>>Okay, welcome back everyone. Day three of the cube coverage here at VMware VMware Explorer, not world 12 years. The Cube's been covering VMware is end user conference this year. It's called explore previously world. We got two great guests, friends of the cube friend, cube, alumni and cloud rod, Keith Townson, principal CTO advisor, air streaming his way into world this year in a big way. Congratulations. And course James Erhard principal technology, a at tan zoo cloud ARA. He's been in cloud game for a long time. We've known each other for a long, long time, even before cloud was cloud. So great to see you guys. Thanks for coming on. >>Ah, it's a pleasure, always happy to >>Be here. So day threes are kind of like riff. I'll throw out super cloud. You guys will, will trash it. We'll debate. It'll be controversial and say this damage done by the over rotation of developer experience. We'll defend Tansu, but really the end of the game is, is that guys, we have been on the cloud thing for a long time. We're we're totally into it. And we've been saying infrastructure is code as the end state. We want to get there. Right? DevOps and infrastructure is code has always been the, the, the underlying fire burning in, in all the innovation, but it's now getting legitimately enterprised it's adopted in, in, in large scale, Amazon web services. We saw that rise. It feels we're in another level right now. And I think we're looking at this new wave coming. And I gotta say, you know, the Broadcom thing has put like an electric shock syndrome into this ecosystem cuz they don't know what's gonna happen next. So as a result, everyone's kind of gotta spring in their step a little, whether it's nervous, energy or excitement around something happening, it's all cloud native. So, you know, as VMware's got such a great investment in cloud native, but yet multi cloud's the story. Right? So, so messaging's okay. So what's happening here? Like guys let's, let's break it down. You're on the show floor of the Airstream you're on the inside, but with the seeing the industry, James will start with you what's happening this year with cloud next level and VMware's future. >>Yeah, I think the big thing that is happening is that we are beginning to see the true separation of capacity delivery from capacity consumption in computing. And what I mean by that is the, the abstractions that sort of bled between the idea of a server and the idea of an application have sort of become separated much better. And I think Kubernetes is, is the strong evidence of that. But also all of the public cloud APIs are strong evidence of that. And VMware's APIs, frankly, before that we're strong evidence of that. So I think what's, what's starting to happen now then is, is developers have really kind of pulled very far away from, from anything other than saying, I need compute, I need network. I need storage. And so now you're seeing the technologies that say, well, we've figured out how to do that at a team level, like one team can automate an application to an environment, but another team will, you know, other teams, if I have hundreds of teams or, or thousands of applications, how do I handle that? And that's what the excitement I think is right >>Now. I mean the, the developer we talking, we're going on camera before you came on camera Keith around, you know, your contr statement around the developer experience. Now we, I mean, I believe that the cloud native development environment is doing extremely well right now. You talk to, you know, look around the industry. It's, it's at an all time high and relative to euphoria, you know, sit on the beach with sunglasses. You couldn't be better if you were a developer open source, booming, everything's driving to their doorstep, self service. They're at the center of the security conversation, which shift left. Yeah. There's some things there, but it's, it's a good time. If you're a developer now is VMware gonna be changing that and, and you know, are they gonna meet the developers where they are? Are they gonna try to bring something new? So these are conversations that are super important. Now VMware has a great install base and there's developers there too. So I think I see their point, but, but you have a take on this, Keith, what's your, what's your position on this? How do the developer experience core and tangential played? >>Yeah, we're I think we're doing a disservice to the industry and I think it's hurting and, or D I think I'm gonna stand by my statement. It's damaging the in industry to, to an extent VMware >>What's damaging to the >>Industry. The focusing over focusing on developer experience developer experience is super important, but we're focusing on developer experience the, the detriment of infrastructure, the infrastructure to deliver that developer experience across the industry isn't there. So we're asking VMware, who's a infrastructure company at core to meet the developer where the developer, the developer is at today with an infrastructure that's not ready to deliver on the promise. So when we're, when NetApp is coming out with cool innovations, like adding block storage to VMC on AWS, we collectively yawn. It's an amazing innovation, but we're focused on, well, what does that mean for the developer down the road? >>It should mean nothing because if it's infrastructure's code, it should just work, right. >>It should just work, but it doesn't. Okay. >>I see the damage there. The, >>The, when you're thinking, oh, well I should be able to just simply provide Dr. Service for my on-prem service to this new block level stores, because I can do that in a enterprise today. Non-cloud, we're not there. We're not at a point where we can just write code infrastructure code and that happens. VMware needs the latitude to do that work while doing stuff like innovating on tap and we're, you know, and then I think we, we, when buyers look at what we say, and we, we say VMware, isn't meeting developers where they're at, but they're doing the hard work of normalizing across clouds. I got off a conversation with a multi-cloud customer, John, the, the, the, the unicorn we all talk about. And at the end I tried to wrap up and he said, no, no, no way. I gotta talk about vRealize. Whoa, you're the first customer I heard here talk about vRealize and, and the importance of normalizing that