>> 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 pandemic has changed the way we think about and predict the future. As we enter the third year of a global pandemic, we see the significant impact that it's had on technology strategy, spending patterns, and company fortunes Much has changed. And while many of these changes were forced reactions to a new abnormal, the trends that we've seen over the past 24 months have become more entrenched, and point to the way that's coming ahead in the technology business. Hello and welcome to this week's Wikibon CUBE Insights powered by ETR. In this Breaking Analysis, we welcome our partner and colleague and business friend, Erik Porter Bradley, as we deliver what's becoming an annual tradition for Erik and me, our predictions for Enterprise Technology in 2022 and beyond Erik, welcome. Thanks for taking some time out. >> Thank you, Dave. Luckily we did pretty well last year, so we were able to do this again. So hopefully we can keep that momentum going. >> Yeah, you know, I want to mention that, you know, we get a lot of inbound predictions from companies and PR firms that help shape our thinking. But one of the main objectives that we have is we try to make predictions that can be measured. That's why we use a lot of data. Now not all will necessarily fit that parameter, but if you've seen the grading of our 2021 predictions that Erik and I did, you'll see we do a pretty good job of trying to put forth prognostications that can be declared correct or not, you know, as black and white as possible. Now let's get right into it. Our first prediction, we're going to go run into spending, something that ETR surveys for quarterly. And we've reported extensively on this. We're calling for tech spending to increase somewhere around 8% in 2022, we can see there on the slide, Erik, we predicted spending last year would increase by 4% IDC. Last check was came in at five and a half percent. Gardner was somewhat higher, but in general, you know, not too bad, but looking ahead, we're seeing an acceleration from the ETR September surveys, as you can see in the yellow versus the blue bar in this chart, many of the SMBs that were hard hit by the pandemic are picking up spending again. And the ETR data is showing acceleration above the mean for industries like energy, utilities, retail, and services, and also, notably, in the Forbes largest 225 private companies. These are companies like Mars or Koch industries. They're predicting well above average spending for 2022. So Erik, please weigh in here. >> Yeah, a lot to bring up on this one, I'm going to be quick. So 1200 respondents on this, over a third of which were at the C-suite level. So really good data that we brought in, the usual bucket of, you know, fortune 500, global 2000 make up the meat of that median, but it's 8.3% and rising with momentum as we see. What's really interesting right now is that energy and utilities. This is usually like, you know, an orphan stock dividend type of play. You don't see them at the highest point of tech spending. And the reason why right now is really because this state of tech infrastructure in our energy infrastructure needs help. And it's obvious, remember the Florida municipality break reach last year? When they took over the water systems or they had the ability to? And this is a real issue, you know, there's bad nation state actors out there, and I'm no alarmist, but the energy and utility has to spend this money to keep up. It's really important. And then you also hit on the retail consumer. Obviously what's happened, the work from home shift created a shop from home shift, and the trends that are happening right now in retail. If you don't spend and keep up, you're not going to be around much longer. So I think the really two interesting things here to call out are energy utilities, usually a laggard in IT spend and it's leading, and also retail consumer, a lot of changes happening. >> Yeah. Great stuff. I mean, I recall when we entered the pandemic, really ETR was the first to emphasize the impact that work from home was going to have, so I really put a lot of weight on this data. Okay. Our next prediction is we're going to get into security, it's one of our favorite topics. And that is that the number one priority that needs to be addressed by organizations in 2022 is security and you can see, in this slide, the degree to which security is top of mind, relative to some other pretty important areas like cloud, productivity, data, and automation, and some others. Now people may say, "Oh, this is obvious." But I'm going to add some context here, Erik, and then bring you in. First, organizations, they don't have unlimited budgets. And there are a lot of competing priorities for dollars, especially with the digital transformation mandate. And depending on the size of the company, this data will vary. For example, while security is still number one at the largest public companies, and those are of course of the biggest spenders, it's not nearly as pronounced as it is on average, or in, for example, mid-sized companies and government agencies. And this is because midsized companies or smaller companies, they don't have the resources that larger companies do. Larger companies have done a better job of securing their infrastructure. So these mid-size firms are playing catch up and the data suggests cyber is even a bigger priority there, gaps that they have to fill, you know, going forward. And that's why we think there's going to be more demand for MSSPs, managed security service providers. And we may even see some IPO action there. And then of course, Erik, you and I have talked about events like the SolarWinds Hack, there's more ransomware attacks, other vulnerabilities. Just recently, like Log4j in December. All of this has heightened concerns. Now I want to talk a little bit more about how we measure this, you know, relatively, okay, it's an obvious prediction, but let's stick our necks out a little bit. And so in addition to the rise of managed security services, we're calling for M&A and/or IPOs, we've specified some names here on this chart, and we're also pointing to the digital supply chain as an area of emphasis. Again, Log4j really shone that under a light. And this is going to help the likes of Auth0, which is now Okta, SailPoint, which is called out on this chart, and some others. We're calling some winners in end point security. Erik, you're going to talk about sort of that lifecycle, that transformation that we're seeing, that migration to new endpoint technologies that are going to benefit from this reset refresh cycle. So Erik, weigh in here, let's talk about some of the elements of this prediction and some of the names on that chart. >> Yeah, certainly. I'm going to start right with Log4j top of mind. And the reason why is because we're seeing a real paradigm shift here where things are no longer being attacked at the network layer, they're being attacked at the application layer, and in the application stack itself. And that is a huge shift left. And that's taking in DevSecOps now as a real priority in 2022. That's a real paradigm shift over the last 20 years. That's not where attacks used to come from. And this is going to have a lot of changes. You called out a bunch of names in there that are, they're either going to work. I would add to that list Wiz. I would add Orca Security. Two names in our emerging technology study, in addition to the ones you added that are involved in cloud security and container security. These names are either going to get gobbled up. So the traditional legacy names are going to have to start writing checks and, you know, legacy is not fair, but