people don't want to do and try to make, you know, free them up for things that are more important. Yeah. In senior care, that's the high touch we want caregivers to be helping people get outta their bed, help them safely move from place to place things that robots aren't at yet. Yeah. But for getting the garbage, for getting a drink or giving the person the freedom to say, do I wanna ask my caregiver or my spouse to do that? Or do I wanna do it myself? And so robots can be incredibly liberating experience if they're, if they're done in the right way and they're done well, >>It's a choice. It actually comes down to choice. I remember this argument way back when, oh, ATM's gonna kill the bank teller. In fact more bank tellers emerged. Right. And so there's choices come out there and, but there's still more advances to do. What is you, what do you see as milestones for the industry as you start to seeing better handling better voice activation cameras on board. I noticed some cameras in there. Yeah. So we're starting to see the, some of the smaller, faster, cheaper >>It's it's especially yeah. Faster. Cheaper is what we're after. So can we redo? So like the gyros that are on this type of robot used to be like in the tens of thousands of dollars 20 or 30 years ago. And, and then when you started seeing Roomba and the floor cleaners come out, those started what happened was basically the gyro on here that what's happening in consumer electronics, the ability for the iPhone to play, you know, the game in turn and, and do portrait and landscape. That actually is what enables all these robots that clean your floors to do very tight angles. What we're doing is this migration of consumer electronics then gets robbed and, and adopted over in that. So it's really about it's I, it's not that you're gonna see things radically change. It's just that you're gonna see more and more applications get more sophisticated and become more affordable. Our target is to bring this for a few hundred dollars a month into people's homes. Yeah. Yeah. Um, and make that economy work for as many people as >>Possible. Yeah. Mike, what a great, great illustration of great point there now on your history looking forward. Okay. Smaller Fest are cheaper. Yeah. You're gonna see a human aspect. So technology's kind of getting out of the way now you got a lot in the cloud, you got machine learning, big thing here. There's a human creative side now gonna be a big part of this. Yeah. Can you talk about like how you see that unfolding? Because again, younger people gonna come in, you got a lot more things pre-built I just saw a swaping on stage saying, oh, we, we write subroutines automatically the machine learning like, oh my God, that's so cool. Like, so more is coming for, to, for builders, right. To build what's the playbook gonna look like? How do you see the human aspect, creative crafting building? >>I, I it's, you know, it's a hard Fu future to predict. I think the issue is that humans are always gonna have to be more clever than the AI <laugh>, you know, I, I can't say that enough is that AI can solve some things and it can get smarter and smarter. You task that over and then let's work on the things that can't do. And I think that's intellectually challenging. Like, and I, and I think we have a long way to go, uh, to sort of keep on pushing that forward. So the whole mission is people get to do more interesting things with their life, more dynamic. Think about what the machines should be working on. Yeah. And then move on to the next things. >>Well, a lot of good healthcare implications. Yeah. Uh, senior living people who are themselves, >>All those are place. Yeah. >>Now that you have, um, this kind of almost a perfect storm of innovation coming, and I just think it's gonna be the beginning. You're gonna see a lot of young people come in. Yeah. And a lot of people in school now going down to the elementary school level yeah. Are really immersed in robotics. They're born with it. And certainly as they get older, what kind of disciplines do you see coming into robot? I used to be pretty clear. Yeah. Right. Nerdy, builder, builder. Now it's like what? I got Mac and rice. My code. >>Yeah. My, my co-founder and CEO has a good example. Anybody we interview, we say we really like it. If you think of yourself as an astronaut, going on to a space mission. And, and it's really appropriate being here at R Mars is that normally the astronaut has one specialty, but they have to know enough of the other skills to be able to help out. In case of an emergency robotics is so complex. There's so there's mechanical, there's electrical, there's software, they're perceptual, there's user interface, all of those Fs together. So when we're trying to do a demo and something goes wrong, I can't say why. I only do mechanical. Yeah. You got it. You really have to have a system. So I think if any system architects, people that if you're gonna, if, if you're gonna be, if mechanical is your thing, you better learn a little bit electrical and software. Yeah. If software is your thing, you better not just write code because you need to understand where you're >>Your back. Well, the old days you have to know for trend to run any instrumentation in the old days. So same kind of vibe. So what does that impact on the teamwork side? Because now I can imagine, okay, you got some general purpose knowledge, so math, science, all the disciplines, but the specialties there, I love that right now. Teamwork. Yeah. Because you, you know, I could be a generalism at some point. There's another component I'm gonna need to call my teammate for. >>Yeah. Yeah. And you have to have, yeah. So it, yeah, we're a small team, so it's a little bit easier right now, but even the technology. So like there's a, what, this is, this runs on Linux and that runs on Ross, which is a robotics operating system. The modules are, are the, are sorry, the modules, I mean redundant there, but the, the part that makes the robot go, okay, I'm gonna command it to go here. It's gonna go around it, see an obstacle. This module kicks in, even the elements become module. So that's part of how teams work is that, and, and Amazon has a rule around that is that everything has to have an API. Yeah. I have to be able to express my work and the way that somebody else can come in and talk to it in a very easy way. So you're also going away from like, sort of like the hidden code that only I touch you can't have ownership of that. You have to let your team understand how it works and let them control it and edit it. Well, >>Super exciting. Dan, first of all, great to bring robots on the cube set. Thanks to your team here. Doing that. Yeah. Um, talk about the company. Um, put a plug in, what are you guys doing? Sure. Raising money, getting more staff, more sales. We're give, give a commercial. >>Yeah. So we, we closed the seed round. So we've been around it's actually five years next month. Um, did pre-seed and then we closed the seed round that we announced back at CS. So we debuted the retriever for the first time we had it under wraps. We had it in people's homes for a year before we did that. Um, I, Amazon was one of our early investors and they actually co-led on this last round, along with our friends at iRobot. So yeah. Uh, so we've raised that we're right in the next phase of deploying this, especially going more into senior living now that that's opening up with COVID coming down and looking at helping these workforce issues where there's that crisis. So we'll be raising later this year. So we're starting to sort of do the preview for series a. We're starting to take those pre-orders for robots and for Lois. And then our goal is we're and we're actually already at the factory. So we've been converting this, these there's a version of this robot underway right now at the factory that will probably have engineering units at the end of this year. Yeah. Goal is for, uh, full production with all the supply chain issues for second half of, of next >>Year. Yeah. Well, congratulations. It's a great product. And I gotta ask you what's on the roadmap, how you see this product unfolding. What's the wishlist look like if you had all the dough in the world, what would you do next? What would you be putting on there? Sure. If you had the magic wand what's happening, >>It's a couple variables. I think it's scale. So it's driving the, this whole thing is designed to go down in cost, which improves basically accessibility. More people can afford it. The health system, Medicare, those sorts of folks. See it one. So basically get us into reduction and get us into volume is one part, I think the other ones is adding layers. I, what we, when we see our presentation and the speech we're doing tomorrow, we see this as a force multiplier for a lot of other things in healthcare. So if I bring the blood pressure cuff, like we have on the retrieval, I can be a physical reminder to take your medication, to take the, my, my readings, or we are just con having a conversation with some of our friends of Amazon is bringing an echo show to you when you want to have a conversation and take it away. >>When you don't think about that metaphor of how do I wanna live my life and what do I have control over? And then on top of it, the sensors on the robot, they're pretty sophisticated. So in my case, my mom is still around she's 91, but now in a hospital beded wheelchair could, we've seen her walking differently early, early on, and using things like Intel, real sense and, and computer vision and AI to detect things and just say to her, don't even tell anybody else, we're noticing this. Do you wanna share this with your doctor? Yeah. That's the world. I think that what we're trying to do is lay this out as version 1.0, so that when folks like us are around, it'll something like decades from now, life is so much more better for the options and choices we have. It's >>Really interesting. You know, I liked, um, kind of the theme here. There's a lot of day to day problems that people like to solve. And then there's like the new industrial problems that are emerging that are opportunities. And then there's the save the world kind of vibe. <laugh>, there's help people make things positive, right. You know, solve the climate problems, help people. And so we're kind of at this new era and it's beyond just like sustainability and, you know, bias. That's all gotta get done a new tipping point around the human aspect of >>Things. And you do it economically. I think sometimes you think that, okay, well, you're just doing this cuz you're, you're socially motivated and doesn't, you don't care how many you sell it to just so you can accomplish it. It's their link. The, the cheaper that we can make this, the more people you can impact. I think you're talking about the kids today is the work we did at Lego. In the end of the nineties, you made a, a robotics kit for 200 bucks and millions of kids. Yeah. Did that. And >>Grape pie. I mean, you had accessories to it. Make a developer friendly. >>Yeah, no, exactly. And we're getting all those requests. So I think that's the thing is like, get a new platform, learn what it's like to have this sort of capability and then let the market drive. It, let the people sort of the folks who are gonna be using it that are in a wheelchair, are dealing with Parkinson's or Ms, or other issues. What can we add to that ecosystem? So you it's, it's all about being very human centric in that. Yeah. And making the other parts of the economy make it work for them, make it so that the health system, they get an ROI on this so that, Hey, this is a good thing to put into people's homes. >>And well, I think you have the nice, attractive value proposition to investors. Obviously robotics is super cool and really relevant. Cool, cool. And relevant to me always is nice to have that. So check that, then you got the economics on price, pressure, prove the price down lower. Yeah. Open up the Tams of the market. Right. Make it more viable economically. >>Yeah, definitely. And then, and what we're having, what's driving us that wasn't around seven when we started this about four and a half years ago. Uh, my joke and I don't mean to offend them, but after doing pitching the vision of this in six months, don't be, >>Don't be afraid. We're do we, >>My, my joke. And I'm sort to see more bold about is that VCs don't think they're gonna get old. They're just gonna get rich. And so the idea is that they didn't see themselves in this position and we not Gloo and doom, you can work out, you can be active, but we're living older, longer. We are it's. My mom is born in the depression. She's been in a wheelchair for five years. She might be around for a good, another 10 or 15. And that's wonderful for her, but her need for care is really high. >>Yeah. And the pressure on the family too, there's always, there's always collateral damage on all these impacts. >>There's 53 million unpaid family caregivers in the us. Yeah. Just in the time that we've grown, been doing this, it's grown 4% a year and it's a complicated thing. And it's, it's not just the pressure on you to help your mom or dad or whoever. It's the frustration on their face when they have to always ask for that help. So it's, it's twofold. It's give them some freedom back so they can make a choice. Like my classic example is my mom wants tea. My dad's trying to watch the game. He, she asks for it. It's not hot enough. Sends it back. And that's a currency. Yeah, yeah. That she's losing and, and it's frustration as opposed to give her a choice to say, I'm gonna do this on my own. And I that's just, >>You wanna bring the computer out, do a FaceTime with the family, send it back. Or you mentioned the Alexa there's so many use cases. Oh >>No. We talked about, uh, we talked about putting like a, a device with a CA with a screen on it so she could chat and see pictures. And it says, I don't want to have this in my bedroom. That's my private space. Yeah. But if we could have the robot, bring it in when it's appropriate and take it on go the retriever that's that's >>The whole go fetch what I need right now. That's and then go lie down. Yeah. >>That's what I, I called >>Labrador. Doesn't lie down >>Actually. But well, it lowers down, it lowers down about 25 inches. That's about lying. >>Down's super exciting. And congratulations. I know, um, how passionate you are. It's obvious. Yeah. And being in the business so long, so many accomplishment you had. Yeah. But now is a whole new Dawn. A new era here. >>Yeah. Oh yeah. No, I, we just, it was real. It was on impromptu. It wasn't scheduled. There's a, a post circle on LinkedIn where all the robots got together. <laugh> you know, and they were seeing to hang out. No, and you're seeing stuff that wasn't possible. You look at this and you go, well, what's the big thing. It's a box on wheels. It's like, it wasn't possible to navigate something around the complexity of a home 10 years ago for the price we're doing. Yeah. It wasn't possible to wa have things that walk or spot that can go through construction sites. I, I think people don't realize it's it. It really is changing. And then we're, I think every five years you're gonna be seeing this more bold deployment of these things hitting our lives. It's >>It's super cool. And that's why this show's so popular. It's not obvious to mainstream, but you look at the confluence of all those forces coming together. Yeah. It's just a wonderful thing. Thanks for coming on. Appreciate >>It really, really appreciate you for this >>Time. Great success. Great demo. Mike, do cofounder, the CEO of Labrador systems. Check him out. They have the retriever, uh, future of robotics here. It's all impact all life on the planet. And more space. Two is to keep coverage here at re Mars, stay tuned for more live coverage. After this short break.

>>Hey, welcome back to live coverage in San Francisco, California, the cubes coverage of 80 west summit, 2022 here in SF and NYC New York city. Summit's coming up in the summer. We'll be there as well. Check it out. Okay. We've got a great guest here. C Bhan co and CEO RAI systems. Welcome to the cube, hot startup and growing company. And Kubernetes is great to see you. >>Yeah, John, thanks for having me. Appreciate it. >>Great to have you on. So Cubans coming up, you got cloud native here at AWS. You guys in the middle of it, take a minute to explain what your company does. Sure. >>So 50,000 enterprises are going to modernize in the next five to 10 years. They're all going to run into the exact same problem, which is they're gonna choose Kubernetes as the orchestra platform. And then they're gonna invest in building a platform essentially on top of Kubernetes so that their internal consumers, that developers can consume it. That requires a lot, a lot of effort. We, lot of people, a lot of time, a lot of effort, what we did was we thought about entire journey for Kubernetes operations that a team would go through and we package that as an offering. It's a SaaS product that you can consume. You can make it work with Amazon's Kubernetes, Azures Kubernetes, Googles, Kubernetes, upstream, Kubernetes, but then you can move significantly faster so that the goal of modernization can be achieved now versus two years more. >>What's the big, uh, opportunity that Kubernetes brings. And what are some of the pain points that are being removed or solved or blockers being removed and pain being reduced? Is it standing up Kubernetes? Is it running it in production? Is it the new revisions? I mean, honestly, it's huge. Yeah. What's the pain point. The customers that you guys solve. >>Yeah. Look, the, the paradox with Kubernetes is when it's working. It's awesome. It's great. And we can move it fast, but to get there, it's hard. Yeah. So simple things as a starting point, how do I provision my infrastructure repeatedly in the same way with the right blueprints? How do I make sure they all look the same? How do I make sure John can access certain things? And he cannot, how do I make sure the right policies are set up? How do I make sure consistent deployment is happening? Can I watch every we think, and I measure everything and we are not beyond basic things, right? Yeah. I need to back this up, you know, on and on. I need to do cost management. I need to network policy management. I need service management. You already built the team now. Right? Each of these is, is, is multiple people's jobs sometimes. Right? So it's really complicated. But again, everybody is investing. This is complexity. It's complexity. Yes. But people are investing in this because everybody understands now that once this is all working, the beauty, the, the P the pace at which you can run is exactly what we were promised five, six years ago when we were all told about modernization. Yeah. So the, when you get there, it's awesome. And we are helping companies get there significantly faster. Then they would've had, were they not working with a company? >>It's it really is a holy grail kind of orchestration layer if it works. And a lot of people, even myself, which a big fan of Kubernetes, caution, cautions over the oo problem, which is the clusters are up. I can't find talent to run them. They're too hard. Um, that's kind of in the back of people's minds and there's a lot of scar tissue around that. Uh, and then a little bit of open stack, you know, is it too hard, too hard? So the question is, is that what needs to happen to be successful with Kubernetes to make that go faster? So that's easy to deploy. Exactly. Yeah. And what what's your product do? Is it software open source? Yeah. What's, what's your product? >>The, the key here is repeatably usable automation. It's automation that it can use again and again, and it's flexible enough that it solves for many companies problem. You know, the funny thing is, and this is something that took me a while to figure out whether we have a financial services customer or an insurance company, or a healthcare company, or a high tech company, you know, what their problems are exactly the same. <laugh> when it comes to Kubernetes, it's all the same, right? So we figured out what it takes to build that automation in a repeatable fashion so that we could essentially sell it as a product. Our product is a SaaS product. Um, and once you have the right automation in place that you can ideally consume as a service, then now the beauty is that the people who are using it on a day to day basis, they don't need to be as expert at Kubernetes as today. Yeah. And that's the issue today? The issue is, you know, people, I've seen ads now where people say, you know, looking for Kubernetes expertise, 10 years, minimum experience, okay, that's ridiculous. Right. But you see these ads out there, right? Because people are rude about it, a tool like this makes it easy for you to take your existing skillset, existing resources and allow them to become Kubernetes. >>That's the key. I think that's the key in my mind is like hiring talent for these, I call DevOps glass eating projects, cuz it's hard. Yep. Some of this stuff's hard when you get down to the early stuff. And even in the hyperscalers, you look at the early hyperscalers, they were rolling their own and they were rock stars. And they were like the 1% of top developers. Right? Yep. And now you have general audiences who just want to code. Yep. They want abstractions. They want Kubernetes as a service. Uh, and they want all the benefits. And even if they could hire the Oddsly hiring the low level core people yeah. Is hard. Yeah. >>It takes time. Yeah. >>Absolutely. That's a core problem you guys solve. >>Absolutely. I think look, the, the one thing that every enterprise you think about is when the, the big companies, the hyperscale is that you mentioned that build this themselves when they us out 5, 6, 7, whatever years ago, when, you know, even some, some of them pre Kubernetes, it was a competitive advantage to roll this out because nobody else was doing it now as, as an enterprise who is trying to use software to move faster. Yeah. It's actually a competitive disadvantage because now you're building your own product. And now you're building this thing called Kubernetes that doesn't make any sense, focus your application, focus on your products, roll them out faster, and then essentially reuse the learnings from the market. Right. That's what we are doing. Really? What, what are we doing? We're taking the best practices of this industry and packaging that up into an easy to consume platform. That's awesome. That's it? >>Well, we'll see you in Cooper, Cuban, not Kubernetes contest in Valencia. Yep. Uh, and thanks for coming on. I know we didn't have a lot of time to drill into it, um, here, but great to meet you and the company. Final question as a co-founder what's your north star, you got, you got a company to run in. Bill got employees, you're managing and hiring inspiring. What's the north star for the company. >>So I'd say, I mean, the phrase that I, that, that I think about when, when you say north star is, is loyalty with urgency. >>So loyalty to whom? Yeah. It's to my team, right? My team comes first beyond before anything else. Right? And then my customers, right? My customers, many, many of our, our customers even now, right? We a four old company, they have my cell phone number and people call me at odd hours and I will show up. I will get people on a call. I will show up. Right. That's critical. But with urgency now my customer needs help. It needs to happen now. Not tomorrow, not next week. My team has heard me say this a thousand times, by the way, not tomorrow, not next week now. And this, if you do this in a startup, you will be successful. >>Yeah. I mean, you gotta make the market as the founder, inspiring people, product market fits huge. Yep. Getting that scale point. Yep. Where you're got the value proposition in position you're in mode to scale, you got visibility on unit economics. It's hard. Yep. It's super hard look. Good news is you get in a good area. Cloud native Kubernetes, automation, cloud, native modernization of apps. Super hot right now. Yeah. Big >>Time. Yeah. Look, I mean, you know, of course you, you want your teams to be topnotch. Right. But I gotta tell you there's a lot of luck and timing to everything. >>Exactly. >>Timing is in hindsight, nobody times anything. Right. So we have, time is perfect, but it's luck. Yeah. Right. We're very lucky. We're we have the right team. We're doing a great job. I think our customers are very happy. What we've rebuilt and uh, you know, look forward >>To Steve. You're humble. And you're a humble person. I can tell. I don't believe in luck. I think you make luck. I think luck is just part of the hustle, making those phone calls, doing those calls, doing the right things, grinding. And then when you get the shot, you're ready. Yeah. Yeah. So congratulations. Thanks for coming the queue. Appreciate it. Appreciate your time, sir. Nice to meet you coverage here in San Francisco, back with more day, two coverage. After this short break, stay with us.

