>> Announcer: From around the globe, it's theCUBE with digital coverage of AWS re:Invent 2020, sponsored by Intel, AWS and our community partners. >> You're watching continued coverage of AWS re:Invent 2020. I'm sure you're joining just a couple of hundred thousand of your closest friends and family on the web as we engage this AWS builder community in a very different way this year. I'm super excited to have one, for the first time Flexera on theCUBE program, I'm Keith Townsend @CTOAdvisor on Twitter and I'm joined by the CEO of Flexera, Jim Ryan. Jim, welcome to the show. >> Thanks for having us Keith. >> And Marie Godfrey, Senior Vice President of Product at Flexera. >> Thanks. It's good to be here. >> Welcome to the show. So, first off, I think most of the industry knows Flexera from the famous survey you guys do every year. Help us understand, what's the purpose of the survey and the intent of it? >> I think the purpose of the survey is to continue to provide the pulse of the market to our customers and the market at large. This is not a revelation to say that cloud, hybrid cloud, multi-cloud is an ever-changing fast, fast moving target in the industry and we find that by pulsing our customers and pulsing the market and then in return, giving people a broader sense as to what's going on, how they view the current top three challenges that they're facing, allows people to just stay relevant and stay current without having to do so much heavy lifting themselves. >> So, talk to me about the other part that's not as famous. Marie, the product, what's the primary goal of Flexera? >> So, to take off from what Jim said, the state of the cloud report that we issue every year is just one of many that we do research on and we published and Flexera hasn't always been known as a cloud management tool or a cloud provider of optimization solutions for the cloud. We have grown up and our legacy is very much on software asset management. So, over the course of both organic and inorganic means, we find ourselves in this great position now to be able to talk to not only our core strengths as an organization and as a company, but also what we do to help our customers optimize their cloud cost. >> So, one of the interesting outputs or data points from the report is this 70/30 split. I've seen it as 80/20, 70/30, more or less the same ideal concept that we spend 30% of our time basically on these innovative projects but 70% of our time basically on traditional IT operations. How does that impact your team's view of the market? >> Well, I think it profoundly impacts our view. You can call it the elephant in the room or you can call it the immovable object. The fact of the matter remains is that although a lot of the focus, attention and an ever increasing share of everybody's budget is being focused and centered on the cloud, if you're a CIO or somebody working in the CIO's organization, what you've got to realize and focus on is that 70% of your applications in your spending in your tech stack, are still on premise and VMs and other things that simply cannot be ignored. So, our overarching value proposition above and beyond remaining relevant in the cloud and publishing the state of the cloud is we focus on giving CIOs and IT teams the insight as to what's going on in your on-prem estate and if we do our jobs properly with our technology stack, it's identifying overuse or cost optimization opportunities, so, you can take dollars from your legacy stack and throw it over to invest in more innovative things that's going to move the needle for your business. >> So, that's a pretty interesting, I think value pop especially where the public cloud show help me understand kind of the overall challenge when we're thinking about public cloud, where typically less than 30% of our resources are probably in the public cloud. For most people watching this interview and the majority are on the private cloud, how does like Flexera help me to extract the value of both environments? >> Well, that's by robbing Peter to pay Paul, right? So, for everybody listening in here, lean in and listen. The biggest problem that we have when we're talking with our customers is that the cloud people aren't talking to the legacy on-prem asset management people and like Americans or everybody else, we got to just get together and talk to one another so, there's money and budget dollars to be extracted on the legacy on-prem last glamorous stuff of the house here and I say with great certainty not knowing all of the situations with everybody that's watching this, that I'm sure that you fight for single Dollar, Euro, Pound, Yen, et cetera, et cetera that you want to spend on your cloud initiatives. By collaborating with your brethren and your sisters over on the other side of the aisle and by looking at what's going on on the on-prem estate here, you can identify opportunities where you can reallocate budget dollars. >> So Marie, you guys have this term that I've not seen before, Technology Value Optimization or TVO, explain that to me. >> So, TVO is just the latest evolution in terms of how we think about our portfolio and our place in this ecosystem. That includes not just your traditional infrastructure management but this bridging and this realization of value when it comes to how we help our customers extract the value from what we do really, really well which is all around discovery of IT assets. It's around knowing my entitlements, it's around understanding my usage and now of course we brought cloud assets into the picture and helping our customers not only understand and see into those cloud assets but really look at how do I right size? How do I reclaim dollars? How do I avoid failed audits and really understand my usage patterns and what it is I need to do to enact and move toward that digital transformation that Jim referred to? So, at the end of the day, how we think about technology value optimization is that critical factor which is all around understanding the return on the investment and how to better understand and monetize the value for our customers in terms of what they have today and where they need to go. >> Ken, I wanted you to shed some light in what we consider or what we should now consider assets in this new era of cloud, and that your traditional products that how could others understand the AS or the asset either is a server or a virtual machine on that server networks switch etcetera but as I look at SaaS and past platforms and infrastructure as a service platform, what is the