underlay. And we just don't give these companies in this space, the right >>Latitude. So I'm trying to, I'm trying to rock a little bit what you're saying. So from my standpoint, generically speaking, okay. If I'm a, if the developers are key to the, to the cloud native role, which I, I would say they are, then if I'm a developer and I want, and I want infrastructure as code, I'm not under the hood, I'm not getting the weeds in which some lot people love to do. I wanna just make things work. So meet me where I'm at, which means self-service, I don't care about locking someone else should figure that problem out, but I'm gonna just accelerate my velocity, making sure it's secure. And I'm moving on being creative and doing my thing, building apps. Okay. That's the kind of the generic, generic statement. So what has to happen in your mind to >>Get there? Yeah. Someone, someone has to do the dirty work of making the world move as 400, still propagate the data center. They're still H P X running SAP, E there's still, you know, 75% of the world's transactions happen through SAP. And most of that happens on bare metal. Someone needs to do the plumbing to give that infrastructure's cold world. Yeah. Someone needs to say, okay, when I want to do Dr. Between my on premises edge solution and the public cloud, someone needs to make it invisible to the Kubernetes, the, the Kubernetes consuming that, that work isn't done. Yeah. It >>Is. It's an >>Opportunity. It's on paper. >>It's an opportunity though. It's not, I mean, we're not in a bad spot. So I mean, I think what you're getting at is that there's a lot of fix a lot of gaps. All right. I want Jay, I wanna bring you in, because we had a panel at super cloud event. Chris Hoff, you know, beaker was on here. Yeah. He's always snarky, but he's building, he's been building clouds lately. So he's been getting his, his hands dirty, rolling up his sleeves. The title of panel was originally called the innovators dilemma with a question, mark, you know, haha you know, innovators, dilemma, little goof on that. Cuz you know, there's challenges and trade offs like, like he's talking about, he says we should call it the integrator's dilemma because I think a lot of people are talking about, okay, it's not as seamless as it can be or should be in the Nirvana state. >>But there's a lot of integration going on. A lot of APIs are, are key to this API security. One of the most talked about things. I mean I interviewed six companies on API security in the past couple months. So yeah. I mean I never talked to anybody about API security before this year. Yeah. APIs are critical. So these key things of cloud are being attacked. And so there's more complexity as we're getting more successful. And so, so I think this is mucking up some of the conversations, what's your read on this to make the complexity go away. You guys have the, the chaos rain here, which I actually like that Dave does too, but you know, Andy Grove once said let chaos rain and then rain in the chaos. So we're in that reign in the chaos mode. Now what's your take on what Keith was saying around. Yeah. >>So I think that the one piece of the puzzle that's missing a little bit from Keith's narrative that I think is important is it's really not just infrastructure and developers. Right? It's it's there's in fact, and, and I, I wrote a blog post about this a long time ago, right? There's there's really sort of three layers of operations that come out of the cloud model in long term and that's applications and infrastructure at the bottom and in the middle is platform and services. And so I think one of the, this is where VMware is making its play right now is in terms of providing the platform and service capability that does that integration at a lower level works with VMs works with bare metal, works with the public cloud services that are available, makes it easy to access things like database services and messaging services and things along those lines. >>It makes it easy to turn code that you write into a service that can be consumed by other applications, but ultimately creates an in environment that begins to pull away from having to know, to write code about infrastructure. Right. And so infrastructure's, code's great. But if you have a right platform, you don't have to write code about infrastructure. You can actually D declare what basic needs of the application are. And then that platform will say, okay, well I will interpret that. And that's really, that's what Kubernetes strength is. Yeah. And that's what VMware's taking advantage of with what we're doing >>With. Yeah. I remember when we first Lou Tucker and I, and I think you might have been in the room during those OpenStack days and when Kubernetes was just starting and literally just happened, the paper was written, gonna go out and a couple companies formed around it. We said that could be the interoperability layer between clouds and our, our dream at that time was Hey. And, and we, we mentioned and Stratus in our, our super cloud, but the days of spanning clouds, a dream, we thought that now look at Kubernetes. Now it's kind of become that defacto rallying moment for, I won't say middleware, but this abstraction that we've been talking about allows for right once run anywhere. I think to me, that's not nowhere in the market today. Nobody has that. Nobody has anything that could write once, read one, write once and then run on multiple clouds. >>It's more true than ever. We had one customer that just was, was using AKs for a while and then decided to try the application on EKS. And they said it took them a couple of hours to, to get through the few issues they ran into. >>Yeah. I talked to a customer who who's going from, who went from VMC on AWS to Oracle cloud on Oracle cloud's VMware solution. And he raved about now he has a inherent backup Dr. For his O CVS solution because there's a shim between the two. And >>How did he do >>That? The, there there's a solution. And this is where the white space is. James talked about in the past exists. When, when I go to a conference like Cuban, the cube will be there in, in Detroit, in, in, in about 45 days or so. I talk to platform group at the platform group. That's doing the work that VMware red had hash Corp all should be doing. I shouldn't have to build that shim while we rave and, and talk about