they're in the data center, right? They're, on-prem, they're not cloud native. So these are the names that money is going to be flowing to. So they're either going to get gobbled up, or we're going to see some IPO's. And on the other thing I want to talk about too, is what you mentioned. We have CrowdStrike on that list, We have SentinalOne on the list. Everyone knows them. Our data was so strong on Tanium that we actually went positive for the first time just today, just this morning, where that was released. The trifecta of these are so important because of what you mentioned, under resourcing. We can't have security just tell us when something happens, it has to automate, and it has to respond. So in this next generation of EDR and XDR, an automated response has to happen because people are under-resourced, salaries are really high, there's a skill shortage out there. Security has to become responsive. It can't just monitor anymore. >> Yeah. Great. And we should call out too. So we named some names, Snyk, Aqua, Arctic Wolf, Lacework, Netskope, Illumio. These are all sort of IPO, or possibly even M&A candidates. All right. Our next prediction goes right to the way we work. Again, something that ETR has been on for awhile. We're calling for a major rethink in remote work for 2022. We had predicted last year that by the end of 2021, there'd be a larger return to the office with the norm being around a third of workers permanently remote. And of course the variants changed that equation and, you know, gave more time for people to think about this idea of hybrid work and that's really come in to focus. So we're predicting that is going to overtake fully remote as the dominant work model with only about a third of the workers back in the office full-time. And Erik, we expect a somewhat lower percentage to be fully remote. It's now sort of dipped under 30%, at around 29%, but it's still significantly higher than the historical average of around 15 to 16%. So still a major change, but this idea of hybrid and getting hybrid right, has really come into focus. Hasn't it? >> Yeah. It's here to stay. There's no doubt about it. We started this in March of 2020, as soon as the virus hit. This is the 10th iteration of the survey. No one, no one ever thought we'd see a number where only 34% of people were going to be in office permanently. That's a permanent number. They're expecting only a third of the workers to ever come back fully in office. And against that, there's 63% that are saying their permanent workforce is going to be either fully remote or hybrid. And this, I can't really explain how big of a paradigm shift this is. Since the start of the industrial revolution, people leave their house and go to work. Now they're saying that's not going to happen. The economic impact here is so broad, on so many different areas And, you know, the reason is like, why not? Right? The productivity increase is real. We're seeing the productivity increase. Enterprises are spending on collaboration tools, productivity tools, We're seeing an increased perception in productivity of their workforce. And the CFOs can cut down an expense item. I just don't see a reason why this would end, you know, I think it's going to continue. And I also want to point out these results, as high as they are, were before the Omicron wave hit us. I can only imagine what these results would have been if we had sent the survey out just two or three weeks later. >> Yeah. That's a great point. Okay. Next prediction, we're going to look at the supply chain, specifically in how it's affecting some of the hardware spending and cloud strategies in the future. So in this chart, ETRS buyers, have you experienced problems procuring hardware as a result of supply chain issues? And, you know, despite the fact that some companies are, you know, I would call out Dell, for example, doing really well in terms of delivering, you can see that in the numbers, it's pretty clear, there's been an impact. And that's not not an across the board, you know, thing where vendors are able to deliver, especially acute in PCs, but also pronounced in networking, also in firewall servers and storage. And what's interesting is how companies are responding and reacting. So first, you know, I'm going to call the laptop and PC demand staying well above pre-COVID norms. It had peaked in 2012. Pre-pandemic it kept dropping and dropping and dropping, in terms of, you know, unit volume, where the market was contracting. And we think can continue to grow this year in double digits in 2022. But what's interesting, Erik, is when you survey customers, is despite the difficulty they're having in procuring network hardware, there's as much of a migration away from existing networks to the cloud. You could probably comment on that. Their networks are more fossilized, but when it comes to firewalls and servers and storage, there's a much higher propensity to move to the cloud. 30% of customers that ETR surveyed will replace security appliances with cloud services and 41% and 34% respectively will move to cloud compute and storage in 2022. So cloud's relentless march on traditional on-prem models continues. Erik, what do you make of this data? Please weigh in on this prediction. >> As if we needed another reason to go to the cloud. Right here, here it is yet again. So this was added to the survey by client demand. They were asking about the procurement difficulties, the supply chain issues, and how it was impacting our community. So this is the first time we ran it. And it really was interesting to see, you know, the move there. And storage particularly I found interesting because it correlated with a huge jump that we saw on one of our vendor names, which was Rubrik, had the highest net score that it's ever had. So clearly we're seeing some correlation with some of these names that are there, you know, really well positioned to take storage, to take data into the cloud. So again, you didn't need another reason to, you know, hasten this digital transformation, but here we are, we have it yet again, and I don't see it slowing down anytime soon. >> You know, that's a really good point. I mean, it's not necessarily bad news for the... I mean, obviously you wish that it had no change, would be great, but things, you know, always going to change. So we'll talk about this a little bit later when we get into the Supercloud conversation, but this is an opportunity for people who embrace the cloud. So we'll come back to that. And I want to hang on cloud a bit and share some recent projections that we've made. The next prediction is the big four cloud players are going to surpass 167 billion, an IaaS and PaaS revenue in 2022. We track this. Observers of this program know that we try to create an apples to apples comparison between AWS, Azure, GCP and Alibaba in IaaS and PaaS. So we're calling for 38% revenue growth in 2022, which is astounding for such a massive market. You know, AWS is probably not going to hit a hundred billion dollar run rate, but they're going to be close this year. And we're going to get there by 2023, you know they're going to surpass that. Azure continues to close the gap. Now they're about two thirds of the size of AWS and Google, we think is going to surpass Alibaba and take the number three spot. Erik, anything you'd like to add here? >> Yeah, first of all, just on a sector level, we saw our sector, new survey net score on cloud jumped another 10%. It was already really high at 48. Went up to 53. This train is not slowing down anytime soon. And we even added an edge compute type of player, like CloudFlare into our cloud bucket this year. And it debuted with a net score of almost 60. So this