>> Live from San Diego, California It's the queue covering Sisqo live US 2019 Tio by Cisco and its ecosystem. Barker's >> Welcome Back. We're here at the San Diego Convention Center for Sisqo Live 2019 30th year The show. 28,000 in attendance. I'm stupid, and we're actually at the midpoint of three days of life water wall coverage here and happy to bring back to the program to Cube alumni first. To my right is Ben I, who is the CEO of Turban on Mick. And sitting next to him is Thomas wide, who's the chief marketing and strategy officer of AP Dynamics or APD? Ia's everybody calls them here at the show. Gentlemen, thanks so much for joining us. Thank you. All right, So, Thomas, first of all, we had you on it, reinvent like soon after the acquisition of AP ti Bisys. Go. It's been about two years, and I believe it's been about two years that turban Onyx been partnering with Cisco. So let's start with you. And you know what? What changed in those two years? >> Yeah, it's been amazing. Two years ago, we were on the doorstep of an I P O and it's been a rocketship ride ever since. You know AP Dynamics. After the last two years, the businesses more than doubled team sizes more than doubled, and today we're really happy to be the largest and fastest growing provider of application for miss monitoring in the market. But the reason why, that is, is because our customers are embarking on the sigil transformation, and the application has really become the foundation of their modern day business. That's the way brands are engaging with their users. And but now more than ever, and then the application landscape has gotten way more complex, with micro services and multiple clouds and all of the threats that go on in the infrastructure. And so what Hap Dynamics has been doing is just really providing that really time business and application performance that our customers need to ensure business outcomes. We think of ourselves as Thie Marie for the application or the infrastructure. >> That's awesome. So then, you know it's been interesting to watch in the networking space the last few years. For the most part, applications used to be That's just this thing that ran through the pipes every once in a while, I need to, you know, think about performance. I need to make sure I got buffer credits or, you know, it's now going East West rather the north south and the like. But it was solutions like turban on IQ that sat on top of it and helped understand and help people manage their application. Of course. AP ti pulling that story together even tighter. So, you know, give us the latest we've talked to you. It's just go live before an important partnership. What was the latest in your world, >> boy? The well, so one of the things we're doing is we're building an actual bundle together without D. And if you think about a PM, you're getting the application topology as well as response time and use a response time, which is critical to maintaining the brand and the digital economy that we're talking about. What when you look at every one of those hops and the application of there's a entire application stack that sits underneath a resource ing stack and what we're doing is we're bringing in a R M, which is application re sourcing management with a I so that they're automatically adjusting the resource is in all times continuously in order to support the performance needs that Abdi is showing us when you put together a PM plus a r m. You have total application performance and that customers air really, uh, queuing to so much so that we've actually decided to put this bundle officially together in the marketplace. We just became the first ap TI re sell software product, and now we're taking not to market as C one plus happy. >> Well, congratulations on that is harder ship, Thomas. Bring us inside the customers a little bit. What does this mean for them? You know what that journey we talk about, you know, for, you know, last 10 15 years, you gotta break down those silos. It's not just the networking team, you know, tossing over some band within Leighton, see and write them coming back. And I need some more. No, no, we're not going. You know, we're not going to give you any service level agreement or anything like that, because that's not our job. To what? We'll just set this up and you use what you got. So what would happen in >> trend that we're seeing is a move toward this concept of a iob, which is the really the consolidation of bringing and user application network and infrastructure monitoring closer together and tying that together with a base insights to Dr Automation and Action and very similar to what turbo gnomic specializes in here. And so what we're seeing is, you know, the combination of Cisco plus APP Dynamics. Plus, companies like Turbo is beginning to build that self healing, self learning environment where developers and environments need to be able to drive automation on that. Automation ultimately gets tomb or innovation when you can reduce the mundane tasks, really take a lot of our developers time. And so we're really excited about some of the work we're doing together when you think about the ability to take really time business insights from the application and reprogrammed the network based on the needs of the AP or change out the workloads and move them around on different servers, depending on the needs of the AP, these are all things that combination of Turbo, Cisco and epidemics are doing together. >> Yeah, actually, I did a whole show down in D. C a couple months ago, Cisco Partner. We're focused on a I ops. And, you know, we understand customers had a lot of tools that they have to deal with. We need to simplify this environment, allow them tow, you know, focus on their business, not managing this complex environment of all these tools. How does that whole concept of II ops and, you know, automating this environment managing my workloads? You know what? What do you sing with your customers? >> I think all the customers are saying, Look, there's too many tools today. They don't need another resource monitor, et cetera. What they need is they need to understand, through the lens of the application, all the resource dependencies. So instead of looking at a field of servers and saying, I have five nines availability or storage or whatever, what they really want to see is whatever the servers and storage and resource is dependent on this specific up that runs the bank or the CPD company of the manufacturer. And can I make sure that those re sources are supporting performance of the application? And that's is this total application performance concept, much more so than than whether I have five nines availability and all my other host accents? >> Yeah, absolutely. Did you have a comment on other Guy's >> gonna say We're seeing so many different customers in different verticals, Whether it's retail, hospitality, automakers, they're all benefitting from the cloud migration. And now that they have the cloud migration, the ability to have that elasticity of their workloads, they're scaling in and out based on the application demands. This is becoming critical. This is no longer a luxury for the most cloud eight of companies in the world. Enterprises with mission critical systems are all becoming dependent on these more modern technologies. And I think they need partners like ours more than ever. >> Yeah, One of the questions we've had is you talk to customers today and they are multi cloud. But that multiyear hybrid cloud is a bunch of pieces and one of our premises. We ask, from a research standpoint, how can this some of those pieces be more valuable than just the independent pieces alone, you know, kind of one plus one with, you know, an extra factor talk a little bit about the customers. And also, you know, what does this combination do that I couldn't just, you know, grab these pieces together and kind of make it work in my portfolio of those, you know, dozens of tools that I have. >> What glad. But I think the customers one of things this needed. We literally announced his partnership publicly two weeks ago and already have closed the 1st 2 just out of momentum that that folks are realizing the need to be able to say, Look, I can host my applications on Prem with a number of different vendors, I can host my applications off Prem with a number of different vendors. But the real question is, where am I going to get the most performance? Where can I do it in a compliant way with all my policies and how can I make sure that I'm doing it cost effectively? And when there's a multiplicity of tradeoffs where I can choose, then it's incumbent upon each of those vendors, strategic as they are to be able to offer the best service, the best performance, the best compliance and resource ing, and that's what we're bringing to him. And I think that's why you're seeing that a pipeline is built to several double digit millions and already deals are closing everything I'd >> add to that Is that, you know, going back to the point around a ops in the evolution of a lot of these modern ing and automation technologies. >> A lot of our >> customers have a hybrid environment of different tools and providers that they leverage. And so one of the things that were really focused on is an open ecosystem where you'd be able to ingest data sources from various different players. Some of them can be Cisco, Turman, Onyx and Abdi. But some of them can be other providers that are also have very good products in very specific domains. I think the key is that being ableto be ableto bring that data together, Dr Cross domain correlation in a more automated way than ever before, leveraging some of the more modern AI ai capabilities, which drives the action ing that people really need. And that is really the automation step is where customers start to see the benefits. But I think the better and more valuable the data that you have, the better automation you could do because your predictability of your algorithms are much better at that >> point. All right, been your customers that have rolled out that this solution I know the joint solutions brand new. But what? What is then the key metrics? Howto they define success how today they know you know that they they've reached that success. >> So first and foremost, the line of business. Who's the customer to central it? Whether it's hosted or not, they care the most. That performance does not degrade and is always improving. Okay, But when they do that and they can show that, then a ll the decision that the rest of central takes down in fromthe container layer to the pods that a virtual to the cloud I asked on Prem in off those become acceptable choices for central i t. To make because fundamentally, Lina businesses saying, Yep, we're good, right? So that's where we're seeing the value of being able to see the response time and bridging the application performance to the application resource ing that frankly hasn't ever been solved in five decades of it. And I think it goes back to a Thomas was just saying It's the quality of the analytics that comes from a iob. I don't think people need more tools to capture more data. There's a lot of data out there. The question is, can you make it actionable? And are your analytics correct? And, frankly, are they the best? And I think we see that that's been a big parcel of what we've done during the two years Cisco's told us on multiple occasions it's the fastest software O AM they've had by bringing it through, starting with the data center team and growing up through traditional Cisco and then with their purchase of Abdi two years ago. That combination makes a ton of sense, and now you've got the top all the way to the bottom. And that's a pretty special spot, I think un replicated by any other strategic today. Yeah, the other thing, >> I just added, That is the importance of being able to monitor the business in real time as well. And so a lot of what we've talked about are the technology analytics, the operational analytics that we run our business on, but being able to correlate the business transactions running through the application, so users what their journey looks like, they're, you know, abandonment, rates, revenues, you know, the ability to engage with the users, tying that back to the specific infrastructure in a way that's used to be a bit of black box before. Now that all comes a life by the combination of these technologies. >> So Thomas big trends we see at this show. So a Cisco's transformation towards a software company and the world of multi cloud abdi plays a pretty important piece of that. You know, discussion. Talk a little bit about kind of where you are and you know where do you see Cisco moving along that journey and then, you know, help tie in where turban Ah, Mick Fitz. >> Yeah. So I think it really goes back to the fact that as our customers are making this digital transformation, they're really looking at a variety of infrastructures. You know, cloud providers to be able to offer these applications. And what Appdynamics has done is really created this monitoring fabric that sits across any infrastructure and it tightly ties to the business value of the application. So if you combine that with a lot of what Cisco's doing around connectivity securing the clouds, securing the infrastructure around it and tying that Teo where we're strong and networking and bringing all that together, I think fundamentally, we've got a lot of the pieces of the puzzle to truly enable a i ops, but we don't have them all. And I think that's what's important, that we partner with people like Ben because it brings together a set of automation capability around application resource ing that we don't have and our customers are better suited working with with Ben and team on that. So how do we integrate those things in a frictionless way and make that part of our sales process? That's really what this partnerships all about. >> All right, then where do we see the partnership going down the road? >> I think it's going to get more exciting. So right now we're pulling unit Election Lee from Abdi. I think we're going to go right back the other way. That Thomas referred to, which is one of my favorite parts of Abdi. Is the business like you? Yeah, it's where you say, What is the cost of the late and see in anyone? Hop and where do the Bandon rates? Abandonment rates happen from consumers on that application right now, we can price for the first time what's the cost of the late sea in that one tear and across the across the application overall. And then, more importantly, what do we do about it? Well, that's the resource ing and the digestion is being resolved in real time. And so I think, the ability look att, the resiliency of applications both across and up and down the a p m plus the a r m and being able to guarantee or assure performance, total application performance. That's a big message. >> All right, what would I give you both? Just fun. A word here, you know, about halfway through the conference here in San Diego. Thomas, >> I would just say that the energy that we're seeing, the feedback we're getting from customers in the business insights part of the world of solutions been phenomenal. I think there's so many more developer oriented, application developer oriented individuals that's just go live than ever before. And I think that serves both of our business is quite well. >> Look, I think this has been a great show, but one of the things you're going to see is all of these vendors who have had global presence for in this case, 30 years. Sisqo live 30 years long But now being able to think through how do I become that much more application relevant? You know, if you think about transformation of application is going to come top down, not bottom up. And so, while we have all the evolution and, frankly disruption happening, digital disruption happening across it, the way to know which of the ones that are going to stick, they're going to come top down. And I think the moves that they're making all the way through buying happy all the way through partnering with C warmer turban Ah, Mick has been emblematic of what that opportunity is in the marketplace on the realization that customers care about their applications, their applications run their business. And you've got to look at the topology and you gotta look and response time and you gotta look at the resource ing. But that's a really fun spot for us to be in together. >> Bennett Thomas Congratulations on the expanded partnership and thanks again for joining us on the Cube. Thanks to you. All right, we're here in the Definite zone. Three days, Walter Wall coverage. Arms to Minuteman, David Long days in the house. Lisa Martin's here to we'll be back with lots more coverage. Thanks for watching the Cube

>> Live from Barcelona, Spain it's theCUBE. Covering Cisco Live Europe. Brought to you by Cisco and its ecosystem partners. >> Welcome back to Cisco Live Barcelona, this is day two of theCUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise. I'm Dave Vellante, my co-host Stu Miniman. Ben Nye is here, the CEO of Boston-based Turbonomic . Great to see you again, Ben. Thanks for coming on. >> Thanks for having me, Dave, appreciate it. >> So, what a show for you guys. Everything is multi-cloud, I mean that's your sweet spot. You saw the keynotes yesterday, you've got to love the messaging here. It's really a tail wind for you guys. >> The fit and the strategic rationale, it makes you feel good about a partnership we established a year and a half ago when it was still nascent, right? They were just starting the change to becoming a software company, to becoming a multi-cloud vendor, not making a decision at the time not to have a cloud of their own. And boy, does it feel good now. But, boy it's been interesting to watch the changes in organization, people, all the different elements of this monster company, $200 billion public market value company going through this change in the public markets. >> Well, and you guys have really executed well. Obviously, you did some nice raises, you've got that velocity marketing thing down, and you're scrappy. And now you've got some resources behind you, and you've also got some partnerships that are starting to bear some fruit. So, let's get into the Cisco partnership specifically. What's that like, what's it all about? Give us some details there. >> So, Cisco sells our product under their name. It's called Cisco Workload Optimization Manager, the acronym is CWON. But, our thesis, and I think what they buy into enormously is that as we've decomposed the infrastructure and decomposed the applications, right? Think about it, we used to have monolithic applications all the way down now to VMs, and soon microservices, right? Containers and pods. You're going to need to think about how to resource those things at a scale that humans can't possibly manage. So the workload, the little humble workload becomes the centerpiece of everything. And Workload Optimization Manager is that. It's an AI Op's ability to assure the performance, manage the compliance policies, and make it cost effective all the time. And those are trade offs, so you can't do it once. As demand changes, you've got to be able to make those trade offs ongoing, and that's the uniqueness. So, the partnership was really embracing that concept. And what's fun is you can see how it's expanded with multi-cloud manager and the move to containers. Just that many more zeros when you think about the number of workloads, and the number of containers. >> Yep. Ben, I've loved watching this discussion of workloads and applications, 'cause I've worked with Cisco most of my career. But, you know, I spent a decade on the storage side looking at the network people. And it was just, oh well, the applications to the data is just bits that run over the pipe. And therefore, Cisco didn't really necessarily care that much. It was just, I want more traffic, yes. But maybe they do some things to optimize a little bit, but Workload Optimized Management seems a very new thing for Cisco to be able to embrace and understand and fits into that whole software strategy. Maybe give us a little bit about how you've seen the maturation and change, about how Cisco has data in the center of their keynote yesterday. >> Right. >> Where it was, wait, this is the networking company Cisco. And ports and gear and massive million dollar purchases that you roll out and get certified on as opposed to kind of the new software world. >> So, I think if you look at it, data without logic is data. Right? It's when you put the two together, and that's what a workload is, that you build all the way up. If you really say "Where did they get it?" They were always great at moving the data to service the logic in the application. Buying App D I think was a critical and decisive move to really put them at the top of the stack. Anchor the application, and you can then make sure everything else is brought along with it. So, App D gave them both the ability to look at the depology of the application, the response time of the application. It also gave them this thing called Business IQ, which is, the application runs your business, right? How do I take the data in the organization throughout, make sure I'm servicing it right, but also making sure that the application is running at all times well. And applications really, are just an aggregation of workloads. And so it goes back into the application, the workload, and then the infrastructure which shares it all. >> Ben, you talked about kind of what it is, the Workload Optimization Manager. What's the secret sauce behind it? Can you talk a little bit about the engineering and how it works. >> How C1 works? >> Yes. >> Yeah, I call it The three As. There's the Approach, then there's the Abstraction, and then there's the Analytics. The first one is the approach. Everything we're doing is about putting demand in charge of supply. So, we literally own the patent on using the principles of economics to manage IT. In other words, what's the best resource allocator we know? Markets. Let the workloads pick the resources on which they need to run, and do it in that way as opposed to us trying to us trying to service some ephemeral demand when we're actually managing supply. The way it works is you have to have an abstraction. And that means that I can't have every single vendor's product be different. So, to a workload, all the flavors of storage, it just looks like IOPs and DIS, so they can trade them. An abstraction we all use in everyday life? Currency, right? That's how markets work, we have to have a common currency. And then the last one is the Analytics. If you let the workload pick the resources it needs, it knows it because it knows how much demand. Demand goes up, more resources. Demand goes down, you leave resources. But then, we know the right order of the resourcing that it needs. All the way down the stack, from the application to the virtual to the physical. And that allows us to give exact right actions, not recommendations. Recommendations we think, are like opinions. You can't automate them. And alerts. But if you think about being able to be so accurate, and so exact in the analytics you produce, that you can actually automate them. That's the ah-ha. >> Well, it's brilliant. I mean, you've got the marketplace demand, and that decides. But, you've also got to do this is near real time, right? To have this impact. >> Continuously, correct. >> So, that's your analytics, that's some machine intelligence going on under the cover? >> So, people talk about AI ops, this is AI ops. We have a data model, the data model covers the customer's on prem environment as well as their off prem if it's Amazon or Azure. And now, I can see all the workloads I run, and all of the performance issues, all of the compliance exposure, and all of the efficiency opportunities inherent in each one workload. We show it to the customer, and then they can run What if Scenarios in offline, not with a synthetic, but with their actual workloads. Say, how would you like to see that workload in one of these other environments, in any direction? Now we're getting into multi-cloud management, right? >> Yeah, and abstract all that API complexity and all that diversity. And just one more follow up if I may, Stu. I want to understand the business impact. >> Sure. >> We covered kind of what it is and how it works. Why do customers buy? What's the business impact? >> So, the most important thing is you've got to have application performance. If your apps aren't running, your business isn't running. Fair? The second one though is, boy, compliance regulations just keep coming, right? And there's lots of different forms of compliance in policies. It could be a static one like HA, or data afinity, or an anti-afinity, things like that. But then there's also a myriad of raising level orders. People are trying to enforce all of these policies manually, which means they don't really know at any given time, whether they're in conformity with their own policies. Then you could ask, well, then why have them? So, that's a second big driver. The third one, is just cost. If we actually run the environments well, and we know that demand picks it, then actually you don't need to over provision the virtual, or the physical, or both environments, which is what most people have been doing for years. >> Then the area I want to drill into is that multi-cloud management that you mentioned there. Managing environments has always been a challenging situation for IT. You know, you think back ten years ago, you know V Center is the center of the world for anybody in virtualization. System center for Microsoft Shops, in the multi-cloud world, it's still a bit of a jump ball. You know, Cisco of course with their cloud center sweep, want to have a strong position to live in that multi-cloud world. Tell us, what are you seeing in the marketplace today? Where does, you know, your OEM solution with Cisco fit into this overall orchestration, and what are you hearing from customers? >> So, there's a couple of things. If you look in the customer side, when you go multi-cloud, you have to have different skill sets. They're different platforms, different vendors, right? And, by the way, so extreme in some cases, where one is principally a fixed cost environment, verus two that are variable expense based environments. Right? So, I have to think about which is the type of workload I want to run based on the demand parameters for each of those to make the most economic sense and the best performance attainable. If I have something that's going to scale massively, I want to leverage the elasticity of the public cloud, more likely than not. But, to do that, I better be ready to manage it in that fashion, right? And so somebody has to understand the nature of demand, and when to scale that up and when to scale it down. We've had customers literally take monthly change control windows, down to nightly in order to manage that because the savings are so material, right? So, it's really a matter of they need some level of automation, Stu, to be able to know which workloads should run in a given environment, in a given way consistent with what the platform vendor is offering. And that's what we do. >> I love stories like this, right? They harken back to Frank Sluteman, who's kind of a mini business hero of mine. He was the founder of David Domain, well CEO, and obviously helped service Now Gro. And he would say to me, "I love ROI stories." Like, going in, and just being able to show people bottom line impact. You clearly have that here. Application performance is very clear, how you affect that. When you talk to customers about the economic potential, what are you seeing? If you sort of scanned your customer base. You know, what kind of savings are you seeing? It sounds to me, I'm inferring 20% is kind of a no brainer, but I could imagine 30% plus savings. What are you seeing if you took an anecdotal scan of your customer base? >> So, very typically we can find, because the VM is over provisioned, the virtual layer, and the physical is over provisioned to manage the environment, try and assure performance. Typically we will find 40, 50% of a customer's data center available to be made more efficient, okay? When you then go, though, and this is really interesting. If you go to, let's say ECS and Amazon. There's 1.7 million combinations that you can pick from in ECS. So, Amazon refers to us as a customer control plane, because we understand the fundamental demand on the workloads, we'll pick the right instance family; so you don't have to go and try to pick and guess and allocate based on compute instance types, memory, network, storage, then whether or not to put an RI, Reserved Instance, against it, what region to run it in, all of those things, we could take care of, and help find and land that thing in the right order. When you don't have that, people will naturally allocate. They're going to do what's called a lift and shift, take an over provisioned VM on Prem, and bring it into the cloud. And that's the source of these incredible cloud bills. People go, wait a minute, this is too expensive, cloud was supposed to be cheaper. Well, that's because they didn't optimize it before they moved it. So, our strong preference is let's look at your workloads on Prem, let's find you the right home and the right instance family off Prem, to assure performance and then we'll manage it ongoing with that continuous actions that we do. >> And that changes the operating model. And, of course, when you talk to Amazon about this, they actually love that because they understand that there is price elasticity. If they're saving customer's money, that means the customer is going to buy more compute, they're going to buy more storage. >> Yep. >> Have you seen that in your customer base? >> Absolutely. So, Amazon is on record as having cut price in EC2 62 times. They have a retailer's mindset, and Microsoft has to match them and does. Okay? So they're both interested in taking costs down to serve the customer. When they don't, there's a problem. The problem is, the customer gets a cloud bill that was far in excess of what they expected to see. Gardener has some great data on this, about just how big those numbers can be. But what happens is two things. One, they go into a pause. And that pause can reduce the rate of migration for a year or better while they're trying to digest and get the skills and learn how to manage their workloads in that environment. The second thing is there's a loss, a slight erosion of trust. And then they want a dual source, and then they want to bring in other vendors and so forth. And the reason is they're just trying to figure out how to make this migration, which they know they have to, every CIO has a cloud MBO, but they have to have a way to know that they're not going to bleed themselves out in the process. Those are the two things that I see most frequently from customers. >> Yeah. Ben, as an observer, I want to get what you've seen from customers. How do they look at Cisco as a software provider in general, and as a partner in this multi-cloud world, specifically today? >> Well, I think Cisco has done a number of things. Again, I would go back to they really set a new direction with the direction that Chuck Robbins has provided as CEO, with the purchase of App D, with the services. If you go to the Innovation Hall, and you'll see the Solutions Hall. You'll see the Cloud services that they're offering, and then I think finding folks like Turbonomic. Literally, branding it under their name and selling it at CWAM. Those are pretty big de-marketers of their commitment to cloud, to multi-cloud, and to software. >> So, we were talking in our open about this whole multi-cloud, you know, marketplace. The horse is on the track. You know Cisco, clearly coming at it from a networking standpoint. Obviously, you've got VM Ware doing its thing, coming at it from what used to be purely Hypervisor, now expanding. You've got IBM and Red Hat, certainly Microsoft in the mix. It's a really interesting dynamic. You guys are a best of breed player, that's your strategy to keep ahead of the competition or the supposed competition, and partner with some of the big guys. What gives you confidence, Ben, that you guys can keep that technical lead and that market lead relative to both the competition and some of your partners? >> Because smaller companies have to focus, right? So we focus. We focus on workloads, and we're going to let those workloads run. We do not have a bias in our pricing model, in our infrastructure allegiances or anything. We have a bias on making sure the workload is always performant, compliant, and cost effective wherever it runs. So, our thesis is customers will always want to have multi-clouds. Not one provider, but multiple. And therefore, want the best workloads that will stay and grow with them. And so, that's why we have such good alliance with both Microsoft and Amazon. Because again, they're the net receivers of a lot of these workloads. One of the reasons we have such a good alliance with Cisco is because they're not going to be a cloud-vider. They're going to be a technology provider to those that want to provide services and technology to the Cloud providers. So, I think there's a nice match there in terms of our focus and our ability to continue to evolve. And let's just remember how dynamic this is. I mean, we were just talking about VMs in the last 10 years. Now, in the next five, you're going to see a complete shift over to containers, pods, and microservices. Different kinds of schedulers, different kind of IP stack; and that's the bed I think you mentioned that Red Hat and IBM are making as well. >> Well, your timing has been phenomenal. I mean obviously, coming out of the downturn, Cloud had a huge uptick. And now it's very clear, like you said, every CIO has an MBO on getting the Cloud. And you guys are well on your way to hitting escape velocity. Congratulations on that. >> Thank you. >> And thanks so much for coming on theCUBE. >> Thank you, Dave; thank you, Stu, pleasure. >> Okay, you're welcome. Alright, keep it right there everybody. We'll be back with our next guest. Dave Vellante and Stu Miniman, we're live from Cisco Live Barcelona, you're watching theCUBE. Thanks. (electronic music)