the power Kubernetes. That's great, but Kubernetes might get me 60 to 65% of their, for the platform right now there's groups of developers within that sit in between infrastructure and sit in between application development that all they do is build platforms. There's a lot of opportunity to build that platform. VMware announced tap one, 1.3. And the thing that I'm surprised, the one on Twitter is talking about is this API discovery piece. If you've ever had to use an API and you don't know how to integrate with it or whatever, and now it, it just magically happens. The marketing at the end of developing the application. Think if you're in you're, you're in a shop that develops hundreds of applications, there's thousands or tens of thousands of APIs that have to be documented. That's beating the developer where it's at and it's also infrastructure. >>Well guys, thanks for coming on the cube. I really appreciate we're on a time deadline, which we're gonna do more. We'll follow up on a power panel after VMware Explorer. Thanks for coming on the cube. Appreciate it. No problem. See you pleasure. Yeah. Okay. We'll be back with more live coverage. You, after this short break, stay with us.

from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hello everyone and welcome to this week's wiki bond cube insights powered by ETR in this breaking analysis we want to dig into the so called multi-cloud arena some of the questions we're getting from our community are what is a multi cloud did we really need it what problems does multi-cloud solve and importantly what problems does it create how is this thing called multi cloud likely to evolve and who are some of the key players to watch how do they stack up relative to each other you know recently I got a couple of interesting questions from a customer that says I have all this AI action going on and doing sophisticated modeling and this data lives and oh clouds all over the place how do I cross connect to the data and the workloads that are running on these clouds with the consistence this consistent experience of what our other customers doing another question came up in the community today is there a financial advantage to multi cloud or is it just about avoiding lock-in so I'm gonna take a stab at addressing these questions so first of all let's look at some of the noise that's going on in the marketplace and try to extract a little signal every vendor especially the ones who don't own a cloud are touting this thing called multi cloud and they tell us that customers want to avoid lock-in and organizations want seamless integration across clouds and they say we the vendor are uniquely qualified to deliver that capability although as you can see here in for a not everybody agrees because some feel that multi cloud is less secure more complicated in higher cost now the reality is that one two and three are true as is for a to a certain degree but generally I would say that multi cloud to date is more of a symptom of multi vendor then a clear strategy but that's beginning to change and there's a substantial opportunity out there for anyone to win so let's explore this a little bit and an exclusive sit-down with aunty Jessie prior to reinvent 2019 John Fourier got Jessie to talk about this trend here's what he said we have a large number of companies who have gone all-in on AWS and that's growing but there's gonna be other companies who decide that they're going to use multiple clouds for different reasons you wouldn't have to say that the vast majority of organizations pursuing cloud tend to pick a predominant provider that it's not a 50/50 scenario it's rather it's more like a 70/30 or 8020 or even a 90/10 faria went on to write somewhat paraphrasing I think Jesse in my view it's not hard to find the reasons for using multiple clouds right is M&A there's shadow IT there's developer preference but it's really not multi cloud by design it's just more of the same Enterprise IT mishmash that we've seen for decades so I generally have to say I agree with that but it is changing and I want to dig into that a bit so first let me recap the basic premise that we work off of first cloud is winning in the marketplace we know this building data centers is not the best use of capital unless you're a data center operator or a hyper scaler or you know maybe a SAS provider maybe so more and more work is going to continue to move to the cloud this was pretty much the first wave of cloud if you will a cloud of remote infrastructure services for very obvious workloads like web test dev analytics and certain SAS offerings the second wave of cloud which we've been talking about for 15 years was or should I say is a hybrid connecting remote cloud services to on-prem workloads and the third wave which is really hitting somewhat in parallel is this thing that we call multi cloud now it's not a perfect analogy but these multi generational waves remind us of the early days of networking now some of you may remember that years ago the industry was comprised of multiple dominant vendors that control their own proprietary network stacks for example IBM had SN a digital or deck had decnet all the many computer vendors had their own proprietary nets now in the early to mid-1980s the OSI model emerged with the objective of creating interoperability amongst all these different communication systems and the idea was we're going to standardize on protocols and the model had seven layers all the way from the physical layer through the application but really in reality was a pipe dream because we were way too complicated and and it sort of assumed that customers are gonna rip and replace their existing networks and then standardize on the OSI model now in reality that was never gonna happen however what it did is it open the door for new companies and you saw firms like Cisco and 3com emerged with tcp/ip and Ethernet becoming standardized and enabling connections between these systems and it totally changed the industry as we now know it so what does this have to do with multi-cloud well today you kind of have a similar situation with dominant public cloud leaders like AWS and azure and in this analogy they are the proprietary siloed networks of the past like IBM and digital they're more open obviously but still ultimately customers are going to put workloads on the right cloud for