is really an area that's expanding, not just the big three, but everywhere. We even saw Oracle and IBM jump up. So even they're having success, taking some of their on-prem customers and then selling them to their cloud services. This is a massive opportunity and it's not changing anytime soon, it's going to continue. >> And I think the operative word there is opportunity. So, you know, the next prediction is something that we've been having fun with and that's this Supercloud becomes a thing. Now, the reason I say we've been having fun is we put this concept of Supercloud out and it's become a bit of a controversy. First, you know, what the heck's the Supercloud right? It's sort of a buzz-wordy term, but there really is, we believe, a thing here. We think there needs to be a rethinking or at least an evolution of the term multi-cloud. And what we mean is that in our view, you know, multicloud from a vendor perspective was really cloud compatibility. It wasn't marketed that way, but that's what it was. Either a vendor would containerize its legacy stack, shove it into the cloud, or a company, you know, they'd do the work, they'd build a cloud native service on one of the big clouds and they did do it for AWS, and then Azure, and then Google. But there really wasn't much, if any, leverage across clouds. Now from a buyer perspective, we've always said multicloud was a symptom of multi-vendor, meaning I got different workloads, running in different clouds, or I bought a company and they run on Azure, and I do a lot of work on AWS, but generally it wasn't necessarily a prescribed strategy to build value on top of hyperscale infrastructure. There certainly was somewhat of a, you know, reducing lock-in and hedging the risk. But we're talking about something more here. We're talking about building value on top of the hyperscale gift of hundreds of billions of dollars in CapEx. So in addition, we're not just talking about transforming IT, which is what the last 10 years of cloud have been like. And, you know, doing work in the cloud because it's cheaper or simpler or more agile, all of those things. So that's beginning to change. And this chart shows some of the technology vendors that are leaning toward this Supercloud vision, in our view, building on top of the hyperscalers that are highlighted in red. Now, Jerry Chan at Greylock, they wrote a piece called Castles in the Cloud. It got our thinking going, and he and the team at Greylock, they're building out a database of all the cloud services and all the sub-markets in cloud. And that got us thinking that there's a higher level of abstraction coalescing in the market, where there's tight integration of services across clouds, but the underlying complexity is hidden, and there's an identical experience across clouds, and even, in my dreams, on-prem for some platforms, so what's new or new-ish and evolving are things like location independence, you've got to include the edge on that, metadata services to optimize locality of reference and data source awareness, governance, privacy, you know, application independent and dependent, actually, recovery across clouds. So we're seeing this evolve. And in our view, the two biggest things that are new are the technology is evolving, where you're seeing services truly integrate cross-cloud. And the other big change is digital transformation, where there's this new innovation curve developing, and it's not just about making your IT better. It's about SaaS-ifying and automating your entire company workflows. So Supercloud, it's not just a vendor thing to us. It's the evolution of, you know, the, the Marc Andreessen quote, "Every company will be a SaaS company." Every company will deliver capabilities that can be consumed as cloud services. So Erik, the chart shows spending momentum on the y-axis and net score, or presence in the ETR data center, or market share on the x-axis. We've talked about snowflake as the poster child for this concept where the vision is you're in their cloud and sharing data in that safe place. Maybe you could make some comments, you know, what do you think of this Supercloud concept and this change that we're sensing in the market? >> Well, I think you did a great job describing the concept. So maybe I'll support it a little bit on the vendor level and then kind of give examples of the ones that are doing it. You stole the lead there with Snowflake, right? There is no better example than what we've seen with what Snowflake can do. Cross-portability in the cloud, the ability to be able to be, you know, completely agnostic, but then build those services on top. They're better than anything they could offer. And it's not just there. I mean, you mentioned edge compute, that's a whole nother layer where this is coming in. And CloudFlare, the momentum there is out of control. I mean, this is a company that started off just doing CDN and trying to compete with Okta Mite. And now they're giving you a full soup to nuts with security and actual edge compute layer, but it's a fantastic company. What they're doing, it's another great example of what you're seeing here. I'm going to call out HashiCorp as well. They're more of an infrastructure services, a little bit more of an open-source freemium model, but what they're doing as well is completely cloud agnostic. It's dynamic. It doesn't care if you're in a container, it doesn't matter where you are. They recently IPO'd and they're down 25%, but their data looks so good across both of our emerging technology and TISA survey. It's certainly another name that's playing on this. And another one that we mentioned as well is Rubrik. If you need storage, compute, and in the cloud layer and you need to be agnostic to it, they're another one that's really playing in this space. So I think it's a great concept you're bringing up. I think it's one that's here to stay and there's certainly a lot of vendors that fit into what you're describing. >> Excellent. Thank you. All right, let's shift to data. The next prediction, it might be a little tough to measure. Before I said we're trying to be a little black and white here, but it relates to Data Mesh, which is, the ideas behind that term were created by Zhamak Dehghani of ThoughtWorks. And we see Data Mesh is really gaining momentum in 2022, but it's largely going to be, we think, confined to a more narrow scope. Now, the impetus for change in data architecture in many companies really stems from the fact that their Hadoop infrastructure really didn't solve their data problems and they struggle to get more value out of their data investments. Data Mesh prescribes a shift to a decentralized architecture in domain ownership of data and a shift to data product thinking, beyond data for analytics, but data products and services that can be monetized. Now this a very powerful in our view, but they're difficult for organizations to get their heads around and further decentralization creates the need for a self-service platform and federated data governance that can be automated. And not a lot of standards around this. So it's going to take some time. At our power panel a couple of weeks ago on data management, Tony Baer predicted a backlash on Data Mesh. And I don't think it's going to be so much of a backlash, but rather the adoption will be more limited. Most implementations we think are going to use a starting point of AWS and they'll enable domains to access and control their own data lakes. And while that is a very small slice of the Data Mesh vision, I think it's going to be a starting point. And the last thing I'll say is, this is going to take a decade to evolve, but I think it's the right direction. And whether it's a data lake