from the cube studios in palo alto in boston bringing you data-driven insights from the cube and etr this is breaking analysis with dave vellante aws is pointing the way to a revolution in system architecture much in the same way that aws defined the cloud operating model last decade we believe it is once again leading in future systems design the secret sauce underpinning these innovations is specialized designs that break the stranglehold of inefficient and bloated centralized processing and allows aws to accommodate a diversity of workloads that span cloud data center as well as the near and far edge hello and welcome to this week's wikibon cube insights powered by etr in this breaking analysis we'll dig into the moves that aws has been making which we believe define the future of computing we'll also project what this means for customers partners and aws many competitors now let's take a look at aws's architectural journey the is revolution it started by giving easy access as we all know to virtual machines that could be deployed and decommissioned on demand amazon at the time used a highly customized version of zen that allowed multiple vms to run on one physical machine the hypervisor functions were controlled by x86 now according to werner vogels as much as 30 of the processing was wasted meaning it was supporting hypervisor functions and managing other parts of the system including the storage and networking these overheads led to aws developing custom asics that help to accelerate workloads now in 2013 aws began shipping custom chips and partnered with amd to announce ec2 c3 instances but as the as the aws cloud started to scale they really weren't satisfied with the performance gains that they were getting and they were hitting architectural barriers that prompted aws to start a partnership with anaperta labs this was back in 2014 and they launched then ec2 c4 instances in 2015. the asic in c4 optimized offload functions for storage and networking but still relied on intel xeon as the control point aws aws shelled out a reported 350 million dollars to acquire annapurna in 2015 which is a meager sum to acquire the secret sauce of its future system design this acquisition led to a modern version of project nitro in 2017 nitro nitro offload cards were first introduced in 2013 at this time aws introduced c5 instances and replaced zen with kvm and more tightly coupled the hypervisor with the asic vogels shared last year that this milestone offloaded the remaining components including the control plane the rest of the i o and enabled nearly a hundred percent of the processing to support customer workloads it also enabled a bare metal version of the compute that spawned the partnership the famous partnership with vmware to launch vmware cloud on aws then in 2018 aws took the next step and introduced graviton its custom designed arm-based chip this broke the dependency on x86 and launched a new era of architecture which now supports a wide variety of configurations to support data intensive workloads now these moves preceded other aws innovations including new chips optimized for machine learning and training and inferencing and all kinds of ai the bottom line is aws has architected an approach that offloaded the work currently done by the central processing unit in most general purpose workloads like in the data center it has set the stage in our view for the future allowing shared memory memory disaggregation and independent resources that can be configured to support workloads from the cloud all the way to the edge and nitro is the key to this architecture and to summarize aws nitro think of it as a set of custom hardware and software that runs on an arm-based platform from annapurna aws has moved the hypervisor the network the storage virtualization to dedicated hardware that frees up the cpu to run more efficiently this in our opinion is where the entire industry is headed so let's take a look at that this chart pulls data from the etr data set and lays out key players competing for the future of cloud data center and the edge now we've superimposed nvidia up top and intel they don't show up directly in the etr survey but they clearly are platform players in the mix we covered nvidia extensively in previous breaking analysis and won't go too deep there today but the data shows net scores on the vertical axis that's a measure of spending velocity and then it shows market share in the horizontal axis which is a measure of pervasiveness within the etr data set we're not going to dwell on the relative positions here rather let's comment on the players and start with aws we've laid out aws how they got here and we believe they are setting the direction for the future of the industry and aws is really pushing migration to its arm-based platforms pat morehead at the 6-5 summit spoke to dave brown who heads ec2 at aws and he talked extensively about migrating from x86 to aws's arm-based graviton 2. and he announced a new developer challenge to accelerate that migration to arm instances graviton instances and the end game for customers is a 40 better price performance so a customer running 100 server instances can do the same work with 60 servers now there's some work involved but for the by the customers to actually get there but the payoff if they can get 40 improvement in price performance is quite large imagine this aws currently offers 400 different ec2 instances last year as we reported sorry last year as we reported earlier this year nearly 50 percent of the new ec2 instances so nearly 50 percent of the new ec2 instances shipped in 2020 were arm based and aws is working hard to accelerate this pace it's very clear now let's talk about intel i'll just say it intel is finally responding in earnest and basically it's taking a page out of arm's playbook we're going to dig into that a bit today in 2015 intel paid 16.7 billion dollars for altera a maker of fpgas now also at the 6.5 summit nevin shenoy of intel presented details of what intel is calling an ipu it's infrastructure processing unit this is a departure from intel norms where everything is controlled by a central processing unit ipu's are essentially smart knicks as our dpus so don't get caught up in all the acronym soup as we've reported it's all about offloading work and disaggregating memory and evolving socs system-on-chip and sops system on package but just let this sink in a bit a bit for a moment intel's moves this past week it seems to us anyway are designed to create a platform that is nitro like and the basis of that platform is a 16.7 billion dollar acquisition just compare that to aws's 350 million dollar tuck-in of annapurna that is incredible now chenoy said in his presentation rough quote we've already deployed ipu's using fpgas in a in very high volume at microsoft azure and we've recently announced partnerships with baidu jd cloud and vmware so let's look at vmware vmware is the other you know really big platform player in this race in 2020 vmware announced project monterrey you might recall that it's based on the aforementioned fpgas from intel so vmware is in the mix and it chose to work with intel most likely for a variety of reasons one of the obvious ones is all the software that's running on on on vmware it's been built for x86 and there's a huge install base there the other is pat was heading vmware at the time and and you know when project monterey was conceived so i'll let you connect the dots if you like regardless vmware has a nitro like offering in our view its optionality however is limited by intel but at least it's in the game and appears to be ahead of the competition in this space aws notwithstanding because aws is clearly in the lead now what about microsoft and google suffice it to say that we strongly believe that despite the comments that intel made about shipping fpgas and volume to microsoft that both microsoft and google as well as alibaba will follow aws's lead and develop an arm-based platform like nitro we think they have to in order to keep pace with aws now what about the rest of the data center pack well dell has vmware so despite the split we don't expect any real changes there dell is going to leverage whatever vmware does and do it better than anyone else cisco is interesting in that it just revamped its ucs but we don't see any evidence that it has a nitro like plans in its roadmap same with hpe now both of these companies have history and capabilities around silicon cisco designs its own chips today for carrier class use cases and and hpe as we've reported probably has some remnants of the machine hanging around but both companies are very likely in our view to follow vmware's lead and go with an intel based design what about ibm well we really don't know we think the best thing ibm could do would be to move the ibm cloud of course to an arm-based nitro-like platform we think even the mainframe should move to arm as well i mean it's just too expensive to build a specialized mainframe cpu these days now oracle they're interesting if we were running oracle we would build an arm-based nitro-like database cloud where oracle the database runs cheaper faster and consumes less energy than any other platform that would would dare to run oracle and we'd go one step further and we would optimize for competitive databases in the oracle cloud so we would make oci run the table on all databases and be essentially the database cloud but you know back to sort of fpgas we're not overly excited about about the market amd is acquiring xi links for 35 billion dollars so i guess that's something to get excited about i guess but at least amd is using its inflated stock price to do the deal but we honestly we think that the arm ecosystem will will obliterate the fpga market by making it simpler and faster to move to soc with far better performance flexibility integration and mobility so again we're not too sanguine about intel's acquisition of altera and the moves that amd is making in in the long term now let's take a deeper look at intel's vision of the data center of the future here's a chart that intel showed depicting its vision of the future of the data center what you see is the ipu's which are intelligent nixed and they're embedded in the four blocks shown and they're communicating across a fabric now you have general purpose compute in the upper left and machine intelligent on the bottom left machine intelligence apps and up in the top right you see storage services and then the bottom right variation of alternative processors and this is intel's view of how to share resources and go from a world where everything is controlled by a central processing unit to a more independent set of resources that can work in parallel now gelsinger has talked about all the cool tech that this will allow intel to incorporate including pci and gen 5 and cxl memory interfaces and or cxl memory which are interfaces that enable memory sharing and disaggregation and 5g and 6g connectivity and so forth so that's intel's view of the future of the data center let's look at arm's vision of the future and compare them now there are definite similarities as you can see especially on the right hand side of this chart you've got the blocks of different process processor types these of course are programmable and you notice the high bandwidth memory the hbm3 plus the ddrs on the two sides kind of bookending the blocks that's shared across the entire system and it's connected by pcie gen 5 cxl or ccix multi-die socket so you know you may be looking to say okay two sets of block diagrams big deal well while there are similarities around disaggregation and i guess implied shared memory in the intel diagram and of course the use of advanced standards there are also some notable differences in particular arm is really already at the soc level whereas intel is talking about fpgas neoverse arms architecture is shipping in test mode and we'll have end market product by year end 2022 intel is talking about maybe 2024 we think that's aspirational or 2025 at best arm's road map is much more clear now intel said it will release more details in october so we'll pay attention then maybe we'll recalibrate at that point but it's clear to us that arm is way further along now the other major difference is volume intel is coming at this from a high data center perspective and you know presumably plans to push down market or out to the edge arm is coming at this from the edge low cost low power superior price performance arm is winning at the edge and based on the data that we shared earlier from aws it's clearly gaining ground in the enterprise history strongly suggests that the volume approach will win not only at the low end but eventually at the high end so we want to wrap by looking at what this means for customers and the partner ecosystem the first point we'd like to make is follow the consumer apps this capability the capabilities that we see in consumer apps like image processing and natural language processing and facial recognition and voice translation these inference capabilities that are going on today in mobile will find their way into the enterprise ecosystem ninety percent of the cost associated with machine learning in the cloud is around inference in the future most ai in the enterprise and most certainly at the edge will be inference it's not today because it's too expensive this is why aws is building custom chips for inferencing to drive costs down so it can increase adoption now the second point is we think that customers should start experimenting and see what you can do with arm-based platforms moore's law is accelerating at least the outcome of moore's law the doubling of performance every of the 18 to 24 months it's it's actually much higher than that now when you add up all the different components in these alternative processors just take a look at apple's a5 a15 chip and arm is in the lead in terms of performance price performance cost and energy consumption by moving some workloads onto graviton for example you'll see what types of cost savings you can drive for which applications and possibly generate new applications that you can deliver to your business put a couple engineers in the task and see what they can do in two or three weeks you might be surprised or you might say hey it's too early for us but you'll find out and you may strike gold we would suggest that you talk to your hybrid cloud provider as well and find out if they have a nitro we shared that vmware they've got a clear path as does dell because they're you know vmware cousins what about your other strategic suppliers what's their roadmap what's the time frame to move from where they are today to something that resembles nitro do they even think about that how do they think about that do they think it's important to get there so if if so or if not how are they thinking about reducing your costs and supporting your new workloads at scale now for isvs these consumer capabilities that we discussed earlier all these mobile and and automated systems and cars and and things like that biometrics another example they're going to find their way into your software and your competitors are porting to arm they're embedding these consumer-like capabilities into their apps are you we would strongly recommend that you take a look at that talk to your cloud suppliers and see what they can do to help you innovate run faster and cut costs okay that's it for now thanks to my collaborator david floyer who's been on this topic since early last decade thanks to the community for your comments and insights and hey thanks to patrick morehead and daniel newman for some timely interviews from your event nice job fellas remember i published each week on wikibon.com and siliconangle.com these episodes are all available as podcasts just search for breaking analysis podcasts you can always connect with me on twitter at d vallante or email me at david.velante at siliconangle.com i appreciate the comments on linkedin and clubhouse so follow us if you see us in a room jump in and let's riff on these topics and don't forget to check out etr.plus for all the survey data this is dave vellante for the cube insights powered by etr be well and we'll see you next time

>>From around the globe. It's the cube with digital coverage of IBM. Think 20, 21 brought to you by IBM, >>Everybody welcome back to IBM. Think 2021. My name is Dave Vellante and you're watching the cubes continuous coverage of this event. We go out to the events, we extract the signal from the noise, but doing that virtually for the better part of a 14 months. Now we're going to get deeper into application modernization. Marie ASHRAE is here. She's the director of marketing at mainline information systems and David burrows. Burrows is an account executive at mainline folks. Welcome to the cube. Great to have you on today. >>Thank you. Nice to be here >>To start with with mainline. Uh, people might not be familiar with, with mainline, but you've transformed over the past five years. I wonder if you could describe that for our audience? >>Yes, we have. Indeed. We have, um, mainline, um, you know, it's a 30 plus year company and, um, and for 30 odd years we had really been focused a lot in hardware, right? Hardware reselling. That's what the market needed. That's what we did a lot of. But then in the past, I would say five to eight years, maybe even 10 years, we started on this transformation project, um, for the business where we started transforming ourselves into really systems integrators versus just hardware reseller. So now we can go to a client and we can say, Hey, now what are you struggling with? Right? What are your business challenges? And then from there, we can integrate a solution that might be hardware. It might be software, it might be some services, it could be managed services. It could be staffing services, um, could be a number of different things and put all that together and then deliver a complete solution that helps them with their, their business requirements. Okay, >>David, that, that must've been an interesting transition because what Marie just described is it used to be every opportunity was a nail and whatever box you were selling was the hammer. And, and that, that has changed dramatically. Of course. So you, you, I wonder what that discussion was like with, with, with clients. You must have heard that early on and said, Oh, this cloud thing is happening. The world is changing. We've got to change too. I wonder if you could chime in on that transformation. >>Yes. That's our, uh, as our clients have been changing, what we've been doing is, uh, you know, making sure that we fully understand what's available not only in the marketplace, but the competition and what, what each industry segment, for example, baking versus insurance versus a utility maybe facing, uh, during this this time. And so, you know, being able to transform as a, as an accounting dedicated, we've been able to, uh, indicate and so provide solutions as Marie indicated. Um, the large focus over the last five years has been networking and security as we move, uh, more compute to the edge, close to the edge. Security has been predominant. Uh, and so, you know, hardware is really almost commoditized through and through and with the exception of, you know, IBM, Z and, and power. Uh, and so, you know, we've had to really, uh, sellers, you know, focus on what customers are dealing with and how they transition. Uh, and as we, uh, you know, through COVID, it's actually been a bigger challenge, a bigger focus on security. And I think we'll talk about that a little bit later in more detail >>Let's, let's, let's do that now. So, so Marie, maybe at a high level, you could talk about those challenges that your clients are facing. And then we can sort of double click on how that was exacerbated by, by COVID. And I'm really interested in your perspectives on sort of the post isolation economy and how those challenges are going to shift, but, but maybe, maybe kick us off at the high level if you could. >>Sure. So, um, so, you know, people, companies were moving toward, um, uh, th the whole digital transformation, right? Probably for the past three to four years, we started seeing more and more that's constantly, everybody sees those buzz words all the time. Um, so clients were shifting in that direction and we were shifting to try to satisfy them with their needs with those solutions, but then came COVID and all of a sudden, right. What people were, were planning on doing for the next, let's say five years. I mean, most of the iOS were saying, yeah, we're going to get there in five years. Well, that had to happen. Right. It had to have brakes went on and it had to happen instantaneously. So that put a big change in focus, a big change in direction for not only our clients. Right. But for our own folks, folks like David, who are trying to service these clients with having to bring them these solutions that we're going to solve their digital business needs, um, today and not five years from now. >>Yeah. So David let's, let's talk about that. I mean, what Marie just described, I call it the forced March to digital, because as Maria, as you were saying, people were on a digital transformation, but there was a little bit of complacency and okay, we'll get there. We're really busy doing some other stuff. And then all of a sudden you've probably seen the meme of the COVID wrecking ball coming, coming into the building, the office building and saying, you know, well, we're doing fine. And all of a sudden, boom, the forest COVID comes in. So, so, so, so how did that affect your clients and how did you respond? I mean, they're asking for VDI and get me some laptops, I need end point security. And so how did that affect the, the application modernization efforts and David, maybe you could comment on that. >>So I, I think for, for me, the biggest challenge was all business, the competition within business to survive COVID, uh, you know, they had to put on first thing was how do we get our, our customer, uh, supported correctly and how do we get our workers supportive, working at home? So the very first thing we did over the initial six months was most companies had to transform immediately within the first 30 to 90 days to allow their workforce to work from home. Uh, that happened throughout my, my customer base, uh, both in Southern California, uh, was customers really focused on, uh, how do we business process, how do we compete in this marketplace and get return on investment speed, you know, time to value or what we invest in these, uh, COVID times so that we can compete with other, uh, businesses that are trying to stay alive, uh, through this transition. And, and now, you know, we're seeing on, uh, on the backend, uh, you know, that time, the value in terms of investment is even more important because some businesses have been significantly impacted from not only cashflow, uh, but you know, certainly in terms of profitability during this time >>Makes sense. And so I'm read, so we were talking earlier about the, sort of the initial path to digital transformation, and I wonder if that's gotta be course corrected. I would think we were forced in to compress, you know, the digital reality, uh, and, and I guess in a way that's good. Uh, but in a way it was, we probably made a lot of mistakes. It was a bit of a Petri dish. So now as we begin to knock on exit COVID, you would think those, those imperatives, uh, adjust and they start to become aligned. What's your take on that, especially as it relates to application and infrastructure modernization. >>Um, so I would agree with that. I think that there's definitely has to be a little bit of a, of a real alignment happening. And I know recently I read that, um, 20, 21 is expected to be a very, um, large year in it spend because all of those, um, initiatives that CEOs and others were going after pre COVID kind of got put on hold, right. So they could then go focus on all of those digital needs that were needed, like, you know, the CDI, you know, work at home, all the security stuff for that. So I think we're going to see, I'm thinking, we're going to see a shift again now, and maybe businesses are going to go back and try to pick up where they were, uh, prior to COVID and now start working on more of really of the application modernization, um, initiatives that were in mind. And I know we wanted to talk about that as well, because David's been working on quite a bit of application modernization with, um, a few of his clients, um, as we're seeing again, businesses change. Um, and, and I don't know that all of that changes because of COVID. I think all of that change was for their competitiveness, um, to get there anyway. So I think that's going to start, as you said before, Dave, I think it's going to start now having to >>Kind of rethink, >>It reminds me of traffic on the David, if you've ever been to driving in, in London when it's slingshots, right. It's that's what's COVID was like Murray you're absolutely right. Last year it spend was down four to 5% this year. I mean, our prediction is going to be in the six to 7% range, which, which kind of aligns with where Gartner and IDC are based on our surveys. But, you know, back in, in April, like I think the 16th of April, it was a headline in the wall street journal that the China grew 18% GDP in the quarter. So it's very hard to predict, but, but it's coming back, you know, we, we can see that David and so, so spending is really gonna accelerate. There's probably some pent-up demand for that application modernization. Maybe it's been a little bit, uh, neglected as we've done, as Maria was saying. And you were saying the work from home. So maybe you could talk a little bit more about the modernization aspects and maybe I'm really interested in the things that you guys deliver in your portfolio with IBM. >>Sure. Uh, so what I have customers in multiple phases within this, uh, current digital transformation, their customer, uh, moving everything to next gen, uh, development, which is, uh, only containerized code, uh, being able to, you know, swiftly go through their development tests, uh, and, uh, hybrid cloud environments where they're, um, they haven't made an investment yet, but they're sampling what it might be like to, uh, change into that world. And then there are customers are still in the, uh, typical environment, uh, the traditional environment, and are looking at what the solutions, as far as packages are available for them moving forward. So they can kind of skip over, uh, any kind of development and being able to, uh, leverage, uh, what I call them next, gen development or next gen systems, uh, immediately, as you know, you asked, you know, what are the, what are the systems that are available? IBM's cloud pack, uh, solution set. It provides a portfolio of capabilities, uh, both in the application, suite, database, suite security. Uh, I have customers today leveraging that. Uh, and, and so that is one of the first pieces, uh, that, that customers I see who are on the leading edge, or are also kind of trailing, are looking at, uh, these cloud packs to be able to, uh, uh, go time to market and time to value, uh, quickly. >>Yeah. So when I look at your portfolio, I just sort of scan the web. Uh, David just mentioned Marie cloud pack. I mean, we're talking software here. You guys do have a lot of expertise in ZZ Linux power, you mentioned is not a commodity. And it's one of the few pieces of hardware that, and Z they're not a commodity storage. I would think business resiliency fits in there beyond disaster recovery, your red hat, we're talking, you know, things like open OpenShift and Ansible for automation. So these are, these are not your grandfather's main line. These are toolkits are a piece of, you know, parts of the tool bag that you bring to bear to focus on on client outcomes and solutions is, am I getting that right? >>Yes, absolutely. Absolutely. Um, and again, right, that goes back to the original opening comment about how we've transformed as a business, right. To become, uh, an integrator, um, putting all of these different pieces together. I mean, I know that, um, something that, that David recently had worked on, Oh my goodness. If you would have looked at the list of pieces of elements to that solution, um, it was really quite incredible between, um, open source stuff, you know, and a bunch of IBM stuff. Um, yes, it was some storage and yeah, there was some power, um, yes, there was red hat. Right. But then there was other stuff there was VMware. Um, there was, um, some things that, um, I can't even remember now all the names to all the components, but it was, it was a laundry list. Right. And so that's where though mainline stepped in and put the pieces together, uh, for the customer so that the customer then can get done what they needed to get done, which was, which was really solve their business problem, which was trying to become more competitive in their market space. >>Okay, David, so when Maria was sustained was basically, my takeaways is as a system integrator, you've got all these piece parts with these technologies, you've got virtualization, you've got automation, you've got containers and so forth. Uh, and yes, there's there's hardware, but there's this integration that has to occur. And your job is to abstract that complexity, that underlying complexity away so that the customers can focus on the outcome. Maybe you could talk about that and how you do that. >>Sure. I'll give you a good example of a recent customer that we work with who was, uh, basically, I mean, we consider an enterprise data platform that, that, uh, was going to rework their entire data warehouse into something that had governance surrounding it, uh, where they could validate all the data that was coming into their warehouse. And so we underpinned that, uh, with an infrastructure of power, uh, we're running, uh, obviously IBM, uh, uh, pack for data, uh, with DB two warehouse. Uh, we use a combination of that with, uh, Cloudera data flow through IBM, uh, with the streaming and, uh, the governance, uh, IBM governance catalog piece, which is, uh, lots of knowledge catalog. So, uh, we've been able to take not only what their base requirements were, but all the microservices that are packaged in with cloud pack, uh, all running on OpenShift, uh, which was a great acquisition that IBM did last year. And, uh, then, uh, they also required other microservices outside, uh, to support that environment and paint a picture for >>Us as to what the future looks like. Uh, it's, it's much different than the past 30 years, uh, and bring us home please >>Or so, um, I think the future for us is to continue to, um, to find all of the solutions, um, that will, that will help our customers, um, you know, get to their next steps. Right. And, and there's a lot, as you know, there's lots of solutions out there. There's lots of new companies that are popping up all the time. Um, you know, inherently, you know, mainline is an IBM partner. We've been an IBM partner for 30 plus years since our inception. And that's the base of our business is, is IBM. But, but there are other requirements that are needed by, by businesses, by our customers. And that's where we, we reach out and partner up. We probably have gone my goodness, 200 plus partnerships with various companies, various technology companies that we can then, um, lean on and pull in those ancillary solutions, um, to, to, to complete that, that solution for the customer. >>So I think we're going to continue going down that path. We're going to continue making sure that we're partnered with the, um, the, the leading technology companies. So we can build that IBM solution for our customer and, and bolt on the other pieces that are needed. Uh, we're going to continue to grow and enhance our services business because we've got quite a large services business, whether it's implementation services, uh, we do managed services. We have staffing services. I think you're going to see if we're still going to continue to, to grow that business, because that is a piece where companies, you know, they don't want to worry about running all of that stuff, right. They want to know that their system's going to be running 24 seven. And if there is a bump or a burp or something happens, Hey, they could pick up the phone, they can call mainline. We can help them get things corrected. So I think we're going to still see a lot of that going on as well, um, within our, our, our offerings. >>Excellent. Well, congratulations for making it through that. Not a whole lot, not, not every, uh, hardware seller reseller made it through and you guys transformed. It's a, it's an inspiring story. Maria, David, thanks so much for coming on the cube. Thank you. Thank you very much. You're really welcome. And thank you for watching everybody. This is Dave Volante in our continuous coverage and the cube of IBM think 20, 21. Keep it right there.