the right job and that includes putting work on Prem and connecting it to the public cloud with call it a substantially similar and ideally identical experience that's what we call hybrid now that's today's big wave and you're seeing it with Amazon's outposts and VMware and Amazon and Azure stack etc so while all this hybrid action is getting wired up customers are putting work into AWS and Azure and certainly Google and IBM cloud and the Oracle cloud and so forth now customers are wanting to connect across clouds with a substantially similar experience because that reduces cost and of course it speeds business outcomes that's what we call multi cloud now I'm not by any means suggesting that Amazon and Microsoft are gonna go the way of the mini computer vendors I don't believe that I think leaders today are much more savvy and tuned into how to surf the waves they're more paranoid and they're frankly just smarter than back in the 70s and 80s but it's not a rite of passage if they ignore the trends they will face challenges that could become driftwood so you're seeing the emergence of some of the moves from the vendor crowd the big whales connecting their infrastructure like AWS and VMware and Microsoft and Oracle quite interesting and IBM Red Hat with everybody cisco Dell HPE with everyone Google with anthos and a lot of other players all are trying to stake a claim in this hybrid and multi cloud world but you also have these emerging players that are innovators companies like CrowdStrike in security cumulant in the backup space and many dozens of well-funded players looking to grab a share of this multi cloud pie and it's worth pointing out that they're all kind of going gaga over kubernetes now of course this makes sense because kubernetes has emerged as a standard it's certainly very popular with developers why because it enables portability and allows them to package applications and of course all they're related to tendencies around those applications and then hand that app off for testing or deployment and it's gonna behave in the exact same way as when they ran it locally this we've seen and we know this but I want to share something I had a great conversation with Bernard golden yesterday and he made an excellent point about well you know kubernetes and containers he said this portability is a necessary but insufficient condition for multi cloud to succeed you still have to have an integrated management approach to security ID management monitoring performance reporting and end get into cross-training of people and skills etc ok I want to shift gears and as always I want to dig into these segments and bring in the et our perspective now pretty sure ETR is a lot of data on multi cloud from their ven meetings and other surveys but what I've done today is pulled some data that I'm using is indicators or proxies for multi cloud so I can't go out and buy me some multi cloud today it doesn't really exist in that form so what we have to do is highlight some of the trends in the data and draw some inferences from that so let's take a look at this chart what it shows is the relative position of a number of companies that my view are participating in the multi cloud arena the chart plots these companies showing net score or remember spending momentum on the y-axis and we've just opposed that to what's called market share on the x-axis market share is a measure of pervasiveness in the data set and what we've done is we've filtered on three sectors cloud container orchestration and container platforms using that as a proxy for multi cloud so these are buyers 791 of them as you can see by the end who are spenders in these three areas and we're isolating on select group of names and as a last filter we selected only companies with 50 or more results in the data set from this survey and we're using this as a multi cloud sector proxy so let me make a couple of comments here first I know kubernetes is not a company but ETR captures spending on kubernetes it's one of the hottest areas in the data set with a nearly 82% net score so we're capturing that as a reference point the next thing I want to say is you can see the big cloud players Azure and AWS and once again as in previous breaking analysis segments we see those two look they're leaders they're out the lead both companies showing very very strong momentum from a net score standpoint now AWS you might say why are you including a diversity if they don't explicitly have a multi cloud offering but in my view you cannot talk about multi cloud without including the leading cloud supplier you also see Google not so much in the market share of the big two but Google's showing strong net score we've talked about that before and they're very well positioned in multi cloud with anthos there behind their playing cloud agnostic to try to catch up again remember this is a proxy that we are running it's not necessarily a reflection of firms specific multi cloud offerings it's an indicator based on the filters that we've run now let's take a look at some of the others rubric the data protection specialists and CrowdStrike was a security darling they show some real strengths both have multi cloud offerings and they have strategies around their look at how she Corp they stand out as an important player in our view as they provide developer tooling to run secure and and deploy applications across clouds VMware cloud is I believe it's a vfc VMware cloud foundation and it's right there in the mix and you can also see fortunate in there as well executing from a security position I talked about them last week in my braking analysis they have a nice cloud portfolio and they're benefiting from execution strong execution let me call your attention to IBM in Red Hat Red Hat OpenShift look at their respective positions on this chart IBM spending velocity or net score is low but Red Hat has quite strong spending velocity and this is CEO Arvind Krishna's opportunity leverage IBM's large install based presence shown here as market share or pervasiveness and bring red hat to the right and leverage open shifts coolness to increase IBM's relevance and elevate it elevated spending velocity if arvind can make the kind of progress that i'm showing here in this picture he'll end up being CEO of the decade but that really is IBM's opportunity you can also see I put Oracle in the