asset in this new world? >> By my definition, an asset is anything that your company spend money on and you need to get a return on it. So, 10 years ago, if we were having this conversation, an asset would have been a desktop, a router, a server, or maybe it would be a multi-core server and as things started to get a little bit more complicated, we added virtual machines. So, assets weren't just physical devices, they were virtual devices where we really cut our teeth and made a name for ourselves at Flexera was in software license optimization or software asset management, which is you take all of your physical assets and then you throw software applications from IBM, Oracle SAP, Microsoft and you put those two together and what you have are licensable events or financial exposure, because it's not just as simple as buying a database from Oracle, Oracle is going to want to know how many cores you're running on the server, and all of those different combinations in a Rubik's cube of complexity throw off licensable or financial events and while I'd love to tell everybody that the cloud and hybrid cloud and multi-cloud is making it easier, it's actually making it more sophisticated and more complicated to try and get your head around it because now you have containers and just when we thought we had figured out VMs and what assets and things are running in VMs, you've got containers that are going up and down and trying to find out what assets are in containers across a hybrid multicloud environment says the latest instantiation of chasing your tail here in the business. >> And then help me think through, or at least visualize this concept of entitlements when it comes to the cloud era. When I had on premises assets, I could go and look at my Oracle license and maybe figure out what I was entitled to but now when I, especially when I think of multicloud multi-service and even hybrid where Microsoft gives me credits or on premises services versus off-prem services, help me understand how I should be looking at that and how Flexera helps. >> I think you've got to be looking at it at closely and you can't look at it in isolation. So what you can't do is look at what you've got spun up in an Azure environment and AWS or Google cloud environment, because you're only going to negotiate one agreement with Microsoft most likely. You're only going to negotiate one ELA with IBM or Oracle, or fill in the blank and you know what, Oracle's not going to care what you're running in just cloud if they come and audit you. They are going to perform an audit, and they're going to want to know what you're running in in an on-prem world in VMs, on your data center and your desktop, and then they're going to want you to bring to full account what you're running in your cloud environments as well. So the way Flexera helps you is that we can discover, and we can give you an unprecedented visibility into what's running throughout your IT assets estate, whether it's on-prem, on a desktop, in a data center, on a SaaS application and an infrastructure platform as a service, pull it back and normalize it and compare that to what you've actually signed with all of your suppliers and when we do our job right, our customers run our algorithms across what you're entitled to use and what you're actually using, and what we find is that there's anywhere from 30 zero to 30% of overused in spend in ways. >> Keith, I just want to add example of where I saw this in real time with one of our solution engineers this about two weeks ago, where he was demonstrating the power of what we deliver across entitlements and usage and understanding where a potential wasted spend is and the customer was really focused on Oracle, and making sure that the Oracle negotiation coming up was going to be one where the customer felt like they were in a position of strengths and really understood what entitlements and usage were but when we showed them that Oracle was one piece of a bigger puzzle and that their cloud spend and AWS spend, and even their spend with some of their largest SaaS applications was actually much smaller than the whole, it really showed the customer the power of looking at these assets back to your question around assets and how do we think about them in a way that compares them to one another so the customer gets a full point of view. >> It's very difficult to get an Apple's and Apple's comparison with hybrid versus public and it's no longer just, I don't know if it was ever simple, but it's just more complex these days. Last question, as you look at the past few years, and I go to the Flexera website and look at your product portfolio, talk to me about the relationship between your customer in the industry and how that's changed and how customers consume Flexera as a product. >> I think over the years, our customers like the market has shifted to our SaaS and cloud offering we back in the day we used to have perpetual licenses and we were focusing on an on-prem scenario only, and our customers rightfully so have become far more demanding much like the market has and they now expect things to be delivered in real time with an agile mindset on a SaaS or cloud native basis and with that becomes a much, much higher expectation in terms of customer success and service that they get, because they're on a subscription basis, they can cancel at any time, just like we can do with our cable service provider. So we've really had to invest a lot, not just in R&D and making sure that our technology delivers outcomes, but in the way that we work with and service our customers. They're far more demanding than that they ever have and I wouldn't want it any other way and we think that our strategic imperatives is just keeping up with that in their high demands and expectations in the future. >> Well, I really appreciate you two taking out the time out of your busy schedules, both of you on the East coast, I'm in a Midwest, couple of hundred thousand people tuning into AWS re:Invent 2020 virtual learning to tackle a lot of these complex problems. The pandemic, the new reality of the market has forced us to address implementing and managing enterprise IT in a completely different way. This conference is a great example of that. We thank our friends at Flexera for sponsoring this interview. You want to learn more about theCUBE's coverage? Subscribe to the YouTube channel. Plenty of content with me and my fellow co-host this year coming out of AWS re:Invent 2020 talk to you next installment of theCUBE. (upbeat music)