>> Narrator: From around the globe, It's the Cube. With digital coverage of AWS reinvent 2020. Sponsored by Intel, AWS, and our commudity partners. >> Okay, Welcome back. You're ready. Jeff Frick here with the cube. We are, coming to you from our Palo Alto studio with our continuing coverage of AWS reinvent 2020 digital this year, like everything in 2020 but we're excited to welcome back to The Cube. He's been on a number of times, he's Russ Currie. The vice president enterprise strategy for Netscout systems. Russ great to see you. >> Great to see you, Jeff. Thank you. >> Absolutely. So before we jump into there's so(laughs), so many things going on in 2020. What I do want to do is, is reflect back a little bit. You were first on The Cube at AWS reinvent 2017. So it's been about three years. And I remember, one of the lines you had said, I believe that was your guys' first, AWS show as well. So I wonder if you could reflect on kind of how the world has changed in terms of your business, and the importance of AWS and public cloud within the infrastructure systems of your clients. >> Yeah, well, it was interesting, right? We were just getting our feet wet at that point, and had just introduced some of our technology for use in AWS, and it was kind of a interesting little adventure. So we were looking at it and saying, okay where's this going to lead us? And ultimately now we're just really waist deep in it, and really having a great partnership with AWS, and delivering new technologies, new capabilities, and our customer base also is becoming so much more reliant on public cloud in particular AWS and the services that they can provide. So as we've gone and they've gone it's been a journey that we've taken together, and it's been quite, fruitful and exciting. >> Right, right. And it really reinforces this concept of I think you'd mentioned it before, a blended, you know kind of a blended infrastructure approach. So there's a lot of conversations about public cloud, hybrid cloud, multicloud, et cetera, et cetera. But at the, at the end of the day from a customer perspective, as you've mentioned it's really kind of a blended network, right. And it's really application centric, and you put the applications where those applications need to be to be the most appropriate, and that might even change over time from, from test dev to really roll out to, to scale. So you're seeing that consistency. Consistency, >> Absolutely. Yeah. The, the blended environment that in it it's so incredibly complex of our customers. As they take a look at the way that the world has changed, right? When we take a look at what has happened with people working remotely, working from home and having to come into access services in such a, a completely blended and hybrid environment as you say, not only the move to the cloud, but the move to Colo, and bringing all of this together for interconnect, it's definitely a complex environment that they have to have their fingers on the pulse of. Right? >> Yep, yep. And then of course there was this little thing that happened this year with COVID. And really right in March, April timeframe light switch moment, everybody worked from home, whether you're ready or not. And that was a very different kind of situation. Cause we had to get people secure and safe, and get them up and operating. So I'm sure you(laugh) saw a lot of interesting stuff at your business there, but I'm even more interested in how that's evolved over time. Here we are at the end of 2020, there's going to be you know, some version of this for the foreseeable future. And a lot of companies are saying that, you know there'll be a lot of, kind of work from anywhere pieces that continue forward. So again, with your customers and looking kind of the change between what happened in the spring, and now what's happening as they really of kind of put in the systems that'll enable them to continue to support, you know people working from anywhere, not even really working from home, but working from anywhere. >> Right. Exactly. I mean, as our customers had to bring up more connectivity, new connectivity, and start to add licenses for virtual desktop or for their VPN connectivity ultimately how they got it done, most of our customers said, you know we're running hot, but stable. And I think that that was, that was great for most folks. But now they're leaning into it and saying, okay how do we continue to make this happen? And how do we provide the visibility that we need to ensure that the services that we're delivering are, making it possible for their users to be productive and successful. A user doesn't want to feel that they're not contributing as much as someone else that may be able to make it into the office. And, it's a, it's a challenging time, but with that being said, technology has really stepped up, and in particular, the way that they're able to stand up services in the cloud, and the automation, and potential cost savings that they get from standing up in the cloud has really been a bood for most of our users. And some of the users, you know, the high end enterprise that we're a little bit slow to adopt, now are just turning it on as fast as they possibly can. >> Yeah, it's pretty wild. And then, we had another representative from Netscout on earlier this year. One of the, the kind of recurring themes that we've seen is you know, changes in the threat landscape. So clearly the increased attack surfaces as more and more people are working from home. They're not working from the secure environment at the office. But you guys notice some interesting things about what's happening, and we've, we've seen a little bit too in terms of kind of, ransomware and the increase in ransomware as a particular type of attack that, that seems to be growing in popularity. And these, these people are a little bit more thorough in the badness that they caused before they, they throw in the ransom request, and that they're looking for a little bit more fundamental disruption to enable them to basically extract that ransom is which they hope to do. >> Yeah. I mean the amount of DDoS attacks that we've seen has just grown incredibly over the past several months. And these extortion attacks they come in and they often hit the customer quickly and hard, and then say, turn it back for a bit and say, pay us, or we're going to shut you down. And they're really coming in more towards the back office aspects of things. So, going in and attacking that part of the business is kind of a new environment for a lot of folks. But one of the other interesting(laughs) challenges here with us is that, oftentimes those extortion notes don't make it through to the people that really need to act on them because they get caught in spam filters or they like so they're finding these DDoS attacks, and don't necessarily understand that they're under an extortion attack. So it's a real challenge for folks. And we've seen a good uptake with our on-prem capabilities to provide that kind of protection, right at the top of the security stack with our Arbor edge defense products. So it's been something that we're trying to get out there and help our customers as much as we can. And even that new, folks. >> Yeah. It's a, it's an interesting environment. And we found out from somebody too that sometimes if you actually pay the bad guys you can be breaking other rules for doing business with countries >> Yeah. >> Or people that we're not supposed to be doing business with. Like, that's the last thing you need to think about when you're trying to get all your data, and your company back online. >> Right, yeah, I mean, are you trying to make sure that you're keeping yourself stood up right? And, it's tough and you know kind of the rule one is never pay the extortion right? But you kind of got to take a look at it and say, hey, you know, what do I do? >> Right, right. So, you guys been around for a while. I wonder if we could dive in a little bit, we're at reinvent. Some of the things you guys are doing specifically on the product side to, basically increase your, your AWS capabilities. >> Sure. Thanks, yeah. We've been working really closely with AWS as they start to roll out new technologies. Last year, we were fundamental in the VPC ingress routing announcement that they have. We've been working with them with their traffic mirroring capabilities. So technology-wise, we keep in close touch with them in terms of everything that they are delivering. But also on the business side of it, we have our networking competency and just last week got our migration competency. So what we're really doing is, trying to both work the technical and the business relationship, as much as we can to try and expand our overall capabilities of book print with AWS. And, having that visibility and being able to kind of provide that same level of control and capability that you had, on-prem in your enterprise network as you move into the public cloud is a great benefit to a lot of our customers. They really have the ability now, to deliver services the way they have been delivering it for years and years. >> Now, what do you mean specifically, when you say migration competency or networking competency? >> So, they have these different competency programs for their technology partners. And the networking competency is, that you've demonstrated capabilities in your ability to provide network monitoring, or network management capabilities, or network connectivity. In the applica--, migration side you've really provided the ability to show that you have the tools, and solution set to drive, and help people become successful migrations into AWS. As you can imagine right now, a lot of folks are just lifting and shifting, putting stuff into AWS as quickly as they can to try and take advantage of the automation and the operational efficiencies that you get when you move into public cloud settings. As you make those migrations, you want to ensure that you're not either leaving something behind, that needed to move with it, or building a dependency onto something that's in the background that's going to have an adverse effect on, user experience. And ultimately, it really all comes down to the user experience that are, delivering to your customers and or your user base. Right? >> Right. Right. So what are the things you talked about in a prior interview was kind of the shifting dynamic in terms of network traffic. As there's more and more, you know kind of SAS based applications, and there's more kind of an application centric, and in this kind of API interface between all the applications that, you know the North-south is still significant, but the growth in the East-west traffic, meaning, you know kind of inside, if you will. And that some of the unique challenges that come from that from kind of a network monitoring. I wonder if you can share a little bit more color on that, as to, and are you continuing to see this increase in East West relative to North-south, and what kind of special opportunities and challenges that that presents? >> Yeah, absolu--. There is an absolute growth in terms of the East-west connectivity and, traffic that exists out there. In particular, when we take a look at the way that people are implementing software defined networks, NSX, for example NSXT has now provided the ability to blend your environment whether you're going to any cloud, any vendor as you move between these environments having that ability to deliver network services under the same framework is really beneficial to our customer base. And we've also been partnering very closely with VM-ware, and a lot of our customers are implementing VMware cloud on AWS. So, they have that ability to stand up services in a consistent manner whether it be in their legacy environments, or into the public cloud environments, and have that same ability to provide visibility down into the East-west traffic so that you can see that. So when you're part of the NSX framework, what you're able to do is really leverage the service framework that they have the service and search it, and be part of the clusters and host groups that are exchanging traffic East-west. And our ability to see into that really exposes chall--, not, exposes challenges but exposes potential issues that(laughs) our customers might be having in delivering high quality services. So that visibility is really what we've been keying on. >> Right. I'm just curious to get your take, you know as people kind of, as you said, make this move to public cloud, and, you know, you talked about wholesale migrations, and wholesale lifts and shifts. You know, there, there's kind of a couple trains of thought. One is, you know, using cloud for just pure economics, and trying to save money, and the flexibility. The second one is, is to is to add this automation as things grow in this, these great opportunities to automate, and try to reduce air. But the third one, right, the big one is to drive innovation, and to unlock innovation enable better innovation, and speed of delivery, and, you know, moving at the speed of business, pick your favorite buzzword. I'm curious whether your customers, as you have you seen them all jumping in? How much of it is still, you know, to save money or to, or to, you know, kind of use the basic, you know cost saving economics versus people really embracing the opportunity to use this as a method to drive innovation, and change within their own business? >> So I, I think the realities of 2020 have been forcing people to look at primarily from operational and cost efficiency perspectives, however with an eye towards innovation, and as they start to get themselves into a, zone where they're comfortable, they look to see how they can leverage the cloud to provide new services, and new ways in which they provide their services, and avail themselves of, the underlying technologies that are there to build something that's new and exciting in their overall portfolio. So, I think that 2021 is probably going to be a little bit more of where can I innovate as opposed to, how do I get there? (Jeff laughs) >> It's probably an unfair question here at 2020 cause priorities certainly got turned upside down in the middle of the year. So maybe, maybe innovation got pushed down a little bit from, you know, let's get people up, let's get people safe, and let's make sure they can access all the systems and all this crazy stuff that we've got available to them from wherever they are. >> Yeah, yeah. >> Not just within the, within the home office. >> I was listening to a, panel from federal government a couple of weeks ago, and it was really the way the they've adopted kind of commercial cha-- commercial capabilities to meet some of these challenges things that they wouldn't normally look at. But now it's a set of innovation that they're looking at, to try and make sure that they can avail themselves of the services that are out there and available in the public cloud. >> Yeah. Well, that's great, Russ. It's great to catch up. I'm sure you must be as amazed as anybody as the rapid acceleration of this, you know since the short time you went to your first re-invent and, >> Yeah. >> And clearly AWS and Amazon generally is an execution we're seeing. So, I think they'll keep doing it. So I think you're, you're probably sitting in a good spot. >> I think so. (Jeff laughs) Thank you. (Russ laughs) >> All right. Thank you Russ for, for stopping by and sharing your insight. Look forward to catching up next time. >> Thanks a lot, Jeff. Really appreciate it. >> Alrighty. He's Russ, I'm Jeff. You're watching The Cube's, continuous coverage of AWS reinvent 2020, the virtual event. Thanks for watching and we'll see you next time. (bright music)

>> Announcer: From the cube studios in Palo Alto, in Boston, connecting with thought leaders all around the world. This is a CUBE Conversation. >> Hi, I'm Stu Miniman and welcome to a CUBE Conversation. I'm coming to you from our Boston area studio and looking forward, we're going to be digging into one of my favorite topics and also the community always loves when we have it. Talking about networking, of course. Happy to welcome you to the program. I have two first time guests. First of all, we have Mike Saur. He is a solutions architect of NetDevOps with CCI. And joining us a long time friend of the program. First time on the program, Omar Saltun, who is a leader, product management for Network Services Orchestrator with Cisco. Omar and Mike, thank you so much for joining us. >> Thanks, nice to be here. >> Thank you, sir. >> All right. So Mike, if you could just set up for us, CCI, Cisco partner, give us a little bit about the organization, what you specialize in, what you're known for. And tell us a bit about your role there. >> Sure. CCI systems is a trusted partner for typical mid market size service providers. That's primarily the focus and that's a lot of different areas of the business, cable access, CMTS, security, data center and now this next evolution of adding NetDevOps as that next step for trusted advisor. I've been in my role for about a year now at CCI with a strong passion for automation and finding the right fit tools to solve problems for our customers, whether that's a commercial product or a open source tool. So a lot of different problems out there and no one size fits all. So it's my passion to bring those types of solutions to CCIs customers. >> Wonderful. Mike, I'm hearing a lot of the themes that I'm very familiar with. I'm sure our audience is when we talk about Cisco, when we've gone to Cisco live, we've been in the DevNet zone. So having a lot of discussions about that NetDevOps piece, can you talk to us a little bit more, just the partnership with Cisco. I would love to hear how NetDevOps fits in with what you're doing and how that fits with Cisco too. >> Yeah, I've been working with Cisco on and off for the past 18 months to try to think outside the box. As we know, Network Services Orchestrator was primarily targeted at the large providers that have the investment resources, the programming staff, to be able to do that. So over the years, having various discussions with product management, Cisco and CCI have come together to partner to solve two of the big problems in our space for our customers. As far as the math problem of the investment that's needed to bring up Network Service Orchestrator, and then also the programming piece of that. So not a lot of the providers in the mid market space have that expertise. So CCI and Cisco are really pulling that all together with various trusted partners to bring that to life for them in a shorter timeframe, with more sets of controls, to bring them up to speed faster so that they can it with a martial arts type journey of starting small and integrating over different phases of the life cycle of automation. >> Great. Well, Omar, let's pull you into the discussion here. It tends to be in general from a product standpoint, a little bit easier to grow up market. We want to talk a bit about the mid market, so that Network Services Orchestrator, NSO. Help explain how that really can support the mid tier as Mike was saying. >> Sure, so we were a little crazy, we started at the top and starting to work our way down. So we're well established with tier one service providers, large enterprises, we have good markets penetration there. I think for us, it was a lot of growth opportunity down into the mid market, both on commercial and tier two, tier three service providers. I know that the challenge in NSO is awesome, but it's got a steep learning curve. So, these partnerships like the one here is perfect because it allows mid market customers to access the capability. But at the same time, they have someone to hold their hands. They have partners like CCI, that have both the technical expertise, as well as kind of understanding kind of what customer problems are, what operations and problem scaling look like in mid market, not just a tier one where the different markets, different requirements. >> Mike I would love to get your viewpoint as to what's happening inside your customers. So networking in general, obviously there's always new technologies that they need to integrate, but there's also the skill sets. NetDevOps, of course, helping pull people along to work closer with developers, coding more something we have to talk about. So the mid tier customer specifically, what challenges they face with bring us into some of those conversations, if you would. >> Right, so I preach a lot and talk about the vicious cycle of not automating. They don't have time 'cause they're too busy doing the day to day jobs. And I love to get into that vicious cycle and kind of bust that up and help to kind of think differently why they need to operate their networks differently. And they can take a lot of those tools and techniques from the software world and really help leverage them on their networks. There's just a skills gap right now with the mid market type folks. They're overworked, stressed. And with obviously the growth of IOT, more devices means more work. It's just a volume metric problem that certain automation tools can really make a difference in their world. And that's really what my passion is at, reducing human error, helping those businesses provide more uptime for their end customers and just driving a different way to operate networks in more efficiently in accurate way. >> And part of that... >> Please go ahead on that. >> And part of that is just not. You know those are the technical expertise, but there's also the how do you stitch things together? Any automation strategy is going to have more than one tool. And there's the idea of how do we stitch tools together? How do we build processes? How do we help up-skill customers? Those kinds of things. I mean, this is kind of the all the pieces that come together when you kind of mesh the technology and the apart for capabilities together. That's really what drives successful automation projects, and then get some of those problems solving and added value that we're talking about here. >> Yeah. I mean, Omar, when I think about scale and I think about automation, service fighters, you think would be some of the leading edge for some of that? Maybe just refresh our audience a bit as to how you help them along and how much, they used to kind of build a lot of their own toolings and that's challenging if you have to keep doing it itself. So why do they turn to Cisco for some of these solutions? >> I think two things, one, we build tools that survive scale, right? For NSO, we have customers managing hundreds of thousands of nodes at one time. So there's a scale on performance that comes from building SB class tooling. But the second piece is just understanding, you know, the operational environment service providers, have they have demanding requirements in terms of SLA scale, reg compliance, those kinds of things. And that's really what we've brought to the table is not just tools that have the power and the scale, but kind of understanding what the operational environment is for the typical tier one SP and making sure the tools mentioned to that. >> Michael... Please go ahead. >> Yeah, absolutely. And the idea of that businesses are changing fastly and keeping up with that speed of innovation is very difficult. And not to mention to, I mean, as a trusted partner for our customers, maybe the answer's not Cisco every time to be honest, maybe there's a different tool. So if we have a tool like NSO that could drive other vendors equipment, I think that makes customers feel safer, better, not vendor lock in. So the power that NSO brings is second to none, in my opinion. So I'm just all about flexibility and in solving problems for our customers. And to me, Network Services Orchestrator is that product. But like I said, there's a lot of integrations that need to be done and we need to break it down for these customers and get them to realize the value of it faster instead of the large deployments that you've seen in the tier one type of space. >> Yeah, Mike, you bring up a really good point. When I think traditionally about automation, we take a process or maybe we optimize a process and we automate it, but what companies need today is I need to react fast and I need to be able to make changes in the future if that's needed. So not fossilizing something, but being able to move forward. So it sounds like with NSO, some of your other things that you put together, you're helping customers not only do what they need today, but be ready for the future. Do I have that right? >> Yeah, absolutely. Like I said, it's just another progression of what CCI already is. That trusted advisor, we have the great opportunity that we talk to so many different providers of the same size, same business goals that we bring best in breed. And our talent that we have at CCI is just amazing and that's a passion that we're trying to get out there into the world that, Hey, we have horsepower and we're ready to help. We're about making lives better. So it's exciting. >> Yeah certainly in the mid market, one of the things we see is customers doing less building and more assembly. So in tier one, they have the time and resources to build stuff from scratch, to write services from scratch, those kinds of things. Mid-markets much more of a simply play, taking things off the shelf. No, maybe a little NSO, but it's also paired with a little bit of Ansible, a little bit of