chart as well because of their multi cloud relationship with Microsoft which which I actually think has great potential for running mission-critical Oracle databases as I've noted many times I've you know IBM and Oracle both have clouds they're in the cloud game there are hyper scalar clouds but they have very large installed software franchises why is that important because it insulates them from the I ass ix knife fight and the pricing pressures that are putting forth by the hyper scalars the finally I have to mention Cisco I've said many times comes at multi cloud from a position of strength and networking and of course security they've got a huge market presence and not without challenges but they clearly are a player here ok now let's go on and look at some similar proxy data basically the same cut isolated on a few big players participating in multi cloud so again same cut as before but this is this shows a time series isolating on some of those Biggie's showing their net score or spending momentum in cloud and container related sectors that I talked about you got Azure leading GCP showing momentum IBM Red Hat with open shift and VMware all with solid net scores that are in the green cisco not as strong from a net score or spending velocity standpoint but it's shared in or presence in the data set is significant in this cut so two takeaways here really are one this is a wide-open race it's jump ball you really can't pick a winner yet and to each is gonna come at this from their own unique position of strength which brings me to how we see this space evolving this simple chart here really shows how we see the multi cloud infrastructure stack emerging starting at the bottom we show in the stack networking you gotta have networking to cross connect clouds and this is where cisco you has to win the day not optional for them some big players are going after the control plane including Microsoft arc Google with anthos VMware with tans ooh IBM Red Hat and we think eventually AWS is a possibility to enter that game on the data plane you got some big whales like Dell EMC you got NetApp you've got HPE at IBM the big storage players as well you have specialists like pure who's doing some interesting things in block in the cloud and cumulonimbus mention you have a bunch of companies like Veritas cohesive the rubric vMac TIFIA is gonna be in there CommVault I mentioned Klum EO before IBM is another one you got a whole bunch of folks in networking big portfolio plays from the likes of Cisco I said to network I met security from Cisco Palo Alto fortunate along with many of the security specialists we've highlighted in the past like CrowdStrike and there are many many others now on the leftmost side of this chart is really interesting we showed the full stack interconnects here we're referring to the direct cloud to cloud connections in functions up and down the entire stack examples here are AWS VMware yes that hybrid but also emerging at the edge and Microsoft and Oracle so the bottom line is we're seeing a battle brewing between the big companies with larger appetites gobbling up major portions of the market with integrated suites that are playing out within each layer of the stack competing with smaller and nimble players that are delivering best to breed function along those stack layers all right let me summarize so here are the questions that I said I would answer let's see how I did what the heck is multi cloud well let me first say it feels like everything in IT is additive what do I mean by that well we never get rid of stuff you keep things forever think about it the typical enterprise has multiple data centers they get many SAS providers more likely they have you know more than one Iast provider and they're starting to think about what should I do with the edge there is no standard for hybrid or multi cloud deployments you talk to 100 customers and you're gonna hear 120 or 150 or 300 different environments and several orders of magnitude of challenges that they face do we really need multi-cloud not an ideal world no we wouldn't need multi cloud but we talked about how we got here earlier how real is it how real is multi cloud now look companies use multiple clouds it's is it easy to do things across scope these clouds no so it's one of these problems that the industry is created that it can now make money fixing it's a vicious cycle I know but so goes the enterprise IT business what problems does it does multi-cloud solve and create look the goal of multi cloud should be that it creates more value than just the sum of the individual parts and that is clearly not happening yet in my opinion moving data around is a problem so ultimately the value comes from being able to bring cloud services to data that resides all over the place and as Bernard golden implied even with kubernetes the experience is far from seamless so we understand that technology created this problem and IT people processes and technology will be asked to clean up the crime scene as I often say it's a common story in enterprise tech we talked about how multi-cloud will evolve along a stack that it comprises specialists and big companies with very big appetites my opinion is that multi-cloud will evolve as a mishmash and vendor relationships the right tools for the right job the edge IT and OT tensions mergers and acquisitions these are gonna create even a bigger mess down the road we have well-funded companies that are exceedingly capable in this business and the leaders are gonna get their fair share cloud is a trillion-dollar market opportunity and there will not be in my opinion a winner-take-all and multi cloud so who wins like I've tried to lay out some of the leaders within different parts of the stack but there's way more to this story I do believe that the cloud players are well positioned why cuz they're they invented cloud EWS and others who followed right now Microsoft and Google are playing actively in that market but I definitely think AWS will I that space but I think VMware Red Hat IBM Cisco etc some of this from the respective positions of strength and I've sort of they have the added benefit of being cloud semi agnostic because generally they're not wed to a hyper scale cloud you know IBM as a cloud oracle as a cloud but it's on a hyper scale cloud and as always there's specialists that are gonna solve problems that are too small initially for the big whales to see so they get a leader lead bleed to market advantage but those opportunities can grow over time and allow these guys to reach escape velocity now so I'll say multi-cloud in and of itself is I believe an opportunity one that will be attacked from a position of strength within the stack and there are opportunities to be specialists up and down that stack the Akashi Corp alright this is Dave Volante for wiki bonds cube insights powered by ETR thanks for watching this breaking analysis and remember these episodes are available as podcasts you can check it out as you're driving your car wherever you listen to two podcasts you can connect with me at David Villante at Silicon angle calm or at D Volante on Twitter or please comment on my LinkedIn posts thanks for watching everyone we'll see you next time [Music]

