>> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE in ETR. This is Breaking Analysis with Dave Vellante. >> Every CEO is figuring out the right balance for new hybrid business models. Now, regardless of the chosen approach, which is going to vary, technology executives, they understand they have to accelerate their digital and build resilience as well as optionality into their platforms. Now, this is driving a dramatic shift in IT investments. And at the macro level, we expect total spending to increase at as much as 8% or even more in 2021, compared to last year's contraction. Investments in cybersecurity, cloud collaboration that are enabling hybrid work as well as data, including analytics, AI, and automation are at the top of the spending priorities for CXOs. Hello everyone. And welcome to this week's Wiki Bond Cube insights, powered by ETR. In this Breaking Analysis, we're pleased to welcome back Erik Bradley, who is the chief engagement strategist at our partner, ETR. Now in this segment, we're going to share some of the latest findings from ETR's surveys and provide our commentary on what it means for the markets, for sellers, and for buyers. Erik, great to see you, my friend. Welcome back to Breaking Analysis. >> Thank you for having me, always enjoy it. We've got some fresh data to talk about on this beautiful summer Friday, so I'm ready to go. >> All right. I'm excited too. Okay, last year we saw a contraction in IT spending by at least 5%. And now we're seeing a snapback to, as I said, at least 8% growth relative to last year. You got to go back to 2007 just before the financial crisis to see this type of top line growth. The shift to hybrid work, it's exposed us to new insidious security threats. And we're going to discuss that in a lot more detail. Cloud migration of course picked up dramatically last year, and based on the recent earnings results of the big cloud players, for now we got two quarters of data, that trend continues as organizations are accelerating their digital platform build-outs, and this is bringing a lot of complexity and a greater need for so-called observability solutions, which Erik is going to talk about extensively later on in this segment. Data, we think is entering a new era of de-centralization. We see organizations not only focused on analytics and insights, but actually creating data products. Leading technology organizations like JP Morgan, they're heavily leaning into this trend toward packaging and monetizing data products. And finally, as part of the digital transformation trend, we see no slow down in spending momentum for AI and automation, generally in RPA specifically. Erik, anything you want to add to that top level narrative? >> Yeah, there's a lot to take on the macro takeaways. The first thing I want to state is that that 8, 8.5% number that started off at just 3 to 4% beginning of the year. So as the year has continued, we are just seeing this trend in budgets continue to accelerate, and we don't have any reason to believe that's going to stop. So I think we're going to just keep moving on heading into 2021. And we're going to see a banner year of spend this year and probably next as well. >> All right, now we're going to bring up a chart that shows kind of that progression here of spending momentum. So Erik, I'm going to let you comment on this chart that tracks those projections over time. >> Erik: Yeah. Great. So thank you very much for pulling this up. As you can see in the beginning part of the year, when we asked people, "What do you plan to spend throughout 2021?" They were saying it would be about a 4% increase. Which we were happy with because as you said last year, it was all negative. That continues to accelerate and is only hyper accelerating now as we head into the back half of the year. In addition, after we do this data, I always host a panel of IT end users to kind of get their feedback on what we collected, to a man, every one of them expects continued increase throughout next year. There are some concerns and uncertainty about what we're seeing right now with COVID, but even with that, they're planning their budgets now for 2022 and they're planning for even further increases going forward. >> Dave: Great, thank you. So we circled that 8%. That's really kind of where we thought it was going to land. And so we're happy with that number, but let's take a look at where the action is by technology sector. This chart that we're showing you here, it tracks spending priorities back to last September. When I believe that was the point, Erik, that cyber became the top priority in the survey, ahead of cloud collaboration, analytics, and data, and the other sectors that you see there. Now, Erik, we should explain. These areas, they're the top seven, and they outrank all the other sectors. ETR tracks many, many other sectors, but please weigh in here and share your thoughts on this data. >> Erik: Yeah. Security, security, security. It hasn't changed. It had really hasn't. The hybrid work. The fact that you're behind the firewall one day and then you're outside working from home the next, switching in and out of networks. This is just a field day for bad actors. And we have no choice right now, but to continue to spend, because as you're going to talk about in a minute, hybrid's here to stay. So we have to figure out a way to secure behind the firewall on-prem. We also have to secure our employees and our assets that are not in the office. So it is a main priority. One of the things that point out on this chart, I had a couple of ITN users talk to me about customer experience and automation really need to move from the right part of that chart to the left. So they're seeing more in what you were talking about in RPA and automation, starting to creep up heading into next year. As cloud migration matures, as you know, cybersecurity spending has been ramping up. People are going to see a little bit more on the analytics and a little bit more on the automation side going forward. >> Dave: Great. Now, this next data view- well, first of all, one of the great things about the ETR dataset is that you can ask key questions and get a time series. And I will tell you again, I go back to last March, ETR hit it. They were the first on the work from home trend. And so if you were on that trend, you were able to anticipate it. And a lot of investors I think took advantage of that. Now, but we've shown this before, but there's new data points that we want to introduce. So the data tracks how CIOs and IT buyers have responded to the pandemic since last March. Still 70% of the organizations have employees working remotely, but 39% now have employees fully returning to the office and Erik, the rest of the metrics all point toward positives for IT spending, although accelerating IT deployments there at the right peaked last year, as people realized they had to invest in the future. Your thoughts? >> Erik: Yeah, this is the slide for optimism, without a doubt. Of the entire macro survey we did, this is the most optimistic slide. It's great for overall business. It's great for business travel. This is well beyond just IT. Hiring is up. I've had some people tell me that they possibly can't hire enough people right now. They had to furlough employees, they had to stop projects, and they want to re accelerate those now. But talent is very hard to find. Another point to you about your automation and RPA, another underlying trend for there. The one thing I did want to talk about here is the hybrid workplace, but I believe there's another slide on it. So just to recap on this extremely optimistic, we're seeing a lot of hiring. We're seeing increased spending, and I do believe that that's going to continue. >> Yeah I'm glad you brought that up because a session that you and I did a while ago, we pointed out, it was earlier this year, that the skill shortage is one potential risk to our positive scenario. We'll keep an eye on that, but so I want to show another set of data that we've showed previously, but ETR again, has added some new questions in here. So note here that 60% of employees still work remotely with 33% in a hybrid