Python, and that's how they're going to handle their automation requirements, both, 'cause it's probably faster and probably in the long run, easier to maintain. >> Well, yeah. You bring up a great point, Omar. When I think traditionally that mid market and the channel partner often would be delivering prepackaged solutions. But today's solutions, you still need that a little bit of flexibility, that little bit of programming, they're not going to, throw a team of PhDs on it like some of the largest customers do. But they still need to be able to put things together and make them fit for what they need and ultimately their customers need. >> Yeah, I mean, every automation project it's still a snowflake. You take something or free VPN, right. Everyone does it, but everyone does it differently. There's no better, there's no worse. But if you're going to automate that you kind of start with an 80% solution, but then you need to line it up whether that's customer's infrastructure, their operations, their staff capabilities and those kinds of things. That's kind of getting over the finish line what CCI brings to the table in the mid market, sure. >> Yup. Mike, it's funny. I'm curious. CCI, does it have any relation with CCIE 'cause when we're talking about that skillsets that we need, obviously, you start, you think about Cisco certifications. How do you keep your team up on the latest technologies, making sure that they can be that trusted advisor that your customers need? >> Well, of course it's a combination of different things, classical learning, but I would say one of the big things is our collaboration capabilities. We have experts in many different areas and usually they have a secondary skill set and we collaborate. And a lot of times we make our own internal training that's more specific to our customers. So example, I really try to recommend to customers to move to EVPN technologies, but there's that learning curve that they don't know how to configure them. Next gen ethernet type of technologies for service providers. So by building an EVPN model and NSO, we're empowering them to leverage that sooner, faster with a smart tool like NSO. And that's really, some of the value that we have, we know what most of our customers use. The big guys tend to use layer three VPNs a lot of time. I would say just that a majority of our customers are very L two VPN vase or infrastructure services, and even offering them up to their own customers. So having a somewhat pre-packaged 80% as Omar had mentioned, and nothing's ever really the same all the time, but 80% of it probably is. And then we'll come in and then we can finish off that last 20% to make it come to life for that customer with a little bit of customization. So making it fit for their environment. >> Yeah, it's interesting. One of the biggest challenges out there for anyone is, okay, when do I have to revisit what I had? Is there a new technology? Is there a new way of doing things? So you just laid out like, you know, one way that customers, okay, this is the way I should be in my size thinking about VPN. Anything else? What, what kind of key things should people be hearing and they're saying up, if I have this problem, providers like CCI can help. >> Right. Just trying to increase the health of their network by having consistency checks. Over the years, networks have config wonder. It's very hard to keep that up even in the mid market networks. So the cleaner that your network is, the more uptime you're going to have, the easier it is for your network engineers and allows you to scale. Like I said, the time to businesses is just going rapidly. And being able to empower other teams like say knock or even sales engineering to build those L2VPNs for the customer. If you can build them faster by not escalating tickets to the core engineering team, you serve the customer faster and you freed up those network engineers to maybe be more proactive about building out the future network. Cause right now they're just stuck in that day to day grind. So config consistency, and like primary, like service builds L2, L3 VPN. Those are very popular. And one thing that I always like to challenge customers with is that a lot of times they're like, well, we can do it ourselves. And maybe some of these guys have a developer teams and typically they're more focused on the public facing website, internal apps. And I challenged like maybe you could... but what's your time worth to you? And the amount of man hours that were put into NSO, jumpstart you faster. And a lot of times I think you're going to gain more value in just getting that product that you can customize. 'Cause at the end of the day, it's a developer platform. So you bring it to life in your environment. >> Absolutely, there's so many things now that companies need to make that decision. Can they shift left? Can they push it to the platform? Are there solutions that just make things easier so that you can focus on really the things that are important to run your business and get the best utilization out of your people and the skillsets. Wonderful. Mike, Omar want to give you both, give us the final word takeaways you want people to have regarding kind of the opportunity that they can take advantage of, especially in the mid tier. Mike maybe we'll start with you. >> Yeah, thanks for having me on the show. I am just passionate about getting CCIS name out there. Not only for NetDevOps, but all the other practices that we have at CCI to be that trusted advisor and come talk to us. We have account teams that already, we have systems engineers that are ready. And I feel like one thing leads to another and it snowballs so reach out and I'd love to have a conversation with every single one of them, whether it's a small organization or a large organization, we're here to help. And that's super important to us. >> I think for us, we see automation start, tactically to science project. So ones trying to deal with the pain pointer or dealing with something here frustrated with which is, I think where most folks start. I think that the trick is to work with your peers, talk to your leadership and figure out how you go from science project to strategy and kind of map out the longer journey and be a little thoughtful as you pick tools and figuring out what you want to automate and make sure it has some value to. >> Mike Saur, Omar Sultan, thank you both for joining. Appreciate the update and especially on the CCI and Cisco partnership. >> Thanks too. >> Thank you. Have a great day. >> All right, I'm Stu Miniman and thank you for watching this CUBE conversation. (upbeat music)

(upbeat music) >> Narrator: From our studios, in the heart of Silicon Valley, Palo Alto, California. This is a CUBE Conversation. >> Hello and welcome to theCUBE studios, in Palo Alto California, for another CUBE Conversation, where we go in-depth with thought leaders driving innovation across the tech industry. I'm your host, Peter Burris. Anybody that's read any Wikibon research or been a part of any conversation with anybody here at SiliconANGLE, knows we're big believers in the notion of digital business, and digital business transformation. Simply put, the difference between a business and a digital business is the role that data plays in a digital business. Digital businesses use data to change their value propositions, better manage and get greater visibility and utilization out of their assets, and ultimately drive new types of customer experience. That places an enormous burden on the technologies, the digital technologies that have historically been associated with IT, but now are becoming more deeply embedded within the business. And that digital business transformation is catalyzing a whole derivative set of other transformations. Including for example, technology, data centers, security, et cetera. It's a big topic, and to start to parse it and make some sense of it, we're joined by two great guests today- Michael Segal is the area vice-president of strategic alliances at NETSCOUT Systems, and Eric Smith is the senior product line manager of NETSCOUT Systems. Gentlemen, welcome to theCUBE. >> Pleasure to be here, Peter. >> Okay, so, Michael let's get going on. Give us a quick update on NETSCOUT Systems. >> Yeah, so maybe just a quick introduction of what NETSCOUT actually does. So, NETSCOUT assures service performance and security for the largest enterprises and service providers in the world. And the way we accomplish it is through what we refer to as offering visibility without borders. Now, this visibility without borders provides actionable intelligence that enables, very quickly and efficiently to enterprises and service providers, ensure their service performance and security, understand, discover problems, root cause, and solution. So it overall reduces their mean time to repair, and it's being used to assure that digital transformation and other transformation initiatives are executed effectively by the IT organization. >> All right, so let's jump in to this notion of transformation. Now, I know that you and I have spent, on a couple different occasions, talked about the idea of digital business transformation. What does digital business transformation mean to NETSCOUT, and some of the other derivative transformations that are associated with it? >> Right, so as you described very very concisely in your introduction, the business transformation is about enabling the business through digital services and data to differentiate itself from competition very very effectively. Now, one of the aspects of this digital transformation is that now more than ever before, the CIOs are taking a very active role in this transformation because obviously, information technology is responsible for digital services and processing and analyzing data. So with that in mind, the CIOs now need to support the business aspects of agility, right? So if your business agility involves introducing new services very quickly and efficiently, the IT organization needs to support that, and at the same time, they also need to assure that the employee productivity and end user experience is maintained at the highest levels possible. So this is exactly where NETSCOUT comes in, and we support the IT organization by providing this visibility without borders, to assure that employee productivity and end user experience is maintained and any issues are resolved very quickly and efficiently. >> Especially customer experience, and that's increasingly the most important, end users that any digital business has to deal with. At this point in time Eric, I want to bring you in to the conversation. When we talk about this notion of greater visibility, greater security, over digital assets, and the role that the CIO is playing, that also suggests that there is a new class of roles for architects, for people who have historically been associated more with running the networks, running the systems, how is their role changing, and how is that part of the whole concept of data centered transformation? >> Right, so, the guys that have typically been in what you might consider network operations types of roles, their roles are evolving as well, as the entire organization does. So as Michael mentioned beforehand, no longer is the digital business wholly and solely confined to an IT department that is working just with their employees. They're now part of the business. They're not just the cost center anymore, they're actually an asset to the business. And they are supporting lines of business. So the folks that have traditionally had these roles have just maintained the network, maintained the applications, are having to become experts in other aspects. So as certain applications disaggregate, or potentially move out partially into the cloud, they kind of become cloud architects as well, whether it's a public cloud or a private cloud, they have to understand those relationships and they have to understand what happens when you spread your network out beyond your traditional data center core. >> So let's build on that, because that suggests that the ultimate solution for how we move forward has to accommodate greater visibility, end-to-end, across resources, not only that we have traditionally controlled, and therefore could decide how much visibility we had, if the tooling was right, but also resources that are outside of our direct purview. How does that work as we think about building this end to end visibility to improve the overall productivity and capability, as you said, the productivity and end user experience, of the systems we're deploying? >> Yeah, so maybe we can start with the end in mind, and what I mean by that is what you just described as end user productivity and user experience, so how do we measure it, right? So in order to measure it, what we need to look is the visibility at the service level. And what I mean by visibility at the service level is actually looking, not just at once specific component that is associated with the servers such as application, it's one component, however application is running on a network, you have service enablers, for example to authenticate, to do accounting, to do DNS resolution, so you need to look at all of these components of a service and be able to effectively provide visibility across all of them. Now, the other aspect of this visibility, as you mentioned, end-to-end, which is an excellent observation as well, because you're looking at the data center, which is still very strategic assets, your crown jewels are still going to be in the data center, some of the data will remain there, but now you are expanding to the edge, maybe colos, maybe microdata centers in the colos, then you move workloads, migrate them to public clouds, it can be IaaS, you have more SaaS providers that provide you with different services. So this aspect of end-to-end really evolves into geographically dispersed, very complex and highly scalable architecture. >> Yeah, we like to say that the cloud is not an architecture, not a strategy, for centralizing resources. Rather, it's a strategy for greater distributing resources, allowing data to be where it needs to be to perform the function, or where it gets captured, allowing the service to be able to go to the data, to be able to perform the work that needs to be conducted from a digital business standpoint. That suggests that even though a customer, let's call it the end user, and the end user experience, may get a richer set of capabilities, but the way by which that work is being performed gets increasingly complex, and partly, it sounds like, that it's complexity that has to be administered and monitored so that you don't increase the time required to understand the nature of a problem, understand the nature of the fix. Have I got that right? >> You got it absolutely right, and I would add to this that the complexity that you described is being further magnified by the fact that you lose control to some extent, as you mentioned before, right? >> Or because, let's put it this way, it becomes a contracting challenge as opposed to a command and control challenge. Now the CIO can't tell Mike, "Go fix it", the CIO has to get on the phone with a public cloud provider and say, our service level says, and that's a different type of interaction. >> Right, and usually the service provider would say, the problem is not on my side, it's on your side, so the traditional finger pointing in war rooms now, is being expanded across multiple service providers, and you need to be able to very effectively and quickly identify this is the root cause, this is why it's your fault, service provider, it's not our fault, please go and fix it. >> So let's dig into that if we can, Eric, this notion of having greater visibility so that you are in a better position to actually identify the characteristics of the problem, and where the responsibilities lie. How is that working? >> So, in the past, or when the digital transformation started it's initial rise, it wasn't. And what was happening is, as you both have alluded to a moment ago, I can no longer call Mike and Suzie downstairs, and say you know, voicemail is not working, things are just, not working. Well, you can go sic them on it and they go fix it. What's happening now is that data is leaving your data center, it may be going through something like a colo, which is aggregating the data, and then sending it on to your partner, that is providing these services. So what you have to have is a way to regain that visibility into those last mile segments, if you will, so that as you work with your partners, whether it's the colo or the in-software provider, that you can say look, I can see things from here, I can see things to there, and here's where it goes south, and this is the problem, help me fix it. And so, as you said a moment ago, you cannot let your mean time to resolution expand simply because you're engaging in these digital transformation activities. You need to remain at least as good as you did before, and hopefully better. >> Well, you have to be better, because your business is becoming more dependent on your digital business capabilities, increasingly it's becoming your business. So let me again dig a little more deeper technically into that. A lot of companies are attempting to essentially provide a summary view of that data, that's moving around a network, moving across these different centers and locations, edge, colo, et cetera, what is the right way to do it? What constitutes real truth when we talk about how these systems are going to work? >> So NETSCOUT believes, and I think most people wouldn't argue with us, that when you can actually see the packet data that goes across the network, you know what elements are talking to which ones, and you can see that, and you can build metrics, and you can build views upon that, that is very high fidelity data, and you absolutely know what's going on. We like to call it the single source of truth. So as things come from the deep part of the data center, whether it's a virtualized server farm, all the way through this core of the network, and your service enablers like Michael mentioned, all the through the colos, and out into an IAS or SaaS type of environment, if you're seeing what's actually being on the wire, and who's talking to whom, you know what's going on, and you can quickly triage and identify what the problem is so that you can solve it. >> Now is that something that increasingly architects or administrators are exploiting as they use these new classes of tools to gain that visibility into how the different services are working together? And also, is that becoming a feature of how SLAs and contracts are being written, so that we can short circuit the finger pointing with our service providers? >> Yeah, so there's kind of like you said, two parts that, the first is I think, a lot of the traditional IT operations folks, as you mentioned earlier, are learning new roles, so to some degree, it is new for them, and I don't know that everybody has started to make use of those tools yet, but that's part of what our story is to them, is that we can provide those tools for you, so that you can continue to isolate and solve these problems. And I'm sorry, what was the second part of your question? >> Well, the second part is, how does that translate into contracting? Does that knowledge about where things actually work inform a contracting process to reduce the amount of finger pointing, which by the way, is a major transaction cost and a major barrier to getting things done quickly. >> Absolutely, and so you since you have this high fidelity data at every step of the way, and you can see what's happening, you can prove to your partners where the problem lies. If I find it on my side of it, okay, no harm no foul, I'll go fix it and move on with my life. But with that data, with that high fidelity data, and being able to see all the transactions and all the applications, and all the communications that happens end-to-end, through the network between me and my partner, I can show them that they are outside of their SLA. And to your point, it should shorten the time between the finger pointing, because I have good data that says, this is the problem. You can't dispute that. And so, they're much more inclined to work with you in a hopefully, very good way, to fix the problem. >> So that brings us back to the CIO. And I want to close with you on this, Michael. That's got to make a CIO happier, who is today facing a lot of business change, and is trying to provide a lot, you said agility, I'll use the word an increasing array of business and strategy options based on digital technology. Ensuring that they have greater certainty in the nature of the services, the provider of the services, and in the service levels of the services, has got to be an essential feature of their decision making toolkit as they provide business with different ranges of options, right? >> Absolutely correct. In fact, the high fidelity data is so critical in order to accomplish this, right, so in order for the CIO to be able to demonstrate to the CEO and other key executives that his objectives are met, the KPIs for that are along the lines of your efficiency, your service delivery capabilities, and being able to monitor everything in real time. So, the high fidelity data, I just want to elaborate a little bit more on what it means, because that's the difference between having these key performance indicators that are relevant for the CIO, and relevant also for other key stakeholders, and having something that is best guess, and maybe it's going to help. So high fidelity data, the way that NETSCOUT defines it, has several components. First of all, because it's based on traffic, or packet data, or wire data, it means that we continuously monitor the data, continuously analyze it, and it's the single source of truth because there's consistency in terms of what data is being exchanged. So the more visibility you get into the data that's being exchanged between different workloads, the more intelligence you can glean from it. The other aspect is that it's really, we mentioned, the service level, and if you think of packet data, it's all layers two through seven, so you have the data link layer, you have the network, you have the transport, you have the session, you have application, you can holistically identify any application, and provide you with error codes and in context, say you know the log and latency and error codes give you the overall picture. So this all together constitutes very high fidelity data. And at the end of the day, if the CIO wants to accelerate the digital transformation with confidence, this is the kind of high fidelity data that you need in order to assure that your key performance indicators, as CIO, are being maintained. >> This is the as is truth. >> Exactly. >> All right, Michael Segal, Eric Smith, I want to thank you both for being on theCUBE. >> Thank you for having me. >> Thank you very much Peter, for having us. >> And thanks for joining us for another CUBE Conversation. I'm Peter Burris, see you next time. (upbeat music)

(upbeat music) >> Announcer: From our studios in the heart of Silicon Valley, Palo Alto, California, This is a Cube Conversation. >> Hello and welcome to theCUBE studios in Palo Alto, California for another Cube Conversation. Where we go in depth with thought leaders driving innovation across the tech industry. I'm your host, Peter Burris. Michael Segal is the product manager, or Area Vice President of Strategic Alliances in NetScout Systems. Michael, we are sitting here in theCUBE studios in Palo Alto in November of 2019, re:Invent 2019 is right around the corner. NetScout and AWS are looking to do some interesting things. Why don't you give us an update of what's happening. >> Yeah, just very brief introduction of what NetScout actually does. So, NetScout assures service, performance and security for the largest enterprises and service providers in the world. We do it for something we refer to as visibility without borders by providing actionable intelligence necessary to very quickly identify the root cause of either performance or security issues. So with that, NetScout, partnering very closely with AWS. We are an advanced technology partner, which is the highest tier for ISVs of partnership. This enables us to partner with AWS on a wide range of activities including technology alignment with road map and participating in different launch activities of new functionality from AWS. It enables us to have go-to market activities together, focusing on key campaigns that are relevant for both AWS and NetScout. And it enables us also to collaborate on sales initiatives. So, with this wide range of activities, what we can offer is a win-win-win situation for our customers, for AWS, and for NetScout. So, from customers' perspective, beyond the fact that NetScout offering is available in AWS marketplace, now this visibility without borders that I mentioned, helps our customers to navigate through their digital transformation journey and migrate to AWS more effectively. From AWS perspective, the win is their resources are now consumed by the largest enterprises in the world, so it accelerates the consumption of compute, storage, networking, database resources in AWS. And for NetScout, this is strategically important because now NetScout becoming a strategic partner to our large enterprise customers as they navigate their digital transformation journey. So that's why it's really important for us to collaborate very, very efficiently with AWS. It's important to our customers, and it's important to AWS. >> And you're going to be at re:Invent. You're actually going to be speaking, as I understand. What are you going to be talking about? >> So we are going to be talking about best practices of migrating to AWS. NetScout also is a platinum sponsor for the re:Invent show. This demonstrates our commitment to AWS, and the fact that we want to collaborate and partner with them very, very efficiently. And beyond that also, NetScout partnered with AWS on the launch of what is referred to as Amazon VPC traffic mirroring. And, this functionality enables us to acquire traffic data and packet data very efficiently in AWS. And it's part of the technology aligns that we have with AWS and demonstrates how we utilize these technology aligns to extend NetScout visibility without borders to AWS cloud. >> There's no reason to make AWS cloud a border. >> Michael Segal: Exactly. >> Michael Segal, NetScout Systems. Thanks very much for being on theCUBE. >> Thank you for having me. >> And, once again we'd like to thank you for joining us for another Cube Conversation. Until next time. (upbeat music)