(soft electronic music) >> Announcer: Live from Vancouver, Canada, it's theCUBE. Covering OpenStack Summit North America 2018. Brought to you by Red Hat, the OpenStack Foundation, and it's ecosystem partners. >> Welcome back, I'm Stu Miniman here with my cohost John Troyer and you're watching theCUBE's exclusive coverage of OpenStack Summit 2018 in Vancouver. Happy to welcome you back to the program, off the keynote stage this morning, Mark Shuttleworth, the founder of Canonical. Thank you so much for joining us. >> Stu, thanks for the invitation. >> Alright, so you've been involved in this OpenStack stuff for quite a bit. >> Right, since the beginning. >> I remember three years ago we were down in the other hall talking about the maturity of the platform. I think three years ago, it was like this container thing was kind of new and the basic infrastructure stuff was starting to get, in a nice term, boring. Because that meant we could go about business and be on the buzz of there's this cool new thing and we're going to kill Amazon, kill VMware, whatever else things that people thought that had a misconceived notion. So bring us forward to where we are 2018, what you're hearing from customers as you look at OpenStack and this community. >> Well, I think you pretty much called it. OpenStack very much now is about solving a real business problem, which is the automation of the data center and the cost parody of private data centers with public data centers. So I think we're at a time now where people understand the public cloud is a really good thing. It's great that you have these giant companies dueling it out to deliver better quality infrastructure at a better price. But then at the same time, having your own private infrastructure that runs cost-effectively is important. And OpenStack really is the only approach to that that exists today. And it's important to us that the conversation is increasingly about what we think really matters, which is the economics of owning it, the economics of running it, and how people can essentially keep that in line with what they get from the public cloud providers. >> Yeah, one of the barometers I use for vendors these days is in this multi-cloud world, where do you sit? Do you play with the HyperScalers? Are you a public cloud denier? Or, like most people you're, most people are somewhere in-between. In your keynote this morning, you were talking a bit about all of the HyperScalers that use your products as well as-- >> Ubuntu is at the heart of all of the major public cloud operations at multiple levels. So we see them as great drivers of innovation, great drivers of exposure of Ubuntu into the enterprise. We're still, by far, the number one platform used in public cloud by enterprises. It's hard to argue that public cloud is testing Dev now. It really, really isn't and so most of that is still Ubuntu. And now we're seeing that pendulum swing, all of those best practices, that consumption of Ubuntu, that understanding of what a leaner, meaner Enterprise Linux looks like. Bringing that back to the data center is exciting. For us, it's an opportunity to help enterprises rethink the data center to make it fully automated from the ground up. OpenStack is part of that, Kubernetes is part of that and now the cherry on top is really AI where people understand they have to be able to do it on public cloud, on private infrastructure and at the Edge. >> Mark, I wanted to talk about open source. Marketing open source, for a minute. We are obviously here, we're part of an open source community. Open source, defacto, has won the cloud technology stack wars. So there's one way of selling OpenStack where you pound on open a lot. >> I'm always a bit nervous about projects that put open. It sounds like they're sort of trying to gloss over something or wash over something or prove a point. They shouldn't have to. >> There's one about the philosophy of open source, which certainly has to stay there, right. Because that's what drove the innovation but I was kind of impressed about on the stage today, you talked about the benefits. You didn't say, well the venture's open. You said, well, we're facilitating these benefits. Speed to market, cost, et cetera. Can you talk about your approach, Canonical's approach to talking about this open source product in terms of its benefits? >> Sure, look, open source is a license. Under that license, there's room for a huge spectrum of interest and opinions and approaches. And I'd say that I certainly see an enormous amount of value in what I would call the passion-based open source story. Now, OpenStack is not that. It's too big, too complicated, to be one person's deep passion. It really isn't. But there's still a ton of innovation that happens in our world, across the full spectrum of what we see with open source, which is really experts trying to do something beautiful and elegant. And I still think that's really important in open source. You also have a new kind of dimension, which is almost like industrial trench warfare with open source. Which is huge organizations leveraging effectively their ability go get something widespread, widely adopted, quickly and efficiently by essentially publishing it as open source. And often, people get confused between these two ends of the spectrum. There's a bunch in between. What I like about OpenStack is that I think it's over the industrial trench warfare phase. You know, you just don't see a ton of people showing up here to