model currently, and the CIO's expect that to land on about 42% hybrid workforce with around 30% working remotely, which is around, it's been consistent by the way on your surveys, but that's about double the historic norm, Eric. >> Erik: Yeah, and even further to your point Dave, recently I did a panel asking people to give me some feedback on this. And three of those four experts basically said to me, if we had greed run this survey right now, that even more people would be saying remote. That they believe that that number, that's saying they're expecting that number of people to be back in office, is actually too optimistic. They're actually saying that maybe if we had- cause as a survey launched about six, seven weeks ago before this little blip on the radar, before the little COVID hiccup we're seeing now, and they're telling me that they believe if we reran this now that it would be even more remote work, even more hybrid and less returned to the office. So that's just an update I wanted to offer on this slide. >> Dave: Yeah. Thank you for that. I mean, we're still in this kind of day to day, week to week, month to month mode, but I want to do a little double click on this. We're not going to share this data, but there was so much ETR data. We got to be selective. But if you double click on the hybrid models, you'll see that 50% of organizations plan to have time roughly equally split between onsite and remote with again around 30 or 31% mostly remote, with onsite space available if they need it. And Erik, very few don't plan to have some type of hybrid model, at least. >> Yeah, I think it was less than 10% that said it was going to be exclusively onsite. And again, that was a more optimistic scenario six, seven weeks ago than we're seeing right now throughout the country. So I agree with you, hybrid is here to stay. There really is no doubt about it. from everyone I speak to when, you know, I basically make a living talking to IT end users. Hybrid is here to stay. They're planning for it. And that's really the drive behind the spending because you have to support both. You have to give people the option. You have to, from an IT perspective, you also have to support both, right? So if somebody is in office, I need the support staff to be in office. Plus I need them to be able to remote in and fix something from home. So they're spending on both fronts right now. >> Okay. Let's get into some of the vendor performance data. And I want to start with the cloud hyperscalers. It's something that we followed pretty closely. I got some Wiki bond data, that we just had earnings released. So here's data that shows the Q2 revenue shares on the left-hand side in the pie and the growth rates for the big four cloud players on the right hand side. It goes back to Q1 2019. Now the first thing I want to say is these players generated just under $39 billion in the quarter with AWS capturing 50% of that number. I said 39, it was 29 billion, sorry, with AWS capturing 50% of that in the quarter. As you're still tracking around a third in Alibaba and GCP in the, you know, eight or 9% range. But what's most interesting to me, Erik, is that AWS, which generated almost 15 billion in the quarter, was the only player to grow its revenue, both sequentially and year over year. And Erik, I think the street is missing the real story here on Amazon. Amazon announced earnings on Thursday night. The company had a 2% miss on the top line revenues and a meaningful 22% beat on earnings per share. So the retail side of the business missed its revenue targets, so that's why everybody's freaked out. But AWS, the cloud side, saw a 4% revenue beat. So the stock was off more than 70% after hours and into Friday. Now to me, a mix shift toward AWS, that's great news for investors. Now, tepid guidance is a negative, but the shift to a more profitable cloud business is a huge positive. >> Yeah, there's a lot that goes into stock price, right? I remember I was a director of research back in the day. One of my analysts said to me, "Am I crazy for putting a $1,000 target on Amazon?" And I laughed and I said, "No, you're crazy if you don't make it $2,000." (both chuckling) So, you know, at that time it was basically the mix shift towards AWS. You're a thousand percent right. I think the tough year over year comps had something to do with that reaction. That, you know, it's just getting really hard. What's that? The law of large numbers, right? It's really hard to grow at that percentage rate when you're getting this big. But from our data perspective, we're seeing no slowdown in AWS, in cloud, none whatsoever. The only slowdown we're seeing in cloud is GCP. But to, you know, to focus on AWS, extremely strong across the board and not only just in cloud, but in all their data products as well, data and analytics. >> Yeah and I think that the AWS, don't forget folks, that funds Amazon's TAM expansion into so many different places. Okay. As we said at the top, the world of digital and hybrid work, and multi-cloud, it's more complicated than it used to be. And that means if you need to resolve issues, which everybody does, like poor application performance, et cetera, what's happening at the user level, you have to have a better way to sort of see what's going on. And that's what the emergence of the observability space is all about. So Erik, let me set this up and you have a lot of comments here because you've recently had some, and you always have had a lot of round table discussions with CXOs on this topic. So this chart plots net score or spending momentum on the vertical axis, and market share or pervasiveness in the dataset on the horizontal axis. And we inserted a table that shows the data points in detail. Now that red dotted line is just sort of Dave Vellante's subjective mark in the sand for elevated spending levels. And there are three other points here. One is Splunk as well off is two-year peak, as highlighted in the red, but Signal FX, which Splunk acquired, has made a big move northward this last quarter. As has Datadog. So Erik, what can you share with us on this hot, but increasingly crowded space? >> Yeah. I could talk about the space for a long time. As you know, I've gotten some flack over the last year and a half about, you know, kind of pointing out this trend, this negative trend in Splunk. So I do want to be the first one to say that this data set is rebounding. Splunk has been horrific in our data for going back almost two years now, straight downward trend. This is the first time we're seeing any increase, any positivity there. So I do want to be fair and state that because I've been accused of being a little too negative on Splunk in the past. But I would basically say for observability right now, it's a rising tide lifts all boats, if I can use a New England phrase. The data across the board in analytics for these observability players is up, is accelerating. None more so than Datadog. And it's exactly your point, David. The complexity, the increased cloud migration is a perfect setup for Datadog, which is a cloud native. It focuses on microservices. It focuses on cloud observability. Old Splunk was just application monitoring. Don't get me wrong, they're changing, but they were on-prem application monitoring, first and foremost. Datadog came out as cloud native. They, you know, do microservices. This is just a perfect setup for them. And not only is Datadog leading the observability, it's leading the entire analytics sector, all of it. Not just the observability niche. So without a doubt, that is the strongest that we're seeing. It's leading Dynatrace new Relic. The only one that really isn't rebounding is Cisco App Dynamics. That's getting the dreaded legacy word really attached to it. But this space is really on fire, elastic as well, really doing well in this space. New Relic has shown a little bit of improvement as well. And what I heard when I asked my panelists about this, is that because of the maturity of cloud migration, that this observability has to grow. Spending on this has to happen. So they all say the chart looks right. And it's really just about the digital