hi everybody welcome back to boston you're watching thecube's coverage of reinforce 2022 last time we were here live was 2019. had a couple years of virtual merit bear is here she's with the office of the cso for aws merit welcome back to the cube good to see you thank you for coming on thank you so much it's good to be back um yes cso chief information security officer for folks who are acronym phobia phobic yeah okay so what do you do for the office of the is it ciso or sizzo anyway ah whatever is it sim or theme um i i work in three areas so i sit in aws security and i help us do security we're a shop that runs on aws i empathize with folks who are running shops it is process driven it takes hard work but we believe in certain mechanisms and muscle groups so you know i work on getting those better everything from how we do threat intelligence to how we guard rail employees and think about vending accounts and those kinds of things i also work in customer-facing interactions so when a cso wants to meet awssc so that's often me and then the third is product side so ensuring that everything we deliver not just security services are aligned with security best practices and expectations for our customers so i have to ask you right off the bat so we do a lot of spending surveys we have a partner etr i look at the data all the time and for some reason aws never shows up in the spending metrics why do you think that is maybe that talks to your strategy let's double click on that yeah so first of all um turn on guard duty get shield advanced for the you know accounts you need the 3k is relatively small and a large enterprise event like this doesn't mean don't spend on security there is a lot of goodness that we have to offer in ess external security services but i think one of the unique parts of aws is that we don't believe that security is something you should buy it's something that you get from us it's something that we do for you a lot of the time i mean this is the definition of the shared responsibility model right everything that you interact with on aws has been subject to the same rigorous standards and we aws security have umbrella arms around those but we also ensure that service teams own the security of their service so a lot of times when i'm talking to csos and i say security teams or sorry service teams own the security of their service they're curious like how do they not get frustrated and the answer is we put in a lot of mechanisms to allow those to go through so there's automation there are robots that resolve those trouble tickets you know like and we have emissaries we call them guardian champions that are embedded in service teams at any rate the point is i think it's really beautiful the way that customers who are you know enabling services in general benefit from the inheritances that they get and in some definition this is like the value proposition of cloud when we take care of those lower layers of the stack we're doing everything from the concrete floors guards and gates hvac you know in the case of something like aws bracket which is our quantum computing like we're talking about you know near vacuum uh environments like these are sometimes really intricate and beautiful ways that we take care of stuff that was otherwise manual and ugly and then we get up and we get really intricate there too so i gave a talk this morning about ddos protection um and all the stuff that we're doing where we can see because of our vantage point the volume and that leads us to be a leader in volumetric attack signatures for example manage rule sets like that costs you nothing turn on your dns firewall like there are ways that you just as a as an aws customer you inherit our rigorous standards and you also are able to benefit from the rigor with which we you know exact ourselves to really you're not trying to make it a huge business at least as part of your your portfolio it's just it's embedded it's there take advantage of it i want everyone to be secure and i will go to bad to say like i want you to do it and if money is a blocker let's talk about that because honestly we just want to do the right thing by customers and i want customers to use more of our services i genuinely believe that they are enablers we have pharma companies um that have helped enable you know personalized medicine and some of the copic vaccines we have you know like there are ways that this has mattered to people in really intimate ways um and then fun ways like formula one uh you know like there are things that allow us to do more and our customers to do more and security should be a way of life it's a way of breathing you don't wake up and decide that you're going to bolt it on one day okay so we heard cj moses keynote this morning i presume you were listening in uh we heard a lot about you know cool tools you know threat detection and devops and container security but he did explicitly talked about how aws is simplifying the life of the cso so what are you doing in that regard and what's that that's let's just leave it there for now i talk to c sales every day and i think um most of them have two main concerns one is how to get their organization to grow up like to understand what security looks like in a cloudy way um and that means that you know your login monitoring is going to be the forensics it's not going to be getting into the host that's on our side right and that's a luxury like i think there are elements of the cso job that have changed but that even if you know cj didn't explicitly call them out these are beauties things like um least privilege that you can accomplish using access analyzer and all these ways that inspector for example does network reachability and then all of these get piped to security hub and there's just ways that make it more accessible than ever to be a cso and to enable and embolden your people the second side is how csos are thinking about changing their organization so what are you reporting to the board um how are you thinking about hiring and um in the metrics side i would say you know being and i get a a lot of questions that are like how do we exhibit a culture of security and my answer is you do it you just start doing it like you make it so that your vps have to answer trouble tickets you may and and i don't mean literally like every trouble ticket but i mean they are 100 executives will say that they care about security but so what like you know set up your organization to be responsive to security and to um have to answer to them because it matters and and notice that because a non-decision is a decision and the other side is workforce right and i think um i see a lot of promise some of it unfulfilled in folks being hired to look different than traditional security folks and act different and maybe a first grade teacher or an architect or an artist and who don't consider themselves like particularly technical like the gorgeousness of cloud is that you can one teach yourself this i mean i didn't go to school for computer science like this is the kind of thing we all have to teach ourselves but also you can abstract on top of stuff so you're not writing code every day necessarily although if you are that's awesome and we love debbie folks but you know there's there's a lot of ways in which the machine of the security organization is suggesting i think cj was part to answer your question pointedly i think cj was trying to be really responsive to like all the stuff we're giving you all the goodness all the sprinkles on your cupcake not at all the organizational stuff that is kind of like you know the good stuff that we know we need to get into so i think so you're saying it's it's inherent it's inherently helping the cso uh her life his life become less complex and i feel like the cloud you said the customers are trying to become make their security more cloudy so i feel like the cloud has become the first line of defense now the cso your customer see so is the second line of defense maybe the audit is the third line what does that mean for the role of the the cso how is that they become a compliance officer what does that mean no no i think actually increasingly they are married or marriable so um when you're doing so for example if you are embracing [Music] ephemeral and immutable infrastructure then we're talking about using something like cloud formation or terraform to vend environments and you know being able to um use control tower and aws organizations to dictate um truisms through your environment you know like there are ways that you are basically in golden armies and you can come back to a known good state you can embrace that kind of cloudiness that allows you to get good to refine it to kill it and spin up a new infrastructure and that means though that like your i.t and your security will be woven in in a really um lovely way but in a way that contradicts certain like existing structures and i think one of the beauties is that your compliance can then wake up with it right your audit manager and your you know security hub and other folks that do compliance as code so you know inspector for example has a tooling that can without sending a single packet over the network do network reachability so they can tell whether you have an internet facing endpoint well that's a pci standard you know but that's also a security truism you shouldn't have internet facing endpoints you don't approve up you know like so these are i think these can go in hand in hand there are certainly i i don't know that i totally disregard like a defense in-depth notion but i don't think that it's linear in that way i think it's like circular that we hope that these mechanisms work together that we also know that they should speak to each other and and be augmented and aware of one another so an example of this would be that we don't just do perimeter detection we do identity-based fine-grained controls and that those are listening to and reasoned about using tooling that we can do using security yeah we heard a lot about reasoning as well in the keynote but i want to ask about zero trust like aws i think resisted using that term you know the industry was a buzzword before the pandemic it's probably more buzzy now although in a way it's a mandate um depending on how you look at it so i mean you anything that's not explicitly allowed is denied in your world and you have tools and i mean that's a definition if it's a die that overrides if it's another it's a deny call that will override and allow yeah that's true although anyway finish your question yeah yeah so so my it's like if there's if there's doubt there's no doubt it seems in your world but but but you have a lot of capabilities seems to me that this is how you you apply aws internal security and bring that to your customers do customers talk to you about zero trust are they trying to implement zero trust what's the best way for them to do that when they don't have that they have a lack of talent they don't have the skill sets uh that it and the knowledge that aws has what are you hearing from customers in that regard yeah that's a really um nuanced phrasing which i appreciate because i think so i think you're right zero trust is a term that like means everything and nothing i mean like this this notebook is zero trust like no internet comes in or out of it like congratulations you also can't do business on it right um i do a lot of business online you know what i mean like you can't uh transact something to other folks and if i lose it i'm screwed yeah exactly i usually have a water bottle or something that's even more inanimate than your notebook um but i guess my point is we i don't think that the term zero trust is a truism i think it's a conceptual framework right and the idea is that we want to make it so that someone's position in the network is agnostic to their permissioning so whereas in the olden days like a decade ago um we might have assumed that when you're in the perimeter you just accept everything um that's no longer the right way to think about it and frankly like covid and work from home may have accelerated this but this was ripe to be accelerated anyway um what we are thinking about is both like you said under the network so like the network layer are we talking about machine to machine are we talking about like um you know every api call goes over the open internet with no inherent assurances human to app or it's protected by sig v4 you know like there is an inherent zero trust case that we have always built this goes back to a jeff bezos mandate from 2002 that everything be an api call that is again this kind of like building security into it when we say security is job zero it not only reflects the fact that like when you build a terraform or a cloud formation template you better have permission things appropriately or try to but also that like there is no cloud without security considerations you don't get to just bolt something on after the fact so that being said now that we embrace that and we can reason about it and we can use tools like access analyzer you know we're also talking about zero trust in that like i said augmentation identity centric fine grained controls so an example of this would be a vpc endpoint policy where it is a perm the perimeter is dead long live the perimeter right you'll have your traditional perimeter your vpc or your vpn um augmented by and aware of the fine-grained identity-centric ones which you can also reason about prune down continuously monitor and so on and that'll also help you with your logging and monitoring because you know what your ingress and egress points are how concerned should people be with quantum messing up all the encryption algos oh it's stopping created right okay so but we heard about this in the keynote right so is it just a quantum so far off by the time we get there is it like a y2k you're probably not old enough to remember y2k but y2k moment right i mean i can't take you anywhere what should we um how should we be thinking about quantum in the context of security and sure yeah i mean i think we should be thinking about quantum and a lot of dimensions as operationally interesting and how we can leverage i think we should be thinking about it in the security future for right now aes256 is something that is not broken so we shouldn't try to fix it yeah cool encrypt all the things you can do it natively you know like i love talking about quantum but it's more of an aspirational and also like we can be doing high power compute to solve problems you know but like for it to get to a security uh potentially uh vulnerable state or like something that we should worry about is a bit off yeah and show me an application that can yeah and i mean and i think at that point we're talking about homomorphic improvements about another thing i kind of feel the same way is that you know there's a lot of hype around it a lot of ibm talks about a lot you guys talked about in your keynote today and when i really talk to people who understand this stuff it seems like it's a long long way off i don't think it's a long long way off but everything is dog years in tech world but um but for today you know like for today encrypt yourself we will always keep our encryption up to standard and you know that will be for now like the the industry grade standard that folks i mean like i i have i have never heard of a case where someone had their kms keys broken into i um i always ask like awesome security people this question did you like how did you get into this did you have like did you have a favorite superhero as a kid that was going to save the world i um was always the kid who probably would have picked up a book about the cia and i like find this and i don't remember who i was before i was a security person um but i also think that as a woman um from an american indian family walking through the world i think about the relationship between dynamics with the government and companies and individuals and how we want to construct those and the need for voices that are observant of the ways that those interplay and i always saw this as a field where we can do a lot of good yeah amazing merritt thanks so much for coming on thecube great guest john said you would be really appreciate your time of course all right keep it ready you're very welcome keep it right there this is dave vellante for the cube we'll be right back at aws reinforced 2022 from boston keep right there [Music]

>> From theCUBE Studios in Palo Alto and Boston bringing you data driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> After a two year hiatus, AWS re:Inforce is back on as an in-person event in Boston next week. Like the All-Star break in baseball, re:Inforce gives us an opportunity to evaluate the cyber security market overall, the state of cloud security and cross cloud security and more specifically what AWS is up to in the sector. Welcome to this week's Wikibon cube insights powered by ETR. In this Breaking Analysis we'll share our view of what's changed since our last cyber update in May. We'll look at the macro environment, how it's impacting cyber security plays in the market, what the ETR data tells us and what to expect at next week's AWS re:Inforce. We start this week with a checkpoint from Breaking Analysis contributor and stock trader Chip Simonton. We asked for his assessment of the market generally in cyber stocks specifically. So we'll summarize right here. We've kind of moved on from a narrative of the sky is falling to one where the glass is half empty you know, and before today's big selloff it was looking more and more like glass half full. The SNAP miss has dragged down many of the big names that comprise the major indices. You know, earning season as always brings heightened interest and this time we're seeing many cross currents. It starts as usual with the banks and the money centers. With the exception of JP Morgan the numbers were pretty good according to Simonton. Investment banks were not so great with Morgan and Goldman missing estimates but in general, pretty positive outlooks. But the market also shrugged off IBM's growth. And of course, social media because of SNAP is getting hammered today. The question is no longer recession or not but rather how deep the recession will be. And today's PMI data was the weakest since the start of the pandemic. Bond yields continue to weaken and there's a growing consensus that Fed tightening may be over after September as commodity prices weaken. Now gas prices of course are still high but they've come down. Tesla, Nokia and AT&T all indicated that supply issues were getting better which is also going to help with inflation. So it's no shock that the NASDAQ has done pretty well as beaten down as tech stocks started to look oversold you know, despite today's sell off. But AT&T and Verizon, they blamed their misses in part on people not paying their bills on time. SNAP's huge miss even after guiding lower and then refusing to offer future guidance took that stock down nearly 40% today and other social media stocks are off on sympathy. Meta and Google were off, you know, over 7% at midday. I think at one point hit 14% down and Google, Meta and Twitter have all said they're freezing new hires. So we're starting to see according to Simonton for the first time in a long time, the lower income, younger generation really feeling the pinch of inflation. Along of course with struggling families that have to choose food and shelter over discretionary spend. Now back to the NASDAQ for a moment. As we've been reporting back in mid-June and NASDAQ was off nearly 33% year to date and has since rallied. It's now down about 25% year to date as of midday today. But as I say, it had been, you know much deeper back in early