throw parties and prove to everyone how cool they are. They've moved on to other open source projects. The people who are here are people who essentially have the real problem of I want to automate my data center, I want to have, essentially, a cloud that runs cost-effectively in my data center that I can use as part of a multi-cloud strategy. And so now I think we're in to that sort of, a more mature place with OpenStack. We're not either sort of artisan or craftsmen oriented, nor are we a guns blazing brand oriented. It's kind of now just solving the problems. >> Mark, there's still some nay-sayers out in the marketplace. Either they say that this never matured, there's a certain analyst firm that put out a report a couple of months ago that, it kind of denigrated what's happening here. And then there's others that, as you said, off chasing that next big wave of open source. What are you hearing from your customers? You've got a good footprint around the globe. >> So that report is nonsense, for a start. They're always wrong, right. If they're hyping something, they're wrong and if they're dissing something then they're usually wrong too. >> Stu: They have a cycle for that, I believe. (chuckling) >> Exactly. Selling gold at the barroom. Here's how I see it. I think that enterprises have a real problem, which is how do they create private cloud infrastructure. OpenStack had a real problem in that it had too many opinions, too many promises. Essentially a governing structure not a leadership structure. Our position on this has always been focus on the stuff that is really necessary. There was a ton of nonsense in OpenStack and that stuff is all failing. And so what? It was never essential to the mission. The mission is stand up a data center in an automated way, provide it, essentially, as resources, as a service to everybody who you think is authorized to be there, effectively. Segment and operate that efficiently. There's only a small part of OpenStack that was ever really focused on that. That's the stuff that's succeeding, that's the stuff we deliver. That's the stuff, we think very carefully about how to automate it so that, essentially, anybody can consume it at reasonable prices. Now, we have learned that it's better for us to do the operations almost. It's better for us actually to take it to people as a solution, say look, explain your requirements to us then let us architect that cloud with you then let us build that cloud then let us operate that cloud. Until it's all stable and the economics are good, then you can take over. I think what we have seen is that you ask every single different company to build OpenStack, they will make a bunch of mistakes and then they'll say OpenStack is the problem. OpenStack's not the problem. Because we do it again and again and again, because we do it in many different data centers, because we do it with many different industries, we're able to essentially put it on rails. When you consume OpenStack that way it's super cheap. These aren't my numbers, analysts have studied the costs of public infrastructure, the cost of the established, incumbent enterprise, virtualization solutions and so on. And they found that when you consume OpenStack from Canonical it is much, much cheaper than any of your other options in your own private data center. And I think that's a success that OpenStack should be proud of. >> Alright, you've always done a good job at poking at some of the discussions happening in the industry. I wouldn't say I was surprised but you were highlighting AI as something that was showing a lot of promise. People have been a little hot and cold depending on what part of the market you're at. Tell us about AI and I'd love to hear your thoughts in general. Kubernetes, Serverless, and ask you to talk about some of those new trends that are out there. >> Sure, the big problem with data science was always finding the right person to ask the right question. So you could get all the data in the world in a data lake but now you have to hire somebody who instinctively has to ask the right question that you can test out of that data. And that's a really hard problem. What machine learning does is kind of inverts the problem. It says, well, why don't we put all that data through a pattern matching system and then we'll end up with something that reflects the underlying patterns, even if we don't know what they are. Now, we can essentially say if you saw this, what would you expect? And that turns out to be a very powerful way to deal with huge amounts of data that, previously, you had to kind of have this magical intuition to kind of get to the bottom of. So I think machine learning is real, it's valuable in almost every industry, and the challenges now are really about standardizing underlying operations so that the people who focus on the business problems can, essentially, use them. So that's really what I wanted to show today is us working with, in that case it was Google, but you can generalize that. To standardize the experience for an institution who wants to hire developers, have them effectively build machine-driven models if they can then put those into production. There's a bunch of stuff I didn't show that's interesting. For example, you really want to take the learnings from machine-learning and you want to put those at the Edge. You want to react to what's happening as close to where it's happening as possible. So there's a bunch of stuff that we're working on with various companies. It's all about taking that AI outcome right to the Edge, to IOT, to Edge Cloud but we don't have time to get in to all of that today. >> Yeah, and Ubuntu is at the Edge, on the mobile platform. >> So we're in a great position that we're on the Cloud. Now you see what we're doing in the data center for enterprises, effectively recrafting the data center has a much leaner, more automated machine. Really driving down the cost of the data center. And yes, we're on the higher-end things. We're never going to be on the LightBulb. We're a full general-purpose operating system. But you can run Ubuntu on a $10 board now and that means that people are taking it everywhere. Amazon, for example, put Ubuntu on the DeepLens so that's a great example of AI at the edge. It's super exciting. >> So the Kubernetes, Serverless-type applications, what are your thinkings