or a data warehouse or a data hub or an S3 bucket, these are really, the concept is, they'll eventually just become nodes on the data mesh that are discoverable and access is governed. And so the idea is that the stranglehold that the data pipeline and process and hyper-specialized roles that they have on data agility is going to evolve. And decentralized architectures and the democratization of data will eventually become a norm for a lot of different use cases. And Erik, I wonder if you'd add anything to this. >> Yeah. There's a lot to add there. The first thing that jumped out to me was that that mention of the word backlash you said, and you said it's not really a backlash, but what it could be is these are new words trying to solve an old problem. And I do think sometimes the industry will notice that right away and maybe that'll be a little pushback. And the problems are what you already mentioned, right? We're trying to get to an area where we can have more assets in our data site, more deliverable, and more usable and relevant to the business. And you mentioned that as self-service with governance laid on top. And that's really what we're trying to get to. Now, there's a lot of ways you can get there. Data fabric is really the technical aspect and data mesh is really more about the people, the process, and the governance, but the two of those need to meet, in order to make that happen. And as far as tools, you know, there's even cataloging names like Informatica that play in this, right? Istio plays in this, Snowflake plays in this. So there's a lot of different tools that will support it. But I think you're right in calling out AWS, right? They have AWS Lake, they have AWS Glue. They have so much that's trying to drive this. But I think the really important thing to keep here is what you said. It's going to be a decade long journey. And by the way, we're on the shoulders of giants a decade ago that have even gotten us to this point to talk about these new words because this has been an ongoing type of issue, but ultimately, no matter which vendors you use, this is going to come down to your data governance plan and the data literacy in your business. This is really about workflows and people as much as it is tools. So, you know, the new term of data mesh is wonderful, but you still have to have the people and the governance and the processes in place to get there. >> Great, thank you for that, Erik. Some great points. All right, for the next prediction, we're going to shine the spotlight on two of our favorite topics, Snowflake and Databricks, and the prediction here is that, of course, Databricks is going to IPO this year, as expected. Everybody sort of expects that. And while, but the prediction really is, well, while these two companies are facing off already in the market, they're also going to compete with each other for M&A, especially as Databricks, you know, after the IPO, you're going to have, you know, more prominence and a war chest. So first, these companies, they're both looking pretty good, the same XY graph with spending velocity and presence and market share on the horizontal axis. And both Snowflake and Databricks are well above that magic 40% red dotted line, the elevated line, to us. And for context, we've included a few other firms. So you can see kind of what a good position these two companies are really in, especially, I mean, Snowflake, wow, it just keeps moving to the right on this horizontal picture, but maintaining the next net score in the Y axis. Amazing. So, but here's the thing, Databricks is using the term Lakehouse implying that it has the best of data lakes and data warehouses. And Snowflake has the vision of the data cloud and data sharing. And Snowflake, they've nailed analytics, and now they're moving into data science in the domain of Databricks. Databricks, on the other hand, has nailed data science and is moving into the domain of Snowflake, in the data warehouse and analytics space. But to really make this seamless, there has to be a semantic layer between these two worlds and they're either going to build it or buy it or both. And there are other areas like data clean rooms and privacy and data prep and governance and machine learning tooling and AI, all that stuff. So the prediction is they'll not only compete in the market, but they'll step up and in their competition for M&A, especially after the Databricks IPO. We've listed some target names here, like Atscale, you know, Iguazio, Infosum, Habu, Immuta, and I'm sure there are many, many others. Erik, you care to comment? >> Yeah. I remember a year ago when we were talking Snowflake when they first came out and you, and I said, "I'm shocked if they don't use this war chest of money" "and start going after more" "because we know Slootman, we have so much respect for him." "We've seen his playbook." And I'm actually a little bit surprised that here we are, at 12 months later, and he hasn't spent that money yet. So I think this prediction's just spot on. To talk a little bit about the data side, Snowflake is in rarefied air. It's all by itself. It is the number one net score in our entire TISA universe. It is absolutely incredible. There's almost no negative intentions. Global 2000 organizations are increasing their spend on it. We maintain our positive outlook. It's really just, you know, stands alone. Databricks, however, also has one of the highest overall net sentiments in the entire universe, not just its area. And this is the first time we're coming up positive on this name as well. It looks like it's not slowing down. Really interesting comment you made though that we normally hear from our end-user commentary in our panels and our interviews. Databricks is really more used for the data science side. The MLAI is where it's best positioned in our survey. So it might still have some catching up to do to really have that caliber of usability that you know Snowflake is seeing right now. That's snowflake having its own marketplace. There's just a lot more to Snowflake right now than there is Databricks. But I do think you're right. These two massive vendors are sort of heading towards a collision course, and it'll be very interesting to see how they deploy their cash. I think Snowflake, with their incredible management and leadership, probably will make the first move. >> Well, I think you're right on that. And by the way, I'll just add, you know, Databricks has basically said, hey, it's going to be easier for us to come from data lakes into data warehouse. I'm not sure I buy that. I think, again, that semantic layer is a missing ingredient. So it's going to be really interesting to see how this plays out. And to your point, you know, Snowflake's got the war chest, they got the momentum, they've got the public presence now since November, 2020. And so, you know, they're probably going to start making some aggressive moves. Anyway, next prediction is something, Erik, that you and I have talked about many, many times, and that is observability. I know it's one of your favorite topics. And we see this world screaming for more consolidation it's going all in on cloud native. These legacy stacks, they're fighting to stay relevant, but the direction is pretty clear. And the same XY graph lays out the players in the field, with some of the new entrants that we've also highlighted, like Observe and Honeycomb and ChaosSearch that we've talked about. Erik, we put a big red target around Splunk because everyone wants their gold. So please give us your thoughts. >> Oh man, I feel like I've been saying negative things about Splunk for too long. I've got a bad rap on this name. The Splunk shareholders come after me all the