>> Live from Las Vegas. It's theCUBE covering AWSre:Invent 2018. Brought to you by, the Amazon Web Services, Intel and their ecosystem partners. >> Well, welcome back here to the stands. As we continue our coverage here on theCUBE of AWSre:Invent as the day starts to wind down here. Still a lot of energy out there on that show floor. As we are packed with all kinds of great exhibits here. A lot of interesting folks here still making themselves at home. Tom Murphy's with us now, along with Justin Moore and John Walls. He's the Chief Marketing Officer, Turbonomic and Tom glad to have you here on theCUBE. Thank you for joining us. >> Yeah, great to be here. >> So just tell us a little bit about Turbonomic, first off. And then we'll drill down a little bit there. So why you're here at AWS but what do you do for the folks at home? >> Yeah, ultimately what we're doing is we have workload automation for hybrid cloud. And workload automation for us is ultimately where we go out, we discover the workloads, we optimize performance, cost and compliance simultaneously in real time. So what that gives for the customer is we call them smart workloads. Self managing anywhere in real time. The outcome of that for the customers is, they get guaranteed performance, a short performance, a short compliance. And they eliminate a lot of the complexity that they're experiencing today. >> So you're trying to grease the skids, more or less, right? >> Grease the skids, make sure that they're life's easier and they can actually accomplish the outcomes they want. >> Complexity's been a theme that we've been covering in the last couple of days. It's come up quite a bit. The customers are struggling with the amount of choices. We had Andy Jassy on stage today, again, announcing another zillion products today that the US has created. And that gives you a lot of flexibility. It means that you can optimize for particular choices that suit you very, very well. But being able to choose between them can be a pretty daunting task. Now how does Turbonomic help customer decide which of these choices is right for them? >> What we see from our customers is that they're actually looking at typically three platforms. They're still running on prem with VMware. They're looking at AWS, of course. That's why we're out here. And they're looking at Azure as well. So when it comes to choices, they want that flexibility to decide where the workloads can run. By looking at the workloads versus the infrastructure, we abstract the work that's running. And we can model for them, for example, a VM workload that's running on pram, we can pick it up and say what would that look like if it runs on AWS? What will that look like when it runs on Azure? So for us, by abstracting the work from the underlying infrastructure, that gives the customers the flexibility, the simplicity to understand and de risk any migration projects that they have. >> When you identify the way something could go based on what the workload is, do you just tell customers what that is or are you able to automate that decision making process for them? >> When a customer decides to actually deploy workloads they don't know necessarily how big the resources should be. They don't know where should they be placed. But our analytics engine, what it does is it goes out and says we understand the complete infrastructure, we're agent less, we plug into vCenter, we plug into Azure, we plug into AWS, we pull the configurations back and when we decide where to place it, we know best where to place it. We decide how big it is, we know best how big it should be at that time. Should the demand change, what we can do is actually dynamically adjust, in real time, automatically, the size of the workload, where it lives. We can scale out on prem, we can multiply the number of instances or we can actually scale up which means add more resources to the actual workloads. >> And what about that decision then because you talk about on prem and a lot of people have heard a lot. Making the move over, going public. There's a little bit of pain there for some people, right? >> For sure. >> There's some barriers there, what are you saying and what are you trying I guess to lead people through that consideration so they get it. Alright, so it's going to hurt a little bit, maybe. >> Yeah, for sure. >> But, ya know, we're going to be a lot better off by the end of the day. >> Ultimately what we see is, especially on a lift and shift where customers take existing workloads and they move them to the Cloud. A lot of times when you think about how utilized they are on prem, they tend around 50% utilization. So if you actually take that box of, lets say the resources that you've defined on prem and just pick it up and drop it into the Cloud, you're 50% over prevision. Part of the pain point is knowing exactly the resources they need, but understanding not just what you allocated but what you consume, which is a smaller view. Looking at the consumption and using consumption in the Cloud versus the allocation. That's a quick, efficient use case for making sure that they use exactly what they need when they get there. But then not compromising performance when they get there. They have the right performance at the right cost. >> This isn't a static decision either because as we've seen, there's new announcements everyday so we get new instant types that have been announced at the show, but also workloads and the demands for what customers need to do with those workloads. It's constantly changing, so you need to be able to react to that and to change what the right option is from moment to moment. >> And then when you add on top of that, like reserved instances, right. So the complexity of what instance type to use, let's say there's millions of choices when you look at the combinations. Ultimately, there's new one's introduced regularly, so how do I take advantage of that? There's discounting that's applied, there's discounts that come out, bundles that come out. And also the RI's. So RI's, thing of the two metrics for RI's, one would be utilization of the RI's, so I want to make sure if I actually buy RI's and invest in RI's, I want to make sure I use them. And the second is, out of all the instances that I have, what percentage of my environment actually is RI's? So think of that as coverage. So the two metrics that we look at closely with RI's as an example is coverage, which means I'm taking advantage of RI's, I'm not just doing one percent, I'm doing more than that. And the second is utilization which means of the one's I've purchased, I'm making sure that I'm using those, they're not going to waste. >> So customers who are doing this well, like clearly you've got plenty of customers who've done this successfully. So what is doing this well look like? >> Sure, well they start with an assessment, which they look at their on prem in many cases. They right size that, they run models, they run plans as to when they're looking at workloads that are picking up and moving to the Cloud, what do I need when I get there? Once they're in the Cloud, that's just the beginning of the journey, really. And what it is, is they continually optimize. And the continual optimization means that we're constantly meeting, I started talking about supply and demand earlier. But constantly making sure that the demand of the workloads is matched with the underlying supply at all times for the benefit of performance, for cost and also making sure we're compliant with business policies at all times as well. >> So if you have a customer that maybe comes to the show, and the catch the bug, right, they got the fever. We're going to go back, hey Tom. They're on the phone tomorrow, we got to go now. Do you ever have to tell people, just slow your roll, we're going to do this in a methodical way, we're going to do this in a responsible way. We're not going to go nuts. I know you want to go -- >> Go now! >> But people get excited, right? >> For sure. >> So, I mean, how do you handle that? >> Well, I think what I hear from customers today is you guys talked about complexity, right? So, if you think about complexity, and then on top of that you think about a little bit of a skills gap that's happening because there's really not the maturity of the expertise to manage a lot of the transitions that are taking place. And then lastly, once they're in the Cloud, again, I said it's not done, right? So to address really that how do they get through that, what do they use? We don't necessarily say slow down because we can actually get people to the Cloud very very quickly, in a responsible way. The thing that we like to say is we take the guess work out so what we're doing is we're taking the analytics, we're giving them intelligence that they can actually make very rapid decisions. Our solution can probably make decisions about what to do faster that people already to make the progress so, ultimately, we want to go at the pace they want to go. We've had customers call us on a weekend to ploy the software, actually go live like in a couple days. So, it's up to the customer. We feel confident in our decision making. You can't automate decisions and actions if you don't feel confident about it and we've got the customer points that give us to prove. >> So based on what you've seen so far at the show and your experience with customer who have been moving to Cloud, figuring out where they're going to put these workloads, what's next? What do you think people are going to be doing next? >> It's a great question, 'cause as a company, I'm really proud that we started as VMturbo many people still know us as Vmturbo. And what happened was Virtual Machines was were we started. We plugged into vCenter, we pulled information back and all of the sudden we're making decisions and actions about what to do on a virtualized environment on prem. Well, we started doing the Cloud, all of the sudden its like well it's more than just VM, it's Cloud too. We literally had to change the name of the company to accommodate the capabilities. So by having this economic supply and demand model, it'll alow us to really just apply it to not just VM on prem, not just Cloud. So to answer your question, containers or micro services is steam rolling into, we hear that in all of our customers now. When I came here three years ago it was worth thinking about Cloud. Last year, actually, we're testing, right? This year it's we're live. Next year it's going to be containers, containers, that's what I think cause containers are just going to be just coming in, Cloud Native applications, we're past a litte bit of lift and shift. We're moving into Cloud Native so that's what I think is going to happen next year. >> I think you can stick with Turbonomic. I think you're okay for a while. >> (laughing) Sure. >> Hey thanks for being with us Tom. >> Absolutely guys, I appreciate the opportunity, thank you. >> You bet, have a great show the rest of the time here in Las Vegas. >> Thanks very much. >> Excellent, Tom Murphy joining us from Turbonomic and that will be it for this day here on theCUBE AWS:reInvent. Back with you tomorrow Thursday for Justin Moore and I'm John Walls, thank you for watching. (electric sounding music)

>> From theCUBE Studios in Palo Alto and Boston, bringing you data driven insights from theCUBE and ETR. This is breaking analysis with Dave Vellante. >> The technology spending outlook is not pretty and very much unpredictable right now. The negative sentiment is of course being driven by the macroeconomic factors in earnings forecasts that have been coming down all year in an environment of rising interest rates. And what's worse, is many people think earnings estimates are still too high. But it's understandable why there's so much uncertainty. I mean, technology is still booming, digital transformations are happening in earnest, leading companies have momentum and they got cash runways. And moreover, the CEOs of these leading companies are still really optimistic. But strong guidance in an environment of uncertainty is somewhat risky. Hello and welcome to this week's Wikibon CUBE Insights Powered by ETR. In this breaking analysis, we share takeaways from ETR'S latest spending survey, which was released to their private clients on October 21st. Today, we're going to review the macro spending data. We're going to share where CIOs think their cloud spend is headed. We're going to look at the actions that organizations are taking to manage uncertainty and then review some of the technology companies that have the most positive and negative outlooks in the ETR data set. Let's first look at the sample makeup from the latest ETR survey. ETR captured more than 1300 respondents in this latest survey. Its highest figure for the year and the quality and seniority of respondents just keeps going up each time we dig into the data. We've got large contributions as you can see here from sea level executives in a broad industry focus. Now the survey is still North America centric with 20% of the respondents coming from overseas and there is a bias toward larger organizations. And nonetheless, we're still talking well over 400 respondents coming from SMBs. Now ETR for those of you who don't know, conducts a quarterly spending intention survey and they also do periodic drilldowns. So just by the way of review, let's take a look at the expectations in the latest drilldown survey for IT spending. Before we look at the broader technology spending intentions survey data, followers of this program know that we reported on this a couple of weeks ago, spending expectations that peaked last December at 8.3% are now down to 5.5% with a slight uptick expected for next year as shown here. Now one CIO in the ETR community said these figures could be understated because of inflation. Now that's an interesting comment. Real GDP in the US is forecast to be around 1.5% in 2022. So these figures are significantly ahead of that. Nominal GDP is forecast to be significantly higher than what is shown in that slide. It was over 9% in June for example. And one would interpret that survey respondents are talking about real dollars which reflects inflationary factors in IT spend. So you might say, well if nominal GDP is in the high single digits this means that IT spending is below GDP which is usually not the case. But the flip side of that is technology tends to be deflationary because prices come down over time on a per unit basis, so this would be a normal and even positive trend. But it's mixed right now with prices on hard to find hardware, they're holding more firms. Software, you know, software tends to be driven by lock in and competition and switching costs. So you have those countervailing factors. Services can be inflationary, especially now as wages rise but certain sectors like laptops and semis and NAND are seeing less demand and maybe even some oversupply. So the way to look at this data is on a relative basis. In other words, IT buyers are reporting 280 basis point drop in spending sentiment from the end of last year. Now, something that we haven't shared from the latest drilldown survey which we will now is how IT bar buyers are thinking about cloud adoption. This chart shows responses from 419 IT execs from that drilldown and depicts the percentage of workloads their organizations have in the cloud today and what the expectation is through years from now. And you can see it's 27% today and it's nearly 50% in three years. Now the nuance is if you look at the question, that ETRS, it's they asked about IaaS and PaaS, which to some could include on-prem. Now, let me come back to that. In particular, financial services, IT, telco and retail and services industry cited expectations for the future for three years out that we're well above the average of the mean adoption levels. Regardless of how you interpret this data there's most certainly plenty of public cloud in the numbers. And whether you believe cloud is an operating environment or a place out there in the cloud, there's plenty of room for workloads to move into a cloud model well beyond mid this decade. So you know, as ho hum as we've been toward recent as-a-service models announced from the likes of HPE with GreenLake and Dell with APEX, the timing of those offerings may be pretty good actually. Now let's expand on some of the data that we showed a couple weeks ago. This chart shows responses from 282 execs on actions their organizations are taking over the next three months. And the Deltas are quite traumatic from the early part of this charter than the left hand side. The brown line is hiring freezes, the black line is freezing IT projects, and the green line is hiring increases and that red line is layoffs. And we put a box around the sort of general area of the isolation economy timeframe. And you can see the wild swings on this chart. By mid last summer, people were kickstarting things and more hiring was going on and the black line shows IT project freezes, you know, came way down. And now, or on the way back up as our hiring freezes. So we're seeing these wild swings in organizational actions and strategies which underscores the lack of predictability. As with supply chains around the world, this is likely due to the fact that organizations, pre pandemic they were optimized for efficiency, not a lot of waste rather than business resilience. Meaning, you know, there's again not a lot of fluff in the system or if there was it got flushed out during the pandemic. And so the need for productivity and automation is becoming increasingly important, especially as actions that solely rely on headcount changes are very, very difficult to manage. Now, let's dig into some of the vendor commentary and take a look at some of the names that have momentum and some of the others possibly facing headwinds. Here's a list of companies that stand out in the ETR survey. Snowflake, once again leads the pack with a positive spending outlook. HashiCorp, CrowdStrike, Databricks, Freshworks and ServiceNow, they round out the top six. Microsoft, they seem to always be in the mix, as do a number of other security and related companies including CyberArk, Zscaler, CloudFlare, Elastic, Datadog, Fortinet, Tenable and to a certain extent Akamai, you can kind of put them sort of in that group. You know, CDN, they got to worry about security. Everybody worries about security, but especially the CDNs. Now the other software names that are highlighted here include Workday and Salesforce. On the negative side, you can see Dynatrace saw some negatives in the latest survey especially around its analytics business. Security is generally holding up better than other sectors but it's still seeing greater levels of pressure than it had previously. So lower spend. And defections relative to its observability peers, that's really for Dynatrace. Now the other one that was somewhat surprising is IBM. You see the IBM was sort of in that negative realm here but IBM reported an outstanding quarter this past week with double digit revenue growth, strong momentum in software, consulting, mainframes and other infrastructure like storage. It's benefiting from the Kyndryl restructuring and it's on track IBM to deliver 10 billion in free cash flow this year. Red Hat is performing exceedingly well and growing in the very high teens. And so look, IBM is in the midst of a major transformation and it seems like a company that is really focused now with hybrid cloud being powered by Red Hat and consulting and a decade plus of AI investments finally paying off. Now the other big thing we'll add is, IBM was once an outstanding acquire of companies and it seems to be really getting its act together on the M&A front. Yes, Red Hat was a big pill to swallow but IBM has done a number of smaller acquisitions, I think seven this year. Like for example, Turbonomic, which is starting to pay off. Arvind Krishna has the company focused once again. And he and Jim J. Kavanaugh, IBM CFO, seem to be very confident on the guidance that they're giving in their business. So that's a real positive in our view for the industry. Okay, the last thing we'd like to do is take 12 of the companies from the previous chart and plot them in context. Now these companies don't necessarily compete with each other, some do. But they are standouts in the ETR survey and in the market. What we're showing here is a view that we like to often show, it's net score or spending velocity on the vertical axis. And it's a measure, that's a measure of the net percentage of customers that are spending more on a particular platform. So ETR asks, are you spending more or less? They subtract less from the mores. I mean I'm simplifying, but that's what net score is. Now in the horizontal axis, that is a measure of overlap which is which measures presence or pervasiveness in the dataset. So bigger the better. We've inserted a table that informs how the dots in the companies are positioned. These companies are all in the green in terms of net score. And that right most column in the table insert is indicative of their presence in the dataset, the end. So higher, again, is better for both columns. Two other notes, the red dotted line there you see at 40%. Anything over that indicates an highly elevated spending momentum for a given platform. And we purposefully took Microsoft out of the mix in this chart because it skews the data due to its large size. Everybody else would cluster on the left and Microsoft would be all alone in the right. So we take them out. Now as we noted earlier, Snowflake once again leads with a net score of 64%, well above the 40% line. Having said that, while adoption rates for Snowflake remains strong the company's spending velocity in the survey has come down to Earth. And many more customers are shifting from where they were last year and the year before in growth mode i.e. spending more year to year with Snowflake to now shifting more toward flat spending. So a plus or minus 5%. So that puts pressure on Snowflake's net score, just based on the math as to how ETR calculates, its proprietary net score methodology. So Snowflake is by no means insulated completely to the macro factors. And this was seen especially in the data in the Fortune 500 cut of the survey for Snowflake. We didn't show that here, just giving you anecdotal commentary from the survey which is backed up by data. So, it showed steeper declines in the Fortune 500 momentum. But overall, Snowflake, very impressive. Now what's more, note the position of Streamlit relative to Databricks. Streamlit is an open source python framework for developing data driven, data science oriented apps. And it's ironic that it's net score and shared in is almost identical to those of data bricks, as the aspirations of Snowflake and Databricks are beginning to collide. Now, however, the Databricks net score has held up very well over the past year and is in the 92nd percentile of its machine learning and AI peers. And while it's seeing some softness, like Snowflake in the Fortune 500, Databricks has steadily moved to the right on the X axis over the last several surveys even though it was unable to get to the public markets and do an IPO during the lockdown tech bubble. Let's come back to the chart. ServiceNow is impressive because it's well above the 40% mark and it has 437 shared in on this cut, the largest of any company that we chose to plot here. The only real negative on ServiceNow is, more large customers are keeping spending levels flat. That's putting a little bit pressure on its net score, but that's just conservatives. It's kind of like Snowflakes, you know, same thing but in a larger scale. But it's defections, the ServiceNow as in Snowflake as well. It's defections remain very, very low, really low churn below 2% for ServiceNow, in fact, within the dataset. Now it's interesting to also see Freshworks hit the list. You can see them as one of the few ITSM vendors that has momentum and can potentially take on ServiceNow. Workday, on this chart, it's the other big app player that's above the 40% line and we're only showing Workday HCM, FYI, in this graphic. It's Workday Financials, that offering, is below the 40% line just for reference. Now let's talk about CrowdStrike. We attended Falcon last month, CrowdStrike's user conference and we're very impressed with the product visio, the company's execution, it's growing partnerships. And you can see in this graphic, the ETR survey data confirms the company's stellar performance with a net score at 50%, well above the 40% mark. And importantly, more than 300 mentions. That's second only to ServiceNow, amongst the 12 companies that we've chosen to highlight here. Only Microsoft, which is not shown here, has a higher net score in the security space than CrowdStrike. And when it comes to presence, CrowdStrike now has caught up to Splunk in terms of pervasion in the survey. Now CyberArk and Zscaler are the other two security firms that are right at that 40% red dotted line. CyberArk for names with over a hundred citations in the security sector, is only behind Microsoft and CrowdStrike. Zscaler for its part in the survey is seeing strong momentum in the Fortune 500, unlike what we said for Snowflake. And its pervasion on the X-axis has been steadily increasing. Again, not that Snowflake and CrowdStrike compete with each other but they're too prominent names and it's just interesting to compare peers and business models. Cloudflare, Elastic and Datadog are slightly below the 40% mark but they made the sort of top 12 that we showed to highlight here and they continue to have positive sentiment in the survey. So, what are the big takeaways from this latest survey, this really quick snapshot that we've taken. As you know, over the next several weeks we're going to dig into it more and more. As we've previously reported, the tide is going out and it's taking virtually all the tech ships with it. But in many ways the current market is a story of heightened expectations coming down to Earth, miscalculations about the economic patterns and the swings and imperfect visibility. Leading Barclays analyst, Ramo Limchao ask the question to guide or not to guide in a recent research note he wrote. His point being, should companies guide or should they be more cautious? Many companies, if not most companies, are actually giving guidance. Indeed, when companies like Oracle and IBM are emphatic about their near term outlook and their visibility, it gives one confidence. On the other hand, reasonable people are asking, will the red hot valuations that we saw over the last two years from the likes of Snowflake, CrowdStrike, MongoDB, Okta, Zscaler, and others. Will they return? Or are we in for a long, drawn out, sideways exercise before we see sustained momentum? And to that uncertainty, we add elections and public policy. It's very hard to predict right now. I'm sorry to be like a two-handed lawyer, you know. On the one hand, on the other hand. But that's just the way it is. Let's just say for our part, we think that once it's clear that interest rates are on their way back down and we'll stabilize it under 4% and we have clarity on the direction of inflation, wages, unemployment and geopolitics, the wild swings and sentiment will subside. But when that happens is anyone's guess. If I had to peg, I'd say 18 months, which puts us at least into the spring of 2024. What's your prediction? You know, it's almost that time of year. Let's hear it. Please keep in touch and let us know what you think. Okay, that's it for now. Many thanks to Alex Myerson. He is on production and he manages the podcast for us. Ken Schiffman as well is our newest addition to the Boston Studio. Kristin Martin and Cheryl Knight, they help get the word out on social media and in our newsletters. And Rob Hoff is our EIC, editor-in-chief over at SiliconANGLE. He does some wonderful editing for us. Thank you all. Remember all these episodes, they are available as podcasts. Wherever you listen, just search breaking analysis podcast. I publish each week on wikibon.com and siliconangle.com. Or you can email me at david.vellante@siliconangle.com or DM me @dvellante. Or feel free to comment on our LinkedIn posts. And please do check out etr.ai. They've got the best survey data in the enterprise tech business. If you haven't checked that out, you should. It'll give you an advantage. This is Dave Vellante for theCUBE Insights Powered by ETR. Thanks for watching. Be well and we'll see you next time on Breaking Analysis. (soft upbeat music)