(upbeat music) >> Hi and welcome to another Cube conversation. This one from BMC Helix Immersion Days in Santa Clara Marriott in Santa Clara, California. I'm Peter Burris. Every organization that attempts significant change, and there are a lot of organizations attempting digital transformation, which is about as significant a set of change as you can make, has to worry about what platform, what foundation has to be in place to make that change easier, and that's what we're going to be talking about in this conversation. We've got John Fraser, who's the Managing Director of Service Management in Online Business Systems. John, welcome to the Cube. >> Thanks Peter. >> So, tell us a little bit about online business systems. Let's start there. >> So, online business systems is a Canadian digital transformation in cyber security consultancy. We've been around now for 33 years. We're headquartered in beautiful Winnipeg, Manitoba, but I have operations all across North America and we're about 330 people today and growing rapidly. >> Winnipeg happens to be one of my favorite cities in the world, so good for you. >> Perfect. All right. So, let's talk about, I mentioned up front this notion of a stable platform, a stable foundation. Tell us a little bit about what your understanding of, as you work with your clients, what constitutes that stable foundation for change? >> Well, one of the biggest challenges we see with companies, is they try to make change in the wrong way. Too much, too fast with no control, no governance and they just don't have the proper controls in place. One of the biggest challenges with change in an organization in digital transformation today is they don't know where they're starting from. So, one of the fundamentals is really understanding where they're beginning and what they're trying to change. It's staggering to see organizations, and I've got lots of stories to tell around companies that have gone through major program transformations to really trying to embrace digital technologies only to fail again and again and again, because they don't understand how things are connected together or where they're starting from. >> So, the foundation has to start with knowing what's in the foundation? Have I got that right? >> That's right. You can't change what you don't know. >> So, it's online business systems helps clients move through some of these digital transformations. I got to believe that the service management element is a crucial feature of any successful transformation. >> Absolutely, we begin with embracing technology to help companies understand where they're starting from. We leverage a lot of tools and techniques in terms of understanding where they're starting as an organization, the people, and then using tools like BMC's Helix discovery to understand all of the components that make up the systems within their organization that they're trying to transform and how they're all connected together. >> Now, as we go through this process, one of the things that a lot of my clients are discovering is that the cyber security challenges get that much more extreme. One of the things that's become increasingly obvious is as companies talk more about digital business, talk more about how they're transforming and generating new classes of revenue or customer experience, they become more obvious target to the bad guys. What is the relationship between digital transformation, service management, and cyber security? >> Yeah, and interesting you say that. We believe as an organization that they're intertwined. You can't do digital transformation without a strong cyber security program. You can't do either one of them without automation. The pace of change and more importantly the volume of threats and challenges facing the organizations is beyond human capability. You can't do it manual anymore. It doesn't matter how many people you throw at it, it's just impossible. So, you've got to automate, you've got to leverage technology, artificial intelligence to really face these challenges. >> So, given your standing and working on the service management side, what are some of the steps that your customers are taking to ensure that they are going to succeed with digital transformation in a way that doesn't open them up to security issues? >> So, one of the key areas is understanding, like I said before, where they're starting from. How all of the components that make up their business service fit together and then, understanding from a security aspect how to prioritize fixing those threats. One of the biggest challenges in securing your organization, today is understanding what to work on. The average large organization gets thousands and thousands of new vulnerabilities a day and the back log just becomes insurmountable. So, without being able to understand how to prioritize that work against valuable business services, they're never going to win. >> So, you mentioned something about service capabilities or service components, the historical norm for IT has been, until a few years ago, to focus on mainly the hardware or infrastructure assets as the things to be managed and that has been not working as well in a world where we're delivering digital services to customers and partners for revenue or other purposes. So, what constitutes a service capability or a service component in your mind as kind of the new notion of asset within IT? >> It's assets, anywhere. It could be the traditional hardware sitting in your server room. It could be servers and/or microservices sitting in a cloud location, it could be a software as a service component. They all make up business services together. >> Or combinations of all of them. >> It often is combinations of all of them together and that's one of the biggest challenges is understanding how they all fit together and how the information flows. So, for instance, if an organization is trying to prioritize how to secure a business service. Let's use automated tellers as an example. They may have traditional on premise servers, they may have cloud offerings and they may have third-party software as a service just protecting their servers on premise is not going to protect that business service, so you really need to understand how all of the pieces fit together. >> So, are you actually working with business leaders and IT leaders to do a better job with defining what constitutes a digital business capability and use that as an organizing principal for how they think about how all their resources come together? >> Yes, it's critical that you have business and IT working together and you have the right level of business working with IT. Without sponsorship at the executive level, digital transformation will fail. >> Even in Canada? >> Even in Canada. >> Well, this has been a great conversation. John Fraser who's a Managing Director and Service Management in Online Business Systems. Thanks very much for being on the Cube. >> Thanks Peter. >> And once again, this has been a Cube conversation from BMC Helix Immersion Days in Santa Clara Marriott and I'm Peter Burris. Thanks until next time. (upbeat music)

from New York City it's the cube covering welcome to the new edge brought to you by pensando systems hey welcome back here ready Jeff Rick here with the cube we are in downtown Manhattan at the top of goldman sachs it was a beautiful day now the clouds coming in but that's appropriate because we're talking about cloud we're talking about edge and the launch of a brand new company is pensando and their event it's called welcome to the new edge and we're happy to have since we're goldman the guys who have the money we're barry Eggers a founding partner of Lightspeed ventures and randy pond the CFO a pensando gentlemen welcome thank you thank you so Barry let's start with you you think you were involved at this early on why did you get involved what what kind of sparked your interest we got involved in this round and the reason we got involved were mainly because we've worked with this team before at Cisco we know they're fantastic they're probably the most prolific team and the enterprise and they're going after a big opportunity so we were pleased when the company said hey you guys want to work with us on this as a financial investor and we did some diligence and dug in and found you know everything to our liking and jump right in didn't anybody tell them this startup is a young man's game they mixed up the twenty-something I think yeah they sort of turned the startup on its head if you will no pun intended that's going right yeah yeah and Randy you've joined him a CFO you've known them for a while I mean what is it about this group of people that execute kind of forward-looking transformation transformational technologies time and time again that's not a very common trait it's a it's a great question so you know the key for these guys have been well they've been together since the 80s so Mario look and primitive this is the 80s I work with them at their previous startup before Christian two ladies and they're the combination of their skills are phenomenal together so you know one of them has some of the vision of where they want to go the second guy is a substantive sort of engineer takes it from concept first drawing and then the Prem takes over the execution perspective and then drives this thing and they've really been incredible together and then we added Sony at crescendo as a as a product marketing person and she's really stepped up and become integral part on the team so they work together so well it just makes a huge difference yeah it's it's it's amazing that that a that they keep doing it and B that they want to keep doing it right because they've got a few bucks in the bank and they don't really need to do it but still to take on a big challenge and then to keep it under wraps for two and a half years that's pretty pretty amazing so curious Barry from your point of view venture investing you guys kind of see the future you get pitched by smart people all day when you looked at John Chambers kind of conversation of these ten-year kind of big cycles you know what did you think of that how do you guys kind of slice and dice your opportunities and looking at these big Nick's yeah going back going back to the team a little bit they've been pretty good at identifying a lot of these cycles they brought us land switching a long time ago with crescendo they sort of redefined the data center several times and so there's another opportunity what's driving this opportunity really is the fact that explosion of applications in the network and of course east-west traffic in the network so networks were more designed north-south and they're slowly becoming more east-west but because the applications are closer to the edge and networks today mostly provide services in the core the idea for pensando is well why don't we bring the service deliver the services closer to the applications improve performance better security and better monitoring yeah and then just the just the hyper acceleration of you know the amount of data the amount of applications and then this age-old it's we're going to use the data to the computer do you move the compute to the data now the answer is yes all the above so you got some money to work with we do you got a round that he could be around you guys are closing the C round so I think 180 people approximately I think somebody told me close enough so as you put some of this capital to work what are some of your priorities going forward so we will continue to hire both in the engineering side but more importantly now we're hiring in sales and service we've been waiting for the product quite frankly so we've just got our first few sales guys hired we've got a pretty aggressive ramp especially with the HP relationship to put people out into the field we've hired a couple guys in New York will continue to hire at the sales team we're ramping the supply chain and we've got a relative complicated supply chain model but that has to react now that we're going to market all that might be pretty used to do that we're changing facilities we need to grow we're sort of cramped in a one-story building open up one floor of a building right now so the money is going to be used sort of critically to really scale the business down they can go to market okay but a pretty impressive list of both partners and customers on launch day you don't see Goldman HPE Equinix I think it was quite a slide some of that is the uniqueness of the way we went to market and did the original due diligence on the product and bringing customers in early and then converting them to investors you end up with a customer investment model so they stayed with us Goldman's been through all three rounds we've been about HP and last model we had NetApp has been um two rounds now so we've we've continued to develop as a business with this small core group of customers and investors that we could try to expand every time we move to the next round and as Barry said earlier this is the first time we had a traditional financial investor in our rounds the rest of them have all been customers they've been friends and family for the most part did you join the board too right I did yeah so what are you what are you excited about what what do you see is I mean just clearly your side you invested but is there something just extra special here you know react chambers put in a 10-year 10-year cycle yeah we've talked about it I mean I'm excited to work with the team right there best-in-class working closely with John again is a lot of fun a chance to not exhaust yeah yeah you know a chance to read redefine the data center and be part of the next way even as a VC you love waves and build my Connick company right and I think we have a real opportunity in front of us it it takes a lot of money to do this and do it right and I think we have the team that proven they can execute on this kind of opportunities from I'm excited to see what the next five years hold for this company good well it was funny John teased him a little bit about you know all the M&A stuff that he was famous for at Cisco he's like I don't do that anymore now I'm an investor I want IPOs all the way what's all 18 thinks it is 18 companies in his portfolio their routes they're going to IPO all the way yeah that's that's a good point actually this team has been prolific and they've delivered products that have generated fifty billion dollars and any walk into any data center in the world you're gonna see a product this team has built however this team has not taken a company public so that's really the opportunity I think that's what excites them Randy's here it's why Jon's here that's why I'm here we want to build a company that can be an independent company be a lasting leader in a new category yeah so last word Randy for you for people that aren't familiar with the team that aren't familiar with with with what they've done what would you tell them about why you came to this opportunity and why you're excited about it well this there is no higher quality engineering team in the world didn't these people so it's to get re-engaged with them again with an entirely new concept that's catching a transition and the market was just too good an opportunity to pass I mean I had retired for 15 months and I came out of retirement to join this team much to the chagrin of my wife but I just couldn't pass up the opportunity high caliber talent it's um every day is is interesting I have to say well thanks for for sharing the story with us and and congratulations on a great day and in a terrific event thank you thank you very much all right he's berry he's Randy I'm Jeff you're watching the cube from the top of goldman sachs in Manhattan thanks for watching we'll see you next time

>>From New York city. It's the cube covering. Welcome to the new edge brought to you by systems. >>Okay, we'll come back. You're ready. Jeff Frick here with the cube. We're in downtown Manhattan at the top of Goldman Sachs, like 43 stories above the Hudson. It was a really beautiful view a couple hours ago, but the cloud has moved in and that's only appropriate cause it's cloud is a big theme of why we're here today. We're here for the Penn Zando event. It's called welcome to the new edge. They just come out of stealth mode after two and a half years, almost three years, raised a ton of money, got a really rockstar team and we're excited to have the CEO with us today to tell us a little bit about more what's going on. And that's prem Jane and again, the CEO of Penn Sandow prem. Great to see you. Nice to see you too. So everything we did running up to this event before we could get any of the news, we, we, we tried to figure out what was going on and all it kept coming up was NPLS, NPLS, NPLS, which I thought was a technology, which it is, but it's really about the team. Tell us a little bit about the team in which you guys have built prior and, and why you're such a, a well functioning and kind of forward thinking group of people. >>So I think the team is working together. Mario Luca, myself and Sony were working together since 1983 except for Sony. Sony joined us after the first company, which has crescendo, got acquired by Cisco in 1993 and since then four of us are working together. Uh, we have done many, uh, spinnings inside the Cisco and demo was the first one. Then we did, uh, uh, Nova systems, which was the second, then we did recently in CMA. Uh, and then after we left we thought we are going to retire, but we talked about it and we says, you know, there is still transitions happening in the industry and maybe we have few more years to go back to the, you know, industry and, and do something which is very challenging and, and uh, impacting. I think everything which we have done in the past is to create a impact in the industry and make that transition which is occurring very successful, >>which is really hard to do. And, and John Chambers who, who's on the board and spoke earlier today, you know, kind of talked about these 10 year cycles of significant change in our industry and you know, Clayton Christianson innovator's dilemma, it's really easy when you are successful at one of those to kind of sit on your laurels. In fact, it's really, really hard to kill yourself and go on to the next thing you guys have done this time and time and time again. Is there a unique chemistry in the way you guys look forward or you just, you just get bored with what you built and you want to build something new. I mean, what is some of the magic, because even John said, as soon as he heard that you were the team behind it, he was like, sign me up. I don't know what they're building but I don't really care cause I know these people can deliver. >>I think it's very good the, whenever you look at any startup, the most important thing which comes up as the team and you're seeing a lot of startup fails because the team didn't work together or they got their egos into this one. Since we are working for so long, they compliment each other. That's the one thing which is very important. Mario, Luca, myself, they come from engineering backgrounds. Sony comes from marketing, sales, uh, type of background and we all lady in terms of the brain, if you think about is the Mario behind the scene, Luca is really the execution machine and I'm, you can think like as a heart, okay. Putting this thing together. Uh, as a team, we work very complimentary with each other. It does not mean that we agree on everything, right? We disagree. We argue. We basically challenge each other. But one thing good about this particular team is that once we come to a conclusion, we just focus and execute. And team is also known to work with customers all the time. I mean, even when we started Penn Sando, we talked to many customers in the very beginning. They shape up our ideas, they shape up the directions, which is we are going and what transitions are occurring in the industries and all that. That's another thing which is we take customer very seriously in our thought process of building a product. >>So when you were thinking around sitting around the table, deciding whether you guys wanted to do it again, what were the challenges that you saw? What was the kind of the feedback loop that came in that, that started this? The, uh, the gym of the idea >>thing is also is that, uh, we had, we had developed so many different products as you saw today in the launch, eight or nine, uh, billion dollar product line and stuff like that. So we all have a very good system experience what is really needed, what transitions are occurring and stuff like that. When we started this one, we were not really sure what we wanted to do it, but in the last one when we did the, uh, NCMA, we realize that the enterprise thing, which we deliver the ACI solution for the enterprise, the realize that these services was the most complex way of incorporating into that particular architectures. So right from the beginning of interview realized that the, this particular thing is nobody has touched it, nobody thought about it out of the box thinking that how can you make it into a distributed fashion, which has also realized that cloud is going, everything distributed. >>They got away from the centralized appliances. So as the enterprise is now thinking of doing it cloud-like architectures and stuff like that. And the third thing which was really triggered us also, there was a company which is a new Poona which got acquired by Amazon in 2016 and we were looking at it what kinds of things they are doing and we said we can do much better architecturally and next generation, uh, architecture, which can really enable all the other cloud vendors. Some of them are our partners to make sure they can leverage that particular technologies and build the next generation cloud. And that's where this idea of new edge came in because we also saw that the new applications like IOT is five G's and artificial intelligence, machine learning, robotics or drones, you just name it intelligent devices, which is going to get connected. What is the best place to process them is at the edge or also at the backend with the application where the server is running these and that is another edge compute edge, right? >>In that particular sense. So our idea was to develop a product so that it can cover wide segment of the market, enterprise cloud providers, service borders, but focus very narrowly delivering these services into existing architectures. Also people who are building, building the next generation architectures. Right, so it's the distributed services platform or the distributed services architecture. So at its core for people that didn't make it today, what is it? It's basically is a distributed service platforms. The foundation of that is really our custom processor, which is we have designed is highly programmable. It's software defined so that all the protocols, which is typically people hardwired in our case is programmable. It's all programs which is we are writing the language which you selected as before and before extensions. The software stack is the major differentiated thing which is running on the top of this particular processor, which is we have designed in such a way that is hardware agnostics. >>The the, the capabilities which we have built is easily integrated into the existing environment. So if people already have cloud and they want to leverage our technologies, they can really deploy it in the enterprise. We are basically replacing lot of appliances, simplifying the architectures, making sure they can enable the service as they grow model, which is really amazing because right now they had to say firewall goes here, load balancer goes here, these a VPN devices goes there. In our case it's very simple. You put in every server of our technologies and our software stack and our Venice, which is our policy manager, which is sitting outside and it's based upon Kubernete X a architectures is basically a microservices, which is we are running and managing the life cycle of this particular product family and also providing the visibility and uh, uh, accountability in terms