time. Listen, it really comes down to this. They're a fantastic company that was designed to do logging and monitoring and had some great tool sets around what you could do with it. But they were designed for the data center. They were designed for prem. The world we're in now is so dynamic. Everything I hear from our end user community is that all net new workloads will be going to cloud native players. It's that simple. So Splunk has entrenched. It's going to continue doing what it's doing and it does it really, really well. But if you're doing something new, the new workloads are going to be in a dynamic environment and that's going to go to the cloud native players. And in our data, it is extremely clear that that means Datadog and Elastic. They are by far number one and two in net score, increase rates, adoption rates. It's not even close. Even New Relic actually is starting to, you know, entrench itself really well. We saw New Relic's adoption's going up, which is super important because they went to that freemium model, you know, to try to get their little bit of an entrenched customer base and that's working as well. And then you made a great list here, of all the new entrants, but it goes beyond this. There's so many more. In our emerging technology survey, we're seeing Century, Catchpoint, Securonix, Lucid Works. There are so many options in this space. And let's not forget, the biggest data that we're seeing is with Grafana. And Grafana labs as yet to turn on their enterprise. Elastic did it, why can't Grafana labs do it? They have an enterprise stack. So when you look at how crowded this space is, there has to be consolidation. I recently hosted a panel and every single guy on that panel said, "Please give me a consolidation." Because they're the end users trying to actually deploy these and it's getting a little bit confusing. >> Great. Thank you for that. Okay. Last prediction. Erik, might be a little out of your wheelhouse, but you know, you might have some thoughts on it. And that's a hybrid events become the new digital model and a new category in 2022. You got these pure play digital or virtual events. They're going to take a back seat to in-person hybrids. The virtual experience will eventually give way to metaverse experiences and that's going to take some time, but the physical hybrid is going to drive it. And metaverse is ultimately going to define the virtual experience because the virtual experience today is not great. Nobody likes virtual. And hybrid is going to become the business model. Today's pure virtual experience has to evolve, you know, theCUBE first delivered hybrid mid last decade, but nobody really wanted it. We did Mobile World Congress last summer in Barcelona in an amazing hybrid model, which we're showing in some of the pictures here. Alex, if you don't mind bringing that back up. And every physical event that we're we're doing now has a hybrid and virtual component, including the pre-records. You can see in our studios, you see that the green screen. I don't know. Erik, what do you think about, you know, the Zoom fatigue and all this. I know you host regular events with your round tables, but what are your thoughts? >> Well, first of all, I think you and your company here have just done an amazing job on this. So that's really your expertise. I spent 20 years of my career hosting intimate wall street idea dinners. So I'm better at navigating a wine list than I am navigating a conference floor. But I will say that, you know, the trend just goes along with what we saw. If 35% are going to be fully remote. If 70% are going to be hybrid, then our events are going to be as well. I used to host round table dinners on, you know, one or two nights a week. Now those have gone virtual. They're now panels. They're now one-on-one interviews. You know, we do chats. We do submitted questions. We do what we can, but there's no reason that this is going to change anytime soon. I think you're spot on here. >> Yeah. Great. All right. So there you have it, Erik and I, Listen, we always love the feedback. Love to know what you think. Thank you, Erik, for your partnership, your collaboration, and love doing these predictions with you. >> Yeah. I always enjoy them too. And I'm actually happy. Last year you made us do a baker's dozen, so thanks for keeping it to 10 this year. >> (laughs) We've got a lot to say. I know, you know, we cut out. We didn't do much on crypto. We didn't really talk about SaaS. I mean, I got some thoughts there. We didn't really do much on containers and AI. >> You want to keep going? I've got another 10 for you. >> RPA...All right, we'll have you back and then let's do that. All right. All right. Don't forget, these episodes are all available as podcasts, wherever you listen, all you can do is search Breaking Analysis podcast. Check out ETR's website at etr.plus, they've got a new website out. It's the best data in the industry, and we publish a full report every week on wikibon.com and siliconangle.com. You can always reach out on email, David.Vellante@siliconangle.com I'm @DVellante on Twitter. Comment on our LinkedIn posts. This is Dave Vellante for the Cube Insights powered by ETR. Have a great week, stay safe, be well. And we'll see you next time. (mellow music)

from the cube studios in palo alto in boston bringing you data driven insights from the cube and etr this is breaking analysis with dave vellante full stack observability is the new buzz phrase as businesses go digital customer experience becomes ever more important why because fickle consumers can switch brands in the blink of an eye or the click of a mouse every vendor wants a piece of the action in this market including companies that have provided traditional monitoring log analytics application performance management etc and they're joined by a slew of new entrants claiming end invisibility across the so-called modern tech stack recent survey research from etr however confirms our thesis that no one company has it all new entrants they've got a vision and and they're not encumbered with legacy technical debt however their offerings are immature on the other hand established players with deep feature sets in one segment are pivoting through m a and some organic development to fill gaps meanwhile the cloud players are well positioned and participating through a combination of their own native tooling combined with strong ecosystems in their respective marketplaces to address this opportunity hello everyone and welcome to this week's wikibon cube insights powered by etr in this breaking analysis we dive into a recent etr drill down study on full stack observability and to do so we once again welcome in our colleague eric bradley chief engagement strategist and director of research at etr eric good to see you my friend thanks for coming on uh always good to be here dave thank you so much for having us we appreciate it all right before we get into the survey eric i i want to talk a little bit about full stack observability define what it is and so let me start and then you can chime in so when people talk about full stack observability they're referring to the need to understand the behavior of all the technology components that support an application i.e the stack right throughout the entire system meaning the full piece of the equation right the entire system so the compute we're talking about the storage the network and of course that's all software defined today the containers that are running the software the database other middleware components the pipeline of data and then of course the client-side code everything the html the css everything down to the mobile device and the idea is to give people