(upbeat music) >> Welcome back everyone to theCUBEs live coverage in San Francisco for VMware Explorer. I'm John Furrier with my host, Dave Vellante. Two sets, three days of wall to wall coverage. This is day two. We got a great guest, Scott Baker, CMO at IBM, VP of Infrastructure at IBM. Great to see you. Thanks for coming on. >> Hey, good to see you guys as well. It's always a pleasure. >> ()Good time last night at your event? >> Great time last night. >> It was really well-attended. IBM always has the best food so that was good and great props, magicians, and it was really a lot of fun, comedians. Good job. >> Yeah, I'm really glad you came on. One of the things we were chatting, before we came on camera was, how much changed. We've been covering IBM storage days, back on the Edge days, and they had the event. Storage is the center of all the conversations, cyber security- >> ()Right? >> ... But it's not just pure cyber. It's still important there. And just data and the role of multi-cloud and hybrid cloud and data and security are the two hottest areas, that I won't say unresolved, but are resolving themselves. And people are talking. It's the most highly discussed topics. >> Right. >> ()Those two areas. And it's just all on storage. >> Yeah, it sure does. And in fact, what I would even go so far as to say is, people are beginning to realize the importance that storage plays, as the data custodian for the organization. Right? Certainly you have humans that are involved in setting strategies, but ultimately whatever those policies are that get applied, have to be applied to a device that must act as a responsible custodian for the data it holds. >> So what's your role at IBM and the infrastructure team? Storage is one only one of the areas. >> ()Right. >> You're here at VMware Explore. What's going on here with IBM? Take us through what you're doing there at IBM, and then here at VMware. What's the conversations? >> Sure thing. I have the distinct pleasure to run both product marketing and strategy for our storage line. That's my primary focus, but I also have responsibility for the mainframe software, so the Z System line, as well as our Power server line, and our technical support organization, or at least the services side of our technical support organization. >> And one of the things that's going on here, lot of noise going on- >> Is that a bird flying around? >> Yeah >> We got fire trucks. What's changed? 'Cause right now with VMware, you're seeing what they're doing. They got the Platform, Under the Hood, Developer focus. It's still an OPS game. What's the relationship with VMware? What are you guys talking about here? What are some of the conversations you're having here in San Francisco? >> Right. Well, IBM has been a partner with VMware for at least the last 20 years. And VMware does, I think, a really good job about trying to create a working space for everyone to be an equal partner with them. It can be challenging too, if you want to sort of throw out your unique value to a customer. So one of the things that we've really been working on is, how do we partner much stronger? When we look at the customers that we support today, what they're looking for isn't just a solid product. They're looking for a solid ecosystem partnership. So we really lean in on that 20 years of partnership experience that we have with IBM. So one of the things that we announced was actually being one of the first VMware partners to bring both a technical innovation delivery mechanism, as well as technical services, alongside VMware technologies. I would say that was one of the first things that we really leaned in on, as we looked out at what customers are expecting from us. >> So I want to zoom out a little bit and talk about the industry. I've been following IBM since the early 1980s. It's trained in the mainframe market, and so we've seen, a lot of things you see come back to the mainframe, but we won't go there. But prior to Arvind coming on, it seemed like, okay, storage, infrastructure, yeah it's good business, and we'll let it throw off some margin. That's fine. But it's all about services and software. Okay, great. With Arvind, and obviously Red Hat, the whole focus shift to hybrid. We were talking, I think yesterday, about okay, where did we first hear hybrid? Obviously we heard that a lot from VMware. I heard it actually first, early on anyway, from IBM, talking hybrid. Some of the storage guys at the time. Okay, so now all of a sudden there's the realization that to make hybrid work, you need software and hardware working together. >> () Right. So it's now a much more fundamental part of the conversation. So when you look out, Scott, at the trends you're seeing in the market, when you talk to customers, what are you seeing and how is that informing your strategy, and how are you bringing together all the pieces? >> That's a really awesome question because it always depends on who, within the organization, you're speaking to. When you're inside the data center, when you're talking to the architects and the administrators, they understand the value in the necessity for a hybrid-cloud architecture. Something that's consistent. On The Edge, On-Prem, in the cloud. Something that allows them to expand the level of control that they have, without having to specialize on equipment and having to redo things as you move from one medium to the next. As you go upstack in that conversation, what I find really interesting is how leaders are beginning to realize that private cloud or on-prem, multi cloud, super cloud, whatever you call it, whatever's in the middle, those are just deployment mechanisms. What they're coming to understand is it's the applications and the data that's hybrid. And so what they're looking for IBM to deliver, and something that we've really invested in on the infrastructure side is, how do we create bidirectional application mobility? Making it easy for organizations, whether they're using containers, virtual machines, just bare metal, how do they move that data back and forth as they need to, and not just back and forth from on-prem to the cloud, but effectively, how do they go from cloud to cloud? >> Yeah. One of the things I noticed is your pin, says I love AI, with the I next to IBM and get all these (indistinct) in there. AI, remember the quote from IBM is, "You can't have AI without IA." Information architect. >> () Right. >> () Rob Thomas. >> Rob Thomas (indistinct) the sound bites. But that brings up the point about machine learning and some of these things that are coming down the like, how is your area devolving the smarts and the brains around leveraging the AI in the systems itself? We're hearing more and more softwares being coded into the hardware. You see Silicon advances. All this is kind of, not changing it, but bringing back the urgency of, hardware matters. >> That's right. >> () At the same time, it's still software too. >> That's right. So let's connect a couple of dots here. We talked a little bit about the importance of cyber resiliency, and let's talk about a little bit on how we use AI in that matter. So, if you look at the direct flash modules that are in the market today, or the SSDs that are in the market today, just standard-capacity drives. If you look at the flash core modules that IBM produces, we actually treat that as a computational storage offering, where you store the data, but it's got intelligence built into the processor, to offload some of the responsibilities of the controller head. The ability to do compression, single (indistinct), deduplication, you name it. But what if you can apply AI at the controller level, so that signals that are being derived by the flash core module itself, that look anomalous, can be handed up to an intelligence to say, "Hey, I'm all of a sudden getting encrypted rights from a host that I've never gotten encrypted rights for. Maybe this could be a problem." And then imagine if you connect that inferencing engine to the rest of the IBM portfolio, "Hey, Qradar. Hey IBM Guardian. What's going on on the network? Can we see some correlation here?" So what you're going to see IBM infrastructure continue to do is invest heavily into entropy and the ability to measure IO characteristics with respect to anomalous behavior and be able to report against that. And the trick here, because the array technically doesn't know if it's under attack or if the host just decided to turn on encryption, the trick here is using the IBM product relationships, and ecosystem relationships, to do correlation of data to determine what's actually happening, to reduce your false positives. >> And have that pattern of data too. It's all access to data too. Big time. >> That's right. >> And that innovation comes out of IBM R&D? Does it come out of the product group? Is it IBM research that then trickles its way in? Is it the storage innovation? Where's that come from? Where's that bubble up? That partnership? >> Well, I got to tell you, it doesn't take very long in this industry before your counterpart, your competitor, has a similar feature. Right? So we're always looking for, what's the next leg? What's the next advancement that we can make? We knew going into this process, that we had plenty of computational power that was untapped on the FPGA, the processor running on the flash core module. Right? So we thought, okay, well, what should we do next? And we thought, "Hey, why not just set this thing up to start watching IO patterns, do calculations, do trending, and report that back?" And what's great about what you brought up too, John, is that it doesn't stay on the box. We push that upstack through the AIOPS architecture. So if you're using Turbonomic, and you want to look applications stack down, to know if you've got threat potential, or your attack surface is open, you can make some changes there. If you want to look at it across your infrastructure landscape with a storage insight, you could do that. But our goal here is to begin to make the machine smarter and aware of impacts on the data, not just on the data they hold onto, but usage, to move it into the appropriate tier, different write activities or read activities or delete activities that could indicate malicious efforts that are underway, and then begin to start making more autonomous, how about managed autonomous responses? I don't want to turn this into a, oh, it's smart, just turn it on and walk away and it's good. I don't know that we'll ever get there just yet, but the important thing here is, what we're looking at is, how do we continually safeguard and protect that data? And how do we drive features in the box that remove more and more of the day to day responsibility from the administrative staff, who are technically hired really, to service and solve for bigger problems in the enterprise, not to be a specialist and have to manage one box at a time. >> Dave mentioned Arvind coming on, the new CEO of IBM, and the Red Hat acquisition and that change, I'd like to get your personal perspective, or industry perspective, so take your IBM-hat off for a second and put the Scott-experience-in-the-industry hat on, the transformation at the customer level right now is more robust, to use that word. I don't want to say chaotic, but it is chaotic. They say chaos in the cloud here at VM, a big part of their messaging, but it's changing the business model, how things are consumed. You're seeing new business models emerge. So IBM has this lot of storage old systems, you're transforming, the company's transforming. Customers are also transforming, so that's going to change how people market products. >> () Right. >> For example, we know that developers and DevOps love self-service. Why? Because they don't want to install it. Let me go faster. And they want to get rid of it, doesn't work. Storage is infrastructure and still software, so how do you see, in your mind's eye, with all your experience, the vision of how to market products that are super important, that are infrastructure products, that have to be put into play, for really new architectures that are going to transform businesses? It's not as easy as saying, "Oh, we're going to go to market and sell something." The old way. >> () Right. >> This shifting happening is, I don't think there's an answer yet, but I want to get your perspective on that. Customers want to hear the storage message, but it might not be speeds and fees. Maybe it is. Maybe it's not. Maybe it's solutions. Maybe it's security. There's multiple touch points now, that you're dealing with at IBM for the customer, without becoming just a storage thing or just- >> () Right. >> ... or just hardware. I mean, hardware does matter, but what's- >> Yeah, no, you're absolutely right, and I think what complicates that too is, if you look at the buying centers around a purchase decision, that's expanded as well, and so as you engage with a customer, you have to be sensitive to the message that you're telling, so that it touches the needs or the desires of the people that are all sitting around the table. Generally what we like to do when we step in and we engage, isn't so much to talk about the product. At some point, maybe later in the engagements, the importance of speeds, feeds, interconnectivity, et cetera, those do come up. Those are a part of the final decision, but early on it's really about outcomes. What outcomes are you delivering? This idea of being able to deliver, if you use the term zero trust or cyber-resilient storage capability as a part of a broader security architecture that you're putting into place, to help that organization, that certainly comes up. We also hear conversations with customers about, or requests from customers about, how do the parts of IBM themselves work together? Right? And I think a lot of that, again, continues to speak to what kind of outcome are you going to give to me? Here's a challenge that I have. How are you helping me overcome it? And that's a combination of IBM hardware, software, and the services side, where we really have an opportunity to stand out. But the thing that I would tell you, that's probably most important is, the engagement that we have up and down the stack in the market perspective, always starts with, what's the outcome that you're going to deliver for me? And then that drags with it the story that would be specific to the gear. >> Okay, so let's say I'm a customer, and I'm buying it to zero trust architecture, but it's going to be somewhat of a long term plan, but I have a tactical need. I'm really nervous about Ransomware, and I don't feel as though I'm prepared, and I want an outcome that protects me. What are you seeing? Are you seeing any patterns? I know it's going to vary, but are you seeing any patterns, in terms of best practice to protect me? >> Man, the first thing that we wanted to do at IBM is divorce ourselves from the company as we thought through this. And what I mean by that is, we wanted to do what's right, on day zero, for the customer. So we set back using the experience that we've been able to amass, going through various recovery operations, and helping customers get through a Ransomware attack. And we realized, "Hey. What we should offer is a free cyber resilience assessment." So we like to, from the storage side, we'd like to look at what we offer to the customer as following the NIST framework. And most vendors will really lean in hard on the response and the recovery side of that, as you should. But that means that there's four other steps that need to be addressed, and that free cyber-resilience assessment, it's a consultative engagement that we offer. What we're really looking at doing is helping you assess how vulnerable you are, how big is that attack surface? And coming out of that, we're going to give you a Vendor Agnostic Report that says here's your situation, here's your grade or your level of risk and vulnerability, and then here's a prioritized roadmap of where we would recommend that you go off and start solving to close up whatever the gaps or the risks are. Now you could say, "Hey, thanks, IBM. I appreciate that. I'm good with my storage vendor today. I'm going to go off and use it." Now, we may not get some kind of commission check. We may not sell the box. But what I do know is that you're going to walk away knowing the risks that you're in, and we're going to give you the recommendations to get started on closing those up. And that helps me sleep at night. >> That's a nice freebie. >> Yeah. >> Yeah, it really is, 'cause you guys got deep expertise in that area. So take advantage of that. >> Scott, great to have you on. Thanks for spending time out of your busy day. Final question, put a plug in for your group. What are you communicating to customers? Share with the audience here. You're here at VMware Explorer, the new rebranded- >> () Right? >> ... multi-cloud, hybrid cloud, steady state. There are three levels of transformation, virtualization, hybrid cloud, DevOps, now- >> Right? >> ... multi-cloud, so they're in chapter three of their journey- >> That's right. >> Really innovative company, like IBM, so put the plugin. What's going on in your world? Take a minute to explain what you want. >> Right on. So here we are at VMware Explorer, really excited to be here. We're showcasing two aspects of the IBM portfolio, all of the releases and announcements that we're making around the IBM cloud. In fact, you should come check out the product demonstration for the IBM Cloud Satellite. And I don't think they've coined it this, but I like to call it the VMware edition, because it has all of the VMware services and tools built into it, to make it easier to move your workloads around. We certainly have the infrastructure side on the storage, talking about how we can help organizations, not only accelerate their deployments in, let's say Tanzu or Containers, but even how we help them transform the application stack that's running on top of their virtualized environment in the most consistent and secure way possible. >> Multiple years of relationships with VMware. IBM, VMware together. Congratulations. >> () That's right. >> () Thanks for coming on. >> Hey, thanks (indistinct). Thank you very much. >> A lot more live coverage here at Moscone west. This is theCUBE. I'm John Furrier with Dave Vellante. Thanks for watching. Two more days of wall-to-wall coverage continuing here. Stay tuned. (soothing music)

>>The introduction of the modern public cloud in the mid two thousands permanently changed the way we think about it at the heart of it. The cloud operating model attacked one of the biggest problems in enterprise infrastructure, human labor costs more than half of it, budgets were spent on people. And much of that effort added little or no differentiable value to the business. The automation of provisioning management, recovery optimization and decommissioning infrastructure resources has gone mainstream as organizations demand a cloud-like model across all their application infrastructure, irrespective of its physical location. This is not only cut costs, but it's also improved quality and reduced human error. Hello everyone. My name is Dave Vellante and welcome to simplifying hybrid cloud made possible by Cisco today, we're going to explore hybrid cloud as an operating model for organizations or the definition of cloud is expanding. Cloud is no longer an abstract set of remote services, you know, somewhere out in the clouds. >>No, it's an operating model that spans public cloud on premises infrastructure. And it's also moving to edge locations. This trend is happening at massive scale. While at the same time, preserving granular control of resources. It's an entirely new game where it managers must think differently to deal with this complexity. And the environment is constantly changing the growth and diversity of applications continues. And now we're living in a world where the workforce is remote hybrid work is now a permanent state and will be the dominant model. In fact, a recent survey of CIO is by enterprise technology. Research ETR indicates that organizations expect 36% of their workers will be operating in a hybrid mode splitting time between remote work and in office environments. This puts added pressure on the application infrastructure required to support these workers. The underlying technology must be more dynamic and adaptable to accommodate constant change. >>So the challenge for it managers is ensuring that modern applications can be run with a cloud-like experience that spans on-prem public cloud and edge locations. This is the future of it. Now today we have three segments where we're going to dig into these issues and trends surrounding hybrid cloud. First up is Didi Dasgupta, who will set the stage and share with us how Cisco is approaching this challenge. Next we're going to hear from Maneesh Agra wall and Darren Williams, who will help us unpack HyperFlex, which is Cisco's hyper-converged infrastructure offering. And finally, our third segment we'll drill into unified compute more than a decade ago. Cisco pioneered the concept of bringing together compute with networking in a single offering. Cisco frankly changed the legacy server market with UCS unified compute system. The X series is Cisco's next generation architecture for the coming decade, and we'll explore how it fits into the world of hybrid cloud and its role in simplifying the complexity that we just discussed. So thanks for being here. Let's go. >>Okay. Let's start things off. Gus is back on the cube to talk about how we're going to simplify hybrid cloud complexity. DD. Welcome. Good to see you again. >>Hey Dave, thanks for having me. Good to see you again. Yeah, >>Our pleasure here. Uh, look, let's start with big picture. Talk about the trends you're seeing from your customers. >>Well, I think first off every customer, these days is a public cloud customer. They do have their on-premise data centers, but um, every customer is looking to move workloads, use services, cloud native services from the public cloud. I think that's, that's one of the big things that we're seeing, um, while that is happening. We're also seeing a pretty dramatic evolution of the application landscape itself. You've got bare metal applications. You always have virtualized applications. Um, and then most modern applications are, um, are containerized and, you know, managed by Kubernetes. So I think we're seeing a big change in, uh, uh, in the application landscape as well, and probably, you know, triggered by the first two things that I mentioned, the execution venue of the applications, and then the applications themselves it's triggering a change in the it organizations in the development organizations and sort of not only how they work within their organizations, but how they work across, um, all of these different organizations. So I think those are some of the big things that, uh, that I hear about when I talk to customers. >>Well, so it's interesting. I often say Cisco kind of changed the game and in server and compute when it, when it developed the original UCS and you remember there were organizational considerations back then bringing together the server team and the networking team. And of course the bus storage team. And now you mentioned Kubernetes, that is a total game changer with regard to whole the application development process. So you have to think about a new strategy in that regard. So how have you evolved your strategy? What is your strategy to help customers simplify, accelerate their hybrid cloud journey in that context? >>No, I think you're right. Um, back to the origins of UCS, I mean, we widen the networking company, builder server, well, we just enabled with the best networking technology. So we do compute that and now doing something similar on the software, actually the software for our, um, for our and you know, we've been on this journey for about four years. Um, but the software is called intersite and, you know, we started out with intersite being just the element manager management software for Cisco's compute and hyperconverged devices. Um, but then we've evolved it over the last few years because we believe that the customer shouldn't have to manage a separate piece of software would do manage the hardware of the underlying hardware and then a separate tool to connect it to a public cloud. And then the third tool to do optimization, workload optimization or performance optimization or cost optimization, a fourth tool do now manage Kubernetes and not just in one cluster, one cloud, but multi cluster multicloud. >>They should not have to have a fifth tool that does go into observability. Anyway, I can go on and on, but you get the idea. We wanted to bring everything onto that same platform that manage their infrastructure, but it's also the platform that enables the simplicity of hybrid cloud operations, automation. It's the same platform on which you can use to manage the Kubernetes infrastructure, uh, Kubernetes clusters. I mean, whether it's on-prem or in the cloud. So overall that's the strategy, bring it to a single platform and a platform is a loaded word, but we'll get into that a little bit, uh, you know, in this, in this conversation, but that's the overall strategy simplify? >>Well, you know, we brought a platform, I, I like to say platform beats products, but you know, there was a day and you could still point to some examples today in the it industry where, Hey, another tool we can monetize that and another one to solve a different problem. We can monetize that. Uh, and so tell me more about how intersite came about. You obviously sat back, you saw what your customers were going through. You said we can do better. So w tell us the story there. >>Yeah, absolutely. So look, it started with, um, you know, three or four guys in getting in a room and saying, look, we've had this, you know, management software, UCS manager, UCS director, and these are just the Cisco's management, you know, uh, for our softwares, for our own platform. Then every company has their, their own flavor. We said, we took on this ball goal of like, we're not when we rewrite this or we improve on this, we're not going to just write another piece of software. We're going to create a cloud service, or we're going to create a SAS offering because the same is the infrastructure built by us, whether it's on networking or compute or on software, how do our customers use it? Well, they use it to write and run their applications, their SAS services, every customer, every customer, every company today is a software company. >>They live and die by how they work or don't. And so we were like, we want to eat our own dog food here, right? We want to deliver this as a SAS offering. And so that's how it started being on this journey for about four years, tens of thousands of customers. Um, but it was a pretty big boat patient because, you know, um, the big change with SAS is, is you're, uh, as you're familiar today is the job of now managing this, this piece of software is not on the customer, it's on the vendor, right? This can never go down. We have a release every Thursday, new capabilities, and we've learned so much along the way, whether it's around scalability, reliability, um, working with, uh, our own companies, security organizations on what can or cannot be in a SAS service. Um, so again, it's just been a wonderful journey, but, uh, I wanted to point out, we are in some ways eating our own dog food because we built a SAS application that helps other companies deliver their SAS applications. >>So Cisco, I look at Cisco's business model and I compete, I of course, compare it to other companies in the infrastructure business, and obviously a very profitable company or large company you're growing faster than, than, than most of the traditional competitors. And so that means that you have more to invest. You, you, you can, you can afford things like doing stock buybacks, and you can invest in R and D. You don't have to make those hard trade-offs that a lot of your competitors have to make. So It's never enough, right. Never enough. But, but, but in speaking of R and D and innovations that your intro introducing I'm specifically interested in, how are you dealing with innovations to help simplify hybrid cloud in the operations there and prove flexibility and things around cloud native initiatives as well? >>Absolutely. Absolutely. Well, look, I think one of the fundamentals where we're philosophically different from a lot of options that I see in the industry is we don't need to build everything ourselves. We don't, I just need to create a damn good platform with really good platform services, whether it's, you know, around, um, search ability, whether it's around logging, whether it's around, you know, access control, multi-tenants, I need to create a really good platform and make it open. I do not need to go on a shopping spree to buy 17 and a half companies, and then figure out how to stitch it all together. Cause it's, it's almost impossible if it's impossible for us as a vendor, it's, it's three times more difficult, but for the customer who then has to consume it. So that was the philosophical difference in how we went about building in our sites. >>We've created a harden platform that's, that's always on. Okay. And then you, then the magic starts happening. Then you get partners, whether it is, um, you know, infrastructure partners like, uh, you know, some of our storage partners like NetApp or your, you know, others who want their conversion infrastructure is also to be managed or are other SAS offerings and software vendors, um, who have now become partners. Like we do not, we did not write to Terraform, you know, but we partnered with Tashi and now, uh, you know, Terraform services available on the intercept platform. We did not write all the algorithms for workload optimization between a public cloud and on-prem, we partnered with a company called ergonomics. And so that's now an offering on the intercept platform. So that's where we're philosophically different and sort of, uh, you know, w how we have gone about this. >>And, uh, it actually dovetails well into some of the new things that I want to talk about today that we're announcing on the inner side platform where we're actually announcing the ability to attach and, and be able to manage Kubernetes clusters, which are not on prem. They're actually on AWS, on Azure, uh, soon coming on, uh, on GC, on, uh, on GKE as well. So it really doesn't matter. We're not telling a customer if you're comfortable building your applications and running Kubernetes clusters on, you know, in AWS or Azure, stay there, but in terms of monitoring, managing it, you can use in our site is since you're using it on prem, you can use that same piece of software to manage Kubernetes clusters in a public cloud, or even manage the end in, in a, in an easy to instance. So, >>So the fact that you could, you mentioned storage, pure net app. So it's intersite can manage that infrastructure. I remember the hot-seat deal. It caught my attention. And of course, a lot of companies want to partner with Cisco because you've got such a strong ecosystem, but I thought that was an interesting move Turbonomic. You mentioned. And now you're saying Kubernetes in the public cloud, so a lot different than it was 10 years ago. Um, so my last question is how do you see this hybrid cloud evolving? I mean, you had private cloud and you had public cloud, it was kind of a tug of war there. We see these, these, these two worlds coming together. How will that evolve over the next few years? >>Well, I think it's, it's the evolution of the model and really look at depending on, you know, how you're keeping time. But I think one thing has become very clear. Again, we may be eating our own dog food. I mean, innercise is a hybrid cloud SAS applications that we've learned. Some of these lessons ourselves. One thing is referred that customers are looking for a consistent model, whether it's on the edge, on the polo public cloud, on-prem no data center. It doesn't matter if they're looking for a consistent model for operations, for governings or upgrades, or they're looking for a consistent operating model. What my crystal ball doesn't mean. There's going to be the rise of more custom plugs. It's still going to be hybrid. So allegations will want to reside wherever it makes most sense for them, which is most as the data moving data is the most expensive thing. >>So it's going to be located with the data that's on the edge. We on the air colo public cloud doesn't matter, but, um, basically you're gonna see more custom clouds, more industry-specific clouds, you know, whether it's for finance or constipation or retail industry specific, I think sovereign is going to play a huge role. Uh, you know, today, if you look at the cloud providers, you know, American and Chinese companies that these, the rest of the world, when it goes to making, you know, a good digital citizens, they're they're people and, you know, whether it's, gonna play control, um, and then distributed cloud also on edge, um, is, is gonna be the next frontier. And so that's where we are trying to line up our strategy. And if I had to sum it up in one sentence, it's really your cloud, your way, every customer is on a different journey. They will have their choice of like workload data, um, you know, upgrading your liability concerns. That's really what, what we are trying to enable for our customers. >>Uh, you know, I think I agree with doing that custom clouds. And I think what you're seeing is you said every company is a software company. Every company is also becoming a cloud company. They're building their own abstraction layers. They're connecting their on-prem to their, to their public cloud. They're doing that. They're, they're doing that across clouds. And they're looking for companies like Cisco to do the hard work. It give me an infrastructure layer that I can build value on top of, because I'm going to take my financial services business to my cloud model or my healthcare business. I don't want to mess around with it. I'm not going to develop, you know, custom infrastructure like an Amazon does. I'm going to look to Cisco in your R and D to do that. Do you buy that? >>Absolutely. I think, again, it goes back back to what I was talking about with blacks. You got to get the world, uh, a solid open, flexible platform, and it's flexible in terms of the technology flexible in how they want to consume it at some customers are fine with a SAS software. What if I talk to, you know, my friends in the federal team now that does not work so how they want to consume it, they want to, you know, our perspective sovereignty, we talked about it. So, you know, job for an infrastructure vendor like ourselves is give the world an open platform, give them the knobs, give them the right API. Um, but the last thing I would mention is, you know, there's still a place for innovation in hardware. Some of my colleagues are gonna engage into some of those, um, you know, details, whether it's on our X series platform or HyperFlex. Um, but it's really, it's going to, it's going to be software defined to SAS service and then, you know, give the world and open rock-solid platform, >>Got to run on something. All right, thanks DDL. It was a pleasure to have you in the queue. Great to see you. You're welcome in a moment, I'll be back to dig into hyperconverged and where HyperFlex fits and how it may even help with addressing some of the supply chain challenges that we're seeing in the market today.