of exactly what is going on in that particular network. >>And it's all driven by intent-based architecture, which is policy driven, right? So software defined sitting on software defined Silicon. So you get the benefits of the Silicon, but it's also programmable Silicon, but it's still, you're sitting, you've got a software stack on top of that that manages that cloud and then the form factors as small as a Nick. Yes. So he can stick it in the HP HP server. Yeah. It specifically goes into any PCI slot in any server, uh, in the industry. Yes. It's amazing. Well, first incarnation, but, but, but, but, but that's a really simple implementation, right? Just to get radiation and easy to deploy. Right. And you guys are, you're yourself where involved in security that's involved in managing the storage. It's simple low power, which I thought was a pretty interesting attribute that you defined early on. Clearly thinking about edge and these distributed, uh, things all over the place. >>They're metal programmable. And then the other thing that was talked about a lot today was the observability. Yes. Um, why observability why was that so important? What were you hearing from customers that were really leading you down that path? Yeah, it's important. Uh, you know, surprisingly enough, uh, the visibility is one of the biggest challenge. Most of the data center faces today. A lot of people tried to do multiple different things, but they're never able to do it, uh, in, in the way we are doing it. One is that we don't run anything on the host. Some people have done it right on the train running the agent on the host. Some people have tried to run virtual machines on the those particular environment. In our case there's nothing which is running on the host site. It runs on our card and having end to end that visibility we can provide latency, very accurate latency to the, to the applications which is very important for these customers. >>Also, what is really going on there is the problem in the network. Isolation is another big thing. When something get lost they don't know where it got lost. We can provide that thing. Another important thing that you're doing, which is not being done in the industries. Everything which is we are doing is flow based means if I'm talking to you, there is a flow being set up between you and me and we are monitoring every flow and one of the advantages of our processor is we have four to eight gigabytes of memory, so we can keep these States, have these flows inside, and that gives a tremendous advantage for us to do lots of things, which as you can imagine going forward, we will be delivering it such as, for example, behavior of these flows and things from this point of view, once you understand the behavior of the flow, you can also provide lot of security features because if I'm not talking to you and suddenly I start talking to you and I know that there's something went wrong, right, right. >>And they should be able to look at the behavior analysis and should be able to tell exactly what's going on. You mean we want a real time snapshot of what's really happening instead of a instead of a sample of something that happened a little. No, absolutely. You're absolutely connected. Yeah. Yeah. Um, that's terrific. So you put together to accompany and you immediately went out and talked to a whole bunch of customers. I was amazed at the number of customers and partners that you had here at the launch. Um, was that for validation? Were you testing hypotheses or, or were there some things that the customers were telling you about that maybe you weren't aware of or maybe didn't get the right priority? I think it's all of the above. What you mentioned our, it's in our DNA by the way. You know, we don't design products, we don't design things without talking to customers. >>Validation is very important that we are on the right track because you may try to solve the customer problem, which is not today's problem. Maybe future's problem. Our idea was that then you can develop the product it was set on the shelf. We don't want to do that. We wanted to make sure that, that this is the hard problem customer is facing today. At the same time looking at it, what futuristic in their architecture is understanding the customers, how, what are they doing today, how they're deploying it. The use cases are understanding those very well and making sure that we are designing. Because when we design a seeker, when your designer processor, you know, you cannot design for one year, it has to be a longterm, right? And you need to make sure that we understand the current problems, we understand the future problems and design that in pretty much your spark and you've been in this space forever. >>You're at Cisco before. And so just love to get your take on exponential growth. You know, such an interesting concept that people have a really hard time grasping exponential growth and we're seeing it clearly with data and data flows and ultimately everything's got to go through the network. I mean, when you, when you think back with a little bit of perspective at the incredible increase in the data flow and the amount of data is being stored and the distribution of these, um, applications now out to the edge and store and compute and take action at the edge, you know, what do you think about, how do you, how do you kind of stay on top of that as somebody who kind of sees the feature relatively effectively, how do you try to stay on top of exponential curves? As you know, very valuable data is very important for anybody in any business. >>Whether it's financial, whether it's healthcare, whether it's, and it's becoming even more and more important because of machine learning, artificial intelligence, which is coming in to really process this particular data and predict certain things which is going to happen, right? We wanted to be close to the data and the closest place to be data is where the application is running. That's one place clears closest to the data at the edge is where data is coming in from the IOT devices, from the 5g devices, from the, you know, you know all kinds of appliances which is being classified under IOT devices. We wanted to be, make sure that we are close to the data, doesn't matter where you deploy and we want to be agnostic. Actually our technologies and architectures designed that this boundary is between North, South, East, West is going to go away in future cloud. >>A lot of things which is being done in the backend will be become at the edge like we talked about before. So we are really a journey which is just starting in this particular detectors and you're going to see a lot more innovations coming from us continuously in this particular directions. And again, based upon the feedback which you're going to get from cloud customers with enterprise customers, but they were partners and other system ecosystem partners, which is going to give us a lot of feedback. Great. Well again, thanks for uh, for having us out and congratulations to uh, to you and the team. It must be really fun to pull the covers off. absolutely. It is very historical day for us. This is something we were waiting for two years and nine months to see this particular date, to have our customers come on the stage and talk about our technologies and why they think it's very important. Thank you very much for giving me this opportunity to talk to you. Thank you. Alright, thanks prem. Thanks. He's prem. I'm Jeff. You're watching the cube where it depends. Sandow launch at the top of Goldman Sachs in downtown Manhattan. Thanks for watching. We'll see you next time.

(upbeat music) >> From New York City, it's theCUBE. Covering "Welcome To The New Edge." Brought to you by Pensando Systems. >> Hey, welcome back here ready. Jeff Frick here with theCUBE. We are high atop Goldman Sachs in downtown Manhattan, I think it's 43 floors, for a really special event. It's the Pensando launch. It's really called welcome to the new edge and we talked about technology. We had some of the founders on but, these type of opportunities are really special to talk to some really senior leaders and we're excited to have John Chambers back on, who as you know, historic CEO of Cisco for many, many years. Has left that, is doing his own ventures he's writing books, he's investing and he's, happens to be chairman of the board of Pensando. So John, thanks for taking a few minutes with us. >> Well, more than a few minutes, I think what we talked about today is a major industry change and so to focus on that and focus about the implications will be a lot of fun. >> So let's jump into it. So, one of the things you led with earlier today was kind of these 10 year cycles and they're not exactly 10 years, but you outlined a series of them from mainframe, mini client server everybody knows kind of the sequence. What do you think it is about the 10 year kind of cycle besides the fact that it's easy and convenient for us to remember, that, kind of paces these big disruptions? >> Well, I think it has to do with once a company takes off they tend to, dominate that segment of the industry for so long that even if a creative idea came up they were just overpowering. And then toward the end of a 10 year cycle they quit reinventing themselves. And we talked earlier about the innovator's dilemma and the implications for it. Or an architecture that was designed that suddenly can't go to the next level. So I think it's probably a combination of three or four different factors, including the original incumbent who broke the glass, disrupted others, not disrupting themselves. >> Right, but you also talked about a story where you had to shift focus based on some customer feedback and you ran Cisco for a lot longer than 10 years. So how do you as a leader kind of keep your ears open to something that's a disruptive change that's not your regular best customer and your regular best salesman asking for a little bit faster, a little bit cheaper, a little bit of more the same versus the significant disruptive transformational shift? >> Well this goes back to one of my most basic views in life is I think we learn more from our setbacks or setbacks we were part of, or even the missteps or mistakes than you ever do your successes. Everybody loves to talk about successes and I'm no different there. But when you watched a great state like West Virginia that was the chemical center of the world and the coal mining center of the world, the 125,000 coal mines, six miners very well paid, 6,000 of the top engineers in the world, it was the Silicon Valley of the chemical industry and those just disappear. And because our state did not reinvent itself, because the education system didn't change, because we didn't distract attract a new set of businesses in we just kept doing the right thing too long, we got left behind. Then I went to Boston, it was the Silicon Valley of the world. And Route 128 around Boston was symbolic with the Silicon Valley and I-101 and 280 around it. And we had the top university at that time. Much like Stanford today, but MIT generating new companies. We had great companies, DEC, Wang, Data General. Probably a million jobs in the area and because we got stuck in a segment of the market, quit listening to our customers and missed the transitions, not only did we lose probably 1.2 million jobs on it, 100,000 out of DEC, 32,000 out of Wang, etc, we did not catch the next generation of technology changes. So I understand the implications if you don't disrupt yourself. But I also learned, that if you're not regularly reinventing yourself, you get left behind as a leader. And one of my toughest competitors came up to me and said, "John, I love the way you're reinventing Cisco "and how you've done that multiple times." And then I turned and I said "That's why a CEO has got to be in the job "for more than four or five years" and he said, "Now we disagree again." Which we usually did and he said, "Most people can't reinvent themselves." And he said "I'm an example." "I'm a pretty good CEO" he's actually a very good CEO, but he said, "After I've been there three or four years "I've made the changes, that I know "I've got to go somewhere else." And he could see I didn't buy-in and then he said, "How many of your top 100 people "you've been happy with once they've been "in the job for more than five years?" I hesitated and I said "Only one." And he's right, you've got to move people around, you've got to get people comfortable with disruption on it and, the hardest one to disrupt are the companies or the leaders who've been most successful and yet, that's when you got to think about disruption. >> Right, so to pivot on that a little bit in terms of kind of the government's role in jobs, specifically. >> Yes. >> We're in this really strange period of time. We have record low unemployment, right, tiny, tiny unemployment, and yet, we see automation coming in aggressively with autonomous vehicles and this and that and just to pick truck drivers as a category, everyone can clearly see that autonomous vehicles are going to knock them out in the not too distant future. That said, there's more demand for truck drivers today than there's every been and they can't fill the positions So, with this weird thing where we're going to have a bunch of new jobs that are created by technology, we're going to have a bunch of old jobs that get displaced by technology, but those people aren't necessarily the same people that can leave the one and go to the other. So as you look at that challenge, and I know you work with a lot of government leaders, how should they be thinking about taking on this challenge? >> Well, I think you've got to take it on very squarely and let's use the U.S. as an example and then I'll parallel what France is doing and what India is doing that is actually much more creative that what we are, from countries you wouldn't have anticipated. In the U.S. we know that 50% of the Fortune 500 will probably not exist in 10 years, 12 at the most. We know that the large companies will not incrementally hire people over this next decade and they've often been one of the best sources of hiring because of AI and automation will change that. So, it's not just a question of being schooled in one area and move to another, those jobs will disappear within the companies. If we don't have new jobs in startups and if we don't have the startups running at about three to four times the current volumes, we've got a real problem looking out five to 10 years. And the startups where everyone thinks we're doing a good job, the app user, third to a half of what they were two decades ago. And so if you need 25 million jobs over this next decade and your startups are at a level more like they were in the 90s, that's going to be a challenge. And so I think we've got to think from the government perspective of how we become a startup nation again, how we think about long-term job creation, how we think about job creation not taking money out of one pocket and give it to another. People want a real job, they want to have a meaningful job. We got to change our K through 12 education system which is broken, we've got to change our university system to generate the jobs for where people are going and then we've got to retrain people. That is very doable, if you got at it with a total plan and approach it from a scale perspective. That was lacking. And one of the disappointing things in the debate last night, and while I'm a republican I really want who's going to really lead us well both at the presidential level, but also within the senate, the house. Is, there was a complete lack of any vision on what the country should look like 10 years from now, and how we're going to create 25 million jobs and how we're going to create 10 million more that are going to be displaced and how we're going to re-educate people for it. It was a lot of finger pointing and transactional, but no overall plan. Modi did the reverse in India, and actually Macron, in all places, in France. Where they looked at GDP growth, job creation, startups, education changes, etc, and they executed to an overall approach. So, I'm looking for our government really to change the approach and to really say how are we going to generate jobs and how are we going to deal with the issues that are coming at us. It's a combination of all the the above. >> Yep. Let's shift gears a little bit about the education system and you're very involved and you talked about MIT. Obviously, I think Stanford and Cal are such big drivers of innovation in the Bay area because smart people go there and they don't leave. And then there's a lot of good buzz now happening in Atlanta as an investment really piggy-backing on Georgia Tech, which also creates a lot of great engineers. As you look at education, I don't want to go through K through 12, but more higher education, how do you see that evolving in today's world? It's super expensive, there's tremendous debt for the kids coming out, it doesn't necessarily train them for the new jobs. >> Where the jobs are. >> How do you see, kind of the role of higher education and that evolving into kind of this new world in which we're headed? >> Well, the good news and bad news about when I look at successful startups around the world, they're always centered around a innovative university and it isn't just about the raw horse power of the kids, It starts with the CEO of the university, the president of the university, their curriculum, their entrepreneurial approach, do they knock down the barriers across the various groups from engineering to business to law, etc? And are they thinking out of box? And if you watch, there is a huge missing piece between, Georgia Tech more of an exception, but still not running at the level they need to. And the Northeast around Boston and New York and Silicon Valley, The rest of the country's being left behind. So I'm looking for universities to completely redo their curriculum. I'm looking for it really breaking down the silos within the groups and focus on the outcomes. And much like Steve Case has done a very good job on focusing, about the Rust Belt and how do you do startups? I'm going to learn from what I saw in France at Polytechnique and the ITs in India, and what occurred in Stanford and MIT used to occur is, you've got to get the universities to be the core and that's where they kids want to stay close to, and we've got to generate a whole different curriculum, if you will, in the universities, including, continuous learning for their graduates, to be able to come back virtually and say how do I learn about re-skilling myself? >> Yeah. >> The current model is just not >> the right model >> It's broken. >> For the, for going forward. >> K through 12 is >> hopelessly broken >> Yeah. >> and the universities, while were still better than anywhere else in the world, we're still teaching, and some of the teachers and some of the books are what I could have used in college. >> Right, right >> So, we got to rethink the whole curriculum >> darn papers on the inside >> disrupt, disrupt >> So, shifting gears a little bit, you, played with lots of companies in your CEO role you guys did a ton of M&A, you're very famous for the successful M&A that you did over a number of years, but in an investor role, J2 now, you're looking at a more early stage. And you said you made a number of investments which is exciting. So, as you evaluate opportunities A. In teams that come to pitch to you >> Yeah. >> B. What are the key things you look for? >> In the sequence you've raised them, first in my prior world, I was really happy to do 180 acquisitions, in my current world, I'm reversed, I want them to go IPO. Because you add 76% of your headcount after an IPO, or after you've become a unicorn. When companies are bought, including what I bought in my prior role, their headcount growth is pretty well done. We'd add engineers after that, but would blow them through our sales channel, services, finance, etc. So, I want to see many more of these companies go public, and this goes back to national agenda about getting IPO's, not back to where they were during the 90's when it was almost two to three times, what you've seen over the last decade. But probably double, even that number the 90's, to generate the jobs we want. So, I'm very interested now about companies going public in direction. To the second part of your question, on what do I look for in startups and why, if I can bridge it, to am I so faired up about Pensando? If I look for my startups and, it's like I do acquisitions, I develop a playbook, I run that playbook faster and faster, it's how I do digitization of countries, etc. And so for a area I'm going to invest in and bet on, first thing I look at, is their market, technology transition, and business model transition occurring at the same time. That was Amazon of 15 years ago as an example. The second thing I look at, is the CEO and ideally, the whole founding team but it's usually just the CEO. The third thing I look for, is what are the customers really say about them? There's only one Steve Jobs, and it took him seven years. So, I go to the customers and say "What do you really think of this company?" Fourth thing I look for, is how close to an inflection point are they. The fifth thing I look for, is what they have in their ecosystem. Are they partnering? Things of that type. So, if I were to look at Pensando, Which is really the topic about can they bring to the market the new edge in a way that will be a market leading force for a whole decade? Through a ecosystem of partners that will change business dramatically and perhaps become the next major tech icon. It's how well you do that. Their vision in terms of market transitions, and business transitions 100% right. We've talked about it, 5G, IOT, internet of things, going from 15 billion devices to 500 billion devices in probably seven years. And, with the movement to the edge the business models will also change. And this is where, democratization, the cloud, and people able to share that power, where every technology company becomes a business becomes a, every business company becomes a technology company. >> Right. >> The other thing I look at is, the team. This is a team of six people, myself being a part of it, that thinks like one. That is so unusual, If you're lucky, you get a CEO and maybe a founder, a co-founder. This team, you've got six people who've worked together for over 20 years who think alike. The customers, you heard the discussions today. >> Right. >> And we've not talked to a single cloud player, a single enterprise company, a single insurance provider, or major technology company who doesn't say "This is very unique, let's talk about "how we work together on it." The inflection point, it's now you saw that today. >> Nobody told them it's young mans game obviously, they got the twenty-something mixed up >> No, actually were redefining (laughs) twenty-something, (laughs) but it does say, age is more perspective on how you think. >> Right, right. >> And Shimone Peres, who, passed away unfortunately, two years ago, was a very good friend. He basically said "You've got all your life "to think like a teenager, "and to really think and dream out of box." And he did it remarkably well. So, I think leaders, whether their twenty-something, or twenty-some years of experience working you've got to think that way. >> Right. So I'm curious, your take on how this has evolved, because, there was data and there was compute. And networking brought those two thing together, and you were at the heart of that. >> Mm-hmm. Now, it's getting so much more complex with edge, to get your take on edge. But, also more importantly exponential growth. You've talked about going from, how ever many millions the devices that were connected, to the billions of devices that are connected now. How do you stay? How do you help yourself think along exponential curves? Because that is not easy, and it's not human. But you have to, if you're going to try to get ahead of that next wave. >> Completely agree. And this is not just for me, how do I do it? I'm sharing it more that other people can learn and think about it perhaps the same way. The first thing is, it's always good to think of the positive, You can change the world here, the positive things, But I've also seen the negatives we talked about earlier. If you don't think that way, if you don't think that way as a leader of your company, leader of your country, or the leader of a venture group you're going to get left behind. The implications for it are really bad. The second is, you've got to say how do you catch and get a replicable playbook? The neat thing about what were talking about, whether it's by country in France, or India or the U.S., we've got replicable playbooks we know what to run. The third element is, you've got to have the courage to get outside your comfort zone. And I love change when it happens to you, I don't like it when it happens to me And I know that, So, I've got to get people around me who push me outside my comfort zone on that. And then, you've got to be able to dream and think like that teenager we talked about before. But that's what we were just with a group of customers, who were at this event. And they were asking "How do we get "this innovation into our company?" "How do we get the ability to innovate, through not just strategic partnerships with other large