transformation maturity. So that's largely what they think is happening here. And they don't really see it getting, you know, changing anytime soon. >> Yeah, and I would add, and you see that it's getting crowded. You saw a service now acquired LightStep, and they want to get into the game. You mentioned, you know, last deck of the elk stack is, you know, the open source alternative, but then we see a company who's raised a fair amount of money, startup, chaos search, coming in, going after kind of the complexity of the elk stack. You've got honeycomb, which has got a really innovative approach, Jeremy Burton's company observes. So you have venture capital coming in. So we'll see if those guys could be disruptive enough or are they, you know, candidates to get acquired? We'll see how that all- you know that well. The M and A space. You think this space is ripe for M and A? >> I think it's ripe for consolidation, M and A. Something has to shake out. There's no doubt. I do believe that all of these can be standalone. So we shall see what's happened to, you mentioned the Splunk acquisition of Signal FX, just a house cleaning point. That was really nice acceleration by Signal FX, but it was only 20 citations. We'd looked into this a little bit deeper. Our data scientists did. It appears as if the majority of people are just signaling spunk and not FX separately. So moving forward for our data set, we're going to combine those two, so we don't have those anomalies going forward. But that type of acquisition does show what we should expect to see more of in this group going forward. >> Well that's I want to mention. That's one of the challenges that any data company has, and you guys do a great job of it. You're constantly having to reevaluate. There's so much M and A going on in the industry. You've got to pick the right spots in terms of when to consolidate. There's some big, you know, Dell and EMC, for example. You know, you've beautifully worked through that transition. You're seeing, you know, open shift and red hat with IBM. You just got to be flexible. And that's where it's valuable to be able to have a pipeline to guys like Erik, to sort of squint through that. So thank you for that clarification. >> Thank you too, because having a resource like you with industry knowledge really helps us navigate some of those as well for everyone out there. So that's a lot to do with you do Dave, >> Thank you. It's going to be interesting to watch Splunk. Doug Merritt's made some, you know, management changes, not the least of which is bringing in Teresa Carlson to run go to market. So if you know, I'd be interested if they are hitting, bouncing off the bottom and rising up again. They have a great customer base. Okay. Let's look at some of the same dimensions. Go ahead. You got a comment? >> A few of ETR's clients looked at our data and then put a billion dollar investment into it too. So obviously I agree. (Dave laughing) Splunk is looking like it's set for a rebound, and it's definitely something to watch, I agree. >> Not to rat hole in this, but I got to say. When I look back, cause theCUBE gives us kind of early visibility. So companies with momentum and you talk to the customers that all these shows that we go to. I will tell you that three companies stood out last decade. It was Splunk. It was Service Now and Tableau. And you could tell just from just discussions with their customers, the enthusiasm in that customer base. And so that's a real asset, and that helps them build them a moat. So we'll see. All right, let's take a look at the same dimensions now for cyber. This is cybersecurity net score in the vertical, and market share in the horizontal. And I filtered by in greater than a hundred shared in because just gets so crowded. Erik, the only things I would point out here is CrowdStrike and Zscaler continue to shine, CyberArk also showing momentum over that 40% line. Very impressively, Palo Alto networks, which has a big presence in the market. They've bounced back. We predicted that a while back. Your round table suggested people like working with Palo Alto. They're a gold standard. You know, we had reported earlier on that divergence with four to net in terms of valuation and some of the challenges they had in cloud, clearly, you know, back with the momentum. And of course, Microsoft in the upper, right. It's just, they're literally off the charts and obviously a major player here, but your thoughts on cyber? >> Erik: Yeah. Going back to the backdrop. Security, security, security. It has been the number one priority going back to last September. No one sees it changing. It has to happen. The threat vectors are actually expanding and we have no choice but to spend here. So it is not surprising to see. You did name our three favorite names. So as you know, we look at the dataset, we see which ones have the most positive inflections, and we put outlooks on those. And you did mention Zscaler, Okta and CrowdStrike, by far the three standouts that we're seeing. I just recently did a huge panel on Okta talking about their acquisition of Auth Zero. They're pushed into Sale Point space, trying to move just from single sign on and MFA to going to really privileged account management. There is some hurdles there. Really Okta's ability to do this on-prem is something that a little bit of the IT end users are concerned about. But what we're seeing right now, both Okta and Auth Zero are two of the main adopted names in security. They look incredibly well set up. Zscaler as well. With the ZTNA push more towards zero trust, Zscaler came out so hot in their IPO. And everyone was wondering if it was going to trail off just like Snowflake. It's not trailing off. This thing just keeps going up into the right, up into the right. The data supports a lot of tremendous growth for the three names that you just mentioned. >> Yeah. Yeah. I'm glad you brought up Auth Zero. We had reported on that earlier. I just feel like that was a great acquisition. You had Okta doing the belly to belly enterprise, you know, selling. And the one thing that they really lacked was that developer momentum. And that's what Auth Zero brings. Just a smart move by Todd McKinnon and company. And I mean, so this, you know, I want to, I want to pull up another chart show a quick snapshot of some of the players in the survey who show momentum and have you comment on this. We haven't mentioned Snowflake so far, but they remain again with like this gold standard of net score, they've consistently had those high marks with regard to spending velocity. But here's some other data. Erik, how should we interpret this? >> Erik: Yeah, just to harp on Snowflake for a second. Right, I mean the rich get richer. They came out- IPO was so hyped, so it was hard for us as a research company to say, "Oh, you know, well, you know, we agree." But we did. The data is incredible. You can't beat the management team. You can't beat what they're doing. They've got so much cash. I can't wait to see what they do with it. And meanwhile, you would expect something that debuted with that high of a net score, that high of spending velocity to trail off. It would be natural. It's not Dave, it's still accelerating. It's gone even higher. It's at all time highs. And we just don't see it stopping anytime soon. It's a really interesting space right now. Maybe another name to look at on here that I think is pretty interesting, kind of a play on return to business is Kupa. It's a great project expense management tool that got hit really hard. Listen, traveling stopped, business expense stopped, and I did a panel on it. And a lot of our guys basically said, "Yeah, it was the first thing I cut." But we're seeing a huge rebound in spending there in that space. So that's a name that I think might be worth being called out on a positive side. Negative, If you look down to the bottom right of that chart, unfortunately we're seeing some issues in RingCentral and Zoom. Anything that's sort of playing in this next, you know, video conferencing, IP telephony space, they seem to be having really decelerating spending. Also now with Zoom's acquisition of five nine. I'm