who can fix problems full visibility into the system with a dashboard of metrics that can be visualized at a high level and then drilled into to see logs or traces or events all the metrics that could help remediate an issue so a simple way to think about this eric is i like to think of it as the ability to see everything in the tech stack that could impact the customer experience right how do you see it if only we're that simple right it's it's a huge thing that we're trying to encompass there with full stack observability and uh even though the vendors might tell you on the first sales call that they can do it it's really not that simple based on everything you just said um in this particular survey we tried our best to look at it and we'll go into it later but you know we had to survey on the application side infrastructure side database side blog management security network it's a very difficult thing to encompass um the holy grail would be able to do it with one vendor and do it with one dashboard i don't think we're there anytime soon all right so let's get into this drill down survey results and talk about what you've learned first what is explain what a drill down study is how often does etr conduct these types of things you know who responds what can you tell us yeah sure so the drill downs are actually basically think of it as a custom type of survey work and that could be customized from two different ways either our clients will come to us with a particular topic and we will hold their hands and make sure that they get the the responses that they need uh and more often than not it's actually us as a research department uh wanting to dig into trends that our larger data encompasses and then we'll say hey we really need to look into that and we've done it with everything from rpa to identity access to you know hearing observability and also vendor specific and and macro trends as you know david this particular one the genesis was really a large amount of interest not only from our community the end users but clients i i can't tell you how much interest there is in observability right now we're constantly getting questions and demands for more research and deeper research in this space yeah so our audience will be familiar with the concept of net score that's the periodic survey every quarter like clockwork etr does that then in addition as eric was saying hot topics like in this case full stack observability so we're talking about respondents in the etr community in this case who have a deep understanding of observability and related topics and and they had varying degrees of knowledge about each vendor's offering so you asked the respondents to concentrate on the ones that they knew well correct yes that is correct so this was a smaller survey that we did the end was a little under 188 i believe um and essentially what we did was we took people that responded in the bigger study on these observability vendors and then sent this drill down out so they were specifically people that have purview over their spend with observability now some of it might be more database infrastructure application or security but everyone here is already qualified as an expert to answer these questions that's correct dave yeah so the first data point is the one we're showing you right here the respondents were asked who uses observability tools and eric i've highlighted app ops in in the site reliability engineers because given the emphasis on customer centricity that we hear all the time from the vendor community you would think these roles would be more highly represented but it's the folks in the boiler room that are using these tools highly technical and specialized roles what are your thoughts on this data you know i was a little surprised as well i i kind of thought the sres would be a little bit higher on this but it really just comes down to you know it's the infrastructure um devops and secops that seem to be using it the most i thought maybe the application operations teams would be a little bit more involved as well so i agree with you i was a little bit surprised on this but you know they're the experts so we have to take the data at their word for it but i think what's really happening here is you're recognizing that the work is being done across the entire enterprise as you mentioned before about full stack this isn't just one aspect it's touching every aspect of the enterprise and that's including the internal i.t teams well and i think too eric that this what i took away from this drill down and we'll get more into it is that the vendor marketing is not aligned with what's actually happening in the field and so there's these early days we'll talk about that some more okay next question i thought this was very interesting etr asked on the scale of one to three three being most preferred which pricing model host-based user-based or amount of data ingested based pricing that the responders preferred and eric so what are your what are your thoughts on this because just doing a quick scan scan pricing is all over the map yeah it really is all over the map from a vendor perspective right and also from an end user perspective and all the interviews and panels that i host pricing's a real concern but it is always but in this particular field it's a real concern and i actually just did a panel yesterday of four of these 88 survey takers to get a little bit deeper so i'm going to kind of remark on what they taught me a little bit yesterday one of them said ingestion pricing might be preferable but because it's so unpredictable that's why we're seeing the results skew away from it another one went so far that said uh ingestion based pricing is a nightmare that keeps him up at night because he's just so afraid he's gonna wake up the next day and see what the bill is so um really what they're looking for here and the reason the pricing is skewing that way in this survey is because they need predictability it's about their budget and it's about their planning even though they would prefer an ingestion-based model the fact that they have to plan for their budgets and they have to concern themselves with spending it's moving more to host based yeah so i mean it is complicated and because so for example i just took a quick snapshot of some of the pricing models like dynatrace appd datadog aws and others they tout their host-based pricing new relic they have a splash page up around its user-based pricing and the tiers datadog talks about its ingestion-based pricing for security monitoring aws prices by ingestion for cloud watch logs splunk prices on index data and calculates a per gigabyte per day metric so metrics dashboards alarms alerts events it's they could all be priced differently yeah that's true a few that got called out on us and i'm sure we're going to get into them later so i don't want to you know kill all of our fodder right now but when we were talking about this slide one person particularly decided to call out new relic and specif specifically for their flexibility around pricing he said that they have the ability to rapidly scale up but also contract as needed and he actually even though he's a user of splunk he's a user of dyna trees user of elastic um he also just really wanted to call out the flexibility of new relic in this area so to your point there's a lot of different ways to price this it's a complex problem but i think the key takeaway for vendors is flexibility is the key you really need to give people the ability to be flexible in what they want all right let's drill into the functionality and explore the usage and adoption of the different features by the respondents so this next chart shows module