companies or partnerships with startups?" But "How do we build that internally?" It's comes down to the leader has to create that image and that approach. Modi's done it for 1.3 billion people in India. A vision, of the future on GDP growth. A digital country, startups, etc. If they can do it for 1.3 billion, tell me why the U.S. can not do it? (laughs) And why even small states here, can't do it. >> Yeah. Shifting gears a little bit, >> All right. >> A lot of black eyes in Silicon Valley right now, a lot of negativity going on, a lot of problems with privacy and trading data for currency and, it's been a rough road. You're way into tech for good and as you said, you can use technology for good you can use technology for bad. What are some things you're doing on the tech for good side? Because I don't think it gets the spotlight that it probably should, because it doesn't sell papers. >> Well, actually the press has been pretty good we just need to do it more on scale. Going back to Cisco days, we never had any major issues with governments. Even though there was a Snowden issue, there were a lot of implications about the power of the internet. Because we work with governments and citizens to say "What are the legitimate needs so that everybody benefits from this?" And where the things that we might have considered doing that, governments felt strongly about or the citizens wouldn't prosper from we just didn't do it. And we work with democrats and republicans alike and 90% of our nation believed tech was for good. But we worked hard on that. And today, I think you got to have more companies doing this and then, what, were doing uniquely in JC2, is were literally partnering with France on tech is for good and I'm Macron's, global tech ambassador and we focus about job creation and inclusion. Not just in Paris, or around Station F but throughout all the various regions in the country. Same thing within India, across 26 different states with Modi on how do you drive it through? And then if we can do it in France or India why can't we do it in each state in the U.S.? Partnering with West Virginia, with a very creative, president of the university there West Virginia University. With the democrats and republicans in their national senate, but also within the governor and speaker of the house and the president and senate within West Virginia, and really saying were going to change it together. And getting a model that you can then cookie cut across the U.S. if you change the curriculum, to your earlier comments. If you begin to focus on outcomes, not being an expert in one area, which is liable not to have a job >> Right. >> Ten years later. So, I'm a dreamer within that, but I think you owe an obligation to giving back, and I think they're all within our grasps >> Right >> And I think you can do, the both together. I think at JC2 we can create a billion dollar company with less than 10 people. I think you can change the world and also make a very good profit. And I think technology companies have to get back to that, you got to create more jobs than you destroy. And you can't be destroying jobs, then telling other people how to live their lives and what their politics should be. >> Yeah. >> That just doesn't work in terms of the environment. >> Well John, again, thanks for your time. Give you the last word on >> Sure >> Account of what happened here today, I mean you're here, and Tony O'Neary was here or at the headquarters of Goldman. A flagship launch customer, for the people that weren't here today why should they be paying attention? >> Well, if we've got this market transition right, the technology and business model, the next transition will be everything goes to the edge. And as every company or every government, or every person has to be both good in their "Area of expertise." or their vertical their in, they've got to also be good in technology. What happened today was a leveling of the playing field as it relates to cloud. In terms of everyone should have choice, democratization there, but also in architecture that allows people to really change their business models, as everything moves to the edge where 75% of all transactions, all data will be had and it might even be higher than that. Secondly, you saw a historic first never has anybody ever emerged from stealth after only two and a half years of existing as a company, with this type of powerhouse behind them. And you saw the players where you have a customer, Goldman Sachs, in one of the most leading edge areas, of industry change which is obviously finance leading as the customer who's driven our direction from the very beginning. And a company like NetApp, that understood the implication on storage, from two and a half years ago and drove our direction from the very beginning. A company like HP Enterprise's, who understood this could go across their whole company in terms of the implications, and the unique opportunity to really change and focus on, how do they evolve their company to provide their customer experience in a very unique way? How do you really begin to think about Equinix in terms of how they changed entirely from a source matter prospective, what they have to do in terms of the direction and capabilities? And then Lightspeed, one of the most creative intra capital that really understands this transition saying "I want to be a part of this." Including being on the board and changing the world one more time. So, what happened today? If we're right, I think this was the beginning of a major inflection point as everything moves to the edge. And how ecosystem players, with Pensando at the heart of that ecosystem, can take on the giants but also really use this technology to give everybody choice, and how they really make a difference in the future. As well as, perhaps give back to society. >> Love it. Thank you John >> My pleasure, that was fun. >> Appreciate it. You're John, I'm Jeff you're watching theCUBE. Thanks for watching, we'll see you next time. (upbeat music)

>>From New York city. It's the cube covering. Welcome to the new edge brought to you by systems. >>Hey, welcome back everybody. Jeff, Rick here with the cube. We are in Manhattan at the top of Goldman Sachs. It is a great view if you ever get an opportunity to come up here, I think 43 floors over the Hudson you could see forever. But this is the cloud events. So the clouds are here and we're excited to be here is the Penn Penn Sandow launch in the name of the event is welcome to the new edge, which is a pretty interesting play. We hear a lot about edge but we haven't really heard of that company really focusing on the edge as their primary go to market activity and really thinking about the edge first. So we're excited to have the cofounder cube Olam and many time guests a Sony Gian Deni. She's the co founder and chief business officer. So many great to see you. Good to see you too. >>And our hosts here at Goldman Sachs is uh, Josh Matthews. He's a managing director of technology at Goldman. Josh. Great to see you. You too. And thank you and thanks for hosting us. Nice. A nice place to come to work every day. So great conversation today. Congratulations on the launch of the company over two years in stealth mode. Talk a little bit about that. What is it like to be in stealth mode for so long and you guys raised big money, you've got a big team, you're doing heavy duty technology. What's it been like to finally open up the curtains and tell everybody what you've been? >>It's clearly very interesting and exciting. Normally it's taken me nine months to deliver a baby this time it's been two and a half years of being instilled while we have been getting ready for this baby to come out. So it's phenomenally exciting that too to be sharing the stage with our customers and our investors and our strategic partners. >>Yeah, I thought it was pretty interesting that you're launching with customers and when you really told the story on stage of how early you engaged with Josh and his team, um, first I want to get your kinda your perspective. Why were you doing that so early and what did that ultimately do with some of the design decisions that you guys made? And then we'll come back to Josh as to, you know, his participation. >>So I think whenever you conduct technology transitions, having a sense from customers that have the ability to look out two to three years is very important because when you're capturing market transitions, doing it with customer inputs is far more relevant than going about it alone. Uh, the other key thing about this architectural shift is that it allows the flexibility for every customer to go take pieces of how they want to bring the cloud architectures and bring it into their environment. So understanding that use case and understanding the compelling reasons of what problems both technological and business can be solving and having that perspective into the product definition and the design and the influence that customers like Josh you've had is why we are sitting here and talking about them in production. Uh, as opposed to, yeah, we're thinking about where we are. We are looking at it from a proof of concept perspective. Right. >>And Josh, your, your perspective, you said earlier today that, you know, as long as a sign is involved, you're, you're, uh, you're happy to jump in and see what she's been working on. So how, >>you know, how did you get involved, how did they reach out to you and, and what is it like working on, you know, technology so early in its development that you get to actually have some serious influence? Well, it's an amazing opportunity, um, to get exactly what you want, um, exactly what you know is going to solve problems for the business here. Um, you know, and the other thing is, you know, we've worked with this team, uh, through almost every spinning. Uh, I think it was a little young for the, maybe the first one. Um, but, uh, otherwise this team has worked with them through at least 15 years or more. So we knew the track record for execution and then for us on this product, I mean, it was an opportunity because it's truly a startup. Um, you know, Sony and the team brought us in. >>Uh, we kind of just put out problems on the table that we were trying to solve and then, you know, they came up with the product and the idea and we were able to put together, you know, yeah, these are our priority one, two, three that we want to go for. And you know, we've just been developing alongside them. So both software and, you know, driving what the feature set is. Right. So what were some of those problems guys? Price seemed like forever ago when you started this conversation, but as you kind of looked forward a couple of years back that you could see that were coming, that you needed addressed. You know, it's funny, we started with kind of like, well we think containerization is going to be explosive and, and you know, really everything's on virtual machines or bare metal, mostly virtual machines. So one, you know, as containers come out, how do we track them, secure them, um, how do we even secure, uh, you know, the virtual machines and our environment cause they're, you know, over almost a quarter million of them. >>The idea of being able to put, um, network policy, that's I would say incorruptible, not actually on the server, but at, you know, that's why we use firewalls, right? So solving that security problem was number one. The other one was being able to have the telemetry to see what's happening, what's changing, um, and troubleshoot at, you know, at the network layer from every single server. Again, it's all about scale. Like things were just scaling and the throughput's going up, traditional methods of being able to see what's on your network. You can't look in the middle, it just can't keep up. It's just speeds and feeds. So being able to push those things to the edge. And then lastly, it really happened more, um, through the process here. But about a year and a half ago, um, we began segmenting our network the same way a 5g provider does with a technology called segment routing. >>And we just said, that's kind of our follow on technologies to, you know, put the network in the server and put this segment routing capability all the way out at the edge. So, you know, some things we foresaw and other things we've just developed. You know, it's been, it's been two and a half years. So, um, it's been a great partnership and you know, I think more, more features will come. Well Sony, you and the team, but it's been talked about all day long, have have a history of multiple times that you've kind of brought these big transformational technologies. Um, head what, what did you guys see a couple of years back and kind of this progression, you saw this opportunity >>to do something a little bit different than you've done in the past, which is actually go out, raise, raise around and uh, and do a real startup. What was the opportunity that you saw this? >>So we saw a number of challenges and opportunities. At the same time, we, we clearly saw that, uh, the cloud architectures that have been built by the leaders, like the incumbents like AWS today have a lot of the intelligence that is being pushed into their, their respective compute platforms. Uh, and we also noticed that at the same time, while that was what was needed to build the first generation of the cloud, the new age applications, and even as gardener has predicted that 75% of all enterprise data and applications will be processed at the edge by 2025. If that happens, then you need that intelligence at the edge. You need the ability to go do it where the action is, which is at the edge. And very consistently we found that the architectures, including scale out storage, we're also driving the need for this intelligence to be on in a scale-out manner. >>So if you're going to scale out computing, you need the services to be going hand in hand with that scale. Our computer architecture for the enterprises so they can simplify their architectures and bring the cloud models that have only existed in the cloud world, into their own data centers and their own private clouds. So there were these technology transitions we saw were coming down the pike. It's easier said now in 2019 it wasn't so simple in 2017 because we had to look at these multiple technology transitions. And surprisingly, when we call those things out, as we were shaping the company's strategy, getting validation of the use cases from customers like Josh was pivotally important because it was for the validating that this would be the direction that the enterprises and the cloud customers would be taking. So the reason you start with a vision, you start with looking at where the technology transitions are going to be occurring and getting the customers that are looking farther out validated plays a very important role so that you can go and focus on the biggest problems that you need to go and solve. Right, right. >>It just seems like the, the, the big problem, um, for most layman's is, is the old one, which, why networking exists in the first place, which is do you bring the data to the compute or do you bring the compute to the data? And now as you said, in kind of this hyper distributed world, um, that's not really a viable answer either one, right? Because the two are blended and have to be together so that you don't necessarily have to move one to the other or the other back the other direction. So, and then the second piece that you talked about over and over in your, in your presentation with security and you know, everybody talks about security all the time. Everybody gets hacked every day. Um, and there's this constant theme that security has to be baked in, you know, kind of throughout the process as opposed to kind of bolted on at the end. You guys took that approach from day, just speak >>it into the architecture. Yes. That was crucially important because when you are trying to address the needs of the enterprise, particularly in regulated markets like financial services, you want to be in a position where you have thought about it and baked it into the platform ground up. Uh, and so when we are building the program of a process, so we had the opportunity to go put the right elements on it. In order to make it tamper proof, we had to go think about encrypting all the traffic and communication between our policy manager and the distributed services platforms at the edge. We also then took it a step further to say, now if there were to be a bad actor that were to attack from an operating system vulnerability perspective, how do we ensure that we can contain that bad actor as opposed to being propagated over the infrastructure? So those elements are things you cannot bolt on at design time, or when you need to go put those into the design day one, right. Only on top of that foundation, then can you build a very secure set of services, whether it's encryption, whether it's distributed via services, so on and so forth. >>Uh, and Josh, I'm curious on your take as we've seen kind of software defined everything, uh, slowly take over as opposed to, you know, kind of single purpose machines or single purpose appliances, et cetera. Yep. Really a different opportunity for you to control. Um, but also to see a lot of talk today about, about policy management. A lot of talk about, um, observability and as you said now even segmentation of the networks, like you segment the nodes and you segment everything else. You know, how, how do you see this kind of software defined everything continuing to evolve and what does it enable you to do that you can't do with just a static device? I mean, the approach we took, um, we started like, you know, years ago, about six years ago was saying we can get computers, uh, deployed for our applications. No problem. Uh, and you know, at, at on demand and in our internal cloud, now we can do it as a hybrid cloud solution. >>One of the biggest problems we had in software defined was how do you put security policy, firewall policy, um, with that compute and in, you know, our industry, there's lots of segmentation for material nonpublic information. Um, compliance, you know, it could be internet facing, B2B facing. Uh, we do that today. We program various firewall vendors automatically. Uh, we allow our application developers to create, um, these policies and push them through as code and then program the firewall. What we were really looking to do here is distribute that. So we F day one in getting pen Sandow into production was to use our uh, our firewall system. It's called pinnacle. We, um, we programmed from pinnacle directly into the Penn Songdo Venice manager via API and then it, you know, uses its inventory systems to push those things out. So for us, software defined has been around, I like to call it the store front, but for the developer it's network policy, it's load balancing. >>Um, and, and that's really what they see. Those are the big products on the net. Everything else is just packet forwarding to them. So we wanted with pen Sandow at least starting with security to have that bar set day one and then get, you know, all the benefits of scale, throughput and having the policies close to the, on the edge. You know, we're back to talking about the edge. We want to right there with the, with the deployment, with the workload or the application. And that's, that's what we're doing right off the bat. Yeah. What are the things you mentioned in your talk was w is, you know, kind of in the theme of atomic computing, right? You want to get smaller and smaller units so that you can apply and redeploy based on wherever the workload is and in the change. And you said you've now been able to, you know, basically take things out of dedicated, you know, kind of a dedicated space, dedicated line and dedicated job so that you can now put them in a more virtualized situation. >>Exactly. Grab more resources as you need them. Well, you'd think the architecture, I mean even just theater of the mind is just, you're saying, I'm going to put this specific thing that I have to secure behind these firewalls. So it's one cabinet of computers or a hundred it's still behind a set of firewalls. It's a very North, South, you know, get in and get out here. You're talking about having that same level of security and I think that's novel, right? There hasn't been, if you look at virtual firewalls or you know, IP tables on Linux, I mean it's corruptible. It's, it's, it can be attacked on the computer. And once it's, you know, once you've been attacked in that, that that attack vector has been, you know, hit your, your compromised. This is a separate management plane. Um, you know, separate control plane. The server doesn't see it. >>That security is provided. It's at scale, it's East, West. The more computers that have the pen Sandow, you know, architecture inside of them, the, you know, the wider you can go, right. And then the North South goes away. I'm just curious to get your perspective. Um, as you know, everyone is a technology company. At the same time, technology budgets are going down, people are hard to hire. Uh, your data is growing exponentially and everything's a security threat. Yes. So as you get up in the morning, get ready to drive to work and you're drinking your coffee, I mean, how do you, you know, kind of communicate to make sure to senior management knows kind of what your objectives are in this, this kind of ongoing challenge to do more with less. And it, even though it's an increasingly strategic place or is it actually is what the company does now, it just happens to wrap it around your plane services or financial services or travel or whatever. >>Uh, I think your eye, and I had said it to John before, um, it has to come from that budget has to come from somewhere. So I think a combination of, of one that's less, well, I'll say the one that's easier to quantify is you're going to take budget from say appliance manufacturer and move it to a distributed edge and you're going to hopefully save some money while you do it. Um, you're going to do it at scale. You're gonna do it at, you know, high throughput and the security is the same or better. So that's, that's one, that's one place to take capital from. The other one is to say, can I use the next computer? Yes. Because I don't have to deploy these other new computers behind this stack of firewalls. Is there agility there? Is there efficiency, um, on my buying less servers and using, you know, more of what I have and doing it, you know, able to deploy faster. >>And it's harder to quantify. I think if you could, you know, over time, see I bought 20% less server, uh, capacity or, you know, x86 capacity, that's a savings. And the other one that's very hard to quantify, but it's always nice to have the development community. And we've had it recently where they say, Hey, this took me a month to deploy instead of a year. Um, and you know, the purchase cycles, uh, you know, for procurement and deployment, they're long, you know, in enterprise you want them to be quick, but they're really not. So all of those things add up. And that's the story. You know, I would tell, you know, any manager, right? Yeah, >>yeah. I think, you know, the old historic way that utilization rates were just so, so, so, so low between CPU and memory, everything else. Cause if nothing else, because to get another box, you know, could take a long time. Yeah. Well, final, final question for you, Tony. You talked about architectures and being locked into architectures and you and you talked about you guys are already looking forward, you know, to kind of your next rev, your next release, kind of your next step forwards. What, where do you see kind of the direction, don't give away any secrets, but um, you know, kind of where you guys going. What are your priorities now that you've launched? You got a little bit more money in the bank. >>Well, our biggest priorities will be to focus on customer success is to make sure that the customer journey is indeed replicable at scale, is to enable the partner's success. Uh, so in addition to Goldman Sachs, the ability to go and replicate it across the federated markets, whether it's global financial services, healthcare, federal, and partnering with each B enterprise so that they can on their platform, amplify the value of this architecture, not just on the compute platforms but on, in other areas. And the third one clearly is for our cloud customers is to make sure that they are in a position to build a world class cloud architecture on top of which then they can build their own, deliver their own services, their own secret sauces, uh, so that they can Excel at whatever that cloud is. Whether it's to become the leading edge platform as a service customer, whether it is to be the leading edge of software's a service platform customer. So it's all about the execution as a, as you heard in that room. And that's fundamentally what we're going to strive to be, is to be a great execution machine and keep our heads down and focused on making our customers and our partners very successful. >>Well, certainly, congratulations again to you and the team on the launch today. And Josh, thank you for hosting this terrific event and being an early customer. Yeah. Yeah. Happy to be. Alright. I'm Jetta. Sone. Josh, we're the topic. Goldman Sachs at the Penn Sandow the new welcome to the new edge. Thanks for watching. We'll see you next time.