not really sure how RingCentral's going to compete on that. But yeah, that's one where we debuted for the first time with a negative outlook on that name. And looking and asking to some of the people in our community, a lot of them say externally, you still need IP telepany, but internally you don't. Because the You Cast communication systems are getting so sophisticated, that if I have Teams, if I have Slack, I don't need phones anymore. (chuckling) That you and I can just do a Slack call. We can do a Teams call. And many of them are saying I'm truly ripping out my IP Telepany internally as soon as possible because we just don't need it. So this whole collaboration, productivity space is here to stay. And it's got wide ranging implications to some of these more legacy type of tools. >> You know, one of the other things I'd call out on this chart is Accenture. You and I had a session earlier this year, and we had predicted that that skill shortage was going to lead to an uptick in traditional services. We've certainly seen that. I mean, IBM beat its quarter on the strength of services largely. And seeing Accenture on that is I think confirmation. >> Yeah that was our New Year prediction show, right Dave? When we made top 10 predictions? >> That's right. That was part of our predictions show. Exactly, good memory. >> The data is really showing that continue. People want the projects, they need to do the projects, but hiring is very difficult. So obviously the number one beneficiary there are going to be the Accentures of the world. >> All right. So let's do a quick wrap. I'm going to make a few comments and then have you bring us home, Erik. So we laid out our scenario for the tech spending rebound. We definitely believe last year tracked downward, along with GDP contraction. It was interesting. Gardner doesn't believe, at least factions of Gardner don't believe there's a correlation between GDP and tech spending. But, you know, I personally think there generally is some kind of relatively proportional pattern there. And I think we saw contraction last year. People are concerned about inflation. Of course, that adds some uncertainty. And as well, as you mentioned around the Delta variant. But I feel as though that the boards of directors and CEOs, they've mandated that tech execs have to build out digital platforms for the future. They're data centric. They're highly automated, to your earlier points. They're intelligent with AI infused, and that's going to take investment. I feel like the tech community has said, "Look, we know what to do here. We're dealing with hybrid work. We can't just stop doing what we're doing. Let's move forward." You know, and as you say, we're flying again and so forth. You know, getting hybrid right is a major priority that directly impacts strategies. Technology strategies, particularly around security, cloud, the productivity of remote workers with collaboration. And as we've said many times, we are entering a new era of data that's going to focus on decentralized data, building data products, and Erik let's keep an eye on this observability space. Lot of interest there, and buyers have a number of choices. You know, do they go with a specialist, as we saw recently, we've seen in the past, or did they go with the generalist like Service Now with the acquisition of LightStep? You know, it's going to be interesting. A lot of people are going to get into this space, start bundling into larger platforms. And so as you said, there's probably not enough room for all the players. We're going to see some consolidation there. But anyway, let me give you the final word here. >> Yeah, no, I completely agree with all of it. And I think your earlier points are spot on, that analytics and automation are certainly going to be moving more and more to that left of that chart we had of priorities. I think as we continue that survey heading into 2022, we'll have some fresh data for you again in a few months, that's going to start looking at 2022 priorities and overall spend. And the one other area that I keep hearing about over and over and over again is customer experience. There's a transition from good old CRM to CXM. Right now, everything is digital. It is not going away. So you need an omni-channel support to not only track your customer experience, but improve it. Make sure there's a two way communication. And it's a really interesting space. Salesforce is going to migrate into it. We've got Qualtrics out there. You've got Medallia. You've got FreshWorks, you've got Sprinkler. You got some names out there. And everyone I keep talking to on the IT end user side keeps bringing up customer experience. So let's keep an eye on that as well. >> That's a great point. And again, it brings me back to Service Now. We wrote a piece last week that's sort of, Service Now and Salesforce are on a collision course. We've said that for many, many years. And you've got this platform of platforms. They're just kind of sucking in different functions saying, "Hey, we're friends with everybody." But as you know Erik, software companies, they want to own it all. (both chuckling) All right. Hey Erik, thank you so much. I want to thank you for coming back on. It's always a pleasure to have you on Breaking Analysis. Great to see you. >> Love the partnership. Love the collaboration. Let's go enjoy this summer Friday. >> All right. Let's do. Okay, remember everybody, these episodes, they're all available as podcasts, wherever you listen. All you got to do is search Breaking Analysis Podcast, click subscribe to the series. Check out ETR's website at etr.plus. They've just launched a new website. They've got a whole new pricing model. It's great to see that innovation going on. Now remember we also publish a full report every week on WikiBond.com and SiliconAngle.com. You can always email me, appreciate the back channel comments, the metadata insights. David.Vellante@SiliconAngle.com. DM me on Twitter @DVellante or comment on the LinkedIn posts. This is Dave Vellante for Erik Bradley and theCUBE insights powered by ETR. Have a great week, a good rest of summer, be well. And we'll see you next time. (inspiring music)

>> Narrator: From theCUBE studios in Palo Alto in Boston, it's theCUBE! Covering empowering the autonomous enterprise. Brought to you by ORACLE Consulting. >> Back to theCUBE everybody, this is Dave Vellante. We've been covering the transformation of ORACLE Consulting, and really it's rebirth, and I'm here with Chris Fox, who's the Group Vice President for Enterprise Cloud Architects and Chief Technologist for the North America Tech Cloud at ORACLE. Chris, thanks so much for coming on theCUBE. >> Thanks Dave, glad to be here. >> So, I love this title. I mean, years ago, there was no such thing as a cloud architect. Certainly there were chief technologists, but so, you are really, those are your peeps, is that right? >> That's right, that's right. That's really my team and I, that's all we do. So, our focus is really helping our customers take this journey from when they were on-premise to really transforming with cloud, and when we think about cloud, really, for us, it's a combination. It's our hybrid cloud, which happens to be on-premise, and then, of course, the true public cloud, like most people are familiar with. So, very exciting journey and, frankly, I've seen just a lot of success for our customers. You know, Dave, what I think we're seeing at ORACLE though, because we're so connected with SaaS, and then we're also connected with the traditional applications that have run the business for years, the legacy applications that have been, you know, servicing us for 20 years, and then the cloud needed developers. So, what my team and I are constantly focused on now is things like digital transformation and really wiring up all three of these across. So, if we think of, like, a customer outcome like I want to have a package delivered to me from a retailer, that actual process flow could touch a brand new cloud-native site from eCommerce, it could touch, essentially, maybe a traditional application that used to be on-prem that's now on the cloud, and then it might