adoption for application performance monitoring apm database and digital experience down to the user and eric i underlined apm which is the blue bar because it seems it stands out especially for aws and you can see dynast dyna trace but also azure new relic and splunk and then digital experience which is the gray bar because despite all the chatter in the market and the marketing around digital transformation and customer experience other than a slightly higher response percentage for aws not a lot of adoption on that front so the vendor marketing again doesn't match the user behavior does it eric no it doesn't there's a couple of things to point out here but let's stick with that digital experience i i was surprised that it was so low on this slide and overall in our survey i did expect it to be more and not just from the vendor marketing perspective but you and i both know at the end of the day the whole point of this is to actually get into that 360 view of what your customer's doing so i i was a little bit surprised to see it that low when we spoke to the panel yesterday a couple of people said no listen it's not that we aren't doing that it's just that it's not the vendors that you put on this survey and they called out two particular names one is called catchpoint and the other one is thousand dies and i think you're aware a thousand dice i'm going to transition that off to you there yeah so a thousand eyes is now part of cisco and we're gonna talk about that a little bit later but but essentially like as i was saying up front they've got gaps in their in their product line so they've got to do m a and then package that up so you know we'll we'll get into that a little bit down the road but i want to bring up the next graphic because that looks at incident management infrastructure monitoring and log management and and what i did here is i called out infrastructure monitoring which is the gray bar and log management that light blue because aws and azure they stand out in these categories and splunk of course eric for for log management what what do you take away from this data yeah the previous slide and this slide you really have to call out aws cloudwatch and microsoft is your monitor um they are very pervasive in this survey and we could probably do an entire show on just that on the cloud versus independent but a couple of things i do want to point out even though these numbers are so high for these cloud tools the the panelists and the people i spoke to in more detail all said listen i'm going to look at my cloud tools first i'm on their infrastructure they're handing it to me i'm going to look at it and i'll use it for what it's good for however we're in a multi-cloud world and they're not good at things that aren't in their ecosystem so these are not even though these numbers are high i do not believe that you know aws or azure is going to go and take over all the independents in a multi-cloud world they want an independent vendor whether it's a data dog new relic we could talk about all of those later but um you know really i was surprised that the aws particularly was so high and so pervasive in here across the way a splunk what can you say i mean they are the most pervasive vendor you know they they're everywhere uh we had people in the panel call them a swiss army knife and you know that's a good and a bad that they have a lot of breadth of coverage which is great but because there's a breadth of coverage not all of it is great log management without a doubt is what they are great at they're specialized at it but the panelists were saying listen if you go away from their core and you try to use some of the other things they claim that they can do it requires a lot of heavy lifting and then we can get into a little bit later about their cloud cloud sas integration we had some issues with that in the survey as well and great points about the multi-cloud you're probably not going to trust that to your your cloud your public cloud vendor and so a lot of white space available for the traditional on-prem guys okay next the etr survey drilled into network monitoring and security monitoring and then other security functions and eric there are a couple of things that stood out to me in this chart i highlighted security monitoring which is the blue bar because you can again see the adoption from aws and azure and of course splunk and also we called out solar winds because of the large adoption in network monitoring so let me ask you what are you seeing in the data since the solarwinds breach and is there anything else in this chart that you want to call out i could go on for a while about solarwinds but you know the data since i guess it broke around 12 months ago even though the breach was even prior to that uh the headlines were big i think you remember you and i last year did a quick drill down survey just on solarwinds uh and the impact that we thought we would have it uh there's a very real impact happening uh with that said they're not easy to move away from um we asked about is there any one vendor that could take this entire space and the answer was solar winds was best positioned to do that but it's too late now and then i drilled down a little bit and i asked the panel well what can they do to reinvent themselves what can they do to change the reputational damage from this breach and the panelists all said nothing the reputational damage is done the best way for them to reinvent themselves would be to do an m a consolidate with somebody else change their name they truly believe that right now the only reason that people are still using solarwinds is it's not that easy to lift and shift away from but there will be no new net workloads going to these people at least according to the the ones who took our survey um that's on solar winds and we could get you know in more if you want but i think that's kind of you know giving the the the crux of the matter on splunk again what can you say on the security side on the sim side people don't want to use multiple vendors on the other side we were talking about with full stack some might be better at apm some might be better at infrastructure monitoring when you're talking about security you truly do want one vendor to rule them all and splunk does seem to be the one that's most well entrenched on the security side and as long as the policy is consistent across security you really can't say much about them so what they do well their core their the data shows that you know people still trust them great thank you for that okay now the last set of data we want to show we kind of consolidated some things you want the the detail and the drill down you had several drill down questions and what we try to do is consolidate them into a single chart which we had to stare at for a while so for each of the 11 companies etr asked respondents if the features across the top that you see here were strengths weaknesses or neutral and what we've done is we tried to consolidate the chart showing the strengths in the green which we just subjectively said okay that means more than 40 percent of the respondents identified the feature as a strength the weaknesses in yellow meant that more than 20 percent of the respondents cited the feature as a weakness and the neutrals in the gray where neither of those conditions were met but the gray was you know the neutral was high and what we did is we added four stars for standout features where 60 or more of the respondents cited the feature as a strength and we threw in two stars if they were close to 60 you know high 50s even mid 50s but but not single digit weakness for that feature that was got two stars so it was able to sort of