>> From New York City, it's theCUBE, covering Welcome to the New Edge. Brought to you by Pensando Systems. >> Hey, welcome back everybody, Jeff Frick here with theCUBE. We're on top of Goldman Sachs in downtown Manhattan. It was a really beautiful day a couple of hours ago, but the rain is moving in, but it's appropriate 'cause we're talking about cloud. And we're here for a very special event. It's the Pensando launch, I'll get the pronunciation right, Pensando launch, and it's really about Welcome to the New Edge. And to start off, I mean, I couldn't come up with two better tech executives who've been around the block, seen it all, and they're both here for this launch event which is pretty special. On my left, Antonio Neri, CEO and president of HP. Antonio, great to see you. >> Thanks for having me. >> And John Chambers, of course we know him from his many years at Cisco, but now he's the chairman of Pensando, and of course J2 Ventures, and an author, and John, you're keeping yourself busy. >> I am, tryin' to change the world one more time. >> All right, so let's talk about that changing the world, 'cause you are two very high, powerful people. You run big companies, and you talked about, in your opening remarks, the next wave. You talked about these kind of 10-year waves. And we're starting a new one, which is why you got involved. Why did you see that coming, what do you see in Pensando, and how are we going to address this opportunity? >> Well, when you think about it, every 10 years there's a new leader in the marketplace, and nobody has stayed on top longer than 10 years and has led in the next market transition. We think about mainframes, IBM clearly the leader there, the mini computers, I'm biased toward Wang, but DEC was there. Then the client server and obviously Microsoft and Intel playing a very key role, followed by the internet where Cisco was very, very successful. And then followed, literally by that, by social media and then the cloud and then what I think will be bigger than any of the prior ones, it's about what happens as the cloud moves to the edge. And we may end up having a different term every time, but that really is what we saw today. And how we came together with a common vision as the cloud moves to the edge, what could an ecosystem of partners do, with a foundation, with Pensando at the core of that, to really take advantage from how do you deliver services to our joint customers in a way that no one else can. And have the courage, really, to go challenge Amazon in terms of their market dominance, but provide choice and say it's a multi cloud world. How do you provide that choice and then how do you differentiate it together with each partner? >> Antonio, you guys have been talking about edge for a long, long time. You've been on this for a while. HP's such a great company. Used to be, I think, one of the great validators if anyone could do a deal with HP. It was really a technology validation and a business validation, and I think that still holds true. So you must have, knocking on your door all day long. What did you see in this opportunity with Pensando? >> Well, first of all, John and I see the world from the same lens. We see a world where the enterprise of the future will be essentially cloud enabled and data-driven. And therefore we have to remove these barriers, call it the cloud in one place or the other one. We are going to live what are calling a edge-to-cloud world where, is a cloudless. Where the cloud experience is distributed everywhere. And where action happens is where we live and work right now, right here. We're having a conversation, we're producing data, and we are transmitting this real time. So, the point is, we believe the edge is a new frontier and that's where the vast majority is being created, 75%. of it created the edge. And this is where it starts by having a common vision and ultimately a same DNA, same culture. John and I share the same values for passion for customers, passion for driving a customer-driven innovation, and ultimately change the world like we have done for decades. And I think Hewlett-Packard Enterprise is uniquely positioned to be the edge-to-cloud platform delivered as a service. And together with Pensando and the great technology I bring about from the silicon side and on the softer side, together with our own knowhow and engineering capabilities, we can change the world again. >> And the fun part is, we can almost finish each other's sentences. (all laughing) We have a little bit different accent. The stability to have a common vision, having never really talked about it, and then a view of the common culture. Because strategic partnerships are really hard. And you said it on stage, but I cannot agree with it more. If you're cultures aren't similar, if you don't think how does your partner win first and how do you win second, this is very hard to do. And we can finish each other's sentences. >> And I think there is another point here that John and I truly believe, because it's part of our values. It's to use technology for good. So, one thing is accelerating the business innovation and what our enterprise customers are going through, but then how apply that technology to deliver some good. And we as a company have a clear purpose in life, which is to advance the way people live and work. So, I think as we go through this massive inflection point, both from the business side and the technology side, not only we can create a better world, but also give back somewhat to the communities as well. >> There are massive changes, and it's a sea-change in infrastructure in the way things are done, but you hit on three really key, simple words in your remarks earlier. Trust, engineering-driven, which is HP's culture from the earliest garage days, and customer-centric. So, we hear about data-driven but in engineering, you don't necessarily want to lead with that. Customer-centric you do have to lead and it's pretty interesting at Pensando, you talk to all these customers, and you're just launching the company today, you've been in stealth for over two years. But all these customers have been engaged with you since the very, very beginning. Pretty interesting approach. >> It is, and we do share a common passion on that. Every company says they're customer-driven, but just ask how the CEO spends his or her time. I just asked their customers, do they replace them first on every issue? We share that common value completely. >> Yeah, I spend 50% of my time on the road talking to customers. That's my goal, because I believe the truth is in the cold face. When you talk to customers, you get the truth, what the challenges and opportunities are. And we need to bring that succinct feedback back into our problem management engineering team to try to solve there's a problem. So take advantage of those opportunities by delivering a better experience. It starts with experience first and technology comes second. >> The other piece you talked about is your team, and diversity and really the power of diversity. And, I think it was, the Lincoln cabinet, band of people that didn't get along with each other and had a bunch of different points of view. But because of that, it surfaces issues and it lets you see multi sides. You said you handpicked that team. What are some of the things you thought about when you handpicked your team when you took the reins a couple years ago from the-- >> Well, it starts by, thought leadership and what, how they see the world, ultimately what the strengths are and how we bring those strengths for the power of one. I agree with John, I believe a team comes first, individual comes second. And if you can bring the best of each individual in a concerted way where you create an environment for debate and ultimately for getting alignment and moving forward with execution. That's what that is all about, leadership. So, I handpicked those people because each of them had that unique quality. Whether it's, you know, being very self-centric in the way you deliver the value proposition or very technology-centric, or very services oriented. So, we have picked those people for a reason and it's not easy to manage a very opinionated team. (all laughing) But once you can get them aligned, is actually incredible fun to watch. >> You know, I would make one tweak to what you just asked the question on. I had a chance to watch his team for the first time in our garage startup at my house. And they are very diverse with different opinions, they are very comfortable with disagreeing with each other. But they have a common set of values and a common end goal. I'm not sure the Lincoln cabinet had that. And that's so important to realize, because what we're about to do together and what each of us are trying to do in our own endeavors, it's so important to have a team that has that type of culture and the ability to move for that. >> The other team that mentioned, that kept coming up throughout the day, was the team that you're working with on Pensando. And how this team has been together for, I think you said the new 20, right? 25 plus years, and have built multiple projects, multiple products over many, many years. And now have this cohesion as you keep saying, they can finish their own sentences. You know, a really specific approach to get this group together that you know is not going to be strategy, it's going to be delivery. >> It is going to be the combination, if I may. And it is very unique that a team works together for over 25 years. It's a team that is a family and we are about as diverse as it gets in our backgrounds, our accents, our countries that our families came from. But it's a team that competes purely on getting market transitions right, that is always driven by our customers and what we need to do and build and put 'em always first in everything we do. And then it's fearless. We outline audacious goals at being number one in everything we do, and out of the eight products that we built together, we are number one in all eight. All of 'em with over 50% market share, and there was no number two. And so the ability to execute with that type of precision, customer-driven and the courage to do it and understand what we know and what we don't know. Coming together one more time, I mean it's really exciting, it will be a new definition of 20 somethings in a startup. >> So, getting you the last word Antonio, as you looked at John's chart with those 10-year blocks and the garage has been around Palo Alto for a long time. >> 82 years. >> You guys have seen a lot, 82 years, you've been through a few of these and you're still here and still doing a great job and still winning. So, as you look at that from your current position as CEO, what goes through your head? How are you making sure you're keeping ahead? How are you avoiding the Clayton Christensen Innovator's Dilemma, to make sure you're killing your own business before somebody else kills kind of the old stuff and making sure you're out in front. >> When I became a CEO, in the transition from Meg to me, I established three key priorities for myself. One is our customers and partners. Keep them at the center of everything we do. That's one of our core values. Second is innovation, innovation, innovation. Innovation from a customer-driven approach. And third is the culture of the company. And what a great example here with John, you know, leading an iconic company for decades. And so to me, I have been working very aggressive on the three of those aspects. And I'm very pleased with the progress we have made. But, now is about writing the next chapter of this company. And in order to write that next chapter company, you need to have a strong alignment at the top, all the way down, what I call ropes to the ground. So, fun enough, John is going to be in my event here in a couple of weeks. We'll bring the leadership team, the top 400 leaders, talking about how to disrupt yourself and how you pay for the company into the future. And the future, as I said, is we see an enterprise that's edge-centric, cloud-enabled, and data-driven, delivered as a service. So we are going to be the, as a service company with an edge-to-cloud platform that accelerates business from the data. And the combination of Pensando technologies and engineering capabilities, with our vision and our own intellectual property, we think we can deliver those unique experience for the customers in a more agile, cost-effective way and democratize the cloud, as John say, for the world. So, I'm incredibly excited about doing this. And who thought that John Chambers and Antonio Neri would be here, you know. And the reality is it takes leadership, so I value leadership, I value trust, and this partnership is built on trust. And we both have the same values. >> I appreciate you taking the time. I mean, we're going to talk about the products a little bit later. We've got some of the deeper product people. But, you know, I think the leadership thing is so important and I think it's harder. I think it's hard to be a great leader, it's hard to lead through transitions, and the pace of change is only accelerating, so the challenge is only going to increase. But I think communication and trust is such a big piece. I saw Dave Pottruck speak many, many times and he's very, very good. And I asked him, 'cuz we had a thing at school. I said, "Dave, why are you so good?" And he said, "Very simple. "As a CEO, my job is to communicate. "I have three constituents. "I have my customers, I have the street, "and I have my employees. "And so I treat it as a skill, I practice, I got a coach, "and I treat it like any other skill." And it's so hard and so important to provide that leadership, provide that direction, so everybody can pull the rope in the same direction. Nothing but the best to both of you and thanks for taking a few minutes. >> Thank you. >> It was a lot of fun. >> All right. >> It's a pleasure. >> Thank you. >> He's Antonio, he's John, I'm Jeff. You're watching theCUBE, from the top of Goldman Sachs in Manhattan. Thanks for watching, we'll see you next time. (upbeat music)

from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hi everybody welcome to this edition of the cube insights powered by ETR in this breaking analysis we're going to look at IBM's systems business and specifically the IBM system z and talk about the impact that it's going to have on IBM financials now Alex if you would kindly bring up the first slide so this is data from ETRS spending intention survey for the second half of 2019 they asked customers compared to the first half of 2019 what are you spending intentions on the second half of 2019 specifically for IBM so you can see the end here is 448 customers out of their panel of 45 hundred of which around 11 or 1,200 answered this question specifically cited that they were IBM customers what this data shows is 21% of the customer said we're gonna increase spend in the second half relative to the first half with IBM 52% said we're gonna stay flat 14% said they're gonna decrease you see 6% said we're gonna basically leave the IBM platform and 7% said we're gonna bring on IBM as new we're a new customer so if you take the people that are spending more and new and subtract out the leaving and the spending less you get a net score and you get a net score of 8% now we've been sharing with you this ETR data over the last several weeks and months 8% is not great IBM according to et are spending surveys are losing share relative to the overall market you know we've covered this pretty extensively we covered the red hat acquisition and talked about how that IBM intends to supercharge its its cloud business you know specifically with red hat I've said I've been on record saying this is largely a services play where they're gonna basically take red hat app as an application development platform and help there customers are modernize their systems from using their large services footprint to do that but so and I want to talk for a moment about the IBM business overall iBM is all about mission-critical work the IBM's II their high-end systems they're related database it's all about mission-critical work IBM shared some data with analysts recently where they talked about if you if you look at IBM Z by VM security business its database you know particularly db2 it's middleware it's application management services and its infrastructure and all that set a consulting work that goes around that add that up it accounts for 60% of IBM's revenue so this is why I want to spend some time talking about IBM Z I mean it's a kind of a boring but important topic it used to be the heart of IBM's business that used to drive you know entirely their their income statement but in fact today it's still very critical all those pieces that I mentioned account for 60% of that business so Z is critical for driving IBM's systems business and that gives air cover for IBM's business overall so Alex if you bring up the next slide what I've done is just pulled out some quarterly data of IBM's system's revenue overall and then juxtapose it against IBM's Z revenue this is growth this is just percent growth so the blue is IBM Z percent revenue growth relative to the previous year this is in constant currency by the way and as well it excludes the elimination of IBM's systems X business the Intel based business so it's normalized for that and then the orange is the overall systems growth so you can see that the blue grows virtually immediately after IBM announces a new system so for instance in January of 2013 IBM announced the z13 we were there with the cube to cover it we talked to a number of practitioners what big banks and big mainframe customers do and by the way 25 of the world's top 25 banks run on Z a huge proportion of retail giant's run on Z why because it is the system of record and the the top system of record along with Oracle in the world I'll talk more about that but you can see here Z 13 so we talk to a lot of practitioners at the January launch and they told me they buy this thing sight unseen because they know it's gonna drive revenue for them if they can get more power and more performance lower cost it drops right to their bottom line so you can see 2016 even though there was a kicker in there of the you know next generation not next generation but a kicker to the Z I didn't show it here but bad year in 2016 in terms of growth and you can see the blue is proportional to the orange it drags it down in here Z 14 is announced and you can see when the Z 14 was announced in July of 2017 just right after that boom big uptick in Z revenue and proportional systems revenue so you're on this sort of two-year cycle of Z announcements and you can see 2019 in the first half has not been great IBM just announced the Z 15 in September so we fully expect that in q4 you're gonna see that uptick so kinda wanted to share that with you next slide I want to make a couple of points about IBM systems business it's about an eight billion dollar business overall in terms of annual revenue it comprises Z power and storage says they say system Z drags a lot of software it drags a storage it drags services it's about a fifty three percent gross margin business the storage business is actually I think a quite a good gross margin business I think probably you know higher than power the server business is not you know the greatest gross margin I think mainframe is still pretty good IBM and Oracle dominate the business for systems of record Oracle with exadata and IBM with with Z now you might say hey Exadata is is growing and Z you know it's it's I just showed you this sort of fluctuation but overall it's sort of you know flattish maybe it can eke out a you know growth and it actually can show good growth in one year but if you normalize it over a couple of years it's pretty much a flat business or declining business so you might say well Oracle X is growing but that's because Oracle is replacing its entire hardware business and much of its you know related software business with Exadata all that would behind one arrow where as you know IBM has a more diversified portfolio and so that's kind of apples to oranges comparisons now the ETR data shows that the storage intention intentions for the second half of 2019 really flipped to positive territory servers were still negative but improving and so as I showed you in the previous slide I definitely would expect the system's business to have an uptick in q4 and and it's dragging storage with it IBM synchronized the the storage announcement the DSA thousand without not great with model numbers but the recent storage announcement with the mainframe announcement I'll make some more comments about that but you see it seems that IBM's trying to do a better job of synchronizing that iBM is also going to smooth out it's it's it's systems revenue I believe I mean it's right now it's very cyclical but I'll make some comments about that in a moment so IBM System z and Exadata are unique in that their IO is tightly integrated these are purpose-built systems and and the storage is in the IO or purpose-built for the systems of record so they're very very low latency give an example Oracle Exadata recent announcements at Oracle OpenWorld I think 18 microseconds latency IBM with its recent Z announcement I think is even lower I want to say 15 microseconds but don't hold me to that where is it if you compare that to traditional systems you're talking about maybe 200 microseconds in other words those systems that aren't purpose-built for systems of record with integrated i/o the i/o is hardwired with custom silicon and a-sixes so it's ultra ultra fast i/o which means you can push ten times the i/o through the system so very very high performance relative to what you saw in you know kind of previous generations why do I spend so much time talking about this because this is a harbinger for future systems developments talking you know within two to three years you're gonna see the mainstream systems with this type of low latency so you know you might also say well that means that the IBM and the X data business are in big trouble no these are these systems are not going to be replaced and not going to be migrated it's too risky it's too expensive we've talked about that a lot on the cube where it just doesn't make business sense for people to convert off the Z mainframe there's too much custom code they'd have to freeze that code for many many months maybe even longer they'd risk their business they can make much more money purchasing the next generation of system as long as the Z mainframe continues to add function which it's doing same thing with Oracle Exadata years ago IBM you know announced support for Linux obviously you know Red Hat is you know now another key piece of that they just in recent z15 announcement encryption everywhere they announced you know a hybrid cloud so basically bringing the Z to cloud a really strong security focus this cloud piece is interesting you know we talk a lot about cloud 2.0 bringing the Z in to this in the systems of record - cloud is something that IBM has said that it intends specifically to do that will begin to potentially smooth out I beams Z revenue you know it's ironic in the little in the late latter part of the 1980s kind of a financial game that IBM was playing they converted their rental base which was a monthly income stream to purchase when they did that it created the effect of showing up on the income statement and kind of hiding the trouble that IBM was really in when that transition ended IBM really tanked and that's when IBM got into big trouble the whole downsizing trend Gerstner came in they bought PwC and really transformed the company but the Z as the system of record or the old 3090 has has has lived on now we're seeing that dynamic come full circle where over time IBM can shift from a from a an upfront pay to a subscription which is as I say coming full circle it's gonna be interesting to see how that transition works the other point again the storage seems to be synchronizing its product cycles with Z at least at the high end and so this is likely to carry through to q4 we see from the ETR spending data that storage intentions are up I think the net score was was up 5% versus a negative from the previous quarter servers overall we're still down they don't have a question specific to Z but I would expect fully expected that q forward this year you're going to see a nice uptick in Z revenue and as it pointed out before with that 60% number this is going to provide another halo effect for ibm's overall business will it be enough to propel the stock you know probably not this stuff is factored in the the analysts understand these product cycles but it's something that I wanted to shine a light on because again it's it's one of these sort of important topics that not a lot of people talk about people kind of roll your eyes when you talk about the mainframe but the mainframe is here it's alive and well and you know what I call mainframe Oracle Exadata and IBM Z are really sort of the two companies that are prominent in that space and you know well they might compete to my earlier point you're really talking about each company having its own install base and as long as they keep investing in R&D and keep those product cycles coming I would expect that this business is gonna be healthy yet cyclical cyclical for a long long time this is Dave Volante for the cube insights powered by ETR we'll see you next time thanks for watching