around there? >> Serverless is a lovely way to think about the flow of code in a distributed system. It's a really nice way to solve certain problems. What we haven't yet seen is we haven't seen a Serverless framework that you can port. We've seen great Serverless experiences being built inside the various public clouds but there's nothing consistent about them. Everything that you invest in a particular place is very useful there but you can't imagine taking that anywhere else. I think that's fine. >> Stu: Today's primarily Lando. >> And I think the other clouds have done a credible job of getting there quickly. But kudos to Amazon for kind of pioneering that. I do think we'll see generalized Serverless, it just doesn't exist at the moment and as soon as it does we'll be itching to get it into people's hands. >> Okay, yeah? >> Well, I just wanted to pull out something that you had said in case people miss it, you talked about managed OpenStack. And that, I think, managed Kubernetes has been a trend over the last year. Managed OpenStack now. Has been trans-- >> With these complex pieces of infrastructure, you could easily drown in learning it all and if you're only ever going to do one, maybe it makes sense to have somebody else do it for a while. You can always take it over later. So we're unusual in that we will essentially standup something complex like an OpenStack or a Kubernetes, operate it as long as people want and then train them to take over. So we're not exclusively managed and we're not exclusively arms-length. We're happy to start the one way and then hand over. >> I think that's an important development, though, that's been developing as the systems get more complicated. One UNIX admin needs a whole new skill set or broader skill set now that we're orchestrating a whole cloud so that's, I think that's great. And that's interesting. Anything else you're looking forward to, in terms of operation models. I guess we've said, Ubuntu everywhere from the edge to the center and now managed, as well. Anything else we're looking at in terms of operators should be looking at? >> Well, I think it just is going to stay sort of murky for a while simply because each different group inside a large institution has a boundary of their authority and to them, that's the edge. (chuckling) And so the term is heavily overloaded. But I would say, ultimately, there are a couple of underlying problems that have to be solved and if you look at the reference architectures that the various large institutions are putting out, they all show you how they're trying to attack these patterns using Ubuntu. One is physical provisioning. The one thing that's true with every Edge deployment is there are no humans there. So you can't kind of Band-Aid over the idea that when something breaks you need to completely be able to reset it from the ground up. So MAAS, Middle as a Service, shows up in the reference architectures from AT&T and from SoftBank and from Dorich Telecom and a bunch of others because it solves their problem. It's the smallest piece of software you can use to take one server or 10 servers or 100 servers and just reflash them with Windows or CentOS or whatever you need. That's one thing. The other thing that I think is consistently true in all these different H-Cloud permutations or combinations is that overhead's really toxic. If you need three nodes of overhead for a hundred node OpenStack, it's 3%. For a thousand node OpenStack, it's .3%. It's nothing, you won't notice it. If you need three nodes of OpenStack for a nine node Edge Cloud, well then that's 30% of your infrastructure costs. So really thinking through how to get the overhead down is kind of a key for us. And all the projects with telcos in particular that we're working, that's really what we bring is that underlying understanding and some of those really lightweight tools to solve those problems. On top of that, they're all different, right. Kubenetes here, Lixti there, OpenStack on the next one. AI everywhere. But those two problems, I think, are the consistent things we see as a pattern in the Edge. >> Alright, so Mark, last question I have for you. Company update. So last year we talked a little bit about focusing, where the company's going, talked a bit about the business model and you said to me, "Developers should never have to pay for anything." It's the governance people and everything like that. Give us the company update, everything from rumors from hey, maybe you're IPO-ing to what's happening, what can you share? >> Right, so the twin areas of focus, IOT and cloud infrastructure. IOT continues to be an area of R and D for us so we're still essentially underwriting an IOT investment. I'm very excited about that. I think it's the right thing to be doing at the moment. I think IOT is the next wave, effectively, and we're in a special position. We really can get down, both economically and operationally, into that sort of small itch kind of scenario. Cloud, for us, is a growth story. I talked a little bit about taking Ubuntu and Canonical into the finance sector. In one year, we closed deals with 20% of the top 20 banks in the world to build Ubuntu base and open infrastructure. That's a huge shift from the traditional dependence exclusively on VMware Red Hat. Now, suddenly, Ubuntu's in there, Canonical's in there. I think everybody understands that telcos really love Ubuntu and so that continues to grow for us. Commercially, we're expanding both in Emir and here in the Americas. I won't talk more about our corporate plans other than to say I see no reason for us to scramble to cover any other areas. I think cloud infrastructure and IOT is plenty for one company. For me, it's a privilege to combine that kind of business with what happens in the Ubuntu community. I'm still very passionate about the fact that we enable people to consume free software and innovate. And we do that without any friction. We don't have an enterprise version of Ubuntu. We don't need an enterprise version of Ubuntu, the whole thing's enterprise. Even if you're a one-person startup. >> Mark Shuttleworth, always a pleasure to catch up. Thank you so much for joining us. >> Mark: Thank you, Stu. >> For John Troyer, I'm Stu Miniman. Back with lots more coverage here from OpenStack Summit 2018 in Vancouver. Thanks for watching theCUBE. (soft electronic music)