visualize a lot of data so eric just a quick scan of this chart chart shows that the two big cloud players aws in particular but also azure they have a relatively strong showing and i say relatively because as you know eric there wasn't a single category of feature for any vendor where more than 70 percent of the respondents cited the strength for that single feature not one and there was a lot of gray and you can see pricing is a sore point for many customers including those evaluating solarwinds new relic elastic datadog dynatrace appd and splunk only aws and grafana were hit not hit hard on pricing and i guess the other thing that stands out to me here is that new relic eric showed some relative strength so the last thing i'll mention before you dive in look at what cisco is doing we talked about this before a little bit the drill down focused on appd but as i mentioned earlier companies that have mature stacks are filling the gaps so if you look at what cisco's doing this space they've put an interface layer over appd inner site and thousand eyes even though they're separate products they're historically priced separately i think they're still trying to figure out the pricing but they are definitely going to market with a strategy that bolts together these three separate products and that's not necessarily a bad strategy because combined they can claim even more depth and breadth eric what do you make of this data yeah just like this chart there is a lot there right so uh on a macro level let's just the obvious situation here is this is a crowded crowded marketplace and consolidation is needed i had one panelist say to me yesterday i can't wait for this to consolidate like this is just crazy that there needs to be consolidation uh now to your point about cisco cisco's taking the same playbook they did with security right they're going out and they're buying great tools and then now we have to make sure that they figure out a way to integrate these better uh the security side took them a little while to do that but they're getting there hopefully they can do this a little bit quicker here what we did here is that um appd is actually very strong on the application monitoring side for the core apm uh maybe not so much on these others and then that's why they go out and do what you're doing what you're saying about now so hopefully they will get there um kind of talking across the board pricing was a problem for all of them right so it just seems to me that you know the end users the buyers just feel like hey i shouldn't be paying this much for this we've got a lot of choices maybe there's some collusion on the pricing side but we have to figure it out because they do not want to pay this much for it it was the number one concern across almost every single vendor another aspect that i really want to call out on this and is something that our research team found really interesting and it's really about the digital transformation as digital transformation continues the workloads are moving towards the cloud and we're clearly seeing in this data that that's benefiting the newer players the data dogs and the new relics versus some of the others like a dynatrace and a splunk and when you go and actually look at the cloud sas integration answer option specifically it becomes very very obvious um you know splunk had a 38 on that number whereas datadog had 61 new relic at 58. so it's just very clear as a digital transformation increases workloads on observability it is lifting all boats but it's lifting some faster than others great points um all right as we said at the top you've got a set of incumbents they're jockeying for position you've got companies like datadog it's got as eric just mentioned strong cloud model elastic's got got the open source mojo and they're going after splunk's install base as is datadog and then you see startups like chaos search they're out now talking about how to do log analytics they do more than that but that's their sort of starter use case and they're going after the elastic and the elk stack which got dinged a bit in the survey on simplicity uh you know ease of standing it up and and so forth not a weakness if you're comfortable with full open source model but maybe not well understood as some of the other solution oriented plays and then you got other new entrants which are not covered in the drill down they're not as pervasive in the marketplace but guys like honeycomb and observe eric you mentioned some others that came out in the panel vmware even is getting into the act they're positioning tanzu around observability with really a strong kubernetes emphasis and there's dozens of other players in the space which we haven't talked about so eric this is jump ball and i'll give you the final word give us your last thoughts yeah there's a again a lot there it's such an interesting space like even ibm right they go out and buy turbonomics right everyone seems to be playing and not only that the ones that are already playing are expanding data dog comes out and says hey we do security now so i don't really know where this is going to end but there's too much happening there needs to be some sort of you know order out of the chaos uh to your point about some of the emerging names we just launched our emerging technology survey this week david those are the ones where we're going to see data on those names so stay tuned for that we don't track them in the core tsis which are more mature public vendors but we will be getting some data on those uh but to your point i really do believe that this space is rapidly expanding and i just kind of want to leave everyone with this there's a lot of growth still left in the panel yesterday i basically said to people how much of your infrastructure are you monitoring today versus how much you want to and the answer was around 65 to 70 percent being monitored now and without a doubt they all want to get to 100 so there is still a lot of room to grow in this space but i just don't know if there's enough room for all of these people that are basically going after the same percentage points so what we're seeing from a vendor strategy now is bundling they're trying to bundle because that's the way they're gonna actually gain that market share right and uh just one last point to you for elastic a lot of people still view elastic as a search functionality so even though they have use cases and observability i still think there's a lot of people that the elastic got into the elk stack in general got into their enterprise for search so that is still kind of where they are and maybe they're not moving as fast as a data dog or a new relic in pure full stack observability eric so great to have you on you guys cover so much space so we're gonna leave it there for now we really appreciate our friends at etr for the the work that they do and thank you eric for joining us today and sharing your insights great stuff welcome dave i always enjoy talking to you you know that and uh everyone else we'll be back in a couple of months with our predictions as well so yeah that's right yeah look for those all right remember these episodes are all available as podcasts wherever you listen all you gotta do is search breaking analysis podcast check out etr's website etr dot plus they've got a whole new packaging and and pricing models so check that out we also publish a full report every week on wikibon.com and siliconangle.com and you can get in touch with me david.velante at siliconangle.com or at divalante on twitter i'm on linkedin all the time this is dave vellante for the cube insights powered by etr have a great week everybody stay safe be well and we'll see you next time you