June. But it's broken that downward trend that we talked about where the highs are actually lower and the lows are lower. That's started to change for now anyway. We'll see if it holds. But chip stocks, software stocks, and of course the cyber names have broken those down trends and have been trading above their 50 day moving averages for the first time in around four months. And again, according to Simonton, we'll see if that holds. If it does, that's a positive sign. Now remember on June 24th, we recorded a Breaking Analysis and talked about Qualcomm trading at a 12 X multiple with an implied 15% growth rate. On that day the stock was 124 and it surpassed 155 earlier this month. That was a really good call by Simonton. So looking at some of the cyber players here SailPoint is of course the anomaly with the Thoma Bravo 7 billion acquisition of the company holding that stock up. But the Bug ETF of basket of cyber stocks has definitely improved. When we last reported on cyber in May, CrowdStrike was off 23% year to date. It's now off 4%. Palo Alto has held steadily. Okta is still underperforming its peers as it works through the fallout from the breach and the ingestion of its Auth0 acquisition. Meanwhile, Zscaler and SentinelOne, those high flyers are still well off year to date, with Ping Identity and CyberArk not getting hit as hard as their valuations hadn't run up as much. But virtually all these tech stocks generally in cyber issues specifically, they've been breaking their down trend. So it will now come down to earnings guidance in the coming months. But the SNAP reaction is quite stunning. I mean, the environment is slowing, we know that. Ad spending gets cut in that type of market, we know that too. So it shouldn't be a huge surprise to anyone but as Chip Simonton says, this shows that sellers are still in control here. So it's going to take a little while to work through that despite the positive signs that we're seeing. Okay. We also turned to our friend Eric Bradley from ETR who follows these markets quite closely. He frequently interviews CISOs on his program, on his round tables. So we asked to get his take and here's what ETR is saying. Again, as we've reported while CIOs and IT buyers have tempered spending expectations since December and early January when they called for an 8% plus spending growth, they're still expecting a six to seven percent uptick in spend this year. So that's pretty good. Security remains the number one priority and also is the highest ranked sector in the ETR data set when you measure in terms of pervasiveness in the study. Within security endpoint detection and extended detection and response along with identity and privileged account management are the sub-sectors with the most spending velocity. And when you exclude Microsoft which is just dominant across the board in so many sectors, CrowdStrike has taken over the number one spot in terms of spending momentum in ETR surveys with CyberArk and Tanium showing very strong as well. Okta has seen a big dropoff in net score from 54% last survey to 45% in July as customers maybe put a pause on new Okta adoptions. That clearly shows in the survey. We'll talk about that in a moment. Look Okta still elevated in terms of spending momentum, but it doesn't have the dominant leadership position it once held in spend velocity. Year on year, according to ETR, Tenable and Elastic are seeing the biggest jumps in spending momentum, with SailPoint, Tanium, Veronis, CrowdStrike and Zscaler seeing the biggest jump in new adoptions since the last survey. Now on the downside, SonicWall, Symantec, Trellic which is McAfee, Barracuda and TrendMicro are seeing the highest percentage of defections and replacements. Let's take a deeper look at what the ETR data tells us about the cybersecurity space. This is a popular view that we like to share with net score or spending momentum on the Y axis and overlap or pervasiveness in the data on the X axis. It's a measure of presence in the data set we used to call it market share. With the data, the dot positions, you see that little inserted table, that's how the dots are plotted. And it's important to note that this data is filtered for firms with at least 100 Ns in the survey. That's why some of the other ones that we mentioned might have dropped off. The red dotted line at 40% that indicates highly elevated spending momentum and there are several firms above that mark including of course, Microsoft, which is literally off the charts in both dimensions in the upper right. It's quite incredible actually. But for the rest of the pack, CrowdStrike has now taken back its number one net score position in the ETR survey. And CyberArk and Okta and Zscaler, CloudFlare and Auth0 now Okta through the acquisition, are all above the 40% mark. You can stare at the data at your leisure but I'll just point out, make three quick points. First Palo Alto continues to impress and as steady as she goes. Two, it's a very crowded market still and it's complicated space. And three there's lots of spending in different pockets. This market has too many tools and will continue to consolidate. Now I'd like to drill into a couple of firms net scores and pick out some of the pure plays that are leading the way. This series of charts shows the net score or spending velocity or granularity for Okta, CrowdStrike, Zscaler and CyberArk. Four of the top pure plays in the ETR survey that also have over a hundred responses. Now the colors represent the following. Bright red is defections. We're leaving the platform. The pink is we're spending less, meaning we're spending 6% or worse. The gray is flat spend plus or minus 5%. The forest green is spending more, i.e, 6% or more and the lime green is we're adding the platform new. That red dotted line at the 40% net score mark is the same elevated level that we like to talk about. All four are above that target. Now that blue line you see there is net score. The yellow line is pervasiveness in the data. The data shown in each bar goes back 10 surveys all the way back to January 2020. First I want to call out that all four again are seeing down trends in spending momentum with the whole market. That's that blue line. They're seeing that this quarter, again, the market is off overall. Everybody is kind of seeing that down trend for the most part. Very few exceptions. Okta is being hurt by fewer new additions which is why we highlighted in red, that red dotted area, that square that we put there in the upper right of that Okta bar. That lime green, new ads are off as well. And the gray for Okta, flat spending is noticeably up. So it feels like people are pausing a bit and taking a breather for Okta. And as we said earlier, perhaps with the breach earlier this year and the ingestion of Auth0 acquisition the company is seeing some friction in its business. Now, having said that, you can see Okta's yellow line or presence in the data set, continues to grow. So it's a good proxy from market presence. So Okta remains a leader in identity. So again, I'll let you stare at the data if you want at your leisure, but despite some concerns on declining momentum, notice this very little red at these companies when it comes to the ETR survey data. Now one more data slide which brings us to our four star cyber firms. We started a tradition a few years ago where we sorted the ETR data by net score. That's the left hand side of this graphic. And we sorted by shared end or presence in the data set. That's the right hand side. And again, we filtered by companies with at least 100 N and oh, by the way we've excluded Microsoft just to level the playing field. The red dotted line signifies the top 10. If a company cracks the top 10 in both spending momentum and presence, we give them four stars. So Palo Alto, CrowdStrike, Okta, Fortinet and Zscaler all made the cut this time. Now, as we pointed out in May if you combined Auth0 with Okta, they jumped to the number two on the right hand chart in terms of presence. And they would lead the pure plays there although it would bring down Okta's net score somewhat, as you can see, Auth0's net score is lower than Okta's. So when you combine them it would drag that down a little bit but it would give them bigger presence in the data set. Now, the other point we'll make is that Proofpoint and Splunk both dropped off the four star list this time as they both saw marked declines in net score or spending velocity. They both got four stars last quarter. Okay. We're going to close on what to expect at re:Inforce this coming week. Re:Inforce, if you don't know, is AWS's security event. They first held it in Boston back in 2019. It's dedicated to cloud security. The past two years has been virtual and they announced that reinvent that it would take place in Houston in June, which everybody said, that's crazy. Who wants to go to Houston in June and turns out nobody did so they postponed the event, thankfully. And so now they're back in Boston, starting on Monday. Not that it's going to be much cooler in Boston. Anyway, Steven Schmidt had been the face of AWS security at all these previous events as the Chief Information Security Officer. Now he's dropped the I from his title and is now the Chief Security Officer at Amazon. So he went with Jesse to the mothership. Presumably he dropped the I because he deals with physical security now too, like at the warehouses. Not that he didn't have to worry about physical security at the AWS data centers. I don't know. Anyway, he and CJ Moses who is now the new CISO at AWS will be keynoting along with some others including MongoDB's Chief Information Security Officer. So that should be interesting. Now, if you've been following AWS you'll know they like to break things down into, you know, a couple of security categories. Identity, detection and response, data protection slash privacy slash GRC which is governance, risk and compliance, and we would expect a lot more talk this year on container security. So you're going to hear also product updates and they like to talk about how they're adding value to services and try to help, they try to help customers understand how to apply services. Things like GuardDuty, which is their threat detection that has machine learning in it. They'll talk about Security Hub, which centralizes views and alerts and automates security checks. They have a service called Detective which does root cause analysis, and they have tools to mitigate denial of service attacks. And they'll talk about security in Nitro which isolates a lot of the hardware resources. This whole idea of, you know, confidential computing which is, you know, AWS will point out it's kind of become a buzzword. They take it really seriously. I think others do as well, like Arm. We've talked about that on previous Breaking Analysis. And again, you're going to hear something on container security because it's the hottest thing going right now and because AWS really still serves developers and really that's what they're trying to do. They're trying to enable developers to design security in but you're also going to hear a lot of best practice advice from AWS i.e, they'll share the AWS dogfooding playbooks with you for their own security practices. AWS like all good security practitioners, understand that the keys to a successful security strategy and implementation don't start with the technology, rather they're about the methods and practices that you apply to solve security threats and a top to bottom cultural approach to security awareness, designing security into systems, that's really where the developers come in, and training for continuous improvements. So you're going to get heavy doses of really strong best practices and guidance and you know, some good preaching. You're also going to hear and see a lot of partners. They'll be very visible at re:Inforce. AWS is all about ecosystem enablement and AWS is going to host close to a hundred security partners at the event. This is key because AWS doesn't do it all. Interestingly, they don't even show up in the ETR security taxonomy, right? They just sort of imply that it's built in there even though they have a lot of security tooling. So they have to apply the shared responsibility model not only with customers but partners as well. They need an ecosystem to fill gaps and provide deeper problem solving with more mature and deeper security tooling. And you're going to hear a lot of positivity around how great cloud security is and how it can be done well. But the truth is this stuff is still incredibly complicated and challenging for CISOs and practitioners who are understaffed when it comes to top talent. Now, finally, theCUBE will be at re:Inforce in force. John Furry and I will be hosting two days of broadcast so please do stop by if you're in Boston and say hello. We'll have a little chat, we'll share some data and we'll share our overall impressions of the event, the market, what we're seeing, what we're learning, what we're worried about in this dynamic space. Okay. That's it for today. Thanks for watching. Thanks to Alex Myerson, who is on production and manages the podcast. Kristin Martin and Cheryl Knight, they helped get the word out on social and in our newsletters and Rob Hoff is our Editor in Chief over at siliconangle.com. You did some great editing. Thank you all. Remember all these episodes they're available, this podcast. Wherever you listen, all you do is search Breaking Analysis podcast. I publish each week on wikibon.com and siliconangle.com. You can get in touch with me by emailing avid.vellante@siliconangle.com or DM me @dvellante, or comment on my LinkedIn post and please do check out etr.ai for the best survey data in the enterprise tech business. This is Dave Vellante for theCUBE Insights powered by ETR. Thanks for watching and we'll see you in Boston next week if you're there or next time on Breaking Analysis (soft music)

(inspiring music) >> Announcer: theCUBE presents HPE Discover 2022. Brought to you by HPE. >> Welcome back to theCUBE's coverage of HPE Discover 2022, from the Venetian in Las Vegas, the first Discover since 2019. I really think this is my 14th Discover, when you include HP, when you include Europe. And I got to say this Discover, I think has more energy than any one that I've ever seen, about 8,000 people here. Really excited to have one of HPE's longstanding partners, Veeam CTO, Danny Allen is here, joined by David Harvey, Vice President of Strategic Alliances at Veeam. Guys, good to see you again. It was just earlier, let's see, last month, we were together out here. >> Yeah, just a few weeks ago. It's fantastic to be back and what it's telling us, technology industry is coming back. >> And the events business, of course, is coming back, which we love. I think the expectations were cautious. You saw it at VeeamON, a little more than you expected, a lot of great energy. A lot of people, 'cause it was last month, it was their first time out, >> Yes. >> in two years. Here, I think people have started to go out more, but still, an energy that's palpable. >> You can definitely feel it. Last night, I think I went to four consecutive events and everyone's out having those discussions and having conversations, it's good to be back. >> You guys hosted the Storage party last night, which is epic. I left at midnight, I took a picture, it was still packed. I said, okay, time to go, nothing good happens after midnight kids. David, talk about the alliance with HPE, how it's evolved, and where you see it going? >> I appreciate it, and certainly this, as you said, has been a big alliance for us. Over 10 years or so, fantastic integrations across the board. And you touched on 2019 Discover. We launched with GreenLake at that event, we were one of the launch partners, and we've seen fantastic growth. Overall, what we're excited about, is that continuation of the movement of the customer's buying patterns in line with HPE's portfolio and in line with Veeam. We continue to be with all their primary, secondary storage, we continue to be a spearhead position with GreenLake, which we're really excited about. And we're also really excited to hear from HPE, unfortunately under NDA, some of their future stuff they're investing in, which is a really nice invigoration for what they're doing for their portfolio. And we see that being a big deal for us over the next 24 months. >> Your relationship with HPE predates the HP, HPE split. >> Mmm. >> Yes. >> But it was weird, because they had Data Protector, and that was a quasi-competitor, or really not, but it was a competitor, a legacy competitor, of what you guys have, kind of modern data protection I think is the tagline, if I got it right. Post the split, that was an S-curve moment, wasn't it, in terms of the partnership? >> It really was. If you go back 10 years, we did our first integration sending data to StoreOnce and we had some blueprints around that. But now, if you look what we have, we have integrations on the primary side, so, 3PAR, Primera, Nimble, all their top-tier storage, we can manage the snapshots. We have integration on the target side. We integrate with Catalyst in the movement of data and the management of data. And, as David alluded to, we integrate with GreenLake. So, customers who want to take this as a consumption model, we integrate with that. And so it's been, like you said, the strongest relationship that we have on the technology alliance side. >> So, V12, you announced at VeeamON. What does that mean for HPE customers, the relationship? Maybe you guys could both talk about that. >> Technology side, to touch on a few things that we're doing with them, ransomware has been a huge issue. Security's been a big theme, obviously, at the conference, >> Dave: Yeah, you bet. and one of the things we're doing in V12 is adding immutability for both StoreOnce and StoreEver. So, we take the features that our partners have, immutability being big in the security space, and we integrate that fully into the product. So a customer checks a box and says, hey, I want to make sure that the data is secure. >> Yeah, and also, it's another signification about the relationship. Every single release we've done has had HPE at the heart of it, and the same thing is being said with V12. And it shows to our customers, the continual commitment. Relationships come and go. They're hard, and the great news is, 10 years has proven that we get through good times and tricky situations, and we both continue to invest, et cetera. And I think there's a lot of peace of mind and the revenue figures prove that, which is what we're really excited about. >> Yeah I want to come back to that, but just to follow up, Danny, on that immutability, that's a feature that you check? It's service within GreenLake, or within Veeam? How does that all work? >> We have immutability now depending on the target. We introduced the ability to send data, for example, into S3 two years ago, and make it immutable when you send it to an S3 or S3 compatible environment. We added, in Version 11, the ability to take a Linux repository and make it, and harden it, essentially make it immutable. But what we're doing now is taking our partner systems like StoreOnce, like StoreEver, and when we send data there, we take advantage of an API flag or whatever it happens to be, that it makes the data, when it's written to that system, can't be deleted, can't be encrypted. Now, what does that mean for a customer? Well, we do all the hard work in the back end, it's just a check box. They say, I want to make it immutable, and we manage how long it's immutable. Because if you made everything immutable forever, that's hugely expensive, right? So, it's all about, how long is that immutable before you age it out and make sure the new data coming in