>> The introduction of the modern public cloud in the mid 2000s, permanently changed the way we think about IT. At the heart of it, the cloud operating model attacked one of the biggest problems in enterprise infrastructure, human labor costs. More than half of IT budgets were spent on people, and much of that effort added little or no differentiable value to the business. The automation of provisioning, management, recovery, optimization, and decommissioning infrastructure resources has gone mainstream as organizations demand a cloud-like model across all their application infrastructure, irrespective of its physical location. This has not only cut cost, but it's also improved quality and reduced human error. Hello everyone, my name is Dave Vellante and welcome to Simplifying Hybrid Cloud, made possible by Cisco. Today, we're going to explore Hybrid Cloud as an operating model for organizations. Now the definite of cloud is expanding. Cloud is no longer an abstract set of remote services, you know, somewhere out in the clouds. No, it's an operating model that spans public cloud, on-premises infrastructure, and it's also moving to edge locations. This trend is happening at massive scale. While at the same time, preserving granular control of resources. It's an entirely new game where IT managers must think differently to deal with this complexity. And the environment is constantly changing. The growth and diversity of applications continues. And now, we're living in a world where the workforce is remote. Hybrid work is now a permanent state and will be the dominant model. In fact, a recent survey of CIOs by Enterprise Technology Research, ETR, indicates that organizations expect 36% of their workers will be operating in a hybrid mode. Splitting time between remote work and in office environments. This puts added pressure on the application infrastructure required to support these workers. The underlying technology must be more dynamic and adaptable to accommodate constant change. So the challenge for IT managers is ensuring that modern applications can be run with a cloud-like experience that spans on-prem, public cloud, and edge locations. This is the future of IT. Now today, we have three segments where we're going to dig into these issues and trends surrounding Hybrid Cloud. First up, is DD Dasgupta, who will set the stage and share with us how Cisco is approaching this challenge. Next, we're going to hear from Manish Agarwal and Darren Williams, who will help us unpack HyperFlex which is Cisco's hyperconverged infrastructure offering. And finally, our third segment will drill into Unified Compute. More than a decade ago, Cisco pioneered the concept of bringing together compute with networking in a single offering. Cisco frankly, changed the legacy server market with UCS, Unified Compute System. The X-Series is Cisco's next generation architecture for the coming decade and we'll explore how it fits into the world of Hybrid Cloud, and its role in simplifying the complexity that we just discussed. So, thanks for being here. Let's go. (upbeat music playing) Okay, let's start things off. DD Dasgupta is back on theCUBE to talk about how we're going to simplify Hybrid Cloud complexity. DD welcome, good to see you again. >> Hey Dave, thanks for having me. Good to see you again. >> Yeah, our pleasure. Look, let's start with big picture. Talk about the trends you're seeing from your customers. >> Well, I think first off, every customer these days is a public cloud customer. They do have their on-premise data centers, but, every customer is looking to move workloads, new services, cloud native services from the public cloud. I think that's one of the big things that we're seeing. While that is happening, we're also seeing a pretty dramatic evolution of the application landscape itself. You've got, you know, bare metal applications, you always have virtualized applications, and then most modern applications are containerized, and, you know, managed by Kubernetes. So I think we're seeing a big change in, in the application landscape as well. And, probably, you know, triggered by the first two things that I mentioned, the execution venue of the applications, and then the applications themselves, it's triggering a change in the IT organizations in the development organizations and sort of not only how they work within their organizations, but how they work across all of these different organizations. So I think those are some of the big things that, that I hear about when I talk to customers. >> Well, so it's interesting. I often say Cisco kind of changed the game in server and compute when it developed the original UCS. And you remember there were organizational considerations back then bringing together the server team and the networking team and of course the storage team as well. And now you mentioned Kubernetes, that is a total game changer with regard to whole the application development process. So you have to think about a new strategy in that regard. So how have you evolved your strategy? What is your strategy to help customers simplify, accelerate their hybrid cloud journey in that context? >> No, I think you're right Dave, back to the origins of UCS and we, you know, why did a networking company build a server? Well, we just enabled with the best networking technologies so, would do compute better. And now, doing something similar on the software, actually the managing software for our hyperconvergence, for our, you know, Rack server, for our blade servers. And, you know, we've been on this journey for about four years. The software is called Intersight, and, you know, we started out with Intersight being just the element manager, the management software for Cisco's compute and hyperconverged devices. But then we've evolved it over the last few years because we believe that a customer shouldn't have to manage a separate piece of software, would do manage the hardware, the underlying hardware. And then a separate tool to connect it to a public cloud. And then a third tool to do optimization, workload optimization or performance optimization, or cost optimization. A fourth tool to now manage, you know, Kubernetes and like, not just in one cluster, one cloud, but multi-cluster, multi-cloud. They should not have to have a fifth tool that does, goes into observability anyway. I can go on and on, but you get the idea. We wanted to bring everything onto that same platform that manage their infrastructure. But it's also the platform that enables the simplicity of hybrid cloud operations, automation. It's the same platform on which you can use to manage the, the Kubernetes infrastructure, Kubernetes clusters, I mean, whether it's on-prem or in a cloud. So, overall that's the strategy. Bring it to a single platform, and a platform is a loaded word we'll get into that a little bit, you know, in this conversation, but, that's the overall strategy, simplify. >> Well, you know, you brought platform. I like to say platform beats products, but you know, there was a day, and you could still point to some examples today in the IT industry where, hey, another tool we can monetize that. And another one to solve a different problem, we can monetize that. And so, tell me more about how Intersight came about. You obviously sat back, you saw what your customers were going through, you said, "We can do better." So tell us the story there. >> Yeah, absolutely. So, look, it started with, you know, three or four guys in getting in a room and saying, "Look, we've had this, you know, management software, UCS manager, UCS director." And these are just the Cisco's management, you know, for our, softwares for our own platforms. And every company has their own flavor. We said, we took on this bold goal of like, we're not, when we rewrite this or we improve on this, we're not going to just write another piece of software. We're going to create a cloud service. Or we're going to create a SaaS offering. Because the same, the infrastructure built by us whether it's on networking or compute, or the cyber cloud software, how do our customers use it? Well, they use it to write and run their applications, their SaaS services, every customer, every customer, every company today is a software company. They live and die by how their applications work or don't. And so, we were like, "We want to eat our own dog food here," right? We want to deliver this as a SaaS offering. And so that's how it started, we've being on this journey for about four years, tens of thousands of customers. But it was a pretty big, bold ambition 'cause you know, the big change with SaaS as you're familiar Dave is, the job of now managing this piece of software, is not on the customer, it's on the vendor, right? This can never go down. We have a release every Thursday, new capabilities, and we've learned so much along the way, whether it's to announce scalability, reliability, working with, our own company's security organizations on what can or cannot be in a SaaS service. So again, it's been a wonderful journey, but, I wanted to point out, we are in some ways eating our own dog food 'cause we built a SaaS application that helps other companies deliver their SaaS applications. >> So Cisco, I look at Cisco's business model and I compare, of course compare it to other companies in the infrastructure business and, you're obviously a very profitable company, you're a large company, you're growing faster than most of the traditional competitors. And, so that means that you have more to invest. You, can afford things, like to you know, stock buybacks, and you can invest in R&D you don't have to make those hard trade offs that a lot of your competitors have to make, so-- >> You got to have a talk with my boss on the whole investment. >> Yeah, right. You'd never enough, right? Never enough. But in speaking of R&D and innovations that you're intro introducing, I'm specifically interested in, how are you dealing with innovations to help simplify hybrid cloud, the operations there, improve flexibility, and things around Cloud Native initiatives as well? >> Absolutely, absolutely. Well, look, I think, one of the fundamentals where we're kind of philosophically different from a lot of options that I see in the industry is, we don't need to build everything ourselves, we don't. I just need to create a damn good platform with really good platform services, whether it's, you know, around, searchability, whether it's around logging, whether it's around, you know, access control, multi-tenants. I need to create a really good platform, and make it open. I do not need to go on a shopping spree to buy 17 and 1/2 companies and then figure out how to stich it all together. 'Cause it's almost impossible. And if it's impossible for us as a vendor, it's three times more difficult for the customer who then has to consume it. So that was the philosophical difference and how we went about building Intersight. We've created a hardened platform that's always on, okay? And then you, then the magic starts happening. Then you get partners, whether it is, you know, infrastructure partners, like, you know, some of our storage partners like NetApp or PR, or you know, others, who want their conversion infrastructures also to be managed, or their other SaaS offerings and software vendors who have now become partners. Like we did not write Terraform, you know, but we partnered with Hashi and now, you know, Terraform service's available on the Intersight platform. We did not write all the algorithms for workload optimization between a public cloud and on-prem. We partner with a company called Turbonomic and so that's now an offering on the Intersight platform. So that's where we're philosophically different, in sort of, you know, how we have gone about this. And, it actually dovetails well into, some of the new things that I want to talk about today that we're announcing on the Intersight platform where we're actually announcing the ability to attach and be able to manage Kubernetes clusters which are not on-prem. They're actually on AWS, on Azure, soon coming on GC, on GKE as well. So it really doesn't matter. We're not telling a customer if you're comfortable building your applications and running Kubernetes clusters on, you know, in AWS or Azure, stay there. But in terms of monitoring, managing it, you can use Intersight, and since you're using it on-prem you can use that same piece of software to manage Kubernetes clusters in a public cloud. Or even manage DMS in a EC2 instance. So. >> Yeah so, the fact that you could, you mentioned Storage Pure, NetApp, so Intersight can manage that infrastructure. I remember the Hashi deal and I, it caught my attention. I mean, of course a lot of companies want to partner with Cisco 'cause you've got such a strong ecosystem, but I thought that was an interesting move, Turbonomic you mentioned. And now you're saying Kubernetes in the public cloud. So a lot different than it was 10 years ago. So my last question is, how do you see this hybrid cloud evolving? I mean, you had private cloud and you had public cloud, and it was kind of a tug of war there. We see these two worlds coming together. How will that evolve on for the next few years? >> Well, I think it's the evolution of the model and I, really look at Cloud, you know, 2.0 or 3.0, or depending on, you know, how you're keeping terms. But, I think one thing has become very clear again, we, we've be eating our own dog food, I mean, Intersight is a hybrid cloud SaaS application. So we've learned some of these lessons ourselves. One thing is for sure that the customers are looking for a consistent model, whether it's on the edge, on the COLO, public cloud, on-prem, no data center, it doesn't matter. They're looking for a consistent model for operations, for governance, for upgrades, for reliability. They're looking for a consistent operating model. What (indistinct) tells me I think there's going to be a rise of more custom clouds. It's still going to be hybrid, so applications will want to reside wherever it most makes most sense for them which is obviously data, 'cause you know, data is the most expensive thing. So it's going to be complicated with the data goes on the edge, will be on the edge, COLO, public cloud, doesn't matter. But, you're basically going to see more custom clouds, more industry specific clouds, you know, whether it's for finance, or transportation, or retail, industry specific, I think sovereignty is going to play a huge role, you know, today, if you look at the cloud provider there's a handful of, you know, American and Chinese companies, that leave the rest of the world out when it comes to making, you know, good digital citizens of their people and you know, whether it's data latency, data gravity, data sovereignty, I think that's going to play a huge role. Sovereignty's going to play a huge role. And the distributor cloud also called Edge, is going to be the next frontier. And so, that's where we are trying line up our strategy. And if I had to sum it up in one sentence, it's really, your cloud, your way. Every customer is on a different journey, they will have their choice of like workloads, data, you know, upgrade reliability concern. That's really what we are trying to enable for our customers. >> You know, I think I agree with you on that custom clouds. And I think what you're seeing is, you said every company is a software company. Every company is also becoming a cloud company. They're building their own abstraction layers, they're connecting their on-prem to their public cloud. They're doing that across clouds, and they're looking for companies like Cisco to do the hard work, and give me an infrastructure layer that I can build value on top of. 'Cause I'm going to take my financial services business to my cloud model, or my healthcare business. I don't want to mess around with, I'm not going to develop, you know, custom infrastructure like an Amazon does. I'm going to look to Cisco and your R&D to do that. Do you buy that? >> Absolutely. I think again, it goes back to what I was talking about with platform. You got to give the world a solid open, flexible platform. And flexible in terms of the technology, flexible in how they want to consume it. Some of our customers are fine with the SaaS, you know, software. But if I talk to, you know, my friends in the federal team, no, that does not work. And so, how they want to consume it, they want to, you know, (indistinct) you know, sovereignty we talked about. So, I think, you know, job for an infrastructure vendor like ourselves is to give the world a open platform, give them the knobs, give them the right API tool kit. But the last thing I will mention is, you know, there's still a place for innovation in hardware. And I think some of my colleagues are going to get into some of those, you know, details, whether it's on our X-Series, you know, platform or HyperFlex, but it's really, it's going to be software defined, it's a SaaS service and then, you know, give the world an open rock solid platform. >> Got to run on something All right, Thanks DD, always a pleasure to have you on the, theCUBE, great to see you. >> Thanks for having me. >> You're welcome. In a moment, I'll be back to dig into hyperconverged, and where HyperFlex fits, and how it may even help with addressing some of the supply chain challenges that we're seeing in the market today. >> It used to be all your infrastructure was managed here. But things got more complex in distributing, and now IT operations need to be managed everywhere. But what if you could manage everywhere from somewhere? One scalable place that brings together your teams, technology, and operations. Both on-prem and in the cloud. One automated place that provides full stack visibility to help you optimize performance and stay ahead of problems. One secure place where everyone can work better, faster, and seamlessly together. That's the Cisco Intersight cloud operations platform. The time saving, cost reducing, risk managing solution for your whole IT environment, now and into the future of this ever-changing world of IT. (upbeat music) >> With me now are Manish Agarwal, senior director of product management for HyperFlex at Cisco, @flash4all, number four, I love that, on Twitter. And Darren Williams, the director of business development and sales for Cisco. MrHyperFlex, @MrHyperFlex on Twitter. Thanks guys. Hey, we're going to talk about some news and HyperFlex, and what role it plays in accelerating the hybrid cloud journey. Gentlemen, welcome to theCUBE, good to see you. >> Thanks a lot Dave. >> Thanks Dave. >> All right Darren, let's start with you. So, for a hybrid cloud, you got to have on-prem connection, right? So, you got to have basically a private cloud. What are your thoughts on that? >> Yeah, we agree. You can't have a hybrid cloud without that prime element. And you've got to have a strong foundation in terms of how you set up the whole benefit of the cloud model you're building in terms of what you want to try and get back from the cloud. You need a strong foundation. Hyperconversions provides that. We see more and more customers requiring a private cloud, and they're building it with Hyperconversions, in particular HyperFlex. Now to make all that work, they need a good strong cloud operations model to be able to connect both the private and the public. And that's where we look at Intersight. We've got solution around that to be able to connect that around a SaaS offering. That looks around simplified operations, gives them optimization, and also automation to bring both private and public together in that hybrid world. >> Darren let's stay with you for a minute. When you talk to your customers, what are they thinking these days when it comes to implementing hyperconverged infrastructure in both the enterprise and at the edge, what are they trying to achieve? >> So there's many things they're trying to achieve, probably the most brutal honesty is they're trying to save money, that's probably the quickest answer. But, I think they're trying to look in terms of simplicity, how can they remove layers of components they've had before in their infrastructure? We see obviously collapsing of storage into hyperconversions and storage networking. And we've got customers that have saved 80% worth of savings by doing that collapse into a hyperconversion infrastructure away from their Three Tier infrastructure. Also about scalability, they don't know the end game. So they're looking about how they can size for what they know now, and how they can grow that with hyperconvergence very easy. It's one of the major factors and benefits of hyperconversions. They also obviously need performance and consistent performance. They don't want to compromise performance around their virtual machines when they want to run multiple workloads. They need that consistency all all way through. And then probably one of the biggest ones is that around the simplicity model is the management layer, ease of management. To make it easier for their operations, yeah, we've got customers that have told us, they've saved 50% of costs in their operations model on deploying HyperFlex, also around the time savings they make massive time savings which they can reinvest in their infrastructure and their operations teams in being able to innovate and go forward. And then I think probably one of the biggest pieces we've seen as people move away from three tier architecture is the deployment elements. And the ease of deployment gets easy with hyperconverged, especially with Edge. Edge is a major key use case for us. And, what I want, what our customers want to do is get the benefit of a data center at the edge, without A, the big investment. They don't want to compromise in performance, and they want that simplicity in both management and deployment. And, we've seen our analysts recommendations around what their readers are telling them in terms of how management deployment's key for our IT operations teams. And how much they're actually saving by deploying Edge and taking the burden away when they deploy hyperconversions. And as I said, the savings elements is the key bit, and again, not always, but obviously those are case studies around about public cloud being quite expensive at times, over time for the wrong workloads. So by bringing them back, people can make savings. And we again have customers that have made 50% savings over three years compared to their public cloud usage. So, I'd say that's the key things that customers are looking for. Yeah. >> Great, thank you for that Darren. Manish, we have some hard news, you've been working a lot on evolving the HyperFlex line. What's the big news that you've just announced? >> Yeah, thanks Dave. So there are several things that we are announcing today. The first one is a new offer called HyperFlex Express. This is, you know, Cisco Intersight led and Cisco Intersight managed eight HyperFlex configurations. That we feel are the fastest path to hybrid cloud. The second is we are expanding our server portfolio by adding support for HX on AMD Rack, UCS AMD Rack. And the third is a new capability that we are introducing, that we are calling, local containerized witness. And let me take a minute to explain what this is. This is a pretty nifty capability to optimize for Edge environments. So, you know, this leverages the, Cisco's ubiquitous presence of the networking, you know, products that we have in the environments worldwide. So the smallest HyperFlex configuration that we have is a 2-node configuration, which is primarily used in Edge environments. Think of a, you know, a backroom in a departmental store or a oil rig, or it might even be a smaller data center somewhere around the globe. For these 2-node configurations, there is always a need for a third entity that, you know, industry term for that is either a witness or an arbitrator. We had that for HyperFlex as well. And the problem that customers face is, where you host this witness. It cannot be on the cluster because the job of the witness is to, when the infrastructure is going down, it basically breaks, sort of arbitrates which node gets to survive. So it needs to be outside of the cluster. But finding infrastructure to actually host this is a problem, especially in the Edge environments where these are resource constraint environments. So what we've done is we've taken that witness, we've converted it into a container reform factor. And then qualified a very large slew of Cisco networking products that we have, right from ISR, ASR, Nexus, Catalyst, industrial routers, even a Raspberry Pi that can host this witness. Eliminating the need for you to find yet another piece of infrastructure, or doing any, you know, care and feeding of that infrastructure. You can host it on something that already exists in the environment. So those are the three things that we are announcing today. >> So I want to ask you about HyperFlex Express. You know, obviously the whole demand and supply chain is out of whack. Everybody's, you know, global supply chain issues are in the news, everybody's dealing with it. Can you expand on that a little bit more? Can HyperFlex Express help customers respond to some of these issues? >> Yeah indeed Dave. You know the primary motivation for HyperFlex Express was indeed an idea that, you know, one of the folks are on my team had, which was to build a set of HyperFlex configurations that are, you know, would have a shorter lead time. But as we were brainstorming, we were actually able to tag on multiple other things and make sure that, you know, there is in it for, something in it for our customers, for sales, as well as our partners. So for example, you know, for our customers, we've been able to dramatically simplify the configuration and the install for HyperFlex Express. These are still HyperFlex configurations and you would at the end of it, get a HyperFlex cluster. But the part to that cluster is much, much simplified. Second is that we've added in flexibility where you can now deploy these, these are data center configurations, but you can deploy these with or without fabric interconnects, meaning you can deploy with your existing top of rack. We've also, you know, added attractive price point for these, and of course, you know, these will have better lead times because we've made sure that, you know, we are using components that are, that we have clear line of sight from our supply perspective. For partner and sales, this is, represents a high velocity sales motion, a faster turnaround time, and a frictionless sales motion for our distributors. This is actually a set of disty-friendly configurations, which they would find very easy to stalk, and with a quick turnaround time, this would be very attractive for the distys as well. >> It's interesting Manish, I'm looking at some fresh survey data, more than 70% of the customers that were surveyed, this is the ETR survey again, we mentioned 'em at the top. More than 70% said they had difficulty procuring server hardware and networking was also a huge problem. So that's encouraging. What about, Manish, AMD? That's new for HyperFlex. What's that going to give customers that they couldn't get before? >> Yeah Dave, so, you know, in the short time that we've had UCS AMD Rack support, we've had several record making benchmark results that we've published. So it's a powerful platform with a lot of performance in it. And HyperFlex, you know, the differentiator that we've had from day one is that it has the industry leading storage performance. So with this, we are going to get the fastest compute, together with the fastest storage. And this, we are hoping that we'll, it'll basically unlock, you know, a, unprecedented level of performance and efficiency, but also unlock several new workloads that were previously locked out from the hyperconverged experience. >> Yeah, cool. So Darren, can you give us an idea as to how HyperFlex is doing in the field? >> Sure, absolutely. So, both me and Manish been involved right from the start even before it was called HyperFlex, and we've had a great journey. And it's very exciting to see where we are taking, where we've been with the technology. So we have over 5,000 customers worldwide, and we're currently growing faster year over year than the market. The majority of our customers are repeat buyers, which is always a good sign in terms of coming back when they've proved the technology and are comfortable with the technology. They, repeat buyer for expanded capacity, putting more workloads on. They're using different use cases on there. And from an Edge perspective, more numbers of science. So really good endorsement of the technology. We get used across all verticals, all segments, to house mission critical applications, as well as the traditional virtual server infrastructures. And we are the lifeblood of our customers around those, mission critical customers. I think one big example, and I apologize for the worldwide audience, but this resonates with the American audience is, the Super Bowl. So, the SoFi stadium that housed the Super Bowl, actually has Cisco HyperFlex running all the management services, through from the entire stadium for digital signage, 4k video distribution, and it's completely cashless. So, if that were to break during Super Bowl, that would've been a big news article. But it was run perfectly. We, in the design of the solution, we're able to collapse down nearly 200 servers into a few nodes, across a few racks, and have 120 virtual machines running the whole stadium, without missing a heartbeat. And that is mission critical for you to run Super Bowl, and not be on the front of the press afterwards for the wrong reasons, that's a win for us. So we really are, really happy with HyperFlex, where it's going, what it's doing, and some of the use cases we're getting involved in, very, very exciting. >> Hey, come on Darren, it's Super Bowl, NFL, that's international now. And-- >> Thing is, I follow NFL. >> The NFL's, it's invading London, of course, I see the, the picture, the real football over your shoulder. But, last question for Manish. Give us a little roadmap, what's the future hold for HyperFlex? >> Yeah. So, you know, as Darren said, both Darren and I have been involved with HyperFlex since the beginning. But, I think the best is yet to come. There are three main pillars for HyperFlex. One is, Intersight is central to our strategy. It provides a, you know, lot of customer benefit from a single pane of class management. But we are going to take this beyond the lifecycle management, which is for HyperFlex, which is integrated into Intersight today, and element management. We are going to take it beyond that and start delivering customer value on the dimensions of AI Ops, because Intersight really provides us a ideal platform to gather stats from all the clusters across the globe, do AI/ML and do some predictive analysis with that, and return back as, you know, customer valued, actionable insights. So that is one. The second is UCS expand the HyperFlex portfolio, go beyond UCS to third party server platforms, and newer UCS server platforms as well. But the highlight there is one that I'm really, really excited about and think that there is a lot of potential in terms of the number of customers we can help. Is HX on X-Series. X-Series is another thing that we are going to, you know, add, we're announcing a bunch of capabilities on in this particular launch. But HX on X-Series will have that by the end of this calendar year. And that should unlock with the flexibility of X-Series of hosting a multitude of workloads and the simplicity of HyperFlex. We're hoping that would bring a lot of benefits to new workloads that were locked out previously. And then the last thing is HyperFlex data platform. This is the heart of the offering today. And, you'll see the HyperFlex data platform itself it's a distributed architecture, a unique distributed architecture. Primarily where we get our, you know, record baring performance from. You'll see it can foster more scalable, more resilient, and we'll optimize it for you know, containerized workloads, meaning it'll get granular containerized, container granular management capabilities, and optimize for public cloud. So those are some things that we are, the team is busy working on, and we should see that come to fruition. I'm hoping that we'll be back at this forum in maybe before the end of the year, and talking about some of these newer capabilities. >> That's great. Thank you very much for that, okay guys, we got to leave it there. And you know, Manish was talking about the HX on X-Series that's huge, customers are going to love that and it's a great transition 'cause in a moment, I'll be back with Vikas Ratna and Jim Leach, and we're going to dig into X-Series. Some real serious engineering went into this platform, and we're going to explore what it all means. You're watching Simplifying Hybrid Cloud on theCUBE, your leader in enterprise tech coverage. >> The power is here, and here, but also here. And definitely here. Anywhere you need the full force and power of your infrastructure hyperconverged. It's like having thousands of data centers wherever you need them, powering applications anywhere they live, but manage from the cloud. So you can automate everything from here. (upbeat music) Cisco HyperFlex goes anywhere. Cisco, the bridge to possible. (upbeat music) >> Welcome back to theCUBE's special presentation, Simplifying Hybrid Cloud brought to you by Cisco. We're here with Vikas Ratna who's the director of product management for UCS at Cisco and James Leach, who is director of business development at Cisco. Gents, welcome back to