even use a new SaaS application, maybe, for maybe a permit process or delivery vehicle and scheduling. So, what my team does, we actually connect all three. So, what I always mention to my team and all of our customers, we have to be able to service all three of those constituents and really think about process flows. So, I take the cloud-native developer, we help them become efficient. We take the person who's been running that traditional application and we help them become more efficient, and then we have the SaaS applications, which are now rolling out new features on a quarterly basis and it's a whole new delivery model, but the real key is connecting all three of these into a business process flow that makes the customer's life much more efficient. People always say, you know, Chris, we want to get out of the data center, we're going zero data center, and I always say, well, how are you going to handle that back office stuff? Right? The stuff that's really big, it's cranky, doesn't handle just, you know, instances dying or things going away too easily. It needs predictable performance, it needs scale, it absolutely needs security, and ultimately, you know, a lot of these applications truly have relied on an ORACLE database. The ORACLE database has its own specific characteristics that it needs to run really well. So, we actually looked at the cloud and we said, let's take the first generation clouds, which are doing great, but let's add the features that specifically, a lot of times, the ORACLE workload needed in order to run very well and in a cost effective manner. So, that's what we mean when we say last mover advantage. We said, let's take the best of the clouds that are out there today, let's look at the workloads that, frankly, ORACLE runs and has been running for years, what our customers needed, and then let's build those features right into this next version of the cloud which can service the enterprise. So, our goal, honestly, which is interesting, is even that first discussion we had about cloud-native and legacy applications and also the new SaaS applications, we built a cloud that handles all three use cases at scale, resiliently, in a very secure manner, and I don't know of any other cloud that's handling those three use cases all in, we'll call it the same tendency for us at ORACLE. >> My question is why was it important for ORACLE, and is it important for ORACLE and its customers, to participate in IaaS and PaaS and SaaS? Why not just the last two layers of that? What does that give you from a strategic advantage standpoint and what does that do for your customer? >> Yeah, great question. So, the number one reason why we needed to have all three was that we have so many customers who, today, are in a data center. They're running a lot of our workloads on-premise and they absolutely are trying to find a better way to deliver lower-cost services to their customers and so we couldn't just say, let's just, everyone needs to just become net new, everyone just needs to ditch the old and go just to brand-new alone. Too hard, too expensive, at times. So we said, you know, let's give us customers the ultimate amount of choice. So, let's even go back again to that developer conversation in SaaS. If you didn't have IaaS, we couldn't help customers achieve a zero data center strategy with their traditional application, we'll call it PeopleSoft or JD Edwards or E-Business Suite or even, there's some massive applications that are running on the ORACLE cloud right now that are custom applications built on the ORACLE database. What they want is they said, give me the lowest cost but yet predictable performance IaaS. I'll run my apps tier on this. Number two, give me a platform service for database, 'cause frankly, I don't really want to run your database, like, with all the menial effort. I want someone to automate patching, scale up and down, and all these types of features like the cloud should have given us. And then number three, I do want SaaS over time. So, we spend a lot of time with our customers really saying, how do I take this traditional application, run it on IaaS and PaaS, and then number two, let's modernize it at scale. Maybe I want to start peeling off functionality and running them as cloud-native services right alongside, right? That's something, again, that we're doing at scale and other people are having a hard time running these traditional workloads on-prem in the cloud. The second part is they say, you know, I've got this legacy traditional ERP. It's been servicing me well, or maybe a supply chain system. Ultimately I want to get out of this. How do I get to SaaS? And we say, okay, here's the way to do this. First, bring it to the cloud, run it on IaaS and PaaS, and then selectively, I call it cloud slicing, take a piece of functionality and put it into SaaS. We're helping customers move to the cloud at scale. We're helping 'em do it at their rate, with whatever level of change they want, and when they are ready for SaaS, we're ready for them. >> And how does autonomous fit into this whole architecture? Thank you, by the way, for that description. I mean, it's nuanced but it's important. I'm sure you're having this conversation with a lot of cloud architects and chief technologists. They want to know this stuff, and they want to know how it works. And then, obviously, we'll talk about what the business impact is, but talk about autonomous and where that fit. >> So, the autonomous database, what we've done is really taken a look at all the runtime operations of an ORACLE database, so tuning, patching, securing, all these different features, and what we've done is taken the best of the ORACLE database, the best of something called Exadata, right, which we run on the cloud, which really helps a lot of our customers, and then we've wrapped it with a set of automation and security tools to help it really manage itself, tune itself, patch itself, scale up and down independent between computant storage. So, why that's important though is that it really, our goal is to help people run the ORACLE database as they have for years but with far less effort, and then even not only far less effort, hopefully, you know, a machine plus man, kind of the equation we always talk about is man plus machine is greater than man alone. So, being assisted by artificial intelligence and machine learning to perform those database operations, we should provide a better service to our customers with far less cost. Our hope and goal is that people have been running ORACLE databases. How can we help them do it with far less effort, and maybe spend more time on what the data can do for the organization, right? Improve customer experience, etc. Versus maybe, like, how do I spin up (breaks up). >> So, let's talk about the business impact. So, you go into customers, you talk to the cloud architects, the chief technologists, you pass that test. Now you got to deliver the business impact. Where does ORACLE Consulting fit with regard to that? And maybe you could talk about where you guys want to take this thing. >> Yeah, absolutely. I mean, the cloud is great set of technologies, but where ORACLE Consulting is really helping us deliver is in the outcome. One of the things, I think, that's been fantastic working with the ORACLE Consulting team is that, you know, cloud is new. For a lot of customers who've been running these environments for a number of years, there's always some fear and a little bit of trepidation saying, how do I learn this new cloud? I mean, the workloads we're talking about, Dave, are like tier zero, tier one, tier two and, you know, all the way up to DEV and TEST and DR. ORACLE Consulting does really couple of things in particular. Number one, they start with the end in mind, and number two that they start to do, is they really help implement these systems and there's a lot of different assurances that we have that we're going to get it done on time and better be under budget, 'cause ultimately, again, that's something that's really paramount for us. And then the third part of it, a lot of times it's runbooks, right? We actually don't want to just live