is immutable. >> Dave: It's like an insurance policy, you have that overlap. >> Yes. >> Right, okay. And then David, you mentioned the revenue, Lou bears that out. I got the IDC guys comin' on later on today. I'll ask 'em about that, if that's their swim lane. But you guys are basically a statistical tie, with Dell for number one? Am I getting that right? And you're growing at a faster rate, I believe, it's hard to tell 'cause I don't think Dell reports on the pace of its growth within data protection. You guys obviously do, but is that right? It's a statistical tie, is it? >> Yeah, hundred percent. >> Yeah, statistical tie for first place, which we're super excited about. When I joined Veeam, I think we were in fifth place, but we've been in the leader's quadrant of the Gartner Magic- >> Cause and effect there or? (panelists laughing) >> No, I don't think so. >> Dave: Ha, I think maybe. >> We've been on a great trajectory. But statistical tie for first place, greatest growth sequentially, and year-over-year, of all of the data protection vendors. And that's a testament not just to the technology that we're doing, but partnerships with HPE, because you never do this, the value of a technology is not that technology alone, it's the value of that technology within the ecosystem. And so that's why we're here at HPE Discover. It's our joint technology solutions that we're delivering. >> What are your thoughts or what are you seeing in the field on As-a-service? Because of course, the messaging is all about As-a-service, you'd think, oh, a hundred percent of everything is going to be As-a-service. A lot of customers, they don't mind CapEx, they got good, balance sheet, and they're like, hey, we'll take care of this, and, we're going to build our own little internal cloud. But, what are you seeing in the market in terms of As-a-service, versus, just traditional licensing models? >> Certainly, there's a mix between the two. What I'd say, is that sources that are already As-a-service, think Microsoft 365, think AWS, Azure, GCP, the cloud providers. There's a natural tendency for the customer to want the data protection As-a-service, as well for those. But if you talk about what's on premises, customers who have big data centers deployed, they're not yet, the pendulum has not shifted for that to be data protection As-a-service. But we were early to this game ourselves. We have 10,000, what we call, Veeam Cloud Service Providers, that are offering data protection As-a-service, whether it be on premises, so they're remotely managing it, or cloud hosted, doing data protection for that. >> So, you don't care. You're providing the technology, and then your customers are actually choosing the delivery model. Is that correct? >> A hundred percent, and if you think about what GreenLake is doing for example, that started off as being a financial model, but now they're getting into that services delivery. And what we want to do is enable them to deliver it, As-a-service, not just the financial model, but the outcome for the customer. And so our technology, it's not just do backup, it's do backup for a multi-tenant, multi-customer environment that does all of the multi-tenancy and billing and charge back as part of that service. >> Okay, so you guys don't report on this, but I'm going to ask the question anyway. You're number one now, let's call you, let's declare number one, 'cause we're well past that last reporting and you're growin' faster. So go another quarter, you're now number one, so you're the largest. Do you spend more on R&D in data protection than any other company? >> Yes, I'm quite certain that we do. Now, we have an unfair advantage because we have 450,000 customers. I don't think there's any other data protection company out there, the size and scope and scale, that we have. But we've been expanding, our largest R&D operation center's in Prague, it's in Czech Republic, but we've been expanding that. Last year it grew 40% year on year in R&D, so big investment in that space. You can see this just through our product space. Five years ago, we did data protection of VMware only, and now we do all the virtual environments, all the physical environments, all the major cloud environments, Kubernetes, Microsoft 365, we're launching Salesforce. We announced that at VeeamON last month and it will be coming out in Q3. All of that is coming from our R&D investments. >> A lot of people expect that when a company like Insight, a PE company, purchases a company like Veeam, that one of the things they'll dial down is R&D. That did not happen in this case. >> No, they very much treat us as a growth company. We had 22% year-over-year growth in 2020, and 25% year-over-year last year. The growth has been tremendous, they continue to give us the freedom. Now, I expect they'll want returns like that continuously, but we have been delivering, they have been investing. >> One of my favorite conversations of the year was our supercloud conversation, which was awesome, thank you for doing that with me. But that's clearly an area of focus, what we call supercloud, and you don't use that term, I know, you do sometimes, but it's not your marketing, I get that. But that is an R&D intensive effort, is it not? To create that common experience. And you see HPE, attempting to do that as well, across all these different estates. >> A hundred percent. We focus on three things, I always say, our differentiators, simplicity, flexibility, and reliability. Making it simple for the customers is not an easy thing to do. Making that checkbox for immutability? We have to do a lot behind the scenes to make it simple. Same thing on flexibility. We don't care if they're using 3PAR, Primera, Nimble, whatever you want to choose as the primary storage, we will take that out of your hands and make it really easy. You mentioned supercloud. We don't care what the cloud infrastructure, it can be on GreenLake, it can be on AWS, can be on Azure, it can be on GCP, it can be on IBM cloud. It is a lot of effort on our part to abstract the cloud infrastructure, but we do that on behalf of our customers to take away that complexity, it's part of our platform. >> Quick follow-up, and then I want to ask a question of David. I like talking to you guys because you don't care where it is, right? You're truly agnostic to it all. I'm trying to figure out this repatriation thing, cause I hear a lot of hey, Dave, you should look into repatriation that's happened all over the place, and I see pockets of it. What are you seeing in terms of repatriation? Have customers over-rotated to the cloud and now they're pullin' back a little bit? Or is it, as I'm claiming, in pockets? What's your visibility on that? >> Three things I see happening. There's the customers who lifted up their data center, moved it into the cloud and they get the first bill. >> (chuckling) Okay. >> And they will repatriate, there's no question. If I talk to those customers who simply lifted up and moved it over because the CIO told them to, they're moving it back on premises. But a second thing that we see is people moving it over, with tweaks. So they'll take their SQL server database and they'll move it into RDS, they'll change some things. And then you have people who are building cloud-native, they're never coming back on premises, they are building it for the cloud environment. So, we see all three of those. We only really see repatriation on that first scenario, when they get that first bill. >> And when you look at the numbers, I think it gets lost, 'cause you see the cloud is growing so fast. So David, what are the conversations like? You had several events last night, The Veeam party, slash Storage party, from HPE. What are you hearing from your alliance partners and the customers at the event. >> I think Danny touched on that point, it's about philosophy of evolution. And I think at the end of the day, whether we're seeing it with our GSI alliances we've got out there, or with the big enterprise conversations we're having with HPE, it's about understanding which workloads they want to move. In our mind, the customers are getting much smarter in making that decision, rather than experimenting. They're really taking a really solid look. And the work we're doing with the GSIs on workplace modernization, data center transformation, they're really having that investment work up front on the workloads, to be able to say, this works for me, for my personality and my company. And so, to the point about movement, it's more about decisive decision at the start, and not feeling like the remit is, I have to do one thing or another, it's about looking at that workflow position. And that's what we've seen with the revenue part as well. We've seen our movement to GreenLake tremendously grow in the last 18 months to two years. And from our GSI work as well, we're seeing the types of conversations really focus on that workload, compared to, hey, I just need a backup solution, and that's really exciting. >> Are you having specific conversations about security, or is it a data protection conversation still, (David chuckles) that's an adjacency to security? >> That's a great question. And I think it's a complex one, because if you come to a company like Veeam, we are there, and you touched on it before, we provide a solution when something has happened with security. We're not doing intrusion detection, we're not doing that barrier position at the end of it, but it's part of an end-to-end assumption. And I don't think that at this particular point, I started in security with RSA and Check Point, it was about layers of protection. Now it's layers of protection, and the inevitability that at some point something will happen, so about the recovery. So the exciting conversations we're having, especially with the big enterprises, is not about the fear factor, it's about, at some point something's going to occur. Speed of recovery is the conversation. And so for us, and your question is, are they talking to us about security, or more, the continuity position? And that's where the synergy's getting a lot simpler, rather than a hard demark between security and backup. >> Yeah, when you look at the stock market, everything's been hit, but security, with the exception of Okta, 'cause it got that weird benign hack, but security, generally, is an area that CIOs have said, hey, we can't really dial that back. We can maybe, some other discretionary stuff, we'll steal and prioritize. But security seems to be, and I think data protection is now part of that discussion. You're not a security company. We've seen some of your competitors actually pivot to become security companies. You're not doing that, but it's very clearly an adjacency, don't you think? >> It's an adjacency, and it's a new conversation that we're having with the Chief Information Security Officer. I had a meeting an hour ago with a customer who was hit by ransomware, and they got the call at 2:00 AM in the morning, after the ransomware they recovered their entire portfolio within 36 hours, from backups. Didn't even contact Veeam, I found out during this meeting. But that is clearly something that the Chief Information Security Officer wants to know about. It's part of his purview, is the recovery of that data. >> And they didn't pay the ransom? >> And they did not pay the ransom, not a penny. >> Ahh, we love those stories. Guys, thanks so much for coming on theCUBE. Congratulations on all the success. Love when you guys come on, and it was such a fun event at VeeamON. Great event here, and your presence is, was seen. The Veeam green is everywhere, so appreciate your time. >> Thank you. >> Thanks, Dave. >> Okay, and thank you for watching. This is Dave Vellante for John Furrier and Lisa Martin. We'll be back right after this short break. You're watching theCUBE's coverage of HPE Discover 2022, from Las Vegas. (inspiring music)

>> From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE at ETR. This is Breaking Analysis with Dave Vellante >> As we've reported extensively, the pandemic has affected cybersecurity markets perhaps more than any other. Remote work has caused CISOs, chief information security officers to shift spending priorities toward identity access management endpoint and cloud security. COVID has been a benefactor for next gen security companies that participate in these sectors. Notably, we believe tactical responses to the coronavirus have resulted in productivity improvements that will create permanent change in the way organizations defend themselves against cyber threats. Hello everyone and welcome to this week's Wikibon CUBE Insights powered by ETR. In this Breaking Analysis, we'll provide you with our quarterly update of the cybersecurity space and share fresh ETR data on the market. We also have some results from Eric Bradley's most recent Venn round table conducted with three senior chief information security officers. Let's start by looking at this notion of a single pane of glass. Now, despite the aspiration, there is no silver bullet to protect organizations from cyber attacks. The complexities of security, they're enormous and they require a layered defense approach. They range from securing internal networks to end points, to DMZ subnets, external traffic security, data in motion, data at rest, protecting from ransomware, dealing with web traffic, emails, phishing, not to mention threats from internal employees and contractors. As we mentioned at the open, there are three areas in particular that have seen significantly elevated spending momentum that is translated into the valuation increases for several companies, including CrowdStrike, Okta, Zscaler and several others. Zero trust security has gone from buzzword to reality. And spending shifts to these technologies have siphoned off demand from traditional hardware based firewalls. Although CISOs seem to be hedging their bets, at some point, they realized that people are actually going to come back to the office, so they have to remain agile. Lack of talent. Well, that remains one of the CISOs biggest challenges to securing applications and data. And automation while sometimes viewed as risky, is becoming increasingly important. Several companies have hit our radar this quarter and were highlighted in the CISO Panel, including Elastic which has seen momentum as an open source alternative to Splunk and notably multiple CIOs in the panel, they cited concerns related to Splunk's pricing and their sales tactics. They actually compared those of Splunk to those of EMC in the past, if anybody remembers how aggressive EMC salespeople could be. CloudFlare also broke into the top 10 in the ETR survey based on net score which is a measure of spending momentum. And that was for those companies with more than 50 mentions in the survey. CloudFlare is a CDN and provides security for websites. Also Netskope, a cloud security specialist cracked the top 10 in terms of net score and received high marks from the CISO panel, particularly with respect to it's vision and roadmap. Microsoft, Palo Alto Networks, Okta, CrowdStrike Cisco, CyberArk, SailPoint, Zscaler and Proofpoint remain focus vendors for us in the ETR survey as measured by spending momentum and their presence in the data set, what we call market share. And we'll talk more about those companies in a moment. Now finally, even CISOs that were skeptical about the permanence of the effects of COVID, they're seeing business benefits that suggest many of these shifts are circular, and not cyclical. Indeed, prior to the pandemic, ETR survey data showed that about 16% of organizations workers were primarily remote. CIOs expect that number to more than double post pandemic to 34%. Let's say you look at some of the cybersecurity vendors. We'll plot some, we don't have enough room to plot all of them, there are so many. But this chart shows one of our favorite XY views. On the Y axis, we measure net score. And that measures against spending velocity by looking at the net percentage of customers that are spending more versus those that are spending less within the ETR survey. The X axis measures market share or pervasiveness in the survey. Now we've included a select list of companies for this view and only include those with more than 50 responses, or 50 Ns, shared Ns, if you will, in the data set. In the upper right, you can see a table that shows the data sorted by both net score and shared Ns for each vendor. Now, as we indicated, Elastic has taken the top spot, just barely edging out Okta who took over from CrowdStrike in the last survey. And you can see the significant market presence of Palo Alto and Splunk and the most pervasive vendor here is Cisco. Note that Cisco also owns Umbrella and Duo which both have meaningful Ns in the survey. Now, if we were to combine these into one view, a single view of Cisco, all three of those, it would pull the company even further up into the right. Security is one of the bright spots in Cisco's portfolio and shows consistent year-on-year growth each quarter. Now having said that, some CISOs complained that Cisco's propensity to rely on acquisitions to fill gaps has caused them integration challenges in the past. Let's go back to Palo Alto for a moment. We'll make some comments later regarding their position relative to Fortinet, but we wanted to call them out here. Look, CISOs, they really liked Palo Alto. They trust the Palo Alto Networks. They consider Palo Alto as a trusted leader with a very strong portfolio and vision. Now let's turn our attention to the pack here, as we mentioned, Okta's momentum is notably elevated and it's meaningfully higher than the others. Its presence continues to increase up to the right, as does CrowdStrike's, or to the right, not necessarily up to the right, but to the right. But CrowdStrike has come off its net score high, so it's coming down actually in the vertical axis. And we're not super concerned about that because they're dramatically increasing their presence on the X axis each survey. But so is Okta, so that's something to watch. In other words, CrowdStrike's coming down in net score while it's increasing its presence, Okta is holding its net score while at the same time increasing its presence, which is really a strong sign. Now that they compete, they don't compete against each other directly, but it's they're still in the same sector. We've also included Carbon Black here because because of their VMware acquisition and VMware CEO, Pat Gelsinger, he's on a mission to fix security and the company has made a number of moves in cyber. VMware has a really good track record could of execution and while fixing Curity is highly aspirational. With its install base and history of success, we wanted to include them here because they're getting more attention of the CISOs in the ETR panel. So we're keeping an eye on VMware and Carbon Black. It's going to take some time, but we'll keep watching them. Now let's take a look at how the players have moved this year over the quarters. We're going to show you four tables here and we're going to compare the net scores and market share of the cyber companies for January, April, July, and October surveys. So pre-COVID and throughout the year. So let's look first at the pre-COVID positions. The left most chart is sorted by net score or spending momentum and the right most chart is the shared Ns, which is the number of mentions in the survey, which is what drives the horizontal axis that I showed you earlier. Now, when you go back to the January survey, you see CrowdStrike was already doing very well with an elevated net score of 68.3% and 123 mentions. By the way, please ignore those companies with less than 50 Ns, I didn't filter the data back then. I was kind of still learning how to use the ETR