theCUBE, good to see you again. >> Hey, thanks for having us. >> Okay, Jim, let's start. We know that when it comes to navigating a transition to hybrid cloud, it's a complicated situation for a lot of customers, and as organizations as they hit the pavement for their hybrid cloud journeys, what are the most common challenges that they face? What are they telling you? How is Cisco, specifically UCS helping them deal with these problems? >> Well, you know, first I think that's a, you know, that's a great question. And you know, customer centric view is the way that we've taken, is kind of the approach we've taken from day one. Right? So I think that if you look at the challenges that we're solving for that our customers are facing, you could break them into just a few kind of broader buckets. The first would definitely be applications, right? That's the, that's where the rubber meets your proverbial road with the customer. And I would say that, you know, what we're seeing is, the challenges customers are facing within applications come from the the way that applications have evolved. So what we're seeing now is more data centric applications for example. Those require that we, you know, are able to move and process large data sets really in real time. And the other aspect of applications I think to give our customers kind of some, you know, pause some challenges, would be around the fact that they're changing so quickly. So the application that exists today or the day that they, you know, make a purchase of infrastructure to be able to support that application, that application is most likely changing so much more rapidly than the infrastructure can keep up with today. So, that creates some challenges around, you know, how do I build the infrastructure? How do I right size it without over provisioning, for example? But also, there's a need for some flexibility around life cycle and planning those purchase cycles based on the life cycle of the different hardware elements. And within the infrastructure, which I think is the second bucket of challenges, we see customers who are being forced to move away from the, like a modular or blade approach, which offers a lot of operational and consolidation benefits, and they have to move to something like a Rack server model for some applications because of these needs that these data centric applications have, and that creates a lot of you know, opportunity for siloing the infrastructure. And those silos in turn create multiple operating models within the, you know, a data center environment that, you know, again, drive a lot of complexity. So that, complexity is definitely the enemy here. And then finally, I think life cycles. We're seeing this democratization of processing if you will, right? So it's no longer just CPU focused, we have GPU, we have FPGA, we have, you know, things that are being done in storage and the fabrics that stitch them together that are all changing rapidly and have very different life cycles. So, when those life cycles don't align for a lot of our customers, they see a challenge in how they can manage this, you know, these different life cycles and still make a purchase without having to make too big of a compromise in one area or another because of the misalignment of life cycles. So, that is a, you know, kind of the other bucket. And then finally, I think management is huge, right? So management, you know, at its core is really right size for our customers and give them the most value when it meets the mark around scale and scope. You know, back in 2009, we weren't meeting that mark in the industry and UCS came about and took management outside the chassis, right? We put it at the top of the rack and that worked great for the scale and scope we needed at that time. However, as things have changed, we're seeing a very new scale and scope needed, right? So we're talking about a hybrid cloud world that has to manage across data centers, across clouds, and, you know, having to stitch things together for some of our customers poses a huge challenge. So there are tools for all of those operational pieces that touch the application, that touch the infrastructure, but they're not the same tool. They tend to be disparate tools that have to be put together. >> Right. >> So our customers, you know, don't really enjoy being in the business of, you know, building their own tools, so that creates a huge challenge. And one where I think that they really crave that full hybrid cloud stack that has that application visibility but also can reach down into the infrastructure. >> Right. You know Jim, I said in my open that you guys, Cisco sort of changed the server game with the original UCS, but the X-Series is the next generation, the generation for the next decade which is really important 'cause you touched on a lot of things, these data intensive workload, alternative processors to sort of meet those needs. The whole cloud operating model and hybrid cloud has really changed. So, how's it going with with the X-Series? You made a big splash last year, what's the reception been in the field? >> Actually, it's been great. You know, we're finding that customers can absolutely relate to our, you know, UCS X-Series story. I think that, you know, the main reason they relate to it is they helped create it, right? It was their feedback and their partnership that gave us really the, those problem areas, those areas that we could solve for the customer that actually add, you know, significant value. So, you know, since we brought UCS to market back in 2009, you know, we had this unique architectural paradigm that we created, and I think that created a product which was the fastest in Cisco history in terms of growth. What we're seeing now is X-Series is actually on a faster trajectory. So we're seeing a tremendous amount of uptake. We're seeing all, you know, both in terms of, you know, the number of customers, but also more importantly, the number of workloads that our customers are using, and the types of workloads are growing, right? So we're growing this modular segment that exist, not just, you know, bringing customers onto a new product, but we're actually bring them into the product in the way that we had envisioned, which is one infrastructure that can run any application and do it seamlessly. So we're really excited to be growing this modular segment. I think the other piece, you know, that, you know, we judge ourselves is, you know, sort of not just within Cisco, but also within the industry. And I think right now is a, you know, a great example, you know, our competitors have taken kind of swings and misses over the past five years at this, at a, you know, kind of the new next architecture. And, we're seeing a tremendous amount of growth even faster than any of our competitors have seen when they announced something that was new to this space. So, I think that the ground up work that we did is really paying off. And I think that what we're also seeing is it's not really a leap frog game, as it may have been in the past. X-Series is out in front today, and, you know, we're extending that lead with some of the new features and capabilities we have. So we're delivering on the story that's already been resonating with customers and, you know, we're pretty excited that we're seeing the results as well. So, as our competitors hit walls, I think we're, you know, we're executing on the plan that we laid out back in June when we launched X-Series to the world. And, you know, as we continue to do that, we're seeing, you know, again, tremendous uptake from our customers. >> So thank you for that Jim. So Vikas, I was just on Twitter just today actually talking about the gravitational pull, you've got the public clouds pulling CXOs one way and you know, on-prem folks pulling the other way and hybrid cloud. So, organizations are struggling with a lot of different systems and architectures and ways to do things. And I said that what they're trying to do is abstract all that complexity away and they need infrastructure to support that. And I think your stated aim is really to try to help with that confusion with the X series, right? I mean, so how so can you explain that? >> Sure. And, that's the right, the context that you built up right there Dave. If you walk into enterprise data center you'll see plethora of compute systems spread all across. Because, every application has its unique needs, and, hence you find drive node, drive-dense system, memory dense system, GPU dense system, core dense system, and variety of form factors, 1U, 2U, 4U, and, every one of them typically come with, you know, variety of adapters and cables and so forth. This creates the siloness of resources. Fabric is (indistinct), the adapter is (indistinct). The power and cooling implication. The Rack, you know, face challenges. And, above all, the multiple management plane that they come up with, which makes it very difficult for IT to have one common center policy, and enforce it all across, across the firmware and software and so forth. And then think about upgrade challenges of the siloness makes it even more complex as these go through the upgrade processes of their own. As a result, we observe quite a few of our customers, you know, really seeing an inter, slowness in that agility, and high burden in the cost of overall ownership. This is where with the X-Series powered by Intersight, we have one simple goal. We want to make sure our customers get out of that complexities. They become more agile, and drive lower TCOs. And we are delivering it by doing three things, three aspects of simplification. First, simplify their whole infrastructure by enabling them to run their entire workload on single infrastructure. An infrastructure which removes the siloness of form factor. An infrastructure which reduces the Rack footprint that is required. An infrastructure where power and cooling budgets are in the lower. Second, we want to simplify by delivering a cloud operating model, where they can and create the policy once across compute network storage and deploy it all across. And third, we want to take away the pain they have by simplifying the process of upgrade and any platform evolution that they're going to go through in the next two, three years. So that's where the focus is on just driving down the simplicity, lowering down their TCOs. >> Oh, that's key, less friction is always a good thing. Now, of course, Vikas we heard from the HyperFlex guys earlier, they had news not to be outdone. You have hard news as well. What innovations are you announcing around X-Series today? >> Absolutely. So we are following up on the exciting X-Series announcement that we made in June last year, Dave. And we are now introducing three innovation on X-Series with the goal of three things. First, expand the supported workload on X-Series. Second, take the performance to new levels. Third, dramatically reduce the complexities in the data center by driving down the number of adapters and cables that are needed. To that end, three new innovations are coming in. First, we are introducing the support for the GPU node using a cableless and very unique X-Fabric architecture. This is the most elegant design to add the GPUs to the compute node in the modular form factor. Thereby, our customers can now power in AI/ML workload, or any workload that need many more number of GPUs. Second, we are bringing in GPUs right onto the compute node, and thereby our customers can now fire up the accelerated VDI workload for example. And third, which is what you know, we are extremely proud about, is we are innovating again by introducing the fifth generation of our very popular unified fabric technology. With the increased bandwidth that it brings in, coupled with the local drive capacity and densities that we have on the compute node, our customers can now fire up the big data workload, the FCI workload, the SDS workload. All these workloads that have historically not lived in the modular form factor, can be run over there and benefit from the architectural benefits that we have. Second, with the announcement of fifth generation fabric, we've become the only vendor to now finally enable 100 gig end to end single port bandwidth, and there are multiple of those that are coming in there. And we are working very closely with our CI partners to deliver the benefit of these performance through our Cisco Validated Design to our CI franchise. And third, the innovations in the fifth gen fabric will again allow our customers to have fewer physical adapters made with ethernet adapter, made with power channel adapters, or made with, the other storage adapters. They've reduced it down and coupled with the reduction in the cable. So very, very excited about these three big announcements that we are making in this month's release. >> Great, a lot there, you guys have been busy, so thank you for that Vikas. So, Jim, you talked a little bit about the momentum that you have, customers are adopting, what problems are they telling you that X-Series addresses, and how do they align with where they want to go in the future? >> That's a great question. I think if you go back to, and think about some of the things that we mentioned before, in terms of the problems that we originally set out to solve, we're seeing a lot of traction. So what Vikas mentioned I think is really important, right? Those pieces that we just announced really enhance that story and really move again, to the, kind of, to the next level of taking advantage of some of these, you know, problem solving for our customers. You know, if you look at, you know, I think Vikas mentioned accelerated VDI. That's a great example. These are where customers, you know, they need to have this dense compute, they need video acceleration, they need tight policy management, right? And they need to be able to deploy these systems anywhere in the world. Well, that's exactly what we're hitting on here with X-Series right now. We're hitting the market in every single way, right? We have the highest compute config density that we can offer across the, you know, the very top end configurations of CPUs, and a lot of room to grow. We have the, you know, the premier cloud based management, you know, hybrid cloud suite in the industry, right? So check there. We have the flexible GPU accelerators that Vikas just talked about that we're announcing both on the system and also adding additional ones to the, through the use of the X-Fabric, which is really, really critical to this launch as well. And, you know, I think finally, the fifth generation of fabric interconnect and virtual interface card, and, intelligent fabric module go hand in hand in creating this 100 gig end to end bandwidth story, that we can move a lot of data. Again, you know, having all this performance is only as good as what we can get in and out of it, right? So giving customers the ability to manage it anywhere, to be able to get the bandwidth that they need, to be able to get the accelerators that are flexible that it fit exactly their needs, this is huge, right? This solves a lot of the problems we can tick off right away. With the infrastructure as I mentioned, X-Fabric is really critical here because it opens a lot of doors here, you know, we're talking about GPUs today, but in the future, there are other elements that we can disaggregate, like the GPUs that solve these life cycle mismanagement issues. They solve issues around the form factor limitations. It solves all these issues for like, it does for GPU we can do that with storage or memory in the future. So that's going to be huge, right? This is disaggregation that actually delivers, right? It's not just a gimmicky bar trick here that we're doing, this is something that customers can really get value out of day one. And then finally, I think the, you know, the future readiness here, you know, we avoid saying future proof because we're kind of embracing the future here. We know that not only are the GPUs going to evolve, the CPUs are going to evolve, the drives, you know, the storage modules are going to evolve. All of these things are changing very rapidly. The fabric that stitches them together is critical, and we know that we're just on the edge of some of the development that are coming with CXL, with some of the PCI Express changes that are coming in the very near future, so we're ready to go. And the X-Fabric is exactly the vehicle that's going to be able to deliver those technologies to our customers, right? Our customers are out there saying that, you know, they want to buy into to something like X-Series that has all the operational benefits, but at the same time, they have to have the comfort in knowing that they're protected against being locked out of some technology that's coming in the future, right? We want our customers to take these disruptive technologies and not be disrupted, but use them to disrupt their competition as well. So, you know, we're really excited about the pieces today, and, I think it goes a long way towards continuing to tell the customer benefit story that X-Series brings, and, you know, again, you know, stay tuned because it's going to keep getting better as we go. >> Yeah, a lot of headroom for scale and the management piece is key there. Just have time for one more question Vikas. Give us some nuggets on the roadmap. What's next for X-Series that we can look forward to? >> Absolutely Dave. As we talked about, and as Jim also hinted, this is a future ready architecture. A lot of focus and innovation that we are going through is about enabling our customers to seamlessly and painlessly adopt very disruptive hardware technologies that are coming up, no refund replace. And, there we are looking into, enabling the customer's journey as they transition from PCI generation four, to five to six without driven replace, as they embrace CXL without driven replace. As they embrace the newer paradigm of computing through the disaggregated memory, disaggregated PCIe or NVMe based dense drives, and so forth. We are also looking forward to X-Fabric next generation, which will allow dynamic assignment of GPUs anywhere within the chassis and much more. So this is again, all about focusing on the innovation that will make the enterprise data center operations a lot more simpler, and drive down the TCO by keeping them not only covered for today, but also for future. So that's where some of the focus is on Dave. >> Okay. Thank you guys we'll leave it there, in a moment, I'll have some closing thoughts. (upbeat music) We're seeing a major evolution, perhaps even a bit of a revolution in the underlying infrastructure necessary to support hybrid work. Look, virtualizing compute and running general purpose workloads is something IT figured out a long time ago. But just when you have it nailed down in the technology business, things change, don't they? You can count on that. The cloud operating model has bled into on-premises locations. And is creating a new vision for the future, which we heard a lot about today. It's a vision that's turning into reality. And it supports much more diverse and data intensive workloads and alternative compute modes. It's one where flexibility is a watch word, enabling change, attacking complexity, and bringing a management capability that allows for a granular management of resources at massive scale. I hope you've enjoyed this special presentation. Remember, all these videos are available on demand at thecube.net. And if you want to learn more, please click on the information link. Thanks for watching Simplifying Hybrid Cloud brought to you by Cisco and theCUBE, your leader in enterprise tech coverage. This is Dave Vellante, be well and we'll see you next time. (upbeat music)

>>Okay, let's start things off Didi Dasgupta is back on the cube to talk about how we're going to simplify hybrid cloud complexity. Didi. Welcome. Good to see you again. >>Hey Dave, thanks for having me. Good to see you again. >>Yeah, our pleasure here. Look, let's start with big picture. Talk about the trends you're seeing from your customers. >>Well, I think first off every customer, these days is a public cloud customer. They do have their on-premise data centers, but every customer is looking to move workloads, use services, cloud native services from the public cloud. I think that's, that's one of the big things that we're seeing while that is happening. We're also seeing a pretty dramatic evolution off the application landscape itself. You've got bare metal applications. You always have virtualized applications and then most modern applications are, are containerized and, you know, managed by Kubernetes. So I think we're seeing a big change in, in the application landscape as well, and probably, you know, triggered by the first two things that I mentioned, the execution venue of the applications, and then the applications themselves it's triggering the change in the it organizations in the development organizations and sort of not only how they work within their organizations, but how they work across all of these different organizations. So I think those are some of the big things that, that I hear about when I talk to customers. >>Well, so it's interesting. I often say Cisco kind of changed the game and in server and compute when it, when it developed the original UCS and you remember there were organizational considerations back then bringing together the server team and the networking team. And of course the, the storage team of, and now you mentioned Kubernetes, that is a total game changer with regard to whole the application development process. So you have to think about a new strategy in that regard. So how have you evolved your strategy? What is your strategy to help customers simplify, accelerate their hybrid cloud journey in that context? >>No, I think you're right back of the origins of UCS. I mean, we, you know, why the networking company builder server, well, we just enabled with the best networking technology. So do compute that and now doing something similar on the software, actually the managing software for our hyperconvergence, for our. And you know, we've been on this journey for about four years, but the software is called intersite. And, you know, we started out with intersite being just the element manager, the management software for Cisco's compute and hyperconverged devices, but then we've evolved it the last few years because we believe that the customer shouldn't have to manage a separate piece of software would do manage the hardware of the underlying hardware and then a separate tool to connect it to a public cloud. And then the third tool to do optimization, workload optimization or performance optimization or cost optimization, a fourth tool do now manage, you know, Kubernetes and like, not just in one, one cluster, one cloud, but multi cluster multicloud. >>They should not have to have a fifth tool that does goes into observability. Anyway, I can go on and on, but you get the idea. We wanted to bring everything onto that same platform that managed their infrastructure, but it's also the platform that enables the simplicity of hybrid cloud operations, automation. It's the same platform on which you can use to manage the Kubernetes infrastructure, Kubernetes clusters. I mean, whether it's on-prem or in the cloud. So overall that's the strategy, bring it to a single platform and a platform is a loaded word, but we'll get into that a little bit, you know, in this, in this conversation, but that's the overall strategy simplify? >>Well, you know, he brought a platform. I, I like to say platform beats products, but you know, there was a day and you could still point to some examples today in the it industry where, Hey, another tool we can monetize that and another one to solve a different problem. We can monetize that. And so tell me more about how intersite came about. You obviously sat back, you saw what your customers were going through. You said we can do better. So tell us the story there. >>Yeah, absolutely. So look, it started with, you know, three or four guys getting in a room and saying, look, we've had this, you know, management software, UCS manager, UCS director, and these are just the Cisco's management, you know, for our softwares, for our own platform. Then every company has their, their own flavor. We said, we, we took on this bold goal of like, we're not when we rewrite this or we improve on this, we're not going to just write another piece of software. We're going to create a cloud service, or we're going to create a SAS offering because the same in the infrastructure built by us, whether it's on networking or compute or the cyber talk software, how do our customers use it? Well, they use it to write and run their applications, their SAS services, every customer, every customer, every company today is a software company. >>They live and die by how their assets work or don't. And so we were like, we want to eat our own dog food here, right? We want to deliver this as a SAS offering. And so that's how it started being on this journey for about four years, tens of thousands of customers. But it, it was pretty big boat invasion. Cause you know, the big change with SAS is your, as you're familiar, Dave is the job of now managing this, this piece of software is not on the customer, it's on the vendor, right? This can never go down. We have a release every Thursday, new capabilities. And we've learned so much along the way, whether it's around scalability, reliability, working with our own company's security organizations on what can or cannot be in a SAS service. So again, it's just been a wonderful journey, but I wanted to point out that we are in some ways eating our own dog food. Cause we built a SAS application that helps other companies deliver their SAS applications. >>So Cisco, I look at Cisco's business model and I, I of course compare it to other companies in the infrastructure business and obviously a very profitable company or large company you're growing faster than, than, than most of the traditional competitors. And so that means that you have more to invest. You, you, you can, you can afford things like stock buybacks, and you can invest in R and D. You don't have to make those hard trade-offs that a lot of your competitors have to make. So It's never enough, right? Never enough. But, but, but in speaking of R and D and innovations that you're introducing, I'm specifically interested in, how are you dealing with innovations to help simplify hybrid cloud in the operations there and prove flexibility and things around cloud native initiatives as well? >>Absolutely. Absolutely. Well, look, I think one of the fundamentals where we're philosophically different from a lot of options that I see in the industry is we don't need to build everything ourselves. We don't, I just need to create a damn good platform with really good platform services, whether it's, you know, around search ability, whether it's around logging, whether it's around, you know, access control multi-tenants I need to create a really good platform and make it open. I do not need to go on a shopping spree to buy 17 and a half companies and then figure out how to stitch it all together because it's, it's almost impossible if it's impossible for us as a vendor, it's, it's three times more difficult, but for the customer who then has to consume it. So that was the philosophical difference in how we went about building in our sites. >>We've created a harden platform that's that's always on. Okay. And then you, then the magic starts happening. Then you get partners, whether it is, you know, infrastructure partners, like, you know, some of our storage partners like NetApp or your, or, you know, others who want to their conversion infrastructure is also to be managed or are there other SAS offerings, software vendors who have now become partners? Like we did not, we did not write Terraform, you know, but we partnered with Tashi and now, you know, Terraform services available on the intercept platform. We did not write all the algorithms for workload optimization between a public cloud and on-prem we partnered with a company called urbanomics. And so that's now an offering on the intercept platform. So that's where we're philosophically different and sort of, you know, w how we have gone about this. And it actually ducked a dovetails well into some of the new things that I want to talk about today, that we're announcing on the underside platform, where we're actually been announcing the ability to attach and, and be able to manage Kubernetes clusters, which are not on prem. They're actually on AWS, on Azure, soon coming on, on GC, on, on GKE as well. So it really doesn't matter. We're not telling a customer if you're comfortable building your applications and running Kubernetes clusters on, you know, in AWS or Azure, stay there, but in terms of monitoring, managing it, you can use in our site, since you're using it on prem, you can use that same piece of software to manage Kubernetes clusters in a public cloud, or even manage VMs in, in a, in an instance. >>So the fact that you could, you mentioned storage, pure net app. So it's intersite can manage that infrastructure. I remember the hot-seat deal. It caught my attention. And of course, a lot of companies want to partner with Cisco because you've got such a strong ecosystem, but I thought that was an interesting move Turbonomic. You mentioned. And now you're saying Kubernetes in the public cloud, so a lot different than it was 10 years ago. So my last question is, how do you see this hybrid cloud evolving? I mean, you had private cloud and you had public cloud, and it was kind of a tug of war there. We see these, these, these two worlds coming together. How will that evolve over the next few years? >>Well, I think it's, it's the evolution of the model and really look at know $2 or $3 depending on, you know, how you're keeping time. But I think one thing is become very clear. Again, we may be eating our own dog food. I mean, innercise is a hybrid cloud SAS applications that we've learned. Some of these lessons ourselves. One thing is referred that customers are looking for a consistent model, whether it's on the edge, on the polo public cloud, on-prem no data center doesn't matter. They're looking for a consistent model for operations, for governings or upgrades or liability. They're looking for a consistent operating model. What Mike is the law doesn't mean? I think there's going to be the rise of more custom plugs. It's still going to be hybrid. So obligations will want to reside wherever it makes most sense for them, which is data moving data is it's the most expensive thing. >>So it's going to be co-located with the data that's on the edge, on the edge colo public cloud doesn't matter, but you're basically going to see more customer droughts, more industry-specific clouds. You know, whether it's for finance or constipation or retail industry specific. I think sovereign is going to play a huge role, you know, today, if you look at the cloud providers, you know, American and Chinese companies that these, the rest of the world, when it comes to making good digital citizens, they're they're people and, you know, control. And the distributor cloud is also on edge is, is gonna be the next frontier. And so that's where we are trying to line up our strategy. And if I had to sum it up in one sentence, it's really your cloud, your way. Every customer is on a different journey that will have their choice of workloads, data, you know, uptime, reliability, concerns. That's really what, what we are returning any of our customers. >>You know, I think I agree with you that custom clouds. And I think what you're seeing is you said every company is a software company. Every company is also becoming a cloud company. They're building their own abstraction layers. They're connecting their on-prem to their, to their public cloud. They're doing that. They're, they're doing that across clouds. And they're looking for companies like Cisco to do the hard work. It give me an infrastructure layer that I can build value on top of, because I'm going to take my financial services business to my cloud model or my healthcare business. I don't want to mess around with it. I'm not going to develop, you know, custom infrastructure like an Amazon does. I'm going to look to Cisco in your R and D to do that. Do you buy that? >>Absolutely. I think, again, it goes back to what I was talking about with blacks. You got to get the world a solid open, flexible, and flexible in terms of the technology, flexible in how they want to consume it. Some customers are fine with a SAS software, but as I talk to, you know, my friends in the federal team, no, that does not work. So how they want to consume it. They want to, you know, a hundred percent, no sovereignty. We, we talked about. So, you know, job for a decent structure vendor like ourselves is to give the world an open platform, give them the knobs, give them the right API. But the last thing I will mention is, you know, there's still a place for innovation in hardware. Some of my colleagues are gonna engage me to some of those, you know, details, whether it's on our X series platform or HyperFlex, but it's really, it's going to, it's going to be software defined to SAS service and then, you know, give the world and open rock-solid platform, >>Got to run on something. All right. Thanks, Deedee. Always a pleasure to have you in the cube. Great to see you. >>You're >>Welcome. In a moment, I'll be back to dig into hyperconverged and where fits and how it may even help with addressing some of the supply chain challenges that we're seeing in the market today.