in our customers' environments. We want to help them understand how to run this new system, so in training and change management, a lot of times ORACLE Consulting is helping with runbooks. We usually will, after doing it the first time, we'll sit back and let the customer do it the next few times and essentially help them through the process, and our goal at that point is to leave. Only if the customer wants us to, but ultimately our goal is to implement it, get it to go live on time, and then help the customer learn this journey to the cloud. And without them, frankly, I think these systems are sometimes too complex and difficult to do on your own maybe the first time, especially 'cause like I say, they're closing the books. They might be running your entire supply chain. They run your entire HR system or whatever they might be. Too important to leave to chance. So, they really help us with helping the customer become live and become very confident and skilled 'cause they can do it themselves. >> Well Chris, we've covered the gamut. Loved the conversation. We'll have to leave it right there, but thanks so much for coming on theCUBE and sharing your insights. Great stuff. >> Absolutely, thanks Dave, and thanks for having me on. >> All right, you're welcome, and thank you for watching everybody. This is Dave Vellante for theCUBE. We are covering the ORACLE of North America Consulting transformation and its rebirth in this digital event. Keep it right there, we'll be right back.

from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hello everybody welcome to this cube conversation my name is Dave Volante and I'm here with Dave faithful who's the chief architect of WEEI Dave thanks for coming on the cube thanks for having me so first tell me about WEEI and then I want to understand your role there sure at WTI our chief architect and responsible for driving technology solutions that we work with our customer base on so WI is a value-added reseller supporting fortunate 1,000 enterprise customers it takes us all over the world and supporting their environments and we're typically designing and architecting IT service delivery models for those customers and and aligning those those architectures with their business needs so are you typically like described like the sweet spot of your customer base you mentioned you know the basically large companies and you're interacting you know who's your point of contact is it is it the architect to architect you know who you're talking to it is it's all levels of the IT organization typically from the CIO on down so understanding what the business goals of our customers are and then working with those IT directors IT managers and and IT architecture leads to develop solutions that fit those business models so you know these days you know software-defined data center computing is is as big creating service delivery models that a cloud like in nature whether on pram or in a hybrid environment or a public service or things that our customers are trying to do migrating from that traditional IT architecture to this new software dependent world so we're gonna talk about storage later on but but I've wondered thinking about the top level this the sea level executive in IT is he or he or she are they concerned about storage what's on their mind thought what's top of mind for those guys typically it's really just how do they i tea to deliver value back to the business right how do they make their companies more competitive in the marketplace how did they get the products out to market faster faster than before and faster than our competition so they're trying to leverage IT as a service as a utility and they're trying to create that that that utility model that service delivery model to support their business needs which you know the IT has to be more responsive than ever before they don't have months to get something out they have sometimes days or hours and so they've got to build those models while at the same time right they've got to support their existing traditional environment so they've got this juggling act at the C level that's typically what we see they're worried about how they get there is up to their IT organizations right then and that's where we're helping them to architect those fears yeah so the CIOs that we talk to I think they bought into the cloud narrative of hey you don't want to do this heavy lifting you want to shift those resources to support whatever digital transformation or you know application delivery but to get them from point A to point B and keep the lights on is is obviously challenging so you talked about some of the underlying rip currents and trends you mentioned sddc so why is that important first of all what is it and in your mind how do you guys look at that and why is it so important well so you know suffer to find data center computing is really you know suffer to find anything is really the decoupling of the control plane from the data plane right how can we manage all of this data where it comes from and where it goes from a centralized automated point and so what's important about that is it allows us to provision more quickly than ever before it allows us to make changes more quickly than we before and it allows our data to be more portable than ever before giving us the ability to move information and data on prem to a public service and back be able to replicate and backup data to really any place that we need it to be and then making it more available for our global organizations to be able to get access to it at any time in development environments they can follow the Sun methodology right of being able to have access to that data for development teams all over the world is critically important and you know public services as well as hybrid other cloud delivery models allow them to do that so used to be pretty straightforward we didn't maybe realize at the time but you'd build a basically a an infrastructure stack you'd support an application you'd harden that and it kind of became its own silo as cloud comes into play hybrid cloud now you talk about multi cloud the the the picture gets a lot more complex and you mentioned separating the control plane and the data plane as you go into this you know multi-cloud well first of all multi cloud I've said it's kind of a symptom of multi vendor we sort of just got here but now I think as is often the case in IT people are saying well we have to control this we have to have governance and compliance and security so we we better get IT to come fix this problem is that a viable sort of inherited from my standpoint is that how we got here or is it really been a strategy in your view well I think it's both and I think more mature organizations understand now maybe not at first understand now that there's different reasons to use different services right so it may be that a particular public service has has some you know application environment or some process that is appealing to them maybe it complies with some sort of governance or compliance requirement but there may also be times and there are with most of our customers where they need to keep that information that data on Prem for whatever reason either due to security policy or due to compliance reasons or something else and so organizations started to figure out they couldn't just put everything all in one place right even if it was a public service that they needed the ability to have some data in different places and they needed that to be affordable and so that was the challenge and and as organizations started to realize that that hybrid cloud strategy was a sound one they needed the technology to be able to support that and so that's when we when we start taking a look at software-defined solutions we're looking at the ability of those those the solutions to be able to communicate back and forth right how do we move data back and forth what products do we select that allow us to create API connectivity to all those different end points right whether it's a public cloud service or on-prem or both how are we able to fluidly move data back and forth okay so you had and you also had a lot