software platform. Okta was also elevated and you can see the others there as well. Now, last year, we came up with a method to assign stars to those companies that had both top net scores and large shared Ns in the survey. So spending momentum and strong market share. And you can see Microsoft, Splunk, Palo Alto Networks, Proofpoint, CrowdStrike, Zscaler and CyberArk made the cut and all received four stars. And we gave two stars to Cisco and Fortinet because they had strong net scores and very high presence in the survey. Now let's go forward and look at April when the lockdown was in full swing. Okay, so we tightened things up in April and on the presentation of the survey did and only included those companies with more than 50N. And we cut the top 10, that's the red line and we put in their Dell EMC which is RSA and IBM for context. And you can see CrowdStrike, they shot to the top with a 68% net score and increased it's shared N, and you can see the stars right. Now, let's just jump ahead to the July survey. So now we're well into the pandemic. Maybe things are calming down a little bit in the summer. People feeling a little bit more freedom, maybe not as concerned about the work-from-home peace, that's sort of settling in, and CISOs, they had a little time to respond here and that's kind of the picture in the summer. Okta jumped way up on the left, you see in spending momentum and CrowdStrike, they moderated a bit, although they remained elevated. And again, they're not direct competitors, but it's instructive to compare these two firms, 'cause they're both hot and growing. And you see the green lines, they show the direction of the momentum of the net score. CrowdStrike was a bit of a concern because its net score dropped and its presence in the dataset kind of moderated. But the company continued to report strong revenue during its earnings calls and the stock remain a darling. So some mixed signals in the data, one quarter doesn't necessarily make a trend. But Okta, Microsoft, Cisco, Palo Alto, Splunk and several others, they remained very, very strong. Now let's go into the most recent October survey. So again, we continue to fine tune our presentation analysis here. And you can see there are two red lines. The top one is the top 10 cutoff. And the second line is the top 20. As we said, Elastic hit the radar for net score but still not pervasive enough in the dataset on the right to earn some stars with the shared Ns. So Okta in our view continues to hold that top spot for momentum and made the top 10 cut for shared N, two very positive signs. It's shared N, for example, jumped from 139 to 185. So more and more mentions, people are increasingly relying on Okta for identity access management. Now for the green arrows here, the momentum lines, we've tried to take into consideration the shared N. So even though, for example CrowdStrike's net score dropped from 50 down to 43%, it's shared N, or again, the number of mentions, it jumped from 119 to 162. So that's a 36% increase and you might be thinking, well, why is that significant? Well, CIOs and IT buyers in the ETR survey, they're asked to choose the areas with which they are most familiar and then they answer questions on which vendors they use. So the fact that companies like Okta and Palo Alto and CrowdStrike and several others that we've highlighted are increasing their presence in the data set and still maintaining a very strong net score is a really good signal in our view. That's why, for example, take Zscaler, we still give them two stars, even though on a relative basis, it didn't make the top 10 cut. It's net score held relatively firm and it's shared N jumped by 39%. So we continue to like names like Zscaler, Okta, CrowdStrike, CyberArk, Proofpoint Fortinet and of course Microsoft, which consistently shines brightly. Let's look at a comment that underscores the CISOs sentiment and I think the market overall. Here's a comment from a CISO of a global travel and hospitality company. It's a name you would recognize and obviously this individual's business was hit hard by the pandemic. So there's an inherent bias toward hope anyway, toward a return to the normal. But look at the comment, I'll read it. "I was a skeptic on the permanence of the changes due to COVID, but I've seen firsthand, there are legitimate structural changes that are taking place, and that's going to fundamentally shift where companies are investing in cyber. Building leases are expiring, people, they're productive working from home. Products that enable work from home and that are cloud first, that trend will continue and be permanent." And you know what? We agree. Okay, here's a chart that we've been updating since right before the pandemic and it compares the performance of the S & P 500 and Nasdaq with specific security companies that are public. And we've been tracking the revenue multiples on a trailing 12 month revenue basis over time to get a sense of how these companies compare. And we prefer to use forward looking revenue, but find TTM to be more consistent and frankly easier to access quickly. So that's what we're using. Now note that Splunk, Octa, CrowdStrike and Zscaler, those are the guys I've highlighted in red, they have yet to report as of this publication. A couple of points here are worth noting. First, we've been talking a lot about the divergence in valuation between Palo Alto and Fortinet and we'll show some more data on that in a moment but we want to share some CISO comments about Fortinet. People sometimes refer to Fortinet as Forti knife, as in Swiss army knife. They're a Swiss army knife of cyber, Forti everything is what one CISO called it. Fortinet is more price attractive, especially for mid-sized companies who don't have the resources of larger firms that might gravitate toward Palo Alto Networks. And the companies around for awhile and has earned the trust of CISOs because of their portfolio and their track record. Now, the other notable item in this data is the rise in value for Okta, CrowdStrike and Zscaler which have seen values increase 78%, 128%, 124% respectively in the time period we show here. You can see the very highly elevated revenue multiples compared to some of the more mature companies. Splunk, they're a bit of an outlier here 'cause we're showing negative growth in that right-hand column. And that's because of its transition toward a subscription model. That really messes up the income statement. And we just wanted to cite that. Splunk's been doing a good job communicating to the street. There are some concerns in the ETR dataset, which we've talked about. They've sort of moderated lately. There's also concerns about pricing that CISOs have mentioned, but generally there's a real bifurcation in the market in terms of valuations. And we think that while there's a lot of discussion about the so-called stay-at-home stocks and a shift back away from those when the pandemic subsides, we believe that the productivity benefits of remote work are becoming more clear and these next gen security companies are going to continue to thrive. Now let's take a moment to look at the relative performance of Palo Alto and Fortinet. Back in February of this year, we noted that there was a valuation divergence occurring between these two companies. And we cited three factors at the time for this gap. First, we said the Palo Alto was trying to cloud proof its business, and as such, it was in transition. And second, it had some challenges with regard to the pace of that transition, including sales incentives, actually that's part of the first point. That was kind of one A. Secondly, we said that the shift away from appliance-based firewalls was accelerating and that was pressuring Palo Alto's valuation. They were kind of underperforming in that segment. And finally we said the Palo Alto was facing some very tough compares in 2019 relative to 2018. And that was causing investors to pause as Palo Alto began shifting to an annual recurring revenue model. Now we said at the time that CISOs really, they really liked Palo Alto and we felt it would... the company would deal with these issues in 2020. And this chart really shows that and they've begun to reverse this trend. The yellow line is Fortinet. The blue line is Palo Alto and it's showing this sort of relative performance here. And you can see that gap coming into 2020 which extended into the meat of 2020. But now it's starting to compress, thanks to a nice earnings report that beat EPS on revenue this month, as we're talking about Palo Alto. So we continue to believe that Fortinet has done a good job and a better job of moving to the cloud model. And Palo Alto has largely relied on acquisitions to accelerate this trend. And we'll see if they can continue to thrive during this transition to cloud. But there's little doubt that CISOs want to work with Palo Alto networks and they remain committed to having a strategic relationship with the company. Alright, let's wrap. The shift to the subscription model is well underway in the cybersecurity space and it's buoyed by cloud and next generation SAS-based security players. Splunk is in transition. Cisco and Palo Alto emphasize the importance of this trend and virtually all historically on-prem players are being forced to respond. Survey data and anecdotal information from theCUBE community supports what the ETR Venn CISOs are saying, that the internet is becoming the new private network and these trends toward cloud-based and remote worker support are delivering benefits that CEOs and CFOs are going to continue to push to operationalize. CISOs, they got to continue to take a multi-layered approach to defending their data, their applications and their users. And it's such a fragmented market with specialists is going to continue for quite some time. Now, despite these clear trends, CISOs face a real challenge, the timing of the return to semi normal, it's really uncertain. And we still don't have a clear picture of what that future will look like. As such incumbent firms with hardened networks, they're going to have to remain in a hybrid holding pattern to accommodate whatever happens. Why is that important? Well, this means that budgets are going to be stretched. Look, while security remains a top priority, you can't expect an open checkbook going to SecOps team. Throwing money at the problem wouldn't really solve it anyway. Rather CISOs have to take a balanced portfolio of investments, continuing with automation and data analytics and of course, good security practice practices. That's going to be the pattern. Alright, well, thanks everyone for watching this episode of theCUBE insights powered by ETR. There are many ways to get in touch. @dvellante on Twitter, david.vellante@siliconangle.com. You can comment on my LinkedIn posts. I publish weekly on wikibon.com and siliconangle.com and always appreciate the feedback from our community. These episodes, by the way, are all available as podcasts. So you can listen while you multitask and don't forget to check out etr.plus for all the survey action. This is Dave Vellante. Have a great Thanksgiving, be smart, stay safe and we'll see you next time. (light melodic music)

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation hello and welcome to the cube conversation here in the Palo Alto studio I'm John four host of the cube we are here at the quarantine crew of the cube having the conversations that matter the most now and sharing that with you got a great guest here Phil Quaid was the chief information security officer of Fortinet also the author of book digital bing-bang which I just found out he wrote talking about the difference cybersecurity and the physical worlds coming together and we're living that now with kovat 19 crisis were all sheltering in place Phil thank you for joining me on this cube conversation so I want to get in this quickly that I think the main top thing is that we're all sheltering in place anxiety is high but people are now becoming mainstream aware of what we all in the industry have been known for a long time role of data cybersecurity access to remote tools and we're seeing the work at home the remote situation really putting a lot of pressure on as I've been reporting what I call at scale problems and one of them is security right one of them is bandwidth we're starting to see you know the throttling of the packets people are now living with the reality like wow this is really a different environment but it's been kind of a disruption and has created crimes of opportunity for bad guys so this has been a real thing everyone's aware of it across the world this is something that's now aware on everyone's mind what's your take on this because you guys are fighting the battle and providing solutions and we're doing for a long time around security this highlights a lot of the things in the surface area called the world with what's your take on this carbon 19 orton s been advocating for architectures and strategies that allow you to defend anywhere from the edge through the core all the way up to the cloud boom so with you know high speed and integration and so all the sudden what we're seeing not just you know in the US but the world as well is that that edge is being extended in places that we just hadn't thought about or our CV that people just hadn't planned for before so many people or telecommunication able to move that edge securely out to people's homes and more remote locations and do so providing the right type of security of privacy if those communications that are coming out of those delicate ears I noticed you have a flag in the background and for the folks that might not know you spent a lot of time at the NSA government agency doing a lot of cutting-edge work I mean going back to you know really you know post 9/11 - now you're in the private sector with Fortinet so you don't really speak with the agency but you did live through a time of major transformation around Homeland Security looking at data again different physical thing you know terrorist attacks but it did bring rise to large-scale data to bring to those things so I wanted to kind of point out I saw the flag there nice nice touch there but now that you're in the private sector it's another transformation it's not a transition we're seeing a transformation and people want to do it fast and they don't want to have disruption this is a big problem what's your reaction to that yeah I think what you're reporting out that sometimes sometimes there's catalysts that cause major changes in the way you do things I think we're in one of those right now that we're already in the midst of an evolutionary trend towards more distributed workforces and as I mentioned earlier doing so with the right type of security privacy but I would think what I think the global camp in debt endemic is showing is that we're all going to be accelerating that that thing is like it's gonna be a lot less evolutionary and a little bit more faster that's what happens when you have major world events like this being 911 fortunate tragedies it causes people to think outside the box or accelerate what they're already doing I think wearing that in that world today yeah it pulls forward a lot of things that are usually on the planning side and it makes them reality I want to get your thoughts because not only are CEOs and their employees all thinking about the new work environment but the chief information security officer is people in your role have to be more aware as more things happening what's on the minds of CISOs around the world these days obviously the pandemics there what are you seeing what are some of the conversations what are some of the thought processes what specifically is going on in the of the chief information security officer yeah I think there's probably a there's probably two different two different things there's the there's the emotional side and there's the analytic side on the emotional side you might say that some Caesars are saying finally I get to show how cyber security can be in an abler of business right I can allow you to to to maintain business continuity by allowing your workers to work from home and trying sustain business and allow you to keep paying their salary is very very important to society there's a very important time to step up as the seaso and do what's helpful to sustain mission in on the practical side you say oh my goodness my job's gotten a whole lot harder because I can rely less and less on someone's physical controls that use some of the physical benefits you get from people coming inside the headquarters facility through locked doors and there's personal congress's and personal identification authentication you need to move those those same security strategies and policies and you need to move it out to this broad eggs it's gotten a lot bigger and a lot more distributed so I want to ask you around some of the things they're on cyber screws that have been elevated to the top of the list obviously with the disruption of working at home it's not like an earthquake or a tornado or hurricane or flood you know this backup and recovery for that you know kind of disaster recovery this has been an unmitigated disaster in the sense of it's been unfor casted I was talking to an IT guy he was saying well we provisioned rvv lands to be your VPNs to be 30% and now they need a hundred percent so that disruption is causing I was an under forecast so in cyber as you guys are always planning in and protecting has there been some things that have emerged that are now top of mind that are 100 percent mindshare base or new solutions or new challenges why keep quite done what we're referring to earlier is that yep any good see so or company executive is going to prepare for unexpected things to a certain degree you need it whether it be spare capacity or the ability to recover from something an act of God as you mentioned maybe a flood or tornado or hurricane stuff like that what's different now is that we have a disruption who which doesn't have an end date meaning there's a new temporal component that's been introduced that most companies just can't plan for right even the best of companies that let's say Ronald very large data centers they have backup plans where they have spare fuel to run backup generators to provide electricity to their data centers but the amount of fuel they have might only be limited to 30 days or so it's stored on-site we might think well that's pretty that's a lot of for thinking by storing that much fuel on site for to allow you to sort of work your way through a hurricane or other natural disaster what we have now is a is a worldwide crisis that doesn't have a 30-day window on it right we don't know if it's gonna be 30 days or 120 days or or you know even worse than that so what's different now is that it's not just a matter of surging in doing something with band-aids and twine or an extra 30 days what we need to do is as a community is to prepare solutions that can be enduring solutions you know I have some things that if the absent I might like to provide a little color what those types of solutions are but that that would be my main message that this isn't just a surge for 30 days this is a surge or being agile with no end in sight take a minute explain some of those solutions what are you seeing whatever specific examples and solutions that you can go deeper on there yeah so I talked earlier about the the edge meaning the place where users interact with machines and company data that edge is no longer at the desktop down the hallway it could be 10 miles 450 miles away to where anyone where I'm telling you I'm commuting crumb that means we need to push the data confidentiality things out between the headquarters and the edge you do that