>>Welcome back. You're watching the cubes coverage of AWS 2021. We're here in the Venetian, formerly the sands convention center in Las Vegas. My name is Dave Volante. Really excited to have Bob bright tell here. He's the director of SAP global alliances at IBM and Manu.. I'm going to try that again. Pro boxcar, is that correct? Rebecca Head of Linux and IBM alliances at AWS Manu. I'm sorry for bashing your name, but at least I got it right, guys. Great to see you. Thanks for coming on. >>And I'm actually now AWS partnership. I had SAP before, so it's great. I first, my first reinvest, >>I have a old DNA title. That's great. That's why I was asking you about Philly before you don't have the accent though. Bob, >>I'm not a Philly native, so cowboy >>Because you have the SAP connection there. IBM, AWS. It's like, whoa, what's going on here? >>Well, maybe I'll start and then have my new, my new, make some comments. And I'll just start by just, uh, we're real excited to be here. IBM's a diamond sponsor at, at re-invent and it's great to be in person and really appreciate AWS being able to put this event on this week and get us back in person. It really makes a difference. And I know there's a lot of people virtually as well, but, um, IBM and AWS have worked together for a number of years. Uh, maybe we could characterize it more opportunistically, um, prior, but in the last 12, 18 months, I think there's been a lot of developments that have really made us come together strategically as partners. I know we'll talk a little bit about red hat during the course of the conversation, but with IBM's >>You say opportunities like you mean in the field and the more strategic >>Relationship or strategic and with IBM's open hybrid cloud strategy. And, uh, with so many of our clients preferring AWS is their cloud. Um, we are working together now to meet clients where they're at to help them get the value of the cloud. And we're talking a little bit about coming out of the pandemic before this. Um, and one of the things that we're seeing with our clients that IBM is a lot of that low hanging fruit. The cloud was achieved, maybe the lift and shift or doing some SAS based applications, but now it's even more important to rapidly adopt hybrid cloud and cloud technologies to provide your business with flexible innovation transformation, all of those things. So that's why it has been important for us to, to partner with AWS strategically. Um, our clients are telling us that when they do move those heavier workloads to the cloud and do it in a hybrid model, they see about two and a half times the value. >>So with that, our partnership is multi-dimensional, we're doing a lot with IBM consulting. My new we'll talk a little bit about IBM software and red hat. Just one example, Dave, with IBM consulting, we now are up to almost 10,000 certifications and 10 plus AWS competencies. So that competency chart that shows we're knocking them all out on the, on the checkerboard there to get them to IBM consulting competencies. And we just had the energy one announced this week. So IBM consulting is in area software's big too. In my news, been helping us with that part of the partner. >>Well, it's, you know, to your point, you can't pick whatever cliche you want. You can't fight fashion. The trend is your friend. You have a lot of, a lot of people want to be on AWS. So rather than fighting, oh, we have our own cloud. No, you've got to meet customers where they are, right >>David, this is where this takes us. You know, the analogy we use between Bob and I, IBM boss spoke about IBM consulting, which we know has been a strategic partnership for the last two, two and a half years. I think I'm going to share the best kept secret in the cloud phase right now. IBM software and AWS now are working together. The analogy we use is IBM software and AWS. I like peanut butter and jelly better together. And over the last 12 months, the two companies have accelerated working together around three key dimensions. Number one, around product, number two around making sure our customers, joint customers successful. And number three, around building a robust ecosystem of partners. One thing that we have realized is just helping customers modernize. Migrate is challenging. And on the product side, now we have about 15 products on AWS marketplace. >>I think about trusty or verify insecurity, cloud Pak for data, uh, uh, Cognos data DataStage over the next 12 months, we plan to land all of the cloud packs. These are containerized version of IBM software on AWS and the marketplace. In addition, many of our customers are now using the managed red hat, OpenShift servers. We launched it earlier in April. This year, we are seeing tremendous customer feedback, tremendous, uh, growth there that is also informing that customers really like the open shirt model managed services one-click deployment. And so our goal is over the next 12 months, launched many more IBM software as a managed service offering. So that's kind of like what we're doing on the product side, on the customer success. A great example is somebody is helping a big oil and gas customers managed with this energy transition that we're working through. Um, Schlumberger software around simulation runs on OpenShift on Amazon in a hybrid environment, especially critical as we have a lot of oil and gas data that needs to have maybe sit on premises, uh, because of data residency requirements. >>I think the third piece is around building an ecosystem of partners for our red hat OpenShift services, which we launched April. We already have 30 partners that are helping customers not only to modernize, but to migrate on AWS. We know modernization is challenging, moving to containers is difficult. So we need this robust ecosystem of partners and Bob and I, and you know, the IBM and AWS team are investing heavily. We have cash credit to do financial incentives plus also technical content so that our customers so that our partners can help customers to be successful. Yeah, >>So the cloud packs are cool. That makes a lot of sense. And now the acquisition of red hat makes it easier. It's a catalyst gets IBM, much more closely aligned to developers and it makes it easier for things like cloud packs to be migrated to the cloud and being running cloud native. How did that acquisition affect from your standpoint menu and Bob I'd love your thoughts and your relationship. >>The red hat acquisition by IBM is a net positive red hat. And AWS have been working together for 14 years now. And we have tens of thousands of customers that are running mission critical workloads, such as SAP, Oracle databases. And there's a lot of trust that is engendered by working in the field for 14 years, uh, supporting mission critical customers, mission critical workloads. And so that relationship has provided a lot of tailwinds to our partnership with IBM software. I think a lot of the stuff we spoke about a lot of the progress you've made in the last six to eight to 12 months, a big function is that the trust that we have engendered working together with red hat. >>Yeah. I'll add Dave that, um, I, I agree with my new comments on the red hat. Red hat really is the epitome of openness right. Of open source software and the history that Manu described with AWS, there has been excellent adoption of red hat on AWS, red hat, enterprise Linux, and then most recently, um, red hat OpenShift on AWS. And just to give another example to the ecosystem point, just this morning, red hat with IBM, with a major ISV named Solonus announced that Solonus will be running one of their key, uh, applications and releasing it on Rossa on AWS. And all this means for our clients is faster adoption and acceleration and being able to innovate, um, in a hybrid way. So that's really the value that red hat is helping, um, to bring to the table in our cloud packs are available on open shift and rose as an option as well. So we're excited about the red hat partnership. It's really essential to our partnership into our, our hybrid cloud strategy. >>You mentioned up front, you know, happy that AWS decided to have this show. Of course, a lot of people watching online and you can get massive scale online, but there's nothing like the live event, you know, and when you make announcements at a live event, there's a little buzz going on and you get feedback. So are you making any hard news here? What, what announcements can you >>Share? Yeah, well, the one we had, um, on, um, uh, Solonus earlier with red hat and to do roasts on top of red hat was one and there's just an advance of, um, of re-invent. Um, we announced something in the data and AI space. So that's another big area of our partnership is data and AI. So we're in, we announced that in the oil industry and in the, um, uh, in that area that we are partnering together with AWS to be able to get insights on data so that we could get clean and reusable energy solutions out there. And there's so much untapped data. We know data is such an important resource, that that's an area that we're going to partner on with our cloud Pak for data on AWS. And of course underlying everything is open shifts. So that's one big announcement. We're also doing a lot in security for IBM and my news has been working closely with this. So my new, I, I know you're close to the integrations we're doing with AWS. So I'll let you comment maybe on some of the things in security. >>I mean, everybody's a security company these days, right? I mean, >>And then we continue to work and making sure that a lot of the IBM security products are integrating with our native services. So the customers have a seamless experience. And as he you'll see a lot of the same investments happening over 2022 as we grow the >>Partnership. So what like a QRadar or something like that >>Are, for example, integrating with security hub. That would be great example. >>I mean, it's the, it's the number one topic for CEO's that has been for a while and still will be okay. So give us a little roadmap, you know, maybe Bob, you could start, where do you want to see this relationship go? Um, what can we expect in the, in the coming 12 months? Yeah, well, >>Again, we're super excited about our partnership with AWS. I think we're just scratching the surface of how we're going to add value to our clients on this, on this hybrid cloud journey that they're all going through. And IBM, and this has been in our financial reports and in our earnings and everything, we're investing over a billion dollars in the ecosystem. And so partners like AWS are critical to provide that platform of growth for our clients and innovation for our clients. So all of the things that I talked about in money talked about today, whether it be our IBM consulting capabilities or our IBM software, our red hat, we're going to continue to invest. We talked about the red hat acquisition. IBM has made a few other acquisitions that help drive this partnership and drive value to our clients for adoption, from Instana to Turbonomic X, to some really innovative cloud consulting companies like Knorr cloud in towels. So we're going to continue to make investments. And I think we're just on the tip of the iceberg and we invite everybody at re-invent, either in person, which is exciting or virtually to learn more about our partnership and how we can help you and my new, any additional comments to that. >>Thanks, Bob V have a golden child hair with red hat OpenShift on Amazon. That'd be launched in April. We are seeing tremendous customer adoption. So we suspect that in next year, we'll continue to see solid adoption around red hat OpenShift. That VocaliD is also informing how customers want a more native experience for IBM software on AWS. And so we, um, we are targeting to, to launch many more IBM software in a native format on edema. So that would be the big team for next year. Uh, in addition, again, I'll call to action to our partner community. There's a huge opportunity to help our joint customers to modernize and migrate on AWS via both IBM, AWS are leaning in, we have cash credit to give financial incentives to partners, to help our customers, to migrate and modernize as well as we are also creating a lot of technical content that is not freely available so that a lot of our partners can start this. IBM focus on AWS practice >>Guys. Thanks so much for coming on the cube. Congratulations, and look at, you know, I often say the next 10 years is not going to be like the last 10 years. The cloud is expanding is a really good example. So thank you for your time. Appreciate your time. All right. You're watching the cube, the leader in high tech coverage at AWS reinvent 2021

>> Voice Over: From around the globe. It's theCUBE with digital coverage of IBM Think 2021 brought to you by IBM. >> Okay. Welcome back everyone. To theCUBE's coverage of IBM Think 2021 virtual. I'm John Furrier, host of theCUBE. We've got a great segment here on the power of hybrid cloud and AI. And I'm excited to have Rob Thomas, Senior Vice President of IBM's cloud and Data platform, CUBE alumni. Been on going back years and years talking about data. Rob, great to see you, a leader at IBM. Thanks for joining. >> John. Great to see you hope everybody is safe and well and great to be with you again. >> Yeah, love the progress, love the Hybrid Cloud distributed computing, meets operating systems, meets modern applications at the center of it is the new cloud equation. And of course data continues to be the value proposition as the platform. And as you quoted many times and I love your favorite quote. There's no AI without IA. So you got to have the architecture. So that still rings true today and it's just so evergreen and so relevant and cooler than ever with machine learning and AI operations. So let's just jump in. IBM's announced, host a new products and updates at Think. Tell us what you're most excited about and what should people pay attention to. >> Maybe I'll connect two thoughts here. There is no AI without IA, still true today. Meaning, customers that want to do AI need an information architecture. There was an IDC report just last year that said, "Despite all the progress on data, still 90% of data in organizations is either unused or underutilized." So what's amazing is after all the time we've been talking John, we're still really just getting started. Then that kind of connects to another thought, which is I still believe that AI is not going to replace managers, but managers that use AI will replace the managers that do not. And I'd say that's the backdrop for all the announcements that we're doing this week. It's things like auto SQL. How do you actually automate the creation of SQL queries in a large distributed data warehouse? It's never been done before, now we're doing it. It's things like Watson Orchestrate which is super powers in the hands of any business user, just to ask for something to get done. Just ask for a task to get completed. Watson Orchestrator will do that for you. It's maximo mobile. So anybody working in the field now has access to an AI system on their device for how they're managing their assets. So this is all about empowering people and users that use these products are going to have an advantage over the users that are not, that's what I'm really excited about. >> So one of the things that's coming out as Cloud Pak for Data, AI powered automation these are kind of two that you kind of touched upon the SQL thing their. Cloud Pak is there, you got it for Data and this automation trend. What is that about? Why is it important? Can you share with us the relevance of those two things? >> Let's talk broadly about automation. There's two huge markets here. There's the market for RPA business process, $30 billion market. There's the market for AIOps, which is growing 22%, that's on its way to $40 billion. These are enormous markets. Probably the biggest bet IBM has made in the last year is in automation. Explicitly in Watson AIOps. Last June in Think we announced Watson AIOps, then we did the acquisition of Instana, then we announced our intent to acquire Turbonomic. At this point, we're the only company that has all the pieces for automating how you run your IT systems. That's what I mean when I say AIOps. So really pleased with the progress that we've made there. But again, we're just getting started. >> Yeah. Congratulations on the Turbonomic. I was just commenting on that when that announced. IBM buying into the Cloud and the Hybrid cloud is interesting because the shift has happened. It's Public Cloud, it's on premises as Edge. Those two things as a system, it's more important ever than the modernization of the apps that you guys are talking about and having the under the cover capabilities. So as Cloud and Data merge, this kind of control plane concept, this architecture, as you'd said IA. You can't have AI without IA. What is that architecture look like? Can you break down the elements of what's involved? I know there's predictive analytics, there's automation and security. What are the pillars of this architecture? What are the four concepts? If you can explain that. >> Yeah, let's start with the basics. So Hybrid Cloud is about you build your software runs once and you run it anywhere you want, any public cloud,any private cloud. That assumes containers are important to the future of software. We are a hundred percent convinced that is true. OpenShift is the platform that we build on and that many software companies in the world are now building on because it gives you portability for your applications. So then you start to think about if you have that common fabric for Hybrid Cloud, how do you deliver value to customers in addition to the platform? To me, that's four big things. It's automation, we talked about that. It's security, it's predictions. How do you actually make predictions on your data? And then it's modernization. Meaning, how do you actually help customers modernize their applications and get to the Cloud? So those are the things we always talk about, automate, secure, modernize, predict. I think those are the four most important things for every company that's thinking about Cloud and AI. >> Yeah, it's interesting. I love the security side is one of the big conversations in AIOps and day two operations or whatever it's called is shifting left, getting security into the Cloud native kind of development pipeline. But speaking of secure, you have a customer that was talking about this Dow Chemical. About IB empowering Dow zero trust architecture. Could you explain that deal and how that's working? Because that's again, huge enterprise customer, very big scale at scale, zero trust is big, part of it. What is this? >> Let's start with the basics. So what is zero trust mean? It means to have a secure business, you have to start with the assumption that nothing can be trusted. That means you have to think about all aspects of your security practice. How do you align on a security strategy? How do you protect your data assets? How do you manage security threats? So we always talk about a line, protect, manage back to modernize, which is how do you bring all your systems forward to do this? That's exactly what we're doing with the Dow as you heard in that session, which is they've kind of done that whole journey from how they built a security strategy that was designed with zero trust in mind, they're protecting data assets, they're managing cyber threats in real time with a relatively low number of false positives which are the issue that most companies have. They're a tremendous example of a company that jumped on this and has had a really big impact. And they've done it without interfering with their business operations, meaning anybody can lock everything down but then you can't really run your business if you're doing that. They've done it, I think in a really intelligent way. >> That's awesome. We always talk about the big waves. You always give great color commentary on the trends. Right now though, the tsunami seems to be a confluence of many things coming together. What are some of the big trends in waves you're seeing now specifically on the tech side, on the technology side, as well as the business side right now? 'Cause coming out of post COVID, it's pretty clear cloud-native is powering a new growth strategy for customers. Dow was one of them, you just commented on it but there's a bigger wave happening here, both on the tech theater and in the business theater. Can you share your views on and your opinions and envision on these trends? >> I think there's three profound trends that are actually pretty simple to understand. One is, technology is going to decentralize again. We've always gone from centralized architectures to decentralized. Mainframe was centralized, internet mobile decentralized. The first version of public cloud was centralized, meaning bringing everything to one place. Technology is decentralized and again, with Hybrid Cloud, with Edge, pretty straight forward I think that's a trend that we can ride and lead for the next decade. Next is around automation that we talked about. There was a McKinsey report that said, "120 billion hours a year are going to be automated with things like Watson Orchestrator, Watson AIOps." What we're doing around Cloud Pak for automation, we think that time is now. We think you can start to automate in your business today and you may have seen the--example where we're doing customer care and they're now automating 70% of their inbound customer inquiries. It's really amazing. And then the third is around data. The classical problem, I mentioned 90% is still unused or underutilized. This trend on data is not about to slow down because the data being collected is still multiplying 10 X every year and companies have to find a way to organize that data as they collected. So that's going to be a trend that continues. >> You know, I just kind of pinched myself sometimes and hearing you talk with some of our earlier conversations in theCUBE, people who have been on this data mindset have really been successful because it's evolving and growing and it's changing and it's adding more input into the system and the technology is getting better. There's more cloud scales. You mentioned automation and scale are huge. And I think this really kind of wakes everyone up. And certainly the pandemic has woken everyone up to the fact that this is driving new experiences for users and businesses, right? So this is, and then those experiences become expectations. This is the classic UX paradigm that grows from new things. So I got to ask you, with the pandemic what is the been the most compelling ways you seen people operate, create new expectations? Because new things are coming, new big things, and new incremental things are happening. So evolution and revolutionary capabilities. Can you share some examples and your thoughts? >> We've collected a decent bit of data on this. And what's interesting is how much AI has accelerated since the pandemic started. And it's really in five areas, it's customer care that we talked about, virtual agents, customer service, how you do that. It's employee experience. So somewhere to customer care but how do you take care of your employees using AI? Third is around AIOps, we talked about that. Fourth is around regulatory compliance and fifth is around financial planning and budgeting. These are the five major use cases of AI that are getting into production in companies over the last year that's going to continue to accelerate. So I think it's actually fairly clarifying now that we really understand these are the five big things. I encourage anybody watching, pick one of these, get started, then pick the second, then pick the third. If you are not doing all five of these, 12, 18, 24 months from now, you are going to be behind. >> So give us an example of some things that have surprised you in the pandemic and things that blew you away. Like, wow, I didn't see that coming. Can you share on things that you've seen evolve? Cause you're a year ahead of the business units of Cloud and Data, big part of IBM and you see customer examples. Just quickly share some notable use cases or just anecdotal examples of just things that jumped out at you that said, "Wow, that's going to be a double-down moment or that's not going to be anymore." Exposes, the pandemic exposes the good, bad and the ugly. I mean, people got caught off guard, some got a tailwind, some had a headwind, some are retooling. What's your thoughts on what you can you share any examples? >> Like everybody, many things have surprised me in the last year. I am encouraged at how fast many companies were able to adjust and adapt for this world. So that's a credit to all the resiliency that they built into their processes, their systems and their people over time. Related to that, the thing that really sticks out to me again, is this idea of using AI to serve your customers and to serve your employees. We had a hundred customers that went live with one of those two use cases in the first 35 days of the pandemic. Just think about that acceleration. I think without the pandemic, for those hundred it might've taken three years and it happened in 35 days. It's proof that the technology today is so powerful. Sometimes it just takes the initiative to get started and to do something. And all those companies have really benefited from this. So it's great to see. >> Great. Rob, great to have you on. Great to have your commentary on theCUBE. Could you just quickly share in 30 seconds, what is the most important thing people should pay attention to and Think this year from your perspective? What's the big aha moment that you think they could walk away with? >> We have intentionally made this a very technology centric event. Just go look at the demos, play with the technology. I think you will be impressed and start to see, let's say a bit of a new IBM in terms of how we're making technology accessible and easy for anybody to use. >> All right. Rob Thomas, Senior Vice President of IBM cloud and Data platform. Great to have you on and looking forward to seeing more of you this year and hopefully in person. Thanks for coming on theCUBE virtual. >> Thanks, John. >> Okay. I'm John Furrier with theCUBE. Keep coverage of IBM Think 2021. Thank you for watching. (soft music)

(soft music) >> Voice Over: From around the globe. It's theCUBE with digital coverage of IBM Think 2021 brought to you by IBM. >> Okay. Welcome back everyone. To theCUBE's coverage of IBM Think 2021 virtual. I'm John Furrier, host of theCUBE. We've got a great segment here on the power of hybrid cloud and AI. And I'm excited to have Rob Thomas, Senior Vice President of IBM's cloud and Data platform, CUBE alumni. Been on going back years and years talking about data. Rob, great to see you, a leader at IBM. Thanks for joining. >> John. Great to see you hope everybody is safe and well and great to be with you again. >> Yeah, love the progress, love the Hybrid Cloud distributed computing, meets operating systems, meets modern applications at the center of it is the new cloud equation. And of course data continues to be the value proposition as the platform. And as you quoted many times and I love your favorite quote. There's no AI without IA. So you got to have the architecture. So that still rings true today and it's just so evergreen and so relevant and cooler than ever with machine learning and AI operations. So let's just jump in. IBM's announced, host a new products and updates at Think. Tell us what you're most excited about and what should people pay attention to. >> Maybe I'll connect two thoughts here. There is no AI without IA, still true today. Meaning, customers that want to do AI need an information architecture. There was an IDC report just last year that said, "Despite all the progress on data, still 90% of data in organizations is either unused or underutilized." So what's amazing is after all the time we've been talking John, we're still really just getting started. Then that kind of connects to another thought, which is I still believe that AI is not going to replace managers, but managers that use AI will replace the managers that do not. And I'd say that's the backdrop for all the announcements that we're doing this week. It's things like auto SQL. How do you actually automate the creation of SQL queries in a large distributed data warehouse? It's never been done before, now we're doing it. It's things like Watson Orchestrate which is super powers in the hands of any business user, just to ask for something to get done. Just ask for a task to get completed. Watson Orchestrator will do that for you. It's Maximo Mbo. So anybody working in the field now has access to an AI system on their device for how they're managing their assets. So this is all about empowering people and users that use these products are going to have an advantage over the users that are not, that's what I'm really excited about. >> So one of the things that's coming out as Cloud Pak for Data, AI powered automation these are kind of two that you kind of touched upon the SQL thing their. Cloud Pak is there, you got it for Data and this automation trend. What is that about? Why is it important? Can you share with us the relevance of those two things? >> Let's talk broadly about automation. There's two huge markets here. There's the market for RPA business process, $30 billion market. There's the market for AIOps, which is growing 22%, that's on its way to $40 billion. These are enormous markets. Probably the biggest bet IBM has made in the last year is in automation. Explicitly in Watson AIOps. Last June in Think we announced Watson AIOps, then we did the acquisition of Instana, then we announced our intent to acquire Turbonomic. At this point, we're the only company that has all the pieces for automating how you run your IT systems. That's what I mean when I say AIOps. So really pleased with the progress that we've made there. But again, we're just getting started. >> Yeah. Congratulations on the Turbonomic. I was just commenting on that when that announced. IBM buying into the Cloud and the Hybrid cloud is interesting because the shift has happened. It's Public Cloud, it's on premises as Edge. Those two things as a system, it's more important ever than the modernization of the apps that you guys are talking about and having the under the cover capabilities. So as Cloud and Data merge, this kind of control plane concept, this architecture, as you'd said IA. You can't have AI without IA. What is that architecture look like? Can you break down the elements of what's involved? I know there's predictive analytics, there's automation and security. What are the pillars of this architecture? What are the four concepts? If you can explain that. >> Yeah, let's start with the basics. So Hybrid Cloud is about you build your software runs once and you run it anywhere you want, any public cloud,any private cloud. That assumes containers are important to the future of software. We are a hundred percent convinced that is true. OpenShift is the platform that we build on and that many software companies in the world are now building on because it gives you portability for your applications. So then you start to think about if you have that common fabric for Hybrid Cloud, how do you deliver value to customers in addition to the platform? To me, that's four big things. It's automation, we talked about that. It's security, it's predictions. How do you actually make predictions on your data? And then it's modernization. Meaning, how do you actually help customers modernize their applications and get to the Cloud? So those are the things we always talk about, automate, secure, modernize, predict. I think those are the four most important things for every company that's thinking about Cloud and AI. >> Yeah, it's interesting. I love the security side is one of the big conversations in AIOps and day two operations or whatever it's called is shifting left, getting security into the Cloud native kind of development pipeline. But speaking of secure, you have a customer that was talking about this Dow Chemical. About IB empowering Dow zero trust architecture. Could you explain that deal and how that's working? Because that's again, huge enterprise customer, very big scale at scale, zero trust is big, part of it. What is this? >> Let's start with the basics. So what is zero trust mean? It means to have a secure business, you have to start with the assumption that nothing can be trusted. That means you have to think about all aspects of your security practice. How do you align on a security strategy? How do you protect your data assets? How do you manage security threats? So we always talk about a line, protect, manage back to modernize, which is how do you bring all your systems forward to do this? That's exactly what we're doing with the Dow as you heard in that session, which is they've kind of done that whole journey from how they built a security strategy that was designed with zero trust in mind, they're protecting data assets, they're managing cyber threats in real time with a relatively low number of false positives which are the issue that most companies have. They're a tremendous example of a company that jumped on this and has had a really big impact. And they've done it without interfering with their business operations, meaning anybody can lock everything down but then you can't really run your business if you're doing that. They've done it, I think in a really intelligent way. >> That's awesome. We always talk about the big waves. You always give great color commentary on the trends. Right now though, the tsunami seems to be a confluence of many things coming together. What are some of the big trends in waves you're seeing now specifically on the tech side, on the technology side, as well as the business side right now? 'Cause coming out of post COVID, it's pretty clear cloud-native is powering a new growth strategy for customers. Dow was one of them, you just commented on it but there's a bigger wave happening here, both on the tech theater and in the business theater. Can you share your views on and your opinions and envision on these trends? >> I think there's three profound trends that are actually pretty simple to understand. One is, technology is going to decentralize again. We've always gone from centralized architectures to decentralized. Mainframe was centralized, internet mobile decentralized. The first version of public cloud was centralized, meaning bringing everything to one place. Technology is decentralized and again, with Hybrid Cloud, with Edge, pretty straight forward I think that's a trend that we can ride and lead for the next decade. Next is around automation that we talked about. There was a McKinsey report that said, "120 billion hours a year are going to be automated with things like Watson Orchestrator, Watson AIOps." What we're doing around Cloud Pak for automation, we think that time is now. We think you can start to automate in your business today and you may have seen the C QVS example where we're doing customer care and they're now automating 70% of their inbound customer inquiries. It's really amazing. And then the third is around data. The classical problem, I mentioned 90% is still unused or underutilized. This trend on data is not about the slow down because the data being collected is still multiplying 10 X every year and companies have to find a way to organize that data as they collected. So that's going to be a trend that continues. >> You know, I just kind of pinched myself sometimes and hearing you talk with some of our earlier conversations in theCUBE, people who have been on this data mindset have really been successful because it's evolving and growing and it's changing and it's adding more input into the system and the technology is getting better. There's more cloud scales. You mentioned automation and scale are huge. And I think this really kind of wakes everyone up. And certainly the pandemic has woken everyone up to the fact that this is driving new experiences for users and businesses, right? So this is, and then those experiences become expectations. This is the classic UX paradigm that grows from new things. So I got to ask you, with the pandemic what is the been the most compelling ways you seen people operate, create new expectations? Because new things are coming, new big things, and new incremental things are happening. So evolution and revolutionary capabilities. Can you share some examples and your thoughts? >> We've collected a decent bit of data on this. And what's interesting is how much AI has accelerated since the pandemic started. And it's really in five areas, it's customer care that we talked about, virtual agents, customer service, how you do that. It's employee experience. So somewhere to customer care but how do you take care of your employees using AI? Third is around AIOps, we talked about that. Fourth is around regulatory compliance and fifth is around financial planning and budgeting. These are the five major use cases of AI that are getting into production in companies over the last year that's going to continue to accelerate. So I think it's actually fairly clarifying now that we really understand these are the five big things. I encourage anybody watching, pick one of these, get started, then pick the second, then pick the third. If you are not doing all five of these, 12, 18, 24 months from now, you are going to be behind. >> So give us an example of some things that have surprised you in the pandemic and things that blew you away. Like, wow, I didn't see that coming. Can you share on things that you've seen evolve? Cause you're a year ahead of the business units of Cloud and Data, big part of IBM and you see customer examples. Just quickly share some notable use cases or just anecdotal examples of just things that jumped out at you that said, "Wow, that's going to be a double-down moment or that's not going to be anymore." Exposes, the pandemic exposes the good, bad and the ugly. I mean, people got caught off guard, some got a tailwind, some had a headwind, some are retooling. What's your thoughts on what you can you share any examples? >> Like everybody, many things have surprised me in the last year. I am encouraged at how fast many companies were able to adjust and adapt for this world. So that's a credit to all the resiliency that they built into their processes, their systems and their people over time. Related to that, the thing that really sticks out to me again, is this idea of using AI to serve your customers and to serve your employees. We had a hundred customers that went live with one of those two use cases in the first 35 days of the pandemic. Just think about that acceleration. I think without the pandemic, for those hundred it might've taken three years and it happened in 35 days. It's proof that the technology today is so powerful. Sometimes it just takes the initiative to get started and to do something. And all those companies have really benefited from this. So it's great to see. >> Great. Rob, great to have you on. Great to have your commentary on theCUBE. Could you just quickly share in 30 seconds, what is the most important thing people should pay attention to and Think this year from your perspective? What's the big aha moment that you think they could walk away with? >> We have intentionally made this a very technology centric event. Just go look at the demos, play with the technology. I think you will be impressed and start to see, let's say a bit of a new IBM in terms of how we're making technology accessible and easy for anybody to use. >> All right. Rob Thomas, Senior Vice President of IBM cloud and Data platform. Great to have you on and looking forward to seeing more of you this year and hopefully in person. Thanks for coming on theCUBE virtual. >> Thanks, John. >> Okay. I'm John Furrier with theCUBE. Keep coverage of IBM Think 2021. Thank you for watching. (soft music)