of shadow IT which kind of I feel like IT is beginning to reign in at least from the standpoint of setting standards but okay so you just described this this this state of cloud I'll call it cloud because to to us it seems that you're bringing the cloud experience wherever your data lives could be on Prem could be in cloud vendor a B or C some kind of hybrid structure so how do you bring that cloud experience to wherever your data lives and what role does storage play yep all right so so first there's there's there's a few high-level elements to we'll call it this hybrid cloud model right one is a financial model in a public service say you know we talked about you know the ability to go swipe a credit card and now you've got this instant access to infrastructure you know that's a financial model that is easy to consume right but how do you do that on the pram so we work with different partners to put together those financial models that are similar to public services in an on-prem consumption model and so we can do things like capacity on demand pay for what you need only when you're needed all right expand and contract on primp just like you would in a public service so that financial model is one place to start the second place to start is with the infrastructure and you mentioned storage its orders great example of that so we want to have storage that has the ability to connect out to those public services or other platforms when we need them to when we need it to matter of fact that wer that's that's one of the things that we look at very carefully is what is that you know second third mile approach to implementing all of this how do we automate the movement of that data and the connectivity of all this infrastructure together well we've got to you've got to have some some automation that is customized to your environment because it's it's not a cookie cutter approach and so to be able to develop that automation is what we call that's the second mouth or mail service where we're connecting all of these things so we want to be able to select a storage platform for instance that has API connectivity that we can leverage to connect to you know Microsoft Azure or to AWS or to Google or someplace else and that we want to also be able to connect to our compute platforms that we're leveraging on Prem and so that and our network all right that is on Prem and that is extended out to those public services and does the intelligence enables automation does that live inside the the infrastructure is it something that you have to bring to it to the table is it a combination or is it is actually intrinsic now to the architectures that are out there it's both so there is more and more of that intelligence coming to the to the hardware being developed into the hardware and you know some of our partners that we work with have done a really good job of building that into their solutions you know HP as an example with some of their storage platforms uses their info site capability to to build intelligence in an AI and machine learning into optimizing their their storage platform and being able to give customers the ability to see problems before they even arise so that's one piece of it and the other piece of it is you know are those api's already written on the platform can we leverage those already do we have to develop that or so have they been developed to work with certain automation platforms that we can leverage so so yeah it's a lot of this built into the infrastructure today and and then how you customize that for your own use case it requires you know some of the experience and and and the capability to actually develop this automation it's interesting David if you go back five six even seven maybe even longer years ago people were really afraid of automation they wanted knobs to turn and so my question is do you see people much more receptive why what what's what's jii do people see much more receptive to automation but what's changed well I think it's it's actually what you just mentioned right people thought that there was this magic dial you know magic knob but they could turn when they wanted infrastructure I want more officially I'll turn it this way I want less infrastructures man it that way not really understanding the effort it took to make that happen in the background and I think that there's more awareness now of what that effort is we see organizations moving resources me you know their people and their skills from traditional IT roles into these automation roles giving them new skills to be able to support all of this ongoing automation requirement to be able to make the the you know the business more responsive so instead of IT organizations being reactive like they used to ie they would receive a request and then they would have to go in and you know architect around that request they're actually building the infrastructure and the automations upfront so when the request comes in it can actually turn that down up so they're building the dial knob by moving those resources into new skill sets well so that's interesting point about the skill sets I mean I've always often said if your main skill set is managing Lunz you really want to update your skill sets to you know find a new job basically so what are people doing are they moving into development are they moving into sort of becoming cloud architects what what would you advise somebody who's traditionally been a a storage admin what's their growth path so that's a that's a good question so yeah it we would advise them to stop managing lawns and to move into you know different automation skill sets different programming understand some of the programming languages out there now like Python and Perl and other things that are commonly used you know and and developing these scripts understand API structures and most of this is open right so if you understand it from a general sense you'll be able to apply it to just about any platform understand automations behind provisioning infrastructure and the tools that are out there that are available to do that and there's a lot of them and we we work with many of them with our customers today and if you can if you can develop those skill sets you'll be able to manage in this new in this new hybrid you know I'd seen hybrid cloud world and we talked about DevOps a lot of talking about infrastructure is Co but I still feel as though in many organizations that love your thoughts on this it's still early days in terms of you know there's probably more ops dev than there is DevOps but but are you are you what are you seeing in terms of the uptake of that DevOps philosophy programmable infrastructure and the skill sets to be able to support that within some of your larger customers I think there's a separation there right when most organizations think about DevOps Terr thinking about you know their products or their their you know their own internal application development and I think their that when we talk about infrastructure automation and provisioning it's generally in most enterprise environments completely separate teams right and and yes a lot of that is coming together but you've got one organization an IT that is creating a service for those DevOps teams right in the past you know when we talk about shadow IT it was those DevOps teams who were swiping the credit card because they need is something instuments they could develop something and then share it globally and now we've got ite organizations whose who stop fighting that and what they really want to do is be able to deliver that same experience in a control secured and you know financially viable way right to be able to support those DevOps initiatives let's talk about your partnership with HPE what are you guys doing with HHH PE you kind of what sets you guys apart yeah sure so WEEI is an HPE Platinum Partner and we work with HP across really their entire portfolio and we understand their initiatives around data center automation creating a hybrid IT environment some of the solutions that they have around the financial models for instance HPE green link is a way to create those those cloud like financial