with things like a secure secured tunnel it's called VPNs you also need to make sure that the user identification authentication this much is a very very secure very authentic and with high integrity so you do that with multi-factor authentication there's other things that we like that that are very very practical that you do to support this new architecture and the good news is that they're available today in the good news at least with some companies there already had one foot in that world but as I mentioned earlier not all companies had yet embraced the idea of where you're going to have a large percentage of your workforce - until a community so they're not quite so they're there they're reacting quickly to to make sure this edge is better protected by identification and authentication and begins I want to get to some of those edge issues that now translate to kind of physical digital virtualization of of life but first I want to ask you around operational technology and IT OT IT these are kind of examples where you're seeing at scale problem with the pandemic being highlighted so cloud providers etc are all kind of impacted and bring solutions to the table you guys at Foot are doing large scale security is there anything around the automation side of it then you've seen emerge because all the people that are taking care of being a supplier in this new normal or this crisis certainly not normal has leveraged automation and data so this has been a fundamental value proposition that highlights what we call the DevOps movement in the cloud world but automation has become hugely available and a benefit to this can you share your insights into how automation is changing with cyber I think you up a nice question for me is it allowed me to talk about not only automation but convergence so it's let's hit automation first right we all even even pre-crisis we need to be better at leveraging automation to do things that machines do best allow people to do higher-order things whether it's unique analysis or something else with a with a more distributed workforce and perhaps fewer resources automation is more important ever to automatically detect bad things that are about to happen automatically mitigating them before they get or they get to bad you know in the cybersecurity world you use things like agile segmentation and you use like techniques called soar it's a type of security orchestration and you want to eat leverage those things very very highly in order to leverage automation to have machines circum amount of human services but you also brought up on my favorite topics which is ot graceful technology though OTS you know are the things that are used to control for the past almost a hundred years now things in the physical world like electric generators and pipes and valves and things like that often used in our critical infrastructures in my company fort net we provide solutions that secure both the IT world the traditional cyber domain but also the OT systems of the world today where safety and reliability are about most important so what we're seeing with the co19 crisis is that supply chains transportation research things like that a lot of things that depend on OT solutions for safety and reliability are much more forefront of mine so from a cybersecurity strategy perspective what you want to do of course is make sure your solutions in the IT space are well integrated with you solutions in the OT space to the so an adversary or a mistake in cause a working to the crack in causing destruction that convergence is interesting you know we were talking before you came on camera around the fact that all these events are being canceled but that really highlights the fact that the physical spaces are no longer available the so-called ot operational technologies of events is the plumbing the face-to-face conversations but everyone's trying to move to digital or virtual eyes that it's not as easy as just saying we did it here we do it there there is a convergence and some sort of translation this new there's a new roles there's new responsibilities new kinds of behaviors and decision making that goes on in the physical and digital worlds that have to then come together and get reimagined and so what's your take on all this because this is not so much about events but although that's kind of prime time problem zooming it is not the answer that's a streaming video how do you replicate the value of physical into the business value in digital it's not a one-to-one so it's quite possible that that we might look back on this event to cover 19 experience we might look back at it in five or ten years and say that was simply a foreshadowing of our of the importance of making sure that our physical environment is appropriate in private what I mean is that with the with the rapid introduction of Internet of Things technologies into the physical world we're going to have a whole lot of dependencies on the thing inconveniences tendencies inconveniences on things an instrument our physical space our door locks or automobiles paths our temperatures color height lots of things to instrument the physical space and so there's gonna be a whole lot of data that's generated in that cyber in a physical domain increasingly in the future and we're going to become dependent upon it well what happens if for whatever reason in the in the future that's massively disruptive so all of a sudden we have a massive disruption in the physical space just like we're experiencing now with open 19 so again that's why it makes sense now to start your planning now with making sure that your safety and reliability controls in the physical domain are up to the same level security and privacy as the things in your IT delete and it highlights what's the where the value is to and it's a transformation I was just reading an article around spatial economics around distance not being together it's interesting on those points you wrote a book about this I want to get your thoughts because in this cyber internet or digital or virtualization of physical to digital whether it's events or actual equipment is causing people to rethink architectures you mentioned a few of them what's the state of the art thinking around someone who has the plan for this again is in its complex it's not just creating a gateway or a physical abstraction layer of software between two worlds there's almost a blending or convergence here what's your what's your thoughts on what's the state of the art thinking on this area yeah the book that I number of a very esteemed colleagues contribute to what we said is that it's time to start treating cybersecurity like a science let's not pretend it's a dark art that we have to relearn every couple years and what what we said in the in the digital Big Bang is that humankind started flourishing once we admitted our ignorance in ultimately our ignorance in the physical world and discovered or invented you can right word the disciplines of physics and chemistry and once we recognize that our physical world was driven by those scientific disciplines we started flourishing right the scientific age led to lots of things whether it would be transportation health care or lots of other things to improve our quality of life well if you fast forward 14 billion years after that cosmic Big Bang which was driven by physics 50 years ago or so we had a digital Big Bang where there was a massive explosion of bits with the invention of the internet and what we argue in the book is that let's start treating cybersecurity like a science or the scientific principle is that we ought to write down and follow a Rousseau's with you so we can thrive in the in the in a digital Big Bang in the digital age and one more point if you don't mind what we what we noted is that the internet was invented to do two things one connect more people or machines than ever imagined in to do so in speeds that were never imagined so the in the Internet is is optimized around speed in connectivity so if that's the case it may be a fundamental premise of cybersecurity science is make sure that your cyber security solutions are optimized around those same two things that the cyber domains are optimized around speed in integration continue from there you can you can build on more and more complex scientific principles if you focus on those fundamental things and speed and integration yeah that's awesome great insight they're awesome I wanted to throw in while you had the internet history lesson down there also was interesting was a very decentralization concept how does that factor in your opinion to some of the security paradigms is that helped or hurt or is it create opportunities for more secure or does it give the act as an advantage yeah I love your questions is your it's a very informed question and you're in a give me good segue to answer the way you know it should be answer yeah the by definition the distributed nature of the Internet means it's an inherently survivable system which is a wonderful thing to have for a critical infrastructure like that if one piece goes down the hole doesn't go down it's kind of like the power grid the u.s. the u.s. electrical power grid there's too many people who say the grid will go down well that's that's just not a practical thing it's not a reality thing the grades broken up into three major grades and there's AB ulis strategies and implementations of diversification to allow the grid to fail safely so it's not catastrophic Internet's the same thing so like my nipple like I was saying before we ought to de cyber security around a similar principle that a catastrophic failure in one partner to start cybersecurity architecture should result in cascading across your whole architecture so again we need to borrow some lessons from history and I think he bring up a good one that the internet was built on survivability so our cybersecurity strategies need to be the same one of the ways you do that so that's all great theory but one of the ways you do that of course is by making your cybersecurity solutions so that they're very well integrated they connect with each other so that you know speaking in cartoon language you know if one unit can say I'm about to fail help me out and another part of your architecture can pick up a slack and give you some more robust security in that that's what a connected the integrated cyber security architecture do for you yeah it's really fascinating insight and I think resiliency and scale are two things I think are going to be a big wave is going to be added into the transformations that going on now it's it's very interesting you know Phil great conversation I could do a whole hour with you and do a fish lead a virtual panel virtualize that our own event here keynote speech thanks so much for your insight one of things I want to get your thoughts on is something that I've been really thinking a lot lately and gathering perspectives and that is on biosecurity and I say biosecurity I'm referring to covet 19 as a virus because biology involves starting a lab or some people debate all that whether it's true or not but but that's what people work on in the biology world but it spreads virally like malware and has a similar metaphor to cybersecurity so we're seeing conversation starting to happen in Washington DC in Silicon Valley and some of my circles around if biology weapon or it's a tool like open-source software could be a tool for spreading cybersecurity Trojans or other things and techniques like malware spear phishing phishing all these things are techniques that could be deployed metaphorically to viral distribution a biohazard or bio warfare if you will will it look the same and how do you defend against the next covet 19 this is what you know average Americans are seeing the impact of the economy with the shelter in place is that what happens again and how do we prevent it and so a lot of people are thinking about this what is your thoughts because it kind of feels the same way as cybersecurity you got to see it early you got to know what's going on you got to identify it you got to respond to it time to close your contain similar concepts what's your thoughts on with BIOS we don't look with all due respect to the the the bio community let me make a quick analogy to the cyber security strategy right cyber security strategy starts with we start as an attacker so I parts of my previous career I'm an authorized had the opportunity to help develop tools that are very very precisely targeted against foreign adversaries and that's a harder job than you think I mean I think the same is true of anyone of a natural-born or a custom a buyer buyer is that not just any virus has the capability to do a lot of harm to a lot of people selling it so it's it's if that doesn't mean though you can sit back and say since it's hard it'll never happen you need to take proactive measures to look for evidence of a compromise of something whether it's a cyber cyber virus or otherwise you have to actively look for that you have to harm yourself to make sure you're not susceptible to it and once you detect one you need to make sure you have a the ability to do segmentation or quarantine very rapidly very very effectively right so in the cyber security community of course the fundamental strategy is about segmentation you keep different types of things separate that don't need to interact and then if you do have a compromise not everything is compromised and then lastly if you want to gradually say bring things back up to recover you can do some with small chunks I think it's a great analogy segmentation is a good analogy to I think what the nation is trying to do right now by warranty kneeing and gradually reopening up things in in segments in actually mention earlier that some of the other techniques are very very similar you want to have good visibility of where you're at risk and then you can automatically detect and then implement some some mitigations based on that good visibility so I agree with you that it turns out that the cyber security strategies might have a whole lot in common with biohazard I address it's interesting site reliability engineers which is a term that Google coined when they built out their large-scale cloud has become a practice that kind of mindset combined with some of the things that you're saying the cyber security mindset seemed to fit this at scale problem space and I might be an alarmist but I personally believe that we've been having a digital war for many many years now and I think that you know troops aren't landing but it's certainly digital troops and I think that we as a country and a global state and global society have to start thinking about you know these kinds of things where a virus could impact the United States shut down the economy devastating impact so I think Wars can be digital and so I may be an alarmist and a conspirators but I think that you know thinking about it and talking about it might be a good thing so appreciate your insights there Phil appreciated what one other point that might be interesting a few years back I was doing some research with the National Lab and we're looking for novel of cybersecurity analytics and we hired some folks who worked in the biology the bio the biomedical community who were studying a biome fires at the time and it was in recognition that there's a lot of commonality between those who are doing cybersecurity analytics and those reviewing bio biology or biomedical type analytics in you know there was a lot of good cross fertilization between our teams and it kind of helps you bring up one more there's one more point which is what we need to do in cybersecurity in general is have more diversity of workforces right now I don't mean just the traditional but important diversities of sex or color but diversity of experiences right some of the best people I've worked with in the cyber analytics field weren't computer science trained people and that's because they came in problems differently with a different background so one of the things that's really important to our field at large and of course the company my company fort net is to massively increase the amount of cyber security training that's available to people not just the computer scientists the world and the engineers but people in other areas as well the other degree to non-greek people and with that a you know higher level of cyber security training available to a more diverse community not only can we solve the problem of numbers we don't have enough cybersecurity people but we can actually increase our ability to defend against these things I have more greater diversity of thought experience you know that's such a great point I think I just put an exclamation point on that I get that question all the time and the skills gap is should I study computer science and like actually if you can solve problems that's a good thing but really diversity about diversity is a wonderful thing in the age of unlimited compute power because traditionally diversity whether it was protocol diversity or technical diversity or you know human you know makeup that's tend to slow things down but you get higher quality so that's a generalization but you get the point diversity does bring quality and if you're doing a data science you don't want have a blind spot I'm not have enough data so yeah I think a good diverse data set is a wonderful thing you're going to a whole nother level saying bringing diversely skill sets to the table because the problems are diverse is that what you're getting at it is it's one of our I'll say our platforms that we're talking about during the during the covered nineteen crisis which is perhaps there's perhaps we could all make ourselves a little bit better by taking some time out since we're not competing taking some time out and doing a little bit more online training where you can where you can either improve your current set of cybersecurity skills of knowledge or be introduced to them for the first time and so there's one or some wonderful Fortinet training available that can allow both the brand-new folks the field or or the the intermediate level folks with you become higher level experts it's an opportunity for all of us to get better rather than spending that extra hour on the road every day why don't we take at least you know 30 of those 60 minutes or former commute time and usually do some online soccer security treaty feel final question for you great insight great conversation as the world and your friends my friends people we don't know other members of society as they start to realize that the virtualization of life is happening just in your section it's convergence what general advice would you have for someone just from a mental model or mindset standpoint to alleviate any anxiety or change it certainly will be happening so how they can better themselves in their life was it is it thinking more about the the the experiences is it more learning how would you give advice to folks out there who are gonna come out of this post pandemic certainly it's gonna be a different world we're gonna be heightened to digital and virtual but as things become virtualized how can someone take this and make a positive outcome out of all this I I think that the future the future remains bright earlier we talked about sci-fi the integration of the cyber world in the physical world that's gonna provide great opportunities to make us more efficient gives us more free time detect bad things from happening earlier and hopefully mitigating those bad things from happening earlier so a lot of things that some people might use as scare tactics right convergence and Skynet in in robotics and things like that I believe these are things that will make our lives better not worse our responsibilities though is talking about those things making sure people understand that they're coming why they're important and make sure we're putting the right security and privacy to those things as these worlds this physical world and the soccer worlds converged I think the future is bright but we still have some work to do in terms of um making sure we're doing things at very high speeds there's no delay in the cybersecurity we put on top of these applications and make sure we have very very well integrated solutions that don't cause things to become more complex make make things easier to do certainly the winds of change in the big waves with the transformations happening I guess just summarize by saying just make it a head win I mean tailwind not a headwind make it work for you at the time not against it Phil thank you so much for your insights I really appreciate this cube conversation remote interview I'm John Ford with the cube talking about cybersecurity and the fundamentals of understanding what's going on in this new virtual world that we're living in to being virtualized as we get back to work and as things start to to evolve further back to normal the at scale problems and opportunities are there and of course the key was bringing it to you here remotely from our studio I'm John Ferrier thanks for watching [Music]