>> Announcer: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> As you may recall, coming into the second part of 2019 we reported, based on ETR Survey data, that there was a narrowing of spending on emerging tech and an unplugging of a lot of legacy systems. This was really because people were going from experimentation into operationalizing their digital initiatives. When COVID hit, conventional wisdom suggested that there would be a flight to safety. Now, interestingly, we reported with Eric Bradley, based on one of the Venns, that a lot of CIOs were still experimenting with emerging vendors. But this was very anecdotal. Today, we have more data, fresh data, from the ETR Emerging Technology Study on private companies, which really does suggest that there's a notable decline in experimentation, and that's affecting emerging technology vendors. Hi, everybody, this is Dave Vellante, and welcome to this week's Wikibon Cube Insights, powered by ETR. Once again, Sagar Kadakia is joining us. Sagar is the Director of Research at ETR. Sagar, good to see you. Thanks for coming on. >> Good to see you again. Thanks for having me, Dave. >> So, it's really important to point out, this Emerging Tech Study that you guys do, it's different from your quarterly Technology Spending Intention Survey. Take us through the methodology. Guys, maybe you could bring up the first chart. And, Sagar, walk us through how you guys approach this. >> No problem. So, a lot of the viewers are used to seeing a lot of the results from the Technology Spending Intention Survey, or the TSIS, as we call it. That study, as the title says, it really tracks spending intentions on more pervasive vendors, right, Microsoft, AWS, as an example. What we're going to look at today is our Emerging Technology Study, which we conduct biannually, in May and November. This study is a little bit different. We ask CIOs around evaluations, awareness, planned evaluations, so think of this as pre-spend, right. So that's a major differentiator from the TSIS. That, and this study, really focuses on private emerging providers. We're really only focused on those really emerging private companies, say, like your Series B to Series G or H, whatever it may be, so, two big differences within those studies. And then today what we're really going to look at is the results from the Emerging Technology Study. Just a couple of quick things here. We had 811 CIOs participate, which represents about 380 billion in annual IT spend, so the results from this study matter. We had almost 75 Fortune 100s take it. So, again, we're really measuring how private emerging providers are doing in the largest organizations. And so today we're going to be reviewing notable sectors, but largely this survey tracks roughly 356 private technologies and frameworks. >> All right, guys, bring up the pie chart, the next slide. Now, Sagar, this is sort of a snapshot here, and it basically says that 44% of CIOs agree that COVID has decreased the organization's evaluation and utilization of emerging tech, despite what I mentioned, Eric Bradley's Venn, which suggested one CIO in particular said, "Hey, I always pick somebody in the lower left "of the magic quadrant." But, again, this is a static view. I know we have some other data, but take us through this, and how this compares to other surveys that you've done. >> No problem. So let's start with the high level takeaways. And I'll actually kind of get into to the point that Eric was debating, 'cause that point is true. It's just really how you kind of slice and dice the data to get to that. So, what you're looking at here, and what the overall takeaway from the Emerging Technology Study was, is, you know, you are going to see notable declines in POCs, of proof-of-concepts, any valuations because of COVID-19. Even though we had been communicating for quite some time, you know, the last few months, that there's increasing pressure for companies to further digitize with COVID-19, there are IT budget constraints. There is a huge pivot in IT resources towards supporting remote employees, a decrease in risk tolerance, and so that's why what you're seeing here is a rather notable number of CIOs, 44%, that said that they are decreasing their organization's evaluation and utilization of private emerging providers. So that is notable. >> Now, as you pointed out, you guys run this survey a couple of times a year. So now let's look at the time series. Guys, if you bring up the next chart. We can see how the sentiment has changed since last year. And, of course, we're isolating here on some of larger companies. So, take us through what this data means. >> No problem. So, how do we quantify what we just saw in the prior slide? We saw 44% of CIOs indicating that they are going to be decreasing their evaluations. But what exactly does that mean? We can pretty much determine that by looking at a lot of the data that we captured through our Emerging Technology Study. There's a lot going on in this slide, but I'll walk you through it. What you're looking at here is Fortune 1000 organizations, so we've really isolated the data to those organizations that matter. So, let's start with the teal, kind of green line first, because I think it's a little bit easier to understand. What you're looking at, Fortune 1000 evaluations, both planned and current, okay? And you're looking at a time series, one year ago and six months ago. So, two of the answer options that we provide CIOs in this survey, right, think about the survey as a grid, where you have seven answer options going horizontally, and then 300-plus vendors and technologies going vertically. For any given vendor, they can essentially indicate one of these options, two of them being on currently evaluating them or I plan to evaluate them in six months. So what you're looking at here is effectively the aggregate number, or the average number of Fortune 1000 evaluations. So if you look into May 2019, all the way on the left of that chart, that 24% roughly means that a quarter of selections made by Fortune 1000 of the survey, they selected plan to evaluate or currently evaluating. If you fast-forward six months, to the middle of the chart, November '19, it's roughly the same, one in four technologies that are Fortune 1000 selected, they indicated that I plan or am currently evaluating them. But now look at that big drop off going into May 2020, the 17%, right? So now one out of every six technologies, or one out of every selections that they made was an evaluation. So a very notable drop. And then if you look at the blue line, this is another answer option that we provided CIOs: I'm aware of the technology but I have no plans to evaluate. So this answer option essentially tracks awareness levels. If you look at the last six months, look at that big uptick from 44% to over 50%, right? So now, essentially one out of every two technologies, or private technologies that a CIO is aware of, they have no plans to evaluate. So this is going to have an impact on the general landscape, when we think about those private emerging providers. But there is one caveat, and, Dave, this is what you mentioned earlier, this is what Eric was talking about. The providers that are doing well are the ones that are work-from-home aligned. And so, just like a few years ago, we were really analyzing results based on are you cloud-native or are you Cloud-aligned, because those technologies are going to do the best, what we're seeing in the emerging space is now the same thing. Those emerging providers that enable organizations to maintain productivity for their employees, essentially allowing their employees to work remotely, those emerging providers are still doing well. And that is probably the second biggest takeaway from this study. >> So now what we're seeing here is this flight to perceive safety, which, to your point, Sagar, doesn't necessarily mean good news for all enterprise tech vendors, but certainly for those that are positioned for the work-from-home pivot. So now let's take a look at a couple of sectors. We'll start with information security. We've reported for years about how the perimeter's been broken down, and that more spend was going to shift from inside the moat to a distributed network, and that's clearly what's happened as a result of COVID. Guys, if you bring up the next chart. Sagar, you take us through this. >> No problem. And as you imagine, I think that the big theme here is zero trust. So, a couple of things here. And let me just explain this chart a little bit, because we're going to be going through a couple of these. What you're seeing on the X-axis here, is this is effectively what we're classifying as near term growth opportunity from all customers. The way we measure that effectively is we look at all the evaluations, current evaluations, planned evaluations, we look at people who are evaluated and plan to utilize these vendors. The more indications you get on that the more to the top right you're going to be. The more indications you get around I'm aware of but I don't plan to evaluate, or I'm replacing this early-stage vendor, the further down and on the left you're going to be. So, on the X-axis you have near term growth opportunity from all customers, and on the Y-axis you have near term growth opportunity from, really, the biggest shops in the world, your Global 2000, your Forbes Private 225, like Cargill, as an example, and then, of course, your federal agencies. So you really want to be positioned up and to the right here. So, the big takeaway here is zero trust. So, just a couple of things on this slide when we think about zero trust. As organizations accelerate their Cloud and Saas spend because of COVID-19, and, you know, what we were talking about earlier, Dave, remote work becomes the new normal, that perimeter security approach is losing appeal, because the perimeter's less defined, right? Apps and data are increasingly being stored in the Cloud. That, and employees are working remotely from everywhere, and they're accessing all of these items. And so what we're seeing now is a big move into zero trust. So, if we look at that chart again, what you're going to see in that upper right quadrant are a lot of identity and access management players. And look at the bifurcation in general. This is what we were talking about earlier in terms of the landscape not doing well. Most security vendors are in that red area, you know, in the middle to the bottom. But if you look at the top right, what are you seeing here? Unify ID, Auth0, WSO2, right, all identity and access management players. These are critical in your zero trust approach, and this is one of the few area where we are seeing upticks. You also see here BitSight, Lucideus. So that's going to be security assessment. You're seeing VECTRA and Netskope and Darktrace, and a few others here. And Cloud Security and IDPS, Intrusion Detection and Prevention System. So, very few sectors are seeing an uptick, very few security sectors actually look pretty good, based on opportunities that are coming. But, essentially, all of them are in that work-from-home aligned security stack, so to speak. >> Right, and of course, as we know, as we've been reporting, buyers have options, from both established companies and these emerging companies that are public, Okta, CrowdStrike, Zscaler. We've seen the work-from-home pivot benefit those guys, but even Palo Alto Networks, even CISCO, I asked (other speaker drowns out speech) last week, I said, "Hey, what about this pivot to work from home? "What about this zero trust?" And he said, "Look, the reality is, yes, "a big part of our portfolio is exposed "to that traditional infrastructure, "but we have options for zero trust as well." So, from a buyer's standpoint, that perceived flight to safety, you have a lot of established vendors, and that clearly is showing up in your data. Now, the other sector that we want to talk about is database. We've been reporting a lot on database, data warehouse. So, why don't you take us through the next graphic here, if you would. >> Sagar: No problem. So, our theme here is that Snowflake is really separating itself from the pack, and, again, you can see that here. Private database and data warehousing vendors really continue to impact a lot of their public peers, and Snowflake is leading the way. We expect Snowflake to gain momentum in the next few years. And, look, there's some rumors that IPOing soon. And so when we think about that set-up, we like it, because as organizations transition away from hybrid Cloud architectures to 100% or near-100% public Cloud, Snowflake is really going to benefit. So they look good, their data stacks look pretty good, right, that's resiliency, redundancy across data centers. So we kind of like them as well. Redis Labs bring a DB and they look pretty good here on the opportunity side, but we are seeing a little bit of churn, so I think probably Snowflake and DataStax are probably our two favorites here. And again, when you think about Snowflake, we continue to think more pervasive vendors, like Paradata and Cloudera, and some of the other larger database firms, they're going to continue seeing wallet and market share losses due to some of these emerging providers. >> Yeah. If you could just keep that slide up for a second, I would point out, in many ways Snowflake is kind of a safer bet, you know, we talk about flight to safety, because they're well-funded, they're established. You can go from zero to Snowflake very quickly, that's sort of their mantra, if you will. But I want to point out and recognize that it is somewhat oranges and tangerines here, Snowflake being an analytical database. You take MariaDB, for instance, I look at that, anyway, as relational and operational. And then you mentioned DataStax. I would say Couchbase, Redis Labs, Aerospike. Cockroach is really a... EValue Store. You've got some non-relational databases in there. But we're looking at the entire sector of databases, which has become a really interesting market. But again, some of those established players are going to do very well, and I would put Snowflake on that cusp. As you pointed out, Bloomberg broke the story, I think last week, that they were contemplating an IPO, which we've known for a while. >> Yeah. And just one last thing on that. We do like some of the more pervasive players, right. Obviously, AWS, all their products, Redshift and DynamoDB. Microsoft looks really good. It's just really some of the other legacy ones, like the Teradatas, the Oracles, the Hadoops, right, that we are going to be impacted. And so the claw providers look really good. >> So, the last decade has really brought forth this whole notion of DevOps, infrastructure as code, the whole API economy. And that's the piece we want to jump into now. And there are some real stand-outs here, you know, despite the early data that we showed you, where CIOs are less prone to look at emerging vendors. There are some, for instance, if you bring up the next chart, guys, like Hashi, that really are standing out, aren't they? >> That's right, Dave. So, again, what you're seeing here is you're seeing that bifurcation that we were talking about earlier. There are a lot of infrastructure software vendors that are not positioned well, but if you look at the ones at the top right that are positioned well... We have two kind of things on here, starting with infrastructure automation. We think a winner here is emerging with Terraform. Look all the way up to the right, how well-positioned they are, how many opportunities they're getting. And for the second straight survey now, Terraform is leading along their peers, Chef, Puppet, SaltStack. And they're leading their peers in so many different categories, notably on allocating more spend, which is obviously very important. For Chef, Puppet and SaltStack, which you can see a little bit below, probably a little bit higher than the middle, we are seeing some elevator churn levels. And so, really, Terraform looks like they're kind of separating themselves. And we've got this great quote from the CIO just a few months ago, on why Terraform is likely pulling away, and I'll read it out here quickly. "The Terraform tool creates "an entire infrastructure in a box. "Unlike vendors that use procedural languages, "like Ants, Bull and Chef, "it will show you the infrastructure "in the way you want it to be. "You don't have to worry about "the things that happen underneath." I know some companies where you can put your entire Amazon infrastructure through Terraform. If Amazon disappears, if your availability drops, load balancers, RDS, everything, you just run Terraform and everything will be created in 10 to 15 minutes. So that shows you the power of Terraform and why we think it's ranked better than some of the other vendors. >> Yeah, I think that really does sum it up. And, actually, guys, if you don't mind bringing that chart back up again. So, a point out, so, Mitchell Hashimoto, Hashi, really, I believe I'm correct, talking to Stu about this a little bit, he sort of led the Terraform project, which is an Open Source project, and, to your point, very easy to deploy. Chef, Puppet, Salt, they were largely disrupted by Cloud, because they're designed to automate deployment largely on-prem and DevOps, and now Terraform sort of packages everything up into a platform. So, Hashi actually makes money, and you'll see it on this slide, and things, Vault, which is kind of their security play. You see GitLab on here. That's really application tooling to deploy code. You see Docker containers, you know, Docker, really all about open source, and they've had great adoption, Docker's challenge has always been monetization. You see Turbonomic on here, which is application resource management. You can't go too deep on these things, but it's pretty deep within this sector. But we are comparing different types of companies, but just to give you a sense as to where the momentum is. All right, let's wrap here. So maybe some final thoughts, Sagar, on the Emerging Technology Study, and then what we can expect in the coming month here, on the update in the Technology Spending Intention Study, please. >> Yeah, no problem. One last thing on the zero trust side that has been a big issue that we didn't get to cover, is VPN spend. Our data is pointing that, yes, even though VPN spend did increase the last few months because of remote work, we actually think that people are going to move away from that as they move onto zero trust. So just one last point on that, just in terms of overall thoughts, you know, again, as we cover it, you can see how bifurcated all these spaces are. Really, if we were to go sector by sector by sector, right, storage and block chain and MLAI and all that stuff, you would see there's a few or maybe one or two vendors doing well, and the majority of vendors are not seeing as many opportunities. And so, again, are you work-from-home aligned? Are you the best vendor of all the other emerging providers? And if you fit those two criteria then you will continue seeing POCs and evaluations. And if you don't fit that criteria, unfortunately, you're going to see less opportunities. So think that's really the big takeaway on that. And then, just in terms of next steps, we're already transitioning now to our next Technology Spending Intention Survey. That launched last week. And so, again, we're going to start getting a feel for how CIOs are spending in 2H-20, right, so, for the back half of the year. And our question changes a little bit. We ask them, "How do you plan on spending in the back half year "versus how you actually spent "in the first half of the year, or 1H-20?" So, we're kind of, tighten the screw, so to speak, and really getting an idea of what's spend going to look like in the back half, and we're also going to get some updates as it relates to budget impacts from COVID-19, as well as how vendor-relationships have changed, as well as business impacts, like layoffs and furloughs, and all that stuff. So we have a tremendous amount of data that's going to be coming in the next few weeks, and it should really prepare us for what to see over the summer and into the fall. >> Yeah, very excited, Sagar, to see that. I just wanted to double down on what you said about changes in networking. We've reported with you guys on NPLS networks, shifting to SD-WAN. But even VPN and SD-WAN are being called into question as the internet becomes the new private network. And so lots of changes there. And again, very excited to see updated data, return of post-COVID, as we exit this isolation economy. Really want to point out to folks that this is not a snapshot survey, right? This is an ongoing exercise that ETR runs, and grateful for our partnership with you guys. Check out ETR.plus, that's the ETR website. I publish weekly on Wikibon.com and SiliconANGLE.com. Sagar, thanks so much for coming on. Once again, great to have you. >> Thank you so much, for having me, Dave. I really appreciate it, as always. >> And thank you for watching this episode of theCube Insights, powered by ETR. This Dave Vellante. We'll see you next time. (gentle music)

>> From the Silicon Angle Media Office in Boston, Massachusetts, it's the Cube. Now here's your host Stu Miniman. >> Hi, I'm Stu Miniman and welcome to the Cube's Boston area studio. This is a Cube conversation. Happy to welcome to the program first time guest Benjamin Nye, CEO of Turbonomic, a Boston-based company. Ben, thanks so much for joining us. >> Stu, thanks for having me. >> Alright Ben, so as we say, we are fortunate to live in interesting times in our industry. Distributed architectures are what we're all working on, but at the same day, there's a lot of consolidation going on. You know, just put this in context. Just in recent past, IBM spent 34 billion dollars to buy Red Hat. And the reason I bring that up is a lot of people talk about you know, it's a hybrid multi-cloud world. What's going on? The thing I've been saying for a couple of years is as users, two things you need to watch. Care about their data an awful lot. That's what drives businesses. And what drives the data really? It's their applications. >> Perfect. >> And that's where Turbonomic sits. Workload automation is where you are. And that's really the important piece of multi-cloud. Maybe give our audience a little bit of context as to why this really, IBM buying Red Hat fits into the general premise of why Turbonomic exists. >> Super. So the IBM Red Hat combination I think is really all about managing workloads. Turbonomic has always been about managing workloads and actually Red Hat was an investor, is an investor in Turbonomic, particularly for open stack, but more importantly open shift now. When you think about the plethora of workloads, we're gonna have 10 to one number of workloads relative to VMs and so worth when you look at microservices and containers. So when you think about that combination, it's really, it's an important move for IBM and their opportunity to plan hybrid and multi-cloud. They just announced the IBM multi-cloud manager, and then they said wait a minute, we gotta get this thing to scale. Obviously open shift and Red Hat is scale. 8.9 million developers in their community and the opportunity to manage those workloads across on-prim and off in a cloud-native format is critical. So relate that to Turbo. Turbo is really about managing any workload in any environment anywhere at all times. And so we make workloads smart, which is self-managing anywhere real time, which allows the workloads themselves to care for their own performance assurance, policy adherence, and cost effectiveness. And when you can do that, then they can run anywhere. That's what we do. >> Yeah, Ben, bring us inside of customers. When people hear applications and multi-cloud, there was the original thing. Oh well, I'm gonna be able to burst to the cloud. I'm gonna be moving things all the time. Applications usually have data behind them. There's gravity, it's not easy to move them. But I wanna be able to have that flexibility of if I choose a platform, if I move things around, I think back to the storage world. Migration was one of the toughest things out there and something that I spent the most time and energy to constantly deal with. What do you see today when it comes to those applications? How do they think about them? Do they build them one place and they're static? Is it a little bit more modular now when you go to microservices? What do you see and hear? >> Great, so we have over 2,100 accounts today including 20% of the Fortune 500, so a pretty good sample set to be able to describe this. What I find is that CIOs today and meet with many of them, I want either born in the cloud, migrate to the cloud, or run my infrastructure as cloud. And what they mean is they want, they're seeking greater agility and elasticity than they've ever had. And workloads thrive in that environment. So as we decompose the applications and decompose the infrastructure and open it up, there's now more places to run those different workloads and they seek the flexibility to be able to create applications much more quickly, set up environments a lot faster, and then they're more than happy to pay for what they use. But they get tired of the waste candidly of the traditional legacy environments. And so there's a constant evolution for how do I take those workloads and distribute them to the proper location for them to run most performantly, most cost effectively, and obviously with all the compliance requirements of security and data today. >> Yeah, I'm wondering if you could help connect the dots for us. In the industry, we talk a lot about digital transformation. >> Yeah. >> If we said two or three years ago was a lot of buzz around this, when I talk to N users today, it's reality. Absolutely, it's not just, oh I need to be mobile and online and everything. What do you hear and how do my workloads fit into that discussion? >> So it's an awesome subject. When you think about what's going on in the industry today, it's the largest and fastest re-platforming of IT ever. Okay, so when you think about for example at the end of 2017, take away dollars and focus on workloads. There were 220 million workloads. 80% were still on prim. For all the growth in the cloud, it was still principally an on prim market. When you look now forward, the differential growth rates, 63% average growth across the cloud vendors, alright, in the IAS market. And I'm principally focused on AWS and Ajur. And only 3% growth rate in the on premise market. Down from five years ago and continuing a decline because of the expense, fergility, and poor performance that customers are receiving. So the re-platforming is going on and customers' number one question is, can you help me run my workloads in each of these three environments? So to your point, we're not yet where people are bursting these workloads in between one environment and another. My belief is that will come. But in today's world, you basically re-platform those workloads. You put them in a certain environment, but now you gotta make sure that you run them well performantly and cost effectively in those environments. And that's the digital transformation. >> Okay. So Ben, I think back to my career. If I turn back the clock even two decades, intelligence, automation, things we were talking about, it's different today. When I talk to the people building software, re-platforming, doing these things today, machine learning and AI, whatever favorite buzzword you have in that space is really driving significant changes into this automation space. I think back to early days of Turbonomic. I think about kinda the virtualization environments and the like. How does automation intelligence, how is it different today than it was say, when the company was founded? >> Wow. Well so for one, we've had to expand to this hybrid and multi-cloud world, right? So we've taken our data model which is AI ops, and driven it out to include Ajur and AWS. But the reason would say why. Why is that important? And ultimately, when people talk about AI ops, what they really mean whether it's on prim or off, is resource-aware applications. I can no longer affect performance by manually running around and doing the care and feeding and taking these actions. It's just wasteful. And in the days where people got around that by over-provisioning on prim sometimes as much as 70 or 80% if you look at the resource actually used, it was far too expensive. Now take that to the cloud, to the public cloud, which is a variable cost environment and I pay for that over-provisioning every second of the rest of my life and it's just prohibitive. So if I want to leverage the elasticity and agility of the cloud, I have to do it in a smarter measure and that requires analytics. And that's what Turbonomic provides. >> Yeah and actually I really like the term AI ops. I wonder if you can put a little bit of a point on that because there are many admins and architects out there that they hear automation and AI and say, oh my gosh, am I gonna be put out of a job? I'm doing a lot of these things. Most people we know in IT, they're probably doing way more than they'd like to and not necessarily being as smart with it. So how does the technology plus the people, how does that dynamic change? >> So what's fascinating is if you think about the role of tech, it was to remove some of the labor intensity in business. But when you then looked inside of IT, it's the most labor intensive business you can find, right? So the whole idea was let's not have people doing low value things. Let's do them high value. So today when we virtualize an unpremised estate, we know that we can share it. Run two workloads side by side, but when a workload spikes or a noisy neighbor, we congest the physical infrastructure. What happens then is that it gets so bad that the application SLA breaks. Alerts go off and we take super expensive engineers to go find hopefully troubleshoot and find root cause. And then do a non-disruptive action to move a workload from one host to another. Imagine if you could do that through pure analytics and software. And that's what our AI ops does. What we're allowing is the workloads themselves will pick the resources that are least congested on which to run. And when they do that rather than waiting for it to break and then try and fix it people, we just let it take that action on its own and trigger a V motion and put it into a much happier state. That's how we can assure performance. We'll also check all the compliance and policies that govern those workloads before we make a move so you can always know that you're in keeping with your affinity-in affinity rules, your HADR policies, your data sovereignty, all these different myriad of regulations. Oh and by the way, it'll be a lot more cost effective. >> Alright, Ben, you mentioned V motion. So people that know virtualization, this was kind of magic when we first saw it to be able to give me mobility with my workloads. Help modernize us with cubernetties. Where does that fit in your environment? How does multi-cloud world, as far as I see, cubernetties does not break the laws of physics and allow me to do V motion across multi-clouds. So where does cubernetties fit in your environment? And maybe you can give us a little bit of compare contrast of kinda the virtualization world and cubernetties, where that fits. >> Sure, so we look at containers or the pods, a grouping of containers, as just another form of liquidity that allows workloads to move, alright? And so again we're decomposing applications down to the level of microservices. And now the question you have to ask yourself is when demand increases on an application or on indeed a container, am I to scale up that container or should I clone it and effectively scale it out? And that seems like a simple question, but when you're looking at it at huge amounts of scale, hundreds of containers or pods per workload or per VM, now the question is, okay, whichever way I choose, it can't be right unless I've also factored the imposition I'm putting on the VM in which that container and or pod sits. Because if I'm adding memory in one, I have to add it to the other 'cause I'm stressing the VM differentially, right? Or should I actually clone the VM as well and run that separately? And then there's another layer, the IAS layer. Where should that VM run? In the same host and cluster and data center if it's on prim or in the same availability zone and region if it's off prim? Those questions all the way down the stack are what need to be answered. And no one else has an answer for that. So what we do is we instrument a cubernetties or an open shift or even on the other side a cloud foundry and we actually make the scheduler live and what we call autonomic. Able to interrelate the demand all the way down through the various levels of the stack to assure performance, check the policy, and make sure it's cost effective. And that's what we're doing. So we actually allow the interrelationship between the containers and their schedulers all the way down through the virtual layer and into the physical layer. >> Yeah, that's impressive. You really just did a good job of explaining all of those pieces. One of the challenges when I talk to users, they're having a real hard time keeping up. (laughing) We said I've started to figure out my cloud environment. Oh wait, I need to do things with containers. Oh wait, I hear about the server-less thing. What are some of the big challenges you're hearing from customers? Who do they turn to to help them stay on top of the things that are important for their business? >> So I think finding the sources of information now in the information age when