models in an on-prem environment and extend that as a public services so that you have that same experience of swiping that credit card and a public service so we work with with HPE is you know they're they're a leader in IT infrastructure and have been for a long time and across all of their product lines for compute storage and network how important is Green Lake and and how differentiable is it from you know other companies who who do this is it pretty much table stakes to be able to have that sort of pay by the drink is there anything unique and different about Green Lake was from your perspective yeah I mean there is right essentially it's giving organizations the ability to have that public service experience on Prem and consume what they need when they need it and then more importantly capitalize that if they really want to alright so you know many organizations are are trying to juggle that in that capital expense versus operational expense you know budget and so Green Lake allows them to have that subscription like experience in a capitalized model which is important for my organization's okay but so too is it their choice to go up extra capex is that was so they can okay and I can understand why some organizations would want to do that maybe there's tax benefits etc okay good I want to ask you about sort of clouds if it's so huge mega trend you know one of the super powers as they say we've heard the stats 80% of the sort of install base is still on Prem 20% only 20% has moved to the cloud we talk a lot about cloud 2.0 kind of a play on on web 2.0 what is that well it's containers it's hybrid it's it's multi cloud if you're thinking about the next era of cloud what do you see is 2.0 if we can kind of define that on the fly boy and on camera forevermore those reasonable parameters hybrid you know multi-cloud containers maybe infrastructure as a code yeah I mean so or is it all bs just acronym soup in our industry no I don't think it's BS right I think that any so let's take a look at the evolution of cloud right if you looked at it say into you know five years ago maybe 10 years ago everyone said that'll never happen we would never put our data out there it's not secure and then you looked at it say you know five years ago or less everyone was going to cloud we're just going to move everything we're going to dr everything over the and we're gonna get rid of all our data centers you know and then a couple years ago everyone said well hi hold on a second that that's probably not realistic right there's a use there's sometimes you know there's going to be a need to keep some data on prom either you know for compliance reasons or for technology reasons I mean we need the state of close to us for other things who knows what it is so hybrid cloud right and our abilities create all of these processes internally those automations to make that on-prem experience feel the same as it would in a public service is is where most enterprises have realized they need to be right so that's kind of been the journey to get here now I think that that that hybrid cloud experience that organizations are making these investments into right now it's probably well they're where they will be for the next five to ten years right and what comes after that you mentioned multi-cloud before right and I think that's probably a realistic expectation right as the commoditization of everything NIT occurs I this is just you know my speculation that that that may occur in the cloud as well right and so as the affordability and as you know the the the network performance and the cost of that ability comes down and and more and more commoditized there'll be fewer and fewer reasons to make those on-prem investments and so I think a multi cloud strategy becomes realistic for many organizations who already started that but got some stuff in Google we got some stuff in the drawer got some stuff in AWS but as we can make the platforms that our applications are running on kind of agnostic across cloud it's just another service sorry and and and organizations are going to go for the lowest costs and you know lowest risk environment if I can containerize most of my applications and I can move them from cloud to cloud because containers are very portable why wouldn't I do that I think that's where I said where it could possibly go within the next you know decade yeah if you can create that consistent experience across cause you and I have talked about this just in terms of the the big hyper cloud guys have have taken labour cost out of the equation and now they can charge you that convenience but your you believe that you can actually close that gap with on-prem infrastructure and I've often said that the traditional companies event the tech vendors they don't have to match the cloud capabilities they just have to be cloud like they can it can be good enough and and so my question is did you buy that and have they at least close the gap to the point where you can do a lot of the things that you can get in the in the public cloud and not have to pay for the automation so you can sort of replicate those substantially on print so so I agree right and here's here's an example of how I think that is happening if you look at what for instance Microsoft is doing without your stack all right what is that your stack it's the ability to extend you know Microsoft Azure cloud on pram by putting it in your data center now I've got this consistent platform across multiple locations on Prem and the cloud 8 OS is doing the same thing so that tells me that they also believe hybrid is going to be around for a while otherwise they wouldn't put effort into developing this platforms right to extend their own platform to your to your data center so another things is your question but I that's-- example to me of why I think hybrid is the way that most organizations are going and that the the industry in general including those those hyper scalars believe that that this is gonna be around for a while I'm glad you brought up Microsoft because they're fascinating example they everybody talks about the innovators dilemma and you would think that Microsoft was a company that was going to struggle with that what they've clearly figured out and they were early on with with Azure stack at the early point it's about the control plane the data plane and being able to have that consistent experience across clouds so ok so my takeaway is so infrastructure still is important these days gonna all these new emerging workloads you know matter there's it's it's also important to be able to replicate substantially that cloud experience on Prem in hybrid and that kind of sets up this really this new architecture I wonder if you could kind of summarize your vision of what new architecture looks like over the next you know five 10 years well I'll say it once again the you know the way to how do i summarize this developing an automated IT service delivery model that is cloud like in nature on prem and as well as extending that to public services and creating a single experience for your for your for your user base is where IT organizations are trying to put their effort today that's how they're trying that's what they're trying to get you for the future at least for the next five years or so creating a hybrid cloud environment is is the way that they're going to accomplish that who they choose as public services is generally a business decision it's not as much a technical decision but what they put on Prem has got to be able to you know to work with all of those environments and that sort of sort of summarizes what I think of cloud to dotto we haven't even talked about the edge but that's a whole another equation but the idea of leaving the data where it is if that makes sense and then shipping code to data is something this and building out massive distributed networks that actually talk to each other that is a great vision they have you've been an awesome guest thanks so much for coming on the queue really appreciate your time thanks for having me you're welcome and thank you for watching everybody this is Dave a latte we'll see you next time