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's the cube. Now, here's your host, Dave Vellante. >> Hello everyone and welcome to this week's Wikibon cube insights powered by ETR. In this breaking analysis ahead of the RSA conference, we want to update you on the cyber security sector. This year's event is underlined by coronavirus fears, IBM has pulled out of the event and cited the epidemic as the reason and it's also brings to the front the sale of RSA by Dell to STG partners and private equity firm. Now in our last security drill down, we cited several mega trends in the security sector. These included the ever escalating sophistication of the attacker, the increased risk from the data economy, the expanded attack surface with the huge number of IP addresses that are that are exploding out there, and the lack of skills and the number of cyber tools that are coming to the market. Now, as you know, in these segments, we'd like to share insights from the cube. And I want you to listen to two American statesman and what they said, on The Cube. Here's general Keith Alexander, who's the former director of the NSA, along with Dr. Robert Gates, who's the former director of the CIA and former Secretary of Defense, play the clip. >> When you think about threats, you think about nation states, so you can go to Iran, Russia, China, North Korea, and then you think about criminal threats, and all the things like ransomware. Some of the nation state actors are also criminals at night, so they can use nation state tools and my concern about all the evolution of cyber threats is that the attacks are getting more destructive. >> I think cyber and the risks associated with cyber, and IT need to be a regular part of every board's agenda. >> So you hear General Alexander really underscore the danger, as well, Dr. Gates is articulating what we've said many times on the cube that cyber security is a board level agenda item. Now, the comments from both of these individuals represent what I would consider tailwinds for cyber technology companies. Now we're going to drill into some of those today. But it's not all frictionless. There are headwinds to in this market space, cloud migration, the shift from north south south to East West network traffic, its pressure traditional appliance based perimeter security solutions, increase complexity and lack of skills and other macro factors, including questions on ROI. CFO saying, hey, we spend all this cash, why aren't we more secure? Now, I want you to hear from two chief information security officers officers on both the challenges that they face and how they're dealing with them. Roll the clip. >> Lack of talent, I mean, we're starving for talent. Cybersecurity is the only field in the world with negative unemployment. We just don't have the actual bodies to actually fill the gaps that we have and in that lack of talent Cecil's are starving. >> I think that the public cloud offers us a really interesting opportunity to reinvent security right. So if you think about all of the technologies and processes and many of which are manual over the years, I think we have an opportunity to leverage automation to make our work easier in some ways. >> Now I featured Brian Lozada and Katie Jenkins before and breaking analysis segments, and you can hear it from the cyber leaders, we lack the talent, and cloud computing and automation are areas we're pursuing. So this challenges security companies to respond. But at the end of the day, companies have no no choice. In other words, organizations buying security solutions, the sophistication of the attacker is very high and the answer to my CFO and ROI is fear based. If you don't do this, you might lose billions in market cap. Now, I want you to take a listen to these cubilam talking about the attacker of sophistication and the importance of communication skills in order to fund cyber initiatives, really to keep up with the bad guys, please play the clip. >> The adversary is talented and they're patient, they're well funded okay, that's that's where it starts. And so, you know why why bring an interpreter to a host when there's already one there right? Why write all this complicated software distribution when I can just use yours. And so that's that's where the play the game starts. And and the most advanced threats aren't leaving footprints because the footprints already there, you know, they'll get on a machine and behaviorally they'll check the cash to see what's hot. And what's hot in the cash means that behaviorally, it's a fast they can go they're not cutting a new trail most of the time, right? So living off the land is not only the tools that they're using the automation, your automation they're using against you, but it's also behavioral. >> That's why the most the most important talent or skill that a security professional needs is communication skills. If you can't articulate technical risk into a business risk to fund your program, it's, you know, it's very hard for you to actually be successful in security. >> Now, the really insidious thing about what TK Keanini just said is the attackers are living off the land, meaning they're using your tools and your behaviors to sneak around your data unnoticed. And so as Brian Lozada said, as a security Pro, you need to be a great communicator in order to get the funding that you need to compete with the bad guys. Which brings me to the RSA conference. This is why you as a security practitioner attend, you want to learn more, you want to obtain new skills, you want to bring back ideas to the organization. Now one of the things I did to prepare for this segment is to read the RSA conference content agenda, which was co authored by Britta Glade and I read numerous blogs and articles about what to expect at the event and from all that I put together this word cloud, which conveys some of the key themes that I would expect you're going to hear at the shows. Look at skills jump right out, just like Brian was saying, the human element is going to be a big deal this year. IoT and the IT OT schism, everyone's talking about the Olympics, and seeing that as a watershed event for cyber, how to apply machine learning and AI is a big theme, as is cloud with containers and server less. phishing, zero trust and frameworks, framework for privacy, frameworks for governance and compliance, the 2020 election and weaponizing social media with deep fakes, and expect to hear a lot about the challenges of securing 5G networks, open source risks, supply chain risks, and of course, the need for automation. And it's no surprise there's going to be a lot of talk about cyber technology, the products and of course, the companies that sell them. So let's get into the market and unpack some of the ETR spending data and drill into some of these companies. The first chart I want to show you is spending on cyber relative to other initiatives. What this chart shows is the spending on cyber security highlighted in the green in relation to other sectors in the ETR taxonomy. Notice the blue dot. It shows the change in spending expected in 2020 versus 2019. Now, two points here. First, is that despite the top of my narrative that we always hear, the reality is that other initiatives compete for budget and you just can't keep throwing cash at the security problem. As I've said before, we spend like .014% percent of our global GDP on cyber, so we barely scratched the surface. The second point is there's there's there's a solid year on year growth quite high at 12% for a sector that's estimated at 100 to 150 billion dollars worldwide, according to many sources. Now let's take a look at some of the players in this space, who are going to be presenting at the RSA conference. You might remember to my 2020 predictions in that breaking analysis I focused on two ETR metrics, Net Score, which is a measure of spending velocity and Market Share, which measures pervasiveness in the data set. And I anointed nine security players as four star players. These were Microsoft, Cisco, Palo Alto Networks, Splunk, Proofpoint, Fortinet, Oka, Cyber Ark and CrowdStrike. What we're showing here is an update of that data with the January survey data. My four star companies were defined as those in the cyber security sector that demonstrate in both net scores or spending momentum, that's the left hand chart and market share or pervasiveness on the right hand chart. Within the top 22 companies, why did I pick 22? Well, seemed like a solid number and it fit nicely in the screen and allowed more folks. So a few takeaways here. One is that there are a lot of cyber security companies in the green from the standpoint of net score. Number two is that Fortinet and Cisco fell off the four star list because of their net scores. While still holding reasonably well, they dropped somewhat. Also, some other companies like Verona's and Vera code and Carbon Black jumped up on the net score rankings, but Cisco and Fortinet are still showing some strength in the market overall, I'ma talk about that. Cisco security businesses up 9% in the quarter, and Fortinet is breaking away from Palo Alto Networks from a valuation perspective, which I'm going to drill into a bit. So we're going to give Cisco and Fortinet two stars this survey period. But look at Zscaler. They made the cut this time their net score or spending momentum jumped from 38% last quarter to nearly 45% in the January survey, with a sizable shared in at 123. So we've added Zscaler to the four star list, they have momentum, and we're going to continue to watch that quarterly horse race. Now, I'd be remiss if I didn't point out that Microsoft continues to get stronger and stronger in many sectors including cyber. So that's something to really pay attention to. Okay, I want to talk about the valuations a bit. Valuations of cyber security space are really interesting and for reasons we've discussed before the market's hot right now, some people think it's overvalued, but I think the space is going to continue to perform quite well, relative to other areas and tech. Why do I say that? Because cyber continues to be a big priority for organizations, the software and annual recurring revenue contribution ARR continues to grow, M&A is going to continue to be robust in my view, which is going to fuel valuations. So Let's look at some of the public companies within cyber. What I've compiled in this chart is eight public companies that were cited as four star or two star firms, as I defined earlier, now ranked this by market value. In the columns, we show the market cap and trailing 12 month revenue in billions, the revenue multiple and the annual revenue growth. And I've highlighted Palo Alto Networks and Fortinet because I want to drill into those two firms, as there's a valuation divergence going on between those two names, and I'll come back to that in just a minute. But first, I want to make a few points about this data. Number one is there's definitely a proportional relationship between the growth rate and the revenue multiple or premium being paid for these companies. Generally growth ranges between one and a half to three times the revenue multiple being paid. CrowdStrike for example has a 39 x revenue multiple and is growing at 110%, so they're at the high end of that range with a growth at 2.8 times their revenue multiple today. Second, and related, as you can see a wide range of revenue multiples based on these growth rates with CrowdStrike, Okta and now Zscaler as the standouts in this regard. And I have to call at Splunk as well. They're both large, and they have high growth, although they are moving beyond, you know, security, they're going into adjacencies and big data analytics, but you you have to love the performance of Splunk. The third point is this is a lucrative market. You have several companies with valuations in the double digit billions, and many with multi billion dollar market values. Cyber chaos means cash for many of these companies, and, of course for their investors. Now, Palo Alto throw some of these ratios out of whack, ie, why the lower revenue multiple with that type of growth, and it's because they've had some execution issues lately. And this annual growth rate is really not the best reflection of the stock price today. That's really being driven by quarterly growth rates and less robust management guidance. So why don't we look into that a bit. What this chart shows is the one year relative stock prices of Palo Alto Networks in the blue and compared to Fortinet in the red. Look at the divergence in the two stocks, look at they traded in a range and then you saw the split when Palo Alto missed its quarter last year. So let me share what I think is happening. First, Palo Alto has been a very solid performance since an IPO in 2012. It's delivered more than four Rex returns to shareholders over that period. Now, what they're trying to do is cloud proof their business. They're trying to transition more to an AR model, and rely less on appliance centric firewalls, and firewalls are core part of the business and that has underperformed expectations lately. And you just take Legacy Tech and Cloud Wash and Cloud native competitors like Zscaler are taking advantage of this and setting the narrative there. Now Palo Alto Network has also had some very tough compares in 2019 relative to 2018, that should somewhat abate this year. Also, Palo Alto has said some execution issues during this transition, especially related to sales and sales incentives and aligning that with this new world of cloud. And finally, Palo Alto was in the process of digesting some acquisitions like Twistlock, PureSec and some others over the past year, and that could be a distraction. Fortinet on the other hand, is benefiting from a large portfolio refresh is capitalizing on the momentum that that's bringing, in fact, all the companies I listed you know, they may be undervalued despite, of all the company sorry that I listed Fortinet may be undervalued despite the drop off from the four star list that I mentioned earlier. Fortinet is one of those companies with a large solution set that can cover a lot of market space. And where Fortinet faces similar headwinds as Palo Alto, it seems to be executing better on the cloud transition. Now the last thing I want to share on this topic is some data from the ETR regression testing. What ETR does is their data scientists run regression models and fit a linear equation to determine whether Wall Street earnings consensus estimates are consistent with the ETR spending data, they started trying to line those up and see what the divergence is. What this chart shows is the results of that regression analysis for both Fortinet and Palo Alto. And you can see the ETR spending data suggests that both companies could outperform somewhat expectations. Now, I wouldn't run and buy the stock based on this data as there's a lot more to the story, but let's watch the earnings and see how this plays out. All right, I want to make a few comments about the sale of the RSA asset. EMC bought RSA for around the same number, roughly $2 billion that SDG is paying Dell. So I'm obviously not impressed with the return that RSA has delivered since 2006. The interesting takeaway is that Dell is choosing liquidity over the RSA cyber security asset. So it says to me that their ability to pay down debt is much more important to Dell and their go forward plan. Remember, for every $5 billion that Dell pays down in gross debt, it dropped 25 cents to EPS. This is important for Dell to get back to investment grade debt, which will further lower its cost. It's a lever that Dell can turn. Now and also in thinking about this, it's interesting that VMware, which the member is acquiring security assets like crazy and most recently purchased carbon black, and they're building out a Security Division, they obviously didn't paw on the table fighting to roll RSA into that division. You know maybe they did in the financial value of the cash to Dell was greater than the value of the RSA customers, the RSA product portfolio and of course, the RSA conference. But my guess is Gelsinger and VMware didn't want the legacy tech. Gelsinger said many times that security is broken, it's his mission to fix it or die trying. So I would bet that he and VMware didn't see RSA as a path to fixing security, it's more likely that they saw it as a non strategic shrinking asset that they didn't want any part of. Now for the record, and I'm even won't bother showing you the the data but RSA and the ETR data set is an unimpressive player in cyber security, their market share or pervasiveness is middle of the pack, so it's okay but their net score spending velocities in the red, and it's in the bottom 20th percentile of the data set. But it is a known brand, certainly within cyber. It's got a great conference and it's been it's probably better that a PE company owns them than being a misfit toy inside of Dell. All right, it's time to summarize, as we've been stressing in our breaking analysis segments and on the cube, the adversaries are very capable. And we should expect continued escalation. Venture capital is going to keep pouring into startups and that's going to lead to more fragmentation. But the market is going to remain right for M&A With valuations on the rise. The battle continues for best of breed tools from upstarts like CrowdStrike and Okta and Zscaler versus sweets from big players like Cisco, Palo Alto Networks and Fortinet. Growth is going to continue to drive valuations. And so let's keep our eyes on the cloud, remains disruptive and for some provides momentum for others provides friction. Security practitioners will continue to be well paid because there's a skill shortage and that's not going away despite the push toward automation. Got in talk about machine intelligence but AI and ML those tools, there are two edged sword as bad actors are leveraging installed infrastructure, both tools and behaviors to so called live off the land, upping the stakes in the arms race. Okay, this is Dave Vellante for Wikibon's CUBE Insights powered by ETR. Thanks for watching this breaking analysis. Remember, these episodes are all available as podcasted Spotfire or wherever you listen. Connect with me at david.vellante at siliconangle.com, or comment on my LinkedIn. I'm @dvellante on Twitter. Thanks for watching everybody. We'll see you next time. (upbeat music).