everything has gone to software or virtual or cloud has become harder. You don't get it all from the same one or two monolithic vendors, strategic vendors. I think they have to come to the Cube as an example of where to find this information. That's why we're here. But I think in thinking about this, there's some interesting data points. First on the skills gap, okay, Accentra did a poll of their customer base and found that only 14% of their customers thought they had the requisite skills on staff to warrant their moves to the cloud. Think about that number, so 86% don't. And here's another one. When you get this wrong, there's some fascinating data that says 80% of customers receive a cloud bill north of three times what they expected to spend. Now just think about. Now I don't know which number's bigger frankly, Stu. Is it the 80% or the three times? But there's the conversation. Hey, boss, I just spent the entire annual budget in a little over a quarter. You still wanna get that cup of coffee? (laughing) So the costs of being wrong are enormously expensive. And then imagine if I'm not governing the policies and my workloads wind up in a country that they're not meant to per data sovereignty. And then we get breached. We have a significant problem there from a compliance standpoint. And the beauty is software can manage all this and automation can help alleviate the constrain of the skills gap that's going on. >> Yeah, you're totally right. I think back to five years ago, I was at Amazon Reinvent. And they had a tool that started to monitor a little bit of are you actually using the stuff that you're paying for? And there were customers walking out and saying, I can save 60 to 70% over what I was doing. Thank you Amazon for helping to point that out. When I lived on the data center side and vendors that sold stuff, I couldn't imagine if your sales rep came and said, hey, we deployed this stuff and we know you spent millions of dollars. It seems like we over-provisioned you by two to three x what you expected. You'd be fired. So it was like in Wall Street. Treats Amazon a little bit differently than they do everybody else. So on the one hand, we're making progress. There's lots of software companies like yourself. There's lots of companies helping people to optimize their cost on there. But still, this seems like there's a long way to go to get multi-cloud and the cost of what's going on there under control. Remember the early days? They said cloud was supposed to be simple and cheap and turned out to be neither of those. So Ben, I want to give you the opportunity. What do you see both as an industry and for Turbonomic, what's the next kinda six to 12 months bring? >> Good, can I hit your cloud point first? It's just when you think of Amazon, just to see how the changes. If I go and provision a workload in Amazon EC2 alone, there's 1.7 million different combinations from which I can choose across all the availability zones, all the regions, and all the services. There's 17 families who compute service alone as just one example. So what Amazon looks at Turbonomic and says, you're almost a customer control plane for us. You're gonna understand the demand on the workload, and then you can help the customer, advise the customer which service, which instance types, all the way down through not just compute and memory, but down into network and storage are the ones that we should do. And the reason we can do this so cost effectively is we're doing it on a basis of a consumption plan, not an allocation plan. And Amazon as a retailer in their origin, has cut prices 62 times, so they're very interested in using us as a means of making their customers more cost effective so that they're indeed paying for what they use, but not paying for what they don't use. They've recognized us as giving us the migration tools competency, as well as the third party cloud management competencies that frankly are very rare in the marketplace. And recognize that those are because production apps are now running at Amazon like never before. Ajur, Microsoft Ajur is not to be missed on this one, right? So they've said we too wanna make sure that we have cost effective operations. And what they've described is when a customer moves to Ajur, that's a Ajur customer at ACA. But then they need to make sure that they're growing inside of Ajur and there's a magic number of 5,000 dollars a month. If they exceed that, then they're Ajur for life, okay? The problem becomes if they pause and they say, wow this is expensive or this isn't quite right. Now they just lost a year of growth. And so the whole opportunity with Ajur and they actually resell our assessment products for migration planning as well as the optimization thereafter. And the whole idea is to make sure again customers are only paying for what they use. So both of these platforms in the cloud are super aggressive with one another, but also relative to the un-prim legacy environments to make sure that the workloads are coming into their arena. And if you look at the value of that, they round numbers about three to 6,000 dollars a year per workload. We have three million smart workloads that we manage today at Turbonomic. Think what that's worth in the realm of the prize at the public cloud vendors and it's a really interesting thing. And we'll help the customers get there most cost effectively as they can. >> Alright, so back to looking forward. Would love to hear your thoughts on just what customers need broadly and then some of the areas that we should look for Turbonomic in the future. >> Okay, so I think you're gonna continue to see customers look for outlets for this decomposed application as we've described it. So microservices, containers, and VMs running in multiple different environments. We believe that the next one, so today in market we have STDC, the software defined data center and virtualization. We have IAS and PASS in the public and hybrid cloud worlds. The next one we believe will be as applications at the edge become less pedestrian, more strategic and more operationally intensive, then you're talking about Amazon Prime delivery or your driverless cars or things along those lines. You're going to see that the edge really is gonna require the cell tower to become the next generation data center. You're gonna see compute memory and storage and networking on the cell tower because I need to process and I can't take the latency of going back to the core, be it cloud core or on premise core. And so you'll do both, but you'll need that edge processing. Okay, what we look at is if that's the modern data center, and you have processing needs there that are critical for those applications that are yet to be born, then our belief is you're gonna need workload automation software because you can't put people on every single cell tower in America or the rest of the world. So, this is sort of a confirming trend to us that we know we're in the right direction. Always focus on the workloads, not the infrastructure. If you make the application workloads perform, then the business will run well regardless of where they perform. And in some environments like a modern day cell tower, they're just not gonna be the opportunity to put people in manual response to a break fix problem set at the edge. So that's kinda where we see these things headed. >> Alright, well Ben Nye, pleasure to catch up with you. Thanks so much for giving us the update on where the industry is and Turbonomic specifically. And thank you so much for watching. Be sure to check out theCube.net for all of our coverage. Of course we're at all the big cloud shows including AWS Reinvent and CubeCon in Seattle later this year. So thank you so much for watching the Cube. (gentle music)

>> Live from Orlando, Florida, it's theCUBE covering Microsoft Ignite. Brought to you by Cohesity and theCUBE's ecosystem partners. >> Welcome back, everyone, to theCUBE's live coverage of Microsoft Ignite. I'm your host, Rebecca Knight, along with my cohost, Stu Miniman. We're joined by Patrick O'Reilly of O'Reilly Venture Partners based in San Francisco. Thanks so much for coming on theCUBE, Patrick. >> Thanks for having me. >> So, you are a serial entrepreneur now working as a VC, what are you doing here? Tell us why you came to Ignite. >> Yeah, well selfishly on the VC side we have a few of our portfolio companies here that have booths, and I wanted to kind of hear what people are asking, you know, why they're interested in the companies and how we're framing, you know, those companies to the end users. I think these type of events are really good to unlock hidden potential, or things that people can tell you that you wouldn't actually have thought about, yeah. >> Yeah, so Patrick, you know, I've known you for a number of years. Usually see you at the opensource shows. Microsoft, you know, publicly very embracing opensource. You know, they love Linux, partnering with Red Hat, even you know, partnering is a lot of things that Microsoft does. They were working with VMware. What's your viewpoint as to how you see Microsoft and the opensource world, and how about this ecosystem? Is this a vibrant ecosystem that, you know, VCs are investing in, or is it just that there's companies of yours that, you know, this is part of the story. >> No, and I think historically we've had the, you know, build versus buy, you know, kind of way of looking at it, but when I typically think of Microsoft, it's more people building glue, you know, code to kind of connect things together, and you tend to have blinders on and not think about what opensource components you can use. You know, you look for like what company has a solution you can buy, or license or OEM, and I think that's changing, you know, over time. You know, Microsoft does an amazing job with developers of giving them very easy to understand languages and amazing tooling, and along with that the documentation and the training, so I kind of felt like you came into development one of two ways. You either were like on the Microsoft track and using the cookie cutter approach, you know, to doing things and getting certified on something, or you were opensource, you learned the scripting language and you just looked at what you can cobble together in the opensource world, and there wasn't a lot of crosspollination, but now I see that those walls kind of dissolving. People are willing to mix and match. >> Yeah, it's interesting, you know, some places I've seen Microsoft, a lot in the Kubernetes show, so you know, first got to know you you were at Kismetic, you know, really the first company around Kubernetes that we knew. You know, I know you're doing a lot of different things but we love your viewpoint on, you know, anything on Microsoft in that space, as well as just what you've seen, you know, as a watcher of the Kubernetes space these days. >> Yeah, I mean I've been... You know, if I step back from Kubernetes, you know, back to like the Apache Mesos and the Mesosphere days, you know, if you rewind all the way back there you kind of had to do a lot of education of like, "What do you mean 'containerization?' "I have VMs, why do I need containers?" And now that we've gotten past that and people actually understand the value of containers, like having an orchestration system in place that works and works with everything, you know, is obviously more important than ever, and it's... I really credit the CNCF and the Linux Foundation for what they've done to kind of bring standards around Kubernetes and shepherd the project, and I think that, you know, the fairly recent announcement from Google that they're fully trusting, you know, CNCF to be the shepherd of that is huge, and it gives a framework for people, like Gabe at Microsoft, to work with, you know, some of the staff at Google, and like, in a collaborative way and move it forward for everyone, and I think, you know, historically containers made a ton of sense on Linux, but now that we have Windows server, you know, supporting containers and theCUBE working, you know, on Windows, I think in the 111... Or sorry, 113 release we'll have full Windows server, you know, support in Kubernetes, like that'll be huge. And just a quick aside, like the reason I even kind of honed in on containers and thought it was interesting is the average server utilization is still so low, but we're not really trained as technologists to care about that, and you know, we're really good at building data centers and tucking them off in places where no one sees, but when the average server's taking like... It's like running a hairdryer on high, you know, for electricity and then they run so hot you have to cool it. Like, we're really not helping the environment, so I think if we can move towards containerization, move towards efficient utilization of our hardware, you know, it'll be better for everyone, not just this ecosystem, so... >> So, talk to, tell our viewers a little bit about your portfolios and your portfolio companies that are here, and how they fit into the ecosystem. >> Yeah, so the one I'm most excited about, or shouldn't probably say it that way, I'll reframe that-- >> Can't have favorites, they're all your babies. (laughs) >> Yeah, they're all my babies. (laughs) >> But Ziften Technologies is great. I think their integration with the Windows, the vendor ATP, you know, advanced threat protection, you know, tool is great. They focus on the Mac and the Linux components and give you that same kind of pane of glass on the Microsoft side to see those endpoints, and like their utilization of AI, like they have an upcoming release where they're using AI to do things, and traditionally in that space it's been like the AB vendors, you know, doing everything and you had kind of, "Here's our signatures, "we're going to scan against those signatures," and it's a creative use of AI now to, like, look for just anomaly detections. These are the things we haven't seen before. Not sure what it is but it looks abnormal, and those are the kind of like spin-outs of companies that I'm looking for, too. Like I want to see people doing more meaningful things, you know, with AI. I think if we look at Azure and what they're offering now, like I don't need to have a bunch of data scientists at my startup. I can implement computer vision just using what off-the-shelf components, you know, from Microsoft and you know, Azure. I can do video indexing, you know, using their services. Like, if I rewind just back three years I would've had to have a team of like four data scientists. They'd be reading whitepapers, they'd be implementing code that like sort of half works, and they would probably take half a year to train some models to get, like, moderate results, and now in a matter of minutes, you know, I can use this off-the-shelf stuff. >> Yeah, it's fascinating, I think back to, you know, we were pretty early at theCUBE at watching the whole big data trend, and back then it was like, "Okay, we're going to "take that two-year project and you know, "drive it down to six months," and now we talk in the AI space is, you know, how can we drive that down even more. In big data there was concern, everything seemed to be custom. In AI we're starting to get to more templatized solutions, rolling out for a lot of industries, and it feels like it's taking off a lot faster than that space is, and I know there's a lot of investment going on in the space, and a lot there, so... Anything in particular, you know, what excites you, what makes a good, you know, AI investment versus, you know, there's just so much happening out there. >> Well, you know, I... I struggle with the name AI a little bit. >> Yeah, no, no, I understand, yeah. >> I'm working on a talk, and you know, I kind of like don't, I don't enjoy the artificial aspect of it because it's really just intelligence, and you know, right now it's a buzzword people are throwing into everything when really they mean, "We use an algorithm." (laughs) You know, it's not truly AI, but when we get to cognition we get, you know, to, you know, someday if we have quantum supremacy we'll have, you know, systems that actually can maybe have a consciousness, you know, and decide things. That's where I'm interested, I'm looking... Like on the devops side I'm looking for people using AI to get away with repetitive tasks. Like I would love to see, you know, someone have a system where it's like, "Hey, we've noticed, you know, 90 times "this week this guy's done this exact "same thing, you know, 99% the same way." Like, let's automate that away. You know, we've been really good in the space to kind of treat infrastructure like code, you know, and be able to tear things up. Like I mean, I've been incredibly excited to see, like just in my career, how we went from, "Okay, you're going to do something meaningful on the web. "You need to build a data center. "You need to, you know, get a bunch of servers, racks," and then you pay all this equipment and oh, by the way, 18 months from now it's going to be obsolete and you're going to have to spend money again, to where now I can just, you know, get some credits to start up in the cloud, you know, try things out and do like really meaningful things. So, just looking for anyone on AI that's going to do something that moves the needle. >> Yeah, now that, yeah, just on the terminology piece, I've lived through the cloud wars and the argument over what was and what isn't, so it's just, you know, the shorthand for this wave that we have there, where AI or ML, or you know, IBM has some interesting terms that they want to call it. We understand that there's intelligence that I can do with software, a lot of machine-to-machine things that are going on, and it's not a lot of, you know, shouldn't be a lot of heavy lifting by people to go in there. Oh, wait, I can train something, I can learn what's happening, so... >> Well, I wanted to ask when... I'm sure a lot of entrepreneurs ears are pricking up when they hear that you want to make these meaningful investments. What is it that you look for in a company, is it... In terms of the leadership team, in terms of any track record, what sort of makes your eyes light up? >> So, I try to go to as many conferences as I can, because I feel that's where, you know, the hallway track and I can meet people. I can see, you know, their talks, see what they're passionate about, so what I'm really looking for is investing more in the people than in the idea, because startups can always pivot, and you look at some of the greatest companies out there, they were pivots from, you know, a slightly different model and they realized that, "Oh, we should go chase down this other thing." So, to me, I'm looking for people that are doing something exciting where they are already, looking to make the leap. You know, for example, like you know, the Spinnaker team or people that do something, you know, like... You know, like if etcd wanted to move off and be a separate company, like things like that where they've done something, they've proven it, and now they want to go start a company around it, and I think right off the bat, like if you've built some interesting technology that people are starting to use you have a decent revenue stream just from support, you know, of that and helping those end users, and I think, you know, with O'Reilly we do something a little different than other people. Like I focus mostly on seed investment, very early stage. Our typical check size is around $500k, and I actually allow people to take us off the cap table and just pay us back. Like you know, I've done nine startups in my career, and it's... Fundraising is one of those things where you only get good at it once you don't need it anymore, (chuckles) and I felt the pain of being on that side of the desk and I want to be in the position where, you know, we can write the checks and not try to, like, have a lot of governance, not try to take a board seat, not give you down pressure, you know, on what you're doing but really be additive. I think moving forward I would love to be in the position where we can help incubate, you know, a lot of companies because we've found that, you know, you all kind of go through, every company goes through the same process like, "Now, we need a real CFO because "we need financial projections." Like, being able to, like, provide those services for portfolio companies where they don't have to go spend their resources chasing that down. >> I'm curious how much some of the big players, or just the gravity of what's happening in the space that you're looking at, so obviously we're here at the Microsoft show, but Google, Amazon, a lot of activity going on and we can call it AI or what you will, VMware even, Oracle, SalesForce, how much of the big players defining and you have to build around them, versus you know, we look at Kubernetes is supposed to make things independent, to be able to be opensource and be able to build solutions, you know, regardless of what platform they're on. >> Yeah, I mean, I think we're living in a world where people have a lot of choice, you know, and we look at even, like we take the example of cloud providers. Like, as long as I don't get vendor lock in and use, you know, their specific features, like I can move around to different cloud providers, I can now say I want to negotiate a better price here and migrate over, and I think just with any of the technologies, like trying to work in ways where companies can work together and be additive, I think that's where we actually move, you know, move down the field. I don't know what analogy's appropriate to use, but you know, I feel like there's a lot of really interesting stuff that we should be doing, and making... Every company doing a slightly different version of the same thing I don't think, you know, makes sense. Like, you know, even silly things like as we mature. Like, you know, back in the day everyone used to have broadcast television. We built all these antennas, we got all this range, you know, and then we moved to digital and we didn't need those antennas, we didn't need that range, so they started decommissioning them, but then companies came along and they're like, "Well, wait, now we have this "unlicensed spectrum we can use." So, now they're using it for internet. You know, you can get 20 megabit connectivity out to a rural farm where now they can put some cheap IoT sensors, and like, do really meaningful things with low cost technologies, like those are the things I'm interesting in. You know, so kids that want to cobble together, you know, IoT sensors and come up with a way to use, you know, what they have in rural areas, and like, and have technology actually help people in a meaningful way, and I think those are a lot of very viable startups, you know, in that space. I do think we live in a world where every company's going to end up graduating into one of the camps, be it, you know, SalesForce, Google, you know, Microsoft, but in that innovation spike, like when they're first starting improving out the companies I think they have a ton of choice, you know. >> You described a very beneficent approach to how you think about VC. Do you think, how would you describe the VC landscape right now? You said you want to be able to just incubate great ideas and help these young companies when they are not good at fundraising and they don't have the smooth, slick deck that will really impress the bigger VC firms. I mean, how, what's wrong with the VC landscape today and what else are you doing to make it better? >> Well, I think the incentives are a little off. You know, I can speak for myself, like when I was... You know, when I was looking to raise VC money and my previous companies, like you know, you get these great offers from people, but then you talk to other entrepreneurs and you're like, you know, I'm not going to call anyone out by name, but you're like, "Well, how is this VC's firm served you," and you start hearing of ways that it was additive, but also kind of put undue pressure on them, or they say things like, "Well, we really didn't "need to raise that round then. "We could've done bridge financing "or we could've figured out how to get a MVP product "out there and brought in some revenue." So, I just think it's the ultrahigh returns that VCs are looking for, and the promises that those VCs are making to their LPs, (chuckles) you know, in their funds to outperform everyone else, and you know, everyone talks to everyone, right? So, if anything's meaningful out there looking for investment kind of the back channel is very vibrant and it's dog-eat-dog, and some of it, I kind of reckon it to, you know, your alma mater, like where you went to school. Like, you know, if you're an MIT person, like MIT's the best place in the world. You know, if you're, you know, some other school, they're the best place in the world, and the VCs tend to kind of, like, fall in those camps, and what I'm looking to do-- >> And those are real biases that impact women and underrepresented minorities, to their detriment. >> Yeah, and you know, and that's the thing I've struggled with, too, when you look at the... Like, let's take Andreessen, you know, for example and you look at the portfolio companies, like you know, you kind of become locked into that ecosystem. Like if you want to go, you know, if I'm on Mesosphere and I want to go partner with someone that's not under that, or they have a company in that portfolio that does similar things, you're going to be pressured into working with the portfolio company over going off and maybe choosing the better, you know, choice for the industry, so I'd like to see, you know, those things change. >> Right, and so, Patrick, we talked a little bit about Ziften, security endpoint, you know, really hot space. I want to give the opportunity, other companies you have here that we should check out. >> Yeah, so we work closely with the team at Turbonomic. I think, you know, what they've done over time, you know, is amazing. I love products where you can just bolt it in and within a short period of time you're getting value. Like, you know, stepping back and just saying one thing about Ziften, like I think it's amazing, because I come from a software development, you know, background, and one thing as a software developer I've always found fascinating is like when you come in wearing the developer hat they give you the keys to the kingdom. They're like, "Oh, here's root access to the servers, "here's where all of our data is, "here's how you do a snapshot of production "to, you know, test it, you know, in staging," and I've always thought that it was a tremendous amount of risk, and you know, on average a company can be hacked for up to 100 days before they even realize that they've had a breach, and like, any kind of company, you know, be it Ziften or anyone in that space, that can showcase that to you. Like, you know, raise up things that you weren't aware of, you know, is really interesting, and then, you know, to the, like, Nico and Turbonomics and the things that they're doing there. Like, to actually get the most out of what you already have, like that's huge to me, because one of the, you know, one of the things I see in cloud computing that we didn't necessarily have, you know, directly owned physical infrastructure is it's almost too easy to spin things up. You know, you've got the guy clicking through the UIs like, "Oh, this instance looks great. "Oh, and it says it's only be $140 this month," and then they end up spinning up 1,000 of those, you know? (laughs) You get that first sticker shock of, like, here's that $250,000 bill that month, (chuckles) you know, for cloud, and companies like Turbonomics can, like, avoid you, you know, making those mistakes. >> Great, Patrick, thank you so much for coming on theCUBE. It was really fun talking. >> Yeah. >> We could talk to you for hours. >> Thanks for having me, I appreciate it. >> I'm Rebecca Knight for Stu Miniman. We will have more from theCUBE's live coverage of Microsoft Ignite coming up in just a little bit. (techy music)

(electronic music) >> Narrator: From Gillette stadium in Foxborough, Massachusetts, it's theCUBE covering VTUG Winter Warmer 2018 presented by SiliconANGLE. >> I'm Stu Miniman, and we're at the VTUG Winter Warmer 2018. Always love at these user conferences, and we get to talk to a lot of the users, and we've had a bunch. Next user we have on the program is Erik Kurlanska, who's a systems engineer at MMC. Thanks so much for joining us, Erik. >> Thanks. >> Alright, tell us a little bit about your background. You're coming down here from Maine. The people that run this event are also from Maine. >> Yeah, I mean, it's a nice event. I've been for the past four years, and I learn something new every year. It's a good time. It's a good networking moment for a bunch of people, and there's always something new on the horizon. That's what I like. >> So you're a systems engineer. >> Tell us a little bit about what you do in your role, the industry you're in, things like that. >> Yeah, I'm in the healthcare industry in Maine and like you said, what I do is basically one of the lead virtualization people in my group and we're just basically every day working on VMware and new products coming in, new applications, building them up and testing and that kind of great stuff. >> Can you give us just thumbnail sketches to kind of location, number of servers, number of people on your team? >> Erik: Sure, yeah. >> How do you manage it as to number of VMs or however? >> On our team right now there's three of us and that's just the virtualization team. We have a couple thousand VMs, probably 110 servers, Blades, all Cisco Blades nowadays. And that's the extent of what we have, and for storage we have many, many petabytes of storage. >> Okay, tell me. You're in healthcare. You've got virtualization. The good thing is, there's nothing changing in your environment, right? >> (laughs) Right. >> There's not new requirements from the business. I'm sure they're throwing tons of money at you, and the government stays completely out of your way. So what are some of the challenges you're facing? >> Exactly. The challenges there are, again, it's money. What can you do for such a small amount of money? Again, we're trying to find very good tools to monitor our everything, networking, servers, virtualization. That's one piece that we've had trouble in the past with a good tool to monitor everything across the board. We're just having a hard time trying to find that, to be honest, so it's a struggle. >> Yeah, tell me what tools have you worked through and what's the gap? I always love to hear, it's like, "Okay, hey vendors. "You're listening. Here's a user that saying you are failing "To meet the requirements that they have." So come on, give them product requirements. >> We've tried a few big ones, and we want a monitor. So for instance, from VMware, we've just stood up vRealize, We have vRealize Business, vRealize Operations, Log Insight, bringing all that in now and personally I think some of that should have been just part of the product to start. So it is what it is. But that's a whole subset of tools that we need just to manage our virtualization environment. We also have another tool called Turbonomic. We've used that for years, and it's done pretty well for us. But again on the networking side, that's a whole different department. So those guys have their own separate tools. They use WhatsUp Gold. They've had challenges with that, and all along the way, every different vendor, like we have Epic for one of our major EMRs, and they have their own sets of monitoring tools for just Epic, so it's tough to get one straight answer from one company. We also have another product called ControlUp. I don't know if you're familiar with that one. For all of them to give us one concise answer, it's nearly impossible. >> Yeah, unfortunately we have this joke that single pane of glass is spelled P-A-I-N. >> Exactly. >> Because that is what IT feels when they're trying to do this these days. If you were to have the magic wand out there, what are you looking for? Obviously it needs to be free and support everything, but what are some of the big gaps that you see? >> Part of it is, integration with the management interface tools. We have Cisco's UCS Manager. That's one interface. You have to go to manage this. You can't get there from here kind of thing. I'm from Maine, so. (Stu chuckles) You can't manage your Cisco stuff right from VMware, and then you have ControlUp that you need to go to another pane. There's just 10 panes of glass. You can spend all day looking at 10 different things and get eight to ten different answers. >> I thought vCenter should be at the center of a lot of things there. Don't most of the vendors kind of integrate well? I would think especially all the VMware products would have a similar look and feel now. >> They should. They should. >> They're just not meeting up to what they need to. >> I think they're trying with like Lifecycle Manager for instance from VMware. They're trying to get there, but it's not there yet. It really isn't. If you start greenfield, I would say, and you start with Lifecycle Manager, and you bring in all those products in one fell swoop, it'll probably work great, but for us, that hasn't been the case. >> Okay. Talk about what brings you to an event here. What have you seen so far? What interests you in the keynotes? When are you going to go to the breakouts? I'm sure the hallway conversations are of use. >> Sure. The hallway conversations are one of the big things for us because you meet people in the industry, a lot of them are doing the same thing, using the same tools, having the same problems, and it's great to talk about them and come up with solutions between ourselves and converse in that fashion. It's a great experience to come to these. You learn a lot from a lot of people. >> Any specific technologies or areas that you're specifically interested in digging into? >> So Hyper-Converged, we're trying to get into that a little bit more, and there's three or four major players, and we're evaluating all of them now. I've spoken to other people at other hospitals locally that have some Hyper-Converged, and they're happy with one product versus another, so I'm just trying to, pros and cons of that, see what we can. >> Let me ask, is there a certain business challenge just to simplify overall going into Hyper-Converged? Is the economics of it, the management of it, what's kind of the business objective to look at that space? >> We have a couple smaller hospitals, and they have a lot of legacy storage, a lot of legacy servers and Blades, and again, Hyper-Converged is a good fit for them because they can just plop everything in one unit and call it good, and so we're trying to do that for a couple smaller hospitals and kind of bring them into the fold that way. >> How does cloud fit in your overall picture, or does it fit into your discussion today? Cloud, the SaaS application, everybody's using some, public cloud regulations might be hurting you. But what is the cloud scenario for you? >> Right now we have just a few apps that are cloud-based. And that's it. Not a lot in the cloud because we're healthcare so far. >> Alright, Erik, anything else from kind of the hallway conversation that you're hearing, some of the big challenges you're seeing, or what people are excited about these days? >> I think right now the big thing is the Spectre/Meltdown thing. Nobody really knows what it's going to do. UCS, we're still waiting for Cisco to come out with firmware for the Blades and kind of to go through that testing. VMware came out with some patches, they pulled them back. So it's kind of a big mess, and it worries us a bit. However, all of our Blades, everything is RAM-bound basically for us. We even have most of our Blades have 768 gigs of RAM, but CPUs at 20%. The memory's 90% used, so that's what it is. >> So just if I hear you right, if all of a sudden they said, "Hey, you're going to get 30% less "performance there," you'd be like, "Yawn. That really didn't impact us." >> Exactly. >> It's more the security gaps that you need fixed now. >> And we can't fix them because the solution isn't there. So, yeah. >> Stu: Hoo, boy. >> It's tough. It's a new challenge every day. >> (laughs) Yeah, just last thing. How do you keep up with everything that's going on? >> Well that's, again, a great question. I think it's hard. It gets harder and harder, and they want you to do more with less every day. I'm not sure how we keep up, really. Get a tool that can do everything. That just doesn't exist yet. >> Erik Kurlanska, really appreciate you sharing with your peers, which is really a main function of a user group like this. We're thrilled to be able to share this with our community. I'm Stu Miniman. You're watching theCUBE. (electronic music)