>> Is and who we are today as as a country, as a universe. >> Narrator: Congratulations Reggie Jackson, (inspirational music) you are a CUBE alumni. (upbeat music) >> Announcer: Live from Las Vegas it's theCUBE covering Splunk.Conf19. Brought to you by Splunk. >> Okay, welcome back everyone it's theCUBE's live coverage here in Las Vegas for Splunk.Conf19. I am John Furrier host of theCUBE. It's the 10th Anniversary of Splunk's .Conf user conference. Our 7th year covering it. It's been quite a ride, what a wave. Splunk keeps getting stronger and better, adding more features, and has really become a powerhouse from a third party security standpoint. We got a C-SO in theCUBE on theCUBE today. Chief Information Security, John Frushour Deputy Chief (mumbles) New York-Presbyterian The Award Winner from the Data to Everywhere Award winner, welcome by theCube. >> Thank you, thank you. >> So first of all, what is the award that you won? I missed the keynotes, I was working on a story this morning. >> Frushour: Sure, sure. >> What's the award? >> Yeah, the Data Everything award is really celebrating using Splunk kind of outside its traditional use case, you know I'm a security professional. We use Splunk. We're a Splunk Enterprise Security customer. That's kind of our daily duty. That's our primary use case for Splunk, but you know, New York Presbyterian developed the system to track narcotic diversion. We call it our medication analytics platform and we're using Splunk to track opioid diversion, slash narcotic diversions, same term, across our enterprise. So, looking for improper prescription usage, over prescription, under prescription, prescribing for deceased patients, prescribing for patients that you've never seen before, superman problems like taking one pill out of the drawer every time for the last thirty times to build up a stash. You know, not resupplying a cabinet when you should have thirty pills and you only see fifteen. What happened there? Everything's data. It's data everything. And so we use this data to try to solve this problem. >> So that's (mumbles) that's great usage we'll find the drugs, I'm going to work hard for it. But that's just an insider threat kind of concept. >> Frushour: Absolutely. >> As a C-SO, you know, security's obviously paramount. What's changed the most? 'Cause look at, I mean, just looking at Splunk over the past seven years, log files, now you got cloud native tracing, all the KPI's, >> Frushour: Sure. >> You now have massive volumes of data coming in. You got core business operations with IOT things all instrumental. >> Sure, sure. >> As a security offer, that's a pretty big surface area. >> Yeah. >> How do you look at that? What's your philosophy on that? >> You know, a lot of what we do, and my boss, the C-SO (mumbles) we look at is endpoint protection and really driving down to that smaller element of what we complete and control. I mean, ten, fifteen years ago information security was all about perimeter control, so you've got firewalls, defense and depth models. I have a firewall, I have a proxy, I have an endpoint solution, I have an AV, I have some type of data redaction capability, data masking, data labeling capability, and I think we've seen.. I don't think security's changed. I hear a lot of people say, "Oh, well, information security's so much different nowadays." No, you know, I'm a military guy. I don't think anything's changed, I think the target changed. And I think the target moved from the perimeter to the endpoint. And so we're very focused on user behavior. We're very focused on endpoint agents and what people are doing on their individual machines that could cause a risk. We're entitling and providing privilege to end users today that twenty years ago we would've never granted. You know, there was a few people with the keys to the kingdom, and inside the castle keep. Nowadays everybody's got an admin account and everybody's got some level of privilege. And it's the endpoint, it's the individual that we're most focused on, making sure that they're safe and they can operate effectively in hospitals. >> Interviewer: What are some of the tactical things that have changed? Obviously, the endpoint obviously shifted, so some tactics have to change probably again. Operationally, you still got to solve the same problem: attacks, insider threats, etc. >> Frushour: Yeah. >> What are the tactics? What new tactics have emerged that are critical to you guys? >> Yeah, that's a tough question, I mean has really anything changed? Is the game really the game? Is the con really the same con? You look at, you know, titans of security and think about guys like Kevin Mitnick that pioneered, you know, social engineering and this sort of stuff, and really... It's really just convincing a human to do something that they shouldn't do, right? >> Interviewer: Yeah. >> I mean you can read all these books about phone freaking and going in and convincing the administrative assistant that you're just late for meeting and you need to get in through that special door to get in that special room, and bingo. Then you're in a Telco closet, and you know, you've got access. Nowadays, you don't have to walk into that same administrative assistant's desk and convince 'em that you're just late for the meeting. You can send a phishing email. So the tactics, I think, have changed to be more personal and more direct. The phishing emails, the spear phishing emails, I mean, we're a large healthcare institution. We get hit with those types of target attacks every day. They come via mobile device, They come via the phishing emails. Look at the Google Play store. Just, I think, in the last month has had two apps that have had some type of backdoor or malicious content in them that got through the app store and got onto people's phones. We had to pull that off people's phones, which wasn't pretty. >> Interviewer: Yeah. >> But I think it's the same game. It's the same kind to convince humans to do stuff that they're not supposed to do. But the delivery mechanism, the tactical delivery's changed. >> Interviewer: How is Splunk involved? Cause I've always been a big fan of Splunk. People who know me know that I've pretty much been a fan boy. The way they handle large amounts of data, log files, (mumbles) >> Frushour: Sure. >> and then expand out into other areas. People love to use Splunk to bring in their data, and to bring it into, I hate to use the word data leg but I mean, Just getting... >> Yeah >> the control of the data. How is data used now in your world? Because you got a lot of things going on. You got healthcare, IOT, people. >> Frushour: Sure, sure. >> I mean lives are on the line. >> Frushour: Lives are on the line, yeah. >> And there's things you got to be aware of and data's key. What is your approach? >> Well first I'm going to shamelessly plug a quote I heard from (mumbles) this week, who leads the security practice. She said that data is the oxygen of AI, and I just, I love that quote. I think that's just a fantastic line. Data's the oxygen of AI. I wish I'd come up with it myself, but now I owe her a royalty fee. I think you could probably extend that and say data is the lifeline of Splunk. So, if you think about a use case like our medication analytics platform, we're bringing in data sources from our time clock system, our multi-factor authentication system, our remote access desktop system. Logs from our electronic medical records system, Logs from the cabinets that hold the narcotics that every time you open the door, you know, a log then is created. So, we're bringing in kind of everything that you would need to see. Aside from doing something with actual video cameras and tracking people in some augmented reality matrix whatever, we've got all the data sources to really pin down all the data that we need to pin down, "Okay, Nurse Sally, you know, you opened that cabinet on that day on your shift after you authenticated and pulled out this much Oxy and distributed it to this patient." I mean, we have a full picture and chain of everything. >> Full supply chain of everything. >> We can see everything that happens and with every new data source that's out there, the beauty of Splunk is you just add it to Splunk. I mean, the Splunk handles structured and unstructured data. Splunk handles cis log fees and JSON fees, and there's, I mean there's just, it doesn't matter You can just add that stream to Splunk, enrich those events that were reported today. We have another solution which we call the privacy platform. Really built for our privacy team. And in that scenario, kind of the same data sets. We're looking at time cards, we're looking at authentication, we're looking at access and you visited this website via this proxy on this day, but the information from the EMR is very critical because we're watching for people that open patient records when they're not supposed to. We're the number five hospital in the country. We're the number one hospital in the state of New York. We have a large (mumbles) of very important people that are our patients and people want to see those records. And so the privacy platform is designed to get audit trails for looking at all that stuff and saying, "Hey, Nurse Sally, we just saw that you looked at patient Billy's record. That's not good. Let's investigate." We have about thirty use cases for privacy. >> Interviewer: So it's not in context of what she's doing, that's where the data come in? >> That's where the data come in, I mean, it's advanced. Nurse Sally opens up the EMR and looks at patient Billy's record, maybe patient Billy wasn't on the chart, or patient Billy is a VIP, or patient Billy is, for whatever reason, not supposed to be on that docket for that nurse, on that schedule for that nurse, we're going to get an alarm. The privacy team's going to go, "Oh, well, were they supposed to look at that record?" I'm just giving you, kind of, like two or three uses cases, but there's about thirty of them. >> Yeah, sure, I mean, celebrities whether it's Donald Trump who probably went there at some point. Everyone wants to get his taxes and records to just general patient care. >> Just general patient care. Yeah, exactly, and the privacy of our patients is paramount. I mean, especially in this digital age where, like we talked about earlier, everyone's going after making a human do something silly, right? We want to ensure that our humans, our nurses, our best in class patient care professionals are not doing something with your record that they're not supposed to. >> Interviewer: Well John, I want to hear your thoughts on this story I did a couple weeks ago called the Industrial IOT Apocalypse: Now or Later? And the provocative story was simply trying to raise awareness that malware and spear phishing is just tactics for that. Endpoint is critical, obviously. >> Sure. >> You pointed that out, everyone kind of knows that . >> Sure. >> But until someone dies, until there's a catastrophe where you can take over physical equipment, whether it's a self-driving bus, >> Frushour: Yeah. >> Or go into a hospital and not just do ransom ware, >> Frushour: Absolutely. >> Actually using industrial equipment to kill people. >> Sure. >> Interviewer: To cause a lot of harm. >> Right. >> This is an industrial, kind of the hacking kind of mindset. There's a lot of conversations going on, not enough mainstream conversations, but some of the top people are talking about this. This is kind of a concern. What's your view on this? Is it something that needs to be talked about more of? Is it just BS? Should it be... Is there any signal there that's worth talking about around protecting the physical things that are attached to them? >> Oh, absolutely, I mean this is a huge, huge area of interest for us. Medical device security at New York Presbyterian, we have anywhere from about eighty to ninety thousand endpoints across the enterprise. Every ICU room in our organization has about seven to ten connected devices in the ICU room. From infusion pumps to intubation machines to heart rate monitors and SPO2 monitors, all this stuff. >> Interviewer: All IP and connected. >> All connected, right. The policy or the medium in which they're connected changes. Some are ZP and Bluetooth and hard line and WiFi, and we've got all these different protocols that they use to connect. We buy biomedical devices at volume, right? And biomedical devices have a long path towards FDA certification, so a lot of the time they're designed years before they're fielded. And when they're fielded, they come out and the device manufacturer says, "Alright, we've got this new widget. It's going to, you know, save lives, it's a great widget. It uses this protocol called TLS 1.0." And as a security professional I'm sitting there going, "Really?" Like, I'm not buying that but that's kind of the only game, that's the only widget that I can buy because that's the only widget that does that particular function and, you know, it was made. So, this is a huge problem for us is endpoint device security, ensuring there's no vulnerabilities, ensuring we're not increasing our risk profile by adding these devices to our network and endangering our patients. So it's a huge area. >> And also compatible to what you guys are thinking. Like I could imagine, like, why would you want a multi-threaded processor on a light bulb? >> Frushour: Yeah. >> I mean, scope it down, turn it on, turn it off. >> Frushour: Scope it down for its intended purpose, yeah, I mean, FDA certification is all about if the device performs its intended function. But, so we've, you know, we really leaned forward, our CSO has really leaned forward with initiatives like the S bomb. He's working closely with the FDA to develop kind of a set of baseline standards. Ports and protocols, software and services. It uses these libraries, It talks to these servers in this country. And then we have this portfolio that a security professional would say, "Okay, I accept that risk. That's okay, I'll put that on my network moving on." But this is absolutely a huge area of concern for us, and as we get more connected we are very, very leaning forward on telehealth and delivering a great patient experience from a mobile device, a phone, a tablet. That type of delivery mechanism spawns all kinds of privacy concerns, and inter-operability concerns with protocol. >> What's protected. >> Exactly. >> That's good, I love to follow up with you on that. Something we can double down on. But while we're here this morning I want to get back to data. >> Frushour: Sure. >> Thank you, by the way, for sharing that insight. Something I think's really important, industrial IOT protection. Diverse data is really feeds a lot of great machine learning. You're only as good as your next blind spot, right? And when you're doing pattern recognition by using data. >> Frushour: Absolutely. >> So data is data, right? You know, telecraft, other data. Mixing data could actually be a good thing. >> Frushour: Sure, sure. >> Most professionals would agree to that. How do you look at diverse data? Because in healthcare there's two schools of thought. There's the old, HIPAA. "We don't share anything." That client privacy, you mentioned that, to full sharing to get the maximum out of the AI or machine learning. >> Sure. >> How are you guys looking at that data, diverse data, the sharing? Cause in security sharing's good too, right? >> Sure, sure, sure. >> What's your thoughts on sharing data? >> I mean sharing data across our institutions, which we have great relationships with, in New York is very fluid at New York Presbyterian. We're a large healthcare conglomerate with a lot of disparate hospitals that came as a result of partnership and acquisition. They don't all use the same electronic health record system. I think right now we have seven in play and we're converging down to one. But that's a lot of data sharing that we have to focus on between seven different HR's. A patient could move from one institution to the next for a specialty procedure, and you got to make sure that their data goes with them. >> Yeah. >> So I think we're pretty, we're pretty decent at sharing the data when it needs to be shared. It's the other part of your question about artificial intelligence, really I go back to like dedication analytics. A large part of the medication analytics platform that we designed does a lot of anomaly detections, anomaly detection on diversion. So if we see that, let's say you're, you know, a physician and you do knee surgeries. I'm just making this up. I am not a clinician, so we're going to hear a lot of stupidity here, but bare with me. So you do knee surgeries, and you do knee surgeries once a day, every day, Monday through Friday, right? And after that knee surgery, which you do every day in cyclical form, you prescribe two thousand milligrams of Vicodin. That's your standard. And doctors, you know, they're humans. Humans are built on patterns. That's your pattern. Two thousand milligrams. That's worked for you; that's what you prescribe. But all of the sudden on Saturday, a day that you've never done a knee surgery in your life for the last twenty years, you all of a sudden perform a very invasive knee surgery procedure that apparently had a lot of complications because the duration of the procedure was way outside the bounds of all the other procedures. And if you're kind of a math geek right now you're probably thinking, "I see where he's going with this." >> Interviewer: Yeah. >> Because you just become an anomaly. And then maybe you prescribe ten thousand milligrams of Vicodin on that day. A procedure outside of your schedule with a prescription history that we've never seen before, that's the beauty of funneling this data into Splunk's ML Toolkit. And then visualizing that. I love the 3D visualization, right? Because anybody can see like, "Okay, all this stuff, the school of phish here is safe, but these I've got to focus on." >> Interviewer: Yeah. >> Right? And so we put that into the ML Toolkit and then we can see, "Okay, Dr. X.." We have ten thousand, a little over ten thousand physicians across New York Presbyterian. Doctor X right over here, that does not look like a normal prescriptive scenario as the rest of their baseline. And we can tweak this and we can change precision and we can change accuracy. We can move all this stuff around and say, "Well, let's just look on medical record number, Let's just focus on procedure type, Let's focus on campus location. What did they prescribe from a different campus?" That's anomalous. So that is huge for us, using the ML Toolkit to look at those anomalies and then drive the privacy team, the risk teams, the pharmacy analytics teams to say, "Oh, I need to go investigate." >> So, that's a lot of heavy lifting for ya? Let you guys look at data that you need to look at. >> Absolutely. >> Give ya a (mumbles). Final question, Splunk, in general, you're happy with these guys? Obviously, they do a big part of your data. What should people know about Splunk 2019, this year? And are you happy with them? >> Oh, I mean Splunk has been a great partner to New York Presbyterian. We've done so much incredible development work with them, and really, what I like to talk about is Splunk for healthcare. You know, we've created, we saw some really important problems in our space, in this article. But, we're looking, we're leaning really far forward into things like risk based analysis, peri-op services. We've got a microbial stewardship program, that we're looking at developing into Splunk, so we can watch that. That's a huge, I wouldn't say as big of a crisis as the opioid epidemic, but an equally important crisis to medical professionals across this country. And, these are all solvable problems, this is just data. Right? These are just events that happen in different systems. If we can get that into Splunk, we can cease the archaic practice of looking at spreadsheets, and look up tables and people spending days to find one thing to investigate. Splunk's been a great partner to us. The tool it has been fantastic in helping us in our journey to provide best in-class patient care. >> Well, congratulations, John Frushour, Deputy Chief Information Security Officer, New York Presbyterian. Thanks for that insight. >> You're welcome. >> Great (mumbles) healthcare and your challenge and your opportunity. >> Congratulations for the award winner Data to Everything award winner, got to get that slogan. Get used to that, it's two everything. Getting things done, he's a doer. I'm John Furrier, here on theCube doing the Cube action all day for three days. We're on day two, we'll be back with more coverage, after this short break. (upbeat music)

(upbeat music) >> Announcer: From New York, it's The Cube. Covering ESCAPE/19. (upbeat music) >> Welcome back to The Cube coverage New York City for the inaugural multi-cloud conference. The first one ever in the industry. It's called Escape 2019. We're in New York so escaping from New York, escaping from cloud, that's the conversation. All the thought leaders are here and executives. People thinking about the next generation architecture and talk tracks are all here. Fritz Wetschnig who's the Chief Information Security Officer for Flextronics. >> Flex, yes. >> Flex, thank you for coming on. Love to have CISOs on because security seems to be always the top conversation. You got a very busy job. >> I do yes. (laughing) >> You're under a lot of pressure all the time >> It's fun, it's still fun for me. So, yeah, a CISO, it's always like security's top in mind, right, of everyone now these days. But it's still one of the most interesting jobs. The most interesting for my job is, I learn so much about our business and to have insight into so many things that's actually really great. >> You know, one of the things I was just talking about on a Cube conversation was, you know, how data is a really important part of it and how data backup and recovery was built on old thinking around, you know, data centers failing, floods, hurricanes, electricity gets outages, but the biggest disruption in business today is security, security threats and so that's cybersecurity pressure is causing CISOs to be mindful of the best architecture the best platform. Do we have the right tools? So I want to get your thoughts. How are you thinking about that as an organization, because are you building in-house developers? Are you, how are you organizing, how are you gearing up to fight the battles that need to be fought? >> So, I am with the company, So Flex is a big manufacturing company, right. 26 billion, so we have a lot of P2P business not consumer business, which is I believe a different perspective of security versus actually like a consumer company facing, so and I'm in a security team for 15 years, so we built it up like security operations and all those kind of things we do, right. >> You're old school. >> I am old school learned everything and that, right? >> But you're lot are IOT, I mean, you're Industrial IOT. >> Oh yeah, Industrial IOT it's one of the topics but coming back to you, you're right, data is actually the center even for our business, data is getting more and more center, right. You collect data from the machine, you collect data actually for the business actually to do make more decisions, right. And it could be predictive maintenance, could be inventory management. There could be a lot of things, right. You have to think about it. So, and the funny thing is, I'm real, I'm the CISO now for 5 years, 15 years with the security team, 20 years with the company, So I rebuilt the team always like every three, four years like as a kind of rebirth of the team. We renew, we add new skills, right. And cloud is one of the things, which I think it's a fundamental change and the change is actually, it's actually on the development side. What it means with that is the security team has to move to serve the developers. And the problem with the old school was always like it's afterthought. So why is security such an issue? Because we had to do patching after we found vulnerabilities, right. And then old network is not secure you need to wrap something around it like we did firewalls. So it was always an afterthought. Now with the cloud, it's changing because you have a lot of different things to do but basically we need to enable developers to be very quick and deploy their software very quickly, so I think it's a fundamental change in the way you have to think about security. >> And yeah, that brings up the good question I would love to ask you 'cause you've given, again you're not a consumer, like Capital One with in-house, they had their own channel, they weren't hacked. Amazon, actually the firewall was misconfigured, on an SV Bucket but that's a consumer company. You have data though, you're an industrial company, got a lot of industrial IOT. Ransomware folks are targeting data. >> Yes. >> And everyone's a target. Your service area is large. But you probably lock that down in the past. So how are you thinking about all this new stuff? >> So yeah, I mean, IOT it's, I mean, IOT's a problem, as you said, the industrial right. And it's not solved yet completely, right. Because they still have to rethink a lot of the vendors providing this machinery, which you purchase for twenty five, thirty years, right. They still are old school, right, sometimes, like, the one on Windows you can't upgrade or whatever. So it's basic things they're lacking actually in terms of security. There's still, has to be a shift in this, not just in industry but in a general thinking, how you do that. Yes, I have a big environment, so we locked it down, we use a lot of innovative technologies, actually preventive measurements plus also detective measurements. And you need to create kind of mightily a concept where you actually start, okay, what is if this fails? How we test it? Okay, this fails, do we have other measurements where we can try to prevent, stop those kind of things, right. But ransom is a big one. There's other things, as you know, like hacking, I mean, like Capitol One. >> Malware's a big problem. >> The Capital One was an interesting one in my belief and that's for the cloud is configuration issues, right, which I think it comes with cloud security. It's about policy and configuration management, right. How you manage that and how you think about it, but it's not, it's was not that. >> Automation could have solve that, I mean, that's an open S3 bucket, that's trivial. It wasn't a big, technical. >> Yes and no, if you look at that it was a little bit more in detail, >> Okay. >> So it was actually, their back firewall was misconfigured, which is about security running on a back check, but the misconfiguration was actually is, as (mumbles) force request issue, which means, like, you tricked this firewall into giving you information you shouldn't give information, right. >> John: Okay, so it was a little bit more. So, it was a little bit more granular as people think it was, right. Just as 3-pocket configuration. So it was a little bit more granular, but I think that's the really difficultly comes about whichever security. It's a complex program, right. It's mainly things you have. >> But it was a configuration error? >> It was a configuration. >> It wasn't as dumb as an S3 bucket. >> No, it wasn't dumb. >> But it was a bit more sophisticated, but not that sophisticated, was it? On a scale of 1 to 10. >> It was not sophisticated, but something, it's not easy to solve. So you have to think about it, but you're right, it's still something. >> John: It's an exploit from a corner case. >> Yeah, it's still something you could have. I mean, I'm careful to say you could have avoided it, yes you could, because that's for sure, but I know it's a complex environment, right. >> It's a human, there's humans involved. >> And I don't know the details exactly, we only know that what was published, right, so it's very hard to check. >> Well, it brings up cloud security, so let me ask you, on multi-cloud, this is a multi-cloud conference. What's your definition of multi-cloud? How do you look at the multiple-clouds? >> For me, multiple-cloud is, actually it doesn't matter. We had a good keynote words, it's a bunch of servers, right. That's how I see multi-cloud. It's a bunch of servers. Could be my data centers in a public cloud data centers with different vendors, that's what a cloud is. Where I move my services should be actually independent from the public hyper on premise, whatever it is, right. That's basically how I see it. >> So it doesn't matter, it's infrastructure. >> Yeah. >> On demand, leverage it. >> Leverage it, it could be say, hey today, I spin of this test server, but you know what, today it seems to be a bit cheaper running on (mumbles) verses GBC, let's do it here. Next day, next week we might do it somewhere else, whatever you trigger, whatever what is your requirements. >> So if going to look at that resource at like that, how do you think about the cloud security then, because the configurations, compliance, how do you, how do you stay on top of that? >> So, that's an interesting thing because we have begun to prioritize but we, as you said, no consumer business, so our problem is to find the right skill set, to attract the right people to our company to do that right because this is our, we have some cloud, but it's not yet, there's a journey we are trying to do, as most of the enterprise, so we're looking into startups, manage services, We say, okay what are gaps that we have to maybe have to outsource some of the things and gaps where we need to get internal source of supply. >> What's you're advice to other CISOs out there that are in the B2B space of don't have to deal with the consumer but have to get serious, that is now becoming more industrialized on the IOT side because you guys have been, you know, been there, done that, you have a big footprint on the IOT, 'cause you have a history. But as people get more facilities and they have more virtual offices, more people working, the edge is extending. What's your advice to those CISOs who have to deal with this industrial end IOT edge? >> I think you have to, visibility is the key ingredient is first, right. If you don't know what you have, it's very hard to understand what's a risk portfolio, right. So, you need to find the right toolset, and don't believe you know what you have. It's fantastic what you see when you use the right tool what distance everything is connected. I mean, basically even, like, I found like, this coffee mug, you know. I connect it to devices, right. It's like, not like everyone, not just that they don't understand my coffee mug is connected to (laughing). >> That light bulb's got multithreaded processor. What is that doing? >> So, so there's concerns, I may, but visibility is a key ingredient you have to understand. And then you have to look into how you mitigate a risk. What is a risk about it, right. I mean, if the government goes down, I don't really care, but if my testos goes down and does shut down the production, I really care about that. So you need to understand that the risk and say, how can I mitigate the risk? >> So while I got you here, what's you final question? What's your message to suppliers out there that all want to sell you something? Want to sell you another tool, you know. Want another tool? You know, I got a platform. I got a tool. Buy from me. >> You mean, to sell 750 watches (drowned out by laughter) If you go to ISA conferences, unbelievable, right. >> I want to sell you something. You're the top dog, I promise. >> Don't send me an email. >> Don't send them an email. Are you shrinking suppliers down? Are you looking at some kind of standard API way to deal with them? >> Yes. >> Because, you know, you're probably thinking about platforming, and date of visibility's critical. >> Yes. >> What's you philosophy on how to support video suppliers? >> So usually, honestly, the most time I really go it so for in the weight of technology we built in our company is called the Strategic Partnership Program where we can get for startups, and most of the time we engage, we startups overseas, or as through other channels, right. Where you get introduced, and you review, with the proof of work concept or value, the technology, and we try to keep it like a mini product, very short time, and say, okay, let's show what you can, where your gaps are, and can we get with you guys and can we get you. But don't send me an email, don't call me because I usually not react. I have a job to do. (laughing) >> Yeah, exactly. >> So that's most of the time, whatever we sees, what comes or if, a guy said hey, I found another CISOs tell me there's great technology, you should leap into that. >> And what shows do you go to? What events do you hang out in? What are good events for you in the space, RSA, Red Hat, Black Defcon? Are there certain events you go to that you think are valuable? >> I mean, as a CISO, I go to the RSA Conference, which I should because it's actually very close to me as well, and being part, being out of San Jose, I recommend the BSides, actually. I like the BSides. >> John: The BSides are great. >> The BSides are great. I think they are real, really. And then I try to smaller circles, right. We have our personal round tables. >> BSides for folks watching is an alternative group of community, industry participants, they have kind of a B-side, an A-side, like an album. But it's such a community event. They do hacker funds and a variety of other cool things where people get together, very unstructured kind of, cool conference, in addition to bigger conferences. >> I can recommend this. >> Yeah, awesome. Fritz, thanks for coming on and sharing your insights. >> Thanks. >> Been a pleasure. The Cube coverage in New York City, we're not escaping from New York but this is the Escape Conference, the first multi-cloud conference in the industry, we'll see how it goes. If they're successful, they might be back next year. If not, they won't be. But I think multi-cloud's going to stay. What do you think? >> I am think so too, yes. >> Okay, Fritz, thanks for coming on. I'm John Furrier, thanks for watching. (upbeat music)